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Monday, February 4, 2013

4 Black Swans That Could Jolt the Market in 2013

A few weeks into the New Year, investors seem to be in a carefree mood. The traditional measures of volatility remain at extremely low levels. After all, the European economic crisis has calmed, budget negotiations in Washington aren't front page news at the moment, and earnings season is unfurling without much drama (except for Apple's (Nasdaq: AAPL) sobering near-term outlook).
How little volatility is there in the market? The Volatility Index (VIX), which uses options trading activity as a gauge of investor fear, is at its lowest level in two years.

 
Though investors were a bit spooked in late December in the face of the budget crisis (which temporarily spiked the VIX), the long-term volatility trend has been gliding lower. Simply put, investors know the typical risks that can derail the market, and they are expecting little drama in coming months.  (more)
 
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Energy Expert Discusses Uranium & Energy Sector Investing



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An Austrian view of the VIX

by Martin Sibileau, Sibileau:

A corollary of this Austrian view of the VIX is that under a system with simultaneously a gold standard (i.e. commodity backed currency) AND a 100% reserve requirement (i.e. no credit multiplier), the weight of implied correlations in the determination of a forward looking implied volatility index should be irrelevant.
Please, click here to read this article in pdf format: January 31 2013

The collapsing CBOE Volatility Index (VIX) and its implication that it is now safe to dive into equities has received much attention in the press (see here and here). Today, I want to briefly discuss what this index represents and implies
What is the VIX?
Read More @ Sibileau.com

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Eric Sprott Speaks to CNBC’s Gary Kaminsky About Gold & Silver













[Ed. Note: Skip 4:00 minutes in to see the interview with Eric Sprott.]
CNBC’s Gary Kaminsky speaks to Eric Sprott, Sprott Asset Management about why gold is printing $1,675, and what he expects from the commodity this year.

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The Un-Manipulated Market That Keeps Merkel Awake At Night

zerohedge.com / By Tyler Durden / February 3, 2013, 14:14
It would appear that either Germans have stopped using electricity (now that is some severe austerity) or the ‘real’ economy in the core powerhouse of Europe’s growth is struggling notably more than the nominal price of its stock market would imply. Applying the same ‘myth-busting’ data-series to Germany as we have in China, it is clear that expectations for greater electricity demand (and implicitly economic growth) are grossly different to the expectations priced into German stocks.
…or they just discovered cold fusion…
Zero Hedge

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Be Uncle Sam's Landlord -- and Get a 7% Yield

The idea to take on more risk has been sacrosanct among investors since the Dutch East India Co. issued the first publicly available shares more than 400 years ago. To this day, most financial advisors build their client portfolios around a combination of stocks, bonds and commodities, depending on how much these clients need at retirement and how much risk they're are willing to take.
 
At least, that is the idea behind most investments.

But if you want a higher return, then you have to take more risk.

A "safe" asset such as the 10-Year Treasury bond, for example, won't do a lot for your portfolio. It's known to be "risk-free," because it is assumed that the U.S. government will always pay its debts. The yield on the bond is used as a measure for all other risky assets, including stocks, bonds or commodities. But the "risk-free" bond yields a measly 2%, while corporate bonds and blue-chip stocks don't yield much more either.

So what if I told you I found a stock that can add market-busting returns to your portfolio with less risk than you might suspect?

Here's the story...(more)

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US Weekly Economic Calendar

THIS WEEK'S U.S. economic reports
time (et) report period Actual CONSENSUS
forecast
previous
MONDAY, FEB. 4
10 am Factory orders Dec.   2.3% 0.0%
2 pm Senior loan officer survey 4Q   -- --
TUESDAY, Feb. 5
10 am ISM nonmanufacturing index Jan.   55.0 55.7
WEDNESDAY, FEB. 6
  None scheduled        
THURSDAY, FEB. 7
8:30 am  Weekly jobless claims  2/2
360,000 368,000
8:30 am Productivity 4Q   -1.5% 2.9%
8:30 am Unit labor costs 4Q   3.5% -1.9%
3 pm Consumer credit Dec.   -- $16 bln
FRIDAY, FEB. 8
8:30 am Trade deficit Dec.
-$45.5 bln -$48.7 bln
10 am Wholesale inventories Dec.   -- 0.6%

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