Saturday, July 6, 2013

Martin Armstrong View on Gold July 5, 2013

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America Leads The World In These 36 Shocking Categories…

American Flag
The 4th of July is a great time to celebrate our independence from Great Britain and to remember all of the sacrifices that our forefathers made to make this country great.  But is America still great today?  Have we squandered our inheritance?  Have we wrecked the great nation that previous generations handed down to us?  Those may sound like harsh questions, but the truth is that most Americans know that the United States is in decline.  In fact, a recent Rasmussen survey found that 49 percent of all Americans believe that the best days of America are in the past and only 35 percent believe that the best days of America are in the future.  Those are staggering numbers, and they are an indication that we need to take a good, long look at ourselves in the mirror.  Did we lose our way somehow?  If so, can we find our way back to where we were before?  We are a nation which is in trouble physically, mentally, emotionally, spiritually and financially.  Our house is crumbling and our foundations are rotting away.  We are in desperate need of national renewal.  The following are 36 embarrassing categories in which America leads the world…

#1 Of all the major industrialized nations, America is the most obese.  Mexico is #2.  Back in 1962, only 13 percent of all Americans were obese.  Today, approximately 36 percent of all Americans are obese.

#2 America leads the world in soft drink consumption by a wide margin.  Today, the average American drinks more than 600 sodas a year.  (more)

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Marc Faber – This Will End In Disaster

from King World News
With gold and silver plunging, the US dollar strengthening, and oil still above $100 a barrel, today Marc Faber told King World News this will “end in disaster.” This is part I of a series of written interviews that will be released today on KWN in which Faber discusses the end game, government theft, how investors can protect themselves, gold, silver, bail-ins, central planner actions, global markets, and much more.
Eric King: “Marc, you were talking there about the endless printing of money. Obviously it’s going to end in disaster, but when is that going to end?
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5 Rocket Stocks to Buy for July: AXP, CSCO, PETM, UNP, LNKD

Stocks are kicking off July with a shortened trading month -- markets close early on Wednesday and all day on Thursday for the July 4 holiday. One result of that bifurcated schedule is lower trading volumes in the latter half of the week. You can bet that traders will be taking Friday off en masse.

And that's especially interesting because of where stocks are sitting right now.
As I write, the S&P 500 is making yet another (so far unsuccessful) attempt at closing recapturing the uptrend that was in force for most of 2013. In other words, investors are going on vacation at a technically significant time for stocks. That should make for some interesting price action this week.

To hedge our bets, we're turning to a new set of Rocket Stocks for this week.
For the uninitiated, "Rocket Stocks" are our list of companies with short-term gain catalysts and longer-term growth potential. To find them, I run a weekly quantitative screen that seeks out stocks with a combination of analyst upgrades and positive earnings surprises to identify rising analyst expectations, a bullish signal for stocks in any market. After all, where analysts' expectations are increasing, institutional cash often follows. In the last 206 weeks, our weekly list of five plays has outperformed the S&P 500 by 79.52%.  (more)

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Investment 101: Basic Shorting

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3 Charts That Show the U.S. Housing Recovery

The U.S. housing market is back, baby!
After an epic meltdown following years of rampant speculation, the U.S. housing market has made serious recovery strides. Data from the National Association of Realtors on existing home sales in May continued to show the steady gains for the housing in the U.S.
Source: National Association of Realtors. May change reflects year-over-year change.
The overall pace of existing home sales has picked up and reached a seasonally adjusted annual rate of 5.18 million in May. As interest rates pick up, the refinance boom that's been going on for a few years is rapidly slowing. That will hit the fees that major mortgage originators like Wells Fargo  (NYSE: WFC  ) and JPMorgan Chase  (NYSE: JPM  ) collect when they originate a loan and resell it. However, if purchase volume continues to pick up, fees from those transactions could be a partial offset to the drop in refis.
Source: National Association of Realtors. May change reflects year-over-year change.
Compared to the home-price peak of more than $225,000 in 2006, the median existing-home sales price in may of $208,000 is still relatively affordable for home buyers. At the same time though, rising home prices are salve to the psyche (and overall wealth) of home-owning consumers. It's also a boon for banks as rising home prices makes homeowners less likely to default. Among the big banks, Bank of America  (NYSE: BAC  ) still has 2.6% of its loans in nonperforming status, while Wells Fargo shows 2.4%. Continued gains in home prices could help push those ratios lower.
Source: National Association of Realtors. May change reflects year-over-year change.
As sales pick up, the abundance of housing inventory that was sloshing around in the market is getting sopped up. Lower inventory helps underpin further gains in home prices -- remember Econ 101: lower supply can help push prices up. Tightening inventory is also music to the ears of homebuilders. Just this week, we saw solid quarterly numbers from both Lennar  (NYSE: LEN  ) and KB Home  (NYSE: KBH  ) . New orders at Lennar were up 27% year over year, while its backlog dollar value leaped 76%. At KB, homes delivered were up 39% even as the average selling price climbed 25%. In other words, both companies seem to be reaping the gains that we see in all three of the above charts.
The best investing approach is to choose great companies and stick with them for the long term.
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5 Turnaround Stocks You Can Believe In: BZH, CQB, GRPN, MTG, RAD

Everyone loves a good turnaround story; assuming you catch the rebound, not the downturn. There’s high risk/reward investing in a company that was once left for dead, and being selective is a must. A beaten down stock price is not necessarily a bargain, but a potential rebound can pay off big.

“You have to be skeptical with turnaround stories, obviously these are companies that had near-death experiences for probably very good reasons,” says Kiplinger columnist Kathy Kristof, in the attached video. “It’s a riskier segment of the market, but that also often means you have more potential for profit.”

Kristof recently wrote about five comeback stocks that each have different reasons for the investor to believe in their turnaround plans.

Rebuilding Sales
First on her list is Beazer Homes (BZH) –the Atlanta-based homebuilder that almost went under during the Great Recession. Shares hit rock bottom at $1.25 in March 2009. They’ve since rebounded over 600%.  (more)

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Treasury yields soar to 2011 high on jobs data

Treasury prices tanked on Friday after a stronger-than-expected jobs report, putting the 10-year note yield on track to once again close at its highest level since August 2011.

The 10-year note (ICAP.SD:10_YEAR) yield, which moves inversely to price, rose 20 basis points on the day to 2.698%, according to Tradeweb. The 30-year bond (ICAP.SD:30_YEAR) yield rose 15 basis points to 3.649% and the 5-year note yield (ICAP.SD:5_YEAR) rose 17 basis points to 1.583%.
The U.S. economy created 195,000 jobs in June, beating expectations of economists surveyed by MarketWatch, who had projected 155,000 jobs. That left the unemployment rate unchanged at 7.6%, a positive sign that indicates more people entered the labor force to find jobs. Figures for April and May were revised higher as well.

The payrolls report is closely watched by the bond market because of its implications for when and how the Federal Reserve may act to scale back its monetary policy. The Fed has said a wind-down of its bond-purchase program, which has held interest rates down, will depend on the pace of improvement in the labor market.

Given the positive payrolls numbers on Friday, market participants reaffirmed their expectations of a September time-frame for beginning to wind down the program.

“Tapering is in store, and we think the September call and $15-20 billion to start with is about right,” David Ader, head of government bond strategy at CRT Capital Group LLC, said in a note.

Treasury yields had been rising for much of May and June in anticipation of a scale-back in the Fed’s easy-money policy. While the haven government debt had settled over the last two weeks, the nonfarm payrolls report once again revived focus on the end of the program.

Thin trading volume after the Independence Day holiday in the U.S. was expected to exacerbate market movements in response to the data.

Stock futures rallied on the news.
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