Tuesday, September 24, 2013

Man Who Predicted No Fed Tapering Now Says To Expect Chaos

On the back of a wild week of trading in global markets, today the 42-year market veteran, who correctly predicted on Tuesday that the Fed would not taper, is now warning King World News that we should expect chaos in the aftermath of this week’s historic events.  He also discussed what all of this means for gold and silver.  Below is what Egon von Greyerz, founder of Matterhorn Asset Management out of Switzerland, had to say in his interview. (more)

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Chart Predicts a Double-Digit Breakdown in This Sector: iShares U.S. Home Construction ETF (NYSE: ITB)

The stock market put in a rather strong performance upon returning from the long Labor Day holiday weekend. The S&P 500 went on a seven-day win streak and the Dow Jones Industrial Average logged three consecutive triple-digit gains before the markets experienced some profit-taking Thursday.

This rising tide took many boats with it, including the homebuilding sector, which was reeling from Federal Reserve Chairman Ben Bernanke's hint in May that the Fed was considering reducing its bond buying program. The specter of rising interest rates cast a pall over the sector, which relies heavily on mortgage borrowing.

With tensions abating, at least temporarily, in Syria, the flight to safety in U.S. Treasury bonds is easing, so once again, rising interest rates are back in the fore. And this means the homebuilding sector's brief rally is about to come to a screeching halt.

The iShares U.S. Home Construction ETF (NYSE: ITB), which tracks the performance of home construction stocks, materials and fixtures makers, and home improvement retailers, rallied in early September. (more)

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Jim Rogers: The 3 Most Exciting Investment Opportunities Right Now

Commodities guru Jim Rogers lives in Singapore and is a well-known China bull, but the contrarian investor travels all over the world (and has circumnavigated the globe twice). So we asked where he sees exciting economic opportunities for average investors now.

Rogers tells The Daily Ticker there are great opportunities in Africa – he names Angola and Ethiopia specifically. He also is focusing on the South American country of Uruguay.
“I said to my wife, ‘let’s move to Angola – we could live like kings,'” Rogers, the author of Street Smarts: Adventures on the Road and in the Markets, tells us in the video above. “She said, ‘you move to Angola; I don’t want to live like a queen in Angola’…but you could!”

Watch the interview to see more of the off-the-beaten path, frontier destinations that Rogers finds exciting. He also tells us which economies seem the least dynamic to him right now.  (more)

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Lindsey Williams: How Interest Rates Will Implode the World Economy, Federal Reserve Test

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Gold: Not Much Of A Hedge For Anything, Unless You're A Centurion

Gold has many uses, but as a hedge against inflation or a declining dollar, it’s a flop.

That’s the conclusion of an exhaustive article in the current issue of the Financial Analysts Journal, which examines six different explanations for why gold prices rise and fall. Authors Claude Erb and Campbell Harvey, a professor at Duke University’s Fuqua School of Business, conclude that the assumptions of most investors — that gold rises during times of inflation, or serves as a hedge against a collapsing dollar — don’t measure up.

The most likely explanation for why gold prices go up is because gold prices are going up.
Gold, like homes during the housing bubble, displays what economists call “positive price elasticity.” When the price is rising, investors are attracted to gold and buy more. Rising purchases by China and other emerging markets may have driven gold’s price up at the margin, but investors have piled on too. They’ve accumulated 1,000 metric tons of the barbarous relic in the vaults of the SPDR Gold Trust, more than China’s suspected gold inventory. (more)

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These New High-Yield REITs are Currently a Bargain: ORC, OAKS, JMI

REITs have been taking a beating for the past year…
Annaly Capital Management, Inc. (NYSE: NLY), which is considered by many to be a proxy for the REIT sector, has lost about one third of its market value since September 2012.
Investors in Annaly who’ve endured those losses will need more than two years of its 15.31% dividend yield to break even.
But some analysts, including yours truly, think that there’s now value to be had in the REIT market thanks to these dramatic share price declines… And some of the more alluring options are lesser-known, newer REITs…(more)

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