Wednesday, May 21, 2014

Remarkable Information Kyle Bass, Dylan Grice & Others Shared / May 20, 2014
Today John Mauldin spoke with King World News about remarkable information Kyle Bass, Dylan Grice, Niall Ferguson, Jonathan Tepper and others shared at his conference in San Diego.  Mauldin, President of Millennium Wave Securities, also discussed the bubble nobody is looking at which is going to create serious problems.
Eric King:  “John, you just finished with this major conference in San Diego.  It was very high-powered.  Would you mind talking about who was there and what you heard?”
Mauldin:  “We had something like 20 speakers — Kyle Bass, Dylan Grice, David Zervos, Gary Shilling, Ian Bremmer, Niall Ferguson, Anatole Kaletsky, Jeff Gundlach, Grant Williams, Jonathan Tepper, Neil Howe, Lacy Hunt, George Gilder, Stephen Moore.  So it was a pretty high-powered group….
Continue reading the John Mauldin interview below…

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Federal National Mortgage Association (OTC: FNMA): This 'No-Brainer' Stock Could Quadruple

Every once in a while the markets hand you an investment that practically screams buy or sell.
Unfortunately, it's usually only in hindsight that it becomes so obvious... but once in a while, the market gives you the clues that an investment could go much higher. The investors savvy enough to catch on are anointed gurus as the rest of us wonder why we didn't see the writing on the wall.
While some of these "no-brainer" investments jump spectacularly, leaving little opportunity for later investors to profit, others are more gradual in their rise. (more)

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Food Prices Set To Rise Again: Weather Experts Predict El Niño Comparable to the Destructive 1997-1998 El Niño

The 1997-1998 El Niño is estimated to have caused over 23,000 deaths worldwide (source). With forecasters saying that the signs point to an 80% chance of a strong El Niño forming towards the end of this year, what impacts can be expected?

While some areas such as the West Coast of the United States could get a massive amount of rain (very welcome after record breaking droughts), other areas that rely on rain for agriculture will be left bone dry. A strong El Niño also increases fears that production of many key agricultural commodities in Asia and Australia will suffer.
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Richard Russell – I’m Afraid We’ll See Blood Spilled In America / May 19, 2014
Today KWN is publishing another important piece that was written by a 60-year market veteran.  At nearly 90 years old, the Godfather of newsletter writers, Richard Russell, warns that we will see blood in the streets as Americans revolt because of skyrocketing food prices.  Russell also discusses the missing U.S. gold hoard and more.

Russell:  “Headline in today’s WSJ: “Lackluster Earnings Leave Stocks on Thin Ice.” The article continues — “Investors had expected results to improve in the second quarter. Analysts are forecasting a 6% profit gain. Yet of companies offering guidance, 72% have warned that second quarter results could fall short of Wall Street’s expectations, which isn’t great but is better than the 80% level of the past three quarters.”

People are frightened, and they are ready to believe that a catastrophe lies just around the corner. They are pulling their hair out trying to find some way of creating income. In their frantic search for income, people are ready to believe any hare-brained scheme that promises them profits and income.
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Which Resource Areas Show Signs of Strength? / By Frank Holmes / 20 May 2014
Global synchronized growth, as measured by the Global Purchasing Managers’ Index (PMI), remained stable or positive for the past 12 months until Japan reversed the momentum in April with a precipitous drop in its PMI.  China is contributing modest growth but, fortunately, the U.S. and Europe are rebounding. This lack of consistent global momentum has created a short-term, volatile, hot and cold, stop and go sentiment.  Global real GDP growth peaked in 2010 at 5.2 percent, then slowed for the next three years, to 3 percent.  Global growth in 2014 is likely to accelerate, for the first time in four years, to 3.5 percent, according to ISI. This is constructive news for commodities.
Brian Hicks and I co-manage the Global Resources Fund (PSPFX) using a model that focuses on companies demonstrating robust fundamentals in sectors showing strength.  I’ve asked Brian to share his thoughts on the opportunities we see in today’s market.
Q: We’ve seen strength in the major oil companies, service and equipment companies, oil and gas exploration and production (E&P) companies, chemical companies and refiners. What’s behind the strength?
A: The major oil companies have benefited from higher Brent pricing and cheap relative valuation to energy and the broader market. E&P stocks are especially solid because the price of oil is strong. The shale revolution has been a transformative factor for a lot of companies in this space, creating very strong growth in production. Chemical companies and refiners are downstream beneficiaries of the shale play as relatively inexpensive oil and natural gas priceslower their main input cost in the manufacturing of chemicals and refined petroleum products.  Because of this competitive advantage in the U.S., we’re seeing chemical companies moving back to the states and creating jobs. Global demand is also increasing for oil and chemicals.
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