Saturday, July 19, 2014

Guerrilla Economist V : End of the US Dollar and America WTSHTF

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Nigel Farage – Terrifying Banking Crisis Is About To Accelerate / July 18, 2014
On the heels of continued trouble in the European banking system, today MEP Nigel Farage told King World News that people need to brace themselves because the banking crisis is about to accelerate.  Farage also spoke about the new president of the European Commission and what investors should expect from the gold market since the banking crisis is only going to get worse from here.
Eric King:  “Nigel, I have to start off asking you about your new leader who heads up the European Commission.”
Farage:  “Yes.  The European Commission has a new president.  He is a man called Jean-Claude Juncker.  He was for 19 years the Prime Minister of Luxembourg.  This is the guy who David Cameron tried to oppose.  But it was 26 votes to 2 amongst the Prime Minsters that Juncker should get the job….
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4 Must Own Dividend ETFs

Of all the dividend ETFs out there, these 4 are core holdings.
The advent of the ETF has made it easier than ever before to construct a dividend-heavy portfolio. There are so many dividend ETFs available that it’s possible to customize a dividend-driven portfolio that fits your exact criteria for risk, dividend yield, and expected long-term capital gains.

The downside of infinite ETF choice is, well, infinite ETF choice. There are just so many possibilities out there, and so many different ways to construct a portfolio, that one can get lost and confused. Just like in the old days, when you were advised not to load up on too many mutual funds, you have to be careful not to load up on too many ETFs.

So I decided to find four dividend ETFs that I would be eternally happy with – ETFs that would pay high dividends and give me potentially modest capital gains, and that if I was never able to trade out of them, I’d be pleased to hold them no matter what.

1. iShares Core High Dividend ETF (NYSEARCA:HDV)
iShares Core High Dividend ETF (NYSE:HDV) is my first choice. It tracks the Morningstar Dividend Yield Focus Index, which holds 75 dividend-paying stocks that meet some interesting criteria. The companies must have an “economic moat”, which is “something inherent in their business model that rivals cannot easily replicate” and that have the potential to earn above average returns on capital. It has all the big names you’d expect in a large cap dividend fund, such as AT&T (NYSE:T), Wells Fargo (NYSE:WFC),and Johnson & Johnson (NYSE:JNJ). It’s a nice safe choice and yields 3.05%.

2. iShares US Preferred Stock ETF (NYSEARCA:PFF)
iShares US Preferred Stock ETF (NYSE:PFF) is a financials-heavy portfolio of preferred stocks issued by US companies. Preferred stocks have several advantages over common stocks. They are higher in the capital stack, so in the event of a company default, preferred stock holders will get repaid before common holders do. Common dividends must also be suspended prior to preferred stock. Also, preferred stock tends to trade more like bonds, so they usually move in a limited trading range, offering low volatility, but high yields. It yields 6.56%, and holds preferred stocks from all the major banks and financial services companies.

3. PowerShares S&P 500 BuyWrite (NYSEARCA:PBP)
PowerShares S&P 500 BuyWrite (NYSE:PBP) uses one of my favorite strategies to generate distributions for shareholders. It writes covered call options against long positions in S&P 500 stocks. The managers are content to collect premiums by selling call options on the stocks. If they get called away, so be it. They just buy the stock back and sell another call against it. If they hold onto the stock, that’s fine, too! It’s not great if the market gets clobbered, because they are writing calls and holdings stocks all the way down, but the premiums collected act as a hedge on the downside. It yields 6.93%.

4. Guggenheim Multi-Asset Income ETF (NYSEARCA:CVY)
Finally, I would choose Guggenheim Multi-Asset Income ETF (NYSE:CVY). This ETF invests across all asset classes in an effort to generate income from the entire economy. Financials are a bit heavier than I’d like, representing 37% of the ETF, with energy at 19%. But utilities are there at 8.5%, consumer discretionary at 8%, materials at 7.5%, and so on down the line. I like the diversification here. Its 150 holdings generate a 4.72% yield.
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Gold, Euro, Dollar & Where The Chinese Are Buying Real Estate / July 18, 2014
With action in the gold and silver markets heating up, today top Citi analyst Tom Fitzpatrick sent King World News four incredibly important charts which cover gold, the dollar, and the euro.  Below are the four key charts that all KWN readers around the world must see as well as a special bonus commentary from Art Cashin.
Here is what Fitzpatrick had to say along with his 4 key charts: “USD Index: The long-term chart remains compelling as it follows a cycle similar to the mid-late 1970’s and the 1990’s. We expect a continuation towards 100 or above over the next 2 years.

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Occult Message in Speech by Christine Lagarde of IMF

"7" references:
1:22 - "Now I'm going to test your numerology skills by asking you to think about the magic seven"
1:34 - "Most of you will know that seven is quite a number
2:24 - "2014, you drop the zero, fourteen, two times, seven"
4:08 - "It will mark the 70th anniversary, 70th anniversary, drop the zero, seven, of the Bretton Woods Conference that actually gave birth to the IMF" (7 + 0 = 7)
4:22 - "And it will be the 25th anniversary of the fall of the berlin wall, 25th.." (2 + 5 = 7)
4:38 - "It will also mark the 7th anniversary of the financial market jietters"
5:08 - "After those seven miserable years, weak and fragile"
5:14 - "We have seven strong years"
5:43 - "Now I don't know if the G7 will have anything to do with it" (G is also the 7th letter of the alphabet)

"2014" references:
1:18 - "The global economy and what we should expect for 2014"
2:19 - "So if we think about 2014"
2:24 - "2014, you drop the zero, fourteen, two times, seven"
3:54 - "So 2014 will be a milestone and hopefully a magic year in may respects"
5:05 - "So my hope and my wish for 2014"

To watch the full video go to:
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McAlvany Weekly Commentary

Stock Sirens Sounding

About this week’s show: 
- Corporate cannibalism is not organic growth
- Basel questions perceived stability
- Lehmans to Lehmanade: Still in trouble
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Canada’s Magnificent Housing Bubble at Risk, Fitch Says / by Wolf Richter / 
Ratings agency Fitch, which is in the business of slapping high-grade ratings on iffy bonds so that they can be sold to conservative pension funds around the world, and which is not in the business of considering entire asset classes overvalued, nevertheless considers the Canadian housing market “20% overvalued in real terms.”
And that in a world where nearly all asset classes are overvalued! Natixis, the asset management and investment banking division of Groupe BPCE, the second largest bank in France, grappled with that issue and came out predicting the likelihood of another financial panic [ What Happens When ‘All Assets Have Become Too Expensive?’].
But not in the Canadian housing market. To come up with the conclusion in its report, Fitch didn’t look at an obvious chart, like the one below, or at other obvious measures, but at its own “sustainable home price model, which measures home prices relative to long-term fundamentals.” If it had looked at the chart below, it wouldn’t have come up with 20% but with a number closer to 100%.
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