Japan: America's Lost Decade

Stocks, dollar fall after weak US jobs report

(AP) -- Safety first. That appears to be the new motto for investors trying to figure out how bad the emerging slowdown in U.S. economic growth is going to be.

A disappointing jobs report sent investors out of stocks and the dollar Friday and into assets perceived as being safer. Foreign currencies and gold rose, as did bond prices, which sent interest rates lower. The yield on the two-year Treasury note hit a record low.

Stocks sank for most of the day but pared their losses in late afternoon trading. The Dow Jones industrials ended down 21 points after being down as much as 160 earlier in the day.

A closely watched monthly employment survey from the Labor Department confirmed what investors have been fearing: The U.S. economic recovery is weakening. Private job growth was just 71,000 in July. That's below what analysts had hoped for and far shy of the level that would be needed to reduce the unemployment rate, which remained steady at 9.5 percent.

It was latest sign that a slowdown in U.S. growth is the real problem with the global economy, not the European debt crisis that had financial markets in a tizzy for much of the spring. (more)

US economy 'on the road to deflation', warns Pimco boss El-Erian

Mohamed El-Erian, the head the world's largest bond fund, has said the United States faces a one in four chance of suffering deflation and a double-dip recession.

US consumers and companies are holding on to their dollars in a way that was unthinkable just two years ago

“I do not think the deflation and double-dip is the baseline scenario, but I think it’s the risk scenario,” Mr El-Erian, chief executive officer at Pacific Investment Management Co. (Pimco), told reporters in Tokyo on Thursday.

"If you wonder how meaningful 25pc is, ask yourself the following question: if I offered you that I would drive you back to work, but there's a one in four chance that I get into a big accident, would you come with me?"

Mr El-Erian, who helps manage more than $1 trillion in assets, warned that action needed be taken quickly to prevent a economic slowdown. (more)

Gerald Celente/Trends Research: Obama Performs for “The View”, Ducks Debate with Ahmedinejad

Last Thursday President Obama made an appearance on the mid-morning pop-TV show, The View. Criticized by opponents for brazenly exploiting the female-friendly platform to boost his sagging ratings, the appearance was applauded by supporters for cleverly reaching out to a normally unpolitical audience to drum up approval for his accomplishments and build support for his agenda.

Yucking it up with a panel of five ladies, the President of the United States of America fielded questions about Lindsay Lohan, Mel Gibson, Snooki, Chelsea’s wedding … and why he wasn’t invited.

Obama’s performance on The View generated saturation media coverage. What was not covered by the press, was that while Mr. Obama could find time for a third appearance on The View, he had (for a second time) rejected an invitation from the President of Iran to engage in a TV debate on matters of war and peace, life and death. (more)

3 Stocks for Investors Fleeing Bonds

Corporate bonds seem priced like Las Vegas houses, circa 2006. Current yields are puny – about 3% on 10-year issues of decent credit quality. Investors who collect them accept the risk of losing money if they sell before maturity, particularly if the economy falters or interest rates rise. Yet, investors continue stuffing cash into corporate bonds because short-term deposits pay nearly nothing and wild stock market swings make shares look unstable.

There's a case to be made for stocks at the moment (prices are too low relative to earnings) and against them (earnings are too high relative to the economy's size). Whichever seems more convincing, stocks look like a better deal than bonds. The earnings yield for the S&P 500 index (that is, earnings as a percentage of the stock market value of America's big companies) stands at more than 6%. The gap between that number and the 10-year Treasury yield is the widest in three decades, The Wall Street Journal recently reported.

The three companies below have earnings yields over 8% and dividend yields that are greater than the benchmark 10-year corporate rate of 3%. Also, these companies boosted their dividends within the past year. Bond investors are typically stuck with fixed payment rates. (more)

Hourly Action In Gold From Trader Dan

courtesy of jsmineset.com

Intermediate Low in Precious Metal Stocks?

By Chris Puplava

Created 4 Aug 2010

The Market Vectors Gold Miners (GDX) exchange traded fund has attempted three times in the past year to exceed its 2008 highs but has failed on each attempt. Prior attempts occurred after prolonged rallies that had exhausted much of their energy just to reach the 2008 high. However, in the present case the GDX is oversold on an intermediate basis and yet it is only a stone’s throw away from its former all-time high.

The Market Vectors Gold Miners (GDX) exchange traded fund has attempted three times in the past year to exceed its 2008 highs but has failed on each attempt. Prior attempts occurred after prolonged rallies that had exhausted much of their energy just to reach the 2008 high. However, in the present case the GDX is oversold on an intermediate basis and yet it is only a stone’s throw away from its former all-time high. What this means is that it could retest its former highs and still not be overbought, leaving plenty of energy left to rally further before becoming significantly overbought and depleted of much of its momentum. Perhaps the fourth time is the charm for precious metal stocks? (more)