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Tuesday, April 14, 2009
Faber Says S&P 500 May Rise to 1,000 on Bank Earnings (Update3)
April 13 (Bloomberg) -- The Standard & Poor’s 500 Index may rise 17 percent to 1,000 in the next three months as government spending boosts bank profits, investor Marc Faber said.
U.S. stocks probably reached their bear market low when the S&P 500 fell to 666.79 during trading on March 6, Faber, who publishes the Gloom, Boom and Doom report, told Bloomberg Radio in an interview from Thailand.
Financial shares may increase further after the S&P 500 Banks Index jumped 25 percent on April 9, the biggest rally since at least 1989. Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. are among more than 30 S&P 500 companies scheduled to announce results this week.
“You have essentially a government that gives financials free money at the expense of the taxpayer,” Faber said. “With this free money, they may actually have decent earnings in the near future.” (more)
The IEA warns of shortages - "The next oil crisis is coming"
by Michael Kläsgen
A shortage of oil could trigger another global recession around 2013 – says the IEA. By 2010 the price will reach new highs.
The IEA in Paris is warning of a new, much more severe global economic crisis around 2013. The reason is that investments in oil from new projects are being cancelled by large oil companies. If demand starts increasing in 2010, the oil price could explode, fire up inflation and put global growth at risk.
"We are concerned, that oil companies are reducing their investment levels. When demand returns a supply shortage could appear. We are even predicting that this shortage could occur in 2013." Said Nobuo Tanaka, head of the IEA in an interview with Sueddeutsche Zeitung.
Oil reserves declining markedly (more)
Moody's Downgrades The Whole Country
Joe Weisenthal|Apr. 8, 2009, 8:33 AM
The Federal government is still AAA, but every municipal debt issuer is now suspect and shaky according to Moody's.
For the first time ever, the ratings agency placed all munis on negative outlook, a precursor to potential downgrades. Historically, the agency looked at munis individually and considered them to be too diverse to make blanket statements about.
But it seems overspending and the hollowing out of the revenue base is a nationwide phenomenon affecting cities and states everywhere.
And of course the US government is affected by those same phenomenon -- we think the government's revenue expectations remain wildly optimistic, given the slowdown and the collapsing of the income gap -- but alas the Fed still has the printing press and should be able to hold onto its AAA rating for awhile longer.
Meanwhile, New York actually managed to float a bond at a 5.55% interest rate and a 2036 maturity. Who'd have guessed?
The Federal government is still AAA, but every municipal debt issuer is now suspect and shaky according to Moody's.
For the first time ever, the ratings agency placed all munis on negative outlook, a precursor to potential downgrades. Historically, the agency looked at munis individually and considered them to be too diverse to make blanket statements about.
But it seems overspending and the hollowing out of the revenue base is a nationwide phenomenon affecting cities and states everywhere.
And of course the US government is affected by those same phenomenon -- we think the government's revenue expectations remain wildly optimistic, given the slowdown and the collapsing of the income gap -- but alas the Fed still has the printing press and should be able to hold onto its AAA rating for awhile longer.
Meanwhile, New York actually managed to float a bond at a 5.55% interest rate and a 2036 maturity. Who'd have guessed?
Friday, April 10, 2009
The IEA warns of shortages - "The next oil crisis is coming"
by Michael Kläsgen
A shortage of oil could trigger another global recession around 2013 – says the IEA. By 2010 the price will reach new highs.
The IEA in Paris is warning of a new, much more severe global economic crisis around 2013. The reason is that investments in oil from new projects are being cancelled by large oil companies. If demand starts increasing in 2010, the oil price could explode, fire up inflation and put global growth at risk.
"We are concerned, that oil companies are reducing their investment levels. When demand returns a supply shortage could appear. We are even predicting that this shortage could occur in 2013." Said Nobuo Tanaka, head of the IEA in an interview with Sueddeutsche Zeitung.
Oil reserves declining markedly
He is alarmed, because he has data that shows that the global oil supply capacity is declining and that oil reserves will likely be markedly reduced by 2013. The stronger oil demand will be in a recovery starting in 2010, especially in the US, China and India, the sooner the shortage will appear and strangle global growth. (more)
Why I Prefer the Silver Lining
Howard Ruff
The Ruff Times
Posted Apr 6, 2009
In my recent interview on CNBC’s Squawk Box, I was asked why I preferred silver. Here’s why:
1) I am bullish on gold. I can enthusiastically endorse all the bullish arguments. In fact, my investment in the Central Fund of Canada Ltd. (CEF) contains one ounce of gold for every 50 ounces of silver. I am not negative on gold; far from it. It’s a question of better or best.
2) At these prices, gold is not a greatly in-demand industrial metal. It has industrial uses, but many of these uses are too expensive for gold. Gold is a monetary and jewelry metal. It also is enthroned in human consciousness as a store of value. I expect gold to continue to rise if Barack Obama continues to create so much currency.
3) Silver is also a jewelry and monetary metal, but it is also a very important industrial metal. It has over 2,000 industrial uses. Back in the ‘70s when I liked silver over gold, there was ten times as much silver above ground as there was gold. Despite that, we made two to three times as much money on silver as we did on gold. (more)
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