In case you missed me, here is my latest article on MarketWatch. Click here for the article on MarketWatch BALTIMORE (MarketWatch) -- If you listen to the pundits, almost everything you hear these days is talk of market uncertainty -- and that's clearly supported by a look at the shorter-term charts and checks of the leading volatility indexes. To put it bluntly, for lack of a better word, the market sucks right now -- and it has for a good while, as illustrated by the fact that the S&P 500 Index (MARKET:SPX) still stands at 1998 levels . But there's something else to consider, too -- and it's almost never mentioned by the mainstream media. There's a class of shares … [Read more...]

More on Chinese growth....the key take away is that China is achieving this with a per capita income that's less than 1/3rd that of the U.S. per capital income. Less than 1/3rd! By the numbers... According to CIA Factbook: China’s per capita GDP is $3,619  (based on official exchange rate GDP vs GDP purchasing power parity) of  $4.81 trillion total GDP (2009 est.) According to CIA Factbook: United States per capita GDP is $46,513 (based on official exchange rate GDP vs GDP purchasing power parity) of  $14.43 trillion GDP (2009 est.)  When China achieves per capita GDP of… $8,000, the country’s GDP will be  $10.64 trillion $10,000, the country’s GDP will be  $13.30 … [Read more...]

Two years ago I delivered a presentation to a stunned Money Show crowd in which I projected that China would overtake Japan as the world's second largest economy within 2 years. Most economists were reluctant to speculate on five at the time. I also stated that the Red Dragon will overtake the U.S. as early as 2020. Now the former is official...and the latter is right on schedule. http://finance.yahoo.com/news/China-overtakes-Japan-as-No2-rb-1097741380.html?x=0&sec=topStories&pos=6&asset=&ccode= Ignore this trend at your own financial peril. … [Read more...]

According to the NY Times, all 34,000 Goldman employees have been directed to clean up their language. The warning, by the way, was a verbal one which strikes me as somehow very ironic. Anyway...my guess is this is a public relations play aimed at removing anything that could give opposing lawyers or the investing public court of public opinion the idea that their traders are a bunch of notoriously foulmouthed punks out for their own interests at the expense of f-ing clients when the fit hits the shan. Wonder what the company is going to do about abbreviations? … [Read more...]

I was asked recently to flesh out some of my views by a TV producer trying to "fit" me into his program: Politics – I am generally apolitical. With very few exceptions, the system, is filled with a bunch of self-serving ideological numb nuts who are more interested in saving their own jobs and getting re-elected than in dealing with the very serious, very real issues at hand that are wrecking this country. What we are facing – pick a “what” -  is not a Republican issue nor a Democratic one…”it” is one requiring a concerted and united approach. Taxes – tax increases and rebates rob the American people of their future. Except for the extreme short term, they don’t work. … [Read more...]

The SEC changed an important rule in the newly passed financial overhaul bill signed Wednesday. Credit ratings agencies are no longer required to signoff for the sale of certainly newly issued bonds backed by consumer debt as they have in the past. And get the reason why...according to a story on Yahoo, the SEC fears that the financial consequences of the new financial reform bill makes it easier for investors to sue them if ratings prove inaccurate. Apparently it's okay for the SEC to let consumers get screwed by dodgy debtors while selectively changing rules to cover their own asteroids.   What happened to being the consumer's watchdog? Unbelievable. http://news.yahoo.com/s/ap/20100722/ap_on_bi_ge/us_financial_overhaul_credit_agencies … [Read more...]

Buried in the 2315 pages of the Financial Reform Bill is this little tidbit authorizing our leaders to work their "magic" on individual consumers (just in case $12.1 trillion is not enough): Section 1205, LOW-COST ALTERNATIVES TO SMALL DOLLAR LOANS (a) GRANTS AUTHORIZED.—The Secretary is authorized to establish multiyear demonstration programs by means of grants, cooperative agreements, financial agency agreements, and similar contracts or undertakings, with eligible entities to provide low-cost, small loans to consumers that will provide alternatives to more costly small dollar loans. Badda bing baby...sign up now and you too can get a payday loan from the United States government. … [Read more...]

Low rates, low loan demand and low economic growth. There's nothing to pull me in. Generally speaking even though the big boys continue to generate profits through "trading" absent a growing loan book all they're left with is a pile of cash to invest...at bargain basement yields. Better hope they don't go creating derivatives that offer higher "returns" which is what they did last time the yield curve got compressed like this and the pressure to perform grew. … [Read more...]

I was asked on Fox this morning whether I thought the host, Stuart Varney of Varney & Co, had been too negative lately. After some good natured ribbing, I got down to brass tacks. No - I don't think he and the Company are being too negative. The recovery hasn't met expectations and the profits we are seeing this morning are the result of more expense cutting not top line growth. Not only that, but top line growth looks soft. Don't expect anything to change until we see real growth on both the top & bottom lines. But do use the smack down to acquire global companies which offer built in diversification to hedge against a still weak U.S. with stronger growth in other areas...like … [Read more...]

Some 75% of reporting companies have beaten expectations by an average 30.2% so far...and the markets have not responded. I think that's due to three things: 1)       Traders are simply not seeing the mojo they need to commit more capital. Overall, they’re not selling it’s just that they’re not buying generally speaking which is a practice referred to as “walking away from the bid.” When they do this, the sellers must simply keep lowering prices. 2)      Last week saw three big misses in the economic world including the University of Michigan’s Consumer Sentiment figures, the Philly Fed, and the Empire State Manufacturing numbers. This points to more stagnant conditions … [Read more...]