Monthly Archives: August 2014

Video: Russia Forum 2010


Must watch video of a panel discussion with Marc Faber, Hugh Hendry, Nassim Taleb, Michael Power, and others at
The Russia Forum 2010.

As moderator, Marc Faber begins the discussion by asking the panel members how they would invest $100 million for the year ahead. A varied discussion on the global economy, geopolitics, inflation vs. deflation, risk, food and energy systems, and the rise of emerging markets ensues.

Great macro discussion with seeds of investing ideas and global macro trades sprinkled throughout. Don’t miss this one, and thanks to Jay at Marketfolly for highlighting this discussion.

Monday reading

Bit of a Monday afternoon reading list. Here’s what we’re looking at today and for the week ahead.

1. Bank profits dimmed by prospect of home equity losses.

2. Trader blows whistle on gold and silver price manipulation (Jesse’s Cafe).

3. Check out copper’s run back up to $3.50 over the past year.

4. The Wall St. Journal sees a light at the end of the bailout tunnel.

5. Economist special report: America’s economy set to shift from consumption and debt, towards saving and exports.

6. Gregor MacDonald and Stocktwits combine forces for the Macro Weekly letter.

Thanks for checking in. Reminder: you can also keep up with our latest links and thoughts on Twitter or subscribe to our RSS blog feed to keep posted with our market musings.

Marc Faber interview – Bloomberg TV

Marc Faber offers his views on the direction of the US stock market, the outlook for Asian shares, inflation, and the global economy in this latest Bloomberg TV interview.

On April 7, Bloomberg filed a story on Marc’s view of the current bear-market rally in US shares. The piece notes that Faber sees a likely 10% correction ahead for the S&P 500, after which US shares may resume their rally into the summer months.

Marc Faber, the investor who recommended buying U.S. stocks before the steepest rally in more than 70 years, said the Standard & Poor’s 500 Index may drop as much as 10 percent before resuming gains.

The measure may decline to about 750 and rebound after July, Faber, 63, said in a Bloomberg Television interview in Singapore. Global stock markets are unlikely to fall below their October and November lows, he said.

“We need some kind of correction, maybe around 5 to 10 percent, and after that we can maybe rally more into July,” said Faber, the publisher of the Gloom, Boom & Doom report. “The economic news, while it won’t be good, the rate of getting worse will slow down.” ”

This “deceleration of bad news” theme was touched upon by Marc in a previous March interview with Bloomberg TV. Meanwhile, Marc’s outlook for Asian shares is especially favorable, as these share markets are where he finds the most value.

See also: Marc’s pointed comments on the US government’s plan for the banks’ toxic assets and the “rotten apples” that are Tim Geithner, Ben Bernanke, and Larry Summers. Your thoughts?

Related articles and posts:

1. Stocks may see correction, Faber says – Bloomberg.

2. Soros: gain in stocks is bear-market rally – Bloomberg.

The Gold Standard: an interview with Guilio Gallarotti

Wanted to share this McAlvany podcast entitled, “The Gold Standard: An Unwelcome Political Restraint. An Interview with Guilio Gallarotti”.

Hat tip to Maoxian, who noted that Jim Grant recommended Gallarotti’s book, The Anatomy of an International Monetary Regime: The Classical Gold Standard, 1800-1914, to better understand the workings of a gold standard monetary system.

As I said on Twitter the other night, there are some fascinating insights offered by Gallarotti in this interview, particularly in his discussion of how universal suffrage politicized economics during the 20th century. I’m sure you’ll find much more of interest besides, so tune in to the interview above and enjoy.

Does real GDP growth signal recovery?

Over on Twitter this morning, The Kirk Report tweeted a link to a Wells Capital Management report that offers some upbeat news on prospects for economic recovery.

Here’s an excerpt from that report entitled, “Current Real GDP Recovery Looks as Strong as 1975, 1982 Recoveries”:

“Despite a strong fourth-quarter real GDP report, the debate surrounding the strength of the contemporary economic recovery lingers. Most seem to anticipate a subpar recovery similar to the last two during the early 1990s and after the dot-com meltdown in the early 2000s.

However, although the current recovery is only two quarters old, it is thus far closely tracking the strong recoveries of 1975 and 1982…”

There follows some interesting charts and data summaries which lead the authors to conclude that the current recovery, measured on real GDP growth, is much stronger than many had believed it would be.

I am happy to consider positive arguments for economic growth, but I’m also left to wonder how reliable these real GDP figures are, given the way we measure inflation statistics these days.

Tim Iacono at TMGM has a nice little chart that illustrates this relationship between real economic growth and inflation. Note how drastically the real GDP figures can change when inflation is overstated or understated.

For a more thorough discussion of why GDP figures are an unreliable and “heavily politicized” data point, please see this post on John Williams’ Shadow Stats report on 4th quarter GDP.

Added notes: this blog post from the Daily Kos site offers an upbeat outlook on the GDP numbers and jobs recovery, similar to the Wells Capital report. What are your thoughts?

Features of the Week

It’s been a while since we last updated our regular linkfest, but have no fear: “Features of the Week” is here. Enjoy the market-fueled goodness.

1. Jim Rogers chats with Pimm Fox about commodities, inflation, and the outlook for global equity markets – Bloomberg.

2. Hedge fund managers are cautious on market rally while real economy is shrinking; see liquidity driven market – FinAlternatives.

3. David Rosenburg fumes over the bear market rally – FT Alphaville.

4. The rise and fall and rise of US cities (interactive graphic) – Infectious Greed.

5. In depth interviews with Jim Chanos – Marketfolly.

6. Are gold and US Treasuries in conflict? – Gregor.us.

7. Don’t miss MacroTwits discussion hour with GregorMacdonald, Sundays at 9 pm EST – Stocktwits TV.

8. Has anyone noticed that silver is up 56% year to date? – Reuters.

9. Be sure to check in with Upsidetrader and Abnormal Returns for more excellent weekend linkfests.

Thanks for reading Finance Trends Matter. You can also keep with us via RSS and on Twitter. Have a great weekend!

New viewing options for Finance Trends readers

Blogger has introduced some new viewing options for blog readers and I wanted to share these with you. 

In addition to our regular site layout, you can now view Finance Trends Matter in five new formats called, “dynamic views” for readers

While I thought this would be a gimmicky style option, it turns out that the new views are pretty sleek and I imagine they’d be great for mobile web readers and iPad users. Here’s one format I particularly liked, called “flipcard“. 

As you can see, this view contains all our recent posts and I like they way the images from certain posts stack up with neighboring post titles. Pretty sharp, actually.

Take it for a spin. You’ll find a drop-down bar that lets you easily navigate the five viewing formats to find the one that’s right for you. 

Nassim Taleb on Antifragile at Google

 

Authors @ Google presents Nassim Taleb, discussing the concepts from his latest book, Antifragile: Things that Gain from Disorder

Here, Taleb offers his view that the opposite of fragility is not “robustness”, as commonly supposed, but anti-fragility. Whereas things that are fragile need to be handled with care and kept in a state of tranquility, things that are anti-fragile benefit from volatility. 

According to Taleb, fragility and anti-fragility can be measured, whereas risk cannot (in spite of what Ivy League academics with risk models may think). You’ll hear why anti-fragile systems have benefits that outweigh their risks, and why some fragile systems are vulnerable to “prediction error” and hidden, intolerable risks which vastly outweigh any associated benefits.

Using the example of Seneca, a wealthy Stoic philosopher who often imagined himself to be poor, Taleb suggests we should always try to have more upside than downside from random events – “and then you’re anti-fragile”. 

So let’s hear it for an anti-fragile world of “many highway exits and options”. It sounds a lot better than a world centered around top-down planning by the supposed elites.

Related posts

1. Nassim Taleb on Antifragility at Princeton.

2. Econtalk interview with Nassim Taleb on Antifragility.

Trade war brewing for China & US?

You might have noticed some headlines over the weekend about protectionist back-and-forth between China and the US.

Specifically, the issue at hand centered on US tariffs imposed on Chinese steel goods and a resulting Chinese probe into US car imports. Of course, this is just the latest chapter in a growing list of Sino-US trade disputes.

However, Monday’s news that a US trade panel has rejected an investigation into imports of Chinese steel fasteners may go some way to smoothing over latest tensions.

The timing of this trade debate is especially noteworthy as US President Barack Obama is scheduled to make his first trip to Asia next week, with stops in Beijing and Shanghai.

In the meantime, let’s take a look at this post, “Is There a Trade War Between China and the US?”, from Jim Gobetz (aka Aiki14) which examines trade practices between China and the US from both sides.

Confidence and mastery come from hard work and experience

Today’s motivational trading quote comes from Dr. Brett Steenbarger (Hat tip: Kirk Report). 

Confidence mastery work experience failure motivation Brett Steenbarger
Image (borrowed + repurposed) via Bruceelkin.com.

True confidence comes from within. It cannot be bought, it must be earned. As Dr. Brett points out, confidence and mastery are the byproducts of effort, failure, and learning along the way. 

“Genuine confidence comes from hard work and experience. Putting in the time to achieve mastery and getting knocked down enough times to know, deep in your soul, that you have what it takes to succeed.” – Brett Steenbarger

Self-knowledge may be another aspect of confidence. Is it tied together?

Have you achieved mastery in your field or in an area of life you are passionate about? What did you have to go through along the way? Are you still working towards your goals or expanding your “limits”?