The Marc Faber Blog Childish Remarks: "The FED Asset Purchase Disaster?"

The Marc Faber Blog : Childish Remarks -The Asset Purchase programme of the Fed has been a complete Disaster

Doctor Faber's conclusions are first premature and more than likely wrong. 

In fact, it will be difficult to measure how effective Fed policy has been or will be as history has yet to unfold. Had Uncle Ben not implemented this program, then interest rates no doubt would be much higher than they are today. There are a lot of very nervous long-bond holders who were obviously more than happy to pass their holdings back to the Fed. Everyone is living in fear of a sharp spike in the long rates that would absolutely clobber the principal market value of these bonds.

But QE is not just about keeping rates low, it is also a crafty way to hold asset values in place, including the equity market. This may actually be its main purpose. The last thing the Fed and Obama needs is to have huge bond losses realized and recorded by banks, portfolios, and other financial intermediaries.

Such losses would vacuum up all the liquidity in the repo, bond and money markets faster than Lehman's 2008 debacle, as well as knocking the proverbial crap out of their respective equity boxes. Think about it - this prevention is moping up about 40 billion (possibly more) monthly in marked-to-market accounting losses that would be caused by sharp rate  increases.

Like the Fed we are holding back a few cards here, but in all likelihood, there is more to the Fed's QE policy actions than meets the eye - and Marc should be a little more careful with his remarks - they come across as premature and childish! 

And that's being kind.

Dr Peter G Kinesa 
August 28, 2013 

Marked to QE Market

Uncle Ben's Converted Losses 

                

PLATINUM WEALTH PARTNERS - #APPLE #FACEBOOK #BUFFET #TORONTO

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APPLE Drifts Without Jobs

 - Says Oracle CEO

Many months# ago we actually concluded that without Steve Jobs the company would not be able to repeat or meet the achievements or expectations of its founder. There is an artistic-creative element in people of Steve's character that cannot be replicated by professionally trained managers from Ivy-league business schools. 

Moreover, entrepreneurial vision and drive is a talent few ever configure in a similar way. 

So whether its Ford, Buffet, Carnegie, Gates, Stronich or Jobs, their unique compositions are rare and the companies they build and run are never the same once they move on.

Keeping Apple on the watch list, but our vision for the future remains short-sighted.

INVESTORS' INSIGHTS

First Financial Insights

August 16, 2013

# The Dr Peter G Kinesa Blog -  Where Marc Faber Sees Apple (APPL) Going

Doghouse- is that what I dressed for?

Facebook Executive Dumps Shares

One primary rule of investing - when the Company's top executives start dumping their shares, it's time to head for the hills. We are not going to set out all the reasons why and all the excuses executives use to justify their dispositions. Nope, instead we are going to ask you to look at the fellow captioned above and ask "what if this guy started dumping shares in that small town company from Omaha?" 

Never happened, and if it did - you know that the flood waters are really coming. 

It all boils down to how do you believe in folks that do not believe in themselves? Just plain-old folksy small-town stuff. There is however-  one City-slicker - Jimmy Rogers, who thinks that Facebook is not an investment, its a waste of time. We agreed with him then, and still do. 

This also may explain why Facebook users are so depressed - they finally figured out Jim's astute observation.

Stockholders may soon join its users, as t is still just a click away from ten or less, on the Ticker. 

INVESTORS' INSIGHTS

First Financial Insights

August 14, 2013 

WISE GUY

" Facebook is not an investment, it's a waste of time" 

Now if you think that I have any thing further to say here or want to challenge these two guys on their stock wisdom,  you do not know me yet. Let's face (sic) it, if Facebook is our leading technology company, then we are in a heap of trouble. Seems like some of their top executives think the same way too. Imagine if the President said, "but, after this - I am leaving America"

There is something in good-ole small-town wisdom that appeals to me. Right Zeke?

PLATINUM WEALTH PARTNERS

Dr. Peter G Kinesa

August 14, 2013

Sure Zeke, l'll BFF you????

FIRST FINANCIAL INSIGHTS: #TORONTO CONDO BUBBLE CRASHING  

TORONTO CONDO bubble CRASHING – WHAT NEXT? - READ MORE   2008 Meltdown or Japanese Bubble... (read more)

When will they ever learn? Or is it simply in the nature of our species to always create these gigantic credit-driven asset bubbles? And why is it a social phenomenon that no country, culture or region is immune to through-out history? 

From a investment view, we are seriously perturbed about Toronto's Condo Bubble and the possible outcomes that could occur when the bubble further deflates. As a result, we have placed a number of sectors on our watch list; obviously including  retail, financial, property development and construction industries. In the weeks ahead, we will provide further.comments and analysis regarding the much anticipated fall-out with more specific industry assessments.  

Remember also how globalization was sold to us as the best way to improve national economic well-being, standards of living, create jobs and lower risk levels. Now everything is so deeply inter-connected financially, physically and politically, yet these promised improvements seem to be moving us in the opposite direction. Do you think it was all a big lie serving a few special global interests? Do you think that they pulled the wool over the eyes of our political geniuses?  If you do - then you are not alone!

It begs the question - who is really governing sovereign nations given all the operative trade agreements, and organizations, such as the WTO, EU, IMF, World Bank and others, with relegated powers? Have all these supra-constitutional connections watered-down sovereign constitutions so much that national destinies have been moved beyond elected officials' powers? This may explain why Canada patterned its monetary policies after the FED - they have to!

This is a big issue that requires a good deal more analysis and thought, but there are clear hints that "globalization" was just a crafty synonym disguising "annexation". What does that have to do with the price of Condo's in Toronto?

Lots! Just ask its Mayor.   

  

INVESTORS' INSIGHTS

First Financial Insights

August 12, 2013

Asset Bubbles 101: 

In the end, remember nothing is...

  

What everyone should come to understand in the age of globalized economies is that no country, region or city is completely immune from the trends and events that occur around the planet. More so in the years ahead when shrinking raw material supplies and food stocks cause more unrest and political strife.In all likelihood making the originating shortages worse and causing spikes in CPI and accordingly the borrowing costs set by markets. 

Therefore, cities like Toronto may experience seemingly immune short-term booms, but the hardships of marginal countries ripple back, sooner or later . And as more and more countries are affected by climate change, resource shortages, social and political tensions, booms may actually become just pages in economic history books.Why? Because abstract economic theory's positive-sum-game is moving rapidly towards a head-on collision with existential economic theory's negative-sum-game. Somehow, reality has a way of defeating the wild speculations of old-age stories, as physics and mathematics are absolutely concrete in construction.

Having that in mind, we should be concerned that as the population-resources-depletion formula worsens we do not blindly fall into the "exponential economic trap". Illustrated by the simple idea.that when an element doubles with every unit measure of time, then at one minute to 12 its glass is half full -  fooling one to think a lot more time remains. What happens next is clear, but perhaps not so clear if the concept is ignored or misapplied. The exponential function in itself sets hard non-negotiable constraints on all asset bubbles, and also total physical economic outputs. We must remember not to forget the implications of this function and its real, but invisible existential constraints.

If we do, the clock says there won't be much, if any, time to fix the situation. This function is plainly ruthless.

PLATINUM WEALTH PARTNERS

Dr. Peter G Kinesa

August 13, 2013

#JAPAN - Radiation Leaks Escalate - Markets Nervous?

JAPAN - Radiation Leaks Escalate - Markets Nervous?

(Read More)

Stop the Nukes?

Continuing to keep an eye on this radioactive hot spot as it has significant implications on just about everything; including the Japanese money markets, economy, currency and world energy prices.  

Should pressure from this growing public concern force Japan's return to fossil fuels, then it should add further to global oil demand, moving prices much higher. What is really more concerning are the effects of this radiation on living and environmental conditions. Is there a possibility of turning parts of Japan into a giant nuclear wasteland? Remember too, the same folks trying to fix this problem were the ones who caused it! Einstein did not think that this was a good idea.

Lets not also forget that this will dampen interest in nuclear power, as an alternative to fossil fuel, around the world. Not good for an industry that is already struggling with slowing demand. But a positive change for fish stocks and those who depend on them for survival.

Meanwhile, do you ever wonder about the intelligence of our species?

"Jack, let's build a nuclear reactor?"

"Where Steve?"

"How's about by the ocean near lots of people and fish that sits on a fault line exposed to large tidal waves?"

"Are you sure Steve?"

"Certainly - it is the most economically viable choice"

Now imagine that some form of this line of simple reasoning actually occurred. Worse. It will probably happen again. 


Dr Peter G Kinesa
August 14, 2013

Remaining Fukushima Fish demand  vote?

The Marc Faber Blog: Recommends these Gold Mining Stocks : Newmont Mining, Barrick Gold and IAMGOLD

The Marc Faber Blog: Recommends these Gold Mining Stocks : Newmont Mining, Barrick Gold and IAMGOLD

(more video)

Remind me, why we are doing this, again?

Oh, to store it back underground???

These stocks are all on my top short sells  for 2013-14 list. Gold should collapse well below 1000 per ounce as Central Banks keep dumping reserves to preserve whatever political and economic stability remains before the lights go out. Cash costs of producing gold will make less and less sense, particularly as energy prices continue to rise. The choice between gold and food is obvious - thus making these puppies long-term residents of the dog house.

Anyway we find these recommendations a little contradictory when Mr Faber touts the collapse of markets, but these stocks are magically sheltered from this, thereby defying the "laws of systemic market risk" . Sorry, but we are not going to bank on that when an offer to buy the Brooklyn Bridge  is still on the table.

Folks we could go on and on about this, but I think the message is clear, do not invest based on promotional pieces; remember too, the connected interest and 25% personal portfolio position. Now, about that bridge...  

And by the way, even if we are right this time, it does not mean we will be right the next time. Or trust me, for that matter ever again - as every bet has its own probabilities. 

Dr Peter G Kinesa

August 9,  2013 

Now, about that bridge... 

Where Have All the Fish GONE?

Where Have All the Fish GONE?

Can you believe it? Not only are we running out of oil and many other non-renewable resources, but soon; it seems, we will also be runnung out of fish. This is much more than a staple, as fish has provided many dietary essentials, including protein, to places food alternatives are in short supply  So if you have some free time this weekend, you may want to do a quick read of the FAO report (linked above) which also covers many other foodstocks.

Recreational fishing may be a thing of the past in a few short decades or years, however the bigger concern is that populations continue to grow, while fish are dwindling in supply. Albeit there are some positive signs that with proper management some stocks have improved.  Nonetheless it is something else to think about.

Dr Peter G Kinesa

July 12, 2013 

WHAT! You mean they ate them ALL??? 

   

The Marc Faber Blog - Oil Prices Moving to $500? - (Video) Bullish on Crude Oil , Bearish on India

The Marc Faber Blog - Oil Prices Moving to $500? - Bullish on Crude Oil , Bearish on India

Not a good picture!

 

Impossible! Could Never Happen! Well actually in mathematical terms it has happened a number of times before. And $500 a barrel is not that ridiculous when you think about it.- that's just a five fold increase  Compare that to the jump it took between 1971 and 1980 when it moved from $2 to $35 a barrel - a 17 fold increase. Meaning a five-fold increase is possible and more probable to occur as time goes on.

So Marc's bullish attitude towards oil is well founded and supported by growing demand from increasing populations and on-going economic growth in Asian markets. However, it is quite the opposite on the supply-side as most believe we are at or near peak extraction and can no longer add to reserves an amount equal to this consumption.

Doing some simple analysis, we confront a rather disturbing destiny. With present global consumption running at 30 billion barrels annually - equating to 300 billion every decade - total  reserves of 1.2 trillion are thus set to be practically depleted by 2053, if not sooner.

But what comes between this date and now is much more disturbing, as the world scrambles to find a way to replace the cheap energy equivalent provided by these 30 billion barrels. One thing is certain, if alternatives are found they will not be any cheaper than today's energies prices. Expect more political and social turbulence as the world seeks to rebalance this physical loss of energy inputs - that will dramatically affect food and basic transportation needs. 


To the point, we are bullish on oil and bearish on currencies whose national economies are highly dependent on imported supplies - their turbulence could be devastating. As well it will place huge downside pressure on stock and bond markets - so cash, and better yet a farm, are certain to become increasingly popular as oil prices rocket to new heights.

Dr. Peter G Kinesa
July 11, 2013

One last drop -

The Boston Globe - Chief of US Pacific Forces Calls Climate Biggest Worry

Chief of US Pacific Forces Calls Climate Biggest Worry 

click above

When the US military realizes and states that climate change is one of the greatest threats to security we should be very concerned. Particularly, when we considered that often coined oxymoron " Military Intelligence" . Think about how much it takes these guys to figure things out, after all these years?

Enough said,  and let's have Admiral Samuel Locklear tell us about their profound "Ah Ha" moment -  I don't want to rain on their parade.

Dr Peter G Kinesa
April  15, 2013   

"Folks, you will never believe what I am about to tell you... " 

China Feels Inflation, CPI Spikes

China Feels Inflation, CPI Spikes

Before getting into the deeper issues - the first thing to put on the table is the CPI number itself. Who believes any financial number coming out of China?
Who believes that an economy can grow at 5,7 or 10% without experiencing any inflation? Who believes that an economy with excessive liquidity can hold prices down? Then there's the growing need to import more and more commodities... well, you can decide this one.

The real concern is whether currency games are going to become the new form of protectionism - a new form of trade war. With so many countries debasing their currencies - global inflation is certain to follow as more funny sovereign paper will be needed to buy real things. Now if we take the abstracts out of all this and remember that we are past peak everything  - prices of all commodities are sure  to climb dramatically. Some will be more intense than others.

Chinese inflation - you can bet the farm on it. But it is the new protectionism we are most concerned about and the trade of cheap, oppressed labour for scarcer resources. Who will level the playing field now?

Dr Peter G Kinesa
April 14, 2013

How's about a level playing field too?

  

INVESTORS' INSIGHTS - Jim Rogers:Facebook Is not an Investment, It's a Waste of Time

INVESTORS' INSIGHTS - February 18, 2013

"I told you we should LISTEN -"

Failing to listen. The list of corporate failures that can ultimately be blamed on this seemingly simple, but so often overlooked human attribute, has draged down so many of the once great and mighty. Reminding all of us, of the costs associated with thinking we know it all - when we are drunk in our current success. When in truth, the only thing that we can ever certainly know in this deterministic world  - is that we know nothing . 

So we continue to humbly listen, again and again and again.

Dr Peter G Kinesa

February 21,2013  

Jim Rogers: Facebook Is not an Investment, It's a Waste of Time

Click Above

Jimmy in this phone conversation says he is neither long nor short Facebook; he is simply just not investing. In investment parlance this means, he thinks the stock is garbage and would not touch it with a ten-foot pole. We agree.

First, Facebook ascribes to one of the worst American business practices and has little "human touch" in its business model. American businesses that fail on the world stage are often swept away by global competion because they do not have a High Touch with their customers. Any company that does not have a real person available to assist customers with service issues is doomed to fail - it happens all the time. The first rule of business success: "Listen, listen, listen, and then when you have heard enough, listen again and again and again " 

And the second rule that follows: Don't let your accountants run the business - need we say more? 

Second, its software is not intuitive, particularly for business, and again faces customer service challenges that will turn this market off in the early going. This market is where the real money is made.  They will not return once they have been turned off.

Facebook faces powerful copycat competition from the likes of Google, Twitter, Microsoft and others, who have other complimentary platforms where the combined functionalities of hardware and software configurations create synergies that could easily see Facebook's consumer markets stolen. Moreover, these powerful competitors have a strong presence and trust in the more lucrative commercial markets that are critical to long-term success and profits. We don't see a lot of businesses tying their destinies to what is perceived be to a kid's fad and consumer product. 

It is unlikely that Facebook can hold its valuations. The markets may give it a couple years, at most, to generate commensurate profits. Right now, that appears highly unlikely considering the tough competition in its most lucrative markets.

We go beyond Jimmy and expect this puppy to sink well below $10 in the next 12 to 18 months. More so, if interest rates climb in this period. So don't waste your time or your money on the long side of this hyped-up generational fad.

First Financial Insights

February 18, 2013

High Tech minus High Touch, Spells Disaster