The markets are in a party mode and have forgotten the approaching dark cloud of the “fiscal cliff.” The fiscal cliff refers to the expiration of Bush tax cuts and simultaneous significant reduction in government spending in the United States at the end of the year. The Congressional Budget Office
Now it is universally accepted that growth in China is slowing. If a large number of communications that we receive are any indication, North American investors make two underestimations: first how much China’s growth is really slowing, and second how much it can hurt their investments in stocks, bonds and
Central banks across the globe have been waging a war against the natural economic ebb and flow. Like any war, it has had many battles. Since 2008, central banks have won every battle. Now their luck is running out. I do not know how the war will turn out, but
The Federal Open Market Committee (FOMC) of the Federal Reserve System holds eight scheduled meetings in a year. The results of these meetings provide not only trading opportunities, but also extremely valuable data points for investments. The June 19 to 20 FOMC meeting is upon us. As always, there is
The two most important questions Will you lend to someone who is insolvent and has no plan to get out of insolvency at 1.47% for 10 years when inflation is running at about 3% and prospects of hyper-inflation loom? Will you sell good assets that are likely to protect your
At 11:26 a.m. today, I received an email from a well-known market guru who is an expert at technical analysis. The email declared that the pattern in gold was like a coil ready to start a new rally. At 2:00 p.m. the Federal Reserve Board and the Federal Open Market
The top three issues in the upcoming 2012 election are jobs, jobs and jobs. President Obama would be fighting against strong historical precedent trying to win reelection with unemployment staying above 9%. Over the last several months, unemployment has stubbornly refused to budge down. At 8:30 EST this
It appears that a big European bank got close to failure last night. European banks, especially French banks, rely heavily on funding in the wholesale money markets. It appears that a major bank was having difficulty funding its immediate liquidity needs. The cavalry was called in and has
It turns out that Mario Draghi is Super Mario. Mario Draghi is an ex-central bank governor of Italy who just took over from Jean-Claude Trichet the presidency of the European Central Bank (ECB). In a surprise bold move, Draghi announced that the ECB is lowering its main rate from 1.5%
Barack Obama in an attempt to reinvigorate his presidency and the economy has presented to the congress a jobs plan. The $450 billion price tag is larger-than-expected. The plan proposes to reduce payroll tax paid by employees to 3.1% in 2012 from the 4.2% level temporarily introduced this year. As