Jeff Rubin: The End of Growth

Thursday, May 31st, 2012

 

 
Jeff Rubin, author of The End of Growth (his second best-selling instalment), discusses the effect and ramifications of expensive-to-produce oil, in the context of the developed world’s over-indebtness, with Pierre Daillie. He says our growth expectations, including those of Canada need to be adjusted downward, as low interest rates will not be sufficient to re-ignite growth, and the catch-22 of (high) oil prices will snooker (global economic) growth in the foreseeable future.

Rubin, former Chief Economist, CIBC World Markets, shares his current investment outlook as well.

At the heart of Rubin’s thesis is his well-informed premise that we’ve burned all the ‘cheap’ oil, and unless we learn to use less oil, growing global consumption of the black stuff can only come at growth’s expense.

Bottom line: We are destined to relinquish economic growth in return for the increasing global appetite for energy.

The End of Growth, by Jeff Rubin, is an eye-opener, an interesting and controversial perspective on the future of trending issues affecting global economic progress.

Discussion:
The End of Growth – Do You agree or disagree?

Tags: Appetite, Bottom Line, Canadian Market, Catch 22, Cheap Oil, Chief Economist, Economic Progress, Eye Opener, Foreseeable Future, Global Consumption, Global Economic Growth, Growth Expectations, Indebtness, Instalment, Investment Outlook, Jeff Rubin, Low Interest Rates, Nbsp, Oil Prices, Perspective, Premise, Ramifications, Snooker, Thesis, World Markets
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From High to Low – A Look at World Markets (Horowitz)

Wednesday, May 23rd, 2012

by Andrew Horowitz, The Disciplined Investor

It has been a wild ride over the past 52 weeks and some markets came out looking good, some not so good.

Clearly the U.S. has the best overall return in 2011 and that shows through on the peak to trough range – and still holding up well.

Europe (ex-Germany) has not had as good as a run. Even with the big uptick due to the LTRO, the markets have been punished.

Asia speaks for itself – Japan is still a mess though…

Copyright © The Disciplined Investor

Tags: Asia, Europe, Germany, Horowitz, Investor, Japan, Nbsp, Trough, Uptick, Wild Ride, World Markets
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Shanghai Index Leads Global Stock Markets

Monday, December 5th, 2011

“The herd/world markets seem to follow the lead of the Chinese Shanghai Composite Index, said Chris Kimble of Kimble Charting Solutions. “If support remains in place and the Shanghai Index can rally, this would be a positive for global equity markets, the opposite of the situation back at the April highs. Portfolio design/allocations should continue to be influenced by the action of the Shanghai Index.”

I have been alerting readers to this relationship ever since the Shanghai Index became the first major bourse to exit the credit crisis bear market, leading other markets by about five months.

Click here or on the chart for a larger image.

Source: Kimble Charting Solutions, December 2, 2011.

Tags: Allocations, Bear Market, Bourse, Chris Kimble, Credit Crisis, Five Months, Global Equity Markets, Global Stock Markets, Herd, Index Stock, Leads, Portfolio Design, Rally, Relationship, Shanghai Composite Index, Shanghai Index, World Markets
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TODAY! Beyond the Mattress: Income Strategies that Actually Work (CE)

Tuesday, October 4th, 2011

Tags: Accreditation, Broadcast Centre, Exchange Tower, Exchange Traded Funds, Fixed Income, Global Investments, Horizons, Income Strategies, Investment Management, Mattress, Natcan Investment Management Inc, Portfolio Manager, Rahim, Rouleau, Tmx, Toronto Stock Exchange, Tsx, Tuesday October, West Toronto, World Markets
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Internet: Land of the Free?

Wednesday, April 20th, 2011

Cell phones, computers, laptops, tablets and portable media players have freed Americans to access the Internet wherever they are and at whatever time of day. World markets are now updated every minute, news feeds change by the second, and the free flow of business communication never stops.

While the U.S. and freedom seem to go hand-in-hand, it may surprise you that the U.S. actually ranks second behind Estonia in Internet independence, according to an extensive study by Freedom House. Their new report, Freedom on the Net 2011, charts different countries’ Internet activity against accessibility, revealing some rather important clusters.

On one extreme, the U.S., U.K. and Australia have more than 70 percent of their population on the Internet and they enjoy almost total freedom—no surprise there. On the other extreme are Ethiopia, Cuba and Burma, where very few people access a heavily guarded Web.

As I’ve discussed previously (Read: A Look at China’s Twitter), China has an increasing amount of people on the Internet, yet there are severe controls in place to limit where they go and what they discuss. Mexico has approximately the same Internet penetration rate, yet a majority of the population is rural and lacks affordable access to the Web. Unlike China, the Internet in Mexico is mostly free of censorship: access to Facebook, Twitter, YouTube and blog-hosting services is available.

What’s interesting is the cluster of countries in the middle of the chart. From this group, Freedom House has identified five critical countries—Jordan, Russia, Thailand, Venezuela and Zimbabwe – where the Internet is both “vitally important and in significant danger of repression” over the next two years. Jordan, while it has boasted that it allows more freedom on the Web than other Middle Eastern countries, has strictly monitored Internet activity among citizens. There have even been incidents of popular news websites being hacked after posting sensitive material. And, as Venezuela prepares for a presidential election in 2012, restrictions to websites and blogs as well as censorship are expected to increase.

In Egypt, the Internet played a huge role in forcing Hosni Mubarak to resign because it allowed its citizens to organize protests in the streets. By the time the government stepped in to block Twitter and Facebook, two very important social tools to mobilize protesters, they were too late.

In the online world, the rate of change has been accelerated, and the countries in the middle section of this chart represent a tipping point. The number of people accessing the Internet will most likely grow, forcing countries to act. They can encourage the free expression we enjoy in America or create greater repression and begin a chain reaction that affects personal Internet users, businesses trying to compete worldwide and politicians trying to effect change.

By clicking the links above, you will be directed to a third-party website. U.S. Global Investors does not endorse all information supplied by this website and is not responsible for its content. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Tags: Business Communication, Censorship, Free Cell Phones, Free Flow, Freedom House, India, Internet Activity, Internet Land, Internet Penetration, Middle Eastern Countries, Minute News, News Websites, Penetration Rate, Popular News, Portable Media Players, Repression, Sensitive Material, Time Of Day, Twitter, World Markets, Youtube
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What Do Tuesday’s Elections Mean for Markets?

Tuesday, November 2nd, 2010

Today [published yesterday], the entire House of Representatives and one-third of both the Senate and state governorships are up for grabs. As Americans across the nation decide the direction our country is headed, market watchers are anxiously awaiting an outcome that could determine where the market is headed.

If history is any guide, the answer is higher.

This chart tracks the historical S&P 500 Index performance following mid-term elections since 1934. The strong rally over the past months has shot us above historical norms. Deutsche Bank says that we normally see a sell-off directly following elections while the results are digested, then an extended strong period follows.

Political experts are predicting Republicans will take control of the House [they have] and Democrats will narrowly maintain control of the Senate  [also true post election]. But we’re not political experts, we’re investors. So what does this mean for us?

We first must place today’s events in historical context. To help do that, we’ve brought in cycle-ologist Ian McAvity to place the elections and their expected market impact into historical perspective and offer insight into what the elections and other market events could mean for gold, commodities and world markets. Now is your last chance to sign up for our Post-Election Update Webcast with special guest Ian McAvity.

McAvity is a chartist extraordinaire, who will share with you ways to identify where we are in several different cycles: The Debt Supercycle, the Presidential Election Cycle and the Gold Cycle.

We hope you’ll join us for this special web presentation on Wednesday, November 3, 2010, at 4:05 PM ET.

Register Now

A replay of this webcast will be available following the live event

Tags: Chartist, Commodities, Deutsche Bank, Gold Commodities, Governorships, Grabs, Historical Context, Historical Perspective, House Of Representatives, Ian Mcavity, Index Performance, Last Chance, Market Impact, Mid Term Elections, Norms, Political Experts, Presidential Election Cycle, Replay, Republicans, True Post, Web Presentation, World Markets
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In Conversation with Dennis Gartman: Euro/yen, Gold, China and Real Estate

Friday, May 28th, 2010

Dennis Gartman discussed the significance of the euro/yen cross to world markets, gold, China, real estate and the economy, with Bloomberg’s Tom Keene and Ken Prewitt, May 26, 2010.

The main underlying point Gartman made is that the euro/yen cross serves as a reliable indicator of the direction of risk in markets, i.e. “Risk ON” or “Risk OFF.” A falling euro/yen cross indicates a withdrawal from risk trades (increased risk aversion, weaker markets), and a rising euro/yen cross indicates a extension of risk trades (increased risk taking, stronger markets). For this reason, it is worth keeping an eye on.

Below is the transcript of the interview.

(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)

Dennis Gartman, Economist at Gartman Letter LC, talks to Tom Keene and Ken Prewitt about the Euro-Yen

May 26, 2010

SPEAKERS: DENNIS GARTMAN, ECONOMIST, GARTMAN LETTER LC, TOM KEENE, EDITOR-AT-LARGE, BLOOMBERG NEWS KEN PREWITT, HOST, BLOOMBERG NEWS

07:20

TOM KEENE, EDITOR-AT-LARGE, BLOOMBERG NEWS: He’s just come back from board meetings at North Carolina State, where they will be in the Big Four next year in basketball. We welcome, Dennis Gartman. Mr. Gartman, good morning.

DENNIS GARTMAN, ECONOMIST, GARTMAN LETTER LC: Good morning, Ken, how are you?

Keene: Well, we’re very, very good. Let’s talk Euro-Yen. You and I love it equally. I would say technically it is incredibly well contained. Is Euro-Yen about a stronger Yen, or is it about a weaker Euro?

Gartman: Yes.

Keene: That was a good answer.

KEN PREWITT, HOST, BLOOMBERG NEWS: Yes, I liked that.

Gartman: It is about a stronger Yen. It is about a weaker Euro. It is about a stronger Yen, which quite honestly makes very little sense other than people unwinding carry trades and it is about a weaker Euro, which does indeed make sense as I think the Euro, the European Monetary Union has been splintering apart, the cloth, I like to say of the Union has been torn. And I’m not sure that they’ll be able to sew it back together.

Keene: All right.

Prewitt: Dennis, you keep an eye on Mrs. Watanabe. First, who is that and second what’s she up too?

Gartman: Well, Mrs. Watanabe is Mrs. Smith here in the United States. It’s whom I refer to as the average Japanese investor and quite honestly, one, she’s getting quite old; two, she’s a bit confused and three, she’d moved a great good deal of her money offshore because rates in Japan for so long had been very, very low, lower than any place else in the world almost near zero where everyone else has followed. And I think Mrs. Watanabe is probably still confused. What’s really happening is the hue, the larger institutional investors who had used the Yen as their borrowing weapon and had made trades abroad were either -

Keene: Right.

Gartman: – were probably unwinding massive carry trades that they had put on over the course of many years.

Keene: Dennis, in a minute here, I want to come back and talk about your terrific gold call. But in a minute here, I get so many emails that say, Tom, why do you care about Euro-Yen? Why does Dennis Gartman watch Euro-Yen?

Gartman: I watch Euro-Yen because I think it’s the temperature of the global capital market generally. As that cross gets stronger, it means money is being borrowed in Japan and put to work abroad, which is an element of risk being put on as that cross goes down. It means risk is being taken off the table. It’s really a very good thermometer, a health gauge of the health of the global capital market.

Tags: Accuracy, Basketball, Bloomberg News, Board Meetings, China, China Economy, China Real Estate, Commodities, Dennis Gartman, Direction, Economist, Euro, Euro Gold, European Monetary Union, Gold, Good Answer, Guarantee, Investor, Japan, Love, Mrs Smith, North Carolina State, Prewitt, Real Estate, Risk Aversion, Risk Trades, Speakers, Tom Keene, Trades, United States, Watanabe, World Markets, Yen
Posted in Bonds, Commodities, Gold, Markets | Comments Off

Making History with Infrastructure ETFs

Tuesday, April 27th, 2010

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This article is a guest contribution by Tom Lydon, ETFTrends.com.

Infrastructure investment is perched on the edge of history, and we’re in the thick of it. Between 2009 and 2015, trillions will be spent around the world building up bridges, roads, water systems and much more. By investing in infrastructure exchange traded funds (ETFs), you can be positioned to benefit directly.

Governments around the world have pledged to spend trillions of dollars over the next few years on the biggest global build-out of physical economic assets in the history of man. Eric J. Gerritsen for The Journal of Commerce reports that this boom is already in place and it will transform the way the world appears.

• Some of the changes expected to occur include how the world looks, gets educated, moves goods and services, creates wealth, treats the sick, cares for the poor, powers its homes and businesses and wages war. [Building Blocks of Infrastructure ETFs.]
• The Obama administration will spend $150 billion of its $787 billion stimulus plan on infrastructure and is expected to add to that.
• Many other countries are also going to invest in this sector: China has pledged $585 billion and stands ready to do more; India is expected to spend $500 billion on infrastructure from now until 2015; the European Union, $252 billion; Japan, $129 billion; Canada, $12 billion; Australia, $4.7 billion, Singapore, $13.8 billion; Germany, $42 billion. [4 ETFs for India's Growing Economy.]
• CIBC World Markets estimates total infrastructure spending over the next 20 years at $35 trillion. Some $3 trillion of fiscal adrenalin will be injected into the global economy in the next 24 months alone. [Brazil's Infrastructure ETF.]

A growing number of infrastructure ETFs have launched in recent months, giving investors more flexibility in how they access this growth. PowerShares, iShares and Emerging Global Advisors all have funds aimed specifically at growth in emerging markets. State Street and iShares also have broader funds that target both developed and developing countries. Many of these ETFs have heavy weightings in utility companies, so if you’ve already got utilities exposure, check twice to be sure you’re not doubling up.

For more stories about infrastructure, visit our infrastructure category.

• SPDR FTSE/Macquarie Global Infra 100 (NYSEArca: GII): This ETF has the heaviest U.S. weighting in an infrastructure fund at close to 40%; also holds Germany, Japan, France, United Kingdom, Spain and more.
• PowerShares Emerging Markets Infrastructure (NYSEArca: PXR): Gives exposure to China, Brazil, South Africa, United States, Taiwan and more.
• iShares S&P Global Infrastructure Index (NYSEArca: IGF): Gives exposure to the United States, German, France, Australia, Canada, Italy and more.
• iShares S&P Emerging Markets Infrastructure (NASDAQ: EMIF): Contains exposure to China, Brazil, South Korea, Czech Republic, Mexico, Russia and Chile.
• Emerging Global Shares INDXX China (NYSEArca: CHXX): Contains exposure to real estate management and development, metals and mining, electrical equipment, power producers, telecom, transportation and more.
• Emerging Global Shares INDXX Brazil (NYSEArca: BRXX): Contains exposure to metals and mining, power producers, transportation infrastructure, electric utilities, telecom and more.
• UBS E-TRACS Alerian MLP Infrastructure ETN (NYSEArca: MLPI): This brand-new fund launched on March 31; the fund’s constituents earn at least 50% of their earnings from assets that aren’t directly exposed to commodity price changes. ETNs are debt instruments backed by the full faith and credit of the issuer. [Differences Between ETFs and ETNs.]

For more stories about the growth of the infrastructure sector, check out our infrastructure category.

Source: ETFTrends.com, Making History with Infrastructure ETFs, Tom Lydon, April 21, 2010

Tags: Adrenalin, Brazil, BRIC, BRICs, Bridges, Building Blocks, Canadian Market, Cares, China, CIBC, Commerce Reports, Economic Assets, Emerging Markets, ETF, ETFs, European Union, Exchange Traded Funds, Gerritsen, Global Advisors, Global Economy, India, Infrastructure Investment, Journal Of Commerce, Russia, Stimulus Plan, Trillion, Trillions, Wages, Water Systems, World Markets
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Chinese Stocks – Finely Balanced

Thursday, March 18th, 2010

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As reported over the weekend (via US Global Investors), the latest Chinese inflation figures surpassed the one-year deposit rate of 2.25%. Negative real interest rates may provide an additional incentive to drive asset prices higher, increasing the likelihood of the Chinese central bank raising interest rates from a five-year low.

Source: US Global Investors – Investor Alert, March 12, 2010.

Fears of further monetary tightening in China have recently been weighing on the Chinese stock market. Of all the bourses, the Shanghai Composite Index (3,046 at the time of writing) is the only one trading below its 200-day moving average (3,059), albeit after yesterday’s good performance by only 13 points. Clawing back to above this key line and also breaking its high of March 4 (3,097) would be bullish signs. However, the February low of 2,935 must hold in order for the cyclical bull market to remain intact.

Source: StockCharts.com

The Chinese stock market was the first to turn the corner after the credit crisis sell-off – a full five months before the majority of indices bottomed in March 2009 – and is being watched closely to ascertain whether this market would be the first to spell danger for global stocks, i.e. the proverbial canary in the coalmine.

China Rate Hikes May Be Premature

Thursday, January 21st, 2010

An interesting report on China reveals that 8.0% growth is the minimum GDP growth China needs to achieve in order to keep things there going, and despite the 10.7% print this week, Michael Pettis of Peking University, discusses the fact that without the currency subsidy or the interest rate subsidy, many companies just won’t be able to make money.

Reading between the lines, it seems continued rate hikes as policy tightening, which has spooked world markets and commodities prices, would be premature. While China is experiencing asset price inflation, the export sector continues to be deflationary as there is still an enormous amount slack to take up.

Tags: Asset Price, China, China Rate Hike, Commodities, Commodities Prices, Currency, Emerging Markets, Export Sector, GDP, GDP Growth, Interest Rate, Michael Pettis, Money Reading, Peking University, Price Inflation, Rate Hikes, Reading Between The Lines, Slack, Subsidy, World Markets
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