I like Australia’s stock market right now. I think it provides you with a ton of upside potential.
I’m announcing that the 32-year bull market in bonds is officially dead. Be prepared for the consequences from rising interest rates in 2014. They could be catastrophic for bond market investors.
Don’t worry. The bubble “Quantitative Easing” has built is still intact. For now.
However, even though there’s breathing room, don’t think it’s time to breathe easy. There will be Hell to pay, just not now.
Exchange traded funds (ETFs) have changed the face of investing for individuals as well as institutions.
These relatively new investment tools have made it easier to play sector rotations, go short the market or even leverage positions.
The scary question is, is he continuing to wound this recovery on purpose or by accident?
And which answer is worse?
Last Tuesday, President Obama announced his “Action Plan on Climate Change.”
One of main “actions” is to kill a core piece of the US energy sector.
The Good News: The euro crisis has failed to explode in the last three years, in spite of repeated predictions that it would. Many commentators now rejoice that the problem is solved.
The markets have begun to swoon and one of the canaries was two Thai tycoons.
This pair of Thai tycoons, neither of them well-known internationally, has made a total of $27 billion in acquisitions in the past year, more than all Thai companies spent abroad in the preceding three years.
That’s the kind of statistic common in today’s global deal mania, fueled by the glut of funny money. It raises a dreaded question: what happens when the music stops, and when global leverage stops being so available?
We’re about to see….
The Thai billionaires – 74-year-old Dhanin Chearavanont and Charoen Sirivadhanabhakdi, 69 – were both well-established in the Thai business community, but nevertheless their combined $27 billion of acquisitions represented a risky gamble.
One bought a wholesaler on 50 times earnings, while the other bought the flagship Singapore brewer Fraser and Neave for $11 billion, quadrupling his holding company’s debt-to-earnings ratio.
The Trouble is Thailand has been here before – and well within living memory. It was an orgy of leveraged and overpriced acquisitions that led to the Thai banking and monetary crisis of 1997 that sparked an Asia-wide crisis and led to the Thai stock market losing nine tenths of its value.
In today’s markets, the aggressive Thai acquirers seem likely to be the first victims of any credit squeeze that might occur.
If you’re not familiar with the term “putting lipstick on a pig,” well I think there is an apt example at play again from the people who seem to be experts at applying the lipstick.
Bonds are integral to the entire financial system and the economy as a whole. At some point sooner rather than later, bond yields will start rapidly increasing – and the bond market will become a Death Star, devastating the global economy.
Investors should be very excited.
Because it’s only once in a very long time that investment watersheds like this happen and you can get some long-term positions at stunning bargains.