The Jim Rogers Blog : WE ARE IN BIG TROUBLE! - There is a huge artificial Boom (video)

The Jim Rogers Blog : WE ARE IN BIG TROUBLE! - There is a huge artificial Boom (video) 

We are right behind Jim on this issue and recommend reminding yourself often and keeping an eye the ball, not getting caught when the trap collapses.

  INVESTORS' INSIGHTS

This is beginning to sound like a chorus line with a song that sings about the coming collapse of almost every kind of asset value. We recently commented in The New York Times that values could collapse by as much as 50% should long rates rise by 2% or more. Readers got mad at us, but it's not our fault, because we did not invent financial mathematics -someone else did! Nor we do believe that these rules are open to negotiation, legislation or persuasion of any kind. They are absolute.

So how did we ever get backed into this corner? Well. you can blame the usual suspects who lost sight of common sense and were "influenced by the political immediacy of their times." Now there is no where to run or hide.

INVESTORS' INSIGHTS
First Financial Insights
August 1, 2013

Remember these guys - Unusual Suspects?

The Paul Krugman Blog - Detroit, the New Greece

The Paul Krugman Blog  -  Detroit, the New Greece (Read More) 

Streets of Athens, Remember? Circa 1967???

As Dr Kinesa points out in his recent article, there is a lot of analysis and navel-gazing required to sort out the problems of both Greece and Detroit, who share many similarities. By the way, a better title may be "Greece, the New Detroit?"

Why don't we just state the obvious here? That is about the differences between recent economic successes of China and for some time Japan, and failures of centres; such as Detroit, Greece, Portugal and others. Imagine over the years, that the winners actually have had a "economic business plan" that they execute to, by using both free and centralised policies and tactics. ( seems they also better learn and apply MBA thinking?) Meaning that over reliance on "invisible market forces" to attain the optimal economic state is not a panacea, in fact, it is plain foolhardy - results speak for themselves.

Anyway, when a National Business Strategy is employed, it creates a different outcome because it focuses the nation or centre on simple stuff like; What can we do better then others? Where can we build long-term sustainable comparative advantages? And thats where all that weaknesses, strengths, opportunities and threats thinking occurs, breeding realistic paths forward.

Bottom line; we see that the winners are executing successful National Business Strategies that have little to do with whatever is trending in the Schools of Economics. Imagine! 

That's our short take on it - but never forget what you paid for free advice.

INVESTORS' INSIGHTS
First Financial Insights

July 25, 2013

Streets of Detroit  -  2012

When did it really go Bankrupt???

The Marc Faber Blog : Somewhere down the line we will have a Massive Wealth Destruction

The Marc Faber Blog: Somewhere down the line we will have a Massive Wealth Destruction

Just a short post noting that Marc's 50% prediction is in line with what we suggest is a possible valuation adjustment in our July 17th comments on Paul Krugman's Blog - Prophecies of Maestrodamus.

Not a hard one to figure out as it is really just "present value mathematics" whereby if long 30 year bond rates double, then their market value dips by 50%. Very straightforward mathematics that no amount of economic theory nor policy measures can override as it is simply a hard conceptual constraint. Mathematics cannot be persuaded, legislated nor negotiated with - and that should come as no surprise to anyone.

Down the line, looks to be a scary turbulent road ahead. 

We will post more comments from this blog later on.

INVESTORS' INSIGHTS
First Financial Insights
July 21, 2013

What waits down the line?

The New York Times The Prophecies of Maestrodamus Paul Krugman

The New York Times 

The Prophecies of Maestrodamus

Paul Krugman

Comments:

"I know one thing; that I know nothing" Hmm. I think we could all learn from one of Socrates’ last thoughts - but you never know!

Still we could attribute much of our current mess to too many who believe they know - then later we find that even simple notions were somehow forgotten. Or a fog had set in. (- R. S. McNamara).

Despite what may be economic headlines today, Greenspan's legacy may be his contribution to our current low interest rate trap - that has lasted for much too long. Getting out of it could trigger a massive deflation of financial assets - causing an unprecedented ASSET VALUE WRITE-DOWN. Evaporating years of value in moments.

A mere 2% rise in rates, for example, could deflate financial assets by as much as 50% - wiping out the equity boxes of financial intermediaries and banks , while creating massive unfunded pension and insurance fund liabilities on the basis of marked to market accounting calculations. =ing HUGE liquidity CRUNCH.

Moreover, the total value of US federal debt could grow substantively with a mathematical pen stroke, which has little to do with deficits or economic theory and activity. And I don’t even want think about what could happen if rates should revert to levels over their historic mean; it would be devastating.

So it seems that the Maestro knew how get us into this trap, but did not know how to get us out of it - but then again "who knows?" And as far as we know, he's still on first...

INVESTORS' INSIGHTS

Juky 17, 2013

I don't know?

ALJAZEERA - (English) Worldwide PC sales keep sliding

ALJAZEERA - (English) Worldwide PC sales keep sliding

Lenovo (China) Top PC Maker???

Bad news for everyone, except China as they take the leadership position in another market that has long been dominated by American makers for decades. Who do we blame this on? Management? Tablets? Consumers? Or China's low cost producer strategy for an industry where products are becoming commoditized, as it really does not take that much to do the reverse engineering. Again China is following a "national business strategy" much like Japan did from the 60's onwards in automotive and consumer electronics.

But the real issue is what good is the WTO? How does it ensure that everyone is on an equal playing field when labour, environmental, and health standards are barbaric is contrast to North America. Add to all that a fixed currency to the US dollar and this game becomes a one horse race.

But who loses big time? North American and European union and salaried workers. In fact, in America the real hourly wage, according to St Louis, FED statistics have not risen much since 1982! So, where are the unions???

Beyond all this meaning more doom and gloom for the ordinary American worker, here 's list of PC makers facing tougher times as this saturated market begins to consolidate. Smaller players will be forced to merge or simply fade away into the sunset - while margins face continued presures from commoditization.

TOP Five PC Makers

  41% (est) Market Share

Lenova

Hewlett Packard

Dell

Acer

Asus

INVESTORS' INSIGHTS
First Financial Insights
July 16, 2013 

Those were the days - "in our home towns... and they ain't coming back"

- Bruce Springstein

MARKET ALERT - Financial Times - Portugal's Bonds Soar 7.9% - MORE Euro Troubles

MARKET ALERT

Europe shifts back into the spotlight this week, as Euro bond yields could soar higher and then reverberating around the globe as jittery traders push the button. Bond Vigilante's may be in for an early Christmas Bonus - long before the.summer is over. It is unlikely that equity markets can protect themselves if the bonds decide to take cover. Safety first, and every man for himself.

First Financial Insights
July 12, 2013

Financial Times - Portugal's Bonds Soar 7.9% -  MORE Euro Troubles  

Just add another country to the list of European nations that are seeking "national salvation" as 10 year bonds rose to 7.9% this past Friday, settling back to 7.27% - up 53 basis points. Again the neo-classical economists have no solutions and no plan, other than to print money and provide bail-outs. Nor do they even remotely understand that the underlying issues stem from physical economic constraints - too many people and too few resources. So the economic cancer that came to the forefront in Greece, is masticating around the continent, remember Cyprus just a few short months ago . 

Here's the real problem - as Europe falls apart and bond yields move to 10% and higher in these "thinly traded markets," the fears will begin to take hold and grip the global markets as well. At the same time, the European economies are also starting to slip into one of the profoundest depressions ever to be experienced, as asset prices deflate and consumer disposal spending is over-burdened with huge increases in debt service costs. A One - Two body blow.

This could be the snowball that plunges the bond markets into a long bear-cycle. Expect the turmoil in Europe, to test the nerves of jittery bond traders in Asia and North America this week. And this could also trigger long over due downside actions in the equity markets around the world next week.

Seems like there is no where to run; no where to hide.For now.

INVESTORS INSIGHTS

First Financial Insights

July 11, 2013

Who will pull the trigger?

THE JIM ROGERS BLOG - Rogers: More Money has been lost in GOLD Mining Shares

THE JIM ROGERS BLOG - Rogers: More Money has been lost in GOLD Mining Shares than any other industry in America 

We agree for the most part, except JIM you forgot one important aspect of mining, that is many mines are polymetallic, so they extract many other minerals including gold in their process. Should gold gravitate to zero, these mines will treat it as a by-product, and thus only assign the incremental costs associated with the ore or even  possibly leave it unprocessed for a period of time. If gold is a by-product then the full weight of production costs will not be attributed.So even at $50 an ounce, some miners may still be able to produce it on a break-even cash basis  because the cost assignments are arbitrary.

Anyway we are happy you enoyed our article - "Gold is a Psychotic Placebo - NOT AN INVESTMENT." And by the way, we confirm that old story about gold mines - 99% of all stock mining ventures end up being worthless. And yes, it will be very hard for these sociopaths to attract capital in the future. That's one good thing for the greater cause - our future generations!

INVESTORS' INSIGHTS

First Financial Insights

July 10, 2013

Somewhere Under A Rainbow

The Paul Krugman Blog - Rationality of the Euro

The Paul Krugman Blog - Rationality of the Euro

These comments reflect more on economics and thought-process rather than  markets, however that is what defines the markets when all is said and done.

Britain was certainly on the right track when it decided not to participate in the European experiment. And it remains shocking that Poland is seeking membership in this club, given the mess and clear failure of this project. What is it about Polish people? There is something that we just do not understand. All we can say, is that too often we give up long-term advantages, in order to remedy a short-term problem.

Why did the Brits decide not to join the club - by gosh, as Paul sarcastically notes in his New York tone, they did some "analysis." No one else apparently does? This point, in itself, raises some fascinating considerations when in comes to expressions such as: "they did their homework," "paralysis through analysis" analysed to death" and so on, and so forth. In fact, just writing about it makes one wonder and come to believe that analysis is much more perpetual in motion than stoic; as new ideas, devices, facts and knowledge is brought to the awareness of our cognitive processes. Particularly, for complex situations where the deterministic and subjective variables are always in a dynamic state of change, with the possibility of even  two opposites co-existing as truths at the same or different times. Go figure - the movie never ends !

So you see there is enough material here to write at least ten, five hundred page, books about the analysis of analysis. What is the right amount? the right tools? the right perspective? Or how about  analyzing the initial diagnostics and its tools - if its wrong, then so should be the supporting analysis. Then, there are the assumptions and we can assume that most people have different ones - or can we? The point being, do we ever really know if we are doing the most relevant  diagnosis, analysis and evaluation of goal, facts and constraints leading to the optimal solution for a moment or forever? I have a funny feeling that such knowledge is impossible to attain, except for those who command the arrogance to think otherwise.Why? Because they know, they know everything. 

In the end, this is a "very serious" topic and process, as it defines the fate of individuals, economies, businesses and our species in so many other ways. The case of Britain, supposedly doing the right analysis once, contrasts with years of bad analysis, that saw their Empire rise and fall, from being a political, economic and military powerhouse, to what it is today, and the tomorrows to come. Should we blame it on the analysis?

 Probably, but you may never know for sure!

First Financial Insights 
July 6, 2012

New Yorkers, eh!

ANALYZE THIS BUDDY !

The Dr Peter G Kinesa Blog : Human Longevity OR Unbridled Growth??

The Dr Peter G Kinesa Blog : Human Longevity OR Unbridled Growth??: WHAT IS OUR GOAL: HUMAN LONGEVITY OR UNBRIDLED GROWTH? 

Stars of what we are...bringing them back into our arms -

Every now and then it is a good idea to return to prior article and look at it with a older set of eyes to discover if your thoughts and ideas have been changed, modified or turned upside down in some strange way. In this case, very little has changed and there is a strong belief that to have a shot at the universe -  the orientation of humanity's goals must be towards its longevity; not just the absurdity of growth for the sake of growth.

Again, the mathematics speaks in a way that words cannot convey, insofar as the algebra of population and resources can define our visitig rights on this planet. Obviously, the lower the population levels, the greater the time we should have as a species, with all other things remaining equal. Then! And only then, could we come to know what is unknown, a path less chosen and yet to be discovered.

Why not? For that is what makes all the difference.

First Financial Insights  
July 4, 2013

Moving hearts is like trying to catch a star - bringing their minds into its heart; back where it belongs...