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Why David Rosenberg Believes Resource Sector Remains A Core Holding

Posted by AGORACOM at 8:00 AM on Thursday, August 12th, 2010

If you don’t know who David Rosenberg is, you better get to know him.  Why? Forget about his title – there are plenty of useless anyalysts out there with big titles -  here is his track record in what has been a very difficult decade for institutional and retail investors:

From 2001 to 2008, Mr. Rosenberg was ranked first in economics in the Brendan Wood International Survey for Canada, ranked second overall in the 2008 Institutional Investors Survey for the U.S., and was on the Institutional Investor All American All Star Team from 2005-2008. Mr. Rosenberg also ranked 4th out of 104 economists in the 2009 Thomson-Extel survey of global portfolio managers. Mr. Rosenberg also ranked 4th out of 104 economists in the 2009 Thompson-Extel survey of global portfolio managers.

He is currently the Chief Economist over at Gluskin Sheff and a Canadian. I don’t add in that last point for humour.  As a Canadian, I believe he has a decidedly more rational head than his US counterparts that are typically guilty of both following the herd and looking after their own pockets.  I love the fact that Rosenberg doesn’t sit on the fence.  He develops a market outlook and tells you what he’s going to do about it.  None of the typical, “the ying could yang, but the yang could ying” bullshit that you often hear from these guys.

More importantly, as his track record demonstrates, he is often right.

Rosenberg is a great tool for retail investors because he isn’t shy about sharing his views.  He frequently speaks with both traditional media and some of the better financial blogs, including my friend Barry Ritholtz.  As such, it’s pretty easy to follow his thoughts.  I suggest you follow him via a Google Alert RSS Feed so that you don’t miss a thing.

RESOURCE SECTOR REMAINS A CORE HOLDING

In his market commentary yesterday, he provided his typical great analysis on the state of the markets.  It’s a must read as he covers inflation, deflation, the US economy, emerging markets and his recommended investment strategies.  In addition, he made the following statement with respect to the resource sector:

Moreover, I don’t believe in all the stories about China collapsing. In fact, if there is a bullish story to be told, it is that the secular growth paths in not only China, but India, Indonesia and Korea and that will continue to ensure that the resource sector remains a core holding, with oil and food retaining geopolitical significance and gold remaining a critical hedge against ongoing reflationary policies that weakens the U.S. dollar in coming months as a critical mid-term election approaches.

If that isn’t telling it like it is, I don’t know what is.

Regards,
George

Posted in All Recent Posts, China, Commodities, Gold $2,000, US Economy | Comments Off on Why David Rosenberg Believes Resource Sector Remains A Core Holding

Think The PIGS Are In Trouble? 7 U.S. States That Could Be Heading For Something Worse

Posted by AGORACOM at 12:54 AM on Thursday, February 18th, 2010

Gregor Macdonald – my friend and keynote speaker at the first ever AGORACOM Online Gold & Commodities Conference – was interviewed On BNN Squeeze Play earlier today. Quite simply, Gregor is a rising superstar in the world of online financial commentators and worthy any minute of time invested into consuming his material – especially when it comes to energy.

For example, take a look below at the topic of his BNN interview.  This isn’t another guy on the web with an opinion. This is powerful, valuable and actionable information.  Grab a coffee, sit back and click on the image below to be taken to his 10 minute interview (I wish BNN would provide embed codes!)

Gregor - BNN 0210

Regards,

George

Posted in PIGS, Renewable Energy, US Economy | Comments Off on Think The PIGS Are In Trouble? 7 U.S. States That Could Be Heading For Something Worse

Why Are The Chinese Dumping U.S. Securities? Leverage Towards The End Game

Posted by AGORACOM at 12:46 PM on Wednesday, February 10th, 2010

Tyler Durden, Founder of Zero Hedge, has written a great article titled:  The Dumping Begins: Chinese Reserve Managers Notified That Any Non-USG Guaranteed Securities Must Be Divested.  The article stems from this story in Asia Times, which states:

Dollar-denominated risk assets, including asset-backed securities and corporates, are no longer wanted at the State Administration of Foreign Exchange (SAFE), nor at China’s large commercial banks. The Chinese government has ordered its reserve managers to divest itself of riskier securities and hold only Treasuries and US agency debt with an implicit or explicit government guarantee. This already has been communicated to American securities dealers, according to market participants with direct knowledge of the events.

It is not clear whether China’s motive is simple risk aversion in the wake of a sharp widening of corporate and mortgage spreads during the past two weeks, or whether there also is a political dimension. With the expected termination of the Federal Reserve’s special facility to purchase mortgage-backed securities next month, some asset-backed spreads already have blown out, and the Chinese institutions may simply be trying to get out of the way of a widening. There is some speculation that China’s action has to do with the recent deterioration of US-Chinese relations over arm sales to Taiwan and other issues. That would be an unusual action for the Chinese to take–Beijing does not mix investment and strategic policy–and would be hard to substantiate in any event.

Durden goes on to add that One thing is certain – China will now focus on doing precisely the opposite of what America would urge Chinese authorities to do, in order to establish itself as the focal point of negotiating leverage.

I personally agree with the leverage angle.  There is a reason China has been around for 5,000 + years.  Many believe China put itself at risk by loading up on US Treasuries / Debt and is now in a “mutually assured destruction” relationship with the United States.  I don’t believe that to be the case. I believe China has smartly put itself in a position to dictate terms to the world’s current superpower and will be prepared to use that leverage if and when the day of reckoning comes when the world realizes the United States can no longer borrow its’ way to prosperity.

Yes, China will take a hit to its reserves when that day comes – but the payoff of placing itself at the helm while maintaining significant influence over a starving US economy will be well worth the price of admission.

Remember, the Chinese have only recently learned to enjoy a bit of “La Vida Loca” and can easily return to a more frugal existence in order to survive any global economic slow down brought about by flexing their leverage over the United States.

American society, on the other hand, invented La Vida Loca and would find it excruciatingly difficult to exist in a world without Starbucks, Louis Vitton and credit cards.  Enter Daddy Warbucks to save the day.

Regards,
George

Posted in China, US Economy | Comments Off on Why Are The Chinese Dumping U.S. Securities? Leverage Towards The End Game

The Case For An 11,500 Dow – And Going Long On Gold

Posted by AGORACOM at 10:01 PM on Sunday, October 11th, 2009

AGORACOM Chief Commentator, Peter Grandich, believes we are in a secular bear market – but doesn’t believe it will resume until the Dow gets to at least 10,500.

My friend and Top 10 Financial Blogger Barry Ritholtz also believes we are in a secular bear market but sees the current rallying continuing until as high as 11,500.  In a must read post, he discusses the key factors that have been contributing to, and may continue adding to, the ongoing rally.  More than just lip service, I’ve provided 2 of his great data pieces to look atbelow .

At the same point, it should also be pointed out that both are bullish on gold.  Peter’s position is no secret – but Barry’s confirmation lends significant further support to gold bulls.  Specifically, Barry stated:

As I mentioned in an article this summer, you can look for a close of GLD over $100
and spot Gold over 1032 highs to get long or add to your position (Ideally,a close over 1050).

As we know, Gold smashed through both $1,032 and $1,050.

1]  Composite Of 29 Secular Bear Markets

I love this data because it is a compilation of 29 secular bear markets, as opposed to those that try and simply compare today’s markets to the Crash of 1929 – 1932.  Barry’s notes in the graph make his point very clear. “X” marks the spot that we are currently at:  (click on it to see a larger version if necessary):

2]  11,500 As The Typical Recessionary Sell Off Point

Barry demonstrates that 11,500 was the level we should have reached for a typical recessionary sell off – and that the next 5,000 points was the “end of the world” panic sell-off.  As such, we should get back to 11, 500 before real resistance starts to settle in.  Again, click on the chart for a larger image:

OK, then.  See you all at 11,500.

Regards,
George

Posted in All Recent Posts, Gold $2,000, US Economy | Comments Off on The Case For An 11,500 Dow – And Going Long On Gold

A Treasury Funding Crisis For The US As Early As October?

Posted by AGORACOM at 9:35 AM on Monday, September 28th, 2009

The rally has taken Treasury yields — which move opposite the bonds’ price — to their lowest levels since spring, and have helped push mortgage rates to their lowest levels in three months. The Fed’s active presence has also raised questions of whether the rally is sustainable.

Wall Street Journal, September 21, 2009

The Fed has accounted for half of all Treasury purchases in Q2 ($164 billion of total of $339 billion).  Below we present data for what could be construed as a Treasury funding crisis borne out of lack of demand for longer maturities, once the QE portion of UST purchases expires. This crisis could hit as soon as October.

ZeroHedge.com, September 25, 2009

Regards,
George

Posted in All Recent Posts, US Economy | Comments Off on A Treasury Funding Crisis For The US As Early As October?

Hege Fund Legend, Julian Robertson, Paints The Case For Gold – Serious Inflation + US Armageddon If China/Japan Stop Buying Debt

Posted by AGORACOM at 9:31 AM on Monday, September 28th, 2009

(The following quote via TraderMark)

Julian Robertson is a legend; when he speaks – I listen.

Robertson had the best hedge fund record throughout the 1980s and 1990s. It is reported that the compound rate of return to his investors was 32%. During his active years, he was considered to be the “Wizard of Wall Street.” His hedge fund, Tiger Management, became the world’s largest fund, which peaked at over $23 billion invested.

He seems to appear on CNBC once a year, this is our opportunity to learn via osmosis.

(a) Nailed it —> [Oct 30, 2007: Julian Robertson Calling for “Doozy of a Recession“] <— market, as a “forward looking indicator” was at all time highs
(b) Nailed it —> [Oct 13, 2008: Julian Robertson Buying Some of Our Names – But Bearish on Economy]

——

A few days ago, Mr. Robertson appeared on CNBC TV a couple of days ago and his comments have really caught the attention of online investors.  (Peter Grandich, AGORACOM Chief Commentator, would love him).  I’ve provided you with an 8-minute clip of the interview, which is worth its’ weight in gold given his track record.  Some of his comments include:

  • We’re in for some rough waters. The recession is temporarily over but the US has not addressed its problems
  • The US can’t possibly pay back its debt
  • Tragic that US leadership has put the country in this position
  • Correct course is to scale back, stop spending and start saving
  • It’s almost Armageddon if China and/or Japan stop buying US debt
  • Inflation risk is much higher than deflation
  • 6-7%  interest rate is conservative … we could easily see 15-20%
  • Chinese don’t want to stop buying our bonds – but there could be circumstances where they have to
  • His solution would cause temporary pain in America. People will have to ask for it because government won’t.
  • Japan could be forced to sell some long-term US bonds, which is much worse than not buying
  • China is buying short-term debt because US can’t sell long-term debt.  History has shown that short-term borrowing is fatal.
  • US has yet to attack their problems.  “Stimulating” is just spend and borrow in disguise.  US needs to stop.

Drawing my own conclusions, gold would absolutely benefit from both high inflation and a loss of confidence in US debt, which would have to mean a loss of confidence in the $USD.  What were once fringe scenarios are now very plausible scenarios.

Regards,
George

Posted in All Recent Posts, US Economy | 4 Comments »

Alan Greenspan “Economic Collapse Is Off The Table”

Posted by AGORACOM at 10:40 AM on Sunday, August 2nd, 2009

Alan Greenspan was on ABC’s “This Week” with George Stephanopoulos just a few minutes ago.  Though he has a ton of well received criticism for interest rate policies that have contributed to the state of affairs today, he still commands attention.  To this end, here are highlights of his thoughts that I posted to Twitter and StockTwits:

greenspan01

greenspan02

Do you agree?  Are you cautiously optimistic, bullish, or are we in the middle of a bear market rally?

Would love to hear your thoughts.

Regards,
George

Posted in All Recent Posts, US Economy | 3 Comments »

AGORACOM Chief Commentator, Peter Grandich, Calls $1,000 Gold In A Month On BNN

Posted by AGORACOM at 9:52 PM on Wednesday, June 3rd, 2009

AGORACOM Chief Commentator, Peter Grandich, was on BNN• Business News Network’s Market Call this evening discussing, amongst other things:

  • The US economy
  • The US dollar
  • Base Metals
  • Gold and Precious Metals
  • Junior Resource Stocks

In particular, Grandich is calling for gold to break through $1,000 within a month.  Given his uncanny track record, investors should take note.  Click on the screen shot below to watch Peter’s episode.  Pretty powerful information, so viewing is highly recommended.

grandich-bnn-05091

Regards,
George


Posted in AGORACOM In The Press, All Recent Posts, Gold $2,000, US Economy | 1 Comment »

Bank Stocks Could Skyrocket “100% Within Hours” On March 12th

Posted by AGORACOM at 11:39 PM on Sunday, March 8th, 2009

Traders take note.  According to John Najarian from CNBC Fast Money, financial stocks could skyrocket 100% “within hours” if mark-to-market accounting rules are relaxed at a House financial services subcommittee hearing.  Najarian is not one to make such statements likely, so it is worth reading the exact quote:

“if the government relaxes mark-to-market for 12 to 18 months you could
see financials move 100% in a matter of hours.”  And he went on to say, “In
fact, I hope you’ll replay the soundbite because if the government relaxes
mark-to-market accounting a number of banks stocks will be unbelievable
values at these levels.”

Here is the CNBC Fast Money clip on the subject, including a call on which financial stock would most benefit.  For his money, Najarian suggests a higher risk play – long the Financial Bull 3x ETF FAS (take a look at the 6-month chart).

Hat-tip to Howard Lindzon of Stock Twits

UPDATE:  Citigroup Up 30% Since Blog Alert, Bank Of America Up 50%

Regards,
George

Posted in All Recent Posts, US Economy, Web 2.0, 3.0, ... | 11 Comments »

Peter Grandich Sheds Permabear Skin And Begins Building Long Portfolio

Posted by AGORACOM at 7:39 AM on Sunday, March 8th, 2009

AGORACOM Chief Commentator, Peter Grandich, has offcially shed his permabear skin according to his latest blog post.  This is a pretty important declaration because Grandich has an uncanny ability to call market tops and bottoms in commodities and equity indexes.  In fact, it’s the primary reason I brought him on to AGORACOM and I would easily state that he ranks up there with Peter Schiff.

GRANDICH HAS BEEN JUST AS RIGHT AS PETER SCHIFF

I’m going to work on compiling a chronology over the past couple of years but go ahead and google “Grandich + robbing Peter to pay Paul and Peter is tapped out” (OK, I did it for you).   It’s the phrase he’s been using for 3-4 years now to help illustrate the state of the US economy to his audience and a quick scan of the Google results finds at least one quote in Kitco from the summer of 2005.

At the beginning of 2008, Grandich banged the table on going short the US market once the Dow crossed 13,000.  In short, he’s just been dead on.

GRANDICH NOW BULLISH?

To be clear, he is not advocating running out and filling your boots today.  Grandich believes Dow 5,000 vs. 8,000 is an even money bet right now.  Given the fact his readers have been able to avoid the fall from 14,500 to 6,600, he’s willing to take small losses in order to be a year early, rather than a day late.

Like a freight train that takes miles to come to a full stop once the brakes have been applied, Grandich believes the markets are now in the same process and investors need to start reserving some choice seats for the turn around.

In the short-term however, he does state the following:

“At the minimum, we’re overdue for a sharp bear market rally. Never have my technical indicators suggested so in almost 25 years. Several market indexes are dramatically below key moving averages. Several have never seen this far of a spread between price and moving average while others only once or twice. Knowing in technical analysis you must look only at the charts, I do believe anyone experienced in this type of analogy would suspect as I do that a significant correction of an almost straight-down decline is overdue.”

He’s even put his money where his mouth is and provided specific equities and ETF’s that he would be buying, with a lot of emphasis on oil companies.  Sound choices if you expect the global economy to begin turning around in the next 12-15 months and the stock market to anticipate it sooner.

He also believes gold and precious metals continue to be attractive investments that will run as inflation – due to extreme US deficits – hits the US economy over the next couple of years.

Read his full post.  It is worth the read.

Regards,
George

Posted in All Recent Posts, Canadian Economy, Gold $2,000, US Economy | 1 Comment »

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