Peter Schiff: Holding the Dollar Could be Riskier Than Stocks

[VIDEO] CLICK READ MORE TO VIEW IT. [VIDEO]

Read More

Berkshire Hathaway Down to Neutral

Zacks downgraded Berkshire Hathaway stock to Neutral on December 5, 2013. The stock was previously ranked at Outperform. The downgrade was due to the earnings miss, and the company gave a negative surprise of 6.9%. The stock is currently listed as a Hold.

Why Downgrade Berkshire Hathaway?

During the third quarter of 2013, Berkshire Hathaway reported operating earnings of $1.49 per share. They missed Zacks consensus estimate by $.11, because they believed it would be $1.60 per share. The decline came from a lack of underwriting income in the insurance business of the company, all because they suffered a catastrophic loss during the third quarter.

The company’s earnings are always subject to volatility, and this is especially true because of the exposure to catastrophes. Zacks believes that the exposure to catastrophes can result in more large individual losses, and they believe it will also produce more volatility in the casualty and property underwriting results.

Another area in question is the successor of Warren Buffett, the current chairman and CEO of Berkshire Hathaway. Many investors look at this as a real concern. We know that Buffett has a succession plan in place and a successor is already chosen, but the name of the individual is currently being kept under wraps. So there is still uncertainty in the market as to whether or not the new CEO is going to be able to perform at the same level of Warren Buffett.

Also the huge company investment in derivative contracts creates volatility with company earnings.

After the third quarter earnings report, Zacks Consensus Estimate for the year 2014 went down. One of two of its estimates was lowered by 0.5% to the amount of $6.22 per share.

Even so, Berkshire Hathaway has shown that it has a strong favorable operating performance over many quarters in the past, and each one of its segments has shown growth.

Its noninsurance businesses – retail, service, manufacturing, energy and utilities – are all performing very well even though they suffered substantial earnings declines in the recent past because of the current weak economy.

The financial products segment is also performing well, plus they are seeing trends improve in the business segment now that the housing market has gradually improved as well.

Read More

Marc Faber: A Financial Crisis is Looming on The Horizon

As a distant but interested observer of history and investment markets I am fascinated how major events that arose from longer-term trends are often explained by short-term causes. The First World War is explained as a consequence of the assassination of Archduke Franz Ferdinand, heir to the Austrian-Hungarian throne; the Depression in the 1930s as a result of the tight monetary policies of the Fed; the Second World War as having been caused by Hitler; and the Vietnam War as a result of the communist threat.

Similarly, the disinflation that followed after 1980 is attributed to Paul Volcker’s tight monetary policies. The 1987 stock market crash is blamed on portfolio insurance. And the Asian Crisis and the stock market crash of 1997 are attributed to foreigners attacking the Thai Baht (Thailand’s currency). A closer analysis of all these events, however, shows that their causes were far more complex and that there was always some “inevitability” at play.

Simply put, a financial crisis doesn’t happen accidentally, but follows after a prolonged period of excesses…

Take the 1987 stock market crash. By the summer of 1987, the stock market had become extremely overbought and a correction was due regardless of how bright the future looked. Between the August 1987 high and the October 1987 low, the Dow Jones declined by 41%. As we all know, the Dow rose for another 20 years, to reach a high of 14,198 in October of 2007.

These swings remind us that we can have huge corrections within longer term trends. The Asian Crisis of 1997-98 is also interesting because it occurred long after Asian macroeconomic fundamentals had begun to deteriorate. Not surprisingly, the eternally optimistic Asian analysts, fund managers , and strategists remained positive about the Asian markets right up until disaster struck in 1997.

But even to the most casual observer it should have been obvious that something wasn’t quite right. The Nikkei Index and the Taiwan stock market had peaked out in 1990 and thereafter trended down or sidewards, while most other stock markets in Asia topped out in 1994. In fact, the Thailand SET Index was already down by 60% from its 1994 high when the Asian financial crisis sent the Thai Baht tumbling by 50% within a few months. That waked the perpetually over-confident bullish analyst and media crowd from their slumber of complacency.

I agree with the late Charles Kindleberger, who commented that “financial crises are associated with the peaks of business cycles”, and that financial crisis “is the culmination of a period of expansion and leads to downturn”. However, I also side with J.R. Hicks, who maintained that “really catastrophic depression” is likely to occur “when there is profound monetary instability — when the rot in the monetary system goes very deep”.

Simply put, a financial crisis doesn’t happen accidentally, but follows after a prolonged period of excesses (expansionary monetary policies and/or fiscal policies leading to excessive credit growth and excessive speculation). The problem lies in timing the onset of the crisis. Usually, as was the case in Asia in the 1990s, macroeconomic conditions deteriorate long before the onset of the crisis. However, expansionary monetary policies and excessive debt growth can extend the life of the business expansion for a very long time.
In the case of Asia, macroeconomic conditions began to deteriorate in 1988 when Asian countries’ trade and current account surpluses turned down. They then went negative in 1990. The economic expansion, however, continued — financed largely by excessive foreign borrowings. As a result, by the late 1990s, dead ahead of the 1997-98 crisis, the Asian bears were being totally discredited by the bullish crowd and their views were largely ignored.

While Asians were not quite so gullible as to believe that “the overall level of debt makes no difference … one person’s liability is another person’s asset” (as Paul Krugman has said), they advanced numerous other arguments in favour of Asia’s continuous economic expansion and to explain why Asia would never experience the kind of “tequila crisis” Mexico had encountered at the end of 1994, when the Mexican Peso collapsed by more than 50% within a few months.

In 1994, the Fed increased the Fed Fund Rate from 3% to nearly 6%. This led to a rout in the bond market. Ten-Year Treasury Note yields rose from less than 5.5% at the end of 1993 to over 8% in November 1994. In turn, the emerging market bond and stock markets collapsed. In 1994, it became obvious that the emerging economies were cooling down and that the world was headed towards a major economic slowdown, or even a recession.

But when President Clinton decided to bail out Mexico, over Congress’s opposition but with the support of Republican leaders Newt Gingrich and Bob Dole, and tapped an obscure Treasury fund to lend Mexico more than$20 billion, the markets stabilized. Loans made by the US Treasury, the International Monetary Fund and the Bank for International Settlements totalled almost $50 billion.

However, the bailout attracted criticism. Former co-chairman of Goldman Sachs, US Treasury Secretary Robert Rubin used funds to bail out Mexican bonds of which Goldman Sachs was an underwriter and in which it owned positions valued at about $5 billion.

At this point I am not interested in discussing the merits or failures of the Mexican bailout of 1994. (Regular readers will know my critical stance on any form of bailout.) However, the consequences of the bailout were that bonds and equities soared. In particular, after 1994, emerging market bonds and loans performed superbly — that is, until the Asian Crisis in 1997. Clearly, the cost to the global economy was in the form of moral hazard because investors were emboldened by the bailout and piled into emerging market credits of even lower quality.

…because of the bailout of Mexico, Asia’s expansion was prolonged through the availability of foreign credits.

Above, I mentioned that, by 1994, it had become obvious that the emerging economies were cooling down and that the world was headed towards a meaningful economic slowdown or even a recession. But the bailout of Mexico prolonged the economic expansion in emerging economies by making available foreign capital with which to finance their trade and current account deficits. At the same time, it led to a far more serious crisis in Asia in 1997 and in Russia and the U.S. (LTCM) in 1998.

So, the lesson I learned from the Asian Crisis was that it was devastating because, given the natural business cycle, Asia should already have turned down in 1994. But because of the bailout of Mexico, Asia’s expansion was prolonged through the availability of foreign credits.

This debt financing in foreign currencies created a colossal mismatch of assets and liabilities. Assets that served as collateral for loans were in local currencies, whereas liabilities were denominated in foreign currencies. This mismatch exacerbated the Asian Crisis when the currencies began to weaken, because it induced local businesses to convert local currencies into dollars as fast as they could for the purpose of hedging their foreign exchange risks.

In turn, the weakening of the Asian currencies reduced the value of the collateral, because local assets fall in value not only in local currency terms but even more so in US dollar terms. This led locals and foreigners to liquidate their foreign loans, bonds and local equities. So, whereas the Indonesian stock market declined by “only” 65% between its 1997 high and 1998 low, it fell by 92% in US dollar terms because of the collapse of their currency, the Rupiah.

As an aside, the US enjoys a huge advantage by having the ability to borrow in US dollars against US dollar assets, which doesn’t lead to a mismatch of assets and liabilities. So, maybe Krugman’s economic painkillers, which provided only temporary relief of the symptoms of economic illness, worked for a while in the case of Mexico, but they created a huge problem for Asia in 1997.

Similarly, the housing bubble that Krugman advocated in 2001 relieved temporarily some of the symptoms of the economic malaise but then led to the vicious 2008 crisis. Therefore, it would appear that, more often than not, bailouts create larger problems down the road, and that the authorities should use them only very rarely and with great caution.

Source: http://dailyreckoning.com/that-financial-crisis-was-no-accident/

Read More

Soros tunes in to Nine Entertainment

US billionaire George Soros is set to emerge as a shareholder in Nine Entertainment when the media company begins trading on the Australian stockmarket tomorrow.

Mr Soros, a Hungarian-American business magnate known as the man who broke the Bank of England, is understood to have placed an order for Nine shares via New York-based Soros Fund Management.

Source :http://www.theaustralian.com.au/media/soros-tunes-in-to-nine-float/story-e6frg996-1226775434252#

Read More

Jim Rogers: Where to Buy in 2014

With equity markets starting off December on a losing streak, Jim Rogers is out with another characteristic stark warning. This is all going to end badly. Jim Rogers told a CBC that eventually, the entire world is going to collapse.

Rogers boils it down to a singular notion that will tear at the fabric of system. Debt.

Jim Rogers – Gold Not Going Anywhere

Even with gold prices getting hammered by QE taper fears, Rogers doesn’t see an end to the commodity bull supercycle. Jim Rogers thinks this is just the normal ebb and flow of the market, and it isn’t unusual to have corrections. During the interview with CBC, he reiterates his bullish stance on agriculture. Hard not to be bullish on that, we all have to eat.

One area he does push back on is Natural Gas. Fracking is getting some hard PR as more and more communities reassess whether they want that type of drilling in their backyard. Rogers says is it best ‘not to get too excited about fracking’.

The Next Crisis
It wouldn’t be a Jim Rogers interview if he didn’t talk about the next massive crisis. Hey, they don’t make those doomsday prepper shows for nothing. His words are simple – the next one is going to be worse than the last.

“2008 was so much worse than 2000 because the debt was so much higher, you wait until 2014 or 2015 when the next crisis hits… debt has gone through the roof, the next one’s gonna be really bad”

Rogers ends the interview on a cautionary note – Be prepare, be worried and be careful. In other words stock up on the usual. It’s going to be a wild ride.

Read More

The Peter Schiff Show Tuesday 12/03/2013

[VIDEO] CLICK READ MORE TO VIEW IT. [VIDEO]

Read More

Peter Schiff : Yellen Will Talk About Taper But Won't Ever Do It

[VIDEO] CLICK READ MORE TO VIEW IT. [VIDEO]

Read More

Marc Faber : Gold Demand from China would actually increase and not decrease

“In Asia it has always been traditional to own gold….It was illegal to own gold in China until about ten years ago. Now the government is actually encouraging people to own gold.” demand is “very strong” and, with increasing numbers of wealthy people in Asia, “demand is rising very rapidly.gold demand from China would actually increase and not decrease







Read more: http://etfdailynews.com/2013/12/04/marc-faber-world-bankers-are-going-to-bankrupt-the-world/

Read More

Lander College For Women Graduate Receives $90,000 Soros Fellowship

Matty Lichtenstein, a graduate of Lander College for Women, received a Paul and Daisy Soros Fellowship. According to the Touro College website, she is “..navigating the narrow bridge where traditional Chasidic tradition and American culture collide has landed her a coveted Paul & Daisy Soros Fellowship for New Americans.”

Lichtenstein graduated in 2003 from Lander College for Women-The Anna Ruth and Mark Hasten School (LCW) and later taught four courses at LCW, including Modern Jewish Thought and Selected Topics in Chasidim and the Mitnagdim. The child of Israeli immigrants who were children of Holocaust survivors, she grew up in Brooklyn steeped in the tradition of Gerer Chasidim. She had a powerful role model for scholarship and leadership in her mother, Ruth Lichtenstein.

Source: http://www.jewocity.com/blog/lander-college-for-women-graduate-receives-90000-soros-fellowship/10394

Read More

Jim Rogers on Bitcoins: I Don`t Understand Them

I don`t understand bitcoins. I have never really tried to figure it out or get into it. Every time somebody brings it up, I just sort of lose interest.

Read More

Marc Faber: Not a good time to Buy Stocks

“I’m afraid that nothing is safe anymore,” but commented that, “The safety is in diversification.” He went on to warn that, “It’s not a good time to buy stocks.”

On what’s ahead for the markets and the economy:

“I just want to warn your listeners it’s not a good time to buy stocks. Maybe you make another 5% or another 10% but the big move, the market from the lows in March 2009, is up almost 3 times.”

On the go-to assets where people can protect value in their portfolios: 

“I’m afraid that nothing is safe anymore because if you are in cash maybe it will be appropriated or as you know we have zero interest rates and we have lost the purchasing power of paper money. You can buy a Picasso but who knows what the value of it will be in five years time. The safety is in diversification….I think the precious metals is the one sector in the market that is very depressed. We’ve had a huge correction, we might go down somewhat more but - compared to say stocks where the sentiment is very optimistic – the sentiment on precious metals is extremely pessimistic. Everyone thinks it will go down further, it may still go down somewhat but I think that people should own some gold in their asset allocation, they should own some real estate but not all of it in the U.S., they should diversify.”

Source : FOX BUSINESS NETWORK

Read More

Soros Starts the Week Strong with Clear Channel Surge

Today’s midday gainers are Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), Axiall Corp (NYSE:AXLL), Forest Laboratories, Inc. (NYSE:FRX) and midday losers are Cobalt International Energy, Inc. (NYSE:CIE), Dex Media Inc (NASDAQ:DXM), Yume Inc (NYSE:YUME).

Soros wins with Clear Channel Today’s midday gainer is Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), as the advertising company shot up +10.51% to $9.78. Billionaire George Soros holds 1.8 million shares (0.37% of his fund), acquired for $7.82. Ray Dalio owns 50,000 CCO shares, representing 0.01% of his holdings. The investor paid an average price of $7.75.

Read more :http://www.valuewalk.com/2013/12/soros-starts-week-strong-clear-channel-surge/

Read More

Jim Rogers : Commodities Slide Temporary

Jim Rogers, author of Street Smarts: Adventures on the Road and in the Markets and the chairman of investment group Rogers Holdings agrees the slide in commodity prices is temporary.

“Commodities have pulled back but I would remind you that in all bull markets there are periods of correction. In 1987, during the great bull market in stocks, stocks went down 40 to 80 per cent around the world, again in 1989, 1990, 1994, etc, ‘’ he said in an interview with Lang & O’Leary Exchange.
“Every time people said the bull market’s over, but it wasn’t.  I think that’s what ‘s happening with commodities now.” in CBC


Read more : http://www.cbc.ca/news/business/mining-sector-faces-rising-costs-uncertain-demand-1.2449324

Read More

Peter Schiff Recommendations for 2014

[VIDEO] CLICK READ MORE TO VIEW IT. [VIDEO]

Read More

Soros Fund Management Teva Investment

Soros Fund Management LLC, the family office of billionaireGeorge Soros, boosted its Teva holdings to the most since 2010 in the third quarter, according to a filing on Nov. 14, while Susquehanna Financial Group LLLP recommended buying the shares last month. The stock jumped 9.9 percent to $40.76 in November, leaving it up 9.2 percent this year. The Bloomberg Israel-US Equity Index of the most-traded Israeli companies in the U.S. capped the biggest monthly gain since 2011.

“It just makes sense to want to own Teva, certainly at this price level,” Jason Kolbert, an analyst at Maxim Group LLC in New York, said in a phone interview on Nov. 26. “Value buyers are really saying that the stock is oversold. That’s the nature of the conversations that I’ve had with the institutions that are calling me.” 

Source : http://www.bloomberg.com/news/2013-11-30/teva-s-woes-disregarded-as-shares-rally-israel-overnight.html

Read More

Jim Rogers: Abolish The “Incompetent” US Federal Reserve

Legendary investment guru Jim Rogers not only thinks Federal Reserve policy is incompetent, he thinks the entire institution should be abolished.

When asked recently what he’d do if he was named chairman of the central bank, Rogers said, “I would abolish the Federal Reserve, and then I would resign.”

The world has survived just fine without central banks for most of its history, he noted.

“America has had 3 central banks in its history. The first two disappeared,” Mr.Rogers said.

“This one will too, because they keep . . . leveraging up the balance sheet. They keep making mistake after mistake. They keep printing money.”

The result?

“This is going to self-destruct, unless the politicians say this thing is a mistake, let’s get rid of it,” Mr. Rogers said. “It’s more likely, though, that it will self-destruct.”

When it comes to stocks, which are trading at or near record highs, “we’re certainly going to have a crash someday — all this artificial sea of liquidity,” he said.

But while a major pullback or correction could come soon, Mr.Rogers does not see an imminent deep dive. “With all the money printing and spending in the world, this could go on for a while,” he said.

Source : http://www.livetradingnews.com/jim-rogers-abolish-incompetent-us-federal-reserve-21203.htm#.Upv0_8QW23g

Read More

Berkshire Hathaway Boosts Stakes in U.S. Bancorp, BNY Mellon

Warren Buffett's Berkshire Hathaway increased its stakes in U.S. Bancorp (USB) and Bank of New York Mellon (BK) during the second quarter.

The conglomerate disclosed in a regulatory filing that it bought roughly 840,000 shares of U.S. Bancorp's stock, raising its stake in the Minneapolis company to 4.3%. Berkshire Hathaway also bought about 9,000 shares in Bank of New York Mellon, boosting its stake to 2.2%.

Source : http://www.americanbanker.com/issues/178_229/berkshire-hathaway-boosts-stakes-in-us-bancorp-bny-mellon-1063937-1.html

Read More

Faber: We are in a Massive Speculative Bubble

[VIDEO] CLICK READ MORE TO VIEW IT. [VIDEO]

Read More

Unpredictable risks caused 2008 economic crisis, says Soros at Budapest CEU

Risks can be quantified but all of their elements cannot be calculated in advance and this led to the 2007/2008 financial crisis, US financier and philanthropist George Soros said on Wednesday at the university he founded in Budapest.

The Hungarian-born businessman launched the Hungarian edition of his latest book The Soros Lectures at the Central European University, where he is honorary chairman of the board.

The book presents his general theory of reflexivity and the concept of open society.

Source :http://www.politics.hu/20131128/unpredictable-risks-caused-2008-economic-crisis-says-soros-at-budapest-ceu/

Read More

RICI Rogers commodity index cuts 2014 US crude weighting

Rogers International Commodity Index (RICI), managed by veteran investor Jim Rogers, will cut its weighting toward crude oil next year and raise exposure to natural gas, gold and silver, due to what Rogers termed "consumption changes". The shift in weightings of the RICI comes amid projections for higher US crude oil supplies in 2014, which some analysts say could further weigh on weakening prices. 

US natural gas production is also expected to rise next year, although gas prices have been trending higher lately due to cold weather in key consuming regions of the country. 

RICI's weighting for the West Texas Intermediate (WTI) crude, the benchmark grade for US oil, will be cut by 5 percent next year to 16 percent, according to Beeland Interests, Inc, the Rogers-controlled company that runs the index. 

Source: http://www.brecorder.com/fuel-a-energy/193/1259881/

Read More

United Kingdom: Historic Perspective

"In 1918 the UK was the richest most powerful country in the world. Within three decades they will bankrupt and they were bailed out by the IMF…it was not a pretty sight." - in RT

Read More