Hints from the Fed Chairman
- Written by Marc Courtenay
- Saturday, 07 October 2006
Federal Reserve Chairman Ben S. Bernanke warned earlier this week that housing is likely to undergo a "substantial correction". Is he just "jaw-boning" (trying to talk prices down) or does he know something we don't know? Mr. Bernanke knows that home prices have doubled and tripled in many areas over the past 5 years and that the Fed had lowered interest rates to near record levels--making home loans easier to qualify for and monthly payments more affordable. It encouraged one of the biggest refinancing booms in the history of the mortgage industry and propelled a huge number of people to become realtors (California has over 500,000 licensed realtors alone). It was a great time for lenders like Countrywide Financial Corp. (symbol CFC) which is currently selling for 7.5 times next years projected earnings.
What's Your Gut Telling You Right Now?
- Written by Marc Courtenay
- Wednesday, 04 October 2006
"Yet despite Wednesday's surge, today's Wall Street investors are a more cautious lot than they were six years and nine months ago, and that is why it has taken the Dow, which reached closing highs on a daily basis during the high-tech boom, so long to come back.
They have reason to be conservative -- they have seen a series of events starting with the dot-com bust and recession and including the aftermath of the Sept. 11, 2001, terror attacks wipe out trading portfolios and send companies into bankruptcy and oblivion. They've also had their faith shaken by scandals at companies including Enron Corp. and WorldCom Inc." This direct quote from today's closing report from Stockhouse SHfn@ The Bell in their "North American Market Wrap Up" report on a day when the Dow has hit a new record high (11,850.61) gives us an example of "listening to your gut". Suddenly, oil and energy supplies are abundant and much cheaper than this summer. And the Fed seems to be through raising rates.
Does this mean that the commodity bull market is over? Are precious metals "dead in the water"? Our gut wants to remember some realities that one of our favorite economic writers, Puru Saxena (www.purusaxena.com) recently wrote about: " The economic recovery since the 2001 recession has been manufactured by excessive credit-growth and consumption. For the first time ever, a central bank has purposely engineered a credit bubble with the intention of bringing artificial prosperity via rising asset-prices. The Federal Reserve dropped interest-rates and the majority of Americans became the proverbial kids in the candy store, unable to resist the temptation of cheap credit. This is evident from the fact that over the past six years, U.S. household debt soared from $6.99 trillion to almost $12 trillion -- a staggering increase of 70%!
Add a commentSteve Irwin's Investment Legacy
- Written by Marc Courtenay
- Friday, 29 September 2006
We don't know exactly how Steve Irwin and his family invested their money. We assume most of it went into the Irwin's amazing Australian wildlife park and "crocoseum", as well as the many tv and film productions that Steve and Terri made over their 14 years together (we think we read they made almost 170 shows on the earth's amazing wildlife creatures). If we know Steve as well as we think, we know he was the type that he would put his money where his heart was.
Last night my family and I watched the Barbara Walters ABC special (DIS) where she interviewed the widow of the late "Wildlife Warrior" and conservationist, Steve Irwin. Mrs. Irwin gave us an understanding of the remarkable life, energy, humor and passion of her late husband and filled in the blanks concerning how her husband has "changed the world". Having followed Steve's career and incredible adventures for over 10years, including the births of his two children, my family and I were heartbroken by his accidental death.
However, since the fateful day that he was taken away from his family, friends and millions of fans, the life and legacy of Steve Irwin has grown to astronomical proprotions...."Crikey!" Mrs. Irwin (Terri) told all of us that Steve gave his time, money, heart and his life to what he believed in....helping humans appreciate and identify with wildlife and to motivate all of us that if each of us is willing to make even a small difference in the conservation of our planet's natural habitats and the diversity in this amazing eco-system, that the planet and all the creatures that are left will be saved.
Add a commentExchange Traded Funds
- Written by Marc Courtenay
- Friday, 29 September 2006
If the recent correction and sell-off in commodities such as oil, natural gas, gold, silver and basic metals looks like a buying opportunity to you, our mentors often suggest to us that we get our feet wet by looking at some of the new exchange-traded funds (ETFs) that invests directly or indirectly in these kind of commodities. Since our mentors seem to all feel like the worldwide demand for commodities is still in the early stages of a long-term cycle, it appears logical to them to consider dollar-cost-averaging into ETFs such as the DB Commodity Index Tracking Fund (ticker symbol DBC). This ETF trades on the stock exchange so it isn't complicated to buy or sell (but you should do your own due diligence and speak to a professional financial advisor before you buy or sell investments of any sort...if you don't have an advisor you might want to call someone like Fidelity Investments or check out their website at www.fidelity.com).
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