Eating Animals: Jonathan Safran Foer Talks To Ellen About His New Book (VIDEO)

November-06-09, 12:18 PM

He explained his mission writing the book, and how becoming a new father drove him to action. He also challenged environmentalists to step up to the plate — factory farming, he said, contributes to global warming more than any other factor. What little steps can we take to changing the way we eat? Foer says the most important thing is to inform yourself, and learn as much as you can about what’s going on.

7 Food Groups That Will Help Boost Your Mood

November-03-09, 9:38 AM

This gloominess hits us all pretty hard. In fact, if you’ve ever believed that you had a case of the Winter Blues, this is what we’re talking about. Seasonal Affective Disorder (SAD) is no laughing matter because these dark-gray-rainy days have a huge impact on your mood and energy level. The good news is that we can all partially escape this mental zapping

Make a deal! 5 surprising bargain-hunting tips - Clear Your Cookies!

November-03-09, 11:23 AM

Looking for some great bargains for the holiday shopping season? Before you pay full price, “ShopSmart” magazine shares smart advice on how you can save a significant amount of money with your cell phone, online coupon codes and more:

Holiday Dos and Don’ts for the Family

November-06-09, 11:45 AM

Once someone invents time travel, many of us will line up right after Halloween for the first ticket to January-blip past Seasons Greetings and all things holiday. For now, however, we scuttle on through, worrying about how to seat divorcees and spouse-number-twos around the family turkey. Take a look at these dos and don’ts for the holidays.

Source: Dumb Little Man |  MSNBC |  Oprah.com |  Eating Animals, Jonathan Safran Foer

Prechter also makes the seemingly counterintuitive argument that the dollar will rally because there’s so much debt, rather than being doomed because of it. If the economy turns sour again in 2010, as he predicts, Prechter says the dollar will benefit as more dollar-denominated IOUs get called by creditors seeking to shore up their own balance sheets, as was the case in 2008.

This goes hand in hand with Hugh Hendry’s (and others) call that because there is so much deleveraging yet to be accomplished, the dollar will be in high demand as big borrowers retire debt, and creditors end up long cash for the sake of balance sheets. A strengthening dollar will mean falling prices relative to the rise, and is therefore deflationary, by definition, as we have experienced in Canada with the strengthening loonie. If Prechter, Hendry and others are right, the CAD will pull back from its recent highs.

“Everybody who’s saying ‘buy stocks’ today or ‘buy real estate’ is, I think, setting up people to get really hurt,” says Prechter, who believes the bear market rally is reaching a major top.

“We had a great opportunity at [S&P] 667 - that was the big opportunity,” says Prechter, who did make a bullish call last February. “The market is up 60% [from the March lows]. There’s no way the S&P is going up 60% from here.”

Watch the video here:

Source: Yahoo TechTicker

This article is a guest contribution from Tyler Durden, of the Zero Hedge Blog.

Time to start loading up on those sovereign CDS. Today Michael Milken provided some insight into what the five key reasons for our current predicament are, which, courtesy of absolutely no real reform, double as even greater future risks for the global financial system. These include: i) that corporate credit is not the same as leverage, especially not 100x debt/EBITDA, ii) mortgages in real estate are never an investment-grade asset, iii) interest rates are volatile and unpredictable [the JPM-GS IR swap complex will not be too happy to hear this], iv) The US AAA rating is misleading and, and most important, v) sovereign debt is a big, if not the biggest, risk.

Full highlights of Milken’s presentation, courtesy of Deal Journal:

Credit rather than leverage

When I was on Wall Street , I rarely had ratio higher than 3:1 or 4:1, I have never heard of any leverage ratios higher than 10:1. But in the United States of America, there were companies that leveraged 100:1. To me, it is not a business.

Mortgages in real estate are never an investment-grade asset

Real estate values go up 70 years and in certain period of time, it has been going down for five years in a row. If you are an investor that buying real estate assets that are backed by mortgages, assuming the only way to get your money back is hoping the price keeps to go up, then it is hard to understand what the asset category is. The debt depends on the asset value that the company who sells the debt doesn’t guarantee.

Why aren’t other countries having this problem? Because in most countries, people don’t borrow on their homes. The shocking thing for America is that this occurred before. In 1980s, we went through 5-6 painful years that caused failures or mergers of almost every single financial institution in Texas, Colorado, Oklahoma, Louisiana and Arkansas. In Houston, house prices fell 40% in five years.

Interest rates are volatile and unpredictable

I have never met anyone of significant wealth who made money guessing which way interest rates are going over a long period of time. In 1981, when short-term rates were 20%, almost every single financial institution, including the most conservative, was underwater on their government portfolio, when the U.S. government bond was sold at 50 cents on the dollar.

Rating is misleading

I guess none of the financial crisis would have happened without rating. There are now only four AAA-rated companies left in the America now: Microsoft, ADP, ExxonMobil and Johnson & Johnson.

Yet, S&P alone, in the first eight years of this century, has rated 17,000 securities AAA. How do you lose a 100% on a triple A investment? Well, first, those weren’t AAA companies. Second, you can borrow against it and create a security that is against the mortgage portfolio that is still rated as triple A. That is nothing new. If you read the rating history you will see that a double-A railroad has a 200% higher default rate than a B-rated industrials.

Sometimes, companies were not getting downgraded after they actually defaulted. Even for GM, there was an uptick in its ratings in last May from B- to B.

So if you are relying on rating, then I am not sure why, as a money manager, you should be paid a fee because there isn’t too much value-added you are providing. Besides, people who provide ratings are just human beings. Maybe if they are the most talented in the world, you would have already hired them.

Sovereign Debt is a big risk

It isn’t a major issue in the market today and was not a main reason that caused this crisis , but historically, it is among the worst credit assets in the world.

In 1980s, people constantly told investors “No one ever lost money by loaning money to a country.” But the U.S. only got 30 cents on the dollar from a sovereign loan to Poland. The loss in sovereign loan totaled $1 trillion in those years, but investors continued to believe these assets aren’t risky. This dramatic example tells us that people in senior positions, such as those in the Fed and run major banks, make statements that are just 100% false.

One extreme example is Argentina. The country, in the past century, has issued loans that borrowed at 100 cents on the dollar and paid 30 cents on the dollar back. In 1980s, Bank of America lent almost all its capital, $700 billion, to Argentina. Eventually, that debt was restructured at 30 cents a dollar.

American investors vowed not to loan money to Argentina ever again . Years later, the U.S. loaned $100 billion to Argentina. History repeats itself. That is why investors need to base their work on research, not on conventional thinking.

Source: Zero Hedge

This post, courtesy of Clusterstock, features a slideshow Chanos presented at the annual Virginia Value Investing Conference. The slides highlight in an easy-to-read format ten lessons from the financial crisis - lesson investors might already have forgotten.

Source: John Carney, Clusterstock, November 3, 2009.

Unsurprisingly, the following comes from the minutes of the meeting of November 4 of the Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association: “Several members noted the graph discussing net fixed income supply in 2009 and 2010, and how issuance will ramp up dramatically in 2010. Federal Reserve purchases have taken an enormous amount of supply out of the market this past year across fixed income markets, but next year, financial markets should expect even greater issuance with no support. Such an outcome could pressure rates.” With quantitative easing set to expire during Q1, it is difficult not to see long-term rates rising, unless the economy falls back into the morass.

Turning to technical analysis, the chart below shows monthly data for the ten-year Treasury Note yield since 1998 and conveys an important message when considering the two momentum-type oscillators at the bottom (ROC and MACD). The ROC has just reversed course (crossing the zero line) for the first time since a buy signal was given at the beginning of 2007 and now indicates a primary sell signal. The MACD provided a similar indication six months ago.

Source: StockCharts.com

In conclusion, I concur with Bill King (The King Report) who said: “There is a very good chance that 2010 will see a horrid global bond market.”

Michael Kahn, Barrons.com’s own technical guru, thinks the seven-month-long advance now is showing signs of topping out. In his latest column, (”Setting Free the Bears,” Nov. 2,) points to various technical signs that the market is topping out. Unlike in the summer, when the major indexes paused at several junctures, market internals such as breadth now suggest something more serious.

Albert Edwards argues that if bonds and equities are indeed decoupling, then the market is going to be very sensitive to changes in the economic cycle. Edwards notes that during the 1965 to 2000 period, “bad” news was “good” news. Now, post-bubble in the US, with Japan as its progenitor, or model,  Edwards is suggesting that “good news” that hurts the bond market, is “bad” news for stocks.

In post-bubble Japan, bonds and equities decoupled. In the U.S. from 1965 to 2000, lower bond yields would mean higher stock prices, so “bad news” would be treated as “good news” if it benefited the bond market and, in turn, price-earnings multiples. But in Japan, equities follow the economic and profits cycle.

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Edwards emphasizes that, even in Japan’s secular bear market since 1989 (during which the Nikkei is off by three-quarters), there have been numerous 50%-plus rallies coming off of cyclical low points. Bit investors should have always sold these rallies when cyclical leading indicators topped out.

Post-bubble Japan is the progenitor for the U.S. after the bursting of its credit bubble, Edwards long has hypothesized. If so, the equity market is tied more tightly to the economic cycle, in which case investors need to be keenly aware of cyclical turning points.

Read the whole article here.

The equity market performance in November 2007 masked the underlying problems plaguing the financial system at the time, and it’s blindingly apparent that it is doing the same again today. The government has assumed most of the financial system’s liabilities in a giant game of ‘kick the can’. The calls for a new bull market are coming fast and furious. Market participants are bidding up the stocks of companies that are demonstrably bankrupt, and government balance sheets have ballooned to unforeseen levels. As respected market commentator David Rosenberg recently wrote, “the stock market is divorced from economic reality”.1 It’s time for another surreality check, but this time it isn’t the publicly traded companies that deserve attention, it’s the governments that have saved them. Make no mistake - the dead men are still walking - they’re just a lot bigger now than they were two years ago, and they don’t generate earnings - they print money and tax their citizens.

Download the whole report here.

As printing presses are running at full speed to produce ever-increasing quantities of fiat money as governments engineer the greatest asset price reflation in human history - and the US greenback is heading South - the longer-term fundamental case for the yellow metal is arguably positive.

“The gold bug has caught several big hedge fund managers this year including John Paulson of Paulson & Company, Kyle Bass of Hayman Advisors and David Einhorn of Greenlight Capital, who believe enormous monetary and fiscal stimulus that has been injected into the global economy will eventually result in hyperinflation,” said The New York Times.

The gold price is not only making headway in US dollar terms, but also in most major (and minor) currencies as illustrated by the table and graph below. This is a manifestation of increased investment demand, whereas the initial rise in the gold price from its low in 2001 ($250) was mostly a reflection of US dollar weakness.

Illustrating the message even more vividly, is the chart below of gold expressed in a basket of emerging-market currencies by dividing the dollar bullion price by the Wisdom Tree Dreyfus Emerging Currency ETF (CEW).

Source: StockCharts.com

The shorter-term technical picture is also looking interesting. This is explained by Adam Hewison of INO.com who prepared a short technical analysis of gold’s most likely direction and key chart levels. Click here to access the video presentation.

Seasonally, the period from November to December has traditional been good for gold, with average gains ranging from more than 1% to almost 2.5% since 1970.

Source: Plexus Asset Management

I remain bullish on gold in the medium term, especially as I believe the vast money printing by central banks could set off strong inflation pressures down the road. I will not be surprised to see bullion remaining in a secular uptrend in the medium term. Add bullion to your portfolios, but given the notorious volatility of the metal only do so on pullbacks.

The chart below, courtesy of economist David Rosenberg of Gluskin Sheff & Associates, shows that credit is still contracting as banks go through the painful process of repairing their balance sheets. As indicated, bank lending has now declined for 21 weeks in a row and over this entire period a total of $216 billion (15% at an annual rate) of loans and leases has vanished.

“The contraction in bank credit is broad based across all lines of business - consumer, real estate and companies - and seems to be motivated by both the bank and the borrower. This is a dead-weight drag on aggregate demand and it goes to show that the real story in Q3 was not that it was so wonderful that real GDP expanded at a 3.5% annual rate but that the number was so low in view of the massive dose of government stimulus and that the contraction in credit is ongoing and acting as a tourniquet on private sector spending activity,” said Rosenberg.

Meanwhile, the US Depository Institutions Aggregate Excess Reserves continue their ascent at levels far in excess of the amount banks need to keep on deposit to meet their reserve requirements (see chart below). The level indicates that the balance sheets of banks remain under pressure, especially in view of the fact that the value of some assets is not known. A definite peak in the Excess Reserves graph should coincide with a turning point for banks getting back into the business of making loans.

Source: Fullermoney

Rosenberg concluded: “This is 1992-93 all over again when the commercial banks used the steep yield curve as an opportunity to reliquify their balance sheets, and the flip side of that process was a listless and jobless recovery. The only difference is that the credit contraction process this time around will prove to be even more pernicious and enduring than it was back then, and inevitably drag Treasury note yields back down towards the lows we saw almost a year ago.”