Wealth Building Strategies

Marc Faber – The Risk of Global Collapse, Economic Collapse & Financial Crisis is Rising

Posted by Marc Faber via Liberty Talk Radio

on Thursday, 9 March 2017 1:38

This unprecedented monetary experiment as in the last 5000 to 6000 years interest rates have never been this low. There’s never been negative interest rates and it is clear that one day the bond market will react negatively. But it is not crystal clear……continue listening to the interview below:

….related: Faber Warns: Beware a Stock Market ‘Avalanche’

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Investors Are Becoming Bullish on Commodities

Posted by Streetwise Reports

on Wednesday, 8 March 2017 19:59

BullBearUpChart580Dow Jones reported that the S&P GSCI Index, a measure of commodity futures, was up 28% last year: “many commodities have continued to rally this year. Oil and natural-gas prices have soared more than 50% over the past 12 months. Precious metals like silver and materials like lumber have scored big gains in recent weeks.”

Citigroup noted, according to Dow Jones, that “commodity assets under management globally rose 7% in January from the previous month to $391 billion, up more than 50% compared with the previous year.”

“The Materials Price Index, which tracks oil, metals, lumber and other commodities, closed higher for a record 17 straight weeks before finally falling in the last week of February,” Dow Jones reported.

Investors are becoming more bullish on economic growth, hoping that President Donald Trump’s $1 trillion infrastructure pledge will come to fruition.

Bloomberg reported that deal-making is starting to pick up in the metals arena: “Transactions announced in the first two months of the year climbed 41 percent to $7.6 billion from a year earlier, according to data compiled by Bloomberg. That’s the best start to a year since 2013, before gold and copper entered bear markets. Premiums for the deals announced in February averaged 33 percent, the highest since August, data show.”

“Investors poured about $4.9 billion into exchange-traded funds that track materials companies in the three months through March 3, beating funds linked to technology firms, according to data compiled by Bloomberg.”

Gold, silver, platinum and palladium futures are up at least 7% this year, Bloomberg noted.

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Disclosure: 
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
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Is A Second OPEC Cut On The Cards?

Posted by OilPrice.com

on Wednesday, 8 March 2017 15:11

8ef58d61d17d7426e7c005994381cb80OPEC’s coordinated effort to curtail global supply has so far managed to put a floor under oil prices, which have been sitting modestly above US$50 since the deal was announced at the end of November last year. But resurging U.S. shale has been capping the upside, and Brent has not breached US$58 per barrel. Analysts and experts are now mostly predicting that oil prices will remain below US$60 this year.

The supply-cut deal has so far resulted in a surprisingly high OPEC compliance of more than 90 percent, thanks to the cartel’s leader and biggest producer, Saudi Arabia, which has been cutting deeper than pledged. But the market has already priced in this high compliance, and although oil prices jump for a few hours on every report of ‘extraordinary efforts’ and reassurance that members will strive for ‘full conformity’, they are stuck in a narrow band, kept in check by U.S. shale and record high inventories in America.

A key upside driver for prices would be an extension of the OPEC deal beyond its original expiry date at the end of June. Just over a month had passed since the beginning of the production cut deal when talk of extending the agreement started to intensify. OPEC is said to be prepared to extend the deal, and may also increase the cuts, if inventories fail to drop to a specified level, sources from the group told Reuters.

The cartel has always claimed that the primary goal of the cut was to draw down excessive supply and bring the market back into balance. According to its latest Monthly Oil Market Report published in February, total OECD commercial oil stocks fell in December 2016 (before the cuts took effect) to stand at 2.999 billion barrels. At this level, OECD commercial oil stocks were 299 million barrels above the five-year average, OPEC said.

The February Oil Market report by the International Energy Agency (IEA) said that OECD total oil stocks had already dropped nearly 800,000 bpd in the fourth quarter of 2016, the largest fall in three years. Inventories at end-December were below 3 billion barrels for the first time since December 2015. Global oil supplies plunged nearly 1.5 million bpd in January 2017, with both OPEC and non-OPEC countries producing less, the IEA noted. The agency also pointed out that the Brent contango narrowed in the first month of this year.

The contango has been steadily shrinking, and the futures curve suggests that the market is tightening, which could help to draw down excessive storage that has been kept for sale at a later date.

Although OPEC’s secondary goal may be to change the market structure to backwardation, the IEA said in its February report that stocks were still 286 million barrels above their five-year average and “by the end of 1H17 will remain significantly above average levels”.

So the end of the first half of 2017 may not be time enough to cause the oversupply to dwindle, and OPEC may decide at its meeting in May to further tighten the market by extending the period of the supply cut. The cartel and non-OPEC Russia have said that a possible extension is still too early to assess—a fact that will not keep them from talking up oil prices with hints and comments in the coming weeks and months.

On the flipside, a possible extension of the deal – assuming compliance is high and cheating is low – would give more confidence to the U.S. drillers to increase output at higher oil prices.

At the end of the day, OPEC may have to choose between giving rival higher-cost producers a reason to pump more, or cutting back its supply (and some market share) for the sake of higher prices and market balance. And of course, giving its own member states all the more reasons to cheat.

By Tsvetana Paraskova for Oilprice.com

Why the Cycle Is Turning Up for Emerging Markets

Posted by Mike Burnick via Money and Markets

on Wednesday, 8 March 2017 13:51

With Larry Edelson’s passing last week, I lost both a friend and a mentor. I met Larry my very first day at Weiss back in 2002. He was already a larger-than-life personality, but always took time out to mentor us with his unique view of the markets.

Larry taught me a great deal about markets and investing over the next fifteen years; about taking the long view to identify the big, macro trends. An avid student of history and the cyclical nature of markets, he taught me the value of evaluating markets from a historical perspective.

There’s really nothing new in financial markets that hasn’t happened before. While history may not repeat exactly, it does rhyme.

In fact, the recurring, cyclical nature of financial markets is a perfect reflection of its participants; millions of individual investors collectively making value judgments every single day.

Markets are much more than numbers, Larry would say, markets are people… it’s all about people.

Indeed, successful investing is mostly about studying human behavior … hope and fear, greed and envy … the emotions that make up market sentiment.

Take commodities. There is no better example of the cyclical nature of markets.


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In 2007, after a nine-year long bull market in which commodities soared, especially gold, suddenly everyone wanted to own hard assets. Investors shoveled money into commodity stocks, funds and ETFs like never before.

Then along came the 2008 financial crisis. Commodities plunged nearly 50% that year, wiping out many of the newfound bulls who came late to the party. After a rebound of similar magnitude in 2009, commodities peaked in 2011, moved sideways for three years, then plunged again.

Gold crumbled first, dropping about 30% in 2013. Oil followed in 2014, as West Texas Intermediate Crude plunged from over $100 a barrel to less than $30.

After that experience, it was no surprise to find few die-hard commodity bulls left. Most had given up, thrown in the towel and moved on to other markets.

Sure enough, while few investors were paying attention, first gold bottomed in late 2015, soaring over 30% by mid-2016.

Oil followed, with gains of nearly 50% last year.

And it’s not just gold and oil. The new commodity boom is broad-based, with the S&P GSCI Index up 28% last year, its biggest gain since 2009.

Predictably, commodities markets are now popular again. In fact, bullish bets on oil, copper and cotton futures just hit all-time record highs in January. Probably just in time for the next sharp correction.

But another asset class, which has struggled through a long down-cycle of underperformance, appears to be just turning up again and is now outperforming: Emerging Markets. The cycle has turned and it has a lot to do with the revival in commodities.

Many emerging market countries rely heavily on commodity exports to fuel their economies. So it’s no surprise that Brazil is up 15.3% already this year. Argentina jumped 15.7% and Chile has gained 9% — all of them big resource exporters.

But the cyclical upswing in emerging market stocks isn’t limited to commodity countries, it too is broad-based, a very bullish sign.

Emerging Asia in particular is enjoying a cycle of outperformance, a region Larry has been consistently bullish on. China is up 11.3% year to date, India is up 11.4% and the Hang Seng China Enterprises Index of Hong Kong-listed Chinese stocks has gained 8.8% — all well above the 6% gain registered by the S&P 500 Index.

Bottom line: My friend Larry Edelson knew better than most investors that: To everything (and every market) there is a season; turn, turn, turn. The cycle is just beginning to turn up for emerging market stocks with higher prices ahead.

Good investing,

Mike Burnick

The Most Broadly Overvalued Moment in Market History

Posted by John P. Hussman, Ph.D.

on Wednesday, 8 March 2017 13:28

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On Wednesday, the consensus of the most reliable equity market valuation measures we identify (those most tightly correlated with  actual subsequent S&P 500 total returns in market cycles across history) advanced within 5% of the extreme registered in March 2000. Recall that following that peak, the S&P 500 did indeed lose half of its value, the Nasdaq Composite lost 80% of its value, and the tech-heavy Nasdaq 100 Index lost an oddly precise 83% of its value. With historically reliable valuation measures beyond those of 1929 and lesser peaks, capitalization-weighted measures are essentially tied with the most offensive levels in history. Meanwhile, the valuation of the median component of the S&P 500 is already  far beyond the median valuations observed at the peaks of 2000, 2007 and prior market cycles, while our estimate for 10-12 year returns on a conventional 60/30/10 mix of stocks, bonds, and T-bills fell to a record low last week, making this the most broadly overvalued moment in market history.

….read entire article HERE