It is always intriguing when finance intertwines with politics. For instance, billionaire investor Warren Buffett stated at Georgetown University that it would be “pretty damn dumb” if Congress and President Obama fail to agree on raising the nation’s debt ceiling. Here at Economic Prism, we find the terms “damn” and “dumb” quite fitting when assessing the actions of our leaders.
However, unlike Buffett, we believe that not raising the debt ceiling is actually quite wise. We support the idea of political gridlock preventing the Treasury from borrowing against future earnings to settle past expenditures. Additionally, we welcome any chance to dismantle elements of the enormous Obamacare framework.
Moreover, we hope that financial markets experience a moment of anxiety over the ongoing tussle regarding the debt ceiling between the House and the President. An S&P 500 hovering around 1,700 seems excessively high. Nevertheless, we do not recommend shorting it. Continue reading
This week kicked off with significant news: Larry Summers, the highly intelligent individual who lost Harvard’s hot breakfasts and squandered $2 billion of the university’s operating funds, withdrew from consideration for the next Federal Reserve Chairman. The stock market responded positively, with the S&P 500 gaining 13 points over Monday and Tuesday.
By Wednesday, however, the relief surrounding Summers’ exit dissipated, shifting focus back to current Federal Reserve Chairman Ben Bernanke and his upcoming statements. What direction would he take now?
Expectations had built around the Federal Reserve starting to reduce its $85 billion monthly asset buying program by approximately $10 to $15 billion. Yet, when the time came, Bernanke decided against making any changes. Here are some standout excerpts from Wednesday’s FOMC statement…
“Considering the level of federal fiscal retrenchment, the Committee interprets the recent improvements in economic activity and labor market conditions since initiating its asset purchase program as reflective of growing underlying strength… Continue reading
Our pursuit for clarity continues amidst the convoluted realm of economics. We seek to understand what tomorrow holds…today. Additionally, we want to explore how to leverage our predictions for future gains.
One method is to hold a wet fingertip to the wind to gauge its direction. Headwinds indicate trouble, while tailwinds signify opportunity. Another straightforward tactic is to analyze historical data and forecast its future trajectory.
Unfortunately, neither approach is particularly effective for anticipating unpredictable, nonlinear events. Thus, asset diversification and informed speculation are essential for risk management and seizing unique chances when upheaval ensues. Based on our intuition, it seems that a tumultuous period is imminent.
Indeed, economic reports have already shown signs of volatility. One suggests recovery, while another indicates stagnation.
Which report holds more accuracy? Which is misleading? Consider this example… Continue reading
Could This Be the Next Bakken?
By Marin Katusa, Chief Energy Investment Strategist
Everyone aspires to discover the next “Big Score” in the resource sector—a monumental find capable of placing them in the history of resource exploration and bringing substantial riches to their investors.
It’s well known that investing in the junior resource sector comes with significant risks. In fact, few investment arenas present such high chances of failure, leading to potential losses.
Nevertheless, finding the “Big Score” can change your life dramatically.
There’s even a book titled The Big Score, focusing on Doug Casey’s friend and Casey Explorers’ League Honoree, Robert Friedland, and detailing the remarkable Voisey’s Bay nickel discovery. If you get the chance, I highly recommend it.
Friedland’s company, Diamond Fields, was engaged in diamond exploration in Africa. Continue reading
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