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  • The Room – 04/10/2009

    A quick comment is in order on the recent stock rally. While I could provide that comment, few people do the "dose of reality" thing better than my globetrotting partner and friend of many years, Doug Casey.

    Begging the forgiveness of our paying subscribers to The Casey Report, I would like to quote Doug from the current edition, just published...

    Just a few words about where we're in this ongoing crisis. While many in the media are now saying that things are looking up, and that the worst may now be over, I think it's just begun. For several reasons...

    For starters, stocks are cheap relative to where they've been over the last five years, but they're not cheap relative to historic bottoms (e.g., 1 times book, around 6-8 times earnings – after big earnings cuts - and 6-10% dividend yields). Treasuries are in a bubble. And, as hard as it has fallen, residential property has not yet bottomed.

    But the worst is yet to come. And I'm not talking about student loans, car loans, and credit card debt. Or Social Security, Medicare, and Medicaid. Or the looming bankruptcy of most states and many municipalities. The real crisis will be in pension funds, commercial real estate, and life insurance companies. The life insurers own mostly commercial real estate, mortgages, and bonds; many will be totally busted, even before people start cashing in their whole life policies. You don't even hear about these three things in the press yet....
  • The Room - 01/30/2009

    Like most people, I occasionally find myself overwhelmed by the tasks involved with everyday life. This week, I have been, to use the old adage, 'working like a dog.' Though, now that I think about it, I have a hard time imagining the origin of the term. Even in his youth, my now elderly companion General Beauregard Piddle didn't seem to take on anything more rigorous than climbing up on an unattended couch for a nice nap. In any event, it's been one of 'those' weeks. And so today, as I prepared to write this weekly missive, I found myself groaning, 'Arrgh, I've got to write The Room,' to my ever patient and entirely wonderful wife. 'But,' she said, misunderstanding the nature of my apparent complaint, 'I can't see how that's a problem. There's so much to write about.' 'Exactly!' I said, 'That's the problem!' In actual fact, I almost always look forward to these weekly writings as a form of personal reflection and even entertainment... and as a usual way to keep myself in the flow of the passing parade. But some weeks – most weeks, it seems of late – the sheer volume of important news that I should comment on, at least if I were trying to be a good correspondent, is so staggering in dimension, it is a real challenge to know where to begin. So, instead, I start by writing about old dogs and wonderful wives. Go figure....
  • The Room - 10/17/2008

    Keeping up with the complex drama now flashing across the global screen is becoming more challenging with each passing day. In lazier days, a scene might be allowed to unfold at a measured pace, the interactions between major characters developed through subtle nuance and lingering shots and close-ups of, perhaps, the furrowing of a brow or the sly upturning of the corner of a mouth. These are not those days. Instead, we are living in the world of 30-second commercials, directed by a speed-addicted music video director, strung together in a nonstop explosion of two-second jump cuts. One minute stock markets are soaring, the next crashing. Gold jumps $20, then falls $40. Banks fail, banks get bailed out. Politicians elbow each other out of the way to throw billions, trillions even, into deep, dark holes. Oil tumbles, then bounces, then tumbles again. While the volatility has allowed me to make some fun money through the all-terrain investment vehicles of futures and options, it has also made the task of trying to keep current on the news and, more importantly, on what's important, daunting indeed....
  • Where Is the Economy Going in the Next Six Months?

    As investors, the question we have to focus most of our attention on just now is what impact the credit crisis, the bursting housing bubble and the actions of the U.S. government will have on the economy and investment markets in the next six months. We have seen the Fed and the federal government move to panic mode as they try to keep the system afloat. As expected, they have cut rates, as well as having given away checks and rearranged the Federal Reserve's entire balance sheet. The underlying problems have not been fixed with this massive bailout. There are still many credit pot holes out there and new lending remains highly constrained. Even the government tax rebate checks, rather than boosting the domestic economy, were largely absorbed by higher oil prices. The resulting cut-back in consumer spending, coupled with ongoing constrictions in lending, will cause a severe slowing of the economy....
  • The Room 4/29/08

    Written: April 25, 2008 Dear Reader, What an interesting week! Having been a single parent for two weeks, with the kids on spring break for the second of those, I have attained a whole new level of appreciation, yes, I think that's the word, for the...
  • The Room 4/14/08

    Written: April 11, 2008 Dear Readers, No question about it, we humans like to keep things simple. And no wonder; if the world is anything, it is chaotic. And so we look for our philosophy in un-taxing nuggets, the sort, perhaps, that might grace the back...
  • The Room 4/7/08

    Dear Readers, This week finds me writing from Room 2218 of the infamous Jekyll Island Club. The hotel's adjective comes from a secret meeting held here in 1910 involving some of America's most powerful men. Here's an official history of that...
  • The Room 3/31/08

    Dear Reader , I am writing to you in the pre-dawn from a soft chair in a Starbucks in Scottsdale, a vast improvement over the small desk in the cluttered toy room that I usually write you from on Fridays. 16 inches from my left hand is a "vente"...
  • The Room 3/24/08

    Dear Reader , It used to be of no little pride in the small New England town where Casey Research is headquartered that school went forward, no matter the weather. Hail, 8-foot-high snow drifts, ice rain and, should they have occurred hereabouts (which...