Timing & trends

Warning: Stocks Could be ‘Dead Money For A While’

Posted by Marc Faber via Marcfabernews.com

on Monday, 30 December 2013 13:28

Marc Faber Declares: “GOLD Bottomed” 

Author of the ‘Doom, Boom and Gloom Report’ Dr. Marc Faber thinks the year ahead could see stocks as ‘dead money for a while’. He also thinks the gold price has probably now reached a bottom with strong Chinese buying balanced against a sell-off by investors in the West. Gold stocks are now one of the few recommendations he makes for the New Year aside from expecting a cyclical upturn in European multinationals…(arabianmoney) 

Ed Note: Click HERE or on the image and you will be taken to where you can watch the 5 minute video where Marc elaborates on both the Stock and Gold Markets: 

Screen Shot 2013-12-30 at 5.08.37 AM

 

Ed Note: Other comments by Marc Faber all written on Sunday December 29th – 2013:

Western World: The Government Makes Up 50% Of The Economy

If we have an economic crisis in the Western world it’s because the government makes up 50 percent or more of the economy. This is a cancer that is taking away people’s freedom. – in CNBC 

A Fiscal Grand Canyon

The money printers are responsible for this crisis. If we continue with this expansionist monetary policy we won’t be facing a fiscal cliff it will be a fiscal grand canyon. – in CNBC

QE Only Helps The Rich People

QE helps rich people whose asset prices go up and whose net worth then increases but it doesn’t flow to the man on the street who is faced with higher costs of living with price rises. You just have a small economy that is booming but the majority of the economy is damaged by QE. – in CNBC

QE Boosts The Price Of Warhols

The fallacy of monetary policy in the US is to believe this money will go to the man on the street. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols. –in CNBC

The Next Fed Chairman Will Also Be A Money Printer

Bernanke is a money printer and, believe me, if Romney wins the election the next Fed Chairman will also be a money printer. – in CNBC 

I Will Never Sell My Gold As Long As We Have People Like Bernanke At The Fed

I will never sell my gold as long as we have people like Bernanke at the Fed and fiscal deficits as far as we can see. – in CNBC

Related: SPDR Gold Trust ETF (GLD), Newmont Mining (NEM), Barrick Gold (ABX), Goldcorp (GG)

Money Is Not Flowing Into Economic Activity, It`s Flowing Into Asset Prices

The money (from monetary easing) does not flow into economic activity, it flows essentially into asset prices, into speculation. – in a recent FNN Australia interview

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

 

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OTTAWA (Reuters) – The Canadian economy showed unexpected strength in October, growing for the fourth month in a row and boosting market hopes that the country might finally be shaking off the worst of the great recession.

Statistics Canada said on Monday the economy had grown by 0.3 percent from September. Analysts had forecast a 0.2 percent advance after September’s 0.3 percent increase.

Although Canada regained most of the jobs it lost since 2008 and 2009, growth has been largely sluggish, prompting the Bank of Canada to make clear it will not raise its key interest rate until it sees signs of a firm recovery.

The economy has posted growth every month this year apart from June.

The output of goods-producing industries grew by 0.4 percent in October on higher manufacturing while service industries output climbed by 0.3 percent as almost all major industrial sectors registered growth.

“Canada’s economy is showing sustained strength for the first time since the early days of the recovery,” said BMO Capital Markets economist Sal Guatieri.

The Bank of Canada has said annualized GDP growth in the fourth quarter will be 2.3 percent, down from 2.7 percent in the third. Guatieri, though, said October’s data suggested fourth quarter growth could be around 2.6 percent.

“Importantly, this would mark the first quarter since early 2011 that GDP has posted successive increases above two percent – that is, above potential,” he said in a note to clients.   Continued…

 

Good morning! Here’s what you need to know.
 
  • Japan’s Nikkei climbed 0.69%. Australia’s S&P/ASX 200 gained 0.61% Monday, and finished 2013 up 57%. India’s BSE Sensex was off 0.24%. Markets in Europe were lower, with Germany’s DAX down most at 0.15%. U.S. stock futures were pointing higher.
  • There’ve now been two attacks in the southern Russian city of Volgograd in less than 24 hours. On Sunday, a bomb ripped through a train station, killing 17 and injuring 50. Then on Monday, another bomb went off on a trolleybus, killing 14. The incidents raise “fears of further attacks ahead of the Winter Olympics which are due to start in six weeks,” the FT says. Volgograd is about 15 hours north of Sochi.
  • The oldest bank in the world is on the verge of collapsing and being nationalized. Banca Monte dei Paschi, which Italy has previously bailed out, has been unable to raise funds to cover $4.1 billion it owes the government. “The bank’s chairman and its chief executive may resign following the unprecedented clash with the main shareholder in the Siena-based lender, a charitable banking foundation with close ties to local politicians,” Reuters says.
  • China says it’s putting any future meetings with Japanese PM Shinzo Abe on ice after Abe’s visit to a controversial shrine last week, Reuters reports. Chinese Foreign Ministry spokesman Qin Gang said at a daily news briefing that “Abe has himself shut the door on talks with Chinese leaders.” “Since assuming office, Abe has miscalculated on Sino-Japan ties, and made mistake after mistake, especially visiting the Yasukuni Shrine which houses ‘Class A’ war criminals. These people are fascists, the Nazis of Asia,” he said.
  • Blackstone is investing $200 million in struggling footwear maker Crocs. The investment takes the form of a preferred stock purchase, and which will see Blackstone will take control of 13% of the company, as well as two seats on its board. “Crocs considered selling the whole company to private-equity firms this year,” Marketwatch said. “Blackstone envisions Crocs closing some U.S. stores, making inroads in Asia and offering new products, a person familiar with the firm’s thinking said.”
  • The most accurate oil forecasters in 2013 see a second year of losses for long investors in 2014, Bloomberg reports. ““We’re expecting a surplus,” said David Bouckhout, the senior commodity strategist at Toronto-Dominion Bank in Calgary who was tied with two others for most accurate forecaster. North American “supply growth is going to remain robust and cover the expected increase in demand. The biggest concern for 2014 on the supply side is going to be Iran, while Iraq is another producer that certainly wants to see its production grow.”
  • A large number of German youths “don’t even know what the word ‘inflation” means,” according to the BdB banking lobby in Berlin reported by Bloomberg. Reporter Brigit Jennen also interviews a guy who recalls living through Weimar. “Ninety years after a generation’s savings were wiped out, the German preoccupation with inflation is giving way,” Jennen writes. “A Hamburg University study published by the Bundesbank shows that any anxiety that inflation will erode savings is concentrated among senior citizens, the unemployed and those on lower incomes. The majority surveyed anticipate inflation at about 2 percent in the coming 12 months.”
  • It looks like U.S. manufacturing growth will accelerate in 2014. Economists polled by Dow Jones Newswires expect the Institute for Supply Management’s December survey, which prints Thursday, to climb for the seventh-straight month, Marketwatch says. “That would still leave the index at a level normally consistent with strong growth in manufacturing output and employment,” Capital Economics analysts wrote in a research note.
  • At 10 am the National Association of Realtors releases its pending home sales index. Consensus is for a gain of 1.5%, versus a decline of 0.6% prior. Then at 10:30 am we get the Dallas Fed’s manufacturing survey. Expectations are for a reading of 4.0 versus 1.9 prior.
  • Former Formula One champion Michael Schumacher is said to be fighting for his life after a skiing accident in the French alps left him in a coma. “For the moment we cannot say what Michael Schumacher’s future is,” the presiding physician said.

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Real estate investing is like a three course meal (TM).

It has three profit centers: cash-flow (or the appetizer), mortgage paydown (the main course) and equity appreciation through asset improvements and inflationary rental upside (the dessert). One key question in real estate investing is: how much cash to put down and how much leverage to apply via a mortgage.

The more cash down, the higher the cash-flow in real estate investing.

Is this better though ?

REITs typically use 50% or less leverage and can be good investments for retired income seekers. Or should one be higher levered with more equity upside, but little or no cash-flow ?

Look at these three examples … Then you decide.

 

http://www.prestprop.com/2013/03/13/the-difference-on-real-estate-investing-roi-using-different-leverage-i-e-mortgages-in-healthy-markets/

Thomas Beyer, President

Prestigious Properties Group

T: 403-678-3330 or 604-564-7673

F: 403-770-8885

 

www.prestprop.com

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