Rude Awakening Archives: 2007 09/07/07 - Agora Financial…"Unplugged"
Edited by Eric J. Fry Dan Denning: I know it's crazy. But I've written a draft for my next newsletter advising readers to liquidate all their positions and get into cash. If you think that's crazy or just stupid, you needn't bother reading on. Otherwise…read on. I wanted to see if a letter telling people to sell everything now sounded panicky…or reasonable…or not really sensible/defensible once you go through all the risks, costs, and objections to doing so. It could also be epic stupidity.
09/06/07 - Contrarian or Victim, Part II
By Rick Rule
We are in the mid-stage of a broad bull market in natural resources. Therefore, my strategy will be to cycle out of popular sectors, like uranium, and into unpopular sectors like Canadian natural gas. In other words, I will sell frothy rallies and buy panics.
09/06/07 - Contrarian or Victim
By Rick Rule
In natural resource investment markets, one can be a contrarian or one can be a victim, and the choice is one's own. Having once been a victim, I chose the other path. Natural resource industries are cyclical, volatile, emotional, over-regulated and capital-intensive. That's the good news. If you accept markets for what they are, while other speculators operate in ignorance, you have an advantage in the market. Being a contrarian is hard. That's the other good news. Most speculators cannot act in contrarian fashion, for reasons we discuss later.
09/05/07 - The Bush Bailout
By Adrian Ash
"THE MARKETS are in a period of transition," said George W. Bush in his speech from the Rose Garden on Friday. "America's overall economy remains strong enough to weather any turbulence." But just to make sure, America's financial Commander-in-chief put the credit of the entire US nation on the line.
09/04/07 - Corporate Heights
By Bill Bonner
And here you have the explanation for one of the many sordid features of the early twenty-first-century public spectacle…outsize CEO salaries. They are the bright feathers of the high-ranking male. Top business leaders have become like sports heroes, but without the talent. You need not have any real knowledge of the business you are getting into, or, as Bernie Ebbers demonstrated, any real knowledge about business of any sort. What will get you a job as a leader in the corporate world is the same thing that will get you a woman in the mating game-outsize confidence.
08/31/07 - The Yen Scary Trade
By Eric J. Fry Is the stock market scaring you? Buy yen. If the connection between falling stocks markets and a rising yen confuses you, don't be dismayed. You have a lot of company. But the connection is not as confusing or sophisticated as it might seem. The "yen carry trade," as it is known, only seems complicated. But it's actually so simple, it's moronic.
08/30/07 - Praying For Rain
By Joel Bowman
Citizens of Ankara are thirsty…very thirsty. Two Friday's ago a good portion of the city's 4 million residents took to their prayer mats, imploring divine help to solve their worsening drought crisis.
08/29/07 - Indigestion on Wall Street
By Dan Amoss
Credit used to be as free as love in the 1960s. But the days of free credit ended about three weeks ago…and the days of expensive credit arrived. As credit becomes more expensive, asset prices will deflate. And that will not be very much fun for investors.
08/28/07 - Expensive Food, Cheap Stock
By Chris Mayer
China's last emperor, Pu Yi, loved his soybeans. They were a staple of the Manchurian diet in Northern China. In the 1930s, a forward-thinking Brazilian friend asked Pu Yi if he could take some soybeans back to Brazil. Pu Yi agreed. The beans eventually made their way to bustling Rio de Janeiro.
08/17/07 - The Greater Depression
By Doug Casey Let me cover the big picture. I do think we're approaching the end of the world as we know it…I think there is such thing as the business cycle. It exists. And we've had the longest expansion - and the strongest expansion - in the world history. But we're at the end of a 25-year boom. It's gone on more than a full generation now. And I'll tell you how it's going to end: It's going to end with a depression, and not just a depression; not just another Great Depression; it's going to be the Greater Depression.
08/16/07 - The After-Life
By Eric J. Fry - June 15, 2005
Financial bubbles are mortal organisms. Even though they might seem immortal for a time, they never live forever. The housing bubble will be no different. It will perish…eventually.
08/15/07 - Where Should Your Money Be?
By Doug Casey
Gold. That's it. I just don't know a cheaper or better place to put your money. Honestly, of all the things in the world, and I look at everything - I'm very eclectic, looking at anything and everything. I'll buy anything if the price is right - gold is the best bargain in the world right now. It's not just going through the roof; it's going to the moon. There's going to be a gold buying panic that's going to knock your socks off in the next few years. The gold bull market has not even gotten started…
08/14/07 - False Gods
By Bill Bonner
In a remarkable interview in Barron's this week, David Richards said that he thinks the world economy is on the road to even greater heights of glory. One of the reasons given is that the "Theology of Capitalism" is sweeping the globe.
08/13/07 - Hey Brother, Can You Spare $38 Billion?
By Dan Denning
The world's central banks are bailing out the world's so-called capitalists. So you can add financial stocks to the long list of institutions that are apparently "too big to fail" in today's world. The Fed proved this new reality last Friday, when it stepped in to bail out people who failed to correctly model the risks of making or owning loans to risky borrowers.
08/10/07 - Splashdance, Part II
By Eric J. Fry Even in the midst of a booming commodities market, water is still an overlooked resource. It is a thing that seems ubiquitous in the wealthy West. But clean water is not ubiquitous - nor in the West or in the East. This reality will make money for somebody. In fact, it already has.
08/09/07 - Splashdance!
By Eric J. Fry
I love water stocks, but only in the context of extreme anxiety about the overall stock market. I've rarely been this concerned about the overall stock market. [Eric's Note: I delivered this speech three days after the Dow registered its all-time high]. It just doesn't feel right that we should be making new all-time highs when we have a myriad of issues that could undermine - and should undermine - valuations, or at least confidences in those valuations. It doesn't feel right when you have a housing slump that triggers a mortgage-lending debacle that triggers a credit-derivative crisis of unknown proportions.
08/08/07 - Preparing for the Harvest
By Chris Mayer
If we were sitting at a bar enjoying a beer - a good beer - and I had to tell you only one reason why you should have money invested in the agricultural boom in some way, I think I would say this: Grain inventories are near all-time lows.
08/07/07 - The Bear Stearns Bust
By A. Gary Shilling
Up until a month ago, most stock and bond investors were convinced that the subprime mortgage slime was a small isolated cesspool with its own peculiar financing that would be contained and have no meaningful effects on their rock-solid investments. Stocks were hitting new highs and junk bond spreads vs. Treasurys were at all-time lows. But no more. Complacency has been replaced by fear and foreboding.
07/06/07 - When Parties End
By Bill Bonner
Economic forecasting is a métier of the damned. The greatest of them all - at least by reputation - was miserable at it. Fred Sheehan, writing in Whiskey and Gunpowder, recalled when Alan Greenspan was confronted by Congress after his nomination to head up the U.S. Federal Reserve; Senator William Proxmire was ready for him. The senator had done his homework. He noted Greenspan's "dismal forecasting record" when he was chairman of the Council of Economic Advisers. Greenspan had, for example, forecast an increase in consumer price inflation of 4.5% for 1978. Instead, the number rose over 9%. He was further off-the-mark than any CEA chairman before, or since… "You broke all records…" said Proxmire.
08/03/07 - Be Fearful, Be Brave
By Monica Day There's a fundamental rule about investing - you've probably heard it before: Be brave when others are fearful, and fearful when others are brave. Bill Bonner, editor of Daily Reckoning, opened the Eighth Annual Agora Financial Investment Symposium by suggesting that most people are braver than they've ever been. And that means the rest of us should be very, very afraid.
08/02/07 - The Silver Road
By David Bond
[Ed. Note: david bond appears courtesy of www.lewrockwell.com] Two years ago, I was strolling along cobblestone roads of Lijiang, a little city in China that is poised at the southernmost end of the Himalayas. The millennia-old city lies in the shadow of the towering Jade Dragon Snow Mountain - a three-mile high peak. The Jinsha River, which courses through Lijiang, supplied the city's many quaint eateries, with fresh-caught perch. Many of the local menus also feature yak-meat and beer locally brewed from the Jade Dragon's glacial waters.
08/01/07 - Perma-Bulls and Dead Cats
By Dan Amoss
The stock market's sudden, sharp selloff is paralyzing investors with fear. Even the "perma-bulls" are terrified. The recent declines are breathtaking in speed, but not particularly large, as far as corrections go. At least not yet. In the short term, the market's movements can be explained entirely by the collective appetite for risk. Up until a few weeks ago, this appetite was strong, but it has weakened significantly. The aggressive indiscriminate buying of everything from junk stocks to blue chips during the first half of 2007 is likely over.
07/31/07 - Base Metals Bears
By David Galland
It is not our purpose here at Casey Research to massage the data to fit our point of view. In fact, we are nothing if not open minded. Recently, we asked readers to propose scenarios that might cause things to break in a direction other than what we expect. In response, a subscriber forwarded an article from Bloomberg with a very sound-sounding bearish view on base metals. 07/26/07 - Pipe Down!
Edited by Joel Bowman It seems not a day goes by without some unbelievable news from the world's fastest growing region. Double-digit growth for China and double-digit percentage swings in the region's stock markets are commonplace these days…and don't forget execution for double dipping government officials.
07/25/07 - A Vertiginous High
By Chris Hancock
Constructing the Empire State Building consumed 60,000 tons of steel…10 million bricks…1,172 miles of elevator cables…6,400 windows…60 miles of water pipes and over 3,500 miles of telephone and telegraph wires. But the world's tallest skyscraper was much more than the world's top-quality office space. It symbolized the progress of a nation rebuilding - a beacon of economic growth. The strength of its image became universal. One could argue the construction of the Empire State Building was a turning point for the U.S. economy and morale during the heart of the Great Depression, ushering in the world's first skyscraper boom.
07/24/07 - Who is Phillip Fisher?
By Greg Guenthner
I'm sure you've heard people say that Wall Street never gives you the whole story. That it is not in the Street's best interests to tell you about the market's biggest opportunities. That they keep you in the dark about all the money over-the-counter and bulletin board stocks can deliver.
07/23/07 - Drink Up!
By Chris Mayer
In the rising tide of market volatility, the sinking level of worldwide water supply provides a fundamentally sound investment theme. Simply put, water is precious, especially when you don't have it. The water theme has many facets. There are water pipe makers and filtration companies, irrigation equipment, water pumps and more. The facet I want to focus on here is just the basic resource itself - owning actual water - because the investment backdrop for a rising water price looks pretty good from here. 07/20/07 - A Titanic Resurrection
By Greg Guenthner It's been a source of fascination for anyone who has ever set foot on a boat. The world watched as this enormous craft pushed its way toward New York Harbor from Southampton, England, on April 10, 1912. Eighty-plus years later, a multimillion-dollar Hollywood recreation of its maiden voyage forever sealed the sinking of the RMS Titanic in our popular culture.
07/19/07 - More than Moose Pasture
By Marin Katusa
A favorite tactic of promoters in all resource bull markets, past and present, is to stake huge land positions and then proudly point investors to the map, saying, "We're the largest landholder in such and such area." Such land grabs are a dubious exploration strategy at best. And in the case of the Athabasca uranium-mining districts, they're downright ridiculous. Many of the basin's most significant deposits are just a few tens of meters wide and hundreds of meters long. Thus, such deposits can be entirely covered by a land parcel just a few hectares in area - a virtual postage stamp compared to many of the gargantuan claims that exist in the basin today. It's not having the most land that matters, it's having the right land.
07/18/07 - Uranium Arcadium
By Marin Katusa
The current uranium bull market has seen it all: land rushes, promises of immense wealth, millions of dollars poured into drill programs, and a uranium spot price that has wowed the investment community by smashing through $130 per pound. But amid the brouhaha, one thing has remained elusive: a major uranium discovery.
07/17/07 - Corn on Corn Action
By Kevin Kerr
Ethanol may not be much of a long-term energy solution, but it has been one heck of a short-term solution for farming profitability. Because ethanol production is booming, so is demand for corn. Rising demand means rising prices, which makes corn farmers very happy…maybe too happy. Corn farming has become so enticing, that many farmers are ignoring the age-old imperative to rotate their corn crops with soybeans. Corn on corn is the new craze in grain-growing country.
07/16/07 - Public vs. Private
Edited by Joel Bowman
With the big guns in the mining sector jostling for position, it's often the little takeover targets that are left exposed to more of the upside potential. Take the recent case of Australian mining giant, Rio Tinto, for example. When Rio trumped a hostile bid for Canadian Aluminum producer, Alcan, by U.S. company, Alcoa Inc., it became the single largest producer of the highly demanded metal in the world. 07/13/07 - Geothermal Energy…That's Hot
By Greg Guenthner For decades, we've been burning coal to generate most of our electricity here in the United States. While burning fossil fuels is a cheap and relatively inexpensive way to generate power, its downsides are widely known. And the public dialogue is shifting toward finding better alternatives.
07/12/07 - A Farewell to Dollars
By Dan Denning
The entire global boom quite literally begins in the iron ore of the Pilbara and the coal of Queensland. It's Australian resources that provide the raw materials for Chinese factories to crank out goods for American consumers. Aussie coal powers Japanse, Korean, and Chinese factories, too. The enabling agent in all of this is credit, which stimulates consumer demand to begin with. But in the physical scheme of things, Australia is the grand departure stage for the world's manufactured goods
07/11/07 - Investment Landfill…The Last Word
By Paul Tustain
We have hit upon a very rough - albeit questionable - method of identifying the next big failure in the CDO/CDS market. It may be coincidence, but if we had used this method a few months ago, it would have shown us to look first at Bear Stearns.
07/10/07 - Investment Landfill, Part II
By Paul Tustain
Do you remember Lloyds of London? It used to be theworld's biggest insurance underwriter. The way it worked was that rich individuals were allowed to keep all their money invested in their favourite stocks and shares, butthey could also earn a second income from those assets by pledging that same wealth to underwrite commercial insurance risks, which were sliced and diced by syndicates on behalf of their members.
07/09/07 - Real Estate Celebrities
Edited by Joel Bowman
"From housing prices in Australia's Great South East to alternative energy companies and Iran's petrol policy, your fellow readers have got it covered this week. Read on below for all the views from 'round the Rude world…"
07/06/07 - Investment Landfill - How Professional Investors Dump Their
Toxic Waste On You
By Paul Tustain The subprime mortgage collapse now hitting Bear Stearns may be just the start of something much bigger. Serious analysts from big investment firms are talking ominously about "the big one" - a major crisis that will roil the global financial markets. Our story begins with the humble mortgage. About six million people in the United States, who hold very little savings in reserve, have borrowed 100% of the value of their homes. These are the subprime borrowers. Every day that home prices continue to fall, their situation becomes more dire.
07/05/07 - A Steamy Investment
By Byron King
Compared to wind power and solar energy, geothermal power attracts very little attention…for the moment. But this unique, renewable energy source has embarked on a renaissance that will soon attract widespread attention…and investor interest.
07/04/07 - The Most Dangerous Religion
By Chris Mayer
"Thinking the guy up ahead knows what he's doing is the most dangerous religion there is." --Kurt Vonnegut, "Brief Encounters on the Inland Waterway" I like this Vonnegut quote. It reminds me of Wall Street research. And it reminds me of the investors who trust in Wall Street research.
07/03/07 - When Poor Countries Get Rich
By Chris Mayer
"There is no precedent for such fortunes suddenly finding their way into global financial markets"
- The Economist, May 26, 2007 When you hear the phrase, "There is no precedent," you should sit up and take notice. As this world totters on its way to some veiled future, it is in such small phrases that you will find big clues as to where the trade winds of the market might blow next.
07/02/07 - Time Travel
Edited by Joel Bowman
We never cease to be amazed by the new communication technologies that facilitate this kind of time and space compression. How times have changed. The days of handwritten letters are all but gone, it seems. Long ago, someone undertaking the journey we embarked on this morning would have had to set aside a few months. Today the trip we will take will take us about 4 hours…and that's including security checks! 06/29/07 - What's in a Rock, Part II
By David Galland
Between the years 1980 and 2000, gold - and pretty much all other commodities - suffered a grim bear market. Gold dropped from a high of $850 in January 1980 all the way down to $252 in July of 1999, after which it traded pretty much sideways until the current bull market started to emerge in early 2002.
06/28/07 - What's in a Rock
By David Galland
In a manufacturing business, an entrepreneur buys raw materials from suppliers and then assembles the materials into cars, shoes, candlesticks or some other final product. But in the extractive industries, such as oil or gold, the first step isn't to buy raw materials but to find them. And it's not easy, because nature has hidden them under the earth's crust, perhaps in a remote or even dangerous corner of the world.
06/27/07 - Big Pharma Gets Small
By Mike "Mish" Shedlock and Brian McAuley
Bill Miller, the manager of the $21 billion Legg Mason Value Trust Fund, has spent 15 of the last 16 years beating the market by finding value in places that are overlooked by the market. That's an easy thing to say, but when you manage billions of dollars, you aren't as nimble as the average $100 million hedge fund. So you have to take a step back, rise above the short-term noise, and look at the long-term trends that most don't bother with.
06/26/07 - Bad Markets, Good Investing
By Chris Mayer
Some of what makes a great investor is baked-in natural talent, beyond imitation in the same way countless hours of golf practice won't turn you into Tiger Woods. But some things you can copy. In fact, a few things are very easy to copy. Three of them include: discipline in the price you pay for an investment, keeping your turnover low (sticking with your investments longer) and focusing on your best ideas.
06/25/07 - Corn Mail
Edited by Joel Bowman
"The track record at Belmont Park for the 1 1/2 mile distance on the Dirt Course was 2:26.00 in 1973 when Secretariat destroyed the field by 31 lengths. His final time was 2:24.00, which translates to 10 lengths faster than the prior record. One length is equal to 1/5th of one second, therefore each second is equivalent to 5 lengths. (2 seconds = 10 lengths)" 06/22/07 - T.A.P.S. to Cheap Oil
By Byron King The Alaska Pipeline turned 30 this week! On June 20, 1977, the engineering marvel began pumping crude oil from the North Slope of Alaska to the port of Valdez. But every day of safe Pipeline operation is, in its own way, a "new story." If you doubt that, just recall what happened last August when BP had to close the Pipeline due to corrosion issues in parts of the Prudhoe Bay gathering system. Oil prices immediately spiked by up to $3 per barrel. So the Alaska Pipeline does not just move oil, it moves markets. And any other pipeline that gets built in the far North will be an equivalent, if not greater undertaking. So let's start by using the Alaska Pipeline for comparisons.
06/21/07 - Bad Generals Make Good
By Eric J. Fry
Sometimes it's good to be a bad general. On the battlefield, bad generals tend to "fight the last war." They utilize military tactics from prior campaigns, rather than devising new tactics for the campaign they are in.
06/20/07 - "Rags to Riches"
By Chris Mayer
If you looked at the Indian stock market on the surface, you would worry. You would say, "It looks expensive." In June 2005, India's Sensex Index - think of it as the Indian Dow Jones Industrial Average - crossed 7,000 for the first time. By December 2006, it had crossed 14,000. However, when you dig a little bit deeper, you find some things that put those numbers in better context. First, in the last year, about half of those returns resulted from currency gains. The dollar weakened significantly and the Indian rupee rose.
06/19/07 - Rats on Smack
By Jonathan Kolber
It sounds like something out of a bad sci-fi movie, but it's real. Groundbreaking research has established a new, deeper understanding of the nature of addiction. Researchers at Brown University have discovered that heroin, for example, induces changes in the victim's brain that create the sensation of a terrible thirst, akin to severe dehydration.
06/18/07 - Green Mail, Part II
Edited by Joel Bowman
"Fossil fuels are for facile fools. Of course, we all use them, and have derived great benefits from the availability of oil and coal, dirty as their history has been. But what now? Warring over dwindling resources instead of investing in renewable resources is just bad for everyone's economy, environment, and government (or desire for a lack thereof)." 06/15/07 - Vacation in Prudhoe Bay
By Byron King Climate is, as one would expect so far north of the Arctic Circle, constantly extreme. As Captain Cook noted, the area is "destitute of wood." Yes indeed, and it is destitute of almost everything else under God's sun. In fact, for many months of the year it is destitute of even the sun. Many great and vast and difficult things are going to happen in northern Alaska. Crude oil will continue to flow to a refinery near you, but it will not be cheap.
06/14/07 - Sucking in the 70's…and the 07s
By Mike Mueleck
Traditional stock and bond owners of the 1970s might have no pleasant recollections of the decade. From an investment standpoint, the decade of the 70s was one of the worst of the 20th century. Even though the S&P 500 more than doubled between 1970 and the middle of 1982, the Consumer Price Index had soared more than 150%. The S&P 500, therefore, produced a negative inflation-adjusted rate of return, also known as the real rate of return. During the decade of the 1970s, the S&P retuned -1% per year in real terms. The only worse decade for stocks was 1910-1919, when the market averaged a -2.6% annual real return.
06/13/07 - Wind Powered Oil
By Joel Bowman
"The answer my friend, is blowin' in the wind.
The answer is blowin' in the wind," ~ Bob Dylan Ever since Colonel Drake tapped the first commercially viable oil well in Titusville, Pennsylvania back in 1849, oil has reined the undisputed king of the energy industry. But this long reign, as with all others, will come to an end. The questions lie not in the "if," but in the "how" and the "when."
06/12/07 - Asia's Golden Age
By David Galland
More straws in the wind for gold… a wind coming out of the East. On March 29 the Tokyo Commodity Exchange (Tocom), the world's fourth-largest commodity futures exchange, announced the loosening of margins to allow greater daily price fluctuations for gold. The move broadens the range by 33% as of April 1. 06/08/07 - Ethanol Evaporates
By Kevin Kerr A recent study by Iowa State University says owners of new ethanol plants will see returns evaporate by next year as ethanol prices plunge. I agree. Recently, I took a long driving trip through the Midwest, visiting farms and ethanol plants along the way. I find it much more useful talking to farmers than just reading government-manipulated statistics. With muddy shoes and a stomach full of homemade rhubarb pie, one thing was abundantly clear: Ethanol from corn is not going to last. I estimate that the ethanol revolution will dwindle by the end of 2008, based on my discussions and observations with various farmers.
06/07/08 - What if Stocks Fall?
By Marc Faber
I have mentioned in the past that the first signs of credit tightening would be visible in the performance of US brokerage stocks. Recent pronounced weakness not only of brokerage shares, but also of other financial stocks and, in particular, sub-prime lenders, would seem to confirm that the "irreparable cracks in the financial system", about which we wrote in the January issue of my Gloom, Boom and Doom Report, are now spreading. These cracks are now causing some "illiquidity", not only in the household sector but elsewhere in the system as well. This illiquidity, sooner or later, will pressure share prices.
06/06/07 - "Go Where There is No Path"
By Marc Faber
When financial markets become excessively frothy and bubble-like, investors should be mindful of Ralph Waldo Emerson's words: "Do not go where the path may lead; go instead where there is no path and leave a trail." Unfortunately, in today's liquidity-driven global investment environment, I find it hard to identify any asset class "where there is no path." There are far too many smart - and not so smart - treasure-hunters who have bid up every imaginable investment class right around the world. It is only in the most unusual places that I can find true value (often, however, in assets that are difficult to invest in), as opposed to relative values, which certainly do exist.
06/05/07 - Selling Dollars, Buying Stuff
By Dan Denning
If you're looking for an official frantic rush out of the dollar and into another paper currency, you're looking for the wrong thing. The exodus out of the dollar began nearly four years ago, by foreign investors who saw that it was better to own real tangible assets than the unbacked liability of a bankrupt government. Dollars aren't all bad, of course. But they are just paper. And that particular color and design of paper has been losing value very rapidly against most things that are not paper, as well as a few things that are…like euros and stock certificates. 06/01/07 - Swimming Naked
By Dan Amoss Financial markets are not as cyclical as they are tidal. Bull markets ebb and flow. As share prices respond to these tidal currents, investor exuberance surges for a time, then recedes. High tide lends buoyancy to almost every stock, while concealing the flaws of misguided investment strategies.
05/31/07 - Fighting the Last War
By Chris Mayer
You have probably heard the expression about generals always "fighting the last war." Many investors do the same thing. In both cases, the consequences are costly. British Field Marshal Sir Douglas Haig is an example of that kind of general. World War I was the first mechanized war. Yet Haig still believed in the frontal assault and the power of cavalry. He discounted the trappings of modern war, such as the effectiveness of the machine gun. Haig's ideas on warfare were hopelessly out of date.
05/30/07 - The Abundant Value of Scarcity
By Chris Mayer
Buying scarcity is usually a good idea. Beachfront properties, mint condition coins and limited production automobiles all testify to the enduring value of scarcity. But sometimes scarcity is temporary, especially in the commodity markets. For months or years at a time demand will swamp supplies of a given energy product or metal or grain. Eventually, however, production catches up with demand and scarcity yields to excess.
05/29/07 - Don't Forget to Sell
By Dan Denning
Jim Chanos has Macqurie Bank (MQBKY: Nasdaq) in his sights. Uh oh. You may not know Chanos. But he's sort of infamous on Wall Street. And when he talks about the stocks he hates, people listen. In late 2000, Chanos went from reputable short-seller to stock market legend with his call to go short on the Houston-based energy trader. Enron. His call turned out to be the call of the decade. Enron blew up in spectacular fashion. The stock plummeted. Investors howled. Congressmen bellowed. Cameras flashed. 05/25/07 - Weather Roulette
By Kevin Kerr Let's play weather roulette. We have no choice in the matter, really. So we might as well play. Every year about this time, Mother Nature starts to whip up storms in the Gulf of Mexico, and farmers in the Midwest begin to worry about getting enough rain. This year is no different, weather-wise. But it feels a lot different, commodity-wise. Grain prices are already sky-high. So any setbacks during the summer could produce dramatic action in the trading pits of Chicago.
05/24/07 - Chickens Don't Kiss
By Eric J Fry
Historically, gold and U.S. stocks have tended to diverge from one another. Whenever the S&P zigged in one direction, gold would zag in the other direction. This reliable non-correlation has emboldened cautious investors throughout the ages to allocate at least 10% of their portfolios to gold.
-5/23/07 - Shipshape!
By Chris Mayer
Trade between Asia and the rest of the world is booming so fast that port facilities around the world struggle to handle the volume. Looming is another congestion crisis such as the one that happened three years ago. In the summer of 2004, container ports around the world choked-up because they simply could not keep up with the surge of containers from abroad. The problem was particularly bad on the U.S. West Coast. Many ships anchored offshore, waiting for a place to unload. There was simply no place to go. The ports of Los Angeles and Long Beach receive about half of the nation's incoming containers.
05/22/07 - Advantage: China
By Kevin Kerr
It seems like a weekly occurrence that another deal is struck between China and another key energy-producing country. Meanwhile, U.S. relations with those countries continue to erode. The countries that will likely be the "energy elite" in the coming 50 years certainly don't include the United States. In fact, the U.S. isn't even on the guest list. Meanwhile, America is losing its "preferred customer" status with many oil producing nations. Now the U.S. is seen as a third-rate customer that is taking a back seat to China and others. 05/18/07 - Dhando Returns!
By Dan Amoss Mohnish Pabrai, a popular speaker at the Value Investing Congress and portfolio manager of Pabrai Investment Funds, reminds me of a young Warren Buffett. He's delivered roughly 30% annualized returns to his investors since launching his partnership in 1999, similar to the return Buffett earned for his partners in the early years of his career.
05/17/07 - Rule #1: Don't Lose Money
By Christopher Hancock
Beating the S&P 500…That's the focus of modern investing in America. Every professional investor wants to beat the S&P - both for the sake of ego and for the sake of continuing employment. A fund manager's performance relative to the S&P has become like a golf handicap - a source of prestige for the "alpha achievers"…but a mark of shame for the underachievers. The more successfully a professional investor speculates with his clients' money, the better his handicap.
05/16/07 - Putting the "Green" in Greenland
By Chris Mayer
"I'm going to talk about global warming in a way you've never head of before - I'm going to talk about evidence." So began Dennis Avery at a recent investment conference. Avery is co-author, along with Fred Singer, of a fascinating new book titled Unstoppable Global Warming: Every 1,500 Years.
05/15/07 - The Jetsons Come to Life
By Jonathan Kolber
You may recall the TV show The Jetsons. While much of it was technologically fanciful, it may have been a little less fanciful than we thought. Already, the flying car has been prototyped (Moller Intl.). Now, the household robot seems on the horizon (hopefully, with a little less attitude than the Jetsons' "Rosie"). OK, a truly humanoid robot is a few years away. But one capable of performing as an assistant is tantalizingly close. 05/11/07 - Warren's Wisdom
By Chris Mayer There are two events that strain the capacity of Omaha, Neb., to accommodate visitors. One is the College World Series. The other is the Berkshire Hathaway Annual Shareholders Meeting. More than 27,000 people filled Qwest Center on a cloudy Saturday on the fifth day of May. All of them came to hear two remarkable investors, Warren Buffett and Charlie Munger. The duo sits before the assembled throng and tirelessly answers questions put to them. In two parts, this extended Q&A runs about five hours.
05/10/07 - Blood Oil
By David Galland
Last year marked the first time ever that U.S. imports of African crude oil surpassed imports of oil from the Middle East. This trend is accelerating in 2007. So far, three African countries (Nigeria, Angola, Algeria) account for 26% of crude oil imports, while three Middle Eastern countries (Saudi Arabia, Iraq, Kuwait) account for just 23%.
05/09/07 - Sow's Ears From Silk Purses
By Bill Bonner
"The horror! The horror!"
- Heart of Darkness, Joseph Conrad The trouble with vacations is that they are much too serious. Instead of war, depression, bankruptcy, and hyperinflation, we are dealing with things where the stakes are really high. Instead of reflecting on trade deficits and subprime credit markets, we have to think about things we actually know something about, and issues over which we might actually have some influence.
05/08/07 - Risky is Safe
By Bill Bonner
Up is down. Left is right. Good is evil. Risky is safe.That's the message we are taking from the financial world these days. One commentator says the United States is entering a glorious new period of growth and stability, thanks to the entry of Asia into the world economy. The Dow must see it coming; it's hitting one new record after another. The Dow goes up, up, up - it's been up in 21 of the last 23 sessions, something that hasn't happened since just before the Great Crash of '29. One increase follows the next with no correction. What could be safer than buying an index that almost always goes up? 05/07/07 - The UNsure Thing
Edited by Joel Bowman Most people don't have enough to lose large or to lose often. The virtue of prudence compels them to stick to the fundamentals when trading…to map out a conservative, easily attainable plan for security…to avoid gambling unnecessarily. If you find yourself nodding along at this point, you may wish to return to your coffee and continue with the rest of your morning emails…the following insights from the inimitable Rude readership will be of little interest to you. 05/04/07 - Gold, Jr.
By Doug Casey While there are a number of ways to play rising gold prices, my personal favorites are the "junior" precious metals exploration companies. These types of companies have a very high risk profile (few will ever actually make and develop an economic discovery). But informed stock selection can greatly lower that risk of speculating in these stocks, while also leaving some extraordinary upside.
05/03/07 - Rhymes With "Spankrate"
By Dan Amoss
Bankrate's business model is easy to understand, but it's richly valued share price is not. The company operates a Web site that publishes mortgage interest rates. (Here, see for yourself: www.bankrate.com.) By so doing, it directs prospective borrowers toward prospective lenders…for a fee. Business was good during the housing market's boom years. But the housing boom has busted, and yet, Bankrate's high-flying stock (Nasdaq: RATE) seems not to have heard the news.
05/02/07 - May is for Selling
By Eric J. Fry
One year ago today, we cautioned: "The month of May has arrived, which means it's time to pay homage to one of our favorite Wall Street adages: 'Sell in May and go away.' For more than 50 years, according to the Stock Trader's Almanac, U.S. stocks have performed poorly between the beginning of May and the end of October. We are expecting a repeat performance in 2006."
05/01/07 - The Anti-Investment
By Steve Sarnoff
It's funny how quickly attitudes can change. Just a few years ago, most casual investors wouldn't touch stock options with a 10-foot pole. Now the airwaves and the Internet are clogged with offers to teach the secrets of "options investing." That kind of talk is just plain dangerous. Don't get me wrong - I love the fact that more people are discovering the profit potential of options. I've been analyzing them for a long time. And since 1999, I've been recommending specific option plays for the subscribers of my Options Hotline service. 04/27/07 - Cheap Oil: RIP
By Byron King The world is not running out of oil just yet, but it is BEGINNING to run out of oil. The downward slope from "more than-enough" to "barely enough" could produce wrenching macro-economic adjustments for many nations of the world, including the U.S. But this downward slope will also produce innumerable opportunities for oil-focused investors, especially those investors who focus on the oil services sector.
04/25/07 - Sinkhole Syndrome
By Chris Mayer
"From Hawaii to New York, Alaska to North Carolina and everywhere in between, an epidemic of breaking pipes is causing unprecedented havoc," declared one of the presenters at last month's Gabelli Water Infrastructure Conference in New York. Replacing and repairing all these breaking pipes, therefore, could produce unprecedented profits for the certain water pipe manufacturers.
04/24/07 - Eyes on Oil
Edited by Joel Bowman
"I've watched oilfield operations in my own sorta-casual manner since back around 1950. There is a vast difference, today, in the way it's done insofar as environmental impact."
04/13/07 - Oil of L.A., Part II
By Eric J. Fry Your editor's mother was born in Venice, CA in 1923, back when the seaside resort still featured canals, imported gondolas and movie stars. But shortly after his mother entered the first grade at the Florence Nightingale Elementary School, the Ohio Oil Co. struck oil on the Venice Peninsula (now called the Marina Peninsula). Venice, California would never be the same.
04/12/07 - Oil of L.A.
By Byron King
Los Angeles is one of the world's great oil provinces, with historical oil extraction over the past 110 years of something near 9 billion barrels, and still counting. This volume easily places the oil production from the Los Angeles Basin in the ranks of Prudhoe Bay, Alaska (near 10 billion barrels), and about 50% greater than the East Texas field (about 6 billion barrels). But most people have no idea about the vast oil wealth that remains beneath the streets of metropolitan Los Angeles -- even most Angelinos who live literally next door to an oil pump. 04/11/07 - Ethanol: The Other Corn-Fed Pork
By Bill Bonner Of course, this time could be different. Ethanol may be a fraud, but it's got the U.S. Congress behind it. Corn-fed pork might not be good for you, but there are 3 billion Asians yearning for more of it. On those facts alone, we wouldn't bet the farm. But at least we'd be doing our sums on the subject. 04/10/07 - Dont's Sell Short Selling Short
By Gary Galles Stockholders and managers of firms, whose interests lie in higher prices for what they own or manage, miss few opportunities to deride short sellers. As Holman Jenkins of the Wall Street Journal put it, "short selling is a business widely unpopular with everyone who has a stake in seeing stock prices go up." 04/09/07 - Monday Mailbag
By Joel Bowman So, China continues to buy more of the debt the United States is unable to really afford and watchdogs continue to issue unheeded cautions. Relatively similar to yesterday, probably similar to tomorrow. 03/29/07 - Mind Over Matter…and Money
By Dan Amoss I think more clearly on a train. The rumbling helps focus my mind… Passengers are very much a part of their landscape, yet detached - a perfect occasion to sit back and think about the world that flies past the window. Here in America, the world that flies past the window is one in which capitalism has become a wealth-transfer process instead of a wealth-creation process. Without genuine wealth-creation, however, the U.S. dollar's value will become increasingly suspect.
03/28/07 - Loans From Hell
By Bill Bonner
You can take the temper of an era by looking to see what its brightest minds take up. Pythagoras applied himself to geometry. Alexander Fleming discovered penicillin. Wernher von Braun built rockets to blow up London. But if St. Augustine were alive today, he'd probably be touting the benefits of globalized markets. Isaac Newton would be running a hedge fund in London. And Henri Poincare would be working for Goldman Sachs, calculating the return on a tranche of BBB-rate subprime debt.
03/27/07 - Housing Mailbag, Part II
Edited by Joel Bowman
Last week I wrote, "It seems every man with a doormat, and some without, have an opinion about the subprime housing sector." Well, it seems that every Rude Awakening reader (most WITH doormats, we would assume) also have plenty to say regarding the issue. After publishing our two part interview with Mike "Mish" Shedlock, author of The Housing Tsunami research report, we were inundated with reader mail.
03/26/07 - Housing mailbag, Part I
Edited by Joel Bowman
We are seeing the problems in the sub-prime market now because people with poor credit to begin with are more likely to default and to do it sooner. But make no mistake, there are many, many, many, prime mortgage debtors who will not be able to continue making their mortgage payments for much longer. Should we go into a recession and these people start losing their jobs the problem will only be exacerbated. 03/23/07 - The Housing Tsunami, part II
A Conversation with Mike "Mish" Shedlock I don't think anything can go right here. I suppose it would take some sort of re-fueling of the bubble. But housing trends, unlike stock markets, are much more difficult to turn around. Housing is like a supertanker. A stock market is much more easily turned around, just because stocks are much more liquid than houses. We've got people right now that are still just trying to get out from under this.
03/22/07 - The Housing Tsunami, Part I
A Conversaation with Mike "Mish" Shedlock
Enthusiastic "Mish" fans (followers of Michael Shedlock - 20-year veteran of the finance industry and highly reputed macroeconomics analyst) are familiar with Mish's phone calls. Before each and every column he contributes to Whiskey & Gunpowder, for example, Mish calls his publisher there with some bizarre, seemingly discombobulated epiphany.
03/21/07 - What Makes the "Smart Money" Smart, Part II
By Eric J. Fry
We can't be certain that the "smart money" would be selling the shares of mortgage lenders, but we wouldn't rule out the possibility. The sub-prime sector is already a huge disaster. The rest of the mortgage-lending industry might follow. It has become popular to suggest that the worst is over - that the recent implosion in the sub-prime sector is great for the surviving lenders. They'll be able to buy baskets of distressed loans on the cheap, the optimists say, and that's really going to power their earnings going forward.
03/20/07 - What Makes the "Smart Money" Smart?
By Eric J. Fry
As some of you may know, I lived in New York for several years and moved back to Laguna Beach, California recently. This adjustment is going pretty well so far. But you know, the two places are really not that different. Laguna Beach is really just like Manhattan without bagels or Central Park…or cold weather, or crime, or filth, or air pollution. 03/15/07 - Profit First, Ego Last
By Kevin Kerr The biggest impediments to trading are negativity and self-doubt. As a trader, you may sometimes question your skills, decision-making ability, and so on. This is especially true when losses mount, and suddenly you go from hero to zero. It's important to keep yourself and your ego right-sized. Don't beat yourself up when you have a loss and don't pat yourself on the back every time you turn a profit… 03/14/07 - Credit Default Swaps…and You
By Eric J. Fry If the bond market were a blind date, most of us would be looking for the exit from the moment the date began. This creature is boring, humorless and utterly unsexy. It obsesses over mind-numbing details like basis points and duration and yields-to-maturity. Borrrrring! But the bond market is smart…often much smarter than the stock market. For whatever reason, the bond market tends to ense inflexion points earlier and more acutely than the stock market. That's why it often pays to heed her subtle messages…and her not-so-subtle messages like: SELL THE MORTGAGE LENDERS. 03/13/07 - Black Horsemen, While Knuckles
By Chris Mayer Financial bubbles are like great parties. They're fun…too much fun. No one wants to leave too early, so almost everyone stays much later than prudence would permit. Hangovers are no fun, but they are quickly forgotten…which is why we will eagerly attend the next party. Financial bubbles, though they resemble parties, can impart far more dire consequences than a mere hangover. Indeed, sometimes the consequences seem almost Apocalyptic in magnitude, as Adam Smith, author of The Money Game, explains: 03/09/07 - Grable, Gable…and Yen
By Eric J. Fry Because professional investors may borrow money in yen at interest rates of less than 1% per year, they do. These folks borrow hundreds of billions of dollars worth of yen and then buy any stock, bond, commodity or derivative that seems likely to produce a return greater than 1% per year…hopefully, much greater. This pursuit is known as the yen carry trade. 03/08/07 - Whack-A-Risk
By Eric J Fry For the better part of the last six years, risk-taking has triumphed over caution. High-risk stocks and bonds of every variety have been trouncing their low-risk counterparts for years. But during the week just passed, risk-taking has met with horrific results, while "caution-taking" has flourished. Seven days do not make a trend, of course, but they might make a trend change. If so, the days of caution-taking have arrived. 03/07/07 - Avoid the Rush…Panic Now!
By Dan Denning "Invest for the long-term." "Diversify." "We are in a period of Great Moderation in volatility, so don't panic." You should probably ignore all these soothing platitudes. Our suggestion is to panic now and avoid the rush later. In other words, sell risk. Don't try to diversify your risk away. Sell it! 03/06/07 - The Australian Renaissance
By Chris Gilpin Australia is poised for a breakout in uranium production. The land down under hosts 36% of the world's known uranium resources, and yet it accounts for only 23% of global output. But a renaissance of Australian uranium production might soon begin…on April 29th to be exact. 03/01/07 - Drilling Down
By Dan Amoss If the "law of diminishing returns" could ever be repealed, energy exploration companies would certainly vote in favor. But energy services companies would not. Indeed, the law of diminishing returns may be the energy services industry's staunchest ally, as well as the primary reason why stocks like Grant Prideco (NYSE: GRP ) and National-Oilwell Varco (NYSE: NOV ) are likely to reward investors over the coming decade. 02/28/07 - Respecting Leverage
Lord Rees-Mogg The worst mistake I have made in recent years in economic forecasting was to expect the 2000 crash well before it happened. I started warning that a stock market recession was due in 1996 - I was still hung up on the 1989 to 1992 recession which had been more serious in London than in New York. Nevertheless, the recession did eventually come, though by 2000 the bears had mostly lost confidence and been converted into belated bulls. 02/27/07 - Garbage Stocks?
By Greg Guenthner China continues to struggle with pollution as the 2008 Olympics in Beijing approach. Even in the midst of some serious cleanup efforts, the World Health Organization reports that seven out of the ten most polluted cities in the world are in China. And as important as it is to reduce the smog that chokes many of China's urban centers, consider the problems the nation faces with solid waste removal. 02/23/07 - With Love From Me To You
By Kevin Kerr Last year, our average return was around 90%. If I were your CTA, I would charge you up to 20% of those profits, as well as brokerage fees. I have to say that there are very few places you can get that kind of return on equity. But let's say you only made one-third of that amount, a 30% return. Still, I challenge you to find that with most fund managers; They would kill for those kinds of returns. 02/21/07 - Can You Handle the Truth?
By Jonathan Kolber
"You can't handle the truth," yells Jack Nicholson, as Col. Nathan Jessep, in his famous line from "A Few Good Men." This sort of arrogant thinking has led generations of government officials and those in "black ops" projects to keep a lot of things secret. But are we humans really so incapable of handling truth? Perhaps we'll soon find out. 02/20/07 - Virtual Water, Real Money
By Janice Warman and Annunziata Rees-Mogg The global virtual-water trade is estimated at around a thousand cubic kilometres a year, or 20 river Niles. Two-thirds is in crops, a quarter in meat and dairy products, and just a tenth in industrial products. The biggest net exporter of virtual water is the US, which exports in grain and beef around a third of all the water it takes from the environment; Canada, Australia, Argentina and Thailand are all net exporters too. 02/19/07 - Monday Mailbag
Edited By Joel Bowman Can there be such a thing as ethical trading, for those who trade and/or speculate in the markets rather than invest in stocks, bonds, or mutual funds? Or is ethical/green trading an oxymoron? Are traders simply skimming cream off the markets, wherever they can find it, so that there is no bias one way or the other towards companies that are either exploiters or ethically responsible or green? 02/16/07 - The Debt That House Built
By Eric J Fry The American consumer is a modern-day miracle-worker. Possessing assets worth little more than two loaves of bread and five fish - along with a few lines of credit - he manages to feed an $11 trillion economy. The bread and fish do not multiply, of course, but the lines of credit multiply without limit, which means the U.S. economy never misses a meal. 02/15/07 - Clean Sweep
By Eric J Fry Why would the world's biggest maker of nuclear reactors want to buyout a supplier of wind-turbine components? And why are European wind and solar companies the daily subjects of merger and acquisitions rumors? Judging from the lofty prices of many recent acquisitions, the corporate buyers of alternative energy companies are not merely dabbling in "green" endeavors. Rather, the buyers sense a real opportunity to gain a foothold in fast-growing industries. 02/13/07 - The Dumb Money Gets Dumber
By Eric J Fry The Commercials, often called the "smart money," have amassed their largest net-short position since just before the stock market selloff of last May and June. Not surprisingly, the small speculators - a.ka., the "dumb money" - are taking the other side of this trade. This usually-wrong crowd has amassed its largest net-long position in several months. 02/12/07 - Monday Mailbag
By Joel Bowman I am amazed to read that we only speak on ways of destroying the planet even more. Does any economist believe that the world can sustain itself the way is growing and demanding more natural resources? 02/09/07 - Unrelated Observations
By Eric Fry Yesterday, the KBW Mortgage Finance Index (MFX) dropped about 2%. But the day before, this index of mortgage-lending stocks had kissed a new all-time high, despite the fact that the earnings of most mortgage lenders are slumping…or disappearing altogether. This curious divergence suggests one of two possibilities. 02/08/07 - The Solar Revolution
By Justice Litle But anyhow, back to the technology. There is no question thin-film solar is hot right now. Stan Ovshinsky is far from the only one focused on it. The big draw for thin-film is directly tied to the silicon shortage; because silicon is so expensive these days, any process that lowers the amount of silicon used can have a significant impact on production cost. 02/07/07 - Water Goes Boom!
By Chris Mayer It may sound strange to talk about a global water crisis, especially from the perspective of a comfy Westerner who pays pennies per gallon for clean water. Then again, it probably sounded strange to talk about $60 oil when it cost little more $13 per barrel in 1999. 02/06/07 - Ethanol Mailbag, Part II
By Byron King This eliminates the need for natural gas derived nitrogen fertilizers. This can be done right now. In the future, as the necessary enzymes are developed, cellulosic ethanol from the entire sugarcane plant, corn, milo, wheat stover can make a significant contribution. All of the 36 million acres in the Conservation Reserve Program can grow switchgrass without impacting current crops at all! 02/05/07 - Monday Mailbag
By Byron King Those of you who may have missed Byron King's enlightening, and somewhat controversial, columns in the February 1 and February 2 editions of the Rude Awakening might want to check them out now… 02/02/07 - A Corny Idea, Part II
By Byron King The best way to keep it straight in your mind is to focus on the point that anything that requires or consumes more energy to obtain than it yields is not a practical energy resource over the long haul. At the most fundamental stage, when the EROEI of something becomes equal to or less than 1, that energy source becomes what is called an "energy sink." It can no longer realistically be used as a primary source of energy because it consumes more energy than it yields. 02/01/07 - A Corny Idea, Part I
By Byron King Huh? OK, let me see if I follow the logic. The background issue is that the world needs to find substitutes for its depleting supplies of oil and natural gas. We know that. We also know that ethanol is one of those potential oil substitutes. People have been running vehicles on ethanol for well over a century. And we know that a lot of corn is presently being diverted to manufacture ethanol. Even so, doesn't corn remain a food first and a fuel second? 01/31/07 - When Realtors Become Waiters
By Eric Fry If you were to ask most Wall Street analysts about the condition of the nation's housing market, they would probably say that it is "bottoming out" or "stabilizing." But if you were to pose the identical question to most CEOs of major homebuilding companies, they would probably say, "We have not yet seen tangible evidence of a market recovery," just like Lennar's CEO, Stuart Miller said on a recent conference call. 01/30/07 - When the Roof Caves In
By Dr. Kurt Richebacher Over the five recovery years since the end of 2001, the overall indebtedness of private households surged by 66%. Even though overall indebtedness soared, rising home prices still provided the private households with the biggest wealth gains of all time. The housing bubble, therefore, has been the single most important economic event of the last few years. 01/29/07 - Monday Mailbag
By Joel Bowman Is there an options pro, a technology expert, a commodities trader, a CEO of a multinational company, a farmer, an alternative energy specialist, a bartender with the perfect mojito recipe and a director of corporate takeovers and acquisitions in the house? Yes. 01/26/07 - Rigged Profits
By Dan Amoss Schlumberger's board authorized a 40% increase in its quarterly dividend. Increasing a quarterly dividend is one of the strongest messages a company can send about the long-term outlook for its business prospects, especially when a company is in the midst of a strong growth spurt. 01/25/07 - Powering Up
By Chris Mayer If only North America were experiencing frequent blackouts, electric infrastructure would not seem like such a powerful investment theme. But it's the nascent boom in power infrastructure construction and renovation is a global phenomenon. Not surprisingly, China is an important part of the picture. 01/24/07 - Of Rats and Men
By Jonathan Kolber On the one hand, this opens the possibility of widespread social engineering. (I am not making a moral statement here, merely reporting a statistical finding.) On the other hand, those who claim that sexual orientation is a choice may not fully appreciate the possibility of a strong biological predisposition. 01/23/07 - A Breathtaking Opportunity
By Justice Litle As far as the public is concerned, coal is the Rodney Dangerfield of fossil fuels: It gets no respect. Coal is dirty, lumpy and unremarkable. It is a game show booby prize, a punishment for bad children at Christmas. In terms of our daily lives, coal is almost wholly out of sight and out of mind. Yet the entire Industrial Revolution was founded on coal. 01/22/07 - A "Private" Moment on Wall Street
By Dan Denning The "Great Battle for Energy Equities" will begin heating up very soon. Major oil companies around the globe will find themselves directly competing with private equity firms and their ultra-rich clients for the energy assets of publicly-listed stocks. 01/19/07 - Oil Plays Dead
By Eric Fry What does the recent slide in crude oil imply for its long-term outlook? Is oil going to $100 a barrel or $30 a barrel…or both? If both, where's it going first? We wanted to know. So we asked a few guys who might be able to formulate better guesses than our own. Their responses are as follows… 01/18/07 - Bonus Envy
By Eric Fry The rain falls on the rich and the poor alike. That's symmetry. But after the rain lands, the rich receive a much larger share of the water than the poor. That's asymmetry. Indeed, some of the rich funnel as much water as possible toward their own personal reservoirs…even though they have more than enough water already. That's greed. 01/17/07 - Pretenders and Contenders
By Marin Katusa Consequently, interest in uranium has exploded and, as you would imagine, the market has become flooded with freshly-minted "uranium explorers"… close to 400 companies at last count. Make no mistake, the vast majority are nothing more than overpriced, over-hyped shells with little more in the way of assets than mildly radioactive moose pasture and aggressive corporate promoters who know how to spin a good story. 01/16/07 - The Return of the Dust Bowl
By Chris Mayer If you ventured outside into the cold and biting wind, sand would get in your nose and mouth and ears. You would hurry back inside and cough up black. While inside, people soaked sheets and towels. They would try to stuff them around windowsills and doorframes. But it didn't help much. Choking dust still filtered in. It spread out in little ripples on the floor and seeped through windowsills. 01/15/07 - Monday Mailbag
By Joel Bowman Each Monday we bring you a collection of thoughts from your fellow Rude readers. Before we get into the columns from this week's Rude Awakening war chest, please read on to see what's on your fellow readers minds. 01/12/07 - Time to Sell Short?
By Jeff Clark It's not as though the bulls are cleaning up, however. Despite all the hoopla over the Dow Jones Industrial Average reaching new highs, the S&P 500 and Nasdaq Composite are pretty much at the same levels reached one month ago. Indeed, buyers of index calls and index puts have nothing but losses to show for their troubles. 01/11/07 - Stalking Sick Pigeons
By Dan Amoss Despite a wilting housing market and rising personal debt burdens, American consumers continue to spend. But their spending habits are constantly changing. Consumers sometimes go for big-ticket items like washing machines, and sometimes go for a night on the town. Consumers also "play favorites." They spend more of their discretionary funds in some stores than they do in others, or favor some brands more than others. 01/10/07 - Polar Bears and Commodity Bulls
By Eric Fry "Endangered" does not mean extinct, of course. It just means that the environment has become increasingly hostile…and threatens survival. Commodity bulls will survive for a while longer, we suspect, but probably not before their population shrinks a bit more. 01/09/07 - A Refreshing Idea
By Chris Mayer The Rio Grande isn't as grande as it used to be, and the Colorado River now turns to dust before reaching the Gulf of California. The once-plentiful sources of water in the American West aren't as plentiful as they used to be. So it's little wonder that water rights are becoming a hot commodity. 01/08/07 - Monday Mailbag
By Joel Bowman Today's Rude mail covers energy, housing and money supply…three of our favorite subjects. If you have any comments about these or any other Rude issues, you can address them to you junior editor at aussiejoel@the-rude-awakening.com. As always, the views expressed in the following emails do not necessarily reflect those of your editors, nor do we vouch for their accuracy. 01/06/07 - Let It Rain
By Joel Bowman Farmers Down Under are currently experiencing the worst drought in over 100-years. The continent's arterial rivers, the Murray-Darling, are drying up and, as the Melbourne Age reports, "…if things continue this way much longer, it's not water for crops that will be insufficient, but water for towns." 01/05/07 - Solar Juggernaut
By Justice Litle The first law of thermodynamics tells us that energy can neither be created nor destroyed. The second law tells us that there is no such thing as a perfect energy transfer - a little something is always lost. These laws cannot be broken; nor can the world's growing thirst for energy be slaked easily. And so our global dependence on fossil fuels increases, simply because no easy, large-scale alternatives exist…yet. 01/04/07 - The Buy of the Century
By Steve Sjuggerud Even though the price of gold is near its highs, vintage coins have gotten crushed -- creating what I believe is the buy of the century in pre-1933 graded U.S. gold coins. The price of vintage gold coins usually tracks the gold price. But since mid-summer, this relationship has broken down. Gold is near new highs, but pre-1933 graded gold coins have lost a third of their values. It's extraordinary. 01/03/07 - Warm Globe, Cool Profits
By Dan Denning Coal production is so high because coal is not oil. We know, it sounds simple. But the simplest explanation is often the best. Oil is expensive. It is cheaper for China to power its economic wunder-economy with coal it can dig from it's own dirt, rather than oil it must import from the sands of Arabia. 01/02/07 -- Tuesday Mailbag
By Joel Bowman With each step forward we find new hurdles, new obstacles and new issues that are of concern to us. We are confronted with war, energy crisis, elections - both home and abroad - and a host of other events that shape our lives. We also find solutions, discover investment opportunities and, hopefully, learn a little from past mistakes and misadventures. | 
