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2013-06-18 GMO’s Montier on Why to Hold Cash by Robert Huebscher (Article)

Central bank policies have distorted markets to such a degree that investors are devoid of any buy-and-hold asset classes, according to James Montier. But according to Richard Bernstein, the flood of liquidity unleashed through quantitative easing (QE) now offers investors compelling opportunities.

2013-06-17 Recent Volatility in the Foreign Exchange Market and the Strengthening Yen by Team of Nomura Asset Management

There are two issues underlying the increased currency market volatility; depreciation of the Yen may have resulted in worldwide competitive devaluation and concern about early tapering of quantitative easing (QE) in the U.S. appears to have triggered currency depreciation for countries that are running current account deficits.

2013-06-17 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

When Ben Bernanke talksactually he doesn’t even have to talk to move the markets. For the past few weeks, investors have speculated about the next Fed moves and the possibility of a “tapering” of the $85 billion a month bond purchase program, perhaps as early as next week. Markets have been jittery (to put it mildly) as global stocks have fallen (thanks Japan) and international bond rates have been on the rise. Investors began over-analyzing each economic release, each comment by a Fed official, each forecast by a regulatory body or related agency.

2013-06-17 Sector Distortions Can Be Costly in Passive Investing by Joseph Paul, Kevin Simms of AllianceBernstein

Passive investing strategies that emulate an index have become increasingly popular. But passive investing can go awry when sector concentrations leave investors exposed to unintended risks.

2013-06-17 The Price of Distortion by John Hussman of Hussman Funds

Corporate profits have benefited in recent years from enormous fiscal distortions that have bloated margins 70% above their historical norms. Stock prices have benefited in recent years from enormous monetary distortions that have suppressed interest rates and encouraged investors to “reach for yield.” Combining those effects, investors have been encouraged to chase stocks, placing elevated price/earnings multiples on already elevated earnings. Investors who value stocks on the basis of these distortions are likely to discover in hindsight that they have paid a very dear price.

2013-06-17 2013 Midyear Economic Update -- Another False Dawn? by Paul Kasriel of Econtrarian, LLC

We’ve seen this movie before since midyear 2009, haven’t we? The pace of economic activity begins to quicken and it looks as though a full-throated cyclical expansion might finally be at hand, only to have the economy slip back into the doldrums. Nominal private domestic spending on currently-produced goods and services grew in the first quarter at an annualized rate of 5.5% compared to 3.4% in the previous quarter. Consumer spending accelerated, housing sales picked up and business spending on equipment and software continued to grow at a healthy pace.

2013-06-17 Anecdotal Insights into the Housing Market by Charles Lieberman of Advisors Capital Management

The current obsession is over when the Fed will begin to withdraw some of its quantitative easing policy and how this will affect markets. This is adding some volatility back into the markets, even though this change in policy has been expected for a long time. Since Fed policy is likely to change only gradually and will do little to tip the valuation balance between stocks and bonds for quite some time, we see little reason to temper our fundamentally bullish stance towards stocks and bearish view of bonds.

2013-06-17 Tidbits, Stabilization Funds, Rearview Mirrors and Magic 8-Balls by Gregg Bienstock of Lumesis

This week I decided to try something new think of it as the appetizer, dinner and dessert. The appetizer is our section of Tidbits, a look at some headlines and a thought or two around the same. The meal is where we take a deeper dive into a subject or two and dessert is where we round things out what’s new, what’s coming up and the like. If you don’t like the new format, let me know.

2013-06-17 Keynesian Model Blew It Again by Brian Wesbury, Bob Stein of First Trust Advisors

If there’s one economic conclusion we can make from recent data, it’s that the Keynesian model has failed - again.

2013-06-17 Sloppy Markets Continue by Bob Doll of Nuveen Asset Management

Last week the S&P 500 declined 0.97%,1 while many global equity averages fell for the fourth week in a row. Early in the week, discussion of tapering by the Federal Reserve was a big headwind, as discomfort over a slower pace of policy accommodation rippled through global markets. Thursday’s rally was driven by thoughts that tapering fears may be overdone. Markets were also helped by better employment and consumption data.

2013-06-17 Equities: As Companies Reinvest, the Long-Term View Turns Bullish by Ron Sloan of Invesco

This is the third in a three-part series on the economy, earnings and equities. The first two posts examined the US Federal Reserve’s gross domestic product (GDP) goals and how they set the stage for businesses to increase their capital expenditures. This post discusses the US manufacturing resurgence and the outlook for equities.

2013-06-15 Economists Are (Still) Clueless by John Mauldin of Millennium Wave Advisors

The economic forecasts of mainstream economists are quite positive, if not enirely optimistic, reflecting the current data. Should we not take heart from that? Alas, no. This week we look at some of our recent musings on that topic, triggered by a letter from a very serious economist who took umbrage when I wrote disparagingly about economists and forecasting a couple months ago.

2013-06-14 The Evolution of Emerging Market Corporate Bonds for U.S. High-Grade Fixed-Income Investors by Todd Kurisu, Thomas Brennan of William Blair

Emerging market (EM) investment-grade corporate bonds are an important and growing segment of the core fixed-income universe. These bonds have evolved to be more like U.S. investment-grade corporate bonds than high-yield or traditional emerging market debt (EMD) securities. This sector has demonstrated favorable risk, return, and diversification benefits in the context of a broad market fixed-income portfolio. Today’s fixed-income investors must have a framework for evaluating new opportunities subject to prudent risk management

2013-06-14 Going to a Digital Extreme in China by Frank Holmes of U.S. Global Investors

In its shift toward a consumption-driven economy, China has been embracing digital technology at rates that dwarf those of many developed countries. The Chinese have been scooping up smartphones, accessing the internet and consuming goods from online retailers at an incredible pace. We believe the world needs to quickly adapt to China becoming a major player in the digital marketplace, as this trend is in the early stages of exciting growth.

2013-06-14 Looking for Growth? Go Small and Global by Liliana Castillo Dearth, Bruce Aronow of AllianceBernstein

In the hunt for growth in today’s low-growth world, up-and-coming small- and mid-sized companies are a good place to start. But you need to look everywhere, from Indiana to Indonesia.

2013-06-14 Searching For Value And Finding It In Today's Market - Sector By Sector by Chuck Carnevale of F.A.S.T. Graphs

“I think the market is overvalued now,” is a common refrain that I’m hearing from most of the individual investors I have recently been coming in contact with. Consequently, many of these same investors are also currently eschewing investing in common stocks because of that fear. Although I do not agree that the market is currently overvalued, I believe I understand why so many people think it is. Individual investors currently believe the market is overvalued because of two common fallacies that at first blush appear to be logical.

2013-06-14 The Sustainability of Managed Futures Returns by Robert Keck of 6800 Capital

Many investors have begun to question the efficacy of an investment in managed futures given the most recent two years of negative performance for the industry as a whole at a time when U.S. equity prices have been achieving multi‐year highs. The concern is not so much the magnitude of the losses incurred by the managed futures industry during this period; in many cases they are relatively small in comparison to the size of the drawdowns experienced by many other asset classes such as equities, real estate, fixed income, etc., during peak periods of market stress.

2013-06-14 ProVise Bullets by Ray Ferrara of ProVise Management Group

Six years ago, in 2007, the trustees of Social Security projected that Social Security would run out of money, i.e., have a negative balance, in the year 2041. At the end of last month the trustees updated this projection and indicated that the trust fund backing the payment of Social Security would be zero by 2033. A zero trust fund does not mean the payment of Social Security benefits would also go to zero, but would drop to 77% of their originally promised levels through 2087. Is any of this getting Congress’s attention? (Source: Social Security Trustees)

2013-06-14 Japan\'s Crossroads by Jesper Madsen of Matthews Asia

The tone on investing in Japan has changed. In the six months leading up to May 22, the Tokyo Stock Price Index rose 66% in local currency terms, prompting investors to ask themselves the unthinkablewhy have I not allocated more to Japanese equities? During the same time the yen depreciated about 20%, giving Japan’s exporters some much-needed breathing room. However, while the financial markets have given the nod of approval to the economic policies of Prime Minister Shinzo Abe, or “Abenomics,” Japan may possibly be missing a learning opportunity.

2013-06-14 Which Way for Bonds? Mapping a Path Forward by Bill Gross of PIMCO

In 1980, the Federal Reserve, led by Paul Volcker, tightened the quantitative noose to tame double-digit inflation, fueling an unprecedented tailwind for bond prices. Thirty years later we find ourselves at the other extreme, as central banks print money in the trillions of dollars to stimulate economic growth, and inflation is abnormally low. While we are not likely to see a repeat of that type of bull market any time soon, we also do not believe we are at the beginning of a bear market for bonds.

2013-06-14 Global Small Cap Investing: Unconstrained Opportunities by Blake Pontius of William Blair

Equity asset allocations have become more global in recent years as investors have sought to reduce the long standing home country bias in their portfolios. Further propelling this trend has been the growing aversion to traditional asset class structures and indeed, conventional asset class definitions, in the aftermath of the 2008-2009 global fi nancial crisis. Against this backdrop, global equity strategies have continued to garner asset fl ows in Europe and have slowly begun to gain traction in the U.S. after years of tepid demand.

2013-06-14 A Sweet Find on an African Adventure by Frank Holmes of U.S. Global Investors

The heart of Africa has been beating strong in recent years due to elevated commodity prices and resilient domestic demand, despite the global economic slowdown. Among the sub-Saharan African countries, Sierra Leone was the fastest growing country last year, according to the World Bank. Its economy experienced growth that is as rare today as Fancy Red diamonds. GDP increased a whopping 18 percent.

2013-06-14 ECRI Recession Watch: New Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.3, up slightly from last week’s 131.0 (revised from 130.9). The WLI annualized growth indicator (WLIg) rose to 6.6% from 6.4% last week (revised from 6.3%).... Two weeks ago the company took a new approach to its recession call in its most recent publicly available commentary on the ECRI website: What Wealth Effect? More...

2013-06-13 China\'s Services Revolution by Sherry Zhang of Matthews Asia

Historically, China has focused on infrastructure and heavy industries at the expense of the service sector. Two years ago, service industries in China, such as hospitality, advertising, insurance and tourism, contributed a mere 43% of the country’s GDPwell below that of more developed economies like the U.S. and U.K, which saw nearly 80%. This month Sherry Zhang takes a look at the more balanced growth China will need in order to continue its economic trajectory over the next decade.

2013-06-13 The Instability of Stability by Scott Minerd of Guggenheim Partners

Hyman Minsky’s scholarship holds valuable lessons for the current dynamic in the economy. The Fed, via QE, continues to induce speculative buying in the Treasury market, which is having the effect of destabilizing a number of asset classes.

2013-06-13 Securing a Lasting Economic Recovery by Team of Northern Trust

According to the National Bureau of Economic Research, business expansions have averaged 59 months in the past 11 business cycles. June 2013 marks the fourth birthday of the current U.S. economic recovery, and this one seems very likely to be above average on this score.

2013-06-13 No Sign of “Great Rotation” Among Fund Investors by TrimTabs Asset Management of AdvisorShares

Scrutinizing May’s month end numbers, investors are putting more money into equities despite the gradual slowing of the economy over the last few months and relative year-over-year growth. Read this investor insight by TrimTabs Asset Management to see why there is no sign of a “Great Rotation” among Fund investors out of bonds into stocks.

2013-06-12 Curtiss-Wright Corp: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

Curtiss-Wright Corp (CW) is an innovative engineering company that provides highly engineered, critical function products, systems and services in the areas of flow control, motion control and surface treatment technologies to the defense, energy and commercial/industrial markets. The legacy company of Glenn Curtiss and the Wright brothers, Curtiss-Wright has a long tradition of design and manufacturing innovation and prides itself on long-standing customer relationships.

2013-06-12 Who Is Your Daddy and What Does He Do? by Cole Smead of Smead Capital Management

In the 1990 movie Kindergarten Cop, Arnold Schwarzenegger portrayed a police officer who goes undercover as John Kimble, a kindergarten teacher in Astoria, OR. Early in the movie, Mr. Kimble tells his class they are going to play a game called “Who is your daddy and what does he do?” After a myriad of answers, one of the children asks him if his ensuing headache is a tumor. Kimble replies “It’s not a tumor.” We at Smead Capital Management believe this was not only one of the more comical moments of Kindergarten Cop, but also a great question to ponder in today&rs

2013-06-12 Weekly Market Commentary by Team of Tuttle Tactical Management

This past week has been volatile. Friday’s jobs number ended up being perfect, not to good, not too bad, causing a big market rally. It has to be noted that the two day rally also came when the market was oversold and was a bounce off of the S&P 500’s 50 day moving average.

2013-06-12 Silver Lining: Fed's “Tapering” Signals Stronger Economy by Eric Takaha of Franklin Templeton Investments

The Federal Reserve’s warning that it planned to scale back purchases of Treasuries sparked a storm on Wall Street, bringing instability to what had been a pleasant May in the US markets. Almost lost in the noise, however, is a silver lining: the Fed thinks the economy may be healthy enough to fly on its own.

2013-06-12 Cyclical Stocks Appeal After Defensive-Led Rally by Vadim Zlotnikov of AllianceBernstein

This year’s equity market rally was initially led by defensive stocks, as macroeconomic concerns persisted despite improved risk appetite. With valuations in these sectors looking stretched and cyclically oriented stocks starting to rebound in May, is a bigger shift starting to unfold?

2013-06-11 Gundlach – Don’t Sell Your Bonds by Robert Huebscher (Article)

Don’t sell your bonds just yet, according to Jeffrey Gundlach. Global economic growth is slowing, he said, and the U.S. will be competing for a larger slice of a shrinking worldwide pie. A weaker economy dims the prospects for higher interest rates. The benchmark 10-year Treasury yield – currently 2.08% – will be 1.70% by the end of the year, according to Gundlach, providing profits for holders of long-term bonds.

2013-06-11 Best Practices for Business Development by Beverly Flaxington (Article)

We recently hired a salesperson to find new opportunities for our advisory firm. It’s not working out very well. My advisors don’t want to work with him because the commission I have proposed would take away from their pocketbook. How should we successfully integrate a salesperson?

2013-06-11 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The last few weeks have seen volatility emerge as concerns about the Fed’s policy of quantitative easing and the timing of changing it have taken center stage.

2013-06-11 May Flowers Bring Best Equity Market Since 1997 as Bonds Wilt by Douglas Cote of ING Investment Management

The S&P 500 has opened 2013 with its best year-through-May return since 1997. U.S. Treasury prices, in contrast, plunged last month on talks of Fed “tapering”. Don’t expect the reflation in bond yields to continue in the near term, as the Fed continues to struggle in its current war against deflation. Fundamental business activity not quantitative easing is the wellspring of sustained economic growth, creating lasting sales and profits. For investors, the two biggest self-defeating fears continue to be 1) the fear of buying equities and 2) the fear of buying bonds.

2013-06-11 How Asia's Growth Transitions and Policy Experiments Are Shaping the Global Outlook by Ramin Toloui, Tomoya Masanao, Robert Mead of PIMCO

Our view is that Chinese GDP growth will downshift, averaging 6%-7.5% for the next five years as net exports and investment are reaching their limits. In Asia, Japan is perhaps the economy closest to the “T-junction” described in PIMCO’s global secular outlook: The destination of Japan’s journey looks increasingly uncertain, with multiple potential outcomes that could stabilize or destabilize the global economy and markets.

2013-06-11 The Root System by Michael Kayes of Willingdon Wealth Management

Last week my beloved peach tree inexplicably toppled over, destroying what was certain to be a bountiful crop. It was a favorite hobby of mine, to spend hours pruning, thinning, fertilizing, and spraying the height-challenged tree in order to produce a couple bushels of scrumptious peaches in early July. Yet this year I goofed. My plan for growth was flawed in that I failed to diagnose an infestation of peach borer which was weakening the root system. Once the internal strength of the tree was compromised, the tree was doomed.

2013-06-10 China: As Growth Slows, the Need for Reform Grows by John Greenwood of Invesco

The world is closely monitoring the status of China’s economic growth rate. The country’s economy began to rapidly grow in the late 1970s, and it had been growing at about 9% or 10% per year, until the global downturn of 2008 and 2009. During the global financial crisis, the economy slowed abruptly. Since then, it has not been able to get back to that 10% growth rate.

2013-06-10 Emerging Market Opportunities by Patrick OShaughnessy, Ashvin Viswanathan of OShaughnessy Asset Management

Emerging market equities present both unique opportunities and also unique risks. Unlike more mature economies, emerging markets’ economies have the potential for impressive growth rates. But emerging markets also have the potential for damaging socio-economic and political instability. Equity returns in these countries are often impressive, but to earn these returns investors must deal with considerably higher volatility than in the developed equity markets.

2013-06-10 Worry de Jour by Charles Lieberman of Advisors Capital Management

The current obsession is over when the Fed will begin to withdraw some of its quantitative easing policy and how this will affect markets. This is adding some volatility back into the markets, even though this change in policy has been expected for a long time. Since Fed policy is likely to change only gradually and will do little to tip the valuation balance between stocks and bonds for quite some time, we see little reason to temper our fundamentally bullish stance towards stocks and bearish view of bonds.

2013-06-10 2009 vs. 2013 by John Hussman of Hussman Funds

One of the most strongly held beliefs of investors here is the notion that it is inappropriate to “Fight the Fed” reflecting the view that Federal Reserve easing is sufficient to keep stocks not only elevated, but rising. What’s baffling about this is that the last two 50% market declines both the 2001-2002 plunge and the 2008-2009 plunge occurred in environments of aggressive, persistent Federal Reserve easing.

2013-06-10 Growth in “GDP”, A Quick Look at Droughts (Yes, Drought) and Pension Data by Gregg Bienstock of Lumesis

I’m simply not going to take the bait and respond to the Employment Situation report. Regular readers know my thoughts around this monthly report that garners way too much attention (take a look back at the May 6 commentary and others around employment data). This week I focus on how and where State economies are growing, remind you of the availability of some critical data points and pass on some observations and opportunities around Pension data.

2013-06-10 Emerging Markets Mid-Year Pulse Check by Mark Mobius of Franklin Templeton Investments

Global economic growth hasn’t been terribly inspiring so far in the first half of the year, but many investors have nevertheless been inspired to pour more assets into the equity markets, some of which have surged to record highs. As we hit the mid-year point, now seems like a good time to take a pulse check of emerging markets and assess our prognosis.

2013-06-10 DC Solutions: Adding Global Bonds to Target-Date Funds by Alison Martier, Seth Masters of AllianceBernstein

Within US defined contribution (DC) target-date funds (TDFs), whether we’re considering customized TDFs for larger plans or packaged solutions for smaller plans, our research shows that having a bond allocation that is not US-centric can lead to better outcomes and enhance the effectiveness of the glide path.

2013-06-10 What\'s Capping Capital Spending? by Milton Ezrati of Lord Abbett

Now that housing has at last begun to make a contribution to the economic recovery, the pace of capital spending seems to have ebbed. To some extent, the slowed pace of such spending reasonably reflects the economy’s still-more-than-ample production capacity. Reasonable as this seems, the slowdown does come as a disappointing change from the unusually strong growth earlier in the recovery. Now, looking forward, the prospect is for this slowed growth to continue, for a while at least.

2013-06-08 Banzai! Banzai! Banzai! by John Mauldin of Millennium Wave Advisors

In practice it may be harder for Japan to grow and generate inflation than it might be for other major nations. Today we’ll focus on Japanese demographics. While the letter is full of graphs and charts, it does not paint a pretty picture. The forces of deflation will not go gently into that good night.

2013-06-07 Filling in the 2Q13 Picture and Looking Ahead by Scott Brown of Raymond James

We’re now two-thirds of the way through 2Q13. However, the second quarter economic picture is still sketchy. We have some data for April, which is subject to revision. Figures for May will begin arriving this week. Despite the cloudy near-term economic picture, the financial markets are looking ahead to better growth in the second half of the year.

2013-06-07 Never on a Friday by Jeffrey Saut of Raymond James

Over the past 10 years there have been many Hindenburg Omens triggered, but to my knowledge only one of them has actually worked (The Wall Street Journal 8/23/2010 article states the accuracy is only 25%, looking at the period from 1985). Actually, the last Hindenburg signal (December 2012) proved to be an exceptionally good point to buy stocks. I expect this “Omen” will prove to be yet another false signal because the McClellan Oscillator is just about as oversold as it ever gets.

2013-06-07 Why It Pays to Invest in Emerging Market Dividend-Payers by Frank Holmes of U.S. Global Investors

An unexpected change of heart happened in May that you might not have heard about. After years of resisting any path other than its rigorous course, Germany announced it is backing off from pure austerity and is now planning to spend billions of euros to stimulate the economies of Europe.

2013-06-07 Own These World's Leading Brands And Never Fear A Recession Again by Chuck Carnevale of F.A.S.T. Graphs

If you were to take the essence of most people’s beliefs and understanding about investing in common stocks, or the stock market for that matter, and turn it into a movie, I believe it would have to be labeled under the category science fiction. In other words, in my experience, most of what people believe about common stocks or the stock market is predicated more on opinion than on fact. But even more importantly, it is predicated on opinions that are driven by strong emotional responses.

2013-06-07 3 Reasons Not to Turn Away from Emerging Markets by Russ Koesterich of iShares Blog

Is it time to abandon underperforming emerging markets in favor of bets closer to home? Clearly “no,” says Russ and he explains why.

2013-06-07 Strategies for a Runaway Market by Robert Isbitts of Sungarden Investment Research

As stock markets around the world continue their surge, investors should be doing what investors should always be doing AVOIDING COMPLACENCY.

2013-06-07 Why Don't Investors Understand Emerging Markets? by Tassos Stassopoulos of AllianceBernstein

Big is not necessarily beautiful when it comes to forecasting emerging markets. In fact, the kind of big numbers that are often bandied around can actually make it harder for investors to understand what’s really going on. We think there is a better way.

2013-06-07 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The change at the top of the Bank of England comes at a delicate time. The May U.S. employment report will not sway the Fed either way. Eurozone and China PMI reports - interpret with caution.

2013-06-07 As Economy Heats Up, Will Commodities? by Frank Holmes of U.S. Global Investors

Don’t wait for the Fed to officially raise rates, as research shows that investors get the most benefit from materials and energy stocks by getting in now

2013-06-06 But We Want Goldilocks-Like Growth by Blaine Rollins of 361 Capital

While the equity markets would enjoy a bit of the great rotation out of the 20+ year outperformance in bonds and into equities, the move in May has been too much, too quick for even equity investors to stomach. So while the Long Treasury ETF (TLT) fell -6.8% in May, the size of the move even scared investors in REITs (IYR), Junk Bonds (JNK/HYG), and Utilities (XLU).

2013-06-06 The REAL Great Rotation by Richard Bernstein of Richard Bernstein Advisors

The phrase "Great Rotation" has come to mean a sizeable shift in asset allocation from bonds to stocks. We, too, believe that stocks are likely to secularly outperform bonds, but we don’t think that is the "great rotation" about which investors should be concerned.

2013-06-06 The Fed's Dilemma by Scott Minerd of Guggenheim Partners

Market volatility is rising as the Fed continues with its asset purchase program. The economy also appears increasingly vulnerable to a rise in interest rates, which would have an adverse effect on housing in particular.

2013-06-06 The Risk of Government Policies and the Rationing of Retirement by Jason Hsu of Research Affiliates

In late April, a group of leading economists and investment practitioners assembled in La Jolla, California, for Research Affiliates’ 2013 Advisory Panel. Our theme this year touched on two topics that have been front-and-center in recent public debates: the risk of government intervention and the potential rationing of retirement.

2013-06-06 A Longer Time Horizon Can Be an Advantage for Value Investors by Mark Cooper of PIMCO

We believe that given challenging prospects for attractive investment returns, the value premium could become even more important in the years ahead. Even in an uncertain environment like we are currently experiencing, we believe the merit in owning equities for the long term is unchanged: We want to participate as an owner in a growing, profitable business.

2013-06-06 The Wisdom of Crowds by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners

Are markets efficient? This is a debate that has been on-going for decades. In one corner you have the proponents of the Efficient Markets Hypothesis. In their world alpha does not exist, or at the very least it is not sustainable. In the other corner you have the supporters of behavioural finance who see investors as being mostly irrational and suffering from all sorts of behavioural biases which create alpha opportunities galore. Out of this long lasting stand-off a new paradigm is emerging called the Adaptive Markets Hypothesis which aims to reconcile the two.

2013-06-06 More Than a Feeling by Team of AdvisorShares

Tangible signs of fundamental weakness are appearing everywhere, yet financial market participants are simply choosing to ignore these signs. There remains a significant disconnect between the real economy and financial markets. Read this paper by Peritus Asset Management to learn how to navigate the weak fundamental picture in what they believe to be the beginning of a 15-20 year positive technical backdrop, which will put yield generating assets, such as high yield bonds, in the sweet spot.

2013-06-06 Inflation Is Still the Lesser Evil by Kenneth Rogoff of Project Syndicate

The world’s major central banks continue to express concern about inflationary spillover from their recession-fighting efforts. That is a mistake: given the political, social, and economic risks of continued slow growth, policymakers should encourage a sustained burst of moderate inflation.

2013-06-06 June Economic Update by Justin Anderson of Cambridge Advisors

Stocks sold off on the last day of the month but still managed to finish higher in May with the large-cap S&P 500 index up 2.2% and the small-cap Russell 2000 up 4.0%. International stocks finished the month lower with the MSCI EAFE index down -2.9%. Bond prices came under significant pressure as yields rose after Fed Chairman Ben Bernanke hinted that Quantitative Easing may be tapered off sooner than the market expected. The 10-Year US Treasury Yield rose sharply to end the month at 2.16%.

2013-06-05 Certainty, Rates and the Year Ahead by Peritus Asset Management of AdvisorShares

The government tells us not to worry, as the Federal Reserve comes to rescue with QE-Forever. Certainty with fiscal policy doesn’t seem to change the demand equation and cheapened money doesn’t do anything if demand isn’t present. Treasury rates remain at 0% for the foreseeable future making yield hard to find. Read this position paper by Peritus Asset Management scrutinizing how all this has come to pass and what indicators are foretelling the near future effects on the high yield asset class.

2013-06-05 Fed Advisory Council Drops A Bombshell by Gary Halbert of Halbert Wealth Management

Last Friday afternoon, the Fed released the minutes from a May 17 meeting of the Federal Advisory Council (FAC). The Council is a group of 12 influential bankers from across the country who meet periodically and give the Fed Board of Governors input regarding the economy, moneyary policy, etc. The minutes from the latest FAC meeting clearly indicate that the bankers are becoming increasingly uncomfortable with the Fed’s unprecedented “quantitative easing” policy. To my knowledge, no one in the mainstream media has reported on what you will read here today.

2013-06-05 Broader Use of Bail-Ins Could Spur a Revival of Asset-Backed Securities in Europe by Felix Blomenkamp of PIMCO

We believe ABS issuance will likely increase in Europe as eurozone developments and possible future bail-ins potentially result in higher risk premiums and funding costs for European banks. Although regulators are playing catch-up, capital markets are making room for a more credit-intensive product, helping to lead the way for a resurgence in ABS. Due to concerns over the security of bank deposits, investors may look to the ABS sector, which offers collateralized bonds that are free of bail-in risk.

2013-06-05 Driving with the Doors Off, Part II by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

About ten months ago, I wrote about my new bulldozer-yellow Jeep Wrangler, comparing the sensation of Driving with the Doors Off to investing in the New Normal, or as I like to call it, a “slow growth for as far as the eyes can see” environment. While the pavement had always been a mere twelve inches beneath my feet, Driving with The Doors Off made the experience far more real, far more alive, and far more aware of the risks that had always been there. In the New Normal it feels like we are always and everywhere just one small pothole away from the next economic disaster.

2013-06-05 Harleys and Leather Jackets by Jeffrey Bronchick of Cove Street Capital

We are just about done with Proxy Season and with summer in full swing, there is nothing more that we would like to do than kick back and indulge in the 75 pages of shame, greed, ignorance, and political correctness-with only the occasional bright light of shareholder friendly corporate governance-that make up SEC Form 14A, aka the Proxy Statement. I would postulate that this document remains an underrated and under-read part of the investment puzzle as it is the factual record of management’s incentives.

2013-06-04 Woody Brock’s Challenge to Krugman and the Keynesians by Bob Veres (Article)

A polarizing choice confronts policymakers. Either they side with Paul Krugman and the Keynesians, and advocate for aggressive fiscal measures to stimulate America’s economic growth rate, or they align themselves with the so-called austerians, who argue that budget cutbacks are necessary to eliminate deficits. A third option is rarely discussed. Its most outspoken proponent, Horace “Woody” Brock, says that America should continue to borrow, but spend wisely – and develop new policy instruments that would eliminate asset bubbles and stimulate economic activity.

2013-06-04 Vincent Reinhart on Debt and Growth in the U.S. and Japan by Robert Huebscher (Article)

High debt levels translate to slower growth, according to Vincent Reinhart. That conclusion will be disheartening to those who jumped on the errors several University of Massachusetts scholars found last month in Carmen Reinhart (Vincent’s wife) and Ken Rogoff’s research. But Vincent Reinhart is the author, along with his wife and Rogoff, of a study published in 2012 that documented the degree to which high debt-to-GDP levels correlate with slower economic growth in developed countries.

2013-06-04 Exposing False Claims about Socially Responsible Investing A Response to Adler and Kritzman by Adam M. Kanzer (Article)

When the Domini 400 Social Index was launched in 1990, the common wisdom said that if you limited your investable universe by anything other than financial factors, you would limit your returns. The performance of the index has proven that assumption to be false. Nevertheless, the assumption lives on.

2013-06-04 Employment Data, “State of the States” and Interesting Quotes Worth Exploring by Gregg Bienstock of Lumesis

I simply can’t seem to shake the notion that some basic issues continue to exist despite some of the favorable headlines and discussions with some pretty smart people who think the worst is behind us (I do subscribe to the view that it is critical to seek out views contrary to my own to keep me in check). During these discussions or when revisiting their basis, I can’t help but revert back to the data. After all, facts are facts.

2013-06-04 Wounded Heart by Bill Gross of PIMCO

Joseph Schumpeter, the originator of the phrase “creative destruction,” authored a less well-known corollary at some point in the 1930s. “Profit,” he wrote, “is temporary by nature: It will vanish in the subsequent process of competition and adaptation.” And so it has, certainly at the micro level for which his remark was obviously intended. Once proud, seemingly indestructible capitalistic giants have seen their profits fall short of “everlasting” and exhibited a far more ephemeral character.

2013-06-04 Stocks: How Long Will the Bull Run? by Milton Ezrati of Lord Abbett

Conditions appear favorable for the next 12 to 24 months. What could change the market’s prospects in the longer term? Here’s a look.

2013-06-04 Caught Between Slow Growth and the End of Easy Money by Russ Koesterich of iShares Blog

Two contradictory investor concerns are to blame for a recent pickup in market volatility. Russ explains which of the concerns is premature and what that means for investors.

2013-06-04 Finding Healthy Stocks in Europe's Troubled Landscape by Tawhid Ali of AllianceBernstein

European equity markets continue to face severe stress as the continent struggles to contain fallout from the sovereign-debt crisis. Yet this seemingly toxic environment is creating some exceptional investment opportunities in relatively healthy companies that can control their own destinies.

2013-06-04 Equities Hit Pause by Bob Doll of Nuveen Asset Management

Stocks and other risk assets struggled last week, with the S&P 500 declining 1.11%.1 Equities finished lower on Friday, the final trading session of May. The decline trimmed May’s gains and sealed the second consecutive weekly decline for U.S. equities. The S&P increased 2.34% for the month and has gained 4.31% this quarter and 15.37% for the year.1

2013-06-04 The REIT Market Today by Team of Managers Investment Group

In early May we interviewed Eric Rothman, of Urdang Securities Management and the portfolio manager for the Managers Real Estate Securities Fund. Below are his responses to our questions about the current state of the REIT market.

2013-06-03 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

And the streak continues. (The monthly winning streak that is.) While stocks have drifted lower each of the past two weeks, the Dow has surged for six straight months and the S&P 500 now stands at seven and counting. In fact, much of the week’s losses came in the final hour(s) of trading as investors took profits for the month and positioned their portfolios for the summer. No news from the Fed yet, but the bond debates continue. Housing remains strong on the economic front, but next week’s data will go a long way toward setting the tone for the future.

2013-06-03 Defense and Selective Offense by Mark Kiesel of PIMCO

Given the market’s newfound risk appetite for credit and less attractive valuations, we are taking advantage of global credit market liquidity in an effort to reduce our overall risk posture. In our selective offense approach, we continue to favor U.S. housing and housing-related areas, in addition to select investments in the energy, pipeline, specialty finance, gaming, hospitals, and airline and auto industries, given the more positive fundamental outlook for these sectors.

2013-06-03 US Balance Sheet Repair: More Difficult This Time by John Greenwood of Invesco

In most developed economies, the post-war years since 1945 saw sustained business cycle expansions alternating with shorter recessions. At the end of each expansion, authorities dealt with inflation by raising interest rates and slowing credit growth. When inflation subsided, interest rates were lowered again.

2013-06-03 Treasury Bonds Are No Longer the Conservative Investor's Friend by Jeff Middleswart of Ranger International

For more than three decades, conservative investors have been able to count on Treasury bonds to deliver a consistent income stream, while providing a safe repository for principal. Further, Treasuries have anchored portfolios over their long bull run by limiting the damage when stocks declined.

2013-06-03 Is Volatility Dead? Hardly. by Paresh Upadhyaya, Michael Temple of Pioneer Investments

Certain pundits suggest we have entered a new volatility regime that volatility has been tamed by the massive amount of liquidity injected into worldwide capital markets by very accommodative central banks. We take a different view. While volatility has been declining across many asset classes, it is creeping into several that may have escaped some investors’ attention.

2013-06-03 A Taste of What Tapering Might Mean by Christian Thwaites of Sentinel Investments

A week on from the sparks of the FOMC minutes and we can see how the market handles the subtler parts of Fed communication. Not well. Most of the dove camp talked about adjusting purchases up or down depending on economic conditions (all very reasonable and consistent) but stressed there was really nothing in the data for change. The hawk that counts, Bullard of the St. Louis Fed, even called for continued QE given low inflation. So the “employment is too low, continue” and "inflation is too low, continue” camps agree.

2013-06-03 Does Sector Shift Spell A Continued Rally? by Chris Maxey, Ryan Davis of Fortigent

Unlike most robust equity rallies, however, 2013 performance was initially led by traditionally defensive sectors, such as health care, utilities, and consumer staples. Through the first quarter, those three sectors posted an average return of 14.5%, while traditional cyclicals averaged just 9%. While some speculated this trend was due to investors’ reach for yield amid a frothy fixed income environment, the magnitude of this sector leadership (in an up move) was certainly unusual.

2013-06-03 Getting Better Returns from Dividend Stocks - Look for Growth by Steve Wenstrup of Tillar-Wenstrup

While some investors have begun to return to US Equity (funds) there is still a large amount of money on the sidelines. End of year 2012 data shows investors have trillions in money markets and savings accounts. While there is no guarantee all that money will make its way back into the market the matriculation has begun.

2013-06-03 Is QE Really THAT Important? by Brian Wesbury, Bob Stein of First Trust Advisors

The punditry has decided that anything good happening is actually bad. It is all just a sugar high based on Quantitative Easing and government stimulus and that talk of winding down or tapering QE is negative. So the latest fear is that any good data on growth is actually bad, because it means the Fed will wind down QE. They say “the economy can’t possibly grow on its own without support from the Fed and Ben Bernanke.”

2013-06-03 Qualcomm Inc: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of Qualcomm Inc through the lens of FAST Graphs fundamentals analyzer software tool. Therefore, it is offered as the first step before a more comprehensive research effort. Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-06-01 After the Gold Rush by Nouriel Roubini of Project Syndicate

The run-up in gold prices in recent years from $800 per ounce in early 2009 to above $1,900 in the fall of 2011 had all the features of a bubble. And now, like all asset-price surges that are divorced from the fundamentals of supply and demand, the gold bubble is deflating.

2013-06-01 Central Bankers Gone Wild by John Mauldin of Millennium Wave Advisors

For the last two weeks we have focused on the problems facing Japan, and such is the importance of Japan to the world economy that this week we will once again turn to the Land of the Rising Sun. I will try to summarize the situation facing the Japanese. This is critical to understand, because they are determined to share their problems with the world, and we will have no choice but to deal with them. Japan is going to affect your economy and your investments, no matter where you live; Japan is that important.

2013-05-31 This Is What Real Bubbles Look Like by Chuck Carnevale of F.A.S.T. Graphs

With the stock market currently doing so well, numerous articles are popping up playing the bubble card. Personally, I don’t believe we are anywhere near bubble levels for equities, at least in the general sense. I do think there are certain stocks that are currently overvalued, but very few that I would describe as dangerously so. To me, the true definition of a bubble is when prices have become so ludicrously high, that the dangers of a catastrophic loss large enough to be considered almost permanent become imminent or at least quite obvious.

2013-05-31 Into the Woods by Tony Crescenzi, Tadashi Kakuchi, Ben Emons of PIMCO

Excess liquidity, falling net issuance and higher correlations among assets complicate the eventual exit that the Federal Reserve and other central banks must make from their extraordinary policies. The Bank of Japan’s ideology has completely changed to “tackling deflation” from “tolerating deflation.” The key focus in the coming months will be how private sectors react. Investors who depend chiefly upon central bank activism may put themselves at risk. They may need to hedge volatility by ensuring their investments are built more on solid fundamentals and reasona

2013-05-31 Japan: Gauging the Stimulus Response by Milton Ezrati of Lord Abbett

The Japanese patient seems to be responding well to Prime Minister Shinzo Abe’s attentions. Equities have rallied strongly. The yen, as the government desires, has retreated from export-crushing highs. The economy has shown signs of a genuine cyclical pickup. The good news has buoyed spirits in Japan. It will likely continue for a while longer, too. But the picture for the country is not yet all joy, because Abe’s policies fail to address the country’s significant, longer-term, fundamental problems.

2013-05-31 The American Consumer is Not Okay by Stephen Roach of Project Syndicate

The spin-doctors are hard at work arguing that falling unemployment, rising home values, and record stock prices mean that the American consumer the major drag on the economy in the post-crisis period is finally back. The facts say otherwise.

2013-05-31 Just One Day Out of Life by Michael Han of Matthews Asia

During my visit to Korea a few weeks ago, a hot debate over an “alternative holiday” system caught my attention. When a holiday falls on a weekend in Korea, it is not generally observed by businesses on the prior or subsequent weekday. However, the government has recently sought to change this despite strong opposition from interest groups and the business sector.

2013-05-31 The Big Four Economic Indicators: Real Personal Income Less Transfer Payments by Doug Short of Advisor Perspectives (dshort.com)

I’ve now updated this commentary to include April Real Personal Income less Transfer Payments. As I’ve discussed before, the adjacent thumbnail shows the major spike in incomes triggered by pulling early 2013 income forward in November and December (bonuses, dividends, etc.) to manage the tax risks of the Fiscal Cliff. At this point we’ve recovered from the post-strategy dip, so the trend going forward will give a more realistic sense of where this indicator is heading.

2013-05-31 The Week in Fiscal and Monetary Policy by Scott Brown of Raymond James

The financial markets were more than a bit confused by the minutes of the April 30 May 1 Federal Open Market Committee meeting. Some Fed officials wanted to begin tapering the rate of asset purchases as early as June. However, that wasn’t a majority opinion. Fed Chairman Bernanke’s testimony to the Joint Economic Committee of Congress was balanced, but strongly suggested that monetary policy is unlikely to be tightened anytime soon. In his testimony, Bernanke also lectured congress on fiscal policy, which has been completely wrong-footed this year.

2013-05-31 Buying Stampede by Jeffrey Saut of Raymond James

Over the long weekend I decided to type the words “buying stampede” into Google to see what popped up. To my surprise there were more than 2,000,000 “hits” on the phrase “buying stampede” and many of them were attributed to me. While that was a pretty humbling experience, it also was surprising because I would have thought more investors would have used that phrase in connection with the many upside rally skeins that have occurred over the past dozen years.

2013-05-31 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Is central bank communication clarifying or confusing? The European Central Bank should focus its efforts on small business lending. A look beneath the surface of housing proves revealing.

2013-05-31 What\'s the Answer to Unprecedented Policies and Ultralow Rates? by Frank Holmes of U.S. Global Investors

So what’s the answer to unprecedented central bank policies that have been driving stocks higher and ultralow rates? I believe investors need to stick to a strategy that includes dividend-paying stocks that offer the opportunity for both income and growth.

2013-05-31 The Most Important (and Widely Ignored) Economic Number by Russ Koesterich of iShares Blog

While economic numbers like GDP or the monthly non-farm payroll report typically garner the headlines, Russ explains why investors should pay more attention to and may want to alter their assumptions based on -- the Chicago Fed National Activity Index (CFNAI).

2013-05-30 And That\\\'s the Week That Was by Ron Brounes of Brounes & Associates

All good things must come to an end (hopefully just temporarily). After a nice month-long weekly winning streak, stocks gave back some ground as investors over-analyzed Fed comments and worried about future monetary policy. (The stimulus will end at some pointthat’s not necessarily a bad thing.) Japan took the over-analysis the hardest as its market suffered a serious setback, though the rally for the year had been significant and some watchers expected a pullback at some point (just not all in one day).

2013-05-30 UK Secular Outlook - Morphing into the Carney Era by Mike Amey of PIMCO

The UK remains in a “stable disequilibrium”, one that needs to either transform into growing economy with narrowing income differentials or risk a more aggressive policy response. Financial repression, protection of real purchasing power, tail risks of accelerated currency weakness and price sensitivity will likely dominate UK markets over the secular horizon. Investors may consider progressively reducing exposure to assets susceptible to tail risks. Higher quality short-dated income-generating, inflation-hedging and non-sterling assets remain attractive.

2013-05-30 Are We There Yet? by Vitaliy Katsenelson of Investment Management Associates

I started writing my first book, Active Value Investing: Making Money in Range-Bound Markets, in 2005; finished it in 2007; and published the second, an abridged version of the first (The Little Book of Sideways Markets), in 2010. In both books I made the case that there is a very high probability that we are in the midst of a secular sideways market a market that goes up and down, with a lot of cyclical volatility, but ends up going nowhere for a long time.

2013-05-30 Global DC Plans: Similar Destinations, Distinctly Different Paths by Stacy Schaus, William G. S. Allport, Justin Blesy of PIMCO

DC plans in in the U.S., Australia and the U.K. may benefit from better aligning asset allocation defaults to workers’ needed outcome: purchasing power in retirement. Focusing on needed outcomes would suggest a higher allocation to real assets, earlier de-risking and consideration of tail risk hedging.

2013-05-30 Reflation in the Balance by Richard Clarida of PIMCO

Four of the world’s major central banks are now “all in” when it comes to ballooning their balance sheets in correlated, if not coordinated, efforts to achieve escape velocity in their economies. In accounting for the impact of quantitative easing on two key balance sheets, we are able to interpret, monitor and calibrate the programs currently in place. This in turn can help us prepare portfolios if or when sentiments and inflation expectations shift.

2013-05-30 Has the Fat Lady Started to Sing on the Housing Market? by Martin Pring of Pring Turner Capital Group

As decision makers we are continually looking for clues from economic activity in order to adjust portfolios. The beauty of following business cycle sequences is the value from anticipating financial market leadership changes. A major beneficiary of this four year old business recovery has been housing and housing related stocks.

2013-05-30 Morning in a New Europe by Scott Minerd of Guggenheim Partners

The pace of policy reforms is accelerating and economic recovery appears to be on the horizon for the European Union.

2013-05-30 Where the Heck Are We? by Robert Isbitts of Sungarden Investment Research

The current investment market climate reminds me of a scene from the old TV sitcom F-Troop. U.S. soldiers ask their Native American friends, the Hekawi tribe, how they got their name. As Chief Wild Eagle, the Hekawi leader, said back then (paraphasing: ”many moons ago, Tribe travel west, then come big day tribe fall over cliff, that when Hekawi get name. Medicine man say “I think we lost. Where the heck are we?”

2013-05-29 Ball Corp: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

Ball Corp (BLL) is a supplier of high quality packaging for beverage, food and household products customers, and of aerospace and other technologies and services, primarily for the U.S. government.

2013-05-29 Is This the End of the World As We Know It? by Massimo Tosato of Schroders Investment Management

After five turbulent years of decline and unrelenting economic doom there are signs that change could be afoot.

2013-05-29 April 2013 Market Commentary by Andrew Clinton of Clinton Investment Management

Interest rates rose modestly during the first quarter as ten year Treasury yields increased by approximately 0.10% or 10 basis points. Seasonal tax-time municipal bond liquidations, together with a heavier primary calendar, weighed heavily on the market causing municipal bond yields to underperform on a relative basis. In our recent market opinion we thoroughly discussed our view that the relative cheapening of municipal bonds presented investors with and attractive entry point as we expect technical conditions to improve as we move into the summer months.

2013-05-29 Filling the Hole We Have Dug by Adam Bowe, Robert Mead of PIMCO

Mining investment contributed more than 60% of the growth in Australia’s GDP in 2012. The expected decline in mining investment will likely leave a significant economic hole in the short term that needs to be filled. PIMCO expects easier monetary policy will be needed to support other sources of domestic growth, such as non-mining business investment, household consumption and housing construction.

2013-05-29 Weekly Market Commentary by Team of Tuttle Tactical Management

Last week we talked about the market being overbought in the short term, so the three day selloff (Wednesday-Friday) was to be expected. The media will blame the Fed but they didn’t tell us anything we didn’t already know. Bottom line, when the market gets extremely overbought traders will use anything and everything as an excuse to take profits. Interestingly, last week was the first streak of three down days this year. The S&P 500 seemed to find some support at 1640.

2013-05-29 Is the Fed in the Home Stretch? by Chris Maxey, Ryan Davis of Fortigent

Global equity markets stammered through a choppy environment last week following increased fears that certain central banks were considering the possibility of pulling stimulus sooner than anticipated. Markets have long been dependent on central banks, but the notion that policymakers could head for the exits leaves investors unsure how to react.

2013-05-29 Outlook on the Japanese Equity Market by Team of Nomura Asset Management

The Nikkei Stock Average closed 128 points higher, or 0.9%, to close the week at 14,612 following the dramatic 7.3% sell-off on Thursday, May 23, 2013. The Tokyo Stock Price Index (TOPIX) also added 6 points, or 0.5%, to 1,194, following a 6.9% sell-off on Thursday, May 23rd.

2013-05-28 Economic Climate Change & the Long-Term View on Yields by Sponsored Content from Loomis Sayles (Article)

Will rates rise? It’s a logical question. US Treasury yields have been in a secular downward trend since the 1980s and almost frozen at historic lows for the last several months. While recent cyclical improvements suggest the US economy is heating up, we do not expect interest rates to start soaring to record highs. The interest rate environment will eventually undergo climate change, but the process will be gradual. There are secular headwinds cooling rates, and we expect them to persist for years to come.

2013-05-28 Is Austerity a Bad Idea? by Michael Edesess (Article)

There are strong arguments for and against both austerity and Keynesianism. However, some recent writings should make us remember to question the terms of the argument itself. While evidence-based economics is important, it can also mislead.

2013-05-28 Europe's Crossroads: The End of the Muddle Through? by Andrew Balls of PIMCO

The eurozone may be nearing a critical junction, owing to its weak growth, weak institutions, debt dynamics and domestic and cross-border political challenges. The German government may take a more active leadership role after its national election, but it is more likely it will continue with piecemeal measures. Considering the current low yield environment and ample central bank liquidity, it is important to focus on absolute yield levels and returns, and consider global alternatives such as emerging market securities and currency exposure.

2013-05-28 Corrections Remain Modest by Charles Lieberman of Advisors Capital Management

Many investors are waiting for the proverbial market correction, so they have an opportunity to get into the market rally. Many investors are holding back because they don’t want to buy at a market top after such a major run. This approach has been a disaster, since the market has given them no such buying windows so far. A correction must eventually occur of course, but quite possibly only from higher levels. Stocks remain the place to be.

2013-05-28 Forward-Looking Broad-Market Investing by Team of AdvisorShares

The following is a research study that provides compelling data on a more efficient way to invest in broad markets. Many people have called the equity market of the last 10 years the “lost decade” due to its lack of net change. Madrona Funds research shows that it would have been possible to have profited by over 200% over the last decade by using their forward looking methodology, which is based on future expected earnings, not past performance.

2013-05-28 Watching Risk-Reward Ratios: Economic Data Still PositiveBut Rate Is Slowing by Rob Stein of Astor Asset Management

Risk-reward ratios are on our radar screen these days as we review the most recent economic data against the backdrop of recent market movement. This is not to say that we are in any way suggesting a top, a bear market, or even that a correction is on the horizon, even taking into account this past week’s movement and volatilityalthough each of these scenarios remains a possibility. At this point, though, we do have some minor concerns about risk-reward in the markets going forward, suggesting that a slight adjustment in beta or equity exposure from current levels is prudent.

2013-05-28 Rock, Paper, Scissors by John Hussman of Hussman Funds

There’s a sort of rock-paper-scissors relationship to financial indicators. Trend following factors typically trump valuations alone, while overvalued, overbought, overbullish syndromes trump trend-following and monetary considerations. Monetary factors tend to be most effective as confirmation of other measures, particularly of trend-following factors, but only in the absence of overvalued, overbought, overbullish syndromes.

2013-05-28 You Now Have All of Our Attention by Blaine Rollins of 361 Capital

Mr. Bernanke’s opening statement was just what the market wanted to hear... "Premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending this economic recovery and causing inflation to fall further".

2013-05-28 Taking Stock by Bob Doll of Nuveen Asset Management

U.S. and global equities were under pressure last week, with all major U.S. indices lower for only the fourth time this year. With discussion of the Fed tapering its stimulus, market uncertainty gained momentum. The S&P 500 was down 1.0% for the week.1 We consider the market pullback technical in nature since the mention of a Fed quantitative easing exit likely created a natural point to take profits after the recent rally.

2013-05-28 Declaration of Not-So-Much Dependence by Brad Evans of Heartland Advisors

There’s been much discussion lately of how alternative energy sources like wind and solar power could lower the U.S.’s dependence on foreign oil. What’s often overlooked, though, is just how much this country is already meeting its energy needs with domestically produced oil and natural gas.

2013-05-25 The Mother of All Painted-In Corners by John Mauldin of Millennium Wave Advisors

Japan has painted itself into the mother all corners. There will be no clean or easy exit. There is going to be massive economic pain as they the Japanese try and find a way out of their problems, and sadly, the pain will not be confined to Japan. This will be the true test of the theories of neo-Keynesianism writ large. Japan is going to print and monetize and spend more than almost any observer can currently imagine. You like what Paul Krugman prescribes? You think he makes sense? You (we all!) are going to be participants in a real-world experiment on how that works out.

2013-05-24 Focus on What You Know and Can Control: Be Aware of Unexpected Risks in Bonds by Warren Pierson of Baird Advisors

While corporate bonds have seen improvement in credit fundamentals, similar improvement has not taken place for municipal bonds. Ongoing challenges in municipal credit could have a meaningful negative effect on municipal bonds. Many callable bonds with longer maturities face significant extension risk with an upward movement in interest rates. Durations currently pegged to shorter call dates could extend as issuers are less likely to call in bonds prior to maturity as interest rates rise. As callable bonds get re-priced to longer maturity dates, the resulting price declines could be profound.

2013-05-24 Recession Watch: ECRIs Weekly Leading Indicator Up Slightly by Doug Short of Advisor Perspectives (dshort.com)

TheWeekly Leading Index(WLI) of the Economic Cycle Research Institute (ECRI) is at 130.6, up slightly from last weeks 130.1 (a downward revision from 130.2). The WLI annualized growth indicator (WLIg) dropped to 6.8% from 7.0% last week.

2013-05-24 Sri Lanka\'s Victory by Teresa Kong of Matthews Asia

Sri Lanka has begun to reap the fruits of peace. By diverting resources that were previously spent on its military toward things like infrastructure, tourism and education, its economy has experienced solid growth. As our small car sat in traffic on the main road leading to the Colombo airport, my driver told me about the newly planned highway scheduled to open later this year. The Colombo-Katunayake Expressway, he said, would reduce my 1.5-hour trip to about 20 minutes. More importantly, I thought, we wouldn’t be driven off the road by rickshaws referred to locally as “tuk-tuks.&#

2013-05-24 4 Ideas for Today's Low Inflation Environment by Russ Koesterich of iShares Blog

There’s certainly no shortage of things to worry about right now related to the US economy. But one thing we’re not too worried about right now: Inflation. Not only is inflation low, but the latest numbers show it’s actually falling. And as I write in my commentary this week, inflation is unlikely to become a problem in the United States for at least another 12 to 18 months. Why? There are a number of headwinds keeping US prices low in the near term.

2013-05-24 The Biggest Loser Wins by Peter Schiff of Euro Pacific

While the world’s economies jockey one another for the lead in the currency devaluation derby, it’s worth considering the value of the prize they are seeking. They believe a weak currency opens the door to trade dominance, by allowing manufacturers to undercut foreign rivals, and to economic growth, by fighting deflation. On the other side of the coin, they believe a strong currency is an economic albatross that leads to stagnation. But the demonstrable effects of currency strength and weakness reveal the emptiness of their theory.

2013-05-24 4 Market Risks Worth Worrying About by Russ Koesterich of iShares Blog

The risk of a US slowdown Not discounted in US valuations. While US valuations currently look reasonable, they’re predicated on a US economy growing at around 2% to 2.5%. The risk of slower growth is not priced into the market. If US economic data continues to disappoint, and we get a growth hiccup in the second or third quarter, then we’re likely to see some US market weakness.

2013-05-24 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The two Asian giants have a challenging year ahead. The Fed will be challenged to keep the bond market under control.

2013-05-24 After the Sell Off in Japan: 2 Reasons Not to Panic by Russ Koesterich of iShares Blog

Russ explains why Thursday’s market correction in Japan hasn’t changed his view that investors should consider a market weight to Japanese stocks.

2013-05-24 Remarkable Resilience by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

We saw how the prospect of a sooner pullback in purchases in bonds by the Fed rattled the market both in the US and globally, but the picture, to us, has not changed to any great degree. A very gradual pullback, not even going to zero, in quantitative easing due to an improved economic situation doesn’t spell disaster to us. We continue to urge investors to pay attention to both sides of the risk equation when making decisions and to keep the longer-term perspective in mind. Short-term swings are inevitable, but should not be the basis for sound decision making.

2013-05-23 The Labor Force Participation Puzzle by David Kelly of J.P. Morgan Funds

Slow growth and mediocre job creation have been common themes used to describe the U.S. economy in recent years, as both the labor market and broader economy failed to produce the snap-back rebound many expected following the deep recession seen in 2008 & 2009. Despite that lackluster growth, the unemployment rate has now fallen to 7.5% after peaking at 10% in October of 2009, a much faster decline than expected, given average employment growth of less than 125,000 per month.

2013-05-23 QE from 35,000 Feet by Scott Minerd of Guggenheim Partners

Quantitative easing has benefited from global macro events and appears likely to continue for the rest of the year. Markets, though, will continue to anticipate how the current policies will eventually be unwound.

2013-05-23 Investing in Gold: Does It Stack Up? by Team of Knowledge@Wharton

Gold has a timeless allure -- especially if you worry about stock market volatility, inflation, a decay of ordinary currency or the collapse of civilization. Yet not everyone agrees that gold offers the safe haven its promoters describe. How reliable can demand be for a commodity that very few people actually need? What is the proper role for gold in an investment portfolio? Why has its price been falling?

2013-05-23 Europe's Lost Keynesians by Kenneth Rogoff of Project Syndicate

There is no magic Keynesian bullet for the eurozone’s woes, despite what many commentators and much of the public seem to believe. The eurozone’s difficulties stem from European financial and monetary integration having gotten too far ahead of actual political, fiscal, and banking union not exactly a problem that Keynes tried to address.

2013-05-22 If You Didn\'t Buy That Powerball Ticket... by Blaine Rollins of 361 Capital

So onward and upward. What signals should Bulls be on the lookout for? Change in breadth (Up v. Down Volumes, Advancers v. Decliners), Signs of distribution (Sharp down days accompanied by large % increases in trading volumes), Change in leadership away from RISKON sectors (don’t want SmallCaps, Financials, Industrials, Transports or Housing to lag)...

2013-05-22 Cyprus and the Eurozone...Still Stuck in the Middle by Gregory Hahn of Winthrop Capital Management

The debt crisis in the Eurozone turned another chapter as Cyprus finally reached the point of requiring a bailout from the European Union. The wisdom of Gerry Rafferty’s hit song “Stuck in the Middle with You” which was written in 1973, rings true today as we watch the EU and the European Central Bank navigate the mess in Europe. With each attempt at containment, there appears some plot twist, the proposed Cyprus bank bailout is no exception. While the bailout of Cyprus and its banks is not large in size, only 10 billion, relative to the Cyprus economy, it is significant.

2013-05-22 Waiting for the Great Rotation: Why Interest Rates Could Stay Low Even Longer by Nanette Abuhoff Jacobson of Hartford Funds

The number-one question I get from investors is, “When will rates go up?” While this concern has been top of mind for the last few years, investors’ anxiety and sense of risk has intensified amid the threat of the “Great Rotation”the anticipated en masse reallocation out of bonds into equities. But so far, rates have yet to rise, leaving many people to wonder where we stand now and what may happen next. To answer these questions, I’d like to make three points.

2013-05-22 When Will the U.S. Economy Stop Slowing Down and Start Speeding Up? by Marco Pirondini of Pioneer Investments

As earnings data from companies comes trickling in, it all but confirms a slowdown in the second quarter.

2013-05-22 Asia Brief: China's Car Fleet The Largest in the World? by Edmund Harriss, James Weir of Guinness Atkinson Asset Management

Car sales in China have grown rapidly since 2009 and it is on course to outstrip the US in terms of the size of its car fleet by the end of this decade. This presents a major challenge to the Chinese government, which must balance its people’s happiness and political stability with economic development in an environment which has already been compromised. The momentum of demand for new passenger vehicles is likely to make air quality worse and Beijing has introduced emissions and efficiency standards to address the problem.

2013-05-22 Malaysia's Post-Election Investment Outlook by Scott Klimo of Saturna Capital

Earlier this year we identified ASEAN as the most attractive region within the emerging markets universe. That prediction has proved accurate. Market indices (USD returns) year-to-date through April in the Philippines, Thailand, and Indonesia are 23%, 22%, and 16%, respectively. Singapore (which we do not consider an emerging market) gained 6%, while Malaysia rose only 3.9%. So what’s the outlook for Malaysia?

2013-05-22 How to Turn the ECB Straggler into a Central Bank Pacemaker by Myles Bradshaw of PIMCO

In our opinion, the ECB will be most effective if it can design a programme that helps banks deleverage more quickly to stimulate growth in the real economy. To have a meaningful impact on Europe’s broken transmission mechanism, any ECB programme needs to not only lower the cost of credit, but also be regionally tailored or big enough to be effective. Long-term investors should remain focused on the quality of issuers’ balance sheets rather than simply taking more risk because of lower prospective returns.

2013-05-22 A Whiff of Confidence by David Kelly of J.P. Morgan Funds

The single biggest on-going survey of consumer confidence in the United States is conducted by Rasmussen, who survey 500 consumers every night on their views of the U.S. economy and their personal finances. Since October 2007, there has not been a single month in which the index produced by this survey has exceeded 100. However, since the start of May it has averaged well above this level.

2013-05-22 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

Four times a charm. Despite lackluster earnings and economic data that raises some concerns, investors continue to play the game of “how high can we go” and stocks climbed for the fourth straight week With 15k (Dow) and 1600 (S&P) well in the rearview mirror, investors seem to have their targets set on bigger and better things. Some bullish comments by a hedge manager; a solid consumer sentiment reading; a reason for the Fed to hold off on tapering its bond buying stimulusand it’s off to the races for equities (again).

2013-05-22 Where is inflation headed? What will it mean for investors? by Russ Koesterich of BlackRock Investment Management

Slow economic growth and long-term headwinds should keep inflation contained. Low inflation should help support equity markets and high yield bonds, but may be a negative for gold prices. The inflation environment should also help prevent interest rates from rising too fast.

2013-05-22 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Once again stock prices moved higher last week despite mostly poor economic data and a background in Washington DC of multiple scandals. The latter begging the question as to whether substantive policy actions are now off the table for the year.

2013-05-22 Is Japan's Economic Rebound For Real? by Daisuke Nomoto of Columbia Management

The two phrases “Abenomics” and the “BOJ’s Shock and Awe Monetary Easing” are all over the headlines about Japan. Prime Minister Abe unveiled his economic policy late last year calling for a 3% annual nominal gross domestic product (GDP) growth target and an aggressive monetary easing by the BOJ (The Bank of Japan) to achieve 2% inflation. The BOJ unleashed the world’s most intense burst of monetary stimulus last month promising to double the monetary base to 270 trillion yen ($2.7 trillion) by the end of 2014 to defeat deflation.

2013-05-22 Making Investment Grade Is Only the Beginning for Turkey by Frank Holmes of U.S. Global Investors

It’s been a few months since I was in Istanbul and wrote about Turkey’s exciting cultural and economic transformation, and the country is still making headlines. The Emerging Europe Fund’s (EUROX) portfolio manager, Tim Steinle, has been very bullish on Turkey for multiple reasons, including its young growing demographic, its fiscal and monetary policies geared toward growth, and its entrepreneurial mindset and pro-business policies, to name just a few.

2013-05-22 China's IPO Drought: Will it Lift? by Eddie Chow of Franklin Templeton Investments

Following a flood of initial public offerings (IPOs) that lasted several years, China’s local A-share market has been in an IPO drought since late last year. There is some speculation China’s regulatory body, the China Securities Regulatory Commission (CSRC), may allow some IPOs to trickle back into the market this year, but we don’t yet know exactly when or at what volume. I’ve invited my colleague Eddie Chow to share his perspective on why IPO issuance has been halted in China’s local market, and where we see potential opportunities in the current environment.

2013-05-21 Does Your Firm Need a COO? by Beverly Flaxington (Article)

I run a 15-person firm. A consultant come and prepared a growth plan for our future. The number-one recommendation was that I create a role for a chief operating officer and hire this person. But I don’t see how a COO helps a firm that is as small as mine. This seems the solution for a firm of 50 or above, and I can’t afford a high-paid individual repeating what I already do.

2013-05-21 (Yawn)...As Equities Advance Another 2% by Bob Doll of Nuveen Asset Management

U.S. equities advanced again last week, with the S&P 500 increasing 2.1%. Global stocks are reaching new highs in this cycle and the U.S. market is at an all-time high. Bonds were hurt in the move, dragging credit down, while commodities fell slightly on weaker manufacturing data. The unrelenting equity rally and an environment without positive news about earnings and the economy is making many investors uncomfortable.

2013-05-21 Developed Europe: Regional Economic Review 1Q 2013 by Team of Thomas White International

After withdrawing into the background in late 2012, the Euro-zone sovereign debt crisis resurfaced in the first quarter with the Italian elections and Cyprus’ banking crisis. In late February, Italy’s national elections resulted in a fractured mandate, and Italians voted out the incumbent, the main architect of the country’s austerity and reforms agenda.

2013-05-21 Why the Lack of Inflation Is a Problem by Chris Maxey, Ryan Davis of Fortigent

Given the outsized role central banks are playing in today’s financial markets, inflation watching has taken on increased significance.It is widely assumed that continued easy money policies are only possible as long as price increases remain under control.At the same time, for a global economy trying to escape an extended period of weak growth and burdensome debt loads, low inflation is a double-edged sword.

2013-05-21 Capitalism and Democracy by Bill O'Grady of Confluence Investment Management

In the Italian elections, the party that showed the strongest results was the Five Star Movement, led by the comedian Beppe Grillo. Despite this strong showing, the party failed to form a government and refused to participate in any coalitions. This decision not to participate in the political process has been exhibited by other protest groups, such as Occupy Wall Street, the Israeli Tent Movement, and the Spanish “Indignant” movement.

2013-05-21 High Yield Market Overview by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch U.S. High Yield Master II Constrained Index, was up 1.86% for the month of April, as the high yield market continued to benefit from stable U.S. economic growth and steady asset reflation driven by the Federal Reserve and global central banks.

2013-05-21 As Energy Demand Outpaces Supply, Asia Looks Overseas to Refuel by Raja Mukherji, Taosha Wang of PIMCO

Many Asian countries are encountering growing energy shortages due to declining indigenous resources and domestic consumption growth. Oil companies in Asia frequently engage in overseas acquisitions. In many cases, these transactions help enlarge reserve base, access technological know-hows and enhance corporate profitability. Strong sovereign support is a key investment thesis in the Asian oil and gas sector. Through our bottom-up analysis, we are finding numerous investment opportunities.

2013-05-21 Are Equity Investors Pushing the Gas Pedal Too Hard? by Norman Boersma of Franklin Templeton Investments

Whatever previous reticence investors may have had about equities last year seems to have evaporated and, with remarkable speed, turned into fear over having missed the equity rally. Some major market averages have accelerated at a pace some say is reckless, so as we head toward the mid-point of the year, Norm Boersma, CFA, chief investment officer of Templeton Global Equity Group, takes a look at reasons investors might continue to push the gas pedalor tap the brakes.

2013-05-21 Putting Cash to Work: 3 Ways to Enter the Market Today by Russ Koesterich of iShares Blog

With global equities up more than 25% since their bottom last June, many investors are wondering: “Is it too late to move cash from the sidelines to stocks?” No, says Russ, and he offers three ideas for where find value today.

2013-05-21 General Electric Looks Like It's Becoming The Shareholder-Friendly Company It Once Was by Chuck Carnevale of F.A.S.T. Graphs

General Electric (GE) was once revered as one of the bluest of all blue-chip companies in the world. During its glory days, GE was respected as an industrial conglomerate that manufactured some of the world’s best jet engines, locomotives, appliances and even the highly regarded General Electric light bulb. However, as best I can determine, the roots of General Electric’s ultimate demise were established in 1930 when the company, responding to the great depression, formed GE Finance in order to help their customers finance GE appliances over time.

2013-05-21 Don't Set Much Store in the Equity Risk Premium by Christian Thwaites of Sentinel Investments

An old measure but a useful one. It should give us some indication of the market after the 23% gain in the S&P since November. The measure is simple enough: the forward price earnings yield less the yield on the GT30. This makes sense because the duration of equities is around 16.5, which is close to the GT30 of 19. By the way, other sources, notably the New York Fed use different approaches, for example Cyclically Adjusted Price Earnings and a shorter duration risk-free rate. But it’s the vectors that matter not the scale.

2013-05-20 Global Real Estate Is Hot Again, but Where Are the Best Opportunities? by Joe Rodriguez of Invesco

In this low interest rate environment, yield-hungry investors have been moving out of bonds, and many are opting for real estate investment opportunities. Combine that with a structural undersupply of institutional quality real estate in many key cities across the globe, and an attractive case for investment starts to emerge. Here’s where we see the most attractive and promising opportunities by region this year.

2013-05-20 Reinvigorating Egypt's Economy by Mohamed El-Erian of Project Syndicate

While blaming the revolution is not a persuasive explanation for Egypt’s current economic woes, its appeal to many Egyptians is understandable. Over the last few months, their economic situation has gone from bad to worse.

2013-05-20 Abenomics for Europe by Scott Minerd of Guggenheim Partners

The devaluation of the Japanese yen may lead EU policymakers to implement measures that will help the economic situation in the single currency zone.

2013-05-20 ProVise Bullets by Ray Ferrara of ProVise Management Group

When the President put forth his proposed budget for the 2014-15 fiscal year which begins October 1st, he went out of his way to offer an olive branch to the Republicans on entitlement programs - especially Social Security and Medicare. The President proposed changing the cost of living adjustments in such a way that, over time, there would be significant savings to the government, but of course, take the money away from the recipients.

2013-05-20 A European Vacation from Austerity? by Milton Ezrati of Lord Abbett

Recession-wracked governments in the eurozone are rethinking fiscal constraints.

2013-05-20 Not in Kansas Anymore by John Hussman of Hussman Funds

Knowing where you are doesn’t mean that you’re leaving, but you should still know where you are.

2013-05-20 Alpha, Beta! by Jeffrey Saut of Raymond James

I had a somewhat lengthy conversation with Rich Bernstein last Friday. I have been on TV with Rich over the years, but have never really had a one-on-one talk with him. Recall that Richard Bernstein was the Chief U.S. Strategist at Merrill Lynch for years before becoming the eponymous captain of Richard Bernstein Advisors (RBA). I was speaking with Rich because I have developed an interest in a few of the funds he manages for various entities. Rich began by stating he is extremely bullish, believing we are in one of the biggest “bull markets” ever.

2013-05-20 Still Bullish by Brian Wesbury, Bob Stein of First Trust Advisors

Like Rip Van Winkle, imagine you went to sleep on October 9, 2007 and didn’t wake up until yesterday. On 10/9/2007, equities were at record highs: 14,165 for the Dow Jones Industrial Average and 1,565 for the S&P 500.

2013-05-18 All Japan, All the Time by John Mauldin of Millennium Wave Advisors

This week we again focus on Japan. Their stock market has been on a tear, and their economy grew 3.5% last quarter. Is Abenomics really the answer to all their problems? Is it just a matter of turning the monetary dial a little higher and voila, there is growth? Why doesn’t everyone try that? And what would happen if they did?

2013-05-17 Making the Most of Equity Allocations by Andrew Pyne, Sabrina Callin of PIMCO

We believe slowing global growth and deleveraging are likely to result in lower long-term returns for equities. Traditional approaches to building equity portfolios may not be enough for investors to meet their return goals. We have found three complementary ways investors can enhance equity return potential: fundamental indexes, index-plus strategies and high active share stock selection approaches.

2013-05-17 Open-Access Economics by Barry Eichengreen of Project Syndicate

The brouhaha over Carmen Reinhart’s and Kenneth Rogoff’s article “Growth in a Time of Debt” has raised troubling questions not only about the efficacy of austerity, but also about the reliability of economic analysis. If a flawed study could appear in a prestigious working-paper series, why should anyone trust economic research?

2013-05-17 A Matter of Perspective by Robert Horrocks of Matthews Asia

A Hong Kong investor once told me that he considered Asia’s capital markets to be like breaking waves; their rhythms often violent, but ultimately, they make a steady progression up the shore. It has often been noted that many Asia investors play these short-term rhythms. But ultimately the tide does come in and there is room for the long-term investor.

2013-05-17 Opportunistic Investing: Making the Most of Your Cash in Today's Market by Chris Engelman of Cedar Hill Associates

With the Standard and Poor’s 500 Index rising more than 20% since last June, some people are reluctant to invest now, fearful that stocks are poised to tumble again. By focusing on their long-term investment objectives rather than short-term market fluctuations, however, investors can plan for a sound financial future. Here, Cedar Hill Managing Director Chris Engelman offers strategies for building a portfolio that helps to limit market risks and increases the likelihood of achieving your long-term goals.

2013-05-17 Weekly Economic Commentary by Team of Northern Trust

Predictions of an American manufacturing renaissance may be premature. Does the Fed have to worry about deflation? The U.S. fiscal deficit is narrowing rapidly.

2013-05-17 Recession Watch: ECRI\'s Weekly Leading Indicator Declines by Doug Short of Advisor Perspectives (dshort.com)

Essentially ECRI is sticking to its call that a recession began in mid-2012, although the company calls it a "mild" recession, which is quite a shift from their original stance 19 months ago: "...if you think this is a bad economy, you haven’t seen anything yet."

2013-05-17 Finding Opportunity Far and Near by Frank Holmes of U.S. Global Investors

Would it surprise you to learn that a vast majority of equity valuation models state that stocks should head much higher over the next five years?

2013-05-16 Searching For a New Investment Paradigm by Philip Lawton of Research Affiliates

Investment management is supposed to be built on brilliant minds’ novel insights and innovative approachesor so our training and traditions have led us to believe. We celebrate our best investors, such as Warren Buffett, Peter Lynch, and Bill Gross, and our best financial theories, such as modern portfolio theory (MPT) and the efficient markets hypothesis (EMH).

2013-05-16 Investors Living in Emerging Markets are a Bullish Bunch! by Mark Mobius of Franklin Templeton Investments

Part of my job involves putting myself out on a limb at times, and I have taken the risk of being subject to contrary (sometimes enthusiastically so) viewpoints. I’ve even been accused of being too optimistic about emerging markets, perhaps partly because my views often represent a stark contrast to dramatic news headlines. So when I took a look at the findings of Franklin Templeton Investments’ 2013 Global Investor Sentiment Survey (GISS),1 I was pleased to discover my longstanding optimism about emerging markets seems to be spreading among investors.

2013-05-16 Hold Your Houses: The Housing Recovery May Take Longer Than You Think To Reach Consumers by Joshua Anderson, Emmanuel S. Sharef, Grover Burthey of PIMCO

New residential construction needs to double from 2012 levels to meet long-run stable demand, and the pace of that increase is critical. Consumer credit growth is hindered by strict lending standards, continued deleveraging and limits to mortgage equity withdrawal. As a result, the balance of mortgage debt is unlikely to meaningfully increase in the next 12-18 months, delaying a return of the virtuous consumer cycle.

2013-05-16 The Dow Hits All-Time Highs, But The Truth Is It Remains Cheaply Valued by Chuck Carnevale of F.A.S.T. Graphs

The Dow Jones industrial average sits above 15,000, an all-time high. But don’t be fooled, this doesn’t mean that stocks are expensive. I understand that it seems logical to assume that

2013-05-16 Where Are the Bears? Evidence vs. Anecdotes in Assessing Market Sentiment Over a Full Market Cycle by JJ Abodeely of Sitka Pacific Capital Management

Imagine the stock market as a national park with just three kinds of animals: bulls, bears, and pigs. The saying “bulls make money, bears make money, pigs get slaughtered” conveys the idea that one can be bullish or bearish and be successful depending on the market environment, whereas greedy pigs are almost always set up for catastrophe.

2013-05-15 And That\\\'s the Week That Was by Ron Brounes of Brounes & Associates

Fiscal Cliff. Sequester. Different names for similar budgetary issues that both basically resulted in games of Congressional “kick the can.” Now in a stroke of luck for non-compromising politicos, the budget deficit is shrinking as higher payroll taxes and paybacks from previously bailed out entities (thanks Fan) have enhanced government revenues since the beginning of the year.

2013-05-15 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks moved higher again last week as the data continues to reflect an economy that continues to trudge along to the consternation of many.

2013-05-15 Is Japan\'s Sun Rising Again? by Kenichi Amaki of Matthews Asia

Japan’s stock market continues to rise while its currency heads in the other direction. Its new leaders, now enjoying high approval ratings, are battling deflation and trying to jump-start its economy with a new determination. This month Kenichi Amaki takes a look at what, if anything, is different this time.

2013-05-15 Yen Weakness: Buffett\'s \"Shot Heard Round the World\'\" by Bill Smead of Smead Capital Management

We returned recently from the Berkshire Hathaway Annual Shareholder Conference. The most exciting and profound comment to us was what Warren Buffett said about the unprecedented actions the last three years by the Federal Reserve Board. Buffett was asked about the risks of the Federal Reserve’s current plan to buy Treasuries to keep interest rates very low.

2013-05-15 Weekly Market Commentary by Team of Tuttle Tactical Management

We have been talking about some troubling divergences in the market for the past couple of weeks. These have worked themselves out--- Small and mid cap stocks are now outperforming the S&P 500 over the past week and month and Treasury Bond yields are coming back up.

2013-05-15 Consumers: The Great Sobriety by Milton Ezrati of Lord Abbett

Americans have cut debt, boosted savings, and held spending in checkall of which should aid the economy.

2013-05-15 Pacific Basin Market Overview by Team of Nomura Asset Management

Pacific Basin equity markets continued to rally in April, led by Japan where the central bank announced that it intends to double the monetary base and inject liquidity into the markets. The MSCI AC Asia Pacific Free Index including Japan gained 4.9% while the MSCI AC Asia Pacific ex Japan Free Index closed 2.6% higher in April. (All performance figures are based on MSCI indices in U.S. dollar terms with dividends included unless otherwise stated.)

2013-05-15 The Great Capitulation by Pamela Rosenau of HighTower Advisors

If you were to browse the virtual bookshelves of Amazon, some of the latest titles do not seem overly optimistic about the future. In Niall Ferguson’s The Great Degeneration, he examines why civil society is in complete “free fall”. Another recent “pick me up” entitled The Great Deformation, by former Reagan budget director David Stockman, discusses the negative impacts of Washington’s political dysfunction to our democracy.

2013-05-14 Is Kyle Bass Wrong About Japan? by Robert Huebscher (Article)

It’s standard practice for short sellers to kick dirt on their targets, and Kyle Bass is doing just that by asserting that Japan’s economy is on the verge of a financial crisis. In a talk on May 3, he said that Japan’s demise is imminent. So far, though, Bass has been wrong – and he has his detractors, who are far less certain of Japan’s destiny.

2013-05-14 David Rosenberg – My Love Affair with Bonds is Over by Robert Huebscher (Article)

The chorus of rate-spike-fearing inflationists has a new member. David Rosenberg, a stalwart advocate of fixed-income investing for the last quarter century, publicly declared on May 3 that his “love affair with the bond market has come to an end.” Prepare for a redux of 1970s stagflation, he said, and he advised investors how to construct portfolios to prepare for that scenario.

2013-05-14 Nouriel Roubini: Four Reasons Investors Should be Worried by Robert Huebscher (Article)

Despite a modest recovery from the nadir of the financial crisis, the global economy still faces tail risks, according to Nouriel Roubini. Roubini’s forecast is not as gloomy as the one that earned the moniker “Doctor Doom,” when he correctly predicted the housing market collapse and the ensuing global recession. But, in a talk May 1, he identified today’s biggest danger points in Europe, the U.S., China and geopolitics which he said threaten to destabilize the global economy.

2013-05-14 Mohamed El-Erian: The Three-Speed Global Economy by Robert Huebscher (Article)

The global economy is operating at three distinct speeds, according to Mohamed El-Erian, and investors need to understand the implications of the divergent paths that key countries are following. Japan and most European countries are going backward, he said, and could continue in that direction for decades. The U.S. is “healing,” but not quickly enough to get to “escape velocity.” Certain emerging markets, meanwhile, are adapting technology and innovation and are growing rapidly.

2013-05-14 Letter to the Editor by Various (Article)

A reader responds to Robert Huebscher’s article, Niall Ferguson: Four Reasons Why the U.S. is Failing, which appeared last week.

2013-05-14 Guide to Working with Monetary Napalm by Scott Colyer of Advisors Asset Management

Napalm is a highly incendiary form of jellied fuel. It was used extensively in the Vietnam War to quickly ignite massive fires over large areas of land. In the world of financial incendiaries, the Fed’s overwhelming monetary stimulus has ignited asset prices in the United States with the force and effectiveness of napalm. Is the fire short lived? Are the gains in asset prices temporary or can they be believed? Are the housing and stock markets on fire just because of the Fed’s quantitative easing (QE) or could there be a much more fundamental reason?

2013-05-14 It\'s Not That Bad Out There by Brian Wesbury, Bob Stein of First Trust Advisors

Certain things, like the sun rising, or the tides shifting, can be counted on. It’s also true that when government shrinks as a share of GDP, things start to pick up.

2013-05-14 Cyclical and Emerging Market Strength May Be Pointing to Better Growth by Bob Doll of Nuveen Asset Management

Last week U.S. equities advanced as the S&P 500 increased by 1.3%. We have been amazed bythe market’s ability to continue to rally in an environment in which sales growth has been anemic and earnings gains have been largely based on companies’ abilities to manage margins and utilize financial engineering.

2013-05-14 Who is Henry Singleton? by Jeffrey Saut of Raymond James

The year was 1974 and Teledyne (TDY/$77.56/Outperform), on a split-adjusted basis, was trading at about $0.05 per share. By 1986 it was changing hands around $75 per share. Unfortunately, back in 1974 I didn’t have enough money to buy more than 10 shares, having lived through the devastating bear market of 1973 1974 where the D-J Industrial Average (INDU/15118.49) lost 47% of its value.

2013-05-14 The Budget Deficit by Scott Brown of Raymond James

The Monthly Treasury Statement showed a large budget surplus for April. Some of that may prove to be temporary. Income was pulled forward into 2012 ahead of expected tax increases in 2013 and that was reflected in higher tax payments in April. Some of it is payback from the bailouts of a few years ago (for example, earnings from Fannie Mae and Freddie Mac). However, much of the improvement reflects a rebound from a severe recession. Tax revenues are recovering and recession-related expenses are trending lower.

2013-05-14 New Normal ... Morphing by Mohamed El-Erian of PIMCO

The New Normal has morphed to include consequential elements of a "stable disequilibrium." In the midst of notable multi-speed dynamics, the global economy as a whole is muddling along a road that will give way over the next three to five years to one of two stark alternatives: either sustainable global growth, institutional and political renewal in the West and safe deleveraging; or growth shortfalls that cause financial instability, fuel greater social tensions, accentuate political dysfunctions and complicate debt traps.

2013-05-13 Skills, Education, and Employment by John Mauldin of Millennium Wave Advisors

It is graduation time, and this morning finds me swimming in a sea of fresh young faces as a young friend graduates, along with a thousand classmates. But to what? I concluded my final formal education efforts in late 1974, in the midst of a stagflationary recession, so it was not the best of times to be looking for work. It turned out that I had a far different future ahead of me than I envisioned then. But I would trade places with any of those kids who graduated today, as my vision of the next 40 years is actually very optimistic.

2013-05-13 Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management

Equity markets remained strong and the portfolio continued to outperform well, with a monthly gain of 3.2% vs 0.6% for the index. After two decades of policy torpor, Japan’s government has rapidly adopted a trio of policies to kick start the economy: monetary and fiscal stimulus, plus a weak yen. This is shock and awe’ relative to GDP, being far greater than any experiment in any developed country since the Second World War.

2013-05-13 An Idea Around Disclosure and Something to Consider on Pension Reform by Gregg Bienstock of Lumesis

A fair amount was written this week regarding the SEC Cease and Desist Order against the City of Harrisburg (“Order”) and, while certainly not privy to all that was said, we want to take a slightly different perspective. Before getting there, a very brief summation of the Legal Discussion from the Order and the SEC’s Report of Investigation (“Report”).

2013-05-13 Closing Arguments: Nothing Further, Your Honor by John Hussman of Hussman Funds

Nothing further, your honor. I am resting my case.

2013-05-13 Tenuous Times? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

US stocks continue to make new highs, yet commodities have struggled and Treasury yields remain low, albeit up from recent near-record lows. Although not the standard playbook, we remain optimistic but acknowledge an equity pullback can occur at any time. Manufacturing data has been soft, the employment picture is mixed, and housing continues to improve. The European Central Bank (ECB) has joined the easing arty, illustrating the continued disappointments coming out of the eurozone.

2013-05-13 The Cash Conundrum by Ric Dillon of Diamond Hill Investments

In an effort to keep interest rates low, the Federal Reserve, along with other global central banks, is flooding the financial markets with liquidity. This additional liquidity is pushing prices for most financial and real assets higher. At some point, the Fed’s policy of easing will end and in some ways will be reversed. Purchases of government-backed securities may end this year (QE3); however, the Fed has signaled that the near zero interest rate policy for Fed Funds is likely to continue into 2015.

2013-05-13 Americas: Regional Economic Review 1Q 2013 by Team of Thomas White International

Weaker global demand and prices for energy and commodities, as well as softer than expected domestic consumption have restricted the growth outlook for most economies in the Americas region during the first three months of the year. Fewer monthly job additions in the U.S. have dented consumer confidence, and growth for the current year is now forecast to be moderately lower than earlier expectations.

2013-05-13 Uncomfortable With the Debate of Our Times by Michael Kayes of Willingdon Wealth Management

A relatively weak first quarter earnings season is winding down, while major stock market indices are reaching all-time highs. This doesn’t quite add up, does it? Overall, corporate profits advanced at an anemic 2.5% in the first quarter, well below the long-term average of 7%. Worse over, revenues were actually flat in the first quarter, below expectations in most cases. On top of that, most companies that have reported earnings have also lowered estimates for the remainder of the year.

2013-05-11 Three Reasons to Buy Gold Equities Today by Frank Holmes of U.S. Global Investors

A strong stomach and a tremendous amount of patience are required for gold stock investors these days, as miners have been exhibiting their typical volatility pattern. That’s why I often say to anticipate before you participate, because gold stocks are historically twice as volatile as U.S. stocks. As of March 31, 2013, using 10-year data, the NYSE Arca Gold BUGS Index (HUI) had a rolling one-year standard deviation of nearly 35 percent. The S&P 500’s was just under 15 percent.

2013-05-10 A Tale of Two Markets: Equity Bulls and Bond Bears by Douglas Cote of ING Investment Management

Surging equity markets absent an accompanying rate rally is a red flag, as Treasury yields remain well below “normal”. While investors’ renewed enthusiasm for equities is warranted, they must be careful to avoid the “folly of gaming diversification”. Corporate earnings have impressed, though revenue has struggled due in part to a moribund Europe. Divergent markets mean investors should stay broadly diversified in equities and real bonds not near-cash and ever alert to the fundamentals.

2013-05-10 DICK's Sporting Goods Inc: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of DICK’s Sporting Goods Inc through the lens of FAST Graphs fundamentals analyzer software tool. Therefore, it is offered as the first step before a more comprehensive research effort. Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-05-10 2013 US Financial Markets: Part 2 - The TINA Hypothesis by Clyde Kendzierski of Financial Solutions Group

Contrary to the “Bernanke Illusion” (money market funds are a zero return investment), history indicates that money market funds are likely to provide investors with returns approximating inflation over the next decade. As I pointed out in our last letter, the markets are pricing in inflation levels significantly higher than the prospective total returns of 10 year TBonds. The small additional return achieved by corporate bonds or US stocks (at current prices) is unlikely to compensate a buy and hold investor with sufficient gains to justify the interim risks.

2013-05-10 Recession Watch: ECRI\'s Weekly Leading Indicator Continues to Show Improvement by Doug Short of Advisor Perspectives (dshort.com)

Essentially ECRI is sticking to its call that a recession began in mid-2012, although the company calls it a "mild" recession, which is quite a shift from their original stance 19 months ago: "...if you think this is a bad economy, you haven’t seen anything yet."

2013-05-10 Symptoms Don\'t Lie by Peter Schiff of Euro Pacific Capital

A good doctor will not simply make a diagnosis based on measurements. The symptoms and complaints expressed by the patient are at least as important in making a determination as the data provided by diagnostic tools. When the data says one thing and the symptoms continuously say another, it makes sense to question the reliability of the instruments. This would be particularly true if the instruments are furnished by a party with a stake in a favorable diagnosis, say an insurance company on the hook for treatment costs. The same holds true for the U.S. economy.

2013-05-10 The U.S. Economy Stands to Gain from Actions of Central Banks by Team of Northern Trust

Recent central bank meetings have resulted in a reiteration of accommodative monetary policy from the Federal Reserve and new initiatives from its counterparts overseas.

2013-05-10 Earnings: Why Capex Will Be the New Driver of Business Growth by Ron Sloan of Invesco

This is the second in a three-part series on the economy, earnings and equities. The first post examined the US Federal Reserve’s gross domestic product (GDP) goals. Here, we discuss how those GDP goals set the stage for businesses to increase their capital expenditures.

2013-05-10 Countries Should Be Careful Not to Overstimulate Their Housing Markets by Team of Northern Trust

Countries should be careful not to overstimulate their housing markets. Credit extension is improving, but remains modest.

2013-05-10 3 Reasons to Explore the Frontier by Russ Koesterich of iShares Blog

Though frontier markets have outperformed developed and emerging markets so far this year, it’s not too late to explore the frontier. Russ offers three reasons to consider having a small strategic allocation to “pre-emerging” world equities.

2013-05-09 China's Building, but Will They Come? Ghost Cities by Mark Mobius of Franklin Templeton Investments

Some of you may have heard or read about the current state of the real estate market in China, often covered in a sensationalistic way, with talk of “ghost cities” and “bubbles” ready to burst and so forth. These types of reports can cause quite a jolt in the market, which is what we saw happen, probably not coincidentally, after a popular US television newsmagazine aired a somewhat negative report in March. But as I’ve said many times before, there’s often more to a story; important parts can end up on the cutting room floor.

2013-05-09 Equity Market Distortions Create Big Payback Potential by Joseph Paul, Kevin Simms of AllianceBernstein

Even after this year’s equities rally, market imbalances created by the financial crisis in 2008 have not disappeared. When these distortions unwind, we expect deep value stocks to rapidly recover.

2013-05-09 BlackRock Inc: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of BlackRock Inc through the lens of FAST Graphs fundamentals analyzer software tool. Therefore, it is offered as the first step before a more comprehensive research effort. Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-05-09 Make Way for the MIPS by Scott Minerd of Guggenheim Partners

Emerging markets still provide excellent opportunities for outperformance in equities, with Malaysia, Indonesia, the Philippines and Singapore being among the best positioned for the decade ahead.

2013-05-09 The Effect of Negative Interest Rates in Europe by Zach Pandl of Columbia Management

In his press conference last week, European Central Bank (ECB) President Mario Draghi signaled that policymakers may be more open to a cut in the central bank’s deposit rate. Although Mr. Draghi acknowledged this move could have negative side effects, he added “we will be able to deal with the negative consequences we will look at this with an open mind.” Several major central banks considered negative deposit facility rates during and after the financial crisis, but so far, all have determined that the idea did not pass the cost/benefit test.

2013-05-09 Why Reinhart & Rogoff Still Matter by Russ Koesterich of iShares Blog

Despite Reinhart and Rogoff’s methodology mistakes, their widely cited paper’s basic conclusion still holds. Russ K warns that both policy makers and investors ignore it at their own peril.

2013-05-08 Europe (and Italy's Rivals) Appear on Road to Recovery by Par Rostom of Franklin Templeton Investments

When Europe’s debt disease spread to Cyprus, accompanied by bank runs and public unrest, some doubted the European Central Bank’s (ECB) ability to contain the contagion. And, even more recently, Slovenia turned up sick, warning of escalating debt problems and faltering banks. But with the setbacks have come some surprising steps forward, too, including progress in Italy, which recently formed a new coalition government.

2013-05-08 Germany Under Pressure To Create Money by John Browne of Euro Pacific Capital

Currently, central banks around the world are walking in lock step down a dangerous path of money creation. Led by the Federal Reserve and the Bank of Japan, economic policy is driven by the idea that printed money can be the true basis of growth. The result is an unprecedented global orgy of currency creation. The only holdout to this open ended commitment has been the hard money bias of the German-dominated European Central Bank. However, growing political pressure from around the world, and growing dissatisfaction among domestic voters have shaken, and perhaps cracked, the German resolve.

2013-05-08 Are Recent Market Highs Merely Rhymes, or Something More? by Joe Kringdon of Pioneer Investments

As someone smarter than me once observed, history never repeats itself, but it does rhyme. Oftentimes those rhymes, like my family’s dinner bills, are simply head fakes’ curious coincidences with no residual meaning. Other times, however, they do carry meaningful implications. Consider, for example, what’s going on in the markets right now.

2013-05-08 Deflation Is OverPlease Come Out by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

A blooper reel of 20th century history would likely include a feature on Japanese soldier Hiro Onoda. Posted to a small island in the Philippines during the waning days of World War II, when Onoda’s mission proved unsuccessful he was ultimately forced to flee into the woods, where he survived on a steady diet of coconuts and bananasfor almost 30 years after the end of the war.

2013-05-08 Are Investors Breathing a Sigh of Relief? by Bob Doll of Nuveen Asset Management

Last week U.S. equities delivered another gain as the S&P 500 increased by 2.0%.1 On Friday, the U.S. jobs report offered relief from fears of an accelerating weakness caused by prior softness during this time in each of the last three years. However, the full set of economic data for the week supports our view of a slower second quarter in a post-sequestration environment.

2013-05-08 US Economy Should be \"Good Enough\" for Stocks by Russ Koesterich of BlackRock Investment Management

The April employment report confirms that the US is on a slow-but-positive course of economic growth. This environment should be conducive to further gains in equity prices. Europe, in contrast, continues to struggle and investors should approach that region with caution.

2013-05-08 Monthly Letter to Our Clients and Friends by Kendall Anderson of Anderson Griggs

It has been years since we have seen new highs on the Dow Jones Industrial Average and the S&P 500. Although the wait can be traumatizing, it’s nice to get proof that market prices ultimately recognize growth of business value.

2013-05-08 6.7 Million “Missing Workers” Where Did They Go? by Gary Halbert of Halbert Wealth Management

Today we will touch several bases. We begin with last Friday’s unemployment report which was hailed by the mainstream media, but had a lot of bad news to go with the good. From there we look at the estimated 6.7 million “missing workers” in this economy and ponder if they’re permanently gone from the employment rolls.

2013-05-08 Absolute Return Letter: In the Long Run We Are All in Trouble by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners

In the long run we are all dead, said Keynes. Maybe so, but we could be in trouble long before then. Investors appear preoccupied with central bank policy. We argue that investors are quite right in keeping their eye on the ball but, to us, it looks as if they are focusing on the wrong ball. The real worries for the long term are demographics and negative real interest rates and the effect these factors may have on equity returns.

2013-05-07 Niall Ferguson: Four Reasons Why the U.S. is Failing by Robert Huebscher (Article)

Niall Ferguson is the champion of anti-Keynesian economists. Last week, he explained why America’s pursuit of Keynesian policies is leading to disastrous consequences.

2013-05-07 Breakaway Brokers: What the Data Really Say by Bob Veres (Article)

For the past 15 years, and especially since 2008, few assumptions have been accepted as widely or confidently in the financial services world as the idea that brokers are leaving the wirehouse environment in increasing numbers – and taking their clients with them. Underlying that assumption is another: that the trend is accelerating, and will continue to do so until the brokerage industry’s retail footprint has been severely diminished. The more extreme projections see the entire brokerage asset gatherer/sales model following Lehman, E. F. Hutton and Bear Stearns into extinction.

2013-05-07 How to Construct a Low-Cost Conservative Portfolio by Geoff Considine (Article)

One of the greatest challenges for investors today is constructing low-risk portfolios that provide the best returns using low-cost funds or ETFs. Doing so requires advisors to define risk as the potential for retirees to fail to achieve their financial goals, instead of as volatility, as it is traditionally measured. I will show how to construct a low-cost portfolio that minimizes this definition of risk while generating a reasonable real return.

2013-05-07 Mutual Fund Companies Need to Prepare for a Changing Environment Fund Industry Turbulence Ahead by Paul Franchi (Article)

The mutual fund industry grew explosively from the 1980s on a rare tonic of a low-inflation credit expansion powered indirectly by international trade flows. That run reached a peak in 2008 when the application of quantitative easing (QE) served to prevent industry collapse with a softer form of transition, which continues today but must end when inflation returns.

2013-05-07 On Trees and Forests by Guy Cumbie (Article)

A reader responds to Robert Huebscher’s article, The New Challenges to Reinhart and Rogoff, which appeared last week.

2013-05-07 Meredith Whitney – State-issued GO Muni Bonds are Safe by Ben Huebscher (Article)

Meredith Whitney has softened her tone regarding muni bonds. The analyst who famously predicted disaster for the entire market on national TV now she says that new governors have been elected and states have begun reforming. There will be problems in four key states, but she is not predicting a disaster. In fact, she said investors will be safe in general obligation bonds.

2013-05-07 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

The trend is your friend (and the current trend is a “friend with benefits” for investors). After a record-setting first quarter for stocks, analysts were skeptical that the “party” would continue. And yet, the Dow Jones enjoyed a fifth straight month of gains in April, while the S&P 500 and Nasdaq one-upped the Blue Chips with six month winning streaks.

2013-05-07 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Financial markets got the news they wanted last week as Europe cut interest rates, while here at home the Federal Reserve hinted they might do even more when it comes to money printing. To top it off, Friday’s employment report showed improvement from March although the details caused most to discount the excitement.

2013-05-07 Deere & Co: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of Deere & Co through the lens of FAST Graphs fundamentals analyzer software tool. Therefore, it is offered as the first step before a more comprehensive research effort. Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-05-07 Central Banks Steal the Spotlight Once Again by Chris Maxey, Brian Payne of Fortigent

Central banks around the world continue to provide increased stimulus to their respective economies. Increased conviction over pro-stimulus policies comes in light of recent flaws found in the Reinhart, Rogoff January 2010 paper, which suggested that government debt of more than 90% of GDP is detrimental to economic growth. The latest week brought another round of news in the world of central banking, although it seems the number of options left on the table is running short. What central bankers hope for now is that economies will finally enter recovery mode.

2013-05-07 Why Did Gold Prices Fall So Sharply? by Paresh Upadhyaya of Pioneer Investments

April’s sharp decline in gold got people’s attention. Plunging from $1,561 to $1,347/oz on April 12 and 15, it was a staggering decline of 13.7% the biggest 2-day drop since 1983. Is anything significant going on behind the scenes? We believe this price action is not a new phenomenon for gold, but a continuation of a much bigger trend that has been in place since the third quarter of 2011.

2013-05-07 Attractive Dividends? Earnings Growth? A Way to Get Both by Team of Lord Abbett

International equities provide broader opportunities for combining appealing divided yields and earnings growth.

2013-05-07 Global Bonds: A Flexible Solution for an Uncertain Market by Olivia Albrecht, Michael Story of PIMCO

The recent rallies in both safe-haven and risk assets have left many investors in a quandary. We believe alpha, or above-market return, will have to play a greater role for investors seeking to meet return targets. In our view, the current environment affords many opportunities for generating alpha.

2013-05-07 Investing for Income and Capital Appreciation by Giorgio Caputo, Rob Hordon, Ed Meigs, Sean Slein of First Eagle Investment Management

A Q&A with First Eagle Investment Management’s senior members and their market views and strategic insights.

2013-05-07 Quarterly Letter by Team of Grey Owl Capital Management

In his April 2013 commentary, PIMCO’s Bill Gross wrote, “PIMCO’s epoch1, Berkshire Hathaway’s epoch, Peter Lynch’s epoch, all occurred or have occurred within an epoch of credit expansion What if an epoch changes? What if perpetual credit expansion and its fertilization of asset prices and returns are substantially altered? What if a future epoch favors lower than index carry or continual bouts of 2008 Lehmanesque volatility ?”

2013-05-06 Aligning Market Exposure With the Expected Return/Risk Profile by John Hussman of Hussman Funds

Some risks and market conditions are more rewarding than others. My objectives for this week’s comment are very specific. First, to demonstrate using a very simple model that investment returns do indeed vary systematically with market conditions. Second, to demonstrate that overvalued, overbought, overbullish conditions have historically dominated trend-following measures when they have emerged. Third, to demonstrate the impact of accepting investment exposure in proportion to the return/risk profile that is associated with a given set of market conditions.

2013-05-06 Dispelling Dollar Doubts by Milton Ezrati of Lord Abbett

Will the U.S. dollar, almighty no longer, be supplanted as the world’s reserve currency? Not anytime soon.

2013-05-06 All's Well That Ends Well by Scott Brown of Raymond James

The economic data reports were decidedly mixed last week. However, the April Employment Report exceeded expectations, which provided a good excuse for share prices to move higher. Bonds were whipsawed, encouraged by the view that the Fed was less likely to taper its asset purchases, but then hit hard by the better-than-expected payroll figures.

2013-05-06 That Was the Week That Was by Jeffrey Saut of Raymond James

Informally the TV show, “That Was The Week That Was,” is referred to as TW3and was a satirical comedy program first aired in the early 1960s. The program was considered a lampooning of the establishment. At the time it was considered a radical departure from legitimate television, but it set the stage for many more such radical departures. I revisit TW3 this morning because I have had so many requests for a formal repartee of a number of last week’s Morning Tacks woven into a more formal strategy letter.

2013-05-06 The Narrative Changes Yet Again by Charles Lieberman of Advisors Capital Management

The April employment report suggests that the economy continues to expand at a moderate pace, as had been the common view prior to the March employment report. While sequestration and the hike in the payroll tax at the beginning of the year may have taken a bite out of growth, hindsight indicates the economy entered 2013 with enough momentum to overcome these new forms of fiscal drag. Growth should strengthen over the coming months, as lower oil prices and time overcome the negative influences.

2013-05-06 Beyond the Headlines: Job Growth, Exports and Housing by Gregg Bienstock of Lumesis

Congress has done something for the American public. FAA, sequester, flight delays we can fix that! While I would usually take a cynical swipe at Congress (something like, “did they act because they, too, were impacted by their own stubbornness”), I’ll let well enough alone and simply pass on a heartfelt thanks. Perhaps this is the start of something. I hear they are working closely on immigration reform and an exemption for Congress and their staff from the Affordable Care Act (aka Obamacare). Ok, so two of three initiatives garnering bi-partisan support are purely self-ser

2013-05-06 Sell in May But Stick Around by Christian Thwaites of Sentinel Investments

A bit odd, perhaps, to worry about deflation as the S&P hits all time highs. But the whiff of deflation is in the air. The YOY PCE core (the one the Fed likes) came in at 1.1% which is the lowest it has ever been.

2013-05-06 The Economy: Why Interest Rates Shouldn't Rise Anytime Soon by Ron Sloan of Invesco

Real is irrelevant. The US Federal Reserve (the Fed) is unconcerned about real GDP the inflation-adjusted measurement of US economic growth. Rather, without inflation in our economy, the Fed is focused on raising nominal GDP. And that priority means that interest rates should stay low for the foreseeable future.

2013-05-04 Don't Sell in May: Here are Reasons to Extend Your Stay by Frank Holmes of U.S. Global Investors

During the first week of May every year, the maxim, “Sell in May and Go Away,” gets taken out, dusted off and powered up as a reason to sell stocks. The rhyme is more than just a catchy urban legend: June, July, August and September have historically been the weakest months of the year for the S&P 500 Index.

2013-05-04 The QE Sandpile by John Mauldin of Millennium Wave Advisors

Sell in May and go away? What about "risk off?" And ever more QE? Today’s letter is a quick note and a reprise of a popular letter from yesteryear (with a bit of new slant), as I am at my conference in Carlsbad.

2013-05-03 Oracle Corp: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

A quick glance at the historical earnings and price correlated FAST Graphs on Oracle Corp shows a picture of undervaluation based upon the historical earnings growth rate of 18.5% and a current P/E of 13.7. Analysts are forecasting the earnings growth to continue at about 10%, and when you look at the forecasting graph below, the stock appears undervalued (it’s inside of the value corridor of the five orange lines - based on future growth).

2013-05-03 The Japanese Experiment by Mohamed El-Erian of Project Syndicate

Weeks into Japan’s paradigm shift in economic policy, optimism that the country may end a quarter-century of economic stagnation is balanced by fears that the authorities’ new approach may make things worse. And, while debate naturally focuses on Japan’s internal maneuvers, the tipping point may lie abroad.

2013-05-03 Asia\'s Resource Riches vs. Reform by Sharat Shroff of Matthews Asia

In recent years, the rate of acquisitions of local Asian firms by multinational companies has generally increased, particularly in China. This has happened across many industries such as industrials, medical devices and consumer staples. In many cases, if the multinational firms are not acquiring an entire company outright, they are taking a controlling stake, rather than a minority stake as a passive shareholder.

2013-05-03 Pring Turner Approach to Business Cycle Investing by Team of AdvisorShares

Like the seasons of the year, the environment for bonds, stocks, and commodities progress in a repeatable and sequential fashion. A gardener understands it is difficult to plant in the winter because nothing grows. The same is true for the financial seasons in the business cycle, where investors can use knowledge of the sequence to create a financial market roadmap. This paper from Pring Turner Capital Group, one of our valued sub-advisors, takes you through the six-stages of the business cycle.

2013-05-03 The Big Four Economic Indicators: Nonfarm Employment by Doug Short of Advisor Perspectives (dshort.com)

I’ve now updated this commentary to include April Nonfarm Employment, which included the prior month revision. As the adjacent thumbnail illustrates, this indicator has trended upward in a relatively smooth trajectory over the past 13 months.

2013-05-03 Job Creation May Be More Robust Than Official Statistics Suggest. by Team of Northern Trust

Job creation may be more robust than official statistics suggest; U.S. employment situation; Central bank meetings

2013-05-02 Nu Skin Enterprises: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of Nu Skin Enterprises through the lens of FAST Graphs fundamentals analyzer software tool. Therefore, it is offered as the first step before a more comprehensive research effort. Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-05-02 Europe at a Minimum Speed by Scott Minerd of Guggenheim Partners

Market forces are correcting the growth dichotomy between the European Union’s core and periphery, thus improving the outlook for the region.

2013-05-02 Fed Doesn\'t Budge by Brian Wesbury, Bob Stein of First Trust Advisors

It would be hard to find a policy statement from the Federal Reserve with as few changes as the one issued today. The Fed made no changes to monetary policy and only minor changes to the language of its statement. Even the lone dissent, from Kansas City Fed Bank President Esther George, was a carbon copy from the last statement in March.

2013-05-02 Disconnect: Why Stocks and Economy Often Move in Opposite Directions by Liz Ann Sonders of Charles Schwab

The stock market hit all-time highs during the first quarter, yet the economy again underperformed expectations. Is the disconnect an aberration or the norm?

2013-05-02 A Case for Owning Commodities When No One Else Is by Frank Holmes of U.S. Global Investors

Sometimes following where money is being invested is a solid course of action to gain alpha; other times, a better opportunity lies in going the opposite direction, i.e., thinking contrarian.

2013-05-02 In Treasuries, the Risks Outweigh the Rewards by Russ Koesterich of BlackRock Investment Management

The 1Q GDP report was mixed, but the lack of income growth remains troubling. Oil prices are likely to remain range-bound, but that should be good enough to help energy stocks. While yields could decline further in the near-term, Treasuries look quite unappealing.

2013-05-01 While the Bears Fight... by Blaine Rollins of 361 Capital

While corporate earnings outlooks and released economic data remained soft, the world moved to declare Austerity a failure and quickly assumed that the ECB could ease further at this week’s meetings. The recent collapse in commodity prices and slowdown in China does put a high card in their hand. With these new thoughts, European equities and bonds both surged on the week...

2013-05-01 Emerging Asia Pacific: Regional Economic Review by Team of Thomas White International

Major emerging Asia Pacific economies, which picked up growth momentum during the latter half of 2012, struggled to carry forward the economic pace during the initial months of 2013. China, India, and Indonesia, some of the most populous countries in the region and in the world, faced significant headwinds to growth as key engines of the economy investment, consumption, and exports came under strain.

2013-05-01 May 2013 Commentary by Team of Sadoff Investment Management

The slow growing economy will cause the Federal Reserve to stay the course with continued stimulus via low interest rates and Quantitative Easing (QE) for some time. This environment continues to be bullish for stocks.

2013-05-01 US Economy to Get a Hollywood Makeover by Gary Halbert of Halbert Wealth Management

You may have heard that the government is going to make some major changes in how our Gross Domestic Product is calculated later this year. Your first thought might be that this is no big deal. However, I will argue today that it is a very big deal, the biggest in a decade, and you need to know why. So I hope you read what follows with more than a passing interest.

2013-05-01 There Will Be Haircuts by Bill Gross of PIMCO

It has been the objective of the Fed over the past few years to make even more innovative forms of money by supporting stock and bond prices at cost on an ever ascending scale, thereby assuring holders via a “Bernanke put” that they might just as well own stocks as the cash in their purses. Gosh, a decade or so ago a house almost became a money substitute. MEW or mortgage equity withdrawal could be liquefied instantaneously based on a “never go down” housing market. You could equitize your home and go sailing off into the sunset on a new 28-foot skiff on any day but S

2013-04-30 The Most Underappreciated Threat to the Advisory Business by Bob Veres (Article)

Financial advisors have often heard the warning that their investment management services are going to become commoditized – so often, in fact, that you can forgive them for ceasing to pay attention. But if you don’t believe that an online algorithm can replace the sophisticated advice offered by a flesh-and-blood advisor, then check out the Wealthfront USA website.

2013-04-30 Electric Vehicles: The Devil is in the Battery by Michael Edesess (Article)

Electric cars are part of the vision of a clean energy society, in which Americans would use few fossil fuels, emit limited greenhouse gases and depend less on foreign sources of energy. Will that vision be realized – and are electric cars even necessarily part of that vision? Are electric cars environmentally friendly? Are they an economical means of transportation now? How likely are they to capture the market in the coming years?

2013-04-30 Implementing Behavioral Portfolio Management by C. Thomas Howard, PhD (Article)

Behavioral portfolio management is based on the notion that if the advisor can redirect his or her emotions and mitigate the impact of client emotions, it is possible to build superior portfolios by harnessing market emotions. This article describes how this can be done and presents evidence of the superiority of focusing on investor behavior when constructing and managing portfolios.

2013-04-30 Is the U.S. Housing Recovery Built to Last? by Milton Ezrati of Lord Abbett

The sector’s comeback will continue, but the pace will likely moderate. Here’s why.

2013-04-30 The U.S. Economy A Gain in GDP? by Marie Schofield of Columbia Management

The advance estimate of gross domestic product (GDP) released by the Bureau of Economic Analysis last Friday showed that the U.S. economy grew at an annualized rate of 2.5% in the first quarter, below expectations of an increase of 3.0%. Despite the decent first quarter advance, year-over-year gains in nominal and real GDP are largely unchanged from the prior quarter at 3.4% and 1.8%, respectively. While growth rates at this slow pace in these measures have typically heralded recessions, they appear stable but also underscore a critical problemthe failure to generate escape velocity.

2013-04-30 Letters to the Editor by Various (Article)

A number of readers responded to Robert Huebscher’s article, The New Challenges to Reinhart and Rogoff, which appeared last week.

2013-04-30 Stockman to America: Sinners, Repent! by Laurence B. Siegel (Article)

In a massive volume that melds economic history and social criticism, the former Reagan administration budget director David Stockman has documented countless ways in which America went astray over the last century. Most notably, he decried the corruption of free-market capitalism by those seeking effortless profits at the public’s expense. This is the source of his book’s title, The Great Deformation.

2013-04-30 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks rebounded from the previous week. Earnings were not bad, and investors now appear to be focusing on this week’s Federal Reserve and European Central Bank meetings.

2013-04-30 Is May Really the Time to Go Away? by Chris Maxey, Ryan Davis of Fortigent

As investors near the witching hour of May, the oft-asked question once again comes to the foreground is it best to sell in May and walk away? This year could prove the exception to recent history, but a number of trends are beginning to take shape inside the market’s inner workings.

2013-04-30 ProVise Bullets by Ray Ferrara of ProVise Management Group

With the passage of the American Taxpayer Relief Act of 2012, a lot of people felt that things were set as it related to estate taxes. Apparently everyone believed that except the President, who has proposed several changes to estate tax law in his fiscal 2014 budget.

2013-04-30 Beyond Gold: 4 Reasons to Think Energy by Russ Koesterich of iShares Blog

While the sell-off in gold has dominated headlines lately, another commodity oil has also experienced price declines in recent months. But despite crude’s drop, Russ is still a fan of energy stocks for four reasons.

2013-04-30 Zebras?! by Jeffrey Saut of Raymond James

We saw many “outside zebras” gorging themselves on stocks in late 2007 as the D-J Industrial Average (DJIA) made a new all-time high and then registered a Dow Theory “sell signal” in November 2007. Subsequently, those outside zebras ended up as “lion lunch” when the senior index shed an eye-popping 53% over the ensuing 17 months.

2013-04-30 1Q13 GDP Growth and Beyond by Scott Brown of Raymond James

The initial estimate of real GDP growth for the first quarter was lower than expected. Details were mixed, and surprising relative to what was anticipated at the start of the quarter. Government remained a drag on overall GDP growth, which is a major difference between the current recovery and rebounds from previous recessions. The first quarter figures don’t tell us much about the pace of growth in the current quarter and beyond, but most economist have lowered their GDP forecasts for 2Q13.

2013-04-29 Long Live China's Slowdown by Stephen Roach of Project Syndicate

China doubters around the world have been quick to pounce on slower-than-expected GDP growth in the first quarter of this year. But slower growth is actually good for China provided that it reflects the long-awaited shift to an economic structure that draws greater support from domestic private consumption.

2013-04-29 The Trapdoors at the Fed's Exit by Nouriel Roubini of Project Syndicate

It may be too soon to say that many risky assets have reached bubble levels, and that leverage and risk-taking in financial markets is becoming excessive. But the reality is that credit and asset/equity bubbles are likely to form in the next two years, owing to loose US monetary policy.

2013-04-29 Employment Trending the Right Way and the DC Two-Step by Gregg Bienstock of Lumesis

Spring is in the air and it has nothing to do with the lovely weather we are experiencing here on the east coast. Congress both houses have done something for the American public. FAA, sequester, flight delays we can fix that! While I would usually take a cynical swipe at Congress (something like, “did they act because they, too, were impacted by their own stubbornness”), I’ll let well enough alone and simply pass on a heartfelt thanks. Perhaps this is the start of something.

2013-04-29 Developed Asia Pacific: Regional Economic Review by Team of Thomas White International

After facing subdued economic conditions for the most part of 2012, developed Asia Pacific economies started 2013 on a cautious note. While most countries opined that downside risk to GDP growth declined substantially, challenges to growth arose from a recessionary scenario in key developed economies, especially from the European Union.

2013-04-29 Did You Blink and Miss the Correction? by Charles Lieberman of Advisors Capital Management

A stock market correction has been widely talked about for more than a month and the 2% decline in stock prices during the week of April 15 may have been it. Why so short and shallow? Many investors have not participated in the equity rally since it started in March 2009. They were too fearful of stocks because of the 2008 meltdown and they sought refuge in bonds. Despite the four year long rally, stocks remain cheap and many investors wish for a decline so they have a chance to get back in.

2013-04-29 Economic Slowdown Has Not Weakened Share Prices by Bob Doll of Nuveen Asset Management

U.S. equities rebounded last week as the S&P 500 increased by nearly 1.8%,1 despite continued weak economic data. We believe recent data is not yet weak enough to change forecasts. The relative stability of data and forecasts - supported by stimulative monetary policies, an improving U.S. housing market and fading political polarization in the U.S. and Europe - sends a message of reasonably low volatility and manageable downside risks.

2013-04-29 Cruel Top Line Growth by Christian Thwaites of Sentinel Investments

The current earnings season is a very mixed bag. Start with the economic background where nominal growth decelerated in 2012 from around 4.4% to 3.6%. The first quarter may be marginally higher but some of that is from a low base effect. It’s very difficult for companies to raise prices, increase share or volumes when demand is simply deficient. Sure, balance sheets are in much better shape, as evidenced by robust bond issuance, but many companies are in excess savings mode. Here are undistributed corporate profits as a percent of GDP.

2013-04-29 When Rich Valuations Meet Poor Economic Data by John Hussman of Hussman Funds

Given the full set of market conditions that we observe, including the persistent overvalued, overbought, overbullish syndrome that has developed in recent months, our concerns about stocks are not dependent on the direction of the economy over the coming quarters. An economic downturn would simply add immediacy to those concerns.

2013-04-27 The Cashless Society by John Mauldin of Millennium Wave Advisors

A cashless future might be farther off than we either fear or hope. Not only is it farther away than some think, we are actually seeing an increase in the use of cash all over the world (and this is not just a US phenomenon). We will look at some interesting factoids that make for thought-provoking discussions, but when we couple them with research on the rise of the unreported economy (aka the underground economy) and the number of people who get some form of government assistance, we may find problematic consequences resulting from hidden incentives that work in unintended ways.

2013-04-26 Coach Inc: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

A quick glance at the historical earnings and price correlated FAST Graphs on Coach Inc shows a picture of undervaluation based upon the historical earnings growth rate of 27.3% and a current P/E of 13.7.Analysts are forecasting the earnings growth to continue at about 13.5%, and when you look at the forecasting graph below, the stock appearsundervalued (it’s inside of the value corridor of the five orange lines - based on future growth).

2013-04-26 The Return of the Asian Tigers: Guinness Atkinson Asset Management Asia Brief by Edmund Harriss, James Weir of Guinness Atkinson Asset Management

Often overlooked by international investors, South East Asia encompasses some of the world’s best performing equity markets in recent years, putting the more established emerging markets in the shade. This performance is backed by good economic results and the favourable demographics of some of these countries, with youthful populations ready to improve productivity and increase consumption. One catalyst for future growth is the Association of Southeast Asian Nations (ASEAN) free trade area, which will bring down trade barriers between the South East Asian nations.

2013-04-26 An Update on the Global Business Cycle by Investment Strategy Group of Neuberger Berman

Understanding where we are in the an important aspect of investing, as the behavior of asset classes may vary throughout that cycle. Recent data indicate that the U.S. remains in its fourth year of expansion, but payroll and retail numbers have disappointed. Outside the U.S., Europe continues to be mired in recession while China’s growth rebound recently has appeared to sputter. In this edition of Strategic Spotlight, we review what these developments mean for the global business cycle and how to position portfolios accordingly.

2013-04-26 The Sustainability of U.S. Interest Rates Rising by Paresh Upadhyaya of Pioneer Investments

Investors are growing concerned, with good reason, we think, that yields have bottomed for the 10-year Treasury and will surge as the economy gains strength. Prices, which move inversely to yields, would fall, and the question is whether rising rates in 2013 could trigger a bond bear market along the lines of the Great Bond Bear Market of 1994. We don’t think so.

2013-04-26 Recession Watch: ECRI\'s Weekly Leading Indicator Rises Again by Doug Short of Advisor Perspectives (dshort.com)

Essentially ECRI is sticking to its call that a recession began in mid-2012, although the company now calls it a "mild" recession, which is quite a shift from their original stance 18 months ago: "...if you think this is a bad economy, you haven’t seen anything yet."

2013-04-26 The Race of Our Lives by Jeremy Grantham of GMO

Our global economy, reckless in its use of all resources and natural systems, shows many of the indicators of potential failure that brought down so many civilizations before ours. By sheer luck, though, ours has two features that might just save our bacon: declining fertility rates and progress in alternative energy. Our survival might well depend on doing everything we can to encourage their progress. Vested interests, though, defend the status quo effectively and the majority much prefers optimistic propaganda to uncomfortable truth and wishful thinking rather than tough action.

2013-04-26 Many Of My Dividend Growth Stocks Have Become Overvalued, What Do I Do Now? by Chuck Carnevale of F.A.S.T. Graphs

To me, there’s almost nothing better than finding a great company that I truly want to own at a fair valuation, or better yet, undervalued. In the long run, it has been my experience that this usually leads to outsized future returns, especially if you buy stocks when they are undervalued at the time. But there is quite often a side effect that can prove very disconcerting. Once an undervalued stock starts moving to the upside, momentum will often carry it above what prudent fair valuation would dictate.

2013-04-26 The Yin and the Yang of Commodity Price Trends by Team of Northern Trust

In recent weeks, financial press headlines have centered on the sharp drop in the price of gold. Of greater importance, however, are the significant price declines of oil, wheat, corn and copper. The S&P Goldman Sachs Commodity Index is down 6.1% year-to-date after a nearly steady reading in 2012 and gains exceeding 20% in both 2010 and 2011. It is essential to recognize the different nuances buried in these commodities’ price trends. First we will focus on the implications of declining commodity price trends and then discuss gold specifically in more depth.

2013-04-26 No Escape by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Global economic growth has weakened, while the US economy hasn’t reached "escape velocity." US stocks have held up relatively well. With few other attractive alternatives, domestic equities appear to be the best house in a rough neighborhood. With the Fed committed to easing, housing improving, and valuations reasonable, the trend should continue. Risks remain and diversification and some hedging strategies are recommended.

2013-04-26 Why The Fed's Balance Sheet Matters Neosho Capital Takes On Alan Blinder by Chris Richey of Neosho Capital

We anticipate the Fed will begin slowing, but not eliminating, its QE purchases later this year, barring another severe downturn in the intervening period. As such, we expect macro-economic factors such as currency, interest rates, growth, and inflation to continue to be a significant influence on stock market returns and that the long-term benefits of active portfolio management and individual company performance will continue to be masked by these macro influences.

2013-04-26 Why Demographics Will Keep the U.S. Ahead by Randall McLaughlin of Baird Investment Management

The aging of the developed world does give us some powerful information about which industries might do well in the future. The increased use of healthcare services as a population ages is well-documented. In addition, as people age, they transition from accumulating possessions to using their wealth to buy experiences. Travel companies are examples of companies that could benefit. The favorable demographic profile of the United States supports our manufacturing renaissance thesis as companies tend to want to locate manufacturing close to the end client.

2013-04-26 Financial Repression: Why It Matters by Shane Sheperd of Research Affiliates

Financial repression refers to a set of governmental policies that keep real interest rates low or negative, with the unstated intention of generating cheap funding for government spending. The ramifications of these policies will be measured in decades, not years.

2013-04-26 Like Baseball in the Snow by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

As has occurred in each of the last three years, the economy should continue to plug along, not as we might like it to be, but as we can reasonably expect. Growth scare or not, we suspect that the end of 2013 will show that continued progress lies ahead, but perhaps not exactly in the same pattern as it has thus far.

2013-04-26 Changing the Conversation by Peter Schiff of Euro Pacific Capital

It has been estimated that if the government used the same methodology to measure inflation that it used during the 1980’s, we would be currently dealing with official inflation that would be many times higher than today’s official 1.5% rate. But now the government appears ready to distort the figures even further.

2013-04-25 CASSHing-Out by Russ Koesterich of iShares Blog

Russ explains why he’s no longer advocating the concept of investing in certain smaller developed countries known as the CASSH countries.

2013-04-25 The End of “Expansionary Austerity?” by Scott Brown of Raymond James

A few years ago, an economic paper by Harvard professors Carmen Reinhart and Kenneth Rogoff helped fuel the push for austerity. It was met with some criticism from economists, but was widely embraced by the press and by politicians on both sides of the Atlantic. The study has now been demonstrated to have had serious flaws, but will those in power fold? Or will they double down on bad economic policy?

2013-04-25 Surf's Up! by Jeffrey Saut of Raymond James

Last month I was reminded of “Surf’s Up!” while rereading said report from my departed friend Stan Salvigsen of Comstock Partners fame. While that is the organization Stan, Michael Aronstein, and Charles Minter formed in the late 1980s, Stan’s investment career actually began in 1964 as an analyst with the Value Line Investment Survey. Subsequently, he was an equity strategist at a succession of firms, including Dreyfus, Oppenheimer, C. J. Lawrence, and Merrill Lynch.

2013-04-25 Closed-End Fund Review by Jeff Margolin of First Trust Advisors

The first quarter of 2013 was a solid quarter for many closed-end funds, with the average fund up 4.31% on a share price total return basis, according to Morningstar. As you would expect, with the Dow Jones Industrial Average rocketing 11.25% in the quarter, which represented the best first quarter for the index since 1998, and with the Standard and Poor’s 500 up 10.03%, domestic equity funds were up on average 11.80% during the quarter on a share price total return basis.

2013-04-25 Q1 2013 Market Commentary by John Prichard of Knightsbridge Asset Management

The country now in the news is tiny Cyprus, which received a bailout for its banks from the European Union (EU), but only after agreeing to steep losses for those banks’ large depositors. Hitting up bank deposits represents a new dimension to the European debt crisis and illustrates how in a crisis, leaders can and often will resort to whatever means are necessary. When the Cypriots first requested a bailout from the EU and were told their depositors had to suffer, they balked and said that was unacceptable...

2013-04-24 The 5% Problem: Double Jeopardy for Traditional Bond Investors by Nathan Rowader of Forward Management

Investors have suffered with low yields, but profited from rising bond values during the 30-year bull market for bonds. We believe the bond market is moving into a bearish phase, putting the value of existing bond holdings at risk. A variety of income-producing options are available for those who want to diversify bond portfolios and seek better yields. Historical analysis shows that a diversified portfolio would have outperformed traditional bonds during the last bear bond market and in periods of rising interest rates.

2013-04-24 The 2030 Non-state World by Bill O'Grady of Confluence Investment Management

Several weeks ago we started looking at the alternative world scenarios as projected by the National Intelligence Council (NIC). The NIC issues a long-term strategic outlook every five years and projects a forecast from this analysis for the following 15-20 years. In the most recent report, Global Trends 2030, the NIC proposes four alternative world scenarios. We are now turning to the last projected outlook, the Non-state World. Under this scenario non-state actors aided by emerging technologies will have increasing influence, as the importance of traditional nation-states decays.

2013-04-24 Will Abenomics' Ensure Japan's Revival? by Team of Thomas White International

According to a World Bank (WB) report, global growth in 2013 will remain sluggish as economic recovery in the developed nations is likely to be slow. Lower business and consumer confidence, government spending cuts, as well as high rates of unemployment may delay the recovery, the report says. The report has also noted that developing nations may experience slower growth due to structural and monetary policy challenges.

2013-04-24 The Road To Omaha by Bill Smead of Smead Capital Management

We have been discussing keys to the investment success of Warren Buffett and Berkshire Hathaway as we approach the 2013 annual meeting. In this week’s edition, we are considering a company which might make a good “elephant” for Berkshire to buy.

2013-04-24 Europe's Sovereign Debt Problem: A Call for a Clear Destination by Andrew Bosomworth, John Henning Fock of PIMCO

Without political commitment to a common fiscal destination, the long-term instability and market distortions within Europe’s capital markets are likely to intensify. To preserve the euro, the eurozone must develop federal fiscal policies that tackle significant economic, cultural and societal differences and define a credible roadmap to achieving structural reforms, a banking union, political union and fiscal union. Historical precedents in Europe may help guide the way.

2013-04-24 What's Behind China's Economic Slowdown? by Weili Huang of Columbia Management

China’s economy grew by 7.7% year over year (yoy) in the first quarter of 2013, against the market expectation of 8.0% yoy and a prior quarter’s 7.9% yoy. Gross domestic product (GDP) expanded 1.6% quarter on quarter (qoq), with an annualized growth rate of 6.6%, a step down from the 2.0% qoq and 8.2% annualized growth seen in 4Q 2012.

2013-04-24 Growth From the Ground up in Iskandar by Mark Mobius of Franklin Templeton Investments

Our emerging markets team isn’t too keen on following crowds. Part and parcel of Templeton’s contrarian approach is traveling to places others aren’t, and thinking about the long-term potential in specific industries and companies that may not be on others’ radar screens. One place we’ve had our eye on for several years now is Iskandar, Malaysia, which has recently been attracting more investor attention. I think it could be viewed as an example of the potential we see in Southeast Asia.

2013-04-24 Indian Milk Helps Quench Thirst for Emerging-Market Growth by Tassos Stassopoulos of AllianceBernstein

Evolving trends in emerging markets are not always driven by macro-economic policies or demographics. Sometimes, something as simple as a fridge can change millions of people’s lives and re-define an entire industry.

2013-04-23 The New Challenges to Reinhart and Rogoff by Robert Huebscher (Article)

Advocates for debt reduction and austerity have had no more authoritative sources than Carmen Reinhart and Ken Rogoff. But last week, these two professors had to defend claims that errors in their research – ranging from a typo in a spreadsheet to the failure to include data from New Zealand – invalidated their much-acclaimed findings.

2013-04-23 Looking Back at Peak Oil: The Coming Crisis in Energy Supplies by Richard E Vodra, JD, CFP® (Article)

Peak Oil – the maximum sustainable rate of global oil production – happened in 2012. That’s one of the main conclusions of a new report, Fossil and Nuclear Fuels – The Supply Outlook, released in March 2013 by the Energy Watch Group. This event will have profound long-term implications for how advisors should manage clients’ portfolios, and how clients should plan their future expenses.

2013-04-23 Venerated Voices™ Q1 2013 by Advisor Perspectives (Article)

Advisor Perspectives, a leading publisher serving financial advisors and the financial advisory community, has published its Venerated Voices awards for articles published in Q1 2013.

2013-04-23 Middle East/Africa: Regional Economic Review by Team of Thomas White International

According to a World Bank (WB) report, global growth in 2013 will remain sluggish as economic recovery in the developed nations is likely to be slow. Lower business and consumer confidence, government spending cuts, as well as high rates of unemployment may delay the recovery, the report says. The report has also noted that developing nations may experience slower growth due to structural and monetary policy challenges.

2013-04-23 Ugly Week All Around Bombings, Explosions and Selloffs by John Buckingham of AFAM

It was a miserable week, what with the Boston bombings, lockdown and shootout, the horrific fertilizer plant explosion in Texas and the ricin-laden letters sent to elected officials providing vivid reminders that we still live in a dangerous world. True, the week ended about as well as it could as Friday night’s incredible drama in Watertown brought some closure in Boston and the come-from-behind victory for the Red Sox on Saturday was right out of Hollywooda three-run go-ahead home run after Neil Diamond leads Fenway Park in a rendition of Sweet Caroline!

2013-04-23 Q1 Earnings Leave Much To Be Desired by Chris Maxey, Ryan Davis of Fortigent

Following the strongest first quarter in 15 years, it is not surprising to see equity markets faltering in April. Last week’s decline of 2.1%, however, may reflect deeper concerns about corporate fundamentals amid a mixed earnings season.

2013-04-23 Dividend Growth and Stock Returns by Peter Nielsen of Saturna Capital

The compounding impacts of dividends have historically been significant in terms of market returns for long-term investors. The importance of these cash flows to investor returns can be seen across countries and industries.

2013-04-23 The Next Steps For the Euro: What Is Needed to Ensure Its Survival? by Keith Wade of Schroders Investment Management

The near term outlook for the Eurozone remains bleak, with the latest International Monetary Fund (IMF) forecasts showing 2013 as another year of falling output for the region. Better growth is desperately needed and there is a case for more cyclical support through easier monetary policy, but there are also structural obstacles to stronger growth. Unless these are addressed, any pick-up in growth will ultimately flounder. In this Talking Point I look beyond the near term cyclical challenges and consider what the Eurozone needs to do to ensure its long term viability.

2013-04-22 Strategy for a Second Gear Economy by David Kelly of J.P. Morgan Funds

American investors could be forgiven for feeling just a little confused. One week after the stock market posted its strongest first-quarter gains since 1998, the Bureau of Labor Statistics announced the weakest monthly job growth in nine months. Real GDP growth was just 0.4% in the fourth quarter but appears to have been much stronger in the first. So is the economy getting stronger or weaker, how is the Federal Reserve likely to react to it and what, if anything, should investors do about it?

2013-04-22 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

The end to another tax season; a hectic week on the earnings calendar; a number of key domestic economic releases; and ongoing developments on the global economic frontand yet, much of the country (and world for that matter) was focused on the events in Boston and the aftermath of the bombing that led to a massive manhunt and a shootout with police. Early in the week, the celebrated Boston Marathon came to an abrupt halt as terror again reigned throughout the country and nearby residents were sent into lockdown mode.

2013-04-22 Emerging Europe: Regional Economic Review by Team of Thomas White International

The European Bank for Reconstruction and Development (EBRD) was established in 1992 to help Russia and former communist states such as Poland, Hungary, and Czech Republic among others in their transition to market-based economies. In its January forecast, the London-headquartered bank sounded optimistic over the economic prospects of most of the countries covered in this review, which also include Turkey.

2013-04-22 Will Emerging-Market Stocks Close Gap with Global Equities? by Morgan Harting of AllianceBernstein

Companies in emerging markets are more profitable and less debt burdened than their developed-market peers, and their shares trade at a deep discount. So when will emerging-market stocks close the gap with global equity markets?

2013-04-22 The Endgame is Forced Liquidation by John Hussman of Hussman Funds

Rule o’ Thumb: When the cover of a major financial magazine features a cartoon of a bull leaping through the air on a pogo stick, it’s probably about time to cash in the chips.

2013-04-22 Gold Strategy Update by John Hathaway of Tocqueville Asset Management

Gold bullion prices have been subjected to a cleverly orchestrated bear raid in our opinion. Selling of paper Comex contracts on Friday, April 12th , and Monday, April 15th, totaled 1 million contracts, exceeding global annual gold production by 12%. The attack succeeded when the technical support in the low $1500’s/oz. easily gave way and led to waves of forced selling. The volume is without precedent and has all the characteristics of a panic liquidation driven by naked short selling.

2013-04-22 Guess What? Growth is Back! by Brian Wesbury, Bob Stein of First Trust Advisors

The first quarter has come and gone and lots of data have been released. Still, there are pieces of data missing and these missing data points make forecasting GDP treacherous.

2013-04-22 Commodity Declines and Weak Data Startle Investors by Bob Doll of Nuveen Asset Management

U.S. equities declined last week as the S&P 500 fell by more than 2.0%, which came on the heels of a new all-time high the prior week. Led by gold, commodities experienced volatility and declined over the past two weeks. Other detractors included disappointing first quarter Chinese economic numbers and somewhat softer U.S. releases.

2013-04-20 Austerity is a Consequence, not a Punishment by John Mauldin of Millennium Wave Advisors

Austerity is a consequence, not a punishment. A country loses access to cheap borrowed money as a consequence of running up too much debt and losing the confidence of lenders that the debt can be repaid. Lenders don’t sit around in clubs and discuss how to “punish” a country by requiring austerity; they simply decide not to lend. Austerity is a result of a country’s trying to entice lenders into believing that the country will change and make an effort to restore confidence.

2013-04-19 Fast Emerging Asia by Taizo Ishida of Matthews Asia

Over the past 20 years, Asia has come a long way to evolve into an asset class in itself. China and India have famously led the way as symbols of emerging nations. But when I think about seeking growth in Asia, I am particularly drawn to the region’s smaller equity markets as attractive hunting grounds for investment opportunities. Asia continues to change at a rapid pace, and this change is not restricted to China’s ever-changing landscape, but to many other areas that may see fewer media headlines.

2013-04-19 Equity Investment Outlook by Team of Osterweis Capital Management

Every so often we write an Investment Outlook with conclusions that prove to be both accurate and worth repeating. Such is the case with our prior outlook issued in January 2013. In it we stated that “At the risk of sounding complacent, we believe that the fundamental trends that produced such favorable results in 2012 are still in place and should support another good year in 2013. We are not blind to the challenges and uncertainties that still face us, nor do we believe that the year ahead will be devoid of volatility.

2013-04-19 Archer Daniels Midland Co: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

For more than a century, the people of Archer Daniels Midland Company (ADM) have transformed crops into products that serve vital needs. Today, 30,000 ADM employees around the globe convert oilseeds, corn, wheat and cocoa into products for food, animal feed, industrial and energy uses. This article will reveal the business prospects of Archer Daniels Midland Co through the lens of F.A.S.T. Graphs fundamentals analyzer software tool.

2013-04-19 Quarterly Review and Outlook by Van Hoisington, Lacy Hunt of Hoisington Investment Management

“The Federal Reserve is printing money”. No statement could be less truthful. The Federal Reserve is not, and has not been, “printing money” as defined as an acceleration in M2 or money supply. A review of post-war economic history would lead to a logical assumption that the money supply would respond upward to this massive infusion of reserves into the banking system. The reality is just the opposite. Printing money? No.

2013-04-19 Global Economic Overview - March 2013 by Team of Thomas White International

Global economic trends turned softer during the month of March as indicators from Europe showed further declines and U.S. consumer sentiment moderated on labor market uncertainties, government spending cuts, and tax increases. Continuing weakness in European demand has somewhat dulled the export outlook for emerging economies, while government policies to prevent excessive asset price inflation have led to concerns about domestic consumption growth in these countries.

2013-04-19 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks moved up nicely last week despite poor economic data and a huge decline in precious metals and other commodities.

2013-04-19 The Pharaoh's Dream by Andrew Bosomworth of PIMCO

As yields on assets decline, central banks’ ultra-loose monetary policies are effectively forcing investors further out the concentric circles into lower quality, more illiquid sectors in search of positive yielding assets after deducting inflation. In order to achieve 6%-7% returns in the future, investors may be required to take on more risk. Allocating part of a portfolio away from “middle circle” asset classes into assets with higher return potential as well as assets offering liquidity is the right strategy in our opinion.

2013-04-19 Fed to End QE, Obama's Tax & Spend Budget by Gary Halbert of Halbert Wealth Management

Today I tackle several topics, each of which could take up an entire E-Letter. But these topics are very important, and I want to address them today. The first is the minutes from the March 19-20 Fed Open Market Committee meeting that were released last Wednesday. Those minutes definitively confirm that the Fed is ready to chart an end to quantitative easing.

2013-04-19 India\'s Gas Sector Dilemma by Siddharth Bhargava of Matthews Asia

In India, the fertilizer sector has long depended on gas as a key input. Over the last decade, several power plants that run on gas have been set up as well. Demand has grown 10% each year since 2002 while supplies, largely managed by state-owned enterprises (SOEs), have failed to keep pace. Inefficient capital allocation, lack of incentives and populist policies aimed at maintaining low prices have led the country to import 25% of its gas needs. This has further exacerbated India’s current account deficit, which now stands at 6.7% of GDP.

2013-04-19 \"America Has Faced the Unknown Since 1776,\" So Says Warren Buffett by Paul Kasriel of Econtrarian, LLC

So wrote Warren Buffett in his March 1, 2013 letter to Berkshire Hathaway Inc. stockholders. In the phrase before this quote, Mr. Buffett wrote: “Of course, the immediate future is uncertain ” And after this quote, he wrote: “It’s just that sometimes people focus on the myriad of uncertainties that always exist while at other times they ignore them (usually because the recent past has been uneventful).”

2013-04-19 CSX Corp Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

A quick glance at the historical earnings and price correlated FAST Graphs on CSX Corp shows a picture of undervaluation based upon the historical earnings growth rate of 21.2% and a current P/E of 13.5. Analysts are forecasting the earnings growth to continue at about 12.5%, and when you look at the forecasting graph below, the stock appears undervalued (it’s inside of the value corridor of the five orange lines - based on future growth).

2013-04-19 Recession Watch: ECRI\'s Weekly Leading Indicator Rises by Doug Short of Advisor Perspectives (dshort.com)

Essentially ECRI is sticking to its call that a recession began in mid-2012, although the company now calls it a "mild" recession, which is quite a shift from their original stance 18 months ago: "...if you think this is a bad economy, you haven’t seen anything yet."

2013-04-19 Japan Steps into the Void by Peter Schiff of Euro Pacific Capital

In the years following the global financial crisis, economists and investors have gotten very comfortable with very high, and seemingly persistent, government debt. The nonchalance may be underpinned by the assumption that globally significant countries that can print their own currencies can’t get trapped in a sovereign debt crisis. However, it now appears that Japan is preparing to put this confidence to the ultimate stress test.

2013-04-19 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The world’s public debt is much larger than it may appear. The lines have been drawn in the U.S. budget debate. Rates of disability are affecting labor force participation.

2013-04-19 Are Gold Stocks Oversold? by Steve Land of Franklin Templeton

Gold bugs have been bugging out over a sharp decline in the price of gold, which hit a two-year low in April. Many gold-related stocks felt the sting. We think gold-related stocks could be oversold, and that there are still compelling reasons to own them.

2013-04-19 Gold Buyers Get Physical As Coin and Jewelry Sales Surge by Frank Holmes of U.S. Global Investors

Even with the gold price dropping, why are gold coins selling at a premium? It’s Economics 101: The coin supply is limited and the demand is high. This buying trend isn’t only occurring in the U.S. In Bangkok, Thailand, for example, crowds of buyers were filling stores, eagerly waiting in multiple lines to purchase gold jewelry and coins.

2013-04-18 The Lure of Hedge Funds by John West of Research Affiliates

Investors often buy what they think is exciting, sophisticated, and complex with the embedded assumption that all of these attributes will lead to greater returns. We see this today where we witness the continued explosive growth of hedge funds. But, a careful examination of the data reveals that these fancy lures fail to hook as much in excess, after-fee returns as more time tested strategies.

2013-04-18 Emerging Markets Investment Bulletin by Team of Bedlam Asset Management

The benefits of focusing on attractively priced, well managed and growing businesses, irrespective of their inclusion in an index, continued to aid fund performance. Thus it was virtually flat in March, capping a strong quarter in absolute and relative terms with a gain of over 10%, again beating the 5% gain by the index. These - achieved through a combination of a valuation discipline that sets the entry and exit prices and the focus on quality businesses. Not surprisingly, stock selection has been a consistent factor behind the outperformance, both this year and previously.

2013-04-18 Reversing Quantitative Easing by Richard Bernstein of Richard Bernstein Advisors

The Fed is likely to lag the markets, as they do in most cycles. The markets will probably anticipate the Fed reversing QE. The Fed will surprise few investors. The Fed should reverse QE in a yield curve-neutral way, in our view. Steepening the curve risks perversely stimulating the economy by making carry trades and loan spreads more profitable. This cycle will probably end as do most cycles. The Fed will be behind the curve, play catch-up, tighten too much, invert the curve, and cause a recession. That end result, however, is probably quite far in the future.

2013-04-18 The Road to Omaha: Own High Quality Businesses by Bill Smead of Smead Capital Management

We are spending the five weeks leading up to the Berkshire Hathaway Annual Meeting focusing on investment keys which are important to both Warren Buffett and Smead Capital Management. This week our focus is on owning “high quality” businesses.

2013-04-18 After Boston: Why the US Market is Vulnerable by Russ Koesterich of iShares Blog

The events in Boston were a tragic reminder that markets still face risks from terrorism and geopolitics. In fact, the US market is especially vulnerable to such exogenous shocks right now given that there isn’t much bad news discounted into prices.

2013-04-18 Fortune's Formula by Jeffrey Saut of Raymond James

I reflected on mathematics, probabilities, and odds over the weekend after again reading the book “Fortune’s Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street,” by William Poundstone. The book centers on Claude Shannon, who in the late 1940s had the idea computers should compute using the now familiar binary digits 0s and 1s such that 1 means “on” and 0 means “off.”

2013-04-17 Hyperactive Monetary Policy: The Good, the Bad and the Ugly by Lupin Rahman, Mohit Mittal, Josh Thimons of PIMCO

Hyperactive monetary policy (HMP) is in full force as fiscal policy retreats. The benefits of HMP outweigh the costs for now. Despite cyclical growth, we will likely not achieve escape velocity and eventually the costs will likely overtake the benefits.

2013-04-17 The Interest Rate Environment: Comparing High Yield Bonds and Bank Loans by Team of Hotchkis & Wiley

In its first quarter 2013 newsletter, "The Interest Rate Environment: Comparing High Yield Bonds and Bank Loans," Hotchkis & Wiley’s high yield team analyzes the behavior of the high yield market and the bank loan market in different interest rate environments to determine whether they can make sensible assumptions about the future.

2013-04-17 U.S. GDP: After Some First-Quarter Flurry, a Slowdown? by Ken Taubes of Pioneer Investments

We had a little flush of activity in the first quarter, which we believe will lead to much better GDP potentially well over 3% than people anticipated in the beginning of the year. We look at this activity as a little bit of a catch-up, for a couple of reasons.

2013-04-17 Present and Emerging Risks to the Gold Trade by Amit Bhartia, Matt Seto of GMO

The notion of gold as a hedge against systemic risks is flawed. We believe that the concept of gold’s role as an insurance policy needs to be narrowed significantly.

2013-04-17 Is the Fed Eyeing an Earlier End to QE? by Zach Pandl of Columbia Management

Until September of last year, the Federal Reserve structured each of its bond buying programs in the same way: it announced a fixed amount of purchases and a specific target end date. This changed with the latest quantitative easing (QE) program launched last year. This time, instead of stating a specific dollar amount of purchases, Fed officials left the program open-ended: QE would continue as long as needed to ensure a stronger recovery in the labor market.

2013-04-17 Signs of a Correction by Scott Minerd of Guggenheim Partners

Although the long-term economic picture remains sanguine, a number of global risks and economic results point to a temporary period of consolidation in equity markets.

2013-04-17 Emerging Markets Equity Commentary by Team of Thomas White International

Emerging market equities corrected for the second successive month in March, on concerns that continuing weakness in European demand could hurt export growth for several countries in Asia and Latin America. These economies had seen a revival in their export fortunes during the second half of last year as U.S. consumer demand turned healthier. However, the moderation in U.S. consumer sentiment during March has somewhat dulled the optimism.

2013-04-16 Michael Pettis - Can China Save Itself? by Robert Huebscher (Article)

Most analysts predict China’s growth will slow; they disagree only as to the depth and timing of its eventual recession. A rare exception to that group is Michael Pettis. Pettis, who describes himself as a skeptic, believes China can rebalance its economy.

2013-04-16 Why Landing Clients is Like Dating – and Seven Other Rules for Prospecting by Dan Richards (Article)

In the last 10 years, the dynamics of acquiring clients has fundamentally changed. Today’s article outlines eight new rules for prospecting; among them why gravity no longer moves prospects through a funnel and the need for a communications catalyst as a result.

2013-04-16 All That Glitters Is Not Gold by Scott Colyer of Advisors Asset Management

This quote from Shakespeare’s Merchant of Venice is apropos given the nosedive in the gold markets today. In our 2013 Best Ideas piece we labeled gold a neutral as gold had not had a significant correction since 2008. Our research indicated a significant slowing of bullion purchases by gold Exchange Traded Funds (ETFs) in 2012 versus 2011. We looked for a correction and now need to contemplate whether we are in the end of the commodity bull market or merely a pause that refreshes.

2013-04-16 Five Warning Signs of a Coming Market Correction by Dawn Bennett of Bennett Funds

There are no positive fundamentals driving the U.S. stock market. No one has ever gotten rich by chasing markets by buying at the top, which is how this market feels.but it seems everybody feels they can’t afford to miss being in the U.S. equity markets. People should instead be focused on the true facts of the U.S. economy and corporations and tune out the hype and happy talk from the media and Fed heads. Instead investors should focus on the real data.

2013-04-16 High Yield Market Overview by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch U.S. High Yield Master II Constrained Index, was up 1.03% for the month of March, as the high yield market continued to benefit from stable U.S. economic growth and steady asset reflation driven by the Fed and global central banks.

2013-04-16 Tax Day as Polarizing as Ever by Chris Maxey, Ryan Davis of Fortigent

Tax season is once again upon the American population, and this year, just as in years past, people are less than enthusiastic. It is estimated that the average taxpayer contributed slightly more than $11,000 dollars to federal taxes in 2012 and those figures are on the rise. As might be expected in the current backdrop, however, not everyone shares the same opinion on taxes.

2013-04-16 The Asian Economic Crisis and the IMF by Bill O'Grady of Confluence Investment Management

In May 1997, a speculative run against the Thai baht became the first clear signal that a problem was developing in Asia. Over the next three years, Asia and other emerging markets, including Russia and Brazil, were rocked by a historic financial crisis. These nations recovered strongly in the following eight years and generally made it through the 2007-09 global financial crisis in relatively good shape. However, the impact of the Asian economic crisis remains a major factor in the behavior of these emerging nations.

2013-04-16 What the Bull Giveth, the Bear Taketh Away by Adam Butler, Mike Philbrick, Rodrigo Gordillo of Butler|Philbrick|Gordillo & Associates

The question of whether to commit new funds to stocks here is nuanced and complex, not least because it isn’t obvious that traditional alternatives - bonds or cash - offer any better value. We are very near all-time low interest rates across most developed government bond markets, credit spreads are near all-time tights, and rates are negative out to 5 or more years in real terms.

2013-04-16 All That Glitters by Jerry Wagner of Flexible Plan Investments

Gold prices officially fell into bear market territory on Friday. With a 4% decline that day, the current drop in the price of gold from its August 22, 2011 top crossed the negative 20% mark. Today as I write this, the precious metal is down another 10% plus.

2013-04-15 Valuation Based Equity Market Forecasts - Q1 2013 Update by Doug Adam Butler, Mike Philbrick, Rodrigo Gordillo of Butler|Philbrick|Gordillo & Associates

Click to viewWe endorse the decisive evidence that markets and economies are complex, dynamic systems which are not reducible to normal cause-effect analysis. However, we are willing to acknowledge the likelihood that the future is likely to rhyme with the past. Thus, we believe there is substantial value in applying simple statistical models to discover average estimates of what the future may hold over meaningful investment horizons (10+ years), while acknowledging the wide range of possibilities that exist around these averages.

2013-04-15 The Counter-Inflation Playbook Part 1 by Jeffrey Jones of Cornice Capital

One of the most important lessons I learned during my days at UCLA came from my freshman philosophy professor. He told us that should you find yourself engaged in a debate, the surest way to defeat your opponent is to attack his base principles. If those base principles aren’t fundamentally sound, any case built on top of it, no matter how convincing, is at risk of crumbling all at once.

2013-04-15 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

Another dayAnother record. With last week’s poor unemployment releases suddenly a distant memory, investors looked forward (and not backward) and took the Dow Jones and S&P 500 back into record-setting territory with a four-day winning streak. By week’s end, however, some key earnings reports disappointed and analysts became more concerned about the state of the consumer (though there is clearly no consensus on that front either).

2013-04-15 Housing Is it Getting Better, A Second Look by Gregg Bienstock of Lumesis

This week we take a quick look at some of what is in the President’s budget and then focus on the housing market (the title harkens back to something we wrote a few months back). You may sense, as you read on, I’m a bit cranky this week. As you read through the housing section you’ll understand why.

2013-04-15 Keynes And Retail Sales by Brian Wesbury, Bob Stein of First Trust Advisors

No, just because retail sales fell 0.4% in March does not mean Keynes was right. Sequestration did not cause the decline. Nor did the end of the temporary 2% payroll tax cut, back in January, cause it either.

2013-04-15 The (Up) Beat Goes On, Part II by Bob Doll of Nuveen Asset Management

We wrote Part I of this theme on February 11 during the first quarter rally, when the S&P 500 closed the week at 1518. This past week the S&P ended at 1589, after increasing 2.3%. Global stock prices continue to push to new highs and thus provide support for a pro-equity bias. One nuance is that the composition of the equity rally has been abnormally defensive.

2013-04-15 Increasingly Immediate Impulses to Buy the Dip (or, How to Blow a Bubble) by John Hussman of Hussman Funds

A tendency toward increasingly immediate attempts by investors to buy every dip in the market reflects a broadening consensus among investors that there is no direction other than up, and that any correction, however, small, is a buying opportunity. As investors clamor to buy ever smaller dips at increasing frequency, the slope of the market’s advance becomes diagonal or parabolic. This is one of the warning signs of a bubble.

2013-04-12 ECRI\'s Weekly Leading Indicator Shows a Small Improvement by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is now at 130.1, up from 129.1 last week (revised from 129.2). The WLI annualized growth indicator (WLIg) remains unchanged at 6.2%.

2013-04-12 Housing Bubble II? by Russ Koesterich of iShares Blog

It might seem like the housing bubble just burst, but as the housing market stages a comeback, investors are asking if we’re already facing another bubble. Russ explains why home prices aren’t in a bubble but home builder stock valuations may be.

2013-04-12 Asia\'s E-Commerce Evolution by Michael Oh of Matthews Asia

Korea and Japan have been trailblazers in terms of making the virtual marketplace platform, through which merchants and manufacturers of all sizes can sell goods to consumers, an e-commerce model in Asia. Unlike in the U.S. and Europe, where many retailers sell directly to customers from their own websites and handle the details of commerce themselves, most Asian e-commerce takes place on “megasites” or virtual markets.

2013-04-12 March Jobs Report: Disappointing, But Not Terrible by Scott Brown of Raymond James

The economic added 759,000 jobs in March before seasonal adjustment, that is. That translated into a disappointing 88,000 gain in the seasonally-adjusted number. Figures for January and February were revised higher. The slower March figure could reflect a lagged impact from the payroll tax hike or February may have simply borrowed some strength from March.

2013-04-12 The Truth About The Impact Of Dividend Reinvesting by Chuck Carnevale of F.A.S.T. Graphs

What follows will be several examples of different kinds of dividend paying stocks offered in order to provide deeper insight into several commonly held notions. With each example, I will focus on how much return comes from dividends and how much comes from capital appreciation. I will also illustrate the precise benefits and effects of dividend reinvestment as it applies to different types of dividend paying stocks.

2013-04-12 How a Landslide Shifts Copper Supply by Frank Holmes of U.S. Global Investors

The U.S. mining industry was dealt a devastating blow as Kennecott Utah Copper’s Bingham Canyon Mine experienced a pit wall failure causing a massive landslide with rocks and dirt covering the bottom of the mine pit. It’s a miracle no one was hurt due to the vigilance of its owner, Rio Tinto. The landslide is just one example of how quickly and unexpectedly the supply and demand factors facing the red metal can shift, which underscores the need for nimble active management.

2013-04-12 Everyone Wants More Financial Stability, But at What Cost? by Carl Tannenbaum of Northern Trust

For all the good intentions, there is no guarantee that the rush to re-regulate will be successful. The next crisis may look nothing like the one just past, and the political will to take tough preventative steps during good times cannot be taken for granted.

2013-04-12 Assume a Perfect World by John Mauldin of Millennium Wave Advisors

Waiting for our forecasts to be wrong before we adopt a yet another “solution” based on a temporary fix of yet another forecast that turned out to be wrong is no way to run a railroad, unless you want your train running off a cliff. I applaud the recent attempts in DC to come to a solution on the deficits and budget, but where are the leaders who want to get real with those forecasts?

2013-04-12 Soft Patch - Part Four? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Stocks continue to trade at all-time highs, but concerns are rising over a possible pullback and downturn in economic growth. A consolidation of gains is likely, but trying to trade around a pullback can be quite difficult. A potential tapering of Fed asset purchases continues to be discussed, but the Fed also appears nervous over the potential for a spring downturn. Cooler heads appear to be gaining traction in Washington and at least some marginal progress is being made. Economic improvement is gaining traction in Japan, raising hopes of sustainable change, while Europe continues to suffer.

2013-04-11 The Ripple Effect of Abenomics by Scott Minerd of Guggenheim Partners

Monetary policy in Japan will continue to drive investors in that country to overseas markets, which will affect global asset prices and bond yields.

2013-04-11 Bank of Japan Surprises Market and Yen Reacts by Team of Nomura Asset Management

We recently indicated on March 14, 2013 that we believed the Yen would remain range bound near the level of PPP (purchasing power parity), which we estimated to be between 90 to 95 Yen/USD. We wrote at the time that though currency movements will be affected by various factors, the monetary policies of both Japan and the U.S. are the most important.

2013-04-11 Global Investing in 2013: Policy Dominance, Active Management and a New Paradigm in Currencies by Scott Mather of PIMCO

We expect that the impact of ongoing global policy experimentalism on real economic growth and financial markets will likely vary substantially from country to country, creating both risks and opportunities. With flexible, active global strategies investors can potentially benefit from a broader opportunity set and the ability to go off benchmark in an effort to both avoid risks and tap opportunities.

2013-04-11 Telling (Taper) Time by Tony Crescenzi of PIMCO

Investors need be alert for signs of progress in the many employment indicators the Fed is watching, and listen closely to what the Fed is saying to know when bond buying will be tapered. The failure to achieve “escape velocity” is why the Fed is using its printing press to purchase $85 billion of securities monthly. These purchases will continue, the Fed says “until the outlook for the labor market has improved substantially.” The Fed has made progress toward achieving escape velocity but the progress must be sustained for the Fed to throttle back on its stimulus.

2013-04-10 Economic Slowdown Halts Equity Rally by Bob Doll of Nuveen Asset Management

The latest softness in economic indicators probably means that more consolidation in the equity markets is required before we can advance beyond the recent all-time highs. During March, nearly all of the activity for the S&P 500 was within 1% of 1550. Equities may move lower due to deteriorating technical conditions and the possibility of weak first quarter earnings reports.

2013-04-10 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks were slightly lower last week as the troubles in Europe, Asia (Japan & North Korea) dovetailed with a really lousy employment report here at home on Friday.

2013-04-10 Surprising Surge!! by Jim Tillar, Steve Wenstrup of Tillar-Wenstrup

Momentum from 2012’s surprisingly strong performance continued into the first quarter of 2013 with stocks rising sharply. Our portfolios did well but lagged behind our benchmarks in the quarter. Taking a little longer view, over the trailing 12 and 36 months we mostly matched the double-digit gains of our benchmarks, which we are very pleased with since we usually underperform during strong market advances. So far this year small- & mid-capitalization, value, and domestic stocks were the market leaders, while international, growth, commodity stocks and Apple were laggards.

2013-04-10 Looking for Warm Milk and a Blanket by Blaine Rollins of 361 Capital

Conspiracy theory economists would say that the Government fudged the data weaker so that it could help sell $60-70 billion in U.S. debt this week. Whatever the outcome, last week we had a perfect storm of high expectations for the data + very below average March weather + the payroll tax hike impact + the upcoming sequester worry. Economic data will move violently from month to month, but unfortunately last week, it was mostly in the WEAKER THAN EXPECTED direction and investors did not hesitate to bring pain on risk assets.

2013-04-10 Pacific Basin Market Overview by Team of Nomura Asset Management

Supportive U.S. economic data drove most markets higher during the first quarter of 2013. China underperformed the region amid concerns that the economic recovery may not be as robust as previously expected, while the National People’s Congress in March failed to provide any incentives to the equity market given the absence of pro-growth policies. The MSCI AC Asia Pacific Free Index including Japan gained 5.5% while the MSCI AC Asia Pacific ex Japan Free Index closed 2.0% higher during the quarter.

2013-04-10 Time to Flee Equities for Bonds...and Japan? by John Rothe of Riverbend Investment Management

Last week’s string of bad economic data may finally be the tipping point we have been waiting for. For the past few weeks, I have become more and more bearish on the US economy and stock market. Payroll tax hikes, sequestration, and slowing global growth mixed with a euphoria for a rising stock market have pushed the markets into a high risk environment.

2013-04-10 The Global Growth Quest by Mohamed El-Erian of Project Syndicate

The last few years have highlighted the declining potency of long-standing growth models. Moreover, the search for more robust growth models will take much longer and be more complicated than many recognize especially as the world economy pivots away from unfettered globalization and high levels of leverage.

2013-04-10 Financial Markets Review and Outlook First Quarter 2013 by Team of Managers Investment Group

Risk-based assets rallied sharply during the first quarter on the heels of a fiscal tax-cliff compromise that overhung the market in the latter half of 2012. U.S. equities posted their best quarterly returns since 1998, with both the Dow Jones Industrial Average and S&P 500 Index reaching all-time highs. While the equity market rally extended abroad, returns overseas were muted by a strengthening U.S. Dollar. Bond markets, with the exception of high-yield investments, failed togenerate anything beyond middling returns, as investors’ risk appetites started the year strong.

2013-04-10 Don't Pay Too Much for That Bordeaux - Or That Bond by Jeff Helsing of PIMCO

The financial market’s reliance on ratings agencies and benchmarks, along with regulations, can cause distortions in the value of some securities. These price distortions can create potential opportunities for some investors. Investors should consider aligning capital allocation with outcome-oriented objectives that aren’t influenced by credit ratings or benchmarks.

2013-04-10 The Clock is Ticking for Passive Management by Team of The Royce Funds

It may feel like only yesterday, but it has been four years since the equity market bottomed in March 2009. Much has changed since that timegovernment debt and the Fed’s balance sheet have exploded, bond yields have declined, and quantitative easing has become the norm.

2013-04-09 John Hussman – Why Prospective Returns Are Low by Robert Huebscher (Article)

Monetary and fiscal policies have driven our economy into an unstable equilibrium, pushing investors into higher-yielding securities, according to John Hussman. But those higher yields are illusory, he said, because corporate profit margins are too high to be sustainable.

2013-04-09 MLPs: Winning Streak Broken, Growth Story Intact by Sponsored Content from Legg Mason ClearBridge
by Chris Eades, Portfolio Manager (Article)

After an off year clouded by investors’ concerns about future tax policy, ClearBridge’s outlook for MLPs is again brightening. Oil and natural gas production are both ahead of estimates and the resulting infrastructure build-out is continuing.

2013-04-09 BLS Revisions Include 464K More Jobs Than Previously Reported by Ali Wolf of John Burns Real Estate Consulting

The largest 358 metros created 464,000 more jobs in 2012 than the 1,472,000 jobs previously estimated, a 32% increase from initial employment gain figures. 310 of the 358 metros showed job growth.

2013-04-09 Labor Markets Stumble in March by Ryan Davis, Chris Maxey of Fortigent

In an unexpected development, labor markets fell flat during March. Following several months of healthy job growth, the economy was only able to muster 88,000 new jobs in March, well below economists’ expectations for nearly 200,000 jobs.

2013-04-09 Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management

Another good month and a strong quarter, with the portfolio gaining by 3.5% and 15.2% (net) respectively, outperforming the rises in the index of 1.8% and 14.0%. Conspiracy theorists could be forgiven for believing that most political/central bank action is designed to support equity prices. The Cyprus fiasco is an example: whatever the legal frameworks, from government guarantees of bank deposits to the repayment of sovereign bonds, all are merely non-binding statements of intent, thus a wake-up call to buy real, income-producing assets.

2013-04-09 Bond Market Review & Outlook by Thomas Fahey of Loomis Sayles

The first quarter of 2013 turned out pretty much as expected: a low volatility environment with the level of bond yields and credit spreads relatively stable. At some point, we have to be happy with earning a yield on our fixed income investments. The last several years have been a major bond bull market, particularly 2012, but with yields at low levels, there is not much room left for bond price appreciation and we should be comfortable with earning our yield and carry.

2013-04-09 Morning in Japan by Christian Thwaites of Sentinel Investments

There were two very important central bank meetings last week, one from the Bank of Japan the other the ECB. Bank of Japan press conferences have been soporific affairs for years with a few QE programs not leading to much and no changes to inflation targets. Deflation, a declining workforce and falling aggregate demand have been pretty much the unbroken story for the best part of two decades.

2013-04-08 A Continuing Case for Dividends by Richard Skaggs of Loomis Sayles

The investment case for dividend-paying stocks is as strong as ever. Many dividend-paying stocks continue to boast yields comparable to or higher than US Treasurys, and the case for dividend growth in the years ahead remains favorable. Dividends have a long history as a significant component of total return, and investors will likely continue to press for rising payouts since corporate balance sheets are flush with cash. What should investors consider as they survey the universe of dividend-paying companies?

2013-04-08 The Theology of Inflation by John Mauldin of Millennium Wave Advisors

We begin this week with a simple pop quiz. Is inflation good or bad? Answer quickly. I’m sorry your answer is wrong. Or rather, we can’t know if your answer is right or wrong because we are not sure what is meant by the question. We may think we know and we may be right but we can’t be sure, because the word inflation has different meanings for different people in different places and different times. In fact, even the same people in the same place and time can’t agree on a precise definition.

2013-04-08 “Country Roads, Take Me Home,To The Place I Belong ” by David Lieberman of Advisors Capital Management

Recently, I was listening to a Pod Cast from This American Life about the increasing disability rolls in the United States. The story itself was excellent and I would highly recommend it, but the implications of the numbers are equally remarkable. In the past 20 years, the number of people on disability in the United States has soared, even recently when the unemployment rate has declined materially. Rather than focus on the policy decisions, causes of this phenomena, or even whether they are logical, good, or bad, I’m going to focus purely on the unemployment and economic ramifications

2013-04-08 Europe Stumbles to a Cyprus Solution by Milton Ezrati of Lord Abbett

After several late-night meetings and considerable angst, the members of the eurozone have settled on something for Cyprus that looks very much like a typical bankruptcy. It is comical in a way that people worked so hard to arrive at an already widely known, well-established process. Still, this result may have value. Because Europe through these four years of crisis has strived to tailor settlements for each new challenge, it has always left people in doubt about each outcome, particularly where the pain would fall.

2013-04-08 Ben Bernanke, the Rodney Dangerfield of Fed Chairmen by Paul Kasriel of Econtrarian, LLC

First it was 2012 presidential candidate Rick Perry, who wanted to deal with Ben Bernanke’s money-printing “Texas style”. Then 2012 presidential candidate Mitt Romney indicated that Ben Bernanke had better have his personal effects packed up and ready to move out of his Fed office by January 21, 2013.

2013-04-08 Can Something Good Be Cheap Too? by Charles Lahr of PIMCO

Over the last eight years, the least volatile components of the MSCI World Index tended to have lower valuations, higher profit margins and higher dividend yields. This anomaly, which appears to be among the most persistent in all of equity space, is rooted in speculative human behavior such as the “lottery ticket phenomenon.”

2013-04-05 Quarterly Letter by Ron Muhlenkamp of Muhlenkamp & Company, Inc.

For two years or more, we’ve been discussing Europe, China, and U.S. politics as drivers for the financial markets. These drivers continue.

2013-04-05 PIMCO Cyclical Outlook for the U.S.: Back From the Brink by Josh Thimons of PIMCO

We expect the largest contributors to U.S. growth this year will be housing and related industries, increases in capital expenditures (albeit from very depressed levels), certain manufacturing sectors, such as the auto industry, and the energy sector. We see roughly 1.7 percentage points of drag on GDP coming out of Washington far less than the four to five percentage points of potential drag had there been no fiscal cliff resolution. We believe the Fed will continue with hyperactive monetary policy, which we now call “QE Infinity,” that does not have an explicit end date or progr

2013-04-05 The Stockman Backlash by Peter Schiff of Euro Pacific Capital

This week, while economists should have been closely considering the implications of the actual bankruptcy of Stockton, California, they instead heaped scorn on the perceived ideological bankruptcy of David Stockman. In other words, Stockman trumped Stockton.

2013-04-05 Could Consumers Change Japan\'s Tide? by Team of Matthews Asia

This year, investor attention has focused on Japan and its macroeconomic policy with hopes that rising inflation expectations might spur businesses to invest and consumers to spend. Since Prime Minister Shinzo Abe and Japan’s ruling Liberal Democratic Party (LDP) regained power late last year and proposed more aggressive monetary policies, including an ambitious inflation target, the yen has weakened more than 20% against the U.S. dollar and more than 15% against the euro.

2013-04-05 Ask Russ: All About Emerging Markets by Russ Koesterich of iShares Blog

Russ answers more client and reader questions this time about emerging market equities and debt.

2013-04-05 China's Uncertainties Won't Stop Renminbi's Rise by Hayden Briscoe of AllianceBernstein

Recent data releases and the transition to new political leadership have created some uncertainty about China’s short-term economic outlook. While positive growth surprises are unlikely in 2013, we still think nothing can stop the long-term appreciation of China’s currency, the renminbi (RMB).

2013-04-05 ECRI\'s Recession Indicators Decline from the Previous Week by Doug Short of Advisor Perspectives (dshort.com)

Today ECRI has added a new headline on the website, Employment Growth Hits New Low, based on data from today’s jobs report. Essentially ECRI is sticking to its call that a recession began in mid-2012, although the company now calls it a "mild" recession, which is quite a shift from their original stance 18 months ago: "...if you think this is a bad economy, you haven’t seen anything yet."

2013-04-05 The Promise of Abenomics by Joseph Stiglitz of Project Syndicate

Japanese Prime Minister Shinzo Abe is doing what many economists have been calling for in the US and Europe: a comprehensive program entailing monetary, fiscal, and structural policies. As many Japanese rightly sense, Abenomics, with its focus on monetary, fiscal, and structural policies, can only help the country’s recovery.

2013-04-05 This Week's Central Bank Meetings Revealed a Range of Behavior by Team of Northern Trust

This week’s central bank meeting revealed a range of behavior. The U.S. employment report fell well short of expectations. Does China have a property bubble?

2013-04-04 Sound Fundamentals but Fatigue in the Markets by Scott Minerd of Guggenheim Partners

Although economic fundamentals continue to strengthen, the run-up in asset prices that has unfolded over the past half-year appears to be at risk of a temporary set-back.

2013-04-04 The Road To Omaha: Valuation Matters Dearly by Bill Smead of Smead Capital Management

Valuation is the topic that will begin a month-long series we’re calling, “The Road to Omaha.” In the next five weeks as we build to the Berkshire Hathaway annual shareholder meeting, we will present a picture of Mr. Warren Buffet and his investments through the Smead Capital Management lens. There is one central fact on which Warren Buffett, efficient market theorists, and Smead Capital Management agreevaluation matters dearly.

2013-04-04 Short-Duration High-Yield Bonds: An Attractive Solution for a Low-Yield, Rising-Rate Environment by Eric Scholl, Tom Saake of Allianz Global Investors

With Treasury yields at historically low yields, investors need to look elsewhere for the income they need. Eric Scholl and Tom Saake, portfolio managers at Allianz Global Investors, discuss why high-quality short-duration high-yield bonds may be a good solution for today’s low yield environment and can provide protection against rising rates in the future.

2013-04-04 Teachings from Recovered Markets by Richard Michaud of New Frontier Advisors

Domestic indices’ all-time record highs indicate that U.S. domestic equity markets have largely recovered from the 2008 Great Recession. It may have taken four years but it still seems a remarkable achievement given the Dow’s low of 6620 in March 2009. It is worth noting that prior highs were attained in an era with a poor savings rate and wide use of levered strategies. The last four years were widely characterized by a “low return” market mantra and fear of equities stoked by many doomsayers, pundits, and strategists who greeted every upturn with pessimism.

2013-04-03 First Quarter Recap by Bob Doll of Nuveen Asset Management

This past month marked the fourth anniversary of the global equity market bottom on March 9, 2009. U.S. stocks have clawed back all of the losses from the Great Recession and are near historical highs. Most other major markets are still well below their 2007 peaks, but have rebounded sharply since last June and look increasingly resilient. However, there is tremendous anxiety about the economic outlook, and many investors fear equities and other risk assets are floating on a sea of liquidity rather than solid fundamentals. We are more constructive and maintain a pro-growth investment stance.

2013-04-03 When Does The Great Recession Become the Great Rotation? by Gene Tannuzzo of Columbia Management

Given the strong flows into the bond market over the past few years, many pundits have pondered the beginning of the “Great Rotation” when bond investors begin to move money into the equity market. Investors fear that this shift could cause losses in bond funds as investors flee. Indeed since the start of the Great Recession in 2008, investors have plowed into bond funds as an alternative to equity volatility.

2013-04-03 Minor Crisis...Not Too Many Hurt by Christian Thwaites of Sentinel Investments

Cyprus proved, over the last two weeks, that markets often overlook the small stuff. Very few commentators we follow saw any of it coming and the theories that sprang up in the interim (Cyprus as vassal state to Russia, return to the Cypriot pound, imminent EU break up, twin euros in circulation, utter disaster for the economy, German intransigence and Schrecklichkeit) were absurd.

2013-04-03 Surprise! 2013 Rally Pales in Comparison to 2012 “Stealth” Rally by Douglas Cote of ING Investment Management

Despite the hoopla over first quarter market performance, it paled in comparison to the first three months of 2012. Driven in part by an extremely accommodative Fed, the U.S. economy is gaining traction, but Europe continues to flounder. After their first negative print in three years during the third quarter, S&P 500 companies returned to positive earnings growth in the fourth. A broad, globally diversified portfolio is the best way to balance the desire for wealth accumulation with an appreciation of volatility.

2013-04-03 F.I.R.S.T.: Made in the U.S.A. by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

Not just the preamble for the “machine-wash-in-cold-water-and-eat-celery-only” instructions on the inside of your skinny jeans, “Made in the U.S.A.” is a brand in vogue these days as the Stars and Stripes looks to dawn a manufacturing renaissance to go with that snazzy new housing recovery everyone’s been talking about.

2013-04-03 Why This Economic \"Recovery\" is So Weak by Gary Halbert of Halbert Wealth Management

We start today with an excellent editorial I read last week written by Mort Zuckerman, Editor-In-Chief of U.S. News & World Report. My goal every week is to do a lot of reading and summarize what I’ve learned in these pages week in and week out. But every now and then I run across something so good that it just makes sense to reprint it in its entirety, even if it’s not my own work. Not many of my contemporaries are willing to do that, as they think it makes them look less scholarly. I don’t have that problem.

2013-04-03 A Man in the Mirror by Bill Gross of PIMCO

Am I a great investor? No, not yet. To paraphrase Ernest Hemingway’s “Jake” in The Sun Also Rises, “wouldn’t it be pretty to think so?” But the thinking so and the reality are often miles apart. When looking in the mirror, the average human sees a six-plus or a seven reflection on a scale of one to ten. The big nose or weak chin is masked by brighter eyes or near picture perfect teeth. And when the public is consulted, the vocal compliments as opposed to the near silent/ whispered critiques are taken as a supermajority vote for good looks.

2013-04-02 The Most Important Practice Management Challenge by Bob Veres (Article)

The future of the advisory business is all about people, according to Philip Palaveev. No matter what happens with consolidation and pricing, he says, no matter what role technology plays, the most successful firms of the future will be those which excel at retaining, motivating and organizing their people.

2013-04-02 A Q1 Letter to Clients: Why Warren Buffett is Bullish on Stocks by Dan Richards (Article)

Since 2008, I have posted templates to serve as a starting point for advisors looking to send clients an overview of the year that just ended and the outlook for the period ahead. This quarter’s letter draws on Warren Buffett’s most recent letter to shareholders, and why he is bullish on the US equity market.

2013-04-02 Flying High on Borrowed Wings by Peter Schiff of Euro Pacific Capital

After selling off an astounding 56% between October of 2007 and March 2009, the S&P 500 has staged a rally for the ages, surging 120% and recovering all of its lost ground too. This stunning turnaround certainly qualifies as one of the more memorable, and unusual, stock market rallies in history. The problem is that the rally has been underwritten by the Federal Reserve’s unconventional monetary policies But for some reason, this belief has not weakened the celebration.

2013-04-02 ProVise Bullets by Ray Ferrara of ProVise Management Group

As we began 2013 America was looking ahead to President Obama’s second term, the passage of a tax bill that raised government revenue significantly, discovering that fourth quarter growth was virtually flat, corporate earnings that had only a few mild surprises to the upside and several to the downside, and finally, an increase in Social Security taxes of 2%. Then the sequester kicked in in early March, a band aid was used to patch the government together until the end of September, and we saw the nervousness the European markets, highlighted by Cyprus.

2013-04-02 Finally by Jerry Wagner of Flexible Plan Investments

With a headline like that, I could be talking about my Law School Alma Mater, the University of Michigan, making it back into the Final Four for the first time since 1993 by beating the University of Florida in the NCAA South Regional basketball Finals yesterday. Or it could be the exclamation of most Michiganders with the first sunshine-filled days this weekend since spring had sprung earlier in March (yes, the ice also finished melting on our lake this weekfinally).

2013-04-02 New Market Records, Quarterly Review, And What\'s Next by John Rothe of Riverbend Investment Management

Last week, after gyrating for the past month, the S&P 500 was finally able to close in record territory. However, investors may not be feeling the joy in their pocketbooks just yet; when inflation is factored in, it becomes clear that the US stock market is still in the extended cyclical bear cycle which started in 2000.

2013-04-01 Buffet's Advice for Apple Inc. by Sean Bonner, William Bonner Jr. of Carne Capital

During a recent interview on February, 27th on CNBC Warren Buffett described a phone call he got from the late Apple CEO Steve Jobs. Mr. Buffett gave this account, "It was an interesting conversation because I hadn’t talked to him in a long time. He said, ’We’ve got all this cash. What should we do with it?’ So we went over the alternatives. It was kind of interesting." Mr. Buffett often comments in his annual letters about the options for deploying cash and he did again in this interview.

2013-04-01 The Global Economy on the Fly by Nouriel Roubini of Project Syndicate

In a fragile global environment, has America become a beacon of hope? While the US is experiencing several positive economic trends, Europe continues to stagnate, and China will be vulnerable to a hard landing in 2014 unless its new leaders accelerate the pace of reform.

2013-04-01 Again and Again. by Scotty George of du Pasquier Asset Management

My work has always been predicated upon using quantitative modifiers to enhance portfolio value through greater efficiency of information processing and the creation of momentum-driven asset allocation models. But because so many investors quizzically suffer from a herd mentality, they find it difficult to digest common sense solutions to diffuse problems. And yet, our methodology and its consistent point of view has enabled clients to benefit without compromising investment expectations.

2013-04-01 Employment 401, Muni Index Says and New Data by Gregg Bienstock of Lumesis

This week we spend time looking back at employment data (promised two weeks back) and offer some perspective from a soon to be published book. We take a look at the DIVER Muni Index and conclude with an introduction of some new and meaningful data now available to our subscribers.

2013-04-01 Currency and Emerging Markets: What Can We Expect? by Giordano Lombardo of Pioneer Investments

Currency markets are making headlines again after taking a low profile amid the crises and the turmoil in financial markets of the last five years or so. I asked Greg Saichin, Head of High Yield and Emerging Markets Fixed Income Portfolio Management here at Pioneer, to provide his views about what is going on, and what he sees as the drivers of investment flows into emerging markets.

2013-04-01 The Discipline of Buy and Sell Decisions by Mark Mobius of Franklin Templeton Investments

The thought of giving up a once-treasured possession can be an emotional exercise for anyone, even if the object of affection has outlived its use. As investors, we can find it difficult to sell a once-favored holding even more difficult than the decision to purchase it. But sometimes, you just have to let go.

2013-04-01 We Should Already Have Learned How This Will End by John Hussman of Hussman Funds

The bear market losses that complete each market cycle have different catalysts. Some feature recession, some feature inflation, some feature credit events, but nearly all feature a spike in risk premiums from levels that have become both low and complacent. That’s the underlying risk that overvalued, overbought, overbullish, rising-yield conditions have reliably identified over time.

2013-04-01 Look Beyond the U.S. Budget Bluster by Milton Ezrati of Lord Abbett

Believe it or not, prospects for better fiscal developments out of Washington appear positive. Here’s why.

2013-04-01 Plan Sponsors and Participants Need HELP by Jon Vogler of Invesco

The Senate Committee on Health, Education, Labor & Pensions (HELP Committee) held a hearing titled “Pension Savings: Are Workers Saving Enough for Retirement?” on Jan. 31, 2013. Witnesses shared successful initiatives and highlighted areas that need improvement to help workers achieve a financially secure retirement.

2013-04-01 A Fresh Milestone by Jeffrey Saut of Raymond James

Last Thursday the S&P 500 (SPX/1569.19) notched a new all-time causing Ms. Scaggs to pen the aforementioned story in Friday’s Wall Street Journal. I was particularly interested in a sentence further down in the article that read, “The rally in stocks comes as investors warm up to stocks for the first time in years.” That prose sparked memories of an era gone by.

2013-04-01 The Arithmetic on Consumer Spending by Scott Brown of Raymond James

The 3rd estimate of 4Q12 GDP growth showed a downward revision to consumer spending growth. Less momentum heading into 1Q13, right? Guess again. Revisions to the monthly data actually showed better growth heading into the new year. Moreover, figures for January and February suggest a much stronger rate of growth in spending (and hence GDP) than was anticipated just a short time ago.

2013-03-29 China on the Move by Stephen Roach of Project Syndicate

After six years of weighing the options, China is now firmly committed to implementing a new growth strategy. But it will take courage and sheer determination to tackle the biggest obstacle of all deeply entrenched local and provincial power blocs.

2013-03-29 ECRI Recession Indicator: Unchanged from Last Week by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) to one decimal place is unchanged from last week. It is now at 129.7, the same as last week’s downward revision from 129.8. The WLI annualized growth indicator (WLIg) has risen fractionally to 6.6%, up from last week’s 6.3%. Those of us who regularly follow ECRI’s publicly available data and commentaries understand that there is no logical connection between ECRI’s proprietary indicators and their "pronounced, pervasive and persistent" recession call of September 2011.

2013-03-29 Learnings From the Cyprus Saga by Carl Tannenbaum of Northern Trust

There are important differences between the situation in Cyprus and the challenges other southern European nations face that should limit the transfer of financial trauma. The hope remains that the ECB’s promise to do whatever it takes to solve the sovereign debt crisis will ultimately settle markets. But access to certain types of ECB support requires reaching agreement on restructuring with the same European officials who have handled the situation in Cyprus so maladroitly.

2013-03-29 Market Resilience by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

After a stellar first quarter performance from US stock markets, which showed impressive resilience to continued headwinds, a pullback is certainly possible but we don’t suggest investors who need to add to allocations wait. In a relative world, the US stock market continues to look like an attractive place to invest, although there may also be opportunities in Japan and Europe as well. The upcoming earnings season could tell the story for the market over the next couple of months, but we continue to advocate a long-term point of view and maintaining a diversified portfolio.

2013-03-28 On the Fed, the Keystone Pipeline & the War On Jobs by Gary Halbert of Halbert Wealth Management

The Fed Open Market Committee (FOMC) met as scheduled last Tuesday and Wednesday to review monetary policy and its massive “quantitative easing” effort. The official policy statement released at the end of the meeting on Wednesday was little changed from those in previous months.

2013-03-28 Emerging Markets Investment Bulletin by Team of Bedlam Asset Management

The increases in the portfolio’s net asset value continue easily to beat the hardly exacting returns from the index. The fund has gained 10.4% gross for the year to date (to 22 March), vs. a 3.0% rise for the MSCI Emerging Index. This outperformance (replicated over rolling 1- and 3-year periods) has been achieved by choosing investments irrespective of index country or sector weightings or where they are listed, so long as they derive the majority of income and profits from developing countries.

2013-03-28 Today's Good News Isn't Bad for US Stocks by Daniel Loewy of AllianceBernstein

Believe it or not, recent US housing market gains, the slight reduction in jobless rates and other signs of a revival in US economic growth are making some investors bearish about US stocks. We think their fears are misplaced.

2013-03-28 What Will Drive the Market? by Charlie Dreifus of The Royce Funds

The sequester adds to the economic headwinds caused by ending the payroll tax holiday and the boost in tax rates. However, even with the sequester, total federal government outlays will rise this fiscal year. Finally, after more than a month of daily increases for a gallon of unleaded gasoline, prices are now declining. This has been of concern as rising oil and gasoline prices were yet another headwind facing the U.S. economy. (Oil prices have also declined.)

2013-03-28 China Talks of Trimming the Fat by Winnie Chwang of Matthews Asia

China’s new leaders are talking tough about fighting government corruption and imposing a culture of frugality among Communist Party cadres. Sensitive to growing criticism about government excess, incoming President Xi Jinping has promised to crack down on officials who abuse their power and engage in illicit behavior, regardless of their rank.

2013-03-28 Whatever It Takes in Japan? It Takes an 'Audacious' Monetary Policy! by Richard Clarida and Tomoya Masanao of PIMCO

The BOJ will have to make some key monetary policy decisions soon, given Kuroda’s sincere but ambitious desire to achieve 2% inflation within two years. The BOJ has lagged far behind other major central banks in the deployment of its balance sheet since the onset of the financial crisis. Expect Japan’s monetary policy to be more aggressive and experimental as it shifts toward reflating the economy. For global investors, this may mean a modest economic growth contribution from Japan, at least over a cyclical horizon, as well as additional central bank liquidity pouring into global m

2013-03-27 Call Him Ishmael by Jeffrey Bronchick of Cove Street Capital

One of the hardest things to conquer as a value investor is the concept of "price." The industry remains mired in fascination with abstract prices like 100, 1,000, 14,000, previous highs, new lows, etc. The stock is up x% from x dollar price; it is down x% from x price. There is also much in print and general fretting in regard to "price action," with lots of attention paid to where the stock has "been" and how this move relates to other "moves," as in "the largest move since last December 12th."

2013-03-27 What Happened to That Export-Led Recovery? by Mike Amey of PIMCO

With nearly 50% of the UK’s total exports going to Europe, an economic area constantly flirting with its own recession, it is no surprise to see that UK trade performance has been challenged.As the US continues to re-heal, and trade becomes more geographically diversified, we should see exports start to grow once more, albeit off a modest base. The easing in sterling is undoubtedly welcome and will improve prospects for exports, but it is unlikely to be a “game changer”.

2013-03-27 SMID-Caps: To Know Them Is to Love Them by Bruce Aronow, James MacGregor of AllianceBernstein

It’s an opportunity born of neglect. Small-cap stocks have historically been the star performers of equities, handily outpacing large-cap stocks. And because they can get lost so easily in the grand sweep of the markets, small companies are often misunderstood and mispriced. That makes them great sources of alpha potential, especially for investors who take the time to get to know them well.

2013-03-27 Mark Hulbert: Our Kindred Spirit by Bill Smead of Smead Capital Management

Mark Hulbert and I started in the investment business in 1980. He chose to create a business out of analyzing the results and psychological implications of investment newsletter writers. At Smead Capital Management, we formed a business to analyze publicly-traded US common stocks through the prism of our eight proprietary criteria. We enjoy his unbiased third-party opinions on current circumstances and his consistently good historical perspective.

2013-03-27 Why Not a Quantitative Target for Quantitative Easing? by Paul Kasriel of Econtrarian, LLC

When I should have been practicing my bass guitar in preparation for my band class Thursday evening, I, instead, watched the first few minutes of Federal Reserve Chairman Bernanke’s post-FOMC press conference. A number of press inquiries were related to adding specificity to the FOMC’s criteria for modifying its current $85 billion per-month purchases of securities. In the short time that I watched the press conference, Chairman Bernanke did not seem to satisfy the press on this issue.

2013-03-26 Adapting the Yale Model for Clients by C. Thomas Howard, PhD and Lambert Bunker (Article)

The Yale University endowment fund is one of the most successful in the country, with a 10-year return besting the endowment universe average return by 300 basis points and the Wilshire 5000 return by 400 basis points. David Swensen is the architect of this program, and his guiding principles are widely used to manage large endowments. They are equally useful for client portfolios.

2013-03-26 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks were flat last week as investors were mesmerized by the goings on in Cypress and the European Union.

2013-03-26 Currencies in a Race to Debase by Chris Maxey, Ryan Davis of Fortigent

Since the start of the year, investors have seen rapid shifts of sentiment in currency markets. The debasement that for so long was assumed to be a purely Western phenomenon is beginning to impact countries globally, driving changes in expected returns and growth prospects.

2013-03-26 Smart People's Opinions, The Data Says and Some Looming Deadlines by Gregg Bienstock of Lumesis

Being on the road gives me a lot of time to read the views and opinions of many very smart people (Faber, Mauldin, Hussman, Hunt and Zhao this week citations below as they all are worth a read). An interesting thread runs through much of what I absorbed this week: they don’t believe the hype.

2013-03-26 The Stimulus Trap by Peter Schiff of Euro Pacific Capital

For years we have been warned by Keynesian economists to fear the so-called "liquidity trap," an economic cul-de-sac that can suck down an economy like a tar pit swallowing a mastodon. They argue that economies grow because banks lend and consumers spend. But a "liquidity trap," they argue, convinces consumers not to consume and businesses not to borrow. The resulting combination of slack demand and falling prices creates a pernicious cycle that cannot be overcome by the ordinary forces that create growth, like savings or investment.

2013-03-25 The Little Bank That Did. by Dan Ariely of Dan Ariely Blog

Over the last few years, I’ve had some harsh words for bankers, banks, and the culture of the industry. In truth, I could have said worse, and it would have been justified.

2013-03-25 Congress Avoids a Government Shutdown; Up Next, the Debt Limit by Andy Friedman of The Washington Update

Congress cleared another hurdle last week, passing a bill (a “continuing resolution”) to keep the federal government operating for six months past its current funding deadline of March 27.

2013-03-25 The Hook by John Hussman of Hussman Funds

At the 2000 peak, Richard Russell observed "Every bull and bear market needs a hook.’ The hook in a bear market is whatever the bear serves to keep investors and traders thinking that everything is going to be all right. There is always a hook."

2013-03-25 Energy: Perilous Present, Promising Future by Milton Ezrati of Lord Abbett

For oil and gas, an era of abundant supplies and lower prices awaits. But investors will have to weather a tricky geopolitical situation before it arrives.

2013-03-25 Voyager by Jeffrey Saut of Raymond James

According to Wikipedia, the Voyager 1 spacecraft is a 1,590 pound space probe launched by NASA on September 5, 1977 to study our solar system and interstellar space. Operating for more than 35 years, the spacecraft receives commands and transmits data back to the Deep Space Network. At a distance of more than 11 billion miles it is the farthest human-made object from Earth and is traveling in a previously unknown region of space. Similarly, the D-J Industrial Average is traveling in a previously unknown region of space as it boldly goes where no man has been before.

2013-03-25 Fed Outlook: Cautiously Optimistic or Just Hopeful? by Scott Brown of Raymond James

The Federal Open Market Committee’s latest policy meeting generated few surprises. The FOMC maintained its forward guidance on the federal funds rate target, which is still not expected to start rising until 2015, and did not alter its asset purchases plans ($40 billion per month in agency mortgage-backed securities and $45 billion in longer-term Treasuries). However, in his press briefing, Bernanke indicated that the pace of asset purchases could be varied as progress is made toward the Fed’s goals or if the assessment of the benefits and potential costs of the program were to cha

2013-03-25 Cyprus Reminds Us of Threats and Improving Global Economy by Bob Doll of Nuveen Asset Management

Equity averages sagged slightly last week. Strength later in the week made up for earlier weakness as the equity rally paused for the Cyprus crisis. We (and the consensus) perceive Cyprus as mainly a local problem and believe it supports our view to remain cautious with Eurozone weightings.

2013-03-25 Housing Recovery Still Young by Brian Wesbury, Bob Stein of First Trust Advisors

Into early 2012, conventional wisdom argued that the odds of a robust housing recovery were lower than the odds of New Mexico and Georgetown losing to Harvard and Florida GC.

2013-03-25 Still Bullish by Richard Golod of Invesco

Global equities (as measured by the MSCI All Country World Index) fell modestly in February amid reignited fears about the euro’s future, signs of distress in China’s economy and the looming sequester deadline in the US. Nevertheless, I believe the US, Japan and emerging markets may offer compelling opportunities, while Europe requires a more selective approach.

2013-03-22 Cyprus Lifts the Curtain by Peter Schiff of Euro Pacific Capital

This week financial analysts, economists, politicians, and bank depositors from around the world were outraged that European leaders, more specifically the Germans, currently calling many of the shots in Brussels and Frankfurt, could be so politically reckless, economically ignorant, and emotionally callous as to violate the sanctity of bank deposits in order to fund a bailout of Cyprus.

2013-03-22 ING Fixed Income Perspectives March 2013 by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

Developed sovereigns are still broadly unattractive, but global central banks appear poised to ease. We prefer EM currencies that will continue to benefit from positive global growth and tolerate further upward pressure on the U.S.

2013-03-22 Happy Clients; Terrified Prospects by David Edwards of Heron Financial Group

Four years ago, on March 9th, 2009, US stocks collapsed to a 12 year low. A financial crisis rooted in overleveraged purchases of junk (or even fraudulent) securities claimed, in quick succession, Bear Stearns, Lehman Brother, Merrill Lynch (forced into a shotgun marriage with Bank of America) and AIG. Investors panicked, selling good securities at deep discounts to fair value.

2013-03-22 Power of Positive Screening: Pursuing Strength of Social and Financial Returns by Chat Reynders, Patrick McVeigh of Reynders, McVeigh Capital Management

Market volatility and sweeping changes to mainstream views of investing are catalyzing acceptance of tactics that combine fundamentals with a progressive outlook on social issues. Positive screening brings balanced companies to the fore of the investment landscape: this practice isolates sound equities that demonstrate strength of balance sheet, dependability of management, and a commitment to act as part of a global community focused on positive change.

2013-03-22 US Stocks: Third Time’s the Charm by Seth Masters of AllianceBernstein

At 1550, the S&P 500 has regained the peak it reached in March of 2000 (when the tech bubble burst) and again in October of 2007 (before the credit crunch hit). But we think the third time’s the charm: We think the stock market still has room to rise because equities are now more attractively valued and of higher quality than they were at previous peaks.

2013-03-22 Deep Value Diving in the Eurozone by Katrina Dudley of Franklin Templeton Investments

Greece’s tale of financial woe may well go down as a modern Greek tragedy, with people in power falling prey to a tragic flaw which brings about their catastrophic reversal of fortune. It’s all quite dramatic and dire, but if the real life Greek financial system stays true to the classical formula, the conclusion means recognition of that tragic flaw and potential course correction. For those hardy and/or contrarian souls who suspect opportunity may be sprouting from Greece’s great mess, this would be good news.

2013-03-22 The Importance of Women Leaders: From Margaret Thatcher to Sheryl Sandberg to Park Geun-hye by Frank Holmes of U.S. Global Investors

I have always admired former British Prime Minister Margaret Thatcher, whose strong leadership and perseverance made her one of the most influential and respected political figures in recent history. She once said of her ability to persevere that she has the “woman’s ability to stick to a job and get on with it when everyone else walks off and leaves it.”

2013-03-22 Insights on India: Land of Paradoxes by Chetan Sehgal of Franklin Templeton Investments

Technology has made it easy for our emerging markets team to stay in contact from nearly every corner of the globe, but electronic communications can’t replace human interaction through a face-to-face exchange of ideas. Twice a year, our 50+ analysts gather together in a single location to share opinions on companies, discuss global events, and conduct a peer review and evaluation. I’ve invited my colleague, Chetan Sehgal, to pen his thoughts on India and why we chose it as the location for our most recent gathering.

2013-03-22 K-Pop Culture by Soo Chang Lee of Matthews Asia

During my last trip to Seoul, I had meetings with several media companies that left me feeling more confident about the strength of Korea’s popular culture as an emerging growth driver for the country. The rapid growth of South Korean pop music, or “K-pop,” across the media and entertainment industries has been helped not only by Korea’s strong culture of social media, but also by a broader and more global breadth of production. Last year’s hit single “Gangnam Style” and accompanying video by artist PSY is one such memorable phenomenon that crossed int

2013-03-22 ECRI’s "Recession" Indicators: Unchanged from Last Week by Doug Short of Advisor Perspectives (dshort.com)

The only new ECRI-related news since last Friday’s update is a CBS Moneywatch commentary, Can the stock market rise while the economy stalls? ECRI liked the commentary well enough to reprint it on the company’s website. It basically reiterates Achuthan’s point in the "Yo-Yo Years" essay that it’s possible for the market to rise during a recession, citing three such instances (of the 15 recessions) since the Roaring Twenties.

2013-03-22 The Success of Central Bank Policy Is Not Measured By The Revenue It Generates by Team of Northern Trust

The success of central bank policy is not measured by the revenue it generates. Cyprus is a small country that could cast a long shadow. The U.S. dollar’s fortune is changing

2013-03-22 In Gold We Trust by Frank Holmes of U.S. Global Investors

Poorly thought out government policies hurt the formation of capital and destroy people’s trust in paper money. Leaders may have good intentions, but some of their actions show disrespect for private property and individualism. This only reemphasizes gold as an important asset class.

2013-03-21 The Constancy of Dividends by Bill Smead of Smead Capital Management

The payout ratio on the S&P 500 Index currently hovers around 30% of the after-tax profits of companies in the indexat the low end of the last 100 years. In comparison, the capital appreciation portfolio here at Smead Capital Management has a payout ratio of 27%. This is important because most studies show that over 40% of the returns provided by common stocks come from dividends over long stretches of time. With those figures in mind, we reasoned that this is a good juncture to remind everyone about our vision of the next ten years as it pertains to dividends.

2013-03-21 Goldilocks Roars by Team of Bedlam Asset Management

Equity markets are producing supra-normal returns. To March 18th, the portfolio is up over 15% year-to-date, over 100 basis points ahead of the index. Many investors would be happy with such a gain over a full year rather than a mere twelve weeks, so are puzzled, the more so as respected pundits agree that the data makes for easy stories of rampant inflation, collapsing government credit and a prolonged global recession. Equity markets, however, are stubbornly refusing to follow the script.

2013-03-21 PMI What Does It Really Tell Us? by Adam Peck of Heartland Advisors

Recently we’ve been seeing positive readings from the Purchasing Managers’ Index (PMI), news that may seem as though it would be good for all stocks. In fact, though, a look at the performance of the S&P 500 and the PMI since 1995 shows that this is not necessarily the case.

2013-03-21 Fed Still Inching Toward Optimism by Brian Wesbury, Bob Stein of First Trust Advisors

The Federal Reserve made no changes to monetary policy today and only some small changes to the language of its statement. Once again, the Fed’s comments were slightly more optimistic about the economy than they were after the prior meeting.

2013-03-20 China’s Next Stop by Frank Holmes of U.S. Global Investors

Would it surprise you to discover that China is planning to add 800 miles to its subway system over the next two years? That’s the distance equivalent to building a network from Dallas to Chicago in less time than the U.S. Congress can resolve a budget!

2013-03-20 Spending Patterns Paint Half Truth by John Browne of Euro Pacific Capital

On March 13th, the Commerce Department announced a 1.1 percent increase in food and services retail sales, doubling a prior Dow Jones survey of economists that forecast an increase of just 0.6 percent. This new data has led to a fresh wave of enthusiastic commentaries that the US economy is set for a strong recovery. Less examined were the underlying factors that supported the increase.

2013-03-20 The Most Important US Economic Number Now by Russ Koesterich of iShares Blog

Wondering about the outlook going forward for the US economy? Russ shares the economic number that may give you a clue.

2013-03-20 Investors Need to Pivot by William Benz of PIMCO

Fixed income investors need to think differently in the current environment. Investors may want to consider pivoting to strategies that are less focused on traditional benchmarks and more oriented to generating income and providing greater flexibility to hedge against rising rates, widening credit spreads or higher inflation.

2013-03-19 Paul Matlack from Delaware Investments on the Direction of the Bond Market by Robert Huebscher (Article)

Paul Matlack is senior vice president, senior portfolio manager and fixed income strategist for Delaware Investments. His firm oversees $145 billion in fixed-income strategies, and in this interview Matlack discusses his outlook for the economy and the bond market, and how advisors should be positioning client portfolios.

2013-03-19 The Eurozone Crisis: Time for a Reset by Giles Conway-Gordon of Cogo Wolf Asset Management

The crisis in the Eurozone (EZ) has reached a dangerously unstable condition, politically, socially, financially and economically. Without a return to growth in the peripheral economies a disorderly outcome is becoming probable as the debtor countries approach the 100% debt-to-GDP default horizon. They will not return to growth while they share a currency with Germany. It is time for a reset.

2013-03-19 Rising Political Risk and Ongoing Economic Weakness Challenge a Difficult Journey to Recovery by Andrew Balls of PIMCO

Looking ahead, it will continue to be a very bumpy journey as we anticipate economic contraction in the eurozone by -0.75% to -1.25% over the next year, hampered by growing political risk and fiscal tightening. Although we expect the pace of contraction in the eurozone to diminish over 2013, the duration of the recession is likely to be longer than consensus forecasts.

2013-03-19 The Outlook for Equities by Howard Marks of Oaktree Capital Management

It doesn’t take much to get me started on a memo. In this case one sentence was enough, in an article from the February 4 online edition of Pensions & Investments, as described by FierceFinance on February 28: “The long-term equity risk premium is typically between 4.5% and 5%.”

2013-03-19 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks had a very quiet week with volumes reaching levels that one associates with holiday trading.

2013-03-19 A Tired Equity Market Crawls Higher by Bob Doll of Nuveen Asset Management

U.S. equities rose again last week as the S&P 500 increased 0.66%, with an overall gain for the year of 9.96%.1 The remarkable resilience of the U.S. economy against fiscal cliff headwinds has boosted equity investor sentiment. The U.S. macroeconomic outperformance has also helped U.S. equities outperform global counterparts. Investor preference toward the U.S. has largely been confirmed by rising flows into U.S. equities.

2013-03-19 Why Are Emerging Markets Struggling in 2013? by Ryan Davis of Fortigent

Despite one of the sharpest rallies in US equities in recent memory, emerging market equities have been left curiously behind in 2013. Through last Friday, the market segment was down 1.0%, compared to an S&P 500 index that was up 10.0%. This seems to violate the regime that investors have gotten used to over the past 10 years, whereby the emerging markets equity index served as a high beta proxy for the US equity market.

2013-03-19 Keeping Up With Changes In Emerging Market ETFs by Jun Zhu of Leuthold Weeden Capital Management

In this report, we highlight benchmark changes in a major player, a potential substitute (with cheaper fees) for another major player, a new player with an innovative weighting scheme and provide an overview of the Emerging Market ETF space available to investors.

2013-03-19 Adios Hugo by Bill O'Grady of Confluence Investment Management

On the afternoon of March 5, the vice president of Venezuela, Nicolas Maduro, announced that President Hugo Chavez, who had led the country since 1999, had died. His death did not come as a great surprise. He had been suffering from cancer for nearly two years. Last year, declaring himself “cured,” he ran for president and won a third term handily. However, by December, he needed additional treatment in Cuba. As he prepared for what proved to be the final round of therapy, he appointed Maduro as the leader of Venezuela in his absence.

2013-03-19 How Strong? by Scott Brown of Raymond James

The recent economic reports have been mixed. The stock market seems to have embraced the strength and ignored the weakness. The bond market typically approaches the information in a more balanced way. How might the differences between the two markets be resolved?

2013-03-19 Gambler’s Fallacy by Jeffrey Saut of Raymond James

“My luck has gotta change” is a famous lament that has buried many a player on the crap tables. But as shown in the aforementioned “coin toss” quote, “The outcomes in different tosses are statistically independent and the probability of any outcome is still 50%.” While that’s true in gambling, it is not so true in the stock market. The fact is, there are certain historic precedents in the stock market that can tilt the odds of success decidedly in your favor.

2013-03-19 Things Could Get Bumpy But Hang in There? by Christian Thwaites of Sentinel Investments

The quality of the Fed’s Flow of Funds data is about as comprehensive a balance sheet assessment of corporate and private America as you could wish for. It’s also great for looking at trends rather than the hot spots over which the market frets. Here are some of the findings:

2013-03-18 M&A and Dividends Likely Drivers of the Market by Charlie Dreifus of The Royce Funds

The sequester adds to the economic headwinds caused by ending the payroll tax holiday and the boost in tax rates. However, even with the sequester, total federal government outlays will rise this fiscal year. Finally, after more than a month of daily increases for a gallon of unleaded gasoline, prices are now declining. This has been of concern as rising oil and gasoline prices were yet another headwind facing the U.S. economy. (Oil prices have also declined.)

2013-03-18 Little Hope for the Government Budget by Charles Lieberman of Advisors Capital Management

The President spoke to Republicans this week to see if they could find common ground to overrule the budget sequester and form the basis for a new agreement over the budget, taxes and government spending going forward. Instead, the meeting crystallized how far apart the two sides are in their vision for a deal. Since there is no budget or broader economic crisis looming, there is nothing to force the two sides into an agreement.

2013-03-18 Finding the Sweet Spot by Mark Kiesel of PIMCO

Where is the investment “sweet spot” in today’s global financial markets? The uneven global growth outlook means there are opportunities and risks for both credit and equity investors.

2013-03-18 Outlook for the Yen by Team of Nomura Asset Management

For several quarters ahead, we estimate that the Yen will remain range bound near the level of PPP (purchasing power parity), which is estimated to be between 90 to 95 Yen/USD. Though currency movements will be affected by various factors, we think the monetary policies of both Japan and the U.S. are the most important.

2013-03-18 Investment, Speculation, Valuation, and Tinker Bell by John Hussman of Hussman Funds

The most important questions investors should be asking are these: what do they know that can be demonstrated to be true; and what do they believe that can be demonstrated to be untrue. It is best to make these distinctions deliberately, lest the financial markets clarify these distinctions for investors later, against investors’ will, and at great cost.

2013-03-18 Don’t Forget About Emerging Market Equities by Russ Koesterich of iShares Blog

While emerging market stocks are underperforming US stocks, Russ explains why longer-term investors may want to give EM markets another look.

2013-03-18 Currencies: A 1970s Flashback? by Milton Ezrati of Lord Abbett

Four decades ago, a currency war and significant Fed easing were followed by a bout of high inflation. Now investors are worried that history could repeat itself.

2013-03-18 UK Budget: No Fiscal Consolidation, but Looser Money Ahead by Darren Williams of AllianceBernstein

We expect little change in UK fiscal policy in Wednesday’s budget. Instead the Chancellor George Osborne may try to nudge the Bank of England towards more aggressive monetary easing, putting further pressure on the pound.

2013-03-18 5 Reasons to Still Like (but not Love) Stocks by David Kelly of JP Morgan Funds

While investors have been justifiably worried that the combination of the big tax hikes of January and the Sequester in March could lead to an economic slump, so far the numbers are reassuring.

2013-03-15 Emerging Markets Equity Commentary by Team of Thomas White International

Emerging market equities saw a moderate correction in February, broadly similar to the rest of the world. Prices reacted negatively to renewed concerns of a worsening European fiscal crisis as the results of the recent Italian elections turned out to be inconclusive.

2013-03-15 Waiting on Weakness? by Mike Boyle of Advisors Asset Management

On Tuesday, March 5, The Dow Jones Industrial Average (DJIA) set a new record close at a level of 14,253.8 (old record of 14,164.5 was set on 10/09/07). Since then it has gone on to set four more consecutive record-closing highs. The S&P 500, at a closing level of 1556.2 on 3/11/13, is still about nine points shy of its record high of 1565.2 (also set on 10/09/07), but it is up seven days in a row and the odds of that occurring are about 1.17%.

2013-03-15 What’s Next, Mr. Finance Minister? by Sudarshan Murthy of Matthews Asia

Every February, India’s federal government releases its annual budget to outline revenues and spending plans. In the years following India’s independence in 1947, when government-owned enterprises dominated the economy, the budget was of utmost importance to market watchers. With the country’s economic liberalization in the early 1990s, the significance of this annual budget process diminished somewhat. However it is still meaningful, and this year’s budget exceeded US$300 billion in expenditures.

2013-03-15 Washington May Be Ready to Take a Break From the Brink by Josh Thimons, Libby Cantrill of PIMCO

With Washington’s dysfunction not in the forefront, the economy could be more unencumbered to grow, with markets trending in a similar direction. The Fed’s proactive policies should continue to favor overweight positions in the five-year through 10-year part of the Treasury yield curve and support interest-rate-sensitive sectors of the economy most notably housing. In the longer term, however, we would advise investors to be cautious: Without meaningful long-term structural deficit reform, real growth will inevitably lag in the U.S.

2013-03-15 High Yield Market Overview by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch U.S. High Yield Master II Constrained Index, posted a positive total return of 0.46% in February, as the high yield market finished on a positive note, after experiencing heightened volatility throughout the month.

2013-03-15 ECRI’s Recession Call: Proprietary Indicators Still Not Cooperating by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose in today’s update. It is now at 129.9 versus the previous week’s 129.5 (revised upward from 129.3). The WLI annualized growth indicator (WLIg) has eased, now at 6.3, down from last week’s 6.4 (an upward revision from 6.2).

2013-03-15 The Big Four Economic Indicators: Industrial Production and Real Retail Sales by Doug Short of Advisor Perspectives (dshort.com)

With the exception of Real Personal Income Less Transfer Payments (e.g., Social Security, Supplementary Security Income, workers compensation, etc.), the Big Four continue to show expansion. The seemingly bizarre income data is the result of the end-of-year strategy of early bonuses and moving forward of 2013 income to avoid higher taxes. We’ve seen this situation before in the 1990s. The PI anomaly is the reason the average for the Big Four (the gray line above) has shows contraction for the past two months.

2013-03-15 Global Economic Overview by Team of Thomas White International

Global economic trends largely remained positive during February, though the stalemate after the Italian elections and the failure by policymakers to reach a deal to avoid the U.S. sequester heightened the political and policy risks. The U.S. GDP figure for the last quarter of 2012 was revised higher, showing the world’s largest economy managed to avoid a decline.

2013-03-15 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Despite exceptionally easy monetary policy, inflation risk remains low. Record stock market levels are boosting consumer spending. U.S. capital spending is poised to be a bright spot this year.

2013-03-15 China\’s Next Stop by Frank Holmes of U.S. Global Investors

Would it surprise you to discover that China is planning to add 800 miles to its subway system over the next two years? That’s the distance equivalent to building a network from Dallas to Chicago in less time than the U.S. Congress can resolve a budget!

2013-03-15 Finally!! Now What? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Surprise! We don’t know what’s going to happen in stocks over the next few weeks. But we are seeing an environment that we believe can foster further gains in the US as economic data remains generally positive, the Fed maintains its accommodative stance, and small progress is being made in the fiscal realm. Investors concerned about a pullback may want to hedge their portfolios, but maintain adequate exposure to equities.

2013-03-14 Excess Liquidity Finds a Home by Scott Minerd of Guggenheim Partners

U.S. home prices appear likely to continue to rise as the Federal Reserve injects more liquidity into the system. Given housing’s unique characteristics, this will have positive effects for consumption and growth.

2013-03-14 Tightening the Noose: Can the SEC and Its New Chairman Be Tougher on Wall Street? by Team of Knowledge @ Wharton

Although the SEC has always been the federal government’s chief guardian of integrity in the financial markets, critics have a long list of grievances, including claims that the agency is too unsophisticated and too soft on wrongdoers. Assuming she is confirmed as the new SEC chairman, Mary Jo White will need almost superhuman skills to make the SEC more effective. Can she -- or anyone, for that matter -- accomplish this?

2013-03-14 Global Currency Battles: A Waiting Disaster or a Win for All? by Team of Knowledge @ Wharton

To many, Japan’s recent moves to devalue the yen looked like the spark that could ignite a global currency war -- a series of competitive devaluations that, last century, helped plunge the world into the Great Depression. Until now, central bankers have been resisting the urge to politicize exchange rates. However, while currency skirmishes can be dangerous and require monitoring, they are also necessary for establishing equilibrium in markets and will help in the global economic recovery, some experts say.

2013-03-14 3 Reasons It's Not Too Late to Consider Emerging Market Bonds by Russ Koesterich of iShares Blog

After the recent rally in emerging market bonds, is it too late to allocate to this asset class? Not for long-term investors, says Russ and he offers 3 reasons why.

2013-03-13 Who Cares if There's a High-Yield Bond Bubble? by Gary Halbert of Halbert Wealth Management

High-yield bonds, or "junk bonds" as they are widely known, have received a lot of attention in recent months. Is there a high-yield bond bubble? Certainly a ton of new money has gone into high-yield bond funds over the last few years. Millions of Americans who would have never considered high-yield bonds have bought in due to near zero returns on traditional savings vehicles.

2013-03-13 Some Stunning Demographic Trends in Employment by Doug Short of Advisor Perspectives (dshort.com)

I spent much of yesterday reviewing the latest employment report from the Bureau of Labor Statistics (BLS). They have a wealth of employment data, much of which stretches back to 1948. My focus was the Labor Force Participation Rate (LFPR) with some specific attention to gender and age. The LFPR is a simple computation: You take the Civilian Labor Force and divide it by the Civilian Noninstitutional Population. The result is the participation rate expressed as a percent.

2013-03-13 Argentina on Sale by John Mauldin of Millennium Wave Advisors

(From Cafayate, Argentina) There are some who worry whether the path that Argentina has taken to monetary ruin on multiple occasions (and that it seems intent on taking again) is one that the US may also find itself on. That worry has crossed my mind a few times, I must confess. Today we will look at Argentina more in depth. From a monetary perspective, it deserves attention. And once again there will be opportunity.

2013-03-13 Taking Stock in the U.S. by Team of Franklin Templeton Investments

Is it time to take stock in the U.S. market? Equities started the year strong as the U.S. economy sidestepped the worst-case fiscal cliff scenario and continued showing signs of improvement despite global economic uncertainty. In fact, the Dow Jones Industrial Average reached a record high in early March. While there are still a number of possible issues that threaten to derail the market, Grant Bowers, portfolio manager of Franklin Growth Opportunities Fund, believes economic resilience in the United States is encouraging news for stocks, and investors have taken notice.

2013-03-13 Yield Opportunity in a Low Yield Environment by Troy Johnson of Westcore Funds Denver Investments

The Fed’s aggressive monetary policy teamed with its inability to jump-start the anemic economic growth pattern has challenged investors’ quest for yield entering 2013. We offer investors the following for consideration as they seek yield in this environment.

2013-03-12 Bill Ackman on What Makes a Great Investment by John Heins (Article)

In addition to commenting on his high-profile current investments, Pershing Square Capital's Bill Ackman in a recent interview with Value Investor Insight describes the general company traits he looks for in both active and passive investments, why a high public profile is an important element of his strategy, whether his thesis on J.C. Penney has evolved, what lessons he's learned from a few prominent mistakes, and why his short conviction on Herbalife is as high as ever.

2013-03-12 Gundlach: Investors are asking the Wrong Question by Robert Huebscher (Article)

If you're trying to assess the Federal Reserve's so-called exit strategy from quantitative easing, then you're asking the wrong question, according to Doubleline's Jeffrey Gundlach. Quantitative easing is a permanent policy tool, he said, and investors should be asking what that means for their investment strategy.

2013-03-12 Finally, a Jobs Report Worth Reading by Chris Maxey, Ryan Davis of Fortigent

Surprisingly, the February employment report showed a labor market growing at a reasonably healthy rate. Concerns that the sequester would spill into the broader economy have yet to materialize and if recent trends hold, the economy may finally be approaching a point of robust and sustainable job growth.

2013-03-12 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks rose each day last week as the notion of a ho-hum global economy was reassuring to those who fear either a recession or a surge in economic activity.

2013-03-12 Pacific Basin Market Overview February 2013 by Team of Nomura Asset Management

Monthly returns for February 2013 were somewhat mixed, but the Pacific Basin regional markets generally ended in positive territory this month. Outside of Asia, political instability in Italy and concerns that the Federal Reserve might begin to scale back its monetary stimulus in the U.S. led to weaker investor sentiment. Economic data from China was weak, largely due to the effect of the Chinese New Year.

2013-03-12 The Plow Horse is Trotting by Brian Wesbury, Bob Stein of First Trust Advisors

In October 2012, we raised our recession odds from 10% to 25%. We saw an increase in uncertainty and fear over the election and the fiscal cliff as having the potential to cause a drop in velocity. Panics (falling velocity) are rare. As a result, our base case (75% odds) was for a 2.5% to 3% increase in real GDP for 2013. Real GDP increased just 0.1% in Q4, but now it appears the Plow Horse is starting to trot a little.

2013-03-12 We Made It. Now What? by Christian Thwaites of Sentinel Investments

What looks like a fairly settled policy in Europe is fast becoming a very dangerous situation, according to Christian Thwaites in his latest "Thought of the Week" -- "We Made It. Now What?" -- adding that the outlook for the world's second largest economic bloc is pretty week.

2013-03-12 U.S. Dominates World Markets for the Trifecta by Douglas Cote of ING Investment Management

While large-cap indices get all the headlines, mid and small caps have continued to excel. Frontier markets have picked up the slack as major emerging markets stumble. Global risks persist, though U.S. fundamentals appear solid. The move toward U.S. energy independence should soon result in a trade surplus, boosting GDP.

2013-03-12 The Retirement Income Problem by Rob Isbitts of Sungarden Investment Research

The most vital and pervasive issue investors will face in the next decade is how to wring out enough income from the savings they have amassed to maintain or enhance their lifestyle. To do so, they will need to be far more flexible in their investment approach. They also must adapt to an environment for "high quality bonds" (Treasuries, Municipals and Corporates) that does not at all resemble that which they are accustomed to.

2013-03-12 The 2030 Increasing Inequality Scenario by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

Last month we started looking at the 2030 alternative world development scenarios as laid out by the National Intelligence Council (NIC). The NIC forecasts the likely paths that are either currently underway or are forecast to occur in the future. In its most recent report, the NIC projects four possible global political and economic states based on expected trends. Last time, we presented the most likely best case scenario. This week, we will explore the third scenario, under which the world gets wealthier as a whole, but inequalities increase.

2013-03-11 Two Myths and a Legend by John Hussman of Hussman Funds

The present market euphoria appears to be driven by two myths and a legend. Make no mistake. When investors cannot possibly think of any reason why stocks could decline, and are convinced that universally recognized factors are sufficient to drive prices perpetually higher, euphoria is the proper term.

2013-03-11 And That's the Week That Was by Ron Brounes of Brounes & Associates

Stocks moved to record highs (Dow Jones) early in the week and never looked back. Some favorable economic data, particularly from labor, renewed investors' confidence and others jumped on as the week progressed to participate in the friendly trend. Even with the spending cuts from sequester threatening to weaken the economy, investors focused more on the present than the future. Though naysayers scoff at the recent moves and claim the economic strength is at least partially artificially Fed induced, their voices have been silenced for now.

2013-03-11 Italy: Welcome to the Bungle by Milton Ezrati of Lord Abbett

Results of the recent election increase the likelihood of a eurozone breakupand disruptions to financial markets.

2013-03-11 The Ambergris Factor! by Jeffrey Saut of Raymond James

Investing is a lot like whaling. Investors are constantly searching for that whale of a stock with the "ambergris factor." And, that is what investors were doing last week at the Raymond James 34th Annual Institutional Investors Conference in Orlando, Florida. In attendance were nearly 800 professional investors that were listening to presentations from CEOs and CFOs of more than 300 companies. As stated, just like the portfolio managers were there looking for stocks with the right stuff, so was I.

2013-03-11 The Job Market: Not As Strong As It Looks by Scott Brown of Raymond James

With headwinds fading, the U.S. economic recovery appeared poised to pick up more substantially in 2013. Unfortunately, fiscal policy is going in the wrong direction.

2013-03-11 Who's Selling And Who's Buying As The Dow Trades In Record Territory? by John Rothe of Riverbend Investment Management

Last week turned out to be another positive week for investors, as the S&P 500 finished the week up 2.2 percent. However, as my regular readers know, I consider the current market risk high, and have been building a case these past few weeks that we will soon be entering a bear market.

2013-03-11 Forecasting Bond Returns in the New Normal by Saumil Parikh of PIMCO

PIMCO has a detailed framework for deriving a forecast for secular bond returns based on our most current expectations of policy rates and the inflation-adjusted (or real) bond risk premium. We start by defining the expected secular real policy rate as the expected average rate of the fed funds rate after adjusting for inflation over the next 10 years.

2013-03-08 Three Trends Will Shake American Businesses Out Of Paralysis by Mike Temple of Pioneer Investments

On-shoring, energy infrastructure reinvestment and plant replacement are three trends in the making that will shake American business out of paralysis. In the last "Bond Deer in the Headlights," I outlined the "Monetary Abolitionists" assertion that out-of-control government spending, made acceptable by historically low interest rates, was responsible for corporate paralysis in investing and hiring.

2013-03-08 Flying High by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

The media has made a spectacle out of the Dow Jones Industrial Average reaching new all-time highs. The Dow Jones Industrial Average and the S&P 500 indices do not include the compounding effect of dividends paid by member companies. Any retiree will tell you that dividends represent a return of capital and useful income in the real economy. If you had reinvested those dividends back in the index as they were paid, the old time highs reached in October of 2007 likely would have been passed some time ago.

2013-03-08 Our Five Year Forecast by Kendall Anderson of Anderson Griggs

We believe that predicting short term swings in the market is an exercise in humility. Longer-term market predictions can have some value, but they should be based on a form of valuation methodology of the underlying securities which make up the market of choice, and a consideration of the current mood of the market participants should also be included.

2013-03-08 The Hustle of Hong Kong by Colin Dishington of Matthews Asia

The strength of the retail environment in Hong Kong has been well documented, but the scale of shopping malls sprawling through large parts of the city is somewhat staggering. In the more central districts, product offerings tend to cater to the high-end crowd with luxury international brands apparent on every street corner.

2013-03-08 ECRI "Recession" Update: Lakshman Achuthan Stands his Ground by Doug Short of Advisor Perspectives (dshort.com)

The big news this week is the ECRI's Chief Operating Officer and spokesman, Lakshman Achuthan, returned to the media circuit with interviews yesterday on Bloomberg, CNBC and Yahoo's Daily Ticker. In addition, ECRI has published a new commentary available to the general public.

2013-03-08 How Cash Could Point to More Upside for U.S. Stocks by Adam Peck of Heartland Advisors

Investors remain concerned about dwindling bond yields but still aren't rushing headlong into stocks, notwithstanding their recent market highs. We thought it might be interesting to take a look at the difference between the cash earnings yield of U.S. stocks (as represented by the MSCI U.S. Stock Index) and the yield being paid by intermediate-term investment grade corporate bonds. In looking at historical data, cash earnings yield can be a good proxy for free cash flows and an indicator of a company's financial strength.

2013-03-08 Spasmodic Stupidity: The Wile E. Coyote Congress by Cliff Draughn of Excelsia Investment Advisors

I predict the Ides of March will find us in a continued sequestration, and Congress will use the time between now and the debt ceiling deadline on March 27th to debate the merits of true tax reform as opposed to governing by crisis. In the end, though, the reform conversation will revert to governance by crisis, with another stop-gap measure to avoid government shutdown during Holy Week and Easter, which will tide us over to the elections of 2014. Do you expect any different?

2013-03-08 Labor Policy Needs to Help, Not Hinder Employment. by Team of Northern Trust

Labor policy needs to help, not hinder employment. The U.S. employment report surprised on the upside. Watch the shadows behind China's official credit measures

2013-03-08 How to Keep Calm and Invest On by Frank Holmes of U.S. Global Investors

The market noise of today will not be going away. However, investors can gain confidence in the following wisdom of the crowd. As famous investor Benjamin Graham said, "The individual investor should act consistently as an investor and not as a speculator. Keep calm and invest on.

2013-03-07 Mexico Breaking Good? by Kenneth Rogoff of Project Syndicate

Mexico is enjoying a manufacturing boom that has boosted its exports to the US after a long secular decline. With China's wages soaring and rising oil prices driving up shipping costs, production in Mexico is suddenly looking much more attractive, even taking security concerns into account.

2013-03-07 When Will the Music Stop? by Scott Minerd of Guggenheim Partners

The investment environment is in transition, with uncertainty around policy moves contributing an increasing amount of uncertainty for asset prices.

2013-03-07 Guanxi, Mianzi, and Business: The Impact of Culture on Corporate Governance in China by David Smith of Aberdeen Asset Management

There are two key cultural and sociological issues of particular importance when evaluating Chinese companies: guanxi (relationships and networks) and mianzi (face). When analyzing the potential of a Chinese company, it's important to understand how guanzi and mianzi affect transactions, board composition and deliberations, and shareholder engagement, among other issues.

2013-03-07 Transatlantic Trade's Transformative Potential by Mohamed El-Erian of Project Syndicate

A "Transatlantic Trade and Investment Partnership" between the US and Europe has the potential to transform global trade and multilateral organizations to the benefit of all. But this opportunity could be squandered, owing to the short-term mindset that now encumbers the West and the multilateral organizations that it dominates.

2013-03-07 Animal Spirits: F.I.R.S.T. by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

Call it what you will a dog-eat-dog world in which you're wearing Milk-Bone underwear or an example of capitalism at its finest an M&A cycle is heating up. This activity may be signaling the rebirth of what British economist John Maynard Keynes originally referred to as "animal spirits", much to the delight of fictional corporate barbarian Gordon Gekko and his real-life analogues, who require little prompting to act on Keynes "spontaneous urge to action".

2013-03-07 Freewheeling? by Dimitri Balatsos of Tesseract Partners

Ignoring threatening clouds in the distant horizon, the financial markets are wrapped in a blanket of complacency. Consider the following. The Dow Jones Index has been flirting with the 2007 record peak. Implied stock market volatility, as measured by the VIX Index, is in the basement. Junk bond yields are at record lows, compressing spreads to within shouting distance of risk-free Treasuries. Securitization is back from the dead, while the drought in M&A activity is now getting plenty of rainfall.

2013-03-07 New Highs by Team of Janus Capital Group

The Dow Jones Industrial Average closed at a new record high the first week of March, breaking its previous closing high reached in October of 2007. The new record is symbolic more than anything else, but it still has some positive implications for equity markets.

2013-03-07 Capex Revival by Francis Gannon of The Royce Funds

For some time now, we have been noting the defensive nature of the investment environment, one in which fear and uncertainty continue to be the major forces driving markets. Interestingly, this trend has held true for both investors and corporations alike of late. Even after a powerful move from the low of last November, for example, investors remain fearful about cyclical or economically sensitive sectors while at the same time embracing those very sectors that benefit from easy money, are defensive by nature, and are supposedly riskless.

2013-03-07 A New Chapter for Turkey? by Frank Holmes of U.S. Global Investors

In 2012, Turkey was the best performer among the emerging markets we track on our Periodic Table showing a decade of returns. All developing countries rose last year, but stocks in Turkey climbed an astounding 56 percent.

2013-03-07 Three Dimensions of Discipline by Team of Franklin Templeton Investments

As New Year's resolutions fade into guilty memories, it's a bitter reminder that maintaining discipline, in life and investing, is just plain hard. Despite best intentions, bear markets can tempt investors to sell everything, while bull markets can whip people into a buying frenzy, both courses of action that rarely end happily.

2013-03-07 US Manufacturing Restores Competitive Vigor by Joseph Carson of AllianceBernstein

The US manufacturing sector has repeatedly figured out how to reinvent itself when faced with competitive threats. In recent years, American companies have become much leaner, regaining an edge in global markets that should lead to a bigger role in economic growth.

2013-03-07 After the Dow Record Close: What Comes Next? by Russ Koesterich of iShares Blog

After Tuesday's record setting Dow Industrials close, are US stocks still cheap? Can the market move higher? Russ answers these questions and more.

2013-03-06 U.S. Sequester: How Significant is it for the Global Economy? by Team of Thomas White International

Since the U.S. has been one of the brightest spots in the current global economic environment, any negative development that restricts activity in the U.S. could have a magnified impact on the economic prospects for the rest of the world.

2013-03-06 A New Yen for Japan by Team of Janus Capital Group

In Japan, a little inflation could go quite a long way. After stepping down six years ago, Prime Minister Shinzo Abe returned in November with a platform promising to put an end to the deflationary cycles that have plagued Japan for decades.

2013-03-06 How Big a Problem will the Sequester be for the U.S. Economy? by Sam Wardwell of Pioneer Investments

Having dodged the fiscal cliff and postponed the debt ceiling deadline, Congress decided to let the spending sequesters happen. Will the result be to throw the economy into recession or cause an economic catastrophe? We don't think so, and neither does Congress.

2013-03-06 An Infinite Amount of Money by John Mauldin of Millennium Wave Advisors

The three major blocs of the developed world are careening toward a debt-fueled denouement that will play out over years rather than in a single moment. And contrary to some opinion, there is no certain ending. There are multiple paths still available to Europe and especially the US, though admittedly none of them are bright and carefree.

2013-03-05 Breaking Free from the Safe Withdrawal Rate Paradigm: Extending the Efficient Frontier for Retiremen by Wade Pfau (Article)

The traditional safe withdrawal rate approach that relies on a portfolio of only stocks and bonds produces among the worst possible outcomes for meeting spending needs and preserving financial assets for other uses. My research demonstrates there is a better approach.

2013-03-05 What Economists can Learn from Downton Abbey by Robert Huebscher (Article)

Economists warn that the U.S. economy could be heading toward one of two catastrophes: the two-decade long stagnation that has befallen Japan, or the hyperinflation that struck Zimbabwe and the Weimar Republic. Such cautionary tales alert policymakers to the failed efforts of their predecessors. But the most relevant comparison is rarely cited – to Great Britain in the 1920s, as depicted in the highly popular PBS series Downton Abbey.

2013-03-05 Selecting Truly Active Equity Funds by C. Thomas Howard, PhD (Article)

In a recent Advisor Perspectives article, Joe Tomlinson reported evidence showing that 401(k) plan sponsors add value in selecting funds, but their risk-adjusted alpha is not enough to beat a comparable index portfolio. Tomlinson then pointed out the need for additional research to help advisors improve upon the fund selection process. As a step in this direction, I will report on research conducted by my firm and other academics.

2013-03-05 Understanding the Risk in Bonds by Charles Lieberman of Advisors Capital Management

Treasury bond prices rallied this past week, as sequestration promised to act as a drag on growth, while a very messy election result in Italy also pushed safe haven investors into Treasuries. Both factors are likely to be short lived insofar as they support bond prices. Interest rates are likely to head higher even with Fed policy likely to remain highly accommodative. Initially, longer maturity bond prices will decline and the yield curve will steepen.

2013-03-05 Japan: Brave New Policies from Japan? by Team of Thomas White International

Time to Shine Again: After two decades of failed policies and stagnant economic growth, Japan is embarking on a bolder monetary policy under its newly-elected Prime Minister Shinzo Abe.

2013-03-05 Weave a Circle Round Us Thrice by Christian Thwaites of Sentinel Investments

There was plenty of news to threaten the recent market rallies but, as of writing, we're within a whisper of all time highs in US stocks and managing to have a very orderly consolidation in bonds. This is surprising because the political process has once again taken careful aim and shot itself in the foot. The sequester has become the dumb answer to difficult questions and will initiate, mostly indiscriminate, across-the-board cuts.

2013-03-05 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks drifted last week, buffeted by concerns over Europe due to the Italian elections and worries here at home as the "dreaded" sequester begins to take effect.

2013-03-05 Is Now the Time to Diversify? by Chris Maxey, Ryan Davis of Fortigent

The use of global diversification in constructing client portfolios has come under fire in recent years due to the underperformance of many risk assets. Traditionalists who stuck to their familiar S&P 500 and BarCap Aggregate Bond index blends generally outperformed their diversified peers in 2011 and 2012, as historic risk premiums failed to materialize and various alternative investment strategies faced headwinds.

2013-03-05 Absolute Return Letter: Expect the Unexpected by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners

With real interest rates being negative in many countries we expect low returns on both equities and bonds going forward. Many investors have responded to that by allocating more and more of their assets to passive strategies such as ETFs. We believe it is the wrong approach for this type of environment.

2013-03-05 The Sequester: A Second Quarter Worry by Russ Koesterich of iShares Blog

Now that March 1 has come and gone, what will the sequester mean for the US economy and markets? Maybe not much in the near term, but Russ explains why the second quarter will be a different story.

2013-03-05 Currencies: The Winds of War by Milton Ezrati of Lord Abbett

In this conflict, the collateral damage could include asset bubbles and accelerating inflation.

2013-03-05 The Magic of Compound Interest by Jeffrey Saut of Raymond James

When compound interest works in your favor, it is a blessing. When it works against you, it's a curse! That is a "Jeffreism" I learned the hard way back in the bear market of the early 1970s when I was working for a $100 per week in this business and consequently had my credit cards levered to the "max." The interest rate at the time was 18%.

2013-03-05 No Rest for the Wicked by Scott Brown of Raymond James

With headwinds fading, the U.S. economic recovery appeared poised to pick up more substantially in 2013. Unfortunately, fiscal policy is going in the wrong direction.

2013-03-04 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

The sky is falling. The sky is falling. It's the millennium all over again. (How did those fears work out?) With politicos unable to reach any agreement on the budget (taxes), the "dumb, arbitrary" spending cuts began to take effect to the tune of $85 billion this year. (So much for a military preparedness.) Though the impact on the economy will not be felt overnight, some areas will begin to suffer sooner than others and biz/consumer confidence could become an issue in the near future.

2013-03-04 Living in the Past: Investors Finally Putting Away the Rear-View Mirror? by Liz Ann Sonders of Charles Schwab

With a very strong January in the books for stocks, and hefty inflows into stock mutual funds, are we finally seeing the investor class become believers?

2013-03-04 Is Congress About to Cause a Major Economic Slowdown? by John Rothe of Riverbend Investment Management

The fiscal cliff, sequestration, higher taxes, and a pending budget debate may be too much for overly optimistic investors to handle. Volatility has started to rise and the market is looking weaker:

2013-03-04 Federal Government Employment, Tax Exemption and the Drought by Gregg Bienstock of Lumesis

This week we focus very briefly on the sequester and Federal government employment and then revisit a subject that has faded but has the potential to reappear this Spring and Summer (the drought) and conclude with a quick look at housing prices. Well, as expected (how awful that this is what I've come to expect from our elected officials), the can was kicked down the road.

2013-03-04 Out On A Limb - An Investor's Guide to X-treme Monetary and Fiscal Conditions by John Hussman of Hussman Funds

Massive policy responses, directed toward ineffective ends, are scarcely better than no policy response at all. A look at the current monetary and fiscal policy environment, as well as more effective policy initiatives, and why they make sense.

2013-03-04 Forecasting Bond Returns in the New Normal by Saumil Parikh of PIMCO

PIMCO has a detailed framework for deriving a forecast for secular bond returns based on our most current expectations of policy rates and the inflation-adjusted (or real) bond risk premium. We start by defining the expected secular real policy rate as the expected average rate of the fed funds rate after adjusting for inflation over the next 10 years.

2013-03-01 What Are The FOMC Minutes Telling Us? by Zach Pandl of Columbia Management

The release of the minutes of the January Federal Open Market Committee (FOMC) of the Federal Reserve (Fed) caused a tremor in the bedrock of investor euphoria last week. The minutes confirmed that the cost/benefit analysis of quantitative easing (QE) is at center of policy debate right now. However, the minutes did not provide a definitive signal that the program may be cut short. In particular, it is not clear where Chairman Bernanke and Vice Chair Yellen stand. I believe the level of debate slightly raises the odds that QE will end this year.

2013-03-01 Wait for Your Pitch in Today's Market by John West of Research Affiliates

Great hitting in baseball depends in part on waiting for the right pitch. In today's market, most asset classescoming off their impressive 2012 recordare "high and outside" the valuations necessary for future big league returns. Patience is the name of the game today.

2013-03-01 Health Is Wealth: Health Care Spending As An Emerging Market Growth Engine by Amit Bhartia, Alvaro Pascual of GMO

Amit Bhartia and Alvaro Pascual, members of GMO's Emerging Markets Equity team, write to institutional clients in a new white paper about the correlation in emerging markets between public healthcare spending and domestic consumption.

2013-03-01 Ten QE Questions by Nouriel Roubini of Project Syndicate

Most observers regard unconventional monetary policies such as quantitative easing as necessary to jump-start growth in today's anemic economies. But questions about the effectiveness and risks of such policies have begun to multiply as well.

2013-03-01 ProVise Bullets by Ray Ferrara of ProVise Management Group

With the battle over sequestration going on in Washington, the President has made it clear he wants to raise more revenue. Just what does he have in mind? First, he would like to limit itemized deductions beginning at the 28% tax bracket. This means that taxpayers in the top three brackets would lose some of the benefit of their itemized deductions. Of course, these deductions have a phase out, so the effect may not be as great as is perceived.

2013-03-01 Seeking a Fixed Income Fix by Team of Franklin Templeton Investments

While governments worldwide continue to struggle with debt and budget issues, for the most part, corporations have turned lemons into lemonade and have become lean and mean. While not without risk, corporate credit actually looks to be in fairly good shape, according to Eric Takaha who, as senior vice president and portfolio manager of Franklin Strategic Income Fund spends a good deal of time analyzing the space.

2013-03-01 ECRI "Recession" Update: Proprietary Indicators Slip Again by Doug Short of Advisor Perspectives (dshort.com)

ECRI adamantly denied that the sharp decline of their indicators in 2010 marked the beginning of a recession. But in 2011, when their proprietary indicators were at levels higher than 2010, they made their recession call with stunning confidence bordering on arrogance.

2013-03-01 The Big Four Economic Indicators: Real Personal Income Less Transfer Payments by Doug Short of Advisor Perspectives (dshort.com)

I've now updated this commentary to include the January Personal Income data, the red line in the chart below. As expected, the January brought the inevitable reversal of the dramatic advance in the November and December data, which was a result of moving income forward to manage the tax risk in anticipation of the Fiscal Cliff. The -4.7% decline in January essentially cancels the 1.4% rise in November and 3% rise in December.

2013-03-01 There Are More Sellers Than Buyers in the World Economy. by Team of Northern Trust

There are more sellers than buyers in the world economy. The recent Italian election may usher in renewed instability. US bank lending is finally expanding, but not everyone is happy about it.

2013-03-01 Global Volatility by Josh Thimons of PIMCO

The Fed's new communication strategy may, in fact, be a more sensible policy prescription than calendar rate guidance. We expect increased market volatility, particularly around economic data releases. Investors with an understanding of the Fed's now increasingly transparent reaction function will find opportunities to profit in the volatility markets. According to our model of the Feds reaction function, presently every .25 of a percent unexpected change in the unemployment rate is likely to lead to roughly an 11 basis point change in the five-year Treasury yield.

2013-03-01 3 Reasons Market Volatility Has Returned by Russ Koesterich of iShares Blog

In the last week, stocks have pulled back and volatility has once again spiked. Russ outlines the 3 factors that hindered the rally and explains the implications for investors.

2013-03-01 Ed Jamiesons Quick Take on U.S. Sequestration by Ed Jamieson of Franklin Templeton

Overall we are not that concerned about the sequester as it relates to the financial markets. From the research weve seen, if left in place, the sequester could provide a drag on the economy of about half a percent throughout the rest of the year. The markets themselves seem to suggest the economy can grow through sequestration.

2013-03-01 Is China's Health Care on the Mend? by Sherry Zhang of Matthews Asia

Despite the many challenges facing Chinas health care sector, I believe the recent initiatives and the markets continued growth could create many future investment opportunities in areas ranging from medical device manufacturing, insurance, pharmaceutical and a range of general and specialized care facilities.

2013-03-01 One Chart May Explain Why Gold Stocks Are Lagging Bullion by Frank Holmes of U.S. Global Investors

It may be time for certain gold stocks to shine, writes Bryan Borzykowski in a Canadian Business article this week. He highlights many of the issues that have come to the surface over the past few years, including the bad decisions made by management, capital cost increases, and the birth of the gold bullion exchange traded fund.

2013-02-28 What Italy's Election Result May Mean for the Markets and Your Investment Portfolio? by Team of Thomas White International

Global equity and bond markets have reacted sharply to the outcome of Italy's elections on February 24-25. The poll result is inconclusive, with no clear winner. And apparently, Italians have voted against the austerity measures and reforms that are widely believed to have improved international confidence in Italy last year.

2013-02-28 Jeremy Siegel on Why Stocks Are -- and Will Remain -- the Best Bet by Team of Knowledge @ Wharton

Though stock market volatility continues to rattle investors' nerves, the future looks bright for equities in the U.S. and many emerging markets, according to Wharton finance professor Jeremy Siegel. That's not so for bonds, which could become money-losing investments as rising interest rates drive bond prices down. In an interview with Knowledge@Wharton, Siegel says that investors should think about reducing their bond holdings, buying more stocks and keeping just enough cash for a rainy day and other liquidity needs, since interest rates on cash are near zero.

2013-02-27 Understanding the Sequester by David Kelly, David Lebovitz of J.P. Morgan Funds

A recent survey conducted by The Hill found that only 36% of likely voters even knew what the term "sequester" meant. For the record, sequester in our current fiscal lexicon, refers to the $1.2 trillion of spending cuts spread out over the next 10 years that are set to commence on March 1, 2013. These cuts have the potential to impact both the markets and the economy. Although time still remains for a deal to be reached, it seems increasingly unlikely that this will actually occur, making it more likely that the effect of these spending cuts will be felt, at least temporarily.

2013-02-27 Specializing in Tax-Friendly Investment Strategies by Jim Tillar, Steve Wenstrup of Tillar-Wenstrup

Since the turn of the century (2000) investors have not had to think much about tax-friendly investment strategies due to two major bear markets. But times have changed. The stock market is near all-time highs and many, if not all, of investors' loss carry forwards have been used up. More importantly, the Obama administration has already raised tax rates on the wealthy and the outlook is for tax increases to broaden as part of the solution to taming our debt and deficit problems. The bottom line is that investors need a new strategy for this environment.

2013-02-27 Potential Threats to Equity Rally by Chris Maxey, Ryan Davis of Fortigent

Equity markets started a third consecutive year in rather impressive fashion, gaining more than 6% to date. With so much optimism in the investment community, it is always worth keeping an eye open for risks possibly overlooked. By now, it is apparent that investors are increasing their exposure towards equities with arms wide open. Data from the Investment Company Institute (ICI) estimates $39 billion flowed into equity mutual funds this year through February 13. Following outflows of $153 billion in 2012, the sudden reversal has been impressive.

2013-02-27 Is This Market "For the Birds"? by Jerry Wagner of Flexible Plan Investments

Last week, the stock market hit one of those gusts of headwind that seemed to stop the 2013 rally in its tracks and push it backward. When that happens, as it is again today, it is like watching the gull traverse just a few feet in front of us on the beach. What happens in the short run can be progress or retreat.

2013-02-27 The Rising US Dollar - What It Means To The Economy And To Investors by John Rothe of Riverbend Investment Management

Earlier this week, we saw a spike in the US dollar. After months of being stuck in a sideways trading pattern, the US dollar is starting to aggressively move upward. Global investors are starting to allocate to dollars. While the US has its own problems, the dollar is still the strongest currency in the world and is viewed by many as a safe haven.

2013-02-27 Rational Temperance by Bill Gross of PIMCO

While the market was indeed moving in the direction of "dot-com" fever three to four years later, the Dow Jones Industrial Average at the time was a relatively anorexic 6,000, and the trailing P/E ratio was only 12x. For a central bank that was then more concerned about economic growth and inflation as opposed to stock prices, risk spreads, and artificially suppressed interest rates, the Chairman's query made global headlines, became a book title for Professor Robert Shiller and a strategic beacon for portfolio managers thereafter.

2013-02-27 The Healthcare Blues by John Mauldin of Millennium Wave Advisors

It has been some time since we peeked into my worry closet. A few questions this weekend prompted me to think about things I am paying attention to but have not written about, and one thing that I am not worried about at all, despite the apparent media hysteria.

2013-02-27 ING Fixed Income Perspectives February 2013 by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

Despite its diminutive size, February has been a whirlwind. Eat and drink too much on Fat Tuesday, be reminded of our corporeal nature on Ash Wednesday, receive a sappy Hallmark card on Thursday, and cap it all off with a memorial for a bunch of ex-presidents on Monday. Unfortunately, the next several weeks don't appear to offer any relief from this calendar whiplash.

2013-02-27 Pew: Americans Have Little Will to Cut Spending by Gary Halbert of Halbert Wealth Management

The Pew Research Center released a new national poll on Friday and the results are quite surprising. As the March 1 deadline for a possible budget sequester approaches, the new Pew survey finds limited public support for reducing spending for a wide range of government programs, including defense, entitlements, education and health care.

2013-02-27 Love, Money or Disappointment: What Will Asian Credit Investors Find in Their Red Envelopes? by Robert Mead, Raja Mukherji of PIMCO

Our cyclical economic outlook for Asia in 2013 is unusually dependent on breakthroughs in structural policies. Although we continue to favor select opportunities in key sectors, in general Asian credit spreads are trading historically tight. Bottom-up research is critical, along with careful top-down views on shifting economic conditions, and investors need adequate compensation for taking credit risk. Some sectors and companies can grow significantly faster than their respective economies.

2013-02-27 Ignore the Noise. Equities Offer Income Potential. by Joe Kringdon of Pioneer Investments

Common prospectus disclosure reads, "past performance is no guarantee of future results." Yet, this crowd of naysayers seems to be projecting the paranoia associated with the "lost decade(s)" onto the current environment and beyond. They are preparing for the future by fighting the last few wars all over again. Their sentiments and actions (or inactions) are emblematic of an American looking the wrong way for traffic on a London street. Given wrongfully configured context, these people are looking in the wrong direction for the wrong things. I continue to be positive on the equity markets.

2013-02-27 Singapore A Wise Owl Among Currency Snakes by John Browne of Euro Pacific Capital

As China enters the "Year of the Snake," Singapore stands as a beacon of sound currency in a world gone mad. China's renminbi remains pegged to the US dollar, while even steadfast Switzerland has followed the US, UK, EU, and Japan into an impoverishing strategy of currency debasement. Singapore, alone, has been able to sustain genuine economic growth in the context of a strong national currency.

2013-02-26 Five Ways to Improve Your Investing Decision Making by Robert Huebscher (Article)

Successful investing requires a contrarian mindset; anything else is, at best, a recipe for mediocrity. This is especially true for an investment committee, the core of an advisory firm's decision-making process. Five prominent advisors – Harold Evensky, John Hill, Steve Cassaday, Steve Kaye and Berk Nowak – are embracing unconventional approaches to ensure that their investment committees operate in the most effective ways possible.

2013-02-26 Global Investment Review First Quarter 2013 by Team of Bedlam Asset Management

At the beginning of last year the prospects for capital markets were grim yet the results surprisingly good: positive returns and modest economic growth. The cause was central banks in developed countries acting as a backstop for sovereign and other large debts, through direct purchasing funded by accelerated money printing. This also ensured low interest rates. Subsequently, mountainous debt problems are slowly being tackled, even as they appear to increase.

2013-02-26 Looking For A Reason To Sell-Off by Christian W. Thwaites of Sentinel Investments

Markets were looking for a reason to correct. Risk assets had outpaced themselves since mid November and in the first seven weeks the S&P[1] had outperformed the US Treasury 10-year note by 12% and the 30-year bond by 15%. The markets will lumber through the sequester and face the next test on the debt ceiling and first quarter results. Below the surface, the outlook is mildly optimistic. Why the qualifier? Because everything, in Europe, US and Japan, must be set in the context of the asset deflation and deleveraging going on and that will go on for some years.

2013-02-26 Horse Feathers by Michael Kayes of Willingdon Wealth Management

While wisdom and experience are certainly very important to long-term investment success, I do believe it is also necessary to begin each day with an open mind. Flushing the senses, so to speak, allows new information to be processed through an unbiased filter. In short, markets change, and investment thinking must be adaptable.

2013-02-26 Sudden Discomfort by Scott J. Brown of Raymond James

Minutes of the January 29-30 meeting of the Federal Open Market Committee showed a growing discomfort with the Feds Large-Scale Asset Purchase program (QE3). Thats not all that surprising. Even those who strongly favor the program arent exactly happy with it. However, thats a far cry from wanting to end the program anytime soon. We should learn more this week as Fed Chairman Bernanke delivers his semiannual monetary policy testimony (Tuesday and Wednesday).

2013-02-26 The Postman May Not Ring at All by Paul DiGiacomo of Columbia Management

United States Postal Service is technically insolvent. Last year, the agency exhausted its borrowing capacity and failed to pay $11 billion into its retiree health plan. This year, it will not make a $6 billion contribution. While the current cash balance of $2 billion is sufficient for 10 days of operation, management forecasts a $100 million deficit by October. When payments to employees and suppliers end, so too will the mail.

2013-02-25 We Expect High-Yield Defaults to Remain Low by Jeff Skoglund of AllianceBernstein

High-yield bond defaults are historically low today, even for troubled companies. Despite the worries we hear in some corners about looming high-yield defaults, we think default rates will stay low for at least the next few years. In the wake of the 2008 financial meltdown, US companies did the responsible thing and got leaner, reducing head count and overhead costs aggressively. When the recovery gained traction, they held the line on expensesand profit margins are at historic highs today.

2013-02-25 Fiscal Policy: The Same Old Drag by Milton Ezrati of Lord Abbett

Among the many fears shared by investors, concerns over fiscal drag have recently risen. Though no one yet can know the specifics of Washington's coming compromises, these will no doubt impose the anticipated tax hikes or spending cuts, and these will indeed hold back the pace of economic growth. Still, it would be a mistake to anticipate too much of a shock. The country, after all, has suffered fiscal drag for some years now. Even with failure in Washington, a moderation in cutbacks at the state and local level should allow government overall to offer the economy a measure of relief.

2013-02-25 Market Gains Will be Tougher to Come By by Russ Koesterich of BlackRock Investment Management

Markets saw a return to more volatile conditions last weeka trend that is likely to continue. The sequester is likely to contribute to an increased fiscal drag in the first half of the year. Nevertheless, stocks have the potential for increased gains, although the road ahead will be bumpier.

2013-02-25 Dodging the bullets by Team of Bedlam Asset Management

Although the year is barely a month old there are already signs that the long-awaited rotation out of the perceived safety of bonds and into inflation-proofed equities may have begun. Given the dismally low yields on offer it seems likely that, at the very least, it is the beginning of the end of the bond market bubble. Some of the biggest bubbles in the bond market, and thus most at risk from a sell-off, are in high yield and emerging market debt.

2013-02-25 Tupperware Brands Corp: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This report presented essential fundamentals at a glance illustrating the past and present valuation based on earnings achievements as reported. Future forecasts for earnings growth are based on the consensus of leading analysts. Although with just a quick glance you can know a lot about the company, its imperative that the reader conducts their own due diligence in order to validate whether the consensus estimates seem reasonable or not.

2013-02-22 Emerging Markets Outlook: Will Emerging Markets Continue Their Run in 2013? by Scott Klimo of Saturna Capital

A number of times we have been asked whether emerging markets will continue their run in 2013. Our response typically begins with the following clarification: "Emerging markets" may be a handy way to refer to the countries that constitute a generally recognized asset class, but this group is far from monolithic. Widely differing levels of development, economic drivers, opportunities to invest, and returns exist under the emerging markets umbrella. For this reason it's not entirely correct to imply that "emerging markets" had a run in 2012.

2013-02-22 Uncovering 'Diamonds in the Rough' in Today's Credit Markets by Mark Kiesel of PIMCO

There are still good opportunities for yield and total return in the credit markets, but there has been a shift in where and how investors can find them. A "diamond in the rough" is a credit that is under-covered, or not actively followed or researched by many investors. At PIMCO, we identify these opportunities through our top-down and bottom-up investment process. We've identified a number of sectors that appear poised for above-average growth.

2013-02-22 Frontier Markets: Today's Models of Fiscal Prudence by Paul Herber of Forward Management

Say you are evaluating the markets of two countries in a search for investment growth opportunities. One country's sovereign debt is 120% of its gross domestic product (GDP), while the other has outstanding sovereign debt that represents only 11% of its GDP. Saddled with sovereign debt, the first country faces painful fiscal austerity measures, inflationary ones, or bothany of which will no doubt stifle economic growth.

2013-02-22 Finding What's Real in Real Estate by Team of Franklin Templeton Investments

The U.S. financial crisis in 2008-2009 left many investors with a reluctance to take investment risks, particularly those related to any of the world's wilted housing markets. However, as your local real estate agent would likely tell you, the market in one location can be vastly different than it is in another. Wilson Magee, co-manager of Franklin Global Real Estate Fund would agree that the adage "location, location, location" applies not only to individual home buyers and sellers, but to investors seeking opportunities in the commercial real estate sector, too.

2013-02-22 ECRI "Recession" Update: Proprietary Indicators Slip Again by Doug Short of Advisor Perspectives (dshort.com)

ECRI adamantly denied that the sharp decline of their indicators in 2010 marked the beginning of a recession. But in 2011, when their proprietary indicators were at levels higher than 2010, they made their recession call with stunning confidence bordering on arrogance...

2013-02-22 January 2013 Market Commentary by Andrew Clinton of Clinton Investment Management

The municipal bond market continues to perform well in the face of significant political, financial and economic uncertainty, once again, demonstrating the importance of consistent, competitive tax-free cash flow. Municipal bonds proved to be one of the best performing asset classes during 2012.

2013-02-22 Central Banks Are Factoring Financial Stability into Their Decision Making by Team of Northern Trust

Central banks are factoring financial stability into their decision making. The FOMC is taking a critical look at its asset purchase strategy. Don't look now, but the sequester is coming.

2013-02-22 Is it Time to Review Your European Investment Strategy? by Team of Thomas White International

A sharp equity and bond market reaction is likely expected in response to the outcome of Italy's February 24-25 general elections, several media sources such as THE GLOBE AND MAIL have reported. While the poll result is uncertain, these reports indicate that in the event of a clear victory for Silvio Berlusconi's political party, buying interest in equities and lower-quality debt may be affected.

2013-02-22 The 4 New Defensive Strategies by Russ Koesterich of iShares Blog

Waiting for a market correction? Wondering how to potentially protect your gains? Forget merely opting for traditional defensive sectors. Instead, consider Russ' four suggestions.

2013-02-22 Understanding the Sequester by David Kelly, David Lebovitz of J.P. Morgan Funds

A recent survey conducted by The Hill found that only 36% of likely voters even knew what the term sequester meant1. For the record, sequester in our current fiscal lexicon, refers to the $1.2 trillion of spending cuts spread out over the next 10 years that are set to commence on March 1, 2013. These cuts have the potential to impact both the markets and the economy. Although time still remains for a deal to be reached, it seems increasingly unlikely that this will actually occur, making it more likely that the effect of these spending cuts will be felt, at least temporarily.

2013-02-21 Cracks Appear in the French Economic Model by Darren Williams of AllianceBernstein

Today's PMI data point to a deepening recession in France at a time when Germany is showing tentative signs of life. Is the euro crisis exposing the weaknesses of the French economic model?

2013-02-21 General Dynamics Corp: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of General Dynamics Corp through the lens of FAST Graphs fundamentals analyzer software tool. Therefore, it is offered as the first step before a more comprehensive research effort. Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-02-21 Fed Must Tune in to Changing US Economy by Joseph Carson of AllianceBernstein

With each passing month, more questions are being asked about the sluggish US economic recovery. Why has growth been subdued since the recession ended in mid-2009? What's changed in the economy? How long can loose monetary policies persist before promoting more inflation or creating a new bubble?

2013-02-21 Tapping China's Growth via Dividends by Yu Zhang of Matthews Asia

When the long-term historical performance of global equity markets is considered, investors can see that the contribution of dividends to total return is significant. In this regard, China has been no exception. Between 1999 and 2012, 46% of the total return of the MSCI China Index was derived from dividends received and reinvested. This month, Yu Zhang, CFA, explores the ways in which a dividend-investing approach can be an effective investment strategy in China.

2013-02-21 Gold Miners- Back in the Abyss- An Update by JJ Abodeely of Value Restoration Project

Back on May 18th, 2012 I wrote a piece titled Jumping Into The Abyss: A Bull Case for Gold Mining Stocks. The miners had declined 40% from their August 2011 highs and for a variety of fundamental reasons like valuation and the relationship between mining costs and the price of gold and technical reasons, like sentiment, I felt the case to buy was compelling. The stocks subsequently rallied more than 30% over the following 4-5 months.

2013-02-21 Collateral Damage in the Currency Wars by Scott Minerd of Guggenheim Partners

Global competitive devaluation will continue to cause asset prices to rise in the near-term, but the broader implication of the policies will be increased volatility.

2013-02-20 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

Tick Tick Tick. The President has plans for improving life in America. Tick Tick Tick. Republicans want to fix the middle class (and restricting taxes on the upper class may help). Tick Tick Tick. Earnings reports look good, but forecasts for the current quarter have been lowered. Tick Tick Tick. Weekly jobless claims keep falling, but major corporations are announcing layoffs. Tick Tick Tick. Sales figures show growth, but Wal-Mart and others are worried. Tick Tick Tick.

2013-02-20 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

The single biggest predictor of financial growth is not how much money we have stashed away in secret savings accounts, but how much confidence we feel about a fair return for the deployment of those dollars. In that sense, corporations and individuals alike uniformly adhere to a quid pro quo matrix. Investing must be fair; it must be reasonable; and, win or lose, it must be swathed in aspiration that makes us feel worth making the investment in the first place.

2013-02-20 Trying And Failing To Make The Math Work For Long-Term Bonds by Doug Ramsey, Eric Weigel of Leuthold Weeden Capital Management

For the past 31 1/2 years, owners of 10-year U.S. Treasury bonds have earned "real" total returns of 6.7%on par with the long-term real return to equities. Long before government bonds matched real stock returns, they suffered a 55-year period that offered investors a real return of zero. The short-term implications of higher U.S. Treasury rates on asset allocation decisions.

2013-02-20 Event Driven Investors Receive Their Wish by Chris Maxey, Ryan Davis of Fortigent

For several years, investors have wondered why M&A activity has been so benign.Corporate management teams cited uncertainty about the economic outlook as a primary reason for the depressed activity.With the latest round of tax increases and revenue cuts determined, companies finally appear willing to free their animal spirits and embark on the path of acquisition.

2013-02-20 Taxes: Living Off the VAT of the Land? by Milton Ezrati of Lord Abbett

The country has renewed its conversation about the way it should tax itself, whether to rely on income taxes or replace them with sales taxes. This latest buzz springs from plans by several Republican governors to reduce or eliminate their state income taxes. It has extended to talk about change at the federal level, including speculation about the introduction of a value-added tax (VAT) in addition to existing federal income taxes. Similar proposals surfaced in the 1990s and earlier in this century.

2013-02-20 The 2030 Most Likely Best Case Scenario by Bill O'Grady Kaisa Stucke of Confluence Investment Management

Two weeks ago we started looking at the 2030 alternative world development scenarios as laid out by the National Intelligence Council (NIC). The NIC forecasts the likely paths that are either currently underway or are forecast to occur in the future. In its most recent report, the NIC projects four possible global political and economic states based on these expected trends. Last time, we presented the most likely worst case scenario. This week, we will explore the most likely best case scenario.

2013-02-20 Stock Market Lingers At A Precarious Place by Gary Halbert of Halbert Wealth Management

The Dow Jones Industrial Average has flirted with its all-time high of 14,198 twice in February as the Dow managed to rise above the 14,000 mark but then fell back. The S&P 500 Index is not quite as close to its all-time high, but it is within striking distance. There is widespread optimism that both indexes can break-out to new record highs, which would likely spark a new buying surge.

2013-02-20 Sequestration Will Slow Real GDP Growth But Not Because of Demand-‐Side Effects by Paul Kasriel of Econtrarian, LLC

In my February 5, 2013 commentary "2013 Economic Outlook Bright Sunshine for the U.S., Some Cloud Abroad," I argued that changes in federal fiscal policy have no material impact on total spending on the economy, but rather affect the distribution or composition of a given amount of total spending. The crux of my argument was that other private spending would "crowd in/out" changes in demand emanating from changes in tax and/or government spending policies. In this commentary, I will amend that argument.

2013-02-20 Two New Country Views for a Two-Speed Global Economy by Russ Koesterich of iShares Blog

The global economy is stuck in a two-speed regime: Developed markets like Europe, Japan and the United States are stalling, while China is re-accelerating. Russ explains what this divergent growth landscape means for his country outlooks.

2013-02-19 Tough Times for Classic Value Investors by Laurence B. Siegel (Article)

While the U.S. equity market has performed exceptionally well since its bottom in March 2009, Warren Buffett's Berkshire Hathaway has trailed the index by nearly 6%. Buffett is among a number of prominent classic-value investors who have fared poorly over this period. Over long time horizons, value investing has consistently outperformed growth strategies and the broad market index. So what is causing this recent phenomenon?

2013-02-19 Alan Greenspan on the Market and the Global Economy by Adam Jared Apt (Article)

During his six-decade-long career in financial services, Alan Greenspan was a central figure in seminal events that drove investment markets, from the savings-and-loan crisis to the dot-com bubble to the housing crisis. Now, nearing 87, he rarely speaks in public. But he did so last week, offering his forecasts for the U.S. and European economies.

2013-02-19 Letter to the Editor by Various (Article)

A reader responds to Gary Halbert's commentary, The Economy: Worst Five Years Since the Depression, which appeared on February 13.

2013-02-19 Ketchup vs Cash by John Petrides of Advisors Capital Management

Last week Warren Buffet’s Berkshire Hathaway, along with 3G Capital, bought Heinz (ticker HNZ) for $28 billion, paying a 20% premium to the prior trading day’s closing price (as well as Buffet rewarding himself with preferred stock yielding 9%). Heinz is a mature company trying to reestablish growth by selling ketchup and other condiments in developing countries. However, Heinz is a classic "steady-eddy."

2013-02-19 Expanding the Toolkit for Monitoring Your Equity Managers by Markus Aakko, Andrew Pyne of PIMCO

Investors may want to consider active share when assessing whether and how their active equity managers add value beyond a passive benchmark. The methods for monitoring investment managers are well established. But given the importance of getting portfolio allocation right in a low-growth, low-return world, it's worth examining new ways to assess risk and value added. While tracking error has been held as a key measure for active risk, it may include elements that reflect market conditions rather than managers' actual decisions on risk.

2013-02-19 A Technical Look At The Current Market by John Rothe of Riverbend Investment Management

The S&P 500 Index has been rising consistently this year, leading many to wonder if this is the start of a new long-term bull market. Volatility has been low and market commentary from the financial media continues to be positive. Everything looks great right? Unfortunately, when we dig deeper into the underlying components of the market, we are actually in a high risk environment that may potentially harm investors who are too bullish.

2013-02-19 Sequester and Pension - Two Topics We Can't Get Enough Of! by Gregg Bienstock of Lumesis

This week we take a look at which States may be hit hardest by the imposition of the sequester. We then turn our attention to pensions and focus in on funded status, annual required contributions and just who may be left holding the bag (hint, it is who you think).

2013-02-19 The Siren's Song of the Unfinished Half-Cycle by John Hussman of Hussman Funds

If there is one fatal siren's song of investing, it is the belief that an unfinished half of the market cycle will remain unfinished.

2013-02-19 All is Not Well Down Under by Russ Koesterich of iShares Blog

Though Russ continues to like Australian equities for the longer term, he explains why he may downgrade his near-term view of the Australian market soon.

2013-02-19 On Competitive Devaluations by Scott Brown of Raymond James

Aggressive monetary policy moves in recent years have been accompanied by a growing fear of a currency war. In a currency war, or competitive devaluation, countries attempt to weaken their currencies to boost exports, but each devaluation leads to counter devaluations. That's not what's going on now. However, whether a country is purposely devaluing its currency or is merely pursuing accommodative monetary policy is irrelevant, the consequences are the same. The recent meeting of G-20 finance ministers and central bankers highlights the lack of coherent policies to boost growth.

2013-02-16 Seeing the Forest by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Equity markets continue to be resilient and investor confidence is elevated in various sentiment indices, suggesting a near-term pullback is possible. But there are longer-term trends developing that give us hope that the US economy's expansion and market's rally are sustainable. Federal spending cuts via the "sequestration" appear sure to happen, but there will continue to be debates about the nature and size of the cuts. Similarly, questions are increasing as to the potential unwinding of current Fed policy with regard to timing and rapidity.

2013-02-16 Euro Relief: The Epic Fail That Wasnt by Team of Franklin Templeton

What a difference a year makes! Early in 2012, the eurozone appeared to be on life support and market prognosticators were busy weighing the odds of a breakup. At the time, the proposition that European stocks would actually post a positive performance for the year seemed almost absurd, but of course thats just the sort of fertile environment value-hunters such as Philippe Brugere-Trelat like. Brugere-Trelat found select opportunities in Europe that were ripe for the picking. While the debt crisis in Europe is far from over, he thinks the picture looks brighter for Europe this year.

2013-02-16 In the Year of the Snake, Where Will Copper Head? by Frank Holmes of U.S. Global Investors

With an improving global economy and Chinas new leadership ramping up projects, will base metals, such as copper, head higher?

2013-02-16 How To Remain Solvent Longer Than The Market Is Irrational by Team of F.A.S.T. Graphs

I believe it is extremely important that investors focus on the value of what they own more than they do on the day-to-day machinations of price volatility. However, I also believe, and even recognize, that very few investors are capable of ignoring volatile stock price movements. When the price of a stock that they own is rising or falling, especially when the swings are large and/or violent, it is very difficult for people to maintain a steady head and hand. Instead, emotions take over reason which often cause otherwise rational investors to make irrational decisions.

2013-02-16 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The recent energy dividend is not likely to last. Crafting a single monetary policy for Europe is challenging.

2013-02-15 High Yield Market Overview January 2013 by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch U.S. High Yield Master II Constrained Index, posted a positive total return of 1.38% in January, as the high yield market continued to rally into the new year.

2013-02-15 International Equity Commentary January 2013 by Team of Thomas White International

International equity prices sustained the uptrend in January, helped by data releases that supported the growing optimism over healthier global economic growth. Though the U.S. and U.K. economies declined unexpectedly during the fourth quarter of last year, the pace of growth improved in several Asian countries, including China, during the period.

2013-02-15 ECRI "Recession" Update: Propietary Indicators Take a Pause by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) slipped fractionally in today's update. It is now at 129.6 versus the previous week's 130.2.The WLI annualized growth indicator (WLIg) also eased, now at 8.3, down from last week's 8.9. WLIg has been in expansion territory since August 10th of last year, but is is fractionally off its interim high set last week.

2013-02-15 ProVise Bullets by Ray Ferrara of ProVise Management Group

So, what is the top tax bracket next year? For couples with earnings over $450,000, it is 39.6%. Oh, no. We're sorry. It's potentially another 1.19% which is the amount that is added to the marginal rate due to the cut-backs in itemized deductions. Therefore, the top tax rate is 40.79%. Oh, no. We're sorry. You could also lose your personal exemptions, which will add as much as another 1.05%, so the top tax bracket is 41.84%. Oh, no. We're sorry. We forgot the Medicare surtax on high wage earners of 0.9%, making the top tax bracket 42.74%. Oh, no. We're sorry.

2013-02-15 All is Not Well Down Under by Russ Koesterich of iShares Blog

Though Russ continues to like Australian equities for the longer term, he explains why he may downgrade his near-term view of the Australian market soon.

2013-02-15 Thailand: Land of the Smiles by Mark Mobius of Franklin Templeton Investments

China and India may be Asia's largest economies, but they aren't the only countries with growth potential on the continent. Southeast Asian countries can also offer compelling investment opportunities. Thailand, known as the land of the smiles because of the expression its natural beauty and friendly people inspire, is a country where we believe the economic prospects could give investors reasons to smile too.

2013-02-14 Is Inflation Around the Next Corner? Then What? by Pete Sorrentino of Huntington Funds

As the Federal Reserve Board reiterates its intention to keep interest rates near zero into 2015, it appears that the markets and many investors are growing complacent about inflation. Ever since the Financial Crisis of 2007-08, "headline inflation," as measured by the Consumer Price Index (CPI), has stayed low so far. Although it has threatened to break out at times, economic weakness has restrained the price growth that underlies inflation.

2013-02-14 Pacific Basin Market Overview January 2013 by Team of Nomura Asset Management

Improving expectations for global economic growth underpinned a solid start to 2013 for the Asia Pacific equity markets. In Asia, interest focused on China, as economic data showed further signs of recovery. On the other hand, the depreciating Japanese yen drew concerns that Asia's main exporters, which include Korea and Taiwan, will become relatively less competitive. The MSCI AC Asia Pacific Free Index including Japan gained 3.0% while the MSCI AC Asia Pacific ex Japan Free Index closed 2.6% higher during the month.

2013-02-14 How Not to Run a Pension by John Mauldin of Millennium Wave Advisors

For all the focus on the unfunded liabilities of Social Security and Medicare, there is another unfunded crisis brewing, and this one is in your own back yard. It's coming to you even if you live outside of the US; it just might take a little longer to get there. I wrote ten years ago that state and local pension funds might be underfunded by as much as $2 trillion. It turns out that I was being overly optimistic. New government research suggests that the figure might be as high as $3 trillion. But what if you take into account that retirees are living longer?

2013-02-14 Pressure Points: Where Tax Reform Can Be Most Effective by Team of Knowledge @ Wharton

The deficit deal that averted the fiscal cliff crisis at the start of the year raised taxes on the wealthiest and postponed -- for two months -- government spending cuts that threatened to derail the economic recovery. But the problem remains: Spending far exceeds revenue. So what's to be done? Five Wharton faculty members offer their views.

2013-02-14 A Bold New Direction for Japan\'s Economy by Team of Knowledge @ Wharton

Newly elected Prime Minister Shinzo Abe wants to take Japan's economy in a daring new direction to end 20 years of stagnation and deflation. His policies resemble past efforts -- but with far more firepower behind them. That means even looser monetary policies and a sharp rise in government spending to boost demand. Some analysts say it's just the medicine Japan needs and, on the spending side at least, the opposite of what Europe and the U.S. are doing.

2013-02-14 Emerging Markets Consolidate After Last Year's Gains by Team of Thomas White International

After the strong relative performance towards the end of last year, emerging market equities settled with moderate gains during the month of January as global investor sentiment remained optimistic. Global economic data continue to be mostly positive, sustaining the trend from the second half of last year.

2013-02-13 Our Job: Whether; Market's Job: When by Bill Smead of Smead Capital Management

Warren Buffett describes the stock market's purpose as being "a wonderfully efficient mechanism for transferring wealth from the impatient to the patient". We are reminded of this by a series of news reports and commentaries on subjects greatly influenced by basic economics. In today's missive, we consider what the law of supply and demand says about China, oil, and housing in the USA.

2013-02-13 Trading Secrets: And All Our Yesterdays by Tad Rivelle of TCW Asset Management

Markets work. Not because they are perfect, but because they self-correct. Inherent to their functioning is the ability for buyers and sellers, borrowers and lenders, to freely express their predilection to engage in commercial transactions as proxied by the price mechanism. This is all utterly basic. So, why are the capital markets in general, and the credit markets in particular, not to be trusted to operate without the price and quantity guidance of the Federal Reserve? I

2013-02-13 Global Economic Overview January 2013 by Team of Thomas White International

Global economic trends continued the moderate positive momentum from earlier months and helped sustain investor sentiment in January. The unexpected decline in U.S. economic output for the fourth quarter of last year was mostly due to a sharp fall in government spending and a smaller inventory buildup, while consumer and business spending exceeded forecasts. Also, recent data suggest that U.S. labor market gains during last year were better than earlier estimates.

2013-02-13 The Economy: Worst Five Years Since the Depression by Gary Halbert of Halbert Wealth Management

While the many facts and figures below are disappointing, even depressing, Americans need to know the truth about the real state of our economy and our union. Consider what follows as a rebuttal to President Obama's speech tonight. Feel free to forward this to as many people as you wish.

2013-02-13 January Retail Sales: Why Stocks May Be Vulnerable by Russ Koesterich of iShares Blog

When the Commerce Department releases the headline January retail sales number on Wednesday, economists expect to see a big drop from December. Russ explains why the number could come in even lower and the implications for investors.

2013-02-13 It's Time To Take Advantage Of Rising Energy Prices by John Rothe of Riverbend Investment Management

Oil prices have been on the rise again as we enter a period of the year that is historically strong for the energy sector. While markets continue to be a bit overbought, investors should not yet panic at rising oil prices. Since last summer, oil prices and the market have been closely correlated. What had been viewed by consumers as a "tax" in the past, is now viewed as a sign of increasing demand for gas due to economic expansion.

2013-02-12 The Milton Friedman Centenary: One Hundred Years of Surprisingly Little Solitude by Laurence B. Siegel (Article)

Milton Friedman was once a lonely voice for capitalism in a collectivist era, and seemed doomed to a hundred years of solitude. Instead, he arguably became the preeminent public intellectual of the hundred years that followed his 1912 birth.

2013-02-12 Ten Minutes that Uncovers What’s Really Important to Prospects by Dan Richards (Article)

It can be incredibly hard to get prospects – and even some clients – to let down their guard and talk openly about what really matters to them. That's why a 10-minute Priorities Exercise is an essential tool. Using a list of 20 possible priorities as a starting point, the exercise quickly homes in on the most important issues in people's lives in a comfortable, unobtrusive fashion.

2013-02-12 Consumers Less Enthused to Bail Out the Economy by Chris Maxey, Ryan Davis of Fortigent

Following recent recessions, it was commonplace to rely on American consumers to bail out the economy. The reliance on the American consumer was widely understood as the best remedy for an ailing economy. We are not as fortunate this time around and our dependence on consumers is one reason for the sluggish rate of recovery since 2008.

2013-02-12 Iran's Blues by Bill O'Grady of Confluence Investment Management

When the last U.S. troops officially left Iraq on December 17, 2011, it seemed Iran was the big winner. Iraq was being ruled by a Shiite coalition. Its military was weak and no longer a threat to Iran. Along with its ally in Syria and its proxy Hezbollah in Lebanon, there was growing talk of a "Shiite Arc" that ran from Iran to the Mediterranean Sea. Although Western sanctions were in place, Iran had become adept in working around them.

2013-02-12 Sticking to a Long-Term Plan The Folly of a Short-Term Focus by John Buckingham of AFAM

It was an up and down week, though it managed to end in the black for just about all of the major market averages, save for the Dow Jones Industrial Average. Of course, the big headline on CNBC.com after Friday’s close was, "Dow Logs First Weekly Loss in 2013." That’s fine by us, as we were happy with the 0.5% or so gains posted for the week across our four newsletter portfolios!

2013-02-12 Currency Wars? What Currency Wars? by Christian Thwaites of Sentinel Investments

There's much talk of currency wars right now. We think they're way overblown. The source of the problem lies with Japan, which has made explicit a strategy to lower the yen, increase domestic demand and increase inflation. It needs to do all three. The twenty year old balance sheet recession and deflation in Japan has been a costly error in targeting inflation and not much else.

2013-02-12 High Yield Opportunity in a Crowded Space? by Mike Temple of Pioneer Investments

We have seen something interesting unfold over the last month in the markets signs of what we believe are the beginning of a Treasury breakout. Yields are starting to push through levels that have been fairly stable and steady over the last year. Our observation would be that we are starting to see a more secular move out of U.S. Treasuries and other high quality fixed income assets.

2013-02-12 The Budget Outlook Why the Hysteria? by Scott Brown of Raymond James

President Obama will deliver his fifth State of the Union Address on Tuesday evening. These speeches tend not to be of much significance for the financial markets, although the topics discussed may be important for certain industries (healthcare, energy, defense). Obama is expected to repeat his request that the sequester, due March 1, be postponed to next year. Doing so would not result in less deficit reduction. Such a move would have to be "paid for" through an increase in tax revenues and cuts in other forms of spending. However, it would limit the economic damage that would follow.

2013-02-12 Don't Just Do Something, Sit There. by Jeffrey Saut of Raymond James

"Don't Just Do Something, Sit There" is the title of a book written by Sylvia Boorstein. I was reminded of the title when I received the following email from a financial advisor at another firm last week...

2013-02-11 Investment Insights: Companies at a Crossroads by Ron Sloan of Invesco

Despite a lack of corporate earnings growth in 2012, a surge of investor confidence boosted US stocks. But we don't believe that type of market rally is sustainable for the longer term. Looking ahead, we expect the market environment to be tougher in 2013 as companies face a crossroads: continue to hoard cash at the long-term expense of future growth, or reinvest in their business at the shorter-term expense of profit margins?

2013-02-11 Distracting Dividends by John Petrides of Advisors Capital Management

With interest rates at historic lows, bonds have become a difficult place to find income (although paradoxically, in 2012, asset flows into bond mutual funds have outpaced that of stock mutual funds yet again), so investors have looked to other assets for yield, most notably high dividend paying stocks. Stocks continue to be attractively valued relative to fixed income and cash. In addition, high dividend paying stocks offer investors the ability to grow the income to help offset inflation, whereas in bonds, the income is fixed.

2013-02-11 Brazil: Infrastructure Push Creating New Opportunities Across Sectors by Team of Thomas White International

Both corporates and the federal government have started investing heavily on overhauling Brazil's infrastructure.

2013-02-11 Solving the Profitability Puzzle by Vadim Zlotnikov of AllianceBernstein

Companies around the world enjoyed especially high profit margins in late 2012. But can this trend be maintained or is profitability poised for a collapse that might threaten stocks this year?

2013-02-11 Shall We Dance? by John Hussman of Hussman Funds

My impression is that the worst investment outcomes have typically followed appeals to the idea that "this time is different," and "you've got to dance as long as the music is playing."

2013-02-11 When to Worry About Inflation by Russ Koesterich of iShares Blog

Though the Fed continues to flood the US economy with money, Russ explains why inflation isn't likely to be a problem until 2014 and what investors can do in the meantime to prepare.

2013-02-11 Stocks: Why "Risk On" Rules by Milton Ezrati of Lord Abbett

Investors appear to believe the equity market will muddle through its many challenges.

2013-02-11 And That's the Week That Was by Ron Brounes of Brounes & Associates

With folks in the Northeast finally returning to normalcy following Superstorm Sandy's impact in October, a "potentially historic" blizzard threatened the region with predicted disruptions to businesses, schools, travel, etc. Though New England is expected to catch the brunt of the damage, forecasters are calling for up to 20 inches of snow in New York City. For now, NYSE Euronext does not anticipate anything but "business as usual" at the NY Stock Exchange as contingency plans are well in place.

2013-02-11 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Earnings continued to roll in which combined with higher dividends in many cases continued to support stock prices.

2013-02-08 High-Yield Bonds: Tackling the Tough Questions by Ivan Rudolph-Shabinsky of AllianceBernstein

With high-yield bonds at record high prices and interest rates so low they're barely visible in some parts, investors have a lot of anxious questions. Our opinion: we think high-yield bonds still offer more income and fare better in rising rate environments than other bond types.

2013-02-08 The Year in Review: 2012 by Richard Bernstein of Richard Bernstein Advisors

Politicians crave the spotlight, but it is unfortunate that investors watch the show. 2012, like 2011, was another year in which Washington theatrics scared investors. As a result, investors largely missed out on above average equity returns. Corporate profits and valuations, and not Washington, continue to be the primary drivers of equity returns. We think there are several important points to consider when reviewing 2012 performance, and when structuring portfolios for 2013.

2013-02-08 World War C: Neosho Capital On The Currency War by Chris Richey of Neosho Capital

This summer, Brad Pitt will star in a new film called "World War Z", an action-horror film about a post-zombie apocalypse Earth, hence the "Z" in the title. Zombie films are not our cup of tea at Neosho (we thought the genre was dead), so it is debatable whether we will see this film, but one thing is clear to us, we are perched on the precipice of "World War C", where "C" stands for "currency".

2013-02-08 ECRI "Recession" Update: Leading Index Growth Sets Another Interim High by Doug Short of Advisor Perspectives (dshort.com)

First a flashback for those of us who have followed ECRI's media appearances: we know that the company adamantly denied that the sharp decline of their indicators in 2010 marked the beginning of a recession. But in 2011, when their proprietary indicators were at levels higher than 2010, they made their recession call with stunning confidence bordering on arrogance...

2013-02-08 Investing In a World of Make Believe by John Browne of Euro Pacific Capital

In recent years, a high degree of economic, financial, and political uncertainty has resulted in acute volatility in stocks, real estate, commodities and precious metals. I believe that another aggravating factor has been the increasing skepticism through which the investing public views government statistics and statements.

2013-02-08 A More Savvy Insurance Market by Tarik Jaleel of Matthews Asia

During my last visit to Hong Kong, I attended a conference to discuss various opportunities in financial services along with industry experts and executives from both Asian and global institutions. The key theme that emerged from the event was how Asia is typically viewed as the world's primary growth market in this important sector, particularly given the slowdown in Europe and the regulatory environment in the U.S.

2013-02-08 A Different Playbook by Equity Investment Team of Janus Capital Group

Asia's handset market is developing quite differently than in Europe or the U.S., creating an entirely different playing field for Apple and other handset makers. Major brands are being challenged by the rise of cheap, but very capable generic smartphones. If major brands cannot innovate above and beyond the new offerings of these emerging cheap smartphones, they will not be able to command the high prices, and corresponding high profit margins, that have underpinned their success.

2013-02-08 Out With the Dragon In With the Snake by Frank Holmes of U.S. Global Investors

Over 2013, we expect the Chinese government to continue its accommodative efforts, which should reinforce the equity rally. In addition, the new pyramid of power is focused on growth, as it seeks to improve and reform policies that will provide its residents with opportunities and social security, increase incomes and raise standards of living, which should encourage domestic consumption. Growth is set to be considerable over the next several years.

2013-02-07 Commodities: Correlating Trends with Opportunities by Mark Mobius of Franklin Templeton Investments

Commodity price inflation is both a social and an economic issue. In emerging markets in particular, food and energy costs take a deeper slice out of consumers' income, which can lead to the type of unrest that causes governments to topple. In addition to the potential impact of extreme weather on food supplies, central banks around the world are printing a flood of money, which could lead to inflated prices for other goods and services.

2013-02-07 Investing in the Robot Revolution: Part 2 by Catherine Wood, Michael Shavel of AllianceBernstein

From manufacturing to services, a step change in automation is underway. Investors will want to get a share of a market that could be worth $400 billion by 2020 but, more than ever, they will need to be well advised.

2013-02-07 Complacency in a Leaderless World by Joseph Stiglitz of Project Syndicate

In the last 25 years, we have moved from a world dominated by two superpowers to one dominated by one, and now to a leaderless, multi-polar world. While we may talk about the G-7, or G-8, or G-20, the more apt description is G-0. We will have to learn how to live, and thrive, in this new world.

2013-02-07 Investing In a World of Make Believe by John Browne of Euro Pacific Capital

In recent years, a high degree of economic, financial, and political uncertainty has resulted in acute volatility in stocks, real estate, commodities and precious metals. I believe that another aggravating factor has been the increasing skepticism through which the investing public views government statistics and statements.

2013-02-07 From QE to Queasy: Fiscal Policy and the Risk of Inflation by Jason Hsu of Research Affiliates

Quantitative easing does not directly cause inflation. Rather, by enabling the government to issue low-cost debt, it fosters undisciplined spending, says Jason Hsu, CIO of Research Affiliates, LLC in this commentary. This spending, in turn, generates inflation, transferring wealth from future taxpayers to the current generation. Hsu argues that Americans are more likely to follow the European model of insufficient saving than to imitate the Japanese practices of private sector belt-tightening, high savings rates, and international lending.

2013-02-07 Investing in a Low-Growth World by Jeremy Grantham of GMO

This quarter I will review any new data that has come out on the topic of likely lower GDP growth. Then I will consider any investment implications that might come with lower GDP growth: counter intuitively, we find that investment returns are likely to be more or less unchanged a little lower only if lower growth brings with it less instability, hence less risk. Finally I will take a look at the reaction to last quarter's letter, specifically about my outlook for lower GDP growth.

2013-02-07 We Have Met the Enemy, and He Is Us by Ben Inker of GMO

If modern portfolio management has a single defining urge, it is almost certainly diversification. We look for diversifying assets, strategies, and managers. A thoughtful investor can argue against almost any asset class stocks, bonds, hedge funds, private equity, commodities, you name it but arguing against diversification is like arguing against indoor plumbing. I dont want to sound like I'm calling for a return to chamber pots and outhouses, so I'm not actually going to argue against diversification.

2013-02-06 The Job Market Data and the Fed by Scott Brown of Raymond James

Nonfarm payrolls fell by 2.8 million in January before seasonal adjustment, that is. Adjusted, payrolls advanced 157,000, about as expected. However, annual benchmark revisions showed a more rapid pace of job growth over the last two years a pace at odds with the Household Survey data. How might the Fed view the range of job market data?

2013-02-06 Focus on Fixed Income by Steve Van Order of Calvert Investment Management

Last week Administration officials, including the President, clearly ruled out using extraordinary legal measures to avoid defaulting on Treasurys financial obligations in the absence of a debt ceiling hike by Congress. The two legal measures most discussed, going back to the summer 2011, were invoking the 14th Amendment and minting a trillion dollar platinum coin. The coin idea was dismissed as Fed officials commented that the central bank would not honor the coin as a deposit, and the amendment idea has been shelved a number of times.

2013-02-06 GDP Report Tanks - Is A Recession Looming? by Gary Halbert of Halbert Wealth Management

We will cover a lot of ground today. We begin with a new report from Goldman Sachs which argues that the US economy will remain the strongest in the world for many more years. The report rebuts claims that America is a nation in decline. Quite the contrary, say Goldman analysts who claim that there is a growing"awarenessof the key economic, institutional, human capital and geopolitical advantages the U.S. enjoys over other economies."

2013-02-06 Where Will Home Prices Rise the Most? Check the Law. by Adam Artunian of John Burns Real Estate Consulting

Inventories have plummeted in Western markets over the last year, helping to spur robust price growth. Our home price index (below) shows just how much price appreciation has occurred (the index is 5+/- months more current than Case Shiller and removes the mix-shift bias).

2013-02-06 What Happens When the Fed Loses Money by Zach Pandl of Columbia Management

The Federal Reserve's exit from ultra-easy monetary policy still looks very far offby most accounts, rate hikes will not begin for more than two years and asset sales for even longer. However, the exit strategy could matter for markets well before that point. Fed officials have said that they will consider the costs and risks associated with quantitative easing (QE) when deciding how long to continue their purchases, and one factor they will be looking at will be whether the program could "complicate the Committee's efforts to eventually withdraw monetary policy accommodation."

2013-02-06 The Good, the Bad, and the Greek (Risks) by John Mauldin of Millennium Wave Advisors

Greece is a small country with large implications. Last week we began to explore what I learned from my recent trip to Greece. In this week's letter we will finish those observations and in particular look at some of the comments from my meetings with over 40 people: owners of small businesses and large ones, billionaires, taxi drivers, politicians, central bankers, investors, ex-patriots, wives, and mothers. I believe we can arrive at some small understanding of the problems Greece faces. Then we will consider the broader consequences for Europe.

2013-02-06 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Earnings have come in pretty well, but the news on the economy remains dreary despite the cheerleaders in the financial media.

2013-02-05 Apple the Next Microsoft…We Could Be So Lucky by Keith C. Goddard, CFA (Article)

Investors' fears over a sluggish future for Apple's stock are misplaced. Even as Apple's business succumbs to the same economic forces that humbled Microsoft a dozen years ago, the future for Apple's stock is vastly more hopeful.

2013-02-05 Letters to the Editor by Various (Article)

A reader responds to Joe Tomlinson's article, Predicting Asset Class Returns: Recommendations for Financial Planners, which appeared last week, and another reader responds to Dan Richards' articles.

2013-02-05 Why Cash Kills by Charles Lieberman of Advisors Capital Management

Many investors remain in cash, earning nothing, out of fear that the rally in the stock market may be unsustainable or that such issues as the fiscal impasse or Europe's fiscal problems may yet start another meltdown. But while they remain focused on potential adverse developments, they suffer from the near zero interest rate they are earning on cash. Even in today's low inflation environment, such investors are experiencing a persistent erosion in the purchasing power of their capital, which will impair their ability to grow their portfolios in the future.

2013-02-05 Australia in the Asian Century by Team of Thomas White International

Early in 2011, The Economist magazine ran a cover story titled 'The Next Golden State.' The title, incidentally, referred to Australia. Today, Australias citizens enjoy some of the highest standards of living anywhere in the world. With a real income of $62,000 per person in 2012, the country ranked 13th worldwide. Five of the ten best livable cities in the world are in Australia. But, for all its advantages, the country's contribution to the world economy in absolute terms is small. It accounted for just over 1 percent of world GDP in 2011.

2013-02-05 In Uncertain Environment, Jobs Grow Tepidly by Chris Maxey, Ryan Davis of Fortigent

For the 35th consecutive month, private payrolls registered positive growth. It was hardly the robust report economists would prefer, but the labor market continues to mend. However, there are still plenty of reasons to be concerned, especially with sequestration on the horizon.

2013-02-05 Dividend Growth Continues to Impress by Mike Boyle of Advisors Asset Management

The S&P 500 posted a very solid price appreciation of 5.14% (total return of 5.18%) for the month of January which marks its best January since logging a total return of 6.25% in January 1997 (16 years). However, it does pale in comparison to the best January of the last 50 years which saw the S&P 500 return 13.47% in January 1987. Perhaps equally noteworthy, but clearly not garnering as many headlines, is the continued impressive growth of dividends.

2013-02-05 The 2030 Outlook by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

Over the next several weeks we will look into the more distant future, to the year 2030. We will explore the long-term strategic alternative world development scenarios as laid out by the National Intelligence Council (NIC) and present our views regarding the developments. The NIC forecasts the likely paths that are either currently underway or are forecast to occur in the future. The NIC projects four possible global political and economic states based on these expected trends.

2013-02-05 2012 Equity Market Market Year in Review by Natalie Trunow of Calvert Investment Management

Equities started the year strong as global inflation remained tame, and aggressive, accommodative monetary policy by central banks around the globe helped equity markets rally hard off their lows posted in the fall of 2011. Continuously improving U.S. economic data, strong corporate earnings, and policy steps toward mitigation of the sovereign debt crisis in Europe also provided support for the equity markets worldwide.

2013-02-05 Fourth Quarter 2012 Equity Market Review by Natalie Trunow of Calvert Investment Management

With the excitement of the QE3 announcement wearing off in the fourth quarter, market participants refocused on the less-than-stellar earnings season in the U.S. and uncertainties surrounding the U.S. presidential election and impending fiscal cliff, while the negative impact of Hurricane Sandy further dampened investor sentiment. Despite a double-dip recession in the eurozone, there was some progress on the European policy front and China's economy continued to show signs of stabilizing, which helped international stocks outperform their U.S. counterparts.

2013-02-05 Eurozone: Divorce, Italian Style? by Milton Ezrati of Lord Abbett

The upcoming election may determine whether Italy continues its austerity and reform programs. The fate of the currency union may hang in the balance.

2013-02-05 Currency War or Something Altogether Different? by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners

"Who is afraid of currency wars?" asks Gavyn Davies in the FT. I have known Gavyn for 25 years and have to confess that he is way out of my league intellectually. He is one of the smartest people I have ever met and, thankfully, also one of the humblest. He rarely gets things wrong so, when I occasionally disagree with him, it always makes me slightly uneasy.

2013-02-05 Ditto by Howard Marks of Oaktree Capital Management

Anyone who reads my memos of the last 23 years will see I return often to a few topics. This is due to the frequency with which themes tend to recur in the investment world. Humans often fail to learn. They forget the lessons of history, repeat patterns of behavior and make the same mistakes. As a result, certain themes arise over and over. Mark Twain had it right: "History doesn't repeat itself, but it does rhyme." The details of the events may vary greatly from occurrence to occurrence, but the themes giving rise to the events tend not to change.

2013-02-05 When Is a Small-Cap Fund Too Big? by Bruce Aronow of AllianceBernstein

Asset managers of all types frequently grapple with capacity issues. These questions are even more acute for a small-cap growth manager. Since small-cap stocks are seldom widely held and are thinly traded, it can be tricky to trade quickly when you need to. And growth managers tend to be bigger "consumers" of liquidity, because they're often competing with others to buy companies that are in favor by virtue of their strong fundamental momentum.

2013-02-04 A Gross Underestimate by Jonathan Coleman, Soonyong Park of Janus Capital Group

As we enter 2013, we felt it would be an appropriate time to revisit one of last years most controversial predictions of future equity performance. We acknowledge that equities in general may not continue to deliver the same real rate of return they have over the last century; however, we believe the glum outlook for the asset class forecasted by Bill Gross last year misses the mark. Our estimates of future equity returnsbased on three different approachesall point to a meaningfully higher forecast than Gross' pessimistic prediction.

2013-02-04 2013 Annual Forecast by Clyde Kendzierski of Financial Solutions Group

It's that time again. January will be over by the time you read this which means we are out of holiday excuses or "just ramping up for the new year" reasons for not getting back to work. Having said that, I'd like to offer my excuse for the Annual Forecast getting to you in February instead of the first week of the year. Hand over my heart, we started early this go-round.

2013-02-04 Shifting Sentiment? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Is investor sentiment shifting in favor of equities, which could help to continue the recent rally?

2013-02-04 What's the Best Asset Allocation When the Business Cycle Moves to Stage IV? by Martin Pring of Pring Turner Capital Group

History shows that the business cycle, which has been with us since recorded economic history began, experiences a set series of chronological sequences. The calendar year progresses through seasons, one of which is literally ideally suited for making hay. The business cycle also has seasons or phases, where certain sectors of the economy fall in and out of favor. For investors, the key lies in the fact that the cyclical turning points of bonds, stocks and commodities are all part of the business cycle progression.

2013-02-04 A Look at California, Thoughts on Employment and Why I Worry by Gregg Bienstock of Lumesis

This week we consider recent information and data regarding California, GDP and the employment picture. We also touch on why I worry about the next six months (at least). We conclude with a wrap up of the data imported into DIVER last week and coming road trips. Also, be on the lookout for a Lumesis press release and "Topic of Interest" paper later this week.

2013-02-04 Some Seasonal Blips by Christian Thwaites of Sentinel Investments

We had a week of big numbers last week of which GDP, Personal Income, Durable Goods, the Conference Board's Consumer Confidence, payrolls and the FOMC were the ones that had our attention. We went to print a little earlier this week, so missed the NFPs. But this is what came at us. First GDP. There's a spin to be told but here are the raw numbers with the center column the one that caught markets wrong-footed.

2013-02-04 A Reluctant Bear's Guide to the Universe by John Hussman of Hussman Funds

In recent years, I've gained the reputation of a "perma-bear." The reality is that I'm quite a reluctant bear, in that I would greatly prefer market conditions and prospective returns to be different from what they are. There's no question that conditions and evidence will change, unless the stock market is to be bound for the next decade in what would ultimately be a low-single-digit horserace with near-zero interest rates. For my part, I think the likely shocks are larger, and the potential opportunities will be greater than investors seem to contemplate here.

2013-02-01 Q412 Portfolio Commentary by Jay Compson of Absolute Investment Advisers

While much of the fundamental picture has played out as we expected over the past 18-24 months, the financial markets appear to be concerned solely with the existence or non-existence of macro headlines and events. There seems to be a disconnect between market movements and fundamentals which means doing real work based on intellectual honesty and logic puts you at a disadvantage. Chasing momentum and profiting from central bank market manipulation appear to be the current winning strategies.

2013-02-01 Crystallization at Davos by Scott Minerd of Guggenheim Partners

The euphoria among my fellow Davos attendees was palpable, but short and long-term risks for the world's advanced economies, including competitive currency devaluation, remain concerning.

2013-02-01 Feasting in a Time of Famine: The South African Consumer by Maria (Masha) Gordon, Richard Flax of PIMCO

South Africa's consumer sector has been on a strong run for the past several years, but there are signs the consumer is now coming under pressure. For all the challenges that have faced the South African economy, most listed consumer companies have enjoyed a great run since 2008. However, a combination of factors strong growth in retail sales and credit along with the rise in consumer debt levels and weak employment growth suggest the South African consumer sector may have pulled consumption forward in a way that could prove ultimately unsustainable.

2013-02-01 The Lost Decade...Found? by Jeffrey Bronchick of Cove Street Capital

While much of the fundamental picture has played out as we expected over the past 18-24 months, the financial markets appear to be concerned solely with the existence or non-existence of macro headlines and events. There seems to be a disconnect between market movements and fundamentals which means doing real work based on intellectual honesty and logic puts you at a disadvantage. Chasing momentum and profiting from central bank market manipulation appear to be the current winning strategies.

2013-02-01 Moving the Hurdles by Scott Brown of Raymond James

The ink of my weekly piece was not even dry last Friday, when the House announced that it would vote on a three-month delay in the debt ceiling showdown. Congress now has until May 19 to raise the debt ceiling. So, the most dangerous hurdle has been moved down the track. Other hurdles remain in place.

2013-02-01 The Myth of the Nest Egg by Seth Masters of AllianceBernstein

For decades we've focused on the nest-egg notion as the goal for retirement saving, benchmarking our progress in relation to that lump sum. But it has no context other than probably being the single biggest "paycheck" most of us will ever see. That lump sum may sound great to me, but what does it mean for my spending over 20 or even 30 years without a paycheck?

2013-02-01 Monthly Investment Bulletin by Team of Bedlam Asset Management

Financial discipline is collapsing and with it, trust in the value of money. Many heavyweight thinkers in America, such as Nobel laureate Paul Krugman have suggested that a solution to avoid national debt ceilings imposed by Congress would be to mint a trillion dollar platinum coin. Meanwhile, heavyweights close to policy makers in Britain and Japan have been musing whether their central banks should write-off the mountains of government bonds they have bought recently.

2013-02-01 2 Major Threats Facing the US Economy by Russ Koesterich of iShares Blog

While markets cheered the House of Representatives' recent vote to temporarily suspend the debt ceiling, the US economy isn't out of the woods yet. Russ highlights the two major risks it still faces.

2013-02-01 Fiscal Cliff: Making Decisions in Crisis Part III by Brian Singer of William Blair

The December 31 fiscal cliff was averted, but by the narrowest of conceivable margins. The resolution is consistent with our November analysis, but the narrowness leaves much to be resolved and prolongs uncertainty through March.

2013-02-01 ECRI "Recession" Update: Leading Index Growth Hits Another Interim High by Doug Short of Advisor Perspectives (dshort.com)

ECRI posts its proprietary indicators on one-week delayed basis to the general public, but ECRI's Lakshman Achuthan has switched focus to his company's version of the Big Four Economic Indicators I've been tracking for the past several months. See, for example, this November 29thBloomberg video that ECRI continues to feature on their website. Achuthan pinpoints July as the business cycle peak, thus putting us in at the beginning of the eighth month of a recession.

2013-02-01 The Big Four Economic Indicators: Nonfarm Employment by Doug Short of Advisor Perspectives (dshort.com)

Note from dshort: This commentary has been revised to include the latest Nonfarm Employment data released today.... Nonfarm Employment rose 0.12% in January, following 0.15% and 0.18% gains in December and November, respectively. The Year-over-year increase is 1.52%. Nonfarm employment has been the tortoise of the Big Four, slow and steady. The average MoM change over the past 12 months has been 0.13%, and the range has been 0.07% to 0.20% -- no contractions.

2013-02-01 The Biggest Loser by Peter Schiff of Euro Pacific Capital

For the past few generations Switzerland has enjoyed some of the strongest economic fundamentals in the world. The country boasts a high savings rate, low taxes, strong exports, low debt-to-GDP, balanced government budgets, and prior to a few years ago one of the most responsible monetary policies in the world. These attributes made the Swiss franc one of the world's "safe haven" currencies. But in today's global economy, no good deed goes unpunished.

2013-02-01 Weekly Economic Commentary by Team of Northern Trust

Is the world engaged in a currency war? Januarys job report had some pleasant surprises, but more progress is needed. Purchasing managers surveys suggest growth in the US, retreat for Europe

2013-02-01 A Gross Underestimate by Jonathan Coleman and Soonyong Park of Janus Capital Group

The glum outlook for the asset class forecasted by Bill Gross last year misses the mark. Our estimates of future equity returnsbased on three different approachesall point to a meaningfully higher forecast than Gross pessimistic prediction.

2013-02-01 Look at the Bears! Look at the Bears! by Christine Hurtsellers, Matt Toms and Mike Mata of ING Investment Management

Yes, the grumbling of bond bears is reverberating in Treasury yields, but that sound isnt the death knell of a grizzly; at this point, the closest ursine analogue is Boo-Boo Bear.

2013-01-31 China's Market Ups and Downs by Mark Mobius of Franklin Templeton Investments

China's stock market was a roller coaster in 2012, and those investors with a weak stomach for unpredictability probably found the ride unpleasant. Its true that by many measures last year's weak market performance in China's A share market was disappointing, but in a market of this size the story isn't all good or all bad, so unlike the market masses, I remain confident about China's prospects and continue to search for long-term investment opportunities in China.

2013-01-31 Closed-End Fund Review: Fourth Quarter 2012 by Jeff Margolin of First Trust Advisors

Following a year (2011) when the average closed-end fund was up a respectable 5.37% on a share price total return basis, closed-end funds posted even better performance in 2012, with the average fund up 14.00% (according to Morningstar) on a share price total return basis. The strong performance was broad and deep with many categories posting double-digit total returns. There were many factors which contributed to the strong results posted in 2012 and while I have written and spoken about them before, I want to reiterate them here.

2013-01-31 Credit Supernova! by Bill Gross of PIMCO

They say that time is money. What they don't say is that money may be running out of time. There may be a natural evolution to our fractionally reserved credit system which characterizes modern global finance. Much like the universe, which began with a big bang nearly 14 billion years ago, but is expanding so rapidly that scientists predict it will all end in a "big freeze" trillions of years from now, our current monetary system seems to require perpetual expansion to maintain its existence.

2013-01-31 Making Sense of Low Volatility Investing by Feifei Li of Research Affiliates

Why do low volatility stocks outperform riskier ones over time? Dr. Feifei Li, our Head of Research and my long-time collaborator, has focused on understanding the theoretical foundation underpinning the low volatility anomaly and documenting the strategy's risk-return characteristics in developed and emerging markets. In this issue of Simply Stated, our newsletter focusing on investor education, she summarizes the literature on the low volatility effect as well as provides additional insights from her own research based on an expanded global data set.

2013-01-31 Q4 2012 Letter by Team of Grey Owl Capital Management

During the second half of 2012, central banks turned their massive and coordinated monetary intervention "up to eleven." This is the overwhelmingly dominant economic and market force today. Despite the long-term consequences (which are very real), we believe the central bankers commitment is steadfast. It has and will likely continue to mute both real economic and financial market volatility (at the expense of long-term growth). A deeper analysis of what has changed, our assessment of the impact, and our portfolio response follows.

2013-01-31 Investing in the Robot Revolution: Part 1 by Catherine Wood, Michael Shavel of AllianceBernstein

As robots increasingly take over processes currently performed by humans, we believe that an inflection point in manufacturing automation is imminent. Transport and healthcare will quickly follow, with enormous social, economic and hence investment implications.

2013-01-31 Hasenstab: Little Value in U.S. Treasuries Right Now by Team of Franklin Templeton Investments

The financial markets may have let out a collective sigh of relief on January 1 when U.S. politicians managed to avoid falling off the fiscal cliff, but the fact is the fundamental issue plaguing the U.S. still hasn't been addressed mounting debt. As a result, Dr. Michael Hasenstab, co-director of the International Bond Department and portfolio manager for the Templeton Global Bond Fund, says he doesn't see much value in U.S. Treasuries right now. He does see it elsewhere in the world, though, including Ireland and select emerging markets where fiscal houses appear in much better order.

2013-01-31 A Look Back at My 2012 Calls by Russ Koesterich of iShares Blog

It's time again for Russ K's annual look back at the investment calls he made in 2012. Find out what he got right and the couple of things he got wrong.

2013-01-31 Signs of a Solid 2013 for Stocks by Milton Ezrati of Lord Abbett

Yield spreads versus bonds indicate that stock valuations have considerable upside.

2013-01-31 Elliott's Paul Singer On How Money Is Created ... And How It Dies by Team of TimeCapital

When we launched our series into the US Shadow Banking system in the summer of 2010 we had one simple objective: to demonstrate just how little the process of modern (and by modern we mean circa 2004 not 1981) money creation was understood.

2013-01-30 An Apple's First Worm by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

Writing about Apple is painful. Not because I have lost money in recent months or have no insight to provide, but because the media will likely report on it ad nausea for the next few days. It is perhaps human nature that the news which is most readily produced is also the news that is most easily consumed. If you want to be read, it's best to write words that people will read. While this makes for great entertainment and advertising, it hasn't typically been the best way to get new investment ideas.

2013-01-30 EU Financial Tax Portends Loss of Market Leadership by John Browne of Euro Pacific Capital

Although it was barely noticed by the American press, on January 22nd, EU finance ministers approved a new "Financial Transactions Tax" (FTT) that has implications for market competitiveness around the world.

2013-01-30 Expanding Horizons: The Most Difficult Environment for Generating Income in 140 Years by Ehren Stanhope, Travis Fairchild of O'Shaughnessy Asset Management

In the most difficult environment for generating income in 140 years, we survey the landscape of income-generating options, review lessons from the previous bond Bear Market, and demonstrate why we believe global, dividend-paying equities deserve a prominent role in investor portfolios.

2013-01-29 Predicting Asset Class Returns: Recommendations for Financial Planners by Joe Tomlinson (Article)

Developing reasonable estimates for stock and bond returns requires more than just historical data or the assumptions provided in financial software packages. Inappropriate assumptions can doom retirees to outliving their savings or forgoing a life style they could otherwise afford. There are better ways to forecast, and in this article I'll suggest a few of them.

2013-01-29 Letter to the Investment Committee by Emilio Vargas (Article)

The following is a thousand words on investing that will irritate most every investment professional. Most forms of active portfolio management incur fees, transaction costs and taxes. Whole industries exist due to these costs, and their proponents will argue that they are adding value. In aggregate they cannot; they are all costs. That I am proposing an investment that could take food from the mouths of the children of an army of accountants, brokers and investment professionals will, no doubt, cause them to find flaws in what follows.

2013-01-29 And That's the Week That Was by Ron Brounes of Brounes & Associates

The trend is your friend...so hopefully it will continue for a little (lot) longer. With the uncertainty of the fiscal cliff on the backburner (for now), investors seem to like what they are seeing from earnings season and in the economy. They continued to take stocks higher as the S&P 500 settled above 1500 for the first time in five years and is currently riding a eight session winning streak.

2013-01-29 Emerging Europe: Regional Economic Review 4Q 2012 by Team of Thomas White International

As the 2012 year closed, the emerging economies of Europe joined their cousins in the developed world for their share of woes, and in particular, were impacted by the debt crisis in the Euro-zone, their primary trading partners. Though Russia, the biggest of these economies, finally managed to become a member of the World Trade Organization, the resource-dependent economy recorded slowing growth during the third quarter as both household consumption and state spending expanded at a slower pace.

2013-01-29 How Much Help from Housing? by Alan Levenson of T. Rowe Price

We expect the ongoing recovery in new housing construction from unsustainably low levels to contribute roughly percentage point to real GDP growth this year, and emphasize the risks to the upside of this forecast. Imminent employment growth in housing-related industries will provide an important channel for secondary "multiplier" effects of the housing recovery. Applying recent house price increases to the entire stock of owner-occupied housing overstates their likely wealth effect on consumer spending.

2013-01-29 Investment Basics by Michael Kayes of Willingdon Wealth Management

I've always been curious about how famous people would have done had they pursued completely different careers. Some of our former presidents make excellent examples. For instance, Abe Lincoln towered over his contemporaries. I wonder how he would have fared as a basketball player had the game existed during his life. Our heaviest president, William Howard Taft weighed well over 300 pounds. Had football risen to prominence a few decades earlier, could gridiron greatness have been part of his resume?

2013-01-29 What Budget Problems? by Christian Thwaites of Sentinel Investments

"Vickers falls on fear of peace." There's an apocryphal story of how on the day after D-Day, the stock of Vickers, a large defense contractor, abruptly fell. I can't find the source but it was a good story going around the City some, ahem, 30 years ago. Last week there was not a lot of price action in bonds until Friday when economic upticks replaced budgets as the main driver. We saw a one point correction in treasuries. The market is right to push budget concerns into the background for now.

2013-01-29 China's Last Soft Landing? by Stephen Roach of Project Syndicate

On the surface, the Chinese economy's resilience has been impressive the first to recover, as Chinese leaders always want to remind the rest of the world. But, beneath the surface, the economy risks losing its capacity for resilience unless the authorities accelerate the transition to a more consumer-led economy.

2013-01-29 In Japan We Trust by Chris Maxey, Ryan Davis of Fortigent

In fewer than 60 days, one country has made a splash larger than all the others. No, we are not referring to the US, where Barack Obama was re-elected to a second term. Nor are we referring to China's recent transition of power. Instead, the country we reference is Japan. After decades of malaise, Japanese officials moved to embrace policies previously only accepted by Western officials.

2013-01-28 Capitulation Everywhere by John Hussman of Hussman Funds

The bears are gone, extinct, vanished. Among the ones remaining, many are people whom even I would consider to be either permabears or nut-cases. And yet, the historical evidence for major defensiveness has rarely been stronger.

2013-01-28 Global Market Commentary: Follow the Money, Again by Richard Golod of Invesco

Global equity market performance in 2012 was driven by accommodative monetary policy around the world, as well as a decline in investor fear after policymakers in Europe reduced the risk of a financial crisis. Global equity markets are likely to respond to the same stimulus this year but maybe not to the same degree. I believe the dominant factor that will drive equity prices in 2013 will likely surprise investors: inflation.

2013-01-28 Economic Insights: Signs of a Solid 2013 for Stocks by Milton Ezrati of Lord Abbett

Yield spreads versus bonds indicate that stock valuations have considerable upside. Earlier in this recovery, when earnings were growing very strongly, consensus concerns about equities cited the danger of an earnings slowdown. Those expressing this concern pointed out, that such a slowdown would occur inevitably as the recovery matured, especially with economic growth proceeding at such a subpar rate. What seems to have escaped notice is that the slowdown already occurred in 2012 and that the stock market offered good returns despite it.

2013-01-28 Conflicted Objectives by Charles Lieberman of Advisors Capital Management

Policymakers in the U.S., Europe, Japan, and elsewhere all seek to weaken their currencies to stimulate exports and domestic growth. It is not possible for all of them to succeed, since some currencies must rise in value, if others decline. Although their individual objectives may be in conflict, their efforts are actually mutually supportive. As each country runs an accommodative monetary policy to weaken its currency, they are also simultaneously promoting stronger domestic growth directly. Indirectly, they are also stimulating demand for their trading partners.

2013-01-28 A Few Things to Consider. Plus a Look at Maine and Illinois by Gregg L. Bienstock of Lumesis

This week's commentary is a slight departure from our standard format. It's been a few weeks since we mentioned the fiscal cliff, sequestration and the like. This is due to our collective saturation and the perspective of so many that the problem was solved. Well, we want to provide a reminder or two and throw a few thoughts at you to kick around. We conclude with a quick look at Maine and Illinois.

2013-01-28 Is the Fed Doing the Right Thing? by Mark Oelschlager of Oak Associates Funds

After a strong 2012, the stock market is off to a good start in 2013, rising more than 5% so far in January and currently riding an eight-day winning streak (the longest since 2004). Encouraging economic data has a lot to do with this. Unemployment claims are at a 5-year low, home sales and prices are up, and consumer credit and retail sales are growing. Research firm ISI says that the current level of unemployment claims is consistent with 4% real GDP growth for the first quarter, which would be an acceleration from the sluggish growth of recent years.

2013-01-25 Feeding the Dragon: Why China's Credit System Looks Vulnerable by Edward Chancellor, Mike Monnelly of GMO

Edward Chancellor and Mike Monnelly, members of GMO's Asset Allocation team, write to institutional clients in a new white paper about China's credit boom and outlines some worrying recent developments in its financial system. In GMO's view, "China's credit system exhibits a large number of indicators associated with acute financial fragility," including China's debt and real estate bubbles, the belief that the government is underwriting financial risk, the shadow banking system, a proliferation in credit guarantees, among others.

2013-01-25 Americas: Regional Economic Review 4Q 2012 by Team of Thomas White International

The outlook for most economies in the Americas region improved during the fourth quarter as domestic consumption growth was sustained and the anticipated revival in global demand has lifted the prospects for export growth this year. Partly helped by fiscal and monetary policy measures introduced since 2011, consumer demand has held up across most countries in the region.

2013-01-25 Cliff Dwellers by Stephen Taddie of Stellar Capital Management

In the ensuing days and weeks there will be plenty of opinions about what passed and what will continue to be negotiated in the drama known as the fiscal cliff. The spectacle of across-aisle dealings makes for a well rated "Reality" show (Fiscal Riff?), but poor ratings for both effectiveness and efficiency in governance. With US-centric issues in the forefront, the focus has been taken off the ongoing Euro Zone talks, which continue to plod along.

2013-01-25 ECRI "Recession" Update: Leading Index Growth Hits a New Interim High by Doug Short of Advisor Perspectives (dshort.com)

For a few months, ECRI's indicators cooperated with their forecast, but that has not been the case in the second half of 2012 -- hence, I surmise, their switch to the traditional Big Four recession indicators. ECRI's December 7th article,The Tell-Tale Chart, makes clear their public focus on the Big Four.

2013-01-25 Opine Less, Think More by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at investing from a broad perspective and goes over in detail some of the macro themes he is examining as he tries to help the reader make sense of what 2013 will bring. He discusses potential "black swans" that he has his eye on, the bounceback of American and European stock markets, the sometimes overlooked lack of a correlation between economic growth and stock market performance, what P/E ratios tell us both historically and in the present, and where valuations can go from here.

2013-01-25 Housing Is Off the Floor, But Faces Ceilings. by Team of Northern Trust

Housing is off the floor, but faces ceilings. The cost of housing could be a source of increased inflation. January's FOMC meeting should not break any new ground.

2013-01-25 Resource Investors: Why You Can Expect Sunnier Days Ahead by Frank Holmes of U.S. Global Investors

During the current commodity supercycle, there have been occasionstoo many to countwhen investor psyche has been damaged by reports about slowing U.S. growth, a hard landing in China or a debt crisis in Europe. Yet just behind the gloom, significant and positive trends are taking hold, causing the storms to start dissipating.

2013-01-25 The Case for Japan with a Caveat by Russ Koesterich of iShares Blog

While Im optimistic that Japanese stocks can move higher in coming months, Id advocate investing in them only if dollar-based investors have the flexibility to hedge the currency effect of a weaker yen (more on that below). So with that caveat out of the way, here are four reasons why I think Japanese stocks can move higher in the near term.

2013-01-25 Japan: Another Season of Downturn Abe? by Milton Ezrati of Lord Abbett

The returning prime minister is trying to spark the moribund economy with the same old remediesbut bolder action is needed.

2013-01-24 Searching for Growth in a Low-Growth World by Austin Graff of PIMCO

We believe corporate profit growth will fall short of sell-side consensus estimates. But companies with inflation-linked revenues and supply side advantages to drive revenue growth, and those with ample cost levers to improve margins, are positioned for sustained earnings growth in the New Normal.

2013-01-24 Beggar Thy Currency Or Thy Self? by Mohamed El-Erian of Project Syndicate

One need not be an economist to figure out that, while all currencies can depreciate against something else (like gold, land, and other real assets), by definition they cannot all depreciate against each other. Yet, when push comes to shove, country after country is being dragged into a negative dynamic of competitive depreciation.

2013-01-24 Quick Takes on the Investing Year Ahead by Sam Wardwell of Pioneer Investments

We covered a lot of market and investment topics at Pioneer's National Sales and Marketing Meeting last week. Here are some notes on a few that were popular: GDP Growth for the U.S.. Expectations for rates: Fed Funds Rate and the 10-year Treasury, EM equities favored over U.S. Equities?, Things that keep us up at night (outside of the debt ceiling, Europe, and Middle East tension.

2013-01-24 Emerging Asia Pacific: Regional Economic Review 4Q 2012 by Team of Thomas White International

Emerging Asia Pacific economies showed strong signals of a rebound in economic activity amidst generally rising exports and stabilizing inflation. While some major economies like China, which had cut interest rates throughout 2012 to stimulate the economy, saw a mild resurgence in inflation, many countries like South Korea, Taiwan, Malaysia and Philippines saw inflation stabilize significantly during the quarter. Still, India, the region's second largest economy, continued to be troubled by rising prices despite high interest rates.

2013-01-24 Get Your Funk Out by Jim Goff of Janus Capital Group

I manage investment professionals for a living. When an analyst gives me the positives on one hand and the negatives on the other hand, but offers no conclusion, I want to cut one of those hands off. The best analysts understand all the issues but come to well-founded views.

2013-01-24 Escape Velocity in the Economy by Scott Minerd of Guggenheim Partners

The broad improvement in U.S. economic data indicates that the economy is likely to continue to expand, supporting earnings growth and pointing to an eventual return of leveraged buy outs.

2013-01-23 Dissipating Gloom by Charles Lieberman of Advisors Capital Management

Investor confidence seems to be returning, as the economic outlook improves and policy concerns are addressed. The tone of media coverage and strategy commentaries has improved considerably. Nonetheless, investors are not positioned for a more optimistic view. Hedge funds and other professional money managers remain underexposed to equities and retail investors are dreadfully light in equities and badly overweight bonds. Stocks will enjoy a very nice tailwind as these portfolios are rebalanced to reflect the more positive view.

2013-01-23 High Yield Market Overview December 2012 by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch U.S. High Yield Master II Constrained Index, posted a positive total return of 1.59% in December, as the high yield market rallied on the perceived benefits of a fiscal compromise in the U.S.

2013-01-23 Ignore the GDP Headline by Brian Wesbury, Bob Stein of First Trust Advisors

Next week, Fourth Quarter Real GDP will be released. Our forecast of 0.9% annualized growth, if correct, will encourage the pessimists to continue fretting about the economy in the year ahead. But we will ignore that dour response. Beneath the surface of the report will be evidence that the plow horse economy is picking up some steam.

2013-01-23 Economic Backdrop Supports Stocks, Credit Sectors and Munis by Russ Koesterich of BlackRock Investment Management

Thanks to solid earnings, some decent (if mixed) economic news and indications that the debt ceiling debate may be delayed slightly, stocks posted additional gains last week, continuing their strong start to 2013. For the week, the Dow Jones industrial average climbed 1.2% to 13,649, the S&P 500 index advanced 1.0% to 1,485 and the NASDAQ composite rose 0.3% to 3,134. Bonds have remained relatively steady, with the 10-year Us treasury closing the week at a yield of 1.84%, two one-hundredths lower than the previous Friday close.

2013-01-23 The Year of the American Consumer by Philip Tasho of TAMRO Capital

It was an above-average year for stock returns across the domestic market cap spectrum. Ultimately, unconventional and accommodative monetary policy trumped investor concerns over fiscal policy, the Presidential election and weakness overseas. The Federal Reserve (the Fed) entered uncharted waters when it announced open-ended quantitative easing through the ongoing purchasing of government securities. Importantly, other central banks globally waded in by mimicking the Fed in word if not deed and the global liquidity cycle continued apace.

2013-01-23 Is the European Crisis Over? by Chris Maxey, Ryan Davis of Fortigent

The European sovereign debt crisis that first erupted in 2010 and stoked almost three years of intense market volatility has all but faded from the front pages. Overshadowed by domestic policy issues and European Central Bank (ECB) President Mario Draghi's pledge to do "whatever it takes" to save the Eurozone, fears that the monetary union would crumble and unleash a maelstrom of financial distress appear to have dissipated.

2013-01-23 PIMCO's Secular Forum Preview by Mohamed El-Erian of PIMCO

It is almost time again for PIMCO's Secular Forum a critical part of the firm's investment process. This annual event, which takes place each May, brings together our investment professionals from around the world to debate and specify the key themes that we believe will affect the global economy and, consequently, our investment strategies over the next three to five years from asset allocation and relative value positioning to returns expectations and risk management.

2013-01-23 Norfolk Southern Corp: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

Norfolk Southern Corp (NSC) is one of the nation's premier transportation companies. Its Norfolk Southern Railway subsidiary operates approximately 20,000 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers.

2013-01-23 Gun Control & How To Play Upcoming Debt Battles by Gary Halbert of Halbert Wealth Management

Ever since the tragedy on December 14 at Sandy Hook Elementary School in Newtown, Connecticut occurred when Adam Lanza senselessly murdered 26 people (20 children and six staff) and then himself there has been a growing cry from millions of Americans for some kind of new gun controls. And the current occupant of the White House is all too happy to oblige. Last week, the president unveiled the most sweeping new gun control laws since the so-called Brady Bill was passed in 1993, requiring background checks on firearm purchasers in the US. Obama's proposals go much further as I will discuss.

2013-01-23 Avoid Disappointment, Aim Low by Christian Thwaites of Sentinel Investments

No, it's not a life aspiration. But it can work when it comes to investing. We had a rush of gains coming into the end of the year with the S&P up 22% over the year. But it's also one of the more relaxed markets and start we've had in years. The political agenda is still front and clear and we're in a lull until the debt ceiling arguments gain steam. The markets know this but seem comfortably complacent. They're probably right to be.

2013-01-23 It's What You Learn After You Know It All That Counts. by Jeffrey Saut of Raymond James

January is the time of year when strategists, economists, gurus, etc. all join in on the annual nonsense of predicting "What's going to happen in the markets for 2013?" For many, this ritual is an ego trip, yet as Benjamin Graham inferred forecasting where the markets will be a year from now is nothing more than rank speculation. Or as I have noted, "You might as well flip a lucky penny."

2013-01-23 Developed Asia Pacific: Regional Economic Review - 4Q 2012 by Team of Thomas White International

Developed Asia Pacific economies witnessed mixed economic fortunes during the fourth quarter of 2012. While the group's largest economy, Japan, suffered from stubborn deflation and slumping trade due to a bitter territorial dispute with China, Singapore and Hong Kong managed to fare better.

2013-01-22 Dylan Grice: Witch Hunts, Inflation Fears, and Why I’m Bearish in 2013 by Michael Skocpol (Article)

For someone who started his remarks proposing to 'kill all the economists,' Dylan Grice can wax surprisingly sentimental, with a fresh, human take on monetary policy that leads him to some worrisome conclusions. Making a case for gold, cash, and other safe havens, Grice said the biggest threat to investors today is a problem that has plagued societies throughout history – mistrust.

2013-01-22 Sunglasses and Cockroaches – Six Rules for Surviving in a Bear Market by Michael Skocpol (Article)

After more than three decades investing in Japanese securities, Peter Tasker has little patience for other investors' self-pity – and he doesn't want to hear your horror stories from 2008. Overcoming the challenges posed by bear markets requires the adaptive instincts of a cockroach, and Tasker identified six lessons investors can take away from those lowly insects.

2013-01-22 Wally Weitz on Value Investing in the Post-Crisis Era by Robert Huebscher (Article)

As the president and founder of Weitz Funds, Wally Weitz has spent nearly three decades putting his instinct for opportunity to work for shareholders. Influenced by the value-investing model of Benjamin Graham and Warren Buffett, Wally manages the Partners III Opportunity Fund (WPOPX), which has had an annual return of 10.85%, versus 6.23% for the S&P 500. In this interview, he discusses his investment methodology and how it has evolved since the financial crisis.

2013-01-22 The Political Cliff by Lawrence Grossman (Article)

Cliff-dwelling politicians are sending our country toward insolvency. Averting this crisis requires unconventional yet bold thinking. I propose such a plan.

2013-01-22 Venerated Voices by Ranks Economic and Market Commentaries Most Read by Financial Advisors (Article)

Here are the winners of our 2012 Venerated Voices awards: the top commentaries, authors and firms for the past year, based on readership.

2013-01-22 And That's The Week That Was by Ron Brounes of Brounes & Associates

Tragedy in Algeria brought another reminder about just how dangerous the world can be. Oil prices rose on the enhanced turmoil in the region as well as on news that supplies unexpectedly dropped in the recent gov report. Financials led earnings season in a mostly positive way, though several releases included reminders about the financial crisis and the greed factor of certain professionals. The favorable economic data was well received as S&P 500 index again hit a five-year high though even the optimists remain cautious as the budget negotiations yield little positive results.

2013-01-22 The Economic Fundamentals of 2013 by Nouriel Roubini of Project Syndicate

The global economy this year will exhibit some similarities with conditions prevailing in 2012 no surprise there. But there will be some important differences, as fiscal austerity spreads to more advanced economies, the risk of a hard landing in China rises, and the threat of war in the Middle East grows.

2013-01-22 Quarterly Letter by Ron Muhlenkamp of Muhlenkamp & Company

2012 was a year of mixed results on the economic front, but generally good investment returns as measured by the S&P 500 Index. Some progress was made in Europe and China, and some clarification in direction was made in the U.S. We presented our thoughts on these topics at our December 6 seminar; an archive will be available on our website.

2013-01-22 Equities Set to Break Out of the Bear Trap by Catherine Wood of AllianceBernstein

In the face of significant uncertainties, US and global equities rallied in 2012 and at the start of the New Year. We think there might be more to come as stocks break out of the bear trap.

2013-01-22 Ten for '13 by Investment Strategy Group of Neuberger Berman

Last year, despite the noise surrounding the U.S. elections and the ongoing European debt crisis, the main drivers of asset prices arguably were the large-scale bond-buying programs put in place by global central banks to alleviate systemic pressures. In 2013, we anticipate fewer aggressive central bank actions as the pace of global growth gradually picks up. We believe the largest influential factors to our outlook are premature fiscal tightening in the U.S. and a potential resurgence of eurozone problems.

2013-01-22 Consumer Staples: Don't Overpay for Safety by Russ Koesterich of iShares Blog

Many investors have flocked to the perceived safety of defensive sectors over the past few years, including consumer staples. But Russ gives three reasons they might want to think twice about the sector now.

2013-01-22 Puppet Show by John Hussman of Hussman Funds

What's fascinating is that in the presence of what are not thin strings, but massive cables supporting the economy like a puppet, the only response that Wall Street can muster is "Hey! He's walking!" as if the puppet is capable of motion without being propped up to a nearly reckless extent.

2013-01-22 Latin America: Europe's Pillar of Strength by Team of Thomas White International

European firms are shaking off pressure at home through various business transactions in Latin America.

2013-01-22 Keep Your Eye On The Ball - 2012 Year End Letter by Team of Sloan Wealth Management

The members of the Portfolio Management Team at Sloan Wealth Management (SWM) coach two baseball teams, two soccer teams, one T-ball team and one basketball team for our collective young children. Thus, we find ourselves stressing the basics. Learning the fundamentals of how to catch a pop-up will eliminate some of the fear of getting hit in the face. In 2012, we found many parallels to the capital markets as our portfolios posted high double digit returns in the face of fear.

2013-01-22 Year-End Investment Commentary by Team of Litman Gregory

Stocks shrugged off numerous worries to log a very good year in 2012, but can markets continue to climb? Certainly the worries remain. The most immediate has to do with the spending side of the fiscal cliff. The cliff deal made permanent the Bush tax cuts for all but high-income taxpayers but it did not address spending. So while the worst case of the cliff was avoided, the work is not nearly done. In this commentary we discuss our current assessment of the investment environment including a detailed look at what could go right, and tie it all back to our portfolio positioning.

2013-01-22 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Last week saw the markets continue to trade off of concerns over Apple, and just what might happen in Washington DC concerning the debt limit negotiations. Earnings season will hit high gear this week.

2013-01-22 Fossil Inc Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

Fossil Inc. (FOSL) is a global design, marketing and distribution company that specializes in consumer fashion accessories. The Company's principal offerings include an extensive line of men's and women's fashion watches and jewelry sold under proprietary and licensed brands, handbags, small leather goods, belts, sunglasses, soft accessories, shoes and clothing.

2013-01-18 Middle East/Africa: Regional Economic Review 4Q 2012 by Team of Thomas White International

According to the International Monetary Fund's Regional Economic Outlook report, countries in the Middle East and North Africa region are expected to grow at different rates. Oil exporting nations are cashing in on high energy prices and production, and are projected to expand 6.6 percent in 2012 before tempering in 2013. On the other hand, oil importers such as Jordan, Morocco and Tunisia among others are expected to clock growth just over 2 percent as the slowdown in the world economy and political tensions continue to hinder expansion for some of these countries in transition.

2013-01-18 Quarterly Review and Outlook by Van Hoisington, Lacy Hunt of Hoisington Investment Management

The American Taxpayer Relief Act has lifted the immediate uncertainty of the fiscal cliff. Nevertheless, tax increases that are already in effect from this act, as well as the Affordable Care Act, impose a major obstacle to growth for the U.S. economy in the first half of 2013. The result of these taxes is considerable, especially in light of the poor trend in household income. In addition, these tax increases will continue to act as a drag on economic growth until late in 2015 and are unlikely to produce the revenue gains advertised.

2013-01-18 ECRI's Public Indicators Continue to Undermine Their Insistance That We're in a Recession by Doug Short of Advisor Perspectives (dshort.com)

For a few months, ECRI's indicators cooperated with their forecast, but that has not been the case in the second half of 2012 -- hence, I surmise, their switch to the traditional Big Four recession indicators. ECRI's December 7th article, The Tell-Tale Chart, makes clear their public focus on the Big Four.

2013-01-18 Equity Investment Outlook January 2013 by Team of Osterweis Capital Management

Despite many headwinds and amid great uncertainty, both the U.S. economy and stock market enjoyed a rather good year in 2012. Real Gross Domestic Product ("GDP") grew around 2%, and the stock market, as measured by the S&P 500 Index, returned 16%. At the risk of sounding complacent, we believe that the fundamental trends that produced such favorable results in 2012 are still in place and should support another good year in 2013.

2013-01-18 Are Central Banks Easing Off Prematurely? by Team of Northern Trust

Are central banks easing off prematurely? Washington is girding for another budget imbroglio; Inflation is contained, for now.

2013-01-18 4 Sensational Facts About Gold Investing That You Might Not Know by Frank Holmes of U.S. Global Investors

1. Gold has been a consistent performer over the decades. 2. Gold should remain a hot commodity in 2013. 3. Gold is the least volatile commodity on the table. 4. The last four years were better than you thought.

2013-01-18 VF Corp: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of VF Corp through the lens of FAST Graphs fundamentals analyzer software tool. Therefore, it is offered as the first step before a more comprehensive research effort. Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-01-18 Fixed Income Investment Outlook by Team of Osterweis Capital Management

We continue to feel that the mismatch between yield and interest rate exposure means that investment grade bonds are less attractive compared with the non-investment grade universe, especially in shorter maturities. Treasury, investment grade corporate and high yield bonds have yields and effective durations that are virtually unchanged compared to levels three months ago. Yields on short-dated high yield paper have actually risen a bit and are still, in our opinion, the most attractive sector we look at in terms of interest rate risk.

2013-01-18 Will This Risk-On Period Last? by Daniel Loewy and Brian Brugman of AllianceBernstein

The odds of the market staying in risk-on, risk-off mode are lower than they were a few months ago, in our viewbut still too high to take a highly aggressive stance.

2013-01-17 International Equity Commentary December 2012 by Team of Thomas White International

International equity prices made robust gains in December, as further improvement in economic trends across most regions lifted the outlook for 2013. Policymakers in the U.S. managed to put together an agreement at the last minute and averted the 'fiscal cliff', one of the major risks that had restricted investor sentiment during earlier months. In Europe, though economic signals remain largely weak, the further fall in bond yields of the troubled countries has helped sustain optimism about resolving the region's fiscal crisis this year.

2013-01-17 Signs of a Rotation by Scott Minerd of Guggenheim Partners

As yields continue to dwindle and risks in the fixed income market come into clearer focus, investors have begun to regard equities as a compelling alternative to bonds.

2013-01-17 Is the US Consumer Back? by Russ Koesterich of iShares Blog

Some market watchers are interpreting Tuesday's better-than-expected US retail sales report as a sign that the US consumer is coming back. But as Russ explains, a closer look at the numbers shows this much heralded return is likely to be delayed a bit longer.

2013-01-17 Rehab: An Update on Housing Recovery by Liz Ann Sonders of Charles Schwab

The National Association of Home Builders' Housing Market Index has staged a record-breaking run higher. Home prices have been rising and are feeding into real mortgage rates, consumer confidence, household net worth...and pushing fence-sitters off the fence. Housing's contribution to job growth could push the unemployment rate down more quickly than many believe.

2013-01-17 Investing in Africa: Misconceptions and Realities by Mark Mobius of Franklin Templeton Investments

It's easy to fall prey to misconceptions and generalizations about places we've never been: to assume everyone in the United States drives big cars, all the French love croissants and all Canadians play hockey. There are many misconceptions about investing in developing markets, and Africa certainly has its fair share, but it's dangerous to make sweeping generalizations.

2013-01-17 End of An Era: 30 Years of Double-Digit Chinese Growth by Bryce Fegley of Saturna Capital

Slumping exports, lackluster domestic consumption, and slowing urban migration contribute to lower growth expectations for China. With Chinese manufacturing capacity now saturated relative to global demand, and developed economies facing the consequences of over-indebtedness, external tailwinds to China's growth have passed.

2013-01-16 Global Economic Overview - December 2012 by Team of Thomas White International

The global economic outlook brightened further in December, as economic data from most regions indicated sustained, though moderate, improvement in both domestic and external demand. Europe showed further signs of stabilization in the financial markets, as bond yields of the most troubled countries continued to decline in response to the earlier assurance by the European Central Bank (ECB) to buy unlimited quantities of sovereign bonds.

2013-01-16 Obama Claims We Don't Have A Spending Problem by Gary Halbert of Halbert Wealth Management

There's a lot to talk about this week. A lot of my contemporaries are offering their predictions for the New Year. But with our nation now over $16 trillion in debt and annual budget deficits over $1 trillion, I don't think there is any way to accurately predict what will happen this year. Another financial crisis could rear its ugly head just about any time.

2013-01-16 The Rise of Asia's REITs by Sherwood Zhang of Matthews Asia

Real estate investment trusts (REITs) in Asia are following in the footsteps of their U.S. counterparts as they become an increasingly important asset class attracting investors looking to gain exposure to a diversified pool of real assets and relatively high yields. In the past decade, REITs have become a growing force in the regions investment universe. This month Sherwood Zhang, CFA, takes a look at just how far Asia's REIT markets have come, and what new opportunities as well as risks may still exist.

2013-01-16 ProVise Bullets by Ray Ferrara of ProVise Management Group

By now you may have read more than you care to about the changes to income taxes. We avoided rushing to get you something as so many others did, so that we could provide you with some comprehensive and practical information. It is a long read, but we hope you find it to be worth your time.

2013-01-16 Haka Politics and the Slow Crawl by Christian Thwaites of Sentinel Investments

In the last few months we have seen the rise of Haka politics. Familiar to any All Blacks fan, this is the ritualistic Maori war dance, full of noise, bluster and theater. But it rarely intimidates and most opponents sit it out with some amusement. So it is with the political interventions last year. We saw countless announcements and intentions from EU leaders and solemn pledges with little follow-through. And in the US we had a soporific election and a squalid squabble over the fiscal cliff that caught the public but not the market's attention.

2013-01-16 The Big Four Economic Indicators: Real Retail Sales and Industrial Production Both Rise by Doug Short of Advisor Perspectives (dshort.com)

The charts don't all show us the individual behavior of the Big Four leading up to the 2007 recession. To achieve that goal, I've plotted the same data using a "percent off high" technique. In other words, I show successive new highs as zero and the cumulative percent declines of months that aren't new highs. The advantage of this approach is that it helps us visualize declines more clearly and to compare the depth of declines for each indicator and across time (e.g., the short 2001 recession versus the Great Recession). Here is my own four-pack showing the indicators with this technique.

2013-01-16 Tax-Deferral Becomes More Urgent As Congress Seeks Fiscal Solutions by Mitchell Caplan of Jefferson National

Many Americans began the New Year relieved that the "fiscal cliff" had been averted, if only temporarily. But there is no escaping their biggest fearthat an increase in their federal tax bill is inevitable. Congress continues to hammer out the final details, but one thing is certain: anyone drawing a salary or receiving other income will be hit with more taxes. And the higher their income, the bigger the bite.

2013-01-16 UK Economic Quagmire Adds Pressure for Monetary Policy Change by Darren Williams of AllianceBernstein

Bank of England governor-elect, Mark Carney, has raised hopes that the central bank may soon switch to a nominal GDP target. In our view, the costs outweigh the benefits, but the attractions of a radical new approach will grow if the economy remains stuck in the doldrums.

2013-01-15 Gundlach’s Predictions for 2013 by Robert Huebscher (Article)

Don't expect the low volatility that characterized the capital markets in 2012 to continue. Global economic uncertainty remains, and markets are poised like a 'coiled snake' to reward or penalize investors in certain asset classes, according to Jeffrey Gundlach.

2013-01-15 Demographics and the Decline of Equity Mutual Funds by Paul Franchi (Article)

Until the last few years, mutual fund flows followed performance. Recently, however, money has flowed disproportionately into bond funds and out of US equity funds despite a strong rally in the equity markets. Changing demographics explain this shift, which has important implications for advisors and the mutual fund industry.

2013-01-15 Template for a Year-End Client Letter 2012 in Review: Learning from the Past, Looking to the Future by Dan Richards (Article)

Client concerns about whether you're on top of things can be reduced by sending regular overviews of what's happened in the immediate past and the outlook for the period ahead. That's why each year since 2008, I have posted templates to serve as a starting point for advisors looking to send clients an overview of the year that just ended and the outlook for the period ahead.

2013-01-15 The Nothing That Is by Michael Lewitt (Article)

The world is awash in money. But money isn't what it used to be. I would point to two characteristics of modern money that should be keeping portfolio managers up at night (they certainly keep me up at night).

2013-01-15 Land of the Rising Dead by Christian Thwaites of Sentinel Investments

Yes, you knew we were going to talk about Japan. It's all the rage and the big standout in market performance in the last few weeks. Since November the broad Nikkei-225 average has risen 24% because there's new thinking in town. It's hard to describe Japan's 20 year malaise. Once proud companies shaken, the shattering of a property market and total collapse of stocks. Even if the market rises at the same level of the last few months, it will take six years to re-reach its peak. A more reasonable 10% growth rate will take 14 years. Weird things happen when economies enter deflation.

2013-01-15 Forecast 2013: Unsustainability and Transition by John Mauldin of Millennium Wave Advisors

As we begin a new year, we again indulge ourselves in the annual rite of forecasting the year ahead. This year I want to look out a little further than just one year in order to think about the changes that are soon going to be forced on the developed world. We are all going to have to make a very agile adaptation to a new economic environment (and it is one that I will welcome). The transition will offer both crisis and loss for those mired in the current system, which must evolve or perish, and opportunity for those who can see the necessity for change and take advantage of the evolution.

2013-01-15 Are Investors Buying into the Equity Story? by Chris Maxey, Ryan Davis of Fortigent

Last week we discussed the debate over active versus passive management. We believe active managers can add tremendous value in particular segments of the market, despite recent challenges. Outside of the active management discussion, many investors are deciding whether equities are a prudent place to allocate capital at this point in the market cycle. The first week of the year answered investors' opinions on that question loud and clear.

2013-01-15 Japan: Tip of the Spear by Bill O'Grady of Confluence Investment Management

On Sunday, December 16, 2012, Shinzo Abe, the leader of the Liberal Democratic Party (LDP), led his coalition to a decisive electoral victory in Japan. The LDP won 294 out of 480 seats and, with the additional 29 seats captured by its coalition partner, the New Komeito Party, will control the lower house in the Japanese Diet. Abe was named the new prime minister ten days later.

2013-01-15 The Markets and the Cult of Now by Joseph Paul of AllianceBernstein

Crisis-battered investors continue to favor the relative certainty of current income over the "maybe" of future capital appreciation. If you ask me, however, this hyperfixation on Now is creating some provocative opportunities in Later.

2013-01-15 New Year's Vantage Point: Christopher Molumphy by Christopher Molumphy of Franklin Templeton Investments

For a view on the U.S. and global fixed income market and potential opportunities therein, we turn to Christopher Molumphy, CFA, chief investment officer of Franklin Templeton Fixed Income Group.

2013-01-15 A Conversation With Warren Buffett by Jeffrey Saut of Raymond James

Clearly, the stock market "thinks" something good can happen given the action so far this year. To wit, we ushered in the New Year with a 90% Upside Volume Day on December 31st followed by another 90% Upside Volume Day on January 2nd (90% of total volume traded came in on the upside). Such back-to-back Upside Days are pretty rare, especially at the beginning of the year.

2013-01-15 Inflation, Still Not Taking Off Anytime Soon by Scott Brown of Raymond James

A few years ago, amid exceptionally large federal budget deficit and extraordinarily accommodative Fed policy, a number of pundits warned of impending hyperinflation. Instead, inflation has stayed low. That hasn't stopped the inflation worrywarts. It's just a matter of time, they say. Inflation "has to show up at some point." That's not an argument. There are a number of reasons to expect inflation to stay low.

2013-01-15 It's Not What Happens That Matters by Bill Smead of Smead Capital Management

Late in 2008 and in early 2009, a group of what we like to call "brilliant pessimists" hit the airwaves with their economic theories. The prognosticators' vision of the future was and is predicated on the history of similar situations and the mathematical realities of the huge debt overhang from the prior ten years of profligate economic behavior. They put very effective names on their visions like "new normal" and "seven lean years". They marketed their visions incredibly well to the point of shaming anyone who might disagree with their theories.

2013-01-15 Declaring Victory at Halftime by John Hussman of Hussman Funds

Present overvalued, overbought, overbullish, rising-yield conditions fall within a tiny percentage of market history that is associated with dismal market outcomes, on average. Its true that we've observed extreme conditions since about March 2012 with little resolution aside from short-term declines. But the S&P 500 remains only a few percent from its March 2012 high, and if history is any guide, the extension of these unfavorable conditions is not likely to reduce the depth of the market loss that can be expected to resolve them.

2013-01-15 What's Behind the Buyback Binge? by Milton Ezrati of Lord Abbett

The pace of stock repurchases says much about equity valuationsand companies' expectations for economic growth.

2013-01-15 Emerging Markets Equity Commentary: December 2012 by Team of Thomas White International

Emerging market equities outperformed during the month of December, helped by signs of further improvement in the economic growth outlook. Economic data released over the month were largely positive for most emerging countries, and strengthened the optimism that these markets could see a moderate improvement in growth rates during 2013.

2013-01-15 From Cliff to Ceiling! by Jim Tillar, Steve Wenstrup of Tillar-Wenstrup

When it was all said and done not much happened in the final quarter of 2012. Anxiety picked up immediately after the election as the bickering over the fiscal cliff escalated. In the end, the worst-case scenario was avoided at least for a couple of months and stocks ended about where they began the quarter.

2013-01-14 And That's the Week That Was by Ron Brounes of Brounes & Associates

Finally, a week not totally dominated by "fiscal cliff" discussions (though politicos now have their hands full with a gun control debate...what are the chances of compromise there?). Alcoa kicked off earnings season as usual and the early results lend credence to the thought that China will again be relied upon to lead any global recovery. Major banks announced major settlements as they continued to try to close the (negative) books on the financial crisis. Oil rose on Saudi production cuts.

2013-01-14 The More Things Change... by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

One crisis averted...another one on the way? Of course, but we're still positive on the US economy and stock market.

2013-01-14 Bond Market Review & Outlook by Thomas Fahey of Loomis Sayles

The final quarter of 2012 was the icing on the cake of an exceptional year for the credit sectors. Fourth quarter credit gains stemmed in part from uncommonly aggressive monetary policy responses in the third quarter. As economic growth continued to undershoot expectations, major central banks made clear that they were dissatisfied with the status quo of tepid economic growth and high unemployment. The Federal Reserve went so far as to tie its monetary policy to the level of the unemployment rate.

2013-01-14 Equity Market Review & Outlook by Richard Skaggs of Loomis Sayles

While the S&P 500 Index posted a slightly negative fourth-quarter return, the Index's 16.0% return for all of 2012 was notable in the face of a long list of global fundamental concerns. Midcap and small cap stocks performed better during the final three months of the year, posting gains of roughly 2.0%-3.0%. The fourth quarter outperformance of smaller stocks was enough to overtake the S&P 500 for the year, but just fractionally.

2013-01-14 Population Trends, The Labor Force and a Look at the Muni Index by Gregg Bienstock of Lumesis

We start this week with a look at the DIVER Muni Index and then jump into a discussion about population trends, employment and wages. If you get no further than this opening, the short of it is that you really need to look closely at the data and where things are getting better really and where things are perceived to be better. This is especially so as some pundits suggest the higher tax rate on the wealthy will be beneficial to muni-land as more wealthy people seek to offset the increased tax burden.

2013-01-14 Crosscurrents and Contradictions: Which Way Will Municipal Bonds Go? by Tom Dalpiaz of Advisors Asset Management

The two possible scenarios outlined are quite different with very different outcomes for municipal bonds, and that is what makes any 2013 municipal bond outlooks difficult to offer with certainty. Scenario 1 will likely have a relatively benign impact on municipal bond values while the impact of Scenario 2 will be more negative. Of course, the possibilities municipal bond investors will face this year include more than just the two stark contrasts presented above.

2013-01-14 The 'Dark Continent' is Shining Bright by Team of Thomas White International

From a recipient of aid, Africa has transformed itself into a magnet attracting capital and investment.

2013-01-14 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Another quiet week in early January as the earnings season is about to gear up.

2013-01-11 Thanks, Everybody...We'll be Right Back! by Colin Moore of Columbia Management

The Washington Comedy Club has taken a brief intermission and will be back in session shortly to resume the show. Please enjoy the facilities of this great country, free of charge, while you wait. Ignore the "Nero" character in the far corner playing the fiddle. Apparently, he isn't part of the show. Economic uncertainty emanating from fears of the U.S. fiscal cliff has been deferred but not avoided.

2013-01-11 On the Road in India by Mark Mobius of Franklin Templeton Investments

India appears to be on its way to becoming a major market for motor vehicles. Annual car and truck sales currently in India are roughly one third of the 15 million units produced in the U.S., but the pace of growth has been high. The total population of registered motor vehicles in India numbered more than 100 million in 2008- 2009, with consumer vehicles (passenger cars, motorcycles and scooters) accounting for about 4/5 of the total.

2013-01-11 New Year's Vantage Point: Norm Boersma by Norman Boersma of Franklin Templeton Investments

As we ring in a new year, it's a good time to gain some perspective on where we've been, and where we might be headed. Norm Boersma, CFA, chief investment officer of Templeton Global Equity Group, takes a look at the current headwinds facing the global equity markets, from fiscal imbalances to growth challengesand how market uncertainty can result in market mispricings.

2013-01-11 2 Reasons to Stick With Emerging Markets by Russ Koesterich of iShares Blog

Think emerging markets equities have run their course? Not so fast despite recent strong performance, Russ explains why there's room for further EM gains in 2013.

2013-01-11 Abe's Return May Prod Japan Forward by Kenichi Amaki of Matthews Asia

Japan's politics have entered 2013 with a mixed freshness. Former Prime Minister Shinzo Abe has clinched a rare second shot at the prime minister's post. His first term, which began in late 2006, lasted only about a year and ended with his sudden resignation. But following its landslide victory last month, his Liberal Democratic Party (LDP) has secured a two-thirds majority in the 480-seat Lower House, giving it the constitutional power to override Upper House opposition, where no single party holds a majority, on almost all issues.

2013-01-11 How the Platinum Coin Could Work (or Backfire) by Mohamed El-Erian of PIMCO

The unusual move of minting a large platinum coin might shock politicians into cleaning up the fiscal mess. But the rest of the world may see it as inflationary.

2013-01-11 ECRI's Imaginary Recession: Now in Its Seventh Month by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose in the latest public data. It is now at 128.3 versus the previous week's 126.6 (which is an upward revision from 126.4). Likewise the WLI annualized growth indicator (WLIg) rose, now at 5.1, up from last week's 5.0. WLIg has been in expansion territory since August 24th, although it is off its 6.0 interim high on October 12th.

2013-01-11 Winter Quarterly Commentary by John Prichard of Knightsbridge Asset Management

While a last minute compromise may have been reached on taxes, it represents only a brief rest stop on a required road of repair. On the positive side, we should see less annual wrangling with tax rates having been made permanent, meaning they will not automatically change at some future date (but rather only when Congress feels like changing them), with many areas also sensibly indexed for inflation.

2013-01-11 Fed Policy Update: Waiting for Clearer Criteria for Open-Ended Asset Purchases by Alan Levenson of T. Rowe Price

The FOMC's shift from dates to economic conditions as the basis for policy rate guidance clarified the criteria for beginning rate hikes. The criteria for ceasing open-ended asset purchases are not clear, and may reflect not only the evolution of the labor market recovery but also concerns about financial stability and the size of the Fed's balance sheet. We expect the Fed to try to clarify these criteria in the months ahead. Asset purchases will end a "considerable time" before policy rate hikes commence, and rate hikes will commence before asset sales.

2013-01-11 Pacific Basin Market Overview - December 2012 by Team of Nomura Asset Management

Equity markets ended the year on an upbeat note, shrugging off concerns over the impending "fiscal cliff" while focusing on better economic data from the U.S. and China. In Japan, expectations of a higher inflation target and a depreciating yen brought some overseas investors back to the Tokyo stock market. The MSCI AC Asia Pacific Free Index including Japan gained 5.6%, while the MSCI AC Asia Pacific ex Japan Free Index also closed 5.6% higher in the October-December quarter of 2012.

2013-01-11 Gold Strategy Investor Letter, Q4 2012 by John Hathaway of Tocqueville Asset Management

John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), examines in his latest quarterly letter the macro factors affecting the price of gold and gold mining stocks. While such stocks have traded at a discount relative to historic norms, Hathaway remains bullish on gold and gold related equities, believing both could see new highs in 2013.

2013-01-11 Special Edition: The Outlook for 2013 by Team of Northern Trust

At this time of the year we typically get warm and generous wishes for the New Year and, of course, numerous questions about what our crystal ball has in store for 2013. While many economists publish their perspectives prior to January 1, we opted to wait in the hope of having a clear fiscal picture for the United States. A lot of good that did us...

2013-01-11 Invest In Equities: Your Future Self May Thank You by Frank Holmes of U.S. Global Investors

Investors have had an illusion about the stock market since the financial crisis. With the barrage of negative headlines and abhorrence toward risk, investors seemed to feel that equities would not improve going forward. This turned out to be a mistaken belief.

2013-01-11 The Margin Debate by Mebane Faber of World Beta

One of the more interesting debates regarding stock valuations is the state of profit margins. One one side you have Hussman and GMO lining up, and on the other Jeremy Siegel and Redleaf. Im on the side of the former, and this is one of the reasons we have moved the majority of our equity allocations to foreign markets (valuations being another).

2013-01-10 Market Perspectives Q4 2012: Politics vs. Economics by Richard Michaud of New Frontier Advisors

The major news of the quarter was that a fiscal cliff deal passed in the final hours of the 112th Congress and was signed by President Obama. The deal averts tax increases on most Americans and prevents large indiscriminate cuts in spending in many government programs. It also averted, by nearly universal consensus among macroeconomists, tipping the American economy into recession with attendant global implications.

2013-01-10 Finally, a Solution to the Income Investing Dilemma by Gary Halbert of Halbert Wealth Management

There's an endangered species in the investment industry today and it goes by the name of "yield." With continued downward pressure from the Federal Reserve, both short-term and long-term interest rates have been held to artificially low levels. And each new announcement from the Fed seems to extend the outlook for low interest rates farther into the future.

2013-01-10 Chuck Royce on Q4 2012: Quality Rising by Chuck Royce of The Royce Funds

Do you think the market's strength in the year's second half marks the beginning of a more historically normal period for equities? I do. Of course, we've been calling for a more typical market environment for a while now, so our recent forecasting has been less than stellar. However, the market's second-half results were telling. In the third quarter we saw many quality stocks keep pace with the small-cap market as a whole. Many of these businesses then went on to outpace the Russell 2000 in the fourth quarter, particularly in October, when the rally began to cool.

2013-01-10 A Brighter Picture for Jobs and the Economy by Scott Minerd of Guggenheim Partners

Promising fundamental developments suggest that U.S. economic expansion is likely to continue and equities will rise in the first quarter.

2013-01-10 Defense as a Good Offense by Brian Frank of Frank Capital Partners

Oddly, defensive names that ordinarily trade at premiums to the market are trading at big value discounts. These companies that have the ability to grow in any economic environment are a part of the portfolio, as well as companies riding pockets of growth around the globe. There is a lot to be excited about in 2013 for value stocks.

2013-01-10 Inflation Propaganda Exposed by Peter Schiff of Euro Pacific Capital

Economists who hold the popular view that expanding the money supply will provide the best medicine for our ailing economy dismiss the inflationary concerns of monetary hawks, like me, by pointing to the supposedly low inflation that has occurred during the current period of rampant Fed activism.

2013-01-10 A New Years Vantage Point: Michael Hasenstab by Michael Hasenstab of Franklin Templeton Investments

As we ring in a new year, it's a good time to gain some perspective on where we've been, and where we might be headed. In the first few weeks of January, Beyond Bulls & Bears will be featuring a series of investment commentaries from select Franklin Templeton investment management teams. These professionals provide their insights on the market ups and downs of 2012, and the potential challenges and opportunities that may lie ahead from their respective vantage points. Today we hear from Michael Hasenstab, portfolio manager and co-director of the International Bond Department.

2013-01-10 Will Emerging Market Earnings Rebound in 2013? by Morgan Harting of AllianceBernstein

For two years, emerging markets companies have delivered inferior earnings growth and investment returns compared to peers in sluggish developed market economies. Now, the consensus is that earnings growth will catapult from near-zero in 2012 to 13 per cent in 2013. Hopes were high at the end of 2010 and 2011, too, yet analysts were then forced to revise down their earnings estimates. Will 2013 represent another triumph of hope over experience? To answer that question, let's look at what investors got wrong about emerging markets in recent years.

2013-01-09 Waiting for Godot by Sam Stewart of Wasatch Funds

Like the enigmatic title character in Waiting for Godot, clear signals of U.S. economic health remain much anticipated but elusive. The year 2012 saw consumers and businesses mimicking the Samuel Beckett play   - with optimists waiting for things to get better and pessimists waiting for things to get worse.

2013-01-09 Financial Markets Review and Outlook: Fourth Quarter 2012 by Team of Managers Investment Group

As expected the fourth quarter economic landscape was dominated by the U.S. Presidential and Congressional elections and their collective impact on the fiscal cliff. After the elections were completed, markets nervously awaited the outcome of the fiscal cliff negotiations as economists generally predicted dire consequences for the U.S. economy in 2013 if a timely resolution was not reached by the end of the year.

2013-01-09 Ten Acts for Chairman Bernanke in January 2013 by Tony Crescenzi of PIMCO

Federal Reserve Chairman Ben Bernankes term ends in January 2014, and it is unclear whether he will stay on for another. We expect Bernanke will muster every means he can over the next year to help the U.S. and indeed the world emerge from a gloomy time.Here, then, are 10 items we suggest for Ben Bernankes to-do list in 2013.

2013-01-08 2012: Resumption of the Stock Market Recovery by Ronald Surz (Article)

Let's take a close look at the details of what occurred in 2012 so we can assess the opportunities and prepare for the surprises that 2013 will bring. I'll give you my opinions, and you should form your own.

2013-01-08 Energy and the End of Growth by Michael Edesess (Article)

Is economic growth coming to an end? That's been a hot topic of discussion, thanks to a paper by Robert J. Gordon. It had a simple but striking thesis: 'There was virtually no growth before 1750, and thus there is no guarantee that growth will continue indefinitely.' But before 1750 there were no fossil fuels either. Only once humans tapped the large deposits of coal and oil did economic growth truly awaken. The history of economic growth is, so far, the history of fossil fuels. This causes us to wonder whether economic growth will end when it is no longer powered by fossil fuels.

2013-01-08 The Forecast for Risk in 2013 by Geoff Considine (Article)

With the new year upon us, pundits are issuing their forecasts of market returns for 2013 and beyond. But returns don't occur in a vacuum – meeting clients' goals requires an asset allocation that appropriately balances return and risk. So what follows are my predictions for risk across major asset classes, based on a theoretically sound approach that has proven to be reliable in the past.

2013-01-08 Crystal Ball Gazing by Team of Bedlam Asset Management

Several recent government announcements are likely to impact the global economy and equity markets over the medium term. In order of importance these are: the Federal Open Market Committee pledge to target zero interest rates until unemployment reaches 6.5%; the new government in Japan, under an increasingly monetarist LDP leadership; commitments by the new Chinese leadership to boost domestic infrastructure and consumption; and finally, the softening line of the Republicans on the fiscal cliff.

2013-01-08 Brave New Start to the Year by Christian Thwaites of Sentinel Investments

Well that was fun. Negotiations went to the brink, we had politicians dropping the "F" bomb a few steps from the Oval Office, the Senate described as "sleep deprived octogenarians" by a congressman and an all around feeling that it was better than nothing. Welcome to the American Taxpayer Relief Act, which actually, er...raises taxes for everyone. That's right. No one in 2013 pays less than they paid in 2012. This is our best estimate of the fall out. It's definitely better than what was at risk back in November but it's still a net drag on the economy of around 1.0%.

2013-01-08 The Cliff, the Fed, and the Economy by Scott Brown of Raymond James

The budget deal removes a major uncertainty for the financial markets. We now know what tax rates will be. However, the American Taxpayer Relief Act (ATRA) has a number of drawbacks. The December 11-12 FOMC policy meeting minutes showed a split among Fed officials, but that doesn't necessarily mean that asset purchases will end any sooner. The economic data reports have been mixed but generally indicate that the recovery is in reasonable shape.

2013-01-08 From Cliff to Ceiling: No Clear Signal for Investors by Libby Cantrill, Josh Thimons of PIMCO

We expect the last minute deal in the lame duck session to result in about 1.3% of GDP contraction, slightly less than our earlier prediction of about 1.5%. The compromise eliminated (or at least delayed) the possibility of the most damaging equity market outcomes. The deal failed to set up a framework for structural deficit reform in 2013. Almost immediately, Congress must address the debt ceiling, the sequester and the continuing resolution to keep the government funded.

2013-01-08 Why China Won't Crack by Milton Ezrati of Lord Abbett

For the world's second largest economy, a hard landing scenario looks increasingly remote.

2013-01-08 Early 2013 Looks to Feature Slow Growth and Ongoing Fiscal Drama by Russ Koesterich of BlackRock Investment Management

Stock markets started 2013 off with a bang, as investors expressed relief over the down-to-the-wire agreement on the fiscal cliff that came on January 1. For the week, the Dow Jones industrial average jumped 3.8% to 13,435, the S&P 500 index rose 4.6% to 1,466 and the Nasdaq composite advanced 4.8% to 3,101. Although the deal reached last week was good news for the markets, Washington's fiscal soap opera is far from over. Although the deal reached last week was good news for the markets, Washingtons fiscal soap opera is far from over.

2013-01-08 Another Lost Year for Active Management by Chris Maxey, Ryan Davis of Fortigent

There is no doubt that 2012 will be remembered by many investors, for reasons both good and otherwise. One group less likely to remember the good of 2012 is active managers. Across the universe of hedge funds and mutual funds, relatively few were able to outperform their comparative benchmarks. This continues a long running trend of active managers lagging their less active counterparts and raises many questions about the efficacy of active management.

2013-01-08 Surging EM Corporate Bond Issuance: Cause for Concern? by Shamaila Khan of AllianceBernstein

New bond issuance by emerging-market companies boomed in 2012, leading to fears of a bubble. But we think this market growth is positive for investors, rather than a harbinger of soaring debt levels or deteriorating credit quality.

2013-01-07 Fiscal Cliff: No Grand Bargain, But Enough for Now by Joanna Shatney of Schroders Investment Management

Although the best case scenario is off the table, US markets are breathing a sigh of relief that the tax cliff has been averted at least for a few more months. The final package holds enough for both the bears given that we will have to revisit the fiscal worries in the next few months and for the bulls who believe that the near-term risks have been pushed aside.

2013-01-07 Fixed Income Asset Allocation Post-Apocalypse by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

December 21, 2012 the day the Earth was prophesized to collide with a black hole of kaputness has come and gone in defiance of the Mayan calendar. The more upbeat interpretation of the 5,125-year Mayan cycle, however, is that the end date doesn't signify Armageddon but rather the beginning of a new time for positive change here on earth. So allow us to suggest an investment playbook to cash in on this silver lining. In short, the sweetness of the metaphorical fortune cookie in your hand will depend on how you allocate your fixed income assets in 2013.

2013-01-07 Restricted Room for Higher Rates by Scott Minerd of Guggenheim Partners

Interest rates should rise through 2013, however, the level to which they can increase will be limited by the Federal Reserve's ongoing attempt to stimulate activity in the housing market.

2013-01-07 The Post-Crisis Crises by Joseph Stiglitz of Project Syndicate

In the shadow of the euro crisis and America's fiscal cliff, it is easy to ignore the global economy's long-term problems. But, while we focus on immediate concerns, they continue to fester, and we overlook them at our peril.

2013-01-07 Jobless Claims, a Surprising Result, Philly Fed and Ambr by Gregg Bienstock of Lumesis

This week we provide some thoughts on the recent Cliff deal and plunge into some surprising data regarding jobless claims. We conclude with a look at the Philly Feds Leading Index.

2013-01-07 Germany and Eastern Europe: Lessons in Free Trade by Team of Thomas White International

Economies in east and central Europe are attracting huge foreign investments into the automobile sector.

2013-01-07 US reaches Fiscal Cliff Deal, but Uncertainty Remains by Keith Wade of Schroders Investment Management

Higher taxes on the wealthy will not make a significant dent in consumption as they are likely to be largely met through lower saving. Despite the protestations of many Republicans, it is also difficult to see how an increase in the top rate of income tax from 35% to 39.6% will stifle American enterprise. However, the decision to allow the 2% payroll tax cut to expire will hit many families and is set to raise $95 billion, about 0.6% GDP.

2013-01-07 Investments That May Keep Me Up at Night in 2013 by Charles Lieberman of Advisors Capital Management

The outlook for 2013 is quite improved compared with 2012. Domestic economic growth prospects are significantly less troublesome. The election is over. Europe has (painfully) slowly made progress in reducing its own budget problems. It is not all clear sailing, however. (It never is.) Europe remains a work in progress. All of the geopolitical risks of 2012, notably North Korea, Iran, and all of the rest of the Middle East, remain on the docket in 2013. And the battle over the U.S. budget will resume in the near future.

2013-01-07 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The stock market has started the New Year in fine shape, relieved that President Obama's threat to raise taxes to the moon on capital gains and dividends were thwarted with the deal agreed to on New Year's Day.

2013-01-06 And That's the Week That Was by Ron Brounes of Brounes & Associates

Welcome to a new beginning, a new yeara new optimistic investor, a new bipartisan Congress, (well, maybe not). The more things change, the more they stay the same. While investors embraced the budget deal (that is less of a deal than a procrastination), the pragmatists realize that very little has changed other than the "fiscal can" has been kicked down the road for two months. Stocks skyrocketed; bonds plunged; politicos bickered. Welcome to 2013.

2013-01-06 Partial Deal: Perspectives on the U.S. Fiscal Policy Agreement by Team of Janus Capital Group

The U.S. Congress and President Barack Obama have patched together a deal that avoided the January 1 fiscal cliff. However, Washington has postponed a full resolution of fiscal and tax issues, creating continued uncertainty that can be expected to weigh on business and consumer spending and potentially keep U.S. gross domestic product growth below 2% in 2013.

2013-01-04 Newsletter by Harold Evensky of Evensky & Katz

As always I hope you will enjoy this issue, as much as I have enjoyed putting it together. Most important though I wish one and all a very happy, prosperous and healthy new year!

2013-01-04 In 2013, Resolve to Follow the Money by Frank Holmes of U.S. Global Investors

During these first days of January, many adopt an out with the old, in with the new, approach to shed bad habits or extra pounds. Washington opted for its same ol strategy when averting the fiscal cliff, as the addictive nature of can-kicking is a transatlantic sport, according to The Economist. The short-term fix did nothing to control the unsustainable path of entitlement spending on pensions and health care nothing to rationalize Americas hideously complex and distorted tax code... and virtually nothing to close Americas big structural budget deficit.

2013-01-03 Thailand: M&A Boom a Sign of Economic Resurgence? by Team of Thomas White International

Chaleo Yoovidhya was born in northern Thailand where his immigrant family scraped a living raising ducks and selling fruits. Without any formal education or vocational skills, he had nothing to fall back upon in his youth. But that didn't stop him from founding his own pharmaceutical company and developing what has turned out to be arguably the world's most popular energy drink Red Bull. In March 2012, Yoovidhya died aged 89 the third richest Thai and a towering figure in Southeast Asia's business community.

2013-01-03 ProVise Bullets by Ray Ferrara of ProVise Management Group

HAPPY NEW YEAR EVERYONE!We don't know what you did on Monday night to ring in 2013, but the U.S. Senate was in session as they were attempting to avoid the so-called "fiscal cliff".At 2:07 a.m. on New Year's Day the Senate passed a bill, 89 to 8, which does a number of different things.Then late that same morning, the House also passed the bill.We are going to touch on a few of the highlights in this opening Bullet and promise to give a more detailed analysis in our mid-month Bullets.

2013-01-03 Treasury's Last Pillar Crumbles by Peter Schiff of Euro Pacific Precious Metals

With the return of Shinzo Abe and his Liberal Democratic Party to power in Japan, the market for US Treasuries may be losing its last external pillar of support. Re-elected on September 26th, Abe has quickly set a course for limitless inflation, saying Japan must "free itself from deflation and the strong yen." This is significant to the global economy as Japan is the largest foreign power left with a strong appetite for US Treasuries. If this demand falters, the Fed may be the only remaining buyer of new Treasury issuance.

2013-01-03 Money for Nothin' Writing Checks for Free by Bill Gross of PIMCO

It was Milton Friedman, not Ben Bernanke, who first made reference to dropping money from helicopters in order to prevent deflation. Bernanke's now famous "helicopter speech" in 2002, however, was no less enthusiastically supportive of the concept. In it, he boldly previewed the almost unimaginable policy solutions that would follow the black swan financial meltdown in 2008.

2013-01-03 A Year on the Brink by Joseph Stiglitz of Project Syndicate

The two main surprises in 2012 were the slowdown in emerging markets, which was slightly sharper and more widespread than anticipated, and Europe's embrace of some truly remarkable reforms though still far short of what is needed. Looking to 2013, the biggest global economic risks are there and in the US.

2013-01-03 And That's the Week That Was by Ron Brounes of Brounes & Associates

Welcome to the end of 2012. Investors are hardly basking in the glow of a positive year for stocks. They are less than enthusiastic about the recovery in housing. They seem to be overlooking the actions of the Fed and the implications for the indefinite low rate environment. Two words remain firmly entrenched in the minds. FISCAL CLIFF. What say you (besides bickering and backstabbing)Prez O, Speaker Boehner, Senators McConnell and Reid? Time is running out and five straight down days proves that investors are growing more and more nervous. Happy New Year (I think).

2013-01-03 Outlook 2013: Fiscal Cliff Remains Unresolved, but Opportunities Still Exist by Russ Koesterich of BlackRock Investment Management

As we look ahead to 2013, it is impossible to make any sort of forecast without first turning our attention to the still-unresolved fiscal cliff debate. We have long said that unless we were to see significant movement on the issues of tax rates and entitlement spending, the most likely outcome would be some sort of bare-bones deal. At the time of this writing, congress and the President were still negotiating, but our analysis suggests that such a bare-bones resolution remains the most probable result, even if it does not come before the January 1 deadline.

2013-01-03 Grin and Bear It. by Scotty George of du Pasquier Asset Management

Without question, the financial markets yielded better in 2012 than what most had believed possible at the beginning of the calendar year. At that time, embroiled in a U.S. Presidential election and ongoing turmoil in the Middle East, many analysts would have been happy if we simply avoided catastrophe.

2013-01-03 High Yield Market Overview December 1, 2012 by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch U.S. High Yield Master II Constrained Index, posted a positive total return of 0.74% in November, as high yield investors focused on the fiscal cliff and the risk that the U.S. government fails to negotiate a resolution.

2013-01-03 And That's the Quarter that Was by Ron Brounes of Brounes & Associates

Politics ruled the day over the past three months (and beyond) and unfortunately the trend may very well continue as the averted "fiscal cliff" was merely postponed for another two months. For now, investors are happy, but what will tomorrow bring? (That's a question for you, Prez Obama and Speaker Boehner.) Happy New Year

2013-01-03 Congress Avoids the Cliff by Selling Us Down the River by Peter Schiff of Euro Pacific Capital

With the possible exception of the New York Times' editorial board (and the cast of The Jersey Shore), everyone on the planet understood that the United States Government needs to cut spending, increase taxes, or both. Instead, after months of political posturing and hand wringing, the Federal Government has just delivered the exact opposite, a deal that increases spending and decreases taxes. The move lays bare the emptiness of budget legislation, which can be dismantled far easier than it can be constructed.

2013-01-03 Taking Care of Business, DC-Style, to Avert the Fiscal Cliff by Liz Ann Sonders of Charles Schwab

No "grand bargain," but Congress got a deal done at the 13th hour to avert the fiscal cliff. The next two months will bring more DC wrangling and likely market angst, but we believe the outlook has brightened for the economy and market in 2013. The "wall of worry" is alive and well.

2013-01-03 5 Investment Ideas for a Post-Fiscal Cliff Deal World by Russ Koesterich of iShares Blog

As discussed in previous posts, Congress kicked off the New Year with a bare bones deal to avert (or at least delay) the fiscal cliff. Though markets responded positively to the news Wednesday morning, the euphoria isn't likely to last.

2013-01-02 How to Boost Your Team’s Morale by Beverly Flaxington (Article)

With the new year rapidly approaching, I want to instill enthusiasm and excitement for my team. We are concerned about the events in Washington and the price we will pay for inaction by our politicians. In the face of this, I want to remind my team of the value we provide for our clients. How can I instill the boost I'm seeking without seeming fake or forced?

2013-01-02 Brian McMahon on Thornburg’s Investment Income Builder Fund by Robert Huebscher (Article)

Brian McMahon is the chief executive officer and chief investment officer for Thornburg Investment Management, where he the co-portfolio manager for the $11.4 billion Thornburg Investment Income Builder Fund (TIBAX). The fund's goal is income production, and it has outperformed its benchmark, the Morningstar Moderate Target Risk, over the last ten years (10.87% versus 2.88%). In this interview, he offers his views on the economy and the markets, and how he has positioned his fund.

2013-01-02 Somewhere Over the Rainbow by John Mauldin of Millennium Wave Advisors

We are 13 years into a secular bear market in the United States. The Nasdaq is still down 40% from its high, and the Dow and S&P 500 are essentially flat. European and Japanese equities have generally fared worse. The average secular bear market in the US has been about 11 years, with the shortest to date being four years and the longest 20. Are we at the beginning of a new bull market or another seven years of famine? What sorts of returns should we expect over the coming years from US equities?

2013-01-02 Fiscal Cliff vs. Jimmy Cliff: How the leap may look more like Y2K or the Mayan calendar by Rob Isbitts of Sungarden Investment Research

As "Cliff" makes his way from post-election debate to complete absurdity I did some research. As it turns out, many of the potential outcomes of the Fiscal Cliff in January are in sync with the titles of popular songs from this Reggae superstar Jimmy Cliff. No, I'm not a Reggae fan, but it was pretty funny when I looked it up and I think I can get some points across while writing something that will keep advisors into the holiday spiritbefore reality returns soon.

2013-01-02 The Unstarvable Beast by Kenneth Rogoff of Project Syndicate

As US President in the 1980's, the conservative icon Ronald Reagan described his approach to fiscal policy as "starve the beast": cutting taxes will eventually force people to accept less government spending. So why has the cost of government not only in the US continued to rise inexorably?

2013-01-02 Pyrrhic Victory in the Budget Battle? by Charles Lieberman of Advisors Capital Management

President Obama kicked the Republicans' rear ends all over the ring in the budget battle and scored an overwhelming victory. He got pretty much everything he wanted, while giving up no more than token concessions. The lopsided mismatch between increased tax revenues from upper income households and the almost total absence of spending restraint implies that achieving real deficit reduction eluded negotiators to the long-term detriment of the economy.

2013-01-02 Where Munis and Government Budgets Meet by Rafael Costas of Franklin Templeton Investments

In the realm of municipal bonds, if you had been focusing on the bankruptcy filings or threats facing a few California cities that dominated the news headlines earlier this year, you couldn't have been blamed for concluding that the sector was a minefield. But then, as year-end approached, the state and local government story became more upbeat, and investors were flocking to the municipal market. Rafael Costas, co-director of the Franklin Municipal Bond Department, has ridden this kind of headline carousel before and he's used to seeing these types of stories cycle through.

2013-01-02 Emerging Markets Outlook by Armando Armenta of Invesco

There are a number of factors effecting the flows into emerging market economies. I'd like to review several of them in the medium term outlook and let you know why I doubt they will recede soon.

2012-12-31 Brief Holiday Update by John Hussman of Hussman Funds

Though our concerns still weigh heavily toward the defensive side, there are hints of progress toward the resolution of the lopsided market conditions we've seen.

2012-12-31 And That's the Week That Was by Ron Brounes of Brounes & Associates

Welcome to the end of 2012. Investors are hardly basking in the glow of a positive year for stocks. They are less than enthusiastic about the recovery in housing. They seem to be overlooking the actions of the Fed and the implications for the indefinite low rate environment. Two words remain firmly entrenched in the minds. FISCAL CLIFF. What say you (besides bickering and backstabbing)Prez O, Speaker Boehner, Senators McConnell and Reid? Time is running out and five straight down days proves that investors are growing more and more nervous. Happy New Year (I think).

2012-12-28 The Year's Surprises in Gasoline, Oil and Resources Stock Prices by Frank Holmes of U.S. Global Investors

On Wednesday, I talked about three of the top 10 commentaries that were popular over 2012. Here are a few more to highlights.

2012-12-28 ECRI Update: Flunking Recession 101 by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose in the latest public data. It is now at 128.3 versus the previous week's 127.2. Likewise the WLI annualized growth indicator (WLIg) rose, now at 5.4, up from last week's 4.6. WLIg has been in expansion territory since August 24th, although it is off its 6.0 interim high on October 12th.

2012-12-28 Don\'t Wait for the Robins: Investment Strategy for 2013 by Pamela Rosenau of HighTower Advisors

Warren Buffet once remarked, "If you wait for the robins, spring will be over." "Uncertainty" has been an overarching issue since the financial crisis of 2008 and one of the principal reasons that investors have remained on the sidelines away from the equity markets. As it has been a part of the investment lexicon, "uncertainty" will always exist in some capacity. In 2012, investors began by focusing on European issues, then the U.S. election, and now the fiscal cliff. In fact, when there is little uncertainty and investors appear unafraid, one should be more concerned.

2012-12-28 Readers' Golden Nuggets Focused on Gold, Resources and Overcoming Negativity by Frank Holmes of U.S. Global Investors

The past few days Ive been counting down the most popular commentaries over the past year. China, commodities and bond fund popularity were big hits; so were the Surprises in Gasoline, Oil and Resources Stock Prices. Here are the top four.

2012-12-27 The Ten Best Articles You Probably Missed by Robert Huebscher (Article)

Great articles don't always get the readership they deserve. We've posted the 10 most-widely read articles for the past year. Below are another 10 that you might have missed, but I believe merit reading.

2012-12-27 Saving for Retirement Stage 3: Making Retirement Funds Last as Long as You Do by Team of Franklin Templeton Investments

So you're finally ready to retire. You've worked hard. You've planned. You've saved. You're ready to toss the business section and flip to the travel pages. You hope the investment decisions you've made have positioned you to meet your future needs. You may be retired, but your money has to keep working, and luck, as they say, tends to favor the prepared. In this third installment of our "Saving for Retirement" series, we take a look at some considerations and strategies for those fortunate folks beginning or living in retirement.

2012-12-26 Gundlach's High-Conviction Investment Idea by Robert Huebscher (Article)

Count Jeffrey Gundlach among those who expect Japan's currency to collapse because it can't service its debt. Japan's challenges may parallel those that the US faces, and Gundlach feels strongly that they have created a compelling investment opportunity.

2012-12-26 How to Develop Unsinkable Conviction by Mariko Gordon (Article)

In our tumultuous business, conviction is a necessary ingredient for ensuring clear decision making and success. Here are two unconventional techniques for boosting yours.

2012-12-26 Assessing ISG's "Ten for '12" by Investment Strategy Group of Neuberger Berman

Earlier this year, we offered a forward-looking view of 10 macro themes that we anticipated for 2012. These ideas were meant not to be "surprises" but rather guideposts within the context of a longer-term strategic allocation. At year-end, we are pleased to note that seven of our 10 themes fully materialized. We provide a brief look below.

2012-12-26 Why China is a Reason for Optimism by Robert Horrocks of Matthews Asia

"China has taught me how to think about growth. Consider its stable political environment: it has gone from revolutionary upheaval to smooth (almost boring) transitions of power."

2012-12-26 Over The Cliff by Scott Brown of Raymond James

Leaders in Washington failed to reach an agreement on the fiscal cliff. What does that mean for the 2013 outlook?

2012-12-24 Aspirin for a Broken Femur by John Hussman of Hussman Funds

The Federal Reserve under Bernanke is like a bad doctor facing a patient with a broken femur. Being both unable and unwilling to restructure the broken bone, he announces that he will keep shoving aspirin down the patient's throat until the bone heals.

2012-12-24 Emerging Markets Equity - Monthly Product Commentary: November 2012 by Team of Thomas White International

Sustained domestic demand growth and a revival in export demand are anticipated to drive expansion next year.

2012-12-21 Republican Sellout Invites Stagflation by John Browne of Euro Pacific Capital

While it may not be a surprise that the Republicans are preparing to yield on their vow to oppose tax hikes, it should raise investor concerns the world over that an upcoming budget agreement will likely involve a Congressional surrender of its authority to set the federal debt ceiling. In exchange for this, it appears that the Republicans have simply done nothing to halt, or even curb, the dangerous federal spending trajectories or the current drift towards greater state control of the economy.

2012-12-21 The Outlook for Commodity Stocks by Doug Ramsey of Leuthold Weeden Capital Management

Popular sentiment holds that commodities remain in a secular uptrend, but commodity-oriented stocks (Energy and Materials) have been underperforming for more than a year-and-a-half. Were increasingly convinced their 2008 relative strength highs won't be challenged for a very long time. Yes, Emerging Market demand may rebound next year. But remember Econ 101, and the day your professor discussed supply? This side of the equation doesn't look as good. Among the two commodity-based sectors, Energy looks cheaper and appears much more washed out from a sentiment perspective.

2012-12-21 Fixing the Debt Problem - What Does Success Look Like? by Gregory Hahn of Winthrop Capital Management

While we do expect issues surrounding the "Fiscal Cliff" will ultimately be resolved, negotiations will likely go all the way up to the inauguration in January. The question is: What does success look like? We believe that in order to achieve sustained economic growth, we need to address the structural problems that are impeding business investment and commerce. These structural problems include the large deficits we are running as a country.

2012-12-21 Egypt's Arab Winter by Mark Mobius of Franklin Templeton Investments

It's been almost two years since the "Arab Spring" swept North Africa and the Middle East, and with it, grand hopes for change. Sometimes, change doesn't happen as quickly as the people would like, and oftentimes it can be a messy process. That is certainly true in Egypt right now, a country that is still in the throes of shaping its future. The ousting of Hosni Mubarak in 2011 didn't instantly transform the nation into a model of democracy, and the country is currently deliberating the best way forward via public debates, protests and the election process.

2012-12-21 "Frack and Slack" Put U.S. Trade in the Black? by Milton Ezrati of Lord Abbett

Could it be that the U.S. trade balance is headed into the black? At first blush, the prospect looks dubious. This country's trade deficit has drifted deeper into the red for so many decades now that few can even conceive of lasting improvement. Even so, that is what seems to be in prospect.

2012-12-21 The Barbarous Relic Expresses an Opinion by John Gilbert of GR-NEAM

Gold has a long and varied history in economics and finance. Otherwise sensible people lose rationality and logic when conversation turns to the subject, with some rising to passionate romance, and others to apoplexy. It elicits neither for us, which allows us an attempt at a reasoned view. That is more important today than usual, because there is a message in gold's price behavior, and it is not an encouraging one. That message is that not only are rates of return low at the moment, but they may remain there for some time.

2012-12-21 ECRI Update: The Recession Call Is Further Undermined by Doug Short of Advisor Perspectives (dshort.com)

TheWeekly Leading Index(WLI) of the Economic Cycle Research Institute (ECRI) slipped fractionally in the latest public data. It is now at 127.2 versus the previous week's 127.4. However, the WLI annualized growth indicator (WLIg) rose, now at 4.6, up from last week's 3.9. WLIg has been in expansion territory since August 24th, although it is off its high at 6.0 on October 12th.

2012-12-21 How to Screen for Wonderfully Boring Stocks by Bill Smead of Smead Capital Management

In a December 7, 2012 piece for Barrons.com, Mark Hulbert shared the research from a study called "Low Risk Stocks Outperform within All Observable Markets of the World." The study, written by Nardin Baker and Robert Haugen, convincingly made the argument that boring stocks are wonderful for superior compounded returns regardless of which country you measure.

2012-12-21 Lights, Camera and Action in China by Winnie Phua of Matthews Asia

More than a decade ago, China reached a turning point in its film industry with the co-production of its first internationally acclaimed movie hit, "Crouching Tiger, Hidden Dragon." The film, directed by Academy Award winning Taiwanese American director Ang Lee, raked in more than US$213 million globally, and became the highest grossing foreign language film in U.S. history. Pretty good for a movie made in China on a US$17 million budget.

2012-12-21 The Big Four Economic Indicators: Real Personal Incomes Improve Significantly By Doug Short by Doug Short of Advisor Perspectives (dshort.com)

The weight of these four in the decision process is sufficient rationale for the St. Louis FRED repository to feature achart four-packof these indicators along with the statement that "the charts plot four main economic indicators tracked by the NBER dating committee." Here are the four as identified in the Federal Reserve Economic Data repository. See the data specifics in the linkedPDF filewith details on the calculation of two of the indicators.

2012-12-21 The Japanese Economy: The Result of the Lower House Election by Team of Nomura Asset Management

The Liberal Democratic Party (LDP) reclaimed power in a landslide victory. Together with coalition partner, the New Komeito Party, the LDP secured 325 seats giving it two-thirds of the total seats, which allows them to pass legislation by using the supermajority position in the lower house. This will enable them to overrule the upper house where no party currently holds an overall majority, otherwise requiring the LDP to consult with opposing parties. In addition, on an individual case by case basis, the LDP would be able to seek cooperation from the third party Japan Restoration Party.

2012-12-20 2012 in Review by Investment Strategy Group of Neuberger Berman

As we approach the New Year and contemplate the opportunities the investment landscape may offer in 2013, it helps to look back at the performance trends of 2012. Overall, the year-to-date period has seen impressive results from various risk assets, which is in line with the projections of our Asset Allocation Committee. However, ongoing concerns about volatility and Europe hampered the markets at times. Here, we provide a performance scorecard and consider potential developments in the year ahead.

2012-12-20 Japan: Abundant Opportunities Despite Debt-Induced Deleveraging Cycle by David Nadel, Dilip Badlani of The Royce Funds

Over the last two decades, Japan has suffered under the malaise of deflationary deleveraging after its stunning growth between the 1960s through the end of the 1980s. In 1991, economists were predicting that Japan would overtake the U.S. as the world's largest economy by 2010. Instead, Japan's GDP has stayed largely stagnant over this time period as the country has been trapped in a debt-induced deleveraging cycle.

2012-12-20 Can China Double National Income by 2020? by Daisuke Nomoto of Columbia Management

Xi Jinping, China's newly elected president, was the featured speaker at the recent National Congress. However, I felt the most interesting point to come out of the event was outgoing President Hu Jintao's announcement of a plan to double Chinas national income by 2020. This plan is reminiscent of a similar program launched in Japan in the 1960s, spearheaded by Prime Minister Ikeda, where the goal was also a doubling of national income. The two programs have a number of parallels despite the multi-decade time gap between them.

2012-12-19 Accenture: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of Accenture (ACN) through the lens of FAST Graphs fundamentals analyzer software tool.

2012-12-19 Energen Corp: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of Energen Corp (EGN) through the lens of FAST Graphs fundamentals analyzer software tool.

2012-12-19 Is Japan Turning a Corner? by Carl Delfeld of Investment U

Here is some political trivia you can use at your next holiday cocktail party. Who is the only U.S. president to lose re-election and then come back to win again? Grover Cleveland. In fact, while saying goodbye to the White House staff, the young and vivacious Mrs. Clevelands last words were, "we'll be back".

2012-12-19 2013: A Year in Multi-Asset Investing by Johanna Kyrklund of Schroders Investment Management

Extreme political risk is reduced but the cyclical environment remains challenging. Safe havens are expensive and we are increasingly incentivized to take on more risk. Equity valuations are attractive. Our core emphasis remains on quality although there is tactical opportunity in pockets of extreme value.

2012-12-19 With German Growth Slowing, Time to Take Some Profits? by Russ Koesterich of iShares Blog

Overweighting Germany has made a great deal of sense this year, but now Russ gives 3 reasons why it may be time to take some profit and revert to a neutral position.

2012-12-19 Imagine...a Better Future by Liz Ann Sonders of Charles Schwab

After a weekend of sadness and reflection, I wanted to write something more optimistic we'll go back to the future to learn and unlearn.

2012-12-19 PIMCO Cyclical Outlook for Europe: Policy Developments Will Shape Growth Prospects and Risks by Andrew Balls of PIMCO

Policy developments in particular, the European Central Banks acceptance of its role as a lender of last resort have helped to normalize European financial markets but been insufficient to promote decent growth. Eurozone leaders recently laid out a long-term roadmap to achieve stability, but the plan faces great execution risk, technically and politically, and in cross-border coordination. We continue to take a cautious approach and underweight European credit risk and European financials in general, looking for specific opportunities rather than broad exposure.

2012-12-19 ING Fixed Income Perspectives December 2012 by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

While all the good little boys and Cindy Lou Whos dream of sugar plums and new iPhone 5s in blue, the adults in our modern-day Christmas story can't sleep but a wink, as visions of getting Scrooge'd by the fiscal cliff are making hearts sink. No matter if this political humbug cease or persist, down the chimneys of a recuperating housing market Ol' Saint Bernanke-olas will continue to gift $85 billion of Treasury and MBS purchases per month or more until the labor market can finally get over the hump and deliver 6.5% unemployment and inflation of 2.5% and no more.

2012-12-19 The Consumer Catalyst in Asia's Emerging Markets by Andrew Sleeman of Franklin Templeton Investments

There may be no better evidence of the economic power of the consumer than the spending frenzy that occurs this time of yearthe sparkling lights, the must-have gifts and gadgets, the indulgent meals. Whether online, brick and mortar, big box or mom-and-pop, retailers count on the year-end consumer boom.

2012-12-18 Jeremy Siegel on 'Dow 15,000' by Robert Huebscher (Article)

Jeremy Siegel was one of very few individuals to have correctly predicted the strong performance of the equity markets over the last year. The Wharton professor and author of the renowned book, Stocks for the Long Run, forecasts continued strong performance for the year ahead.

2012-12-18 Comparing Long-Term Care Alternatives by Joe Tomlinson (Article)

Should clients buy expensive long-term care insurance they might never need, or go without insurance and risk a big hit to their life savings? For advisors whose clients face this critical dilemma, there's now a third option: life insurance and annuity products that also incorporate long-term care insurance.

2012-12-18 Three Takeaways from the Fed by David Rosenberg (Article)

The equity market likes the prospect of more money printing and the Fed's more forceful efforts to reflate the economy, and stocks are a far better inflation hedge than bonds.

2012-12-18 Better Angels by Michael Lewitt (Article)

If all else fails, President Obama should lock the members of Congress inside the Capital about a week before Christmas, post the military at the door, hang big-screen television in each chamber, tune them to CNBC, and turn up the volume up. Faced with listening to endless repetitions of the words "rising above" or "fiscal cliff" or "kick the can down the road," our legislators will have no trouble reaching a compromise quickly.

2012-12-18 The Case for Conservative Optimism by Clark M. Blackman II (Article)

Advisors should heed the wisdom from George Washington: Troubles pass. Tomorrow will be better. This kind of optimism is the key to finding success as an investor, as a businessperson, and in life.

2012-12-18 What's Going Right? by Chris Maxey, Ryan Davis of Fortigent

Discussions of the fiscal cliff are capturing investor's attention, largely at the expense of trends pointing in the right direction. Year-end is synonymous with future prognostications, but current indicators suggest there is reason to be optimistic about the turn of the calendar this holiday season.

2012-12-18 The Fed's Giant Stride by Christian Thwaites of Sentinel Investments

FOMC: The news from this meeting was widely telegraphed (see Yellen, Evans, etc. last month) but produced some real and welcome developments. Here's the quick summary.

2012-12-18 Energy Face-Off: North American Energy Independence vs. Canada's Export Plans by John Devir of PIMCO

President Obama's November 2011 postponement of a decision on whether to permit an oil pipeline from Canada's oil sands to the U.S. Gulf Coast caused a barrage of protests and negative press in Canada. Canada's new focus on building capacity to sell to Asia-Pacific could hinder U.S. ambitions of energy independence from overseas oil, since the U.S. imports roughly 30% of its crude oil from Canada. We see investor opportunities in rail transportation and pipeline systems that possess excess capacity.

2012-12-18 Central Bank Insurance by John Mauldin of Millennium Wave Advisors

Possibly, the question I am asked the most is, "What do you think about gold?" While I have written brief bits about the yellow metal, I cannot remember the last time I devoted a full e-letter to the subject of gold. Longtime readers know that I am a steady buyer of gold, but to my mind that is different from being bullish on gold. In this week's letter we will look at some recent research on gold and try to separate some of the myths surrounding gold from the rationale as to why you might want to own some of the "barbarous relic," as Keynes called it.

2012-12-18 Cliff Diving by Jerry Wagner of Flexible Plan Investments

A "fiscal" cliff potentially to be caused not by the confluence of divers, swirling ocean and towering cliffs, but by a huge impending tax increase and self-imposed unspecified cuts that must be made automatically at year end to essential defense and social welfare programs, all to deal with a tidal wave of government spending, resulting in a nation drowning in debt.

2012-12-17 Roach Motel Monetary Policy by John Hussman of Hussman Funds

Monetary policy has become a roach motel easy enough to get into, but impossible to exit.

2012-12-17 Fed Talks Louder, To Little Avail by Brian Wesbury, Bob Stein of First Trust Advisors

When someone doesn't speak your language, yet you must communicate, funny things can happen. At first, most just talk normally, hoping the message somehow gets through with a hand gesture or two. If that doesn't work, some people start talking really slowly. And if all else fails, how about saying it REALLY LOUDLY, and emphatically, to finally get our point across. That's where the Federal Reserve is today. In its own collective mind, it has a very important message to convey: that monetary policy is going to be as expansionary as necessary to get this economic recovery off the ground.

2012-12-17 Growing Dividends by Charles Lieberman of Advisors Capital Management

Dividends are rising rapidly. I'm not referring to the surge in special dividend payments that are intended to get ahead of the expected hike in tax rates on dividends in 2013, although that's also significant. I am referring to the ongoing week after week hike in regular dividends being reported by companies, as firms cope with high level of cash flow that adds to their record cash position. Stocks are cheap and growing dividends will only make them appear even cheaper.

2012-12-17 Cliff Concerns by Team of Janus Capital Group

As negotiations over the fiscal cliff go down to the wire, potential tax hikes and spending cuts threaten a number of industries. Our sector analysts share their insights on the key issues facing the industries they cover. While we are monitoring the fiscal cliff's impact on sectors and individual companies, our portfolio managers are not making major changes based on unpredictable political outcomes.

2012-12-17 The Fed's New Math and What It Means by Kristina Hooper of Allianz Global Investors

Central bankers are scrapping the use of a timeline to determine how long to keep interest rates at record lows. Rather, they will tie rate increases to specific unemployment and inflation targets. There is definitely more clarity around the Fed's decision making now than ever. The question is, will such "outcome targeting" really change the outcome? In looking at the last three economic recoveries, the average time it took for unemployment to fall from 7.7%, our current level, to 6.5%, was 26.6 months.

2012-12-17 Fiscal Cliff Deadlines Draw Near by Russ Koesterich of BlackRock Investment Management

In addition to the seemingly never-ending focus on the fiscal cliff, markets turned their attention to last week's Federal reserve meeting and the corresponding announcement of the central bank's continuation of its bond-purchase program. Following a very brief rally after the announcement, however, stock prices fell and ended the week marginally lower. For the week, the Dow Jones industrial average declined 0.2% to 13,135, the S&P 500 index fell 0.3% to 1,413 and the NASDAQ composite dropped 0.2% to 2,971.

2012-12-17 2013: A Year in Global Emerging Markets by Allan Conway of Schroders Investment Management

We expect emerging market equities to deliver solid performance during 2013 and perform even better over the longer term. Emerging markets look extremely attractive in terms of valuations. We believe the Chinese economy has stabilised and will see a modest recovery next year and that tail risks in the developed world have been reduced for now by central bank policy.

2012-12-17 The Fed: Targets, Thresholds, Guideposts, and Goals by Scott Brown of Raymond James

As expected, Federal Open Market Committee announced that purchases of Treasuries will be added to QE3 in 2013 (the Fed will continue to buy $40 billion per month in mortgage-backed securities and $45 billion per month in long-term Treasuries). Fed policymakers also announced threshold guidance on the overnight lending rate, which will make the Fed's policy intentions clearer, and that's a good thing.

2012-12-17 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

It's not surprising that the markets responded with a resounding "so what" to Fiscal Cliff negotiations in Congress, and a Federal Reserve pronouncement that it intends to tie low interest rates to low unemployment for the foreseeable future, in order to maintain whatever stimulus effect low-cost borrowing might be having upon economic development.

2012-12-17 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The stock market has gone into a trance as we approach the end of the year. The uncertainty around fiscal policy, along with concerns over Apple and the economy at large have caused institutions to wait for the dust to clear.

2012-12-15 Looking Back to Look Ahead by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Markets have been more focused on short-term forces; not least being Washington and the fiscal cliff negotiations. But taking a step back and gaining some longer-term perspective can help investors better weather short-term volatility. Even beyond the fiscal cliff, Washington and fiscal policy will likely remain in focus next year. Monetary policy is also front-and-center with the Fed maintaining its extremely accommodative policy and targeting specific economic conditions instead of providing calendar guidance. Europe managed to make it through the year, but challenges and risks remain.

2012-12-15 The Cost of Viewing the US as a Safe Haven by Russ Koesterich of iShares Blog

Since exiting the recession in mid-2009, US stocks have significantly outperformed international markets. But can the United States still be viewed as a safe port in a storm? Russ K explains why it might be time for investors to consider raising their allocation to international stocks.

2012-12-15 ProVise Bullets by Ray Ferrara of ProVise Management Group

So help us understandwhere did 2012 go? While we know time really fly, it sure feels like it does when we think that 12 months have almost passed. We want to wish you and your family the happiest of holidays! Please remember the women and men serving in our Armed Forces, especially those overseas.

2012-12-15 Fed Announces QE4 Starting Next Year by Gary Halbert of Halbert Wealth Management

I continue to believe that President Obama is willing to let the economy go over the cliff and blame the Republicans. Obama is hell-bent on raising taxes on those in the top two brackets; he campaigned on it; and I dont think he will back off. It remains to be seen if the Republicans will cave.

2012-12-15 Rooting Out Biases in Hedge-Fund Data by Daniel Eagan of AllianceBernstein

In a recent article, I discussed the conclusions about hedge funds historical returns and risk we reached after rooting out biases in the data available. Heres how we sought to eliminate those biases.

2012-12-14 2013: A Year in Global Equities by Virginie Maisonneuve of Schroders Investment Management

Global equities are very attractively valued and we are positive for their prospects in 2013 as the global economy normalises. Progress in Europe, the end of China's growth slowdown and continued momentum in the US economic recovery will support global equities. Longer-term investors must position themselves for a growth-saturated world in which sustainability and innovation will be even more important.

2012-12-14 ECRI Weekly Update: Walking the Recession Plank by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose in the latest public data to its highest level since early August of 2011. It is now at 127.7, up from a downwardly revised 126.7 in the previous week. See the WLI chart. The WLI annualized growth indicator (WLIg) also rose, now at 4.4 from last week's 3.5. WLIg has been in expansion territory since August 24th, although it is off its high at 6.0 on October 12th.

2012-12-14 The Big Four Economic Indicators: Industrial Product and Retail Sales Brighten the Picture by Doug Short of Advisor Perspectives (dshort.com)

This morning I've added two more of the Big Four for November: Industrial Production from the Federal Reserve, the purple line in the chart below and Real Retail Sales, the green line.

2012-12-14 No Way Out by Peter Schiff of Euro Pacific Capital

By upping the ante once again in its gamble to revive the lethargic economy through monetary action, the Federal Reserve's Open Market Committee is now compelling the rest of us to buy into a game that we may not be able to afford. At his press conference this week, Fed Chairman Bernanke explained how the easiest policy stance in Fed history has just gotten that much easier. First it gave us zero interest rates, then QEs I and II, Operation Twist, and finally "unlimited" QE3.

2012-12-14 Fiscal Friction is Taking a Toll on Confidence in Washington and Rome by Carl Tannenbaum of Northern Trust

Fiscal friction is taking a toll on confidence in Washington and Rome. What inflation rate should be used to index entitlements? Our updated US forecast assumes a budget resolution before year end.

2012-12-13 FOMC: More of the Same on QE, But New Language to Guide It by Team of Northern Trust

The Fed's decision to increase the scope and size of the quantitative easing program following the two-day FOMC meeting was largely expected. Its choice of new wording to express its posture came sooner than expected.

2012-12-13 Decoupling From the Eurozone by Scott Minerd of Guggenheim Partners

Recent positive data releases from the U.S. and Asia seem to indicate that global investors should not expect to be severely affected by the ongoing problems in the eurozone.

2012-12-13 Rescuing the Bond Deer from the Bond Bear by Mike Temple of Pioneer Investments

It's the season to talk about the man who delivers presents. No, not Santa Claus, but Fed Chairman Bernanke who has been delivering the green stuff for the past four years in a helicopter, not a sleigh... My last installment introduced the Fixed Income Bond Deer the investor caught in the headlights confused about what to do. This week we contemplate the following: should "Bond Deer" be grateful for the green stuff or frightened by the possibility that it is fueling the next bond "bear" market? The answer: it depends on how long this experiment continues.

2012-12-13 Will China's New Leaders Rise to Reform? by Mark Mobius of Franklin Templeton Investments

While the uncertainty wrought by the election process in democratic countries may be largely absent in China, the country's gradual transition to new leadership and the likely new course for the country over the next decade still raises questions. In March 2013, the National People's Congress, China's parliament and highest state body, intends to formally usher in China's leadership, and some members of the "old guard" are retiring. Will China's new leaders continue to reform the economy, moving it toward a domestic consumption model, and still be able to maintain enviable growth rates?

2012-12-13 2012 in Review by Investment Strategy Group of Neuberger Berman

As we approach the New Year and contemplate the opportunities the investment landscape may offer in 2013, it helps to look back at the performance trends of 2012. Overall, the year-to-date period has seen impressive results from various risk assets, which is in line with the projections of our Asset Allocation Committee. However, ongoing concerns about volatility and Europe hampered the markets at times. Here, we provide a performance scorecard and consider potential developments in the year ahead.

2012-12-13 Conditional: Fed Drops 2015 in Favor of 6.5% and 2.5%185 by Liz Ann Sonders of Charles Schwab

The Fed announced it's adding $45 billion in US Treasury purchases to QE3s $40 billion in MBS purchases and moving to economic versus calendar targets.

2012-12-13 The Fake Economy by Bill Mann of Motley Fool Funds

A random question for you (one that contemplates your breaking federal law, so be forewarned): Given enough time and ample resources, do you think you could create a reasonable facsimile of a $20 bill? I'd wager that given modern printing capabilities, a reasonably diligent and determined individual could create a fool-some-of-the-people copy of a $20 bill.

2012-12-13 3 Potential Scenarios for 2013 by Russ Koesterich of iShares Blog

Despite getting lucky in 2012, many of the major risks that economies and markets faced this year remain. With the current environment in mind, Russ K shares his 3 potential scenarios for 2013 along with potential investment strategies for each.

2012-12-13 Pacific Basin Market Overview - November 2012 by Team of Nomura Asset Management

Asian equity markets ended higher this month, although they were heavily influenced by events elsewhere. Improved economic data from Germany, coupled with expectations that Greece will receive a further round of financial support from the European Union (EU), helped to lift sentiment. Meanwhile, investors were paying close attention to the American congressional budget negotiations to avoid the looming year-end "fiscal cliff" risk to the economy, although U.S. economic data was generally positive.

2012-12-13 2013: A Year in Emerging Market Debt (Relative Strategies) by James Barrineau of Schroders Investment Management

Perhaps the biggest positive for emerging market debt investors is the deteriorating fiscal and economic fundamentals in the developed world. As the asset class has evolved, the opportunity set for investors has grown rapidly. Local currency in emerging markets has attracted tremendous interest but we think returns will moderate in 2013, possibly significantly.

2012-12-12 Does China Pass the Smell Test? by Bill Smead of Smead Capital Management

We at Smead Capital Management believe that prolonged faith in China's economy and the belief that emerging market growth will be an elixir for developed market multi-national companies is the erroneous gift that just keeps giving. If China's economy has been successfully soft landed from its boom, why is the internal Shanghai Composite index making new lows as recently as last week (November 29th, 2012)?

2012-12-12 Mish Shedlock Exposed by Peter Schiff of Euro Pacific Capital

In January 2009, just as the "Peter Schiff was Right" YouTube video that catalogued my previously derided predictions about a coming financial collapse was racking up views and attracting mainstream attention, a blogger and investment advisor named Mike Shedlock (aka "Mish") saw an opportunity to make an unethical grab at my current and prospective clients by breaking the nascent wave.

2012-12-12 Nu Skin Enterprises: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of Nu Skin Enterprises (NUS) through the lens of FAST Graphs fundamentals analyzer software tool.

2012-12-12 Low Volatility, Attention & Asset Growth by Matt Malgari of Knight Capital Group

Infused with the vicissitudes of quarreling politicians, growing mountains of debt and stagnant economies in much of the developed world, investors have been faced with a virtual bull market in "worry" and, oddly, an actual bull market in U.S. equities over the last couple of years. Chief among the beneficiaries of the newfound obsession with geometric returns appears to be "low-volatility" products which have begun showing up in force across the investment universe.

2012-12-12 Jobs Growth, Cliff Negotiations Continue Slow Pace by Russ Koesterich of iShares Blog

As Russ K has said in the past, the danger posed by the fiscal cliff is not solely whether we go over the side or not it also matters what shape our economy is in before the plunge. Last week's jobs report may have seemed like good news for the latter, but unfortunately a closer look at the numbers revealed a mixed bag.

2012-12-12 To QE Infinity, and Beyond! by Brian Wesbury, Bob Stein of First Trust Advisors

The Federal Reserve made two big changes today, but changes that were mostly anticipated by the markets.

2012-12-11 Shared Sacrifice by David Rosenberg (Article)

Now that everyone is focused like a laser beam on Fiscal Armageddon, it may be more appropriate to look at what is happening on Main Street rather than Washington. Looking ahead, it is going to be more about the economy, and taking it a step further, at times like these, it is important to understand where the real economic power resides, and this is with the people.

2012-12-11 The Next Generation of Income Guarantee Riders: Part 3 (The Income Phase) by Wade Pfau (Article)

In this third and final installment in my series on guarantee riders, I'll focus on the post-retirement income supported by income guarantee riders for variable annuities (VA/GLWBs), stand-alone living benefit riders (SALBs), and an unguaranteed portfolio of mutual funds. I'll highlight how differences among these products affect their end results, while also investigating what roles guarantees can most appropriately play in a retirement portfolio.

2012-12-11 Fine Wine - Why it's for More than Just Drinking by Mark E. Ricardo, JD, LLM, AAMS (Article)

For many investors, an ideal asset class would combine superior long-term absolute and risk-adjusted returns with a hedge against inflation and stock market volatility. There's a way to get all of that, in an asset class you might never have thought of until now: fine wine. Investment-grade wine deserves careful consideration, particularly now that - unlike other collectibles, such as art and rare books - it can be traded on a regulated exchange.

2012-12-11 The Death of Managed Futures? by Chris Maxey, Ryan Davis of Fortigent

Managed futures strategies, or systematic trend followers, have long been an important component of diversified high net worth portfolios. Because of their ability to go both long and short in more than 100 global futures markets spanning equities, currencies, commodities, rates, and bonds managed futures have historically generated very uncorrelated performance to traditional investments.

2012-12-11 Tax Reform: A First Step by Clyde Kendzierski of Financial Solutions Group

I rarely use this space to rant about political issues, but the recent election made it obvious just how dysfunctional the American political process has become. The ongoing financial crisis in the US will never get fixed as long as both political parties remain focused on solutions that make the problem worse. The Democrats want to give people more money to spend, claiming this will grow the economy. The Republicans want to cut taxes, so that people have more to spend, claiming that will grow the economy

2012-12-11 Peak Oil or Peak Energy? A Happy Solution by John Mauldin of Millennium Wave Advisors

A consistent theme in this letter has been the connections between items that may seem to be far removed from each other but are actually linked at the very core. If you push on one end you get a reaction in what would seem to be the most unlikely spots. Today we explore the connection between the fiscal deficit and energy policy.

2012-12-11 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The stock market continues to have one eye on Washington DC and the other on the various global concerns of slowing growth and European disintegration. The net result was another quiet and slow week of trading.

2012-12-11 Fiscal Cliff-Hanger by Scott Brown of Raymond James

The recent economic data are consistent with a moderate pace of growth in the near term. The manufacturing sector is mixed, but generally weak, reflecting a global slowdown and an inventory correction. The consumer appears to be hanging in there. The Bureau of Labor Statistics said that Hurricane Sandy did not have a significant impact on the November employment data. However, other economic indicators did reflect weather-related disruptions, which appear to have been only temporary. Meanwhile, the economy heads toward the fiscal cliff.

2012-12-11 New York, New York by Jeffrey Saut of Raymond James

I have loved New York since working on Whitehall Street in the early 1970s. Every year I return around this time of the year to attend Minyanville's Festivus event to raise money for the financial education of underprivileged children. Last week I spent time attending said event, seeing institutional accounts, doing media, and renewing friendships. I was surprised, however, to see pumps still sucking water out of the subway.

2012-12-11 PIMCO Cyclical Outlook: At Policy Crossroads by Saumil Parikh of PIMCO

The maturation of the global cyclical growth phase suggests we look to a handoff to more secular drivers of growth. But strong secular drivers remain elusive due to the continuation of New Normal headwinds.Policies are at important crossroads in every major economy. 2013 will be the year of policy change, with policymakers in major economies challenged to enact structural changes that spur private sector growth before government-balance-sheet-led growth is exhausted.

2012-12-10 Secular Bear Markets - Volatility Without Return by John Hussman of Hussman Funds

There is enormous risk, in my view, in the temptation to accept zero interest rates and low single-digit prospective market returns as an enduring characteristic of the financial markets while ignoring the unsustainable distortions that have produced this environment.

2012-12-10 Food, Water, Electricity & Shelter by John Petrides of Advisors Capital Management

As investors continue to grapple with near term, well documented, uncertainties surrounding the fiscal cliff and global economy, the market continues to present some interesting long term investment opportunities, particularly in our Growth strategy.

2012-12-10 13 for '13 by Richard Bernstein of Richard Bernstein Advisors

Each December we publish a list of investment themes that we feel are critical to the coming year. We continue to believe that US equities are in the midst of a major bull market that could ultimately rival 1982's bull market. It is hard to be bearish when one considers the following.

2012-12-10 Have the New Paper Clips Arrived, Enid? by Christian Thwaites of Sentinel Investments

If there's one economic stat that spans the economic/political spectrum, it's jobs. Last week's NFPs had a headline of 146,000, way above estimates, and an unemployment rate of 7.7%, the best since December 2008 and a comfortable one point below a year ago.

2012-12-10 Property Taxes Paid, More on Housing and A "Quote of the Week" by Team of Lumesis

This week we will take a look at property tax data released this week, housing-related data and the possible impact of the same. Before doing so, a reminder from last week, a brief word on the deficit reduction talks (notice we did not use the "C" word) and a quote worth considering.

2012-12-10 Is QE4 Really Coming? by Brian Wesbury, Bob Stein of First Trust Advisors

The Federal Reserve meets this week. Analysts are supposing and predicting what the statement will say and if the Fed will change its economic projections.

2012-12-08 How Gold Miners Can Leverage the Price of Gold by Frank Holmes of U.S. Global Investors

Gazing into their crystal balls this week, Wall Street firms interpreted differing futures for gold next year. Morgan Stanley awarded gold the best commodity for 2013 while Goldman Sachs called the end of the metals hot streak. After seeing 11 consecutive years of positive performance from gold, one needs to be wary of research analysts price forecasts, as they have consistently underestimated the shifting dynamics driving the precious metal higher.

2012-12-08 Weekly Economic Commentary by Team of Northern Trust

What are the margins of monetary policy? The November job report showed only modest improvement. Japan continues to struggle, with a change of government on the horizon.

2012-12-07 ECRI Weekly Update: More Recession Flag Waving by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose slightly in the latest public data. It is now at 126.8, up from an upwardly revised 126.2 in the previous week. See the WLI chart in the Appendix below. The WLI annualized growth indicator (WLIg) also rose, now at 3.5 from last week's 3.4. WLIg has been in expansion territory since August 24th, althout it is off its high at 6.0 on October 12th.

2012-12-07 3 Implications of a Fiscal Cliff Tax Hike by Russ Koesterich of iShares Blog

From the outside, its hard to find much evidence that Washington is getting closer to a fiscal cliff deal. Perhaps there is more going on behind the scenes than the headlines suggest, but as of today it is hard to find much evidence that the odds of a deal have risen. As the potential for fiscal drag rises, it is worth reiterating why this is so dangerous. From my perspective, the biggest risk to the economy, and to financial markets, comes from the tax side of the equation.

2012-12-07 The Keynesian Depression by Scott Minerd of Guggenheim Partners

Five years have passed since the beginning of the Great Recession. Growth is slow, joblessness is elevated, and the knock-on effects continue to drag down the global economy. The primary difference between today and the 1930s, when the U.S. experienced its last systemic crisis, has been the response by policymakers. Having the benefit of hindsight, policymakers acted swiftly to avoid the mistakes of the Great Depression by applying Keynesian solutions. Like the last depression, we are likely to live with the unintended consequences of the policy response for years to come.

2012-12-07 Archer Daniels Midland Co: Fundamental Stock Research Analysis by F.A.S.T. Graphs of F.A.S.T. Graphs

This report presented essential fundamentals at a glance illustrating the past and present valuation based on earnings achievements as reported. Future forecasts for earnings growth are based on the consensus of leading analysts. Although with just a quick glance you can know a lot about the company, its imperative that the reader conducts their own due diligence in order to validate whether the consensus estimates seem reasonable or not.

2012-12-07 Ball Corp: Fundamental Stock Research Analysis by F.A.S.T. Graphs of F.A.S.T. Graphs

This report presented essential fundamentals at a glance illustrating the past and present valuation based on earnings achievements as reported. Future forecasts for earnings growth are based on the consensus of leading analysts. Although with just a quick glance you can know a lot about the company, its imperative that the reader conducts their own due diligence in order to validate whether the consensus estimates seem reasonable or not.

2012-12-07 Dillards Inc: Fundamental Stock Research Analysis by F.A.S.T. Graphs of F.A.S.T. Graphs

This report presented essential fundamentals at a glance illustrating the past and present valuation based on earnings achievements as reported. Future forecasts for earnings growth are based on the consensus of leading analysts. Although with just a quick glance you can know a lot about the company, its imperative that the reader conducts their own due diligence in order to validate whether the consensus estimates seem reasonable or not.

2012-12-07 Hormel Foods Corp: Fundamental Stock Research Analysis by F.A.S.T. Graphs of F.A.S.T. Graphs

This report presented essential fundamentals at a glance illustrating the past and present valuation based on earnings achievements as reported. Future forecasts for earnings growth are based on the consensus of leading analysts. Although with just a quick glance you can know a lot about the company, its imperative that the reader conducts their own due diligence in order to validate whether the consensus estimates seem reasonable or not.

2012-12-07 Postcard from Malaysia by In-Bok Song of Matthews Asia

During a recent trip to Malaysia I had the opportunity to visit several oil and gas companies. Northeast Asia, most notably Japan and China, already accounts for a considerable amount of energy consumption and is heavily dependent on imports. Meanwhile, Southeast Asia, which has lower industrial development and warmer weather conditions, has traditionally shown to have relatively abundant oil and gas resources. Naturally, this has led the region to be a major exporter of energy.

2012-12-06 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Now that the election is over, and the markets are oversold, the Mideast is again volatile, and the fiscal cliff is fast approaching, most market concern rests with whos going to be the first one in the pool? Interestingly, although the stars are aligned once again to make money in the equities markets, it is still a psychological, not financial, component that governs peoples capital deployment considerations.

2012-12-06 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks continued to bounce back from their post-election sell off. In fact for the entire month of November the popular averages were virtually unchanged. For the past week one can see from the charts above that the Dow Jones Industrial Average was flat and the NASDAQ Composite gained 1.5% as Apple starts to regain some of the ground it has lost since September.

2012-12-06 Meet the New Boss by Bill OGrady of Confluence Investment Management

On November 14th, the new Politburo Standing Committee (PSC) was unveiled. The composition of this new group had been anxiously awaited for months. Although most of the members (all men, by the way) had been anticipated, there were some surprises. This committee is the most powerful group in China; it is essentially the legislative and executive branch of the country. And, given that the judiciary is not really independent, the PSC effectively rules China.

2012-12-06 From a Fiscal Cliff to a Fiscal Speed Bump by Scott Minerd of Guggenheim Partners

More granular analysis of the line items in the fiscal cliff tells a less harrowing story than what Congress and the media are presenting. The official projections are showing scary numbers for the fiscal cliff, but when we dig into the details we see that the real impact will likely be materially less significant. According to the Congressional Budget Office, the fiscal cliff adds up to a total increase in tax revenue of $631 billion, which is approximately 4% of GDP. Going through the report line by line tells a different story.

2012-12-06 Regal-Beloit Corp: Fundamental Stock Research Analysis by F.A.S.T. Graphs of F.A.S.T. Graphs

This report presented essential fundamentals at a glance illustrating the past and present valuation based on earnings achievements as reported. Future forecasts for earnings growth are based on the consensus of leading analysts. Although with just a quick glance you can know a lot about the company, its imperative that the reader conducts their own due diligence in order to validate whether the consensus estimates seem reasonable or not.

2012-12-06 United Technologies Corp: Fundamental Stock Research Analysis by F.A.S.T. Graphs of F.A.S.T. Graphs

This report presented essential fundamentals at a glance illustrating the past and present valuation based on earnings achievements as reported. Future forecasts for earnings growth are based on the consensus of leading analysts. Although with just a quick glance you can know a lot about the company, its imperative that the reader conducts their own due diligence in order to validate whether the consensus estimates seem reasonable or not.

2012-12-06 Questions and Answers Surrounding the Fiscal Cliff by Team of Northern Trust

There is no resolution yet to the US fiscal cliff. It is probably unfair to have expected one by now; the clock is too far from midnight. But as the negotiations continue, several questions have been raised that deserve some reflection. 1. The two sides seem to be making statements that reflect stark disagreement. Are talks failing? 2. Is our fiscal path a cliff, or a slope? 3. There is a proposal to limit the deductions claimed by high income taxpayers. How would these work, and what are the consequences? 4. The cliff has been in the news for a long time. Why isnt everyone prepared for it?

2012-12-05 Market at Mercy of Fiscal Cliff Until Resolution by Liz Ann Sonders of Charles Schwab

Politics and the fiscal cliff are dominating market action and adding to the uncertainty factor. Sentiment is better, technicals are mixed and valuation is reasonable, but until we get past the cliff, fundamentals won't matter a lot. There are some coiled springs forming that could help offset any fiscal-cliff related contraction next year.

2012-12-05 Nordstrom Inc: Fundamental Stock Research Analysis by F.A.S.T. Graphs of F.A.S.T. Graphs

This report presented essential fundamentals at a glance illustrating the past and present valuation based on earnings achievements as reported. Future forecasts for earnings growth are based on the consensus of leading analysts. Although with just a quick glance you can know a lot about the company, its imperative that the reader conducts their own due diligence in order to validate whether the consensus estimates seem reasonable or not.

2012-12-05 Argentinas Trials & Trubulations by Chris Maxey and Ryan Davis of Fortigent

Equity markets climbed higher for a second straight week, extending a rally that began November 16. For the week, the S&P 500 rose 0.6% and the Dow Jones Industrial Average gained 0.2%. In the post-mortem on Q3 earnings season, much has been made of the first quarter of negative earnings growth in three years. However, analysis by Morgan Stanley reveals an even more disturbing picture of corporate America: just 10 companies in the S&P 500 delivered 88% of the indexs earnings growth. Of those 10, four accounted for more than half and Apple alone made up nearly one-fifth of the indexs growth.

2012-12-05 Headline Roulette by Christian W. Thwaites of Sentinel Investments

That Fiscal Thing dominated the week. Every twitch out of Washington was greeted with over analysis by the press and us. Less so the markets. Truth is, markets are not very good at discounting political uncertainty. Sure, a tax scare here and a debt ceiling impasse there might lead to a sell-off but ultimately it's about earnings, corporate health and outlook and on those metrics, nothing last week really upset the markets in a major way. The bond market tends to get this right.

2012-12-05 Resilient Markets Mask Greater Concerns in Real Economy by Douglas Cote of ING Investment Management

Though equity markets have been calm, the real economy tells a different story. If our leaders in Washington arent able to arrive at a compromise, January 1 will mark the beginning of the countrys first scheduled recession, though third quarter corporate earnings suggest a global slowdown is evident. Dont be surprised to see a Christmas rally should Congress kick the fiscal can down the road and the Fed extend Operation Twist.

2012-12-04 Nate Silver's Message for Financial Advisors by Ben Huebscher and Michael Edesess (Article)

By now you are likely aware that Nate Silver of the New York Times correctly predicted the results for all 50 states (plus DC) in this year's presidential election and all but two Senate races. Silver's predictive capabilities across a range of disciplines have made him a near-deity among those whose livelihood depends on accurate forecasting - from poker players to counter-terrorism units. It's clear why: His methods work - at least in some cases. And their strengths and limitations carry important lessons for financial advisors.

2012-12-04 The Big Picture by David Rosenberg (Article)

Our crystal ball says to stick with what works in an uncertain financial and economic climate - in other words, maintain a defensive and income-oriented investment strategy.

2012-12-04 Surprising Choices in the Search for Safety Near-Certain Loss of Purchasing Power versus Short-Term by Jason Petitte, CFA (Article)

Risk, in its many guises, is unavoidable, and investors today are taking on significant amounts of credit risk, duration, and leverage to obtain high yields from many presumably safe bonds. But certain types of risk are often mispriced. By overweighting one's portfolio to those sectors that currently offer attractive risk-adjusted returns, investors will be better positioned to meet their long-term goals.

2012-12-04 Cliff Diving by Michael Lewitt (Article)

While there may be compromise to avoid the self-inflicted crisis of the fiscal cliff, the course of fiscal policy is unlikely to alter significantly. There is a great deal of bold talk about tax reform, but the odds of our current leaders replacing our profoundly flawed tax regime with one that would breed economic growth and productivity are low. Congress will be lucky to avoid the fiscal cliff; asking it to alter the economy's DNA is unrealistic.

2012-12-04 And Thats The Week That Was by Ron Brounes of Brounes & Associates

Obama meets with the nations governors and speaks before the Business Roundtable to continue drumming up support for his budget deal. (Arent most governors counted among the countrys wealthy?) Expect the bickering and blame-placing to continue until finally a small deal is reached with the majority of the work tabled for later in 2013. (How will Moodys and S&P perceive that move?) The economic calendar heats up with critical news from labor and manufacturing and retailers share insight into the holiday shopping season thus far. And Europe is never far from the radar screen.

2012-12-04 Innovation Crisis or Financial Crisis? by Ken Rogoff of Project Syndicate

Was the global financial crisis a harsh but transitory setback to advanced-country growth, or did it expose a deeper long-term malaise? The history of the first half of the twenty-first century may well turn on the answer.

2012-12-04 Economics 101: Little Return without Risk by Bill Smead of Smead Capital Management

A tremendous amount of energy and effort has been expended in the US on behalf of wealthy investors to secure returns while reducing risk. Like any useful endeavor, it started out as a wise thing and reached its stride in the late 1990s as a way to deal with a massive asset misallocation. As Warren Buffett always says, What the wise man does at the beginning, the fool does at the end. It appears to us that the efforts to eliminate risk in the US capital markets have reached the foolish point.

2012-12-04 Strawberry Fields Forever? by Bill Gross of PIMCO

As John Lennon forewarned, it is getting harder to be someone, and harder to maintain the economic growth that investors have become accustomed to. The New Normal, like Strawberry Fields will take you down and lower your expectation of future asset returns. It may not last forever but it will be with us for a long, long time.

2012-12-04 High Uncertainty, Low Optimism by Francis Gannon of Royce Funds

In these uncertain times, we continue to follow our discipline and to identify those ideas that we believe will be the beneficiaries of potentially better economic times ahead. Many of the economic events that the markets feared would pull the U.S. economy into recession have already occurred, including the rapid slowdown in China and the recession in Europe. As the saying goes, bull markets climb a wall of worrysurprisingly , the Russell 2000 gained 12.35% year-to-date, 13.09% over the one-year, 13.85% over the past three years, and 8.71% over the past 10 years through the end of November.

2012-12-04 How to Build a Time Machine by John P. Hussman of Hussman Funds

With industrial production, capacity utilization, real disposable income, real personal consumption, real sales retail and food service sales, and real manufacturing and trade sales uniformly declining in their latest reports, coincident economic indicators having generally peaked in July are now following through on the weakness that weve persistently observed in leading economic measures. We continue to believe that the U.S. economy joined a global economic downturn during the third quarter of this year.

2012-12-03 Tumbling Down the Fiscal Staircase by Scott J. Brown of Raymond James

Revisions to the 3Q12 GDP data have altered the near-term consumer spending outlook, adding to the anxiety surrounding the fiscal cliff. However, even if much of the fiscal tightening is postponed, more will be needed in the years ahead. The estimate of 3Q12 GDP growth was revised to a 2.7% annual rate, vs. 2.0% in the advance estimate. Good news, right? Well, no, just the opposite. Much of the revision was due to an increase in the estimate of inventory accumulation.

2012-12-03 Paintballs?! by Jeffrey Saut of Raymond James

Alas, if only it was that easy to paintball the rapidly approaching fiscal cliff. For those of you traveling the North Yungas Road in Bolivia and unaware of the approaching dangerous cliff, let me explain. Before beginning, however, let me preface by recalling Bill Buckleys famous lament that he would rather be governed by folks listed in the Boston phone book than Harvard professors. To be sure, there are some good politicians inside the D.C. Beltway, but not many!

2012-12-03 Housing, GDP, Lumesis Muni Index & Federal $ to the States by Gregg L. Bienstock of Lumesis

While the media is fixated on the looming cliff and having everyone and their mother opine, information about the status of our economy is of as much importance. This week we take a look at housing prices, GDP, the Coincident Index, the DIVER Muni Index and how much of each States revenue comes from the Federal Government. We keep hearing how much better the housing market is. In this regard, we routinely remind our readers that better or worse depends on from where you start. Starting pre-recession to date, only Texas, Oklahoma and the Dakotas have seen positive housing price trends.

2012-12-03 Economic Insights: Is Capital Spending Spent? by Milton Ezrati of Lord Abbett

Once an area of considerable relative strength, business spending on capital goods has weakened of late. When the spending pickup began earlier in this recovery, utilization rates of existing facilities were so low that many expressed surprise. Only little of the spending went for increased capacity, of coursemost of it aimed at labor-saving equipment. But though this concentration held back the pace of hiring, it did contribute to economic growth. Now, however, it looks as though this surge has run its course, and the capital spending sector, too, has fallen into the slow slog.

2012-12-03 Watching for Cliff to Fade, Jobs to Appear by Bob Doll of BlackRock Investment Management

Investors are likely to remain volatile as the focus on the fiscal cliff will remain intense. Progress on the cliff needs to happen quickly if a compromise is to be reached. Given the sluggish nature of jobs growth, we are unlikely to see the Fed change its stance anytime soon.

2012-12-03 Temporary Weakness Won\'t Last by Brian S. Wesbury and Robert Stein of First Trust Advisors

Hurricane Sandy knocked out electricity all over and is now causing some flickering in the economic data. Real consumer spending fell 0.3% in October, the steepest drop since cash-for-clunkers ended in 2009, while real income slipped 0.1%. The ISM manufacturing index fell to 49.5 in November. Considering that Sandy smashed the eastern seaboard and affected roughly 25% of the US population with the brunt hitting New Jersey and New York the economic damage will be spread out. Timing helped limit the impact on October data, given that the storm struck very late in the month.

2012-12-03 CVS Caremark Corp: Fundamental Stock Research Analysis by FAST Graphs of FAST Graphs

This article is going to look at CVS Caremark Corp (CVS) through the lens of FAST Graphs - fundamentals analyzer software tool. The 12-year historical chart on CVS Caremark Corp shows that the company is undervalued. The prudent investor seeking growth and a rising income stream might want to look more in-depth at CVS Caremark Corp for possible addition to his own portfolio.

2012-12-01 A Fresh Start (Hopefully) by Howard Marks of Oaktree Capital

For years I kept these memos away from anything related to politics. But more recently I began to discuss issues facing the US, and this has required some mention of policy and thus of politics. Ive tried very hard to be non-partisan, with a goal of not having readers know my leanings. I hope Ive succeeded; at least no one has complained. Because I found Americas recent presidential election and especially the results so fascinating, Im going to move explicitly to the field of politics, but with the same goal of non-partisan expression.

2012-12-01 The Significant Impact of U.S. Oil Production by Frank Holmes of U.S. Global Investors

The Eagle Ford shale formation lies south of our headquarters in San Antonio, Texas, giving the U.S. Global investment team a firsthand, tacit perspective on the oil and gas industrys growing natural resources phenomenon. Weve witnessed how the oil activity is boosting the local economy with solid-paying jobs, a healthy housing market and strong consumer sentiment, as oil giants such as Schlumberger and Halliburton take a bigger stake in the area.

2012-12-01 The Bank of Canada Has Barked, But Will It Bite? by Ed Devlin and Richard Clarida of PIMCO

As Canadian consumers have increased their mortgage debt and bid up housing prices, the potential for a disorderly unwinding of these imbalances rightly concerns the Bank of Canada. PIMCO believes that the banks next policy move will be to raise interest rates, but with the traditional aim of fighting inflation rather than reducing home prices and consumer debt. We expect the Bank of Canada to continue tightening mortgage credit and using moral suasion to damp the housing boom and discourage consumers from taking on more debt.

2012-12-01 Are Corporate Bonds Expensive? by Team of Neuberger Berman

As in the case of Treasury bonds, yields for U.S. corporate credits have fallen to historic lows as prices have risen. The yield on the Barclays Aggregate U.S. Investment Grade Bond Index was recently at 2.8%far below levels achieved during the heady days of 2007. Obviously, this reflects overall interest rates, but is it also a sign that corporate issues may be overvalued? We explore the issues and consider how investors should position their portfolios for the current environment.

2012-12-01 The How Matters by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Market focus has clearly been on fiscal cliff negotiations. An agreement that averts the cliff would likely ignite a further near-term rally, but the ultimate solution and its components could have longer term consequences that may not be as market-friendly. US economic data has been impacted by Hurricane Sandy, but it appears modest growth is continuing; although business investment has fallen off. Housing continues to provide support and the Fed is staying the course. There are some signs of growth stabilization globally, notably in some of the emerging economies, including China.

2012-11-30 Active Management: Don't Drop the Pilot by Patrick Rudden of AllianceBernstein

For years, we've advised clients to hold diversified portfolios with balanced allocations to stocks, bonds and other assets. Lately, it's been a hard sell, especially after years of underperformance by active equity managers. But the tide may be turning.

2012-11-30 ProVise Bullets by Ray Ferrara of ProVise Management Group

Last year the post office lost almost $15 billion. You would think that postal rates would be going up, and they are. Effective January 27, 2013, the price of a first class stamp will increase to 46 while a postcard will increase to 33. Both are a one penny increase. Does the post office really think this will make a difference? We hope you have a lot of those "forever" stamps.

2012-11-30 3 Reasons to Hold Off on Holiday Sales Celebrations by Russ Koesterich of iShares Blog

Is the US consumer saying goodbye to the Great Recession and hello to a heady holiday season? Initial holiday sales results may paint a rosy picture, but Russ K explains why investors shouldn't be prematurely uncorking the New Year's champagne.

2012-11-30 Where Are We in the Boom/Bust Liquidity Cycle? by Thomas Fahey of Loomis Sayles

In an often cynical world, standard financial and macroeconomic quantitative models give people the benefit of the doubt. Fundamental economic theory assumes the best of us, supposing that human beings are perfectly rational, know all the facts of a given situation, understand the risks, and optimize our behavior and portfolios accordingly. Reality, of course, is quite different.

2012-11-30 Postcard from a Tier 4 City by Sherry Zhang of Matthews Asia

On my recent trip to China, I got a firsthand glimpse into one of the country's smaller cities. Classified as a "Tier 4" city, Baoji, in western Shanxi province, is 100 miles from the city of Xian, the famed home of the Terracotta Warrior statues. Baoji and its environs have a population of 3.7 million, of which approximately 2 million are urban residents. That equates approximately to the populations of Paris, France or Houston, Texas.

2012-11-30 ECRI Weekly Update: Beating the Recession Drum by Doug Short of Advisor Perspectives (dshort.com)

TheWeekly Leading Index(WLI) of the Economic Cycle Research Institute (ECRI) rose slightly in the latest public data. It is now at 126.3, up from 125.4 in the previous week. The WLI annualized growth indicator (WLIg) declined to 3.4, down from last week's 3.6. WLIg has been in expansion territory since August 17th, although it is now at a six-week low, with the high at 6.0 on October 12th.

2012-11-29 The 13th Labour of Hercules: Capital Preservation in the Age of Financial Repression by James Montier of GMO

James Montier, a member of GMO's asset allocation team, writes to institutional clients in a new white paper on the prospects for preserving and growing capital in a world of slowing growth. Defining financial repression loosely "as a policy that results in consistent negative real interest rates," Mr. Montier poses the question "how does a value investor respond to this? It certainly appears as if the assets one would normally associate with capital preservation are expensive. So can and/or should you substitute other assets such as equities into the role of safe-haven value store?"

2012-11-29 Greece Still Needs a Long-Term Growth Plan by Darren Williams of AllianceBernstein

Even by the standards of the sovereign-debt crisis, the provisional agreement reached yesterday by euro-area finance ministers and the International Monetary Fund (IMF) on a second Greek rescue package looks like a messy fudge. It is clear that Greece's euro-area partners are determined to avoid a near-term euro-area exit, but a long-term solution will require a much more effective growth strategy.

2012-11-29 Small-Caps Pack Big Punch in Emerging Markets by Frank Holmes of U.S. Global Investors

In October, the International Monetary Fund painted a gloomier picture for global investors, as it projected slower growth due to slumping world trade and uncertainty in the West. Despite the forecast, big gains can still be unlocked in the faster-growing emerging markets. We believe the smaller stocks are holding the key.

2012-11-29 Sizing Up the Fiscal Cliff by Team of Neuberger Berman

As year-end approaches, the U.S. is inching closer to a potentially defining moment in its post-debt crisis economic recovery. A series of expiring tax cuts, spending reductions and new taxes equating to over $600 billion (or 4% of GDP), popularly known as the "fiscal cliff," are slated to take effect in early 2013.

2012-11-29 "Bond Deer" in the Headlights by Mike Temple of Pioneer Investments

An insightful client exclaimed to me last week, after I had enumerated the many risks facing bond market investors that he felt like a deer in the headlights. "Bear" with me for a paragraph or two while I elaborate. . .

2012-11-29 42 Days to the Fiscal Cliff! by Michael Martin of Financial Advantage

On the morning of the election, U.S. stocks sported a year‐to‐date return of 15%. Seven trading days later that figure had shrunk to 9.7%. What's going on?

2012-11-29 Ready for Takeoff by Team of Janus Capital Group

Rising fuel costs grounded airline stocks for much of the last two decades, but we think those costs were the impetus for significant structural changes that have positioned them to take off.

2012-11-28 On The Economy & Capitalism vs. Socialism by Gary Halbert of Halbert Wealth Management

Today we look at a Pew Research Center survey that polled Americans for their feelings about capitalism versus socialism. The survey included all races, different ages and various income groups. I think it's safe to say, this survey will SHOCK YOU!

2012-11-28 November 2012 Monthly Investment Bulletin by Team of Bedlam Asset Management

Equities have rarely been so attractive yet any investor acting on the perceived wisdom of the last 50 years would scoff and keep selling: the bad news will worsen for economic activity, growth in credit, wages, consumption, employment and in several countries, political stability. Few indices are glaringly cheap as measured by Cyclically Adjusted Price to Earnings multiples (CAPE: chart p.4) with many expensive, especially in many emerging markets.

2012-11-28 A Turn in the Credit Cycle by Scott Minerd of Guggenheim Partners

Investors should understand the recent transition in the credit market and the implications it could have for the trajectory of asset prices over the long-term.

2012-11-27 Capital Formation and the Fiscal Cliff by John Mauldin of Millennium Wave Advisors

In today's economic environment, we often complain about volatility and uncertainty, but there is one thing I think we can be fairly certain of: taxes are going up. I constantly try to impress upon my kids, most of whom are now adults, that ideas and actions have consequences. In todays letter we will look at some of the consequences of an increase in taxes. Please note that this is different from arguing whether taxes should rise or fall. For all intents and purposes that debate is over

2012-11-27 Better Fundamentals & Attractive Valuations - Why Now is a Good Time to Increase EME Exposure by Michael Zinkand of Managers Investment Group

U.S. equity markets have continued to rise during 2012. As of September 30, 2012, the S&P 500 Index was up 16.4%, with some segments of the U.S. market surpassing their 2007 highs. Emerging market equities have also produced decent returns and benefited from increased investor interest. Through September 30, 2012, however, the MSCI Emerging Markets Index has returned only 11.1% in U.S. Dollars year-to-date, compared with 16.4% for the S&P 500. This may be somewhat surprising since "riskier assets", like small-cap equities and emerging market equities, often lead when stock markets rise.

2012-11-27 Are Equities Still Cheap? by Chris Maxey, Ryan Davis of Fortigent

Since reaching a near-term top in mid-September, the S&P 500 Index fell more than 7%. After a 4% rally in the last five trading days, there are reasons to believe equity markets are poised to extend recent performance despite headline concerns.

2012-11-27 The Superiority of Dividends: A Comparison of Value Strategies by Geoff Considine (Article)

Dividend-focused strategies have won the allegiance of many prominent investors, including Rob Arnott, Bill Gross and Jeremy Siegel. Others claim value-based strategies offer superior risk-adjusted returns. Both sides can claim a partial victory in this debate, but I will show that, when understood properly, dividend strategies offer a crucial edge - one that many investors will find attractive.

2012-11-27 Over the Cliff: Alan Simpson and Erskine Bowles on the Looming Deficit Crises by Michael Skocpol (Article)

As President Obama and Congressional leaders hurtle Thelma-and-Louise-style toward a budgetary precipice, another deficit-tackling duo hit the road earlier this month to deliver a simple message: This all could have been avoided.

2012-11-27 A Critique of Grantham and Gordon: The Prospects for Long-term Growth by Laurence B. Siegel (Article)

The vigorous global economic growth of the last two centuries is over, according to Jeremy Grantham and Robert Gordon. That prediction, if correct, has profound and worrisome implications for investors. And the short-term trend is indeed disquieting: Growth has been close to zero over the last decade in advanced countries. But the most likely outcome is that per capita GDP growth going forward will approximate its U.S. historical average of 1.8%, and it will grow faster in developing markets.

2012-11-27 Fixed Income Perspectives by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

A wise American once said "Life is hard; it's harder if you're stupid." A good example is when your pals in Washington are so busy pushing their partisan agendas that they lose sight of what could happen to the American economic Thunderbird if it goes all Thelma and Louise over the fiscal cliff. With the latest elections in the books, it remains to be seen if a Democratic president and acrimonious Republican House can put on their thinking caps to devise a way to delicately pump the brakes of fiscal restraint.

2012-11-27 Fiscal Perdition by Marie Schofield of Columbia Management

Fiscal consolidations are underway across the developed world, and many require large adjustments. At a minimum, countries need to bring their primary budgets into balance in an effort to stabilize growing debt-to-gross domestic product (GDP) ratios. Many are looking at trimming deficits totaling 5% of GDP or more. This will require both spending cuts and tax increases which often work counter to stabilizing debt ratios, as this can brake GDP growth and undermine both the fiscal position and the political fortitude for action.

2012-11-27 Seasonal Rallies and Fiscal Cliffs by Jerry Wagner of Flexible Plan Investments

Black Fridaythat term used to be reserved for days that major crashes began in the stock market. Fortunately, we saw anything but last week as stocks soared to their best week in months. The market followed through once again on the pre- and post-Thanksgiving positive seasonality pattern that we reported on last week.

2012-11-26 Deja Vu All Over Again by Tony Crescenzi, Andrew Bosomworth, Lupin Rahman, Ben Emons of PIMCO

If the eurozone is to endure, it will require reduced economic differences among countries and larger common fiscal capacity. Emerging market central banks are likely to remain in wait-and-see mode while looking to the U.S. for clarity on the fiscal negotiations and domestic macro prints for signs of moderation in both inflation and activity. While central banks in advanced economies have not traditionally used explicit policies to target exchange rates, the European debt crisis may change all that.

2012-11-26 Stuck in the Muddle with You by Milton Ezrati of Lord Abbett

Raising Keynes hasn't worked. What will finally lift the fog of uncertainty that bedevils the economy?

2012-11-26 Median Household Incomes: The "Real" Story by Doug Short of Advisor Perspectives (dshort.com)

The traditional source of household income data is the Census Bureau, which publishes annual household income data each September for the previous year. Sentier Research, an organization that focuses on income and demographics, offers a more up-to-date glimpse of household incomes by accessing the Census Bureau data and publishing monthly updates.

2012-11-26 Employment, Jobs and the Next Generation by Gregg Bienstock of Lumesis

Thanksgiving offers us a time to reflect on all we have to be thankful for and to share time with family and friends. There is so much to be thankful for while misfortune is evident when you check the news we live in democracy, the wealthiest country on the planet and have a resiliency that is demonstrated every time we, as a nation, are tested.

2012-11-26 Monetary and Fiscal Policy in Early 2013 by Scott Brown of Raymond James

The fiscal cliff refers to a substantial tightening of fiscal policy in 2013. Monetary policy cannot offset the cliffs negative effect on the economy. However, it would be surprising if a deal were not reached, if not by the end of this year, then in early 2013. Due to concerns about the long-term budget picture, some of the cliff is almost certain to get through.

2012-11-26 Buying Treasuries and Avoiding Stocks Not the Way to Go by John Buckingham of AFAM

While we know better than to make too much out of a low-volume rally, especially during a holiday-shortened trading week, it was interesting to hear what The Wall Street Journal had to say one week ago at this time. As the publication helped ready investors for the week ahead, one story advised folks to head toward the safety of U.S. Treasury securities: "Expect safe-haven Treasurys to draw demand at the expense of stocks in the coming weeks, bucking a seasonal trend that has often favored riskier assets."

2012-11-26 Negativity Creates Value; What if the Mayans are Wrong? by Charles Lieberman of Advisors Capital Management

Being negative is easy and sophisticated, so it is attractive for pundits, analysts and the media to play the part. But, it also creates tremendous opportunity. The market seems to be discounting the possibility that the world will come to an end along with the Mayan calendar in near term. If the market is correct, investment strategy doesn't matter. But if the market is incorrect, there are tremendous investment opportunities.

2012-11-26 Fiscal Cliff: An Emerging Markets' View by Mark Mobius of Franklin Templeton Investments

Now that the U.S. presidential election is over and President Barack Obama has been re-elected to serve a second four-year term, we're able to do what we always do after a major election or regime change, and that's examine the potential implications of policy changes on our investments. As our team sees it, there are two main factors for global investors to consider: the U.S. economy's future health, and President Obama's foreign policy stance toward key countries, particularly China.

2012-11-26 Overlooking Overvaluation by John Hussman of Hussman Funds

Presently, on the basis of smooth fundamentals such as revenues, book values, dividends and cyclically-adjusted earnings, the S&P 500 is somewhere between 40-70% above pre-bubble valuation norms, depending on the measure. That's about the same point they reached at the beginning of the 1965-1982 secular bear period, as well as the 1987 peak.

2012-11-26 And That's the Week That Was by Ron Brounes of Brounes & Associates

Investors breathed a sigh of relief (perhaps temporarily) and expressed thanks in the form of the strongest week in the market in several months (though on light volume). Domestically, housing data confirmed strength in the sector and retailers opened their doors earlier than usual with the hope that "if you open, they will come." Overseas, Europe's struggles continued, though manufacturing in China looked to be on the mend. Happy Thanksgiving and enjoy the weekend; after all, next week starts the home stretch for the end of the year...(and the fiscal cliff).

2012-11-23 ECRI Weekly Leading Index: Index Rises, Growth Diminishes by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose slightly in the latest public data (released Wednesday in advance of the Thanksgiving holiday). It is now at 125.7, up from 125.4 in the previous week. See the WLI chart in the Appendix below. The WLI annualized growth indicator (WLIg) declined to 3.8, down from last week's 4.3. WLIg has been in expansion territory for thirteen weeks, although it is now at a seven-week low, with the high at 6.0 on October 12th.

2012-11-22 Emerging Asias Rising Productivity by Robert Horrocks of Matthews Asia

Per capita GDP in China has tripled in purchasing power parity terms in the last decade yet Chinese workers still likely have their most productive years ahead of them. Asia as a whole has seen consumption increase by a third since the global financial crisis, even as the West has languished. This month, Robert Horrocks, writes about what is key to the emerging opportunities in Asia: Productivity.

2012-11-22 Two Portfolios Moves to Consider As Fiscal Cliff Looms by Russ Koesterich of iShares Blog

As fiscal-cliff gridlock reigns in Washington, Russ K has two portfolio moves to consider: going neutral on industrials and overweighting global technology stocks.

2012-11-22 Economic Update by Carl Tannenbaum and Asha Bangalore of Northern Trust

A look beneath the surface reveals a housing sector still struggling with post-crisis transition. The Federal Reserve is intent on promoting a broader recovery in this area.

2012-11-21 Reflections: Primate in Distress by John Gilbert of GR-NEAM

The enthusiastic response of the capital markets to the Federal Reserve's announcement of the third quantitative easing program is, of course, just what they intended. It recalls the even more ebullient response to the ECB's Long Term Refinancing Operation announcement late last year.

2012-11-21 Meet Cliff by Rob Isbitts of Sungarden Investment Research

Oh, we had heard about Cliff. We were warned about this nefarious character many months ago. We knew he was lurking and we knew he was not going to just go away. Cliff had invited himself into our lives, and unless we dealt with him, he was not going anywhere. You, the hard-working financial advisor, have probably been wondering when everyone else would notice him. That time came when the sun came up Wednesday after the election. There he was, casting his extraordinarily long and potentially costly shadow. Fiscal Cliff finally entered the national spotlight. It is time to meet him.

2012-11-21 Patriotic Millionaires Unmasked by Peter Schiff of Euro Pacific Capital

Despite the breathless post-election "think pieces" that have drawn sweeping and deeply considered conclusions about the political drift of the country, at its core President Obama's re-election is easy to understand. He essentially promised millions of middle and working class voters that if he were to be re-elected, they would receive benefits paid for by the rich.While most people would assume that the wealthy would chafe at such a heavy burden, some affluent individuals have apparently organized spontaneously to express their willingness to help the country.

2012-11-20 Kyle Bass on the Next Big Crisis by Robert Huebscher (Article)

If economics could be studied in a laboratory, scientists might concoct something like the circumstances now unfolding in Japan – and policymakers should be paying close attention. According to Kyle Bass, Japan's currency – and its bond market – are about to collapse under the weight of the country's unsustainable fiscal deficit.

2012-11-20 President Obama’s Re-Election and the Impact on the U.S. Economy by Eaton Vance Distributors, Inc. (Article)

President Obama’s re-election resolves a major element of uncertainty that has hung over the political landscape. But what kind of impact will his victory have on the economy and the markets, especially with the House still in Republican control? We posed that question to a roundtable of five investment professionals from Eaton Vance Management, Hexavest and Richard Bernstein Advisors.

2012-11-20 Mad Max Rides Again by Mariko Gordon (Article)

It's been a sometimes gruesome, often fierce ride here in the New York area since Sandy hit last month. There's a parallel between the changes brought by the hurricane and those in today's investment environment.

2012-11-20 The Fallacies in Today’s Retirement Plan Assumptions: Putting the Hedonic Pleasure Index to Work by Bob Veres (Article)

Are you dramatically underestimating your clients' retirement lifestyle expenditures when you use Monte Carlo software? If you stop and look at a number of important assumptions hidden in the current models, you'll suddenly have a lot less confidence in the retirement plans you’re mapping out for your clients.

2012-11-20 Fix the Debt! by Team of Franklin Templeton Investments

In the "normal" course of a U.S. election, investors typically breathe a sigh of relief when the results come in, with at least one layer of market uncertainty removed. This time around, the political squabbling hasn't ended with the close of the polls on November 6. The debate about the "fiscal cliff," a combination of spending cuts and tax hikes set to go into effect on January 1, 2013, has heightened. Market volatility since the election seems to have heightened, too.

2012-11-20 Companies Grapple With Pressure from All Sides by Chris Maxey, Ryan Davis of Fortigent

As we move closer to closing the books on another earnings cycle, it is time to look back at the hits and misses for the quarter. Unfortunately, this quarter brought more misses than investors have seen in quite some time, despite a greatly reduced bar. The outlook also leaves something to be desired, with companies cutting forward guidance and analysts ratcheting down estimates for the next two quarters.

2012-11-20 Where Will the Jobs Come From? by John Mauldin of Millennium Wave Advisors

For the last year, as I travel around, it seems a main topic of conversation is "Where will my kids find jobs?" It is a topic I am all too familiar with. Where indeed? Youth unemployment in the US is 17.1%. If you are in Europe the problem is even more pronounced. The basket case that is Greece has youth unemployment of 58%, and Spain is close at 55%. Portugal is at 36% and in Italy its 35%. France is over 25%. Is this just a cyclical symptom of the credit crisis?

2012-11-20 Emerging Markets Equity -- Monthly Product Commentary: October 2012 by Team of Thomas White International

Economic data from major emerging markets suggested a moderate reversal from the weak trends of recent months.

2012-11-20 Bumpy End To The Year by Christian Thwaites of Sentinel Investments

Europe would like to have America's problems. Here we have declining public spending, increasing receipts, falling debt to GDP ratios and unemployment 3% below the European average. This puts the Fiscal Cliff (and I was so hoping to avoid that clich) debate somewhat in context. It's serious enough to draw the attention of corporate CEOs, put a heavy dampener on business confidence, which we saw in the recent NFIB report, and postpone hiring plans and capital investment, which showed up in last week's Empire and Philly Fed surveys.

2012-11-20 Favoring France: The Newest Bright Spot in Europe by Russ Koesterich of iShares Blog

Europe may be stabilizing, but it's not out of the woods yet. One bright spot on the continent? France. Russ explains why he would now overweight the country's equities.

2012-11-20 On the Road to Zero Growth by Jeremy Grantham of GMO

In a new quarterly letter to institutional clients, GMO chief investment strategist Jeremy Grantham makes the case that, "the U.S. GDP growth rate that we have become accustomed to for over a hundred years -- in excess of 3% a year -- is not just hiding behind temporary setbacks. It is gone forever." He cautions, "investors should be wary of a Fed whose policy is prefaced on the idea that 3% growth for the U.S. is normal."

2012-11-19 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

Could it be signs of progress? While Obama and key congressional leaders didn't exactly emerge form budget meeting arm-in-arm and singing kumbaya, they did report some progress (dare I say "compromise"?) regarding spending cut and tax hikes (better known as "fiscal cliff"). Investors remain fearful as prior discussions were always derailed over partisan bickering and the S&P and other ratings agencies remain on call should they need to act on US credit. Thanksgiving marks the beginning of what many retailers hope is a successful holiday shopping season.

2012-11-19 Little Dutch Boy by John Hussman of Hussman Funds

In the Mary Mapes Dodge book titled Hans Brinker, there is a fictional story within the story of a little Dutch boy who, on his way to school, notices a hole in the dyke. Having nothing else to fix the leak, he plugs the hole with his finger and stays there through the night until workers come to repair it. We are now into the fourth year of efforts to print trillions of little Dutch boys out of dollars and euros in order to stop a tide from crashing through a fundamentally damaged dyke. All of this has bought time, but no workers have arrived, and no real repairs have been done.

2012-11-19 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Fortunately, no one is compelled to invest money. They do so in a climate of tranquility, or turmoil, in an attempt to utilize their specific discipline, their risk/reward tolerances, and their expectations in order to achieve capital gains. There is no "one size fits all" system, nor is everyone suited for an all-in, win or lose, paradigm.

2012-11-19 Waiting for Godot by Charles Lieberman of Advisors Capital Management

Democratic and republican policymakers are actively negotiating over the fiscal cliff, as investors watch and wait with baited breath. They seem to be making progress, or so they suggest in their public comments. But until the situation is resolved, markets are likely to remain volatile. Other issues do seem to be moving towards resolution.

2012-11-19 The Year of Betting Conservatively by Nouriel Roubini of Project Syndicate

As consumers, firms, and investors become more cautious and risk-averse, the equity-market rally of the second half of 2012 has crested. And, given the seriousness of the downside risks to growth, the correction could be a bellwether of worse to come for the global economy and financial markets in 2013.

2012-11-19 Monetary and Fiscal Policy in Early 2013 by Scott Brown of Raymond James

The fiscal cliff refers to a substantial tightening of fiscal policy in 2013. Monetary policy cannot offset the cliff's negative effect on the economy. However, it would be surprising if a deal were not reached, if not by the end of this year, then in early 2013. Due to concerns about the long-term budget picture, some of the cliff is almost certain to get through.

2012-11-19 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks continued their post-election selloff. The usual concerns about future tax increases and retrenchment by both consumers and business weighed heavily upon investor sentiment.

2012-11-19 The Seeds of Higher Market Volatility Were Sown by Mike Temple of Pioneer Investments

A paradigm shift in financial markets has taken place since 2008 into a more volatile investment environment that will demand different ways of managing risk. In an ironic twist of intention, today's higher volatility is the consequence of attempts by central banks to engineer a less volatile economic environment.

2012-11-19 On Wealth Effects of Fed Policies: Housing Is Likely The Bright Spot by Chun Wang of Leuthold Weeden Capital Management

We've mentioned before the rapidly waning effect of the Fed policies. October was a good proof of that, with the S&P 500 index down about 2% (top chart). The stock market is no doubt part of the wealth effect the Fed was trying to create, but home prices, which represent the bulk of the average person's net worth, and personal income should also be considered a big part of the wealth effect.

2012-11-19 Will the "Cliff" Steal Christmas? by Milton Ezrati of Lord Abbett

Probably not. Here's how a last-minute deal on spending cuts and tax hikes could work.

2012-11-17 Three Events That Sum Up the Week by Frank Holmes of U.S. Global Investors

India regained its title as the strongest performing market, overtaking the greater China area, as the country experienced a bounceback in demand due to improved sentiment during the festival season. The Federal Housing Administration reported that it has exhausted its reserves, possibly requiring a bailout from U.S. taxpayers for the first time ever in its nearly 80-year history. The global economic picture came into focus a little more this week with the announcement of Chinas new leadership.

2012-11-17 Microsoft Has Been A Better Business Than It Has A Stock, But That Is About To Change by Team of F.A.S.T. Graphs

Microsoft, the business, has been a stellar performer. It is only because the stock was so in credibly overvalued a decade and a half ago that investor shareholders received such poor returns. We believe that the opposite circumstances exist today for the stock; however, the prospects for the business remain intact. Therefore, we believe Microsoft represents a compelling opportunity to invest in a high-quality blue-chip dividend growth stock at a very low valuation.

2012-11-16 ProVise Bullets by Ray Ferrara of ProVise Management Group

With the elections behind us, we must now look ahead to the next six weeks of a Lame Duck Congress. Given the fact that the President was re-elected, the Republicans maintained control of the House, and the Democrats gained in the Senate, we know there will either be collaboration or chaos in Washington. The positioning has already started. The more things change, the more they stay the same.

2012-11-16 November Fundamentals by Chris Brightman of Research Affiliates

For the second half of the 20th century, U.S. gross domestic product growth averaged 3.3% per year. This growth was driven by a combination of rising population and employment rates and increased productivity. But all three of these factors are slowing or declining. What does this mean for future growth?

2012-11-16 Central Bankers Take Steps Where Politicians Fear to Tread by John Remmert of Franklin Templeton Investments

In the past few years, many global central banks have enacted various measures to stimulate their respective economiesin some cases without the support of fiscal measuresand sometimes to little effect. John Remmert, senior vice president and senior portfolio manager for Franklin Equity Group, shares his insights on why central banks have acted in some cases where politicians seemed fearful to tread.

2012-11-16 Obstacles to a Lasting Recovery: The Liquidity, Hesitancy & Solvency Traps by Thomas Fahey of Loomis Sayles

Those familiar symptoms are back again to start the summer: risk aversion; falling equity prices; rising volatility; record-low German and US government bond yields; wider credit spreads; a European country getting picked on; and a stronger US dollar. We have seen this bad movie twice before, during the summers of 2010 and 2011.

2012-11-16 ECRI Weekly Leading Index: The Slippage Continues by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) declined again in the numbers released today. It is now at 125.4, down from its interim high of 127.6 set five weeks earlier. The WLI annualized growth indicator (WLIg) also declined, now at 4.4, down from last week's downard revision to 5.0. WLIg has been in expansion territory for twelve weeks, although it is now at a five-week low, with the revised high at 6.0 on October 12th.

2012-11-16 The Big Four Economic Indicators: Real Retail Sales and Industrial Production by Doug Short of Advisor Perspectives (dshort.com)

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.

2012-11-16 The REIT Stuff: How REIT Investors Have Benefited from the Real Estate Recovery by Steve Benyik of Lord Abbett

In an otherwise slow-growth economy, real estate investment trusts' (REITs) strong returns and yields have attracted considerable investment in recent years. Steve Benyik, Lord Abbett REIT analyst, provides perspective on the sector's key trends.

2012-11-16 Fed Balance Sheet Expands, Reward-Risk Clarity Fades by Alan Levenson of T. Rowe Price

While the minutes of the October 23-24 FOMC indicated a lack of consensus regarding whether to initiate a new asset purchase program to replace the Maturity Extension Program (MEP) upon its year-end conclusion, we believe that the Committee will announce at the conclusion of its December 11-12 meeting that the Fed will begin open-ended purchases of Treasury securities at a pace close to the $45 billion per month in the MEP.

2012-11-16 Weekly Economic Commentary by Carl Tannenbaum, Asha Bangalore of Northern Trust

The focus on the fiscal cliff cannot be overstated. It is very hard for the world's central banks to set rules governing monetary policy. The troika charged with addressing Greece has some internal disagreement.

2012-11-15 Russia and China's Neighborly Interests by Mark Mobius of Franklin Templeton Investments

Whether our neighbors are as close as the airplane seat next to us or across a national border, most would probably agree that while we may not see eye to eye, peaceful cooperation makes more sense than tense relations. China and Russia share some 4,000 miles of common border, and their neighborly relationship has certainly had some ups and downs. But it's clear to me that the opportunities for cooperation between these two nations have enormous potential mutual benefits, particularly in the trade of natural resources.

2012-11-15 New Leaders, Same Steady Hand on the Chinese Economic Tiller by Anthony Chan of AllianceBernstein

The media spotlight is on China's new president, Xi Jinping. But investors should be watching Li Keqiang, the new premier. It's Mr Li who will be responsible for combating the country's slowing economic growth and, with it, potentially the fate of the world's economy.

2012-11-15 November 2012 Market Commentary by Andrew Clinton of Clinton Investment Management

In light of the approaching fiscal cliff and likely changes to the US tax code, we continue to believe that municipal bonds offer some of the most attractive risk- adjusted return potential available in the market today.

2012-11-15 Pacific Basin Market Overview - October 2012 by Team of Nomura Asset Management

Equity markets derived support this month from improved U.S. economic data and an impression that China's economy might be bottoming out. In addition, the Euro Area Industrial Production numbers came in above consensus. The MSCI AC Asia Pacific Free Index including Japan declined by 0.39% while the MSCI AC Asia Pacific ex Japan Free Index gained 0.44% in October 2012.

2012-11-15 Too Low for Too Long by Scott Minerd of Guggenheim Partners

The Federal Reserve faces the risk of inducing a sell-off in bonds similar to that which occurred in 1994 when Dr. Greenspan tightened credit conditions after maintaining an artificially low interest rate environment for an extended period.

2012-11-15 The Fiscal Cliff Comes Into Focus by Zach Pandl of Columbia Management

Investors and economists have been debating the fiscal cliff for more than a year. When budget negotiations fell apart in July 2011, the White House and congressional leaders delegated responsibility for finding additional federal savings to a bipartisan "super committee". However, this group could not bridge the differences between the two parties either, and so the nation's fiscal policy was set to the fallback option: automatically begin cutting spending and allow tax rates to set higher at the start of 2013.

2012-11-15 Chuck Royce Remains Optimistic After the Election by Chuck Royce of The Royce Funds

The likelihood of fiscal and tax reform in 2013 gives us faith in the long-term viability of both the U.S. economy and equities.

2012-11-15 Weekly Commentary & Outlook by Gary Halbert of Halbert Wealth Management

Obviously, I am very discouraged with the outcome of the election. The main mistake Spencer and I made (and others including Gallup, Rasmussen, Pew, Rove, Morris, etc., etc.) in our pre-election analysis was to significantly underestimate the turnout rates among Democrats. The widely-held view that Democrats were unenthused and wouldn't turn out to vote, as suggested by numerous pollsters, was simply wrong. Obama won both the popular vote and the Electoral College comfortably.

2012-11-15 Nothing Changed by Doug MacKay, Bill Hoover of Broadleaf Partners

Many events have transpired since our mid-September update, but not much has really changed. Economic growth should remain slow for as far as the eyes can see, as each region of the world struggles with its own version of the New Normal. Capitalistic animal spirits have gone the way of the modern American male and while not completely extinct, he's decidedly more metrosexual. Flannel has ceded ground to the skinny jean and ambition has given way to contentment. Save for the halls of America's top military brass, unbridled passion is simply no longer.

2012-11-14 U.S. Economic and Interest Rate Outlook - November 2012 by Carl Tannenbaum, Asha Bangalore of Northern Trust

Our updated forecast anticipates some movement on the "fiscal cliff."

2012-11-14 Helplessly Hoping...That a Market Riot Isn't Needed for Fiscal Cliff Fix by Liz Ann Sonders of Charles Schwab

A status-quo election puts the "fiscal cliff" front and center. The stock market's knee-jerk reaction was to sell; could further weakness light a fire under politicians? Good news has come from recent economic numbers, but sentiment will remain under pressure until the fiscal cliff is resolved.

2012-11-14 The Sun Also Rises by James Hunt of Tocqueville Asset Management

In his latest "Insights" piece, James Hunt, portfolio manager of Tocqueville International Value Fund, explains why Japanese equities, despite the country's poor demographics, huge public debt and weak growth prospects, still harbor some excellent opportunities. Mr. Hunt writes: "Everyone thinks Japan is sinking into obscurity and this negative sentiment provides us with the opportunity to buy what I consider to be excellent global franchise businesses at knock down valuations."

2012-11-13 David Rosenberg on Obama's Victory by David Rosenberg (Article)

The election is behind us. The Fed has spent its last bullet. We are at an inflection point of the earnings and sales cycle. The fiscal cliff, the Chinese political transition and the spread of the euro zone recession to the north lie ahead.

2012-11-13 Voyages by Michael Lewitt (Article)

Anything short of drastic entitlement reform, serious cutbacks in defense spending, and serious tax reform that alters incentives away from speculation in favor of production will leave this country stuck on the dangerous path it is on today.

2012-11-13 The Real Job Creators by Justin Locke (Article)

The election is behind us, but a politically charged phrase that took a starring role in the campaign lingers on: "job creators." Now that cooler heads are returning, it's time to get past the politics and acknowledge the facts: Capital, by itself, does not create jobs. Jobs are created by salespeople.

2012-11-13 Addressing the Fiscal Cliff by Scott Brown of Raymond James

The 2012 election put a major uncertainty behind us. We now know that Barack Obama will remain president and that Congress will be split. However, a major uncertainty lies ahead with the fiscal cliff. The danger is that a deal wont be reached soon and may get tangled with efforts to raise the debt ceiling

2012-11-13 Equities Slumped Post-Election as Investors Grew Fearful of Approaching Fiscal Cliff by Team of ING Investment Management

Equities slumped post-election as investors grew increasingly fearful of the approaching fiscal cliff in light of a divided Washington, though encouraging economic data out of the U.S. and China helped stabilize markets on Friday.

2012-11-13 Central Bank Insurance by John Mauldin of Millennium Wave Advisors

"If you want to enjoy life, go to Buenos Aires. If you want to do business, go to Sao Paulo," the saying goes. It is hard to get an impression of a country by going to a city of 20 million people. It is like visiting New York City and thinking you can understand the United States. But I never fail to enjoy myself in Brazil.

2012-11-13 China's Transition Occurring at a Critical Time by Chris Maxey, Ryan Davis of Fortigent

While the presidential election in the U.S. was on the forefront of most investors' minds, current events in China could be equally important to the global economy. China is going through a political transition at the same time as it seeks to re-balance its economy. Whether those efforts will be successful remains a great unknown.

2012-11-13 Leaning Left by Brian Wesbury, Bob Stein of First Trust Advisors

President Obama won a second term as president by three percent of the popular vote, while sweeping the battleground states and winning the Electoral College. Meanwhile, Democrats gained two seats in the Senate and the GOP held onto a comfortable majority in the House.

2012-11-13 Four More Years... by Kate Schapiro of Sentinel Investments

Americans went to the polls this past Tuesday and re-elected President Obama to four more years in office. In addition, the partisan breakdown of Congress stayed roughly the same in both the House of Representatives (Republican majority) and Senate (Democratic majority). So after nearly two years and billions of dollars spent on campaigning, debating, polling, grand-standing and mudslinging, the leadership is unchanged. A good argument for campaign finance reform if ever there was one.

2012-11-13 Scotland: The Same, Only Better? by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

As the Eurozone countries are trying to find the functional balance between national sovereignty and Eurozone-wide central control on the national level, fractures are also appearing within the nation states themselves. Additionally, the Northern European countries are questioning the extent to which they should be expected to bail out the Southern countries, while the wealthier regions of the nation states reason that they would be more efficient in managing their internal fiscal budgets.

2012-11-13 Sequestration - What It Means for the Municipal Bond Market by Michael Taylor of Columbia Management

If Congress fails to quickly reach an agreement on deficit reductions, automatic cuts to federal discretionary spending (sequestration) are scheduled to take effect January 2, 2013. On September 14, the U.S. Office of Management and Budget (OMB) released its report detailing how it would implement sequestration, as required by the Budget Control Act of 2011 (Act). Designed to impact defense and non-defense (domestic) program budgets equally, most agencies are subject to cuts between 7% and 11% over the next decade. The exception is Medicare which is subject to a 2% cut.

2012-11-13 Seeking Shelter from the Storm? Consider Mega Caps by Russ Koesterich of iShares Blog

Russ Koesterich discusses how mega cap stocks are attractively valued and may be more resilient to the impact of the potential fiscal cliff.

2012-11-13 A Portrait of Two Presidents by Frank Holmes of U.S. Global Investors

Last Friday, President Obama addressed the two topics that have been on many equity investors' minds since election night: the economy and the dreaded "fiscal cliff." In his speech, he delivered his familiar plan to combine spending cuts with increasing revenue by raising taxes on the wealthiest Americans. That's "how we did it in the 1990s, when Bill Clinton was president," says the president.

2012-11-12 After the Election, Fiscal Cliff Outcome May Surprise by Libby Cantrill, Josh Thimons of PIMCO

Our base case for a fiscal cliff resolution continues to be a lame-duck mini-deal that would reflect about 1.5% of GDP in fiscal contraction in 2013 (vs. nearly 5% without a deal). But the dynamics of polarization and partisanship that played a role in past dysfunctional negotiations may have gotten worse. On a more optimistic note, it is widely known that second-term presidents are largely interested in their legacies spearheading noteworthy, bipartisan and lasting accomplishments for the history books.

2012-11-12 And That's the Week That Was by Ron Brounes of Brounes & Associates

"Four more years...Four more years." While those words may be music to the ears of Obama supporters worldwide, investors seemed less than impressed (at least initially). A second Obama administration brings plenty of question marks about the global economy, the tax code, the regulatory environment, Corporate America, and, of course, the financial markets. Stocks plunged on the first day post-election, but many analysts believe that is less a statement about the Obama victory and more a concern that the "fiscal cliff" is now clearly atop the news headlines.

2012-11-12 Can Housing Save the U.S. Economy? by Stephen Sheehan of Columbia Management

After leading the U.S. out of the Great Recession, the manufacturing sector has recently begun to show signs of sputtering. Uncertainty surrounding the election and fiscal cliff in the U.S., decelerating growth in China and a perpetually weak Europe have led to a soft patch in the third quarter. This global hiccup has caused some U.S. companies to catch a cold, most notably those in heavy machinery, transportation, metals and mining, and general industrials.

2012-11-12 What If US Economic Growth Is Over? by Russ Koesterich of iShares Blog

A new research paper argues that investors may be grossly overestimating how fast the United States is likely to expand in the coming decades. Could this be the case? Russ K weighs in.

2012-11-12 Lopsided Risks by John Hussman of Hussman Funds

The recent sequence of overvalued, overbought, overbullish, technically exhausted setups followed by a clear technical breakdown is of greatest concern here, because we often observe that sequence at the beginning of deep and extended market losses.

2012-11-12 Fiscal Cliff, US Economy and Election Results - What Happens Next? by Liz Ann Sonders of Charles Schwab

Housing, manufacturing, and post-Sandy rebuilding could help offset the drag from the fast-approaching "fiscal cliff," but for now, uncertainty is front and center.

2012-11-12 Surveying the Post-Election Landscape by Team of Lord Abbett

Of all the uncertainties facing investors over the past few years, the U.S. presidential election was among the most significant. And now that the election is over, asset managers are assessing the opportunities and riskssuch as the looming fiscal cliffwithin their respective markets. Indeed, the direction of fiscal policy remains investors' foremost concern, according to a recent survey of nearly 600 financial advisors conducted on Lord Abbett's postelection Web conference.

2012-11-12 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The election results were no sooner determined when stocks started selling off. Hard to believe it is coincidence, but it is also hard to believe the markets were caught off guard either.

2012-11-09 Fiscal Cliff, US Economy and Election ResultsWhat Happens Next? by Liz Ann Sonders of Charles Schwab

Even if the United States falls off the "fiscal cliff," the hit to the economy will probably be gradual. And while the fiscal cliff probably figured into the recent market pullback, it's not the only contributor. Resolution to this issue, the continuation of positive trends in housing and manufacturing, and fundamental tax reform could help give the economy a boost.

2012-11-09 Americas: Economic Review 3rd Quarter 2012 by Team of Thomas White International

Economic trends in most countries across the Americas region saw a moderate recovery during the third quarter, though the pace of growth remains subdued. Slower global demand due to the ongoing European recession and the slower expansion in Asia continues to restrict exports from the Americas. At the same time, domestic consumption growth has been relatively more robust than expected and has helped most regional economies prevent a deeper slowdown.

2012-11-09 Chart of the Week: Gold and an Ever-Growing Balance Sheet by Frank Holmes of U.S. Global Investors

While Americans were still submitting their ballots, gold rallied on the possibility of a President Barack Obama reelection. With presidential results confirmed, it appears that Ben Bernanke's job of hovering over the economy and dropping parachutes of money out of his helicopter is secure. "Gold could not have asked for a better outcome," with a second term for Obama, a Democratic Senate and Republican House, says UBS Investment Research.

2012-11-09 ECRI Weekly Leading Index: Off Its Interim High by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) declined in the numbers released today. It is now at 126.2, down from its interim high of 127.6 set four weeks earlier. The WLI annualized growth indicator (WLIg) also declined, now at 5.1, down from last week's 5.9. WLIg has now spent eleven consecutive weeks in expansion territory, although it is now at a five-week low.

2012-11-09 Roots of Economic Karma by Vivek Tanneeru of Matthews Asia

I'm a strong believer that bad governance (yes, bad) is a natural part of the process of socio-political empowerment, and one that is actually necessary at times in order for some democracies, such as India, to achieve faster economic growth. Typically, during times of great socio-political transformation economic governance takes a backseat as newly empowered segments of society view redistribution of power and patronage as the first order of business. Their attention turns to good economic governance only after they feel fully assimilated. Allow me to explain.

2012-11-09 Looking Past the Election by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

The election results are in, removing at least one area of uncertainty from the equation. For the near term, economic data in the United States may take a back seat. Growth around the world appears soft, but some pockets are more encouraging than others.

2012-11-09 Two Policy Instruments, Two Labor Market Thresholds by Alan Levenson of T. Rowe Price

Despite understandable post-election focus on the resolution of the looming fiscal cliff, there is persistent interest in the conditions under which the FOMC will end the asset purchase program initiated in September ("QE3"). The economic projections and monetary policy expectations submitted for the September 12-13 FOMC meeting indicate that a consensus for rate hikes begins to build as the unemployment rate approaches 7.0%.

2012-11-09 Weekly Economic Commentary by Carl Tannenbaum, Asha Bangalore, Victoria Marklew of Northern Trust

Hurricane Sandy will impact the pattern of upcoming data, but is not likely to have a lasting economic impact. Our updated forecast anticipates some movement on the "fiscal cliff." France may be part of Europe's problem, not a source of Europe's solutions.

2012-11-09 A Portrait of Two Presidents by Frank Holmes of U.S. Global Investors

On Friday, President Obama addressed the two topics that have been on many equity investors minds since election night: the economy and the dreaded fiscal cliff. In his speech, he delivered his familiar plan to combine spending cuts with increasing revenue by raising taxes on the wealthiest Americans. Thats how we did it in the 1990s, when Bill Clinton was president, says the president.

2012-11-09 What If US Economic Growth Is Over? by Russ Koesterich of iShares Blog

A new research paper argues that investors may be grossly overestimating how fast the United States is likely to expand in the coming decades. Could this be the case?

2012-11-09 Will China Ditch Mao To Save The Party? by James Gruber of Asia Confidential

Maintaining the status quo isn't an option. It'd jeopardize the future of the Communist Party itself. But the party has a habit of reinventing itself and I am cautiously optimistic that it'll do so again. You're likely to see China move more and more towards a Singaporean-style economic and political model.

2012-11-08 Magic 8 Ball Knows All by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

The efficacy of 1980s technology turned out to be a real bummer, huh? Flying DeLoreans and flux capacitors are the ultimate heartbreakers, but the clairvoyance promised by those iridescent black and white Magic 8 Balls is definitely a close second. Give one a few shakes today and see for yourself. "Magic 8 Ball, [SHAKE] will financial markets rally post the U.S. election?" "It is decidedly so." "Magic 8 Ball, [SHAKE] are you lying?" "Yes definitely." "Magic 8 Ball, [SHAKE] seriously?" "Reply hazy, try again."

2012-11-08 Overcoming the Brake Light Shockwave by Christian Thwaites of Sentinel Investments

Big democratic breakthroughs, say Egypt, Tunisia are halting and fall far short of the hopes they embodied. Technology is a race over mobility and brevity but hardly elicits the same wonder from years past. Governments are polarized. The US had almost no voting overlap in recent years so big ideas are on the wane. In Europe, the supra-national organizations like the EU are swift to talk and slow to act. No we're not reactionaries. We think all this is explained by the deepest drop in output in the post-war period and the slowest recovery.

2012-11-08 Make Way for Debt Mutualization in Europe by Scott Minerd of Guggenheim Partners

Hurdles and hold-ups are inevitable but recent policy developments in Europe indicate that the ECB and the Bundesbank are cooperating and greater federalization is likely.

2012-11-08 Emerging Asia Pacific: Economic Review 3rd Quarter 2012 by Team of Thomas White International

Emerging Asia Pacific economies faced a challenging third quarter in 2012 as exports to key developed markets such as the Euro-zone came under pressure. As the austerity policies implemented by many of the countries in the Euro-zone caused a significant slump in demand, emerging market economies, which serve as the workshop of the world faced significant difficulties. Almost all major export-dependent nations like China, South Korea, Taiwan and Malaysia faced pressure to export growth. Still, most of the economies possessed both monetary and fiscal ammo to overcome the slowdown.

2012-11-08 Imagine That... by Michael Kayes of Willingdon Wealth Management

Congratulations to President Obama for his reelection victory. My republican friends, I suspect, are in shock this morning, and understandably depressed. Meanwhile, my friends from the other side must be elated because last night was their night. I congratulate all on their months of hard work campaigning. But today is a new day and it is a test for all of us to come together. So, whatever you were yesterday, today you are only one thing, an American. Can you imagine that for a moment?

2012-11-08 Obama Wins: What's Next? by Team of Janus Capital Group

U.S. President Barack Obama has been re-elected for another four years, while Democrats will continue to control the Senate and Republicans the House of Representatives. We believe this outcome was largely anticipated by the markets before Election Day. However, U.S. Treasury markets likely will gain and risk assets could decline as investors remain concerned about sluggish economic growth, the impact of the impending "fiscal cliff" and the effects of continued Federal Reserve (Fed) intervention.

2012-11-08 November Economic Update by Team of Cambridge Advisors

During the month of October, the S&P 500 traded within a 5% range. By the end of the month, stock returns for the S&P 500 reflected a loss of 1.8%. This decline is surprisingly low when you consider the stock market closed unexpectedly for two days and reopened after a major storm that caused extensive damage in highly populated areas along the East Coast. Treasury yields also did not significantly move during the month.

2012-11-08 A Delicate Balance by Team of Franklin Templeton Investments

You'd be hard-pressed to find someone who argues that balance is a bad thing, but in this time of austerity versus growth and political us-versus-them, you'd be equally hard-pressed to find agreement on how to achieve balance. Right now the U.S. economy is teetering on the edge of the much-publicized so-called "fiscal cliff," a one-two punch of automatic spending cuts and tax increases set to go into effect in 2013, and which threaten to tip the nation into recession.

2012-11-08 Japanese Carmakers Can Surmount Backlash from China Dispute by Takeo Aso, Atsushi Horikawa of AllianceBernstein

The territorial dispute between China and Japan is clouding the outlook for Japanese automakers. But we think that bilateral business pragmatism will eventually trump the current political tensions.

2012-11-08 Developed Europe: Economic Review 3rd Quarter 2012 by Team of Thomas White International

Amid signs of a deepening economic slowdown in Developed Europe, three key events brought some cheer to the beleaguered region, raising hopes of a lasting solution to its debt crisis. In early September, the European Central Bank (ECB) announced its new Outright Monetary Transactions scheme, which is in effect a commitment by the ECB to buy unlimited quantities of sovereign bonds with up to three years in maturity, providing the bond-issuing member country agrees to a reform agenda.

2012-11-07 October 2012 Monthly Commentary by David Kelly of J.P. Morgan Funds

A light flashed on in my car this morning, telling me that it was due for service. When I take it in, the mechanics will presumably check both the engine and the brakes before deciding on exactly what it is that I need to repair, replace or adjust. For investors, after nine months of ups and downs in markets, an investment strategy checkup is in order.

2012-11-07 Job Market Improves, But Is It Enough? by Scott Brown of Raymond James

The economy plays a critical role in voter decisions. However, historically, it's been more about the direction than the level. The October Employment Report was stronger than anticipated, suggesting that we're doing significantly better than just treading water in the labor market. However, we have a lot of ground to make up and the pace is not especially strong. Regardless of Tuesday's election outcome, the data suggest that the ground may be set for further improvement in 2013.

2012-11-07 US Olympic Swim Team and Warren Buffett: Buy and Hold by Bill Smead of Smead Capital Management

The US swim team has their own criteria for developing young athletes. We assume in every ten-year stretch that they support the swimming efforts of 25 to 30 young athletes in hopes of finding an occasional Mark Spitz or Michael Phelps. Most of them share the characteristics we described about Michael Phelps. The US Olympic team is the most successful swim team portfolio manager in the world. What can we learn from them as portfolio managers?

2012-11-07 October Surprise by Douglas Cote of ING Investment Management

Third quarter earnings growth for S&P 500 companies is at risk of being negative for the first time in three years. While the presidential election is important, Congress will ultimately control spending and tax legislation. Monetary stimulus alone is both inadequate and unsustainable; pro-growth taxation, spending and regulatory policy is key to our economic revival.

2012-11-07 Avoid a Passive Pickle in Less Volatile Stocks by Chris Marx of AllianceBernstein

Less volatile, defensive stocks have been so popular lately that many investors are now asking whether the low-volatility opportunity has come and gone. The question highlights why we think a multifaceted, actively managed approach is the way to go when investing in this space. These strategies have more levers to pull to avoid near-term risks and, thus, to extend the long-term return potential of low-volatility stocks.

2012-11-07 Report Raises Questions About Central Bank Gold Holdings by John Browne of Euro Pacific Capital

For years I have cautioned that changes in the ownership of gold held in the vaults of key central banks around the globe may not have been accurately reported. A report issued last month in Germany has once again brought these issues to the fore. In today's environment of rampant money creation and questioning of central bank activities, such uncertainty is bound to spark the curiosity of an increasing number of investors.

2012-11-06 Lacy Hunt on Our Economic Future by Robert Huebscher (Article)

Last week I spoke with Lacy Hunt, an unequivocal advocate of deficit reduction. Hunt defended – as persuasively as few others can – the need to address our fiscal imbalances. But equally respected economists are advocating for the other extreme, and he shares some common ground with them.

2012-11-06 ClearBridge Advisors - Market Commentary Q312 by Harry “Hersh” Cohen (Article)

Vibrant end demand is missing, as consumers have neither the wherewithal nor the will to spend as they did in prior periods.

2012-11-06 David Rosenberg on Hurricane Sandy: Missing the Boat by David Rosenberg (Article)

As I read and digest reports estimating the damage from the devastating storm, I sense that there are far too many economists who are relying too heavily on past major hurricanes as they draw their conclusions from the current experience with Sandy.

2012-11-06 Asset Location: Nine Tips to Create “Tax Alpha” by Glenn Frank (Article)

With campaign season finally over, taxes are going to dominate the debate in Washington in the months ahead – however things shake out at the polls today. It's going to be confusing; it's going to be uncertain. But many of the most critical questions advisors will ask can be answered with an analytical approach to deciding where to 'house' assets – in taxable or tax-sheltered accounts.

2012-11-06 How the Election Will Affect the Fiscal Cliff by Russ Koesterich of iShares Blog

In the final hours before the election, Russ takes a look at potential outcomes and what they would mean for avoiding the fiscal cliff.

2012-11-06 Earnings Cliff? by Mike Boyle of Advisors Asset Management

We are now about 63% (316 of the 500 S&P 500 companies have reported) of the way into the third quarter earnings season and the popular opinion seems to be that the earnings are disappointing, that this current earnings cycle has peaked and that earnings going forward will fall sharply (earnings cliff). In a nutshell, we don't believe that this is the case and will begin with the former, that the current crop of earnings reports are disappointing.

2012-11-06 The Absolute Return Letter: The Era of Kakistocracy by Neils Jensen of Absolute Return Partners

We are now five years into a crisis that just doesn't want to go away. Paraphrasing Charles Gave of GaveKal who wrote a supremely succinct paper on this topic only last week, policy makers continue to tamper with interest rates, foreign exchange rates and asset prices in general. They continue to permit deposit-taking banks to operate like casinos. They issue new debt to pay for expenditures when we are already drowning in debt. They just don't seem to get it. Albert Einstein once defined insanity as doing the same experiment over and over again, expecting a different result.

2012-11-06 Same Old Samba for Brazil by Milton Ezrati of Lord Abbett

The old saw for the last 80-plus years puts Brazil perpetually on the verge of becoming the next economic powerhouse, but never quite making it. It is easy to see the potential. The nation is large; rich in natural resources and arable land; has a sizable, active population; and has well-developed trade relations in the Americas, with Europe, and with Africa. Brazil has failed to realize its potential less for economic reasons than because of misguided government policies.

2012-11-06 Favorable Reports Post Sandy by Christian Thwaites of Sentinel Investments

The devastation of Sandy blighted the week. We were lucky in that most of our employees escaped the worst effects. We had some evacuations and plenty of lost power. But the images of devastation were overwhelming and we hope our clients and friends of the firm are safe. Perhaps, as a non-native, my perspective is warped but in the US we have an uncanny ability for industry, problem-solving, drive, inventiveness and optimism. Sometimes the very best of us comes out in these times.

2012-11-05 Stream of Anecdotes by John Hussman of Hussman Funds

Analysts who interpret economic data as a stream of unconnected anecdotes are likely to find recent data encouraging, and will easily dismiss any concern about a U.S. recession on that basis. For our part, the internals of the economic picture new orders, backlogs, real income growth, and even the employment components of prominent economic surveys continue to deteriorate. Based on dozens of economic variables and methods that account for leading/lagging relationships (e.g. unobserved components estimates) our view remains that the U.S. economy has already entered a recession.

2012-11-05 3 Reasons to Consider Russia by Russ Koesterich of iShares Blog

With US investors largely focused on domestic matters these days, it can be easy to miss potential opportunities in international investing. Here, Russ K discusses the pros and cons of one such opportunity Russian equities.

2012-11-05 Want to learn Mandarin and Hindi? Go to Australia by Team of Thomas White International

Australia has planned an ambitious 'Asian Literacy' program aimed at boosting cultural and economic ties with Asia.

2012-11-05 Americans Head to the Polls Tuesday to Decide Tight Presidential Race by Matt Rubin of Neuberger Berman

As the eastern seaboard continues to recover from the aftermath of Hurricane Sandy, estimates for the economic cost of the storm continue to climb and currently stand in the range of $30 to $50 billion. In the near-term, economic activity in the region is likely to be negatively impacted by the storm; however, the rebuilding of infrastructure, housing and businesses should boost growth in areas most impacted by Hurricane Sandy over the longer term.

2012-11-05 A New Queen Bee by Jeffrey Saut of Raymond James

By the time a queen bee is five she is old and no longer reproduces, leaving her army of honeybees torn between loyalty and survival. Since the hive cannot survive without a productive queen, the beekeeper reached into the hive with a long-gloved hand and squashes the enfeebled queen. With the entire hive as witness, all know the queen is dead. Absent the scent of their leader, the honeybees panic. Something similar to that "queen bee" sequence may be happening currently. The "old queen," at least in the private sector, was driven by exports and manufacturing.

2012-11-05 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

A storm shortened trading week saw virtually no movement in the popularly followed stock market indices.

2012-11-05 And That's the Week That Was by Ron Brounes of Brounes & Associates

Superstorm Sandy overshadowed most all newsworthy stories during the week as much of the East Coast (and beyond) suffered some ill-effects and many will be fighting to overcome challenges for many days (weeks, months) to come. The stock market closed over consecutive days to start the week and uncertainty (volatility) ensued with investors enjoying the best single day performance in a month-and-a-half, only to give up those gains a day later as many set portfolios in advance of the election. Soon the campaign will be a distant memory (but the "fiscal cliff" will become a near-reality).

2012-11-05 China Forges Ahead by Team of Janus Capital Group

Economic headwinds loom on the horizon as we approach 2013, including a sovereign debt crisis in Europe and pending fiscal cliff in the U.S., but we think you can cross China off your list of worries. Economic data pointing to a slowdown in China has troubled investors. Many even question the reliability of that data, and suggest things could be worse than reported.

2012-11-05 Commentary and Statistics by Team of ING Investment Management

U.S. equity markets were mixed during an abbreviated trading week in which Hurricane Sandy forced the longest weather-related shutdown of U.S. stock trading since 1888. While the S&P 500 eked out a small gain, the DJIA and Nasdaq closed slightly lower.

2012-11-05 Election Matters, But Stocks are Cheap by Brian Wesbury, Bob Stein of First Trust Advisors

Tomorrow's election may be the most important one for economic policy of our generation. Years from now, we may look back at the choice Americans make as an inflection point leading toward either more economic freedom or less, with major effects on long-term economic growth and living standards.

2012-11-05 Election's Impact on Investors by Chris Maxey, Ryan Davis of Fortigent

Next Tuesday's election will bring some clarity to the types of policies that will shape the fiscal and economic future of America. President Obama and Mitt Romney certainly share different visions on how the US should tackle middling growth, while addressing the longer-term issues of the US fiscal deficit and seemingly unsustainable entitlement programs.

2012-11-05 Day of Reckoning by Charles Lieberman of Advisors Capital Management

Tomorrow's election is too close to call according to the polls, while Friday's jobs report was decent, blemishes notwithstanding. Super storm Sandy was and remains a severely disruptive force to the Northeast, particularly New Jersey. A few thoughts on these issues follow.

2012-11-02 Fiscal Cliff: Cataclysm or Non Event? by Team of Managers Investment Group

Now updated through 3Q. This compendium provides an historical perspective of economic data compared to today's results, and provides comments on any developing trends. We also include a synopsis of financial markets results. The OTOTM Chart Book is designed with easy-to-read graphics to tell a story and help you visualize the changes taking place in today's economy.

2012-11-02 World's Economies Come of Age by Mark Mobius of Franklin Templeton Investments

As we grow and age, our needs and habits often change. The same is true of economies, which grow and change along with their people. Short-term statistics that impact a country's economic growth rate, such as consumer spending, exports and the like are certainly important, but there are also long-term shifts that can have significant economic implications for the future. Changing demographics is one of them. As a long-term investor, I have to look not only at today's opportunities, but also plan for tomorrow's developments.

2012-11-02 What's Troubling India? by Kenneth Rogoff of Project Syndicate

Just a couple of years ago, India was developing a reputation as an attractive investment location, with heads of state virtually tripping over one another to meet business leaders in Mumbai and pave the way for further trade and investment. Now their interest has faded, along with India's macroeconomic numbers.

2012-11-02 ECRI Weekly Leading Index: Still Jogging in Place by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) slipped fractionally in the numbers released today. It is now at 126.6, down from last week's 126.7 (revised from 126.8). Likewise, the WLI growth indicator (WLIg) slipped slightly, now at 5.9, down from last week's 6.0. WLIg has now spent ten consecutive weeks in expansion territory, although it is off its interim high of 6.1. But for the past six weeks the WLI has been jogging in place in a narrow range (126.2 to 126.7).

2012-11-02 The Other Financial Crisis by Mohamed El-Erian of Project Syndicate

Two variants of financial crisis are continuing to wreak havoc on Western economies: the sovereign debt crisis, involving governments; and a less visible one at the level of small and medium-size businesses and households. Until both are addressed properly, the West will remain burdened by sluggish growth.

2012-11-02 Of Varied States: Cyclical, Storm-Tossed and Swing by Alan Levenson of T. Rowe Price

The latest readings on employment growth and household formation show a firm underpinning for moderate growth, with the household sector gathering momentum toward the emergence of positive feedback loops. Despite the immense human cost of Superstorm Sandy, the adverse impact on measured economic activity is likely to be short-lived, with a compensating rebound to emerge before quarter-end. Next week's general election results should bring clarity to the route that policy makers will take to avoid the year-end fiscal cliff.

2012-11-02 Who Will Lead America Over the Next Four Years? by Frank Holmes of U.S. Global Investors

If President Obama is reelected, it could be a negative for certain energy companies involved in natural gas fracking, says International Strategy & Investment (ISI). Conversely, a Governor Mitt Romney win could be significant for energy companies. In its Romney Portfolio ISIs rationale is that Romney and the GOP will try to do more to promote traditional forms of energy, including offshore drilling, approving the Keystone pipeline, and exploiting the nations coal resources.

2012-11-02 Blind Faith by Steven Romick of First Pacific Advisors

Although we cannot impose our will on this administration as to Mr. Bernankes continued role at the Fed, we would at least like to make our case for a Fed chairman more aware (at least publicly) of the unintended consequences of ultra easy monetary policy, and one with less hubris.

2012-11-02 What Would Happen at the Fed Under a Romney Presidency? by Josh Thimons of PIMCO

Between now and the election expect markets to continue to reflect the changing election probabilities. Expect Treasury yields to climb if Romneys probability of victory increases due to fear of what he will do when it comes to Fed nominations. However, any substantial rise in Treasury yields based upon a Romney victory is likely to be a buying opportunity, because Fed policy will be accommodative regardless of who controls the White House.

2012-11-02 High Yield is Looking Expensive by Russ Koesterich of iShares Blog

High yield has enjoyed a rally over the last several months. Russ explains why it may be a good time to reexamine your exposure to the asset class.

2012-11-01 Invesco Fixed Income Investment Insights: October 2012 by Darren Hughes, Scott Roberts of Invesco

High yield bond mutual funds have received $38.9 billion of inflows year-to-date through August, the second largest net inflow in the US retail bond category as measured by Lipper. Given known search activity and anecdotal evidence, we believe institutional flows into the asset class have been strong as well. Given this backdrop, we'd like to provide some insight into what's driving these flows, the likelihood of this continuing and the value in the asset class.

2012-11-01 Growth Outlook for Europe, China and the US by Mark Nash of Invesco

Growth Outlook for Europe, China and the US Mark Nash, Senior Portfolio Manager in Invesco Fixed Income, outlines the case for global "core" government bonds amid central bank actions on growth prospects in Europe, China and the US.

2012-11-01 The Fed and the Fiscal Cliff by Zach Pandl of Columbia Management

Prospects for this quarter's results are being very closely scrutinized. After healthy growth in Q1, Q2 results proved quite sobering, as sales decelerated and operating leverage proved hard to come by. Given continued disappointing global macro growth, Q3 results seem tracking to be close to flat year over year again. Implicit in the consensus S&P500 estimate of around $103 is a reacceleration in Q4. Implicit in the 2013 consensus of around $115 is renewed healthy growth continuing consistently through the year. Such reacceleration seems highly at risk, which raises a few questions.

2012-11-01 A Value Recovery Is Long Overdue by Sharon Fay of AllianceBernstein

It's been a long, hard slog for value stocks lately. I'd say we're long overdue for a value recovery. But what would it take?

2012-11-01 Time To Vote! by Bill Gross of PIMCO

So I pulled out my magic lamp that for some reason works only every October 22nd, and rubbed until the Genie appeared in his red and white checkered cloak with a 10-inch diameter Flavor Flav clock hanging ceremoniously around his neck. Being a rather forward, although not disrespectful Genie, he immediately said, "Mr. G, instead of the yield on the 10-year Treasury, perhaps this year you should wish to know who is going to win the Presidential election?"

2012-10-31 Defying the Crowd on Chinese Stocks by Stuart Rae of AllianceBernstein

Slowing economic growth, uncertainty about government policy and disappointing returns have made equity investors wary of China. In other words, it's a perfect time to hunt for investment opportunities.

2012-10-31 US Stocks Facing a Bumpy Ride by Russ Koesterich of iShares Blog

The US stock exchanges are slated to reopen for trading on Wednesday, after Hurricane Sandy prompted the longest weather-related closure of the New York Stock Exchange since 1888. What can investors expect when trading resumes? Russ K explains.

2012-10-31 The Role of Risk in Asset Allocation by Jason Hsu of Research Affiliates

A traditional asset allocation framework allocates to various asset classes with the goal of matching important risk exposures. In reality, many asset classes share exposures to common risk factors and thus are highly correlated, particularly with equities. This article explains how investors can achieve more intuitive and perhaps more sensible portfolios with an approach based on risk factors.

2012-10-31 Switch: Business Confidence Sinks While Consumer Confidence Lifts by Liz Ann Sonders of Charles Schwab

A wide gap has developed between sagging business confidence and improving consumer confidence...and the election and fiscal cliff appear to be the culprits.

2012-10-31 What Really Happened in Benghazi on Sept. 11 by Gary Halbert of Halbert Wealth Management

I've been taking a lot of flak from the Obama supporters in this audience over the past few weeks. Some are demanding that I stick to economic and investment issues and stop criticizing the president. Sorry liberals, but I have long maintained that who we elect to run the country has a big impact on the economy and therefore investment trends.

2012-10-31 Macro View: Natural Disaster Economics by Scott Minerd of Guggenheim Partners

"Super-Storm" Sandy will distort economic activity and data over the coming months.

2012-10-30 Building Portfolios that Beat their Benchmark: Measuring Nanometers with a Yardstick by Bob Veres (Article)

Using tools he co-developed with the Nobel-prize winning economist Bill Sharpe, one advisor has found that he can reliably outperform an appropriate benchmark. His work proves it is possible to build a portfolio knowledgably. You just need the right tools to get the job done.

2012-10-30 The Yield Hunt by Michael Lewitt (Article)

The high-yield market is not in danger of imminent collapse as some have argued. As long as defaults remain relatively low, and interest rates remain invisible, investors will continue to chase yield. But a few things could cause a sharp sell-off in the near future.

2012-10-30 Finding Hidden Revenue with Existing Clients by Dan Richards (Article)

Investor skepticism and an uncertain economy are challenging advisors to maintain revenue growth and practice profitability. That's why I was intrigued by an advisor who's used a simple strategy to achieve substantial growth in assets from existing clients, even though she already managed most of their money.

2012-10-30 Nice Speech, Tough Crowd by Christian Thwaites of Sentinel Investments

Sandy is pummeling everything we know on the eastern seaboard. I hope everyone stays safe and we can ride this out without too much damage. Thankfully markets are closed. Meanwhile, here's our views on capital markets on Monday.

2012-10-30 Weekly Update: Commentary and Statistics by Team of ING Investment Management

U.S. equity markets fell back into decline during the week, as earnings reports and more specifically, forward outlooks inspired investor caution. Meanwhile, a potential "Frankenstorm" has the East Coast on edge for the coming week.

2012-10-30 A Bombing in Lebanon by Bill O'Grady of Confluence Investment Management

The larger issue is related to Syria's civil war and the growing potential for the conflict to regionalize. In this report, we will offer a short history of Lebanon and Syria, examine the current state of the conflict in Syria and discuss the potential for the Syrian civil war to become a regional conflict. As always, we will conclude with potential market ramifications.

2012-10-29 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

Disgruntled investors took a look at the earnings reports and ran for the hills. With some industrial and techs issuing pessimistic reports (mainly in their outlooks), investors chose to take a hiatus. Election season is just a week-ish away and then the fiscal cliff looms in the not-so-distance future, so plenty of uncertainties and concerns remain for the time being. (And don't forget Spain.)

2012-10-29 The Quest for Certainty by John Mauldin of Millennium Wave Advisors

The last two weeks we have been looking at the problems with models. First we touched on what I called the Economic Singularity. In physics a singularity is where the mathematical models no longer work. For example, models based on the physics of relativity no longer work if one gets too close to a black hole. If we think of too much debt as a black hole of sorts, we may understand why economic models no longer work. Last week, in "The Perils of Fiscal Cliff," we looked at the use of fiscal multipliers by economists in order to argue for or against governmental economic policies.

2012-10-29 A Moderate Recovery More Of The Same by Scott Brown of Raymond James

The advance estimate of 3Q 12 GDP growth was not far from expectations. Consumer spending growth was moderately strong, while business fixed investment was a bit weak. The details suggest that some of the headwinds may be abating, although risks are tilted to the downside.

2012-10-29 Distinction Without a Difference by John Hussman of Hussman Funds

In recent weeks, market conditions have fallen into a cluster of historical instances that have been associated with average market losses approaching -50% at an annualized rate. Of course, such conditions don't generally persist for more than several weeks the general outcome is a hard initial decline and then a transition to a less severe average rate of market weakness (the word "average" is important as the individual outcomes certainly aren't uniformly negative on a week-to-week basis).

2012-10-29 Velocity, Uncertainty & the Economy by Brian Wesbury, Bob Stein of First Trust Advisors

Recently we lifted our recession odds to 25% from 10%. For some, this was worrisome. In recent weeks we've been asked, "If you guys get a little bearish on the economy, after being bullish for so long, shouldn't I get really nervous?" Our answer to this question is "no."

2012-10-29 Waiting for Treasuries to Reverse Course by Chris Maxey, Ryan Davis of Fortigent

In the years since the global financial crisis, investors have funneled money into fixed income securities. This year alone, more than $260 billion found its way into fixed income mutual funds. In an environment desperate for yield-oriented solutions, such demand is not surprising. What might be considered surprising, however, is investors' willingness to embrace such yield with extraordinary risk attached.

2012-10-29 The White Hurricane by Jeffrey Saut of Raymond James

I revisit The White Hurricane this morning because it potentially looks like another 100-year storm is heading pretty close to Manhattan. So in addition to dealing with the Benghazi scandal, Syrian atrocities, Euroquake, the "fiscal cliff," a stalled U.S. economy, softening earnings momentum, waning revenues, a dysfunctional government, the nastiest campaign I have ever seen, and who Taylor Swift should date next, Wall Street now has to contend with the potential of being flooded out.

2012-10-29 The Shifting Investment Environment: Picking Growth Stocks in a "Saturated" World by Virginie Maisonneuve, Katherine Davidson of Schroders Investment Management

Is the global economy close to reaching a tipping point? The impacts of our key themes (demographics, climate change and the emerging market supercycle) are combining with the ramifications of the global financial crisis to create an environment where growth is reaching a point of "saturation". In this world, focusing on the sustainability of growth becomes more important than ever. This is important for investors as the global economy painfully adjusts to new realities and follows a rocky path to normalization.

2012-10-26 TIPS: Still A Good Value? by Stephen Percoco of Lark Research, Inc.

Treasury Inflation-Protected Securities extended their gains in the 2012 third quarter, outperforming straight Treasuries for the second time this year. In the 2012 first quarter, TIPS registered modest gains as straight Treasuries lost ground. During that quarter, yields on straight Treasuries rose in anticipation of continued improvement in the economy. In the 2012 second quarter, straight Treasuries came roaring back, when yields fell as economic growth faltered. TIPS turned in a very strong performance then too, but not as strong as straight Treasuries.

2012-10-26 No New News From the Fed by Liz Ann Sonders of Charles Schwab

Given that it's just two weeks before the presidential election and that the Federal Reserve made several key announcements after its last meeting in mid-September, we weren't expecting any fireworks from today's Federal Open Markets Committee (FOMC) meeting.

2012-10-26 October 2012: Equity Investment Outlook by Team of Osterweis Capital Management

Equity and other "risk" assets rallied in the third quarter in anticipation of further monetary easing by central banks around the world. The prospect of increased liquidity from the central banks appears to have focused investor attention, at least temporarily, away from the generally softer economic data that continue to emerge from Europe and Asia.

2012-10-26 Of Irish and Fiscal Cliffs by Team of Franklin Templeton Investments

Dr. Michael Hasenstab, Templeton Global Bond Fund portfolio manager and co-director of Franklin Templeton Fixed Income Group's International Bond Department, doesn't prescribe legislative answers, but he can relate the fiscal challenges the U.S. faces to the experiences of a country with its own dramatic cliffs: Ireland.

2012-10-26 ECRI Weekly Leading Index: Running in Place by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose fractionally in the numbers released today. It is now at 126.8, up from last week's 126.6 (revised from 126.7). However, the WLI growth indicator (WLIg) slipped slightly in expansion territory, not at 6.0, down from last week's 6.1. WLIg has now spent nine consecutive weeks of in expansion territory. But essentially the WLI has been running in place for the past five weeks.

2012-10-26 Will South Africa's Struggles Overshadow its Potential? by Mark Mobius of Franklin Templeton Investments

Africa is a continent many investors bypass, but from my perspective as a long-term investor, I think that's a mistake. South Africa has faced some struggles recently, but I think they can be overcome, and a brighter future could be ahead there for its people. South Africa is the largest economy in Africa, and is the only country on the continent where I think the "frontier" market label doesn't apply. Some have added an "S" to the end of the "BRIC" acronym to include South Africa in the grouping of emerging market economies of Brazil, Russia, India and China.

2012-10-26 Don't Fear a Normal Gold Correction by Frank Holmes of U.S. Global Investors

Dont let the short-term correction fool you into selling your gold and gold stocks. The dramatic increase in money suggests that monetary debasement will continue, and in addition to all the above drivers, these are the positive dynamics driving higher prices for gold and gold stocks.

2012-10-26 How Can I Know If My Stocks Are Fairly Valued? by Chuck Carnevale of F.A.S.T. Graphs

When the operating results of a business, i.e. its earnings and cash flows, do not represent an attractive rate of return on investment, it should be instantly obvious to the prudent investor that fair valuation is not present. Conversely, when the earnings yields are very high based on reasonable assumptions, the opportunities this represents should be readily apparent as well.

2012-10-26 What Now? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

The market appears to be in a "wait-and-see" mode in advance of the elections, but looking beyond November 6th is important for investors. The election is only one piece of the puzzle, and certain aspects of the political landscape likely won't be much clearer after Election Day. Earnings season has been somewhat disappointing, even though there was a relatively low bar to hurdle. We see more signs that the slowdown in the United States may be ending, however, with strength in housing particularly noteworthy.

2012-10-26 Weekly Economic Commentary by Carl Tannenbaum, Asha Bangalore and James Pressler of Northern Trust

Fiscal policy is a matter of multiplication. US GDP growth accelerated in the third quarter, but remains less than ideal. Recent reports out of China reassured the markets, but underlying trends are not so promising.

2012-10-25 Cheap Debt is Good News for Stocks by Scott Minerd of Guggenheim Partners

The eventual return of leveraged buy-outs (LBOs) and an uptick in mergers and acquisitions (M&A) should give investors further reason to be bullish on stocks.

2012-10-25 Third Quarter EPS: A Harbinger for 2013? by Robert McConnaughey of Columbia Management

Prospects for this quarter's results are being very closely scrutinized. After healthy growth in Q1, Q2 results proved quite sobering, as sales decelerated and operating leverage proved hard to come by.

2012-10-25 The Arithmetic of Equities by Andrew Redleaf of Whitebox Advisors

t is a first principle at Whitebox to be security agnostic: to penetrate the labels like bond and stock and hybrid and assess the real status of a security by the risks and rewards that flow from the combination of economic circumstances and the details of capital structure. For most of the last decade it was quite clear to us that equities bore all their traditional risk but bolstered only bond-like rewards (at best), while high yield bonds often offered equity-like returns that could be shielded from default risk by shorting the all too risky stock of the same or a similar firm.

2012-10-25 In or Out? The Case for - and Against - the Stock Market by Team of Knowledge @ Wharton

Given ongoing volatility in the stock market, it's no surprise that investors are increasingly bearish on the market's prospects, beset by a lack of confidence in its institutional underpinnings and a general pessimism about the direction of the economy. But is that distrust misplaced? Wharton experts are mixed about the future fortunes of the stock market, with some saying that investors are withdrawing at the worst possible time and others noting that many people had entrusted too much of their retirement savings to the fate of equity markets.

2012-10-25 October 2012 Newsletter by Harold Evensky of Evensky & Katz Wealth Management

Oh the joys of driving to a baseball game; sitting in endless traffic four miles from the stadium, inching past full lot after full lot, or not finding your car when it's time to go home (was it D-4 or 404 Green?). Now you can streamline your parking experience with ParkWhiz, a Chicago-based company that's recently gone national. This and other missives from Harold Evensky.

2012-10-25 Renminbi on the International Stage by Mark Mobius of Franklin Templeton Investments

For more than a decade, China's currency, the Renminbi (RMB), had been on a path of appreciation, but some weakness this year generated renewed talk about whether the currency is fairly valued against global currencies. As global equity investors, we are constantly faced with currency changes. This is an important factor when considering our investments, because currency movements impact companies' earnings and operations.

2012-10-25 Do the US Elections Matter for Investors? by Frank Caruso, Robert Brown of AllianceBernstein

Frank Caruso and Robert Brown Pundits across the political spectrum say the health of the US economy and stock market hangs in the balance of this year's presidential election. We found that when it comes to driving the stock market, politics actually takes a back seat.

2012-10-24 It's Where You Start by Pamela Rosenau of HighTower Advisors

There is no shortage of cash on the sidelines. Although some investors have been sitting on a pile of cash for quite some time, there are a few catalysts on the horizon that may motivate some of that cash into the stock market.

2012-10-24 Based on Real Math The S&P 500 Is Fairly Valued by Chuck Carnevale of F.A.S.T. Graphs

As investors, we do not believe in forecasting stock markets or stock prices on individual stocks. Instead, we approach investing as the process of calculating intrinsic value based on fundamentals. To us, the most important fundamental to be considered when evaluating the True Worth of a market or a common stock is earnings. Therefore, it's important that the reader understands that this article is offered as a mathematical calculation of what the S&P 500 is actually worth based on earnings.

2012-10-24 Voluntary Exile by Bill Smead of Smead Capital Management

We at Smead Capital Management (SCM) believe that institutional and individual investors have moved their asset allocation away from large cap US stocks. Institutions are in exile in private equity, hedge funds and all things commodity and BRIC-trade related.

2012-10-23 She Turns Sea Shells by the Sea Shore by Mariko Gordon (Article)

I love the sea. Always have. I explain how my seaside search for shells while unplugging on the Gulf Coast of Florida led to some useful insights related to uncovering an investment manager's process.

2012-10-23 ECB Bond Buying Is a Double-Edged Sword by Darren Williams of AllianceBernstein

European Central Bank (ECB) president Mario Draghi's promise to do "whatever it takes to preserve the euro" and create a new bond-purchase program has been positive for market sentiment. But the program also carries real dangers if it breaks the fragile consensus on the board of the ECB and eases the pressure on governments to create a "genuine" economic and monetary union.

2012-10-23 There's New Hope for US Recovery as Early Cyclical Sectors Rebound by Joseph Carson of AllianceBernstein

Something is changing in the US economic recovery. Housing and autos are finally starting to wake up from a recession-induced slumber, and the timing couldn't be better.

2012-10-23 The Perils of the Fiscal Cliff by John Mauldin of Millennium Wave Advisors

In today's letter we'll peek over the Fiscal Cliff and see what economic models can tell us about government spending. And if we have time we'll quickly look at an interesting study that uses economics to predict the outcome of this US presidential election.

2012-10-23 A Tepid Week for Earnings by Matt Rubin of Neuberger Berman

Through the first two weeks of earnings season, corporate results have largely mirrored the releases we witnessed a quarter agoof the 118 S&P 500 companies that have reported to date, only 60% have exceeded their earnings estimates while 29% have surpassed their revenue expectations. This week, we will see financial results from 169 S&P 500 companies, representing 32% of the index market capitalization, which will be well dispersed across all 10 S&P 500 sectors.

2012-10-23 Silver Anniversary by Jeffrey Saut of Raymond James

It was Friday October 16, 1987 as I looked across Wheat First Securities' trading desk only to see a stark look on the face of my second in command, Art Huprich. At the time the D-J Industrials (INDU/13343.51) were down about 100 points with 30 minutes left in the trading session. And, as stocks swooned I said to Art, "Today is just for practice!" Little did I know how prophetic that statement would prove.

2012-10-23 The GDP Outlook by Scott Brown of Raymond James

On Friday, the Bureau of Economic Analysis will release the advance estimate of third quarter GDP growth. Theres always a lot of uncertainty in the advance estimate. The BEA will have to make assumptions about inventories, foreign trade, and a few other missing components. However, the report should continue to show the U.S. economy in recovery mode.

2012-10-23 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks remained sluggish last week as earnings guidance more than last quarter's reports put a damper on stock prices. In addition, the European summit was a failure and investors remain hesitant before the November elections.

2012-10-23 Going Cheap with Chinese Stocks by Russ Koesterich of iShares Blog

Inexpensive valuations and stabilizing growth make Chinese stocks a category to watch right now. Russ K explains his overweight view of the controversial country.

2012-10-22 And That's the Week That Was by Ron Brounes of Brounes & Associates

Maybe a four day work week would make some sense? Well, at least, it would have been helpful this week. After a strong start in the equity markets (and a four-day winning streak), the anniversary of Black Monday brought horrid memories of past bearish times and stocks gave up all (most) of their early gains. Major techs reported poor earnings and the Nasdaq struggled more than most as weak PC demand continues to take its toll. Good news...one bad day does not a market make.

2012-10-22 Cracker Barrel: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article is going to examine the home-style country restaurant Cracker Barrel (CBRL) through the lens of FAST Graphs - fundamentals analyzer software tool, which shows us a picture of a company that is currently in value. The prudent growth and dividend investor may want to do their own due diligence into this fine company for possible addition to their own portfolio.

2012-10-22 The Data-Generating Process by John Hussman of Hussman Funds

For anyone who works to infer information from a broad range of evidence, one of the important aspects of the job is to think carefully about the structure of the data what is sometimes called the "data-generating process." Data doesn't just drop from the sky or out of a computer. It is generated by some process, and for any sort of data, it is critical to understand how that process works. In the financial markets, the data-generating process is often very misunderstood.

2012-10-22 More Plow Horse by Brian Wesbury, Bob Stein of First Trust Advisors

If we see any theme in the third quarter, it was that the consumer had growing purchasing power while businesses temporarily pulled back from investing in plant and equipment. Usually, that kind of retreat in business investment would have us more concerned. Almost every time machinery orders are down 10% from the year before, like they are now, we are near recession. But we think many companies are temporarily waiting until after the election to decide what to do.

2012-10-22 An Alternate Reality by Robert Stimpson of Oak Associates

The largest positive factor affecting the environment for stock prices this year has been the recovery in the housing sector. After years of struggle, the sector appears to have turned the corner. The housing market had been showing signs of improvement for some time, but the debate as to whether the recovery was legitimate weighed on the group and added to concerns over the economy.

2012-10-22 Politics, Cliff Watching Take Priority in the Short-Term by Bob Doll of BlackRock Investment Management

The US elections are only two weeks away, and the recent polls show a very tight race. There are significant differences, both perceived and real, in the policies of the two candidates and the impact they might have on financial markets.

2012-10-22 More traction...Just Look Through the Earnings by Christian Thwaites of Sentinel Investments

Last week saw an important debate on how the US has fared in the post recession recovery. The short answer is, "not well" if measured by a return to GDP growth trends or per capita income. But the counter, as explained by Reinhart and Rogoff, is "faster than you would expect." We're in the second camp.

2012-10-22 Chinese Stocks Looking Like a Bargain by Frank Holmes of U.S. Global Investors

With negative sentiment toward China reaching an extreme in recent months, patient investors have been rewarded with recent news of improving data from the Asian giant.

2012-10-22 The Benefits-and Risks-of Gifting Before Year-End by Daniel Eagan of AllianceBernstein

With gift and estate taxes poised to rise meaningfully and the exemption scheduled to plummet, high-net-worth families should consider giving to family and philanthropy this year, even if that's sooner than they'd anticipated.

2012-10-22 The Little Country That Could by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

In this geopolitical report we will take a brief look at Estonia's history, its economy after the break-up of the Soviet Union, its remarkable economic growth in the 1990s and early 2000s, and the ensuing downturn in 2008. The country stands out for choosing a different path to deal with the recession than many other European countries.

2012-10-19 International Equity - Monthly Product Commentary: September 2012 by Team of Thomas White International

International equities made strong gains in September as aggressive policy action from central banks in Europe and the U.S. helped offset concerns over moderating economic growth across the globe. The European Central Bank (ECB) announced a program to buy unlimited quantities of debt issued by troubled countries such as Spain, Portugal, and Greece, provided they adhere to a strict fiscal adjustment timetable.

2012-10-19 House of Mirrors by Jeremy Boynton of Laureate Wealth Management

Did you ever try to navigate the "House of Mirrors" as a kid at your local carnival? You know the one I mean ---- where you walk through a labyrinth of mirrors designed to confuse your orientation while mocking you with various distortions of your body? If you were particularly skilled, you could use the mirror to your own advantage. What a compelling metaphor for the current state of the financial markets.

2012-10-19 Quarterly Letter by Ron Muhlenkamp of Muhlenkamp & Company

In his latest quarterly letter, Ron Muhlenkamp, president and portfolio manager of the Muhlenkamp Fund, re-examines Europe, China, and U.S. Politics as the major drivers of the markets. On September 7, 2012, Muhlenkamp published a Market Commentary, headlined "Threat of European Banking Crisis Recedes." In it, he discusses the Outright Monetary Transactions program, introduced by the European Central Bank. Mr. Muhlenkamp thinks this program makes credible the ECB's promise to do all it can to keep the Eurozone together.

2012-10-19 Muddling Down the Middle by Josh Thimons of PIMCO

PIMCO expects that the debate over the fiscal cliff will end in fiscal consolidation, but not a fiscal catastrophe. Unfortunately, while the Fed's monetary policy actions have been, by and large, successful in achieving its intermediate-term goal of increasing asset valuations, they have not been effective in influencing real economic outcomes. Our forecast for the drag on GDP from the fiscal cliff in the coming year is roughly negative 1.5%. Improvement in the housing market will only fill a small part in that hole.

2012-10-19 Cyclical and Turnaround Stocks: There Is A Lot Of Value In This Market: Part 5 by Chuck Carnevale of F.A.S.T. Graphs

This article represents the final installment in our "There Is A Lot of Value In This Market" series. In some ways, this article represents prima fascia evidence supporting some of our main hypotheses. First of all, this article will clearly support the notion that not all common stock are the same, and therefore, they should all not be painted with the same broad brush stroke (generalities or opinions).

2012-10-19 Monthly Investment Bulletin by Team of Bedlam Asset Management

In their efforts to support growth, governments and central bankers have steadily chipped away at the free market. Through increased regulation, financial suppression and monetary intervention they have accentuated the lack of supply in quality fixed income paper, driving bond yields down to previously unthinkable levels. Policy makers are almost pathological in their belief that the end justifies the means as they try to inflate away their debt by keeping interest rates below nominal growth.

2012-10-19 ECRI Weekly Leading Index: Index Slips, But Growth Rises by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index of the Economic Cycle Research Institute declined in the numbers released today. It is now at 126.7, down from last week's 127.6 (revised from 127.7). However, the WLI growth indicator rose further in expansion territory to 6.1, up from last week's 5.7. WLIg has now posted sixteen consecutive weeks of improvement and is at its highest level since May 20, 2011. The divergence between the WLI and its growth derivative is probably attributable to apparent anomaly in the BLS's weekly unemployment data over the past two weeks.

2012-10-19 Blurring Lines: Positioning for Developed and Emerging Market Realignments by David Fisher, Julie Salsbery of PIMCO

The demographic, financial and political lines separating developed and emerging countries are increasingly blurred, and we believe bond investors will need to adapt. Not only do investors need to take a more holistic approach to analyzing and investing in sovereign debt, they also need to reconsider their strategic thinking regarding benchmarks and their tactical approach to seeking returns. PIMCO Global Advantage Strategy utilizes a GDP-weighted benchmark and capitalizes on PIMCO's global resources to create a portfolio designed to reflect the evolving international opportunity set.

2012-10-19 Global Overview: September 2012 by Team of Thomas White International

Aggressive policy action by the U.S. Federal Reserve and the European Central Bank (ECB) helped lift investor sentiment further in September, even as economic signals from across the world continued to be jaded. The Fed has committed to buy mortgage backed securities and keep interest rates low until U.S. economic growth becomes more vigorous and the unemployment rate declines to more comfortable levels.

2012-10-19 Not by Housing Recovery Alone by Team of T. Rowe Price

Strong August-September housing starts are a clear bricks-and-mortar response to reports of rising buyer traffic, confirming a broad-based cyclical recovery in new housing construction. This trend will contribute 0.4 percentage points (pp) to real GDP growth directly through in construction activity, and perhaps another 0.2 pp indirectly through the consumer purchases of those newly employed in housing-related industries and via wealth effects related to the nascent recovery in house prices.

2012-10-19 Beyond Borders: Currency Considerations for Investing by Russ Koesterich of iShares Blog

As more international assets are finding their way into investment portfolios, it's important for investors to recognize the effect that currency exposure may have on their portfolios.

2012-10-19 Chinese Stocks Looking Like a Bargain by Frank Holmes of U.S. Global Investors

This appears to be a good time to be investing in China, as stocks are historically cheap. Chinese stocks are also cheap compared to emerging markets.

2012-10-19 ECB Needs to Rescue German and French Banks More than European Periphery: Global Macro View by George Bijak of GB Capital

Whenever we talk about rescuing overleveraged Europe it is always about Spain, Italy, Portugal, Ireland, and Greece the European periphery loaded with debt that they cannot possibly repay. But a closer look at the recent IMF data reveals that German and French banks need rescue more than anybody

2012-10-18 Are High-Yield Stocks in Bubble Territory? by Joseph Paul of AllianceBernstein

Investors have been flocking to high-dividend-paying stocks, lured by their predictable, bondlike income and downside defenses. But investors may be getting more risk than they bargained for.

2012-10-18 Quarterly Review and Outlook - Third Quarter 2012 by Hoisington and Hunt of Hoisington Investment Management

Entering the final quarter of the year, domestic and global economic conditions are extremely fragile. Across the globe, countries are in outright recession, and in some instances where aggregate growth is holding above the zero line, manufacturing sectors are contracting. The only issue left to determine is the degree of the downturn underway.

2012-10-18 Tax Cliff Enhances Potential Benefit of Roth IRA Conversion by Daniel Eagan of AllianceBernstein

With US federal tax rates poised for a potential hike next year, now is a good time to consider converting retirement assets to a Roth IRA. Conversions are now available to all investors, with no income ceiling in place.

2012-10-18 Investment Outlook 2013: "ABCD" Investing: Anything Bernanke Cannot Destroy by Cliff Draughn of Excelsia Investment Advisors

The Ben Bernanke and Mario Draghi concert gave the markets a double shot of their love in the month of September by promising to print as much money as needed to finance the debts of their respective countries. Ever since the financial fraternity party ended in 2008 and the world began deleveraging its massive credit hangover, the global markets have been hooked on the next shot of love from the central bankers.

2012-10-18 As Global Growth Falters, Consider Emerging Markets by Russ Koesterich of iShares Blog

Global growth this year is forecast to lag that of both 2011 and 2010, and the outlook for 2013 isn't much better. These sobering forecasts are bolstering Russ K's view that investors should consider being overweight emerging market stocks.

2012-10-18 Quest Diagnostics, Inc: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

In this article we are going to examine Quest Diagnostics Inc (DGX) through the lens of FAST Graphs - fundamentals analyzer software tool. Quest Diagnostics, Inc. is the world's leading provider of diagnostic testing, information and services. FAST Graphs shows us a picture of a company that is current undervalued.

2012-10-18 Macro View: Europe's Glacial Move To Federalization by Scott Minerd of Guggenheim Partners

Uncertainty continues to weigh on European markets but the continent is still drifting toward federalization. Recent trends and political developments are constructive for an eventual return to growth for the region.

2012-10-18 Triskaidekaphobia1 \tris-kī-dek-ə-fō-bē-ə\ n: Fear of the Number 13 by Gene Tannuzzo of Columbia Management

In May of this year, the Congressional Budget Office published a paper outlining the tax increases and spending cuts scheduled to be automatically implemented on January 1, 2013 under current law. The paper illustrates the real risk of recession if Congress fails to address this looming "fiscal cliff" before year end. The markets are telling us not to worry about the fiscal cliff. Are the markets right, or should investors be more concerned that 13, as in 2013, could be an unlucky number for the U.S. economy?

2012-10-18 Emerging Markets Equity - Monthly Product Commentary: September 2012 by Team of Thomas White International

Investment inflows and low interest rates helped emerging market equities. Emerging market equities saw a healthy recovery during the month of September, as the U.S. Federal Reserve and the European Central Bank rolled out aggressive monetary measures to support their respective economies. As the U.S. and Europe are the biggest markets for exports from emerging market countries, it is hoped that the latest monetary stimulus measures will help these countries revive the export growth that has slackened in recent months.

2012-10-17 Great US Companies: Tomorrow's Foundation by Bill Smead of Smead Capital Management

Fears of a collapse in European economies and of a US recession subsided. Residential real estate appears headed for a comeback (Surprise?) in the US and nothing gives American consumers more confidence than knowing that their house is becoming more valuable.

2012-10-17 Fuzzy Math from the Continent of Peace by Christian Thwaites of Sentinel Investments

Whoops! The IMF made two announcements last week that caught our attention. But to set up the joke in all this, it's worth remembering that for decades the IMF preached austerity economics to any country that needed balance of payments assistance.

2012-10-17 Economics is Such a Drag by Fred Copper of Columbia Management

At least in Europe it is. Central bankers around the world are doing everything they can to try and pump up the global economy. Mario Draghi, President of the European Central Bank, has been incredibly aggressive and creative in trying to rectify the imbalances plaguing Europe.

2012-10-17 Banks Punished For Central Bank and Political Errors by John Browne of Euro Pacific Capital

In recent decades politicians have increasingly followed the Keynesian prescription of economic growth through continued government borrowing and the creation of undreamt of amounts of fiat money by central banks. To facilitate this process, the larger commercial banks have acted as the central banks' de facto distribution system, and as a result have grown ever larger while accepting progressively greater risks.

2012-10-17 Emerging Europe: Third Quarter 2012 Economic Review by Team of Thomas White International

In its recent economic assessment, the European Bank for Reconstruction and Development (EBRD) said it expects growth to slow down during the year in member countries such as Russia, Poland, Hungary, and Turkey as the effects of the Euro-zone crisis spills over. The bank said many of these countries have already seen lower growth, but Russia especially is affected by falling commodity prices. Striking a similar note, the International Monetary Fund in its World Economic Outlook said emerging economies of the world are at risk should the developed economies experience a continued slowdown.

2012-10-17 Rise Up: US Soft Patch Appears to be Ending by Liz Ann Sonders of Charles Schwab

By definition, inflection points are characterized by maximum weakness. Many US economic readings are again suggesting notable signs of life. Will the improvement be enough to offset the "fiscal cliff"?

2012-10-16 Stiglitz vs. Bremmer: What’s Next for the Global Economy? by Ben Huebscher (Article)

On October 3rd, the same night Barack Obama and Mitt Romney were clashing in their first debate, two equally polarized men met in New York City's Kaufmann Concert Hall to discuss the future of economics, both here and abroad.

2012-10-16 The New World of Credit by Michael Lewitt, Editor, The Credit Strategist (Article)

In an era in which economies are driven by the creation of fiat money by central banks, and where the base of hard money is dwarfed by the volume of outstanding debt, every form of capital is tied to credit. In 1919, William Butler Yeats famously wrote that 'the center cannot hold.' A century later, there is no center.

2012-10-16 The Romney Tax Plan by Brian Wesbury, Bob Stein of First Trust Advisors

The US federal budget is a mess. Spending has soared, which has hurt economic growth and undermined tax revenues. The result is four consecutive years of trillion dollar deficits. Politicians are always tempted to hike taxes to fix deficits, but the US has reached the point where this is not possible.

2012-10-16 Inflation: Washington is Blind to Main Street's Biggest Concern by Peter Schiff of Euro Pacific Capital

Journalists, politicians and economists all seem to agree that the biggest economic issue currently worrying voters is unemployment. It follows then that most believe that the deciding factor in the presidential race will be the ability of each candidate to convince the public that his policies will create jobs. It seems that everyone got this memo...except the voters.

2012-10-16 China's Pyramid of Power by Frank Holmes of U.S. Global Investors

China celebrated another achievement last week, as Mo Yan became the first Chinese citizen to win a Nobel Prize for literature. The selection of Mo was praised by a Chinese nationalist tabloid as a sign that mainstream China could "no longer be refused by the West for long."

2012-10-16 The Big Four Economic Indicators: Updated Real Retail Sales and Industrial Production by Doug Short of Advisor Perspectives (dshort.com)

The latest updates to the Big Four was today's release of the September Industrial Production, which rose 0.4 percent over the previous month following a 1.4 percent decline the month before. Yesterday the Census Bureau's Retail Sales number was released, and with today's release of the Consumer Price Index we can calculate Real Retail Sales. The latest 0.6% increase gives us a strong three-month upward trend after four months of flat or contracting data. Both indicators beat analysts' expectations.

2012-10-16 Bank of England Still Aiming at the Wrong Target by Darren Williams of AllianceBernstein

The UK is celebrating a near three-year low in consumer price inflation, but we think the Bank of England (BOE) should be more worried about the role that money and credit play in the inflation process.

2012-10-16 The ABCs of China's Share Markets by Mark Mobius of Franklin Templeton Investments

A shares, B shares, H shares. Chinese equity listings can be confusing to global investors. I'm often asked what I think about a particular share market in China, why one is outperforming others, and which to invest in. I can't tell you what to invest in, but I can give you some information which I hope will help you discern what choices make sense for you.

2012-10-15 The United States: Stability or Complacency? by Alan Levenson of T. Rowe Price

The International Monetary Fund's updated World Economic Outlook foresees a modest pace of U.S. economic expansion in 2012-2013, emphasizing significant downside risks emanating from the euro area crisis and from the domestic fiscal cliff. Weakness in the euro area and slower growth in a secularly-restructuring Chinese economy are weighing on U.S. export trends, but sturdier growth in Canada and Mexico is providing an important offset.

2012-10-15 Equity Market Review & Outlook by Richard Skaggs of Loomis Sayles

Global equity markets performed well in the third quarter after posting modest losses in the second quarter. The soft second quarter, which followed back-to-back double-digit quarterly gains, proved to be a pause rather than a signal that the equity bull market was ending. Though defensive sectors garnered favor in the second quarter, economically sensitive sectors have generally led performance this year, with technology, financials and consumer discretionary topping the list year to date.

2012-10-15 Bond Market Review & Outlook by Thomas Fahey of Loomis Sayles

Aggressive policy responses from major central banks were dominant forces in the third quarter. The European Central Bank (ECB), Federal Reserve (Fed), Bank of Japan (BoJ) and other central banks took decisive action, prompted by the escalating European sovereign debt crisis, slowing global growth, financial market volatility, and the impending US "fiscal cliff."

2012-10-15 Brazil: Infrastructure Push Creating Business Opportunities by Team of Thomas White International

With only 14 percent of Brazil's roads paved, motorways in the country are more suited to horse carts than vehicles. Those doing business in Brazil will be familiar with the "Brazil Cost." It's a disparaging pointer to the extra expenses investors inevitably incur in the country due to its befuddling bureaucracy, high taxes, and most of all, creaking infrastructure.

2012-10-15 Seven Varieties of Deflation by A. Gary Shilling of Gary Shilling & Associates

Inflation in the U.S. has historically been a wartime phenomenon, including not only shooting wars but also the Cold War and the War on Poverty. That's when the federal government vastly overspends its income on top of a robust private economyobviously not the case today when government stimulus isn't even offsetting private sector weakness. Deflation reigns in peacetime, and I think it is again, with the end of the Iraq engagement and as the unwinding of Afghanistan expenditures further reduce military spending.

2012-10-15 Passed Pawns by John Hussman of Hussman Funds

I've long been fascinated by the parallels between Chess and finance. Years ago, I asked Tsagaan Battsetseg, a highly ranked world chess champion, what runs through her mind most frequently during matches. She answered with two questions "What is the opportunity?" and "What is threatened?" At present, I remain convinced that the key opportunity lies in closing down exposure to risk.

2012-10-15 QE3Back to the Future by Milton Ezrati of Lord Abbett

The broad scope and open-ended nature of the Federal Reserve's third round of quantitative easing raises questions about what exactly Fed chairman Ben Bernanke has in mind. Some insight, remarkably, emerges from a speech he gave in November 2002 to the National Economists Club in Washington, D.C., when he was simply a Fed board member. Taking his cue then from fears of a Japanese-style deflation, he laid out a path for monetary stimulus in an extreme situation, outlining nontraditional policy tools that have since become common.

2012-10-15 Economic Singularity by John Mauldin of Millennium Wave Advisors

There is considerable disagreement throughout the world on what policies to pursue in the face of rising deficits and economies that are barely growing or at stall speed. Both sides look at the same set of realities and yet draw drastically different conclusions. Both sides marshal arguments based on rigorous mathematical models "proving" the correctness of their favorite solution, and both sides can point to counterfactuals that show the other side to be insincere or just plain wrong.

2012-10-15 And That's the Week That Was by Ron Brounes of Brounes & Associates

Though investors seemed to overlook the negative earnings projections for the third quarter, the initial releases finally brought out the sellers. While the naysayers had been drowned out by the optimism of the Fed moves, the early results and management warnings prompted investors to sell (and sell and sell) as the major equity indexes each plunged over 2% in what was considered the worst week since June. Heck even a "cheery" Joe Biden couldn't save the markets this week.

2012-10-15 High Yield and Bank Loan Outlook by Scott Minerd of Guggenheim Partners

The leveraged credit market turned in an impressive Q3 with high yield bonds and bank loans returning 4.3 and 3.1 percent, respectively. Unprecedented accommodation from central bankers across the globe has alleviated much of the macroeconomic tail risk that we highlighted in last quarters publication. Presented with a seemingly insatiable demand for new issue bonds, issuers returned to the torrid pace of issuance that characterized the start of 2012 by raising a record $99 billion during the third quarter.

2012-10-15 Commodity Inflation Complicating Pro-Growth Policies by Ryan Davis of Fortigent

The return of commodity inflation raises several questions, primary among them being the impact it will have on emerging markets. While rising commodity prices are generally bullish for equity prices in emerging markets, it may also inhibit central bank flexibility at a time when many developing countries are experiencing decelerating economic growth. This issue was paramount in 2010, leading to underperformance in many EM stock markets. Since then, however, commodity prices have generally moved sideways, allowing those fears to subside.

2012-10-15 ProVise Bullets by Ray Ferrara of ProVise Management Group

Some recent research by InvesTech Research shows that the performance of the Dow Jones Industrial Average can indicate who will win the White House. James Stack, President of InvesTech recently released a study that showed in elections since 1900 90% of the time the Dow has correctly predicted the outcome of the election based on its returns from Labor Day until Election Day. If the Dow posts a positive return during this time period, the party in power keeps the White House and if the return is negative, they do not

2012-10-15 The New Investment World is Not Near, It's Here by Russ Koesterich of iShares Blog

The recent pace and magnitude of economic change has left many investors disoriented, to say the least. Russ K explains why this new environment is unlikely to change any time soon, which may have implications for investors' current and long-term strategies.

2012-10-12 Blue-Chip Dividend Aristocrats - There is a Lot of Value in this Market: Part 4 by Team of F.A.S.T. Graphs

This is the fourth in a series of articles designed to counter a pervasive attitude that common stocks are expensive today. Furthermore, we would agree with those that contend that we have been in a stealth bull market for the last 18 months or more. However, would also contend that stocks were so cheap prior to this stealth bull-run that even though they have risen, there are still many stocks that remain fairly priced and even many that are undervalued. Blue-chip Dividend Aristocrats represent one of the best examples of our thesis.

2012-10-12 ECRI Weekly Leading Indicators: Time to Recant the Recession Call? by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) made a strong advance in the numbers released today. It is now at 127.7, up from last week's 126.2 (revised from 126.3). See the WLI chart below. The WLI growth indicator (WLIg) now marks its eighth week in expansion territory at 5.7, up from last week's 4.6. WLIg has now posted fifteenth consecutive weeks of improvement and is at its highest level since May 27, 2011.

2012-10-12 Teetering on the Edge? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Concerns about a possible US recession remain elevated in light of the pending "fiscal cliff," resulting in some lackluster stock market action. The fiscal cliff and uncertainty around tax and regulatory policy appear to be influencing business decisions to the detriment of economic growth. While worst-case scenarios for Europe may have been taken off the table by the ECB, Spain's reluctance to ask for aid is causing consternation. And although we see continued weak growth in China, signs indicate the global slowdown may be turning around.

2012-10-12 Chinas Pyramid of Power by Frank Holmes of U.S. Global Investors

We've been able to witness Chinas incredible growth, with GDP averaging 10 percent per year and more than 500 million people moving out of poverty over the past 30 years. Now after three decades of tremendous expansion, this new generation of leaders will have to carefully maneuver the country into the next decade, towing the line between maintaining the stability created during the previous Hu-Wen administration and continuing the political and economic reform necessary to adjust to the countrys slowing growth.

2012-10-12 Hard to be Easing by Nouriel Roubini of Project Syndicate

The US Federal Reserves third round of quantitative easing, or QE3, has many observers arguing that the effects on risky assets could be greater than in previous rounds. But, despite the Feds commitment to aggressive monetary easing, QE3's effects on the real economy and on US equities could well be smaller and more fleeting.

2012-10-12 U.S. Economic and Interest Rate Outlook - October 2012 by By Carl Tannenbaum and Asha Bangalore of Northern Trust

Budget negotiations in the US and Europe are attempting to balance austerity, prosperity, and posterity. US exports and imports are showing the strains of sluggish conditions overseas. Our updated economic forecast reflects some "cliff" effects, but not a renewed recession.

2012-10-12 Long/Short Investing: Bon Apptit by Geoffrey Johnson of PIMCO

Long/short equity is a distinct investment approach that seeks to reduce downside risk while still capturing much of the equity markets upside potential. By removing the long-only constraint, long/short managers have an expanded opportunity set with the potential to generate returns and mitigate risk from both long and short investment ideas. Long/short equity strategies have a lower long-term volatility and risk profile than the market as a whole and have captured a good percentage of price movement in up markets and a smaller percentage in down markets.

2012-10-12 The Golub Group Commentary by Team of The Golub Group

High-quality businesses that have the ability to pay and increase their dividends are even more attractive in this low yield environment and the valuations of these businesses are cheap on an historic basis and relative basis to the alternatives.

2012-10-11 Unemployment Surprise or Conspiracy? by Marie Schofield of Columbia Management

The blogosphere is overflowing with conspiracy theories about the household survey unemployment data in this pre-election period. I do not give any credence to these stories and believe the data is the data. But it needs to be interpreted carefully as it can be complex and volatile.

2012-10-11 The New TIPping Point by Jeremie Banet, Rahul Seksaria, Mihir Worah of PIMCO

The Federal Reserve's QE3 program combined with more aggressive communication are likely to have implications for Treasury Inflation Protected Securities (TIPS).

2012-10-11 Macro View: China in Transition by Scott Minerd of Guggenheim Partners

With nominal growth rates falling faster than expected, the possibility of a hard landing for China country's economy appear to be increasing. More importantly, however, there is more to this situation than is immediately observable.

2012-10-11 Alternative Investments Offer Strategies to Avoid Fed-Inflated Bond Bubble by Team of Emerald Asset Advisors

Over the past several years, investors have shifted hundreds of billions of dollars out of stocks and into investment grade corporate bonds and U.S. Treasuries. To date, this strategy has delivered solid results for many investors, as bond prices have generally continued to rally while bond yields have continued to fall.

2012-10-10 Return to Bretton Woods by Scott Minerd of Guggenheim Partners

The gold-convertible U.S. dollar became the global reserve currency under the Bretton Woods monetary system, which lasted from 1944-1971. This arrangement ended because foreign central banks accumulated unsustainably large reserves of U.S. Treasuries, threatening price stability and the purchasing power of the dollar. Today, central banks are once again stockpiling massive Treasury reserves in an attempt to manage their currency values and gain advantages in export markets. We have, effectively, returned to Bretton Woods.

2012-10-10 Beyond the Fiscal Cliff: the Dollar At Risk? by Alex Merk of Merk Funds

Looking beyond the fiscal cliff, we are afraid the greenback may be at risk no matter who wins the election. We examine the risk to the U.S. dollar in the context of the likely policies pursued under either an Obama or Romney administration.

2012-10-10 Collapse in UK Investment Income Is Cause for Concern by Darren Williams of AllianceBernstein

A collapse in direct investment income was the main factor behind the UK's record second-quarter current account deficit. It's too early to know whether this represents a permanent shift. But, if it does, it would make rebalancing the economy more difficult and have important implications for the pound.

2012-10-10 Will South Africas Struggles Overshadow its Potential? by Mark Mobius of Franklin Templeton Investments

Africa is a continent many investors bypass, but from my perspective as a long-term investor, I think that's a mistake. South Africa has faced some struggles recently, but I think they can be overcome, and a brighter future could be ahead there for its people. South Africa is the largest economy in Africa, and is the only country on the continent where I think the "frontier" market label doesn't apply. Some have added an "S" to the end of the "BRIC" acronym to include South Africa in the grouping of emerging market economies of Brazil, Russia, India and China.

2012-10-10 The September Employment Report by Scott Brown of Raymond James

Nonfarm payrolls rose about as expected last month. However, figures for July and August were revised significantly higher. The unemployment rate fell sharply and unexpectedly, but one should take that with a grain of salt considering the seasonal adjustment issues (the start of the school year). Sifting through the details, the report suggests more of the same. Job gains have been roughly consistent with the pace of population growth. However, we're still not making up much of the ground that was lost during the economic downturn.

2012-10-10 Pacific Basin Market Overview by Team of Nomura Asset Management

Regional equity markets remained largely directionless and volatile during the third quarter amid the summer trading lull. Government policy action towards the end of the quarter triggered the biggest market moves. However, the euphoria was short lived following the announcements of the European Central Bank's Outright Monetary Transactions and the Federal Reserve Board's third round of quantitative easing.

2012-10-10 And That's the Week That Was by Ron Brounes of Brounes & Associates

Don't bury Candidate Romney quite yet. The man looks to be in come-back mode and he has some experience in this area. Remember when Republicans preferred anyone but Mitt (Perry, Bachmann, Cain, Gingrich, Santorum) and yet he emerged victorious from the primary season.

2012-10-10 And That's the Quarter That Was by Ron Brounes of Brounes & Associates

The "quarter of Bernanke" left investors optimistic over the past three months despite the ongoing concerns at home and abroad (and a critical election).

2012-10-10 Third Quarter Surge Caps 12-Month Relentless Risk Rally by Douglas Cote of ING Investment Management

Despite the rally of the past year, equity markets still look cheap. Weakening manufacturing data suggest the 12-quarter streak of positive earnings growth may come to an end in the third quarter. Housing has turned the corner, providing consumers with cause for confidence. Though fundamentals have wavered a bit, we are constructively bullish on risky assets, as "successful investing demands a choice between prudent risk control and outright risk avoidance".

2012-10-10 Infectious Ideas for a Connected World by Frank Holmes of U.S. Global Investors

With a greater international exchange of ideas, goods, services, and talent today, our world has never been more wired and connected. Globalization has wholly transformed how people across continents absorb information and interact with each other. I believe it also has subtly changed how we think and act as individuals.

2012-10-10 Potential Picks for a Yield-Starved Portfolio by Russ Koesterich of iShares Blog

Yield-hungry investors today are faced with a stark choice: accept lower yield or more risk. Russ K explains why given those options, investment grade bonds may be one of the better bargains.

2012-10-10 Gold Strategy Investor Letter, Q3 2012 by John Hathaway of Tocqueville Asset Management

John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), examines in his latest quarterly letter how "Gold and precious metals stocks rallied sharply in the third quarter." He believes the catalyst for this move was the "resumption of quantitative easing by the Fed and ECB in late August." Mr. Hathaway goes on to say that "The rally suggests that the lengthy correction which began in August of 2011 has been completed, setting the stage for a powerful new leg in the bull market for precious metals and related mining shares."

2012-10-09 Is Gluskin's David Rosenberg Right about Utilities? by Geoff Considine (Article)

They're not the sexiest property on the Monopoly board, but in today's market, there's plenty of evidence mounting that utilities are a great source of income. Indeed, Gluskin Sheff's David Rosenberg made the case for utilities in a recent commentary.

2012-10-09 Dividend Income: Music to Our Ears by ClearBridge Advisors (Article)

The hunger for income among investors is helping put dividends in the spotlight, say Hersh Cohen and Mike Clarfeld of ClearBridge.

2012-10-09 A Q3 Letter to Clients - Insights from a Wall Street Legend by Dan Richards (Article)

Here is a template for a letter to serve as a starting point for advisors looking to send clients an overview of the past 90 days and the outlook for the period ahead. In it, I draw upon investing principles articulated by the legendary Barton Biggs, who passed away earlier this year.

2012-10-09 High-Dividend Yield Strategy under the Microscope by Michael Nairne (Article)

High-dividend yield stocks have become the favorite recommendation of a host of advisors, but an undue focus on income alone obscures the irreducible fact that long-term investment success is based on the total return of a portfolio including both income and capital growth. This raises two questions. How has the total return of a high-dividend yield strategy fared relative to the market? How does its total-return performance compare to the returns of other possible stock-selection strategies?

2012-10-09 The Yin and Yang of 2012 Stock Markets Through September by Ron Surz (Article)

Despite investor concerns about the economy, stock markets delivered substantial returns in the year-to-date, with the S&P 500 returning more than 16% and Europe, Australasia, Far East (the EAFE index) delivering more than 10%. This growth has been in the face of investor withdrawals from equity mutual funds. So if mutual fund investors are selling, who is buying?

2012-10-09 A Small Business Complex by Chris Maxey, Ryan Davis of Fortigent

Despite the release of the September labor report on Friday, small business owners seemed to take the biggest proportion of the spotlight last week. According to the Huffington Post, Romney and Obama mentioned the phrase "small business" a total of 29 times throughout the Presidential debate. The issues and importance placed on small business are unlikely to be as cut and dry as both candidates made them seem.

2012-10-09 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks advanced last week as the impact of the Fed's monetary easing combined with some better economic data persuaded traders to continue to buy.

2012-10-09 Expect Economic Sluggishness to Persist by Bob Doll of BlackRock Investment Management

Although the economy does seem to have improved a bit in recent months compared to where it was in the second quarter, growth levels in both the United States and around the world will likely remain subpar at least through the middle of next year. The base case for the United States appears to be the economy continuing to grow at around 2% (perhaps a notch higher) over the course of 2013. This growth level would be contingent on avoiding the full force of the fiscal cliff and would be underpinned by a recovery in housing and a pickup in capital spending levels.

2012-10-09 This Fortress built by Nature for Herself by Dennis Gibb of Sweetwater Investments

It has been some time since I have taken keyboard in hand in any attempt to inform anyone of my thoughts on the world of investing. I am taking the time to write now because we are embarked on some events that are, in my humble opinion, truly historic. As these events play out the United States may not be a fortress built by nature for herself. So hang on this could get rough and as usual it will be opinionated with a different perspective.

2012-10-09 Median Household Income Growth: Deflating the American Dream by Doug Short of Advisor Perspectives (dshort.com)

What is the single best indicator of the American Dream? Many would point to household income growth. My study of the Census Bureau's data shows a 600.7% growth in median household incomes from 1967 through 2011. The ride has been bumpy, but it equates to a 4.5% annualized growth rate. Sounds impressive, but if you adjust for inflation using the Census Bureau's method, that nominal 600.7% total growth shrinks to 19.0%, a "real" annualized growth rate of 0.4%.

2012-10-09 High Yield and Equities Mind the (Equity) Gap by Hozef Arif of PIMCO

High yield bonds returned 12% through September, even as corporate defaults continued to rise, albeit gradually. While the default rate is an important market metric, it has been a lagging indicator of high yield bond total return performance. Investors should closely monitor equity markets for signals on where high yield spreads may go.

2012-10-08 House Prices on the Rise by Dmitri Rabin of Loomis Sayles

After four years of consecutive declines, US housing prices appear to be stabilizingand even beginning to rise. While we expect the recovery to be slow and geographically uneven, we do believe that US house prices bottomed in the first quarter of 2012 and could grow approximately 2-3% per year through 2015. In our view, these slow increases in house prices will gradually help consumers repair their balance sheets and increase demand for housing, supporting homebuilders and other housing-related industries.

2012-10-08 Number Five by John Hussman of Hussman Funds

Examine the points in history that the Shiller P/E has been above 18, the S&P 500 has been within 2% of a 4-year high, 60% above a 4-year low, and more than 8% above its 52-week average, advisory bulls have exceeded 45%, with bears less than 27%, and the 10-year Treasury yield has been above its level of 20-weeks prior. While there are numerous similar ways to define an "overvalued, overbought, overbullish, rising-yields" syndrome, there are five small clusters of this one in the post-war record.

2012-10-08 China: Towering Ambitions by Team of Thomas White International

The proposed Sky City will have schools, hospitals, homes, stores, and offices.

2012-10-08 The Great Debate by John Petrides of Advisors Capital Management

The first of three presidential debates kicked off last week with each candidate portraying the core fundamentals of their respective party, neither of which backed down from their beliefs. As the candidates continue to jockey for sound bites, a debate among investors continues to rage: What will happen to the market after the election?

2012-10-08 Maybe the Wind Isn\'t Blowing.. by Michael Kayes of Willingdon Wealth Management

I begin this edition of Willingdon Views with a tribute to a great American, Neil Armstrong, who passed away last month at the age of 82. The first man to walk on the moon was from Wapakoneta, a small town in west-central Ohio. Despite his fame and extraordinary accomplishments, Armstrong maintained his small-town values throughout his life. In a statement released shortly after his death his family referred to him as "a reluctant hero who always believed he was just doing his job." Makes one wonder what they'll say about us after we're gone...

2012-10-08 Pliable Statistics by John Buckingham of AFAM

As Mark Twain once said, Facts are stubborn, but statistics are more pliable. More examples emerged last week in support of that center box quotation from this months edition of The Prudent Speculator. Indeed, Fridays monthly jobs report provided plenty of fodder for both the Obama & Romney election campaigns as the former was able to trumpet the eyebrow-raising dip in the unemployment rate to 7.8% (calculated from a survey of 60,000 individual households) while the latter could point to the less-than-stellar creation of only 114,000 jobs during September.

2012-10-08 Easing Labor Pains for Europe? by Milton Ezrati of Lord Abbett

The Continent sees the first stirrings of needed job-market reforms.

2012-10-08 Key Economic Metrics Strengthen Ahead of 3Q Earnings by Matt Rubin of Neuberger Berman

ISM Manufacturing Index expands for first time in 4 months. U.S. payrolls add 114,000; unemployment rate declines to 7.8%. Alcoa kicks off 3Q earnings season on Tuesday.

2012-10-08 The Unemployment Surprise by John Mauldin of Millennium Wave Advisors

The unemployment number surprisingly dropped to 7.8% last Friday, and the shoot-from-the-hip crowd came out in force. To say that the jobs report was met with skepticism would be a serious understatement. The response that got the most immediate airplay was ex-GE CEO Jack Welch (who knows a few things about making a number say what you want it to say) tweeting, "Unbelievable job numbers ... these Chicago guys will do anything ... can't debate so change numbers."

2012-10-08 3Q Financial Markets Review and Outlook by Team of Managers Investment Group

The summer months were dominated by the anticipation of a Federal Reserve (the Fed) action in the form of another round of quantitative easing in response to muted economic growth and a sluggish domestic job market. Investors' expectations were met when the Fed announced their third round of quantitative easing (QE3) in September with a promise of increased purchases of agency mortgage-backed securities and an extension of the promise to keep short-term interest rates at "exceptionally low levels" until mid-2015.

2012-10-08 Strong Employment But Still Lots of Slack by Christian Thwaites of Sentinel Investments

The ECB's dearth of tools came through loud and clear last week. Rates remained unchanged not because the economies have a ghost of a chance of recovery but because inflation, at 2.7%, scored well above the 2% target. There's a certain amount of in-built inflation in European economies not present in the US, for example, indexing across many industries and pensions, VAT and euro denominated commodity costs. The combination of higher oil costs and a weaker euro put some of the YOY increases in energy costs as high as 40%.

2012-10-05 How an Obama Win Would Impact the Market by Joanna Shatney of Schroders

As the battle for the US presidency continues, Joanna Shatney, Head of US Large Cap Equities at Schroders, discusses the impact on the market if Obama wins or loses the election.

2012-10-05 Market Performance and the Party in Power: Is There Really a Connection? by Team of Janus Capital Group

The relationship between domestic securities market returns and U.S. Presidential elections is a favored topic of Wall Street commentators. As the 2012 Presidential election heads toward the tape, the pundits are in full swing once again, and claims about the impact of a Democratic or Republican victory on U.S. stock and bond markets pop up almost as frequently as political ads. In this paper, we address the question, Should investors take these prognostications to heart and, more importantly, apply them to their asset allocations?

2012-10-05 Economic Recovery and Debt Reduction: Faster, Please! by Chris Molumphy of Franklin Templeton Investments

It's tough to be patient in an age of instantaneous communications and instant gratification. We all want immediate answers to our questions and quick fixes to our problems. When it comes to real world tangles like the global economy, though, Chris Molumphy, CIO of Franklin Templeton Fixed Income Group, reminds us that patience, not a magic pill, is the order of the day when it comes to European and U.S. struggles to cure their economic ailments. He's realistic about these problemsbut isn't waiting to act where he does spot investment opportunities.

2012-10-05 High-Yield Buys: There Is a Lot of Value In This Market: Part 3 by Chuck Carnevale of F.A.S.T. Graphs

In this part 3, we turn our attention to the highest yielding stocks that are constituents on the S&P 500. However, we submit that there are essentially two primary reasons that explain why these stocks offer such high yields.

2012-10-05 Election Preview by Investment Strategy Group of Neuberger Berman

Our Investment Strategy Group sizes up the approaching U.S. election and its potential impact on the "fiscal cliff."

2012-10-05 ECRI Weekly Leading Indicators: Mixed Signals in Latest Data by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) slipped fractionally after eight consecutive weeks of growth. It is now at 126.3, down from last week's 126.6 (revised from 126.7). See the WLI chart below. However, the WLI growth indicator (WLIg) now marks its seventh week in expansion territory at 4.7, up from last week's 3.8. WLIg has now posted fourteen consecutive weeks of improvement and is at its highest level since June 3, 2011.

2012-10-05 When Do You Ignore Your Gut? by Team of Franklin Templeton Investments

Anyone who took an introductory psychology class probably remembers the classic study in which different people witnessing the same crime each report a different take on what happened. Though each presumably sane, sober person witnessed the events with his or her own two eyes, individual expectations and biases influenced how they perceived what happened. Sure, you say, but what does this have to do with investing? Well, it turns out that our individual expectations and biases influence how we view investments, too.

2012-10-05 Market Respite by Richard Michaud of New Frontier Advisors

In a period of looming macroeconomic risks and great investor uncertainty the quarter resulted in solid gains in most global equity markets. The Dow was up 4.3%, the S&P 500 5.8% and the NASDAQ 6.2% for the quarter. Year-to-date the Dow was up 10%, the S&P 14.5% and the NASDAQ 19.6%. The news internationally was encouraging though mixed with European indices up 8% for the quarter and 11.8% for the year while Pacific indices were up 2% for the quarter and 7.4% for the year.

2012-10-05 Union Pacific Corp:Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

With this article we are going to examine Union Pacific Corp (UNP) through the lens of FAST Graphs - fundamentals analyzer software tool. Union Pacific Corp is a company that is currently in value. With analysts from Capital IQ forecasting earnings growth to continue at about 15.2%, this may be an opportune time for the prudent dividend and growth investor to look into this fine company further for possible addition to their portfolio.

2012-10-04 Priming the Liquidity Pump by Mark Mobius of Franklin Templeton Investments

The global economy is often like a line of dominos. One piece tumbles, causing others to fall too. This year, weak economic growth and heavy debt burdens in many developed markets had a domino effect on emerging economies, and many investors lost confidence in both. In response, central banks have taken actions to boost economic growth and prime the liquidity pump.

2012-10-04 Median Household Incomes: The Grim Reality by Doug Short of Advisor Perspectives (dshort.com)

Last month I posted a pair of commentaries on median household incomes based on latest annual data released by the Census Bureau. The first looked at the distribution of household incomes by quintile and the top 5 percent. The second examined median household incomes by age bracket. More recently Sentier Research, an organization that focuses on income and demographics, published a fascinating report on median household incomes. The data in their report differs from the Census Bureau's data in three key respects.

2012-10-04 When Career Risk Reigns by Neils Jensen of Absolute Return Partners

In this month's Absolute Return Letter we pick up the baton from last month. How does the current crisis actually affect financial markets? How do you overcome the low returns? What can you do to protect the downside risk in a high correlation environment? We argue that career concerns often lead to irrational decisions by professional money managers and that this provides opportunities for those who can afford to deviate from the norm.

2012-10-04 Nothing's Perfect by Jerry Wagner of Flexible Plan Investments

On September 21, the Apple iPhone 5 made its debut simultaneously on four continents. Its first weekend saw over five million in sales! And the current inventory was sold out within a week a perfect product introduction. Wellnot quite. Soon articles like iPhone 5′s Biggest Problems started showing up, talking about scratching, chipped exteriors, lens flares and others. Then there were complaints about its faulty Maps application that even drew a rare corporate apology last week. It just proves the point of this weeks Hotline: Nothings Perfect.

2012-10-04 Market Dimensions by James Damschroder of Gravity Capital Partners

An interesting and perhaps volatile fourth quarter is upon us. We have elections and the fiscal cliff straight ahead. Markets dislike uncertainly, making asset prices potentially marginally lower.

2012-10-03 Understanding How "Debt Deleveraging" Works by Gary Halbert of Halbert Wealth Management

For many years, I have warned that our massive explosion in federal debt (up 50% just since Obama took office) would one day stifle economic growth. Obviously economic growth is currently stifled, what with the weakest post-recession recovery in decades. But the question remains as to whether our massive national debt and trillion-dollar budget deficits are the main reason for the disappointing recovery.

2012-10-03 The Fed Plays All Its Cards by Peter Schiff of Euro Pacific Capital

There never really could be much doubt that the current experiment in competitive global currency debasement would end in anything less than a total war. There was always a chance that one or more of the principal players would snap out of it, change course and save their citizenry from a never ending cycle of devaluation. But developments since September 13, when the U.S. Federal Reserve finally laid all its cards on the table and went "all in" on permanent quantitative easing, indicate that the brainwashing is widely established and will be difficult to break.

2012-10-03 Stocks Are Taking a Breather from the Rally by Bob Doll of BlackRock Investment Management

To at least some extent, the pause in the rally we have seen over the past couple of weeks can be attributed to some profit-taking on the heels of a significant multi-month uptrend (US stocks rose close to 6% in the third quarter). It is also likely, however, that investors are coming to grips with the fact that the world continues to face some serious risks and are recognizing that not all of the world's problems can be solved by central bank action.

2012-10-03 Where are the Global Winners? by Louie Nguyen of Soledad Investment Management

In today's ber-dreary and volatile global market condition, it can be difficult to imagine how the various markets around the world will eventually right themselves. It is worth noting, however, that the global market has righted itself before, from predicaments that seem just as, if not even more, dire than what we face today. Think Thailand and Korea in 1997, Mexico in 1994 and the Dot-Com Bubble in 2000. The following is the latest in our annual Global Price to Earning (P/E) analysis. It is part of our on-going effort to find compelling investments from around the world.

2012-10-03 Don't Bring Me Down: Not Swayed by Pessimism at BCA Conference by Liz Ann Sonders of Charles Schwab

We present highlights, key takeaways and perspective on the recent BCA Research Investment Conference. The eurozone crisis and China's slowdown remain risks, but are somewhat offset by optimism about US markets. Politics will remain a force underpinning uncertainty and volatility.

2012-10-03 A Funny Thing Happened On The Way To Economic Armageddon by Scott Colyer of Advisors Asset Management

After the recent announcement by the U.S. Federal Reserve (Fed) that they would begin to engage in what has been deemed "QE3," there has been a lot of skepticism that such a plan could actually work. The Fed is attempting to carry out their dual mandate of price stability and full employment by engaging in a new round of asset purchasing targeted at the mortgage market.

2012-10-02 Confronting the Unemployment Crisis by Robert Huebscher (Article)

Policymakers seeking a path to economic recovery must first answer one crucial question: Is our persistently high unemployment structural or cyclical? If it's cyclical, then monetary and fiscal measures designed to boost consumer spending will restore the US to full employment in due course. But if we face a structural problem, then quick fixes won't work until we correct deeper imbalances that have left 12.5 million Americans without jobs.

2012-10-02 Woody Brock on Why to Own Stocks Now by Robert Huebscher (Article)

Dr. Horace 'Woody' Brock is the founder Strategic Economic Decisions and the author of American Gridlock. In a recent talk, he explained why investors should own stocks - particularly those with stable dividends - and why bonds are very risky in today's environment. This is the transcript; a video of this talk is also available.

2012-10-02 When Centers-of-Influence Don’t Refer Clients by Beverly Flaxington (Article)

Everyone tells me I can sell more through relationships with attorneys and accountants. I have some that I know well. I refer to them, but they don't reciprocate. What am I doing wrong?

2012-10-02 Understanding Portfolio Variances vs. the Market by Joni Clark of Loring Ward

Some investors with a keen eye on the markets have asked why their diversified portfolios did not perform in line with the more widely covered industry benchmarks, such as the S&P 500 Index. If your investment portfolio is broadly diversified in the global equity markets with an emphasis on small and value stocks, performance results will likely vary from equity-tracked benchmarks.

2012-10-02 Lessons from Scandinavia by Kaisa Stucke, Bill OGrady of Confluence Investment Management

During the late 1980s and early 1990s, Scandinavian nations suffered through balance sheet recessions. Commentators have suggested that U.S. policymakers could use the Scandinavian response to their crises as a roadmap for resolving the current U.S. situation. As part of our own analysis, we have studied several earlier events to understand the underlying similarities and differences to develop insights into the current event.

2012-10-02 Pottersville by Tony Crescenzi of PIMCO

The excessive use of debt fueled by money printing was the pathway to the global debt crisis. Fed Chairman Ben Bernanke, an expert on the Great Depression, understands the ravages of debt deflation and his every action has been to prevent it from occurring. Greater care must be taken in the future to ensure that our fiat based, fractional reserve system does not run amok. This is why regulators are demanding that banks raise capital, reduce their proprietary trading activities, and shift their business models closer to a utility-style model.

2012-10-02 Damages by Bill Gross of PIMCO

How could the U.S. not be the first destination of global capital in search of safe (although historically low) prospective returns? Studies by the CBO, IMF and BIS (when averaged) suggest that we need to cut spending or raise taxes by 11% of GDP and rather quickly over the next five to 10 years. Unless we begin to close this gap, then the inevitable result will be that our debt/GDP ratio will continue to rise, the Fed would print money to pay for the deficiency, inflation would follow, and the dollar would inevitably decline.

2012-10-02 The 2010, 2011, 2012 Corrections Were P/E Multiple Related; Earnings Were Sound by George Bijak of GB Capital

We had nasty stock market corrections in the middle of 2010, 2011 and 2012 caused by political uncertainty about Europe's debt. In times of market declines it is good to remind ourselves the difference between a correction and a bear market.

2012-10-02 Are Markets Ready for a Correction? by Chris Maxey, Ryan Davis of Fortigent

Entering the final quarter of 2012, many investors may find themselves apprehensive about the outlook for markets and the broader economy. While the pace of economic disappointment appears to have slowed down and actually reversed according to the Citigroup Economic Surprise Index actual data levels continue to suggest an anemic economic state.

2012-10-02 The Risk in Safety by Greg Nejmeh of HS Management Partners

The "risk on/risk off" sound bite is routinely applied by financial commentators when attempting to explain inexplicable market fluctuations. As the pendulum oscillates between greed (risk on) and fear (risk off), the fulcrum the pivot point where the scale rests in perfect balance can best be characterized as safety. It is from that state of equilibrium that the market begins each trading day...

2012-10-02 QE and the Equity Market: Is the Fed Driving or Along For the Ride? by Patrick Lawler of PIMCO

Federal Reserve officials have said several times that among other benefits, its quantitative easing (QE) programs have helped boost U.S. equity prices. Based on our analysis, QE has not been the driving force behind rising equity prices in recent years. How does the Federal Reserve measure the success of its asset purchase programs, or quantitative easing (QE), since the 2008 financial crisis QE1, QE2, Operation Twist (OT) and QE3?

2012-10-01 Leap of Faith by John Hussman of Hussman Funds

Both the economy and the financial markets will do fine in the longer-term, but to imagine that there will not first be major challenges and disruptions is a leap of faith and a leap over a century of economic and financial history that screams otherwise.

2012-10-01 Macro Malpractice by Stephen Roach of Project Syndicate

As the global economy has gone from crisis to crisis in recent years, the cure has become part of the disease. In an era of zero interest rates and quantitative easing, untested medicine is being used to treat the wrong ailment, and the patients over-leveraged consumers have been forgotten.

2012-10-01 U.S. Economy Prints 32-month Low: Recession Risks Escalate by Dwaine van Vuuren of RecessionALERT.com

It's been 4 months since the 3rd "Summer Swoon" in this expansion when many commentators were trotting out recession scares and imminent collapses in the stock market. Since then the SP-500 has risen over 9%, peaking at 12% gains some weeks back. There is now an interesting divergence developing between the leading data (stock market, money supply, credit spreads etc.) that is implying positive expansion ahead and the co-incident data that is implying a drift toward possible recession.

2012-10-01 Gaming US Fiscal Reform by Mohamed El-Erian of Project Syndicate

The need to address America's fiscal situation has just been magnified by a warning from Moody's that the US could lose its top credit rating if Congress fails to make progress on medium-term fiscal reforms. But why didn't the imposition of a "fiscal cliff" in 2011 succeed in focusing US politicians' minds?

2012-10-01 Chile: Lithium Adds More Energy to Export Growth by Team of Thomas White International

The world's largest producer and exporter of lithium has added another lucrative segment to its commodity fortunes.

2012-10-01 Understanding the Equity Market's Valuation by Charles Lieberman of Advisors Capital Management

An excellent interview with a highly regarded value investor Bill Nygren in the latest issue of Barron's provides a good review of the math that demonstrates objectively that stocks remain cheap. At current valuations, stocks are sufficiently cheap that companies can use free cash flow to buy back shares at a pace sufficient to grow earnings per share by about 10% annually, consistent with the market's long-term historical record and dramatically above the 4% growth suggested by bond manager Bill Gross.

2012-10-01 More Pieces of the Puzzle by Scott Brown of Raymond James

Recent economic data have been mixed. Consumer attitude measures have improved, but manufacturing figures have softened. On balance, the numbers are consistent with more of the same: a positive, but lackluster-to-moderate pace of growth.

2012-10-01 Recession Risk Rising by Brian Wesbury, Bob Stein, Strider Elass of First Trust Advisors

Economic forecasting was relatively easy from the end of World War II until the middle of the prior decade. Most of the time, you could just focus on monetary policy. But then came the last recession, which had nothing to do with the Fed being too tight. Instead, falling home prices and mark-to-market rules rendered some major banks under- capitalized. A pure financial panic ensued, the likes of which we had not seen for 100 years. But what if this was not a one-time event?

2012-10-01 And That's the Week That Was by Ron Brounes of Brounes & Associates

Bad news from Spain (no good news, no bad news.) Investors spent the week trying to make heads or tails about the headlines out of Europe, while analyzing the news from a suddenly resurging housing sector and a suddenly ailing manufacturing sector. For the most part, however, many were booking profits from a successful third quarter, while reallocating positions for the final stretch of the year. (Surely the Prez election and the "fiscal cliff" must enter into their decision-making moving forward).

2012-10-01 Moral Hazard. by Scotty George of du Pasquier Asset Management

Overall, equity market risk is dissipating. There appears to be a stronger momentum ameliorating a global tapestry of "ills." What may have been a domino effect when the credit crisis began has stopped short of a cataclysm and turned closer to equilibrium. As a result, equities might be poised to perform. The question is when?

2012-10-01 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks finally fell back last week. Weak economic data combined with concerns over Apple's new phone release hurt investor confidence.

2012-10-01 Typical Post-QE by Christian Thwaites of Sentinel Investments

We have typical post-QE market behavior. GTs sold off, then rallied. Equities rose, then flattened. The dollar sold off then strengthened. Gold crept up. Other commodities rose, yawned and gave up most of their gains. Earlier QEs took several months for this to play out. It now all happens in quick time.

2012-10-01 If Its All About Macro These Days, Why Havent EM Stocks Done Well? by Morgan Harting of AllianceBernstein

It doesn't seem to make sense. Superior macroeconomic fundamentals in emerging countries have not led to stronger-or even positive-equity returns over the last two years. Since the beginning of 2011, the unhedged return in US dollars of the MSCI Emerging Markets (EM) Index has been (10)%, while the MSCI World Index has delivered 6.5%. What's going on?

2012-10-01 Dont Be Fooled By September's Market Rally by Russ Koesterich of iShares Blog

September has historically been the worst month of the year, but this time around it did not play to script. The surprising rally distracted complacent investors from signs of increasing volatility. Russ K explains.

2012-09-29 Uncertainty and Risk in the Suicide Pool by John Mauldin of Millennium Wave

Investors in the stock market, especially professionals, are obsessed with risk, your humble analyst included. We try to measure risk in any number of ways, looking for an edge to improve our returns. Not only do we try to determine probable outcomes, we also look for the 'fat tail' events, those things that can happen which are low in probability but will have a large impact on our returns.

2012-09-28 Falling Off the Fiscal Cliff? by Libby Cantrill, Josh Thimons of PIMCO

When we look at how the fiscal debate is likely to play out, rather than how it should play out, our base case is the fiscal cliff will likely be resolved in a short-term deal before the end of the year, making what was a cliff more like fiscal black diamond still dangerous, but not likely to land the economy in a body cast.

2012-09-28 The Danger of Safety by Owen Murray of Horizon Advisors

Investors have become cautious and anxious following the bear market of the past twelve years and the recent bouts of extreme volatility. We examine risks and opportunities in light of the difficult market environment in our special report The Danger of Safety."

2012-09-28 The American Industrial Renaissance by Richard Bernstein of Richard Bernstein Advisors

The "American Industrial Renaissance" remains one of our favorite investment themes. We prefer to implement this theme through small US-centric industrial companies and small financial institutions that lend to public and private industrial firms. It is unlikely that the United States will again be the manufacturing powerhouse that it was during the 1950s and 1960s, but many factors are suggesting that the US industrial sector will gain market share over the coming decade.

2012-09-28 The Big Four Economic Indicators: Updated Real Personal Income Less Transfer Payments by Doug Short of Advisor Perspectives (dshort.com)

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method. There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process.

2012-09-28 ECRI Weekly Leading Index Growth at Highest Level Since June 2011 by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose for the eighth consecutive week, now at 126.7, up from last week's 125.3 (revised from 124.7). See the WLI chart below. The WLI growth indicator (WLIg) now marks its sixth week in expansion territory at 3.8 (up from last week's 2.7). It has now posted thirteen consecutive weeks of improvement and is at its highest level since June 10, 2011.

2012-09-28 Growth Stocks: There is a Lot of Value in this Market Part 2 by Chuck Carnevale of F.A.S.T. Graphs

In part one of this series we introduced the notion that in all markets whether bear or bull, there will always exist individual stocks that are fairly valued, overvalued or undervalued. In this same vein we argued that it's a market of stocks, not a stock market. To put this into context, we are simply suggesting that the discerning investor can always find bargains if they are willing to look and do their homework. However, we should also add that bargains can come from many different types of equities.

2012-09-28 Schwab Market Perspective: Disrespected RallyCan It Continue? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

US equities are trading near five-year highs but numerous measures show investors remain skeptical. The enthusiasm following the Fed's announcement of more quantitative easing was short-lived, although the summer rally in stocks could be at least partially attributed to anticipation of more stimulus. The enthusiasm following the Fed's announcement of more quantitative easing was short-lived, although the summer rally in stocks could be at least partially attributed to anticipation of more stimulus.

2012-09-28 No Free Lunch? The Real Impact of Lower Rates in Brazil by Maria (Masha) Gordon, Richard Flax of PIMCO

The Brazilian government wants to keep interest rates low but also guard against inflation; so the authorities have moved down a path of "macro-prudential" measures, with a broad range of implications for equity investors. In reality, as the cost of capital in Brazil falls, the returns and cash flows from regulated businesses are coming under pressure. In this environment, we find that consumer businesses are the most appealing, especially if growth accelerates.

2012-09-28 Look Out Below! The Fiscal Cliff Steepens by Russ Koesterich of iShares Blog

Despite the recent happy headlines, most measures of US economic activity point to slower growth, which makes the threat of the fiscal cliff pushing the US economy into a recession even greater. Russ K explains how investors can prepare.

2012-09-28 Commodity Stocks: Improving Returns With No Extra Volatility by Frank Holmes of U.S. Global Investors

Not every investment is the same. Even within the commodities space, when looking at measures such as correlation, performance and risk, two indexes can have very different effects on a portfolios results.

2012-09-27 Gold Stocks or Apple: Which Holds a Place in Your Portfolio? by Frank Holmes of U.S. Global Investors

In a battle between the largest gold exchange traded fund and the biggest tech stock, which investment would get your vote? Would you choose gold because of the macroeconomic factors supporting the rise of the precious metal? Or do you put your money on Apple because of its overwhelming popularity?

2012-09-27 Reconnaissance: Strategy Notes by Douglas Clark Johnson of Codexa Capital

The investment outlook for large swaths of the Islamic world may actually strengthen, because of or in spite of, events of recent weeks. Stock-price buoyancy on the Egyptian and Karachi exchanges, amid continuing public outrage, may presage coming improvements. Also this week, we take a look at Turkey, given the exceptional gains seen on the Istanbul Stock Exchange.

2012-09-27 Growing Pains in the BRICs by Investment Strategy Group of Neuberger Berman

The "BRIC" countries have been a focal point of investor interest since the early 2000s. Brazil, Russia, India and China account for about half of the world's population, boast vast natural resources and are among the fastest-growing economies in the world. That said, progress at times has been uneven. Since 2010, the MSCI BRIC Index has largely underperformed the S&P 500 as economic growth flagged. In this edition of Strategic Spotlight, we discuss current conditions and the outlook for these markets.

2012-09-27 Its the (REAL, not the financial) economy, stupid! by Kane Cotton of Bellatore Financial, Inc.

The Fed is relying on the wealth effect. It can't directly bring down unemployment (i.e., part of the "real" economy), so it is focusing on the areas that it can affect, the financial economy and asset prices. Since both PCE and Core CPI inflation measures have been fairly low and are unlikely to become uncomfortably high in the near term due to the slack labor market, low capacity utilization and stagnant incomes, the Fed is again taking aim at asset prices.

2012-09-27 How Can Balanced Investors Mitigate Their Equity Risk? by Daniel Loewy of AllianceBernstein

Over the past three decades, bonds have provided balanced investors with the best of both worlds. As 10-year Treasury yields fell from a high of 13.7% in 1980 to less than 2% today, bonds provided both strong returns and a great cushion in times when equities were weak. Bonds are still important, but investors shouldn't expect more of the same.

2012-09-27 PIMCO'S Cyclical Outlook for Asia: Structural Slowdown Shaping Near-Term Growth Dynamics by Tomoya Masanao, Robert Mead, Ramin Toloui of PIMCO

Rather than a hard landing for China, we foresee a structural downshift that could be called a "New Normal with Chinese characteristics." Australia has considerable scope for additional rate cuts and more expansionary fiscal policy to address regional weaknesses. The Japanese economy will be affected by weak economic growth in China, which will add more pressure for the Bank of Japan to respond.

2012-09-27 Dividend Yield vs. Dividend Growth by Ashvin Viswanathan of O'Shaughnessy Asset Management

Investor demand for high-yielding companies has grown even stronger because of the perception that these companies are more defensive and recent news that the Federal Open Market Committee (FOMC) has extended its forecast of low rates until 2015. We believe buying a portfolio of high-quality, global, market-leading companies with superior valuations and high dividend yields provides investors with an excellent opportunity to consistently beat the market, while providing high income relative to fixed income securities in the current environment.

2012-09-27 Going Private in China by Henry Zhang of Matthews Asia

Over the last three decades, China's embrace of capitalism has benefited its socialist society. The country's foundation for capitalism has been based on private ownership, as it has been in other capitalist economies. For China, this privatization occurred in two stages: the first being the privatization of agriculture in rural areas as the government implemented a "household responsibility system" to align the economic interests of farmers directly with the output of their own plots of land.

2012-09-26 The Predictive Power of Dividends by Bill Smead of Smead Capital Management

In an article published by Marketwatch.com on September 21, 2012, Mark Hulbert asks the question, "Where do you think the stock market will be ten years from now?" It was as a lead into the results of a predictive model from Rob Arnott, founder of Research Affiliates. His model argues that current dividend yields go a long way to predicting ten-year forward returns. Other than a big glitch in the 1990's, it appears to have some value.

2012-09-26 Is China Becoming Less Competitive? by Dara White of Columbia Management

Concerns about the pace of economic growth in China and the imminent change in leadership have continued to escalate. At the beginning of the year, we highlighted the potential for the rate of economic growth to slow significantly. I recently visited Asia to get a clearer perspective on the situation in China specifically, and Asia generally.

2012-09-26 Will Solar Ever Reach "Grid Parity"? by Catherine Wood of AllianceBernstein

The coming of grid parity keeps receding into the distance like a desert mirage. Over the last six years, executives at solar energy firms and their consultants have projected repeatedly that solar energy will reach grid paritybecome cost competitive with other power sourcesin three to five yearsonly to push its expected time of arrival further into the future. My colleague Brett Winton explains why.

2012-09-26 Are BRICs Hitting a Growth Wall? by Mark Mobius of Franklin Templeton Investments

A global pattern of easing economic growth in the first half of 2012 has impacted the "BRIC" nations Brazil, Russia, India and China. However, I don't think the BRIC economies have hit a brick wall. While some market participants have been waiting impatiently for governments to undertake further stimulus measures, others have wondered whether something more fundamentaland less within governmental controlmight be at work.

2012-09-25 Jim Bianco – Markets Will Benefit From Disastrous Fed Policy by Robert Huebscher (Article)

The Fed's quantitative easing policy will be 'disastrous,' according to Jim Bianco, but prices for riskier assets will rise over the near term as a result. In remarks last week, Bianco, the head of the Chicago-based economic research firm that bears his name, also gave the US economy a near-failing grade of C-, and warned that inflation will be 'problematic.'

2012-09-25 Investing in a Resource-Constrained World by Richard Vodra, JD, CFP (Article)

The potential consequences of stagnant oil production and climate change for society are written about frequently, but here is a simpler question that is important to our community: How are these and related facts likely to affect investment returns going forward? How can we even frame such questions usefully?

2012-09-25 Value Investing in a Macro-Driven Environment by Robert Huebscher (Article)

The GoodHaven Fund (GOODX) is managed by Larry Pitkowsky and Keith Trauner. For most of the previous decade, Larry and Keith held research, portfolio management, and executive positions with the Fairholme Fund. I spoke with them last week.

2012-09-25 Stocks Should Overcome Hurdles to Continue the Bull Market by Bob Doll of BlackRock Investment Management

Although global economic data has been relatively weak in recent years, risk asset prices have nonetheless advanced. We would attribute this trend to the fact that weak economic growth does not, by itself, limit the potential for risk assets. In our view, the liquidity-driven reflationary policies of the world's central banks have been a more important factor for asset prices than economic growth levels have been.

2012-09-25 The Ramifications of a Robin Hood Tax by Frank Holmes of U.S. Global Investors

Chief Justice John Marshall, in 1819, once described policymakers' great influence, remarking, "The power to tax involves the power to destroy." With rising fiscal deficits and a desperate need to raise revenue, many nations have come up with various tax solutions to raise billions of dollars. One hotly contested idea in the U.S. and Europe lately, and once advocated by John Maynard Keynes during the Great Depression, is a financial transactions tax imposing a cost on buys and sells of stocks or bonds.

2012-09-25 The Beginning of Fall Blues by Jerry Wagner of Flexible Plan Investments

I only have time for a short note today. It's probably a reflection of the shorter days that fall ushers in or maybe the increased pace of business that the end of summer vacations seems to ignite. Speaking of seasons, the market weakness we saw last week is just what our Political Seasonality Index has been suggesting that the stock market might have in store for us in this period.

2012-09-25 The Future Of Money Market Funds by Gregory Hahn of Winthrop Capital Management

The Financial Crisis of 2008 has left its mark on the capital markets and the economy, and money market mutual funds are one of those areas that were affected. One of the pieces of unfinished business following the financial crisis is improved regulation of money market mutual funds.

2012-09-24 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

These days, the various central bankers keep trying to outdo themselves with new stimulus deals. This week, Bank of Japan followed the Fed leads with an expanded bond buying program. Perhaps the moves will reap dividends and the global economy will surge to higher highs in the not so distant future. (Or perhaps the "easy money" strategies will have little impact long-term and lead to periods of inflation and asset bubbles.) Apple's latest "new new" thing remains in hot demand (but can supplier keep up?).

2012-09-24 Eating the Future by John Hussman of Hussman Funds

Every security on Earth works like this. The higher the price you pay for a given set of expected future cash flows, the lower your prospective future rate of return. Higher prices essentially take from future prospective returns and add to past returns. Conversely, lower prices take from past returns and add to future prospective returns.

2012-09-24 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Certain studies commissioned by the securities industries governing bodies have recently concluded that terrible things happen to people who are too ignorant to know better. It's amazing that your confidence and trust could be so obfuscated as to propose that an economic tailspin was your fault.

2012-09-24 If youre a partisan Republican, skip this commentary by David Edwards of Heron Financial

In June after stocks slumped over concerns about Europe, we wrote "US stocks however, were a good value a month ago and a better value today. With the weak hands forced out by the recent 10% pullback, we are moving forward with investments in stocks." With two and half months remaining in the year, our "buying panic" forecast is starting to look prescient.

2012-09-24 Trade Winds Shifting in America's Favor by Milton Ezrati of Lord Abbett

The improvement in the U.S. trade balance can be traced to the dollar's relative weakness and increasing domestic energy production.

2012-09-24 Some Parting of the Clouds by Charles Lieberman of Advisors Capital Management

The ongoing rally in the equity market and corresponding rise in Treasury yields mirror the slow improvement in financial market conditions in Europe and moderate gains in domestic economic data. This still leaves more progress to be made on both fronts, but uncertainty remains elevated over the fiscal cliff, the threat of military conflict in the Middle East, the upcoming election, and tax policy.

2012-09-24 Are Green Shoots Being Spotted from the Helicopter? by Martin Pring of Pring Turner Capital Group

Ben Bernanke's helicopter has taken off from the tarmac once again. This time the QE3 flight path is headed, as some commentators have suggested, to "infinity and beyond". It seems to be a route whose popularity is growing as more and more central banks are expanding their balance sheets at record rates. So far this cycle inflation has been relatively well contained but that may be about to change, at least in the commodity pits.

2012-09-24 South Korean Entrepreneurs Want Company by Team of Thomas White International

South Koreans, who have traditionally prized secure life-long employment at a chaebol, are increasingly setting out to establish their own companies.

2012-09-24 Clear Progress by Christian Thwaites of Sentinel Investments

Two weeks into a new era of ECB and Fed policy and it is a tie between the gains in equities, with the US and European broad indexes up around 2.2%. But it's the lack of follow-through and opacity of the ECB moves which are perhaps the most disconcerting and so, probably, the more short-lived. While both central banks reported easing in the form of securities purchases they had very different origins and aims.

2012-09-24 Housing Recovery Still Young by Brian Wesbury, Bob Stein of First Trust Advisors

The turnaround in the housing market is perhaps the brightest spot in an otherwise tepid economic recovery. Home sales, home building, and even home prices are all headed up. In the past twelve months, sales of existing homes are up 9% while sales of new homes are up 25%. Housing starts are up 29%. The two most prominent home price measures, Case-Shiller and FHFA, are both up at about a 7% annual rate in the past six months.

2012-09-24 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The stock market was flat on low volume last week. In other words little of consequence happened. Oil prices fell back somewhat after rumors that a release from the Strategic Petroleum Reserve were floated by our government in an attempt to influence the market of yet another asset class. One wonders where the stock market, interest rates and the price of commodities would be if the government both at home and elsewhere was not manipulating prices to the extent they do.

2012-09-24 Alice in Euroland by Giles Conway-Gordon of Cogo Wolf Asset Management

If you have a taste for make-believe, fantasy and unreason the shifts and contortions of the European elite in the face of the Eurozone (EZ) crisis, culminating in the latest plan for the European Central Bank (ECB) to purchase unlimited quantities of the bonds of EZ members in financial difficulties, have left you spoilt for choice over the last few months.

2012-09-24 Energen Corp: Stock Research Analysis by Team of F.A.S.T. Graphs

With this article we are going to examine Energen Corp (EGN) through the lens of FAST Graphs - fundamentals analyzer software tool, which shows us a picture of a company that is currently in value. The prudent investor might want to do their due diligence on this company as a possible addition to their portfolio.

2012-09-24 The Impact of Rising Interest Rates on Fixed Income Investments by Michael Zinkland of Managers Investment Group

In this ManagersInsight, we examine how bonds have historically performed during periods of rising rates and what investors can do to limit the impact of rising rates. We find that all is not lost for investorshistory suggests bonds could perform better than many expect when rates begin to increase.

2012-09-24 Who Deserves Blame (Or Credit) For Current Tax Policy? by Ryan Davis of Fortigent

U.S. Presidential candidate Mitt Romney received sharp criticism this week for his comments regarding the "47% of people who pay no taxes." Regardless of one's political stance, Romney's comments were instructive in highlighting a very real problem. The notion that Republicans or Democrats deserve blame for the current challenges is shortsighted, however, because both parties were contributing members to the current legacy.

2012-09-21 Growth for the Long Run by Jonathan Coleman, Brian Demain, Nick Thompson of Janus Capital Group

"I skate to where the puck is going, not where its been." Wayne Gretzky. Many investors would love to be as successful as The Great One when it comes to their portfolios. Yet investors are often heavily influenced by the past, losing sight of where they need to be going. This seems to be especially true today: mistrust of equities is running high after a decade of disappointing returns and excessive volatility.

2012-09-21 There is a Lot of Value in this Market: Part 1 by Chuck Carnevale of F.A.S.T. Graphs

Whenever there is a rise in stock values as we have experienced over the past year or so, it seems to be human nature to automatically assume that valuations have become too high. However, although it is possible that this is true, it is not necessarily so. A lot has to do with where valuations were before the run-up occurred. For example, if valuations were extremely low, then even after a rise, they can continue to be low or perhaps only have risen to becoming fairly valued.

2012-09-21 Short-term Gratification and Long-term Return by Franois Sicart of Tocqueville Asset Management

Over time, I have tried to learn from my investment experiences. As a result, my style has become influenced less by greed and fear and more by patience and realism. Here are a few of the lessons I have learned and passed along.

2012-09-21 ECRI Weekly Leading Index Growth at Highest Level Since July 2011 by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose for the seventh consecutive week, now at 125.4, up from last week's 124.7 (revised from 124.9). See the WLI chart below. The WLI growth indicator (WLIg) now marks its fifth week in expansion territory at 2.7 (up from last week's 1.9). It has now posted twelve consecutive weeks of improvement and is at its highest level since July 29, 2011.

2012-09-21 Reflections: Define Exigent by John Gilbert of GR-NEAM

The world is relying upon its central banks to work wonders. Having made a mess of their balance sheets, households and governments are faced with the long and unpleasant task of reducing indebtedness. The infinite supply of money in a paper money system is the obvious solution. The question is whether, with very liberal exercise of that privilege, there is some limit to its use.

2012-09-21 The Ramifications of a Robin Hood Tax by Frank Holmes of U.S. Global Investors

Could a transaction tax have unintended consequence for American banks? While the jury is still out on that answer, Hungarys example is a reminder to policymakers to comprehensively consider the rewards of collecting a Robin Hood tax along with the risks. Profits and bank credit growth rates across Hungary plummeted due to the hefty bank levies imposed.

2012-09-21 About That Swiss Neutrality by Russ Koesterich of iShares Blog

Swiss stocks still merit a positive long-term outlook but on a short term basis, Russ is changing his allocation to underweight from neutral.

2012-09-20 QE n+1 What The Fed Is Really Up To by JJ Abodeely of Sitka Pacific Capital Management

As I survey the news stories and other analysis on the Feds recent announcement, most fall short of describing what the Fed is really up to. Here is a hint: it's not really about employment. It's not really about "price stability" or really about growth either.

2012-09-20 The Fed's "X" Factor by Zach Pandl of Columbia Management

The most surprising element in last week's Federal Reserve (Fed) decision was not the announcement of Mortgage Backed Securities (MBS) purchases or the extension of its funds rate guidance to "mid-2015," both of which were signaled fairly clearly in advance. Rather, it was the fact that the aggressive monetary easing occurred alongside an upgrade to the central bank's economic forecasts.

2012-09-19 Global Investment Bulletin by Team of Bedlam Asset Management

If America's Federal Reserve Bank were a battleship, it is losing off every available piece of ordnance. The portfolio has been positioned for such an event. The USS Fed does not know who or where the enemy is, or whether its attack will hit anything for several quarters.

2012-09-19 Fed to Debase Dollar? by Alex Merk of Merk Funds

Is the Fed's goal to debase the U.S. dollar? The Federal Reserve's announcement of a third round of quantitative easing (QE3) might have been the worst kept secret, yet the dollar plunged upon the announcement. Is Bernanke intentionally debasing the dollar?

2012-09-19 Us and Them: Household Sector Deleveraging vs. Public Sector Leveraging by Liz Ann Sonders of Charles Schwab

The eruption of the financial crisis in 2008 unleashed a household deleveraging cycle, triggering unprecedented Fed easing and now QE∞. Next up, government sector deleveraging.

2012-09-19 Power Struggles and Progress in Romania by Mark Mobius of Franklin Templeton Investments

Bordering the Black Sea in Southeastern Europe, Romania offers visitors a variety of beautiful and dramatic landscapes concentrated in a relatively small land area, including modern cities and medieval villages, sweeping mountain vistas, broad plains and sandy beaches. Romania may also be one of the more attractive investment destinations in emerging Europe today, but its political environment has been characterized by some power struggles as dramatic as its scenic views.

2012-09-19 Technology Dividends: Oxymoron No More by Ryan Issakainen of First Trust Advisors

In recent years, equity income ETFs have gained in popularity, as investors seeking growth and income have poured billions of dollars into these strategies. While each of these ETFs takes slightly different approach for selecting and weighting stocks, there is one common characteristic shared by all: an underweight position in the technology sector relative to broad equity benchmarks. While this allocation may seem intuitive to some, we believe it's time to include technology stocks in equity income strategies.

2012-09-19 Farmland: The New Gold? by Randy Bateman of Huntington National Bank

Yes, it's just 'dirt', but life on this planet wouldn't exist as it does today unless it didn't comprise a third of the world's surface. Unfortunately much of that 'dirt' is in areas too wet, dry, rocky, salty, devoid of nutrients, or covered by snow for agricultural production. With only 14 percent of the world's landmass considered fertile, and that shrinking at a significant pace, there's a realization that increased farm production is essential to satisfy the increasing demand for food products.

2012-09-18 The Trend is Your Friend by Keith C. Goddard, CFA (Article)

John Hussman's recent market commentary, The Trend is Your Fickle Friend, highlighted the limitations of trend-following investment strategies that rely on moving-average crossover rules as a primary filter. But an extensive study conducted by our firm demonstrated that a simple moving-average crossover system outperforms buy-and-hold, while reducing drawdown risk and volatility.

2012-09-18 Campaign Rhetoric and Our Energy Future by Michael Edesess (Article)

At their respective conventions, both President Obama and Mitt Romney spoke to a centrally important topic for America and the world: energy. Their positions – political posturing aside – are broadly similar. But rather than a coherent, sustainable vision for the energy future of the United States, both men's rhetoric reflected the usual exercise in political base-touching, apple pie-polishing, and third-rail avoidance. And two important, perhaps crucial, pieces of the energy puzzle were hardly mentioned at all.

2012-09-18 Gundlach – The End of the Bond Bull Market by Robert Huebscher (Article)

Likening bullishness on Treasury bonds to a 'mass psychosis,' Jeffrey Gundlach made his strongest statement yet that interest rates are about to rise. In a conference call with investors last Tuesday, he said that the rate on the benchmark 10-year Treasury bond could increase by 100 basis points by the end of the year.

2012-09-18 $4 Gas Could Put Brakes on Growth by Milton Ezrati of Lord Abbett

Reaction to the recent climb in gasoline prices appears surprisingly muted, but a sustained rise could result in a significant drag on U.S. growth.

2012-09-18 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Last week the stock market got all it wanted from the Central Banks of Europe and here at home. The money presses have been put on full power. The result was a continuation of the stock market rally along with commodities while bonds suffered a setback as investors swapped out.

2012-09-18 Federal Reserve Actions Help the Rally to Continue by Bob Doll of BlackRock Investment Management

The headline news last week was the US Federal Reserve's announcement of a new round of quantitative easing in which the central bank plans to purchase $40 billion of mortgage-backed securities on a monthly basis (without a predetermined end date). The Fed also pushed back the timeframe on how long it will maintain its current zerointerest-rate policy, indicating that the current level of rates should be in effect through the middle of 2015.

2012-09-18 Buckle Inc: Stock Research Analysis by Team of F.A.S.T. Graphs

This article is going to analyze Buckle Inc (BKE) through the lens of FAST Graphs. Buckle announced at its quarterly meeting of the Board of Directors, held on September 17, 2012, the Board authorized a $0.20 per share quarterly dividend to be paid to shareholders of record at the close of business on October 15, 2012, with a payment date of October 26, 2012.

2012-09-18 Housing Recovery? Try Long Convalescence by Russ Koesterich of iShares Blog

The US Federal Reserve's decision to expand quantitative easing is dramatic, but we don't think it will have a significant impact on the US housing market. While the extra liquidity is supportive of risky assets in the very near-term, lower mortgage rates are not a game-changer for a consumer still struggling with little income growth and too much debt.

2012-09-17 And That's the Week That Was by Ron Brounes of Brounes & Associates

Dr. B. has spoken and investor are happy (though some Republican investors probably have mixed feelings). Though not all economists were on board with QE3, the policymakers looked at the labor market and took action. With promises of more bond-buying and low fund rates into 2015, investors went on a risk asset buying spree and stocks shot up to multi-year highs. So let the over-analysis (and political bickering) begin.

2012-09-17 The Fed to the Rescue? by Scott Brown of Raymond James

Citing concerns about the pace of improvement in the labor market, the Federal Open Market Committee extended and amplified its forward guidance and started a third round of large-scale asset purchases (what most people call "QE3"). The FOMC said that economic conditions are expected to warrant exceptionally low levels of the federal funds rate target through mid-2015 (vs. "late 2014" in the previous policy statement) and added that "a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens."

2012-09-17 Low-Water Mark by John Hussman of Hussman Funds

As of Friday, our estimates of prospective return/risk for the S&P 500 have dropped to the single lowest point we've observed in a century of data. There is no way to view this as something other than a warning, but it's also a warning that I don't want to overstate. This is an extreme data point, but there has been no abrupt change; no sudden event; no major catalyst. We are no more defensive today than we were a week ago, because conditions have been in the most negative 0.5% of the data for months.

2012-09-17 Charlie Dreifus on the Global Economy and Its Impact on Stocks by Charlie Dreifus of The Royce Funds

Portfolio Manager Charlie Dreifus examines the data from Europe, China, and the U.S. and discusses how it may affect domestic stock prices.

2012-09-17 Emerging Markets Equity Monthly Product Commentary: August 2012 by Team of Thomas White International

Emerging market equities saw a marginal price correction during the month of August, as concerns about growth moderation in these economies persisted. The economic downturn in Europe, one of the largest markets for export-oriented emerging market countries, continues to force policy makers in emerging economies to come up with programs to support domestic growth. However, renewed optimism over aggressive policy action to stem the fiscal crisis in Europe helped the emerging markets in.

2012-09-17 Ben Wants You To Spend Cash by John Petrides of Advisors Capital Management

This week the Federal Reserve launched its third round of monetary policy easing in as many years. Under QE3 (quantitative easing), the Fed will purchase $40 billion of mortgage backed securities on a monthly basis with the purpose of continuing to fuel the housing market. Under QE3, the Fed said it will keep its zero interest rate policy until mid-2015, with the goal of removing market assumptions of a rising rate environment. The Fed is and always will be data dependent, so all of these actions are subject to change.

2012-09-17 Global Overview: August 2012 by Team of Thomas White International

Signs of emerging political consensus in Europe over supporting further action by the European Central Bank (ECB) and a closer banking union helped sustain investor sentiment during the month of August. Germany and select other countries that were skeptical of open ended policy measures by the ECB now appear to be scaling down their opposition.

2012-09-17 "QE" Stands for Quality Employment by Kristina Hooper of Allianz Global Investors

The Fed's expansive and open-ended quantitative easing program centers on building up a depleted workforce and quickening the pace of the housing recovery, but higher inflation and tight credit could play the role of spoiler. Buying mortgage-backed securities and pushing interest rates lower is designed to boost the housing sector, help loosen lending standards, stimulate corporate spending and increase foreign demand for U.S. products. This is a tall order and there are many "ifs" in this scenario, but the flexibility and breadth of QE3 increases the likelihood of its effectiveness.

2012-09-17 QE3, For Now by Brian Wesbury, Bob Stein of First Trust Advisors

As we all know by now, the Federal Reserve launched QE3 on Thursday, announcing an open-ended program of buying an extra $40 billion a month in mortgage-backed securities until it sees a substantial improvement in the outlook for the labor market. It also adjusted its guidance for when it thinks it will start moving up short-term interest rates to mid-2015 from a previous late-2014.

2012-09-17 Was QE3 Necessary? It Depends on Who You Ask... by Ken Taubes of Pioneer Investments

Last week Chairman Bernanke and the Fed launched another aggressive stimulus program, QE3, saying that they will buy $40 billion in mortgage debt per month and continue to purchase assets in order to boost growth and reduce unemployment. He also announced that the Fed is not likely to raise rates from the current rock bottom lows until at least mid 2015, vs. 2014 as previously stated.

2012-09-17 The 9/11 Lessons for Terrorists by Bill O'Grady of Confluence Investment Management

In this report, we will outline potential lessons learned over the past 11 years by terrorist groups. By doing this, we hope to outline how terrorists might act in the future. As always, we will conclude with potential market ramifications.

2012-09-15 The Direction of the Compromise by John Mauldin of Millennium Wave

I think this election has the potential to be one of those rare times, at least in terms of economic outcomes. In Thoughts from the Frontline we cover economics and investments, money and finance. We only rarely stray into the political world, and then only glancingly. Today, we cross that gray line, but at a somewhat different angle, as we look at the economic consequences of the political decision that will come with the choices we make in November in the US.

2012-09-14 Afraid of QE3? Buy Real Assets by Seth J. Masters of AllianceBernstein

We expect to see continued asset-buying announcements from central banks around the world: the ECB last month, the Fed today, the Bank of Japan imminently. The impact of these announcements, and ensuing implementations on the real economy, are likely to be ambiguous at best. However, our research suggests that real assets such as real estate and commodities will profit from asset purchases in the near term and protect from related inflationary risks in the medium term.

2012-09-14 The Cure for Baldness by Neel Kashkari of PIMCO

Rarely does one find market commentators offering moderate, balanced investment advice these days. More likely one will find extreme headlines designed to capture maximum attention. We believe it is worthwhile to take time to craft an investment strategy that can withstand a range of market outcomes. In a lower-return world, we look to buy companies that are attractively priced and that can grow faster than the market as a whole, and we actively manage downside risks.

2012-09-14 All In by Doug MacKay and Bill Hoover of Broadleaf Partners

Dissatisfied with progress on the jobs front, the Fed went "all in" yesterday in its much anticipated, most recent policy announcement. Unlike QE1, QE2 and Operation Twist, the latest addition to the monetary smorgasbord is open-ended, meaning that it has no pre-established termination date. Policy will remain stimulative for as long as it takes to see a substantial improvement in employment. Rather than keeping rates low well into 2014, it could now be well into 2015 before they tick back up.

2012-09-14 Open-Ended Easing by Carl Tannenbaum and Asha Bangalore of Northern Trust

The Federal Open Market Committee (FOMC) took a very forceful set of steps this week, designed to stimulate what officials have called a "frustrating" job market. Our updated forecast suggests that the growth trajectory of the US economy is positive but sufficiently sub-par for the Fed to have initiated additional monetary policy support. There are increasing signs that China's economy is slowing more than the official readings would suggest.

2012-09-14 Surviving a Downturn by Michael Han of Matthews Asia

During my recent trip to Northeast Asia, many managers I met were concerned about the gloomy macroeconomic news still coming out of Europe and were curious to hear from me about the state of the U.S. economy. Given their concerns, companies were preparing for a worst-case scenario and continuing to leverage their competitive advantage as they have done during past downturns. Surprisingly, some companies I met with in more developed parts of Asia seemed to welcome this downturn.

2012-09-14 ECRI Defends Its Recession Call by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index of the Economic Cycle Research Institute rose for the 6th consecutive week, now at 124.9 from last week's 124.1. The WLI growth indicator now marks its fourth week in expansion territory at 2.1. It has now posted eleven consecutive weeks of improvement. The big news is yesterday's Bloomberg TV interview, in which Lakshman Achuthan, ECRI's COO, reasserted his company's recession call made a year ago on September 21st and his belief that the recession has already begun.

2012-09-14 The Big Four Economic Indicators: Updated Industrial Production and Real Retail Sales by Doug Short of Advisor Perspectives (dshort.com)

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method. There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process. They are: Industrial Production, Real Income, Employment and Real Retail Sales.

2012-09-14 Weaker Growth Helps Shift Germanys Approach to Sovereign-Debt Crisis by Darren Williams of AllianceBernstein

Recent German data show clearly that the sovereign-debt crisis is starting to bite. This might help explain why the government has given a green light to the European Central Banks (ECBs) new sovereign-bond purchase program. It may also indicate a more lenient approach to Greeceat least for the time being.

2012-09-14 ProVise Bullets by Team of ProVise Management Group

It is a heads I wintails you lose - scenario for American farmers. Everyone has heard about the drought throughout the U.S. being the worst since the 50s. However, dont feel too badly for the farmers as their net income will hit a record $122 billion this year. How can that possibly be, given all of the crops drying up? Easy. Since the supply is down and demand remains the same, the price has jumped dramatically and has offset the loss of yield per acre.

2012-09-14 Reconnaissance: Strategy Notes by Douglas Clark Johnson of Codexa Capital

The prominent US trade mission has been in Cairo at a particularly challenging moment politically. At-hand circumstances will remind these business leaders just how volatile the country can be, especially in the absence of growth. Egypt is probably the largest emerging market with the most uncertain economic direction, at least for the time being. We also take a closer look this week at Turkish-Iranian trade relations and policy developments in Indonesia.

2012-09-14 Australias Second-largest Export It Isnt Coal by Adam Bowe of PIMCO

With growth in China now moderating, and the price of commodities and Australias terms of trade now declining, many investors are questioning how the Australian dollar has managed to remain well-supported. The explanation lies mainly in the changing structure of the funding of the current account deficit. Going forward this will likely have important implications for monetary policy in Australia if the decline in national income growth is not offset by a similar decline in the Australian dollar.

2012-09-14 QE3: Ineffective Parachute for Fiscal Cliff by Russ Koesterich of iShares Blog

While the most likely scenario is that Washington reaches a compromise at the last minute, until then the uncertainty will keep the markets volatile and potentially drag down fourth quarter growth. Given recent comments out of Congress, there is also a non-trivial chance that we will, at least temporarily, go over the cliff. If that happens, QE3 will not be a particularly effective parachute.

2012-09-14 All In by Bob Rodriguez of First Pacific Advisors

2013 is a critical moment in time. If a material and timely fiscal restructuring does not take place by next September, I fear and believe that it will not occur before 2017. Unfortunately, if this were to occur, my 2009 warning of a crisis of equal or greater magnitude than the Great Recession by 2017 would be a more likely outcome. My worst fear is that fiscal gridlock continues, coupled with the policies of this activist Fed Chairman. Todays Fed actions add to my anxieties. ALL IN may be a good strategy for poker but not for this economy.

2012-09-14 Operation Screw by Peter Schiff of Euro Pacific Capital

The Fed will try to conjure a recovery on the backs of currency debasement. It will not stop or alter from this course. If the economy fails to respond to the drugs, Bernanke will simply up the dosage. In fact, he is so convinced we will remain dependent on quantitative easing that he explicitly said he won't turn off the spigots even if things noticeably improve. In other words, the dollar is screwed.

2012-09-14 Dont Be the Equivalent of a Stock Market Racist by Team of F.A.S.T. Graphs

Common stocks are very different and come in all assortments, sizes, shapes and flavors. Consequently, we encourage investors to think more specifically and rely more on the precise characteristics of the individual company or companies they are contemplating. Worrying about the general state of the economy or the stock market, or their future direction, is not only an exercise in futility, but an unnecessary exercise as well.

2012-09-14 All Signs Pointing to Gold by Frank Holmes of U.S. Global Investors

So, gold investors, if you havent put in your orders, consider getting them in quickly, because the bulls are buying. Credit Suisse saw 'massive inflows' into gold exchange-traded products in August after experiencing significant outflows compared to crude oil and the broader market in March, April, May and July. August shows a clear preference toward gold.

2012-09-13 Back to the Future: What's at Stake for the Economy in the Obama-Romney Contest by Team of Knowledge @ Wharton

To hear the two candidates tell it, the U.S. presidential election offers a dramatic choice on the economy: Vote for me, each says, if you want a robust recovery; pick my opponent, and we'll plunge back into recession. But given the huge problems the country currently faces, the future -- no matter who wins in November -- will look much like the present, according to several Wharton faculty.

2012-09-13 Fiddling at the Fire by Nouriel Roubini of Project Syndicate

Worldwide, political leaders are putting off the economic reforms needed to avoid a painful, if not catastrophic, endgame. But, as everyone kicks the can down the road, the can is getting heavier and, in the major emerging markets and advanced economies alike, is quickly approaching a brick wall.

2012-09-13 U.S. Dollar: Don't worry, be happy by Alex Merk of Merk Funds

May we suggest a Twitter version of today's FOMC statement: "Don't worry, be happy!" The Fed may want you to take a valium to stomach the ride ahead. Will the latest statement by the Fed put the U.S. dollar at risk of melting away under your feet?

2012-09-13 Finding Seeds of Growth by Serena Perin Vinton of Franklin Templeton Investments

Like the seed waiting to emerge beneath an icy winter blanket, there are equity growth opportunities sprouting that perhaps aren't obvious on the surface. When the global economic landscape seems rocky and unfertile, you might think opportunities in growth-oriented stocks would be stunted. Serena Perin Vinton, co-manager for Franklin Growth Fund, knows where to dig for those growth opportunities though, and sometimes it's in unusual places. One area she points to is U.S. manufacturing, which she believes could be set to stage a comeback.

2012-09-13 Fed Sets Sail on QE3 by Brian Wesbury, Bob Stein of First Trust Advisors

They did it. The Federal Reserve today announced a third round of quantitative easing, making an open-ended commitment to buy additional mortgage-backed securities at a pace of $40 billion per month. The Fed said it also will "closely monitor" the economy and financial markets and continue these purchases and possibly expand them until they see substantial improvement in the outlook for the labor market.

2012-09-12 Housing's 'Green Shoots' by Investment Strategy Group of Neuberger Berman

Headwinds in the housing market appear to be abating as the U.S. economy gradually heals.

2012-09-12 On Uncertain Ground by Howard Marks of Oaktree Capital

I'm going to devote this memo to the uncertainty in the world and the investment environment and then offer my take on the appropriate strategy response. This will require me to touch on a large number of topics, but I will try to dwell less than usual on each of them.

2012-09-12 Pacific Basin Market Overview - August 2012 by Team of Nomura Asset Management

Pacific Basin equity market performances were mixed during August 2012 and generally underperformed markets in Europe and North America, largely due to the drag caused by concerns surrounding Chinas slowing economic growth rate. Numerous statements made by European leaders to support the Euro helped to allay fears and brought yields on sovereign bonds lower during the month.

2012-09-12 Will America Be Greece in Four Years? by Gary Halbert of Halbert Wealth Management

The US national debt topped $16 trillion last week, and it was almost as if no one paid attention. At the rate we are going, the national debt will top $20 trillion just four years from now in 2016. In my August 21 E-Letter, I pointed out just how mind-boggling a trillion dollars is. Lets revisit that analogy of a trillion in terms of time.

2012-09-12 PIMCO Cyclical Outlook: Building Rickety Bridges to Uncertain Outcomes by Saumil Parikh of PIMCO

Without structural change aided by well-planned fiscal policy, we are afraid the nominal bridges of monetary policy will fail to reach their desired outcomes. The probability of a deflationary left-tail outcome emanating from the eurozone has declined substantially in the short run, yet outright economic growth in the eurozone will remain elusive in 2013.The much-publicized "fiscal cliff" is set to hit the U.S. economy on January 1, 2013, and could reduce U.S.

2012-09-12 Equity Monthly: Drought Aftermath by Team of Janus Capital Group

Ramifications of this summer's once-in-a-generation drought in the United States stretch much farther than Midwestern farms. The drought's impact will be felt most in emerging markets, and how leaders in those countries choose to interpret higher food prices in the context of overall inflation will merit close watching in the next 12 months. While rising food prices will pinch consumer budgets and wreak havoc on input costs for food service companies, we also see some investment opportunities tied to the drought.

2012-09-12 Is Europe Fixed? Not Even Close! by Fred Copper of Columbia Management

Euro Area (EA) equities have rallied 16% since European Central Bank (ECB) President Mario Draghi made his now famous July 26 pronouncement that "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough." Does this mean the EA is fixed? Not even close.

2012-09-12 Investing is Like Duck Hunting by Pamela Rosenau of HighTower Advisors

The discussion of additional monetary easing by the Federal Reserve has been the topic du jour in recent weeks. As a result of potential additional monetary stimulus, the US dollar has experienced a decline. Also, after a weaker than expected jobs report last week, US treasuries initially rallied given an increased expectation of Fed action. However, as pointed out by the market commentators at Sober Look, the Treasury curve has begun to steepen with the "30-year bond and other longer dated treasuries steadily selling off."

2012-09-11 Ponzi Games by Michael Lewitt (Article)

Whatever schemes the European Central Bank may cook up over the next few months will only prove short-term liquidity relief to what are long-term insolvency problems. Like any Ponzi scheme, the last money in is going to be hurt the worst when the charade comes to an end. In the meantime, investors proceed at their own risk.

2012-09-11 Ready, Set, Fed! Weak Jobs Report Raises QE3 Odds by Russ Koesterich of iShares Blog

Russ says the US Federal Reserve Open Market Committee has more reason to consider quantitative easing at this week's meeting, after the latest payroll report suggests the US economic recovery is likely to remain weak into the end of the year.

2012-09-11 The Winds of Market Change by Mark Mobius, Michael Hasenstab of Franklin Templeton Investments

As we cross the mid-way point of the year, you might say the equity and fixed income markets have been a lot like the recent weather in much of the world: uncertain, and tending toward extremes. The perception of a stormy economic climate has driven some equity valuations to extremely low levels, particularly in Europe, and investors have been pouring into fixed income despite extremely low yields.

2012-09-11 Dividend Focused ETFs Don't Offer a Free Lunch, but They Let You Snack along the Way by Kane Cotton of Bellatore Financial, Inc.

There is no free lunch in investing! These words ring true, on average, over time for most investors. After all, investing is a trade off between growth and price as well as risk and return. The higher the expected future growth of a stock, the more likely it will be that investors have to pay a higher price (P/E) to get a piece of that future growth.

2012-09-11 Fed Preview: Time to Forge Ahead by Carl Tannenbaum of Northern Trust

I got home at about 8 one evening last week, and it looked like a bomb had gone off inside my house. The shrapnel included empty pop cans, open bags of snacks, and scores of used napkins. The sink was filled with dirty dishes, and laundry (clean, or dirty?) was strewn about the floor. No one was home, leading me to suspect that the explosion had done them all in.

2012-09-11 Rally Should Continue, but Look for More Volatility by Bob Doll of BlackRock Investment Management

Despite a relatively disappointing jobs market report for August, stocks rose last week as investors focused on the European Central Banks (ECB) announcement of its longawaited plan to buy bonds in the secondary market. The ECB program represents an important step in terms of lowering volatility and providing a cushion for Europes debttroubled countries to make some longer-term improvements in their fundamentals.

2012-09-10 Better Policy, Better Recovery by Brian Wesbury, Bob Stein of First Trust Advisors

Politicians always shift the blame. So, hearing them say that "no one" could have cleaned up the so-called mess and fixed the economy in just a few years is not surprising. What else do you say when after three years of recovery the unemployment rate is still at 8.1% -- down only 1.9 points since the peak almost three years ago and real economic growth has averaged a tepid 2.2% for three years of economic recovery?

2012-09-10 The Siren Song of Growth: Why Investors Willfully Set Sail for the Rocks by Matt Malgari of Knight Capital Group

Gaining an informational edge through more efficient and effective tools of fundamental company financial analysis and relative valuation is still a crucial goal for active equity managers. This should be even truer in a lower return world, particularly when investment returns may be under transition, driven in part by difficulties in maintaining long-term growth opportunities of a given company's own capital investments.

2012-09-10 The August Employment Report and the Fed by Scott Brown of Raymond James

The August job market report was disappointing. Nonfarm payrolls rose less than expected and previous figures were revised lower. The unemployment rate fell, but that was due to a decrease in labor force participation (dont read too much into that).

2012-09-10 The Case for Real Estate by Jeff Kolitch, David Baron, David Kirshenbaum of Baron Funds

We believe we are in the early stages of a multi-year real estate recovery fueled by improving cash flows, rising demand, a scarcity of new development projects, improving credit availability, and generationally low interest rates. We believe the outlook is promising for both residential and commercial real estate.

2012-09-10 Russia: Riding on the Fast Lane by Team of Thomas White International

The fall in oil and natural gas prices has prompted the Russian government to turn its attention to the country's hitherto ignored manufacturing sector.

2012-09-10 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Does a powerful upcycle necessarily have to be followed by a downcycle? Well, yes, if one believes in the notion of parabolic quantitative market theory. Given that you can't fill up a phenomenon greater than 100%, nor empty it more than zero, what happens when you reach a statistical "saturation point", when the laws of probability no longer engender positive outcomes?

2012-09-10 Fixed Income Investment Insight by Michael Siviter of Invesco

At the beginning of a crucial period for the Eurozone, Michael Siviter, Portfolio Manager in Invesco Fixed Income, outlines the challenges the authorities face.

2012-09-10 When Bad Is Good by Kristina Hooper of Allianz Global Investors

Faith in the Fed is growing more devout. Despite another disappointing jobs report, stocks drifted higher Friday to close out a strong week for the major averages as investors pinned their hopes to an imminent policy move from central bankers. It is becoming more apparent every day that the U.S. economy is sputtering. While housing appears to have stabilized, jobs and manufacturing are areas of concern.

2012-09-10 Back to School: Summer Vacation Ends for Central Bankers by Andrew Boczek of Sentinel Investments

The heady days of "Maestro" Alan Greenspan may be long gone. Nonetheless, most of us still take for granted that similarly wise men and women, aloof from the pressures of politics and short term market fluctuations, have the capacity to set the proper price of our most precious commodity: time. Or said another way, to set an effective interest rate policy that encourages either savings or spending, today or in the future, to help manage long term economic stability.

2012-09-10 Are Labor Markets the Key to Fed Easing? by Chris Maxey of Fortigent

Widely reported last week was anemic labor market growth in August. Some talking heads took this news in stride, assuming this would guarantee further market intervention by the Fed, but there is a danger in assuming any form of quantitative easing will alleviate the intermediate-term concerns of the market.

2012-09-08 Debt Be Not Proud by John Mauldin of Millennium Wave

The unemployment numbers came out yesterday, and the drums for more quantitative easing are beating ever louder. The numbers were not all that good, but certainly not disastrous. But any reason will do, if what you want is more stimulus to boost the markets ever higher. Today we will look first at the employment numbers, because deeper within the data is a real story. Then we look at how effective any monetary stimulus is likely to be.

2012-09-07 Spinning Pessimism Into Opportunity by Peter Langerman, Ed Jamieson of Franklin Templeton Investments

In the markets and in life, we face bullish and bearish periods. Some days are good and some days are bad. But even on bad days, good things can and do happen, which may explain our sometimes Pollyanna-sounding persistence on the existence of a bright side even in the face of somber-sounding issues like fiscal cliffs and austerity measures.

2012-09-07 The ECB: No Rest for the Weary by Carl Tannenbaum of Northern Trust

The economic picture in Europe is worsening, exposing flaws in the foundation of the euro compact. The European Central Bank is trying its best, but remains hindered by its charter. European policy makers should focus on stabilizing the situation first, and seeking retribution later.

2012-09-07 The Big Four Economic Indicators: Updated Nonfarm Employment by Doug Short of Advisor Perspectives (dshort.com)

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.

2012-09-07 Economic Data Continues to Undermine ECRI's Recession Call by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose for the fifth consecutive week, now at 123.7 from last week's 123.5 (revised from 123.6). See the WLI chart below. The WLI growth indicator (WLIg) is in its second week in expansion territory at 1.0 (up from last week's 0.5). It has now posted ten consecutive weeks of improvement.

2012-09-07 The Federal Reserves Next Move: QE3? Perspectives on U.S. monetary policy by Team of Janus Capital Group

We believe the Fed will take additional action by mid-September to stimulate the economy, probably through a third round of quantitative easing. U.S. economic growth remains well below potential and is slowing, and the Fed is not meeting its dual mandate to ensure price stability and full employment. We recently reduced our 2012 GDP growth estimate to between 1.5% and 1.7%.

2012-09-07 Policymakers Report Card on Competitiveness by Frank Holmes of U.S. Global Investors

The U.S. dropped to No. 7 on the World Economic Forums newly released 2012 Global Competitiveness Index report. Switzerland retained its top position as the most competitive nation, followed by Singapore, Finland, Sweden, the Netherlands and Germany. Asian countries continue to be among the most competitiveand many are gaining strength. Among the top 20, five are from Asia.

2012-09-07 Chinas Next Act by Frank Holmes of U.S. Global Investors

World markets may not have to wait much longer for Chinese policymakers to act, as the government recently announced new infrastructure projects. According to Bloomberg, China approved 25 new subway construction projects, with related investments estimated to be more than 840 billion yuan. Railway, subway and construction stocks in China increased on the news. China is in much better shape than the rest of the world. A powerful rebalancing strategy offers the structural and cyclical support that will allow it to avoid a hard landing.

2012-09-07 Recent Speech Given by Lacy Hunt, Ph.D. by Lacy H. Hunt of Hoisington Investment Management

The most sensible recognition of budget policy came from David Hume, one of the greatest minds of mankind. In his 1752 paper Of Public Finance, Hume advocated running budget surpluses in good times so that they could be used in time of war or other emergencies. Such a recommendation would, of course, prevent policies that would send countries barreling toward the bang point. Countries would have to live inside their means most of the time, but in emergency situations would have the resources to respond.

2012-09-06 Laboring a Point by Jerry Wagner of Flexible Plan Investments

Right before Labor Day each year we are treated to a major policy speech at the Federal Reserve Board's meeting of the Fed's Open Market Committee. In 2010, we were treated to suggestions from Chairman Bernanke that a new period of Quantitative Easing was near. And sure enough, the Federal Reserve announced QE2 on October 22nd of that year.

2012-09-06 How to Unscramble an Egg by Niels Jensen, Nick Rees,Tricia Ward, Thomas Wittenborg of Absolute Return Partners

This month we take a closer look at the root problems behind the current crisis. Too often root problems are confused with symptoms and the wrong medicine is prescribed as a result. We identify five root problems, all of which must be addressed before we can, once and for all, leave the problems of the past few years behind us.

2012-09-06 Reconnaissance: Strategy Notes by Douglas Clark Johnson of Codexa Capital

Pessimism about the next administration's impact on the emerging markets is held in check by the likely convergence of US and Chinese economic interests. More than ever, Ms. Smith needs Ms. Wong. To borrow a recent Financial Times headline, "Obama should pray that China overtakes the US." To us, Indonesia and Malaysia look pretty promising by this standard. Other stories include a look at timber and an update on Bahrain's economy.

2012-09-06 August 2012 Market Commentary by Andrew Clinton of Clinton Investment Management

On a year-to-date basis the municipal bond market has, once again, delivered meaningful returns both on an absolute and risk adjusted basis. While the market yield and or cash flow of a bond is typically very important to investors, it is equally important to remember that the income a bond produces is only one component of a bonds return. Investors must consider several other essential elements of a security to properly quantify a bonds relative value.

2012-09-06 September: A Rough Month for the Markets? by Gary Halbert of Halbert Wealth Management

September is often a bad month for the stock markets, historically speaking, and this year it could be especially turbulent. In addition to all the uncertainty about the weak US economy, there is uncertainty about what the Fed may do just ahead and what, if anything, will be done to address Europe's recession and debt crisis. In addition, there is the looming presidential election which no doubt will go hyperbolic this month.

2012-09-05 The Lending Lindy by Bill Gross of PIMCO

Our entire finance-based monetary system led by banks but typified by insurance companies, investment management firms and hedge funds as well is based on an acceptable level of carry and the expectation of earning it. In a New Normal economy where lenders dance to the Blue Danube instead of the Lindy, how should we move our own feet? Carefully, I suppose, and with recognition that historic returns are just that historic.

2012-09-05 Profit Motive: If Earnings/Margins Are Peaking, What About Stocks? by Liz Ann Sonders of Charles Schwab

Earnings growth has peaked, but don't necessarily assume the same about margins. Present pace of earnings growth has historically been accompanied by decent market performance. Margins are increasingly driven by domestic and foreign earnings, but peaking margins have historically been accompanied by strong market performance.

2012-09-05 September Economic Update by Justin Anderson of Cambridge Advisors

August was characterized by relatively low volatility as stocks continued to grind higher and bond yields traded in a fairly narrow range. The economy saw little change as the slow growth theme continued. European officials mostly took the month off so the sovereign debt crisis fell off the radar for the month. Politics have dominated the headlines, but a close race hasn't provided an impetus for investors to make significant portfolio changes.

2012-09-04 Back-to-School Letter to the US Congress by Mohamed El-Erian of Project Syndicate

What if members of the US Congress, now returning from their summer recess, were to receive a "back to school" memorandum from concerned citizens? At a minimum, it should call on Congress and the president to converge on a multi-prong, multi-year policy initiative that makes simultaneous advances in six critical areas.

2012-09-04 ProVise Bullets by Ray Ferrara of ProVise Management Group

At one time during the dotcom craze, the NASDAQ closed over 5000, but, as it tumbled downward, it last crossed the 3000 mark on December 11, 2000; that is until it crossed that mark on March 13, 2012, or 11.25 years later. My, how the times have changed! The income tax was introduced in the U.S. in 1913. This means that when we file our taxes on April 15, 2013 for the year 2012, it will be the 100th year that income taxes have been paid.

2012-09-04 Civility by Jeffrey Saut of Raymond James

Webster's defines "civility" as: civilized conduct; especially: courtesy, politeness. But, there was no civility last Friday afternoon. The place, CNBC; the time 3:05 p.m.; the anchors Michelle Caruso-Cabrera and Bill Griffith; the show "Closing Bell"; the guests were myself, Bill Spiropoulos, Lee Munson, and Matt McCormick. The interview started off well enough with each interviewee responding to the anchors' questions.

2012-09-04 Risks in the Search for Yield by Charles Lieberman of Advisors Capital Management

Interest rates are so extraordinarily low that investors have pushed up prices (and pushed down yields) of all the traditional investments used for income, so they have even forced into more esoteric or risky investments. This search for yield has created significant risks that may not be well appreciated. This Commentary discusses these risks.

2012-09-04 Postcard from India: Taking Frugal Engineering to the World by Team of Thomas White International

The first 25 ton truck that rolled out of Daimler's new Indian manufacturing plant in June this year was similar in most respects to other trucks the company sells across the globe. Even on a closer look, the only major difference seemed to be the name and logo on the front grill. The iconic Mercedes three pointed star logo had been replaced by a new round logo and brand name, BharatBenz.

2012-09-04 Still No Recession in Sight by Brian Wesbury, Bob Stein of First Trust Advisors

Real GDP in the US has grown 2.3% in the past year, a mediocre rate of growth, little different than its 2.2% average since mid-2009, when the recovery officially began. It's what we call the Plow Horse economy and we expect it to continue plodding along, at least through this fall.

2012-09-04 An Upgrade of UK Equities by Russ Koesterich of iShares Blog

With UK economic growth showing signs of stabilization, the downside of investing in the region now appears more balanced versus the potential benefits. Russ believes it's time to upgrade equities from the United Kingdom to a neutral status.

2012-09-04 Risk Mitigation by Bill Smead of Smead Capital Management

How did the job of an asset allocator move from seeking out undervalued asset classes and securities to one of seeking to mitigate risk? Is risk mitigation a worthy goal or even possible without abandoning real return goals? When and why did wealth creation become wealth management? What opportunities exist today for those who seek wealth creation through intelligent risk taking?

2012-09-04 All QE, All the Time by Chris Maxey of Fortigent

In a week of relatively light trading to wrap up the summer, equity markets trickled lower, as the Dow Jones Industrial Average lost 0.5% and the S&P 500 Index fell 0.3%. It was a mixed week of economic data in the U.S., but markets were clearly locked in on Ben Bernanke's speech in Jackson Hole, Wyoming. News on housing seems to confirm that a bottom is in place, while manufacturing data continues to move in all different directions.

2012-09-01 The Case for Emerging Europe by Frank Holmes of U.S. Global Investors

If history had turned out differently, the USSR wouldve taken home the most Olympic medals this year, as the total awarded to athletes from the area was 163, according to a blog on Foreign Policys website. As we all know, the Wall came down, the Soviet Union collapsed, and now Russia has to be content with its third-place position of 82 medals. Athletes from the United States were awarded the most medals (104), followed by participants from China, who took home 88.

2012-09-01 Schwab Market Perspective: Back to Work by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

As summer winds down, we expect things to heat up as policymakers get back to work, resulting in a challenging investment environment.

2012-09-01 And That's the Week That Was by Ron Brounes of Brounes & Associates

Isaac vs. Romney vs. Bernanke. Each took their turn in the limelight this week. While the Hurricane dropped plenty of rain and brought damaging winds into Louisiana, the devastation didnt compare to Katrina. Romney humbly accepted his party's nomination, while still trying to prove to T-Partiers (and women) that he should be their guy (and he can bash his opponents with the best of them.

2012-08-31 Risks in the Search for Yield by Charles Lieberman of Advisors Capital Management

Interest rates are so extraordinarily low that investors have pushed up prices (and pushed down yields) of all the traditional investments used for income, so they have even forced into more esoteric or risky investments. This search for yield has created significant risks that may not be well appreciated. This Commentary discusses these risks.

2012-08-31 Rethinking How We Invest by Matt Scales of Columbia Management

Building portfolios to meet individual objectives is or should be a customized exercise, so this article should not be considered advice for any individual. Instead, it is an alternative philosophy to how investors have traditionally approached building portfolios. For the vast majority of us, we allocate our capital to asset classes with the highest expected returns.

2012-08-31 ECRI's Embarrassing Recession Call by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose for the fourth consecutive week, now at 123.6 from last week's 123.3. See the WLI chart below. The WLI growth indicator (WLIg) has risen into expansion territory at 0.6 after nine consecutive weeks of improvement.

2012-08-31 Prepare Now for the Looming Fiscal Cliff by Russ Koesterich of iShares Blog

The general election season is finally upon us, and investors should begin shifting their focus from theoretical discussions about the impending fiscal cliff of potential tax hikes and spending cuts to more concrete action plans of what to do about it.

2012-08-31 While Everyone Worried About Europe by Robert Horrocks of Matthews Asia

We all do it. We all refer to Asia as an export-driven economy. It's one of those seemingly useful bits of shorthand. Unfortunately, I believe it has come to do more harm than good. Along with "emerging economies," I would like to banish the phrase to the ranks of outlawed jargon.

2012-08-30 Opportunity Cost: Emotions by Matt Lloyd of Advisors Asset Management

Emotions may be keeping your clients in cash, putting their long-term goals at risk. Taking a snapshot of headlines and it is not hard to discern where investors' predispositions lay.

2012-08-30 The Calm Before the Storm? by Jerry Wagner of Flexible Plan Investments

I know these are the dog days of summer, a time that Jack London captured perfectly in the quote here. Nothing much is happening in the financial world as summer draws to a close. There was little news from Europe. The last of earnings reporting season is behind us, and while the results were the worst since the rally began in March of 2009, they were not terrible.

2012-08-30 The ESM: Saviour, Super SIV or End of the Road? by Andrew Bosomworth of PIMCO

So long as the fundamental issues about the future of the eurozone remain unsolved, the extra supply of ESM bonds will likely drive up the borrowing costs of its weaker stakeholders. Without a cap on or exit clause from additional capital calls, the ESM could lead northern eurozone countries down a difficult and unsustainable path.

2012-08-30 Dividends: The Next Bubble? by Ed Perks, Don Taylor of Franklin Templeton

Dividend-paying stocks have received a good deal of attention this yearand for good reason. Ed Perks, senior vice president and director of the Core Hybrid Portfolio Management Group at Franklin Templeton, and Don Taylor, senior vice president and portfolio manager for Franklin Equity Group, suspect it's these fearful prognostications that are overinflated, not the asset class. As they see it, the dividend-paying stock universe is expanding, and deserves investor attention.

2012-08-30 Fixed Income Investing - the Dangers of Complacency by Bill Woodruff of Bandon Capital Management

The paper points out the US has been in a declining interest rate environment for 30 years, producing a tailwind for fixed income investors but one with little room left for further decline. At these interest rate levels - the yield on the 10 year US Treasury recently hit an all-time month end low of 1.49% - fixed income investors face unique risks which are predominantly unfamiliar.

2012-08-29 China is Okay by Stephen Roach of Project Syndicate

Concern is growing that China's economy could be headed for a hard landing. The Chinese stock market has fallen 20% over the past year, to levels last seen in 2009. Continued softness in recent data from purchasing managers sentiment and industrial output to retail sales and exports has heightened the anxiety. Long the global economy's most powerful engine, China, many now fear, is running out of fuel.

2012-08-29 International Real Estate Securities: Review and Outlook by Jon Cheigh, Rogier Quirijns, Gerios Rovers, Luke Sullivan of Cohen & Steers

We would like to share with you our review and outlook for the international real estate securities market as of July 31, 2012. The FTSE EPRA/NAREIT Developed ex-U.S. Real Estate Index had a total return of 5.2% for the month (net of dividend withholding taxes) in U.S. dollars. By comparison, U.S. REITs returned 2.0% for the month, as measured by the FTSE NAREIT Equity REIT Index. Year to date, the indexes returned 21.3% and 17.2%, respectively.

2012-08-29 Closed-End Funds by Douglas Bond of Cohen & Steers

We would like to share with you our review and outlook for the closed-end fund market as of July 31, 2012. For the month, the total return of the Morningstar U.S. All Taxable ex-Foreign Equity Closed-End Fund Index was 3.0% based on market price and 2.3% based on net asset value (NAV). Year to date, the index had a market-price return of 11.8% and a NAV return of 8.1%. By comparison, the S&P 500 Index and the Barclays Capital U.S.

2012-08-29 Is Inflation Returning? by Martin Feldstein of Project Syndicate

Inflation is now low in every industrial country, and the combination of high unemployment and slow GDP growth removes the usual sources of upward pressure on prices. Nevertheless, financial investors are increasingly worried that inflation will eventually begin to rise, owing to the large expansion of commercial bank reserves engineered by the United States Federal Reserve and the European Central Bank (ECB).

2012-08-29 Reconnaissance: Strategy Notes by Douglas Clark Johnson of Codexa Capital

The Non-Aligned Movement summit in Tehran is probably the most important conference hosted there since the 1979 revolution. Iran is doing its best to use the forum as an opportunity to assert its position in world affairs. In market activity, we think fundamentals in India call for less exuberance in gold than some would suggest. Our outlook for South Asia meanwhile recognizes valuation opportunities in the smaller markets of Sri Lanka and Bangladesh.

2012-08-29 Fiscal Cliff Adds Urgency to US Election Budget Showdown by Joseph Carson of AllianceBernstein

With a record tax increase on tap for January 1, 2013, there has never been a better time for Washington to have a serious debate about fiscal policy. Before the economy reaches the so-called fiscal cliff, when huge tax increases and spending cuts are scheduled to take effect, US voters will have the opportunity to make a clear choice between two fiscal visions in the November elections.

2012-08-29 The Russian Evolution by Mark Mobius of Franklin Templeton

It might be tempting to say "everything old is new again" in Russia, given the return of Vladimir Putin to the presidency after a four-year hiatus, an interesting development in the country's political evolution. I think Russia has also evolved a great deal as an investment destination in the past two decades and holds great potential, although there is still more work to be done to open the markets and instill investor confidence.

2012-08-28 The Key Obstacles to Succession Planning by Bob Veres (Article)

At every financial services conference, you hear complaints about all those clients who never managed to get around to implementing the fancy, creative, tax-saving estate plans that their advisor created for them. But are financial planners any better?

2012-08-28 Who’s Fooling Whom? by Michael Lewitt (Article)

Equity markets are exhibiting a remarkable degree of complacency. The VIX is currently at extremely low levels and it can maintain those levels for a long period of time. The worse things get in terms of the economic data, the higher the market goes on hopes of central bank stimulus. At this rate, the Dow will peak just as the world is coming to an end!

2012-08-28 Taking Rational, not Rationalized, Risks by Wylie Tollette of Franklin Templeton Investments

Like beauty, "risk" is often in the eye of the beholder. What might seem "risky" to one person (such as traveling to an exotic destination) might be an exciting adventure for someone else. Wylie Tollette, Senior Vice President and Director of Performance Analysis and Investment Risk at Franklin Templeton Investments, travels around the world, working with portfolio managers to focus on a different kind of risk.

2012-08-28 Are Markets Nearing a Crossroads? by Chris Maxey of Fortigent

A relatively quiet, end-of-summer week resulted in modest losses for equity markets. The Dow Jones Industrial Average closed down 0.9% and the S&P 500 index lost 0.5%. There were limited amounts of economic data for the market to digest last week, but plenty of other headlines kept participants active. It was a decent week overall for economic data, as reflected by the continued recovery in the Citigroup Economic Surprise Index.

2012-08-28 General Mills Inc: Stock Research Analysis by Team of F.A.S.T. Graphs

General Mills Inc (GIS) is a high quality blue-chip dividend growth stock with a consistent long-term record of earnings growth averaging approximately 8% per annum.

2012-08-28 Curious Repetition by Christian Thwaites of Sentinel Investments

Greece had a bond payment in the middle of the week that was paid with no drama and then announced that it had enough cash to finance its needs through October. However, it is using cash set aside to recapitalize banks in order to meet general obligations. The bond buying proposals are still priced into the market.

2012-08-28 Policymakers Hold the Key to Confidence by Bob Doll of BlackRock Investment Management

The Dow Jones Industrial Average fell 0.9% to 13,158, the S&P 500 Index slid 0.5% to 1,411 and the Nasdaq Composite lost 0.2% to close the week at 3,070. As August draws toward a close, US equities have hit four-year highs, corporate bond yields touched multi-year lows and many risk assets can look back on a pretty good summer. But despite plenty of investment and central bank activity, we continue to see a shortage of economic and financial market confidence.

2012-08-28 Tomatoes and the Low Vol Effect by Ryan Larson of Research Affiliates

For the past 40 years, investors have focused on how much their returns varied from both a benchmark and their peers. Given the volatility of recent years, some investors are thinking about returning to a different approach to riskthe risk of losing money. This shift in thinking requires a very different approach to equity investing.

2012-08-28 Permanent Portfolio Shakedown Part 2 by Adam Butler and Mike Philbrick of Butler|Philbrick|Gordillo & Associates

In our Permanent Portfolio Shakedown Part 1 we investigated the history of the approach, tracing it back to Harry Browne in 1982. The company he helped to found, The Permanent Portfolio Family of Funds, has been running their version of the strategy in a mutual fund for almost 30 years, with fairly impressive results. Harry's thoughts about the portfolio are worth repeating in this second installment.

2012-08-27 The Trend is Your Fickle Friend by John Hussman of Hussman Funds

Typically, the best that can be achieved with popular moving-average crossover systems is a moderate reduction in drawdown risk, but zero or negative incremental long-term return versus a buy-and-hold.

2012-08-27 Still No QE3 by Brian Wesbury, Bob Stein of First Trust Advisors

The Federal Reserve is clearly ready to do something. In recently released minutes from the 7/31-8/1 meeting and a letter from Chairman Bernanke to Congressman Darrell Issa (R-CA), the Fed argued that its actions had helped the economy already and that the Fed was ready to do more.

2012-08-27 Inside the Feds Head by Kristina Hooper of Allianz Global Investors

Now more than ever, investors are getting a glimpse into the minds of policy makers. While economic forecasts remain foggy, recent FOMC minutes reveal why the Fed is sharpening its tools and which ones it is likely to use.

2012-08-27 Municipal Finance - Some Positive Signs by Milton Ezrati of Lord Abbett

State and local government finances remain precarious. The degree of trouble varies from place to place, of course, but generally it will take decades for states and cities to put their finances in anything like good order. It is, in fact, a good bet that no middle-aged person today will live to see such an event.

2012-08-27 Copeland White Paper I: Dividends and Tax Rates by David McGonigle of Copeland Capital Management

As it stands today, barring a political compromise, the highest tax rate payable on dividends will jump from 15.0% to 43.4% for the 2013 tax year. That sets up two important questions for investors in dividend-oriented strategies.

2012-08-27 Janitor's Job by Jeffrey Saut of Raymond James

Peter Drucker was a writer, consultant, and teacher who was deemed the father of modern management theory. His groundbreaking work turned management theory into a serious discipline, and he influenced or created nearly every facet of its application. He coined such terms as the "knowledge worker," which plays to the intangible capital theme often discussed in these missives.

2012-08-27 Letter From Fed Camp by Scott Brown of Raymond James

The minutes of the July 31/August 1 Federal Open Market Committee provided clear insight into the Fed's policy debate. At that meeting "many" FOMC members felt that "additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery."

2012-08-27 U.S. Real Estate Securities: Review and Outlook by Jon Cheigh, Thomas Bohjalian of Cohen & Steers

We would like to share with you our review and outlook for the U.S. real estate securities market as of July 31, 2012. The FTSE NAREIT Equity REIT Index had a total return of 2.0% for the month, compared with a 1.4% return for the S&P 500 Index. Year to date, the indexes returned 17.2% and 11.0%, respectively.

2012-08-27 European Real Estate Securities: Review and Outlook by Rogier Quirijns, Gerios Rovers of Cohen & Steers

We would like to share with you our review and outlook for the European real estate securities market as of July 31, 2012. For the month, the FTSE EPRA/NAREIT Developed Europe Real Estate Index had a total return of 3.9% (in U.S. dollars, net of dividend withholding taxes). By comparison, U.S. REITs had a total return of 2.0%, as measured by the FTSE NAREIT Equity REIT Index. Year to date, the indexes had total returns of 14.0% and 17.2%, respectively.

2012-08-27 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

For many weeks, I have received feedback from readers of my commentary that I am "too negative," "too pessimistic" in my views about the markets. While it is true that my objective quantitative science leaves little room for interpretation, let me dispel the notion that it is I, not my data, that is contemptuous of the "next move."

2012-08-27 And That's the Week That Was by Ron Brounes of Brounes & Associates

When Ben Bernanke talks...investors listen, Republican moans, Romney belittles, and markets react. For now, the jury is still out about any upcoming stimulus move as the policymakers appear far from consensus. Housing continued its rebounding ways, though manufacturing again raised concerns. Europe still appears to be in disarray as Greece takes direction (and a scolding) from its stronger brethren. Stocks ended their nice winning streak, though closed the week on a high note.

2012-08-27 FPA Crescent: Steve Romick's Semi-Annual Report by Steven Romick of FPA Fund

FPA Crescent Fund has released its Semi-Annual report on the state of the fund and its investments. The piece also delves into portfolio manager Steve Romick's market outlook and thoughts regarding the fund's positioning moving forward.

2012-08-25 Boomers are Breaking the Deal by John Mauldin of Millennium Wave

We look at the trends in employment as well as take note of a signpost we passed on the way to finding out that we cant pay for all the future entitlements we have been promised.

2012-08-24 Is a Japan-Style "Lost Decade" Ahead for the US? by Sharon Fay of AllianceBernstein

The laborious pace of the US recovery has inevitably fostered comparisons with Japan. But we find several reasons why a protracted slump like Japan's is unlikely, as my colleague Gerry Paul argues. After five years of tepid growth, investors can be forgiven for wondering if the US is headed for a decades-long slump like Japan's.

2012-08-24 Large Cap Value: Review and Outlook by Richard Helm of Cohen & Steers

We would like to share with you our review and outlook for the U.S. large cap value market as of July 31, 2012. For the month, the Russell 1000 Value Index had a total return of 1.0%, compared with a total return of 1.4% for the S&P 500 Index.

2012-08-24 Preferred Securities: Review and Outlook by William Scapell, Elaine Zaharis-Nikas of Cohen & Steers

We would like to share with you our review and outlook for the preferred securities market as of July 31, 2012. For the month, the BofA Merrill Lynch Fixed Rate Preferred Index had a total return of 1.7% and the BofA Merrill Lynch Capital Securities Index returned 2.9%. Year to date, the indexes had total returns of 11.1% and 12.7%, respectively.

2012-08-24 Three Generations on One Fast Train by Franois Sicart of Tocqueville Asset Management

In his latest commentary on China, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, writes about the overall complexity of China and the vastly different attitudes and life experiences of the last three generations of its population, as well as some of the challenges facing the country and its economy today.

2012-08-24 A Case for Long-Term Equity Investing by Ric Dillon, Chris Welch, Chris Bingaman of Diamond Hill Investments

The past five years have been difficult for equity market investors and especially for active money managers. Despite recent results, we believe that the next five years will be advantageous for equity investors and for our intrinsic value focused investment philosophy and process.

2012-08-24 Economic Data Continues to Refute ECRI's Recession Call by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose slightly to 123.3 from last week's 123.0 (an upward revision from 122.8). See the WLI chart below. The WLI growth indicator (WLIg) is at -0.1, less negative than the -0.4 for last week, which is an upward revision from the previously reported -0.6.

2012-08-24 Economist Expectations for GDP and Unemployment Out to Q1 2014 by Team of Bespoke Investment Group

Economist Expectations for GDP and Unemployment Out to Q1 2014.

2012-08-24 Emerging Markets Real Estate Securities: Review & Outlook by Jason Yablon of Cohen & Steers

We would like to share with you our review and outlook for emerging markets real estate securities as of July 31, 2012. For the month, the FTSE EPRA/NAREIT Emerging Real Estate Index had a total return of 2.2% in U.S. dollars (net of dividend withholding taxes), compared with 3.6% for the FTSE EPRA/NAREIT Developed Real Estate Index (net), a broad measure of the global real estate securities market. Year to date, the indexes returned 19.0% and 18.9%, respectively.

2012-08-24 Gold: First Mover Advantage by Frank Holmes of U.S. Global Investors

This week, gold bugs were rewarded with the long-awaited positive momentum in the yellow metal, and on Friday, bullion rose to about $1,670. After falling below the 200-day moving average, gold had been stuck in quicksand for several months. With the jumps in the price this week, bullion swiftly rose above this critically important long-term moving average.

2012-08-24 Taking Stock of Corporate Earnings by Team of Neuberger Berman

The corporate earnings season for the second quarter of 2012 has just about ended. Investors entered this period with much apprehension as the global economic slowdown set expectations for disappointing earnings. However, U.S. numbers surprised on the upside, contributing to a rally in equity markets worldwide. Given the importance of the corporate sector to the current economic recovery, we take a deeper look at recent earnings data to highlight important trends.

2012-08-23 Early Retirement for the Eurozone? by Nouriel Roubini of Project Syndicate

Germany and the ECB are now relying on the hope that large-scale liquidity will buy time to allow the adjustments needed to restore growth and debt sustainability in the eurozone periphery. But, if a eurozone breakup can only be postponed, delaying the inevitable would merely make the endgame worse much worse.

2012-08-23 The Emerging Story in Europe by Mark Mobius of Franklin Templeton

There's a unique and often overlooked story coming out of some of Europe's emerging markets that interests me more. While much of developed Europe is still struggling to get its fiscal house in order, much of emerging Europe already has. Some of the emerging markets in Europe deserve to be a greater part of the European story, and in my view, can offer compelling investment opportunities at attractive valuations.

2012-08-23 No Recession Now - But When? by Lance Roberts of Streettalk Live

There have been a few calls as of late (Hussman, ECRI, Shilling) stating that we are currently in the next recession. Then there is everyone else. While the "optimistic" outlook is always more enjoyable to listen to - the problem is that the current "no recession" view is primarily predicated on current quarter growth rates looked at in isolation. These data points are then extrapolated into continuous future economic expansion.

2012-08-23 Setting Up for Jackson Hole by Carl Tannenbaum of Northern Trust

I was once favored with an invitation to the Federal Reserve's annual retreat in Jackson Hole, Wyoming. It was an amazing experience; the participant list was a Who's Who of global economic policy makers. I called my mother to brag, but all she wanted to talk about was the mischief that she and my father had gotten into while honeymooning in the area some fifty years earlier. Too much information.

2012-08-23 'Japanification' by Scott Mather, Dirk Jeschke of PIMCO

The same dark forces that Japan has been battling could continue to infect the developed world. During Japan's banking crisis deflationary expectations became embedded in the economy early on, preventing real short-term rates from remaining negative and thereby clogging monetary transmission. One of the chief explanations for the outbreak of deflation in Japan was the difference in the structure of the labor market.

2012-08-23 Reading the Right Tea Leaves to Gauge Market Volatility by Daniel Morillo of iShares Blog

Market volatility has come to be associated with short-term events, like the Lehman Brothers bankruptcy or the downgrade of US debt. But Daniel Morillo explains why investors should keep an eye on broad macroeconomic prospects and not the latest breaking news headline to gauge where market volatility is headed for the longer term.

2012-08-23 The Growth Factor by John Barr, Chris Retzler of Needham Funds

During July, the domestic economy continued to slow and Europe again appeared on the precipice of disaster. On August 3rd, the July employment report showed unemployment at 8.3%, essentially unchanged from June. We believe the real story is that the civilian labor force participation rate has fallen to 63.7%, which is down from a peak of 67.3% in 2000.

2012-08-23 Global Real Estate Securities: Review and Outlook by Jon Cheigh, Chip McKinley of Cohen & Steers

We would like to share with you our review and outlook for the global real estate securities market as of July 31, 2012. The FTSE EPRA/NAREIT Developed Real Estate Index had a total return of 3.6% for the month (net of dividend withholding taxes) in U.S. dollars. Year to date, the index returned 18.9%.

2012-08-23 Global Listed Infrastructure: Review and Outlook by Robert Becker, Benjamin Morton of Cohen & Steers

We would like to share with you our review of the global infrastructure securities market as of July 31, 2012. For the month, the UBS Global 50/50 Infrastructure & Utilities Index had a total return of 0.5% (net of dividend withholding taxes). Year to date, the index had a return of 5.0%.

2012-08-22 What Will it Take for the Rally to Continue? by Bob Doll of BlackRock Investment Management

One of the factors underlying the upturn in stock prices over the past couple of months has been a modestly improving trend in US economic data. Last week, retail sales advanced 0.8%, well ahead of expectations. This was the first increase in four months, which suggests that while households remain generally cautious, spending levels are beginning to tick higher.

2012-08-22 Dividends Provide A Return Bonus by Team of F.A.S.T. Graphs

With all things being equal, dividend paying common stocks provide their shareholders a return bonus, or what some might like to call a kicker, over an equivalent common stock that pays no dividend. Many investors do not see it this way, as they tend to think of the dividend providing them their return. However, the stock market capitalizes earnings whether a company pays a dividend or not.

2012-08-22 5 Counterintuitive Reasons Why the Investment Vehicle of the the Decade is ... Stocks by Rob Isbitts of Sungarden Investment Research

These days there are more varieties and combinations of investments than selections on a Starbucks menu -- but that's not necessarily a good thing. Now, you can invest in emerging markets, dividend-paying stocks, bonds from Africa and commodities that only farmers and professional speculators used to traffic in. Heck, clients can even tell an advisor they would like a double-long, midcap equity ETF.

2012-08-22 The Bullish Case for Energy Stocks by Russ Koesterich of iShares Blog

Lower crude oil inventories and less spare capacity among OPEC oil producers are just two of many reasons why I continue to be bullish on energy and energy stocks over the long term. As I've been writing about for months, oil supply remains tight by historical standards. Among the reasons I gave in a post early this summer, I expect crude prices to rebound in the long term...

2012-08-22 Reflections: Frenzy and Illusion by John Gilbert of GR-NEAM

The insolvency of Lehman Brothers was a fault line in financial history. The failure of the U.S. government to act as lender of last resort in Lehmans insolvency was a deflationary shock unlike anything in decades. Now, in Europe, there is a growing risk of a second large deflationary shock in just five years, if Germany were to disavow contingent liability for deeper Eurozone union. The result is that there is a developing craze for safety underway.

2012-08-22 R-E-S-P-E-C-T by Jerry Wagner of Flexible Plan Investments

With 18 Grammys, the Queen of Soul, Detroiter Aretha Franklin has certainly earned the respect of millions over a fifty-year career in show business. Conversely, despite six advancing weeks in a row, the latest bull rally just can't get any of that R-E-S-P-E-C-T.

2012-08-22 The Faustian Bargain by Scott Minerd of Guggenheim Partners

In Goethe's 1831 drama Faust, the devil persuades a bankrupt emperor to print and spend vast quantities of paper money as a short-term fix for his country's fiscal problems. As a consequence, the empire ultimately unravels and descends into chaos. Today, governments that have relied upon quantitative easing (QE) instead of undertaking necessary structural reforms have arguably entered into the grandest Faustian bargain in financial history.

2012-08-21 The Profession's Faulty Assumptions: A Top Ten List by Bob Veres (Article)

In the financial planning profession, we make a lot of assumptions about the world in order to run spreadsheet models, retirement projections and sufficiency analyses, and generally determine how much a client should save and invest for the future. But many of the industry-standard inputs into our models are (how can I say this delicately?) garbage. Here are my top ten garbage inputs, with an explanation of how we might possibly improve on them.

2012-08-21 Hype and Reality in the Muni Bond Market by Hildy Richelson (Article)

Meredith Whitney's prediction last year of billions of dollars in municipal bond defaults stirred investors' fears. Earlier this summer, bankruptcies in three California cities reignited them, and last week a Federal Reserve study revealed that muni bonds have defaulted at a higher rate than previously reported. But no crisis has befallen the municipal bond market, and it is highly unlikely that one ever will.

2012-08-21 Is Too Much Vacation Bad for Your Business? by Dan Richards (Article)

Advisors face two big traps when it comes to vacations. The one that gets the most attention is not taking enough time off and burning out as a result; this is especially common in the early years of building a business. But there's a second, more subtle trap: Taking so much vacation that you compromise your ability to grow your business.

2012-08-21 Dealing with Gossip in a Small Firm by Beverly Flaxington (Article)

Is gossip bad in a small firm, or can it be useful? I like to have employees tell me what's going on in our eight-person advisory firm. For me, it's where I get my best information about what's really going on. Is there a better way for me to manage? I don't want to be destructive but I don't want to cut off my best sources of information.

2012-08-21 The Persistence of Profits: The Quality Conundrum, Part I by Matt Malgari of Knight Capital

As avid consumers of a wide variety of investment material, we have to admit that certain firms have demonstrated such proficiency at lucid commentary they have become in-house favorites. In some cases, the writing has such a profound impact that we find ourselves entangled in visceral debates post publication, vexing our wonderful programmers with follow-up questions seeking further clarification or insight. In our opinion, Grantham Mayo (GMO) is one of these firms.

2012-08-21 Is Now the Time to Take Stock in Europe? by Norm Boersma of Franklin Templeton

Being a value manager in the equity space this year hasn't been an easy job. When investors are focused on capital preservation and risk is said to be "off" the table, the value proposition can certainly require some conviction. Templeton Equity Group CIO Norm Boersma knows that when certain sectors are out of favor, that's often when the best opportunities surface. To position for a time when risk is back "on," he is embracing the low market valuations present in Europe and elsewhere.

2012-08-21 Anniversary Weaks by Christian Thwaites of Sentinel Investments

A couple of anniversaries last week: five years since the start of the credit crunch and one year since the US downgrade. The ramifications of both are still evident daily, of course. We're still living the consequences. So this is as good a time as any to take stock.

2012-08-21 Inflation Subdued, But Will It Last? by Chris Maxey of Fortigent

As the economy continues to grind along at a sub-optimal rate of growth, many pundits are calling for additional quantitative easing measures from the Federal Reserve. Recent inflation data keeps the door open for further easing, but pockets of higher prices exist, keeping the Fed at bay.

2012-08-21 Young Americans: The Death of Equities May be Exaggerated by Liz Ann Sonders of Charles Schwab

PIMCO founder Bill Gross believes the "cult of equity is dying" let me take the other side. Mutual-fund flows suggest that we may have lost a generation of investors. However, demographics suggest there may be another generation that could be the stock market's savior.

2012-08-21 Permanent Portfolio Shakedown Part 1 by Adam Butler, Mike Philbrick of Butler|Philbrick|Gordillo & Associates

The Permanent Portfolio is an asset allocation concept first introduced by Harry Browne in 1982. The Permanent Portfolio Family of Funds website has this to say about the strategy, which they have been running in mutual fund format for about 20 years.

2012-08-21 U.S. Equities After the Earnings Season: Is There Still an Opportunity? by Joseph Tanious of J.P. Morgan Funds

Now in its fourth year of recovery following the financial crisis, the S&P 500 is once again testing the 1400 level, having rallied over 100% from its March 2009 lows. Meanwhile, earnings have hit an all-time high, but it is becoming clear that earnings growth is slowing. All of this has occurred against a backdrop of global economic uncertainty, unprecedented central bank action, and the most polarized U.S. political landscape we have ever seen.

2012-08-20 The Outlook for Inflation and Fed Policy by Scott Brown of Raymond James

The odds of further accommodation from the Federal Reserve have decreased significantly in the last few weeks, as the level of fear has diminished. The financial markets now expect most of the fiscal cliff to be avoided. In Europe, leaders will still have to act against the region's crisis, but theyve also continued to express a strong resolve "to do whatever it takes" to keep the eurozone intact. Perhaps more importantly, U.S. economic data reports have generally improved.

2012-08-20 QE3: Tackling the Big Questions by Milton Ezrati of Lord Abbett

Will the Fed launch another round of quantitative easing? If so, when? Here are the factors that could influence the central bank's decision.

2012-08-20 And That's the Week That Was by Ron Brounes of Brounes & Associates

Once upon a time, Facebook and Groupon were prospective Wall Street darlings. Now both they are pushing all-time lows with analysts questioning their overall revenue models. For now, they are in the minority, as some decent earnings numbers and economic data brought back the "bulls" (at least those who arent on vacation) and sent the major indexes higher (again). Europe still has plenty of issues; the jury is still out on the Fed's next moves; and the campaign season is heating up.

2012-08-20 The Basis For Fear by Charles Lieberman of Advisors Capital Management

Last week, I wrote about how stocks are cheap historically and also with respect to other asset classes, such as bonds. This week, I want to focus on the reasons for this. Stocks are not cheap by accident. Investor concerns over Europe, renewed recession in the U.S., the fiscal cliff and the huge budget deficits provide ample reason for caution. However, not all of these concerns are well placed and some of the issues can be resolved favorably.

2012-08-20 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stock prices have been supported by strong profits permitting buybacks and rising dividends as well as the absence of negative news from Europe. In fact, with all the leaders there taking vacations it has allowed rumors and leaks of possible steps, which have produced lower borrowing costs in Spain and Italy. This has allowed for a reflex rally there that has served as a catalyst for the continued rally in our domestic markets.

2012-08-20 Eaton Corp: Stock Research Analysis by Team of F.A.S.T. Graphs

We believe Eaton Corp (ETN) currently represents an above-average dividend yield opportunity. The company can be purchased at a discount to its earnings justified fair value, and offers a dividend yield of over 3.3% (light blue highlighting). We recommend doing your own due diligence, but Eaton Corp looks like a classic buy low today to sell later at a higher value with a nice yield to sweeten the pot.

2012-08-17 Evaluating the Wisdom of Buying Gold by Frank Holmes of U.S. Global Investors

At the end of January 2008, I posted a discussion about how the book The Wisdom of Crowds by James Surowiecki could explain gold's price climb. The book's premise was basically that "large groups of people are smarter than an elite few." Even before the height of the global crisis, there was a "wise crowd" of investors who had been buying gold as a safe haven from currency risks and the trillions of dollars invested in derivatives, and as a way to recycle petrodollars.

2012-08-17 Disconnected Markets Confound Investors by John Browne of Euro Pacific Capital

The current environment for investors is perhaps one of the most confusing that many have ever encountered. Unpredictable markets now appear to take no clue whatsoever from underlying economic data, and maxims long cherished by traditional money managers are being abandoned in favor of seemingly illogical choices. While such an environment is enough to encourage many to cash out completely, we believe that investors should remain focused on the fundamentals.

2012-08-17 Fiscal Cliffhanger by Brian Horrigan of Loomis Sayles

In the famous 1955 movie Rebel Without a Cause, troubled high school student Jim Stark (played by James Dean) winds up playing a game of chicken with his classmates. The US economy is at risk of driving, so to speak, over a "fiscal cliff" starting January 1, 2013, an event that threatens to wreck the economy. There are fewer than five months to avoid going over this cliff.

2012-08-17 My (Government-subsidized) China Vacation by Christian Halvorsen of Matthews Asia

As part of my month-long stay in mainland China and Hong Kong, my wife, three daughters and I embarked on a five-day tour of Shanghai, Hangzhou, Nanjing, Suzhou and Wuxi. This part of our trip, which was partially subsidized by the Chinese government, included three meals a day and stays at luxury hotels. The price tag? An amazingly low US$49 per person.

2012-08-17 Press Play by Liam Molloy, Bethany Carlson of Galway Investment Strategy

The Treasury has doled out approximately $10.5 billion on excess bank reserves over the last four years. The emergency Fed policy of paying 25 basis points on excess reserves was enacted on October 6, 2008 to incentivize banks to hold them in the midst of the financial crisis. It worked. But the policy also introduced another headwind to velocity of money.

2012-08-17 ECRI Weekly Leading Index Continues to Undermine ECRI's Recession Call by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index of the Economic Cycle Research Institute rose slightly to 122.8 from last week's 122.5. See the WLI chart below. The WLI growth indicator is at -0.6, less negative than the -1.1 for last week, which is an upward revision from the previously reported -1.3. As of today, the ECRI website continues to feature Lakshman Achuthan's July 10th Bloomberg TV interview, in which he reaffirmed his company's recession call and stated that we're already in a recession.

2012-08-17 Republicans Hope, but Don't Change by Peter Schiff of Euro Pacific Capital

While I appreciate that Ryan has the courage to take a position at the vanguard of his party in the campaign for fiscal responsibility, the modesty of his plan is just the latest reminder of how utterly divorced from reality Washington politicians remain. Like all of his brethren, Ryan is pinning his budget battling plans on the pain free "grow your way out of it plan." But as long the government consumes so much of the nation's productivity, the conditions to create that growth will never occur. Hope is not a strategy.

2012-08-16 The ECB Is Too Tight Absolutely and Relatively by Scott Mather, Dirk Jeschke of PIMCO

Looking at measures of the quantity of money and its transmission into the real economy reveals that ECB policy is quite tight. Growth hardly stands a chance under this scenario. Relatively tight monetary policy would perhaps be understandable if the eurozone were threatened by inflation. However, inflation is low and falling in the Eurozone. The ECB may be playing a game of chicken with European policymakers. If true, this is a dangerous strategy.

2012-08-16 Markets Holding Up Despite Volatility by Ken Taubes of Pioneer Investments

Despite a steady stream of negative headlines and high volatility, markets are holding up pretty well. The broadest measure of the stock market, the S&P 500 Index, is up nearly 13% year-todate through today, August 13, 2012. The NASDAQ is up almost 17%. High yield bonds are up almost 9.7% while investment grade corporate bonds have gained over 7%. Even Europe has managed 7.5%, as measured by the FTSE Eurofirst 300 Index in dollar terms.

2012-08-16 What Works in Tough Equity Markets? by Sharon Fay of AllianceBernstein

During the market crisis of 20082011, traditional equity style strategies such as value and growth underperformed the markets, often by wide margins. But our research shows that there was a way to diminish the negative impact of market turmoil on portfolio returns. In a recent study, we found that in volatile markets, stocks performed relatively well if they had at least one of the following characteristics.

2012-08-16 The Chinese Hangover: As Infrastructure Spending Drops, So Does Demand for Chinese Steel by Raja Mukherji of PIMCO

The Chinese steel industry today shows many signs of serious economic difficulties brought about by the unprecedented size and speed of industry expansion. However, as the country's focus shifts away from public investments and toward tax cuts, it will be difficult for China to absorb this overabundance of domestically produced steel. Ripple effects of this oversupply may include softening iron ore prices, a possible drop in the Australian dollar, and potentially weaker global steel prices.

2012-08-16 Monthly Investment Bulletin by Team of Bedlam Asset Management

A good month: a gross increase of 3.13%, over twice the index at .49%. Opinion polls the morning after the opening ceremony for the London Olympic Games estimated that 2.5% of the television audience (or 30m viewers) actually believed that the Queen and James Bond parachuted into the Olympic arena. Even if true (the poll was tiny and perhaps respondents had a better sense of irony), such gullibility is understandable on live TV. But naivety in financial markets is unforgivable.

2012-08-16 Searching for a Fiscal Ladder by David Kelly of J.P. Morgan Funds

As America begins to cool down after a long hot summer, the economy remains sluggish. Economic growth in the first half of the year is estimated to be less than 2%, reflecting continued business and consumer caution, tight lending standards and a shrinking government sector. This pace of growth, in turn, has produced a monthly average of just over 100,000 new jobs since February, leaving the unemployment rate marooned above 8%. For investors, however, the picture is not that bad.

2012-08-15 Going for Gold: Lessons from London by Colin Moore of Columbia Management

Fiercely competitive professional athletes were able to join together for a common purpose of achieving gold for the U.S. Small teenagers were prepared to sacrifice family life to win gold for the U.S. If only our politicians could find a way to set aside traditional rivalries and find a team plan to reduce our debt and spur higher levels of growth on a equitable basis. Unfortunately, the opposite is occurring.

2012-08-15 Preparing Portfolios for Inflation by Ronit Walny, Kevin Winters of PIMCO

Although disinflation has seemed the more likely scenario in recent years, PIMCO expects inflation to accelerate from recent levels over the next three to five years, but double-digit rates are unlikely. An understanding of the constituents of the Consumer Price Index can help us design portfolios that seek to better defend against inflation. The core building blocks of such portfolios are commodities, Real Estate Investment Trusts and Treasury Inflation-Protected Securities.

2012-08-15 Early Retirement for the Eurozone? by Nouriel Roubini of Project Syndicate

Whether the eurozone is viable or not remains an open question. But what if a breakup can only be postponed, not avoided? If so, delaying the inevitable would merely make the endgame worse much worse.

2012-08-15 ProVise Bullets by Ray Ferrara of ProVise Management Group

There are bears out there who are extremely disappointed that the U.S. has not entered another recession over the past three plus years. Certainly, the 18 months of downturn in the markets that began in October of 2007 and culminated in March 2009 gave them a lot to cheer about. But, since then, they have looked everywhere possible to come up with bad news.

2012-08-15 De, In, or Stag?" by Scotty George of du Pasquier Asset Management

So far, key data has been unable to answer conclusively whether we are in deflation, stagflation, or targeted inflation. I wrote several weeks ago that I saw no empirical statistics indicating inflation. I was partly right...and partly wrong. Indeed, I had been early in identifying targeted inflation in tuition, foodstuffs, energy and healthcare. These demographic price hikes are systemic, and mostly driven by consumer demand or ecological/climatological influences.

2012-08-14 An Imperfect Storm by Janus (Article)

Changing regulations have drained liquidity from the corporate bond markets, as growth in bond ETFs is distorting a shrinking market. These converging forces are likely to result in a more volatile environment, but we see opportunity for managers able to understand the fundamental risk and reward.

2012-08-14 Blind Faith by Michael Lewitt (Article)

Central banks are facing political and practical obstacles that will render it very difficult for them to deliver anything more than anodyne words and actions as summer moves into the always dangerous August holiday season. IPhones should be kept on alert at the beach through Labor Day.

2012-08-14 This Is What Bull Markets Are All About by Richard Bernstein of Richard Bernstein Advisors

Investors have the impression that bull markets are days of wines and roses. However, nothing could be farther from the truth. Bull markets are periods of fear. This becomes quite obvious when one examines the valuation and sentiment data associated with the 1982, 1990, 1995, and 2003 bull markets.

2012-08-14 China Growth Threatened by the West by Chris Maxey, Ryan Davis of Fortigent

As we head further into the second half of 2012, it is clear that policy from central banks in the US, Europe, and China will drive markets and the global economy. Monetary policy in the US is becoming less impactful, while central bankers in Europe appear unwilling to tackle the enormity of their collective problem. It could be China that provides a sparkplug for second half global growth...

2012-08-14 The Eurozone Drama Continues by Bill O'Grady of Confluence Investment Management

In this report, we will review the political and economic structure of the Eurozone. From there, we will discuss the critical event that caused the reversal in safety assets and what this reversal likely means for the geopolitics of the Eurozone. As always, we will conclude with potential market ramifications.

2012-08-14 Careful With That Beehive, Eugene by Christian Thwaites of Sentinel Investments

When you move a beehive, you must move it more than three miles or not less than three feet. Anything else confuses the bees. Markets can be the same. And that's why President Draghi's comments reverberate still after two weeks. No one seems to understand what he meant.

2012-08-14 Oil: Does Supply and Demand Matter? by Bill Smead of Smead Capital Management

We believe the long-term demand for oil will be greatly influenced by where the world gets its best future growth. As the chart below shows, the US has cut by 50% the amount of energy which is required to generate each dollar of Real Gross Domestic Product (GDP).

2012-08-14 India: Good Growth, Bad Growth by Sunil Asnani of Matthews Asia

It goes without saying that areas of growth attract investors. But in a blind chase for growth, it is easy to forget that only growth accompanied by economic profits creates value. This month Sunil Asnani takes a look at some of the once-celebrated, top-down investment ideas that did not live up to expectations, comparing them to some less exciting ideas that actually did deliver.

2012-08-13 Which Way Will the Pendulum Swing for Gold? by Frank Holmes of U.S. Global Investors

One of the most fascinating aspects when watching a sporting event like the Olympics is the historical statistics highlighting the tremendous advances in athleticism over the years. In the spirit of the events this summer, BTN Research compared gold's advancement from the beginning of the games in Beijing to the London Olympics.

2012-08-13 Begging for Trouble by John Hussman of Hussman Funds

Investors remain so addicted to the temporary high of monetary intervention that they are practically begging to be shot, mauled by dogs, and diced by a Veg-O-Matic so they can get their next fix of pain-killers.

2012-08-13 Driving with the Doors Off by Doug MacKay, Bill Hoover of Broadleaf Partners

Two months ago I bought a bulldozer-yellow Jeep Wrangler, replacing my eight year old black Audi A6. While the A6 had been a wonderful car, I was ready for something new and a Jeep fit the bill. Driving with the doors off was a lot of fun, but certainly a different feeling than I was used to experiencing. The stock market over the last two months and perhaps even last three summers has been a lot like that, different, but ultimately rewarding.

2012-08-13 Double Dip? Doubtful by Milton Ezrati of Lord Abbett

The flow of economic news is hardly encouraging. Jobs growth remains disappointing. Recent readings on consumer spending and business activity show weakness as well. If the picture of the housing market has improved a bit, it still hardly portrays strength. Talk of an imminent recessionary dip has become common, for the third time now in as many years. While some recent economic reports have been discouraging, underlying fundamentals do not point to a return to recession.

2012-08-13 Invest with the Best?! by Jeffrey Saut of Raymond James

I have been a "fan" of the astute Claude Rosenberg ever since hearing him speak. Some will remember him as the author of Investing with the Best, which deals with the daunting task of selecting an investment manager. Given the plethora of investment managers, picking a manager is difficult. That's why many individuals' selection process consists of nothing more than looking at a portfolio manager's track record for the past few years. We think such a simplistic approach is a mistake.

2012-08-13 Commodities to Power Emerging Markets Higher by Dawn Bennett of Bennett Funds

In Latin America, Brazil leads as a natural supplier of copper and crude oil, which it is now able to extract and export on competitive terms. Nations rich with natural resources perform well during times of global economic expansion. In particular, countries rich with industrial commodities tend to outperform those without.

2012-08-13 The Fundamental Case for the 20,000 Dow by Seth Masters of AllianceBernstein

While some people deem stocks expensive relative to 10-year trailing earnings, we take a forward-looking approach. It starts with the premise that the stock market is not a casino and stock prices are not pulled out of thin air: they reflect the intrinsic value of companies' future earnings.

2012-08-13 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The rally in stocks which no one seems to believe in continued again last week. With Europe on vacation or celebrating the Olympic Games the macro background remained quiet and allowed stock prices to advance even as investor pessimism continues to grow.

2012-08-13 Stocks Look Poised for Continued Gains by Bob Doll of BlackRock Investment Management

Although investor attention seems focused on a number of well-known downside risks (including the European debt crisis, hesitant US economic growth and the pending US fiscal cliff), stocks have continued to climb higher and last week notched their fifth consecutive week of gains.

2012-08-11 And Then There Is Disaster C by John Mauldin of Millennium Wave

I have contended for some time that Europe is faced with two choices: Disaster A, which is the break-up of the eurozone, or Disaster B, which is the creation of a fiscal union, which keeps the euro more or less intact. Over the last few months I have come to realize that there is indeed a third option, which now looks increasingly possible. European leaders might do nothing more than deal with the problem immediately in front of them, moving from crisis to crisis in a slow-motion drift toward fiscal union.

2012-08-10 Ross Stores Inc: Stock Research Analysis by Team of F.A.S.T. Graphs

A quick glance at the historical earnings and price correlated FAST Graph on Ross Stores Inc shows a picture of overvaluation based upon the historical earnings growth rate of 19.6% (orange circle) and a current PE of 21.3 (red circle). Another interesting note is that Ross' price follows its Historical PE of 15 rather than following its Operating Earnings Growth Rate of 19.6%.

2012-08-10 Schwab Sector Views: Cautiously Cautious by Brad Sorensen of Charles Schwab

We remain slightly defensive with our sector recommendations but admit that we're a bit concerned over doing so. While we certainly believe this is the appropriate positioning given the continued elevated uncertainty in the market, combined with sluggish economic data, we also acknowledge that some defensive areas appear extended and the possibility of a near-term cyclically-based rally exists.

2012-08-10 ECRI Recession Call: Weekly Leading Index Improves, Growth Index Little Changed by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose slightly to 122.5 from last week's 122.1 (a tiny revision from the previously reported 122.2). See the WLI chart below. At one decimal place, the WLI growth indicator (WLIg) is unchanged at -1.3 as reported in Friday's public release of the data through August 3. At two decimal places, WLIg is slightly less negative at -1.28 compared to last week's -1.35.

2012-08-10 Reports of the Death of Equities Have Been Greatly Exaggerated: Explaining Equity Returns by Ben Inker of GMO

Where do equity returns come from? As questions go, it may not be quite as profound as "Why are we here?" or as embarrassingly baffling to most of us as "Why is the sky blue?", but considering the number of people out there who spend their working lives dealing in the financial markets, it is a question asked less often, and usually answered less well, than it should be.

2012-08-10 2012 2Q Economic - Capital Market Summary by Greg Hahn of Winthrop Capital Management

The single biggest driver for the economy and investment returns is the deleveraging process which we are currently struggling through. Arguably, we have successfully transferred debt from the financial sector to the U.S. government through the Fed's QE programs. As we move through the long process of reducing debt, economic growth inevitably moderates as resources are applied to debt reduction rather than fixed investment and consumption within the economy. As a result, expected returns on financial assets are lower.

2012-08-10 Citius, Altius, Fortius by Carl Tannenbaum of Northern Trust

Countries across the globe seek faster, higher, stronger growth. Central banks in the United States and Europe are both seeking new ways to stimulate economic activity. Recent news from the housing market has been encouraging, but the race to recovery is likely to be a marathon, not a sprint. Headwinds blowing from Europe and China will continue to present significant downside risks to U.S. economic growth.

2012-08-10 Dividend Taxation and Stock Returns by Team of Neuberger Berman

With bond yields declining globally, stocks with high dividends have become increasingly popular as income seekers face a narrowing set of investment choices. The increased demand has caused dividend-paying stocks to outperform broader markets over the past few years, but as the expiration of the Bush tax cuts looms ever larger heading into year-end, investors are concerned that these stocks might grow less attractive. We explore the potential impact of higher taxes on dividend-paying stocks and how investors should be positioned in the months ahead.

2012-08-10 Could Tax Reform Hurt Municipal Bond Prices? by Douglas Peebles of AllianceBernstein

The "Bush tax cuts" are set to expire at the end of this year. At the same time, the annual federal budget deficit is unsustainably high and must be addressed. Of course, strong economic growth would help policymakers fix our budget shortfall, but that doesn't appear to be in the offing. The eventual solution may affect the value of municipal bonds, and that impact could be either positive or negative.

2012-08-10 Dog Days by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

We now appear to be firmly in the dog days of summer. Low volume and little conviction may dominate but investors need to stay vigilant and now is a good time to prepare for the fall. The recent Fed meeting yielded no new action, but policy makers reiterated that they will act if necessary. We are skeptical that more stimulus measures will have a lasting impact. A waiting game has ensued in Europe as investors look for action following hopeful comments from various officials. But despite concerns over corn prices, central banks will continue to ease, helping to support global growth.

2012-08-09 Food Inflation in Context by Team of American Century Investments

The news is full of reports about huge increases in prices for corn, wheat, and soybeans, as a result of a simultaneous, severe drought in many of the world's food-producing regions. Despite the dramatic headlines, the reality for U.S. consumers is that the food inflation they experience is likely to be much more tame. Indeed, the USDA projects a 2-3% increase in prices for fruits and veggies next year, with beef prices expected to rise a bit faster than that.

2012-08-09 Big Lots Inc: Stock Research Analysis by Team of F.A.S.T. Graphs

As a special request of a reader, we are reviewing Big Lots Inc. (BIG) through the lens of FAST Graph with this article. In an instant, the Earnings and Price Correlated graph on Big Lots tells a story of a cyclical company with a rather erratic operating history. We believe this is important information for prospective investors to know.

2012-08-09 Market Surge is Amplified by Low ExpectationsAs Expected by Matt Lloyd of Advisors Asset Management

European fears have subsided a bit as the European Central Bank's (ECB) president continued to offer words of support for a more comprehensive solutionthough he appeared to dampen the statements with concessions about the ECB's ultimate subservient role to the governments.

2012-08-09 Viva Reforma en Mxico by Mark Mobius of Franklin Templeton

Elections come and go, but the real test of a candidate might be whether the promises made on the campaign trail are actually put into place. Enrique Pea Nieto and his Institutional Revolutionary Party (PRI) emerged victorious in Mexico's July 1 presidential election on the promise of reform and the end to old, "undemocratic" ways.

2012-08-09 Reconnaissance: Strategy Notes by Douglas Clark Johnson of Codexa Capital

India's massive power failure was a gift to both investment bankers and asset managers. There will likely be a surge in infrastructure-related financing and investment activity directed at South Asia. We also look at sovereign wealth fund transparency; the UAE funds rank comparatively well. Our allocation guidelines for North Africa focus on Morocco, where we believe we will see sustained gains for both portfolio and direct investors once the European situation stabilizes.

2012-08-09 Pacific Basin Market Overview - July 2012 by Team of Nomura Asset Management Co.

Most equity markets in the Pacific Basin region recovered somewhat in July after a weak second quarter on expectations of further monetary easing and measures by the European Central Bank to forestall a Euro currency crisis. However, when we examine the sector results, it is hard to conclude that the recovery was accompanied by an improvement in sentiment.

2012-08-08 How Hoover Caused the Euro Crisis by Christian Thwaites of Sentinel Investments

There is a Burkean principle that many sorts of change must be regarded with skepticism. In the last few months in Europe we have seen new maxims, new ideas, new commitments, new resolves, lots of new acronyms, yet very little has changed from two years ago when Greece surfaced as the first casualty of the banking/sovereign crisis.

2012-08-08 Cash Flow is King by Pamela Rosenau of HighTower Advisors

In today's yield starved environment, investors continue to seek secure sources of income with the potential for growth. Energy infrastructure master limited partnerships (MLPs) have become increasingly attractive not only for their above average current yield, but for their low risk profile and ability to generate predictable cash flows backed by, in many instances, long-term tariff based contracts.

2012-08-08 Stock Pickers: "Somebody I Used to Know" by Bill Smead of Smead Capital Management

Art has a tendency to express culture. One of today's catchiest songs does a great job of explaining the relationship between institutional/individual investors and US common stock picking. The song captures what has happened since the summer of 1999, when Warren Buffett warned investors about forward stock market returns because of a love affair that institutional and individual investors were having with US large cap stocks.

2012-08-08 CASSH-ing In by Russ Koesterich of iShares Blog

Many of the large, developed markets, including the United States, are mired in excess debt and prolonged deleveraging. Russ believes that some of the smaller developed countries the ones he refers to as the CASSH countries -- are proving more resilient.

2012-08-08 Investing in Innovation by Matthew Moberg of Franklin Templeton

When you think about the rise of the technology sector, the dot.com boom of the 1990sand its dramatic bustprobably comes to mind. Matthew Moberg, portfolio manager for the Franklin DynaTech Fund, sees investing in the technology sector as more than just jumping on the latest fad. He looks for innovative companies that have long-term potential for growth, even if they are not what spring to mind when thinking about technology.

2012-08-08 Emerging Markets Equity Monthly Product Commentary: July 2012 by Team of Thomas White International

Emerging market equities made modest gains during the month of July, as global markets sustained the optimism from the last week of the previous month. Select markets in Asia, such as Indonesia, Korea, and Malaysia, as well as Turkey and South Africa outperformed during the month. Repeated assurances by European policymakers over further policy action helped assuage market concerns about the region's fiscal crisis worsening, though economic data continues to be relatively weak.

2012-08-08 Monthly Product Commentary: International Equity - July 2012 by Team of Thomas White International

International equities made modest gains during the month of July on repeated assurances from European policymakers that they will explore all possible steps to prevent a collapse of the monetary union and arrest further economic decline. Developed markets in Europe's Nordic region and the Asia Pacific, excluding Japan, as well as select emerging markets in Asia ended with healthy gains for the month.

2012-08-08 ECB Policy: Over-Promise and Under-Deliver, Investor Behavior: Over-Anticipate and Over-React by Colin Moore of Columbia Management

Last week was a good example. Investors anticipated a major announcement from Mario Draghi, President of the ECB on Thursday because of remarks he had made the previous week at a conference in London. When he did not announce any immediate monetary policy changes following the regular meeting of the ECB, the markets demonstrated considerable volatility, declining on Thursday and rising on Friday.

2012-08-07 Robert Shiller on the Social Benefits of Finance by Laurence B. Siegel (Article)

It's a bad sign for the finance industry that one of its leading minds - the distinguished Yale economist Robert Shiller - has felt compelled to write a book in order to defend the idea that finance itself is a constructive pursuit, worthwhile to modern society. Have things really gotten that bad?

2012-08-07 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Last week gave us quite a bit of information, but on balance the stock markets did not seem fazed one way or the other. Disappointment at a lack of policy initiative from the world's Central Bankers was offset by an employment report, which was very confusing at best, but certainly did not indicate a meltdown in the economy.

2012-08-07 Investing in Central Utility Stocks - Do Todays Valuations Make Sense? Part 3 by Team of F.A.S.T. Graphs

This is the third in my series on investing in utility stocks based on the sector's current valuation levels. The series was initially inspired by concerns that utility stocks may be overvalued because they had recently performed very well. When the series first started with Part 1, utility ETFs were showing the best one-year performance of any sector. By the second installment Part 2, the utility sector had fallen into second place (Utility Sector Performance July 31, 2012).

2012-08-07 Lose The Swimmies! by Dan Morris of Morris Capital Advisors

As the end of June and the July 4th holiday approached much of our nation was gripped in an oppressive heat wave. Most people sought some respite from the weather at the pool, the lake, or the beach. For us, it was the pool, and it was crowded, with adults wishing for some quiet space, teenagers splashing and creating a commotion, and the young ones in their swimmies. I even saw one youngster, with a overprotective parent or nanny, using a flotation ring and swimmies.

2012-08-07 Promises, Promises by John Browne of Euro Pacific Capital

In the last week of July, ECB President Mario Draghi attracted investor interest worldwide by saying that he would do "whatever it takes" to solve the Eurozone crisis and, in the process, save the euro. Given the record of Central bankers for encouraging hopes that invariably have proved fruitless, it was surprising how international financial markets appeared to be taken for yet another ride.

2012-08-07 Mixed Signals Color Downgrade Anniversary by Kristina Hooper of Allianz Global Investors

Two trouble spots for the economy, the job market and housing, generated some good vibes amid gloom over no action from central banks and manufacturing weakness. Unfortunately, it wasnt enough to push the stock market into positive territory for the week. But looking through a longer-term lens, stocks have been resilient since last year's debt-ceiling drama and Standard & Poors downgrade of U.S. debt.

2012-08-07 All That and Nothing To See by Christian Thwaites of Sentinel Investments

The ECB learned a tough media lesson last week. If you say, as Mr. Draghi did in a pre-Olympic euphoria, that you will do "whatever it takes to preserve the euro" then markets will take you at your word.

2012-08-07 A Plane on the Tarmac by David Kelly of JP Morgan Funds

A few weeks ago, I was sitting in a plane on the tarmac at La Guardia. We had pulled away from the gate, but the pilot had just come over in the intercom to let us know that we were number 35 in line for takeoff. Since we were going nowhere fast, I took out my laptop and tried to think of an analogy to describe the current state of the American economy. Then I realized that I was sitting in one.

2012-08-06 Family Dollar Stores Stock Research Analysis by Team of F.A.S.T. Graphs

A quick glance at the historical earnings and price correlated FAST Graph on Family Dollar Stores (FDO) shows a picture of overvaluation based upon the historical earnings growth rate of 15.2%. Analysts are expecting the earnings growth to continue at about 15%, and when you look at the forecasting graph the stock appears overvalued, (it's at the top of the value corridor of the five orange lines - based on future growth).

2012-08-06 And That's The Week That Was by Ron Brounes of Brounes & Associates

Action speaks louder than words. While the positive rhetoric coming from the mouths of center bankers brought optimism to the markets, their actions (or lack thereof) sent the indexes into a four day losing streak. Only a strong non-farm payroll release late in the week salvaged the market and a solid rebound left the major indexes in positive territory for the week (though the eternal pessimists believed the data was an aberration). Maybe Bernanke has more words of wisdom for them?

2012-08-06 From Resource Curse to Blessing by Joseph Stiglitz of Project Syndicate

New discoveries of natural resources in several African countries including Ghana, Uganda, Tanzania, and Mozambique raise an important question: Will these windfalls be a blessing that brings prosperity and hope, or a political and economic curse, as has been the case in so many countries?

2012-08-06 Japan's Tax Hike Could Prove Costly by Milton Ezrati of Lord Abbett

Japan has been here before, and the outcome was far from pleasant. Yet it seems the wheels are in motion. The country will double its national sales tax, from 5% to 10%. Justified as a way to help the country deal with its precarious fiscal situation, the move has raised serious concerns. This kind of a tax hike, applied for much the same reason, has been widely blamed for the country's destructive late-1990s' recession.

2012-08-06 Global Overview: July 2012 by Team of Thomas White International

Global equity prices made modest gains in July, helped by strong gains in the developed markets in Europe's Nordic region as well as in the Asia Pacific, excluding Japan. Most major emerging markets in Asia also saw price gains during the month, while Spain, Italy, and select other markets in Europe lost further ground. U.S. GDP growth for the second quarter declined below the previous quarter's pace, but was marginally ahead of expectations.

2012-08-06 Why the Long Face? by Brian Wesbury, Bob Stein of First Trust Advisors

Back in early 2009, the University of Chicago Booth School of Business and the Northwestern University Kellogg School of Business teamed up to create the Financial Trust Index. The latest readings from July 2012 show that just 21% of Americans trust the financial system and only 15% trust the stock market. For many, this negativity is understandable.

2012-08-06 Note to Bond King: Check Your Math by Seth Masters of AllianceBernstein

The Wall Street Journal published an article on August 1 headlined: "Bill Gross: Equities are Dead." In fairness to Gross, what he actually wrote in his August "Investment Outlook" was, "the cult of equities is dying." We agree with most of Gross's argumentbut not with his unsupported forecast of extremely low stock returns. Let's take a look at Gross's claims...

2012-08-06 Job Outlook: Not Great, But Not Terrible by Scott Brown of Raymond James

Nonfarm payrolls rose more than expected in July, reducing fears that the economy may be headed back into recession. One shouldn't put too much weight on any one particular month, especially July. However, the figures are consistent with the broad range of data suggesting moderate growth over the near term - not especially strong, but not terribly weak either.

2012-08-06 TJX Companies Inc Stock Research Analysis by Team of F.A.S.T. Graphs

A quick glance at the historical earnings and price correlated FAST Graph on TJX Companies shows a slight picture of overvaluation based upon the historical earnings growth rate of 18.6% (orange circle) and a current PE of 20.4 (blue circle). Analysts are forecasting the earnings growth to continue at about 12%, and when you look at the forecasting graph below, the stock appears overvalued, (it' outside of the value corridor of the five orange lines - based on future growth).

2012-08-05 ProVise Bullets by Ray Ferrara of ProVise Management Group

One of the so-called potential benefits of a 401(k) plan is the ability of the participant to borrow money from the plan. Generally, a participant can borrow up to $50,000 from the plan and pay themselves interest. The loan must be repaid within a five year period of time.

2012-08-05 2012 Outlook: Signposts for the Second Half by Russ Koesterich of iShares Blog

Continued slow global growth or a recession? Russ offers some signs investors can watch for to help determine which scenario is likely to play out in 2012.

2012-08-05 Erasers by John Hussman of Hussman Funds

Moderate losses may be a necessary feature of risk-taking, but deep losses are erasers. A typical bear market erases over half of the preceding bull market advance. It is easy to forget - particularly during late-stage bull markets - how strongly this impacts full-cycle returns.

2012-08-03 Priced for Collapse by Peter Schiff of Euro Pacific Capital

Where is the gold price today? If you're like many Americans, you have no idea whether it went up, down, or sideways. Fortunately, I know my readers to be more informed - you likely know that after falling from almost $1900, gold has been trapped around $1600 since early May. But you may still be curious why despite continued money-printing and abysmal US economic reports, gold hasn't been able to hit new highs.

2012-08-03 Real Assets Replication: Solving the Capital Call Conundrum by Andrew Hoffmann, Niels Pedersen, Mihir Worah of PIMCO

Risk factors help to identify the fundamental value drivers of real assets and explain differences in the reported returns of public and private equity investments that hold substantially similar assets. By combining the fundamentals of real asset valuations with the statistical tools required to unlock the component risk factors of asset classes, it is possible to replicate the returns of private real asset investments using liquid publicly traded instruments.

2012-08-03 Postcard from Japan by Yu Zhang of Matthews Asia

After spending a week crisscrossing Tokyo earlier this summer to meet with various companies, my general take-away was that the country, as a whole, has managed a rather swift recovery from last year's devastating earthquake. Japan seems to have been able to rebound from its nuclear crisis, showing great resilience. Most of the firms I met with were already plowing ahead to try to make up for last year's losses.

2012-08-03 GDP Report: "Good News" - You've Got to be Kidding! by Gary Halbert of Halbert Wealth Management

We dissect last Fridays controversial 2Q GDP report, which most found disappointing but some in the mainstream media found encouraging (ie at least were not in a recession). From there, well discuss the Feds latest monetary policy meeting that ends tomorrow. The stock markets rallied strongly last week, partly on perceived good news from Europe, and partly because of renewed expectations that the GDP report would be weak enough to move the Fed to enact QE3.

2012-08-03 2nd Quarter Small Cap Newsletter by Team of 1492 Capital Management

The stock market posted a strong start for the year but quickly surrendered most of its gains as the macro environment (European debt concerns and China’s slowing economy) caused near-panic selling pressure until the last week of the quarter.

2012-08-03 ECRI Recession Call: Weekly Leading Index Slips But Growth Index Improves by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) slipped to 122.2 from last week's 122.7 (a tiny revision from the previously reported 122.8). See the WLI chart below. However, the WLI growth indicator (WLIg) improved, now at -1.3 as reported in Friday's public release of the data through July 27, an improvement over the previous week's -1.7, which was an upward revision from -2.3.

2012-08-03 The Big Four Economic Indicators: Updated Nonfarm Employment by Doug Short of Advisor Perspectives (dshort.com)

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.

2012-08-03 A Funny Thing Happened on the Way to the Recession by Martin Pring of Pring Turner Capital Group

Every day it seems the media are filled with forecasts of dyer economic times ahead based on troubles in Europe, Asia, and the Fiscal Cliff. The list goes on. Indeed the latest unemployment and GDP numbers, reflect a declining growth rate that is on the verge of going negative. Consequently, a number of commentators have used a projection of these trends to forecast an imminent recession. This is typical of crowd behavior, which has a strong tendency to extrapolate the recent past.

2012-08-03 Family Dollar Stores - Stock Research Analysis by Team of F.A.S.T. Graphs

A quick glance at the historical earnings and price correlated FAST Graphs on Family Dollar Stores (FDO) shows a picture of overvaluation based upon the historical earnings growth rate of 15.2%. Analysts are expecting the earnings growth to continue at about 15%, and when you look at the forecasting graph the stock appears overvalued, (it's at the top of the value corridor of the five orange lines - based on future growth).

2012-08-03 Hedging Against (and Profiting From) A Prospective Decline In The U.S. Dollar by Team of Emerald Asset Advisors

The U.S. dollar has remained the world's reserve currency due to several factors: 1. Its large circulation (roughly $1.1 trillion); 2. The denomination of many transactions (especially commodities such as oil and other natural resources) being in USD; 3. The stability of its political system; and 4. The lack of any other viable options. However, that may not always be the case.

2012-08-03 The Race for Resources by Frank Holmes of U.S. Global Investors

The world watched in awe as American swimmer Michael Phelps became the most decorated Olympian of all time. It's inspiring to see the incredible results of his tremendous sacrifice and commitment. Investing in global markets requires the same sort of stamina, especially at times like this week, when the month's reading on the manufacturing industry was not encouraging. The J.P. Morgan Global Manufacturing PMI of 48.4 for July was the lowest since June 2009.

2012-08-03 Time to Row, or Sail? by John Mauldin of Millennium Wave Advisors

Earnings are a topic of great debate. At any given time, you can hear someone on TV talking about how "cheap" the market is, while the person on the next channel goes on about how expensive the market is. Today we look at the cycle of earnings, rather than a specific point in time. Let me give you a little preview. In terms of time, this earnings cycle is already longer than average, and in terms of magnitude it is projected to go to all-time highs.

2012-08-02 Two Inflection Points by Andrew Redleaf of Whitebox Advisors

I'm generally happiest, professionally, when I have at least one strong investment conviction. Currently I have two. I want to be long large-cap equities and short small-cap equities. And I want to be long cheap options on natural gas, mostly by owning E&P (exploration and production) firms that have become attractively cheap with the collapse of gas prices.

2012-08-02 Mythbusting: How Elections Affect Markets by Russ Koesterich of iShares Blog

Elections do matter for the markets, but not necessarily for the reasons that investors tend to believe. Ahead of the next presidential election, Russ debunks some common myths surrounding markets and elections.

2012-08-02 Q1 GDP Revised Upward; Q2 Growth Remains Sluggish by Team of American Century Investments

The 1.5% rise in gross domestic product (GDP) for the second quarter was in line with market expectations, while growth for 1Q was revised up slightly to 2.0%. The major U.S. equity markets fared well, with the Dow Jones Industrial Average closing above 13,000 for the first time since may. In other news, the Federal Open Market Committee (FOMC) meets this week, which could result in a third round of quantitative easing.

2012-08-01 Welcome to Dystopia! by Jeremy Grantham of GMO

In a new quarterly letter to GMO's institutional clients today, chief investment strategist Jeremy Grantham warns: "We are five years into a severe global food crisis" that in the long term "will threaten global stability and global growth." An accompanying investment commentary by GMO head of asset allocation Ben Inker focuses on risks of eurozone equities, which he describes as "somewhere between fair value and mildly cheap" but not worthy yet of "a table-pounding endorsement."

2012-08-01 America's Other 30% by Stephen Roach of Project Syndicate

Consumption typically accounts for 70% of America's GDP. But the 70% is barely growing, and is unlikely to revive strongly at any point in the foreseeable future, which puts an enormous burden on the other 30% of the US economy to generate any sort of recovery.

2012-08-01 Whither Global Stocks? Be Sure to Track This Data by Russ Koesterich of iShares Blog

Sometimes, either weak economic numbers or strong economic numbers can point to a surge in US and global equities. This could be one of those weeks. Russ has his eye on two important economic reports that are being released this week, and he explains why weak data may be positive for global equities.

2012-08-01 The Big Four Economic Indicators: What They're Telling Us About the Economy by Doug Short of Advisor Perspectives (dshort.com)

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method. There is, however, a general understanding that there are four big indicators that the committee weighs heavily in their cycle identification process.

2012-08-01 The Vanishing Treasury Yield by Team of Neuberger Berman

Although Treasury bonds have performed well in recent years, investors should be aware of increasing risks as yields decline. Yields for 10-year Treasury Inflation-Protected Securities have been persistently negative since the fourth quarter of 2011 and continue to trend lower, implying that investors are paying increasingly higher prices for the relative safety these investments are supposed to provide.

2012-08-01 Housing: Good Vibrations by Liz Ann Sonders of Charles Schwab

It's time for an update to January's report on housing, and the news continues to get better. Household formations are key. Household formations are moving higher but housing completions aren't keeping pace. Real mortgage rates plunge into negative territory. Key housing market index indicates continued sales (and pricing) recovery.

2012-08-01 Remarks to the NBER-Sloan Conference on the European Crisis by Mohamed El-Erian of PIMCO

We believe that this intersection between what economists and policymakers know - is a critical one to get right, and not only for a long-term investor like PIMCO. You see, unless there is a strong economic anchor, policymakers (and their political bosses) will lack the conviction and foundation needed to take difficult decisions and explain them well to citizens. So it is crucial for both sides to know what is known - and also to recognize, to the extent possible, the known unknowns.

2012-08-01 Swiss Army People by Dan Ariely of Dan Ariely Blog

Plato once said that people are like dirt. They can nourish you or stunt your growth. This seems sage and reasonable, but I think people are more like Swiss Army knives (To be fair, Plato did not have the benefit of knowing of such a tool, so I don't think I'm detracting from his comparison in the least). Swiss Army knives, as we all know, are incredibly versatile, and have a tool for almost any situation.

2012-08-01 Italy - The Next Chapter in the Eurozone Debt Crisis by Greg Hahn of Winthrop Capital Management

After recently returning from Italy and France and analyzing the economic data coming out of Italy, we have a higher conviction that Italy will be stuck in a severe recession and has an elevated probability of requiring a bailout. Our main theme, which is similar to our view of the United States, is that Italy has too much public debt and is lacking the political will to make the necessary expense cuts and stimulate its economy to successfully navigate the deleveraging that is required.

2012-08-01 China's Growing Pains by Mark Mobius of Franklin Templeton Investments

Many feel that China is the engine for the world economy and that if it slows down, we may be doomed to a recession or even a depression. Yes, China's growth is decelerating from the double-digits of recent years; various forecasters are predicting a possible GDP growth range of 7-8% this year. However, I think it's important to emphasize that would still represent an impressive pace, and remember that China isn't the world economy's only locomotive.

2012-07-31 Expect Headwinds for Stocks If Hoisington is Right about Bonds by Keith C. Goddard, CFA (Article)

Might today's historically low interest rates in the U.S. persist for years to come? The latest Quarterly Review and Outlook from Hoisington Investment Management forces readers to consider that possibility, refuting the reversion-to-the-mean mindset that causes many people to expect higher interest rates in the not-too-distant future. If the Hoisington model for the economy turns out to be right, the implications for the stock market are unfavorable.

2012-07-31 Beyond the Ultimate Death Cross by Georg Vrba, P.E. (Article)

Last week, I showed why the 'ultimate death cross' is not a bearish signal. But the methodology behind that signal - what's known as a 'golden-cross trigger' - can indeed offer a reliable guide to investors. And one can do even better with a simple improvement to the trigger that I have devised.

2012-07-31 Cult Figures by William Gross of PIMCO

The long-term history of inflation adjusted returns from stocks shows a persistent but recently fading 6.6% real return since 1912. The legitimate question that market analysts, government forecasters and pension consultants should answer is how that return can be duplicated in the future. Unfair though it may be, an investor should continue to expect an attempted inflationary solution in almost all developed economies over the next few years and even decades.

2012-07-31 Uncertainty Reigns Supreme by Chris Maxey, Ryan Davis of Fortigent

With the first half of the year in the rearview mirror, investors might be lulled into thinking the most active period of the year is also in the rearview. Fast forward to year-end, though, and investors may beg for a return to the sanguine days of early 2012. A range of events in the coming months will likely dictate market optimism for 2012, 2013 and possibly beyond.

2012-07-31 An ECB Rally by Christian Thwaites of Sentinel Investments

We remain dependent on European statements but what a difference a year makes. This time last year we saw softening economic data and increasingly poor news coming out of Europe. But then we had a diffident ECB president who had just finished a round of rate increases as Europe slumped. This time we have combative words from Mario Draghi to support the euro, apparently at all costs.

2012-07-31 The Young General Emerges by Bill O'Grady of Confluence Investment Management

On July 16th, the official North Korean media reported that General Ri Yong Ho, the militarys Chief of the General Staff, had been dismissed of all duties. Reports suggested that the general had been removed due to illness. General Ri was a close confidant of the late Kim Jong Il and was thought to be tasked with smoothing the transition of the new leader of North Korea, Kim Jong-un, the Young General. Ri's exit, along with other events, suggests changes in the Hermit Kingdom.

2012-07-31 Gold at ECB: Accident or Strategy? by Axel Merk of Merk Funds

When the euro was launched, the European Central Bank (ECB) held approximately 15% of its assets in gold. That ratio has remained reasonably stable, giving rise to a variety of chatter, including suggestions that it may displace the U.S. dollar. We pursue the question on whether the ECB's gold holdings are an accident or strategy.

2012-07-31 The Price of Glamour by Bill Smead of Smead Capital Management

The list of glamorous growth stocks getting hit by what we call "minefield" price declines is getting fairly long. Some of the more influential names which have suffered sharp, swift declines include Nike (NKE), Chipotle (CMG ), Facebook (FB), Coinstar (CSTR), Starbucks (SBUX) and the King of the Glam stocks, Apple (AAPL). Is there a pattern here that matters? If earnings growth is hard to come by, what are the most important themes for long-duration common stock investors?

2012-07-30 And That's The Week That Was by Ron Brounes of Brounes & Associates

Oh, the power of words. While the week in the markets got off to a dismal start as the European saga continued, news from the ECB (and rumors about the Fed) renewed investors' interests. Many overlooked the confusing earnings numbers, the lackluster economic data, and the elevated rates in Europe and pinned their hopes on Central Bankers to save the day. (Both the Fed and European Central Bank meet next week.) The Dow jumped past 13k for the first time since early May.

2012-07-30 Sharp Decline in Earnings and Revenue Estimates by Mike "Mish" Shedlock of Sitka Pacific

For the first time in three years, US Quarterly Earnings are Poised to Drop. "Third-quarter earnings of Standard & Poor's 500 companies are now expected to fall 0.1 percent from a year ago, a sharp revision from the July 1 forecast of 3.1 percent growth, Thomson Reuters data showed on Thursday. That would be the first decline in earnings since the third quarter of 2009, the data showed."

2012-07-30 No Such Thing as Risk? by John Hussman of Hussman Funds

In the face of present enthusiasm over central bank interventions, one almost wonders why nations across the world and throughout recorded history have ever had to deal with economic recessions or fluctuations in the financial markets.

2012-07-30 What Next for Spain? by Myles Bradshaw of PIMCO

As part of its bank recapitalization program, Spain has ceded fiscal sovereignty, and this is a positive step toward resolving the euro debt crisis. We believe its eurozone partners should now make good on their summit agreement to use European Financial Stability Fund and European Stability Mechanism instruments in a flexible and efficient manner.

2012-07-30 Right Down the Middle by Michael Kayes of Willingdon Wealth Management

A tenuous moment occurs in our household every time we get down to the last piece of dessert. My kids fight over it, and I'm right there with them. When I was a kid, my mom had the perfect solution to this age old dilemma. She would allow the first child to cut the dessert and the other to choose which half they wanted. The interconnectedness between the process and the final outcome ensured fairness. A truly cooperative attitude like this seems nowhere to be found in our world today.

2012-07-30 Turkey: 'Sick Man of Europe' No Longer by Team of Thomas White International

Despite the invasion of modern retail formats such as supermarkets, corner stores still account for 40 percent of retail sales in Turkey. Since the mid-19th century, Turkey has carried the unfortunate moniker 'Sick man of Europe'. Though still not considered in the same league as the BRICS countries, Turkey has enjoyed healthy economic growth over the last decade.

2012-07-30 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks bounced last week on the heels of earnings which were not so bad, and perhaps more importantly, indications that the European Central Bank was ready to take the plunge as lender of last resort.

2012-07-30 Legends of the Fall 2012 by Nicholas Field of Schroder Investment Management

Are there any lessons from history for global stock markets, including emerging markets? Despite strong economic fundamentals, emerging stock markets have been negatively impacted by the global financial crisis and the European crisis. The outcome for all stock markets, including emerging markets, significantly depends on how these problems are resolved. In this context can previous crises, including the 1930's, give us any clues regarding timing?

2012-07-30 Austerity: Damned If You Do, Damned If You Don't! by Fred Copper of Columbia Management

This glib depiction could be applied to most of the developed world. Much of the world's attention is on the debt imbalances within Europe, but too narrow a focus will miss the fact that aggregate debt levels for the region as a whole are still disturbingly high. The same is certainly true of Japan, and to a lesser extent the U.S.

2012-07-30 Whitney, Revenue and Defaults by Team of Managers Investment Group

Shortly after Meredith Whitney's appearance on 60 Minutes, we published a Q&A with Gannett Welsh & Kotler, LLC, in which they discussed their view that Ms. Whitney's concerns were overblown. During the last 1 1/2 years, GW&K's view has proven to be correct and we have taken this opportunity to once again seek their thoughts on the financial challenges governments face today through a Q&A.

2012-07-30 Heads, I Win, Tails, You Lose by Brian Wesbury, Robert Stein of First Trust Advisors

Up, down, sideways...it's all bad, all the time. Take oil, for example. Between September 2011 and March 2012, oil prices rose about 20%. This generated all kinds of "sky-is-falling" stories about consumers having less money to spend. But, recently, as oil prices headed south in May and June, do you think the negativity went away? Not! The Pouting Pundits of Pessimism said falling oil was a bad sign, signaling weak global demand. It's all bad, all the time. The glass is always half empty.

2012-07-30 The Central Bank by John Petrides of Advisors Capital Management

Global markets responded favorably last week to comments from Mario Draghi, President of the European Central Bank, saying that he would do whatever it takes to save the euro (this reminded me of Fed Chairman Bernanke's comments in February 2009, when the Fed started its asset purchase program, and markets responded favorably soon after). Although the world awaits more details as to what Mr. Draghi's comments entail, equity markets rallied, and the yields on Spanish and Italian bonds came in.

2012-07-30 Looking Past Weak Data; Awaiting Policy Responses by Bob Doll of BlackRock Investment Management

Although last week featured some lackluster economic and earnings news, investors continued to focus their attention on the growing possibility of additional monetary policy action, particularly from Europe. For the week, the Dow Jones Industrial Average climbed 2.0% to 13,075, the S&P 500 Index advanced 1.7% to 1,385 and the Nasdaq Composite rose 1.1% to 2,958.

2012-07-30 The Longest Yard by Tony Crescenzi, Ben Emons, Andrew Bosomworth, Isaac Meng of PIMCO

As the global slowdown progresses, we can expect central banks to deploy more policy tools without limits to stem the pace of deleveraging. In Europe, quantitative easing using ESM bonds could prove to be another bridge that buys politicians more time, but does not solve the root problem. We expect real economic growth in China to be muted. While some stabilization is possible later this year, it is hard to foresee a sustained recovery.

2012-07-28 Gambling in the House? by John Mauldin of Millennium Wave

The problem that gave rise to the LIBOR scandal is the lack of transparency. Why would banks want to reveal how much profit they are making? The last thing banks want is transparency. This week I offer a different take on LIBOR, one which may annoy a few readers, but which I hope provokes some thinking about how we should organize our financial world.

2012-07-27 Equity Implications for a Modest-Return World by Andrew Pyne of PIMCO

With equities likely to see modest returns over the secular horizon, we believe that capturing alpha will be critical for investors seeking to meet target portfolio returns. Equity valuations appear reasonable, but volatility is likely to remain elevated amid slowing global economic growth and macroeconomic risks. As macro events drive markets, the probability of fundamental mispricing increases, providing opportunity for active managers to add value.

2012-07-27 Secular Outlook: Implications for Investors by William Benz of PIMCO

For investors, the biggest challenge now is moving from a world of normal distributions, with expected occurrences around the mean, to one of bi-modal distributions where more extreme scenarios prevail. Key institutions, including governments and central banks, were previously stabilizing forces but are now helping to accelerate underlying, destabilizing trends in the global economy and financial markets.

2012-07-27 Demographic Headwinds for Housing by Mike "Mish" Shedlock of Sitka Pacific

Boomer demographics and postponement of marriage on account of student debt and poor finances are two of the key reasons that I long-ago stated the housing recovery would be slow for a decade. Declining birthrates now show that is indeed what is happening.

2012-07-27 ECRI Recession Call: Weekly Leading Index Improves by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose to 122.8 from last week's 121.8 (a tiny revision from the previously reported 121.9). See the WLI chart below. The WLI growth indicator (WLIg) also improved, now at -1.6 as reported in Friday's public release of the data through July 20, an improvement over the previous week's -2.3.

2012-07-27 Revisiting Malaysia by Lydia So of Matthews Asia

In the market turmoil of recent months, Malaysia's equity market has held up comparatively better than some of its Asian counterparts. The FTSE Bursa Malaysia KLCI Index was up 1.4% during the second quarter in local currency terms. During the previous quarter, Malaysia had seen several large initial public offerings that raised capital totaling more than US$3.3 billion.

2012-07-27 Who is Muhammad Lee? by John Scott of Saturna Capital

Who is this Muhammad Lee? (So named, as these are the most common first and last names in the world.)1,2 Where is he from? How many brothers and sisters will Muhammad Lee have in the future? What are the implications of his arrival for U.S. investors?

2012-07-27 Challenging the Paradigms of Investing by Frank Holmes of U.S. Global Investors

Global investors constantly need to be watchful of individual biases, impaired thinking and emotional reactions that can have an adverse effect on a portfolio. One of our values at U.S. Global Investors is to always be curious to learn and improve, and the Investor Alert was borne from a belief that shareholders want to understand the very subtle nuances of biases and misconceptions. I have selected a few that I believe challenge the paradigms of investing.

2012-07-27 FOMC Preview: Christening QE III by Carl Tannenbaum of Northern Trust

Look for the Federal Reserve to embark on a new round of quantitative easing next week.

2012-07-27 Buffalo Wild Wings Inc - Stock Research Analysis Is It Too Saucy? by FAST Graphs Team of FAST Graphs, Inc.

A quick glance at the historical earnings and price correlated FAST Graphs on Buffalo Wild Wings (BWLD) shows a picture of slight undervaluation. However, since analysts are expecting the earnings growth to somewhat slow down, when you look at the forecasting graph the stock appears modestly overvalued - its just within the value corridor of the five orange lines - based on future growth.

2012-07-27 Treading Water by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Stocks seem to be biding time until the action heats back up as summer winds down, but market-moving events can happen at any time. The US economy continues to slow and Bernanke had a relatively dour outlook before Congress. But it appears things would have to get worse before another round of easing is initiated; the effectiveness of which we continue to question. Yields in Spain and Italy indicate action may be needed sooner rather than later, but we did get positive remarks by the ECB, which led to market rallies and a big drop in yields, providing a measure of hope.

2012-07-26 Variable Annuities Gain New Respect in Crisis Aftermath by Michael Hart of AllianceBernstein

The 2008 market crash has given variable annuities (VAs) a new lease on life. As clients search for ways to rebuild retirement nest eggs with less downside risk, US financial advisors are increasingly prescribing VAs as part of the solution. These were some of the key findings of a recent AllianceBernstein survey of more than 500 financial advisors to learn more about how and why they use VAs in their practices.

2012-07-26 Escalation in the Middle East by Bill O'Grady of Confluence Investment Management

Last week, the fighting in Syria escalated, with the Free Syrian Army, the rebel umbrella group, announcing an attack on Syrias capital, Damascus. Reports indicate that Alawites are starting to flee Damascus for sectarian strongholds on the coast. This information follows the news that the rebels successfully bombed a Syrian intelligence and security facility, killing at least four major figures within the Assad regimes security apparatus.

2012-07-26 Days of Reckoning - The Potential Impact of the 2012 Elections on the Markets by Russ Koesterich of iShares Blog

Elections can, and often do, matter for markets, but not necessarily for the reasons investors tend to emphasize. For example, there is little historical evidence that markets perform better or worse depending on which party occupies the White House. There is also no concrete evidence that markets do better under divided government, a myth that seems to have taken hold thanks to the bull market of the 1990s.

2012-07-26 Wage Inflation in China: Implications for Inflation and Global Investing by Team of American Century Investments

The transformation of China's economy since the late-1970s when the country opened up to foreign investment and began to take steps to participate fully in the global economy has been nothing short of remarkable. The Asian giant has undergone a dramatic transformation from a comparatively small, underdeveloped, rural economy to a dynamic, urban, manufacturing-based economy that is now the second largest in the world.

2012-07-26 On Top of the Market: Sustained Fear and Uncertainty Offer an Attractive Entry Point by Team of Managers Investment Group

Now updated through 2Q. This compendium provides an historical perspective of economic data compared to today's results, and provides comments on any developing trends. We also include a synopsis of financial markets results. The OTOTM Chart Book is designed with easy-to-read graphics to tell a story and help you visualize the changes taking place in today's economy.

2012-07-25 An Excess of Reserve by Carl Tannenbaum of Northern Trust

Bank credit has expanded nicely over the past two years, yet financial institutions continue to hold substantial pools of excess reserves with the Fed. Some suggest that this extended conservatism is hindering the economic expansion, and are calling on the Fed to lower the rate it pays on excess reserves. The ECB has already taken this step. We think that a cut in the interest rate on excess reserves is unlikely.

2012-07-25 An Attractive Destination for Holidays, and IPOs by Mark Mobius of Franklin Templeton

Many Western investors would likely have little trouble naming this years biggest initial public offering in the U.S., but they probably dont know that two of the top three global IPOs so far this year have been in an island nation probably better known as a holiday destination than an investment one. That country is Malaysia, where an interesting story has been unfolding in the IPO market.

2012-07-25 US Utilities: Don't Overpay for Yield by Russ Koesterich of iShares Blog

As short-term interest