Enzio's Clock

If you think that "this time it's different", forget it. History has a nasty habit of repeating itself, warts and all. After all, this is not the first time that some chief strategists have benefited from lying, nor is it the first time that the chickens of irresponsibility have come home to roost. Today we look a little more closely at what "Bernanke-san" has in store for us.. We build on what we suggested about bond yields in Sunday's piece about that unfortunate fish flopping around on a hot cement sidewalk.

Topics Covered

1. What happened from 1942 - 1951
2. Parallels to today
3. How to save money off this idea

We all at least have heard of  Tennessee Williams' 1955 play, "Cat on a  hot tin roof". Well, on a lesser literary level, how about visualizing a fish, freshly pulled out of a tank, and being thrown on to a hot sidewalk? What can it do but to flop around vigorously? Step in, "Fish on a hot cement sidewalk". Readers know how we view the shape of things to come. Today I want to refresh this view against the backdrop of last week's fantastic Wall Street performance. 

Topics Covered

1. What did - and did not - happen last week in America
   
2. Bond blow out the next hit?
3. How to make money off this idea
   

Readers know of our pugnacious disdain for "mature" executives "leading"  corporations - chickening-out on their private jets. We call these parasitic sluggard's  "chickens of irresponsibility". Readers also know of our our view concerning Beijing's valiant attempts to "run China".  Not so fast, Joe - or was that "Zhou"? Is the Chinese stock market really so "inexpensive" ? So today we combine two commodities, chickens and gold.  This has everything to do with our call a long time ago that the bail-out would cost USD 1.4 trillion - all based on the roosters shrieking the Golden Rule, of course, and on looming stagflation, something we flagged back in Spring of 2006. 

Topics Covered

1. Chickens
2. China
3. How to earn money off this idea
   

Readers know that we identified stagflation in America back in Spring, 2006. We also have suggested which sectors merit your attention - and what the single riskiest investment probably is for your money. We added a note on what your banker has neglected to tell you about your monies with him/her. We also have suggested that with the chickens of irresponsibility coming home to roost, there are two instruments definitely worth looking at. More recently, we also suggested the shape of things to come. We are pleased to report that as of today (the one that you are clicking on is per last Friday, New York closing), our Advice Tracker has returned its subscribers 60%+ over the past year. Today we update these thoughts to guide you through coming turbulence.

Topics Covered

1. Nearing the bottom?
2. Who wants more downside?
3. How to make money off these ideas
   

In the course of my institutional consultancies for the past two weeks some perceptive clients have asked how Mr. Obama's Presidency will influence China's economy. I came up with some surprising conclusions, prompted by the points made by such bright people  about half my age. It's wonderful to keep learning. As my mother in law has taught me:"I know my view, so tell me yours." Vive la difference!  Another one was heralded by this week end's summit. 

Topics Covered

1. Political commonality
2. How Mr. Obama will influence China
3. How China will influence America
4. How to make money off these ideas
   

This September we released a piece suggesting that U.S. sovereign debt might be in for a downgrade. Mr. Obama's recent victory appears to be re-enforcing this view. Indeed, very recent headlines of Paulson's as well as China's volte faces are adding spirits to these flames ...  As much was suggested in the most recent edition of The Economist (p.79) , so at least we are in good company. Talking with a trenchant  thinker (he 'only" speaks four languages and did a degree in mathematical economics - alas, where I am reduced to my 29 year old computer consultant telling me how to run the "spell check" function!) - today triggered more thoughts on this: is "deflation" really  the most beneficial  pecuniary prism through which to be observing what to do with  long bonds ...? And what about gold and the Swiss Franc? 

Topics Covered

1. Obama and U.S. yields
2. U.S. yields and China
3. Step in: gold
4. How to save money off this idea
5. How to make money off this idea

The 16th of October marked the anniversary of the peak of the Shanghai Composite Index. Nearly a month after this macabre anniversary, we gave you our thoughts on how effective China's stimulus package might be. With more stimuli being announced in today's press, and in the presence of Paulsen's volte face re. the bank (bonus) bailout, we re-visit yesterday's thoughts to provide more investment guidance on this bleak anniversary ahead of an Economic Time™" that not only the Cockney would characterise as "L".

Topics Covered

1. Price, Earnings and the Price/Earnings Ratio
2. Close to "L"?
3. How to save money off this idea
   

As elsewhere, governments have issued massive stimulus packages in order to placate electorates - whether of the voting or the obliging type. Tough to tell the difference these days. Without boring with with iteration 77 of the details, we step back and ask the hard question: do we today buy or sell China off the back of the package?  we have written similar thoughts before, ones that compound our current view. 

Topics Covered

1. Why the stimulus cannot stimulate
2. How to save money off this idea

We are not going to bore you with iteration 3,556 about our view of Dr. Obama's victory, except to say: here is the American genius at work. If you work hard and believe, America (and Hong Kong!) allow you to realize your dream. We already have passed our newest book to Dr. Obama's key Asia advisers, and hope that it will contribute to making a difference by stemming the rise in protectionism.

I am surprised in my talks with perfectly intelligent people how little their bankers tell them how to protect their money. So I will be the Boy Scout and do this work for you.  What I am sharing is in no way comprehensive or binding, but I am trying to build a circumference of ignorance for you so that when you go to your banker, you will confront him/her knowing what you don't know. In America we called this "asking the right questions." Under von Hayek I learned that you have to question assumptions. You can ask the right question only when you know what you don't know. That is what I have dubbed the "circumference of ignorance". Do you have one when it comes to the safety of your hard-earned money at the bank? Mine is tiny and growing...

Here is a sketch - not a portrait - of a circumference of ignorance...

Topics Covered

1. What is the riskiest investment of them all?
2. What about other instruments lodged with your bank?
3. How about stock lending?
4. How to save money off these ideas
   

A Scottish shortening of All Hallow Even (1556), yesterday we "celebrated" the last night of the year in the old Celtic calendar, according to my Online Etymology Dictionary. Funny, this also is the end of the first year of the market diving...

There are not only witches riding on  brooms, but also witches (i.e. etymologically: female magicians or sorceresses) seducing with  valuations .... We already have provided you with an investment roadmap during "L".  Shall we call this piece "Witches Brew"? Are current, low valuations a trick - or a treat? And what about sectors? And are time deposits a trick - or a treat? Today we discuss valuations against the pattern prediction provided by  the Economic Clock™.

See why our advice has reaped gains of over 27% during this past, horrible year...

Topics Covered

1. "Stocks are cheap": trick, or treat?
   
2. How to make money off this idea