- Morgan Stanley issues 'full house' buy alert for stocks
- Don't Make This Gold Mistake
- Armstrong Economics: The Dow
- South African team may have solved solar puzzle even Google couldn't crack
- Wall Street and the Military are Draining Americans High and Dry
- West Texas Fracker Uses Toilet Water To Cut Cost
- Cost of Batteries for Electric Vehicles Falling More Rapidly than Projected
- My Chicken of an EV
- California’s Katrina Is Coming
- ECB balance sheet expanded in latest week
- Medicare premiums will be going up for many — what it means for your taxes
- Central banks to dump $1.5 trillion FX reserves by end-2016 -Deutsche
- South Korea exports plunge 14.7%
- Brazil's Economic Crisis Is Destroying the World's Busiest Helicopter Market
- Thousands protest in Jakarta as economy slows
- U.S. manufacturers grow at slowest pace in two years, ISM report shows
- Nigerian Economy Heading Towards Recession
- Hit by cheap oil, Canada's economy falls into recession
- Brazil 2016 Budget Plan Shows Economic Weakness
- Russian economy, shoppers hit by falling global oil prices
- Change means some Iowans could lose their homes
- Atlanta school district still seeking way to fund huge pension debt
- Australia's current account deficit blows out by 41 per cent while net debt approaches $1 trillion
- Slowing Growth Exposes Chinese Banks’ Debt Debris
- Goldman slashes China’s economic growth targets
- China ARRESTS journalists and traders who it says are creating market panic
- China Factory Gauge Shrinks to 3-Year Low
- Slower India Growth Adds Pressure On Government, Central Bank
- Low inflation in Europe puts spotlight on ECB
The recent stock market and financial turbulence is going to get worse -- possibly a lot worse. This will be true even in the 'core' countries (US, Europe, Japan), while peripheral countries are suffering unusual levels of turmoil.
It’s nothing personal. This is simply how things were always destined to end.
Imagine a thriving street with cars, bicyclists and pedestrians. Now strip away the traffic signals, crosswalks, curbs, bike lanes, and signage that tell people what they should be doing. It sounds like a dangerous mess, right?
Around one-third of all food produced globally is wasted according to the UN. Meanwhile, nearly 800 million people don't get enough to eat. Those two figures point to an urgent need to find creative ways to share food.
- An Escalating Migrant Crisis and an Intensifying Search for Solutions
- Statement by Glenn Stevens, Governor: Monetary Policy Decision
- Are There Investing Opportunities For The Remainder Of 2015?
- Outrage builds over mentally ill man shot by off-duty cop at hospital
- Blood Plasma, Sweat, and Tears
- Let Coal Die A Natural Death
- U.S. Oil Production Nears Previous Peak
- The American Lawn: A Eulogy
There is a pretty clear path for those looking to pursue better health. Pretty much anyone can do it (Chris and I both did), and it doesn't cost a lot of money nor make you feel miserably deprived of life's joys. In fact, you'll look, feel, and actually be much better.
The word architecture generally brings to mind urban skylines, ultra-modern homes, and attention-grabbing skyscrapers—not favelas, waterside slums, and ravaged buildings. But creative architects around the world are working in challenging environments to improve the lives of the locals with innovative designs and building techniques.
During the past few decades, an estimated 80,000 refugees, mostly from Indonesia, have sought asylum in Australia. Fleeing war and civil unrest, with limited means and access to welfare or work, these asylum seekers are going hungry. More than 90% of those seeking protection experience food insecurity, 40% have gone to bed hungry in the past month, and 42% have lost weight since arriving in Australia because they didn’t have enough food to eat.
Photo by Paul Goddin. Article and images cross-posted from Mobility Lab. Author Jason Hardin is Arlington’s Capital Bikeshare Planner and a consultant to Arlington County (Virginia) Commuter Services.
- Robert Reich: The Upsurge in Uncertain Work
- Everything you’ve heard about China’s stock market crash is wrong
- Gold Coming Off the LBMA Spiked Last Week
- Bond Market Explosion Not Stoppable: Craig Hemke
- The Fed Is Dead Wrong
- Silver and Warnings From Exponential Markets
- Why So Much Oil Price Volatility? Blame The Speculators
- The Cross Of The Moment
- The Coddling of the American Mind
- With Ruble’s Decline, Russian Tourists Gain Appreciation for the Motherland
- China Construction Bank Posts Zero Profit Growth on Weak Economy
- Optimistic About Inflation, Stanley Fischer Suggests That Fed Will Stick to Plan on Rates
- In pictures: An emotional arrival in Europe
- The Black Route of Death From Syria
- Printing Money Goes Haywire in Venezuela
- The Solar Sunflower: Harnessing the power of 5,000 suns
- Gold Is the Best Insurance for Your Portfolio
- Consumer Anxiety in China Undermines Government’s Economic Plans
- Homes for the homeless
- Waste into Waistcoats: 3 Ways We’re Recycling Slaughterhouse Scraps
- In Alaska, Obama Will Be in Middle of Oil and Climate Change Battle
- Federal judge blocks Obama’s water rule
- The Green Rebuilding of Post-Katrina New Orleans
- Would warming stop after greenhouse gas emissions end? Not quite
When stock markets are free-falling 10+% in a matter of days, it’s natural to seek some answers to the question “why now?”
- Why global capital flows will determine everything
- What impact euphoria and fear wil have on liquidation and valuation
- The importance of debt denominated in other currencies
- What's likely as capital shifts from Risk-On to Risk-Off assets
If you have not yet read Part 1: Here's Why The Markets Have Suddenly Become So Turbulent available free to all readers, please click here to read it first.
In Part 1, we listed five interlocking trends that will severely limit the scale and effectiveness of official responses to the next recession. In effect, the world will not be able to “borrow and spend” its way out of recession.
In Part 2, we’ll examine the single most important dynamic in any asset value: capital flows.The Tidal Forces of Capital
Let’s start with the most basic building blocks of supply and demand.
Capital flowing into an assets class (buying) in excess of capital flowing out (selling) increases demand and pushes prices up.
If supply increases even faster than demand, prices may decline despite rising demand.
If capital flows out (selling) in excess of inflows (buying), prices will decline.
Prices are set on the margin. If 5 homes out of a neighborhood of 100 homes sell for 25% below the previous price level, the valuation of the other 95 homes also drops 25%.
Risk on = seeking asset appreciation and taking on more risk in exchange for higher yields.
Risk off = seeking capital preservation and accepting lower yields in exchange for reduced risk.
Assets have two ways to appreciate/depreciate: the nominal price, and the underlying currency the asset is priced in.
If a Mongolian bond yields 7%, the owner earned a nominal 7% on the capital. But if the currency the bond is denominated in dropped 20%, the owner suffered a 13% loss when the investment is priced in other currencies.
The consequences of capital flows can be counter-intuitive.
For example, if the Federal Reserve creates $1 trillion out of thin air, our initial expectation would be...
- Breaking The Mold
- The happiest (and least happy) countries in the world, ranked
- Carbon Fiber Cloth Can Generate Hydrogen
- Wireless electricity: Scientists send energy 55 meters away through air
- China’s jaw-dropping progress at reducing CO2 emissions in just 4 months
- South African prototype may solve solar power problem
- Is This The Beginning Of A Longer Oil Price Rally?
- Why a Left-Wing Socialist Is Poised to Become the Leader of Britain’s Labour Party
“You Fly to the Edge of the Tar Sands, and ... No Life”: A Montana Professor on the Issue of Our Time
In this week's Off The Cuff podcast, Chris and New Harbor Financial discuss the recent gyrations of the market.
- Are we witnessing a secular trend reversal?
- What's likely to happen next?
- How can prudent investors position themselves now?
- Where can shelter best be taken?
- Is it time for risk-seekers to place bets?
All these questions and more are addressed in this podcast. Needless to say, this is one of the most challenging times to protect capital in living memory.