12/13/05 Notes: Bears Rubbing Their Paws In Anticipation?

...It's cold here in the frozen north, and going through the financial news this morning is enough to make an old bear zip up the fur suit and go roll out in the snow for a while. Some interesting links out there today for those of you who might be interested in getting other takes on the stories that you hear from the cheerleading talking heads all day. And most of these links, interestingly enough, are not from permabear types who regularly see the sky falling.
...For example, Jim Jubak, who writes a regular column for the MSN Money site, frets that there are at least five trends that appear to be converging nastily and could impact the markets next year. I think this article, titled '5 Big 'Ifs' Investors Face in 2006', is a must read, as most of Jubak's articles are. Of the five, one of them is a theme that I have pounded on here ad nauseum, and that is if China and India don't slow their rate of growth, investors will have to contend with runaway commodity prices. But all five of the threats he mentions should at least be considered when making investment decisions in the coming year. He also has an update to an earlier column, '5 Reasons The Fed Will Fumble In 2006', that is worth the read. In his update, he notes that consumer credit, which is info provided by the Fed showing how much consumers borrow each month, fell by $7.2 billion, the biggest amount on record, in October. The Street had been expecting an increase of over $5 billion.
...The above two articles may make it seem as if Jubak is a permabear type, but that is not the take I've gotten over the years. He is a very good stockpicker, and as I have said before, folks could do worse than use his model portfolios as a part of their investigative processes when looking for stocks.
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...In today's MarketWatch, Paul Farrell's Last Christmas Before Next Recession is kind of scary, but interesting, as is Farrell. I usually read his stuff, even though I often am on the other side of his arguments. For example, he is virulently opposed to market timers and insists that market timing can't work, and has gotten into very spirited debates with folks on the other side of that issue. In today's article, Farrell also quotes four heavyweights in the financial arena, including our own Fed chairman, Mr. Greenspan, who has been quoted as saying, "Our budget position will substantially worsen in the coming years unless major deficit-reducing actions are taken. The consequences for the U.S. economy of doing nothing could be severe."
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...And then there's a couple of articles regarding the gold rush that has been taking place in the markets of late. As I stated a few days ago, I used to be something of a gold bug, but don't trade it anymore. I try to make trades where I make money, not lose it regularly, and I came to the conclusion that there were some very big players with vested interests in making sure that gold was suppressed and was never considered currency again. It turns out that theory may not be quite as crackpot as it might seem at first glance to 'normal' folks.
...MarketWatch's Peter Brimelow discusses the gold rush and the varied opinions he got from most of the old time gold bugs. In short, many of them are as nonplussed about the freight train advance as everybody else.
...And over at Jim Puplava's Financial Sense Online site, Rob Kirby writes in the daily Market WrapUp Column about the strange fact that since August gold and the dollar have both advanced, a fact that contradicts all the traditional wisdom that is constantly trotted out in the mainstream press. Gold is supposed to be the anti-dollar. This article and the quotes it contains are very interesting. The gist of the article is that a lot of folks may be short gold a lot more than they should be, and as a result, the chickens are finally coming home to roost and they are hung out to dry. How's that for mixing a bunch of metaphors? And maybe not so coincidentally, the article notes that the in-tandem march of both gold and the dollar started back about the time when GATA (the Gold Anti Trust Action Committee) held a landmark conference on August 8 and 9.
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...Another precinct heard from regarding the runup in gold prices. Russia just announced that they increased their gold and currency reserves increased by $40 billion dollars through the first ten months of 2005.