By training, I am not a feng shui master, but do follow few tricks over the years that work well for me. This year – the Year of Ox – commences on 26th Jan 2009 and ends on Feb 13, 2010.
History shows that Year of Ox wasn’t particularly friendly to us – in 1937 Fire Ox, we saw Japanese forces invade mainland China, Great Hong Kong typhoon kills an estimated 11,000 people, in 1967 Metal Ox, USSR tests a 58-megaton bomb – the largest man-made explosion, the Vietnam War officially begins, Berlin Wall goes up, in 1973 Water Cow, US involvement in the Vietnam War ends, Ferdinand Marcos becomes President for Life of the Philippines, Arab countries double the price of oil to US#3.07/bbl, triggering a world-wide recession and l985 Wood Ox with an 8.1-magnitude earthquake kills at least 9,000 in Mexico City, US becomes a debtor nation for the first time since 1914, of course, Malaysia launches the Proton Saga – its first ‘national car’ and closer to time – the Fire Ox of the 1997/98 Asian financial crisis - the landscape was not any better.
Feng Shui is all about the energy flows – ensuring the good stuff flows in and the bad vibes are blocked. The economy outlook in many countries are going through upheavals of sorts and furthermore it’s unlikely that Wealth gains are in store for us this year. When times are bad and options are running out fast, a little bit of Feng Shui magic is no harm to everyone, if it helps to protect your Wealth and enhance it this Earth Ox year.
The most auspicious Wealth area in the home or office is in the Southeast. So whip out your regular compass to ascertain this positive location. Do position water in the southeast to help absorb money. If you can afford to spend little more, some masters would recommend gold carp, Chinese coins and golden ox.
West, the North, the Northeast and the East are areas that needed to be cured with Feng Shui. As a general rule, always keep your home and office spacious, clean and orderly to maintain good Wealth Feng Shui.
The kitchen is one of the most important areas of the home because it is the location of the Fire Mouth, or source of Wealth. The energy in your kitchen should be clean and pleasant for the best gains in terms of Wealth luck. Therefore even if you don't spend much time in your kitchen, keeps the energy flow going with some crystal enhancers. Crystals are said to be able to cleanse a location from bad influences and negative energy. Choose crystals with Wealth luck symbolism and put these items on your kitchen countertop for the best enhancement.
Tuesday, February 24, 2009
Monday, February 23, 2009
Bear Markets Bonanza
History does repeat itself, but it almost never duplicates itself. You might be wonder where this statement leads you to, rite? Understand the truth to this statement leads us to have: An Open Mind!
Key challenge this year is to not to get caught in herd-like behaviour. It never makes you lasting money. To the contrary, it is and will always be – the single biggest and most common mistake investors make, and it costs you loads of money and missed opportunities. The key to understanding it, in my humble opinion, is what the healing process is.
We have the most oversold conditions ever in almost major stock indices and we have most historic oversold conditions on record in almost all natural resources. Any nearly everyone agrees, including me, that there are more losses to come, but the markets are never straightforward with us. Now, it seems a common catch-phrase to hear the saying ‘It is going to get worse before it gets better’ everywhere in almost every financial newsletter on the planet today. That’s how human behaviour works and deeply oversold conditions can lead to massive, surprising, out-of-the blue rallies.
In 1974/75 recession, a 45% collapse in the Dow in just two years’ time, the Dow turned back up in early 1975, rallying more than 75% by September 1976 even while slow economic growth lasted for another two years.
In 1990/92 recession, stocks once again hammered largely due to S&L crisis and the Dow soaring 40% from 2,365 to 3,310 in just over two years – even though the underlying fundamental economic indicators did not turn back up until late 1996.
The apocalyptic warnings were coming out everywhere in 1997/98 Russian and Asian financial crisis. Yet, just one short year later, by 1999, stocks were at or reaching new record highs!
Even if we go back as far back as the 1929 Great Stock Market crash, it was followed by a massive 48% rally between the Dow’s November 1929 low and April 1930, when stocks turned lower again.
Investors have been flocking to US Treasury bonds, but I am seeing another bubble to be created, and without one shred of doubt in my mind, the US Treasury is the most dangerous and riskiest market on the planet right now and will send giant shock waves throughout the world and that capital has to go somewhere, rite?
As the currency devaluation process taking place, I see that natural resources to have intrinsic value. The action of the US dollar is absolutely pathetic under these circumstances.
Key challenge this year is to not to get caught in herd-like behaviour. It never makes you lasting money. To the contrary, it is and will always be – the single biggest and most common mistake investors make, and it costs you loads of money and missed opportunities. The key to understanding it, in my humble opinion, is what the healing process is.
We have the most oversold conditions ever in almost major stock indices and we have most historic oversold conditions on record in almost all natural resources. Any nearly everyone agrees, including me, that there are more losses to come, but the markets are never straightforward with us. Now, it seems a common catch-phrase to hear the saying ‘It is going to get worse before it gets better’ everywhere in almost every financial newsletter on the planet today. That’s how human behaviour works and deeply oversold conditions can lead to massive, surprising, out-of-the blue rallies.
In 1974/75 recession, a 45% collapse in the Dow in just two years’ time, the Dow turned back up in early 1975, rallying more than 75% by September 1976 even while slow economic growth lasted for another two years.
In 1990/92 recession, stocks once again hammered largely due to S&L crisis and the Dow soaring 40% from 2,365 to 3,310 in just over two years – even though the underlying fundamental economic indicators did not turn back up until late 1996.
The apocalyptic warnings were coming out everywhere in 1997/98 Russian and Asian financial crisis. Yet, just one short year later, by 1999, stocks were at or reaching new record highs!
Even if we go back as far back as the 1929 Great Stock Market crash, it was followed by a massive 48% rally between the Dow’s November 1929 low and April 1930, when stocks turned lower again.
Investors have been flocking to US Treasury bonds, but I am seeing another bubble to be created, and without one shred of doubt in my mind, the US Treasury is the most dangerous and riskiest market on the planet right now and will send giant shock waves throughout the world and that capital has to go somewhere, rite?
As the currency devaluation process taking place, I see that natural resources to have intrinsic value. The action of the US dollar is absolutely pathetic under these circumstances.
Sunday, February 22, 2009
FX Outlook for 2Q09
Data flows are still ugly and growth expectations are now in a suitably negative place. Policy makers have used up a lot of fiscal and monetary bullets and are still staring at deep and prolonged recession.
The biggest risk for USD is still monetization through official bond buying. It changes psychological of market and open to constant testing on whether it is in, how large the intervention and so on, and it also kills price discovery in a bellwether market, undermining many other signals the Fed values including inflation expectations.
The EUR discussion, on the other hand, centres on whether the real sector adjustment becomes so wrenching that the costs of the withdrawal from the EUR gets serious consideration. The fears that the EUR may tear itself up from the inside will live on through 2009, along with concern about the sustainability of national fiscal accounts. It constitutes a very limited payoff for stubborn ECB anti-inflation policies and relative fiscal constraint, and will put the region at a distinct disadvantage.
Until global trade returns to the fore, it strikes harder at the European core as economic activity is redrawn along national lines as consumer demand to be hammered on a more durable basis and protectionist pressures will steadily build. This is more obviously challenging for economies with greater trade opening, like Singapore, Hong Kong, Taiwan and to some extent of Malaysia, whose whole raison d’etre is trade.
Japan has very powerful reasons for preparing for FX intervention on a huge scale against the rising JPY. The MoF is ready to go, perhaps by early-mid Q2 and on the background, US may encouraging intervention to recycle Japanese surplus savings back to the US. However, any JPY sell-off is unlikely to last long. Repatriation by Japanese life insurers, which may be larger than usual as they suffer losses on equity investments and need to realize the profits, will also support JPY toward fiscal year-end. Also, Japan has a stimulus package of $720 billion – roughly 14% of GDP.
Commodity currencies, while at one hand is yet to feel the full-blast of the cold winds coming from the global downturn, I still think commodity economies are getting close to the end of the rate easing cycle.
My base case for structural appreciation of RMB remains for no change, and is could be a possibility that PBOC will target a stable currency in order to deter a further rise in capital outflows. The credit growth will remain strong as the government disburses funds related to the stimulus package at full speed, banks will likely to increase their matching loans to large infrastructure projects that have (implicit or explicit) government guarantee.
The biggest risk for USD is still monetization through official bond buying. It changes psychological of market and open to constant testing on whether it is in, how large the intervention and so on, and it also kills price discovery in a bellwether market, undermining many other signals the Fed values including inflation expectations.
The EUR discussion, on the other hand, centres on whether the real sector adjustment becomes so wrenching that the costs of the withdrawal from the EUR gets serious consideration. The fears that the EUR may tear itself up from the inside will live on through 2009, along with concern about the sustainability of national fiscal accounts. It constitutes a very limited payoff for stubborn ECB anti-inflation policies and relative fiscal constraint, and will put the region at a distinct disadvantage.
Until global trade returns to the fore, it strikes harder at the European core as economic activity is redrawn along national lines as consumer demand to be hammered on a more durable basis and protectionist pressures will steadily build. This is more obviously challenging for economies with greater trade opening, like Singapore, Hong Kong, Taiwan and to some extent of Malaysia, whose whole raison d’etre is trade.
Japan has very powerful reasons for preparing for FX intervention on a huge scale against the rising JPY. The MoF is ready to go, perhaps by early-mid Q2 and on the background, US may encouraging intervention to recycle Japanese surplus savings back to the US. However, any JPY sell-off is unlikely to last long. Repatriation by Japanese life insurers, which may be larger than usual as they suffer losses on equity investments and need to realize the profits, will also support JPY toward fiscal year-end. Also, Japan has a stimulus package of $720 billion – roughly 14% of GDP.
Commodity currencies, while at one hand is yet to feel the full-blast of the cold winds coming from the global downturn, I still think commodity economies are getting close to the end of the rate easing cycle.
My base case for structural appreciation of RMB remains for no change, and is could be a possibility that PBOC will target a stable currency in order to deter a further rise in capital outflows. The credit growth will remain strong as the government disburses funds related to the stimulus package at full speed, banks will likely to increase their matching loans to large infrastructure projects that have (implicit or explicit) government guarantee.
Thursday, February 19, 2009
Commodities – In Money
Commodities may be down, but they are not out – and they shouldn’t be out of your portfolio, either. Even with oil prices down more than 75% from their record high set in July08, producers are operating near maximum capacity every day with 89.5 million barrels a day, and we are using 89 million barrels a day. That essentially means there is no excess capacity any where. If you factored in war, routine maintenance of pipelines or refining facilities, and diminishing supplies, we are probably already running at a deficit, even though current data does not reflect that. There is a very high probability that in the near future demand will outrun supply. I do think it is the investing opportunity of our lifetime.
There is a big different between being alarmist and being prepared and in this case, we are talking about the latter, especially when it comes to potential profits.
China, among other countries, is using its huge currency reserves – and the financial weakness of rivaling other global players – to lock up long-term supplies of commodities. The average American uses two times the amount of oil used by each European, four times the amount used by each Japanese consumers, 12 times their counterparts in China and 30 times the amount used by the typical consumer in India.
Even if substitutes were found tomorrow, we still have to replace trillions of dollars worth of manufacturing and infrastructure processes that have to be changed completely. Some studies that I have seen suggest that oil is used in more than 60,000 manufacturing processes and it is much the same with water, in particular.
It reminds me of comments made by Jim Rogers, not too long ago, when the legendary investor observed that ‘real commodity assets represent real wealth’. I agree, and I hope you will, too.
There is a big different between being alarmist and being prepared and in this case, we are talking about the latter, especially when it comes to potential profits.
China, among other countries, is using its huge currency reserves – and the financial weakness of rivaling other global players – to lock up long-term supplies of commodities. The average American uses two times the amount of oil used by each European, four times the amount used by each Japanese consumers, 12 times their counterparts in China and 30 times the amount used by the typical consumer in India.
Even if substitutes were found tomorrow, we still have to replace trillions of dollars worth of manufacturing and infrastructure processes that have to be changed completely. Some studies that I have seen suggest that oil is used in more than 60,000 manufacturing processes and it is much the same with water, in particular.
It reminds me of comments made by Jim Rogers, not too long ago, when the legendary investor observed that ‘real commodity assets represent real wealth’. I agree, and I hope you will, too.
Wednesday, February 18, 2009
Diesel is Back!
Diesels are loud, dirty and smelly – a pollution nightmare… you can hear a diesel truck from a mile away, see the soot from halfway down the block and smell the exhaust as it rolls by.
Surprise! – those diesels you hear, and smell are antiques, thanks to the new technology.
Europeans have to pay heavy gasoline taxes and just in case the hydrogen car hit a snag, they invested in the diesel engine as a stop-gap, and indeed, as you know, the hydrogen DID hit a snag and the stop-gap looks like a winner in the great auto race. European refineries have removed most of the pollutants from the fuel. While it is true that the engines cost more, but the gas savings almost make up the difference. You see, diesel gets about 30% more miles to the gallon than gasoline, and those savings are real, in any kind of driving conditions. What’s more, people who worry about global warning prefer diesel because it emits up to 20% less carbon dioxide.
Diesel’s biggest edge is something you’d never expect ….you don’t need crude oil to make diesel fuel. You can make it from coal, plant matter or even cooking oil. No kidding – a restaurant can invest in a cooking oil converter kit that lets you fry a batch of potatoes and later reuse the oil in your delivery truck.
In India, they make fuel from cow dung as an important energy source. A new use for sacred cows!
An MIT study predicts that the diesel hybrid could outperform a hydrogen fuel cell engine on both gasoline mileage and carbon emissions – within 10 years. The obvious play is to buy the big automakers like Toyota that own the leading hybrid or diesel technologies.
Surprise! – those diesels you hear, and smell are antiques, thanks to the new technology.
Europeans have to pay heavy gasoline taxes and just in case the hydrogen car hit a snag, they invested in the diesel engine as a stop-gap, and indeed, as you know, the hydrogen DID hit a snag and the stop-gap looks like a winner in the great auto race. European refineries have removed most of the pollutants from the fuel. While it is true that the engines cost more, but the gas savings almost make up the difference. You see, diesel gets about 30% more miles to the gallon than gasoline, and those savings are real, in any kind of driving conditions. What’s more, people who worry about global warning prefer diesel because it emits up to 20% less carbon dioxide.
Diesel’s biggest edge is something you’d never expect ….you don’t need crude oil to make diesel fuel. You can make it from coal, plant matter or even cooking oil. No kidding – a restaurant can invest in a cooking oil converter kit that lets you fry a batch of potatoes and later reuse the oil in your delivery truck.
In India, they make fuel from cow dung as an important energy source. A new use for sacred cows!
An MIT study predicts that the diesel hybrid could outperform a hydrogen fuel cell engine on both gasoline mileage and carbon emissions – within 10 years. The obvious play is to buy the big automakers like Toyota that own the leading hybrid or diesel technologies.
Monday, February 16, 2009
East Europe – Ready for Round 2 Financial Crisis
If anything that could be the time-bomb to my optimism to market, it will be the unfolding drama from the Eastern Europe. I have written at least two articles related to this region, and I believe this debacle is big enough to shatter the fragile banking systems of Western Europe and potentially to set off round 2 of our financial crisis.
Last week, Austria’s finance minister Josef Proll made frantic efforts to put together E150 billion rescue for the ex-Soviet bloc, as his banks have lent some E230 billion to the region, equal to 70% of Austria’s GDP. The Vienna press said Bank Austria and its Italian owner Unicredit face a ‘monetary Stalingrad’ in the East, but the interestingly part of this episode is that Germany’s Peer Steinbruck said this is not our problem and we will see about that.
Some statistics suggest that Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities and it must roll-over some $400 billion this year, and that equal to a third of the region’s GDP. We know jolly well that the credit window has slammed shut. Not even Russia can easily cover the $500 billion debts of its oligarchs while oil remains near $33 a barrel. Russia has bled some 36% of its foreign reserves since August defending the rouble. This is the longest run on a currency in history.
In Poland, 60% of mortgages are in Swiss Francs. Hungary, the Balkans, the Baltics and Ukraine are all suffering variants of this story. As an act of collective folly – by lenders and borrowers – it matches America’s sub-prime. And the crucial difference, however, European banks are on hook for both.
They are five times more exposed to this latest bust than American or Japanese banks, and they are 50% more leverage, according to statistics from the IMF.
Whether it takes months, or just weeks, the world is going to discover that Europe’s financial system is sunk, and there is no EU Federal Reserve yet ready to act as a lender of last resort – a German-Dutch veto – and the Maastricht Treaty.
Under a “Taylor Rule’, the ECB already needs to cut rates to zero and to make matter worse, banks are pulling back, undercutting subsidiaries in East Europe. The sums needed are beyond the limits of the IMF, which already has bailed out Hungary, Ukraine, Latvia, Belarus, Iceland and Pakistan – Turkey could the next candidate and is fast exhausting its own $200 billion reserve. It wouldn’t surprise me if the IMF has to resort to printing money for the world, using arcane powers to issue SDRs.
If Deustche Bank is correct, the economy will have shrunk by nearly 9% before the end of this year. This is the sort of level that stokes popular revolt and the implications are obvious, as the lethal brush fires move closer. Are the firemen ready?
Last week, Austria’s finance minister Josef Proll made frantic efforts to put together E150 billion rescue for the ex-Soviet bloc, as his banks have lent some E230 billion to the region, equal to 70% of Austria’s GDP. The Vienna press said Bank Austria and its Italian owner Unicredit face a ‘monetary Stalingrad’ in the East, but the interestingly part of this episode is that Germany’s Peer Steinbruck said this is not our problem and we will see about that.
Some statistics suggest that Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities and it must roll-over some $400 billion this year, and that equal to a third of the region’s GDP. We know jolly well that the credit window has slammed shut. Not even Russia can easily cover the $500 billion debts of its oligarchs while oil remains near $33 a barrel. Russia has bled some 36% of its foreign reserves since August defending the rouble. This is the longest run on a currency in history.
In Poland, 60% of mortgages are in Swiss Francs. Hungary, the Balkans, the Baltics and Ukraine are all suffering variants of this story. As an act of collective folly – by lenders and borrowers – it matches America’s sub-prime. And the crucial difference, however, European banks are on hook for both.
They are five times more exposed to this latest bust than American or Japanese banks, and they are 50% more leverage, according to statistics from the IMF.
Whether it takes months, or just weeks, the world is going to discover that Europe’s financial system is sunk, and there is no EU Federal Reserve yet ready to act as a lender of last resort – a German-Dutch veto – and the Maastricht Treaty.
Under a “Taylor Rule’, the ECB already needs to cut rates to zero and to make matter worse, banks are pulling back, undercutting subsidiaries in East Europe. The sums needed are beyond the limits of the IMF, which already has bailed out Hungary, Ukraine, Latvia, Belarus, Iceland and Pakistan – Turkey could the next candidate and is fast exhausting its own $200 billion reserve. It wouldn’t surprise me if the IMF has to resort to printing money for the world, using arcane powers to issue SDRs.
If Deustche Bank is correct, the economy will have shrunk by nearly 9% before the end of this year. This is the sort of level that stokes popular revolt and the implications are obvious, as the lethal brush fires move closer. Are the firemen ready?
Sunday, February 15, 2009
The Great Oil Hoax
I cannot really vouch for the right of this story – but it was told to me, and sounds scary, if it gets to us. So, there is no reward of proving me wrong, but it can be disastrous, if you ignore it.
The story goes something like this – Arab Saudi’s oil supply is running dry fast and we cannot count on them to the rescue. To add credence to this, the story was told to me by this guy, who knows the energy business and he once told the senior US administration that the Saudi doesn’t have anything near the oil reserves they claim. And the oil production is about the drop sharply. If the charges are true – we could be facing oil at above US$100 per barrel and gasoline above US$8 a gallon or more. It is as simple as that!
Of course, if you listen to government officials, intelligence agencies, and even powerful Wall Street financers, they tell you the opposite. They say the Saudis could quickly double their oil production from the current level if they wanted to.
Americans used to run Aramco, the huge oil company that manages the Saudi fields. But in 1979, the Saudis booted it out and took over. Since then, the Saudis started keeping a secret. Experts try to figure out how much oil the Saudis sell by monitoring tanker traffic in and out of the world’s port. And that is how little we know for sure.
Since the take-over, their figures for proven reserves kept going up and up – even though they didn’t find any major new oil fields! In 1979, the Saudis adjusted proven reserves upwards by 50 billion barrels. Then eight years after that, their proven reserves magically grew by another 100 billion barrels. Their estimated reserves increased by 150% in nine years – to a total of 260 billion barrels and they didn’t find a single major new oil field!
For the last 17 years, they have claimed they own 260 billion barrels of proven oil in the ground. The figure never goes down, even though they have pumped out 46 billion barrels during that period. As recently as 2004, they claimed their reserve estimates are actually conservative. Trouble is – we’ve got no proof except they say so. If it were true, we wouldn’t have a thing to worry, but what if it is not.
Before Aramco was taken over in 1979, they told Congress that Saudi Arabia had proven reserves of 110 billion barrels. If that is true, about half of that has been used up since then.
Otherwise, it is a devious plan, and it has worked perfectly well until now. Or perhaps, everyone in OPEC does it as well. In the 1980s, OPEC’s claim of total reserves magically leaped from 353 to 643 billion barrels without a single major discovery. Industry experts call it the quota war, because the ability of each member of the cartel to sell number of barrels of oil is based on each member’s oil reserves!
It seems that everyone is claiming to have a bottomless well.
The story goes something like this – Arab Saudi’s oil supply is running dry fast and we cannot count on them to the rescue. To add credence to this, the story was told to me by this guy, who knows the energy business and he once told the senior US administration that the Saudi doesn’t have anything near the oil reserves they claim. And the oil production is about the drop sharply. If the charges are true – we could be facing oil at above US$100 per barrel and gasoline above US$8 a gallon or more. It is as simple as that!
Of course, if you listen to government officials, intelligence agencies, and even powerful Wall Street financers, they tell you the opposite. They say the Saudis could quickly double their oil production from the current level if they wanted to.
Americans used to run Aramco, the huge oil company that manages the Saudi fields. But in 1979, the Saudis booted it out and took over. Since then, the Saudis started keeping a secret. Experts try to figure out how much oil the Saudis sell by monitoring tanker traffic in and out of the world’s port. And that is how little we know for sure.
Since the take-over, their figures for proven reserves kept going up and up – even though they didn’t find any major new oil fields! In 1979, the Saudis adjusted proven reserves upwards by 50 billion barrels. Then eight years after that, their proven reserves magically grew by another 100 billion barrels. Their estimated reserves increased by 150% in nine years – to a total of 260 billion barrels and they didn’t find a single major new oil field!
For the last 17 years, they have claimed they own 260 billion barrels of proven oil in the ground. The figure never goes down, even though they have pumped out 46 billion barrels during that period. As recently as 2004, they claimed their reserve estimates are actually conservative. Trouble is – we’ve got no proof except they say so. If it were true, we wouldn’t have a thing to worry, but what if it is not.
Before Aramco was taken over in 1979, they told Congress that Saudi Arabia had proven reserves of 110 billion barrels. If that is true, about half of that has been used up since then.
Otherwise, it is a devious plan, and it has worked perfectly well until now. Or perhaps, everyone in OPEC does it as well. In the 1980s, OPEC’s claim of total reserves magically leaped from 353 to 643 billion barrels without a single major discovery. Industry experts call it the quota war, because the ability of each member of the cartel to sell number of barrels of oil is based on each member’s oil reserves!
It seems that everyone is claiming to have a bottomless well.
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