Rotting Vegetables

“As long as you’re green, you’re growing.  As soon as you’re ripe, you start to rot,” once remarked Ray Kroc, mastermind of the McDonald’s franchise empire.

At the moment, no truer words can be spoken for China’s ripe economy.  The Middle Kingdom’s 30-year economic boom is being overcome with the unpleasant odor that befalls rotting vegetables.  What’s more, there’s no way to reverse it.

 

P1180759Photo credit: fmh

 

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Right for the Wrong Reasons

In the midst of the seemingly indeterminable presidential electoral campaign, some of the candidates have been asked about the possibility of convening a constitutional convention in the hope of addressing the nation’s most pressing issues, most ominously the gargantuan federal deficit now in excess of $18 trillion.

Governor John Kasich supports such a notion with the explicit purpose of passing a balanced budget amendment.

 

Washington_Constitutional_Convention_1787A famous painting by Junius Brutus Stearns depicting the signing of the US constitution.

 

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Debt Curse

NEW YORK – “Not a bad view. That’s the mayor’s house right beneath us.”

We were on the 16th floor of a new apartment building, looking out over the East River. With us was President Reagan’s former budget advisor and Wall Street veteran David Stockman – a man who has been closer to the Bubble Epoch than almost anyone.

The Dow rose 183 points on Wednesday – or just over 1% – after starting the day in the red.

 

SALOMON_3142495bWilliam Salomon in Salomon Bros. & Hutzler’s trading room in 1965. Salomon Bros. sold the first ever mortgage-backed bond on Wall Street in the 1980s

Photo credit: Arthur Brower / The New York Times

 

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Not Getting Better

In late July last year, not long before the stock market delivered a major “warning shot” with its sharp decline in August, we wrote about the transportation sector in Transportation Sector in Trouble – What are the Implications?. As we noted at the time, the sector seemed to send a potential “economic red alert”.

 

ghost fleetThe famous ghost fleet near Singapore

Photo credit: Richard Jones / Sinopix

 

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A Comprehensive Discussion of the Economy and Financial Markets

The Incrementum Fund’s advisory board has held its quarterly meeting on January 10, and the transcript has just become available. Readers can download the transcript via the link below this post.

 

 

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Fighting to Lose

BALTIMORE – Where are we now? Dow down 296 points on Tuesday – or just under 2%. Cruz and Clinton win the Iowa caucuses. Oil is back below $30. An election has been described as two wolves and one lamb voting on what to have for dinner.

 

Sheep-On-Voting-For-a-Lion-Or-a-Wolf-On-Election-DayWe’re going to make a difference on election day! Or maybe not…

 

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Leaders and Laggards

We have recently discussed the odd dichotomy that can be observed within the gold sector – there is a group of stocks that is doing extremely well lately (in fact, a number of sub-groups have acted well for quite a while), and another group that is lagging terribly in terms of performance. Many of the laggards happen to be domiciled in Canada (their production is however spread over numerous jurisdictions in many cases).

 

tasiastNight view of KGG’s Tasiast operation in Mauritania

Photo credit: Kinross Gold

 

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