Edward Harrison, Dylan Ratigan & Bill Fleckenstein: Thoughts on FOOD
by ilene - February 26th, 2011 4:55 pm
Courtesy of EDWARD HARRISON, Credit Writedowns
Bill Fleckenstein was back talking to Dylan Ratigan about the source of rising oil prices. (See the last Fleckenstein video here). Clearly, supply constraints and increased demand in emerging markets play the central role in creating a supply demand imbalance for a commodity where demand is price inelastic. I am not just talking about natural disasters and riots, I am also talking about peak oil, of course. That means prices for oil soar until we hit a recession and the resulting demand destruction.
However, at the margin there are other factors at play, one of which is pro-inflationary central bank policy. I have mentioned this a couple of times in the past. For example, regarding food price inflation, I wrote in November:
[Morgan Stanley Chief Economist Richard] Berner sees four forces at play, pushing up food prices: strong global demand, weather, energy costs, low food stock inventories. You can read the full note at the link below.
My take is a bit different. The rise in food and energy prices should be taken into consideration by government officials conducting pro-inflationary policies. What should be of concern regarding commodity price inflation is how it represents a regressive tax on lower income workers and consumers in emerging markets and developing countries. Lower income consumers spend a much greater percentage of income on food and energy. So when commodity prices increase, it has a disproportionate effect on them. One reason we saw food riots in emerging markets in 2008 has much to do with this.
Read Edward’s full article here >
Bill Fleckenstein gives his take in the video below.
Visit msnbc.com for breaking news, world news, and news about the economy
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Bill Fleckenstein: The Race To the Bottom Will Be Won By the Dollar
by ilene - January 20th, 2011 5:12 pm
Courtesy of Chris Martenson
"This printing money is going to lead to huge trouble. It’s going to lead to higher interest rates. It’s going to lead to more inflation, and at some point there is going to be a train wreck in the currency and the bond market."
Market commentator and money manager Bill Fleckenstein sat down for a recent interview with ChrisMartenson.com and excoriated the Fed and the monetary policy it’s pursuing. He and Chris discuss the factors that enabled Bill to be one of the first to accurately identify and warn of the housing and credit bubbles – and how history is now repeating itself via the profligate printing of US dollars. The interview covers a wide range of topics meaningful to the investor trying to make sense of where things are headed from here – including central banking culture, bubble psychology, high-frequency trading, inflation/deflation, and the true relative value of the dollar vs the Euro.
Click the play button below to listen to Chris’ interview with Bill Fleckenstein:
In this podcast, Bill sheds light on why:
- The culture of the Fed reinforces a belief in its infallibility. This blinds it to the fact that its interventions cause market players to adopt irrational behavior leading to misallocations of capital that eventually need to be corrected by the system (e.g., busts).
- Correlation between asset classes is the highest it’s been in 60 years. This is a result of the Fed flooding the market with liquidity. It makes it very hard for investors to be anything besides speculators.
- The SEC has been asleep at the switch for the past 15 years, leaving the system vulnerable to exploitation – of which HFT programs are just the latest example.
- A funding crisis looks inevitable: At some point the bond market or the currency market will revolt, resulting in a weak dollar and increasing bond rates – despite whatever the Fed wants.
- It’s perverse for the US to be rewarded for using a printing press indiscriminately without making any fiscal changes, while Europe is painfully adopting austerity and getting penalized.
In Part 2: Outlook for 2011 (for enrolled ChrisMartenson.com members - click here to enroll), Bill gets specific about what he predicts will happen in the bond and currency markets, as well as his specific outlook for 2011.
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FLECKENSTEIN: THE STOCK MARKET HAS LOST ITS DISCOUNTING MECHANISM
by ilene - June 30th, 2010 11:22 pm
FLECKENSTEIN: THE STOCK MARKET HAS LOST ITS DISCOUNTING MECHANISM
Courtesy of The Pragmatic Capitalist
Very interesting thoughts here from Bill Fleckenstein. Fleckenstein argues that the
To me the market is a non-linear dynamical system which is susceptible to substantial chaos. The market is very inefficient in the short-term due to the inefficiency of its participants. The idea of the efficient market and the market as an efficient discounting mechanism has been sold hook line and sinker to the public. We are taught that equities can’t go down over the long-term, that a PE ratio of 10 is “historically cheap”, that you can’t outperform the market, yet none of this is founded in solid proof, but rather a very short history of data that is currently available and adds up to nothing more than theory (a weak one at that). Fleckenstein’s comments are well worth a listen:
Source: Bloomberg TV
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The Federal Reserve is Public Enemy #1 – with Bill Fleckenstein of Greenspan’s Bubbles
by ilene - April 1st, 2010 2:15 pm
The Federal Reserve is Public Enemy #1 – with Bill Fleckenstein of Greenspan’s Bubbles
Courtesy of Damien Hoffman at Wall St. Cheat Sheet
Bill Fleckenstein has kept a hawk’s eye on what the government does to our economy. Most recently, Bill wrote an excellent article describing the new health care law as “the great health care bailout.”
I caught up with Bill to discuss three hot topics:
1) How the new health care law will affect our economy;
2) Whether the Fed has painted itself into a corner of low interest rates; and,
3) Whether the foreign debt crisis are an omen for what’s coming to the US.
The Federal Reserve is Public Enemy #1 with Bill Fleckenstein
About Bill Fleckenstein
Bill Fleckenstein is a writer for MSN Money, head of Fleckenstein Capital, and author of the acclaimed book GREENSPAN’S BUBBLES: THE AGE OF IGNORANCE AT THE FEDERAL RESERVE.
Click here for a free trial to Wall St. Cheat Sheet.
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DEEP THOUGHTS FROM BILL FLECKENSTEIN
by ilene - January 4th, 2010 2:36 am
DEEP THOUGHTS FROM BILL FLECKENSTEIN
Courtesy of The Pragmatic Capitalist
This is an excellent interview at King World news with Bill Fleckenstein. He covers some of the intricacies of short
[click on the picture]
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Short Seller Fleckenstein: I’ll Start Selling AFTER Earnings Season
by ilene - October 8th, 2009 7:31 pm
Short Seller Fleckenstein: I’ll Start Selling AFTER Earnings Season
Courtesy of Vincent Fernando at Clusterstock
Fleckenstein Capital’s twelve-year-old short-selling fund that shut down last December is planning to start hunting around again for opportunities.
Yet they’re waiting until after earnings season, and could even wait until early next year.
For Fleckenstein Capital, while 2010 could be a very rough year for the market, 2009 could end strong. Even these shorts don’t want to step in front of earnings season right now.
Bloomberg: Future bets against U.S. stocks will “almost certainly” include technology companies, especially semiconductor makers, Fleckenstein said.
“They’re going to report good earnings, but a lot of it is a function of double- and triple-ordering, so their businesses are going to look better than they really are,” he said.
In a Bloomberg TV interview, Bill Fleckenstein said he expects weak businesses to run into trouble next year, especially if rates start rising. Nevertheless it appears he wants to see the economy’s "less worse" trend come to an end before he takes action.
What does he favor in the meantime? Shares in gold related companies.
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RALLY & RECOVERY PAID FOR BY MONEY PRINTING
by ilene - August 21st, 2009 3:23 pm
RALLY & RECOVERY PAID FOR BY MONEY PRINTING
Courtesy of The Pragmatic Capitalist
Excellent thoughts and analysis here with Bill Fleckenstein who has been all over the downturn and the subsequent upturn in the markets:
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.