Global Economy

How Much Money is Enough for a Comfortable Retirement?

In 2011, the oldest members of the Baby Boom generation reached retirement age and over the next 15 years, around 8,000 Boomers per day will turn 65. And as more Americans contemplate life in retirement and preparing for it, they need to have a clearer picture of what their income (NYSEARCA:AGG) needs will be after …

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Chinese Stocks are a Wonderful Value Trap

When it comes to properly assessing China’s stock market, are financial experts bad or just blind? Here’s what they’ve been saying: Buck the Trend, Buy Chinese Stocks – Forbes, Jim Oberweis, 7/9/13 Huge Reforms in China Could Lead to Big Upside for Top Chinese Stocks – 247wallst, 11/19/13 It’s Time to Buy China – MarketWatch, …

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Government Overspending is Fueling Debt Boom

Each month, our Mega Investment Theme Report organizes the order of major events by their impact and importance. And swelling sovereign debt (NYSEARCA:BWX) continues to be a stubborn trend that has made every single report. In Ernest Hemingway’s classic novel, “The Sun Also Rises” someone asks the character Mike Campbell how he went bankrupt. He quips: “Gradually, then …

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The First Inning of China’s Bear Market

Never mind China’s reputation for cooking the books; its raw uncooked economic data is sagging. China’s unexpected drop of 18.1% for February exports was the biggest decline in Chinese exports in almost five years and its biggest trade deficit ($23 billion) in two years. (Analysts, that over-optimistic bunch, had forecasted a 7.5% rise.) In January, …

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Russia Isn’t Only Trouble Spot for Emerging Markets

As if war between Russia and Ukraine wasn’t bad enough, emerging market stocks (NYSEARCA:BKF) are still dealing with two other major problems: China’s unfolding credit crisis and Latin America’s currency and political turmoil. Russia’s president Vladimir Putin said that Russian troops have the right to invade Ukraine, setting up the possibility for combat between the …

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Valuation Models Say Stock Market Losses Ahead

Overpaying for anything is a bad idea. But it’s an especially bad thing when it comes to investing in the stock market. James Montier at GMO correctly observes: “Over the years I’ve witnessed many attempts by the practitioners of this most dark art to justify why tried and tested measures of valuation are no longer …

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Is this the Weakest Bull Market in History?

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one,” said Charles MacKay in his classic book the Madness of Crowds. A closer examination of the U.S. stock market’s (NasdaqGM:QQQ) action shows how the herd is …

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Are Corporate Earnings Being Gamed?

Are corporate earnings really as great as the executives at the helm and Wall Street want us to believe? Over 70% of S&P 500 (^GSPC) companies that have already reported beat analysts’ earnings estimates during the fourth quarter. Furthermore, 66% reported higher sales revenue, which is above four year averages, according to FactSet.  Equity permabulls …

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China’s Busted Bank Loans Hit 2008 Crisis Levels

Depending on whom you believe, China is either on the verge of economic utopia or a major economic shock. And the data is leaning toward the latter. Non-performing loans made by Chinese banks soared to $97.5 billion in the final three months of last year, according to the China Banking Regulatory Commission. That matches levels …

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Emerging Markets and Parallels to the pre-2008 Crash

Are there parallels between the pre-2008 U.S. stock market crash and emerging markets today? Emerging market bulls (NYSEARCA:EDC) say that cheap market valuations are a reason to own stocks from countries like China (NYSEARCA:FXI), Brazil (NYSEARCA:EWZ), Russia (NYSEARCA:RSX), and India (NYSEARCA:EPI). Are they right? AUDIO: Listen to Ron DeLegge @ The Index Investing Show A …

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Wall Street is Still Optimistic, Should You Be Too?

Never mind the S&P 500’s (^GSPC) mild nosedive. Wall Street’s analysts are still cheerleading stocks for 2014 as if nothing has changed. How bullish are they? Among Wall Street’s analysts, 18 out of 21 predict a 3% or greater increase for the S&P 500 (NYSEARCA:SPY) in 2014.(see table below) One of the most bullish 2014 …

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Emerging Market Stocks: Bargain or Value Trap?

I was recently lectured on Twitter by a Wall Street strategist about why emerging market stocks (NYSEARCA:EEM) are a raging buy. Among his top arguments for being and staying long were extremely negative sentiment and chart patterns. He was particularly adamant about “depressed values” in Chinese stocks. Interestingly, the view among other strategists that emerging …

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Is Stock Market Sentiment Too Complacent?

Here’s your “lost decade” update: The S&P 500 (ChicagoOptions:^GSPC) has risen nine out of the past 10 years and in 2013 just posted its best yearly performance in a decade. Have stock market investors become spoiled and overconfident? Measuring the stock market’s mood or “sentiment” through news headlines, surveys, and data give us clues about …

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Gold Miners Are Beating the S&P 500

If you drop a penny from your pocket, it will be a very small bounce. But if you drop the penny from atop the Empire State Building, the magnitude of the bounce will be great. In the case of mining stocks, that bounce from a very long and painful fall has been so great – …

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Will Shadow Banking Take Down China?

To China, shadow banking has been both a blessing and a curse. It’s been a blessing, because it’s created an immediate steroids like impact on China’s economy of  falsified strength and growth. It’s been a curse, because the art of gaming economic growth through credit expansion never has a pretty Hollywood ending. In China, credit …

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