Speaking of Elections…
Many of our readers want to know our thoughts on the upcoming election in the U.S. What will happen to the markets if so-and-so wins? Will the economy fall off the fiscal cliff? Why is the market so strong in light of such a dismal political and fiscal environment?…
One Can Get Lost in the Trees & Forget to See the Forest…
What Investments are Poised to do Well in This Geopolitical Environment?
Conference Call Announcement
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Guild Investment Management will be hosting its 3rd conference call for Gold Subscribers: (Global Investing In The Current Macro Environment) on October 12th, 2012 at 10:00AM PST.
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Recovering Home Prices Bode Well For National Psychology & For Markets
Credit Suisse’s Economics Director Jonathan Basile has drawn our attention to positive data from the S&P’s Case-Shiller national home price index. July’s +0.44 percent month-over-month improvement came in slightly under market expectations, but capped six consecutive months of improvement — the first six-month roll in three years. The annual rate (+1.20 percent) was the best since August 2010, and the gains were national, not just restricted to a few regions. The Case-Schiller data showed gains in 18 of the 20 metro areas.
This is an encouraging development. A great deal of U.S. market and consumer confidence depends on stable home prices, and the slow recovery of home prices helps reinforce a national mood of recovery and optimism. Most U.S. consumers have their home as the existential center of their sense of financial well-being.
Rising home prices float a multitude of boats. When home prices are up, it makes sellers want to sell, buyers want to buy (especially those who have been waiting for the market to bottom out), and lenders want to lend (since their collateral will be less risky). Home price appreciation increases overall consumption and is a tremendous spur for economic activity, which the U.S. urgently needs as the recovery progresses. When home prices are up, fewer borrowers find themselves still underwater; fewer mortgages are distressed; banks have fewer non-performing loans, and some bad paper begins to turn good — removing that much of the bad debt overhang that drags on the economy. Local governments’ finances improve, as fewer property owners can succeed in claiming reduced property values and thus reducing localities’ tax bases.
No doubt low interest rates and Fed actions are contributing to this positive trend. We think it’s a good sign — and we hope it continues.
Drought, Food, & Energy
With the Northern Hemisphere, and particularly the U.S., experiencing the worst drought in many decades, we are seeing the impact of adverse weather events on global food, water, and energy supplies, all of which are linked in complex relationships. The political debate will continue as politicians float their various policy prescriptions; however, in the meantime, governments, businesses, and consumers will be forced to respond to shifts and disruptions that may extend over the next several years…
Lesser-Developed Countries Bear the Brunt
The cost of foodstuffs in the developed world is mostly comprised of labor, processing, transportation, and marketing, so the price of packaged food will not increase markedly as a result of the current drought. Food prices elsewhere are a different story…
It’s Not Just Food
While global food demand is set to increase by 50 percent by the year 2030…
What is Ethanol’s Role? Who are the Technological Winners in Meeting Demand? Who will benefit? Become a Gold Subscriber today and get the full story.
Guild Basic Needs Index (August 2012)
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In this week’s Premium Global Market Commentary available for Gold Subscribers, we also discuss:
- Worldwide Regulatory Sentiment Against High-Frequency Trading (HFT) Gains Momentum
- Japan’s “Lost Generation” Gets its First Firebrand
- Monty Guild’s Weekly Global Market Summary
To get the full content and much more, become a Gold Subscriber today to receive our weekly Premium Global Market Commentary, where we discuss our formulated plans and investing strategies.
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