“The biggest bubble in recent history is heading for the mother of all hard landings,” says Albert Edwards

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The chart and paragraphs below come from friend, scrumming partner and uber-bear (equities, not bonds), Albert Edwards, global strategist from Société Générale Cross Asset Research.

“We are in a profits recession, both at the developed and emerging level. My Quant colleague, Andrew Lapthorne, pointed out to me that forward earnings growth for both MSCI developed and emerging are now falling. For we are at that point in the cycle where the easy productivity gains are over. In the US, for example, we can see unit labour  costs running well ahead of output price inflation, leading to a downturn in the margin cycle. The equity markets seem able to ignore this inconvenient truth for the moment while they think the US economy might be reviving and China’s policy makers are successfully engineering a soft landing. But any evidence to the contrary at a time when profits are already under downward pressure will likely be met by an unforgiving response.”

Edwards concludes by saying that with global stock market profits in a recession, it “explains why US bond yields might dive much lower”. He therefore remains overweight long government bonds and remarked: “Government bonds will become even more expensive on a 6-12 month view with an evaporation of confidence in the sustainability of the US recovery and/or a China hard landing (the former could occur with or without the latter).”

Source: Albert Edwards, Société Générale Cross Asset Research, May 3, 2012.

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Prieur’s Readings (May 3, 2012) – staying up to date with top money news

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As part of my daily routine, I publish all my reading (including snippets from other well-known commentators) in an Internet newspaper, “Investment Postcards Daily”. I publish the paper even when traveling for extended periods like over the past month. This is therefore a sure way of staying in touch, even while sitting at John Mauldin’s annual investment conference in Carlsbad right now.

Click here to read the latest edition of the paper.

The newspaper’s subscription is separate from that of the “Investment Postcards from Cape Town” blog. To ensure you receive daily alerts of the updated paper, click here and then subscribe for free by clicking on “Subscribe” (top right of newspaper, just below my photo) or by following me on twitter (click here).

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Jim Rogers: Markets headed for disaster in 2013

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Rogers Holdings Chairman Jim Rogers on why he has a bearish outlook for the markets.

Source: FoxBusiness, May 2, 2012.

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Prieur’s Readings (May 1, 2012) – staying up to date with top money news

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As part of my daily routine, I publish all my reading (including snippets from other well-known commentators) in an Internet newspaper, “Investment Postcards Daily”. I publish the paper even when traveling for extended periods like over the past month. This is therefore a sure way of staying in touch.

Click here to read the latest edition of the paper.

The newspaper’s subscription is separate from that of the “Investment Postcards from Cape Town” blog. To ensure you receive daily alerts of the updated paper, click here and then subscribe for free by clicking on “Subscribe” (top right of newspaper, just below my photo) or by following me on twitter (click here).

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Don Coxe webcast – updated (April 27, 2012)

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Don Coxe has updated his popular webcast on Friday, April 27, 2012 – good news for his followers. You can access the recording here or from the sidebar of the Investment Postcards site (the column on the right-hand side) by clicking on Don’s photograph.

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Marc Faber interview: Keynesian clowns, Middle East to blow up, and money printing

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FutureMoneyTrends.com has released a two-part interview with Marc Faber of the Gloom Boom & Doom Report. He provides his predictions for the economy, stocks, and energy markets. Faber also gives advice to young people entering the real world as well as a better way of looking at success.

His advice to young people …

“My advice to young people is that the degree is not important. If you have parents that can pay for your degree, then I would take one. If I had to borrow a lot of money, I’m not sure I would take one. I would try to work for someone who is successful and acquire knowledge from them. Whatever you do, you should do with a lot of passion and heart and like what you do. If you like what you do, you will do a better job than if you are indifferent to what you do at your job. I think there are plenty of opportunities in every field.”

Faber continues on the definition of real success …

“I think in life success comes on many different levels, monetary success is just one of them, there are many other ways to be successful in life. If you have a happy family and are a good father, this is also a measure of success, if you can help other people this is also a measure of success. I think our society over rates monetary success and associates success with having a big house, having 3 cars, being able to go on holidays and live the good life when in fact, these are all relatively superficial symptoms of success.”

When focusing on the economy, Mr. Faber says real inflation is crushing consumers. If you look at insurance premiums, college tuition, food, energy, and taxes, we are seeing the result of inflation.

“The Keynesian clowns are causing a lot of volatility in the markets and economy.”

Part 1:

Part 2:

Source: FutureMoneyTrends.com, April 29, 2012.

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