Just having a little family Karaoke at our house tonight. My husband does an awesome Billy Joel among others. He does a version of "Honesty" that knocks listeners speechless. (No kidding) The kids do rap songs mostly. Interesting. My Dad was a professional Opera singer. It’s all good. My best is Stevie Nicks (but I do need a very kind audience).

I just wanted to slip in a warm wish message to all of you out there in the big wide world. I get messages every day from readers of my book and this blog all over the world. I want you to know that I hear you and I appreciate the time you take to read and write to me. A few gold bugs have been mad at me lately but that's ok. (We will buy gold again some day, when we get a buy on our rules, honest.) Many readers write to tell me that I help them through my writing and speaking. I want you to know that you help me too. All of my clients and readers inspire us to try really hard every day.

I know things are a bit rough for many right now. But things will be better again down the road. I really believe that. We will get through this. We can learn and use this experience as fuel and wisdom for the future. We humans are made of sturdy stuff. Keep the faith; keep looking to the light. Love your life as hard as you can. And where you need change, jump at it with all your heart.

Blessings to you all and to all a good night.   more »

I like Gary Shilling. He has been around a long time, seen it all and (most importantly) took notes. He has a knack for connecting key global themes. He did this interview Friday:



The future is a much different place from where we have been the past 20 years. This means lean, efficient, smart will win. Excessive, wasteful, sloth will fail. Those who are resourceful and flexible will adapt and thrive. Those clinging to the past status quo and a sense of entitlement will not.   more »

Thanks to Jim Puplava of the Financial Sense Newshour for having me as a guest this morning on his broadcast. You can hear the 30 min audio clip here on their web site.   more »

News of the Madoff Fiasco hit this weekend. Bernie Madoff founder of Bernard L. Madoff Securities Inc., based in New York City was apprehended by federal investigators. Founded in the 60's Madoff's firm boasted an impressive list of A-clients both high net worth individuals and institutional accounts. For years and years, Madoff and company paid clients an incredibly stable dividend of 1-1.5% a month, almost without fluctuation. When fixed income rates went below 3% over the past few years, and equity dividends were less than 2%, Madoff continued to pay out 15% a year. Miraculously. No one knew how this could be. It defied logic. Sadly so long as they where making out like bandits, few investors asked questions.

When Madoff was asked to explain his approach and his success, he spoke in circles of black box, gobbley gook and secrecy; but always with calm and confidence. Watch this YouTube clip of Madoff speaking in 2007. As you watch, keep this time-worn advice in mind: if you cannot understand what a person is doing with your money--don't sign up. If returns seem too good to be true--they likely are.



This article by one of the long time Madoff investors speaks honestly about the lure of easy money...   more »

I admit it, I am a market junkie. I spend most of my waking hours thinking about world risk markets. But then our clients pay me to think and worry about this stuff. I have an excuse. Understanding how the many parts and players fit and move together and against one another is what makes this field so fascinating, all consuming, daunting and incredibly humbling. It is truly the biggest Rubik's Cube ever designed.

Like the most unruly child in a family, stock and commodity markets have been demanding most of the world's attention this year. But in our management firm, about half of our investable assets are allocated to fixed income, so we do need to pay a lot of attention to what is happening in the world of interest rates, credit spreads, and overall price trends. In recent weeks bonds have slowly picked up their boil on the back burner.

We noticed prices for the highest quality issuers spiking in October. Bonds that we already owned were enjoying nice gains, but capital we needed to reinvest on the fixed income side was becoming harder and harder to place. Prices have climbed so high, and yields have dropped so low that bonds worth buying on our rules have literally dried up...   more »

Ms. Park will be a guest on CBC News Business on Thursday Dec 11 at 6:30 pm, and MoneyTalk with Patricia Lovett-Reid on Monday Dec 15 at 8 pm.   more »

This week the International Monetary Fund (IMF) released its economoc outlook report for October 2008. Some lowlights:

• World growth will slow amid most dangerous financial shock since 1930s.
• The advanced economies grew at a collective annualized rate of only 1 percent from the fourth quarter of 2007 through the second quarter of 2008.
• No growth in many advanced economies until at least mid-2009.
• Emerging and developing economies have not decoupled from this downturn.
• After 5% global growth in 2007 the IMF now predicts 3.9 percent in 2008 and 3.0 percent in 2009, with a modest recovery expected to start in the later half
of 2009. -Global growth is not expected to return to trend until 2010.

They also cite significant downside risk to present forecasts...   more »

This Obama interview yesterday offers some encouraging signals. He knows he is inheriting a trillion dollar deficit before he even gets started. There is no magic fix here. It will take time to pay down debt and build up savings and financial health again in the economy. But the Obama economics team seems to understand that stimulating sustainable jobs (rather just stimulating more credit) is the path out of the present downturn. Remember how the recovery coming out of 2003 was called the "jobless recovery"? That was because the spending of that expansion came primarily from credit growth, rather than job and wage growth. This time, the Obama team understands that real jobs are needed for this solution. Spending in health care, schools, energy efficiency and infrastructure can all serve to strengthen America over the next many years. Directing government spending at intelligent, enriching causes that will build up assets rather than blow the world up? What a novel concept. This is a start in the right direction.

   more »

This clip is a riot. Proving yet again that all the best humour has truth at its base.

   more »

World markets are back in testing mode today. We are watching carefully to see how they fare. As of 1pm the TSX at 7845 is some 121 points above its previous all time closing low this cycle of 7724 on November 20, 2008. One would expect buying pressure to kick in strongly in this area; if it is able. If there is a big bounce again off the Nov 20 low that would be constructive and may suggest we have found at least an interim bottom this cycle.

The big wild card here is how much more forced selling we will see from funds and levered players having to raise cash by year end. If the Nov 20 lows are breached, then we are back searching for the next bottom of this downturn.

Our worse case scenario still has its eye on the 2002 lows for the TSX of 5678. That is still 2167 points below where we are trading today and would be a big 62% below the cycle peak last summer of 15200 on the TSX. That would admittedly be one “bad-ass” bear market. Having already fallen 48% to date from its peak, hopefully the TSX won’t go all the way back to its 2002 low. Although this same hope was recently dashed in the US markets as the S&P and Dow broke through to their previous cycle lows, erasing 100% of the price gains they had made since the last expansion began in 2002. At this point we can still hope that Canada can avoid the ’02 re-test. But that may be a low-probability hope at this point...   more »

Thanks to Alex for a very kind article on the healingphilosophy.com "The ethical financial advisor". I just received a link today. It is too bad that ethical and financial advisor have come to seem like oxymorons. I know there are many good-intentioned people out there giving financial advice. The trouble is that the equities sales culture has trained them and signs their commission cheques. Everything they have come to believe and advise comes from that bias. Clients simply can't afford to take financial advice from the financial sales world. There must to be product providers, sellers, and advisors, they are three distinct roles with separate and naturally conflicting agendas. The three just cannot be one.   more »

A friend sent me this clip which spoofs Scotiabank and the "You're richer than you think" marketing bologna. Our local Scotia branch still has a big outside banner with this saying. I keep thinking they will wake up and take it down one of these days as a dark slogan for a by-gone era when the banks levered up their profits by convincing everyone that gutting their home equity was sound financial planning.

If you are feeling really sensitive about portfolio losses you may find it in poor taste, sorry. There is always some truth and irony in the jokes of course. But remember admitting and embracing our mistakes is the first step to learning from them. There is no shame in our making mistakes, the shame is in repeating them.

   more »

Peter Schiff is a media commentator, speaker, author. I have not met Peter. According to some reader feedback, apparently his investment timing has been bad (althought he has a lot of company there) and I make no defence or endorsement of him. But I have to agree with his comments in this YouTube clip when he says our present problems are more from the boom than the bust. The up side of this down cycle is that it will eventually cure (at least for a while) all the slothful, wasteful, reckless habits that got the world into its present pickle in the first place.

But just so we are clear, my central point is that individuals can understand the business cycle in advance and use it to their advantage. We are not helpless and doomed to suffer blindly through it every 4 or 5 years. It should only take one cycle for rational people to "get it". Riding the same roller coaster straight up and then straight down time and again without figuring out any system or breakers for controlling our ride is self-destructive, insanity.

   more »

Heading into the final trading weeks of 2008, this surely is one year people are happy to kick out the door.

It has been one crazy year! The statistics are so over the top they are hard to digest. Asset prices around the world have literally lost trillions in value over the past 12 months.

Over the last 50 trading days, the average absolute daily percentage change of the S&P 500 has been an insane 3.82%! That means the S&P 500 is averaging a daily move up or down of about 4%. Sound normal to anyone? Compare this to February of last year, when the 50-day average absolute change was a barely-beating 0.33%.
See: The most volatile market ever.

Perhaps worst of all, as schizophrenic and damaging, as this corrective phase has been this year, its relative brevity to date suggests that we are still not through to the recovery just yet.


See www.chartoftheday.com

Yesterday NBER officially declared that the US entered a recession a year ago in December 2007. Unofficially they said we would be unlikely to see it end before the middle of next year. This would mark the longest recession since the Great Depression. Today as the big three US automakers re-jig their plea for a bailout, and retail store chains announce hundreds of closures, we can’t help but wonder, what next?   more »