All Posts Tagged With: "CPI"

Fed Bailouts Could Cost Taxpayers $2.5 Trillion

Dom Rich says the Congressional Budget Office (CBO)’s estimates of the taxpayer losses from the bailout of Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) are implausibly conservative.

The real estate bubble of this decade was the biggest of any asset class in history. Rather than the CBO’s $25 billion figure, Dom says the real cost is at least $1.3 trillion, and could be as high as $2.5 trillion.

And this doesn’t even account for the inflationary consequences of rescuing Wall Street. The Fed is on a money printing binge session, and anyone holding dollars will be picking up the tab…

Russell McDougal Says Too Much Debt Puts Dollar on Death Row

Russell McDougal at Investor’s Daily Edge says there is too much dollar-based debt that can’t be paid back for the buck to survive in its present form. Another Nixonian dollar default is coming, this time via hyperinflation. And the same people who have sentenced the greenback to death will be launching its replacement, the Amero.

McCain Win Would Boost Oil, Defense and Big Pharma Stocks

An inherited budget deficit of over $400 billion will tie the hands of whoever is elected president this November.

However, Money Morning’s Martin Hutchinson says a McCain victory would boost defense and Big Pharma stocks. And McCain’s VP choice, Sarah Palin, is a strong advocate of more drilling for oil, which is encouraging for domestic oil stocks.

On the other hand, McCain would likely hold onto Ben Bernanke as Fed chief. This would mean an extended period of low interest rates and painful inflation down the line.

Bill Bonner Says Get Ready for an Era of Credit Contraction

Daily Reckoning editor Bill Bonner is sticking to his view that the trend of the last 25 years - falling interest rates, rising stocks, stable inflation - is coming to an end. The credit expansion of that period should give way to credit contraction in the coming years. And in trying to prevent the inevitable with its bailouts, the Fed is just making matters worse…

Short Tiffany & Co (TIF) on Gloomy Retail Outlook

Taipain Publishing’s Adam Lass says investors should be wary of luxury retailers that claim they will emerge unscathed from the current economic downturn.

Real incomes and real private spending are falling, inflation is ticking upwards and consumer confidence is in the gutter.

This makes Tiffany & Co. (NYSE:TIF) - with its overly optimistic earnings expectations for Christmas spending - ripe for shorting.

Why Are Investors Bothering With Bonds?

Daily Reckoning editor Bill Bonner is amazed that investors continue to buy Treasury bonds, when official inflation is running way above the yield of on 10-year Treasury notes. Americans have grown so accustomed to stable inflation and low interest rates that they have forgotten the lessons of the ’70s and early ’80s. Bill says every generation of investors in the last century has faced a major crash, and now it looks like it could be our turn…

Why Positive Data Doesn’t Mean Economic Recovery

Several data releases last week - including new home sales, durable goods orders and GDP growth - signaled an improvement in the U.S. economy. But Rick Pendergraft in Investor’s Daily Edge says it is important to distinguish between stabilization and reversing course. A huge backlog of unsold houses and ongoing job losses will keep the economy on shaky ground for the time being…

Two Reasons Why 3Q U.S. Growth Will Disappoint

Addison Wiggan and Ian Mathias in Agora Financial’s 5. Min Forecast have already warned readers about the risk of taking yesterday’s 3.3% rise in U.S GDP figures at face value. Here, Charles Delvalle at Investor’s Daily Edge says the government’s economic stimulus checks and a weak dollar made U.S. growth seem more impressive than it really is. Don’t expect 3Q data to be quite so favorable…

Dow’s (DJI) Earnings Slump Will Lead to More Inflationary Policies

Financial charts can generally look good or bad. But sometimes, one comes along that is downright ugly. The Rude Awakening’s Joel Bowman says the earnings chart for the Dow Jones Industrial Average index (.DJI) is particularly sore on the eyes. Earnings were negative in Q208, for the first time ever, giving the index a price-to-earnings ratio of nil. Such losses will heighten deflationary fears, encouraging the government to crank up its inflationary policy. More from Joel…

Americans Must Cope With a Lower Standard of Living

The Daily Reckoning’s Bill Bonner says Americans are going to have to get used to a lower standard of living. After living beyond their means for so long, they will have to leave beneath their means to survive the correction.

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