Economy

Comparing the level of the Vix Index of implied equity volatility to the level of the 10-yr Treasury yield is a handy way of gauging how extreme market sentiment is. The Vix index is a good proxy for fear (because the implied volatility of options determines how expensive it is to purchase options in order to limit one's downside risk), and the 10-yr Treasury yield is a good proxy for the market's long-term outlook for growth and inflation. When you combine a high level of the Vix with a low level of the 10-yr, you have a market that is not only very fearful but also very pessimistic about the future. [IMO, however, we may well have time on our side. Here's what I mean by that.] Words: 730

A recent survey conducted by Information Management Network (IMN), global organizers of institutional finance and investment conferences, showed that, while 93.3% of respondents believe market volatility will remain the same or increase in 2012, 87% cited a consistent or increased risk appetite in the next six to 12 months with 62% investing in a variety of alternative assets. Read on for more survey findings. Words: 401

Believe it or not but according to research undertaken by Credit Suisse, a major global private banking, investment banking and asset management company, the top 10 countries with the highest average wealth per adult in 2011 DO NOT include the U.S. or Canada but DO include Belgium, whose credit rating has just been downgraded by Standard & Poors, and Italy, which is on the verge of being bankrupt. Below is a list of the 10 countries whose citizens are the richest. Words: 1095

Decisive policies must be urgently put in place to stop the euro area sovereign debt crisis from spreading and to put weakening global activity back on track. [If not we can expect to see a] massive escalation in economic disruption, an increase in the risk of a credit crunch [and] the global economy tipping into a recession. Words: 834

In a speech to the Canadian Club in Toronto this past week Canada's Finance Minister Jim Flaherty urged European leaders to find a solution to their debt crisis as it has spread beyond the eurozone and into credit markets worldwide creating a "dire and pressing problem" that threatens the rest of the world with possible "social unrest and instability". Words: 870

Given the hectic lives most people lead these days there is not much time to surf the internet in search of informative and well-written articles on the health of the economies of the U.S., Canada and Europe; the development and implications of the world's financial crisis and the various investment opportunities that present themselves related to commodities (gold and silver in particular) and the stock market. Not to worry! I have done it for you. I read hundreds of articles each day, select the best and post edited excerpt summaries on munKNEE.com - Your Key to Making Money. Below are introductory paragraphs and links to the top 10 for the week ending November 19th, 2011.

The market believes that there is more profit to be made in speculation than in new business investment - and speculation is what you get when you weaken the incentives to invest in productive activities for the long haul. In fact, fear and uncertainty are inhibiting growth [- almost everywhere - as shown in graphic form in the 8 charts below]. Words: 1000

In 1956 Hubbert predicted that US oil peak [production] would be sometime between 1969 and 1971 for [which] he was ridiculed...[but it did precisely that - ] in 1970... Then, in 1974, he predicted [that] the world ] production of crude] oil [would] peak [around] 1998 [qualifying that projection by saying] that if OPEC were to restrict the supply, then the peak would be delayed by 10-15 years which would put it at 2008-2013, or exactly right. OK, now is anyone willing to make a bet that Hubbert's THIRD prophecy about the cultural crisis he expected is wrong? Didn't think so. Here it is [- and I include in the article several suggestions on how Hubbert's 3rd forecast might actually be averted were the powers to be agree to take drastic action, which is unlikely]. Words: 1369

The unemployment rate declined [slightly in October] from 9.1% to 9.0%...[but a close look, in chart form, at the pattern of unemployment compared to the S&P 500, the extent of unemployment over 27 weeks duration, the ratio of employed people to those aged 16 and over, the average length of unemployment and how extensive unemployment has been in this most recent recession compared to each of the others over the past 60+ years, is very revealing as to how serious the situation is. It is very depressing, indeed.] Words: 601

[Unfortunately,] for the U.S....its budget deficit is growing in spite of the fact revenues into the treasury continue to grow...Given the low level of interest rates on the Treasury's debt it would not take much of an interest rate spike in the U.S. to negatively impact the government's budget. [So, in reply to the unspoken question on everyone's mind, "Yes, the debit crisis could most definitely spread to the U.S." Let me explain further.] Words: 633