India: Land of Energy Opportunity

Quick, what country is the economic engine that will power world growth? If you answered “China,” you’re far from alone. But there’s another country that deserves as much attention and better yet, is much friendlier to investment: India, home to 1.2 billion people. To electrify all those houses, power the industries that keep all those people employed, and fuel the vehicles that more and more Indians own, India’s energy needs are shooting skyward

Green Energy – Too Many Subsidies, Too Little Performance

Any politician who talks of a green, utopian US – where wind and solar produce most of our energy, electric cars put power back into the grid, green fields of corn produce clean fuels, and millions of Americans work in green technology factories – is creating a fanciful vision so far detached from reality it should really be called a lie. Such tales are designed to encourage a public that is increasingly despondent about the future, but the policy moves that have been made in support of these fantasies have cost taxpayers tens of billions of dollars

Chart of the Day: Market Year in Review

Wow! Who would of thunk it. The Dow the only major global equity index positive for the year. U.S. Treasuries up 15-20 percent, the dollar index (Dixe) positive; Brazil and Chinese equities down 20 percent and India down almost 25 percent. Copper was on everybody’s buy list at the beginning year, finished down over 20 percent; and foodstuffs had nowhere to go but north, finishing flat after spiking earlier in the year and taking most of the political leaders in North Africa with them

Footnote 2011: Being cautiously optimistic was right

In January, I wrote my prognosis for 2011. The title was “Cautiously Optimistic Into 2011″. I intend to write another post like this early in 2012 with asset allocation and market calls for the new newsletter. But right now I just want to review the basic outlook I presented.

I had seven major conclusions. Here’s what I said and how well it has stacked up

Nonlinear Thinking: The Robot Farmer

In the ongoing series of posts on technology’s threat to existing labor roles, Global Macro Monitor highlights this video on robot farmers

Thoughts on Europe and the global synchronised slowdown

We are in a second synchronised global growth slowdown. Moreover, the policy response must be more muted this go round as the public sector is more indebted and has less policy space than in 2008 or 2009. Expect policy inaction followed by fits of volatility due to inaction. This points to a risk off a lot more than a risk on environment

Bubble Trouble in the U.S. Heartland?

The “smart money” has been buying up farmland hand over fist for the past few years and you can see how they helped drive up land prices in the U.S. heartland. Some think this is the place to be if the shit really hits the fan. Not gold, but productive assets that you can eat. Nevertheless, with ag commodities starting to rollover, farmland prices have probably seen their best days.

The Ugly Chart Contest

Here’s a couple ugly charts we’re monitoring: China’s Shanghai Composite stock index and Commodity Research Bureau Index (CRB). Do you think there’s causality here? Remember the “China is buying/hoarding every commodity” story

Running through Italian default scenarios

The most important debate of our lifetimes is now ongoing. The question: Should the ECB “write the check’ for the euro area national governments? In thinking about the answer to this all-important question, I prefer to shift the focus by changing the verb “should” to “will”.

Answering this slightly different question is much more important than answering the first question for you as an investor, a business person and as a worker. If the ECB writes the check, the economic and market outcomes are vastly different than if they do not. Your personal outlook as an investor, business person or worker will change dramatically based upon this one policy choice. The right question to ask then is: Will the ECB “write the check’ for the euro area national governments

Chinese coal now costs over $150 per ton again – huge gap to Australian prices

The Ministry of Finance is pumping money like mad into the weakened Chinese financial sector, over 1 trillion yuan, in order to shore it up from the souring of loans from all of the malinvestment over the past few years. If the Chinese succeeded in engineering a soft landing, Andy Lees believes the record premium for Chinese coal would disappear as Australian coal prices started to play catch-up

Gold and the Three McBears

Now the market must contend with three macro bears: 1) how much and how Asia slows; 2) the Eurozone debt crisis; and 3) the slowing U.S. economy and employment/political problem. Continued volatility and 1101, 1101, 1101 on the S&P500!

Finally, we warned last week gold could take a big swan dive and $1,700 was where the “river meets the waterfall.” The chart below shows the yellow metal hasn’t been below its 200-day moving average in more than 2 1/2 years. The power of the rally has been stunning. We now think gold is set to test its 200-day moving average at $1,527, which is the level we will take a shot at getting long again

The Biggest Bubble of All Time

What is surprising is that over the past decade, the price rises you find for 33 commodities are just about beyond the realm of possibility—2, 3, and 4 standard deviations away from trend. It is a boom without any precedent. Quite simply, nothing even close has ever happened before, in any market, including hi tech bubbles and real estate bubbles