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Pragmatic Capitalism

Practical Views on Money & Finance

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Review and Forecast by Gary Shilling

In the third quarter, real GDP grew 2.8% at annual rates from the second quarter. Without the increase in inventories, the rate would be 2.0%, in line with the 2.3% average growth since the economic recovery commenced in the second quarter of 2009.

Stop Investing In Hedge Funds Now! Oh No, Wait A Minute…

Here’s the other side of the hedge fund debate that has been raging in recent weeks.  In case you haven’t been paying attention, a number of well known media outlets have published articles that have argued that hedge funds aren’t all they’re cracked up to be.  I’ve been pretty hard on hedge funds as well… Read More

John Thain: 2008 Could Happen All Over Again

“If you are asking about too big to fail and can what happened in 2008 could happen again, the answer is yes, it absolutely can happen again. If anything, too big to fail is a bigger problem because the biggest financial institutions are more concentrated today than they were. Dodd Frank did not solve too big to fail.”

Hulbert Gold Sentiment at Record Lows

The latest development worthy of “decade extreme” or “record extreme” within the Precious Metals sector, comes to us thanks to Mark Hulbert Financial Digest. According to Mark’s latest WSJ column, there has been a huge plunge in exposure of various Gold newsletter advisors. Currently, the Hulbert Gold Newsletter Sentiment index (HGNSI) is at -31% net short, a historical record low since the inception of the survey in 1997.

Chart of the Day: Silver Shorts Surge

Today’s chart refocuses on the precious metal sector and in particular investor positioning towards Silver. Hedge funds and other speculators are now so negative on the metal, that the short positions have reached the highest level in the last 17 years (possibly even longer).

Is the Lack of Bearish Sentiment Bearish?

It has been awhile since I discussed equity market sentiment and that is because not much has changed. Bulls continue to get more bullish, the sun is shining and everyone is singing “Kumbaya my lord”. It is worth noting that overly optimistic readings we saw earlier in the year have put a stop to a rally in variety of risk assets, including:

Helicopter Money

Ideas about ‘printing money’ and ‘helicopter money’ are in vogue. This column unpacks these misleading terms and explores what quantitative easing and Overt Monetary Finance might mean for the deficit. The case for Overt Monetary Finance needs to be balanced by considering the distortions which quantitative easing – and, in fact, potentially Overt Monetary Finance itself – might have on bank balance sheets, as well as their potential to damage central-bank independence.