My Two Cents - Weekly Commentaries

The Next Bubble?

andy@sutton-associates.net — Fri, 11 May 2012 15:04:15 -0400

Since the housing bubble burst spectacularly in late 2007, many analysts have been actively seeking out the next likely explosion. Rest assured, it will be related to debt in some way. US Treasuries, credit cards, and potentially another disaster on Wall Street thanks to over-leveraging have all been mentioned as potential leading candidates...

Still on the Fence?

andy@sutton-associates.net — Fri, 20 Apr 2012 15:22:39 -0400

Lost among never-ending talk in the mainstream media about the ‘modest recovery’ being experienced in America have been some rather poignant headlines that are telling a completely different story. I’ve used up many weeks to outline the flaws regarding how our economic growth is measured and suggest more responsible alternatives. I don’t expect Washington to change, however...

Gas Price Redux

andy@sutton-associates.net — Fri, 13 Apr 2012 14:07:06 -0400

It is truly amazing how much can change in four years. Or, more accurately, how little things change in terms of human behavior. Four years ago the US was mired in the last spike in gasoline prices heading into the summer. Virtually every media outlet was conducting daily interviews, polls, and newsbytes about how Mr. and Mrs. Average were dealing with the high gas prices...

The Greeks, the Fed, and Sovereignty

andy@sutton-associates.net — Mon, 19 Mar 2012 14:55:12 -0400

The financial woes of Greece have been fairly well documented over the past year and a half that is for sure. The deduction many analysts, myself included, that the country would end up defaulting on the majority of its debt was a foregone conclusion...

The Irrelevant Industrials?

andy@sutton-associates.net — Sat, 25 Feb 2012 20:59:11 -0500

With the ‘breaking news’ on Tuesday morning being the fact that the Dow Jones Industrials had broken 13,000 for the first time since 2008, the immediate spin from the majority of the mainstream press revolved around ‘see, its all better now’...

Lagging Indicators and Nagging Fundamentals

andy@sutton-associates.net — Fri, 10 Feb 2012 11:53:51 -0500

After the first weekend of the Holiday shopping season, there were jubilant members of the mainstream press virtually jumping out of their skins at the news that holiday spending was looking strong. The initial counts showed an uptick in spending and that was all the MSM needed...

All is Quiet on the Eastern Front?

andy@sutton-associates.net — Fri, 13 Jan 2012 13:20:44 -0500

2011 had been touted as the year that everything would change. Massive paradigm shifts would rock our world and many a prophecy was made regarding financial crises, currency crises, wars, rumors of wars, and there was even one fellow who said the world itself would end, although he later retracted his predictions, but not before his followers had spent their life savings putting up billboards...

A Look Behind the Paradigms

andy@sutton-associates.net — Sat, 10 Dec 2011 16:39:51 -0500

One of the traps all analysts fall into from time to time is their inability to see the forest through the trees. We are all guilty of this from time to time, and those who would deny this simple reality only set themselves up to miss important changes in the paradigms in which they operate. Perhaps the most famous example of this happened in the life and times of Christopher Columbus...

Just When You Thought You'd Seen it All

andy@sutton-associates.net — Thu, 01 Dec 2011 12:17:02 -0500

As I wrote in the last installment regarding the situation in Europe, matters are progressing there much more quickly now as the continent sways back and forth between financial oblivion and a nervous peace brought about by paper promises (yes, paper promises)...

The Coup Continues

andy@sutton-associates.net — Fri, 11 Nov 2011 11:55:36 -0500

Early last December, I wrote a piece entitled ‘Crisis or Coup?’ in which the anatomy of the 2008 financial crisis was analyzed in further detail and some conclusions drawn. These conclusions were drawn based on facts and actions, not opinions. It was obvious at the time that the USFed and our own government were acting not in the best interests of the people, but rather in the best interests of banks and large corporations...

Revisionist History and the Great Depression

andy@sutton-associates.net — Fri, 21 Oct 2011 19:29:57 -0400

Over the past several years, the term ‘Great Depression’ has made a grand re-entry into the American mainstream and has as a consequence become perhaps one of the most misunderstood terms. We are told it was everything that it wasn’t and that it wasn’t everything that it was.

Good Housekeeping? An Op-Ed

andy@sutton-associates.net — Mon, 17 Oct 2011 10:43:23 -0400

I am writing this article not as an economic or financial analyst, which is my normal mode of operation. This article has nothing to do with economic, financial markets, or any related topics. What it has to do with is the undeniable reality that we as a nation are failing miserably in one of the most basic precepts of civilization and that is to leave things better than we found them.

TWIST & Shout

andy@sutton-associates.net — Fri, 23 Sep 2011 10:22:15 -0400

The mainstream media is abuzz this morning, Wednesday September 21st, about the federal reserve, who is once again plotting to save the USEconomy from certain disaster. Really, haven’t we heard this many times before? If it was that easy, shouldn’t it have been done a few years ago when all the problems started? If that is the case, we’ve got little more than a bunch of incompetent bankers on our hands. That is bad enough. However, I think most people are starting to understand that it is much worse a problem than just plain vanilla incompetence. It is about collusion and corruption and I am being very generous in that assessment.

The Great GDP Caper

andy@sutton-associates.net — Fri, 02 Sep 2011 21:08:57 -0400

Last week the Commerce Department released its revised numbers for Quarter 2 GDP. The results were much less than satisfactory, with annualized ‘growth’ coming in at a pathetic 1.0%. Think of this as an economic stall speed. We know the GDP deflator allows the metric to be overstated to begin with, so it is VERY likely that America has re-entered the ‘great recession’ as it has been dubbed by the media...

Pure Media Bias on Gold

andy@sutton-associates.net — Thu, 25 Aug 2011 11:26:13 -0400

Bloomberg News has been cheered in recent months for several 'movements' in quasi-honest reporting, most notably a recent article on the $1.2 Trillion (at a bare minimum) that went to the global aristocracy from the US fed at the height of the 2008 financial crisis. The very fact that this slice of men without a country profited so insanely from the crisis should give most people a pretty good idea of how contrived the crisis was to begin with..

Debt Ceiling or QE3?

andy@sutton-associates.net — Thu, 04 Aug 2011 13:17:34 -0400

With the debt deal now signed and the crisis proclaimed to be over by the government and the mainstream lapdog media, it is time to take a serious look at the debauchery that was just perpetrated on the American people – again. The names have barely changed from 2008. The tactics certainly haven't. The magic of government accounting has had another chapter added to it as something that actually adds to the deficit and requires money be borrowed on its behalf is now a 'cut'. Isn't that just special?

Palladium Primer

andy@sutton-associates.net — Fri, 29 Jul 2011 14:32:59 -0400

Often lost in the shuffle and the talk about gold and silver as the primary precious metals is another metal, which has uses that rival that of silver, is brilliant in appearance and makes a beautiful coin. Its value has quadrupled since 2003 after seeing an all-time high in 2001, and potentially the best aspect yet is that the supply and demand fundamentals have never been better. Guess it yet? I’m talking about palladium. Over the next several pages, we’ll take a look at the many uses for palladium, who the big producers and consumers are, prices, and most importantly, the future outlook...

A Permanent Crisis

andy@sutton-associates.net — Fri, 08 Jul 2011 17:04:04 -0400

As the financial world breathed a collective sigh of relief as the Greek Parliament voted to impose further austerity measures on the people of Greece, I wondered aloud to no one in particular how many times we'd have to see this movie before people finally realize that this crisis is a permanent one. There are many analogies that we could use to illustrate what has gone on, but probably the best is a trauma patient coming into the hospital with a severed carotid artery. Instead of performing surgery and repairing the wound, doctors throw the unlucky fellow on a gurney with a piece of gauze taped over the incision.

The War Over Money

andy@sutton-associates.net — Fri, 24 Jun 2011 11:06:09 -0400

Once again, S&P is at it, issuing its monthly threat to the USGovt to fall into compliance or risk its AAA credit rating. On the surface, these warnings have become rather laughable in that the ratings agency feels the need to say something while, in effect, saying nothing...

A New Mission

andy@sutton-associates.net — Fri, 10 Jun 2011 17:07:32 -0400

A sabbatical is usually a good thing as it gives a nice opportunity to take a step back, assess, reassess, and potentially relax. I’ve enjoyed the past few months away as I took time to do the above and also to try to impart a little common sense and perhaps some wisdom on the up and coming generation regarding economics, the study thereof, and more importantly, the dire consequences of failing to recognize and follow basic economic laws. So I return, and in many ways, things are not much different than when I took leave back in February.

Back to the Well?

andy@sutton-associates.net — Thu, 10 Mar 2011 19:03:42 -0500

There is a rather popular cliché that those who don’t know their history are doomed to repeat it. I tend to like the variation, that the only thing we have learned from history is that we have learned nothing from it. Sounds like a clever oxymoron, but given the state of affairs in the world today, it is more than apropos. It would seem that once again, we are defying logic and trying to go back to 2005 when it was all roses, honey, easy mortgages, and big trade deficits. Have we really not learned a thing?

The Recovery That Never was

andy@sutton-associates.net — Fri, 25 Feb 2011 12:12:23 -0500

It is my belief that as the headlines continue to roll in about fiscal woes from sea to shining sea that we are going to get a full appreciation for the fraud that has been perpetrated on the American people in the form of the ‘economic recovery’ that the media has been stumping for since the middle of 2009...

What Economics is NOT

andy@sutton-associates.net — Fri, 18 Feb 2011 14:05:15 -0500

It is starting again. It is a phenomenon that occurs more regularly now, especially with daily talk of massive imbalances right along with a massive boost in activity. More and more people are scratching their heads wondering what gives. Once again, economics has become a debating society.

The New Humpty Dumpty

andy@sutton-associates.net — Fri, 28 Jan 2011 15:35:05 -0500

Irony is a wonderful thing sometimes. It has a habit of framing things exactly the way they need to be framed. Unfortunately, this is a knife that cuts both ways and irony sometimes points out awful realities. I am not a political animal per se, but I find it incredibly ironic how the avalanche of bad news on the deficit, Social Security, and essentially most of the things wrong with our economy was saved until after Tuesday’s SOTU speech. Make no mistake, this has happened before, and each time I find the timing to be absolutely incredible...

Another Consequence of Zero Rates

andy@sutton-associates.net — Thu, 20 Jan 2011 15:13:31 -0500

Over the past two years, I have visited the topic of the consequences of our new zero rate world on several occasions. Despite media ramblings about ‘free’ money stimulating the economy and igniting another 2005-esque period of time, there have been several very negative consequences. Obviously, pathetic rates of return on what are traditionally referred to, as ‘risk-free’ assets are one well-understood development.

2011 To-Do List

andy@sutton-associates.net — Fri, 31 Dec 2010 13:11:28 -0500

Many people I’ve spoken with over the past 6 months or so have expressed extreme dissatisfaction with their individual and/or collective ability to affect change in government. Sure, there have been some small victories here and there, but by and large our biggest problems continue to rage on unabated...

Fudge Factor in Trade Data?

andy@sutton-associates.net — Fri, 10 Dec 2010 22:36:04 -0500

For many years now this column has been periodically dedicated to the analysis of economic reports, and the exposure of ‘fudging’ that takes place in most macroeconomic data series. Immediately upon looking at this morning’s trade data it seemed that, once again, something was amiss...

Crisis or Coup?

andy@sutton-associates.net — Sun, 05 Dec 2010 16:10:38 -0500

As some of the disclosures required by the financial reform bill are made, everyday Americans are starting to figure out what many zealous economy and market watchers have known since 2008: The Fed’s rescue programs weren’t just aimed at domestic banks with Manhattan headquarters. The aid stretched far into the reaches of everyday America, with the recipients of approximately $885 billion in loans still not disclosed...

The Great Currency Wars

andy@sutton-associates.net — Fri, 19 Nov 2010 12:30:49 -0500

On 9/18/2009 I wrote an editorial called ‘The Quiet Grab’. It discussed China’s deal cutting on the natural resources front, specifically in the rare earth element and petroleum sectors. The article pointed out that the Chinese were quietly provisioning ready supplies of strategic assets for the turmoil that lay ahead, particularly arising from a disdain and mistrust of paper instruments, especially currencies..

A Tale of Two Cities

andy@sutton-associates.net — Thu, 04 Nov 2010 19:42:13 -0400

It certainly looks as though once again insanity has prevailed over common sense. In what has become a recurring theme in our world, particularly from a policy standpoint, the Federal Reserve announced another round of government bond purchases, dubbing the effort ‘QE2’.

Current Account Woes

andy@sutton-associates.net — Fri, 22 Oct 2010 19:34:59 -0400

Amid the recent rout of the USDollar, fears of an all-out trade war have been stoked globally. The G20 finance heads are currently struggling to find common ground on current account imbalances that will avert the inevitable. The point should not be lost on anyone that none of these leaders are really concerned about why these imbalances exist, but rather are only focusing on avoiding the negative consequences of poor fiscal behavior stacked up over the past several decades.

Intended Consequences?

andy@sutton-associates.net — Fri, 08 Oct 2010 12:55:42 -0400

As was generally expected, this morning’s employment situation report gave another bundle of evidence to suggest that there is in fact no recovery, never was, and that several trillion dollars of ‘stimulus’ has disappeared down a rat hole of greed. In typical fashion, the mainstream press tried yet again to put a positive spin on a negative reality, pointing to the fact that we should rest easy; the Fed is going to buy government bonds to save the day...

Partial Equilibrium Analysis - Part II

andy@sutton-associates.net — Sat, 16 Oct 2010 23:39:04 -0400

In the first part of this series, we took at a look at Partial Equilibrium (PE) analysis in terms of analyzing a particular good or service rather than macroeconomic aggregates. What PE allows us to do as well is to both qualitatively and quantitatively assess the true effects of taxes and subsidies. We can also answer whether or not taxes and subsidies represent Pareto efficiencies...

Meet the New Goldilocks

andy@sutton-associates.net — Fri, 10 Sep 2010 13:48:47 -0400

Back in the glory days of 2008, the mainstream press, political pundits, and various government officials talked about the idea of the Goldilocks economy. Not too hot, not too cold, but just right. Of course the analogy ended when the bears chased Goldilocks out of the cottage. While the same outlets aren’t trotting out the fairy tale this time around, it is clear that the US has hit phase two of the Goldilocks economy and it is my guess that most folks will like this one even less than the first.

Partial Equilibrium Analysis - Part 1

andy@sutton-associates.net — Sat, 16 Oct 2010 23:39:11 -0400

One of the many tools available to economists and analysts in determining the suitability of fiscal or economic policy is partial equilibrium (PE) analysis. However, many scoff at the notion of using partial equilibrium simply because many of its assumptions are deemed to be too unrealistic. However, for taking a look at the potential benefits (or costs) of a policy such as a tax on a single good, PE is a very valid construct.

Only It Didn't

andy@sutton-associates.net — Fri, 13 Aug 2010 16:27:16 -0400

The powers that be are now starting to be shown what should be a very important lesson in the old saying: “You can fool all of the people some of the time and you can fool some of the people all of the time, but you can’t fool all of the people all of the time”...

The Manufacturing Myth

andy@sutton-associates.net — Wed, 04 Aug 2010 10:25:10 -0400

They still don’t get it – or perhaps they do and just won’t admit it. Either way, it doesn’t matter much as the jesters, namely Msrs. Bernanke and Greenspan, continue to chirp their assigned lines, playing good cop/bad cop with the USEconomy. Right now, Bernanke is the good cop, pointing to increasing wages and the likelihood that the consumer will once again step up and rescue us from the grips of the double dip.

Income in a Zero-Rate World - Revisited

andy@sutton-associates.net — Fri, 09 Jul 2010 12:41:05 -0400

It has been 18 months now since the original piece of the same name. Quite a lot has happened in those 18 months, but we still have the zero-rate world and along with it all of the accompanying problems. One positive side for fixed-income style investors has been the ability to make nice capital gains on bonds. But how about those who are interested in monthly or quarterly income and don’t wish to trade in and out of traditional fixed income instruments?..

No Surprise in Housing's Dive

Wed, 23 Jun 2010 07:58:08 -0400

Wall Street doubled over in anguish today as the latest numbers on existing home sales hit the news wires. I must say that I am totally confused as to why the decline was any kind of surprise, however. The mainstream press dutifully expressed every emotion from grief to even outrage as the number was reported and analyzed...

Life After Government Stimulus

andy@sutton-associates.net — Fri, 11 Jun 2010 12:04:03 -0400

There is perhaps no better example of the destructive nature of government intervention than the current housing and retail goods markets. For the past three years a spend-happy Congress lavished these areas with stimulus spending, tax credits, and other palliatives all aimed at papering over the structural defects in these markets.

The Consequences of M3

andy@sutton-associates.net — Thu, 27 May 2010 12:41:36 -0400

Given the fact that we sit on the precipice of a holiday weekend, every attempt will be made to keep this short and to the point. M3 growth has collapsed. We had pointed this out several months ago and again more recently amidst a barrage of protest emails that the printing press always wins the battle with the deflationary black hole.

Gold Rises as the Euro Vaporizes

andys@sutton-associates.net — Fri, 14 May 2010 16:59:18 -0400

This wasn’t supposed to happen. When it was introduced 11 years ago, the Euro was to be the world’s newest, biggest, and best yet currency. There were strict guidelines for getting into Club Euro and you’d better follow them if you didn’t want to be voted off the island.

The Turmoil Continues

andy@sutton-associates.net — Fri, 07 May 2010 19:28:34 -0400

The obvious pick for a topic this week would be yesterday’s fearful plunge in US Markets. However, absent a well-defined culprit for the plunge (so far), it seems pointless to speculate on what really happened.

Debt and an American Bankruptcy

andy@sutton-associates.net — Fri, 23 Apr 2010 14:09:33 -0400

There has never been as much attention paid to the situation of a looming American bankruptcy since the National Debt Clock made its debut many moons ago. It is hard these days to pick up a newspaper or look at a TV program without hearing someone mention our massive debt. And they’d be correct in saying we’re in big trouble.

--flation, Bubbles, and Gold

andy@sutton-associates.net — Fri, 09 Apr 2010 15:19:29 -0400

Sometimes a picture really is worth a thousand words, even if it is only to prove a point that common sense dictates should have been won a long time ago. But common sense seems to be in short supply and not only has the point not been won, it isn’t even being discussed right now. Yes, it is the age-old debate on where price inflation comes from.

Healthcare's Double-Dip

andy@sutton-associates.net — Fri, 26 Mar 2010 16:43:29 -0400

One of the most interesting terms to come out of the past two years is the ‘double dip recession’. This is Newspeak for depression as far as I am concerned, but it fits with the new nomenclature we have used in an attempt to paint a crisis as not really being one. After all, what fun is it to admit that we’re in a morass that we have no hope of getting out of, or even a cogent, sensible plan for exiting?

The Greatest Show on Earth

andy@sutton-associates.net — Fri, 12 Mar 2010 15:21:38 -0500

For many years the title of ‘Greatest Show on Earth’ belonged to Ringling Brothers and its travelling circus. I had the pleasure of seeing the extravaganza for the first time about a year ago and was amazed at the talent of the performers, their skills, and the hours and hours of practice time that went into making everyone sit on the edge of their seats for the better part of two and a half hours. Unfortunately, they’re losing their title...

Short-Term Rates Cause Long-Term Problems

Thu, 25 Feb 2010 19:36:10 -0500

One of the first orders of business that goes on during most initial meetings with a mainstream financial advisor is an inventory of assets, income, and other particulars. What generally follows next is series of pie charts that lumps you into one of three or four categories along with ‘projections’ of your future wealth if you’ll only contribute $3,000/year to that IRA for two decades. We’ve all heard the spiel. By contributing a mere pittance, you too can retire to millionaire acres in just 30 years. While there have been many candidates for financial crime of the century (even though we’re only 10 years in), this one has to rank right up there.

Club Med and the Dollar

andy@sutton-associates.net — Fri, 12 Feb 2010 10:39:14 -0500

News junkies, currency buffs, and economists of an Austrian tilt have been having quite an entertaining few weeks. Between massive blizzards from Virginia to New England, another baseless Dollar rally, and the hilarious notion that a little Greek debt could unwind the Euro, there certainly has been plenty to talk about.

Keeping Your Options Open (and Valuing Them)

andy@sutton-associates.net — Thu, 28 Jan 2010 11:14:46 -0500

It is often said that there is nothing new under the sun. Truly, economic events of late have demonstrated this in spades. There is little that is new, just different flavors of the same. So, in the absence of anything substantially new to add to the collection of events this week, I am going to take an opportunity to return to some of the analytical topics that I’ve had but a few precious chances to deal with over the past three and a half years.

Corporations are People Too??

andy@sutton-associates.net — Fri, 22 Jan 2010 15:32:21 -0500

Thursday’s landmark Supreme Court decision has been called everything from proper to despicable and misguided. Clearly in the historical realm, every nation, empire, and circumstance of human organization has clear signposts that mark first progress, then the eventual destruction of the entity. That is not meant to be melodramatic; it is simply the natural progression of societies.

The Search for Income Continues...

andy@sutton-associates.net — Fri, 08 Jan 2010 12:09:57 -0500

One thing that is unlikely to change as we begin a new year and decade is the fact that savers continue to sit in the corner wearing the proverbial dunce cap. They’re an often unmentioned casualty in a world of bailouts, big government spending, and general financial irresponsibility. In a normal, healthy economy, savers would be the focus of attention...

CARD Law: Benefits and Fallout

andy@sutton-associates.net — Wed, 23 Dec 2009 21:19:24 -0500

It is probably very appropriate as we close in on the traditional climax of consumer largesse to discuss the backdrop of this year’s consumption binge...

Closing out 2009

andy@sutton-associates.net — Fri, 11 Dec 2009 11:30:41 -0500

In an effort to get out ahead of the rush of year-end summaries, commentaries, and reviews, we’re going to try something a little bit different this year and leave 20 days of 2009 on the table.

Bernanke is not the Problem

andy@sutton-associates.net — Fri, 04 Dec 2009 13:41:12 -0500

Yesterday a poll was released that only 21% of Americans support giving Helicopter Ben Bernanke a second term as chairman of the US Fed. This compared to 41% thinking that someone else should be given the job. I must say this is quite an improvement. I wonder if Rasmussen would have been able to say 2 years ago that 21% of Americans even knew who Bernanke was?

A Wiser Use for Borrowed Money

Fri, 20 Nov 2009 16:26:50 -0500

It nearly slipped through the cracks this week as mediastocracy marveled at the apparent lack of inflation as the PPI and CPI reports hit the wires. However, just beneath the surface, the financial and economic metamorphosis continues unabated. I am talking about Qatar and its very successful bond sale.

Gold... Do we finally have your attention?

Thu, 12 Nov 2009 10:47:45 -0500

The past two weeks have brought two massive paradigm shifts to a Gold market that has been morphing literally on a daily basis for the past few months. During this time, the pundits and purveyors of misinformation and tripe have done their best to ‘student body left’ Gold back into obscurity as an ancient, barbaric relic. They certainly get an ‘A’ for effort.

Stimulus Nation

andy@sutton-associates.net — Fri, 30 Oct 2009 09:43:02 -0400

The result really wasn’t all that surprising. The reaction wasn’t either. On Thursday morning the Commerce Department released its advance GDP reading and proclaimed the end of the recession by asserting the American economy ‘grew’ at an annualized rate of 3.5% in the third quarter.

The Flip Side of a 'Jobless Recovery'

andy@sutton-associates.net — Fri, 16 Oct 2009 14:02:49 -0400

Perhaps one of the most preposterous statements made during the ongoing financial crisis was by Ben Bernanke when he stated that we would have a ‘jobless recovery’. Certainly this is not a new term, but that doesn’t change the fact that in concept, the idea that a real recovery can occur with rising unemployment seems pretty ludicrous.

Another October Surprise?

Fri, 02 Oct 2009 14:44:41 -0400

I have been asked countless times in the past month why it is that share markets seem to have a difficult time navigating the autumn months. Obviously, there is a healthy amount of fear regarding the next 29 days, as the memories of last year are still firmly intact. Yesterday’s 203-point drop in the Dow Jones Industrials Average has done nothing more than rekindle those sour memories. While the question ‘Why October?

Hurricane Hunter

andy@sutton-associates.net — Fri, 25 Sep 2009 09:10:24 -0400

As global stock markets navigate through the eye of the ongoing financial hurricane, it becomes increasingly important for investors still impacted by these markets to be able to gauge when the storm’s fury will reassert itself and plan accordingly.

The Quiet Grab

andy@sutton-associates.net — Thu, 17 Sep 2009 22:12:57 -0400

While all the hubbub here in the US has centered around abominations such as cash 4 clunkers, tax credits for buying homes, and the other machinations directed at returning the US to the blissful year of 2005, other portions of the world have taken notice and have been conducting some activities of their own...

The Opportunity.. A Year Later

andy@sutton-associates.net — Fri, 04 Sep 2009 21:32:06 -0400

Last October was a pretty brutal time to be in the prognostication business. I had just called Gold the opportunity of a lifetime at the end of August at a price of around $800/ounce. By the time late October came around, the price had fallen to around $725 and the catcalls had begun in earnest...

Leading to What?

andy@sutton-associates.net — Fri, 21 Aug 2009 17:24:53 -0400

Last week’s essay centered on the fact that America has borrowed nearly $12 trillion dollars yet achieved very little, if any real economic growth in the last half century. If that wasn’t alarming enough, this week’s effort should suffice to turn some heads.

Raising the Bar - Again

andy@sutton-associates.net — Sat, 15 Aug 2009 09:50:46 -0400

Apparently, a bazooka wasn’t enough. Last summer, that is what then Secy. of the Treasury Henry Paulson asked for when he made his case for sweeping financial powers...

Pass out the 3D Glasses

info@suttonfinance.net — Fri, 31 Jul 2009 15:45:28 -0400

It doesn’t take long these days to find an economic bull that’s for sure. Whether you turn on the television, radio, or pick up a newspaper, they’re everywhere...

Portfolio Diversification & Risk

info@suttonfinance.net — Sat, 25 Jul 2009 10:13:12 -0400

The cliché’s are plentiful and well known. Putting all of one’s eggs in a single basket is probably the most popular example. One of the biggest manifestations is when an investor looks at their portfolio and realizes that it is grossly underperforming a particular market index or that the same portfolio has performed much worse than a given benchmark.

Basic Financial Analysis - Part III

info@suttonfinance.net — Fri, 10 Jul 2009 16:52:08 -0400

Before we begin, it must be understood that there are many perceptions of value. In fact, if you took 10 investment professionals polled them individually; you’d likely get several very different definitions of value. If you put them together and forced them to come to a consensus, you would do well not holding your breath waiting for an answer...

Basic Financial Analysis - Part II

info@suttonfinance.net — Thu, 02 Jul 2009 14:52:41 -0400

Last time we discussed the concept of valuation for some different types of investments and the formation of themes that can be used to help zero in on potential areas for focus...

Basic Financial Analysis - Part I

info@suttonfinance.net — Fri, 19 Jun 2009 14:57:37 -0400

In an age of green shoots, fluff, and spin, it is probably worthwhile to put our feet on the ground every so often and take a look at some old fashioned ways that we might value a project, a firm, or capital stock. Too many times over the past 15 years.....

Throttling the Recovery?

info@suttonfinance.net — Fri, 05 Jun 2009 19:22:48 -0400

Despite the calm appearance on the economic waters of late, there is quite a bit of turbulence building beneath the surface on a multitude of fronts. Several developments have emerged that fly directly in the face of the idea that we’re headed for a green shoots recovery.

Confirmations and Conclusions

info@suttonfinance.net — Fri, 29 May 2009 15:16:28 -0400

In a mid-February editorial we took a look at some factors that were beginning to confirm one of our proprietary indicators that pointed to a bottoming in consumer prices in December 2008. Writing such an article at the time was a big risk since it flew in the face of a trend that had been firmly in place for the past half-year...

Triple-A or Bust?

info@suttonfinance.net — Fri, 22 May 2009 14:05:39 -0400

If you take a short walk down memory lane, it will not take you very long to find the carcass of New Century Financial along the side of the road back in March 2007. It would be a full 12 months before the word recession would be mentioned in the US mainstream media and stock markets would roar into their all-time highs six months after the disintegration of New Century....

Hedging Your Bets

info@suttonfinance.net — Fri, 15 May 2009 15:39:34 -0400

While it may seem rather inappropriate to talk about hedging strategies while the markets are retracing at least a portion of 2008’s devastating plunge, common sense continues to support the position that the worst is yet to come.

State of the Consumer

info@suttonfinance.net — Fri, 01 May 2009 20:18:31 -0400

This week’s surprise Consumer Confidence report gives us yet another reason to take a step back and survey the landscape. Much of the recent focus has deservedly been on unemployment...

Elephants and Tea Parties

info@suttonfinance.net — Fri, 17 Apr 2009 22:34:07 -0400

It is really no wonder that thousands of people across the nation showed up Wednesday to protest everything from the $787 stimulus package to big bank bailouts done under the cover of darkness. A failing economy, a government determined to insert itself fully in the specter of control, state sovereignty movements, and a good old fashioned tax day frown....

Commitments and Confusion

info@suttonfinance.net — Fri, 03 Apr 2009 15:30:10 -0400

Talk about mixed signals. Confusion reigns supreme. On Thursday the economy was recovering because factory orders went up for February, breaking a multi-month downtrend. However, today, there is no end in sight as the employment report was released and another 663,000 Americans have lost their jobs.

The Great American Banking Experiment

info@suttonfinance.net — Fri, 20 Mar 2009 18:29:26 -0400

One of the most common questions that folks who are becoming newly acquainted with terms like ‘fiat money’ and ‘fractional reserve banking’ are asking is “How did we get here?” For sure, the recent publicity of 21st Century Tea Parties along with the occurrence of the worst financial crisis in recorded history has people asking questions. In terms of the American obsession with central banking and fiat currency, 1913 is generally identified as the point where the country went wrong.

A Look Inside the Numbers

info@suttonfinance.net — Tue, 10 Mar 2009 20:02:19 -0400

This week we take a look inside the jobs numbers. We know BLS data is compromised and political, but there are some important take home messages - both in what the reports do and don't say.

A Game of Confidence

info@suttonfinance.net — Tue, 10 Mar 2009 20:02:29 -0400

We discuss the issue of confidence as perhaps the ultimate predictor with regards to the progression of our economy, and take a look at the 4 pillars of American confidence and the status of each.

The Turning of the Tide?

info@suttonfinance.net — Fri, 20 Feb 2009 14:10:26 -0500

This week we take a look at the increasing likelihood that the economic environment has changed from having deflationary characteristics to inflationary ones. What are the measuring sticks, and what has happened that leads us to this conclusion? Don't miss this one!

Twelve Zeros Worth of Protectionism

info@suttonfinance.net — Fri, 06 Feb 2009 12:33:34 -0500

This week, we take readers on a journey of globalization, and reliance of America on imported goods - to the point where we are unable to protect American industries and jobs. We also point out one possible positive use of the massive government spending package that is forthcoming any day now.

Income in a Zero-Rate World

info@suttonfinance.net — Fri, 30 Jan 2009 22:26:29 -0500

In this week's My Two Cents we explore some possibilities for making money in a market that has no idea where it wants to go. In particular, we explored a hedged dividend accumulating strategy and using covered calls to provide income.

Three Bears and a Missing Goldilocks

info@suttonfinance.net — Fri, 30 Jan 2009 22:25:19 -0500

An exploration into the drivers - past, present, and future of the economic Depression that is ensnaring the US. We discuss fact and fallacy regarding the causes and fixes for the current economic dilemma.

Themes for 2009

info@suttonfinance.net — Thu, 08 Jan 2009 21:38:59 -0500

Where is the economy headed in 2009? What factors will take center stage as the new year unfolds? Our themes from prior issues are not only still intact; they're beginning to assert themselves. Find out what happens next in our first issue in 2009!

Follow the Money

info@suttonfinance.net — Fri, 12 Dec 2008 14:56:54 -0500

This week's article discusses how we are losing perspective on our money. How much is a million dollars? A billion? A Trillion? We continue to drive home the point that bailout Dollars - no matter who promises them are all printed from nothing. We also debunk the idea that prices are ONLY a function of supply and demand.

Big Bank vs. Big Car

info@suttonfinance.net — Fri, 05 Dec 2008 17:02:40 -0500

In this commentary, we discuss the financial bailout as opposed to the potential bailout of the auto industry and compare the merits of each. Which really is more important? And why is Congress worried about private jets while Rome burns?

Can't miss episode of Spin Cycle

info@suttonfinance.net — Fri, 05 Dec 2008 09:19:24 -0500

This week, we discuss the trillions in bailout dollars, where they're going, and the likely unpleasant consequences of these realities. We also tie in oil and stock prices. If you want to know where things are headed, this is an episode you can't afford to miss.

http://www.contraryinvestorscafe.com/broadcast.php?media=164

Dominos and Themes

info@suttonfinance.net — Fri, 21 Nov 2008 22:29:19 -0500

A quick journey down the road of portfolio analysis as we take a look at some of the 'themes' which have been prevalent over the past year. In this issue we build some quick portfolio models and play out the past 6 months and let you know what has held up - and what hasn't.

Meet me at the Bottom

info@suttonfinance.net — Fri, 14 Nov 2008 09:55:48 -0500

An analysis of the ongoing Dollar 'rally'. Is it really the Dollar regaining its strength of old or a race to the bottom for all fiat currencies. Interspersed with economic news, this is an informative piece that is a must-read.

Ending the Recession Debate

info@suttonfinance.net — Fri, 07 Nov 2008 12:50:58 -0500

Despite everything that has happened, the mainstream press and pundits are still asserting that a recession might still be avoided. We take a look at some pretty reliable measurements of the economy, make the case, and let you decide.

Anatomy of a Disaster - Compilation

info@suttonfinance.net — Mon, 03 Nov 2008 21:50:49 -0500

The popular series "Anatomy of a Disaster" is now available for download in PDF format. Get all three articles in one easy to manage document.

Anatomy of a Disaster - The Next Stop

info@suttonfinance.net — Fri, 24 Oct 2008 22:51:03 -0400

We've laid the groundwork so where do we go from here? What drives us to that destination? And most importantly, what does it mean for your money?

Anatomy of a Disaster - Part 2

info@suttonfinance.net — Fri, 10 Oct 2008 22:51:08 -0400

In this second installment we look at the monetary phenomenon; specifically deflation. Where does it come from? How does the banking system create money. The article brings together these points in a concise manner that will leave you with a full understanding of how the money system in the US works.

Anatomy of a Disaster - Part 1

info@suttonfinance.net — Fri, 3 Oct 2008 22:51:14 -0400

The first in a three part series on comparisons between the Great Depression and now. This installment focuses on macroeconomic activity and the distribution of capital.

Capitalism: DOA

info@suttonfinance.net — Fri, 19 Sep 2008 22:51:19 -0400

Capitalism is under increasing attack. You'd be surprised as to who the attackers are. This article is a must-read in terms of understanding what has transpired over the past few weeks.

A Sobering Dose of Reality

info@suttonfinance.net — Fri, 5 Sep 2008 22:51:25 -0400

A look at the latest government employment situation report and what it means for consumers, spending, and the economy moving forward...

The Opportunity of a Lifetime

info@suttonfinance.net — Fri, 29 Aug 2008 22:51:39 -0400

Despite the recent correction, gold has still been the asset of choice over the past 8 years easily outperforming stocks. This week's commentary focuses on why gold and precious metals in general present the opportunity of a lifetime at these levels...