Prelude to a mushroom cloud?


'ISLAMABAD,Pakistan — A suicide bomber attacked a suspected nuclear-weapons site Friday in Pakistan,raising fears about the security of the nuclear arsenal,while two other terrorist blasts made it another bloody day in the country’s struggle against extremism.

Increasingly daring and sophisticated attacks by terrorists allied with al Qaida on some of Pakistan’s most sensitive and best-protected installations have led to warnings that extremists could damage a nuclear facility or seize nuclear material....'

Read more:

http://www.mcclatchydc.com/251/story/77650.html

Please review the NSE 20 Share Index chart here: http://tinyurl.com/yjhuea9 . I have used trend lines to map out inflection or turning points.

A tug of war between bonds and common stocks has seen the former carry the day as investors are still nursing wounds from the bear market of 2006 - 2009. Fear rules the market with investors concocting a thousand and one reasons not to invest in common stocks. During the bull market heydays,there were a thousand and one reasons to invest in common stocks.

A common valuation metric is the Price-to-Earnings ratio or P/E. This ratio is akin to a pulse rate,swinging from a subdued state at market lows to a racing heartbeat during booms. It captures the amount in earnings per unit invested. The lower the market P/E the greater the discounts on stocks.

At present the market P/E (Price to Earnings) ratio is 12.78,50% lower than that of December 2006 which was 24. Further down memory lane,market P/E ratio in September 2002 was 10.84. Back then,investing in stocks was not the 'in thing'.

A Price to Earnings ratio of 1 - 7 is considered cheap,8 - 14 fair,15 - 21 expensive,+ 21 bubbly.

Interestingly,March 2009's P/E ratio was 7.98. Therefore,the seven ensuing months from the stock market lows of March have provided a Buyers' Paradise to investors. The Great NSE Sale is on!

Our Investment Coaching sessions (catered to individual investors) are dedicated to exploring metrics such as the P/E ratio,crucial in an investor’s toolbox. Please inbox me for more information.

During this second phase of the 2001 - 2016 gold bull market,institutional money is embracing gold as a hedge against loss of confidence in the financial management of the U.S. and its common stock,the Dollar. The last phase will grip Joe and Jacky Investor in a true global gold rush.

'Gold bugs of the world,unite! You have nothing to lose but your exposure to fiat currencies.

Or so says leading hedgie and Wall Street throw back Paul Tudor Jones,who in his latest missive to investors has gone soft at the knees for the yellow metal:

I have never been a gold bug. It is just an asset that,like everything else in life,has is time and place. And now is that time....'

Read more:

http://ftalphaville.ft.c...6/paul-tudor-jones-gold/

'Dear CIGAs,

The so called quick surgical bankruptcy of CIT will result in a company that will only be able to provide 20% of its previous level of financial services to Middle America according to Friday’s Wall Street Journal.

Any institutions replacing these services will have:

1. Higher levels of credit worthiness to be met by small business.

2. Less funds committed to these loans.

Further,the assets of CIT in bankruptcy are the middle American loans outstanding that will be brutally attacked by the bankruptcy process.

That is going to result in a flood of middle American businesses declaring bankruptcy.'

Read more:

http://jsmineset.com/200...ddle-american-business/


CIT Group Files Bankruptcy,Seeks to Cut $10 Billion in Debt

Nov. 2 (Bloomberg) CIT Group Inc.,the 101-year-old commercial lender that saw its funding dry up in the credit crunch,filed for bankruptcy in an effort to cut $10 billion in debt following a failed debt exchange and U.S. taxpayer bailout.

CIT listed $71 billion in assets and $64.9 billion in liabilities in a Chapter 11 petition yesterday in U.S. Bankruptcy Court in Manhattan. The Treasury Department said the government probably won’t recover much,if any,of the $2.3 billion in taxpayer money that went to CIT.

Read more:

http://www.bloomberg.com...=aKmvIUy3V8QY&pos=1

'They’re off and away on China’s newest rollercoaster ride stock exchange,first soaring up and up — and then plunging down.

With surprisingly little fanfare but an utter trading frenzy,China on Friday launched its Nasdaq-style stock exchange,the Growth Enterprise Market (yes,really,GEM),also known as ChiNext,in the southern boomtown of Shenzhen.

So intense was the buying that regulators moved to temporarily suspend trading in the shares of all 28-newly listed companies at different times on Friday,as analysts warned about the risks posed by excessive speculation and inflated stock prices....'

Read more:

http://ftalphaville.ft.c...or-the-latest-wild-ride/

India's gold reserves constitute 3% of forex reserves against a global average of 10%. The title of the article speaks for itself. The Rise of Asia is afoot.

'India,like China,understands the virtues of gold. This is why they have snapped up 200 tons of gold from the IMF at around $1,045 per ounce or $6.7 billion. The UK does not understand gold,that is why Gordon Brown sold most of the nation’s gold in 1999 at virtually the low of $250.

Instead the UK has today spent $51 billion on propping up bankrupt banks. Royal Bank of Scotland received another $41 billion today making it the costliest bailout worldwide with a total of $75 billion. Lloyds Bank received another $10 billion. The US is of course also spending printed money on rescuing bank creditors with 115 bank failures so far in 2009...'

Read more:

http://goldswitzerland.c...uys-gold-uk-buys-banks/

The U.K. Pound has been an underperformer amongst major currencies. The U.K. economy is still deleveraging from a housing bubble,overleveraged financial sector and heavily indebted consumer.

An increase in quantity of money without comensurate economic output lowers the value of the currency in question and increases general price levels.

'(FT) The Bank of England's monetary policy committee voted on Thursday to expand its vast program to pump cash into the UK economy by £25bn ($41bn),in a sign that it remains worried about the outlook in spite of incipient signs of recovery.

As expected,the Bank left interest rates unchanged at 0.5 per cent.

The move to increase 'quantitative easing' creating money in order to boost spending from the existing £175bn used had been widely expected by economists after official figures suggested the UK remained mired in recession in the third quarter....'

Read more:

http://edition.cnn.com/2...USINESS/11/05/uk.boe.ft/

'There is an Arab saying which goes,'Whoever drinks the Nile water is sure to come back again.' Three years ago,right in front of the pyramid by the Nile,I joined people from Egypt and China in celebrating the 50th anniversary of diplomatic relations between our two countries. Today,returning to this beautiful land imbued with splendid civilization,I feel much at home.' - H.E. Wen Jiabao in his speech in Cairo delivered to the Arab League

SHARM EL-SHEIK,Egypt (AP) China's premier on Sunday pledged $10 billion in new low interest loans to African nations over three years,offering the beleaguered continent sorely needed cash while dismissing criticism that Beijing's motives in Africa are far from altruistic.

Wen Jiabao's promise at the start of a two-day China-Africa summit was warmly received by African leaders and officials,most of whose nations confront a miasma of despair further accentuated by a global financial crisis that is only now showing signs of abating.

Read more:

http://hosted.ap.org/dyn...OME&TEMPLATE=DEFAULT

Goldman Sach's CEO Lloyd Blankfein remarked to the Sunday Times that banks are doing 'God's work'. This is too good to pass up.

The Lloyd's Prayer

Our Chairman,
Who Art At Goldman,
Blankfein Be Thy Name.

The Rally's Come.
God's Work Be Done,
We Have No Fear Of Correction.

Give Us This Day Our Daily Gains,
And Bankrupt Our Nearest Competitors,
Just As You Taught Lehman And Bear A Lesson.

And Bring Us Not Under Indictment.
For Thine Is The Treasury,
The House And The Senate
Forever And Ever.
Goldman.

Read more:

http://www.cnbc.com/id/33832333

A tale of two currencies.

The U.S. Treasury Secretary Timothy Geitner has affirmed his commitment to a (cough,cough) strong dollar (cough,cough). He ought to have a quick glance at the U.S. Dollar Index chart which has been southward bound since March. The market was hoping for Dollar positive statements to emanate from the G20 meeting of finance ministers over the weekend but the communique was lacking in this respect. Statements from banker to the United States i.e. China point towards the latter dropping the Yuan-Dollar peg,enabling the Yuan to rise in value.

Across the pond,Bank of England Govenor Mervin King has taken the Pound to the gallows,backing its weakness and keeping the door open to further quantitave easing or money supply. Mind you,the U.K. is in the midst of the largest bank bailout in history,the rescue of Royal Bank of Scotland (RBS).

Two divergent paths,yet a common destination.


Royal currency extends decline after King's comments

http://ecpulse.com/en/cu...cy-extend-decline-king/

Geithner Affirms Strong Dollar Policy

http://online.wsj.com/ar...B125792362908743307.html