http://www.cnbc.com/id/15840232/?video=1598887347
http://www.cnbc.com/id/15840232/?video=1598913851
Monday, September 27, 2010
Monday, December 14, 2009
Soros Sure Greece Won't Be Allowed to Default
Soros Sure Greece Won't Be Allowed to Default
Reuters| 10 Dec 2009 | 06:18 AM ET
Billionaire investor and philanthropist George Soros said on Thursday he was sure the Greek government would not be allowed to default on its debts despite growing budgetary difficulties and market concerns.
"There has to be pressure on Greece to put its house in order but I'm sure that Greece will not be allowed to default. The same applies to the United Kingdom," Soros told Sky News television.
Soros said there were heightened market concerns about sovereign defaults around the world following the recent debt restructuring proposal for Dubai's leading companies.
But he said the chances of such a default were remote.
"There are concerns about sovereign defaults but it is a rather remote one. Dubai shook the world for a day because it raised the spectre of sovereign defaults," Soros said, adding the Dubai problem was an issue of Abu Dhabi seeking a more independent financial position from the Dubai emirate.
Fitch Ratings cut Greece's debt rating to BBB+ on Tuesday with a negative outlook — the first time in 10 years a major ratings agency has put Greece below an A grade — citing fiscal deterioration in the euro zone's weakest member.
The move hit bank shares, bonds and the euro.
http://www.cnbc.com/id/34359834
Reuters| 10 Dec 2009 | 06:18 AM ET
Billionaire investor and philanthropist George Soros said on Thursday he was sure the Greek government would not be allowed to default on its debts despite growing budgetary difficulties and market concerns.
"There has to be pressure on Greece to put its house in order but I'm sure that Greece will not be allowed to default. The same applies to the United Kingdom," Soros told Sky News television.
Soros said there were heightened market concerns about sovereign defaults around the world following the recent debt restructuring proposal for Dubai's leading companies.
But he said the chances of such a default were remote.
"There are concerns about sovereign defaults but it is a rather remote one. Dubai shook the world for a day because it raised the spectre of sovereign defaults," Soros said, adding the Dubai problem was an issue of Abu Dhabi seeking a more independent financial position from the Dubai emirate.
Fitch Ratings cut Greece's debt rating to BBB+ on Tuesday with a negative outlook — the first time in 10 years a major ratings agency has put Greece below an A grade — citing fiscal deterioration in the euro zone's weakest member.
The move hit bank shares, bonds and the euro.
http://www.cnbc.com/id/34359834
Monday, December 7, 2009
Reality check
Reality check
By John Authers
Published: December 3 2009 19:10 | Last updated: December 3 2009 19:10
Is this recovery real? And if not, would it make any difference?
George SorosThe trade of financial economics has taken a bruising after the many surprises of the past two years, but a more ancient discipline is coming back into focus: philosophy. In the vanguard is George Soros, one of history’s most successful hedge fund managers – and someone who prefers to judge himself as a failed philosopher.
Philosophers have long wrestled with the concept of perception: how the “real” world corresponds to our perceptions of it, or whether it even makes sense to say there is something “real” out there.
Most of us tend to dismiss such questions as sophistry. Soros, on the other hand, has wrestled with the problem since he was a student. And he may have the last laugh, because he appears to have turned the philosophy of reality into a way to make money.
Soros’s guiding principle, as outlined in his book*, concerns “reflexivity”: how our perceptions of the world, as expressed through buying and selling, change the world itself. When markets become “reflexive”, they reflect flawed perceptions rather than a prior “reality” – but the market’s version of “reality” is no less real because of that.
Soros’s key principles are first that “market prices always distort the underlying reality which they are supposed to reflect”; and second, that “instead of playing a purely passive role in reflecting an underlying reality … markets also have an active role: they can affect the so-called fundamen-tals they are supposed to reflect”.
Reflexive markets can turn into bubbles. And bubbles can turn into opportunities to make money for those like Soros, who have the self-discipline to invest in an incipient bubble and get out before it bursts.
Armed with Soros’s insight, the question of whether we should believe in the current market rebound looks different. Last year’s collapse rested on confidence. Oil prices, for instance, grew so high that they put pressure on the economy and forced companies to change their output decisions.
However, this year, numerous market factors have reinforced an impression of a recovery. That, in turn, has made it easier to do business and precipitate an “actual” recovery.
Markets had sold off so much that only a slight change in perception moved them dramatically. To make money this year was to understand the market “reality” that investors’ perceptions would create, rather than focus on an apparently separate “fundamental” reality, which followed macroeconomic rules that still saw evidence of high unemployment and lingering bad debt.
Once oil prices and Chinese shares moved upwards, this was evidence the “real” world was recovering. Once credit markets recovered, it became cheaper for companies to raise finance, and that in turn gave good reason to buy equities – and to buy other credit, as it could now be seen there were buyers out there prepared to buy debt. In this way, perceptions of reality led to a different reality.
If this really is an incipient bubble – and the fact it relies on artificially cheap money from the government certainly reinforces that impression – how will we know when it has become a true bubble and when will it end?
Again, Soros has a theory. “Every bubble has two components: an underlying trend that prevails in reality and a misconception relating to that trend,” he says. A boom and an eventual bust are set off “when a trend and a misconception positively reinforce each other”.
Eventually, “market expectations become so far removed from reality that people are forced to recognise that a misconception is involved”. As doubts set in, “a point is reached when the trend is reversed; it then becomes self-reinforcing in the opposite direction”.
World stock markets peaked in 2007 after a sudden sell-off in the bond market. Bond investors decided the rosy assumptions in other markets simply could not happen without higher inflation, and reacted accordingly. The trend was reversed. A long bear market turned into a savage sell-off once the commodity market went into reverse, again collapsing under its contradictions, and then the bankruptcy of Lehman Brothers, the US investment bank, administered a nasty dose of reality.
Some geopolitical event, or a corporate incident like Lehmans’, could bring this rally to an end. Otherwise, it is best to look at the bond and foreign exchange (forex) markets. If forex traders revolt against the huge volume of extra bonds being issued to fund the deficit, that could push up interest rates and end the rally. Or, similarly, if the run on the dollar gets to the point where many countries feel their own currencies are overvalued, and therefore take action, this rally could come to an end.
http://www.ft.com/cms/s/0/c6b6e9ce-d965-11de-b2d5-00144feabdc0.html?nclick_check=1
By John Authers
Published: December 3 2009 19:10 | Last updated: December 3 2009 19:10
Is this recovery real? And if not, would it make any difference?
George SorosThe trade of financial economics has taken a bruising after the many surprises of the past two years, but a more ancient discipline is coming back into focus: philosophy. In the vanguard is George Soros, one of history’s most successful hedge fund managers – and someone who prefers to judge himself as a failed philosopher.
Philosophers have long wrestled with the concept of perception: how the “real” world corresponds to our perceptions of it, or whether it even makes sense to say there is something “real” out there.
Most of us tend to dismiss such questions as sophistry. Soros, on the other hand, has wrestled with the problem since he was a student. And he may have the last laugh, because he appears to have turned the philosophy of reality into a way to make money.
Soros’s guiding principle, as outlined in his book*, concerns “reflexivity”: how our perceptions of the world, as expressed through buying and selling, change the world itself. When markets become “reflexive”, they reflect flawed perceptions rather than a prior “reality” – but the market’s version of “reality” is no less real because of that.
Soros’s key principles are first that “market prices always distort the underlying reality which they are supposed to reflect”; and second, that “instead of playing a purely passive role in reflecting an underlying reality … markets also have an active role: they can affect the so-called fundamen-tals they are supposed to reflect”.
Reflexive markets can turn into bubbles. And bubbles can turn into opportunities to make money for those like Soros, who have the self-discipline to invest in an incipient bubble and get out before it bursts.
Armed with Soros’s insight, the question of whether we should believe in the current market rebound looks different. Last year’s collapse rested on confidence. Oil prices, for instance, grew so high that they put pressure on the economy and forced companies to change their output decisions.
However, this year, numerous market factors have reinforced an impression of a recovery. That, in turn, has made it easier to do business and precipitate an “actual” recovery.
Markets had sold off so much that only a slight change in perception moved them dramatically. To make money this year was to understand the market “reality” that investors’ perceptions would create, rather than focus on an apparently separate “fundamental” reality, which followed macroeconomic rules that still saw evidence of high unemployment and lingering bad debt.
Once oil prices and Chinese shares moved upwards, this was evidence the “real” world was recovering. Once credit markets recovered, it became cheaper for companies to raise finance, and that in turn gave good reason to buy equities – and to buy other credit, as it could now be seen there were buyers out there prepared to buy debt. In this way, perceptions of reality led to a different reality.
If this really is an incipient bubble – and the fact it relies on artificially cheap money from the government certainly reinforces that impression – how will we know when it has become a true bubble and when will it end?
Again, Soros has a theory. “Every bubble has two components: an underlying trend that prevails in reality and a misconception relating to that trend,” he says. A boom and an eventual bust are set off “when a trend and a misconception positively reinforce each other”.
Eventually, “market expectations become so far removed from reality that people are forced to recognise that a misconception is involved”. As doubts set in, “a point is reached when the trend is reversed; it then becomes self-reinforcing in the opposite direction”.
World stock markets peaked in 2007 after a sudden sell-off in the bond market. Bond investors decided the rosy assumptions in other markets simply could not happen without higher inflation, and reacted accordingly. The trend was reversed. A long bear market turned into a savage sell-off once the commodity market went into reverse, again collapsing under its contradictions, and then the bankruptcy of Lehman Brothers, the US investment bank, administered a nasty dose of reality.
Some geopolitical event, or a corporate incident like Lehmans’, could bring this rally to an end. Otherwise, it is best to look at the bond and foreign exchange (forex) markets. If forex traders revolt against the huge volume of extra bonds being issued to fund the deficit, that could push up interest rates and end the rally. Or, similarly, if the run on the dollar gets to the point where many countries feel their own currencies are overvalued, and therefore take action, this rally could come to an end.
http://www.ft.com/cms/s/0/c6b6e9ce-d965-11de-b2d5-00144feabdc0.html?nclick_check=1
Monday, September 14, 2009
Jim Rogers on China's stocks: not the time to buy
Jim Rogers on China's stocks: not the time to buy
September 11, 2009
China's shares nearly doubled this year, and then plummeted 20 percent within a month. Reports asked investment guru Jim Rogers when is a good time to buy China stocks while he was attending the China International Financial Services Conference (CIFSC) held in Guangzhou on September 10.
Rogers says since 1999, he bought shares of China, and has never sold them. He believes that after ten years China stocks will still be rising, but at the same time he has sold all stocks from the other emerging market countries.
Last year in October, he bought shares in China again. But the Chinese stocks he bought were H-shares, B shares, and S shares. He has never bought A shares, since the A shares are too expensive, and perhaps one day, China's H shares, B shares, S shares and A shares will merger as one kind of stocks.
If signs of collapse appear in China's stock market, he would buy more Chinese stocks. He thinks this may occur in the near future, but not now, because although China's stock market is making adjustment, no one is selling Chinese shares in large quantities. Besides, China's stock market rose 80 percent in the past six months, prices have been too high, and I will not buy Chinese stocks at this time. After a year or two, I would consider buying Chinese stocks again.
By People's Daily Online
September 11, 2009
China's shares nearly doubled this year, and then plummeted 20 percent within a month. Reports asked investment guru Jim Rogers when is a good time to buy China stocks while he was attending the China International Financial Services Conference (CIFSC) held in Guangzhou on September 10.
Rogers says since 1999, he bought shares of China, and has never sold them. He believes that after ten years China stocks will still be rising, but at the same time he has sold all stocks from the other emerging market countries.
Last year in October, he bought shares in China again. But the Chinese stocks he bought were H-shares, B shares, and S shares. He has never bought A shares, since the A shares are too expensive, and perhaps one day, China's H shares, B shares, S shares and A shares will merger as one kind of stocks.
If signs of collapse appear in China's stock market, he would buy more Chinese stocks. He thinks this may occur in the near future, but not now, because although China's stock market is making adjustment, no one is selling Chinese shares in large quantities. Besides, China's stock market rose 80 percent in the past six months, prices have been too high, and I will not buy Chinese stocks at this time. After a year or two, I would consider buying Chinese stocks again.
By People's Daily Online
Wait and See Investment in A-shares, Big City Real Estate
Jim Rogers: Wait and See Investment in A-shares, Big City Real Estate
byCSC staff, Shanghai
September-11-2009
Jim Rogers, an American investor and financial commentator based in Singapore who has been paying close attention to the Asian market, sees that in the past 10 months, A-shares values have doubled, but predicts that there will be a negative change in September-November. He adds he would neither buy nor sell shares at present, points out that in the next 20 years agriculture will be a very promising industry in China, and suggests that everybody play the role of "farmer."
In the first half of this year, China's economic stimulus policies to deal with the financial crisis and lending of seven trillion yuan boosted domestic stock and property transactions and prices hit new highs.
But the A-share market has been fluctuating recently between 2600 and 3000 points. At the second China International Financial Services Conference, held at Guangzhou in South China on September 9-10, Rogers noted that although China's economy is improving, market risk is brewing, and he predicted the Hong Kong market could have problems in the next few months, which will affect the domestic market. Rogers believes that the current autumn round is perhaps the shift from bear to bull market, and investors should be patient and wait for opportunities to buy rather than rush into the market.
In addition, conditions in Europe and the US have not fully recovered, and their lack of improvement will influence China's exports and affect its markets. Time is needed to observe the continuing development of the European and US economies.
Rogers believes that, just as the market has worried, huge amounts of money issued by central banks is leading to inflation, and that investing in commodities would be a good choice, especially raw materials, natural resources, energy and bulk commodities. Non-renewable resources will be particularly profitable products in the next round of investment. The prices of silver, sugar and coffee have decreased 70% from their high points. When the global economy picks up, demand for commodities will rise, so will prices. If economies continue to falter, governments will continue to release liquidity, and commodity investors can benefit from the effects of inflation.
Rogers emphasizes that in recent years a food crisis has emerged, and may become serious in the next decade. Investors should pay attention to commodities such as wheat. In the long run, investors should watch growth industries. China's agriculture, for example, has great growth potential due to huge investment from the government in recent years. In addition, water conservancy in Asia has great potential because India and China are often affected by flooding or drought. Tourism is also promising.
Rogers predicts the USD's status may be reduced in the next 5-10 years with the development of Asia and the decline of the US. He reasons that China, Japan and other Asian countries are gradually hold financial claims and European and American countries are turning into debtors, meaning that global capital flows are diverting to Asia. In terms of historical evolution, the economic center was in the UK in the 19th century, then in the US in the 20th century. It may well be China in the 21st century.
Rogers believes that domestic real estate development is good. In the past two months, housing prices have greatly increased in many cities, but he says he would not buy property at present, especially in Shanghai or Hong Kong.
In response to the financial crisis, central banks have released vast liquidity but different orientations have emerged in China and the US. Rogers says that in the first half year China invested in medium and long-term infrastructure, which can enhance future competitiveness, truly investing in the future, while the US invested 70%-80% of the resources into short-term projects.
It is generally believed that huge amounts of capital released, whether invested in short or long-term projects, will bring on inflationary pressures. The difference is that the pulling effect of short-term projects for follow-up competitiveness is not as good as for long-term projects. In evaluating government efforts to relieve the financial crisis, Rogers says that China and Singapore have done better than the US or Britain.
http://www.chinastakes.com/PrintArticle.aspx?articleid=1499
byCSC staff, Shanghai
September-11-2009
Jim Rogers, an American investor and financial commentator based in Singapore who has been paying close attention to the Asian market, sees that in the past 10 months, A-shares values have doubled, but predicts that there will be a negative change in September-November. He adds he would neither buy nor sell shares at present, points out that in the next 20 years agriculture will be a very promising industry in China, and suggests that everybody play the role of "farmer."
In the first half of this year, China's economic stimulus policies to deal with the financial crisis and lending of seven trillion yuan boosted domestic stock and property transactions and prices hit new highs.
But the A-share market has been fluctuating recently between 2600 and 3000 points. At the second China International Financial Services Conference, held at Guangzhou in South China on September 9-10, Rogers noted that although China's economy is improving, market risk is brewing, and he predicted the Hong Kong market could have problems in the next few months, which will affect the domestic market. Rogers believes that the current autumn round is perhaps the shift from bear to bull market, and investors should be patient and wait for opportunities to buy rather than rush into the market.
In addition, conditions in Europe and the US have not fully recovered, and their lack of improvement will influence China's exports and affect its markets. Time is needed to observe the continuing development of the European and US economies.
Rogers believes that, just as the market has worried, huge amounts of money issued by central banks is leading to inflation, and that investing in commodities would be a good choice, especially raw materials, natural resources, energy and bulk commodities. Non-renewable resources will be particularly profitable products in the next round of investment. The prices of silver, sugar and coffee have decreased 70% from their high points. When the global economy picks up, demand for commodities will rise, so will prices. If economies continue to falter, governments will continue to release liquidity, and commodity investors can benefit from the effects of inflation.
Rogers emphasizes that in recent years a food crisis has emerged, and may become serious in the next decade. Investors should pay attention to commodities such as wheat. In the long run, investors should watch growth industries. China's agriculture, for example, has great growth potential due to huge investment from the government in recent years. In addition, water conservancy in Asia has great potential because India and China are often affected by flooding or drought. Tourism is also promising.
Rogers predicts the USD's status may be reduced in the next 5-10 years with the development of Asia and the decline of the US. He reasons that China, Japan and other Asian countries are gradually hold financial claims and European and American countries are turning into debtors, meaning that global capital flows are diverting to Asia. In terms of historical evolution, the economic center was in the UK in the 19th century, then in the US in the 20th century. It may well be China in the 21st century.
Rogers believes that domestic real estate development is good. In the past two months, housing prices have greatly increased in many cities, but he says he would not buy property at present, especially in Shanghai or Hong Kong.
In response to the financial crisis, central banks have released vast liquidity but different orientations have emerged in China and the US. Rogers says that in the first half year China invested in medium and long-term infrastructure, which can enhance future competitiveness, truly investing in the future, while the US invested 70%-80% of the resources into short-term projects.
It is generally believed that huge amounts of capital released, whether invested in short or long-term projects, will bring on inflationary pressures. The difference is that the pulling effect of short-term projects for follow-up competitiveness is not as good as for long-term projects. In evaluating government efforts to relieve the financial crisis, Rogers says that China and Singapore have done better than the US or Britain.
http://www.chinastakes.com/PrintArticle.aspx?articleid=1499
Wednesday, July 15, 2009
Commodities are sizzling, says Jim Rogers
Commodities are sizzling, says Jim Rogers
14 Jul 2009, 0013 hrs IST, Andy Mukherjee, ET Now
In an exclusive interview with ET NOW , Mr Rogers reiterated his view that a currency crisis could happen any time in the
near future. But he’s not sure yet who’s going to pay the price — pound sterling, US dollar or even the rupee. Excerpts: ( Watch )
The commodities rally seems to have paused. The Rogers International Commodity Index has come off 13% since June 12. This pullback, essentially as I can see, is because of tin, energy and silver even as some of those agri commodities like orange juice, sugar and cotton have done well. What are your expectations going forward for commodities?
That's the way I know you know about commodities. You read The Economic Times and your ET TV. So, you know that the markets always have corrections whether they are going up or down. Nothing goes straight up or down forever. So, it's having a normal correction. In my view, the best place to be is in real assetscommodities, because if the world is going to recover, they (commodities) will recover first because of the shortages and if the world economy is not going to recover, they are still the best place to be, because governments around the world are printing huge amounts of money. So, if you got to own something, I don't much to own besides commodities.
In India, we are getting worried about the monsoon. We are looking out of our windows and not finding any clouds, and there is also talk about El Nino weather formation. Is this something you would advise investors to keep an eye on?
Of course, I would. The world's inventories of food are at the lowest they have been in decades. We haven't have had any serious weather problems around the world for several decades as a matter of fact. So, with fairly good weather, we have been having bad harvest or we have been consuming more than we have been producing. Can you imagine what's going to happen to the price of agriculture if we have bad weather around the world?
The last time we met here in Mumbai you had a sachet of sugar in your pocket and you pulled it out to underscore your point of impending shortage about agri commodities. You have been right about sugar as far as we can see from the price charts. What are you hiding today in your pockets? A silver coin, a hip flask full of crude oil, may be?
I do actually have a silver coin in my pocket. I don't know how you knew. I also have a gold coin, but the silver one is probably my better play. If I were a bright young man, I would be buying sugar now and silver, given the state of the world. That's not a recommendation, but I am just saying I do own some silver. Silver is cheaper than many things on a historic basis and I do own some silver. The dollar has fallen almost 10% since the beginning of the stocks rally in March. Commodities have risen 94% of the time that the dollar has fallen. A very strong correlation. Do we expect the dollar decline and the commodity run-up, therefore, to continue? It's not always a strong correlation. You are right; there has been (a correlation) in recent months, recent years even. But no, there are many times when the dollar and commodities go entirely separate ways. So, don't get it into your head, and I know many times that the press do have it in their head that commodities and dollars go opposite ways. I am not terribly bullish on the dollar in long term. US dollars are a terribly flawed currency and down the road I hope I don't own any US dollars. I still own some of them at the moment, but it's not getting better for the US. The dollar any way is getting worse. The fundamental for commodities continue to improve. The fundamentals for the US dollar do not continue to improve. They are deteriorating.
Are you still sticking to your prediction of a currency crisis sometime in a year or two?
Yes. The world is full of currency imbalances and economic trade imbalances would have to be resolved or corrected, one way or the other. Unfortunately, given the state of politicians and it's not just the current state of politicians, but politicians throughout history have usually got things wrong. So, we are going to have some problems in the currency market. I don't know when. May be not. I may be wrong. But having seen that sort of thing before in history somebody would have to pay the price whether it's the pound sterling or the US dollar or the rupee, I have no clue. No idea where it’s going to stop, but we are going to have problems in the currency markets.
What’s your view on global equities now? Do you think emerging markets’ premium over developed country markets has gone a way too high?
I don't pay any attention to things like emerging markets premium. You talk about it on TV, but every market is different. Why can't I just go out and buy emerging markets when it is likely to go broke. Every market is different, every country is different, every economy is different and every sector of the economies is different. Just because you are in an emerging country does not mean you are going to make money if you get the wrong sector. I have not bought any stocks anywhere in the world in the last couple of years except China. I did buy some Chinese shares back in October-November. I have not been buying anything other than that for some time. I have been worried about the world economy, about the world stock markets. If you got to be somewhere and if there is going to be a recovery, it will show up in commodities best of all, and if there is not going to be any recovery, commodities are still a better place to be.
So what are you buying nowadays?
If you want to put in your money somewhere, put it in commodities. That's the only thing I bought recently. I have bought some yen and swiss francs. If you know enough about currencies to figure out who is going to benefit, if I am right about the currency turmoil coming, then you can buy some of the currencies and if you think that the rupee is the place to be, then you can buy some rupees.
Long-term inflation expectations in the US as reflected by the five-year forward breaking rates on treasury inflation protected securities. Those have hardened considerably since the beginning of the year. That's also your view, right? Too much money in the financial systems and monetary authorities the world over don't have a credible plan to withdraw liquidity?
I cannot conceive of lending money to the US government for 30 years in US dollars for 3, 4, 5 or 6% interest. It's just inconceivable to me that I would let them have my money for 30 years and they would pay me back someday in US dollars at such a low rate of interest. I expect problems in the bond market. I don't know when. I am not sure about the bond market. I was short in the bond market, but I got out. I expect to see serious problems in the bond market down the road.
In the near term, markets seem to be more concerned about growth than they are about inflation. The difference between the 10-year and the two-year bond yield in the US has narrowed some 40 basis points since early June. Unlike you Jim, people are actually going out and buying long maturity treasuries because they don't see growth, don't see inflation. So, what do say to these bond buyers? Good luck?
When you see anomalies like this in the market, you are supposed to take advantage . The spread is very low. So, why would anybody buy a 10-year when he can buy a two-year ? Not worth the extra risk to go out 10 years. I would urge people to keep their wits. Now, granted Mr Bernanke and the US are buying a lot of government paper and driving the price up. That's why I am not sure. He has got more buying power than I do, at least for the foreseeable future. So, you are seeing longer bonds going up. That gives you an opportunity to get out if you own them or think about selling them short if you don't own them and know how to sell short.
RAPIDFIRE ROUND
Ben Bernanke: Hero or villian?
He's an idiot. ( Watch )
US stocks: Buy now or stay away?
I'm not buying them.
US banking stocks: Short them or stay away?
I'm doing neither. I am watching. They're down a whole lot.
US bonds: Short them or stay away?
I'm doing neither right now. My next move will probably be to sell them short.
In Asia: Sri Lankan stocks or Indian equities?
I'd rather buy Sri Lanka than India.
Chinese stocks or Indian stocks?
I'm not buying either at the moment. I don't own any Indian stocks. I own Chinese shares which I am not selling. The Indian... I wouldn't buy either.
Gold or silver?
I'd rather buy silver today. I own both and I'm not selling either.
http://economictimes.indiatimes.com/articleshow/4774115.cms
14 Jul 2009, 0013 hrs IST, Andy Mukherjee, ET Now
In an exclusive interview with ET NOW , Mr Rogers reiterated his view that a currency crisis could happen any time in the
near future. But he’s not sure yet who’s going to pay the price — pound sterling, US dollar or even the rupee. Excerpts: ( Watch )
The commodities rally seems to have paused. The Rogers International Commodity Index has come off 13% since June 12. This pullback, essentially as I can see, is because of tin, energy and silver even as some of those agri commodities like orange juice, sugar and cotton have done well. What are your expectations going forward for commodities?
That's the way I know you know about commodities. You read The Economic Times and your ET TV. So, you know that the markets always have corrections whether they are going up or down. Nothing goes straight up or down forever. So, it's having a normal correction. In my view, the best place to be is in real assetscommodities, because if the world is going to recover, they (commodities) will recover first because of the shortages and if the world economy is not going to recover, they are still the best place to be, because governments around the world are printing huge amounts of money. So, if you got to own something, I don't much to own besides commodities.
In India, we are getting worried about the monsoon. We are looking out of our windows and not finding any clouds, and there is also talk about El Nino weather formation. Is this something you would advise investors to keep an eye on?
Of course, I would. The world's inventories of food are at the lowest they have been in decades. We haven't have had any serious weather problems around the world for several decades as a matter of fact. So, with fairly good weather, we have been having bad harvest or we have been consuming more than we have been producing. Can you imagine what's going to happen to the price of agriculture if we have bad weather around the world?
The last time we met here in Mumbai you had a sachet of sugar in your pocket and you pulled it out to underscore your point of impending shortage about agri commodities. You have been right about sugar as far as we can see from the price charts. What are you hiding today in your pockets? A silver coin, a hip flask full of crude oil, may be?
I do actually have a silver coin in my pocket. I don't know how you knew. I also have a gold coin, but the silver one is probably my better play. If I were a bright young man, I would be buying sugar now and silver, given the state of the world. That's not a recommendation, but I am just saying I do own some silver. Silver is cheaper than many things on a historic basis and I do own some silver. The dollar has fallen almost 10% since the beginning of the stocks rally in March. Commodities have risen 94% of the time that the dollar has fallen. A very strong correlation. Do we expect the dollar decline and the commodity run-up, therefore, to continue? It's not always a strong correlation. You are right; there has been (a correlation) in recent months, recent years even. But no, there are many times when the dollar and commodities go entirely separate ways. So, don't get it into your head, and I know many times that the press do have it in their head that commodities and dollars go opposite ways. I am not terribly bullish on the dollar in long term. US dollars are a terribly flawed currency and down the road I hope I don't own any US dollars. I still own some of them at the moment, but it's not getting better for the US. The dollar any way is getting worse. The fundamental for commodities continue to improve. The fundamentals for the US dollar do not continue to improve. They are deteriorating.
Are you still sticking to your prediction of a currency crisis sometime in a year or two?
Yes. The world is full of currency imbalances and economic trade imbalances would have to be resolved or corrected, one way or the other. Unfortunately, given the state of politicians and it's not just the current state of politicians, but politicians throughout history have usually got things wrong. So, we are going to have some problems in the currency market. I don't know when. May be not. I may be wrong. But having seen that sort of thing before in history somebody would have to pay the price whether it's the pound sterling or the US dollar or the rupee, I have no clue. No idea where it’s going to stop, but we are going to have problems in the currency markets.
What’s your view on global equities now? Do you think emerging markets’ premium over developed country markets has gone a way too high?
I don't pay any attention to things like emerging markets premium. You talk about it on TV, but every market is different. Why can't I just go out and buy emerging markets when it is likely to go broke. Every market is different, every country is different, every economy is different and every sector of the economies is different. Just because you are in an emerging country does not mean you are going to make money if you get the wrong sector. I have not bought any stocks anywhere in the world in the last couple of years except China. I did buy some Chinese shares back in October-November. I have not been buying anything other than that for some time. I have been worried about the world economy, about the world stock markets. If you got to be somewhere and if there is going to be a recovery, it will show up in commodities best of all, and if there is not going to be any recovery, commodities are still a better place to be.
So what are you buying nowadays?
If you want to put in your money somewhere, put it in commodities. That's the only thing I bought recently. I have bought some yen and swiss francs. If you know enough about currencies to figure out who is going to benefit, if I am right about the currency turmoil coming, then you can buy some of the currencies and if you think that the rupee is the place to be, then you can buy some rupees.
Long-term inflation expectations in the US as reflected by the five-year forward breaking rates on treasury inflation protected securities. Those have hardened considerably since the beginning of the year. That's also your view, right? Too much money in the financial systems and monetary authorities the world over don't have a credible plan to withdraw liquidity?
I cannot conceive of lending money to the US government for 30 years in US dollars for 3, 4, 5 or 6% interest. It's just inconceivable to me that I would let them have my money for 30 years and they would pay me back someday in US dollars at such a low rate of interest. I expect problems in the bond market. I don't know when. I am not sure about the bond market. I was short in the bond market, but I got out. I expect to see serious problems in the bond market down the road.
In the near term, markets seem to be more concerned about growth than they are about inflation. The difference between the 10-year and the two-year bond yield in the US has narrowed some 40 basis points since early June. Unlike you Jim, people are actually going out and buying long maturity treasuries because they don't see growth, don't see inflation. So, what do say to these bond buyers? Good luck?
When you see anomalies like this in the market, you are supposed to take advantage . The spread is very low. So, why would anybody buy a 10-year when he can buy a two-year ? Not worth the extra risk to go out 10 years. I would urge people to keep their wits. Now, granted Mr Bernanke and the US are buying a lot of government paper and driving the price up. That's why I am not sure. He has got more buying power than I do, at least for the foreseeable future. So, you are seeing longer bonds going up. That gives you an opportunity to get out if you own them or think about selling them short if you don't own them and know how to sell short.
RAPIDFIRE ROUND
Ben Bernanke: Hero or villian?
He's an idiot. ( Watch )
US stocks: Buy now or stay away?
I'm not buying them.
US banking stocks: Short them or stay away?
I'm doing neither. I am watching. They're down a whole lot.
US bonds: Short them or stay away?
I'm doing neither right now. My next move will probably be to sell them short.
In Asia: Sri Lankan stocks or Indian equities?
I'd rather buy Sri Lanka than India.
Chinese stocks or Indian stocks?
I'm not buying either at the moment. I don't own any Indian stocks. I own Chinese shares which I am not selling. The Indian... I wouldn't buy either.
Gold or silver?
I'd rather buy silver today. I own both and I'm not selling either.
http://economictimes.indiatimes.com/articleshow/4774115.cms
Friday, June 26, 2009
Jim Rogers says has no short positions, selling dollars
Jim Rogers says has no short positions, selling dollars
Thu Jun 25, 2009 4:49am EDT
SINGAPORE, June 25 (Reuters) - Investor Jim Rogers said on Thursday that he sees prolonged economic problems and while he did not see much worth buying, he is not shorting any assets either.
He repeated a previous comment that he is selling his U.S. dollars and that commodities were the best investment bet.
"I have no shorts for one of the first times in my life," Rogers, a co-founder with George Soros of the Quantum Fund, told Reuters TV in Singapore. "On the other hand I don't see much to buy."
He said huge borrowing by governments, particularly in the United States and Britain, would hurt their currencies and lead to future problems, though he picked the Canadian dollar CAD as one of the "soundest" currencies. "I've got out of my pounds. I will be getting out of my (U.S.) dollars soon," he said, repeating his view that commodities were the best place to be with metals having gained more than stocks this year and long-term potential for soft commodities.
"I'd rather be a farmer than a stockbroker for the next couple of years," he said. "No-one you went to school with became a farmer... so we have a shortage of farmers."
Rogers, who lives in ethnically Chinese Singapore, co-founded the Quantum Fund in 1970. The fund, since closed, returned 4,200 percent in the next decade, compared with a 50 percent gain in the S&P 500 index.
"If you're in London you're in the wrong place at the wrong time... You gotta move east."
http://www.reuters.com/article/bondsNews/idUSSP50971720090625?sp=true
Thu Jun 25, 2009 4:49am EDT
SINGAPORE, June 25 (Reuters) - Investor Jim Rogers said on Thursday that he sees prolonged economic problems and while he did not see much worth buying, he is not shorting any assets either.
He repeated a previous comment that he is selling his U.S. dollars and that commodities were the best investment bet.
"I have no shorts for one of the first times in my life," Rogers, a co-founder with George Soros of the Quantum Fund, told Reuters TV in Singapore. "On the other hand I don't see much to buy."
He said huge borrowing by governments, particularly in the United States and Britain, would hurt their currencies and lead to future problems, though he picked the Canadian dollar CAD as one of the "soundest" currencies. "I've got out of my pounds. I will be getting out of my (U.S.) dollars soon," he said, repeating his view that commodities were the best place to be with metals having gained more than stocks this year and long-term potential for soft commodities.
"I'd rather be a farmer than a stockbroker for the next couple of years," he said. "No-one you went to school with became a farmer... so we have a shortage of farmers."
Rogers, who lives in ethnically Chinese Singapore, co-founded the Quantum Fund in 1970. The fund, since closed, returned 4,200 percent in the next decade, compared with a 50 percent gain in the S&P 500 index.
"If you're in London you're in the wrong place at the wrong time... You gotta move east."
http://www.reuters.com/article/bondsNews/idUSSP50971720090625?sp=true
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