Roseman's Eruptions

European Indexes

Dugald Malcolm, Montreal, Canada.

Quantitative Easing to Infinity

Montreal, Canada

The Federal Reserve’s second round of QE, or quantitative easing, came as no surprise to the markets last week following weeks of anticipation. The Fed, or “Bubble Ben” as my friend and colleague, Karim Rahemtulla, likes to call the Fed Chairman, will grow its already bloated balance sheet by another $600 billion dollars from now until next June in order to influence already low U.S. interest rates.

RBC Projects Gold “Bubble” on Road to $3,800

Montreal, Canada

Gold is heading the way of the NASDAQ in the 1990s and the Nikkei in the 1980s.

The chief institutional strategist at Canada’s biggest bank, Royal Bank of Canada (RBC), believes gold prices are probably heading into mania territory on the road to $3,800 an ounce.

Palladium on a Tear as Russian Dumping Ebbs

Montreal, Canada

The Russian have stopped dumping palladium. Combined with rising demand from car manufacturers to supplement expensive platinum in catalytic converters and hedge funds piling into the trade, palladium is now in a bull market. No other metal comes close to outpacing palladium in the precious metals family since October 2009.

Norway Gets It Right

Montreal, Canada

Can you name the only economy in Western Europe with a positive trade and budget balance?

If you guessed Norway, then you’re right on. No other country has amassed greater wealth as a percentage of GDP (gross domestic product) since 2002 on the heels of surging oil prices and prudent fiscal management. That’s a rarity these days as most European economies struggle with explosive budget deficits while others contemplate big cuts in government spending in order to avoid a run on their domestic bond markets.

Speculators Fear New CFTC Position Limits

Montreal, Canada

ETFs, or exchange-traded-funds, that bet on energy, base metals, grains and other edibles have some breathing room ahead of financial reforms starting in early 2011. The same goes for hedge funds and managed futures funds (aka Commodity Trading Advisors).

With commodities prices soaring again this year — especially core markets deemed to be vital according to government officials — the pressure is on to cut speculative bets in the sector.

Renewable Energy Turns Contrarian

Montreal, Canada

Buy low, sell high. That’s tough advice to follow in late 2010 as investors ransack just about everything with a natural resources tag ahead of another round of Fed quantitative easing.

Three years ago, the world couldn’t get enough of renewable energy. Everything with a clean energy bent, including solar, geothermal, wind and nuclear went through the roof, until the sector peaked in December 2007. Since then, it’s been a one-way ticket to a bear market beating.

Energy Storage a Winner in Mixed Year for Sector

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Montreal, Canada

Pink Floyd Sends Message as Big Brother Grows Stronger, Threatening the Sovereign Individual

Montreal, Canada

Last night I attended a concert performed by Roger Waters, co-founder of the rock band, Pink Floyd. I’ve been a huge Floyd fan since I was 16 and I’ve seen several shows since 1984, including Pink Floyd (without Waters) and a few solo shows by David Gilmour, who later joined the band as guitarist. This was the fourth time I saw Roger Waters.

If you like Pink Floyd, then you can understand the cult following this group attracts. I think you could compare it to The Grateful Dead. The latter never appealed to me.

Post-September Rally Dubious as Bank Credit Spreads Widen, EMU Tension Remains

Montreal, Canada

Markets were already overbought heading into October. Yesterday’s pullback was not a surprise as China triggered a flight to safety, which I suspect won’t derail this rally. The markets enter seasonal strength in November and if we end up with gridlock in Congress on November 2, then investors will probably drive prices even higher. Markets typically enter seasonal strength from November until May.

But it’s worth noting that some dislocations remain or have started to emerge in credit markets since September.