Full Text The October Global Financial Stability Report GFSR finds that the global financial system continues to strengthen in response to extraordinary policy support, regulatory enhancements, and the cyclical upturn in growth. Global bank balance sheets are stronger because of improved capital and liquidity buffers, amid tighter regulation and heightened market scrutiny. However, some banks are still grappling with legacy issues and business model challenges, where progress has been uneven.
This article has been reprinted with permission from Stansberry and Associates and appeared at The Daily Crux. As you undoubtedly know, financial newsletter writers get paid to make bold, exciting predictions. After all, according to newsletter writers, the world is always either about to end… or about to boom.
In fact, what I would like to show you today is without a doubt the single greatest threat to your wealth you will ever face.
The reality is, the terrible things and incredible booms we predict almost every day in the sales presentations for our newsletter business rarely come to pass. As you would imagine, I have some insight into this question.
After all, I have written some of the most famously hyperbolic headlines of all time in our industry.
Some of these predictions turned out to be right, like when I predicted Fannie Mae and Freddie Mac were going to zero. Why would I remind our clients of the single biggest weakness of our business model — our need for hyperbolic sales pitches? What can I say? I firmly believe that if you combine the strategies I explain in these notes with our investment research, you will excel as an investor.
In fact, I know thousands and thousands of investors around the world have used our work to become world-class investors. They depend on us for reliable and profitable ideas. Sadly, though… perhaps because of our marketing, most of the people who try one of our investment newsletters either demand a refund or simply allow their subscription to lapse.
The main reason that happens is because the reason they subscribed — the original hyperbolic headline — did not pan out the way they expected. But… nothing costs you more in publishing. Likewise, nobody wants to read that their cherished financial nonsense is going to come to a bad end.
Or the latest craze: Just mentioning that Bitcoin might turn out badly will likely cost me several thousand subscribers. So… how can you know when a newsletter writer is going to be right about an outlandish prediction… perhaps one that goes against your own beliefs about the market?
In my opinion, the best guide is history. When history says the prices in a market have gotten completely out of whack, the newsletter writer is going to be right every time.
Let me give you one recent example from these pages. Barring the end of the world, the price of oil is going to fall and the price of natural gas is going to rise. At the time, natural gas producer Chesapeake was collapsing because of low natural gas prices and nearly everyone on Wall Street was short natural gas.
I recommended buying Chesapeake bonds and its competitor, Devon, and I predicted a huge rebound in natural gas prices. A year later, the price of gas has doubled.
How did I know? A barrel of oil contains 5. One thousand cubic feet of gas contains just a little more than 1 million Btu. Thus, a barrel of oil has approximately six times more energy than 1 million cubic feet of gas.
On an energy-equivalent basis, you would expect natural gas to trade for one-sixth the price of oil. But of course, oil is more highly prized as a fuel source. Historically, looking at the two commodities, the average multiple of gas to oil was about 10x. That is, a barrel of oil was, on average, 10 times more expensive than one thousand cubic feet of gas.
By last April, that premium had reached an all-time high of 55 times.
There was no way that kind of price relationship could have lasted. You should expect oil prices to continue to decline and gas prices to continue to rise. When this crash occurs, it will be the largest destruction of wealth in history.
There has never been a bigger bubble in U. How do I know? But they do today.A ratio analysis is a quantitative analysis of information contained in a company’s financial statements. Ratio analysis is used to evaluate various aspects of .
The October Global Financial Stability Report (GFSR) finds that the global financial system continues to strengthen in response to extraordinary policy support, regulatory enhancements, and the cyclical upturn in growth. Global bank balance sheets are stronger because of improved capital and liquidity buffers, amid tighter regulation and heightened market scrutiny.
Liquidity Ratios Home» Financial Ratio Analysis» Liquidity Ratios Liquidity ratios analyze the ability of a company to pay off both its current liabilities as they become due as well as their long-term liabilities as they become current. It would benefit the statists more to set it all up so they can blame the other side when it happens on their watch.
TPTB are much better at planning than any libertarian or conservative b/c the latter two pretty much just want to be left alone while the statist has an ever expanding agenda. To make the topic of Financial Ratios even easier to understand, When computing financial ratios and when doing other financial statement analysis always keep in mind that the financial statements reflect the It is also important to realize that an impressive financial ratio in one industry might be viewed as less than impressive in a.
A financial ratio or accounting ratio is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization.