I’m Alex Tabarrok.  I’m a professor of economics at George Mason University, and Director of Research for The Independent Institute.

I’m the editor of a book called, Entrepreneurial Economics: Bright Ideas from the Dismal Science.  It’s a bunch of clever ideas for using incentives, for using economics to improve the world, to reduce the shortage of human organs, to improve the patent system, to do a whole variety of clever improvements.

The story of economic growth has changed.  But when you say innovation, you also mean change, and that has two sides.  Sometimes people are afraid of the change.

So during the Great Depression, in that crisis, there was definitely world retrenchment in trade.  We had those things like the Smoot Holly Tariff, and trade just declined all over the world.  Fortunately, in this last recession, we have not seen that to anywhere near the same extent.  So that is an optimistic point.  That is a good point.  That is something that we have done right.  We have not seen a lot of trade wars.

It’s something we need to be concerned about because, yes, any time other people start to get rich, people begin to wonder about their own position in the world.  They begin to fear.  But so far, I think we’ve been – I think we have learned actually some lessons from the past, and we have not cut down on trade as much as we have done in the past.

Trade is absolutely critical.  Think about it this way.  The reason trade is important is because it makes markets much larger, and that increases the incentive to do research and development.  So I like to say, you know, if China and India were as rich as the United States is today, then the market for cancer drugs would be five or six times larger than it is now, and that means five or six times the purchasing power, the incentive to do research and develop new drugs.

So part of what we have to understand is that when other countries get rich, that is a benefit to us.  That is not a cost.  When other countries get rich, they start to contribute to the incentive to do research and development – to research and develop new drugs, new computers, new software, all kind of ideas.  And this makes us rich as well.

Think about the world economy as a massive parallel computer.  Well, for most of the last century, most of those processes were offline.  We had more than a billion people in China and India not contributing.  A processor being offline.  Today those processes are coming back online and are finally contributing to the world economy.

Well, I’m really very optimistic about the future.  And, really, for the very first time, in at least a 1000 years, the world economy is really operating almost on all four cylinders.  Think about it this way.  For well over a 100 years, most of the world economy has been driven by the United States, Britain, Japan, a few other countries.  Today, we have China and India coming online.

So what I mean by this is that we have billions of people in these countries who have been cut off from the world economy, whether through communism or whether through abject poverty, they have basically been, simply, producing enough agriculture to feed themselves, sometimes not even that, and that’s it.  They haven’t been part of the world economy.

Today that’s changing.  Today, for the first time, we have billions of people in China and India who are beginning to contribute ideas, innovations, new discoveries, who are beginning to contribute to the world economy.

On The Importance of Trade and New Economic Growth originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".

In the latest DR Video Series interview, The Daily Reckoning’s Eric Fry talks with The Gloom, Boom & Doom Report’s Dr. Marc Faber about where he sees the biggest opportunities in the global economy. In addition, Dr. Faber explains his view on the inflation/deflation argument – and reminds us of the sneakiest form of inflation: taxation.

We hope you enjoy the video. Let us know what you think in the comments section below the transcript. Stay tuned for the second part of this exclusive interview with Dr. Marc Faber…coming soon!

Eric Fry: Hello, I’m Eric Fry. I’m here with Dr. Marc Faber, the editor of The Gloom, Boom & Doom Report. Which is it?

Marc Faber: Well, the world is in transition and you have some trends that are favorable and other trends that are no favorable. So I think it’s not a question to be ultra-bearish or ultra-bullish but to try to identify where there are opportunities. And I believe, in general, we live through very interesting times in the sense that the weight of the global economy is shifting to emerging economies.

And we’ll have volatility in emerging economies, but in general I think that as a percent of world’s GDP, you will find in 10-20 years time countries like India, China, Vietnam, Latin America, Africa, the Middle East, Russia, Central Asia will have a much larger weight and also a much larger say in the global economic affairs and political affairs. And that will lead to a lot of tension and volatilities in asset markets.

Eric Fry: Right. Well, that’s the boom part of the story. The gloom and the doom part, you’ve written a lot about deflation and inflation. Often those are simply academic arguments. In this environment, it feels as though the inflation/deflation argument is critical, and kind of a razor’s edge for determining the outcome of the various asset classes.

Marc Faber: Yes. That is correct. But if you really think through the deflation scenario then it would mean that the economy in the western world, notably in the US, is very weak.

So what happens if the economy is very weak under the Obama administration, the fiscal deficit goes up not down. The government tanks as a percent of economy expands. Monetary policies will have another huge easy move, or another extraordinary measure increasing the effects balance sheet. These are all factors that then lead eventually to more inflation.

Even if you have an environment where GDP per capita in real terms, inflation adjustment goes down. The government will of course lie about it. They will make it look good with all statistical adjustments they can use. The rate will go down as it has for the last ten years, but asset markets can go up very strongly.

Eric Fry: Well, you make the case that the government monetary policies will offset the deflationary effects in the western economies. How quickly do you think that will take place?

Marc Faber: Yes. And also I’d like to point out that in an economic system you can always have, in some sectors of the economy, deflation and then in the other sectors inflation. And we have now a global economy. I can assure you, you can go anywhere in the world – whether it’s Brazil, Africa, Asia, Central Asia, Russia.

The price level today is of course much higher than 20 years ago or ten years ago. So the US and western Europe, they may have on an international scale a bias towards maybe deflating a little bit, certainly. Real wages are deflating. But in emerging economies you have a lot of inflation. In some countries you have food prices going up annually at 20 percent per annum. And nobody can tell me that his energy bill is today lower than it was ten years ago.

Because the price of oil is much higher. It is up from ten dollars a barrel to say eighty dollars a barrel.

Eric Fry: Right. But right here in the US, many economists – and you know who they are – make the case for a long-term deflation or disinflation because private credit is contracting.

Marc Faber: Yes. I love one economist. He lives in New Jersey. His train fare has just gone up by almost 30 percent and he talks about deflation.

I can also send him a nice message that his tax bill will go up. So taxation is also a form of inflation. Because it’s not as simple as to say, “I’m going to tax you and you will pay the tax.” You can roll over these taxes onto other people, like retailers. They can roll it over to the consumer, and so forth and so on. This is the difficulty of fiscal policies. You don’t know right away who will end up paying the tax whenever you impose a tax.

Stay tuned for the second part of this exclusive interview with Marc Faber – coming soon!

The Global Economy: Gloom Boom or Doom? An Interview with Dr. Marc Faber originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".

In the second part of this two-part interview, the Daily Reckoning’s own Eric Fry sits down with DR founder Bill Bonner at this year’s Agora Financial Investment Symposium in Vancouver to discuss what Bill sees as the most promising long-term investment: emerging market real estate. This overlooked and undervalued asset class is perfect for investors who are looking for a long-term play. In addition, Bill and Eric talk about the long side of The Trade of the Decade: Japanese shares.

And as a special treat – we are having a little contest. Caption the screenshot of the interview below as a comment at the bottom of the page. The funnier the better (but keep it clean).

We’ll pick a winner and send you a special prize. We can’t tell you what it is, but we can say that almost every single employee at the DR HQ keeps this item on their desk…

Emerging Market Real Estate – The Most Promising Asset Class

Eric Fry: All right.  All right.  So let’s – let’s talk about the long side of that.  Now, you are – you also have said several times you invest in stones, you like stones, not gemstones but the stones that go into houses.

Bill Bonner: Houses.

Eric Fry: Houses, right.  But it seems it would become increasingly important where those stones are –

Bill Bonner: Absolutely.

Eric Fry: So if you were going to be moving stones around now, what country would you want them to be in?

Bill Bonner: You know, that is a very good question and I didn’t hear anybody touch on it, but I think one of the least explored, the least understood and the most promising asset classes in the world is third-world real estate because the stock markets are extremely vulnerable to any movement of capital, to any sell-off in the west –

Eric Fry: That’s right.

Bill Bonner: The stock markets go right down.  We’ve seen that in India, China and elsewhere, but the real estate markets don’t go down.  The real estate markets depend upon the economies and the economies have largely decoupled. So I think if somebody is true – but it’s a hard thing to do –

Eric Fry: That’s right.

Bill Bonner: And I have one friend, Ronan, Ronan McMahon, who does that, and Ronan has found the coast of Brazil, which you think is very attractive because – and he’s buying commercial properties there because he’s getting the benefit of the rise, of the Brazilian economy without the risk of a falloff in Brazilian equities.  There could be a falloff any day in equities, but the property markets don’t move that fast.  They respond to economics.

Eric Fry: Right.  I’m familiar with Ronan’s research also and he’s buying cash flow positive properties and it’s an underdeveloped mortgage market in Brazil, etc.  You have a number of winds in your sails in markets like that.

Bill Bonner: You know, Ronan has also found properties off the coast of Ecuador which are long-shot properties, he calls them, legacy properties.  You buy them, you hold them for ten years, something will go right eventually, and you have to not mind holding them.  These are very long-term places.  But I do think that that is – that’s a class that we ought to think more about is undervalued, underpriced, third world emerging market property.

Eric Fry: The emerging market trading alert.

Bill Bonner: Yes, I see a new service coming.

Eric Fry: Okay.  One final question.  On the long side of your trade, getting back to Japanese equities, let’s talk about that for a second.  You are still a fan of these long, slumbering securities?

Bill Bonner: Well, fan is putting it to too much.  I’m not a fan of them.  I just think they’re very cheap and the only point of the trade of the decade is to monetize from regression to the mean, and I’m not making any prediction.  I don’t have any opinion.  I don’t know anything about these companies.   I just know they’re darn cheap and they’ve been going down for the last 20 years, so just on the basis of regression to the mean, if you ask me ten years from now what’s going to go up and I look around the room and I don’t see anything that’s down like Japanese shares, so I’ll say I’ll take a shot on Japanese shares.

Eric Fry: Makes sense.  Well, and don’t think you can just make this recommendation and leave.  We’re going to come back in ten years and we’re going to talk about that.

Bill Bonner: Oh, no.

Eric Fry: All right.  Thanks very much, Bill.

Bill Bonner: Thank you.

Emerging Market Real Estate – The Most Promising Asset Class originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".

In the first part of this two-part interview, the Daily Reckoning’s own Eric Fry sits down with Bill Bonner at the Agora Financial Investment Symposium in Vancouver to discuss a multitude of topics: what the speakers had to say at this year’s event, Bill’s thoughts on the credit deleveraging cycle, why he remains anti-Treasury…and why his “Trade of the Decade” still looks like a great bet. Enjoy!

Bill Bonner on Deflation, US Treasury Bonds and the Trade of The Decade

Eric Fry: Hello.  I’m Eric Fry.  I’m here with Bill Bonner.  And Bill, I just wanted to check in with you after the recently concluded investment symposium in Vancouver – you were there –

Bill Bonner: I was there.

Eric Fry: You saw the speakers.

Bill Bonner: I was there, yes.

Eric Fry: So who was right, who was wrong, who was just plain nuts?

Bill Bonner: Oh, boy.  That’s a loaded gun you’ve given me there.

Eric Fry: I know.  I want to elicit an answer here.

Bill Bonner: Well, I think the thing was – I found myself agreeing with just about everybody, but not necessarily coming to the same conclusion.  And, I think what I saw is that there is very good evidence and lots of documentation for the credit deleveraging cycle that I think everybody sees, and beyond that there’s a lot of speculation about what that means. I mean, in terms of the government response to it, in terms of investor response, and as you know, the bond market and the dollar rests on confidence.  So there’s a lot of worry that confidence will give way when they see the federal government continuing to run huge deficits year after year.

I personally came to the conclusion that that was probably not a worry for the near term.  In fact, you know, I feel myself being much more optimistic than most analysts and I see ourselves working our way through this in the classic Japanese way, which just happens to be the worst possible way.

Eric Fry: Right.  Okay.  Well, that suggests the kind of lengthy deflation or disinflationary period.  Is that what you’re looking for?

Bill Bonner: That’s what I see.  Now, I told the audience myself that that’s all you can see, and it’s important to remember just because you don’t see something doesn’t mean it’s not coming and from what we’ve  seen and what we’ve experienced over the last few years is a realization that the unintended consequences of government actions are sometimes very sudden and very powerful, so we could see a crisis at any moment.  And I told the people in the audience that even though I personally do not see a blow-off in the gold market, for example, I would sure want to hold some gold just in case.

Eric Fry: Right.  Right.  Well, a lot of the speakers also seem to want to have it both ways on the question of deflation and inflation and many of them were saying, yes, I think there’s going to be a deflation so I want to buy Treasuries, but only for two-and-a-half years and then there’s going to be inflation.  Now, you are on record as being relatively anti-Treasuries as a Trade of the Decade.

Bill Bonner: I’m totally anti-Treasury.

Eric Fry: How does that coincide with your expectation for a deflationary environment?

Bill Bonner: Well, this expectation has evolved over the last six months, and six months ago if you had asked me, I would have been more anti-Treasury than I am today because now what I see — which I didn’t see before, which didn’t exist before — was the ability of the world to finance Treasuries over a long period of time. Before we weren’t in the Japan situation because we didn’t have the savings to finance all those deficits.  We’re talking about deficits of 1.5 trillion dollars a year over the next 15, next 10 years. And anybody would have said a year ago, maybe six months ago, ‘Well, that’s impossible, you can’t finance that much.’  I think I did say that.

But now, what we’re seeing is that there’s a huge increase in savings that the savings, even of the Japanese, are still going to the U.S. Treasury market and then, if we’re right, generally about the bear market in stocks, bear markets in equities, generally it’s going to mean that investors are scared and they’re going to look for safety in the safest credit in the world.

You know that – and I made this point too – that printing press, that Bernanke’s famous printing press, the technology that it’s got, is that they can always guarantee inflation.  Well, the thing is, they can’t always guarantee inflation, not in a credit deleveraging cycle, and that’s what we’re seeing.  They cannot get it.

They’re getting lower and lower rates and now they’re getting uncomfortably low rates of consumer price inflation, even to the point of absolute deflation, which seems to be coming, seems to me will be here next quarter or quarter afterwards.

Eric Fry: Right.

Bill Bonner: But that printing press thing, it works both ways because on the one hand, people say, well, I don’t want Treasury bonds because I know they’ve got that printing press and they can just print up dollars at will.  But in a fear situation, people say I want Treasury bonds because I know they can print up dollars at will.

Eric Fry: Right.  Well, and does that mean that your Trade of the Decade, then, is not a trade of the next five years, or should we restart the Trade of the Decade here in August and –

Bill. Bonner: Now, look, a Trade of the Decade is a Trade of the Decade.  You stick with it and you –

Eric Fry: And dance with the one you brought in.

Bill Bonner: Yeah, that’s right.  You just stick with – you go home with the one you came with.

Eric Fry: Right.

Bill. Bonner: And besides, it’s too early to know, but I’d say that as the trade, it still looks pretty good.  You know I modified that trade, by the way.  I said, buy Japanese small cap stocks and sell Japanese bonds.  I changed it from U.S. bonds to Japanese bonds just to get the currency thing out of the way.

Eric Fry: Neutralized?

Bill Bonner: Neutralize the currency problem and so now I still feel pretty good about that.

Bill Bonner on Deflation, U.S. Treasury Bonds and the Trade of the Decade originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".

Bill Bonner: Thank you.

Daily Bell: So tell us how you began in this area and did you dream of running a hard money empire as a child?

Bill Bonner: I would have been a pretty mixed up child if I dreamed of such a thing. But I have to admit even as a child, I was fundamentally, genetically, naturally, programmed to be an entrepreneur. Never liked anybody telling me what to do, I never felt that I fit into any organization, never had any desire to join Goldman Sachs and work my way up or anything and so I had lots of ideas of what I was going to do. I had studied English Literature and thought I wanted to be a journalist. One of my first assignments was as a foreign correspondent for a rock-and-roll magazine which went broke right after I joined it and then I realized I was going to have to figure something else out. So after that it was just a long combination of errors, mistakes and accidents that lead me to where I am today.

Daily Bell: So what got you moving in this direction?

Bill Bonner: Well that’s a good question. It was a combination of things. I actually started with a publication called International Living because I was drawn to the idea of globalizing one’s self for a long, long time. In fact I started when I was in college, I went to the Sorbonne in France as a student. I liked France quite a bit at the time, I liked Paris, liked the life, the cultural life, the intellectual life and so on. International Living was a success but I couldn’t figure out how to go beyond International Living without going into financial areas, so I was forced into finance because the financial area is a much bigger area for publishing and it suited my talent in a way because you tend to do well in investing if you kind of have a contrarian attitude. And I do.

If you buy what everybody else is buying, then you are buying something that is fully priced, and if you buy what nobody else is buying, in fact you have to buy something that nobody else wants and that tends to go up. So that suited my basic contrarian nature and we started with Hulbert’s Financial Digest. Nobody will probably remember that but Hulbert is still in business and writes for Forbes. I believe that Hulbert’s Financial Digest is still around and we started that back in 1979.

One thing led to another, and we found financial publishing on the margin, fringe publishing, this quirky newsletter business, is often lucrative. That’s our business, our business is in that niche, that niche of developing informational tools and digging deep.

You know, the idea of the mainstream press is to keep it very superficial because they know the audience really doesn’t want to dig into these things. But in the marginal newsletter business, people do want to dig in and we want to dig in and find out what things mean. What’s going to happen in the economy for example is the big, big question. So that’s how I got into economics.

To read the rest of Bill’s interview, click here.

The Daily Bell Interviews Bill Bonner originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".

Well, our good friend Dr. Marc Faber couldn’t agree more. And in a recent interview for Yahoo’s Tech Ticker, he explains why.

Marc Faber Predicts the Collapse of Capitalism originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".

No, this rally had another factor pushing it: our friends in the Far East. The Chinese have been quite vocal with their concern over the US dollar and have increased their official gold reserve holdings by 75% in the spring. Smart move.

In the Weekend Edition’s Highlight of the Week, Bill Bonner looks closely at where the recent rise in gold prices puts our “Trade of the Decade.” Read on…

Gold took off [Wednesday]…closing at $1020. Here at The Daily Reckoning, we’re impressed. But we’re not that impressed. Gold, of course, is half of our Trade of the Decade, which we announced almost 10 years ago. We’re bullish on the metal…have been for a very long time. But recent comments in this space have made readers wonder what the Hell is going on…so we will spend a few minutes clarifying.

The answer to that is simpler: gold is going up…then down…then up again. It is going up because the feds – including the feds in China – are encouraging speculation. Then, it is going down when the next phase of the bear market reasserts itself and the speculators run for cover. Then, it is going back up…much farther and faster…when the Fed becomes desperate and finally throw caution – and dollars – to the wind. We’re confident this last stage will arrive. Our hesitation is that it will take much longer than we expect. Gold may rise in a deflation…but it soars in a period of inflation. That period could be a long way off.

The above is just an excerpt from Bill’s standout essay from this week. You can read it in its entirety here.

Well, that does it for us…enjoy the rest of your weekend,

Kate Incontrera
The Daily Reckoning

China Gets in on the Trade of the Decade originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".

As it turns out, it’s just another fake story created by the Onion News Network.

But frankly, we’re a little surprised the feds haven’t tried this yet. Who knows? It might actually work better than anything they’ve tried so far.

U.S. Government Stages Fake Coup To Wipe Out National Debt

US Government Stages Fake Coup to Wipe Out National Debt originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".

This year, as the worldwide deficit spending eats away at currencies relative to gold and commodities, gold has risen 14%…while the Dollar Index has shed 5.6%.

No doubt the dollar will keep in this free-fall as the Feds chip away at it, but is this run-up in gold prices sustainable for the short-term? Probably not, we will most likely see a correction. But in the long-term…those who are holding gold should end up pleased.

In the Highlight of the Week, Bill Bonner looks at commodity prices and wonders why they aren’t following the normal protocol for a depression.

…if it’s a depression, how come commodities are up? And stocks are up? Above all, how come Chinese stocks are up? Everybody knows China earns its money selling products to Americans and other non-Chinese. If the rest of the world is in a depression, who is China going to sell to? How come China isn’t in a depression already? But there you are – there’s another thing that hasn’t happened. Chinese stocks haven’t collapsed.

Or, second…maybe the iron laws just haven’t caught up to the market – yet.

The above is just an excerpt from Bill’s standout essay from this week. You can read it in its entirety here.

Enjoy the rest of your weekend,

Kate Incontrera
The Daily Reckoning

Do We See a Golden Lining? originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".

However, gains in stocks accelerated on Friday afternoon, after the jobs data was released. Investors took notice that the numbers of jobs lost in August was smaller than expected – and chose to ignore the unemployment rate’s rise to its highest level since June 1983.

Are we the only ones that see this little tidbit as a bad sign? Maybe investors have other things on their minds. Says Jonathan Vyorst, senior vice president and portfolio manager at Paradigm Capital Management, “…it’s a less panicky day because everyone’s thinking about vacation.”

Well, enjoy the bliss while you can…we think stocks will be in for a rude awakening come Tuesday morning.

But none of this is coming as a big surprise to Bill Bonner. In fact, he sees everything happening just as expected. Keep reading for the Highlight of the Week…

So far, everything is happening just as we expected. After more than half a century of boom, we are now in a bust. People need to downsize…cut back…and live a little less large than they had in the boom years. That means…well…just what you’d expect.

From The New York Times comes this headline: “Older US Workers Put Retirement on Hold.”

The Times tells us that older people are continuing to work because they don’t have a choice. They can’t afford to retire. So they hold onto jobs, which is another reason it’s so hard for the unemployed to find a job. Those who have them aren’t giving them up. A Bloomberg report today, for example, tells us that more people are applying for job benefits than expected. Another tells us that millions of people are running out of benefits before they find a job.

Isn’t it nice when things work out “as they should?’ Check.

The above is just an excerpt from Bill’s standout essay from this week. You can read it in its entirety here.

Finally, we take a look at our two favorite government-sponsored entities.

Last year, Fannie and Freddie lost $100 billion between the two of them. Even with almost $100 billion in federal bailouts, they couldn’t stop losing money hand-over-fist.

However, over the past month, investors took a second look. Fannie Mae jumped by as much as 266% in August, while her brother, Freddie Mac, soared a whopping 300%.

Lifetime Income Report’s Jim Nelson with more on this story:

“We aren’t going to try to predict what these two will do, but we are fairly certain that President Obama and Secretary Geithner won’t give up anytime soon.

“In February of this year, Geithner told reporters that as much as $200 billion could go toward each of these two semi-government entities – up from the initial $100 billion. All of this money will have to be paid back to the government – at least in a perfect world – through special private preferred stock yielding 10%. But when you need money as badly as these two, you’re willing to take that 10% interest rate.

“Sure enough, they are still asking for more money. Fannie just asked for another $10.7 billion last month. That’s nothing, though. Each of these mortgage lenders have up to $150 billion left before they reach Geithner’s $200 billion mark.

“While this leaves an incredibly sour taste in the mouths of any taxpayer, it is making some on Wall Street very rich. 300% in a month is a rare feat, but they are pulling it off.

“We, [at Lifetime Income Report] however, are staying as far from Fannie and Freddie as possible. That kind of rise, with very little actual reasoning behind it – other than access to this bailout capital – gives us absolutely no hope that common stock in these companies is worth a single penny.”

We’ll keep you updated on this story as it unfolds.

Enjoy the rest of your weekend,

Kate Incontrera
The Daily Reckoning

Highest Unemployment Rate Since 1983 originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".