This week on WealthTrack, Consuelo Mack sits down for a rare one-on-one interview with contrarian market observer and historian James Grant, publisher of the influential newsletter, Grant’s Interest Rate Observer. They discuss why the economic recovery could be much stronger than anticipated, and the ballooning federal deficit much more damaging. He also shares his views on the Fed, the US dollar, gold, China and some of his personal investing habits.

Grant is erudite, articulate, funny and opinionated - just the right ingredients for an interview not to be missed.

Note: The transcript of this interview is not available yet, but will be posted here as soon as it arrives.

Source: Wealthtrack, October 30, 2009.

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This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Richard Beales (The New York Times): Exuberance defies sober new reality, September 17, 2009. Is irrational exuberance back in the markets? Evidence abounds that it may be. With financial chaos abating, the return of risk appetite in stock and lending markets is logical - up to a point. But risk-taking that aspires to the boom-time norm, rather than a more sober new reality, could be premature and dangerous.

• James Grant (The Wall Street Journal): From bear to bull, September 19, 2009. Grant argues the latest gloomy forecasts ignore an important lesson of history: The deeper the slump, the zippier the recovery.

• John Hussman (Hussman Funds): Strenuously overbought, September 22, 2009. Our measures of market action

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Do you remember the first time you saw a rain drenched Peter Finch scream, “I’m as mad as hell, and I’m not going to take this anymore!”? We do. We were too young to see Network in the cinema (the movie came out the year we were born: 1976). Instead, we watched it late one night on TV. And we’ll never forget the moment when Finch’s character, news anchor Howard Beale, arrives in the television studio in his tan raincoat with a deranged look on his face and begins to speak to camera.

I don’t have to tell you things are bad. Everybody knows things are bad. It’s a depression. Everybody’s out of work or scared of losing their job. The dollar buys a nickel’s worth; banks are going bust; shopkeepers keep a gun under the counter; punks are running wild in the street, and there’s nobody anywhere who seems ...

Notes from the Investment Underground

Thursday, April 23, 2009

Palermo Viejo, Buenos Aires, Argentina

The greatest economic disaster in recorded history (and how to profit from it)… Your market ”script”… Lessons on guerrilla investing… Banks switch sides… The best communications company in the world… 3 sectors you should own now… Your key to “permanent wealth”… A massive glitch in the administration’s matrix… Notes subscribers beat up on your editor… 1,159% gains as stocks go bust… And more!

*** “The current administration’s economic strategy could create the greatest economic disaster in recorded history,” says Porter Stansberry in today’s DailyWealth.

Not only is the administration planning on enormous deficit spending this year, but the current plan calls for increasing deficit spending for the next decade – spending that will more than double ...

Back in December, with the U.S. recession in its 12th month – and showing no signs of abating – Money Morning Contributing Editor Martin Hutchinson warned that an “L”-shaped recession was very possible.

The U.S. recession is now in its 15th month, and many economists now expect the downturn to last until 2010 – if not longer. In fact, some economists now say the U.S. malaise could easily evolve into the virulent “L-shaped” downturn that Hutchinson predicted – a development that would guarantee both the maximum pain and the slowest recovery, experts say.

“I said in December that the recession could be ‘bloody-L shaped.’ With the huge deficits, that now looks the most likely outcome – and believe me when I say that it will be very bloody,” Hutchinson said this week. “The economy will bottom quite soon, but every time it tries to

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Whoever said irony died after 9/11 clearly didn’t anticipate this.

“Now that President Obama has signed a $787 stimulus package [sic] into law and weighed tens of billions more to aid homeowners and banks,” deadpans a hastily-written New York Times political blogpost, “he will take a break next Monday to consider just how the government can get a grip on its increasingly ugly balance sheet.”

Yes folks, it’s the “fiscal responsibility summit,” not to be confused with the “fiscal wakeup tour” chronicled in I.O.U.S.A.

90 invitees will wring their hands over the prospect of a $2 trillion dollar deficit this year.  No word yet who exactly is on the guest list, but we know the rough makeup of this august panel — 30 House members, 30 senators, and “30 scholars and representatives of advocacy groups such as AARP.”

Well, I guess the irony of inviting habitual big spenders isn’t too thick

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In a recent post about “bubbly” Treasuries, we got some comments that deserve attention.

First, this is briefly what we said;

“Treasuries have reached bubbly levels, both in terms of low yield and the rate of change of price.

Interest rates will rise when the economy recovers, or when bond buyers demand more long-term interest to absorb trillions of new issues to fund recovery programs. Rising interest rates mean Treasury prices will fall.

… For investors who invest only “long”, closing long positions in long-dated Treasuries, or being alert to a trend reversal necessitating the closing of those positions is recommended.

… For investors who also invest “short”, being alert to a trend reversal creating a shorting opportunity is recommended. The current trend is strongly upward, but could reverse dramatically …”

Some commenters agreed and some did not.

A supportive comment was;

“The safe haven play into Treasuries is demonstrating a true example of a parabolic

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Last month, I spent some time in San Juan, Puerto Rico. One day, we visited Old San Juan, the oldest settlement within the territory of the United States, with a history that begins in 1508. We also visited the old fort known officially as El Castillo San Felipe del Morro, or simply El Morro.

The fort must have sent shivers up the spines of all those who hoped to take it. The walls of El Morro are 18 feet thick and 145 feet high. Built on a headland, the Spanish Empire controlled the flow of goods in and out of the New World from here. El Morro has been tested many times. Even today, you can walk in the oldest tower in the fort, built in 1539, and see shell fragments in the ceiling that date to the 1898 bombardment of San Juan by the U.S. Navy during the Spanish-American War.

El

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Mainstream media is full of ‘Great Depression’ comparisons to today’s credit crisis. But Justice Litle says there are actually many similarities to be found a decade earlier. In 1919, there was a stock market crash, commodity slump, and a major bank bailout. But there is some hope: out of all that misery, the “roaring twenties” were born.

More from Justice in Taipan Daily:

The 1920s – widely known as “the roaring twenties” – were a time of great dynamism and change in the United States.

The decade earned its nickname and then some. Car ownership took off… movies and radio captivated the nation… and the stock market went through the roof.

The Dow went from a trough of 63.90 in 1921 to a peak of 381.17 in 1929. That’s just under a 500% gain in a

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Both gold and silver recovered from their sell-offs in early morning trading in the Far East yesterday. Both spiked upwards about 15 minutes before the Comex open...and were subsequently capped at their highs of the day very shortly after that.