I have a trick question for you, especially if you’re interested in emerging markets: Among the four BRIC countries — Brazil, Russia, India and China — which offers the best stock market performance for American investors? Be careful how you answer, because appearances can be deceiving, especially if you focus strictly on one year. Looking at year-to-date results, for example, it might seem that the answer is Russia. From the close of trading at the end of last year through the closing price this past Friday … FXI, the exchange-traded fund (ETF) tracking China’s blue chips, is up 45.87 percent … PIN, representing India’s major stocks, is up 64.16 percent, and … EWZ, the leading Brazil ETF, is up 104.25 percent. But …...

When our leaders have no awareness of the disastrous consequences of their actions, they can claim ignorance and take no action. Or when our leaders have no hard evidence as to what might happen in the future, they can at least claim uncertainty. But when they have full knowledge of an impending disaster … they have proof of its inevitability in ANY scenario … and they so declare in their official reports … but STILL don’t lift a finger to change course … then they have only one remaining claim: INSANITY! And, unfortunately, that’s precisely the situation we’re in today: Three recently released government reports now point to fiscal doomsday for America; and one of the reports, issued by the Congressional Budget Office (CBO), says so explicitly: The ...

The bankruptcy of General Motors isn’t surprising … in fact, Martin repeatedly warned Money & Markets readers — for years — that it was coming. Still, the effects of this bankruptcy will reach all corners of the U.S. economy. Common stock holders will likely get wiped out. More than 1,100 dealerships have already received notices that they will have to shut down. Another 1,500 are getting cut in the near future. That will severely impact many already-suffering local economies. Meanwhile, thousands and thousands of autoworkers are losing their jobs. GM announced nine more plant closures and is idling three more. Many Americans have had their faith in U.S. manufacturing and ingenuity shaken to the core. And as perhaps the final symbol of GM’s utter failure, yesterday the company was ...

More than six years ago, Fed Chairman Ben Bernanke — then still Fed Governor — gave a laudation for Milton Friedman, one of America’s leading economists. Friedman’s view on the Great Depression holds that the stock market bubble of the Roaring 20s was not the reason for the Depression. Instead, it was the wrong fiscal and monetary policy in the years after the bubble had burst that caused the Depression. Bernanke publicly said to Milton Friedman: “Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”...

Exactly four years ago, on April 18, 2005, I warned that “General Motors is speeding on a course that could lead to bankruptcy.” In August of that year, I issued a second warning: “Delphi, GM’s former parts subsidiary, has already threatened to file for Chapter 11 bankruptcy by October 17 if its union does not provide relief. Don’t be surprised if one day, in the not-too-distant future, General Motors does the same.” And in October of 2005, my headline was even more direct: “GM Headed for Bankruptcy.” I prayed it would not happen as often as I predicted it. But now, unfortunately, that fateful day is finally arriving: Just This Past Friday, GM CEO Fritz Henderson Announced That a Bankruptcy Filing Is “PROBABLE.” GM and Treasury Department officials will no ...

The Dow has been on a mini-roll. Therefore, most investors are thrilled to see battered stock portfolios recover even a smidgen of their massive losses. The problem is that these investors aren’t paying attention to what’s happening elsewhere around the globe. And they may be missing out on the opportunity of the decade! That’s because the morsels of good economic news coming out of the U.S. are completely overshadowing what’s happening in Asia. China: A Bright Spot in the Region And the Global Economy Just last week, a new report from the World Bank painted a very pretty picture about the economies of China, the world’s third-biggest economy, and its Asian neighbors …...

It’s not hard to understand the relationship of the dollar with human emotions like greed and fear. And that relationship is rarely more visible than it is today … When investors are willing to take on more risk, stocks, emerging market currencies and commodities all bounce. On the other hand, when fear is prevalent, the dollar soars, Treasuries take off, and gold starts sniffing towards $1,000 an ounce. This relationship between greed (risk) and fear (safety) is the driving force of financial markets right now. For investors and traders alike, understanding this environment and making the judgment on where the cycle of risk appetite stands is the key to success. Before I go on, though, here’s a look at the basic definitions of these two market forces and how they apply to ...

My son, Kenji, was only three years old when I took him to Disneyland. And his favorite two rides were Dumbo the Flying Elephant and It’s a Small World. I swear, I had to listen to my son sing It’s a Small, Small World a couple hundred times over the next week. Walt Disney was a visionary in many ways. And he really nailed the concept of a shrinking world. But while he may have been thinking about a shrinking world in social terms, the global economy has been shrinking at a pace that even Disney couldn’t have foreseen. The World has become One Interdependent Global Economy The Group of Twenty industrial countries (G-20), which met last week in London, were responsible for 85 percent of the global gross domestic product....

“By yearend, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.” That’s how Warren Buffett describes the recent market carnage in his recent 2008 annual letter to Berkshire Hathaway shareholders. You can’t fault the Oracle of Omaha for using such a grim metaphor. After all, Buffett just recorded his worst annual performance in 44 years at the helm of Berkshire. And as he goes on to point out, there have been relatively few places to hide throughout this downturn. Muni bonds, real estate, stocks, many commodities … all have gotten hammered relentlessly. A lot of mainstream pundits have jumped all over Buffett lately. They’ve declared him a hypocrite because Berkshire sold stocks despite Buffett’s New York Times Op-Ed recommending investors ...

The biggest victim of the global housing and credit bubble may be the euro — the single currency of 16 European nations. Having just celebrated its 10th birthday in a free-fall, the euro is being exposed for all of its structural weaknesses. The euro is managed with a common monetary policy. But a fractured fiscal and political structure has left it without a full toolbox to fight hard times. And this chink in the armor is threatening to make the euro’s life-span short. The EU just celebrated its ...