U.S. stocks tumbled Thursday as concerns about a subdued economic recovery played in the minds of investors.  Safer bets like dollar strengthened and oil prices slumped.  As investors turned to safe havens, Treasury prices rose, sending corresponding yields lower.  Yields on three-month bills, considered one of the safest bets, turned negative for the first time since December.  A Bank of America Merrill Lynch downgrade of semiconductor industry also added to the downward pressure.     

The spike in bond prices came even as the Treasury announced plans to auction a record $118 billion in new notes next week – an auction schedule of $44 billion 2-year notes on Monday, $42 billion 5-year notes Tuesday, and $32 billion 7-year notes on Wednesday.

The Dow, which had plunged as much as 170 points during the session, ended down 93.87 points, or 0.9%, to 10,332.44.  The broader Standard & Poor's 500 index fell 14.90

...

The November edition of Donald Coxe’s Basic Points research report (subtitled “The Power of Zero”) has just been published. His investment recommendations, as summarized in this document, are listed in the paragraphs below, but I do recommend you also read the full report at the bottom of the post. (Also note that Donald’s weekly webcasts can be accessed from the sidebar of the Investment Postcards site.)

1. Remain underweighted in US equities-as a percentage of total equities within global portfolios, and as a percentage of assets in US balanced portfolios. Underweight US bonds in global portfolios.

The Obama long-term financial projections for the US are high risk and unsustainable. Forthcoming elections-or a currency crisis-could induce some discipline, but within the OECD, the US should probably no longer be accorded top ranking for bonds and stocks.

2. Within the US market, underweight US economy-related

...

By Cees Bruggemans, Chief Economist FNB.

After a great fall (2008), success in arresting the fall and stabilizing the economy on a low level of capacity utilization (2009), growth prospects tend to be very promising as slack resources as well as new inputs will be available to be put to work. Demand needs to grow in order to put such available resources to work.

Potentially this will be so for years to come (2010-2020) as any new supply imbalances eventually ending the next growth expansion (balance of payments, inflation) could remain manageable for the time being.

This, in a nutshell, is the case for growth.

It then gets better, but it also gets worse. For the global environment looks even better than this simple base case, offering piggyback opportunities for small open economies like ourselves.

This very favourable global environment, however, may also prove to offer a too rich

...

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

• John Authers (Financial Times): Triumph of common sense over benchmarks, October 3, 2009. Rather than watch everyone herd towards benchmarks, while charging fees for active management, in future perhaps a lot of money will be managed passively and the rest will be allocated to investors who can show they have skill, and who have the freedom to go wherever they believe they can profit.

• Randall Forsyth (Barron’s): Is this a real bull or “Red Bull” market? October 2, 2009. After the caffeine rush of the third quarter, stocks and Treasuries give way to less stimulating market action.

• Paul Krugman (The New York Times): Mission not accomplished, October 2, 2009. Stocks are up. Ben

...

GIC held over 9 pct of Citigroup prior to stake sale * Now has below 5 pct; will stay on as “portfolio investor” * GIC says realised $1.6 bln profit from sale * Citigroup shares up in premarket trade By Kevin Lim and Saeed Azhar SINGAPORE, Sept 22 - Singapore wealth fund GIC has halved its stake in Citigroup <C.N>, cashing in on a market rally for a profit of $1.6 billion, but signalling investor concerns over the outlook for global banks. The sale follows other divestments by sovereign funds from Western banks they helped rescue at the start of the financial crisis to use the money closer to home in emerging markets and in other growth sectors such as resources. In June, Abu Dhabi exited Barclays Plc <BARC.L> with a gain of about 1.5 billion pounds , though Temasek [TEM.UL], another Singapore wealth fund, lost an estimated $4 billion from an early exit from Bank of ...

U.S. crude oil fell over 3 percent to below $70 a barrel on Friday as U.S. equities struggled for traction and raised fears about the economy and a recovery in energy demand.

U.S. crude for October delivery fell $2.20 to $69.74 by 1:24 p.m. EDT (1724 GMT) after rising to $72.90 in choppy trading. London Brent crude fell $2.10 to $67.76 a barrel.

“Crude put in a high for the week, but there was no follow-through and the dollar and S&P turned around and that helped pull crude back,” said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

U.S. stocks were hampered by profit taking after five days of gains and the longest winning streak since November which helped boost crude prices earlier in the week.

Analysts and traders say that current oil prices reflect attitudes in the market rather than fundamentals.

Data released Thursday by the U.S. government showed petroleum product inventories, including heating oil

...

ConocoPhillips (COP) recently received approval from federal officials to pull a collection of North Slope oil and gas leases into a new oil-field unit, a predecessor to development and production. For this purpose, the company partners with Anadarko Petroleum (APC). The leases are in the National Petroleum Reserve (Alaska) and on the western side of Alaska's North Slope. The new oil-field unit, named Bear Tooth Unit, includes 23 leases and approximately 105,000 acres, located northwest of the company’s Mooses Tooth Unit. The company said that both the units have sites of known oil discoveries. While production from the Mooses Tooth Unit is expected to commence sometime between 2012 and 2014, Bear Tooth would be online later. ConocoPhillips has recently relinquished a few leases that do not fit within its strategic plan based on the potential for commercial development. ConocoPhillips has significantly transformed its asset ...

The $300 Trillion “Recovery” No One’s Talking About The biggest mega trend in 100 years is already taking over half the world. Early investors could stand to make initial gains of 237%, 139%, 163%, 356%, 341%, and 600% on six companies driving this trend. Click here for details.

The worst global recession since World War II is ending faster than previously thought, but the recovery will still be a slow one, the Organization for Economic Cooperation and Development (OECD) said today (Thursday).

For the combined economy across the Group of Seven (G7) nations, the OECD expects a contraction of 3.7% this year, down from the 4.1% drop it projected in June. Still, the organization sees ample spare production capacity, low levels of profitability, rising unemployment and “anemic” growth in incomes will keep an uptick in consumer demand in check, and it says the need remains high for businesses …

Chinese stocks rise 5%! Risk Assets follow! OECD forecasts faster global rowth…Gold & Silver kicking sand again! And Now… Today’s Pfennig!

Good day… And a Tub Thumpin’ Thursday to you! Let’s hope it remains a Tub Thumpin’ Thursday later today, as I head downtown to watch my beloved Cardinals play a day game! For those of you who are baseball fans, you know what I mean when I carry on about how baseball should only be played during the day!

OK… Before I get to the currencies, economies and the dolts in the world, I wanted to briefly talk

...

U.S. banks are going bad as quickly as a bunch of over-ripe peaches in the summer heat. On the heels of the Colonial Bank failure comes another sizable bank failure.

Guaranty Bank in Texas became the 81st U.S. bank to fail this year. It was the 11th largest bank failure in U.S. history. This kind of thing is becoming so regular it is hardly news when it happens.

But what’s interesting to point out about this one is that the FDIC sold Guaranty to Banco Bilbao Vizcaya Argentaria of Spain. This is the first time regulators have sold a failed bank to a foreign lender. Such a turn of events would have been unthinkable only a decade ago.

So the world turns. When it comes to the question of who has the money, it’s often a non-U.S. buyer these days.

Speaking of foreign buyers, there is probably no group of buyers more watched and

...