Mint.com Overview

• Founded: 2005
• Total Members: 4 million
• Security: Uses 128-bit SSL encryption
• Cost: It is completely free!
• On the Go: Offers free mobile apps to track your money

What is Mint.com?

For the individual who is looking to keep their finances in order and even find effective ways to pay off debt; Mint.com has one of the most amazing money management software that has ever been created.

This powerful tool is not only available on your computer or laptop, but is also available in a cellphone application so that you can check your finances, add expenses and even pay bills through an easy and effective application on the go or at home.

Click Here to Join Mint.com Now

How Does Mint.com Work?

One of the best things about Mint.com is that it’s free for all to use! It gives you power over your finances in a way that no other program has ever done before.

Your checking account, credit card spending, loans, investments and even your personal property such as your house and cars can all be set up and put into a realistic and smart budget plan within 5-10 minutes.

Once you’ve inputted all of your information you can easily see all of your balances at once, monthly spending and savings tips are available right there on your user dashboard along with all of your financial transactions, goal setting, trends, and many more. With the easy to use iPhone or Android mobile application, you can bring it with you anywhere and have the power of your finances in the palm of your hand when you need it most.

As with any other budgeting software out there, it’s important to ask about the security of the site and how secure your personal information will be. Your finances are personal and if found in the wrong hands could be detrimental to your credit and your day-to-day spending. Mint.com uses the same security technology used by financial institutions but doesn’t give you the option to move money from different accounts. This is essential in keeping your finances safe if your password becomes available to someone other than yourself.

Alerts give you the power to know if there is any abnormal spending or if anything seems wrong with your account. Making sure you keep your password safe and that you have the proper virus protection and firewall on your computer or mobile device will help to ensure that there are no issues with security on your Mint.com account.

Most Popular Mint.com Supported Banks

Mint literally supports thousands of banks across the United States, however they publicly pubish the most popular banking institutions online. Here they are in order:

1. American Express
2. Bank of America
3. Chase Bank
4. Citibank
5. Fidelity Investments
6. Fifth Third Bank
7. ING Direct

Complaints on Mint.com

There has been word about one of Mint.com’s affiliates who are less than worthy whom made customers disappointed and uneasy about using the software. Another issue reported with the Mint program is that there are some hidden fees within that are not disclosed when signing up; this includes a “free” credit report that requires you to set up a monthly credit monitoring account.

Mint.com’s Response

Mint has responded to these complaints by stating that they link to two of the largest credit monitoring bureaus because they provide value to their customers. Linked to the Mint.com software is a person’s credit score and their credit report so that you can easily access it within your Mint software. Since they use affiliates in order to make money, they can’t always guarantee that an affiliate will be as secure and reliable as they are, this may attribute to customers who believe that Mint.com is a scam.

Forget checkbook registers, paper statements and multiple online banking and loan accounts. You have the control to access all the information you need right there on the Mint.com software. Adding your financial institutions is easy; and once added you can view them all in an overview by company name, category and the amount of the transaction.

Awesome Features

One fun feature is that you can view the US spending average compared to your own spending so you know where you stand among the millions of other consumers in the US. Categorizing your transactions is as simple as a click and can help you to organize by a specific holiday, type of item (household, food, etc); this is all possible with Mint.com and you can even make up your own categories along with using the pre-set ones as well.

Create a Budget Quickly and Easily

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The Mint.com software will help you set up an automatic budget and also allows you to create your own as well. This can be separated by category, monthly and yearly as well as the option to roll over money that was saved in the previous month. An easy to read and follow graph gives you the power to view your expenses all at once so you know just where you stand on all of your finances.

The ability to include things into your budget once, weekly, monthly or annually makes budgeting simple and more user friendly that any other budgeting software out there today.

Track Important Trends and Save More Money

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This feature from Mint.com allows you to view your finances in a number of different graphs. Whichever type of graph is easier for you to follow is available through this amazing software. Compare your own finances monthly or even compare to the US average. Anything you need to analyze your finances is right there and simple to use.

Track Your Investments All in One Place

Mint gives you the power to track your investments all in one place. You can view the performance, value, compare and the allocation of your investments; along with the ability to get recommendations on your investments as well. This makes saving for retirement much more possible since you can do it all in one easy to use program. Giving you options for saving on a broker and other ways to save with your investments makes Mint.com truly sensational.

Receive Timely Alerts to Avoid Costly Financial Mistakes

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So you don’t have to keep checking your Mint.com software after every transaction, and so that you can know when you’re getting close to running out of money, alerts are available through the Mint software. With low balance alerts, bill reminders, unordinary spending alerts and even when you have reached a goal, Mint.com helps you stay up-to-date with your finances without spending hours analyzing budgets and adding things up yourself.

Mint Mobile Apps for Blackberry, Android and iPhone

You can track your Mint account via any supported smartphone quickly and easily. The app works the same way as the website does. For some in-depth mobile app reviews, check out the Mint.com iphone app review below:

and the Mint.com android app review:

Mint.com Security: Is Your Money Safe?

One of the most common questions is website security. In order to prevent serious threats, security breaches, Mint adheres to the following security protocols:

• Protect Your Assets with Bank-Level Security -- Mint uses the same 128-bit encryption and physical security that banks use. Their practices are monitored and verified by TRUSTe, VeriSign and Hackersafe, and supported by RSA Security.
• Only Receive Read Only Access -- Mint is a “read-only” service. You can organize and analyze your finances, but you can’t move funds between–or out of–any account using Mint. And neither can anyone else.
• Guard Your Money 25/7/365 -- Mint increases your financial security through  email and text alerts that notify you about any large purchases or unusual changes in your  accounts and more.

For a more in-depth look on Mint’s security, online security expert Jason Owens asks the same question: Is Mint.com Safe?

Ready to Sign Up?

Signing up for Mint.com is very simple. All you need to create a new account is:

Your email address
Country
Zip code
Passord

Once you’re in you have the power to start wherever you want. Adding your financial institutions, creating your budget, setting up alerts and linking to a credit monitoring company are all within your discretion.

The easy to use and simple to understand instructions make budgeting fun, with their colorful graphs, categories and many other features give you the power to follow your budget in a customized way that fits you best.

Setting goals and reaching them will give you a sense of pride and accomplishment and really allow you to actually “see” where all your money goes rather than simply notice your money is all gone.

Mint.com Pros and Cons

As with any other company or online software out there, there are always good and bad views on the overall product or service. With Mint.com, the good definitely outweighs the bad, but here you’ll find a great list to help you along with your decision.

Pros:

• Easy to sign up
• Simple to use for both iPhone and Android
• Mobile ability
• Alerting capabilities help keep you in charge
• Savings tips
• Trending
• Free

Cons:

• Inability to plan ahead (but will most likely be available in the future)
• Auto-assigning of transactions can sometimes be incorrect
• Some affiliates might not be trustworthy
• “Free” credit report isn’t really free

Final Recommendations

Overall, this powerful tool is great for just about anyone. Giving you the ability to see all of your finances in one, easy to follow and user friendly application at home or on the go on your iPhone or Android mobile device puts you in control of your expenses. Goal setting and budgeting make it easy to plan for your future rather than living paycheck to paycheck. Save for your retirement or your children’s college funds, and get great savings on some of Mint.com’s affiliates who offer savings exclusive to Mint.com users.

These affiliates are how Mint makes it’s money which is why they can offer you this powerful tool for free. Taking advantage of their programs allows them to stay free and gives you options on saving money, planning for your future and the ability to combine all your information in the same place rather than memorizing a million passwords for your different financial companies.

With online bill pay, they make it easy to get all your bills done in one place at home or on the go. Forget about paper billing, check registers and other online software that doesn’t offer even half the features that Mint.com offers and start seeing your finances all together, categorized and in a way that you’ve never seen before.

Mint.com is the future of financial well-being and can help you to get out of debt and stay that way for good!

Click Here to Join Mint.com Now

World leaders routinely bog themselves down in the legislative mundane, promoting small social programs or new economic incentives for minute “Us vs. Them” political gains. However, neither Dilma Rousseff nor Alexandre Tombini are interested in petty politics, and as their terms begin, they’re ready to get things done.v

Banco Central do Brasil's new President Alexandre Tombini: out for blood?

Rousseff’s Fast Start

BRIC relations, as we have seen, are generally relatively cozy. Each country knows their role in the new economic powerhouse, and each are usually “polite” enough to keep the serious public discussion to a minimum. However, this is not the case for the newly elected president Rousseff. No, Rousseff wants a serious talk about China’s currency advantage.

Rousseff believes, as do many, that an artificially low Renminbi is hurting Brazil’s exports to China. Such artificially low currency values mean an unbalanced trade benefit, one that has propelled China’s foreign currency reserves to become the fastest growing stockpile in the world.

However, she’s not stopping at China, either. Her new proposals call for a cut in spending and a cut to inflation, two actions which are generally considered to be recession creating. Rousseff, however, sees opportunity in shrinking government and controlling monetary policy, allowing for Chinese-Brazil discussions to make waves in the currency markets. A new budget and central bank president will cool otherwise crippling inflation.

Alexandre Tombini’s Mission Impossible

Alexandre Tombini is the new president of Banco Central do Brasil, otherwise the Bank of Brazil, or more commonly, Brazil’s central bank. Early indicators suggest Tombini is out for blood, hoping new central bank goals will help reduce internal inflation and keep Brazil on a path for growth.

The first goal is to aim lower, one that should be easily achieved. While annualized inflation of 4.5% is the bull’s eye for the government, Tombini wants to go lower, shooting for a target of roughly 2% plus or minus 2% fluctuations. Such low inflation isn’t commonly seen in the emerging markets, but in contrast to the current inflation rate of nearly 6% annually, 2% doesn’t seem so bad after all.

The “Selic” interest rate, the Brazilian benchmark, is expected to take a hike on January 18th and 19th. The rate currently rests at 10.25%

Emerging Market Austerity?

The new presidential duo looks more like developed world dignitaries than the leaders of the Latin American emerging market. However, now may be the time to prepare Brazil for a future of world leadership.

The country maintains a healthy trade surplus that will allow it to exhaust some of its pricey government debts that currently amount to roughly 40% of annual GDP. A policy implemented years earlier exchanged foreign debt obligations for currency-linked debt products, a move that saved the country billions of dollars and averted a growing trade imbalance. Later investments in infrastructure meant oil independence and made Brazil one of the greatest uses of hydroelectric power.

Wall Street would be wise to watch this new duo. Their plans, should they come to fruition, will set Brazil up for an internalized national debt, reasonable inflation rate, and real, positive economic growth while continuing the upside in the Brazilian Real. This is a pro-growth administration in an economy that, even without government intervention, was already set for explosion.

Canada maintains no reserve ratio for banks;China requires a whopping 18.5%.

Wen Jiabao, the Chinese Premier, may have the economic quote of the year. After China’s central bank declared that it would raise the benchmark overnight interest rate by a quarter point, he commented, that “inflation expectations are more dire than inflation itself,” noting that while inflation is a concern, so too are investor expectations.

Thus far, in the non-emerging markets, it has been the fear of inflation – and not inflation itself – that is sending prices higher. In the emerging markets, at least in China, higher benchmark rates are intended to be a solution to ever rising prices in Chinese real estate. Some contend that this real estate market is indicative of a bubble, and that just like the United States, higher real estate will eventually lead to a pop.

Why the Chinese Market Won’t Pop?

To showcase this point, one country often forgotten in the world of investment will have to make a guest appearance. Canada, which may as well be an extension of the United States, neither suffered a massive real estate bubble, nor did it see any real decline in prices, even as its largest trading partner, the United States, crippled to a bursting bubble.

So what do the 2000 Canadian rise in home prices have to do with a 2010 rise in Chinese real estate prices? Not that much, but they do share a number of similarities.

Learning from Canada vs. the United States

At the height of the US real estate market, one out of four new loans was made to sub-prime borrowers. In Canada, that number hovered around 5 percent. In China, loans for property are difficult to obtain, even by the most creditworthy, and the closest China ever came to “sub-prime crisis” may have been US Treasury default fears following the Fannie and Freddie bailouts with unlimited lines of credit.

At the height of the US real estate bubble, the United States was shedding capital at roughly $50 billion per month in a growing trade deficit, while Canada enjoyed a positive trade balance all the way up to 2008. China has trade surpluses of roughly $200 billion per year, every year.

Canada maintains no reserve ratio for banks, while the US required 10% and China requires a whopping 18.5%, all the while hot money knows no difference between either China nor Canada. Both countries saw massive new foreign investment (Canada’s oil trusts and China’s consumer sector), and each country throughout its bubble had a zero or negative real interest rate policy. As for deleveraging, Chinese speculation is almost entirely in cash, where the United States, and even Canada, had at least some of their real estate runs due mostly to lending growth.

The Long Run

Is real estate a strong, pro-growth investment? No. Real estate is a boring, slowly rewarding, investment that is usually found in consumption, rather than production economies. However, with rates as low as they are, and inflation pushing higher, real estate is an attractive investment.

On the other hand, higher rates means borrowed money will have to find somewhere else to go. If this money finds itself in the stock markets, watch out. There isn’t a ceiling high enough to hold that explosion.

The fixed income financial markets have been as exciting as ever. Central bank action is leaving the profits thin, but traders who hold pre-financial crisis fixed income investments, especially in long bonds, are doing better than ever. Lower yields on bonds, due to their inverse properties, mean higher prices.

Part of the problem is the comparative advantage of emerging market investments. For one, interest rates are significantly higher than in the developed world, and the credit rating of many corporations and emerging market governments has improved with time.

In addition, just as a stock might rise in value as it is added to the S&P500, for example, fixed income often rises in value as it reaches a new rating level. This effect is more noticeable with available risk capital at its lowest levels, as investors push cash into the safest asset classes. With each step up the inverse risk pyramid is even more cash waiting for performing debt obligations, along with lower expectations for yields, and thus, higher bond prices.

A Systemic Situation

The bond bubble is not a wholly emerging market event, but the emerging markets are where it is most obvious. Falling currency values in the developed world, combined with exceptionally low interest rates, bring an excellent carry trade opportunity for the developed markets at the expense of inflation in the emerging markets. To solve this issue, central banks will have to cut down bond investors from within their own borders, pushing up rates and driving down bond values.

Higher rates mean lower bond prices, paper losses, and very little exit strategy. However, worst of all, investors buying long bonds aren’t seeing the rewards of what they’re financing. 

Brazil is using excess cash for investment in state-run companies, Russia plans to invest in new roads and infrastructure, and India is preparing for a historic expansion of public infrastructure, including roads, telecommunications development and utility spending. For the most part, Chinese government spending is to remain flat.

Therefore, if investors are to dedicate their cash to these popular BRIC countries, they would be largely financing public-sector investment for private sector growth. In return, emerging market investors get some downside protection, reasonable yields, and dollar diversification. However, the upside is largely limited to changes in monetary policy, not economic growth.

The safer, and perhaps more rewarding, fixed income investment is located right in the middle of the developed world in solid, blue chip dividend stocks. An uptick in growth means better growth, as well as an expansion in earnings multiples and a drop in dividend yields for short term profits. Growth in the emerging markets, however, means falling bond prices, rising yields, and a locked-in trade.

One of the most important elements to international investment strategy is keeping enough powder dry for new opportunities. Not only do developed dividend payers offer yields, but they offer some downside protection, and most importantly, protection from rising central bank activity in the emerging markets. Plus, with most investors already holding at least some developed world assets, such a portfolio rebalance can be done without changing net investment in each geographical area.

For most people on the outside, India has become the end destination for their telephone calls. However, inside the borders of this Asian country is a near 180 degree change in culture, wealth and growth. As more and more companies find Indian outsourcing to be an excellent opportunity for bottom line cost cutting, Indian families are seeing top line income growth.

Rising inflation statistics merely helps new investments come into realization.

All this income is finding the wallets of people who are eager to spend it on themselves and others – and on the things most in the developed world find to be near necessities. The cell phone, computer, and personal transportation are a staple to the average person in North America, but have only recently come into reach for the growing Indian middle class.

Those three products, however, require other items. A cell phone doesn’t work without cell towers, computers and electronics require electricity and fiber optic lines, and the car requires roads suitable for easy traveling. Unfortunately, in most of India, this necessary infrastructure isn’t in place, and where it is in place, it’s quickly wearing out.

The massive underinvestment in infrastructure is best demonstrated by its power grid. While cell phones and computers are a recently development, electricity is a product of the nineteenth century. Today, peak demand for electricity is an eighth higher than capacity.

Moderate Inflation Helps

Improving inflation statistics only help to make these new investments possible. November’s year over year inflation reading at roughly 7.5% is moderate, if not low, for India. Inflation was the worst at the start of the year, with inflation nearly two times higher in February than in November.

The falling inflation rate allows for flexibility in public investment. The government has planned to spend as much as $500 billion through 2011 in improving its infrastructure and making the travel of people, products, and information more reliable and efficient. The boon, of course, is that more efficient transport of those three elements means only a more globally competitive Indian economy.

Playing on the Internal Factors

The simplest play is perhaps the most obvious. The EGShares India Infrastructure fund, though thinly traded, is to Indian infrastructure what the Dow Jones Industrial Average is to American brands. The index tracks 30 different large cap companies (those most capable of handling public contracts) involved directly in construction, electricity, telecommunications and transportation.

As an aside, its biggest investment is in Tata Motors, a company known for its roots in Indian transport vehicles for public and private use. A full 12% of the fund is shaped around direct plays on Indian cellular phone companies.

Both the government of India and its people know that an investment in infrastructure is the only way this massive country can be competitive in the international markets. While China’s infrastructure boom may be cooling post-2009 stimulus, India’s boom is just getting started.

If investors accept compound interest to be the eighth wonder of world, then it has to be globalization that is the ninth. With each passing day, conglomerates move products from destination to destination, from the designer to the manufacturer and then to the shipper before it finally reaches the vender. Even services, mostly financial related, are exported and imported before they reach their final destination.

American firms find it difficult to access foreign markets.

American firms find it difficult to access foreign markets. However, while the tangible and intangible may see several borders, the products themselves usually reach one type of end user, often in only one place. Companies that have nearly perfect business operations in the developed world are finding the emerging markets an incredibly tough sell.

Emerging markets haven’t been a problem for local companies, which leaves many to believe that doing business in the emerging markets is made almost impossible by government, not by the consumers themselves. Just last week, Walmart announced that it would shut down its Moscow office and leave Russia, finding the climate too difficult and uninviting for future acquisitions.

Other retailers have left Russia. Carrefour SA, a French retailer, left in 2009. The German Metro Group and very famously, IKEA, left the country as well. It was only recently discovered that two IKEA executives, despite their short stay in Russia, had made bribes for access to public utilities in
Russia.

Completely Different Markets

There exists a great divide between the emerging markets and the domestic markets, particularly when it comes to the culture of both the people and government. Today’s emerging markets are perhaps as protectionist as ever, sealing off entry to their local capital markets while promoting takeover of assets in other countries.

Anti-trust laws in China have been used routinely to block or slow foreign purchases of local companies, but are rarely involved in structuring that leads to massive, domestic monopolies. Russian courts and legal system have shifted ownership rights overnight, and as evidenced by the growing disparity between multiples in BRIC firms, worries persist about Russian government involvement.

American firms are finding it incrementally difficult to access foreign markets. Walmart, a company that is perhaps as American as apple pie, is finding that the locals don’t like its brands. In fact, its acquisitions are keeping their own names after Walmart famously fell to the German Aldi in its home market some years ago.

What Investors Can Do

Investors have to go to the source with emerging markets to get the best bang for their buck. With the exception of Philip Morris and a handful of others, American firms aren’t getting into foreign markets, nor are they doing so cheaply. Most have concluded that the acquisition is better than the merger, and almost always better than expanding a brand naturally. However, while corporate giants may justify paying acquisition rates for major brands, individuals see better performance in going directly to the source.

The benefits are twofold: the brand may be acquired by foreign companies, or that the political favors may keep local companies in business. International investors are no longer justified in owning domestic brands as access to emerging markets.

Truthfully, there is no set in stone BRIC. The term, coined first by Jim O’Neill, has kept true to its acronym. Reference BRIC nations today, and most conclude you mean Brazil, Russia, India and China. However, since the acronym was coined in 2001, additions like South Korea (BRICK) have led to new, interesting combinations.

Like the population bend in India, demographics play a key role in Turkish growth.

Now, nearly ten years after the term was first used, there exists and on-going debate about the future of the acronym and which countries could and should be added, as well as which should be dropped. While “BRIC” may have been used by one Goldman economist, fund companies nearly own dominion to use of the name, and new discussion has emerged about the future of the big four growth economies.

Replacing Russia

The first, and most common, call from investors is that Russia should be replaced among the group. Russia boasts per capita GDP nearly three times higher than China, just over nine times greater than India, and 50% greater than Brazil. Plus, with its growing reliance on commodity exports — of mostly oil to China’s growing manufacturing and transportation powerhouse — a play on Russia has become, for most, a play on commodities.

Possible replacements are abundant. One common call for replacement is Indonesia, which is quickly coming to as a strong emerging market and a country filled with economic growth. However, still a concern is the role of government in its economy. The government took control of more than 160 different institutions and businesses following the Asian financial crisis, though most now contend the government could take a step back and allow its market economy to prosper.

As is commonly seen in emerging countries, Indonesia remains mostly an agriculture economy with a growing capital base and consumer class. When growth comes full circle, economists believe fewer will work in farms and instead move to more productive jobs in the manufacture of goods, including textiles and clothing, electronics, and furniture. Indonesia is slated to grow more than 6% per year with a far more reliable projection than volatile Russia.

Considering Turkey

Turkey has yet to become a big destination for foreign investment, but with improvements in government, a reduction in its deficit and an improving credit quality, those following Turkey see opportunity knocking.

Turkey earns a rating just one step under investment-grade from both Fitch and Standard and Poor’s, but the CDS markets say differently. Credit default swaps for Turkish debt sell for prices lower than both Chinese and Russian insurance, a mark of the country’s credit quality. By 2012, Turkey is aiming to cut its debt-to-GDP ratio by 10% while reducing its current deficit by 30%, from 4% of GDP to 2.8%. In that time, projections suggest Turkey will manage 6% annual growth, making it the king of financial austerity — should projections turn into reality.

Much like the population bend in India, demographics play a key role in Turkish growth. An explosion in population growth since 1980 leaves the current median age at 28 years old, meaning there are still many years of productivity until the latest baby boom turns into a baby burden. The next big play in BRIC may not be in BRIC at all, but in front-running the new emerging market formation. In 2010 alone, investors socked more than $100 billion in emerging markets, of which $60 billion found the stock markets and $40 billion found fixed income. While that amount may not fill one month of the US budget deficit, it’s enough to provide for a wild ride in the emerging markets.

Inflation concerns are brewing all around the world. Leaders of the developed world push their central banks to inflate, whole governments enact fiscal stimulus and bailouts, and commodities soar as the effects of negative real interest rates permeate through the world economy.

Cooling Bubbles in China

In China, there is a much larger concern. Inflation first found itself present in the real estate markets, and subsequently, the government nearly shut off speculative investment with a requirement for as much as 50% down on the purchase price. That bubble was thwarted.

Next, cash flew into gold and silver at the bequest of government, but that has yet to become a problem, since it is a world market. However, as time goes on, base metals and other structurally significant commodities are rising in price as wages stagnate and foreign investment flocks into China. To cool off the boom, the central bank has fought with its reserve ratios, rather than its target rate.

Since 2002, the reserve ratio has risen from 6% to a peak of just under 18% in 2008 before falling to below 16% and quickly rising to 18.5%, their highest ever. The most recent increase was the third such increase in less than one month. So far, efforts to curb the growth have done nothing with M2 money supply growing 19% in just one year.

Interest Rate Action

At some point, investors are going to demand interest rate action at the Chinese central bank, either by their voice or with their dollars. Chinese credit default swaps recently ran as high as 71.5 basis points, or .715% of the price of the bond. Investors worry that should China contract too quickly, the risk of default runs high, and through the markets, they’re showing their cards as to how they believe the Chinese central bank should act.

Central bank action in China is very much different than you might find elsewhere around the world. While Keynesian economists globally tend to focus on the balance of payments, the Chinese are concerned with ownership and investment. Currently, one year deposits pay just 2.6% in light of 5.1% annual inflation, meaning the cost to borrow internally is effectively a negative 2.5%. That has allowed many within China to borrow, invest, and reap the proceeds of the current boom.

Investors are going to demand interest rate action at the Chinese central bank. To raise rates would essentially cut off domestic ownership of the economy, with foreigners still able to access developed world money for mere pennies on the dollar and bring it to China, stocking their cash in a currency that is not only inflating (allowing for real growth in equities), but also protecting against their own central bank action.

Investors are going to demand interest rate action at the Chinese central bank.

While there negative real rate opportunities in the developed world, there are few opportunities as beautiful as a near zero cost to borrow in a falling currency for investment in a growing economy with a rising currency.

China must soon act with interest rates which may bring about a temporary cooling. Expect, however, for foreign investment interest to front run any action by the Chinese central bank, since higher target rate means the Renminbi will only further gain against the currencies of the developed world.

As the developed world countries struggle to enact austerity measures centered around entitlements offered to the aging group of people born during the global post-WWII boom, one BRIC country is moving on from its own demographics unevenness.

While we think of India as a populated powerhouse, one that will eventually house more citizens than mainland China, it is not the amount of people that matter, but rather the productivity an economy can derive from its population. As it stands, India and China have a very valuable natural resource: excessive amounts of usable labor, growing industrial bases, and incredible growth in productivity.

From Sustenance to Savings

The whole of India once suffered from the mark of poverty: sustenance farming. Where others go to work, produce more than they consume, and have savings to invest or enjoy, sustenance farmers produce only enough to survive, never accumulating investment capital. Of course, with only a modest amount of capital, say, a plow, sustenance farmers would likely have the opportunity to spend less time in the fields and more time on more productive pursuits. Such savings, however, were largely impossible to achieve due mostly to an explosion in dependency.

Up until the early 2000s, India’s aging population was exceedingly dependent on the younger working generations. The ratio between those dependent on others and those still working stood at nearly 70%, with seven people in “retirement” or too young to work for every ten in the workforce. Even without a “social safety net” as strong as ones found in the developed world, the strain is still felt across the board, particularly among families.

To best understand the problem is to compare it to the United States, where social security and entitlement concerns have exploded, even with a dependency ratio lower than India. In the United States, five people are dependent for every ten in the workforce. This important indicator will eventually bottom in India at a rate far lower than each of the BRIC countries, including Brazil, Russia, and China. In the next twenty years, India’s ratio will even plummet below 2010 readings for Vietnam, a country often touted as a place to invest due to its youngand hardworking society.

Accruing Capital

While the age of the population is often considered most important for government revenues and political stability, particularly in this age of austerity after decades of entitlement, India is a special case., and it now has a near army of web developers and programmers.

As India’s young age and the current elders pass on, India has the opportunity to truly save all that it has been producing for so long. In doing so, those who move their investment capital to India are sure to benefit, as infrastructure and modernization investments lend way for even greater increases in productivity.

Those who pay attention to history should remember what happened in England and the United States when they first industrialized. Their economies exploded, the movement was deemed a “revolution,” and in the years that followed, one maintained its superpower status (England) and another superpower emerged (the United States). Whether Indian stocks are bubbling or the growth models are unrealistic in the short term is largely irrelevant; the trend is in favor of a new economic superpower.

Investors like emerging markets because they offer easy GARP, growth at a reasonable price. Often, as in the case of Russia, political uncertainty provides for low earnings multiples, but positive macroeconomic trends allow for better than average growth.

Emerging markets offer growth at a reasonable price. No doubt, it easily wows investors.

Obtaining GARP, then, should be an easy process. Find the right area, drop your cash, and sit and wait. That kind of strategy has become more popular in the past decade, with emerging market funds and exchange-traded funds offering a one stop shop for exposure to the emerging markets. However, to afford this convenience, investors are giving up realistic exposure.

Investors pile into these funds thinking the fund is representative of the whole emerging nation, when it is, in fact, a play only on a few poorly weighted securities. These poorly weighted securities may not offer any real benefit in exposure to macroeconomic trends and emerging world success, but instead to industries and opportunities found (less expensively) in the developed world.

Brazil Has GARP

Brazil has been the definition of growth at a reasonable price. Its inflation is reasonable for an emerging market, growth coming out of the worst financial crisis in recent memory is reaching for 7% annually, and the government coffers are strong, as its taxes are the highest of the emerging markets. (High tax rates are a Keynesian tool for price stability and aid in soaking up hot investment money.)

With those fundamentals in play, Brazil ETFs and funds should be an excellent opportunity for foreign investment, right? Wrong! The most popular Brazil ETF and one of the largest ETFs on the market, the iShares Brazil ETF(EWZ), is perhaps the worst way to attack Brazilian growth. Nearly 75% (74.86%) of all the cash invested in EWZ is divided equally among three sectors: Industrial Materials, Financial Services, and Energy at 26.28, 24.70, and 23.78 percent respectively.

It doesn’t take much thought to realize the problem: all of the top holdings have exposure to markets that can be found in the developed world. Metal and energy prices are set worldwide on the New York, Tokyo, and London Exchanges, and financial services are dependent mostly on international growth. You could make the case that financials are directly connected to local markets, and they are, but banking profits in Brazil are (in normal market conditions) not much different than any other location.

Get Targeted

If you absolutely have to use an exchange-traded fund to access foreign markets, seek better targeting with an exchange-traded fund that picks the best part of each market. Emerging markets aren’t exciting because they have the same old economic fundamentals or industries as other countries; they’re exciting because the consumer class is developing.

A newly formed exchange-traded fund, the Brazilian Consumer ETF (BRAQ), offers much better exposure to the growth opportunity in Brazil. First and foremost, it weights consumer goods and services at 51% of the total fund, and it maintains less than 10% exposure to metals. Also improved are the exposure levels to media and healthcare services.

Finally, BRAQ takes the cake for being balanced in asset class with 31% large caps, 41% medium sized companies, and nearly 16% in small and micro cap stocks. With sector and geographic investing exploding, investors have fallen into the trap of buying a name, not an investment. Going forward, seek first the weighting, then the fund. Unfortunately, as in the case of EWZ, investors are buying expensive exposure to metals, energy, and financials that is hardly representative of the underlying Brazilian economy. Such investments are destined to under-perform when the true emerging market, the consumer market, finally shows its strength.

Of all the countries making up the BRIC powerhouse, Russia is undoubtedly the most bi-polar. Very much like a bad relationship with a significant other, Russia is there for investors in the good times, but falls horribly off the radar in the bad times. During this decline and global recession, Russia has been nowhere to be seen.

When circumstances are pleasant or profitable, Russia's presence is felt. But was nowhere to be seen, during this decline and global recession.

The Confidence Discount

Russia has been, for a long time, a bit of a sore spot among the emerging markets. The country’s reliance on commodities has been hot and cold based on moving economic trends, and many investors still worry that political disruption or involvement in business may negatively affect their holdings. Even to this day, Russia remains one of the biggest investors in itself, with the government holding substantial stakes in oil and gas producers, as well as various other behemoths that dominate the Russian commodity trade.

To many, the Russian discount is not immediately visible. Russian stocks have advanced in 2010 on improving commodity prices and a minute rebound in demand from the developed world, but the best indication that investors are discounting Russian stocks comes from the limited upside in price to earnings multiples. Ratios have plummeted this year as earnings increase at nearly three times the pace of the price to earnings multiple, and Russia remains the least expensive of all BRIC nations.

It isn’t as if Russian stocks are upping their dividends. They aren’t, and the yields in much more stable commodity-based economies, including Canada, are far more appealing to investors still stiff with their investment dollars.

BRIC’s Black Sheep

Unlike Brazil, India and China, Russia lacks a very important piece of the economic puzzle: a strong internal demand for consumption products. In the latest fiscal year, oil and gas exports helped boost GDP by as many as four points over last year, but both investment and consumption stagnated.

With four percent year over year growth forecast for as far as the eye can see, Russian companies simply don’t have the appeal of Brazil, India or China. Plus, as each of the three other nations become more economically free, the Russian government merely toys with the thought, offering up only small sales of government owned companies to shore up a current budget deficit. Compared to a near 180 shift in Chinese policy within the last two decades, Russia’s move to economic freedom is hardly a blip on the radar.

In fact, as the government sector as a percentage of GDP declines in both India and China, and stabilizes in Brazil, government continues to grow in Russia. This growth of government, however, is not a matter of stimulus as it was in India and China in 2009, but instead due to the shrinking size of the private economy.

Prominent investors have declared Russia a long-term value play with forward price to earnings ratios leveling off at a reading of seven. However, without large institutional changes regarding the role of the government in the marketplace, or increases in dividend yields, investors are far more likely to head to Brazil, India or China, slapping a ceiling on any future multiple expansion and share price gains in Russia.

Through the real estate bubble in the United States, as well as the resulting global financial crisis, China remains the go-to country for a perfect carry trade.  While the carry trade is traditionally an operation of the foreign exchange market, China’s economic fundamentals, coupled with central bank activity, make it a prime investment for investors living in developed economies.

As to why China is so attractive to foreign investment, no one should question that.

Battling Bankers

Currency manipulation is a word perhaps now better attached to Ben Bernanke than it is the People’s Bank of China.  Since John Snow, Treasury Secretary under George W. Bush, first charged the Chinese as being currency manipulators, the People’s Bank of China has fought long and hard to allow their currency, the Renminbi, to appreciate.

China is now working to strengthen the value of the Renminbi by tightening monetary policy through the People’s Bank, while Bernanke, intent on lowering the value of the US Dollar against emerging nations, is injecting fresh cash directly into the reserve level at the banking system.

More simply, reserves in China are increasing as cash is sucked out of the economy, while reserves in the United States are rising as a result of direct cash infusions into the economy.  China has routinely made the charge that “hot money” borrowed in the United States is pouring into local markets and investments, and frankly, there is little doubt they are correct.

The Trade of A Lifetime

There should be no question as to why China is so attractive to foreign investment.  Consider first that the United States’ monetary policy is currently providing for negative real interest rates, where the rate of inflation is greater than the cost to borrow.  This is the reason why commodities are on a tear; simply storing borrowed cash in a safe place provides a very consistent increase in real purchasing power.

While a play on the Renminbi isn’t as attractive as it once was (the Renminbi now trades 6.75 to the dollar from 8.25 to the dollar), it is absolutely more attractive than commodities, especially when investors glance into the final element of Chinese investment dominance: its unparalleled growth.

Going into the end of 2010, China is expected to grow some 8.5% next year, while inflation at the production level (the prices that most affect local consumers) grows by only 3.5%.  Those numbers set the stage for a nation that will soon become one of the largest consumer markets in the world, rivaling the European Union and the United States.

Emerging market investors with current open positions in China have seen impressive gains from export-driven growth, but no one has yet to see the power of an internal consumption machine. Estimates suggest that in the coming years, the Chinese savings rate will drop as social security payments increase, and the population ages and eases into retirement. However, for China, that isn’t a problem.  Its status as one of the leading exporters suggests that it has not only a comparative advantage in production, but that it maintains a comparative advantage, even with the ever increasing costs of international transport.

When all these years of savings are spent, mostly internally, foreign investors should be there to pick up the profits.  It won’t be much longer until China capitalizes on years of hard work, savings, and a move to pure, raw capitalism.  Those who embrace capitalism in the Chinese financial markets will reap the rewards of earnings growth, multiple expansion, and general capital appreciation against the miniscule opportunity costs of cheap credit borrowed and slow growth in the developed world.

Lenovo’s recent surge into profitability after the financial crisis and global recession demonstrates that Chinese brands have more than just price appeal.  In what would seem to be a radical move in other parts of the world, Lenovo, the largest manufacturer of PCs in China, is taking on Apple in a war over the smartphone market.  The LePhone, launched by Lenovo, is competing directly with Apple’s iPhone and is on track to beat Apple’s iPhone that dominates virtually every other market in the world.

Growing Domestically

Lenovo may suffer a drop in its profit margins as consumers push toward low-end netbooks and other products, which offer substantially lower room for profit.  The devices, made popular due to their lightweight, long battery life, and relatively low costs, are a main driver of growth for the company, but force the computer maker to drop prices on other bigger laptops.

Lenovo will also launch a new tablet PC perhaps as a way to combat Apple’s newest tablet, the iPad device.  The new PC was debuted earlier this year and looks to be a strong competitor in China’s domestic electronics market.  The iPad has yet to make its way to China due to shortages in other parts of the world.  This gives Lenovo just another competitive edge in racing to establish a foothold in another fast growing market segment.

China and Tech

Despite conquering the rest of the world’s smartphone market, Apple has experienced a tough time penetrating China’s electronic marketplace.  The company, which had a running start to build up a following in China, is now selling fewer units of the iPhone than Lenovo is selling of the LePhone.  This goes to show that even Apple, now the second largest electronics maker in the world, simply doesn’t understand the unique brand appeal it takes to enter into the Chinese market.

Investors can expect a bloody marketing war in which the firms battle it out for a cell phone market that is growing faster than any other in the world.  And with more than 1 billion citizens, you can be sure the end winner will have no problems counting all the money it has made.

Photo Credit: Xin Hua

The stock markets rallied as China agreed that it would not pull several hundred billion dollars in investments from Europe.  This marks the first time that Chinese economic superiority has been so publicly confirmed, with markets rallying on the news that China was in for the long haul.

China’s European Influence

The news broke early on US shores that the massive $300 billion sovereign wealth fund owned by the government of China would not withdraw its investments in Europe and instead wait out the financial downturn.  The decision was important in part due to the fact that China’s European investments could drain European debt and credit markets should they be sold to outside investors.  Though the investment dollars would not come directly from Europe, it would displace other investment dollars that are helping to stem the massive budget shortfalls in Greece, Spain and Portugal.

China Holds the Cards

With more than $2 trillion in foreign reserves, it is now clear that China has a powerful hand over almost every economy in the world.  It holds corporate debt, stocks, bonds, and treasuries from every country.

Should China exit any area, it can leave a massive void to be filled by other investors; however, there are few investors, whether governments or central banks, that could even afford to make the massive investments China holds today.  China holds all the cards in the game of worldwide trade, sucking interest payments out of foreign debtors and keeping every country on its toes.

The New Economic Superpower

The difference between China and all other economic superpowers of the past is that all of the Chinese wealth is held by one entity, the government.  With so much power in so little hands, China can twist and turn any economy into submission.  Even the United States, in which China is said to hold as much as $1 trillion in federal debt, could easily be broken should China choose to exit.

Though there was no metal, and no award, it’s painfully obvious that China is now the economic superpower to watch.  The question is whether China will use its power for good or will it find these newly found powers too strong to ever let sit idle.

The move from equities to fixed income has been described as a flight to quality.  No one wants to get stuck holding an investment that can lose value, but at what point will investors want to actually make, not protect, wealth?

US Treasuries

New cash from Wall Street is heading to US Treasury bonds.  At present, the 10-year Treasury bond has surged in value, moving so high that investors must now lock in their capital for ten years to make a paltry 3.2% annual return.  The message that Wall Street is sending is profound: we’re scared so much that we’re willing to accept 3.2% just to keep safe.

A Paradigm

The markets are experiencing a rare happening when rates get crushed even as more and more debt is sold each and every week.  With record federal budgets extending well into the next decade and more, investors will have to swallow auction after auction after auction.

This may be possible right now, when most are complacent and happy with 3.2% returns, but at what point will investors want more?  When will they get greedy?  When will three, four, even five percent fail to be enough? Rates should be rising, not falling.

A Flight to Quantity

The next leg of the race is invariably a flight to quantity, when investors begin to demand more from their investments.  This should happen very quickly after the Federal Reserve begins tightening its monetary policy and raising the rate at which it lends to banks and other institutions.  At that time, the Federal Reserve will have allowed all the credit into the system that it so desires, and the markets should again be able to function as markets.  If the Federal Reserve fails to raise rates, we could see higher rates in Treasuries regardless, since investors will then want protection from inflation.

Debt Will Become Too Much

Everyone knows that the debt loads in the United States are quickly becoming unsustainable, and that at some point, the US may soon face a downgrade.  Moody’s and Standard and Poor’s have both mentioned that they will cut the United States’ credit rating should its finances continue to run out of control.  With that kind of risk, and such unreasonable returns, is it any question whether you should be a part of the next flight to quantity?

Photo Credit: ChinaMining.org

China’s Anshan Iron and Steel Group, a state-owned steel producer, has doubled down with a $175 million investment into a rebar manufacturer in the United States.  The investment in rebar, rather than raw steel, indicates that China sees continuing growth in infrastructure and building development.  This view contrasts strongly to analyst viewpoints of a slowing construction industry.

What $175 Million Buys in America

The $175 million investment buys Anshan a stake in a rebar manufacturing facility still under construction by the Steel Development Company.  The new facility located in Amory, Mississippi will develop rebar to be either purchased or sold to Chinese developers.  As part of the agreement, Anshan also received technology and sales agreements, boosting the firm’s US operations and giving it an opportunity for improved foreign trade.

Expanding Its Reach

The investment marks the first time the Anshan company has invested directly in a firm operating in the United States.  Tough political tensions between the United States and China have prohibited large deals in the past.  Recently, the US government decided to label China as a currency manipulator due to the growing trade imbalance between the United States and China.  China, of course, supplies many consumer goods to the United States.

Political Work Needed

Just one month ago the United States imposed another tariff on Chinese imports.  After successfully increasing tariffs on Chinese made tires, the government then acted months later, in April, to add another tariff of 30-99% percent on imports of Chinese steel piping.  The government claims that China has been dumping steel on US soil, using the power of subsidized industry to gain a foothold in the United States.

However, this new investment in the United States could buy Anshan an entry into the US industrial metals sector.  Since the steel is to be made in the United States, albeit by a partially Chinese owned operation, the steel produced will enjoy zero taxes if sold in the United States.  In part due to financial crisis and its own demand internally, Chinese steel imports dipped 60% in 2009, but have since recovered a portion of that margin.

Photo Credit: New York Times

While the rest of the world is tuning into the incredible decline in European equities and debt, emerging markets may be the largest benefactor.  Enabled with low debt to GDP ratios, strong export economies, and nowhere to go but up, emerging markets are now relatively strong against what were once considered the unsinkable economies.

Insurance Screams Sell

The cost of insuring against default, a popular indication of what is often to come, has exploded in Europe.  The cost of insuring European government debt against a default has nearly doubled this year alone from 59 basis points to 129 after breaching a record high of 167 at the height of the panic.

For each basis point, investors must spend $1000 to insure $1 million investments against default.  Therefore, for the record, to insure $1 million of European debt, investors would have to spend $16,700 per year.  The costs practically erode any benefit of investing in European debt, and the trend implies European stocks may be even weaker than thought.

Relative Value

Relative to other parts of the world, Europe isn’t nearly the investment it is purported to be.  Nations like Greece, Portugal and Spain, all plagued with debt and financing woes, are now considered to be riskier than developing, and politically unstable, Russia, Thailand and the Philippines.  Such a huge disconnect shows that investors want nothing to do with Europe, and they are more willing to invest and insure typically unstable nations than they are developed nations with larger debt loads.

Build on BRICs

The BRIC nations, or Brazil, Russia, India and China, are quickly becoming the world’s safest investments.  The four countries, each with impressive foreign currency reserves rather than debt, are better capitalized than most developed countries, and they have the fundamentals to project that future earnings will be equally strong.

Correlation is Key

The question going forward is whether or not the emerging markets will be depressed by general discontent with the equity markets as a whole.  With global trade virtually ensuring mutually assured economic destruction should a major power succumb to debt, the question is whether the emerging markets of today can build on a strong, internal consumption economy.

Photo Credit: Current TV

Despite a slowdown affecting mostly China’s manufacturing and other value-added, energy intensive industries, China has yet to back down from oil acquisitions.  Its newest investment through its state owned investment conglomerate brought thousands of acres of oil sands under its ownership.

Partnership in Sands

The new partnership was reached as part of a deal between Penn West Energy Trust of Calgary and China’s state investment fund.  The agreement allows for the development of nearly 240,000 acres of oil sands that currently produce 2,700 daily barrels of oil.   China Investment Corp. will invest a total of $817 million to own 45% equity in the partnership, with an extra $435 million being offered for millions of shares in the firm itself.

Why Oil Sands?

Anyone following China’s investment strategy abroad has surely noticed that China appears to prefer high-cost oil operations rather than typical low-cost, high reward oil investments.  Since the oil is locked deep in the oil sands, the production cost is fairly high, meaning China only stands to benefit should oil costs keep rising.  This kind of investment is indicative of a hedging strategy against rising oil prices, as well as a strategy of locking in the future supply.  Since many oil sands are unprofitable at low oil prices, most won’t be developed until prices near their historic peaks.  Once they do, China will own much of the new, now cost effective, production methods, enabling itself to generate and refine its own energy at its own agreed upon pricing.

PetroChina is Active too

Oil superstar PetroChina, a publicly-listed firm largely owned by the Chinese government, is also incredibly active on the merger scene, particularly in oil sand development.  The firm recently reached an agreement with Syncrude to purchase 9% of the company and its oil sand assets for $4.65 billion.  PetroChina has also been a large financier for new oil sand development as opposed to purchasing existing businesses.  The company paid $1.9 billion for 60% equity in two projects planned by Athabasca Oil Sands Corp that were not yet in operation at the time, which was just one year ago.

Photo Credit: BBC

The fear of an economic recession is already priced into the Shanghai index.  After breaching a previous low to hit its lowest point in 2010, the Shanghai index shows it may be pricing in far too much fear and not enough future upside.

Fundamentals are Improving

Despite concerns over a property market that has surged 12% year over year, the main driver of Chinese growth is starting to come back.  In April, Chinese export data showed that exports are increasing at a faster than anticipated rate of 30.5%.  In addition, a new line of credit given to bankrupt nations in Europe ensures that one of its main export markets will be well capitalized enough to continue borrowing its wares.

Relative Value

The last time the Shanghai index traded to its present low was when it moved through the level in early 2007.  Of course, that was before the bubbling indices overseas started to fall and the economy slipped into economic recession.  However, with China being the most resilient to recession, falling only when the economy started taking a toll on China’s export economy, improving leading indicators in Europe and North America suggest China could rebound, albeit lagging the rest of the world since inventories are still higher than normal.

Technically, the current market levels also play a role.  The 2660 level was seen as strong support in February 2007, and the index bounced again in July 2008 before falling through a month later and bouncing back through in April 2009.  Afterwards in late August and early September, the index bounced off the level again, suggesting there are plenty of buyers at today’s price levels.

Pulling the Trigger

Investors would be well advised to continue building a position in China’s largest index, seeing plenty of opportunities for gains and limited downside.  Since China was the last to enter a recession thanks to its reliance on foreign orders, it is only natural that it will be the last to exit recession.  However, with the fundamentals now turning in favor of China’s exports, investors have an opportunity to profit heavily on deeply discounted foreign equities.

I have never witnessed  a day like today in my 20 years of actively trading the stock indices – S& P 500, Nasdaq, Russell 200 and Dow futures.  In reality, this was a “Perfect Storm.”  In the future, I think this will happen over and over as the three main reasons for May 6th volatility are boosting ï»¿momentum all the time.

First, public complacency hasn’t been this high since the summer of 2007.  Every new government program and bailout strengthens  the warm and fuzzy investor psyche that permits us to believe everything will be all right.  The Volatility index measures the price paid of protecting your stock portfolio through the purchase of put options. Put options are like buying portfolio insurance.  If you hedged your $300,000 stock portfolio it would have cost you approximately  $8,500 in put premium to protect the full amount  of that portfolio through June, from any downside vulnerability. That same insurance policy in the afternoon would have been worth $23,625.  Considering the value of your portfolio equaled the decline of the stock market, you would’ve lost 3.25% on your $300,000 or, $9,750. The difference between the $8,500 paid up front versus the current portfolio’s value of $290,250 plus the current value of the insurance policy $23,625 means that your net worth on the stock market’s biggest point loss day in history would have actually INCREASED by $5,375. The increase in the VIX is the reason for the inflated option premium and the magnitude  of the rally of the VIX bears confirmation  to the market’s general complacency.

Secondly, all of the markets are tied to each other. That’s why we are Commodity AND Derivative Advisors.  In the age of electronic trading, one issue always affects another one and that one in turn, affects another on and so on.   Every trade in an outright market like the S&P 500, Euro Currency or, Japanese Yen will have an effect on any market it is realated to.  This has, in effect, developed one giant butterfly effect. In the age of algorithmic trading, where the minutest of market inefficiencies are exploited by aggressive capital placement,  strange market moves will become self fueling. Many of these models use markers based on the model’s expectation of, “normal,” relationships to its data points. When things get pushed beyond the model’s, “normal,” expectations you have a case of, “If you liked stock ABC at $12 a share, you’re going to love it at $4 a share.” There were at least two stocks in the S&P 500 that traded to 0, today. This means they were broke, bankrupt, didn’t exist. Two Fortune 500 companies disappeared on someone’s lunch break and by the time the employee got home from work, no one knew the difference. Twenty minutes of electronic market butterfly effect.

Finally, as the market began to drop, the media was showing the Greek police force in full riot gear after passing their severe austerity vote in an attempt to acquire financing from the European Union.  Furthermore, the context of the day’s discussion among the talking head TV pundits was the doom and gloom surrounding the collapse  of the European Union, civil protest and bankruptcy in Greece with the specter of Spain’s impending default as a backdrop. Doom and Gloom sells. Traders, both institutional and retail are listening to the end of the world as we know it while watching the stock market meltdown and trading programs are ticking off one sell order after another in an attempt to be the first ones to market with their orders. The pursuit of greater bandwidth on their data feeds, faster processors in their computers and deeper levels of quantifiable algorithms put them in the lead in the race to the bottom and right back up. Welcome to the new age of 24 hour doom and gloom media coverage, total connectivity and computer programs replacing common sense trading. We specialize in common sense trading.

This methodology is published by Andy Waldock. Andy Waldock is a trader, analyst, broker and asset manager. Therefore,  Andy Waldock may have positions for himself, his family, or, his clients in any market discussed. This method is meant for educational purposes and to explain  the correlation between the commercial’s trading and its effect on creating turning points within the commodity markets. The commodity markets employ a high degree of leverage and may not be appropriate  for all investors. There is consideral risk in investing in futures. The information contained herein comes from sources believed to be trustworthy, but are not guaranteed as to accuracy or, completeness.