Jim Rogers 01 (May 08 - May 10)

[helios]

Goldman Could Trigger Market Correction: Jim Rogers

Some expert investors have described the market's reaction to the SEC's accusations against Goldman Sachs as a 'storm in a teacup.' They believe the fallout would be short-lived, and eventually present buying opportunities.

However, billionaire investor Jim Rogers, Chairman of Rogers Holdings, feels slightly differently.

"Markets are overdue for a correction," Rogers told CNBC in a telephone interview Saturday. "Any market that goes up this much, this fast, this steadily without correction - it's not normal. When that sort of things happens, the market could be setting itself up for a 15 - 20% correction."

Rogers does not think the Goldman issue itself would cause a correction - it would be more of a catalyst.

"When the markets are ready for a correction, something will come along... the straw that breaks the camel's back."

The investment guru did not seem all that surprised by the SEC's actions, noting that these kind of investigations usually take place after major financial meltdowns (like dotcom).

Borrowing a quote from Warren Buffett, Rogers said "when the tide goes out, you see who's swimming naked. I'm sure there will be many many more skeletons to come."

Thoughts of more high profile lawsuits on Wall Street and a pending market correction may send some into a panic, but Rogers said it is important to stay calm.

"What I am doing is watching. If this is going to be the beginning of a correction. we will know how the markets does next week, by Thursday, I suspect. It's not time to sell in any significant way."

Rogers also said investors should start thinking about adding shorts to their portfolio, and suggested shorting indexes. Select bank stocks are also in his sights - the legendary investor is waiting for the right time to build short positions in them.

And then, there's always gold.

If the SEC's crusade against fraud on Wall Street gathers pace, Rogers said, one should watch out for opportunities to buy into the yellow metal. "Go back to 2008, you have AIG go broke, Lehman go broke. There was a gigantic forced liquidation in commodities - not because of fundamentals, but because people were forced to sell... it would be an opportunity."

Source: CNBC.com

[kennynah]

And then, there's always gold.

If the SEC's crusade against fraud on Wall Street gathers pace, Rogers said, one should watch out for opportunities to buy into the yellow metal. "Go back to 2008, you have AIG go broke, Lehman go broke. There was a gigantic forced liquidation in commodities - not because of fundamentals, but because people were forced to sell... it would be an opportunity."

it may be surprising...but i agree on this above...

and especially when you peek at Gold daily chart...which i highlighted a few days ago...it has a beautiful inverse Head&Shoulder formation...the pull back that was needed for an entry was 1130 region...

[winston]

Jim Rogers: Next Recession Is Coming and It Will Be Much Worse
Tuesday, 20 Apr 2010 02:55 PM
By: Dan Weil

The Great Recession that may have just ended will amount to nothing compared to the next one, says commodities expert Jim Rogers.

The huge fiscal and monetary stimulus is what will cause the crisis, he says. Rogers notes that the United States suffers a recession every four to six years on average.

“When it (the next one) comes, it’s going to be much worse, because Washington can’t quintuple its debt again,” he told Newsmax.TV Money.

Federal Reserve Chairman Ben Bernanke is a big part of the problem, says Rogers, chairman of Rogers Holdings. “Mr. Bernanke can’t print much more money again. The world is going to run out of trees.”

Rogers recommends that we abolish the Fed, because it’s causing the problems. “We’ve had three central banks in American history. The first two disappeared. This one will too,” he predicted.

That’s thanks to the mistakes made by Bernanke and his predecessor, Alan Greenspan.

“They’ve taken on gigantic amounts of debt that you and I are now responsible for. The central bank is making it worse,” Rogers said.

Bernanke’s low interest rate policy is a terrible mistake, Rogers says. “He’s essentially ruining the U.S. economy in the long run and ruining the U.S. dollar as well.”

The dollar’s safe for now, Rogers says, noting that he owns it himself. “But in the longer term, the dollar is a terribly flawed currency.”

Inflation already is here, he says.

“We know that prices are going up, whether it’s insurance, entertainment, education or fuel. The price of everything is going up, and it’s going to get worse because Mr. Bernanke and the people in Washington are spending gigantic amounts of money that we don’t have.”

That inflation is reflected in higher oil prices, and the surprise will be how high oil rises over the next decade, Rogers says.

“Known reserves are declining at a steady rate,” he points out. “Unless somebody finds a lot of oil very quickly, the price of oil is going to go much higher.”

Stocks aren’t in imminent danger, Rogers says. “Stocks are doing OK, and probably will for a while, because all this money is being flooded into the economy. It has to go somewhere.”

There’s a very good chance that some governments will default on their debt in the next few years, he says.

While some insist that fate will befall the United States and United Kingdom, Rogers says he doesn’t know enough yet to judge.

“I do know that they’ve run up staggering debts in Washington, and that usually leads to problems down the road.”

http://moneynews.com/Headline/jim-roger ... /id/356312

[millionairemind]

Rogers says bailout is 'nail in the euro's coffin'
By Shiyin Chen and Haslinda Amin (China Daily)
Updated: 2010-05-13 10:32

SINGAPORE - Investor Jim Rogers said Europe's bailout of indebted nations to overcome the sovereign-debt crisis is just "another nail in the coffin" for the euro as higher spending increases the region's debt.

The 16-nation currency weakened for a second day against the dollar after rallying as much as 2.7 percent on May 10, when the governments of the 16 euro nations agreed to make loans of as much as 750 billion euros ($962 billion) available to countries under attack from speculators and the European Central Bank pledged to intervene in government securities markets.

Rogers says bailout is 'nail in the euro's coffin'

"I was stunned," said Rogers, chairman of Rogers Holdings. "This means that they've given up on the euro, they don't particularly care if they have a sound currency, you have all these countries spending money they don't have and it's now going to continue."

New York University professor Nouriel Roubini said Greece and other "laggards" in the euro area may be forced to abandon the common currency to spur their economies. The euro will remain the currency for a smaller number of countries that have "stronger fiscal and economic fundamentals", he said.

Greece's budget deficit of 13.6 percent of gross domestic product is the second-highest in the euro zone after Ireland's 14.3 percent. As part of the bailout plan, Spain and Portugal also pledged deeper deficit reductions than previously planned.

Economic growth in the nations that share the euro will lag behind the US by almost 1.5 percentage points next year, Bloomberg surveys of economists show.

All paper currencies are being "debased", with the euro currency union at risk of being "dissolved", Rogers said, adding that he continues to own the dollar, the Swiss franc, the Japanese yen and the euro.
"It's a political currency and nobody is minding the economics behind the necessities to have a strong currency," Rogers said.

"I'm afraid it's going to dissolve. They're throwing more money at the problem and it's going to make things worse down the road."

Investors should instead buy precious metals including gold or currencies of countries that have large natural resources, Rogers said. Among other asset classes, he favors agricultural commodities as the best bet for the next decade as well as silver because prices haven't rallied.

Rogers started short-selling emerging markets in the past two weeks after last year's rally, he said. Still, the investor will seek to add to his Chinese holdings if shares fall further.

Bloomberg News