Due to the Labor Day holiday, there will be no new material posted on Monday. Posts will resume on Tuesday.

Have a great weekend!

Christopher E. Hill
Editor

There will be no new material appearing on Investorazzi.com today. The regular posting schedule of Monday through Friday will resume tomorrow.

The Internet news site Newsmax.com spoke to well-known bond investor Bill Gross about the direction of the federal funds rate. For those of you unfamiliar with the term, this rate is what news reports are referring to when they talk about the Federal Reserve changing interest rates. According to Newsmax.com:

Bond expert Bill Gross, founder of Pimco, says that the Federal Reserve will leave the benchmark federal funds rate at two percent through December, unchanged from today.

In an interview, Gross said that the Fed is walking a tightrope, inflation on one side and recession on the other.

For the economy, though, the Fed is probably doing the right thing for now, Gross said.

“The Fed, I think they are at neutral, and they should be,” said Gross.

Federal Reserve, Washington, DC

Gross addressed talk coming from the Fed about taking a tougher stance on inflation, and possibly raising the fed funds rate. The manager of the $130 billion Pimco Total Return Fund told Newsmax.com:

The Fed is jawboning, and they are jawboning appropriately. By this time in December, the Fed funds rate will still be at two percent.

The Internet news site noted that Gross sees inflation coming down during the next year, and thinks the Federal Reserve is managing the U.S. economy in that direction.

Source:

“Bill Gross: Fed in Neutral Until December”
Newsmax.com, July 15, 2008

Legendary investor Jim Rogers appeared on CNBC’s “Worldwide Exchange” yesterday. While the CEO of Rogers Holdings talked about how the U.S. government should not bail out U.S. mortgage giants Fannie Mae and Freddie Mac and how high oil prices are here to stay unless the world finds a lot of new supply quickly, he also talked about what he’s investing in:

CNBC: So, you’re buying oil Jim?
ROGERS: No, I’m not buying oil now. Oil is at an all time high. I don’t like to buy things at all time highs.
CNBC: So, what are you buying then?
ROGERS: Well, I’m buying airlines. I’m buying…
CNBC: You’re buying airlines?
ROGERS: Yes.
CNBC: But oil prices are going up, you’re buying airlines?
ROGERS: Yes. Yes.
CNBC: Why?
ROGERS: If you fly a lot, you’ll see that there’s nobody, you can’t get a seat, the rates are all going higher and higher. All the airlines are taking the planes, the high-cost planes, out of production, or out of use, and it’s getting very, very tight out there. The capacity is coming down and the demand is still here. Maybe we’re all going to start taking the boat to Europe again. Maybe we’re all going to take the boat to America. But, unless that happens, airlines will probably have a much better future.
CNBC: Are you still buying Chinese stocks, because I know you’re pretty bullish in a Chinese equity market?
ROGERS: Well, I’m waiting for what I hope is going to be a selling climax.
CNBC: Isn’t there one now?
ROGERS: We might get one. Chinese shares were down 20% last month alone. It looks like a selling climax developing. And if it continues, and if we have a selling climax, I plan to buy Taiwan and China. Taiwan I’ve never bought in my whole life, and I’m 65-years-old. But, I think for the first time in my life there’s going to be peace, and if there’s really going to be peace, then Taiwan is a wonderful place to invest.

You can view the 8 minute 36 second CNBC interview here.

Source:

Jim Rogers Interview
CNBC, July 15, 2008

NewsMax.com recently talked to well-known money manager Marc Faber, who shared his views on the U.S. central bank, bank failures, and bailouts with the Internet news site. Dr. Faber is famous for advising clients to get out of the U.S. stock market one week before the October 1987 crash. On the Fed:

The Federal Reserve has misled the public, and its fiscal policy has greatly damaged the U.S. economy. But the big Wall Street banks and brokerage firms will be bailed out by the Fed if they get in trouble because they’re members of the same “club.”

Those are the opinions of Marc Faber, economist, author, former Managing Director of Drexel Burnham Lambert, and editor of The Gloom Boom & Doom Report, a monthly investment newsletter.

“Let’s say if I’m a manufacturer and I’m a bad businessman and I go out of business, who’s going to help me? But Bear Stearns and the Wall Street elite because they’re tied into the Treasury and the Federal Reserve and they lunch together, it’s a club… and they’re bailed out. I mean it’s a joke.”

“The first thing that people should do is stop listening to the Federal Reserve in America, and specifically to Mr. Ben Bernanke,” Faber said in a recent CNBC interview.

“They are misleading the public and investors by claiming they want to have a strong dollar and that they’re concerned about inflation. But when it comes to actions, they show no concern about inflation and [about] the ordinary Americans and middle class at all.”

Getting The Shaft?

Dr. Faber is also forecasting an explosion of bank failures over the coming year. According to NewsMax.com:

In Faber’s recent note to investors he writes with extreme pessimism that he expects 150 bank failures in the next 12 months.

“I think a lot of banks are already bankrupt,” Faber says.

“And a lot of insurance companies and financial institutions, but they hide their rotten assets in level three asset categories, where you don’t need to value them.”

“I think the financial sector by and large has much larger problems than is perceived by the investment community. The stock market to some extent is telling you that, is giving you the price signals.”

The Swiss-born investor also feels that the Fed acted irresponsibly when it bailed out Bear Stearns. The news site explained:

Yet after the Bear Stearns bailout, the Fed has essentially promised bailouts for the largest firms if they go belly up, says Faber.

“It’s a very questionable practice in life to have a financial sector that made so much money in the good days, and when something goes bad the government just bails them out. It sets a very bad precedent.”

Source:

“Marc Faber: Bernanke, Fed a ‘Joke’”
NewsMax.com, July 10, 2008

There will be no new material posted on Investorazzi.com until Monday, July 7, in observance of Independence Day in the United States.

Have a wonderful weekend!

Christopher E. Hill
Editor

Will continue until Monday, June 30, at which time new material will appear on Investorazzi.com.

Consider this my “summer vacation” from posting…

Christopher E. Hill
Editor

For your information, no new material will be posted on Investorazzi.com this week.

I will be doing some re-tooling of both Investorazzi and its sibling blog, Boom2Bust.com. In addition, there are some other projects, including two new websites focusing on gold and silver due to be unveiled in a couple of weeks, that I’ll be working on.

Thank you for your patience.

Christopher E. Hill
Editor
editor(AT)investorazzi(DOT)com

There will be no posts today or Tuesday due to much-needed maintenance and upgrades.

Your patience is appreciated.

Christopher E. Hill
Editor

Welcome to Investorazzi.com, a new financial weblog that tracks the investment activities of the world’s greatest investors. At the present time, the list of legendary investors includes:

• Tom Barrack, “The World’s Greatest Real Estate Investor”
• Warren Buffett, “The Oracle of Omaha”
• Jeremy Grantham
• Bill Gross, “The King of Bonds”
• Eddie Lampert, “The Next Warren Buffett”
• T. Boone Pickens, Jr., “The Oracle of Oil”
• Jim Rogers
• George Soros, “The Man Who Broke the Bank of England”

See “The Investors” page for more information about these investment legends.

My name is Christopher E. Hill, and I am the creator and editor of this blog. As an independent financial research analyst based out of Chicago, Illinois, I came up with the idea for Investorazzi.com during the 2007 holiday season. Using the Internet and other resources, I will attempt to shadow these legendary investors, much like the dreaded paparazzi and their celebrity targets. Which is, by the way, how the weblog got its name.

The word “paparazzi” is derived from a character in the Fellini film La Dolce Vita. The character, a photographer named Paparazzo, reminded Fellini of “a buzzing insect, hovering, darting, stinging.”

-Source: Howstuffworks

As the creator and editor of Boom2Bust.com, “The Most Hated Blog On Wall Street,” I’ve had prior blogging experience. Boom2Bust is an independent financial blog that seeks to warn and educate readers about a coming U.S. financial crash. Making its debut over the 2007 Memorial Day Weekend, material from Boom2Bust appears regularly on Reuters.com (over 100 posts) and has featured in the online editions of the Wall Street Journal, Fox Business, Chicago Sun-Times, West Orlando News, and Palm Beach Post.

I hope you enjoy reading Investorazzi.com. Please do not hesitate to contact me with any suggestions for improving this blog.

Sincerely,

Christopher E. Hill
Editor
editor(AT)investorazzi(DOT)com