![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/tny_au_en_usoz_2.gif)
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Kind of puts things in perspective. Thanks WaveRider
Gold Daily and Silver Weekly Charts
20 minutes ago
Monday, August 31, 2009
Sunday, August 30, 2009
Quint Tatro Charts the Last Decade
You'll have to expand this to full screen to see the presentation or go to the link below. Either way it is a little blurry.
http://video.forbes.com/fvn/technical-analysis-09/technical-analysis-for-turbulent-markets
The Dark Hours and The Dark Night Are Here
Submitted by Wave Rider
“With between 45 and 70 times leverage, plus too big for the country to save, plus $1 quadrillion in derivatives, it is unlikely that the banking system will survive the next few years in its present form.”
I cannot recommend the following article highly enough, especially if you are fairly new to trying to figure this banking mess out. This article was posted on Jesse’s Cafe, as always his articles are classy and prescient and his sidebar is full of good reading. Please note we are starting to see QUADRILLION appear more often. Have we become immune to TRILLION already?
A SHOCKING FALL by Egon von Greyerz – Matterhorn Asset Management
“Paper money eventually returns to its intrinsic value ZERO” - Voltaire 1729
This month we will discuss what is likely to be a major change both in sentiment and in the economy in the next few months. The autumn of 2009 will be full of shocking surprises in the banking sector, in financial markets and in the world economy. The events that we outlined in our previous newsletter, “The Dark Years Are Here” are going to start unfolding. There will also be shocking falls in stock markets, in the dollar and in bond markets. But these falls will create major opportunities for investors which we will also discuss....
http://matterhornassetmanagement.com/newsletter/?newsletter=21
http://matterhornassetmanagement.com/newsletter/?newsletter=20
A Shocking Fall
by Egon von Greyerz – Matterhorn Asset Management
Saturday, August 29, 2009
Time for a weekend music interlude
Just felt like I needed something completely different for a change as life is a "Question of Balance" I changed the song and posted the lyrics below. Have a great weekend! I have a post coming on Sunday from Waverider.
Queenbee
Why do we never get an answer
When we're knocking at the door?
With a thousand million questions
About hate and death and war
'Cause when we stop and look around us
There is nothing that we need
In a world of persecution
That is burning in its greed
Why do we never get an answer
When we're knocking at the door?
Because the truth is hard to swallow
That's what the war of love is for
It's not the way that you say it
When you do those things to me
It's more the way that you mean it
When you tell me what will be
And when you stop and think about it
You won't believe it's true
That all the love you've been giving
Has all been meant for you
I'm looking for someone to change my life
I'm looking for a miracle in my life
And if you could see what it's done to me
To lose the the love I knew
Could safely lead me through
Between the silence of the mountains
And the crashing of the sea
There lies a land I once lived in
And she's waiting there for me.
But in the grey of the morning
My mind becomes confused
Between the dead and the sleeping
And the road that I must choose
I'm looking for someone to change my life
I'm looking for a miracle in my life
And if you could see what it's done to me
To lose the the love I knew
Could safely lead me to
The land that I once knew
To learn as we grow old
The secrets of our souls
It's not the way that you say it
When you do those things to me
It's more the way you really mean it
When you tell me what will be
Why do we never get an answer
When we're knocking at the door?
With a thousand million questions
About hate and death and war
'Cause when we stop and look around us
There is nothing that we need
In a world of persecution
That is burning in its greed
Why do we never get an answer
When we're knocking at the door?
Friday, August 28, 2009
Marc Faber
I think the funniest part of this interview (that I found on Nathan's Blog) is at the end of the conversation the interviewer point blank asks "is there anything that can derail your incredibly pessimistic scenario?" He simply replies "No" I thought I would fall out of my chair laughing. If he is right, we are in big trouble.
Shaza’s Podcast of the Day:
Reversion to the Mean straight ahead?
Robert Prechter, founder of Elliot Wave and Socionomics Institute is interviewed by Eric King. The social patterns of herding is not random or rational, but unconscious...this results in patterns of price changes...including reversion to the mean. Enjoy!
It's about 40 minutes long
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/8/27_Robert_Prechter.html
Robert Prechter, founder of Elliot Wave and Socionomics Institute is interviewed by Eric King. The social patterns of herding is not random or rational, but unconscious...this results in patterns of price changes...including reversion to the mean. Enjoy!
It's about 40 minutes long
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/8/27_Robert_Prechter.html
Wednesday, August 26, 2009
The Case against Bernanke
By Stephen Roach
August 25 2009
Contributed by Shaza
Barack Obama has rendered one of his most important post-crisis verdicts: Ben Bernanke will be nominated for a second term as chairman of the Federal Reserve. This is a very shortsighted decision. While America’s head central banker deserves credit for being creative and courageous in orchestrating an unusually aggressive monetary easing programme, it is important to remember that his pre-crisis actions played an equally critical role in setting the stage for the most wrenching recession since the 1930s. It is as if a doctor guilty of malpractice is being given credit for inventing a miracle cure. Maybe the patient needs a new doctor.
Mr Bernanke made three critical mistakes in his pre-Lehman incarnation: First, and foremost, he was deeply wedded to the philosophical conviction that central banks should be agnostic when it comes to asset bubbles. On this count, he stood with his predecessor – serial bubble-blowing Alan Greenspan – who argued that monetary authorities are best positioned to clean up the mess after the bursting of asset bubbles rather than to pre-empt the damage. As a corollary to this approach, both Mr Bernanke and Mr Greenspan drew the wrong conclusions from post-bubble strategies earlier in this decade put in place after the bursting of the equity bubble in 2000. In retrospect, the Fed’s injection of excess liquidity in 2001-2003, which Mr Bernanke endorsed with fervour, played a key role in setting the stage for the lethal mix of property and credit bubbles.
Second, Mr Bernanke was the intellectual champion of the “global saving glut” defence that exonerated the US from its bubble-prone tendencies and pinned the blame on surplus savers in Asia. While there is no denying the demand for dollar assets by foreign creditors, it is absurd to blame overseas lenders for reckless behaviour by Americans that a US central bank should have contained. Asia’s surplus savers had nothing to do with America’s irresponsible penchant for leveraging a housing bubble and using the proceeds to fund consumption. Mr Bernanke’s saving glut argument was at the core of a deep-seated US denial that failed to look in the mirror and pinned blame on others.
Third, Mr Bernanke is cut from the same market libertarian cloth that got the Fed into this mess. Steeped in the Greenspan credo that markets know better than regulators, Mr Bernanke was aligned with the prevailing Fed mindset that abrogated its regulatory authority in the era of excess. The derivatives’ explosion, extreme leverage of regulated and shadow banks and excesses of mortgage lending were all flagrant abuses that both Mr Bernanke and Mr Greenspan could have said no to. But they did not. As a result, a complex and unstable system veered dangerously out of control.
Notwithstanding these mistakes, Mr Obama may be premature in giving Mr Bernanke credit for the great cure. No one knows for certain as to whether the Fed’s strategy will ultimately be successful. The worst of theUS recession appears to have been arrested for now – a fairly typical, but temporary, outgrowth of the time-honoured inventory cycle. But the sustainability of any post-bubble recovery is always dubious. Just ask Japan 20 years after the bursting of its bubbles.
While financial markets are giddy with hopes of economic revival – in part inspired by Mr Bernanke’s cheerleading at the Fed’s annualJackson Hole gathering – there is still good reason to believe that the US recovery will be anaemic and fragile. US consumers are in the early stages of a multi-year retrenchment as they cut debt and rebuild retirement saving. The unusual breadth and synchronicity of the global recession will restrain US export demand from becoming a new growth engine.
It would be the height of folly to reward Mr Bernanke for the recovery that never stuck. Yet Mr Bernanke’s apparent reward is, unfortunately, typical of the snap judgments that guide Washington decision-making. In this same vein, it is hard to forget Mr Greenspan’s mission-accomplished speech in 2004 that claimed “our strategy of addressing the bubble’s consequences rather than the bubble itself has been successful”. Eager to declare the crisis over, the Obama verdict may be equally premature.
The Bernanke reappointment is a welcome chance for a broader debate over the conduct and role of US monetary policy. Mr Obama has made sweeping proposals that give the Fed broad new powers in managingsystemic risks. I argued in the Financial Times 10 months ago that the Fed should not be granted these powers without greater accountability as required by a “financial stability mandate” – in effect, forcing the Fed to shape monetary policy with an aim towards avoiding asset bubbles and imbalances. Without a revamped policy mandate, it is conceivable that we could face another destabilising crisis.
Ultimately, these decisions boil down to the person – in this case, Mr Bernanke – who is being charged with the awesome responsibility as America’s chief economic policymaker. As a student of the Great Depression, he should have known better. Yes, he reacted strongly after the fact in taking actions to avoid the pitfalls highlighted by his own research. But he lacked the foresight and courage to resist the most reckless tendencies of the era of excess. The world needs central bankers who avoid problems, not those who specialise in post-crisis damage control. For that reason, alone, he should not be reappointed. Let the debate begin.
The writer is chairman of Morgan Stanley Asia and author of The Next Asia to be published next month.
http://www.ft.com/cms/s/0/a2ba2378-9186-11de-879d-00144feabdc0.html
August 25 2009
Contributed by Shaza
Barack Obama has rendered one of his most important post-crisis verdicts: Ben Bernanke will be nominated for a second term as chairman of the Federal Reserve. This is a very shortsighted decision. While America’s head central banker deserves credit for being creative and courageous in orchestrating an unusually aggressive monetary easing programme, it is important to remember that his pre-crisis actions played an equally critical role in setting the stage for the most wrenching recession since the 1930s. It is as if a doctor guilty of malpractice is being given credit for inventing a miracle cure. Maybe the patient needs a new doctor.
Mr Bernanke made three critical mistakes in his pre-Lehman incarnation: First, and foremost, he was deeply wedded to the philosophical conviction that central banks should be agnostic when it comes to asset bubbles. On this count, he stood with his predecessor – serial bubble-blowing Alan Greenspan – who argued that monetary authorities are best positioned to clean up the mess after the bursting of asset bubbles rather than to pre-empt the damage. As a corollary to this approach, both Mr Bernanke and Mr Greenspan drew the wrong conclusions from post-bubble strategies earlier in this decade put in place after the bursting of the equity bubble in 2000. In retrospect, the Fed’s injection of excess liquidity in 2001-2003, which Mr Bernanke endorsed with fervour, played a key role in setting the stage for the lethal mix of property and credit bubbles.
Second, Mr Bernanke was the intellectual champion of the “global saving glut” defence that exonerated the US from its bubble-prone tendencies and pinned the blame on surplus savers in Asia. While there is no denying the demand for dollar assets by foreign creditors, it is absurd to blame overseas lenders for reckless behaviour by Americans that a US central bank should have contained. Asia’s surplus savers had nothing to do with America’s irresponsible penchant for leveraging a housing bubble and using the proceeds to fund consumption. Mr Bernanke’s saving glut argument was at the core of a deep-seated US denial that failed to look in the mirror and pinned blame on others.
Third, Mr Bernanke is cut from the same market libertarian cloth that got the Fed into this mess. Steeped in the Greenspan credo that markets know better than regulators, Mr Bernanke was aligned with the prevailing Fed mindset that abrogated its regulatory authority in the era of excess. The derivatives’ explosion, extreme leverage of regulated and shadow banks and excesses of mortgage lending were all flagrant abuses that both Mr Bernanke and Mr Greenspan could have said no to. But they did not. As a result, a complex and unstable system veered dangerously out of control.
Notwithstanding these mistakes, Mr Obama may be premature in giving Mr Bernanke credit for the great cure. No one knows for certain as to whether the Fed’s strategy will ultimately be successful. The worst of theUS recession appears to have been arrested for now – a fairly typical, but temporary, outgrowth of the time-honoured inventory cycle. But the sustainability of any post-bubble recovery is always dubious. Just ask Japan 20 years after the bursting of its bubbles.
While financial markets are giddy with hopes of economic revival – in part inspired by Mr Bernanke’s cheerleading at the Fed’s annualJackson Hole gathering – there is still good reason to believe that the US recovery will be anaemic and fragile. US consumers are in the early stages of a multi-year retrenchment as they cut debt and rebuild retirement saving. The unusual breadth and synchronicity of the global recession will restrain US export demand from becoming a new growth engine.
It would be the height of folly to reward Mr Bernanke for the recovery that never stuck. Yet Mr Bernanke’s apparent reward is, unfortunately, typical of the snap judgments that guide Washington decision-making. In this same vein, it is hard to forget Mr Greenspan’s mission-accomplished speech in 2004 that claimed “our strategy of addressing the bubble’s consequences rather than the bubble itself has been successful”. Eager to declare the crisis over, the Obama verdict may be equally premature.
The Bernanke reappointment is a welcome chance for a broader debate over the conduct and role of US monetary policy. Mr Obama has made sweeping proposals that give the Fed broad new powers in managingsystemic risks. I argued in the Financial Times 10 months ago that the Fed should not be granted these powers without greater accountability as required by a “financial stability mandate” – in effect, forcing the Fed to shape monetary policy with an aim towards avoiding asset bubbles and imbalances. Without a revamped policy mandate, it is conceivable that we could face another destabilising crisis.
Ultimately, these decisions boil down to the person – in this case, Mr Bernanke – who is being charged with the awesome responsibility as America’s chief economic policymaker. As a student of the Great Depression, he should have known better. Yes, he reacted strongly after the fact in taking actions to avoid the pitfalls highlighted by his own research. But he lacked the foresight and courage to resist the most reckless tendencies of the era of excess. The world needs central bankers who avoid problems, not those who specialise in post-crisis damage control. For that reason, alone, he should not be reappointed. Let the debate begin.
The writer is chairman of Morgan Stanley Asia and author of The Next Asia to be published next month.
http://www.ft.com/cms/s/0/a2ba2378-9186-11de-879d-00144feabdc0.html
Tuesday, August 25, 2009
AMERICAN IDIOTS
Posted on Financial Sense and written by James Quinn
August 14, 2009
According to the CDC, 66% of adults over the age of 20 are overweight or obese. That is approximately 140 million adults. Somewhere between 15 and 20 million Americans can be classified as alcoholics. As many as 50% of those on welfare are alcoholics. There are 225 million people over 18 years old and 32 million of them do not have a high school degree. There are 32 million adults or 14% who are illiterate (23% in California, 22% in New York, 20% in Florida, 17% in New Jersey). The United States’ spending per pupil in public schools at $9,266 is in the top 5 in the world. New York and New Jersey spend $14,000 per pupil and one-fifth of their adults are illiterate.
Forrest Gump, when asked “Are you stupid or something”, responded “Stupid is as stupid does”. A person’s appearance does not prove they are stupid. It is their deeds and actions which prove whether they are stupid or not. The terms stupid and idiot are not politically correct in today’s America. Intellectually challenged, IQ disadvantaged, aptitude deficient, brain power wanting, and acumen poor might satisfy the PC police. Let’s take a look at their definitions according to Webster’s Dictionary and assess whether they might apply to anyone in the increasingly socialized United States of today.
Stupid - slow of mind; given to unintelligent decisions or acts; acting in an unintelligent or careless manner; lacking intelligence or reason; lacking in power to absorb ideas or impressions; implies a slow-witted or dazed state of mind that may be either congenital or temporary.
Idiot - a foolish or senseless person; a person of subnormal intelligence; a person lacking intelligence or common sense.
Besides describing George W. Bush, these definitions sadly describe millions of Americans. As a wise person I know likes to say, “It is a sad state of affairs”. Our citizens have failed to heed the wise words of our Founding Fathers:
“Reason obeys itself; and ignorance submits to whatever is dictated to it.”
Thomas Paine
“Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power which knowledge gives.”
James Madison
“Education is a better safeguard of liberty than a standing army.”
Edward Everett
The American people’s ignorance, stupidity, and disinterest in the governance of this nation have allowed an oligopoly of politicians, bankers, and powerful corporations to seize control of the country and loot its riches for their personal gain. By failing to educate themselves, millions of ignorant Americans have lost all of their power and are now dictated to by the few with knowledge. The elite who dictate the path of our country do not want the masses to become educated. Their power would be in jeopardy. The American public school system insures the retention of their power and wealth.
“Anyway, no drug, not even alcohol, causes the fundamental ills of society. If we're looking for the source of our troubles, we shouldn't test people for drugs, we should test them for stupidity, ignorance, greed and love of power.”
P.J. O’Rourke
For the rest of the article here is the link.
http://www.financialsense.com/editorials/quinn/2009/0814.html
August 14, 2009
According to the CDC, 66% of adults over the age of 20 are overweight or obese. That is approximately 140 million adults. Somewhere between 15 and 20 million Americans can be classified as alcoholics. As many as 50% of those on welfare are alcoholics. There are 225 million people over 18 years old and 32 million of them do not have a high school degree. There are 32 million adults or 14% who are illiterate (23% in California, 22% in New York, 20% in Florida, 17% in New Jersey). The United States’ spending per pupil in public schools at $9,266 is in the top 5 in the world. New York and New Jersey spend $14,000 per pupil and one-fifth of their adults are illiterate.
Forrest Gump, when asked “Are you stupid or something”, responded “Stupid is as stupid does”. A person’s appearance does not prove they are stupid. It is their deeds and actions which prove whether they are stupid or not. The terms stupid and idiot are not politically correct in today’s America. Intellectually challenged, IQ disadvantaged, aptitude deficient, brain power wanting, and acumen poor might satisfy the PC police. Let’s take a look at their definitions according to Webster’s Dictionary and assess whether they might apply to anyone in the increasingly socialized United States of today.
Stupid - slow of mind; given to unintelligent decisions or acts; acting in an unintelligent or careless manner; lacking intelligence or reason; lacking in power to absorb ideas or impressions; implies a slow-witted or dazed state of mind that may be either congenital or temporary.
Idiot - a foolish or senseless person; a person of subnormal intelligence; a person lacking intelligence or common sense.
Besides describing George W. Bush, these definitions sadly describe millions of Americans. As a wise person I know likes to say, “It is a sad state of affairs”. Our citizens have failed to heed the wise words of our Founding Fathers:
“Reason obeys itself; and ignorance submits to whatever is dictated to it.”
Thomas Paine
“Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power which knowledge gives.”
James Madison
“Education is a better safeguard of liberty than a standing army.”
Edward Everett
The American people’s ignorance, stupidity, and disinterest in the governance of this nation have allowed an oligopoly of politicians, bankers, and powerful corporations to seize control of the country and loot its riches for their personal gain. By failing to educate themselves, millions of ignorant Americans have lost all of their power and are now dictated to by the few with knowledge. The elite who dictate the path of our country do not want the masses to become educated. Their power would be in jeopardy. The American public school system insures the retention of their power and wealth.
“Anyway, no drug, not even alcohol, causes the fundamental ills of society. If we're looking for the source of our troubles, we shouldn't test people for drugs, we should test them for stupidity, ignorance, greed and love of power.”
P.J. O’Rourke
For the rest of the article here is the link.
http://www.financialsense.com/editorials/quinn/2009/0814.html
Monday, August 24, 2009
Report: Goldman provides tips to some clients
Investment bank allegedly gives some of its biggest clients stock tips
AP Wire
NEW YORK - Goldman Sachs Group Inc. provides some of its biggest clients stock tips that come out of regular meetings held by analysts and traders at the investment bank, according to a Wall Street Journal report.
Some of the analysts’ views, which can provide insight on potential short-term market movements, can differ from research notes Goldman widely distributes to its clients, the Journal reported. Critics claim providing the early information to only certain clients hurts customers who aren’t given the opportunity to trade on the ideas that come out of the meetings.
Brokerage firms have the right to share their information with various clients as they wish, so long as their analysts’ stock recommendations distributed publicly don’t contradict what they say internally, said Donald Langevoort, a former Securities and Exchange Commission special counsel who teaches securities law at Georgetown University.
Whole article here http://www.msnbc.msn.com/id/32539948/ns/business-us_business/
AP Wire
NEW YORK - Goldman Sachs Group Inc. provides some of its biggest clients stock tips that come out of regular meetings held by analysts and traders at the investment bank, according to a Wall Street Journal report.
Some of the analysts’ views, which can provide insight on potential short-term market movements, can differ from research notes Goldman widely distributes to its clients, the Journal reported. Critics claim providing the early information to only certain clients hurts customers who aren’t given the opportunity to trade on the ideas that come out of the meetings.
Brokerage firms have the right to share their information with various clients as they wish, so long as their analysts’ stock recommendations distributed publicly don’t contradict what they say internally, said Donald Langevoort, a former Securities and Exchange Commission special counsel who teaches securities law at Georgetown University.
Whole article here http://www.msnbc.msn.com/id/32539948/ns/business-us_business/
Gold bounds higher on weakening dollar and inflation concerns
The COMEX December gold futures contract closed up $13.00 Friday at $954.70, trading between $939.20 and $959.90
August 21, p.m. excerpts:
(from Reuters) --
Gold climbed toward $960 an ounce Friday, gaining more than 1 percent as the dollar slumped against the euro. A Wall Street rally amid optimistic U.S. existing home sales data prompted investors to buy risker assets such as commodities and equities and to shun safe-haven dollar holdings such as U.S. Treasury bonds. "Gold's rally is all due to the dollar weakness and the possibility of inflation," said George Gero, vice president of RBC Capital Markets Global Futures in New York...more
Saturday, August 22, 2009
Deflating The Fed
Michael Shedlock speaks about the Fed. Mish has been one of my favorite bloggers' for a long time.
Another Michael Shedlock interview posted earlier from the Disciplined Investor.
Want to know more about him? Check out his blog below. It is on my blog list as well.
Friday, August 21, 2009
Temporary Recession or the End of Growth?
Submitted by VA-Bear
Everyone agrees: our economy is sick. The inescapable symptoms include declines in consumer spending and consumer confidence, together with a contraction of international trade and available credit. Add a collapse in real estate values and carnage in the automotive and airline industries and the picture looks grim indeed.
But why are both the U.S. economy and the larger global economy ailing? Among the mainstream media, world leaders, and America's economists-in-chief (Treasury Secretary Geithner and Federal Reserve Chairman Bernanke) there is near-unanimity of opinion: these recent troubles are primarily due to a combination of bad real estate loans and poor regulation of financial derivatives.
This is the Conventional Diagnosis. If it is correct, then the treatment for our economic malady might logically include heavy doses of bailout money for beleaguered financial institutions, mortgage lenders, and car companies; better regulation of derivatives and futures markets; and stimulus programs to jumpstart consumer spending.
But what if this diagnosis is fundamentally flawed? The metaphor needs no belaboring: we all know that tragedy can result from a doctor's misreading of symptoms, mistaking one disease for another.
Read the whole article here
http://www.energybulletin.net/node/49798
Everyone agrees: our economy is sick. The inescapable symptoms include declines in consumer spending and consumer confidence, together with a contraction of international trade and available credit. Add a collapse in real estate values and carnage in the automotive and airline industries and the picture looks grim indeed.
But why are both the U.S. economy and the larger global economy ailing? Among the mainstream media, world leaders, and America's economists-in-chief (Treasury Secretary Geithner and Federal Reserve Chairman Bernanke) there is near-unanimity of opinion: these recent troubles are primarily due to a combination of bad real estate loans and poor regulation of financial derivatives.
This is the Conventional Diagnosis. If it is correct, then the treatment for our economic malady might logically include heavy doses of bailout money for beleaguered financial institutions, mortgage lenders, and car companies; better regulation of derivatives and futures markets; and stimulus programs to jumpstart consumer spending.
But what if this diagnosis is fundamentally flawed? The metaphor needs no belaboring: we all know that tragedy can result from a doctor's misreading of symptoms, mistaking one disease for another.
Read the whole article here
http://www.energybulletin.net/node/49798
Thursday, August 20, 2009
Shaza’s Podcast of the Day:
Eric King has posted a lengthy interview with Dr. Faber. Enjoy!
In this interview Marc talks about dubious financial practices, deflation, inflation, hyperinflation, effects of hyperinflation, the U.S. stock market, excessive financial speculation, stimulus packages, the U.S. Dollar, The Fed, Bernanke and much more.
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/8/19_Dr._Marc_Faber.html
I know I said only one a day, but Shaza said this will stimulate some more interest.
Wednesday, August 19, 2009
IS JUNK A CLUNCKER? It looks like it!
Date 8/17/2009
I hope I am not too late posting this if you are into junk bonds. Hat tip to Shaza
If you have not sold ---SELL NOW
Junk bonds broke down today. Cash for this clunker was a good idea for those who got out earlier this month on my call. This signals the possible entry of the next phase of the credit crisis...which MSM has been hailing as over. As Queenbee sarcastically pointed out, all the chatter by MSM is a good contrary indicator.
Cash is still King in a deflationary depression if you cannot be a nimble a trader. If you missed the rally, stay in cash and let the tape tell you if this is a correction or a resumption in the bear market. Government bonds are returning some of the yield, the gold silver ratio is rising, gold price is falling , the dollar is rising and the Fed has no room to lower rates. The Fed can debate over 25 basis points that are left in the till, but give us a break! If the markets do test the lows of the last 12 months, the Fed has nowhere to go with rates. Things should start to get pretty interesting if the FED panics again.
This is adding up to a massive RED Flag.
If you have not sold ---SELL NOW
Junk bonds broke down today. Cash for this clunker was a good idea for those who got out earlier this month on my call. This signals the possible entry of the next phase of the credit crisis...which MSM has been hailing as over. As Queenbee sarcastically pointed out, all the chatter by MSM is a good contrary indicator.
Cash is still King in a deflationary depression if you cannot be a nimble a trader. If you missed the rally, stay in cash and let the tape tell you if this is a correction or a resumption in the bear market. Government bonds are returning some of the yield, the gold silver ratio is rising, gold price is falling , the dollar is rising and the Fed has no room to lower rates. The Fed can debate over 25 basis points that are left in the till, but give us a break! If the markets do test the lows of the last 12 months, the Fed has nowhere to go with rates. Things should start to get pretty interesting if the FED panics again.
This is adding up to a massive RED Flag.
Tuesday, August 18, 2009
Deflation Theory Is Lemon We Have All Been Sold: Matthew Lynn
Commentary by Matthew Lynn (submitted by Shaza)
Aug. 18 (Bloomberg) -- For much of the last year, central bankers, industrial leaders and politicians have been warning us about deflation. Falling prices, they tell us, will create another 1930s-style depression. The only answer is to print money furiously.
Now it turns out the theory is a lemon.
Deflation is no threat at all.
It doesn’t prevent an economy from functioning, and it doesn’t stop it from recovering either. The evidence suggests a period of sustained deflation might be what indebted economies need to get them back on the right track.
U.K. Chancellor of the Exchequer Alistair Darling said in a speech earlier this year that the Bank of England must be “prepared to act” to prevent price deflation.
“We are very keen on avoiding deflationary risk,” said European Central Bank President Jean-Claude Trichet in an interview this month. Much the same message has been pumped out around the world by economic leaders.
Nor have they been slow to put their freshly minted money where their mouth is. The Bank of England has embarked on a program of “quantitative easing,” or creating new money, to stave off the threat.
The trouble is, the theory doesn’t stack up.
Deflation, after all, has already arrived.
Falling Prices
In the euro region, prices fell a record 0.7 percent in July from a year earlier, after declining 0.1 percent in June, according to the European Union’s statistics office. In Germany, Europe’s largest economy, consumer prices posted their first annual drop in more than 22 years in July. Wholesale prices plunged almost 11 percent.
So the “deflating” euro area is disappearing over an economic precipice, right? Not quite. It is leading the world out of recession. Figures released last week showed Germany and France were hauling the region out of the global decline -- both expanded 0.3 percent in the three months through June after four consecutive quarters of contraction.
Not much sign of the dangers of deflation there.
In reality, anyone with a sense of economic history would have been aware that the whole deflation story was oversold. In the U.K., the House of Commons Library publishes data on prices going back to 1750. From 1814 to 1914, prices rose a bit in some years, and dropped a bit in others, so there was no real change in the price level over the century.
Greatest Power
In other words, there were plenty of deflationary years. Yet over that period, the U.K. became the greatest economic power in the world: Its relative decline only started once inflation took hold. Deflation didn’t stop the Industrial Revolution, one of the most sustained times of economic creativity ever seen.
Likewise, a 2004 study by the Federal Reserve Bank of Minneapolis looked at the data on deflation across 17 countries over 100 years. It found that although the Great Depression of the 1930s was linked with falling prices, that wasn’t true of any other historical period. There was, it said, “virtually no evidence” that deflation caused a depression.
Why should it? We are constantly told that deflation is bad because it makes consumers hold off from buying things, thinking they will be cheaper tomorrow. But that is just silly.
Two Impulses
Everyone knows that a computer or an iPod will be both better and cheaper in six months. And people really want one right now. Torn between those two impulses, plenty of shoppers go out and buy computers and music players. It is true in the electronics industry, and, once they get used to falling prices, it will be true for other industries as well.
Deflation may be bad for particular interest groups, which happen to be very powerful. It is bad for chief executives. It is easier to keep your profits rising in a mildly inflationary environment. You can just jack up your prices a bit, and you can often cut workers’ wages by stealth by holding wages steady.
The banking industry, which has come to rely on inflation to make highly leveraged loans sustainable, also dislikes deflation. Likewise, it is bad for governments, which use inflation to reduce the value of their debts.
On the other hand, deflation is good news for savers, who get richer just by hanging on to their cash. And it is beneficial for consumers, who get cheaper prices. It is usually good for workers as well, as they can generally hold the value of their wages, even while prices fall.
There are winners and losers, just as there are from most economic developments. The important point is that the people who lose are more powerful than the people who gain. That might explain why we hear about the dangers of deflation, and not about its advantages. It still doesn’t make them right.
There is no threat from deflation. It may even be desirable if it encourages a balance between saving and consumption, and discourages governments and banks from taking on debt.
(Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: Matthew Lynn in London at mathewlynn@bloomberg.net.
Last Updated: August 17, 2009 19:00 EDT
Aug. 18 (Bloomberg) -- For much of the last year, central bankers, industrial leaders and politicians have been warning us about deflation. Falling prices, they tell us, will create another 1930s-style depression. The only answer is to print money furiously.
Now it turns out the theory is a lemon.
Deflation is no threat at all.
It doesn’t prevent an economy from functioning, and it doesn’t stop it from recovering either. The evidence suggests a period of sustained deflation might be what indebted economies need to get them back on the right track.
U.K. Chancellor of the Exchequer Alistair Darling said in a speech earlier this year that the Bank of England must be “prepared to act” to prevent price deflation.
“We are very keen on avoiding deflationary risk,” said European Central Bank President Jean-Claude Trichet in an interview this month. Much the same message has been pumped out around the world by economic leaders.
Nor have they been slow to put their freshly minted money where their mouth is. The Bank of England has embarked on a program of “quantitative easing,” or creating new money, to stave off the threat.
The trouble is, the theory doesn’t stack up.
Deflation, after all, has already arrived.
Falling Prices
In the euro region, prices fell a record 0.7 percent in July from a year earlier, after declining 0.1 percent in June, according to the European Union’s statistics office. In Germany, Europe’s largest economy, consumer prices posted their first annual drop in more than 22 years in July. Wholesale prices plunged almost 11 percent.
So the “deflating” euro area is disappearing over an economic precipice, right? Not quite. It is leading the world out of recession. Figures released last week showed Germany and France were hauling the region out of the global decline -- both expanded 0.3 percent in the three months through June after four consecutive quarters of contraction.
Not much sign of the dangers of deflation there.
In reality, anyone with a sense of economic history would have been aware that the whole deflation story was oversold. In the U.K., the House of Commons Library publishes data on prices going back to 1750. From 1814 to 1914, prices rose a bit in some years, and dropped a bit in others, so there was no real change in the price level over the century.
Greatest Power
In other words, there were plenty of deflationary years. Yet over that period, the U.K. became the greatest economic power in the world: Its relative decline only started once inflation took hold. Deflation didn’t stop the Industrial Revolution, one of the most sustained times of economic creativity ever seen.
Likewise, a 2004 study by the Federal Reserve Bank of Minneapolis looked at the data on deflation across 17 countries over 100 years. It found that although the Great Depression of the 1930s was linked with falling prices, that wasn’t true of any other historical period. There was, it said, “virtually no evidence” that deflation caused a depression.
Why should it? We are constantly told that deflation is bad because it makes consumers hold off from buying things, thinking they will be cheaper tomorrow. But that is just silly.
Two Impulses
Everyone knows that a computer or an iPod will be both better and cheaper in six months. And people really want one right now. Torn between those two impulses, plenty of shoppers go out and buy computers and music players. It is true in the electronics industry, and, once they get used to falling prices, it will be true for other industries as well.
Deflation may be bad for particular interest groups, which happen to be very powerful. It is bad for chief executives. It is easier to keep your profits rising in a mildly inflationary environment. You can just jack up your prices a bit, and you can often cut workers’ wages by stealth by holding wages steady.
The banking industry, which has come to rely on inflation to make highly leveraged loans sustainable, also dislikes deflation. Likewise, it is bad for governments, which use inflation to reduce the value of their debts.
On the other hand, deflation is good news for savers, who get richer just by hanging on to their cash. And it is beneficial for consumers, who get cheaper prices. It is usually good for workers as well, as they can generally hold the value of their wages, even while prices fall.
There are winners and losers, just as there are from most economic developments. The important point is that the people who lose are more powerful than the people who gain. That might explain why we hear about the dangers of deflation, and not about its advantages. It still doesn’t make them right.
There is no threat from deflation. It may even be desirable if it encourages a balance between saving and consumption, and discourages governments and banks from taking on debt.
(Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: Matthew Lynn in London at mathewlynn@bloomberg.net.
Last Updated: August 17, 2009 19:00 EDT
A few thoughts and a hat tip to Mish for a great article
I put Mish back on the blog list for easy access. He wrote a great article about the coming foreclosures that everyone should read. http://globaleconomicanalysis.blogspot.com/2009/08/brace-for-wave-of-foreclosures-dam-is.html
I expect we will see a little rebound today. Maybe even gold will go up a little if the dollar weakens.
I expect we will see a little rebound today. Maybe even gold will go up a little if the dollar weakens.
Monday, August 17, 2009
With all the good news from the MSM
Why is the market down again today? The answer is below. Everything is getting slammed all sectors and even Goldman Sachs is -5% and we are less than and hour in. I think the fall crash may come a little earlier than later. It's a good thing I have tight stops on my trades.
Stocks plunge on anxiety about recovery
http://www.msnbc.msn.com/id/3683270/ns/business-stocks_and_economy/
Stocks plunge on anxiety about recovery
http://www.msnbc.msn.com/id/3683270/ns/business-stocks_and_economy/
Recession is over so sayeth the MSM
Japan’s 2nd-quarter GDP hits 3.7 percent pace
http://www.msnbc.msn.com/id/32442145/ns/business-world_business/
In Europe, signs of a nascent recovery
http://www.msnbc.msn.com/id/32364890/ns/business-world_business/
Small businesses seeing signs of recovery
http://www.msnbc.msn.com/id/32389256/ns/business-small_business/
http://www.msnbc.msn.com/id/32442145/ns/business-world_business/
In Europe, signs of a nascent recovery
http://www.msnbc.msn.com/id/32364890/ns/business-world_business/
Small businesses seeing signs of recovery
http://www.msnbc.msn.com/id/32389256/ns/business-small_business/
Sunday, August 16, 2009
Waverider agrees with Tickerville about UNG
YOU U.G.L.Y. You ugly!
U.G.L.Y. You ain't got no alibi, you're ugly!
http://www.youtube.com/watch?v=hoXORtIibwQ
U.G.L.Y. You ain't got no alibi, you're ugly!
http://www.youtube.com/watch?v=hoXORtIibwQ
Shaza's Podcast of the Day
http://www.howestreet.com/audio/kevinkerr_14082009.mp3
More on Sugar who would have thought?
Sugar May Advance 80% on Supply Crunch, Coleman Says
Aug. 14 (Bloomberg) -- Sugar may climb 80 percent to as high as 40 cents a pound on global supply shortages, said Singapore-based commodity hedge fund manager Michael Coleman.
“Sugar is caught in a perfect storm,” he said in a Bloomberg Television interview. There is “a big hole” in world supply and no obvious solution in the next six to nine months, said Coleman, 49, managing director of Aisling Analytics, which runs a $1.4 billion fund invested in energy and agriculture.
The sweetener has surged 88 percent this year, reaching a 28-year high, as India, the biggest consumer, had its driest June in 83 years and parts of Brazil, the largest grower, were drenched by rainfall four times more than normal, too wet to harvest. World demand will exceed output by as much as 5 million metric tons in the year ending September 2010, according to the International Sugar Organization.
Haven't had enough about Sugar? Well here is another article from Slate.
http://www.slate.com/id/2225289?nav=wp
Friday, August 14, 2009
Shaza's Podcast of the Day
“He who is ignorant of history remains always a child,” Cicero
Using History To Predict The Future: Bob Hoye
http://commoditywatch.podbean.com/2009/07/30/using-history-to-predict-the-future-bob-hoye/
Shaza's podcast Du Jour
Eric King speaks with John Maudlin part 2
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/8/7_John_Mauldin__Part_II_files/P2%20John%20Mauldin%2008%3A07%3A2009.mp3
Mauldin makes good arguments for the rise and rise and China and India. He also declares that not all good things come out of TEXAS!
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/8/7_John_Mauldin__Part_II_files/P2%20John%20Mauldin%2008%3A07%3A2009.mp3
Mauldin makes good arguments for the rise and rise and China and India. He also declares that not all good things come out of TEXAS!
Thursday, August 13, 2009
Bloggers' paradise
I have to recommend two blogs today. Jesse's Cafe http://jessescrossroadscafe.blogspot.com/2009/08/next-wave-of-financial-crisis.html
and the Lenny Bruce of the internet Edgar at http://pppad.blogspot.com/2009/08/get-grip.html
Edgar makes it all seem so absurd and he does it such a way that amuses me to no end.
Where is all this heading? In my opinion we are all going to pay the piper and very soon. Obama is the complete opposite of what he sold himself as. He is as slimy as a used car salesman. The Fed and Congress along with the big banks (especially GS) are ripping off the American Sheeple in a way that makes the Mafia seem like a small time West LA street gang.
I am still investing as I will surf along with WaveRider until there is no surf left to ride. Here comes a big wave now so start paddling. I offer these hot ones as they are undervalued and have been on a steady uptrend for months. MED, IEC, STEC, CLW, FHCO, AA and MAIL. I am strictly trading short term trends. No buy and hold and no technical analysis. I may be a fool, but I am not charging anything for this advice. Buyers beware! I used to make a joke to friends at work to "buy gold" now I tell them to "buy aluminum!" Alcoa is going to make a fortune. Tin foil hats will be selling like hotcakes at an IHOP.
and the Lenny Bruce of the internet Edgar at http://pppad.blogspot.com/2009/08/get-grip.html
Edgar makes it all seem so absurd and he does it such a way that amuses me to no end.
Where is all this heading? In my opinion we are all going to pay the piper and very soon. Obama is the complete opposite of what he sold himself as. He is as slimy as a used car salesman. The Fed and Congress along with the big banks (especially GS) are ripping off the American Sheeple in a way that makes the Mafia seem like a small time West LA street gang.
I am still investing as I will surf along with WaveRider until there is no surf left to ride. Here comes a big wave now so start paddling. I offer these hot ones as they are undervalued and have been on a steady uptrend for months. MED, IEC, STEC, CLW, FHCO, AA and MAIL. I am strictly trading short term trends. No buy and hold and no technical analysis. I may be a fool, but I am not charging anything for this advice. Buyers beware! I used to make a joke to friends at work to "buy gold" now I tell them to "buy aluminum!" Alcoa is going to make a fortune. Tin foil hats will be selling like hotcakes at an IHOP.
Elizabeth Warren speaks the truth about the banks
VA_Bear located this one from MSNBC's Morning Joe via Zerohedge and Shanky's Tech Blog. Hat tip to VA_Bear. What I glean from this is the 700 billion kept all "the too big to fails" afloat but did not take resolve the problems that we face in the future. My opinion is these dinosaurs should have been allowed to fail and that their assets should be marked to market. Until that happens there will be no "real economy" just another attempt at blowing bubbles.
http://www.zerohedge.com/article/elizabeth-warren-we-have-real-problem-coming
Elizabeth Warren, head of the Congressional Oversight Panel, which yesterday released quite a sobering report on the true state of the banking industry, explains what is really going on with the increasingly irrelevant balance sheets of the bailout banks (all of them). Once again underscores what a farce the stress test was, the complicity of the accountants in making the transparency initiative a sham, and why the banks are still as underwater as they ever were. Compliments of Shanky's Tech Blog.
http://www.zerohedge.com/article/elizabeth-warren-we-have-real-problem-coming
Elizabeth Warren, head of the Congressional Oversight Panel, which yesterday released quite a sobering report on the true state of the banking industry, explains what is really going on with the increasingly irrelevant balance sheets of the bailout banks (all of them). Once again underscores what a farce the stress test was, the complicity of the accountants in making the transparency initiative a sham, and why the banks are still as underwater as they ever were. Compliments of Shanky's Tech Blog.
Visit msnbc.com for Breaking News, World News, and News about the Economy
Wednesday, August 12, 2009
SHAZA’S PODCAST OF THE DAY
He may not be your cup of tea but Gerald Celente always has an opinion.
http://www.howestreet.com/audio/geraldcelente_11082009.mp3
http://www.howestreet.com/audio/geraldcelente_11082009.mp3
The Quiet Coup
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
by Simon Johnson and submitted by Shaza.
http://www.theatlantic.com/doc/200905/imf-advice
Tuesday, August 11, 2009
Shaza's Podcast of the Day
GATA on GOLD from Le Metropole Cafe....Sorry Shaza the picture wouldn't upload.
Le Pod Du Jour discusses gold markets and those nasty manipulators at the Central Banks, the good guys being GATA ( Gold Anti Trust Action Committee)
http://www.kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2009/8/7_GATA_files/GATA%2008%3A07%3A2009.mp3
Le Pod Du Jour discusses gold markets and those nasty manipulators at the Central Banks, the good guys being GATA ( Gold Anti Trust Action Committee)
http://www.kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2009/8/7_GATA_files/GATA%2008%3A07%3A2009.mp3
Monday, August 10, 2009
James Turk and Bob Hoye on Gold
Although I am bit under the weather I think the question about gold is important. Two men who know a lot about it.
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/8/7_James_Turk.html
Most people really like Bob Hoye who I think is an expert in the matter. He is also found on Howe Street.
http://www.institutionaladvisors.com/
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/8/7_James_Turk.html
Most people really like Bob Hoye who I think is an expert in the matter. He is also found on Howe Street.
http://www.institutionaladvisors.com/
Shaza’s Podcast of the Day
SHOW ME THE MONEY!!!
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/8/7_Marc_Chandler_files/Marc%20Chandler%2008%3A06%3A2009.mp3
Today’s Mp3 treat comes to you via Eric King at www.kingworldnews.com
Currencies are all over the shop, or should I say CHOP! King interviews the guru of Currency Trading, Marc Chandler of Harriman Brothers.
Marc’s career has been with the top currency firms in the world and he is currently with the oldest & largest partnership bank in America, Brown Brothers Harriman which does over $600 billion each month in currency transactions. In this interview Marc discusses the U.S. Dollar, the Yen, the Euro, the U.S. recovery, Australian and Canadian currencies, gold, inflation and much more.
Can you live on less in retirement?
Posted by Penelope Wang
August 7, 2009 1:50 pm
Maybe it’s a sign that recession really is easing: Once again we’re hearing arguments that you can save a lot less for retirement than the financial services industry would have you believe.
The last time this argument got much traction was in early 2007, when the housing market was still bubbling. Now John Rekenthaler, the well-respected vice president of research at Morningstar, has re-introduced this notion in a recent blog post entitled “The 80% Myth.” Writes Rekenthaler, “The financial services industry misleads the everyday investor by selling the notion that an 80% replacement rate of pre-retirement income is required for a successful retirement.”
As proof, Rekenthaler cites own parents, who retired at age 50 and have lived contentedly for nearly 30 years on just 50% of their pre-retirement income. They don’t eat out often or drink Starbucks, but they have traveled the world over. If his parents had aimed for 80% of pre-retirement income as the prerequisite for retiring, he notes, they might have had to work until age 70.
A modest income may work well for his parents. And it’s certainly true that the average retiree makes do with not that much. The median income for households headed by retirees is just $25,000 a year, according the Federal Reserve’s 2007 Survey of Consumer Finances (the most recent data available). That’s just about half the median income for all families, which is $47,000.
But does that mean aiming for an 80% income replacement ratio is really excessive? Consider that the past three decades have been extremely kind to retirees (2008 aside), who have benefited from strong GDP growth, low inflation, lower taxes, and bull markets in both equities and bonds. That’s undoubtedly helped many of them get by, along with a big boost from Social Security — the largest single source of income for people 65 and older, accounting for 40%.
Future retirees, however, face a very different economy than earlier generations. The problems with funding Social Security are serious. Moreover, given the trillions of dollars in debt being racked up by the U.S. government’s bailout efforts, many economists say higher tax rates are inevitable. Meanwhile, forecasts for economic growth and investment returns are lower.
And then there’s the problem of soaring healthcare costs. A recent study by the Employee Benefit Research Institute found that a typical 65-year-old male retiring in 2009 would need savings of anywhere from $68,000 to $173,000 to cover health insurance premiums and out-of-pocket expenses in order to have a 50-50 chance of affording those bills. To have a 90% chance, you would need to set aside $134,000 to $378,000. Women, who tend to live longer, need even more. The current healthcare reform efforts in Washington may slow the rate of increases, but that remains to be seen.
In the end, 50% or 80% of pre-retirement income targets are only rough rules of thumb. The only way to be sure you’re setting aside enough money for your needs is to draw up a realistic retirement budget — something that only becomes possible when you’re actually closing in retirement. But if you add up the economic challenges ahead, it seems pretty clear that it’s better to set your savings target high rather than low. The consequences (and the likelihood) of saving too much are small, while the consequences of saving too little could be disastrous. And by saving a lot now, we can all learn to live on less, which looks to be good practice for the years ahead.
Skilled immigrants fleeing the U.S.
The ‘brain drain’ is reversing as the recession slashes jobs, opportunities
Now here's a switch. Maybe they will create a thriving industry and they can outsource the customer service to us. By then we'll all be gladly lining up to take an 8.00 per hour job.
By Moira Herbst
http://www.msnbc.msn.com/id/32172403/ns/business-world_business/
And now for some more bad news
Recession's job losses may take years to recoup
Economy may be stuck with high unemployment, weak growth for years
By John W. Schoen
Senior producer
msnbc.com
http://www.msnbc.msn.com/id/32314827/ns/business-eye_on_the_economy/
Sunday, August 9, 2009
Hat tip to Shaza for the research
Aug. 8 (Bloomberg) -- Chinese officials said they will scrutinize gains in stock prices without capping new lending after a record $1.1 trillion of loans in the first half added to credit risks and threatened to cause asset bubbles.
The government wants stock-market stability and is studying share-price rises, Vice Finance Minister Ding Xuedong said at a press briefing in Beijing yesterday. The People’s Bank of China has a range of tools to limit money supply other than controlling the size of lending, Su Ning, a deputy governor of the central bank, told the briefing.
The Shanghai Composite Index has rallied 79 percent in 2009 and real-estate prices have rebounded, fueling concern that loans meant for infrastructure projects are being used for speculation. The government wants to cool asset markets without derailing the recovery of the world’s third-biggest economy, which grew 7.9 percent in the second quarter from a year earlier.
Ding and Su’s comments show the key factor in policy decisions is “economic indicators, not asset markets,” said Gabriel Gondard, a portfolio manager at Fortune SGAM Fund Management Co. in Shanghai, which oversees about $7.2 billion. “Investors could read that as meaning liquidity levels will remain high, at least for now.”
Shanghai’s benchmark stock index closed down 2.9 percent, before the briefing started, for the worst weekly loss since February. The measure fell by the most in eight months on July 29 amid concern that the central bank would rein in liquidity.
‘Fine-tuning Policy’
The government will monitor asset prices and create an “internal mechanism” to stabilize the stock market, the finance ministry’s Ding said, without elaborating.
The government wants stock-market stability and is studying share-price rises, Vice Finance Minister Ding Xuedong said at a press briefing in Beijing yesterday. The People’s Bank of China has a range of tools to limit money supply other than controlling the size of lending, Su Ning, a deputy governor of the central bank, told the briefing.
The Shanghai Composite Index has rallied 79 percent in 2009 and real-estate prices have rebounded, fueling concern that loans meant for infrastructure projects are being used for speculation. The government wants to cool asset markets without derailing the recovery of the world’s third-biggest economy, which grew 7.9 percent in the second quarter from a year earlier.
Ding and Su’s comments show the key factor in policy decisions is “economic indicators, not asset markets,” said Gabriel Gondard, a portfolio manager at Fortune SGAM Fund Management Co. in Shanghai, which oversees about $7.2 billion. “Investors could read that as meaning liquidity levels will remain high, at least for now.”
Shanghai’s benchmark stock index closed down 2.9 percent, before the briefing started, for the worst weekly loss since February. The measure fell by the most in eight months on July 29 amid concern that the central bank would rein in liquidity.
‘Fine-tuning Policy’
The government will monitor asset prices and create an “internal mechanism” to stabilize the stock market, the finance ministry’s Ding said, without elaborating.
Saturday, August 8, 2009
SRS Class Action Lawsuits Start
Submitted by Tyler Durden on 08/06/2009 From Zero Hedge
The SRS Class Action Lawsuits Start
Dow Jones ETFs Exchange Traded Fund REAL SRS Volatility
FOR IMMEDIATE RELEASE: Thursday, August 6, 2009
Labaton Sucharow LLP Files Class Action Lawsuit Against Proshares’ Ultrashort Real Estate Proshares Fund
Labaton Sucharow LLP filed a class action lawsuit on August 5, 2009 in the United States District Court for the Southern District of New York, on behalf of all persons who purchased or otherwise acquired shares in the UltraShort Real Estate ProShares fund (the “SRS Fund”), an exchange-traded fund (“ETF”) offered by ProShares Trust (“ProShares”), pursuant or traceable to ProShares’ false and misleading Registration Statement, Prospectuses, and Statements of Additional Information (collectively, the “Registration Statement”) issued in connection with the SRS Fund’s shares (the “Class”). The Class is seeking to pursue remedies under Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”).
If you bought shares in the SRS Fund pursuant to the Registration Statement and would like to consider serving as lead plaintiff or have any questions about the lawsuit, please contact Stefanie J. Sundel, Esq. of Labaton Sucharow, at 800-321-0476 or (212) 907-0700, or via email at ssundel@labaton.com. Lead Plaintiff motion papers must be filed with the United States District Court for the Southern District of New York no later than October 5, 2009. A Lead Plaintiff is a court-appointed representative for absent class members. You do not need to seek appointment as Lead Plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action.
If you are a member of this class you can view a copy of the complaint and join this class action online at http://www.labaton.com/en/cases/Newly-Filed-Cases.cfm
The complaint names ProShares; ProShare Advisors LLC, SEI Investments Distribution Co., Michael L. Sapir, Louis M. Mayberg, Russell S. Reynolds, III, Michael Wachs, and Simon D. Collier, as defendants (collectively, “Defendants”). ProShares sells its Ultra and UltraShort ETFs as “simple” directional plays. As marketed by ProShares, Ultra ETFs are designed to go up when markets go up; UltraShort ETFs are designed to go up when markets go down. The SRS Fund is one of ProShares’ UltraShort ETFs. The SRS Fund seeks investment results that correspond to twice the inverse (–200%) daily performance of the Dow Jones U.S. Real Estate Index (“DJREI”), which measures the performance of the real estate sector of the U.S. equity market. Accordingly, the SRS Fund is supposed to deliver double the inverse return of the DJREI, which fell approximately 39.2 percent from January 2, 2008 through December 17, 2008, ostensibly creating a profit for investors who anticipated a decline in the U.S. real estate market. In other words, the SRS Fund should have appreciated by 78.4 percent during this period. However, the SRS Fund actually fell approximately 48.2 percent during this period—the antithesis of a directional play.
The complaint alleges the Defendants violated the Securities Act by failing to disclose that the SRS Fund is altogether defective as a directional investment play. Defendants failed to disclose the following risks in the Registration Statement: (1) inverse correlation between the SRS Fund and the DJREI over time would only happen in the rarest of circumstances, and inadvertently if at all; (2) the extent to which performance of the SRS Fund would inevitably diverge from the performance of the DJREI—i.e., the probability, if not certainty, of spectacular tracking error; (3) the severe consequences of high market volatility on the SRS Fund’s investment objective and performance; (4) the severe consequences of inherent path dependency in periods of high market volatility on the SRS Fund’s performance; (5) the role the SRS Fund plays in increasing market volatility, particularly in the last hour of trading; (6) the consequences of the SRS Fund’s daily hedge adjustment always going in the same direction as the movement of the underlying index, notwithstanding that it is an inverse leveraged ETF; (7) the SRS Fund causes dislocations in the stock market; (8) the SRS Fund offers a seemingly straightforward way to obtain desired exposure, but such exposure is not attainable through the SRS Fund.
Plaintiff is represented by the law firm Labaton Sucharow LLP. Labaton Sucharow is one of the country’s premier national law firms that represent institutional and individual investors in class action, complex securities and corporate governance litigation. The firm has been a champion of investor rights for over 40 years and has been recognized for its reputation for excellence by the courts. More information about Labaton Sucharow is available at www.labaton.com.
The SRS Class Action Lawsuits Start
Dow Jones ETFs Exchange Traded Fund REAL SRS Volatility
FOR IMMEDIATE RELEASE: Thursday, August 6, 2009
Labaton Sucharow LLP Files Class Action Lawsuit Against Proshares’ Ultrashort Real Estate Proshares Fund
Labaton Sucharow LLP filed a class action lawsuit on August 5, 2009 in the United States District Court for the Southern District of New York, on behalf of all persons who purchased or otherwise acquired shares in the UltraShort Real Estate ProShares fund (the “SRS Fund”), an exchange-traded fund (“ETF”) offered by ProShares Trust (“ProShares”), pursuant or traceable to ProShares’ false and misleading Registration Statement, Prospectuses, and Statements of Additional Information (collectively, the “Registration Statement”) issued in connection with the SRS Fund’s shares (the “Class”). The Class is seeking to pursue remedies under Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”).
If you bought shares in the SRS Fund pursuant to the Registration Statement and would like to consider serving as lead plaintiff or have any questions about the lawsuit, please contact Stefanie J. Sundel, Esq. of Labaton Sucharow, at 800-321-0476 or (212) 907-0700, or via email at ssundel@labaton.com. Lead Plaintiff motion papers must be filed with the United States District Court for the Southern District of New York no later than October 5, 2009. A Lead Plaintiff is a court-appointed representative for absent class members. You do not need to seek appointment as Lead Plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action.
If you are a member of this class you can view a copy of the complaint and join this class action online at http://www.labaton.com/en/cases/Newly-Filed-Cases.cfm
The complaint names ProShares; ProShare Advisors LLC, SEI Investments Distribution Co., Michael L. Sapir, Louis M. Mayberg, Russell S. Reynolds, III, Michael Wachs, and Simon D. Collier, as defendants (collectively, “Defendants”). ProShares sells its Ultra and UltraShort ETFs as “simple” directional plays. As marketed by ProShares, Ultra ETFs are designed to go up when markets go up; UltraShort ETFs are designed to go up when markets go down. The SRS Fund is one of ProShares’ UltraShort ETFs. The SRS Fund seeks investment results that correspond to twice the inverse (–200%) daily performance of the Dow Jones U.S. Real Estate Index (“DJREI”), which measures the performance of the real estate sector of the U.S. equity market. Accordingly, the SRS Fund is supposed to deliver double the inverse return of the DJREI, which fell approximately 39.2 percent from January 2, 2008 through December 17, 2008, ostensibly creating a profit for investors who anticipated a decline in the U.S. real estate market. In other words, the SRS Fund should have appreciated by 78.4 percent during this period. However, the SRS Fund actually fell approximately 48.2 percent during this period—the antithesis of a directional play.
The complaint alleges the Defendants violated the Securities Act by failing to disclose that the SRS Fund is altogether defective as a directional investment play. Defendants failed to disclose the following risks in the Registration Statement: (1) inverse correlation between the SRS Fund and the DJREI over time would only happen in the rarest of circumstances, and inadvertently if at all; (2) the extent to which performance of the SRS Fund would inevitably diverge from the performance of the DJREI—i.e., the probability, if not certainty, of spectacular tracking error; (3) the severe consequences of high market volatility on the SRS Fund’s investment objective and performance; (4) the severe consequences of inherent path dependency in periods of high market volatility on the SRS Fund’s performance; (5) the role the SRS Fund plays in increasing market volatility, particularly in the last hour of trading; (6) the consequences of the SRS Fund’s daily hedge adjustment always going in the same direction as the movement of the underlying index, notwithstanding that it is an inverse leveraged ETF; (7) the SRS Fund causes dislocations in the stock market; (8) the SRS Fund offers a seemingly straightforward way to obtain desired exposure, but such exposure is not attainable through the SRS Fund.
Plaintiff is represented by the law firm Labaton Sucharow LLP. Labaton Sucharow is one of the country’s premier national law firms that represent institutional and individual investors in class action, complex securities and corporate governance litigation. The firm has been a champion of investor rights for over 40 years and has been recognized for its reputation for excellence by the courts. More information about Labaton Sucharow is available at www.labaton.com.
The Silver guru gives you a new mantra
No one knows more about silver than David Morgan as it is his life's work.
http://www.howestreet.com/audiovideo/index.php?pl=/goldradio/index.php/mediaplayer/1325
http://www.howestreet.com/audiovideo/index.php?pl=/goldradio/index.php/mediaplayer/1325
Friday, August 7, 2009
Shaza’s Podcast of the Day:
Look out below!
DIVIDENDS SET TO FALL LIKE A TON OF BRICKS
BOB HOYE on the unsustainably of current dividend ratios
http://www.howestreet.com/audiovideo/index.php?pl=/goldradio/index.php/mediaplayer/1326
DIVIDENDS SET TO FALL LIKE A TON OF BRICKS
BOB HOYE on the unsustainably of current dividend ratios
http://www.howestreet.com/audiovideo/index.php?pl=/goldradio/index.php/mediaplayer/1326
Shaza’s Podcast of the Day: hat tip Waverider
Central Banks Are Loading Up on the Yellow Metal
http://www.howestreet.com/audio/seanbrodrick_2009_0803.mp3
http://www.uncommonwisdomdaily.com/experts/sean-brodrick/
http://www.howestreet.com/audio/seanbrodrick_2009_0803.mp3
http://www.uncommonwisdomdaily.com/experts/sean-brodrick/
Thursday, August 6, 2009
Shaza’s Podcast of the Day:
High Ho Silver and Bubbles in Big Government!
Known as the Fund Manager’s Fund Manager, Michael O’Higgins also features in Dr Marc Faber’s Gloom Boom Doom Report on occasion and has a brilliant track record for his high net worth clients. In this talk with Eric King, pay special attention to his take on the next bubble: BIG GOVERNMENT! O’Higgins also makes a good case for SILVER at these prices, in fact he likes Silver better than Gold right now. Fancy that!
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/7/31_Michael_OHiggins_files/Michael%20O%27Higgins%2007%3A31%3A2009.mp3
Known as the Fund Manager’s Fund Manager, Michael O’Higgins also features in Dr Marc Faber’s Gloom Boom Doom Report on occasion and has a brilliant track record for his high net worth clients. In this talk with Eric King, pay special attention to his take on the next bubble: BIG GOVERNMENT! O’Higgins also makes a good case for SILVER at these prices, in fact he likes Silver better than Gold right now. Fancy that!
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/7/31_Michael_OHiggins_files/Michael%20O%27Higgins%2007%3A31%3A2009.mp3
Australian employers unexpectedly added workers in July
Aug. 6 (Bloomberg) --Thank you Shaza
Driving up the nation’s currency on speculation the central bank will raise borrowing costs by the end of the year.
The number of people employed rose 32,200 from June, the statistics bureau said in Sydney today. The medianestimate of 18 economists surveyed by Bloomberg was for a decline of 18,000. The jobless rate held at 5.8 percent.
Central bank Governor Glenn Stevens kept the benchmark interest rate at a half-century low of 3 percent this week for a fourth month and signaled his next move may be an increase, saying the economy is “stronger than expected a few month ago.” Woolworths Ltd., the nation’s largest retailer, is among companies hiring to meet demand amid rising consumer confidence.
“It’s another sign of resilience and employers holding on to labor, so it provides some confidence in the future,” said David de Garis, a senior economist at National Australia Bank Ltd. in Sydney. The next move for interest rates “will be up.”
Driving up the nation’s currency on speculation the central bank will raise borrowing costs by the end of the year.
The number of people employed rose 32,200 from June, the statistics bureau said in Sydney today. The medianestimate of 18 economists surveyed by Bloomberg was for a decline of 18,000. The jobless rate held at 5.8 percent.
Central bank Governor Glenn Stevens kept the benchmark interest rate at a half-century low of 3 percent this week for a fourth month and signaled his next move may be an increase, saying the economy is “stronger than expected a few month ago.” Woolworths Ltd., the nation’s largest retailer, is among companies hiring to meet demand amid rising consumer confidence.
“It’s another sign of resilience and employers holding on to labor, so it provides some confidence in the future,” said David de Garis, a senior economist at National Australia Bank Ltd. in Sydney. The next move for interest rates “will be up.”
Wednesday, August 5, 2009
Tuesday, August 4, 2009
SHAZA’S PODCAST PICK OF THE DAY
Shaza: If you have not found your way to King World News you should explore the site for metals content, it is excellent. Eric King runs the site and does a very good job of interviewing a pretty great line up of guests. I will post the 2nd half of Mauldin’s interview next week. In this interview John discusses rumours of economic recovery, earnings comparisons, unemployment, U.S. savings rates, expected stock market returns, compressed valuations, deflation, inflation, real estate, derivatives and much more.
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/7/31_John_Mauldin__Part_I_files/Part%201%20John%20Mauldin%2007%3A31%3A2009.mp3
Monday, August 3, 2009
GDX and GLD Charts Courtesy of Shaza
GDX has been performing well lately. The chart below shows that the Gold Miner’s Index is looking very tasty!
· GDX is in the upper band of its trading channel. If the upper channel is taken out the miners will go much higher...
· You can even drop the Macro, this is a good trade even if they mined mud imo
· Bob Hoye and Faber both like gold too. Hoye is forecasting a big party in the Gold Miners by next year!
GLD ETF
· Friday saw GLD have a little pop
· But it has been trending sideways for weeks...and years....
· For weeks GLD has been moving a dollar or so sideways. This is a virtual standstill at its current price.
· GLD MAY be moving from BORING to BOLD
· A new inverse shoulder has formed, check out the higher right shoulder
Once GLD hits above 94 I am considering buying, but GDX has a lot more appeal from here!
· GDX is in the upper band of its trading channel. If the upper channel is taken out the miners will go much higher...
· You can even drop the Macro, this is a good trade even if they mined mud imo
· Bob Hoye and Faber both like gold too. Hoye is forecasting a big party in the Gold Miners by next year!
GLD ETF
· Friday saw GLD have a little pop
· But it has been trending sideways for weeks...and years....
· For weeks GLD has been moving a dollar or so sideways. This is a virtual standstill at its current price.
· GLD MAY be moving from BORING to BOLD
· A new inverse shoulder has formed, check out the higher right shoulder
Once GLD hits above 94 I am considering buying, but GDX has a lot more appeal from here!
Dmitry Orlav
There is a short version 10 minutes and a full version almost 90 minutes with a Q&A at the end. What he does is compare the collapse of the Soviet Union to what is going on in the U.S. Hat Tip to Louis for sharing this with me.
I just threw this in for thought as it is way off the topic of this website. More of a Jim Kuntsler viewpoint. I had nothing else to do on a Saturday and listened to the long version.
I just threw this in for thought as it is way off the topic of this website. More of a Jim Kuntsler viewpoint. I had nothing else to do on a Saturday and listened to the long version.
Sunday, August 2, 2009
SHAZA’S PODCAST OF THE DAY
From Kingworldnews.com
In this riveting interview Congressman Stearns discusses his tough questioning of Former U.S. Treasury Secretary Henry Paulson, we also talk about former Wall Street executives joining government in order to avoid paying taxes on their gains and much more.
Congressman Cliff Stearns is on the Subcommittee on Oversight & Investigations, as well as the Chairman of the Subcommittee on Commerce, Trade, and Consumer Protection. Congressman Stearns’ top issues are Consumer Protection, Veterans Affairs, Social Security, Telecommunications/Internet and the Energy Policy.
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/7/31_Congressman_Cliff_Stearns.html
BUBBLES IN GOVERNMNET DEBT, BUBBLES IN EQUITIES!!!
Dr. Marc Faber says that the apex of the crisis could be 5 years off with all the stimulus being thrown at the markets. Be careful if you are betting on a sinking equities market! Enjoy the view....Brought to us by Shaza
Saturday, August 1, 2009
This is a good reason why CNBC is BS and a waste of time
Everyone screaming over everyone else and KD cannot get his point across.
At least KD can respond in a reasonable video and why he is the best on the web.
At least KD can respond in a reasonable video and why he is the best on the web.
my opinion on gold
Why does this 50.00 dollar gold coin sell for 1000.00 in Federal Reserve notes? The only reason I can come up with is that 1000.00 FRN is only worth 50.00. That means you need twenty 50.00 bills to buy one ounce of gold. I find that many people think that gold is a relic of the old days and others see it as real money or a storage of wealth. Some see it as an investment to be traded like oil, soybeans and cotton. I am in the storage of wealth camp. I see gold as a neutral entity and that the price fluctuates based on the value of paper currency you use. In other words the price of gold moves up and down based on the value of the paper money you utilize daily. When the dollar goes down the price to buy gold goes up. When the dollar goes up the price to buy gold goes down.
I believe we will never go back to a gold standard where all paper money is backed by gold in some holding bank. It is just not going to happen. Some Austrian economists may think this is possible, but IMHO it is not.
There is not enough gold on the planet to back up all the bizarre financial instruments that are now floating around the world. Although some "Gold Bugs" would like to think that gold will rocket to thousands of dollars an ounce, I find that to be wishful thinking. Nevertheless I am a big advocate of holding 10-20% of your wealth in precious metals and taking possession of them. I do not like paper gold or ETFs like GLD, but I do like well run mining companies.
So the short and sweet of it is IMO gold is money. Throughout history it always has been and always will be. For me it is a storage of my wealth and is a part of my investment portfolio, but not all of it. Not only that, but if you have never actually seen gold, it is a thing of beauty. Paper money is boring. I like silver too, but for different reasons and that is another post.
My present holdings are 10 ounces of gold and 100 ounces of silver. My long term goal in 50 ounces of gold and 250 ounces of silver. In todays world that is not a lot of money. As long as the government does not confiscate my safety deposit box at the bank, I think it will be safe. Opinions are welcome.
SHAZA’S PODCAST OF THE DAY
Congress has been arguing for months now about the best ways to overhaul the American system of financial regulation. It's a tough conversation, because regulation can be bad in a couple of ways.
First, regulation can be ineffective, in which case it fails to prevent the outcomes it was designed to block or causes more problems than it solves. Second, regulation can overreach, in which case it stifles financial innovation.
After newfangled financial products nearly brought down the global economy last fall, you might think it's not so bad to stifle financial innovation. But financial innovation has also led to prosperity. Atlantic writer Mike Konczal and Columbia Business School economist Charles Calomiris argue the case for (and against) Wall Street creativity.
http://www.npr.org/blogs/money/2009/07/hear_the_pros_and_cons_of_fina.html
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