Morning Call [7:13am ET] Batten down the hatches, tighten up your stops; the S&P 1200 Global Index has turned south. The negative longer-term cycle is picking up speed as the $USD strengthens, potentially signaling a major trend change.
The following charts show that the price of the S&P Global index failed to break out above the 50-day Moving Average and has turned down whereas the S&P 500 US index is still nudging up to the declining 50d MA.
S&P 1200 index
S&P 500 index
Whether you should be tending to buy US or foreign shares is really a factor of whether the US Dollar is rising or falling against a basket of global currencies.
The following chart shows the 5-year Performance chart of iShares S&P Global 100 (NYSE:IOO) vs S&P 500. Clearly there are times when the S&P 500 US index is rising faster or falling faster than the Global index. The chart after this one shows how the $USD is a major factor.
The Global 1200 index rises faster than the S&P 500 US index when the $USD is falling. Also, both indexes tend to rise when the $USD is falling.
When the $USD rises, both indexes tend to fall, and the Global 1200 index falls faster than the S&P 500. You can see that in both the following charts, one from November 2008 and the other in recent days.
Yesterday in giving testimony to Congress, Fed chairman Ben Bernanke was repeatedly asked questions where a particular conclusion was implied, but he continued to point out that there would be trade-offs. So, if you want a stronger Dollar, you are going to have to suffer pain in lower equity prices. If you want a weaker Dollar, you may have rising equity prices, but you will soon have an inflation problem. The key determinant in all this is how much money does the Fed and other central bankers print.
At least you ought to be aware that there are times when the trend in the Dollar affects rising or falling equity prices and in particular whether those prices are US equities or non-US.
Have a great day.
CTA Trading Desk Post-Close Report
Volume and volatility returned Thursday as a rotten US jobless claims number greased the skids on the downside, sellers entering the market, pummeling prices all morning long. But as so often has been the case over the past year, the Bears could not seal the deal, inviting short covering and bargain hunting, bidders chasing prices into the close (SPX -0.21%).
What happened today?
• The S&P broke initial support at 1095, on heavy volume, with go-go high beat favorites Amazon, Apple, and Google on the ropes.
• Sellers were unable to push prices down quite far enough to hit mega support at 1080.
• When selling dried up, rumors that Apple (AAPL +0.67%) was going to split its stock four to one made the rounds on the Street coinciding with Steve Jobs making a public presentation, igniting a huge rally in the technology sector.
• The close should give the Bulls some comfort, as prices initially knifed through support only to finish near unchanged for the session, forming one large hammer on the candlestick chart. The action has to be respected regardless of your fundamental outlook.
• The US Dollar is showing signs of tiring, and each time it has sold off intra-day stock futures have quickly spurted higher. Goldminers (GDX +2.91%) was the first industry group to move higher this morning, well before the selling abated in the broad market.
We are moving into the seasonally strong end of the month period, while also nearing the one year anniversary for the market bottom. The powers that be have a vested interest (getting re-elected this fall) in higher asset prices; if home prices and stock prices float upward, consumers begin to spend, businesses will begin to hire, and a more confident and content voting populace will be inclined to pull the lever for the incumbents.
Bottom line for traders -- today’s price action may be significant, as the Bears for whatever reason appear to lack the ammunition to drive prices lower. The S&P needs to close below 1080 for confirmation of a new down trend, and until that happens, be prepared for prices to move higher over the next few days.
Have a great evening.
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Comments
gold
So, gold may trend sideway at best..
Inflation in hockey
The year I graduated from undergrad business school (1967), Bobby Orr was the world's most famous hockey player. His league highest salary then was $35,000. Last night, the Canadian and Russian Olympic hockey teams faced off. At any one time on the ice, six players a side, I doubt the combined salaries were less than $35 million. At times it was close to $45 million. It was mind-boggling to see so many 9 million dollar players playing in one tournament game. Best against the best -- at least in payroll -- Canada won 7-3. The first period, with Canada up 4-1, was probably the most highly skilled hockey ever played by any team against an equal opponent.
Great entertainment. The Russian goaltender probably said it best: "They came at us like gorillas coming out of a cage".
http://olympics.thestar.com/2010/article/771153--c...
http://olympics.thestar.com/2010/article/771236--c...
Cara 100 Ratings Changes
Good morning.
BRCM - JP Morgan Initiates Coverage with an Overweight. PT = $38
GOOG - MKM Partners Initiates Coverage with a Neutral.
Bill,
Do you believe there would be any bias, on the part of the FDA, toward Canadian drug companies, in regard to US approval ? ( ie: BVF, CRME, etc... )..
gold ihs
someone asked the other day if there was any set up to be confident in the completion of an Inverted head and shoulders pattern.
For years my answer has been yes, today? well we shall see but the same set up is forming.
1.price breaks out of a definative downtrend and rises to prior resistence.
2.price falls to test that downtrend completing a healthy retrace and higher low.
3.a right shoulder is formed as price retraces to the downtrend,fib levels and consolidates
4.everyone and their brother says we are going down
5 price breaks upward surprising all
Who knows anything can happen
China Buys IMF Gold
It appears another major leg up in gold is in order, similar to what we saw soon after India purchased 200 tonnes of IMF gold in 2009.
“Chinese officials have confirmed previous announcements from IMF experts and said that the purchasing of 191 tons of gold would not exert negative influence on the world market. China is interested in the development of the domestic consumer market,” the agency reports.
http://tinyurl.com/yalplgf
PALM
watching to see what RSI 7 day is at the open.
March max pain is 11.
No position.
Do your own homework.
GL
Update: Long at 6.62. Sell limit 50 DEMA.
Sell stop limit 6.
Do your own homework.
GL
Cara 100 Update
GRMN - estimates, target increased at Government Sachs. Shares of GRMN now seen reaching $29. Estimates also raised, because of improving margins and lower taxes. Sell rating.
NKE - added to Conviction Buy List at Government Sachs. NKE was added to the Conviction Buy list. Company should soon return to better sales and earnings growth. Buy rating and $78 price target.
Re: China Buys IMF Gold
I worry when anyone talks their book.
GS at it's finest...meaning US taxpayers will pay GS via AIG
NEW YORK TIMES
Banks Bet Greece Defaults on Debt They Helped Hide
Bets by some of the same banks that helped Greece shroud its mounting debts may actually now be pushing the nation closer to the brink of financial ruin.
Echoing the kind of trades that nearly toppled the American International Group, the increasingly popular insurance against the risk of a Greek default is making it harder for Athens to raise the money it needs to pay its bills, according to traders and money managers.
These contracts, known as credit-default swaps, effectively let banks and hedge funds wager on the financial equivalent of a four-alarm fire: a default by a company or, in the case of Greece, an entire country. If Greece reneges on its debts, traders who own these swaps stand to profit.
“It’s like buying fire insurance on your neighbor’s house — you create an incentive to burn down the house,” said Philip Gisdakis, head of credit strategy at UniCredit in Munich.
As Greece’s financial condition has worsened, undermining the euro, the role of Goldman Sachs and other major banks in masking the true extent of the country’s problems has drawn criticism from European leaders. But even before that issue became apparent, a little-known company backed by Goldman, JP Morgan Chase and about a dozen other banks had created an index that enabled market players to bet on whether Greece and other European nations would go bust.
Last September, the company, the Markit Group of London, introduced the iTraxx SovX Western Europe index, which is based on such swaps and let traders gamble on Greece shortly before the crisis. Such derivatives have assumed an outsize role in Europe’s debt crisis, as traders focus on their daily gyrations.
A result, some traders say, is a vicious circle. As banks and others rush into these swaps, the cost of insuring Greece’s debt rises. Alarmed by that bearish signal, bond investors then shun Greek bonds, making it harder for the country to borrow. That, in turn, adds to the anxiety — and the whole thing starts over again.
On trading desks, there is fierce debate over what exactly is behind Greece’s recent troubles. Some traders say swaps have made the problem worse, while others say Greece’s deteriorating finances are to blame.
"This is a country that is issuing paper into a weakening market,” said Ashish Shah, co-head of credit strategy at Barclays Capital, referring to Greece’s need for continual borrowing.
But while some European leaders have blamed financial speculators in general for worsening the crisis, the French finance minister, Christine Lagarde, last week singled out credit-default swaps. Ms. Lagarde said a few players dominated this arena, which she said needed tighter regulation.
Trading in Markit’s sovereign credit derivative index soared this year, helping to drive up the cost of insuring Greek debt, and, in turn, what Athens must pay to borrow money. The cost of insuring $10 million of Greek bonds, for instance, rose to more than $400,000 in February, up from $282,000 in early January.
On several days in late January and early February, as demand for swaps protection soared, investors in Greek bonds fled the market, raising doubts about whether Greece could find buyers for coming bond offerings.
“It’s the blind leading the blind,” said Sylvain R. Raynes, an expert in structured finance at R&R Consulting in New York. “The iTraxx SovX did not create the situation, but it has exacerbated it.”
The Markit index is made up of the 15 most heavily traded credit-default swaps in Europe and covers other troubled economies like Portugal and Spain. And as worries about those countries’ debts moved markets around the world in February, trading in the index exploded.
In February, demand for such index contracts hit $109.3 billion, up from $52.9 billion in January. Markit collects a flat fee by licensing brokers to trade the index.
European banks including the Swiss giants Credit Suisse and UBS, France’s Société Générale and BNP Paribas and Deutsche Bank of Germany have been among the heaviest buyers of swaps insurance, according to traders and bankers who asked for anonymity because they were not authorized to comment publicly.
That is because those countries are the most exposed. French banks hold $75.4 billion worth of Greek debt, followed by Swiss institutions, at $64 billion, according to the Bank for International Settlements. German banks’ exposure stands at $43.2 billion.
Trading in credit-default swaps linked only to Greek debt has also surged, but is still smaller than the country’s actual debt load of $300 billion. The overall amount of insurance on Greek debt hit $85 billion in February, up from $38 billion a year ago, according to the Depository Trust and Clearing Corporation, which tracks swaps trading.
Markit says its index is a tool for traders, rather than a market driver.
In a statement, Markit said its index was started to satisfy market demand, and had improved the ability of traders to hedge their risks. The index and similar products, it added, actually make it easier for buyers and sellers to gauge prices for instruments that are traded among players over the counter, rather than on exchanges.
“These indices have helped bring transparency to the sovereign C.D.S. market,” Markit said. “Prior to their creation, there was no established benchmark index enabling investors to track the performance of segments of the sovereign C.D.S. market.”
Some money managers say trading in Greek swaps alone, not the broader index, is the problem.
“It’s like the tail wagging the dog,” said Markus Krygier, senior portfolio manager at Amundi Asset Management in London, which has $40 billion in global fixed-income assets. “There is a knock-on effect, as underlying positions begin to seem riskier, triggering risk models and forcing portfolio managers to sell Greek bonds.”
If that sounds familiar, it should. Critics of these instruments contend swaps contributed to the fall of Lehman Brothers. But until recently, there was little demand for insurance on government debt. The possibility that a developed country could default on its obligations seemed remote.
As a result, many foreign banks that held Greek bonds or entered into other financial transactions with the government did not hedge against the risk of a default. Now, they are scrambling for insurance.
“Greece is not a small country,” said Mr. Raynes, at R&R in New York. “Credit-default swaps give the illusion of safety but actually increase systemic risk.”
GME
Added to position to bring average down to $17.69. Probably should wait for confirmation of 2nd kangaroo tail reversal...
SPXU
out for 5% profit.
In on 2/19 and yesterday.
Re: bias, on the part of the FDA, toward Canadian drug companies
baz22,
I haven't seen any of that.
Biovail (BVF) reported positive quarter with earnings and revenues well above consensus estimates, but the market is getting hammered today, and fwd guidance was only lukewarm.
From Russia with love
The Red Machine Runs into a Maple Tree
http://english.pravda.ru/photo/report/canada_russi...
WSJ: Fidelity Fires Two Fund Managers
By ELLEN SHENG
HONG KONG -- Fidelity International said Thursday it fired two Hong Kong-based fund managers for breaching the company's internal code of ethics and for putting "their personal interests ahead of those of the company."
The two managers oversaw combined funds of about US$7.3 billion. Chang mainly oversaw Fidelity's institutional Southeast Asia fund and institutional Asia-Pacific fund, while Wong mainly oversaw Fidelity's Greater China fund and Asia Equity fund.
http://tinyurl.com/ydlks2o
Blocking 'Botnet" network
Perhaps you are one of the victims of "denial of service" attacks which flood legitimate Web sites with traffic from thousands of computers.
Interesting move in the world of cyber security challenges.
Microsoft Wins Court Order to Block 'Botnet' Network
http://tinyurl.com/yfwr8n3
The four knights on Nasdaq
GOOG - has set a new low for the year today
RIMM - is having trouble surpassing 72 and just loves big gaps
AAPL - does not seem to attract buyers anymore
MSFT - ?
NLS
Sold 60% of my holding at $3.4 that I bought at $2.34. It was/is a very large holding of mine and given what looks like a turn for the worse in the markets, I don't feel comfortable being long a lot of a small cap company.
Cara 100 Update (Final)
INTC - RBC Initiates Coverage with an Outperform. PT = $26
Re: GME
added to position. Ave cost 17.92.
Watch 17.48. If it breaks and holds above that opening price level, the bears will cover and the bulls will chase.
JMO. Do your own homework.
Re: NLS
Completely sold out of NLS at $3.4. Most likely way too earlier but I'm not comfortable with the risk in this position...also noticed what might be a inverse Kangaroo Tail Reversal.
Big Numbers For Newmont Mining
Newmont earned $558 million, or $1.13 per share, compared with $4 million, or a penny a share, during the same period last year.
Adjusted profit was $1.14 per share, easily beating the 79 cents-per-share estimate of analysts surveyed by Thomson Reuters. These estimates normally remove one-time items.
Revenue for the three months ended Dec. 31 jumped 90 percent to $2.52 billion from $1.33 billion.
This beat Wall Street's $2.02 billion.
http://tinyurl.com/yznw6ys
This Tape feels Funny.
I see a real disconnect between indexes and my watch lists. Large cap quality stocks all down. My small cap high beta crap stocks are holding up. Many are green. I see melt up or a reversal towards green coming.
Winds of change...
continued 2010 sales, service agreements... British orders, parlay into surrounding countries... sitting on $ 120 M. cash... good PEG.. see no resolution in foreign conflict... started new position.. FRPT
do you own ventana gold or greystar?
If so, Otto has news for you, today's lead story:
http://incakolanews.blogspot.com/
Pres. Uribe's brother has been arrested (again) for ties to paramilitary death squads in Northern Santander province of Colombia, where Ventana and Greystar deposits are located.
Paramilitaries are a real risk to these companies, which none of the Canadian brokerages who cover them are reporting on.
Re: China Buys IMF Gold
I tried to think of more bizarre way to post the development if it indeed were a real one, and couldn't. Judge for yourself:
Thursday, February 25, 2010 11:12:29 AM
Spot gold firms on chatter that China has stated interest in buying next scheduled rould of IMF gold sales
- source is an English language Russian news website citing Russia's Interfax as stating China
***Reminder: India Central Bank has previously indicated interest in the second leg of IMF gold sales. On 02/17/2010 the IMF said it will shortly begin market sales for remaining 191 tons of gold; To start selling up to $7B of gold to market
- Note: On 2/23 the China gold association commented that China would not purchase IMF gold as it may upset the markets; would continue purchasing gold mines internationally in efforts to grow gold reserves
Re: China Buys IMF Gold
Besides maybe the obvious, thoughts on why IMF is selling ( although it clearly indicated last year that it would be doing just this thing ).... Thanks, Vad...
Re: China Buys IMF Gold
On second thought... would a website/newspaper named Pravda ever lie to you?
Re: China Buys IMF Gold
Hmmmm... heard it was Khodorkovsky's favorite daily read...
Re: This Tape feels boring.
A second thought. I'm going fishing. Good luck all
Bob
Bill, is DG available on the RSI Tool ?
Thank you...
Re: gold ihs
You might be into something. Action in SLV is very impressive today. I'm glad I did not stopped out this AM as it was a major headfake.
Dr Cosa
They can print all they want, but they can't print gold.
7 Year note auction
Can anyone comment on how the 7 yr auction went? If China isnt buying IMF gold, did the auction look like "monetization" to anyone?
Quick setup example
Since it's slow and market is locked within a narrow range, thought I'd share another setup example that just unfolded (don't you like them when they are fresh.) Readers of TTR and conference attendees will recognize it immediately
Re: 7 Year note auction
CNBC at noon:
Rick Santelli said, "I'd really like to know who the buyers are today."
Steve Liesman immediately jumped in saying it didn't matter. Santelli never got back to it since three or four other talking heads managed to run out the clock.
Happens all too often.
But Bernanke already told us they were not going to monetize. So I guess that's out of the realm of possibility ;-)
Got volatility?
Averaged down at the close yesterday on my March SPY 109 put holdings and traded it today with a limit order of 2.15 (average cost 1.80). Come back from lunch and they are now going for like $1.68. Close call - wild market and some theta burn and the casino takes your money. Easy to see how you can lose on these things, but for today I'm happy to be the blind squirrel that found a nut...
KC
Filed under the ' You can't Make This Stuff Up ' section...
CNBC reports that market is coming off the days lows " due to talk of a 4 for 1 split in Apple stock "... just imagine if Google announced a 8 for 1 split... heck, the market would go up 2,000 points..
More On China's IMF Gold Purchase
A few interesting comments...
"Today’s announcement by the Chinese government that they plan to buy the remaining 191 tonnes of IMF gold (if it even exists) is possibly the most important event in the ten-year gold bull market, and perhaps could turn out to be the inflection point from when the public believes the propaganda about gold and starts to disbelieve, yielding the commencement of the latter stages of the PM bull and the early stages of American economic, political, and social chaos.
China is the only entity on earth with the financial backing to take on the U.S.-government led gold Cartel, with the ability at literally any moment to take them out and cause the price to soar to unimaginable levels. Until now, they have been very coy about their statements about gold, as given their huge hoard of roughly $2.5 trillion dollars (largely held in U.S. Treasuries), they are very concerned about a dollar (and frankly all fiat currency) crash."
http://tinyurl.com/yelhqzc
CAR
Setting up for a Kangaroo Tail Reversal.
FD:
No position yet.
Re: CAR & HTZ
Bought CAR at $9.75. Capitulation play. RSI 7 at 25.
Bought HTZ at $9.31. Also a capitulation play. RSI 7 at 21.
I am linking today's blog post to another blogger...
As this mornings education on the S&P Global index is something I appreciated very much.
Thanks again Bill. You may have some more newcomers shortly.
Re: CAR & HTZ
FWIW.
I'm not sure who can take credit for it but I'm using the RSI 7 day under 10 to define capitulation. I also like to see some multiple of average volume. There's way too much room between RSI 30 and 10.
JMO.
GL
Obama May Prohibit Home-Loan Foreclosures Without HAMP Review
Link: http://bit.ly/a8R5Y3.
Awesome news. we call can stop paying our mortgages!
Re: More On China's IMF Gold Purchase
That article is pure propaganda. Gold bugs are a special kind of freaks, thinking everybody else is going to be poor as only they will get rich.
Hopelessly perplexed
Does anyone other than Bill understand what is going on today? This action today is as mysterious as the Holy Trinity to me. The problem is that Bill is the only one I have any faith in.
I feel like this blog is a soup kitchen and I'm a homeless person who comes daily for sustenance, peace and warmth.
Thanks for all you do, Bill and thanks to all the excellent posters here for sharing their skill with a wetback like me. It is most deeply appreciated - especially on days like today.
Re: Inflation in hockey
Regarding sports, this article from a few years back references what may be the best sports related business deal of all time......
A quick deal brings a lifetime of cash
The purchase of a struggling American Basketball Association team in the late '70s continues to pay off for Ozzie Silna.
By ASSOCIATED PRESS
Published June 3, 2006
http://tinyurl.com/yhsdddo
Re: Obama May Prohibit Home-Loan Foreclosures Without HAMP ...
One problem with this theory: Nobody is policing the banks. They write nice letters saying they observed the rules. When in fact, a former homeowner I know was foreclosed while their modification request was sitting on the lender's desk. They received a letter to their attorney later stating they were denied modification. The application had not even been reviewed. The Trustee simply refused to look at it. HAMP is a farce.
DNB
MACD divergence. 3pm price 70.14. Added 5% of 10 day ATR for target price of 70.20.
Long @ 70.20.
March max pain 80.
Do your own homework.
GL
EOM effect
kicking in?
China purchase of IMF Gold ...
Sets new floor around $1,100. I may eat my words, but India's IMF purchase did same around $1,000. Gotta love central banks' confirmation of the secular trend.
Re: CAR & HTZ
bsi,
I went long on HRB @ 17.08. Reasons:
- RSI7 at 8 when I bought
- Volume was decent (more than average)
This tends to be one of the most comfortable plays I get into. I be setting a stop limit sell order on this at 16.91 (1% below purchase and enough wiggle room under today's close) for tomorrow.
I was wondering
(1)what do you look for in terms of volume?
(2)do you use the ATR ?
(3)does the VWAP tell you anything?
How do you locate your plays? I scan the S&P 500 lists...
thanks,
JTP
Re: More On China's IMF Gold Purchase
"That article is pure propaganda."
ballena, if you think that article is suspect, then have a look at any headline news item or government statistic to see some real .9999 purity propaganda!
Cheers
Nice post
by Tim Knight at Slope of Hope- explains a lot of fib stuff taking a close look at the S&P and todays action. A really nice read.
http://tinyurl.com/yhwe4ct
Re: More On China's IMF Gold Purchase
"That article is pure propaganda. Gold bugs are a special kind of freaks, thinking everybody else is going to be poor as only they will get rich."
The propaganda is over at the Federal Reserve and its puppets in Congress. Gold is rising while, today, the deflation trade tanks all other hard assets. Looks like that Russian propaganda has legs.
Got any logic, proof, theory, anything to support your disdain for owners of gold? Are you wiser than "freaks" like Soros, Paulson, Tudor Jones, GLD etf investors, India, Sri Lanka, Barrick (covering its mammoth hedge book), Russia, Cambodia, Middle East, Chinese and Indian populations, hedge fund managers?
Stay thirsty my friend.
Re: do you own ventana gold or greystar? - correction
The Uribe arrested for ties to para-military death squads is COUSIN not brother of President Uribe. Still, a member of Pres. Uribe's inner circle, and leader of the Senate from 2000-2001.
Uribe gets such a free pass from the US media, while Chavez and Morales are demonized. It's not quite that simple!
Re: More On China's IMF Gold Purchase
Well, you show a disdain for anyone that thinks gold is a good investment by labelling them.
That is pretty much an extention of racism as far as I see it or just plain naive.
The fact is they have been right for 10 yrs now which is a pretty significant % of ones investment lifetime.
From 250 to 1100with gold or 35 to 400 with the gold shares against spx 1500 to 1100 over the past ten years.It doesn't take much to see you are sour grapes. The market is what is is and you have and continue to miss one of the biggest bull markets going because you choose to label or have preconceptions about a persons freak stature. lol that is hilarious.
Good luck with that.
They have been getting rich while you have been getting poorer, look at the data it is cut and dried.
Re: More On China's IMF Gold Purchase
tbar - racism? Really???
So let me get this straight. You object to him labeling gold bugs as freaks, so your response is to label him a racist!! Apart from the descent into un-gentlemanly behavior, the racist label is definitely perplexing to me. It makes no sense.
I agree with your factual statements, of course, they are unassailable. 400% gain in 10 years, a very nice gain. It speaks for itself. Perhaps we should just stick to that, and retain the moral high ground?
Re: CAR & HTZ
1)what do you look for in terms of volume?
I like to see ave daily volume of 300k or more so it's liquid. And I like to see 3X or better on a sell off.
(2)do you use the ATR?
Yep, it's indispensable to my trading. Tells me how volatile the stock is and helps determine position size and entry points.
3)does the VWAP tell you anything?
Don't use it. Sorry.
4)How do you locate your plays?
I have a series of RSI scans I look at including all the stocks in the SP500. I look at the daily lows list in Yahoo by 10AM. I also look at this site.
http://rsi-trader.blogspot.com/
GL
Social Mood Article Using Historical Cycles
http://theburningplatform.com/economy/21st-century...
Crazy or prescient? A long read but worth contemplation.
Re: More On China's IMF Gold Purchase
Not that I think the word "racism" has any business in the discussion at all, but isn't it about time the "PAPERBUGS" of the world were taught the lesson of a lifetime?
Go back to the days of Voltaire, the French Revolution and the Continental Congress... What was Voltaire's quote on the value of paper money?
I bet it took the lifetime of a generation before anyone attempted to con people out of their earnings, savings and wealth with paper money again.
Its been 300 years, and all we can show for it is that we've forgotten all that our forefathers learned so painfully on the subject.
Post-close report is up
Also, the new Cara 100 (Feb 26 edition) will be uploaded soon.
Re: More On China's IMF Gold Purchase
cheapy
Couldn't find the Voltaire quote on money but did find these:
"The art of government is to make two-thirds of a nation pay all it possibly can pay for the benefit of the other third."
"In general, the art of government consists of taking as much money as possible from one class of citizens to give to another."
Looks like a duck and walks like a duck!
Re: More On China's IMF Gold Purchase
i've been reading this blog for years, have only posted once before, and manage money professionally.
i know a lot of gold bugs, and own some gold for myself and clients. but it's almost like a religion with some people. gold could go back to 250 and all the bugs would say is fiat! and ... manipulation!
so... to respond to these comments about gold quadrupling since 2000 and the SP500 losing whatever percentage... congratulations. you made some money. but take a look at the longer time frame of the last 25 years. gold has done nothing while the equity markets are up over 1000 percent. some very safe companies like MO, KO, PG... are up over 4000 percent.
maybe sour grapes on your part because back in 1982 you were buying 50 dollar silver and not PG?
just pointing at a bunch of hedge fund managers and saying "look how dumb you are for not following the leader! sour grapes!" adds nothing to the discourse.
i can almost assure gold will not be the best performing "sector" over the next 10 years for one simple reason - way too many people are fervently religious it will be.
my bets are on investments that will actually improve the lives of humans - tech and healthcare. not a shiny metal that serves no industrial purpose whatsoever besides fodder for chatrooms.
long quality / short hype
Re: CAR & HTZ
bsi87- thanks for sharing that RSI site link. I've had a hard time using various "screeners" to come up with my own ideas- That site is a good place to start- on the long side or short side...
US equities on a hot streak...
Canadian investor perspective...
Like others here, I saw only death on the charts before today's open. I'm digging deeper tonight trying to understand these weird markets...
US equities(via index etfs), in the long-term core of my portfolio, are blisteringly hot. For eight straight days they are up (see first link), outperforming the remainder of my core in 7 of those days. Yah, yah - the US$ is strong but it's all behaving differently from July 2008-March 2009; equities aren't free-falling (yet). This has been a none too infrequent occurance since Dec. 1, 2009, which was certainly a 180-degree shift from the preceding 8 years. Top it off with a big day on the TSX today and these are really curious times. Weak Asia/Europe/Developing equities and no safe haven in European bonds (and no great appeal for cash) is certainly helping the NAFTA region, on a relative basis. Interesting flow of funds. Is there anyone out there in the global community who's eyeing that higher low(july 2008, dec 2009) in US$ (see link) and wondering if we might have a major primary trend change forthcoming? Or is this just what happens when the media calls the rest of the world PIIGS or makes them prostrate themselves before congress in supplication? Last night, after watching that farce, I actually found myself thinking about MacArthur aboard the Missouri 65 years ago...
US Equity for Canadians: http://tinyurl.com/ybg4cv2
TSX(note volume today): http://tinyurl.com/y8gsvur
US$: http://tinyurl.com/y9ocmsd
MacArthur : http://tinyurl.com/ych3ukq
Re: Winds of change...
left out the part about the Army will, from indications, phase out the Hum-v this year... There is room for multiple supply sources. I also like the cost controls at FRPT... its a quirky one, for sure, but much more corporate solid, than when they traded at $ 25.00..... anyway, dyod..
New Gold Fund
Sprott's new closed end gold fund, PHYS, is supposed to be closing tonight.
It will hold gold bullion at the Royal Canadian Mint and redemptions can be physical gold bars (the big ones)
or USD. The gold will be segregated at the mint. No paper gold or leasing,etc.
Maybe this fund will take share from GLD as it appears to be more sound and the expense ratio is lower.
I think the price is $10 share for the opening transaction.
Re: More On China's IMF Gold Purchase
“All paper money eventually returns to its intrinsic value – ZERO” - Voltaire 1729
To quote the article I grabbed it from appropriately titled - "No country has ever abolished poverty by printing paper"
WHAT MAKES THESE PEOPLE TODAY THINK THEY ARE ANY DIFFERENT OR CAN GET AWAY WITH IT???
Have we learned NOTHING about economics in 300 years to be fooled by the same con job again? The author speaks with a lot more authority and knowledge than I:
http://matterhornassetmanagement.com/2009/06/04/no...
Greece Delays Bond Offering
FEBRUARY 25, 2010, 7:09 P.M. ET
http://bit.ly/bptsfn
Who would in their right mind, buy Greek bonds? oh yeh, us, through GS.
Check out the video lower left.
" Absolutely stunning ".....
per Bill Fleckenstein: ... Newmonts numbers were absolutely stunning. More important, was the cash-flow numbers, that demostrate the leveraged earning power of metals at these prices. Newmont's margins expanded over Twice the rate of the rise in the gold price in 2009. The company earned over $ 1.00 per share, and over $ 2.00 per share in cash-flow. At ( roughly ) 6 times annualized cash flow and 10 times earnings, its valuation is not what one would consider bubble-like ' ......
Re: More On China's IMF Gold Purchase
didn't voltaire also say ... "I die adoring God, loving my friends, not hating my enemies, and detesting superstition."
gold is superstition. my wife grew up in southern russia. her grandmother's house was occupied by the germans during their push to stalingrad. at the time, a pair of diamond earrings was worth a loaf of bread.
so what is the intrinsic value of gold? 1100 dollars? or a loaf of bread?
looking at the economics and markets of the early 18th century has some value, but very little. voltaire was a philosopher, not a trader. i look to carnegie, rockefeller, and morgan (who all coincidentally made their fortunes from "paper" assets) as historical perspectives.
people think things are different now versus 300 years ago, because, well, they are different. i understand the whole human nature and behavior thing, tulips, south seas, and what not.
i looked at some charts going back to 1982. NEM ... flat. KO, PG, XOM all up over 1500 percent. what is the real store of value here? human innovation and the rise of the global middle class? or a 3 mile deep hole in the ground?
and what are "these people" "getting away" with? re-inflating and stabilizing the global economy? printing money and creating the deepest debt markets in the world? just like they've done for 300 years? or is it a vast conspiracy by the illuminati to frustrate a handful of gold bugs?
over the last 52 weeks, most equities are up over 50 percent. GLD is up less than 20 percent. most major currencies are up more than gold. is this a coordinated effort from billions of people suppressing the price of gold, or just the fact that almost every country ETF, corporate bonds, munis (which of course are GOING TO ZERO!) have crushed the performance of physical gold?
who is getting fooled here?
On the afternoon market action
Found this, this evening
//////////////////////////
"How Goldman Prevented Today's Market Rout And Made A Quick $3 Million In The Process
Submitted by Tyler Durden on 02/25/2010
In our first of many "Trench Warfare" segments, we share with our readers the perspectives of various floor and desk traders and analysts, in this case CBOT floor trader F.S., whose valuable perspective sheds some much needed light on today's odd market behavior, and on just who was responsible, and profited from it.....
I thought u might find it interesting that Golden Slacks bought 1,200 big S&Ps today near the lows – supporting/buying every selloff attempt. With the 10 handle rally GS just made a quick $3,000,000.00. Of course, they are selling some out now @ 1097.00 to the Johnny-Come-Lately’s – but not many.
Gee wiz, I’m sure the Vampire Squid just got lucky and didn’t have that info before hand. Yeah – they’re very lucky.
From the Floor of the CBOT
So the next time you see Goldman making $100 million + profits on every single day in the quarter, you will at least have some idea of how it happens."
http://www.zerohedge.com/article/how-goldman-preve...
Re: More On China's IMF Gold Purchase
mcgro2 - very thoughtful post, thanks. It really made me think about what my choices are, and why I made them. I will respond in what I hope is an equally thoughtful manner.
Ignoring issues of religion, manipulation, fiat, and the like for the moment, I ask myself, "why gold?" As you say, it serves little industrial purpose (though there are some electrical connectors that use gold, because it doesn't corrode). But why do I want to own gold - in this case, CEF?
I'm a saver. Yet saving money in the US has long been a fool's errand, because the monetary authorities have planned annual debasements of my savings. They call it targeted inflation numbers - whatever.
So for my savings, I want to have a store of value - something I can more or less rely on to retain its value over time. I also want it to be easily convertible if I need to use it. In short, I want it to really act like a savings account - liquid, yet a good store of value.
Right now, I feel that holding my savings in an unbacked currency relies on trusting the central banks and governments to exercise restraint. I'm not seeing any restraint, and I'm also not seeing any transparency. I'm also seeing the debt trend going forward, and the real choices facing US finance seem to either be default, or inflate. My guess is, they'll inflate, but that's just a guess.
And if I look over the record of history, the loss of purchasing power of the dollar is a 97% value loss over 100 years. So, my feeling is, my savings belong in gold, since it has historically acted as a more secure store of value than unbacked currencies.
Having said that, I recognize that there are always timing issues - buying gold at 800 in 1981 would not have been a good idea. However, gold has never "gone to zero", unlike unbacked currencies; they have a nasty habit of going belly up every now and then. And right now, my feeling is that gold seems fairly valued, so I'm not overpaying at the moment.
My investments, on the other hand, are much like you describe - in industries that I feel will make an ongoing contribution to meeting human needs. I add to that, "in products I like", which rules out MO, for instance.
The amount of money I feel like placing at risk varies with how sound I feel the underlying economy is. The more money I feel like holding in low risk savings, the more gold I want to hold. Its always a balance - currency, gold, and equity investments, and that balance changes over time.
So gold for me is not hype, or religion, or a way for me to get fantastically rich, or a way for me to laugh at fools holding fiat money during a hyper-inflationary storm that's sure to come. To me it's just a store of value. If it retains purchasing power over the next 10 years, I'll be a happy man. I think it's more likely to do that than the US dollar. Not certain, but likely.
What do you think? Dispensing with the hype for a moment, given the current environment in 10 years do you feel gold bought today will be more likely than the US dollar to retain its purchasing power?
Re: More On China's IMF Gold Purchase
GLD will outperform the $ handily. high grade corporate bonds will outperform government bonds.
but the trade for me (36 years old) is companies whose products will be bought on an every day basis with not only dollars, but also (especially) emerging market currencies. the so called grantham quality trade. the bill cara quality trade. lots of big caps, but also lots of smaller names.
low debt, strong balance sheet. let's just say i prefer the "religion" of ben graham versus the schiff's of this world, who got annihilated in 2008-09 betting against a "worthless" dollar.
i see a lot of shills out there calling for a crash in the market, and an explosion in GLD. if the markets fall, the dollar goes up, and gold (probably) goes down. right? how do people such as this still have a mouthpiece? manage investments?
i'd buy more GLD if it went to 950. more GDX if it went to 36. i think the drillers offer much more value if one is looking at the re-flation play. same with WFC or BAC. talk about printing money and investing along side the USG instead of against it.
Re: On the afternoon market action
Please tell me it's a joke... it just has to be
THE OPIATE
ALOHA !!
"... own some gold ... but it's almost like a religion with some people ..."
Religion, as we are told by some very old and dead Communists, is the "opiate of the masses".
I would much rather worship in the church of sound money than in the church of never ending debt! The US Treasury is the God of Debt. Americans worship debt more than Jesus. Count the amount of time you spend in a day working for debt versus the amount of time you work for Jesus.
Let me take you to the DEBT BIBLE, the US Treasury Daily Statement ...
Let me read from verse 02-24-10 ... Table III-A ...
Yah unto the Keynesenites as we did bare a bounty of paperous debt, for on this holy day of debting the US Treasury did create $23.1TRIL USD of total and blessed debt in five full moons. Blessed are we who must worship the TRILLIONS for we shall sow the virtues of our slavery. Amen ...
So is one ounce of gold worth $1100 USD, that expand at unlimited rates and in the frequencies of mouse clicks, or is it that 1,100 $1 dollar notes are worth one gold ounce that sits there in the most boring manner never multiplying into mouse-clicked trillions?
So in less than one month(18 days) our US Treasury SPENT $25.2BIL USD just on Defense contractors alone so that we could build our arsenal of death and destruction which we use liberally around the World at any given drop of a hat to enforce Democracy. What is $25.2BIL USD in 18 days? It is $1.4BIL per day or it is four times what the IMF is trying to sell to some unsuspecting fool who thinks "debt derivatives" are worth more than life itself. After all how many people have died over paper money ... A few ...
Lets visit what the IMF says about gold on their very own website. Remember this is the fiat bank of banks, next to the BIS:
The IMF's policy on gold is governed by the following principles:
• As an undervalued asset held by the IMF, gold provides fundamental strength to its balance sheet. Any mobilization of IMF gold should avoid weakening its overall financial position.
• The IMF should continue to hold a relatively large amount of gold among its assets, not only for prudential reasons, but also to meet unforeseen contingencies.
Unforseen contingencies ... Unforseen ...
So according to the IMF website they hold 3,217 metric tons of gold. They are trying desperately to sell off 403.3 of those tons and I venture to guess they will be able to sell that tonnage after all. They claim those 403.3 tons have a market value of $11.9BIL USD. So that is much less than half of what the US Treasury spends on bombs and bullets in a month. In fact all the gold the IMF has put on the market to sell, the entire 403.3 tons, is only worth 8.5 days of Defense contractor spending. Its MONEY MAGIC!
Now guess what happens to the remaining 2,813.7 metric tons of gold at the IMF after the, oh so hyped, 403.3 tons is sold off. We'll, just go to the IMF website and find out. Here ...
The Articles also provide for the restitution of the gold the Fund held on the date of the Second Amendment to members of the Fund as of August 31, 1975. Restitution would involve the sale of gold to this group of members at the former official price of SDR 35 per ounce, with such sales made to those members who agree to buy it in proportion to their quotas on the date of the Second Amendment. A decision to restitute gold requires support from an 85 percent majority of the total voting power. The Articles do not provide for the restitution of gold the Fund has acquired after the date of the Second Amendment.
So it goes, as it will be sold for $35SDR per ounce to the various central banks around the World who deposited that gold at the IMF way back over 35 years ago. I wonder if any of those central banks will want to buy it back at $35SDR?
So it seems by the IMF's own admission that the IMF gold sales are over once the next 192 tons is sold off, as the remaining gold belongs to those other than the IMF. Still, what's that thing they say about 9/10ths of the law?
Once again, is it the price of gold that has been rising over the past ten years or is it that the value of the dollar has been decreasing for ten years?
Hummm .... $23.1TRIL in five months ... $4.62TRIL per month ... $257BIL a day! That's a lotta paper shuffling! Perhaps the paper worshipers should try counting to 257 billion each day and see how far they get.
Don't take my word for any of this go Google "US Treasury Daily Statement" ...
Freaky Old Nukes...Vermont Yankee
"Vermont Senate Votes to Close Nuclear Plant"
Thats the headline in todays NYT. Not under Business but under Science.
http://www.nytimes.com/2010/02/25/us/25nuke.html?hpw
I am on record here recently as saying nuclear electricity generators were a risky investment. Leaking radiation pollution into groundwater is only one example of what can happen. Whats more, Entergy Corporation (ETR) apparently agrees. Witness their attempt to get out from under:
"In a move that has also deepened public unease, Entergy has been trying to spin off the reactor and five others, including the Indian Point reactors in New York, into a new company that would borrow money to pay back Entergy and sell stock on Wall Street."
Who would buy the bonds let alone the stock of such a spin off? Perhaps Goldman Sachs could be the flim-flam organization to peddle such crap. To retirement funds no doubt. With the help of the Fed.
Reminds me of the now glorious growth Monsanto Company after they stiffed their shareholders and the public welfare by spinning off their dirty chemical business. Solutia (SOA) got most of the debt and liability, including legacy from PCB pollution in Alabama and other places.
From Wikipedia about Solutia:
"The company was formed September 1, 1997 as a divestiture of the Monsanto Company chemical business. Solutia filed for bankruptcy on December 17, 2003 in response to significant litigation surrounding various products, unsustainable debt structure and a downturn in the economy. Solutia emerged from bankruptcy on February 28, 2008.[4]"
Re: More On China's IMF Gold Purchase
I agree with you, a crash in equities does not initially bode well for gold. If the the current linkages remain intact, a big move down in the equity markets worldwide would probably drop gold to 800-900, and the buck back up to 90. I'd say that's the likely case, in the event of a double dip recession and/or second leg down in property prices.
But if the Fed restarts QE, POG will pop right back up, because the buck will give it all back. It just depends on how fast it all happens. My guess is, the second time around, the Fed will be pretty quick on the trigger to print. After all, nothing bad happened last time, right?
Having said that, I do wonder at discussions China has had with the USG. How much maneuvering room does the Fed really have? If China really did make a move out of treasuries - let's say they abandoned their peg, and decided to move just 10% of their holdings into euros in reaction to another round of QE "just to send a signal", what would that do to long rates? What would the Fed do in response? I really wonder what's going on behind the scenes right now.
I honestly don't think reflation will work - unless reflation means massive currency debasement, somehow increasing US salaries while holding debts (and holders of cash) constant. The current reflation attempts have not raised people's ability to service debt at all. It might have plugged the leaks in the banking system, (and had the side effect of providing some very nice bonus packages for a lucky few), but the (unserviceable) aggregate debt burden of Main Street remains unaffected.
I'm really wondering what the way out will be. I don't see one. And that's why my savings is in CEF.
Re: On the afternoon market action
I love a conspiracy theory as much as the next guy, but come on. I have to agree with VAD. Goldman Sacs sneezes and makes 3 million. That is real chump change to those guys. Please give these guys some respect. As far as propping up the market there was obviously no conviction in selling this market after the gap down. I could even see that, so I am sure the wise guys at GS could see that too.
Bob
Re: THE OPIATE
it just seems to me that when people like Robert Kiyosaki of "Rich Dad" fame are recommending buying gold, the easy money has been made. didn't he continue to pawn real estate deep into the crash?
i'm not a dollar bull by any means, but there appears to be better long term value in income producing securities with strong balance sheets, stable earnings, and competent co-invested management.
selling puts on companies like XOM MCD JNJ IBM and putting money in my pocket seems safer to me than banking on the USG collapsing even worse than all the other inept governments. Europe is a mess, Asia is worse.
it may sound silly, but i think the US economy looks stronger than most right now, excluding perhaps Australia, Canada, and Brazil, all of whose currencies (the loonie has trailed) have kept pace with GLD for the last 16 months.
Re: THE OPIATE
Mcgro2,
Welcome to the board enjoy your posts. Nice to have a value freak to balance all the gold freaks:). One quick question. What added return to a large cap portfolio can a put selling strategy add. Also do you hedge against a black swan type event.
Re: More On China's IMF Gold Purchase
Gold is ware. It has a price. It pays no interest unless you lease your physical holdings. Gold is a shining luster that most women crave as a symbol of worth.
Over time, most wares appreciate inversely to the debauchment of a countries specie. A good mens tailered suit in 1900 was $25 dollars. Today it is around a thousand. Beef on the hoof was selling for 3 cents a pound before WWI. Today it is close to a dollar. I could go on but the point is -THINGS DON'T COST MORE, YOUR MONEY BUYS LESS!!!!!- Repeat this a hundred times til it soaks in. And yes, inflation is a form of immorality that takes from the saver and rewards the speculater. Inflation is a bleeding cut that goes unnoticed until you almost pass out. By then it is too late. Make no mistake, Government will woo you with contrived numbers to assure you you are or will be OK. Ask retirees if their SS payments have kept pace with inflation these last 15 years...You know the answer, especially if you have aged parents. The answer to Social Security deficits is easy. It is already being means tested. The problem is and has been Medicare.
Thirty plus years ago we were promised a fall back retirement and health care for the old. Older folks liked it. Their kids loved it. It was a free ride if you would only vote for Senator Foghorn. What a lovely state of affairs. And now we have EX Senator Simpson ( he now be truthful, cause he don't need no votes )telling us that the old Social Contract needs to be 'ahem' adjusted cause we ain't got no more borrowing power. I love farces but he is correct. Damn!
We segue now to the 'money thought' of other civilizations. The beauty of Greco-Roman money thought was.........the Lydian coin. What a wonderful suprise! Something of value. A coin was... decipline. A coin was money because the Greco-Romans said they were. But the Egyptians, whose money thought was very similar to ours took those coins during the Ptolemaic era and beat them into nuggets and traded them as wares. Examples abound.
Western moneythought started in the counting house of Robert The Devil. The Checkered table (ex checker) and most other terms of western finance were begun by Normans. Our equivilent of coinage was the 'wonderful' discovery of double entry bookeeping. A tour de force of force vs. mass. It was like the form of a 12 century church. All money thought derives from a precedent religion.
I like Gold. I like silver and plat and especially palladium. I am their master but I must say also that as soon as REAL interest rates as I calculate them becomes positive, the baby goes out with the bath water.
Can I see gold at $3,000? Of course. But a loaf of bread at $9.00 haunts me.
Udacha y'all.
mantra for the times
Batten down the hatches
Tighten up your stops
Buy a little gold dust
Don't forget the hops!
Breathe a little easy
Make another plan
Chart the trends and doji's
Kangaroo tails you win!
Batten down the hatches
Tighten up your stops
Bill and Vad remind us
Dr. Cosa rants
Take your wins and losses
Squarely in the pants!
Re: THE OPIATE
An enjoyable back and forth on this post today and I like both sides of the argument.
mcgrow2, you've pointed out *consumption* based large caps outperformed gold from the early 80's until whenever. No surprises there. We were consuming.
gold bugs are rightly pointing out the value destruction in process now with the Fed's printing presses. Most asset classes have lost value...except PM's. No surprises there. Smart people clued into the debt based consumption cycle early 21st Century and realised the eventual outcome. Kaimu has shown us that much.
mcgrow2, I think you're again on the money with your investment thesis (I for one am certainly not a money manager) that will provide outsized returns once (and only once) our authorities return us to the path of value creation. Your biotech and health investing strategy sounds much like an *investment* based economy which is probably what will be required to return the US to great economic power status again. Our elites have exhausted the consumer, just as in the first depression, as a potential for wealth creation for a generation.
As Bill points out many an occasion, there is a season for everything...
much obliged for the contributions made today.
Re: Social Mood Article Using Historical Cycles
Interesting Ron, but still rather objectivist in its outlook.
Why label the fourth turning "crisis". Is the cycle of our lives known as "death" a crisis? If so, why? (I imagine you have given this subject plenty of thought).
fellow citizens, grant thee the liberty that which thou can accumulate material wealth, amongst other protections against state tyranny.
Lord, grant thy people the wisdom to see that material accumulation in all its garish display is disruptive to social harmony and inegalitarian in its outcomes. (here in Switzerland, an elite admitted to hiding two exact same limousines in his garage in order to diminish his display of wealth). At least we begin to understand that there are environmental constraints that will be shortly placed on our behaviour.
Utopia comes slowly and disruptively to libertarian societies. so much the better. Imposing a better world was witnessed in all its horrors as the grand failure of social experimentation in the 20th Century.
Re: More On China's IMF Gold Purchase
Thank you all for your replies! I chose to address the gold bugs a little more agressively and I sure got a nice response! Racism? Wow...
Saying anything bad about precious metals is like saying that somebodys child is ugly. It is like somebody said, almost religion. Some once wrote that gold is a woman - true! Do not fall in love with this woman.
I own gold since almost five years and have kept it ever since. I trade PM stocks in their ups and downs, but that article is pure propaganda. For me. Religion for others. Amen
Re: More On China's IMF Gold Purchase - The Power of Gold
I hereby strongly recommend "The Power of Gold" by the legendary Peter Bernstein to everybody, especially to them that call themselves gold bugs. This is fine litterature in comparison to much of that hogwash being spread on the Internet. It gives you perspectice on things. Amen
"The Ascent of money" by Niall Ferguson is also worth reading.
Re: On the afternoon market action
booyo,
Agree fully re your remark that Tyler Durden's headline, i.e., "How Goldman Prevented Today's Market Rout And Made A Quick $3 Million In The Process" was superficial and misleading. But any time I see a financial writer emphasize a number in the millions with pennies, i.e., $3,000,000.00, I dismiss that person as a credible source of information. Is Tyler Durden worthy of our time is really the point. There is a weight of evidence building that he isn't, and if he isn't we should stop referring to him much like we stopped discussing Cramer and Kudlow here a long time ago.
Lying Eyes
http://ronsen.blogspot.com/2010/02/lying-eyes.html
Richard Pryor's analogy makes as much sense as the Fed Chairman.
Re: THE OPIATE
"...is it the price of gold that has been rising over the past ten years or is it that the value of the dollar has been decreasing for ten years?"
Does it matter which?
It seems to me gold is the single most stable measure of value with currencies of all nations floating (or sinking) relative to it.
It would be interesting to see a chart of say the past 3 decades or so, with prices in various major currencies for bread, oil or autos vs ounces of gold.
Does anyone know where to locate such?
Cara 100 Ratings Changes
Good morning from the arctic circle.
CHA - Upgraded to Buy @ Deutsche Bank
Re: On the afternoon market action
In addition, I can't help but question the very way the information is delivered. Let's see: one anonymous person writes that another anonymous person told that whoever anonymously bought the market at certain point today was GS. Is this what goes for research now? It seems to me that anything that puts blame for anything else on GS goes unquestioned these days - and more and more writers, most of them anonymous, try to capitalize on this widespread, umm, displeasure with GS. "Just say something nasty about Goldman and you are public's favorite" must've become a line in some secret instruction for Internet publishing success... ya know, "How to attract 5 million viewers to your website - secret technique pros don't want you to know".
Some simply seek traffic increase by pandering to popular focus of public attention - those are manipulators, not any better than those on the other side. Some are probably zealots thinking "whatever attracts negative attention to them" - those only harm the cause by providing misinformation and undermining credibility of the whole movement aiming to reveal what's happening behind the curtain.
The price of dollars
Honest, I think we are all looking at it wrong. We look at the "price of gold", but the reality is we should be looking at the price of dollars. I have no expectation that the price of gold will ever rise. But what I do believe, is that by the miracle of Keynesian economics, money printing and credit creation, the value of the dollars will continue to decline, as will the values of the other paper currencies it competes with for lower valuations.
Call me a gold bug if you like, I don't care, but I think some day these paper bugs (people that believe in the value of paper exceeding its cost to produce) are in for a very rude awakening. History and human nature are on my side.
Re: The price of dollars
Reading the whole discussion, I don't see anyone claiming that paper money is more valuable than gold. Why argue against argument no one makes? What I see being said is: there are better investment vehicles than gold. Proponents of this point of view refer to charts; if their charts are correct they can claim that history is on their side just as well. How does this argument makes anyone a "paper bug?"
Not that I am trying to wade into this exchange, not my specialty really... but let's discuss real argument being made?
Re: On the afternoon market action
Vad,
Looking at all the GS alums who have been, and in many cases still are, in key positions — doesn't it seem reasonable to believe GS is able to manipulate far beyond most others?
Greenspan, Rubins, Paulson, the new Assistant Treasury Sec.
In addition there is the crossover from the New York Fed linking with Bernake/Geithner.