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I want to "chime in" on the RTC..
The Resolution Trust Corp (RTC) was Bush Seniors' baby. It was ran by the government, was a constant beggar for money (1989-1995) before congress, mismanaged funds, lost accounting tracks, paid contractors who did nothing, and was NOT the savior Americans thought it would be.
Between 1989 and mid-1995, RTC closed or otherwise resolved 747 thrifts with total assets of $394 billion. The COST to the taxpayer was $130 billion. (The cost of $130 billion to dispose of $394 billion in assets ended up 33% of total assets handled). The $130 billion was financed by the US over a 40 year period. INCLUDING 40 YEARS of INTEREST, that brings the grand total to the taxpayer to $500 billion ... to uhmmmmmmmm... dispose of $394 billion.
We had better be careful what happens here. There are hundreds of billions floating around that need to be dealt with. No one really knows the total. I do NOT want to see a repeat of the witch hunts on innocent executives, legal proceedings ruining innocent people, frozen bank accounts for citizens that require years of waiting for proceeds, and all the nightmares the RTC caused. In the end, what few assets the RTC couldn't sell were sold to (guess who?) Fannie Mae & Freddie Mac.
I certainly hope all of you remember the 6 years of congressional hearings whereby the RTC came back asking for more & more money... for the frustrated congress who couldn't get straight answers... for the reporters who dug in & found horrendous stories... for the lawsuits against the RTC for selling productive (and valuable) mortgage assets at firesale prices.
I do not wish for another RTC. The public has a very, very short memory. (What's worse, I have an employee with a degree in accounting and a master's in business who was NEVER taught anything about the S&L Bailout. He had never heard of it! He had never heard of LTCM! What are they teaching in schools????)
If you have any time whatsoever, then do yourself a favor & google "resolution trust history". There is not enough space on this thread to explain how dangerous a resurrection of that government body could be in today's financial arena.
I believe you've broken the hex!
"I bought some (200) MOT @6.90. I put in a buy order for GE @22. "
Now then... MOT closed @ 7.10 and GE closed @ 24.79.
That's 2.9% and 12.7% gain respectively.
That, dear heart, is a nix on a hex!
Consider yourself reborn! Bravo!
When you least expect it, life throws you a favorable unseen curve...
Hey we're g-r-e-a-t !!! And, Cow Hampshire is doing great too????
Gotta say, I'm always one-to-two months behind on my reading here. Can't comment on old posts so I stay quiet. Love to read this board... it nourishes the soul & keeps my head up... even if I'm reading old posts. And, I must admit, I've missed alot of the posts.
Like LTCM, the bailouts are targeted at giving "time" to unwind. Let's face it, AIG has untold policies written for the marketplace, has received solid premiums on those policies, and has invested the proceeds in the derivative market that has since come to a halt. With no buyers of insturments with highly questionable value, they can not raise cash. The last sell of substantial CDO's (or was it SIV's?) netted a r-e-a-l value of fifteen cents on the booked dollar. It is the first sale which actually put a real dollar value (and not necessarily a "fire sale" price) on the instruments. That was within the past two months & we will surely feel the bite when accounting offices re-price instruments based upon the new price. Losses will compound on all participant books.
The FDIC used 14% of its cash hoard on Indymac. The remaining 86% will cover all other deposits in the USA?
The PBGC is stretched too thin to take on even one large pension plan default. With the market going "no where" for ten years... and, with todays action, trully giving negative return for the ten year period... then what does that say about the unfunded pension liabilities that we will be reading about (in horror) in the upcoming year?? It's a shoe that will drop when we least need another shoe. But this particular shoe will affect millions of citizens.
I hate Crisis Management. I have spent an entire career making sure a fire doesn't start & take all our energies to put it out. It is paramount that we identify potential problems & take steps to prevent their occurance. If we allow problem after problem to turn into sucessive fires, then we spend all our energies putting out fires. There is NO MANAGEMENT or SUCCESS in a career of fire squelching.
So here we are with a Federal Reserve dealing out headline Crisis Management who, because they are sooooooooo focused on the fires they allowed to happen, that they are creating massive fires for our balance sheet, our eoonomy, and our welfare going forward.
Heck with the "next shoe to drop", let's be candid & say it like it is.. it's the "next fire to start". Some of the bandaids and fire retardant that they've already employed may very well turn into fires that will hurt generations of Americans to come. I'm sure of it.
I am furious over these bailout bandaids.
Each bandaid is rationalized... the spin to "accept it" flows from every corner... and intelligent free-market, capitalism participants, are buying the "too big to fail" jargon.
None of this is about the public welfare. None of this is about protecting the population, pensions, or any other spin that the Federal reserve can place on it.
It is ALL about overpriced derivatives, bank-to-bank bad bets, exotic financial instruments between brokerages, banks, and foreign governments. The derivative/exotic financing was NOT regulated... Greenspan hailed the instruments & further encouraged the "no regulation" enviroment. Here we, the populus, sit beneath overhead financially destructive clouds (derivatives) which are darkening the skies with each passing day.
The derivative market was overpriced. Leverages went (on a percentage basis) into orbit. Executives booked profits that brought commissions & bonuses into the millions. The government allowed it to be unregulated and now, with the bets going bad, our Federal Reserve has nationalized (can you believe it???) an insurance company.
Sooo.. spin has it that Lehman had time to unwind. Okay... they can go bankrupt. But oooooooooooopsss.... AIG had time to unwind but we should ignore that fact & spin that they are "too big to fail". We should, by the way, bring the biggest failures of the American capitalistic economy into the loving arms of the taxpayers who, by the way, never got bonuses for bad behavior, never took commissions for super risky bets, and who made the silly mistake of either investing in the stock (puff!!) or giving the deposits to those jokers in the first place.
If we, as a country, don't turn to Bernanke & Paulson and ask the obvious question "What are you doing to us?????", then shame on us.
I believe that when the "energy to produce" equation is made, they consider the energy to produce the machines used to plant, cultivate, & harvest the crop right along with the here-and-now energy consumption to propell those machines. That doesn't mean everyone will be using older machines, but it does mean that some of the costs are already behind us. Keep in mind that those older machines are not fuel (or environmentally) efficient.
Most farmers already had the capital investment in machines behind them when the rush for corn came into play. In Kentucky, our legislative body passed laws which require certain buses, machines, & state owned vehicles to move to biodiesel and alternative fuels. Of course, that mandate meant "sure money"... and the race was (and is) on.
I have to agree with your firm regarding their reasons for shying away from that investment. However, there will arise a winner from the other biofuels within our lifetime. Nothing wins the comparison of BTU's against oil but they can certainly be used as alternatives.
Greater to hear from you! The last thing you sent was the Beaver Dam in June 07... it was priceless! In fact, if you are still as outspoken as I've known you to be, I would think that you had written it!
All is well?
Now then...
I am a bigger fan of switchgrass than I am of oorn for alternative fuel solutions. To defend the farmer in Iowa, he was addressing "corn". In that respect, and in no other respect, I think he was right.
We bought 100+ acres from a farmer next to us. The parcel is rich loam soil from one end to the other. We can dig down 8 feet & never hit rock. Everything grows great on it... except for a 20 acre field that "was corned to death". On a satellite photo of the farm, that field casts "pink" against the adjacent green fields. It was a square, pink, ugly image. Since 1993, we have done everything the university has suggested for that field. Our closest friend is a soil scientist & we have followed all of his "try this" suggestions. Tests, money, seeds, different methods of planting... nothing worked. And whatever was wrong, the problem never reached any OTHER field.
Alas, in 2006, a high protein grass (we raise Angus) finally grew. We couldn't believe it! Of course, the '07 drought took everything to a straw-like state, but when the rain finally came, the field (again) responded. We've finally turned the corner.
This is a short story for what took a family farm 14 years to overcome. A corporate entity would not have invested the time or energy on holding land without ROI. This leads me to what I think the farmer was trully saying-> when the corn party is over, there will be a mess to clean up. The consequence of repeated over-utilization of the same property for the same crop (regardless of how smart we think we are in the caretaker process) is a toll on the soil that will take decades to reverse. (IMHO). Switchgrass? It is a preferable mass-production crop without nearly the side effects of corn to the soil.
I hope this helps you narrow down what I was saying.
Actually, it was "per chance" that I finally checked in!
I saw the bearish indexes yesterday & wondered what you all were doing. Getting a new computer, losing all my links and email contacts, it's not the easiest thing to drill down & find you all, but last night I took the time!
On the metals: Time has proven your silver investment arguments were right. Over time, more & more articles began viewing silver "not as a precious metal" but rather as an "industrial metal". I must say that you made the earliest and best argument! With regard to gold, I'm having tough dicotomies over a want to invest in the stocks or a want to invest in the metal itself. I evolved from investing in the stock to investing in the metal... and I probably might regret that, and may change (once again), but that's were it stands right now. Given the ability to work the options market, I think more money could have been make in options than in either my stock or basic metals tactics. Then again, I would have had to actually PICK the right option, buy it right, and sell it right in order for that statement to be true. And, what would be my chances to do that??? Nil !
Actually, I'm lovin' the name! Suits me!
I am soooooooo curious & interested in how everyone is doing.
I realize you have alot of new people and their arrival is wonderful for both investment ideas,comradery, and keeping the events of the world in perspective. I've found over the years that the strongest lure for me in reading this board is the high level of intelligence coupled with candid honesty and greatttt personalities. It keeps it real.
And, with that said, it's pretty clear that I want to say a bigggggggggg "Hello, I miss you!!" to you, Court, Alan, Eric, Richard, Mike, Gus, Bill, Cindy... and folks I knew but who have different sign on names I can't recognize. Everything does NOT revolve around a dollar, it revolves around good people.
It's a Saturday... no markets today... thought I'd dash in and make an "off topic" post & hope that you all realize how (although you don't know it) valuable you are.
Hmmmmm... a breather... not a walkaway..
MACD says you've got good reason to hold onto the balance of the positions & still profit more. I would certainly keep an eye on it.
A frenzy type "tulip" atmosphere exists in all the metals, but I think the reserve "hard asset" moves (ie China) can act as a buffer for a quick reverse.
In '99, a one ounce gold bar went for $247 at a "drug dealer got busted" auction in Los Angeles. Lots of bars.. oooooooodles of bars. Now then... those bars are worth nearly $1000 each. That's not inflation... that's real buying power degradation of the dollar in just 8 short years. And that buying power degradation translated in avg price per home... price of cars... price of everything. But there is no official rampant inflation?!!! How so? Folks just don't see what is happening to their money... if they did, then they would want a 300%-400% increase in wages just to keep them in gold. (that's not fair... maybe I should have said to keep them in oil... or keep them in wheat... or...). And while we are wander around in the the "no inflation America", we send our government officials to China to encourage them to buy sub-prime SIV's & CDO's! How do you think that flew??? And, when that doesn't work, we peddle our best bankers over to any one, or any government, that might take a stake in our banks to keep them strong. Or, is it, "appear to keep them strong" while simultaneously ignoring that they'll have to pay back enormous amounts of interest caused by the bad deal. Hey, live for today! Citi has no shame..
Hey now... I finally "get" the gadfly!!!!
And corn?
As a nation, we need to wake up... have you ever seen a field that has been (as the old timers would say) "corned to death"?? The topsoil is a different color, will grow absolutely NOTHING (not even grass)...
A farmer in Iowa told a conference that we, as a nation, are using up the last three inches of topsoil to put into our tanks.
He's not wrong.
Nick
She's doing fine... thinking of all of you often... and on a night like tonight, I have the rare priviledge of checking in.
No... we don't forget... miles, distance, and time cannot separate friends. When they meet, it is as if they never left.
John Wayne is the best! Cows, farm(s) (we expanded....), droughts, critters, 70+ deer on the farm for the past 8 months (they don't even run anymore... they stand in herds & stare at us --- we, the intruders --- then eat everything we plant)
I'm still doing what I always do. I can't say in an open forum how big the company has gotten but its growth has been the reason I haven't been here very much. Exciting, rewarding, and ever-so-challenging!
I'm going to spend a few minutes reading, k? You all are more interesting than I am! Also, I'm terribly interested in why Eric is selling his metals (not that its a historical peak or anything like that... but just want to read his take).
Actually, Richard drove M0RE than 100 miles an hour! He had this spiffy techno-savvy appliance wired to his dashboard (?) and knew to the fraction-of-a-mph how fast he was going.
But... alas... my farm road did him in...
A gadfly... hmmmmmmm...
Had to look the dang thing up!! Websters: a person who annoys others by rousing them from complacency....
Doggone!!! Told them to buy that gold!!! And who in the world read my posts??? Aha! It was the Sovereign Wealth Funds takin' advice from a gadfly!
(The gadfly made me do it... honest... it was the gadfly! She changed the world & all the bank reserve allowances! Such a gal! Oooooooopssss... such a GADFLY! )
Court, I think he has this right.... be sure to read it all. But, before I head out, H-E-L-L-O to some CONSISTANTLY grrrrrrrrrrreat people!
http://www.rgemonitor.com/blog/roubini/154353#readcomments
Just takin' off the rose-colored glasses...
Elena
I just love the guys at Daily Reckoning.. Here's their brainfood for the evening. Quite entertaining if you have a warped sense of humor like I do ... :))))
"What's up with the bright minds at Harvard? They can't seem to get their acts together...
On top of their president, Larry Summers, stepping down from his post amid sighs of relief from most of the staff, we have two conflicting forecasts of the U.S. economy coming out of America's oldest university.
Tuesday, Harvard's Joint Center for Housing Studies released a report saying that although the housing market has entered a "down cycle," the party is nowhere near over.
"There may be tough times ahead," says Nicholas Retsinas, director of the Joint Center for Housing Studies at Harvard, "but housing will emerge stronger than ever."
The report acknowledges that nearly one-third of U.S. homebuyers chose "risky" interest-only mortgages last year, and that the average mortgage payment in 2005 rose to 24% of the U.S. median income (after taxes) - the highest level seen since 1984. But those Ivy League brainiacs decided to shrug those facts off and declare the U.S. economy "sound," and that any softening in the housing markets should clear up before long.
Phew. We feel so much better now that they've cleared that up...wait - what's this? The latest NY Times Magazine is entirely dedicated to "America's Scariest Addiction: Debt," and in the issue is a very interesting article by Harvard's Professor of History, Niall Ferguson.
Prof. Ferguson's piece, "Reasons to Worry" looks to explain "Why you should be excused for feeling a little uneasy about the collapse in household savings, the rise in home-mortgage debt, a large and growing trade deficit and the fact that Asian countries hold so many U.S.
Treasuries."
"For America's giant, dinosaurlike economy," he writes in the article's conclusion, "with its small wealthy head; its big, fat middle; and its long low-income tail - there is a tried-and-tested response to a change in the weather. Dollar depreciation and inflation have saved the debtlodocus before. The assumption seems to be they will do the trick again.
"Yet this time may be different. For sinking like a velociraptor's fangs into the tail of the debtlodocus are interest-rate hikes that may outpace and check any increase in inflation. And no one knows when and how violently the leviathan may react to this slowly discernible pain.
"It is too soon to speak of extinction, of course. But one obvious inference to be drawn from the British experience of an indebted empire and a sliding currency...is that eternal life is not on offer."
Ooh la la...doesn't really sound as if Prof. Ferguson is describing the same "sound" economy as his friends over at the Housing Studies center.
Richard,
What are your thought on Corning (GLW)?? Take a look at that chart... it might be time to invest ?
There is a mandate for cleaner emissions for tractor/trailer units coming in the next few years. The industry is turned upside down at the cost of the emission control. Seems GLW is frontrunner in making this little doma-ja-hickey that goes into the tailpipe & viola! hardly any emissions. The industry will be gobbling it up to meet the mandates. I really believe that if I can grab this aging gem, then it could be a very, very solid investment. Do you (or anyone) have any thoughts on this one? Is it on anyone's radar?
Court,
I think something very, very important is happening... and we (myself included), just don't "get it". But it's happening.
Please try to follow my thoughts here... and I realize I'll be making generalizations but that's because I know you (and most others) already KNOW the detail behind the generalization...
Let's look at the signals over the past 6-8 months... The IMF warnings about USA imbalances, the USA level of unprecedented debt... the short, clipped announcements that China & other countries want to diversify their reserves... Iran's new use of the oil trading in Euros... lower attendance by Asian countries at our treasury auctions...
These news events are unprecedented. I can't really 'buy' the stalemate of the Bretton Woods II theory. I think the cards are shuffling over these months. The dollar & US debt has been sought (not shunned) throughout our lifetimes. Yet, these signals are a public cry from countries that hold USA currency & are watching the 'dollar tanking' fully reduce their reserve values. Quite unpleasant. As far as holding USA debt, they watch a boomer generation approach unrecognized liabilities that, when addressed, will absolutely affect the quality of the debt instruments they hold.
Now then... gold obviously shot too far too fast. Yet, gold is the very alternative to holding dollar reserves. When coupled with pristine currencies & soon-to-be sought (EURO) currency, then gold is a necessity. The climate to diversify reserves is the worse (in terms of gold affordability... or rising Euro... or rising quality currencies). What is a pool of countries to do??
Well now... months later... and after intense G8 (or is it the G9?) meetings, we suddenly see gold tank. We see the Euro drop against the dollar. We see the dollar rising. We see copper & silver dropping. Why are we seeing the very alternatives to the dollar tanking j-u-s-t when the countries who have high dollar reserves need them most? Could those countries have enough clout by banding together with tandem lock-step interest rate hikes (see the past 2-3 weeks) under the guise of "inflation" fighting to lower commodity prices? To band together to intervene & make the dollar rise (thus giving more punch to the dollars they hold to... ummm.. BUY the cheapened commodity they need to replace the dollar reserves)? Are we witnessing the shift of global reserves?
There is no fundamental change in demand overnight. Could there be (and this is almost outlandish) some agreement that if they keep lending, we'll allow tanking of commodities & reserve alternatives? And prop the dollar while all this happens? Somewhere, some place, there has got to be a thinktank that has not only outlandish possibilites like this, but which might also stumble on the truth. We never find out the truth until history books are written. Whether or not this will affect you & I today (via portfolios, etc) doesn't really matter. What really, REALLY matters is how this reserve "switching out" and dollar dumping will affect us in the future... our families, our country.
I am not a conspiracy nut (as you know I dismiss all of that bunk). But something important is happening... and I think we might be missing the REAL movements that are going on. Those movements, and they seem to be successful, are the first steps in countries making moves to diversify from America. This is important... especially if only "half" of what I'm wondering is right... or even 'partially' right. Every country that was ever strong absolutely 'weakened' economically in times of war. Many never regained former status once the war was over. This is not to comment on whether the war is right or wrong, but rather what it does to the economy. Maybe that is precisely what countries see happening to us: waging & financing a totally 'borrowed' war, mounting debts to unsustainable levels, personal spending abound, and.. all of this... in the years directly before the largest cash drain in the history of the country is about to be faced. A time when we should be saving, not spending.
Gaaads... it sometimes fully clouds my head... I am absolutely sure that "reserve quality upgrade" is behind most of the recent moves (tandem interest rate hikes/ commodity drops/ dollar diversification). But there is a picture out there that I just "don't get".... and might stay confused at times... but I believe this is the most important economic transition period our country has faced in all of its history.
Too much for a Tuesday, no? I think so too... so I'll close. Great talkin' with you, even if it's a "one way" forum! Can't wait for you to tell me that I need to take some prozac... but.. alas.. my health insurance won't cover it!! LOL!
Eric
I had an order in for GG @ 25.01. I was soooo sure that it would drop there. Around noon, it was trading @ 25.71 & I upped the limit to 25.49. Well, it executed... then proceeded to dip to $25... then back to 25.43 @ close. Dannnnnggg.. just goes to show that I shouldn't second guess myself. I wudda, cudda, shudda had it @ 25.01 !!
I had gold @ 550 bottom. I might be early (as gold never got there), but the longterm prospect is good IMHO.
Let's just see..... I guess you're on the same wavelength on silver?
So, I am not alone in noticing the quality of their suits??
Wonder if they are imported or Made In America.. don't you???
Steel? Well now... I think we're more jittery about copper. Today was a killer.
Sad faces everywhere. Some folks argued all the "rumor" & how this just wasn't going to happen cuzzz... well, now... 'they are in the KNOW'.
Pardon me, but the G8 just met a couple of times... and that doesn't signal that something is about to change?
And, an inverted yield curve for Nov,Dec & parts of January didn't (as it historically has done) beckon that within six months "something wicked this way comes"? Oh, but... this time it's different. And, here we are almost 6 months later... markets tanking all over the world... a precursor that more changes are coming in the pipeline of liquidity. More fallout. And now, just in the past week, we are looking at real inversions in the yield curve again. So, do we wonder what January will bring? And, if the downturn comes after the elections, will they say that it's the normal downturn after elections or will they try to see if a yield curve gave them any hint??
At this point, it is not pleasant to be right. I would rather have been wrong. I would rather that they listened and discussed the points (rather than dismiss caution). But, here we are. And sad faces will turn into productive, aggressive solution-based tactics once again. It's just not pleasant in the meantime!
Of course they're unscathed!! They're Public Servants... nice pensions... great benefits... they can afford dry cleaning every doggone article of clothing they own!
They are in a theoretical world of their own. They have charts on the "pain" effect of their policies... whether they should act early & stop the bleeding sooner (with great pain on their pain index barometer) OR... do they act slowly, moderate the pain, and extend the time to reach the remedy?? Death by one cut, or death by a thousand cuts? Can you believe they chart this???? !!!
Can you believe they have the pain index??? Who has time to sit down & make an economic pain index model??
If all I had to do 40 hours a week was to have my clothes drycleaned, think up ungodly American Pain Index's, mastermind fictitious economic "productivity gains" arguments, decide that M-3 doesn't need printing anymore, and massage the calculation of every economic indicator known to man, then I'd be THE BEST !!
I can do that. Mind games (except for the drycleaning, no?)... and we pay them to do it... and we pay, and pay, and pay for the mistakes & bad information.
This is worthy of a Bah Humbug, no??
Nine yards of fabric in you bell bottoms?? LOL! I'm on the floor again!
LOL! I fell out of my chair!!! Nick with an Afro on a speed bike?! LOL!!!
This is a natural peak in the cycle or is it an abnormal peak in the cycle?
Even with commodity prices low in previous years, inflation still persisted (ie: all manner of insurance premiums; all health related expenditures, etc.). When you couple those (supposedly) 'tolerable' inflationary occurances along with REAL inflationary pressure (oil/copper/all forms of alloys), then a double hit comes from the batters' box. The two forms of inflation ride the same road. It becomes more serious.
I'm tellin' you, Court - -
Bernanke inherited what no man would want to inherit (Thank you very little Mr. Greenspandex). This is going to get a lot worse.
I'm not sure if it's a matter of timing (whether it be "late" or "early")... it's a matter of what they did 'inbetween'. IMHO, Mr Greenspoon is a master of bubbles... the head of all bubbles... and soon to be crowned the biggest bubblehead of all time. I believe he has ruined our country... He can retire & dream of his days with Ayn Rand for all I care.
I really despise what he has orchestrated with our money and our economy. We are left with the ashes. And trust me, they are ashes. We are all on a treasure hunt for the illusive "productivity gains". Did you see any?? Has anyone you know seen any????
That would certainly put a dent into it!! LOL!
I almost asked that you write that in English, but what I really want [ :) ] is a hypothetical "for instance".
I can follow it...
LOL! And you can stay calm amidst that mindset??!! LOL!
I'm digesting this. I hadn't considered this at all & yet it should have been exactly what I should have considered.
It will take me a little time. And, I imagine that I'll need a bit of help. And, even when understanding the individual company currency practices, I would then need to view how the holdings within the ETF are weighted, no?
Yeah but...
Mar 17th & Apr 17 (or was it 18th?) had those '90 outside days' (massive volume, massive market participation, good, solid advance). At the time, it was the two best days of this year. Those gains were probably what "those you advise" KNEW were coming... and KNEW that the party would begin to unwind after April 17th. I bet they were "all antenae's" after April 17th (and so was I, for reasons below).
Just for refreshers, let's re-read Eric's March 23rd Post #23257. Keep in mind that the upcoming Apr 17th was about to give us the strongest day of the year...
So……. Eric…. You must understand that the bulk of the 2006 liquidity is injecting itself as I type. I believe that the bulk of it (possibly 75%) is already deposited…. It’s just being put to work.
You need to look back over the years & see what transpires via liquidity from say Feb 20 to Apr 20. It has always been a time that the markets are bathing in liquidity. The liquidity dries up, but the euphoria in traders continues (therefore, they help keep the market boosted sometimes). Then again, if earnings come out thereafter--- and they are ‘good earnings’--- then THAT euphoria carries the market a tad farther.
Also, when & if gold does turn...
This tidbit from Justice Little at Agora Financial... I thought you might jot it down & see how it performs:
"The second "G" this week is for GDX, the new Gold Miners ETF (GDX:AMEX) trading on the American Stock Exchange.
GDX is designed to track the Amex Gold Miners Index ($GDM: AMEX) and is composed of the following stocks, by order of percentage weighting:
Newmont Mining 13.51
Barrick Gold 8.50
AngloGold Ashanti 7.51
Goldcorp 6.53
Gold Fields 6.50
Freeport-McMoRan 6.16
Glamis Gold 4.97
Harmony Gold 4.37
Kinross Gold 4.06
Buenaventura 3.72
GDX could be a good way to pick up exposure to the gold mining sector quickly and efficiently when the correction worm turns, as it no doubt will. Barring that, GDX is another useful proxy to keep on the radar screen, tracking the gold miners with perhaps a little more fidelity than $XAU or $HUI.
Bernanke has finally bared his teeth and shown some inflation-fighting spine, sending gold into a correction and dashing the market's hopes of a kindler, gentler Fed policy.
But in time, the market will realize, with a lag as always, that all roads ultimately lead to inflation, and then gold will be off to the races again.
Keep your eyes open for strong volume moves to the upside."
Count me in that camp too!
You know what Richard? I played with Goldcorp (GG) as I told you before. I rode it up, then sold. It went down... I bought again when MACD turned up. I rode it from 26 to 41 & the stock started to drop. MACD turned. I sold at 39+... thus I missed the high that... hmmmmrummmmph... my father nearly grabbed. He sold at $40+. (Weeks earlier, I had called him and said "Hey Dad... humor me... buy some GG". He said "it's good?". "Yes, dad... just humor me, okay? Buy some." A couple of hours later, he trumped me with a large position in GG... then sold higher than I did. Dannnnnnnnnng. I was impressed. He's happy. I'm happy too, but for a different reason --> just gettin' brownie points for heaven... everyone needs a stash, no?! ).
Anyway... it was MACD that made me make the trades when, in all fairness, everything I read.. every publication... every "clip" on Bloomberg... all said that it was a momentary pause. Well now... MACD hasn't signaled any sort of change. I just wait because until I see a convincing turn, I can't lower the risk of the trade.
That's just one of many little stories, but MACD has really helped me on specific issues.
I'm happy with holding "very little" because that just shows how keenly we anticipated what's coming. Or... maybe we learned from the bruises of prior periods of being blindsided? You know how I hate "blindsided". Some folks hate risk or loss. I can handle risk... I can choke down loss in a ladylike manner, but I just absolutely hate being blindsided.
Thus... we read... and we read... and we read. And, when all is said and done, the reading didn't nail down anything other than give us heartburn. MACD nailed most of my trades.
Bravo to the chartists of the world.
Remember when that arrogant %&^&*^%$#%^& said "I've never seen a wealthy technical analyst"? As if the technicians were too risk adverse? Frankly, I have no idea if the technical analysts are wealthy, but my hat is off to their methods, that's for sure. I read every chart posted here & elsewhere. I'm not sure I see the whole picture everytime, but every view of every chart leads to better understanding.
We must ponder..
Would you cut production when oil prices are $70/barrel?
Would you, as a mortgage banker, not salivate that repricing of ARMS would bring in basketloads of profits due to the original loan being made with cheap money? And, if the creditor was creditworthy & wanted to convert to a fixed loan, wouldn't you send out legions of mortgage lenders to grab that new loan, collect your new fees, and sit back with newly acquired info in your loan portfolio (thus lowering risk assessments) ??
If you faced a huge derivative loss if the Index's dropped past a benchmark (ie Today), would you buy the Dow component with the biggest multiple to mitigate that loss? What stock(s) had the biggest volume buys during the last hour?? And, who bought them?
Inquiring minds want to know... cuzzzzzzzzz, I ain't buyin' it just like YOU ain't buyin' it!
I (personnally) believe he will mirror the same road of the Fed in the '30-'33 era... though he is an expert on the era. Unfortunately, I think he's trapped ... and the fallout remains to be seen. He's inherited a headache no one can cure.
Yeah, but.... yeah but...
It takes a full year to get the 4%. You get that same return in just a few days, no??? Or, have things changed over these last months? ( N O T !!!!). LOL! Missed you Nick! Scannin' the headlines of the thread, saw that Eric is dating Ms Lilly! Is this okay with you??!!
How intuitive Richard... within hours, we're below 11,000 !
I certainly hope you all read my response to Eric on liquidity... the timeframe it heaps up... and the time frame it dwindles. Right about now, we're merely where we were Mar 3rd ('Pre' runnup). The trick will be "where does it go from here".
I'm not real optimistic this time. Metals are certainly displaying the volatility of a market 'about to turn south' and a market that is past it's peak. That's important. Gold doesn't seem to know what it wants to be when it grows up.... silver is displaying the same whiplashes (though not for the same reasons). Copper is unbelievable... in unchartered territory for several months... and is showing the same signs of chugging, churning, volatile "never give up" signs that (historically) precede a downward turn.
Lots of things to say... no time... I really, really would like to "take the time". We'll see! And, if I do get the time, you will be here with all the gang, no?? :)
Just thought I'd sneak a comment...
Just read your recent posts. Follow me on this one (noting the time table) for calendar year corporations:
.... Bonus Pay: For any Corporate Shareholder/Officer, bonus for 2005 must be paid by 12/31/2005. Their bonus pay is a done deal by midnight, December 31. For everyone else getting a bonus (accrued in 2005), the old rule was that the corporation had to pay them by tax return date (Mar 15). Now, the rule is "pay as soon as administratively feasible". This means they could get bonus pay accrued in 2005 anytime Jan 1 to (let's say) end-of-April, 2006. So... Yes! Your points on bonus pay are "in-play"... especially because March is the preferable month to pay this out.
... Your pessimism: Does this include worries about the dollar? Are you wondering about disposable income for the folks who just got their "minimum payments" jacked up on their charge cards for... ummmmmmm.... FOREVER??? Do you think that the wealth effect is getting an 'unstable' sense of being for most folks? Since Gold doubled since year 2000, do you think that our "dollar" has lost 50% of its value & we don't know it yet?
Do you wonder what will happen now that China has put a 10% tax on export of anything containing natural resources?? (Pots & pans, anything wood, anything made from anything real??) Do you not perceive that tax disincentive as "China will buy from the world but will, given their new policy, try not to return the resource to any country but their own"? That they will use & re-use the resource only for themselves??? And do you see China as having stolen our manufacturing base WHILE ALL THE TIME "lending money" to us to do so?? And now that they have built it with our IOU's, that they will now feed their own population consumption needs?
Do you wonder what will happen from global warming, the Beatle eating up the pine trees in Canada (an area 3 times the size of Maryland... and growing every day), the ocean registering 12 degrees higher in the New England area... the increasingly violent weather? Would you want to own an insurance company who insures against these unheard of disasters that are happening while, at the same time, the largest generation ever hitting the earth is insured to the HILT and will (most assuredly) kick off?? That the reserves could possibly sustain... over time... that type of continued drain???
We could go on, and on, and on...
But it's better to try to nail down preservation of our wealth in terms of declining buying power. No matter what the problem (environment or otherwise), we can not solve it without economic strength. This dribbles right down to the personal household level. I am sooooooooo convinced that the balance sheet of the USA is soooooooo whoppey-jawed (read "askewed") that it is about to reel in the inevitable day of reckoning sooner rather than (their "hopeful") later.
Stay tuned. I don't think it's that far down the road.
And, don't say you "never wonder"... we know you do :)
Wish is were that easy. "Pay as you go" puts the blame on no one.. "Trust Funds" puts the blame all over the place!
Here's a better 'read' than I could possibly write:
What Are the OASDHI Trust Funds?
The Old-Age and Survivors Insurance (OASI), Disability Insurance (DI), and Hospital Insurance (HI) trust funds are separate accounts in the United States Treasury to which FICA and SECA taxes are credited.
How Are the OASDI Trust Fund Dollars Used?
By law, FICA and SECA tax dollars are reserved solely to pay benefits and administer5 the OASDI and HI programs. Dollars not used to pay for current benefits or administration are invested by the Treasury in special issue, interest-bearing United States government securities6. An analogy would be an individual who, after paying the monthly bills, buys a Certificate of Deposit or puts money into an interest-bearing account. And, analogous to the way a bank or money fund might invest an individual's dollars in loans for mortgages or college educations or building shopping centers, the United States Treasury invests the Social Security reserves in administering the federal government, i.e., paying for highway construction, defense, Head Start, and so on.
The trust funds hold the securities just as an individual investor holds the certificate or savings book. The securities earn interest for the trust funds, just as investments do for an individual. In 1998, $49.3 billion in interest was earned and then reinvested in securities belonging to OASDI.
Why Have Trust Funds?
The securities held by the trust funds are future financial claims against the government. Securities in the Social Security trust fund accounts, along with other Social Security revenues, give the Treasury the authority to write checks. Just as a positive balance in a checking account means an individual can draw on that account, a balance in the Social Security trust funds means that checks can be written on the Social Security account.
While all government programs have Treasury accounts, for Social Security, the trust fund designation means that the total amount received by Social Security beneficiaries is not subject to the annual Congressional appropriation process. As long as there is are balances in Social Security's trust fund accounts, benefits are paid with monies designated specifically for that purpose.
The Social Security trust funds represent a long-term commitment on behalf of the government to Social Security. And, as long as the program has been in operation (64 years), the government has not defaulted on these claims.
What Is the Current and Future Status of the OASDI Trust Funds?
The Trustees, using the intermediate, or best estimate, assumptions in the 1999 Old-Age, Survivors and Disability Insurance Trustees Report, project that the OASDI trust funds will accumulate assets for the next 15 years.
However, the Trustees project that beginning in 2014 some of the interest earnings will need to be combined with tax revenue to cover benefit payments. By 2022, income (including contributions and interest) will fall short of expenditures, and it will be necessary to start redeeming the trust fund securities. The Trustees report projects the OASDI trust funds will be depleted in 2034.
http://www.aarp.org/research/socialsecurity/financing/aresearch-import-353-FS40R.html#SECOND