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Picassa- some very good points. When it is your posession there is no one between you and it that can build a ponzi scheme, go bankrupt, use it to settle court enforced judgements, tax it to the hilt, etc. Paper gold and silver is fine for trading just like any other stock. Just don't be fooled thinking you own real gold.
...........al
Joe- smart move. I converted my IRA to a Roth years ago and never looked back. Costly up front but those are the rules. My and my wifes IRAs are loaded with ETNL stock. And I am patient.
......al
Hi Shaun- I don't want to put a damper on your excitement, but neither do I want to see you suffer a big disappointment. The uplisting is not and will not be a big trigger to shoot the share price "to da moon". It is only another step in the right direction. We may well see a spike in pps, I don't know. I am looking for higher daily norms after the uplist. Given the current situations and my own logic I'm looking for a plateau in the .025¢ area after all is said and done and the hype dies down. Remember, pre split this had a high of 16¢ in today's shares with no revenues. The company will still have to prove to investors and potential investors that it can be profitable. The uplist paves the way for this as certain reports to the SEC are mandatory to maintain status on an exchange. These reports will be the keys to lifting the boat. I'm in that boat with a lot of others. I'm not looking for a quick flip and out. Besides the fact that I believe all are entitled to their opinions, looking long term keeps me out of the day to day banter. Some of the negativity I see posted just brings a smile. Because I know that one day I'll be joining Heppie laughing all the way to the bank. I don't post much, but be assured I am still here and very positive on our long term prospects. Best of luck to you.
..........al
DOW could break into the 6000's today on financial stock worries. All this doom and gloom and my ETNL shares are just meandering along almost unscathed. Should I be worried?
.........al
Ameritrade streamer showing 100,000 by 9:30:05 eom
100,000 shares , that was quick eom
More shortages:
By Javier Blas
Financial Times, London
Wednesday, February 25, 2009
http://www.ft.com/cms/s/0/666b7ff0-036c-11de-b405-000077b07658.html?ncli...
NEW YORK -- The rush by retail investors into bullion coins is creating shortages as mints across the world struggle to meet the surge in demand, dealers and mint officials say.
The scarcity is lifting coin premiums to as much as 5 per cent above the spot gold price, a level reached briefly after the collapse of Lehman Brothers last September, when coin shortages also surfaced.
Spot gold in London on Wednesday traded at $972 an ounce, below last week’s peak of $1,004.5.
"There is demand for double or triple what the US mint is able to produce," said Michael Kramer, president of MTB in New York, one of the four US gold dealers authorised to purchase bullion coins directly from the government’s mint.
The US Mint has sold 193,500 ounces of its popular American Eagle gold coin in the first seven weeks of this year, the same amount it shipped during the whole of 2007 and about the same as in the first six months of last year.
"The demand is extraordinary. All the coins we got on Monday are gone today [Tuesday] and we will not be able to take any order until the following week," Mr Kramer said. "It is the same with other mints."
Bullion coins used to be bought mainly by collectors and gold bugs, but the financial crisis is leading regular retail investors to embrace them, dealers say.
Although the surge in coin demand is a bullish signal for gold prices, the fact that mints cannot match demand means that the potential extra consumption does not push spot prices higher, but just drives premiums above normal levels.
The Rand Refinery in Johannesburg, which mints the world's most popular gold coin, South Africa's Krugerrand, said demand was above its maximum capacity, even after doubling last month to 20,000 ounces from 10,000 ounces a week.
Johan Botha, head of precious metals sales at the Rand Refinery, said there was demand for more from international investors, pointing to strong sales to Switzerland, the UK and Germany. "If we were able to produce 30,000 ounces,the market would absorb it," he said.
Mr Kramer said MTB had Krugerrand orders equal to three months of refinery supplies to the company.
The New Zealand Mint said it was doing as much business in a day as in a month a year ago, mostly servicing global investors.
Michael O'Kane, head of gold sales at the New Zealand Mint, said: "Most mints and bullion manufacturers are struggling to meet current demand levels."
Investors taking delivery:
By Carolyn Cui and Allen Sykora
The Wall Street Journal
Wednesday, February 25, 2009
http://online.wsj.com/article/SB123552294962865061.html
Some investors are so worried about the prospect of economic collapse that they are buying gold and having it delivered to them, rather than holding the precious metal in the form of futures contracts or other securities.
The global recession and worries about the stability of the financial system have sent the price of gold to $1,000 an ounce. But more surprising is that buyers are taking the unusual and expensive step of taking possession of it.
"We're having some of our strongest months ever," said Scott Thomas, president and chief executive of American Precious Metals Exchange, a precious-metals dealer in Edmond, Okla. "The bottom line is our numbers are probably double what they were last year, and last year was very busy."
Bob Coleman, who runs a bullion fund out of Nampa, Idaho, has taken multiple deliveries of gold and silver since last fall for his clients. The fund, Dollars and Sense Growth Fund, primarily invests in precious metals for high-net-worth individuals.
"It's more of a trust issue," says Mr. Coleman. "Given all the turmoil in the market, people prefer to have access to the metal."
Sales of American Eagle gold bullion coins at the U.S. Mint in Philadelphia more than doubled in the first two months of this year.
Investors are also flocking to gold coins. At the U.S. Mint, a total of 147,500 ounces of American Eagle gold bullion coins were sold in the first two months this year, a surge of 176% from the same period last year.
Demand is rising at the Comex, the metals division of the New York Mercantile Exchange, where investors increasingly are choosing to take physical delivery of gold, rather than cash, once their futures contacts expire.
Rising delivery orders have kept Brink's Inc., a major carrier for the Comex, busy. The Richmond, Va., company said it saw a large spike in clients shipping gold and silver from the exchange over the past few months.
Tony Klancic, an account executive at Lind-Waldock, a Chicago commodities brokerage, says he has been taking calls since September from individual investors wanting to buy physical gold.
These are "real people in rural America with money under the mattress, and wealthy individuals coming to the futures market strictly intending to take delivery," Mr. Klancic said.
In December, 4.5% of gold contracts ended in delivery, compared with 3.4% a year earlier, according to the exchange. Investors also are taking delivery of silver, with contracts ending in delivery rising to 7.3% from 4.7%. December is typically a big month for deliveries, and in January, deliveries remained higher than the year before.
Jewelers and other users of metals are among the buyers who take possession of gold and silver. But with sales of jewelry down and other industrial users cutting back, it appears that investors are causing the increase.
Gold deliveries peaked at more than 8% in the early 1980s, when Mexico defaulted on its foreign debt and the world economy was in recession. Deliveries dropped and have gradually fallen back to the range of 2% in recent years.
Gold pierced the $1,000 level last Friday, the first time since March 2008. On Tuesday, the February contract closed at $969.10 per troy ounce. So far this year, the precious metal is up 9.7%.
Taking physical delivery of gold can be costly and complicated. Investors typically buy gold on exchanges using futures contracts. Since each contract represents 100 ounces of gold, an investor would have to pay $96,910 per contract, based on Tuesday's close, in order to take delivery. By contrast, investors need to put down only $3,999 up front to trade such a futures contract.
"It is an expensive proposition," says Jeff Christian, managing director at CPM Group, a New York precious-metal research firm.
Also, the logistics of buying a big lump of metal might be daunting for smaller players. Investors who decide to take delivery of gold contracts face high storage and insurance costs. And if buyers actually want the gold or other precious metals in their possession, they must arrange for delivery by armored truck. In a recent delivery of 100,000 ounces of silver, Mr. Coleman paid $3,000 to transport the metal from New York to Idaho.
just postulating for a minute. I do believe the last pump and dump was initiated by NAR. I can't prove it but all roads lead that way. So it didn't work as well as they planned, but are they possibly strapped for cash necessitating the pump? If they are still in need of cash could they be the big seller holding this back for now? I don't know, just speculating on the possibility. It would answer a lot of unanswered questions.
..........al
end of article confides gold manipulation by the US gov't
Doomed by the Myths of Free Trade: How the Economy Was Lost
By Paul Craig Roberts
Tuesday, February 24, 2009
http://www.counterpunch.org/roberts02242009.html
The American economy has gone away. It is not coming back until free trade myths are buried 6 feet under.
America's 20th century economic success was based on two things. Free trade was not one of them. America's economic success was based on protectionism, which was ensured by the union victory in the Civil War, and on British indebtedness, which destroyed the British pound as world reserve currency. Following World War II, the US dollar took the role as reserve currency, a privilege that allows the US to pay its international bills in its own currency.
World War II and socialism together ensured that the US economy dominated the world at the mid-20th century. The economies of the rest of the world had been destroyed by war or were stifled by socialism [in terms of the priorities of the capitalist growth model: Editors.]
The ascendant position of the US economy caused the US government to be relaxed about giving away American industries, such as textiles, as bribes to other countries for cooperating with America's cold war and foreign policies. For example, Turkey's US textile quotas were increased in exchange for overflight rights in the Gulf War, making lost US textile jobs an off-budget war expense.
In contrast, countries such as Japan and Germany used industrial policy to plot their comebacks. By the late 1970s, Japanese auto makers had the once dominant American auto industry on the ropes. The first economic act of the "free market" Reagan administration in 1981 was to put quotas on the import of Japanese cars in order to protect Detroit and the United Auto Workers.
Eamonn Fingleton, Pat Choate, and others have described how negligence in Washington aided and abetted the erosion of America's economic position. What we didn't give away, the United States let be taken away while preaching a "free trade" doctrine at which the rest of the world scoffed.
Fortunately, the U.S.'s adversaries at the time, the Soviet Union and China, had unworkable economic systems that posed no threat to America's diminishing economic prowess.
This furlough from reality ended when Soviet, Chinese, and Indian socialism surrendered around 1990, to be followed shortly thereafter by the rise of the high speed Internet. Suddenly American and other First World corporations discovered that a massive supply of foreign labor was available at practically free wages.
To get Wall Street analysts and shareholder advocacy groups off their backs, and to boost shareholder returns and management bonuses, American corporations began moving their production for American markets offshore. Products that were made in Peoria are now made in China.
As offshoring spread, American cities and states lost tax base, and families and communities lost jobs. The replacement jobs, such as selling the offshored products at Wal-Mart, brought home less pay.
"Free market economists" covered up the damage done to the US economy by preaching a New Economy based on services and innovation. But it wasn't long before corporations discovered that the high speed Internet let them offshore a wide range of professional service jobs. In America, the hardest hit have been software engineers and information technology (IT) workers.
The American corporations quickly learned that by declaring "shortages" of skilled Americans, they could get from Congress H-1b work visas for lower paid foreigners with whom to replace their American work force. Many US corporations are known for forcing their US employees to train their foreign replacements in exchange for severance pay.
Chasing after shareholder return and "performance bonuses," US corporations deserted their American workforce. The consequences can be seen everywhere. The loss of tax base has threatened the municipal bonds of cities and states and reduced the wealth of individuals who purchased the bonds. The lost jobs with good pay resulted in the expansion of consumer debt in order to maintain consumption. As the offshored goods and services are brought back to America to sell, the US trade deficit has exploded to unimaginable heights, calling into question the US dollar as reserve currency and America’s ability to finance its trade deficit.
As the American economy eroded away bit by bit, "free market" ideologues produced endless reassurances that America had pulled a fast one on China, sending China dirty and grimy manufacturing jobs. Free of these "old economy" jobs, Americans were lulled with promises of riches. In place of dirty fingernails, American efforts would flow into innovation and entrepreneurship. In the meantime, the "service economy" of software and communications would provide a leg up for the work force.
Education was the answer to all challenges. This appeased the academics, and they produced no studies that would contradict the propaganda and, thus, curtail the flow of federal government and corporate grants.
The "free market" economists, who provided the propaganda and disinformation to hide the act of destroying the US economy, were well paid. And as Business Week noted, "outsourcing's inner circle has deep roots in GE (General Electric) and McKinsey," a consulting firm. Indeed, one of McKinsey's main apologists for offshoring of US jobs, Diana Farrell, is now a member of Obama's White House National Economic Council.
The pressure of jobs offshoring, together with vast imports, has destroyed the economic prospects for all Americans, except the CEOs who receive "performance" bonuses for moving American jobs offshore or giving them to H-1b work visa holders. Lowly paid offshored employees, together with H-1b visas, have curtailed employment for older and more experienced American workers. Older workers traditionally receive higher pay. However, when the determining factor is minimizing labor costs for the sake of shareholder returns and management bonuses, older workers are unaffordable. Doing a good job, providing a good service, is no longer the corporation's function. Instead, the goal is to minimize labor costs at all cost.
Thus "free trade" has also destroyed the employment prospects of older workers. Forced out of their careers, they seek employment as shelf stockers for Wal-Mart.
I have read endless tributes to Wal-Mart from "libertarian economists," who sing Wal-Mart's praises for bringing low price goods, 70 per cent of which are made in China, to the American consumer. What these "economists" do not factor into their analysis is the diminution of American family incomes and government tax base from the loss of the goods producing jobs to China. Ladders of upward mobility are being dismantled by offshoring, while California issues IOUs to pay its bills. The shift of production offshore reduces US GDP. When the goods and services are brought back to America to be sold, they increase the trade deficit. As the trade deficit is financed by foreigners acquiring ownership of US assets, this means that profits, dividends, capital gains, interest, rents, and tolls leave American pockets for foreign ones.
The demise of America's productive economy left the US economy dependent on finance, in which the US remained dominant because the dollar is the reserve currency. With the departure of factories, finance went in new directions. Mortgages, which were once held in the portfolios of the issuer, were securitized. Individual mortgage debts were combined into a "security." The next step was to strip out the interest payments to the mortgages and sell them as derivatives, thus creating a third debt instrument based on the original mortgages.
In pursuit of ever more profits, financial institutions began betting on the success and failure of various debt instruments and by implication on firms. They bought and sold collateral debt swaps. A buyer pays a premium to a seller for a swap to guarantee an asset's value. If an asset "insured" by a swap falls in value, the seller of the swap is supposed to make the owner of the swap whole. The purchaser of a swap is not required to own the asset in order to contract for a guarantee of its value. Therefore, as many people could purchase as many swaps as they wished on the same asset. Thus, the total value of the swaps greatly exceeds the value of the assets.* [See footnote.)
The next step is for holders of the swaps to short the asset in order to drive down its value and collect the guarantee. As the issuers of swaps were not required to reserve against them, and as there is no limit to the number of swaps, the payouts could easily exceed the net worth of the issuer.
This was the most shameful and most mindless form of speculation. Gamblers were betting hands that they could not cover. The US regulators fled their posts. The American financial institutions abandoned all integrity. As a consequence, American financial institutions and rating agencies are trusted nowhere on earth.
The US government should never have used billions of taxpayers' dollars to pay off swap bets as it did when it bailed out the insurance company AIG. This was a stunning waste of a vast sum of money. The federal government should declare all swap agreements to be fraudulent contracts, except for a single swap held by the owner of the asset. Simply wiping out these fraudulent contracts would remove the bulk of the vast overhang of "troubled" assets that threaten financial markets.
The billions of taxpayers' dollars spent buying up subprime derivatives were also wasted. The government did not need to spend one dime. All government needed to do was to suspend the mark-to-market rule. This simple act would have removed the solvency threat to financial institutions by allowing them to keep the derivatives at book value until financial institutions could ascertain their true values and write them down over time.
Taxpayers, equity owners, and the credit standing of the US government are being ruined by financial shysters who are manipulating to their own advantage the government's commitment to mark-to-market and to the "sanctity of contracts." Multi-trillion dollar "bailouts" and bank nationalization are the result of the government's inability to respond intelligently.
Two more simple acts would have completed the rescue without costing the taxpayers one dollar: an announcement from the Federal Reserve that it will be lender of last resort to all depository institutions including money market funds, and an announcement reinstating the uptick rule.
The uptick rule was suspended or repealed a couple of years ago in order to permit hedge funds and shyster speculators to ripoff American equity owners. The rule prevented short-selling any stock that did not move up in price during the previous day. In other words, speculators could not make money at others' expense by ganging up on a stock and short-selling it day after day.
As a former Treasury official, I am amazed that the US government, in the midst of the worst financial crises ever, is content for short-selling to drive down the asset prices that the government is trying to support. No bailout or stimulus plan has any hope until the uptick rule is reinstated.
The bald fact is that the combination of ignorance, negligence, and ideology that permitted the crisis to happen still prevails and is blocking any remedy. Either the people in power in Washington and the financial community are total dimwits or they are manipulating an opportunity to redistribute wealth from taxpayers, equity owners and pension funds to the financial sector.
The Bush and Obama plans total 1.6 trillion dollars, every one of which will have to be borrowed, and no one knows from where. This huge sum will compromise the value of the US dollar, its role as reserve currency, the ability of the US government to service its debt, and the price level. These staggering costs are pointless and are to no avail, as not one step has been taken that would alleviate the crisis.
If we add to my simple menu of remedies a ban, punishable by instant death, for short selling any national currency, the world can be rescued from the current crisis without years of suffering, violent upheavals and, perhaps, wars.
According to its hopeful but economically ignorant proponents, globalism was supposed to balance risks across national economies and to offset downturns in one part of the world with upturns in other parts. A global portfolio was a protection against loss, claimed globalism's purveyors. In fact, globalism has concentrated the risks, resulting in Wall Street's greed endangering all the economies of the world. The greed of Wall Street and the negligence of the US government have wrecked the prospects of many nations. Street riots are already occurring in parts of the world. On Sunday February 22, the right-wing TV station, Fox "News," presented a program that predicted riots and disarray in the United States by 2014.
How long will Americans permit "their" government to rip them off for the sake of the financial interests that caused the problem? Obama’s cabinet and National Economic Council are filled with representatives of the interest groups that caused the problem. The Obama administration is not a government capable of preventing a catastrophe.
If truth be known, the "banking problem" is the least of our worries. Our economy faces two much more serious problems. One is that offshoring and H-1b visas have stopped the growth of family incomes, except, of course, for the super rich. To keep the economy going, consumers have gone deeper into debt, maxing out their credit cards and refinancing their homes and spending the equity. Consumers are now so indebted that they cannot increase their spending by taking on more debt. Thus, whether or not the banks resume lending is beside the point.
The other serious problem is the status of the US dollar as reserve currency. This status has allowed the US, now a country heavily dependent on imports just like a third world or lesser-developed country, to pay its international bills in its own currency. We are able to import $800 billion annually more than we produce, because the foreign countries from whom we import are willing to accept paper for their goods and services.
If the dollar loses its reserve currency role, foreigners will not accept dollars in exchange for real things. This event would be immensely disruptive to an economy dependent on imports for its energy, its clothes, its shoes, its manufactured products, and its advanced technology products.
If incompetence in Washington, the type of incompetence that produced the current economic crisis, destroys the dollar as reserve currency, the "unipower" will overnight become a third world country, unable to pay for its imports or to sustain its standard of living.
How long can the US government protect the dollar's value by leasing its gold to bullion dealers who sell it, thereby holding down the gold price? Given the incompetence in Washington and on Wall Street, our best hope is that the rest of the world is even less competent and even in deeper trouble. In this event, the US dollar might survive as the least valueless of the world's fiat currencies.
message to President Obushma;
Mr President,
We have an economic problem that you have been saddled with and I'm sure you are trying your best to cope with it. While promising change for all that time, all I have been seeing is more tax dollars that you don't even have being sent to those people that caused this mess in the first place. Hence I have started calling you President Obushma. There seem to be none of the revolutionary changes needed being done to cleanse America of the corruption that brought us to this point. Not to be one that is critical without trying to help, I do have a solution to the current unemployment situation that may be the trigger necessary to start the process of getting us out of this mess. It will not take a lot of effort on your part. Just one 2 minute speech to the press. All you have to do is tell the world that Mexico is in negotiations to apply for statehood. Think of the reaction of corporate America. For years since the Nafta debacle our large corporations have been shutting factories putting Americans out of work as they sought the cheap labor south of the border. I think being able to escape the watchful eyes of the EPA and OSHA was a bonus. How would the unemployment problem be solved with an announcement that Mexico was applying for statehood? Simple. Corporate America would hire 3-5 million people as lobbyists to descend on Washington to do their best to prevent it. More peoples working drawing paychecks spending money. Housing in the DC general vacintiy would rise as demand increases possibly helping the slumping real estate market. The ripple effect on the general economy could be just what we need to spark a recovery. And instead of days of senseless meetings and trillions of taxpayer dollars being currently wasted, all it would take is 2 minutes of your time and $0 taxdollars being spent on corporate welfare complete with those billions in executive bonuses. President Obushma, the ball is in your court. A simple 2 minute speech could be the very key to our problems.
Sincerely,
A taxpayer that voted for Ron Paul
Europe seems to be in worse trouble than here. I cut this from John Mauldin's latest letter. I'll link the whole article for anyone that wants to read it. Europe falls, the Americas fall, leaving those gold loving far eastern countries solvent.
http://www.investorsinsight.com/blogs/thoughts_from_the_frontline/archive/2009/02/20/while-rome-burns.aspx
The Risk in Europe
I mentioned last week that European banks are at significant risk. I want to follow up on that point, as it is very important. Eastern Europe has borrowed an estimated $1.7 trillion, primarily from Western European banks. And much of Eastern Europe is already in a deep recession bordering on depression. A great deal of that $1.7 trillion is at risk, especially the portion that is in Swiss francs. It is a story that could easily be as big as the US subprime problem.
In Poland, as an example, 60% of mortgages are in Swiss francs. When times are good and currencies are stable, it is nice to have a low-interest Swiss mortgage. And as a requirement for joining the euro currency union, Poland has been required to keep its currency stable against the euro. This gave borrowers comfort that they could borrow at low interest in francs or euros, rather than at much higher local rates.
But in an echo of teaser-rate subprimes here in the US, there is a problem. Along came the synchronized global recession and large Polish current-account trade deficits, which were three times those of the US in terms of GDP, just to give us some perspective. Of course, if you are not a reserve currency this is going to bring some pressure to bear. And it did. The Polish zloty has basically dropped in half compared to the Swiss franc. That means if you are a mortgage holder, your house payment just doubled. That same story is repeated all over the Baltics and Eastern Europe.
Austrian banks have lent $289 billion (230 billion euros) to Eastern Europe. That is 70% of Austrian GDP. Much of it is in Swiss francs they borrowed from Swiss banks. Even a 10% impairment (highly optimistic) would bankrupt the Austrian financial system, says the Austrian finance minister, Joseph Proll. In the US we speak of banks that are too big to be allowed to fail. But the reality is that we could nationalize them if we needed to do so. (And for the record, I favor nationalization and swift privatization. We cannot afford a repeat of Japan's zombie banks.)
The problem is that in Europe there are many banks that are simply too big to save. The size of the banks in terms of the GDP of the country in which they are domiciled is all out of proportion. For my American readers, it would be as if the bank bailout package were in excess of $14 trillion (give or take a few trillion). In essence, there are small countries which have very large banks (relatively speaking) that have gone outside their own borders to make loans and have done so at levels of leverage which are far in excess of the most leveraged US banks. The ability of the "host" countries to nationalize their banks is simply not there. They are going to have to have help from larger countries. But as we will see below, that help is problematical.
Western European banks have been very aggressive in lending to emerging market countries worldwide. Almost 75% of an estimated $4.9 trillion of loans outstanding are to countries that are in deep recessions. Plus, according to the IMF, they are 50% more leveraged than US banks.
Today the euro rallied back to $1.26 based upon statements from German authorities that were interpreted as a potential willingness to help out non-German (in particular, Austrian) banks.
However, this more sobering note from Strategic Energy was sent to me by a reader. It nicely sums up my concerns:
"It is East Europe that is blowing up right now. Erik Berglof, EBRD's chief economist, told me the region may need €400bn in help to cover loans and prop up the credit system. Europe's governments are making matters worse. Some are pressuring their banks to pull back, undercutting subsidiaries in East Europe. Athens has ordered Greek banks to pull out of the Balkans.
"The sums needed are beyond the limits of the IMF, which has already bailed out Hungary, Ukraine, Latvia, Belarus, Iceland, and Pakistan -- and Turkey next -- and is fast exhausting its own $200bn (€155bn) reserve. We are nearing the point where the IMF may have to print money for the world, using arcane powers to issue Special Drawing Rights. Its $16bn rescue of Ukraine has unravelled. The country -- facing a 12% contraction in GDP after the collapse of steel prices -- is hurtling towards default, leaving Unicredit, Raffeisen and ING in the lurch. Pakistan wants another $7.6bn. Latvia's central bank governor has declared his economy "clinically dead" after it shrank 10.5% in the fourth quarter. Protesters have smashed the treasury and stormed parliament.
"'This is much worse than the East Asia crisis in the 1990s,' said Lars Christensen, at Danske Bank. 'There are accidents waiting to happen across the region, but the EU institutions don't have any framework for dealing with this. The day they decide not to save one of these one countries will be the trigger for a massive crisis with contagion spreading into the EU.' Europe is already in deeper trouble than the ECB or EU leaders ever expected. Germany contracted at an annual rate of 8.4% in the fourth quarter. If Deutsche Bank is correct, the economy will have shrunk by nearly 9% before the end of this year. This is the sort of level that stokes popular revolt.
"The implications are obvious. Berlin is not going to rescue Ireland, Spain, Greece and Portugal as the collapse of their credit bubbles leads to rising defaults, or rescue Italy by accepting plans for EU "union bonds" should the debt markets take fright at the rocketing trajectory of Italy's public debt (hitting 112pc of GDP next year, just revised up from 101pc -- big change), or rescue Austria from its Habsburg adventurism. So we watch and wait as the lethal brush fires move closer. If one spark jumps across the eurozone line, we will have global systemic crisis within days. Are the firemen ready?"
While Rome Burns
I hope the writer is wrong. But the ECB is dithering while Rome burns. (Or at least their banking system is -- Italy's banks have large exposure to Eastern Europe through Austrian subsidiaries.) They need to bring rates down and figure out how to move into quantitative easing. Europe is at far greater risk than the US.
Great Britain and Europe as a whole are down about 6% in GDP on an annualized basis. The Bank Credit Analyst sent the next graph out to their public list, and I reproduce it here. (www.bcaresearch.com) In another longer report, they note that the UK, Ireland, Denmark, and Switzerland have the greatest risk of widespread bank nationalization (outside of Iceland). The full report is quite sobering. The countries on the bottom of the list are also in danger of having their credit ratings downgraded.
Aggregate Sovereign Credit Risk
This has the potential to be a real crisis, far worse than in the US. Without concerted action on the part of the ECB and the European countries that are relatively strong, much of Europe could fall further into what would feel like a depression. There is a problem, though. Imagine being a politician in Germany, for instance. Your GDP is down by 8% last quarter. Unemployment is rising. Budgets are under pressure, as tax collections are down. And you are going to be asked to vote in favor of bailing out (pick a small country)? What will the voters who put you into office think?
We are going to find out this year whether the European Union is like the Three Musketeers. Are they "all for one and one for all?" or is it every country for itself? My bet (or hope) is that it is the former. Dissolution at this point would be devastating for all concerned, and for the world economy at large. Many of us in the US don't think much about Europe or the rest of the world, but without a healthy Europe, much of our world trade would vanish.
However, getting all the parties to agree on what to do will take some serious leadership, which does not seem to be in evidence at this point. The US almost waited too long to respond to our crisis, but we had the "luxury" of only needing to get a few people to agree as to the nature of the problems (whether they were wrong or right is beside the point). And we have a central bank that could act decisively.
As I understand the European agreement, that situation does not exist in Europe. For the ECB to print money as the US and the UK (and much of the non-EU developed world) will do, takes agreement from all the member countries, and right now it appears the German and Dutch governments are resisting such an idea.
As I write this (on a plane on my way to Orlando) German finance minister Peer Steinbruck has said it would be intolerable to let fellow EMU members fall victim to the global financial crisis. "We have a number of countries in the eurozone that are clearly getting into trouble on their payments," he said. "Ireland is in a very difficult situation.
"The euro-region treaties don't foresee any help for insolvent states, but in reality the others would have to rescue those running into difficulty."
That is a hopeful sign. Ireland is indeed in dire straits, and is particularly vulnerable as it is going to have to spend a serious percentage of its GDP on bailing out its banks.
It is not clear how it will all play out. But there is real risk of Europe dragging the world into a longer, darker night. Their banks not only have exposure to our US foibles, much of which has already been written off, but now many banks will have to contend with massive losses from emerging-market loans, which could be even larger than the losses stemming from US problems. Plus, they are more leveraged. (This was definitely a topic of "Conversation" this morning when I chatted with Nouriel Roubini. See more below.)
EmergInvest
The Euro Back to Parity? Really?
I wrote over six years ago, when the euro was below $1, that I thought the euro would rise to over $1.50 (it went even higher) and then back to parity in the middle of the next decade. I thought the decline would be due to large European government deficits brought about by pension and health care promises to retirees, and those problems do still loom.
It may be that the current problems will push the euro to parity much sooner, possibly this year. While that will be nice if you want to vacation in Europe, it will have serious side effects on international trade. It clearly makes European exporters more competitive with the rest of the world, and especially the US. It also means that goods coming from Asia will cost more in Europe, unless Asian countries decide to devalue their currencies to maintain an ability to sell into Europe, which of course will bring howls from the US about currency manipulation. It is going to put pressure on governments to enact some form of trade protectionism, which would be devastating to the world economy.
Large and swift currency swings are inherently disruptive. We are seeing volatility in the currency markets unlike anything I have witnessed. I hope we do not see a precipitous fall in value of the euro. It will be good for no one. It is a strange world indeed when the US is having such a deep series of problems, the Fed and Treasury are talking about printing a few trillion here and a few trillion there, and at the very same time we see the dollar AND gold rising in value. Which all serves as a good set-up to the next section.
Do what you will, but be VERY careful before putting any type of government beauracracy(sp) in motion. The laws of unintended consequences were written by those folks.
.......al
Well, for the good news, if no shares are trading at least we know Clayton isn't dumping any more shares. Thanks libel for keeping the share count updated.
.......al
correction of words. I should have said put money into rather than invest. Over the years I have "invested " in only 3 penny stocks. 2 are now defunct, and the 3rd is still having a few growing pains. "Trade em" is a good byline.
......al
I don't know nor care which company everyone is arguing about. Take it from someone who is still playing pennystocks for well over 10 years. If it takes 3 major red flags to stop you from investing in a penny stock, a gagged TA should raise 4 red flags. Just FYI. GL2 all
.........al
o2- nice one. you got it an hour before me. still looking good from my point of view.
.......al
I think the taxman may have had something to do with it. If you owned some dividend paying stocks and owned the certs, the divi was paid directly to you, not thru the broker. Some countries ( I don't know which off hand ) would not notify the IRS about the payouts. It's called tax free dividends, LOL. With the certs in name only at the TA, the divis will be reported to the brokerage hence the IRS also gets notified.
.......al
And in today's fast moving markets a matter of seconds can turn a gain into a loss.
.......al
That was all changed in Jan, forget the exact day, but if you want your certs after that date they will only be held in your name at the TA. No more certs will be issued to individuals. I may have forgotten the exact date, but it is in effect now.
.......al
Market makers are allowed to naked short w/o margin requirements to make a market. I have spoken to a few that worked in that field and have been told it's a rare instance when they don't cover in the required 3 day period. They are under scrutiny and the fines are not worth the risk.
.......al
Keep up the good works. I have seen that new proposed tobacco tax. All that is going to do is make smuggling from the southern states more profitable therefore more likely to occur. NY is now trying to state tax the Indian reservations on cigarettes. Here in PA they are trying to raise the state tax on cigarettes also. Was this part of Obama's don't raise taxes on the ones that can least afford it plan? It seems every time I hear a politician talk anymore, I want to get closer and closer to off grid status.
..........al
I was reading some prior posts talking about short selling and a short position in ETNL. I found these requirements for shorting stocks at Scottrade on another board. Check the margin requirements.
..........al
The short sell maintenance requirements are as follows:
Price of Stock
Short Maintenance Requirement
$12.50 and up
40%
$5.00 - $12.49
$5 per share
$.01 - $4.99
$2.50 per share*
*You cannot initially short a position below $5.00 per share
Canadian stocks, Options, and any stock below $4.00 per share not marginable and therefore cannot be shorted.
Very true, LOL. Besides, nothing will get fixed to any significant degree anyway. Wall street is a hugh political campaign contributor. They hedge their bets by giving just as much to one as the other. Until lobbying and private campaign contributions are outlawed, doing the right thing for the country is a pipe dream. To a politician money always talks the loudest.
.........al
and tobacco. In Germany right after the fall in WW2 there was no currency and everything was done by barter. The 2 most prized items of barter were alcohol and tobacco.
...........al
I've checked with a lot of brokers. Even the offshore types, but margin requirements keep most small traders on the sidelines while the hedge funds clean up. Thanks again
..........al
I've been looking for a domestic broker that allows shorting of penny stocks. I was unaware of any that did. Thanks for the info.
..........al
z4- just curious, who are you using to short penny stocks and what is your margin requirement?
.......al
Only 8 million shares added in a month. Maybe something is changing. May be time to purchase a goldmine? LOL
..............al
Updated share count in iBox. eom
Good morning all. Some intersting reading on the board this weekend. Right now it's all an unknown. To me the future looks bright for the company, to others it doesn't. The fly in the ointment is the economy. I don't mean just a simple recession. This is going to be far worse. Don't forget the old taipan saying-"buy when there's blood in the streets". I had a widow on my route years ago( hi Heppie). Her husband was a broker when the market crashed in the great depression. He knew the market was punishing really good companies and was buying their stock for pennies after the crash. By the time he died, they had taken 7 around the world cruises. The widow's banker, broker, accountant and lawyer were at her house within an hour of a phone call request. Could our little stock selling for just pennies now produce the same kind of wealth? I don't think so but I do anticipate some very healthy returns.
.........al
interesting perspective: another long read for a Saturday morning
>From Vedant Mimani
The window of relative calm in the financial markets over the past 3 months has afforded all of us time to think and reflect about what happened and where we are going. By now we have all heard the various opinions ranging from those that feel things will get a lot worse to those that believe we are seeing once in a generation type opportunities. Who is right?
My Interpretation of What Happened
Since July 2007 we have seen a decline of about 50% in the value of most asset classes and this destruction in wealth has been attributed to the "Credit Crisis of 2008." Supposedly the pipes of capitalism were clogged and Mr. Paulson and Chairman Bernanke would have to play plumber and fix the credit markets to make sure our otherwise healthy economy got the lifeblood it needed to function smoothly. What I find particularly interesting is that during this so called "Credit Crisis" both money supply and credit were growing fine (you can see for yourself at the Federal Reserve Bank of St. Louis' website research.stlouisfed.org) and liquidity was never the issue. So then what happened and what were Paulson and Bernanke doing?
Let me share with you my theory. As I've mentioned before some people believe markets are smart and have predictive powers and some believe markets are irrational and manic depressive, and I believe markets are both and the challenge is to differentiate between when a market is being wise and when it is being foolish. I think starting July 2007, the markets started anticipating the destruction of credit and money and thus liquidity, which has yet to actually materialize on an economy wide basis and investors collectively abandoned the relatively more illiquid asset classes for the most liquid (government bonds, cash and gold). This is why almost every specialist believes they are seeing the "best opportunities they have seen in their entire careers." As usual the markets are a step ahead of reality.
The decline in asset markets did bring into question collateral values and loan quality resulting in "marked to market losses," which in turn affected the banks' solvency and ability to lend, but it was the asset markets moving first, not the other way around. Since I believe asset markets are ahead of the curve and actual credit and money destruction will follow, I am expecting asset markets to become even more dislocated as investors will continue to flee almost all asset classes in favor of the absolutely most liquid ones. Please note I am not implying all asset classes other than cash and gold are worthless; they are just and will remain for a while illiquid. This means in the intermediate term the owners of those assets will not benefit from price appreciation (unless there is a trade sale), but only from the cash flows those assets are able to generate for its owner.
Now what I think Mr. Paulson and Chairman Bernanke were doing by expanding the monetary base by swapping good money for "toxic assets" and forming agencies like TARP to deliver credit was really getting prepared to counter the upcoming credit deflation. I suspect the bond market will limit the Government's hand and so not enough money will be able to be created to counter the upcoming credit and money destruction, which will then force the Government to follow some more "out of the box" policies, but let's take it one step at a time.
My Comments on the Precious Metals Complex
Gold is the most liquid asset in the world because it is the only asset that cannot default; it is pure money. Given my thesis that we will continue to see a flight to liquidity, the intermediate and long term future for the precious metals complex looks bright. It is a sector we have been involved with for the past 8 years and will continue to be involved with going forward.
At the same time, there is a lot of "Johnny come lately" money in the sector and the complex seems to have the habit of initiating newcomers by absolutely annihilating them. I have no reason to think this time will be different.
Will Things Get Worse or Once in a Lifetime Opportunities?
So who is right? Those that say things will get worse or those that think we are seeing the opportunities of a lifetime?
Well it is both (although I believe most that think they are seeing the opportunities of a lifetime will be proven wrong). The reason things will get worse is because we have yet to see real credit and money destruction and liquidity will become a real issue. At the same time, as liquidity becomes an issue for almost everybody, we will see even greater dislocations in asset markets thereby creating huge opportunities for those that can provide liquidity. The key will be to balance your liquidity needs with the opportunities.
The challenge of striking the fine balance is compounded by the indebtedness levels of most Governments and the implications to their respective currencies, but again let's take it one step at a time.
From Rahul Saraogi
Stimulus
The credit crunch has created full fledged demand destruction around the world. While the first objective of governments around the world was to fix the credit markets and to fix the flow of money, the focus has rapidly shifted to stimulating demand and arresting its vicious collapse.
Keynes was a reluctant Keynesian, but governments around the world have become Keynesians with reckless abandon. Will the stimulus really work? The odds don't look very good.
There is a natural state of aggregate demand. While this demand can grow below potential for an extended period (thereby building slack in the economy), it can also grow above potential for an extended period, thereby borrowing demand from the future. The natural state of demand is an abstract concept and is dependent on hundreds of variables including, age of population, savings rates, propensity to consume, confidence and outlook for the future, ability to borrow etc.
Unemployment is only a symptom of the state of aggregate demand in the economy. It is by no means the sole indicator of slack in the economy. With savings rates in the US economy at 2% and confidence in the future low, the propensity to consume is rapidly declining among Americans. Chinese auto sales exceeded US auto sales on a monthly basis in January for the first time in history. This cannot be explained only on the basis of availability of finance and clearly indicates the differences in propensity to consume between the Americans and the Chinese. It is not clear therefore, whether the latest stimulus package by the Obama administration will do anything to make people consume more. The government might be able to take the horse to the water, but can it really make it drink.
What is true for the consumer holds true for businesses as well. If businesses are not optimistic about the growth of aggregate demand and are pessimistic about the outlook for profits, they will not invest in new capacity or infrastructure even with negative interest rates and handouts. In such a scenario, the government might have to step in and employ people directly and consume on behalf of them. It might also have to take the onus of infrastructure and capacity creation in its direct control. Whether the government even has the bandwidth and capability to execute the overwhelming number of projects that will be needed is untested and remains to be seen. As with all government interventions, the risk of misallocation of capital runs very high.
India on the other hand is on a very solid trajectory of growth in natural aggregate demand. A young, poor and aspiring population empowered by media, telecom and connectivity to the global economic system are a natural engine that cannot be suppressed (forget stimulus).
Gloom Deepens
The gloom everywhere on the planet is so thick that it can almost be touched. It is an almost a 180 degree turn from the collective euphoria the world had witnessed during the technology boom. Then it was believed that the Internet would solve all the problems of the planet and now it is believed that the US economy will run the whole world into the ground.
The reality as always is somewhere in between. It is entertaining to see forecasters write off 2009 and 2010 and to see them predict feeble growth for 2011. It might be interesting to go back and take a look at their 2007 forecasts for 2009 and 2010.
It might also be worth looking at forecasts for oil prices for 2009 and 2010 issued in July 2008 when oil was making new highs. Forecasts always say more about the forecaster than the future.
As investors, we have to make decisions based on facts: facts that are known today. As Warren Buffett says, "You are neither right nor wrong because the crowd agrees or disagrees with you, you are right because your facts are right and your reasoning is right."
Terms of Trade and Purchasing Power Parity
One of the biggest trends of the last 250 years was the continuous shift in terms of trade. This trend really accentuated in the last 100 years. The shift in terms was away from agriculture toward manufacturing and later away from manufacturing toward services.
As a result, developed economies like Britain could import more and more of the developing world's agricultural output in exchange for less and less of their own manufactured output.
The second half of the 20th century saw the shift of terms in favor of services away from manufacturing. This trend was driven by the growth of the US and its financial services industry. The dollarization of the world's financial system enabled the US and it's willing partner, the UK, to finance growth and consumption based on debt and deficits.
The underlying theme throughout this shift was the virtual monopoly over innovation and technology. During the entire period the wealthier countries invested significantly in research and innovation and were able to maintain their advantageous terms of trade. The Internet, telecom and air travel revolution changed all that. Technology and innovation is becoming democratized at an unimaginable pace. Already more than half of all scientists in the US are Indians and Chinese. The speed with which so called developing countries are moving up the innovation chain is mindboggling.
India through its space agency, ISRO, is commercially launching satellites at 25% of the cost of the Europeans. China has already started assembling the Airbus A320 passenger aircraft in China.
With technology no longer a monopoly and with a fracture in US hegemony over the global financial system, the reversal in terms of trade has started in earnest. Do keep in mind that this was a trend built over the last 250 years, it is unlikely that its symptoms and impact will be visible tomorrow. Even Britain took 60 years to decline into irrelevance after World War II. However, the trend and momentum have shifted.
Another concept that has been widely tracked is that of Purchasing Power Parity. The concept widely referenced using the Big Mac Index developed by the Economist newspaper of the UK states that the value of output in countries is misstated using nominal currencies since the price levels in different countries are different. Its direct inference is that currencies will strengthen or weaken over time to nominally reflect their purchasing power and to achieve nominal parity.
The anomaly has been that differences in purchasing power of currencies have remained intact for decades, raising cries of mercantilism and currency manipulation by exporting countries. However, this has changed completely. Competitive devaluation and currency manipulation will no longer help emerging economies. With a structural destruction of demand in developed countries (caused by the end of the credit superbubble), weaker currencies will no longer help emerging economies export more.
On the other hand a stronger currency will enable countries to attract global capital and to build their domestic infrastructure and markets. As the world moves to a multiple small engine economic system (as opposed to the single large US engine system), competitive revaluation and strength of capital markets and institutions will become more desirable for countries than competitive manufacturing export prices.
Labor Shortages in an Indian Textile Hub
As every economic watchdog on the planet lowers its forecast for economic growth in their respective countries and in the world, the specter of job losses and rising unemployment looms large. China declared a few weeks ago that more than 20 million out of its 130 million migrant workers might not have jobs to return to after the lunar new year holiday.
In this context I was baffled by what I saw in the south Indian textile city of Tirupur. This city of about a million people located an hour's drive from the south Indian airport of Coimbatore at its peak directly and indirectly exported about USD 3 billion worth of apparel products. This is significant given that India on the whole exports only about USD 9 billion worth of apparel.
Tirupur is suffering from acute shortage of labor. Tirupur is a hub for migrant labor from all around south India. The migrant labor comes from farms seeking employment in the labor intensive garment factories. The harvest festival of Pongal in the middle of January draws people back to their homes as they celebrate for a week with their families. This time, however, more than half the labor did not return. Factory managers I spoke with mentioned that they were running at 50% capacity because they were unable to find labor to operate the remaining sewing machines.
The buzz on the ground is that the harvest has been so plentiful and the prices being received are so good that working on the farm has become far more attractive than working in a monotonous garment factory. This is a trend that has been in place now for a few years but has become really accentuated this year.
This trend does not look likely to reverse anytime soon. The shift in terms of trade is underway. The world should be ready for higher prices of food and as a result, higher prices of manufactured goods.
The Conundrum of Dollar Strength
The angry protests from leaders around the world are that their economies are suffering more than the US as a consequence of sins committed in the US economy.
While on the surface the economic pain being experienced outside the US is more than the pain at home, the reasons for the pain are completely different. Since almost all capital in the world either originates or is managed out of the US or US financial institutions, a break down in the US financial system has broken down the flow of capital around the world.
A large number of countries around the world have been disproportionately impacted by the breakdown in the flow of credit and capital. The US on the other hand has been impacted by serious structural problems. Overextended and overindebtedconsumers and governments have put in motion a negative feedback cycle that will be very hard to break.
Out of the countries that have suffered due to the break down in capital markets, many have suffered economic breakdown that has taken a life of its own. The situation is likely to get worse for these countries. However, countries that have seen a deceleration in activity (for example India), due to a breakdown of capital flows are likely to resume their trajectories relatively quickly with the resumption of capital flows.
In the immediate term, the strength of the dollar is a consequence of the collapse of the US financial system. As injured and leveraged capital seeks to come home, a shortage of dollars is created that causes its value to appreciate.
The secondary consequence of the US financial meltdown will be the decline in US-centricism of global capital movements. As this happens and as the economic consequences to the US economy become apparent, a flight from dollars will resume. This flight will be structural in nature.
Is the world really prepared for zero interest rates? Capital like water seeks its own level. Where will all the newly created capital and stimulus flow? If there is any private sector participation left in decision making, then this capital and stimulus will find its way to those places where natural demand remains intact and where attractive returns can be earned.
There is a very high possibility that the actions of Ben Bernanke and Barack Obama might create an infrastructure building boom greater than the 1950s. The irony might be that the boom happens in India and emerging Asia instead of the US.
When It Rains It Pours
It appears that the Indian markets are moving from one piece of bad news to the next. First it was the collapse in credit that led to a crash in sales of commercial vehicles and durable goods (financed with credit). Then it was the terror attacks in Mumbai and now it is the fraud at Satyam. The final nail in the coffin (or so one is made to believe) will be a fractured outcome from India's general elections leading to a lameduckgovernment in May.
After a while, sentiment and bad news do not matter. When one can buy the stock of a company that is debt free, that has the equivalent of its market cap in cash and that is trading at 2 times earnings with a 7% tax free dividend yield, not much else matters.
What would matter is if the business of the company could deteriorate suddenly by any of the fears and worries possessing a gloomy investor base. The risk of such an outcome becomes significantly diminished when the earnings report of the Oct-Dec 2008 quarter demonstrates that the company made more money than before in the worst quarter for the world.
Valuations and Patience
Do valuations matter? When well run companies with honest and able managements trade at ridiculous valuations for extended periods of time, it is natural for one to cynically assume that there is no linkage between stock prices and underlying company valuations. But over time, the well run company will transmit that value to shareholders in the form of dividends, stock buybacks and performance.
When a crook is discovered in the marketplace, it is natural for one to assume that everyone in the marketplace is a crook. However, that is always far from the reality. It is for the investor to be diligent in separating the honest from the dishonest.
Patience? As investors, we invest capital to get back more in the future. We look to do this over a sufficient time horizon during which the investment has an opportunity to play out. How long is this time horizon? Isn't the long term just a collection of short terms? In the long run aren't we all dead?
As Ben Graham said, "In the short term the market is a voting machine and in the long term the market is a weighing machine."
The problem with patience is that we cannot put a time limit on it. Most of the time a two to three year investment horizon is sufficient for many investments to play out. However, many times this period gets extended due to exogenous factors or a series of exogenous factors.
As long as the underlying investment is headed in the right direction, it is prudent for an investor to exercise patience. The important thing to keep in mind is that, most of the time (for sound investments), as the time horizon gets extended the potential return from the investment multiplies.
It is very important for the investor to position himself such that he is not forced into selling an otherwise sound investment due to factors like leverage and cash requirements. Avoidance of time horizon mismatches is paramount.
e.
1¢? put me down for at least a half million more. If the pps would have hit that price when it was down as low as 1.2¢ I would already have them. I had a buy order in for 1 million at 1¢ at that time. I guess the MMs saw it on level 3 and decided they didn't want to go that low and have to fill it. I was really cheering for our naysayers at that time. LOL
...........al
Thought everyone would get a kick out of this. If it weren't such a shame it would be funny.
Sports fans...
Is it the NBA Or NFL?
36 have been accused of spousal abuse
7 have been arrested for fraud
19 have been accused of writing bad checks
117 have directly or indirectly bankrupted at least 2 businesses
3 have done time for assault
71, repeat
71 cannot get a credit card due to bad credit
14 have been arrested on drug-related charges
8 have been arrested for shoplifting
21 currently are defendants in lawsuits, and
84 have been arrested for drunk driving in the last year
Can you guess which organization this is?
Give up yet? . . Scroll down,
Neither, it's the 435 members of the United States Congress.
The same group of Idiots that crank out hundreds of new laws each year designed to keep the rest of us in line.
The original prospectus for GLD had very similar language in it. No audits? Access to the holdings not allowed by the subcustodians? It was waving red flags right under my eyes. I have looked at it as a paper stock ever since. No better or no worse than any other paper issued by corporations. IMHO No access for verification = no gold. I am not a trusting type.
......al
Really excellent advice. I read that article this morning by Sinclair. If you really think about it, it makes a lot of sense. Quantities of real gold seem to diminish daily. Where can anyone come up with tons of it at a moments notice?
......al
Yes, Mr Sparks, and this company has received millions in free press over the past couple years.
.........al
The Inquirer is the largest paper in Phila. Tho not official, some numbers are quoted in the article.
.......al
http://www.philly.com/philly/hp/news_update/20090212_Funeral_home__Phillies_casket_is_for_a_die-hard_fan.html?viewAll=y
Posted on Thu, Feb. 12, 2009
Funeral home: Phillies casket is for a ‘die-hard’ fan
By Peter Mucha
INQUIRER STAFF WRITER
Many people are buried with sports memorabilia.
Fishing rods. Golf clubs. Shotguns.
Even duck decoys.
Being buried inside sports memorabilia is another story.
But now it's possible.
A Phillies funeral casket - the first on view in the region, the distributor says - sits in a showroom at Kingston & Kemp Funeral Home, just outside Trenton.
The exterior is a lustrous white with wood-veneer inlays, and the handles are in Phillies red, sporting red tassels at each end. Logos are strategically placed above the handles, on a fabric liner, and at the casket's ends.
Funeral director Kevin Dalton props open the half-lid, revealing a large Phillies logo on the inside, above where a loved one's chest would be.
"It's exceptional. The paintwork is beautiful. The embroidery is perfect," he says.
Suggested retail price: $4,499.But there are limits.
It gives luxury box new meaning.
Clearly, it's for "the die-hard fan," manager Shawn Kingston quips.
The Phillies, of course, might have more of them than ever, as they begin spring training this weekend, hoping to repeat as World Series champs.
The caskets are created by Eternal Image, a Michigan-based company devoted to everlasting branding - its niche in the $15 billion annual death services industry.
The company negotiates licensing deals, works up designs for urns and caskets, and farms out the manufacturing, said chief executive Clint Mytych. Among the available brands are the Vatican Library, the American Kennel Club, and eight universities. Star Trek and American Cat Fanciers Association items should be out by summer.
Proposals from licensers for the Three Stooges and Marvel Comics were recently rejected, Mytych, 27, said.
Although baseball-team caskets were just introduced in mid-December, major-league urns have been out since 2007, with more than a thousand sold nationwide, Mytych said.
Sam Steckline of Red Lion, Pa., purchased a Phillies urn for himself and two weeks ago had it autographed by Charlie Manuel at a sports show in York.
The Phils skipper signed the red-and-white canister. A spot at the top for a baseball will hold one signed by Steve Carlton in 1979.
At an autograph show, the Hall of Fame hurler also inked the urn itself, inscribing it with "To 100 years more before death" and "No. 32."
Upon learning what the object was, Carlton asked if Steckline was kidding.
"I said, 'I'm dead serious - no pun intended.' "
Steckline, a motorcycle-riding 56-year-old, who plays second base in a hardball league, recalls trying to explain to his wife, Linda, why he wanted the $799 urn. "She's a little like: What did you get that for? Then she understood."
Since mid-2007, about 150 major-league urns have been sold in Pennsylvania, New Jersey, New York and Delaware, said Beth Cooper of P&J Cooper Supply, a Barrington-based distributor of funeral products.
Most, though, went to New York Mets and Yankees fans.
And urn sales are looking skyward?
"Not really. It's kind of slowed down," she said, after an initial flurry of interest from funeral homes ordering examples to display.
"It is a little bit of an expensive urn, and it is a little bit of a niche market," she said.
Nevertheless, she noted, Major League Baseball logos can now be added to custom artwork adorning lids of burial vaults, the underground containers for caskets.
More upbeat was Brian Horne, director of Page Funeral Home in Burlington.
"Truth be told, I think there is a demand," he said. "You've seen people's loyalties toward their professional sports teams."
Page has sold three Phillies urns, one to a woman whose urn held a ball signed last spring by the entire roster, another for a woman once named fan of the year, and one to a man who keeps peanuts in it on his Florida bar.
So far, Eternal Image has shipped about 100 baseball caskets memorializing various teams, Mytych said.
Anyone else in the coffin-branding biz?
Only Collegiate Memorials, a North Carolina firm that represents at least 75 universities.
The rock group Kiss once offered a model. In 2001, Gene Simmons' wailing face-painters sold a Kiss Kasket online, touting it as a watertight party cooler.
Meanwhile, Kingston is patiently waiting in Hamilton, Mercer County, to sell his first baseball casket.
Potential customers tend to smile or laugh.
"Not demand so much as interest" is how he sums up the reaction.
"It's like wearing my Viagra jacket when Mark Martin drives for Viagra," said Kingston, a NASCAR devotee.
"When my uncle died I put hand-tied flies in with him so he could go fishing when he got there," he said.
"Let's face it. There's a market for everything."
The concept, the company, the stock must have some kind of appeal for a venture capitalist to stick out cash. Most of them are bloodsuckers some far worse than others but they don't toss out cash on a lark. Especially in these times of deflation, recession, and generally very hard times for business as a whole. Altho I would think the funeral business while not totally recession proof will weather it better than most. No one can avoid it forever. Venture capitalists do their homework and even on what may seem to be really bad terms if EI wasn't viable as a business they wouldn't have gotten a cent. I'm still waiting for what they needed it for.
...........al
According to 2 articles I have just read(I posted one here), it seems the largest banks have substantially increased their gold shorts at the COMEX. Many believe that they will rig the markets so those shorts stay in the money, thereby driving gold down possibly as much as $200 an ounce. Ok, so maybe it happens. What kind of backwardation will arise from a paper POG of $650? How many long holders of contracts will then demand delivery? Help! I'm stimulating my brain and it hurts, LOL.
.............al