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Cramer said he likes gold stocks as a hedge against inflation.
The two gold stocks he would buy here are Yamana Gold (AUY - Cramer's Take - Stockpickr - Rating) for growth and Barrick Gold (ABX - Cramer's Take - Stockpickr - Rating) as the more conservative play, he said.
If people have 10 stocks in their portfolios, they should consider owning one of these, Cramer told viewers. Moreover, these are stocks people should hold on to, even if they don't produce immediate upside surprises, he stressed. If people start seeing inflation, they will be thanking their lucky stars they own an insurance.
Barrick, Cramer said, is digging, buying and processing gold at a time when most other gold companies have stagnated. It's great insurance because Barrick hasn't locked its gold prices in advance, he said.
Then there's Yamana Gold. He said the company has a big mine in Chile, which should help it raise output.
Cramer said he likes gold stocks as a hedge against inflation.
The two gold stocks he would buy here are Yamana Gold (AUY - Cramer's Take - Stockpickr - Rating) for growth and Barrick Gold (ABX - Cramer's Take - Stockpickr - Rating) as the more conservative play, he said.
If people have 10 stocks in their portfolios, they should consider owning one of these, Cramer told viewers. Moreover, these are stocks people should hold on to, even if they don't produce immediate upside surprises, he stressed. If people start seeing inflation, they will be thanking their lucky stars they own an insurance.
Barrick, Cramer said, is digging, buying and processing gold at a time when most other gold companies have stagnated. It's great insurance because Barrick hasn't locked its gold prices in advance, he said.
Then there's Yamana Gold. He said the company has a big mine in Chile, which should help it raise output.
Crammer, offered insurance with Gold..perfect timing
AUY ABX, both are ticking up 2% from close
http://finance.yahoo.com/q?s=ABX,AUY&d=s
EZ2, started take a few bites yesterday
on some silvers, today l was busy dizzy in the patch with one eye watching crude moving up.
Only holding GG & HL, also have some calls HL.
hope you are doing well old pal.
Flip...
Welcome to new board marker /
Think 1pm not sure/
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Fed. 14day RP + 4.00B [ Drain Sofar
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Fed. 14day RP + 4.00B [ Drain Sofar
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Subprime Rate Five-Year Fix Agreed by U.S. Regulators (Update8)
Last Updated: December 5, 2007 18:28 EST
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6kfa.n46Obo&refer=worldwide
Subprime Rate Five-Year Fix Agreed by U.S. Regulators (Update8)
Last Updated: December 5, 2007 18:28 EST
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6kfa.n46Obo&refer=worldwide
Futures (2) + World Indices
http://www.cme.com/dta/del/globex.html
http://money.cnn.com/data/premarket/
World Indices (2) Mini Charts
Updates every 60sec ~ Watch the dates!!
http://www.wwfn.com/commentary/oscharts.html
http://www.allstocks.com/markets/World_Charts/Asian_Stock_Markets/asian_stock_markets.html
euphoria back in style, so is Debt/
Fed.(1)2) 7day RP + 13.00B [net Add + 3.00B ]
Fed. 2day RP + 5.50B
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed.(1)2) 7day RP + 13.00B [net Add + 3.00B ]
Fed. 2day RP + 5.50B
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
US House seeks tax incentives for renewable energy
Tue Dec 4, 2007 12:17pm EST
By Chris Baltimore
WASHINGTON, Dec 4 (Reuters) - Democrats in the U.S. House of Representatives want to include provisions in pending energy legislation that would strip about $21 billion in tax subsidies from oil and gas companies and put them toward subsidies for renewable energy sources like wind and solar.
Democrats are still drafting the energy package, which also will include a boost in automobile fuel efficiency standards and requirements to use more renewable fuel sources like ethanol.
According to a letter sent to Democrats by House leadership on Tuesday, the bill will include a controversial tax package that was included in a bill the House passed this summer. The bill still must be finalized before a vote, which is expected on Wednesday or Thursday.
According to the letter, the bill "strengthens and extends existing renewable energy tax credits, including solar, wind, biomass, geothermal, hydro, landfill gas and trash combustion, while creating new incentives for the use and production of renewable energy."
Several Republicans in the Senate oppose paying for those renewable tax credits by raising taxes on oil and gas companies, and the White House has threatened to veto the bill over the issue.
To pay for the renewable incentives, the House bill is expected to repeal about $21 billion in tax subsidies extended to big oil and gas producers like Exxon Mobil Corp (XOM.N: Quote, Profile, Research), ConocoPhillips (COP.N: Quote, Profile, Research) and Chevron Corp (CVX.N: Quote, Profile, Research).
According to the Democratic staff letter, the bill would repeal reduced tax rates for major integrated oil companies, drop foreign income tax deductions for companies that produce oil and natural gas overseas and drop a tax break for companies to write off some exploration expenses.
If the bill becomes law, it would provide a big boost to solar producers like SunPower (SPWR.O: Quote, Profile, Research) and First Solar (FSLR.O: Quote, Profile, Research), whose customers would be able to claim a 30 percent investment tax credit for installing solar arrays.
Wind producers like Vestas (VWS.CO: Quote, Profile, Research) of Denmark, the world's biggest maker of wind turbines, could also get a boost from a 1.8-cent-per-kilowatt-hour producer tax credit, also expected to be included in the bill.
According to Democrats, the bill would also provide "clean renewable energy bonds" to incentivize electric cooperatives and public power providers to install facilities that generate electricity from renewable resources.
Wall Street took notice of the incentives. On the New York Stock Exchange, shares in LDK Solar (LDK.N: Quote, Profile, Research), which manufactures solar wafers, were up nearly 18 percent and Trina Solar (TSL.N: Quote, Profile, Research) gained 4.8 percent.
On Nasdaq, Solar Power Holdings (SOLF.O: Quote, Profile, Research) was up 25 percent and Canadian Solar (CSIQ.O: Quote, Profile, Research) was up 5.5 percent. (Additional reporting by Steve James in New York; Editing by Christian Wiessner)
http://www.reuters.com/article/marketsNews/idUKN0451079320071204?rpc=44
Fed. 1day RP + 2.50B [Drain -6.25B ]
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Fed. 1day RP + 2.50B [Drain -6.25B ]
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ContraryInvestor: The "Other" Credit Market
December 01, 2007
http://www.safehaven.com/article-8926.htm
Short gold in '08, Goldman says
ANGELA BARNES
Globe and Mail Update
November 29, 2007 at 3:03 PM EST
Gold bugs have mostly had it all their own way this year, but that won't be the case next year, Goldman Sachs Group Inc. believes. In fact, the big brokerage firm recommends in its top 10 trades list for 2008 that investors short gold next year.
Goldman had recommended investors go long gold in its top 10 trades list for 2006 and bullion went from around $500 (U.S.) an ounce to $650 at the end of that year. Bullion has continued to climb since. This year it rose from $636 at the beginning of the year to as high as $845 on Nov. 7 and is currently changing hands at aound $795 on the London Metal Exchange.
But the 2008 top trades list, drawn up by Goldman's global markets team, suggests investors short gold priced in U.S. dollars in order to capitalize on a gradual relaxation of credit concerns in the financial sector over the coming months and as an avenue to benefit from the prospect of the U.S. dollar stabilizing. Bullion has been one of the main beneficiaries of the financial turmoil that began in August as investors sought alternative stores of value to the weakening U.S. dollar.
(A short sale occurs when the seller borrows a stock, commodity or currency and sells it, expecting the price to fall. If it does, the seller buys it at the lower price to replace the commodity that was borrowed.) The team anticipates that the greenback, which had a tough time in 2007 against global currencies including the Canadian dollar and the euro, will find its footing next year as the U.S. Federal Reserve Board cuts interest rates and thereby lowers the risk of a recession, and the U.S. trade balance improves further.
The team also makes its argument for shorting bullion on the basis of technical analysis. That, the team says, suggests that gold is topping out and that longer-term momentum indicators are turning lower. “We see scope for acceleration through $770 to re-test the $600-650 levels prevailing ahead of the summer,” the team said.
The team also suggests investors short small capitalization stocks and go long large caps and opt for stocks from a variety of countries, given the risk of choosing stocks from just one country.
Another of the top 10 trades for next year is to short 10-year Canadian bond futures and go instead for 10-year Swiss franc bond swaps as the rate differential between the two has gotten out of whack.
A further one is to go short the British pound and long the Japanese yen to capitalize on the expected slowing of the British economy.
“Sterling remains one of the most overvalued major currencies” in Goldman's trade-weighted valuation metric while the yen is comparatively cheap, the team said.
“On top of this, the narrowing of interest rate differentials between Japan and other major industrialized countries, including the U.K., make Japanese yen funded carry trades less attractive,” the team added.
http://www.reportonbusiness.com/servlet/story/RTGAM.20071129.wgoldman1129/BNStory/SpecialEvents2/home
The Long and Short of It at Goldman Sachs
By BEN STEIN
Published: December 2, 2007
FOR decades now, as a writer, economist and scold, I have been receiving letters from thoughtful readers. Many of them have warned me about the dangers of a secret government running the world, organized by the Trilateral Commission, or the Ford Foundation, or the Big Oil companies or, of course, world Jewry.
I always scoff at these letters. The world is far too complex a place to be run by any one group. But the closest I have recently seen to such a world-running body would have to be a certain large investment bank, whose alums are routinely Treasury secretaries, high advisers to presidents, and occasionally a governor or United States senator.
This all started percolating in my fevered brain last week when a frequent correspondent, a gent in Florida who is sure economic disaster lies ahead (and he may be right, but he’s not), forwarded a newsletter from a highly placed economist at Goldman Sachs named Jan Hatzius.
That worthy scholar recently wrote a detailed paper about how he thought the subprime mess would get worse and worse. It would get so bad, he hypothesized, that it would affect aggregate lending extremely adversely and slow down growth.
Dr. Hatzius, who has a Ph.D. in economics from “Oggsford,” as they put it in “The Great Gatsby,” used a combination of theory, data, guesswork, extrapolation and what he recalls as history to reach the point that when highly leveraged institutions like banks lost money on subprime, they would cut back on lending to keep their capital ratios sound — and this would slow the economy.
This would occur, he said, if the value of the assets that banks hold plunges so steeply that they have to consume their own capital to patch up losses. With those funds used to plug holes, banks’ reserves drop further. To keep reserves in accordance with regulatory requirements, banks then have to rein in lending. What all of this means — or so the argument goes — is that losses in subprime and elsewhere that are taken at banks ultimately boomerang back, in a highly multiplied and negative way, onto our economy.
As the narrator in the rock legend “Spill the Wine” says, “This really blew my mind.”
So I started an e-mail correspondence with Dr. Hatzius, pointing out what I believed were a few flaws in his paper. Among them were his hypothesis that home prices would fall an average of 15 percent nationwide (an event that has never happened since the Depression, although we surely could be headed in that direction), and that this would lead to a drastic increase in defaults and losses by lenders.
This, as I see it, is a conclusion that is an estimation based upon a guess. I found especially puzzling the omission of the highly likely truth that the Fed would step in to replenish financial institutions’ liquidity if necessary. In a crisis like that outlined by the good Dr. Hatzius, the Fed — any postwar Fed except perhaps that of a fool — would pump cash into the system to keep lending on track.
I mentioned this via e-mail to Dr. Hatzius. He generously agreed that there was some slight merit to my arguments and that he was merely pointing out tendencies and possibilities (if I understand him correctly).
BUT forecasting is tricky, and I have a hard time believing that financial events to come will be qualitatively different from those that have already happened.
I do want to emphasize Dr. Hatzius’s gentlemanliness and intelligence. But I also want to emphasize that, as I see it, his document was mostly about selling fear. A spokesman for Goldman Sachs categorically denies this point and says that the firm’s economic research is held to the highest levels of objectivity and that its economists’ views are completely independent.
As I interpret it, Dr. Hatzius was saying that the financial system would possibly not be able to adjust to a level of financial losses that are large on an absolute scale but small compared with aggregate credit or the gross domestic product. He is also postulating that lenders would have to retrench so deeply that lending would stall and growth would falter — an event that, again, has not happened on any scale in the postwar world, except when planned by the central bank.
In other words, with the greatest possible respect to Dr. Hatzius, his paper is not really what I would call a serious overview of the situation. It is more a call to be afraid and cautious based on general principles that he embraces and not on the lessons of history. (In this respect, he is much like many economic journalists and commentators who sell newsprint by selling fear. The common cause of journalists and Wall Streeters in this regard is a subject I will address in the future.)
Now, let me make a few small points here and then get to my own big point.
Goldman Sachs is a huge name in terms of moneymaking and prestige. I totally understand the respect it receives for its financial dexterity. The firm is a superstar in that regard, and I, a small stockholder, am grateful. But it has never been clear to me exactly why its people are considered rocket scientists in any other area than making money.
Dr. Hatzius’s paper is a prime example of my puzzlement. It shows extreme intelligence but basically misses the point: yes, there are possible macro dangers, but you have to go all the way around Robin Hood’s barn to get to them, and you have to use what I think are extremely far-fetched hypotheticals to get to a scary situation. (This is not to diminish the real risks in today’s economy, I’m just not as gloomy about them as Dr. Hatzius.)
Why, then, is his document circulating? Perhaps as a token of Dr. Hatzius’s genuine intelligence, which is fine. But to me, his paper seemed like a selling document in the real Wall Street sense of selling — namely, selling short. (Dr. Hatzius notes that he has long been bearish on housing, since faraway 2006, but I respectfully note that that is a lot different from predicting a credit catastrophe. The spokesman for Goldman also noted the company’s bearishness on housing since 2006. He also noted that in the recent past, Goldman Sachs has moved to a considerably larger short posture and that the firm is net short.)
More thoughts came to me as I read a recent piece in Fortune by my colleague Allan Sloan, a veteran financial writer. Mr. Sloan traces the life and death throes of a Goldman Sachs-arranged collateralized mortgage obligation. He shows how truly toxic waste was sold to overly eager investors who now have major charge-offs, and he also points out that some parts of the C.M.O. were indeed safe and were either current or had been paid off.
But what leaps out at me from this story is that Goldman Sachs was injecting dangerous financial products into the world’s commercial bloodstream for years.
My pal, colleague and alter ego, the financial manager Phil DeMuth, culled data from a financial Web site, ABAlert.com (for “asset-backed alert”), that Goldman Sachs was one of the top 10 sellers of C.M.O.’s for the last two and a half years. From the evidence I see, Goldman was doing this for years. It might have sold very roughly $100 billion of the stuff in that period, according to ABAlert. Goldman was doing it on a scale of billions even when Henry M. Paulson Jr., the current Treasury secretary, led the firm.
The Goldman spokesman would not comment on this except to note that other firms sold C.M.O.’s too.
The point to bear in mind, as Mr. Sloan brilliantly makes clear, is that as Goldman was peddling C.M.O.’s, it was also shorting the junk on a titanic scale through index sales — showing, at least to me, how horrible a product it believed it was selling.
The Goldman Sachs spokesman said that the company routinely shorts the securities it underwrites and said that this is disclosed. He noted candidly that Goldman is much more short in this sector than usual.
Here is my humble hypothesis, even after talking to Goldman: Is it possible that Dr. Hatzius’s paper was a device to help along the goal of success at bearish trades in this sector and in the market generally? His firm says his paper, like all of its economists’ work, was not written to support any larger short-trading strategy. But economists, like accountants, are artists. They have a tendency to paint what their patrons, who pay them, want to see.
From what I have observed over the years, Goldman has a fascinating culture. It is sort of like what I imagine the culture of the K.G.B. to be. You always put the firm first. The long-ago scandal of the Goldman Sachs Trading Corporation, which raised hundreds of millions just before the crash of 1929 to create a mutual fund, then used the fund’s money to prop up stocks it owned and underwrote, was a particularly sad example. The fund, of course, went bust.
Now, obviously, Goldman Sachs does many fine deals and has many smart, capable people working for it. But it’s not the Vatican. It exists to make money for the partners and (much farther down the line) the stockholders. The people there are not statesmen. They are salesmen.
To my old eyes, the recent unhappiness about mortgages and Goldman’s connection with them are not examples of sterling conduct. It is bad enough to have been selling this stuff. It is far worse when the sellers were, in effect, simultaneously shorting the stuff they were selling, or making similar bets.
Doesn’t this bear some slight resemblance to Merrill selling tech stocks during the bubble while its analyst Henry Blodget was reportedly telling his friends what garbage they were? How different would it be from selling short the junky stock that your firm is underwriting? And if a top economist at Goldman Sachs was saying housing was in trouble, why did Goldman continue to underwrite junk mortgage issues into the market?
HERE is a query, as we used to say in law school: Should Henry M. Paulson Jr., who formerly ran a firm that engaged in this kind of conduct, be serving as Treasury secretary? Should there not be some inquiry into what the invisible government of Goldman (and the rest of Wall Street) did to create this disaster, which has caught up with some Wall Street firms but not the nimble Goldman?
When the Depression got under way, the government created the Temporary National Economic Committee to study just what had happened on the Street to get the tragedy going. Maybe it’s time for an investigation of just what Wall Street and Goldman did to make money as they pumped this mortgage mess into the economic system, and sometimes were seemingly on both sides of the deal.
Or is Goldman Sachs like “Love Story”? Does working there mean never having to say you’re sorry?
Ben Stein is a lawyer, writer, actor and economist. E-mail: ebiz@nytimes.com.
Barron's: GS cuts many in Tech Sector
http://blogs.barrons.com/techtraderdaily/2007/11/30/goldman-turns-wary-on-tech-sector-cuts-estimates-targets-for-dozens-of-stocks/?mod=yahoobarrons
November 30, 2007, 4:25 pm
Goldman Turns Wary On Tech Sector; Cuts Estimates, Targets For Dozens Of Stocks
Posted by Eric Savitz
Wary comments by Goldman Sachs this morning on the outlook for enterprise technology spending are apparently weighing on tech shares.
Goldman analysts Jim Covello, Sarah Friar and Derek Bingham wrote that they have become “incrementally more cautious on tech fundamentals given the current macroeconomic backdrop,” which suggests soft capital spending in 2008, in particular for the U.S. “We believe CIOs may delay their purchases in the early part of 2008,”they wrote.
The Goldman analysts write that “this is not a call to sell all tech stocks,” and that “while there is likely little upside for some areas of tech,” in particular software, on which the firm turned cautious earlier this week, other areas have underperformed this year, including hardware and semis, and “already likely reflect the pending fundamental weakness.”
That said, Goldman reduced estimates and cut price price targets for many names, “with particular focus on companies with large enterprise exposure and significant dependence on the U.S. consumer.”
The list of companies affected by today’s Goldman call is long:
In the communications sector, they cut estimates and/or price targets for:
Netgear
Corning
Cisco
Nortel
Aruba
Juniper
In the hardware sector, Goldman cut estimates and/or price targets for:
Dell
Directed Electronics
EMC
Emulex
IBM
Intevac
Isilon
Lexmark
Network Appliance
Sun Microsystems
Brocade
Payment processing companies affected by estimate and/or price target changes include:
ADP
Paychex
Global Cash Access
Global Payments
Master Card
MoneyGram
Amdocs
Convergys
CSG Systems
Synchronoss
IT services companies affected include:
Accenture
Bearing Point
Sapient
Affiliated Computer Services
Computer Sciences
EDS
Unisys
Cognizant
ExlService
Infosys
Patini
Satyam
Witpro
Chip stocks affected by estimate cuts and/or price target changes include:
Advanced Micro Devices
ATMI
Broadcom
Entegris
FormFactor
International Rectifier
Intel
Intersil
Microchip
Micrel
Marvell
Micron
Maxim
National Semi
Nvidia
Teradyne
Texas Instruments
Volterra
Goldman earlier this week made similar moves on software and analog semis.
Today’s Goldman calls helps explain the relative underperformance of tech stocks today; while the Dow gained almost 60 points or 0.45%; the Nasdaq Composite is off 7 points, or 0.3%.
<reader comments beg to differ>
Where to hide now? AMD MU etc. near LT lows.
Fed. Ops: 31.50B Matures this week.
Mon: 6.50B 3day
Wed: 13.00B 7day
Thu: 12.00B 14day
Float: 47.50B
=========================================================
Temp Ops:
Perm Ops:
=========================================================
Public Debt:
Limit ~ $9,815 T
11/29 ~ $9,139 T
Fed. Ops: 31.50B Matures this week.
Mon: 6.50B 3day
Wed: 13.00B 7day
Thu: 12.00B 14day
Float: 47.50B
=========================================================
Temp Ops:
Perm Ops:
=========================================================
Public Debt:
Limit ~ $9,815 T
11/29 ~ $9,139 T
Fed. 3day RP + 6.50B [net Giveth + 1.75B ]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed. 3day RP + 6.50B [net Giveth + 1.75B ]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Thanks for text, have them both
on chichi2...tone of his voice very upbeat, not at all like we see on tv.
Bernanke Speaks, Pt.1&2Video +Text
http://www.cnbc.com/?id=15839263&tabid=15839796&tabheader=false&t=0.40377338732380247
#msg-24915526
Bernanke Speaks, Pt. 1 & 2 Video
http://www.cnbc.com/?id=15839263&tabid=15839796&tabheader=false&t=0.40377338732380247
A good ol'boy from the south, proly
wants some grits & eggs.....2 big banks here both have sent some rescue $$ north.
Every Breath You Take
cable & tv here knocked out from 11:58am
now on. not much changed, same narrow range chit,
Ben comes here tonight to speak....should l try calling him
Fed.(2) 1day RP + 4.75B [net sm drain -0.25 ]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed.(2) 1day RP + 4.75B [net sm drain -0.25 ]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed. 14day RP + 8.00B [ even sofar..
http://www.ny.frb.org/markets/omo/dmm/temp.cfm