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Avery Goodman  

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  • How Recent Events In India May Affect Precious Metals Prices [View article]
    Thanks for pointing out the mistake!

    The intended company was Prosperity Goldfields, a high risk/reward Canadian "startup" that is developing various gold mining operations. Call symbol is PPG.V. I will submit a correction form to the SA editorial staff so that they correct the call symbol and give the full name.
    Apr 19, 2012. 01:52 AM | Likes Like |Link to Comment
  • American Institute For Economic Research Says Consumer Prices Rising At 22.8% Per Annum [View article]
    Wages have also risen, but another big difference was that people like my father could afford a quality of material life for their families that is now impossible to support, for people in the same type of job, without the help of a working wife. This particular observation is subjective, but most people who lived both then and now make the same observation. That empirically indicates that prices have outstripped the increase in real wages.

    Aside from that, massive increases in both prices and wages imply that the US dollar, under Federal Reserve management, has been transformed into a currency with characteristics similar to those printed by Banana Republics. Such currencies are not suitable stores of value earned. If such currency management led to increased overall wealth over the long term, Banana Republics would be the richest, rather than among the poorest of nations.
    Apr 18, 2012. 12:41 AM | 2 Likes Like |Link to Comment
  • American Institute For Economic Research Says Consumer Prices Rising At 22.8% Per Annum [View article]
    Recusant, what you are saying is entirely logical and, in all probability, completely correct.
    Apr 18, 2012. 12:28 AM | Likes Like |Link to Comment
  • American Institute For Economic Research Says Consumer Prices Rising At 22.8% Per Annum [View article]
    There is some substance to what you are saying. But, Williams is using the 1980 formula for inflation. I lived through the 1970s and 80s. Other than gasoline mileage improvements in cars, and the advent of the micro-computer age, I can't see much difference in the American style of life now compared to then. One big difference is that everything is astronomically more expensive now.
    Apr 17, 2012. 02:04 PM | 2 Likes Like |Link to Comment
  • March Retail Sales: A Decline At An Annualized Rate Of 13.2% [View article]
    Only a sad tormented soul wishes ill upon those who simply disagree with what the tormented soul prefers to hear.
    Apr 17, 2012. 03:29 AM | 7 Likes Like |Link to Comment
  • March Retail Sales: A Decline At An Annualized Rate Of 13.2% [View article]
    We do appear to be in a mild depression that could get worse. It is now being masked, in nominal terms, by money printing. Hence, the stagflation. The money printing, no doubt, is where the retail inflation is coming from. Printing money simply siphons wealth away from the middle class and into the coffers of favored financial institutions.

    Unless effective steps are taken to stem the tide, a continued reduction in our standard of living will become a permanent reality. We need to restore faith in government by reforming it, removing corruption and influence peddling. It is the dominance of that type of activity that is depressing the mindset, and, therefore, the economic activity of the middle class.
    Apr 16, 2012. 10:10 PM | 5 Likes Like |Link to Comment
  • March Retail Sales: A Decline At An Annualized Rate Of 13.2% [View article]
    Including home prices, to one extent or another may be the best way to measure overall inflation. However, retail sales do not include home sales. Accordingly, they are not properly discounted by an inflation measure that includes a large component of home sales. Doing so is incorrect, and does not tell you whether or not aggregate real retail demand has gone up or down, as I explained previously, except in nominal terms.

    It does not take a rocket scientist to figure out what I have just explained to you. If you are not a muppet, and have been educated to primary school or above math skills, you ought to be able to figure it out.
    Apr 16, 2012. 09:58 PM | 7 Likes Like |Link to Comment
  • March Retail Sales: A Decline At An Annualized Rate Of 13.2% [View article]
    I never said home sales are not part of inflation. But, the retail sales numbers do not involve home sales. It is, therefore, inaccurate and incorrect to discount them by non-retail sales, such as a metric that includes a large component of non-retail inflation.

    Only the increased cost of retail sales can properly be used as a deduction from the increase in dollar amount, in order to discover whether aggregate retail demand went up or down. The increase or decrease in demand, and not the dollar amount before inflation, tells us whether or not people are buying more retail goods and services.
    Apr 16, 2012. 09:53 PM | 1 Like Like |Link to Comment
  • Spring Market Outlook [View article]
    This article is based upon an assumption that massive new QE will not be done until after the November election. But, more important, I am discussing a window period of opportunity to buy, in this article, not where stock prices will end in 2012. As for the stats, I have not been able to find much statistical correlation between a rising asset prices in the first quarter and rising prices in the rest of a year.

    You may or may not be right. It will depend upon the timing of QE3 (actually QE5) and if it happens before or after the November election. But, QE3 is going to cause oil prices to shoot up very high, especially when combined with a probable attack on Iran.

    Energy will be a huge tax upon the ability of Americans to spend, at least until shale oil comes into its own, which will take many more years. And, baby boomers need to take cash out of stocks, and there is every likelihood that the ongoing process by which that is already proceeding will continue.

    The real economy in very bad shape. That won't matter during the first few months of the next QE because the market reacts to liquidity, not fundamentals, in the short run. But, when you are thinking longer term, the fundamentals will eventually prevail.

    Everything has its price, and if stock prices retreat deeply, whether it is in America, Europe or Emerging Markets, stocks could become a good buy. But, at today's valuations, it seems very unlikely that stocks will rise much higher in real terms. Yet, if the QEs keep rolling in nonstop, in Europe and the USA, the expectation of a big equities retreat will be wrong, when the prices are viewed in nominal terms. At that point, a reevaluation will need to take place, but I am not convinced that the basics will change.

    In the absence of a big "hit" to markets generally, it will be wiser to buy metals and commodities, rather than dabble in stock purchases. We already have real-world inflation that is very high, at about 10%, regardless of what the BLS claims. I have personally noticed this on my business trips, and, it seems, General Mills is noticing it too (see, Commodities will benefit far more than stocks, from an endless series of QEs.
    Mar 31, 2012. 12:57 PM | Likes Like |Link to Comment
  • Spring Market Outlook [View article]
    The situation has not been reversed at all. You apparently do not understand the French election system. There are two rounds, not one, as in America.

    In the first round, this April, Sarkozy will do better than previously expected, partly because of the transient influence of a "successfully" concluded terrorist incident on the minds of "on-the-fence" voters. However, there are too many candidates, and no one will receive a majority.

    There will be a runoff in May, and Hollande leads by 10% in the final runoff. The lead there is composed of hard-core socialist-oriented support, and is unlikely to be diminished much further even if there are more such incidents. On the other hand, since Sarkozy's recovery is largely based upon one incident, assuming that a series of them don't happen as we move closer to the election, the new supporters may fade away by the runoff. That is likely to increase Hollande's lead.

    Although I disagree with some of his policies, I personally prefer Sarkozy. I were a Frenchman, I might even vote for him in the runoff election. Anything is possible, and a miracle could happen. But, the reality is what it is and it is very unlikely that he will be able to win another term.
    Mar 30, 2012. 02:14 AM | 4 Likes Like |Link to Comment
  • Government Says 4.1%, But General Mills Reports 10-11% Inflation [View article]
    All of General Mills inputs, other than labor costs, are for crude materials, mostly crude food, but also other materials. The inflation rate for all these materials, including but not limited to crude food, is supposedly tracked by that portion of the "producer price index" (PPI) known as the "crude materials price index". It is also disseminated by the Bureau of Labor Statistics.

    The crude materials price index portion of the PPI has increased by less than the crude foods index. In fact, it has supposedly increased by less than 1% (0.7% to be exact)! In other words, our government's "formula" has managed to read crude materials inflation at about 10% below the rate experienced by General Mills. The General Mills experience is shared by everyone of us who shop in stores, buy airplane tickets, go on business trips, fill cars up at gas stations, pay for hotels, rental cars, etc. Yet, Fed Chairman Bernanke, and his underlings, such as New York Fed President William Dudley, love to quote BLS statistics to support their policies.
    Mar 27, 2012. 03:56 PM | 9 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    Further research indicates a flaw in the Goldmoney system. Apparently, you do NOT own a piece of a specified bar. But, you do own, in common with other investors, a specified number of ounces in a collection of bars that are titled to the names of the owners. The system is not a particularly good one, in my opinion, and is clearly inferior to true allocated storage, although it may save on costs. They do state that, if you want, you can somehow register the bars in your name, or, I assume, in the name of several investors with specified interests.

    In the Morgan Stanley Smith Barney scheme, the bars are not clearly titled in the name of the investors, and are not immune from the claims of creditors. The stored metal appears to be a general asset of the brokerage firm. Thus, unless MSSB changes the terms of the deal, investors will end up as unsecured creditors should Morgan Stanley ever become insolvent from losing big on a derivatives deal, or go bankrupt for some other reason.
    Mar 24, 2012. 02:46 PM | 3 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    I could be wrong, because I am not deeply familiar with Goldmoney. I don't endorse or not endorse their services. However, my general understanding is that Goldmoney provides a specifically described and defined interest in 400 ounce banker's bars. You may not own the entire bar, but you and others do own a particular bar. If they are not doing that, they should be.

    Based upon the description, it appears that whatever bars will be kept, in the Morgan Stanley scheme, will be titled in the name of Morgan Stanley Smith Barney, itself, while they are being stored, and not in the name of customers. If they change their policies, and put a guarantee that the physical metals will be bought, and titled in the name of customers, the scheme would be dramatically improved.

    But, right now, the Smith Barney arrangement appears to allow for hypothecation to derivatives counter-parties. The company website does not even guarantee that the metal will be in the vault at all, nor does it identify any bar, big or small, that will be owned by you partially or in its entirety.

    Furthermore, Smith Barney represents that it is selling 1 ounce bars and coins, as well as other small denominations. Goldmoney makes clear that all gold will be held as partial interests in 400 ounce banker's bars. Since Smith Barney is selling small bars and coins, there is absolutely no reason not to identify them, put them in a specific part of the vault, and hold them in your name.
    Mar 24, 2012. 02:23 PM | 2 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    Oh, yes, one more important point comes out of early 2009. Precious metals prices started to shoot up in January, even as the stock market was collapsing. Even as a 35% or so deflation occurred in the stock market in a few months, and before any hint of QE, metals prices were rising fast. And, that, in spite of the fact that the paper exchanges were still in existence, busily issuing paper claims in a ratio of about 100 to 1 against physical collateral!
    Mar 19, 2012. 04:44 PM | 2 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    Yes. If you are trading metals on the market, buying GLD< SLV, SIVR, et. al., you must accept what the market makers do. I am pointing out that, however, that in the event of a complete implosion scenario actually playing out, there will be no more exchange.

    It is also important to note that the market makers in the paper markets are not immune to what happens in the physical market. It is interesting to note that even as the trade I described was growing larger, intentionally or unintentionally, a stop was placed upon the increasingly lucrative business of buying on and selling off the exchange. The occurrence of a subsequent big rise in the "spot" price in early 2009 caused premiums in early 2009 to fall in proportion with the rise in the "spot" price.

    One may speculate that this could have had something to do with the fact that silver mining companies were trying to get in on that trade, also, after a few month. One actually opened its own retail division, to sell at a higher price, to end users and investors and avoid the bullion banks. Right after that, the price shot up.

    Mar 19, 2012. 04:18 PM | 1 Like Like |Link to Comment