The FBI is reportedly investigating H-P's (HPQ) accusations of accounting improprieties at Autonomy prior to H-P buying it and for which the company took an $8.8B charge in FQ4. The feds are responding to a request from the SEC after H-P brought its claims to the regulator. Don't be surprised if more government agencies jump onto the investigative bandwagon. [View news story]
You think it is bad now? Wait until IFRS is implemented.
As expected, eurozone finance ministers have again postponed approving the release of the next tranche of Greece's bailout after failing to reach an agreement on how to make the country's debt more sustainable in the long term. Eurogroup chairman Jean-Claude Juncker blamed the delay on technical details and said they'll all meet again on Monday for more talks. [View news story]
Everyone is hopeful we reach a solution soon but the reality is, just like the US, we are kicking the can down the road.
The Europeans want to write off a significant portion of Greek debt but Merkel has an election in September and she does not want it to turn into a referendum on Greece and the Euro. That is why she has taken a weaker tone lately.
Ben Bernanke stays on point, promising continued QE even after the economy shows improvement. He says fiscal cliff worries are already posing a drag on U.S. growth, but a long-term deal could make "the new year a very good one for the American economy." Do we detect an optimistic turn in attitude from the chairman? [View news story]
Ben has realized that his policies are causing more damage than good to the global economy but like an Internet argument has difficulties admitting fault. If he did it would discredit all of his academic work studying how Japan reacted to their real estate crisis.
The irony of his actions is that he has set this country on a path similar to Japan.
The Post-Election Trade Points To Gold And Silver [View article]
I see too many people that believe the problems will be fixed but let's be realistic. Europe will be kicked down the road until after the German elections, the US (even with an agreement) will still be in deep fiscal trouble.
$1.6 trillion in tax hikes over 10 years is a drop in the bucket when you consider that $1.2 trillion in deficits total $12 trillion over the same period of time.
On the other hand you could buy a market that is valued at more than 15x earnings with zero earnings growth this quarter.
Sub 2% growth in the US and Europe is in a recession despite the massive amount of stimulus being applied.
I honestly say that gold and silver are undervalued considering the problems in the world.
I had someone try to sell me a month ago that Coke was a growth stock with 5% earnings growth and a 20 PE. Seriously.
Stocks take a decided turn down as Bernanke speaks and seems to rule out any more stimulus for the moment. Seriously? The chairman again promised QE will continue even after the economy recovers and the market wants more? DJIA -0.6%, Nasdaq -0.6%. [View news story]
The Post-Election Trade Points To Gold And Silver [View article]
I agree. My 1Q price target is $2100 and $44 once this cup and handle formation resolves itself. It may take some time due to the December tax loss selling season but the trend is and will be up for the foreseeable future.
The Post-Election Trade Points To Gold And Silver [View article]
My biggest problem with the negotiations is that there are too many entrenched interests for anyone to agree on meaningful cuts. When that happens nothing gets done.
We need real reform across the board. I see the biggest problem as a tax code that is greater than 73,000 pages in length. The more complex you make something the more people try and avoid it.
That can extend to Obamacare as well. The more complex the more people try to evade it.
Pan American Silver Turns The Corner [View article]
I agree. Investors will need to be patient but it will pay off.
Argentina is a problem that will be a thorn in the side of mining companies for some time. If you read the transcripts and MD&A the comments regarding Argentina are across the board. It is a difficult situation to manage and many firms have marked down the mines to care and maintenance levels but often the value will be realized eventually.
No one can predict the future, but that central banks will continue pump-priming next year is about as certain as it gets. Look for gold to take out $2K/oz. in 2013 as a result, says Deutsche's Ray Key. Bulls should nevertheless take caution at these levels, he says, because the market "remains fundamentally long." A two-handed forecast if there ever was one. [View news story]
Actually there are some good values in the gold mining sector but the real value lies in the exploration and development areas.
No shocker, U.S. bank regulators postpone indefinitely the January 1 implementation of Basel III bank capitalization rules "due to the wide range of views," expressed by those affected. [View news story]
I look at it through mining companies and the accounting is much more fuzzy than GAAP.
One example is a warrant the was offered in a takeout of a junior mining company. Because the warrant was not offered to all shareholders of the company it needs to be listed as a liability and marked to market every quarter which increases earnings volatility. When commodity prices increase, stock prices increase, which means the liability increases causing a negative mark to market on the Income Statement and lower profits. When commodity and stock prices fall the opposite happens.
IFRS is more subjective and less transparent than the rules based GAAP which will lead to more judgment being taken by managers trying to hit the quarterly numbers.
These are not American standards but European standards which are not well suited for the number of global multi-national businesses headquartered in the US.
Under IFRS the Income Statement and Balance Sheets become less useful and the Cash Flow Statement becomes the most important component of security analysis although they move items around into odd areas as well.
No shocker, U.S. bank regulators postpone indefinitely the January 1 implementation of Basel III bank capitalization rules "due to the wide range of views," expressed by those affected. [View news story]
"Failure to avoid the fiscal cliff and raise the debt ceiling in a timely manner as well as securing agreement on credible deficit reduction would likely result in a rating downgrade in 2013," says Fitch, in a note titled, "No Fiscal Honeymoon for President Obama." (Moody's earlier) [View news story]
Down 1.9%, the DJIA slips below 13K for the first time since the day after Labor Day, and is off 4.4% since the September 14 QE∞ top. The S&P is off just about 5% since then, the Nasdaq 7%. Treasurys are having their best day of the year, the 10-year yield down 12 bps to 1.63%. [View news story]
I see a triple top and we are hanging on support right now. Given the economic and earnings data I see no reason to be long right now.
Down 1.9%, the DJIA slips below 13K for the first time since the day after Labor Day, and is off 4.4% since the September 14 QE∞ top. The S&P is off just about 5% since then, the Nasdaq 7%. Treasurys are having their best day of the year, the 10-year yield down 12 bps to 1.63%. [View news story]
Me.
Technicals have looked very poor for the past two weeks. If we break 1400 watch out below.
The FBI is reportedly investigating H-P's (HPQ) accusations of accounting improprieties at Autonomy prior to H-P buying it and for which the company took an $8.8B charge in FQ4. The feds are responding to a request from the SEC after H-P brought its claims to the regulator. Don't be surprised if more government agencies jump onto the investigative bandwagon. [View news story]
As expected, eurozone finance ministers have again postponed approving the release of the next tranche of Greece's bailout after failing to reach an agreement on how to make the country's debt more sustainable in the long term. Eurogroup chairman Jean-Claude Juncker blamed the delay on technical details and said they'll all meet again on Monday for more talks. [View news story]
The Europeans want to write off a significant portion of Greek debt but Merkel has an election in September and she does not want it to turn into a referendum on Greece and the Euro. That is why she has taken a weaker tone lately.
Ben Bernanke stays on point, promising continued QE even after the economy shows improvement. He says fiscal cliff worries are already posing a drag on U.S. growth, but a long-term deal could make "the new year a very good one for the American economy." Do we detect an optimistic turn in attitude from the chairman? [View news story]
The irony of his actions is that he has set this country on a path similar to Japan.
It is Arthur Burns all over again.
The Post-Election Trade Points To Gold And Silver [View article]
$1.6 trillion in tax hikes over 10 years is a drop in the bucket when you consider that $1.2 trillion in deficits total $12 trillion over the same period of time.
On the other hand you could buy a market that is valued at more than 15x earnings with zero earnings growth this quarter.
Sub 2% growth in the US and Europe is in a recession despite the massive amount of stimulus being applied.
I honestly say that gold and silver are undervalued considering the problems in the world.
I had someone try to sell me a month ago that Coke was a growth stock with 5% earnings growth and a 20 PE. Seriously.
Stocks take a decided turn down as Bernanke speaks and seems to rule out any more stimulus for the moment. Seriously? The chairman again promised QE will continue even after the economy recovers and the market wants more? DJIA -0.6%, Nasdaq -0.6%. [View news story]
The Post-Election Trade Points To Gold And Silver [View article]
The Post-Election Trade Points To Gold And Silver [View article]
I firmly believe that there is a gold and silver shortage because, quite frankly, the supply and demand numbers do not add up.
The Post-Election Trade Points To Gold And Silver [View article]
We need real reform across the board. I see the biggest problem as a tax code that is greater than 73,000 pages in length. The more complex you make something the more people try and avoid it.
That can extend to Obamacare as well. The more complex the more people try to evade it.
Pan American Silver Turns The Corner [View article]
Argentina is a problem that will be a thorn in the side of mining companies for some time. If you read the transcripts and MD&A the comments regarding Argentina are across the board. It is a difficult situation to manage and many firms have marked down the mines to care and maintenance levels but often the value will be realized eventually.
No one can predict the future, but that central banks will continue pump-priming next year is about as certain as it gets. Look for gold to take out $2K/oz. in 2013 as a result, says Deutsche's Ray Key. Bulls should nevertheless take caution at these levels, he says, because the market "remains fundamentally long." A two-handed forecast if there ever was one. [View news story]
No shocker, U.S. bank regulators postpone indefinitely the January 1 implementation of Basel III bank capitalization rules "due to the wide range of views," expressed by those affected. [View news story]
One example is a warrant the was offered in a takeout of a junior mining company. Because the warrant was not offered to all shareholders of the company it needs to be listed as a liability and marked to market every quarter which increases earnings volatility. When commodity prices increase, stock prices increase, which means the liability increases causing a negative mark to market on the Income Statement and lower profits. When commodity and stock prices fall the opposite happens.
IFRS is more subjective and less transparent than the rules based GAAP which will lead to more judgment being taken by managers trying to hit the quarterly numbers.
These are not American standards but European standards which are not well suited for the number of global multi-national businesses headquartered in the US.
Under IFRS the Income Statement and Balance Sheets become less useful and the Cash Flow Statement becomes the most important component of security analysis although they move items around into odd areas as well.
No shocker, U.S. bank regulators postpone indefinitely the January 1 implementation of Basel III bank capitalization rules "due to the wide range of views," expressed by those affected. [View news story]
"Failure to avoid the fiscal cliff and raise the debt ceiling in a timely manner as well as securing agreement on credible deficit reduction would likely result in a rating downgrade in 2013," says Fitch, in a note titled, "No Fiscal Honeymoon for President Obama." (Moody's earlier) [View news story]
Down 1.9%, the DJIA slips below 13K for the first time since the day after Labor Day, and is off 4.4% since the September 14 QE∞ top. The S&P is off just about 5% since then, the Nasdaq 7%. Treasurys are having their best day of the year, the 10-year yield down 12 bps to 1.63%. [View news story]
Down 1.9%, the DJIA slips below 13K for the first time since the day after Labor Day, and is off 4.4% since the September 14 QE∞ top. The S&P is off just about 5% since then, the Nasdaq 7%. Treasurys are having their best day of the year, the 10-year yield down 12 bps to 1.63%. [View news story]
Technicals have looked very poor for the past two weeks. If we break 1400 watch out below.