Larry Nusbaum's  Instablog

2. Here is a fund (FSAGX) which invests primarily in companies engaged in exploration, mining, processing, or dealing in gold, or to a lesser degree in silver, platinum, diamonds, or other precious metals and minerals. Its top three holdings are Barrick Gold, Goldcorp and Newmont Mining.. The theory is that mining companies benefit more from gold's rise in price. Assume it costs them $600 a produce an ounce of gold and gold is $800. They make $200. If gold goes to $,1000. They make $400 -- twice as much. But gold has gone up only 25%. Sometimes this maths works.

At issue is whether corporate money can be used to directly advocate election or defeat of federal candidates.

Specifically, the nonprofit Citizens United funded, in part with corporate money, a film that attacked then-presidential candidate Hillary Clinton.

While the 90-minute film does not expressly advocate for Clinton’s election or defeat, it discusses her Senate record, her White House record during her husband’s presidency and her presidential bid.

The FEC ruled that its airing violated the federal law’s definition as “electioneering communications” because the group was planning to run ads for the movie as the primary election season was getting under way.

For more, read this piece from Bob Kerrey: As Supreme Court Hears Landmark Campaign Finance Case, Public Funding Solution is Missing

As to current status; as we all hear, the politics of the bail out and the incredible inaccuracies being published by the press are all in full play. Often times the politics of a state or region will create a huge impact upon the decisions made by regulatory officials regarding intervention or receivership. There have been so many “buried” articles out there in the last six months which only serve to confirm that much more foreclosure or workout activity remains to even being; the Alt A and ARMs are coming around now for rate adjustments, many second or home equity lines have been frozen or called due to declining collateral values; and now the commercial retail market is on a downward plane. Finally, Chairman Bair (FDIC) went on the record to state that they need to be enabled to carry out their work and that DC must ditch the ridiculous notion of “too big to fail”. Rational minds could prevail; we’ll see.

Point here is that it is clear the list of troubled banks continues to grow; the economy is still in difficulty and much of the news one can read in the marketplace is irrational if not an exercise akin to reading tea leaves.

The whole bank purchase/takeover remains the FDIC’s preferred venue of resolution. The downside to such activity is that the transaction is very costly at the settlement stage years later. Everything is being pushed out. The only logic I can find in such decision making is that the governmental apparatchiks are gambling on a controlled inflationary cycle to end the current economic cycle and get healthy on inflated balance sheet figures in the near term. Big gamble.

Other news: Some of the my team members have been getting phone calls over the last several days inquiring about availability and rate. Projects are lining up in Florida, Washington, and soon, southern California again. Candidly, Florida is going to witness the takeover of several large banks in succession, presuming no whole bank acquisitions occur. If you’ve followed insurance you’ll note that the life insurance market is plagued by the same balance sheet problems as the commercial banks are today but that their reckoning is one year later in the making.