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Tom Luongo

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  • Gold Bull Market: Next Stop Exchange Failures [View article]
    @Jake Everytime I hear that I die a little inside. Inflation is the expansion of the money supply. Price inflation is the consequence of that. In the current environment we have a credit bust and a base money expansion. This is a recipe for massive price inflation that will take hold once the peripheral economies tip over. Europe is well along the way, Japan is in process and when the dollar is repudiated by enough people in international trade, it will happen to the U.S.
    May 28 05:02 PM | 11 Likes Like |Link to Comment
  • G20 Sparks Gold's Ugly Sell-Off [View article]
    @Abe It didn't work out and prices have dropped. When a breakout fails (for whatever reason) then the response is usually of the type we've seen.

    BTW, does it feel good to gloat? I'm not the first guy to call a failed breakout in the history of markets. And I won't be the last. Does it invalidate the long-term thesis or the short-term trade setup?

    I'm still firmly convinced that much higher gold prices are coming this year and am ok with it not happening now. And if in March Gold is $1800 per ounce then will I have been vindicated?

    It was a trading call, Abe. Simple as that. Y'all tried to turn a trading call (published with probabilities of success) into a multi-year investment thesis to prove my trading call wrong and that was the argument. It has become a stupid chest-pounding ego contest that I've never been interested in participating in. But, we've already established that I'm the better man than this, if I remember correctly.

    If three years from now gold is $12000 per ounce will I gloat in public about your horrific bad call on Real Estate vs. Gold? No. Unless of course you are still telling everyone that it's all a horrible mistake. Bob Prechter is still telling people Gold is going to crash and people still believe him. It's sad. Man up and move on.

    I'm not shocked that the breakout failed. For many of the reasons you've cited --- Don't fight the Fed etc. You and I disagree to the level of control they ultimately had. I do believe you can't handle someone not being impressed by you so we have to have these little tantrums in public.

    And I posted my first article on SA on christmas day. It was a month ago. A lot can and does happen in a month.

    So, how's my call on bond prices working out? Or the recoupling of gold to the euro? or the directional link between gold and the 5/30 TIPS spread? They've all been right and they've all moved, in the short term against Gold.

    Ascribe what reasons you want to them.
    Feb 16 05:09 PM | 11 Likes Like |Link to Comment
  • Gold Breakout In Process, Thanks To Germany [View article]
    @User: GLD a price suppression mechanism by being a sink for rehypothecated gold. The holdings are paper that cannot be delivered. Hence the supply is an illusion and in order to redeem out of the GLD the custodians would have to find physical. Where are they going to find that?

    Your perception of GLD is exactly backwards. The futures market works the exact same suppress the price not enhance it. The people suppressing the price are the ones who want more of it, btw.

    The sentiment in gold is BEARISH and has been for 18 months now. It hasn't been this bearish since the bull market began in 2000. Honestly. To be short gold is to be bullish on the Dollar. Until you can convince me of an argument for the dollar that does not involve the Fed flushing the NY banks, then I'm all ears.

    Gold has had every single thing possible thrown at it from $341 per ounce to today. And it's still risen 500+%. It's a currency, not a commodity and it's primary function will be as a store of value.

    The balance sheets of the world's central banks will be balanced by gold. At this point you can pick a number between $9k and $15k for that to happen to the Dollar price of gold. That's how much money has been created that cannot be destroyed without taking the banking system with it. The Bundesbank insulting the Fed like this is a very strong signal that they have the hammer and are prepared to use it.
    Jan 17 01:09 PM | 11 Likes Like |Link to Comment
  • Don't Believe The Hype In Gold [View article]
    Really? no inflation. gold was up 6.0% in 2012. Oil was up 3.6%. Soybeans? 40% or so. Corn? Wheat?

    And if Core CPI had any validity as a metric whatsoever then for the past 4 years gold would have been up around 10% maximum and yet it's 60% higher than its pre-Lehman 'bubble' peak and it's more than doubled over the post-Lehman low.

    Gasoline would also be around $1.40 per gallon. But, food and energy aren't rising in price according to the CPI.

    The lesson here is that when you can goal-seek the numbers like CPI or Unemployment by defining them how you want then the numbers have no validity.

    I'm a chemist. I deal in real information. If I decided that I didn't like a result so I altered my instrument's calibration to reflect the result I wanted I wouldn't be fooling anyone. To me that's what the CPI is, a constantly recalibrated instrument to create a number that suits the needs of the Fed and the administration.

    They will understate inflation that the Fed is inviting in order to create more spin that they can continue QE which they have to do. to keep the system from truly collapsing.
    Jan 6 10:55 PM | 11 Likes Like |Link to Comment
  • Short Covering In Gold Just Beginning [View article]
    @golfin Yes, my goats have been the subject of many a comment in article threads past. I milk a handful of nubians twice a day and my wife and I sell at the local farmer's market.

    The girls are all heavy pregnant and we'll be bottle feeding in April/May.
    Feb 11 10:11 PM | 10 Likes Like |Link to Comment
  • Gold Breakout Occurs As The Days Turn Long [View article]
    @Montana So use me as a contrarian signal. That'll work until it doesn't.
    Jan 20 09:44 AM | 10 Likes Like |Link to Comment
  • Intel's Game Of Musical Chairs: Don't Make A Grade-School Mistake [View article]
    They shut down Alex Gauna similarly over Asia after admitting that they see no growth there. I've read many earnings transcripts and this was one of the worst I've seen. Even the sympathetic analysts throwing softballs were rebuffed.
    Jan 17 08:58 AM | 10 Likes Like |Link to Comment
  • Miserable Housing Data Propels Gold Back To $1400 [View article]
    @F&G Nearly 1100 people must be complete idiots. Nice way to build relationships.

    Actually if you look closely at my archive you will see a number of statements which have been spot on correct and these are far bigger issues than what happened in the paper gold markets for a few months. These are foundational shifts in the global economy.
    1) If gold broke below $1525 it would ignite a firestorm of physical buying that will begin the next leg of the bull market higher.
    2) The Cyprus bail-in would prompt capital flight out of Europe and a run on the bullion banks. ABN Amro and Rabobank have defaulted on their allocated gold accounts.
    3) Foreign EM CB's would have to stop buying USTs by the summer in the face of dollar strength once they chose sides between them and China. TIC-Tock goes the Gold Clock.
    4) The Fed will talk tough about Tapering but will in the end not do so for any length of time. They've been talking taper since May. Actually they've been talking about ending QE since January. It's August. Still waiting.
    5) The Bear Market in USTs began last July and has now intensified. The sell-off on March 1st of this year was a major clue as to what bond traders really think of the situation.
    6) In April I said the TIC report would show distribution of USTs when the reports came out.
    7) If gold were to break down below $1400 per ounce it would begin the process of breaking the COMEX. JPM's out of gold, beggaring daily committments from Scotia-Mocotta and HSBC.

    Wah. The price of gold dropped and put in a near-term bottom. Was I wrong about the price movement this year? Yes. Was I right about the consequences of that price move? Yes. Did I not say also that I underestimated the resolve of the central planners to attempt to break the gold market? Yes.

    Will it matter in 2 years? No. Everyone who listened to my original advice to buy with their savings an amount of gold at the end of each calendar month to maintain a portfolio allocation that they are comfortable with (5-25% or more depending on your risk tolerance) is in a fine position today.

    This is not a bear market. This is a bear wave within a major bull market that will reshape the financial world as we know it.
    Aug 24 10:51 AM | 10 Likes Like |Link to Comment
  • Gold Bull Market: Next Stop Exchange Failures [View article]
    @oil Go look at 1976 for a comparable. Not 1980. And today if Volcker were to come in and raise real interest rates to 20% to wring out the inflation created by the Bernanke and Greenspan Fed's the banking system would completely collapse.

    Yes, yields are rising and it was during the late 70's when yields rose that gold made its greatest gains... from $100 to $880. The same things were said then. Volcker himself said the biggest mistake they made then was not suppressing the price of gold. To think the Fed is not suppressing gold prices is naive. Of course they are.
    May 28 11:33 PM | 10 Likes Like |Link to Comment
  • Bernanke Sets Gold Free For Now [View article]
    @Invest then why doesn't the treasury sell it? Why did we stop convertability to gold in 1971?

    I recommend a quick perusal of Rothbard's What Has Gov't Done to Our Money to get some idea of just how off base about money you really are.

    You might want to re-think that discounted cash flow analysis, frankly.
    Feb 27 11:40 AM | 10 Likes Like |Link to Comment
  • Stunning Bond Collapse Will Be Gold's Gain [View article]
    @Suresh: I believe the Bundesbank wanted their gold back in 7 weeks and the Fed told them 7 years. German gold is being held hostage because it has been leased to keep the price under control.

    That's what I believe.

    I wrote about it after it happened.

    The breakout was smashed on purpose because of options/futures expiration and the massive redemptions the COMEX knew they were looking at. Patience.
    Feb 2 04:47 PM | 10 Likes Like |Link to Comment
  • Gold Breakout In Process, Thanks To Germany [View article]
    @USER441444 Gold and the Euro are tied at the hip. If you do not understand the importance in the difference between the ECB and Fed's balance sheets because of this you will continue to labor under a serious misconception.

    Mining share performance is irrelevant to the price of gold as it is dependent on a number of factors, the price of the commodity notwithstanding. The reality is that most mining company execs are liars and vastly over-estimate their reserves value to entice investment.

    Are you bearish on the Dollar? If you are you have to be bullish gold. they are the flip side of each other. Gold is a currency and it should be traded like a forex pair.
    Jan 17 11:40 AM | 10 Likes Like |Link to Comment
  • Don't Believe The Hype In Gold [View article]
    Price inflation is a consequence of changes in the money supply among other things. Not convenient it simply the truth. Ignoring monetary effect on prices... like stripping out the things from the CPI which are most sensitive to changes in the money supply (core CPI) .. is what is truly convenient.
    Jan 6 10:11 PM | 10 Likes Like |Link to Comment
  • Markets Still Unclear About AMD's Future [View article]
    @Stocks No, I think that sell side analysts are generally just slow to grasp new wrinkles in the market for fear of being dead wrong. It's not personal to AMD. But, the company's history does not help in this regard. This is why I brought up the management angle in this article and it is something I'll try to highlight in future ones. Culture change in an organization is difficult to pull off but it starts at the top and works its way down.

    Read is a no-nonsense, focused person and probably benefits a lot from being so far removed from the root of AMD's problems of the past that he can aggressively pursue new strategies and personnel without much internal resistance. This is part of the reason they were able to perform the turnaround so quickly and successfully.
    Feb 14 04:02 PM | 9 Likes Like |Link to Comment
  • Early Mantle Results Support AMD's Low Power Strategy [View article]
    @kjurden Thanks. The effect on INTC and NVDA is a difficult one because there are so many moving parts to the computing story. INTC has a Fab problem. It has expensive fabs making expensive chips for an industries shifting away from what they are selling. They cannot continue to sell Bay Trails at a loss to build marketshare for too long.

    I just started digging into AMD's server strategy with Seattle and I wish I was better versed in that part of the industry to intelligently comment on it but my intuition tells me that INTC is in trouble there long term as well.

    NVDA is simply flying into coffin corner and anyone who can't see that simply has blinders on at this point. All of their products are a year late, cost too much, use too much power and are ill-fitted to the future of computing. Oh, and they have ticked off nearly every other conceivable partner which precludes meaningful deep partnerships on new tech.
    Feb 6 05:15 PM | 9 Likes Like |Link to Comment