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Vision Capital M.

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  • Why Dick Bove Is Wrong About Citigroup [View article]
    Who is Dick Bove?
    Anyway... nearly 3.5 billion shares changed hands today and the price sustained. Still some more to go I think... The company should care about the government shares no more than it cares about the shares of any other shareholder. If I need to sell a big amount of my shares I would try my best to eliminate my biggest competitors in such sale. That offer price did just that.
    Dec 17 04:18 PM | 5 Likes Like |Link to Comment
  • Just One ETF: Even With Deflation, None As Good As GLD [View article]
    I think you're right.

    What I think the author is basically saying, is that he tries to explain why he is long in gold. This doesn't mean that he is right.

    And that core argument you pointed out is put in somewhat like a one year time horizon (the last paragraph about what could go wrong) - a period too short for me to prove if this is a right argument or not.
    It just sounds sort of logical but exactly that safe-have attitude is what is able to bring the prices of gold down.
    Jun 3 09:28 AM | 3 Likes Like |Link to Comment
  • Just One ETF: Even With Deflation, None As Good As GLD [View article]
    Possibly because cash could be pretty easily devalued by more cash even if the prices fall because of a deflation. Putting real gold into the market would be much harder especially in such amounts. But with today's virtual trading it's not so imposible.
    Jun 3 06:56 AM | 3 Likes Like |Link to Comment
  • TGI Fed: Help Us O-Ben One Bernanke, You're Our Only Hope! [View article]
    B. Bernanke on November 4, 2010: "This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion."

    The main idea of QEs was (is?) to ease financial conditions, including to increase the stock prices. Bernanke believes higher stock prices would promote spending... If stock prices always increase why should anyone sell? It seems the way to capitalize on the growing stock prices without selling is to use those stocks as collateral for credit money which later to spend. It looks like a crazy spiral...
    Sep 1 01:00 PM | 2 Likes Like |Link to Comment
  • Dramatic Decoupling Of U.S. Stocks From Global Equities To End [View article]
    Bob and James, I completely agree on the stronger dollar idea and the global nature of the economic world. Those are especially important in a weak international environment like the one we have these days. As if most of the market participants seem to leave this out of their perspective and focus only on the strong internal qualities of companies. But what has been earned in the past does not have to be repeated automatically in the future...

    It's a nice coincidence that in one of my articles today I examine the same topic but talking more about some of the fundamental reasons why the U.S. economy, and equity markets respectively, could face a hard landing in near-term. Particularly focusing on the international trade and the hardly sustainable domestic consumption.

    I'm glad I found your piece, James.

    Thank you and regards.
    Jul 23 12:44 PM | 2 Likes Like |Link to Comment
  • Der TARP: Germany Is Hiding a Big Banking Problem [View article]
    It was more than obvious that the default of Greece was better for the country itself. What was it not good for were the creditors of Greece. So the creditors agreed to give the country money to pay its short-term bills. They hope to have enough money to support action like this in times of need.
    The weak Euro is as good for the EU as was the weak Dollar for USA. And it certainly is good for Germany and for all the debt that has to be paid in Euro. Hard for China and it's export to EU => good for EU light industries...
    May 19 06:23 AM | 2 Likes Like |Link to Comment
  • Can The SNB Make A Profit On Currency Reserves? [View article]
    In fact through the current crisis many central banks are diversifying their reserves and basically trying to move away from highly concentrated U.S dollar reserves. This further increases the supply of USD and demand for other assets, most of which are priced in USD, so in general their prices grow. I have to check the most recent data to see if there is any change in this tendency but I doubt there will be.
    In a long term given the process continues long enough, the U.S. might be forced to take measures to increase the attractiveness of their currency because of the lesser demand. Which leads us to some scenarios like hiking the price of gold some ten (or so) folds from now to match the available USD money base and then using it as a stability point, a theory which was examined by the Guggenheim's CIO in this article - Whether it would be gold or some other asset to be used as a reference point is about to be seen. But the central banks accumulating reserves different from the USD (euro in the SNB case) and USD denominated assets can hardly be neglected.
    Nov 1 07:53 AM | 1 Like Like |Link to Comment
  • Can The SNB Make A Profit On Currency Reserves? [View article]
    George, thanks for the insightful article.
    I have to ask something though. It might be oversimplified but why the SNB would not sell euro against the USD or the CHF at the current higher rate to lower some of its FX reserves? It could make a perfect sense... lowering the reserves, writing some profits (which could serve to offset future loses) and repeating the "peg - EURUSD" cycling relation again.
    Sep 27 10:15 AM | 1 Like Like |Link to Comment
  • Europe And Stocks Finally Have Solid Support [View article]
    The pressure on the "troubled area bonds" is there for a reason. Artificially increasing demand would not change the cause for the pressure. Besides, the Spanish officials does not seem very happy with the EU interventions so they would postpone as long as they are able. Having a determined buyer on the secondary market could indeed lower the yields on the short term bonds but would mostly benefit the primary buyers at the expense of the ECB. They would be able to sell quickly while Spain would only borrow... in fact from ECB, even if technically this would not be the case.
    Sep 12 04:14 PM | 1 Like Like |Link to Comment
  • Shorting The S&P 500 On Jackson Hole [View article]
    Intact Capital, I appreciate your input and stand corrected.

    The graph of the VIX value and the VXX price since the beginning of June located here (I'm sorry it is on another website but I can not include pictures here) shows that in times of extreme movements of the VIX, a position in VXX could be useful as the VXX price would increase rather than fall for the period, even with the premium included in the futures contracts. For periods which include a more steeper decline of the equity market this behavior is even more visible. For the period included in the graph (the last 3 months) the correlation between the two values stands at 0.94 while since the inception of VXX it is at 0.77.

    I admit the details matter and I should have included a broader examination of the risks inherent in the fund and the proper timeframe of holding it.

    I also agree that using some other strategy, for instance options, to protect against a possible downfall of the market could be a better approach and I should have included it in the article.

    Regards and thanks for your comment.
    Sep 1 12:13 PM | 1 Like Like |Link to Comment
  • Gold: A Review Of Possible Effects Of The Proposed Regulatory Risk Changes On Its Price [View article]
    winningtrader: Thanks for your comment. As some of commentators below (Noneleft) pointed out - even if there is a manipulation, it also affects supply and demand. And by definition the manipulation has an end. So it should be temporary at worst case no matter how severe it seems to be at times.
    Jul 13 08:52 AM | 1 Like Like |Link to Comment
  • Just One ETF: Even With Deflation, None As Good As GLD [View article]
    Nice interview. I especially like the answer on "what could go wrong with your pick". Concerning that - what about the strong Dollar and it's negative effects on the US economy? And it's good effects on the EU economy? A simple increase of the available dollars on the market and the positive correlation between the Dollar and Gold could drive Gold down even if there is no global recovery in place. Or before that recovery gets visible.
    Jun 3 07:06 AM | 1 Like Like |Link to Comment
  • Is Gold the Magic Hedge Against Both Inflation and Deflation? [View article]
    Too many bulls in the Gold market...

    "That’s what Mr. Market has been telling us lately with gold prices moving up. Always a good idea to listen to him."

    It is a good idea if someone sees (and apparently you do) a road ahead. Otherwise it would be simply stupid to follow only on past performance.
    Jun 3 06:46 AM | 1 Like Like |Link to Comment
  • Citigroup (C) and Goldman Sachs (GS) capitulate on the dollar, raising greenback forecasts based on a strengthening U.S. economy. But maybe it's not so much love for the dollar as contempt for everything else. “We have clearly underestimated the impact on the euro from the European sovereign crisis,” Goldman strategists say on their decision to exit the bullish euro bet it made two weeks ago.  [View news story]
    They cut the bets probably because the stop-loss levels were reached. Now after they are cleared the Dollar falls again.
    The fact is the bets are closed. The reasons could vary. I wouldn't be surprised if they make similar bets these days. Or even if they have made ones today.
    Mar 29 04:30 PM | 1 Like Like |Link to Comment
  • FOMC Statement, Translated [View article]
    It's a common feature to not see (or pretend you are not seeing) the situation well when you are deeply involved in the very midst of it. So we shouldn't judge people who can't see the opportunity when it is right in front of their eyes. After all if everybody sees the same thing there couldn't be any winners.

    So time will tell who is right. The sad thing is many people just listen to the loudest talking and accept it's the right one. Sheep get slaughtered and that's the rule of the game. :)

    Get your gem and act on it!... And be happy not everybody sees it :)
    Jan 28 05:52 AM | 1 Like Like |Link to Comment