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Interesting Times
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I could put on this bio my education, work experience, investment strategy, and a nice thin (if I can find one) picture of me in a suit looking *smart*. Sorry but that's not my intent here. Sure I invest, help family make financial decisions, and make a ton of mistakes along the way. But my time... More
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Interesting Times For All Commodities And Investments!! CHAPTER 4......
  • Interesting Times For All Commodities And Investments!! Chapter 28............  257 comments
    Jul 22, 2013 2:28 PM

    What started out as a small group discussing anything related to investing has grown extremely educational over the last few months.

    We have Authors, Financial Advisors, Seasoned investors, Experts in specific fields, and just the average Joe pitching in...

    Folks.. we are growing and posters like it. If you are new to investing then this site is for you.

    Here is the link to the READING MATERIAL !!http://seekingalpha.com/instablog/5038891-interesting-times/1998262-interesting-times-for-all-commodities-and-investments-reading-material

    HERE IS THE LINK TO THE PORFOLIO EXERCISE !!http://seekingalpha.com/instablog/5038891-interesting-times/2054352-interesting-times-for-all-commodities-and-investments-portfolio-exercise

    I am going to be the first one to admit that I haven't a clue when or if Gold and Silver will ever take off in price. I invested thinking they will though. Additionally I don't see much coverage or articles pertaining to the other commodities. So I started a blog where every commodity, and every investment is on the table for discussion. Even political questions. I only ask that you be courteous!!

    Someone posted the difference between being smart, foolish, and a moron. Well I have been all of the above and I will "man up" and admit it! However I came away from those experiences with both battle scars and knowledge.

    For years I have been reading basically any day now Gold and Silver will explode. I am by far a gold or silver bug. Yet somehow the can gets kicked down the road and I live to learn another lesson. Then Sprott's ETF'S (NYSEARCA:PSLV) are talked about as being safer then others (NYSEARCA:GLD) and (NYSEARCA:SLV).

    With all the QE'S basically not creating any new jobs what will be the consequences in the future?. Will we be "CYPRUSED "? Are we in a serious stock market bubble? Obviously we read daily about these concerns but what about other INVESTMENTS? Here is where most of us are uninformed and relish an education.

    Individual stocks are fine to discuss as well. All of us know that commodities should only be a % of your portfolio. I owned (NASDAQ:PSEC) and liked the dividend. Others may not ! So please feel free to entertain your picks and why!

    REE'S have been an interest for a few of us over the last couple of years. I had exposure to Lynas (OTCPK:LYSCF). Some posters might have questions about this group as well.

    If you disagree with a post please bring proof and display your argument. If you agree with a post, find one interesting, or have questions please feel free to respond. We must remember were all in this together. So if you want to talk politics and how it affects everyday life, fine with me!!

    Now if some have an opinion on Copper, Zinc, Palladium, etc. Do not hesitate to post that. Most of us might not understand the post but I am sure we'll be open to learning. Lumber might interest someone and I would like to learn why I should invest in it. PLEASE bracket any symbol as it also allows a reader to click on it and get some data.

    My part time job is a college and high school official so I can sit here and referee all day long. I honestly hope that ALL will be professional with their comments. So lets see who comes on board. Looking forward to what can become a nicely knit group of diversified investors.

    I have invited a few Authors whose work I admire to bring their expertise to the forum here as. Eric, Hebba, Doug to name a few, in no particular order, will drop in once in a while to voice their opinions. Please feel free to ask your favorite Authors to join in the discussion.

    These are highly recommended people that I suggest you follow as well. I have learned a ton from them and find their work both challenging and engaging. Two areas that I hope inspire people who normally don't post to now feel free to do so !!

    Now I also feel compelled to encourage the use of the like button. It is human nature that once someone posts and see the like button add up they will feel they made a valid point. Upon that feeling they will post again! So if you do like what someone posted, either a question or an answer PLEASE use it ! It might help our core grow exponentially as well

    LURKERS , we are waiting for you to post here too!

    We are living in some very INTERESTING TIMES !!

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Post Politely

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Comments (257)
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  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » Gold and Silver... A bounce or much more ??
    22 Jul 2013, 02:29 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    A pullback...no more NUGT. Bought some DUST for a short term play.
    22 Jul 2013, 03:10 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Plus, I like confusing the bears!

     

    :-)
    22 Jul 2013, 03:12 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @DOUG

     

    Gonna join us in the PORTFOLIO EXERCISE.??

     

    Come on , as all you will do is pick a portfolio in Aug and no trading..

     

    It will be talked about all week in that chapter to finalize the details.
    22 Jul 2013, 03:21 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Sorry...can't afford any distractions and I can't concentrate on much else but writing.

     

    I stopped in to make a couple comments to you, to keep the love alive, lol...and to Macro, my old arch nemesis... Part of the reason I bought DUST, lol...I like Macro's short term analysis, but not his/her economic understanding.

     

    Good luck!
    22 Jul 2013, 03:25 PM Reply Like
  • TakeFive
    , contributor
    Comments (5204) | Send Message
     
    Well I hope it's a lot more. I had roughly 5% of my folio in gold/silver miners. Likely worth closer to 2.5% now.... lol. At least part of the percentage change is from the rest going up nicely. Also fortunately I picked up my gold holdings at last year's lows... which of course have been put to shame this year.

     

    Oh, the ups and downers of the market.
    22 Jul 2013, 05:00 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @DOUG

     

    (NUGT) ain't dead yet !!
    23 Jul 2013, 11:09 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    @ IT, Can't time the market perfectly. But can be happy with profit.

     

    Glad I sold my DUST before market open. Only made $250, but I'll take it. Could be down over $1,000.
    23 Jul 2013, 12:14 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @DE

     

    Any profit puts a smile on my face !!
    23 Jul 2013, 12:33 PM Reply Like
  • sdavid0419
    , contributor
    Comments (872) | Send Message
     
    I got into gold at $600 and silver at $12 for the reason I saw the government spending more than it was taking in and reasoned hyper inflation had to be on the horizon. For the same reason or not gold made it all the way up to $1800 and silver over $50. According to Ben using Bill Clinton's NEW INFLATION calculation there was NO inflation (using the old calculation that was good forever inflation was over 10%). I was not into gold for protection against 10% inflation or I would have bought it when Nancy Reagan was pushing WIN buttons. I figured we haven't seen hyper-inflation because Ben has been playing every game in the book to prevent it. All of the money he has printed is in the form of bonds and reserves in bank vaults. Well now that it is finally time for BEN to get off the stage interest rates are going up and banks are lending that money they have been sitting on because they can finally get more on it then the measly .25% we the tax payers pay them on their reserves. As the money begins to circulate we finally see wages rising more than they have over the past 6 years and with that combined with the money in circulation increasing comes: Chicken doubling in price overnight, alvacados that were 4 for $1 last week are $1.48 each this week. My friend that has 400 garden apts is guaranteeing rent thru 2016 and rented 7 apts over the last 4 months this month he has rented 10 apts so far and the month isn't over yet. Is this the hyper-inflation? Did the government orchestrate the gold sell off in order to take your eyes off of this inflation? According to an article by Cody Willard, Venezuela requested that the US return to them 200 plus tonnes of gold which they got. On the heels of this Germany has requested we return 321 tonnes of their gold and the reply we gave them was sure you can have it but it will take us seven years to deliver it. We know from past revelations that JP Morgan and other big banks have shown metals that they have sold and delivered as still being on their books as in stock so that they may go far beyond their legal limits on margin trading. Using ETF's like GLD and SLV they begin shorting beyond the legal limit along with an army of bloggers and chartists hollering "the bubble is bursting" and the sheep with a ten second attention span all begin dumping at the same time!!! Since I started so early and my position is virtually free I have no reason to panic sell and my original defense against inflation is still in place.
    27 Jul 2013, 09:42 AM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @SDAVID

     

    Welcome.

     

    I agree that if you don't do the shopping you have no clue inflation is here. I JUST DID NOT REALIZE IT IS PICKING UP THAT QUICKLY ALREADY.

     

    Thanks for that info. It is funny though that I read a ton of post here pointing out how great the last 4 years have been. Like some of us are fools for thinking outside the box and putting this large puzzle together,

     

    Some are going to wake up one day to a huge surprise. We had a small sell off of 7% that lasted a few weeks and all of a sudden the correction is over. Really. that was a correction? 2 weeks huh ?

     

    IMO the gold sell off allowed the banks to cover their shorts. Most have no clue that the banks are now net long on gold..
    27 Jul 2013, 09:55 AM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    You have some good points.
    You're right inflation is alive and well despite the govts convoluted way of tracking it. Most everyone knows that just about everything we need to live on has continued to go up in price and the markets are being inflated intentionally, instead of just being allowed to rise, back and fill and trade on the real economic fundamentals.
    If gold is useless why do the central banks buy and hold and hold it?
    27 Jul 2013, 01:05 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4316) | Send Message
     
    @SDavid

     

    FYI, we move onto new chapters as these get too long for some folks' to load. So join us too in the new discussions :). (As you can see if you post here, you'd be seen too.)

     

    http://seekingalpha.co...
    27 Jul 2013, 01:58 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    I would say a bounce but I am neither buying or selling gold at these prices.

     

    There was an article in this week's Barron's, titled "Gold is Regaining its Glow"

     

    http://on.barrons.com/...

     

    The author, Gene Epstein, argues that $1550 "seems plausible" for the reasons cited in the article.
    22 Jul 2013, 02:38 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    South

     

    $1550 represent the 200 day MA trend line, which is currently in a downward slope.. Can easily see why he pegged that level. If gold does indeed rally from here, it will approach that downward slope around 1500 or lower. The area of the "mental" stop for my "short position"
    23 Jul 2013, 12:54 PM Reply Like
  • Notrub
    , contributor
    Comments (370) | Send Message
     
    Decided to play the 14% dip on (MSFT) bought 300 shares at 31.85. Then turned around and sold the 17AUG13 call at 33 x3 for $60 premium.

     

    This was mostly because I was sitting on a bunch of cash because all my calls for 7/20 were exercised.
    22 Jul 2013, 03:00 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Not,

     

    If my math is correct it works out to about 4% yield for a month - if u get called away. Nice !
    23 Jul 2013, 01:38 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @NOTRUB

     

    You in for the PORTFOLIO EXERCISE?
    22 Jul 2013, 03:07 PM Reply Like
  • Notrub
    , contributor
    Comments (370) | Send Message
     
    Sure, I'll keep it simple. 3000 shares of MSFT on 1AUG2013.
    22 Jul 2013, 04:16 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » NORUB.

     

    Ok, just post that on August 2nd with the closing price of AUG 1ST and the amount of shares you get !

     

    In the PORTFOLIO CHAPTER >>>

     

    Fractional shares are fine as long as you come close but do not exceed 100k....I am not charging any transaction fees !
    Thanks!
    22 Jul 2013, 04:21 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    My latest position on Gold

     

    http://seekingalpha.co...
    22 Jul 2013, 06:08 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Yeah, the hardest thing for any of us to do is admit we are wrong, especially the perma bulls in gold!

     

    I bought some DUST today, lol... sold the NUGT. Things that go up that fast usually retreat some.

     

    Thanks for posting your thoughts F&G. Some very strange things occurring in gold right now. Not enough for me to write about just yet, but I would write a cautious article at present with the latest run up. We're not ready to take off just yet.
    22 Jul 2013, 06:38 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Doug,

     

    Your NUGT call was spot on,, nice trade.. !
    22 Jul 2013, 07:11 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Thanks F&G...

     

    But now hope my DUST call (thanks to Macro referring me back to it) is spot on. I won't wait long for profit although Macro is holding for a year (claims) which is more in line with your type of thinking about gold (not mine).

     

    I did write a cautionary article, short as it was, today; http://bit.ly/12dw1ca

     

    Google penalizes me if I don't keep writing something at least once a month, lol. I just feel time is ripe for a pullback and write about what I see. Dollar I think is due for a bounce (main reasoning) or to put it another way, Euro due for more bad news.

     

    We shall see...
    23 Jul 2013, 12:57 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Sold DUST for a small profit this AM. I just don't have time to trade right now.

     

    Good luck all!

     

    Hunkering down to write the next month.
    23 Jul 2013, 09:16 AM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    Question is, how long do you hold? I bought NUGT a few days ago at $6.28. It would be easy to take profits now but that quick a trade would be heavily taxed and since i personally believe PMs in general are on their way to much bigger and better things, I am holding both my PSLV and NUGT for a good while. One year ago NUGT was $80. I am not saying it gets back there any time soon but $30 wouldn't surprise me and that would be good for 5x the original buy price.

     

    I know I am redundant but PMs are a great choice moving forward. Already the returns are coming in! ... and I am long.
    23 Jul 2013, 06:47 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    richonsilver, you sell the NUGT now, pay the tax, that's a nice trade. How often do you have that nice a return in that short of time.

     

    I think the leveraged ETF's are better suited for swing trades and possible day trades, not long term holds.

     

    I dipped in DUST again at market close, lol. Less shares this time. It's a wild one, but thinking we get a reversal in gold here soon.

     

    But as I said, I really should be writing, not trading!
    23 Jul 2013, 07:17 PM Reply Like
  • CoinsK
    , contributor
    Comments (3479) | Send Message
     
    I wrote this on your blog F&G

     

    So being long (DZZ) means you are l shorting Gold. I have used (ZSL) with Silver when the price was too high in 2011 and physical was just coming in the door faster than I was interested in. Why use a leveraged short ETF at this stage of the market ? Seems a little premature unless you are just trading for a day or 2 .
    24 Jul 2013, 06:51 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Coins,

     

    My reply as posted there :

     

    Thanks for the input, as i mentioned its a short to intermediate term trade. Always difficult to be precise , so i am "scaling" into the trade as it unfolds. As of today the initial resistance was broken so I was wrong at that "stopping" point.. (1300-1320) . I'm now looking at 1400 , depending on how gold trades from here i will add to the position there.

     

    The "correlation" with this "etf" is fairly consistent with the actual metal.. This past June when Gold fell 13% to the lows , DZZ appreciated by approx 28% ,or 2x the drop in the metal.

     

    I'll update as it unfolds..
    Happy Investing
    24 Jul 2013, 08:51 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Sold the DUST again for 1.34 x 200. What am I, a day trader now? lol

     

    And how can a guy who believes in gold go against it via the miners?

     

    Back to writing. Promise I won't be back...till the book is finished!

     

    Again, good luck to all!

     

    IT, you got some good people here. Replace my name in your intro with some of them. Great job in giving us a forum!
    24 Jul 2013, 09:37 AM Reply Like
  • CoinsK
    , contributor
    Comments (3479) | Send Message
     
    Looks like a good day for people in leveraged shorts today.
    24 Jul 2013, 01:32 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    I left a bit on the table, lol
    24 Jul 2013, 01:44 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @FEAR

     

    Thanks for posting it !!
    22 Jul 2013, 06:16 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    IT.
    No problem, I like to be transparent with ideas , views, etc.

     

    Would invite others with contrary opinions,, thoughts to do the same .
    22 Jul 2013, 06:20 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » ANYONE HAVE A SITE THAT DOES INCLUDE DIVIDENDS TO YOUR MOCK INVESTMENTS??

     

    Can use the help for the mock portfolios that maybe we all can use just one kind !!
    22 Jul 2013, 06:44 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1056) | Send Message
     
    FG

     

    I messed around with DZZ but I don't remember how it worked out for me because ETF is good for a short time and the right timing is needed; I like to experiment with this or that but this did not work out for me; frankly I am surprised that DZZ has not had a reverse split at this low value (this has been my experience); what I also I found out is that there is not much correlation with future markets and that's why its value keeps going down; good luck
    23 Jul 2013, 07:39 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Rin,

     

    As with most of the leveraged etf's , they should be used for a short term trade. In the short time i have tracked it the correlation to the price of Gold is decent.
    When gold dropped 13% recently in mid June to the lows , DZZ was up 28% in the same time frame. Roughly 2 X the drop..

     

    DGZ, is another vehicle i may use , no leverage and also shows a good correlation over a decent time period.

     

    U can overlay the dgz (short ) chart with the dgl (long ) and its almost an exact reverse match... 
    23 Jul 2013, 07:51 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @RIN

     

    Welcome back!! We missed you. I am glad you got my PM..
    23 Jul 2013, 08:51 PM Reply Like
  • Common Guy
    , contributor
    Comments (79) | Send Message
     
    Anyone saw MCD earnings call? Interesting comments about being "challenged" through the year.
    22 Jul 2013, 11:26 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1735) | Send Message
     
    (MCD) (LO) (MO) all lower. Starting to look like buys at these prices.
    23 Jul 2013, 12:07 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4316) | Send Message
     
    What's the difference between earnings & revenues?
    23 Jul 2013, 01:15 AM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » Curls. simple example..

     

    Revenue is money your company brought in during the year in sales. Earnings is after expenses.. EXAMPLE..So if you sold a burger for a dollar, you have a dollar of revenue. Now if your expenses are .75 cents for that burger you have .25 cents earnings!!

     

    Revenue minus Expenses equals earnings !!
    23 Jul 2013, 03:40 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4316) | Send Message
     
    @ IT

     

    Well if I'm going to get such clear explanations I'll ask my next one...

     

    What's the difference between options & futures? I know what options are. Very vague on futures, but bloomberg site lists them regularly. I had thought futures were a math calculation off of options.

     

    PS new folks need to know ()s are helpful. Symbols in brackets, alllow you to mouseover & see the company name!
    23 Jul 2013, 10:06 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1056) | Send Message
     
    Curls

     

    Options are a form of derivatives; call or put options are derived from stocks but not all stocks are optioned; all options go to a clearing house to be processed.
    Futures markets are the most liquid markets where commodities are traded and physical delivery can be asked; a lot of cash is required with a margin account; in addition, interest rates futures can be traded as well as options on stock indexes(SP/NASDAQ). The advantage of trading in future markets is that you bypass a company poor management when you trade in copper or oil.
    23 Jul 2013, 08:10 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @CURLS

     

    Had to call in the heavy artillery on that one. You want the winning lottery numbers next?
    23 Jul 2013, 08:53 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4316) | Send Message
     
    @ Rin

     

    Thank you! So they aren't on stocks, but are on physical product - commodities. That all adds a whole nother level of complexity.

     

    I've been glancing at futures to see if the market was going to have a happy feet day or not. Can't imagine now, why they'd be correlated at all (commodities aren't necessarily coorelated with stocks.). Though bloomberg's futures listings seems to be used as an indicator for the start of the day.
    24 Jul 2013, 07:43 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1056) | Send Message
     
    curls

     

    I hope my poster helped you; yes, the daily futures can give you an indication of the markets but you have to be glued to the monitor and , like anything else there are higher risks and rewards; it is up to you to find your tolerance risk; I am invested in the futures via the Rogers International Commodities Index (RICI), which covers all commodities, with an hedge fund LP based in Chicago.
    If you want relate options and future markets to a stock, lets say copper, you can look up for the long term contracts in the future market and then look for companies like (FCX) that produce copper to see how many call/put options there are; but all this takes time..just like doing homework!!
    24 Jul 2013, 11:58 AM Reply Like
  • CoinsK
    , contributor
    Comments (3479) | Send Message
     
    Rina ,how about an easy one,would you explain the difference in those "products" and leveraged shorts ? Thanks ,CK
    24 Jul 2013, 01:38 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1056) | Send Message
     
    Coins

     

    I hope to understand the question correctly in my reply; leveraged shorts are, as an example, the new ETFs that short the Dow, SP500, commodity index, and others; the leverage comes into play when the ETF is structured to 1x, 2x, or 3x of whatever is shorted; to short such indexes, the fund managers uses the future markets, puts options and shorting the index, or maybe even shorting stocks in the index; shorting is tricky and requires a lot collateral.
    I hope this helps; for my personal experience, I have used ETFs (TBT) and (DPK) successfully but timing is important
    24 Jul 2013, 08:57 PM Reply Like
  • CoinsK
    , contributor
    Comments (3479) | Send Message
     
    Sounds like a good explanation. The only thing i would like to know more about is the nuts & bolts of how a portion of your money is lost if you stay in too long in a market that goes up & down but with no direction. Anyone .please add your 2 cents.Thanks,Curt
    26 Jul 2013, 08:42 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1056) | Send Message
     
    coin

     

    With (TBT) and (DPK) I got in at the right time and made some money very fast; last year I had to sell the leveraged shorts ETFs on European markets and the NAZ (QID) but the markets kept going up (FEAR is correct on this one- I was paying more attention to bear news) at some losses (not to break the bank) and I am glad I did; what happens with 2x and 3x short leveraged ETFS and market keep going up or sideways, the ETFs NAV goes toward zero and then the fund has a reverse split; if somebody sells to cut losses within a reasonable time, it is ok but if you wait and wait prepare for severe losses; if I remember correctly (QID) was where I suffered the most loss ($1,200).
    I hope this helps
    26 Jul 2013, 07:13 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » "Senate to investigate banks' commodities activities. The report of a possible CFTC probe into Goldman Sachs (GS) and co. about their aluminum activities comes ahead of a Senate hearing today into the commodities operations of major banks such as JPMorgan (JPM) and Morgan Stanley (MS), as well as Goldman. Legislators are expected to explore whether banks should be allowed to continue to store metal, transport oil and operate mines, and possibly how prices have been affected by the companies' activities."

     

    This should be a comedy act !! Nothing will get accomplished ,,

     

    Thoughts !
    23 Jul 2013, 07:58 AM Reply Like
  • Common Guy
    , contributor
    Comments (79) | Send Message
     
    GS provides a lot of grease that maintains the political machine....
    23 Jul 2013, 08:32 AM Reply Like
  • Notrub
    , contributor
    Comments (370) | Send Message
     
    F&G,
    Looks like the oil and gas bet on (FCX) paid off. It added 105 million to earnings.

     

    http://bit.ly/139P6Xn
    23 Jul 2013, 08:39 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Not,
    Yes , and if you go back to when they announced that deal the stock was punished. I believe there is room for further revenues & earnings from the 2 companies. They pay 4.2% div on present price and just paid a $1 special div last month -- over 7.5% combined payout.
    23 Jul 2013, 09:38 AM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » 10:01 AM July Richmond Fed Mfg. Survey: -11 vs. 8 expected, 8 previous.

     

    Can someone explain this survey for me ???
    23 Jul 2013, 10:03 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    IT
    here is a link with details..

     

    http://bit.ly/18Avp38
    23 Jul 2013, 10:09 AM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @FEAR

     

    Thanks, FBN just said that the report wasn't good at all and i guess the details go out 6 months and weren't promising either.

     

    I just caught it running around the house. Stated it took some steam out of todays increase as well..

     

    I have no clue. But is it leaning towards a contraction? Just saw this !!!

     

    "More on the big Richmond Fed miss: New Orders tumbled to -15 from +9. Shipments to -15 from 11. Backlogs -24 from -1. Employees unchanged at 0. Average workweek +2 from +11. Expectations look a little better, with New Orders and Shipments both higher in July than June"
    23 Jul 2013, 10:17 AM Reply Like
  • Notrub
    , contributor
    Comments (370) | Send Message
     
    IT,
    Here is the data you decide:

     

    http://bit.ly/1bZHBtg
    23 Jul 2013, 10:23 AM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @NOTRUB

     

    Honestly , i have no clue what direction this report will take the economy !
    23 Jul 2013, 10:26 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    IT,

     

    I don't take one data point to draw any conclusions, if im not mistaken the fed philly index was pretty good recently..

     

    It would be a 'stretch" to start reading contraction into the picture.

     

    as far as the media, it was a nice data point to "fit" what is happening in the trading day..
    23 Jul 2013, 10:33 AM Reply Like
  • Common Guy
    , contributor
    Comments (79) | Send Message
     
    IT, that's a diffusion index, beware of short term swings.
    23 Jul 2013, 05:28 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @CG

     

    What is a diffusion index?

     

    Thanks

     

    BTW , You joining us in the PORTFOLIO EXERCISE ??
    23 Jul 2013, 05:48 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    IT: The first order of business is to rank data points in order of importance.

     

    The national purchasing manager surveys are more important than the regional ones. And, the surveys on services are more important than the ones on manufacturing.

     

    The U.S. economy is primarily a service economy. The last BLS report showed 114.142 million workers in the private labor force on a non-seasonally adjusted basis in June 2013. Of those 96.069 million were employed in the service sector:

     

    http://1.usa.gov/zfg7ya

     

    There are two services, ISM and Markit, that provide national numbers for U.S. manufacturing, and there will be differences in those numbers. In those two national surveys, any number above 50 indicates expansion, while numbers below 50 indicate contraction.

     

    Someone who is naturally bearish will focus on whatever national number that tends to confirm their predisposition toward looking at everything in a negative light, perpetually preferring to see the glass as half empty or full of radioactive sewage.

     

    Recently, the most negative national ISM number was its purchasing manager survey on manufacturing which recently briefly dipped below 50. While that number briefly dipped below 50, the Markit national manufacturing number remained over 50 which is of course never mentioned in a bearish article that refers to the lower ISM manufacturing number.

     

    The following links are just two examples where a naturally bearish author referenced ISM manufacturing while ignoring ISM services (many believe that kind of approach to virtually every data approach represents a balanced view, and when some one points out that the author neglected to refer to ISM services, for example, that indicates a lack of balance on their part):

     

    http://bit.ly/13ZDsAi

     

    http://bit.ly/13ag6Gp

     

    And it would similarly not be mentioned that the ISM PMI number recently went back over 50 by those who perpetually focus only on pieces of negative information and then routinely blow that information out of proportion.

     

    I am just making a factual observation here about several SA authors and a large number of folks who leave comments.

     

    ISM Site:
    PMI rose to 50.9 in June:
    http://bit.ly/ImJx2F

     

    Markit Site for Press Releases:
    http://bit.ly/1aGADYw

     

    The June 2013 Markit PMI (Purchasing Manager's Index) slipped to 51.9 from 52.3 in May, still in expansion territory:

     

    http://bit.ly/1aGADb1

     

    The ISM national service PMI numbers have remained in expansion territory as shown in this St. Louis Fed Chart:

     

    http://bit.ly/X6x1b6

     

    The recent downtrend in that index is more troubling but it is still in expansion territory.

     

    The PMI manufacturing survey that you referenced is conducted by the Richmond FED and is limited geographically to its district. Any number over zero indicates expansion while numbers below zero indicate contraction. I do not believe all districts compile this type of information for their territory.

     

    You can see several other surveys by visiting websites for other districts:

     

    Texas FED:
    http://bit.ly/1aGADYy

     

    Philadelphia FED (third district)
    http://bit.ly/1aGADYz

     

    New York Fed
    http://bit.ly/MvDZCz
    23 Jul 2013, 11:37 AM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @SOUTH

     

    Thanks for all that info. It is a lot to take in and absorb..
    23 Jul 2013, 11:41 AM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    IT: In another comment, I mentioned the importance of the "new orders" component of ISM's manufacturing survey. It is a forward indicator for one, but the real importance is as a signal of an economy emerging from a recession.

     

    I highlighted in my blog in March-May 2009, as one reason for increasing my stock allocation, that the new orders component had turned sharply up.

     

    Typically, new orders will bottom about 1 to 3 months before the end of a recession.

     

    Manufacturing will often lead the U.S. out of recession (e.g. more homes and autos being built) but fades in overall importance compared to the service economy after the initial burst in activity that may last a few years. Now new housing has been largely a no show so far and is only now starting to make meaningful contributions to GDP and employment.

     

    You can see that burst in new orders in this chart:

     

    ISM Manufacturing: New Orders Index (NAPMNOI) - FRED - St. Louis Fed

     

    http://bit.ly/1a3Zg0Z

     

    Also, look at the bursts in other recessions.

     

    The data series is available at the St. Louis Fed:

     

    http://bit.ly/13AG1du

     

    This is what I was looking at back in March 2009 for "new orders" in the ISM manufacturing survey:

     

    2008-12-01 23.2
    2009-01-01 31.8
    2009-02-01 32.8
    2009-03-01 40.3
    2009-04-01 46.5
    2009-05-01 49.0
    23 Jul 2013, 12:06 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    IT: Markit Economics, which is the ISM equivalent for Europe, reported this morning its flash PMI indexes for Europe that contained positive news.

     

    The Eurozone composite Output PMI (services and manufacturing) rose into expansion territory with a reading of 50.4 in July, up from 48.7 in June. The July number was an 18th month high. The manufacturing output PMI rose to 52.3 from 49.8 in June, which is a 25 month high.

     

    http://bit.ly/12iB6jq

     

    As I have noted, I make a concerted effort to acquire data and then make an unbiased judgment about relevant information, good or bad, which is the only approach for any serious investor interested in moving their pile up in value. Articles here at SA will frequently cherry pick only a few isolated pieces of negative data and then interpret them incorrectly and/or assign them values that far exceed their importance. This is why a ranking of materiality is important, as noted in my prior comment.

     

    In the ISM and Markit data series, I am most concerned about China's data, which is showing a mild contraction, and the decline in the ISM U.S. PMI for services which is still in expansion territory.
    24 Jul 2013, 09:10 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Which would have a negative impact on most other countries data, right southgent? Cause and effect? Just curious what you see since you concentrate on this data. TIA
    24 Jul 2013, 09:39 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    South,
    Thanks for the info,,

     

    Some reinforcement to my thoughts that Europe is slowly improving , not "unraveling" .. Far, Far, from great over there, but improving..

     

    The "China" data recently has had a negative slant lately.. However, I went thru the (UTX) earnings , noticed that their subsidiary, otis elevator reported solid 25-30% increase in business , all attributable to china.. Interesting ---- I don't think they are building elevators to nowhere.... but I may get an argument on that --- :)
    24 Jul 2013, 09:48 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    You would F&G...haha...

     

    A lot of the GDP from China is building empty structures. The 60 minutes report about the empty city had its mayor touting 13% GDP.

     

    All construction.

     

    The amount of building they are doing there is amazing. But there is a price. Like the 1 year loans that have to be renewed every 365 days.
    24 Jul 2013, 09:52 AM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    Doug: I focus on any piece of data viewed as relevant and the PMI data is just one data series.

     

    The cover story in this week's Barron's is titled "Europe's Economy Will Rebound" (subscription publication) and the author noted the improvement in the PMI data. This last release, the best one, came after that story was published:

     

    http://bit.ly/164p5gB

     

    You can see the wide array of material data by spending a few minutes each day reading the Calculated Risk blog whose author does a good job of summarizing the information and provides charts which are also helpful:

     

    http://bit.ly/KwO5iy

     

    The Eurozone economy is larger than the U.S. or China, and has been a drag on worldwide GDP including exports from China for several years. Any improvement in Europe is an important positive, even if it occurs slowly.

     

    I am more concerned about China than Europe since most of the incremental worldwide GDP growth originates from that country and other emerging markets in Asia and Latin America.

     

    China is making a potentially difficult transition to a market economy that is more dependent on consumer spending than export growth as explained in this article published by Wharton:

     

    http://bit.ly/164p5wU

     

    And in this one:

     

    http://bit.ly/164p5wX
    24 Jul 2013, 10:03 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Doug,
    glad to hear from you ;)

     

    I played "straight man" for you with my comments, since i was aware of the "empty city" report.. :)

     

    However, I'll simply call this juncture in the China story as their 'trough" , @ 7% or so GDP-- form a base over time and slowly ramp higher.

     

    On another point, dollar is headed lower to test its 200 day MA and should produce some firm footing for gold in the "short term" ..

     

    Any day that AAPL is up $18 or so is a good day !! - nice 11% or so from its recent bottom @ 390

     

    Enjoy your day !
    24 Jul 2013, 10:08 AM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    F & G: I have noticed a number of American companies reporting good results in China.

     

    Ford reported today a 47% increase in China sales during the first six months to 407,721 vehicles.

     

    Ford's results in the Asia region were very good:

     

    http://1.usa.gov/18zxXeh

     

    Ultimately, growth in China can not be dependent on building ghost cities. Their economic future depends on supplying goods and services to their own consumers, including the rapidly increasing numbers of middle class consumers. That transition will be a beneficial one for China and a wide variety of American companies who can successfully meet that kind of consumer demand.
    24 Jul 2013, 10:23 AM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    When investing my money and that of family members, I would prefer to exercise my best judgment based on a vast array of material information, acquired without any pre-existing biases or opinions. After all, it is my money, or my 90 year old mother's money who needs 24/7 caregiver service to continue living in her home, or one of the bevy of Right Brain relatives who never should manage money.

     

    If I make a decision about a political party or a politician based on incorrect and incomplete information, then there is no harm since I have only one vote and I have never made a single campaign contribution (although I have collected a wide array of political buttons over the past five decades from both sides provided I am given the button for free)

     

    Biases that are commonplace in the expression of political opinions are potentially disastrous when making investment decisions.

     

    Another piece of information came from Markit earlier today, just the kind of information that would be excluded from any consideration by the perpetual bears who only look for information that supports their pre-existing position and then will frequently misinterpret it or blow it way out of proportion (e.g. a two or three month downtrend in a data series that goes up and down is extended into the indefinite future as if nothing changes and/or irrespective of whether the dominant trend is still up)

     

    The flash index for U.S. manufacturing rose to 53.2 July from 51.9 in July. The new orders component rose to 55.1 in July from 53.4. The export orders rose to 52.3 from 46.3. Employment rose to 52.6 from 49.9. Any number over 50 indicates expansion.

     

    http://bit.ly/1aIJDfv

     

    One of the SA authors that I referenced in a preceding comment, who mentioned a downtrend in ISM's manufacturing PMI index while ignoring the then robust ISM services, wrote an article, published in February 2013, titled "Dow 14,000: Are you a Sucker"

     

    http://bit.ly/1bNoXpM

     

    All of his articles about the stock market are in the same vein.
    24 Jul 2013, 12:06 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1056) | Send Message
     
    Doug

     

    I saw some numbers that 16%-17% of our GDP consisted of real estate during the housing bubble and we know how it ended; are we better off then China? Detroit has what, 60,000 empty homes and how many Detroits are in the making across the country? the wealth effect from home is long gone....we are not better off then China...lets have the banks report their mortgage bonds on their balance sheets marked to market and we'll see what happens
    24 Jul 2013, 12:56 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    South,

     

    Putting 'things" in context and leaving emotion out of your investment strategy is one of the hardest things for most to accept and deploy.

     

    Your approach is a model for anyone new to the investment scene or for that matter old guys like myself..

     

    'Perma" bears will always cite the negatives , so I'm not sure what " their " approach is to investing...

     

    I like to take a cue from an investment manager who I follow :

     

    "It's very simple -- Keep it all in "context" --
    Optimism as a Default Setting is the only way to successfully fund a retirement over the long stretch."
    24 Jul 2013, 01:08 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Rinascimento...

     

    Exactly.
    24 Jul 2013, 01:44 PM Reply Like
  • CoinsK
    , contributor
    Comments (3479) | Send Message
     
    SG ,if you ever get up to East Tn. stop in Clinton at my shop.I have a whole tray of Political buttons. Some from back in the FDR days to Geo.Wallace to Nixon and Hubert Humphrey. Most of them I bought with coin collections ,not really for sale,just good for the conversations they spark :)
    24 Jul 2013, 01:46 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    CoinsK: I started to collect political buttons going back in the Eisenhower era. My father gave me a few going back to Hoover. I have never spent any money on them.

     

    I was totally non-political in what I picked up, with the primary criteria being that they would be given to me free and were political in nature, so I have buttons from both the Eugene McCarthy and Wallace campaigns in 1968, Clinton and Gore, Nixon, LBJ, Reagan, etc. And then I acquired some that were more expressive, such as one that shows a mushroom cloud with the slogan "all the way with LBJ" and another from the Nixon era that says something like "4 more years Dick, than 10 to 20".

     

    I have collections of stuff that cost me almost nothing to acquire, such as baseball cards from the 1950s and early 1960s.

     

    I sold in September 2011 and January 2012 all of my junk silver coins that I took out of circulation in the 1960s at their face value.

     

    I could have sold back in 1978 or so when the Hunt's were cornering the silver market at about the same price.

     

    I sold to a dealer located here in Brentwood "Nashville Coin and Currency":

     

    Snapshots of Sales:

     

    September 2011:
    1. Recent Silver and Gold Coin Sales:
    http://bit.ly/XqU0Bx

     

    January 2012 at Item # 8
    http://bit.ly/18tKuTV

     

    As I like to say, I tried to make every dollar count from the $2 per hour that my Dad paid me during my summer vacations from school:

     

    Learning the Value of a Dollar
    Snapshot of Pay Stub from 1971 ("summer vacation" after sophomore year at Tulane)
    http://bit.ly/TrX6jQ

     

    After many years I had worked myself up to that rate and had all kinds of benefits: free suntan and workout in 95+ decree heat

     

    I got a little smarter after that 1971 summer and convinced my Dad that I needed to stay in New Orleans during the summer to take some classes.
    24 Jul 2013, 02:22 PM Reply Like
  • Tack
    , contributor
    Comments (13540) | Send Message
     
    Rin:

     

    You've been faked out by the mark-to-market crowd, I hate to say.

     

    Bank holding, not held for sale, were never marked to market in all of accounting history until somebody in the accounting board got the brilliant idea that that would be a good idea in the mid-'90's. Prior to that time, it didn't mean that the value of holdings wasn't adjusted and reserves taken; it just meant that such assessments were mad eon long-standing actuarial models, which had refinements built in by long empirical experience. But, no, good old Mr. Market knew better!

     

    So, initially not much happened because there was much pressure on the mortgage markets for years, but, as the real estate mania arrived in the mid-00's, it became apparent that a huge short opportunity could arise, if somebody could figure out how to play it. The shorts needed a vehicle that was tradeable that they could decimate that would also directly reflect on the supposed values of all the non-traded bank paper, wince that really had no market from which to make any mark-to-market assessments.

     

    Voila! Goldman invents the ABX, a subprime-mortgage index, created solely, by their own later admission, so they could short subprime mortgage paper. However, they realized that the trading in any such index was so low in volume that really big bucks could not be made by only taking positions in such an index. The answer to their problem arrived when they conspired to have the ABX used as the de-facto index for all non-traded bank paper, which forced the banks to re-value their non-traded paper, not by actual performance criteria, but by this easily-manipulate index.

     

    Goldman, and a few others, realized that this would force the banks to take catastrophic write-downs on mortgage paper that were completely independent of how their paper might actually be performing. They also knew that such mark-downs would destroy their equity values, which allowed the shorts to take massive short positions in banks, which were traded in massive volumes, not the thin trades of the ABX, itself. Hence, the the scheme for complete market destruction was in place and unfolded, as planned. Mission accomplished.

     

    The final irony is that some of the very same institutions that had shorted the banks and mortgage paper into oblivion turned around and bought large positions in both, when banks, desperate to unload these balance-sheet disasters, sold off the mortgage paper for pennies on the dollar, just as the shorts had hoped. Subsequently, the investors in such paper made a huge killing, as the mortgage paper recovered all its lost value, in some cases even selling well above par, as interest rates have fallen. Naturally, similar paper that has remained on bank books has likewise recovered its "market" value, not that that ever mattered, as it wasn't for sale, anyway.

     

    Of course, many think the mark-to-market rule was suspended to "save the banks," when, in fact, it was reversed because the change from actuarial valuations to mark-to-market valuations was a misguided idea in the first place and wholly discordant with a long history of accounting procedures that were managed and audited independently and beyond the manipulation of short-term traders, as recent experience vividly demonstrated.

     

    The idea that banks, now would be hollow shells if they marked their existing paper to market is sheer fantasy. In fact, much of their paper might even rise in value versus its actuarial books if assessed by today's mortgage market. In any case, it should have never been marked to market and now isn't, anymore, as it should have remained. Our recent huge recession would have been far more manageable if mark-to-market had never been instituted in the first place.
    24 Jul 2013, 02:37 PM Reply Like
  • CoinsK
    , contributor
    Comments (3479) | Send Message
     
    I see you received. in excess of 26 X face on your 90% Silver. That's a good price to sell at ! Silver was probably @ about $40 an Oz.
    However the link you have on the Gold it states that a 1988 Gold Proof Set has 1,875 Oz. of Gold.
    Oz. of Gold. I hate to sound like I'm correcting someone but the GOLD content of those coins is as follows. 1/10 th Oz/ + 1/4 Oz. +1/2 Oz.+1 Oz. = 1.85 oz . Total per set.( currently have 3 of those 1988 sets) So I'm very curious how you arrived at the amount of 1.875. Not being contentious at all, just curious.One thing that happens with Gold Eagle sets is the AGW (Actual Gold Weight) is not as the same as the total weight and this causes some miscalculations by folks. This is not the case with American Silver Eagles They are .999 "FINE " Silver.
    From the Redbook , here's the calculation for U.S. Gold Eagle proof and uncirculated coins(Regardless of Mint) Composition .9167 Gold + 0.3 Silver and .0533 Copper on all the coins in the set X Total weight = 1.85 Oz. NET The reason they do this with Gold is because Gold it is softer than other metals.

     

    So on the one Ounce $50 Eagle Gold Coin it's total weight is 33.91 Grams X.9167 = 31.085 Grams (1 Troy Oz fine Gold)
    24 Jul 2013, 03:56 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    CoinsK: I do not know how I came up with 1.875 ounces but that was probably a typo when I wrote that post. You are correct that there is 1.85 oz in the proof set. I have corrected that number in the original post.

     

    I did just about hit the high in both gold and silver. The dealer checked the then current quote before marking up my price. I did receive less in January 2012 when I went back with more coins.

     

    I bought a few of those proof sets back in the 1980s because I liked the proof eagles more than the uncirculated coins. I bought them directly from the U.S. mint and paid some kind of premium over the spot gold price for the proof and the nice blue case (imitating Tiffany?). The cost of that 1988 proof set was $1,095 so I paid about $592.74 per ounce which probably was a good markup on the gold spot at the time.

     

    I copied my IRS Form 8949 in a blog reporting those sales as part of my 2011 tax return, the one where neither the proceeds nor the cost basis are reported to the IRS:

     

    http://bit.ly/16a54mB

     

    I would have had a huge annualized return by selling that junk silver in 1978 when the price was about the same as September 2011.
    24 Jul 2013, 04:15 PM Reply Like
  • CoinsK
    , contributor
    Comments (3479) | Send Message
     
    Sg wrote: "I would have had a huge annualized return by selling that junk silver in 1978 when the price was about the same as September 2011."
    Exactly !
    The 30 year opportunity costs is almost impossible to calculate.
    The ONE thing I have in common with the "Traders" of Stocks and Futures,Options ETF's etc. is that I must Buy AND SELL to maximize profit potential. I have the same issue with Gold Bugs as traders do with people that just accumalate. The savvy trders like the one's posting here impress me because they do the research and their due diligence .I have problems with e just buying and holding as a strategy. That's a mutual fund mentality and to my thinking is a loser every time. Still would love to see some of those Political buttons and show you some I have ,the invite stands .Here's my shop
    http://bit.ly/1dVE25k
    24 Jul 2013, 04:22 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Tack,

     

    Not the banks that have mortgages in California. I personally know of a guy who owns 5 houses in Newport Beach, CA, each of which is underwater by about half of what is owed, including borrowing. The banks won't foreclose on him and he hasn't paid a dime in mortgages in over 4 years. So if mark to market is fantasy, and the FASB approved banks not having to (even though they may have not had to before as you say, and I'd love to see documentation of this), why aren't they foreclosing on just this one individual?

     

    My answer is that's a $2 million hit on their balance sheet if they did. Same reason why so many banks delayed foreclosing or the large banks came up with excuses as to why they have to delay foreclosures.

     

    As far as your comment about banks not having to mark to market anymore being "as it should have" been, I can't disagree more. Why do banks get to do what the average Joe can't do? Why does the average Joe have to be so honest with the IRS when banks get to cheat on their balance sheets? Just curious what your reasoning is.
    Thanks...
    24 Jul 2013, 09:53 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @DOUG

     

    I might add where I live we just had a Sheriffs sale on a condo unit. The bank gave us their word that they would not foreclose on that unit for 2 years minimum.

     

    No one showed up at the sale. Our Association bought the deed for $100 bucks, we have a lien on the unit as well for non paid common charges and legal fees, and now we will rent it out for 2 years with income coming in and no payment to a bank.

     

    Once the unit is foreclosed the bank already said they will pay the lien off as well.

     

    So banks are delaying foreclosures still. I wonder why??
    24 Jul 2013, 10:19 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    IT: Some states require a judge to approve a foreclosure and there are enormous logjams in courts handling that type of issue. During the bubble years, banks were really sloppy in their paperwork and have difficultly now proving who actually owns the mortgage which just adds to the problems and the slowdown in the foreclosure process.

     

    A story in the NYT published in 2011 noted that it would take 62 years to clear the backlog in cases filed in your state at their then current pace:

     

    http://nyti.ms/ZQQErU;

     

    In states requiring court approval and where no deficiency judgment can be recovered against the buyer, the incentive is to default on the mortgage and then live rent free in your home for years.

     

    That was the subject of another NYT story and a 60 minutes program:

     

    Owners Stop Paying Mortgages, and Stop Fretting
    http://nyti.ms/TZAFRI

     

    Strategic Default: Walking Away from Mortgages
    http://cbsn.ws/ZQQEbl;segmentTitle

     

    The example that you site may be in NY foreclosure process but the end game may take years.

     

    In Tennessee we do things differently. A borrower who defaults can be required to pay the difference between the outstanding loan (plus foreclosure costs) and the value of the home on resale, and the lender initiates and concludes foreclosure outside of the court system. If you default on a mortgage in my state, you will be out on the street within three months and would owe the lender that deficiency judgment. Strategic defaults by those able to pay the mortgage are consequently not an option here.
    24 Jul 2013, 10:31 PM Reply Like
  • Tack
    , contributor
    Comments (13540) | Send Message
     
    DE:

     

    Since when, if you hold offer a mortgage to a purchaser, report the paper "value" of that mortgage to the IRS? You don't. You report the income you earn from that mortgage, as do the banks. The "value" of your mortgage is irrelevant unless you plan to sell it to somebody else. Likewise, that's why debt which was not held for sale was not valued by a market value, as it had no market. The market value created by ABX and like indices was totally phony.

     

    Bank debt paper, prior to the mark-to-market folly, was always valued on internal books based on long-established formulas which were derived from delinquency and default statistics. This was pure accounting, not influenced by market emotions or manipulation.

     

    By the way, banks have been increasingly buying their own properties are foreclosures, as they, too, see the markets rising and don't want to allow properties to be sold, if they consider the prices inadequate. This is very prevalent in Florida, now. I spend much time between homes in Florida and family properties in Northern California. I just returned from two weeks in California yesterday, and I can attest that the market in Santa Clara and Monterey Counties is very healthy, presently.
    24 Jul 2013, 10:47 PM Reply Like
  • Tack
    , contributor
    Comments (13540) | Send Message
     
    I should add that banks offloaded huge amounts of debt paper to third parties during and coming out of the crisis, as well as sales of same to the Government. And, much of losses were reserved against during this period.

     

    Now, banks are reversing their reserves, as mortgage debt has been appreciating briskly. The whole notion that banks are sitting on ruinous amounts of bad paper, now, is a fiction, just as is the idea that the "shadow inventory," talked about for five years, was or is going to bury the housing market.

     

    The actions of the Fed have allowed both of these things to be worked off gradually, rather than permitting the destruction of the financial system in one climactic event, as would have occurred if anyone had followed the misguided advice of some that the system should have been allowed to implode. Now, that it hasn't and won't, some folks still can't accept that reality and continue to look for hobgoblins.
    24 Jul 2013, 10:57 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Folks,

     

    From what i have "heard" , the delays in foreclosure discussed here is in large part the 'paperwork" issue that "South " has mentioned.. In states that require the court system to be involved, anyone that "challenges" the bank in the foreclosure proceeding questioning the "chain of title" has a very good chance of proving their case.

     

    During the mortgage debacle days , these loans were broken apart, repackaged, sold, over & over , so in a lot of cases the chain of title was broken , now is non existent , therefore can't be proven. The owner of that paper does not have the legal right to foreclose if they can't prove title.

     

    I know someone who has had 3 foreclosure case filed against him, has fought all three, all three were dismissed by the bank that brought the suit. Also of note all three were initiated by a different bank, as the mortgage had been sold & reassigned over & over in this time frame !! He has not paid a mortgage payment since may 2009 ... True story ... Oh , after the last case was dismissed the loan was sold to a bank in Delaware..

     

    He believes at some point the existing holder of the loan will have to negotiate a settlement. Of course after they have written down a very large part of their losses..
    25 Jul 2013, 09:44 AM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    F & G: I believe the record delay is held by a now elderly woman in Florida, who represented herself in a Florida case. As of December 2010, the date of a WSJ story about her, she has been living in her house since October 1985 without making a mortgage payment:

     

    http://on.wsj.com/15hX5VI

     

    She finally lost her house in August 2011 owing $230,770 in principal and interest payments on a house that her husband had bought for $63,801 in 1978.

     

    http://on.wsj.com/15hX5VL

     

    In states where a judge has to approve the foreclosure, there is not any question that the borrower signed a note and has failed to make the mortgage payment. The issue is, as you say, can the lender prove ownership of the mortgage.
    25 Jul 2013, 09:58 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Tack,

     

    Semantics aside from what an individual can and can't do, and I wasn't referring to mortgages, but the scrutiny the IRS puts on EVERYONE while the banks don't have to abide by set rules as the FASB changes the rules when convenient. Your entire argument, as well as the Fed's, is based upon the property values rising. What if they don't? Banks have simply transferred their lousy reserves to the biggest bank of all, the Fed.

     

    How will the Fed unload all of this and to whom?

     

    The banks meanwhile get good money from the Fed, printed out of thin air, to invest in the stock market, real estate (creating future bubbles) or what have you. Many still play the derivatives game of course, where today the sub-investment grade derivatives are more than at the height of the 2008 financial crisis, because they know the Fed always has their back. That or the taxpayers (TARP).

     

    I don't see this game the Fed and banks are playing ending well, and I see things imploding first in Europe. "Eventually," the Fed has to manage everything perfectly to come out ahead. They don't have a good track record here, but the Keynesian faithful sure believe they do.

     

    Future higher interest rates will be the end game for that strategy. That's why Bernanke, despite "talking" tapering recently, had 3 of his Fed board boys coming out quickly saying we're not tapering. They simply can't.
    25 Jul 2013, 11:15 AM Reply Like
  • Tack
    , contributor
    Comments (13540) | Send Message
     
    DE:

     

    I have no idea what the IRS has to do with all this, anyway. We're talking about accounting and the ramifications this has for book values and market behavior. Whether things are taxable or not is of little relevance.

     

    Regarding FASB, as I stated, mark-to-market was a new-fangled experiment concocted in the 1990's, after eons of successful bank accounting models based on many decades of actuarial studies. It was a mistake -- literally a catastrophic one -- to turn the valuation of non-traded debt paper, with no identifiable market metrics or volume, to the marketplace, where it could and was easily manipulated and caused a massive crisis. That the FASB reversed itself and went back to tried and true methods wasn't some capricious move to bail out banks; it was a sensible reversal to return to policies that had worked for decades and were not subject to market manipulation.

     

    "How will the Fed unload all of this and to whom? "

     

    The Fed doesn't have to unload anything to anybody. They can hold assets forever or extinguish them.

     

    You see the Fed's creation of new money (credit) and absorption of bad debts as some unsustainable scheme, but, in fact, that's exactly what central banks are supposed to do to recapitalize banks. The Fed is not subject to the balance-sheet rules of private individuals and corporations because it has unlimited monetary-creation powers, so it never has to balance its books, and any "losses" it takes are similarly merely accounting entries, in the end. It's powers are only limited by the ultimate reaction of the marketplace, e.g., if they provide too much or too little credit.

     

    This is a fundamental precept of a fiat-monetary system, rather than one based on specie, like gold. The role of the Fed (and should be the ECB, too) is to replace lost capital, not merely account for it. And, that's exactly what TARP and QE did. Money is merely a convenient medium to facilitate exchanges, not some valuable commodity to be hoarded or cried over if it's destroyed. It can be created at will to provide the necessary liquidity for commerce. That's the Fed's job.

     

    I must digress for a second, to reiterate one of my favorite examples of the insanity of any monetary system that does not replace lost money, "printing out of thin air," as you suggest. In 1857, in a gold-standard world, the S.S. Central America sank off the coast of South Carolina, losing a huge hoard of gold coins and bullion being shipped from San Francisco. Guess what happened? There was an immediate global deflationary recession because the money was "lost," literally. Since all money had to be backed by gold, the sinking of the ship was a real loss, not a symbolic one. Now, what can be more absurd than having world commerce shut down because a ship sinks with some shiny metal on it? The amount of money in circulation actually decreased because it could not be "printed out of thin air," so commerce suffered for absolutely no sane reason. This is illustrative as to why money needs to be flexible and central banks must be free to respond to real conditions, not shackled by false gods.

     

    Lastly, interest rates will rise only because of increased economic performance and rising demand. QE will be tapered because private credit formation will start to expand to the extent that inflationary pressures arise, and the Fed will halt QE. They'll follow this with rises in the bank's borrowing rates, if necessary.

     

    Meanwhile, and as always, the economy and markets keep functioning based on an assessment of the actual quantity of money (credit) in circulation and the costs of its use.
    25 Jul 2013, 11:57 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Doug,
    Your comment,

     

    "and I see things imploding first in Europe."

     

    Europe is improving ,, albeit slowly.. I believe the "death" of the euro and the "eurozone", which i have heard since the crisis is incorrect. Remember the cries of the euro going to "par" ?

     

    Anyone positioning themselves and following that investment strategy will be severely disappointed just as they have been with their predictions of the U S equity markets.. The market looks for change - The same crowd that got it wrong with U S stocks have it wrong on the global front also..

     

    I believe when you came back from your recent symposium you mentioned Jim rogers and his stance on the Euro .
    Dont think that was a bearish stance.. Food for thought ..
    25 Jul 2013, 12:10 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Tack,

     

    I don't profess a gold standard, so not sure what point you are making there. I do profess a "sound" monetary system and we have nothing close to it in America with an out of control Congress and Fed (who you somehow believe is in control). Some how their "mandates" keep changing to suit their past mistakes, and somehow the gold was confiscated in 1933 and somehow Nixon closed the gold window in 1971 and somehow, TARP looted the tax payers to help out the banks who somehow were given freedom with the elimination of Glass–Steagall, and somehow the FASB allows them at just the right time to not mark to market assets and somehow, in the future, some other rule will be twisted to benefit all of us.

     

    Meanwhile, the purchasing power of Federal Reserve Notes dwindles, which has nothing to do with gold, but with the fact that our government and the Fed can spend unlimited amounts to pay for things and you and others think there are no (underlying) consequences to this.

     

    It's an experiment that has lasted how many years? And how much debt have we accumulated? And how much is owed for future promises, and the additional promises of Obamacare? And how is the infrastructure going to get paid for? The unfunded pension plans? Detroit? Why just print more money!

     

    The actual quantity of money (credit and M2) is over 360 trillion. The unwinding of this is what is the issue. The Fed can't even make a dent with the $85 billion a month except for their favored sons.

     

    You said, "It (money) can be created at will to provide the necessary liquidity for commerce. That's the Fed's job."

     

    The Fed's job is; "The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates."

     

    How we doing on employment? How we doing on production? Some on here think a couple positive blips up in the manufacturing indicators means the worst is over. With a stock market at new highs, many believe this to be the case too (especially the one's who sell stocks or cheer-lead them like those on CNBC).

     

    Meanwhile, you got people like Nancy Pelosi submitting bills before Congress that say, "We won't get paid unless we increase the National Debt limit." Are you kidding me? They shouldn't get paid unless they reduce the debt!

     

    100% Debt to GDP becomes 350% depending on who you listen to. But hey, let's go interfere in Syria because we can pay for things with money from a printing press! Iran needs bombing too! And this is with the Nobel Peace prize winning President.

     

    If people can't see that things aren't what they seem, then enjoy your utopia while it lasts. But it can't go on for much longer. Sooner or later, the chickens come home to roost. And when they do, I hoe you are positioned accordingly.

     

    But I am dollar bullish for now, as I mentioned. And you are right about the Fed not having to unload anything to anybody. No one would want it at that point in time anyway, and they didn't pay anything for it. Nice gig if you can get it. Morgan wasn't a fool.

     

    25 Jul 2013, 01:27 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    F&G, they will implode through the banking sector. Some of Europe has rebounded. Nothing goes straight down just like gold doesn't go straight up. But the interest rate situation shows they are not back to where they were, and austerity isn't really occurring in places like Spain for example. Unsustainable is a word I would use to describe their situation. The ECB will have to step in more as the IMF can't do much more.

     

    Jim Rogers is pro Singapore and that's why he lives there. He likes sugar as far as investments go.

     

    Here's what he said about the Euro (Euro Won't Survive as Currency War Rages) - I'd say that's pretty bearish; http://bit.ly/1bRyf43
    25 Jul 2013, 01:31 PM Reply Like
  • Tack
    , contributor
    Comments (13540) | Send Message
     
    DE:

     

    "...TARP looted the tax payers to help out the banks ..."

     

    You are going to have to explain that one to me in detail. Nice populist jargon, but devoid of factual reality.

     

    TARP didn't loot the taxpayers a single dime. Nobody paid taxes to raise TARP funds. The Fed created them, as we've discussed. Even better, the Government made a profit on TARP, so the taxpayers should be rejoicing, not whining. Apparently, instead, some of the uninformed would rather have had the entire financial system implode because that would have been "fair." Those same folks would be the first ones on the street with new placards, asking where their money, homes and jobs went. Thankfully, Bernanke wasn't a populist.

     

    "... the purchasing power of Federal Reserve Notes dwindles"

     

    The power of all fiat currencies "dwindles." that's what it's designed to do, in fact, as it's not designed to be a long-term store of value, but merely a temporary convenience, as a medium of exchange. It's designed that way to encourage people to use their money to do something constructive, i.e., invest it, spend it, etc., rather than burying it in a mattress somewhere and thinking it will be holding its value. Value in society is created by demand and satisfying demand, not by hoarding money, be it paper, gold or blinking digits.

     

    Problems that impair faster growth of the economy have almost nothing to do with the fed and everything to do with an administration that is anti-business, anti-capitalism and wants to saddle businesses and individuals with higher taxes and endless mandates. This is where the problems lie. Even so, the world will keep spinning because the needs and wants of people are inexorable, and corporations meets those needs.

     

    It's fashionable to say it's all different now, and the apocalypse looms, but people who indulge themselves in this kind of thinking sabotage themselves financially and some actually become bitter because things don't collapse, as they've predicted.

     

    Betting on doom is a game for losers.
    25 Jul 2013, 01:48 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    "If people can't see that things aren't what they seem, then enjoy your utopia while it lasts. But it can't go on for much longer. Sooner or later, the chickens come home to roost."

     

    Doug,

     

    Shhhh.
    The mantra now is hear no evil, see no evil, speak no evil.
    25 Jul 2013, 02:00 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Doug,

     

    Sorry, not buying what some are trying to sell.. Believe they were wrong before - (euro/eurozone) , "They "are both still here.. ..

     

    The quote of "these things take time" has been sounded since 2010... So if i bought that as an investment theme then, where would i be ? I would have missed the market (up approx 40% - Ouch ) and let's say i went to Cash & some Gold , depending when u bought in 2010 Gold is either flat or up 4-5% ?? My cash ?? didn't really appreciate too much ..

     

    Ii find it amazing and amusing why someone would believe now,, Simply amazing....

     

    I get chills when i think as to where i would be if i put clients money into that investment thesis.. So now those that believe that "story" are telling me to do that now ! A theme that hasnt worked but this time is different it will work now ?? 

     

    Finally,, if anyone really believes that is the way to go , I invite them to post when they short the euro, short the eurozone banks, short the euro exchanges and post their positions on Gold & PM related investments.. Perhaps i 'll take notice and consider that investment them then.
    25 Jul 2013, 02:40 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Tampat ,
    As i stated in my comment to Doug,

     

    i invite all to please post their positions on these currencies, stocks & markets that are about ready to implode...

     

    Happy investing -- back to Utopia ,
    25 Jul 2013, 02:49 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Wow Tack, Perhaps I just make this stuff up.

     

    Secrets and Lies of the Bailout

     

    Who received TARP funds?

     

    http://nyti.ms/1bRNtWR

     

    FDIC's 'Problem' List Populated by Tarp Banks

     

    http://bit.ly/1bRNtWU

     

    TARP Audit: Housing Recipients Re-Defaulting in Alarming Numbers

     

    http://bit.ly/1bRNtWX

     

    All I have time for now. I see this is going nowhere rather quickly, but appreciate your optimism.

     

    BTW, no one is "betting" on doom, or talking about the "apocalypse," which I did not. It's not just economics that's involved.
    25 Jul 2013, 02:50 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    F&G, It's easy to pick and choose price dates and make oneself look good. Nothing "amazing" about it.

     

    I made a call to trade gold in Euro's that was up 30% during the last fall, and told people to get out of the trade. I haven't made a similar call to trade gold in Euro's yet, but might. BTW, that trade was over a period of just 6 months. http://bit.ly/1bRQIh5

     

    I did all the Yen lower too, but was a little early.

     

    And as bullish as I am on gold, I have cautioned investors to DCA into their allocation. Many of the "1%" who own gold are positioned well. Others still are as my phone hasn't stopped ringing.

     

    What would happen if the psychology changed to just 2% invested in gold?

     

    What would change that psychology?

     

    Since my call of the bottom in gold and silver, we have had a nice ride up. I'm still doing ok with my call of a short term top too.

     

    I have nothing to be afraid of with my long term thinking, but glad you are open to "perhaps" taking notice and considering an investment when appropriate. As far as the stock market goes, I don't chase.
    25 Jul 2013, 03:02 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Doug,

     

    That's fine ,unfortunately you missed the point,,

     

    let the SA community know when you go short the euro, eurozone banks, euro markets , some would like to have an idea when they are about to implode... & it sure would add a hint of credibility to "that" investment theme.... But wait, there is another problem ,,Of course then it would have to happen.....
    25 Jul 2013, 03:14 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    Doug: The GAO report did note that 534 out of the 707 institutions receiving TARP funds had repaid the Treasury. For those institutions, the treasury received about $222 billion after paying out $205 billion.

     

    http://1.usa.gov/14aSQY1

     

    Without question, the 173 institutions that have yet to pay back TARP are less financially sound than those who have paid back the government.

     

    The largest of those 173 banking institutions, Synovus Financial, is about to pay back the government almost $1B as noted in this article:

     

    http://bit.ly/14aSQY3

     

    For those that have not yet paid back the government, the dividend rate on the cumulative preferred stock issued to the government in exchange for the TARP funds will increase to 9% from 5% later this year (5 years after the agreements were signed).

     

    The treasury also received warrants in addition to cumulative preferred stock and has been making money selling those warrants back to the banks or in public offerings. The pure profit on those transactions is close to $10 billion.

     

    For the Capital Purchase Program, the total amount invested by the Treasury in preferred stock was $204.6B. A list of the recipients, plus the institutions that have and have not redeemed the government's preferred stock, can be found at Pro Publica

     

    Capital Purchase Program | Eye on the Bailout | ProPublica
    http://bit.ly/14N1jXE

     

    I am familiar with several of the larger institutions that have not yet paid back the money. Eventually, I expect that the government will just about break even from the CPP program.
    25 Jul 2013, 03:25 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    F&G,
    I have no idea why you would single me out to repeat what you wrote to Doug in the post above since I can read just fine and dont need you to point out specific parts of your posts to me that you write to someone else.

     

    Nor do I have any idea what it has to do with what ones holdings are, nor do I care, so go back to your utopia and keep me out of your posts to others.
    25 Jul 2013, 03:29 PM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    I have a question, rather basic i suppose but valid in my opinion. Once we reach 2016 we will be upon a new presidential election. Thankfully, Obama will be out of office so let's say for a moment that the 8 year debacle of Obama has convinced enough voters that it just might be a better idea to vote in a Republican.
    With the healthcare situation a mess already and certainly more so by 2016, with an over abundance of printed dollars and an economy still probably far from recovery, what can the newly elected president possibly due in four short years to undo the complete mess now being mounted by our completely inefficient and clueless leader?
    Can the new president simply walk in and say, "ok we all know what a FU our last President was, so let me start undoing the damage done... first let's get rid of Obamacare and so on and so on. Can that actually occur or is the Obama recovery something that may take 3,4 5 terms??? ...or can it realistically be undone/fixed in any period of time?
    25 Jul 2013, 03:46 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Tampat,

     

    I surely will do that ... Only bulls state their positions here for all to see perhaps learn and criticize , -- doomers , bears can just talk a good game ??

     

    Utopia is doing just fine,

     

    But i heard Europe may implode .....
    25 Jul 2013, 03:47 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    FG,

     

    - You have no idea what companies I am invested in.
    - I didnt see the memo that said one needed to post their holdings in order to participate in this forum.
    - There are a lot of others who have posted here who don't post their holdings.
    - Singling me out for your digs is real classy, eh.
    - Maybe you can check your ego at the door in the future.
    25 Jul 2013, 04:15 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    I thought that I would add a clarification to my comment about the government most likely breaking even from the CPP part of TARP.

     

    As noted in the GAO report, the government had already received $222 billion as of 3/31/13, more since that time, after shelling out a total of $204.6B. Almost another billion is about to be received from SNV and a few other banks have repaid the government since 3/31/13, and there would have been preferred dividend payments too.

     

    In the sense of having already received more than it shelled out in the CPP program, the government is ahead. The $222B received by the government through 3/31/13 includes the proceeds from the redemptions of the government's cumulative preferred stock purchased with the TARP funds, the preferred stock dividends, and the profits from the stock warrants sold to date.

     

    I am adjusting the $205B number up by the average cost of treasury borrowings during that time frame, which has been abnormally low.

     

    For purposes of that analysis, I am assuming that the government borrowed the entire $205B to fund the CPP program.

     

    The cost of borrowed funds to the government is significantly below the 5% preferred stock dividend paid to the government by the banks. So the government made a profit on that spread as well as the pure profit from selling the stock warrants.

     

    The government will lose several billion from the banks who have already bankrupted or will bankrupt before paying back TARP.

     

    I was saying in my previous comment in a shorthand way that the government will just about break-even in the final tally for the CPP program after adding the government's borrowing cost to the $205B used to fund the CPP. I would estimate that the government will most likely receive a profit rather than a loss.
    25 Jul 2013, 04:21 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Tampat,

     

    no problem.

     

    Happy investing ..
    25 Jul 2013, 04:22 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    F&G, it wasn't clear to me what you were saying, hence the reply of how I have done so far with my calls on the Euro. I don't write for Seeking Alpha any longer and just post a few comments now and then on various articles to keep the Keynes loving economists on their toes, which I do quite well.

     

    As far as it happening (the Euro implosion) it's simple math for me. The ECB is not the Fed. Individual states or cities can go belly up and the Fed could care less. Individual countries in the Eurozone screw it up for everyone else. The ECB has to play favorites (like the IMF being so generous to make debt slaves out of Greece, haha) at the expense of the stronger countries. Spain is in deep trouble whether you agree or not. Just look at what they are trying to do: http://on.ft.com/18FG3FT Sound familiar Tack? and that's just Spain.
    25 Jul 2013, 05:14 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    South, yes, we get back 97% of our investment, at least on paper, with no interest after 7 years.

     

    Can I get that deal? That's the point I was trying to make to Tack, not side tracking into the IRS etc.

     

    Just that "we" don't get that so why should banks? Only the big banks mark to fantasy their assets so they can "get away" with not having the FDIC penalize them for not being capitalized to the minimums requirements. All the while the Fed does all they can (QE) to help them get back to profitability. And who just meets with the Fed the most? It sure as hell isn't those who want reform; http://bit.ly/18FGWOP

     

    Deja Vu anyone? But this time it won't be different, right?

     

    If there was a failure in the system, it would have been weeded out and we would have a higher stock market I could believe in, based on "real" values, not on propped up banking investments of funds handed to them by the Fed.

     

    The top corporations are over $800 million in debt. They're not sitting on cash, but the 10 year average of P/E ratios are close to the highest they have ever been. Anyone here read Ed Easterling's "Unexpected Returns?' Does history repeat?

     

    Thanks for the info South. I like all the data. It's data that, as you have pointed out, can be viewed with an intent in mind, but at least I try and point people to data rather than speculate (mostly in my articles, but in my replies, like the one to Tack, too).

     

    I just don't have that much time, but am pushing these guys to see what I might be missing and so far I like the back and forth. I have to push in order to get.
    25 Jul 2013, 05:26 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Tampat, I didn't see F&G singling you out, but might have missed it. I do like the back and forth. I posted my calls in the past for him, with links. I won't post anything else here on what I think as I really don't like SA editors. They are a bunch of biased foreigners.
    25 Jul 2013, 05:29 PM Reply Like
  • Tack
    , contributor
    Comments (13540) | Send Message
     
    DE:

     

    Since I am referenced, please excuse me for chiming in again, but I'd like to add a couple more comments, fwiw:

     

    "Just that "we" don't get that so why should banks? Only the big banks mark to fantasy their assets so they can "get away" with not having the FDIC penalize them for not being capitalized to the minimums requirements. All the while the Fed does all they can (QE) to help them get back to profitability. ..."

     

    I read the foregoing --similar to myriad posts of others over the last few years -- and I shake my head in wonderment, trying to fathom what the critics would have had the Fed do instead. It would have been preferable to have a devastating Great-Depression-like collapse of the financial system and economy?

     

    This constant refrain that "everyman" has been robbed to support the wealthy rings totally hollow when one understands the consequences of the type of depression that we just avoided. In such depressions, it's not the hated wealthy who suffer; it's the exact folks the critics think have been jobbed. They're the ones that lose their jobs, homes and all other assets to bankruptcy, while the rich laugh all the way to the proverbial banks, scarfing up those assets for pennies on the dollar. No, the average Joe is far better that the banks were saved, even at the expense of low interest rates on their savings and some inflation, even if under-reported.

     

    "The top corporations are over $800 million in debt. They're not sitting on cash, ..."

     

    Corporations have issued lots of debt because it's been far more profitable to issue debt at historic low rates than to issue undervalued equity. Pretty simple decision. And, contrary to your assertion, they are sitting on record cash balances, much funded by that cheap debt.

     

    Furthermore, consumer debt is at a 30-year low versus GDP, and the banks and credit-card companies are reporting the lowest delinquency rates in recorded history. This was all made possible by Bernanke's decision to support the banks, financial system and, thereby, the economy.

     

    I cannot prove it, but I suspect much of the negativity comes from those who misunderstood the consequences of Bernanke's policies and made the wrong bets on a pessimistic future. I've been around for many decades, now, and pessimism usually leads to bitter results.
    25 Jul 2013, 05:46 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Doug,

     

    The demise of the eurozone and its implosion has been sounded since 2010.

     

    I didnt believe the 'story" then.

     

    IF i did, then i showed by my example, of how one "would" have fared IF they did.
    (so i didn't cherry pick anything)

     

    So I'm not buying that "story' , I decided on a different investment strategy - fortunate for me it has paid off.

     

    Why should i buy into this story now...Isn't it evident its the same folks that were wrong who are now saying it again,, (not saying you are one of them but if the shoe fits .....)

     

    If its not Greece , its Spain, lets not forget how we were going to see bank runs across Europe because of Cyprus , if not Spain, throw in Italy, lets revisit the Fed, the Banks, tapering . Worries , Worries, Worries..

     

    Lions , tigers , bears ,Oh My .......

     

    So many have their recipes for disasters, they just have to be right don't they ? --- yes I know it takes time ----there is no other way to describe this story -- it's amusing .. But its necessary , beacuse in a convoluted way it's one of many factors that supports the Secular Bull theory .. (Things are so bad , this cant be happening, can it ?, it can't be happening , market can't go up 20+ % YTD with all of this ? - sound familiar ?)

     

    I tend to go with what's working----- until it isn't ..

     

    Then there will be plenty of time to play defense and employ risk management with the equity markets when the time comes..

     

    it wasn't time to do that in 2010 , when this was sounded --and it isn't now... when its being replayed ... 
    25 Jul 2013, 05:50 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Tack, appreciate the reply. How is it that those who take the side of the Fed digging us deeper into debt think that if they didn't dig us deeper into debt, we would have went to hell in a hand basket? The answer is, we wouldn't have. There would have been pain for a few of the Fed's favored sons, but the one's who screwed up would have been weeded from the system and we wouldn't have the trillions of debt we are now saddled with. GM would have been taken over by someone who could run it better without the UAW. AIG would have collapsed like Lehman did, etc. etc.

     

    We didn't avoid a depression. We are still the leading economic system in the world. This doesn't disappear overnight. But now we have more and more debt and destruction that now seems to be the "status quo." Do you disagree with that?

     

    You said, "contrary to your assertion, they are sitting on record cash balances, much funded by that cheap debt." I didn't say they are sitting on record cash balances. I said the top 50 companies are hundreds of millions in debt on average (exceptions of course). Sure, the interest rates are low, and if they leveraged well, they may do better because of the debt. Depends on the length of the loans. I'll research that more.

     

    Consumer debt at a 30 year low is no surprise. Unlike our government, they couldn't go out and get anymore credit cards as banks tightened up and those that couldn't pay declared bankruptcy and wiped out the debt, hence the books look better for the banks.

     

    As far as being pessimistic, which you obviously read in my replies, I am on certain things that you seem to believe are just fine. That's the difference. I am not pessimistic on Americans. They are the ones who have lowered their debt.

     

    Cheers!
    25 Jul 2013, 05:55 PM Reply Like
  • Tack
    , contributor
    Comments (13540) | Send Message
     
    DE:

     

    "But now we have more and more debt and destruction that now seems to be the "status quo." Do you disagree with that? "

     

    No, we don't have more "destruction," whatever that is. And, the debt issue needs to be understood from the perspective of where the debt is and how it's paid for. It's far preferable to have the Government in higher debt than to have the private sector maxxed out. That's because sovereign debt of a currency issuer cannot default, unlike the private sector. I am not advocating runaway public spending, just that when debt is moved the the public books, it's actually safer for all involved. It does not appear that the rest of the world feels that the U.S. cannot manage its debts, as money continues to flow here in prodigious quantities, driving up the dollar.

     

    "Unlike our government, they couldn't go out and get anymore credit cards as banks tightened up and those that couldn't pay declared bankruptcy and wiped out the debt, hence the books look better for the banks. "

     

    I can assure you that if the financial system had collapsed, the number of people in the position you lament would have been orders of magnitude higher. The job of the fed was to save the financial and economic system, not worry about the fate of particular individuals. If that doesn't sound sufficiently "sensitive," it's not meant to be. Most of the people who were overextended on borrowing, or flipping houses, or HELOC'd to death made their own beds. People who were prudent survived, as always.

     

    I have seen so many people make bad investment decisions because they get derailed by populism and media sentimentality, since the media spend all their waking hours talking about failure, never success. It's always about the guy who lost his job, his home, his wife, whatever, and that starts to be translated into the norm for some people.

     

    The economy is driven by the vast quantity of people with jobs, with wealth, and with needs and wants, and not by the unfortunates at the margin. That's why changes in the unemployment rate are mostly meaningless. It's the changes in behavior of the majority that count, not what the disenfranchised can or cannot do.

     

    Investors must remain dispassionate and apart from populism, politics and media histrionics. Failure to do so is usually very costly.
    25 Jul 2013, 06:15 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @FEAR

     

    Serious question here. If I recall correctly when BB stated the tapering might start we had about a 7% correction. I believe you stated that you were busy with your clients and their concerns.

     

    Now didn't you state that most of the bond money was now sitting in cash and waiting to enter the stock market?

     

    If I got my facts straight then why weren't you busy with people BUYING with the last 7% correction rather answering to their complaints and CRYING?

     

    It seems some here are under the impression that people are getting trigger happy to enter the market with their idle cash while I just think the opposite. People will run out of this market at the first site of a correction happening.

     

    Do you have any links to support your thesis that people are looking to join the markets? Reason I ask is all I see are polls showing people just don't trust the markets one bit , and have no interest to add to it with sold bond funds..

     

    Thanks!
    25 Jul 2013, 06:43 PM Reply Like
  • Tack
    , contributor
    Comments (13540) | Send Message
     
    IT:

     

    In case you didn't notice, since the QE mini-panic, we're now at new all-time highs.
    25 Jul 2013, 07:03 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » TACK

     

    Did I ask you? FEAR posted a few comments at that time and I am asking for clarification.

     

    Do you really need to be arrogant all the time? Chill out pal.

     

    "In case you didn't notice" Really, do you need to post responses like that? If you do then I suggest you just don't post anything.

     

    I believe FEAR is a big boy and can explain his posting so that I can learn. I can do without your annoying arrogance. If it persist you won't.

     

    Got it ??
    25 Jul 2013, 07:19 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    IT,
    Let me see if I can respond without losing your train of thought (Or mine - LOL)

     

    Yes when we had that 7% correction , i had many that were "concerned" . Many who have been in market are "spoiled " during this run and any pullback "seemed" ugly. Normal client reaction.

     

    Agreed that from what i have seen most of the "bond" money went into cash.

     

    Why wasn't i busy buying during the last correction ?
    simple - I thought it had more to go.. I was wrong , it was shallow to me (percentage wise) , yes clients were concerned , but i didn't have them selling anything... and honestly in retrospect, i did miss some things I could have bought .. (add more LVS) & (JPM) come to mind .

     

    Now if i can answer the trigger happy part.

     

    I don't see the average person asking to get into market here. I do see a number of Money managers that are sitting here with money , maybe some of it from bonds , or maybe they have done as i did, raise cash in accounts to put back to work when we get a deeper correction .

     

    Can't speak for all, but I wont be selling or running away in the face of another correction. I have already raised cash by taking profits in most accounts and will look to put some of that back to work if we do go down from here. I don't have much new money from new accounts., so that is my guide to indicate the masses are not lined up to get in , so we agree , majority don't believe , majority don't trust equity markets.

     

    My unscientific survey includes friends , colleagues and clients,

     

    When the phones start ringing to invest or when a client with 250k sitting in cash for 4 years decides he wants in , I'll take notice.. That isn't happening now,, which is why after the correction scares the hell out of people again , assuming corp earnings keep improving , the S & P will go higher.
    25 Jul 2013, 07:25 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @FEAR

     

    Thanks for the response. You are always courteous and I appreciate it. As you know I get PM'S from those who lurk but for some reason don't feel comfortable posting yet.

     

    So I was as curious as a few PM'S as to why you weren't adding since you are bullish on the markets. Expecting more of a drop, as you have posted, clearly answered the question posed to YOU !!

     

    THANKS for taking the time to explain.

     

    Now I will add another question then. Have you changed your mind on a correction or do you still think we might still see a 10% drop?

     

    TACK, this is for FEAR...
    25 Jul 2013, 07:37 PM Reply Like
  • CoinsK
    , contributor
    Comments (3479) | Send Message
     
    All time highs means nothing when you have all your retirement money tied up in a government controlled plan. It can lead to record drops every 7 years ,just like locusts and secadas .
    25 Jul 2013, 07:40 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Tack,

     

    "No, we don't have more "destruction," whatever that is."

     

    Have you seen the Fed's balance sheet? Did you not read what I posted about what's going on in Europe? Do you believe that there is no connection between what occurs in Europe and the Fed? If so, then why does the Fed loan the ECB money? Why don't they print their own?

     

    "That's because sovereign debt of a currency issuer cannot default, unlike the private sector."

     

    Not true at all. History shows that all paper currencies have failed. Our current experiment is just 42 years old (without a relationship to gold). How is it you have so much faith in it and the Fed? Are you paid to write for SA? I do know these people exist. You're not the same guy who was hooked up with a guy named Waxie are you?

     

    "I can assure you that if the financial system had collapsed, the number of people in the position you lament would have been orders of magnitude higher."

     

    No you can't.

     

    "ince the media spend all their waking hours talking about failure, never success."

     

    Really? You ever watch CNBC?

     

    "The economy is driven by the vast quantity of people with jobs, with wealth, and with needs and wants, and not by the unfortunates at the margin. That's why changes in the unemployment rate are mostly meaningless. It's the changes in behavior of the majority that count, not what the disenfranchised can or cannot do."

     

    So you are an elitist. Got it.

     

    The end.
    25 Jul 2013, 08:32 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1056) | Send Message
     
    Tack

     

    Welcome back; thank you for your reply and dissertation on mark to market; I was not aware of its history and I became only related to the FASB when it happened.
    With regard of the mortgages bonds story, I don't know if us, the people, will ever know the truth what the gov't/Fed did for the banks; an estimated $16 Tr was channeled through the back doors of AIG and US banks to foreign banks and entities secretly.
    During the S&L crises with real estate, the gov't stepped in to shut down S&L, restructure, and foreclose on homes and the housing market was back in a few years; this is not the case presently.
    Lastly, the GSE like Freddie Mac and Fannie Mae are like black boxes with a suspect accounting above auditing; nobody knows what is going on there. I don't think this housing mess is going to ever be cleaned up like the S&L.
    25 Jul 2013, 09:16 PM Reply Like
  • Tack
    , contributor
    Comments (13540) | Send Message
     
    IT:

     

    This is a blog, not your private fiefdom. I just stated the obvious, but you want to be overly sensitive, as you have been other times with unnecessary censorship. You should not conduct a debating blog, if you expect everybody to avoid annoying you by stating factual information.

     

    I'll tell you what, I'll depart and anybody who thinks that my experience and commentary might be instructive can follow me elsewhere. That will make it easier for you to have the complaint audience you desire.

     

    Best of luck.
    25 Jul 2013, 09:25 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    IT,

     

    I haven't changed my opinion, I do expect a 10% or greater correction, & have been thinking that way for a while , but to date I have been wrong ,,

     

    Like we discussed the last pullback was about 6-7%. I thought with the run we had , it would be deeper. One of my faults at times is that I try to get things just perfect .. It can't be done with the markets. Old habits die hard though - LOL

     

    Another point to be made , no matter how bullish one is , u can't buy everything, and u should always have cash available and therefore never be 100% invested. If one has been in for this run, it's is a time to harvest some profits , no matter how bullish, nothing goes up in a straight line ...

     

    Some days , I'm almost sure a correction is about to begin, then others I sit back and say this market is so strong that i start to compare it to '95 , where all corrections were no more than 5%.

     

    As "south" would remind me at times like this, I'm over analyzing , and he's right ...
    25 Jul 2013, 09:26 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @TACK ( what a shock )

     

    Thank you for bowing out. You exposed yourself, yet no problem blaming me. It is my blog and yes I do make the rules. When I think someone is providing false information I call them out. I asked a question of FEAR yet you chose to childishly answer it. Yet have the gall to call ME overly sensitive? You quit !

     

    Nice try but stating the obvious had nothing to do with my question to FEAR. You are looking for an excuse to leave because in the next chapter I challenged you and you could not handle it.

     

    I figured let you put your experience where your arrogance is. I opened up the next chapter with a proposal and you ran for the hills as I expected.

     

    You got exposed and didn't like it one bit. I know you will read this but honestly when you weren't posting we were all calmer. I know I lost a lot of lurkers because of your antics so you won't be missed. Most lurkers didn't believe you at all.

     

    You needed to play by rules set up for everyone, not your own rules. Good riddance and keep up the 20% yearly average. LOL

     

    I called you out and you bailed !! So we all know what your all about. I know plenty who saw right through you. Glad that is over with.

     

    I gave him the rope and he hung himself. NEVER once providing stocks to pick for all to follow. I found that strange so I had no choice to offer him a challenge to prove himself instead of knocking everyone else.

     

    It is obvious what occurred so it's best to move on. I pm'd SOUTH to rejoin us because he provides details. I have no desire to do the same with TACK.

     

    SOMEONE HAS TO BE THE BAD GUY SO I AM IT ! But I had read enough insults that it was damaging this thread and I work too hard to let that happen.
    25 Jul 2013, 09:48 PM Reply Like
  • Economic Analyst
    , contributor
    Comments (2526) | Send Message
     
    Very educational, thanks Tack.
    28 Jul 2013, 11:16 AM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » Anyone hear from TACK. He hasn't posted in days . Hope all is ok !!
    23 Jul 2013, 05:53 PM Reply Like
  • Tack
    , contributor
    Comments (13540) | Send Message
     
    On plane. Travel break.
    23 Jul 2013, 07:15 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » Ok, thanks !!
    23 Jul 2013, 07:36 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » "Gold (GLD +0.9%) continues its comeback tour, with a big move in the last 30 minutes pushing the metal into the green for the session and up to $1,344/ounce. Technician Mark Newton calls this bounce the beginning of a longer-term bottoming process, and sees the metal back at $1,500 before October. The miners (GDX +2.5%) also continue a big move, inducing the blow-up of another triple-leveraged ETF, the DUST (DUST -7.2%), now off about 60% in less than a month."

     

    For those who love yellow....It's back !!!

     

    (DUST) got dusted within a month ...wow...
    23 Jul 2013, 06:27 PM Reply Like
  • Hebba Investments
    , contributor
    Comments (1449) | Send Message
     
    Yeah the miners have bounced very strongly - though I do think they have gotten ahead of the metal and I think its a good time for investors to lighten up on the miners. The miners have overextended and are trading at levels of gold and silver that are above current levels - earnings will not support the current valuations.

     

    Having said that, its a much better risk/reward trade to look to the PMs themselves instead of the miners. Or for those who are more aggressive, look at exploration companies that havent seen the rebound the miners have - you may be seeing a bit of M&A in the industry as the majors start taking advantage of very low valuations for the explorers
    23 Jul 2013, 06:39 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @HEBBA

     

    Who do you think are good takeover targets?

     

    And I am going to assume you want to join our Portfolio exercise challenge??

     

    Now who sang that song LETS GET PHYSICAL? No it wasn't Zimmerman.

     

    Starts in August, rules are being talked about in a chapter named Portfolio Exercise..
    23 Jul 2013, 06:53 PM Reply Like
  • Hebba Investments
    , contributor
    Comments (1449) | Send Message
     
    There's a number of explorers that would be attractive takeover targets in my view, but in general investors should be looking at projects that have low capex and companies with enough cash on balance sheet to make it through at least a year without issues. Also, I dont think you'll see the large deals, instead I think we'll see the deals under $500 million.

     

    I'm going to focus a few articles on potential takeover targets, but unfortunately there are only a few majors with the financial means right now to do any deals.
    23 Jul 2013, 11:24 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @HEBBA

     

    You better be preparing for that portfolio challenge!!
    27 Jul 2013, 04:59 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    I am curious. Does anyone have an unrealized profit in a gold mining stock or ETF like GDX?

     

    I started to nibble only a few weeks ago, buying AUY, NGD, EGO and AUQ, and I am in the hole after this move up, needing a telescope to see the green grass. I was at least correct in noting that I was trying to catch a falling knife at the time of those purchases.
    23 Jul 2013, 07:30 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Southgent1951,

     

    After this latest run up, I am telling my friends that I told to buy NUGT at $6 to sell. That's about it. Sucks that the ones you picked didn't follow suit higher. They should have, but I don't really follow the miners closely enough to know why they didn't. Talk to Hebba Investments. He posts here from time to time. I think he just posted that the miners have gotten ahead of themselves compared to gold of late. I nibbled on some DUST again at market close. Small shares.
    23 Jul 2013, 08:16 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1056) | Send Message
     
    South

     

    I used to own (EGO) and (AUQ); doesn't ego have issue with gold mine opening in Greece but stock very volatile- that's what I saw recently; (NGD) is 1 stock I am tracking together with (NG)- both of them in process of hearings and permits approval--these stocks require a lot patience and a long time frame (7-10 years).
    Well, these are some of the reasons why I sold and just waiting for environmental approvals to start mining....good luck!
    23 Jul 2013, 08:47 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @RIN

     

    You in for the portfolio exercise? If so find us a site that can track all the dividends and has to have a huge negative number for FEARS losses... hehe.

     

    Let the smack talk start but I will move it to the PORTFOLIO CHAPTER as I am sure so will get annoyed !!

     

    Winner get a 100 oz Tungsten bar painted gold from Doug. ( he is writing his book right? )
    23 Jul 2013, 08:59 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    Rina: Fortunately, I did not buy much. The purchases were made in what I call the $500 to $1000 Flyers strategy with one purchase in the Lottery Ticket basket. I just looked at the prices and I am closer to break-even.

     

    My buy of EGO was in mid March 2013 with a 100 share purchase at $9.3. In case your interested in my take, I discussed it in this post:

     

    1. Bought 100 EGO at $9.30-Satellite Taxable Account

     

    http://bit.ly/15GWhZo

     

    Needless to say, my timing was off. But I am closer to a break-even after the spurt to today's close at $8.3. The close was $5.66 on 6/26. I hadn't looked at this one in weeks.

     

    When I take this kind of position, I really do not need to do anything other than wait and be patient.

     

    The AUQ buy was under my Lottery Ticket strategy with a 40 shares purchase at $6.55:

     

    http://bit.ly/ZzX9d9

     

    I bought 100 NGD in the Flyer's strategy at $9.39, also in March 2013.

     

    My buy of AUY was 50 shares in the Flyers' strategy at $14.25.

     

    Perhaps, I needed to space out those purchases to include a month other than March 2013.

     

    I have had several of these purchases in my Lottery Ticket and Flyers' basket strategies come back strong after periods of weakness. With the small lots, I mainly buy and forget and things work out just fine most of the time. I have had a few with over 50+% unrealized losses turn into 100+% realized gains.

     

    I had to be a little amused at the comment of lightening up on the gold miners. To do that profitably, the investor would have had to buy within the past month or so. In 9/2011 GDX hit $66.63 and closed today at $28.35 after bottoming at $22.22 on 6/26. If I bought GDX at $23, I might lighten up but I doubt that many caught this little bounce in the gold miners after two horrific years of carnage in the space. When I was buying those gold miners in March 2013, GDX had already been cut almost in half.

     

    My question was whether anyone had a profit in gold miners to realize after this slight bump up in price assuming they wanted to lighten up.
    23 Jul 2013, 09:17 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    IT,

     

    the way i figure it, with no margin allowed , i can only lose 100K :)
    23 Jul 2013, 09:02 PM Reply Like
  • CoinsK
    , contributor
    Comments (3479) | Send Message
     
    F& G , I'm a little more optimistic than that .I believe I can keep at least 90% of what I started with. But the old adage comes to mind. How do you become a millionaire in the Gold & Silver ,(Stock) market? Start with 2 :)
    24 Jul 2013, 01:55 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @FEAR

     

    CURLS wants a margin account !!! I was laughing so hard I fell on the floor. Plus OPTIONS??

     

    Ya think she has been pulling our leg for months now? A TROLL ??
    23 Jul 2013, 09:14 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    IT: She may be pulling your leg on that one.

     

    I have never bought an option, a future's contract or a stock on margin, and I have never shorted a stock. I am a practitioner of the turtle school of investing.

     

    I did experiment briefly with some double short ETFs in 2008-2009 and found them to be flawed products except for a short term trade.

     

    I have no confidence in my ability to call a short term swing up or down in anything. Gold may go up $100 in the next week or down $50. I have no idea. And for those products to work, the short term timing needs to be good. I was successful with SDS and TWM in 2008 only because the markets tanked during the period of my ownership.

     

    23 Jul 2013, 09:31 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    South,

     

    Slow & steady wins the race , , Have to say from what i have seen here on SA ,you have won your share...

     

    23 Jul 2013, 09:47 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @SOUTH

     

    I am talking about our play money portfolio. Just busting her chops!!
    23 Jul 2013, 11:07 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4316) | Send Message
     
    @ IT

     

    Sigh, you saw right through... I'm a troll. Know exactly what I'm doing, & came with newbie questions to test you!

     

    Meanwhile I asked earlier - what's a future?

     

    I always thought they were same as options, but that's obviously not true.
    23 Jul 2013, 11:55 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4316) | Send Message
     
    Nevermind - @ Rin answered me above in same chapter.
    24 Jul 2013, 07:49 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    IT..

     

    LOL - I'm outta here !! - :)
    23 Jul 2013, 09:19 PM Reply Like
  • convoluted
    , contributor
    Comments (1964) | Send Message
     
    For those of you utilizing DUST/NUGT-both ETFs have options. So, if you bought NUGT and picked up a decent gain, you can sell call options, or buy an appropriate number of DUST shares as a hedge. You can trade the DUST shares, and leave NUGT intact.
    In larger numbers (of NUGT)-you might buy DUST calls to hedge a NUGT position with several hundred shares. There is a point where you can sell calls against both ETFs for a lot of option premium.
    A few weeks ago, I sold some longer-dated NUGT puts (which were never assigned), and also sold DUST puts and bought DUST calls. I made a lot of $ on DUST, and left the NUGT puts in place. Of course, that part of the strategy is now making money. I also bought puts on DUST with some of the previous DUST gains, and that has moved in the right direction as well.
    I did strategies like this for a living, so it's nothing new. But, the point I want to make is to keep an open mind about the various types of tools that are available to you. If you have any questions about using options to play gold or these ETFs-let me know. Obviously, I can't take the time to write a book, but will try to help anyone getting started.
    23 Jul 2013, 09:44 PM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    So much of this stuff flies over my head... like 500 feet over my head. I looked back at the past year for NUGT. At one point it hit $80 and of course that was at the time PMs were really doing well. Now, NUGT is in single digits. If someone firmly believes gold will make a nice rebound over time, willing to wait 3 months or 3 years if necessary, why then would it not make sense to leave the investment intact and check in from time to time? I realize this is a very simple approach but is that so bad?
    I understand if I am incorrect about my faith in both silver and gold and a nice rebound, I will obviously lose with my investments (PSLV & NUGT), but if I am correct, I stand to make quite a nice profit. Is there a solid argument against my simple approach aside from non-believers in the future of PMs?
    I just think we have reached a bottom for metals and getting in now with NUGT and similar gold and silver stocks could lead to some serious gains. Of course, one shouldn't go "all-in" with these but they certainly seem to offer a lot of potential as 10-15% of a portfolio. I am also keeping my eye on and considering AGQ.
    23 Jul 2013, 11:01 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Convoluted,

     

    Excellent point , many don't take advantage of using options as a tool to enhance their performance. Most have the idea that options are pure "gambling" , They are if one decides to use them that way..
    24 Jul 2013, 08:54 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    convuluted, F&G, I think you both make good points. Most don't have a clue about how to do it and appreciate the fact you offer help and understanding as well as advice.
    24 Jul 2013, 11:55 AM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @CON

     

    Thanks for the offer, I am sure someone will take you up on it !!
    23 Jul 2013, 09:47 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    There are a few words in investing that naturally attract me like irresistible magnets. Double and triple leveraged ETFs are not among them, nor is the word "margin".

     

    My ears perks up with such words or terms like value, growth at a reasonable price, low volatility, high return on equity, quality and consistent earnings.

     

    When Ishares offered a new low cost ETF, USMV, that owned low volatility stocks, I bought some shares, just to throw my hat in the ring with a starter position.

     

    iShares MSCI USA Minimum Volatility ETF
    http://bit.ly/17qlUlg

     

    Expense Ratio: .15%

     

    That one is available from Fidelity on a commission free basis.

     

    BOUGHT 100 of USMV at $29.29
    http://bit.ly/17ZHKtN

     

    I noticed today a new ETF that was seeded with $100M by the Arizona State Retirement Fund. The fund seeks to buy "quality" mid and large companies based on three criteria: stable earnings growth, low financial leverage and a high return on equity.

     

    The expense ratio is .15%:

     

    iShares MSCI USA Quality Factor ETF
    http://bit.ly/11cNizq

     

    I would have preferred to buy this kind of ETF back in March 2009 when the market was at a "safe" level. Still, I may scale into it with some small purchases over time.

     

    If anyone is interested, I published today an update table of my CEF portfolio:

     

    http://bit.ly/11cNizs

     

    Over the past month, I have been attempting to catch falling knives by adding odd lots to bond CEFs.
    23 Jul 2013, 10:14 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4316) | Send Message
     
    @ SG

     

    I'm expecting more rates increases at least by the time all this normalizes (whenever that may be). So wouldn't bond funds be coming down eventually? Therefore CEFs be sold at discount?

     

    Any of what you bought have a particularly nice return? Held long enough, the external market doesn't matter.

     

    Reading your link, I see you explain it there. Though I don't understand most of it :).

     

    you said: "I am trying to balance the desire for some income with the potential principal losses inherent in buying bond funds now."

     

    One takeaway I got - is that if a CEF is paying a high yield, check if it's leveraged to get that yield, since that changes the risk game.
    24 Jul 2013, 08:04 AM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    Curls: If the yield is over 6%, the bond CEF is most likely using some leverage.

     

    I own one world bond CEF that does not use any leverage, SGL, that yields over 6% but it has to realize capital gains to support its dividend.

     

    A typical non-leveraged bond fund is CSI, which owns mostly investment grade bonds, and yields less than 6%.

     

    I am in a hyper trading mode with bond CEFs recognizing that there are risks associated with rising interest rates at the current time.

     

    I have traded a lightly leveraged taxable bond CEF GDO so many times that I have to use fingers on both hands to count the trades.

     

    It is not unusual for a bond CEF to trade at a discount to its net asset value per share even when interest rates are falling. The market price is determined by supply and demand, mostly by individual investors, just like a common stock.

     

    Consequently, during times of stress, the percentage decline in the market price may substantially exceed the percentage decline in the net asset value per share which can not happen with a bond mutual fund that is always priced, for both buyers and sellers, at net asset value per share.

     

    The decline in a bond CEF's market price increases the yield in basically the same way as a decline in an individual bond's price increase yield.

     

    Lower prices mean higher yields.

     

    It is not difficult at the moment to find leveraged municipal bond CEFs that have 6.5%+ tax free yields that are weighted in "A" rated or better bonds. In a low inflation environment, trending under two percent, that is an excellent real rate of return and certainly better than a 2.5% yield for a ten year treasury.

     

    There are always risks in investing, and the issue is frequently balancing the potential risks and rewards. Any security that can change its value is not "safe". There is also risk associated with earning negative real rate of returns for most people. It takes about 139 years for an investment that pays .5% to double in value before inflation and taxes:

     

    http://bit.ly/U5wENS

     

    Interest rate normalization is likely to place additional pressure on bonds over the course of the next year. However, the low inflation expectations of around 2% per year for the next ten years will place a cap on the rise in rates, provided of course those expectations do not rise significantly from current levels.

     

    Part of the potential net asset value decline, due to interest rate normalization, has already been priced into several CEFs by the greater percentage decline in market price compared to percentage decline in net asset values. One risk is that the percentage decline in market prices will continue to exceed the decline in net asset value after a purchase is made by an investor.

     

    Say a fund normally sells at a 3% discount to net asset value and is selling now at a 10% discount. If the weighted duration of the bonds owned by that fund is say 5 years, then a rule of thumb is that the fund could lose about 10% with another 2% rise in interest rates. But the discount is already reflecting 70% of that potential worst case rise over the next year or two based on average discounts over 1, 3 and 5 years. In the meantime, the owner would be receiving a much better yield than the near zero amount paid by a money market fund.

     

    I am also scaling into these purchases with small odd lot orders spaced out over time as one risk mitigation technique and have changed my distribution options mostly to reinvestment as another means to average down.
    24 Jul 2013, 08:37 AM Reply Like
  • John Wilson
    , contributor
    Comments (1339) | Send Message
     
    Off the "investment portfolio" topic, for a moment - regarding Obama's speech tonight, first of six: read, consider, then go back to investments.

     

    Obama is going to give a speech about the economy today (Wednesday July 24).
    “. . . first in an ambitious series of six addresses laying out a sweeping vision for America’s future.”

     

    The time frame of this speech is uncomfortably close to Detroit's filing for bankruptcy last week. The unfunded pensions are an issue being raised with the Detroit bankruptcy, and something that may give Obama an excuse to try to force action on the "Guaranteed Retirement Account {GRA}, the scheme to force 401K's and pension funds into government controlled accounts where you are directed to be invested in Treasury bonds or maybe a new kind or retirement bond.

     

    According to Cody Keenan, Obama’s speechwriter and propagandist, Obama will give six speeches that will cover the following topics:
    “ . . . education, housing, retirement security, health care, poverty and jobs, Keenan said”

     

    If I could, I would put the topic of “retirement security” in red bold letters, and have it underlined. Is “retirement security” something that I want Obama to “fix” for me?

     

    I hope he is not going to spring the GRA on us, but he is going to be campaigning for something that we don't need and will hurt us, for sure.

     

    Two quotes above were from article
    'Obama speechwriter discusses economic speech, ‘unfiltered POTUS’
    http://yhoo.it/1bNgJ0V
    24 Jul 2013, 11:29 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Thanks for sharing John. With Detroit under siege, it will be interesting to see how Obama spins it. How can he make Detroit a positive?
    24 Jul 2013, 11:57 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    John,
    Yesterday I mentioned we are entering into a period where the politicians will start to take the spotlight.. A period where we will see "rhetoric" now from both sides. My guess is it will be a replay of the same nonsense we went thru last Oct - Dec .

     

    Media will play this up, the volume will be turned up to "high" for the"noise" meters.

     

    Some wonder what may slow down this bull rally -- may I suggest it just entered the room ..

     

    Of course the media will cite the negatives, and totally ignore that what is REALLY happening is a normal pause after a huge run.

     

    If they talk long enough it will give those that have missed a part of this historic run a chance to get on board.. The Bull market has a lot more to run...
    24 Jul 2013, 01:21 PM Reply Like
  • John Wilson
    , contributor
    Comments (1339) | Send Message
     
    Thanks Doug for replying, but I think that Obama wants more than just "spin" so he can sound good. I think he will be advancing an agenda as he has just less than three years left. Awareness of Obama's agenda may be just as important as correctly predicting Fed actions and interest rate direction.
    24 Jul 2013, 01:36 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    What do you think the agenda will be John? Just curious.
    24 Jul 2013, 01:46 PM Reply Like
  • John Wilson
    , contributor
    Comments (1339) | Send Message
     
    Doug:
    A theme in his previous speeches is "government needs to do more."
    * I believe his economic advisers have been planning the GRA behind the scenes, and the bankruptcy of Detroit with the unfunded public (union) employee pensions would be an "injustice" for him to correct. He will be talking about "Retirement Security;" a non-problem for which he apparently has a solution. Also there is a list of additional major cities that will follow Detroit.
    ** The "Affordable Healthcare Act" is something he needs to do damage control on and re-spin and push it again.
    *** "Poverty and jobs," solution: Homeland Security Corps, Homeland Security graduates first Corps of Homeland Youth
    http://bit.ly/1aJRoSv
    Make of that what you will, but it doesn't sound good to me.
    **** Diversion. This series of speeches could be diversionary as they take their involvement in Syria to a new level.
    These were just a few that floated into my mind. Remember, "Government needs to do more."
    24 Jul 2013, 11:53 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Thanks John, missed this...

     

    SA's system of finding replies isn't that good and I miss some.

     

    Thanks and do agree with the "diversion" comment. It is there #1 way of getting people to forget what was just talked about. (It was Iran, then Trayvon, next up??? possibly Syria, yes). But some of us are getting Fed Up! with it all.

     

    I still see the glass half full, although some here may disagree, lol, but if half the glass is filled with gasoline, who will drink from it? The gasoline represents the fiat money thrown at the system. It gives the illusion that all is well. Heck, give me $100,000 in a check and I'll show you how well things are! Drinks on me!
    25 Jul 2013, 01:38 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    My latest article for those who are interested...

     

    Conversation with Axel Merk on Gold and Euro at FreedomFest – Merk Funds

     

    http://bit.ly/18CTkPB
    24 Jul 2013, 11:58 AM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    Doug,

     

    Love the Barakazillion dollar, pretty funny.

     

    You mention Merk is 50% invested in gold.
    The guys over at Miles Franklin say they are 100% in gold/silver, no savings in banks, no brokerage accts, no ETF's, all physical gold and silver.

     

    Thanks for the article.
    24 Jul 2013, 01:14 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Doug ,
    this may come as a surprise but i'm not convinced, nor agree with your conclusion.

     

    Your last paragraph mentions the 2008 crisis where the market dropped 37 % while the "gold" fund held its own down only 5%. .

     

    Why not add while the equity market is up approx. 27% since last fall, gold has entered a bear market and is down 28% (using today's price)

     

    IMO this would be a more "fair & balanced' theme to lay out when talking about the markets.

     

    Your final sentence " I believe “this time” the financial crisis will have investors scrambling for gold.. "

     

    This may come as a shock to the "gold crowd" but what if we don't have another financial crisis. ??

     

    I'll leave with the fact that the 2008 financial crisis has come & gone and the market is now higher than before that "crisis" . Now you want someone to buy into a theory that the "next one" will have all leaving the markets and flocking to gold .

     

    I suggest and practice the deployment of "risk management " to all investment classes.

     

    From what i have observed I don't see that as part of the "Gold Mantra.."

     

    Just my .02

     

    Happy investing ...
    24 Jul 2013, 01:44 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    tampat, do you have a link to the Miles Franklin position? That's rather surprising.

     

    But hey, Keynes made a mint off the minders while bashing gold, lol.
    24 Jul 2013, 01:47 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    Doug,

     

    No, I dont, you would need to go to their website and check the daily blog for Andy Hoffman and David Schectman. They have a daily email newsletter they send out for free with stories and a lot of links to other stories related to markets, metals, politics, etc.

     

    I don't read it every day but I have read it often. They have mentioned it numerous times and have advised people to get their money out of the system and into physical metals only. They have written many times about what John Wilson referred to in his post above and the Obama agenda.

     

    They appear to believe we will have a system wide failure much worse than 2008-09.
    24 Jul 2013, 02:11 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    F&G, a surprise? No...not from you...ha.

     

    The premise of why I am including it in my book, is a "defensive" strategy as part of the overall allocation. Your conclusion was, from what little I wrote, that is all I would have people invest in, gold and currency. You assume this because of the "bubble" articles I have written, which is natural. This is not the case and I'm not going to write my whole book here to explain.

     

    I can clearly make the case, in my book, for another crisis. While I do believe in asset allocation, I will be hedging for what I see in the data.

     

    Your .02 is now .04 after inflation!
    24 Jul 2013, 02:38 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    tampat, have they been saying this for years, and do they sell gold and silver? Just want to know your thoughts since you have followed them.

     

    I just watched one of the Aftershock authors promote gold and brag about being right, but they said this before 2011. I have received many calls from people who have read Aftershock and who bought gold from me, but I have advised them to dollar cost average into a position, rather than go "all in."

     

    I wrote a bullish article a few weeks ago, and that was good timing. I wrote a cautionary article 2 days ago, and that was good timing. I simply call it like I see it. But some of these guys are over the top with what they say. The mistake I think most make is one of two things. They don't understand credit contraction and the dollar, or they don't recognize the Fed still has power.

     

    Thanks for sharing...
    24 Jul 2013, 02:42 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Doug,

     

    got it !
    24 Jul 2013, 02:52 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    Doug,

     

    Yes they sell PM's, they say about $200 mill/yr.

     

    I dont know how long they have been advising this, for several years is all I know for sure, though I haven't seen talk of it recently. The have also advised averaging your way in and recommended other PM dealers they think are reputable.

     

    I think they're ok, they do a pretty good job of providing a wide range of articles that you won't see in the MSM.
    24 Jul 2013, 04:03 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    tampat,

     

    I thought they might, but 100%? As a former financial advisor, I would be reprimanded for saying such, so I don't even come close. My book said 10% to 20%. I'm ok with more than that now because of the downturn in prices. But 100%?

     

    I just checked out their site. They sell numismatic coins too, which is just something I can't get behind. I could sell the hell out of them and make a million a year doing so, but I choose not to. I stick with what I believe in.

     

    Thanks for sharing.
    24 Jul 2013, 04:11 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    One other thing Doug, the 2 writers I mentioned previously have said they dont represent the views of Miles Franklin, that what they write is just their opinion and M/F doesn't censor them.
    These 2 guys dont recommend the numismatics either.
    24 Jul 2013, 04:15 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    Oh...cool... Wonder how their bread is buttered?

     

    I know Glenn Beck could give a hoot that the company he touts just had to pay $4.5 million to the Santa Monica City attorney to settle a lawsuit, without admitting guilt. But they were forced to curtail some of their solicitation tactics in getting investors to buy numismatics. They made over $500 million that year, so a $4.5 million fine shows you how lucrative this business model is.
    24 Jul 2013, 04:18 PM Reply Like
  • CoinsK
    , contributor
    Comments (3479) | Send Message
     
    Stocks DOWN during Obama's "campaign" speech.
    http://finance.yahoo.com
    24 Jul 2013, 02:01 PM Reply Like
  • South Gent
    , contributor
    Comments (3320) | Send Message
     
    Credit Suisse recently released a report (6/25/13) on China, with lots of charts, in case anyone is interested in that topic. That firm lis bearish.

     

    http://bit.ly/1aJ2PtD

     

    One positive aspect of that report involves spending by the Chinese consumer. The consumer share of China's GDP is about 1/2 of that in the U.S. (page 2)

     

    This is a link to CHINA GDP. Construction is shown at 9% of GDP:

     

    http://bit.ly/1aJ2MOB

     

    Mining, manufacturing and construction together are about 40% of urban fixed asset investment. (page 9 of CS report)

     

    I would agree that the prior GDP numbers need to be adjusted for construction expenditures relating to those ghost cities and some infrastructure projects. Eventually those cities will fill up with people as more people move from rural to urban areas. It is really impossible to make a precise estimate of that revision. I have seen some guesses that would reduce recent GDP growth (post 2007) to anywhere from 3% to 5% without that construction.

     

    Wall street analysts have certainly been falling over themselves for a few weeks downgrading their GDP estimates. Long term, the change that China's leaders want to make, a more market driven and consumer led economy, will be beneficial to China and to foreign firms that sell to Chinese consumers, but not so much to Vale, BHP and other firms that relied heavily on construction activities to generate profits (e.g. Australian miners). I would agree with that aspect of the CS report.
    24 Jul 2013, 02:52 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2987) | Send Message
     
    South, that's because their wages haven't kept up with production. Quite the disparity. But to balance all those out won't be easy moving forward. If wages increase, the small and medium size business suffer. If more comes from production, the elite's won't like it.

     

    Who usually wins?

     

    I don't see the little guy contributing much to GDP in the future. Will be interesting to see how things unravel and it is fun to research and speculate which I see you do quite a bit of.

     

    Thanks for sharing.
    24 Jul 2013, 04:15 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    South,

     

    The more these analysts fall over themselves to lower their projections , the better i feel about the situation over there.. :)
    24 Jul 2013, 02:57 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » Folks

     

    Been gone most of the day. I have to catch up on the POTUS propaganda later. But of more importance I read that we basically have no site we can use for dividends.

     

    So does anyone have any ideas or do we just scrap the project?

     

    I have my basketball program tonight with the kids so I will be back to check the remarks around 10 ish.

     

    Thanks for the input and BTW Doug, what makes you think it was YOU who I meant in my blog info anyway? lol

     

    We have a talented bunch of people as I have been PM'D by quite a few. Including REAL authors...hehe

     

    Hope someone can come up with a plan as I would like to have the exercise but without the dividends I think it may be hard for individuals to do all that work. But if all are up for it I am too !!

     

    As a heads up Eric Parnell, an author some of us follow, PM'D me and said he will be talking about our group in one of his articles, possibly Sundays, so keep a lookout for it . I have no idea what he going to say either.

     

    But I would be honored to have our distinguished group mentioned in anyone's article. Keep up the great commentary as you can see people are reading it.
    24 Jul 2013, 05:40 PM Reply Like
  • dnorm1234
    , contributor
    Comments (1105) | Send Message
     
    >So does anyone have any ideas or do we just scrap the project?

     

    I spent some time looking as well, but can't find a site that would cater to what you're talking about here.

     

    It's too bad, because the wealth of great information being discussed here could only benefit from practical application. As someone who's still trying to figure out this investing game, I love hearing knowledgeable people make calls.

     

    So how else to leverage that? Maybe it could be an investment club type thing?
    25 Jul 2013, 01:00 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Dnorm , All,

     

    I stumbled upon this , free download of a spreadsheet set -up using Google finance & Yahoo finance as a source for info.

     

    Tack mentioned his use of google spreadsheets in the portfolio chapter. I currently use my own custom spreadsheets , that i built using the google format , & I luv it..

     

    If anyone wants to download & give this a try and report back,,

     

    http://bit.ly/14aSErT
    25 Jul 2013, 03:25 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @FEAR

     

    Does it include dividends into the portfolio? That will be key. I just don't see people wanting to figure out the dividends on their own for this exercise.

     

    Personally I was going to have some BDC'S in my portfolio and a few have monthly dividends. I really don't have the time to keep track of the ex dividend date, then the day the shares are added.

     

    I guess we might as well scrap the idea unless someone saves the day for us. But I was hoping to just put in a symbol, the amount of shares bought, the price per share and was hoping a spreadsheet would do all the rest.
    25 Jul 2013, 06:53 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    For anyone keeping score on the recent earnings season,
    as of July 23

     

    The earnings "beat" rate has picked up a bit and is now at 71.2%. The "revenue beat rate" has also increased from last week up 3 percentage points up to 53.2%.
    24 Jul 2013, 07:29 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1735) | Send Message
     
    F&G, you & I seem to be the more blatant bulls around here. Even Facebook made money last quarter!

     

    I'm hearing on CNBC & reading it too, that there is a lot of money that came out of bonds, but didn't go anywhere. It's sitting on the sidelines. So get ready....this bull is not done. That money will come in sooner or later, maybe over the next 6 months. Those people are waiting for the market to drop. While they are waiting, it seems to take a tiny break, and then get back to going up. June was a good opportunity, maybe we will see a few more like that before December. I still have a lot of cash to put into the market. Yesterday I bought a little

     

    (INTC) & (MSFT) because they are so undervalued right now. I'm looking for more deals like that, where the PE ratio is under 15 but earnings outlook is good.

     

    Picked up so more (LO) because it got hit hard with the bad news about menthol flavored cigarettes.

     

    About ready to pull the trigger on (WMT). However I'm expecting August to be interesting. Keep telling myself to hold off, wait for a really big down day.

     

    What happens when QE stops & interest rates go up? Stocks will fall, like they did in June. Hang onto some cash for that folks, it will be a big buying opportunity. Trim stocks that have had big gains, to raise some cash. I just sold all the last remains of all my mutual funds for that rainy day fund.

     

    Have a great evening everybody.
    24 Jul 2013, 08:13 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Blue,

     

    Take a look at (QCOM) ,they reported yesterday and It was a good quarter, Forward PE 12-13. They are "the " leader in mobile technology. I believe we will see double digit growth here, a growth story that will continue for a while as the global mobile demand continues. IMO they deserve a premium to the overall market given their growth prospects , a conservative projection may put this stock @ 85-90 in the future. They also pay a 2.3% div which was raised significantly this past year..

     

    Full Disclosure - I own , and its one that I have had confidence in buying for clients in the past 2 months .. & I haven't bought much in that time frame ..

     

    Happy Investing !
    25 Jul 2013, 10:12 AM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    In 2008 if you bought QCOM and sold it 5 years later, you made....just about nothing. Why would anyone want to buy a $60 stock that has gone up down and simply ended up in the same place five years later??? I don't get it. I could understand if the dividend payout was significant but with this one it does not seem to be very much. Please correct me if I am wrong but if I am going to hold a stock for five years or more and the price goes just about no where in that time, the dividend has to be damn high to lock up my money that long.

     

    If my advisor told me to buy QCOM five years ago as part of a growth plan for the coming five years, I wouldn't have the same advisor today. I don't mind taking a somewhat conservative approach with some of my investment dollars but can anyone out there offer a few stocks that might actually make money in the next five years? Some of us are looking beyond five day and five weeks trades.... Just sayin'
    25 Jul 2013, 03:51 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Rich.
    Please re read the commentary then re think your comment....

     

    I can go on & on , however 'lets" see where QCOM is in 2 years from NOW not 2008 ...

     

    & for a laugh, lets see where silver is 2 yrs from today and see if I wish to use your investment advice ---
    25 Jul 2013, 03:57 PM Reply Like
  • Tack
    , contributor
    Comments (13540) | Send Message
     
    rich:

     

    If one had bought QCOM five years ago, they made a 32% total return, but if they had bought it three years ago, the return jumps to 71% (within 1% of Apple, by the way).

     

    http://bit.ly/14N8Tl7
    25 Jul 2013, 03:57 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1735) | Send Message
     
    F&G, thank you for the suggestion. I'll take a look at QCOM.

     

    Quite a day on the market today. Congratulations to everyone that had (FB). Crazy one day gain on that one.

     

    (SBUX) blew the roof off, they had a great quarter too.

     

    Have a great evening everyone.
    25 Jul 2013, 04:44 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    Blue,,

     

    To take a line from "southgent" , (FB) is my 'lottery ticket"...

     

    For me (SBUX) is the one that "got away: Never got into it..

     

    I believe u mentioned u own (TSCO) , good quarter last night , stock sold off today. I like their story,, may get involved if it comes down a bit more ..

     

    Best of luck...

     

    25 Jul 2013, 04:54 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @FEAR

     

    Buying silver for under $20 bucks an ounce you are telling us In 2 to 5 years we won't make any money?

     

    I will take you up on that one. lol
    25 Jul 2013, 06:57 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    IT,

     

    I believe it was stated to be a 2 yr timeframe and the issue was not whether silver will or wont make money , but would it outperform (QCOM)

     

    Silver may be "dead" money for a while .. :)
    25 Jul 2013, 07:31 PM Reply Like
  • CoinsK
    , contributor
    Comments (3479) | Send Message
     
    What about 7 years ago ?
    25 Jul 2013, 07:43 PM Reply Like
  • CoinsK
    , contributor
    Comments (3479) | Send Message
     
    IT wrote: "Buying silver for under $20 bucks an ounce you are telling us In 2 to 5 years we won't make any money?
    I will take you up on that one. "

     

    COUNT ME IN TOO ! I love doubling my money then taking a profit. Best dividend plan I have ever had .
    25 Jul 2013, 07:44 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @FEAR

     

    I know quite a few people picking stocks on their own for the last 4 years that are literally BROKE now !!
    25 Jul 2013, 08:06 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » @COINS

     

    "Goldman Sachs makes the case for holding commodities as a strategic move. On Brent crude, the market should be well supplied in H2 as significant non-OPEC supply comes online and weak Chinese trade data signals relatively weak demand. Gold prices should decline to $1,050/oz. by year-end 2014 given a less accommodative Fed. Potash producers will maintain discipline and good margins despite falling crop prices"

     

    "Less accommodative Fed"? Like we all bought BB'S chat hook, line, and sinker??

     

    Apparently GOLDMAN just went long on gold !! They sucker people all the time don't they..
    25 Jul 2013, 08:26 PM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    Bring it on. Silver vs QCOM --- August 1, 2015. Percentage of increase... I'll take that challenge in a heartbeat. If you give me a little time I can probably come up with another 5+ choices i would take before QCOM... the stock the ends up going.... well... no where.
    25 Jul 2013, 08:27 PM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    Good one Tack, lets pick out the two best scenarios and call it a winning investment. As I said in my post if you were paying attention, I like long term investments with 5 years typical of what i call long term. As a long term pick QCOM was a dud and although it may go up in the next two years it will not out perform silver as a percentage increase to todays prices. Can't wait make FEAR look silly on this one.
    25 Jul 2013, 08:30 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Author’s reply » Well this will be an easy one to follow. Silvers price on AUGUST 1ST vs (QCOM).
    25 Jul 2013, 08:31 PM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    QCOM as an investment five years ago is dead money. Silver may also outperform QCOM by 1.5 to 2x. QCOM into the 80s by August 15, 2015? NOT...I'll take that one as a side bet as well.
    25 Jul 2013, 08:33 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5282) | Send Message
     
    (QCOM) @ 85 by 8/1/2015 , ok, sounds fine by me..

     

    :)
    25 Jul 2013, 09:32 PM Reply Like