Nate C

Gold's Finest Hour: How to Buy Now

I agree with DavyJ. I keep hearing from the gold bugs (my grandgather included) that gold is an inflation hedge and should be traaing around $2000. My question : why is gold not currently trading at $2000 if it really is an inflation hedge.

If you want a real inflation hedge buy timber. Historically it has provided returns 4-6% higher than inflation. Sure beats gold's record.

Will 'Dark Pools' Be the Capital Markets' Next Black Holes?

Amazing article. I had never heard of these "dark pools" before. Thanks for sharing the information.

Breaking Up With Jamba Juice

I too was tempted by Jamba Juice. However I decided that there was too much hype about Jamba being the next Starbucks. I never believed this considering Starbuck's was profitable from day one, while Jamba has over 100 stores and is still not profitable. This does not stop them from expanding their store base.

While I avoided Jamba, I did get sucked into Sun Microsystems in 2002. We all make mistakes, and that is when you are able to become a better investor. First rule is to always sell if the stock drops 10%. It is always hard to take a loss, but that is better than a 85%+ loss I suffered with Sun Micro.

I never made that mistake again!!

Adding Wood to Your Portolio: A Worthwhile Investment

If you are interested in a good timber reit, take a look at Timberwest (TWTUF.PK).

Vietnam Suspends Gold Imports, Follows FDR's Great Depression Lead

FDR was a criminal who robbed people of their wealth (gold siezure, social security) and then created the welfare/slave state we have today. People have become so dependent on the government that they are no longer free, but instead slaves to the almighty state which gives things to people.

Six Quotes from Fannie Mae on the Mortgage Industry

Consider these facts.

1. Fannie Mae currently has $40 billion in available capital

2. Fannie Mae currently holds $74 billion in loans with FICO scores of less than 620 (subprime).

3. Fannie Mae also owns $196 billion in ALT-A loans (basically loans with no documentation where people lied about how much money they make)

4. According to Michael Mayo at Deutsche Bank (a very credible analyst) the default rate on subprime mortgages is estimated at 30-40% and a loss rate of 40-50% on subprime mortgages. This would mean losses for Fannie Mae of between $29.6 - 37 billion.

5. Fannie Mae’s AlT-A porfolio could see losses of between $19.6- 39.2 billion assuming a 10-20% loss rate (which is conservative) The real number is closer to 33%.. Many of these loans were given to subprime individuals who lied about their wages to justify the loan.

6. Fannie Mae faces losses of between $49.2-76.2 billion even though they only have $40 billion in capital. This means at the very least, Fannie Mae would have to raise $9 billion in outside capital to remain solvent. At the worst Fannie Mae would have to raise upwards of $36 billion. It is becoming more difficult for companies to raise new capital. Previous capital injections from foreign governments and private equity have all lost money, making many investors hesitant of investing in financial companies (just ask Warburg Pincus about their Mbia investment).

7. But doesn’t Fannie Mae hedge portions of their mortgage portfolio. Short answer is yes, but to do this Fannie enters into various swap agreements with bond insures like MGIC, PMI, etc. which exposes them to enormous counter-party risk. Many of these companies are themselves on the verge of bankruptcy (PMI trading at $1 a share) and face impending credit downgrades from Moody’s and S&P. Fannie Mae could be in the unenviable position of making money on their hedges but unable to collect the money from their counter-parties.

8. But won't the government save Fannie Mae and Freddie Mac from bankruptcy? The short answer is yes, but that does not mean that shareholders will be pleased with the outcome. When Fannie and Freddie get near bankruptcy, the US government is more likely to nationalize the firms then simply giving them more capital. This scenario is more likely if Senator Obama is President. When the government nationalizes a company, shareholders often receive next to nothing (think JP Morgan buying Bear Stearns for $2).

The End of the Line for the Busch Family

August Anheuser Busch IV seems more like a criminal than a CEO of a Fortune 500 company. I am glad he will be forced out when Inbev takes over this company which has been run into the ground by the Busch family.

Weyerhaeuser: Returning to Its Roots

Really nice article. I have been looking at timber as a way to hedge against inflation but believe it is to early to get into these names. The pricing and demand is continuing to weaken with little hope of recovery until late 2009 (more likely 2010). That said WY pays I nice dividend.

I think they should divest of their homebuilding segment. Homebuiling has never been a great business (excpet during boom times), it is capital intensive and low margin. IF WY did get rid of this segment (maybe to private equity) they would be closer to a pure play on timber, which makes a great long-term investment. I also wish they would have chosen to become a REIT.

Orange Juice Derivatives Look Sweet

Quality article. Thanks for posting it.

Soybean Crush Crushed

Good informative article. I am pretty happy about the pressure of ADM's margins--I own JUN puts.

Investing Changes Under a New Tax Regime

I agree with Xyrus. Ron Paul is the only candidate that would have balanced the budget. The rest are just crooks and liars that tell the sheeple what they want to hear.

Employment Report Disaster

Great article. It should be interesting this week to see the CPI number. I am sure the government stats will say that inflation went down. Last month they said that energy prices went down. LOL!! I am surprised that the markets still believe these cooked government numbers.

Rising Crude Prices: Not Necessarily Good for Oil Stocks

As someone who owns oil, nat gas stocks I am fully aware of this occurence. I am thinking about dumping the stocks and just by the actual commodities.

Is This a Recession, and Should We Care?

i wish this was a recesson, but it looks more like stagflation to me. I know it is not like the 70's because we are not experiencing wage inflation but I believe we are going to experience I long period (2-3 years) of low growth and high inflation.

The Sorry Story of Jefferson County's Sewer Bonds

Why does Jefferson County just file for bankruptcy and default on the debt. Then issue new bonds at a fixed lower rate.

And by the way, who the hell enters into interest rate swaps with JP Morgan as the counterparty? They would never enter into an agreement that could lose them money. They only do deals with chumps like Jefferson county.