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mr freddo

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  • Next Oil Crisis Window Just Two and a Half Years Away [View article]
    I like svkoho's idea of reigning in the speculators. Is it possible? Thankfully, we don't have to buy oxygen (yet).
    Apr 3 04:19 PM | 2 Likes Like |Link to Comment
  • Precious Metals: The Only Sector with a Shot at Success [View article]
    I am with the author on gold. I am wondering why it continues to be stuck in a range and is not breaking out to new highs. I have a sense that it is being knocked down on a periodic basis by some major player (the Fed?) but that is just IMHO.
    Mar 31 04:29 PM | 3 Likes Like |Link to Comment
  • Exclusive: Big Banks' Recent Profitability Due to AIG Scam? [View article]
    Why the big fuss? Does this really surprise anyone?

    Banks are in a desperate situation. The government is in favor of improving their financial situation. That's why the Fed has moved its key rate to 0% so that banks can raise their operating profits and improve their capital position.

    We saw the chairman of AIG testify that it still has $1.6 trillion of derivatives to unwind, down from $2.7 trillion. The longer it takes to unwind these positions, the more risk AIG has of losing the people who understand the positions. After all, would you want to work for AIG?

    So, yes, they are unwinding as quickly as possible at fire sale prices. And banks are benefiting. And Treasury knows about it. And the taxpayer is paying for it through AIG.

    But we already knew all of this. Propping up AIG means that AIG is able to meet its financial obligations to other banks and insurance companies. We finally were trusted with the list of payments from AIG and we already know Goldman Sachs received $13 billion.

    If AIG had been allowed to fail, it may have caused the failure of countless other financial institutions. By coming to the rescue of AIG, the US Govt was able to make good on AIG's bets and pass money to banks who are suffering through a capital crisis.

    Obama had a choice to nationalize or to go with the existing structure and try to pump life back into it. He has chosen the second route. I hope he succeeds. I am much happier when my stocks go up.
    Mar 31 04:19 PM | 5 Likes Like |Link to Comment
  • The AIG Death Star [View article]
    If a 40 unit hospital costs $25 million, we could have built upwards of 10,000 hospitals around the world for the $200 billion we have given to AIG.

    Imagine that. Here is your new hospital from the people of the United States. It is a gift to you. Then imagine 10,000 US made and built hospitals in every country on earth. A gesture like that would save millions of people who would otherwise die. A gesture like that might change history.

    But no, we are dreaming of course of impossible things. It is a strange world where we don't think too much at all about shoveling $200 billion to an insurance company that deals in paper, while building 10,000 hospitals around the world for the same amount of money sounds ridiculous.
    Mar 31 03:43 PM | 2 Likes Like |Link to Comment
  • We're in Danger of Being Blinded by Market Bottom Predictions [View article]
    We are Americans.

    What that means is that the idea that will save us and propel us prosperously into the future may not have been thought yet.

    I see United States biotech companies with stateside manufacturing dominating the world biotech industry for years into the future.

    Health is a huge area of incredible potential. I see health care improvements that will make a dramatic difference for all families and especially the elderly. New elder care concepts will continue to spring up and be successful. Instead of operating on 19th century equipment and protocol, hospitals will use patient centric systems that include automated patient history, care history, prescription history, and other relevant data.

    When we do recover and triumphantly return to world leadership, it will hopefully be with a memory and a commitment not to repeat the past. More regulation will be required and a new compensation system on Wall Street will reward long term success.

    I take your point about our consumer oriented system that drove us to gobble up scarce resources. Especially at Christmas time, we are whipped into a frenzy of gift buying. What we have learned to date from this crisis is that we don't need a great deal of what we are used to consuming and we can, in fact, do without.

    It doesn't have to be all grim though. I had a great deal of fun recently, when I installed several solar lights at strategic locations around my house. They are set off by sensor and they work quite well, all powered by the sun. I can turn my front lights off and save electricity. Solar lighting is in its infancy. I can't wait to light up my entire yard and there really isn't a lot of great stuff on the market yet for this. Entrepreneurs get on this one.

    Thanks for a thought provoking article.
    Mar 26 08:49 PM | 4 Likes Like |Link to Comment
  • Gold's Strength Should Last Years - J.P. Morgan [View article]

    He maintains a long term price of $750 while predicting several years of "strength" in the $950 to $1050 range. The only way he can be wrong is if gold rockets to $1500.

    I am anticipating that gold will sell off on good market days and rise on bad market days for the short run. As conditions improve, there will be sellers of gold for the lure of securities. But as the economy recovers, inflation will spark. The first evidence of inflation will cause a rush into gold. It will surge to new highs in October and finish the year at $1200.
    Mar 24 04:28 PM | 6 Likes Like |Link to Comment
  • Why I Think Paul Krugman Is Wrong [View article]
    Paul Krugman is a professor at Princeton University, not Harvard.

    Mar 23 11:11 AM | 11 Likes Like |Link to Comment
  • Don't Ignore Bernanke's Bell [View article]
    I don't think the outcome is as plain as you describe it Peter. Right now we are trapped in a deflationary death spiral. Yes the Fed has just pushed the money throttle to the limit. When you are stalled and spiraling downward, do you really care about miles per gallon?

    Ben's theory is to get the heart of the economy pumping again and worry about inflation later. His decision to lower interest rates and make mortgages cheaper is a direct assault on the housing market slump.

    He believes the crisis won't end until real estate prices turn around.
    If he succeeds in establishing a bottom, the endless flow of mortgage defaults will slow and the mortgage backed securities market would stabilize bringing an end to the endless stream of write-offs at least for this loan class.

    Turn around real estate and you turn around the stock market, turn around the stock market and you go a long way to making the consumer more confident.

    This much cash sloshing around is bound to be inflationary once our economy springs to life. Ben figures that is a problem he will tackle down the road. Inflation, after all, favors the indebted and the US GOVT owes more than any other entity in the world, therefore has the most to gain from inflation.

    Mar 21 06:10 PM | 14 Likes Like |Link to Comment
  • How to Not Pay the AIG Bonuses [View article]
    Hey Chris B, nice call.
    Mar 19 08:04 PM | 2 Likes Like |Link to Comment
  • Gold, T-Bonds, and Russia's Tu-160 Bombers [View article]

    Countrycuz, I started growing tomatoes this year as well. I also stocked up on food, water, wine and vodka. If nothing else, this gives me a happy feeling.

    As all the currencies of the world race to debase, (catchy eh?) gold, silver, and commodities will surge.
    Mar 19 07:52 PM | 4 Likes Like |Link to Comment
  • If the Fed Is Printing Money, I'm Buying Junior Gold Miners [View article]
    Thanks for the recommendations! I have GLD and GDX but have been interested in taking some speculative positions in the juniors as they can jump so dramatically. I will be checking out these stocks and look to get in soon if they pass due diligence.
    Mar 19 07:42 PM | 3 Likes Like |Link to Comment
  • What the Fed's Announcement Means for Gold [View article]
    Bearfund, thanks for the review of TIPS. I was thinking about moving into TIPS as a safe haven investment but your analysis gives me pause.

    The Fed is more terrified of deflation than inflation. Gold is a good bet over the near term after the Fed move. Prior to that, I think Gold was ready to fall back.

    I moved into GLD, GDX, and SLV a while ago and now am happy that I did. I think we all should take a flyer now on some solid junior minor stocks. If inflation starts to roar, these stocks could rise dramatically.

    But remember, there are some very smart people out there who are still not convinced that we are headed for inflation (John Maudlin for one). Stay tuned...
    Mar 19 07:37 PM | 4 Likes Like |Link to Comment
  • The Battle Between Banks and Bullion [View article]
    I agree with Mr. Perrego. Gold is being used as an inflation hedge and a flight to safety instrument. In a deflationary environment, gold has not been stellar, but it has held value better than other asset classes. The inflationary move by the Fed yesterday has gold and gold stocks flying today.

    Disclosure: Long GLD, GDX, SLV
    Mar 19 11:30 AM | 4 Likes Like |Link to Comment
  • The Fed Must Be Crazy [View article]
    The Fed made a huge move today to reduce interest rates and thereby stimulate the housing market. Bernanke knows that we must get the housing market turned around before the economy can stabilize. He is making a bold move that may help us muddle through this crisis.

    As Tetrapod mentioned, this is all inflationary but inflation is preferable to deflation for those who are in debt. I think that inflation will rise but the Fed believes that they can attack that problem down the road once a recovery has begun.

    Gold rallied furiously today after a huge drop before the announcement so gold buyers must be seeing this move as inflationary.

    Personally, I got out of TBT. It will be a good bet down the road but for now, the old adage "don't fight the Fed" is a good advice.
    Mar 18 07:55 PM | 9 Likes Like |Link to Comment
  • Our Economic Temple Is Not Structurally Sound [View article]
    This is a very thought provoking article. As Mr. Lounsbury mentions, the point may be to sit and think about it for a while so we can start to focus on the cause rather than the symptom.

    It reminds me of Churchill's quote: " A lie gets half way around the world before the truth has a chance to get its pants on."

    We get excited into a lather about bailouts and bonuses without really getting to the core of the problem. But what is the core of the problem? Greed? Capitalism? Core values?

    Before this meltdown, we were prodded to spend, consume, and borrow in pursuit of the good life. Just in light of the environmental damage that our consumption was and is exacting on the planet, this system was not sustainable over the long run even without a financial crisis.

    Another quote this time from the Rolling Stones: "You can't always get what you want, but if you try sometime, you might find, you get what you need."

    Communism was essentially an effort to get to the core of human society's problems and fix them. The cause of human suffering was determined to be the capitalist philosophy with its inherent exploitation of the worker. As we know, that experiment did not work out so well. I guess what that lesson teaches us is, be careful, things can always get worse.

    Do we all need a dose of Zen? Is it time to question our core values? We put the wealth holders on a pedestal. The rich, the famous, the celebrities are worshipped. We overlook the shoe cobbler, the vacuum repair man, the grocer, the farmer, the priest. the teacher, the engineer.

    Make things, grow things, invent things. Work. Save. Raise children with values. Reduce consumption. Read, learn. grow.

    On that note, it's time to go for a nice long walk on a beautiful day. Thanks again for the article.
    Mar 18 04:31 PM | 4 Likes Like |Link to Comment
COMMENTS STATS
306 Comments
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