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mr freddo

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  • Are Cosi and Jamba Juice Going Extinct? [View article]

    Thanks for the insight on these two companies. As a former bakery owner I can tell you that it is very difficult to turn a profit in a bakery cafe. You need A sites to drive volume. A lesser site will not perform well. Bakeries thrive on foot traffic and have much higher food costs than a Starbucks.
    Mar 16, 2009. 03:51 AM | 5 Likes Like |Link to Comment
  • John Embry: Gold and Silver Are the Ultimate Insurance Policy [View article]
    I agree with the positive perspective on gold and silver. I also think that farmland will rise in value significantly. Too bad their isn't an ETF for farmland.
    Mar 16, 2009. 03:45 AM | 5 Likes Like |Link to Comment
  • Opportunities and Caveats in the Precious Metals Sector [View article]

    I am not a trader, there is just no way I can invest wisely on a short term basis. Your comments are helpful though from the perspective of weathering a pullback in the gold market.

    I disagree with your short term analysis. Short of manipulation, which is a problem with gold, I see gold going higher along with silver as the financial crisis enters the next phase.
    Mar 16, 2009. 03:28 AM | 6 Likes Like |Link to Comment
  • Stewart vs. Cramer: A Cheap Shot [View article]

    Did Cramer really do anything unethical or illegal? No, I don't think so? He was just wrong on a lot of stock calls but he has a lot of company in that regard. He was ahead of the Fed on the arc of this crisis.

    I believe that Cramer's mistake is to try to make a show every day. He can't help but get caught up in the moment. His advice gets skittish, short sighted, and contradictory.

    What the average investor needs to know about Cramer is that his popularity is his undoing in that his advice becomes the herd's knowledge. And as we all know, the herd gets slaughtered.
    Mar 16, 2009. 03:20 AM | 7 Likes Like |Link to Comment
  • Stewart vs. Cramer: A Period Piece [View article]

    Cramer got hammered that is for sure but he is not guilty of creating this mess. He is only guilty of being wrong. In that regard he has plenty of company. Will Jon Stewart bring on Warren Buffett and ask him why he promoted American stocks in the New York Times several months ago? That bet is down 25%.

    The far greater scandal is the bailout of AIG and where that money went. And now we find out that AIG is "obligated" to pay bonuses. They wouldn't be paying any bonuses if they were bankrupt which is where they should be except the government decided to bail them out. They ended up passing hundreds of billions to all the usual suspects, Goldman, Morgan Stanley, BofA, Merrill, Citi, and a host of European banks.

    If Stewart really wants to kick some ass, he should have Paulson on and ask him where that AIG bailout money went.
    Mar 15, 2009. 11:39 PM | 5 Likes Like |Link to Comment
  • Hedge Inflation with the Silver ETF [View article]

    I agree with the Mr. Lau that Silver will be a good play over the next year or so as inflation starts to roar. I also believe that his portfolio allocation percentages are reasonable.

    Silver coins should also be considered for emergency backup to cash in case banks close and credit cards are not operative.
    Mar 15, 2009. 11:23 PM | 8 Likes Like |Link to Comment
  • Commodities Will Lead the Recovery - Matt McCall [View article]

    Well let me see. I am long GLD, GDX, SLV, AEM, PBS, so suffice to say that I hope Mr. McCall is correct in his outlook.

    I like a little gold, say 10 to 20% to hedge against inflation. I am looking to add more oil and pick up some MOO when I have more confidence in this market. Right now I am holding positions waiting for a turnaround.

    My favorite pick to make short term money is TBT, the short treasury ETF. I don't see how interest rates can stay at their current levels given the pressure on the dollar, and the amount of US debt that must be financed.
    Mar 15, 2009. 11:08 PM | 9 Likes Like |Link to Comment
  • Treasury: Still Going Nowhere [View article]

    Mr Freddo is happy to serve as undersecretary of the treasury if needed. This fellow Geithner seems like a good chap so I don't mind giving this job a whirl.

    The job doesn't sound too challenging. Just dig in and solve the greatest financial crisis in the history of the planet Earth.

    Here is what I would do:

    1. Cut off AIG. Let them go broke. That way when they pay out their obligated bonus checks, they will all bounce.

    2. Stop taking calls from Goldman, JP Morgan, BofA, and Citi, and Morgan Stanley. If they bought CDS from AIG, well too bad. That was the bet you made fellas and it didn't work out. If you have to go bankrupt, at least it won't be with taxpayer money.

    3. Stop throwing good money after bad. The financial system has succeeded in killing itself off with derivatives. Good by.

    4. Start building the new financial system with a trillion of fresh capital to be deployed to set up 100 glass steagall type boring banks that loan money to businesses that have a growth plan that includes significant domestic employment. Each bank would start with 10 billion in capital and would be owned by taxpayers until a later date when the taxpayer equity would be sold at a profit.

    Right now Geithner is looking bad because he knows that the US has embarked down a path that can only lead to losing trillions and having nothing to show for it except a lot of rich, bailed out bankers and insurance executives.

    It is time to bite the bullet and let the system crash and burn to the ground. Let's start working on the new system.
    Mar 15, 2009. 09:07 PM | 6 Likes Like |Link to Comment
  • Global Markets in Review: Investors Shrug Aside Gloom [View article]

    First of all, happy birthday Mr. du Plessis. Thanks for the update on market performance. We finally got the bounce that many market pundits had been predicting for some time. The question is what next? Bear market bounce or bottom established for the next long bull run?

    I think we are at least 12 to 18 months away from the market bottom. I have no special skills to predict this. My estimate is based on the the lack of any current resolution to the crisis. Without a functioning financial system, and with so much delevereging still underway, and more credit defaults coming on mortgages, credit cards, commercial real estate, and corporate debt, we are not in any position as yet to say, "Well crisis solved, let's move on..."

    It took years for the consumer to run up personal debt in the amount of 130% of their annual income. (excluding first mortgages). If we assume that the consumer is now saving 10% of their income to apply to their personal balance sheets, it will still take 5 to 7 years to get down to a rate of 60%, the rate of the late 1990's.

    Inflation rewards the indebted however, so Washington economists may be figuring that a controlled surge in inflation will actually be beneficial as incomes rise and debts shrink on a relative basis. Stocks will probably rise too. In fact, things may look pretty rosy until we see that it takes a $10 bill to buy a loaf of bread.

    I think gold will be a safe haven throughout this crisis. I don't expect that gold buyers will get rich, but they may hang on to the wealth they already have.


    Mar 15, 2009. 05:19 PM | 8 Likes Like |Link to Comment
  • Credit Card Cancer [View article]

    Thanks for this very important article Peter. Credit cards have transformed our economy much like easy mortgage money transformed our stable housing market.

    Before credit cards, we wrote checks. (Yes I am that old!) If you didn't have the money, you didn't make the purchase. But with the proliferation of credit cards, you didn't have to wait. You could have it now. When you received your credit card bill, you were informed that the minimum balance required was something very reasonable so you paid the minimum balance, often not realizing that you were paying 19 or 20% interest on your new "loan."

    Credit cards and second mortgages drawn for consumptive purposes are the two primary reasons that consumer indebtedness not counting primary mortgages, went up from 60% of net income in the 90's to 130% at the beginning of the current crisis.

    The consumer has retrenched to shore up his or her balance sheet. Making more credit available to the consumer now is counterproductive and dangerous. Income and savings are the key to resolving this crisis and that will take time.

    Mar 15, 2009. 02:32 PM | 7 Likes Like |Link to Comment
  • Gold: Not a Bubble [View article]

    I agree with the author's comments on a gold bubble. While it is getting a lot of attention from counter indicators like Cramer, I don't see a bubble at this time. We haven't really started that phase of the Gold Bull Run.

    It isn't true that you need $20,000 to hold physical gold. Just find your local coin shop. Chances are that they sell American Eagle gold coins as well as other gold coins.

    I don't think investors should bet it all on gold. Use it as an insurance policy. Think about holding 10 to 20% of your portfolio in gold, silver, gold mines and some physical gold and silver.

    Disclosure: Long GDX, GLD, SLV.
    Mar 15, 2009. 01:06 PM | 5 Likes Like |Link to Comment
  • Chinese Are Likely to Halt Purchases of U.S. Treasury Debt [View article]

    We have an interesting and symbiotic relationship with China. We are the great power of the 20th century. They are the great power of the 21st.

    The Chinese are concerned with their treasuries, and will, no doubt, be diversifying into stimulus investments in their own economy, and commodity purchases around the world. This will put more pressure on treasury rates as a major buyer scales down their activity. Rates will begin to climb soon as the Treasury department continues is massive program of debt finance.

    This is one reason that I continue to believe that TBT is a good bet.
    Mar 13, 2009. 04:35 PM | 7 Likes Like |Link to Comment
  • Cramer Grilled on Jon Stewart [View article]

    That was a great show. I give Cramer credit for showing up and taking numerous shots to the head without trying to strike back.

    Cramer has a basic problem in that he is entertaining people with a show that goes on 5 days a week. It wouldn't be much of a show if he came on and said, "look people, diversify into these 5 or 10 etf's, keep contributing no matter what, and then, don't worry about or watch it. It will go up, it will go down, but it should go up over a 5 to 10 year timeframe. Thank you. End of show."

    He has to stoke it! Jump on it! Go crazy when the market is tanking, and go crazy when the market takes off. He wants action so he can create excitement and keep viewers. For the average investor, trading in and out is a recipe for disaster. But he has people who would otherwise be doing the smart thing, trading stocks and looking for short term action.

    With 2000 stocks in his head, his analysis will be trite and shallow. He will only know what is very common knowledge.

    But hats off to John Stewart for really turning the screw on Cramer and the whole bunch at CNBC. The show I think does even more damage is Fast Money. Everyone talking a mile a minute like they're doped up on meth. "Did I say sell? I mean't buy! Sell was yesterday! Buy tomorrow at the opening! Sell at 11! Buy back options at 12:30! Sell puts at 1! Long term (over the next 10 hours) this should reverse on a technical! Etcetera.

    Where is the show featuring someone like Louis Rukeyser who exhibited a calm demeanor and tried to get behind the day to day ups and downs to help investors decipher the markets?

    Every stock broker knows its easier to sell a bull market to the populace. Even though you hear a great deal about short sellers, it is not a strategy employed by the average investor. Hence the entertainment shows will always have that bias of goosing the bull. Market is up people! Tune in at 8 for tips on how you can profit! Don't miss out on the easy money! Don' t be a fool! Easy money here! When bear markets take hold, the average investor throws in the towel and goes away.


    Mar 13, 2009. 11:12 AM | 15 Likes Like |Link to Comment
  • GLD Adds 9.6 Tonnes: Watch Out, Switzerland! [View article]

    Thanks for the info on GLD. There has been a lot of speculation about how much physical gold is being held by GLD so a story like this is reassuring to people like myself who want the protection of gold as a hedge for their portfolio but are reluctant to bury treasure chests in the back yard.
    Mar 12, 2009. 10:54 PM | 4 Likes Like |Link to Comment
  • Gold: Demand Is High and Will Dictate Prices [View article]


    Yes it has been a good week so far with GLD, GDX, and SLV. I try not to get too concerned about day to day movements, but I can't help but enjoy a day like today when stocks are up and gold is up too.

    With the debasement of most of the world's currencies, it makes a great deal of sense to have some percentage of a portfolio in gold. Obviously, the best form of gold is physical gold because their is no counter party risk.

    After we have bottomed, which could be 6 months to two years away, I think that gold will rise in price as inflation starts to take off. Think of it as an inflation protected currency.
    Mar 12, 2009. 10:36 PM | 6 Likes Like |Link to Comment
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