huskerbob

Where Does the Gold ETF Get Its Gold?

First off, thanks for another informative article. You provide a lot of good information on Seeking Alpha.
But second, I don't think this article will reassure anyone wary of GLD. You made a phone call and they said everything was fine? OK, good enough for you. but it would probably be better if they just allowed an effective audit, which is another reason people don't trust GLD.
Please read Trace Mayer's article on GLD. A quote: "Under the GLD prospectus and latest 10-K it appears that the Trust neither needs to own actual physical gold that constitutes atomic number 79 nor allow their auditors to see and touch the undefined ‘investment in gold’."

Why Goldman Sachs Should Return Its TARP Money

I doubt that goldman sachs relationship with our government has been so stormy, as you say. With their former CEO running Treasury? Are you kidding?
They have their billions funneled through AIG, and will now get to play with money leveraged by tax dollars. I don't think they will "put pressure on other firms to get healthy fast", it will put pressure on them to hire more and better connected lobbyists. GS got better because it's hogging all the medicine.

China Wants to Ditch the Dollar

We have two parallel currencies in the US right now - the US mint makes gold and silver coins that serve as US tender, and the Fed makes dollars from rags, ink, and electrons.
Simply fulfill the mandate of the Constitution and mint coins for anyone who brings metal to the mint. No need to abolish or start a new currency, just let them compete. When times are sweet, the metal loses its luster, and in times like these it gets its shine back. Just mint enough to keep up with demand for crying out loud! I'm pretty sure that gold and silver would be accepted anywhere.

China Wants to Ditch the Dollar

Uh, guys, a renminbe float might not float your boat. Ha! I just came up with that.
If China floats their currency, they won't be needing to buy all our treasury debt. Then what happens? I guess we could look forward to our myopic state and local governments selling off infrastructure to the Chinese to get hard currency.
Our government wants China to float their currency about as much as they want to find Bin Laden.

The Good Side of Geithner's Plan: 'Price Discovery'

We who are not economists like to call this distorted price discovery. We are giving the private sector cheap money to use as leverage, much like the earlier price distortions (bubbles) caused in real estate, commodities, etc. The price discovered will be different than if the investors were risking only their own money. So is it truly price discovery?
If you think trying to reinflate a bubble is a good idea, then I can see why you like the plan.

After today's 12%-or-so rally in bank stocks it may be time to unload, BofA analyst Richard Bernstein says. Soaking up toxic assets only delays the eventuality of consolidation, he says, and the government won't be able to prop-up sickly assets forever.

Bob Lobb, I'm confused (insert joke here). This plan only covers the cream of the crop, recently downgraded and current AAA securities? So what is the plan to deal with all the toxic junk the banks are sitting on that no one wants to buy?
As far as commercial property, I thought that that shoe had yet to fall. And isn't Geithner including "legacy" securities - not certain those fit your definition of "cream of the crop".
No one is saying that the investors might not make out on this deal - just that the risk to tax dollars seems excessive. This plan fails for the banks unless the buyers overpay for the assets. Then the plan fails taxpayers, but that's been the plan all along.

Roubini and Other Doomsayers Will Be Proven Wrong

Your article reminds me of a quote from F. Scott Fitzgerald: "The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function." Take it as a compliment.
"As long as the Fed and the government are doing the right things in ensuring accountability, transparency, and no excessive leveraging in the markets, I shall have no worry for a new bubble."
Given this caveat, I have trouble understanding your optimism. Did someone add this to your article without your knowledge?
All of the bad actors are being bailed out. Massive malinvestment due to easy credit caused this mess, and now the same actors are being bailed out with the idea that they will extend more cheap credit!
I have not read many articles praising the transparency of the bailout so far. Geithner's new plan is a leveraged fund. Who is being held accountable (besides the taxpayers)?
Accountability? No.
Transparency? No.
No excessive leveraging? No. Especially when you consider that it's taxpayer money being put at risk.
Your "cheer cheer spiral" is a few more years down the road, but thanks for the happy thoughts.

Turning Toxic Assets into Gold

Whoops! You forgot to mention that Mike also owns a condo in Miami, 4 in Phoenix, and 12 in Las Vegas (stated income loans don't you know).
He stopped paying on 5 of them 4 years ago, but these mortgages can be resurrected for sale, along with any other non performing junk the banks can dig up.
It seems highly unlikely that the US government is the only entity to correctly see the value of these products. The whole point of this exercise is to overpay for the assets. Private investors will buy on their own for the right price, but why should the banks take a big loss? The only loser should be the middle class, so that's what we're gonna do.
I guess the value is such a slam dunk, we are going to make no recourse loans with the taxpayer's money!
These assets aren't toxic, just overpriced.
Why not just do the same thing for homeowners? Let the government use your tax dollars to help investors buy your neighbor's house at 2006 prices. It's just as stupid, and it will buy a lot of votes.

Li-ion Batteries and How Cheap Beat Cool in the Chevy Volt

Thanks for an informative article. Good information and conclusion. Rising lithium prices add one more disadvantage.
I would hazard to guess that widespread adoption of electric and hybrid vehicles will only occur with rising oil prices. Consumers will be making a value choice as opposed to an environmentally conscious one. Cost per mile driven may become a selling point much as horsepower was just recently.

Paying the AIG Bonuses - The Alternative Is Worse

Roy McKoi makes a good point: how smart do you need to be to writes checks to the banks on the winning side of these contracts? Goldman Sachs is getting paid 100%.
Please get these bonuses rescinded so we can move on to focus on more egregious problems. Frank and friends are just setting AIGer's up so the hoi polloi can vent their anger at someone other than congress or GS. In 1930's Germany the politicians blamed the Jews. Our gang is no less scrupulous when it comes to finding a scapegoat. When this blows over they will villify someone else.

The Geithner Plan FAQ

Thanks for selling this idea Brad! The only way this plan won't work is because " we are then in a world in which the only things that have value are bottled water, sewing needles, and ammunition."
Run and tell Geithner quick, so he can hedge with a trillion dollar water, needle, and ammo fund. Taxpayer's can only win!
Thank goodness you are here to set the record straight. I'm glad the government is buying these assets before other savvy buyers snap them up! My only regret is that I can't get in on the action, "Because they stand to make a fortune when markets recover or when the acquired toxic assets are held to maturity".
Some fools are trying to convince people that this is just a way to leave taxpayers holding the bag. Who could be so stupid?

Could the government let AIG (AIG) fail? Hard to say for sure without the facts, Baseline Scenario's James Kwak says. "The government by now has had six months to study the books of AIG and its major domestic counterparties. People are no longer willing to take it on faith that the future of the free world depends on an implicit blanket guarantee for AIG. At least we want to see some evidence."

Depends on whether they have laundered enough money to Paulson Sachs yet.

10 Reasons Why We Still Haven't Hit Bottom

Great article, many good points.
On point #2, the Fed can't fix liquidity on the lending side, they can only make money so cheap that they give it away to anyone with a pulse. Which is partially how we reached this point. Maybe the market will bottom when the government, not the investor, capitulates.

The Toxic Assets Plan - Yes, It's a Subsidy

Lots of excellent articles popping up everywhere, Yves Smith included.
However, more often than "subsidy", words such as "looting", "criminal", and "money-laundering" are being bandied about.
The problem with Mr. Allen's plan above is the assumption that the government cares one whit about saving taxpayers from any undue burden. Why jump through a lot of hoops when Paulson Sachs and friends can just take whatever they want? It's not about saving the taxpayers or main street or even the economy. It's about getting bankers getting paid.
BTW, while members of congress urge AIGer's to commit seppuku, don't ever expect to hear a peep of outrage in the MSM about any bonuses paid at GS, even though they might be the top beneficiary of taxpayer money.

Dollar, Gold and Oil: Gauging the Turn

The dollar gets weaker, so commodities and the general market go up. So what is gained? They are going up as the dollar goes down. If you hold dollars, where does that get you?
Not certain why anyone thinks destroying our currency is some kind of accomplishment. Unless you hold a lot of debt. Then it would be pretty handy!
Enjoy your Dow 30,000, as you sip your $20 Coke and enjoy tunes on your $5,000 i-pod.


On Mar 21 06:05 PM Minlita wrote:

> In an attempt to prevent a Deflation the government is creating an
> Inflationary catalyst ( not bad in an environment of deflation)
> for the rise in oil price (priced in dollars) by printing money that
> causes a fall in the US dollar.
> Commodities in general, including oil, should see a boost by the
> Fed’s policy, stock market would likely rise once commodities started
> going up.