AuGod!

Markets Aren't as Benign as They Look

Yea, I liked Tim's thoughts. To rant a little, bankers are more a symptom than a cause although one can clearly see the knock-on effect of unrestrained greed and avarice. The reason why financial products, arcane and mysterious, took root and multiplied is because there was (and is) a market. Why? Because it was profitable. That market has since diminished with those profits and taken a lot of investors' cash and liquified assets to money heaven with it. So it is for exotic financial products, so it is with everything with a price tag when inventories vastly exceed demand capacity. And that includes jobs for Harvard MBAs and "Brownian motion" and/or "Levy processes" rocket scientist "quants" who grew stuff theoretically out of moondust . Now growing green beans and other cash crops in your own garden is all the economics one needs to know and all one needs to learn about banking and exotics also. In other words increase your beans and diminish your quants. As for the general market, I believe the same logic applies. To FIRE your financial advisor if he/she wants you to "buy" instead of "sell" is your decision. Stoney silence might do if you are a sensitive sort and concerned about his/her feelings and don't mind losing another 30% between September 09 and July 010..

Prime Mortgages Are Also Going Sour

Bottomed? I doubt it. But if the objective is more than to buy low and sell high, then there are "homes" for families to buy and in which to live and be happy. If that is still your American dream then go for it if you have money, stable employment and can ride out a further drop. Any perceived loss through tanking values may only be temporary and is, in any case, "unrealized" if you are not compelled to sell. To those who are in it purely for speculation expecting to flip a condo or home for a quick profit, I don't care what happens to you.

A Pork for Pork Program?

There is likely a pork shortage among Christians (Coptics) in Egypt, the latest mass culling of pigs having recently taken place there as a result of Swine Flu concerns, much to the chagrin of the Coptics who are the traditional purveyors and buyers of pork in that Muslim country. My point is that markets exist and should be addressed if there is a pork glut in the U.S. In a world, which is short of food it is hard for me to see why over capacity in anything edible can't be directed strategically and on favorable terms. Maybe the U.S. government could buy any surplus and add it to foreign aid - in places where it is not offensive to the locals to do so of course.

Thursday Outlook: Commodities, Global Markets

This may be the harbinger of policies which are more comprehensively bad.

Major Market Averages Likely to Move Sideways for Years to Come

You can't bounce until you hit bottom. There is a there there but we haven't found it yet. In the end, it may be that a new economy will arise first in the U.S. making this century better than it began for "America". Post industrial America, fecund with promise, sustainable organic agriculture, water conservation, green housing, cleaner air and maybe not so much into world domination. Now those and more that add not subtract from quality of life are worthy American values.

Two Important Op-Editorials from Investing Giants

I don't blame brokers, banks or government. I do lay proportional blame on bad brokers, greedy evil banksters and poor government. Of course we folks have to deal with risk and accept consequences for our actions. But our brokers should be held equally responsible when they screw us to the wall. We should not and must not automatically assume our banker is our friend - at best he/she is a "fair-weather friend". As for government, maybe we do get the government we deserve. If our government was pristine and perfect, what would that look like? Something a bit like now I expect. As for Warren Buffett and Charles Schwab, neither occupy the same money universe or obey the same laws of investment physics as most of us. Good for them. The rest of us must soldier on, prepared as best we can and ever mindful that we are prey animals to a certain order of creation.

Step Two of a Housing Bottom?

New houses built probably have a life expectancy of 25 years, then they will fall apart - planned obsolescence like GM automobiles (reduce a car's life by 90%). It is not just debt driven but a disposable economy where little is built and even less is written in stone. The ideal business model like much governmental policy is to do something safe in the moral hazard that neither the originators nor the first time buyers will be around when the roofs, wheels and doors fall off any given product, service or policy. The infrastructure is crumbling, permanent jobs are becoming more like 5 year contracts max and consumers are wisely sticking to basics knowing they may as well "waste not" so to "want not". A lesson perhaps too late for the learning. Those consumers, once the heart of American wealth representing the goose which laid the golden egg - are now butchered by predatorial products and policies propagated by responsible and well paid people - false patriots who really did and do know better. Meanwhile the wheels keep on turning and so do questionable stats and associated numbers. Forgive the rant. The whole notion of green shoots looks bogus to me. I will gladly acknowledge green shoots when real employment growth is robust and housing prices stabilize. The structural impediments to that are obvious and metastasized.

Canadian Dollar Rattled by Shanghai Meltdown, Interventionist Talk

Gary, I believe it is Kidd Creek Mine not Kidds Creek Mine and the Canadian dollar spot gold at 12:53 ugust 18, 2009 is CD1035.58 bid.

How to Tell a Real Economic Recovery

I have also experienced the virus warning pop-up and the screen shows "scan running". I immediately exit my browser, run my own scans and then reboot. It is a pain but necessary I think. I never stay on the pop-up page long enough to learn all about it. Who are they? Why are they able to hi-jack us this way? It only happens at S.A so far.

Regarding Edward's article, when he states in his concluding remarks: " Weak retail and employment data, on the other hand, means this rally is about to hit a brick wall." that says it all for me.

Healthcare ETFs Headed for Life Support?

Insurers can prevail as their market dictates. If there is demand for their innovative products and services, in whatever form they eventually take, then they will do well enough, even if their cherry picking numbers (scale, volume, velocity) are not at previous highs. Is that not the American way? What is not the American way is a vast bureaucracy likened by one commenter as a DMV in their place destroying that market altogether via government monopoly.

Where Is Support?

Is there an inevitable correlation between Spot gold and the S&P500? I see no causal connection but it is sometimes tempting to seek one.

Run on the Dollar: What It Could Mean for the Yen

Regarding QE and 0% interest I also doubt that those policies are temporary or in practical terms temporary because I am after all rather temporary as are all humans. Gold and silver bullion will take a beating along with the general markets but should rise amid the concommitant inflation which is sure to happen. As for hoarding fiat, better, I think, to stay with physical gold. Also buy a good farm if you have the scratch or an interest in one with hardy and industrious people you like and trust.

Buffett's Recent Portfolio Changes: What's the Message?

Most know Warren E. Buffett as one of the world's most savy investors, and recently (Sept. 08) we can look to Goldman Sachs for some justification for that. His position in Goldman is probably now worth $9.1 billion, or about $4.1 billion more than what he paid 11 or so months ago. An Assistant Professor of Finance Linus Wilson, (University of Louisiana at Lafayette) calculated, Buffett's annualized return would be 111 percent if he sold his Goldman shares, which are held by his Berkshire Hathaway firm. It was noted that "in comparison, the federal government received a 23 percent annualized return for its Goldman investment." Goldman sought a cash infusion from Buffett last September for which he (Berkshire) received perpetual preferred shares in Goldman, which pay a 10 percent annual dividend, or $500 million a year. My source, widely read and publicly available, claimed that "Berkshire Hathaway also received warrants to buy $5 billion in common stock at a strike price of $115 a share, which could be used at any time within five years of the initial investment." And Professor Wilson's valuation included "a $5.5 billion valuation to Buffett's preferred shares and $3.2 billion to the warrants." It was said that Berkshire's reinvested dividends from the Goldman stake were worth about $400 million. The analysis was based on Goldman's closing share price of $160.46 in late July 2009. Now ladies and gentlemen, I know this is one example and that he has had his ups and downs but be fair. Can he still cook or can't he? Just a question with no political undertones.

Which Banks Are More Risky, The Largest EU or U.S. Banks?

The "too big to fail" banks on either side of the Atlantic are NOT out of the woods yet. In terms of risk exposure, if you turned them all upside down, they would all look like sisters. The best of the best big banks are only as strong as the weakest link on their balance sheets just like the rest of us. As for off-balance sheet items, well, who really knows?

Insiders Continue to Sell, Sell, Sell

For every sale there is a buyer and if a widget owner and major shareholder is selling shares it means they are probably not selling enough widgets. It is the "insiders" equivalent to a stop-loss only more prescient - the rich man's "rumour" if you will. This is not new. To reference an Historical anecdote, "there's a sucker born every minute and two born to take him". PT Barnum's word say it all in this context. You remember this? Enjoy what is left of the summer. The Fall will come soon enough.