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Roger Knights

Roger Knights
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  • The Worst Case Scenario (Someone Has to Say It) [View article]
    You can see why people rarely "think outside the box"--because this is what unblinkered observation notices--the abyss. IOW, "The basis of optimism is sheer terror" (Wilde).
    May 3 09:24 AM | 50 Likes Like |Link to Comment
  • Coming Soon: Banking Crisis of Historic Proportions [View article]
    PS: If the recession is over, the depression is just getting started.
    Aug 16 06:20 AM | 41 Likes Like |Link to Comment
  • Coming Soon: Banking Crisis of Historic Proportions [View article]
    The ECRI optimists are treating this as an ordinary business recession--a mere hiccup--and ignoring the anchor of debt-coming-due and banking leverage = falling dominoes that will upset their applecart.
    Aug 16 06:09 AM | 38 Likes Like |Link to Comment
  • Marc Faber: Buy a Machine Gun [View article]
    Here's his wittiest remark (at the start): he called governmental stimulus injections "The crack of boom." Here is another snippet:

    Marc Faber: I don’t think they [governments] will wind it back [their stimulus] voluntarily. I think one stimulus will lead to the next one and to money printing, and so in five to ten years’ time the real crisis will break out when the whole system collapses. That will be The End [emphasized].
    Ben Bernanke is like a ship captain. He has warning signs, he sails the ship, there’s a storm coming, he disregards any warning signals, he sinks the ship, a thousand passengers drown, he saves the crew in his control tower, five officers and himself in a lifeboat, then gets a medal for bravery for saving five people. That’s Wall Street, the five people. The rest of the country’s basically bankrupt.

    Who created the crisis? Mr. Greenspan and Mr. Bernanke by letting credit growth get out of hand. And that everyone could see.
    Sep 4 07:29 AM | 34 Likes Like |Link to Comment
  • Who Is Buying Gold, And Why Is Gold Volatility So Low? [View article]
    "The prospective buyers, namely the central banks, are so much larger than the gold market that they avoid actions which might cause price spikes."

    Also, there's a psychological factor at work. For decades the CBs sold gold or stood on the sidelines. If their officials were to "do a 180" and become aggressive buyers, their supervisors and colleagues might ask, "You're a bit 'slow on the uptake,' aren't you? Why didn't you buy when the price was low? Why were you doing nothing or selling instead?" By making only a gradual shift towards buying, they avoid making a stark, noteworthy contrast with their prior behavior. And they can explain away a small shift as merely being a prudent re-balancing in light of the difficulties of the euro and the dollar.

    Their first buys are thus trial balloons. If they don't draw criticism, or not much, the CB buyers will be emboldened to step up the pace--especially if other CBs do the same. There is a strong herd instinct among devotees of conventional wisdom, because it feels safer, and because being a contrarian CBer draws domestic criticism. CB buying has barely got into first gear.
    Jun 20 05:56 AM | 32 Likes Like |Link to Comment
  • Why Apple's iTouch Tablet Will Become Its Flagship Product [View article]
    "Every app in the App-Store is currently developed to fit on the typical 3.5 inch touch-screen, not a 10 in."

    I've read that Apple's guidelines for its ap developers advised them to write their code in a size-independent manner, presumably through an API that adjusts the ap's virtual screen to whatever size actual screen the ap is running on. It would have been silly of Apple not to have done this, and unthinkable for Jobs et al. not to have anticipated it.
    Jul 24 08:43 AM | 29 Likes Like |Link to Comment
  • Inflation Not a Valid Reason to Own Gold [View article]
    "However, because of the decisive actions taken by global leaders, none of these worst case fears have materialized. The banking system didn’t collapse. We avoided a Great Depression. The eurozone supported one another and brought stability to the region."

    All they've done is kick the can down the road--and they're running out of road. They're just making the collapse, when it comes, even worse than it need be. As Faber says, approximately, "They can put off the crisis for many years, but it will end badly."
    Nov 23 06:56 AM | 27 Likes Like |Link to Comment
  • The Coming Consequences of Banking Fraud [View article]
    "transactions that have been kept secret from the world, and that will have severe and negative consequences"

    The Portrait of Dorian Grey--hidden in the attic.
    Sep 9 10:42 AM | 27 Likes Like |Link to Comment
  • Do You Believe Banks Are Recovering? (Part 2) [View article]
    "I have a feeling these 19 banks are going to need to study a little harder for their test. Professor Geithner is giving them an open book take home exam and gave them the answers."

    No bank left behind.
    May 1 06:07 AM | 25 Likes Like |Link to Comment
  • Will Stocks Rally on Bad News This Week? [View article]
    "If the markets price in all of the expected negativity beforehand, and the actual data is no worse than expected, stocks will be primed for an oversold bounce."

    OTOH, if it IS worse, as David Rosenberg expects, there could be a waterfall drop, because it would knock the hope-props out from under the market.
    Aug 22 10:20 AM | 23 Likes Like |Link to Comment
  • How the Gold Game Could End [View article]
    Gold has fallen recently as stocks and bonds, the other end of the see-saw, have risen. But there's so much really bad news in the pipeline for those two asset classes that a turnabout is in the cards: A house of cards cannot endure an earthquake. When that happens, gold will resume its rise.
    Apr 19 09:30 AM | 23 Likes Like |Link to Comment
  • Something Spooky About the Way This Rally Is Unfolding [View article]
    "if I look at a chart and I really think it looks bullish, I will sometimes turn around and look at it upside-down; if in that position I think it really looks bullish too, then I know that what I’m seeing is actually what I want to see."

    "I don’t feel right, so one thing I am going to do is to cut my equity positions down. If that doesn’t make me feel less disquieted, maybe I’ll try increasing them."

    Jesse Livermore did something like that. If he was going to short a stock, he'd buy some of it and wait a day or a few days. If unsure, he'd buy more. If he didn't feel worried when holding the stock, he wouldn't short it. (And he employed the reverse procedure when intending to go long.)
    Feb 20 12:56 AM | 21 Likes Like |Link to Comment
  • Gold Enters the 'Mania' Stage [View article]
    The Chinese central bank will buy on dips, and so will other Asian central banks. European central banks have cut way down on their selling. (Maybe the euro-crisis will cause some forced selling, though.) Gold is regaining its respectability in mainstream / bankers' circles. They now realize or suspect that paper backed by governmental guarantees is NOT as good as gold. They are the ones who set the price, because their reserves dwarf those of other market participants.
    May 13 11:15 AM | 21 Likes Like |Link to Comment
  • Tipping Point for U.S. Treasuries? [View article]
    "It seems to me that, like many potential crises, people are not allowing themselves to accept the facts because of the magnitude of the consequences."

    You've nailed it--Denial.
    Apr 22 09:05 AM | 21 Likes Like |Link to Comment
  • Solazyme Advances Its Agenda On Multiple Fronts [View article]
    "This time he reopens the door to biofuels, even though he has disclaimed this was Solazyme's intended market several times in the recent past when confronted with the insurmountable barriers of EROI and power density and land and water footprint in previous rebuttals."

    It was Hitachi who brought in the biofuel business--KQ could hardly avoid not commenting on it. Hitachi found Solazyme's product superior to ten other biofuels. It's not outside the realm of possibility that it would pay a premium price for a high-quality fuel that is used in an expensive, highly stressed diesel engine.

    "Let's consider Encapso for a minute and apply some critical thinking. It's purpose is to prevent the loss of drilling mud, . . . ."

    Nope, it's for targeted lubrication. I believe Solazyme has or may have a sealant that is designed to reduce the loss of mud, but it's something different.

    "Even though another share offering just diluted shares . . ."

    The value of the company has been increased by as much or more than the value of each share has been diluted. The money hasn't gone down an unproductive rathole.

    "To bring in Goldman Sachs as if they represent anyone's interest but their own is laughable as a justification for buying stock."

    GS has an interest in delivering bargains to its clients. It thinks Solazyme is a bargain and that pushing it will endear it to its clients. This will also help Solazyme. Win/win.

    ". . . and even though the Moema opening continues to be inexplicably delayed, . . . ."

    Management said Moema would be opened in Q1 or perhaps Q2. A bigshot at the Peoria plant said in a March interview that Moema would open in April. For all we know, it's open already, but mgt. doesn't want to announce the opening until the early May conference call, when it can give a more fleshed-out progress report.

    "my guess is that we got here because Solazyme has been scratching their heads about how to dispose of the soggy solid biomass by-product that is left after the lipids are removed from their micro-algae . . . ."

    Amusing, but the point of Encapso is that the oils are NOT removed--that only happens when there is pressure applied to them at friction points in the drilling process.

    "Solazyme will have to invest the energy to dehydrate their algae by-product before selling and shipping, and that brings us back to EROI."

    Solazyme has said it anticipates margins of 50% on the product. Since it has such high value to its customers, the market can bear a high price--whatever price Solazyme needs to charge to attain its 50% margin.

    "In my view, Solazyme possesses technology to very-expensively process commercial bulk sugar into commercial bulk oils in rather small batches, . . . ."

    Solazyme's algal flour and algal milk use the entire unprocessed (or lightly processed) output--and can be sold in large quantities. Flour and milk are bulk items.

    "Let's . . . apply some critical thinking."

    Apr 21 12:47 PM | 20 Likes Like |Link to Comment