studdy05

Jobless Recovery: Fasten Your Seatbelts

Had it not been for the PC revolution - a stroke of luck and enginuity - coming out of the 80s would have been a jobless recovery too.

Ironically, the PC and then the servers that pushed them over the Internet, is what ended up making 90's and 02 jobless recovery even worse as businesses depended on "increased productivity" from the IT workers as the CFO's shipped all the day labor overseas to pay for the few additions to the IT department. Globalization is a slang word for the tech revolution.

Mega-mergers, buyouts and companies too big to fail do nothing but crush jobs. I think it is time to re-think how big companies are allowed to become. Wal Mart crushes jobs and kills labor. What the he-- is GE anyway, a bank or a washing machine or Dateline? How many jobs were absorbed or overlapped during these mergers? ATT, its back a behemoth again. Drug companies that were in our day to day language a decade ago have been renamed 3 times over. Granted tax considerations would have to be given to the big boys to spin off and out but if you want jobs, we have to either create another bubble or reslice the pie as the wealth concentrates.

Five years ago no one knew who Goldman Sachs was unless you worked on Wall Street. Now they are Rolling Stones material. The public outcry has just begun. The Minyans have been referring to this as public acrimony. The fuel that burns Rome comes from more than just an insane fiddler one might think.

The Winners Will Be Those Who Look to Gold and Commodities

the rule of thumb most often heard is that 10% of your portfolio is to be in precious metals...while they likely wont garner huge returns, they will stay tough with you through inflation, and should be bought during deflationairy periods as this is generally when prices are the cheapest. Positions, long AUY and hold the physical in silver.

Silver Could Explode, Says Analyst

Banks shorting does not explain the lack of silver at the retail level.

Shorting is bet that the price will go down.

The author now says they have covered, yet silver continues to collapse alongside gold at spot prices. Covering should have had a long and consistant price raising effect that was not seen.

A more plausible scenario is this: Commodity hedge funds are blowing up, selling down the contracts at cheap prices due to liquidation or redemptions. This momentary push down is reflected in the current price discoveries. (A push down in prices on paper only.)

All the while, physical holders of the metals have hunkered down supplies because of the banking instability. Metal holders are often a distrusting bunch by nature, and banks teetering would tend to exacerbate this syndrome. (And for good reason.)

This fully explains the disconnect. And one or the other has to give.

Taken to another level, consider AUY. Yamana gold stock is trading at an all time low, while production of silver and gold is increasing rapidly. Contracts at COMEX are still historically high, so the stock should be rolling.

The disconnect between stock prices, spot prices, and physical has reached levels during this panic that can not be explained other than that the system appears to be heavily stressed by a number of extrodinary factors. It is too simple to say it is market manipulation by banks.

Postions: Long AUY, long silver bullion

Hoping Regions Financial Runs Up Again

The otherside of the coin is, if you are playing it for a quick trade on the bailout news, then you can rest assured more SQUEEZE is left in that puffy RF charmin. Me contridicting myself is sorta like this market: maddening.

Hoping Regions Financial Runs Up Again

RF had one the largest % of shorts (as of last Wednesday before the rules changed) with about 12% of the available float in play. Was thinking about playing RF myself like DUDE above, cause I bank there and am generally impressed, but that short % spooked me. Of course we dont know how much of that run up to near 20 he mentioned was short covering...I suspect a lot...but even so I will pass. Shorts generally are smarter than the average Joe.

The Artificial Inflation of Stock Prices, Due to the Short Selling Ban

Shorting adds liquidity in many ways.

You forget that they have to BUY back the stock at some point to actually make money. No one shorts to zero. Thus, as a stock declines and you take profits, you actually support the price in the upwards direction at some point.

Changing the rules in the middle of the game generally backfires.

Take what the market gives you. Looks like we have an artificial rally, so it's good for a trade. Buy the banks till the restrictions come off, then short the hell out of them. Opportunity of a lifetime!