Mel Shapiro

Nouriel Roubini, One on One: More Doom and Gloom

The so called "risky assets," gold, oil, copper, etc., are being pushed-up by excess liquidity. Yes. This the classic definition of inflation.... to few goods, chased by too much cash. This time however, much of the chasing is being done by the likes of the Chinese, with their 1.3 trillion, and growing, stockpile of US Dollars, not just by computer-screen gamblers.The Chinese buy gold and oil, and other commodities, on the dips. They are not "speculating," but building inventory which, over the long haul, they know they'll need. They are the end users of these commodities. There may be softness in prices along the way, but not the "crash" proffered by Dr. Roubini - at least not in gold and oil and some others, and not for any protracted period.

The Arithmetic of Gold: Why Its Price Has No Ceiling

In reality it doesn't take "an infinite number of buyers AND an infinite amount of money" to drive the price of commodities. Only an infinite amount of money would do the trick. "An infinite amount" of money can be created simply by changing the number printed on the corner of a piece of paper. It's been done before.... several times.


On Oct 07 10:48 AM Macro_Man wrote:

> It has no ceiling only if there is an infinite amount of buyers and
> an infinite amount of money. Unfortunately, that ain't the case and
> lets see if Gold can hold here for a few weeks. If it does not,
> we will be seeing 700 sooner or later

Crocs' Rocky Future - Barron's

$1.99 Shoes that suckers/faddists paid $49.99 for.... goes to show what a high this economy was on. Reality bites. I'll predict right now... those "shoes" will eventually find themselves parked in Dollar Stores. And the manufacturers will still make a profit.

Just How Bullish Is This Market?

Is the market bullish or is it reflective of coming inflation? Since inflation destroys the purchasing power of currency, one may wish to hold another "currency," one with high liquidity, one whose value can be quickly protected by rapid product pricing adjustments and preferrably one that pays "interest." i.e. dividends. Real estate does not meet these criteria, nor do bonds or precious metals.

Calpers: Betting the House

Gutsy? Having gambled I can testify to the fact that it doesn't require all that many guts to bet with OPM. I'd bet, excuse the pun, that Mr. Dear figures that if he wins he scores a big payday and achieves heroic status.... if he loses there's Mr. Obama and his printing press to save the day. So where's the risk? They don't put people like Mr. Dear on the gallows or in jail for having made a mistake in judgement.

5 Large Cap Super Stocks with Great Earnings

Tim left out PM. Market Cap: 91.01B, P/E (ttm): 14.23, EPS (ttm): 3.26, Div & Yield: 2.16 (4.90%)
PM is a 90 billion dollar cap co. selling a highly additive product, addictive to both pleasure seeking users and tax hungry governments, to customers outside the USA. PM is a good play on foreign currency, third world/emerging market growth, and a growth stock with a dividend in the 5% range.

Is the Unemployment 'Green Shoot' Wilting?

A State of Fear and Loathing
This a Chart of Fear. It describes in stark graphics what happens to an economy when it's government is first gripped by fear, changes direction and concurrently has a desire to create social revolution reordering the laws of physics: Thermodyamics and Gravity. The government puts its citizens into a state of fear and its business leaders into a state of loathing.

The Chart speaks volumes. How did this happen and where are we going? It happened because the government has capriciously changed Contract Law, seized major businesses: private, publicly held, and quasi-public; and seized control of nearly every area of finance.

The result is that it is impossible to operate within this changing system with any certainty. It's like being at sea in a storm with both wind and waves rough and confused. The best tactic? Reef-down, lower sail, go slow and keep damage to a minimum. To survive that means: take no risk, make no unnecessary expense, hire no unnecessary employees, make no plans other than to await a sea state one can sail upon. Unemployment will continue to rise, businesses will continue to fail, homes will continue to fall into foreclosure. Nothing has been "fixed" by government leaders. Much of what got us into this mess is being rekindled by those very soles charged with fixing "it": government giveaways, easy credit to those least deserving and least likely to repay, The Fourth Estate in bed with the regulators, business people caught like deer in the headlights, the rest watching it all ravel and unravel like a comic horror show in which we are all playing a real-life role.

Expect the Unemployment Rate to Increase

Skateboard....


On Jun 24 07:39 AM Dave Wrixon wrote:

> Even a child with a ruler could work out that the curve is not going
> to stop anywhere near 10%. What do they do in the White House apart
> from hangout and chewgum?

Expecting Hyper-Inflation: Fed Chooses to Monetize America's Debt

OIL!

Yellow Gold vs. Crude Black Gold: Who's Ready to Rally?

During deflationary times, gold does not do well, cash remains king. As the price of oil plummets, those that use oil revenues to buy gold aren't. Even if there was a collapse of USA monetary system, gold would be next to impossible to use as a medium of exchange. In the event of inflation, useable commodities like oil and agriculture will at least stay pace.

The Inflation Time Bomb

Citi Bank is likely to fail and BofA is likely to become the First Federal Bank of America.... wholly owned by the citizens of America. melvinshapiro.blogspot...