tjhorton

Daily AVAFX Traders' Global Markets Review / Preview August 12, 2009

USD is highly negatively correlated to US stocks (86% R squared), meaning gold is highly correlated to the S&P500.
www.kitco.com/ind/hami...

Gold, the Dollar and the Markets

Most relevant article I've come across:
www.kitco.com/ind/hami...

Ridiculous Assertions About Energy Prices and Manipulation

The author misses an extremely significant factor. Goldman Sachs is under investigation regarding the price of oil, and with good cause.
www.forbes.com/forbes/...
Semgroup was short 20% of the oil market. Goldman Sachs knew about this, from client relations. There is an investigation underway that Goldman used this knowledge to profit by putting Semgroup in a short squeeze, and drove the large spike in the price of gold.

Wild conspiracy theory or simple greed? My impression is that Godlman may be the dirtiest bankers of all time, and I'm not alone.
www.goldmansachs666.com/

Confluence of Resistance: VIX Bounce Coming?

The crossover of 50-day and 200-day moving averages is a very unreliable indicator!

ECRI: Canadian Inflation Gauge Sets a New Low

With this in mind, how do you invest Mr Hansen?

ECRI: Economic Growth Outlook Brighter

Anybody know what the WLI growth indicator is based on? How do we know it is valid in economic conditions like these, with $1.75T quantitative easing, zero rates, hundreds of billions in bailouts, ... ?

The Declining Usefulness of Debt

Good on you John Lounsbury for asking fresh questions, but trendline analysis is truly only skin deep. There is deeper analysis out there!

Please read Horace Brock's essay, "The End Game":
www.investorsinsight.c...

He gets into the endgame in Section D, entitled "The Critical Dynamics of the Debt-to-GDP Ratio". He employs economic history (and game-theory models) to show that the outcome depends on real economic growth versus deficit growth.

Brock worries that "virtually no orientation towards rapid future growth is evident in the policies and 'reforms' proposed by the Obama administration, as we see in Section G".

Street Fighters: The Last 72 Hours of Bear Stearns, by Kate Kelly

> > "The biggest financial and millitary [sic] interests seem to be running it like a banana republic." Comment by tjhorton.

> You have the freedom to piss on the military ... because someone in the military that frightens you shed his blood, lost a limb or lost his life to enable you to do so" Comment by buckoux

The "biggest financial and millitary interests" does not refer to bank tellers or the brave soldiers that lay down their lives to keep America safe.

I'm talking about the millitary industrial complex that frightened Hoover so much that it was the subject of his farewell address
(see www.independent.org/pu...).

Street Fighters: The Last 72 Hours of Bear Stearns, by Kate Kelly

Much has been written about how tight the U.S. Fed and Treasury are with J.P. Morgan and Goldman Sachs. Don't you think that had something to do with it?

The Fed gave J.P. Morgan a $29 Billion sweetheart loan to buy Bear Stearns, with $1 Billion down and no further downside.

Bear Stearns was taken down viciously, and sold by decree for $2/share (bumped to $10 in the face of shareholder lawsuits). THEN they started saving investment banks 2 days later?

America is really starting to frighten me. The biggest financial and millitary interests seem to be running it like a banana republic.

The public seems astonishingly disinterested in the trillions flowing to these interests ... tens of thousands of dollars per taxpayer.

Why Jim Rogers and Robert Shiller Aren't Buying U.S. Stocks Yet

WOuld appreciate author's comments on this:
seekingalpha.com/artic...

ECRI: U.S. Economic Activity to Improve Shortly

I've updated my graphs of ECRI's weekly leading indicator (WLI) growth index. While there has been a modest bounce, it's not clear we're out of the woods.

cid-ceb9e64b40fc5af0.s...

Gold Price Forecast: Market-Long-Wave Analysis 2009-2012

There is such a thing as "good" deflation, where prices fall due to technology and productivity and open markets etc. We are in "bad" deflation, a financial crisis caused by unwinding debt at high levels. At 400% debt/GDP and a global banking solvency crisis, we're in the bad type.

Dr. Lacy Hunt makes a very good case for years of deflation.
www.investorsinsight.c...

The US govt is set to spend trillions a year on "stimulus". Japan shows that it won't work (read the link above). Bernanke has made clear the US Fed will print enough money to get us back to 3-4% inflation. Conservative estimates are that this will require $2 trillion. At some point, it will start to "work", inflation will pick up but the economy will not. We'll move from stag deflation to stag inflation.

The last time we had stag deflation, in the 1970s, gold went through the roof.

Moreover, analysis by Chris Gibson of Edison Investment shows that the setup in gold leasing and hedging markets is also the same as it was in the 70s, with negative real interest rates causing a short squeeze on the bullion banks.
www.gata.org/node/7372

On Apr 23 04:04 AM Jesusonair wrote:
> Of course all this deflation talk is pure nonsense! ...
> Sheep mentality inside hyperinflated brains

Gold Price Forecast: Market-Long-Wave Analysis 2009-2012

What does this article definitively say beyond, "the price of gold correlates with general asset price inflation?"

For a good model of the fair price of gold, see Paul Van Eeden's website:
www.paulvaneeden.com/Gold
It's based on a very sensible definition called the "Actual Money Supply":
www.paulvaneeden.com/T...

ECRI: U.S. Economic Activity to Improve Shortly

Dave Wrixon wrote:
> What I would be looking for is clear evidence of increases in
> capital investment in wealth generating industries.

Consider the Japanese example, and this savvy quote from the Levy Institute circa 1991: "... monetary policy would not, on its own, be able to restart a depressed economy suffering from asset deflation and widespread financial crisis, for lower interest rates cannot motivate fixed investment when the market is glutted with existing assets worth much less than it costs to replace them."

ECRI: The Pace of Recession Will Begin to Slow

The ECRI graph is misleading. WLI is a weekly time series, but they plot a monthly sampling, which hides the week-to-week noise in prior periods and exagerates the recent uptick.

On a weekly scale, you'll see that the uptick is very comparable to prior noise. The data is available here. www.businesscycle.com/...

Here's a weekly graph of WLI Growth:
cid-ceb9e64b40fc5af0.s...
Notice how the 1974 period looks very different from their graph.

Here's a weekly graph of WLI Level:
cid-ceb9e64b40fc5af0.s...