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  • A Bear's Best Effort At Making A Case For The Bulls [View article]
    Joseph, very nice article. I intend to read it a few more times. As far as the stock market goes, it would appear to be into the euphoric phase and the news should be all good and but clearly, that is not the case. I suspect that the euphoric bunch are the bankers who have been 'investing' all that QE money in the stock market and driving it up in the process. I have my doubts that they will prove to have been the 'smart money', but they could push the markets to unthinkable levels.

    The low volumes are indicative of a lack of participation by the retail buyer who traditionally ends up buying late in a bull market. I don't see the scared and broke retail buyers getting into this market anytime soon. Could it be that the bankers will end up holding the bag? That would be a dream come true for most of us.
    May 28 01:10 AM | 1 Like Like |Link to Comment
  • Metal Premiums Show Physical Metal Demand [View article]
    The premiums being charged by the dealers only reflect the fact that they are unwilling to sell their previously bought inventory at huge losses, thanks to the sudden collapse of gold. The premiums help to mitigate those losses on previously bought high priced inventory. As their inventory costs come down, so will the spread premiums.

    A shortage of gold at the retail level may not be a terribly good barometer of where gold prices are headed. Any shortage will probably be temporary as the miners should have no trouble increasing supply to meet the needs of the mints. While increased demand by the retail investor is very real, it is just not significant when compared to total demand that includes the central banks, technology and jewelry industries. However, if some of the bigger players, particularly funds, were to decide they want real gold instead of the paper variety, gold prices would be under extreme pressure to move up. Any increase in demand, other than the paper gold variety, would be highly beneficial for the miners.

    It may be a good time to begin (or add to) an accumulation of the gold miner's but with the expectation that it could be several months before gold resumes it's bull move. I am personally inclined to think things will begin to heat up late summer or early fall.
    May 27 01:49 AM | Likes Like |Link to Comment
  • Gold Bulls Are Giving Up - Should You? [View article]
    Avi: You normally use the the words "one more" (as in one more time, one more decline, etc), at least once in most articles that you write. This time, you used "one more" three times! Should we be reading something into that anomaly? I have been waiting patiently for you to issue a buy signal but it seems like you are always looking for "one more" drop (or rally) in this never ending slaughter.
    May 26 12:15 PM | 2 Likes Like |Link to Comment
  • This Picture Is Worth 1,000 Words [View article]
    As the stock market rises to record levels, the margin debt also sets new records. Isn't that what one would expect? A new record doesn't mean that a turning point is imminent. We will probably see many more new records in the coming months.
    May 25 06:24 PM | 3 Likes Like |Link to Comment
  • Gold Liquidation Now Accelerating [View article]
    Sentiment is now working against paper gold and many of the big players are trying to get out of the exit at once. On the other hand, we have thousands of small players supposedly "lining up" to buy real gold. That's great news but are we going to see the big players getting into that line up also?
    May 22 04:03 PM | Likes Like |Link to Comment
  • Gold: A Little Lower, And Then A Rally [View article]
    In the May 12th article AVI said "I am looking for at least one more drop to prior lows, or even lower lows in GLD (123.75-127 region next), and, ideally, even two drops, the second coming after the next drop and larger counter-trend rally."
    Today GLD dropped to 130.75 , just above the prior low, and then rallied to close at 135.12. AVI, is this a sucker's rally and should we wait for GLD to drop into the 123.75 to 127 region before we dive in?
    May 20 04:55 PM | Likes Like |Link to Comment
  • U.S. Economy In March - Spring Swoon Has Arrived [View article]
    Stephen, thanks for compiling that great list but you left out the only statistic that really matters to the stock market: corporate profits ( perhaps because they are reported quarterly?) Corporations have conclusively proven that they can increase profits even in a poorly performing economy, as measured by GDP or the unemployment rate. When future profits are in jeopardy, the market will fall long before the fact is reported to the public.
    May 19 12:18 PM | Likes Like |Link to Comment
  • Is The VIX Index Forecasting A Stock Market Surprise? [View article]
    Joseph, harrick has made a very valid point. How's your own VIX (UVXY, I believe) long derivative doing? It must be down close to 80 to 90% since you bought into it last fall, which proves harrick's point very well. Your "probabilty" prediction that the market will not move higher in the next few months is worth about as much as your endless calls for a market crash. You have proven that you really have no clue where the market will be in the next few months. When the market finally does top out, you will only be right because you know eventually you will appear to have been right by way of being an eternal bear.

    As far as a low VIX number being predictive of anything occurring in the next few months, that is just rubbish. The VIX was below 15 almost a year, dipping below 9 at one point, before the market topped in Oct of 2007. Buying calls as insurance and having them expire worthless is another good way to lose money. It doesn't take a genius to figure that out.
    May 19 11:13 AM | 1 Like Like |Link to Comment
  • Digging Into The First Quarter Gold Demand Report [View article]
    The author has chosen to present the YOY changes in demand in terms of percentages instead of tonnes and that does not provide a clear picture. Let's look at the demand changes YOY in terms of tonnes of gold.

    Jewelery: Increased by 60 tonnes to 551 tonnes

    Technology: Increased by 4 tonnes to 105 tonnes

    Central Banks: Increased 6 tonnes to 115 tonnes

    Bar and Coin : Increased 35 tonnes to 378 tonnes

    ETF investment: Decreased 230 tonnes to -177 tonnes

    One thing is readily apparent: The demand in all categories has increased except for ETF demand which has fallen precipitously, dwarfing the increases of the other categories.

    What is not so apparent is that demand for all categories with the EXCEPTION of ETF demand is 100% met by physical gold. ETF demand is met much differently. We know that a significant portion of ETF demand is met by the leasing out of bank gold, on a leveraged basis, to the ETF sponsors. This 'arrangement' puts no strain of the supplies of physical gold and the whole process lacks transparency and there is no requirement to report to a regulatory body.

    Gold is going to continue to languish unless there is a change in the intent of the big players, many who have abandoned the gold ETFs. If they were to get back in the game as buyers of real gold instead of paper, then we have a whole new ball game. I doubt that the central banks would be able to prevent a dramatic rise in the price of gold although I am sure they would try even if it meant selling their stocks into the market. What would be at stake would be the integrity of the fiat currencies.

    I am not saying that such a scenario is definitely going to happen but the possibility cannot be ruled out. Bigger players demanding real gold is the only realistic hope for the goldbugs. The Chinese housewives and Indian brides are not going to do the job.
    May 18 02:23 AM | Likes Like |Link to Comment
  • Gold Physical Sales Still Up 50%, Gold ETFs Shake Out Leveraged Speculators [View article]
    JPnyc: The Dow has been making new all time highs every day, the dollar is showing surprising strength and almost all major indexes are on a tear. Just where is it that you see weakness? The only thing showing real weakness is just what you put your money into, gold.
    May 16 01:18 AM | 2 Likes Like |Link to Comment
  • Gold Physical Sales Still Up 50%, Gold ETFs Shake Out Leveraged Speculators [View article]
    We keep reading these stories about the big demand for physical gold and yet the price of gold traded on the Comex continues to be weak. As the saying goes: "What's wrong with this picture"?
    May 16 01:15 AM | Likes Like |Link to Comment
  • The Key Point Missing From The QE Tapering Debate [View article]
    One of the biggest beneficiaries of the rising stock market has been the pension plans and their corporate sponsors. Thanks to a combination of low bond yields and poor returns on stock investments, retirees have been facing the possibility of severely reduced pensions while Corporations and all level of governments, were on the hook for billions (trillions perhaps) due to under funding of defined benefit pension plans. The whole mess has been a disaster for which there didn't seem to be a solution. Then, along comes QE.

    Perhaps Mr Bernake can be credited for having created a solution. The QE money did not sit idle in the banks as some have suggested. In fact, the bankers have been buying up equities in a very big way, enhancing share prices in the process. ( It is note worthy that the target sectors of the bankers are the defensive sectors, with commodity sectors completely shut out of the action.

    No doubt, the pension funds will be reporting that they are now in much better shape with the market now at all time highs. Their ability to meet pension obligations will only get better as bond yields begin to improve. Corporations and nearly bankrupt cities also have a great deal to cheer about. Their pension related liabilities can only be improving.

    The party may not end as abruptly as some think when the FED slows down or even ends the QE programs. Will the bankers suddenly rush to sell the accumulated stocks? I doubt that will happen. A sudden market decline would negate everything the FED has accomplished so a crash may not be in the cards. However, a problem will arise when excess liquidity is slowly removed. . In that situation, a gradual and lengthy sell down of equities would be the most likely outcome.
    May 15 10:57 AM | 1 Like Like |Link to Comment
  • The Massive Elephant In The Economic Room [View article]
    Carlos: This is a very well written and insightful article. Thanks.
    May 15 10:37 AM | 1 Like Like |Link to Comment
  • The Bernanke Agenda - It Isn't What You Think It Is [View instapost]
    Great story! With your imagination, you could have been a writer for the movie industry. Bernake is no fool but I doubt that his plans go much beyond getting the economy back on it's feet.

    On another note, I see the stock market sailed through your 1600 upper limit and seems to want to march higher yet. It must really suck to have been bearish all the time you could have been making hay. You have missed out on a great party. Are you going to pick another number as the high before it all slides into a crash?

    The banks, buying stocks with QE money, are completely distorting the market with no inclination to take profits as we would normally expect to see. There also has been very little in the way of sector rotation with the same sectors pushing the market ever higher. It is interesting how the financial stocks and defensive sectors are doing so well but then it really isn't surprising considering the conservative nature of those who are driving the market with the Fed's 'printed' cash. The risky commodity sectors are completely ignored.

    The declining volumes are evidence of a shrinking pool of buyers and some may interpret that to be a bearish sign. Well, it would be if we were in a normal bull market, but this bull market is anything but "normal". In fact, as the volume shrinks, the market responds by moving higher. Clearly, those in the driver's seat are intent on pushing the market up. The 'TOP' might prove to be much more elusive than one might expect.

    One of the big beneficiaries of a rising stock market has been the pension funds and their corporate sponsors who have been facing billions in funding liabilities thanks to a combination of low bond yields and low stock prices that were crippling the ability of the plans to provide the pensions for retirees. Perhaps the QE gift from Bernake has gone exactly where he wanted it to go in order to avert a pension fund disaster. Rising yields should further lighten the funding liability. Maybe that was his real plan all along or would that be too simple to consider?
    May 15 12:48 AM | 1 Like Like |Link to Comment
  • Update On Gold: Is This The Bottom? [View article]
    Russ: Thanks for the interesting link. Do not confuse the Comex with GLD. The Comex deals in actual gold while GLD is little more than an electronic paper shuffle. The missing outflow of gold that you are concerned about was almost certainly bought back by GLD's sponsor, State Street Global Advisors. The bought back units would have been cancelled, just as is done with any other ETF. The leased gold backing the units would revert back to the true owner of the gold which would be a bank. It's all done electronically. No gold is actually trading ownership since the banks actually owned the gold even while it was leased. If you think that this arrangement sounds like a farce and should be illegal, you would be 100% correct.
    May 8 10:03 PM | Likes Like |Link to Comment