pdub271

A Closer Look At iShares Preferred Stock Index

Ah memory lane. =) I say, prefered share ETFs are ripe for the picking now -- bet on the recovery and lock in your 8-12% coupons!

Are GLD and SLV Legitimate Investment Vehicles?

Hmmmm....if you want to speculate on commodity price, buy the physical stuff just to make sure your investment demand gets immediately counted. The ETF might dampen your ability to contribute to a price shock

I'm beginning to wonder if ultimately, when a price shock finally happens, maybe it's even more extreme if people have been trying to dampen price by using future supply to satisfy current demand. (I mean, if supply dries up AND people start to realize that most future supply is spoken for....imagine what that would do to prices...)

Are GLD and SLV Legitimate Investment Vehicles?

"Instead of purchasing a long futures contract to cancel out a short futures contract, gold ETF shares could be purchased to achieve the same effect."

That isn't saying anything -- you could purchase physical gold to settle the contract too. Settling with ETF shares is fishy only if the ETF share doesn't correspond to physical gold in a 1-1 fashion at all points in time.

...which leads to my question. I like silver so I'll phrase in terms of SLV

Is there any way SLV can create additional shares before (even slightly before) physical silver is locked away in a (sub?)-custodians vault? For example, ETF shares could be created in exchange for near-future delivery promises. That might be what is meant by the "remainder" of the holdings which are not the "bulk" of holdings i.e. physical metal.

If so, then we have a problem because "tomorrow's silver" can be used to debase today's silver, entirely at the discretion of the custodians. (who happen to hold short positions....) In effect, custodians could protect their short positions against fluctuations in investment demand. Assuming industrial demand (i.e. demand for PHYSICAL silver) is elastic enough, there would be hardly any risk of prolonged obvious shortages of physical silver.

Do you guys think this is really going on?

As a side note -- In theory, silver dealers catering to investors might unintentionally debase today's silver with tomorrow's silver all the time. They delay delivery longer when their stock runs out (i.e. when investor demand is high).

Let CIT Fail: The Business Model Is Broken

CIT is small enough to fail (in dollar terms), since they only need ~10 billion tops. But they're really important for small businesses in the short term. So why not spare some peanuts to help the recovery along, more bottom-up style? Screw AIG's debt to Goldman, we should have forced that to be written off. Goldman's riches from ruthless profiteering playing financial "hot potato" is far, far more than enough to cover CIT.

I mean, after blowing 700 billion on bail outs (not to mention 600+ billion more on health care....), are we really going to get all stingy with peanuts of 10 bil, and risk disrupting tons of small businesses during the most important part of the year for retail? Small businesses don't deserve any more disruptions caused by fat cat financials and bloated government spending and agendas.

Should CIT Be Saved? I Think Not

Exactly for the reasons Lefly mentioned, the timing is horrible right now to let CIT fail. It would cause new unemployment in lots of small businesses, at the worst possible time. At the very least we should prop up CIT cash flow for a year or two, even if it isn't enough to save them long term. CIT has a much smaller balance sheet than all the fat cat financial corps we already bailed out anyway.

After plummeting today, CIT Group (CIT) is up 23.7% AH as The Wall Street Journal reports "advanced talks" by the government to help the lender as it struggles to avoid bankruptcy. Not big enough to typically merit support, the 101-year-old company is a lender to nearly a million companies.

I don't think CIT would even be in trouble if it weren't for all the crap caused by other bad companies.

CIT Prepares to File for Bankruptcy

"Touch sh*t" for a few can be even tougher sh*t later for everyone. CIT greases transactions between retailers and small companies. Competitors don't have enough cash or infrastructure to immediately soak up all of CIT's customers. So there will be a temporary (or longer) disruption in retail if CIT fails. Back-to-school and holiday shopping are coming up, and retail is already beaten up, so they can't really handle a disruption, and probably neither can our consumer-based economy. If you want let CIT fail in 2011, ok fine. But let's at least delay it.


On Jul 12 07:29PM C. Fischer wrote:

> Tough sh*t. Your lender is insolvent. Find a new one, if your business
> is viable. It's not my job (as a taxpayer) to help you.

After plummeting today, CIT Group (CIT) is up 23.7% AH as The Wall Street Journal reports "advanced talks" by the government to help the lender as it struggles to avoid bankruptcy. Not big enough to typically merit support, the 101-year-old company is a lender to nearly a million companies.

CIT might actually get the bail out, not exactly b/c they're "too big to fail," but because they might be "too important to fail". Competitors in small-business-lending are starting to admit they won't be able to absorb all the extra business if CIT fails. So retail could be crushed on the 12-month horizon if SOMEONE doesn't get the federal assistance (whether CIT or their competitors).

I think there's actually a long hedged play here -- buy a little CIT and a little more of their competitors.

CIT Prepares to File for Bankruptcy

As much as I hate another bailout, bailing out CIT is an indirect way to help small businesses and employment, which is probably where we should have started in the first place (instead of crap like AIG).

Right or wrong, it's certainly the "Left" thing to do, so I'm pretty sure Obama is going to try to push for a CIT bail out. He might even put an infomercial on ABC explaining how important it is to help small businesses and the jobs they create.

U.S. Economy: Is the Fed Predicting Stagnation?

If we're undermined by Free Trade, then obviously we've been perpetuating incomes and lifestyles that are unsustainable. Foreign labor is cheaper because frankly, American workers are grossly overpaid compared to everyone except the EU.

I see it as closely related to the general US crisis. The US is at a tipping point, after piling on a bunch of debts and spending (government and private) that we couldn't afford. China shipped us the goods, instead of enjoying the stuff themselves. Now we owe them

All across the board, there's an Equalization happening which has been long overdue


On Jul 07 11:08 AM goldbug101 wrote:

> The underlying problem with any recovery is that our nation's manufacturing
> sector has basically been gutted by "free trade" and offshore plants.
>
>
> Until we figure out a way to get those manufacturing jobs back, or
> create new ones, the recovery will never bring us back to where we
> once were or should be.
>
> Walmart & McDonalds can only create so many jobs that don't pay
> anywhere near a living wage.

California default CERTAIN – Martin Weiss

Jeff, I have to admit you are right about California. I still think you're extrapolating a forecast too dim too far for the country. Things will be bad. But we need some kind of assumption, like "Americans won't change" in order to guarantee things will be as bad as you predict. I'm curious, are you American?

Probably a lot of ppl trusted munis as "fail-proof", but some people like me didn't. Cities fail easier than states, states easier than nations. Look for a ridiculously stingy CA bail-out from Obama, with provisions so harsh that it makes an example out of CA and sends a message to the other states.

BRIC to BIC to BICI?

I agree South Africa is interesting, but it's also somewhat a commodities play like Russia. I do like the commodities in South Africa better though (e.g. precious metals), compared to Russian oil. Russia has NG, but I see NG as being best played in the US since we import so much oil and claim we want alternatives like NG

David Morgan: Silver Could Outperform Gold 2:1

Silver has some long term (perhaps very long term) advantages over gold. One was mentioned in the article, namely the increasing scarcity of silver. Another potential long-term factor is that the middle classes in China and India will some day be pretty large, and able to afford jewelry. If gold/silver are priced high, then silver will probably get a bigger boost because it'll be more affordable for China/India incomes.

Why the Bottom Is Near for Gold and Silver

Thanks for the interesting mention of the RSI. And silver. People talk about gold a lot, but silver might be even better for long-term. In particular, gold jewelry demand is elastic, and the growing Chinese and India middle class (especially India) could end up buying a bunch of silver instead.


On Jun 16 11:51 PM Peter Cooper wrote:

> Never mind the IMF sales, what about the new Russian proposal to
> include gold in the IMF's SDR - this is sensational news for the
> gold price, and ought to be a huge buy signal, see:
> arabianmoney.net/2009/.../

Are There Any Solutions for the Grim Budget Outlook?

China will eventually have (modest) social programs and a safety net for its people, and they will probably arrive at the "right" economic formula before we do. I fully understand how important it is to have some minimal level of such programs.

You didn't read my post carefully enough. We need to cut spending AND raise revenue. The best way to raise revenue long-term will be to shift from an importing country to an exporting country. Jeff is convinced we are inexorably locked into a consumer-based economy. I just don't buy it, sorry -- I believe in the ability of natural adaptation. China will start to become more consumer-based, and we will become less. Throw in a little inflation, some tax revenue, and spending cuts, and we will make it. I believe in the USA.