Arthur Hau

Why Android Is Gaining Ground on Apple

Symbian is such a crappy OS. I wonder why some cell phone companies, such as Sony Ericsson and Nokia, are still using it.

Palm OS is far better than Symbian; however, the Palm cell phone is far behind its competitors. Palm is having a hard time catching up with its competitors in hardware technology, including imaging, sound, etc etc... I suppose Palm will have to merge with some large tech companies or it will simply die in a few years.

I am glad that Android serves as a major competitor of MS mobile. An open source OS means that more computer geeks will be writing more free apps and tweaks that will benefit "cheap" people like myself! :-)

Gold Surges to New Record Highs: Media Is Apathetic

Suppose gold rises at a rate of $10 a day. By the time it reaches $1500, it will take at least 45 days.

But look at the trade volume today. At this kind of thin volume, it is already a miracle to have a $5 rise at this record high price. At this rate, it will take 90 days to reach the big-mouth-claim of $1500 by Barclay!

Wait, it is very likely that there is an interest rate raise by the European Central Bank at the beginning of next year. That is, there is only about 2.5 months (75 days) left.

Time is running out for the bulls to paint their rosy picture and to tell their happily-ever-after story!


On Oct 07 12:50 PM Mayascribe wrote:

> Barclays says gold going to $1500? How much did they buy yesterday?

Gold Hits All-Time High

Opps, I just checked the trade volume of Comex Gold Dec. It is only 120,834 lots (and it's already 1:30). Not a good sign for the bulls!

I was a bit worried about gold hitting $1,100 in a few days because of the irresponsible report by Barclay. However, thanks to Australia, the gold rush can never be realized! I am waiting for New Zealand to send out another good news soon!

The European Central Bank itself expected 0.2 percent growth for 2010, revised up from its previous prediction of a 0.3 percent contraction. It may not raise interest rate in the coming month. However, I expect them to follow suit early next year!

Can Barclay beat the high interest cycle? Please don't become a second Lehman!

US Dollar: "I'm Not Dead Yet!"

A currency can never "die" unless there is uncontrollable hyperinflation!

Once the interest rate in the U.S. rises to its normal level comparable to those of its trade partners, the U.S. dollars will become strong again.

One of the major mistake committed by the Obama administration is that despite the current low interest rate and trade deficit against China, it is incapable to force China to appreciate its currency to a more reasonable level.

Well, this perhaps can keep inflation rate low because otherwise there may be import inflation. However, in the long or medium term, the trade deficit will only worsen and serves a major drag to the economic recovery of the States.

Please, Mr. Obama, the U.S. needs stronger international trade policies, not the elimination of pre-existing conditions in health insurance. The latter only serves to raise premium rates and leave even more Americans uninsured!

The Dogma of Low Interest Rates Is Wrong

Two points:
1. There is something known as the "liquidity trap".
2. The current problem faced by Americans is not a macroeconomic one, but a microeconomic one. The unemployment is structural. Most of the unemployed are blue-collar workers whose jobs are displaced by their cheap counterparts in China and similar countries. A low interest rate will never be able to attract business to invest in the U.S. to hire these people.

The Arithmetic of Gold: Why Its Price Has No Ceiling

There is something very wrong with the article! We are not in the Gold Standard any more (and will never go back). In fact, most countries avoid holding too much gold because of its storage cost. Holding a good diversified basket of foreign currencies in the form of foreign government bonds is always a superior strategy than holding unproductive (negative-yield) gold!

By the way, the argument that gold is a good hedge against inflation is DEAD wrong!

If there is a significant sign of inflation, the FED will definitely raise its interest rate sooner, not later!

Just a small reaction by the FED will kill the current-speculative gold market almost instantly. If there is ever a slight fear of a reverted interest rate cycle, the crash of the gold market will be worse than that of the DJI!

Thanks to Australia, the gold dream is over even before it begins!

Gold Surges to New Record Highs: Media Is Apathetic

Quite to the contrary of the claim in this article, Bloomberg just had several interviews with some self-acclaimed analysts from some ibanks yesterday and today!

Yeah, right $1500 a troy oz. Get real, even toilet paper is more useful than gold. So should the price of toilet paper rise to 2.5 times its production cost? Toilet paper is a good hedge against inflation and an even better hedge against climate change! :-)

Come on, these ibankers have just create a sufficiently large "dream margin" for blind speculators to dream their good dreams.

Remember what most ibanks had predicted when DJI was 14000? They wouldn't say it would rise to 14500. Instead they said 18000!

Remember what most ibanks had predicted when crude oil price reached $150? Not $160, but $200!

When ibankers start to yell using their big mouths, it is time to pull out!

Gold: You Can't Sell High If You Didn't Buy Low

The title is funny!

You don't need to buy it if you are a producer of gold!

For a real commodity like gold, producers will be more than happy to sell high when there are a bunch of stupid I Bankers trying to create positive rumors about the potential of a negative-yield commodity that has NO REAL demand because of its high price!

Gold Hits Record High

On Oct 07 09:11 AM JeffDB wrote:On Oct 07 08:43 AM Arthur Hau wrote:

>It may not explain all of it, but it's got to be a strong factor. Look at >how the gold price movement has varied from currency to currency:

So what? In 1987, when a $ is exchanged for around $120 Yen, gold price couldn't pass through $500. Even with the tripling of the product cost and the relatively high oil prices, there is NO way that gold can reach $1500.

. There is no war

. There is no inflation

. There is an ongoing recession that is unfavorable to commodity prices

. There is a potential rise in the supply of gold by Russia because of its recession

. Many central banks have already purchased sufficient amounts of gold as reserve since 2000. Their future demand for gold can only be negative.

. The storage cost of gold is extremely high.

. Gold does not yield any interest. In fact, you need to pay interest to go long on gold.

. It is almost certain that the U.S. will start its high interest cycle by the mid of next year. Australia has already raised its interest rate. Many countries will follow suit.

. China and many countries' exchange rates are pegged to the dollar. To these countries, gold is extremely expensive. It is the right time for them to get rid of all their gold when the price of gold rises further. China has to buy dollars to maintain its pegged exchange rate because of its trade surplus.

. When there are valuable stocks, like MRK, out there, whoever buys gold must be either ignorant or blind. At least the patents of MRK will not be affect by the healthcare reform for at least 5 more years and its current yield is over 5% (plus high potential capital gain)!

. Gold is extremely illiquid unless one is talking about gold futures (only a speculating derivative). A much better alternative is the shares of gold mining companies, considering their low production cost and high selling price (they can always short-sell gold at a high price)!

. Gold futures is much more reliant on the credit market than the real estate market. When there is a rise in interest rate and tightening of credit, gold price can fall by more than 50% in a week's time. At least real estate property prices fall much more slowly.

. Real estate properties generate rents whereas gold incurs storage cost. Real estate properties are a much better hedge against inflation. Just look at the historical data.

. The current horrific budget deficit and the super expansionary monetary policy will only create the last bubble on planet earth, namely, the last gold rush in this decade or even century!

. For a commodity whose value depends solely on the extremely high liquidity and the irrational speculative power of speculators, there is nowhere that it can go, except to go south (most likely before the middle of next year)!

Sure, gold price may go up a little bit in the coming weeks, thanks to the media and the irresponsible comments of a bunch of I bankers (obviously with some intended purposes). However, the best strategy is not to follow the wave, but to do some wise short-selling and averaging. And then wait for the bubble to burst!

I use $20000-30000 as margin to short-sell 1 lot. Short-sell one more lot when it rises by another $100. Keep $20000-30000 additional reserve margin. Can anyone tell me how I can lose any money? :-)

If a real commodity's price rises to more than 2.5 times its production cost, of course, my butt deserves to be kicked! But, at least this strategy is better than the blind strategy of buying a real commodity at its record high price level which MUST go down in less than 8 months.

Gold Hits Record High

Margin call. Just add $10,000 more deposit and wait! :)

Or better still. Average buy.


On Oct 07 09:02 AM Vuke wrote:

> Good strategy Arthur.
>
> But, what happens if gold moves to $1250 ???

Gold Hits Record High

Perhaps the crazy shiny stuff will go up to $1100. However, let's sit and wait for it to fall drastically after the mid of next year when the FED raises interest rate again! In fact, Australia just raised its interest rate yesterday. New Zealand will be next. Then European countries and finally the States.

Whoever said that gold will rise to $1500 is simply trying to send a false signal to the general public to trap those who do not understand the difference between real demand and pure speculation.

By the way, the argument of a weak dollar pushing up the price of gold is so not sound. Many countries, especially China, have pegged their currencies to the U.S. dollar. To these countries, gold is definitely NOT cheap, but extremely expensive. That's why there are many people in China lining up at jewelry stores everyday to try to sell their last pieces of the yellow stuff.

Hey folks, the production cost of gold was just $6xx a troy oz, when I checked it last time. The oil price, which is a proxy for the production cost of gold, is far below its record high. Inflation is not an argument either, especially when there are better and more effective inflation hedges, such as the already-down real estate properties.

After reviewing the above facts, I would say that the only driving force behind the current gold rush is the super-low interest rate and hence liquidity.

I predict that everyone will quit their jobs and start digging for gold if its price ever rises to $1500! However, I myself would rather short-sell a lot or two using perhaps $20,000 to 30,000 margin deposit and wait for 8 months or a year. When the price of gold falls back to a more reasonable level of about $800, I would make a profit of $240*100 = $24,000. A 120% rate of return, not including the interest to be earned from the short-selling!

As simple as that!

End of the Recession?

With an increase in government spending contributing to boost GDP by 1.38%, and yet consumption is still falling. That means the so-called "multiplier effect" of government spending is virtually non-existence.

That also means once the government stop pumping money into the economy, the recession will worsen.

What's wrong with the Keynesian theory? Everything is wrong with the Keynesian theory!

The Keynesian model was invented more than 7 decades ago when there was no derivative in the financial market, when the social security program was not in place, when people die less than 10 years after retirement, when a low interest rate environment almost always raised investment and consumption, when there were a lot of manual labor and few professionals, when corporations were not too big, when income inequality was not as bad, when people were working very hard and asking only for a little, ...

All signs are indicating that the economy is still in a recession, why do some people still deny this?

- The unemployment rate is not improving.
- Real investment in non-real-estate sectors is not increasing.
- Consumption is still very weak.
- Consumer confidence is at its lowest level.
- Trade deficit is still worsening.
- The credit market is still tight.
- Foreclosure and bank failure are still above their normal levels.
- The sustainability of the OASDHI program is worsening.
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Weekly Unemployment Claims Continue to Be Encouraging

It is high school calculus that one should not look at the change in unemployment claim.

The total accumulated "new" unemployment is the area under the curve, not the curve itself! This is what we called "integration" is pre-calculus! The large size of the area under the curve is unprecedented; it is actually worse that 1987.

Moreover, the total accumulated "new" unemployment is not the entire picture. We need to take into account the number of new jobs created during the period. When only a few jobs are created. Whoever unemployed is likely to stay unemployed!

Joblessness: Danger Still Lurks in Dark Corners

A rise in initial unemployment claim together with a prolonged unemployment spell means that the unemployment figure will deteriorate further!

Some so-called economists have already declared that the recession is over. How can the economy start recovering when unemployment rate is still climbing and when interest rate is so low and yet real estate prices are stagnant.

China and the U.S. Play Ping-Pong over Currency Concerns

PLAYING PING PONG?

The Chinese government has stopped appreciating Yuan for more than half a year now, regardless of the record-breaking international trade surplus and capital inflow.

Mr. Hu Jintao has simply stopped playing ping pong and has already declared championship long time ago! Does Mr. Obama knows how to play ping pong at all?