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Benito Salvatore

Benito Salvatore
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  • Why the Current Bull Market Is the Most Hated in Modern History [View article]
    you're right. But that explains a lot about this market. Why would you have money in a bank? Sure % in shares is less but many lost a lot and need to use share money to pay down real estate, credit cards, etc loans. Want to guess what will happen as soon as rates rise?
    Apr 26, 2011. 10:21 PM | Likes Like |Link to Comment
  • Why the Current Bull Market Is the Most Hated in Modern History [View article]
    Yep and individual investors have margin loans just a tad short of 2007 high. Irrational exuberrance anyone? When Bernanke says QE2 is to push up share markets everyone thinks they are share market geniuses... but with the end of QE2 what will these know-littles do now? I would think lose their paper profits to the experienced, know-alots!!
    Apr 26, 2011. 10:08 PM | Likes Like |Link to Comment
  • How Do Top Line Numbers Look? [View article]
    to be expected with a weak US dollar meaning more competitvely priced in foreign markets.
    Apr 26, 2011. 09:43 PM | Likes Like |Link to Comment
  • Why We See Gold Going Lower Long-Term [View article]
    I'm not with US gov!!
    But if I was I would WANT you to invest in gold! The US wants you to make money [so they can tax you as they need the money].
    This bet on gold was telegraphed to everyone as obvious SO THEY COULD MAKE MONEY ON IT and then the gov could tax them!!
    The US gov doesn't care about the price of gold they just want the US dollar to be cheap so manufacturers in US can have products that are more competitively priced in foreign markets so they make money and then the gov can tax them!
    Stop worrying about the US gov trying to hurt you. If you understand what they are doing they are trying to harm the rest of the world, not you. That's why the rest of the world has described QE as a currency WAR!! Unfortunately if you have cash or are on a fixed income you will loose buying power, but that is why they made it clear that QE would devalue US currency so obvious that if you were thinking you would then buy gold and make money for almost no effort. Just be grateful you don't work in one of the foreign industries that are now unable to compete with US prices and have lost hours on your job and now you and family are having to cut back on lots of necessities!
    Apr 25, 2011. 08:48 AM | 2 Likes Like |Link to Comment
  • Why We See Gold Going Lower Long-Term [View article]
    Don't know if gold standard will ever be resurrected. During WWI many major countries Germany France UK went off the gold standard - [which meant in those days a certain set % of gold in a country's central banks to their currency in circulation so couldn't inflate away their debt to their foreign trade partners and creditors harm and then eventually those countries no longer lending them money] - as couldn't afford the war otherwise. The purpose of the gold standard was always to stop govs from overspending and inflating away debt creating a lack of confidence in a country making foreign loans harder and more expensive as others wouldn't trust them again. All around the world govs today have bought into Keynesian [1930's] economic stimulatory spending theory where gov increases spending to make up aggregate shortfall and there is no political will to face the economic hardship - mainly increase in unemployment - this would entail. What is the main problem these days is the defacto global currency, US dollars, where the US gov policies to meet their domestic problems - subprime and high unemployment- have too great an effect on other countries' economies, ie pushing up their currencies so uncompetitive overseas creating domestic inflation or if pegged to US having their currency fall with US currencies devaluation due to QE and therefore making imports more expensive and inflation higher. The best way to dampen this one sided foreign controlled economic devastation is to have a more balanced global currency which will probably be a blend of the G7 currencies in proportion to their share of world trade.
    Apr 25, 2011. 07:56 AM | Likes Like |Link to Comment
  • The China Surprise Is Lurking [View article]
    Obviously everyone here seems to think the Global Financial Crisis is behind us. Share markets and economies are only marginally connected and I for one believe the share market bounce from the bottom has been overdone. Of course I am outside the US and therefore am not daily bombarded by economically biased commentary and can think without Orwellian Ministry of Truth 'dataspin'. I do believe China has a big future but before then I see a nasty surprise for the Chinophiles. If I am wrong then capitalism is wrong as I can't find any evidence for long-term success of communist/socialist economic planning, albeit with a Chinese spin, in any economics books or history [Hong Kong was the most capitalist place I ever lived in]. I also love the Chinese economic statistics which come out so quickly one must either doubt US statisticians work ethic or doubt Chinese figures. But please enlighten me and those hedge funds that have now bet more than 30 billion that China will soon have a nasty landing fighting the very overheating economy you use to support your belief. No-one denies the facts only the interpretation of them and the consequences. Don't forget the US had a similar catastrophic overheating in the Roaring 20's as it took over the reigns of the global economy from Europe and the UK after the first world war but still went on afterwards as I'm sure China will. It still wasn't much fun though as an investor and I'm sure this is a big part of the hedge fund short-selling rationale.
    Apr 23, 2011. 05:05 PM | 1 Like Like |Link to Comment
  • Why We See Gold Going Lower Long-Term [View article]
    Rise of gold [denominated in US dollars] is an absolutely rational response to increase in money supply that exceeds GDP growth for US citizens and countries with currencies pegged to US dollar to hold the buying power of their savings. For countries with floating currencies, ie Australia, that is not the case as the currency's rise as the US devalues and gold in Aussie dollars stays same - it has hardly risen at all the last two years [although risen a lot since 2000]. This is the point of going to a floating currency because it allows all citizens to fight the effect of foreign/exported inflation without owning gold [one of the reasons that central banks have been net sellers, knowing that the real value of fiat currencies is their country's capacity to physically enforce tax collection, especially on inflation-goosed GDP figures]. Since China controls its currency to mimic US dollar to stay competitive in the large US market and hold its US Treasury assets' values, it makes perfect sense for them to buy gold as it rises in comparison to Renminbi/US dollar and they have the foreign reserves to do so which the US doesn't. India has a strong gold market as savings historically have been converted to gold that can be carried on the person and their inflation rate is over 8% at present.
    Now the $64,000 question is related to 1/- inflation expectations driving demand, 2/-the supply that will come on the market when/if QE stops and then reverses and US dollar rises, 3/- when central banks decide to force gold down again ie by liquifying their gold holdings at elevated prices, raising rates, using tech traders to see an engineered top so they'll short it down while the central banks wait to buy it back cheaper before restarting inflationary policies again to drive it back up again. Sound unfair? You bet! But coordinated central banks have been very clever at manipulating currencies and commodities to bootstrap the global economy - you only have to look at the massive currency and commodity moves since 2007, which I believe was all part of Bernanke's plan coordinated with the G20, to avoid a global depression. So gold bugs in some countries should ride gold but be ready to get out when the time is right. No I'm not a conspiracy nut but this is my best guess at what a central bank should do in the worst recession since the Great Depression to refill government and investment bank coffers through massive swings in currencies and commodites, engineered through interest rate manipulation of the global reserve currency. Love to hear others comments. Cheers.
    Apr 23, 2011. 03:16 PM | 7 Likes Like |Link to Comment
  • Market Comedy Continues to Disgust and Delight (Depending on Your Position) [View article]
    True Finns don't want bailouts. Legal case in Germany that bailouts are unconstitutional 2b decided this yr. S&P neg outlook. End of QE2. China trying to stop inflation. Food and energy inflation bad outside US. Pull up a chair and get the popcorn...the show is about to start.
    Apr 20, 2011. 06:31 AM | Likes Like |Link to Comment
  • 10 Scary Charts: A 'Post-Recession' Economy Wake Up Call [View article]
    It's a very messy recession/depression 'recovery'. Patient on Fed Reserve life support stimulus and barely responding. Most earnings increases from write down reductions, inventory rebuilding -now almost complete, foreign earnings increases [from QE devaluing US dollar] and some market share growth through better cost competition in domestic and foreign markets [from QE devaluing US dollar] . Inflation increasing, productivity still poor, unemployment bad, foreclosures still massive, banks still insolvent except for mark to model method to measure house collateral. Sorry to say will need Fed to periodically step aside and another 'correction' to blow out a few more of the businesses that will never recover...Schumpter 'creative destruction' that recessions are designed to do leaving the fittest and strongest to get market share and grow. Until then just invest with Fed. When they stop QE sell. When they restart as they will if Bernanke has his way, reinvest. Rinse and repeat for the next decade [?] until entitlement reductions and age alleviate high unemployment. This is really a depression just well managed by Fed financial trickery, but still can make money if you understand that.
    Apr 15, 2011. 02:20 PM | Likes Like |Link to Comment
  • Is the Long Commodity March Over? [View article]
    I see it more simply. QE devalued US dollar, which denominates oil and other commodities. Likely end of QE [at least for a while] therefore US dollar increases in value, especially as carry trade reverses [end of QE2], and US denominated oil, etc drops. US gov would want this as helps Japan use more oil as reactor offline and US deficit [as buying oil] falls and economy looks better for the voters and helps get Republicans and TEA party off his back. Also this would reduce commodity price inflation and therefore the yield bond buyers would demand of bonds after QE2 finishes [paused] and their temporary assessment of return, to include currency rise. Could be wrong. Very hard to make sense of economy now gov has hand in everything.
    Apr 14, 2011. 12:11 PM | Likes Like |Link to Comment
  • Buying Goldman's Commodity Sale [View article]
    Goldman analysts just back from global commodity producers/users conference. There they found out huge stockpiles and poor forward use estimates. No wonder as soon as got back sold and then told the rest of us what they found. As for optimism not high enough for this to be the top I would suggest your article proves just the opposite. When Goldman deems to tell us what's really going on with demand and supply warning us of a speculative bubble and you write don't worry then I sure will worry!
    Apr 14, 2011. 11:42 AM | Likes Like |Link to Comment
  • A Simple Framework for Understanding Fed Views on the State of the Economy [View article]
    With this kind of data, with respect, I can see why economists are so unable to agree on anything. Economics is not physics and using mathematics and graphs does not make it more precise. Astrologists do the same to bolster their belief in themselves.

    With this kind of data and theoretical underpinnings and the Fed economists distortions of the truth - Remember the Fed saying in 2007 the subprime problem was contained and wouldn't effect the economy significantly, while recently released emails show they knew it was horrific! - I wouldn't trust them to manage anything, let alone inflation expectations.

    So while your interesting facts would get you an A in Uni I wouldn't put much faith in them in the real world or the economists that develop the theories, even if they win Nobel Prizes, including Bernanke and his belief he knows how to avoid depressions ,without causing equally damaging unexpected consequences elsewhere.

    Time will tell if the Fed knows what it was doing or was just wasting air. Remember when everyone thought Greenspan was a genius?
    Apr 12, 2011. 03:10 PM | Likes Like |Link to Comment
  • Investing in Today's Market: Disciplined or Delusional? [View article]
    Hey I like your stuff. Been following you for a while but 'first time caller/commenter!!'
    I too have a feeling that the market has lost touch with reality, however I am resolved to accept with QE2 still at play the tech heads just draw lines and bet. It''s just too easy. But the piper has to be paid and unfortunately there are no free lunches regardless of the Bernanke spendthrifts we occasionally meet on their way to the gutter. If he was a politician I'd want to vote him out but I can't and like dangerous ideologue politicians he has an agenda to prove...'that he can save America from a depression'. Afterall he wrote his doctoral thesis on it and now he's got the chance to prove it. The fact he was one of Greenspan's advisors who got us in this mess that could have been another depression [and still may or a world war from the runaway foreign inflation destabilizing MENA] should hopefully bring pause to those who believe in his brand of voodoo monetary policy experimentation. It seems that the internet has not only brought us interactive home casino gambling in our underwear but also a whole new group of sheeple to fleece. Afterall now anyone with a few hundred dollars to buy a cheap computer and a book on tech analysis has all they need to get to Eldorado. Good luck to them. But, a word of warning to them, they should remember that one of their best Jesse Livermore eventually lost his money and decided life wasn't worth the candle. Hope sense comes before bankruptcy. Remember the 'too easy' gains of Subprime anyone?
    Apr 5, 2011. 12:46 PM | Likes Like |Link to Comment
  • IMF Data Supports My Food Riot / Revolution Index [View article]
    Bernanke runs the FED. Its policies effect US currency values. With the US currency a global reserve currency which other countries must hold Fed decisions effect other countries' currency values as well as the value of US denominated commodities such as oil. As I have long stated the QE US is engaged in is not the behavior of a good global citizen and I support China's demand that a new global currency must be found as the Fed's concerns are US centric while its behavior effects the whole world. If the US wants to reduce the disgust it is held in by many developing countries and reduce terrorism against it it should keep this in mind and its citizens should make their sentiments known to the Fed and their local congressman/woman. I have great respect for the US Constitution however I despair with the self-centredness of the US administration when it is the only superpower left in the world. I find it hard to argue with my friends that the US is not an economic and military bully. I hope the average American can request their gov act more responsibly to the rest of the world which in many ways would help the US. It certainly isn't in the US interests to cause more political instability worldwide, the wars and deaths this will cause and the further degradation of US moral leadership worldwide. Obama winning the Nobel Peace Prize and then instigating economic policies that create food prices beyond many foreign people's capacity and thereby ferment riots and wars is a very sad endictment of his so called credentials for peace.
    Apr 4, 2011. 10:29 AM | Likes Like |Link to Comment
  • Don't Obsess About the Economy - Watch the Data [View article]
    Thiazole just making the point don't just watch the data try to understand what it means by going beneath the obvious summary figure. Sure you can trade shares but you are trading on the market's misunderstanding of the facts so be ready to get out when the penny drops. Just thought I'd give a heads up as I usually keep my analysis to myself
    Apr 3, 2011. 03:19 AM | Likes Like |Link to Comment