cove3

The True Gold Bull Has Yet to Begin

It's not a high risk trade if the price is $5. He even offered it for a starbucks coffee. With a camera shooting it, and the guy obviously from a station working a story, all those people were dumb as rocks for not taking the offer.

Ron

The Relevance of Abraham Lincoln's 17-Point Monetary Declaration

Lincoln never said any of this. The first quote has been around for a hundred years but has been shown to be based on a forged letter.
www.de-fact-o.com/fact...

There are no seventeen points either. They don't appear in any of his writings assembled by Nicolay and Hay, his secretaries, nor at the official AL web site.

Lincoln, for all his greatness, was woefully lacking in understanding of monetary principles and delegated everything monetary/economic to his Secretary of the Treasury, Salamon P. Chase.

I wish it were true, as the ideas are all valid, but they did not come from Lincoln, as great a man as he was.

Ron

No Wonder Goldman Continues to Climb

Take the investment banking out of the description of GS and replace it with speculation/manipulation banking. Very little of what GS does is aiding long term investment in value producing enterprices

Ron

Want to Own Silver? Forget About SLV

CEF in Canada has physical gold & silver & GTU in Canada has gold which is audited and counted and physically in a bank. GLD is like SLV. Nobody is allowed to audit it and HSMC bank is custodian. JP Morgan is custodian for SLV. With almost no storage/insurance costs and the two banks being huge shorts of gold and silver, it seem to me to not arms length. Hence the term paper gold/silver


On Sep 17 08:17 AM john1940 wrote:

> Is gold the same? I've used CEF because I thought they held bullion
> in the same amount as their stock issued. Now I wonder about GLD.
> Have to do more work.

5 Reasons to Avoid the Gold Rush

Gold certainly does have a cash flow, as do antiques, paintings, etc. It's the dollar amount you plug into some future year for it's sale. This is the number that is discounted to arrive at present value

It's the same with a bankrupt company in Chapter 7. There's no dividends to discount, but there is a future cash flow when assets are sold off, and creditors paid. If there's anything left over, that's the amount to discount.

Questioning Conventional Wisdom on Credit Default Swaps

It's appalling that there's no mention of ELIMINATING credit default swaps altogether, or at least restricting them to only those actually owning the underlying debt. Not owning the underlying debt gives you incentive to burn the house down.

The system has to remove the gambling instinct from markets...mere bets on short term price movements. This means banning options, futures, shorts etc unless you're a farmer or miner. If you fear for debt, put in a stop loss or sell the bond, or move to a safer security.

Ron

Bad Mortgages Are Only the Beginning

Nobody seems to realize the cost implications of going after debt on a mass scale. The legal system....courts, lawyers, prisons, etc is designed for a tiny amount of defaults, just like FDIC was disigned for the occasional rougue bank. What we have is default on a epic scale.

It's expensive and time consuming. The system won't get 10 cents back on it's debt by the time all is done. The prisons are full with 2 million people...where will you put 10 million more?

As more and more people realize they can walk away from debt, they will do it. The sheer mass of numbers are on their side. The leverage of the American financial system, and this includes the government should never have been allowed to go beyond 3:1

Ron

What is Hank Paulson Thinking?

The article mentions convertible senior debt by the government as a way to inject liquidity. Seems better to me than Paulson plan.

However, I'd like to know why Warren Buffet eg in the Goldman purchase, prefers to use 10% preferred stock and warrants.
Why didn't he use 10% convertible preferred stock, or better yet, 10% senior convertible debt. In the case of severe problems, the debt would have a high claim than his preferred, while his warrants could be worthless.

Just an idea, because I would like to see the government use something more like a Buffet approach than the Paulson approach.

Ron

Winners and Losers in the Bailout Bonanza

I am confused as to leverage/capital regulation which has existed for both investment banks and bank holding companies.

I thought investment banks were exempt and that only the deposit bank and brokerage subsidiaries of bank holding companies were regulated as to leverage.

Yet I saw that a few years ago, Goldman, JP Morgan etc were allowed to increase their leverage, implying some regulation existed.

Also, the argument for Goldman becoming a bank holding company was that it would have access to depositor money. I thought that the deposit bank of a bank holding company could not play games with moving depositors money out to it's investment bank subsidiaries.

Anybody know the answer to this?

Ron

Also

The Housing Crisis is NOT Over

The article left out a key point that even after the price declines, rentals are still 20% cheaper than owning. That has to narrow

Ron

Greg McCoach, Mining Speculator: $1000 Gold Still Very Cheap

I don't think the info on what coins sold require a 1099 form is correct. According to the IRS, it 1099 reporting:
1. Applies to all precious metal coins
2. But only if the quantity sold exceeds a board of trade contract This appears to generate a 1099 only if more than 25 coin are sold.
Several other Google hits same the same thing.

www.irs.gov/instructio...
Sales of precious metals. A sale of a precious metal (gold, silver, platinum, or palladium) in any form that may be used to satisfy a Commodity Futures Trading Commission (CFTC)-approved regulated futures contract (RFC) if the quantity, by weight or by number of items, is less than the minimum required to satisfy a CFTC-approved RFC. A sale of a precious metal in any form that cannot be used to satisfy a CFTC-approved RFC is not reportable.

For example, Form 1099-B is not required to be filed for the sale of a single gold coin in the form and quality deliverable in satisfaction of a CFTC-approved contract because all CFTC contracts for gold coins currently call for delivery of at least 25 coins.

www.usagold.com/cpm/pr...

The following are reportable items as listed by the Internal Revenue Service. Also shown is the threshold number of ounces that triggers the need to file a Form 1099 with the IRS. Remember, the reporting requirement occurs when you as a client sell, NOT when you purchase.


Gold bars (any size bars totaling 1 kilo -- 32.15 troy ounces -- or more)
Gold Maple Leafs (25 ounces or more)
Gold Krugerrands (25 ounces or more)
Gold Mexican Onzas (25 ounces or more)
Silver bars (1,000 ounces or more)
U.S. 90 percent silver coins, pre-1965 ($1,000 face value or more)
Platinum bars (25 ounces or more)
Palladium bars (100 ounces or more)

Berkshire's See's Candy: Magic Formula Stock from 1972?

Warren Buffet may be thinning the soup too much with See's. While a long time favorite of ours, the most recent purchases seem to have gone down in quality. In addition, we buy See''s from a cart at Lord & Taylor. I've watch the subtle decline from a 1lb box go to 12oz and now 11 oz, although the box looks the same. At the same time, the price has gone up from 11 to 12 to 15 now for the 11oz box. Unless you watch it closely, the buyer doesn't realize how they're skimping the weight down. It's a double price increase coupled with a quality decrease

At some point, the soup becomes mostly water. I think Buffet is trying to extract too much profit from See's to fund his other ventures

Ron