Friday Reads
My end of week reading:
• Home-sales data is bogus, Realtors say (NY Post) see also Shine Is Off Asian Properties (WSJ)
• A peek inside ECRI’s black box (Bonddad Blog)
• Questioning The Benefit Of Curbing Short Sales (NYT)
• As Retail Sales Lag, Stores Shuffle the Calendar (NYT)
• Banks See Their Footprint Downsized in 2011 (Yahoo Finance)
• Revealed: huge increase in executive pay for America’s top bosses (Guardian)
• U.K. May Face Derivatives-Law Setback in EU (Bloomberg) see also SEC Appeals Judge’s Rejection of Citigroup Settlement (WSJ)
• Gold Experiences an Identity Crisis (WSJ)
• History lesson: The People and the Patriots (Boston Review)
• Iran hijacked US drone, says Iranian engineer (CS Monitor)
What are you reading?
>
Gold: Safe or Sorry?
Source: Gold Experiences an Identity Crisis, WSJ
Tweet
Facebook
Reddit
Digg this!
December 16th, 2011 at 11:11 am
I own some PMs but would not be surprised if the top is already in. Fear of defaults/crises drove prices higher. For all I know, prices might decline on news of an EU disintegration.
December 16th, 2011 at 11:12 am
One more entry in the intentionally misleading chart creation category…
Be sure to notice that the comment “both are down” is used to describe a situation where gold is UP yoy and stocks are DOWN yoy.
It is true that the rate of gain on gold has decreased, but the a$$-clown who made this chart apparently thinks a 9 percent annual return might be “sorry”.
December 16th, 2011 at 11:23 am
Christopher Hitchens has died. Damn.
http://www.patheos.com/blogs/unreasonablefaith/2011/12/the-20-best-christopher-hitchens-quotes/
December 16th, 2011 at 11:30 am
I find all the ‘Gold is Dead’-Pronouncing to be curious..
it has ~doubled, from the ’008 Lows, no?
http://www.finviz.com/futures_charts.ashx?t=GC&p=w1
and, has been better, again, than..
http://www.finviz.com/futures_charts.ashx?t=ES&p=w1
no?
December 16th, 2011 at 11:35 am
MEH:
Reminds me of Twain and, “ Rumors of my death . . .”
December 16th, 2011 at 11:41 am
Petey,
quite so, very apt~
December 16th, 2011 at 1:13 pm
A sobering look at the Bakken Oil Boom. Energy independence, hah – follow the money.
http://oilprice.com/Energy/Crude-Oil/A-Sobering-Look-at-the-Bakken-Oil-Boom.html
December 16th, 2011 at 1:36 pm
From the CS Monitor article about the captured drone:
Only a clueless neocon would say something so stupid. During the Seventies (back when the Shah was our friend), thousands of Iranians studied science and engineering in U.S. universities.
Note that this ethnocentric armchair general uses an Italian car as an iconic example of high tech, not a made-in-America product.
Sun Tzu could have straightened out this loser (e.g., get inside the head of your opponent). What do you want to bet this swaggering ‘American analyst’ is an Ivy League grad?
December 16th, 2011 at 1:48 pm
If ( or when) the Euro ceases to be, there will follow a big recession in the ECU and it will likely spread to the rest of the world. Central banks will (in) or (re) flate to the max to stop the bleeding. This will bring about big in-flation and since the banks & politicians will be trapped – there never will be a politically correct time to shut off the presses. Gold will dip on the de-flation fear (although it will still outperform the currencies) and then rebound with the in-flation. This is history rhyming and cannot be stopped. As to the gold price, look at the dip from May – Oct ’08 when it went from $1033 to $681, a loss of 34%. This was the DE episode in the ‘flations. If we take 34% from the recent top of $1923, the risk is to $1270 or so. The choice is easy, stay in for the inevitable ride or try to time it. BTW our S/t charts (daily & weekly) are negative but the L/t trend is still in place.
December 16th, 2011 at 2:09 pm
I’m sure the final gold story will be ugly, but this isn’t it. When the euro plate finally hits the floor the assets the counter will be snacked on. Any thoughts on that MF Global gold futures seisure in relation to the recent price action. MF Global brought MF Doom back into rotation on the playlist.
December 16th, 2011 at 2:18 pm
ceo’s pay is justly deserved. not.
and companies really care about their customers.
not
http://pogue.blogs.nytimes.com/2011/12/15/the-year-of-c-e-o-failures-explained/?ref=business
December 16th, 2011 at 2:31 pm
Gold?
No idea. I don’t touch that stuff. I can’t put a value on it. The only circumstances when gold can be truly useful imply a total breakdown of civilization, and those cases, firearms, ammo and canned food are a far better investment. Otherwise, it’s plain casino.
But for those brave enough to touch that most useless commodity, all that buzz about the end of gold may be a buy signal.
Meh, either way.
December 16th, 2011 at 2:44 pm
I got stopped out of my gold position a couple of weeksa ago at the start of this sell-off….I think its long term outlook is positive but short term I am stepping back in until after the end of the year. I do find it somewhat humorous that “everyone” hated it on the way up and now the talking dummies on CNBC are running around saying I told you so…I told you so….heck folks metals are and have always been volatile. If you are weak-hearted try something else to do….lol.
December 16th, 2011 at 2:49 pm
bankster
http://www.nakedcapitalism.com/2011/12/bill-black-dante%E2%80%99s-divine-comedy-%E2%80%93-banksters-edition.html
December 16th, 2011 at 2:53 pm
why bankster and wall street got away with it
http://dealbook.nytimes.com/2011/12/14/in-hunt-for-securities-fraud-a-timid-s-e-c-misses-the-big-game/
December 16th, 2011 at 2:56 pm
i guess you could say wall street really stinks?
http://www.bbc.co.uk/news/magazine-16037798?utm_source=Daily+Digest&utm_campaign=05935071e4-DD_12_16_1112_16_2011&utm_medium=email
December 16th, 2011 at 3:49 pm
@machinehead
The hypocrisy of the chicken-hawks is stunning. Demanding the return of the drone and threatening war with Iran after we violated their airspace with the drone?
December 16th, 2011 at 3:56 pm
“Trend Following Bear Markets”
http://www.dailymarkets.com/stock/2011/12/15/trend-following-bear-markets/
December 16th, 2011 at 4:18 pm
maybe we could learn some thing from Canada?
http://business.financialpost.com/2011/12/16/supreme-court-of-canada-upholds-use-of-general-anti-avoidance-rule-against-li-familys-copthorne-holdings-unit/
December 16th, 2011 at 4:21 pm
governor hair do (Perry)
wonder how this will play out
http://www.texastribune.org/texas-politics/2012-presidential-election/perry-retires-boost-pension-pay/
December 16th, 2011 at 4:56 pm
ceo pay again
http://www.cbsnews.com/8301-505123_162-57343611/highest-paid-ceos-top-earner-takes-home-$145-million/
December 16th, 2011 at 5:21 pm
>> What do you want to bet this swaggering ‘American analyst’ is an Ivy League grad?
Hey now… not all of those grads minored in ‘Murrikan Exceptionalism.
December 16th, 2011 at 5:27 pm
Torrent of bad financial news flows out of Europe
By SHAWN POGATCHNIK | AP
16 Dec 2011 – 52 mins ago
DUBLIN (AP) — Alarming financial news flowed out of Europe in a torrent Friday, just a week after the EU leaders struck a deal they thought would contain the continent’s debt crisis.
The bombardment shredded hopes of a lasting solution to the turmoil that is endangering the euro — the currency used by 17 European nations — and threatening the entire global economy.
In quick succession:
– The Fitch Ratings agency announced it was considering further cuts to the credit scores of six eurozone nations — heavyweights Italy and Spain, as well as Belgium, Cyprus, Ireland and Slovenia. It said all six could face downgrades of one or two notches.
– Ireland’s economy shrunk again much deeper than had been expected, with its third-quarter gross domestic product falling 1.9 percent. Ireland is one of three eurozone nations kept solvent only by an international bailout.
– Bankers and hedge funds were balking in talks about forgiving 50 percent of Greece’s massive debts, a key issue in the debate over Greece’s second rescue bailout.
– The red ink in Spain’s regional governments surged 22 percent in the last year, endangering the central government’s efforts to cut overall Spanish debt.
– France, the second-largest eurozone economy after Germany, warned that it faced at least a temporary recession next year.
– The euro hovered Friday just above $1.30, a cent higher than its 11-month low.
On the positive side, Fitch said France should keep its top AAA credit rating even though the country’s debt load is projected to rise through 2014. Italian lawmakers overwhelmingly passed Premier Mario Monti’s new austerity package in a confidence vote, even though many still objected to its pension reforms.
…
http://news.yahoo.com/torrent-bad-financial-news-flows-europe-192003357.html
December 16th, 2011 at 5:52 pm
questions to ask to avoid a bad scam
1. How and why does this investment strategy work?
Forget about astronomical returns, you want to know the theory behind the investment. The best strategies tend to be straightforward and simple, not much more complicated than “buy low, sell high.”
If you ask why something works and are told “because it does,” you’re being fed garbage.
2. Why does this investment deliver returns that are either bigger or more consistent than what I can find elsewhere?
The Ponzi schemer preys on greed and fear. So they either promise oversized gains or something where you can’t lose money or where returns will always be within a certain range.
At some point, those promises become too good to be true. Before you fall for them, find out which side of the line they are on. If the answer to this questions smells the least bit fishy, it probably is.
3. When can I access my money?
There are plenty of legitimate illiquid investments out there, but someone running a scam doesn’t really want to pay out to anyone. They’ll do it to show the fictitious returns that attract the second round of suckers, but the longer they can keep money in place the better.
If you are pressured to reinvest or you sense reluctance to return your money — especially if you were never told that the investment was illiquid and only touchable under specific conditions – be nervous. And if the terms and conditions of when you get your money back scare you from the start, back away.
4. What are the alternatives being offered by someone else?
One key problem for many of the people who get scammed is that they are particularly trusting, or they are taking an investment plunge that is different from anything they have tried before. It happens to average, ordinary investors far more frequently than it does to the wealthy people who made up many of Madoff’s victims.
If an investment seems particularly attractive, wonder why you are getting the opportunity, and shop around to see what else is out there. Providence did not smile upon you if it brought you a money manager who goes to your church or country club; if the sales pitch sounds good – but trades on your affinity, friendship or something outside of your finances – sit down with a second manager so that you have some basis for comparison and confidence.
5. Who gets the checks?
Your money should be going to a registered investment company — a mutual fund firm, for example — or a broker-dealer that uses a custodian for your funds. If you are writing checks directly to the adviser’s firm, there’s a chance the money is not going where it’s supposed to.
Before you make out a check to the adviser or the firm, ask about the firm’s auditors and custodians, and find out if they are substantive and real. If an adviser can’t get you the name of the custodian in a matter of minutes — it’s not a question that legitimate advisers get often or would necessarily know off the top of their head — that’s a real problem.
http://www.marketwatch.com/story/5-questions-to-escape-the-next-madoff-2011-12-14?pagenumber=2
December 16th, 2011 at 6:31 pm
how WW2 ended the great depression
http://www.bloomberg.com/news/2011-12-16/how-did-world-war-ii-end-the-great-depression-echoes.html
December 16th, 2011 at 6:34 pm
ireland, the leader of all things austerian. leads is all things to do with cutting the budget.
not doing so well.
harbinger of things to come in the US? absolutely
http://www.irisheconomy.ie/index.php/2011/12/16/stones-taught-me-to-fly/
December 16th, 2011 at 6:44 pm
machinehead,
“From the CS Monitor article about the captured drone:
One American analyst ridiculed Iran’s capability, telling Defense News that the loss was ‘like dropping a Ferrari into an ox-cart technology culture’.
Only a clueless neocon would say something so stupid. During the Seventies (back when the Shah was our friend), thousands of Iranians studied science and engineering in U.S. universities.”
Iran is not Iraq. It is a modern society with a modern military.
Now that’s not to say they would be any match for the U.S. in an all-out-war, but if anyone was foolish enough to take Cheney’s ridiculous advice to send American planes on a bombing mission to attempt to destroy the drone, it would likely be a suicide mission. Even if they made it in and could locate where the drone is being held to bomb it, the planes would likely not make it back out. Remember, so-called “stealth” technology is fraudulent.
December 16th, 2011 at 6:57 pm
willid3,
“how WW2 ended the great depression”
The only problem with that meme is that the Great Depression was over by 1939, well before WWII or even rumors of war:
According to the FDIC – “The Great Depression, a worldwide economic downturn, hits the U.S. in 1929 and lasts until about 1939”
The claim that only WWII ended the Great Depression is regurgitation of the RightWing attempt to deny the success of FDR’s “New Deal” in ending the Great Depression.
December 16th, 2011 at 10:46 pm
Joe Friday, i thought the GOP meme was that it wasn’t government spending that pulled us out of the great depression. but WW2 was nothing but government spending. no private sector rescue ever happened. and mostly the great depression was over. but for the missteps in 37.
December 17th, 2011 at 4:31 am
Municipal bankruptcy in Birmingham, AL
The Scandal of the Alabama Poor Cut Off from Water
http://www.bbc.co.uk/news/magazine-16037798
>>The facility, which has been under construction since 1996, was meant to cost about $300m.
But the bill soared to $3.1bn after construction problems and a series of bond and derivatives deals that went sour in the financial meltdown of 2008.<>Investment bank JP Morgan Securities and two of its former directors have been fined for offering bribes to Jefferson County workers and politicians to win business financing the sewer upgrade. <>”When you look at the amount of debt, and you look at the revenue that is produced from the rate payers, there is no way it is going to come down,” says Mr Petelos.
When he was Republican mayor of Birmingham’s neighbouring city of Hoover, Mr Petelos recalls attending a presentation by a Wall Street bank about the same kind of bonds that would later prove to be the downfall of Jefferson County.
He says: “I turned to my finance director and said, ‘did you understand that?’ He said, ‘no I didn’t’. So I said, ‘we had better not buy it then’.”<<
Well, I guess that fine ought to sort everything out over at JP Morgan.
December 17th, 2011 at 11:47 am
DO NOT EAT RARE EARTH MAGNETS!!!
High-Powered Magnet Desk Toys Pose Threat to Children, Teens, According to Osborn Machler
http://www.bizjournals.com/prnewswire/press_releases/2011/12/01/SF15800
December 17th, 2011 at 1:26 pm
willid3,
“I thought the GOP meme was that it wasn’t government spending that pulled us out of the great depression. but WW2 was nothing but government spending. no private sector rescue ever happened.”
First, attempting to find rationality within RightWing propaganda would be an endless fruitless mission.
Second, with the American RightWing, military spending: GOOD, spending to benefit American workers: BAD.
December 17th, 2011 at 6:14 pm
Joe Friday, only in the US did WWII begin on December 7, 1941. WWII began in the Pacific with the invasion of Manchuria, September 19, 1931; alternatively with the Japanese (co-opted with German strategical assistance) full scale invasion of China on July 7, 1937 (that included the Rape of Nanking). WWII began in Europe with the German and Soviet co-invasion of Poland on September 1, 1939. The US truly came into the war “at half-time.” Nearly a decade prior to the US entry into the war an Air Corps Captain named Chennault flew armed patrols over the Hawaiian Islands, so certain was he of the inevitability of the US involvement in the war and the vulnerability of US bases in Hawaii – but his concerns fell on deaf ears.
December 18th, 2011 at 3:37 pm
petessake,
“only in the US did WWII begin on December 7, 1941. WWII began in the Pacific with the invasion of Manchuria, September 19, 1931; alternatively with the Japanese (co-opted with German strategical assistance) full scale invasion of China on July 7, 1937 (that included the Rape of Nanking). WWII began in Europe with the German and Soviet co-invasion of Poland on September 1, 1939.”
But in the context of the issue at hand (the large U.S. government spending on the military build-up), all of those events outside the U.S. are irrelevant, chronologically speaking.
The point was that the Great Depression, which the FDIC pegged from 1929 to 1939 (and they most certainly would know), was over well before any large military spending build-up occurred in this country, which contradicts the pet propaganda theory of the American RightWing, that FDR’s “New Deal” made the Great Depression worse and it took WWII to bring it to an end.
It’s about the timing of the spending, not the combat.