bearfund

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+5 / -1

497 Comments

    • Thu Sep 18th 01:03 AM | Rating: 0 0
      Commented on:
      US Government: No Surprises Left
      Gold is the universal money, always has been. JPY was down 9% today in real terms. Dollars don't matter; we're down to brass tacks here and when trust is nowhere to be found, gold is the ultimate asset. JPY, CHF, NOK, all fine paper. But still paper. The forex markets have become irrelevant; if you don't have gold, you don't have anything.
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    • Thu Sep 18th 00:35 AM | Rating: 0 0
      Commented on:
      Deflation Takes the Reins
      dlaw, um, people aren't buying gold because they're desperate for good money and there aren't enough dollars. They're trading dollars for gold because the dollar isn't good money. There are plenty of dollars, though you'll have a tough time getting any of them if you're a bad bank and the only collateral you can offer are CDOs. Gold is money, nothing else.
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    • Thu Sep 18th 00:30 AM | Rating: 0 0
      Commented on:
      Panic Investors: Gold or Silver?
      Gold is money, nothing else. I like silver just fine, own some myself. It's good. Gold is better. As safe haven assets, the ordering from worst to best is Treasury bonds and notes, Treasury bills, silver, gold. That's exactly what you saw today - the back of the curve up a little (but way off yesterday's high), the front up a lot, silver and gold exploding. The only reason silver outpaced gold was that it's been beaten up so badly. Own both, but never forget that in extremis, gold is the only game in town. You won't make anything on it, but it'll hold its value through anything.
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    • Thu Sep 18th 00:14 AM | Rating: 0 0
      Commented on:
      U.S. Records Another Huge Current Account Deficit
      For the second day in a row I agree with JasonC, which only confirms that this really is the end of the world.

      But here's a thought: instead of creating incentives to save by adding more tax loopholes, how about doing the simplest and most obvious thing: raising interest rates? Why would anyone save when they get only 2-3%? Even if you believe in "core inflation" (which no one who works for a living does), that's far too low. The market is doing the first part of the job: cutting off credit. Time for the Fed to do the second part. If interest rates were 10% I would be happy to deploy some of my gold in plain old savings accounts, where it could do a bank and its corporate borrowers some good, and perhaps some corporate bonds as well. Instead it sits in ... well, the places I keep my gold, doing nothing. A damned shame, really, but that's what happens when you debase the currency and eliminate returns.

      The third part of this equation rests with Congress. Encouraging savings? You could do no better than eliminating the mortgage interest deduction. A reasonable second choice would be capping it at the amount of interest that would have been paid had the loan been taken out at 70% LTV and the rate available to borrowers with an 850 credit score. No longer would there be an incentive to borrow, nor to have poor credit.
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    • Wed Sep 17th 23:30 PM | Rating: 0 0
      Commented on:
      America's Ad Hoc Fiscal and Monetary Policy
      The real FTQ trade began in earnest today. Treasuries? Well, I guess they're safe... but I'd much rather have gold was the mood today. Which is a sign that the BS is reaching an end and push is finally coming to the ultimate shove. The government should load up on debt now while it can, because the cost of borrowing is going to head higher. There is no trust, anywhere, in anything. Nor should there be.
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    • Wed Sep 17th 02:38 AM | Rating: 0 0
      Commented on:
      Is It a Time for Panic or Profit?
      Amazing... JasonC and I are both long PGF. Picked up a pile in July at 14 and a bit more today. Pays me every month at a rate that compensates me for debasement, and there is some upside.

      The difference between us of course is in the rest ... I increased my short position in treasuries today by buying another big chunk of TBT at 57. That's now half my holdings and I don't expect to get bigger but if I see 55 I won't be able to resist. 20 years is a long time; by then things will have gotten much better or the US will be completely bust so this is a sure thing if you have the guts to stare an 8% daily loss in the face and keep growing it.

      Also, consider railroads. Like a rock the past year. I'm long CNI and BNI. They pay little but they hold up, and the business is fine.

      Gold, diversified bank preferreds (fat dividends converted to more gold, naturally), and short Treasuries. Pick up on the theme yet? I'm in line for my free money. Please print some more.
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    • Wed Sep 17th 02:27 AM | Rating: 0 0
      Commented on:
      Best 'Currency' Right Now? It Might Be Gold
      elwind45, I'll give you an ounce of silver for the name and number of the guy who sold you the last thing you ingested before posting. Or a $20 FRN, your choice.
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    • Wed Sep 17th 02:17 AM | Rating: 0 0
      Commented on:
      Tough Love from Ben Bernanke
      In this case, the time between "tough love" (we'll keep interest rates far below even the "core" price increase metric we cherish) and coddling was a few hours. Again, the next move will be down.
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    • Wed Sep 17th 02:13 AM | Rating: 0 0
      Commented on:
      Is U.S. Debt Losing Creditworthiness?
      MarketWatcher, this year will not mark the beginning of any such thing. That happened in 1971.

      As for Treasury CDSs, it's hard to imagine anyone wanting to pay on those. If the US had to borrow in currencies it didn't control (or, heaven forbid, in gold), these would be priced in points up front like every other doomed issuer. As it is, there is zero chance of default. What you get back won't be worth much, though.
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    • Tue Sep 16th 11:27 AM | Rating: 0 0
      Commented on:
      Inflation Concerns? That's So Yesterday
      Hmm, printing more money while output of goods and services is contracting. Can't imagine how that could cause prices to rise.
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    • Tue Sep 16th 02:13 AM | Rating: 0 0
      Commented on:
      When Can We Start Breathing Again?
      JasonC,

      Sounds like the pitiful bleatings of someone who forgot to get himself some gold. It's not too late, though. Amazingly enough, there are still plenty of people willing to accept your dollars and give you real money in return. Not sure how long that will last, so take advantage while you can. No one with gold will ever stand in a "soup line" as you so eloquently put it, no matter how staunch a supporter of free market capitalism he may be. That privilege is reserved for those who insist on socialising risk and are forced to learn once again that they cannot quite manage to force others to pay for their bad choices.
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    • Mon Sep 15th 02:06 AM | Rating: 0 0
      Commented on:
      Bank of America / Merrill: Shotgun Marriage
      Three possibilities:

      1. BAC is a conduit for covert Fed money, injected either for "systemic protection" or perhaps to help friends (or well-armed enemies?) get out of precarious positions.

      2. BAC has balls of steel and wiles to match and will emerge from the crisis far ahead of all other players.

      3. BAC is recklessly building itself up to ensure that it is deemed too big to fail even if its big bets don't pay off.
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    • Mon Sep 15th 01:46 AM | Rating: 0 0
      Commented on:
      An Optimist Looks at the Market
      1. Expensive oil spurs innovation, providing a competitive advantage to the US and other technological leaders. Cheaper oil spurs pollution and climate change and encourages further investment in inefficient living patterns. The best thing that could possibly happen to America is $500 oil.

      2. That number was inflated in several ways and should not be relied upon. Even ignoring the wrong signs on several of the components and the "stimulus checks", one cannot ignore the silly "chained dollars" method of calculating the deflator. GDP growth in real terms has been negative for 5 years and remains so. If you don't believe a chart of nominal GDP priced in gold, ask anyone who works for a living. They'll tell you the same thing. If you happen to ask anyone in California, make that 8 years.

      3. Dead cat bounce inspired by weakness elsewhere.

      4. There are always once in a lifetime opportunities. Today's involve being short, especially Treasuries, which are at historically overvalued levels. And there are always opportunities for good stock pickers. But how is this optimistic? It's no better than at any other time, and probably worse: even "cheap" stocks have earnings yields no higher than 7-8%, and few pay anywhere near that much in dividends. With the dollar losing 10%+ of its value every year, you won't get much out of them. And those dividends won't look like much once the benchmark interest rates hit 10%.

      5. Housing is horribly unaffordable in historical terms. Only with the most myopic view focused solely on the 21st century could anyone conclude otherwise. 20% down? Here in San Francisco, one of America's wealthiest cities, the median household income is $68k. The median house in the City proper costs $790k as of July. Once a frugal household is done paying its crushing tax bill and the rent on a modest rent-controlled apartment, it might save $15k a year. In a mere 11 years (no help from the Fed's 2% interest rates here, eh?), it would have the down payment saved up. Too bad it'll need to put 60% down to qualify for a mortgage it can actually afford. When the median house costs 3x the median income, housing is cheap. When it costs 10x and people call that cheap because 2 years ago it was 14x, those people are silly but housing is still expensive.

      Keeping an emergency fund, unless it's in gold, and living within your means are foolish in the extreme. Borrow more, spend lavishly, and declare bankruptcy when when the game is up. The entire system is set up to encourage that, and you would do well to get your piece of the pie while the Chinese are still willing to lend it to us. There are no prizes for prudence; you'll be stuck with a fat tax bill no matter what. Might as well enjoy getting there.
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    • Mon Sep 15th 00:12 AM | Rating: 0 0
      Commented on:
      Crunching Numbers: Why I'd Buy AIG
      Not looking good, ace. Tomorrow's buyers might profit, but you won't, and our experience in this bust shows that once they start looking like this, it's over. Try a company that isn't crawling to the Fed to save itself. Or consider senior notes in any financial company; that's where the "systemic risk" put will save your bacon.
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    • Mon Sep 15th 00:06 AM | Rating: 0 0
      Commented on:
      When Can We Start Breathing Again?
      Regulators have done everything imaginable to avoid the outright printing of money; we now have "cash" that is backed by stocks and junk bonds and yields a mere 1.8%, but we don't yet have a galactic flood of it. That can and will change. They still have the printing press available to them, and who can doubt their eventual decision to employ it?

      At the same time, one wonders if this is to be the high-water mark of this particular disaster. Surely there are many more bank failures to come, and some hedge fund collapses. But 2 major i-banks in one weekend (only one in a succession of increasingly scary weekends), AIG's epic collapse, and veterans like John Jansen calling the events "FINANCIAL SCIENCE FICTION" suggests to me that this may finally be the worst we'll see. We may see more equally bad episodes before it's over, but it's going to be hard to top this. Ballsy contrarians with hefty sacks of gold ought to be tempted a bit tomorrow. I know I will be.
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