5/9/12

This post is a little later than usual. I err on the side of my days as a journalist (Bloomberg, CNBC, Fox etc) and attempt to come up with a solid reason for what might move a market even if I do know that a gazillion variables are at work (time consuming, bad habit). Take, for example gold: last week we were bouncing around in $1650 to the $1660 area. Today, we’re back to the $1580s. What happened?

For long term physical holders, these moves are not of great concern. Gold ultimately goes higher. Central Banks led by the Fed will have no choice but to continually print more fiat money. There is nothing complicated about what will happen: the more fiat money, the less valuable the fiat currency which will enable the price of gold to rise. To add a dash of complication, since the dollar is the standard bearer of currencies in the view of the world (for the most part though the tide is turning), it’s a proposition of a dollar that has fallen over time as opposed to gold going up. One day this lopsided world view will be corrected and gold will be seen, as it really already is and always has been, as the standard bearer for world currencies.

Short term, the dollar is up again today. This pulls the value of gold lower in the short term. This factor alone could be enough to explain gold’s recent weakness. Who was predicting 10 years ago that the dollar would hold its own as a refuge from collapsing countries? Not many folks. Gary Shilling comes to mind – a long term dollar bull and he’s sticking to that forecast.

Other factors might include a liquidation of a large paper position somewhere in the world, banks in Europe could be selling gold again. This is where the journalist way of figuring out a specific reason can sometimes fall short. Other activities are going on behind a curtain that even journalists have no access to.

As John P Morgan is purported to have once said – markets shall fluctuate. That could be reason enough for gold’s recent move, though for reporters, that’s a reason that would get them in trouble with editors.

The near term gold chart is not pretty looking.

A sideways to weaker chart pattern that shows support in the $1540 area, but consider as well the delicate balance between established Western nations that are gold superpowers versus Asian contenders for gold that need to catch up to the West. Let the price fall too far and an opportunity is opened for the East to accumulate more at cheaper prices so the gap between Eastern and Western gold holdings would then narrow further (bad for the West’s gold advantage).  This is why I see a floor under the price of gold. I’ve referred to this floor as the “Asian put” that keeps the Western Powers That Be in check. Perhaps they would like to destroy the price of gold so that it no longer outs the fiat circus, but they can’t.  The bears should not underestimate this “put”, but for now have the upper hand in terms of the near term direction of the gold market. As a result, I am not expecting gold to go to $1000. If it does, you may send me your best humble pie and I will eat it, but I doubt I will have to with respect to the concept of a gold collapse to $1k.

These assaults on gold are good buying opportunities, though I recognize that after a while one can run out of fiat cash to sieze on all of these ‘buying opportunities”. But for those who have waited and are not in, legging in at these ranges is something to be further explored.

Supplemental Reading: 5 things gold is telling us http://www.theglobeandmail.com/globe-investor/markets/markets-blog/5-things-gold-is-telling-us/article2427558/ via @globeandmail

The Stock Market

If this were not an election year, I’d be yammering about the end of the recent bull leg up in stocks.  But since this is an election year, the bears need to be on guard for a surprise that would lift key stock indicators. Should the Dow portray an image of ugliness, along with a rough labor market and a moribund national housing picture – then stick a fork in Obama. My bet is that while not much can be done to make a big difference in the condition of housing and labor due to structural inertia, the stock market is likely to be the target of some sort of juicing to convince the masses that their 401ks are fine thanks to a healthy Dow. So I still do not rule out some sort of application of Fed magic to boost key market indices – although here again, the bears are holding the upper hand short term.  I also anticipate that with the next leg up in stocks, anyone with an agenda that is not pro Obama will attempt to apply equal and opposing force to whatever the Fed may concoct. In other words, we are likely to see some very choppy and volatile trading in the months ahead. But still, bet against the Fed? One day it will pay off in spades, but still not at this point.

We are near an important support area. If broken it will be so much for the idea of ‘Don’t Sell in May because this is an election year’.. or why ‘heding is so important’.

Maybe the O. team wants a summer stock market mess in order to engineer a fall rebound? You can’t put anything past Washington and the power hungry,, though I am not willing to dismiss bullish overtone potential for the broader stock market  going into November, 2012.  We could do an entire post on the ugliness of deeper market internals that mostly professionals, or traders follow, but that’s a post for another day. The illusion of a good stock market will be focused on big cap names and key indices.

–

5/7/12

Election Correction

U.S. stock futures looked scary late yesterday evening in reaction to key favored agents of the banking cabal in Europe losing political contests.  Sarkozy of France has been ousted by the voters and members of the Greek ruling parties aligned with the Troika failed to win a majority to form a new government.

This morning the losses have moderated, but stock futures remain a touch lower.  This is only the beginning of the political high jinx in Europe, which no reader to this space should be surprised of since we highlighted these 2012 elections at the start of the new year.

Also, as often discussed in this space – no one should have much of an issue with this downdraft in the market since we have often discussed the need for hedging in a volatile market.

The overall meme in reaction to the elections in Europe is that pan European austerity government policies are falling due to unhappy regional electorates. The outcome of these elections are seen, as of today, as an indicator that future elections outcomes in Europe could usher in the end to the European Union (nationalism over broad based European monetary policy), which in turn would slow global economic growth. European masses love their socialism and certainly not austerity and appear ready to bag the EU to gain relief from austerity, even if the dismissal of austerity could hasten an even worse financial situation for Europe.  

Let’s think for a moment of other potentials.

1. 1.       In the U.K. will Cameron be kicked out before year end?
2. 2.       Renewed socialist control in Serbia? – yes, in the place where socialism is associated with that infamous figure – Slobodan Milosevic.
3. 3.       More signs of political shift in Germany following the ability of the Pirate Party (digital freedom of info group) to secure seats in the Parliament of northern German state Schleswig-Holstein parliament. The so called Free Democrats have also scored victories.

Is this the real deal setting us up for a stock market crash? My gut tells me to wait and see whether there might be some sort of coordinated Central Bank activity to calm the markets should weakness snowball to panic stock selling. Gold’s relative UNDER performance to the downside relative to other assets may be a clue not to rule out intervention since we obviously live in times where intervention is accepted and expected.

Obama Thought

Since the monetary pain of many in France and Greece inspired an all-out and well deserved temper tantrum at the voting booths (even if the European system will die more quickly should socialism rule the roost), will the same sort of economic frustration make for November dramatics here in the U.S? More than one pundit has suggested that Romney is not the enemy that Obama faces, but the economy since even in the face of massive spending props (trillions of dollars), the economy is still quite sluggish. Here’s a chart from the Washington Post that may be the road to pink slipping Obama in November:

WaPo could also put together a chart on national real estate, which also paints a pretty bad picture of non recovery.

Gold, Berkshire, the Metals…

Many of you are uncivilized in the eyes of Warren Buffet’s partner: Charlie Munger: Civilized people won’t buy gold http://t.co/IUwtOFGv

To boil down the Berkshire Hathaway weekend media circus shareholders meeting, the company’s earnings were weaker than forecast by analysts (media ignored the weaker than expected aspect). The only headline that had any attention grabbing potential to it, was the Munger comment about gold. I don’t hold Munger in much contempt for making such a statement. What would you do, if you were an obscure (except to the CNBC crowd) 88 year old man, closing in on the drooling stage of life? Why, I would come up with some sort of outrageous statement. Good work Charlie, you grabbed their attention and avoided being completely overshadowed by that relative youngster associate of yours – Warren Buffett.

Of course, Buffett also stuck to his claptrap statements about the unproductiveness of gold vs the productivity of his companies – which still couldn’t meet the earnings estimates bar.  

More on Gold

Gold ran in place last week, while silver lost more ground from the year’s highs. Gold Drops 1.2% for Week as Silver Falls 3.1%, US Gold Eagles Surge: http://www.coinnews.net/2012/05/05/gold-drops-1-2-for-week-as-silver-falls-3-1-us-gold-eagles-surge/

From Finvez, the chart of overall commodities performance (year to date):

Adjunct to Gold: Bernanke Drives the Art Market

As usual, Jim Grant, of Grant’s Interest Rate Observer has a spot on analysis – must watch. The Fed is the squid of squids:

Concerning Munch’s Scream being sold to the highest bidder at $119 mln… Dow Theory’s Richard Russell in a King World interview:

“…‘the Scream’, a painting by Munch, sold at auction for a record $119 million.  I doubt if the buyer cares whether that painting will be worth $100 million, $50 million or $200 million ten years from now.  The buyer knows that he owns a priceless work of art, something that will double in value in case of wild inflation or something that will be worth $60 million during the worst deflation. 

Even if the dollar becomes worthless as a unit of exchange, the Munch painting will still be worth a fortune in whatever unit of money is in favor ten or fifty years from now.

All of which tells us something about gold.  For over five thousand years, gold has represented purchasing power.  No matter what form of money was in existence at the time, gold possessed purchasing power, which is why many wise men own gold.”

Read more at KingWorldNews.com.

CROCS

Is there further near term shorting ahead for this stock? I noticed an informal Facebook “research poll” in the side column where the advertising is.  75% of poll respondents say they will “definitely not buy” $CROX shoes in the next 3 months. The stock broke support Friday in the 19 area. January Gap fill next in the 15 area?

Facebook

The Wall Street Journal has crunched some numbers. YOU are actually worth quite a bit to Facebook. To Facebook You’re Worth $80.95. Summary: http://www.wilmott.com/blogs/irismack/index.cfm/2012/5/6/Wall-Street-Journal-To-Facebook-Youre-Worth-8095

Copper

Not worth $3.68 a pound. Copper is not gold: Thief ‘Extremely Grave’ After He’s Shocked And Catches On Fire « CBS http://stks.co/3h2h.

Jim again, copper will remain stuck in this range as the battle rages over whether the world economy stalls, or QE shall win the day.

–

5/4/12

Labor Market Friday

What a pile of steaming…. well, never mind. Headline unemployment managed to slip to 8.1% in April while in a separate report, non-farm payrolls rose by a smaller than expected 115,000.  Again, you need to dig deeper to see some reality.  Here’s an example in today’s labor department data dump: people not in the labor force rose by 522,000 from 87,897,000 to a record 88,419,000. That forces the labor force participation rate to decline to a new 30 year low of 64.3%. Yes – just make the people disappear from the counting process and voila, unemployment falls even as job creation is really contracting.  

ZeroHedge.com puts it this way:

“Here is what the  unadjusted data that led
to this number says. The seasonal addback in  April was +22K, a rapid
break from the last 3 years when April saw a  negative seasonal
adjustment following the traditional huge positive  adjustments in the
January-March period, which in turn means that the  record warm winter
give back has not even started! As a result, the  seasonal addbacks in
2012 are now a massive 4,499,000 jobs: jobs that  have not been added
but are expected to materialize based on historical  seasonal patterns.
And just as importantly, in April the Birth-Death  addition was a
whopping 206K, far greater than the comparable addition  in 2010 and
2011, and much bigger than expected, which brings the year  total now to
a +20K cumulative total. It means, that by rough  estimation, the
reality is that in April the unadjusted, unbirth/deathed  number was a
decline of -111,000, and likely far worse once the true  weather
adjustments start taking place. This number is corroborated by  the
Household Survey which dropped by 169,000. So much for the recovery.”

The initial market reaction? Stock futures are selling off. Perhaps it will be a weak Friday for the stock market. Gold has drifted off the lows. The Fed is in denial if it does not realize the economy will soon need more propping from its traditional methods with half-lives that continue to decline. Time is of the essense as November moves closer into view. One sour labor department report won’t be enough to move the Fed  to fresh all-out QE, as opposed to maintaining just Twist (which is slated to end in just over a month); but more negative tea leaves may change the game. With a dead labor market, it’s hard to believe that other economic figures are going to be gangbusters.

Facebook

The coming Facebook IPO is already a disaster for some. Facebook shares are already trading in the online second marketplaces, where a variety of alternative assets trade, including privately held stock. The shares have been changing hands above $40.  Yesterday the price range for the IPO was set at between $28 to $35 per share. Oopsies for now, but this does look expensive even at $28.

$FB valuation calculator. http://stks.co/3fPO.

Gold Trades at a Record High

Where’s the gold bull market? It’s in New Delhi. Gold sets new record at Rs 29750/ 10 gms – Zee News http://bit.ly/KdL0pu. Interestingly, as part of the article, silver is weak in India.

Globally, gold has been drifting in its recent range looking for more macro economic clues.

This isn’t a new revelation (since this space revealed last year, gold price suppression showing up in Wiki leak dump), but this theme needs to gain wider understanding and acceptance.  CoinWeek News:: Former Central Banker Confirms US Government Gold Price Suppression Efforts http://bit.ly/IJztR6

Here’s a must read column. The gold standard? Not as kooky as some make it out to be. “Gold standard for all, from nuts to Paul Krugman | http://bloom.bg/Khq5FE”

Yahoo!

This is an amazing situation. Will Yahoo have to fire another ceo? TWO IMPOSSIBLE CHOICES: Should Yahoo Fire Scott Thompson Over His Made Up Comp Sci Degree? [POLL] by @nichcarlsonhttp://read.bi/IJCxwv.

Sunday Elections to Watch

France and Greece Poised for Crucial Votes Sunday http://nyti.ms/KyZ1wf

Speaking of Greece. Ya can’t make this stuff up: (the tax bills haven’t gone out in Greece ahead of the election)… http://hat4uk.wordpress.com/ (Thanks to long time reader Peter Pierce for bringing this to my attention).

April 28, 2012

Here’s a March 30 Tweet that I tweeted as @jkings1… “Bernanke not about to remove the punch bowl. Good spring setup for stocks. Now not the time for aggressive shorting via $SPY”.

I said essentially the same thing in this space on April 10, and now on April 28 I am still saying the same thing, though I would add a dose more of caution may be in order since the market is now becoming a bit overbought. As I stated April 10, at that time, I saw no signs of an imminent market crash. My indicators are still telling me that likely through the summer and fall, there shall not be a crash. The crash callers are too soon. They have a better chance of seeing market trouble after the election.

If you look back at my Financial Balderdash blog, I did call the subprime meltdown in late 2006 and stuck to a very bearish view of the stock market from late 2007 through 2008. I was working at Fox Business at the time as an editor where I would prepare the news plan (agenda as it’s called in the business) for the network each morning, but I still think they thought I was a crazy perma bear.  I was a non-mainstream media person, or a square peg in a round hole while I was at Fox. I shunned anything the smelled of market cheerleading.  So there were times when the News Director would add something to the Agenda akin to being either fluff, or overly optimistic at the time.  That was a source of conflict. The funniest irony of the experience, was the launch of the channel coincided with the peak of the market (Dow 14,000).

I dredge up my past calls, not to toot my own horn, but to demonstrate that I am quite capable of making bearish macro market calls when I see them, however, unlike many of my counterparts who blog and do bearish YouTube videos, etc., I am not stuck in a permanent bearish viewpoint, nor am I ever married to any permanent bullish outlook (although gold may be the exception).  I just simply think the agenda of the Fed comes down on the side of the market bulls for the time being.

I look at the fundamentals.  I have prioritized understanding the fundamentals MORE than charts of the overall market in the last few years as I have seen and heard dire predictions of the chartists and the fundamental people come and go. While I realize there are literally dozens of negative fundamentals, here we are still are going about our daily lives and the forces who control the game, the same Powers That Be who have been around for ages and who have become more powerful than ever, remain (for now) in control.

The point being, the markets are not going to collapse unless the PTB somehow loses control, or wishes to see the markets unravel. Many still underestimate the resolve of the PTB to keep the system going – even after the near meltdown in ’08, which miraculously turned into at least a stock melt up in mid 2009. In the world of finance, the biggest poster child for the PTB is the Federal Reserve. And it’s quite clear that at the end of the day, the Fed’s operatives are not going to be sleeping at the switch in an election year.  Ben works for the Banks who own the Fed, Ben works indirectly for POTUS. He will not cross either one, or so it seems so far.

You’ll recall, when Greeny (Alan Greenspan) was in the driver’s seat he did make life miserable for Bush 1 with a higher interest rate policy that kept everyone thinking the U.S. was in official recession, until we found some months later that the recession had ended six months before Bush 1 was defeated. “It’s the economy, stupid!” resonated loudly with the body politic and the elder Bush was out. Bernanke was have the song, “I’ve Got The Power” loaded into his iPod, but it’s doubtful he will use it against Obummer and certainly that banks would be pulverized by higher rates.

Anyway, this time things are completely different as if we moved from Earth to Uranus. The NBER says we are not in a recession and the full court press is on from the daily White House press briefings to the corporatist broadcasters that things are picking up. The Fed will do everything to ensure that message can continue to be broadcast for the benefit of the present POTUS. The Fed will also dare not raise interest rates this year (Ben already covered by saying it won’t be until late 2014 before we see an end to near zero interest rate policy). For those of us who know the real score, it’s frustrating that Fed is such a tool of malevolent forces, but that’s the way things are.

As John P Morgan once stated (at least is said to have stated): “markets will fluctuate.” I am not saying every day will be an up day for the stock market, but the 2% and 3% declines that have peppered the market record over the last few years have been more often than not been followed by rebounds which have taken us from the 2009 lows to the present approach to all time highs.  Retail may be dead on Wall Street, but the PTB have a vested interest in goosing market higher. A few institutional buy programs involving SPX futures and it’s off to the races. In the PTB view who needs the smaller retail investor. In other words, the weaker volume in this latest move up isn’t a great concern to me and in my opinion is causing market pundits to wrongly conclude that the uptrend is not real.  Let me tell you something, the uptrend is a real slap in the face to market bears and slaps are real, indeed. Al Einstein, it has been said, slapped a guy in the face for questioning reality and asked if the slap was real, or not.  A market gain, or loss is just that. It’s real and any number of variables into the ‘why’ of the market move cannot be used to condemn a move in the market.

The opportunity remains for those who “play” the markets, that they can convert their fiat profits to tangible assets. This won’t be the case forever. I will try to let you know in the coming months when the you-know-what is about to hit the fan just as was done by your writer in late 2006.

There’s no doubt in my mind that the fan is eventually going to get hit and will fall over and be destroyed.  Those are going to be perilous times, but for now the corrupt status quo is managing to hold things up. To those who constantly harp on the coming end, I ask, ‘why in such a rush for anarchy?’ All the gold standard people of the turn of the last century are dead.  All of today’s society raised on the fiat regime have no idea about money backed by metals and how such a system would work. I even find it to be a perplexing set of thoughts given the complexities of the markets which are dangerously levered due to such things as credit default swaps and currency swaps which were not a factor during the real Gold Standard days.  The system will need to be turned upside down on its head due to a quadrillion+ in notionally valued derivatives. It will take a jarring change in mindset by whatever terrible events that shall unfold to defeat the manipulative forces who embrace fiat money and for society to favor a metals backed currency system, or something that would have integrity and honesty. Fiscal rectitude is scoffed at and ignored by those who control the spending in Washington today. Surely an end to our profligate paradigm shall eventually arrive, but the timing doesn’t seem right for it to happen as early as May, or June as I’ve been noticing on the Twitter feed.  Don’t fall in love with this bullish phase stock phase, hedging is always a wise thing to do, especially for larger accounts, but those who have been staying away from the market anticipating the collapse have erred to the point of missing out on making a fortune that again can be converted into real, tangible assets.If Wall Street wasn’t viewed with such negativity by the general public, Obama could seize on the stupendous gains Wall Street has experienced since the ’09 lows. We know, however, that would backfire since the gains have come due to the biggest corporate welfare schemes ever – such as TARP, the creation of reserves for banks known as QE, along with the Fed taking paper  with zero value on to its balance sheet at face value.

Gold

My bullish long term gold views have not changed. It’s been a tough slog only for those who have been looking to make the quick “killing” with dreams of $10,000+ per ounce gold right away, or for those who play GLD and its options. I think the day shall eventually come when we see huge spikes up in gold. One will be pleased to have something of such value, but the overall world – especially for the U.S. and the end of dollar hegemony – is not going to be in a happy place.  The best mindset, as I have noted in the past is to see gold in the light of human history – as a store of value, or insurance for the time when fiat currencies fail (which has happened time and time again). Gold gained acceptance as a currency eons ago — all that I can say, is that many are arrogant in this day and age to condemn gold t the trash heap of history. Gold is an exception to the cover your ass mentality of ‘past performance is no guarantee of future results’. Gold has withstood the test of time, thousands of years worth of time.

This blog noted the other day, the arrangements going on between China and Iran to conduct petro business in gold.  This is a wild card situation for the dollar and has the potential to do more damage to the buck. The trading of Iranian oil for Chinese gold is slated to start at the end of June. The gold bears had better be praying that China does not spark a short squeeze in gold since it has plenty of funny money from the West to make gold purchases in order to keep up with payments to Iran, or anyone for oil. Jim Sinclair of JS Mineset has also spread speculation in the last few days that China and Russia are considering making the Euro their reserve currency.  Should that happen, the dollar will be in imminent peril and the bull market for stocks would end. Keep that in mind as a must watch situation.

Dollar Collar

The developing and ongoing factors positive for gold (like heavy Central Bank demand to name just one) keep me in the long term mode of being a long term bear on the dollar. Sadly, the dollar benchmark measurement is the flawed Dollar Index which leaves out developing economies in South America and Asia.  There is already more damage to the dollar than realized.

In particular, the scourge of real negative interest rates is a cumulative long term dollar killer. But having said that, a delicate balance has been maintained in the dollar index and the key euro overweighting in the index.  Why the euro remains fairly firm on a relative basis (relative to all of the European problems) is a mystery at least to me. While many argue the Fed’s is on a mission to keep the dollar weak to enhance our trade advantage which aids in keeping some modicum of economic growth and bring with it the potential to monetize debt, the exception seems to be the euro being effectively pegged in the $1.30 area. Is that an accident, and a true depiction of the state of the not so mighty Euroland, or are other strange things going on behind closed doors as Sinclar has suggested? It’s all speculation for now, but a link up of Russia and China to the Euro would not be such a good thing for the dollar, I write in an understated sort of way.

See You Monday!

4/26/12

VIDEO: Gold standard inevitable, $10k/oz looms, says new
book http://reut.rs/I3bRTI

The Analysts Again Speak on Gold

Goldman Sachs maintains a near-term “neutral” for commodities.
The brokerage sees potential downside risks in commodities: “In particular,
renewed European sovereign-debt concerns on top of a modest slowing in U.S.
growth leave us cautious, despite signs that China is beginning to reaccelerate
from the policy induced slowdown late last year.” At the same time, Goldman is favoring WTI
crude oil and gold as potential standouts and rates both as “overweight”. Gold
will rise on ongoing demand and due to weak economic fundamentals in Europe.
Goldman sees WTI’s price converging on higher price North Sea Brent crude.

Commerzbank sees central banks as
net gold buyers again in 2012. The latest IMF data released Tuesday show
Central banks continued t buy gold in
March. The Mexican central bank led the way with the purchase of 16.8 tons of
gold last month. Over 438 tons of gold was bought by central banks last year, according
to the World Gold Council.

***This was an interesting piece that I noticed on Kitco:

CPM Group: Inflation-Adjusted Commodity Prices Fall Since
1850

“Real, inflation-adjusted commodity prices have fallen since
around the year 1850 despite an exponential increase in commodity
consumption, says CPM Group. The consultancy’s research counters the notion of
many that rising populations, incomes and wealth mean long-run prices of
commodities must increase. Since 1850, the world’s population has risen
seven-fold and the global economy expanded 85 times (in 1990 dollar terms), yet
inflation-adjusted commodity prices have been cut in half, CPM Group says.
“Economic theory backs the historical record,” CPM Group says. “Theoretically,
industrialization should lead to even greater increases in the output of most
commodities, at lower prices, with increased discovery and recovery rates, and
lower discovery and development costs, for metals and energy resources due to
technological advances. This is exactly what has happened. The world’s
population has exploded and overall wealth has risen sharply. These increases
have led to increased total demand for commodities. Even so, prices have fallen
in the long run. Markets do not always respond to the most simple analyses, a
point producers, investors, and others should heed.”

Billionaire investor Jim Rogers: Gold to Have First
Down Year in Over a Decade http://sns.mx/GucPy1. Jim here: We shall see
is all I can say.

4/25/12

Gold as Insurance

I was thinking the other day about insurance. Home insurers
are paying less on claims caused by weather related damage. The weather has
been kooky and downright deadly in many places across the fruited plain. It
figures that insurance companies would try to back out on paying. That was
never in their plans, which actually counted on few claims, but mostly payment
of premiums by the policy holders. Corruption as usual from the corpratists.

My thoughts then turned to gold – a real insurance that will
be there come the time when one will need it. More and more people that I run
into are realizing that gold and silver are not paper, but assets that are at
the very least a store of value. This is nothing new: people have realized this
real asset concept about gold, silver and other metals for 6,000 years. Gold
and silver are a simple proposition of whether to stick with paper with its
shorter track record measured in about a century and a quarter of evolving
paper products, or putting at least some money into a hard asset that has a
legacy measured in eons. The choice is yours. Many readers know the answer to
the paper versus metals riddle and my pointing it out can be equated to
preaching to the choir in this forum, but these website spaces are like giant
tents that people are walking into and out of – so not everyone realizes the
importance of the PMs (precious metals). The CAMI site is a doorway to the
world of gold and silver related products.

Price wise, gold remains in its consolidation mode close
again to $1650. When will it break out? Yesterday’s news about China’s plans to
circumvent U.S. sanctions in deal with Iran to buy its ooil using gold starting
this summer puts a potential breakout within view. An up leg for gold might
precede the implied higher demand for gold due to the prospect of China using
it as a currency with Iran.  $1,700 must
obviously be surmounted eventually as a strong near term bullish signal. If
$1600 is breached to the downside, investor Jim Rogers could get his wish to
buy more gold at closer to $1500. Given the developments going on with China,
the ongoing Central Bank buying of gold and the ongoing European woes (to say
nothing about the horrible U.S. balance sheet), to me at least, the deck is stacked
in favor of a ride higher for gold in the coming weeks.

–

APPLE

Fade the gap up? How often do mega cap companies surge 10%
on strong earnings – even when the earnings are barn burner numbers. If you
didn’t get in before yesterday’s numbers, it’s probably better to let the dust
settle rather than chase a $50 move at the open, in my opinion.

Shorts are having their heads handed to them – a real pole
axing. One never knows what reaction an earnings report will bring. Before
shorting, one must always ask whether it’s really over for the target company.
Within a few years Apple will go from earnings now of over $12 a share a
quarter to over $20/sh per quarter. Where do you suppose the stock will be
then? IF society is still in its dollar hegemony paradigm, we’re talking about Apple
approaching $1,000 a share if not above.

–

For the broader market, the question now is whether Apple
will reverse the rotation into defensive names? Apple, however powerful it is,
is only one stock in a market of thousands of stocks though improved sentiment
from a key Wall Street name can still help.
As I’ve stated in the past, Apple is really about high end retail and
business for it is booming.  It will be
interesting to whether Amazon can knock the ball out of the park on Thursday
afternoon with its earnings. That’s a riskier situation. Closely watched will
be margins at Amazon.

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4/23/12
It’s a Blue Monday on Wall Street. Are investors recognizing the hazards that have existed all along? Is the end of the ‘embrace the delusion’? Probably not, but on occasion the markets do have their moments of clarity. This morning is going to be one of those moments in time. Is this the big one that Fred G. Sanford always talked about? Urban Survival’s George Ure says he is “getting 100% short.” Is that the contrarian call of the century? Lol, just kidding. George, whose work I admire could be right, anyone could be right, or wrong from one day to the next. Wall Street is a Mark Twain like experience of if you don’t the weather just wait a day, or two.