By: Bill Bonner & The Daily Reckoning Crew - 23 January, 2009
-Wages of sin…Mommas should now be urging their babies to go into other lines of work - politics, maybe… -Everyone wants to offload the risks of the financial sector onto the taxpayer…practically the first thing we hear from the Obama administration is worrying… -Property development in Europe is a disaster…the best of the web…and more! Full Story
By: The Gold Report and Dennis Gartman - 23 January, 2009
The inimitable Dennis Gartman, who has been publishing his popular commentary since 1987, took a break from one of his busy days to chat with The Gold Report. As he reads it, things will get worse before they get better—but we’re not facing Armageddon. Full Story
By: David Chapman, Union Securities - 23 January, 2009
This past weekend, visiting our local Chapters book store, we were struck with the large display up front of books telling us about the new depression, how we got there and how to survive it, books about the Great Depression and a host of others. Full Story
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - 23 January, 2009
Already into 2009 we are experiencing trend-threatening moves in various markets. Should we believe that the markets are directionless? Can we rely on the charts to give us direction? What of the fundamentals of markets are they reliable guides? Most important of all, are investors capable of responding to the directions given by fundamental and technical indicators? Are these ridiculous questions? They would have been a couple of years ago, but now need to be considered carefully. Full Story
NOW, I'M NO banking analyst, but that gap on my resumé is starting to look like a very good thing indeed. For who'd want to be stuck with the title "Banking Stock Analyst" now the banks are all broke...? Unless you already wanted to work for government anyway. Full Story
By: The editors of BIG GOLD, Casey Research - 23 January, 2009
At this writing, gold is still 15% off its peak, at least in U.S. dollars. Yet at the same time, the metal is cruising at or near all-time highs against a host of other currencies, including the Swiss franc, British pound, Canadian dollar, Australian dollar, and Indian rupee. Full Story
By: Adam Hamilton, Zeal Intelligence LLC - 23 January, 2009
Late 2008’s stock panic has certainly had a complex and multifaceted impact on popular psychology. Mindsets and outlooks that were scoffed at as recently as 6 months ago have suddenly become fashionable. One of the more intriguing is the meteoric rise to prominence of the deflation thesis. Full Story
Unfortunately, “Buy and Hold” rarely works anymore. Moreover, given the structural changes in our Markets and Economy, it is unlikely to work for several years, if ever again. Consider: The endowments of Harvard and Princeton reportedly dropped by about 25% in the last six months of 2008, and Yale’s endowment also reportedly lost about 25% of its value. Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 23 January, 2009
Barack Obama has spoken often of sacrifice. And as recently as a week ago, he said that to stave off the deepening recession Americans should be prepared to face "trillion dollar deficits for years to come." Full Story
2008 was the year that collatorised debt obligations wiped out the capital bases of the west's biggest banks, which played itself out during September 2008 following the china syndrome chain reaction that followed the Lehman's bust that led to the unprecedented actions of capital injections and nationalisation of too big to fail banks that looks set to continue for the whole of 2009 and beyond. Full Story
There once was a pitched battle of words raging at slate.com that is as effusive a case of kettle-calling-the-pot-black as I’ve ever seen. Rock star economist Paul Krugman and comparatively anonymous Professor James K. Galbraith were arguing over who is the “real” economist. This was back in 1998. Full Story
The moral of the story? If we get rid of the Reserve, we get rid of an institution with the power to undercut all investors and to provide cheap credit divorced from economic reality, and if we also get rid of the tax bias in favor of debt financing, then companies will have a more rational balance of capital and debt, investors may again be able to make money on their money, and companies will have a greater ability to hang on to workers, who they will need when business picks up again. Full Story
By: David Morgan, Silver Investor - 23 January, 2009
Bloomberg put out some interesting news regarding the silver market stating that refined silver output in China has peaked and it could stop growing because less will be produced as a result of halting of mine expansions, higher costs for production and lower prices received for the metal itself. Full Story
By: The Energy Report and Marin Katusa - 23 January, 2009
The first fundamental that everyone’s well aware of is the HEU (U.S.–Russian Highly Enriched Uranium) agreement coming to an end. Now the question is: are the Russians going to renegotiate the HEU agreements on the old terms? Definitely not. We’ve done all our calculations and it’s not economically viable for the Russians to continue the contract as it was. So, if America is able to get the HEU agreement, it’s going to be on some new terms, probably around $60 per pound uranium. Full Story
By: Andrew Mickey, Q1 Publishing - 23 January, 2009
Earlier today, China announced its economy grew at a 6.8% in Q4. This is not very good news at all. China’s GDP growth is inching perilously close to 6% economic growth. Which is viewed as the minimum to keep the lights on. It’s a critical level the world is watching closely. Full Story
By: Richard Daughty, The MOGAMBO GURU - 23 January, 2009
'Strategic priorities' are, of course, 'Keeping this thing going as long as possible so that I can keep this job where I spend a lot of my time goofing off and finagling to get the most money and benefits for myself', but what is a 'liquidity buffer'? Full Story
By: Rick Ackerman, Rick's Picks - 23 January, 2009
We’ll know soon enough whether Obama’s presidency will begin with a soak-the-rich belly-flop on tax policy. He’s said up till now that he would not even consider a tax hike, given the deathly state of the economy. But if that is so, what were the usual suspects doing on Fox yesterday, telling Neil Cavuto that Obama has not really made up his mind? Full Story
President Obama was sworn in. As he was being sworn economic issues surfaced concerning bank values both abroad and here in America. Citigroup, Bank of America and State Street Bank have all been in the news and have been under what I term a “bear raid”. This “raid” has had an interesting impact on the Dollar, Treasuries and Gold. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 22 January, 2009
-Obama - not much different that Reagan, Clinton or the Bushes…American finance: strange and preposterous, but never dull… -A division of delusion, which led to huge bubbles…who will suffer most when the bus comes? -One thing that Team Obama will fight to the death…countries around the world play "hot potato" with correction…and more! Full Story
By: Andrew Mickey, Q1 Publishing - 22 January, 2009
Do you know what a DA Master is? Unless you’re a classic car fan, probably not. It’s one of America’s many forgotten cars. However, the story of the DA Master can teach us a lot right now. One of the most important lessons is how to invest successfully when the economy looks downright depressing. Full Story
January 20th, 2009 probably one of the biggest days of this year, marked by several key new appointments. We have inaugurated our 44th president, Barack Hussein Obama, elected into office with the hopes that he will bring with him, a magic wand and resolve two decades of excess liquidity and derivative growth. A hope that will, undoubtedly, be shattered very quickly. Full Story
Town hall meetings, documentary films galore, news coverage, solemn speeches. America certainly seems to be aware of its problem. But for all the self-examination and soul searching, there has yet be any sober identification of the fundamental flaws that have evolved in the American character since the declaration of independence. Full Story
Technical analysis works in markets where there is no manipulation. It also works most of the time, even in manipulated markets, in view of the fact that the manipulators also read the charts. Historically manipulations are doomed, as supply-demand factors rule in the end. The banks tried to hold the gold price at 35.00 in 1968, and during one day in April they sold 4,000 tonnes in a vain attempt to hold the line. They failed then, and they will fail in the future. Full Story
Surely, at some point in time, some group of wise men somewhere will finally get together and realize that, during an era of excessive speculation, a monetary order where half the world's money floats freely and a good portion of the rest is rigidly fixed to the U.S. dollar is not an optimal system. Full Story
It is an understatement to say we are experiencing an unprecedented financial crisis along with our world-wide environmental crisis. Neither crisis needs an Austrian economist to explain it. We live in a consumer society and consumers “use things up.” In recent history, this useless, toxic “stuff” comes from China, and this sad state of affairs is so simple to understand that even a child can follow. Just watch the, “Story of Stuff,” a web-based documentary about the dark underside of consumption. Full Story
By: Richard Daughty, The MOGAMBO GURU - 22 January, 2009
It took a moment for it to sink in that things are going to be 'hard', and that we will have to 'do right' to prove our character. When it did, I thought to myself, 'It's worse than we thought! We're freaking doomed!' Full Story
By: Rick Ackerman, Rick's Picks - 22 January, 2009
Financial stocks got goosed yesterday, and for a few blissful hours everything was right with the world. The shares of JP Morgan led the way, up 26%, followed by Goldman Sachs, which tacked on $10.80 to close at exactly $70. A while back, we promised to don a grass skirt and dance the hula in Times Square in the middle of winter if Goldman does not eventually fall to at least $29. However, yesterday’s wilding spree in the banking sector may have pushed back a day of reckoning till February of 2010. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 21 January, 2009
-We want Obama to succeed, but we weren't born yesterday…the worst sell-off in Inauguration Day history… -What if the bankers got what they deserved?…Treasury gets the go-ahead to 'print money'… -GM to run out of money in March…a blunt letter from the President of Knox Machinery…and more! Full Story
By: Bob Chapman, The International Forecaster - 21 January, 2009
The real estate crisis is probably about 40% over. They’ll be further declines, residential and commercial, and then a basing out period that will take several years. The injection of cheap interest rates and a stimulus package of $825 billion are going to temporarily delay the downside. Instead of ending in 2011 it could extend to 2012. Full Story
By: John Browne, Senior Market Strategist, Euro Pacific Capital - 21 January, 2009
As all recovery hopes are now pinned on the efficacy of Washington's next stimulus package, President Obama has opened the bidding at $825 billion. Most Republicans see this number as too big, and many Democrats see it as too small. If the question is one purely of impact, then under these circumstances, the Democrats are probably correct. Full Story
By: Gary Dorsch, Editor, Global Money Trends - 21 January, 2009
“Accepting losses is the single most important investment device to insure safety of capital. It is also the action that most people know the least about, and are least likely to execute. The most important single thing I learned is that accepting losses promptly is the first key to success. It’s a great mistake to think that what goes down must come back-up,” warned Gerald Loeb, the Dean of Wall Street, in his epic book “The Battle for Investment Survival,” last copyrighted in 1965. Full Story
A LITTLE theatre of the absurd guest-starring Zimbabwe's chief central banker, Gideon Gono, whose signature now adorns the world's first-ever 100 trillion-dollar bill... Full Story
Government treasuries are only prolonging the inevitable and showering manna from heaven on the most undeserved with the bank bailouts now raining down on financial institutions from New York to London. And making loans to industries that are bloated with inventory, employees and inefficiencies is akin to prescribing dieting to anorexics. It’s sheer folly. Full Story
Although capitalism is not a Ponzi scheme, credit-based economies, sic capitalism, and Ponzi schemes share the same fatal flaw. Both must constantly expand or they are in danger of collapse. Today, because capitalist economies are no longer expanding, but contracting, their continued contraction will lead to collapse. Full Story
Wall Street voted with its feet on the day of President Obama’s inauguration and the Dow dropped four per cent, while gold rallied $20 on rumors of a big investment in the yellow metal, possibly again in Saudi Arabia where a stock market rout is scaring investors. Full Story
By: Richard Daughty, The MOGAMBO GURU - 21 January, 2009
And as the bust continues, gold always becomes MORE valuable as everything else turns to crap and the government starts destroying everything with fits of fiscal madness in its insatiable quest for more money, more money, more money! Full Story
By: Rick Ackerman, Rick's Picks - 21 January, 2009
Our recent commentary, “Calling All Inflationists!” touched off quite an e-mail firestorm. Unwavering deflationists ourselves since the 1990s, we’d challenged readers to explain exactly how inflation might emerge amidst the devastating asset collapse now occurring throughout the world. Your answers were not merely enlightening, but compelling. Of course, it’s hard to argue with the contention that the dollar is just a worthless scrap of paper, and that, sooner or later, that fact is going to hit home. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 20 January, 2009
-Obama…the world turns its weary eyes to you…Britain had its worst day in years yesterday… -Blue Monday…BOE gets closer to 'printing money'…what will Obama do with all of this 'political capital'? -Zimbabwe introduced a new note…inflation could return sooner than you think…and more! Full Story
By: The Gold Report and John Doody - 20 January, 2009
Heralded as “the best of today’s best,” John Doody, author and publisher of the highly regarded Gold Stock Analyst newsletter, brings a unique perspective to gold stock analysis. In this exclusive interview with The Gold Report, Doody ponders the efficacy of the Keynesian approach, makes a case for gold equities and explains how the GSA Top 10 Stocks portfolio has outperformed every other gold investment vehicle since 1994. Full Story
The 1930s was the birth of Keynesianism. Economists needed a simple answer as to why they had been so wrong. Since then, the U.S., and much of the rest of the world, has endured 70 years of economic concepts that have generated a continuous lack of success in economic matters. Most professions would seriously review their methodology when faced with as many repeated failures. Not so for the economics community. They just keep coming with more of the same failed policies. Full Story
To say that markets have been behaving “strangely” recently is an understatement. In recent weeks and months we’ve been witness to historic lows in sovereign interest rates in-the-face-of record amounts of debt being issued by governments? We’ve seen the price of gold behave counter intuitively by “not rising” in-the-face-of unprecedented systemic global economic malaise? Full Story
Much has been written about the actual amount of physical silver that exists in world above ground inventories. Due to decades of industrial consumption depleting world inventories, there is remarkably little silver remaining. I have estimated perhaps one billion ounces of silver bullion equivalent exists at anywhere near current prices, and my estimates are much higher than most published estimates. Full Story
WHAT COMES NEXT IN THE UNTIED STATES AND THE GLOBAL ECONOMY WILL INVOLVE CONSIDERABLE DESTRUCTION AND NOTABLE DISLOCATION TO FINANCIAL STRUCTURES, AS IN FINANCIAL MARKETS, PRICING SYSTEMS, AND NATIONAL ECONOMIES. The pressures are so great, still building each week, certain to result in explosive events. Here are many listed pressures, sketched briefly, but analyzed more completely in recent Hat Trick Letter reports. We live in exciting, changing, dangerous, deadly times. Full Story
We believe that 2009 will be similar to 2008 in that a particular market will affect all other markets. As we showed in the Market Outlook, Treasuries are very likely to be the key market and that also includes foreign government bonds (of the largest nations). There is a reason its simple. In a deflationary environment money moves to the safety of government bonds. Governments increase their size to help the economy fight deflation, which cripples the private sector. A recovery ensues after money exits government bonds for more productive purposes. Full Story
The question now of course, particularly after the strong gains on Friday, is whether the reaction in the Precious Metals sector has run its course. Before attempting to answer this question it is worth stepping back to make some general observations about gold and the grave financial crisis gripping the world. Full Story
This essay will make three key points as to why Obama's stimulus plan will fail and then will suggest a much simpler plan that will not end in failure and should actually improve the situation. The first reason why Obama's central economic planners will fail is because they are too focused on full employment rather than full production. The second reason is that the American economy, or any economy, is far too complex for any central planning group. The third reason is that Obama's proposal of more stimulus spending is exactly what got us into this mess. I even submit to you that Obama's team has no idea how to even produce a pencil; in fact none of us do. Let me explain. Full Story
By: Steven Saville, Speculative Investor - 20 January, 2009
In the US and many other countries a lot of people are in default on their home loans, causing banks to suffer large losses. It is reasonable, then, to conclude that banks will be less able or willing to make new loans in the future than they were in the past; so although the loan defaults will not directly cause the money supply to fall they could result in slower future monetary expansion. Full Story
While gold was extremely popular the past few years, I think it’s safe to say crude oil is unbeatable for popularity, as it’s a resource which almost everyone uses on a daily basis and it affects all of us in the wallet when oil prices rise as fuel, shipping costs and petroleum products start to cost more and more. Full Story
By: Andrew Mickey, Q1 Publishing - 20 January, 2009
Here’s the thing. India’s BPO industry was rocked by scandal. Satyam has wiped away more than $5 billion in market value out of investors’ pockets. Satyam is clearly impaired. The rest of the BPO market is not. In fact, the rest of them will actually benefit from Satyam’s problems. Full Story
By: Richard Daughty, The MOGAMBO GURU - 20 January, 2009
And then, as another benefit of giving money to people, I thought of older people who've had their damned grown children move 'back home' to live with them, all crammed into the one house, sometimes dragging their kids along… Full Story
By: Bill Bonner & The Daily Reckoning Crew - 19 January, 2009
-Yes, he can!…or so he thinks…politics is a dirty job, but someone's got to do it… -We don't often have the chance to stand up for Dubya, but give the guy a break…he doesn't understand the economy enough to be held responsible for the financial collapse… -Bankers lend money when they think they can make money at it…Friedman offers Obama some advice…and more! Full Story
On several occasions of late, I have read or heard the phrase, "We are all Keynesians now," an erudite way of expressing the idea that the free market is dead. And that the fate of the global economy now relies almost entirely on pragmatic measures yet to be taken by governments, most notably that of the United States. Full Story
Perhaps the best analogy to explain the fundamental condition of gold is that it’s like a beach ball being held under water, where at some point it will escape the clutches of its oppressor, springing it into the light of day for all to see its true worth. Even a child could understand such a condition when explained in terms of a beach ball. When it comes to the day-to-day trials and tribulations of gold however, it’s not that simple unfortunately, because although gold is the oldest form of true money on the planet, it’s also a political metal caught up in the biggest fiat currency / Ponzi scheme in the history of mankind. Full Story
As one of the bailout program’s harshest critics, I would like to tell Ed Andrews that I acknowledge no such thing. Rather it is economic gibberish such as this which gives me an important clue as to what is going on in this country and some insight into what people have to do to protect themselves from this insanity. Full Story
The broad markets are at a critical juncture and as Mr. Alan Gayle observes in the AP piece Wall Street rebounds after banks report big losses: http://tinyurl.com/9ozq9z “It’s that tug of war between problems and promise.” Yes Alan, it is, except that I would qualify the problems as being real and ultimately devastating and the promise as being nothing more than the ‘hoped’ for technical rally that the market is attempting in fits and starts. Full Story
By: Bill Murphy, Le Metropole Cafe, Inc. - 19 January, 2009
This week marks GATA’s tenth anniversary of our efforts to expose the manipulation of the gold market. In another few weeks we will mark the tenth anniversary of my appearance on CNBC (interviewed by Ron Insana) … the first and last GATA appearance on the US TV media to date … for once they heard what GATA had to say, we have been blackballed ever since. Full Story
Friday, the last trading day with the Bush Administration in command, was marked by new lows in the terribly ill banking sector. The Troubled Assets Relief Program (TARP) became law on October 3, 2008. Since then, the Philadelphia Bank Index ($BKX) has declined by an astonishing 55%. Full Story
1st Hour: Headline news & Market Weatherman Forecast. Spotlight Stock Picks with big dividends. The International Forecaster and Host Chris Waltzek answer listeners' questions. 2nd Hour: Greg McCoach The Mining Speculator Full Story
Today’s problems with the dollar and countless insolvent banks thus began decades ago. Bankers got what they wanted, a license for the unbridled extension of credit. As a result, we see clearly today what they have wrought. They have nearly collapsed their banks and the dollar as a consequence. So the emergence of this “Confidential” memo from the Federal Reserve is timely, and hopefully today’s policy makers can learn from it. Full Story
By: John Mauldin, Millennium Wave Advisors - 18 January, 2009
Deflation? Stimulus? Deleveraging? Recession? A soft depression? A return to a bull market? With all that is going on, how does it all end up? When we get to where we are going, where will we be? In chess, the endgame refers to the stage of the game when there are few pieces left on the board. The line between middlegame and endgame is often not clear, and may occur gradually or with the quick exchange of a few pairs of pieces. The endgame, however, tends to have different characteristics from the middlegame, and the players have correspondingly different strategic concerns. And in the current economic endgame, your strategy needs to consist of more than hope for a renewed bull market. Full Story
As airlines made their lows in July, gold stocks took until October to make their lows. It is still a month ahead of the stock market and thus a bullish indication but not the four months that airlines offered. Furthermore, the HUI cannot be discounted, as gold stocks are historically a very volatile sector. They have already more than doubled, just like airlines, from their lows. Full Story
By: Bob Chapman, The International Forecaster - 18 January, 2009
Just as we predicted, the US Senate, which is now indisputably the most corrupt body of elitist bootlickers on the face of the planet, has approved the disbursement of the second half of the TARP (Troubled Asset Relief Program) funds to the bankster-gangsters, some 350 billion worth, thus ensuring that the elitists are given their next serving of middle class flesh by the megaton for a whorish feast of epic proportions. Full Story
By: Jason Hommel, Silver Stock Report - 18 January, 2009
There are a lot of people who DO understand what I'm doing with silver auctions, and I fully appreciate all of your support. But many don't, and I'm here to explain to help them. Full Story
By: Andrew Mickey, Q1 Publishing - 18 January, 2009
Right now, I’m actually interested in oil because fundamentals matter once again. You can now use rationale and research to beat the market. The speculators are out of the market for the most part. Many of them were hit hard on the way down and won’t be back. And the big banks’ and hedge funds’ trading capital is significantly reduced. They don’t have the power over prices they once did. The fundamentals are back and we can get to work. Full Story
The normally reliable Daily Telegraph reports that the UK is planning to launch a $390 billion toxic-loan bank early next week, using the excitement of the Obama inauguration as a smoke-screen for a very big reshuffling of the British banking system. Full Story
By: Richard Daughty, The Mogambo Guru - 18 January, 2009
It's just too bad that government workers are a deadweight loss, as they produce no profit from their labors with which to pay their bloated salary and benefits packages, and they produce profit-lowering costs for those who must obey their commands, sort of a lose-lose situation. Full Story
By: Rick Ackerman, Rick's Picks - 18 January, 2009
The retail picture looks so bleak it’s difficult to imagine which stores will survive, other than a few obvious ones like Safeway, Apple and Walgreen’s. Verizon, for one, looks like it will be around for a while. I had to take a number the other day when I visited a crowded Boulder outlet to exchange a Bluetooth device. What a mob scene! Full Story
As I crank up Dylan’s great album “Before the Flood” disc two, the bank bailouts have once again been pushed to the forefront this past week like the second round of the flood which in many cases is more devastating than the first. After huge losses were reported by a few banks and talk of government funding, markets rallied taking the bad news as good but still could not muster a positive week from the news. Full Story
Gold was down -15.10 for the week, closing at 839.90 for a -1.77% loss. Last week’s report mentioned that gold’s rally looked like it was running out of steam and that’s exactly what happened the first four days of the week. Gold was breaking down when it bounced off support and rallied up $32 on Friday. This has kept the short term trend intact if lower support holds. For the intermediate term trend to turn bullish gold needs to close above $850. Full Story
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