By: Anthony Rowley, Marc Faber, J Mark Mobius, Ethan Harris, Ernest Kepper, and William Thomson - 1 August, 2008
Since the sub-prime mortgage crisis burst upon the US a year ago, there have been market rallies and claims that the worst is over, only to be followed by fresh plunges in values and sentiment. Are we near the bottom now, or just at the start of a long, slow meltdown? Our experts take the latter view. Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 1 August, 2008
In an interview yesterday on CNBC, former Fed Chairman Alan Greenspan cast his eyes on the charred landscape of the national real estate market and offered high-minded criticisms of the obvious excesses and irrationalities that brought on the devastation. Greenspan’s attitude was akin to a retired drug dealer lamenting the urban blight caused by rampant addiction. Full Story
By: Marin Katusa, Casey Energy Opportunity - 1 August, 2008
So, if not “big oil”, where should an energy investor look to deploy their capital? We’ll place our bets on the Minutemen, or the small, more agile oil explorers targeting under-explored areas in the U.S., Canada, and more remote areas of the globe. Rather than being caught up in layers of bureaucracy, and hindered by the negative associations of big oil, these smaller companies can act swiftly and have grass-roots connections with local politicians to help push their projects forward. Full Story
The banks have begun falling…first Bear Stearns, then IndyMac, and Heritage…The Climacteric we forecast has begun. The Threat of Systemic Collapse about which Deepcaster (and, increasingly, others) has written is also increasing. Full Story
First warning? Gold doubles as the Greenspan Fed makes real interest rates negative for the first time in 25 years. Now his successor is at it again... Full Story
By: Bill Bonner & The Daily Reckoning Crew - 1 August, 2008
-A 'stag' attacks the nation's eateries…why the bull market in commodities isn't over… -Waiting for investors to pull the pin…measuring the rate at which the nation impoverishes itself… -Accidents on the way home from the financial party…a funny story about $20 gold coins…and more! Full Story
By: Scott Wright, Zeal Intelligence LLC - 1 August, 2008
When the base metals bulls began in 2003, few could fathom the wild ride ahead. Fundamentals indeed supported steadily rising prices, but the massive parabolas that unfolded between 2005 and 2007 were amazing to behold. From trough to peak copper, zinc, nickel, lead, and aluminum skyrocketed 475%, 523%, 650%, 829%, and 137% respectively. Full Story
A tremendous number of outraged citizens have let the SEC know what they think of the SEC permitting the ongoing illegality of naked shortselling: http://sec.gov/comments/s7-20-08/s72008.shtml Write your own and send the email letter to the following address: rule-comments@sec.gov Full Story
By: Richard Daughty, The Mogambo Guru - 1 August, 2008
But real inflation…is roaring far above a measly 5%, and while 'annual CPI-U Surges to 5.0%', as per the headlines, inflation measured the older, pre-Clinton way is 12.6% in June! Which is up from 11.8% in May! Yow yow yow! We're freaking doomed! Full Story
Quotes for gold and silver have taken quite a leap from Wednesday’s punitive lows, hinting that the so-far 10% correction from mid-July’s $1,000 top may be as bad as it gets. We’d been expecting the weakness to continue for at least a little longer, with precious metal prices getting dragged down for another day or two by sagging speculative demand for crude. Our target for October Gold was 874.10, and even though the futures will need to surpass 935.20 to invalidate that target, it now appears as though Wednesday’s 902.70 bottom may have exhausted sellers. Full Story
As vacation season approaches in the Untied States and Canada, the task of reading should give way to looking at pictures to tell a story, or gazing at scenery from a lodge or campground, or lazy afternoons at the beach. Among the many stories out there in the financial ethos, the one that strikes as most important is the bank sector. The selective enforcement of restrictions on shorting bank stocks sticks out like a child suffering acromegaly (Frankenstein disease) in deformity. Its blatant criminality has given the US financial sector its latest (and not last) black eye. This one is a loud banner of corruption waved for the entire world to see, put in the open. In fact, one can easily make the argument that price controls have finally come into the open. Full Story
I have included a ten year chart above with gold circles marking every July to September period since the bull market began in 2001. As you can see that time frame represents a very good buy point. Every year the July to September period has market the bottom for the year and as the years have passed the moves up after that period have increase exponentially. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 31 July, 2008
-The $300 billion housing bill is signed…a great example of many, many people doing very dumb things… -How do the feds get any real money?…the Paulson Doctrine… -Bankruptcies are piling up…malls are emptying out…pity the poor fool who takes over at the White House…and more! Full Story
Thanks to its quasi-public and quasi-private dual status, with implicit but correct assumption of government guarantees, Fan and Fred can borrow from financial markets at super low interest rates and enjoy the spread between such low borrowing rates and much higher mortgage rates in their portfolio from Mr. Mozilo and other originators. Full Story
While Elton John made us think of Norma Jean as a candle in the wind, the financial markets in 2008 bring to mind a stick of lit dynamite in a hurricane. Does an explosion loom before the unpredictable gusts finally dissipate? If so, gold may be the only answer… Full Story
Many of you are probably too young to appreciate the full impact of the hyperinflation in Germany after WW1. It was devastating. This picture shows you the amount of paper that was equal to one silver dollar, or ¾ of one troy ounce of fine silver. After seven years of constantly accelerating inflation, the mark is finally stabilized at the rate of over 4 trillion to a U.S. dollar. Full Story
For this article, I will examine what is going to happen to the deficit because of Federal tax revenues. In future articles, we will take a look at other major factors pushing up the deficit. Full Story
By: John Browne – senior market strategist, Euro Pacific Capital - 31 July, 2008
Over the past few decades, the United States has steadily evolved from a nation of ‘producers’ to one of ‘consumers’. The change has been celebrated by politicians and economists as proof of America’s arrival at the top of the global economic food chain. In reality, the development has depleted the nation of its hard-earned wealth, and has led us to the brink of ruin. Full Story
By: Richard Daughty, The Mogambo Guru - 31 July, 2008
So why am I so disconsolate that the Fed is not increasing money and credit, and so is not increasing the money supply and so is not increasing inflation in consumer prices? Shouldn't I be happy?…No, because it is too late to stop now! Full Story
Three hundred billion here, $300bn there, and pretty soon you're talking about a wave of dilution hitting cash-holders, bond owners, stock investors and US Dollar earners everywhere. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 30 July, 2008
-An oil company forced into Chapter 11?…as Bush said, Wall Street is 'drunk' - but who supplied the free booze? -Consumers got a taste of excess spending - and they liked it…now the U.S. economic growth is dependant on this over-the-top spending -While we are sticking to our Trade of the Decade - it may be a good time to buy stocks elsewhere…and more! Full Story
By: Bob Chapman, The International Forecaster - 30 July, 2008
As these assets, or what is left of them, are carried over to the balance sheet there will be some staggering revelations. This exposure should put pressure on bond and stock markets and lead to more than $2 trillion in write-offs. This will be accompanied by failures at many financial institutions. That will produce higher gold and silver prices. Get all of your free assets out of banks, commodity funds and Forex funds and into gold and silver related assets and Swiss franc government bonds. Full Story
Central bankers are the keepers of the keys to the kingdom. The kingdom, however, is on the edge of bankruptcy and in danger as never before. Comparisons are now being made to the Great Depression of the 1930s. The comparisons, however, are just that. Full Story
By: Richard Daughty, The Mogambo Guru - 30 July, 2008
The problem in 'going short' is obvious, as you are thinking, 'How do you sell something that you don't own? Is this another of your Sleazy Mogambo Tricks (SMT) to take my money…' Full Story
Bears grown weary of watching the stock market shrug off warnings of economic Armageddon should prepare for more silly, exasperating rallies ahead. As long as the price of crude is falling, stocks and the dollar will continue to dance blithely higher, ignoring a grim tide of economic news that points inescapably toward deep recession or worse. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 29 July, 2008
-Could it be? Has inflation topped out? Maybe…maybe not… -The one thing that would give Dubai a swift kick in the pants…cash is probably the best move… -One of the biggest humbugs in capitalism…the best reason to have real shutters…and more! Full Story
What do our officials most fear? They fear the public’s loss of confidence. Events are driving their improvised attempts to stem a general loss of confidence in the dollar, in them, the financial and monetary system, and the government as a whole. Full Story
By: Steven Saville, Speculative Investor - 29 July, 2008
It is said that the US dollar will eventually reach its intrinsic value, which is zero. This is probably true, but the lack of intrinsic value isn't the main problem facing the dollar and the other fiat currencies of the world. The fact is that money never has any "intrinsic" value, even when the money is gold and silver coin. Full Story
By: Richard Daughty, The Mogambo Guru - 29 July, 2008
The historical high for silver was set 531 years ago…at a princely $806 an ounce. By comparison, the price of silver less than $19 an ounce today, and was only about $5 an ounce in 1998, after having bottomed at under $4 an ounce in 1992. Full Story
So much for Cuil (pronounced “cool”), a search engine that supposedly was going to give Google a run for the money. The brainchild of three ex-Google employees, Cuil debuted on Monday with a public relations drum roll and $33 million in venture backing. By late afternoon, however, the drum roll had segued into “Taps,” and it was back to the drawing board. Full Story
As discussed in previous commentary, despite the dire realities affecting the global economy, it appears investors are not heeding the warnings. Sure, some people are paralyzed like a deer in the headlights, where you can’t blame them if they are just waking up to the reality of what lies before us. However, these still appear to be the few, with most still in denial concerning future prospects for the economy and markets. Full Story
By: Bill Bonner & The Daily Reckoning Crew - 28 July, 2008
-The boom in finance is over - but that doesn't mean there won't be some spectacular bounces…leveraged stupidity… -Sell risk, buy caution…has the black goo topped out?…the return of the rails… -Give the mobs bread and circuses…insights from the Agora Financial Investment Symposium…and more! Full Story
What would be the effect on a small market, like silver, if several traders bought back, or tried to buy back many days of world production, perhaps a hundred days or more, in a very short and compressed time frame, such as was just experienced by SemGroup in oil? My back-of-the-envelope calculation would be silver would move up by double to triple the amount just seen in oil, on a dollar per barrel/dollar per ounce basis. In other words, if oil was moved by $10 to $20 per barrel by SemGroup’s buying, silver, in comparable circumstances, would move by $25 to $50+ per ounce. Full Story
Watching the complete collapse of share prices in the resource sector would be doubly disheartening if were not occurring around the globe irregardless of sector. From tech stocks to transports, from China to Brazil, markets are in a slow steady freefall. The question of “how do I profit from my investments?” is rapidly evolving into one of “how do I keep my house and investments and 401K from becoming worthless?” Full Story
Gold’s price action in the past 5 months has frustrated many traders. Especially those who have difficulty making money during consolidation periods which are in. The past couple months are consistently the weaker months for gold prices year after year. That being said August through year end have been consistently strong for trading gold and gold ETF’s. Full Story
Yea verily, we have had some bad weeks in the gold market since the middle of July. The question which faces all good gold bugs is, was this the kind of decline which completes a move and sets up the stage for a sharp reversal (like the sub-prime crisis of August 2007 vis a vis commodities), or was it the kind of decline which breaks support and sets the stage for a total collapse (like the first part of October 1987 vis a vis stocks)? Full Story
As things stand today, the main threat for gold remains the anticipation that the Fed’s next move will be an increase in interest rates. The markets currently expect that the Fed will make its first rate hike before the year end. We believe the market is mistaken in anticipating that the worst for Wall Street is behind us and that the Fed is about to shift its priorities from preventing a recession to fighting inflation. Full Story
The Gold-Oil Ratio (GOR) had been in a bottoming stance since May (see Gold-Oil Ratio: Bottoming) and that bottoming stance - after a final capitulation plunge that never broke the bullish divergence - has now yielded the expected upturn in gold vs. crude. Full Story
By: David N. Vaughn, Gold Letter, Inc. - 28 July, 2008
Where do the years go? This is what I mean when I talk about the slow subtle change occurring in our economy and country. The change is so gradual that we do not even notice it until we look back years down the road and finally comprehend our changed world around us. And what about that bank run? Full Story
By: Richard Daughty, The Mogambo Guru - 28 July, 2008
One of the things that he finds worrisome is that 'things may even be worse than I first thought', which probably shows why he was not selected to be the Republican presidential nominee; he is inexperienced in catastrophe. Full Story
One is almost tempted to state that everything that could possibly go wrong has gone wrong. Just when it looked like the markets were ready to stabilise and had priced in what appeared to be all the negative news the Dow spikes down and trades below it Jan 08 lows. Before we go to examine this potentially explosive pattern lets look at few other factors first. Full Story
Unfortunately, last week’s gold and silver report came to pass this week, as the precious metals closed down. Commodities continue their correction; some have dropped more than others – the last two to succumb being oil and gold. Full Story
Being host most of last weekend didn’t allow me to fulfill my newsletter duties so I will be including some of last week’s most important events in this week’s letter. Luckily our unbroken streak of rainy weekends looks to be intact so another weekend in the office won’t hurt that much. Full Story
1st Hour: Headline news & Market Weatherman Forecast. Spotlight Stock Picks with big dividends. The International Forecaster and Host Chris Waltzek answer listener questions.
2nd Hour: Timothy Sykes, An American Hedge Fund.. Full Story
By: Bob Chapman, The International Forecaster - 27 July, 2008
Basically, Mr. Williams was told that over the next twelve months, from mid-2008 to mid-2009, (1) news of super giant oil fields, ready to produce, would be announced for two locations, in the Northern Slopes of Russia and in Indonesia, which oil fields would together contain more oil reserves than the entire Middle East; (2) that this news would drive oil prices down to $50/barrel; (3) that OPEC countries, especially in the Middle East, would be bankrupted by this price decrease; (4) that this would cause the financing of our foreign trade and current account deficits through purchases of treasury paper by foreign nations with their surplus oil profits to collapse, leading to the collapse of the dollar; (5) that the collapse of the dollar would cause unprecedented financial strife and turmoil in the US, and that it would take many years for the US to recover from this financial debacle; (6) that they (big oil) support John McCain for President; and (7) that US domestic oil reserves would never be tapped, and that any legislation which might allow domestic reserves to be tapped would not be allowed to pass, leaving the US dependent on foreign oil forever. Full Story
While history may find we are too pessimistic at this point in time, in our view it is far better to prepare for a worsening crisis and hope that it does not materialize, than to expect business as usual. Full Story
Between 2000 and 2007, gold jewelry sold in India accounted for one ounce-in-nine sold worldwide. One ounce in every five wound up as an Indian import (its domestic mines produce less than six tonnes per year), ready to be hung off young brides as 24-carat dowries or worked into bracelets and necklaces for the international market.
The single-largest gold bullion consumer, India's own final demand outweighed the next largest market – China – by almost 57%. Full Story
The bailout of IndyMac’s depositors will probably deplete 10% of the FDIC’s reserves.
Congress will back up the FDIC if the FDIC ever (1) runs out of T-bills to sell (2) to raise money (3) to pay off depositors of insolvent banks. But where will Congress get this money? From the Federal Reserve System, if lenders will not fork over the money.
The Federal Reserve System backs up Congress. This is the heart of the threat to the solvency of the dollar. Full Story
Earnings and Mr. Bear Earnings Before Bad Stuff How Ugly Can it Get? A Lean Mean Reversion Machine Some Thoughts on Energy Oregon, Maine and a Wedding Full Story
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