Now that it appears that we have finally begun the long-awaited mega-bull run in Gold and mining stocks, it's a great time to revisit the best sources of information to make investment decisions.
Quality information comes in many forms. Some cost money,such as newsletters. Some are free, such as websites, chat forums and the media.
In terms of newsletters, I've subscribed to or have been familiar with at least a dozen. In fact, many months ago, I wrote a piece on 7 of them which can be reviewed by clicking here: http://markostake.blogspot.com/2010/01/looking-for-great-gold-newsletter.html.
In general, the opinions I expressed then I would maintain now, but I'd like to elaborate with some qualitative comments. For the purposes of full disclosure, I currently subscribe to two newsletters: LeMetropole Cafe (http://www.lemetropolecafe.com/) and Clive Maund (http://www.clivemaund.com/). Each is different and serves a different audience. Each does so, in my opinion, excellently.
Le Metropole is by far the very best value out there. It is written daily, and full of invaluable information. Head guru Bill Murphy is not only among the most knowledgeable and best connected people out there in Gold land, but his organization, GATA (http://www.gata.org/), is on the front lines of protecting investors from the shady back-room operators who routinely intervene in what should be free markets. I could write an entire essay on his efforts alone, but history will undoubtedly judge him as the most potent force in this market today.
Clive Maund writes a newsletter that is primarily technically oriented. While his technical analysis is often scorned by Gold's perma-bulls, who hate it when he gets bearish, he has, in my experience stayed intellectually honest and has been very willing to acknowledge his bad calls. Hey, even Marko's Take blows it!
Clive Maund also gives specific buy and sell recommendations and timing, which for most investors is what they need to make money. Unless you understand things like On Balance Volume and Candlestick charting, Clive's newsletter should be part of your information set.
In addition to these subscriber newsletters, there are a myriad of fine blogs out there. Of particular note are Jesse's Cafe Americain (http://jessescrossroadscafe.blogspot.com/) and Harvey Organ's The Daily Gold (http://harveyorgan.blogspot.com/). Other must reading includes Jim Sinclair's MineSet (http://jsmineset.com/) and a great site called Gold Tent: Poster's Paradise (http://goldtent.net/wp_gold/).
Sinclair is a legend in the Gold community and it amazes me that his site is still free. In Gold Tent, you'll find a large number of well-informed traders and investors with whom you can exchange ideas and thoughts in a mutually supportive environment. Unlike some other chat rooms, the decorum is kept very civil and participants politely exchange information rather than insults with whom they may not entirely agree.
In terms of Gold-Oriented web sites, the three that come to mind are Kitco (http://www.kitco.com/), 321Gold (http://www.321gold.com/) and GoldSeek (http://www.goldseek.com/). They serve as excellent clearinghouses of information and feature various news reports and newsletter writers.
The only information that investors should be truly wary of are the various reports of the major brokerage houses and credit rating agencies such as those that are issued by our friends at firms like Government Sachs (GS), Moody's and Standard & Poors. Study after study has shown that these firms are so full of conflicts of interest that the information they spread is anything but credible. You can be pretty-well assured that these reports are used to propagandize the firms' narrow self interests and NOT to provide a service to investors.
The other sites mentioned above have NO conflicts of interests and only prosper based on the quality of the information they provide. The major brokerage and credit firms, on the other hand, make money whether they're right or wrong.
As Labor Day weekend ends, the traditional summer vacation is over and markets will begin to get more active and, in all likelihood, we have a very interesting fall ahead of us. You know where we stand: stock market meltdown is uncomfortably likely and gold market meltup is dead ahead.
Before making any major investment decisions, consider all the sources of information that you have. The next several weeks are likely to be historically significant, and a chance to make a lot or lose a lot. Never underestimate the value of information. Toward that end, thanks for reading.
Marko's Take
In
Showing posts with label Goldman Sachs. Show all posts
Showing posts with label Goldman Sachs. Show all posts
Sunday, September 5, 2010
Thursday, July 15, 2010
SEC No Match For Government Sachs
Now let me get this straight. Goldman Sachs (GS), aka "Government Sachs", has just received the largest penalty ever imposed on a financial firm. Yes, a whopping $550 million.
Relative to Goldman's 2009 net income of roughly $12 billion, this represents less than 5%, or about two weeks worth of earnings. In the case of British Petroleum (BP), they were arm-twisted into establishing a $20 billion escrow fund, or about 15 MONTHS of 2009 income. BP's escrow fund is to compensate victims.
For Goldman's victims, they were assessed $300 million, payable to 2 European Banks. Forgive me, weren't there a whole lot of other victims? So, BP is paying about 70 times that of GS. Seems reasonable to me.
BP's market capitalization has fallen by about half from peak to trough, a wipe-out on the order of $100 billion. BP's shareholders are the public. Goldman's market capitalization is down only 20%. It's shareholders are very largely Government Sachs alumni in senior policymaking positions. And, of course, management.
Are you beginning to see the problem here?
BP may still have stiff penalties imposed on it. The investigation is far from over.
Ok, so one company's alleged negligence led to economic disaster and the other's to ecological disaster? Is one that many times worse than the other?
Could the difference have anything to do with the rather sizable number of GS alumni in the government? Lloyd Blankfein walks away unscathed. Tony Hayward is driven out of Dodge.
Goldman's settlement permits it to walk away, while admitting virtually NO wrongdoing. Do you think that BP will be so lucky?
One can assume that investigators and senior officials of the SEC knew what they were doing. After all, why would they EVER want to bring down their future bosses?
Goldman officials praised the settlement. Yes, you read that correctly. Goldman officials praised the settlement! Doesn't that, in and of itself, say something? Do you think for one minute that the remaining BP officials will be thinking what a great deal they got?
But, Goldman had another huge reason to celebrate: the passage of the financial reform bill. Not only are Goldman's business interests protected, but the bill establishes new regulatory bodies. A full employment act for Government Sachs at government expense!
Marko's Take
Relative to Goldman's 2009 net income of roughly $12 billion, this represents less than 5%, or about two weeks worth of earnings. In the case of British Petroleum (BP), they were arm-twisted into establishing a $20 billion escrow fund, or about 15 MONTHS of 2009 income. BP's escrow fund is to compensate victims.
For Goldman's victims, they were assessed $300 million, payable to 2 European Banks. Forgive me, weren't there a whole lot of other victims? So, BP is paying about 70 times that of GS. Seems reasonable to me.
BP's market capitalization has fallen by about half from peak to trough, a wipe-out on the order of $100 billion. BP's shareholders are the public. Goldman's market capitalization is down only 20%. It's shareholders are very largely Government Sachs alumni in senior policymaking positions. And, of course, management.
Are you beginning to see the problem here?
BP may still have stiff penalties imposed on it. The investigation is far from over.
Ok, so one company's alleged negligence led to economic disaster and the other's to ecological disaster? Is one that many times worse than the other?
Could the difference have anything to do with the rather sizable number of GS alumni in the government? Lloyd Blankfein walks away unscathed. Tony Hayward is driven out of Dodge.
Goldman's settlement permits it to walk away, while admitting virtually NO wrongdoing. Do you think that BP will be so lucky?
One can assume that investigators and senior officials of the SEC knew what they were doing. After all, why would they EVER want to bring down their future bosses?
Goldman officials praised the settlement. Yes, you read that correctly. Goldman officials praised the settlement! Doesn't that, in and of itself, say something? Do you think for one minute that the remaining BP officials will be thinking what a great deal they got?
But, Goldman had another huge reason to celebrate: the passage of the financial reform bill. Not only are Goldman's business interests protected, but the bill establishes new regulatory bodies. A full employment act for Government Sachs at government expense!
Marko's Take
Friday, June 25, 2010
Obama's Latest Folly: Financial Reform
It simply amazes me that politicians believe that any problem can be fixed by more regulation. Uncle Sam is right in the middle of the Federal National Mortgage Corporation (Fannie Mae, or FNM) and Federal Home Loan Mortgage Corporation (Freddie Mac, or FRE) fiascos. Senator Chris Dodd (D-CT) and Representative Barney Frank (D-MA), both beneficiaries of lavish campaign contributions, made sure that these two entities could operate in the most favorable possible business environment, that is, before their help led to the two firms' demise.
Then, of course, we have the cushy relationship between Goldman Sachs, aka "Government Sachs" (GS), and the entire Obama Administration. Gotta be something in it for them!
The Securities and Exchange Corporation (SEC) completely ignored warnings about Bernie Madoff. So now that we've established the government's expertise at regulating various aspects of investing, the answer is to regulate MORE??
Let's not forget the Federal Reserve (Fed). Keeping interest rates way too low and for too long directly led to the twin asset bubbles: real estate and tech stocks. The solution? Keep interest rates even lower and for longer! See the logic?
The Financial Reform Bill was passed this morning. The Obama Administration pushed hard for this legislation to "protect the consumers" that it has, thus far, been completely unable to do. This is how governments think: create a problem, then justify even more intervention to solve the very problem they created. Think we have too much debt? Issue MORE of it! Regulations failing to do their job? Create more bureaucracy and more regulations! Simple.
Major provisions of the bill include:
New regulatory authority for federal officials to seize and break up large troubled financial firms without taxpayer bail-outs in cases where the firm's collapse could destabilize the financial system. U.S. Department of Treasury would supply funds to cover the up-front costs of winding down the failed firm, but the government would have to put a "repayment plan" in place. Regulators would recoup any losses incurred from the wind-down afterwards by assessing fees on financial firms with more than $50 billion in assets.
The establishing of a new, 10-member Financial Stability Oversight Council, comprising existing regulators charged with monitoring and addressing system-wide risks to the nation's financial stability. Let me guess. Members of the council will be alumni of Government Sachs?
The so called "Volcker Rule" would curb propriety trading by the largest financial firms, though banks could make small investments in hedge and private-equity funds. Of course, we should all expect "Government Sachs" to be exempted. If they can't insider trade ahead of their clients, how are they going to make money? Lend? Nahhh!
Derivatives would be subject to comprehensive regulation, especially in the over-the-counter market, including the trading of the products and the companies that sell them. However, the riskiest derivative trading operations would have to be spun-off into affiliates.
A new Consumer Financial Protection Bureau within the Federal Reserve will be created, with rulemaking and some enforcement power over banks and non-banks that offer consumer financial products or services such as credit cards, mortgages and other loans. The new entity will be staffed by alumni of "Government Sachs". (Sarcasm intentional!)
The bill would also provide for a complete "sham" overview of the Fed, by mandating a one-time audit of all of the Fed's emergency lending programs from the financial crisis. The Fed also would disclose, with a two-year lag, details of loans it makes to banks through its discount window as well as open market transactions - activity the Fed currently doesn't disclose. I'm holding my breath. (Sarcasm intentional!)
The legislation would set new size- and risk-based capital standards, including a prohibition on large bank holding companies treating trust-preferred securities as Tier 1 capital, a key measure of a bank's strength. Since former capital requirements were set by Uncle Sam, naturally the new standards are likely to be just as effective. (Sarcasm intentional!)
Larger banks would be subject to a special assessment to raise up to $19 billion to offset the cost of the bill. The fee would apply to financial institutions with more than $50 billion in assets and hedge funds with more than $10 billion in assets, with entities deemed high-risk paying more than safer ones.
Let's not forget the credit-rating agencies! The bill would establish a new quasi-government entity designed to address conflicts of interest inherent in the credit-rating business after the SEC studies the matter. It would also allow investors to sue credit-rating firms for a "knowing or reckless" failure to conduct a reasonable investigation, a lower liability standard than the firms were lobbying to get. Never mind that no one actually CARES what the Standard & Poor's and Moody's think. We MUST regulate them!
What will be the effect of this bill? Simple! Whatever the bill was designed to accomplish, expect the opposite. We can expect less systemic liquidity, a renewed credit crunch and either a obscenely profitable banking sector, or one that goes out of business! The good news? More employment, power and bonuses for all our friends at "Government Sachs"!
Marko's Take
Then, of course, we have the cushy relationship between Goldman Sachs, aka "Government Sachs" (GS), and the entire Obama Administration. Gotta be something in it for them!
The Securities and Exchange Corporation (SEC) completely ignored warnings about Bernie Madoff. So now that we've established the government's expertise at regulating various aspects of investing, the answer is to regulate MORE??
Let's not forget the Federal Reserve (Fed). Keeping interest rates way too low and for too long directly led to the twin asset bubbles: real estate and tech stocks. The solution? Keep interest rates even lower and for longer! See the logic?
The Financial Reform Bill was passed this morning. The Obama Administration pushed hard for this legislation to "protect the consumers" that it has, thus far, been completely unable to do. This is how governments think: create a problem, then justify even more intervention to solve the very problem they created. Think we have too much debt? Issue MORE of it! Regulations failing to do their job? Create more bureaucracy and more regulations! Simple.
Major provisions of the bill include:
New regulatory authority for federal officials to seize and break up large troubled financial firms without taxpayer bail-outs in cases where the firm's collapse could destabilize the financial system. U.S. Department of Treasury would supply funds to cover the up-front costs of winding down the failed firm, but the government would have to put a "repayment plan" in place. Regulators would recoup any losses incurred from the wind-down afterwards by assessing fees on financial firms with more than $50 billion in assets.
The establishing of a new, 10-member Financial Stability Oversight Council, comprising existing regulators charged with monitoring and addressing system-wide risks to the nation's financial stability. Let me guess. Members of the council will be alumni of Government Sachs?
The so called "Volcker Rule" would curb propriety trading by the largest financial firms, though banks could make small investments in hedge and private-equity funds. Of course, we should all expect "Government Sachs" to be exempted. If they can't insider trade ahead of their clients, how are they going to make money? Lend? Nahhh!
Derivatives would be subject to comprehensive regulation, especially in the over-the-counter market, including the trading of the products and the companies that sell them. However, the riskiest derivative trading operations would have to be spun-off into affiliates.
A new Consumer Financial Protection Bureau within the Federal Reserve will be created, with rulemaking and some enforcement power over banks and non-banks that offer consumer financial products or services such as credit cards, mortgages and other loans. The new entity will be staffed by alumni of "Government Sachs". (Sarcasm intentional!)
The bill would also provide for a complete "sham" overview of the Fed, by mandating a one-time audit of all of the Fed's emergency lending programs from the financial crisis. The Fed also would disclose, with a two-year lag, details of loans it makes to banks through its discount window as well as open market transactions - activity the Fed currently doesn't disclose. I'm holding my breath. (Sarcasm intentional!)
The legislation would set new size- and risk-based capital standards, including a prohibition on large bank holding companies treating trust-preferred securities as Tier 1 capital, a key measure of a bank's strength. Since former capital requirements were set by Uncle Sam, naturally the new standards are likely to be just as effective. (Sarcasm intentional!)
Larger banks would be subject to a special assessment to raise up to $19 billion to offset the cost of the bill. The fee would apply to financial institutions with more than $50 billion in assets and hedge funds with more than $10 billion in assets, with entities deemed high-risk paying more than safer ones.
Let's not forget the credit-rating agencies! The bill would establish a new quasi-government entity designed to address conflicts of interest inherent in the credit-rating business after the SEC studies the matter. It would also allow investors to sue credit-rating firms for a "knowing or reckless" failure to conduct a reasonable investigation, a lower liability standard than the firms were lobbying to get. Never mind that no one actually CARES what the Standard & Poor's and Moody's think. We MUST regulate them!
What will be the effect of this bill? Simple! Whatever the bill was designed to accomplish, expect the opposite. We can expect less systemic liquidity, a renewed credit crunch and either a obscenely profitable banking sector, or one that goes out of business! The good news? More employment, power and bonuses for all our friends at "Government Sachs"!
Marko's Take
Thursday, June 10, 2010
Hedge Funds Fail To Prevent Large Losses In May
While many, if not most, hedge funds don't actually "hedge", they do promote themselves as un-correlated to the market, thereby theoretically providing investors with less risk. Unfortunately, their performance during market meltdowns demonstrates quite the opposite.
Nearly every market correction or bear market has been accompanied by overall poor returns and often complete wipe-outs of these believed-to-be elite vehicles. Is this asking too much? Possibly, but since most funds charge premium fees, shouldn't investors expect premium performance? Especially during the most volatile and difficult periods?
The month of May, which included a 1,000 point intra-day loss for the Dow Jones Industrial Average, was a perfect test case. Volatility, which had been subdued for a year, suddenly exploded. If there was any time for a hedge fund to strut its stuff, it was last month. How'd they do?
Terribly! May was the worst month for hedge funds since November 2008, according to Hedge Fund Research Inc. (HFR). Virtually every strategy was down. Larger funds managed by SAC Capital, Paulson & Co. and Third Point Management lost between 2.3% and 5.6% in the month, say people familiar with the funds. Their mistakes ranged from concentrated bets on consumer companies to financial-company wagers.
Louis Bacon, who founded Moore Global Investment, had scored annual gains of about 20% on average over the past two decades. His largest fund endured losses of 9.2% in May, way underperforming the average decline of 2.3%, according to HFR's index.
The average hedge fund was up 1.3% for 2010 through May, compared with a 6.4% decline for the big Moore fund.
Eurekahedge, a Singapore-based fund tracker, publishes a series of indices on a monthly basis, measuring the returns of hedge funds by region and investment strategy. Its indices showed hedge funds focusing on Asia (excluding Japan) lost an average of 4.86% during the month of May, pushing total returns for 2010 to minus 3.15%.
Barclay's index of hedge fund returns for May, which encompasses more than 1,300 funds, showed a loss of nearly 3%, nearly wiping out all returns for 2010. The Credit Suisse/Tremont Index revealed a drop of 2.26%.
But money still poured into hedge funds for a second consecutive quarter, making the industry reach $1.66 trillion of assets under management, up from $1.60 trillion in the last quarter of last year, HFR reported. The hedge fund industry reached a record $1.8 trillion under management at the peak of the market in 2007, but the figure is now lower following client withdrawals and the credit and equity losses suffered during the credit crunch.
While hedge funds advertise themselves as sophisticated investors, they are still prone to huge losses which can easily become complete wipe-outs. This is the result of the use of massive leverage in combination with risky trades. Since they make their compensation by taking a portion of gains, but don't always cough up money when they lose, hedge funds are incentivized to roll the dice. Heads I win, tails you lose.
Everyone who still has assets in my fund, please step forward. You, not so fast!
Of course, if they screw up, they are the first to accept responsibility (sarcasm intentional). Goldman Sachs (GS) was sued for $1 billion by Basis Yield Alpha Fund (Master), an Australian hedge fund, claiming that the bank made “misleading statements” in connection with Timberwolf, a complicated mortgage security the bank underwrote in 2007.
A spokesman for GS said: “The lawsuit is a misguided attempt by Basis, a hedge fund that was one of the world’s most experienced CDO investors, to shift its investment losses to Goldman Sachs." Loathe as I am to agree with "Government Sachs", they have a point. How does an entity claiming expertise in CDO's get taken advantage of to the tune of a total loss? Goldman did NOT force them to over-leverage.
A spokesman for GS went further: “At the time of the Timberwolf transaction, Basis specifically stated that it would not place any reliance on Goldman Sachs. Basis is now trying to recoup its losses based on false allegations that it was misled about aspects of the transaction and market conditions.”
Sorry Basis, you can't have it both ways. You either know what you're doing, or you don't. You can't claim to be an expert, sign a "big boy" letter attesting to that and then claim to have been duped.
Of course, if the trade had worked out for you, and GS lost money, you'd have no problem with the "misleading statements". Or, would you give it back to Goldman? Point made.
If you're invested in hedge funds, caveat emptor.
Marko's Take
Please visit some of our favorite places for lots of great information to investors at a very reasonable price. We particularly like the following: http://www.lemetropolecafe.com/, http://www.aegeancapital.com/, http://marketviews.tv/, and, of course, our own You Tube channel at http://www.youtube.com/markostaketv.
Nearly every market correction or bear market has been accompanied by overall poor returns and often complete wipe-outs of these believed-to-be elite vehicles. Is this asking too much? Possibly, but since most funds charge premium fees, shouldn't investors expect premium performance? Especially during the most volatile and difficult periods?
The month of May, which included a 1,000 point intra-day loss for the Dow Jones Industrial Average, was a perfect test case. Volatility, which had been subdued for a year, suddenly exploded. If there was any time for a hedge fund to strut its stuff, it was last month. How'd they do?
Terribly! May was the worst month for hedge funds since November 2008, according to Hedge Fund Research Inc. (HFR). Virtually every strategy was down. Larger funds managed by SAC Capital, Paulson & Co. and Third Point Management lost between 2.3% and 5.6% in the month, say people familiar with the funds. Their mistakes ranged from concentrated bets on consumer companies to financial-company wagers.
Louis Bacon, who founded Moore Global Investment, had scored annual gains of about 20% on average over the past two decades. His largest fund endured losses of 9.2% in May, way underperforming the average decline of 2.3%, according to HFR's index.
The average hedge fund was up 1.3% for 2010 through May, compared with a 6.4% decline for the big Moore fund.
Eurekahedge, a Singapore-based fund tracker, publishes a series of indices on a monthly basis, measuring the returns of hedge funds by region and investment strategy. Its indices showed hedge funds focusing on Asia (excluding Japan) lost an average of 4.86% during the month of May, pushing total returns for 2010 to minus 3.15%.
Barclay's index of hedge fund returns for May, which encompasses more than 1,300 funds, showed a loss of nearly 3%, nearly wiping out all returns for 2010. The Credit Suisse/Tremont Index revealed a drop of 2.26%.
But money still poured into hedge funds for a second consecutive quarter, making the industry reach $1.66 trillion of assets under management, up from $1.60 trillion in the last quarter of last year, HFR reported. The hedge fund industry reached a record $1.8 trillion under management at the peak of the market in 2007, but the figure is now lower following client withdrawals and the credit and equity losses suffered during the credit crunch.
While hedge funds advertise themselves as sophisticated investors, they are still prone to huge losses which can easily become complete wipe-outs. This is the result of the use of massive leverage in combination with risky trades. Since they make their compensation by taking a portion of gains, but don't always cough up money when they lose, hedge funds are incentivized to roll the dice. Heads I win, tails you lose.
Everyone who still has assets in my fund, please step forward. You, not so fast!
Of course, if they screw up, they are the first to accept responsibility (sarcasm intentional). Goldman Sachs (GS) was sued for $1 billion by Basis Yield Alpha Fund (Master), an Australian hedge fund, claiming that the bank made “misleading statements” in connection with Timberwolf, a complicated mortgage security the bank underwrote in 2007.
A spokesman for GS said: “The lawsuit is a misguided attempt by Basis, a hedge fund that was one of the world’s most experienced CDO investors, to shift its investment losses to Goldman Sachs." Loathe as I am to agree with "Government Sachs", they have a point. How does an entity claiming expertise in CDO's get taken advantage of to the tune of a total loss? Goldman did NOT force them to over-leverage.
A spokesman for GS went further: “At the time of the Timberwolf transaction, Basis specifically stated that it would not place any reliance on Goldman Sachs. Basis is now trying to recoup its losses based on false allegations that it was misled about aspects of the transaction and market conditions.”
Sorry Basis, you can't have it both ways. You either know what you're doing, or you don't. You can't claim to be an expert, sign a "big boy" letter attesting to that and then claim to have been duped.
Of course, if the trade had worked out for you, and GS lost money, you'd have no problem with the "misleading statements". Or, would you give it back to Goldman? Point made.
If you're invested in hedge funds, caveat emptor.
Marko's Take
Please visit some of our favorite places for lots of great information to investors at a very reasonable price. We particularly like the following: http://www.lemetropolecafe.com/, http://www.aegeancapital.com/, http://marketviews.tv/, and, of course, our own You Tube channel at http://www.youtube.com/markostaketv.
Monday, April 19, 2010
What Does 'GOLD'man Sachs Have To Do With Gold?
Nothing's easier than hopping on board a consistent and trending market. A Buy and Hold strategy is the most effective. However, the precious metals market continues to trade within the confines of a fairly narrow range.
After peaking briefly just above $1,200 in early December, Gold has traded in a $100 range for the last 4 months, primarily oscillating between $1,050 and $1,150. After slighty piercing the upside part of the range several days ago and giving signs that it was ready to resume its bull market, the yellow metal has once again given faithfull investors a temporary heart attack - dropping about $25 on Friday.
The benchmark index for precious metals stocks, HUI or "Gold Bugs Index", has also traded within a fairly narrow range despite a great deal of intra-day volatility. After reaching a high of about 500 in early December, the HUI lost a quick 25% to the 375 level in February and has been gently climbing in a stair-step fashion.
Trading a market is always virtually impossible except for the extra-ordinarily skilled or lucky. In the case of GOLD, or the underlying HUI, the pattern has demonstrated very little momentum or continuity in either direction. So, trading has resulted in whip-saws, unnecessary transaction costs and frustration.
The question remains as to what to do now, especially in light of the Friday smackdown ostensibly driven by the SEC allegations levied against Goldman Sachs (GS), aka "Government Sachs". It would seem that these allegations are specific only to the company and not a market event. It's even more difficult to comprehend how the "GOLD"man Sachs situation would cause the smashing of GOLD itself.
The answer is quite simple. They aren't related! The reaction in the overall market and the precious metals space was purely coincidental. The S & P 500 was already tremendously overbought and overdue for a sharp correction. On some dimensions, so was GOLD and the precious metals market. Traders often use significant news events as a reason to go to cash, especially in advance of a weekend, so as not to get caught in an adverse situation while the markets are closed.
This led to the significant broad market selloff which took other financial assets with it. GOLD and the underlying precious metals stocks weren't nearly as stretched as the general market, but there had been a decent rally in the last several weeks and nimble traders used the news as an opportunity to take profits.
From a technical perspective, the charts of GOLD and HUI remain in a bullish configuration. Neither has experienced a downward penetration of their respective 200 day moving averages. If that should occur, it might justify taking a closer look.
None of the underlying fundamental factors suggest that any change in outlook is warranted. Physical supplies of GOLD and SILVER remain tight and precious metals mining companies continue to deliver record revenues and profits.
The effects of record stimulus spending remain to filter through the economy. We've witnessed some, but not much, good news on retail sales, GDP and corporate profits. Yet, without much benefit to employment. Economists refer to that initial reaction as the "output effect".
Historically, the "output effect" is followed, with a time lag, by the "price effect". The price effect, or an increase in reported and un-reported inflation, is still simmering beneath the surface. The inevitable price effect will prove to be an excellent underpinning toward the continuation and acceleration of real assets such as GOLD and SILVER. As that occurs, the precious metals companies will continue to spit out even better profits and will be leading market participants.
One should view these temporary one- or two-day selloffs in precious metals stocks as gifts. Once the mining sector is clearly into gear, it will be very difficult to board the train. The character of the market will change and short-term selloffs will become fewer and shorter.
During the great NASDAQ bubble, as the tech-market accelerated, many experienced investors became skeptical of the move and missed the opportunity to generate incredible wealth. I should know. I was one of them!
The GOLD and miners market have all the hallmarks of being on the cusp of entering a hyperbolic growth phase. Letting the day-to-day noise affect our emotions and investment strategies is a mistake that even the most experienced investors make. No one has a crystal ball. However, until demonstrated to the contrary, Marko's Take says stay long and stay patient.
Marko's Take
Please visit our new YouTube video on the Legality Of The Personal Income Tax at (http://www.youtube.com/markostaketv#p/u/0/1TInKnCIikg).
After peaking briefly just above $1,200 in early December, Gold has traded in a $100 range for the last 4 months, primarily oscillating between $1,050 and $1,150. After slighty piercing the upside part of the range several days ago and giving signs that it was ready to resume its bull market, the yellow metal has once again given faithfull investors a temporary heart attack - dropping about $25 on Friday.
The benchmark index for precious metals stocks, HUI or "Gold Bugs Index", has also traded within a fairly narrow range despite a great deal of intra-day volatility. After reaching a high of about 500 in early December, the HUI lost a quick 25% to the 375 level in February and has been gently climbing in a stair-step fashion.
Trading a market is always virtually impossible except for the extra-ordinarily skilled or lucky. In the case of GOLD, or the underlying HUI, the pattern has demonstrated very little momentum or continuity in either direction. So, trading has resulted in whip-saws, unnecessary transaction costs and frustration.
The question remains as to what to do now, especially in light of the Friday smackdown ostensibly driven by the SEC allegations levied against Goldman Sachs (GS), aka "Government Sachs". It would seem that these allegations are specific only to the company and not a market event. It's even more difficult to comprehend how the "GOLD"man Sachs situation would cause the smashing of GOLD itself.
The answer is quite simple. They aren't related! The reaction in the overall market and the precious metals space was purely coincidental. The S & P 500 was already tremendously overbought and overdue for a sharp correction. On some dimensions, so was GOLD and the precious metals market. Traders often use significant news events as a reason to go to cash, especially in advance of a weekend, so as not to get caught in an adverse situation while the markets are closed.
This led to the significant broad market selloff which took other financial assets with it. GOLD and the underlying precious metals stocks weren't nearly as stretched as the general market, but there had been a decent rally in the last several weeks and nimble traders used the news as an opportunity to take profits.
From a technical perspective, the charts of GOLD and HUI remain in a bullish configuration. Neither has experienced a downward penetration of their respective 200 day moving averages. If that should occur, it might justify taking a closer look.
None of the underlying fundamental factors suggest that any change in outlook is warranted. Physical supplies of GOLD and SILVER remain tight and precious metals mining companies continue to deliver record revenues and profits.
The effects of record stimulus spending remain to filter through the economy. We've witnessed some, but not much, good news on retail sales, GDP and corporate profits. Yet, without much benefit to employment. Economists refer to that initial reaction as the "output effect".
Historically, the "output effect" is followed, with a time lag, by the "price effect". The price effect, or an increase in reported and un-reported inflation, is still simmering beneath the surface. The inevitable price effect will prove to be an excellent underpinning toward the continuation and acceleration of real assets such as GOLD and SILVER. As that occurs, the precious metals companies will continue to spit out even better profits and will be leading market participants.
One should view these temporary one- or two-day selloffs in precious metals stocks as gifts. Once the mining sector is clearly into gear, it will be very difficult to board the train. The character of the market will change and short-term selloffs will become fewer and shorter.
During the great NASDAQ bubble, as the tech-market accelerated, many experienced investors became skeptical of the move and missed the opportunity to generate incredible wealth. I should know. I was one of them!
The GOLD and miners market have all the hallmarks of being on the cusp of entering a hyperbolic growth phase. Letting the day-to-day noise affect our emotions and investment strategies is a mistake that even the most experienced investors make. No one has a crystal ball. However, until demonstrated to the contrary, Marko's Take says stay long and stay patient.
Marko's Take
Please visit our new YouTube video on the Legality Of The Personal Income Tax at (http://www.youtube.com/markostaketv#p/u/0/1TInKnCIikg).
Tuesday, March 30, 2010
Taxing Banks Gains Favor, But Is It The Answer?
In January, President Obama floated an idea to tax banks as a means of compensating America for the tremendous financial damage caused by the collective stupidity and greed of the banking sector. That idea is gaining support on both sides of the Atlantic.
Anti-Wall Street sentiment, in conjuction with concerns over the ballooning budget deficit, have Democratic leaders on Capitol Hill embracing the proposal. Obama's proposal is expected to raise up to $117 billion to cover projected bailout losses. Republicans have been silent as their instinctive opposition to tax increases is in conflict with their fear of defending big bankers.
The administration has opposed interfering with bonuses in the past, saying shareholders and Boards of Directors should be responsible for determining corporate compensation.
“We’re already hearing a hue and cry from Wall Street suggesting that this proposed fee is not only unwelcome but unfair,” he said. “That by some twisted logic it is more appropriate for the American people to bear the cost of the bailout rather than the industry that benefited from it, even though these executives are out there giving themselves huge bonuses.”
The proposed tax would apply to bank, thrift and insurance companies with more than $50 billion in assets and would start after June 30. It would not apply to certain holdings, like customers’ insured savings, but to assets in risk-taking operations.
The concept is gaining momentum in Europe. However, different countries have proposed varying structures.
Germany and Sweden would use the money to fund a "resolution authority" that would use the money to shut troubled banks whose failure would put the broader economy at risk. Others, such as France, would assess the fee after a crisis passed.
Officials in the U.S., Europe and the IMF say the bank-tax concept has gained so much momentum that it is likely to be on the agenda when of the Group of 20 industrial and developing nations meet in Canada in June. "Reforms would put in practice the principle that large institutions should bear the costs of any losses to the taxpayer," U.S. Treasury Secretary Timothy Geithner said in a speech last week.
In the U.K., Prime Minister Gordon Brown has been championing a global levy, including one in which revenues would be used to help pay down deficits. The opposition Conservative Party says it will press ahead regardless, although the fee's size will depend on how far other countries follow
The IMF plans to recommend a bank tax when global economic officials convene in Washington in April and is leaning toward a fee in advance to fund a resolution authority, said officials involved with the IMF effort.
Support for a bank tax isn't unanimous among the G-20. Canada, which now has an outsized role in the group's deliberations because it hosts this year's meeting, opposes a tax on its banks.
Instead, Canada, whose banks weathered the crisis well, is pressing the G-20 to stiffen leverage requirements to avert problems, a proposal that has already been on the group's agenda. India and China haven't taken positions.
Unfortunately, any industry specific tax, like the old "windfall profits tax" imposed on oil companies in the 1970's, will only make a troubled situation worse. The problem in the finacial industry has always been "moral hazard", the practice of allowing banks take excessive risks and then rescuing them when their ill-advised risk-taking backfires. This practice incentivizes a "heads I win, tails I DON'T lose" mentality.
The other problem is the very "cozy" relationship between the big banks, the Treasury, the Federal Reserve and the administration itself. Major banks should be treated at arms-length, but they're not. With an administration made up of Goldman Sachs alumni, the "conflicts of interest" will undoubtedly lead to legislation that looks tough on the surface, but will instead leave the banks with a "bank-door" way to coin money.
The only mechanism to enforce a fair playing field is to HAVE a fair playing field. WE DON'T.
Marko's Take? Don't waste our time with legislation that will only buy votes from angry Americans and get out-of-bed with these institutions. Only then can we create a competitive and fair financial system.
Marko's Take
Please visit us on You Tube at http://www.youtube.com/markostake and our friends at LeMetropole http://www.lemetropolecafe.com/ and http://www.stockmavrick.com/.
Anti-Wall Street sentiment, in conjuction with concerns over the ballooning budget deficit, have Democratic leaders on Capitol Hill embracing the proposal. Obama's proposal is expected to raise up to $117 billion to cover projected bailout losses. Republicans have been silent as their instinctive opposition to tax increases is in conflict with their fear of defending big bankers.
The administration has opposed interfering with bonuses in the past, saying shareholders and Boards of Directors should be responsible for determining corporate compensation.
“We’re already hearing a hue and cry from Wall Street suggesting that this proposed fee is not only unwelcome but unfair,” he said. “That by some twisted logic it is more appropriate for the American people to bear the cost of the bailout rather than the industry that benefited from it, even though these executives are out there giving themselves huge bonuses.”
The proposed tax would apply to bank, thrift and insurance companies with more than $50 billion in assets and would start after June 30. It would not apply to certain holdings, like customers’ insured savings, but to assets in risk-taking operations.
The concept is gaining momentum in Europe. However, different countries have proposed varying structures.
Germany and Sweden would use the money to fund a "resolution authority" that would use the money to shut troubled banks whose failure would put the broader economy at risk. Others, such as France, would assess the fee after a crisis passed.
Officials in the U.S., Europe and the IMF say the bank-tax concept has gained so much momentum that it is likely to be on the agenda when of the Group of 20 industrial and developing nations meet in Canada in June. "Reforms would put in practice the principle that large institutions should bear the costs of any losses to the taxpayer," U.S. Treasury Secretary Timothy Geithner said in a speech last week.
In the U.K., Prime Minister Gordon Brown has been championing a global levy, including one in which revenues would be used to help pay down deficits. The opposition Conservative Party says it will press ahead regardless, although the fee's size will depend on how far other countries follow
The IMF plans to recommend a bank tax when global economic officials convene in Washington in April and is leaning toward a fee in advance to fund a resolution authority, said officials involved with the IMF effort.
Support for a bank tax isn't unanimous among the G-20. Canada, which now has an outsized role in the group's deliberations because it hosts this year's meeting, opposes a tax on its banks.
Instead, Canada, whose banks weathered the crisis well, is pressing the G-20 to stiffen leverage requirements to avert problems, a proposal that has already been on the group's agenda. India and China haven't taken positions.
Unfortunately, any industry specific tax, like the old "windfall profits tax" imposed on oil companies in the 1970's, will only make a troubled situation worse. The problem in the finacial industry has always been "moral hazard", the practice of allowing banks take excessive risks and then rescuing them when their ill-advised risk-taking backfires. This practice incentivizes a "heads I win, tails I DON'T lose" mentality.
The other problem is the very "cozy" relationship between the big banks, the Treasury, the Federal Reserve and the administration itself. Major banks should be treated at arms-length, but they're not. With an administration made up of Goldman Sachs alumni, the "conflicts of interest" will undoubtedly lead to legislation that looks tough on the surface, but will instead leave the banks with a "bank-door" way to coin money.
The only mechanism to enforce a fair playing field is to HAVE a fair playing field. WE DON'T.
Marko's Take? Don't waste our time with legislation that will only buy votes from angry Americans and get out-of-bed with these institutions. Only then can we create a competitive and fair financial system.
Marko's Take
Please visit us on You Tube at http://www.youtube.com/markostake and our friends at LeMetropole http://www.lemetropolecafe.com/ and http://www.stockmavrick.com/.
Tuesday, March 2, 2010
Government Sachs Under Fire!
Poor ole Government Sachs (sarcasm intentional!). Now, because of all the bad publicity, it seems that they have to disclose, as a "risk factor" of the company, the increasing drumbeat of negative publicity. We, at Marko's Take, are proud to have done our share to contribute to that negative publicity. Could the timing be more than just coincidental (immodesty intentional)?
Recall that just a couple of days ago, we took a hard, long look at the boys behind the curtain (http://markostake.blogspot.com/2010/02/government-sachs-how-big-menace-is-it.html).
Now, Goldman Sachs (GS) has been forced to whine that adverse publicity has become a "risk factor" in its annual report that any investor need to take into account before making an investment in the company (http://online.wsj.com/article/SB10001424052748704754604575095313135203110.html?mod=djemTMB_h). I can't recall such a disclosure in decades of being a professional investor!
In its annual report, the New York company said "adverse publicity" could have "a negative impact on our reputation and on the morale and performance of our employees, which could adversely affect our businesses and results of operations."
The unusual disclosure in a 12-page section of "risk factors", ranging from rocky financial markets to natural disasters, is the latest sign of Goldman's whipping-boy status among rivals, lawmakers and angry Americans because of the firm's giant profits.
Some corporate-governance experts said the move isn't surprising given all the unwelcome attention Goldman has received since the financial crisis erupted. In July, a Rolling Stone article compared Goldman to a "great vampire squid wrapped around the face of humanity." The phrase has been widely repeated in other publications and online, along with Chief Executive Lloyd Blankfein's comment to a U.K. newspaper in November that the firm is doing "God's work." (GOD'S WORK???)
But, before you feel TOO sorry for the boys, GS just released a report, filed with the Securities and Exchange Commission (SEC), confirming what Marko's Take reported in our piece last Friday: they make their money from proprietary trading, not traditional banking or investment banking activities
(http://www.ft.com/cms/s/0/a6ce91f6-256f-11df-9cdb-00144feab49a.html).
According to the report, GS made at least $100 million in net trading revenues on 131 days last year! – equivalent to once every other trading day, according to the filing with the SEC.
Goldman managed the result even as it took greater trading risks in 2009 than in the previous year. Its daily “value at risk” (VAR) – the most that the bank estimates that its traders could lose on a given day – was $218 million in 2009, up from $180 million during the previous fiscal year, which closed in November 2008.
Helps to have friends in high places, NO?
Goldman’s 131 $100 million trading days in 2009 shattered its previous high of 90 days, set in 2008. In last year’s 263 trading days, the bank lost money 19 times, Goldman said in the filing. Its daily losses never exceeded $100 milion. “It’s impressive, but it’s not unexpected,” David Hendler, an analyst with CreditSights said. “They were one of the few games in town in 2009.”
Trading and principal investments, which includes Goldman’s merchant banking activities, account for more than 75% of its total net revenue.
Once we at Marko's Take stop sobbing for poor GS, we would love to field your comments. Think we're picking on them? TAKE ME ON!
Marko's Take
Episode 3 of our new YouTube series is now posted at (http://www.youtube.com/markostaketv). Look for episode 4 exposing the internal machinations of the Federal Reserve to be posted shortly. Federal Reserve? Or do we mean Goldman Sachs? It's tough to tell the players apart without a scorecard!
Recall that just a couple of days ago, we took a hard, long look at the boys behind the curtain (http://markostake.blogspot.com/2010/02/government-sachs-how-big-menace-is-it.html).
Now, Goldman Sachs (GS) has been forced to whine that adverse publicity has become a "risk factor" in its annual report that any investor need to take into account before making an investment in the company (http://online.wsj.com/article/SB10001424052748704754604575095313135203110.html?mod=djemTMB_h). I can't recall such a disclosure in decades of being a professional investor!
In its annual report, the New York company said "adverse publicity" could have "a negative impact on our reputation and on the morale and performance of our employees, which could adversely affect our businesses and results of operations."
The unusual disclosure in a 12-page section of "risk factors", ranging from rocky financial markets to natural disasters, is the latest sign of Goldman's whipping-boy status among rivals, lawmakers and angry Americans because of the firm's giant profits.
Some corporate-governance experts said the move isn't surprising given all the unwelcome attention Goldman has received since the financial crisis erupted. In July, a Rolling Stone article compared Goldman to a "great vampire squid wrapped around the face of humanity." The phrase has been widely repeated in other publications and online, along with Chief Executive Lloyd Blankfein's comment to a U.K. newspaper in November that the firm is doing "God's work." (GOD'S WORK???)
But, before you feel TOO sorry for the boys, GS just released a report, filed with the Securities and Exchange Commission (SEC), confirming what Marko's Take reported in our piece last Friday: they make their money from proprietary trading, not traditional banking or investment banking activities
(http://www.ft.com/cms/s/0/a6ce91f6-256f-11df-9cdb-00144feab49a.html).
According to the report, GS made at least $100 million in net trading revenues on 131 days last year! – equivalent to once every other trading day, according to the filing with the SEC.
Goldman managed the result even as it took greater trading risks in 2009 than in the previous year. Its daily “value at risk” (VAR) – the most that the bank estimates that its traders could lose on a given day – was $218 million in 2009, up from $180 million during the previous fiscal year, which closed in November 2008.
Helps to have friends in high places, NO?
Goldman’s 131 $100 million trading days in 2009 shattered its previous high of 90 days, set in 2008. In last year’s 263 trading days, the bank lost money 19 times, Goldman said in the filing. Its daily losses never exceeded $100 milion. “It’s impressive, but it’s not unexpected,” David Hendler, an analyst with CreditSights said. “They were one of the few games in town in 2009.”
Trading and principal investments, which includes Goldman’s merchant banking activities, account for more than 75% of its total net revenue.
Once we at Marko's Take stop sobbing for poor GS, we would love to field your comments. Think we're picking on them? TAKE ME ON!
Marko's Take
Episode 3 of our new YouTube series is now posted at (http://www.youtube.com/markostaketv). Look for episode 4 exposing the internal machinations of the Federal Reserve to be posted shortly. Federal Reserve? Or do we mean Goldman Sachs? It's tough to tell the players apart without a scorecard!
Friday, February 26, 2010
Government Sachs: How Big A Menace Is It?
Goldman Sachs (GS) is the firm that everyone LOVES to HATE and for good reason. Not only does this firm bear unreasonable power in the world financial structure, it is so intertwined with the U.S. Government, that the term "Government Sachs" has now emerged in our lexicon.
To be fair, GS is the premiere investment banking firm. But, to be honest, did they achieve that position fairly? Marko's Take says NO!
Most obviously is the revolving door between high level GS executives and high level government posts. A partial list includes the following: Rahm Emanuel, Jon Corzine, Hank Paulson, Tim Geithner, Neil Kashkari, key Treasury players Dan Jester, Steve Shafran, Edward C. Forst, and Robert K. Steel. The list goes on and on.
The conflict of interest is OBVIOUS and very ominous.
But, the conflicts don't stop there. A senior Goldman Sachs executive sent an e-mail message to clients recently disclosing that the firm’s Fundamental Strategies Group might have shared investment ideas with the firm’s proprietary trading group, or some clients before sharing them with others.
The e-mail message, obtained by DealBook, demonstrates the various conflicts that Goldman and other firms face in balancing the interests of its various clients and its own trading operation.
“We may trade, and may have existing positions, based on trading ideas before we have discussed those trading ideas with you,” Thomas Mazarakis, head of Goldman’s Fundamental Strategies Group, wrote (http://dealbook.blogs.nytimes.com/2010/01/12/goldman-executive-discloses-conflicts-policy/).
Marko's Take? What a great bunch of guys!
GS is also believed to be one of, if not, THE CONTROLLING OWNER of the FED!
Still not enough? A highly secretive entity, known as the "Plunge Protection Team" (PPT), is also believed to be directed by GS. The Working Group on Financial Markets, known colloquially as the PPT, was created in 1988 by Ronald Reagan, in response to the Black Monday stock market crash in 1987. Their operations have always been shrouded in secrecy, with a Washington Post article from 1997 writing that the group aims to prevent the "smoothly running global financial machine" from locking up.
If GS in indeed involved in market operations, that would explain the firm's enormous profitability which emanates primarily from its trading book, not lending as its bank mandate would suggest. Nothing like having a little inside information, trading ahead of clients and minting money through the FED (sarcasm intentional)! Nothing like having all your executives get cushy government jobs when they get tired of $50 million bonuses (sarcasm intentional)!
Until the FED's, Goldman's and the Treasury's surreptitious activities are disclosed, reviewed and audited will we know the real truth. However, the circumstantial evidence is quite damning. Marko's Take? Let's put these folks under the microscope and, if necessary, CLEAN HOUSE!
Think I'm being unfair to big ole Goldman Sachs? TAKE ME ON!
Marko's Take
Please visit our new YouTube site at http://www.youtube.com/markostaketv. We have a total of 8 episodes planned with a new segment, "What Exactly Is Peak Oil?... Part 2", to be released shortly.
Keep the faith...the revolution has begun and we WILL take the country back!
To be fair, GS is the premiere investment banking firm. But, to be honest, did they achieve that position fairly? Marko's Take says NO!
Most obviously is the revolving door between high level GS executives and high level government posts. A partial list includes the following: Rahm Emanuel, Jon Corzine, Hank Paulson, Tim Geithner, Neil Kashkari, key Treasury players Dan Jester, Steve Shafran, Edward C. Forst, and Robert K. Steel. The list goes on and on.
The conflict of interest is OBVIOUS and very ominous.
But, the conflicts don't stop there. A senior Goldman Sachs executive sent an e-mail message to clients recently disclosing that the firm’s Fundamental Strategies Group might have shared investment ideas with the firm’s proprietary trading group, or some clients before sharing them with others.
The e-mail message, obtained by DealBook, demonstrates the various conflicts that Goldman and other firms face in balancing the interests of its various clients and its own trading operation.
“We may trade, and may have existing positions, based on trading ideas before we have discussed those trading ideas with you,” Thomas Mazarakis, head of Goldman’s Fundamental Strategies Group, wrote (http://dealbook.blogs.nytimes.com/2010/01/12/goldman-executive-discloses-conflicts-policy/).
Marko's Take? What a great bunch of guys!
GS is also believed to be one of, if not, THE CONTROLLING OWNER of the FED!
Still not enough? A highly secretive entity, known as the "Plunge Protection Team" (PPT), is also believed to be directed by GS. The Working Group on Financial Markets, known colloquially as the PPT, was created in 1988 by Ronald Reagan, in response to the Black Monday stock market crash in 1987. Their operations have always been shrouded in secrecy, with a Washington Post article from 1997 writing that the group aims to prevent the "smoothly running global financial machine" from locking up.
If GS in indeed involved in market operations, that would explain the firm's enormous profitability which emanates primarily from its trading book, not lending as its bank mandate would suggest. Nothing like having a little inside information, trading ahead of clients and minting money through the FED (sarcasm intentional)! Nothing like having all your executives get cushy government jobs when they get tired of $50 million bonuses (sarcasm intentional)!
Until the FED's, Goldman's and the Treasury's surreptitious activities are disclosed, reviewed and audited will we know the real truth. However, the circumstantial evidence is quite damning. Marko's Take? Let's put these folks under the microscope and, if necessary, CLEAN HOUSE!
Think I'm being unfair to big ole Goldman Sachs? TAKE ME ON!
Marko's Take
Please visit our new YouTube site at http://www.youtube.com/markostaketv. We have a total of 8 episodes planned with a new segment, "What Exactly Is Peak Oil?... Part 2", to be released shortly.
Keep the faith...the revolution has begun and we WILL take the country back!
Saturday, January 2, 2010
Why Does The Stock Market Act Like The Energizer Bunny?
It keeps going and going and going. And, not to the men's room!
Being serious, the stock market rally has me a tad puzzled for a variety of reasons which I'll outline.
A rally off the March lows was very expectable to something like 9,500, which would roughly be the midpoint of its all-time high of approximately 14,000 and recent low of 6,600. Yet, it has been recently flirting with 11,000, closed the year at 10,428 and change and seems poised to shoot higher still!
This has various market timers, especially those empolying an idiotic system known as the "Elliot Wave" in a complete snit and ready for the loonie bin, if they're not there already! I realize that most readers will not be familiar with the Elliott Wave, but it can be "googled" in Wikipedia. If you DO read about it, you'll realize how utterly complicated, ridiculous and unreliable it is!
According to the Wall St. Journal, the reason for the rise is the unprecedented stimulus and money creation by the Federal Reserve, Treasury and Obama Administration. According to Marko's Take, it is not. According to others, the stock market is anticipating a powerful economic recovery, especially by the talking heads at CNBC! Again, according to Marko's Take, it is not.
As you've gathered, my "thesis" is entirely different! I believe the ongoing rally is a combination of two factors: the severely needed bounce off the March lows and market manipulation by the troika consisting of the Federal Reserve, Treasury and Goldman Sachs. As to where it goes from here, I ain't got the vaguest!
Hope you had a most joyous New Year. Your's truly definitely did.
Tomorrow, we'll review the situation in real estate.
Marko's Take
Being serious, the stock market rally has me a tad puzzled for a variety of reasons which I'll outline.
A rally off the March lows was very expectable to something like 9,500, which would roughly be the midpoint of its all-time high of approximately 14,000 and recent low of 6,600. Yet, it has been recently flirting with 11,000, closed the year at 10,428 and change and seems poised to shoot higher still!
This has various market timers, especially those empolying an idiotic system known as the "Elliot Wave" in a complete snit and ready for the loonie bin, if they're not there already! I realize that most readers will not be familiar with the Elliott Wave, but it can be "googled" in Wikipedia. If you DO read about it, you'll realize how utterly complicated, ridiculous and unreliable it is!
According to the Wall St. Journal, the reason for the rise is the unprecedented stimulus and money creation by the Federal Reserve, Treasury and Obama Administration. According to Marko's Take, it is not. According to others, the stock market is anticipating a powerful economic recovery, especially by the talking heads at CNBC! Again, according to Marko's Take, it is not.
As you've gathered, my "thesis" is entirely different! I believe the ongoing rally is a combination of two factors: the severely needed bounce off the March lows and market manipulation by the troika consisting of the Federal Reserve, Treasury and Goldman Sachs. As to where it goes from here, I ain't got the vaguest!
Hope you had a most joyous New Year. Your's truly definitely did.
Tomorrow, we'll review the situation in real estate.
Marko's Take
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