Friday, November 20, 2009

Who John Paulson Consulted With before Going for Gold

John Paulson - Wikipedia, the free encyclopedia:
"Paulson & Co., Inc. had assets under management (as of June 1, 2007) of $12.5 billion (95% from institutions), which leapt to $36 billion as of November 2008. Under his direction, Paulson & Co has capitalized on the problems in the foreclosure and mortgage backed securities (MBS) markets. In 2008 he decided to start a new fund that would capitalize on Wall Street's capital problems by lending money to investment banks and other hedge funds currently feeling the pressure of the more than $345 billion of write downs resulting from under-performing assets linked to the housing market. On May 15, 2008, Paulson & Co., which bought 50 million shares of Yahoo stock during the first quarter of 2008, said it is supporting Carl Icahn on a proxy fight to replace Yahoo's board. In early 2008, the firm hired former Federal Reserve Chairman Alan Greenspan."

How To Survive The Coming Global Economic Collapse

How To Survive The Coming Global Economic Collapse: Not just for the Argentina text... it's great, and reminded me of my very own hyperinflation traumas. But the image of Mad Max in the article above was even better. I was waiting for these images to come up. Ready for Bartertown?

Now on CNBC: Gold as money

I wouldn't waste a keyboard click on quoting once again an analyst that values gold at $x000 - if it came from an alarmist newsletter promo. But tracking the movement of gold as a trend in public consciousness, the source for this broadcast is interesting:

CNBC Stock Blog — Gold's Money Value is $4,000-$11,000: Strategist — Market News - CNBC Stock Blog -
"Rickards said he’s been bullish on gold for a while and said he sees gold rising to $2,000 an ounce “without breaking a sweat” in 2010. “That’s on fundamentals without treating it as money,” he added."

Thursday, November 19, 2009

U.S. Mint to Resume Selling Some Gold Coins
"EW YORK—Demand for gold coins and bars, already strong as the price of gold sets records, could rise as the U.S. Mint is set to resume selling certain types of gold coins Dec. 3.

Last year, the Mint had to halt sales of half-, quarter- and tenth-ounce coins because of a shortage of blank coins. It now has enough supply to do so.

'The demand is strong, but we also need to have the blanks to be able to do it,' spokesman Michael White said."

Wednesday, November 18, 2009

Obama joins Roubini in "W" recession scenario

It took months (and some Chinese wisdom) for Roubini's "W" model, an apocalyptic prophecy, to travel the international synapses from the lunatic fringe of NY University professors, through Wall street columnists, to The Man of Hope himself.

Obama: Too much debt could fuel double-dip recession (Reuters):
"BEIJING, Nov 18 (Reuters) - President Barack Obama gave his sternest warning yet about the need to contain rising U.S. deficits, saying on Wednesday that if government debt were to pile up too much, it could lead to a double-dip recession."
Well, can we double-dip? Yes We Can!

Oh, the Unexpected (Newspeak dept.)

Housing Starts in U.S. Unexpectedly Plunge 11% (Update2) -
"Nov. 18 (Bloomberg) -- Builders in October unexpectedly broke ground on fewer U.S. houses as the sales outlook darkened with the looming expiration of a government tax credit and mounting joblessness."
Who could have known? The future not ours to see.

Tuesday, November 17, 2009


Every day, analysts compare this crisis to others. This is a cycle that presumably affects the economy. Analysts wax poetic comparing cycles to the seasons of the year, waves of the sea, what have you.

On one level, it's so true. On another, waxing poetic about repeating waves and the cosmic order is a poor excuse for addiction, especially after having been repeatedly faced with the dire consequences.
"It's a law of nature", mumbled the drunk, laying his head on a rock under the bridge. "What goes up, must come down".

Monday, November 16, 2009

Investing in US CDS: $2.5K buys $1 Million

America Is An Over Indebted Profligate Spoiled Nation In Decline: Tech Ticker, Yahoo! Finance:
"The U.S., at least, won't actually default, says Ortel, but as our situation worsens, the value of credit default swaps (insurance against default) should rise. So Ortel continues to recommend CDSs to his clients.

5-year credit default swaps on U.S. soverign debt currently trade for about 25 basis points (which means it costs $25K per $10M of notional value). How does that compare to other countries or states?

* Japan = 72 bps
* United Kingdom = 56 bps
* Germany = 21 bps
* California = 177 bps
* New York = 85 bps"

Ernie Harburg: Yes, The Wizard of Oz is About The Gold Standard

"What do you make of it?" asked my radical, sweetly gullible friend many years ago, emailing me "Smithy"'s wonderful "Wizards of Money" over a slow modem. As I turned my critical powers on the anonymous collection of recordings, I was bewildered. The preposterous ideas about money creation, spoken by an anonymous voice, sounded like a broadcast from the lunatic fringe. It didn't boost their credibility that early on, they advanced the claim that the Wizard of Oz book is really a modern fable on money creation and the gold standard. At the time, this seemed as plausible as stating that the House on Pooh Corner is a modern fable on the housing crisis. Even today, in unnerves me to find the good old MP3's are hosted in a folder inside a Chaos Astrology website.

But I do have a taste for preposterous ideas. Years later, I was grateful for pondering those presented in the Wizards of Money. They was helpful in preparing me me for the financial crisis that was still in the making. In 2009, when I realized that, I started wondering if that part about the Oz symbolism story had a grain of truth in it.

Wikipedia acknowledges that "Some scholars have theorized" about symbolism in the Wizard of Oz, but places that theory outside the consensus. But today the non-consensual theory is vindicated. In a day so fittingly marked by energetic gold movement, a KPFA special featured an interview with Ernie Harburg - son of Yip Harburg, the blacklisted Wizard of Oz's composer. Harburg tells this
"But it had this underlay of political symbolism to it that the farmer—the scarecrow was the farmer. He thought he was dumb, but he really wasn’t; he had a brain. And the tin woodman was the result—was the laborer in the factories. With one accident after another, he was totally reduced to a tin man with no heart, alright, on an assembly line. And the cowardly lion was William Jennings Bryan, who kept trying—was a big politician at that time, promising to make the world over with the gold standard, you know? And the wizard, who was a humbug type, was the Wall Street finances, and the wicked witch was probably the railroads, but I’m not sure. Alright?"

The End of a Six Thousand Year Elliott Wave Cycle : MarketClub Trader’s Blog

When thoughts previously relegated to the lunatic fringe (such as the end of civilization in hyperinflation and peak everything) move on to appear in MSM out of the mouths of respectable talking heads, I guess it makes room for new stuff.

MarketClub Trader’s Blog:
"Clearly the decline of the Roman Empire was a down turn economically, but it pales in comparison to one that occurred over 24 centuries earlier. That was the Global Flood. The earth’s population at that time could have been hundreds of millions, perhaps even over a billion, but was reduced to 8 people. From an Elliott Wave point of view, this constitutes the end of a super-millennial second wave. In essence, it was almost a double bottom from a population standpoint. But apparently, a major reason for the multi-decade exercise of building the ark was to force Noah and his family to learn about and preserve as much of the technology of that era as they possibly could. The long life spans for those sixteen hundred years prior to the flood had resulted in an explosion of technology. (Gen. 4:21-22) Therefore, after the Flood, as the Super-Millennial third wave began, technological advancement was able to build on previous knowledge, albeit not as rapidly as before, due to the shortening human lifespan."

Click through to see some cool graphs with The Flood on the left end, and Fibonacci leaps up to the present.