Monthly Archives: July 2014
Steve Forbes, Mohamed El-Erian, Ken Griffin, and Marc Lasry discuss and debate financial industry regulation and the economic recovery in this from Bloomberg.com.
It’s not everyday that we get to see such heavy hitters of finance sharing one stage to debate the issues of the day, so this clip is a great source of insight into their thinking on these topics.
Everything from systemic risk to government involvement in our economy and lives is up for discussion here. You’ll also hear some great points (and a little debate) from Griffin and Forbes on the problems we face, economically and socially, from the expansion of government’s role in the economy.
Enjoy the video, and I hope you find the discussion worthwhile.
Financial Sense Newshour recently , investor and author of a new book entitled, .
I’d recently heard about Boeckh’s new book through Richard Russell, who commented on it in his recent Dow Theory Letters updates. It seems to have drawn quite a few noted admirers, judging by the warm testimonials from Henry Kaufman, Marc Faber, and Barton Biggs (among others).
FSN host Jim Puplava was quite impressed with The Great Reflation as well, but we’ll let you hear the details of Boeckh’s thesis for yourself. Check out the interview, and pay close attention to Boeckh’s opening statements on the nature of inflation and debt cycles, and how money and credit creation can affect investment decisions and asset prices. Enjoy.
Even though I’m able to read Richard Russell’s at the town library (they are subscribers), it’s nice to find snippets from his daily remarks up on . It’s convenient, and I can easily share samples of his excellent writing with others.
Here’s one that I’d like to share with you, a recent update from Russell on gold and the state of America’s finances called,.
“A final thought. One could stay in US dollars and gold. If the dollar goes to hell, rising gold could make up for the loss in purchasing power.
A hundred years ago gold and silver were the only items accepted as money. Paper money was carried around because it was convenient as opposed to gold and silver, which are heavy. Besides, if you had any doubt about your paper, you could turn it in at any national bank for gold, “the dollar was as good as gold.” Furthermore, the dollar was backed by one of the strongest and most prosperous nations on earth.
Today the dollar is backed only by “the full faith and credit of the United States,” the greatest debtor the world has ever seen. Questions are now arising about the credit-worthiness of sovereign debt. Many analysts believe that the US will never, ever, be able to pay off its debt, which is now not only rising but is compounding.
It’s obvious that the Obama administration is putting off the solution of our debt and deficit problems to other future administrations. This is always a dangerous procedure.
It’s the reason why our children and grandchildren will not inherit the fun and easy life that we live. I’ve talked about sacrifice before — our children will be making some of the sacrifices that my own generation made (and I hope one of the sacrifices won’t be war)… “
Read on to understand why “Americans have forgotten the meaning of gold and silver”, and check out more of Russell’s remarks at the and at his website (linked above).
You’ll see why he’s one of the most fascinating writers around (on almost any subject), and you will definitely get some perspective from a guy who’s been around and seen more than most.
“The worst thing you can do when you’re having a hard time is flail. In trading, when there is nothing to do, the best thing to do is nothing.” – Scott Bessent (Bessent Capital).
Well, the damage is already done for those who were heavily long heading into this week’s market decline.
I look at the S&P 500 component data on and see that only 3 stocks in that index were up today. We saw a -4.78% decline in the S&P to go along with that. Here’s an updated chart that shows the recent breakdown below the 1312 line we’ve fluctuated around in recent months.
There’s been a lot of whipsaw in this news driven market of late, and it doesn’t seem like the recent deficit/debt ceiling deal reached by Congress has quieted things much. Even gold and silver got whacked today. But just look at all that money piling into Treasury bonds.
At a time like this, perhaps it’s best to step aside and watch the action from the sidelines. That may not be the proper stance for a short-term trader making hay from all this volatility, or a professional money manager tasked with managing positions on the long and short side, but for now it suits me fine.
In July, I closed out a couple of losing stock trades and haven’t put on any new trades since. I’ve mostly been pruning watchlists, reviewing my trading journals and trading mistakes, running through charts, and reading. A break from trading was needed, and this was the time to do it.
Today, while reading Steven Drobny’s , I came across our intro quote in an interview with “stock operator” and hedge fund manager, Scott Bessent. On a day like today, you can really appreciate the time honored truths that: 1) being in cash is a position, and, 2) activity (trading) for the sake of activity can be a real hazard to your trading account and your emotional capital.
By the way, the interview with Bessent is a great chapter from Drobny’s book. Here is a guy who, amazingly, has worked for or trained under George Soros, Stan Druckenmiller, Nick Roditi, Jim Rogers, and Jim Chanos. It’s quite something to not only read Bessent’s thoughts on trading, but to hear what he’s learned from some true all-stars of the hedge fund world. Check out this book if you’re taking a late-summer break and keeping your powder dry as well.
Barron’s recently ran an interview with hedge fund managers Kevin Duffy & Bill Laggner of Bearing Asset Management called, . Here’s a lead-in to their discussion:
“PERHAPS ONE OF THE greatest failings in the run-up to the financial meltdown was a lack of perspective — an inability by many market participants to see the big picture. Not so with Kevin Duffy and Bill Laggner, principals of the Dallas-based hedge fund Bearing Asset Management.
With the help of their proprietary credit-bubble index, developed in 2004, the managers sounded early warnings on housing and credit excesses, and capitalized handsomely on their forecasts by shorting Fannie Mae, Freddie Mac, money-center banks and brokers, builders, mortgage insurers and the like.
Students of the Austrian school of economics, which espouses a free-market philosophy that ascribes business-cycle booms and busts to government meddling with interest rates, the pair is solidly in the contrarian camp, believing that the worst for the markets may be yet to come.”
, , & for drawing attention to this article on their blogs.
If you find
insightful, or if you’d like to gauge the accuracy of some of their earlier calls, you may also want to take a look at some of the resources provided in our related articles section below. Enjoy the interviews.
Related articles and posts:
– John Rubino at Safehaven.
Get set for Friday links in our, “Features of the Week”.
1. : only a crisis can solve US debt problem – WSJ.
2. What as a Rolling Stone tells us about economics – Forbes.
3. An example of – Points and Figures.
4. The – Abnormal Returns.
5. Was it a ? – Crosshairs Trader.
: Amazon is “willing to be misunderstood for long periods of time.” – Geekwire.
7. Another story on – BBC.
8. Ron Paul: than from drugs – Liberty Underground.
9. 2010 : drawing down the inventories – Gregor Macdonald.
10. Why – Financial Philosopher.
11. Learn to – Kirk Report.
That’s all for this week. Enjoy your weekend and keep us on and radars for more to come.
Well I’m a bit skeptical that any modern news outlet will accurately pinpoint , but let’s give the Financial Times points for trying in this latest piece (hat tip: ):
“The Baird & Co warehouse sits in a dreary business park, half a mile east of London’s City airport. A black Mercedes and a blue Jaguar near the entrance are the sole touch of glamour. Step inside, and men in overalls are fashioning medallions, bars and rings from molten gold, purified in vats next door.
From an office upstairs, Tony Baird, the company’s managing director, and a former coin dealer, presides over the hubbub. “Gold is stable,” he says. “It’s the value of money that goes up and down.” Baird & Co sells gold to everyone from pension funds to jewellers, and as the MD says: “Our machines can’t work fast enough these days…”
Gold is still hot with investors, especially with leading hedge funds who have entered the trade in recent years, and with more conservative and libertarian-minded individual investors who seek a refuge from the uncertainties of our current government and the eroding paper money system.
As the FT notes in this piece, the leading mints and gold refineries are struggling to keep up with booming demand worldwide. And it’s no mystery why, when you acknowledge the fact that many sovereign nations face grave financial problems and deficits that may lead to further “debt monetization”, aka inflation via the running of electronic printing presses.
Ron Paul speaks to the problems of fiat money systems in the FT’s article.
“…In his book Gold, Peace and Prosperity, Paul decries the end of the gold standard – the practice of backing currencies with a fixed weighting in the metal, which took many forms through history. President Nixon brought an end to the gold standard in 1971, as part of his attempt to overcome the strain of funding the Vietnam war and the US’s mounting trade deficit. Paul thinks the system of fiat money facilitates “governments’ attempts to inflate, control the economy, run up deficits and fight senseless wars”. He worries, too, that both the supply of paper money and government debt levels are spiralling out of control.
“My beef is with the paper money,” he says. “All the problems we’re having today were destined to happen. Gold plays an important role in the monetary system because it restrains government spending.” Without it, Paul argues, central banks have the power to print money without pausing to consider the consequences, and more impetus to spend it.”
Check out the full piece for more on gold from private banker Adam Fleming and Jim Rickards, who is quoted on the issues of GATA, gold short positions by the bullion banks, and rumored gold sales from LTCM in 1998.
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As Aiki14 (Jim Gobetz) noted on Twitter today, we saw a in the during one part of the day. If that’s not enough to get your attention, I don’t know what will.
Here’sfrom Bear Mountain Bull with the closing figures and some thoughts on rumors of HFT madness and a “fat-finger” futures trade on Citigroup’s trading desk, which supposedly contributed to (or drove) this US market decline.
Saving money can be one of the most important skills a person can have, but unfortunately, it is also one of the last skill that must be learned. Prom can be a huge burden for many people, but it need not break the bank. By using careful planning and a little creativity, prom night can cost very little and no one will know. It is actually possible to look like a million dollars without much expense. It is likely that friends and family will appreciate the lower budget and happily join tips to save money and plan for the big night.
The first step in the process of saving money for the prom involves a realistic expectation of costs. Sit down and make a list of what you really need, like dress, it would be nice to have, as a professional manicure, and what a waste of money, such as renting a sports car. After deciding what is important to the prom, start figuring out how much it will cost to a new dress. Then see whether something similar can be found in stores prices, either near or online. It is also possible to borrow a dress.