February Summary

Mon, 2009/03/02 - 2:38pm | Your editor

     I quote Ernie Monrad, the former head of the John Harvard Society and the chairman emeritus of Northeast Investors Trust. Mr. Monrad, a financial elder statesman, grew up during the Great Depression. So how does today compare with then?

 

     “Other than the fact of an economic slowdown, the comparison is not valid,” he insists. The current (unofficial) “unemployment is probably 8 or 9 percent”. “Bear in mind that in 1933, 25 percent of the workforce was unemployed.”

  Read more »

My Last Gold Note

Thu, 2009/02/26 - 3:06pm | Your editor

     As promised, here is more about gold from Ron Coby, author of Discover the Upside of Down: Investment Strategies for Volatile Times (Wiley 2008). He thinks the time has come for buying junior gold stocks because “the big gold companies have raised a lot of money and can buy them.” He cited the IAM Gold bid for OZN assets and added “there will be a lot of Orezones”. Read more »

On golden pond

Wed, 2009/02/25 - 2:19pm | Your editor

      Barraged with e-mail after my publishing the letter from a reader in Europe about perceived risks with SPDR Streettrackers Gold, GLD, yesterday. In fact, having made a stab at $1000/oz, gold again fell back.

 

      The stock market, with its attention-deficit disorder, likes to focus on one thing at a time, and yesterday it was banking stocks. I happen to believe that without banks getting back on track, there will be no recovery. Gold is ultimately a sterile investment which doesn't add much to the economic outlook.

  Read more »

Golden fears part I

Tue, 2009/02/24 - 3:56pm | Your editor

I received the following message from SH, a British reader based in Europe. (You can tell because he misspelled my name.) I am publishing it because it is of general interest. It is a worry about SPDR Streetrackers Gold or NYSE-GLD.

  Read more »

Golden fears part II

Tue, 2009/02/24 - 3:41pm | Your editor

Vivian replied to our British reader in a Mediterranean country:

     State Street Bank (STT) of Boston holds the physical gold in trust at HSBC Bank in London for the SPDR Gold ETF, GLD. London is also where other gold ETFs hold their physical gold. STT via GLD now owns as much physical gold as all but the 5 largest central banks. 

  Read more »

Gypsy technology

Mon, 2009/02/23 - 4:32pm | Your editor

 

      I’m wearing my red fright wig and a draped scarf over it as I peer into the dregs of Chinese tea in my cup. I am trying to forecast the Dow Jones Industrial Average with gypsy technology.

 

     Is that squiggly bit of tea debris a 6 or a 9? Are there four bits of tea in the cup or five? I am not a good enough gypsy to tell.

 

     That is the summary of my attempt, at reader suggestion, to predict where the Dow Jones will be in 6 months or a year. The simple answer: I don’t know. Anyone who says they can forecast when to get back into the stock market is probably off on some Caribbean Island benefitting from your credulity.

  Read more »

Scots in Edinburgh and London

Fri, 2009/02/20 - 6:40pm | Your editor

     It is 200 years since the birth of Robert Burns, the great Scottish poet, and today’s blog is about Scots. Specifically, it is about Royal Bank of Scotland, now a nationalized bank in Britain, Alisdair Darling, the Chancellor of the Exchequeur (British Treasury), and Gordon Brown, the Prime Minister. Scots in Edinburgh and Scots in London.

 

     Starting two decades ago, British banks began using the U.S. to enhance their capital ratios. Under rules set by the Bank for International Settlements, the issuance of non-cumulative preferred stock could raise banks’ capital against which they did business. Non-cumulative means that if a payment is missed it will not be made up for.

 

     Aimed at retail investors, the new preferred shares came out at $25 so people could buy in round lots with modest amounts of money.

  Read more »

Investing Now

Thu, 2009/02/19 - 4:40pm | Your editor

     We had a water outage in my building (where both my office and my home are located) so today’s blog is late.

     The price of gold is testing quadruple digits and the peak reached a year ago. There is a lot of cheering among the gold bug brigade and every time it fails to pop over the border you can hear murmurs about conspiracies by central banks. Read more »

Shi and Mitsubishi

Wed, 2009/02/18 - 7:05pm | Your editor

     Many readers received this morning from our former publisher Rightside Advisors Inc. a promotion for a newsletter by Mr. Scott Fraser called the Natural Contrarian Press. Mr. Fraser is the subject of a “cease and desist” order by the U.S. Securities and Exchange Commission. Mr. Fraser’s advertisements and magalogs not only are unrealistic and unfounded but they are banned by the SEC because of previous misleading material he sent out.

  Read more »

Day of Reckoning

Tue, 2009/02/17 - 6:02pm | Your editor

      There was no joy in mudville as we went back to work after a 3-day weekend. Results from reporting companies was pretty grim. And the market is testing its Nov. 2008 lows.

 

     *Regional trade finance bank Banco Latinoamericano de Exportaciones SA (BLX) does not expect the U.S. economic stimulus to help its Latin American business. "In general, 50% of the trade of Latin America is directly related to the U.S.," Bladex CEO Jaime Rivera to a conference call with analysts. He added: "Demand in the U.S. is down and is still falling. Most companies believe that process will continue." 

  Read more »