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The other night I saw the Fly
And Jeremy and Chuck Am I.
Chess and Wine and Gappy Too
(Might sound like three, but only two)
Woodshedder bedecked in denim
Scotty with lovely wife, God bless’im

Cain Thaler came on wheelchair made
of Bamboo- wire and cut jade
Ancient even past his years
He breathed blue smoke and shed dry tears
For Detroit his home benighted so
By corrupt gov’t and cold grey snow

Fly made toasts to kith and kin
Whilst Jemmy’s stomach near augured in.
Gapp and Chuck, wolfish rakes
Assessed the women (even Jake’s)
Yet stayed their hands and played the part
Of gentlemen, with Gentle Heart

RC of course, the Silent Giant
Hove to the table, his palette pliant
Without his better half’s restraint
Drew ample beverage, drew ample plate.

One party missing, and well missed
The liberal heart, whom Nature kissed
No Cronkite and no Greenman showed
To plead ‘gainst MONstah, and for “O.”

Alas!

Progenic duty stayed the bars
(And further frolics with cigars)
Sent “the Jakes” home by one AM
Whilst Friends of Fly (and Chess and Jem)
Went forth with blessings from us both
For IBC, for friends and “Growth.”

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Someone claimed I haven’t posted in two months! Calumny!
It’s been a mere one month. It’s only seemed like two in our accelerated world. Things have slowed, or blowed, or both, and I won’t bore you with details, but I should be able to post somewhat more often, at least in August.

Did I mention I had to cut my vacation short and come home three days early? Yeah, I know, boo hoo, at least I have a job, right? What right have I to complain when this is the lot I’ve chosen? Right. None.

Meanwhile, while I’ve been resting my keyboard, the silver markets have begun to show signs of life again. If you are not in EXK and AG, you’ve still got time, but probably not a tonne of it. Likewise SLW which had a nice move today. Dollars to donuts the lesser bodies like MVG and SSRI will also begin to rise alongside the champions. Like usual, the real moves will be made in the Fall for those stocks, but it certainly wouldn’t hurt you to start accumulating now. As usual, SIL is a great “combinator” if you don’t want to agonize over the usual suspects.

Gold stocks have become almost too annoying to mess with on the individual side, so outside of RGLD, and maybe AUY, I am not going to recommend you dabble in anything but the ETF’s like GDX and GDXJ.

Before you ask, yes, I still own the rare earths (QRM and AVL, especially), despite their declines. I just add more on whims. What the hell, they are popcorn cheap and I am quite certain they will Bela Lugosi when the dollar heads down one more time this coming Election Season.

What’s got me in “near term buy” mode however, are a couple of stocks I’ve owned for a while that are showing nice promise right now. One is nat gas former superstar ECA, which looks beautiful, especially on a pullback to the $21.00 range. Another is PSX, which I “inherited” when it spun off of COP, back in April (COP being one of the Samurai Seven along with fat dividend gold stock AEM, which has also risen from the grave as of late). And along with PSX, I will take some HFC, another refiner. I like them both at $38 if you are looking for a buy range.

I will endeavor to be more faithful to you my friends. The spirit is always willing, as you know… the flesh? Well…

Slainte.

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[youtube:http://www.youtube.com/watch?v=0fSEjlLQcRY 450 300]

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The dollar’s off 70 cents as I type this, down below $82 again to a low we haven’t seen since mine and the Fly’s birthday on the 25th of last month.  That “chuffing” sound you hear is Ben Bernanke’s magical reverse vacuum blowing hundred dollar bills at Spain by way of behind the scenes European central bank bailout transfers.  $125 billion you say? It’s a mere bag of shells when one can print up one’s own constantly deflating sovereign currency in a zirp atmosphere.  Isn’t this fun?  Why didn’t Japan think of this??

Anyone else getting the hard stuff while it’s cheap?  Take a look at my two “T’s” — TKC and recently murdered TC for a flyer.  Of course I still love BAA, but ANV is looking very tasty and has RGLD ever really disappointed you?  On the silver side, it’s broken record time again… AG, EXK and SLW remain the nobles.  PAAS for a flyer. For those with less time, GDXJ and SIL are the ETF plays for now.

I had one of the worst Friday’s in my career this past week, dealing with a very large dollar client issue that one would have to hear to believe.  One thing I can say about my industry, there’s hardly ever a dull moment.  You guys think trading stocks is a bitch?  Try something more illiquid next time…

Best to you all.

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What’s that sound, you say? Those of you with extremely sensitive hearing probably heard a dog whistle this morning, after the absolutely execrable unemployment numbers came out. Given that the increase in unemployment, the lack of job growth and the near-frozen economic capability of our scared scat-less private sector leaves the Powers that Be with very little in the Hope and Change department, the only remaining response is a toot on the dog whistle.

And who’s that St. Bernard that’s come-a-trotting with a big barrel of printer’s ink secured beneath his hairy jowls? Why that’s St. Ben-ard Bernake!   He knows that there’s no FacePlant Book rally coming to secure the 2012 elections and therefore his place on the Iron Throne of Westeros.  So the only other plan to help us out here is to pump the press and let the liquidity flow.  Heck, what are you going to do, anyway? Buy Euros??

No, but there’s always RGLD, GDX, GDXJ, SIL, SLW, EXK, AG, ANV, IAG, and of course, BAA.  Tons of other “beaten downs” as well that will make someone a lot of money, but as you know, my time here is limited.

Go out there and feast.  It’s Printing Day.

Best to you all.

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As some of you know, I’ve been weathering this storm by deploying cash sparingly into what I consider to me vastly oversold conditions in the PM markets, especially the miners.  Given historical metrics, the current $HUI and $XAU are pricing gold in the $800-1000 range.   Needless to say, this has historically been an opportunity for those beleagured names.

Now I know the PM space has not been a happy one as of late, but given that nothing has changed with respect to the global liquidity situation, I am not convinced that there is some change in the current bull trajectory afoot.   It appears that we are now approaching a long term support area as well.

As my good friend Gary Savage over at the Smart Money Tracker has been kind enough to point out, the 75-week simple moving average has been support for this bull for over ten years now with the brief exception of the 2008 meltdown, which marked the bottom of an eight year cycle event.   Right now that line lies at $1591 an ounce, which we are (briefly, I think) below this morning .  As a result, I think this is the time to mince into the market and make some quick coins.

I was not in the office yesterday, so I did not report my buys in SLW and AEM, and I apologize.  It appears, however, I may have been a bit early.   Today, I will add to those small purchases and throw some RGLD and perhaps even GDXJ in that mix.   Make no mistake the juniors have been murdered here, and quarts of my blood are being transfused into them as we speak.   When these things bounce, however, it’s going to be swift and eye-boggling.   Go small until then, but be ready, as I think it’s going to be very soon….

Until then, I continue to be your honarable blood donor, down here at the Red Cross…

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[youtube:http://www.youtube.com/watch?v=Vm5ovAtCc4g 450 300]

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It’s Oaks and Derby time in the Bluegrass, and the Jakester’s stocks are plungeroonying like so many suicidal swan divers off a Wall Street skyscraper.  My response? I shrug and hold, as I know we are approaching a cycle low in the commodity sector, and gold and silver prices are hanging hard even as the stocks in the Gold Bug Index (Baby $HUI) continue to squeeze my upper heart ventricles like 45 years of excessive bacon.  There’s a reason I feel that pressure and it’s because the gold and silver miners are woefully under-performing relative to their underlying commodities… at an almost historical level:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This chart has me hankering to add to my recent purchases, frankly.   But in the interest of capital preservation, I am going to space out buys over the next couple of days.  I am going to start with some AEM (I like the dividend), and then add to my SLW, EXK and yes, RGLD.   Three year bargains in ANV, IAG, IVN and many others.  Look around, shop carefully.  Watch the rebound back to that 200 day EMA above.  Interesting, no?

I am at the track with multiple clients tomorrow so I’ll have little time in between gambling like I know what I’m talking about and sipping juleps, but I will try to check in on you all with my fancy new phone, God willing.

Best to you all, and Happy Derby!

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[youtube:http://www.youtube.com/watch?v=dlvTGXyRRuQ&feature=related 450 300]

There’s Still Hope When There’s Still Talent and Beauty, California

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I read an excellent piece in the Wall Street Journal this weekend, about a New York-born, Cal-Berkely trained demographer, a self-described “Truman Democrat” now teaching at admittedly center-right Chapman University in Orange, California.  The piece, Exodus” href=”http://online.wsj.com/article/SB10001424052702304444604577340531861056966.html” target=”_blank”> Joel Kotkin: The Great California Exodus, has Mr. Kotkin bewailing the current state of California’s economic environment, and the effect it’s having on the middle class in that state.

I think it’s instructive, especially given the rhetoric we see being wheeled out about classical economic models of “capital investment + smart ideas = employment growth.”  The left parties in the U.S. are again using the hoary phraseology “trickle down” to describe this time-tested capitalist model, while somehow trying to advance central planning as the “hot, new equitable” thing.   But what have central planning, high taxes, and a large and intrusive government actually brought California?

Good schools?  Not anymore.

Green jobs? Not enough to make up the ones lost in traditional energy, not mention other economic sectors.

A robust public sector economy? Well, yeah, for now at least…. (except for the pensions)…

Tax equity?  Well, yes, if you mean that people making over $48,000 a year are paying almost the same in state taxes as Larry Ellison (9.3% and 10.3%, respectively)

Affordable Housing?  Well, sure.   As long as you are either  indigent, or one of the Jobs kids, given that “free” and “it doesn’t matter” are the only options available to housing shoppers in the region.

Ironically, it seems California — once the 5th largest economy in the world on a stand-alone basis–  has become our very own version of Europe.   Unfortunately, today’s California resembles more a higher tech version of Medieval Europe than it does the more modern variety.   You see, California is swiftly transforming into a place where only the extremely rich nobility, the Sheriff of Nottingham (& his henchmen)  and some very contented peasants can bear to live in anymore.  As Kotkin puts it in his piece:

A worker in Wichita might not consider those earning $250,000 a year middle class, but “if you’re a guy working for a Silicon Valley company and you’re married and you’re thinking about having your first kid, and your family makes 250-k a year, you can’t buy a closet in the Bay Area,” Mr. Kotkin says. “But for 250-k a year, you can live pretty damn well in Salt Lake City. And you might be able to send your kids to public schools and own a three-bedroom, four-bath house.”

According to Mr. Kotkin, these upwardly mobile families are fleeing in droves. As a result, California is turning into a two-and-a-half-class society. On top are the “entrenched incumbents” who inherited their wealth or came to California early and made their money. Then there’s a shrunken middle class of public employees and, miles below, a permanent welfare class. As it stands today, about 40% of Californians don’t pay any income tax and a quarter are on Medicaid.

What’s worse is that such a system, if unamended, devolves into a vicious cycle of Exodus, especially given that this “European State” doesn’t border on neighbors requiring a passport for entry.   The result is not so much a brain drain (California still commands its share of brains thanks to Silicon Valley and the defense industry) as a family drain, and a “middle class” drains:

Mr. Kotkin also notes that demographic changes are playing a role. As progressive policies drive out moderate and conservative members of the middle class, California’s politics become even more left-wing. It’s a classic case of natural selection, and increasingly the only ones fit to survive in California are the very rich and those who rely on government spending. In a nutshell, “the state is run for the very rich, the very poor, and the public employees.”

Again, I have to chuckle.  In one of our bluest states, not only is the left driving out “the middle class” that the President is so often claiming support for, but they are pushing them to traditionally more conservative states like Texas and Utah, who have now become low-tax hubs for the same cutting edge technology that made California the economic engine of the 20th century.

Circumstances such as these that afflict California and my own native New York do not occur over night, but are rather the result of a series of choices taken over many years of feasting on economic prosperity, once gladly and now grudgingly shared.   We must ask ourselves, are these once-great states merely the natural victims of their own success?  Is the U.S. doomed to fall into the same gray spiral we see now afflicting the increasingly infantalized — and seemingly helpless — states of Europe?

Serious questions which must be taken seriously and soon.  Are you game?

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I reached into my reserve stores today and bought 40% more SLW at$ 28.32, as reported in The PPT this afternoon.  I am prepared to buy more, as I think we may even see silver touch $30, or slightly below once more, like it did back in September/October of 2011.  Remember those painful times? That’s what has me salivating.

I am prepared to buy more.   My best to you.

 

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