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Listen, I’m willing to give just about anybody the benefit of the doubt.  There are tonnes (sic) of confused posters on this site, as evidenced by the  jumbled and disjointed list of demands, points of order and general temper tantrums archived on Monsieur Le Fly’s two “discussion posts” this weekend.   Some of them offer contradictory recommendations, seeming to hate the government-banking cabal that’s all but run this country since the turn of the 20th century, but then recommending an even stronger government regime to take it’s place.

Folks, this is replacing the loan shark with the prison warden.  I agree that we need to break the cycle of supported failure that crescendoed upon us in late 2008, but 2000 page bills from “friendly” members of Congress do nothing but cement that cycle.  The first thing you need to do is force the banks to stand on their own.    If that means forcing a complete separation from the Fed– which was the original intent — then so be it.  If the Fed wants to “rescue” one of its lender institutions, let it do so without our tax dollar.

I am convinced, as you know, that we did nothing but “kick the can down the road” in 2008, and that TARP and all of these other remedies are doing nothing but setting us up for another voluminous group of failures.   This is because we let the same cronies that supported the massively corrupt Fannie Mae and Freddie Mac write the “reform” bills that instituted a system where mega-banks, those egregious leviathans, can be bailed out, ad infinitum, by you and I, rather than allowed to fail or break up as normal businesses that fail must do.

There were many silly (and frankly, Marxist) definitions of capitalism promulgated on these board this weekend, but the worst were those that associated capitalism with this recent spate of bailouts.  If capitalism is about anything, it’s about the creative destruction of old forms in order to allow innovation to drive progress forward.

This betrayal of true capitalism  is why the recent bailouts of dinosaurs like AIG and GM and Chrysler were so pernicious.   The breakup of GM would have freed billions of dollars in contract-bound assets and quite possibly sparked a whole new revolution in disaggregated auto manufacturing.  Allowing AIG to dispense its well-deserved CDS losses to Goldman Sachs may have hurt Uncle Warren a bit in his pinchy pockets, but think of the logjam in the wealth managment business such action would have broken up.

Think about it — AB Bernstein is probably one of the most respected names in money managment.  They are also the chief competitor in private banking to Goldman Sachs, in terms of research and institutional managment.   Why should they be penalized because they did the right thing?

It’s the wrong thing that it worked out that way, and one need not be a hippy despoiling a small park to realize that.

My argument with (many of) the hippies is that asking for more government to “regulate” such nonsense is just asking for more trouble.    Believe the fact that the large banks own Congress right now, and there single aim is to be dominant to the point where smaller banks are irrelevant annoyances.  Believe also that this aligns with Congress’s aims as well.  Why have to stretch your hand out to thousands of contributors when you can keep it to a neat and tidy ten or so?

Think about it.  The only way to break the cycle is to take the power to “Stick-Save” out of Congress’s hands.  Allow businesses to fail and you will create a stronger business arena from which to compete.  That’s real capitalism, and that’s what’s best for everyone — to whatever percentage they  might subscribe.

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I’m thinking the hippies may be buying gold here, however because I’m seeing some interesting formations in the weekly charts.   Take a look at our friend the double gold bull ETF,  DGP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note how our price maintained support at those two key support lines over the last three weeks?  That’s a good sign.   The amount of room left in the stochastics also tells me that this run is not over.   What’s more, our stop loss line is pretty clearly demarcated here.

You can see the same action in a more exacting stand alone stock, the famous ANVil of ANV.  As capricious as this stock is known to be, it also seems to be adhering to the same rule of law that DGP has been.

My best to you all in these harrowing times.

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[youtube:http://www.youtube.com/watch?v=rVAD8Zl5ngg 450 300]

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Looking over my charts this evening (no shoulder devils or broken elevators), it seems that while the price of gold is doing the Heschel Walker down the field, the metal’s miners are lagging behind like a fat man with smoker’s hack.  This gives me some pause and has me with my finger on the trigger.   Despite minor wins today in AUQ, AUY and ANV, most miners that didn’t start with “A” were having trouble addressing the field.   Moreover, silver struggled at the $40 line and gave it up by the end of the day.  As a result, despite gold being up nicely, I was still down in my miner-saturated portfolio almost 2% overall today.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I’ve seen this play before (gold up, silver and PM miners lagging) and I don’t intend to stick around to see what comes of it again.  I will likely sell some portions of my miners tomorrow morning and then hedge the rest with sold calls.  I  will also launch the remainder of my  NUGT and DGP (what remains of them) even as I’ll  likely hold on to my GLD and SLV positions for the duration,

I will then likely  spin some of the newly raised cash into a few rebound stock positions to take advantage of a bounce I feel certain shall finally come tomorrow as we test the depths of 1090 and perhaps lower.  I am again looking at QLD, TNA, EEM and possibly, quite possibly EDC again (very small ball!).

Be well and be wary, my friends.

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I already gave you this idea a few weeks back, but I wanted to bring my favorite Japanese gold play (not really), Yamana Gold (AUY), back to your attention.  As I mentioned in my last feature, this is one of the longest saucer-consolidation patterns I’ve seen forming in the gold sector since the March 2009 Recovery, and I think we are finally done consolidating and getting ready to launch with vigour (sic). Look at the weekly one more time:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note that the real breakout is probably going to be somewhere above $14, and you might want to wait til you see that number.  I already own some, however, and may add on strength tomorrow.   As I would with any long term consolidation in a bull, I expect AUY to launch quite nicely once it breaks out of it’s saucer pattern here.

Today I cut back on some over-weighted positions, as announced in The PPT.  That includes AAU, RGLD, DGP, some more NUGT and even silver star AG. I still have tonnes left in each of those names, btw.

Today I took advantage of Crazy Eddie “low, low, low” prices to nab some more UPS and TCK as well.  UPS is perhaps one of the most solid companies in the world.  It was on sale today so I added.    I also opened a new position in Borg Warner (BWA) which I have been stalking from much higher numbers.  I really like the auto supplier space.  There’s tonnes of activity going on in the Private Equity market there as well.

Best to you all.  I will be on the road again tomorrow but checking in.

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For the Bubble that took down the Economy?

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I stayed in Silver and her miners  today because all of my charts are telling me we are still in the early stages of a liftoff in those miners.  The golds on the other hand are a tad more stretched.

As per my announcements in The PPT, I took some profits in DGP, NUGT, IAG and XG today as a result.  I still have plenty more, but wanted to build some cash for opportunities.

Best to you all.

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(Some of You May Recognize where I was this Weekend…)
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All is well at last, the Kabuki Theater entertainment has ended and we can all expect bright sunshine and free cherry-bomb popsicles for the remainder of the summer!

Or not?

It’s hard for me to see this as anything but a temporary positive, as it looks to be another boot of the increasingly cumbersome can “down the road,” once again.    Some of you may have noted that the plan calls for some $2.2 trillion in spending cuts over the next decade.  That may sound like a lot, but one must look at the way Washington politicians (and their scoring body, the Congressional Budget Office [“CBO”] ) define “cuts” before we can analyze that number.   Unlike you and me, who “cut” our own budgets by reducing spending, Washington defines a “reduction in the planned growth of spending” as a “cut.”  What does that mean in practical terms?

Let me give you an example to illustrate:

Some of you may recall my comment the other day on Fly’s blog that if Washington decided today to merely freeze current spending at 2011 budget levels over the next ten years, that would be defined by the CBO as a $9.9 Trillion “cut” in spending over that period.  Why?  Because the CBO looks at current Congressional spending plans like a layman might a five or ten year lease rate– they build regular increases into spending over the specified period.   In other words, the thought that a budget might NOT increase is almost unheard of in Washington.

In fact, it’s so unheard of, that the very “cuts” they are bandying about today are merely decreases in spending growth, not real “cuts” at all.  And since we can’t even afford spending at current levels, this means the “deal” brokered today over much jawboning and posturing doesn’t mean “jack all” with regard to actual deficit reduction, and it means absolutely squatola with regard to the overall burgeoning debt position of the United States Government.

Today, Congress is patting itself on the back for putting a finger in the dike like the famous Dutch boy of legend, but they are ignoring the gaping chasm appearing in the seawall 50 meters to the right.

Combine these last weeks’ complete waste of time in addressing the ongoing debt problems with the continuing reality of the Obama Recession, neatly laid out by the U.S. Commerce Department’s Bureau of Economic Analysis (“BEA”) just last Friday in a report stating that last quarter’s anemic annualized GDP growth rates of 1.92% had to be revised to an even more atrocious 0.36% annualized rate, and I’d say that we are deep in the crapper here, folks.

Leave the ongoing unemployment woes aside, the fact is that we were able to escape the consequences of our debt profligacy in the past by growing our way out of the problem.   As the above paragraph states, that ain’t happening here.  What’s more, if the Obama Administration continues with it’s plans to foist  Obamacare on lower value-added employee bases (read: “unskilled work forces”) and also continues with it’s heavy handed regulatory and “green” initiatives, unemployment is going to get worse before it gets better.

With these set of parameters, what choice, really, does Bernanke have, but to whip the printing presses into a frenzy to stave off Depression Era deflation?  And for how much longer does that strategy work in conjunction with our hemorrhaging debt problem?

When does the child (likely a Chinese child) finally cry out: “Look! The Emperor is not wearing any clothes?”

Let’s see what happens tomorrow, but I continue to like TBT, unless some madness grips the bond markets.  Gold and silver may take a hit here, on the “all is well” euphoria, and maybe even in the double whammy when everything starts selling off later tomorrow or this week.  I actually bot some NUGT and DGP on Friday, thinking the veil will be dropped a little bit on the Emperor when this deal gets done.   If I’m wrong, I’ll dump that extra, post-haste.

Oh, and I’m keeping GSVC, because the Fly is never wrong over the long term.

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Gettin’ Back To Lawn Guyland Form, Ovah Heah

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This is going to be quick because I’m not sure how long this modem is going to hold out.

My apologies, but in my past forays to “Summer Noo Yawk” I’ve never had any trouble getting on line via the wireless.  This time around, however, we are having “modem troubles” (the wireless network is fine, it’s the ‘net access which keeps blinking off).  Yesterday, I was able to make one brief comment about Le Monsieur’s cawfee troubles and then I was unable to get back on the rest of the day.

I am going to cross my fingers and hope that this transmission gets through.

With regard to today’s title, my point is, I often seem to do better in my portfolio when I am away from my home.  I can’t explain it, and perhaps it’s all just coincidental, but it seems like whenever I’m out and about, I have special market guardian angels stamping down the price of the dollar, or boosting the price of the precious metal markets for one reason or another.  I continue to believe that this Kabuki Theater debt ceiling deal means nothing at the moment, because the world’s bond traders see it for the political sham it is.

They also see Ben Bernanke running the printing presses like mad, which is why the dollar keeps dropping like Emma Stone.  I have little doubt that we’ll see a drop to the old “Sub $73 lows” on the dollar index and quite possible will see new lows before the false debt ceiling dance is concluded. I hope you held onto your DGP and your other mining assets, particularly RGLD, SLW and ANV.

For those who are confused about this political dance — I remind you, the debt ceiling itself does not matter, it’s the resolution of the debt debate that matters.  Bond traders may not care about an artificial ceiling argument, but they do care about the U.S. attending to an out of control debt situation.   The 30-year bubble in Treasuries could come to an eventful end here if the world decides our sovereign credit is no longer creditable.   You might want to look into TBT as an alternate in that case.

Best to you.

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