This Week in Barrons – 9-23-2012
What time is it – on Obama’s Watch?
"We don't pay taxes, only little people pay taxes."
…Leona Helmsley
"It's a racket, those stock market guys are
crooked." …Al Capone
"I simply do not know where the money is." …Jon Corzine
This week the SEC ruled that Goldman Sachs would receive
no penalty for its role in the mortgage meltdown. It didn't matter that they were selling their
clients securities and then shorting those same securities because they were
"junk". It didn't matter that they
were appraising things fraudulently, or that they were involved with robo-signings.
On Obama’s
Watch, “When you're too big to fail, you're too big to jail.”
JP Morgan is currently shorting
over 135M ounces of silver. That's about
28% of the entire Silver market. Regulators
don't seem to think that this gives them an ability to influence the price of
silver! And with the top 4 silver
players in the market controlling one half of the entire market – regulators contend
that there is no collusion, ganging-up, or backdoor deals.
For as long as I can remember, it has been known that if
you're big and powerful, you fall under a different set of laws. Can JPM short half the world’s production of
silver, and no one see a problem with it? Can Maxine Waters call the Fed, and get $12M
out of them to support a bank that her husband just happens to run, and no one
finds an “ethics” problem with it" How is this happening on Obama’s Watch!
Remember the flash crash?
Well, it seems that if you PAY the NYSE – they will supply you with
market moving data AHEAD of what goes to the consolidated feeds that the rest
of the trading floor gets. It seems that
the investing public gets investing data in about 3.7 seconds. If you are a proprietary trading desk PAYING
the fees – you get the data in 2 Milliseconds – virtually a life time (and tens
of millions of trading shares) ahead of the investing public. This shows (without a doubt) market
manipulation and fraud. Yet NO ONE goes
to jail on Obama’s Watch.
Why do I buy gold?
When I started buying gold I was laughed at. People wrote me and told me that it was “dead
money”. Gold has no counter party
attachment, because there's no interest or derivatives against it. While the crooks (the JPM’s, the NYSE’s, and
the Obama Regulators) can:
-
manipulate the prices of stocks, and bonds,
-
co-mingle your funds with their trading
desks,
-
devalue the dollar,
-
artificially hold interest rates low,
they cannot do a single thing to the gold coin sitting on
my desk.
Every week we learn more of the rules:
-
Since we know oil isn't going up due to
demand, we can work with that.
-
Since we know the value of the dollar is
being systematically lowered, we can work with that.
-
Since we know that QE “To infinity and
beyond…” does nothing for the economy, and only bails out criminal banksters,
we can work with that.
-
And since we know that no one cares about the
rigging of the most important financial benchmark on the planet – LIBOR, we can
even work with that!
On Obama’s Watch why
do we use the U3
measure of unemployment, instead of U6 that we used during the Reagan years. The reason is simple: under U3 the
unemployment rate is 8.1%; however, under U6 (that we used for decades) the
rate is over 15% (and no President is getting re-elected with a 15%
unemployment rate!)
Last
week, on Obama’s Watch, more people
were admitted to the Social Security disability program – than got jobs.
The
stock market isn't up because the economy is better. The market is up because The Ben Bernanke has
decided to print more and more money out of thin air. That money goes to the banks, and the banks
use it to buy risk assets (stocks). This
will end badly – with an economic melt down, hyper-inflation, and massive unemployment.
As they say in the movie ‘Taken’: “Good
Luck!”
The Market:
We’re stuck in a rut and drifting lifelessly. Is that the way our market is supposed to
behave after the European and Federal Reserve announcements? Many people would say no; however, the market
is not here to make YOU rich, it’s here to make THEM rich. Everyone knew that the Fed's printing of $40B
a month would result in investors wanting to get back into the stock
market. So during the week the market
did what criminals do – invite investors in, and then (via sector rotations) take
their money away.
I have repeatedly stated that I fully expect this market
to drop by 50%, but when is the key.
Will The Ben Bernanke's open-ended buying spree be enough to put off or
delay the crash for another year or two? Logic says:
-
With the Baltic dry index scraping the 2008
lows (showing that companies are NOT shipping product),
-
With company after company warning that the
global recession is in full force and hurting earnings, and
-
With unemployment still absurdly high – this market
has run out of gas.
But (in the short run) fraud always trumps logic. The Ben Bernanke has told us that he's gone
"all in", and is starting with $40B a month, and that could turn into
$100B in a matter of months. All of the
rules, modesty, and fiscal sanity are gone.
By taking the Fed's balance sheet from $3T to $5T, the chances of a true
market crash are unlikely in the short run. Think of it like this: If
someone gave you ‘free money’, and you (and your friends) could manipulate a
stock to go from $50 to $300 a share – you’d be a fool not to invest in that
stock – yes? And since the economy won't
get better, and unemployment won't fall, The Ben Bernanke has little choice but
to continue pumping in billions. This
all ends with a situation where inflation causes it all to implode upon itself. In the meantime, we’re all going to be living
thru a period of worsening economic activity, all the while accumulating risk
assets (stocks). With that in mind, the thought
of a short-term market slide of 30% or more just doesn't seem likely.
Since the old highs are so formidable, it's going to take
a bit of base building here before we can muster the attack on them. But my guess is that this market will be
higher into year-end than lower.
Tips:
I stopped out of NTAP last week for a $1 gain.
Currently I’m holding:
-
GDX – in at 42.50 (currently 54.82) – stop at
52.80
-
SPY – in at 142.54 (currently 145.99) – stop
at 144.50
-
SBUX in at 48.88 (currently 51.10) – stop at
50.60
-
LOW – in at 28.02 (currently 30.25) – stop at
entry
-
MRO – in at 28.13 (currently 30.73) – stop at
28.80
-
NTAP – in at 35.13 (currently 35.81) – stop
at entry
-
IBM – in at 198.34 (currently 205.99) – stop
at 203.00
-
MNST – in at 53.80 (currently 54.23) – stop
at 54.20
-
BRCM – in at 36.80 (currently 36.42) – stop
at 36.30
-
GLD (ETF for Gold) – in at 158.28, (currently
171.94) – no stop ($1,775.60 per physical ounce), AND
- SLV (ETF for Silver) – in at 28.3 (currently 33.45)
– no stop ($34.57 per physical ounce).
To follow me on Twitter and get my daily thoughts and trades
– my handle is: taylorpamm.
Please be safe out there!
Disclaimer:
Expressed thoughts proffered within the
BARRONS REPORT, a Private and free weekly economic newsletter, are those of
noted entrepreneur, professor and author, RF Culbertson, contributing sources
and those he interviews. You can learn
more and get your free subscription by visiting: <http://rfcfinancialnews.blogspot.com>
.
Please write to <rfc@getabby.com>
to inform me of any reproductions, including when and where copy will be
reproduced. You may use in complete form or, if quoting in brief, reference
.
If you'd like to view RF's actual stock
trades - and see more of my thoughts - please feel free to sign up as a Twitter
follower - "taylorpamm" is my
handle.
If you'd like to see RF in action -
teaching people about investing - please feel free to view the TED talk that he
gave on Fearless Investing: http://www.youtube.com/watch?v=K2Z9I_6ciH0
To unsubscribe please refer to the
bottom of the email.
Views expressed are provided for
information purposes only and should not be construed in any way as an offer,
an endorsement, or inducement to invest and is not in any way a testimony of,
or associated with Mr. Culbertson's other firms or associations. Mr. Culbertson and related parties are not
registered and licensed brokers. This
message may contain information that is confidential or privileged and is
intended only for the individual or entity named above and does not constitute
an offer for or advice about any alternative investment product. Such advice
can only be made when accompanied by a prospectus or similar offering
document. Past performance is not indicative
of future performance. Please make sure to review important disclosures at the
end of each article.
Note: Joining BARRONS REPORT is not an
offering for any investment. It represents only the opinions of RF Culbertson
and Associates.
PAST RESULTS ARE NOT INDICATIVE OF
FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN
INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING
HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT
SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF
INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS
MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING
INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.
Alternative investment performance can
be volatile. An investor could lose all or a substantial amount of his or her
investment. Often, alternative investment fund and account managers have total
trading authority over their funds or accounts; the use of a single advisor
applying generally similar trading programs could mean lack of diversification
and, consequently, higher risk. There is often no secondary market for an
investor's interest in alternative investments, and none is expected to develop.
All material presented herein is
believed to be reliable but we cannot attest to its accuracy. Opinions
expressed in these reports may change without prior notice. Culbertson and/or
the staff may or may not have investments in any funds cited above.
Remember the Blog: <http://rfcfinancialnews.blogspot.com/>
Until next week – be safe.
R.F. Culbertson
No comments:
Post a Comment