tooskinneejs

The Company's press release reads like the company has been cleared. The actual interim IC Advisor's report contradicts this conclusion in many respects. Maybe the company is hpping that most people won't read the IC Advisor's detailed report.

Let me get this straight. Restricting banks use of leverage to buy the riskiest and, ultimately, money losing investments will hurt their returns?

"That elephant is piled high with the credible claims of everyone who held their stock during the crisis." Are you suggesting that equity holders should bear no downside risk to their investments?

First it was "Dow 36,000", now it's "Gold, 10,000." http://www.cnbc.com/id/44891595 "if under this worst case scenario the solution was to return to the gold standard of the Nixon years, the price of bullion would be worth $10,000-plus, six-times the current price, according to Paul Brodsky, co-managing member of QB Asset Management company"

"Bottom-line: we need to incentivize saving and investments. The best way to do this is to eliminate taxes on savings and capital gains." 1. Some might argue that the Federal tax code's purpose isn't to incent behavior but to collect revenues. 2. Maybe people would save if they could earn more than 0.5% interest in a year.

Here is an article about Warren sharing his tax info for 2010 with Republican Rep. Tim Huelskamp... http://money.cnn.com/2011/10/12/news/economy/buffett_taxes_2010/index.htm?hpt=hp_t2 AGI $62,855,038 Taxable income $39,814,784 Tax $6,923,494

"Its tough to say that about something that has an intrinsic value only equal to what someone else is willing to pay." Which means it really only has extrinsic value.

Here is an article on Berk's Bank of America investment titled, "No, You Can't Invest Like Warren Buffett." http://www.slate.com/id/2302540?wpisrc=xs_wp_0001 Buffett is creating value for his fellow shareholders literally out of thin air by using a significant intangible asset that isn't recognized under GAAP on Berk's balance sheet - his and Berk's reputation.

Moore_capital54, At noon you said: "One More thing, I never once said I believe in investing in gold." A few posts later you then said: "I am buying Canadian juniors hand over fist at $10-30 per ounce in the ground." How do these square? Finally, how much is an ounce of gold worth today and how did you compute that value?

"It is a matter of fact that demand for gold is up substantially...Where do you get this "it's different this time" notion." I don't disagree that "demand" is up in the literal sense. If it wasn't, we wouldn't be seeing the hyperbolic chart that titles this thread. The question everyone should be asking themselves is whether the demand is real or artificial. People said the same thing ("demand is up" and "it's different this time") about the housing market in the first 2/3rds of the 2000's. Then, when the articifically high demand (from speculators) evaporated, they realized it wasn't really "different" that time like they thought. And people vowed never to repeat the mistake of getting caught up in another asset bubble. But as observers of history and human nature know, we humans have a bad habit of quickly forgetting lessons we should long remember. And now, just a few years later, speculation is running rampant in the gold market and talking heads on TV are predicting continued rapid price appreciation. Many otherwise very intelligent people are convincing themselves* that fundamentals underlie the price movement and that this time it really is different (*A big flaw in the way the human mind works is that we like to make sense of things and when things just don't make sense, we often still rationalize reasons to make them make sense). I'm not predicting where we are in the bubble or how far or for how long prices will continue to rise. Heck, prices may go to $3k or $5k. Manias tend to last longer than rational people expect because rational people don't have irrational expectations. But it will end at some point and cause pain for lots of people. Then those people will vow to themselves to never repeat their mistake again...

China-Biotic's auditors resigned in June and explained why in the letter linked below. While not directly related to Sino-Forest, the letter provides some interesting insights into some of the fraudulent activity occuring in some of the Chinese companies. Page 3 lists a few examples of how the auditor believes the company was faking it's cash balances (going so far as to set up a fake bank website) and customer sales. http://www.sec.gov/Archives/edgar/data/1271057/000114420411037217/v226804_ex16-1.htm

"Gold...is experiencing a fundamental shift in demand" I think what I hear you saying is, "it's different this time."

"Can they be divided to engage in commerce? (I guess with a saw?)" Sure, they can be cut into pieces or pulverized into dust and then divided into whatever portions you want based on weight - just like gold! "Can Dinosaur bones be connected to increase ones holdings?" Sure, take the pieces or dust and pile them up or mix them together, then trade based on weight - just like gold! Not that being able to "connect" two things together makes much sense as a basis for defining a proper medium of exchange. "How many dinosaur bones would it take to warrant a unit of trade?" Any arbitrary weight of dinosaur bones you want can warrant a unit of trade - just like gold! "And how would we ascribe value to say the skull of a T-Rex vs. a spine of a stegosaurus?" You wouldn't need to ascribe different values to different species, just as you don't ascribe different values to gold based on where it was dug up. Dino bones is dino bones. Look, I obviously don't really believe we should use dino bones as a medium of exchange. I'm just trying to point out that using gold is just about as illogical - the only real difference is that many people are used to using gold. Both are rare, both are dug out of the ground, both have a finite supply, etc. If those criteria are deemed as being the most 'logical' for defining a proper medium of trade, then it seems like dino bones are about as good as gold for purposes of transacting value. Heck some people would laugh at the notion of using gold when we could all being using rocks instead... http://en.wikipedia.org/wiki/Rai_stones

I was pleasantly surprised by the logical and level-headed reporting on the current gold rush in my local, daily free paper, the Washington Post Express (the articles are short like Reader's Digest). The gold rush was today's cover story. Among the quotes: "Worth it's weight? When it comes to gold prices, no one really knows. That's because gold doesn't have intrinsic value. It doesn't offer an interest rate, like a bond, or represent a share of a company, like a stock. It is inherently speculative as an investment: You make money only if the price goes up." "Ultimately, gold is valuable because we all agree it is." For the article, see page 12... http://www.expressnightout.com/printedition/reader.php?data-ipsquote-timestamp=2011-08-18 I never thought I'd see a day where the term intrinsic value was used in this free daily paper, so kudos to the Post Express!! Finally, and I don't mean to sound flippant, all the arguments I hear about why gold is such a good basis for exchange would similarly apply to dinosaur bones. Yet, I'll bet not a single gold bug would take seriously the notion of using dinosaur bones as a basis of exchange. Hmmm.

I don't know that there is much "value" in this trap, but how about Level 3 Communications?

Ericopoly said: "One also has to wonder why people investing in real estate can do a "tax deferred" exchange, whereas I can't do one if I sell one stock to buy another." I agree completely. There are so many inequities in the tax code. Similar to the tax deferred exchange of investment real estate is the ability to sell your primary residence and exclude gains from taxable income if you've lived in and owned the property for 2 of the 5 years prior to sale. If you happen to live in an area where you can build for less than market prices of homes, you can build, live in the house for two years, sell, and repeat. And it's all tax free. Another huge inequity that gets lots of attention: interest deduction on mortgage debt. I get the deduction and love it, but at the same time I don't think it makes any sense that a portion of my cost of shelter gets paid for by the US govt when the guy renting the house next door to me doesn't get any govt cheese. In fairness, I shouldn't get government cheese just for my decision to own. The problem, of course, is that these tax breaks have been around so long, they are extremely unpalatable to politicians (seeking to get re-elected) to take away. So the inequities continue...

Ericopoly - Two things. 1. Many people would consider themselves lucky to have such a 'problem.' 2. I can't imagine that the situation you describe happens all that frequently.

dcollon - thanks for posting the WSJ op ed. I didn't think it was a good rebuttal at all, for a few reasons. First, a good portion of the "rebuttal" to Buffett's position is spent knocking the President's position rather than Buffett's. Buffett clearly stated his belief that taxes should be raised on those making more than $1 million (0.3 percent of taxpayers). The WSJ then goes on at length saying how it is unfair to the middle class to raise taxes on those making more than $200,000, ignoring the fact that Buffett didn't suggest that. This is a classic "straw man" argument, and a particularly obvious one at that. Second, the WSJ argues that increasing that capital gains and dividend tax rates would "make America less attractive for investment." They give no support to their argument, instead just making the assertion. Meanwhile, Buffett pretty convincingly stated that he has yet to see someone shy away from a good investment because of the tax rate they'll pay. Finally, the WSJ's claim that Buffett's charitable donation of his shares is a tax shelter, shows ignorance of the basics of taxes. If Buffett gives away his shares, he never personally realizes a gain from them. Because our tax system is largely a cash-based system, rather than an accrual-based system, you don't pay taxes unless you realize income. So for the journal to declare that not paying taxes on unrealized earnings is a "tax dodge" is just plain ignorant in my opinion.

Nice work Paul!!! Glad to have the board back up and running.

Speaking of "fraud detectors"....from Bloomberg: http://www.bloomberg.com/news/2011-07-21/fraud-detector-minkow-gets-five-years-in-prison-for-stock-fraud-conspiracy.html "Barry Minkow, a convicted confidence man who started a fraud-detection firm, was sentenced to five years in prison for his role in a stock-manipulation scheme. Minkow, 45, was also ordered today in Miami federal court to pay $583 million in restitution." "After prison, Minkow founded the Fraud Discovery Institute. The San Diego-based company, whose mission is to expose corporate fraud, said it supported itself by trading against companies where it found executives had misrepresented their credentials or allegedly committed other types of fraud." "Prosecutors said Minkow made false and misleading statements about Miami homebuilder Lennar Corp. (LEN)’s financial condition to drive down the company’s share price."

Hester said: "Block is mostly right on the issue" Block analyzed the reported revenue as if it were felled timber when it was a standing timber transaction. Maybe I'm slow, but how does that sort of analysis = mostly right? If he had made that "mistake" in a financial analysis course, he would have received an F on the test. Looking forward to your response.

Hester said: "Block got the standing timber issue a little wrong." Hester also said: "I respect [block's] work, from what I've seen." I would expect someone "without a dog in this fight" to have no problem admitting that Block got this issue completely wrong. I also find your two statements above to be at odds with each other. Incorrect work is respectable to you? Finally, I note that you didn't share your thoughts on Block's failure to retract and apologize for "erring" on this key claim (which may be a more troubling issue than the original "error" itself). I anxiously await your response.

One of the primary claims of fraud in Block's report relates to the alleged impossibility of selling $507.9 million of timber in 2010. Block devoted 10 paragraphs to explaining the immpossibility, including analysis of harvest quotas, the amount of handsawing required for this volume, how far timber would have to be carried to roads, and the amount of truckloads that would be required to haul this much felled timber. The problem? Block either didn't understand the industry at even a basic level to know that the "standing timber" that the Company reported they sold isn't "felled timber," or he was so sloppy or anxious to identify a problem that he glossed over the fact that the sale was for standing timber. Was this careless, amateurish, intentional, all three? I don't know. What's troubling to me is he has not acknowledged or apologized for this glaring error. To me, this speaks volumes as to whether his primary interest is "shining light on the truth" as he claims or profiting from blatant manipulation. So Hester, since you say you want to focus on the "actual substance" of the allegations, what do you have to say about this issue specifically and Block's failure to retract and apologize?

I thought this was an insightful and balanced look at Sino-Forest and some of Block's accusations. The comments and responses at the bottom are also good. Enjoy: http://www.metalaugmentor.com/eforum/?p=6994

Three voting choices above 50 percent likelihood and only one choice below?