libor.plus1
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Posts posted by libor.plus1
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There were many times in history when the money supply went up and there was little or no inflation. The Renassiance, the Enlightenment and the the Victorian era. See the "Great Wave" for details. The assumption of inflation assumes constant velocity. The other side of the equation is the demand for money. When you have a debt/deflation scenario, the demand goes down (as folks pay down thier debts) so increases in money supply lead to little or no inflation. Debt is future consumption consumed today. Paying off the debt is the reverse forgoing consumption to payoff past consumption. This is what history has shown. So what has happened is there is more money available and some of it has bid up asset prices but most of it has ended up back on deposit at the Fed. The gold run-up is a function of a portion of the $ driving all commodity prices higher. As soon as the excess liquidity is gone, gold and every other commodity will decline. The only scenario I see gold retaining its value is if the world gov'ts/bankers agree to a new gold standard (a long shot in my estimation).
Packer
You do ofcourse realize most commodities are wayyyy off their highs, right? In fact, a lot of them are trading at yearly lows.
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Parsad,
If memory serves, you sold all your gold position around 1300. I'm not quite sure how your opportunity cost has served you. But that's neither here nor there... and bubbles can go a long time before they pop.
The thing is, it's not really gold bulls that need to "better be right that they expect paper money to all but disappear." It's the other side that needs to better be right that the very obvious, very significant cracks that are starting to show despite the most lax monetary stimulus in history are only temporary blips.
And I think you're viewing gold through the wrong optics. It's not about a hedge against inflation. It's a head against the breakdown of the global economy, about the end of a major currency, and about significant structural problems that no amount of QE infinity seems to be able to solve.
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Everyone can relax. I'm here now.
I just got back from the hardware store and bought us a ruler. It's 4 inches, but I think we can fold it in half and start measuring.
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Are we really having this conversation?
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Why is BAC selling half its stake in CCC despite repeated claims it is well capitalized?
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If there are any individual or institutional investors here that invest in the HK or mainland markets, please send me a PM. I want to discuss something with you.
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Just an afterthought here: Can anyone tell me wtf that Singapore Fund was thinking when they started investing in this? Even as a corporate raider/activist, the fund would have had nothing to raid...
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It's going to be interesting to see if debtholders can find any meat left on the rotten carcase. This gets to the extent of the fraud.. There has to be some trees somewhere that now belong to the debt owners.
Heh, I think the crux of the problem is that there were no trees belonging to anyone ;)
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Eh, could have easily gone the other way (not really tho).
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Heh, I did a quick reread through this thread just for shits and giggles.
Good times.
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I agree that you said all those things Sanjeev. I mostly believe them myself which is why I'm long BAC. I just don't see how this morning's news confirms any of those points to the degree of warranting an "I told you so".
I chalk that up to waking up at 6:15am and then posting on here after hearing the news on Bloomberg. My apologies for the outburst.
The news confirmed our sentiment on the direction of the business and the degree of irrationality around the company. How can any reasonable person not believe that Buffett investing in BAC, be it through preferreds, common, notes, warrants, or even bridge loans, not be a positive thing for the company? He mitigated his own risk, but that does not change his sentiment around the business. Cheers!
Here's my problem with this line of logic: you (nor anyone long BAC) didn't really invest in the same thing that WB invested in. What WB invested in has much higher return potential and much lower risk profile than your investment. Ticker aside, the BAC investment of longs on this board and the BAC investment of WB are VERY different. This is like an investor who invested in a tier 3 tranche of a structured vehicle having a sense of confidence simply because a well known investor invested in a tier one tranche of the same vehicle. The two investments will go in the same direction, but the risk/reward profile is sun and moon.
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oh well naturally that's not ever going to happen. But one can dream. The Market is way too cradled since the Lehman collapse. Moral hazard has no meaning.
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No matter what Ben says, I think the markets will crater in the coming days. I don't think there's anything Ben can do to instill confidence anymore. Actually, if I were him, I'd do a completely different take. I'd stand up there and say:
you know what, I'm not going to do any type of financial easing. I gave the market a promise of low and steady rates for the next two years. That's probably even more than I should have done given the economies overall strength. If investors don't want to invest in an equity market that is clearly undervalued based on all the data and analytics we have, then so be it, but the economy is not at all near a recession to warrant monetary easing. Eventually investors will catch on. Until then, there is plenty of great, solid companies selling at huge discounts.
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BAC is now only up 6% from the 20% a few hours ago... This is certainly not a good sign.
An even worse sign is that Jim Cramer said earlier this morning that this is the beginning of a short cover.
Sure doesn't feel that way.
What the stock does in the short-term is meaningless. Cheers!
Actually, what this particular stock does today is VERY meaningful. There's a lot of talk about 'confidence' because of the WB investment. If the current market activity is a reflection of said confidence, then it's not very inspiring.
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BAC is now only up 6% from the 20% a few hours ago... This is certainly not a good sign.
An even worse sign is that Jim Cramer said earlier this morning that this is the beginning of a short cover.
Sure doesn't feel that way.
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This is certainly interesting. But these pfd that were issued, can it be looked at as BAC raising capital in a roundabout way?
Edit: the reason I ask this is because I remember when the financial crisis first hit in 2008. The first time the feds met to reduce interest rates, they reduced them by .5%, instead of the .25% increments. The market applauded this move, but I remember someone on this board (might have even been eric) brought up the fact that if the Feds had to reduce rates by this much, the problems are deeper than most investors realize. We all know how that turned out.
Also, I remember after the GS investment by WB, Goldman tanked the coming months...
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And here's another way of measuring wealth:
http://nationranking.files.wordpress.com/2011/03/2011-qli-map1.png
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Until this point, I had no idea that the government had so much power against corporate america. It always sounded too 'conspiracy theorist'. I always assumed the government was the bottom in the relationship. But I guess when push comes to shove, the government definitely has some muscle to flex...
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As they say, what doesn't kill you makes you stronger.
... or leaves you crippled and in a vegetated state...
There's still a lot to sort through. I doubt theres gonna be a rally any time soon. This is probably just the beginning of the fall.
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Yes, lets assume they are public. I suppose it makes sense that explorers/juniors would have a tough time with financing. How bout the producers? Even if they aren't doing too badly, do people want to put their money in stocks?
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Question I can't seem to find an answer to:
In times like this, where gold is surging, but financial markets are getting wrecked, how easy/difficult is it for gold producers/explorers/miners to get financing?
Any colour on this would be greatly appreciated.
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The only time someone uses EI is to download a different browser.
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BAC just told CNBC that they do not need to raise capital.
aww shucks.
You know what's going to happen next, right?
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I dont know what is going on in this thread. But what has been read, cannot be unread.
The Saudi Prince Who Made a Killing During a Banking Crisis...
in General Discussion
Posted
I recall an interview with him when the first cracks started appearing the first time around. He said something along the lines of:
"Ive talked to the CEO. He has assured me that there is nothing that I need to worry about, and that the bank has more than enough capital to face any problems". A few weeks later, C was nearly a penny stock.