Gold Ticks Higher as European Inflation Soars
March 31, 2008 | Leave a Comment
THE SPOT PRICE of physical gold bullion gave back half of an early 0.8% gain in London on Monday morning nearing the end of the first quarter almost 12% higher against the US Dollar. Read more
Recession possible, but economists hopeful
March 28, 2008 | Leave a Comment
The US government confirmed today (March 27) that the gross domestic product grew at a miniscule .6% during the fourth quarter of 2008. This matched previous analyst forecasts for the October through December quarter. Many economists will be watching closely during April, as the government issues its estimate for the first quarter 2008 GDP. Read more
Moral Hazard, Merrill Lynch, Goldman Sachs, Spiders and Margin requirements
March 27, 2008 | Leave a Comment
Now if that title doesn’t cause Google bots to have a happy hour I don’t know what will? There is a lot of talk about moral hazard being assumed in the Markets, what with the intervention of the Fed with Bear Stearns, the Bank of England with Northern Rock and the Bundesbank with a whole host of German banks. Read more
Existing home sales up, home prices down
March 26, 2008 | Leave a Comment
The last few weeks have seen some big developments in housing and credit markets, which continue to fight an uphill battle. The Fed jumped in to assist JPMorgan in its buyout of Bear Stearns, which had been on the verge of bankruptcy. Markets were inspired initially by the news, but were even more enthused when JPMorgan upped its offer to $10 per share on Monday. Read more
The Federal - Structured Investment Vehicle - Reserve LLC
March 25, 2008 | Leave a Comment
So, in the end the Fed decided to copy Enron and become a Special Purpose Vehicle, more commonly known these days as a Structured Investment Vehicle. (SIV) The Fed has granted itself the ability to morph by expanding its short term lending and borrowing facilities to such an extent it is now the market. Read more
Oil and gold drop sharply as dollar rises
March 23, 2008 | Leave a Comment
Oil and gold continued their brief, but sharp declines on Thursday (March 20) as US stocks regained much of their Wednesday losses, and the dollar remained firm in the midst of its hiatus from its long-term downward fall. Oil had been on a relentless climb up until three days ago when it peaked at $111 and began a swift fall. Gold had traded around $1,020, but has seen an even more impressive fall to a spot rate of $910 Thursday. Read more
A Reply to John Mauldin’s Outside The Box - Let’s Get Real About Bear
March 20, 2008 | Leave a Comment
I have been, and still am, a long time fan of John Mauldin (JM). I enjoy his take on the bigger picture, even if there are areas I disagree with, from time to time. Generally my disagreements are more to do with the severity of a particular problem or the benefits of a highlight. For instance, JM might allude to a recession but think that it will be mild and happen over a certain time scale, fitting his “muddle through” model. I would agree with the talk of recession but not necessarily the depth, timing or effect. You get the point. Read more
Fed makes markets move with .75 point rate cut
March 19, 2008 | Leave a Comment
In spite of the fact that a deep rate cut was widely expected to come out of today’s (March 18) Fed meeting, financial markets of all kinds reacted with much exuberance to the .75 point rate cut announcement that came in the early afternoon. Stocks, which had been up already with anticipation (Dow well over 200 much of the day), surged even higher near the close, with the Dow closing up 420 points on the day. This was the second 400 point-plus gain for the index in the last month. Read more
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