Thursday, August 16, 2012

Corruption at it Worst; Gold Demand Trends; Drought; Farcebook


Corruption At Its Worst
Here’s your promised change from 4 years ago – an even MORE corrupt system: No One Will Be Charged With a Crime for the MF Global Collapse - Yahoo! News via @YahooNews. 

The moral to the story: the House generally wins in some way, shape, or form. The people of the MF house win by being able to walk away scot-free. Make sure the core of your net worth is not filchable through these non federally insured segregated accounts!! Most of these accounts were used simply as hedges within the farming industry related to the original intent of futures markets dating back hundreds of years. It was the House (MF) that went on a gambling binge and took everyone down with it. We now know the Chicago Merc is of no use in this situation. What will the SIPC do? The loss of a billion dollars is a gain for the party on the other side of the bad trades.  

The end of the world again confronts gold holders – at least in the estimation of the mainstream media in reaction to WGC data that shows a 7% decline in world gold demand during the 2nd quarter from the year before. Demand slackened in China and India, but increased due to safe haven demand in Europe.

The lithium in the report comes from solid demand from world central banks where demand more than doubled year over year. Put two and two together for yourself, dear reader. I would say that if the controllers of the financial game (central banks) are buyers of gold as a means of distancing themselves for being overweight dollars, the average person should also be looking at gold as a place to store wealth.

However, it appears that American buyers have not been heeding the message. U.S. bar and coin demand fell 27% year-on-year to 14.4 tons, the WGC said. At this time there isn’t further elaboration on that steep drop in demand.

With gold headed for Tier One asset banking status, I still see a positive gold outlook.

I touched on the drought situation yesterday. While the near term temperature forecast in the Midwest has moderated to an outlook of reasonable temperatures, the outlook for rain is still looking hobbled

As a result, September corn is holding at close to the $8/bushel level. The mainstream media is hyping the drought with stories like this:
Corn price increase to affect pumps, pantries: via @msnbc

However, other world corn growers, including Brazil are likely to fill enough of a void in U.S. crop yields to stave off a worldwide crop disaster scenario at least through this fall. In terms of price, much will depend upon what the USDA will announce in the coming weeks. The risk is weighted toward the USDA having underestimated U.S. crop damage. Imho prices still have a good chance of resuming higher.

A fresh Nadir for FaceBook
This space warned you about this IPO last spring. Bagholder city. Facebook shares fall to a record low as the post-IPO lockup on about 271 million shares expire. The stock is down nearly 6% at $19.89. More than 1.3 billion more shares to be unlocked before the end of the year. --
I won’t say that I have seen it and reported it all on Wall Street, but I’ve seen enough over 25 years to know a bad deal when it comes along. Unfortunately in this day and age, much of what is coming to market is poison and doesn’t take a degree in rocket science, or special powers of discernment to determine a loser. It’s as if the street will bring anything to market without even the pretense of trying to gussy up an offering. 

Wednesday, August 15, 2012

I'm Back

  • 8/15/12
    I’m Back
    I wish I could say I was away for a vacation, but very sadly my wife’s brother was killed in a workplace accident and we ended up rushing out to Belleville, Illinois for the wake and funeral.
    Parched fields of corn caught my eye while we were in that Midwest location. After trading as low as 35 in May and June, the CORN ETF continues to hold above $50. The actual September corn futures have moderated a bit in recent days thanks to cooler weather break and are trading below $8 a bushel, but the concern with this and other crops is the need for drought busting weather. That seems elusive at the present time.
    The weather guessers at NCEP are scratching their heads seeing EC, or equal chances for above or below normal precip moving toward fall. At this point, people should not only be praying for rain, but doing rain dances, etc.
    There has been a drought of sorts for gold: a QE drought. Thus far, it has been all quiet from the Fed. I could spend lots of time speculating on Fed possibility, political ramifications, etc., but let’s wait to see what Fed officials attempt to jawbone (speak about) in the coming weeks for QE hints. Keep in mind, the Fed jawboning has had a lot more to do with calming financial markets and reminding the stock and bond casinos that the Fed “stands ready” to act though it has yet to act again to satisfy the animal spirits in search of QE (though you can certain argue that by not acting, the Fed is acting).
    Related: Goldman Sachs is saying they do NOT anticipate QE3 this year gosh, maybe QE is coming, or GS just went short the market!
    Related: Paulson Steps Up Gold Bet to 44% of Firm’s Equity Assets
    A brief closing thought…
    As we move deep into the heart of August, markets are operating at a very dull roar on both sides of the Atlantic. Volume may be drifting lower, but the problems have not disappeared.
    German Bund Yield Reaches Six-Week High on Spain Aid Speculation via @BW

Monday, August 6, 2012

Tisk Tisk Mr. Willis; Stocks Seek Higher Ground To Start off the Week

Tisk Tisk Mr. Willis; Stocks Seek Higher Ground To Start off the Week


I must have struck a sensitive nerve. Conscience has a way of doing that to people. What they must know is a shoddy practice, in this case I called out PCGS and NGC on the slabbing of a plethora of modern coins as being perfect MS70 examples (when everyone knows that true perfection should be a rarity and not a mass production operation) causes people to take impulsive punitive little actions. In this case, I got kicked off the friends list of Don Willis, PCGS Collectors Universe prez, on Face Book! LOL.

This came about after I highlighted a study (read it here) done by coin expert and journalist Mark Ferguson (his site here) confirming that CAC stickered coins on the slabs of PCGS and NGC graded coins do fetch premiums in the coin market place.  My additional observation was that CAC does not sticker the modern slabs. At the extreme, 1978 Eisenhower dollars are the stopping point on the CAC time line to qualify for verification. CAC says it on it’s own website  “CAC Does Not accept Modern Coins / Bullion Coins”. Yes, in RED.  (See theCAC list here)

Related: What is CAC verification? (Go Here).

Here’s how the conversation went down on Facebook. Note: Someone removed a somewhat bitter final post written by Mr. Willis to Mr. Higgens.  I didn’t remove it. Usually on Facebook that means the writer of the post removed it.

Jim Kingsland shared a link.
Shaky Labor Market; Gold Developments; Congrats to CAC! Why I have a number of Beefs with PCGS and NGC $$

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    • Description:
It doesn't take much to offer an opinion on an already certified coin that is guaranteed by someone else. If you look at a coin in a holder and can't tell if it has a problem then you do need help from a dealer such as Albanese.
Friday at 10:58am via mobile · Like · 1
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Rock on Don!Cac is class!
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Jim Kingsland i know my post today will not make me many new friends. I would say many don't know what they are doing and do need John's help through CAC. It is well known that there is a large overhang of problem slabs in the great "out there" that can flummox too many. I see it as a glaring problem that CAC helps people to avoid.
    • Description:
Robert Higgins I think you need a lesson in respect !!!
    • Description:
Jim Kingsland I respect the top grading services as we would be worse off without them, but I respect CAC even more.
    • Description:
Robert Higgins Let me rephrase this: Don Willis, I think you need a lesson in respect!!!
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Don Willis, it was nice being FB friends while it lasted.
The subject of CAC gets under the skin of the coin graders and its benefactors in the coin industry. They misunderstand CAC, which seeks to merely to verify coins that are solid for the grade, which just happens to be of importance to coin collectors. CAC is not here to point out grading service inaccuracies. Yet, the grading services involved seem to think CAC is out to get them, or question their expertise.

I would add that Mr. Willis should re-consider his well rehearsed line above about it not taking “much of an opinion on an already certified coin that is guaranteed by someone else.” I would point out that the “opinion” that’s being offered coming from this “Albanese” as Willis puts it, is John Albanase the co-founder of PCGS!   I get a good chuckle when I get the hackles up of a person when I point out easily refutable thinking.

Suggestion to Mr. Willis: If you are so thinned skinned about the reality of the marketplace and how it embraces CAC verified coins, perhaps PCGS could employ its own verifier who for an extra fee could confirm the PCGS slab is solid for the grade. This would go beyond what I find is the murky “+” designation. The marketplace clearly likes a CAC solid-for-the-grade verified coin.
The bottom line, is that I have personally observed (and I am not speaking now in defense of CAC, but for myself) is that not everything that is graded MS70 is MS70. I find that to be unconscionable.
Now, should I point out other beefs with the coin graders? I shall leave that for another post.  The top forces in the coin industry need to clean up their acts.
Mondays have been droopy days for Wall Street over the past few months, lacking for the most part in gains for the first trading day of the week. This morning stock futures are up, but that doesn’t indicate whether the close shall  be positive or negative.

I tweeted about VXX (volatility) over the weekend. It’s getting to extreme lows. I think it’s a much easier play than trying to figure out when the SPY rally fades. Follow my tweets, I am @jkings1
It was a $10 stock a few trading sessions ago. Now it’s looking like a $2, or less issue. Good Knight. Knight Shares Halted After Rescue Plan - MarketBeat - WSJ

While, the old adage, ‘never short a dull market’ comes to mind as we move deeper into August. This will simmer-down on both side of the Atlantic, especially in Europe, where the sovereign debt issue will somehow be put on hold for the rest of the month could manifest itelf, if the bulls are lucky. However, we learned last summer, going into Labor Day that these markets can become topsy turvy due to unforeseen (by most) events in Europe.