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Just as the government is trying to prevent people from investing in anything other than T-Bills by raising taxes on taxable interest and dividends to confiscatory levels, it's also trying to prevent you from parking your wealth in assets, like gold, that compete with the paper dollars issued by the Federal Reserve and the Treasury. A press release from Rep. Anthony Weiner, Democrat of New York, not yet (as of this instant) posted on Mr. Weiner's Web site, announces that a September 23 hearing of the Subcommittee on Commerce, Trade, and Consumer Protection (a subcommittee of Rep. Henry Waxman's Commerce Committee) will focus on "legislation that would regulate gold-selling companies, an industry who's [sic] relentless advertising is now staple of cable television."
From the press release: "Under Rep. Weiner's bill, companies like Goldline would be required to disclose the reasonable resale value of items being sold." That's great. Are Mr. Weiner and Chairman Bernanke also going to agree to print on every dollar the reasonable expectation that its value will be eroded by inflation?
Gold investors (or speculators) are already punished by the federal government by having their investment, even in a gold exchange-traded-fund, taxed at the higher rates that apply to collectibles rather than long term capital gains.
Not to mention the fact that Mr. Weiner's regulatory push seems as much aimed at conservative journalists as at the gold-dealers. The press release says, "Goldline employs several conservative pundits to act as shills for its' [sic] precious metal business, including Glenn Beck, Mike Huckabee, Laura Ingraham, and Fred Thompson. By drumming up public fears during financially uncertain times, conservative pundits are able to drive a false narrative. Glenn Beck for example has dedicated entire segments of his program to explaining why the U.S. money supply is destined for hyperinflation with Barack Obama as president."
Wall Street’s Engines of Profit Are Slowing Down
Looks like the pendulum is till at the beginning of it's arc...now it's energy's turn...
Regards,
OW
Interesting reading, of course, but I don't see that information pointing to any kind of meltdown or anything "ominous". I think some of the huge brokerages were in an irrational hyperdrive for too long anyway, and now that they are slowing down doesn't mean as much as some might suggest, AFAIC.
The successful international (or domestic with international growth and expansion) corporations are the ones I am more interested in. And I agree with Tony, when it comes to conservative investing. While I certainly own a fair amount of equities, I also keep a hefty percentage of my portfolio in fixed securities. I like the balance, and so does my broker, who has been making some great investments for me lately.
Personally, I don't think the "pendulum" is actually swinging all that much in any direction. What "beginning" of what "arc" are you referring to?
TM
Why, the pendulum is swinging at beginning of the"new Wall Street" (small n for normal)...and it's just begun.
At the end of the day, the slow and steady...
Regards,
OW
At the end of the day, the slow and steady...
I understand now why you posted that article. I like the slow and steady market action.
BTW, I love my AAPL, AMZN, and QLIK stocks.
I've been "in" the market for quite a while now. And you know if I didn't believe in the market, I'd be "out" without hesitation. My very diversified portfolio also includes AAPL, AMZN, and QLIK, so I'm very happy with the recent gains.
That said, I think there's a chance that the market might go sideways for a little while during October. We'll see. Really depends on Obamanomics right before the elections.
TM
There is a lot of balancing necessary between commodities, currencies, fixed securities, equities, and even real estate, IMHO. The values of various investments and money itself is always in some sort of relationship, but I think that's all been changing more than usual, on a global level.
Your post is very perceptive.
TM
What say you?
Regards,
OW
Regarding the Dow...I don't see anything more than 11K by year's end, maybe nothing much more than what we have right now.
I might be pushing it a bit here, but if politics aren't an obstacle, and if the Bush tax cuts are extended for ALL income brackets, (and if the planets align in just the right way... lol) I think the Dow could conceivably touch 11,250 or maybe even 11,500 briefly by year's end.
TM
The euro fell to $1.3335 on Thursday from $1.3390 late Wednesday in New York.
Oil has seesawed around the $75 level for most of the past year despite strong crude demand in emerging economies, such as China, as growing oil supplies in the U.S. weigh on prices.
Combined inventories of crude, gasoline and distillates grew last week to 165 million barrels more than two years ago, Cameron Hanover said. Just three weeks before, the supply was 132 million barrels over two years ago.
"We continue to increase the amount of oil we have in storage against the amount held two years ago," Cameron Hanover said. "We still have way too much oil, and demand is not trending higher in any meaningful way."
It isn't going to fall off the cliff but how much pressure is needed to trend down by a wide margin from the current $70 - $75 range?
Regards,
OW
I am amazed it has been holding up here for so long. I still think that in the near future, it will break to below &70 then head south from there.
As you already know, I'm not that amazed. And, if it should actually head "south" in the "near future" (I'm not sure just how "near" you mean by that), I don't think it's going to head "south" for very long or very far.
You have expressed your optimism for the economic picture to improve. If that is the case, then energy demand will increase. I wouldn't expect an increase in demand to result in a significant decline in the price of oil.
TM
Tag, in my opinion, it's not all that far fetched to see oil in the $60's and the stock market continue to edge slowly higher over the next several months. The oil supplies are HUGE.
Charlie, I don't think it's far-fetched either, although I do not know whether we will actually see that happen or not. I got the impression that you were referring to a rather significant price drop. I guess it's just a matter of perspective.
But, as I've said for a long time now, I expect to see prices a bit higher than they really ought to be.
TM
Watching Boardwalk Empire (which no one should miss seeing) I said to my wife this tax policy reminds me of Prohibition. The only thing it accomplished was a mob controlled industry and sky high prices.Now just make the government the mob and taxes the sky high prices.
As for the market jump recently - maybe it's a lot more tied to the feeling the Dems will not control everything much longer.
BTW - a big thanks for the help Tag. Your thought that we were oversold and a nice bounce was coming pulled me back in. I owe you one, buddy. Another 100 points on the Dow though and I made trade 65% back out.
There's no doubt that many (not all) of the Dems are a dangerous bunch, and fiscally irresponsible to the point of being beyond negligent. That said, there are admittedly a few in the GOP that are seriously out-of-touch with reality.
But, IMO, America is a different place already, and we are dealing with a new reality.
Regarding the market, I am always cautious in October, and I will be glad when November comes along. I can't say for sure, but I might pull back very soon, and then expect to ask my broker to purchase more stocks again around the end of October or early November.
Politics will affect my decision, without a doubt.
Good to hear from you!
TM
In case anyone missed it, in reply to some recent posts by Charlie, OW, and Fin, I predicted the Dow might touch 11,500 at some point before the year ends.
Anyone care to top it?
TM
I'm not anti democrat. I rather have a middle person in power whether he's a dem rep or whatever. Did anyone catch Trump's blistering of Obama?
I wish I'd seen Trump on that.
It's obvious that your political views and mine are nearly identical.
TM
2013 LX 570 2016 LS 460
Jack Welch on these links is so deadly accurate. You need to have run a business or been high up in operating one to undersatnd what is going on. Obama's speeches and policy vs what the unintended consequences of them are (or maybe they aren't unintended) are mind boggling. Remember Obama has run nothing in his life. He wrote a book and is as far away from being an operator as one can get. It actually reminds me of the old commercial about no rain for the rest of your life. I can actually see Obama sugar coating that to grand applause in a speech. A year or two later as every piece of plant life dies the applauders discover the consequences. Basically that's what we've got in Government right now. They have no clue of what their policy means (I'll bet none of them read the Healthcare bill) or what its consequences are. As for his cmments here on jobs I couldn't possibly agree more. We will not have a good unemployment number until the baby boomers retire. I haven't hired anyone in 18 months (and we will have a record profit year as advertising has really bounced back) and the next job I hire for will be a replacement person for someone we have done without for 12 months. And the only reason I will hire is that I need to re-write a major product line's programming code.
http://www.cnbc.com/id/15840232/?video=1598054940&play=1
http://www.cnbc.com/id/15840232?video=1598047442&play=1
Here is a scenario that fits the bill and shows you the DUMB logic of it all Take care and save the $100 dollar Bill for later..
It is a slow day in the small Montana town of Circle , and the streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.
A rich tourist visiting the area drives through town, stops at the motel, lays a $100 bill on the desk and says he wants to inspect the rooms upstairs before selecting one for the night.
1. As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.
2. The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
3. The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Farmer's Co-op.
4. The guy at the Farmer's Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.
5. The hooker rushes to the hotel and pays off her room bill with the hotel owner.
6. The hotel proprietor then places the $100 back on the counter so the rich traveler will not suspect anything.
At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves town.
No one produced anything. No one earned anything. However, the whole town is now out of debt and looks to the future with a lot more optimism.
And that, ladies and gentlemen, is how Stimulus works.
my real question is how Circle came into the picture.
I was born in Circle, Montana, and anyone who has been there can tell you that that's not something many people can say.
Odd.
2013 LX 570 2016 LS 460
Regards,
OW
2014 Malibu 2LT, 2015 Cruze 2LT,
In the words of Boardwalk Empire's Nucky Thompson to Congress:
"To those beautiful, ignorant bastards"
Charlie, I meant to respond to this before but a buddy of mine that is well connected told me the biggest buyers by far of crude on the futures markets are the oil companies themselves as they try as hard as they can to keep prices high until some demand kicks in. Hedge funds d'ont buy into oil right now but are lured back in because of the false prices the oil companies are causing. If we didn't have a futures market oil would have totally collapsed ala natural gas and would probably be trading at a third of its $147.50 peak again ala the natural gas to its peak around $13-14. I realize we have a natural gas futures market but it has no allure at all and never had a currency hedge in it.
Regards,
OW
This really does make a lot of sense. There is no other rational reason as to why oil is trading in the mid $70s. It is nuts with all the glut. I think your buddy hit the nail on the head. Incredible manipulation !
As an investor would you buy an instrument that has low demand, just built up 35mln barrels of supply in less than 3 weeks alone in itself and derivative products, has record high inventory and has excess manufacturing capacity with a fragile economy that is the most important user by more than double? On top of that the manufacturing utilization capacity is far lower than anytime in the last 5 years. Asked in a different way would you buy a stock with declining revenue and profits that is years away from even hoping to recover to 24 month ago levels? What kills me is the oil companies can use high leverage ratios to perform this task.
The oil companies have manipulated the supply as well as the price of oil for decades.
Maybe it's better that way, or Obama will put some sort of government control in place and then it will all backfire, and gas will be $8/gallon, and he can claim it's all for our own good... supporting electric cars and energy independence, and all that.
TM
Historically, nearly every time the prices got high enough for the consuming public to consider alternatives and economical transportation, the price would edge down just enough for the public to adjust to it and to be kept "on the hook". The same thing has happened recently, and now (as has happend countless times) sales of SUVs, trucks, and gas-guzzlers are on the rise.
It's a pattern... and it's been going on for a very long time... even before the futures market. The futures market has only made it even easier. The oil companies have cleverly kept the world hooked on oil for so long, and will make every effort to continue to do so, and at the same time keeping their profits at the maximum possible levels.
Surely you remember the numerous times when the public was "outraged" at the prices of oil, and the reported oil company profits, and then there would be some meaningless token investigation, only to accomplish nothing, and then the prices would mysteriously go down for a little while, and then when the contraversy settled down, they would go back up to that "fine line"... but frequently just cheap enough to have folks think that oil is cheap enough to buy more of those types of vehicles that actually use more of the stuff. It's an amazing and nearly perfect addiction pattern... between the addict and the supplier.
And, you were questioning the merits of investing in oil? Interesting. When a company sells a product that the whole world is addicted to, and has a fair amount of control over the supply, as well as the ability to manipulate the price of its product, I'd have to say that it's pretty likely that it's an investment worthy of consideration.... IMHO.
TM
http://www.youtube.com/watch?v=0Wrrzsrb-wg&feature=related
thoughts?