professional wordpress themes

REMINDER: All investment, economics, and finance related material now appears at the new IaconoResearch.com. For the time being at least, this has become a personal blog covering a variety of mostly unrelated topics.

Eric Sprott on CNBC

On April 16, 2010, in Commodities, by Tim

Eric Sprott of Sprott Asset Management (who was unsuccessful in buying some of that IMF gold) talks to Maria Bartiromo about China, government spending,  and, of course, the  natural resource markets including the new Sprott Physical Gold Trust (NYSE:PHYS).

The new fund offers a number of intriguing features such as low tax rates and the option for physical delivery but, best of all, the custodian is the Royal Canadian Mint rather than JP Morgan or HSBC. As for stocks in general, he says he’s been “wrong since March of ‘09″ and doesn’t intend to change that view anytime soon.

Full Disclosure: No position in PHYS at time of writing

2 Comments
Leave a Comment

Tagged with:  






More Tarnish on the Goldman Shine

On April 16, 2010, in Banks, by Tim

Oh yeah, the other top news of the day is that Goldman Sachs, everyone’s favorite Wall Street firm, has been charged with fraud by the Securities and Exchange Commission – something having to do with subprime mortgages and derivatives, everyone’s favorite investment products of the last decade. Reuters has all the details in this report:

Goldman Sachs Group Inc was charged with fraud by the U.S. Securities and Exchange Commission over its marketing of a debt product tied to subprime mortgages that was designed to fail.

The lawsuit is the biggest crisis in years for Goldman, which emerged from the global financial crisis as Wall Street’s most influential bank.
…
The SEC alleged that Paulson & Co, a major hedge fund run by billionaire John Paulson, worked with Goldman in creating a collateralized debt obligation, and stood to benefit as its value fell, costing investors more than $1 billion. That is roughly the amount that Paulson is estimated to have made by betting against the CDO.
…
Robert Khuzami, head of the SEC’s enforcement division, said John Paulson was not charged because it was Goldman that made misrepresentations to investors, not him.

There’s lots more in the report including incriminating emails and some details about everyone’s new favorite Goldman Vice President, Fabrice Tourre, who was responsible for these products and also charged with fraud.

They’ve probably got the party hats out over at GoldmanSachs666.com.

1 Comments
Leave a Comment

Tagged with: • •  

Consumer Sentiment Tumbles

On April 16, 2010, in Economy, Uncategorized, by Tim

More evidence that what the American consumer says and does can sometimes be two entirely different things comes with word of plunging consumer sentiment in April, this following Wednesday’s report of sharply higher retail sales just weeks before in March.

The Reuters/University of Michigan consumer sentiment index tumbled from 73.6 last month to just 69.5, the lowest reading since last October, back when the U.S. economy was still losing hundreds of thousands of jobs every month. Expectations fell from 67.9 to 62.3, their lowest level in a year, while the current conditions index fell from 81.4 to 80.7.

A rising stock market and more than 100,000 new jobs since last fall are apparently not enough to improve the mood of the consumer but, clearly, that doesn’t mean that they won’t go out and spend money anyway.

0 Comments
Leave a Comment

Tagged with: •  

Punish the Savers – Part 63

On April 16, 2010, in Banks, by Tim

Having just looked at some paltry renewal rates for CDs that matured this week, the 2.5 percent rate from a year ago, astonishingly, dwarfing what is being offered today, I know first hand what Floyd Norris is talking about in this commentary at the New York Times.

Aren’t low short-term interest rates wonderful?

If you are a bank, the answer is yes, particularly because the low rates are accompanied by somewhat higher longer-term rates.

If you are a saver, however, your view might be very different.

This month some interest rate spreads have reached record levels. The difference between what the Treasury pays on a one-year bill — less than half a percentage point — and what it pays on 10-year bonds — a little below 4 percent — expanded to the largest on record this month. In banking jargon, that is a very steep yield curve.

For banks, that is a license to make money with very little risk, particularly since they can get people to open savings accounts that pay close to nothing.

At some point in time, one way or another, this misguided notion that the banks must make a full recovery before the economy as a whole can recover will be discredited as system that benefits only the big banks and the elected officials they influence – then we can all move on to a system that isn’t so stacked against the little guy.

(more…)

3 Comments
Leave a Comment

Tagged with: • • • •  

From Here, Everything Looks Like Up

On April 16, 2010, in Housing, by Tim

The Commerce Department reported(.pdf) that housing starts and permits for new construction both rose more than expected last month, however, similar to recent data on new home sales that just sunk to new all time lows, it doesn’t take much for the homebuilders’ leading indicators to show improvement from current levels.

Housing starts rose 1.6 percent in March to an annualized rate of 626,000 units and are now more than 20 percent higher than a year ago. Permits for new construction rose to their highest level in 17 months, up 7.5 percent to a rate of 685,000, a full 34 percent higher than a year ago when this data series was making a bottom.

2 Comments
Leave a Comment

Tagged with:  

Friday Morning Links

On April 16, 2010, in Uncategorized, by Tim

TOP STORIES
Senate restores $18 billion in jobless benefits – AP
Greece ready to tap aid if needed, premier says – MarketWatch
Senate G.O.P. Leader Calls on Party to Stop Fiscal Bill – NY Times
On Main Street, Wall Street’s big profits seem like bad manners – Washington Post
The Connection Between Unemployment, Foreclosures, and Right Wing Rage – HuffPo
Financial Regulation Bill Set for U.S. Senate Floor Next Week – Bloomberg
Goldman Real Estate Fund Lost 98 Cents on the Dollar – CNBC
Baby boomers are putting off retirement – McClatchy

Have these these links delivered to your inbox every weekday.

MARKETS/INVESTING
Oil drops below $85 as Asian stocks slump – AP
Gold slips below $1,160 on profit taking – Reuters
Precious metals prove white-hot for investors – Telegraph
Lumber Rises to Highest Price Since 2006 on Economic Outlook – Bloomberg
Low Rates Good for Banks, but Pity the Saver – NY Times
Real Estate Could Beat Stocks, Bonds: Gross – CNBC

(more…)

0 Comments
Leave a Comment

 
© 2010-2011 The Mess That Greenspan Made