The Mess That Greenspan Made - Part 30

Gold and silver prices dipped early last week after broad stock market indexes had reached record highs, but then the metals advanced sharply and ended higher as equity markets faltered amid new credit market fears, this time concerning the health of Portugal’s biggest bank. This marked the sixth straight week of gains for precious metals that are now at 3.5 month highs despite recent sharp declines for most other commodity prices.

Gold and SilverThough safe haven demand from a number of different sources (a list that seems to grow every week) has been the key driver behind rising gold and silver futures market buying, the big gains turned in by mining stocks so far this year are also being credited for some of the metals’ strength.

The silver rally has been particularly impressive as the “poor man’s gold” has risen 15 percent in just the last six weeks.

India and China remain non-factors for metals markets this summer and this is likely to continue over the near-term as the new Indian government chose not to reduce gold import duties and inquiries into commodity financing deals cast doubt over China’s gold demand. But quickly approaching seasonally strong periods of the year for both of the world’s top two gold buyers should prompt physical buying in Asia.

After surging in February and then faltering in the spring, precious metals are now again in strong short-term uptrends, seemingly determined to…

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Monday Morning Links

AdviceIQ: Why the market hasn’t peaked – USA Today
Individuals Pile Into Stocks as Pros Say Bull Is Spent – Bloomberg
Forget Debt As A Percent Of GDP, It’s Really Much Worse – Forbes
BIS chief: Rate rise could trigger Lehman-style event – Investment Week
BIS chief fears fresh Lehman from worldwide debt surge – Telegraph
Don’t be fooled by Krugman’s half-truths about the BIS – Telegraph
The end of quantitative easing is good news – Washington Post
Citigroup settles subprime mortgage case for $7B – AP
World Cup Triumph: Germany Earned It – Spiegel
5 money lessons learned from Monopoly –
How to Fix the Credit-Rating System – Bloomberg
Ockham’s Razor and the Market Cycle – Hussman Funds
2014 vs. 2007 – Noland, Prudent Bear

Global stocks rebound after Portuguese bank scare – AP
Tech earnings may boost market in flux – USA Today
Don’t get too comfortable with low bond yields – CNBC
Why You Should Probably Own Fewer Stocks – Clear Eyes Investing
David Rosenberg: War and mayhem good for defence stocks – Financial Post
Treasuries Halt Five-Day Gain Before Retail Sales, Factory Data – Bloomberg
Gold slides from 3-1/2 month high as stocks climb – Reuters
Are we due for another massive gold and silver price smash? – Mineweb
Trend Change Developing In Gold And Silver Prices – GoldSilverWorlds
CME Group Cutting Margins For Gold, Silver, Copper Futures – Kitco
For How Long Will People Trust Fiat Money? – BullionStar

Consumers Spending More, Just Not on Things They Want – Gallup
Markit: Global business confidence wanes in June – xinhuanet
Draghi Faces Age-Old Problem in Trying to Spur Europe Inflation – Bloomberg
Singapore now 4th most expensive city in the world for expats – CNA
Secret Path Revealed for Chinese Billions Overseas – Bloomberg
Why the Chinese Are Snapping Up Real Estate in the U.S. – Five Thirty Eight
Should you give your child a down payment to buy a house? – Financial Post
Cities with the most abandoned homes – USA Today
Yellen’s ‘dovish stare’ may crack at testimony – CNBC
What the Fed Really Meant to Say – Bloomberg
Are the Fed and the ECB falling behind the curve? – CNBC
Charting a path to ‘normalization’ – Reuters


The latest issue of the Iacono Research Weekend Update has been posted to the website and is now available for subscribers here.

There will be no changes to the model portfolio or the buy ratings this week, but the ongoing covered call sales are reviewed in the following discussion topic:

The executive summary is as follows:

As second quarter earnings season gets underway, a sharp sell-off for equity markets early in the week was partially reversed on Wednesday after the release of meeting minutes from the Federal Reserve’s June gathering. Fresh banking fears in Europe led to renewed risk aversion and the broad stock market ended the week lower as safe haven assets such as bonds and precious metals gained.

Prices for both energy products and agricultural goods tumbled, falling for the third week in a row, and related shares were bid sharply lower as well, but precious metals prices rose for the sixth straight week with mining stocks seeing more outsized gains. REITs moved higher and long-term Treasuries surged as the model portfolio rose 0.7 percent, now up 10.0 percent for the year.

Want more Iacono Research? Subscribe now, risk-free for 45 days.

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Bowman Lake

As one might imagine from the picture below taken by the missus earlier in the week at Bowman Lake in the North Fork section of Glacier National Park, it’s been difficult getting back into the swing of things here on a Friday in July.

We had never been to this area before and were glad we finally ventured up that way. As detailed here, it’s in one of the more remote parts of the park and it’s meant to be kept that way, something that comes fairly easily when the roads are kept as they are.

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