The Mess That Greenspan Made - Part 415

Gold Still Under U.S. Investors’ Radar

More evidence that U.S. investors are still largely unaware of the ten-year old bull market in gold that has been occurring right before their eyes comes via this graphic in the local paper (presumably from Associated Press) in which the meager gains on gold stocks this year are characterized as a “summer survivor” while basically ignoring the metal itself.

While gold stocks have struggled, the metal has gained 32.5 percent this year as of Friday and silver has done even better – returns that any investor could have achieved by buying one of the many bullion ETFs. This point may have been worth mentioning if you’re going to go to the trouble of creating a table where one of five items is “Precious Metals”.

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The Best of the Bozeman Police Reports

Culled from the Police Reports page of the Bozeman Daily Chronicle come the best of the Bozeman police reports from the last week along with some items from the Sheriff’s Office.

Multiple reports of hissing bears highlight this week’s reports along with the usual alcohol related entries and flipping off incidents. As the ursines go on their fall eating binge in advance of a long winter sleep, look for bear sightings to rise sharply since, as the eating accelerates, they’ll be tooling around Main Street in about a month looking for food, hopefully during the wee hours on the weekend to help settle the drunken late-night crowd. By the way, does anyone know what “huffing” cans of “spray duster” means?

  • A person on Valley Center Road reported a wrench stolen sometime in the past year.
  • A man in a blue Town and Country minivan drove around Summer Ridge Road at 2:40 p.m. handing out tissues.
  • A South 16th Avenue man wanted to retrieve his gun that was confiscated by an officer. He couldn’t remember which officer took it or why.
  • A man arrested on East Main Street for disorderly conduct and assault was also charged with criminal mischief after spitting and urinating on the floors and walls of the jail.
  • An aggressive black bear was hissing and snapping at a man along Little Coyote Road. The bear wouldn’t let him pass and he had to drive across the yard to get in his house.
  • A caller wanted to talk with an officer to find out whether it’s illegal to lie to someone about having Hepatitis C before having intercourse with them.

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Having read no financial market news and listened to only a little Bloomberg radio over the last couple weeks while visiting the Canadian Rockies and Glacier National Park, it would appear that financial market conditions have not improved much since we’ve been away and that the recent stock market rally may have about run its course after today’s dismal labor market report. Markets have become increasingly volatile as shown below and recent headlines indicate a rising probability that the trend could continue this fall.

It’s been a remarkable run for gold amid all the turmoil and you’d have to think that more margin hikes for futures trading are already in the works after the metal bolted another $50 an ounce higher this morning. Based on how it has traded recently and the intractable problems in both the U.S. and Europe, this sets the stage for more corrections to come that will provide temporarily lower prices for those wanting to trade in their paper money for the yellow metal. Unlike the silver surge this spring, however, it is unlikely that exchanges will be successful in slowing the rise in the gold price for long.

The Labor Market Gets a Goose Egg

The Labor Department reported that the U.S. economy produced a net zero new jobs in August, a figure that was heavily influenced by striking Verizon employees who have since returned to work, however, there were substantial downward revisions to prior payrolls data, all of which indicates that the U.S. labor market remains quite troubled.

The jobless rate held steady at 9.1 percent and the official tally of unemployed workers was virtually unchanged at 14 million. The broad U6 measure of underemployment – including those who have given up looking for work and who are working part-time for economic reasons – rose from 16.1 percent to 16.2 percent.

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