World Of Wallstreet

Jim Sinclair's Dollar Countdown Ends Around November 7, 2009

Jim Sinclair has been talking about a "Countdown To The Implosion Of The Dollar" for quite a while (click here).

Here Jim Sinclair reveals what his "dollar countdown" has been about:

"When Push Comes To Shove

Posted: Oct 27 2009     By: Jim Sinclair     

Dear CIGAs,

October 30th the Fed is planning to curtail QE regarding Treasury auctions.

November 4th is the FOMC meeting most likely to contain discussions of timing for the exit from economic stimulation.

November 7th is the G20 meeting at which BRIC nations will anticipate a cessation of QE and a commitment to establish a currency alternative to the US dollar...

So fasten your seat belts because our long discussed rock and hard place will be reached shortly.

Can the Fed provide the Chinese with their demands of middle July at the USA/Chinese Washington Financial Summit in a deal to buy US Treasuries so as to let the Fed back off their US Treasury instrument auction QE?"

I thought it was interesting to finally find out what he has been talking about with his count down. I have mixed emotions about the guy, but one of the things I like is that he has made specific, testable calls. On the down-side, his "This Is It" and "This Is It And It Is Now" calls have pretty consistently been made at temporary gold price highs (when fear is running at a fever pitch). The way to deal with the gold market is to buy when the fundamentals remain good but when sentiment is bad (like yesterday). Buying breakouts has not seemed to work well (particularly for short plays with tight stops).

MontyHigh, www.worldofwallstreet.us

Unadjusted Year Over Year: Labor Department Initial Jobless Claims Up 9.6%

Here's the scoop on the Labor Department's weekly initial jobs claims report:

• Associated Press Headline And Lead: "First-time jobless claims drop less than expected... The number of people claiming jobless benefits for the first time dropped less than expected last week, evidence that the labor market remains weak even as the economy is recovering."
• Labor Department News Release: click here. 
• Key Numbers: "The advance number of actual initial claims under state programs, unadjusted, totaled 492,456 in the week ending Oct. 24, an increase of 32,026 from the previous week. There were 449,389 initial claims in the comparable week in 2008."
• My Spreadsheet (click Download 20091015yoy).

Here's my uneducated interpretation - No news here. Initial jobless claims were bad again this week and still 100K over the same point in time for 2002. Mid-october 2002 was the Internet Bubble crash's stock-market low and unemployment didn't start falling until Q2 2003 (see graph below). Seems to me that initial jobless claims indicate that unemployment is still rising and will continue to rise for some time. Based on the economy, the stock market is due for a correction, but I'm expecting it to rise on sentiment/psychological factors thru the end of the year. 

 
MontyHigh, www.worldofwallstreet.us

Unadjusted Year Over Year: Commerce Department New Home Sales Down 11.4%, Median Price Down 9%

Here's my quick look at today's Commerce Department New Home Sales:

• Associated Press Headline And Lead: "New home sales fall 3.6 percent... Sales of new U.S. homes dropped unexpectedly last month as the effects of a soon-to-expire tax credit for first-time owners started to wane." 
• Department Of Commerce News Release: click here.
• Key Numbers: New Houses Sold Unadjusted: 31,000, Year Ago: 35,000, Year Over Year %: 11.43. Median Price Unadjusted: $204,800, Year Ago: $225,200, Year Over Year %: -9.06.

Here's my uneducated (also not not spun by guys trying to make you a sucker) interpretation - A bad set of numbers which indicate that perhaps the so-called housing "recovery" is over. I think the housing market is a big illiquid market that trends heavily, so I'll stick with year-over-year numbers for now. I think next month's numbers will be especially telling.

MontyHigh, www.worldofwallstreet.us

Unadjusted Year Over Year: Census Department Durable Goods Manufacturers New Orders Down 19%

Here's the summary for today's Census Department monthly Durable Goods Orders and Shipments report:

• Associated Press Headline And Lead: "Durable goods orders rise 1 percent in September... Orders to U.S. factories for big-ticket manufactured goods rose in September as the biggest jump in demand for machinery in 18 months offset weakness in commercial aircraft and autos."
• Labor Department News Release: click here. 
• Key Numbers: Census Dept Durable Goods Manufacturers New Orders Not Seasonally Adjusted: $176,505,000,000, Year Ago: $213,675,000,000, -17.40%. Census Dept Durable Goods Manufacturers Shipments Not Seasonally Adjusted: $185,889,000,000, Year Ago: $219,940,000,000, -15.48%
• My Spreadsheet (click Download 20091028yoy)

Here's my uneducated interpretation - Unadjusted shipments and orders remain down hard year-over-year, but are getting better year over year slowly. The orders to shipment ratio remains under 100% meaning orders are not coming in fast enough to allow shipments to grow. This is bearish report for the economy, although durable goods are a lagging indicator.

Looking at the graph below, you see that the shipments (year over year) and orders (year over year) are still down hard but improving and are better than the net shipments ratio. I expect that this "improvement" will continue for sometime converging on the net shipments ratio. This will indicate a steady contraction of the economy until they all close in on zero. Based on the current rate of change that will about about January 2011.

AP Spin - no matter how bad the numbers are, AP persists in their spin that some kind of recovery is underway. They refuse to admit the possibility that the economy is still (and could for some time) continue to contract.

MontyHigh, www.worldofwallstreet.us

Best Of The Podcasts: Puplava Gets Bullish With Peru Saxena

I'm probably like you. I've been listening to (and reading) a lot of really bearish stuff for a long time.

I'd say that Puplava's interview with Peru Saxena from this weekend (click here or here) provides a nice contrast which lines up pretty nicely with my previous "Chartworks" post. The interview starts 18 minutes 15 seconds into the mp3. The first two minutes are definitely worth listening to. The part about the yield curve (near the end) which covers when will the "jig be up" for the rally is really, really valuable I think. This is really a good interview, IMHO. Only 11 minutes long. 

MontyHigh, www.worldofwallstreet.us

Weekend Chartworks: Changing My Macro Outlook

Here's what I see in the above S&P chart covering the crash and what follows:

• The absence of volume between 1050 and 1200 operates basically like a gap. There's nobody who can get a sense of relief, psychologically, by selling anywhere in that area. Technically this makes me expect the rally to continue until we get to some resistance (volume of buyers who have been trapped as losers and can feel like they "broke even" by selling.
• At 1222 is the last fibonacci and also the resistance just discussed. I expect serious resistance at that point.
• Generally the chart looks pretty bullish above the 50 and 200 day moving averages.
• The RSI doesn't look overbought at all.
• The volume, while not high, seems steady from June onwards.
• A rising stock market has been good for commodities and precious metals.
• Overall this looks like a pretty bullish chart to me at least for another 10% or so. Party on Garth.

The US dollar is in a nice, steady downward channel that pretty much lines up with the 50-day moving average. Its oversold according to the RSI and could jump up to the top of the channel and the 50-day, but the downward trend looks pretty well established. A falling dollar is good for commodities and precious metals.

The baltic dry goods weekly chart seems to have bottomed. Indicates that global industrial activity has bottomed and is picking up. 

The CCI commodities index has broken out to the upside and is targeting a further rise of another 10% of so. At this point, prices are already up 30% year over year. If/when the target is achieved prices could be up 50% (or more) year-over-year. This, plus the falling dollar, plus the stock market rising on injected liquidity (not earnings) together paints a picture of rising inflation. More about this later.

The copper chart is a really nice looking chart at this point (ok, I've been wrong about copper):

• Breakout above the psychologically significant $3.00 point after consolidating a couple of months. This breakout took place during what is seasonally a weak point in the calendar year.
• It also has a confirmed breakout about the 50-day moving average and is securely above the 200 day moving average.
• The RSI is not overbought.
• By the way, both Zinc and Lead (Pb) are back above $1.00.
• So metal prices are back at the point where miners can make serious profits. 
• I expect I'll buy, in my mother's account, some PCU (nice dividend yielding copper producer).I bought some Fortuna Silver (FVI.TO) this week (a Peruvian silver miner with a lot of zinc and lead byproducts) [hat-tip to Inca Kola News (IKN) news letter which has been recing this stock for quite a while).

The Gold / Silver ratio is trending downward nicely residing securely under the 50 and 200 day moving averages. A falling gold / silver ratio indicates an absence of fear (observe what happened during the end of 2008 when fear was rising). This is occurring while both gold and silver are rising. Together this is another "inflation is coming" indicator.

What can I say about the gold chart that hasn't already been said. Here's some notes from the weekly chart:

• Gold has a confirmed breakout above its all time high with three weekly closes above that high.
• The pattern preceding this breakout is a flat-top triangle formation which targets $1400. I don't know if it will go there or how long it will take, but that is what the chart says.
• The 10-week moving average (and the corresponding 50-day moving average) are at $1000. That leaves a tonne of support at $1000.
• On the daily, tick-by-tick 24-hour a day action I see buying coming in on every dip.
• Reports indicate that the Indians are buying at roughly the $1050 price and we believe the Chinese government is accumulating as much as it can without driving up the price. That leaves immense support for gold.
• Pretty darn bullish.

The HUI to Gold ratio is trending up nicely with the 50 day moving average as support and residing well above the 200-day moving average. This means that large-cap gold stocks are providing leverage (as they "should") and are rising faster than the price of gold. Junior producers / near producers (such as my favorites: Gold Resource Corp, Dynasty Metals And Mining, Troy Resources, Oceana Gold and Apollo Gold) have been enjoying even higher leverage. 

Uranium had an excellent week (and month of October) breaking out above the 200-day moving average, 50-day moving average (earlier this month) and a multimonth trendline. I don't hold any Uranium miners, but perhaps I should.

The crude oil chart looks a little overbought but is trending upwards very nicely (just like the rest of the commodities). I'm not an expert on this but I hear that the short-term fundamentals are not really that good with a decent amount of excess capacity and brimming inventory levels. If my perception is right it fits right into my overall macro outlook.

So, my overall macro outlook is as follows:

• The commodity, inflation trade is "on" with the charts for everything that does well with inflation (commodities, stocks, precious metals...) trending upwards nicely (and the US dollar trending downwards nicely). It looks like it can drive the S&P 500 at least another 10% higher and then we'll see what happens next. The trend is definitely on with no obvious signs in the charts that I see pointing to a reversal.
• I know that there is a strong argument that the USA economic outlook is really dismal, but it appears to me that the rest-of-the-world has bottomed and is recovering (or at least that all that liquidity is flowing into commodities).
• I think that my Jr producer gold holdings (I know, I'm a broken-record) are a great place to be with excellent upside based on pure value (asset and P/E) at anything close to current gold prices and with a very bullish technical and fundamental outlook for the price of gold.
• Although the charts say the inflation trade is "on" and I may start edging back into base metals, I'm more confident with the gold Jrs based on valuation and the technical and fundamentals supporting the price of gold.

Hope you found this helpful. I found it quite helpful for myself. The charts actually paint a much more bullish picture than I had when I started looking at them today.

MontyHigh, www.worldofwallstreet.us

Unadjusted Year Over Year: Labor Department Initial Jobless Claims Up 10.7%

Here's the scoop on the Labor Department's weekly initial jobs claims report:

• Associated Press Headline And Lead: "New jobless claims rise more than expected to 531K... The number of newly laid-off workers filing claims for jobless benefits rose more than expected last week, as employers remain reluctant to hire even with the economy showing signs of recovery."
• Labor Department News Release: click here. 
• Key Numbers: "The advance number of actual initial claims under state programs, unadjusted, totaled 460,449 in the week ending Oct. 17, a decrease of 49,113 from the previous week. There were 416,111 initial claims in the comparable week in 2008."
• My Spreadsheet (click Download 20091015yoy).

Here's my uneducated interpretation - Initial jobless claims were bad again this week and still 100K over the same point in time for 2002. Mid-october 2002 was the Internet Bubble crash's low for the stock market and unemployment didn't start falling until Q2 2003 (see graph below). Seems to me that initial jobless claims indicate that unemployment is still rising and that the stock market is due for a correction.

MontyHigh, www.worldofwallstreet.us

Unadjusted Year Over Year: Commerce Department Building Permits Down 28% And Housing Starts Down 29%

Here's the summary for the Commerce Department's New Residential Construction release:

• Associated Press Headline And Lead: "Housing starts rise in Sept.; wholesale prices dip... Construction of new homes edged up slightly in September, helped by a rebound in single-family construction." 
• Department Of Commerce News Release: click here.
• Key Numbers: New Privately-Owned Housing Units Authorized in Permit-Issuing Places Not Seasonally Adjusted, Aug 2009=51,100, Aug 2008=70,900. New Privately-Owned Housing Units Started Not Seasonally Adjusted: Aug 2009=52,700, Aug 2008=73,900.
• Last Month's Unadjusted Year-Over-Year Numbers: Permits Down 31% And Housing Starts Down 28%

Here's my uneducated (also not not spun by guys trying to make you a sucker) interpretation: House construction is still falling good and hard year-over-year.

MontyHigh, www.worldofwallstreet.us

Unadjusted Year Over Year: Producer Price Index Down 4.8%

Here's the summary for today's Labor Department's producer price report:

• Associated Press Headline And Lead: "Wholesale inflation dips unexpectedly in September... Wholesale prices dropped unexpectedly in September due to lower energy costs, as inflation remains in check amid signs of a broad economic recovery." 
• Labor Department News Release: click here. 
• Key Numbers: Monthly Change In Finished Good From 12 Months Ago (unadj.) = -4.8%, Unadjusted Index = 173.4.
• My Spreadsheet (click Download 20091019yoy)

Here's my uneducated interpretation - Still down hard year over year. Score one for the deflationistas.

MontyHigh, www.worldofwallstreet.us

Off Topic?: Goldman exec named first COO of SEC enforcement

"By MARCY GORDON (AP) – 2 days ago

WASHINGTON — A Goldman Sachs executive has been named the first chief operating officer of the Securities and Exchange Commission's enforcement division."

If that doesn't confirm to you just how desperate a situation the USA is in and how far gone its democracy is then maybe its time to get a clue. 

Doug.................

Gold Resource Corp (GORO.OB) Rant

I found a really nice Yahoo private message board for Gold Resource Corp (GORO.OB) investors. Leave me a comment (where I pick up your email address) if you'd like an invite. There are no bashers. There's a lot of good in-depth information. There's too much enthusiasm.

Someone asked what it was about GORO.OB that sets them apart from the rest. Here's my answer. I'm pretty breathless (don't you think)? Do your own due-diligence. Remember that there are good reasons you don't want to invest like me.

"The thing that really separates GORO.OB from the pack is the targeting of significant dividends. The method of skipping NI43-101 "official" resource definition and going straight to production is also pretty unique. I think they are "good", but they are also lucky. The property is better than they could have expected. The lack of an NI43-101 leaves this as a "hidden asset" which makes GORO.OB a hidden asset play. The dividend target makes it a straight ahead value play. The low cash cost also provides a big margin of safety against falling metal prices.

I've only been in mining Jrs since 2006, but from my experience there:
o have been other companies that found really great deposits and had their stocks sky-rocket (e.g. Hathor (HAT.V) found a really great uranium deposit, Noront (NOT.V) found a spectacular nickel with lots of other byproduct metals). GORO has excellent drill holes with more to come, but has production coming.
o were a bunch of base-metal companies going into production targeting equivalent profits at current prices (e.g. Tamerlane Ventures (TAM.V), CML.V, SRS.TO, etc.) but then base metal prices went down and they never delivered those profits. They never talked about dividends. They also didn't have low enough cash costs to survive a metal price downturn. GORO is different. Its ore is so rich it can make decent profits even when 3/4s the gold miners out there are losing money.

I'd say the closes thing I've seen to GORO.OB is SanGold resources (SGR.TO) which was a struggling gold mine reopener (losing money, diluting all the way) which got lucky and found a truly excellent deposit right next to their mine). Their stock has more than tripled, but they still aren't making profits yet. The news letter writers were all over that one (Jay Taylor and a bunch of other ones). The stockhouse message board was a mess (with endless pumping and bashing). I stayed away because I didn't like the soap opera. Should have bought because it has tripled since I started watching it. SGR.TO has great rocks, has production, but... even they aren't talking dividends. 

If Jay Taylor and a few others jump on board, GORO.OB could see a double just from their pumping. I would think that they would wait until the right time (going into production or waiting for first quarter results with proven / probable reserves on the way with an AMEX listing to follow or something).

Troy Resources has not promised, but delivered and is delivering dividends. But its rocks are not as good as GORO's and they don't have the exploration upside. So again, GORO.OB seems to be unique.

I've got something like 40% of my retirement savings in GORO.OB at this point, so I'm a true-believer. I believe management is great at promoting (isn't that web presentation fabulous?), but that they consistently over-promise on schedule (which cost us that last dilution). As a result, I'm kind of expecting the 2011 limit on Hochschild to bite us leaving us without having produced anywhere close to the targeted first year oz. Getting a mine started and producing properly is hard and most companies have hiccups that cost them a couple of quarters.

Exiting when production is announced and reentering after the first round of problems is usually a good strategy. A 30 or 40% hit is not unusual when the problems show up. I don't expect trade out and back in with GORO.OB because the stock is so illiquid that I'm afraid I won't be able to build up the kind of position I currently have.

I think startup problems could easily happen here. That may let Hoch get control before the stock hits the targets this board is expecting. But if GORO can get some production going, get some genuine SEC approved proven-probable reserves (with lots more coming) and an AMEX listing I expect we'll see a double before that Jan 2011 limitation falls off and releases Hochschild to buy more than 40% and gain control of the company.

Having Hochschild sitting waiting to buy this stock is not really a bad thing. It already got us a double. It should support the stock price going forward. The start of production and more exploration results should also push the price up.

But getting on the AMEX, where the story can be pumped to all those USA investors will be a really big stock price driver. GORO.OB could be a gold stock that a bunch of non-goldbug news letter writers pump to show that they are hip to the gold bull market. The AMEX listing is crucial. Its probably worth a double in and of itself. Its the reason why I think Minefinders (MFN/MFL.TO) has roughly double the P/E ratio of its comparables. To get an AMEX listing, GORO has to get into production and get proven / probable reserves.

Hope this is helpful (sorry for rambling),

MontyHigh"

Year-Over-Year: China Electricity Consumption Up 10%

"China's power usage in September rose 10.24 percent from a year

http://in.reuters.com/article/oilRpt/idINPEK7855420091015

 

BEIJING, Oct 15 (Reuters) - China's power usage in September rose 10.24 percent from a year earlier to 322.41 billion kilowatt-hours (kWh), the China Electricity Council said on Thursday, confirming an earlier Reuters report on power generation."

 

A sign that China is doing ok. Very important for anyone doing resource investing. FWIW, I'm considering starting up a round of fundamental analysis of the Zinc market (which before the crash was supposed be in a deficit in 2011) and zinc miners.

 

MontyHigh, www.worldofwallstreet.us

Here's my graph of China electricity consumption since I started keeping records:

Unadjusted Year Over Year: Labor Department Initial Jobless Claims Up 10.8%

Here's the scoop on the Labor Department's weekly initial jobs claims report:

• Associated Press Headline And Lead: "514K new jobless claims; inflation remains muted... The number of newly laid-off U.S. workers filing claims for unemployment insurance has fallen to the lowest level since early January, a sign the labor market is slowly improving."
• Labor Department News Release: click here. 
• Key Numbers: "The advance number of actual initial claims under state programs, unadjusted, totaled 503,973 in the week ending Oct. 10, an increase of 51,919 from the previous week. There were 454,065 initial claims in the comparable week in 2008."
• My Spreadsheet (click Download 20091015yoy).

Here's my uneducated interpretation - Big pop in unadjusted year-over-year initial jobless and the year-over-year jumped to +10.8%. This was a bad week for the economy and for unemployment in particular. The economy is still in a state of contraction as I see it from these numbers. Initial jobless claims are still roughly 200K per week higher than the "good times" (say 2005, 2006) and are still about 100K higher than most of the previous "bad times" (2001 and 2002).

MontyHigh, www.worldofwallstreet.us

Unadjusted Year Over Year: Consumer Price Index Down -1.3%

Today we cover the Labor Department's Consumer Price Index release from a year-over-year perspective:

• Associated Press Headline And Lead: "US inflation up modestly in September... U.S. inflation pressures remained modest in September even though gasoline prices edged higher." 
• Labor Department News Release: click here and here.
• Key Numbers: The unadjusted index is at 215.97. Same month 2008's press release held 218.783.
• Last Month: -1.4%
• My Spreadsheet (click Download 20091217yoy)

Here's my uneducated (also not not spun by guys trying to make you a sucker) interpretation - We are now getting to the interesting point where we see whether the deflationists or inflationists are right. As you can see below, crude oil is now higher (by 4.81%) than it was a year ago. At this point I expect crude to stay relatively strong and for consumer price inflation to start picking up.  

 

MontyHigh, www.worldofwallstreet.us

Unadjusted Year Over Year: USA Retail Sales Down 5.44%

Here's the year over year summary of today's Commerce Department's retail sales figures:

• Associated Press Spin: "US retail sales down after auto program ends... U.S. retail sales declined in September by the largest amount this year as car sales plummeted following the end of the government's popular Cash for Clunkers incentives program. But outside of autos, sales were better than expected." 
• Commerce Department News Release: click here. 
• Key Numbers: Commerce Department Retail And Food Services Sales Unadjusted August 2009: $333,360,000,000 vs July 2008: $352,554,000,000. Last month unadjusted year over year was down 5.85%
• My Spreadsheet (click Download 20091014yoy)

Here's my uneducated interpretation - Still down hard year-over-year in the 5% range. The monthly low (adjusted) was Dec 08 at $336,438,000,000, so if the recovery is real we should see a positive year-over-year value in the next 3 months. 

MontyHigh, www.worldofwallstreet.us

Junior Gold Miners I Like

In this post I give you the "good stuff", the results of my fundamental analysis of Jr Producing Gold Miners. I have been keeping this list up-to-date with information from the companies as they produce it, but have not spent a lot of effort searching for new names. The ones I like are so undervalued that they should very likely produce very good returns provided my macro view is correct. That view is that the price of gold should be well-supported at current levels.

I believe that the combination of due-diligence effort summarized in these tables together with an ability to invest in these smaller companies and my hopefully on-target macro view is my "edge", what allows me to expect superior investment returns. Of anything I put on this web site, this is what I think has the most value. My entire portfolio is invested in the stocks covered in this post.

The following charts are all based on last Friday's prices and assume $1000/oz gold and $16/oz silver.

Here's the table for "mainstream", well-run, mid-tier producers that I compare my holdings (and candidates for holding) to. These are Alamos Gold, Minefinders and New Gold. As you can see, at the assumed gold and silver prices these miners have very attractive price to EBTDA (and price to operating income) ratios. The stocks I like (and hold) are all even more attractive.

The table that follows has my favorite gold miners. Each of these holdings constitutes more than 10% of my investment portfolio. As you can see, they are all undervalued relative to the reference miners above. They all can expect, if they meet their guidance, to "grow up" to the same relative size as the reference miners and eventually receive a comparable valuation.

Gold Resource Corp (GORO.OB) - my top holding. I really love the superior ore grades (which should result in a very-low cash-cost) and the stock-holder friendly management which is "targeting" one-third of operating cash-flow to dividends.

Troy Resources (TRY.TO) - I really like the stock-holder friendly management which has a record of delivering dividends to its stockholders.

Dynasty Metals And Mining (DMM.TO) - Dynasty has superior rocks (ore-grade) and a lot of it. I know there is political risk with its Ecuador location, but I think the valuation overestiamtes that risk.

Oceana Gold (OGC.TO) - While having significant debt, I like Oceana Gold purely on the basis of its valuation. Where else can you find an estimated price to EBTDA ratio of 1.5 from a mid-tier producer.

Here's the stocks that I hold, but which I have smaller holdings. I find each of them attractive, but not as attractive as my favorites above. The stocks are Minera Andes (MAI.TO), Apollo Gold (AGT, APG.TO), La Mancha Resource (LMA.TO) and Semafo (SMF.TO).

Finally, here are some other miners I like but do not hold. The three I'm watch most closely are CGA Mining (CGA.TO) which isn't quite undervalue enough, B2 Gold (BTO.TO) where I don't like the political risk associated with their exploration properties and Rusoro Mining where I don't like the political risk of Venzuela. I used to hold Capital Gold Corporation (CGC.TO) and Castle Gold (CSG.V), but I have given up on their "growing up" and getting the same kind of valuation the reference miners get.

I hope you find this post of use. I've shared my best stuff with you.

Leave me a comment if you think I left out your favorite holding and give me a profile of what you really like about your favorite.

MontyHigh, www.worldofwallstreet.us

P.S., This post does not constitute an investment recommendation. Every one should do their own due-diligence before investing, especially in relatively risky Jr mining companies like these.

Best Of The Boards: Comment On The LME Failure To Deliver Gold

I guess you've heard about this juicy story regarding counter parties to a gold futures delivery not having the gold to deliver (click here): 

Here's a nice pair of comments from my favorite precious metals board (click here for the whole thread):

RE: LME asking 2 big gold longs to take cash (25 % over) rather than physical

"If I was squeezing the big boys I'd take the money, find someplace to hide and hope that I was still alive in a year."

I agree. I read a recent book review re: memoirs of Heinrich Mueller, only Gestapo leader never found. Purported to have been hired by the U.S. to help create the CIA after WWII. He reportedly had his own personal assassin. Six snoopy journalists asking too many questions met their maker in this way.

Hope you enjoyed this whole story with the comments. I know I did. Can't claim I believe it, but I enjoyed it. I love the layering of conspiracy story on top of conspiracy story.

MontyHigh, www.worldofwallstreet.us

Unadjusted Year Over Year: Labor Department Initial Jobless Claims Up 5.3%

Here's the scoop on the Labor Department's weekly initial jobs claims report:

• Associated Press Headline And Lead: "New jobless claims fall to 521K, lowest since Jan... The number of newly laid-off Americans filing first-time claims for jobless benefits fell to the lowest level since early January, as layoffs eased a bit amid a fledgling economic recovery."
• Labor Department News Release: click here. 
• Key Numbers: "The advance number of actual initial claims under state programs, unadjusted, totaled 449,375 in the week ending Oct. 3, an increase of 3,757 from the previous week. There were 426,789 initial claims in the comparable week in 2008."
• My Spreadsheet (click Download 20091008yoy).

Here's my uneducated interpretation - Unadjusted year-over-year initial jobless claims resumed their downward march this week because of an increase in last year's jobless claims. The economic contraction is no longer accelerating, but is still in a state of contraction as I see it from these numbers. Initial jobless claims are still roughly 200K per week higher than the "good times" (say 2005, 2006) and are still about 100K higher than most of the previous "bad times" (2001 and 2002). 

The AP spin continues as it emphasizes how things are getting worse more slowly than earlier when the the real story is that nearly 2 years into this downturn things are still getting worse more rapidly than they were throughout the entire dot-com crash downturn.

MontyHigh, www.worldofwallstreet.us

Underemployment: Wasn't That One Of Argentina's Problems?

This graph (with a different view on USA unemployment / underemployment data) provides more data pointing to the USA having a financial crisis like 2001 Argentina (hat tip to IncaKolaNews and of course the creator of the graph, Econmpic):

As you may recall, the genuine crisis in Argentina hit when the long-term interest rates vaulted higher and then the peso collapsed. Because the US Fed controls interest rates (and is buying down long-term interest rates), I expect the USA financial crisis (the real one, not what we've had so far) to begin with the US Dollar losing support. Keep an eye out for that, willya?

MontyHigh, www.worldofwallstreet.us

Unadjusted Year Over Year: Labor Department Initial Jobless Claims Up 13%

Here's the scoop on the Labor Department's weekly initial jobs claims report:

• Associated Press Headline And Lead: "New US jobless claims rise more than expected... First-time claims for jobless benefits increased more than expected last week in the U.S., a sign employers are reluctant to hire and the job market remains weak."
• Labor Department News Release: click here. 
• Key Numbers: "The advance number of actual initial claims under state programs, unadjusted, totaled 443,694 in the week ending Sept. 26, an increase of 5,878 from the previous week. There were 392,515 initial claims in the comparable week in 2008. "
• My Spreadsheet (click Download 20091001yoy).

Here's my uneducated interpretation - No real change this week. The year-over-year initial jobless claims are definitely less bad than the Q1/Q2 economic collapse, but are still really bad in absolute terms. But... they are still roughly 200K per week higher than the "good times" (say 2005, 2006) and are still 100K higher than most of the previous "bad times" (2001 and 2002). I think, despite the fact that the USA economy is about to print a single quarter of positive GDP, that the USA economy is still contracting.

This leaves me bearish about stocks relative to the price of gold. As I see it, the most likely way for the USA stock market to stay high (or go higher) is if the FED prints a bunch of money which inflates another stock market bubble. The fundamentals apart from inflation (real earnings or better yet dividends or stock buybacks) do not support current market valuation in my opinion.

MontyHigh, www.worldofwallstreet.us