Tuesday, February 28, 2012

Gold, Oil And Iran -- What Could Be Better?

I found this useful link -- very readable, very logical:


A most excellent piece, easy to digest.  This is the first logical explanation I have seen how Iran could convince other countries to pay in gold.  By offering to take much less gold than the current market price (paper gold price) would imply!  Instead of offering 17 barrels of crude for each ounce (which India would be stupid to accept), Iran could prove gold's REAL VALUE by offering 300 barrels / oz...  There would be takers for that!

Outstanding article.  Must read.

Saturday, February 25, 2012

Robert Goes To An Art Exhibition!

We were invited to come to an art exhibition by the owner of an art gallery, our friend Naydu Commenoz.  Her Commenoz Gallery has been in Key Biscayne longer than we have been living here in South Florida.  She specializes in Contemporary Art.

Please allow a disclaimer: My knowledge of contemporary art is almost zero.  Another disclaimer: Me at an art exhibition is like throwing a fish into the boat, I almost do not know what to do other than flop around…

The exhibition (called “Travel Tales”) was to promote two artists: painter Joaquin Gonzales and sculptor Phillip Stapleton.  The exhibition took place on Thursday, February 9.  If I had to guess, I would say there were something over 60 people there on a gloomy and rainy evening.  Here is a photo of the artists and Naydu:

From left to right are Phillip Stapleton, Naydu Commenoz and Joaquin Gonzalez.

Below is a photo taken when there were a bunch of people looking around:

Hey, single fellas!  More women show up to art exhibitions then men do, hey, ya know just sayin’…


The exhibition was a great success…  Naydu herself told me that she sold some pieces that very evening.  Moving product, now that is success!

The Art Critic for “El Nuevo Herald” (the Spanish edition of The Miami Herald) even came by.  Mr. Carlos Luis (the critic) wrote a glowing review of the paintings of Joaquin Gonzales.  Mr. Luis has followed this artist for some time and liked what we saw that evening.  Mr. Luis wrote about all this stuff HE saw in Gonzalez’s work that I missed, but he IS an art critic…

Gonzalez paints abstract paintings about things he sees in the eastern Peruvian jungles and essentially all of them were his takes on the natural beauty he has encountered there in the Peruvian Upper Amazon.  The below photo shows two of his pictures (“Musica Amazonica” (right) and to the left “Pesca” – latter means “fishing”):

Soon after securing my first glass of wine, I went to examine the art on display.  At that moment, I knew nothing about either artist.  Eventually I arrived at a painting called “Rio Ucayali”, a major tributary of the Amazon (in fact, the name of the Amazon River “starts” where the Ucayali and the Marañon join near Iquitos, Peru).  Seeing that name “Rio Ucayali” sent a jolt through me, as I had been on that very river in 1981 during my first trip to Peru (same trip where I met the girl who went on to become my wife).  I immediately thought: “man, do I need to meet this guy!”  So, I asked Naydu to point him out to me.  And then I went over to converse with Mr. Gonzalez.  We talked in Spanish, and I told him about my experience on that river.  He then replied that ALL of his paintings there were about nature in that part of Peru.  And that he spends lots of time there.  He and I then shared a smile when I told him about how pretty I had found the native Shipibo women were back in 1981…  We went on to talk about Peru and various things he looks for to inspire him in his work (one of which is legal in Peru, but let’s leave it that, OK?).

The below picture shows three more of his paintings: “Mujeres” (“Women”, so yeah I believe him when he said he thought the locals were pretty…), “Calor” (“Heat”) and “Rio Ucayali”.

That picture “Rio Ucayali” may not look much like a river, but it is of course my favorite, having brought that trip back to life for me from over 30 years ago…

If you look at his paintings, there are certain motifs that recur.  These are natural phenomena (birds grouping together in the evening) and instruments (fish traps for example) that the natives there use.


Also introduced there at her gallery were some sculptures of Phillip Stapleton (hey, Steve, Vicki and Caroline, I did not get a chance to ask him if he was one of those Stapletons, LOL…).

Stapleton (who was not discussed in Carlos Luis’s review) makes creations out of old appliances and other familiar objects, here is his “Cricket”:

He also had a fun “Dragonfly” on display, but I do not have that picture.


Any of you coming to the Miami area and who are interested in art should consider a short trip to Key Biscayne to see these artworks.  The show runs until March 15.

Commenoz Gallery
328 Crandon Blvd., # 218
Key Biscayne, FL  33149

Review of Barron's, Dated 27 February

This weekend I again bought the latest issue of Barron's, and without further ado I start by commenting on the Cover Story ("The Fight Against Alzheimer's").  Alzheimer's is a terrible disease, and those of you who have seen a loved one (like we have) die of this affliction, you already know.  My mother's Aunt gradually forgot who her relatives were...  She for got who my wife was (we had been married about 14 years at that point).  At the end, she forgot even who her own son was...

Because of the agony this disease produces, among the five million sufferers and their families here in America, the pharma companies have obviously been looking into finding a cure or a way to stop the disease from advancing. Any significant advance in treating Alzheimer's would be a huge boon to our economy, and relieve huge burdens upon families of Alzheimer's victims.

The disease is not well understood by scientists, so the two new drugs being investigated may very well yield no important advances.  The two drugs now in Clinical Trial Phase III (the step before FDA-approved clinical trials, so at an advanced stage of testing are Bapineuzumab made by Pfizer (PFE) / J & J (JNJ) / Elan (ELN) and Solanezumab made by E. I. Lilly (LLY).  There are some other drugs that are in earlier stages, but these two are the furthest along.  Despite both drugs ending in "-zumab" and both with the intent of clearing the brain of a plaque (but that plaque still has not been proven to shown to cause Alzheimer's), they work differently.

Alas, outside analysts put the odds of success for EITHER drug at 50% or less.  There is still a LONG way to go before Alzheimer's is conquered...


Alan Abelson suggest that you "Curb Your Enthusiasm" in his latest piece.  He starts off by picking on France again (it seems that a "Miss" no longer has to be addressed as "Mademoiselle", she can be a "Madame" now).  Leave it to a coalition of President Sarkozy and Les Chiennes de Garde (The Female Guard Dogs -- yow!!!) now have made it possible for an unmarried lady to NOT have to disclose that fact...  He then glides into the perilous state of the superstate of Europe and how the PIIGS are pulling Europe into recession, led by Greece (who else?) scheduled for a nasty -4.3%economic decline this year.  Europe also faces having to roll over more than 2 trillion euros of debt this year, approximately $1 trillion more than we do...

Abelson then goes on to take another look at the fairly positive statistics that have come out of late, especially noting David Rosenberg claims that the January happy number housing report was really high because of the mild winter.  Abelson then goes on to note some BAD things (Europe going into recession, again) and high oil prices ($4.159 / gallon for premium gasoline at the two nearest gas stations).


A nice little cartoon with a sign in front of a little B & B: Louisa's Bed and Fiber Breakfast Inn is on Page 10 of my edition.  It brought a smile, OK?!


"He Said:"

He should just write a check and shut up... If he wants to give the government more money, he's got the ability to write a check -- go ahead."

-- New Jersey Governor Chris Christie

Yeah, Warren!  STFU and write the damn check!  Check out Zero Hedge's Master PhotoShopper WilliamBanzai7's take on the American Oligarch (along with The Limerick King's latest -- these guys have had a couple of nice join ventures over there):

williambanzai7's picture

Warren is talking his book
A guy who sure knows how to cook
A thousand lies told
About owning gold
Another American crook!
The Limerick King

On the same page are comments about a new book on etiquette in our new era: Would It Kill You to Stop Doing That?, by humorist Henry Alford.  Yes, he did consult with "Miss Manners."


Beverly Goodman ("Fund of Information") writes of the rather surprising SEC interest in high frequency trading ("HFT"), often blamed (still not proven though) for the "Flash Crash" on May 6, 2010 (you may recall that day, the stockmarket dropped 9% in minutes.  It seems that internet porn surfers have finally (yes finally!) are finally taking a good hard look.  But, any ideas at this point are vague.  And the notion that HFT is bad is still unproven (however if there is SO MUCH HFT going on, SOMEBODY must be making a lot of money).  Perhaps it helps to remind you that 70% of all trading on the stock exchanges are HFT: robot vs. robot.


Mark Veverka ("Plugged In") notes that Microsoft will roll out their new Windows Version 8 at the Mobile World Congress (cell phones and similar). They will be using other chips than Intel's and AMD's for handsets and tablet computers...


Leslie P. Norton interviews the very interesting and informed Jeremy Grantham.  Grantham is gloomy abhout the next seven years!  He sees sub -normal growth because so much is over-priced now.  The interview alone is almost worth the $5.00...  Here's about all that he likes:

"I'm very partial to land.  It's the key to building up long-term wealth... I like stuff in the ground -- metals, hydrocarbons, oil, even natural gas."

Much of that I agree with.  But, land is immobile and can be taxed.  Bad government could seize resources, even underground ones...

(Grantham agrees with my friend Eduardo P. here in the town where I live, he says his family never sells any land or property...)


Jim McTague ("D. C. Current") writes that internet poker is not likely to become legal anytime soon.  Which may be just as well.

Recently I was in a casino after eating a birthday dinner (mmm, steak, wine, Caesar Salad).  I lost five bucks to a computer blackjack machine while waiting on a drink.  And my own Mom told me to go gamble a little!  See what happens taking your Mom's advice sometimes?


Once again "CEO Focus" (by Lawrence Strauss) turned out to be very interesting.  Strauss interviewed relatively new CEO of Southwest Airlines Gary Kelly, who took over 8 years ago from famed Herb Kelleher.  It seems that Kelly has kept Southwest profitable even through all of the financial turbulence of the past few years while keeping to their successful model of using just Boeing 737 jets and their "point-to-point" flying model all the while keeping their employees happy and jokey to their fliers.

Our daughter tries VERY HARD to ONLY fly Southwest...


Gene Epstein, for the first time I have EVER seen in Barron's asks the biggest question of them all (well one of the biggest): "Is the Fed a Failure?"

WOW, that's really something.  "Economic Beat" economist Gene Epstein considers George Selgin's work (U. of Georgia) and wonders:

"It will provoke us all to ask the heretical question: Should the Fed's 100th birthday be its last?"

This is the best piece I have read by Epstein.  Keep questioning, brother!


Editor Thomas Donlan makes a really good case that Obama's latest tax machinations (lower corporate tax rate, but raising tax rates in other places) is completely misguided.  I completely agree.  If Obama wants corporations to invest here int he USA and create jobs, here are his five sensible suggestions:

1)  Eliminate the corporate income tax altogether, it is a myth that WE do not pay it...
2)  That would make our taxation more transparent to us taxpayers, clearly a good thing
3)  Cripple the ability of politicians to steer capital to their favored business chums
4)  Force half a million accountants and lawyers to find added-value work...
5)  Eliminating tax-driven preference for debt financing

Here's a great quote by Donlan:

"Now the president is running as a corporate-tax reformer.  He sends out his financial twerp Tim Geithner to denounce the distortion of the allocation of capital."

Priceless, Mr. Donlan, H/T to you sir.


In the Market Week section on Page 4 a company called Darling International (DAR) is discussed.  These guys take rendering plant waste from slaughterhouses as well as cooking oil and baking waste and turn them into more usable products.  What drew my interest is their new joint venture with Valero Energy (VLO) to refine 9300 barrels of diesel fuel per day...


Marshall Eckblad writes at "Commodities Corner" that lumber may be on the comeback trail!  Economic stats are up, and maybe housing is moving off its bottom.

Well, maybe so, but I'll stick with gold.


Not much in the Classifieds this week.  An Oklahoma oil well(s) producing 2000 barrels per day.  Some wind turbine patents are up for sale as well.


I end with my usual money reporting.  Clearly the Federal Reserve is fighting as hard as possible to delay holding a Total of over $3 trillion on its balance sheet.  Total was down a miniscule $663 million (confirm that: million).  Current total: $2,977,971 million (or $2.977 trillion).  It will not be long until the Banksters have to fess-up and show us the lousy money they hold, all $3 trillion +++.

M1 and M2 virtually unchanged.
Currency in circulation up up over $7 billion (some 0.7% in a week)
Monetary Base up 1.8%

And, drum roll please, The Mighty Peruvian Sol is up again vs. the US$!  Up a small 0.2%, but a win is a win!

Verdict:  Yes, buy this issue if you liked anything discussed above.

Tuesday, February 21, 2012

Platinum Is Coming Back!

Check out the above precious metals widgets.  Platinum is now some $56 (21 Feb 2012, 21:10 ET) less than gold.

I believe that not long ago Pt was some $150 or more cheaper than Au.

I have not seen any commentary on this yet, but I'll go take a look around...

For A Change, Some Good Stories About Young Adults Today!

In this "maybe getting better economy" it has been fairly rare for me to run into good stories, that is, someone I hear who has GOOD things happen to them!  Actually today I will discuss four young people who have done well, even while graduating from college since the financial crisis hit in 2007 (people may argue the year, but 2007 was when the Bear Stearns hedge funds failed, the first of the dominoes to fall...).

First up is the case of our own daughter!  She graduated in 2009, that infamous "Class of 2009", so full of new graduates who had a very hard time finding work with the economy in full blown recession.  She did have a hard time finding work, but got a crappy job in the wine business (she loves fine wine).  It was essentially an outside sales job that paid poorly.  After a while she quit that to land work as a paralegal, it paid more.  But, the office atmosphere was not good, the attorney who owned the firm was a real martinette, a real cocky SOB who made it a point to tell his paralegals that they had no decent future there...  So, she moved to another city, and in in a couple of weeks found a MUCH better paralegal job for more money and better benefits (and lots of vacation for a young person).

The second case is my niece, our daughter's first cousin and just one year older.  She is the one who got married not long ago.  After she graduated from college, she went to law school, and before she finished she already had an offer from the Comptroller of the Currency...  She's all set...

In a similar way, the daughter of my friend John landed a job with .gov as well (as an accountant).  She also graduated at a difficult time, but now is working to as a forensic accountant to root out fraud in government contracts.  She is one for the few government employees who is ACTIVELY WORKING to SAVE taxpayer money.  If I understand my friend correctly, she makes good money too...  Congratulations John!

Finally, the Good Story I heard just an hour ago comes from Harvey, the service consultant here at the Dealer where I have brought my vehicle in for service.  We were chatting, and he told me the wonderful story (and hence sparking THIS blog piece) of his brother-in-law, who will be graduating from U. of Florida this spring.  He is double majoring in International Finance and Economics, and is fluent in Spanish.  His grades are VERY GOOD, he even got a "free ride" as a Florida resident -- our state offers very bright kids a free ride if they go to a state university (as opposed to going to Harvard, Yale or Princeton, in that order, as they used to say at my prep school).  Harvey told me that this kid grew up POOR in Miami, his dad ran off and he could have gotten into trouble very easily...  (Miami is not really a good place to grow up)  But, the kid studied his butt off, and now will be going to work for a BIG bank here in Miami with a starting salary of $90,000 / year.  This is a success story if I have ever heard one.  Growing up poor and in a broken family in America's poorest city, and yet going on to have tremendous success at 22 years old.  Amazing.  Congratulations Harvey!  Harvey played a major role in keeping his brother-in-law on the straight and narrow.


The above four stories should give young people with energy, brains and the will to work some hope that they too can be successful even in this dubious economy.

On the other hand, while talking just now with my friend John, three of the above four success stories got jobs with the GOVERNMENT or a BANK!  Hmm......

Monday, February 20, 2012

Dis And Dat

I start today's offering with some items from friends from Facebook.  As I write, I do not know if this will copy into here, whether you have to be a Facebook member, and so on.  Education...

Thanks to Cousin Maria for putting up "The World According to MICHIGAN"!  Ha ha!  Thanks, Maria!

Cousin Maria also put this one up:

One more photo from Cousin Maria, this was taken when she was a young girl, that's her on the right on the sofa, my Uncle Val and Aunt Betty adopted a SLEW of children, they were practically saints.  This photo is from their house in Michigan (from about 1970), it brings back many memories:

Oh, I really hope this below link works, it will take you to my friend Matt's Annual Shootfest!  Each year he sponsors a shootfest where people bring their armaments and have a blast!  Hey, Carmen my love, can I go next year?  Please?  Thanks Matt!  Great pictures!


Ahh, too bad, it looks like you have to be a member of Facebook to see this, maybe even a friend of Matt!

Well I WAS  able to copy two pictures in to give you a flavor...

 ·  ·  · 21 hours ago · 


Here are two fun gun videos, there are thousands of these on Youtube...  Notice how much fun WOMEN have shooting guns...




I spent some time last night looking into a GIANT CONSPIRACY THEORY!  This all generally revolves around "Yamashita's Gold", and related conspiracies.  According to various versions of this, there is a whole lot of gold (exactly where is not crystal clear) buried in such places as The Philippines and Japan.  This would be gold that was hoovered-up (mostly from China I gather) by the Japanese in their rampage through Asia in World War II.

This grand conspiracy theory has many tangents shooting off in different directions.  Some (lots!) of that Japanese gold was shipped HERE to the USA (before Pearl Harbor was attacked).  Or maybe not!

There are huge stashes of gold (and other precious things) buried at locations (called "777" locations, based on Yen value and other things)!  In The Philippines!  In Japan!

Indonesian leader Soekarno and President Kennedy were working out a Deal where Soekarno would be the Custodian of (some / lots) the gold!  And you know what happened to President Kennedy!

But, the BIG HOOK of this general conspiracy theory: No, the amount of gold stashed away in the world is NOT the normally acknowledged 160,000 - 170,000 metric tonnnes, but is actually a majestic 2,000,000 metric tonnes.  Because, you know, the Japanese sucked up a LOT of gold!

Curious?  Take a look.  But, "Abandon Hope All Ye Who Enter Here":



FOFOA has a new article up at his blog.  He takes on Uncle Warren (Buffett)!  How dare that toady say such bad things about gold!

But FOFOA takes care of him, even takes out the trash when he's done.


Saturday, February 18, 2012

Review of Barron's, Dated 20 February

My Saturdays have swung into a new rhythm since starting Italian class (I hope that I am not treading into "Facebook-iness" here...).  We now are eating our sandwich "on the road" after class before we run the usual string of errands.  But this means we arrive home later than usual, and typically more tired.  Barron's almost put me under again this week (about 1/3 of the time I fall asleep there in my lounger on Saturday afternoons...

The Cover Story ("A Game Plan for HP") and is author Tiernan Ray's take on new leader Meg Whitman.  Hewlett-Packard (ticker HP) has had rough sledding over the past several years, from being an engineering-driven company (remember those "Reverse Polish Notation" calculators they came out with about 1973, the first ones that could do math like trig functions, but they costed $400?) to a printer-oriented one, then they bought Compaq and became a commodity PC business, then bought two software companies for $23 billion dollars...

While HP is number one or number two (by sales) in various of its segments, Ms. Whitman has a big job ahead of her. The author suggests that she commit to staying there for the five years he feels the company would need to be turned around.  He likes Meg's commitment to more R & D.  And that she is a good CEO with a (possibly) talented team around her.  But, in the end, the author likes HP's competitors better (Cisco, IBM, Oracle, EMC and Apple).


Alan Abelson's column, always one of my favorites, was full of surprises today.  The first topic he took on was the Sports Illustrated swimsuit issue and how that affects the stock market.  It seems that when an American cutie is the on the cover, well the stock market just does better than if it is a foreign gal...  He finishes his comments with the observation that no matter what the stock market does, well you have the magazine that you can leaf through...

Abelson then moves, slyly, onto surprising ground.  Namely saying bullish things because of recent (past several months) data showing good things happening to the American economy.  He notes a PNC Financial Services says that JOBS have been increased.  So, the economy is going in the right direction!  AAGH!  About gave me a coronary becoming a bull there, Alan!

Alan then immediately backpedals on his uncharacteristic bullish comments after chatting with Ethan Harris, an analyst at Bank of America Merrill Lynch.  It seems that this $26 billion deal reached between the states' attorneys general and the banks will lead to a jump in foreclosures...  Which is likely needed and better in the long run (to get it over with), but will lead to short term pain.

Whew, Alan!  Felt like I'd damned near died!


Michael Santoli ("Streetwise") chronicles a pretty decent start for the stock market so far in 2012.  We are already up the 8% gain to (S&P 500) 1360 as foreseen last December by Barron's.

He goes on to note that the rest of the year may not be so rosy, even with all the QE-ing coming up...


On Page 16 (my edition anyway) there is a nice little article titled "Desperately Seeking Dollars".  It seems that Iran and Argentina have joined ranks with Italy to keep their money from leaving the country.  Iran is talking about executing people for speculating with US dollars.  Argentina has taken a page out of Italy's handbook and has employed currency sniffing dogs to help keep its currency from getting even weaker.  Other countries recently slapping on capital controls (to keep money from leaving) include Brazil, Turkey and South Africa.

That is not good, of course.  If you start hearing talk about that happening here, uh..........


He Said:

"It will help level the playing field for businesses and the government to collect needed revenue while promoting economic growth."

-- Treasury Secretary Timothy Geithner (on the tax reform plan)

What!?   He is obviously lying or crazy to think that raising taxes is a good thing.  If they take the capital gains tax up and the dividend income tax rates up, that will KILL the equity markets.


Myriam Gottfried writes a positive article on lender CIT Group (CIT) that not long ago emerged from bankruptcy.

No thanks!


Mark Veverka ("Technology Week") writes that new CEO at Apple (AAPL) Tim Cook looks like he is pretty good boss!  The people working there seem to like him, he is promising to root out any bad labor practices at big supplier Foxconn (in China) and is even open to the idea of paying a dividend to shareholders (something Steve Jobs always rejected).  A new version of its operating system is due out this summer, and it will allow better iCloud integration.  iCloud?  New one for me!  Apparently the market is OK with Tim Cook, AAPL is still holding its share price over $500 (boy did I miss not buying those two: AAPL and GOOG...).


Leslie P. Norton has a very interesting interview with Hugh Hendry (of Eclectica Asset Management, in London).  I have seen articles and commentary at Zero Hedge that are by him and/or write about his, but this is the first time I get a feel for the guy.

Eclectica had a 12% return last year, clearly better than the 0% for stocks as a whole, and one of their hedge funds was up 46%.  He was one of the first to describe the property bubble in China (empty skyscrapers in Wuhan in 2009, he made a YouTube video out of it, I suppose that would be easy enough to track down).

They made a fair amount of money buying CDS (!) on Japanese companies, seeing pricing anomalies (no details, alas).  He thinks that all the concern over INFLATION is overblown, that (shorter-term) that DEFLATION is the bigger threat.

He sees danger everywhere though (so why does he buy CDSs?).  He thinks that the Greeks will eventually elect someone who promises to take them OUT of the Eurozone.  He expects "pathological swings in investor sentiment".

Eclectica is modestly bullish in equities, some fixed-income and VERY BULLISH on agricultural related investments (commodities, fertilzer and farm equipment).

While what he is up to is difficult to understand, IMO this interview is worth the $5.00 plus sales tax alone...


Jim McTague ("D.C. Current") and Gene Epstein ("Economic Beat") both write on politics and the economy on the same page.

McTague (as far as I can tell) is non-partisan in his view of the new Budget (note that Congress has not approved a SINGLE Obama budget yet!), but says that there is a lot of massaging of the numbers (no!)...

Epstein comes with an index showing indicators that Obama may have a hard time winning based on the historical indicators showing re-election vs. the numbers.


Dimitra DeFotis writes a bullish piece on Donnelly (RRD), the big printing company (trvium: Donnelly claims to have published the first phone directory).  They are BIG (569 printing centers, 1/3rd of them overseas) and the company offers a 7.7% dividend yield with a low P/E of 7.6.

Printing is not going away, and RRD is likely to be a survivor.  This may be a good stock to look at, 7.7% yield and all...


In the Classifieds this week I found some nice little nuggets.  One Sandy Lane is still for sale, they changed the header of their ad to: "One of a Kind -- The Most Luxurious Residences (es?) in the World".  Maybe the seller is asking for too much money...

42 tracts of farmland are for auction in Colorado and Kansas on March 14 (www.farmandranchrealty.com) ranging from 80 to 1600 acres each.  A low sulfur coal mine is for sale in West Virginia (fjm@energyweb.com).  Those lawyers sueing on behalf of clients harmed by the financial crisis are still looking for money and promising 10% (total market damages: $45 billion), if you want details email James at jmitchell@abbingtonpartners.com.


Thomas Donlan writes about how bogus (my word, not his) the proposed heathcare mandates are being proposed by President Obama.


There is a Special Section on America's Top 1000 Financial Advisors.

Yes, Ric Edelman ("that's rice delman dot com" on the radio ads) is there.  But, instead of listing them in national order, they break it down by states.  Ric Edelman is No. 1 in Virginia where his company's HQ is (in Fairfax actually, a small city I used to know reasonably well when living there up north).

I will not comment further of the Special Section, because if you are trying to decide whether or not to spend $5.00 (plus sales tax), then you clearly do not have enough money to sign on with these guys (high account minimums).


In the Market Week section, we are advised that the Dow is at a 52 week high.  Lots of bullishness out there seems to me.  On the other hand, I have MISSED many of these gains by being mostly on the sidelines.

In the "always important to check" "Commodities Corner", Tatyana Shumsky writes about TUNGSTEN prices soaring!!!  Yes, tungsten (the metal that is within 1% of being as dense as gold) is traded, but not in the futures market.  Tungsten is traded in ammonium para tun(g?)state, a powder.  This material trades around $420 per metric ton (I imagine the tungsten part of that compound is some 90% of the weight) so that would price tungsten metal at roughly $0.18 / lb.  CHEAP!  Most tungsten comes from (where else) China.  But, two Canadian companies produce the metal:

  • Malaga (MLG.Toronto) produces it in Peru!
  • North American Tungsten (NTC.Vancouver)
Both are "penny stocks"...  China is cutting back on tungsten exports (tungsten is very useful in the military...) and so tungsten supplies are tighter.  

Maybe China is also keeping some on hand to, well you know, make up some fake gold, hey, at 18 cents per lb...

I do have a bone to pick with her on tungsten though.  She says it is the second hardest substance after diamonds...  Maybe the second hardest ELEMENT, as I believe titanium nitride is harder and tungsten (something) is as well.  If I can track her down, I'll get this one straightened out (unless you tell me who is right DCFusor!)


Randall W. Forsyth ("Current Yield") knocks one right out of the park with this week's article!

He provides some more details on the $6 TRILLION Bond Fraud over there in Switzerland and Italy.  This apparently was a (laughable) scheme to defraud Swiss banks.  

He then goes on to write that it looks like some bondholders of Greek debt "are more equal than others".  Now when did we last hear something like that?  Oh, yeah right, GM.  It looks like game of "Screw the Bondholders" has reached Europe...

He then finishes with the observation that $99 billion of of real (as opposed to bogus) Treasury debt is up for sale this coming week.

Five Stars, Randall!


No IPOs of note, some little ones I have never heard of.

The "Total" on the Fed's Balance Sheet inches closer to the probably important psychological of $3 trillion dollars (it is now at $2.978 trillion, up $4.6 billion last week).  You can be sure that Zero Hedge will have some fun with Fed when they finally cross that 3 trillion dollar total.

Money Stuff (for the economists out there who know more than I do):

-- Currency in Circulation (I will include this in the future): up 0.7%
-- Monetary Base: up 1.3%
-- M1 and M2 both essentially unchanged

I regret to report that the Mighty Peruvian Sol suffered a setback vs. the US$ this week, falling some 0.005% (very little, but still...).  That is only the second time I have noted a decline in the Sol over past few months I have been watching it.  Actually, that may be good for one reason: we are soon going to Peru!  So, bring it down, bitchez!  Save me some money!

Verdict:  I am Robert Mix and I approve buying this issue.

Thursday, February 16, 2012

TEOTWAWKI -- Mental And Physical Strength Edition

TEOTWAWKI (The End Of The World As We Know It) is a recurring theme at my blog because I find the topic to be interesting and I do assign it a greater than 0% probability of it happening.  TEOTWAWKI: "The Ultimate Black Swan!"

Today I would like to address another aspect of being prepared (beyond having food & water and guns & ammo), namely that of being strong, both mentally and physically should a TEOTWAWKI (or lesser SHTF event).  I am inspired to write this one today by my friend Carlotta (in Italy, and her friend Giuliano) and a piece some three weeks ago by John H. Kunstler on how physical strength would make a BIG COMEBACK in the world he foresees (in his book, The Long Emergency).  See Kunstler in action at his website:


Mentally Strong

If things go south and become really bad, we each must be mentally ready and strong.  The first step in the process would be to recognize TEOTWAWKI as a real possibility and to decide to take some early steps in case such a calamity hits.  (In this piece today, I will not go into the various possible ways the SCouldHTF)  That's it!  The first step: recognizing and deciding to prepare.

The second step is kind of automatic.  As your preparation goes beyond baby steps (buying a gun or some gold or seeds or a water filter) you mind is getting stronger as you act.  At this point you are way ahead of almost everyone you likely know...  This can be done quietly too...  You do not have to tell the neighbors.  Your spouse should know at least a little bit (mine does, but I emphasize the "Hurricane Preparations" part more) about what you are up to.  Each time you buy something, learn something or whatever, you are making your mind a little stronger if there is a big storm ahead.  This is about where I am now, in this second stage of mental conditioning.

It gets a little harder now.  If the SHTF, there are likely to be MANY decisions that each of us will have to make.  Hard decisions.

"Thought Experiment" time.  Let's say that the system has crashed.  Food and water become hard to get.  But, clever you went and bought water filters and have a lot of food on hand.  So, who would you share with?   My wife and I would share what we have (our only child is grown and gone to another town).  Would we share with other nearby family?  No, we are lucky in that sense, no close family anywhere close to where we live.  But, perhaps most of you readers DO have family close at hand...  How about your hungry neighbors (who likely did nothing to prepare for anything)?  Would you turn in your gold if the US government told you to?  Would you give up your guns if they told you to?  Would you SHOOT (assuming you know how to) a looter breaking in to your place to steal?  These are questions that each of us should think about if we perceive the likelihood of a crash as a real possibility...

If it is really bad (recall that TEOTWAWKI for me is WORSE than the Great Depression v. 2 I have also discussed), then lots of bad things are going to happen.  There will be homeless & hungry people.  They may be desperate to save themselves and THEIR families even if that means taking YOUR family's stuff.

Mentally strong means other things as well.  Being addicted to anything is bad (a weakness for the drink in my own case).  Some of these kinds of addictions might be broken automatically though in a TEOTWAWKI (no distribution of booze for example).  But, how do you break an addiction to insulin if you are diabetic?  Erm...

KNOWING HOW to do stuff is part of this too.  Can any of us FIX anything (not really in my case)?  Sewing counts as fixing things...

Each of us will have to face the fact the the suffering on each of our part as well as our society as a whole would be enormous.  Think!  Imagine how much suffering there will be if it all goes bad...  Even if you are well prepared and ready to defend your family.  There will be incredible suffering on a scale never before seen in human history if one of the Bad Ones happens...  You will have to be strong to withstand this...

Physical Strength

Kuntsler's article discussed how certain old-time values could come back in style.  One of these is likely to be physical strength (both men and women).

It is perhaps in our lifetimes that we as a society lost a lot of respect and admiration for strong men (I am not strong).  In ancient times, the strong guys were really respected, even honored.  The ones who could hurl a spear the farthest.  The ones who could win in sword-fighting.  The ones who could lift heavy things ("do the heavy lifting").

Physical strength is almost derided now (except among bodybuilders and such).  A few years ago I first ran into the term "metrosexual", which basically means a sensitive guy, who is an urbane and thoughtful kind of guy to women.  They dress different than, well, sort of rednecks like me!  They are cool rather than strong.

Kuntsler writes that as we move back to a time more like the 1800s that physical strength will become much more important than it has been seen to be for the last generation or two.  Blacksmiths (metal-workers) and bricklayers for example will be in much demand.  Men who can chop down trees and cut them into firewood without electric or fuel powered devices (I did that kind of work one summer in Maine when I was young, it is VERY hard work!).  Men who can build things up and men who can tear things down.  All day long, in the heat or in the cold.

Physical strength also includes many things.  Brute strength (how much you can bench press, say).  Endurance (can you run 5 miles?).  Resistance to heat and cold.  Resistance to infections.  Resistance to parasites (eg, mosquitoes).

But, for the purposes of this article, I also include the idea of self-defense (in my case Tai Chi).  If  your gun is not handy, you must be stronger (in the wider sense of the word) than the "other guy" who is after you or your family!  If not, you and your family will perish...

An example from our own family.  Our daughter's boyfriend is strong, he played high school football, but is not big enough for college ball.  But, he IS strong.  He also is in a city where physical strength is NOT admired at all...  He also knows how to fix stuff...  Our daughter is going with a pretty capable young man.  Another example would be my three nephews, two of them played college football and the youngest is on track to.  Trust me, you do not want to mess with any of the three of them...  Or their younger sisters...


Almost anyone can get stronger than they are today.  Eat better.  Exercise more.  Learn stuff, even if it is NOT survival related (in my case learning Italian), as the act of learning also makes the mind stronger.  Cut back or eliminate the bad habits (yeah, sure...).

And increasing your mental and physical strength will improve almost every aspect of your life, even if nothing BAD ever happens!  You will live longer and better.  You will be able to live a better life.

So get on it!  Become stronger every day!

Live from Australia in 1979:



Sunday, February 12, 2012

Review of Barron's, Dated 13 February 2012

This review is late because "they" did not get Barron's even here until today (Sunday).  A "Service Failure", something I am afraid we are going to see lots more of...

The Cover Story ("Dow 15,000 -- Enter the Bull") by Gene Epstein makes a good case for the Dow rising to 15,000 within two years and a 50-50 chance that it rises to 17,000.  While these numbers look dramatic, Epstein says not really.  He looks at history of under-performance in the stock markets, and finds that over-performance typically happens next.  The past five years have NOT been good ones.

After outlining his thesis, he brings in the work of famed Wharton finance professor Jeremy Siegel who has been researching stock market performance (with good data all the way back to 1871).   Siegel, who wrote the book Stocks for the Long Run (now in its 4th edition), looks at stock market data and finds that CYCLES can be identified...  Things go down, things go up.Siegel sees a recovery happening, and so goes on to present historical data to build his case that the Dow could indeed go to 15,000 - 17,000 based on the present being typical of the past.

My take?  Well, maybe so.  If we are in a relatively "normal" environment, then yes, it is quite possible (maybe probable) that the Dow goes that high.  If we are not in a "normal" environment (my hunch), then it will surprise me if the market gets that high.


Alan Abelson rides back into town this weekend ("Right on the Money") with an understated critique of our Congress!  Seems that 86% of us disapprove, that ties the old record.  He goes on to write that REPUBLICANS tried to spike a recent effort to eliminate a provision that would require practitioners of "political intelligence" to register as lobbyists.  Said practitioners use their contacts and skills with Congress to learn about upcoming changes on behalf of their (well-paying) customers.  He writes that many of these customers (investment banks, hedge funds, private-equity outfits and lobbyists -- a motley crew as labels them) often contribute to said Congress-critters...  The Deal is not done yet, the Senate and House have to work out the differences, I guess we will just have to wait and see if there is any reform or no...

Abelson goes on to write about Greece (how could he not?) and of the very high levels of bullishness found among investors .  Typically, high levels of bullishness precede a market fall...

He finishes with First Global's analyst Kavita Thomas making the case for unloved Pfizer (ticker PFE).  Their big revenue producer Lipitor now faces generic competition, but apparently Pfizer has a pretty good pipeline of new drugs on the way.  PFE has not moved anywhere lately, and apparently is unloved.  It also has a 4% dividend.  Hey, maybe!


He Said:

"This is about as serious and difficult an environment as I have experienced in my career...  At times like this, it is more important to survive than to get rich."

-- George Soros

That's the second time Barron's has quoted Soros recently...


In the "Follow-Up" column, Beverly Goodman writes that the money market funds may come under alarming new regulation and having to have reserves...  This does not look good to me, what with money market funds offering almost nothing, and yet many of them came close to "breaking the buck" (value of $1.00 there being less...).  Hmm.


Robin Goldwyn Blumenthal writes a bullish piece on Dana (DAN) a supplier of axles, drive shafts and similar parts to both the car and truck manufacturers.   Dana re-emerged from bankruptcy four years ago.  Mario Gabelli liked this company in the Roundtable a few weeks ago.  Also in its favor is the fact that age of cars and light trucks is now over 10 years old in this country...


Florida fans (I have a fair number of readers from Florida, look at the map widget, hey they're not all MY clicks!) may appreciate Mike Morgan's article "Time to Buy in Florida...Carefully".  Because of the BIG declines in housing prices as well as foreign buying (South Americans, Europeans, Canadians and Russians), he thinks now is an OK time to jump and buy.  But, he does NOT like Miami.  He does NOT like single-family homes in the interior parts of the state.  He does like the area of Atlantic oceanfront homes from north of Palm Beach County all the way up to the Space Coast.


"D. C. Current" author Jim McTague is about the current round of "stress tests" on the banks.  The value of the stress tests is still being debated, but it seems, SEEMS, that the banks are in better shape than the last round in 2011 (what, better shape so fast???).  Jim provides us with some nice writing (why investors in banks should get more information that the regulators get):

"Investors are agitating for better disclosure because many believe that bankers simply can't be trusted, especially after they helped to blow up the economy in 2008.  There's another reason to broaden disclosure: Regulators can't be trusted, either.  They had detailed information in 2007 and 2008, yet were unable to deduce that the financial system had morphed into a Wild West casino."



Tiernan Ray writes that maybe Cisco Systems (CSCO) has a shot of growing a bit faster than in recent years in that it is gaining a little market share.  I have not been following the company lately, but apparently it went through some wrenching changes.  This is a company that could increase its dividend should they choose.


Wow!  "Our Gadget of the Week" is about an "app" for Apple and Android phones that will tell you the names of stars, planets, constellations, etc. just pointing the device up at the object you wnat to know more about.  Constellations too.  The app is called the SkySafari 3.  Price: $2.95.  Author Nathaniel Wice gave it five stars.  If I get an Android like I am thinking of, I will get this one, as I have always liked astronomy...


Jonathan R. Laing writes an interesting piece: "What Happens if Israel Attacks Iran".  He interviews George Friedman (head of recently hacked Stratfor, a private intelligence company).  Friedman doubts that Israel will (nor will we) because it would be almost impossible for Israel to successfully strike and knockout Iran's capabilities AND that the risk of $300 crude oil and massive damage possible against our fleet over there are real risks.

Bottom line: we will reach an accommodation with Iran.  In other words, they will get their nukes.


Leslie P. Norton writes up an interesting interview with a China pro (Cheah Cheng Hye, a money manager based in Hong Kong).  Currently, a lot of what I read is China-bearish.  Not here in this article though!  After their government finishes some high level changes (transitions), China should go up as it is under-valued.  But, his fund also holds 9% of its value in GOLD!


There is a cartoon (Barron's is kind of famous for their cartoons, many of which are excellent) that I will try to kind-of reproduce here.  I could not read the the cartoonists signature, it might be S. Harris.  Anyway a car is going through the woods and passes this sign:
Hey, I am an amateur at this, OK?


CEO Spotlight was again interesting and is about American Express (AXP) CEO Ken Chenault.  Chenault has been at the helm for 11 years there.  Warren Buffett has enough confidence in him that he is allowing AXP management to vote Berkshire's shares as long as it owns 5% or more AND Chenault stays CEO.  Berkshire owns 13% of AXP.


Editor Thomas Donlan makes the case that Congress should try doing NOTHING and the Federal deficit will begin to close (because of automatic tax hikes and spending cuts as currently written).

NO WAY that's going to happen though (my observation, not his).


In the Market Week section, Jonathan Buck informs us ("European Trader") that Greece is likely to exit the euro.

There ARE people who do not read Zero Hedge and so may not be keeping up with Drama Queen Greece...


"Current Yield" columnist Randall W. Forsyth notes that both Warren Buffett and Laurence Fink (CEO of BlackRock) hate bonds...


This week's "Commodities Corner" (by Simon Constable) is about the very low Baltic Dry Index shipping rates (for bulk cargoes like coal, iron ore and grains).  And how most of it is due to a large number of new ships hitting the seas now.

Not mentioned is CHINA, which I have seen mentioned at Zero Hedge a a factor (fewer ships taking bulk products there).

I think I would go with ZH on this one...


There is a New Listing on the NYSE of interest: Cementos Pacasmayo SA (it's an ADS, ticker: CPAC).  CPAC is a regional producer of cement in Peru...


Total Fed Assets went up a smidge to $2.974 trillion.  Only $26 billion to go until it hits $3 trillion.  Bet they try to hide this as much as possible...

-- Monetary Base up 1%
-- M1 down 1%
-- M2 essentially unchanged

The key metric, however, is the relentless rise of the Mighty Peruvian Sol, which after taking a one week vacation of climbing vs. the US$, is up again!  Up about a quarter of 1% last week!  What, with Cementos Pacasmayo hitting the NYSE and the Sol hitting a new record, it is Peru's turn to shine!

Tuesday, February 7, 2012

Debt And High Frequency Trading -- Two Bad Things!

^---  We have reached a new milestone in our National Debt!  Each taxpayer now owes $125,000 to cover it!

"Thought Experiment" time again.  Perhaps your family might be like mine.  My wife and I have one child, she is now out on her own and working.  In our case, there are two taxpayers in our family.  Two taxpayers who, theoretically, owe a cool quarter of a million dollars JUST to pay off our share of the National Debt!

I don't know about you, but our family doesn't have $250,000 just lying around to pay "our share" of this stinking debt!  And if presented the bill, well we will not pay...

Spending MUST be cut!  Will it?  Hmm...  Will spending be cut?  NONE of the front-runners for next POTUS give me ANY hope of that.  Spend and tax and borrow our way into oblivion.  How will this end?  Very badly is how.  My guess is they will inflate it away.  If that happens, inflation will hurt savers.  They could also default.  That would hurt anyone holding Treasuries, that would include pension funds...


Check out the video of painter Jon McNaughton.  He is the guy who also did the other (famous now, and second link):




I got the below fascinating link from Mish's blog (globaleconomicanalysis.blogspot.com):


This link visually chronicles "High Frequency Trading" (HFT) from 2007 - 2012.  The video starts out slow...  But keep watching, the robots come in BIG in 2008 and go crazy in 2010!

I believe that HFT now accounts for over half the trading on the stock exchanges now.  Goldman Sachs and others, all slaving away "doing God's work."  It still staggers me that Lloyd Blankfein (head honcho at Goldman) said that!

Mish commented that SOMEONE must be making LOTS of money with so much HFT going on!

Hardly anyone I know is buying and selling stocks now, except in very small amounts.  Why?  Because we ALL KNOW that the market is rigged!  Maybe it always has been (probably), but as they say now: "They don't even bother to hide it any more."


So, what's a saver supposed to do to stay safe?  Here are two for you:

1) Take a look at today's price movement in gold.

2) FOFOA gives us some ideas on what will happen "after the reset": fofoa.blogspot.com.  His piece is excellent.......

Sunday, February 5, 2012

Review of Barron's, Dated 6 February 2012

Another weekend, another Italian class and another review of Barron's!  I was delayed in writing this up by a number of factors: falling asleep while reading it yesterday, taking my wife to a delightful new Peruvian restaurant and having Linda and Tom over (who took us sailing not along ago).

This weekend's edition did not match the high level standard that I had grown accustomed to recently (well the Roundtable that they sponsored of course was very interesting and hard to match).  Nonetheless, I spent the $5.00 plus sales tax, so I offer the below (shorter than normal) review.  And, again, I only write about what interests me, whether for good or bad.

Randall W. Forsyth pinch-hit for Alan Abelson this week.  After a couple of political comments, he finishes with politics with Ron Paul's reaction to Donald Trump endorsing Mitt Romney:

"Please explain to us why anyone would care."

Indeed, who cares what The Donald thinks...

Forsyth goes on to dig into the employment numbers out on Friday (better than expected, on the surface anyway).  He then proffers an idea that many unemployed have had time to spend more hours on Facebook (800,000,000 users). He wonders if when more people go back to work that all those who then have to work will then go on to have more "Friends" and to "Like" people or leave comments.  He then goes on to note that some economists are seeing that Americans are saving more (having gotten beaten up in 2008 - 2009) and worried about Europe...

He then finishes with comments on Facebook, money & credit expansion (especially the LTRO in Europe) and rising stock prices (highest in a long time).  Looks good right?  Well oil prices have doubled since December 2008 and 1,000,000 fewer people are employed....


"He said:"

"It is very urgent... to resolve Europe's debt crisis.  China is considering greater involvement... By participating in the European Financial Stability Fund..."

-- Chinese Premier Wen Jiabao

China has a lot at stake in Europe, they trade more with Europe than they do with either the USA or with Japan.


Andrew Bary writes "At Long Last, Facebook".  By comparing valuations of Facebook with Google and Apple, well Facebook does not look too good...  Apple and Google both have a PE ration of aroun 16, Facebook's is around 88...  I will not be buying, thanks anyway.


Lenovo is now the No. 2 PC maker in the world and is withing sight of No. 1 Hewlett-Packard wirtes Leslie P. Norton ("Protect and Attack").  Lenovo is look to move into other products like tablets, smartphones and smart TVs.


Andrew Bary wrote another article "A Remedy for Runaway Health-Care Costs" in which he diagnoses (sorry) the very high amounts the individual states are having to pay for "duals" (patients eligible for both Medicare and Medicaid).  These duals are costing states a fortune (only to get worse).  One partial solution will involve more managed care companies coordinating and consolidating care.  Three ideas he has:

UnitedHealth (UNH)
Humana (HUM)
Molina Healthcare (MOH)

Will there indeed be significant savings?  Bary says it is hard to say...  And I would have NO IDEA...

[Ed. note: For the record and overgeneralizing, Medicare is an entitlement (you get it, no questions asked) when you turn 65, Medicaid you get after you have lost all of your money...]


Jim McTague's "D.C. Current" column ("Fannie Mae's Fire Sale") reports that there will be a test auction of selling foreclosed homes in bulk!  But, not everyone can play, you have to be rich, have a record as a landlord and you cannot "flip" the properties.  Fannie offered few details now (like when, or how many homes, etc.), but this idea is apparently of great interest in the real estate sector.

This might be interesting to keep an eye on.


The Cover Story is Mutual Fund Families and who came out on top in 2011.  Yawn.  Mutual Funds?  They're still around?


I skipped Gene Epstein's article on January jobs because of the strong smell of government manipulation of jobs numbers nowadays.  I don't trust them, and there are many like me who do not either...


Tiernan Ray writes that Apple and Samsung are dominating the smartphone space.  HTC of Taiwan (using Android) has lost some mojo, but is working to get it back.  And Intel and Microsoft are working to bust into the smartphone and tablet markets later this year.  It may become an interesting horse race int he smartphone starting late this year.


Mark Veverka ("Plugged In") takes a poke or two at Jeff Bezos and Amazon (AMZN, a company I do not follow, I just buy at the bookstore, thank you).  The margins are not good, the PE is 70 and has never been a shareholder friendly company.

Well, I won't buy their shares, thanks Mark for the heads up!


Mattel and Hasbro hiked dividends!  Shirley Lazo writes that the toy market looks pretty good worldwide for these two companies.


Jack Willoughby writes up a complicated article/interview with former SEC Commissioner Roberta Karmel  about breaking up the TBTF banks.  There is a great chart showing how each TBTF got that way from 1995 to 2009 (who gobbled up whom -- complicated!).

Karmel thinks that the banks should be broken up along functional lines, that's about all I was able to understand.


In the Market Wee section we have:

-- Vito Racanelli writes about the big stock rally we have had since the November 2011 lows (around 16%)

-- Jonathan Buck ("European Trader") writes that German companies might be a good bet.  This is controversial, Buck provides opinions on both sides.  I guess my (less educated view than his) is "No, thanks", in that German companies are dependent on a weak Europe and weakening China.  He finishes with a comment on the proposed Xstarta / Glencore proposed merger.  This would be a mining and metals trading giant.

[Ed. note:  BIG IPOs (Facebook) and BIG MERGERS (above) are often an indicator of a market top!!!]

-- Leslie Josephs writes at "Commodities Corner" that after an huge run that orange juice may very well drop.  There is a fungicide that FDA does not like found in some Brazilian OJ...  Consumption may go down, and prices have gone up so much...

-- Money stuff:

   * Fed Total essentially unchanged at $2,966 trillion (they must REALLY be trying hard to not go over the $3 trillion dollar "Headline Number"...
   * M1, M2 and Monetary Base were little changed

   And, for the first time in weeks, the Peruvian Sol went down vs. the USD (by a tiny percentage)

Verdict:  Not as interesting an issue as the last three were.

Thursday, February 2, 2012

A Record Month!

Ameru Trading del Peru S.A. had it biggest month ever in January!  Ameru beat its old record (September 2010) by $7000.

January 2012
September 2010

I hereby salute my in-laws for their hard work!  They're the best!

Felicitaciones, mis queridos cuñados, por nuestro mes más grande en la historia de Ameru!