<< <i>Wow! Gold at $940. in July! that's scary!!! >>
Indeed, it was $980 last July. >>
Considering how other investments have done, PM's have held up quite well IMO. >>
Wasnt meant as a bash on Gold. In another thread the poster wrote the same and commented that gold usually is at a low in the summer. I was just stating fact.
Timing is EVERTHING in investing. Dont let your broker or advisor tell you otherwise. Gold has been a great relative performer over the past 12 months. A terrible relative performer over the last 4 months. Everything is relative.
Visited a classic car show for the first time in 2 years to get a sense on the market. This was mainly a Mopar show featuring cars from the 60's and 70's. But other makes were represented. I touched base with some old friends who I hadn't seen in a while. Imagine my surprise when the overall word was that this part of the hobby is still relatively unaffected by the economic downturn. People love their hobbies, especially their collector cars. A report from the national level Chryslers at Carlisle show last weekend was that cars and parts were trading quite briskly. One could not see any appreciable difference from last July. While run of the mill cars that are somewhat incorrect or have poor documention have tended down somewhat in price, the quality ones in all categories are still pretty much where they were give or take 10-20%. Considering that many of these cars had appreciated 3X to 5X over the past 12 years, a 20% correction on a $110,000 car is not all that much considering it started out at $20K in 1996.
I was quite surprised when one person told me many of the Cuda/Challenger enthusiasts felt that the market is now bottomed for those cars (Chrysler E bodies) and will only trend up from here. Those are the inflationists chiming in for sure. But the fact that good collector cars have been holding up better than good coins sort of surprised me. Mopars are more of a niche market that severely lagged the Fords and Chevies back in the mid-1990's. Considering that they survive in about 1/10th the numbers and have some very interesting packages available (Cudas, 440-6 packs, 426 hemis, winged Nascar cars, roadrunners, super bees, chargers, gtx's, demons, mod interiors and alligator vinyl tops, etc.) specifically designed for street racing it's not unexpected that they might continue to be in demand. After all, you have a collector car or two and treat them like a family member and go everywhere with them. It's not the same as a rare coin sitting in the safe deposit box that you lovingly clean after each trip. Insurance costs are $50-$200/year and you can drive them all over if keeping annual mileage to under 3,000-5,000 miles annually. As long as they appreciate it's a free ride while you're having fun (as they did from 1996-2008).
I will continue to monitor this segment of the collector market to see what signs might be relevant to our markets. Frankly, I would have expected the collector car market to sort of crater as the last thing you would think anyone needs hanging around the house during tuff economic times is a $20K to $50K collector car that gets driven only 10X to 50X annually...and esp. if you think the price might continue to fall. But such seems not to be the case with the older Mopars and even the newer ones including Vipers, Prowlers, etc. Even the new 2008/2009 Challenger R/T's at $35K to $45K a whack seem to be selling briskly. I saw 6 of those in a line today and this was a smaller regional show. A lot of the car collectors still would rather have their dollars tied up in a car than in FRN's. Back in the the 1996-2003 time frame there was lots of talk about clunker bills and other such environuttism trying to get these classics off the road to gain pollution credits. It didn't happen. But I think our legislators will continue to try despite the fact that 1 car out of 100 to 500 might have a somewhat limited affect on overall clean air.
roadrunner, I'm in the market for a mid 60's Vette. Saw one that I would have bought at auction last night and don't know if it sold or not. Tomorrow I'm calling them and if it didn't sell, I'll be on an airplane to go and buy the thing.
many owners, regardless of their up or down value enjoy them for what they are. i think prices have bottomed because prices are below the stratospheric level of the easy money created by real estate equity to the point where i can even browse a muscle car and entertain the thought of owning one. i do not think it is a precursor for inflation, but would enteratain any comment.
it just may be more relevant and satisfying to drive and possess a car than look at and possess a coin. IMHO
What is the total net worth of all Americans citizens these days, with the housing, and stock market down so much? A few years ago it was 50 Trillion , Can you say WERE BANKRUPT???
By Dawn Kopecki and Catherine Dodge July 20 (Bloomberg)
-- U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.
The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today. “TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform.
Treasury spokesman Andrew Williams said the U.S. has spent less than $2 trillion so far and that Barofsky’s estimates are flawed because they don’t take into account assets that back those programs or fees charged to recoup some costs shouldered by taxpayers.
“These estimates of potential exposures do not provide a useful framework for evaluating the potential cost of these programs,” Williams said. “This estimate includes programs at their hypothetical maximum size, and it was never likely that the programs would be maxed out at the same time.”
Barofsky’s estimates include $2.3 trillion in programs offered by the Federal Deposit Insurance Corp., $7.4 trillion in TARP and other aid from the Treasury and $7.2 trillion in federal money for Fannie Mae, Freddie Mac, credit unions, Veterans Affairs and other federal programs.
Barofsky's worst case estimate of nearly $24 TRILLION cannot include possibly include all the derivative's exposure yet to be unraveled, much of it yet to be discovered. While the BIS and OCC report close to $600 TRILL in over the counter, relatively non-transparent derivatives there is another $800 TRILL pile of these things that are completely hidden in the shadow banking system (ie not reporting requirements). Even a totally unrealistic failure rate of 1% would add another $14 TRILL to the "pile." If the failure rate were only 1%, AIG wouldn't have needed bailing out and JPM/GS/UBS/Citi and others wouldn't have walked away with hundreds of billions in bail out profits via taxpayers. Probably a better starting point for a failure rate is 10% and that is probably very generous as well. The big bank holding companies work like a check valve. "Their" profits, paid for by US taxpayers, belong 100% to them, while their losses are fully socialized and assumed by the US taxpayer. It's a busniness model that all companies should strive for.....
Hummmmmmmmmm...things appear to be getting warmer in the real asset v.s. paper asset sector. So, maybe the rumor is true, maybe we will have limited access to our sdb once the fed or the people with deposits become unsure of the solvency of the fdic. Hummm...physical metal getting in demand such that folk are starting to want to know just how much do we really have in Ft. Knox gold depository; no one really bothered before now other than just to wonder out loud a little. Looking like cash and physical are becoming vogue with at least some of the money boys. Comex default...well, folk are talking, looking a little closer at the New York Commodities Exchange and particularly the gold part of the Commodities Exchange on what it has in the vaults and what folk have receipts for, starting to look at the real numbers a little more now and who's moving what; checkin' to see who really has just what at the Comex. People want to know about the physical gold.
Well, theres a lot of activity along the axis, gold moving nearly $50 down then $50 back up to $950 so there's some play in there for the players but they aren't talking, they're playing. The item of note is the "wobble" in spot price, its range and its speed of movement; sort of wound a little tightly methinks. I guess that once the physical supply gets just a little bit tighter and the reality of just who has what physical metal starts coming a little more into focus then physical may well be much more sought after in a very big way. If gold gets really hot, look for the O Crew to get active. Gold is good and cash is king, keep 'em where you can get at 'em!
Greenlight traded out of its 420,000 paper ounces of GLD gold into real physical claiming that storage costs/fees would be lower. More than likely they realized their position might not be all in real gold. This may make hedge fund manager Paulson thing twice about his much larger stake in GLD (8-15%) unless he has worked out some special arrangement with HSBC where he knows he can get his hands on the gold.
"...it shall be unlawful for any person...directly or indirectly...(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person...in connection with (1) ...a transaction for the purchase, sale or delivery of silver bullion, gold bullion, bulk silver coins, bulk gold coins...pursuant to a standardized contract commonly known to the trade as a margin account, margin contract, leverage account, or leverage contract
Many successful BST transactions ajia (x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes, mariner67, and Mikes coins
Goingbroke, "interesting" article on Deutsche Bank's covering of 850,000 oz of gold on the Comex last March...at the exact same time the ECB decided to dump just over 1,000,000 oz of gold on to the market. I nearly passed the article by because it's title was only "interesting" rather than a few descriptive words pertaining to the topic. There are so many links offered up here that sometimes we only have time to read topics that directly interest us. I often just skip links that give no clue as to what they pertain to.
Another look at CPI through the eyes of noted deflationist "Mish." He brings us some very valid points that have had me wondering for a couple of years. In particular, I knew that the shift from home costs to "imputed owner's rent" in 1983 would understate inflation during times of rising home prices and falling rents. Mish agrees that this is what exactly happened from 1983-2007. That is, that the govt's CPI-U woefully underestimated inflation up until a couple of years ago. But now, with home prices falling, and rents being stable or even rising, I would have expected John Williams' shadowstats CPI-sgs alt. to close the gap with CPI-U or actually fall below it. Since shadowstats sgs-alt uses the 1980 methodology with home prices, and those home prices make up 40-50% of CPI-U, one would assume that this formula should be closing the gap with the CPI-U.
Mish also tosses in the Case-Schiller housing index in place of the housing/rent input in the CPI-U to come up with a modified CPI-CS. Not surprisingly, this shows a much lower CPI than either of the other methods. This modified index is a deflationist's dream come true.....-6% CPI. But it still is something to ponder.
In a nutshell, the govt's CPI-U is geared to understate the housing portion of CPI during periods of home price appreciation, and is possibly geared to overstate inflation while home prices are falling (rents stable or rising). Those 25 years of understatement have come with a heavy price.
This leaves some questions unanswered. The 1980 formula (SGS-alt) should be closing the gap with the govt's CPI-U that uses imputed rent. Also, shadowstats "pre-Clinton" 1990 formula that uses imputed rent should be quickly closing the gap vs. their 1980 model....it's not. I sent an email to shadowstats on some of these questions to see if they could clarify things.
I guess there is no reason for the Chinese not to buy American debt as long as they can turn around and but up hard assets around the world?
China to deploy foreign reserves By Jamil Anderlini in Beijing
Published: July 21 2009 19:09 | Last updated: July 21 2009 19:09
Beijing will use its foreign exchange reserves, the largest in the world, to support and accelerate overseas expansion and acquisitions by Chinese companies, Wen Jiabao, the country’s premier, said in comments published on Tuesday.
“We should hasten the implementation of our ‘going out’ strategy and combine the utilisation of foreign exchange reserves with the ‘going out’ of our enterprises,” he told Chinese diplomats late on Monday.
The “going out” strategy is a slogan for encouraging investment and acquisitions abroad, particularly by big state-owned industrial groups such as PetroChina, Chinalco, China Telecom and Bank of China.
Qu Hongbin, chief China economist at HSBC, said: “This is the first time we have heard an official articulation of this policy ... to directly support corporations to buy offshore assets.”
China’s outbound non-financial direct investment rose to $40.7bn last year from just $143m in 2002.
“Everyone is saying we should go to the western markets to scoop up [underpriced assets],” said Chen Yuan. “I think we should not go to America’s
You'll need to be more specific; they're all fake now days.
They once existed to produce a profit for the shareholders but now the shareholders are other corporations and they all exist to enrich the CEO. They used to make products that were sold at a fair price so that both the buyer and the company might profit. Now products are ancillary and only exist to entice some sucker into paying far more than the real value so the brass can get rich yesterday.
We should make the Chinese take all our companies and then the the CEO's will ship the jobs back to this country.
As I postulated in the Fall and reiterated a few months ago, it looks like real estate, in whole, has bottomed. I dont expect a return to price increases, but we have definately stabilized--except for perhaps Cali where Prop 13 will have to be repealed and property taxes rise.
I can see the rate of residential home prices starting to level somewhat, but not stop decreasing altogether. Considering that a slew of renewals on prime, alt-A, and option ARM loans will be starting to surge starting in the fall through 2011 (similar to the sub-prime surge in 2008) it seems unlikely for a downturn to end this year. 2009 was the lull year between these surges. Also add in the fact that banks have been sitting on foreclosures so as to keep those losses of the books to improve their balance sheets. Prior to the stress tests being conducted the banks were sitting on a huge pile of foreclosures. How long would it take to get those all out into the open?
Home sales include foreclosures, bank auctions, bank to bank and bank-broker sales only mask the real number of sales to primary owners (ie real living dwellers). Let's also add in the fact that unemployment will continue to grow beyond 2009, people will be spending less, and banks are not yet showing any increased signs of loosening requirements for home buyers. Following the 1988-90 housing boom it took 5-6 years to work off that froth. And the recession officially ended several years before home prices bottomed. What it really took was the FED pumping in lots of money into the economy starting in 1996. So far, we've had a very short 2 year housing correction, but in the worst recession (or depression) since the 1930's. This is not 1991-1993. How many years did it take home prices to recover from the 1930's?
Maybe we get a slight housing lull here as the SM perked up and a few green shoots seemingly sprouted. But the residential mortgage resets start to hit full bore into 2010 along with CRE. A calm before the next storm. Don't bet the farm on any stats coming out of official govt, state, or RE organizations. No better than China's. The game is all about perception and misdirection, not accuracy.
"How many years did it take home prices to recover from the 1930's?"
There really wasn't any booming growth until after the war and really stuff started cooking in the early 50's so maybe 20 years from 1933 or so but it wasn't so much because of housing recovery as it had been known up to that point. The industrialization for WWII got a lot of people employed after the devastating 30's and they needed houses other than the apartment/row house slums that were so abundant at that time. Folk migrated from the Hoovervilles into cookie cutter houses as the war geared up and folk got jobs, then people started working with getting single housing for the masses other than the apartment complexes that had filled that role previously.
It seems that this act got the federal mandate or authorization and intent to build mass housing other than apartments and regulate its growth; this was in 1937.see section 9 As the subdivision concept became more clear in the mid/late 40's then individual home ownership became more achievable if folk had jobs and with good employment came good jobs and more subdivisions.Levittown, first U.S. subdivision 1946 The more money you make, the better subdivision you could live in...it was all good. It wasn't so much a change in degree but a change in kind.
By the 50's housing hadn't so much as recovered as it was reborn as something different and that became modern housing so there is really no comparison with real estate housing recovering from 1930, it became entirely different. From that time in the 50's things have cooked at a considerably vigorous pace. Even now there is considerable new home construction where there is demand. Places with no demand...hummmmmmm.
How many years did it take home prices to recover from the 1930's?"
Probably a generation or more. And I fully expect prices for Cali real estate to take possible 2 generations to get back to their 2006 highs. Other areas of the country will do quite well though.
Just as many tech stocks will take decades --if ever- to reach their 2000 highs, there were other areas of the stock market that did incredibly well, such as energy or materials in the years hence. There were even a few tech stocks that did incredibly well since 2000, such as RIMM, which even though down 50% in the last year is still up 150% from its 2000 peak.
One thing this country will have going for it vs our friends in Europe and Japan and Russia is we will have a growing population, thus increasing demand for housing. In Japan, it is projected that their population could be 20% lower in 30 years. That means they will have 20% too many houses. What will that do to Japanese real estate. Europe faces a similar, though less drastic, problem.
A link above to Longacre's thread where the IRS ruled that ETF's backed by the physical PM (such as GLD, SLV) are treated as if they are bullion...hence capital gains subject to the same 28% rate that physical bullion is.
Home prices following a peak in 1928 recovered their value by 1934-1935 but see-sawed from there for many years. But the bottom in nomimal home prices came in 1932 (4 years from the peak). That's why I don't think 2009 will be the bottom for home prices.
Home sales rising don't necessarily mean things are getting better. Look at metro Detroit where 60% of home sales are foreclosures and median Detroit city sales are $6,000/home! The below was taken from Mish's website. He notes that many decent, livable homes in the Detroit area are barely worth 5 figures. Banks are walking away from more foreclosures because the costs to finalize the foreclosures are just not worth the effort/costs. Detroit isn't the only city that will have this type of problem. When the Mrs. goes shopping for milk, bread and eggs, she just might be able to toss in a 2 or 3 bedroom home for free as a bonus.
Metro Detroit home sales rose by 12.6% in May as compared with last year, yet home prices continued their fall -- an indication that the market hasn't hit bottom yet.
Overall, 5,955 homes were sold in May, compared with 5,288 sold in May 2008, according to Realcomp, a Farmington Hills-based multiple listing service. The median sales price for homes sold in May was $50,000, a 44.3% drop from $89,700 in May 2008.
Foreclosures continue to drag down prices. In May, foreclosure sales accounted for 60% of all homes sold. And the median price of foreclosed sales in the metro area was $26,400 compared with a median sales price of $110,000 on non-foreclosed homes.
In the city of Detroit, the median sales price in May was $6,000, down 29.4% from May 2008.
Interesting piece, tt. That commercial realestate/building loan sector of banking vulnerabilities has received only cursory media exposure, actually not much at all. But, there have been little echoes coming from the forest on this. Most news has been about malls having more vacancies, a small business here and a couple over there that are going under. It's mostly been just a little mention in the media here and there. Then there were the thousands of little auto dealerships that were allowed to sink below sea level.
The 26 million un/underemployed is probably pretty accurate as about 9%-10% seems to be accepted as the current rate and with 300-350 million living here, it is believable and maybe even a little bit understimated. At some point, that level of unemployment has to dampen the income and the growth potential of small businesses but I have to wonder if there is a possible bail out for these folks; maybe for the banks holding the notes, but seemingly very doubtful for the folks with the small businesses IMHO.
Small business is the prey for every taxing entity and every fee that can be generated by our agencies and govs., not to mention regulatory and compliance mandates, local initiaves such as tirz's and the like where the taxed businesses get to pay for the non-taxed ones, federally mandated healthcare and minimum wage, the plethora of "things" that small business gets hit with that have absolutely nothing to do with a small business making money and more about what the gov and agencies can get from small businesses. Small business is the plankton of the ocean, the form of commerce that all the other higher food chain populations depend upon. Yet, if history serves as an example, the small businesses will be the last, if ever, to receive any bail out.
It's peculiar because the govt. acknowledges that small business is the bedrock of the US industry, the growth and job generator that drives our economy but they get squat when it comes time to get some help. Well, you could argue that the SBA is there for them but what...you borrow money from the government to expand your business in a shrinking economy...nah. I would think it would be much more prudent to position ourselves for a pull back in goods and services rather than anticipate that we can maintain the status quo via government bailouts, at least for the small businesses; the banks maybe, but not the small businesses. Hey, I've got an idea...what if we give the banks money to cover the bad commercial loans and then they will loan the money to small businesses to get them going again, like we did with the housing industry? Hummmmmm...but, did they bail out CIT?
Since we've talked a lot about prices the past few weeks, here's something I took off of the GIM forum. Note that in 1930 gold was $20/oz and average annual pay could buy about 100 oz gold. Today one could only buy less than half that amount....42 ounces.
The cost of food has kept within the rise of wages but homes, cars, gold, and gas have not. It's the bigger ticket items that have really outpaced wages over the past 40 years. The cost of education, and healthcare aren't included here but they would more closely resemble the rise in home prices more than anything else.
A customer is seeking bread. He is willing to pay $3 per loaf, although I, a seller of bread, do not know this. I offer the bread at $2 per loaf and he accepts. The market price is $2 per loaf and I sell them at this price, because I was unaware of his willingness to pay $3. Simple enough so far.
Now lets investigate how Goldman Sachs has managed to unjustly enrich themselves by $100,000,000. per day!! A customer places an order to buy 100,000 shares of a stock at a limit price of $3 per share. He will buy all shares offered at less than $3 per share. Goldman sees an offer to buy 100,000 shares of this stock, but they have no idea of the limit price. The current market price is $2 per share. They respond to the 'buy' order with 12 sell orders: 100 shares at $2.10 100 shares at $2.20 100 shares at $2.30 all the way up to 100 shares at $3.20. Electronically the buyer scoffs up all of the offers that offer the sale up to the $3 limit. This is done very quickly (via computer), and the buyer is not able to adjust his limit to $2.10 because of the speed involved (probably less that one second). Goldman now knows the limit price of the buyer. They immediately offer 99,000 shares at $3 per share and it is bought at $3 per share. (probably takes another second). The buyer gets his stock and Goldman makes an extra $99,000 in two seconds. Using this method, Goldman has increased their profits by $100,000,000. per DAY!! It is easy to gamble if you know the dealer's hole cards. It is easy to make obscene amount of money if you know the price 'that traffic will bear'. Merely by using the speed of computer trading, they determine something they should not know, some confidential information. And with this illicit knowledge, they make billions.
Surprisingly Platinum is doing well today! I own some plat. but I wasn't expecting it to head higher until manufacturing gained.Platinum Updated: 7/27/2009 1:11:59 PM Bid: 1,215.80 Ask: 1,225.80 Change: 33.40
Many successful BST transactions ajia (x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes, mariner67, and Mikes coins
There are approx 30 banks/brokers/funds/institutions that get the same flash information before everyone else. While GS is not alone, they have of course perfected the art. GS and the other insider traders are not out of the woods yet because of billion dollar 2nd qtr profits. The FASB is once again talking about marked to reality accounting for derivatives.
Huge, scary, but brief US$ rally about to commence. Notice how they engineered a head-fake slightly-lower low on the Dollar Index from the early June low ( 78.315 vs 78.334 ). If The Collapse were upon us, they would have taken out that early June low and we'd be in free-fall right now. Notice how they're engineering a gold and silver mugging this morning? Usually this sort of gold/silver mugging takes place on a Monday morning, but they set the trap for this morning, instead. All the dollar bears have just been buttered up for a two-week toasting. Take advantage of it to get ready for The Real Collapse once it runs its course.
Many successful BST transactions ajia (x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes, mariner67, and Mikes coins
Huge, scary, but brief US$ rally about to commence.
Isn't there a heavy schedule of Treasuries this week? Of course, they are going to pump up the dollar for the occasion. It only makes things worse, as ALL the players know the game by now.
CNBC says that housing is turning around. Just remember that they are saying it right now with great enthusiam. This is July 28, 2009 - for the record. Jim Sinclair is saying just the opposite.
Someone has to be wrong.
Q: Are You Printing Money? Bernanke: Not Literally
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
<< <i>Huge, scary, but brief US$ rally about to commence.
Isn't there a heavy schedule of Treasuries this week? Of course, they are going to pump up the dollar for the occasion. It only makes things worse, as ALL the players know the game by now.
CNBC says that housing is turning around. Just remember that they are saying it right now with great enthusiam. This is July 28, 2009 - for the record. Jim Sinclair is saying just the opposite.
Someone has to be wrong. >>
They are both wrong as I said it 4 month ago.
But really, I do think they are both wrong as RE will most likely trade sideways for the next 2 years. A little up and a little down from here for most markets. Some will do better, some will do worse, but on the whole the downside damage is mostly over. Now it is wound licking time.
<< <i>Thats what I was thinking too. I just got another 60 2009 silver eagles just to make sure! >>
In the last 3 weeks I swapped out of 2,700 generic 100 oz. Silver bars into 4 sealed green monster Eagle boxes and 3 sealed yellow Maple boxes. I also picked up 140-2009 Silver Eagles. I still have roughly 1,000 ounces of 50-100 oz. Silver bars that I might swap out in the next couple weeks.
Comments
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<< <i>Wow! Gold at $940. in July! that's scary!!! >>
Indeed, it was $980 last July. >>
Considering how other investments have done, PM's have held up quite well IMO. >>
Wasnt meant as a bash on Gold. In another thread the poster wrote the same and commented that gold usually is at a low in the summer. I was just stating fact.
Timing is EVERTHING in investing. Dont let your broker or advisor tell you otherwise. Gold has been a great relative performer over the past 12 months. A terrible relative performer over the last 4 months. Everything is relative.
Knowledge is the enemy of fear
I was quite surprised when one person told me many of the Cuda/Challenger enthusiasts felt that the market is now bottomed for those cars (Chrysler E bodies) and will only trend up from here. Those are the inflationists chiming in for sure. But the fact that good collector cars have been holding up better than good coins sort of surprised me. Mopars are more of a niche market that severely lagged the Fords and Chevies back in the mid-1990's. Considering that they survive in about 1/10th the numbers and have some very interesting packages available (Cudas, 440-6 packs, 426 hemis, winged Nascar cars, roadrunners, super bees, chargers, gtx's, demons, mod interiors and alligator vinyl tops, etc.) specifically designed for street racing it's not unexpected that they might continue to be in demand. After all, you have a collector car or two and treat them like a family member and go everywhere with them. It's not the same as a rare coin sitting in the safe deposit box that you lovingly clean after each trip. Insurance costs are $50-$200/year and you can drive them all over if keeping annual mileage to under 3,000-5,000 miles annually. As long as they appreciate it's a free ride while you're having fun (as they did from 1996-2008).
I will continue to monitor this segment of the collector market to see what signs might be relevant to our markets. Frankly, I would have expected the collector car market to sort of crater as the last thing you would think anyone needs hanging around the house during tuff economic times is a $20K to $50K collector car that gets driven only 10X to 50X annually...and esp. if you think the price might continue to fall. But such seems not to be the case with the older Mopars and even the newer ones including Vipers, Prowlers, etc. Even the new 2008/2009 Challenger R/T's at $35K to $45K a whack seem to be selling briskly. I saw 6 of those in a line today and this was a smaller regional show. A lot of the car collectors still would rather have their dollars tied up in a car than in FRN's. Back in the the 1996-2003 time frame there was lots of talk about clunker bills and other such environuttism trying to get these classics off the road to gain pollution credits. It didn't happen. But I think our legislators will continue to try despite the fact that 1 car out of 100 to 500 might have a somewhat limited affect on overall clean air.
roadrunner
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
16 Million in Pork
Canned.
:-)
many owners, regardless of their up or down value enjoy them for what they are. i think prices have bottomed because prices are below the stratospheric level of the easy money created by real estate equity to the point where i can even browse a muscle car and entertain the thought of owning one. i do not think it is a precursor for inflation, but would enteratain any comment.
it just may be more relevant and satisfying to drive and possess a car than look at and possess a coin. IMHO
I've been looking for a website like this. Thx, 57loaded.
I knew it would happen.
What is the total net worth of all Americans citizens these days, with the housing, and stock market down so much? A few years ago it was 50 Trillion , Can you say WERE BANKRUPT???
By Dawn Kopecki and Catherine Dodge
July 20 (Bloomberg)
-- U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.
The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today.
“TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform.
Treasury spokesman Andrew Williams said the U.S. has spent less than $2 trillion so far and that Barofsky’s estimates are flawed because they don’t take into account assets that back those programs or fees charged to recoup some costs shouldered by taxpayers.
“These estimates of potential exposures do not provide a useful framework for evaluating the potential cost of these programs,” Williams said. “This estimate includes programs at their hypothetical maximum size, and it was never likely that the programs would be maxed out at the same time.”
Barofsky’s estimates include $2.3 trillion in programs offered by the Federal Deposit Insurance Corp., $7.4 trillion in TARP and other aid from the Treasury and $7.2 trillion in federal money for Fannie Mae, Freddie Mac, credit unions, Veterans Affairs and other federal programs.
Govt.'s potential Wall Street, bank support $24T
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
roadrunner
here is more
GS the Great American Bubble Machine
this is long article FWIW
HSBC Fails To Deliver On Comex Contract?
Well, theres a lot of activity along the axis, gold moving nearly $50 down then $50 back up to $950 so there's some play in there for the players but they aren't talking, they're playing. The item of note is the "wobble" in spot price, its range and its speed of movement; sort of wound a little tightly methinks. I guess that once the physical supply gets just a little bit tighter and the reality of just who has what physical metal starts coming a little more into focus then physical may well be much more sought after in a very big way. If gold gets really hot, look for the O Crew to get active. Gold is good and cash is king, keep 'em where you can get at 'em!
JMHO
roadrunner
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
"...it shall be unlawful for any person...directly or indirectly...(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person...in connection with (1) ...a transaction for the purchase, sale or delivery of silver bullion, gold bullion, bulk silver coins, bulk gold coins...pursuant to a standardized contract commonly known to the trade as a margin account, margin contract, leverage account, or leverage contract
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
Mike Shedlock on the 3 different methods to calculate CPI
Another look at CPI through the eyes of noted deflationist "Mish." He brings us some very valid points that have had me wondering for a couple of years. In particular, I knew that the shift from home costs to "imputed owner's rent" in 1983 would understate inflation during times of rising home prices and falling rents. Mish agrees that this is what exactly happened from 1983-2007. That is, that the govt's CPI-U woefully underestimated inflation up until a couple of years ago. But now, with home prices falling, and rents being stable or even rising, I would have expected John Williams' shadowstats CPI-sgs alt. to close the gap with CPI-U or actually fall below it. Since shadowstats sgs-alt uses the 1980 methodology with home prices, and those home prices make up 40-50% of CPI-U, one would assume that this formula should be closing the gap with the CPI-U.
Mish also tosses in the Case-Schiller housing index in place of the housing/rent input in the CPI-U to come up with a modified CPI-CS. Not surprisingly, this shows a much lower CPI than either of the other methods. This modified index is a deflationist's dream come true.....-6% CPI. But it still is something to ponder.
In a nutshell, the govt's CPI-U is geared to understate the housing portion of CPI during periods of home price appreciation, and is possibly geared to overstate inflation while home prices are falling (rents stable or rising). Those 25 years of understatement have come with a heavy price.
This leaves some questions unanswered. The 1980 formula (SGS-alt) should be closing the gap with the govt's CPI-U that uses imputed rent. Also, shadowstats "pre-Clinton" 1990 formula that uses imputed rent should be quickly closing the gap vs. their 1980 model....it's not. I sent an email to shadowstats on some of these questions to see if they could clarify things.
roadrunner
I guess there is no reason for the Chinese not to buy American debt as long as they can turn around and but up hard assets around the world?
China to deploy foreign reserves
By Jamil Anderlini in Beijing
Published: July 21 2009 19:09 | Last updated: July 21 2009 19:09
Beijing will use its foreign exchange reserves, the largest in the world, to support and accelerate overseas expansion and acquisitions by Chinese companies, Wen Jiabao, the country’s premier, said in comments published on Tuesday.
“We should hasten the implementation of our ‘going out’ strategy and combine the utilisation of foreign exchange reserves with the ‘going out’ of our enterprises,” he told Chinese diplomats late on Monday.
The “going out” strategy is a slogan for encouraging investment and acquisitions abroad, particularly by big state-owned industrial groups such as PetroChina, Chinalco, China Telecom and Bank of China.
Qu Hongbin, chief China economist at HSBC, said: “This is the first time we have heard an official articulation of this policy ... to directly support corporations to buy offshore assets.”
China’s outbound non-financial direct investment rose to $40.7bn last year from just $143m in 2002.
“Everyone is saying we should go to the western markets to scoop up [underpriced assets],” said Chen Yuan. “I think we should not go to America’s
Yeah, we could sell them Fannie Mae and AIG in a package deal.
<< <i>So -- sell 'em a fake company! >>
You'll need to be more specific; they're all fake now days.
They once existed to produce a profit for the shareholders but now
the shareholders are other corporations and they all exist to enrich
the CEO. They used to make products that were sold at a fair price
so that both the buyer and the company might profit. Now products
are ancillary and only exist to entice some sucker into paying far more
than the real value so the brass can get rich yesterday.
We should make the Chinese take all our companies and then the
the CEO's will ship the jobs back to this country.
What's a military for in the 21st century?
Chou En Lai (sp?) said it - "The capitalists will sell us the rope that we will use to hang them with".
If I were the Chinese, I'd be spending those dollars on something finite and valuable, too.
The question is, when do we get our country back?
I knew it would happen.
Home resales in the U.S. rose in June for a third consecutive month
Edited to add----this is all potentially good for PM's as expectations for lower prices abate and people now focus on increasing prices, ie inflation.
Knowledge is the enemy of fear
Home sales include foreclosures, bank auctions, bank to bank and bank-broker sales only mask the real number of sales to primary owners (ie real living dwellers). Let's also add in the fact that unemployment will continue to grow beyond 2009, people will be spending less, and banks are not yet showing any increased signs of loosening requirements for home buyers. Following the 1988-90 housing boom it took 5-6 years to work off that froth. And the recession officially ended several years before home prices bottomed. What it really took was the FED pumping in lots of money into the economy starting in 1996. So far, we've had a very short 2 year housing correction, but in the worst recession (or depression) since the 1930's. This is not 1991-1993. How many years did it take home prices to recover from the 1930's?
Maybe we get a slight housing lull here as the SM perked up and a few green shoots seemingly sprouted. But the residential mortgage resets start to hit full bore into 2010 along with CRE. A calm before the next storm. Don't bet the farm on any stats coming out of official govt, state, or RE organizations. No better than China's. The game is all about perception and misdirection, not accuracy.
roadrunner
US home sales 06/09
"How many years did it take home prices to recover from the 1930's?"
There really wasn't any booming growth until after the war and really stuff started cooking in the early 50's so maybe 20 years from 1933 or so but it wasn't so much because of housing recovery as it had been known up to that point. The industrialization for WWII got a lot of people employed after the devastating 30's and they needed houses other than the apartment/row house slums that were so abundant at that time. Folk migrated from the Hoovervilles into cookie cutter houses as the war geared up and folk got jobs, then people started working with getting single housing for the masses other than the apartment complexes that had filled that role previously.
It seems that this act got the federal mandate or authorization and intent to build mass housing other than apartments and regulate its growth; this was in 1937.see section 9 As the subdivision concept became more clear in the mid/late 40's then individual home ownership became more achievable if folk had jobs and with good employment came good jobs and more subdivisions.Levittown, first U.S. subdivision 1946 The more money you make, the better subdivision you could live in...it was all good. It wasn't so much a change in degree but a change in kind.
By the 50's housing hadn't so much as recovered as it was reborn as something different and that became modern housing so there is really no comparison with real estate housing recovering from 1930, it became entirely different. From that time in the 50's things have cooked at a considerably vigorous pace. Even now there is considerable new home construction where there is demand. Places with no demand...hummmmmmm.
Probably a generation or more. And I fully expect prices for Cali real estate to take possible 2 generations to get back to their 2006 highs. Other areas of the country will do quite well though.
Just as many tech stocks will take decades --if ever- to reach their 2000 highs, there were other areas of the stock market that did incredibly well, such as energy or materials in the years hence. There were even a few tech stocks that did incredibly well since 2000, such as RIMM, which even though down 50% in the last year is still up 150% from its 2000 peak.
One thing this country will have going for it vs our friends in Europe and Japan and Russia is we will have a growing population, thus increasing demand for housing. In Japan, it is projected that their population could be 20% lower in 30 years. That means they will have 20% too many houses. What will that do to Japanese real estate. Europe faces a similar, though less drastic, problem.
Knowledge is the enemy of fear
Fort Knox, Fort Hocks, Fort shocks.
Longacre IRS thread link - GLD profits taxed like bullion
A link above to Longacre's thread where the IRS ruled that ETF's backed by the physical PM (such as GLD, SLV) are treated as if they are bullion...hence capital gains subject to the same 28% rate that physical bullion is.
High Frequency Trading is a Scam.....yeah, so what else is new?
Home prices following a peak in 1928 recovered their value by 1934-1935 but see-sawed from there for many years. But the bottom in nomimal home prices came in 1932 (4 years from the peak). That's why I don't think 2009 will be the bottom for home prices.
Home sales rising don't necessarily mean things are getting better. Look at metro Detroit where 60% of home sales are foreclosures and median Detroit city sales are $6,000/home! The below was taken from Mish's website. He notes that many decent, livable homes in the Detroit area are barely worth 5 figures. Banks are walking away from more foreclosures because the costs to finalize the foreclosures are just not worth the effort/costs. Detroit isn't the only city that will have this type of problem. When the Mrs. goes shopping for milk, bread and eggs, she just might be able to toss in a 2 or 3 bedroom home for free as a bonus.
Metro Detroit home sales rose by 12.6% in May as compared with last year, yet home prices continued their fall -- an indication that the market hasn't hit bottom yet.
Overall, 5,955 homes were sold in May, compared with 5,288 sold in May 2008, according to Realcomp, a Farmington Hills-based multiple listing service. The median sales price for homes sold in May was $50,000, a 44.3% drop from $89,700 in May 2008.
Foreclosures continue to drag down prices. In May, foreclosure sales accounted for 60% of all homes sold. And the median price of foreclosed sales in the metro area was $26,400 compared with a median sales price of $110,000 on non-foreclosed homes.
In the city of Detroit, the median sales price in May was $6,000, down 29.4% from May 2008.
roadrunner
The 26 million un/underemployed is probably pretty accurate as about 9%-10% seems to be accepted as the current rate and with 300-350 million living here, it is believable and maybe even a little bit understimated. At some point, that level of unemployment has to dampen the income and the growth potential of small businesses but I have to wonder if there is a possible bail out for these folks; maybe for the banks holding the notes, but seemingly very doubtful for the folks with the small businesses IMHO.
Small business is the prey for every taxing entity and every fee that can be generated by our agencies and govs., not to mention regulatory and compliance mandates, local initiaves such as tirz's and the like where the taxed businesses get to pay for the non-taxed ones, federally mandated healthcare and minimum wage, the plethora of "things" that small business gets hit with that have absolutely nothing to do with a small business making money and more about what the gov and agencies can get from small businesses. Small business is the plankton of the ocean, the form of commerce that all the other higher food chain populations depend upon. Yet, if history serves as an example, the small businesses will be the last, if ever, to receive any bail out.
It's peculiar because the govt. acknowledges that small business is the bedrock of the US industry, the growth and job generator that drives our economy but they get squat when it comes time to get some help. Well, you could argue that the SBA is there for them but what...you borrow money from the government to expand your business in a shrinking economy...nah. I would think it would be much more prudent to position ourselves for a pull back in goods and services rather than anticipate that we can maintain the status quo via government bailouts, at least for the small businesses; the banks maybe, but not the small businesses. Hey, I've got an idea...what if we give the banks money to cover the bad commercial loans and then they will loan the money to small businesses to get them going again, like we did with the housing industry? Hummmmmm...but, did they bail out CIT?
JMHO
The cost of food has kept within the rise of wages but homes, cars,
gold, and gas have not. It's the bigger ticket items that have really outpaced wages over the past 40 years. The cost of education, and healthcare aren't included here but they would more closely resemble the rise in home prices more than anything else.
Average Cost Of New Home Homes
1930 $3,845.00 , 1940 $3,920.00, 1950 $8,450.00 , 1960 $12,700.00 ,
1970 $23,450.00 , 1980 $68,700.00 , 1990 $123,000.00 , 2008 $238,880 ,
Average Wages
1930 $1,970.00 , 1940 $1,725.00, 1950 $3,210.00 , 1960 $5,315.00 ,
1970 $9,400.00 , 1980 $19,500.00 , 1990 $28,960.00 , 2008 $40,523 ,
Average Cost of New Car Cars
1930 $600.00 , 1940 $850.00, 1950 $1,510.00 , 1960 $2,600.00 ,
1970 $3,450.00 , 1980 $7,200.00 , 1990 $16,950.00 , 2008 $27,958 ,
Average Cost Gallon Of gas
1930 10 cents , 1940 11 cents , 1950 18 cents , 1960 25 cents ,
1970 36 cents , 1980 $1.19 , 1990 $1.34 , 2009 $2.051 ,
Average Cost Loaf of Bread Food
1930 9 cents , 1940 10 cents , 1950 12 cents , 1960 22 cents ,
1970 25 cents , 1980 50 cents , 1990 70 cents , 2008 $2.79 ,
Average Cost 1lb Hamburger Meat
1930 12 cents , 1940 20 cents , 1950 30 cents , 1960 45 cents ,
1970 70 cents , 1980 99 cents , 1990 89 cents , 2009 $3.99
________________
How Much things cost on Aug 15th,1971 vs. Today
Dow Jones Industrial Average
890 or 25 oz gold
9000 or 10 oz gold
Average Cost of new house
$25,250 or 721 oz gold
250k or 277 oz gold
Average Income per year
$10,600 or 302 oz gold
70K or 77 oz gold
Average Monthly Rent
$150.00 or 4.3 oz of gold
$824 or 1 oz of gold
Datsun 1200 Sports Coupe
$1,866 or 53 oz gold
$28,400 or 31 oz gold
roadrunner
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
Let me see if I can explain this simply:
A customer is seeking bread. He is willing to pay $3 per loaf, although I, a seller of bread, do not know this. I offer the bread at $2 per loaf and he accepts. The market price is $2 per loaf and I sell them at this price, because I was unaware of his willingness to pay $3. Simple enough so far.
Now lets investigate how Goldman Sachs has managed to unjustly enrich themselves by $100,000,000. per day!! A customer places an order to buy 100,000 shares of a stock at a limit price of $3 per share. He will buy all shares offered at less than $3 per share. Goldman sees an offer to buy 100,000 shares of this stock, but they have no idea of the limit price. The current market price is $2 per share. They respond to the 'buy' order with 12 sell orders:
100 shares at $2.10
100 shares at $2.20
100 shares at $2.30
all the way up to
100 shares at $3.20.
Electronically the buyer scoffs up all of the offers that offer the sale up to the $3 limit. This is done very quickly (via computer), and the buyer is not able to adjust his limit to $2.10 because of the speed involved (probably less that one second). Goldman now knows the limit price of the buyer. They immediately offer 99,000 shares at $3 per share and it is bought at $3 per share. (probably takes another second). The buyer gets his stock and Goldman makes an extra $99,000 in two seconds. Using this method, Goldman has increased their profits by $100,000,000. per DAY!!
It is easy to gamble if you know the dealer's hole cards. It is easy to make obscene amount of money if you know the price 'that traffic will bear'. Merely by using the speed of computer trading, they determine something they should not know, some confidential information. And with this illicit knowledge, they make billions.
Proud recipient of two "You Suck" awards
An this is nothing new, nor unique to Goldman.
Bid: 1,215.80 Ask: 1,225.80 Change: 33.40
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mariner67, and Mikes coins
roadrunner
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mariner67, and Mikes coins
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
Isn't there a heavy schedule of Treasuries this week? Of course, they are going to pump up the dollar for the occasion. It only makes things worse, as ALL the players know the game by now.
CNBC says that housing is turning around. Just remember that they are saying it right now with great enthusiam. This is July 28, 2009 - for the record. Jim Sinclair is saying just the opposite.
Someone has to be wrong.
I knew it would happen.
Maybe silver will turn out to be a better deal than gold.
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
<< <i>Huge, scary, but brief US$ rally about to commence.
Isn't there a heavy schedule of Treasuries this week? Of course, they are going to pump up the dollar for the occasion. It only makes things worse, as ALL the players know the game by now.
CNBC says that housing is turning around. Just remember that they are saying it right now with great enthusiam. This is July 28, 2009 - for the record. Jim Sinclair is saying just the opposite.
Someone has to be wrong. >>
They are both wrong as I said it 4 month ago.
But really, I do think they are both wrong as RE will most likely trade sideways for the next 2 years. A little up and a little down from here for most markets. Some will do better, some will do worse, but on the whole the downside damage is mostly over. Now it is wound licking time.
Knowledge is the enemy of fear
<< <i>Thats what I was thinking too. I just got another 60 2009 silver eagles just to make sure! >>
In the last 3 weeks I swapped out of 2,700 generic 100 oz. Silver bars into 4 sealed green monster Eagle boxes and 3 sealed yellow Maple boxes. I also picked up 140-2009 Silver Eagles. I still have roughly 1,000 ounces of 50-100 oz. Silver bars that I might swap out in the next couple weeks.
<< <i>Max Keiser is damn hilarious...and right on the money.
That was a good interview, it's refreshing to see someone call a spade a spade.