Casey Files:
This week in 'The Room'
Doug Casey
International
Speculator
written Mar 14, 2008
posted Mar 17, 2008
Welcome to "The Room"
The subscribers-only home page of Casey Research.
Dear Reader,
You don't need me to tell you,
but the $1,000 mark is the latest to fall beneath gold's mighty
rise.
Even so, as a benchmark, the
number $1,000 is meaningless. It represents no new high in the
inflation-adjusted prices that count. And it is not attached
to a magic switch that assures, once flipped, the price must
subsequently march to the $1,200 forecasted for this year by
our own Bud Conrad. (Who is now poking with his fork at the suspicious-looking
meat resting on his dinner plate in China where he is visiting.)
Of course, decisively taking
out the $1,000 level will, undoubtedly, result in yet more features
in the mainstream media and cause yet more regret in the minds
of those who have dumbly stood by while watching gold break through
the whole numbers divisible by 100. In time, these factors will
contribute to a mass migration towards the yellow metal.
But the real significance is
one I briefly touched on in closing last week. To wit, so far
this quarter, gold has consistently traded much higher than the
average price received by the highly visible major gold producers
in breaking the right sort of records last quarter.
A bit more detail:-
In the fourth quarter of 2007,
despite recent comments by certain less-than-attentive observers
that the company was still hindered by hedges, Barrick Gold,
the world's largest gold producer, was able to realize an average
price of $799 per ounce of gold it sold. (That's actually about
$10 higher than the average price that gold traded at during
the quarter.)
Against those revenues, the
company had an average cost per gold ounce sold of just $375,
resulting in operating cash flow of some $748 million, better
than double that from the previous quarter.
Now, let's jump ahead to some
point in late April when Barrick releases its first quarter 2008
results. If prices hold at the average for the month to date,
then the average price of gold for the quarter will ring in at
$930, or $141 higher than the average price for the last quarter.
Assuming no significant change in cost structures over the quarter,
and assuming the same level of sales as last quarter, Barrick's
first-quarter operating cash flow numbers will rise by another
$300 million, pushing the total over the $1 billion mark for
the first time in the company's history.
Repeat this record-breaking
story pretty much across the industry (a story we continue to
follow in more detail in BIG GOLD, which this month extends
its analysis into big silver; ...learn
more) and you have a story that will tell very, very well
when compared to the smoking holes that most sectors have left
in the brokerage statements of their erstwhile adherents.
Waxing metaphorically, the
herd is slow to move, but as the fire of crisis grows to the
point where it is visible to all, the herd will move to the safety
of gold. We'll be waiting.
The Best-Laid Plans
In recent commentaries, I have
mentioned how it is that the fates of nations sometimes hinge
on an accident or an unexpected event that renders the best-laid
plans worthless, sometimes with catastrophic results. This week's
honorable mentions go to...
Hillary Clinton. Recently we learned that the young
girl who was at the heart of the most successful political ad
of the season, the one showing her sleeping in the middle of
the night and the phone ringing threateningly. As you may recall,
the voice-over artist rhetorically asks a question along the
lines of, "Who do you want to be there to answer it; youth,
or that seasoned veteran of such things, "Ma Hil" herself?"
Given the wide acclaim the
ad received, followed by two quick primary wins, I had thought
Hil's reinvigorated efforts at doing in Mr. Obama had finally
succeeded, and that, like the victim of an alley-way knife attack,
he was stumbling toward his fate.
But all that changed when the
girl, now a young woman, came forward and announced that she
was, in fact, an ardent Obama supporter. And even worse for the
ever-aspiring Mrs. Clinton, the young actress, perhaps hoping
to expose her talents beyond feigning sleep, was only too happy
to accept every opportunity to appear on various talk shows and,
using her full dramatic range, to espouse the dim view she took
of the Clintons' ad.
It is hard to say, yet, if
this blunting of the Senator's momentum will prove the final
stumbling block, but it very well could. One thing is for sure,
voters in the remaining primary states won't be further swayed
by that particular ad. And, so, perhaps, the history books will
soon record Mr. Obama as the next president. Now some of you
likely don't think that this is catastrophic, and I don't want
to suggest it will be (though I can say that I am already no
fan of his proposed changes in tax policy)... but if he does
become president and his term in the highest office does turn
out to be catastrophic, then historians may point to a sleeping
girl when publishing dissertations that include "what if"
scenarios.
The Beijing Olympics. While I haven't thoroughly researched
the topic, general commentary has it that China is viewing the
upcoming Beijing Olympics as a matter of some national pride...
a "coming out" party of sorts, during which they shall
display the country's many marvels for all the world to gawk
at. Proof of how serious they are about making a good impression
may be provided by the fact that they are moving entire industries
in order to reduce the city's infamous pollution. And, in an
attempt to outdo all others that have come before, they were
even going to risk life itself to have the Olympic torch dragged
up to the very top of the world... Mt. Everest.
But that may have been the
one bridge too far, the misjudgment that catches the attention
of the fickle finger. For, as you are probably aware, since 1951
cartographers have been obliged to include the north side of
that formidable mountain on a map within the borders of China,
and not the independent nation formerly known as Tibet which
the Chinese overran in that year, causing some consternation
among many, most vocally Richard Gere and his kindred spirits
in Tibetan monkdom.
This week, we read that certain
parts of Tibet are aflame, and that Chinese troops have moved
in to provide the monks with some on-the-spot reeducation. While
I can't know, I suspect the odds now favor things going from
bad to worse for the Chinese Olympics. If I'm right, then next
up we'll see the government of some country or another announce
it will, in protest, not participate. It is not inconceivable,
even, that the increasingly politically correct United States
could bow to pressure to yank the yanks and who knows where things
lead from there. I guess we'll have to read the history books
to find out.
(When dealing with political
topics, one should always tread cautiously. My references to
President Obama are, of course, pure conjecture. Senator Clinton
has shown herself to be a formidable opponent and so cannot be
written off at this point. Likewise, while I continue to think
the odds are long against McCain, even a victorious campaign
by that elder songster is not out of the question. But forced
to it at this point, I'd have to give the tip to Obama. And lest
you might wonder which presidential aspirant I actually favor,
I will go on record here as being firmly on board for "None
of the Above.")
Geologists Rule!
You may have seen the article
this week about the soaring demand for geologists, a story we
have been following in the International Speculator for
some years. The bottom line is that Canadian schools are now
graduating just 1,200 geologists a year, which stacks up against
demand for better than 9,000. (University programs for geology
in the U.S. have all but disappeared in favor of courses related
to saving the environment.)
As a result, the starting salary
of a freshly turned-out geo now exceeds that earned by a similarly
launched MBA by a fairly considerable margin.
While I am pleased as punch
to see our hard-working friends in the business being so handsomely
rewarded, there is a much more important point to be made here.
Namely that with industry demand for geos now outstripping supply
by more than 7.5 to 1, the logical move for the producers, which
must continuously replace their depleting reserves, is to become
increasingly more aggressive about acquiring the junior exploration
companies, especially those topped off with good projects.
There is an old adage that
says "The best place to find a mine is next to another mine."
These days you might modify those pearls of wisdom by saying,
"The best place to find your next mine is not by kicking
a lot of rocks, but by scrolling through the 'Has Metal'
ratings of the exploration stocks followed in our International
Speculator." (Has Metal being how we indicate
which of those companies we follow already have a significant
discovery under their belt, and are, generally speaking, just
waiting to sell it off to a major.)
In other words, while the producers
can start from scratch and try to find the talent needed to discover
their next major gold deposit, they will likely find it more
efficient and time saving to simply buy up an exploration company
that already has the goods. It is not too late to get positioned
in those companies, but it soon will be.
[Warning - blatant pitch coming! Start now, and within a couple of
minutes you'll be viewing the entire list of International Speculator
'Has Metal' recommendations. It's as simple as taking us up on
our fully guaranteed trial subscription offer.
If at any point during your
first 3 months, you don't find the International Speculator
to be worth every penny you pay, we'll refund all those pennies...
so you have nothing to lose for giving it a try. Frankly, if
you're not already a subscriber, I can't see why you wouldn't
sign up today. Follow the link just below...
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Expert Reveals Wolves Pose No Danger
to Sheep
This week I read with some
amusement that Standard & Poor's had sounded the "all
clear" signal, stating that the worst of the subprime crisis
was over. Kevin Brekke, our Switzerland-based editor, came across
a similar item earlier in the week and felt moved to write. Here
it is:
If you were a hesitant sheep,
alone in a field, at dusk, nervously scanning the shadows for
anything resembling a pair of fangs or pointed ears, would that
headline provide some comfort, some confidence, possibly lulling
you into relaxing, letting your guard down, and munching on some
tasty clover? Uh-huh, I thought so.
Well, then, how about this:
Economists See US Avoiding Recession
or this,
Experts' Forecast Sees No Recession
If you were a hesitant small
investor, feeling alone and in the dark about the markets and
the economy, nervously scanning the headlines for anything to
help you protect your life's savings, would that headline provide
some comfort, some confidence, possibly emboldening you to snap
up some bargains in today's beaten-down stocks? And maybe buy
some California real estate, and, heck, why not head over to
Electronics World and see what's on sale?
Do you think that maybe that's
the reaction those headlines were designed to trigger?
I must admit that, although
suspect from the start, the headline got my attention. So I reviewed
the article and guess what - the author had some other enlightening
and insightful observations on the economy, such as:
- The U.S. may experience negative
growth for 1Q2008
x
- Sluggish job growth for balance
of '08
x
- Housing doldrums to persist
"for a very long time"
x
- GDP growth for the year of
1.5%
Now, any reasonable person
digesting this report, possessing but a modest degree of objectivity,
could readily conclude that the author would only admit to what
can't be denied - the current environment of bad to worsening
conditions - and then supplement it with encouraging predictions
of what is just a quarterly report or two away. And if the economy
is to grow at an annual rate of 1.5%, with the first quarter
likely to be around (or below) zero, then the next three quarters
have some heavy lifting to accomplish, a scenario that looks
increasingly unrealistic.
But a recession? No.
My point here is that the headline
for this report could just as misleadingly have read:
Experts' Report Sees Negative First
Quarter GDP
But then that headline doesn't
have quite the same reassuring tone, now does it?
One editor's version of this
story that hit the wires mentioned the author of this report
was an academic and an economist. A quick Internet search of
the author uncovered some "coincident indicators."
The author is a Ph.D., graduated Princeton, a published academic,
holds a university department chair, and is "a frequent
visiting scholar at the International Monetary Fund and the Board
of Governors of the Federal Reserve System." Sound familiar?
As a random comparison, Ben
Bernanke is a Ph.D., graduated Princeton, a published academic,
held a university department chair, has contact with the IMF,
and is the head of the Federal Reserve System. A coincidence?
A published yet obscure and
mostly unknown economist writes a report and Wham! it hits the
AP news wire and web pages like a topless photo of Paris Hilton.
Now how do you suppose that happened? And who do you think shaped
the headline?
With the number of vested interests
intent on continuing with the status quo, the confidence game
will be kept on life support for as long as needed, and by questionable
means. The Fed, the dollar, our government, our banks, our economy,
the markets, all rely on the confidence of those dependent on,
and profiting from, more of the same. Numbers are fudged, statistics
skewed, data manipulated, balance sheets doctored, news sanitized,
and headlines managed. Backing and filling operations run around
the clock to keep the façade of confidence intact.
The new realities we face will
require more than scanning the headlines and watching a few minutes
of BigFinancialChannel. Investors today, of all stripes, will
need the vigilance to fully vet the information on which they
base their investing decisions.
And that's exactly what we
at Casey Research strive for every day. As it becomes increasingly
difficult to separate the wheat from the chaff, and avoid getting
the chaff, investors are supplementing their universe of ideas
with the help of newsletter advisory services.
But for those stuck in the
old paradigm, blind to the shifts occurring around them, well...
Hey! Look over there, fellow mutton-chops. There's some juicy
Google shares. Let's munch on those for the moment.
How You Know When the Economy
Is in Trouble
This week the moving trucks
pulled up in front of the offices of Carlyle Capital Corp, the
publicly traded fund operated by the Carlyle Group. The trucks
were sent in by the folks down the street at JPMorgan Chase &
Co and Citigroup, among others, when Carlyle failed to meet $400
million in margin calls. The long and short was that they seized
Carlyle's assets in an attempt to squeeze what remaining value
was left in the firm, yet another victim of the ballooning credit
crisis.
Now, in case you are unfamiliar
with Carlyle, they may be the best-connected firm in the world,
boasting a current or former board of directors and major investors
that include a veritable Who's Who in the World.
Among the listed members, I
found...
Former President Bush, former
British Prime Minister John Major, Saudi Prince Al-Walid, George
Soros, James Baker III, Colin Powell... the list literally goes
on, and on.
These are, without exaggeration,
among the most powerful people in the world. So why would the
major NY banks, which owe so much of their success to their political
connections, engage in such a distinctly unfriendly act as calling
in the $400 million and, by doing so, essentially torpedo Carlyle's
fund beneath the water line?
All I can come up with is that
this is a sign of the deep, deep trouble these and other institutions
are in. While the heirs of JPMorgan's carefully built empire
may horribly regret the limited choices left to them, the knowledge
that there are only a limited number of seats left in the life
boat has guided them in their decision, I believe, to place a
firm hand on the expensively coiffed head of Carlyle and shove
it underwater in the scramble for safety.
David Rubenstein, a principal
in Carlyle, sat for an interview with Bloomberg, in which, they
report, he was heard to say...
"We have made a lot of
money with, and for, these banks and this is a hiccup in a 20-year
relationship. We don't think any of them have any animus [sic]
toward us and we're not antagonistic toward them."
Using our top secret Casey
Quote Translator, Model X-III, we uncover that what Mr. Rubenstein
was actually saying was...
"The ingrates, how dare
they! Who do they think they are messing with? Oh, boy, oh boy,
just wait until the next time the bastards want something from
the government, any government, then we'll make them pay! YOU
HEAR ME! IT WILL BE NOTHING BUT DARKNESS AND PAIN!!"
Watch out below...
Are You a Skeptic?
Doug Hornig, who edits our
Daily
Resource PLUS, sent in the following item that I thought
instructive and worth sharing
It occurs to me that Internet
credibility is a subject of interest that might fit in the Room
sometime, or Doug's End Notes in the International Speculator.
We've become so conditioned to getting information from the Net
that it can interfere with our good common sense and healthy
skepticism. That's why I always keep Snopes.com close to hand.
Case in point: there's an email
currently making the rounds. I got it from a mutual friend. Now
I love the guy and respect him quite a lot, but we do disagree
on some topics about which I find him, well, myopic. He will,
it seems, believe anything that supports his view of the terrorist
threat or trashes liberals. Thus he sent me a related email,
from which I excerpt the following:
This week, the University of
Kentucky removed The Holocaust from its school curriculum because
it "offended" the Muslim population which claims it
never occurred.
This is a frightening portent
of the fear that is gripping the world and how easily each country
is giving into it.
Now, that seemed unlikely to
me. I don't know much about Kentucky, except that they usually
have a terrific basketball team, but I couldn't imagine that
a major American university would do such an absurd thing. So
I went to Snopes and found that, of course, I was right to be
skeptical. It's a hoax.
What's especially fun in this
case is how the hoax evolved. It's a bit like the old game of
Telephone. The story got started when the history department
in one small school in northern Britain (the UK) did in fact
stop teaching the Holocaust. Someone picked that up and started
the rumor that the same thing applied to all UK schools. Then
some moron saw that story, thought that UK meant University of
Kentucky, and started spreading that rumor.
So, as always with the Net,
caveat emptor.
David again.
I would extend Doug's comments to include being skeptical about
your sources of information. I have to bite my cheek when I travel
around the web world looking at precious metals-related content,
and come across ads for various information services being offered
by people that I know for a fact have next to no knowledge on
the topic, but have only just opportunistically jumped onto the
bandwagon. Even worse, there are any number of such services
being promoted by people paid to tout the stocks they wax so
poetically about. I grit my teeth, wanting to write articles
here naming names and pointing fingers, but resist... because
who needs the legal hassle.
But, as you are skeptical about stories you receive in emails,
so should you be skeptical about the information services you
choose to help guide you in your investing.
New Trend: The End of Printed Books
While it dates me, I can still
remember the smell that emanated from the very first fax machines.
And the joy of being able to move from a manual typewriter to
an IBM Selectric.
Even more telling, I can recall,
having been involved in a business requiring printing, slogging
down to the typesetters and watching as they arranged lead type
into frames in preparation for printing.
I remember 8-track audio tapes
and know that my children will look back in the future and similarly
remember VHS and cassette tapes in much the same way.
What's next? Say goodbye to
printed books.
With Amazon's über-successful
launch of the Kindle electronic book reader leading the way,
and showing the way... coupled with the increased environmental
sensibilities now gripping the minds of humanity, the idea of
cutting down forests to fill libraries is an idea whose time
has passed.
Especially when you consider
that, with Kindle, you can actually download full-length books,
wirelessly, from pretty much anywhere, in less than a minute.
Now nobody loves a proper book more than I, but the idea of loading
up your reading device with the latest book you want to read
while nestled comfortably in your chair, or while waiting in
the airport for yet another delayed fight, is pretty appealing.
Finish the first book in a
series and want to go right on to the next? Click and you are
good to go.
And further iterations of the
readers are now inevitable, given the demonstration of solid
market demand. For instance, you could sign up to automatically
receive notification that the latest books by your favorite authors
are now available.
In short, I think the book
readers are here to stay and will soon dominate, leading to the
demise of all but art books.
What are the consequences of
this shift? For starters, there is probably a big opportunity
coming for whichever company captures the space. At this point,
Amazon and Sony are in the lead, but it could easily be some
other company that takes the lead (never count out Microsoft
or Google when it comes to this sort of thing). It could bring
the cost of books down.
Of course, on the downside,
traditional book printers will need to change or die.
In time, of course, we'll somehow
see this feature built into an all-in-one device (phone, Internet,
book reader)... but I think that is some years away because no
one wants to read a book on a tiny screen.
For the heck of it, if you
have any thoughts on how an investor might play the end of traditional
books (or wish to disagree with my hypothesis), drop me a line
at david@caseyresearch.com and I'll publish the best ideas.
(Since we're on the topic of
personal communication technology, going on nothing other than
a couple of ads I have seen during my rare viewing of commercial
television, I would say that Sprint is in trouble. They are heavily
advertising a two-for-one deal on a phone that looks like some
cheap toy. Its primary feature seems to be a slide-out keyboard
that allows you to type in small type on a tiny black and white
screen... a sign that the company is well out of touch with the
times, if you ask me.)
End Notes
I have another 10 pages of
notes, but less time than required to do them justice, so I will
summarize some of the other items that caught my eye this week...
- Making the World a Safer
Place. The Consumer
Product Safety Commission is being revamped, restaffed and its
funding boosted. As part of this new initiative, the cap on fines
that the agency can now levy against companies failing to report
product hazards will rise from $1.8 million to as much as $20
million, if the Senate bill passes. Using standard operating
procedure on these things, Senator Pryor, the bill's sponsor,
commented, "The vote is a victory for the health and safety
of children."
About time, some will say.
Just more regulation and more burden on U.S. manufacturers, I
say. When was the last time you or someone you know was hurt
by a faulty product?
- Running out of gold. I came across some interesting comments
this week by Kevin McArthur of Goldcorp. Here's an excerpt of
his remarks...
Goldcorp Inc expects the price
of gold to top $1,000 an ounce and stay there for a long time,
a development that will allow the company to improve operating
margins, Chief Executive Kevin McArthur said on Monday.
In a wide-ranging interview
at the Reuters Global Mining Summit, McArthur, who is also president
of the Canadian gold producer, said he thinks the price of gold,
which was at $973 an ounce on Monday, is not "anywhere near
a bubble.
"We are not replacing
the reserves that we're mining, and yet demand continues to grow
worldwide. We're going to run out of gold," he said of the
global gold industry.
- Derivatives Next? The good folks at moneywatch.com had
an interesting article discussing Warren Buffett's dim view of
the size and scope of derivatives, and postulating that if that
bubble starts to deflate, things will go from catastrophic to,
well... whatever is two or three times catastrophic. The author,
Paul Farrell, kindly provides the latest data from the Bank of
International Settlements to illustrate just how big the derivatives
bubble, now at $516 trillion, really is...
- U.S. annual gross domestic
product is about $15 trillion
x
- U.S. money supply is also
about $15 trillion
x
- Current proposed U.S. federal
budget is $3 trillion
x
- U.S. government's maximum
legal debt is $9 trillion
x
- U.S. mutual fund companies
manage about $12 trillion
x
- World's GDP for all nations
is approximately $50 trillion
x
- Unfunded Social Security and
Medicare benefits $50 trillion to $65 trillion
x
- Total value of the world's
real estate is estimated at about $75 trillion
x
- Total value of world's stock
and bond markets is more than $100 trillion
x
- BIS valuation of world's derivatives
back in 2002 was about $100 trillion
x
- BIS 2007 valuation of the
world's derivatives is now a whopping $516 trillion
- Bank Runs... Dust Bowls
Next? My somewhat more
pessimistic partner, Doug Casey, wrote again over night that...
"The only thing I'm actually pretty sure about is that we're
in for the biggest economic/social/financial/political upheaval
ever." For those of you aware of Doug's solid record in
forecasting these sorts of things, those are words worth noting.
Along those lines, this week
we learned that foreclosures in the U.S. had jumped by 60% in
February, and bank seizures doubled (a category that now includes
the snowboard shop down the street).
Further evidence that this
downturn is taking a turn towards Doug's point of view, I came
across two items of interest.
The first had to do with a
long line-up that formed outside of the Boca Raton Housing Authority
when that institution offered up housing vouchers. The scene
turned ugly, requiring the services of the local constabulary
which these days arrives dressed as if going to war. You can
view the photos
here... and to keep your finger on the pulse, you should.
If you have a similar reaction as I did, you may get a creeping
feeling on the back of your neck.
The second involves a tent
city that the city of Ontario, California set up in a field at
its airport last year, an attempt to help out the area's homeless.
The tent city has now expanded from 20 residents to over 250,
with many, many more trying to get in. The local government is
unsure what to do from here, and so is trying to reduce the influx
by letting in only those with some sort of identification proving
they are from the area. Where does it lead? Where does it end?
I don't know. Photos
here.
- Flat Tax... Hah! Years ago, I had lunch
with Donald Alexander, who had then just retired as the head
of the Treasury. During our lunch, the much younger version of
myself asked him "Hey, didn't the American Revolution start
over the issue of taxation without representation? Well, my generation
never got to vote on income tax, what are the odds of a do-over?"
At which point, I remember him dismissively waiving his hand
and commenting with something that I recall as disdain, "You're
all wet."
While I still like that idea
of a re-vote, I'm not holding my breath. Instead, as discussed
last week, I'd happily settle for a 10% flat tax. But this week,
we learn that if either of the democratic contenders come into
power, taxes will be anything but flat. In fact, according to
Bloomberg:
Hillary Clinton and Barack
Obama both propose significant changes to the tax code that would
add to its complexity. His plan emphasizes income inequality,
while hers seeks to change Americans' behavior.
Obama's proposal would shift
the tax burden toward the rich from low- and middle-income workers.
Clinton proposes targeted tax breaks designed to change the way
Americans use energy, save money and care for elders.
Obama, 46, "seems to have
focused on redistribution," said Michael Graetz, a professor
at Yale Law School in New Haven, Connecticut, and a former Treasury
official.
Clinton, 60, "is proposing
tax credits for everything short of flossing your teeth,"
said Lee Sheppard, a tax lawyer and columnist at Tax Analysts
in Falls Church, Virginia.
The two candidates' plans -
especially Clinton's - would further complicate a tax system
that experts say is already Byzantine. Obama would tweak and
augment current laws, while Clinton would introduce even more
rules by adding at least nine new credits with complex qualification
requirements, phase-outs and sliding scales.
And That's It for This Week
Sorry to have gone on so long, once
again, especially after my comments last week about tightening
things up. But we live in a very busy world just now. [Editor's note: Yes,
these pieces are waaaaaay too long, and readers at 321gold.com,
other than ME, who have got down as far as reading this sentence,
deserve a bloomin' Gold, no - a Platinum Star. This is not said
in jest, I'm serious.]
(Editor's note,
added on Tuesday: A reader did write to complain about the above
comment, which does prove that one reader out of the 106,529
readers (a record) we had at 321gold.com yesterday (Monday),
DID get this far, and that makes it all worth it. :-)
As I often like to do, a quick
check of the screens as I wrap up shows me that gold is holding
strong at $999 and the U.S. stock market is, once again, getting
hammered... with the DJIA down 235 points, erasing the misplaced
optimism that briefly flared after the Fed's $200 billion gambit
to trick the markets earlier this week.
I came across a blog earlier
in the week that was kind of sad. It was populated by day trader
types, every one of them lamenting about the personal pain they
had suffered by jumping back into the financials prematurely.
As they told it, they each had figured things just couldn't get
any worse... only to learn the hard way that, yes, they could.
Elsewhere, I read the views of a pundit, whose name now escapes
me, that earlier this week would have been a good time to buy
Bear Stearns because, according to him, the company was, despite
appearances, a picture of health. At one point today, the market
disagreed so vehemently with his advice that it sent the shares
of the wounded Bear down a record 53%.
And they say gold is risky.
That's it for now. Until next
week, thank you for reading...
David Galland
Managing Director
Casey Research, LLC.
###
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