David Tice was the guy I was thinking of. Thanks for the correction. I knew it was C but I think I have been watching too much Seinfeld since I retired.
Printable View
David Tice was the guy I was thinking of. Thanks for the correction. I knew it was C but I think I have been watching too much Seinfeld since I retired.
[QUOTE=Punter 127; 425947]Federal Reserve has already started QE3, says investor Jim Rogers.
Mr Bernanke said in his annual speech at Jackson Hole on Friday that the country's high level of unemployment. It climbed to 8. 3pc in July. Is a [b][u]"grave concern" [/u][/b]and that the [b][u]"economic situation remains far from satisfactory". [/u][/b]
With the eurozone crisis spreading to all corners of the globe, traditional safe havens have come to the fore. The gold price, for instance, traded above $1, 900 an ounce last year but is now around $1, 689. However, Mr Rogers believe this will start to rise again once governments are forced into restarting stimulus measures.
[b]"Unfortunately, all central banks know to do is to print money. You are going to see more money printing, more debasement of currency and, therefore, the price of gold will go much higher over the course of the decade. The situation with gold is that it has been up 11 years in a row without a down year, which is extremely unusual."[/b]
[url]http://www.telegraph.co.uk/finance/economics/9516957/Federal-Reserve-has-already-started-QE3-says-investor-Jim-Rogers.html[/url]
I guess Rogers didn't get the memo about gold being overpriced, or perhaps the price of a Seersucker suite is going up.
Who to believe?[/QUOTE]I am not a pro when it comes to investing, but what meakes sense is "buy low, sell high". By the way, I missed the boat in February 2011 when gold was around $1200, subsequently, flying almost over the $2000 barrier later in the year. If Israel / US under Romney bombs Iran, I believe you could make some money buying at $1600, conservatively making 20% if selling at $2000.
[QUOTE=Punter 127; 425947]Federal Reserve has already started QE3, says investor Jim Rogers.
Mr Bernanke said in his annual speech at Jackson Hole on Friday that the country's high level of unemployment. It climbed to 8. 3pc in July. Is a [b][u]"grave concern" [/u][/b]and that the [b][u]"economic situation remains far from satisfactory". [/u][/b]
With the eurozone crisis spreading to all corners of the globe, traditional safe havens have come to the fore. The gold price, for instance, traded above $1, 900 an ounce last year but is now around $1, 689. However, Mr Rogers believe this will start to rise again once governments are forced into restarting stimulus measures.
[b]"Unfortunately, all central banks know to do is to print money. You are going to see more money printing, more debasement of currency and, therefore, the price of gold will go much higher over the course of the decade. The situation with gold is that it has been up 11 years in a row without a down year, which is extremely unusual."[/b]
[url]http://www.telegraph.co.uk/finance/economics/9516957/Federal-Reserve-has-already-started-QE3-says-investor-Jim-Rogers.html[/url]
I guess Rogers didn't get the memo about gold being overpriced, or perhaps the price of a Seersucker suite is going up.
Who to believe?[/QUOTE]The price of gold rising is hardly an out-of-consensus call right now although forecasting it will continue to go up for an entire decade is gutsy call given what I know about forecasting. My wire house brokerage has a gold forecast of $2000 in the next 12 months.
Don't mind me if I question a trade. I spend lots of time arguing my own trades with myself. John Neff once described his value-driven investment style as a "lifelong argument with the market." I personally find that comment insightful and also find value in questioning my actions.
Also I hope you earn a truckload of money. It is really no skin off my ass. I miss out on many great trades but seem to be doing OK compared to most people. I figure if I can make 7% a year my net worth will double in the next ten years which is my personal goal. I guess I am a bit of a grinder.
[QUOTE=Dccpa; 425515]If you read the US Election thread, you will see two long posts I made regarding gold and silver ownership.
It is an urban myth that 1oz of gold should buy a man's suit. The usual reference states that this relationship held even during Roman times. One real fact is that during Roman times, a day's wages was equivalent to a denarius or about 1/10 of an oz of silver. Around 1900 a day's wage had increased to over 1oz of silver. Because of increases in productivity, the old relationships are not relevant today. Also, gold should be measured against the supply of money, not the velocity of money.[/QUOTE]Mad ramblings from a person stuck in sex prison.
Relating back to a small discussion DCCPA and I had regarding the price of gold and the formula M*V=P*Q, I saw this graph on the velocity of money today.
[url]http://research.stlouisfed.org/fred2/graph/fredgraph.pdf?id=M2V[/url]
I think that this is a key debate that you are seeing on the economic sites right now. Many analysts and super rich guys like Rogers believe that Bernanke by raising M (money supply) will just increase P (inflation) without affecting Q (goods and services) or V (money velocity) thus making commodities like gold be good to great investments.
Personally I think the size of M is unimportant until V starts increasing. I do not think we will see 1970s-type stagflation with its wage-price spiral because of the decline of unions, robots and workforce globalization.
If Bernanke is right, I think global stocks with well-known brands are the place to invest. If he is wrong I think beachfront real estate is the place to invest. If we are all broke than living at the beach is the way to go. All you need is a pair of baggies, huarache sandals and a t-shirt and maybe a bushy blond hair. (Surfin' USA reference for those born after 1960.) If you are a fan of Merle Haggard then you know cold is bad news for a poor man.
Of course, you young guys if you do not start creating businesses the whole country is dead. Don't be John Galt and go on strike. Do your civic duty.
Here is large snip from a ZeroHedge post that I think has some very good points, perhaps you or your ilk can tell us where it's wrong?
[url]http://www.zerohedge.com/contributed/2012-09-16/there-she-blowsevil-plan-830-bdi-slope-hope[/url]
[quote]1) The price of Oil. The life blood of modern global based trade, could well spiral upwards out of control. For the first time in history, the national average gas price for the 2nd week of September were over $4. 00. Not a good look for a largely consumption based economy.
2) Will this unprecedented action blow up the Petro-Dollar? As of this September 6th, [b]China and Russia have decided to trade oil in non-petro dollars.[/b] Also, Iran can sell their oil to them without worrying about US sanctions. This is a huge development which has not fully sunk in to the general public yet. Perhaps the rest of the world will soon refuse to play ball with a the juiced up Fed as a cheating opponent. Will Asia increasingly turn away from the US capital markets, spending its hard earned reserves elsewhere? I sure as hell would.
3) Agricultural commodities. The price of domestic Corn & Wheat are already at or near all time highs. A devalued USD caused by excessive money printing increases the cost of imported foodstuffs as well. QE3 will only make matters worse. Again, not a good look for a consumption based economy.
4) Much of the recent social upheaval / military conflicts in MENA, have at their roots the caustic effect of high food & oil prices in the region. The US open ended QE policy is exporting inflation, and therefore misery to many impoverished parts of the world. Will the continued instability in the area rapidly lead to even larger major military conflicts which we can already ill afford, not to mention the ominous oil price spike that would ensue?
5) The last thing that Europe needs right now is a weaker USD. Germany the only remaining ezone economic engine will suffer significantly, as their exports become less competitive vis a vis the US. The poor pathetic periphery counties will have zero chance to compete at all. While the ECB's printing money ability has increased within the past year, they don't have the same structural capacity as the USA to do so. Ben's destruction of the USD will adversely affect Chinese exports as well. We could soon see a collective Japanese / Chinese / European intervention in the currency markets buying up the USD to counter the effects of QE3, and this could quickly descend into Jim Rickard's dreaded currency wars.
6) ZIRP forever. Are we not penalizing all savers by keeping rates so low for so long, and thus keeping the money they would have earned in their savings accounts from ever entering the real economy? And won't inflation and a weaker dollar further erode their purchasing power? Ben's policy hurts most retired folks living off a fixed income, and all who have a conservatively allocated retirement account they are counting on for future living expenses. Also, anyone who buys insurance, will now have to pay higher rates because insurance companies can't make money on their premiums anymore. Again not too cool for a consumption based economy.
7) Every municipality, town, city and state that consistently adds to their conservative Government bond holdings, will now earn less income from those fiscally prudent investment portfolios. The Fed's forever ZIRP policy is now effectively forcing comptrollers of already dangerously over leveraged fiscal budget balance sheet all over the country to take on even more risk, by shepherding them towards a questionable search for higher yields. Sounds dicey to me at best.
8) QE does little to promote job growth. QE1 cost $1. 7 trillion. QE2 cost $600 billion. Using Bernanke's math, it cost the Fed $2. 3 trillion to create two million jobs. The average annual salary in the USA for 2010 was $41, 674. By the math given to us by Bernanke himself, each job created by QE has cost the Fed $1, 150, 000. Doesn't seem to be very cost effective. Can't we figure out a better way to spend the Nation's limited financial resources. Is bailing out a busted bloated banking system all that matters in the world! Where is the outrage?
9) Effect on the Federal deficit. The continued unabashed monetization of debt actually encourages the fiscal cliff to become the greatest divide. Why would the easy money law makers be induced to significantly cut Governement spending if they are not penalized for further borrowing. Giving too much candy to a baby is usually not a good thing. Money for nothing and your chicks for free, is that the new American way?
10) The wealth effect. The Bernanke puts way too much emphasis on the positive impact of a "feel good" consumer. He has directly mentioned the stock market & consumer sentiment as very important drivers of further economic growth. Does he not realize that most people actually don't own any stocks, other than a 401K, which cannot be touched until retirement. The average consumer uses regular savings to make additional discretionary purchases, not 401K gains. By keeping rates near zero, their meager savings returns are not even keeping up with real inflation, which is much higher than he admits to begin with. Not to mention that real wages have been staganant for decades now. Dr. Feelgood has it backwards, the man on main street feels mainly the pain of QE, and not the gain.
11) QE3 and home prices. You would have to draw the 10-year yield down close to zero in order to get more people then are currently refinancing to refi again. This further MBS purchasing program by the Fed will only bring in a handful of new refinancings for the banks, and if you were looking to buy a home, you still have the same problem of selling your current residence because you owe more then its worth. This means you need to qualify for a new loan with your old mortgage counting as reoccurring debt. Not many can do this. As far as new home buyers go, interest rate levels on mortgages are not the problem, they are already at historic lows. This Mortgage purchase program announced as part of QE3 has much more to do with the Fed buying the MBS from Fannie and Freddie, because no one else will want to touch these zombies once the draw down requirements are imposed on the Federally chartered mortgage finance companies after the 1st of the new year. I'm afraid there is no housing boost news here at all, just more duct tape & baling wire.
12) QE3 Inflation acceleration. Unlike the mega yet sterilized bond buying announced by ECB, the FED's reckless QE3 to infinity program does not mention anything about sterilization. This implies that there is no promise to contain the newly minted money via sterilization operations whatsoever, as was the case with QE1, QE2, and all other previous mortgage security purchases, instead it appears that the fubar fabricated funds will free flow directly into the economy, on a potential unlimited basis. $85 billion created per month out of thin air, $40 billion of which are perpetual unsterilized high octane fuel injections into an energetic economic engine is simply mortifying monster truck madness. This drastically increases the immediate dangers of an inflationary inferno flame out.
13) Effect on future US interest rates. Here is where I believe we may see an immediate and very lethal blow back. If we are to assume that this new QE to infinity policy will quickly ignite new growth / jobs for the economy as advertised, it will also inevitably put upward price pressure on non-discretionary essentials such as food and energy, which have clearly shown their propensity to move up in tandem along side every previous QE operation. This real inflation felt at the ground level will not only reduce direct consumption by the cash strapped classes, but it will also force the cash flush classes away from low interest earning financial accounts of all kinds, and into existing hard non producing assets of every kind (commodities, PM, art, land, real-estate). Furthermore, prudent investors will soon understand that most corporate earnings suffer mightily from inflation, and thus will stay away from equities at these elevated levels. The elite financial institutions will face a double wammy here; not only will they lose straight low end deposit savers, but they will also suffer massive equity & bond account draw downs from the more affluent. At the end of the day, if they are going to keep excessive capital flight from accelerating, they will have no choice but to raise rates of return on funds deposited with them.
Higher rates are just what the Bernanke was trying to avoid! Get ready for a midair mid flight stall into a deadly death spiral captain Ben, you have clipped your own wings. We are heading straight into an inflationary depression storm of epic intensity. Inflation in the things we require, and deflation on the things we already own. The greed trap has been hatched from the heavens above, same as it ever was.
Up until now, the stock market has enjoyed the free QE bus ride no questions asked, however when the prosperous peeps are surprisingly startled by the tremendous thundering QE3 tailpipe backfire blast, they will quickly realize that the vehicle is running on nothing but fumes, and will all jump off at once before it runs out of regular real gas. Be sure to be the first ones out before the passengers crash the plexiglass doors. [snip][/quote]
These last few years of near-zero real interest rates seemed kinda strange but I didn't really give a shit. But, now that I'm retired, it kind of sucks. I'd like to annuitize maybe 20% of my portfolio because I don't have much Social Security, but the annuity factors are very low. I do think I will borrow a bunch of money that I don't really need, though. I borrowed $15k and I might borrow another $35k. That's as opposed to selling stocks and bonds to live off of. I've been getting offers of 2-2. 5% from Amex and shit (that's the effective annual rate) and you could get arbitrage with AA corporate bonds at that point, let alone equities. Of course the offers are only for a year or eighteen months but it's better than nothing. I don't think these credit card companies have figured out I'm not working any more.
[QUOTE=Dickhead;426408]These last few years of near-zero real interest rates seemed kinda strange but I didn't really give a shit. But, now that I'm retired, it kind of sucks. I'd like to annuitize maybe 20% of my portfolio because I don't have much Social Security, but the annuity factors are very low. I do think I will borrow a bunch of money that I don't really need, though. I borrowed $15k and I might borrow another $35k. That's as opposed to selling stocks and bonds to live off of. I've been getting offers of 2-2. 5% from Amex and shit (that's the effective annual rate) and you could get arbitrage with AA corporate bonds at that point, let alone equities. Of course the offers are only for a year or eighteen months but it's better than nothing. I don't think these credit card companies have figured out I'm not working any more.[/QUOTE]Dickhead, rather than annuitize 20% of your portfolio, you might consider oil royalty trusts. They would give you a better yield than an annuity and you would be investing in energy. If the stock market tanked, the share price would drop, but the dividends should up pretty well. Your arbitrage idea is only safe if the bonds are the same term as the cc loan. Otherwise, you are taking a huge risk that the interest will shoot up and tank the bond price.
Regarding the CC companies, I had a friend who burned out and dropped out. The cc companies would still send him applications and he would list his income as. 0- or na. They still sent him cards. He lived off the cards for years and paid monthly payments on the old cards with new ones. Did I mention he was formerly a bankruptcy attorney. The cc companies deserved the screwing they got when he filed bankruptcy.
[QUOTE=Dccpa;426627]Dickhead, rather than annuitize 20% of your portfolio, you might consider oil royalty trusts. They would give you a better yield than an annuity and you would be investing in energy. If the stock market tanked, the share price would drop, but the dividends should up pretty well.[/QUOTE]Dccpa, You probably already know this, but Dickhead may not. Dickhead is as financially literate as we are though (modest aren't I?) so would understand the following.
This is not a situation where you want to be blindly purchasing yield. You must be careful. Read the 10-K. Check the reserves and the PV10% value (before tax net present value of the estimated cash flows from the trust's proved reserves, using average oil and gas prices for the preceding year). Compare the PV10% value to the market capitalization, taking into account the oil and gas prices used to determine PV10%. See what price hedges they've had in effect and take that into account when you look at historical income. And, most importantly, take into account when / if the trust terminates. A number terminate after they produce a fixed number of barrels or cubic feet equivalent.
[QUOTE=Tiny12; 426628]Dccpa, You probably already know this, but Dickhead may not. Dickhead is as financially literate as we are though (modest aren't I?) so would understand the following.
This is not a situation where you want to be blindly purchasing yield. You must be careful. Read the 10-K. Check the reserves and the PV10% value (before tax net present value of the estimated cash flows from the trust's proved reserves, using average oil and gas prices for the preceding year). Compare the PV10% value to the market capitalization, taking into account the oil and gas prices used to determine PV10. See what price hedges they've had in effect and take that into account when you look at historical income. And, most importantly, take into account when / if the trust terminates. A number terminate after they produce a fixed number of barrels or cubic feet equivalent.[/QUOTE]Tiny I agree. Also you need to know the mix of oil & gas. And with the 15% foreign tax withholding on most distributions, retirement accounts are at a disadvantage. I believe the Canadian trusts have been converted to Corporations. While the conversion reduced the yields, but they are still pretty good.
[QUOTE=Dccpa;426630]I believe the Canadian trusts have been converted to Corporations. While the conversion reduced the yields, but they are still pretty good.[/QUOTE]Dccpa, Agreed. I haven't bought any Canadian oil and gas companies, but a number do pay good dividends. The USA oil and gas independents, on the other hand, are like rats on a treadmill. They reinvest everything they make and don't produce free cash flow or pay decent dividends.
[QUOTE=Dccpa;426627]Your arbitrage idea is only safe if the bonds are the same term as the cc loan. Otherwise, you are taking a huge risk that the interest will shoot up and tank the bond price.[/QUOTE]Right, but what you want to match the term with is the duration and not the maturity date. I should make it clear I'm talking about a bond mutual fund (so no 10-k to read although I am an expert at that) with a duration close to the time to expiration of the loan. Of course, with coupon rates as low as they are, maturity and duration are very close to each other.
I don't view an oil royalty trust as a close substitute for a fixed annuity, by any means, but in any case I already have a few percentage points of my portfolio in natural gas royalties. They are just slightly more stable than oil royalties, during most periods.
[QUOTE=Dickhead;425948]I'm thinking if Greece exits the euro then the dollar will strengthen against the euro and I will go to Spain again and fuck some hookers in Estark 92 and in the lower rent apartments in Fuengirola[snip].[/QUOTE][QUOTE=Doggboy;425953]Yes sir Mr. Dickhead, I'm keeping an eye on Spain as well. [snip][/QUOTE][QUOTE=Black Shirt; 426811]Spanish civil war has started.
Spain is about to implode, will Franco re-emerge?[/QUOTE]You guys might want to rethink that Spain thingy, or pack some riot gear. LOL
I am frustrated this morning because I read three different articles that Obama mischaracterizes Romney's proposed tax policy. If Romney would just lay out the plan then I would know what I have to do to lower my tax bite. One line of Obama's from the debate that resonated with me was something like that Romney's tax plan is so good that they cannot tell the middle class about it. Most likely scenario in my mind is that Romney reduces mortgage interest deduction and begins to tax my medical benefit as well as increasing the social security tax (or simply return to 6. 8% rate).100 percent certain Obama raises my taxes. Usually I try to defer all income. This year I think will recognize income before I have too. Pay more taxes than I have to but accelerate purchases of a new car and maybe do some home remodeling. Anybody have keener sense of this thing than I do?
Big Boss Man, I think Obama will win, and the composition of the House and Senate will be about like they are now. If Romney wins and can get his agenda (including cost cuts) through, you shouldn't see your taxes go up a lot, unless your income is high and you take extensive advantage of loopholes. Yes, if you're a hedge fund manager whose performance fees are taxed at 15% or an oil operator who gets percentage depletion, you've got a problem. Otherwise I wouldn't worry. Irregardless, the one move you could make if Romney wins is to try to move Schedule A deductions into 2012, in case he puts a cap, $17,000 or $25,000 or whatever, on deductions. Charitable deductions come to mind as something where you'd have control over timing. Actually Obama provided indications he'd like to limit charitable contributions . I think Obama would be likely to limit deductions on Schedule A too.
I would not worry about Schedule C or business expenses if Romney is elected, unless they're loopholes. Actually I would delay business expenses until 2013, expecting an Obama win and higher tax rates. If we go over the fiscal tax, everyone will pay higher taxes from 1/1/2013. If we don't, I still expect Obama to raise taxes on the majority of Americans in the years to come, because he can't come close to financing his agenda just from people who make over $200,000.
Anybody making over $200,000 might be wise to sell any positions that are fully valued and in which they have good capital gains. I'm doing that. I figure federal capital gains taxes are going to 18.8% or 23.8%, depending on whether the Bush rates are extended. Irregardless the Obamacare tax kicks in. I'm actually selling interests in several small businesses, having weighed 15% federal tax this year on capital gains against 40%+ federal taxes in years to come from the income streams. Selling out now makes sense if I can get a good price. (Take that Esten, et al. Yes, higher taxes really do make a difference in people's willingness to invest and create jobs.) And I've gone a step further. I'm worried about the signs of class warfare coming from Obama, Reid, etc, so I've got my citizenship in the Commonwealth of Dominica and a house in Costa Rica in case the shit really hits the fan. Call me paranoid or foolish or whatever, but Jews in Germany in the 1930's would have been wise to have done something similar when Hitler started singling them out.
In the longer term, if there are Democratic majorities going forward or if the Tea Party movement doesn't gain traction, expect taxes to go up a lot on everyone in order to pay for the increasing cost of entitlements, etc. Then the best strategy is to spend your money on hookers, booze, whatever. See Jackson's parable from a few months ago, about the ant and the grasshopper. Spend like there's no tomorrow, because if you're responsible and save and invest you're going to get screwed. Be a grasshopper.