The Sun Never Sets On Gold

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Gold has it's place, not every place is where Gold belongs. Borrowing to buy Gold is a bad plan.

Wall Street Puppeteers

G9 meets today in Rome, looking for some way out from under bad CDRs sold to Asia and Europe by Wall Street crooks, especially credit ratings companies like Moodys.

Arrogant Squawk Box TV Joe Kernen turns bitter at suggestions that robbery restraints be applied to Wall Street investment-tool creators.

Last nights House Of Cards offered up a spectacular broadcast special which still has some burning with fury at both Wall Street who invented this world wide economic mess and their equally greedy home-buyers now squating in residences they should never have been allowed even enter long enough to look around and realize they could not afford them.

The Blame Game rolls on.

Outside sites foreigners still writing in dismay, some like Ivo who sadly cling to their bits of gold they hope not to outlive the spending of. You cannot eat gold, farmers cannot planet gold, it will not transport you to work, shelter you from cold. Gold is a fantasy of crazy people. Yes, those who lust after it are driving prices higher, and let them, they cant sell it to sane people who have money, not even if they offer gold cheap.

The Ivos are wrong. Focus of Stimulate spenders is dreadfully skewed. Hype they offer that increasing U.S. Federal debt 6 times more as they mislead others promising Infrastructure work to make jobs that is only 6% of the spending, is a dreadful mistake.

The entire disaster comes down to two facts.

America needs jobs that produce saleable product..

American employees are today as a group woefully unqualified to compete with workers of Asia and Europe, even a lot of South America and the Mideast.

So heres where we need to start to clean up.

Investors who still have money left must become more astute, stop their losses, more on that coming tomorrow.

Any money borrowed by anybody including Government should be put into employee skill training for product development.

Yes, that includes development of New product, New Ideas, let us truly adopt the Yes, we can, by doing more of what we can do then trying to adopt a simple stupid plan to increase debt we cannot like those house buyers, afford to pay, today anyway.

Coming Up Next: A product American can make that the world is waiting to buy!

Here's a TRADE we're trying-- Thanks to Jack, once Gryffin Hedge Fund GURU...

Jack who for six months has been saying our Hedgefund was holding it's own suddenly withdrew, now we find in reality what he told us was not true. The fund has lost 40% of its value.

Golden Opportunity with Defined and Limited Risk

11-24-08

Disclaimer-- Before anyone even considers this please be thoroughly aware we in no way advocate anybody else try our strategy nor are we accepting any responsibility or liability for what others do as a result of what we do. This is information being shared simply as a courtesy.

Despite the continuing US Dollar strength, gold turned higher on Friday with Comex cash gold breaking out above 778.16. Since gold is currently oversold this move could be just short covering, but it could also be the start of something more.

Here are some considerations.

      This is a noteworthy breakout from a consolidation pattern formed by the October 22^nd low for gold.

      Physical demand has been reported very strong perhaps reflecting a loss of confidence in the banking system.

      The long-term seasonal price pattern usually reaches its peak in late December.

      Hedge fund liquidations and tax loss selling may soon be ending.

This is an uncertain market environment and gold may be worth considering once again in the event this recent breakout proves to be more than just short covering.

Here is a bull call spread suggestion for a long position in the gold ETF with defined and limited risk.

SPDR Gold Shares (GLD) 78.85. The Trust holds gold and issues shares in exchange for deposits of gold.

With large trading volume and open interest the bid/ ask spreads in the options are reasonable. The current Historical Volatility of the ETF is 45.

      Buy GLD Jan 80 call GLDAB 5.75 IV 49.60 Delta .5159

      Sell GLD Jan 85 call GLDAG 4.05 IV 51.13 Delta -.3992

            Debit 1.70 Position net delta .1167

The debit indicated above is based upon Friday’s middle closing prices between the bid and ask. Since the time decay is almost entirely offset for this spread, the debit Monday for the spread should be about the same price if the stock price remains unchanged. Use the position net delta shown above to adjust for any stock price change or about .12 for each point change in the stock price.

Set the SU (stop/unwind) at a close below 70. If the rally loses momentum the implied volatility will likely rise as the stock turns lower. With a 5% absolute rise in implied volatility the risk at 70 would be about $95 or 56%. The gain is limited to the difference between strike prices less the debit of $170 or $330 for a one-lot position representing 100 shares of the ETF. The entire position risk is the total debit of $170 but by setting the stop at 70 we can limit the loss to around $95 (presuming we have correctly estimated the rise in implied volatility) while having a potential a maximum gain of $330 if the gold ETF continues higher and moves back up to the previous resistance at 90.

Stay Tuned For Comic Economics ALSO Are They Really Too BIG To Fail, or Jail?

Satire By John W. Lillpop

Like George W. Bush, John McCain, Barack Obama, and the other 533 clue less scoundrels in Washington, D.C., I have but a foggy understanding of the global meltdown.

To be perfectly honest, the whole damn mess sounds like a corrupt pyramid scheme. Instead of soap, the fools were selling and trading mortgage loans and using your 401(k) and pension funds like meaningless poker chips.

In truth, the economic situation we find ourselves in is very complex. Phrases like sub-prime loans, derivatives, mortgage backed securities, FICO scores, negative amortization, all of that confusing language makes one head spin.

When the carnage spreads across the seas, the confusion is multiplied many times.

For example, the latest report is that Iceland is on the brink of bankruptcy. Freaking Iceland, for heavens sake!
Just how in the hell can a few barefoot hayseeds in North Carolina who blew their tobacco profits on moonshine, rather than making their mortgage payments, cause a foreign nation to go belly up?

What exactly does my $700,000 starter castle in San Jose--a two bedroom, one bath, 1,000 square foot delight with attached carport--have to do with anything in France? Or Germany?

Next question: Can I decide which country to knock out? I would gladly skip two or three mortgage payments if that would send Iran or North Korea into debtors' hell.

Actually, all of this foolishness is the latest failure resulting from simplistic "progressive" solutions.

This time, liberals decided that having a home is the birthright of all Americans and most illegal aliens as well. Forget about being qualified.

It's the equivalent of affirmative action in housing.

You are breathing, right? And registered to vote Democrat?

That's good enough for liberals like Barney Frank and Christopher Dodd who think that credit screens, down payment requirements, and debt-to-income ratios are the evil tools of racists intent on keeping people of color down and out.

So far, unbridled liberals have left people of color black and blue--and in foreclosure and or bankruptcy.

It also has tiny island nations like Iceland about to sink.

Do the global community a huge favor and pay your damn mortgage and taxes on times, and vote a straight Republican ticket on November 4th, OK?

It is the "cool" thing for a global citizen to do!