A Loophole For Poor Mr. Paulson - Forbes.com: "By accepting the Treasury post, Paulson is poised to take advantage of a tax loophole that allows government officials to defer capital gains taxes on assets they have to sell to avoid a conflict of interest, as long as the proceeds are reinvested in government securities or a broad array of mutual funds approved by the government within 60 days.
Technically, the tax kicks in once these replacement assets are sold, using the purchase price of the original assets as the cost basis, says Tom Ochsenschlager of the American Institute of Certified Public Accountants. But why sell when you can avoid the tax altogether?
'The idea is never to sell,' says Robert Willens, the top tax and accounting analyst at Lehman Brothers. 'If you're able to hold onto the replacement assets until your demise, you never have to pay it.'
The tax break was designed to ensure that the wealthy are not deterred from taking posts in government because they fear a big tax hit. But it amounts to a significant perk of public office. "
7 June 2006
Welcome to Jim Sinclair's MineSet
Welcome to Jim Sinclair's MineSet: "Since the first quarter of 2003, he added, 'we've seen a broad range of Middle Easterners buying gold for storage outside the Middle East, the United States, Europe, or Japan. More people have bought gold over the past five years than in the entire history of mankind.'
The main repositories of these new gold findings, Christian said, were Australian, Singapore, Malaysia, and Thailand.
The Fedaii organization also alleged that in a separate scheme, pro-Iranian Shiites in Iraq looted the Iraqi Central Bank and one of Saddam Hussein's palaces in the immediate aftermath of the 2003 war, and made off with 200 tons of Swiss-stamped gold bullion. "
The main repositories of these new gold findings, Christian said, were Australian, Singapore, Malaysia, and Thailand.
The Fedaii organization also alleged that in a separate scheme, pro-Iranian Shiites in Iraq looted the Iraqi Central Bank and one of Saddam Hussein's palaces in the immediate aftermath of the 2003 war, and made off with 200 tons of Swiss-stamped gold bullion. "
How's that rebalancing call working for you, Mr. Roach?
Dude, where's the Dharma: "On May 1 of this year, Stephen Roach announced that the world, in an economic sense, was on the mend because world financial authorities were ready to take their medicine. The USDX had just fallen from 90 to 85, the Yuan was strengthening and interest rates were rising the world over.
Over the past month, however, these same authorities are starting to realize that the medicine does not taste good. Employment growth, according to the BLS has slowed appreciably and the US equity markets, along with those of other nations, have declined, in some cases substantially. Suddenly, there is talk that the Fed might need to pause. The Republican majority can ill afford a summer economic swoon going into November elections.On May 1 of this year, Stephen Roach announced that the world, in an economic sense, was on the mend because world financial authorities were ready to take their medicine. The USDX had just fallen from 90 to 85, the Yuan was strengthening and interest rates were rising the world over.
Over the past month, however, these same authorities are starting to realize that the medicine does not taste good. Employment growth, according to the BLS has slowed appreciably and the US equity markets, along with those of other nations, have declined, in some cases substantially. Suddenly, there is talk that the Fed might need to pause. The Republican majority can ill afford a summer economic swoon going into November elections."
Over the past month, however, these same authorities are starting to realize that the medicine does not taste good. Employment growth, according to the BLS has slowed appreciably and the US equity markets, along with those of other nations, have declined, in some cases substantially. Suddenly, there is talk that the Fed might need to pause. The Republican majority can ill afford a summer economic swoon going into November elections.On May 1 of this year, Stephen Roach announced that the world, in an economic sense, was on the mend because world financial authorities were ready to take their medicine. The USDX had just fallen from 90 to 85, the Yuan was strengthening and interest rates were rising the world over.
Over the past month, however, these same authorities are starting to realize that the medicine does not taste good. Employment growth, according to the BLS has slowed appreciably and the US equity markets, along with those of other nations, have declined, in some cases substantially. Suddenly, there is talk that the Fed might need to pause. The Republican majority can ill afford a summer economic swoon going into November elections."
6 June 2006
End of Cheap Oil!
Safe Haven | End of Cheap Oil!: "Moreover, I also anticipate natural gas, uranium, ethanol as well as other alternative energy prices to rise in the future. In summary, energy should form a core position of your investment portfolio as this is the only protection we have from the energy shortages and the huge price increases we will witness as a result of expensive oil.
Our firm has invested a large chunk of our managed accounts to the energy complex. As far as possible, we've bought the underlying commodities rather than owning stocks of energy-producing companies. Finally, we've also invested in stuff like sugar, corn and wheat, which will be in great demand for the production of ethanol and bio-diesel."
Our firm has invested a large chunk of our managed accounts to the energy complex. As far as possible, we've bought the underlying commodities rather than owning stocks of energy-producing companies. Finally, we've also invested in stuff like sugar, corn and wheat, which will be in great demand for the production of ethanol and bio-diesel."
Copper dropped
Bloomberg.com: Latin America: "June 6 (Bloomberg) -- Copper dropped for a second consecutive day in London on speculation that the U.S. may raise interest rates to fend of inflation, curbing demand for the metal used to make cables and plumbing.
Federal Reserve Chairman Ben S. Bernanke told banking executives in Washington yesterday rising inflation indexes are ``unwelcome'' and the Fed will make sure they are ``not sustained.'' His remarks sparked concern the Fed may decide on a 17th consecutive increase in its key rate when policy makers meet June 28-29. "
Federal Reserve Chairman Ben S. Bernanke told banking executives in Washington yesterday rising inflation indexes are ``unwelcome'' and the Fed will make sure they are ``not sustained.'' His remarks sparked concern the Fed may decide on a 17th consecutive increase in its key rate when policy makers meet June 28-29. "
Concerning a possible Yen-Carry Trade Unwinding
Welcome to Jim Sinclair's MineSet: "One other thing - Gold did not fall $100/ounce because of fears of the yen carry trade unwinding. It fell because the Bank of England precipitated an attack on the price of copper to try to save the LME from collapsing due to the idiots who kept shorting copper in the middle of a roaring bull market. They had to do something to stop the price of copper from rising or risk watching their members default. They could not obtain surplus supplies of copper which with to flood the market BECAUSE THERE ISN’T ANY! So why not attack the gold price which can be done by mobilizing Central Bank gold supplies and using that extra supply to temporary knock the floor out from under the gold market. Then you sit back and watch the financial press and the same old top callers in gold make the case that the commodity boom was over sending the speculators who were wining the battle heading to the hills in a mass selling panic of commodities across the board. Voila - Mission Accomplished!
In spite of the selling barrage copper is still trading at $3.50 pound. How many people in 2001 would have said that it was possible for copper to run to $4.00 pound and then drop sharply in price and still be trading at ONLY $3.50? Not 1 out of a 100 I would venture to say.
In conclusion, the commodity boom is no where near over and the current talk about a rout in the commodity sector is nothing more than the usual chatter that always surfaces whenever a market is experiencing a correction in a long term bullish trend."
In spite of the selling barrage copper is still trading at $3.50 pound. How many people in 2001 would have said that it was possible for copper to run to $4.00 pound and then drop sharply in price and still be trading at ONLY $3.50? Not 1 out of a 100 I would venture to say.
In conclusion, the commodity boom is no where near over and the current talk about a rout in the commodity sector is nothing more than the usual chatter that always surfaces whenever a market is experiencing a correction in a long term bullish trend."
When Sweet Statistics Clash With a Sour Mood - New York Times
When Sweet Statistics Clash With a Sour Mood - New York Times: "'In the first quarter of 2006, the U.S. economy grew at an annual rate of 5.3 percent, the fastest growth in two and a half years,' he said, as Mr. Paulson, the chief executive of Goldman Sachs, looked on. 'We added 5.2 million new jobs since August of 2003. The national unemployment rate is down to 4.7 percent. Productivity is high, and that's leading to higher wages and a higher standard of living for the American people.'
Yet in the latest New York Times/CBS News poll, only 28 percent of the respondents said they approved of President Bush's handling of the economy, while 66 percent disapproved — the worst such ratings of his presidency. Only 6 percent rated the economy as very good, while 46 percent said it was fairly bad or very bad. And consumer confidence plummeted last month, according to the Conference Board."
Yet in the latest New York Times/CBS News poll, only 28 percent of the respondents said they approved of President Bush's handling of the economy, while 66 percent disapproved — the worst such ratings of his presidency. Only 6 percent rated the economy as very good, while 46 percent said it was fairly bad or very bad. And consumer confidence plummeted last month, according to the Conference Board."
Text pulled after uproar over Islam | EastValleyTribune.com
Text pulled after uproar over Islam | EastValleyTribune.com: "I do not want my children trying out Islam, or thinking about becoming a Muslim now, or in the future,' she wrote to Baracy on Jan. 25. She did say, however, that she approves of including some information about world religions in history lessons, so long as it is presented factually and briefly.
She also objected to a classroom activity that led students to rank the most influential people in history, which she said pit Jesus against Muhammad.
White could not be reached for comment for this story.
The issue drew national attention when a man claiming to be a Scottsdale father posted an entry on conservative writer Daniel Pipes’ Web site on Feb. 27.
The man lambasted what he stated was 'fake history along with Islamic religious proselytizing and indoctrination techniques' at his child’s school.
The posting found its way to at least five other Internet log sites, most of which claim to be politically conservative. One Jewish Web site also encouraged readers to contact the Scottsdale district, saying the textbook denigrates Judaism. "
She also objected to a classroom activity that led students to rank the most influential people in history, which she said pit Jesus against Muhammad.
White could not be reached for comment for this story.
The issue drew national attention when a man claiming to be a Scottsdale father posted an entry on conservative writer Daniel Pipes’ Web site on Feb. 27.
The man lambasted what he stated was 'fake history along with Islamic religious proselytizing and indoctrination techniques' at his child’s school.
The posting found its way to at least five other Internet log sites, most of which claim to be politically conservative. One Jewish Web site also encouraged readers to contact the Scottsdale district, saying the textbook denigrates Judaism. "
US bubble set to burst (June 2005) - News - PhysicsWeb
US bubble set to burst (June 2005) - News - PhysicsWeb: "House prices are rising so fast in 22 US states that they have created a 'bubble' that could burst in the middle of next year according to two physicists (physics/0506027). The same team previously predicted that the UK housing market would crash in mid-2004.
Bubbles are formed in markets when large numbers of investors - often taking their lead from traders - start to buy more and more stocks and shares, forcing prices to artificially high levels. Such bubbles can also form in the housing market. And like real bubbles, these financial bubbles often burst.
After the 'new economy' bubble burst in 2000, the US Federal Reserve decided to cut interest rates to just 1% in an effort to kick-start the economy. However, such low rates have historically been associated with an increased demand for houses. Two years ago, Didier Sornette and Wei-Xing Zhou at the University of California at Los Angeles (UCLA) analysed the US housing market. They concluded that although house prices were increasing rapidly, there was no evidence for the faster-than-exponential growth that often leads to the growth of a bubble"
Bubbles are formed in markets when large numbers of investors - often taking their lead from traders - start to buy more and more stocks and shares, forcing prices to artificially high levels. Such bubbles can also form in the housing market. And like real bubbles, these financial bubbles often burst.
After the 'new economy' bubble burst in 2000, the US Federal Reserve decided to cut interest rates to just 1% in an effort to kick-start the economy. However, such low rates have historically been associated with an increased demand for houses. Two years ago, Didier Sornette and Wei-Xing Zhou at the University of California at Los Angeles (UCLA) analysed the US housing market. They concluded that although house prices were increasing rapidly, there was no evidence for the faster-than-exponential growth that often leads to the growth of a bubble"
Property market set to slump (May 2006) - News - PhysicsWeb
Property market set to slump (May 2006) - News - PhysicsWeb: "The model can also predict how house prices might evolve between now and 2011, and shows that the high prices will slowly start to come down at the same rate as they went up (figure 2). This decrease, which will take about six or seven years, is characterized by exponential price falls with rates of about -6% per year, and will start in major cities such as San Francisco and Los Angeles with smaller cities following suit. These predictions might also hold true for other big cities, like London, Madrid, Paris or New York. Indeed, in Melbourne and Sydney the descent has already started.
Figure 2
Roehner says the current period is somewhat different to previous years because there is an inflated demand for property -- mainly from investors and high-income buyers -- that was not so important before. Moreover, investment funds (including pension and hedge funds) and the stock market are more closely associated with real estate than in previous years. Speculation has also boosted house prices to sometimes unreasonable levels.
However, Roehner also stresses the limits of his and other such models: 'Consider the London housing market,' he says. 'A year ago everybody (including myself) was convinced that the turning point had been reached and that prices would decline. In fact, over the last 12 months real estate prices in London have increased by 8%. What happened? As explained in a recent article published in the Economist, Gordon Brown [UK Chancellor of the Exchequer] has offered a governmental guarantee to banks and other lending institutions and devoted about $2 billion in subsidies to encourage buyers. Naturally, no model can take such events into account in advance.'"
Figure 2
Roehner says the current period is somewhat different to previous years because there is an inflated demand for property -- mainly from investors and high-income buyers -- that was not so important before. Moreover, investment funds (including pension and hedge funds) and the stock market are more closely associated with real estate than in previous years. Speculation has also boosted house prices to sometimes unreasonable levels.
However, Roehner also stresses the limits of his and other such models: 'Consider the London housing market,' he says. 'A year ago everybody (including myself) was convinced that the turning point had been reached and that prices would decline. In fact, over the last 12 months real estate prices in London have increased by 8%. What happened? As explained in a recent article published in the Economist, Gordon Brown [UK Chancellor of the Exchequer] has offered a governmental guarantee to banks and other lending institutions and devoted about $2 billion in subsidies to encourage buyers. Naturally, no model can take such events into account in advance.'"
BACK TO THE BUNKER
BACK TO THE BUNKER: "On Monday, June 19, about 4,000 government workers representing more than 50 federal agencies from the State Department to the Commodity Futures Trading Commission will say goodbye to their families and set off for dozens of classified emergency facilities stretching from the Maryland and Virginia suburbs to the foothills of the Alleghenies. They will take to the bunkers in an 'evacuation' that my sources describe as the largest 'continuity of government' exercise ever conducted, a drill intended to prepare the U.S. government for an event even more catastrophic than the Sept. 11, 2001, attacks.
The exercise is the latest manifestation of an obsession with government survival that has been a hallmark of the Bush administration since 9/11, a focus of enormous and often absurd time, money and effort that has come to echo the worst follies of the Cold War. The vast secret operation has updated the duck-and-cover scenarios of the 1950s with state-of-the-art technology -- alerts and updates delivered by pager and PDA, wireless priority service, video teleconferencing, remote backups -- to ensure that 'essential' government functions continue undisrupted should a terrorist's nuclear bomb go off in downtown Washington."
The exercise is the latest manifestation of an obsession with government survival that has been a hallmark of the Bush administration since 9/11, a focus of enormous and often absurd time, money and effort that has come to echo the worst follies of the Cold War. The vast secret operation has updated the duck-and-cover scenarios of the 1950s with state-of-the-art technology -- alerts and updates delivered by pager and PDA, wireless priority service, video teleconferencing, remote backups -- to ensure that 'essential' government functions continue undisrupted should a terrorist's nuclear bomb go off in downtown Washington."
Bow-Tied Commodity Bull (Today From Barron's)| SmartMoney.com
Bow-Tied Commodity Bull (Today From Barron's)| SmartMoney.com: "WITH THE PRICES of oil and industrial metals like copper, zinc and nickel screaming higher in recent months, such observers as Warren Buffett and Morgan Stanley's Steve Roach have proclaimed that commodity markets are in a bubble destined to burst soon.
But Jim Rogers, fabled hedge-fund manager of the 'Seventies and now ardent commodity bull, finds such talk ridiculous. Indeed, he has been pounding the drum for investing in commodities in recent years in numerous speeches and media interviews, even writing Hot Commodities, a book propitiously published in late 2004 that predicted a coming price boom in everything from aluminum to zinc. "
But Jim Rogers, fabled hedge-fund manager of the 'Seventies and now ardent commodity bull, finds such talk ridiculous. Indeed, he has been pounding the drum for investing in commodities in recent years in numerous speeches and media interviews, even writing Hot Commodities, a book propitiously published in late 2004 that predicted a coming price boom in everything from aluminum to zinc. "
5 June 2006
Dude, where's the Dharma
Dude, where's the Dharma: "Let me share a memory to highlight what I mean. When I was 12 my father went back to school, first studying Philosophy en route to a Law degree. Thus our home library was soon augmented by the works of Descartes, Berkeley, Locke and Hume, to name a few. As children are wont to do, I emulated my father and read, perhaps tried to read would be a better description, some of these works. My impression was that these books were confusing.
When I began my own studies in Philosophy as an undergraduate a few years later, I was surprised to find that these once confusing works were now understandable. Indeed, each time I have revisited these works I have come to find more and more meaning. Yet the texts were unchanged from the first time I had picked them up. That is, the books themselves weren't confusing. I just didn't have enough background and life experience the first time I picked them up to discern much meaning in them.
The conclusion I drew from this was that meaning is subjective. As Thomas Carlyle put it, In every object there is inexhaustible meaning; the eye sees in it what the eye brings means of seeing. "
When I began my own studies in Philosophy as an undergraduate a few years later, I was surprised to find that these once confusing works were now understandable. Indeed, each time I have revisited these works I have come to find more and more meaning. Yet the texts were unchanged from the first time I had picked them up. That is, the books themselves weren't confusing. I just didn't have enough background and life experience the first time I picked them up to discern much meaning in them.
The conclusion I drew from this was that meaning is subjective. As Thomas Carlyle put it, In every object there is inexhaustible meaning; the eye sees in it what the eye brings means of seeing. "
4 June 2006
Rolling Stone : Was the 2004 Election Stolen?
Rolling Stone : Was the 2004 Election Stolen?: "The complete article, with Web-only citations, follows. Talk about it in our National Affairs blog, or see exclusive documents, sources, charts and commentary.
Like many Americans, I spent the evening of the 2004 election watching the returns on television and wondering how the exit polls, which predicted an overwhelming victory for John Kerry, had gotten it so wrong. By midnight, the official tallies showed a decisive lead for George Bush -- and the next day, lacking enough legal evidence to contest the results, Kerry conceded. Republicans derided anyone who expressed doubts about Bush's victory as nut cases in ''tinfoil hats,'' while the national media, with few exceptions, did little to question the validity of the election. The Washington Post immediately dismissed allegations of fraud as ''conspiracy theories,''(1) and The New York Times declared that ''there is no evidence of vote theft or errors on a large scale.''(2)"
Like many Americans, I spent the evening of the 2004 election watching the returns on television and wondering how the exit polls, which predicted an overwhelming victory for John Kerry, had gotten it so wrong. By midnight, the official tallies showed a decisive lead for George Bush -- and the next day, lacking enough legal evidence to contest the results, Kerry conceded. Republicans derided anyone who expressed doubts about Bush's victory as nut cases in ''tinfoil hats,'' while the national media, with few exceptions, did little to question the validity of the election. The Washington Post immediately dismissed allegations of fraud as ''conspiracy theories,''(1) and The New York Times declared that ''there is no evidence of vote theft or errors on a large scale.''(2)"
3 June 2006
The limits of finance
Dude, where's the Dharma: "Henry Paulson's appointment to the position of Treasury Secretary brings yet another Goldman Sachs player (Joshua Bolton was recently made Chief of Staff) to the Bush team. Upon hearing the news of Paulson's appointment my first thought was that the US has been declared bankrupt and Goldman Sachs has been appointed receiver. Perhaps holders of US debt are getting a bit antsy with the 'deficits don't matter' approach of Cheney et. al.
This is to invert the arrow of causation described in most press reports. Rather than thinking the Bush team chose Mr. Paulson, perhaps it was the global financiers, worried about the most recent spike in commodity prices, inter alia, who are driving the changes. Most press reports suggest that Mr. Paulson will have a much greater voice in policy than his predecessors, which fits with the inverted arrow of causation model. Goldman Sachs will now be driving US financial policy.Henry Paulson's appointment to the position of Treasury Secretary brings yet another Goldman Sachs player (Joshua Bolton was recently made Chief of Staff) to the Bush team. Upon hearing the news of Paulson's appointment my first thought was that the US has been declared bankrupt and Goldman Sachs has been appointed receiver. Perhaps holders of US debt are getting a bit antsy with the 'deficits don't matter' approach of Cheney et. al.
This is to invert the arrow of causation described in most press reports. Rather than thinking the Bush team chose Mr. Paulson, perhaps it was the global financiers, worried about the most recent spike in commodity prices, inter alia, who are driving the changes. Most press reports suggest that Mr. Paulson will have a much greater voice in policy than his predecessors, which fits with the inverted arrow of causation model. Goldman Sachs will now be driving US financial policy."
This is to invert the arrow of causation described in most press reports. Rather than thinking the Bush team chose Mr. Paulson, perhaps it was the global financiers, worried about the most recent spike in commodity prices, inter alia, who are driving the changes. Most press reports suggest that Mr. Paulson will have a much greater voice in policy than his predecessors, which fits with the inverted arrow of causation model. Goldman Sachs will now be driving US financial policy.Henry Paulson's appointment to the position of Treasury Secretary brings yet another Goldman Sachs player (Joshua Bolton was recently made Chief of Staff) to the Bush team. Upon hearing the news of Paulson's appointment my first thought was that the US has been declared bankrupt and Goldman Sachs has been appointed receiver. Perhaps holders of US debt are getting a bit antsy with the 'deficits don't matter' approach of Cheney et. al.
This is to invert the arrow of causation described in most press reports. Rather than thinking the Bush team chose Mr. Paulson, perhaps it was the global financiers, worried about the most recent spike in commodity prices, inter alia, who are driving the changes. Most press reports suggest that Mr. Paulson will have a much greater voice in policy than his predecessors, which fits with the inverted arrow of causation model. Goldman Sachs will now be driving US financial policy."
2 June 2006
A Closer Look at Copper "Speculative Buying" in Copper
The Salamone Stance: A Closer Look at "Speculative Buying" in Copper: "A popular explanation to a rise in commodity prices is 'speculative buying.' Usually, it is the hedge-fund world that is viewed as the speculative buyers. While speculative activity among the hedge-fund community can drive price behavior, I think it makes sense to confirm whether or not it is truly speculative buying that is driving prices. One resource for doing this is to check in on the Commitment of Traders Report (CoT), which is published weekly by the Commodity Futures Trading Commission (CFTC). The data for this report is available in our Commodity Center. The CoT report is broken down by three types of traders: Large Speculators, Small Traders, and Commercial Hedgers. Hedge fund positions are reported within the Large Speculator category. With that being said, it is hard for me to believe that copper prices are being driven by the hedge-fund community. In fact, note in the graph below that Large Speculators have liquidated positions since March 2005. Furthermore, as early as February 2006, this group has been net short from time to time, even as copper spiked higher. Hedge fund speculation might have helped drive the rally in copper futures in 2003, but I have my doubts as to 2004-2006. And to the degree that some hedge funds have benefited from the copper rally, I would think that some in the hedge-fund community have been badly hurt by the advance."
Gold Is Money. Pass It On.
commentary32: "Gold bugs are a noisy and undisciplined rabble, a cantankerous collection of misfits, malcontents, treasure hunters and dilettantes. In the former Soviet Union, most of us would have been locked up in psychiatric hospitals. For the most part amateurs self-taught on the subject of gold and money, we are something of an intellectual militia. We have no institutional framework, just a loose string of websites and commentators who periodically publish rants of mixed quality under the banner of GATA. We have no doctrine, beyond a conviction that real money is gold and fiat money is fraud. We have no following, beyond the mildly curious and the already converted.
Contemporary Austrians, by contrast, are honors graduates of the School of Couth. They are the anointed heirs of a school of economic analysis articulated by an extraordinary collection of great thinkers, importantly including Ludwig von Mises (1891-1973) and Murray N. Rothbard (1926-1995). Austrian economics, with its emphasis on individual choice as the foundation of economic inquiry, is truth serum, an antidote to the poison of Keynesian ideology that has, over the past 80 years, succeeded in driving gold out of our currency, honesty out of our public discourse, and individual liberty out of our politics. Contemporary Austrians have a well-developed institutional structure, a secular monastery dedicated to keeping alive the flame of economic truth, in the form of the Ludwig von Mises Institute (www.mises.org). They have their own hierophants, in the person of learned academics and commentators who publish papers and exchange ideas on Austrian themes. They have a substantial following, and have earned a well-deserved respectability for their sound thinking and their decorous manner.
Most gold bugs subscribe, to one degree or another, to Austrian teachings,"
Contemporary Austrians, by contrast, are honors graduates of the School of Couth. They are the anointed heirs of a school of economic analysis articulated by an extraordinary collection of great thinkers, importantly including Ludwig von Mises (1891-1973) and Murray N. Rothbard (1926-1995). Austrian economics, with its emphasis on individual choice as the foundation of economic inquiry, is truth serum, an antidote to the poison of Keynesian ideology that has, over the past 80 years, succeeded in driving gold out of our currency, honesty out of our public discourse, and individual liberty out of our politics. Contemporary Austrians have a well-developed institutional structure, a secular monastery dedicated to keeping alive the flame of economic truth, in the form of the Ludwig von Mises Institute (www.mises.org). They have their own hierophants, in the person of learned academics and commentators who publish papers and exchange ideas on Austrian themes. They have a substantial following, and have earned a well-deserved respectability for their sound thinking and their decorous manner.
Most gold bugs subscribe, to one degree or another, to Austrian teachings,"
1 June 2006
Funds: Bullish on mining despite slide - Marketplace by Bloomberg - International Herald Tribune
Funds: Bullish on mining despite slide - Marketplace by Bloomberg - International Herald Tribune: "Simon Shields, Australia's biggest fund manager, is not concerned by last month's global sell-off in mining shares. He is betting it was a blip in a multidecade rally sparked by China's industrialization.
BHP Billiton and Rio Tinto Group, two of the world's biggest mining companies, tumbled more than 10 percent in the week after reaching records last month as commodities posted big declines. For Shields, the plunge made the two mining stocks even more attractive.
'BHP and Rio are extremely undervalued by the market,' Shields, of Colonial First State in Sydney, said during a recent interview. 'What we're seeing now is a long-term upswing that could last 20 to 30 years. We're buying shares that are unashamedly geared toward a tectonic shift in global growth.'
BHP has recovered 2.8 percent since its recent low last Thursday, while Rio has bounced 4.6 percent from its May 23 low. BHP and Rio are up 69 percent and 83 percent over the past year, more than triple the 22 percent gain in Australia's benchmark S&P/ASX 200 index. They have also helped make Shields's team of investors the best performers in Australia over the past three years.
Colonial's $4.9 billion Geared Share Fund, managed by Jim Taylor, has climbed 54 percent every year for the past three, making it the best-performing Australian equities fund for the period among 589 major funds. This year it is up 15.9 percent, compared with a 5 percent gain in the S&P/ASX 200.
Three other Colonial funds, overseen by Shields, are among the top 10 performers over the past three years. Colonial manages a total of 113 billion Australian dollars, or $85 billion.
"
BHP Billiton and Rio Tinto Group, two of the world's biggest mining companies, tumbled more than 10 percent in the week after reaching records last month as commodities posted big declines. For Shields, the plunge made the two mining stocks even more attractive.
'BHP and Rio are extremely undervalued by the market,' Shields, of Colonial First State in Sydney, said during a recent interview. 'What we're seeing now is a long-term upswing that could last 20 to 30 years. We're buying shares that are unashamedly geared toward a tectonic shift in global growth.'
BHP has recovered 2.8 percent since its recent low last Thursday, while Rio has bounced 4.6 percent from its May 23 low. BHP and Rio are up 69 percent and 83 percent over the past year, more than triple the 22 percent gain in Australia's benchmark S&P/ASX 200 index. They have also helped make Shields's team of investors the best performers in Australia over the past three years.
Colonial's $4.9 billion Geared Share Fund, managed by Jim Taylor, has climbed 54 percent every year for the past three, making it the best-performing Australian equities fund for the period among 589 major funds. This year it is up 15.9 percent, compared with a 5 percent gain in the S&P/ASX 200.
Three other Colonial funds, overseen by Shields, are among the top 10 performers over the past three years. Colonial manages a total of 113 billion Australian dollars, or $85 billion.
"
Whats moving the market
Platts: "
Volumes were light and premarket trade on the London Metal Exchange was described by one trader with an LME ring member as 'pretty dead' Wednesday. After a chunky net inflow of 6,150 mt of copper stocks into LME-approved warehouses, largely in the form of cathode into Singapore, three-months copper traded on the LME had eased $40 from its Tuesday close, bid at $7,910/mt by 0907 GMT. 'Copper is drifting, as all the base metals got a sell off Tuesday,' said the trader, adding that many in the market had taken profits causing a dip in prices. 'This puts prices back in the triangle and back firmly in consolidation mode. Given the volatility of the market, having tested the upside, we should now expect a swing down [for copper] to test the lower levels of support around $7,600/mt,' said William Adams, metals analyst at BaseMetals.com. By contrast, aluminium had firmed $35 to $2,735/mt, and the trader warned that aluminium needed to hold above $2,680/mt.
'A lot of the margins have now increased, and this will have had some affect on the longs,' the UK-based trader said, referring to recent announcements by the London Clearing House of further increases to its margin requirements for the LME base metals, but he added: 'The base metals still look strong...this is probably just a dip.' Lead was bid off $7 from its previous close by 0907 GMT Wednesday at $1,090/mt, while tin lost $250, bid down at $7,950/mt. Although three-months zinc had eased $65, bid at $3,660/mt, the trader said the metal was still doing exceptionally well. 'Zinc's fundamentals are strong...there's not much concentrate material around...people are buying on the dips,' he added. Meanwhile, t"
Volumes were light and premarket trade on the London Metal Exchange was described by one trader with an LME ring member as 'pretty dead' Wednesday. After a chunky net inflow of 6,150 mt of copper stocks into LME-approved warehouses, largely in the form of cathode into Singapore, three-months copper traded on the LME had eased $40 from its Tuesday close, bid at $7,910/mt by 0907 GMT. 'Copper is drifting, as all the base metals got a sell off Tuesday,' said the trader, adding that many in the market had taken profits causing a dip in prices. 'This puts prices back in the triangle and back firmly in consolidation mode. Given the volatility of the market, having tested the upside, we should now expect a swing down [for copper] to test the lower levels of support around $7,600/mt,' said William Adams, metals analyst at BaseMetals.com. By contrast, aluminium had firmed $35 to $2,735/mt, and the trader warned that aluminium needed to hold above $2,680/mt.
'A lot of the margins have now increased, and this will have had some affect on the longs,' the UK-based trader said, referring to recent announcements by the London Clearing House of further increases to its margin requirements for the LME base metals, but he added: 'The base metals still look strong...this is probably just a dip.' Lead was bid off $7 from its previous close by 0907 GMT Wednesday at $1,090/mt, while tin lost $250, bid down at $7,950/mt. Although three-months zinc had eased $65, bid at $3,660/mt, the trader said the metal was still doing exceptionally well. 'Zinc's fundamentals are strong...there's not much concentrate material around...people are buying on the dips,' he added. Meanwhile, t"
Finextra: Trading errors soar in credit derivatives market
Finextra: Trading errors soar in credit derivatives market: "Around one in five credit derivatives trades made by US banks last year initially contained errors, double the previous rate, according to a survey by The International Swaps and Derivatives Association (Isda).
The Isda survey of 67 financial institutions found that over-the-counter (OTC) derivatives volumes increased for all product categories during 2005. The largest increase was for credit default swap volumes, which doubled at all sizes of firm.
But credit derivatives error rates increased for the sample as a whole. Errors in trading equity derivatives more than doubled last year to 20%.
The Isda research also found that rebookings increased significantly during 2005, although this may reflect intensified efforts to reduce confirmation backlogs at the behest of the regulators.
The surge in errors comes as dealers move to automate paper-based settlement and tighten back office risk management procedures in the $17,000 billion credit derivatives market. Earlier this year the Federal Reserve Bank of New York said the world's major derivatives dealers had met initial targets for reducing the backlog of unconfirmed trades.
The Isda survey found that confirmation backlogs had decreased significantly for credit derivatives, which it says reflects increased industry and regulatory attention. But the logjams increased for both vanilla and non-vanilla equity derivatives."
The Isda survey of 67 financial institutions found that over-the-counter (OTC) derivatives volumes increased for all product categories during 2005. The largest increase was for credit default swap volumes, which doubled at all sizes of firm.
But credit derivatives error rates increased for the sample as a whole. Errors in trading equity derivatives more than doubled last year to 20%.
The Isda research also found that rebookings increased significantly during 2005, although this may reflect intensified efforts to reduce confirmation backlogs at the behest of the regulators.
The surge in errors comes as dealers move to automate paper-based settlement and tighten back office risk management procedures in the $17,000 billion credit derivatives market. Earlier this year the Federal Reserve Bank of New York said the world's major derivatives dealers had met initial targets for reducing the backlog of unconfirmed trades.
The Isda survey found that confirmation backlogs had decreased significantly for credit derivatives, which it says reflects increased industry and regulatory attention. But the logjams increased for both vanilla and non-vanilla equity derivatives."
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