Monday Jumble

Wow, I thought that Nurse Cutie cartoon was hilarious, but I guess no one else did!

Metal News
There has been some news on the gold and silver front. Interesting developments will be worth keeping an eye on. As usual I was looking for a much larger pull back in Au and Ag but they seem to be holding tight. Here are some items:
Judge Sides With GATA, Orders Fed To Present Her With Its Classified Gold Records For Private Review
I will wait to see if this really happens, but this is huge news (one way or the other).

One from Jesse:
Massive Silver Withdrawals From The Comex
Another item to keep tabs on.

Kid Dynamite has a good post on PSLV and the trading premium behind it (why?):
Silver Irony - PSLV, SLV

And of course how long was it going to be (5 minutes, a day?) until this type of thing gets ink:
Arizona Shooter’s Obsession with Returning to the Gold Standard
To be 100% fair to Mr. Mark Thoma (who I disagree with on things economic all the time, but he is a brilliant guy) he was asked to give some background on this angle by CBS Moneywatch. Still, will talk of a gold standard be outlawed next?

I am a long term bull and holder of physical gold and silver and I still believe in them long term. Short term I want to see some resolution in ugly price action (especially silver) before jumping in for more.

Are All New Life Forms about to be Discovered?
I have written about Lake Vostok a few times. From the Wiki entry:

Lake Vostok is the largest of more than 140 subglacial lakes found under the surface of Antarctica. It is located beneath Russia's Vostok Station, 4,000 metres (13,000 ft) under the surface of the central East Antarctic ice sheet. It is 250 kilometres (160 mi) long by 50 kilometres (31 mi) wide at its widest point, thus similar in size to Lake Ontario, and is divided into two deep basins by a ridge.

So this lake has been sealed off from the rest of the world for a LONG time, it is supersaturated with Oxygen, and under enormous pressure. Any microbes living there will be sure to have evolved insane anti-oxidant systems and enzymes that work in unknown ways. Why is this a big deal?

Again, natural products. Many of the best drugs (and almost all antibiotics) are natural products found to be made by plants, bacteria, fungi, etc. Here we have an untapped realm where all kinds of things are possible. This also fits in with my desire for a Pharmaceutical company to get into seawater bacteria screens for natural products. I had the chance to work at a small firm that used DNA isolated from sea soil samples (yes, there is tons of DNA in soil!) for expression studies to find new antibiotics. It was a great time. I love Pulse Field Electrophoresis.

Fellow blogger Kid Dynamite asked a bit ago why I do not spend more time going into Pharmaceuticlas/Biotech as it is my specialty after all. The reason is that I work for a top 3 Mega Pharmaceutical company and I never wanted my blogging to get entwined with my real life work. My company works with all kinds of firms and is aggressive in acquisitions so it often becomes hard to discuss various companies. I don't know about Wall Street, but the Biotech/Pharma world is very small. I had the luxury of working at a up and coming biotech in the golden years (1998-2002) of biotech and from that I know very well people in many areas in high positions spread across the industry. Legal, business, research, you name it and I probably know someone who holds that spot at many biotech/pharma firms. Of course I am always available via the email on the left to discuss generally anything a reader may want to know more about, or offer my own understanding of a company's leads or technology. Now you know.

Did You Know?
The best and most tested theorem on how the Moon came to be is that a Mars sized body collided with and early Earth. Here is some more to start:
Clouds Made of Rock Vapor Once Rained Magma on Ancient Earth
Nifty!

Have a good night.

Monday Short and Sweet

Home very late so not much time to post.

Economic Disconnect 6 Months of Trading
A while back I posted a trading idea about "stomach stocks" and I highlighted Hormel Foods (HRL) and Campbell's Soup (CPB). The original post can be seen here from September 8, 2009. I opened positions in both HRL and CPB on September 9, 2009.

A little further back in June I posted some trade plans concerning GLD, SLV, PAAS, and SPY. So how have the past 6 months been for me?

HRL = +5%
CPB = +7%
GLD = +19%
SLV = +18%
PAAS = +8%
SPY = -2% (I was stopped out, but this one would have ran had I kept it!)

Please note that I have what I refer to as "core" holdings of both gold and silver via various channels that I wish not to share details about.

My only loser was the SPY buy as I set my stop very tight because I did not even want to play the general market on principal.

Not a bad 6 months, with only 1 loser. I hate losing money trades. I would rather play a Beatles tune on Friday night than lose money!

I have a good chunk of my portfolio in cash right now. I am not making any changes to the positions noted above save setting stops higher than they were previously to lock in some very nice gains should things change. I have been outpaced by the general S&P 500, but I refuse to trade in the fantasy land that is the general stock market over the last months.

How have you all been doing? No need for fine details, but what has been working? What has not?

This is a short holiday week so I do not imagine too much heavy duty posting. I will probably check in with more fun related posts to lighten things up.

For a chuckle I would ask you to check out Stagflationary Mark's "Illusion of Prosperity" picture-gate scandal where a photo on his site of his own dog was lifted by another blogger without asking. Not a huge deal in the scheme of things, but annoying for sure:
Honey's Popularity Rises!
Awesome.

Have a good night.

One Thing At A Time

Mondays can be rough. Today was one of those Monday's. Either I need a 4 day work week or I need the day to be 30 hours long instead of 24. Not likely!

Bearer Bond Media Note
I am not going to let this story die off, so i will try and find at least one mention of it daily.

Clusterstock's Joe Weisenthal was on the Glenn Beck show and did a small discussion. See video here.

Inflation/Deflation - Another View
An interesting take over at Accrued Interest on the -flation debate:

FED: Deflation? Over My Dead Body
But will we see CPI print below zero? Only if the Fed fails. In other words, sustained deflation remains a remote possibility. But sustained Fed interference in the markets in attempt to avert deflation is a strong probability.
So the bet should be not on deflation outright, but on the fallout from attempts to fight it. Weaker dollar. Higher commodities. Low short-term rates (including buying 2-year bonds as opposed to holding cash). Flat yield curve. Lower mortgage rates (at least from here).
That's is how I'm playing my deflation view.

I left a comment chiming in that would it be possible for deflation to take hold AND have a weaker dollar? An interesting thought experiment. The author seems to be closely aligned with my theorem that in the course of peeing their pants about deflation, the FED will cause all kinds of other damage trying to stop it. Leading to inflation! Eventually.

Dick Bove Sighting
I have spilled pixels on Dick Bove many times over the past 2 years, so I thought I might give the guy some more attention:

Dick Bove: Bank of America Faces “Horrific” Loan Losses (BAC)
"In the second quarter, (Bank of America's) position as the largest lender in multiple sectors of the American financial system will haunt the company as its losses expand," Bove said.
Nonetheless, Bove rates the company a buy, and raised his price target to $19 (from $14). He expects the price-earnings multiple on the stock to rise, and thinks confidence in the bank and its management are improving. This reminds us, of course, of our thesis from this weekend: the government’s guarantee against bank failure is driving up stock prices.

As an investor I try very hard to isolate companies who will "be haunted by expanding losses" and then load up on their stocks. NOT!

One Thing at a Time
Markets took a hit across the board today, with losses reaching their worst sizes since April. There was a ton of noise out there today, so I want to touch upon some things I was looking at.

It seems almost like the same players that are responsible for the two month gunning of futures right before the market close are unable to do two things at once. Today mission number 1 was to get a dollar rally. Helped by the Russian communication (so soon after the 135 Billion in bearer bonds was reported) that the US dollar was King Chit of Turd Mountain (KSTM) spurred the buck higher on the day. Of course a higher dollar is bad for stocks, oil, metals, well everything so everything fell.

As far as specifics, I will likely be stopped out of my SPY position taken a while back if there is further weakness. I have removed stops of my buys of SLV, GLD, and PAAS even though they are looking a bit weak here. Yes, I am a metals addict.

I should know better, and Tim Knight lowers the boom with Broken GLD:

"My precious metals shorts have done well for me; GLD now has broken a major trendline. Precious metals could be in serious trouble now."

Tim is a sharp player and I respect his call. Still, this is the 17th time in the past year that GLD and SLV have broken down on their way to zero and yet they still hang tough. We will see.

It seems the relationship between the dollar and stocks/commodities/metals has become super sensitive. The dollar only moved up from mid 79's to low 81's on the index so the aggressive move on the other end seems a bit overdone.

This relationship is a major contributor to my view that the dollar will have to weaken for any stock rally to continue. There will be one day wonders where the concentrated efforts to push it up occur, but the general market puking reaction will snuff that out.

It is a wild interconnected mess we have here. Balancing the buck and foreign interest in it with the need for a recovering market is a delicate dance. The folks in charge of the music think they can do this without a serious dislocation in one or more of the parts. Who has such a high opinion of their own abilities? From 10 years ago:

I submit the Committee to Save the World. Rubin and Summers are once again at the helm, and while Greenspan has since sailed on, we now have Ben Bernanke in the same position as Greenspan in this picture: The public face while the two behind him hold knives to his back.

I am sure this will all work out well.

Have a good night.