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Silver Wheaton Corp. Message Board

  • yourdeadmeat69 yourdeadmeat69 Dec 27, 2012 1:43 PM Flag

    31 Dec-4 Jan '13 Economic Conundrum: Practicing Safe Fiscal Policy: Wear Conundrums!

    I called it almost to the penny, and almost made some money doing it--the week that passed past about five percent out of most people's aggressive portfolio unless they were in silver and gold. The only problem is that any pop in silver, like the 27th, also ran counterintuitive, the fiscal cliff is filled with dollar enhancing efforts like, paying down debt, and cutting spending and over the cliff we go. Unless there is another joint don't worry be happy conference with both sides of our useless moronic government making nice, the 28th will be more of the same, right up to the half day we crash 31 Dec. Yeah I am sticking my neck out again, and yeah, all we're going to get on the weekly conference calls from the Offal Orifice and the dishonorable minority is Happy New Year and "it's the other guy's fault"..

    Fiscal cliff is a Moody's wet dream and a PM nightmare, but it isn't playing that way. Silver of course has its industrial side, from cars to electronics to medicine so, there is that to counter or enhance the precious metal and currency sides and New Year's week we get to see big chompers of silver, new cars, and big spenders in the economy at large, the employed, take a pop based on XMAS hiring. Sales may have suffered during XMAS by being about the same as last year, but the man was hiring, even if temporarily, and they are counting temp hires these days, however perverted. Like I said, Moody's will probably upgrade the US to AAAAAAAAAAAAAA+++++++++++++++ while the rest of us watch the non silver and gold side of our portfolios make like the Lone Ranger. Hi ho silver, away.

    The stock market WAS the only bubble in town this year, and although housing is starting to show some signs of stabilization, we are only 1/4 the way back to lofty 2006 values, about ten percent up from the bottom in the best of recovering neighborhoods. We have 3/4 that distance to tread. To be fair, we trod about 25% too high 2006. Crunch the numbers, we ought to be at parity in housing around 2018, about 18-20% from now. Are you with me? If you're sitting on a hovel that is $400K, you should be at about $475 by Jan 2018. Looks a way off, no? Hey, I'm over 65, and I can wait for my 70th birthday. And yes, that leaves a whole bunch of people still under water with about 40-50K to go they might have paid in 2005-6--hopefully they refi'd (HAH!) under underwater refi programs like HARP (HAH!), and paid down about 25K of that 40K. Hope springs eternal.

    The big bugaboo in the tent is looking to new housing to solve the problem with the million home overhang from the end of the foreclosure period, the banks are sitting on. Some of that overhang is being bought by investors, but they are not flipping, they are renting and waiting. We're looking at 2019-20 before those homes come to retail market. One of the reasons the fiscal cliff solution cannot touch the mortgage deduction--those rented and those still to be sold foreclosures have to have incentive for prices to remain stable until 2020. That's a ways down the pike.

    Take ten percent away from the mortgage deduction, you'll see ten percent evaporate from the home prices. Mark my words now's not the time to remove the mortgage deduction from the middle class and the working poor, if they can even swing a home.

    You want a million dollar home, you might have an argument against being able to take the full deduction, but frankly, that is where the alternative tax rates were supposed to come in.

    Happy New Year. The sentiment goes, the reason to have it just might be, you can take a breath and so many cannot.

    GLTA.

    Jan 2 7:00 AM MBA Mortgage Index 12/29 - NA NA NA -
    Jan 2 10:00AM ISM Index Dec - NA 50.5 49.5 -
    Jan 2 10:00AM Construction Spending Nov - NA 0.5% 1.4% -
    Jan 2 2:00 PM Auto Sales Dec - NA NA 5.6M -
    Jan 2 2:00 PM Truck Sales Dec - NA NA 6.5M -
    Jan 3 7:30 AM Challenger Job Cuts Dec - NA NA 34.4% -
    Jan 3 8:15 AM ADP Employment Change Dec - NA 130K 118K -
    Jan 3 8:30 AM Initial Claims 12/29 - NA 363K NA -
    Jan 3 8:30 AM Continuing Claims 12/22 - NA NA NA -
    Jan 3 10:30AM Natural Gas Inventories 12/29 - NA NA NA -
    Jan 4 8:30 AM Nonfarm Payrolls Dec - NA 150K 146K -
    Jan 4 8:30 AM Nonfarm Private Payrolls Dec - NA 135K 147K -
    Jan 4 8:30 AM Unemployment Rate Dec - NA 7.7% 7.7% -
    Jan 4 8:30 AM Hourly Earnings Dec - NA 0.2% 0.2% -
    Jan 4 8:30 AM Average Workweek Dec - NA 34.5 34.4 -
    Jan 4 10:00AM Factory Orders Nov - NA 0.3% 0.8% -
    Jan 4 10:00AM ISM Services Dec - NA 54.0 54.7 -
    Jan 4 11:00AM Crude Inventories 12/29 - NA NA NA -

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    • Headlines scream some Feds are unhappy with what might happen to inflation with all this printed money, gut punching what looked like rally follow through. Looks like a mighty political statement from some who want to look real smart now, just in case someone wants to think of them for that Bernanke vacancy looming Jan 14 when he "retires", a thought process a whole whopping year down the line.

      Now that TWIST is over because there aren't any short term bonds to turn into long term bonds, they have to print the money, so inflation is an in your face worry, as opposed to a worry for anyone on this board who can read. You can see it on the Fed Handbook, How to take the steam out of any stock market recovery, chapter 1929.

      So they also announce the US isn't buying gold anymore, and gold and silver fall like rocks, the dollar soars about ten yen off the low, and the carry trade for US bonds is looking juicy junior, real juicy, to quote Lawrence Tierney (Joe Cabot) Resevoir Dogs 1992. Guess what they'll be buying on the carry trade? US Bonds. See how that works? SOMEBODY thinks the dollar is going into the toilet, and somebody thinks they might want to risk a "strong" dollar. How do I know there is a resurgence in interest in bonds? I look at junk bond funds, which folks left in droves past week to get into equities. Equities are faltering, dividend tax rates popped but not badly (at least they are known quantities) and so it is off to the races for bond funds, and I'll just have to wait for the analysts to catch up a couple dollars late.

      So silver crashes 2.75%, and another 2.75% in the wee hours, in the most obvious manipulation since I donno when. Hopefully you sold some covered calls against your stash and have mitigated the typical short bomb they've been doing since 2010. How much will we recover? We'll that's a five and one half percent drop so far, I'll let you know when the drop begins to taper. I think we have another 2.5% to go, but I'd like to see that two point five percent stretched over couple days declining.

      Not that I'd like to see it decline at all. The next challenge to "inflationary fears" is the government spending cut. Although it will probably address closing off the rate of expenditures over the next five hundred years, which will amount to nothing in reality, the Chicken Littles will have the sky falling and precious metals will take a hit.

      Silver should be mitigated by the industrial side, and SLW is acting 2X the POS fairly regularly, it is like AGQ for half price.

      And getting half-ier.

      TTFN

    • You know the old saw, the first week in January tells you which way the wind blows for the month, and the first month tells you the rest of the year. An election year has a 15% uptick potential, and all that old timey jazz when government argued in public and compromised effectively in private.

      FOMC is worried about buying bonds for QE purposes and that took the wind out of the sails as tomorrow, if unemployment improves, that just means we are closer to the point of 6.5% unemployment where the Fed starts to think about ending easing. The whole game looks like "how to crush the spirits of the market" and wrestle defeat from the jaws of victory--I thought we'd have a decent +1/2% day, and it went minus after our pundits opened their big stupid mouths.

      Silver is off another 1.25%, you can thank the FOMC worrying about inflation last meeting, about forty years and ninety percent lost in the value of the dollar TOO LATE.

      Time for shuteye.

    • Nobody liked the fact I guessed correctly and early, Wednesday would be a monster day. Well it's Thursday and I'll try to screw up today, popularity above all you know. It's how Congress works, throw candy entitlements to the mob, and figure out later how to pay for the bribe. Can't tax the revenue, we're busy pumping up the economy with inflated dollars. Same charade will take the field, again, in about six weeks when debt ceilings come into play. A lot of wailing and gnashing of teeth, Boehner will tell the Democrats to go f themselves again, but it won't matter.
      I wonder when someone will figure out Helicopter Ben retires Jan 2014. That's going to be fun too. I wonder what Volcker is doing? He'll only be 85.

      Back to the debt crisis--Usually we'll print the money, dollar dies a bit more, and the market including silver soars to make up the difference. Printing press dollars are more heroin to help the addict feel better. Folks are raised to believe, this is some kind of financially sound approach to an economy, and politicians want to stay elected based on how much candy they throw to voters and what voters misbelieve. It's mob rule by whatever mythology they cling to. And it's hard to tell what that is, it changes no matter how you answer fiscal questions--change the verbiage ever so slightly, watch the differences in perception change folks view.

      It usually winds up, where is the austerity to curb govenment programs gone wild? Simple, the cuts are everywhere but MY program! See how that works? No functional litmus test, just a popularity contest. Think Justin Bieber for Fed Chairman!

      These are the same folks, working hand in pocket with banksters, that brought you no doc loans, that need your vote and positive perception they are looking out for you. Not whether is makes sense, or the mob gets it right, just whether they get it right for YOU. Look where that's got us. But not before a meal, unless you're on a diet.

      Those of us in silver and gold are probably the biggest advocates against their own process of wealth acquisition, namely watching our leadership destroy our paper money to keep their jobs--with all the disgust it deserves. Most here feel that silver and gold just help us stay alive--defensive counterplay to the trend of dollar destruction. We'll all be paper millionaires, the price of a Big Mac. Best be in real money, silver and gold.

      My bit has been this: I worked a lifetime to collect a pension and Social Security, and only use savings to keep reflating my take home enough, so that I am paid in constant dollars plus 4%. If I don't make a dime, and inflation stay at 1.0579% a year (that's the real rate since 1971) I should be able to last another 30 years and not feel the difference, pay my taxes, buy or lease a newer car every three years, see the country, play with my investments, go out to eat once in a while. It's not much of a life, but it's mine.

      Today's part of that pathetic existance includes watching whether after two monster days, we get that early on "healthy" correction to the astounding five and a half percent pop since NY's eve, and then, some good economic indicators, claims, and cars, will take us into slightly positive territory. Today is a day where gains should just consolidate, to form a floor.

      A hold today at these levels would be good. But I like my heroin also.

      Roll up your sleeves, it's time to ride the whirlwind.

      GLTA

      After all, we've only six weeks to the next ugly dogfight, the debt ceiling, but you throw it in the who cares hopper, because joesixpac has his fix, "permanant" low taxes.

      "Permanent." Till it isn't.

    • “…Unless there is another joint don't worry be happy conference with both sides of our useless moronic government making nice, …”

      Yeah. Don’t worry. Apparently there are a lot of “joints” being passed around and through their drug induced haze even these #$%$ should be able to see that the real problem is the central bank. It seems apparent that 99% of these jerks never read the US Constitution that they are sworn to uphold. (See Article I, Sections 8 & 9).

      Those not in the #$%$ category are more probably kindred spirits of Hugo Chavez, with dreams of absolute control of the people they are supposed to represent, obviously not the electorate, and just as obviously representing the elite that lined their pockets and put them in office.

      Not only is the rule of law dead, these maggots have cleaned it down to the bone.

    • The Republicans folded like a twin bed sheet, and I am in AWE of how much both the constituency and 7% popularity actually got to Congress, and the fleet lips of Joe Biden, working with McConnell, substituting for a deflowered Boehner.

      I expect a one percent pop in the POS and I am getting it. It is still $2 LESS than the average price I left the playing field, so there's plenty of room to make a few bucks.

      Will equities get the bump and bonds get a thump? Bond funds I watch already took a 20% hit from the highs, I suspect that's just about all done. We shall see.

      Wednesday will be a monster day. Ought to get some great auto sales numbers to go along with the fiscal cliff rollover.

      So, on the big question, does government work? Of course it does, as long as you throw money at the populace in true Bread and Circus fashion, and ignore the debt.

      I guess we do the debt in mid Feb and get to start this fiasco all over again, but, for now, it's smooth sailing for the opening bells.

    • How happy the New Year, the problematic House remains the long pole in the tent for this devils bargain on the spend side of the fecal cliff being considered today when the House convenes. It's all spend, very little on the how to pay for it side the aisle, though tax rates ratshitupalmost 20% for the high end.

      This gets through the House considering what happened to #$%$'sPlanB I will be genuinely in jawdropping awe. I suspect a hearty stumble here, but I am the most pessimistic of all. I will consider any stumbling temporary and not to last more than a week.

      Is the market skittish? You couldn't tell by bets on 31 December as the day wore on.

      • 1 Reply to yourdeadmeat69
      • So far it has only been political theatre. Why you would expect anything else surprises me. In the end they will continue down the same road, doing the very same things that have placed the country in this position, and the outcome will still be what we have long suspected.

        This, I believe at any rate, demonstrates clearly that the system no longer cares for anything other than control up to the point to where we all go over the fiscal cliff together—they've done nothing to avert it and an plausible argument can be offered for their actually working to bring it to pass. That said, has CONgress, or the entire federal government for that matter, become merely ushers?

    • All of the leadership on both sides the aisle is telling us don't worry be happy, we'll meet till late tonight and early on NY's day (?) or the 2nd and get this deal done. 20% crapital gains vice 15%, a nice 3Million off the top of Mitt Robme's income. $400K individuals pay more tax, $450 marrieds (another great reason to stay single) Cuts? What cuts? Unemployment extended a year. The market roars.

      I keep wondering if either or both sides can deliver their constituency. Boehner had trouble with his version of the deal, and it was far more generous than this "compromise". It ain't over till its over, and stops being the potential of the largest headfake in the history of headfakes.

      I have dry powder on a lanyard, strong enough for headwinds blowing around the fiscal cliff. If I miss a runup, well, I get to start off where we started down last week.

      That's ok, I ain't that brittle.

    • A few phone calls to my buddies at DoD in DC, which usually has the jitters over these budget issues, reveal absolutely no plans being made around any fecal cliff budget cuts till end of year. This tells me, they expect a resolution before any draconian planning. It usually means more of the same, expectation of debt increases, and funding as usual.

      I can't speak for other departments and services, but usually the DoD has so much fluff, it can take, however drastically, a 20% hit without blinking. But it's nice to know these planners are in don't worry be happy mode.

    • Looks like we get a whole trading day on Monday to watch what happens as a result of the Sunday night pronouncements. More scary talk on the financial news networks about the national debt limits, designed to be oooowwwee ooooowwweeee doesn't help keep the herd from being spooked.

      The joke is the selloff will continue for "losers" in the weeks ahead, to take advantage of the tax write off, the same logic I used to describe corporate mentality in high tax environments as "might as well hire" might get something back. Worked 1946 to 1981. Motivated me to split some expenses into 2013 where they might do "more good" as a writeoff.

      See how that works? See you Monday on the sunny side of the selloff.

    • Awright my timing was bad on next week's market, I said unless the two parties made nice on Saturday morning during the shout out from DC from both sides the aisle, we didn't have a prayer next week.

      Ok, they announced the make nice shout out Thursday afternoon the 27th as follows: a hail Mary pass would be set to be thrown as the Congress would be meeting on fiscal cliff matters on Sunday 30 DEC. Forget that this is just a meeting of the House. That halted the sell off to end all sell offs, as we were already more than 1.25% off for the day by just after lunch. I guess that scared the goyim into thinking, hmmm, aren't there all kinds of algorithms set to explode after we reach critical mass and the funds and ETF guys have to sell sell sell, Mortimer? We almost got back to parity by end of day.

      Will that last into tomorrow? And what is going to happen Sunday when they meet? There's nothing new to vote on. They'l barely get a litmus test of who is in the recalcitrant camp and who isn't. Then they'll decide not to decide on the fiscal cliff. Then somebody will bring up the fact that we are already on the wrong side of the debt ceiling. Then they'll have to decide if they'll separate that from the other fiscal cliff matters.

      And that is all going to happen after lunch on Sunday in about four hours. After working all day today and all day Friday and all day Saturday,

      OK--do you get it now? Anything to stop the mother of all sell offs this week, to avoid the taxation on the books next week.

      And the market? The recovery Thursday afternoon? They have to fool the fund managers for the next 1.5 market sessions and over the weekend, and make the announcement Sunday night that our tax rates are still there? Or don't worry be happy?

      They pull this off, David Copperfield, retire!

      They write a book about it, they'll call it "Gullible's Travels"

 
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