GOld juniors

Millionaires More Likely to Strategic Default

Filed in BP, CBS, Gold, GOld juniors, Gold Market, housing-market, Lear, o by on February 8, 2011 0 Comments
Millionaires More Likely to Strategic Default

Not surprisingly, the bursting of the housing bubble has moved up to the final rung on the ladder. Far from the days of the subprime debacle, now even the “good” people are getting squeezed. The difference is the rich are smart enough to walk away from it all. In fact, homeowners with loans of more than $1 million default at a much higher rate than “the little people” do. From CBS News entitled: Even More Millionaires Defaulting on Mortgage “ For Darren Thomas that ocean view was quickly losing its value. He says, “I bought it for [$1.385 million]. It is worth less than [$800,000], maybe less.” Thomas bought his townhome in 2006 but after seeing its value drop steadily he stopped paying. “I haven’t made a payment in two years,” he says. “It was business decision. It was an easy decision. I have a property worth six or 700,000 less than when I bought it. I was making payments of 10,000 a month.” Thomas has gone into strategic default. He could make payments but is refusing to put more money into a home that is worth less than his mortgage. Among luxury homeowners he is not alone. One in seven homeowners with loans over $1 million are seriously delinquent compared to one in 12 with mortgages below $1 million. The more you owe, it seems, the better off you may be. Darren Thomas continues to live in his home because banks are often slower to foreclose on million-dollar homes. For those who have stopped paying their million-dollar mortgages it’s just an investment that didn’t work out. “As negative equity took place and drove the value down it became an investment not worth holding onto,” says Corelogic’s Mark Flemming. “Not much different than a regular stock you would sell.” “People like myself, business people, are going it is silly to throw good money after bad,” says Thomas “The loss is not mine. The loss is the banks.” When it comes to real estate, the rich are different. They can be just as ruthless as the bankers.” I guess Nick Carraway was wrong after all. In some ways the rich really are just like the rest of us….suckers for a good bubble. The difference is they understand the money/business part of the game better than most. For them its just a business decision. By the way, according to CoreLogic, home price have fallen for the fifth straight month. Overall, house prices delined 1.8% for the month of December. Related Articles: Case-Shiller Index Shows Renewed Home Price Declines 2011 Housing Market Forecast Case-Shiller Index Screams Housing Double Dip Meredith Whitney Predicts a Housing Double-Dip Zandi: Expect 8% Home Price Declines To learn more about Wealth Daily click here Millionaires More Likely to Strategic Default originally appeared in Wealth Daily . Wealth Daily is a free daily newsletter featuring contrarian investment insights and commentary.

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Carlos Slim Catches Gold Fever

Carlos Slim Catches Gold Fever

Carlos Slim beat both Warren Buffett and Bill Gates in stock market performance last year. The reason: a hell-bent plan to start a brand-new gold and silver mining company in Mexico. Slim’s publicly disclosed holdings jumped 37% to $70 billion in 2010, according to data compiled by Bloomberg . Meanwhile, Buffett helped return a 22% gain for Berkshire Hathaway last year, and Gates’ Microsoft fell, hurting his overall annual returns even as he spread his investments into other sectors… The World’s Richest Man catches gold fever Slim — who made his fortune by building one of the world’s biggest telecommunication empires — has recently been making significant investments in gold and silver, particularly with a focus on precious metal mining in Mexico. Carlos Slim became the world’s richest man in 2010 with an estimated net worth of $55 billion. And a new spin-off mining company may help him widen his lead atop the global wealth list… Back in August, Slim’s holding company, Grupo Carso, S.A.B. de C.V., announced it would spin off a new precious metal mining company that would be focused on gold and silver mining in Mexico. The news added billions to Slim’s already ridiculous fortune as the plan to spin off the new company sent shares of Grupo Carso soaring in 2010, making it his best-performing asset last year. The new company (called Minera Frisco) produced nearly 200,000 ounces of gold and 5.5 million ounces of silver from its Mexican projects in 2010. Frisco recently reported plans to spend nearly $750 million this year to ramp up gold and silver production. The company estimates production from new mines in Mexico will more than double the company’s gold production to 440,000 ounces and nearly quadruple its silver production to 19.1 million ounces in 2011. Shares of Minera Frisco began trading Mexican Stock Exchange at the beginning of this year. But Slim and his family received nearly 80% of the new shares of Minera Frisco, and the stock is very thinly traded. Most analysts and investors will most likely avoid covering or owning this stock… However, there are many suitable alternative companies with a focus on gold and silver mining in Mexico. The largest of Minera Frisco’s publicly-traded competitors is the London-based silver major Fresnillo plc (LON: FRES) . Fresnillo plc Exchange: Symbol London: FRES P/E 39.76 Share Price 1,450 GBX Divided 5.90 GBX Market Cap 10.41 Billion GBP Yield 1.12% Fresnillo is the …

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An Egyptian Firebrand Away from $400 Oil

Investors are remarkably sanguine about the events in Tunisia and Egypt… Oil actually fell yesterday to $88.27. The Dow has been on a hot streak and is up again today — as it has been for months — to 12,149. History suggests events in the Middle East go from bad to worse. According to the Democracy Index put out by The Economist , there are no “established democracies” in the region. Israel is listed as a “flawed democracy.” Lebanon and Turkey were listed as “hybrid regime,” along with Palestinian territories, Pakistan, Armenia, and Iraq (Lebanon is now run by Hezbollah). The rest are categorized as “authoritarian regimes.” The last free vote saw Hamas sweep the Palestinian elections in 2006. Hamas started as an offshoot of the Muslim Brotherhood in Egypt. On gaining power, they started lobbing rockets into Israel. In 2007, the Battle of Gaza was fought between Hamas and the Palestinian security forces. Hamas is listed as a terrorist organization in most G-20 countries. In the aftermath, Israel and a Hosni Mubarak-ruled Egypt imposed an economic blockade on Gaza that is still in effect. Population and scarcity Jack Andrew Goldstone points out in his book, Revolution and Rebellion in the Early Modern World , that all revolutions from the French to the Russian, from China to Japan, occur where there is a rising population and diminishing resources coupled with an inflexible ruling party. (Note: The population in Russian doubled between 1850 and 1913.) Today, the Arab world has the fastest growing population on earth— and the youngest. In Yemen, the average age is 17.9 years with a birth replacement rate of 2.71, which puts it at number 23 in the world. The United Arab Emirates is in fourth place with 3.56, Kuwait is fifth with 3.50, the Gaza strip is six with 3.29. Libya, Chad, Egypt, Oman, Syria, and Iraq all make the top quintile. These young people will be the next rulers of the largest oil-producing region within the next ten years — mostly because all of the current leaders are in their 80s… with the exception of Qaddafi…

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Rick Santelli Slams the Spin…

Filed in BP, GOld juniors, o by on February 4, 2011 0 Comments

You can’t spin the truth with Rick Santelli. Not even Steve Liesman. From the tea parties to the spin, here’s the “only man you should be listening to on CNBC” with more… From Media Research Center: “[W]e have overwhelming evidence the jobs market is disappointing, and all of you are trying to look for that one half of spaghetti in a 50 lb. spaghetti bowl. This is not great data,” Santelli claimed. “We know that the U6 probably gives you a better indication of the true unemployment rate …” CNBC’s Steve Liesman interjected: “It went down, Rick. It went down – ” “Yeah, what is it?” asked Santelli. “It went down Rick, to 16.1 [percent],” Liesman said. “Oh boy, guys! 16.1 [percent] is probably the unemployment rate. That’s cause celebre,” Rick sarcastically shouted on the trading floor of the Chicago mercantile exchange. “But it fell from 16.7,” Liesman insisted. Santelli continued to criticize the spin: “You know what Steve? You and I both know that the unemployment rate, the labor force moving in and out, those giving up, is really probably your best statistical reason for the drop to 9.0 (percent). And in terms of jobs, you, Mr. Steve Liesman, said if you work just one day. If you stay home but you get paid you’re counted in the data …” Read more of this classic here. Rick Santelli Slams the Spin… originally appeared in Wealth Daily . Wealth Daily is a free daily newsletter featuring contrarian investment insights and commentary.

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2011 Gold and Silver Predictions

2011 Gold and Silver Predictions

Gold prices are off to an expected pullback for the year. But this short-term dip won’t last long… After forming a triple top pattern at the very end of 2010, the price of gold has fallen nearly 5% to about $1,350 an ounce. Take a look: We may continue to see a bit of downward pressure on gold prices in the near term; but as economic problems continue to drive investors into safe-haven hard assets, the price of gold will be headed higher later this year. That means if you’ve been waiting for an opportunity to make a little money in gold, the market may be carving out a nice little spot to make some bullion purchases at a decent price to prepare for the next leg up. There are many who estimate gold will top the $1,500 level this year. But I think we’ll see gold make a heart-stopping race to $1,700 an ounce by the end of the summer. Silver is also going to be a big winner for us in 2011. The demand for silver as an investment has increased dramatically over the past several years as the retail market has become more accepting of silver as money and a store of wealth. And as gold prices approach $2,000 an ounce, I believe silver will be preferred by many — if not most — retail customers as a cheaper alternative that provides the level of wealth protection investors might be looking for. With that in mind, I think the price of silver will break $50 an ounce this year. Both gold and silver will be highly profitable for investors this year. But the real money will be made from the junior companies that explore for new resources and develop new projects to mine for these precious metals… Shares of junior gold and silver exploration companies can often skyrocket overnight — especially when they make new discoveries. And making new discoveries is their specialty… You’d think that the most talented precious metal prospectors work for the major gold companies like Barrick Gold (NYSE: ABX) and Newmont Mining (NYSE: NEM), but that isn’t the case. You see, the most talented mine finders stand to make a lot more money if they go out on their own. A top geologist with a major that makes a big discovery might get a sizable bonus and bigger …

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Recovery Chronicles: Tales From the Modern Food Line

Filed in BP, frontline, Gold, GOld juniors, inflation, Lear, o, Quantitative Easing by on February 4, 2011 0 Comments
Recovery Chronicles: Tales From the Modern Food Line

Here’s one from the recovery chronicles: food stamp usage is up 14% from last year. Today, the Supplemental Nutrition Assistance Program (SNAP) serves about one in seven Americans. Of these, about half are children USDA officials say. From the Wall Street Journal by Sara Murray entitled: Some 43 Million Use Food Stamps “Nearly a year and a half into the economic recovery, some 43.6 million Americans continued to rely on food stamps in November. More than 14% of the population drew food stamps in November to purchase groceries as high unemployment and muted wage growth crimped budgets. The number of recipients was up 0.9% from October, according to the new report by the U.S. Department of Agriculture. Compared to a year ago, the number of people receiving food stamps was up 14.2%. In both Washington, D.C. and Mississippi more than a fifth of residents received food stamps — the highest recipiency rates of any state. But demand has grown stronger in the past year in a handful of other states that recorded significant increases on a per capita basis. In New Mexico, 19.4% of the population tapped into food stamps. That’s up 3.2 percentage points from the same month a year ago, the largest increase for any state. Idaho reported a similar jump: 14% of residents received food stamps, up 3.1 points from a year ago. Washington, D.C., Florida, Delaware and Texas all experienced similar year over year increases.” For comparison sakes here’s how the food stamp roles have grown

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Ben Plans, Food Prices Reach All-Time Highs

Ben Plans, Food Prices Reach All-Time Highs

Don’t you just love the Federal Reserve…? Higher prices have helped to set the world ablaze and Bernanke & Co. continue to insist inflation is a figment of our imagination. You see, despite the obvious fact that commodity prices are skyrocketing……. …the Fed comes out with this nonsense this morning. About inflation the Bernank remarked: “On the inflation front, we have recently seen significant increases in some highly visible prices, notably for gasoline. Indeed, prices of many commodities have risen lately, largely as a result of the very strong demand from fast-growing emerging market economies, coupled, in some cases, with constraints on supply. Nevertheless, overall inflation remains quite low : Over the 12 months ending in December, prices for all the goods and services purchased by households increased by only 1.2 percent, down from 2.4 percent over the prior 12 months. To assess underlying trends in inflation, economists also follow several alternative measures of inflation; one such measure is so-called core inflation, which excludes the more volatile food and energy components and therefore can be a better predictor of where overall inflation is headed. Core inflation was only 0.7 percent in 2010, compared with around 2-1/2 percent in 2007, the year before the recession began.” Meanwhile, the reality is food prices around the world have hit their highest levels EVER… From Breitbart entitled: World food prices hit record high: UN agency “ World food prices reached their highest level ever recorded in January and are set to keep rising for months, the UN food agency said on Thursday, warning that the hardest-hit countries could face turmoil. Rising food prices have been cited among the driving forces behind recent popular revolts in north Africa, including the uprising in Egypt and the toppling …

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The WSJ’s Most Controversial Article… Ever

Filed in BP, CBS, democrats, economy, euro, Gold, GOld juniors, Gold Market, o, Warren Buffett, yuan by on February 2, 2011 0 Comments
The WSJ’s Most Controversial Article… Ever

On January 9th, The Wall Street Journal ran an article that would become the most viewed, commented-on editorial in the publication’s history. The article was so controversial that the author — a Yale Law School professor — received several death threats. Thousands of enraged American readers went so far as to accuse her of advocating physical and emotional violence against children… Meet Amy Chua: a petite, 48-year-old Chinese American and the author of the WSJ firestorm piece, “Why Chinese Mothers are Superior”. Obviously, the headline caught my attention. My wife is Chinese and we have three children. But what really surprised me was the viciousness of the comments from readers. But as I perused through the comments of anger, hate, and even threats to Chua, I realized I as was actually reading comments of insecurity, fear, and envy. Think about it… Had this article been written by anybody other than a Chinese professor, it would’ve gone largely unnoticed. Bottom line: Americans fear the Chinese juggernaut. Here are just a few headlines from the past year that have caused panic among Americans and the West: Pentagon Surprised, Concerned as China Debuts High-Tech Weapons — Politics Daily Chinese ‘Carrier-Killer’ Missile Could Reshape Sea Combat — Fox News Chinese ‘carrier-killer’ missile raises concerns of Pacific power shift — Associated Press China Stealth Fighter? Photos Released Online Raise Speculations — Huffington Post China’s First Stealth Fighter Test Successful — CBS News China backs Spain to emerge from crisis: Beijing — Sydney Morning Herald Move Over Europe, China Is Pushing to Bailout the Greek Economy — Washington Post Wow: China to Bail Out Europe? — Daily Mail UK China’s Pres. Hu calls dollar’s preeminence ‘thing of the past’ — Wall Street Journal President Hu provoking the US by suggesting yuan replace dollar as reserve currency — AsiaNews.it And now Americans are fearful of the Chinese mother, as reported by Time Magazine: “Tiger Mom: Amy Chua Parenting Memoir Raises American Fears.” I hear it every day… “China is going to overtake the U.S. economy… We need to catch up before they flood our markets with electric cars, wind turbines, and …

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China’s Housing Bubble Begins to Top

Filed in BP, citigroup, economy, Gold, GOld juniors, Gold Market, housing-market, Lear, o, target by on February 1, 2011 0 Comments
China’s Housing Bubble Begins to Top

Round and round she goes, where she stops nobody knows…. From Bloomberg entitled: China’s Housing Market Nears U.S., Japan Bubble Levels: Chart of the Day “ China’s property market may be heading into a bubble as the economy’s reliance on real estate reaches a level close to the housing peaks in the U.S. and Japan, according to Citigroup Inc. The CHART OF THE DAY shows investment in residential property accounted for 6.1 percent of China’s gross domestic product last year, the same level as the record in the U.S. in 2005 that was followed by the subprime crisis, said Shen Minggao, Citigroup’s China research head. It’s also about 2 percentage points away from Japan’s 1970s housing boom, he said. “ China’s property market is entering into a bubble stage,” Shen said in a phone interview. “It’s evident that property prices are no longer sustainable once the residential investments achieve above 8 percent of nominal GDP, and China may not be an exception.” A 10 percent drop in China’s property investment translates to a 1 percentage point decline in nominal GDP, Shen said. Adding investments indirectly related to the real estate industry, nominal GDP will fall 2 percentage points to 2.5 percentage points, he said China’s property prices rose for 19th month in December, climbing 6.4 percent from a year earlier. The government last week increased the minimum down-payment for second

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Weekend: Tomorrow’s News Today

Welcome to the Wealth Daily Weekend Edition— our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles. As the markets continue to feed the bulls with yet another push to the upside, it’s but a sideshow to the world’s entrepreneurs. Deaf to market chatter, they simply go about their work as the talking heads on CNBC like Cramer and Maria take it all into overdrive. And while the markets matter in the grand scheme of things, to the truly creative types, it only provides a faint background noise. Instead, they are busy doing what they have always done: pushing their dreams down the unknown road. As always, the ascent of man reaches for a higher place. That’s why the future is so hard to predict. Innovation alters the world in ways we don’t always expect. So what can we look forward to over the course of the next five years? Advertisement The Biggest Investment of the 21stCentury It’s called the smart grid… and it’s about to revolutionize the way we use our electricity. GE and Google have already committed billions to this technology… But a handful of “super-ups” are poised to dominate this $297 billion/year industry… Get their names and ticker symbols here. According to IBM’s (NYSE: IBM ) latest “Five in Five,” technology will change people’s lives in the following ways… 1. You’ll beam up your friends in 3D. In the next five years, 3D interfaces (like those in the movies) will let you interact with 3D holograms of your friends in real time. Movies and TVs are already moving to 3D, and as 3D and holographic cameras get more sophisticated and miniaturized to fit into cell phones, you will be able to interact with photos, browse the Web, and chat with your friends in entirely new ways. 2. Batteries will breathe air to power our devices. In the next five years, scientific advances in transistors and battery technology will allow your devices to last about 10 times longer than they do today. And better yet, in some cases, …

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Uranium’s Bull Market Pushes Forward

Filed in BP, Gold, GOld juniors, Gold Market, lead, Lear, miners, mongolia, o, shares, target, ubs by on January 28, 2011 0 Comments
Uranium’s Bull Market Pushes Forward

Uranium prices are breaking out. A pound of U3O8 hit $70 yesterday, up 12% already for the year. And thanks to increasing demand and tight supply, prices could be headed even higher. When uranium prices bottomed out last summer, Wealth Daily took notice and started telling you about it… Back in August, Ian Cooper told readers: “Uranium just became the hottest story of the year — and quite possibly the ‘supply-demand’ buying opportunity of a lifetime.” Why we’re investing in uranium: increasing global demand production shortfalls mine closings diminishing secondary supplies significant price increase growing speculation He hit the nail on the head. Since that time, the price of uranium has increased some 60%. Ian told subscribers, “One company set to benefit significantly is Cameco (NYSE: CCJ), the co-owner of the world’s biggest uranium mine.” Wealth Daily members who bought CCJ on Ian’s recommendation have returned a 52% gain so far. But Ian wasn’t the only Wealth Daily editor telling you about uranium… A few weeks later, Chris DeHaemer wrote: “The downtrend [in uranium prices] has been broken and we’ll start to see higher highs as well as higher lows.” In his article, Chris talked about Uranium One (TSX: UUU) and Denison Mines (AMEX: DNN), which have returned 70% and 119% gains respectively since he wrote the article. Even Angel Publisher Brian Hicks wrote to you a few months back, calling Uranerz Energy (AMEX: URZ) “the single uranium stock you need to own right now.” At the time, he urged Wealth Daily subscribers to buy shares of Uranerz Energy at $1.50: “Buy URZ at current levels for triple-digit gains in the coming months.” Since that time, shares of URZ have more than tripled, paying investors a 267% gain . Shares of uranium miners like Uranerz and the others have been reacting positively to surging commodity prices. Uranium prices spike 67% in six months Since bottoming out at $42 in June, the price of uranium-oxide (U3O8) jumped to $70 per pound this week for the first time since April 2008 as demand…

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The Great American Snooze Button

The Great American Snooze Button

I’ve been known to hit the snooze button on occasion. My long-suffering editor can attest to that. Just ten more minutes, then I’ll… Imagine if each press of the snooze button made the next BEEP-BEEP-BEEP happen a little bit sooner than the last. Eventually, you wouldn’t be able to sleep at all. Time to either wake up or smash the alarm clock. America has been hitting the fiscal snooze button for the last 30 years. The alarm is getting shriller these days, and it beeps more often than it used to. So, what’s the plan? In essence: smash that stupid alarm clock to bits and worry about consequences later. Social Security, and pensions, and Medicare, oh shit my! In 2011, Social Security will pay out $130 billion more in benefits than it collects in revenue. The program’s deficit this year would have been a paltry $45b, if not for Obama’s one-year deal lowering SS payroll deductions from 6.2% to 4.2%… The CBO admits the system will be completely drained by 2037. But even their own analysts don’t buy that, as reported by the Christian Science Monitor . By the way, did America really enact a tax break that lasts one year ? Yes, we did. The social security payroll tax cut is a 12-month deal— for now. Short-sightedness is at all-time highs in D.C. Now don’t get …

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