Generous Kid and College Education

It looks like the market is in mass sell mode today.  I'm not sure that selling good companies to move to cash is the right move.  Considering "Cash" or "Treasuries" defaulting is the reason for the market sell off.  For example, SLW is down 10% over the last couple days, yet silver isn't down at all.

I saw this video yesterday and it's a very unexpected move from a young kid.  It looks like his parents raised him right.

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I've said recently that with this current job market, a college degree isn't worth a thing.  Here is some data to the contrary.  I would like to see the numbers from 2008-2011, however.




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I really like Art Cashin.  He didn't have much positive to say today.  He's pretty plugged in.


Heaven Help Us! We May Be Looking At Our Future - The embarrassing fumbling in Congress may not be a temporary mess.

There are fears that partisan deadlocks will be with us for years or even a decade. Here is a bit from a Reuters article that I circulated to some friends yesterday:

WASHINGTON (Reuters) - The debt limit impasse in Washington, where a polarized Congress is struggling to avert an imminent U.S. default, points to a deeper crisis -- America may be entering an age of political paralysis.

President Barack Obama's ability to get any significant legislation passed before next November's election is all but gone and whoever sits in the White House in 2013 will likely face a Congress unable to tackle major issues.

A crisis of governance -- born of decades of gerrymandering, polarization and exploding deficits -- could persist in the short term and may last for a decade, said James Thurber of American University's Center forCongressional and Presidential Studies.

Later, the author cites the widely respected and astute political observer Charlie Cook:

Charlie Cook, a veteran independent political analyst, said gridlock in the House will likely remain after next November's congressional elections and that neither Democrats nor Republicans will have effective control of the Senate -- making the passage of major legislation very difficult.

Cook said whichever party wins the 100-seat Senate in 2012 will likely have only a slim majority in the low 50s. Neither party will have the 60-vote supermajority needed to block an opposition filibuster -- a dynamic that means contentious legislation will struggle to win passage.

"The polarization has gotten to an unprecedented place," Cook said. "I don't think there's much expectation of major legislation passing in the next year and a half and, to be perfectly honest, it makes you wonder what will happen in 2013 and 2014."

That raises questions about what would happen if we faced a military or financial crisis or even a major natural disaster.

Maybe it’s not political kabubi. Maybe it’s just political chaos, and it’s going to be with us for a while.

Read more: http://www.businessinsider.com/art-cashin-on-the-political-situation-2011-7#ixzz1TVFgGwdj

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Someone posted this with heading, "Hey Congress!".  Office Space is a classic movie.

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BofA Giving Away Houses and "Raise The Debt Ceiling" Rap

I'm so glad to see that Bank of America is now giving away the house our tax dollars bailed out.  Did I mention that many of them are then being demolished?  Tax dollars at work...

BofA to give away houses

Have too many foreclosed properties?
Why not give them away?
That's what Bank of America plans to do with as many as 150 vacant and abandoned properties in and around Chicago through a new "collaboration" with the city that's intended to address the problem of abandoned properties.
"Unfortunately," BofA said in a statement, "many homeowners faced with unemployment, underemployment and other economic hardships have transitioned to alternative housing situations, and in many cases, have walked away from their homes, leaving behind vacant and deteriorating properties that can cause neighborhood blight."
As part of the new effort, BofA plans to:
Register properties with the city when the mortgage is delinquent and the property has been identified as vacant and abandoned.
Identify up to 150 properties that will be referred to a new Cook County vacant and abandoned building court call in an effort to speed up the foreclosure process and return the properties to stable, productive use. The foreclosure timeline for vacant and abandoned properties in the area currently averages 18 months, the bank said.
Contribute funds toward the city's costs of demolishing deteriorating buildings on the donated properties.
Donate foreclosed and vacant condominiums to the nonprofit Community Investment Corp. as part of an initiative to upgrade, preserve and stabilize management of affordable rental housing.
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I saw this yesterday and couldn't stop laughing.  The time some people have on their hands.  Kudos to Remy.

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My cousin sent me this yesterday, and the analogy is fantastic.

Mad Money and Charts, Charts, Charts

 I used to dislike Jim Cramer.  However, he is really starting to grow on me.  He has toned down the "crazy".  This portion of his show yesterday was the best I've seen.



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I have had more people than I can count tell me that gold is way too high.  Of course, none of them have used any real statistics to back it up.  Here is my rebuttal.

Charting David Rosenberg's Thesis: "No Gold Bubble Until $3,000"

Gold and M2: "Whether you normalize gold by the money supply or the CPI, the bull market has a long way to go. By my estimates, this does not even turn into a bubble until we get north of $300 an ounce."

 

More: "when gold hit its bubble climax in 1980, it got to 5x the level of the S&P 500; today gold is 20% higher. No bubble in this chart, yet anyhow."

More: "when gold hit its bubble climax in 1980, it got to 5x the level of the S&P 500; today gold is 20% higher. No bubble in this chart, yet anyhow."

"The story is just as valid when gold is measured in "bond index" terms (using the Ryan labs historical data for treasuries)

"Gold market cap in S&P 500 is $26 billion... only 0.2% of the entire market"
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This is the "chart of the day" on Business Insider.  They survey companies and asked them how the debt ceiling debate has affected their capital expenditures.  16% of companies say that the fight has prompted them to reduce spending.

Read more: http://www.businessinsider.com/business-confirm-the-debt-ceiling-fight-causing-them-to-spend-less-2011-7#ixzz1TJE83bWl

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This last chart shows the pension problems of each state.  Forget about the Federal issue for a minute and you see the States are in deep as well.  19 states are at or below the 35% underfunded pension and liability obligations.

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Not Our First Default and The Other Hot Dog

The debt ceiling discussion has been the talk everywhere the last couple of weeks.  However, this wouldn't be the first time the US defaulted on our debt.  It has happened several times before.

Default Now, or Suffer a More Expensive Crisis Later: Ron Paul

Debate over the debt ceiling has reached a fever pitch in recent weeks, with each side trying to outdo the other in a game of political chicken. If you believe some of the things that are being written, the world will come to an end if the U.S. defaults on even the tiniest portion of its debt.
In strict terms, the default being discussed will occur if the U.S. fails to meet its debt obligations, through failure to pay either interest or principal due a bondholder. Proponents of raising the debt ceiling claim that a default on Aug. 2 is unprecedented and will result in calamity (never mind that this is simply an arbitrary date, easily changed, marking a congressional recess). My expectations of such a scenario are more sanguine.
The U.S. government defaulted at least three times on its obligations during the 20th century.
-- In 1934, the government banned ownership of gold and eliminated the right to exchange gold certificates for gold coins. It then immediately revalued gold from $20.67 per troy ounce to $35, thus devaluing the dollar holdings of all Americans by 40 percent.
-- From 1934 to 1968, the federal government continued to issue and redeem silver certificates, notes that circulated as legal tender that could be redeemed for silver coins or silver bars. In 1968, Congress unilaterally reneged on this obligation, too.
-- From 1934 to 1971, foreign governments were permitted by the U.S. government to exchange their dollars for gold through the gold window. In 1971, President Richard Nixon severed this final link between the dollar and gold by closing the gold window, thus in effect defaulting once again on a debt obligation of the U.S. government.
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Yesterday, I posted a piece on the world's most expensive hot dog.  Today, I give you Gus, a very different hot dog.  Animal videos seem to always put a smile on my face.

 

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I know I have mentioned this before, but silver continues to be manipulated on the COMEX.  This video shows how 1/3 of all silver mined in the world was traded in 1 minute last Tuesday.  Over $10 billion in 1 minute.

 

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I was also turned on to a great weekly piece called, "Things that make you go hmmmm..."
It's put together by Grant Williams.  If you would like to subscribe to it, just go to this link.  It's free and full of good content.
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Here are the word clouds from Obama and Boehner's speeches last night.  I think these things are really cool.  2200 words from Barry and 930 from John.  If you didn't see hear the speeches, these are the transcripts.

Obama

Boehner

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The "High End" Bubble and Game Show Humor

This is from Michael Krieger's Blog:

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way - in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.

- The Opening Paragraph from Charles Dickens’, A Tale of Two Cities

Bubbles, Bubbles Everywhere…
Without the ability to identify bubbles I’d pretty much be useless in this business.  I live, breathe and eat macro news and trends.  It is what I am inherently good at and I leverage that talent to the best of my ability.  On the other hand put me in front of a financial model and I want to blow my brains out within 20 minutes.  I am not exaggerating.  I worked in equity research for five years.  I learned a lot actually and I am very lucky to have had the experience but it was like taking a fish out of the water, tossing it in the air and telling it to fly.  It just wasn’t natural.  I have always said that people screw up when they don’t figure out what they are naturally good at and then stick to that, but rather attempt to be a jack of all trades.  I make a living off of people that don’t get that.  I love it when people engage in my world when they have no business doing so, but the best types, the types that make people like me salivate are those that are ignorant of the macro world but also suffer from the deadly (to them) combination of large bank accounts and equally large egos.

So I haven’t written about many “bubbles” since 2008.  Back then I was at Bernstein and I was hardly capable of writing a word without  saying commodities were a bubble ready to crater.  I also hammered home the point of the “fert.coms,” which included POT and MOS.  The main reason I haven’t written about similar bubbles is because I have been 100% focused on what is likely the biggest bubble in the history of mankind.  The fiat U.S. dollar and all income streams related to it.  Of course, the inverse to this monumental bubble are gold and silver and the commodities necessary to everyday life (food and energy) and as such I have been wildly bullish on those particular items.  This is the most amazingly easy trade I have ever stumbled upon because it takes some serious macro thinking and a grasp of financial history to understand the precious metals markets.  These are two things Wall Street is not very good at.  Even better, Wall Street is full of ego maniacs with lots of money.  So all a lot of these clowns do is look at the price charts of gold and silver and the childish thought “bubble” pops into their clouded heads.  Of course it’s very tempting to just look at the charts and think this if you don’t understand what is really driving their ascent.  The popping of the largest bubble in human history.  The fiat, counterfeit, and immoral U.S. dollar standard.

The "High End" Bubble
Anyway, gold, silver and the dollar are not the focal point of this email (amazingly).  The focal point of this email is what I believe to be the only other major bubble currently in place besides the dollar and that is this absurd view that the “high end” is some sort of great secular investment theme that will carry on forever due to rising incomes in the emerging markets and the bifurcation between haves and have-nots in the West.  Like any other bubble, it begins with a real macro trend; a real and powerful story.  Then at some point the thing gets stretched beyond its ability to continue and then finally you get to a point where investors confidently extrapolate the trend forever into the future just at the time the trend itself becomes unsustainable.  With regard to “high end” I believe we are there now and I think this entire theme will implode on itself in the not too distant future and there are two main reasons why I think this.

First, we all know about the bifurcation in the haves and have-nots in the West.  The funny thing is that when you hear Wall Street talking heads speak to this they act as if they just discovered electricity.  Sorry guys, this has been going on for decades.  The only thing that has happened is that the super, super rich (0.1% of the country) and their puppets in D.C. neglected to use their positions of power during the 2008 crisis to help their country and their fellow citizen get back on their feet and reform the system, but rather they decided to totally raid, abuse and pillage their fellow Americans in an act of unprecedented greed and recklessness.  What the “analysts” fail to see is that these “elites” have played their hand way too far.  The social crisis facing the country as a result of the most egregious plundering in modern American history will spell the end of the “high end” theme.  Buying into this trend now is like getting long Marie Antoinette’s unsevered head in 1792.             


Moreover, in the BRICS (China in particular) this bifurcation has also exploded in recent years and with inflation spiraling higher we have a cauldron for social unrest and revolution.  The haves have already taken everything from the have-nots.  When that happens you don’t buy high end retail stocks, you get long guillotines (to be clear I do not condone violence WHATSOEVER, I am merely calling the situation as I see it).  Just read this article from Bloomberg this morning to get an idea of how close we are to a total social implosion.  http://www.bloomberg.com/news/2011-07-21/consumers-in-u-s-relying-on-credit-as-inflation-erodes-incomes.html.  Key quote from the article: “Consumers, particularly in the lower-income end, are being forced to use their credit cards for everyday spending like gas and food, said Tavares, who’s based in Atlanta. That’s because there’s been no other positive catalyst, like an increase in wages, to offset higher prices. It’s a cash-flow problem.” and… “The swings in purchases of fuel and food have been “dramatic,” Tavares said. The volume of gasoline purchases placed on credit cards jumped 39 percent last month from a year earlier, compared with a 21 percent increase in June 2010, he said. Food shopping increased 5 percent after falling 7 percent last year.” Serfs up!     

The second reason I think this trend is set to be put to bed is that a lot of these companies are not really “high end” at all.  I mean look at some of the winners benefitting from this theme.  Take JWN (+23% ytd), RL (+27% ytd), COH (+20% ytd), TIF (+35% YTD), BRBY LN (+42% ytd), RMS FP (+50%) and AXP (+22% ytd).  I cannot think of a worse basket of stocks to buy right now.  The thing about these names is yes of course the super rich do shop there but that is not where the marginal dollar is coming from.  The marginal dollar is coming from the emerging market consumer that THINKS they are rich and making false extrapolations about their real wealth and future earnings potential just as so many Americans did earlier this decade when they felt wealthy due to the housing bubble.  Essentially the same trade in happening in China and elsewhere in the developing nations as we speak.  Furthermore, believe you me when the SHTF the super rich aren’t going to run into Coach and Ralph Lauren and support sales.  They will buy gold and real estate in a foreign country in anticipation of the guillotine (metaphorically speaking hopefully).

Peace and wisdom,
Mike 
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I've never seen the game show "Lingo", but here is a funny clip I stumbled on this morning.

 

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I like a good hot dog but I think $69 is a little expensive...

Hot Dog

Created by: Stephen Bruce
Location: Serendipity 3, New York City
Price: $69

Serendipity 3 has been a New York City institution since 1954. It’s a popular tourist attraction that was frequented by such legends as Marilyn Monroe, Jackie Kennedy and Andy Warhol , and served as the setting for multiple films, most notably the 2001 romantic comedy Serendipity , starring John Cusack and Kate Beckinsdale.

Owner Stephen Bruce has always known the value of a good publicity stunt, so on June 23, 2010, otherwise known as National Hot Dog Day, the restaurant offered the "Haute Dog," a foot-long frank grilled in white truffle butter and covered in black truffles and foie gras. It sold for $69, earning the Guinness World Record for the most expensive hot dog in the world .

 

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Mutual Fund Outflows and Debt Rises No Matter The President's Party

Slow news day today.  This will probably be my last post of the week.  Enjoy!


I have seen this GDP to Debt data in many forms, but never tied to the President's party affiliation.  Basically, it doesn't matter is the President is Democrat or Republican when it comes to rising debt to GDP.  You can see what has happened since we went off the gold standard in the 70's.

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This is one of those stats that when you see it happening, should concern you about the future performance of the stock market.  Mutual funds only carry a small amount of cash.  When you see these constant outflows, they will eventually have to sell their positions to cover the outflows.

Equity/Hybrid – Overall equities experienced outflows of $3.41 billion following the $3.84 billion during the prior week, as domestic outflows of $4.06 billion were partially offset by foreign inflows of $648 million. Domestic equities have now experienced outflows in twelve consecutive weeks (totaling $38.6 billion). Note, after 3 positive weeks, the S&P 500 declined by 1.6% for the respective week. Year-to-date, domestic equities have now experienced outflows of $25.8 billion. On the international side, the $648 million of inflows were up slightly from the $630 million of inflows the prior week.  Hybrid flows remained positive with $592 million of inflows.
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I think it's funny when reporters try to be uppity and end up making a fool of themselves.  Contessa Brewer has this attempt blow up in her face.

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Well it seems that it is legal for the state of Florida to sell you personal information for it's own gain.  Florida must be in trouble if it's pimping out the residents for a measly 63 million dollars.

Florida Makes $63M Selling Drivers' Info 

The state of Florida made $63 million last year selling what many think is personal information.

Local 10 has learned the Department of Highway Safety and Motor Vehicles is selling people's names, addresses, dates of birth, a list of the vehicles they drive, and it's legal.
"Per federal mandate, there are companies that are entitled to this information. Insurance companies, for example, are entitled to this information. Employers are entitled to this information," said Ann Howard of the Florida Department of Highway Safety and Motor Vehicles.
The state is currently selling this information to companies including Lexus Nexus and Shadow Soft. Those companies gather data on people and then sell that data. The companies must sign contracts with state claiming they won't harass people.
"This information cannot be sold to a company that plans to solicit business, such as companies that want you to come to their ice cream store or companies that want you to buy their vehicles," Howard said.
The state does not sell Social Security numbers or driver's license numbers, and a Florida judge said what the state is doing is legal.No one outside the driver's license office in Lauderhill believed it."This is my own personal information, and I don't think it should be out there," said John Platt."You're kidding me," said Bebe Neice"That's crazy. I didn't have a clue about it," said Mischka Peralto.
The state said selling the information is also a matter of public safety. There are 15.5 million registered drivers in Florida, and the state charges companies 1 cent per electronic file. If a vehicle is recalled, the state of Florida has the latest and most current information on who owns that vehicle, so the manufacturer can notify the owners of the recall.Only judges and law enforcement officers can request their personal information not be sold."
If a company violates the Federal Driver Privacy Protection Act, they do face federal charges and federal fines," Howard said.

Here's a Start on Fixing the Economy and The Privateer

I have always tried to stick to "just the facts, ma'am".  Stats don't lie, but they sure can be interpreted differently.  This might be my longest entry, but it has the most substance.  I hope everyone reads the piece I'm going to publish by The Privateer.  It is eye-opening and might be the most easy to read piece I've seen on the debt and fiat currency issue.  First, I want to start with a guest post on ZeroHedge.  It follows my mantra of "Be part of the solution, not the problem.".

You Want To Fix The U.S. Economy? Here's A Start

Submitted by Charles Hugh Smith from Of Two Minds

A simple 8-point plan would restore both the banking and the real estate sectors, and end the political dominance of the parasitic "too big to fail" banks.

Craven politicos and clueless Federal Reserve economists are always bleating about how they want to fix the U.S. economy and restore "aggregate demand." OK, here's how to start:

1. Force all banks to mark all their assets to market at the end of each trading day, including all derivatives of all types, including over-the-counter instruments.

2. Allow citizens to discharge all mortgage and student loan debt in bankruptcy court, just like any other debt.

3. Banks must mark all their real estate to market weekly as defined by "last sales of nearby properties" adjusted for square footage and other quantifiable measures (i.e. like Zillow.com).

4. Require mortgage servicers and all owners of mortgage-backed securities to mark every asset within each pool to market weekly.

5. Any mortgage, loan or note which was fraudulently originated, packaged and sold, including the misrepresentation of risk, the manipulation of risk ratings, fraudulent documentation by any party, etc., will be discharged as uncollectable and the full value wiped off the books and title records without recourse by any of the parties.

If a bank fraudulently originated a mortgage and the buyer misrepresented material facts on the mortgage documents, then both parties lose all claim to the note and the underlying asset, the house, which reverts to the FDIC for liquidation, with the proceeds going towards creditors' claims against the bank.

6. Any bank which misrepresents marked-to-market asset values will be fined $10 million per incident.

7. Any bank which is insolvent at the end of a trading day will be closed and taken over by the FDIC the following day, and liquidated in an orderly manner via open-market auctions of all assets, including REO (real estate owned).

8. All derivative positions held by the insolvent bank will be unwound immediately, and counterparties who fail to make good on their claims will also be closed, given to the FDIC and liquidated.

You know what this is, of course: a return to trustworthy, transparent accounting. And you know what the consequences would be, too: all five "too big to fail" banks would instantly be declared insolvent, and most of the other top-25 big banks would also be closed and liquidated.

At least $3 trillion in impaired residential mortgage debt would be written off, maybe more, and $1 trillion in impaired commercial real estate would also be written down. Derivative losses are unknown, but let's estimate it's at least $1 trillion and maybe much more.

If $5.8 trillion of fantasy "value" is wiped off the nation's books, that's only a 10% reduction in net household and non-profit assets, which total $58 trillion. Even an $11 trillion hit would only knock off 20%. If that's reality, if that's what the assets are really worth in the real world, then let's get it over with. Once we've restored truthful accounting and stopped living a grand series of debilitating lies, then the path will finally be clear for renewed growth.

The net result would be the destruction of the political power of the "too big to fail" banks, the clearing of the nation's bloated, diseased real estate market, and the restoration of trust in institutions which have been completely discredited.

Bank credit would flow again, and we could insist on a healthy competitive system of 250 small banks instead of a corrupting system of 5 insolvent parasitic monsters and 20 other bloated but equally insolvent financial parasites.

Those who lied would finally get fried. At long last, those who misprepresented income, risk, etc. would actually pay some price for their malfeasance. Criminal proceedings would be a nice icing on the cake, but simply ending the pretence of solvency would go a long way to restoring banking and real estate and ending regulatory capture by TBTF banks.

What's the downside to such a simple action plan? Oh boo-hoo, the craven politicos would lose their key campaign contributors. On the plus side, the politicos could finally wipe that brown stuff off their noses.
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I urge everyone to read this entire piece.  It's very informative, especially if you need a refresher on how debt and fiat currency has affected the world.  Here are some of the highlights.

THE PRIVATEER

The aftermath of the 1929 crash ended them in the US and all over the world. Neither have ever resurfaced. But the trap did not snap completely shut until the last vestige of a Gold connection to the money in circulation was extinguished on August 15, 1971.

That was 40 years ago. For the past two generations, the world has lived with a financial system which is ENTIRELY composed of promises to pay. The “reserve” at the base of this pyramid of debt is the
promises to pay of government, aka sovereign debt. And the “reserve” under this sovereign debt is the
sovereign debt of the issuer of the reserve currency - the debt paper issued by the US Treasury.

Not one penny of US Treasury debt has been repaid for 51 years - the last time that US government
funded debt actually decreased on a year-to-year basis was 1960. Ninety-seven percent of today’s funded Treasury debt total has been accumulated since August 1971. Sixty percent of it has been added in the past decade. Forty percent of it has been added since the first signs of the GFC emerged in early 2007.

Assumptions on Greece:
“How can a nation of 11 million people expect to pay off a government debt amounting to 475 Billion
Euros?” We have read variations on this question many times in the mainstream financial media. We
have yet to read this question: “How can a nation of 310 million people expect to pay off a (funded)
government debt amounting to $US 14.5 TRILLION?” If you do the arithmetic you will see the ratio of debt to population is slightly lower in Greece than it is in the US.

Over the past eighteen months, the average servicing costs of existing Greek sovereign debt have at least quintupled. Greek debt as a percentage of Greek GDP is rising fast. Why? Because Greek government borrowing (a component of any nation’s GDP) is being constrained by the blowout in yields. Greece isheld to be a basket case facing the inevitability of default because they cannot devalue their currency.

Since the early 1980s, the average Fed Funds rate has been 5.7 percent. Since the end of 2008, it has been 0.00 percent. In their projected deficits between now and 2020, the Obama administration assumes a rate of 2.5 percent. A return to the average rate would add $US 4.9 TRILLION to the deficits. Further, the size of the deficits depend on an assumption of annual growth rates averaging 4.2 percent over the next three years. A normal growth rate of 2.5 percent would blow out the deficits by another $US 4 TRILLION by 2020. The US CAN devalue its currency and has been doing so for ten years. It is held to be solvent because it CAN raise its debt “limit”. Greece can’t do either. That’s the only difference.
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License Plate Lawsuit

The complaint alleges Linlor requested a personalized license plate of “GOPALIN” in 2009 and 2010, but the DMV denied his applications, stating the request was "vulgar or obscene or expressing superiority of political affiliation."

Despite the judge’s decision, the complaint alleges the DMV again denied Linlor’s request for a “GOPALIN” plate. Meanwhile, Linlor discovered the DMV had issued other politics-related license plates, including “GOGREEN,” “DMOCRAT,” “AL GORE,” “KERRY,” “EDWARDS,” “DEAN,” “HILLARY” and “RONPAUL,” while rejecting requests for “REPBLCN” and “BUSH,” the complaint alleges.

When Linlor applied for a “GO OBAMA” plate, the DMV approved it, he alleges.
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Govt Wastes $300 million on Navy Ships Headed to Scrap Heap

They are the two ships no one wanted, almost constantly embroiled in one dispute or another for the past 25 years. The two Navy behemoths have never gone on a mission, were never even completed, yet they cost taxpayers at least $300 million.

Now the vessels, the Benjamin Isherwood and the Henry Eckford, are destined to leave Virginia waters for good and be scrapped at a Texas salvage yard, with no money coming back to the U.S. Treasury.
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In full disclosure, I own some of these coins for this exact reason.  This is from Steve Sjuggerud, who writes a piece called True Wealth.

This Soars in a Gold Bull Market, But You Haven't Missed It Yet

In every gold bull market since we went off the gold standard 40 years ago, this particular asset has soared by hundreds of percent.

But so far in this current bull market, this asset hasn't done a darn thing.

If this asset does what it's done in every other gold bull market, hundreds of percent gains lie ahead...

In the 1972-1974 gold bull market, this asset soared 348%.

In the 1976-1980 gold bull market, this asset soared 1,195%.

And in the much smaller 1986-1989 gold bull market, this asset still soared hundreds of percent.

Now we're in the greatest gold bull market since the 1970s. Gold is up 477% over the last 10 years. But this particular asset is only up about 25%.

In True Wealth, I recommend a slightly higher-quality coin: a pre-1933 Saint-Gaudens that's been graded as just about perfect (a grade of MS-65 by one of the two major grading companies) and is sealed in a tamper-proof container. These coins are much rarer than the raw coins... yet they sell for about $2,300 – the smallest premium in history relative to their melt value.

To give you an idea, at the peak of the last bull market in gold, these particular coins sold for nearly 10 times the price of gold. Ten times the price of gold today would be over $15,000 for these coins. But you haven't missed a thing... You can buy them for $2,300 today.
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This last quote is from Stansberry Research's Digest.  If Goldman Sachs is having trouble making their numbers, I can only imagine how tough it is for the other banks.  I'm not a fan of bank stocks.  I think they will be the first and hardest hit in a market correction.

S&A DIGEST

Forgive us if our schadenfreude is showing. But the destruction of the paper money system appears to be working its magic, even on the indestructible Goldman Sachs...

Goldman's second-quarter profit of $1.05 billion was considerably below analyst expectations and only the fifth time it's missed estimates in its 12 years as a publicly traded company. Goldman's revenue sank in its fixed-income, currency, and commodity trading (normally the bank's outperformer) divisions. The reason, according to CEO Lloyd Blankfein: "Certain of our businesses had disappointing results as we reduced our market risk in response to attempting to manage fluctuations in prices and market liquidity."

That's obviously pure B.S. But I think it means something like, "We tried to lever up during the quarter and then lever back down in time to report big profits and a lighter balance sheet in our SEC filings, the same scam we've been running since we went public. But this time it just didn't work. We're not sure why, but our government spies aren't answering their phones as quickly as they once did."

Heat Wave and Wynn CEO Blasts Obama

Man is it hot out there.  Everyone needs to be careful.  A Fayetteville woman left her 1 month old in the car while she went to the grocery store yesterday.  Luckily, the child didn't die, but is still in bad shape.  Her excuse, she forgot the baby was in the car.  Really?

Also, Gold seems dear right now – especially considering its two-week run. It's soaring in the face of the U.S. and European crises. Once the government announces solutions (albeit short-term ones), the metal will correct.

Silver, on the other hand, does not seem overextended. Although "the other metal" continues its steady rise – crossing to more than $40 an ounce today – it's still nowhere near its record high of $50 an ounce, which it hit in April.

13 deaths in Midwest tied to heat wave 

The heat was on Monday for millions of Americans from the Upper Midwest to Texas and Oklahoma, where roads buckled and poultry farmers deployed fans and watered rooftops to protect flocks. 

The National Weather Service put 18 states stretching from North Dakota to Texas and East to Ohio under a heat warning, watch or advisory. It said as many 13 deaths in the past week in the Midwest could be blamed on the effects of the heat.

When humidity was factored in, the heat index made it feel as hot as 110 degrees in a broad swath of the nation.
"This is unusual," said Pat Slattery, spokesman for the Weather Service. "There's no sugar-coating anything here."
In steamy Oklahoma City, 13 state government buildings at the capitol were closed after a break in a water main that shut off air-conditioning systems. 
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Wynn CEO Goes On Epic Anti-Obama Rant On Company Conference Call

Who doesn't love a good rant? We certainly do, and as usual, Steve Wynn, the CEO of casino company Wynn Resorts, delivered on his company's quarterly conference call today.
Via Seeking Alpha, here's the crux of it:

I believe in Las Vegas. I think its best days are ahead of it. But I'm afraid to do anything in the current political environment in the United States. You watch television and see what's going on on this debt ceiling issue. And what I consider to be a total lack of leadership from the President and nothing's going to get fixed until the President himself steps up and wrangles both parties in Congress. But everybody is so political, so focused on holding their job for the next year that the discussion in Washington is nauseating.

And I'm saying it bluntly, that this administration is the greatest wet blanket to business, and progress and job creation in my lifetime.

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Here is your Darwin Award winner for the day.

Albuquerque copper thief likely injured by jolt

Monday, July 18, 2011 ALBUQUERQUE, N.M. (AP) — Albuquerque police say at least one vandal was likely seriously injured trying to steal copper from an elementary school because the thieves left behind several melted tools and a scorched T-shirt.
They cut into a power line at East San Jose Elementary School over the weekend and triggered a 480-volt electrical shock.
Albuquerque Public Schools officials tell KOB-TV the vandals were on top of the roof, equipped with tools and a plan to rip off copper wire.
Investigators say the thieves likely knew they were cutting into a live hot-wire but did it anyway.
Police have been checking emergency rooms looking for burn victims.

 

Treasury Steals Gold

Again, does this surprise anyone?  The government is nothing but a big bully.  I suggest we knock it down.

US Treasury Seizes $80 Million in Gold From Private Owner

A jeweler’s heirs are fighting the United States government for the right to keep a batch of rare and valuable “Double Eagle” $20 coins that date back to the Franklin Roosevelt administration.

Philadelphian Joan Langbord and her sons say they found the 10 coins in 2003 in a bank deposit box kept by Langbord’s father, Israel Switt, a jeweler who died in 1990. But when they tried to have the haul authenticated by the U.S. Treasury, the feds, um, flipped...

More from the Associated Press:

Treasury officials charge that the never-circulated “double eagles” were stolen from the U.S. Mint in Philadelphia in 1933. They could be worth $80 million or more, given that one sold for nearly $7.6 million in 2002.

The coins come from a batch that were struck but melted down after President Franklin D. Roosevelt took the country off the gold standard in 1933.

Two were preserved for the Smithsonian Institute. But a handful more mysteriously got out.

The daughter and grandsons of Israel Switt, a jeweler and scrap metal dealer on nearby Jeweler’s Row, say they discovered 10 of them in his bank deposit box in 2003.

Joan Langbord of Philadelphia and her sons went to the U.S. Treasury to authenticate the coins, but the government instead seized them. Authorities noted that the box was rented six years after Switt died in 1990, and that the family never paid inheritance taxes on them.

What’s more, the Secret Service has long believed Switt and a corrupt cashier at the Mint were somehow involved in the double-eagle breach.

An easy $80 million dollar score for Tim Geithner and his merry band of financial Stasi.

While we understand the Treasury’s position with regards to the coins being stolen, unless they have direct evidence of these specific coins being linked to theft and Switt’s involvement (which is circumstantial at best) then these coins belong to the Langbord family.

Take note America, this is what happens when you put your trust in a government run amok.
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I don't watch much soccer, but I usually watch the World Cup.  They are the only television events that are viewed more than the Super Bowl.  Congratulations to Japan for winning the Women's World Cup.  The USA had it locked, except they forgot about the last 3 minutes.  It's a great boost for a country that is reeling. 

Darren Clarke and 29 Companies with More Cash than the Treasury

 First, I would like to say congratulations to Darren Clarke for his Open Championship.  One of my favorite players, he overcame some personal roadblocks to win the oldest tournament around.

The Open 2011: Darren Clarke wins first major aged 42

Darren Clarke holds aloft the Claret Jug after winning the Open Championship at Royal St George's. Photograph: Stuart Franklin/Getty Images
Darren Clarke, Open champion. Easy to say, hard to believe. But that was the story told on Sunday as the big man from Dungannon walked strong and proud through the squalls, all the way up the final hole theatre at Royal St George's to claim the greatest prize in golf. At the age of 42, in the supposed twilight of a distinguished career, the Northern Irishman followed his countryman and one-time protege Rory McIlroy into the role call of major champions with a three‑shot victory. It was a victory for pure talent and for the Everyman. In an era of the golfer athlete, Clarke is the cigar‑smoking, Guinness‑drinking proof there is more than one way to make history in this crazy game of ball and club. The winning putt, uproariously greeted in the stands around the 18th green, dropped in from all of three inches. But the journey to that moment had taken Clarke through triumph and despair both on and off the golf course. He had won more than 20 tournaments around the world, but never won the big one. He had played a distinguishing role in five Ryder Cup teams, never more so than in 2006 at the K Club, when he performed brilliantly for Europe just a few weeks after the death of his wife, Heather. Yet for all that he had never gained entry into the exclusive club reserved for major champions – a rotten injustice for a golfer acknowledged by his peers as one of the most naturally gifted of his generation. Injustice, be gone. Afterwards, he paid tribute to his deceased wife and to his two sons, Conor and Tyrone. The boys watched from home in Northern Ireland as their father showcased the skills he learned in his youth and which he recently became reacquainted with after moving from London back home, to Portrush. "In terms of what's going through my heart, there's obviously somebody who is watching down from up above there, and I know she'd be very proud of me. She'd probably be saying, I told you so," he said of the late Heather Clarke. "But I think she'd be more proud of my two boys and them at home watching more than anything else. It's been a long journey to get here. It's incredible – it really is. It's for the kids." ***************************************************************************** I can be called "negative" by some, but I looked a real numbers and statistics.  This isn't good...  Here Are The 29 Public Companies With More Cash Than The US Treasury
As was pointed out yesterday, courtesy of a blistering $80 billion cash burn in the first half of July, Tim Geithner managed to reduce Treasury cash balances from $130 billion to $39 billion. Granted this number will increase next week after this week's $66 billion in Treasury auctions settle, only to drop once again when another batch of Bills mature and are not rolled. So in response to various inquiries we present the 29 public companies that hold more cash than the US Treasury does as of July 13 (Geithner is tied with Google at $39 billion). Not very surprising, two of the top 3 are Chinese companies. The third? Bank of America... Surely there is a good reason why BAC is preparing for rainy days.