Lotta Ins Lotta Outs: Mad Money and Charts, Charts, Charts

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Wednesday, July 27, 2011

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."

"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.
chart

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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.