Howard S. Katz

4-19-10

Alas, poor gold bug; I knew him Horatio.  He had the brains to be perfectly positioned in the great gold bull market of 1999-2020.  Yet he did not make any money from his wisdom.  Take, for example, the sell-off of April 16, 2010.  Gold was just about to make another powerful move to the upside.  But the sell-off scared him away, and he missed the move.  What was it that he did wrong?

Those who read these articles know that I am a big chart man, and last week’s action in the markets is a good example of why this is so important.  There is much to be learned from the charts, but the most important is perspective.  When one looks at any object, perspective is very important.  Take, for example, a mountain range.  One can see it from a satellite picture taken from earth orbit.  One can see its majestic beauty from a few miles away (where it dominates the horizon).  Or one can focus on a single daisy on the mountainside on a summer day.  These are three different pictures, and they carry three different emotions.

The vast majority of your fellow traders (against whom you are competing) are not chartists. The emotion with which they see the market roughly corresponds to the emotion of the average trader.  He remembers the market action for the past few months, and what has happened further back sort of fades into the distance.

First, as soon as you start to trade the market and have your own money at stake, your perspective changes radically.  You see everything through a microscope, as it were.  Time slows down, and everything becomes much more vivid.  Now, what is the message of the above chart?

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 Initial Comment

The other side of the (Gold) Coin—but of course. As much as Mr. Farrell offends my sensibilities with this article, I can’t help but agree with him from a pragmatic framework. Nevertheless, I think one should make a ton of money and then find a way to put it to good use. But why does that not happen? Why does it end up that those Goldman Sachs people can never get enough. You see, money becomes an end in and of itself.

Money doesn’t buy happiness—it buys time. But be careful because if you have time on your hands and you waste it, you’re wasting a valuable resource—your life. If you have time and nothing to do, no projects, it breeds boredom.

Currently, there is a tremendous struggle occurring between the haves and the have nots; between wall street and main street. The polies (politicians) just soak up being the center of attention while they absorb all of the dollars coming their way like a sponge soaks up water.
It won’t end well. I’m for population control; nothing drastic—just the idea that people should be responsible and not have more kids than they can afford. But now we have cultural elements from other countries that believe it’s acceptable to have 13 year old children running across the border to deliver babies in US hospitals. Why? Because those 13 year olds will be voting in US Elections a few years from now if the polies have their way.

By the way, call me crazy but the policy that anyone born in the US is automatically a US citizen needs to be reviewed.But I could list 500 of them–antiquated policies and polies, that need to be reviewed!  DSA

Six investing rules for a worst-case scenario

By Paul B. Farrell, MarketWatch

April 28, 2009

ARROYO GRANDE, Calif. (MarketWatch) — So Congress enacts financial reforms. Big deal. Wall Street must be drunk on Dom Perignon, celebrating the huge paid-offs from their successful $400 million investment in “kill reform” lobbyists. And that GOP concession? Phony. Wall Street will reward them for the loopholes denuding Dodd’s financial reforms.

And even with all his rants about fat-cats, Obama wins. Expect Wall Street to spend another $400 million to keep Obama in office for a second term. read more

Matt is gaining a reputation as someone who gets to the bottom of things–unfortunately for America he is having to scrape the bottom of the barrel with all the filth therein.

DSA

By Matt Taibbi, The Guardian
Posted on April 26, 2010, Printed on April 27, 2010
http://www.alternet.org/story/146611/

So Goldman Sachs, the world’s greatest and smuggest investment bank, has been sued for fraud by the American Securities and Exchange Commission. Legally, the case hangs on a technicality.

Morally, however, the Goldman Sachs case may turn into a final referendum on the greed-is-good ethos that conquered America sometime in the 80s – and in the years since has aped other horrifying American trends such as boybands and reality shows in spreading across the western world like a venereal disease.

When Britain and other countries were engulfed in the flood of defaults and derivative losses that emerged from the collapse of the American housing bubble two years ago, few people understood that the crash had its roots in the lunatic greed-centered objectivist religion, fostered back in the 50s and 60s by ponderous emigre novelist Ayn Rand.

While, outside of America, Russian-born Rand is probably best known for being the unfunniest person western civilization has seen since maybe Goebbels or Jack the Ripper (63 out of 100 colobus monkeys recently forced to read Atlas Shrugged in a laboratory setting died of boredom-induced aneurysms), in America Rand is upheld as an intellectual giant of limitless wisdom. Here in the States, her ideas are roundly worshiped even by people who’ve never read her books or even heard of her. The right wing “Tea Party” movement is just one example of an entire demographic that has been inspired to mass protest by Rand without even knowing it.

Last summer I wrote a brutally negative article about Goldman Sachs for Rolling Stone magazine (I called the bank a “great vampire squid wrapped around the face of humanity”) that unexpectedly sparked a heated national debate. On one side of the debate were people like me, who believed that Goldman is little better than a criminal enterprise that earns its billions by bilking the market, the government, and even its own clients in a bewildering variety of complex financial scams.

On the other side of the debate were the people who argued Goldman wasn’t guilty of anything except being “too smart” and really, really good at making money. This side of the argument was based almost entirely on the Randian belief system, under which the leaders of Goldman Sachs appear not as the cheap swindlers they look like to me, but idealized heroes, the saviors of society.

In the Randian ethos, called objectivism, the only real morality is self-interest, and society is divided into groups who are efficiently self-interested (ie, the rich) and the “parasites” and “moochers” who wish to take their earnings through taxes, which are an unjust use of force in Randian politics. Rand believed government had virtually no natural role in society. She conceded that police were necessary, but was such a fervent believer in laissez-faire capitalism she refused to accept any need for economic regulation – which is a fancy way of saying we only need law enforcement for unsophisticated criminals.

Rand’s fingerprints are all over the recent Goldman story. The case in question involves a hedge fund financier, John Paulson, who went to Goldman with the idea of a synthetic derivative package pegged to risky American mortgages, for use in betting against the mortgage market. Paulson would short the package, called Abacus, and Goldman would then sell the deal to suckers who would be told it was a good bet for a long investment. The SEC’s contention is that Goldman committed a crime – a “failure to disclose” – when they failed to tell the suckers about the role played by the vulture betting against them on the other side of the deal. read more

In my opinion: Nelson Hultberg is a true American Patriot. If you love your country, and what the Constitution and the Bill of Rights represents, you’ll want to study this article. Nelson has been writing for years and I’ve never seen an article that is not articulate and well formulated. Please consider being on his mailing list. I’m not a political person but I don’t believe that the Federal Government is representing the will of the people and that is the very reason this country was founded.

A responsible third political party is a concept whose time has come. and remember, we now have a one party system since the lobbyists and the big money fund both Democrats and Republicans. Who can be happy with”The Patriot Act”, Illegal Immigration, The Banking Interests, and a Health Care Bill which is about control and power instead of a healthy nation. The time has come for change “outside the box”.

I encourage all to become part of the solution.

DSA

Saving America from Corporate-Statism
Nelson Hultberg
April 28, 2010

As America sinks deeper into the tyranny of bureaucratic corporatism via today’s incestuous relationship between Washington and Wall Street, it is inspiring to see thousands of Tea Parties spring up to express outrage. Unfortunately the “new deal” campaign approach still works as it has been malefically doing for over 70 years since FDR came to visit us. Every election season artful political pitchmen hit the hustings to call for “change” and “more prosperity for the people,” in which millions get swept up.

The promise of change is, of course, a con. Legitimate change from the burden of big government would necessitate a move toward smaller government. But this is not what the statist mentalities have in mind when they preach change. They wield the word “change” as a shrewd angler wields an alluring fly. It’s a deceptive hook that works because much of humanity is always looking to get more out of life than it is willing to put in. Both Democratic and Republican regimes realize this. Consequently both promise the voters more entitlements, more pork, more privileges.

Slouching Toward Gomorrah

Thus the politics of usurpation proceeds as usual. Mendacity and decadence win out. The abomination of government health care is forced upon us. Our borders become more porous with each passing month. Amnesty for 20 million aliens looms over the horizon. Washington’s imperial overreach stretches to 140 countries throughout the world. Our society slouches toward Gomorrah and the death spiral of ancient Rome. Yet incredibly neoconservatives congratulate themselves with annual celebratory dinners paying tribute to their “successful stand against the enemies of freedom and high-minded culture.”

Our schools, our churches, our publishers, and our entertainment industries are being infested with the serpents of Cultural Marxism. Political correctness dominates the herd mentalities and philistines who overwhelm the perceptive and productive at the polls every other November. The ignominious despotism that Tocqueville warned would come from “unbridled democracy” is stealing over our lives like the debilitating paralysis that invades the bodies of the arthritic. Yet our pundits revel in hosannas to their phony “engineered economic recovery” and how the upcoming century will finally bring us that “heaven on earth” that Rousseau, Marx and Keynes so naively promised, and that the huckster economists and social engineers of the West have been trying to stuff down our throats for 100 years now.

This is certainly not the governing philosophy in which Jefferson and the Founders meant for us to engage. Gushing hundreds of billions of tax dollars to slimy Wall Street bankers so they can puff up their bottom lines and appear to be rightful entrepreneurs is an unspeakable outrage; and it is not the way to bring about legitimate economic recovery. If we want a legitimate recovery, we need to let these dinosaurs go the way of Joseph Schumpeter’s “creative destruction” so that real productivity (rather than debt induced stimulation) can come about.

In the cultural arena, giving amnesty to 20 million Central Americans, who have been indoctrinated under socialist / fascist regimes into believing they have a right to cradle to grave security, is hardly the way to restore the American Republic of self-reliance and free enterprise. It is, however, the way to pound the final nails into freedom’s coffin, which is what Obama, Reid and Pelosi understand very clearly. read more