Posts Tagged ‘Rick Bookstaber’

Hedge Fund Slams Rick Bookstaber For Comments On The Gold Bubble

Hedge Fund Slams Rick Bookstaber For Comments On The Gold Bubble

Rick Bookstaber

Courtesy of Gus Lubin at Clusterstock/Business Insider 

QB Partners fits the description of hedge funds that Rick Bookstaber accused of pumping the gold bubble and — even worse — of fueling the bubble with publicity.

The New York fund leapt to the defense of gold by sending an email to Business Insider with a message for Bookstaber.

Attached was the point-by-point rebuttal they gave to Nouriel Roubini in December when he had the nerve to diss gold.

Here are the highlights of QBAMCO’s Message To The Gold Haters >

See Also: 

Rick Bookstaber: Hedge Funds Are Pumping The Gold Bubble And Luring Investors Off A Cliff 

See also this chart (below) via Jesse’s Americain Cafe, and the comment by bidwhacker at Clusterstock

The economic cycle is definitely not the right framework for determining when to be in gold. Gold bull and bear markets can extend across economic upturns and downturns. 

Absent an "economic meltdown" as you call it, the best tool for determining when the gold price will advance (at least since Nixon broke the last vestiges of the gold standard) is real interest rates: 

Gold bull markets happen in an environment of negative real interest rates…This is the closest thing to an one-variable indicator for the gold market. But as you point out, it only good over longer periods of time and not a perfect correlation. The way I like to look at it is, when you have negative real interest rates, the odds are strongly with you that gold prices will go up. 


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Is Gold Getting Bubbly?

Yesterday I posted an article by RICK BOOKSTABERThe Gold Bubble, in the Favorites. Having no opinion on the short or long term movement in the price of gold, I thought Rick’s article was thought-provoking, as he reasonably questioned the mass and loudish flow of money into gold investments.

Man holding glowing gold orbs

Zero Hedge also posted the article, with a more critical introduction. I then perused ZH’s comment section to find a lot of animosity towards Rick’s opinion, even directed at his character (he works for the SEC!). The highly emotional tone surprised me, indicating a core belief was being challenged, as opposed to the fun and discovery of an intellectual debate.  (Maybe this is typical in comment sections.)

Anyway, in this article, Nico Isaac also questions the faith many people have placed in GOLD as the next safety net against the ruin of our financial system.  

For more on gold from EWI, download Robert Prechter’s FREE 40-Page Gold and Silver eBook.  Ilene 

 

Gold: Best Supporting Role In Economic Downturns? Think Again

Gold’s safe-haven status is based on hype, not history 

Courtesy of EWI, by Nico Isaac

As I sat down to watch the Oscar pre-show on Sunday night, March 7, one word was repeatedly used to describe the celebrity starlets and their designer duds: GOLD. Gold bustiers and gold lame skirts, shiny gun-metal dresses and glittery sequined gowns all basking in the golden shadow of the final golden statue.

Everywhere you look, from the Red Carpet to Wall Street, gold is definitely in "fashion." As for why, one word comes to mind: safe-haven. See, according to the mainstream financial experts, the more unstable the global economy, the greater the appeal for the precious metal.

And, with a staggering 17% unemployment rate in the United States, alongside slumping real estate sales, Eurozone weakness, the Greece debt debacle, and so on — the only thing going up is gold’s supposed disaster premium. Here, take these recent news items for example:

  • "Bullion Sales Hit Record In Stampede To Safety." (Financial Times)
  • "Gold Ticks Higher On Safe Haven Buying. The risk trade is resuming." (AP)
  • "Gold Rose to 6 ½ Week Highs as the metal benefits from fears over financial instability in general. The market is looking for some security with gold." (Reuters)
  • "Gold Rush: This is a new round of safe haven buying." (Bloomberg)

There’s just one problem: The correlation between a falling…
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Rick Bookstaber: Hedge Funds Are Pumping The Gold Bubble And Luring Investors Off A Cliff

Rick Bookstaber: Hedge Funds Are Pumping The Gold Bubble And Luring Investors Off A Cliff

Courtesy of Gus Lubin at Clusterstock/Business Insider  

Flock Of Sheep

The SEC’s Rick Bookstaber can hardly watch as sheep-like investors chase the gold bubble straight off a cliff.

Although his employer doesn’t give market advice, the SEC’s senior policy adviser shows his personal frustration in a post on Roubini Global Economics. First, he drops this great line about how people don’t even pretend that gold isn’t a bubble:

Even if a guy is just after sex, he at least has the decency to act like there is some substance behind his interest.

Second, Bookstaber thinks hedge funds managers like John Paulson have a pump and dump scheme on gold.

RGE:

Given that “hedge fund” and “highly secretive” are usually said in the same breath, don’t you get suspicious when so many of the top managers are so vocally out there about their gold investments? And when their positions are structured in a way that make them open to view? Paulson and Soros have huge positions in gold ETFs. We know that, because if you buy ETFs, they show up in your 13-F filing. Granted, with an equity investment you can’t help putting that information out into the market, but with an asset there are plenty of ways to take the position without signaling it.

That they are taking a highly visible route to their positions suggests the game that is being played is one of leading the herd. The 13-F reports positions with a big lag, so no one will notice if they quietly slip out the side door while the party is still hopping. And how about when the view is backed up by none other than Goldman Sachs? Will they let everyone know when they think it has gone too far before they get out. Or before they go short? Maybe they already have. 


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Asset Allocation

Asset Allocation

asset allocationCourtesy of Rick Bookstaber

I appeared last Friday on a the PBS program WealthTrack, where the topic was asset allocation, in particular, as host Consuelo Mack put it, how to build an all weather portfolio. I was the skeptic of the group. I don’t think there is some magic asset allocation that protects you from the buffetings of financial storms without it also trimming your sails during fair weather. Here is an encapsulation of my views from the program.

Asset allocation and risk appetite
One of the participants, asset allocation guru David Darst of Morgan Stanley, proposed various portfolios to protect against a 100-year flood, 30 to 70-year flood, a 25-year flood, etc. Those portfolios boiled down to putting less in risky assets and more in bonds; the more severe the flood you anticipate, the less risk you take. Of course, that will do the trick. If by asset allocation you mean determining where to set your risk tolerance dial, we’re all on board.

Asset allocation is like clapping with one hand
But the discussion of risk tolerance highlights that we can only go so far with asset allocation if we only look at assets. What matters is assets versus liabilities, because the liabilities determine our risk tolerance and, related to that, our demand for liquidity. It is impossible to formulate an ideal asset allocation strategy without knowing the liability stream those assets are intended to meet. There is no one-size-fits-all for asset allocation. This reminds me of an FAJ article I did back in the 1980s with pension actuary Jeremy Gold entitled “In Search of the Liability Asset”.

Diversification works well, except when it really matters
We all know the argument from Finance 101: If you hold 16 uncorrelated assets, your risk will drop by a factor of four. Well good luck with that.

During a crisis, when diversification really matters, correlations aren’t near zero (as if they ever are). All that people care about is risk and liquidity. All assets that are highly risky drop, all assets that are less liquid drop. No one cares about the subtlety of earnings streams. It is like high energy physics. When the heat gets turned up high enough, matter is just matter, the distinctions between the elements is blurred away.

This is not to say


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Phil's Favorites

Kurds targeted in Turkish attack include thousands of female fighters who battled Islamic State

 

Kurds targeted in Turkish attack include thousands of female fighters who battled Islamic State

Courtesy of Haidar Khezri, University of Central Florida

Kurdish fighters under attack by Turkey have described President Donald Trump’s decision to withdraw U.S. troops from northern Syria as a “stab in the back.”

Since bombing began on Oct. 9, Turkish military operations against the Syrian Democratic Forces in northern Syria, Washington’s staunchest and most effective allies in the war against the Islamic State, has killed at least 11 civilians...



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Zero Hedge

Uber & Out: Ride-Hailing Firms Lays Off Another 350 Staff

Courtesy of ZeroHedge

In the third round of layoffs since its IPO (and post-IPO share price plunge), Uber CEO Dara Khosrowshahi announced the job cuts in a company-wide email this morning.

Khosrowshahi told staff that around 350 employees across several teams within the organization, including Uber Eats, will be laid off.

All of this comes about one month after Uber laid off 435 employees across its product and engineering teams and less than three months after Uber laid off about 400 people from its marketing team. At this point, most departments at Uber have been affected by layoffs.

One wonders if, like the...



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Insider Scoop

'Wait For A Better Entry Point': Datadog Analysts Initiate Coverage Following IPO

Courtesy of Benzinga

Datadog Inc (NASDAQ: DDOG) shares got off to a hot start on the public market following the company’s IPO in September. After pricing its IPO at $27 per share, Datadog jumped nearly 50% on its first day of trading and has held onto most of those gains in the stock’s first month of trading.

This week, investors get their first taste of what Datadog underwriter...



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Kimble Charting Solutions

New Gold Bull Market? Not Until This Happens!

Courtesy of Chris Kimble

After a big summer rally, Gold peaked out at $1566/oz in September.

Since then, Gold prices have been consolidating between $1475 and $1550.

So what’s happening here? Enter the Swiss Franc currency…

In today’s chart, we look at a key indicator (and correlation) for Gold. As you can see, the Swiss Franc has an uncanny resemblance to Gold.

Both Gold and the Franc are testing heavy resistance at the same time.

Until both breakout at (2), odds are low that a new Gold bull market emerges with another big rally leg higher....



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The Technical Traders

Lots of Upside Ahead for the Metals and Miners

Courtesy of Technical Traders

Palisade Radio talks with Chris as he discusses his approach to trading and why technical analysis works for him. He focuses on the chart and price action and explains why investors need to follow a trading strategy that suits their personality.

He cautions that a broad sell-off is likely when stocks move into the next bear market. This liquidation will pull everything down, including gold, for a time. Afterward, he anticipates a massive rally in the juniors.

Time Stamp References:

...



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Chart School

US Economic Review 2019Q4

Courtesy of Read the Ticker

An investor must form an opinion of the wider economic risk, here is a small sample of readtheticker.com US economy review.


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Example of the first chart in the video.


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Fundamentals are important, and so is market timing, here at readtheticker.com we believe a combination of ...

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Digital Currencies

Zuck Delays Libra Launch Date Due To Issues "Sensitive To Society"

Courtesy of ZeroHedge View original post here.

Authored by William Suberg via CoinTelegraph.com,

Facebook is taking a much more careful approach to Libra than its previous projects, CEO Mark Zuckerberg has confirmed. 

“Obviously we want to move forward at some point soon [and] not have this take many years to roll out,” he said. “But ...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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Biotech

The Big Pharma Takeover of Medical Cannabis

Reminder: We are available to chat with Members, comments are found below each post.

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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