Thursday, November 1, 2012

Is This The Black Swan That Will Make Gold Skyrocket

from KingWorldNews:
King World News has put out a series of interviews demonstrating that large chunks central bank gold are missing from central bank vaults. Today KWN is releasing statements from two 40-year veterans, Bill Haynes, President of CMI Gold & Silver, and John Hathaway, the prolific manager of the Tocqueville Gold Fund.

Remarkably, in 2001 Hathaway stated, “What is going on here? A decline equating to 227.7 million ounces, or 87% of the US gold reserve demands a more than perfunctory explanation … The US government may have already expended considerable resources to hold the gold price in check.”
There is more from Hathaway below, but first, here is what Haynes had to say: “Eric, that is a black swan type of thing (if the entire German gold hoard is gone). The plan right now is for future currency debasement. But if it turns out that some official, some whistleblower comes forth from the Bundesbank and says the gold is gone. The bullion banks used it, they sold it into the market.”

Bill Haynes continues @

20 High Performance, High P/E Stocks to Sell Now

Over the past couple of weeks, the equity markets have seen a lot of weakness. The selling last week was prompted by a host of companies reporting earnings misses, either on the top line or the bottom line, or both. A rare earnings miss by Google (NASDAQ: GOOG) caused a decided pullback in the tech space, and even stalwart Apple (NASDAQ: AAPL) was a disappointment both on the earnings front and in terms of share price performance.

So far this earnings season, we've seen a slew of other bellwethers such as 3M (NYSE: MMM), Caterpillar (NYSE: CAT), DuPont (NYSE: DD), Intel (NASDAQ: INTC), McDonald's (NYSE: MCD) and United Parcel Service (NYSE: UPS) offer up shaky Q3 results, and many also warned of a struggle in the coming quarter.

Given that so many companies have disappointed Wall Street so far, I expect there to be more disappointments, and possibly a lot more selling as we move into the height of the third-quarter earnings season. That means stocks of all stripes could be vulnerable to a wave of earnings-related selling.

Technically speaking, all three major averages, the Dow, S&P 500 and Nasdaq Composite, have fallen below their respective 50-day moving averages, a clear sign that all is not well in stock land.
SPX Chart

For shareholders of some of the best-performing stocks in 2012, that means much of the hard-fought gains could be in jeopardy. Moreover, stocks with relatively high price-to-earnings (P/E) ratios also could be even more susceptible, as "expensive" stocks tend to be a bit more risky than stocks with relatively lower P/Es.

To find out which companies in the S&P 500 have seen the best share price performance this year, and that also have what can be considered a relatively high P/E, I ran a Bloomberg data screen. Sifting through the data, I've come up with 20 stocks with big gains this year that also can be considered expensive by the current P/E metric.

The table below contains 20 high performance, high P/E stocks traders should consider selling, especially if they have big gains in their positions.
As you can see, all of these stocks have seen some sizeable gains so far in 2012. These stocks also can be considered expensive in terms of P/E ratio. And while big gains and high P/Es aren't necessarily reasons to sell a stock, when viewed in the context of a wider retreat in the market prompted by fears of slowing fundamentals and a lack of revenue and earnings growth going forward, these stock could become selling candidates for money managers looking to lock in gains.
If you are long any of these stocks, and especially if you have sizeable profits in any of them, then you definitely should consider taking some profits off the table. As traders, there is nothing more frustrating than seeing a big winner transform into a modest winner. Even worse, many traders let their big winners become barely winners -- or even losers, due to a decline in the broad market.
If you want to protect your profits from the next downdraft, consider selling these 20 stocks today.

The 3 (or 4) Ways the Dollar Could Die: Financial Crimes to Trigger a Collapse – Ron Hera

Ron Hera from Hera Research joins me to discuss the FOUR ways the Dollar could die. Ron believes the most frightening and imminent possibility leading to the death of the Dollar is not lost confidence in the Dollar or in the Treasury market, but rather in the financial markets as a whole — as Ron puts it, it is the unpunished and rampant financial crimes that will likely lead directly to a Black Swan event which in turn will lead to a total collapse.

Beware of China's 'epic' property bubble

Bearish investor Jim Chanos says China is in the midst of an epic property bubble that could face an ugly end.

LOS ANGELES (CNNMoney) -- Notoriously bearish on China, Kynikos Associates president Jim Chanos is continuing to caution investors to brace for China's real estate bubble to burst.

The hedge fund manager also sounded the warning bell about the outlook for Chinese inflation.

"We're bearish on China's property sector and the credit sector," Chanos told CNNMoney at the Milken Institute Global Conference in Los Angeles. "This is a country that's in the middle of an epic property bubble and construction bubble that will end at some point and it won't be pleasant when it ends."

Home sales began slowing last year, he said. But the problem is construction continues to outpace demand, and that can skew China's gross domestic product figures.

"In China's GDP calculations, they don't look at final sales, they look at production," said Chanos. "So a condo being built but not sold contributes to GDP."

China has been the fastest growing emerging market, in terms of GDP. But Chanos said investors haven't been able to cash in.  (more)

Canada GDP “Unexpectedly” Shrinks; Pollyannas Come Out Of Woodwork

by Mike Shedlock
MISH’S Global Economic Trend Analysis

Economists who cannot see anything but the rear view mirror were surprised to learn Canadian Economy Shrinks as Oil, Mining Slump.
The Canadian economy shrank unexpectedly in August, pointing to a sharp third-quarter slowdown in growth from the first half and reinforcing the Bank of Canada’s message that interest rate hikes are less imminent.
The surprising 0.1 percent contraction in August from July reflected broad weakness across most industries, prompting economists to revise forecasts down. The Canadian dollar weakened to below parity with its U.S. counterpart.
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McAlvany Weekly Commentary

John Embry – Gold Bull

About this week’s show:
-Gold supply WILL NOT keep up with demand
-The public entry into gold has not even started yet
-Huge “paper gold” holdings are only about 1% real gold deliverable
About the guest: John Embry joined Sprott Asset Management LP as Chief Investment Strategist in March 2003. He plays an instrumental role in developing the corporate and investment policy of the firm. John, an industry expert in precious metals, has studied the gold sector for over thirty years and has accumulated industry experience as a portfolio management specialist since 1963.

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Peter Schiff interviews Marc Faber on Schiffradio

Mercadolibre Inc. (NASDAQ: MELI)

Mercadolibre, Inc., together with its subsidiaries, hosts online commerce and payments platforms in Latin America. Its services are designed to provide its users with mechanisms to buy, sell, pay for, and collect on e-commerce transactions. The company principally offers MercadoLibre marketplace, an automated online commerce service. Its MercadoLibre marketplace enables registered users to list and purchase motor vehicles, vessels, aircraft, real estate, and other services through online classified listings. The company also provides MercadoPago, an integrated online payments solution to facilitate transactions on and off the MercadoLibre marketplace by providing a mechanism that allows its users to send and receive payments online. In addition, it offers MercadoClics advertising program that allows businesses to promote their products and services on the Internet. This program enables users and advertisers to place, display, and/or text advertisements on its Web pages to promote their brands and offerings. Further, the company provides MercadoShops on-line stores solution, a software-as-a-service, which allows users to set-up, manage, and promote their own on-line Webstores.

To review Mercadolibre’s stock for potential trading opportunities, please take a look at the 1-year chart of MELI (Mercadolibre, Inc.) below with my added notations:

1-year chart of MELI (Mercadolibre, Inc.)

Over the last (3) months, MELI has been consolidating within a common chart pattern known as a rectangle. A rectangle pattern forms when a stock gets stuck bouncing between a horizontal support and resistance. For MELI, the rectangle pattern has formed a clear $90 resistance (red) and an $80 support (teal). You will also notice that MELI’s $80 support has been a previous resistance and support.