Saturday, May 12, 2012

Gold ‘Will Go To $3,000/oz’ – David Rosenberg

Gold ‘Will Go To $3,000/oz’ – David Rosenberg
Highly respected econ­o­mist and strate­gist David Rosen­berg has told that Finan­cial Times in a video inter­view (see below) that gold “will go to $3,000 per ounce before this cycle is over.”
Mar­kets are repeat­ing the down­turns of 2010 and 2011 and it is time to search for safety, David Rosen­berg of Gluskin Sheff tells James Mack­in­tosh, the FT Invest­ment Editor.
Rosen­berg sees a “very good oppor­tu­nity in gold” as it has cor­rected and seems to be “off the radar screen right now”.
He sees gold as a cur­rency and says the best way to value gold is in terms of money sup­ply and “cur­rency in circulation.”
As the “vol­ume of dol­lars is going up as we get more quan­ti­ta­tive eas­ing” he sees gold at $3,000 per ounce.
Mack­in­tosh says that Rosenberg’s view is a “pretty bear­ish view”.
To which Rosen­berg responds that it is “bull­ish view on gold and gold min­ing stocks.” Mack­in­tosh says that it is “bear­ish on every­thing else”.
Rosen­berg  says that it is not about being “bull­ish or bear­ish,” it is about “stat­ing how you view the world” and he warns that the major cen­tral banks are all going to print more money and keep real inter­est rates neg­a­tive “as far as the eye can see.”

This is “crit­i­cal” as one of the key deter­mi­nants of the gold price are real short term inter­est rates.
The longer they stay neg­a­tive “the longer the bull mar­ket in gold is going to be.”
Rosen­berg sums up that “this is not about being bull­ish or bear­ish, it is about how do we make money for our clients.”
The inter­est­ing inter­view can be watched here.

NYSE Short Interest Rises To 2012 Highs



On the surface, the fact that NYSE short interest was just reported today to have risen to 13.1 billion shares as of April 30 could be troubling for the bears, as this just happens to be the highest short interest number of 2012. Indeed, an increase in short interest into a centrally-planned market is always disturbing, as it opens up stocks to the kinds of baseless short covering melt ups that simply have some HFT algo going on a stop hunt as their source, that we have seen in the past several weeks. Naturally, it would be far easier to be short a market in which Ben Bernanke managed to eradicate all other bears, especially when considering that a year ago the Short Interest as of April 30 was virtually identical.  (more)

Gold Will Drop to $1,450 This Month Before a Parabolic Move to $3,950!

Based on my technical analysis gold will drop to $1,450/oz. before the end of May and then go parabolic in the next C-wave to $3,950/oz. Below is a chart of how I see the price of gold unfolding over the next while – and why.
So says Juan Eduardo Morales Veas* (www.MoneyGreedAndFear.com) in an exclusive posting here at www.munKNEE (Your Key to Making Money!).


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Thursday, May 10th, 2012 | Posted by Editor
Gold Will Drop to $1,450 This Month Before a Parabolic Move to $3,950!
Based on my technical analysis gold will drop to $1,450/oz. before the end of May and then go parabolic in the next C-wave to $3,950/oz. Below is a chart of how I see the price of gold unfolding over the next while – and why.

To be a Star/Master Trader/Investor, never forget and always remember these seven principles:
The trend is your friend.
Let the winners run.
Cut your losses quickly.
Never average down.
Never underestimate the strength of a trend.
The big money is in the big trend.
The main financial markets´s task is to deceive you.
READ MORE

Citi's Fitzpatrick: STOCKS COULD TUMBLE 27% FROM HERE

King World News spoke with Citi technical analyst Tom Fitzpatrick who is predicting that global stock markets are set to plummet 27%.
And he thinks it could happen in a little as four or five months.  
Here's what he told King World News he thinks could happen: 
“So our bias is to think that (we will head down to the 200 day moving average), in a similar fashion to what we saw last year.  That is down quite a bit below present levels, at around 1277 (on the S&P).  This would translate into 700+ points (lost) on the Dow, to the region of around 12,000."
And here's the very scary he presented to King.
So this most closely fits the markets and the underlying backdrop of what we see today.  If we look at that overlay, we sense that we may have already put in the peak here, the suggestion is that the next down-move would be in the region of 27%.  This could be a very quick move, in as little as four or five months.”

chart
Fitzpatrick reiterated his bullish position on gold, which calls for the yellow metal spiking to $2,400 in 12 months.

Read more from King World News >

Why the Job Market Will Continue Shrinking


by Charles Hugh Smith, Wealth Wire:
The fundamental dynamic of America’s job market is simple: we need relatively few workers to provide the absolute essentials of life even as the cost-basis of the economy inexorably rises. In other words, there are fewer jobs even as the costs of maintaining a “middle class” life rise.
Let’s start by observing how all the financial data in the world does not necessarily describe the primary dynamics of an economy. There are a number of factors that cause this disconnect between the primary forces at work beneath the surface and the data.
One is that economists tend to focus on situations with abundant, easy-to-interpret data. If you’re only looking for roses, then you ignore everything that isn’t a rose. So economists seek dynamics that can be easily explained by available data, and financial factors that they are paid to examine. Everything else is ignored, especially if the act of examining it casts a skeptical light on a self-serving Status Quo.
One key reality that is rarely if ever discussed is that the number of workers needed to provide the bare essentials of life to the 313 million residents of America is modest.
Read More @ WealthWire.com

Nouriel Roubini CNBC Interview - 09 May 2012













Nouriel Roubini : " CERTAINLY THERE IS A RISK OF CONTAGION. THE TRADE LINK BETWEEN EUROPE AND U.S. ARE MODEST BUT THE FINANCIAL LINKS ARE IMPORTANT. IN THE SPRING OF 2010 WHEN THERE WAS THE FIRST GREEK CRISIS, YOU HAD THE CORRECTION OF 20% NOT ONLY OF EUROPEAN EQUITY BUT THE U.S. EQUITY. LAST SUMMER WHEN WE HAD THEWORRIES ABOUT THE EUROZONE PROBLEM SPREADING TO SPAIN AND ITALY, IT WAS A 20% CORE ACTION IN EUROPE. ALMOST AS MUCH AS CORE ACTION IN EMERGING MARKET IN THE UNITED STATES. WHEN TROUBLE OCCURS IN THE EUROZONE THE RISK OF SOMETHING DISORDERLY IMPLIES THE RISK IS OFF, RISK AVERSION IS HIGH AND THAT AFFECTS GLOBAL EQUITY MARKETS NOT JUST THOSE IN THE EUROZONE."

How To Invest In Movies

Investing directly in a movie could be a perilous endeavor. Scouting the right talent, managing production costs and finding the right distributor are but a few of the hurdles that investors share as the production moves forward to fruition or perdition. The hardest to gauge is the personal whim of the moviegoer. Taste is fickle. A story with a broad appeal in one decade could fall flat in the next. If a movie does well, it may open the possibilities of a franchise; if it flops, it could claim numerous casualties, from studios to the careers of actors.
SEE: The Economics Of Summer Blockbuster Movies

Considerations Before InvestingGood investors use due diligence. So it is with investing in movies. The private equity/hedge fund vehicle appears to be the most common means for direct investment. Unsophisticated investors need not apply. The risks of such an enterprise can be substantial and are better suited for the family office or pension client.
Due diligence throughout is critical. Offering documents must accord with applicable securities law. What is the producer's reputation? Experience? Backing one with nary a track record is akin to investing in a mutual fund with rookie portfolio managers. What is the film's potential market? Blockbusters tend to have a broad appeal; foreign films and documentaries, black and white and silent films have less appeal. Notable exceptions would be Spike Lee's "She's Gotta Have It" and the recently feted best picture, "The Artist."

Films with a religious message or ones with a more intellectual humor could be a hard sell to the distributor, as well, since their audience is typically quite narrow. What if the film has no A-list talent? That could be a problem, though sometimes the film itself is the talent. Think of "Slum Dog Millionaire." Name recognition could vary, too, depending on where the film is targeting its release. Learn about the director's vision. An outsized ego can prove fatal, as was the case with Michael Cimino's "Heaven's Gate." Are the interests of the filmmaker properly aligned with the distributor and investors, or does much of the revenue inure to the benefit of the filmmaker? Is the investment a fair arrangement?

Where the Money GoesTypically, revenues are first used to repay investors all of their investment and debts incurred. The process is akin to a return of basis or of the investment. Next would be profit sharing, or the return on the investment. Often, the split is even between the producer and investors. The film's stars, writers and director are paid from the producer's profits. Any investment proposals should be in writing and contain an arbitration clause for a more cost effective dispute resolution. Filmmakers would do well to have such a clause when dealing with financially stronger distributors in order to protect the former's interests.

The producer should have secured a completion bond which is a surety bond that kicks in to pay for cost overruns rather than having the investors shoulder the burden. Different fundraising options should be considered, depending upon the script and budget. Tax incentives properly pursued are another revenue generator, so long as the incentive tail does not wag the movie dog. The filmmaker should escrow funds during the fundraising stage of the film. This helps to ensure transparency and accountability. If insufficient funds are raised, then they should be returned to investors. All of these considerations point to the need for any investor to work with a professional with experience in the film industry.

The Way Forward
As an asset class, film would appear to be uncorrelated to the other types of investments and somewhat recession resistant as people still go to the movies or rent them. Slate financing is the hedge funds' approach to risk management and return generation. This approach simply entails investment in a portfolio of films, rather than a single production. Through diversification comes a more proper balance of risk and return. What films are included in the portfolio may be a function of how the fund's co-financing efforts with the production and distribution company work through the film studios. Part of the challenge is untangling opaque financial accounts through due diligence in the quest for greater transparency.

The movie industry plays in the form of common shares, and is available to individual investors, who need to understand where in the chain of production the companies lie and to what risks those companies are subjected to. For example, is the investment in a studio like Lionsgate (which nearly doubled its share price since the beginning of 2012) or distribution like Netflix or Coinstar?

The Bottom LineHave movies been commoditized? Consider how easy it is to access a favorite movie. The theater is but the first of several distribution channels which include cable television, Internet and rental outlets. Ready availability of content has stolen a march on the movie theater experience and created more revenue streams and greater profitability. Perhaps it is for this reason that the Academy Awards this year focused on the lost grandeur of the Golden Age of film.

Long Term US Dollar Chart

321gold.com / Morris Hubbartt / May 11, 2012
How does one interpret the action of the dollar? It’s clear that the economy hasn’t created enough jobs to sustain growth or stop the mounting deficits. If the economy is now weakening, the mounting US debt problem will continue to plague a dollar that is already mired in a long term bear market.
The situation in Europe brings an expectation of help for the dollar. Even with socialists taking power in France and further destabilizing the future of the euro, the dollar shows low trading volume. If the dollar can only rally slightly on news that the euro could be finished, serious questions arise for the dollar. All roads in this crisis lead to gold. Gold is my most preferred asset, now more than ever.
Note the black box on the chart. The dollar fell to 71.33 in early 2008. The lows in that box have not been bought that heavily by commercial traders, but the highs have been very heavily sold and shorted.
It will be extremely important to see how the commercial group reacted to the latest tumble in the euro. I suspect the next COT report will indicate that they have bought the euro and shorted the dollar fairly heavily.
The dollar has yet to trade above the right shoulder high at 92.33. I believe the current low-volume rally could end by May 16, which is next Wednesday. It’s an important date, because the latest FOMC meeting minutes will be released then.
Look at the enormous size of the head & shoulders pattern on this chart. It’s important to understand how big these timeframes are. The “neckline box” covers four years of time. This chart indicates that something big lies ahead that will trigger a final move out of the box.
The head & shoulders pattern indicates that the move will be to the downside, and even a rally towards the 90 area would have no effect on the overall picture.
READ MORE