Tuesday, August 14, 2012

Warning: Get Your Money Out: “All Legal Bank Deposit Protections Are Now Officially Gone”

Mac Slavo,

Former money manager Ann Barnhardt, who in November of 2011 made the decision to cease operations of her brokerage firm and return funds to her customers citing “systemic” problems within the entire financial industry, has issued a new warning about the stability of US banks and the safety of individual deposit accounts.

The warning, stemming from a recent federal appeals court ruling surrounding customer funds lost during the 2007 collapse of Chicago futures broker Sentinel, indicates that individuals who lose deposited funds because a financial institution improperly manages that money, even if those funds are supposed to be “segregated” from other operations of the firm, are essentially left with no recourse if the firm goes belly-up. According to the court, a misallocation of those customer funds, “is not, on its own, sufficient to rule as a matter of law that Sentinel acted ‘with actual intent to hinder, delay, or defraud’ its customers.”

Continue Reading at SHTFPlan.com…

Gold To Spike As Physical Market Is Shockingly Tight

from KingWorldNews:

Today John Embry, who is Chief Investment Strategist of Sprott Asset Management, spoke with King World News about the shockingly tight physical gold market. He also discussed Europe, the United States, stocks and silver. Here is what he had to say: “The US stock market has been levitating over 13,000 for a bit, and I was struck by an article in the NY Times which featured Jack Bogle, who started Vanguard Funds. Jack said, ‘It’s urgent that people wake up because this is the worst time for investors that he’s ever seen, and he’s been in the business for more than 60 years.

When you put what he said together with the fact that the VIX is at the lowest level since 2007, they contradict each other. But I would be inclined to go with Bogle. It’s my firm belief that the stock market is being supported by the PPT (Plunge Protection Team).

Right now I think the market is extraordinarily vulnerable to the realities of what’s going on in the world….”

Embry continues @ KingWorldNews.com

This Little-Known 7.5% Yielder Looks Ready to Move Higher

Today, I'm looking at a stock that is a great source of income and has the potential to deliver solid trading gains. It's the only publicly traded company involved in what is probably the best-performing investment category over the past 30 years: the taxi medallion market. And if you want to be part of this market, this stock is the only way to invest without buying a medallion that costs at least $700,000.

If you do not live in a large city, you may not know what a taxi medallion is. New York City and most other big cities limit the number of taxis with a licensing system, requiring each taxi to have a license, which is known as a medallion. A corporate taxi medallion sells for about $1 million in New York City, and an individual medallion is $700,000.

An analysis by Bloomberg News shows individual driver medallions have increased in value by more than 1,000% since 1980, beating gold, real estate and stocks as an investment.

Medallion Chart

For now, there are only about 13,000 taxi medallions in New York City, and NPR reports that number has been about the same since the 1930s. The City recently approved the auction of an additional 2,000 taxicab medallions, which may decrease the value of existing medallions but will benefit Medallion Financial (NASDAQ: TAXI), a specialty finance company that makes loans to finance the purchase of taxicab medallions, as well as business and consumer loans for other purposes. And the stock offers investors a 7.5% dividend yield. (more)

Snap! Crackle! Pop!…Goes the Student Loan Bubble!

dailyreckoning.com / By Dan Amoss / August 13, 2012

Jacobus, Pennsylvania – It’s May 2013 on an ivy-draped college campus. You just graduated with a degree in English. In 2009, you borrowed $50,000 from the US Department of Education’s Direct Loan Program. Job searches for teaching and journalism positions have been fruitless. Within a matter of weeks, you must start making loan payments on a waiter’s wages and tips. On sleepless nights, you fear what defaulting on this loan will mean down the road.

Signing up for a huge student loan was a mistake. Both you and the lender had assumed a certain type of job market would exist four years into the future. Your lender — the US government — has long subsidized unsustainable activity. In 2009, economists encouraged politicians to promote even more nonsensical spending than usual. “Spending on something — anything — is valuable and necessary stimulus!” they said.

We got government spending in 2009 — spending that worsened imbalances. Now the gap between a self-sustaining economy and today’s stimulus-addicted economy is so wide that policy fixers must commit ever more resources to prop up past spending mistakes.

People are smart and adaptive; governments are dumb and reactive. Markets often fail. Supply and demand mismatches bring about rising and falling prices. Assuming we have flexible capital and labor markets, market failures can get corrected quickly. But in today’s bailout-heavy, politics-driven economic system, market failures are not corrected quickly, and are usually made worse. This has huge implications for the government budget — and the investing environment staring us all in the face…

Let’s return to the student loan mistake facing the English graduate and why it’s bad news for the future of many investments. According to Labor Department statistics, 1.9 million Americans between the ages of 20 and 24 not in school are officially unemployed. The size of this age group working part time is the biggest since 1985.


16 Trillion Reasons Why America is Bankrupt

16 Trillion Reasons Why America is Bankrupt

click here for audio

Chart of the Day - Chevron (CVX)

The "Chart of the Day" is Chevron (CVX), which showed up on Friday's Barchart "All-Time High" list. Chevron posted an all-time high Friday of $113.64 and closed up +0.82%. TrendSpotter has been long Chevron since July 2 at $105.86. In recent news on the stock, Barron's on Aug 5 said that with low valuations and rising dividends, Chevron is one energy stock that is particularly attractive, while last Monday, Oppenheimer raised its price target on Chevron to $130 from $120. Rising crude prices may also boost Chevron's bottom line after the U.S. Energy Information Administration on Tuesday raised its Brent crude oil spot price average to about $103 per barrel during the second half of 2012, about $3.50 per barrel higher than in last month's outlook. Chevron, with a market cap of $221.2 billion, is the fifth-largest integrated energy company in the world. It conducts business in approximately 180 countries and is engaged in every aspect of the oil and natural gas industry, including exploration and production; refining, marketing and transportation; chemicals manufacturing and sales; and power generation.


How to Catch the Next Boom in Resource Stocks

After months of misery, natural resource investors are getting a bit of good news...
At least from a "trend perspective."
Regular Growth Stock Wire readers know we keep close tabs on the natural resource sector. Because this sector regularly goes through huge booms and busts, it's a good friend to the speculator. Get in the booms early, avoid (even short) the busts, and you can make huge returns.
For the last 18 months, it's been all bust for natural resources. The sector enjoyed a huge run higher in late 2010/early 2011, but it has suffered a massive correction since then.
Investors are worried about global economic growth sputtering. Many people are terrified things will get worse. So they've dumped resource stocks... especially the small, "junior" resource stocks, which typically perform risky exploration work.
We like to gauge the price action in small "juniors" with the S&P/TSX Venture Index. It can be considered the "Dow Industrials of small resource stocks." As you can see from the chart below, this index has plummeted since 2011. Many of the stocks in this index have fallen 75%-90%.
Now... take a look at the lower right-hand side of the chart. You'll notice that the Venture has stopped falling. While this is no bullish buy signal, it is a small bit of positive price action.
The first step of beginning a new rally in resources is for the sector to stop falling... and then stabilize. It's during these stabilization periods that contrarian investors can step in and buy beaten-down assets for bargain prices.
As we mentioned, the Venture hasn't turned higher... There's no bullish trend here yet. But keep an eye on this recent low in the 1,175 area. If small resources can hold this level and move higher, it will offer us a great entry point to potentially catch the next boom.

David Morgan: Silver Manipulation Investigaton Dropped, or Not?

This Could be the "Trade of the Decade..."

As the world waits for a cooperative agreement within the European Union to save Greece and keep the union together, and as traders and investors anticipate the next move by the U.S. Federal Reserve and central banks around the world, one thing remains true...

U.S. treasury yields can't get much lower.

Sure, they can go lower, and they very well may. But how low, and what is the end game? 0% treasury yields?

It's possible.

Maybe things will get so bad that investors will be willing to pay the U.S. Treasury to hold their money, resulting in negative yields. Yields on some short term treasuries are already negative when we factor in inflation.

I prefer to be a realist and certainly recognize that the economic situation worldwide could still get worse before it gets measurably better. But I also believe it will get better. With that in mind, you have to honestly look at the risk involved in holding U.S. treasuries. Despite the United States monetary and fiscal travails, they are still considered a safe haven. Billions upon billions of dollars are parked in treasuries. But what happens when things do improve? (more)