m22au's journal

I'm still basically sitting back on my (long gold / short equities) position and not doing much shorter-term trading.

However I am thinking about maybe, possibly looking to short some debt-laden companies that

(1) are showing months of relative weakness versus the S&P 500

and/or

(2) had recent bad news

examples:

S GT

PVTB MI SNV

then maybe KEY RF HBAN WTNY

If anyone has any good information about interest rates on debt and/or debt-equity hybrids for Sprint-Nextel I would be interested.

Otherwise I will just investigate at

http://online.wsj.com/mdc/public/page/2_3024-Preferreds.html

http://www.quantumonline.com/

and any other source that I can find
 
Front month gold futures now at a numerical value greater than ES front month futures for the first time since July.

As mentioned in my previous post, I am targetting (gold / ES futures) of at least 2.00.

As a guide, in March when the stockmarket was in the doldrums, (gold / ES futures) was above 1.35.

edit:

Assuming the quote from SHTFplan.com is correct, this link:

http://www.shtfplan.com/marc-faber/marc-faber-says-gold-a-bargain-compared-to-sp-500_10302009

shows that Marc Faber has a similar view to me. Specifically:

"returning to the argument that gold is expensive, it would appear that it is actually still a bargain compared to the S&P 500. At present, gold sells at about the same level as the S&P 500, but if I am right about the size of future US fiscal deficits and about the Fed neglecting to protect the purchasing power of the US dollar, I could envision a time when gold will sell for at least two or three times the value of the S&P 500. Also, if an investor were convinced that equities will do better than gold, he should consider investing in a basket of gold and silver shares, which are relatively depressed compared to the price of gold"


Quote from m22au:

Interesting to see 10 year yield up to 3.42% (from low 3.10s on jobs number Friday 2 October).

GBP still not making new 2009 calendar year highs against USD, while the EUR, AUD, CHF, JPY, CAD continue to party at or near 2009 calendar year highs.

Oil back above 75 USD. Although a lot of commentators have written about the strong inverse correlation between equities and $DXY, (and strong positive correlation between equities and gold) few have also made the seemingly obvious point about oil and its positive correlation with equities.

I am still long gold short equities.

Gold Dec 2009 futures / ES Dec 2009 futures now at about 0.98. I am targetting at least 2.00 in the years to come.

Even if the equity market orgy continues, at some point higher oil prices will start to negatively impact GDP / corporate profits. Where is that point? Who knows. Maybe $100?

The breakout above $75 and strong positive correlation with equities means that it's unlikely that both oil and equities can continue to go up in tandem for more than another .... 33% maybe?
More...
 
 
A list of US banks by total assets can be found here:

http://www.ffiec.gov/nicpubweb/nicweb/Top50Form.aspx

Interesting to note that although MI and SNV are in the top 50, they are outside of the top 20 and were not stress tested in early 2009.

For what it's worth, CIT is 28th on the list, MI is 32nd and SNV is 39th.

It can be reasonably assumed that (like CIT), MI and SNV are not considered Too Big To Fail.
 
Interesting article from Ambrose this morning regarding the Japanese situation:

http://www.telegraph.co.uk/finance/...-we-should-be-worrying-about-not-America.html

The problems of the US Dollar are not USA-specific.

The UK is similar to the US (bloated finance sector; huge budget deficits; high and growing government debt) and the Japanese situation (really really huge government debt; demographic problem; government bonds advertised in taxis) are bad too.

Also I think at least one hedge fund manager (from memory Kyle Bass and David Einhorn) have written about Japan in recent months. You can probably find these letters / speeches at www.marketfolly.com

As frequent readers of this thread know, the way I am "playing" the US "problems" is a pair trade of long gold (against US Dollar) + short S&P 500. Currently the ratio is about 1.01 and I am targetting at least 2.00

However it is possible (likely?) that similar trades (long gold against GBP + short FTSE 100; long gold against JPY + short Nikkei 225) could also work.

Some quick and nasty references for this data:

Gold and currency quotes and charts:
http://fx.sauder.ubc.ca/plot.html
http://www.kitco.com/

http://finance.yahoo.com/intlindices?e=europe
http://finance.yahoo.com/q?s=^FTSE
http://finance.yahoo.com/q?s=^N225

Interesting to note that while many global stockmarkets made new 2009 (calendar year) highs in October, that the Nikkei peaked in August / September.


Quote from m22au:

Front month gold futures now at a numerical value greater than ES front month futures for the first time since July.

As mentioned in my previous post, I am targetting (gold / ES futures) of at least 2.00.

As a guide, in March when the stockmarket was in the doldrums, (gold / ES futures) was above 1.35.

edit:

Assuming the quote from SHTFplan.com is correct, this link:

http://www.shtfplan.com/marc-faber/marc-faber-says-gold-a-bargain-compared-to-sp-500_10302009

shows that Marc Faber has a similar view to me. Specifically:

"returning to the argument that gold is expensive, it would appear that it is actually still a bargain compared to the S&P 500. At present, gold sells at about the same level as the S&P 500, but if I am right about the size of future US fiscal deficits and about the Fed neglecting to protect the purchasing power of the US dollar, I could envision a time when gold will sell for at least two or three times the value of the S&P 500. Also, if an investor were convinced that equities will do better than gold, he should consider investing in a basket of gold and silver shares, which are relatively depressed compared to the price of gold"
More...
 
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