You’re so money and you don’t even know it!

-Trent

Gold
Always believe in your soul
You’ve got the power to know
You’re indestructible
Always believe in, because you are
Gold

-Spandau Ballet

A view of Gold on a monthly chart. Gold made a 9 times move from 1976 to 1980. Longer term, the yellow metal will be the preferred store of energy.

Peace

Gold circa 1970's

1. If the Bank of America February 5 puts weren’t so expensive, I’d be buying a few thousand of them. It isn’t if this stock is going to trade on the pink sheets, it is when this stock will trade on the pink sheets.

2. 847 remains the level to watch on the S&P 500. Stronger above weaker below.

3. Existing home sales numbers came out this morning. They were better than expected based on revised downward manipulated estimates. REITs will go lower. They have no choice. Nature’s math will prevail. It always does.

Peace

The Golden Ratio

General Electric (GE) announces a horrid, dismal quarter. Then, they fire up their Public Relations machine by putting their delusional thinking into a press release that says not to worry.

“The first quarter dividend is done, and we are committed to our plan for $1.24 per share for the year. We believe the GE dividend provides our investors with a solid return in this uncertain time,” Immelt said.

Stop believing. You are hoping when you should fear. GE’s dividend will be cut. It is already written. GE grew through acquisitions. That games works really well…until it doesn’t. GE is an over leveraged hedge fund. When you grow through acquisitions and you are over leveraged, the survival of your business becomes dependent on the price of your equity. As GE’s common stock moves lower, it’s probability of gambler’s ruin increases. Moodys already looks ridiculous for not yet having lowered GE’s Triple A rating. As the stock moves below 10, they will look even more ridiculous.

Peace

The dividend is safe, until it isn't

I challenge you to make your life a masterpiece.
I challenge you to join the ranks of those people who live what they teach,
who walk their talk.
-Tony Robbins

Reading is cool.
-The Fonz

Inside the Savant Mind: Tips for Thinking from an Extraordinary Thinker. Via Mike at uglychart.com

Greatness in Life and Trading by Brett Steenbarger.

Circuit City Collapse Could Hit Real Estate Investors.
COULD hit real estate investors? That is a bit misleading. It should say, WILL hit real estate investors.

Peace

Downtrend

In markets we often look to historical comparisons. As they say, history doesn’t repeat, but it often rhymes.

This chart is courtesy of dshort.com

The blue line is our current market. We are in a nasty global recession. The market has more work to do on the downside before anyone should be thinking about a potential bottom. It is nowhere in sight. Stay tuned.

Peace

Click to Enlarge