news.goldseek.com >> 11 May 2012

Does JP Morgan Have Staying Power?
By: Brady Willett
In a rare moment of sinking-ship confidence usually reserved for U.S. policy makers during a financial calamity, that Mr. Dimon was compelled to use the term ‘staying power’ is astonishing. How does a presumeably isolated $2 billion loss for a $155 billion company that is still highly profitable translate into JPM being forced to sell any of its positions at an inopportune time?

news.goldseek.com >> 22 January 2012

Equities Are Not Dead
By: Brady Willett
Proclamations like ‘The Death of Equities’ usually arrive near the point of maximum pessimism, and when everyone is most bearish it is usually time to take a contrarian stance and buy. However, today - less than 4-years into a historic deleveraging phase* - calls that equities are dead are likely to prove premature. Equities are not ‘dead’ in the sense that they are poised to rally strongly from a contrarian perspective. Rather, equities are simply dying…

news.goldseek.com >> 15 December 2011

Did Ron Paul Slay The Gold Bull?
By: Brady Willett
The price of gold was off by nearly 5% yesterday, with comex gold losing over $97 an ounce on an intraday basis. This price collapse is comparable, in percentage terms, to the carnage seen in other precious metals, but well beyond the damage seen in other ‘risk’ areas of the marketplace (i.e. commodities and equities). Accordingly, the question deserves to be asked: why is gold outpacing the recent decline in other ‘risk’ areas of the marketplace?

news.goldseek.com >> 7 August 2011

U.S. Downgrades S&P
By: Brady Willett
U.S. Treasury Securities are no longer risk-free. This news comes after Standard and Poor’s cut the triple-A rating it has awarded the U.S. since 1941 (Moody’s has been in the AAA camp since 1917). Given the U.S.’s status as the world’s reserve currency printer – not to mention the safe haven flows arriving in the U.S. due to the recent upheaval in Euroland - the immediate impact of the downgrade is highly uncertain. However, what can be said is that should Moody’s or Fitch also cut, capital may be required to exit U.S. debt due to restrictive ownership covenants.

news.goldseek.com >> 14 July 2011

Catch a Bernanke by the Tail
By: Brady Willett
And what, prêt ell, is money Mr. Bernanke? Is it seen in the unbacked fiat experiments that after a mere 40-years of floating freely are already showing signs of sinking? Or perhaps ‘money’, as Bernanke might define it, is whatever someone in his position can debase at a press of a button?

news.goldseek.com >> 16 February 2011

Sell American. Buffett Is.
By: Brady Willett
In short, the problem of having more cash than ideas is not one that Mr. Buffett has had to deal with since he went on a buying binge in 2008. And while it is not known to what degree Buffett has reduced his personal exposure to equities, that Berkshire cannot find any equity bargains and is starting to hoard cash in a relatively big way is self explanatory: sell.

news.goldseek.com >> 9 February 2011

Lockhart Tries To Justify The Fed’s Love (of printing money)
By: Brady Willett
Federal Reserve members are openly taking credit for sparking increases in individual asset prices (i.e. stocks) while at the same time contending their policies are not to blame for the broad advance in commodity prices. Given that commodity prices have more closely correlated the increase in equities than the broader inflation rate, Lockhart-logic dictates that equities and commodities are a part of the same asset price ‘category’. In this category sits anything that can be purchased with margin, leverage, or cheap money, and anything that could conceivably be regarded as ‘alternative’ to traditional savings. In the asset price category also rests an inflationary monster that has not been seen in decades…

news.goldseek.com >> 13 January 2011

2011 - Another Year of Living Dangerously
By: Brady Willett
Suffice to say, the only lesson that has been learned/confirmed is that Bernanke and company have no intentions of ever seriously dealing with the overly interconnected, overly complex, and moral hazard laden circus that is the U.S. financial system.

news.goldseek.com >> 5 November 2010

Bernanke Dares The World
By: Brady Willett
On November 3, 2010 the Federal Reserve Board announced another round of money printing (aka quantitative easing), and yesterday Chairman Bernanke defended the Fed’s actions in the Washington Post. It is unusual for Mr. Bernanke to use the op-ed format to impart the Fed’s thought process. This speaks to the fact that while so many are aware of the risks of QE2, so few see the potential benefits. Before some thoughts on QE2, first an overview of Bernanke’s commentary.

news.goldseek.com >> 21 October 2010

Stiglitz’ Dances With Sugar Plums
By: Brady Willett
In short, there is nothing necessarily right or wrong with claiming the U.S. should go into greater hock because the economy is on the verge of collapse. As per Keynes, perhaps there comes a point when the economy would be better off if people were paid to dig ditches and fill them in again? Nevertheless, there is something intellectually suspect with the contention that low interest rates and debt creation can coalesce to generate spectacular ‘returns’ given that any rational look at U.S. history claims otherwise.

news.goldseek.com >> 27 September 2010

Don’t Fear the Gold Dealers. Fear The Government!
By: Brady Willett
CNBC ran an interesting article last Friday entitled, “Lawmakers Take Steps to Protect Gold Investors”. The article discussed how politicians are questioning the tactics used by those selling gold, with Rep. Anthony Weiner contending, “The television gold industry is an industry, and is led by one particular company that has built up the industry on fear, lies and rip-offs.”

news.goldseek.com >> 26 September 2010

Gold’s Historic Rally Continues
By: Brady Willett
Gold broke above $1300 an ounce on Friday and silver ended at a new 30-year high. Whether these gains are sustainable over the near term is impossible to comment on. What can be said is that gold is likely to remain in a long-term uptrend so long as the central banks continue to try and manipulate currency and asset prices, and/or the outlook for fiscal deficits remains worrisome. In other words, gold and silver today serve as both a hedge against the downfall of fiat money and the threat of major sovereign default(s).

news.goldseek.com >> 20 September 2010

The Myth of ‘Deleveraging’
By: Brady Willett
In the third quarter of 2008 households and non profit organizations (or ‘consumers’) had $14.6 trillion in total debt on their balance sheets. Since then the consumer has managed to reduce this number by a mere $652 billion. By way of contrast, after reaching $79.1 trillion in the third quarter of 2007, total assets have contracted by an astonishing $12.4 trillion.

news.goldseek.com >> 12 August 2010

Hey Delong! Bubble prices do not justify bubble prices!
By: Brady Willett and Dr. Todd Alway
The U.S. government bond market is the last of the great asset bubbles. We know this, first and foremost, because no one in any position of power in America is willing, and perhaps more precisely able, to enact the painful policies required to ever repay current/future obligations - and yet the market does not, as yet, seem to care.

news.goldseek.com >> 6 August 2010

Until Debt Does Them Part
By: Brady Willett
Ben Bernanke’s machinations since the financial crisis began are widely celebrated as having saved the financial markets from complete ruin. Question is, was preventing the ruin of an over-leveraged, non-transparent, and bubble-driven financial system really the best path?

news.goldseek.com >> 23 July 2010

Rating Agencies Hold SEC Hostage
By: Brady Willett
Less than 24-hours after President Obama signed the historic Wall Street Reform bill into law the SEC suspended the rule that makes the rating agencies more accountable for their ratings. According to the Wall Street Journal, as recently as June 30 the rating agencies thought that the provision for increased accountability had been omitted. They were wrong:

news.goldseek.com >> 27 May 2010

Stage Set For Another Bernanke Adventure
By: Brady Willett
Don’t be fooled into thinking that Bernanke’s silence when it comes to the recent market storm is the result of him surmising that the Fed has reached its intervention limits. To be sure, whether it is insolvent corporations or governments inflicting damage on the U.S. economy and financial markets the story is much the same: the Fed would rather print the dollar into oblivion and sing that every financial disaster is ‘contained’ than ever confess that it has lost control.

news.goldseek.com >> 7 May 2010

U.S. Market’s Stub Toes As Greece Fear Spreads
By: Brady Willett
I’ll be the first to admit that I do not know how the Greece debt crisis/saga will end. What I do know is that when the rating agencies first warned on Greece’s debt back in December this should have been when policy makers urgently started to develop contingency options (assuming some were not already in place).

news.goldseek.com >> 1 April 2010

What Isn’t Manipulated?
By: Brady Willett
News that London trader, Andrew Maguire, has exposed manipulation in the precious metals market has been making the rounds over the last week. This rehashed story of precious metals manipulation, which is being ignored by the mainstream media, has quickly acquired ultra-conspiracy status because Mr. Maguire was not permitted to testify at the CFTC hearing, technical difficulties were encountered as soon as GATA’s Bill Murphy started to speak, and days after the hearing Mr. Maguire’s car was struck in a ‘bizarre’ hit and run.

news.goldseek.com >> 18 March 2010

Fear The New Krugman
By: Brady Willett
The U.S. borrows and spends beyond its means and almost everyone realizes that tough policy choices must be made to avert disaster. However, rather than confront the imbalances that have resulted from U.S. profligacy by ending U.S. profligacy, there is the growing threat that policy makers are in search of ‘magical’ alternatives. One such alternative is trying to force China to stop ‘manipulating’ its currency.

news.goldseek.com >> 12 March 2010

Gold: ‘Not A Bad Asset’, Indeed
By: Brady Willett
Suffice to say, when it comes to foreign reserves, gold, or the value of the Renminbi, policy rhetoric out of China is often intended to diffuse tensions with foreign policy makers and/or provide misdirection. Using the above comments as an example, is it coincidental that China is talking up its U.S. Treasury purchases a month before the U.S. Treasury could unleash the word ‘currency manipulator’ in a report?

news.goldseek.com >> 19 January 2010

Sack The Regulators
By: Brady Willett
Be it Wall Street, Greenspan, politicians, money managers, or even homeowners, there are plenty of parties to blame for the financial crisis. However, given that the blame game is still alive when it comes to dissecting the Great Depression, why bother? In other words, why waist time casting aspersions on those players who were operating out of a play book that our regulators at least implicitly sanctioned? The bankers paraded in front of the cameras last week should not be treated as convictable criminals. However, the regulators that failed and are failing to fight for real change should be.

news.goldseek.com >> 8 January 2010

Some Notes For All The Super-bears Out There In Internet Land
By: Brady Willett
Apparently running a website entitled ‘FallStreet.com’ for the last 10-years and being objectively pessimistic on the markets is not enough - I still get emails attacking me for being ‘like the herd’, ‘useless’, and for following the ‘status quo’. The latest batch of fan mail came in response to yesterday’s piece, which apparently wasn’t bearish enough for some…

news.goldseek.com >> 7 January 2010

2010 Preview: The Wonderful Wizard of USD
By: Brady Willett & Dr. Todd Alway
The same day President Richard Nixon closed the "gold window” Ron Paul entered politics. Dr. Paul has been fighting to end the Federal Reserve ever since - he has been supporting a bill to audit the Fed since 1976. In 2009 Congressman Ron Paul’s bill to audit the Fed was included in the Wall Street reform bill and passed by the House. Only the Senate* stands in front of Congressman Paul’s heroic battle to audit the secretive act of the central bank wizards.

news.goldseek.com >> 17 December 2009

Is Obama Ready To Rumble?
By: Brady Willett
President Obama wants more regulatory eyeballs on the increasingly precarious financial marketplace, but he is unwilling to take up the challenge of actually making the markets any less precarious. To be sure, Mr. Obama has made absolutely no effort to breakup the banks, to curtail the Fed’s unmitigated powers, or to sort out the ongoing and growing mess that is Freddie and Fannie.

news.goldseek.com >> 25 November 2009

Bubble Religion
By: Brady Willett
The dreaded “L” word – liquidity – has once again become the word to explain every major movement in every major asset class. Don’t understand why equities are outpacing the fundamentals – liquidity! Can’t grasp why crude oil is up even though the demand outlook remains exceptionally weak – liquidity! Baffled by low or negative U.S. bond rates, the surging price of gold, and the booming Chinese real estate market - liquidity, liquidity, liquidity!

news.goldseek.com >> 16 October 2009

Greenspan Gone Wild (Again)
By: Brady Willett
Former Federal Reserve Chairman Alan Greenspan is the worst Fed boss in history, but boy-oh-boy how we loved to watch him smile. We were so attracted to Mr. Greenspan’s girlish grin, in fact, that he could say just about anything and people would eat it up: “I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said”. How delightfully playful! He really must be the world’s best central banker!

news.goldseek.com >> 9 October 2009

The Fires That Blind
By: Brady Willett and Dr. Todd Alway
For the record, ultra-safe variants of ‘cash’ have outperformed risky U.S. equities over the last decade...and yet no one seems to care. Buy equities, real estate, commodities, or art because their future fortunes are perpetually intertwined!?

news.goldseek.com >> 17 August 2009

Bull Market Delusions In Recovery
By: Brady Willett
In short, it is the height of idiocy to take a 5-month snap-shot of market activity and contend that big new bull market is born, especially when the 5-year snapshot noted in the first paragraph turned out to be little more than an unsustainable cyclical bull fueled by unprecedented asset/credit bubbles. Given the potentially transient and/or unsustainable forces uniting to stabilize the U.S. economy, common sense leads to one conclusion: today’s rally is a cyclical bull inside of a secular bear.

news.goldseek.com >> 29 April 2009

When will the Budgetary Debate turn into the Budgetary Diktat?
By: Brady Willett and Dr. Todd Alway
While no one can be sure exactly when the era of U.S. dollar hegemony will end, rest assured that when it does the budget choices in front of President Obama or his successor will have been made for them. When and if this day arrives the budgetary debate will turn into a budgetary diktat.

news.goldseek.com >> 7 April 2009

Poor Greed
By: Brady Willett and Dr. Todd Alway
The Wall Street Journal recently suggested that a ‘culture of greed’ may be to blame for today’s crisis. Billionaire investor Stephen Jarislowsky has said that he thinks ‘extreme’ greed was to blame. And nestled within the mob of protestors ahead of last week’s G20 meeting was a little girl, no more than 5 or 6-years of age, holding a sign saying ‘You Greedy BosTards’. Let us simply say, while acknowledging the views of the Wall Street Journal and Mr. Jarislowsky, that the protesting little girl may have been misled.

news.goldseek.com >> 11 March 2009

Greenspan A Glutton For (His Own) Punishment
By: Brady Willett
Why Greenspan continues to try and defend his deplorable record as Fed Chairman is unknown. What is known is that the once powerful Sir Alan has seen his reputation steadily deteriorate to a level not much higher than laughing-stock. Here is what Greenspan had to say in his most recent commentary:

news.goldseek.com >> 15 January 2009

Bond Bubble Trouble?
By: Brady Willett
In short, what U.S. policy makers should hope and pray for is that when the bond bubble end game does arrive it will be because central bankers (plural) printed too much money, and not because a viable alternative to USD hegemony has emerged. Supporting the great U.S. Treasury bubble is in everyone’s best interests, until it is not.

news.goldseek.com >> 6 January 2009

2009 Outlook: Angling For A Recovery
By: Brady Willett and Dr. Todd Alway
Give a man to fish and you feed him for a day. Teach him how to print money and you feed him for a lifetime? Juxtaposed against this seemingly outlandish re-write of the popular Chinese proverb is the image of the U.S. trying to inflate away the ills of asset and debt deflation.

news.goldseek.com >> 16 December 2008

Bailout Madoff!
By: Brady Willett
In short, there needs to be a new bailout effort entitled the Criminal Reprieve Assistance Program (CRAP) to provide ingenious criminals like Madoff the tools required to help kick start the faltering U.S. economy. By investing $100 billion with Madoff so that he can start-up a new and improved SAP Fund and make current clients whole, the CRAP would immediately help restore confidence in the marketplace.