Salestrading comments from Europe
Gold came off rather sharply the past week with prices having retreated to the 50-day moving average. Since the medium-term bull run that started in August 2005, this 50-day moving average has managed to provide good support for the metal. We won’t be surprised if the bigger downside correction towards $500/480 that some are looking (or should we say hoping) for will not materialize.
* The key to holding up the entire speculative U.S. financial system with its current excessive levels of debt is maintaining the U.S. housing bubble. Anything less would result in America’s worst nightmare and, in short order, the entire world.
* An essay on the Gold/Oil ratio and an idea on how to make money on Gold, even if it goes down.
* The proposed Iranian oil bourse will accelerate the fall of the American Empire. A critique of this view can be found here .
We came across a very interesting report from Paul Mylchreest from French brokerage house CA Cheuvreux that does a good job at summing up the gold bugs case for this precious metal. In a nut shell Mylchreest reasons why central banks have considerably less gold than their officially reported reserves and shows that there is a considerable supply deficit in the gold market. Cheuvreux ups its mid-cycle gold target to $900 and sees the possiblity of a spike to $2000. Read the full report here.
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- The U.S. is in Technical Default
- Sugar and Corn: The New Oil of the Future
- Gold’s going much higher: Thank China
- Stephen Roach: The Hollow Ring of Davos
- Cricket Anyone? Sneaker Makers on Fresh Turf
- Ready for $262/barrel oil?
- Golden Rules: Secrets to Success according to 49 business leaders
- Greenspan’s Warning Words
Telefonica SA, Spain’s biggest telephone company, boosted the yield on the bonds
it plans to sell this week after investors balked at the biggest issue in
three years in European telecommunications. Telefonica is selling the equivalent
of about $6.6 billion of bonds to help finance its 17.7 billion-pound ($31.3
billion) purchase of U.K. mobile phone company 02 Plc.
The buyout prompted some analysts to cut their ratings on phone companies and drew investors’
attention to the industry’s worsening credit quality as companies ramp up
borrowing to fund buyouts and growth. European phone companies pursuing
acquisitions may sell as much as $60 billion of bonds this year, according to
Dresdner Kleinwort Wasserstein. They are reversing a trend in place since
credit-rating downgrades spurred companies to focus on cutting
debt instead of boosting shares after a $100 billion, debt-financed acquisition
spree in 2000 and 2001.
Oil stocks had a troublesome 4Q2005 as the price of crude oil slipped from its high of $70 to $55. Now that crude is on the rise again, oil stocks seem to following along. The chart shows clearly that oil stocks are still in a bull market. Expect them to reach new highs this quarter.
After having had several years of positive equity market returns behind us, most world wide indices trading around new highs and positive newsflow from both the economy as a whole and corporations in specific on the tapes, it might not be the most prudent time to suggest we might be in for a significant drop in equities. Nevertheless Larry McMillan makes a compelling argument for this scenario in Forbes. Read it here.