Weekend Reading

This week’s weekend reading post is a bit belated due to several factors, foremost of which is my recovery from the Vegas trip.  It will be another week of traveling for me as I leave for Bogotá Colombia on Tuesday to spend Thanksgiving with some family down there.  We will also be taking a short two day trip to the beach in Cartagena for some much needed sun.  If you have any must sees in either city please leave a comment with your recommendation.

As I write this gold is going bizonkers now trading up around 1165 on the December $GC_F contract.  Look, this is simple, if you don’t have a position, just step the hell out of the way.  The conversation about why gold is moving like this is very interesting academically, but at the end of the day it doesn’t matter for anything.  Just listen to the tape, it’s telling you that the path of least resistance is up.  Is it because China is buying gold, or investors are worried about inflation, or people fleeing US Dollars in favor of a hard asset?  Who gives a crap, let the academics debate, they don’t have money on the line.  Commodities are the purest trading vehicles out there because they have no intrinsic value.  Gold has no cash flow, it doesn’t produce dividends, it has no assets.  Yes, some commodities are different than others in that they can be influenced by demand destruction, specifically crude oil and corn as we saw last year.  But these demand destruction stories play out on longer time frames than you should be concerned about as a trader.  Crude gave you plenty of warning last year than the momentum had stalled and being long on the other side below 120 was not correct.  In no other asset class does the saying, buying begets buying and selling begets selling, apply more.  I will continue to hold my $GLD position entered at 95.25 until it makes a new 20 day low, it’s that simple.

Here is your weekend (Monday) reading:

I still don’t hear a lot of talk about what reform should look like in the financial sector, here’s a good start (Information Arbitrage)

Are we going to have a perma-TARP program in one form or another? (WSJ)

One of the best explanations I’ve read yet as to why the risk trade is on like donkey kong (Kid Dynamite)

If it surprises you that smart people want to make money, please slap yourself in the face (Washington Post)

John Paulson’s hand is hot, if it wasn’t I would say creating a hedge fund just to get long everything gold signals the top (NYT)

If China were a poker player, I’d say they are playing 100% by the book  (Economist)

As I’ve said here many times, I’m an independent, but this Fox News thing is just getting ridiculous, it’s just conservative porn at this point (The Atlantic)

If we are going to make banks lend money they don’t want to, or that businesses don’t want, we might as well just have a centrally planned economy and get it over with (Mish’s Global Economic Trend Analysis)

Mexico’s oil industry is so fucked, they’ve just done everything possible wrong, oyyy (Economist)

Don’t be an ignorant schmuck, take a moment to learn a little bit about China, you’ll probably be working in one of their prison factories soon according to @The_Real_Fly (The Atlantic)

The college bubble is about to pop big time, tack on another 33% to California public college tuition (Newsweek)

All eyes may be on China in the 21st century, but the real game is going to be played in Africa (Foreign Policy)

It’s time to build power grid 2.0 (Gregor Macdonald)

I can feel the liquidity in the market is starting to dry up, all be it slowly, if a few of these IPOs don’t get done, woe boy watch out (WSJ)

All it’s going to take is one new disruptive technology created by an American company (DNA Read the World)

Are fat people good for America? (The Atlantic)

Don’t expect any more light colors on this map any time soon (Latoya Egwuekwe)

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