I see Economic Disconnect's Another Mixed Bag as it relates to Yahoo headlines and raise him an Illusion of Prosperity's take on Bloomberg headlines! It is funny. I was just telling my girlfriend last night that the following headlines were just so darned silly when taken as a group.
Readers may know that I think gold is expensive and I do not trust it as a safe store of value at these levels. However, I cannot generally endorse Bloomberg's headline logic as seen below.
July 19, 2010
Bloomberg: Gold May Extend Biggest Decline in Two Weeks as Dollar Advances
July 19 (Bloomberg) -- Gold may drop, extending the biggest fall in almost two weeks, as the dollar gains, curbing demand for the metal as a store of value.
Aha! Gold priced in dollars may fall as the dollar advances!
July 16, 2010
Gold May Fall in New York as Strengthening Euro Prompts Sales
The dollar slid to a nine-week low against the euro after reports yesterday showed U.S. manufacturing contracted in June by the most in a year and producer prices fell. U.S. reports may today show household sentiment deteriorated and consumer prices fell. Gold priced in euros today slipped to an eight-week low.
Aha! Gold priced in dollars may fall as the dollar slides!
I know what you might be thinking. That last link says "priced in euros". That is true. I would remind you to read the headline again though. It says "Gold may fall in New York". That's dollars. All prices quoted within the article are also in dollars.
So let's sum up the two headlines.
Gold May Fall if the Dollar Gains or Slides
Nope. Not quite there yet. If gold may fall then we can't rule out that it might also rise. Further, I'm pretty much told here that the dollar's movement is irrelevant. We should therefore remove that part. Here's a better headline.
Gold May Rise or Fall
Okay, now let's trim it down to its most concise form. There's really no need to point out that it might rise or fall. Most people can figure that out on their own. We should remove that part.
Gold
Fantastic headline! I'm very pleased with myself on this one. Print it! We're done! All the sensationalism is gone now. There's no added fluff and all the action verbs have been stripped.
Nice collection.
ReplyDeleteWhere is the headline:
"Gold drops at exactly 10am when NY opens but rose all night everywhere else"
Love your sharp take as always. We just really disagree on this stuff.
GYSC,
ReplyDeleteIt is the disagreement that makes the market.
Gold will always be priced at what other people will pay for it. The market could really care less what either of us thinks, lol.
Thanks for that!
ReplyDeleteI say gold fair value $$10,000 you say $0 so thats what makes a horse race.
PS.
If your girlfriend is discussing gold you may want to RUN!!!!!!
LMAO
GYSC,
ReplyDeleteI never said gold was worth $0.
I never said dotcom stocks were worth $0.
I never said US real estate was worth $0.
I never said US financial stocks were worth $0.
I never said Chinese stocks were worth $0.
I never said Chinese real estate was worth $0.
I never even said US dollars were worth $0.
It is all relative.
As for my girlfriend, we've mostly been discussing Volvo car design today. They put the battery in the trunk! Picture my surprise when I went looking for it.
The battery is dead. You actually need a working battery to open the trunk though. Who thought that was a good idea? We had to jump start her car just to get the trunk open. Fortunately, the Volvo designers didn't force me to hook up to that battery in order to do that. You still jump start it from under the hood.
Technically, she should be able to use her master key to get in the trunk directly. Unfortunately, the last time she saw that key it was in the tracks of a Caterpillar tractor. No joke. She'd left them on the table at a barn while she was off with her horse and someone drove right over that table. In order to get her mangled keys back, it would have required taking the tracks off that tractor and they were not all that interested in doing that.
Still, it could have been worse.
Question
Can anyone be dumb enough to lock their only key in the trunk of their Volvo S60 with a dead battery, AND lock themselves out of the car?!? Turns out, yes.
D'oh! What are the odds of that?
GYSC,
ReplyDeleteBy the way, Chanos thinks gold will be insulated from the bubbles in China and commodities. I clearly share his views on China and commodities but don't share his views on gold. It isn't like I'm shorting gold though. I'll be fine if he's simply right on commodities. My goal is to not lose purchasing power. Falling commodity prices would treat me just fine.
He's clearly a very bright guy to spot the problems at Enron long before most did.
I find myself more in Roubini's camp (Dr. Doom, dislikes gold), then Mish's camp (deflationary but likes gold), and not so much in Schiff's and Roger's camp (hates US, loves China, loves commodities, loves gold). Just opinions of their opinions of course.
Silly headlines indeed!
ReplyDeleteAnd all these headlines are inevitably backed up by useless opinions from eCONomic and financial "experts" that make a living being wrong.
Serioulsy, you couldn't possibly be more wrong than the "experts" if you tried. I guess in a sense, the "experts" truly do have expertise - at being wrong.
Deflation is upon us. I don't buy the argument that gold does well during deflation. In past deflations gold was money and did well against credit but not necessarily cash. Gold is not money today.
And even if one does believe gold will do well during a deflation, over the last decade gold has increased 400% and that alone would give me pause. There are limits, even for gold.
The dollar is a valuable franchise. I don't think they will trash it the way the gold bugs do.
I could be wrong of course. But I'm not always wrong so I can't be a financial "expert" or an eCONomist.
"the biggest fall in almost two weeks": ALMOST TWO WEEKS!!!!!!
ReplyDeletemab,
ReplyDeletePaid Financial Experts - Combining the accuracy of stopped clocks (right twice per day), the predictive power of rear view mirrors, and the bias of used car salesmen!
dearieme,
ReplyDeleteALMOST TWO WEEKS????
I know! I've extrapolated the last two weeks of summer temperatures and it is going to be WAY TOO hot this Christmas! Rivers will boil! ;)
Mark,
ReplyDeleteI never said gold wa going to 10k either, I was using extremes of course, making a poor effort to eb funny.
NASCAR has the battery in the back and a few other production cars have them in the rear for weight purposes; I agree its a hassle.
So gold is not going to 10k before 2012?!?!
ReplyDeletehttp://tinyurl.com/34bxuoa
Uh-oh.
Mr Bock you've got some 'splaining to do.
Mark, GYSC,
ReplyDeleteI had a toyota with a battery in the front but the engine was in the back!!
:)
GYSC, watchtower, & remy,
ReplyDeleteMy girlfriend had some 'splaining to do today.
I jump started her car. I told her that under no circumstances should she turn her car off until she reached the dealer for a battery replacement.
About 30 minutes later the phone rang. She was at the bank. Any guesses on why she called me?
Any guesses on the first words out of my mouth when I arrived on the scene?
Hint
Fortunately, it was just 3 miles away. I am quickly becoming the jump start king of Rention, WA!
Hahaha!
Make that Renton, WA.
ReplyDeleteRention must be some sort of freudian homeowner slip, as in...
Most should have considered rention instead of buyion over the past few years.