mark mchugh

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  • Gold Poised to Move Higher
    While I generally agree with the author's views (especially long-term), I must dispute a few points:

    The Central Banks are more powerful than ever, our government is borrowing unprecedented amounts of money to rescue private, for-profit banks from the federal reserve. The federal reserve is nothing more than a collection of private, for-profit banks.

    Gold is not the contrarian investment it was in 2001. The trade-du-jour is long stocks - long gold (as evidenced by the lack of short interest in stocks). My spider-sense tells me that many of these players are employing leverage, which means that the gold price and stock indexes fates are tied together for now. I fully expect to see a margin squeeze in the very near future, that will take down both gold and stocks.

    In the long run, I think Adam will be proven correct. But, I am not inclined to add new gold positions right now. If you are really afraid that you are going to miss the gold explosion, consider buying a call option on the GLD. Just keep some dry powder around in case the price drops.
    Dec 28 13:45 pm |Rating: +8 -1 |Link to Comment |View article
  • Enlightening the Gold Bugs
    Guys, please listen.

    I am a certified gold bug, but I just want to warn you; I think you will see gold trade much lower, before it trades much higher (which it will). You should create a strategy now for a big drop in gold. I'll try to list a few factors that I think will come into play very shortly:

    1) The new year will most likely start a new wave of hedge fund redemptions (thanks to Madoff). Hedgies will liquidate gold to meet redemptions.

    2)One point I agree with the author on is that something is way wrong with the Gold/Oil ratio right now. There is a glut of visible supply in oil and I don't think that's likely to change real soon. I don't think the OPEC members are going to stick to the production cuts they just agreed to. They're all hoping the other guys will cut (so they won't have to). They'll just keep cutting each others throats until a war breaks out.

    3)The Gold chart looks toppy right now. Nothing goes straight up for very long, and while gold is the talk of the town, some players are going to take profits.

    4) When any or all of the above start to happen, gold will get a additional push down by central banks sales or market manipulation (same difference). Investors panic, and you've got a full-fledged rout on your hands.

    None of this changes the fact that the US dollar will end up in the fiat currency graveyard (3,800 failed attempts to make paper "money" and counting), but the gold road may have more bumps than you think. These guys who bash gold will have a moment in the sun, I think, make sure you are prepared.
    Dec 24 22:16 pm |Rating: +5 0 |Link to Comment |View article
  • Cramer on Ultra-Short ETFs: Just Plain Wrong
    I'm afraid that you are letting your personal dislike of Cramer color your perception of his message. Personally I think his rant against the leveraged ETF's (and specifically the ultra-shorts) was his finest hour.

    First of all, these things can not possibly work. Like Madoff scheme, you can only make them "appear" to work. Einstein himself could not design a trading platform that could produce double long and short results consistently, day in and day out, moment by moment.

    Pretending to make them work is a whole lot easier. And pushing the prices of the indexes against the bigger money is the easiest way to do it. In recent weeks the SRS's (ultrashort real estate) daily dollar volume was greater than URE (ultralong) and IYR (the index ETF) combined. If the fund was actually shorting the index, it surely would have dropped. The easiest way to profit would be to take the SRS money and buy the index (in other words - steal).

    Furthermore, people don't understand how the mathematics work against them when you re-balance these funds on a daily basis. Case in point: the IYR is down 48% YTD, the URE is down 84% and the SRS is down almost 45%. A lose-lose-lose trade. Probably not what most people would have expected. ronically, the math works out, and the SRS has returned very close to twice the daily inverse of the IYR. The results a real estate bear would want are found in shorting the URE, not buying SRS.

    I agree 100% with Cramer that the short ETF's were created to get around the short-selling margin requirements. The ultrashorts do that and challenge the buyers understanding of arithmetic, which works out very conveniently for the creators in most cases.

    I wouldn't expect to see volume spikes in last half-hour of trading to take place in the leveraged ETF's themselves, I would expect to see trading that would impact them. All you have to do is fix it so that most people lose, so far, so good.....

    There's lots of other things that you can pick on Cramer for, but I think his attacks on the leveraged ETF's are completely justified. Time will tell.
    Dec 29 23:17 pm |Rating: +2 -1 |Link to Comment |View article
  • Blogs, Profanity and Editorial Integrity
    I'm so glad you brought this up.....

    I think it touches the core of what seeking alpha is, why we come here, and whether or not we'll continue to do so.

    I've written this before, I became a regular at SA when Judy Weil's regular commentary was called "Housing Bubble and Real Estate Market Tracker". You guys had the balls (can I say that?) of conviction. That put you light years ahead of other financial websites. A truly diverse crowd of contributors made the site so interesting, and when the comments section opened up, it was like a bar room brawl. And it was all very cool, very pro-first amendment, and the popularity of the site grew dramatically.

    Now, my comments get deleted because I write something like "you deflationists are morons" (which they are), while adding substance to back up that claim. So instead of making morons defend themselves when exposed, you think it's better to spare them the ridicule of being called morons? If you want your site to be a safe haven for morons - mission accomplished.

    I for one think we've already got enough wishy-washy, useless financial websites and magazines, that are more afraid of offending someone than providing hard-edged viewpoints. Figure out what kind of site you want to be, and be that.

    Once you decide how you feel about free speech, don't apologize, or agonize over what the whiners say. You can't please everyone unless you aspire to be completely irrelevant.
    .
    Dec 14 16:09 pm |Rating: +2 -2 |Link to Comment |View article
  • Is This the Last Great Bubble?
    I agree 100% with the author. The timing is anybody's guess.

    To try to answer Alex's question (and I don't mean to speak for Nick): We've been trying to solve the problem of easy money (abundant low interest loans) with more easy money. The treasury is issuing low interest debt at an unbelievable place, almost half to foreigners. We do not have the means to pay this debt in real terms, so we will print more and more money to pretend we are covering the debt. When it dawns on everyone that this is what we are doing, they will dump our debt, and the Fed will have no control over interest rates.

    It's important to understand that when rates rise, existing bond prices fall. A while back, I ran some examples and I figured if rates go to 10%, treasury long bond holders will lose about 50% (flight to safety?). So, it's just a question of when the world loses it's appetite for our debt. And your guess is as good as mine.

    I hope Nick would agree with that explanation.
    Oct 24 18:35 pm |Rating: +2 0 |Link to Comment |View article
  • Blogs, Profanity and Editorial Integrity
    Well thanks, Anonym,

    What the kindergarten foreign policy comment was about was trying to challenge the notion that all opinions are equal. I don't know much about airplane engines, so I don't go to pilot sites and try to "set them straight". And if I ever did, they'd have every right to rip me a new one.

    I do believe in tempering my language (I think most of us do), but I want the right to be unkind at times. We all come here looking for insight to make money and I think discrediting fools is an important part of helping that process.

    And all right, I'll give the rant a 7.
    Dec 16 00:05 am |Rating: +1 0 |Link to Comment |View article
  • Blogs, Profanity and Editorial Integrity
    Dear Anonymous Coward,

    I give your rant a 5 (you'll get better with practice). I really don't get upset when attacked, but thanks for trying.

    Very rarely do I attack an author (go look). I am acutely aware of the effort most put into their work. I use my real name when I post, because I understand the concept of being accountable for what I write (how 'bout you?). And I absolutely love the diversity of opinions that SA publishes, and always have. I hope they never change that. I've spent way more keystrokes defending authors, than attacking them.

    The people who I have "mopped the floor with" are people who don't come here for discussion, or even to read the articles. They come here to use the comments section to promote their own views. When you read their comments, it is obvious that they either didn't read, or didn't understand the article. In some cases, their comments are longer than the articles themselves. "Backdoor" publishing, I guess I'd call it. OK, if that's how it is, fine. Then, we get little cliques of these douche-bags traveling through the site like a graffiti gang, disrupting any chance of the sublime discussions most of us (I think) want to have. And that's OK too, I guess (I am pro-first amendment), although I think it's bad taste. From time to time, I am inclined to expose these cretins for the mental midgets that they are, in no uncertain terms. And that makes me a bad guy?

    If you want to let kindergartners set foreign policy, because their opinions count too, I am very comfortable calling you any one of a number of vicious names (because your messing with my life).

    As a nation, we should be embarrassed that we have an economy on the verge of collapse because we failed to expose stupidity for what it was. So I think that it's important to expose stupidity. And when I call someone bad names (which honestly, I don't do much), they have every right to respond.

    It's your right to be ignorant, yet want to express yourself. Just don't take away my right to call you ignorant (for all to see).

    That's all

    Dec 15 21:39 pm |Rating: +1 -1 |Link to Comment |View article
  • Blogs, Profanity and Editorial Integrity
    "No one is a fool or fascist because of their opinion"

    I'm just curious, how do you define a fool then?

    I'm going to try to re-emphasize my point about strong (and sometimes insulting) language. We need much more of it.

    We are facing a financial storm of biblical proportions because we can't call a duck a duck anymore. If only the banks had said things like. "yo, moron, there's no way in hell you can afford this house, get out of my office". Now, we're trying to rescue these idiots, because we didn't want to hurt their feelings, by pointing out that they were idiots, who couldn't even save enough money for a down payment.

    The best way to get your website infested with fucking idiots, is to not allow anybody to call them fucking idiots. You're well on your way. Pick any post you want and imagine you are a first time visitor here. One thing I've noticed - dunces post a lot. The fact that you don't like to see dunces get verbally bitch-slapped doesn't make you compassionate, it makes you look like you condone ignorance.

    What is at stake on the topics discussed here is the future of my beloved country. And if you think I'm going to let empty-headed jack-holes espouse garbage that will sell my grandchildren into slavery, and politely respond to them, you're out of your fucking mind.

    All opinions are not equal, and when someone chooses to post feeble-minded drivel, I want to be able to mop the floor with their dumb ass, for all to see. Politeness is what caused, and continues to compound this mess.
    Dec 15 18:05 pm |Rating: +1 -5 |Link to Comment |View article
  • Bernanke's Great Lie: The Gold Standard and the Great Depression
    I have concerns that we may see something along the equivalent of the dust bowl. We put too much faith in genetically engineered seed, and there is this weird business about the bees disappearing (see colony collapse disorder). I don't know what this all means, but I certainly get the feeling that a massive crop failure is within the realm of possibility.


    On Dec 26 10:02 AM aitvaras wrote:

    > Socrateazz: you have earned your moniker.
    >
    > The Dust Bowl phenomenon was another major contributor to the Great
    > Depression which receives no notice but created havoc across the
    > country and prolonged the Depression. A comparable event is missing
    > from the current scenario, and its absence will mitigate our current
    > dillema as well.
    >
    > IMO
    Dec 27 16:24 pm |Rating: 0 0 |Link to Comment |View article
  • Forget $100 a Barrel - Oil Will Plummet to $30
    Jason Schwartz deserves some kind of award for the boldest correct prediction of 2008. When I first read this article, I thought you were completely insane.

    I will read your articles in a whole different light now.

    Well done & congratulations Jason! You're the man!
    Dec 19 07:13 am |Rating: 0 0 |Link to Comment |View article
  • Gold and Silver: Backwardation and Manipulation
    Really good stuff Jake,

    I can't dismiss what Jake Champion says either. Does anyone know where these notices of delivery are reported?

    And another thing: Does anyone else find the COT a cryptogram?

    Here's what I think is the thing right now: Hank and Ben are not going to allow gold to spoil their "deflation" party. I just don't think this is gold's moment. Patience.
    Dec 15 23:39 pm |Rating: 0 0 |Link to Comment |View article
  • Five Questions on Gold for the House Banking Committee
    Great Article, Steve,

    I wish that Ron Paul had talked less and made Ben squirm more the other day. I agree with Mr. Powell. Understand, I'm not bashing Ron, but he kind of let Bernanke off the hook.

    I would have preferred it if he asked your questions.
    Nov 21 19:24 pm |Rating: 0 0 |Link to Comment |View article
  • The Gnomes of Zurich Will Have Their Revenge
    Great article, Justice. Thanks
    Nov 20 19:14 pm |Rating: 0 0 |Link to Comment |View article
  • U.S. Mint Makes Drastic Cuts to Its Collector Gold and Platinum Coin Offerings
    Far be it from me to defend anything the Treasury is doing, but...

    Paulson has the right to suspend the sale of the collectibles coins and coin sets (basically all the products mentioned in the article), and needs no justification to do so. So, he is not breaking the law by cutting production of those coins (and that includes the Platinum Eagles).

    The important thing to remember is he must produce gold and silver eagles (of the non-collectible variety) in quantities sufficient to meet public demand and has no discretionary authority to do otherwise. I was glad to see that KITCO is once again offering gold and silver eagles (just in the last week).

    The treasury could do a whole lot more to nurture public demand of precious metals. Like making gold and silver coins available for purchase at banks (because the mint's other coins go there), post offices (like they're doing in India) or through the treasurydirect.gov website. I'm not too fond of the idea that they only deliver to a very small network of dealers, but the law on this is not very specific.

    To me, the availability of the gold and silver production coins is the key issue, and as long as they are available, I won't be screaming for Hank's head. I'd also like to thank the SA community for tolerating my repeated rants on this one point, and to apologize for beating it to death.

    I'm going to post the link (hopefully for the last time), to the laws governing the Treasury and mint's coining. It's not fun reading, but worthwhile. By the way: the word "notwithstanding&... means "in spite of" in legalese.

    www.law.cornell.edu/us...
    Nov 16 14:05 pm |Rating: 0 0 |Link to Comment |View article
  • Attention Gold Bugs: Hyperinflation or Deflation?
    "It seems to me that the most overvalued asset in the world is either the 30 year treasury or gold."

    Yes Mark, one of them is the most overvalued asset in the world.
    Nov 14 00:44 am |Rating: 0 0 |Link to Comment |View article

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