SEC goes after Goldman from Marketplace on Vimeo.

There’s been a lot of misinformation spread about gold via the internet in the recent two weeks. Eric King of King World News seems to have stepped way over the line by presenting very dubious, and I would say, blatantly misleading information about the recent CFTC hearings. I have great respect for Mr. King for his efforts in trying to bring on guests that think clearly and don’t give you the bull that you can read in and see in mainstream financial media, but I can’t agree with everything that he and his guests say. Up to this point the amount of biased information coming from guests on his shows has been somewhat limited to a few outliers, but the last two weeks have been all about gold bugs (the paranoid folk who hate the recovery, love inflation and don’t want anything to do with real facts as they relate to financial markets).

I think that Mr. King puts too much trust into his gold bug guests, especially the ones from GATA. In fact I think they’ve got some kind of agenda on their own – they’ve been on this for years and they don’t seem to be running out of money. No sensible person would devote his life and career to fighting the gold market unless there was something in it for him or the people who are funding this. The only possible explanation for GATA’s involvement is their own financial gain, but I don’t understand the gold bugs with accounts in the mere thousands, there’s way too little for them in it if they somehow would be able to drive the price up a couple hundred bucks by tweeting and linking they gold bug nonsense. It seems that people are willing to lose every bit of skepticism they have for just a few hundred bucks (tech bubble/subprime bubble ring a bell?).

Here are the original interviews that are the basis of recent rumors, in the order of publication (don’t forget your inner skeptic behind when listening to these):
King World News interview with Andrew Maguire & Adrian Douglas
King World News interview with Gold Anti-Trust Action Committee (GATA)
King World News interview with Harvey Organ, Lenny Organ, Adrian Douglas

And here is an alternative, non gold bug view of the matter from two professionals:
Financial Sense Newshour 1st hour interview with Jeff Christian and Nick Barisheff, the show begins with the usual introduction (after all, it’s a weekly podcast), the interviews with gold experts start off at the 26th minute.

It may offer comfort to think that GATA is right when you are holding a long position in gold or gold related assets but at the end of the day, you have to keep a clear, skeptical mind. Don’t trust everything just because it supports your position. The gold bug bandwagon effect may turn out to have a net positive effect on your portfolio, but believing every conspiracy story out there will most likely have a negative effect on your portfolio in the long run. Banks and fund managers don’t make money by relying on David Icke or Dan Brown for the latest market insight, they make money by making rational decision based on trustworthy information gleaned from trustworthy, verifiable sources.

Disclosure: Long SVM, SLW. Long physical gold and silver based on fundamentals (I do not hold positions based on alleged manipulation stories, nor should any other prudent investor).

Some time ago I placed an order at my local book supplier for Peter Lynch’s One Up on Wall Street. Since it had pretty good reviews on Amazon and it was also on Jim Puplava’s recommended reading list, I thought it was a sure bet. Every now and then, I order a book that has relatively good reviews but in the end turns out to be a waste of time and money. Since this book was so high in almost every list, I didn’t have doubts about it. Boy, how wrong I was. The book came in today, everything looked fine until I opened the package and discovered that the book was made for little kids, not adults – it was smaller than a pack of cigarettes. What kind of a cruel joke is this? An investment book that you can read in five minutes? What the f***? This isn’t even funny. Click on the thumbnail for a larger view; and yes, the paper clip is of regular size; the numbers of the ruler run in cm (2,5 cm =1 inch).

During the past couple of months I’ve been really busy studying and going through my Statistics 101 course notes to figure out how to make all the things taught in class work for the benefit of my portfolio. So far it has been an interesting journey. Unfortunately, there are only 24 hours in a day and thus I’ve been unable to find the time to update my blog. Much has happened since I last posted. Among many other things, visible cracks are beginning to appear in the bond market with news out that the US Treasury has been having trouble selling debt. Since time is of the essence for both you and me, I won’t bother going into the fundamental details of why the Treasury is having trouble, especially as the economic and financial problems of the US are well-known anyway. Nonetheless, I would like to present to you a chart of where interest rates are going. What is the effect of higher interest rates? Lower earnings, weak or no housing recovery, higher debt payments for both the public and private sector even bankruptcies. All in all, even though the US economy is showing signs of a robust recovery, the future doesn’t look too bright. Throw growing government expenses, higher taxes, rising demand combined with a flat-lining supply of oil into the mix and you have the ingredients for another economic meltdown in the US at or around 2012-2014. Whatever the US does right now better be geared toward preparing for the future. There are some signs of this happening, but unfortunately, only on the margin.

Repo 105, the accounting gimmick used by Lehman Brothers before it collapsed on itself, has been making the headlines as of late. But what is it and how did it help to ‘cleanse’ Lehman’s balance sheet? Well, this video should help you understand. If you haven’t fulfilled your Lehman appetite, then this list of links by Barry Ritholtz should do the trick.