The Glitter and the Gold

Wed, 2009/10/07 - 2:28pm | Your editor

Everything which glitters is not gold.

A rumor triggered the rise in gold prices to $1040/oz yesterday and it was nonsense. The gossip was that Middle Eastern countries wanted to price oil (black gold) in terms of yellow gold rather than the dollar. This has been bruited by Hugo Chavez but never taken seriously by OPEC.

The main reason is that there is not enough gold out there to finance more than a day or two of the oil trade.

Today the greenback has bounced back from some of the low levels reached after the Australian Central Bank started raising interest rates. This may feed into lower gold prices. The price of gold has tended to move inversely to the dollar in recent years. Read more »

Israel and Australia

Tue, 2009/10/06 - 1:50pm | Your editor

Don't worry, Israel. Australia stands besides you! The Reserve Bank of Australia today raised interest rates to 3.25% from 3%. It became the first OECD country to tighten monetary policy, although Israel did this in August.

Expect more short covering. Shorts had to cover yesterday because the Institute of Supply Management reported higher services orders, the first score showing expansion of demand (above 50) in a year. At 50.8, it was ahead of expectations.
Read more »


Mon, 2009/10/05 - 1:51pm | Your editor

How clever I was to study Portuguese now that Rio de Janeiro was designated for the Olympics in 2016! All those years wrestling with the complex grammar at the Fundação Gulbenkian can pay off with lots of trips. First I am going to sail from Manaus, on the River Amazon, over Christmas this year.

Then in 2012 I can go back to Rio for the 20th anniversary of the 1982 Earth Summit (which I attended). And In 2014 I get to go to the World Cup. (Soccer.)

The investment message for a Lusitanophone is probably mixed. We are already heavily overweight in Brazil as paid subscribers know. I am not sure that the increased exposure in the teens decade will really bring in more investor money. Yes, a US visa costs $130; yes, there are great opportunities for purse and camera snatchers and jewel thieves descending from the favelas to pickpocket sports and eco fans. And for lots of cops to protect the visitors. Read more »


Fri, 2009/10/02 - 1:53pm | Your editor

The latest IMF data should not lead people to throw shoes at its head, M. Dominique Strauss-Kahn, as a Turk did yesterday. The Fund says the developing world is powering the recovery and boosting its share of world output.

Logically, that means the IMF board should have more representation from the sources of world expansion. Emerging and developing countries are now expected to increase their output by 1.7% collectively this year, and by 5.1% next year. The biggest emerging Asia countries, India and China, are the leaders here. The latest figures are that China will grow 8.5% this year and 9%. next. India will grow 5.4% this year and 6.4% next year.

Meanwhile the advanced world will eke out a mere 1.3% growth rate in 2010 after shrinking 3.4% this year. Read more »

Diamonds are a girl's best friend

Thu, 2009/10/01 - 3:34pm | Your editor

A kiss on the hand may be quite Continental

A kiss may be grand but it won't pay the rental

So diamonds are a girl's best friend.

Such bad timing of the Cullinan miners, to discover a 507 karat egg-sized diamond in this market. Who are they going to sell it to?

The last old-style Maharani, Princess Devi, died recently. Maharajas are investing in making their palaces into 5-star hotels. Prince Charles wouldn't dare. Elizabeth Taylor is getting too old to shop for jewelry. Belinda Gates is not into bling. Nor is Mme. Buffett. Prince Jefri of Brunai had to give back the $15 bn he spent on cars and jets and art, and will not risk his brother's ire and another exile for a mere diamond, however spectacular.

The richest man in the world is Carlos Slim Helu, the Mexican magnate, according to Forbes. But I cannot imagine he will want to be more of a target for the country's kidnap culture than he already is. Middle Easterners cannot buy a diamond as big as the Ritz for one wife when they have three others. Read more »

Closed End Funds

Wed, 2009/09/30 - 1:29pm | Your editor


Normally at this time of year I start to worry about the tax consequences of new-buys of closed end funds. Your earnings distribution can trigger a short term gain. Now with so much tax-loss carryforwards from 2008 (the anno horribilis!) the odds are that there are enough losses in your fund to sop up the gains.

So you should only buy such funds at other times of the year, and sell them in the latter part of the year. But not this year. Read more »


Tue, 2009/09/29 - 3:18pm | Your editor

Queens reader MG added more insight into the debate over the origins of British intellectuals' support for a Jewish State in the 19th century. He thinks it is related to what young Britons were taught in school about philosophy and theology. Whether the classical texts were part of the canon determined British idenfication with their authors.

“It was perfectly normal for Lord Byron to fight for Greek Independence. Or for the British to finance Garibaldi's campaign to unify Italy.” And, he adds, “for British lords and writers to support a Jewish State in Palestine.”

If your ancient civilization had only marginal intellectual influence on British thinking – the Bhagavad Gita or the Book of the Dead or the Epic of Gilgamesh or the Koran – the British Empire would not support your right to a state of your own. Your country would be painted red on British maps, and Victoria was your empress. Read more »

Yom Kippur Notes

Fri, 2009/09/25 - 4:07pm | Your editor

    There will be no issue Monday, Yom Kippur. The Day of Atonement) is the holiest day of the Jewish calendar. when God seals our fate for the coming year. On Rosh Hashanah (New Year) it is written; on Yom Kippur it is sealed.
    On Yom Kippur 1973, Israelis noticed military vehicles driving in the streets and reserve soldiers were called from synagogues to duty. At 2 PM sirens sounded all over Israel. It was under attack!
    The Yom Kippur war came as a surprise, a joint attack against Israel by Egypt which crossed the cease-fire lines in the Sinai Peninsula, and by Syria which attacked along the Golan Heights. The thin Israeli defense lines were annihilated by massive Arab forces. Read more »

Apologies for being late

Thu, 2009/09/24 - 5:37pm | Your editor

     The Fed remains dovish on rates despite the optimism being expressed now by the FOMC about the economy's recovery. The benchmark US interest rate at 0-0.25% was confirmed yesterday.

     Because of faster recovery and higher inflation risks, other countries may join Israel in raising interest rates. In fact, Israel may itself go for a clean 1% vs the current level of 0.75% set Aug. 24. However, because of the running Jewish holidays, and the fact that the Israeli CB likes to do its rate changes on a Sunday, I do not expect anything to happen until Oct. 18. Read more »

Jobs and Blackberries and Boppy Pillows

Wed, 2009/09/23 - 7:02pm | Your editor

     Boppy pillows for breastfeeding mothers and Blackberries to keep in touch with the world have little in common.

     Yet the vendors of both products need more Americans to work for them. Maybe we need a WPA or CCC, two New Deal programs the Obama lot are not even thinking of copying, which put people to work in the 1930s, to create new jobs 80 years later.

     This is a suggestion of a friend, IF, an 80-something-year-old life-time Liberal Democrat; she even lives on Manhattan's West Side. I live in the Silk Stocking district by the East River, mainly Liberal Republican. But IF has a point. Read more »