"The more investors that want to buy shares of GLD, the more bars of physical gold the fund has to buy."
I really don't know about any of this. I've always found GLD's holdings to be questionable at best. Just how reliable / accurate are GLD's holding reports? They so famously claim that they are 100% backed but obstinately refuse to give investors access to any of the 'claimed' gold. Why? There are many profitable gold selling businesses in the world. GLD could charge exorbitant fees for delivery of said gold but they don't for some strange reason. It is like saying no to free money.
The frequently referenced GLD subcustodian audit loophole makes me question this fund even more. What guarantees do we have that they have not leased the gold from someone else? i.e. HSBC. How many claims are there on the gold aka hypothecation? GLD's structure seems to be deliberately vague and intentionally flawed. GLD's custodian, HSBC, with their long history of fraud certainly do not inspire confidence either.
For anyone interested but have not heard about CNBC's Bob Pisani's visit to GLD's gold vault, I recommend checking it out. His visit is documented in a segment called Gold Rush: The Mother Lode. This entire segment was organized by GLD's management to prove that their gold actually exists but the gold bar held up by Mr. Pisani displayed a serial of ZJ6752. This serial did not show up on the latest bar list during that time. Cheviot Asset Management’s Ned Naylor-Leyland discovered that this "GLD" bar actually belonged to ETF Securities.
John, thank you for this indepth look into FB. My primary concern with FB is its user metrics. According to recent numbers, FB's user growth has slowed significantly. This is a major sign of weakness going forward. I suspect this is the result of an accumulation of the more recent events that FB had to deal with. I'm also not impressed with FB's management decisions on content handling.
Thank you Tsvetana Paraskova for this highly informative piece. I have to wonder about the scenarios occurring if the goal as you mentioned is not met. "The fine print, of course, is - we wanted the price of oil higher and stable, so that we could plug the gaps in our oil-revenue-dependent budgets." The ramp up in US oil production has essentially offset the shortfall created by the OPEC production deals. There is still much more room for US oil production to climb. This will surely jeopardize any deal extensions along with any future production deals as these deals will not have the desired results.
"The chart of the SPDR Gold Trust (NYSE: GLD), the world’s biggest physical gold ETF"
As someone who spent considerable time doing his due diligence into this fund, I find this statement to be questionable at best. Paper gold GLD claims to be fully backed by physical gold bullion but yet it refuses to give retail investors the right to redeem for any of these ‘claimed’ gold bullion. This fact alone would mean GLD shares are nothing more than paper at the end of the day. Furthermore, GLD’s prospectus is chalk full of weasel clauses and legal loopholes that allows the fund to get away without the full physical gold backing. One good example of this is the clause that states GLD has no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this audit loophole.
For anyone interested but have not heard about CNBC's Bob Pisani's visit to GLD's gold vault, I recommend checking it out. His visit is documented in a segment called Gold Rush: The Mother Lode. This entire segment was organized by GLD's management to prove that their gold actually exists but the gold bar held up by Mr. Pisani displayed a serial of ZJ6752. This serial did not show up on the latest bar list during that time. Cheviot Asset Management’s Ned Naylor-Leyland discovered that this "GLD" bar actually belonged to ETF Securities.
Thank you for your insights Kent. Also some food for thought that I don't often hear about in the oil sector. What are the chances of the ramp up in US production causing countries agreeing to the OPEC deals to turn back on the deals? Russia in particular has a history of turning back on these kinds of deals with OPEC. I also believe the rise in US production will negatively impact the renewal of OPEC's production deals.
Thank you for this very well written and informative piece Fred. I strongly agree with your analysis on GOOG and its entry into the cloud business. GOOG has continually showed they know what they are doing as they successfully carve out market shares for themselves in every segment they choose. I'm inclined to believe in their ability to capture significant market share in the cloud business despite how entrenched AMZN's position is. GOOG's reputation alone has brought in partnerships for the enterprise cloud business and I see even more coming in the future. If there was one challenger to AMZN's cloud business, it would have to be GOOG.
"Anyway, gold bugs regained some optimism. For example, this week the SPDR Gold Trust (GLD) reported a high inflow of gold into its vaults (380.9 thousand ounces until yesterday)."
Once again Simple Digressions, you're being very misleading. You frequently claim that GLD's holdings are a reliable indicator yet in January of this year, there was a 7.5% rise in the price of the GLD, which means people have been buying. Yet, since gold bottomed, GLD's holdings have fallen another 4.4%. There is many more similar instances of this if you want to go further. GLD has continually shown itself to be completely useless and irrelevant as an indicator.
I'm also getting the impression that you do not understand GLD's structure very well. Do you understand that if people are selling GLD, draw-downs would be seen, and if people are buying GLD, builds would be seen? This means GLD would be a lagging indicator but the above January data (along with a number of other data sets) show that GLD holdings is not reliable for even the role of a lagging indicator.
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"The more investors that want to buy shares of GLD, the more bars of physical gold the fund has to buy."
I really don't know about any of this. I've always found GLD's holdings to be questionable at best. Just how reliable / accurate are GLD's holding reports? They so famously claim that they are 100% backed but obstinately refuse to give investors access to any of the 'claimed' gold. Why? There are many profitable gold selling businesses in the world. GLD could charge exorbitant fees for delivery of said gold but they don't for some strange reason. It is like saying no to free money.
The frequently referenced GLD subcustodian audit loophole makes me question this fund even more. What guarantees do we have that they have not leased the gold from someone else? i.e. HSBC. How many claims are there on the gold aka hypothecation? GLD's structure seems to be deliberately vague and intentionally flawed. GLD's custodian, HSBC, with their long history of fraud certainly do not inspire confidence either.
For anyone interested but have not heard about CNBC's Bob Pisani's visit to GLD's gold vault, I recommend checking it out. His visit is documented in a segment called Gold Rush: The Mother Lode. This entire segment was organized by GLD's management to prove that their gold actually exists but the gold bar held up by Mr. Pisani displayed a serial of ZJ6752. This serial did not show up on the latest bar list during that time. Cheviot Asset Management’s Ned Naylor-Leyland discovered that this "GLD" bar actually belonged to ETF Securities.
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John, thank you for this indepth look into FB. My primary concern with FB is its user metrics. According to recent numbers, FB's user growth has slowed significantly. This is a major sign of weakness going forward. I suspect this is the result of an accumulation of the more recent events that FB had to deal with. I'm also not impressed with FB's management decisions on content handling.
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It is certainly difficult to take their words at face value these days. Reading between the lines is important.
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Thank you for your analysis Lance, this has been very informative.
An OPEC Deal Extension Isn’t As Simple As It Sounds
Thank you Tsvetana Paraskova for this highly informative piece. I have to wonder about the scenarios occurring if the goal as you mentioned is not met. "The fine print, of course, is - we wanted the price of oil higher and stable, so that we could plug the gaps in our oil-revenue-dependent budgets." The ramp up in US oil production has essentially offset the shortfall created by the OPEC production deals. There is still much more room for US oil production to climb. This will surely jeopardize any deal extensions along with any future production deals as these deals will not have the desired results.
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"The chart of the SPDR Gold Trust (NYSE: GLD), the world’s biggest physical gold ETF"
As someone who spent considerable time doing his due diligence into this fund, I find this statement to be questionable at best. Paper gold GLD claims to be fully backed by physical gold bullion but yet it refuses to give retail investors the right to redeem for any of these ‘claimed’ gold bullion. This fact alone would mean GLD shares are nothing more than paper at the end of the day. Furthermore, GLD’s prospectus is chalk full of weasel clauses and legal loopholes that allows the fund to get away without the full physical gold backing. One good example of this is the clause that states GLD has no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this audit loophole.
For anyone interested but have not heard about CNBC's Bob Pisani's visit to GLD's gold vault, I recommend checking it out. His visit is documented in a segment called Gold Rush: The Mother Lode. This entire segment was organized by GLD's management to prove that their gold actually exists but the gold bar held up by Mr. Pisani displayed a serial of ZJ6752. This serial did not show up on the latest bar list during that time. Cheviot Asset Management’s Ned Naylor-Leyland discovered that this "GLD" bar actually belonged to ETF Securities.
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Thank you for your insights Kent. Also some food for thought that I don't often hear about in the oil sector. What are the chances of the ramp up in US production causing countries agreeing to the OPEC deals to turn back on the deals? Russia in particular has a history of turning back on these kinds of deals with OPEC. I also believe the rise in US production will negatively impact the renewal of OPEC's production deals.
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Thank you for this very well written and informative piece Fred. I strongly agree with your analysis on GOOG and its entry into the cloud business. GOOG has continually showed they know what they are doing as they successfully carve out market shares for themselves in every segment they choose. I'm inclined to believe in their ability to capture significant market share in the cloud business despite how entrenched AMZN's position is. GOOG's reputation alone has brought in partnerships for the enterprise cloud business and I see even more coming in the future. If there was one challenger to AMZN's cloud business, it would have to be GOOG.
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"Anyway, gold bugs regained some optimism. For example, this week the SPDR Gold Trust (GLD) reported a high inflow of gold into its vaults (380.9 thousand ounces until yesterday)."
Once again Simple Digressions, you're being very misleading. You frequently claim that GLD's holdings are a reliable indicator yet in January of this year, there was a 7.5% rise in the price of the GLD, which means people have been buying. Yet, since gold bottomed, GLD's holdings have fallen another 4.4%. There is many more similar instances of this if you want to go further. GLD has continually shown itself to be completely useless and irrelevant as an indicator.
I'm also getting the impression that you do not understand GLD's structure very well. Do you understand that if people are selling GLD, draw-downs would be seen, and if people are buying GLD, builds would be seen? This means GLD would be a lagging indicator but the above January data (along with a number of other data sets) show that GLD holdings is not reliable for even the role of a lagging indicator.
Agriculture Markets Report - Monday, Mar. 13
As someone with limited exposure to the agriculture markets but looking to expand upon this, your review has been very insightful. Thanks Ira.