Tuesday, November 10, 2009

Betting Against Roubini Is As Good As Gold

There can't be too many people left who wait to see what Nouriel Roubini has to say until they place their market bets - unless it's to bet against Roubini's view.  And it's a good thing for Nouriel that he gets paid as a university  professor and not as a market speculator - although, if I were one of his student's I'd be pissed about having to pay for his professorial garbage.  As per The Wall Street Cheat Sheet:
"If you followed his bearish advice in 2005, you would have either missed the entire rally through 2007, or you would have lost money shorting the market. If you would have followed his advice starting on March 9, 2009, you would have lost a ton of money. We should also note that Roubini said Oil would stay below $40 a barrel for all of 2009"
Here's the link, which has a nice chart of Roubini's consistently wrong market calls:  LINK

For public record, I would like to note that Roubini recently has decreed, several times, that gold is going to go lower.  I'm not sure you'll find a better bet in the history of the universe than taking the other side of that call.

My view is that Roubini has been working hard for an appointment to Obama's Council of Economic Advisors.  Quite frankly, I'm surprised Obama has not given Nouriel his wish, because Nouriel's dismal incompetence as an economist would make him a perfect fit with all the other clowns in Obama's administration.


  1. "...Nouriel's dismal incompetence as an economist would make him a perfect fit with all the other clowns in Obama's administration."


  2. Jess, I'm glad you liked that comment. I guess I could have added something about Larry Summers being unethical and corrupt...

  3. I am enjoying the dismantling of Count Roubini, yet another dodgy economist wannabe D.C. insider.

  4. Yeah, but gold sucks. As many gold bug hosers will soon find out.

  5. @Metuselah...

    Thank you. That was a very articulate, cogent argument explaining why gold is overvalued. In fact, I wasn't sure how to think about gold until I read your explanation.

    I certainly hope you back up your conviction with big short positions in GLD and GDX.

  6. I see gold as a completely useless metal, and nothing other than a speculation vehicle. Sorry that this isn't the argument you hoped for, Dave, but it is a statement of fact. Btw, I would never put my money in the gold market, short or long, as I only put my money in positive investments. Investments that I believe would benefit society. And gold is as far away from that universe as can be.

  7. Actually, what you see as a "useless" metal has been used as civilization's primary currency for the better part of 5000 years. At an intellectual level, it can be effectively argued that most of civilaztions economic - and even socialogical - problems would be avoided if the world had to abide by a gold standard.

    There is, without question, no possible way for global banks and Governments to have amassed the 100's of trillions in derivatives and debt if the world abided by a gold standard. IMPOSSIBLE.

    Please see Alan Greenspan's "Gold and Economic Freedom" essay written by him in 1966.

    The most positive event possible for the world would be for reinstatement of gold/silver as the basis for all currencies.

    There are many reasons why gold has been used for so long and why it works. Anyone interested in learning about those reasons can use google to as a research tool.

  8. "Actually, what you see as a "useless" metal has been used as civilization's primary currency for the better part of 5000 years."

    Not true. The primary currency was grain. The Romans used gold and silver stolen from Jewish and Egyptian temples as booty for their soldiers, and that's what gold always was, a shiny metal to bamboozle the barbarous mind of idiots serving tyrants and empires.

  9. Actually, gold has been the primary currency for the better part of 5000 years. You have presented quite the revisionist summary of history there.

    The world can never barter and trade based on depleting and consumable commodities like grain, oil etc. That is why gold is so remarkably perfect for a global currency anchor. Nearly every single ounce of gold ever mined is still in existence, above ground (a lot of it probably held by the Rothschild family). It is indestructable. Nearly impossible to counterfit. Has no counterparty obligations. Etc etc etc.


  10. Appears KRY is a sore subject here. Sorry Dave, I am certain your Precious Metals Fund is batting 1000.

  11. You're mistaken. If you would've bothered to google the matter, you would've quickly learned the truth of the matter. And the nonsense about the Rothschild family, is just that, nonsense.

  12. @Anonymous. Whoever the hell you are. You must feel like a real man hiding behind "anonymous." At least I let people post comments freely on my blog. A lot of blogs do not.

    As for KRY, I never pumped and dumped KRY. I used to trade it actively several years ago. Some of my trades made money, some of my trades did not. Overall, I made money on KRY. I stopped trading it altogether about 3 years ago, when I decided that Chavez was going to ultimately take the mine over completely. The funniest thing is, my father still owns KRY, with a basis of around $3, and refuses to sell it.

    Robert Fung, the CEO of KRY, just agreed to head up a special advisory board to Silver Dragon. He is going to help it do what it needs to do to list on the TSX, at which point he will transition into being the Chairman of SDRG. The ultimate goal is to achieve a listing on the Hong Kong exchange. Fung is a very well respected mining industry professional in Canada and China.

  13. Dave don't bother with these posters; the internet is teeming with trolls these days... Also don't waste u'r time with Nouriel he only says what his handlers want him to... Keep up the great work!

  14. [I see gold as a completely useless metal]
    This statement shows what an asinine fool you really are... What do you think that computer hardware you are using to spout your half-brained comments is made from?

  15. thanks for the feedback anliu - normally don't let myself get reeled by the internet freaks, but the market was slow and I was bored - LOL.

  16. Funny you should mention SDRG, you were suggesting it as well @ $2.

  17. Anonymoous. You are a spineless monkey hiding behind "Anonymous." Actually I was not suggesting SDRG at $2. I was suggesting SDRG at $1 and own half of my position at $1. My average cost is 60 cents. My father owns SDRG with an average cost around 80 cents.

    I am currently recommending SDRG to anyone who wants to make a lot of money on SDRG.

    So what's your point, you sackless asshole? Is it my fault the junior mining stock market went thru its own Hiroshima over the last 2 years? Is it my fault gold was smashed from $1030 down to $700 in 2008? Most junior mining stocks were obliterated 90%. Is that my fault?

    If you don't have any value-added commentary to add in this space, I would request that you take your useless drivel and go elsewhere. Otherwise I'm going to remove your comments.

  18. CNBC yammering on about Gold all day is not bullish for it. Looking for a top prior to expiry and expecting SDRG to tap 12 to 15 cents again very soon. Will buy it again and again, but suggesting it is a buy here is questionable at best.

  19. CNBC is irrelevant. There's too many people who are worrying about whether or not gold is being talked about by too many people for any kind of correction to be imminent.

    The time to start debating a top in the market is when the cash 4 gold ads turn into gold for cash ads - when gold is well into the mid-5 digits.

    Back in 1980, there were lines at coin shops that went around the block of hoi polloi waiting for the shop to open so they could buy some gold coins. That's when you start selling.

    We're a long way from that.

  20. CNBC is irrelevant? In my opinion they are an excellent indicator for a number of reasons. Buying Gold at this time looks to be a suckers play. Physical demand is down significantly around the globe and the market has been primarily futures driven. Which leads me to believe it is a suckers rally at this point in time. Silver Dragon is a great outfit with a promising future, but its price is way out of line and a correction would is not only welcome but should be expected. I'm with you on its prospects Dave, but better entry is coming, again, in my opinion. Predicting future prices is a fools game in this controlled, command market where keystrokes determine our financial fate. Gold in hand is always best.

  21. "Physical demand is down significantly" - where do you get your information on that? I try to read everything I can about the situation and I don't know anyone who would say that physical demand is down. In fact, Central Banks have turned from being net sellers to net buyers. Not only does that increase demand, it reduces market supply. If you measure physical demand by jewelry sales at shopping malls in the U.S., that only captures a small portion of global demand.

    Premiums in India are still very supportive of gold-buying even with gold over $1100. I have never seen premiums in Vietnam as high as they are right now. Viet Nam a relatively important gold buyer even though most are unaware of that fact. In fact, the Viet Namese Govt has now lifted a ban on gold importation. Sri Lanka is now interested in buying part of the IMF gold. And then there's China...what's most interesting about the latest record prices in gold is that it has not been accompanied by appearance of large quantities of scrap gold flooding the market, as happened when gold tipped over $1000 briefly last winter.

    Global demand for real gold, as opposed to the fool's gold that GLD is, has actually not only been rapidly increasing, but so has what I call "verfified custody." The best example of this when China announced that it was going to move all of its gold being safe-kept in London and other cities to a new depository in Hong Kong.

    As for SDRG, everyone is entitled to their own opinion, but I would suggest that you call the company and ask to speak to Marc Hazout, the CEO/Chairman. I know he is spending a lot time in China and Mexico, but he will return your call. There is a lot going on at SDRG that he can discuss but has not been released in official press releases yet.

    SDRG is by far my largest personal asset.

  22. In case anyone is following this comment thread, I would point out this article on the supply of gold: