Some Mother’s Day Links

So who was responsible for the sell-off in gold over the past few weeks? A clue?… The Bank of Spain announced yesterday on their website that they have sold 2.6 million ounces of gold into the market over the past two months, giving no update on if those sales were expected to continue or not. This figure means that Spain has sold off 20%(!) of their total gold holdings.

Former Federal Reserve chairman Alan Greenspan issued a fresh warning that the world’s largest economy could be headed into recession. Here’s what the people thought about that..

Is the US heading for recession?
67% said Yes
33% said No

May we be seeing more of this in the future? “UBS Closes High-Profile Hedge Fund“.

Kenneth Lewis, CEO of Bank of America was asked “Are we in a Credit Bubble?” He reportedly replied that we’re close to a bubble, that any deals BoA turns down for reasons of bad risk are quickly written by another bank, that there are too many immature players in the market, that every banker believes that by the magic of securitization a benign “this time is different” outcome for credit excesses is assured, but that we will all soon be lamenting a past era of silly lending behavior.

China’s P/E Ratio is Now About 50 Bubble?

“[Running cars on fuel derived from corn] is about the dumbest idea I’ve ever seen.” – Charlie Munger at the recent Berkshire Hathaway Shareholders Meeting

“It is of the utmost importance to realize this: given the actual facts which it was then possible for either businessman or economists to observe, those diagnoses-or even the prognosis that, with the existing structure of debt, those facts plus a drastic fall in price level would cause major trouble but that nothing else would-were not simply wrong. What nobody saw, though some people may have felt it, was that those fundamental data from which diagnoses and prognoses were made, were themselves in a state of flux and that they would be swamped by the torrents of a process of readjustment corresponding in magnitude to the extent of the industrial revolution of the preceding 30 years. People, for the most part, stood their ground firmly. But that ground itself was about to give way.” – Joseph A. Schumpeter, Business Cycles, 1939


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