Bill Cara: Part 2 of "When Atlas Shrugged", Tues., Sept. 12, 2006, 7:25 AM

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September 12, 2006

Part 2 of "When Atlas Shrugged", Tues., Sept. 12, 2006, 7:25 AM

Yesterday I published Prof. Antal Fekete's paper "When Atlas Shrugged part 1", and contacted the author to obtain part 2. Here is part 2 subtitled "Gibson's Paradox and the gold price". Thank you, Professor.

Without further explanation, I decided to remove Barrick Gold from the Cara 100 Global Best Companies list. I'll take time today before replacing it with another minerals resource company " one that has no hedge book.

I did address this point back on May 4 and decided at the time to leave Barrick in the Cara 100 despite the hedge book. I did admit in the first article that day that I could not find any suitable financial reference to the Barrick hedge book in the company's EDGAR filing. Professor Fekete addresses that point, and leaves me feeling uneasy about the methods Barrick may have used to become the world's largest gold operator so quickly.

But in these two articles, note my concern at the very top of the gold market in early May.

I was concerned that the market was far too heated, and that Peter Munk's ROBTV interview, timed to co-ordinate with the global media splash about Barrick's de-hedging, was fueling that heat.

You might even say " if you re-read the precise language I used " that this was my premier case study for students of the market in the nasty practice of how the gnomes use the media to deceive the masses.

There is something very powerful about logging observations and opinions in a trading blog because blogs provide an independent record we can return to and make judgements on.

As I say, if you are not in the (board)room, you are out of the deal (ie, in the dark). As outsiders to what is really going on behind the scenes in capital markets, all we can do is record our suspicions and let others challenge them. But if our group has 100,000 set of eyes, or a million or more, then somebody, somewhere, is likely to know what's going on. It's my job to get them to speak up.

Society benefits when we communicate openly. It is up to us to level the playing field. Vested interests are always going to be â€˜getting theirs', so We The People need to be aware of what, when, how; And We The Bloggers need to question everything.

In capital markets, as in life, sunlight is a powerful force.

Barrick Gold Corp [GICS 15, removed from Cara 100 Sept 12, 2006]
(ABX: Yahoo Finance file)
(ABX: StockChart chart)
(ABX: Investertech chart)
(ABX: ADVFN Financial Data)
(ABX: ADVFN Financial Data)

Posted by Posted by Bill Cara on September 12, 2006 07:25:55 AM | Category: Gold

Discourse

Which is it?

THIS? -
"IMF warns of global growth danger
The International Monetary Fund (IMF) has warned that a global slowdown is looking more likely because of high oil prices and a cooler US housing market.

http://news.bbc.co.uk/2/hi/business/5337770.stm

Posted by: karzy at September 12, 2006 07:22 AM"

OR THIS -
"IMF Is Generally Upbeat on World Economy

http://www.baltimoresun.com/business/nationworld/ats-ap_business14sep11,0,7108185.story?coll=sns-business-headlines

Posted by: oratier at September 12, 2006 07:49 AM

Bill - your decision to drop ABX from the Cara 100 makes sense to me.

Also, did you see the CNBC interview with the GM of Yahoo Finance this morning? Apparently, they are joining with Seeking Alpha and will have a financial blog on Yahoo Finance. Of course, the CNBC gang focused on the negative aspects of chat rooms including "pump and dump", "false information", etc. - exactly what they allow their "experts" to do on their show. The CNBC gang was completely transparent, I was ticked off, to say the least.

Hope alls well
g034

Posted by: g034 at September 12, 2006 8:07 AM [link]

When it comes to the investment markets... the details the IMF (or humungous bank and broker) offer in their reports is valuable data to consider, but it has been hazardous to your wealth to accept their conclusions. For example:

"I.M.F. Reports World Growth Accelerating After Setbacks- International Monetary Fund says world economy is growing at its fastest pace in more than decade, and should expand at 4.2 percent rate in 2000, led by persistently robust growth in United States; forecast is in IMF's latest World Economic Outlook, which it issues twice yearly; fund warns that rosy outlook could be clouded by several factors, including lopsided growth among countries, currencies that are at odds with one another and high stock prices in some countries..."

April 13, 2000, Thursday
By JOSEPH KAHN (NYT); Foreign Desk
Late Edition - Final, Section A, Page 9, Column 1

I'd say the outlook from most sources is 'clouded' at turning points.

Posted by: stockman at September 12, 2006 8:22 AM [link]