Three home builders reported earnings since yesterday's close: Ryland (RYL), Meritage (MTH) and Beazer (BZH). RYL remains profitable, while MTH and BZH both reported unexpected losses.

As TerryC pointed out in the previous thread, existing homes numbers are due out at 10 a.m.

This sector remains weird and I wouldn't advise anyone to go long or short. My advice, of course, being what you pay for it.

re KRY, VZ Minister of MIBAM citing need for a gov't corp. to control gold production. Part of motivation is to ensure that small (informal) miners register their production, get fair market value for their production, and (surely) pay taxes. (per latin reuters)

http://lta.today.reuters.com/news/newsArticle.aspx?type=domesticNews&storyID=2007-01-24T232241Z_01_N24274984_RTRIDST_0_LATINOAMERICA-MINERIA-VENEZUELA-ORO-SOL.XML

I'd expect KRY's permit might well be held up, pending creation of this regulatory regime. I'd also expect that one day KRY could appear this govn't corporation's best client. There's also the risk that terms of KRY's agreement with the state might be subject to re-negotiation. However, it would mean more delay. This would track my experience in getting concessions and permits in VZ in the 90's.

HI Bill, so nice to hear you are up and about; the PM markets sure are happy to have you back on track!

Henry Blodget, former star analyst at ML during the Internet boom, blasts HBB, mutual funds, professional managers and Wall street as rip offs, just like what Bill has been telling us these past few years..

xxxxxx

Blodget, Banned Analyst, Touts New Manual, Laments E-Mails
By Philip Boroff

Jan. 25 (Bloomberg) -- Buyer beware, says Henry Blodget. What he calls the ``brokerage industrial complex'' may be hazardous to your financial health.

Few would know this subject better than Blodget, the 40- year-old former research analyst who became rich, famous and infamous during the Internet stock mania of the late 1990s and its aftermath. For his role in one of the securities industry's biggest scandals -- hyping research to bolster the fortunes of Merrill Lynch & Co.'s banking clients -- he was sued by regulators and private investors.

He settled the charges brought by the U.S. Securities and Exchange Commission, without admitting or denying liability, and agreed to pay a $2 million fine and ``disgorge'' another $2 million in gains. He also was barred from the securities industry.

Blodget's new book, ``The Wall Street Self-Defense Manual: A Consumer's Guide to Intelligent Investing,'' takes a tough look at his old profession.

The one-time guru to day traders and do-it-yourself investors has concluded that managing a portfolio of stocks with the aim of beating the market is beyond the abilities of most humans, professionals included. Stock analysis is generally ``a waste of time and money,'' he writes, adding that most mutual funds are ``a rip-off.'' And ``often with good intentions, Wall Street helps many small investors screw themselves.''

In an interview at Bloomberg's New York headquarters, Blodget, in a crew-neck blue sweater and dress pants, insisted he's not dumping on his former industry.

``I know a lot of people on Wall Street and they're not sleazebags,'' he said. ``That doesn't mean that most of the products they produce are the best products an individual can buy.''

Don't Ask

While effusive about his book, Blodget is less inclined to discuss much else, including his consulting company Cherry Hill Research. And he won't talk at all about his three years at Merrill Lynch, where he earned more than $15 million.

In the book, however, he concedes that he was ``disastrously wrong'' in not foreseeing the plunge in Internet stocks, beginning in March 2000. He laments that he ``wrote a lot of emotional, unprofessional e-mail, especially during the heat of the crash.''

The e-mails, made public by then New York Attorney General Eliot Spitzer, were the evidence regulators used against him. Some were overblown: In frustration, he had privately trashed companies he was publicly recommending after the stocks had tanked.

Euphemistic Ratings

But other e-mails revealed that Merrill's Internet stock research, which Blodget ran from 1999 to 2001, had become an uneasy ward of the investment banking department. Many of the buy-sell-hold recommendations were euphemisms at best, touting stocks of companies that were lucrative banking clients or potential clients.

``I'm sorry that I can't discuss the events in detail,'' he said this week. ``When you have a litigation situation, you can't make public comments. That still applies.''

As an investing primer, ``The Wall Street Self-Defense Manual'' doesn't break new ground. But Blodget borrows from (and duly credits) the best, making academic ideas accessible even for the mathematically challenged. His mentors include Warren Buffett, Yale University chief investor David Swensen and economist Burton Malkiel (``A Random Walk Down Wall Street'').

Blodget writes that trading, whether by individuals or mutual-fund managers, is often counterproductive. That's because it leads to losses or taxable gains -- both costly for long-term investors.

``Most people's best investment is their house,'' Blodget said. ``The reason is not because real estate is a fabulous investment. The stock market has been a better investment over 50 years. The reason is they do not trade. They hold it for 30 years. They don't have transaction costs or make timing mistakes.''

Lost Gain

As for mutual funds or private money managers, he writes that few consumers understand how much fees decimate returns.

``The real cost will not be the fees themselves, but the loss of the compounded value of the fees,'' he writes.

For example, without fees, $100,000 earning 10 percent a year grows to $11.7 million after 50 years. But subtract annual money-management fees of 1.5 percent and that $11.7 million shrinks to $5.6 million. The fees paid are $1.1 million; the additional lost gain from fees -- compounded over time -- is $5.1 million.

Subtracting Value

What's wrong with paying high fees for a top manager? Blodget argues that finding one is a tall order, because past performance is an unreliable indicator of future returns.

``The primary source of a mutual fund's return is the market, not the fund, and the average fund subtracts more value than it adds.''

Blodget cites a study showing that 86 percent of mutual funds lag Vanguard Group's Standard & Poor's 500 Index fund over 10 years and 78 percent lag over 20 years.

So what to do? He favors the passively managed index funds that are a specialty of Vanguard and TIAA-Cref. If one insists on an actively managed fund -- in which the manager buys and sells -- he recommends avoiding those sponsored by publicly traded companies: ``They must generate a profit to please impatient shareholders, and this comes out of your pocket.''

For individuals with a yen to trade themselves, he recommends allocating no more than 5 percent of a portfolio to a ``speculation/entertainment'' account.

Common Sense

Blodget's contribution to personal finance is combining breezy writing and rigorous research with common sense: ``D-I-V- E-R-S-I-F-Y,'' he writes. ``The mere sound of the word causes people to nod off.'' Still, he explains how adding international shares, emerging markets, Treasury bonds and other assets to a portfolio can reduce risk.

Had his securities-industry career continued, Blodget figures, he would have joined a hedge fund, one of the most lucrative areas of Wall Street. But getting barred from the business he grew up in has given him the perspective to see how it fails customers.

``You have to get a sense of the big picture,'' he says. ``You'll never see it from inside.''

(Philip Boroff is a writer for Bloomberg News who covered the Wall Street research probe. The opinions expressed are his own.)

To contact the writer on this story: Philip Boroff in New York at pboroff@bloomberg.net .

Nasty PM stocks takedown in past hour. Didn't see any news, but perhaps gold can make another run past 650 before end of day.

Just curious if anyone has any experience trading futures on Chicago One. The reason is I am thinking of buying futures and selling calls

Bloomberg 11:42 ET "Venezuela Finance minister says plants of GM, Ford 'Private property', says GM, Ford must guarantee well-being of workers"

...precious metals stocks finally hit, as all stocks in the world are getting hit a bit, due to the unwinding of the yen carry trade: last May the world had a vicious correction on the yen carry trade, it's too early right now to make the call that it's the same...

gold and silver and base metals supported early by china 10% growth rate news...inflation!!

Based on Colin Twigg's work and my own charting efforts, I had made note to myself to consider $650. as a key resistance level for gold. AU blew through that this morning only to close beneath it. Let's hope it can successfully test that key level tomorrow. Even if it fails to break through and close decisively above $650, as long as we don't get a break below $640, I am staying long.
Silver looks better to me. My key resistance levels have been 13.05, then 13.28, then 14.37.
Very encouraging that it closed at 13.29. Next stop 14.37? Dream on... but maybe.
My biggest concern is not where the price of PMs are going, I think Bill made it clear in this mornings post what to expect, but rather, in a general market sell off, do the mining shares as high beta paper get the usual 'bathwater' treatment.
Should I lock in the rather nice gains in PM shares here (in accounts where there would be no tax consequences, and no problems getting back in), or should I ride out any market moves in faith that the upcoming earnings announcements for the sector will blow the street away?
Not asking for advice, just sharing my dilemma.
Anyone else out there thinking the same?

Geez, how rude, forgot to say how happy I am that you are back in the game, Bill, kickin and punchin... had us all worried there for a time.
Because of the effect of the drugs, don't assume you are out of the woods just yet. As other readers have said, full recovery takes time.
Don't overdo it just because you are feeling a lot better.
Geez (have I turned into Margo of Fargo?) I sound like my mother...bless her soul.

I was wondering the same thing in terms of the "bathwater" effect, which is why I was looking at 1987 events. Some of the same issues existed then that would haven given gold strength, but the charts for newmont and barrick at least did not look good (couldn't find intermediate/juniors that far back in 1 minute of research :)

Tinyurl wouldn't fix this one up for me:

http://finance.yahoo.com/charts#chart1:symbol=^dji;range=19870701,19880404;compare=abx+nem;indicator=volumema(20)+rsi(7)+macd;charttype=candlestick;crosshair=on;logscale=on;source=undefined