Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today, we look at investing in the recently discontinued civilian production Colt ARs, including the 6920 series carbines. (See the Tangibles Investing section.)
Precious Metals:
AG Thorson, over at Gold-Eagle: Gold Price Forecast – Preparing For An Autumn Low
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Silver price to hit $20 in 8 weeks, says expert who correctly called $1,500 gold
Economy & Finance:
At Zero Hedge: A Clueless New York Fed Is Examining Why Banks With Excess Cash Failed To Halt Repo Panic. Here is how the article starts out:
“When it comes to occasional (or chronic) dollar shortages, and the plumbing of the overnight lending market, which as everyone knows suffered a spectacular heart attack early this week when the overnight repo rate soared to 10%, the New York Fed and its open markets desk, is the authority on any potential plumbing blockages. Yet it now appears that the most important regional Fed when it comes to maintaining market stability, is just as clueless as the rest of us as to why the repo market froze up. sending funding rates to never before seen highs.
In an interview with the FT, New York Fed president John Williams, who earlier this year unexpectedly fired not only the head of the NY Fed’s markets desk, Simon Potter, arguably the most important trader in the world, manning the world’s most important trading desk but also the second most important person at the NY Fed’s “Plunge Protection Team”, the head of the Financial Services Group, Richard Dzina, said that the New York Fed is examining “why banks with excess cash failed to lend to the overnight money market, following a week that revealed cracks in the US’s financial plumbing.””
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Reader G.P. spotted this from the Perma-Bulls at CNBC: The next recession could crush many with credit card debt
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And Wolf Street reports: Debt-Wracked Chinese Companies Dump US & Other Foreign Assets, Become Net Sellers Overseas for First Time
Commodities:
US To Supply More Than Half Of Global Gas By 2035
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U.S. natgas futures steady on unchanged weather, demand forecasts
Derivatives:
David Stockman: Interest Rate Derivatives Trading Explodes to $6.5 Trillion/Day
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CDS fix seeks support for January lift-off
Tangibles Investing:
Colt has announced that they are exiting the civilian long gun market, reportedly to concentrate on military and police contracts as well as handgun production. Apparently Colt’s managers have a death wish, and desire to go back into bankruptcy. In the short term I predict that Colt will become the pariahs of the civilian shooting world. But in the long run, after they’ve gone bankrupt and shut their doors, it is likely that Colt-made guns of all descriptions will still be quite collectible and increasingly valuable. After all, they are still quite well-made guns–despite the corporate management’s political posturing. I now recommend buying Colts only on the secondary market. That way, you won’t be rewarding Colt’s dimwitted management kowtowing to the tirades of The Man Who Would Be Master Beto. He’s a legend in his own mind. I suggest that you buy some used (but still “like new in box” LNIB) Colt 6920 carbines, while they are still somewhat affordable. I’ve seen that they’ve already jumped up by $1,000 or more on GunBroker.com. So I’m glad that I recommended them when I did, in July of this year. Hopefully some of you bought one or two of them, at that time.
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Anyone living in Wisconsin who is looking for a quantity of Hardigg and Miltope transit cases should jump on this bargain. Available face to face only, you haul ’em.
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Reader H.L. suggested this: Free collectibles you might have at home worth big money
Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. Please see our Provisos page for our detailed disclaimers.
News Tips:
Please send your economics and investing news tips to JWR. (Either via e-mail of via our Contact form.) These are often especially relevant, because they come from folks who closely watch specific markets. If you spot any news that would be of interest to SurvivalBlog readers, then please send it in. News from local news outlets that is missed by the news wire services is especially appreciated. And it need not be just about commodities and precious metals. Thanks!
RE: The Last Resort
We are all aware of the soap box. They took that away. Then they took away the voting box. And sadly a photo appears, and it reminds us of the last resort, the cartridge box.
Re: The Clueless Fed
Yep, the Fed is dead, if confidence dead, and it is dying. There is no mark to market, no price discovery, no valuation that backs the assets that are in the plumbing, that are only turds in a sewage system. The only thing that keeps it flowing is toilets flushing with the confident that the plumbing will not back up. But what happens if it backs up? Who wants those turds?
Many investors make use of S&P500 index mutual funds. These have been excellent choices over the years, as the US stock market has gone up. Their low internal cost provides little “drag,” too. Investors can own a broad cross-section of the largest companies in the U.S. with one purchase. Their very success is now making them dangerous, IMHO.
There is so much money in these vehicles — a significant percentage of the entire market — that investors should be concerned. In a crisis, when everyone’s trying to sell their fund shares, there could be what is called a “liquidity” problem. This means — if there are no buyers out there, your investment, at least temporarily, has no value.
Mutual funds keep cash on hand for normal redemptions, so they don’t have to always sell shares of the stocks they own. In a crisis, though, when many many people want to sell, they’d blow through that cash very quickly and have to start selling the stocks they own. The question is: to whom? If there are no willing buyers, the funds might not be able to sell the stocks and might have to suspend redemptions for a while — meaning that eventual sales would have to take place at extremely low prices in the depth of the crisis. Think of it this way — the music’s still playing, but if you want to keep dancing, you’ve got to dance near the door.
You may have capital gains, and it’s worth paying the tax now — would you rather pay 15-20% of your gain or 80% of your entire investment? Your choice. My suggestion is to get out of index funds now and limit your stock investments to individual stocks that can be sold quickly. And, as I’ve said before, use out of the market trailing stops (www.tradestops.com) on everything.
You could simply put a trailing stop on your index 500 fund, but you’d have to be willing to pull the trigger immediately to get out the exit before the rush hits.
I’d sure love to have some of those transit cases. But he seems to be selling them as an all or nothing proposition. Might be good for someone with lots of time and storage space who wants to haul a couple dozen to sell at gun shows for the next year or so.
Colts so called announcement is just as you say it is, political. Political grand standing to put a feather in their cap and give gun grabbers a flag to wave and say “we’re winning the war on gun violence”. Plus, the decision to stop selling to the civilian market probably doesn’t hurt them anyway with all of the government contracts they have. As for the civilian market, I would say that a majority of Americans wouldn’t even buy a Colt AR. Heck, most couldn’t, the price being what they are. Someone could build one themselves for half the price or even buying one used for a third of the price of a Colt AR. Then spend the rest on magazines, ammo and accessories.
Your point is exactly why I don’t think this was a political decision. There are so many cheap ar15 style weapons on the market that very few people care about having “the” ar15 any more. I know in my area of the South alot of dealers stocked le6920s but outside of there most dealers I’ve seen dont even stock them. It doesn’t make sense to keep making a product they cant sell. I’ll admit the timing of this announcement is suspect but this has been a couple (or more) years coming.
Hmm, I’ve had a colt ar 15 Hbar for close to 30 yrs and with the colt produced 22 adapter, I’ve help more than one ground squirrel and rabbit learn how to run faster than they thought they could. And the only thing that it has killed is some of those ground squirrels and rabbits and a whole bunch of empty tin cans and more than a few bull’s eyes and paper targets. Other than that , it just sits there looking contented.
I heard last week that there is over 400 businesses that manufacture and sell AR’s
As other people have commented on is Colts price points. They have been high for some time but with the government contracts, they did not care since the private sector sales were a low percentage of their profits.
But sadly Colt has backed the wrong group and I think over time it will be one of an epic mistake.
I am from Connecticut, prior to moving to a “free state” and I personally can think of a lot better AR rifles for the money, from companies who offer a lot better customer service than Colt. So, they got government contracts, big deal.
Besides, I refuse to purchase items that can be shipped to free states, but, due to demoncratic politicians passing draconian laws, the residents of the state are not permitted to own.
Just my opinion.
If my “old age” memory serves me correct, didn’t Colt make the decision to stop selling to the private market somewhere around the year 2000 but after a while started selling to us guys again shortly there after?