Home 
Daily Jurojin Archive
Daily Jurojin Archive
| Daily Jurojin - Tuesday, June 2, 2009 |
 |
 |
Tuesday, June 2, 2009 Golden lining of GM's bankruptcyWho'd have ever thunk it?Perhaps one of the most prolific bankruptcy filings of all time and the stock market heads for infinity and beyond! Okay, we admit it. There's more to it than that. Indeed, this was possibly one of the most organized and best flagged bankruptcies in the history of corporate America. The stock market is well past the departure of Rick Waggoner and beyond the entire shocker of what it might do to unemployment or various parts of the auto supply chain. The stock market consigned the bankruptcy to old pre-market news, preferring to warm to the news of fresh signs of life at home and abroad. Chinese manufacturers appeared to expand for the second month in a row. Britain's manufacturer contracted at a lower rate than analysts said they would and a gain in new orders within the U.S. ISM survey trumped the ongoing overall contraction, which like in Great Britain, was at a lesser pace. The same German of manufacturers saw activity pullback from the precipice too, which helped boost the euro and send bond yields surging across the Eurozone. What's good news for the euro currency is bad news for the dollar, which continued to take a defensive posture today. The ongoing weakness has spilled over from May's pounding. Perhaps the 'sell in May and go away' wooden spoon has been handed to the dollar instead of stocks. Meanwhile agricultural commodities have been blooming and according to Bloomberg news, the rise in the Reuters Jefferies/ CRB index of 19 raw materials at 14% is the largest in 35 years. The price of gold contributed 10% to the rise in the index in May and has risen for each of the past eight straight years leaving it priced at more than three-times its 2000 value. Gold's properties as a store of value have finally persuaded the country's third largest life insurance company, Milwaukee-based Northwestern Mutual, to build up an investment of about $400 million in physical gold recently. According to CEO Edward Zore, the insurer's investment in gold could double or even rise five-fold in the event that growth in the economy stalls. July gold reached $989.40 on Monday before pulling back, but nowhere near the kind of decline that responded to a sharp equity market rally. The surge in bond yields today were a direct response to firmer economic data, but they themselves could usher in the next wave of economic weakness through stifling economic growth. Gold doesn't seem to care and investors are deadly serious about its prospects. As Mr. Zore notes, his company held stocks that lost 95% of their value as the economy slid into recession. "Gold isn't going to $90 per ounce," he noted. The Supreme Council of the Secret Order of Jurojin |
