Commentary for the Week of March 8

[John Skerencak, known to denizens of the Rick’s Picks forum as John Jay, is outraged by a Senate bill that would effectively sell visas to foreigners willing to buy expensive homes in the U.S.  The story, reported recently in the L.A. times, is linked below, and you’ll see in the comments it provoked that he is not the only one who thinks this deal stinks.  RA] Selling U.S. visas to prop up the real estate market? You’ve got to hand it to the banking and real estate lobbies, they never give up.  They always have a new scheme in the works. Here’s the story, from the October 20 edition of the Los Angeles Times: “American consumers and the federal government haven't been able to bail out the sinking U.S. real estate market. Now wealthy Chinese, Canadians and other foreign buyers could get their chance. Two U.S. senators have introduced a bill that would allow foreigners who spend at least $500,000 on residential property to obtain visas allowing them to live in the United States.” And there you have it. You can read the article for further details, but the bottom line is that it eliminates the old requirement that a foreigner invest money to create jobs in the USA to get a residence visa. As if that law were not already demeaning enough to America. My synopsis:  You need only pay $500,000 or more in cash, and buy at least one property worth at least $250,000 to live in, and the rest of the money can be used for rental properties.  This legislation proposes a list of regulations that are unenforceable and will never be checked in any case. Think about SEC enforcement of securities regulations: Showcase the law, but don’t enforce it once it has been enacted. You can

Rick’s Picks occasionally publishes opinions with which we disagree. The inflationist argument below, bullish on stocks but also on gold and silver, comes from our savvy friend Chuck Cohen. On stocks, at least, if not on bullion, Chuck’s scenario goes against our own expectations, since we’re looking for a global economic bust that would send shares into a steep dive before year's end. While this could also push gold and silver lower, we still expect precious metals to perform well in relation to all other classes of investables. Economic expectations aside, the broad averages have broken above the tedious sideways correction of the last six weeks, and the charts of many key stocks are undeniably bullish. There are also less-than-subtle signs that the Fed is eager to get QE3 under way with the explicit goal of pumping up stock prices.  Keep these things in mind as you read Chuck’s contrarian take on the markets – a follow-up to a piece he did two weeks ago that we disseminated to paid subscribers.  If you’d like to contact Chuck directly about his financial consulting services, or about mining stocks in particular, click here. RA] Following the recent move up in stocks, I want to update my piece of October 4 (A Bottom Is At Hand) by making some comments regarding stocks, and more importantly to the gold community, about the disappointing lag in the precious metals. First, the stock market. In just two weeks, while the media and most investors continue to dwell gloomily on the financial landscape, the Dow has recaptured almost 1400 points (13%.) Today we are closer to the April high than we are to the recent low. In fact, both the market behavior and the Dow chart are remarkably similar to those of last year at the bottom in August. (The

The retail blight that has laid waste to malls and shopping plazas across America has claimed yet another high-value victim near our Colorado neighborhood: The Great Indoors, a remodeling and redecorating megastore in Broomfield’s Flatiron Marketplace. When the Sears-owned emporium goes darks in mid-December, it will leave 58 people jobless and a 155,000-square-foot building empty. It could also sink the entire Flatiron Marketplace, since the closure will more than double the facility’s vacancy rate to 67%.  That number had hovered near 30% for the last couple of years after Office Depot, Linens N Things and Nordstrom Rack departed in quick succession, leaving the shopping center’s manager with the daunting task of finding new tenants even as retail vacancies continue to soar locally and nationally.  The huge new hole in the retail landscape comes at a bad time for nearby Flatiron Crossing Mall, a 1.5 million-square-foot, $220 million shopping center that itself is reeling from the recent closures of Borders Books and Ultimate Electronics. Other stores that have closed there in recent years include Abercrombie & Fitch, which mistakenly thought its snob-appeal pricing would survive the Great Recession; Fossil, McDonald’s, Godiva Chocolates, Sharper Image and numerous smaller retailers. The exodus actually began about eight years ago when one of Flatiron Crossing’s anchor tenants, Lord & Taylor, became a casualty of a 32-store closing by the parent company. The two-story building that had housed Lord & Taylor, an upscale department store, sat empty for six years, a gangrenous appendage of a mall that has been in survival mode ever since. Will City Survive Loss? An even bigger casualty of these closings could be Broomfield, which depends heavily on sales taxes to fill its coffers. Years ago, the City of Broomfield split off from Boulder County and re-incorporated as a county in order

The markets have opened lethargically Sunday night, although the S&P index futures are threatening to break out of a tiresome four-point range that has contained them for nearly five hours.  It’s eerily quiet, like the noiseless moment in a slasher film just before the chain-saw wielding psychopath leaps from the shadows.  Even the headlines are pregnantly subdued, a 7.2-magnitude earthquake in Turkey overshadowing all else. Other top stories-of-the-hour include the celebration in Libya of Qaddafi’s bloody, ignominious end;  the latest non-developments in the global Occupy movement; an unexpectedly kind word for Facebook founder Mark Zuckerberg from the late Steve Jobs; and -- this just in! -- a Rangers victory in game four of the World Series. If you could chart the mood of the moment, it would feature Bollinger bands so tightly constricted they almost touch. Technicians use this tool to predict explosive moves when things seem a little too calm, as they do right now. The biggest story due out sometime this week or early next will divulge the actual details of the Merkel-Sarkozy plan to save Greece -- and therefore, presumably, all of Europe. We marveled here last week at how the two leaders have brazenly sought to milk yet a few more weeks of agitated calm from a troubled world by merely drum-rolling the latest bailout scheme without providing any inkling of its design. This reminded our colleague Bill Buckler, editor of the Oz-based Privateer, of the South Sea Bubble, wherein shares were floated in “a [British] company for carrying on an undertaking of great advantage, but nobody to know what it is.” Indeed. A similar fraud, later known as the Mississippi Bubble, had been perpetrated a year earlier on French investors evidently as gullible as they were greedy. You’d think the Brits might have had second

Eerie, isn’t it, watching the U.S. stock market dog-tail the headlines stirred up by Europe’s never-ending financial crisis. The mainstream media would have us believe that whatever U.S. stocks do on a given day can be attributed to the latest news concerning Greece. In fact, the world’s newsrooms are sinking deeper and deeper into hallucination, since nothing has occurred to alter Greece’s inevitable slide toward default. Halfway into yesterday’s NYSE session, the financial headlines at Google news were telling us that stocks had fallen because of supposed uncertainties over Greece.  An hour later, when stocks rallied to end the day slightly higher, we learned that the “zigzagging” price action had been caused by a series of “conflicting headlines” concerning European debt. Merkel and Sarkozy were not to blame for this, either, since all they did was issue a joint statement that EU leaders would have a bailout plan for Greece in place by Wednesday. We can hardly wait to see what they’ve come up with. But if it triggers more riots in Athens, how are investors supposed to react?  A few months ago, rampaging torch mobs were seen as evidence that austerity measures imposed on Greece were sufficient to satisfy lenders. Now, however, lenders should fear that any futher tightening will send the country irretrievably into civil disorder and chaos. It would be naïve to think that such a spectacle would not have its effect on Occupy Wall Street. But riots? We’d bet against it, at least for the foreseeable future. The difference between Greece’s mobs and America’s emerging tent cities is that the latter are coming to austerity one small step at a time rather than having it shoved in their faces via government edict. But that is not to say that America’s descent has been imperceptibly gradual. That

[The following commentary generated such a spirited discussion in the forum that I'm letting it run for a second day.  If you haven't yet added your two cents' worth, it's time to jump in! RA] Rep. Ron Paul’s proposal to cut spending and taxes by $1 trillion during his first year in office was the most e-mailed story yesterday at Wall Street Journal online.  In a perfect world, perhaps his campaign would get as much attention from the Journal's editorialists as it does from the paper’s readers. Ditto for TV coverage, where Paul seems to get respect only from, of all people, Jon Stewart. Stewart is one of the few commentators who seems to have noticed how well Paul scores with voters even as reporters and news editors continue to ignore him (or rudely disdain him, as is the case with Fox blowhard Bill O’Reilly, who presumed to go toe-to-toe with Paul on a subject -- economics -- that O'Reilly clearly knows nothing about).  Most recently, alas, the newsies have been so busy tearing into Herman Cain’s elemental 9-9-9 tax plan that they will have had little time to ponder Paul’s trillion-dollar idea. Most of the savings the Texas congressman seeks would come from eliminating five cabinet-level departments – lumbering bureaucracies that millions of Americans would doubtless agree we can do without: Education, Energy, Commerce, Interior and HUD.  Other than the vast army of civil service workers employed by these FDR-era throwbacks, who would ever miss them, right? Paul’s plan sounds like a winner to us, but we would urge him to consider adding to his hit-list the U.S. Department of Agriculture, which is not merely counterproductive like the agencies listed above, but nefarious. If you don’t know why the USDA deserves to be deep-sixed, the documentary film Farmageddon will

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So lame is Europe’s latest attempt at spin control that Americans could view it as comic relief from our own worries about the U.S. economy’s accelerating death spiral. Creating a global diversion was doubtless a goal of the exercise, which featured Sarkozy and Merkel, president and chancellor, respectively, of France and Germany, posing for the photo-op unveiling of a scheme – sorry, no details at this time –  to put Greece and the rest of the PIIGS on sound financial footing. Never mind that France itself starts to look like a financial basket case if one scrutinizes their books too closely; or that the German people, if not yet their leaders, have lost their appetite for bailing out the rest of Europe. And never mind either that, rather than describing their supposed plan, Merkel and Sarkozy have merely promised to tell us more about it in the fullness of time – reportedly at a November meeting of Euroland’s potentates, wizards and feather merchants. To their dubious credit, and perhaps owing to an understandable desire to avoid the derision of the world, the two leaders did not refer to a “secret plan” when they deliberately left it under wraps; no, they alluded merely to “a plan, ” and we can only surmise that they were fearful of raising the public’s expectations by implying that something new or unexpected was about to be tried. Better instead to maintain and nurture the low-grade cynicism with which most of us have come to regard these announcements.  That cynicism seems manageable, at least – presumably until market forces cause the whole shoddy edifice to crumble. In the meantime, Sarkozy and Merkel have bought perhaps a month’s time for the hopeless illusion that political Europe will remain united under a single currency.  Sustaining the endgame for

[What does it take to live in America as a truly free person?  More sacrifices than you  might imagine, actually.  The author of the guest commentary below, self-described Anarchist Carole Gibson, never lets the government dictate the terms of her life. That means, for one, avoiding airports and commercial jets, where she would be subjected to all of the rules and intrusions that most of us have come to grudgingly accept. Not Carole, though. A regular contributor to the Rick’s Picks forum, she explains below how she strives to keep herself beyond the reach, both legally and literally, of Government. RA] Tired of living under the heavy hand of government? My advice is to stop complaining and do something about it. No, I don’t mean demonstrate, write “your” representatives or vote; I mean take your life into your own hands and create the freedom you desire without waiting for someone else to do it for you.  I have found ways to exist in this world maximizing my personal freedom and you can do it too. I believe that the best government is that which governs least.  In fact, my beliefs about government are anarchical.  My definition of anarchy is “a theory that regards the absence of all direct or coercive government as a political ideal and that proposes the cooperative and voluntary association of individuals and groups as the principal mode of organized society”.  Under this definition, I am absolutely an Anarchist. Governments that use force to impose their will on people without the people’s consent are incompatible with a free society.  When I write “consent,” I specifically mean each individual’s consent to be governed; I do not mean any implied consent supposedly given by the collective.  For example, my neighbor, my neighbor’s ancestor, or my neighbor’s representative cannot give their