The pattern of indecision and nervousness in gold prices continued to manifest itself overnight, and the precious metal remained confined to a rather narrow range. Support emerged near $895, but resistance was seen as values approached $910. In the background, the dollar repaired much of Tuesday's damage, rising 0.76 on the index to reach 85.79. Crude oil rose as well, adding nearly one dollar and touching $41.60 per barrel. All of this was unfolding against the same old drama in global economics: companies reporting and/or warning about losses, banks under pressure (yes, that's an understatement), and investors trying to hang on to what little they have left, following the last two years of turmoil.
New York spot dealings opened the midweek session slightly lower, losing $2.20 at $898.40 per ounce as participants observed a still stronger dollar and digested an ADP report showing a more than half-million private sector jobs (fewer than estimated !) contraction last month. Evidently, the expectation bars are being set lower than at a limbo dance contest, of late. For any negative statistical data. Meanwhile, jobs cuts announcements were at a seven year high. Stock index futures reflected more indecision this morning. Jewellery sales for Valentine's Day are expected to drop about 5% this year, making florists and chocolatiers happy campers as the forecast came out this morning.
Silver was off 7 by cents, quoted at $12.38 at the open, while platinum and palladium split evenly, with the former gaining the $2 lost by the latter. Spot indications were $963 and $190 per ounce, respectively. Traders expect the current congestion to give way to a breakout or breakdown, probably prior to the week's end. Of course, they refused to state a specific direction. Our guess would be for one more try to the upside, but, hey we've been wrong before. One of the pitfalls of guessing.
President Obama fired the first salvo of what is likely to be a series, and aimed it squarely at the banking industry and Wall Street. Expect an overhaul and a regulatory campaign to rival the days of FDR, we are told. Mr. Obama ordered a pay cap of half a million dollars for the executives of any firm that will receive sizeable government financial assistance. Populist wrath at its best. Payback time. Actually, no pay time. Wall Street was quick to whine and remind us all that money is the common motivational denominator of anything that happens down there. Not talent, not brains, not hard work. No one goes to Wall Street to save the world. was heard this morning. Well, they better start, at this point. The world needs it. Wells Fargo quickly ditched plans for a Las Vegas junket for its
A quick roundup of all things money, shows a familiar picture this morning. Panasonic loses $4.2 billion and cuts 15,000 jobs. Mickey Mouse's take-home profits shrink 32% (Minnie is furious). Time-Warner posted what the media calls a horror-show loss and Costco profits gave indications of soon turning towards Lostco. Kraft and Sara Lee also went bad. Alcatel-Lucent flushed $5 billion on writedowns, and BHP Billiton failed to shine following nickel mine closures and slumping commodities.
Austerity is the new black. Tooling around in your Rangie, scooping up the latest Manolos, and noshing on $60 an ounce Kobe 'tartar' with a 'coulis of blood' is right out. Ostentation gives way to prostration. Bloomberg's Matt Lynn picks up on the trend towards sanity. He fails to tell us how long it might last:
Your portfolio is in tatters. Your job is about as secure as an investment with Bernard Madoff. Now, as if life wasn't gloomy enough, your girlfriend or wife is about to trade you in for a more lucrative model. No one ever said a career in financial markets was fun. The hours were backbreaking. The work was dull. The math was often impenetrable. And your colleagues? Well, let's put it this way: A picnic with a pack of wolves would be more relaxing and there would be less chance of getting your sandwich stolen.
It still had its benefits. The offices were swank. The bonuses were mind-boggling. You could be confident that even if you hadn't reached the summit of human evolution, no one could match you for status. At its most basic, it was certain your market value with the opposite sex was high. It didn't matter if you looked more like Danny DeVito than Leonardo Di Caprio. Males didn't come more alpha than investment bankers.
As the credit crunch rolls into its third year, and as world politicians rush to make bonus payments about as legal as carrying a loaded shotgun onto an airplane, bankers can feel themselves slipping down the league table of desirable careers. One New York Web log has attracted a lot of publicity for collecting the gripes of girls who date or once dated bankers. Surveys show that the plutocrats are spending less on their mistresses and lovers, which may well lead to many women deciding to do something else with their lives.
Naturally, it is hard not to sympathize. Once you are making mega-bucks, it isn't difficult to make yourself attractive to the opposite sex. You can tip the maitre d' enough to make sure you get the best table at the smartest restaurants. You can pour bottles of the best, overpriced wine down the throat of the person sitting opposite you. If all else fails, you can always pull out a Tiffany & Co. box.
Now, all that has changed. A table for two at Pizza Hut -- with a meal-deal voucher, naturally -- and an hour or two of miserable conversation about how everyone in the office is getting fired, doesn't quite work the same magic. The Dating a Banker Anonymous blog has attracted a lot of attention since it began. It may be accurate, or it might be a clever publicity stunt. Either way, it has tapped into the zeitgeist. A collection of alarmingly frank money honeys dish the dirt on their financial-world boyfriends, and they come to the same conclusion: A banker without a bonus is about as useful as a nut without a wrench.
'No Broke Banker'
I ain't saying I'm a gold digger, but I ain't messin' with no broke banker, writes one of its contributors. Cold it might be, but at least it cuts to the chase. There is already evidence that men in financial markets are cutting back on treats for their lovers.
Russ Prince, president of research firm Prince & Associates Inc. in Redding, Connecticut, carried out a survey of 191 men and women with a net worth of at least $20 million. More than 80 percent of the men said they planned to give lower allowances to their mistresses, and almost as many would offer fewer gifts. In tough economic times, the incentive to become a kept lover may increase. After all, other ways of making easy money are looking less certain by the day.
I foresee a growing desire on the part of many people -- male and female -- to be kept, Prince said in an e-mailed response to questions. A bad economy like the one we're experiencing will only make the good life ever more attractive.
Maybe. And yet if the allowances and gifts that come with the position are tumbling in value, there may well be fewer applicants. The truth is, in different ways, dating a banker is financially a far less attractive option than it used to be. They will have to rely on wit and charm, attributes in which they sometimes hold a short position. There is a serious point here. For more than two decades, banking has been the world's most prestigious career. It paid better than anything else, and it carried more kudos.
Status is measured in many different ways. Money is part of it. Yet it is also quantified in esteem, position and acclaim. One of the reasons so many aggressive, ambitious men flocked to a career in investment banking was because it made them feel like they were running the world. As any sociobiology major will tell you, attractiveness to the opposite sex may be more important than any other component when choosing a career and lifestyle.
Bankers can no longer lord it over other professions. Finance moguls have gone from alpha to gamma in the space of a few months. Long after the credit crunch is just a footnote in the textbooks, it will have a profound impact on the industry -- and on the private lives of those who used to work in it.
What goes around....
In a single-handed effort to right Disney's listing ship, the Kitco crew is on its way to Orlando, Florida. Alas, the only time we might get to spend at D'World will be the late evenings, as our days will be filled with the Money Show events and workshops. So, hop on a $99 flight, leave the snow and ice behind, and come join us in sunny FLA as we learn how to make and keep money. We have a strong suspicion that the Kitco booth will be a popular ride at that venue. Since the airlines do not yet offer Internet service, we will be excused from an afternoon update today.