Tag: finance

Who cares about tumbling GDP: it is all about the confidence of Wall Street CEOs, pardon, consumers whose confidence that the winter weather would finally end , if not so much in the economy with over 91 million people out of the labor force, resulted in yet another beat in the data, sending the Final UMichigan print higher from 81.2 to 81.6 on expectations of an unchanged print. The internals were largely irrelvant, but in terms of current conditions, consumers were most confident since November, up from 94.0 to 95.4, while expectations about the future was at 72.8 the highest since August. Finally, 1 year inflation expectations dropped modestly from 3.3% to 3.2%: don’t worry though – in the New Normal declining inflationary expectations is enough to send the S&P 500 to new all tinme highs.

via Zero Hedge http://ift.tt/1eFVhHN Tyler Durden

Today’s AM fix was USD 1,327.75, EUR 961.65 and GBP 793.21 per ounce.
Yesterday’s AM fix was USD 1,331.00, EUR 974.81 and GBP 799.88 per ounce.    

Gold climbed $1.50 or 0.11% yesterday to $1,330.50/oz. Silver rose $0.04 or 0.19% at $21.28/oz.

Gold in U.S. Dollars, 5 Days – (Bloomberg)

Gold headed for its first back to back monthly gain since August as concern that the U.S. recovery may be losing momentum, concerns about the Chinese economy and turmoil in emerging markets is leading to haven demand. Assets in gold exchange-traded products are set for the first monthly increase in 14 months. Gold ETF holdings climbed 0.4% this month through yesterday and are set for their first monthly gain since December 2012.

China’s economy may exert an important influence on markets again next week. A poor PMI number on Saturday could lead to a renewed bout of ‘risk off’ in markets next week.
 

Gold in U.S. Dollars, Year To Date – (Bloomberg)

A two-week slide in China’s yuan accelerated today when it had its biggest tumble since 2005 on speculation the the central bank is stepping up efforts to push it lower. A 0.9% drop against the U.S. dollar Friday brought the week’s losses to 1.2%, more than twice the 0.5% loss that spooked the market last week, coming as it did after years of steady gains.

The weakness in the yuan is likely to be temporary as longer term the yuan looks set to appreciate against major currencies – intervention or no manipulation by the PBOC. Were there to be further weakness in the yuan and a prolonged bout of weakness, currency wars will likely rear their ugly heads again as other nations seek to devalue their currencies in order to maintain export competitiveness.

Ukrainian Hryvnia in Gold, 5 Days – (Bloomberg)

The plunge in the Ukrainian hryvnia this week and the risk of bank runs, not to mention the risk of contagion for European banks exposed to Ukraine should support gold. The Ukrainian currency has collapsed 22% versus gold this week – from 11,684 hryvnia per ounce on Monday to 14,235 hryvnia per ounce at 11:30 GMT today.

Rising geopolitical tensions between Russia and the West over developments in the Ukraine should also be supportive. This morning Ukraine has accused Russia of invading Ukraine and is considering a state of emergency after masked gunmen occupied two Crimean airports.

Other geopolitical flash points include Thailand, Venezuela and the Middle East which continue to quietly simmer in the background. Tail-risks have increased and could lead to a renewed safety bid for gold in the coming weeks.

The increasing scrutiny by regulators and the media on the manipulation of the gold price should also support gold. The FT’s story regarding manipulation and the likelihood of lawsuits against banks engaged in manipulation was withdrawn from the internet earlier in the week and overnight Bloomberg has again covered the possible manipulation of gold at the London A.M. fix. This story has been bubbling under the surface for years and may blow up in the coming weeks leading to higher gold prices.  

However, in the short term there are technical risks and a lower weekly close this week – below $1,324.35/oz – could lead to a quick and sharp retreat to support at $1,307/oz, $1,300/oz and $1,280/oz.

Gold in U.S. Dollars, 1 Year – (Bloomberg)

On balance, we are bullish for next week. However, a lower close today and for this week – could cause short term jitters and retracement. Gold analysts surveyed by Bloomberg are divided in their outlook for next week. Fourteen participants were bullish, sixteen were bearish and six were neutral.

Chinese Gold Imports Surge as Yuan Falls Most in Three Years
Chinese net gold imports surged in January and the 83,638 kilograms were more than the first two months of 2013 combined, when just 80,527 kg was imported. Strong Chinese demand may be fueled by concerns by the Chinese about their banking system, the value of the yuan and the risk of inflation.

Gold in Yuan, Yuan in USD and HK Net Gold Exports to China – (Bloomberg)

China’s gold imports from Hong Kong fell month on month in January from December as some jewelers and fabricators in the world’s largest consumer of the precious metal reduced purchases from the record levels of demand seen in December, and indeed in full year 2013.

Hong Kong Total Gold Net Exports to China – (Bloomberg)

Net imports totaled 83.6 metric tons last month, compared with 91.9 tons in December and 19.6 tons a year earlier, according to calculations by Bloomberg News based on data from the Hong Kong Census and Statistics Department today. Exports to Hong Kong from China declined to 19 tons in January from 34.8 tons in December, the Statistics Department said in a separate statement. Mainland China doesn’t publish such data.

IMF Data Shows Turkey Joined Russia In Reducing Gold Reserves Marginally in January
Turkey’s holdings dropped to 15.708 million ounces versus 16.71 million ounces in December, data on the IMF website shows.
   *Russia’s bullion reserves fall to 33.266M oz vs. 33.283M oz in Dec.: IMF
   *Mexico’s gold holdings decline to 3.955M oz vs. 3.958M oz in Dec.: IMF
   *Latvia also reduced bullion reserves in Dec.: IMF
   *Kazakhstan’s gold assets expand to 4.67M oz vs. 4.62M oz in Dec.: IMF

Given increasing geopolitical tensions and monetary risk, we would expect the Russian central bank to continue allocating foreign exchange reserves to gold bullion in the coming months and indeed this trend could accelerate.
 
Ukraine Bank Runs Could Soon Be Seen In EU and U.S.
Bank runs in the Ukraine and Thailand today and Venezuela earlier this year, show the very fragile nature of our modern fractional reserve banking system. If just a small percentage of depositors withdraw some or all of their cash from the bank, there is not enough cash available.

The newly appointed governor of Ukraine’s central bank, Stepan Kubiv, said last Monday that as much as 7% of total bank deposits were withdrawn from February 18th to February 20th. The $2.9 billion (30 billion hryvnias) in cash was gobbled up by anxious depositors during a time of intense fighting between protesters and government forces in Kiev.

The plunge in the currency this week is likely to have exacerbated that trend and much more Ukrainian bank deposits were likely to have been withdrawn this week.

People line up to withdraw money from an ATM in the western Ukrainian city of Lviv, Feb. 20. (Yuriy Dyachyshn/AFP/Getty Images)

In a fractional reserve banking system, if too many depositors withdraw their cash, banks are forced to either shutdown or declare bankruptcy. Typically, they don’t have enough vault cash to pay their depositors. Ordinarily banks in Western countries have just 10% of deposits in cash, although figures in emerging markets may be higher.

But the modern version of a bank run often involves capital flight. Depositors aren’t only going for their cash, they are also wiring their savings out of the country in record numbers through electronic wire transfers. This is a form of silent or stealth bank run, as it is not visible in terms of angry depositors queuing up outside banks as was seen with Northern Rock in the UK and elsewhere in recent years.

On Wednesday evening, we interviewed the publisher of the Trends Journal, Mr. Gerald Celente. 

Celente is a contrarian commentator whose opinions are sometimes controversial but always thought provoking. He has a great track record at predicting many of the key financial, economic and geopolitical events of the last 30 years.

In an interesting question and answer session Celente addressed concerns about terrorism, a World War, financial meltdown, the risks of bank runs and difficulties in accessing savings in Europe and the U.S. in the coming months.

He pointed out how Cypriot depositors lost savings in bail-ins and that in the Ukraine today “massive bank withdrawals are going on.”

Celente said that the 9/11 attack and subsequent restrictions on access to bank deposits in New York , when Wall Street was closed down for a few days, may be seen again. He warned of the risk that “ATM machines are not working anymore” and the authorities are “putting restrictions on what you can draw out.”

He advised owning physical gold and silver in your possession and said that the precious metals are like a “cash cow when you have the real deal”.

“If you have gold or silver, you are in a golden position,” Celente said.

Despite the many risks of today, Celente saw light at the end of the tunnel. He said that there are opportunities in “clean food”, breakthrough alternative energy, alternative medicine and in digital education and internet learning.

The video of the question and answer webinar with Gerald Celente can be watched here.

via Zero Hedge http://ift.tt/1eFVj29 GoldCore

In a “stunning” turn of events, Chicago, where the bulk of the polar vortex impact was felt in the past month, apparently experienced zero negative economic impact from, you know, the weather, after moments ago the Chicago PMI February print blew away forecasts of a 56.4 print, and after printing at 59.6 in January in fact rose to 59.8, just shy of the highest sellside forecast of 60. Because after beating expectations 5 times in a row why not make it six.

The key component breakdown was as follows:

• New Orders 63.6, down from 64.6
• Prices Paid 59.1, down from 64.9
• Employment soared from 49.2 to 59.3

From the report:

The Chicago Report points to firm growth and a continued recovery in the US economy, with the Barometer standing at its highest level since December and remaining around 60 for the fifth consecutive month.

 

Some panellists cited the negative effect of the poor weather on their business, although overall this appeared to have a minor impact that was only visible in longer supplier lead times.

 

After expanding at a faster rate in January, Production and New Orders decelerated in February, while a more pronounced set back was seen in Order Backlogs.

 

In contrast, the Employment Indicator bounced back sharply in February, jumping out of contraction, and nearly reversing the declines seen in the previous two months.

 

Prices Paid fell in February, following January’s supplier led price hikes, which had pushed the indicator to the highest level since November 2012.

 

Inventory of finished goods expanded a little faster as companies continued to rebuild stocks, following December’s sharp drawdown.

 

Commenting on the MNI Chicago Report, Philip Uglow, Chief Economist at MNI Indicators said, “The latest Chicago Report confirms that the US economic recovery continued in February, with New Orders and Production remaining at high levels.”

 

“In line with the pick-up in demand, firms continued to rebuild inventory and just over 50% of respondents said they planned to increase stock levels over the next three
months.”

To summarize, again, all the bad data is due to the weather. All the good data is due to the recovery, and the weather has no impact. Carry on.

via Zero Hedge http://ift.tt/1hpRYtm Tyler Durden

Wonder why the FX “cartel” sent the USDJPY soaring starting sometime around 9:00 am?

Simple: to generate the kind of momentum buying panic in ES that sent it vertical by just about 6 points in seconds.

“Fair and efficient markets.”

via Zero Hedge http://ift.tt/1fw2HgJ Tyler Durden

Naval blockade, check. APCs and military vehicles rolling into the Crimean, check. Mysterious gunmen taking over the parliament and airports, check. And now: Russian military helicopters, which as the clip below shows were sighted on their way to Belbek airport in Sevastopol.

via Zero Hedge http://ift.tt/1bROaRy Tyler Durden

Everyone knows that when it comes to abysmal human right records, China is the perpetual whipping boy – in most cases rightfully so – of the US whose own “pristine” record of human rights violations in recent years has also been exposed as mockery, courtesy almost exclusively of one NSA whistleblower. Of course, the US has been far more tacit in how it encroaches on the rights of its own civilians at home, if not so much abroad where US drone strikes have killed and continue to kill countless innocent civilians

Today, China decided to strike back at the US with its own report on US “human rights.” In a nutshell, China launches a full frontal attack on the hypocrisy of the US, saying that “posing as “the world judge of human rights,” the U.S. government “made arbitrary attacks and irresponsible remarks” on the human rights situation in almost 200 countries and regions again in its just-released reports, the report says. “However, the U.S. carefully concealed and avoided mentioning its own human rights problems,” it adds. The report calls the U.S. tapping program, code-named PRISM, which exercises long-term and vast surveillance both at home and abroad, “a blatant violation of international law” and it “seriously infringes on human rights.”

Hard to argue with that.

Full report from Xinhua:

China on Friday responded to the United States criticism and irresponsible remarks of its human rights situation by publishing its own report on the U.S. human rights issues.

The Human Rights Record of the United States in 2013 was released by the Information Office of China’s State Council, or the Cabinet, in response to the Country Reports on Human Rights Practices for 2013 issued by the U.S. State Department on Thursday.

China said in the report that there were still serious human rights problems in the U.S in 2013, with the situation in many fields even deteriorating.

Posing as “the world judge of human rights,” the U.S. government “made arbitrary attacks and irresponsible remarks” on the human rights situation in almost 200 countries and regions again in its just-released reports, the report says.

“However, the U.S. carefully concealed and avoided mentioning its own human rights problems,” it adds.

The report calls the U.S. tapping program, code-named PRISM, which exercises long-term and vast surveillance both at home and abroad, “a blatant violation of international law” and it “seriously infringes on human rights.”

The U.S. also faces rampant gun violence, according to the report. “In 2013, 137 people died in 30 mass killings, which caused four or more deaths each, in the U.S..”

The report also cites figures to show that frequent drone strikes by the U.S. in countries including Pakistan and Yemen have caused heavy civilian casualties.

The U.S. has carried out 376 drone strikes in Pakistan since 2004, causing deaths of up to 926 civilians, according to the report.

“The U.S. still faces grave employment situation with its unemployment rate remained high,” the report says.

Rates of unemployment for the lowest-income families have topped 21 percent. The homeless population in the U.S. kept swelling and it had climbed 16 percent from 2011 to 2013, it added.

“There are also a large amount of child laborers in the agricultural sector in the U.S. and their physical and mental health was seriously harmed,” the report says.

To date, the U.S. remains a country which has not ratified or participated in a series of core UN conventions on human rights, such as the International Covenant on Economic, Social and Cultural Rights, the Convention on the Elimination of All Forms of Discrimination against Women, the Convention on the Rights of the Child, and the Convention on the Rights of Persons with Disabilities, according to the report.

via Zero Hedge http://ift.tt/1eFHP6L Tyler Durden

The latest algo-arbing gimmick: report estimate bearing results to get the momentum-ignition algos sending your stock higher… then a month later announce you “discovered” fraud in a subsidiary, which magically cut earnings by $235 million, hoping nobody will notice. This is precisely what Citigroup just did.

From the just released 8-K:

Citi announced today that it is adjusting downward its fourth quarter and full year 2013 financial results, from those reported on January 16, 2014, by an estimated $235 million after-tax ($360 million pre-tax) as a result of a fraud recently discovered in its subsidiary in Mexico. The financial impact will lower Citi’s 2013 net income from $13.9 billion to $13.7 billion. Citi’s 2013 Annual Report on Form 10-K, to be filed with the U.S. Securities and Exchange Commission on March 3, 2014, will reflect these adjustments. Citi also intends to release a revised Fourth Quarter of 2013 Quarterly Financial Data Supplement reflecting these adjustments.

 

As of December 31, 2013, Citi, through Banco Nacional de Mexico (“Banamex”), had extended approximately $585 million of short-term credit to Oceanografia S.A. de C.V. (“OSA”), a Mexican oil services company, through an accounts receivable financing program. OSA has been a key supplier to Petróleos Mexicanos (“Pemex”), the Mexican state-owned oil company. Pursuant to the program, Banamex extended credit to OSA to finance accounts receivables due from Pemex. As of December 31, 2013, Banamex also had approximately $33 million in either outstanding loans made directly to OSA or standby letters of credit issued on OSA’s behalf.

 

On February 11, 2014, Citi learned that OSA had been suspended from being awarded new Mexican government contracts. Upon learning of this suspension, Citi, together with Pemex, commenced detailed reviews of their credit exposure to OSA and of the accounts receivable financing program over the past several years. As a consequence of these reviews, on February 20, 2014, Pemex asserted that a significant portion of the accounts receivables recorded by Banamex in connection with the Pemex accounts receivable financing program were fraudulent and that the valid receivables were substantially less than the $585 million referenced above.

 

Based on Citi’s review, which included documentation provided by Pemex, Citi estimates that it is able to support the validity of approximately $185 million of the $585 million of accounts receivables owed to Banamex by Pemex as of December 31, 2013. This $185 million consists of approximately $75 million supported by documentation in Pemex records and approximately $110 million of documented work performed that was still going through the Pemex approval process. The difference of an estimated $400 million has been charged to operating expense in Transaction Services in the fourth quarter of 2013, with an offset to compensation expense of approximately $40 million associated with the Banamex variable compensation plan.

 

While Citi’s review of these matters is ongoing, Citi believes the fraud is isolated to this particular client within the Banamex accounts receivable financing program. Based on its continuing review, Citi will determine whether all or any portion of the $33 million of direct loans made to OSA and the remaining approximately $185 million of accounts receivable due from Pemex is impaired, taking into consideration the impact to OSA and Pemex of the actions and events described herein.

 

Citi CEO Michael Corbat said, “Although our inquiry into this fraud is continuing, we have been responding forcefully over the past week by assessing the overall exposure to Citi, coordinating with law enforcement, pursuing recovery of the misappropriated funds, and seeking accountability for anyone involved.

 

“Specifically, we have been taking the following actions: first, we immediately began a ‘rapid review’ – throughout Banamex and the rest of Citi – of programs similar to the one at issue here. At this point, we believe this is an isolated incident.

 

“Next, we are exploring our legal options and coordinating with law enforcement agencies in Mexico. Banamex, in coordination with Pemex, has worked with Mexico’s Attorney General to initiate criminal actions in connection with this matter that, in addition to imposing just penalties on the responsible parties, may allow us to recover damages. We are exploring every available option to recoup the misappropriated funds and we will be relentless in pursuing their recovery.

In conclusion, Corbat is pretend angry. And you don’t want to see him pretend angry:

“I can assure you there will be accountability for those who perpetrated this despicable crime and any employee who enabled it, either through lax supervision, circumvention of our controls, or violating our Code of Conduct. All will be held equally responsible and we will make sure that the punishment sends a crystal clear message about the consequences of such actions,” Mr. Corbat concluded.

Ooooh.

Of course, if this fraud ends up not being isolated, any further fraud discoveries will be reported after the next quarter’s expectation beating results, only to be revised lower when the stock has already surged even higher on completely made  up number. Ah, New Normal: you are so much fun.

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So much for that blow out initial estimate of Q4 GDP that had annualized GDP at 3.2%. One month later and the number has been cut by 25% to 2.4% following a substantial downward revision to Personal Consumption, which dropped from 3.3% to 2.6%, well below the 2.9% expected. As a percentage of the acual annualized GDP number, it dropped from 2.26% to 1.73%. The other components in the calculation that had material revisions were inventories which added just 0.14% to GDP vs 0.42% in the last revision and 1.67% in Q3, as the destocking from record high inventory build up levels continues to take a bite out of growth; offsetting this was an increase in the Fixed investment estimate from 0.14% to 0.58%. Which in turn means that even more CapEx growth was pulled back into last year than previously expected, suggesting further downward cuts to Q1 2014 GDP are coming. Finally, the government deducted -1.05% from Q4 GDP as opposed to the 0.93% estimated previously.

And now, we await for the downward Q1 GDP revisions as sellside economists realize the US consumer was not nearly as strong as had been initially expected.

Source: BEA

via Zero Hedge http://ift.tt/1eFD9xH Tyler Durden

Last week I went to a conference in South Beach. I made reservations for our hotel a few months ago, but I did not make a reservation for the one night we needed at Key West. I did not know much about the Keys and didn’t have time to research them before the trip. I figured my brother Alex and I would find a hotel when we got there. We were traveling without our families, we are very low-maintenance men, and the hotel was our lowest priority.

We arrived in Miami, rented a car, and headed to the Keys. While Alex was driving I was researching our final destination on my iPad. It did not take me much time to realize that there is very little to see and do (other than go fishing) on the islands other than Key West, so we needed to stay overnight there. And it was four hours away – it’s the largest island and the one furthest one from Miami – so we had plenty of time to find a hotel.

I looked for hotels on Kayak, and there were plenty available in the $300-400 range, plus a few for $200 on my Hotel Tonight app (I highly recommend that app). But I wanted to enjoy the scenery, so I put hotel finding on the back burner. An hour and a half before we were to arrive in Key West, I finally got back to it; but now the Hotel Tonight app did not list any rooms at all, and Kayak showed just a few hotels, all for $600 and up. And every time I called to try to reserve a room, they were gone.

I figured maybe not all hotels are listed on Kayak. So I pulled up Google Maps and called every hotel and motel in the Key West area: every room on the island was booked (this included adjacent islands, too). I even enrolled in a local service that brokered Key West hotel rooms. There were literally no rooms, at any price, available on Key West. Period.

I have to admit that instead of worrying about it I was laughing. I looked at it as an adventure. I had this weird curiosity about how it was going to play out. The feeling was similar to the one I get when I sit down to write an article and don’t have the slightest idea what it will look like when I’m done. The potential downside was merely that Alex and I might have to drive back at night, or most likely just sleep in the car.

Back to the hotel search. There was one exception. Every time I searched there was this one hotel that showed up: New Orleans House, which was described as an “all-male” hotel that offered rooms for $200. I was not quite sure what “all-male” meant – was it maybe a refuge for men tired of their nagging wives? Or maybe it was an all-the-beer-you-can-drink hotel.

So I pulled up the hotel’s website, and in seconds it became crystal clear to me that it was a hotel for gay men. I am the least homophobic person I know, but I had never stayed in a gay hotel before. I was not quite sure what the expectations were of guests. But our options were really limited: stay in that hotel, sleep in the car, or drive at least three hours to the nearest hotel and then drive another three hours back to Key West tomorrow.

I called the hotel and tried to politely ask if there was anything else I needed to know about the hotel, other than that it was for men only. A very polite gentleman told me that I had to be at least 18 (check!) and that clothing was optional. So I asked, “Are you saying there are naked men roaming around the hotel?” I was told they were just at the pool.

Alex was hesitant, but he didn’t like our options either, so I convinced him to at least check it out. It turned out to be a very nice, quaint hotel in the center of Key West (probably in one the best locations). The room was absolutely fine, and we could walk out onto a balcony that overlooked Duval St., one of the touristiest spots in Key West – it looked a lot like New Orleans’s French Quarter.

The swimming pool, which I was not anxious to see, was somewhere in the back. Every man I encountered was fully and neatly dressed and extremely polite. If not for the odd pictures of drag queens on the wall, it would have looked just like any other hotel (if you did not visit the swimming pool). I fit in well, as I was wearing my favorite shirt that just happened to be pink.

There is a life/investment lesson in this adventure. If you think about it, Alex and I capitalized on “homophobic arbitrage.” We were not the only ones looking for a room that night. This was only hotel with a room that was showing up on Kayak or in any other search that evening. With the rooms disappearing fast, I know that there were some people who chose to drive back or sleep in the car rather than stay in that hotel.

In investing you have opportunities that open up because dogmatic investors say “I don’t do retail” (or bankruptcies, or … the list goes on). I’ll be the first to admit that I’m guilty of that, too. But often, opportunities are created because enough people say “I don’t do that.” We are analyzing a company right now that will be delisted because it has not filed its financials for two years. Enough investors have said “I don’t do delisted companies” to create a sell-off and thus an opportunity in that stock.

In early May I am going to Omaha for Buffett’s annual meeting. I have yet to book my room. There are no good rooms available right now; most were booked ten months ago. Usually, rooms show up a few days before the event, but I’m not worried – I can always count on homophobic arbitrage.

As a person who scribbles on a semiconstant basis, I was curious about Hemingway’s writing habits. He got up in the morning and cranked out about 700 words a day. I have been getting up at 5 AM for the last month and a half to write. The only difference between Hemingway and me is that he went fishing and then drinking for the rest of the day while I drive the kids to school and then go to work. But I definitely see the benefits of writing early in the morning. Now, on weekends I can spend time with the family, ski, and read.

Then we went to see the Little White House, the place where Harry Truman spent 175 days during his presidency. It is a relatively small house, considering that a president spent a lot of his time there. It had previously been occupied by the superintendent of the navy base and was made available to the president when he wanted to get away from cold Washington, DC (this was before Camp David).

I have never been to the White House, but I imagine you might get feelings similar to those I had at the Little White House. You start imagining all the important decisions that were made there and that changed the lives of millions. Did Truman decide to drop atomic bombs on Japan while he was there? (Unlikely – that happened in August 1945, and he was in Key West only in wintertime.)

Finally, we visited the Ship Wreck Museum. This was probably the most interesting of the three. I learned that in the 1860s Key West was the wealthiest town in the US. It made money by salvaging ship wrecks. About a hundred ships sailed by Key West every day, but the island is surrounded by reefs, and a ship would wreck about once a week.

There were observation towers all over Key West. When a wreck was spotted, the watchman would call out the two words the populace of Key West most liked to hear: “Wreck Ashore!” Men would run to small boats and rush to the wreck. The first boat that got there and helped the crew off the ship would be awarded the salvage fee.

We were told a good diver could hold his breath for five minutes. They were scarce and in high demand and therefore made $700 a month – a lot of money in the 1860s. If you worked a month you could buy a house for $700. Most divers only lasted a few months, as diving through shipwrecks was extremely dangerous.

Once the cargo was salvaged it was stored in a warehouse and then auctioned – usually for about half of its original value. A judge would decide on the size of the salvage fee, which ranged between 20-50% of the cargo value. The fee would be based on how far the ship was off the coast, how difficult it was to get to the cargo and retrieve it, etc. Salvage fees ranged in the ballpark of $20-50 thousand dollars.

In the 1920s railroads started to steal market share from shipping, navigation got better, and Key West became just another resort town with a great all-male hotel.

If you believe your friends, enemies, relatives or random strangers accumulated a seven figure portfolio and will benefit from our investment services, call Theresa at (303) 796-8333 and we’ll be happy to mail them a signed copy of The Little Book of Sideways Markets.

via Zero Hedge http://ift.tt/1d14rBY Vitaliy Katsenelson