Today is the day of Tea Party 2007. Donate something or any amount to Ron Paul’s campaign.

There is a silent revolution going out there. In less than 8 hours today, from midnight till about now, 1.2 million dollars have been donated already. I hope that collectively we can break 4.3 million, which was the previous record set on November 5th.

Be part of the history in the making. Buy a cap, or some campaign material. If Ron Paul makes it all the way through, you bet that you can sell your precious good on Ebay for a lot more.

I have never felt so strongly about a particular presidential candidate. There is simply no other candidate that will come close in intellectual power and integrity than Ron Paul’s.

Let us all be part of the great American History in the making.

Adam Hamilton is an excellent writer as a gold-focused newsletter. But that does not help you much.

My personal experience with Zeal Intelligence newsletter is that it talks about the general market conditions a lot more than individual companies. He has a risk ranking of some 30 to 50 resource companies. But that doesn’t help me to select and narrow down to just a few.

Furthermore, his trading records don’t appear to be all that great. He was stopped out of MANY positions on August 16 2006, even though he claims that his performance for investing near the August 16 bottom is terrific. Well, yes of course, when you constantly recommending purchases month after month. And if you don’t include and factor in all those stocks that were stopped out with heavy losses.

And certainly, one of the bad thing about Zeal is that they do NOT refund your subscription at all. I could NOT find a trial period either. I guess that I should have taken that as a sign.

Certainly I still valued Zeal’s publication and analysis highly, as a guide for the general trend/valuation of the gold market. However, I think reading those free posts from 321gold.com is probably sufficient, since Zeal Intelligence offers few actual stock picks.

The above is SOLELY my own opinion as a past subscriber. Please read my disclaimer. I welcome any other differing opinions and comments posted in the comment sections. All people are advised to read the comment sections for any other inputs.

This is a reminder that there is the last money bomb for 2007 this Sunday on Dec 16, 2007. I have pledged myself to donate $100 or more on that day at TeaParty07.com. But even if you just donate $5, that’s a mass democracy in action. Stand up and join together. Don’t let the big wallstreet and corporates to take over our government.

A money bomb for Ron Paul is a way to garner media attention to create the most donation per calendar day. This is to combat the deliberate disregards from the traditional media. On the previous successful money bomb in November, Ron Paul raised about 4 million dollar in a single day, breaking the records for all presidential candidates. I didn’t know about the November money bomb, and didn’t participate in it. But I expect that this December money bomb will make new history. Be part of the this history in making by donating just $5 or $10 here.

The biggest reason that I stand behind Ron Paul is because of his fiscal and foreign policies. This country has gone too far and too long in the wrong direction, and it’s time to down-size the big government and streamline the operations without wasting even more taxpayers’ money. Ron Paul’s understanding and his actions behind the fiscal and foreign policies are unparalleled and unmatched by ANY presidential candidates. I have registered myself as a Republican (converting from a Democrat) so that I can vote in Republican Primaries next year in California. I hope you will also join me because the future of this country is at stake.

If you are a citizen, you should love this country. If you love this country, you should support your presidential candidate. Be PATRIOTIC. Don’t be apathetic. Donate what you can, and take a stand, and vote. A democracy without participation is the same as having no freedom of voices. The big money and corrupted political power fosters and grows from the apathy of every voter. Ron Paul is one of the very few candidates that garner all grassroot supporters from all walks of lives. Be part of it.

It’s near the end of year. Time to sanity check your finances.

I just pulled my free credit reports from annualcreditreport.com which is a site mandated by government to provide annual free credit reports for consumers. Since there are 3 reporting agencies, I normally just check my credit reports twice or three times a year by spacing out the check every four months. This way you can catch the credit fraud in about four months before the identity theft becomes totally out of control. And if you worry about remembering which credit agency you used last time, it’s not a problem. The site will deny your access if you have checked your credit report from the same agency within the same year.

And yeah, mine and my wife’s have all checked out clean. I even closed a couple of accounts that I was not using at all.

Of course, you can buy any of those monthly credit guard services, so that you don’t need to review your own credit reports once in awhile. I opt for these free reports. This is just another inconvenience and precaution needed caused by rampant frauds in our society.

In a bull market, it’s more dangerous to be out-of-market, rather than be in the market. The current correction in HUI looks like to be almost over, coincident to the rise of $USD.

Despite the fear in rally in $US to derail HUI, and/or a serious stock market correction due to mortgage problems, the chart of HUI looks eerily similar to the correction back in 2005.

According to the ChartWorks from Bob Hoye at InstitutionalAdvisors.com, the best time to buy gold is when $US just crosses above the 20-days EMA level, estimated to be from Dec 28th to Jan 18th. To collaborate with the above timing window, I played with my MACD calculator by projecting future prices of HUI in the following four scenarios: flat, downward, slightly upward, and down and then up. The last valid data point is on Friday of Dec 7th, closing at 412.06. The projected chart stops when MACD makes a bullish cross-over.

1. Flat (stay at 400 for 13 days):

2. Downward (-3 points for 14 days to 371, and then stay at 375 for 6 days):

3. Slightly upward (+2 points for 5 days from 408, 410, 412, 414, 416):

4. down and then up (-2 points for 12 days down to 400, and then +2 points for 4 days):

From all of the above scenarios, the MACD indicator is certainly going to have a bullish crossover from Dec 14 to Jan 4 (in 5 sessions to 20 sessions in the worst case). The previous significant buy signal from MACD triggered at around the bottom of HUI near August 16. With all the fundamentals working in favor of a continuing gold bull market, I expect that the time to over-weight gold market is very close. I hope to see spot gold to correct back to 720 to 745 area before I jump back into HUI (via GDX). But again, don’t you want to miss the train!

Just a note, depending on the price action, the actual bullish MACD may be later than earlier. Essentially, lower prices will delay this signal.

I am sickened by Paulson and Bush’s bailout plans. On the other hand, I know that this subprime/negative ARM mortgage problem is a bigger hole than anyone can imagine. Florida, orange county in California, Montana, and more pension funds and money market funds will be hit one after another. The cover-up and blow-up will only come at the last minute, which is too late for you or anyone to do anything about it.

In any case, let’s look at some details of the plan from the available news from Bloomberg:

1. The covering period is origination from Jan 1st 2005 to July of 2007, and resets in Jan 2008 to July 2010. This will cover majority of the mortgages, except the early adopters in 2004. It even covers the people who have already reset, for example with a 2-year ARM reset between Jan/Jul 2007.
2. To be eligible, borrowers must be less than 60 days behind the payment, and have LESS than 3 percent equity in their property. Also, the borrower must have a FICO score of 660 or below. Now everyone is going to go out and start defaulting on every credit card to lower their FICO score. And take out a home equity loan to go below 3% LTV, putting that cash elsewhere. How smart the plan is! Talk about moral hazards.
3. The result of the bailout is a freeze on rates (I’m still not clear on whether it’s payment or interest rate or both), or refinancing into another mortgage, possibly (or I should say most likely) back by Federal Housing Administration loans. Certainly FHA will pick up many of the junks from big banks and write them off through taxpayer’s money.

Now the biggest issues with the bailout as I see it is best put forth by Scott Simon, head of mortgage and asset-backed bond investing at Pacific Investment Management:

“The things that make the U.S. mortgage market the capital-market success that it is are property rights and the sanctity of contracts, so they have to be careful to not damage either one of those.”

And Republican Mike Castle of Delaware was daring enough to propse to offer a safe harbor clause from legal liability to mortgage servicers.

Based on the details that I gather, it appears that the bailout will be done by mortgage servicers probably through brute force, without even gaining consents from the mortgage bond investors. That is just NOT good. That is violating property rights and contract laws. The US government (especially the head of FDIC) is debasing the very foundation of this country (not to mention a debasing US dollar). How can government intervene into a private contract, and decide who is going to be benefited, and who (all the renters, conservative home buyers, and mortgage bond investors) will be hurt, or have their rights/properties taken away?

Certainly, this bailout plan is really intended for banks and financial institutions, so that they can keep valuing their mortgage holdings at a higher artificial unreal price. In the meantime, all the $US dollar holders and majority of the citizens will get screwed by even higher inflation to come, so that the housing prices can be stabilized at a nominal inflation-non-adjusted prices. Basically, US government is trying to prevent a normal deflationary cycle after an abnormal inflationary housing cycle (created by Greenspan’s ultra-low interest rates). Of course, such inflationary actions will simply exhibit itself later in more inflation later in whatever hot money decides to chase afterwards.

The whole bailout plan and most of Greenspan’s past actions are MORAL HAZARD. That is the reason that our capitalistic society is getting more and more speculative year after year, and that the speculation fireworks are rising to ever higher height, and also dropping to ever deeper abyss. Capitalism with moral hazards created by government bailouts is no longer a free enterprise market. When a risky bet no longer has the risks because of government bailouts, everyone becomes (and wants to become) a speculator. This is the society that we lives in. And the caution from fiscal conservatives is always penalized by the lost gain (due to inflation).

As I have said earlier, the real loser when the housing bubble bursts is really everyone. And our losses are not just financial due to loss of purchasing power because of higher inflation, or reduced benefits or credit interest rates in our pension or bank accounts. Our biggest loss for a society as a whole throughout the bubble process is that we have all become speculators in the long term. And when everyone becomes a speculator, nobody can gain from speculation.

P.S. Thanks to Keith at HousingPanic, I vicariously release all of my resentment through reading his blog. I wouldn’t want to go that far like in his blog at least verbally here on my blog. But I certainly agree with him on many of his well-made points.

Last night my wireless router is down. I had to connect my laptop directly thru ethernet physically to the wireless router, in order to get onto the internet and blog. Today’s post is therefore late than usual.

I spend some time shopping for wireless routers, and found a really good deal at target.com for the latest and greatest 802.11n router. It’s a D-link 802.11n router, and it’s only $40. If anyone is thinking of getting a new router, this N router is as cheap as other G/A/B router.

For those who are not familiar with 802.11 wireless technologies, 802.11b is the slowest. 802.11g is faster than 802.11b and the most common choice now. 802.11a is the least compatible and rare. And the new 802.11n is about 5X faster than 802.11g, and will be the next generation wireless technology for everyone’s home. Using 802.11n, one can probably transfer big files wirelessly at a very fast speed. More importantly, I believe in the next 2 to 3 years, you can watch HD TV wireless “everywhere” in your home. The speed of 802.11n is sufficiently to support multiple MPEG2 HD quality channels (not to mention that if you use MPEG4, you get more than double of that). There are still difficulties for wireless TV due to potential intermittent transmission quality. However, I think those problems can easily be solved, if you simply buffer a lot of video by combining the storage capacity of the hard disk from your PVR (personal video recording) system with 802.11n.

Anyway. It’s probably too much tech talk for someone simply looking for a cheap router. And in case if you are interested in the main companies who provide these wireless technologies, they are ATHR, BRCM, MRVL, listed in alphabetical order. I don’t advise buying any of those high-tech stocks however. But if you think of buying them, you may choose ATHR which is a very focused and strong player. Their design seems to be some 40% better in terms of cost than the competitors.

By the way, I wouldn’t worry so much about the “draft” N. 802.11n has been around for at least 1.5 years now, that I think any shipping products should be like 98% compatible with the final approved standard, if not 100%.

US dollar has rebounded from high 74 to 76 now. One should no doubt take the advantage of this rebound and pick up some euros, yens, canadian, or australian currency. Given that Fed is going to cut the interest rate relentlessly in the coming year 2008, $US will be left without any real support. The previous support at 80 level is now become a resistance.

I’m planning to buy some FXC, FXA, FXE, and maybe FXY. I still haven’t gone full force on precious metals, for the fear of some manipulation dumping move right before the rate cut on Dec 11 (or maybe it is over already). I still view that CEF/GLD/SLV will be safer moves than GDX because GDX is subjected to stock market selling. In any case, I’m ready to move in a big way out of US dollar. This is probably the last good chance that one can take before regretting again.

Unfortunately, you won’t be able to see my cash moves at my networth page because I will be classifying my holdings in foreign currency as cash also. Let’s just say that if you see US dollar index going back to 78, you should definitely exchange out. I will probably making my moves starting low-77 to possibly all the way to high-79 (if it gets there). You can get the quote for US dollar index at www.stockcharts.com by typing “$USD”, or search any futures quote at google.com.

And as I have said in early fall, if you really are super-conservative, you should have opened your bank CD. It’s still not too late. And do NOT ladder your CD. You want to ladder up, NOT ladder down in the interest rate curve.

As many of you know, 2008 is a presidential election year. The presidential elections in American represent in great part windows of opportunity to change the course and direction of the nation, and as such they deserve your careful attention.

After much thoughtful consideration, we bloggers have decided to endorse Ron Paul for President. Paul is a ten term congressman running for president on the Republican ticket. Paul is renowned on Capital Hill for his integrity. In fact he has been called the “One exception to the gang of 535” and the “Most honest man in politics” by former treasury Secretary Simon and current Senator John McCain.

For bloggers, Congressman Paul’ represents the best choice among the current White House contenders. Paul has consistently voted in favor of protecting the unregulated nature of the web and has never voted to tax internet commerce. Like many of you, we think it’s important that the web remain a free and open environment and recognize that a politician who supports these principles is deserving of our vote.

Not only does a Paul presidency offer the opportunity for protection of the internet, Paul has taken a firm stance regarding honest governance and fiscal prudence. In his career as a congressman, Paul has taken the least amount of lobbying money and he has never voted to increase taxes or cast his congressional ballot for an unbalanced national budget.

Like most people, you may also be concerned about taxation and your financial futures. Ron Paul advocates phasing out the IRS and reducing the size and scope of the federal government. In addition, Paul has proposed allowing participating in the social security system to be optional. And – like you we trust more in our own self reliance than in the wisdom of a sluggish and inefficient federal bureaucracy.

In 2008 the best choice may indeed come from within the finest traditions of America – integrity, fiscal prudence and free choice. With strongest conviction, we urge our fellow members of the personal finance community to vote for Ron Paul in 2008.

With Confidence,

James, dinksfinance.com
Frugal, 1stmillionat33.com
Nirav, livingoffdividends.com
Matthew, financeispersonal.com
Alan, successwarrior.typepad.com
Laura, redstateeclectic.com

The Hope Now Alliance is going to freeze the rates on ARM loans instead of letting them reset. That is absolutely unfair to anyone who doesn’t benefit from such deals. Why don’t I get some free points to buy down the interest rate, paid by the alliance too? Of course, if they can get all the investors in different trenches to agree, then I have nothing to say.

In any case, the banks are desperately trying to keep the mortgage losses under cover by whatever means. This freeze of ARM rates will definitely postpone the reckoning day. I originally expect a heavy down year in 2008/2009 for real estate prices. Now I am less sure of such. However, home prices definitely won’t be going up in 2008/2009. Lending standards for new loans are still tight.

One thing that I’m most curious of on the details of the freezing plan is that on all these ARMs, there are both payment and interest rates. When the payment rate is less than the interest rate, the loan is negatively amortized. I really wonder whether they plan to freeze both payment and interest rates, or just the payment rate. My initial guess would be that it would simply the payment rate that will be frozen. In that case, no one involved will take an actual accounting loss. The interest money will continue to pile up, despite the fact that those interest money may never get paid by the subprime homeowners. Obviously, if given long enough time (and a good amount of inflation), eventually home value will exceed and allow the paid off of these interest money. However, for these mortgage investors, they are still at the losing end of the stick. The inflation will eat away any of their recovery of the interest money.

If anyone knows somebody who get into such plan, please ask him and let me know that whether both interest and payment rates are frozen. Thanks in advance.

I assume that such modified loans will still be un-transactionable, or illiquid. No one in their right mind will buy such products. But keeping these loans away from foreclosure will prevent the banks to liquidate the homes and assigned the final value to the loan at loss. And so the fairy tales will go on, and the losses can be slowly written off. Banks can then “properly” meet the capital requirement ratio from FDIC.