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Goldcorp Inc. founder Rob McEwen, who has more than $100 million in gold investments, said he expects the metal to top $5,000 an ounce as governments increase the money supply to combat recession.
Bullion will more than double to $2,000 an ounce by the end of next year before rising to McEwen’s target by the end of the cycle, which could take an additional four years, the investor said.
“Politicians around the world are listening to cries from their electorates and they’re giving money to all callers,” McEwen said yesterday in a telephone interview from Toronto.
McEwen, who founded what is now the world’s second-largest gold producer by market value, owns stakes in three Canadian precious-metal explorers worth more than $100 million. He said he also has a “big, big” holding in bullion. Gold gained for the eighth straight year in 2008 amid investor concern the economy would collapse and government efforts to prevent that would increase inflation.
Gold futures for April delivery rose $29.10, or 3.2 percent, to $943.30 an ounce at 11:51 a.m. on the Comex division of the New York Mercantile Exchange, the highest for a most-active contract since July 23. The metal climbed to a record $1,033.90 on March 17.
McEwen said he started buying bullion in August 2007, at the beginning of the subprime mortgage crisis. Gold has jumped 40 percent since Aug. 1 of that year, touching a high of $948.20 today, while the Standard & Poor’s 500 Index has dropped 43 percent.
“I realized we had reached an inflection point regarding money,” McEwen said. “It was all about protecting money, and gold served that purpose.”
McEwen is the largest shareholder in Lakewood, Colorado- based U.S. Gold Corp., Vancouver-based Rubicon Minerals Corp. and Spokane, Washington-based Minera Andes Inc. Vancouver-based Goldcorp is the world largest gold producer by market value after Toronto-based Barrick Gold Corp.
http://www.bloomberg.com/apps/news?pid=20601082&sid=adHg7t8BL5Bg&refer=canada
Wednesday, February 11, 2009
Tuesday, February 3, 2009
Gold drops 2 percent but financial fears buoy sentiment
Mon Feb 2, 2009
Gold dropped more than 2 percent on Monday, holding just above $900 an ounce as short-term investors took profits on signs of weak jewelry demand and selling related to technical resistance.
Analysts, however, say prices will be underpinned by investors looking for a safe place to park their assets, away from the turbulence in equity markets.
"Gold is currently working as a 'fear indicator', signaling risk aversion of market participants," said Eugen Weinberg, commodities analyst at Commerzbank.
"Strong investment demand should help gold prices to stay around $900 in coming days ... Over the last few weeks the gold price has increased despite a significantly stronger dollar and news about a massive fall in Indian gold imports."
Spot gold traded $904.10 an ounce at 2:17 p.m. EST, down 2.4 percent from the last trade $927.00 on Friday in New York.
U.S. gold futures for April delivery settled down $21.20, or 2.3 percent, at $907.20 an ounce on the COMEX division of the New York Mercantile Exchange.
Traders said profit taking after gold's recent run higher was behind lower prices on Monday.
India's gold imports plunged more than 90 percent to just 1.2 tonnes in January from 18 tonnes in the same month last year.
India is the world's largest gold consumer and its jewelry sector accounts for almost 70 percent of global bullion demand.
A stronger U.S. currency would normally weigh on gold as it makes the precious metal, priced in dollars, more expensive for holders of other currencies.
SCALE OF INTEREST
But over the last few days both the dollar and gold have moved in the same direction. Data showing falling consumer spending and income in the United States did little to dampen investor interest in the dollar.
"People are looking at the longer-term prospect. Everything is in trouble now, and who knows what's going to happen to the dollar in the longer run. So, gold is perceived to be safer," said one precious metals broker in New York.
The scale of investor interest can be seen in the world's largest gold-backed exchange-traded fund (ETF), the SPDR Gold Trust, which as of January 29 held a record 843.59 tonnes of gold, up 10.71 tonnes from January 27.
Whether gold can reach its record high of $1,030.80 an ounce, hit last March, is still under debate and opinions, as seen in a recent Reuters survey, are varied.
The survey of more than 50 precious metals analysts showed a range of between $650 and $1,150 an ounce for this year.
For platinum, the range for this year is $750 to $1200. The metal, used in autocatalysts to help clean car emissions, is down nearly 60 percent since a record high of $2,290 an ounce March.
Recession and slumping car sales around the world and expectations of worse to come for the auto sector will keep prices low, analysts say.
Spot platinum traded at $968.50 an ounce, down 1.7 percent from its last finish of $985.
Silver was at $12.38 an ounce, down 2 percent from its previous close of $12.63, and palladium was at $195.00 an ounce, up 2.1 percent from its previous close $191 on Friday.
http://uk.reuters.com/article/hotStocksNewsUS/idUKTRE5115EL20090202
Gold dropped more than 2 percent on Monday, holding just above $900 an ounce as short-term investors took profits on signs of weak jewelry demand and selling related to technical resistance.
Analysts, however, say prices will be underpinned by investors looking for a safe place to park their assets, away from the turbulence in equity markets.
"Gold is currently working as a 'fear indicator', signaling risk aversion of market participants," said Eugen Weinberg, commodities analyst at Commerzbank.
"Strong investment demand should help gold prices to stay around $900 in coming days ... Over the last few weeks the gold price has increased despite a significantly stronger dollar and news about a massive fall in Indian gold imports."
Spot gold traded $904.10 an ounce at 2:17 p.m. EST, down 2.4 percent from the last trade $927.00 on Friday in New York.
U.S. gold futures for April delivery settled down $21.20, or 2.3 percent, at $907.20 an ounce on the COMEX division of the New York Mercantile Exchange.
Traders said profit taking after gold's recent run higher was behind lower prices on Monday.
India's gold imports plunged more than 90 percent to just 1.2 tonnes in January from 18 tonnes in the same month last year.
India is the world's largest gold consumer and its jewelry sector accounts for almost 70 percent of global bullion demand.
A stronger U.S. currency would normally weigh on gold as it makes the precious metal, priced in dollars, more expensive for holders of other currencies.
SCALE OF INTEREST
But over the last few days both the dollar and gold have moved in the same direction. Data showing falling consumer spending and income in the United States did little to dampen investor interest in the dollar.
"People are looking at the longer-term prospect. Everything is in trouble now, and who knows what's going to happen to the dollar in the longer run. So, gold is perceived to be safer," said one precious metals broker in New York.
The scale of investor interest can be seen in the world's largest gold-backed exchange-traded fund (ETF), the SPDR Gold Trust, which as of January 29 held a record 843.59 tonnes of gold, up 10.71 tonnes from January 27.
Whether gold can reach its record high of $1,030.80 an ounce, hit last March, is still under debate and opinions, as seen in a recent Reuters survey, are varied.
The survey of more than 50 precious metals analysts showed a range of between $650 and $1,150 an ounce for this year.
For platinum, the range for this year is $750 to $1200. The metal, used in autocatalysts to help clean car emissions, is down nearly 60 percent since a record high of $2,290 an ounce March.
Recession and slumping car sales around the world and expectations of worse to come for the auto sector will keep prices low, analysts say.
Spot platinum traded at $968.50 an ounce, down 1.7 percent from its last finish of $985.
Silver was at $12.38 an ounce, down 2 percent from its previous close of $12.63, and palladium was at $195.00 an ounce, up 2.1 percent from its previous close $191 on Friday.
http://uk.reuters.com/article/hotStocksNewsUS/idUKTRE5115EL20090202
Monday, February 2, 2009
Gold ready to rumble
Today we've got falling prices. Many pundits are saying that today's falling prices are caused by deflation. Well whatever they're caused by it's hard to argue against gold being clearly the winning investment. With the price of gold hovering around $900 it's definitely living up to its oft proven history of preserving purchasing power.
Gold's rise in purchasing power compared to the price drop in other commodities is lowering the cost of energy and other capital and material costs for gold producers. Pretty sweet to be a producer with rising product prices because of investor demand, tightening supply and dropping production costs!
And our gold producers are quickly becoming market darlings. This is happening right now because dropping prices makes mining, milling and G&A costs a lot cheaper. It directly effects their bottom line making them suddenly attractive to main stream investors whose normal stocks are a whole lot less attractive.
But what if we're not seeing deflation, a decrease in the money supply, but a temporary slowdown in the velocity of money? "The velocity of money is the average frequency with which a unit of money is spent in a specific period of time." Wikipedia
In other words prices are falling because demand has dried up, not from a decrease in the money supply. People get some money and they're holding onto it. Plus by far the largest percentage of the bailout money is still locked in bank coffers. Sooner or later, in my opinion much sooner than later, people will start spending and banks lending, money will flow. I believe the plan to get the worlds economy back on track by massive monetary stimulation will work, as a matter of fact I believe it'll work so well we're heading, over the next few years, to a massive hyperinflationary blow-off, Weimar Germany style.
Consider the following:
* The US is going to issue untold trillions to pay for the bailout programs. As of now this money is sitting in bank coffers unused and providing the banks no return. Since banks are in the habit of making money by lending money this money won't be gathering dust for long. And with the multiplier effect will become many times over what they now have on their ledgers.
* Medicaid and Medicare have no money in their respective accounts.
* Social Security is broke and the first baby boomers are starting to retire at the same time the workforce is shrinking. And increasing the number of government workers doesn't count towards filling the gap necessary to fully fund retirements as government workers are paid by taxing existing workers or creating money to pay them.
* World wide infrastructure building and improvement plans costing trillions of dollars. This will be paid for in large part by the spending of US $'s held in Foreign Reserve accounts. That means a lot of dollars are going to be coming home to roost. The United States will pay for its programs and multi trillion dollar deficits for years to come by printing money.
* Existing wars, future planned and unplanned wars, escalation of wars. War on drugs, war on terror, resource wars etc etc etc.
* And lets not forget one of President Obama's first acts was pissing off the Chinese by calling them currency manipulators. Are they going to continue supporting US spending by continuing to purchase their debt? If they stop then the US has to monetize its debt, buy it themselves, which is the most inflationary thing a country can do.
* Tax cuts.
What happens to our gold investments, the ones that are looking pretty good right now, when "deflation" turns to inflation? And since the broad money supply is growing at a rate of +13% a year and the monetary base has gone pretty much parabolic, doubling in a year, which is to say the dollar you held last year has had its value effectively cut in half today. I think it's a safe conclusion we're headed for a price reversal sooner rather than later. Does gold serve us as well in an inflationary environment as it's serving now?
Gold shines brightest in inflationary times. The ongoing deflationary scare is a buying opportunity for gold and gold company shares. The real threat facing us today is the coming massive rise in prices right across the board caused by the ongoing world wide increase in the monetary base. I'm not sure how long it will take for all the money creation to work its way through the pipeline but its coming and with trillion dollar deficits being promised for years to come once it starts it isn't going to stop anytime soon. When investors wake up to this fact we'll see a flood of money into all things gold.
That deluge of money will start hitting the major gold producers and ETF's first then trickling down to the mid tiers then into brownfield juniors well along the track to developing a deposit, those with 43-101's and then into raw greenfield exploration companies.
With world wide gold production down so drastically and the dramatic disruption of the junior markets last year, and continuing still, supply and demand is going to be completely out of whack. There will be fierce competition for stable safe ozs in the ground by producers having to replace their reserves in an extremely competitive environment.
Today many of our larger gold companies are taking advantage of our present "deflationary" conditions and their strong share prices by selling stock and cashing up their treasuries so they can begin buying up the smaller companies and their deposits. There aren't very many decent sized deposits, ones over two million ozs, left in politically stable countries.
Now I'm not a licensed financial planner, a broker, an analyst, a geologist nor an economist. I'm just an investor who likes junior exploration companies looking for precious metals. And I like them, my juniors, to be in the post discovery resource definition stage. I think gold juniors, without a base metal component to their prospective deposit, are going to be the most rewarding, the most lucrative way to garner the huge rewards from the coming freight train rush to gold. Those golden tracks are being laid today using the world's currencies as ballast. It truly is going to be a time of generational wealth creation for many.
The most profitable, rewarding way to get involved is to own gold shares. And the best gold shares to own will be the shares of companies owning deposits gold producers want to buy. I mentioned "post discovery resource definition stage." These companies have already found something and are working to see exactly what they have. A lot of the risk, and a lot of waiting time for the company to actually make a discovery worth looking at has been removed for us, the investor.
With good drill results and the junior successfully moving the project along the development path towards a mine hopefully a majors interest will be sparked. If this all happens according to plan your payback as an investor during this stage can be a many fold return of invested capital.
Let's step back for a moment and consider what happens if I'm wrong about falling prices and are they here to stay. Well that's the beauty of gold. It works well in either situation, better in inflation but still very good in a falling price regime as its doing today. Add in geo-political tensions, falling supply and it seems like a perfect storm is developing for gold. Whichever way the wind blows from this point in history gold and its related investments should do well.
At Ahead of the Herd we believe there is opportunity in times of crisis, that the set of circumstances we find ourselves in are better than they have ever been for astute and courageous investors. Are you going to be part of the group that plans to take advantage of the tremendous opportunity being presented for extraordinary gains?
http://www.midasletter.com/commentary/09012901_Gold-ready-to-rumble.php
Gold's rise in purchasing power compared to the price drop in other commodities is lowering the cost of energy and other capital and material costs for gold producers. Pretty sweet to be a producer with rising product prices because of investor demand, tightening supply and dropping production costs!
And our gold producers are quickly becoming market darlings. This is happening right now because dropping prices makes mining, milling and G&A costs a lot cheaper. It directly effects their bottom line making them suddenly attractive to main stream investors whose normal stocks are a whole lot less attractive.
But what if we're not seeing deflation, a decrease in the money supply, but a temporary slowdown in the velocity of money? "The velocity of money is the average frequency with which a unit of money is spent in a specific period of time." Wikipedia
In other words prices are falling because demand has dried up, not from a decrease in the money supply. People get some money and they're holding onto it. Plus by far the largest percentage of the bailout money is still locked in bank coffers. Sooner or later, in my opinion much sooner than later, people will start spending and banks lending, money will flow. I believe the plan to get the worlds economy back on track by massive monetary stimulation will work, as a matter of fact I believe it'll work so well we're heading, over the next few years, to a massive hyperinflationary blow-off, Weimar Germany style.
Consider the following:
* The US is going to issue untold trillions to pay for the bailout programs. As of now this money is sitting in bank coffers unused and providing the banks no return. Since banks are in the habit of making money by lending money this money won't be gathering dust for long. And with the multiplier effect will become many times over what they now have on their ledgers.
* Medicaid and Medicare have no money in their respective accounts.
* Social Security is broke and the first baby boomers are starting to retire at the same time the workforce is shrinking. And increasing the number of government workers doesn't count towards filling the gap necessary to fully fund retirements as government workers are paid by taxing existing workers or creating money to pay them.
* World wide infrastructure building and improvement plans costing trillions of dollars. This will be paid for in large part by the spending of US $'s held in Foreign Reserve accounts. That means a lot of dollars are going to be coming home to roost. The United States will pay for its programs and multi trillion dollar deficits for years to come by printing money.
* Existing wars, future planned and unplanned wars, escalation of wars. War on drugs, war on terror, resource wars etc etc etc.
* And lets not forget one of President Obama's first acts was pissing off the Chinese by calling them currency manipulators. Are they going to continue supporting US spending by continuing to purchase their debt? If they stop then the US has to monetize its debt, buy it themselves, which is the most inflationary thing a country can do.
* Tax cuts.
What happens to our gold investments, the ones that are looking pretty good right now, when "deflation" turns to inflation? And since the broad money supply is growing at a rate of +13% a year and the monetary base has gone pretty much parabolic, doubling in a year, which is to say the dollar you held last year has had its value effectively cut in half today. I think it's a safe conclusion we're headed for a price reversal sooner rather than later. Does gold serve us as well in an inflationary environment as it's serving now?
Gold shines brightest in inflationary times. The ongoing deflationary scare is a buying opportunity for gold and gold company shares. The real threat facing us today is the coming massive rise in prices right across the board caused by the ongoing world wide increase in the monetary base. I'm not sure how long it will take for all the money creation to work its way through the pipeline but its coming and with trillion dollar deficits being promised for years to come once it starts it isn't going to stop anytime soon. When investors wake up to this fact we'll see a flood of money into all things gold.
That deluge of money will start hitting the major gold producers and ETF's first then trickling down to the mid tiers then into brownfield juniors well along the track to developing a deposit, those with 43-101's and then into raw greenfield exploration companies.
With world wide gold production down so drastically and the dramatic disruption of the junior markets last year, and continuing still, supply and demand is going to be completely out of whack. There will be fierce competition for stable safe ozs in the ground by producers having to replace their reserves in an extremely competitive environment.
Today many of our larger gold companies are taking advantage of our present "deflationary" conditions and their strong share prices by selling stock and cashing up their treasuries so they can begin buying up the smaller companies and their deposits. There aren't very many decent sized deposits, ones over two million ozs, left in politically stable countries.
Now I'm not a licensed financial planner, a broker, an analyst, a geologist nor an economist. I'm just an investor who likes junior exploration companies looking for precious metals. And I like them, my juniors, to be in the post discovery resource definition stage. I think gold juniors, without a base metal component to their prospective deposit, are going to be the most rewarding, the most lucrative way to garner the huge rewards from the coming freight train rush to gold. Those golden tracks are being laid today using the world's currencies as ballast. It truly is going to be a time of generational wealth creation for many.
The most profitable, rewarding way to get involved is to own gold shares. And the best gold shares to own will be the shares of companies owning deposits gold producers want to buy. I mentioned "post discovery resource definition stage." These companies have already found something and are working to see exactly what they have. A lot of the risk, and a lot of waiting time for the company to actually make a discovery worth looking at has been removed for us, the investor.
With good drill results and the junior successfully moving the project along the development path towards a mine hopefully a majors interest will be sparked. If this all happens according to plan your payback as an investor during this stage can be a many fold return of invested capital.
Let's step back for a moment and consider what happens if I'm wrong about falling prices and are they here to stay. Well that's the beauty of gold. It works well in either situation, better in inflation but still very good in a falling price regime as its doing today. Add in geo-political tensions, falling supply and it seems like a perfect storm is developing for gold. Whichever way the wind blows from this point in history gold and its related investments should do well.
At Ahead of the Herd we believe there is opportunity in times of crisis, that the set of circumstances we find ourselves in are better than they have ever been for astute and courageous investors. Are you going to be part of the group that plans to take advantage of the tremendous opportunity being presented for extraordinary gains?
http://www.midasletter.com/commentary/09012901_Gold-ready-to-rumble.php
Thursday, January 22, 2009
Gold ends higher as investors seek a safe haven
Gold futures ended higher Thursday, as investors sought a safe haven amid grim economic data and falling U.S. equities. Gold for February delivery rose $8.70 to end at $858.80 an ounce on the New York Mercantile Exchange. Earlier, the contract had fallen to an intraday low of $844.40.
http://www.marketwatch.com/news/story/gold-ends-higher-investors-seek/story.aspx?guid=%7B07F7C29F-F195-4F7A-8B6E-C1A294300E8B%7D&dist=msr_5
http://www.marketwatch.com/news/story/gold-ends-higher-investors-seek/story.aspx?guid=%7B07F7C29F-F195-4F7A-8B6E-C1A294300E8B%7D&dist=msr_5
Sunday, January 11, 2009
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Join This Superior Affiliate Program
Earn substantial commissions Per Subscription...
And Lifetime Commissions on Renewals!
The program we are referring to, hailed as "the best affiliate program on the Net," allows serious full-time entrepreneurs to make a great living, while allowing part-timers to build a solid second income.
By becoming an Affiliate, you will:
* Earn $75 for each subscription. * Get paid annual commission on each and every SBI! renewal with our lifetime customer policy. * Even earn commissions from 2 tiers of income through sales made by your own team of affiliates, just like Sales Directors in large companies!
Over half of Site Build It! owners purchase more than one SBI! (some over 10!). Since the customer is yours for a lifetime, you earn commissions on those multiple sales. And, of course, on their renewals, too!
The earnings really add up, fast.
You will also receive several Sitesell resources (Orientation Guide, Quick Start Guide, and Free Marketing Guide) and access to the extensive Promotion Center where you are provided with simple-to-use tools, strategies, and advice to help you succeed... both online and off.
(No, you don't even need a Web site. We offer special OFFline tools and strategies, too!)
It is absolutely free to join and only takes a minute to sign up..
http://vur.me/nordic/workfromhome
Friday, December 19, 2008
Mass. investor saw inside Madoff scam
BOSTON – His repeated warnings that Wall Street money manager Bernard Madoff was running a giant Ponzi scheme have cast Harry Markopolos as an unheeded prophet.
But people who know or worked with Markopolos say it wasn't prescience that helped him foresee the collapse of Madoff's alleged $50 billion fraud. Instead, they say diligence and a strong moral sense drove his quixotic, nine-year quest to alert regulators about Madoff.
"He followed through on everything he ever did. He never let up," said his mother, Georgia Markopolos, in an interview Thursday. "Some kids just let it go if it's too hard, but he wouldn't do that."
"He feels very sorry for these people that got taken," she added. "It wouldn't have happened if they would have listened to him long ago."
Markopolos waged a remarkable battle to uncover fraud at Madoff's operation, sounding the alarm back in 1999 and continuing with his warnings all through this decade. The government never acted, Madoff continued his ways, and people lost billions.
Markopolos reached his conclusion with the help of mathematicians like Dan diBartolomeo, whose analysis of the Madoff's methods in 1999 helped fuel Markopolos' suspicions.
"People should have seen the writing on the wall," diBartolomeo said.
Markopolos did not respond to multiple e-mail or phone requests for an interview.
The 52-year-old resident of Whitman, about 20 miles south of Boston, grew up in Erie, Pa., the oldest of three siblings.
His mother said her son was a little nerdy as a child, as well as occasionally mischievous and unfailingly honest. She recalled an incident where he pelted his elementary school with eggs in the middle of winter, but no one saw him. Time passed with no confession from anyone, until Markopolos stepped forward, admitted he did it, and cleaned the school himself.
Markopolos became an adept hunter and fisherman as he grew up, like many from the rural area, but also showed early aptitude at academics, as well as a willingness to question authority.
"He used to challenge the teachers," his mother said with a laugh. "He'd tell them he had the right answers, but they had the wrong questions."
Markopolos graduated from Cathedral Prep in Erie in 1974, then in 1981 from Loyola College in Maryland, which his mother said he paid for on his own. After time in the Army and in the financial services field, he earned a graduate management degree from Boston College in 1997.
By 1999, he was working for Rampart Investment Management Co. and charged with doing competitive research on Bernard L. Madoff Investment Securities, which was using a similar investment strategy as his company, but far outperforming it. Part of Markopolos's research included a visit to diBartolomeo, whom he knew from his professional circle.
"I think he was curious about how his competitor was doing so much better than they were," diBartolomeo recalled.
Researching Madoff's numbers, using data the firm distributed to prospective investors, diBartolomeo concluded within hours that it was impossible for Madoff to get the returns he reported while using the strategy he said he used.
"As the market goes up and down, this strategy should have done a little better or a little worse, just like everybody else," he said. "Instead, it appeared to be indifferent as to whether the market went up or down. They made money all the time."
Markopolos complained to the SEC's Boston office in May 1999, saying it was impossible for the kind of profit Madoff was reporting to have been gained legally.
But Madoff continued to thrive, even as Markopolos continued to pursue the case.
In 2005, he submitted a report to the SEC saying it was "highly likely" that "Madoff Securities is the world's largest Ponzi scheme." In the report, he says he knew his research could ruin people's careers and asked the SEC be discreet about circulating the report and his name.
"I am worried about the personal safety of myself and my family," he wrote.
The report highlights 29 "red flags" about Madoff's business, among them the returns of a third-party hedge fund managed by Madoff's firm which had negative returns in just seven on the 174 months Markopolos analyzed.
"No major league baseball hitter bats .960, no NFL team has ever gone 96 wins and only 4 losses over a 100 game span, and you can bet everything you own that no money manager is up 96% of the months either," he said.
His warnings were heard too late, and he's become a symbol of a botched oversight of Madoff by the SEC. His mother says the father of three boys under 5 has been bombarded by media requests. Now, a man who tried to be heard for years is going to lay low for a bit, she said.
"Right now, he's out relaxing some place," he said. "I can't even get in touch with him."
http://news.yahoo.com/s/ap/20081219/ap_on_bi_ge/madoff_scandal_whistleblower
But people who know or worked with Markopolos say it wasn't prescience that helped him foresee the collapse of Madoff's alleged $50 billion fraud. Instead, they say diligence and a strong moral sense drove his quixotic, nine-year quest to alert regulators about Madoff.
"He followed through on everything he ever did. He never let up," said his mother, Georgia Markopolos, in an interview Thursday. "Some kids just let it go if it's too hard, but he wouldn't do that."
"He feels very sorry for these people that got taken," she added. "It wouldn't have happened if they would have listened to him long ago."
Markopolos waged a remarkable battle to uncover fraud at Madoff's operation, sounding the alarm back in 1999 and continuing with his warnings all through this decade. The government never acted, Madoff continued his ways, and people lost billions.
Markopolos reached his conclusion with the help of mathematicians like Dan diBartolomeo, whose analysis of the Madoff's methods in 1999 helped fuel Markopolos' suspicions.
"People should have seen the writing on the wall," diBartolomeo said.
Markopolos did not respond to multiple e-mail or phone requests for an interview.
The 52-year-old resident of Whitman, about 20 miles south of Boston, grew up in Erie, Pa., the oldest of three siblings.
His mother said her son was a little nerdy as a child, as well as occasionally mischievous and unfailingly honest. She recalled an incident where he pelted his elementary school with eggs in the middle of winter, but no one saw him. Time passed with no confession from anyone, until Markopolos stepped forward, admitted he did it, and cleaned the school himself.
Markopolos became an adept hunter and fisherman as he grew up, like many from the rural area, but also showed early aptitude at academics, as well as a willingness to question authority.
"He used to challenge the teachers," his mother said with a laugh. "He'd tell them he had the right answers, but they had the wrong questions."
Markopolos graduated from Cathedral Prep in Erie in 1974, then in 1981 from Loyola College in Maryland, which his mother said he paid for on his own. After time in the Army and in the financial services field, he earned a graduate management degree from Boston College in 1997.
By 1999, he was working for Rampart Investment Management Co. and charged with doing competitive research on Bernard L. Madoff Investment Securities, which was using a similar investment strategy as his company, but far outperforming it. Part of Markopolos's research included a visit to diBartolomeo, whom he knew from his professional circle.
"I think he was curious about how his competitor was doing so much better than they were," diBartolomeo recalled.
Researching Madoff's numbers, using data the firm distributed to prospective investors, diBartolomeo concluded within hours that it was impossible for Madoff to get the returns he reported while using the strategy he said he used.
"As the market goes up and down, this strategy should have done a little better or a little worse, just like everybody else," he said. "Instead, it appeared to be indifferent as to whether the market went up or down. They made money all the time."
Markopolos complained to the SEC's Boston office in May 1999, saying it was impossible for the kind of profit Madoff was reporting to have been gained legally.
But Madoff continued to thrive, even as Markopolos continued to pursue the case.
In 2005, he submitted a report to the SEC saying it was "highly likely" that "Madoff Securities is the world's largest Ponzi scheme." In the report, he says he knew his research could ruin people's careers and asked the SEC be discreet about circulating the report and his name.
"I am worried about the personal safety of myself and my family," he wrote.
The report highlights 29 "red flags" about Madoff's business, among them the returns of a third-party hedge fund managed by Madoff's firm which had negative returns in just seven on the 174 months Markopolos analyzed.
"No major league baseball hitter bats .960, no NFL team has ever gone 96 wins and only 4 losses over a 100 game span, and you can bet everything you own that no money manager is up 96% of the months either," he said.
His warnings were heard too late, and he's become a symbol of a botched oversight of Madoff by the SEC. His mother says the father of three boys under 5 has been bombarded by media requests. Now, a man who tried to be heard for years is going to lay low for a bit, she said.
"Right now, he's out relaxing some place," he said. "I can't even get in touch with him."
http://news.yahoo.com/s/ap/20081219/ap_on_bi_ge/madoff_scandal_whistleblower
Wednesday, December 17, 2008
Swiss gold bullion in huge demand as trust in banks dives
Sealed off by grey concrete walls and barbed wire, the workmen in protective glasses and steel-toed boots at this smelter cannot work fast enough to meet demand from the nervous rich for gold.
This refinery near Lake Lugano in the Alps is running day and night as people worried about recession rush to switch their assets into something that may hold its value.
"I have been in the gold business for 30 years and I have never experienced anything like this," said Bernhard Schnellmann, director for precious metal services at the refiner Argor-Heraeus, one of the world's three largest.
"Production has dramatically increased since the middle of the year. We cannot cope with demand," said Schnellman, wearing a gold watch on his wrist.
Spot gold hit a record $1,030.80 an ounce on March 17. It fell below $700 in late October, partly because investors sold their holdings to cover losses in equity and bond markets hit by the credit crisis, and is now around $830 an ounce.
The trigger for the price to rise again could come from a much weaker dollar, making gold cheaper for holders of other currencies, and a renewed aversion to paper assets as governments and central banks pump large amounts of cash into the economy, stoking inflation.
Smoke billows as the molten gold, like glowing butter, is poured. To cool it, the worker drops it into water. It hisses as it hits. Once hardened in moulds, the gold bars are embossed with the refinery's seal. Workers wearing white gloves stack them into boxes like domino pieces.
Though Switzerland is not a gold miner, it is home to some of the world's largest refineries, which process an estimated 40 percent of all newly mined gold.
Argor-Heraeus is part-owned by the Austrian Mint and a subsidiary of Germany's Commerzbank. Commercial and central banks are its chief customers and it says it processes some 350-400 tonnes of gold and 350 tonnes of silver per year.
Customers buying gold bars, which can weigh more than 10 kg each, have to wait roughly a month, taking into account the year-end holiday season.
For those buying coins or ingots, which can fit into the palm of a hand, the delay is six to eight weeks. A year ago, these small products could be had within a couple of days.
Worries about the banking system globally have boosted worldwide demand for physical gold, the Gold Council said.
"Many (people) are afraid of leaving their money in banks," said Sandra Conway, managing director at ATS Bullion in London, which sells bullion and gold coins to institutions and the retail market.
"It's difficult to quantify, but I would say our turnover over the last three months has certainly doubled compared to the previous three months," she said.
FULL CAPACITY
Other Swiss gold refiners also say business is booming.
"Since the summer we have experienced a sharp rise in demand for certain gold products. The one-kilo bar has become very popular," said Fiorenzo Arbini, in charge of health and safety at Pamp, another large Swiss refiner.
"People used to buy certificates, now they want physical gold."
Schnellmann said the Argor-Heraeus smelter is operating at full capacity, three eight-hour shifts a day. Conquering the backlog by hiring is difficult, because each candidate has to undergo a security check.
Gold refiners were established in Switzerland to supply the watch industry and, later, jewellery-makers in Italy.
Switzerland's largest banks stepped in to replace a void in gold trading while the London gold market was shut after World War Two and again during a brief closure in 1968.
The former Soviet Union, another top gold producer, chose Zurich banks to handle most of its gold sales in the 1970s and 1980s.
"Gold has an image of being the asset of last resort. This could be viewed as old-fashioned but this is how enough people with enough money to matter think," said Stephen Briggs, a metals strategist at RBS Global Banking & Markets.
GOLD TOUCH
India, China and the Middle East remain the biggest gold importers, particularly for jewellery. But demand for physical gold has exploded also in Europe, the Gold Council said.
In Switzerland, home to the world's largest private banking industry, demand for gold bars and coins shot up six-fold to 21 tonnes in the third quarter of 2008, more than in any other European country.
Retail investment in gold rose 121 percent in the third quarter of 2008, an important contributor to the overall increase in global demand, the Gold Council said.
In that period purchases of gold bars by retail investors, who often buy through commercial banks, rose nearly 60 percent, notably in Switzerland, Germany, and the United States.
There was a surge of interest among professional investors shortly after the collapse of Lehman Brothers in September.
Private bank Julius Baer in October launched a fund to invest exclusively in gold bars stored in highly secured vaults in Switzerland.
"The fascination with gold has been there since the beginning of civilisation," said Schnellmann. "It cannot be explained: you can't eat gold, you cannot build anything resistant with it and yet people want to hoard it." (Additional reporting by Pratima Desai in London; Editing by Catherine Bosley and Sara Ledwith)
http://www.mineweb.co.za/mineweb/view/mineweb/en/page34?oid=75294&sn=Detail
This refinery near Lake Lugano in the Alps is running day and night as people worried about recession rush to switch their assets into something that may hold its value.
"I have been in the gold business for 30 years and I have never experienced anything like this," said Bernhard Schnellmann, director for precious metal services at the refiner Argor-Heraeus, one of the world's three largest.
"Production has dramatically increased since the middle of the year. We cannot cope with demand," said Schnellman, wearing a gold watch on his wrist.
Spot gold hit a record $1,030.80 an ounce on March 17. It fell below $700 in late October, partly because investors sold their holdings to cover losses in equity and bond markets hit by the credit crisis, and is now around $830 an ounce.
The trigger for the price to rise again could come from a much weaker dollar, making gold cheaper for holders of other currencies, and a renewed aversion to paper assets as governments and central banks pump large amounts of cash into the economy, stoking inflation.
Smoke billows as the molten gold, like glowing butter, is poured. To cool it, the worker drops it into water. It hisses as it hits. Once hardened in moulds, the gold bars are embossed with the refinery's seal. Workers wearing white gloves stack them into boxes like domino pieces.
Though Switzerland is not a gold miner, it is home to some of the world's largest refineries, which process an estimated 40 percent of all newly mined gold.
Argor-Heraeus is part-owned by the Austrian Mint and a subsidiary of Germany's Commerzbank. Commercial and central banks are its chief customers and it says it processes some 350-400 tonnes of gold and 350 tonnes of silver per year.
Customers buying gold bars, which can weigh more than 10 kg each, have to wait roughly a month, taking into account the year-end holiday season.
For those buying coins or ingots, which can fit into the palm of a hand, the delay is six to eight weeks. A year ago, these small products could be had within a couple of days.
Worries about the banking system globally have boosted worldwide demand for physical gold, the Gold Council said.
"Many (people) are afraid of leaving their money in banks," said Sandra Conway, managing director at ATS Bullion in London, which sells bullion and gold coins to institutions and the retail market.
"It's difficult to quantify, but I would say our turnover over the last three months has certainly doubled compared to the previous three months," she said.
FULL CAPACITY
Other Swiss gold refiners also say business is booming.
"Since the summer we have experienced a sharp rise in demand for certain gold products. The one-kilo bar has become very popular," said Fiorenzo Arbini, in charge of health and safety at Pamp, another large Swiss refiner.
"People used to buy certificates, now they want physical gold."
Schnellmann said the Argor-Heraeus smelter is operating at full capacity, three eight-hour shifts a day. Conquering the backlog by hiring is difficult, because each candidate has to undergo a security check.
Gold refiners were established in Switzerland to supply the watch industry and, later, jewellery-makers in Italy.
Switzerland's largest banks stepped in to replace a void in gold trading while the London gold market was shut after World War Two and again during a brief closure in 1968.
The former Soviet Union, another top gold producer, chose Zurich banks to handle most of its gold sales in the 1970s and 1980s.
"Gold has an image of being the asset of last resort. This could be viewed as old-fashioned but this is how enough people with enough money to matter think," said Stephen Briggs, a metals strategist at RBS Global Banking & Markets.
GOLD TOUCH
India, China and the Middle East remain the biggest gold importers, particularly for jewellery. But demand for physical gold has exploded also in Europe, the Gold Council said.
In Switzerland, home to the world's largest private banking industry, demand for gold bars and coins shot up six-fold to 21 tonnes in the third quarter of 2008, more than in any other European country.
Retail investment in gold rose 121 percent in the third quarter of 2008, an important contributor to the overall increase in global demand, the Gold Council said.
In that period purchases of gold bars by retail investors, who often buy through commercial banks, rose nearly 60 percent, notably in Switzerland, Germany, and the United States.
There was a surge of interest among professional investors shortly after the collapse of Lehman Brothers in September.
Private bank Julius Baer in October launched a fund to invest exclusively in gold bars stored in highly secured vaults in Switzerland.
"The fascination with gold has been there since the beginning of civilisation," said Schnellmann. "It cannot be explained: you can't eat gold, you cannot build anything resistant with it and yet people want to hoard it." (Additional reporting by Pratima Desai in London; Editing by Catherine Bosley and Sara Ledwith)
http://www.mineweb.co.za/mineweb/view/mineweb/en/page34?oid=75294&sn=Detail
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