if we thought it didn't make sense before---, page-2

Hello pintohoo, nice post I always value your views.

I have been flat out getting clients out of gas, oil, banks and what ever this week and thought I might post a helpful warning. We did not join the carnage of Wednesday we calmly rid ourselves of even more stocks (last few in some cases) yesterday during the lackluster response to the sell off the day before.

Its got nothing to do with the company guys. I hope I am wrong on FML but selling (even possibly in gold) will be due to fear and the need for capital. Anything with a bid can be hit when money freezes up. The spot fire is spreading through the financial system and do not have room here to explain how or the ramifications.

Did you know our awesome safe banks have been loading up margin loans again since the 2008 debacle? Do any of you remember what that caused in 2008?

Did you realize they have to go to the global financial markets for capital to lend for housing or resource projects? Can't see any new projects getting the go ahead while this Dudd rubbish is on the table.

Mortgages going to 11% before you know it so you had better be prepared. They will hate me I do have a small one but locked for 3.5 years well under their current variable rate and I will not pay it off early under these conditions. Maybe I will offset it with cash in another bank after my gold stocks rocket - and use the higher interest I get to pay the cheaper locked loan.

We are connected to global events despite the hubris and ignorance of many amongst the general populace. I hope the disconnect we now see with gold can negate some of the effect on our beloved gold stocks during this market fall.

FML is sound and in a great position however it does not protect them from a hit on the SP. They are lower risk than the less liquid over-bloated unaffordable bubble housing market in my opinion and I will stick to that view. There are now 90,000 mortgages under duress!

Gold is safer than houses and eventually the SP's of debt free gold producers will reflect that.

The FML SP will recover sharply however the maximum downside risk, if gold gets sold off, is 3c in my opinion. This will not be a popular post it is not supposed to be. Did you notice I did not post rave reviews at 5c this time? I was back out of any non core or direct position last week in the mid 5's.

This is serious guys you have two choices - sit and wait it out if you don't have margin loans or income risk - or trade it as you see fit if you have the skill and this will not be easy as many of you are finding out.

Good luck to all.
Cheers,
CW