Bill Gross Tweet Shorting German 10-Year Bunds

A week later, Janus' Gross' trade shorting German Bunds has already paid off big.

Gross: German 10yr Bunds = The short of a lifetime. Better than the pound in 1993. Only question is Timing / ECB QE

— Janus Capital (@JanusCapital) April 21, 2015

Commodities, basic metals, and precious metals

Here is a bullish case for basic metals and the increasing urbanization of the world's population, especially in emerging countries like China, India, and Brazil.

http://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=96498&sn=Detail&pid=1

Here is an article on a shortage of physical silver coins.

http://www.coinnews.net/2010/01/24/us-mint-silver-eagle-sales-top-3-million-best-ever-january/

The shortage of physical silver due to investor demand is openly acknowledged, as coin dealers are buying at prices ABOVE the spot price, and selling at even higher premiums. The spot price and prices on the COMEX futures do not reflect this physical shortage--yet. That's because the bullion banks are artificially suppressing the price of silver by shorting paper certificates via the SLV ETF, and shorting COMEX futures contracts. This fundamental disconnect between the prices of silver in the futures contracts and available physical inventory of silver will eventually be resolved, resulting in a soaring price. Price manipulation can only work so long before basic economic laws of supply and demand eventually materialize.

Disclosure: long silver mining shares.

GM on the ropes

I've stated for months that General Motors will be insolvent within 18 months (now 12 months--see previous blogs), and now CNBC is splashing it all over the headlines today. Shorting it was the call. It may go down further, but if this trade was put in a while back, it's time to cover and take profits. I may miss out on further gains, but there's no need to be greedy.

The larger issue is the cascading of financial crises from one sector to another, and to the general economy overall. The capitulation is coming (despite several false proclamations already), and we want to see a definitive bottom forming before jumping back in. I will confess that I nibbled at quality yesterday on long-term plays, but it is still too early to catch the falling knife. Warren Buffett stepped up big with Goldman Sachs and GE, and in hindsight, could have bought better (and lower). Even the best of the best can be early. But let's face it--even he admits he is a lousy market timer--he is a long-term value buyer, being a Benjamin Graham disciple. His participation means we're closer to a bottom than a top, but the market and the economy still need to unwind some more before I feel confident we indeed have reached bottom. My rule (and one I don't always follow, to my detriment), is to sell early (to avoid the bulk of the carnage), and buy late (even if it means I don't catch the exact bottom). Specifically, I want to see confirmation, and right now, we're not anywhere near close to that.

As usual, I am not dispensing advice and please consult your investment advisor, but the call here is to play some more golf--you'll save money for now.