I’m flying back from Phoenix today.  Here’s what I’m reading as I wait for the rest of Phoenix to wake up (I’m still on East Coast time).

First, more on the euro’s troubles, in Eastern Crisis that Could Wreck the Eurozone

Manufacturing and shipping around the world are collapsing.  And people wonder why we worry about the world’s financial system running off the rails.

Treasury Secretary Geithner is a tool of his friends on Wall Street, as this opinion piece shows: Banking on the Brink. The money quote (for me, anyway) …

The real question is why the Obama administration keeps coming up with proposals that sound like possible alternatives to nationalization, but turn out to involve huge handouts to bank stockholders.

The news isn’t helping the dollar. Dollar Falls Versus Euro, Yen on Speculation U.S. to Raise Citigroup Stake

The dollar and the yen fell against the euro on speculation the U.S. government will increase its stakes in domestic banks to shore up the financial system, damping demand for the currencies as a refuge.

That’s all for now.  I’ll be back in the office tomorrow.  Dinesh and John are watching the portfolios.

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I’m starting to put some charts together for my Money and Markets column later this week.  Here’s one I will probably use …

You can see that the U.S. dollar is doing well, gold is doing better, and silver has turned in the best performance for the year to date.  Crude oil and the S&P 500 have similar losses, which isn’t surprising considering that both are hurt by economic downturn.

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I’m still in Phoenix.  I’m going to appear on Al Korelin’s radio show, which he is taping today (I’m not sure when it broadcasts).  Then I have to go talk to a silver company I find very interesting. Then it’s back to my hotel room to write, write, write.

Marketwatch asks:  “Yellow metal’s rise again outpaces mining shares. Is a bubble in the works?” As I explained to the folks in Phoenix, I don’t think we’re in a gold mania yet.  A pullback wouldn’t surprise me here — I’m good either way.

Why do I think we’re in a for a pullback?  Well, for one thing, there are stories about gold all over the mainstream media.  Even the USA Today is writing about “Investors Grab for Dangled Karats”.  And they quote the usual suspects — James Dines, Doug Casey.  Yeah, a pullback here wouldn’t surprise me at all.

Meanwhile, Larry Edelson wrote to tell me: “This week the Dow/Gold ratio broke important support at the 8.6 level. That strongly implies further big gains in gold and further losses in stocks.”

So, maybe we don’t have to see a pullback before gold goes higher.

But what about energy?  Well, in the oil patch, Pemex’s Cantarell Drops at Fastest Rate in 14 Years.  But demand destruction continues apace.  I don’t expect energy to recover for a couple years. I’d be glad to wrong.  And I’m watching energy as a “tell” for a potential upturn in the economy.

Sunday Morning Reading

I’ve been doing my reading.  Here are some stories I think you’ll find interesting …

John Maudlin has written an excellent piece called “While Rome Burns.” Here’s an excerpt …

The problem is that in Europe there are many banks that are simply too big to save. The size of the banks in terms of the GDP of the country in which they are domiciled is all out of proportion. For my American readers, it would be as if the bank bailout package were in excess of $14 trillion (give or take a few trillion). In essence, there are small countries which have very large banks (relatively speaking) that have gone outside their own borders to make loans and have done so at levels of leverage which are far in excess of the most leveraged US banks. The ability of the “host” countries to nationalize their banks is simply not there. They are going to have to have help from larger countries. But as we will see below, that help is problematical.

If Schadenfreude is your thing, Henry Blodget has put together a list of the financial crisis’ biggest losers.  You can read it here.

Michael Hudson is angry about the Oligarch’s Escape Plan. One small excerpt …

Take the much-vaunted $50 billion program designed to renegotiate mortgages downward for “troubled homeowners.” Upon closer examination it turns out that the real beneficiaries are the giant leading banks such as Citibank and Bank of America that have made the bad loans. The Treasury will take on the bad debt that banks are stuck with, and will permit mortgagees to renegotiate their monthly payment down to 38 percent of their income. But rather than the banks taking the loss as they should do for over-lending, the Treasury itself will make up the difference – and pay it to the banks so that they will be able to get what they hoped to get. The hapless mortgage-burdened family stuck in their negative-equity home turns out to be merely a passive vehicle for the Treasury to pass debt relief on to the commercial bank.

Billmon rips Wall Street a new one in “Chocolate Covered Cotton” (warning –  he swears a lot).  Excerpt:

The carriers (fleas and rats) of this particular epidemic were the bright young Wall Street things who invented the concept of securitized lending – essentially, the repackaging of mortgages, corporate loans, credit card receivables and any other obligations that could quasi-credibly be described as “assets” into allegedly liquid securities that could then be sold to suckers, um, investors the world over.

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I’m speaking in Phoenix today.  We haven’t looked at this one in a while, but here’s a chart of gold versus the US dollar, the S&P 500, the Dow and the CRB.

you can see that, like the last time we looked at this chart, both gold and the dollar are outperforming the market.  But here’s something new — notice how gold is gaining on the dollar? I find that very interesting.

Everyone asks me for stock picks at these conferences.  My main picks are in gold and silver, and my subscribers know them well. But what if I had to make picks outside of gold and silver? That’s tougher.  Here are two I might give the audience …

First, Netflix.

It makes sense that Netflix is doing well.  Movies did well during the last Great Depression, and Netflix offers a cheap way to entertain your family.

And now my second pick: Hormel.

I got a triple-buy signal on Hormel on Thursday, but unfortunately, it really doesn’t fit into the portfolios of Red-Hot Global Small-Caps or Red-Hot Commodity ETFs — unless you consider spam a commodity, LOL.  Why is Hormel doing well?  I guess as money gets tight, people eat more spam. Also, Hormel is becoming bigger, and moving into big-cap indices.

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I’m traveling today — John and Dinesh are watching the portfolios while I fly to Phoenix.  For the record, I hate flying.  On the other hand, it’s always worthwhile when I get to where I’m going.  I’m off to speak at the 2009 Phoenix Resource Investment Conference.  Maybe I’ll get into an argument over the stimulus package or mortgage bailout; those seem to be the topics du jour. But I hope we can stay on topic with natural resources.

There’s a nice move going on in gold this morning. And just yesterday I thought we might be poised for a pullback.  These are wild and wooly times.  I’ll write more from Phoenix.

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