Morning Call [8:00am ET] Trading strategy must be based on the principle of capital preservation, which means that whenever capital markets go into panic mode the idiom ‘Discretion is the better part of valor’ must underlie your tactics. Yesterday, shortly after the open, the market, which earlier had been shown a disappointing US Durable Goods report, was facing absolutely ugly New Home Sales data, and started to panic. The Bears were zeroing in on the S&P 1040 Maginot Line, which, if breached at that point, would have caused my extremely bullishly positioned Emerging Markets portfolio to dip underwater, a result I take pride in not allowing. I bailed. Right at the cycle bottom.
[8/25/2010 10:38:30 AM] Bill Cara: sell edc to 10% at mkt
[8/25/2010 10:38:36 AM] Bill Cara: can't hold in here
[8/25/2010 10:40:22 AM] Bill Cara: probably just made another mistake
[8/25/2010 10:40:32 AM] patrick veech: filled 24.01
[8/25/2010 11:02:52 AM] Bill Cara: I figured that was a mistake.
Mistakes happen. The point is you can’t let them kill you, you try to keep them at a minimum, and they should be a learning experience.
In this case, I had been anticipating bad news, and had positioned portfolios to take advantage of a relief rally. I even explained my thinking before the day started, while reviewing my notes after having been blind-sided 35 minutes before the close the previous day. I will re-publish my notes, but this time add the very next comment that was made at that time on the trading desk, which as you now can see was very insightful.
[8/24/2010 4:03:47 PM] Bill Cara: at 3:20 I had recovered and then some in the emerg mkts, then boom
[8/24/2010 4:05:41 PM] Bill Cara: I am impressed with the precious metals though, telling me either anxiety is rising (VXX up) or Dollar going down. But mkt is on the edge of the ledge here. Wall St has to decide tonight what they want to do.
[8/24/2010 4:06:37 PM] Bill Cara: I'm thinking Dollar down and pm's up and that will hold equities up a bit here.
[8/24/2010 4:09:03 PM] patrick veech: bonds once again led the day-oversold markets that don't rally are vulnerable to irrational selling at some point-1040 still the maginot line
[8/24/2010 4:09:29 PM] patrick veech: must remain flexible
[8/24/2010 4:10:40 PM] Bill Cara: agreed on 1040
[8/24/2010 4:11:31 PM] Geoff Goetz (conference calls): XHB looking like an interesting long if we can move higher from here
The big “if”.
At 10:38am ET, I had waited long enough for the reversal, and it had not happened. The EDC 3x bullish Emerging Market ETF had printed 34.01 and I was thinking – in split seconds – that a 33 handle for EDC would have been psychologically devastating to the Bulls, so I bailed. And at that very moment, I knew I was taking a big loss, but at least would live to fight the next battle.
My partner Geoff, who runs our trading desk, was one step ahead of me on this one as XHB soared. But, I was too numb. Here’s another Lesson: When you get emotionally involved, stop trading. Emotions kill.
So in the next hour or two, I twice had my finger on the EDC re-entry trade, for a small loss, but each time it happened, and I could see XHB was having a moon-shot, squeezing the shorts, I knew my heart had taken control of my brain, and so I backed off. I ate the missed opportunity to recover losses, satisfied I was still well positioned for a possible rebound.
Trading is not easy; don’t let VectorVest and the rest of them tell you it is. Moreover, don’t ever believe a reporter on Financial Entertainment TV at reversal points in the market; they are paid to lie. Case in point: after the horrible New Home Sales data was reported, they said it was “worse than imagined” when in fact it was slightly better than analysts had expected.
The media was simply doing a job they get well paid to do, which is inflame your emotions, forcing the audience to make trading mistakes. It’s so sickening, I no longer watch their games. But the point is that I know most traders do, and I’m forced to trade against the order flow rather than on the basis of common sense.
I have said for years that FETV should be regulated. Somebody needs to clean up their act because it’s a bloody disgrace. I have often said that GE’s Jack Welch made the best $7 million investment in history when he acquired the schlocky Financial News Network programming that became CNBC, but that if I had been in the shoes of Jeff Immelt, Welch’s successor, my moral compass would have quickly led me to a decision to sell that “asset” to somebody more inclined to entertainment than serious financial reporting, somebody like Rupert Murdoch.
Sometimes b.s. doesn’t baffle brains. As you must know from reading yesterday’s blog, I did call the huge rally in precious metals. I wrote:
…near the close yesterday, anticipating a run-up in gold and silver, I added a further +15% to my GDXJ (junior goldminer index) @ 28.60, 11.9% to the Cdn accounts only in Fortuna (FVI.TO at C$2.25) and 15% in Silver Wheaton (SLW at 20.55).
The US junior gold accounts closed +1.4% higher yesterday, while the Cdn accts were even better. I could have turned in higher profits, but, you see, I sold those positions during yesterday's session. I sold the GDXJ at 29.18 (+2.03% gain), the SLW at 21.39 (+4.09% gain), and all but 1% of the FVI.TO at C$2.42 (+7.56% gain).
Financial advisors can talk all they want about laddering T-bills, earning practically zero for the next five years, and of investing in Treasury bonds yielding in 30 years what I made in 30 hours of your time and maybe 5 hours of mine. Sorry, but we are all traders of prices, and particularly bond investors.
So, every day we learn something here. It’s a real life classroom experience, not coming from Fantasyland TV or from publish-or-perish professors who have never traded for a living.
This is real. It’s certainly not romantic; but if you aren’t passionate about it, you shouldn’t be here.
I do my best to make it interesting, so that you’ll hang in and learn the Lessons. I’m glad you’re attending class.
Here’s the chart of the US Residential Construction companies (aka Homebuilders even though we know men, women and children, not construction companies, build ‘homes’):
Have a good day, but be careful out there. The arrows may be green and pointing up, but the only factor that would lift this market much will be the squeezing of shorts who feel trapped. That’s not a sustainable rally.
http://en.wikipedia.org/wiki/Maginot_Line
CTA Trading Desk Post-Close Report
After pivoting off support at 1040 yesterday and with futures up smartly in Globex, trading today should have been a walk in the park for the Bulls. Failure to even test the lower resistance zone at S&P 1065 (Thursday high 1061.45) emboldened sellers to reenter the marketplace as prices reversed course, sinking for the rest of the day and finishing near their lows (S&P-0.77%).
Bulls turned the ball over today deep in their own territory and need the defense to make a goal line stand. Maybe the GDP number will be out of this world; maybe Helicopter Ben will announce that the Fed will now be buying both Bonds (TLT+0.96%) and stocks in order to save the world; maybe shorting equities will be outlawed for the good of the nation.
The bearded one better have an ace up his sleeve because investors are expecting a Hail Mary to reinvigorate this market – they are growing weary waiting for the so-called “summer of recovery”. A bad number tomorrow or a noncommittal Fed Head may cause bullish traders to wave the white flag while muttering “no mas.”
All eyes are still on 1040 – will it hold or will the Bulls fold?
Have a great evening.
Comments
Thanks
Thanks Bill for the transparency of your trades/thoughts the past couple of days. I have enjoyed and benefited from your notes... especially regarding "When you get emotionally involved, stop trading. Emotions kill." I had to learn that the hard way. Thanks for all you do for us.
Cara 100 Ratings Changes
Good morning.
There is nothing to report at this time.
Weekly jobless claims fall 31,000 to 473,000
4-week claims average rises 3,250 to 486,750
10.2 million people receiving jobless benefits
Re: Weekly jobless claims fall 31,000 to 473,000
I guess the rally continues for today too and a confirmation of holding above 1040 on the S&P is in the cards here. I will be raising my stops on my long position just to be safe anyway to lock in gains in case market reverses later in the afternoon. However, will see what the big dogs do when market opens. So far stocks and futures in pre market gaining momentum. GLTA
FD: still holfing TNA from yesterday morning at 31.84
Re: Weekly jobless claims fall 31,000 to 473,000
Concerning jobless claims, it's amazing to me that right before release, people aren't focusing on the number from 4 weeks ago. That number was 460,000 released on July 29th. That is the number dropping out of the four week average and being replaced by today's number. Today's being higher ergo the 4 week average goes up. Actually up to a significant one that will create one of those Headlines. The market reaction always has the last word but sometimes there is an initial misinterpretation.
Helicopter Drop
The market continues to price in the helicopter assault/money drop. Why not? Is there not irony that Boris Badanov (Rocky and Bullwinkle) and Ben Bernanke have the same initials?
Re: Weekly jobless claims fall 31,000 to 473,000
This addition should help see real picture, and it's far from rosy:
- Prior initial claims revised higher from 500K to 504K
- Prior continuing claims higher from 4.478M to 4.518M
- 4-week average for claims at 487K v 483K
Market reaction is of course whole other thing.
Re: Weekly jobless claims fall 31,000 to 473,000
George, you are right but I learned the hard way that market has a mind of its own and trade whatever shape or form or trend it likes at any period of time and at any news whether positive or negative. The price action is the best indicator to me. Emotions are OUT, STOPS are IN :).
Anyway, all Europe indexes have reversed sharply up from their lows to much higher in the last few 32 min, US indexes futures are all nicely up still. I guess we need to watch the next level on the S&P around 1065 then 1070 and see if we break thru those and stay above them. Otherwise, bears gonna come in and take the ball for the day at least but I feel we are closing positive in green again today. Every one is wary and cautious of this market as it puts every one at edge trading day to day mostly.
"Trouble in Paradise"
Notes from the Credit Suisse economics paper today:
With the natural splendor of the Grand Tetons as a backdrop, Fed Chairman Bernanke will deliver opening remarks on 27th August at the Kansas City Federal Reserve's Economic Symposium in Jackson Hole. His speech is entitled, "The Economic Outlook and the Federal Reserve's Policy Response."
This conference presents Bernanke with an opportunity to clarify the Fed's monetary policy strategy in the face of a significant slowdown in the US recovery. The most recent economic data have been coming in below already modest expectations. This is of particular concern considering that the BEA estimate for Q2 GDP growth, originally reported at an annualized 2.4%, is likely to be cut in half upon revision on 27th August.
While we don't expect the Chairman to brace the nation for a "double dip," he may warn that near-term growth could be insufficient to promote a sustained reduction in the country's 9.5% unemployment rate.
Turning to the Fed's policy response, perhaps Bernanke will attempt to explain on 27th August what the Fed hopes to achieve, in real economic terms, by targeting a stable level of asset holdings.
Re: Helicopter Drop
Ron, I don't think the market is pricing in a helicopter drop. My feeling is, we saw that pricing level immediately prior to the Fed meeting on 10 Aug. When the market didn't the money drop it was expecting, it sold off hard the next day, and its been going down ever since.
I think 1120 represents a down payment on what we'll see if the helicopters start flying. 1055 is what we get when we're forced to look at the actual state of affairs of the economy.
The boost we're getting is I think a combination of oversold market, short covering, and a hope that perhaps things aren't quite as bad as people are making them out to be.
Re: Thanks
Scott,
At the Cara Bahamas 2010 Conference in Freeport this year, Vad ran a session where he was trading live. I believe there was no session that week that the attendees liked better. If I run a Bahamas conference for Year 3, I'm thinking of spending a day being mic'd up in front of a big screen. It can be intense some days, and you never know which days until they happen, but I think under average circumstances it would be interesting for people to watch and discuss in real-time. I'll think about it before committing, but it would be fun to teach that way.
Come ieri si poteva prevedere
Come ieri si poteva prevedere e avevamo previsto il mercato è rimbalzato sui 1040 recuperando dai minimi e chiudendo positivo, anche se non sui massimi. Due considerazioni si devono fare:
1) i dati che continuano ad uscire sono veramente pessimi
2) il mercato non scende proporzionalmente ai dati stessi
A poco meno del 13% dai massimi il mercato non sembra inglobare la perdita di valore di un’eventuale prolungata bassa crescita e questo non ci invita a entrare con più decisione in posizione.
D’altra parte però la possibilità che da questi livelli si possa assistere ad un rimbalzo sino ad almeno 1100 ci invoglia ad aumentare l’esposizione azionaria.
Ieri il rimbalzo non è che proprio ci abbia convinto anche perché il fine settimana ci consegnerà ancora dati da esaminare. Dal punto di vista tecnico (unico motivo di entrare sul mercato ora) il livello di ipervenduto se non recuperato potrà dare sfogo a vendite e persi 1040 quota 1000 sarà l’ultimo baluardo.
Da parte nostra siamo aumentati in esposizione azionaria al 8,5% e oggi in caso di ritraccio contenuto ci porteremo al 10% ieri preannunciato (posizioni che valuteremo se da coprire in area 1100) . Rimane comunque l’alta attenzione per la situazione che potrebbe mutare immediatamente alla rottura di 1040 o al mancato mantenimento tento del suddetto livello ove potrebbe entrare grossi ordini di vendita dai sistemi automatizzati.
P.S. Rimane alta la sensazione che sia ieri subito dopo l’uscita dei dati che l’altro ieri siano intervenuti sui minimi in aiuto ai mercati per salvare i 1000 sul DJ30 e 1040 sull’S&P livelli fondametali per la tenuta del mercato sul breve periodo.
Italian to English translation
As could be expected yesterday and we expected the market has rebounded from the lows and recuperating on the 1040 closing positive, though not the highest. Two considerations must be made:
1) data that continue to come out are really bad
2) the market does not drop proportionally to the data
A little less than 13% from their highs the market did not seem to incorporate the loss in value of any prolonged low growth and this invites us to enter more firmly in place.
On the other hand the possibility that these levels we will see a rebound until at least 1100 encourages us to increase equity exposure.
Yesterday, the rebound is not convinced that just because we have the weekend we will deliver more information to be examined. From a technical standpoint (the only reason to enter the market now) the level of oversold if not recovered may give vent to 1040 sales and lost the 1000 will be the last bastion.
For our part we increased equity exposure to 8.5% today and if we retrace content raised to 10% announced yesterday (positions that will evaluate whether to cover area in 1100). Remains high regard for the situation that may change once the break of 1040 or failure to maintain this level when I try the big sell orders could come from automated systems.
P.S. Remains high the feeling that yesterday after the release of the data the day before yesterday intervened to help market the minimum to save on DJ30 1000 and 1040 S & P levels fondametali for keeping the market in the short term.
Cara 100 Update
NGD - New Gold upgraded to Outperform from Sector Perform at Scotia Capital.
The Latest Gloom And Doom
S&P to hit 450.
"The equity market will thoroughly crumble like the house of cards it is, when the nationwide manufacturing ISM slides below 50 into recession territory in coming months"
http://www.marketwatch.com/story/sp-500-to-hit-450...
-------
Presented for your perusal only. The opinions expressed in this article are not necessarily those of the poster.
Re: Thanks
Hi Bill,
Of course, your post already says you are thinking about it. I attended Vad's live trading session and was really impressed with him. Being live and trading his own money really helps the less experienced. Vad was hampered by having only a laptop screen versus his usual set-up of I believe 4 full size monitors. Also he wasn't in his comfort setting. His offering this to attendees was quite gracious on his part.
Re: Helicopter Drop
Ron, Bernanke won't drop $100 bills out of his helicopter cause he can't print money. He can further increase credit by injecting more liquidity into the system but what has the market done with all the prior injected liquidity?
10:00 AM - Foreclosures drop for first time since 2006: MBA
This may help keep the market up today, maybe ...
By Amy Hoak CHICAGO (MarketWatch) -- The percentage of homes somewhere in the foreclosure process fell in the second quarter, the first drop since 2006 and the largest quarter-to-quarter drop since 2005, the Mortgage Bankers Association reported on Thursday. Still, the group's quarterly delinquency report showed that short-term delinquencies are increasing, which could signal another rise in foreclosures to come. The percentage of mortgage loans somewhere in the foreclosure process was 4.57% in the second quarter, down from 4.63% in the first quarter; the percentage is still up from 4.3% a year ago. However, the percent of loans one payment behind is now a seasonally adjusted 3.51%, said Jay Brinkmann, the MBA's chief economist, in a news release. The percentage peaked in the first quarter of 2009 at 3.77%, falling to 3.31% by the end of last year.
Re: Come ieri si poteva prevedere As could be expected yesterday
I used the Google translate feature to confirm the English. Excellent tool.
http://translate.google.com/#
What is it about 1040? Oh yeah, it the IRS Form. I like Kaimu's idea of a zero tax rate. Best stimulus I ever heard of.
Do not Overbid
Here's an original cartoon obviously created by a trader somewhere. Concerns salesforce.com (CRM), but that's not the point.
http://www.xtranormal.com/watch/6985513/
4ever — FYI
4ever,
A follow up to your question and my reply on Tuesday...
Tuesday:
Q: TLT has surged 21.06% to $106.06 from $87.61 since April 6. Is it possible for this etf to plunge over a few days or weeks? Or, is it a safe harbor for the coming fall/winter storm?
A: Sure. Anything is possible these days. I have been trading this for some time and currently hold it.
-----
Update:
I didn't wait for my stop to execute, but sold half my TLT position yesterday.
I'd held it 9 days for a 3.4% gain, but I don't expect this is a trend change — rather a short term (This is as short term as I usually trade.) I have no plans to go into TBT since I don't want to set inside at my computer.
I'm not thinking of this as a safe harbor for any given time, just needs less watching than stocks for me right now.
Re: "Trouble in Paradise"
Thanks for sharing that, Bill.
Site Consensus & Post Spell Check
Wouldn't it be great if there were a way for the site to have a polling consensus on bulls vs bears, on upcoming release numbers etc. The numbers could be released by some specified time. Anyway many permutations of this idea might be constructed.
Also, spell check would be helpful and sentence structure as well and okay a way to put comments in color and maybe an emoticon or two.
We all know that e-mail can be misinterpreted and we are all friends here aren't we; and trying to spark thinking!
Re: Thanks
Thank you George. That was fun, even with all the limitations. Calling trades for the trading room and publishing trading logs for many years day in day out, I am no stranger to trading in the public eye, but there is a difference between Internet and live presence. It presented some unusual challenges but overall, I enjoyed experience.
HK ready for its rebound
Chart looks good with nat gas ready to rumble in Sept. as a seasonal rebound is due. Oversold here.
Sold SLW today for a nice gain.
FD: Holding HK for a loss.
ON BEING EQUAL
ALOHA!!
This is a brilliant article on EQUALITY, but not what you might think "equality" should be.
LINK: http://mises.org/daily/4650
What exactly is the duty of Congress and the US Treasury and their partner in crime the US FED? Reading this article it is clear that they all strive for one goal in America ... EQUALITY! Money is the perfect vehicle to make us all EQUAL! Not just "money" but "corrupt money".
Well worth the read ... excellent! There was a genius behind the title of this article. One that I read avidly when I was in high school.
GES may squeeze here
just watching it for now.
Re: 4ever — FYI
Ticker Last RSI7d RSI7w RSI7m Zone (estimate)
TLT * 107.41 79.71 77.38 74.79 Distribution Zone (for 8 days)
TBT * 30.85 19.53 19.37 18.53 Accumulation Zone (for 9 days
Taking profits in TLT - good. Accumulating TBT - better. TBT breaking $100 in a year - best.
kinky stock day, once again..
http://finance.yahoo.com/gainers?e=us
SLV
BGZ, yesterday there was a volume spike on SLV. Today it gapped up above daily top Bollinger Band. PM options expiry. Your suggestion to short SLV soon is looking good. I'm considering long ZSL instead of short SLV.
ZSL not quite there yet.
Bear E
$SPX 200 day MA
Per Stockcharts the 200 day line will be lower today than yesterday marking that as the final peak. This happened in late May and early June but the numbers dropping off from the prior 200 days indicated that it wouldn't probably last. It will this time. Attached is an Excel worksheet that shows the peak per YahooFinance data as 8-23 rather than as 8-25 per StockCharts but no matter, it is still happening. 200 trading days ago was November 9, 2009 and $SPX closed at 1093.08 and the drop off numbers for the rest of November are higher than that - meaning that the m.a. will continue to drop unless there is a dramatic rally.
Re: kinky stock day, once again..
Hi baz22, How about the flip side.
http://finance.yahoo.com/losers?e=us
Re: kinky stock day, once again..
The Lord's of equity land giveth, and the Lord's taketh away... Amen !!
Yen Headed For 80
http://www.incrediblecharts.com/tradingdiary/2010-...
Russell 2000
The Russell 2000 seems to be the leader of the last month or so rather than the S & P. Here is a daily chart of the Futures for it. The support levels are readily apparent from a few days ago, the July lows and the Feb. lows and then all the way back to Dec. and Nov. around 560. The July lows have been defended successfully so far. Wish I could get next week's WSJ now, but without that intermediate traders will have to draw their own conclusions. There are major bets both ways which is what makes a market, as prices are determined at the margin.
Re: SLV
BearE,
I've been watching and waiting since SLV broke 18.50. Nice high 11:50am this morning @ 18.75. ZSL came to life at noon. I'm watching volume, which is still a little high, SLV may be in distribution now or may not. I would have liked to have seen a volume/price spike and not this dribble higher. I might miss this opportunity if I don't see clearer signals.
J
Re: SLV
Sorry Johnny I had brain dribble on your name from the other day re: SLV.
SLV lower highs since 08.
Best, Bear E
Re: ON BEING EQUAL
lol another book to add to the list of reading. Just picked up Salinger's Catcher in the Rye to pass the last days of Wall Street's vacation. Damn, the missus has put her foot down to all these Amazon purchases. Enjoyed the read, thanks.
Re: ON BEING EQUAL
"One that I read avidly when I was in high school."
Interestingly enough, I (in high school too) enjoyed his Martian Chronicles and Dandelion Wine, while 451 by Fahrenheit was a bit blah... I think now I know why: in good ole USSR it was kind of "this is the reality around us, what's to write about..."
Just goes to show how perception changes depending on basic reality on the ground :)
Re: ON BEING EQUAL
For great books at great prices, I shop goodwill.
S&P to 1040
Down, down, down ...
http://tinyurl.com/yqh2kc
All out.
Re: S&P to 1040
Great youtube Dr. I'm from Nashville and have printed for Dolly, Minnie, Johnny and a host of other Country Music Stars.
Tony Robbins Economic Warning
http://www.youtube.com/watch?v=XOfRLINVqcg&feature...!
is a bear market just too obvious? Maybe QE2 works & stocks go higher?
Re: S&P to 1040
could not resist
http://www.youtube.com/watch?v=nzhzCF77GDo&feature...
Going to hedge out 50% of port with SDS before close before GDP number.
latest news on the "TERRROR mosque" - Daily show outfoxes FOX
http://www.ritholtz.com/blog/2010/08/tds-on-fox-ne...
Re: latest news on the "TERRROR mosque" - Daily show ...
Jock,
I watched that video yesterday and it has to be one of Jon Stewarts all time best.
J
Re: S&P to 1040
Dr. as we are posting music today, this one might be appropriate. This is a process me thinks. http://tinyurl.com/27ht7go
head fake up, close down
So yesterday I suggested things would bounce around here head faking up, and down, just so the market can shake off the maximum number of people before it makes its move (whichever way it goes).
So first a head fake up this morning to hose the shorts courtesy of the employment numbers, and then having no bids for the remainder of the day ensured a slow, steady erosion of prices, which for sure shook out some longs.
Is anyone left on board in any direction? Perhaps some folks went short at the close. Could head fake down tomorrow morning and then bounce off 1040 again, or perhaps just a gap up open removing all subtlety. Or maybe tomorrow is the day we move through 1040. If that's the direction, an overnight gap down (say 15 points) would accomplish the job nicely, without encountering all that pesky support.
Exciting times. Probably best to be in cash; unfortunately I'm not.
FD: long
Re: head fake up, close down
Still 60% long. If I get stopped out over the next few days, so be it.
Re: head fake up, close down
It may also seem disingenuous to post these trades after the fact, but they were posted elsewhere in real time:
(a) Closed BAC/WFC @ 12.89/24.06.
(b) Moved an equivalent dollar amount into AMAT/CSCO/INTC @ 10.60/20.87/18.19.
No change in mutual fund holdings.
Re: head fake up, close down
Hi Dave, Do remember that we have 2nd quarter GDP revision coming out tomorrow at 8:30 EST. Consensus is 1.3%. Per Grym's post of the Kyle Bass video, Mr. Bass is looking for 1.0%. How much has been discounted by the market? As Vad would say the price action response is what is important - not the news itself. http://tinyurl.com/28vyu9l
p.s. these releases are of course rear view mirrors but in this case I think that people will be projecting Q3 and Q4 in light of the release.
An ambitious plan in Asia for that OTHER fertilizer
On the heels of BHP's bid for Potash Corp. , I met with Mordi Gutnick, son of founder Joseph Gutnick, of Legend Holdings, US-listed developer of a phosphate mining and fertilizer project in Australia, which holds 1.3B tons of phosphate rocks discovered in the 1970's and "proven as world-class deposits". Mr. Gutnick assured me that phosphate is becoming as keenly contested as is potash -- citing as evidence China's 2008 imposition of 135% tariffs upon its export.
Governments in emerging markets care desperately about agricultural production and about food costs. Many have been threatened and some toppled by food riots protesting rising costs of dietary staples. Russia's current banning of wheat exports and Argentina's export tax on soybean exports are short-term measures taken to cap domestic food prices.
Mr. Gutnick's Asian-oriented views on his new phosphate project were quite different from a North American view I had sampled just before this meeting. I was fortunate to get a phone call through to Steve Case, CEO of Phoscan. Mr. Case completed a pre-feasibility study for a 120M ton Ontario phosphate project in May of 2008 -- as the price of phosphate rock was plunging from $430/MT to $40/MT. Although the price has now recovered to $150/MT, Mr. Case was concerned over the likelihood of a double dip in the economy, and over the difficulty of raising the $1B the project would require.
6 million tons of production were removed from the market when Mosaic recently closed its largest phosphate mine (in Florida) over environmental restraints upon expansion. Appealing this decision could take years. Yet even this reduction in supply could not justify Mr. Case's gearing up for a long-term project.
North America's massive debt load must first be worked down over the next few painful years. In addition to its stalled phosphate project, Phoscan has C$68M in cash and short-term securities underpinning its C$64M market cap. Given broadly high commodity prices, Mr. Case has been searching unsuccessfully for exploration assets in other commodities which offer an attractive risk/reward ratio, in view of today's economic prospects.
By contrast, Legend Holdings (of which Mr. Gutnick's family owns 30%) is spinning out its diamond and gold assets to concentrate on phosphate. His presentation states that over 70% of future worldwide demand growth for phosphate will come from Asia, where economies are growing, and new projects can be confidently moved forward.
Holding 15% of Legend's shares and a board seat is IFFCO, the leading Indian distributor of MAP and DAP, the fertilizer end-products of phosphate rock. IFFCO lacks economical access to ore, and currently imports all of its rock. (India imports 7 million tons per year for MAP and DAP production.) The country's major conglomerates (Tata, Birla, Reliant, etc.) have the vision and the resources to finance major long-term fertilizer projects.
In China's case, the key actors are major companies under the influence of the government's central planning for long-term access to key commodities. And alongside steel and copper, the most massive and rapid urbanization in human history calls for higher agricultural productivity. Asian farmers now use about a quarter the fertilizer of farmers in developed countries. China too lacks enough high quality phosphate rock to cover future needs. It was a leading Chinese producer, Weng Fu, which conducted Legend's just-completed feasibility study.
Weng Fu envisaged a capital cost of $800M, mine life of 30+ years, $11B in revenues, $2.6B free cash flow, 5 year capital payback, an after-tax IRR of 20% and after-tax NPV of $967M.
I hasten to add that I'm not qualified to judge the specifics of Legend's presentation or its numbers: http://www.lgdi.net/resources/i/docs/Presentations/presentation_feasibilitystudy_260710.pdf
Legend plans to build their mine, as well as their MAP, DAP, and other processing facilities in conjunction with key Asian fertilizer producers. As 30% owners, Mr. Gutnick's family has a particularly compelling motivation to avoid shareholder dilution, and to finance mostly with debt, perhaps from major Asian producers themselves. Legend could end up as a major supplier to a key producer, or be taken out by one.
Mr. Gutnick's views on the growing intensity and scale of international competition for high-quality inputs and fertilizers were reinforced by the FT's review last Friday of change in the 3 global fertilizer cartels. In 1972, Canpotex was founded to market Canadian-produced potash outside North America. It is equally owned by Agrium, Potash and Mosaic. In 2005, the Kremlin moved to merge 3 local players into Belarusian Potash Co, a "national champion". Per the FT, this cartel now sells more potash than does Canpotex. Also recall that BHP is planning to operate outside Canpotex, should its bid for Potash Corp. succeed.
Are we on the cusp of similar turbulence in the phosphate market? Alongside the 2 potash cartels is the less well-known PhosChem which markets phosphates globally, with 50% ownership held each by Mosaic and Potash Corp. BHP would likely pull away from this arrangement as well (negotiating its own quarterly contracts based on spot prices as BHP implemented so profitably in the iron ore market).
For years, China and India have been on the receiving end of cartel pricing of potash and phosphate. Both countries no doubt plan for protracted increases in fertilizer usage, in order to feed growing urban populations. With their long-term strategic perspectives, India's major conglomerates and China's gov't planners would likely assign a high priority to financing and influencing major new, independent phosphate mining and processing operations.
Market cap is US$172M, down from over $500M. Share price is down over 50% from its January, '10 high.
Disclosure: no position, no financial ties to LGDI
Re: 10:00 AM - Foreclosures drop for first time since 2006: MBA
Nice thought.
The shadow inventory of homes not yet foreclosed upon that may be lagging in negotiation, modification (for a year or more!) or just teetering homeowners is unknown. Banks are reluctant to foreclose now and have all that obvious inventory on their books. They are leaving delinquient homeowners in place mowing the lawns as unpaid security! One local expert said that 40% of sales in our area are short sales. 40%! And of those who managed to make it through the 13 month average agony contractual waiting game with the worst rated of all short salers-- BAC --congratulations!
I wrote a post on bouncing back from this experience if anyone has family considering their options. Planning ahead can mean a swift recovery. Hopefully not any of the traders on this blog are facing foreclosure! Just know: if you invested in real estate like a trade, then cut the emotion, like a trade, and move on with your life and protect your assets however you can. Someone else will benefit from your loss and next time that someone could be you!
http://equitytalks.blogspot.com/2010/08/bouncing-b...
All the best and be careful out there!
Re: An ambitious plan in Asia for that OTHER fertilizer
Thank you for the post Jock, that was quite informative. Having the largest global populations it makes sense that China and India are serious about resources of all types.
Even when the markets were going up investors were selling stock
and heading for low yield bonds........but why?
THE STREET
100-Year Bonds: Latest Bubble Sign?
Bond investing is quite interesting right now. With savvy investors already declaring a bubble in the bond market, what should investors make of this week's return of the 100-year bond?
Norfolk Southern Corp.(NSC) sold $250 million in 100-year bonds on Monday, reopening a $300 million, 6% debt issue the company sold in 2005. Demand was strong enough that Norfolk Southern boosted the sale from the $100 million originally planned. The bond yield is about 1 percentage point more than investors are receiving on the company's outstanding 30-year bonds and about 2.5 percentage points above 30-year Treasuries, which soared on Tuesday, driving their yield down to 3.56%.
Investors' insatiable appetite for bonds and especially Treasuries -- driven by fears of a double-dip recession -- makes the 100-year bond possible.
It's a great deal for issuing companies to lock in long-term financing. Norfolk Southern said it would use the proceeds for general corporate purposes. But buyers of the bonds have to wonder whether inflation and interest rates might not soar at some point in the next century and whether even the most solid companies will still be around for that long.
With massive global deficits, surging gold and the Federal Reserve's pedal-to-the-metal policy keeping interest rates near zero, the prospect that we may be due for a spike in inflation is very real.
It's not a decision most individual investors will have to make. The century bonds are typically gobbled up by insurance companies and pension funds looking to balance their assets with their long-term liabilities. Century bonds don't trade much on the secondary market and therefore are illiquid.
But bond and stock investors need to be aware of what this portends for the financial markets and the merits of investing in stocks or bonds now. For instance, stalwart consumer products and health-care giant Johnson & Johnson recently issued $1.1 billion in bonds, including 10-year bonds yielding 2.95%, the lowest corporate rate on record. The dividend yield on the company's common stock is 3.70%. You do the math.
So, are bonds today's dot coms?
Wharton Professor Jeremy Siegel, author of "Stocks for the Long Run", made that assertion just last week in the Wall Street Journal.
Noting that 10-year Treasury Inflation-Protected Securities now yield less than 1%, Siegel said, "This means that this bond, like its tech counterparts a decade ago, is currently selling at more than 100 times its projected payout.
"...Those who are now crowding into bonds and bond funds are courting disaster," he concluded, warning of potential capital losses.
Siegel also pointed out that Treasury yields have not been this low since 1955. For 10 years after that, their return barely kept up with inflation, he said. Over the ensuing 30 years, Treasury returns failed to keep pace with inflation.
Siegel isn't alone.
BusinessWeek reported, based on a regulatory filing in early August, that billionaire investor Warren Buffett had shortened the duration of bonds held by his Berkshire Hathaway(BRK.A) holding company. Buffett has warned that deficit spending -- or "greenback emissions" -- could cause higher inflation.
Legg Mason's Bill Miller wrote in July, "U.S. large capitalization stocks represent a once in a lifetime opportunity in my opinion to buy the best quality companies in the world at bargain prices. The last time they were this cheap relative to bonds was 1951."
Bond king Bill Gross said in June that "bonds have seen their best days" and that stocks looks better now (though he doesn't think stock returns will be as high as investors became accustomed to in recent decades).
On the other hand, perhaps investors are correctly signaling bad times ahead for the U.S. economy. Recent data, such as existing-home sales and jobless claims, certainly paints a gloomy picture.
Further, 100-year bonds have been sold before, back in the 1990s and early 2000s. Companies that have issued them in the past include Coca-Cola(KO), Burlington Northern Santa Fe(BNI), Motorola(MOT), Walt Disney(DIS), Apache Corp.(APA) and Anadarko Petroleum(APC).
But bond investors should keep in mind John Maynard Keynes' famous observation -- speaking about long-term investing -- "In the long run, we are all dead."
What does it mean that investors are lapping up bonds that won't mature until after they are long dead?
It may mean that it is time, as Prof. Siegel said, that we turn our attention to dividend-paying stocks -- rather than bonds.
Yes, for the long run.
Re: head fake up, close down
Also of note tomorrow, Dave, is Consumer Sentiment at 9:55 EST both prior and Consensus numbers are 69.6. Then (drum roll) Big Ben Himself speaks from Jackson Hole at 10:00am EST. It's perhaps appropriate that this is at the Kansas City Fed's annual conference and Thomas Hoenig is the host. Pretty funny.
Just who WAS "the devil in Miss Jones"?
Bill O'Reilley? NAH, you're kidding:
http://thephoenix.com/BLOGS/phlog/archive/2010/08/...
Fading Desolation Row
http://tinyurl.com/35uo7xy
Sentiment changed on a dime, as it often does. That leaves the door cracked for a possible rally tomorrow, IMO.
I'm willing to give more time and 'space' to plays on the long side- buying funds and blue-chips with RSI7s in the teens/twenties/thirties is usually worth a shot.
Ticker Last RSI7d RSI7w RSI7m
AMAT 10.71 24.14 24.08 33.69
BAC 12.66 21.61 28.06 32.39
CSCO 21.21 29.23 31.75 40.21
INTC 18.48 21.19 27.35 41.33
WFC 23.60 14.51 26.12 36.87
XOM 58.91 35.08 39.43 31.95
FSRBX 14.87 14.54 29.80 38.17
FSELX 36.02 36.59 32.40 42.43
FSENX 38.25 20.58 38.61 40.64
I like all the above companies/funds. The question is whether the bear continues straight down without a break, as it did in 2008.
That's why it's called trading.
Re: Just who WAS "the devil in Miss Jones"?
Hi Jock, Bill O'Reilly and I are the same age (within 6 mos). I am conservative but I did a lot of crazy things myself 36 years ago.
ZSL
So, I'm patiently waiting for an entry point to short silver and after hours ZSL pop'd 0.88 to 31 even on google. SLV is only down 5 cents to 18.54. Likewise GLD is only down 3 cents after hours to 120.96. So what's up with ZSL? Is the "fix" in and no one told me?
Re: Just who WAS "the devil in Miss Jones"?
36 years ago...1974 was a signature year for me- it opened on the streets of San Francisco (where I remember seeing long lines at night for the second of the two films mentioned) with evenings spent backpacking to different crash pads, and ended on an academic 'high' on the streets of Ann Arbor, where I managed to hit my stride after struggling with the transition to college life.
Re: Just who WAS "the devil in Miss Jones"?
I bet you remember the market back in 1974 as well 2nd_ave. I sure did as I was in grad school. My finance professor remarked that often times there were in effect no bids for stocks. We are now on the edge of revisiting that 36 years later in our more "mature" years. By the way, I believe Bill C is 61 as well and I know he remembers 1974.
GM's Volt Inflation Revisted - davefairtex, are you out there?
I used the GM Volt as an example of inflation. It was argued over the weekend that the Volt pricing around $42,000 was due to technology cost and not inflationary metrics. Well, David, please consider this WSJ article from today:
http://tinyurl.com/37uj66v
"GM has set the compact car's base price - $16,995 - higher than that of the competing Honda Civic and Toyota Corolla."
No new tech for efficiency but its base product - the Chevy Cruze - now comes with 10 airbags. I just wonder if those airbags are dismissed middle management execs?!
Price inflation is alive and well at GM. The only way to increase GM's bottom line now is through PRICE INFLATION since increasing market share and cutting costs are not what gov't sponsored entities (GSE's) do. See Fannie Mae and Freddie Mac for further clarification. (Hint: GSEs monopolize market share with a guarantee and grow until the global economy emplodes.)
By the way, the Volt tech should not be so costly since it certainly is not innovative: Battery operated electric stuff has been around for half a century. Remember that game 'The Operation' with tweezers and a buzzer? That was fun especially when the alkiline battery was introduced and we could play for another hour.
I rest my case.
Cheers.
Re: ZSL
Johnny, that might have been a bad trade report. I do see the last trade on Schwab StreetSmart at 31.00 but the present bid ask is at 30.18 to 30.42 which makes more sense.
Re: ZSL
George,
At the close, the bid-offer is pulled away from the market and usually bears little or no relationship to the closing trade.
Also, last minute trades are often not reflective of the market at the time, but represent trades that balance books.
Re: Just who WAS "the devil in Miss Jones"?
George,
Yes, Bill C is 61... in his dreams. :-)
Re: Just who WAS "the devil in Miss Jones"?
George- I was twenty in '74, and if the term 'stock market' came up in a conversation, I would have shaken my head over the music and returned to more pressing topics ;) Back then I might even have taken the redhead seriously.
Re: ZSL
Thank you Bill and George. The way gold and many other equities gap up/down overnight, I am actually expecting a surprise move. Since I don't have the talent that Bill and others have, any purchase overnight is simply gambling. I am usually in and out during the day and never hold longer than 15 days in this market. It never used to be that way.
Re: Just who WAS "the devil in Miss Jones"?
Thanks for the info Bill and it seems that you have the energy of a 39 year old. I'm sure you remember Jack Benny and his line about age. Here's a quote
"Jack Benny Dies – At 39?" lol
Re: Fading Desolation Row
Here's my (amateur psychologist) take on this week's action:
(a) After distributing stock at RSI7s in the seventies last April, insiders are now engaged in talking the market down to accumulation zones.
(b) In order for this to work, the media has to truly convince us the indexes are sliding down Skid Row.
(c) Now that they have us all thinking we're about to retest the March '09 lows, well...they're picking up the same stocks they sold in April.
Re: Fading Desolation Row
2nd,
I like your plan. AMAT, CSCO, INTC and XOM are most attractive to me. The concern I would have with the first three is their concentration in tech. XOM looks good. Low debt and they have been buying back their stock. Qtrly from 2009-06-30, EPS increased and weighted avg shares decreased with steady dividend payments. SGnA is under control and net income is up.
I have been watching OKE (ONEOK INC) natural gas US, NYSE pays div 4.26%, Never stopped during 2008, is making money and appears to be well run. P/E 13.74 4.06B mkt cap, eps 3.15, the $42 range looks like an entry point although it was $40.62 on Feb/8/2010, $36.17 on Nov 2, 2009. Year end might be the right entry point for me.
J
got iphone? want to maintain privacy despirt Big Brother Jobs?
Looks like somebody just "made a case" that it's possible !
http://www.thejammerstore.com/signal-blocking-bag-...
A site for those interested in Apple stock or products
" Patently Apple" It covers patents . I think its interesting . Apple has 25,000 thousand employees in the U.S. AND 250,000 in China , and 46 billion dollars in cash reserves . Not your average company . http://tinyurl.com/ya6claq , Bob.
Re: Just who WAS "the devil in Miss Jones"?
George,
My dad was a day trader well into his 80's, on his IBM Thinkpad and a slow speed line from his country property. Spent time on the market and his BMO InvestorLine (discount broker) account every day. Never used technical analysis but knew when the cycle was low enough to buy and high enough to sell. Read as much as he could about the half dozen companies he specialized in.
I'll be a happy camper if I manage to do the same -- and I have a few years yet! Let's see... 39 to 85...
Re: ZSL
Bill,
exactly, and it's not a rare case to see bid 0.01 and offer 2,000.00 for say $50 stock when the action is over.
As for age thing, let me share famous Dylan's quote:
Ah, but I was so much older then. I'm younger than that now
:)
Big moves in the currency markets tonite
Something's up. Maybe Wall Street is reviewing advanced copies of BB's speech for tomorrow?
Re: Just who WAS "the devil in Miss Jones"?
Selfishly, I will opine that continuing to write the Blog will keep you young well beyond 85! Your general market outline remains a guiding North Star.
TED
Why is nobody talking up TED Spread? I'm all ears.
http://www.bloomberg.com/apps/quote?ticker=.TEDSP:IND
Could it be because there is plenty of liquidity in the system, and the fear mongers have to complain about other things?
Re: TED
Now that Europe is "under control" the perceived risk is gone and the spread has narrowed. With others, I'm trying to buy a number of apartment complexes and have been quoted a rate of 350 basis points over the 30 day Libor with a 4.5% floor. Can you imagine that? We're more solvent than the 3 banks we're talking with and are putting 50% cash into the deal from the get go. No wonder business can't get going.
Re: Big moves in the currency markets tonite
There's a full moon tonight.
BB & company up in Jackson Hole, Wy, hosted by KS Fed office. Hmmm, exactly who foots the bill for all of that? Could it be the taxpayer? Have they ever heard of "gotomeeting.com?". Let's cut next year's meeting from the budget & use those funds to pay some health care costs. See how easy that was? Not sure how I got off track, sorry.
Re: TED
George, best of luck on your deal. Know who your 'silent' partner is? hint: they assume no risk, will take about half your profit and if you don't pay they'll put you in jail. See Kaimu's early post. He nailed it.
Nikkei
Nikkei gapped down 1.08% at the open and then bounced to 8,860 now at around 8,825 which is down .90%. I know I keep mentioning the 1000 point tether with ^N225 and the Dow but there is a rather high correlation there. Anyway, it's getting late for me but Les and Kaimu will be watching "things".
Christopher Walken
Yes we can, no wait I can, just say no, oh heck just know:
http://dailypaul.com/node/143217
Re: GM's Volt Inflation Revisted - davefairtex, are you out ...
Dr. S -
"When I use a word," Humpty Dumpty said, in a rather scornful tone, "it means just what I choose it to mean – neither more nor less."
When it comes to the word "inflation", you have your very own definition of that word. Your definition of "inflation" simply means a higher price for some item you point at - in this case a "car" - regardless of any examination of why that price is higher.
The article you supply talks about GM trying to sell a compact car for a higher price - by adding more features presumably deserving that higher price point. Are these features worth the higher price? The marketplace will tell. Before, their strategy was to sell a stripped down car for a much lower price. You call this new strategy of selling more feature-laden compact cars "inflation". I would call it changing their product feature set to appeal to a different customer.
Like a PC vs a Mac - the Mac's higher price isn't "inflationary" (under MY definition of the word) since it provides an experience and a feature set that the PC does not. GM is simply trying to turn their PCs into Macs. We'll see how that goes. Presumably, some other car manufacturer will produce for the stripped-down compact car niche and (for the consumer of that stripped-down car) life will go on. It is unlike the marketplace to let a niche go un-provided for.
So given your definition (simply having a higher price), of course you're correct, since GM is clearly looking to charge more for their cars. Hey, that's price inflation! Macs are inflationary, Rolls Royces are inflationary, as is producing any higher end product, since their prices are most definitely HIGHER than those of the lower end products. Boy, doesn't inflation suck?
BTW, that's Germany's strategy. Produce high end products, and charge a premium for them. That's actually working pretty well for them, and for those who want the cheap stuff, you can buy it from some other manufacturer.
And since you've rested your case, I don't expect to hear anything more from you on this matter.
HA!
Re: TED/ TLT
(a) Is it possible that bond yields tell the real story (high risk present in the markets), whereas the declining TED spread indicates an attempt by monetary authorities to stem the risk?
(b) Alternatively, do bond yields simply reflect the current 'bond bubble?' Are there vested interests in seeing bond yields drop this low- which is to say, who's on the other side of the trade (for instance, would it surprise anyone to learn that Beijing deliberately revises data to [artificially] inject [the perception of] more risk into global markets, in order to offload Treasurys at all-time highs?
Re: Fading Desolation Row
I like the last three CSCO, INTC, XOM and if someone is really interested in the long term consider TEVA and MHS too. I began buying the last three and will continue to add going forward and look for points for the first two. Interesting times.
Long XOM, TEVA, MHS and hedged 50% for tommorrow.
Re: Fading Desolation Row
Thanks TelStar,
I'll check them out tomorrow, gotta get some sleep about now.
J
Re: Big moves in the currency markets tonite
Sorry Bill, what are you seeing? I can't see anything unusually untoward going on right now.
BTW, I haven't posted in a while but I've been here. I've been busy as heck the last few days shuffling $ around. This Bond/"Flight from risk" run is getting a bit extended and, anyway, doesn't feel right. Quietly in the background, the CAN$ has firmed; I can't flee from U.S assets and global sovereign debts to higher yielding CAN stuff fast enough. I have no idea what the next couple of months will be like but I can calculate value and yield.
Re: Just who WAS "the devil in Miss Jones"?
BINGO!
I remember going to a party at my design school of some guys in my older brother's class and seeing a bowl of pills and wondering if people didn't know that drugs could rot your brain. An honorary redhead.
Re: An ambitious plan in Asia for that OTHER fertilizer
Jock, excellent post. Thanks.
Re: An ambitious plan in Asia for that OTHER fertilizer
Jock..a tiny footnote to your story, well written and thoughtful as it is:
My semi-rural county is largely a watershed for the Puget Sound and the Straits of San Juan De Fuca where Orcas frolic. The leeching of environmental toxins into the water table via old septic systems, rainwater, agricultural and livestock runoof has created an awareness of cause and effect. Basically this: phosphates contribute to algal blooms in our fresh water and if nothing else clog the pipes of city water filters so that's an agreed bad thing. The upshot: all phosphate based soaps and fertilizers have been banned in our county. You cannot buy certain dishwasher detergents or name brand grass fertilizers in local stores.
Imagine the impact if such a notion spreads to owners of your phosphate deposits!
Re: GM's Volt Inflation Revisted - davefairtex, are you out ...
When the price of 'stuff' increases, it is only a reflection of your unit of exchange for 'stuff' declining.
Are taxes figured in the 'official' CPI? If not why not. The price of sorgum is more important to me than the price of an I-thingie. Get your priorities straight. Don't buy into the hedonics of dog food protein.
We have a lemming antibubble bubble in bonds. If bubbles are the equivalent of simply the madness of crowds then the world is surely mad to accept todays T-rates. The hyenas were treated to free fresh meat on their field of dreams. The bond lemmings are now spooked and afraid of the scaredy cats and go tumbling over a cliff. I wouldn't loan my government money at 10% if I was locked in for the next ten years. Would you?
I will no longer use the term 'inflation.' I will instead refer only to the decline in the purchasing power of our colored confetti. Pari passu against the daily tic tac toe of other colored confetti, I can only 'bet' for or against who is the weekly bigger begger neighbor... It's become a race to the bottom for the sake of exports. Remember that GDP is a measure of activity. It has nothing to do with quality of life or so-called progress.
Tomorrows GDP revision is just an adjustment in a cut in a line between zero and infinity. And the people we trust least will post the number.
futures 2:30am - Asia mostly green
S&P +3.70 / +0.35%
Level 1,048.50
Fair Value 1,045.85
Difference 2.65
Nasdaq +4.50 / +0.25%
Level 1,772.00
Fair Value 1,768.75
Difference 3.25
Dow +42.00 / +0.42%
Level 10,009.00
Shanghai tries to bounce again. Bullish divergence can be seen in the RSI readings, but money flow needs to pick up along with vol. Like Bill remarked, a squeeze could rope in the vol. but as for being sustainable? The 2.6k - 2.7k trading range continues for the moment.
Re: futures 2:30am - Asia mostly green
Good Morning Les, It's 3:15 a.m. in Nashville. Got up briefly to see if you were at the watch and here you are. If you're bearish, keep Europe in the red and we'll be okay with the recovery in Asia from their bad opening particularly in the Nikkei which gapped down over 1% and then I see went green +.95% which is a significant reversal. C U later.
Re: futures 2:30am - Asia mostly green
Morning George.
Missed the Europe opening. Looks like the CAC and DAX aren't convinced that going long is the way yet. Shanghai Composite held minimal gains.
http://online.wsj.com/mdc/public/page/mdc_internat...
Euro autos are red. French banks just beginning to rally green.
Another screwy day which I ain't game to touch. Still awaiting the vol. and direction.
Curious to hear what Bill sees in Forex movements last night.
Re: TED
TED down again -1.618% to 15.184 7am ET. Comforting to know the debt and banking issues in Europe, US and elsewhere are all resolved. It really didn't take that long Toto, boy that Wizard can do anything...
I'm seeing silver green with futures prices 19.01-19.06 depending on the board. I can't wait to see the ZSL opening number.
Re: Even when the markets were going up investors were ...
Bigwad1,
I think what Jeremy Siegel and many economists are missing in their calculations is the human factor.
Emotions are far less quantifiable than other factors and the numbers oriented folks aren't giving them their due. This is true of politicians also.
Polls such as consumer confidence are fickle and fleeting, missing the deep seated fear which I have been watching and hearing here in the Middle West.
"Stocks for the Long Run," has a nice ring to it and data can be charted to support the idea, but...
For old guys like me and for baby boomers who never learned to save, or those who have lost jobs, benefits and confidence in tomorrow — "Long Term" is trumped by today's groceries and this month's house payment.
These people are putting their leftover cash in what they perceive (rightly or wrongly) as the safest place.
This same perception is all the dollar has had going for it since Nixon trashed the metals backing it.
Re: TED
Johnny, I've been watching ZSL out of curiosity this morning. So far the bid-ask spread is too far to get a good read. 29.52 bid 30.99 ask 30 x 30 but that can change quickly.
Re: Just who WAS "the devil in Miss Jones"?
I think I'm doing good when I just remember being 61 ;-)
As Sinatra said, "It was a very good year."
Re: TED
Last night Bill wrote:
"Re: ZSL
Submitted by Bill Cara (1713 comments) on Thu, 08/26/2010 - 20:44 #67920 (in reply to #67919)
George,
At the close, the bid-offer is pulled away from the market and usually bears little or no relationship to the closing trade.
Also, last minute trades are often not reflective of the market at the time, but represent trades that balance books."
-----------
Vad concurred.
And that is why I am especially interested in the open.
OOPs, you were there!
J
We Just Don't Understand
I found the analysis of Obama by Peggy Noonan (WSJ Opinion)today to be both interesting and hopeful.
We Just Don't Understand
Americans look at the president and see a stranger.
Interesting in her presentation of the confusion he engenders.
Hopeful due to this quote:
"He'll have plenty of time for vacations when his one term is up. Plenty of time." — David Letterman
http://tiny.cc/f5ij2
Blockbuster bankruptcy
http://tinyurl.com/2wf3sbb
"Blockbuster, the movie rental chain, is said to be readying a bankruptcy filing for mid-September, The Los Angeles Times reported..."
1.6
equities like it
Re: 1.6 GDP
http://tinyurl.com/36ddvr9
In this Paul Krugman article he states "The important question is whether growth is fast enough to bring down sky-high unemployment. We need about 2.5 percent growth just to keep unemployment from rising, and much faster growth to bring it significantly down. Yet growth is currently running somewhere between 1 and 2 percent, with a good chance that it will slow even further in the months ahead."
Econoday added their spin to this mornings release: "Even though overall economic growth slowed substantially from the first quarter's 3.7 percent pace, domestic demand was actually stronger-4.3 percent compared to 1.3 percent in the first quarter. Certainly, there will be some slowing in domestic demand growth in the second half but a rebound in exports could help support the overall growth rate. The bottom line is that the latest GDP revisions are more supportive of continued recovery-albeit modest-than a double dip."
J
Obama could kill fossil fuels overnight with a nuclear dash for
This is an interesting article on the possibility of Thorium as a inexpensive , CLEAN and SAFE alternative to uranium . It needs large quantities of cash . China comes to mind , also ambition India and Brazil come to mind . India also has experience . The country that succeeds will have the ability to raise the standard of living of its population . Leadership , focus , the belief that their country can be exceptional and of course luck . http://tinyurl.com/3y3ypqr Bob .