[6:30am ET] It is unfair of me to lay the blame of the global economic and financial woes at the feet of the Big Three US banks, as I did in the Week In Review. All the money center banks of the world are to blame, and the equity markets have shown them an appropriate response.
Last week, the average loss in share price of Bank of America, Citigroup and JP Morgan was -35.0%. But, UK’s Big 3, consisting of HSBC (-16.2%), Barclays (-32.6%) and Royal Bank of Scotland (-32.9%), almost matched that ugly performance.
http://tinyurl.com/9mp8cs
The 5-day picture of Barclays shows the contempt of the shareholder for the management and the perceived financial strength of that bank. Yes, I name management because this bank’s CEO was the one jet-setting the world in search of what he called the low hanging fruit of badly managed banks. At the time I laughed at his Academy Award Oscar-deserving performance.
http://tinyurl.com/7yl245
Let me tell you a personal story. At lunch with a former central bank governor and my wife in September 2007, I reported that day’s news that the UK’s Northern Rock had to close its doors, a major bank gone bankrupt.
http://en.wikipedia.org/wiki/Northern_Rock
He was both shocked and inquisitive. “Where’s this leading?” he asked. “I have my eye on Barclays,” I replied. He stared at me as if to say, “Wow!”
I really don’t know what he was thinking, but at least he knew where I stood. The world as we knew it was about to come unglued.
Why did I name Barclays? I simply did not have confidence in their executive management. Nothing more complicated than that. This was the same bank that in March 2007 had fought tooth and nail against Royal Bank of Scotland, somewhat like Edward 1 of England against William Wallace of Scotland (Braveheart), to acquire the problematic Dutch humungous bank ABN AMRO, only this time the Scots lost by winning.
http://en.wikipedia.org/wiki/Braveheart
http://en.wikipedia.org/wiki/ABN_AMRO
I wasn’t enamored with either bank in that struggle, but truly I was disgusted by the public performance of Barclays’ management in that scrum. And recently, too.
One straight-shooter in this mess appears to be the Bank of Japan Governor Masaaki Shirakawa.
Bank of Japan Governor Masaaki Shirakawa said financial institutions' bad loans worldwide were likely to increase beyond current estimates… "There is a connection between the accumulation of bad loans and banks tightening credit and causing economic conditions to worsen further. As such, personally I expect the current figure of $1.4 trillion to rise a little more," Shirakawa told a parliamentary committee.
http://tinyurl.com/9x3sxx
Do you recall when the leading bankers claimed their problems were behind them and the eventual total cost would be about $300 billion? I remarked at the time it would be between one and two trillion, possibly more.
What did I say when Bank of America announced their $4.1 billion bid for Countrywide Financial? I said flat-out that it would be imprudent to buy any company without knowing its liabilities, and that no one on earth could determine Countrywide’s liabilities. Same with ABN AMRO, and the rest. I said books would be written…
http://en.wikipedia.org/wiki/Countrywide_Financial
Responsibility. Accountability. If you don’t see it in your leading bankers, you won’t see it in society.
You know, life isn’t a matter of going into a boardroom to duke it out with an adversary. It’s all about knowing what that opponent has done in the recent past to figure out who is going to be the winner, and then meet quietly to manage the process diplomatically.
Regrettably, these so-called professional bankers had the egos and mind-sets of gladiators. Like the message from William Wallace’s father (“Use your brains son”) didn’t get through to the son in the end, the foolish actions of these bankers have cost their employees, shareholders and their countries dearly.
Use your brains, son, or the market will respond without mercy.
As an aside, one might wonder why I am so combative and emotional myself. I am, by birth, 25% a Scottish Skye Man (Dobson’s of the MacLeod Clan), 25% Irish Orangeman (Neely’s of Ulster), and 50% Catholic Italian from the mountains near Napoli (Ciccarelli’s and Laroca’s [LaRocca?] of Caserta).
http://en.wikipedia.org/wiki/Clan_MacLeod
http://en.wikipedia.org/wiki/Orange_Order
Like yin and yang, I managed to survive. I learned “how seemingly disjunctive or opposing forces are interconnected and interdependent in the natural world, giving rise to each other in turn.” You see it in my writing, in my behavior.
http://en.wikipedia.org/wiki/Yin_and_yang
Enjoy your holiday. Enjoy the Obama Inauguration Rally. :-)
I will not be doing a Daily Report today. Actually, I gave you the news on Friday morning. I will return tomorrow and get my work done before the party really gets underway.
I have a good feeling about 2009. Often, you know, I’m right about these things. [teamonfuego, you are right; often, I am not.]
Btw, try as we have, it's impossible to get more than 300 comments on a single page in our new Drupal website platform, so korvus is trying some alternatives, which he may be writing about today. Your helpful responses would be appreciated because we are trying to make this blog work for you.
Comments
Obama Inauguration Rally Abroad
http://finance.yahoo.com/intlindices?e=europe
French CAC +1.1%; German DAX +1.2% and UK FTSE +1.5% at 6:45am ET.
Similar numbers in Asia-Pacific equity markets. Let's watch Canada and Brazil later today as well. The PM's ought to be higher.
http://finance.yahoo.com/q?s=^GSPTSE
Re: Barclays. I understand
Re: Barclays.
I understand that they are the (managers?) (custodians?) of the ishares family of etf's which includes most of the ones that Bill reports on, including xle.
Does anyone know off hand the risk in terms of default of these etf's if the bad news continues out of Barclay's, are they a separate division... From what I understand, volume plays a key factor in the safety of the etf (not from downside, but from default).
Anyways, Happy Obama Day from the great white north. (Toronto).
Barclay's
In 2001 my trading desk was instructed to unwind all of our power, gas, wx and other trades with Enron in Europe as the Boss was nervously unwinding them in the US and Asia. It took us 2 weeks, but we finally moved them out (Enron's stock hadn't fallen off the final cliff) except for about 10 million GBP that couldn't be budged. We insisted that Enron guarantee that risk unconditionally. Barclays stepped up. Unconditionally. Since then, I knew, too.
Korvus
One suggestion would be once Bill creates a new Community chat, the previous one is locked. keeps people from accidently posting where the msg may get lost.
Holiday - No Cara 100 Update
Good morning from Pennsylvania, home of the AFC Champion Pittsburgh Steelers.
Here's the latest from Bill Fleckenstein, "Real Recovery Won't Be Anytime Soon":
http://tinyurl.com/8s9a6b
Wishing everyone a great holiday.
BH
AGU.TO (AGRIUM) Purchased At
AGU.TO (AGRIUM)
Purchased At 40.00 and 41.64
Fundamentals;
AGU's consensus score is higher than 85.7% of the Agricultural Chemicals Industry.
AGU's consensus score is higher than 84.6% of the Basic Materials Sector.
AGU's consensus score is higher than 89.3% of the Jaywalk Universe.
(The Jaywalk Consensus is an average of all the independent research provider ratings on the given security. )
From Scotia Capital:*(Jan/15/09)
Due to the spike in urea prices, AGU is in the process of restarting its Fort
Saskatchewan plant at full rates of 465,000t/yr of ammonia capacity and
430,000t/yr of urea capacity. The restart is more proof that urea demand is
more essential and therefore more stable than potash or phosphate, supporting
our preference of Agrium over Potash Corp.
Technicals:
Weekly: Weekly MACDh(historygram) has risen for twelve weeks straight.MACDh crossed zero line two weeks and is rising.
Steady rising of RSI 7 and a Stockastic crossover in an oversold level four weeks ago.Stockastic crossed thru 20 same week as MACDh crossed zero line.
Daily: Jan 15 Bullish Engulfing Candle & stockastic cross at 38 level
RSI 7 crossing 50
MACDh about to cross zero line
A/D line rising
22 day MA is rising.Stock closed above 22 & 50 day MA on Friday,Jan 16.
Exit will be any close below previous days low.Pivot points (daily,weekly, monthly)are included for those interested in that "stuff".
PIVOT R1 R2 S1 S2
AGU 41.79 41.52 43.72 40.96 39.86
AGU 40.40 38.75 46.49 38.19 34.31
AGU 37.52 33.58 51.22 32.65 23.82
Re: Cost of oil production
"If this type of comment is not helpful to the community I will stop posting them."
Mark Barry- Those are EXACTLY the types of comments I appreciate the most. Thank you.
Lithium CLQ and others
Thanks Bill for the heads up about the lithium play. I've been lurking here for awhile but though I would contribute something. I invest mainly in the junior explorers on the TSXV.
There are not too many lithium plays out there on the TSXV but here are some others.
WLC - spun off from WUC last year has about 10 cents a share in cash. But its already up 400+% from December. WUC owns 30% of WLC and has not moved as much so that is a safer play. WUC is also trading around cash value (but is uranium focused).
CHU - recently aquired a lithium prospect after fleeing from Ecuador. Need cash.
NAR - spinoff from SBW in 2007 recently made a lithium discovery in the Northwest Territories. Need cash. Illiquid.
LAT - Lithium prosect in Argentina. Have some cash as well as potash and gold prospects. There are some big names involved including Pinetree, CMP Gold Trust, but they may be involved for the gold.
KBG with MJO - recently hit some lithium grades in Ontario along with other rare earths. Need cash.
NW - Lithium/potash prospect in Bolivia. Need cash.
You could put these on a list and track them to see how hot the lithium story gets. I own WUC only and mainly for its uranium potential. As cash is king right now be wary of those without it. The prudent thing is to wait for a PP to be announced or go with those that currently don't need financing.
Maybe there are more out there but this is what I have found.
Re: Korvus
That makes sense to me. I will often want to respond to a post from the previous evening, and I'm not certain whether the response gets carried over to the current session.
Obama bounce
There's a very good chance the markets will react favourably, at least at first, to the inauguration of Barrack Obama - which is an emotional and irrational response since nobody knows whether the rescue plan will be a spectacular success or a colossal failure. The best minds disagree; it's a coin toss. No doubt we will look back on whatever happens and be able to pinpoint this or that specific reason that we should have recognized, for whatever happens.
But good luck to him and to us.
Re: Obama bounce
"..an emotional and irrational response.."
tango6- yes, almost every move in the market is...looking forward to it, either way...
USD vs. Gold
my feeling has been that the USD will jump on the inauguration news as it typically does when big-ticket political events occur in the US. its a false flag operation to show strenght.
how would it look if the US dollar was tanking on the day/week the new president was taking office? conservatives/republicans would be all over that.
any move here is just that, a false flag in my mind, but one that could carry itself for a while longer than many of us may suspect.
all the usual banter about the US dollar ready to tank because of deficit spending and a bloated balance sheet has been on balance inaccurate as other nations and currencies are facing increasing pressure as well.
i only envision gold moving higher along w/ the gold stocks if the broad market moves up. any other option and we get sideways/downward action.
i plan to play it accordingly short of a breakout in gold.
Re Obama bounce
2nd
Agreed. And my original surmise was wrong (which supports your point) So far, the Canadian and European markets are down and futures on the DOW have reversed from a healthy 100+ to -51 but then, it's early going.
Re: USD vs. Gold
The USD is already up .86% today.
If your theory proves true and the USD does continue to rally after Inauguration, I would expect equities to fall along with commodity prices.
Also, with talk of a "second half recovery" circulating around financial TV, and many people expecting Obama to "save the day" it seems like the crowd may be betting on a rally and the path of maximum frustration might be another plunge.
I also read that Obama's Inauguration will be the most expensive ever and that Superbowl ads will be the highest price ever as well. Maybe they're trying to influence us into thinking that wasting money is still OK.
Rob.
Re: Obama bounce
Interesting take on the Obama bounce from one of Canada's few authors/economists...
Watching coverage of the pre-inaugural inauguration events on US television is to realize that no US president has ever assumed office with such expectations. A poll released Sunday showed that 80% of Americans believe he will make the country (ie, the economy) better, almost immediately. Yikes.
And while there will be an Obamarama bounce for a few weeks or months, the reality is this guy is never going to live up to those expectations. Because he can’t. Nobody can. And even the mighty force of the American government will have a hard time keeping 2009 from being the single worst year since, oh, 1932.
From a distance here in our igloos, it’s perhaps easier to understand that this guy’s about to take one of the biggest gambles in economic history. Already inheriting a trillion-dollar deficit, he’s about to spent another trillion priming the pump. But this comes amid very worrisome news. Bank of America is in a profit freefall. Citigroup’s carving itself in half and selling off assets. More than a trillion dollars of unstable mortgages are coming up for renewal this year and next. House prices are falling at the fastest pace in five years. More than 2.6 million jobs were lost in the past year, the lion’s share in the last few months.
But this is America’s last, best shot to prevent 2009 from becoming 1932. So, I wish Obama well. May the shepherd’s magnetic and infectious smile, the assured swagger and the soothing, uplifting words inspire his American flock to spend again.
Tuesday will be glorious and historic. Then comes Wednesday.
http://tinyurl.com/ax8wj3
Royal Bank of Scotland down big overseas. - 60% or more
http://tinyurl.com/9ydlry
wsj quote: http://tinyurl.com/9aqlx6
thats a hard pill to swallow if people bought RBS several days ago hoping for a bounce. those who shorted are prob thinking of ways to spend their new fortunes.
"Jan. 19 (Bloomberg) -- Royal Bank of Scotland Group Plc said it may post a loss of as much as 28 billion pounds ($41 billion), the biggest ever reported by a U.K. company, as the credit crisis worsens. The stock slumped as much as 71 percent. "
What happens to RBS ADR holders tomorrow am, as U.S is closed? will it halt, gap down to $1?
http://tinyurl.com/7y3hcx
Re: USD vs. Gold
i agree FL,
i think there is an attempt to portray obama as a superman who will wave his magic wand and set america back on track.
too much investment in the belief that collective attitudes can make trillions in debts and exotic derivatives based on shoddy lending will disappear.
too many gold bugs are bent on believing an inflationary scenario which will only occur when deflationary events currently unfolding slowdown. at the moment deflationary events appear only to be accelerating, and will catch many a gold and commodity player by surprise.
oil imho will fall lower than most people suspect it can, and life will go on, despite all the dire warnings from oil-patch magnates, they will still pump oil.
last time we wondered if there would be an obama rally when he won the election we got a hard fast market dump.
i see current USD strenght as indicative that whatever forces were at play at the mid-end of 2008 are still working, and will serve to make commodity and gold players suffer along w/ the rest of the market.
though i was encouraged to see the miners do well compared to the collapse in the financials last week. but still. no decoupling at all yet, too many deflationary/depressionary factors at play imho.
gold will go nowhere in my mind until something more substantial happens, the predictions of iminent skyrocketing gold prices appear to me to be distortions of reality. the USD is still moving up and hasnt cracked out of its uptrend... yet. this is one helluva dead cat bounce.
whats next, more talk of "chineese are buying gold" nonsense?????
Banks and Morality
I do not lay all the blame for this crisis at the feet of the American Mega-banks either. There are just too many identical circumstances happening in too many countries for this to be completely our fault.
My theory is that the American Mega-banks led the charge to immorality though. Our banks were the ones to first start securitizing these loan pools and our banks were the first to be allowed to increase their leverage ratios. What made the contagion spread from bank to bank across the world was by each bank who participated making the immoral choice after seeing their competitors getting away with it and not wanting to be left behind.
It's a blending of "keeping up with the Jones'" and crowd psychology. They needed the profit level their competitors were getting or they would be shunned much like many people need a better grill or car or house based on what their neighbors have. Many in the crowd getting away with it along with the blessing of the government and ratings agencies and analysts made any bank executives that had doubts assume they were making the moral choice following their brethren.
I believe these executives knew most of these loans would never be able to be repaid based on historical factors of who defaults and who does not. But the more honest ones convinced themselves it was different this time and with all the other banks succeeding at this strategy why couldn't they succeed as well. In fact, they felt they had to or they'd be forced out of business, not being able to keep up with the other banks' profit machines. The executives who were already immoral thrived in this environment, forcing the honest ones further down the immoral path.
These are the main reasons I believe it's important that in order for true change to take place in our financial system, we need to have new banks running the system. Otherwise we'll just get the Pied Piper playing a different tune as they lead us down again. And they'll be even more daring in their immorality this time around since they know we have their back no matter what they do.
Rob.
Re: USD vs. Gold
I totally agree that the dollar will get far stronger than many people think.
My personal target for crude is $10 bucks a barrel based on the world economy falling off a much bigger cliff than people expect.
Since our leaders decided than none after Lehman can fail they are tying up all the money in the system to the bad debts instead of letting the companies holding the bad debts go bankrupt(thereby wiping out the debt) and letting the money in the system flow to productive purposes.
I also submit that even if we construct the "bad Bank" to take all the 20-30 Trillion of bad debts out of the system, the credit markets will still be frozen because most of the banks' new cash resources will be devoted to buying the Treasuries the government has to sell to buy the bad debt. It's a downward spiral we can only get out of by letting the holders of the bad debt extinguish it by going bankrupt.
The "change" I hope to see is people suffering the consequences of their decisions again. If I lose my job or lose 20K in the market there's no Uncle Sugar to bail me out. I have to work harder to pay down my debt or declare bankruptcy and start over. Having two standards like this only increases the immorality and lack of trust in society and business.
Rob.
First Orders of Business: Names and Numbers
http://tinyurl.com/9fo36f
Demand accountability. Now.
Rally stumble
European bourses are down about -2.5% as Royal Bank of Scotland (RBS) appears ready to go under. Precious metals are down about -1% as the $USD is soaring, caused mostly by the Pound failure. That's not what my crystal ball had me looking at on the weekend, but not altogether shocking.
Economic and Financial Woes
Bill's commentary today once again points out what turmoil the lack of judgment and responsibility has brought upon us all. As with the banks, politicians have added their share and will continue to do so.
This being a very slow day I'll offer an extreme view for anyone interested.
I ran across a particularly dismal assessment by Dmitry Orlov entitled The Five Stages of Collapse. He uses the disintegration of his former home, the Soviet Union, as a pattern for what he sees as the likely future of the U.S.
The Five Stages:
1. Financial Collapse
2. Commercial Collapse
3. Political Collapse
4. Social Collapse
5. Cultural Collapse
While his first two observations seem to be taking place in varying degrees, like all predictions, we should keep in mind this is one man's opinion and there are at least some significant differences he seems to have disregarded.
When the Soviet collapse came the rest of the world was still basically unaffected. The new Russia got some much needed assistance from the advanced economies. This managed to keep the issue pretty well confined.
The last three as he describes happening in Russia face some far different conditions here in the U.S.
During the 70-year Soviet experiment, whole Republics were considered and treated as sub-par citizens. Racial, traditional and language differences created strongly unified entities within the whole, which when given chance at autonomy, grabbed for it. He sees this happening here — I have strong doubts.
His analogy to racial discrimination in the U.S., while similar in some ways, is lacking in total effect, I believe. The same goes for ethic, ideological and geographic groups here.
The rapid dissolution of governmental authority he saw there would be unlikely to take hold here. I expect political leaders would unite to create a focus on foreign powers as the culprit. A return to nationalism which has in recent years been seen as a failing would swing into full court press.
Given time we could see a return to manufacturing and "Buy American" slogans eventually creating something to trade other than worthless IOUs like U.S. dollars and Treasuries.
If time runs out I would not be too surprised to see a fall back solution like what led to WW2. High tariffs, super patriotism, embargoes and war.
His one point which I've already been concerned about is the effect of Sovereign Wealth Funds. We know the power of the Washington lobbyists, some of whom are currently foreign financed, imagine the foreign backed candidate elected and seated on an influential congressional committee. this could be a threat not only economically but to our national security.
While he does not specifically mention PM investment, his scenario screams for it.
(http://www.energybulletin.net)
For some reason tinyurl didn't work on this.
Let them fail....
If these institutions are insolvent then there is nothing to be lost by letting them fail and getting rid of the reserve banking model altogether, a model that should make Bernie Madoff envious.
If we are paying to reflate dead banks then we shouldn't throw good money after bad. Better to start over with a healthy model and capitalize it.
It might be better to outright guarantee deposits, seize the assets and start from scratch. At least we could put the moral hazzard problem to rest.
If they don't get a good correction the bad behavior will escalate as it always has. First lose it all, then go directly to jail. Do not pass Go, do NOT collect $200.
Bill -
I hate to state this because I like your writing a lot, I like your blog and I like the people on this board...one of things that turns me off a little is when you write about how detestable bankers egos are and then you make a statement like this:
"I have a good feeling about 2009. Often, you know, I’m right about these things."
Just wanted to point this out as my opinion and how I feel about it. Doesn't mean I don't like you or the work you do for this blog.
Re: Obama bounce
"And while there will be an Obamarama bounce for a few weeks or months, the reality is this guy is never going to live up to those expectations. Because he can’t. Nobody can."
Let's try to challenge the assumption that one man can't change the country.
First, it's never one man doing all that is needed, it's the effect one man has on the aggregate population. Obama has already shown he has the necessary charisma.
Next, there are (relatively) recent historical precedents. Mao Zedong was able to unify China. Nelson Mandela succeeded in ending apartheid in South Africa. Mahatma Gandhi led India to independence. Of course, there was more to these historical accomplishments/milestones than one man. It's called leadership.
Then there are the expectations. IMO, the expectations are not of Obama, they are expectations we have of ourselves and our neighbors and colleagues. We're not expecting Obama to work magic while we sit back, but rather to provide the [framework for/backdrop against which] we make the changes necessary to turn the economy around. He can do this.
Obama CAN live up to the expectations. The question is whether he WILL.
Re: USD vs. Gold
Re: "My personal target for crude is $10 bucks a barrel based on the world economy falling off a much bigger cliff than people expect".
With all due respect; you might consider buying a bicycle or horse for transport because there won't be much oil produced in the world at $10/bbl.
Also, gold prices can lift as the $USD lifts. There becomes a point, as central banks around the world (Canada and Japan next) compete to drop their rates to zero, when the Dollar has no impact on gold, and both can rally simultaneously. Why would anybody put their money in a savings account earning almost zero or a 5-year Treasury bond earning just over 1%? The point is that people will invest in gold because it is an historic store of value. Unlike crude oil, which is a consumable, and could be pumped faster if needed, gold is money and the amount of it known to be ready to produce is very small, and even getting it out of the ground is very costly and getting costlier every month.
So, with respect to gold, I don't think there are many alchemists out there who are prepared to spend $2 to produce money worth $1. As for oil, the same can be said that companies will not spend $50 to produce a barrel that people will only pay $10 for.
If you have the data on your side (rather than steep cliffs), let's hear it. I have the time today -- that is, when I'm not in my hammock on the ocean, enjoying a clear, warm day. :-)
Re: USD vs. Gold
At least it stopped snowing in Boston. Must be 2 feet plus on the ground and subfreezing temperatures. Other than that...it's great.
The end game is hyperinflation. We can work back from there. One "expert" I follow says 2014. Let's hope we're all alive to see 2014.
http://www.amazon.com/Economics-Inflation-Currency...
Re: Bill -
teamonfuego, I really don't mind any criticism like this because it is constructive. The more you speak up, the more I am forced to put up or shut up. I enjoy the challenge, but also know there are and will be times when I ought to bite my tongue. Thanks.
Buy Cara 100 Royal Bank
Starting position $32.28(CAN)
Accumulation Zone (as per RSI screen)
S2 pivot point (daily) is 31.98.Price hit 32.17 and started to rise.
Ex.Div Date is Jan.22/09,yield 6.3% ie. .50 cents
Canadian banking system is the worlds strongest.
PIVOT R1 R2 S1 S2
RY 33.86 34.08 35.74 32.81 31.98
RY 37.03 37.25 39.11 35.88 34.95
RY 36.83 37.57 45.43 32.17 28.23
If it should fall to the 28.00 range I will back up the truck.ps,I only have a small truck !
Re: Cheney's Exit Interview
"I think this whole line of discussion is degrading to cannibals."
Grym- (a) So now we know any replies to comments from an earlier session do not get carried over to the current one. (b) We also know cannibalism can be a self-degrading activity, as prion diseases such as kuru/Creutzfeldt-Jakob Disease (and which include 'mad cow disease') are transmitted via the consumption of dead bodies. Slow day indeed.
GG & SLW on toronto exchange
Goldcorp: http://tinyurl.com/9vzyrz
Sivler Wheaton: http://tinyurl.com/7y99a4
Yamana: http://tinyurl.com/a2gen7
i guess on track for avg daily vol or hair under it.
tomorrow should be an interesting day in U.S
Re: USD vs. Gold
"Mumbai: Drastic fall in Gold demand"
http://tinyurl.com/7hj8d8
Gold will continue lower, demand globally for goods and services is going down. Yada yada yada about countries printing money, debt is being destroyed at a much faster pace.
The usd just creeped above the 200 day average, expect it to stay there for the majority of this year and probably the next year. We are in a period of deflation and reflation is no where to be in sight.
I would rather get 1% on "safe" deposits, than take risks.
If oil was produced at $10 a barrel, wouldn't that mean that demand was low? (we can't focus on the symptom)
the global supply would be stockpiled so horses would not be needed. Of course not much oil would be produced but it would still be produced, people have to work.
Re Gold prices vs USD
"Also, gold prices can lift as the $USD lifts. There becomes a point, as central banks around the world (Canada and Japan next) compete to drop their rates to zero, when the Dollar has no impact on gold, and both can rally simultaneously."
This, i am committing to memory as i have been asking myself if gold can rise with rising dollar and falling stock market. as in the recent 12-24 months gold has been linked to inverse dollar and linked to equity markets. I guess at a certain point gold will decouple from the inverse trade, and begin its journey as panic safety trade.
the things i continue to learn here!
Oil Pricing Mechanism Suspicions
The odds of oil going too much lower are slim because global crude oil traders are already questioning the pricing mechanisms for WTI. Rather than a sharp downtrend in crude oil demand, it is more like a suspicious crude oil build-up at Cushing, Oklahoma...
Oil traders are quietly pricing some of their deals away from the West Texas Intermediate contract, traditionally the world’s most important oil benchmark, as it is being distorted by record inventories at its landlocked delivery point.
The move is a setback for the benchmark that since the launch of the Nymex WTI futures in the early 1980s has dominated physical and financial oil markets.
The surge in oil inventories in Cushing, Oklahoma, where WTI is delivered into America’s pipeline system, has depressed its value not only against other global benchmarks, such as Brent, but also against other domestic US crudes.
Julius Walker, an oil market analyst at the International Energy Agency in Paris, said there was “anecdotal evidence” of traders moving away from WTI and “doing deals based on other US oil benchmarks”.
http://tinyurl.com/9vf6zp
Re: USD vs. Gold
Dr. Cosa,
I do amire your feedback. I do also think it's reasonable to jump into golds when there is more evidence such as break-out or fundamentals.
I just wonder the last time $USD contract is around 85...the gold is around 750 price level...which is back to 12/08/08 ?
But this time...gold price is almost 100 higher while USD is at same level.
I'm confused...can anyone explain to novice like me :-)
Re: Let them fail....
Craig & others.....
Regarding the continuing bank bailouts, I agree with all of the moral and ethical concerns regarding keeping these zombie institutions afloat. It is against all of the principals of free market capitalism that we have ever known.
But at this point, isn't the continuing bank bailout just a real estate bailout with another name? If one of these big banks like BAC or C is allowed to fail, doesn't it set the wheels in motion for total repricing of the real estate market? I.E. if BAC were let to fail, wouldn't all of its remaining liabilities have to be assessed at real current values and the bank would have to take real cash losses on its mortgage portfolio?
So as I see it, the gradual bailout method currently being employed allows banks to slowly unwind their gargantuan mortgage portfolios, allowing them to help renogotiate terms for salvagable mortgages (that if directly marked-to-market today would be unbearably large losses and would then become the direct responsibility of the U.S. government?).
Sad to say it, but from my vantage point this bailout has actually prevented an all out collapse of the U.S. real estate market (yes, I say that knowing that prices are substantiall down from 2006 highs).
If the government were to let BAC or C flat out fail, isn't there a likely potential to see another devestating 20-30% loss in the real estate market in a relatively short time span? So even though we are treading the ethical waters with this bank bailout, can we really afford to find out what happens if we let them fail?
This is all how I see it from the perspective of someone who has never owned any real estate before. I personally would prefer (in theory) that we didn't bail these banks out, but I see it as having the possibilities to create a situation where people are crushed with unbearable debt enslavement which could lead to total chaos.
So, here we are, between a rock and a hard place.
History
History is being made!
Martin Luther "had a dream"..... tomorrow a man who is 1/2 black and one 1/2 white is being elected as President Of the US the day after the Martin Luther King Holiday. It is sad that most refer to Obama as a black man. We all gain by the truth, and degenerate when reality is distorted.
Chart of the S&P500 attached shows how the market tanked 8 years ago when Bush came to office. We need to be on alert 7 years from now!
Re: Oil Pricing Mechanism Suspicions
fireworks- great link...USO players should take note, as it is the WTI spot prices you are gaming...
Re: Bill -
you've made lots of good calls and your guidance and commentary is great. we all know this so i guess what i'm saying is there is no reason to state the obvious.
gold here
not wanting to look too far into the gold price action today but this may give an idea of where im coming from when watching spot gold.
i really like Kitco's 3 day overlay chart. at first i didnt like it but now i cant really look at ST moves in gold without examining this chart.
it gives a great reference point of golds day to day moves w/ support and resistance.
im of the view that gold spends most of its time basing between sudden drops or spikes. when basing if the following few days gold fails to breach is prior highs or at least the high points of the last 2 days prices, this negative slant to any basing action means a slide down is forth coming. it tends to happen quickly.
right now gold is creeping back up to its closing price last friday. its behaviour here is key to me. should it clip $842-843 then move back down, its not good short term, should it hit then base above, its a good sign, even if it dips back down afterwards.
generally i find the early morning price collapses only confirm a general downtrend still in effect for gold on the medium term. (pull up a 1 year of gold and note the lower highs, still in effect)
so im watching close right now...
Re: USD vs. Gold
norm - "If oil was produced at $10 a barrel, wouldn't that mean that demand was low? (we can't focus on the symptom)
the global supply would be stockpiled so horses would not be needed. Of course not much oil would be produced but it would still be produced, people have to work."
I agree that oil could conceivably fall to $10/bbl or lower, while the price of everything falls, so too would oil and anything other than "flight to safety" currency. It looks like the USD is the chosen currency for the moment.
You say oil will still be pumped because people have to work. My question is; where will they be working???
Brimelow: "Stocks can't go much lower before reaching
unsustainable depths"
http://tinyurl.com/9gyjn4
"We base this opinion on the work of Prof. Jeremy Siegel of the University of Pennsylvania's Wharton School, author of the classic book, "Stocks For the Long-Run." Note: Siegel doesn't necessarily agree with our conclusions. See Siegel's Website
Siegel's most famous finding: Stocks have accumulated on average in real terms at a remarkably consistent 7% or so over the past 200 years. Shown on a log scale this consistent trend appears as a straight line."
"Adjusted to Jan. 14, Siegel's broad measure of stocks is now down even further, to 43.1% below trend.
That means that this bear market is now actually slightly worse that the 1972-1974 bear market.
Which was heralded as a once-in-a-generation experience."
"Bottom line: In two centuries, Siegel's year-end data has never shown the stock market further below trend than it is today."
Re: USD vs. Gold
the banking system is insolvent but bankers are still working right? Banks aren't making profits but they are still around? People do not have to work but I am sure there will be plenty of jobs when/if we have $10 oil. If it were to ever hit $10 it does not mean it will stay there forever.
We have had $10 oil before, it wont be the end of all or Armageddon. Socially when we rack our brain on a topic like this we immediately think it's over. Far, far from the truth. Things like this will present opportunities of a lifetime. We just forget what risk really this and invest our dollars on the "hope" that the worst is over or we are at the bottom.
If those companies or nations who can't afford to stay in business at lower prices, SHOULD NOT be in business. That is business risk. Someone new comes in and picks up the pieces at a lower cost and life will be good once again. We have way to many "costs" that must go because of "fantasy land" entitlements. No sign of recovery until those legacy costs go down and away.
The opportunity of three generations will present itself here in the next few years. The goal will be to stay in the game until then and have a lot of powered ready.
"Short plays only- Holding leveraged and inverse ETFs too long
"Holding leveraged and inverse ETFs too long distorts objectives"
http://tinyurl.com/a6hmju
Yet another media examination of what was first pointed out by David and SiO2 a year ago.
Crude Oil Will Be Moving Up Soon
Somehow I doubt if these big bankers would go to such extreme efforts of storing vast amounts of crude oil for anything more than a short period of time and without reliable knowledge of crude prices not making an upward move. As an aside, nice use of TARP money...
Morgan Stanley hired an oil tanker to store crude oil in the Gulf of Mexico, joining Citigroup Inc. and Royal Dutch Shell Plc in trying to profit from the contango, two shipbrokers said in reports earlier today.
http://tinyurl.com/7hxtro
mealy-mouthed
Firmly in the mealy-mouthed predictions category:
"A bear-market bottom may be in sight."
Then again, maybe not.
Re: Brimelow: "Stocks can't go much lower before reaching
Sounds like "hope" and book sales to me.
"That means that this bear market is now actually slightly worse that the 1972-1974 bear market."
Trying to compare stock bear markets is idiotic. The whole system is insolvent we have a money bubble and everything is in a bear market except cash.
Stocks are not the economic driver of the globe, there are many other markets that have just as if/not more importance than stocks.
Siegel is a cheerleader. Buyer beware.
DNA (Cara 100)
Zack's Bull of the Day:
Genentech (DNA) posted solid results for the fourth quarter and full year 2008. Sales of Avastin and Rituxan grew double digits in 2008 and the company saw non-GAAP earnings rise by 16%.
Growth in 2009 will not come as easily however. Rituxan is slowing and much of Avastin s future upside potential is based on expanding the label into new areas of growth including glioblastoma, renal cell carcinoma, and adjuvant colon cancer.
Under normal circumstances, we might call 2009 a transition year. But Roche s $89/share bid is still on the table, and speculation is increasing that an even higher bid is coming. Genentech s standalone value is between $90 and $95 per share based on our financial forecasts. However, a new bid from Roche could push the shares closer to $100. Therefore, we recommend continuing to own the name. Downside seems limited as long as Roche is around and upside could come in the form of a higher bid or positive data on Avastin.
Re: Oil Pricing Mechanism Suspicions
ditto, great link fireworks, this is important information to note. Over the wknd, I was looking into xeg.to (i'm in Canada, so this one makes sense vs. xle I believe, as they are highly correlated [to the naked eye] [i didn't calculate the correlation coefficient, although perhaps somebody knows a website that will do this?]}
I think the dollar is bound to fall 'eventually' and right now i'm paying a 25% premium to trade USO or XLE, so if i gain 20% on USO and cdn $$ rises equivalently against the USD, and i want to cash out my chips, i'll only get my initial investment (very basic stuff I know)
anyways, looking to enter xeg.to at 12.00 if I can, which is around the december lows.
Re: Brimelow: "Stocks can't go much lower before reaching
EDC- Just wanted to point out that the opinion is Brimelow's, not Siegel's. Brimelow is using one of Siegel's studies/charts to support his opinion. So Siegel is not the cheerleader here.
Re: Oil Pricing Mechanism Suspicions
Would anyone know if there is a symbol that could be imputted into stockcharts.com that would have information to the spot price rather than the futures, thanks.
The $5000 Universal World House
Here's a company that thinks ahead:
http://tinyurl.com/99u9fw
"Swiss company The Wall AG has a perfect solution for third-world shanty towns, semi-permanent refugee camps and approximately 7.2% of adult Americans: paper houses!"
"It has been designed so that a family can slaughter an animal on the veranda, wash it in the shower and hang it, along with fish, on an integrated washing line."
Re: USD vs. Gold
I could see fear continuing to grow and causing gold and the dollar to rise simultaneously.
I don't have any data to support my target of $10 oil. I just have a gut-feeling based on three factors. 1. There are too many people long oil right now for it to be a bottom. Until most traders are short or neutral on oil the path of maximum frustration seems to be down. 2. Every bank and other company that can get a ship is filling it with oil and storing it betting on higher prices soon. 3. The dollar will rally far higher than many think possible with all the money printing we're doing for many of the same reasons listed in #1. The rest of the world continuing to cut rates while ours remain at zero or even rise will also contribute to dollar strength.
And the world economy falling off a steeper cliff than we expect is based on the deflation and protectionism I believe we'll see alot more of this year. Trust and confidence are what people need to take risk and to consume more than they need, excess consumption. There will be no trust and confidence until institutions at the top start taking their losses and making moral business decisions. The more we see institutions bailed out for bad bets or failed business practices, the more we'll protect our personal balance sheets and spend less and borrow less to compensate for the inequality. Since the world relies on over-consumption to maintain growth levels everyone wants, people continuing to cut back consumption will reinforce the downward spiral we're in.
Obama can start changing this by holding accountable the institutions at the top and making them take their rightful losses. That will inspire the confidence consumers need to once again risk their assets and over-consume.
Rob.
Re: USD vs. Gold
"With all due respect; you might consider buying a bicycle or horse for transport because there won't be much oil produced in the world at $10/bbl.'
I recall in the late 80's oil did drop to $10/bbl when I worked for Royal Dutch Shell here the USA. What we did was stop all R&R [Reconditioning & Recompletion work] and cut expenses & staff to h*ll and back. Major projects not already started were put on hold and those already underway continued. It was a very sucky time to work in the oil patch.That's when I bailed.
Re: Brimelow: "Stocks can't go much lower before reaching
2nd - thanks for pointing that out. forgot that the author has the opinion for the story. my mistake.
on another note..
Spain loses triple a rating...
FT:
http://tinyurl.com/7u7rmb
Re: USD vs. Gold
Rob - just some thoughts on your comments
"1. There are too many people long oil right now for it to be a bottom. Until most traders are short or neutral on oil the path of maximum frustration seems to be down."
I agree with the "maximum frustration theory" but I think you should also consider that everyone who owns an automobile is "short-oil" and in the end oil is consumed by people, not traders. So, while lower priced oil may create maximum frustration for traders, Joe Consumer is not frustrated by the falling price of oil.
"2. Every bank and other company that can get a ship is filling it with oil and storing it betting on higher prices soon. "
It is true that many companies are trying to store oil offshore, but I believe most of it is a fully hedged bet on the eventual reversion of the oil contango, not a bet that prices will go higher. I.E., if you have the ability to rent an oil tanker, fill it with oil, and pre-arrange a sale of it at a higher price in the future, it doesn't really matter where the prices go. You have already locked in a margin. Its just price arbitrage (not betting on a higher price).
Re: USD vs. Gold
"I don't have any data to support my target of $10 oil. I just have a gut-feeling based on three factors. 1. There are too many people long oil right now for it to be a bottom. Until most traders are short or neutral on oil the path of maximum frustration seems to be down. 2. Every bank and other company that can get a ship is filling it with oil and storing it betting on higher prices soon. 3. The dollar will rally far higher than many think possible with all the money printing we're doing for many of the same reasons listed in #1. The rest of the world continuing to cut rates while ours remain at zero or even rise will also contribute to dollar strength."
Rob- Try this:
I don't have any data to support my target for $200 oil. I just have a gut-feeling based on three factors. 1. There are too many people short oil right now for it to be a top. Until most traders are long or neutral on oil the path of maximum frustration seems to be up. 2. Every bank and other company that can get a ship is filling it with oil and dumping it onto clients betting on lower prices soon. 3. The dollar will sink far lower than many think possible even without all the money printing we're doing for many of the same reasons listed in #1. The rest of the world continuing to hold the line on rates while our Fed remains vigilant will also contribute to dollar weakness."
Morgan Stanley oil
Well, Morgan Stanley had entered into an agreement to lease a huge oil tanker to store oil at $68k/day. Your TARP dollars at work!
Bloomberg now reports that it has just cancelled the deal.
"Morgan Stanley scrapped a deal to hire a supertanker for storing crude oil in the Gulf of Mexico, two people familiar with the situation said.
Traders for the bank canceled the booking today, the people said, declining to say why or be identified because the information is private.
Banks and commodity traders are seeking new ways to make money after the Standard & Poor’s 500 Index fell by the most since 1937 last year and crude oil prices dropped more than $100 a barrel from their peak. Companies including Royal Dutch Shell Plc, Koch Industries Inc. and BP Plc are keeping enough crude at sea to supply the world for almost a day.
Frontline Ltd., the world’s biggest owner of supertankers, said Jan. 14 about 80 million barrels of crude oil are being stored in tankers, the most in 20 years.
Morgan Stanley had earlier agreed to pay $68,000 a day to rent the 2 million-barrel carrier Argenta, according to reports from Athens-based Optima Shipbrokers and Paris-based Barry Rogliano Salles. That works out at $1.02 a barrel a month for a 2 million-barrel consignment. "
dr. cosa
On kitco's site where do you click to get the 3 day overklay chart that you spoke of. Thanks
Geithner and Madoff
It is without doubt that society is full of double standards. It seems that the rule of law applies most to the person with the fewest number of political connections.
I would submit however, that the double standard in general originates in society and specifically becomes obvious in high profile cases involving leadership. It is the result of many who put specific agenda or interests above moral judgement. This is the slippery slope on which we have been traveling for some time. It is, IMO, an exponential curve of corruption in which the slope is getting much steeper in the last few years.
With that thought, I am writing to say that Geithner should not be judged based on what Madoff is getting away with but with what is right. We should apply the same standards to the future leadership in which we, the citizen with fewer political connections, would judge each other and most likely be judged.
Re: USD vs. Gold
Your assumptions would work in the opposite scenario of where we are right now.
But I believe the rest of the world will race to zero rates to match us.
And I was short oil from 100-125 but got shaken out at a loss as it went to 147 and missed the fall. So I could easily see it going to 200 on the back of the shorts and calls of too much supply but I think we have more deflation to go through first.
As we can all see, opinions are just opinions. The number and diversity of them is what makes the market so great.
Rob.
WFC
Anyone have thoughts on Wells Fargo rsi m-28.35 w-30.88 d-13.38 closed at 18.68 with Feb 20 calls going for 2.35.
Re: USD vs. Gold
Rob- Simply pointing out the time to short was when oil was at $140 and we were led to kill our shorts by $200 scenarios...I think the smarter bet right now is the other direction...but I understand what you're saying...
Banks Using TARP to Hoard Oil
Jess has some interesting commentary as usual regarding oil contango and links to a Bloomberg article suggesting a rapid rise in oil in the near term:
http://jessescrossroadscafe.blogspot.com/
$10 oil is equal to 20 cent gas, a girl too pretty, too much money, car too fast ...
Re: USD vs. Gold
I agree that the lower prices could encourage people to drive more and consume everything more but I think the more powerful factors of not trusting leading institutions and our rejection of the immorality at those levels and our fear of the system collapsing will keep everyone in a cautious and protectionist mode.
I also agree that some oil is currently being stored based on future delivery contracts already negotiated but I think most of it is being stored using our bailout money purely on speculation of being able to sell it at higher prices this spring or summer. The oversupply caused by this will continue to pressure prices.
Rob.
Re: USD vs. Gold
You're so right how they scared us out of our shorts back then. I remember it clearly.
How many other people are predicting $10-20 oil right now though?
My understanding is that most traders and lay people expect oil to rise very soon.
Rob.
Re: WFC
banks seem to fit the model of buying when out of favor, HOWEVER, it's not like buying JNJ or WMT when out of favor....banks have been treated as "expendable" by traders this last year.....so much junk on the balance sheets.......as far a feb goes, that is short term and looks like a crap shoot to me......I'm getting away from crap shoots......
the cara 100 look like they have been surer bets when they dip low and RSI is below 40.....run those names is my advice..
.......do you have a liking for WFC?
Re: Banks Using TARP to Hoard Oil
imagine that, banks manipulating the market.....who da thunk it?
i'm long oil
Re: USD vs. Gold / Crude Oil
There are several cumulative costs associated with production of crude oil; lifting cost (natural or artificial), transportation, and exploratory (field development). So if we're talking economic recovery this year, it's unlikely IMO for oil to fall below $10/bbl for more than an instant or two based on fundamentals. For instance in case of some kind of currency collapse or governmental default...
Anyway, to draw a line in the sand is helpful, here's what I've been looking at for what it's worth:
http://www.eia.doe.gov/neic/infosheets/crudeproduc...
I heard from the lips of a Saudi Prince (oil minister?) that their recent cost/bbl was $2. I don't know for sure if this is just lifting cost at their new mega-field...., I assume it's production cost but was personally unable to speak with him for clarification.
Re: USD vs. Gold
Rob- Scaring longs is a different ball game. I don't think the bulk of long positions are speculative. Holding short oil contracts at 140 was a game that tested nerves and invited sleepless nights. Holding oil assets is a more relaxed position. If I were an oil producer, I'd be cutting back on production, and looking forward to a hell of a good time. JMO.
Re: Brimelow: "Stocks can't go much lower before reaching
bill fleckenstein's article at MSN seemed congruent with Bill Cara's near term look...Fleckenstein likes to prognosticate in his writing farther out than say B. Cara......
Re: USD vs. Gold
an old highschool friend of mine is an Oil VP for a multi-national firm. He sold 8 million dollars in options last March or April, $2 below it's 52 week high....i heard him giggling on the way to the bank.
I wonder what he's doing now.....
Re: Let them fail....
I'm of the camp that believes real estate prices will keep falling until equilibrium has been reached.
My definition of equilibrium is when average house prices are no more than 3X average income for most areas in the US and when people wanting to buy houses have no more than a 36% DTI on their balance sheets including the full mortgage payment. Once these two conditions are met we can start working through the inventory and when the inventory is back to historical levels is when house prices will start to rise.
These were the standards used forever, which always had reliably low default rates that were thrown out since 2002.
Accepting these premises means that the "Zombie" banks we've already pledged 8.7 Trillion to are in fact insolvent and will only survive if we agree to take all 20-30 Trillion of their bad bets. However, letting them fail would extinguish the bad debt and leave the good assets for a more responsible bank to manage, thus improving the system while freeing up money to lend to productive purposes. Lending hasn't increased because they are still insolvent.
Also, let's say we give them the 20-30 Trillion. What's to stop them from doing this exact same thing again? Why would the same players all of a sudden act morally when we've rewarded their immorality?
I submit that the risk to the economy of allowing these "zombie" banks to continue leading the banking industry is far more perilous than letting them fail. What we're doing now is emboldening them to act even more reckless and with less regard for what is right.
Rob.
Re: Morgan Stanley oil
>Traders for the bank canceled the booking today, the people said, declining to say why or be identified because the information is private.
Would it be wishful thinking to suggest that Congress told them to pull their finger out.... of this deal.
Oil Production Costs
Adding to the oil production question, I've found a graph of EIA of landed imported oil costs - presumedly into the US - broken down by country.
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_...
I've inserted it because as I was briefly looking over the numbers in the old comments I saw varying numbers for Venezuala, amongst other producing nations. If I'm reading the chart correctly, average costs for barrels imported from Venezuala amounted to $57 in 2006 and $66 in 2007.
Now if Chavez was being profligate on the back of oil sales - and he was - then this likely precludes productions costs of $90 per barrel as the upper costs were quoted.
Chavez was spending big on the poor and military hardware long before oil was $100pb.
dberryclan
re-WFC , I was looking at buying the Cara 100 ..Royal Bank..I'm Canadian.it's in the accumulation zone,
so I was checking the calls looking to do a BCara buy the stock sell a call. Royal calls where not in the 10% range Bill mentioned on the weekend..so I started checking all the US banks the return was there on WFC. I also have a soft spot for Buffet buys, he increased his position in WFC and this stock has held up better than most banks..(maybe the shoe drops later). Started thinking if you buy the stock and keep selling a one month call after a year you may end up with a cheap stock that would be a good hold..if it didn't get called
Re: USD vs. Gold
I remember a few sleepless nights back then after Goldman called for $200 oil. Since then I've used Goldman as a contrary indicator.
If many of the longs are not speculative but investors looking 5-10 years out, they could put a floor in the oil price and encourage more people to go long as we see them buy and hold the dips.
A large part of the oil price also depends on whether demand keeps decreasing or increasing. And how much of this supply that's being stored is showing up as artificial demand right now is important as well.
Great discourse today. I love the different perspectives and viewpoints. We'll all become more informed and smarter by sharing our ideas.
Rob.
Re: Morgan Stanley oil
Responsibly using our taxpayer money instead of betting on higher oil prices with it sounds like "change" I can get behind.
Rob.
Re: dr. cosa
mikede
I think the Doctor is using this...
[3 days - 3 lines red/blue/green]
http://www.kitco.com/charts/livegold.html
Worldwide Glut Of Car Inventories
Here are 10 photos that show how global car inventories are reaching epidemic proportions...
http://tinyurl.com/8dza7g
Re: dr. cosa
yup thats the one!
(note how we still havent cresed $842...)
Re: Morgan Stanley oil
From a risk/return perspective, can you really argue that arbitraging oil prices is more irresponsible than lending money to less-than-creditworthy folks to buy or refinance deflating assets?
If the U.S. government is going to get any of this loan money back, the oil storage contango trade is without a doubt less risky than loaning people without jobs money to buy real estate or automobiles. And hiring otherwise idle shipping tankers actually does contribute to the economy by securing jobs, tax revenue. They are fixing a return on this oil contango trade with little to no risk. If the price of oil goes down, they still make money. Why is that irresponsible?
qt
thank you
Gold/ Oil/ USD/Dow
Lots of comments on gold and oil today...
a picture is worth a thousand words
see the chart
http://tinyurl.com/8ryktj
Re: Let them fail....
Billy -
Unbearable debt enslavement just means default and start over. There's no debtors' prison in the U.S. If your bet on the market failed and you lost a little or no equity in your McMansion, you default and maybe get yourself a divorce that was based on consumption, not love. Life goes on for these folks.
Certainly, TARP will not solve commercial real estate woes. Worst is coming soon as debt rolls over. Cash is now the king and credit is dead. Long live King Cash. Goodbye lifestyle centers, GM-Chrysler-Ford car dealerships, REITs (euphamism for CRE securitization), Manhattan skyscraper occupancy, Miami condo speculators, house flippers with big-busted wives for partners on TV, mortgage brokers, Circuit City, Mervyn's, Linens 'n' Things, 1.5-mile NASCAR race tracks, and Donald Trump's portfolio just as a good start to the coming purge.
Playing the educational stocks (DV, APOL and ESI)
Playing the educational stocks (DV, APOL and ESI)
http://chartsandcoffee.blogspot.com/2009/01/point-...
Re: The $5000 Universal World House
A young relative of mine is traveling in Serbia, hostel style. Since the Russian cut off nat gas, I figured he must be freezing and e-mailed. His reply says much about government and rank and file housing in that part of the world. (maybe I wouldn't submit this on a day when markets were open, but today they're not):
in regards the cold
the first thing is
just because the gas is off doesn't change everything
a lot of boilers are fired on coal
so not everyone is with out heat
and as I said there are electric heaters
which are expensive
but
a family of four is likely to live in one room
plus a galley and a toilet (each about half the size of a small one in the states)
familys that do well for them self have two rooms
so there is not a lot of area to heat
second
there are still elements of socialism that provide for those with nothing
its funny to me (because I'm ignorant) but they pine away after Tito
when life was good
and they see "democracy" as only having stripped them of their dignity
their wealth and their peace
and given them in return
crass culture and the Heroin and cocaine of the west
which was unheard of untill the ninetys
also
these people are very hard
hardend to deprivation
even the young ones who don't remember the troubles
have some kind of anti freeze in their blood
and from what I hear
this is why in the summer they wear almost no clothes :)
Canadian stocks using RSI
Does anyone know how to enter Canadian income trusts and class A,B etc common in the RSI filter?
Re: Morgan Stanley oil
Billy, Billy, Billy -
TARP money is not being used to advance near-term credit to corporate America and small business thereby locking up the economy, not the refi of homes. That's already been nationalized when the taxpayers seized Fannie Mae and Freddie Mac.
For taxpayers' TARP funds to be used to arbitrage oil contango for HB&B profit is bloody absurd. TARP funds should be used for lending money to benefit the economy. U.S. taxpayer is not going to get its money back. We don't even know where it went ...
I guess I am saying using TARP funds for oil arbitrage in a contango is immoral, not just irresponsible! Sheesh.
yvrapx, do you like pizza?
yvrapx, do you like pizza? Enter pza-un.to
Re: yvrapx, do you like pizza?
I do, not Pizza Pizza though! Thanks Si02 Any idea how to bring up SJR.B (Shaw cable B class common)on Toronto?
Let them fail...
Anyone who bought at no money down and interest only will essentially lose nothing and learn a valuable lesson.
Anyone who loan at those conditions — the same.
Anyone who bought those mortgages — ditto.
Anyone who bought a whole grab bag of this crap deserves it also.
All of the above are what free markets are all about. Anything other than this and no one learns a reality based lesson. The current approach will simply perpetuate the problem while enlarging the final cost to us all.
If it's all about trust, as the talking heads say, listen to the people who saved enough for their down payment, have paid their monthly agreed upon price and are now getting stuck with the bill for these schemers. They will give a trustworthy approach to the issue.
If not up for election life is much clearer.
Re: Morgan Stanley oil
Just to clarify, my last comment was from a risk/reward standpoint, not a moral standpoint. I agree with you that it is immoral - but not illegal.
So how can we mandate these banks lend to "benefit the economy" when there are virtually no profitable low-risk lending opportunities? Maybe I am just naive or something, but where should this lending be taking place? What would most benefit the economy? How can money lending benefit the economy when there is asset deflation across the board? It seems like the only thing that lending accomplishes during periods of deflation is to create a slow death instead of a cleansing and rebirth (Case in point the airline industry).
Banks: Love Hate Relationship
We easliy forget that most of us use the financial vehicles called mortgages if only for a time. Before the depression when people saved money (not consumer mad) very few could own a home as property values outpaced saving... so the 20% down payment mortgage was born. Right now the lending index near zero with volatility around historicly low mortgage interest rates have put understaffed and demoralized banks of all sizes in turmoil. Many have raised rates to slow the pace! If you want your refinance be prepared to be patient.
Ratting on humongous banks for their misdeeds while wanting a rock bottom interest rate is ironic to say the least. I am not defending the misdeeds of Mozillo and kin. Had I the presence of mind to have a video camera on my shoulder while their vice presicents coached originators how to lie on loan applications to fool their own underwriters (I kid you not)... I would be a rich woman today!
Yes, let them fail and go after the crooks at the top who benefited from debasing our economy. Is this likely? The disease is far reaching. IMO we cannot afford to just watch from the sidelines. People like Bill are participaing at high levels. I just report my industry news to whomever will listen.
I am merely pointing out that we all part of the food chain as investors and participants. Our appetites for ROI and resulting incentives to meet this demand created our current mess. I have no answers. I am merely toiling away at this particular coal face trying to help folks who got in trouble--some with help and some on their own. The arrow needs to be removed from the eye first.
Re: Morgan Stanley oil
My argument would center around not lending the failing banks our tax money. Why should they get to choose to gamble on oil going up instead of lending to businesses and consumers? They were the irresponsible and reckless people who caused this.
But I know that argument lies in fantasy land.
Given our current situation, I have to say that retiring debt or selling it at a loss and using taxpayer money to restore their balance sheet would be wiser than lending the money or gambling on higher oil prices with it.
If, in fact, any of the banks did sell futures contracts at a higher price than spot and plan on holding it until delivery(as long as delivery is guaranteed), it would appear to be a good bet.
But I have to admit it leaves a really bad taste in my mouth knowing that my family has to work harder to pay the higher taxes to pay for the banks to use our money to make money on the oil contango. When thinking about it like that I'd rather have them lend it to regular people so at least it would help more people than themselves.
The most prudent path for them though would be to pay down debt improving their balance sheet. You can tell how compromised they are by their need to earn a huge return on the free tax money. The tax money alone won't be enough to render them solvent.
The returns they've had holding treasuries as rates have fallen and prices increased hasn't even been enough. Part of that equation though is that they may not be able to realize the gain on treasuries as there is more and more demand for them to become bigger buyers of treasuries. So, even though banks will have a 20% paper gain on the treasuries, there won't be enough other people buying the treasuries to allow the banks to become net sellers of treasuries.
Rob.
Re: Cheney's Exit Interview
2nd_ave, Sorry, but you lost me somewhere along the way here.
What is your point?
Re: Let them fail....
Strangelove
"Unbearable debt enslavement just means default and start over. "
That is completely true. But it seems like the majority of people who are in over their heads are just "letting it ride". I.E. instead of just taking a $10-20k loss NOW and downsizing lifestyle to fit budgets, people seem to be holding on for the prospect of a better day where this loss is erased instead of making sure to avoid the day where a $20k loss grows to $40k.
I am fearful that a lot of assumptions about the pricing of U.S. real estate are yet to be debunked. I think that perhaps the demand for U.S. real estate is A LOT more elastic than we are taking into account.
Let them fail?
By the way I do not own any bank stocks. If you are commenting on any stock or institution it helps to know if you own them.
Re: Morgan Stanley oil
BillySundance, Here is how FDR did it "There was, however, a big difference between FDR's approach to taxpayer-subsidized financial rescue and that of the Bush administration: Namely, FDR wasn't shy about demanding that the public's money be used to serve the public good. By 1935 the U.S. government owned about a third of the banking system, and the Roosevelt administration used that ownership stake to insist that banks actually help the economy,..." according to Paul Krugman's recent missive to Obama http://tinyurl.com/ayk9qm.
My feelings are not totally with Krugman, nor totally with the "let them fail" appraoch. I'm still searching. For right now I like FDR's approach a whole lot more than the Paulson scams!
Re: Morgan Stanley oil
Billy -
I appreciate your comments. Regarding to whom to lend, small business represents 50% of U.S. GDP. All businesses require lines of credit to manage the ebb and flow of inventories, accounts receivables, payroll, and so on and those lines of credit are now frozen. That would be a good creditworthy start.
If financials won't lend to corp America and small business, there is a great risk that perfectly productive businesses will fail.
Re: Let them fail...
I agree.
The main problem with trust right now is that we have two standards.
One for super-connected to big to fail institutions who can make any bet and lose any amount of money and still get rewarded with giant bonuses and unlimited taxpayer money all in the form of begging them not to collapse our economy with their avarice and ineptitude.
The other for regular people who spend within their means and actually save for a rainy day who make hard choices every month to balance their budgets and do without rather than compromise their financial well-being. We now have to pay the government $100,000 in extra taxes per family of four to pay for bailing out these players. So, not only does my savings not return the 5-6% that it historically did, I have to dig into my savings to pay for keeping failed institutions alive. Oh, and if I refuse to pay for any of this party I go to Jail. Nice, right?
Until the irresponsible pay for their decisions en masse, responsible people like me will become more protectionist and cautious. We will not risk our capital in this environment.
Rob.
Great chart MoKat! post #7324
I added the SPX to your chart and it is down almost -40%.
Question to the community using MoKat's chart....
The dollar broke out to the upside back in AUG 08. What would one invest in to go long the dollar?
Thanks in advance.
Bear E
Re: Let them fail...
Fingerlakes, "superbly said"...you could be a professional writer. I saved your post!
Re: Let them fail?
I actually have some June UYG calls as a hedge against my cash.
Most of my money is positioned in cash with some bet on technology and some on gold/silver.
Rob.
Venezuela cancels diamond concession; takes over ...
VZ's Minister of Mines announced cancellation of an old concession (for lack of activity) in the Guaniamo diamond district, and stated intention to build a diamond processing plant in the area. This comes after Chavez himself announcing takeover of Las Cristinas and mining by VenRus, with a "Russian partner", which has to mean Rusoro - with actually 15% ownership in Russian hands.
What's going on? Recall that next month comes the next referendum through Chavez will try to gain the right to perpetual re-election. His citizens have MUCH to complain about at this point. With oil prices so low, it's hard to maintain visible social spending projects. It's probably good politics to be seen as taking major, visable, and hype-able natural resource concessions away from foreigners to the benefit of "the people".
Re: Morgan Stanley oil
FL - "My argument would center around not lending the failing banks our tax money. Why should they get to choose to gamble on oil going up instead of lending to businesses and consumers? They were the irresponsible and reckless people who caused this."
This brings a familiar image to mind...
Re: Let them fail...
Thanks. I really think it's an important time to clear our thoughts and speak our minds. We're reaching a critical point in society and we need to start revering the moral and responsible people again. What ever happened to respecting the guy who didn't steal the cookie when noone was looking? He's my hero!!
Obama always talks about Change and Hope and the more of us that define what the best change to hope for is the more likely we'll get the desired outcome.
I sincerely hope we move forward to a time where responsibility is encouraged, honesty is rewarded, integrity is coveted, and doing better than your peers means setting an example for others to follow rather than showing them the quickest path to the feeding trough.
Rob.
Re: Morgan Stanley oil
That image is too funny!! Thanks chicken.
Rob.
Happy Hogmanay Bill
Bill,
Now I know you have so much of the Celt in you, "Happy Hogmanay".
Re: Cheney's Exit Interview
Grym- My first point was that in responding to a post in the Friday Chat, your response, rather than automatically being redirected to today's Chat, was left at the tail end of Friday's Chat, where the odds of it being read diminish quickly as the day wears on. The second point was a joke.
Re: Morgan Stanley oil
Johny -
I just perused the Krugman article. I agree with most of his points, especially the need for massive infrastructure spending being a priority. Infrastructure not only creates employment but adds long-term value to the nation. Improved transportation and electric reliability are key IMO - highways, bullet trains, nuke plants, "cleaner" coal plants. Unfortunately, massive alternative energy projects are not economical right now - they would create jobs but not necessarily add value at an equivalent rate as traditional infrstructure - but we still need to plan them now so that we are ready when we reach the point in the business cycle where they again become economical.
Unfortunately the Bush administration was busy drinking the Kool-aid and ignoring the fact that massive infrastructure projects require years if not decades of planning - so here we are wanting to roll the ball on infrstructure but no bullets in the gun.
I honestly hope that the ball has begun to roll in earnest on these infrastructure projects. With that said many of them will have to be so large that they will need direct government financing guarantees anyways (way too much risk for TARP banks to swallow alone).
Strangelove
I tend to agree that some small businesses are bearing an unfair burden of the frozen lending market. So what kind of small businesses are in the greatest need of lending? What kind of businesses should we be looking at that have long-term profitability but are currently starved for capital?
Re: Let them fail...
"What ever happened to respecting the guy who didn't steal the cookie when noone was looking? He's my hero!!"
Excellent imagery - I share your hope
Broker Question
For someone who trades U.S. stocks and options only which broker do you think is the best and most cost effective. I'm leaning towards Interactive Brokers or Trade King. Thanks in advance to anyone who answers.
Re: USD vs. Gold
Sometimes, one has to take a stand on absurdity.
Thank you for making it very clear Bill
Re: USD vs. Gold
Somehow I seem to remember oil at $10 a barrel and it wasn't all that long ago (1995 or 1996 with an accompanying Fortune article "Too Much Oil in the World" - ok maybe that is long ago to some folks) but my point is not to dispute but rather understand how oil went from there to the levels reached last summer and subsequently back at around $35 six months later - that is some nose-dive of a move! More complicated is trying to determine what the equilibrium price SHOULD be - there are far too many guesses, and some are crying $25 and others are saying back in a range of $45-60, but really - who knows. For me, all commodities boil down to simple supply and demand, and I've for some reason always seen oil as having somewhat of a more inelastic curve (but I'm also a trader and not an economist).
(I'm also interested in the theory behind your comments regarding that a low price of oil is not good for homeland security).
Not that I'm anyone important, but I pretty much agree with everything else that you said; would maybe argue that when safety is concerned (as in Treasuries), yield doesn't really matter as much, investors just want their principal safe for the time being...of course, long-term, this view should, and likely will, change...
Dollar
The USD is currently up 1.39% today at 85.12.
I realize my thoughts about $10 oil seem absurd. But, I'm of the mind that anything can happen in this market, especially things that most people think could never happen.
Rob.
re: low price of oil not good for homeland security
Because N. American production is more costly, and may go offline with low prices, thus making US more dependent on foreign oil once again. Also, a low price eliminates incentive for alternatives, slowing progress in those areas (which are supposed to be a area of growth in the near future), and again, delaying energy independence.
Re: AGU.TO (AGRIUM)Purchased At
Thanks for the tip. Couple of points:
1. You say Purchased At 40.00 and 41.64 yet Friday's price range was 32.36 - 34.47.
2. I'm not familiar with your PIVOT R1 R2 S1 S2 terminology so could you please explain?
As an aside Elder's triple screen is suggesting going long on this stock, also with current daily "value" tightly packed around $33.11. Prices presenting higher highs and higher lows, looks good with a stop around $28.66. I might take a punt on this tomorrow, thanks.
1961 TOP SECRET FED RESERVE GOLD EXCHANGE REPORT
Hi All
Happy New Year
First Post here.
I am happy to see you all searching for the truth and intolerant of any more B.S.!!! The little guy, like myself, really appreciates the help.
I haven't seen this thrown on the boards yet.
Sounds like GATA and James Turk are on this already.
http://emsnews.wordpress.com/2009/01/15/1961-top-s...
It's a long read but I'd be happy to hear comments. There are later articles regarding this on the site as well.
All the Best
Flexi
Re: yvrapx, RSI tool Canadian stocks
As far as I know Korvus gets the data from Yahoo finance, so I just use whatever the symbol coding is on Yahoo and it works for me, Can Roys, preferred, A. B. shares etc.
Starting to research DIG by Proshares
http://tinyurl.com/85zl3y
From the Proshares website:
"Objective
ProShares Ultra Oil & Gas seeks daily investment results, before fees and expenses, that correspond to twice (200%) the daily performance of the Dow Jones U.S. Oil & Gas Index."
I am currently tweaking the time series indicators and studying the rally from March of 2007 to June of 2008. Another ride i missed; prob made some of you very wealthy. but hopefully with a better understanding of how oil stocks and DIG reacted then, i can profit on the next Oil bull run.
History has shown that decision makers in power really do not have any intent to end the oil addiction. there is too much money involved.
energy: cost of oil production
http://tinyurl.com/63pymh
Re: Oil Pricing Mechanism Suspicions
I notice Arab States Dubai pricing is outperforming WTI, the first time in many years.
Jim Rogers
http://www.bloomberg.com/apps/news?pid=20601213&si...
Re: Gold/ Oil/ USD/Dow
When viewing this chart.... move the number of days slider to the far left and then back right to adjust the time frame to show theperiod 2003-2009.
It paints a totally different picture.... and the one I wanted to show.
Re: Let them fail...
Finger Lakes wrote: "I sincerely hope we move forward to a time where responsibility is encouraged, honesty is rewarded, integrity is coveted, and doing better than your peers means setting an example for others to follow rather than showing them the quickest path to the feeding trough."
Hear, hear! Well said.
Re: USD vs. Gold
goldbug58, Re: "I'm also interested in the theory behind your comments regarding that a low price of oil is not good for homeland security."
This is the same point I have been making in that at $10, producers stop producing. How are you going to get to work? Maybe you just need to eat, so you have to get to work. Maybe you are a policeman or fireman or soldier? How does America protect itself without fuel for its armed forces?
There will always be demand because oil is an essential product in the US economy -- at least the way it's presently structured. So there will be a price point that oil cannot fall below.
With precious metals, on the other hand, mining operations get mothballed should price drop below the cash cost to produce plus a basic level of admin costs over that. Gold and silver can stay in the ground as long as the companies involved can maintain debt service and a skeleton staff.
As precious metals are money, there will always be demand; so there too, the mines will not be shut for long. They will re-open as soon as the price rises (due to supply and demand) and mining companies can make a profit.
Also, thank you proudpapa (#7357). Reliance on foreign oil is against the national interest, but tolerated to a point.
placing a buy limit order for UCO
The crude oil is down more than 5% today, so the buy limit order I already have for UCO at $10 should hopefully get hit tomorrow. I am also placing another buy limit order for the same amount of shares at $9, in case the oil plunges again tomorrow (and adds to today's decline).
GEO magazine December issue
There is apparently a quite beautiful 40-page spread on Bahamas in the December issue of the French magazine GEO. If anybody can clip a few photos to show here, I hear they are breathtaking.
Tomorrow, my neighbours are holding a Bahama Mama for Obama Party. Starting at noon, it could last until Super Bowl. That's one way to cut my workload!
Re: placing a buy limit order for UCO
$20 oil, $750 Gold, sounds like good prices to go long with all this spending in the works. Will the USD continue to be bought as the banks go deeper. GG back to 19 or 20, USO well below 30. The next few weeks/ months could prove very interesting.
It looks like Europe is going to have to mortgage the next few genrations also.
Most all of the G 8 interest rates near or at 0. What would that mean??
trading the oil price
We can spend a lot of time trying to guess how low the oil price will fall before the new oil bull market starts, but the only reason a trader would do it, as I see it, is if he/she wants to buy oil at the exact bottom (or near it), which is a reasonable desire only if the trader has very little money to spend on the oil trade and can only allocate it in one shot. Otherwise, a fool-proof strategy to make some money on the oil price is to start scaling in now in small amounts. I have acquired my core position in USO (3.3% of my current portfolio, which I will keep long-term) by buying it at $31 and $29, and now I am slowly increasing my short-term speculative position in UCO (which I will be selling gradually on the way up). After doing a little UCO trading in the past few weeks, I now have a "unit" position in UCO (1.5% of my portfolio) at the cost of $11.80. My current plan is to keep buying a "unit" of UCO for each $1 drop it takes, starting from $10.
As you see, 2nd_ave, I am not a good trader and I don't make "prophetic" market calls. All I am doing is increasing my exposure on weakness and reducing it on strength, while simultaneously learning to adjust position sizes and "distances" between trades.
Re: yvrapx, RSI tool Canadian stocks
Thanks Quasi, I figured so but a list of stocks I downloaded from yahoo don't seem to work on the RSI, it just stays blank.
Suspected U.S. Treasury Fraud
Probably not much of a surprise to some of us...
A brewing fraud scandal at the Treasury Department may be worse than officials originally thought.
Investigators probing how Treasury regulators allowed a bank to falsify financial records hiding its ill health have found at least three other instances of similar apparent fraud, sources tell ABC News.
In at least one instance, investigators say, banking regulators actually approached the bank with the suggestion of falsifying deposit dates to satisfy banking rules -- even if it disguised the bank's health to the public.
http://tinyurl.com/8fmwz9
Re: Great chart MoKat! post #7324
Bear E
Power Share has an ETF ..........
UUP
[DB US Dollar Index Bullish Fund]
Re: Cheney's Exit Interview
Duh, Thanks.
I guess I'm a bit slow today.
OIL
This from the article 1/19 posted here previously. (My apologies to the poster, I have lost their identity.)
"Tumbling oil prices are forcing many of the richest Persian Gulf states to record budget deficits and limit a critical source of investment for poorer Arab countries. Crude is now selling at below the budget break-even point for seven of the Arab world’s 10 top oil producers and Saudi Arabia, the world’s biggest exporter, is forecasting its first deficit in at least seven years. (1/14, #3)" http://www.energybulletin.net/node/47780
Re: Suspected U.S. Treasury Fraud
Thank you fireworks. This kind of news just makes me sick. It casts further doubt on the whole workings of the Treasury, SEC and Federal Reserve. Then it seems little is reported about the matter and that further erodes confidence in government and these institutions. Incompetence? Corruption? The shameful fact is that this entire U.S. congress and the congress from years back could well be in this category for having weakened the controls put in place after the great depression, bring us to this shameful destiny!
Re: Broker Question
I'm not sure about costs but the best system to trade options has to be Think or Swim.
Re: trading the oil price
I know. The market was closed today and I was off so I had plenty of time to theorize.
I really like your trading strategy. I've been tempted plenty of times recently to enter the oil trade on the long side. After we see what happens this week, I may scale into oil a little as well.
I guess for now I'm just too fearful too enter at this point.
Rob.
Re: Venezuela cancels diamond concession; takes over ...
Jock,
It will be interesting to find out if Rusoro aquired Gold Reserves on Wednesday. I wonder if they will extend the tender offer if they got close to the 37 million shares that is required for Rusoro to win. I would assume that they will go away if they did not get close. Of course "others" in a concerted move could have been buying up shares at the lower GRZ prices and have tendered those shares to Rusoro. If Rusoro does not win, they will be very low on their cash position. Partner of first choice will no longer be anyones partner.
warren buffett
I am intrigued that Warren Buffett, who was strongly advising mom and pop to throw caution to the winds and buy stocks a few weeks ago, now says we're experiencing a financial and economic "Pearl Harbour" (ie, a sneak attack) and are "at war" but that "we will win."
Something to contemplate.
Foreign markets tonight
The Obama Inauguration Rally is in deep trouble at this point in the trading day. The major Asia-Pacific equity markets are each down over -3%, and traders there have been spooked by the Bank of Japan Governor's comments (which I thought were remarkably honest) and by the plight of HSBC, Royal Bank of Scotland and Barclays. Well, it's one thing to forecast, and another to trade. Let's see how the post-holiday session works out.
Re: Venezuela cancels diamond concession; takes over ...
The GRZ board is reporting that Rusoro has extended the offer until February 18th. Only 1.6 million shares have been tendered as of the close of business today. 420 equity units have been tendered as well.
treasury fraud
Thank you fireworks.
The sheriff has joined the rustlers.
Hide your women and children!
Re: yvrapx, RSI tool Canadian stocks
Interesting, I just tried it on a list of Canadian and US stocks and it worked fine. Now it does take a little longer to process if the stock symbols are not in Korvus's RSI data base. The program has to get the individual daily data going back many months in order to calculate the RSI(7) D-W-M values, Yahoo does not have them all ready to go in that format.
Just make sure the data entry block is empty, use the "Clear" button, then input your string of stock symbols (Yahoo style coding) separated by spaces, then hit the "Go" button and wait a few minutes. Not sure how many symbols you can enter at once but I would keep it down to 10 or so, don't want to overload Korvus's server or get him cut off from using the Yahoo data.
If that still doesn't work, post the list here or email it to me using the contact the author button and I'll try to figure it out.
Here's a list of dual traded symbols I just checked and they all work. Although the numbers are a little different due to the fact that the exchange rate has not remained constant. (upper case or lower case, or mix, doesn't matter)
gg G.TO PDL.TO Pal slw slw.to su su.to tck tck-b.to PWE PWT-UN.to
Making $$$ off the cover of Barrons [?]
Do the opposite.....Short it...TEQUILA !
:-)
http://tinyurl.com/844bcy
Re: yvrapx, RSI tool Canadian stocks
Hi Quasi, must have been a FF glitch or whatnot. Closed everything down restarted and it works great.
Thanks for the help!
not forecasting
We'll have to deal with prices when we see them move. But I will be on heightened alert if the DOW stays below 8200 for 48 hours.
Re: Jim Rogers
tgifbipo great piece and I think the bigger story is Stephne Roach MS Strategist and perma bear echos some of Rogers' well known, oft quoted sentiment, Stephen Roach, chairman of Morgan Stanley Asia Ltd., recommended investors buy “anything to do with the Asian consumer, infrastructure, alternative energy and technology.” He made the comments at the same forum.
QT
Thank you for the heads up on UUP !
Bear E
Re: Venezuela cancels diamond concession; takes over ...
http://www.rusoro.com/s/News_Releases.asp?ReportID...
Re: Venezuela cancels diamond concession; takes over ...
On January 14, 2009, certain news outlets attributed Venezuelan President Hugo Chavez with remarks that the Venezuelan government plans to jointly develop the Las Cristinas deposit and the Brisas deposit. These news outlets also reported that President Chavez referred to the formation of Venrus C.A., described as a joint venture between Rusoro and the Venezuelan government, to develop and exploit these projects. As disclosed in the Company's Offer and Circular dated December 15, 2008, filed with Canadian securities regulatory authorities and included as part of its Registration Statement on F-10 and Tender Offer statement on Schedule TO filed with the SEC in the United States, Rusoro has formed a mixed enterprise joint venture with the Venezuelan government in connection with the Isidora gold mining assets acquired by Rusoro from Hecla Mining Company. The terms of this joint venture, which has been named "Minera Venrus, C.A.", were filed on December 5, 2008 on the Company's SEDAR profile. Rusoro cautions that no agreement regarding the development or joint development of the Cristinas or Brisas deposits currently exists between Rusoro and the Venezuelan government and there is no guarantee that any such agreement will be entered into.
Re: Crude Oil Will Be Moving Up Soon
fireworks - "Morgan Stanley hired an oil tanker to store crude oil in the Gulf of Mexico, joining Citigroup Inc."
I see they're still trying to bilk consumers with taxpayer monies..., it seems strange they're getting a late start what with nearly 80 million barrels at sea now, a 25 yr high for tanker storage. Well, if oil production shuts down it might work???? I'm thinking it's more like someone's trying to keep the tanker business from going under. Also strange we're hearing this news that's telling us to buy into oil... Has GS changed their forecast from $25 POO once again? They need to get their economic forecast synchronized with their energy forecast. Anyway, perhaps now that a Gaza ceasefire is called, POO resumes it's pre-Gaza slide and we're back to the economic trouble and demand destruction propaganda.
World crude oil spot prices:
http://www.upstreamonline.com/market_data/?id=mark...
Re: Foreign markets tonight
Too much negative news. Too much hope placed in one man. Too much pain inflicted in such a short time. Too much trust maltreated. Too much incompetence exposed.
Disclosure: Maximum powder dry.
RSI Tool - Help
Note; as requests for help on this tool have come up several times in the last few weeks it has been added to the "Help" section. Direct link below or go to the home page top menu bar "Site Index" >> "Website Help" >> "RSI Tool"
Many many thanks to Korvus for creating and hosting this tool.
http://caracommunity.com/content/rsi-tool
Note in the RSI program the button "Set to Cara 100" is the old list, however as it is complied into the program source code it is not easy to change and Korvus is very busy with other projects at this time. Thus I have created the following link to the RSI tool which will preload the input box with the current Cara 100 stocks, as of Jan 7, 2009, just hit the "Go" Button.
http://rsi.caracommunity.com/RSIApp/RSIApp.html#AB...
(Korvus maybe you could change the RSI link in the menu bar to use the above as a temp fix, and just disable the "Set to Cara 100" Button).
TBT
Still holding this - almost my best performing position over the last month or so (excluding some Uranium stuff). Haven't heard anyone discuss this but Bill Gross believes that when Bernanke says "long-term treasuries, he means 2,5, and 6(?) year treasuries":
http://www.pimco.com/LeftNav/Broadcast+Center/Bill...
BTW, how can anyone watch CNBC? These people are crazy!
Re: Obama bounce
With all the gloom and doom in the foreign markets today, the US market futures are down only 1% at this point. So after gapping down at the open, the market indexes can easily manage to end up green for the day, which would be a very bullish sign. They can, of course, end up lower for the day. Even though this would be emotionally harder for me to bear (because of the natural fear of market plunges for a long-only portfolio), intellectually this outcome would be more profitable for me long-term, as it would allow me to buy good stuff (e.g., UCO) at cheap prices.
Re: GEO magazine December issue
Looks like all you can retrieve from their web site is the cover photo...but it's nice. http://tinyurl.com/9f4p7s
Re: Obama bounce
David said: "Even though this would be emotionally harder for me to bear (because of the natural fear of market plunges for a long-only portfolio), intellectually this outcome would be more profitable for me long-term, as it would allow me to buy good stuff (e.g., UCO) at cheap prices."
Hear, hear! I came to the decision about a month ago that I want this market to tank incessantly for the next year as I ease myself back into long positions for the next cycle. Even for the positions I have already initiated, I have selected them so that I can DRIP in further at outrageous dividend yields with lower average cost (or average down) over the next while.
Re: RSI Tool - Help
Quasi, just a reminder to those using Safari that this won't work for you, you will have to have a text list to paste into the input box.
cheers, doug
oil production prices from oildrum
Here's a nice graphic posted in an article on oildrum.com (original source: CERA) that encapsulates current oil production costs vs. the production volumes and regions. Hard to describe, you just have to see it. It backs up what Bill says - in not too long, the world will only be producing 45 mbpd if oil stays at $30/bbl.
http://tinyurl.com/7d3roe
Re: oil production prices from oildrum
Great picture, davefairtex! Even if US will face another 10 years of economic difficulty (the pessimists say that once deleveraging starts, it tends to run for many years with consumers becoming more and more frugal), the Asian economies will keep expanding (their savings rates are very high now and hence motivate consumer and government spending). Hence, I really don't expect the world oil consumption to fall more than a few percentage points from peak to trough (which is in line with EIA predictions). Therefore, even if the last most expensive 10 mbpd are cut off from the world, the oil price will skyrocket (because world oil demand is very inelastic to price changes).
Do you have the link to the full article on theoildrum.com? Thanks!
Re: oil production prices from oildrum
It was from a guest posting by Nate Hagens entitled "Yes We Can, But Will We?" and it discusses a Net Energy cliff we're slowly approaching, due mainly to steadily increasing costs for energy exploration and production. New oil is harder to find, comes in smaller quantities, and is more expensive to produce. At the same time depletion (like rust) never sleeps.
http://www.theoildrum.com/node/4957
The first bits of oil off the lifeboat are the tar sands of Canada. Between OPEC cutbacks, Mexico and Russia depletion, and the tar sands shutting down, I'm going to agree with you that even the gradual pullback in energy use we're seeing (the US is still only down about 6% from peak) will not be enough to keep us at $35 for too long.
Taking just Mexico, their oil production fell by 6% YOY Nov 2008 - but their exports are down 20%. This is because of a dramatic (and unexpected) decline of 33% in their main oil field at Cantarell. Net exports are the important thing, since the US is an oil importer, and it will be a fall in global net exports that will cause oil prices to spike again.
Re: oil production prices from oildrum
"Net exports are the important thing, since the US is an oil importer, and it will be a fall in global net exports that will cause oil prices to spike again."
Exactly! I remember an article by John Mauldin, where he mentioned that oil exporting countries will become net oil importers much faster than we think -- their oil production will keep declining while their internal demand will keep growing. So long term (say 10 years) John Mauldin thinks oil is going MUCH higher than the recent peak we saw in July. His analysis seems very logical to me and I tend to agree with it.
Re: oil production prices from oildrum
A contributor to oildrum came up with a model that describes the phenomenon, called the Export Land Model. In the model, Export Land's consumption grows quite rapidly, perhaps at 5% per year. This is because Export Land subsidizes oil prices - Saudi and Mexico both do, for instance. That rate of consumption growth is fine, until the peak oil production for Export Land is reached - as is in the case of Mexico. Mexico has peaked. At that point, oil production drops by 6%, consumption continues to rise at 5%, and so net exports fall off at a much more dramatic rate than simple oil depletion would suggest.
And of course, aggregate net exports - "the leftovers" - is what comprises the world oil market.
So for Import Land, peak oil is not simply one of normal depletion rates post-peak, but rather, depletion meeting supercharged consumption growth in the Export Lands. We in Import Land depend on other countries leftovers, and those leftovers are getting smaller and smaller as they get fatter and fatter! To abuse a metaphor.
And that's why the contango in oil right now, I think. Oil traders aren't sure what that supply curve looks like, but we know it's just a matter of time. Depletion never sleeps.
of course
Of course as I write this, March 09 oil is down $3.30 to $39.25...something to do with a lot of full crude oil tanks in Cushing, Oklahoma.
Follow the Money?
http://tinyurl.com/8vvago
Unfortunately, the giveaway will continue. One investment professional emailed me:
"As if the taxpayer has any say in the matter -- he doesn't."
Re: AGU.TO (AGRIUM)Purchased At
Seadog:
AGU.To is the Canadian symbol(you are looking at US symbol)
Pivot points :http://www.nationalfutures.com/pivotcalculator.htm
Check this site for more info,includes pivot calculator and formulas.Also includes a Fib calculator.I use excel to watch my fav. symbols.
All the technicals were screaming "buy me".I am also a big Elder fan !I believe will add another "bullet" to your clip.
Todays projected prices are listed below.good Luck
PIVOT R1 R2 S1 S2
AGU.To 42.48 42.47 43.53 41.97 41.43
Scotia Capital on Western Goldfields
Sector Perform
Risk Ranking: Caution Warranted
Target 2.25($C)
Q4/08 Production Dipped More Than Expected
■ Western Goldfields reported lower Q4/08 gold output than Q3/08 due to
slow leaching, accordingly costs were also higher than expected.
What It Means
■ Western Goldfields forecast less production for Q4/08, but it came in
below guidance at about 30,500 oz versus the planned 37,000 oz.
■ Production is still planned to ramp up to 175,000 oz by 2010 with
145,000 oz forecast this year. Costs are expected to include inventory
adjustments from the heap leach operation this year.
■ The non-cash inventory adjustments have added about $115/oz to
guidance in the first three quarters of 2009 and $25/oz in Q4/09.
■ We continue to rate Western Goldfields 2-Sector Perform. Our new
target price of C$2.25 reflects our 8% lower NAV5% of C$2.20 per share
that results from higher cost assumptions.
Re: AGU.TO (AGRIUM)Purchased At
Thank you MyTradingChips.
If I may be so bold how do you use this in your trading, ie set up and trigger.
Cheers