Thursday, July 10, 2008
CHART OF THE DAY
CLICK TO ENLARGE*** LENDER OF LAST RESORT? YIKES!! GE TO REPORT FRI AM<>>>GE IS 1/2 it's 2000 price!
Wednesday, July 09, 2008
82% DOWN VOLUME
FLEETING RALLY WIPED OUT....in the face of some xtreme oversold readings the market has failed to ATTRACT enough buyers to reverse the trend...is DOWN.
It may take several more wipe out days to have any chance of tradable bottom......1240 and below here we come, who to rescue????
See about TRYING to pick bottoms? refiners hit hard today...FRE and FNM too....dangerous market friends stay tuned
Duratek
It may take several more wipe out days to have any chance of tradable bottom......1240 and below here we come, who to rescue????
See about TRYING to pick bottoms? refiners hit hard today...FRE and FNM too....dangerous market friends stay tuned
Duratek
TOUGH IN RETAILVILLE and HNI LEADS ECONOMY
CLICK TO ENLARGE
When BIZ execs are feeling good they begin to buy new furniture, when they smell trouble they shed jobs, Hon is right there to feel it...... TODAY MKT puked hairball, SO WEAKKKKKKKKK
JBR comments and Response
*lurkers please take the time to read comments and LEAVE comments on the blog, it makes this a much better place to come......
JBR
Thanks for your comments and the link.
Maybe it will be the same with gold this time around, maybe not, since history doesn't repeat but it often does rhyme. We are no longer on the gold standard - will that make a big difference? Perhaps it will. On the gold standard, gold IS money. When not on the gold standard, gold is NOT money. Yet people are creatures of habit and emotion, and old habits die hard, so many people will still think of gold as money so it's a tough call to be sure. Interestingly, the author states: "note that spot gold and spot silver prices bottomed in the midst of the Great Depression" so gold the commodity did fall before it rose (ie, the opportunity to buy gold may be later). The author also says "gold shares began to appreciate in value before the bottom in gold and commodity prices in 1933". So one needs to distinguish between the commodity and the shares, historically with the shares leading. What makes all this speculation treacherous is of course the potential for "double dips" (ie, back to back depressions which in fact have happened before). So it seems there are speculative opportunities in gold down the road as the deflationary progression ensues, but cash still seems like a viable way to ride out the whipsaws and potential for double dips without the need to get the turning points exactly right each time. History does show that many a brilliant trader survived the initial deflationary crashes only to go bankrupt on subsequent deflationary echoes. Do you feel lucky? jbr
2:00 AM
Duratek said...
JBR,I feel LUCKY because I am in Treasury MM 100% cash. Had we seen the inflationary FED for what it was back in 2001 with dollar near 120 on the index GOLD and OIL was place to be. Financials topped well short of the OCT highs, already many shares 20% off their highs....Just finished reading a copy of the Harry Schultz Newsletter, interesting guy....has made some good calls on the golds, he seems to think the Juniors will not takes off until the "PUBLIC" LOVES GOLD, most are OBLIVIOUS to the metal.When the sucking sound from financials intensifies wont the PPT pull our all stops to inflate?The metal may not be a good investment, but it is a store house with NO debt attatched.The HON company's lead x'z out to 9 weeks (office furn)they must be short handed and closed down some production beng stupid not figuring orders placed to beat A) July price increase and B) school orders...don't think will help profits, I LIKE the company LONG TERM stock looks interesting here, might fall to lower levels though..Maybe we rally for a few weeks, bottom line each tradable bottom had certain buying power characteristics....and each BEAR MKT bottom had unmistakable selling panics to create a safer buying ZONE.....the little guy hasn't panicked yet...
.D
5:00 AM
JBR
Thanks for your comments and the link.
Maybe it will be the same with gold this time around, maybe not, since history doesn't repeat but it often does rhyme. We are no longer on the gold standard - will that make a big difference? Perhaps it will. On the gold standard, gold IS money. When not on the gold standard, gold is NOT money. Yet people are creatures of habit and emotion, and old habits die hard, so many people will still think of gold as money so it's a tough call to be sure. Interestingly, the author states: "note that spot gold and spot silver prices bottomed in the midst of the Great Depression" so gold the commodity did fall before it rose (ie, the opportunity to buy gold may be later). The author also says "gold shares began to appreciate in value before the bottom in gold and commodity prices in 1933". So one needs to distinguish between the commodity and the shares, historically with the shares leading. What makes all this speculation treacherous is of course the potential for "double dips" (ie, back to back depressions which in fact have happened before). So it seems there are speculative opportunities in gold down the road as the deflationary progression ensues, but cash still seems like a viable way to ride out the whipsaws and potential for double dips without the need to get the turning points exactly right each time. History does show that many a brilliant trader survived the initial deflationary crashes only to go bankrupt on subsequent deflationary echoes. Do you feel lucky? jbr
2:00 AM
Duratek said...
JBR,I feel LUCKY because I am in Treasury MM 100% cash. Had we seen the inflationary FED for what it was back in 2001 with dollar near 120 on the index GOLD and OIL was place to be. Financials topped well short of the OCT highs, already many shares 20% off their highs....Just finished reading a copy of the Harry Schultz Newsletter, interesting guy....has made some good calls on the golds, he seems to think the Juniors will not takes off until the "PUBLIC" LOVES GOLD, most are OBLIVIOUS to the metal.When the sucking sound from financials intensifies wont the PPT pull our all stops to inflate?The metal may not be a good investment, but it is a store house with NO debt attatched.The HON company's lead x'z out to 9 weeks (office furn)they must be short handed and closed down some production beng stupid not figuring orders placed to beat A) July price increase and B) school orders...don't think will help profits, I LIKE the company LONG TERM stock looks interesting here, might fall to lower levels though..Maybe we rally for a few weeks, bottom line each tradable bottom had certain buying power characteristics....and each BEAR MKT bottom had unmistakable selling panics to create a safer buying ZONE.....the little guy hasn't panicked yet...
.D
5:00 AM
REFINERS
Energy Q&A Part II: Investing in Oil Refiners and Oil Service Companies
By: Jutia Group
http://www.istockanalyst.com/article/viewarticle+articleid_2302341~title_Energy-Q~amp;A-Part-II:.html
Friday, June 20, 2008 9:24 Q: “Why is it that the refiners aren’t making any money with oil as high as it is? Aren’t they charging more for their services?”
Refiners make money on the “crack spread”. They profit from the difference between the price of crude oil they buy and they price they receive when they sell the refined product. But right now, refiners are squeezed between rising crude prices and consumer resistance at the gas pump.
Refiners have to pay the world price for crude oil. The markets dictate that price. Right now, there are no major physical shortages in the reports from the oil patches of the world. That is, the people who lift oil from the ground all seem to be saying that they can meet the current demand from customers. So the oil is out there. But the world price is what it is. If you are a refiner, that’s the price you have to pay.
At the retail level of the gas pump, people are buying less gasoline. Overall, U.S. consumption is down about 2% so far this year, compared with 2007. (The statistic varies from region to region within the U.S.) People are driving less, according to Federal Highway Administration estimates. Just look at your own behavior. Are you changing your driving habits with gas at $4 or more per gallon?
So with consumers resisting at the pump, refiners have trouble making price increases stick. At $4 per gallon, the refiners are selling less gas. Consumers are fighting back against high prices. Perhaps resistance is not futile, after all.
So the refining sector has taken some hits. For example, Chevron (whos vice chairman I spoke with) lost money on “downstream” operations (meaning refining) in the first-quarter 2008. This loss for Chevron came despite the “upstream” (crude-extracting) operations being immensely profitable.
Any price pullback in oil should benefit refiners, particularly Valero (VLO: NYSE) and Tesoro (TSO: NYSE). These companies have gotten beaten up in the stock markets lately. They are due for a short-term rebound.
Same Goes for Oil Service Companies…
An oil price pullback might also pull down the stock prices and create more opportunity investing in oil service companies, like Apache (APA: NYSE), Halliburton (HAL: NYSE), Superior Energy (SPN: NYSE) and Baker Hughes (BHI: NYSE). Long term, oil is going back up and these are great companies to own. As the saying goes, “Buy the dips.”
By: Jutia Group
http://www.istockanalyst.com/article/viewarticle+articleid_2302341~title_Energy-Q~amp;A-Part-II:.html
Friday, June 20, 2008 9:24 Q: “Why is it that the refiners aren’t making any money with oil as high as it is? Aren’t they charging more for their services?”
Refiners make money on the “crack spread”. They profit from the difference between the price of crude oil they buy and they price they receive when they sell the refined product. But right now, refiners are squeezed between rising crude prices and consumer resistance at the gas pump.
Refiners have to pay the world price for crude oil. The markets dictate that price. Right now, there are no major physical shortages in the reports from the oil patches of the world. That is, the people who lift oil from the ground all seem to be saying that they can meet the current demand from customers. So the oil is out there. But the world price is what it is. If you are a refiner, that’s the price you have to pay.
At the retail level of the gas pump, people are buying less gasoline. Overall, U.S. consumption is down about 2% so far this year, compared with 2007. (The statistic varies from region to region within the U.S.) People are driving less, according to Federal Highway Administration estimates. Just look at your own behavior. Are you changing your driving habits with gas at $4 or more per gallon?
So with consumers resisting at the pump, refiners have trouble making price increases stick. At $4 per gallon, the refiners are selling less gas. Consumers are fighting back against high prices. Perhaps resistance is not futile, after all.
So the refining sector has taken some hits. For example, Chevron (whos vice chairman I spoke with) lost money on “downstream” operations (meaning refining) in the first-quarter 2008. This loss for Chevron came despite the “upstream” (crude-extracting) operations being immensely profitable.
Any price pullback in oil should benefit refiners, particularly Valero (VLO: NYSE) and Tesoro (TSO: NYSE). These companies have gotten beaten up in the stock markets lately. They are due for a short-term rebound.
Same Goes for Oil Service Companies…
An oil price pullback might also pull down the stock prices and create more opportunity investing in oil service companies, like Apache (APA: NYSE), Halliburton (HAL: NYSE), Superior Energy (SPN: NYSE) and Baker Hughes (BHI: NYSE). Long term, oil is going back up and these are great companies to own. As the saying goes, “Buy the dips.”
Tuesday, July 08, 2008
FED TO THE RESCUE
"Unless and until the economic clouds part, we'll likely see the housing market continue to struggle," Mike Larson, analyst at Weiss Research, said of the National Association of Realtors' measure of pending-home sales, which fell 4.7% in May. Read Economic Report .
Ahead of the opening bell, stock-index futures had trimmed their losses as Bernanke said that the Federal Reserve might extend the time frame for embattled brokerages to tap the central bank for emergency funds. Read The Fed.
The Fed move offered assurances that "there is little risk of actual bankruptcy for the [financial] sector," said Ali.
Worries that Fannie Mae (NYSE:FNM - News) and Freddie Mac (NYSE:FRE - News) may have to raise more capital, along with a report that Lehman Brothers Holdings Inc. (NYSE:LEH - News) was temporarily barred from trading oil contracts reignited financial-sector worries ahead of second-quarter earnings season, prompting stocks to slide on Monday.
On Tuesday, shares of Fannie and Freddie gained some ground with comments by analysts and regulators easing worries the big mortgage buyers might have to return to the capital markets due to pending accounting-rule changes.
Adding his voice to the mix, Richmond Fed President Jeffrey Lacker said the Federal Reserve shouldn't wait too long before raising interest rates.
OK OK I am wondering like you are wondering, can I ride this rally, is the summer rally begun?
You could buy some SPX longs using the ETF'S and use tight stops, or maybe concentrate on getting rid what is weak in your portfolio, of course get your financial advisor to assist, but I dont think we have hit THE BOTTOM, so I am remaining patient for the supper, not worried about the snack.
Today buyers rushed in at a 72% or so up volume pace, we are absent the selling panic I like to see. I do not expect corporate earning to be there to support current valuations.
I am snooping some things, and may NIBBLE on some beaten down stuff, the REFINERS have been killed.....I dont like financials to hold (though maybe a pop can be played here) as I think most will dilute current investor value.
I thought refiners would do better today as oil prices declined. SNDK is usually a good LONG TERM BUY at these levels down the road....
BUT the credit debt issues have not been culled out yet, and I dont think in the stocks yet.....and the VIX hasn't shown enough fear for a bottom, buying has not reversed Bear signal.
Below is AP story on HOusing, where isour economy going w/o housing healing?
Housing market slump seen stretching furtherTuesday July 8, 4:37 pm ET By Alan Zibel, AP Business Writer
Realtors' pending home sales report shows housing slump continues, could drag on another year
WASHINGTON (AP) -- Signs are emerging that the U.S. housing market's long slump is likely to fester through the summer, and the real estate market may not recover for at least another year.
The latest report, the National Association of Realtors' pending home sales index, slipped by 4.7 percent in May to the third-lowest reading on record. The decline "suggests we are not out of the woods by any means," said the trade group's chief economist Lawrence Yun.
The bad news came as the regulator for Fannie Mae and Freddie Mac tried to reassure investors that an accounting rule change wouldn't force the government-chartered mortgage finance companies to raise tens of billions in capital to offset losses.
With more negative data about the housing market continuing to emerge as the economy weakens and job losses accelerate, economists are reluctant to say the worst is over.
"Even if housing market activity does manage to bottom out later this year, it is likely that any recovery would be exceedingly slow," Jeffrey Lacker, president of the Federal Reserve Bank of Richmond said in a speech in Washington.
While home sales are likely to fall to their lowest point late this year or early next year, any recovery is likely to be weak through at least 2010, said Mark Vitner, senior economist with Wachovia Corp.
Meanwhile, prices shouldn't hit bottom for another year at the earliest, Vitner said, since the housing market is glutted with unsold new homes and foreclosed properties.
Making matters worse, rates on 30-year mortgages have been above 6 percent since late May, leading to a steep decline in new applications.
The Realtors' seasonally adjusted index of pending sales for existing homes fell 4.7 percent to 84.7 from an upwardly revised April reading of 88.9. The index was 14 percent below year-ago levels. Sales are considered pending when the seller has accepted an offer, but the deal has not yet closed.
Wall Street economists surveyed by Thomson/IFR had predicted the index would come in at 87. The index, which sunk to a record low of 83 in March, stood at 98.5 in May 2007. A reading of 100 is equal to the average level of sales activity in 2001, when the index started.
Pending sales fell around the U.S., sinking the most in the South, and the least in the West.
Despite the negative numbers, "the worst of the hemorrhaging is behind us" and a modest recovery is likely to take shape next year, said Bernard Baumohl, managing director of the Economic Outlook Group.
Homeowners shouldn't get too excited, though, as Baumohl predicts median prices will show year-over-year gains of no more than 6 percent by next year.
By the Realtors' measurement, prices nationwide were down 6.3 percent in May, but are falling faster in big cities. The Standard & Poor's/Case-Shiller home price index of 20 cities fell by 15.3 percent in April compared with a year ago, dropping prices to their lowest levels since August 2004.
Meantime, shares of mortgage financiers Fannie Mae and Freddie Mac stabilized Tuesday, a day after plunging to early-1990s levels on worries they might need billions of dollars in new capital if a new accounting rule is put into effect.
Fannie Mae shares rose $1.88, or 11.9 percent, to $17.62 Tuesday, a day after plunging more than 16 percent. Freddie Mac shares rose $1.55, or 13 percent, to $13.46 after sliding nearly 18 percent Monday.
The federal regulator for the two companies, Office of Federal Housing Enterprise Oversight Director James Lockhart, said in a CNBC interview the accounting changes "would really have no impact on the risk of these firms." It would "make no sense" to mandate extra capital due to accounting changes, he said.
While the government is widely expected to stand behind Fannie and Freddie's debt should the companies be unable to meet their obligations, shareholders' interests are not protected.
"The shareholders are the ones who are at huge risk here ... they could potentially get wiped out," said Nigel Gault, chief U.S. economist at Global Insight.
Highlighting those risks, shares of mortgage lender IndyMac Bancorp Inc. plummeted to an all-time low of 34 cents Tuesday morning before recovering slightly, a day after the mortgage lender said it halted accepting new loan submissions in its main mortgage lending divisions and plans to slash more than half its work force.
As the housing market and broader economy continue to sag, Senate lawmakers appeared on track to approve -- possibly by week's end --a rescue plan designed to save hundreds of thousands of homeowners from foreclosure.
But it was still uncertain whether lawmakers would reach a deal with the White House, which is balking at key portions of the bill, particularly $3.9 billion included for buying and fixing up foreclosed properties. Democrats argue the money is key to preventing neighborhood blight, but most Republicans call it a bailout for lenders who helped cause the mortgage mess.
Speaking Tuesday to a mortgage-lending forum in Arlington, Va., Treasury Secretary Henry Paulson emphasized the limits of what the government can do to help.
"Many of today's unusually high number of foreclosures are not preventable," Paulson said. "There is little public policymakers can, or should, do to compensate for untenable financial decisions."
AP Business Writer Stephen Bernard in New York contributed to this report.
Ahead of the opening bell, stock-index futures had trimmed their losses as Bernanke said that the Federal Reserve might extend the time frame for embattled brokerages to tap the central bank for emergency funds. Read The Fed.
The Fed move offered assurances that "there is little risk of actual bankruptcy for the [financial] sector," said Ali.
Worries that Fannie Mae (NYSE:FNM - News) and Freddie Mac (NYSE:FRE - News) may have to raise more capital, along with a report that Lehman Brothers Holdings Inc. (NYSE:LEH - News) was temporarily barred from trading oil contracts reignited financial-sector worries ahead of second-quarter earnings season, prompting stocks to slide on Monday.
On Tuesday, shares of Fannie and Freddie gained some ground with comments by analysts and regulators easing worries the big mortgage buyers might have to return to the capital markets due to pending accounting-rule changes.
Adding his voice to the mix, Richmond Fed President Jeffrey Lacker said the Federal Reserve shouldn't wait too long before raising interest rates.
OK OK I am wondering like you are wondering, can I ride this rally, is the summer rally begun?
You could buy some SPX longs using the ETF'S and use tight stops, or maybe concentrate on getting rid what is weak in your portfolio, of course get your financial advisor to assist, but I dont think we have hit THE BOTTOM, so I am remaining patient for the supper, not worried about the snack.
Today buyers rushed in at a 72% or so up volume pace, we are absent the selling panic I like to see. I do not expect corporate earning to be there to support current valuations.
I am snooping some things, and may NIBBLE on some beaten down stuff, the REFINERS have been killed.....I dont like financials to hold (though maybe a pop can be played here) as I think most will dilute current investor value.
I thought refiners would do better today as oil prices declined. SNDK is usually a good LONG TERM BUY at these levels down the road....
BUT the credit debt issues have not been culled out yet, and I dont think in the stocks yet.....and the VIX hasn't shown enough fear for a bottom, buying has not reversed Bear signal.
Below is AP story on HOusing, where isour economy going w/o housing healing?
Housing market slump seen stretching furtherTuesday July 8, 4:37 pm ET By Alan Zibel, AP Business Writer
Realtors' pending home sales report shows housing slump continues, could drag on another year
WASHINGTON (AP) -- Signs are emerging that the U.S. housing market's long slump is likely to fester through the summer, and the real estate market may not recover for at least another year.
The latest report, the National Association of Realtors' pending home sales index, slipped by 4.7 percent in May to the third-lowest reading on record. The decline "suggests we are not out of the woods by any means," said the trade group's chief economist Lawrence Yun.
The bad news came as the regulator for Fannie Mae and Freddie Mac tried to reassure investors that an accounting rule change wouldn't force the government-chartered mortgage finance companies to raise tens of billions in capital to offset losses.
With more negative data about the housing market continuing to emerge as the economy weakens and job losses accelerate, economists are reluctant to say the worst is over.
"Even if housing market activity does manage to bottom out later this year, it is likely that any recovery would be exceedingly slow," Jeffrey Lacker, president of the Federal Reserve Bank of Richmond said in a speech in Washington.
While home sales are likely to fall to their lowest point late this year or early next year, any recovery is likely to be weak through at least 2010, said Mark Vitner, senior economist with Wachovia Corp.
Meanwhile, prices shouldn't hit bottom for another year at the earliest, Vitner said, since the housing market is glutted with unsold new homes and foreclosed properties.
Making matters worse, rates on 30-year mortgages have been above 6 percent since late May, leading to a steep decline in new applications.
The Realtors' seasonally adjusted index of pending sales for existing homes fell 4.7 percent to 84.7 from an upwardly revised April reading of 88.9. The index was 14 percent below year-ago levels. Sales are considered pending when the seller has accepted an offer, but the deal has not yet closed.
Wall Street economists surveyed by Thomson/IFR had predicted the index would come in at 87. The index, which sunk to a record low of 83 in March, stood at 98.5 in May 2007. A reading of 100 is equal to the average level of sales activity in 2001, when the index started.
Pending sales fell around the U.S., sinking the most in the South, and the least in the West.
Despite the negative numbers, "the worst of the hemorrhaging is behind us" and a modest recovery is likely to take shape next year, said Bernard Baumohl, managing director of the Economic Outlook Group.
Homeowners shouldn't get too excited, though, as Baumohl predicts median prices will show year-over-year gains of no more than 6 percent by next year.
By the Realtors' measurement, prices nationwide were down 6.3 percent in May, but are falling faster in big cities. The Standard & Poor's/Case-Shiller home price index of 20 cities fell by 15.3 percent in April compared with a year ago, dropping prices to their lowest levels since August 2004.
Meantime, shares of mortgage financiers Fannie Mae and Freddie Mac stabilized Tuesday, a day after plunging to early-1990s levels on worries they might need billions of dollars in new capital if a new accounting rule is put into effect.
Fannie Mae shares rose $1.88, or 11.9 percent, to $17.62 Tuesday, a day after plunging more than 16 percent. Freddie Mac shares rose $1.55, or 13 percent, to $13.46 after sliding nearly 18 percent Monday.
The federal regulator for the two companies, Office of Federal Housing Enterprise Oversight Director James Lockhart, said in a CNBC interview the accounting changes "would really have no impact on the risk of these firms." It would "make no sense" to mandate extra capital due to accounting changes, he said.
While the government is widely expected to stand behind Fannie and Freddie's debt should the companies be unable to meet their obligations, shareholders' interests are not protected.
"The shareholders are the ones who are at huge risk here ... they could potentially get wiped out," said Nigel Gault, chief U.S. economist at Global Insight.
Highlighting those risks, shares of mortgage lender IndyMac Bancorp Inc. plummeted to an all-time low of 34 cents Tuesday morning before recovering slightly, a day after the mortgage lender said it halted accepting new loan submissions in its main mortgage lending divisions and plans to slash more than half its work force.
As the housing market and broader economy continue to sag, Senate lawmakers appeared on track to approve -- possibly by week's end --a rescue plan designed to save hundreds of thousands of homeowners from foreclosure.
But it was still uncertain whether lawmakers would reach a deal with the White House, which is balking at key portions of the bill, particularly $3.9 billion included for buying and fixing up foreclosed properties. Democrats argue the money is key to preventing neighborhood blight, but most Republicans call it a bailout for lenders who helped cause the mortgage mess.
Speaking Tuesday to a mortgage-lending forum in Arlington, Va., Treasury Secretary Henry Paulson emphasized the limits of what the government can do to help.
"Many of today's unusually high number of foreclosures are not preventable," Paulson said. "There is little public policymakers can, or should, do to compensate for untenable financial decisions."
AP Business Writer Stephen Bernard in New York contributed to this report.
Sunday, July 06, 2008
GOLD IN DEFLATIONARY ECONOMY
http://www.gold-eagle.com/editorials_99/ascani012699.html
Hope this helps.....will it be different this time?
Duratek
Hope this helps.....will it be different this time?
Duratek
RECENT COMMENT ON BLOG and my RESPONSE
Anonymous said...
Yes trouble abounds. My two cents:Overall environment is massively deflationary. The commodity price inflation we currently see is just the tail of the prior credit expansion (which always lags) combined with speculation (based in part on currency trends which also are lagging effects). Personally I think in this environment cash is king. IMHO gold is a tough call but not likely to be the a great investment in this environment. In a long term deflationary environment, gold will lose value. In the short term it could rise or fall significantly due to many temporary factors but those moves will not be sustainable. The wild card is what is the potential for a dollar/bond crisis due to capital flight? I suspect the credit crisis and developing recession/depression are global (with a lag) which means NO DECOUPLING, so there will be no capital flight and instead dollar with actually appreciate as deflation progresses here and globally. jbr
1:07 AM
Duratek said...
JBR,Great comments. Very possibly the US $$ could appreciate here if the ECB stops raising rates, or to reduce overly bearish sentiment...but the rally off the 70.00 lows looks to have stalled."Cash is king" YES YES....it is where I have been for some time WAITING....nowmy patience is being rewarded, even my 401K is all CASH....I have sold my oil/gold position....not wanting greed....my returns MEAGER, my losses NONE,Deflation is a REAL THREAT, hence my BLACK HOLE photos.....it seems to me the attempt to reflate assets has failed....sucking from housing,banking and now stock market drawing in the forces of stupidity and recklessness.Gold did well during depression relatively speaking, flight to safety has been US TREASURIES AND COMMODITIES and my friend......what ELSE? is left to inflate and TRAP the Johnny come lately's......workers are being shed at a good clip I fear that WILL intensify as companies MUST stop red ink anyway possible.I have just read June 27th Elliot Wave and it shows in many charts that FEAR considering all that is out in the open and recent market action is not reflected in VIX and I think the Bear is in a nacent stage...take care
D
Yes trouble abounds. My two cents:Overall environment is massively deflationary. The commodity price inflation we currently see is just the tail of the prior credit expansion (which always lags) combined with speculation (based in part on currency trends which also are lagging effects). Personally I think in this environment cash is king. IMHO gold is a tough call but not likely to be the a great investment in this environment. In a long term deflationary environment, gold will lose value. In the short term it could rise or fall significantly due to many temporary factors but those moves will not be sustainable. The wild card is what is the potential for a dollar/bond crisis due to capital flight? I suspect the credit crisis and developing recession/depression are global (with a lag) which means NO DECOUPLING, so there will be no capital flight and instead dollar with actually appreciate as deflation progresses here and globally. jbr
1:07 AM
Duratek said...
JBR,Great comments. Very possibly the US $$ could appreciate here if the ECB stops raising rates, or to reduce overly bearish sentiment...but the rally off the 70.00 lows looks to have stalled."Cash is king" YES YES....it is where I have been for some time WAITING....nowmy patience is being rewarded, even my 401K is all CASH....I have sold my oil/gold position....not wanting greed....my returns MEAGER, my losses NONE,Deflation is a REAL THREAT, hence my BLACK HOLE photos.....it seems to me the attempt to reflate assets has failed....sucking from housing,banking and now stock market drawing in the forces of stupidity and recklessness.Gold did well during depression relatively speaking, flight to safety has been US TREASURIES AND COMMODITIES and my friend......what ELSE? is left to inflate and TRAP the Johnny come lately's......workers are being shed at a good clip I fear that WILL intensify as companies MUST stop red ink anyway possible.I have just read June 27th Elliot Wave and it shows in many charts that FEAR considering all that is out in the open and recent market action is not reflected in VIX and I think the Bear is in a nacent stage...take care
D
Saturday, July 05, 2008
BOTTOM PICKERS UNITE
http://stockcharts.com/h-sc/ui?s=TSO&p=D&yr=1&mn=0&dy=0&id=p10535913633&a=141568865 chart for TSO
Why you don't usually want to buy a stock in a DOWNTREND.
D
Why you don't usually want to buy a stock in a DOWNTREND.
D
NORTHERN TRUSTS KASRIEL
http://www.financialsense.com/economy/northern/kasriel/archive.html Must read to understand current situation.
Most recent reading shows how BANK LENDING HAS GONE NEGATIVE....(first time in over 30 years?) how in the HELL does the economy and corporate profits do well then?
D
Most recent reading shows how BANK LENDING HAS GONE NEGATIVE....(first time in over 30 years?) how in the HELL does the economy and corporate profits do well then?
D
Friday, July 04, 2008
BEHIND THE "BUSH" MANDATE FOR ETHANOL IS FRAUD
Biofuels behind food price hikes: leaked World Bank report
Fri Jul 4, 3:34 AM ET
Biofuels have caused world food prices to increase by 75 percent, according to the findings of an unpublished World Bank report published in The Guardian newspaper on Friday.
The daily said the report was finished in April but was not published to avoid embarrassing the US government, which has claimed plant-derived fuels have pushed up prices by only three percent.
Biofuels, which supporters claim are a "greener" alternative to using fossil fuel and cut greenhouse gas emissions, and rising food prices will be on the agenda when G8 leaders meet in Japan next week for their annual summit.
The report's author, a senior World Bank economist, assessed that contrary to claims by US President George W. Bush, increased demand from India and China has not been the cause of rising food prices.
"Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases," the report said.
Droughts in Australia have also not had a significant impact, it added. Instead, European and US drives for greater use of biofuels has had the biggest effect.
The European Union has mooted using biofuels for up to 10 percent of all transport fuels by 2020 as part of an increase in use of renewable energy.
All petrol and diesel in Britain has had to include a biofuels component of at least 2.5 percent since April this year.
"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," the report said.
It added that the drive for biofuels has distorted food markets by diverting grain away from food for fuel, encouraging farmers to set aside land for its production, and sparked financial speculation on grains.
But Brazil's transformation of sugar cane into fuel has not had such a dramatic impact, the report said.
"The basket of food prices examined in the study rose by 140 percent between 2002 and this February," The Guardian said.
"The report estimates that higher energy and fertiliser prices accounted for an increase of only 15 percent, while biofuels have been responsible for a 75 percent jump over that period."
Fri Jul 4, 3:34 AM ET
Biofuels have caused world food prices to increase by 75 percent, according to the findings of an unpublished World Bank report published in The Guardian newspaper on Friday.
The daily said the report was finished in April but was not published to avoid embarrassing the US government, which has claimed plant-derived fuels have pushed up prices by only three percent.
Biofuels, which supporters claim are a "greener" alternative to using fossil fuel and cut greenhouse gas emissions, and rising food prices will be on the agenda when G8 leaders meet in Japan next week for their annual summit.
The report's author, a senior World Bank economist, assessed that contrary to claims by US President George W. Bush, increased demand from India and China has not been the cause of rising food prices.
"Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases," the report said.
Droughts in Australia have also not had a significant impact, it added. Instead, European and US drives for greater use of biofuels has had the biggest effect.
The European Union has mooted using biofuels for up to 10 percent of all transport fuels by 2020 as part of an increase in use of renewable energy.
All petrol and diesel in Britain has had to include a biofuels component of at least 2.5 percent since April this year.
"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," the report said.
It added that the drive for biofuels has distorted food markets by diverting grain away from food for fuel, encouraging farmers to set aside land for its production, and sparked financial speculation on grains.
But Brazil's transformation of sugar cane into fuel has not had such a dramatic impact, the report said.
"The basket of food prices examined in the study rose by 140 percent between 2002 and this February," The Guardian said.
"The report estimates that higher energy and fertiliser prices accounted for an increase of only 15 percent, while biofuels have been responsible for a 75 percent jump over that period."
Thursday, July 03, 2008
BEAR RIPS MARKET A NEW ONE!
Hi friends,
Short and sweet, just got back from Fla, warm....ocean wonderful...saw my good friends SSKRAM, and his lovely wife Edwina and Justin too...relaxing...Im back and ready to ROCK and recharged.
Market is now turning on the last? bastion of strength the commodity sector, anytime you party this hardy don't overstay welcome bank some profits.....
Look, I haven;t charted squat, but I have lots to share.......market has broken down BIG TIME, do NOT believe the stats they throw at you.....the real world even has Burns Steakhouse in Tampa with biz down......Tampa Rays not down, saw Mon game.....
I will try to get it all down this SAT, in a more detailed post....look back then or SUnday, and I will do my best to keep my site active!
take care, enjoy 4th....and if you've been with me you've been no worse than IN CASH and SAFE!
Duratek
Short and sweet, just got back from Fla, warm....ocean wonderful...saw my good friends SSKRAM, and his lovely wife Edwina and Justin too...relaxing...Im back and ready to ROCK and recharged.
Market is now turning on the last? bastion of strength the commodity sector, anytime you party this hardy don't overstay welcome bank some profits.....
Look, I haven;t charted squat, but I have lots to share.......market has broken down BIG TIME, do NOT believe the stats they throw at you.....the real world even has Burns Steakhouse in Tampa with biz down......Tampa Rays not down, saw Mon game.....
I will try to get it all down this SAT, in a more detailed post....look back then or SUnday, and I will do my best to keep my site active!
take care, enjoy 4th....and if you've been with me you've been no worse than IN CASH and SAFE!
Duratek
Monday, June 23, 2008
SLOPE OF HOPE SLIPPERY WITH OIL!!!
UPS Drastically Cuts Outlook- AP
UPS, the world's largest shipping carrier, says it is lowering its earnings expectations for the second quarter because of slowing U.S. economic growth and high fuel costs.
Boy that's a surprise huh? It's in words they choose...in bold. New 52 wk low in AH
No sign of bottom nor rally.....rally on what? No one has any clarity...vision of future biz.
FED will keep steady on rates.....headlines read....then will inflation and th0se watching take heed from this, will US $ get dumped...interest rates may rise....ROCK N HARD PLACE instead of ROLL
Maybe see ya July 5th
D
UPS, the world's largest shipping carrier, says it is lowering its earnings expectations for the second quarter because of slowing U.S. economic growth and high fuel costs.
Boy that's a surprise huh? It's in words they choose...in bold. New 52 wk low in AH
No sign of bottom nor rally.....rally on what? No one has any clarity...vision of future biz.
FED will keep steady on rates.....headlines read....then will inflation and th0se watching take heed from this, will US $ get dumped...interest rates may rise....ROCK N HARD PLACE instead of ROLL
Maybe see ya July 5th
D
Saturday, June 21, 2008
BEAR ING DOWN ON THE WORLD And LAST POST FOR AWHILE
Last post for awhile?
Mainly because I put lots of time, thoguht and effort here, and I am not getting an adequate amount of lurker feedback, so there is NO way other than YOU leaving a comment here for me and others that I can tell if ANYONE reads what I post.
SO w/o further ado
Pressure of inflation on profits, declining consumer confidence and ability to ramp up consumption, trouble at the major banks around the world, meaning money available is ONLY ST money, needing to be repaid to the FED, they NEED investors to loan them LONGER term money at some point CONFIDENCE gets restored in CDO’s and other instruments of CREDIT EXPANSION.
I do not think too many are even aware of the Kondratieff cycle (or know how to spell it), and what kind of power it will exert going forward.
What is happening now is needed to correct the imbalances and gorging that has come before it, and normally it happens much faster and retraces back to its beginning.
How far is needed to correct this in terms of Dow points we won’t know until it is over, a shock it would be if we find ourselves challenging the 2002 or 2003 lows!
The markets break and close below 12,000 is significant and the problems created by the commodity bubble are just now being felt and dealt with.
We have WEAK economy, we have inflation, we have already LOW interest rates, a murdered dollar, so where to now…..
Duratek
Mainly because I put lots of time, thoguht and effort here, and I am not getting an adequate amount of lurker feedback, so there is NO way other than YOU leaving a comment here for me and others that I can tell if ANYONE reads what I post.
SO w/o further ado
Pressure of inflation on profits, declining consumer confidence and ability to ramp up consumption, trouble at the major banks around the world, meaning money available is ONLY ST money, needing to be repaid to the FED, they NEED investors to loan them LONGER term money at some point CONFIDENCE gets restored in CDO’s and other instruments of CREDIT EXPANSION.
I do not think too many are even aware of the Kondratieff cycle (or know how to spell it), and what kind of power it will exert going forward.
What is happening now is needed to correct the imbalances and gorging that has come before it, and normally it happens much faster and retraces back to its beginning.
How far is needed to correct this in terms of Dow points we won’t know until it is over, a shock it would be if we find ourselves challenging the 2002 or 2003 lows!
The markets break and close below 12,000 is significant and the problems created by the commodity bubble are just now being felt and dealt with.
We have WEAK economy, we have inflation, we have already LOW interest rates, a murdered dollar, so where to now…..
Duratek
Friday, June 06, 2008
DON'T LOSE YOUR HEAD OVER THESE SHOULDERS
I Just got confirmed from my REP HON company (one of top 3 in country) is raising prices in July 3% but in last 3 months they have been forced to take more action, IN OCT they will pass along an avg of 8.5% ADDT’L INCREASE!!!!!!!!!!!!!!!!!!!!!!!!
OIL could go to $0 tomorrow, and it will take MANY months for this shit to filter thru and or out…recent Head and Shoulders I see on SPX has been broken (by my charting) (meaning trip down to 1325 for sure at min)
MY friends, maybe the IN CROWD and play with this mkt some more, but I suspect this BEAR is JUST getting started
Europe will raise rates to ward off inflation (fight it), FED is done and the US $$ toilet paper as it is is under siege again.
I talk to a LOT of people, my bass teacher (34 yr old guy) knows the problem…..”FED PRINTING PRESS’….DEFEND OUR SHORES DEFEND OUR CURRENCY….none of the knuckleheads running have a clue
OIL could go to $0 tomorrow, and it will take MANY months for this shit to filter thru and or out…recent Head and Shoulders I see on SPX has been broken (by my charting) (meaning trip down to 1325 for sure at min)
MY friends, maybe the IN CROWD and play with this mkt some more, but I suspect this BEAR is JUST getting started
Europe will raise rates to ward off inflation (fight it), FED is done and the US $$ toilet paper as it is is under siege again.
I talk to a LOT of people, my bass teacher (34 yr old guy) knows the problem…..”FED PRINTING PRESS’….DEFEND OUR SHORES DEFEND OUR CURRENCY….none of the knuckleheads running have a clue
Tuesday, June 03, 2008
END OF DAYS
Fed signals end to rate cuts TheStar.com -
Business - Fed signals end to rate cuts
May 25, 2008 JEANNINE AVERSAAP Economics Writer
WASHINGTON (AP) – Sounding a gong couldn't have made it clearer. Federal Reserve officials are putting out the word that further interest rate cuts are unlikely.
Fed Governor Kevin Warsh ditched the central bank's cryptic word tangles and actually waxed poetic. "Even if the economy were to weaken somewhat further, we should be inclined to resist expected, reflexive calls to trot out the hammer again," Warsh said, referring to the Fed's key interest rate.
Speaking more central-bankerly, the Fed's No. 2 official, Vice Chairman Donald Kohn, said the current stance of interest-rate policy "appears to be appropriately calibrated for now." Janet Yellen, president of the Federal Reserve Bank of San Francisco, called the current level of rates "appropriate.''
They are amplifying a signal sent by Chairman Ben Bernanke and his colleagues last month that the Fed's most aggressive rate-cutting campaign in two decades may be winding down – finally. The cuts started in September and take months to work their way through the economy.
That does not mean the economy, badly bruised by housing, credit and financial woes, is out of the woods. The Fed, though, is hoping its powerful doses of cuts, along with the government's relief plan of tax rebates and breaks will help lift the economy in the second half of this year.
Zooming prices for energy and food and other commodity prices are raising some concerns that inflation could take off and spread through the economy. Further reductions in interest rates would aggravate the situation.
In fact, the Fed's last rate reduction in late April was "a close call," according to recently released documents of those private deliberations. At that time, two Fed members favored no cut at all, given the concerns about inflation.
Many economists believe the Fed will hold its key rate steady at 2 percent, a four-year-low, at its next meeting on June 24-25 and probably through much, if not all, of 2008.
Holding rates at this level should help foster better economic and employment conditions and moderate inflation, Kohn said.
"The Fed's advertised reluctance to cut again is a wise one,'' said Terry Connelly, dean of Golden Gate University's Ageno School of Business.
Here's what Fed policymakers are up against: Cut rates and bolster a weak economy where employers are eliminating jobs and consumers are pulling back; raise rates and fend off inflation.
With the housing market still flailing and foreclosures at record highs, policymakers probably would shy from pushing up rates – even with the specter of inflation – as the country prepares to vote for a new president, some analysts said.
"The Fed has spent the last eight months ushering homeowners with adjustable-rate mortgages to safety by repeatedly cutting interest rates. They won't want to throw them back under the bus by raising interest rates too much, too soon," said Greg McBride, senior financial analyst at Bankrate.com. "Candidates would have a field day," he said.
Bernanke has said the election would not color the Fed's decisions. "Political considerations will play no role. We will be objective. We will be analytical, and we will do what is right for the economy," he said.
The Fed's political independence is crucial to its ability to maintain credibility with investors on Wall Street and around the globe.
The combination of slow growth and rising inflation has raised fears the country may be headed for a bout of stagflation for the first time since the 1970s. Bernanke and other Fed officials, however, say that is not the case.
Oil prices are marching past $130 a barrel, gasoline prices are closing in on $4 a gallon nationally and food prices are skyrocketing. Given all that, Fed officials cannot afford to let inflation take hold. Once that happens, it can be difficult and painful to break inflation. It could force the Fed to raise rates, which would puts the brakes on spending. Inflation eats into paychecks, whittles away the value of investments and cuts into corporate profits.
"Inflation has been elevated for some time and prices of commodities are surging," Warsh said. "I find these trends particularly vexing at a time when global demand growth, most likely, has slowed," he said.
The Fed's rate reductions since last year have contributed to the drop in value of the dollar. The diminished greenback has been a factor pushing up prices for oil and other commodities. Kohn, however, believed the sagging dollar's role in rising commodity prices "probably has been a small one.''
For now, the Fed is forecasting slower economic growth, higher unemployment and a bigger pickup in inflation for this year than it thought just a few months ago. But Fed officials acknowledge the uncertain environment makes them less confident in their projections.
And conditions can change quickly.
In October the Fed signaled it was going to hit the pause button on rate-cutting campaign. At the time, Fed officials believed additional cuts might not be needed to help the economy survive housing and credit stresses. Then conditions deteriorated, forcing the Fed to do an about-face and lower rates again in December.
AP-ES-05-25-08 1055EDT
Business - Fed signals end to rate cuts
May 25, 2008 JEANNINE AVERSAAP Economics Writer
WASHINGTON (AP) – Sounding a gong couldn't have made it clearer. Federal Reserve officials are putting out the word that further interest rate cuts are unlikely.
Fed Governor Kevin Warsh ditched the central bank's cryptic word tangles and actually waxed poetic. "Even if the economy were to weaken somewhat further, we should be inclined to resist expected, reflexive calls to trot out the hammer again," Warsh said, referring to the Fed's key interest rate.
Speaking more central-bankerly, the Fed's No. 2 official, Vice Chairman Donald Kohn, said the current stance of interest-rate policy "appears to be appropriately calibrated for now." Janet Yellen, president of the Federal Reserve Bank of San Francisco, called the current level of rates "appropriate.''
They are amplifying a signal sent by Chairman Ben Bernanke and his colleagues last month that the Fed's most aggressive rate-cutting campaign in two decades may be winding down – finally. The cuts started in September and take months to work their way through the economy.
That does not mean the economy, badly bruised by housing, credit and financial woes, is out of the woods. The Fed, though, is hoping its powerful doses of cuts, along with the government's relief plan of tax rebates and breaks will help lift the economy in the second half of this year.
Zooming prices for energy and food and other commodity prices are raising some concerns that inflation could take off and spread through the economy. Further reductions in interest rates would aggravate the situation.
In fact, the Fed's last rate reduction in late April was "a close call," according to recently released documents of those private deliberations. At that time, two Fed members favored no cut at all, given the concerns about inflation.
Many economists believe the Fed will hold its key rate steady at 2 percent, a four-year-low, at its next meeting on June 24-25 and probably through much, if not all, of 2008.
Holding rates at this level should help foster better economic and employment conditions and moderate inflation, Kohn said.
"The Fed's advertised reluctance to cut again is a wise one,'' said Terry Connelly, dean of Golden Gate University's Ageno School of Business.
Here's what Fed policymakers are up against: Cut rates and bolster a weak economy where employers are eliminating jobs and consumers are pulling back; raise rates and fend off inflation.
With the housing market still flailing and foreclosures at record highs, policymakers probably would shy from pushing up rates – even with the specter of inflation – as the country prepares to vote for a new president, some analysts said.
"The Fed has spent the last eight months ushering homeowners with adjustable-rate mortgages to safety by repeatedly cutting interest rates. They won't want to throw them back under the bus by raising interest rates too much, too soon," said Greg McBride, senior financial analyst at Bankrate.com. "Candidates would have a field day," he said.
Bernanke has said the election would not color the Fed's decisions. "Political considerations will play no role. We will be objective. We will be analytical, and we will do what is right for the economy," he said.
The Fed's political independence is crucial to its ability to maintain credibility with investors on Wall Street and around the globe.
The combination of slow growth and rising inflation has raised fears the country may be headed for a bout of stagflation for the first time since the 1970s. Bernanke and other Fed officials, however, say that is not the case.
Oil prices are marching past $130 a barrel, gasoline prices are closing in on $4 a gallon nationally and food prices are skyrocketing. Given all that, Fed officials cannot afford to let inflation take hold. Once that happens, it can be difficult and painful to break inflation. It could force the Fed to raise rates, which would puts the brakes on spending. Inflation eats into paychecks, whittles away the value of investments and cuts into corporate profits.
"Inflation has been elevated for some time and prices of commodities are surging," Warsh said. "I find these trends particularly vexing at a time when global demand growth, most likely, has slowed," he said.
The Fed's rate reductions since last year have contributed to the drop in value of the dollar. The diminished greenback has been a factor pushing up prices for oil and other commodities. Kohn, however, believed the sagging dollar's role in rising commodity prices "probably has been a small one.''
For now, the Fed is forecasting slower economic growth, higher unemployment and a bigger pickup in inflation for this year than it thought just a few months ago. But Fed officials acknowledge the uncertain environment makes them less confident in their projections.
And conditions can change quickly.
In October the Fed signaled it was going to hit the pause button on rate-cutting campaign. At the time, Fed officials believed additional cuts might not be needed to help the economy survive housing and credit stresses. Then conditions deteriorated, forcing the Fed to do an about-face and lower rates again in December.
AP-ES-05-25-08 1055EDT
Subscribe to:
Posts (Atom)
