Dian L. Chu - Seeking Alpha 'Dian L. Chu' Tag RSS Syndication from SeekingAlpha.com SeekingAlpha.com http://seekingalpha.com/author/dian-l-chu Dubai's Debt Woes Could Further Unhinge U.S. Commercial Real Estate Sector http://seekingalpha.com/article/175600-dubai-s-debt-woes-could-further-unhinge-u-s-commercial-real-estate-sector?source=feed 175600 Stock markets around the world cracked on Friday with the Dow Jones industrial average down more than 150 points (Fig. 1), and commodities plunging as Dubai debt woes unnerved investors, and sent tremors of uncertainty throughout all markets.


]]> Sun, 29 Nov 2009 01:27:23 -0500 Dian L. Chu Stock markets around the world cracked on Friday with the Dow Jones industrial average down more than 150 points (Fig. 1), and commodities plunging as Dubai debt woes unnerved investors, and sent tremors of uncertainty throughout all markets.



Complete Story »]]> GULF FFR FIO Dian L. Chu Mining Equipment: Out of the Pits and Set to Rise as Coal, Copper and Ore Demand Increase http://seekingalpha.com/article/174767-mining-equipment-out-of-the-pits-and-set-to-rise-as-coal-copper-and-ore-demand-increase?source=feed 174767 Broad capital spending cuts, and curtailed production have landed machinery companies in the pits but mining equipment makers will likely be among the first to emerge from under the recessionary rubble. The reason is that commodity prices are up substantially from their recent lows, at a time when the world is running out of all those precious natural resources.

Highly Coveted Resources

]]> Mon, 23 Nov 2009 04:45:02 -0500 Dian L. Chu Broad capital spending cuts, and curtailed production have landed machinery companies in the pits but mining equipment makers will likely be among the first to emerge from under the recessionary rubble. The reason is that commodity prices are up substantially from their recent lows, at a time when the world is running out of all those precious natural resources.

Highly Coveted Resources


Complete Story »]]> RTP BHP VALE URI HTZ CAT BUCY JOYG TEX Dian L. Chu China: Consequences of the Sleeping Lion Awakened http://seekingalpha.com/article/173475-china-consequences-of-the-sleeping-lion-awakened?source=feed 173475 U.S. President Barack Obama has begun a nine-day tour of Asia at a time when the U.S. economy is struggling to emerge from a deep recession. But nothing looms bigger than China, the largest holder of U.S. debt (around $797.1 billion, up 10% this year), that has emerged from the global economic downturn in an ever stronger position. When Obama sets foot in China for the first time, he will confront a dramatically altered balance of power between the two nations.

Two Decades of Explosive Growth

]]> Mon, 16 Nov 2009 04:14:28 -0500 Dian L. Chu U.S. President Barack Obama has begun a nine-day tour of Asia at a time when the U.S. economy is struggling to emerge from a deep recession. But nothing looms bigger than China, the largest holder of U.S. debt (around $797.1 billion, up 10% this year), that has emerged from the global economic downturn in an ever stronger position. When Obama sets foot in China for the first time, he will confront a dramatically altered balance of power between the two nations.

Two Decades of Explosive Growth


Complete Story »]]> FXI CYB UUP UDN GXC PGJ CNY WMT MCD BHP RTP VALE Dian L. Chu Saudi Oil Pricing Paradigm Shift: WTI Index Out, ASCI Index In http://seekingalpha.com/article/172743-saudi-oil-pricing-paradigm-shift-wti-index-out-asci-index-in?source=feed 172743 Saudi Aramco, national oil company of the world’s largest oil producer and exporter, decided earlier this month it will drop West Texas Intermediate (WTI) as the benchmark for pricing its oil for sale in the US market.

In January 2010, Aramco will use the Argus Sour Crude Index (ASCI) to price its oil for the market; it’s heavier and has higher sulfur content than WTI. The index, launched in May, uses the volume-weighted average of daily spot sales of the three U.S. Gulf Coast medium sour crudes: Mars, Poseidon, and Southern Green Canyon.

]]> Wed, 11 Nov 2009 07:27:16 -0500 Dian L. Chu Saudi Aramco, national oil company of the world’s largest oil producer and exporter, decided earlier this month it will drop West Texas Intermediate (WTI) as the benchmark for pricing its oil for sale in the US market.

In January 2010, Aramco will use the Argus Sour Crude Index (ASCI) to price its oil for the market; it’s heavier and has higher sulfur content than WTI. The index, launched in May, uses the volume-weighted average of daily spot sales of the three U.S. Gulf Coast medium sour crudes: Mars, Poseidon, and Southern Green Canyon.


Complete Story »]]> TRP XOM VLO USO Dian L. Chu Reacting to Roubini's Predictions: The Economy, Dollar Carry-Trade, Housing http://seekingalpha.com/article/171730-reacting-to-roubini-s-predictions-the-economy-dollar-carry-trade-housing?source=feed 171730 In this interview with CNBC on Nov. 4, 2009, Dr. Nouriel Roubini, professor of economics at the Stern School of Business, New York University and chairman of RGE Monitor, cautions investors of the coming asset bubble and crash caused by the dollar carry trade, and at the same time shared his views on the economy and housing.


Video Source: CNBC

This is the second time in many weeks that Dr. Roubini warned of a growing dollar carry trade and threatening to cause a global implosion. The following is a summary of his CNBC interview along with my comments.

]]> Fri, 06 Nov 2009 02:36:16 -0500 Dian L. Chu In this interview with CNBC on Nov. 4, 2009, Dr. Nouriel Roubini, professor of economics at the Stern School of Business, New York University and chairman of RGE Monitor, cautions investors of the coming asset bubble and crash caused by the dollar carry trade, and at the same time shared his views on the economy and housing.


Video Source: CNBC

This is the second time in many weeks that Dr. Roubini warned of a growing dollar carry trade and threatening to cause a global implosion. The following is a summary of his CNBC interview along with my comments.


Complete Story »]]> UDN DMM Dian L. Chu Gold: It's All About the Dollar and (Yes Dr. Roubini), Inflation http://seekingalpha.com/article/171069-gold-it-s-all-about-the-dollar-and-yes-dr-roubini-inflation?source=feed 171069 Gold prices surged to a new high Tuesday on news that India's central bank bought $6.7 billion worth of gold from the International Monetary Fund (IMF). December gold jumped as high as $1,087, before settling at $1,084.90 an ounce on the NYMEX breaking the previous record of $1,072 an ounce on Oct. 14. Prices are now up 22.7% for the year heading for a ninth straight annual increase. (Fig. 1, click to enlarge)


Unusual Correlation

]]> Wed, 04 Nov 2009 05:53:05 -0500 Dian L. Chu Gold prices surged to a new high Tuesday on news that India's central bank bought $6.7 billion worth of gold from the International Monetary Fund (IMF). December gold jumped as high as $1,087, before settling at $1,084.90 an ounce on the NYMEX breaking the previous record of $1,072 an ounce on Oct. 14. Prices are now up 22.7% for the year heading for a ninth straight annual increase. (Fig. 1, click to enlarge)


Unusual Correlation


Complete Story »]]> ABX KGC JAG NEM AUY Dian L. Chu Marc Faber: Dollar Due for Rebound, Emerging Markets Worth Considering http://seekingalpha.com/article/170063-marc-faber-dollar-due-for-rebound-emerging-markets-worth-considering?source=feed 170063

Video Source: WSJ.com

Dr. Marc Faber, managing director of Marc Faber Ltd., in a video interview dated 10/29/09 at Barron's Art of Successful Investing Conference, comments on the dollar, global economy, and his advise to investors to increase holdings in emerging markets.
]]> Fri, 30 Oct 2009 03:03:15 -0400 Dian L. Chu

Video Source: WSJ.com

Dr. Marc Faber, managing director of Marc Faber Ltd., in a video interview dated 10/29/09 at Barron's Art of Successful Investing Conference, comments on the dollar, global economy, and his advise to investors to increase holdings in emerging markets.

Complete Story »]]> UUP UDN THD VNM Dian L. Chu Despite Declining Value, Dollar's Status as World's Reserve Currency Is Safe...For Now http://seekingalpha.com/article/168731-despite-declining-value-dollar-s-status-as-world-s-reserve-currency-is-safe-for-now?source=feed 168731 Note: This is my view of the dollar and its potential impact in comparison to the opinions of Mr. Peter Schiff.

The dollar's value against major currencies has fallen in recent months as the U.S. fiscal outlook worsened and amid expectations that interest rates will remain close to zero for some time to fight the economic downturn.

]]> Mon, 26 Oct 2009 03:50:13 -0400 Dian L. Chu Note: This is my view of the dollar and its potential impact in comparison to the opinions of Mr. Peter Schiff.

The dollar's value against major currencies has fallen in recent months as the U.S. fiscal outlook worsened and amid expectations that interest rates will remain close to zero for some time to fight the economic downturn.


Complete Story »]]> UUP UDN Dian L. Chu Deja Vu 2008: Crude Oil Market Entirely Detached from Fundamentals http://seekingalpha.com/article/167199-deja-vu-2008-crude-oil-market-entirely-detached-from-fundamentals?source=feed 167199 Last Friday, U.S. crude oil futures finished above $78, the highest level in a year, surging more than 9% during the past week making it the largest weekly gain since the height of the summer driving season, even though the U.S. continues to sit on ample supply of petroleum.

Given the continued sluggishness of the economy, high unemployment rate and large amounts of excess oil production capacity around the world, analysts said a sudden upward spike was still unlikely, while others are predicting an imminent correction down below $70.

]]> Mon, 19 Oct 2009 03:42:03 -0400 Dian L. Chu Last Friday, U.S. crude oil futures finished above $78, the highest level in a year, surging more than 9% during the past week making it the largest weekly gain since the height of the summer driving season, even though the U.S. continues to sit on ample supply of petroleum.

Given the continued sluggishness of the economy, high unemployment rate and large amounts of excess oil production capacity around the world, analysts said a sudden upward spike was still unlikely, while others are predicting an imminent correction down below $70.


Complete Story »]]> USO GLD DBC Dian L. Chu What's Ahead for Natural Gas? http://seekingalpha.com/article/165974-what-s-ahead-for-natural-gas?source=feed 165974 Unlike oil, which can be transported and traded around the world, natural gas (not in the liquid form) is tough to transport, and thus boxed in within the producing continent. The inventory glut due to diminishing demand since the recession hit in the 4th quarter of 2008 has been pressuring U.S. natural gas prices. As a result, on Sept. 4, the NYMEX October futures contract for natural gas closed at $2.73/mmbtu, a 7-year low, as the ratio of oil to natural gas prices exploded to 25-to-1, compared to its energy conversion ratio of 6-to-1.

Now, just one month later, natural gas has rebounded 75% to close at $4.77/mmbtu for NYMEX November delivery last Friday on record high levels of natural gas in storage, leaving investors to wonder if prices have bottomed out and it's time to jump back into the market, or if the sector is dead.

]]> Mon, 12 Oct 2009 10:34:18 -0400 Dian L. Chu Unlike oil, which can be transported and traded around the world, natural gas (not in the liquid form) is tough to transport, and thus boxed in within the producing continent. The inventory glut due to diminishing demand since the recession hit in the 4th quarter of 2008 has been pressuring U.S. natural gas prices. As a result, on Sept. 4, the NYMEX October futures contract for natural gas closed at $2.73/mmbtu, a 7-year low, as the ratio of oil to natural gas prices exploded to 25-to-1, compared to its energy conversion ratio of 6-to-1.

Now, just one month later, natural gas has rebounded 75% to close at $4.77/mmbtu for NYMEX November delivery last Friday on record high levels of natural gas in storage, leaving investors to wonder if prices have bottomed out and it's time to jump back into the market, or if the sector is dead.


Complete Story »]]> UNG Dian L. Chu Olympics Effect: Now It's Brazil's Turn to Benefit http://seekingalpha.com/article/164746-olympics-effect-now-it-s-brazil-s-turn-to-benefit?source=feed 164746 Brazilian stocks rallied, along with the nation's currency, as investment prospects brighten on the news that Rio de Janeiro will host the 2016 Summer Olympics, making the Bovespa the world's best-performing major index last Friday.

The victory was heralded by some as signaling Brazil's arrival as a major economy. Despite worries about Rio's high crime rate and lack of infrastructure, the chance to bring the Olympics to a continent that had never hosted the Games obviously worked in Rio’s favor.

]]> Mon, 05 Oct 2009 03:14:28 -0400 Dian L. Chu Brazilian stocks rallied, along with the nation's currency, as investment prospects brighten on the news that Rio de Janeiro will host the 2016 Summer Olympics, making the Bovespa the world's best-performing major index last Friday.

The victory was heralded by some as signaling Brazil's arrival as a major economy. Despite worries about Rio's high crime rate and lack of infrastructure, the chance to bring the Olympics to a continent that had never hosted the Games obviously worked in Rio’s favor.


Complete Story »]]> EWZ BZF GGB VALE SID PBR DBC Dian L. Chu What's Our Real Economic Condition? http://seekingalpha.com/article/164102-what-s-our-real-economic-condition?source=feed 164102 Last Friday, the Commerce Department announced that orders for durable goods decreased in August by 2.4%, or $4 billion in total, defying economists' estimates of a 0.5% gain. Sales of new homes inched up 0.7%, also less than forecast. Meanwhile, masked by the cash-for-clunkers program, one of the closely-watched leading indicators, ISM Manufacturing Index, rose a larger-than-expected 4 points to 52.9, and the index has been in expansionary territory since April.

The Great Market Debate

]]> Wed, 30 Sep 2009 10:04:50 -0400 Dian L. Chu Last Friday, the Commerce Department announced that orders for durable goods decreased in August by 2.4%, or $4 billion in total, defying economists' estimates of a 0.5% gain. Sales of new homes inched up 0.7%, also less than forecast. Meanwhile, masked by the cash-for-clunkers program, one of the closely-watched leading indicators, ISM Manufacturing Index, rose a larger-than-expected 4 points to 52.9, and the index has been in expansionary territory since April.

The Great Market Debate


Complete Story »]]> SEA Dian L. Chu Market Outlook: Expect a Major Shift in Bond and Equity Correlations http://seekingalpha.com/article/163393-market-outlook-expect-a-major-shift-in-bond-and-equity-correlations?source=feed 163393 The S&P has skyrocketed 58% since its bottom in early March, while the Dow is up 50% and the Nasdaq has surged 68% during that time. Meanwhile, bond prices led a rally as rates on the benchmark 10-year note have declined some 40 basis points since early August. This is good news for business: higher bond prices make it easier to refinance debt and stay in business.

Meanwhile, across the country, Main Street investors are weighing whether they should jump back into the market. However, the price correlation between equities and bonds of late has some argue that typically, if equities are trending higher, then bonds would head lower, and yield would be higher, due to concerns of higher inflation. This essentially describes “the Fed Model”, which is a theory of equity valuation popular among security analysts.

]]> Fri, 25 Sep 2009 06:15:02 -0400 Dian L. Chu The S&P has skyrocketed 58% since its bottom in early March, while the Dow is up 50% and the Nasdaq has surged 68% during that time. Meanwhile, bond prices led a rally as rates on the benchmark 10-year note have declined some 40 basis points since early August. This is good news for business: higher bond prices make it easier to refinance debt and stay in business.

Meanwhile, across the country, Main Street investors are weighing whether they should jump back into the market. However, the price correlation between equities and bonds of late has some argue that typically, if equities are trending higher, then bonds would head lower, and yield would be higher, due to concerns of higher inflation. This essentially describes “the Fed Model”, which is a theory of equity valuation popular among security analysts.


Complete Story »]]> SPY DIA QQQQ IEF Dian L. Chu Flattening Oil Contango: Is It a Bullish Sign? http://seekingalpha.com/article/163135-flattening-oil-contango-is-it-a-bullish-sign?source=feed 163135 Starting about ten months ago, if you had access to oil storage tanks plus enough financial resources, the sky was the limit to buying spot crude oil and selling a year or so forward on Nymex. For more than six months, it was a highly profitable trade when the spread between the near-month and forward contracts was about $10/bbl or more with a return of more than 15% (Fig. 1, click to enlarge). During the super contango phase of late 2008 and early 2009, the spread was so ridiculously wide that the rate of return was close to 70% at one point in time.


Why is the Contango Flattening?

]]> Thu, 24 Sep 2009 06:18:05 -0400 Dian L. Chu Starting about ten months ago, if you had access to oil storage tanks plus enough financial resources, the sky was the limit to buying spot crude oil and selling a year or so forward on Nymex. For more than six months, it was a highly profitable trade when the spread between the near-month and forward contracts was about $10/bbl or more with a return of more than 15% (Fig. 1, click to enlarge). During the super contango phase of late 2008 and early 2009, the spread was so ridiculously wide that the rate of return was close to 70% at one point in time.


Why is the Contango Flattening?


Complete Story »]]> OIL USO Dian L. Chu Natural Gas Trading: Right Now, It's the Wild, Wild West http://seekingalpha.com/article/162151-natural-gas-trading-right-now-it-s-the-wild-wild-west?source=feed 162151 In my last article, I discussed two of the major factors to this week’s run-up in natural gas - Operation Flow Orders (OFOs) and pre-configured stop orders being hit. Here, I’d like to take a look at some of the other concurrent distortions in the natural gas market.

UNG Rolling Effect

]]> Fri, 18 Sep 2009 03:41:35 -0400 Dian L. Chu In my last article, I discussed two of the major factors to this week’s run-up in natural gas - Operation Flow Orders (OFOs) and pre-configured stop orders being hit. Here, I’d like to take a look at some of the other concurrent distortions in the natural gas market.

UNG Rolling Effect


Complete Story »]]> UNG CHK EOG Dian L. Chu Natural Gas Has Spiked 60% Since Labor Day. Why? http://seekingalpha.com/article/161308-natural-gas-has-spiked-60-since-labor-day-why?source=feed 161308 As reported by Zero Hedge on Thursday, September 10, 2009, natural gas was up by about 16% on no real change in the fundamentals of the commodity. By the end of the trading day, natural gas saw its biggest one-day gain of 15% in almost five years (Fig. 1, click to enlarge). Natural gas price has spiked almost 60 % since Labor Day and prompted investors to believe a V-shaped recovery might be near for the brutally battered U.S. natural gas market. However, don’t break out the champagne just yet until you learn more about two of the major factors driving this latest spike, pipeline Operation Flow Orders and from the trader's perspective.

]]> Mon, 14 Sep 2009 03:58:45 -0400 Dian L. Chu As reported by Zero Hedge on Thursday, September 10, 2009, natural gas was up by about 16% on no real change in the fundamentals of the commodity. By the end of the trading day, natural gas saw its biggest one-day gain of 15% in almost five years (Fig. 1, click to enlarge). Natural gas price has spiked almost 60 % since Labor Day and prompted investors to believe a V-shaped recovery might be near for the brutally battered U.S. natural gas market. However, don’t break out the champagne just yet until you learn more about two of the major factors driving this latest spike, pipeline Operation Flow Orders and from the trader's perspective.


Complete Story »]]> UNG Dian L. Chu Will This Gold Rush Continue? http://seekingalpha.com/article/160952-will-this-gold-rush-continue?source=feed 160952 Gold finally made its run above the magical $1,000 mark on Tuesday, September 8th, 2009 breaking free from a two-month trading range between $930 and $970 an ounce. For the third time, gold soared past the $1,000 level, causing the market to eye the precious metal's record of $1,033.90 reached in March 2008. While Citigroup (C) is predicting a $2,000 scenario by next year due to continuing dollar weakness, a number of bullish factors, both near and long term, have converged to boost gold.

Technical Rally

]]> Fri, 11 Sep 2009 04:03:09 -0400 Dian L. Chu Gold finally made its run above the magical $1,000 mark on Tuesday, September 8th, 2009 breaking free from a two-month trading range between $930 and $970 an ounce. For the third time, gold soared past the $1,000 level, causing the market to eye the precious metal's record of $1,033.90 reached in March 2008. While Citigroup (C) is predicting a $2,000 scenario by next year due to continuing dollar weakness, a number of bullish factors, both near and long term, have converged to boost gold.

Technical Rally


Complete Story »]]> GLD UUP UDN EWH ABX AU FCX NG JAG GDX DBP DBC Dian L. Chu Forget About Natural Gas, Oil Field Services Sector Shows More Promise http://seekingalpha.com/article/160315-forget-about-natural-gas-oil-field-services-sector-shows-more-promise?source=feed 160315 The market's upward momentum this year has hordes of investors still looking for opportunities with good entry points. Finding them is tough because markets can turn quickly and many sectors are already fully valued. Nonetheless, with crude prices hovering around the $70 per barrel range, even with reduced demand, oilfield services remains one of the more promising sectors still with room to grow.

The following are some of the emerging trends setting the medium to long term outlook for the sector:

]]> Tue, 08 Sep 2009 03:16:50 -0400 Dian L. Chu The market's upward momentum this year has hordes of investors still looking for opportunities with good entry points. Finding them is tough because markets can turn quickly and many sectors are already fully valued. Nonetheless, with crude prices hovering around the $70 per barrel range, even with reduced demand, oilfield services remains one of the more promising sectors still with room to grow.

The following are some of the emerging trends setting the medium to long term outlook for the sector:


Complete Story »]]> BHI BJS BP SLB WFT SII NR RIG TKP OII TDW OIH PXJ XES Dian L. Chu The Alternative Fuel Vehicle and $300 Oil http://seekingalpha.com/article/158979-the-alternative-fuel-vehicle-and-300-oil?source=feed 158979 It is amazing sometimes that just by browsing the news you can piece together a totally different picture from a single original news item. Here are three items I came across in the past few days:

Pickens: Oil Will Reach $300 a Barrel

]]> Sun, 30 Aug 2009 05:19:36 -0400 Dian L. Chu It is amazing sometimes that just by browsing the news you can piece together a totally different picture from a single original news item. Here are three items I came across in the past few days:

Pickens: Oil Will Reach $300 a Barrel


Complete Story »]]> USO TM GRM GCS Dian L. Chu Oil and Natural Gas: Ratio Explodes in 2009 http://seekingalpha.com/article/158323-oil-and-natural-gas-ratio-explodes-in-2009?source=feed 158323 Theoretically, based on an energy equivalent basis, crude oil and natural gas prices should have a 6 to 1 ratio. However, due to various market characteristics, the price of oil has been following a pattern of 8-12X that of natural gas since 2006. Now, with oil spiking to its highest level this year and natural gas plummeting to a 7-Year low to below $3/mmbtu, the current ratio of WTI/Henry Hub price is close to 25 to 1, a historical high. (Fig 1)

Natural gas tends to be regionally based and is typically less impacted by external sources. Oil, on the other hand, is a commodity with global demand drivers; and along with gold, trades as an inflation hedge against a weakening US Dollar (click on chart to enlarge).

]]> Wed, 26 Aug 2009 13:50:39 -0400 Dian L. Chu Theoretically, based on an energy equivalent basis, crude oil and natural gas prices should have a 6 to 1 ratio. However, due to various market characteristics, the price of oil has been following a pattern of 8-12X that of natural gas since 2006. Now, with oil spiking to its highest level this year and natural gas plummeting to a 7-Year low to below $3/mmbtu, the current ratio of WTI/Henry Hub price is close to 25 to 1, a historical high. (Fig 1)

Natural gas tends to be regionally based and is typically less impacted by external sources. Oil, on the other hand, is a commodity with global demand drivers; and along with gold, trades as an inflation hedge against a weakening US Dollar (click on chart to enlarge).


Complete Story »]]> APA APC XOM CVX IEO IXC Dian L. Chu