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  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    It's getting quite ugly now. Both sides are so deeply entrenched that I see no way out that will not cause damage. This is particular true on the political side. The EU can't cave because of the other debtor nations. The Greeks can't cave because doing so should cause their current government to implode.

    So either someone comes in with a chunk of cash to buy time for further negotiations, or we have a credit event. I am seeing "leaks" presumably from the German Fin Minister that the Germans are preparing a plan "B" that involves a Greek default. I see a leak like that as mostly gamesmanship designed to ratchet up the pressure a bit more.

    Anything I missed?
    Apr 26, 2015. 12:22 PM | Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    Correction… I found the strongly negative post on Bloomberg that ZeroHedge draw their article from… So the super critical comment did come from Bloomberg. I think that is more in tune with my opinion of Bloomberg.
    Apr 24, 2015. 12:41 PM | 2 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    The EU/Greek circus is on full game again as deadlines approach and Greek liquidity diminishes. Sorry for the length of the post, but this situation is getting more and more complex. Here is a one-sentence review of my opinion:

    Watch what the ECB actually does to get a picture of what is really happening.

    Starting off we have this article on ZeroHedge that presumably draws mostly from Bloomberg.

    Futures Fizzle After Greece "Hammered" In Riga, Varoufakis Accused Of Being "A Time-Waster, Gambler, Amateur"

    Actually, the Bloomberg article that the ZeroHedge piece is presumably based on is not nearly as negative / inflammatory as the ZeroHedge piece.

    That Bloomberg article says that one of the key points of negativity in the negotiations is that Greece is attempting to end-run the Troika and the finance ministers with a Political solution.

    Actually, I believe that if a solution is going to happen, it has to involve modification of intransient requirements by the lending institutions with some degree of latitude for what is and what is not practically and politically possible in Greece. This brings up the very next article over on Bloomberg.

    "EU’s bad faith in Greek talks exposes true motives"

    According to this article, the campaign to bring Greece into line is not just about economics. It's power politics designed to crush any "democratic" voices that challenge the EU’s reining economic orthodoxy.

    Economist Mark Weisbrot, co-director for the Center of Economic and Policy Research, posted a blog this week titled, “European officials may be pushing regime change in Greece.

    Weisbrot cites consistent efforts by European authorities, even before the Jan. 25 election that brought Syriza to power, to destabilize the Greek economy, from threats that prompted capital flight to cutting off ECB funds to Greek banks.

    All this as EU “negotiators” refused to countenance the slightest modification in the onerous austerity terms imposed on the preceding government as a condition for the bailout funds Greece needs to avoid default. So basically, the EU has no intention of dealing with the new Greek government.
    I think the two Bloomberg arcticles provided a more balanced perspective on the situation relative to the single ZeroHedge piece.

    I also think we will be able to determine if Weisbrot's hypothesis about the EU is correct by watching what the ECB does. The ECB is Germany/ Merkel. The ECB recently threatened to increase collateral requirements for additional ELB funding to Greek banks. If that happens, than all the glad-handing by Merkel is political face-work.

    Watch what the ECB does to get a picture of what is really happening.
    Apr 24, 2015. 08:52 AM | 4 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, March 18, 2014 [View instapost]
    From WallStreet Breakfast:

    China said Thursday it will scrap export duties on rare earths and some metal products, including molybdenum, tungsten and some aluminum products, effective May 1. Beijing is attempting to boost exports, which fell 15% Y/Y in March. Currently, China levies export duties of 15-20% on rare earth products, while molybdenum products carry export duties of 5-20%.
    Apr 23, 2015. 08:23 AM | 4 Likes Like |Link to Comment
  • QuickChat #280, April 16, 2015 [View instapost]
    I was thinking of it in terms of an economic activity indicator Maya. If economic activity as measured by an indicator like SCFI is down, than need for oil shipments might be down as well.

    Regarding the storage at sea Contango play, I looked at that a bit about a month ago, but I did not publish my results. My conclusion was that the Contango play is more risky this time than in 2009. Here is the gist of my reasoning.

    Back in 2008, the average price of oil was $100 per barrel. It dropped to $58.76 in 2009 as a result of a glut of oil. But the price recovered by one-third to $77.11 in 2010 and another 18.5% in 2011.

    Back in 2009, the cost of storing on supertankers worked out to about 80 to 90 cents a barrel each month. This figure came from Denis Petropoulos, head of tankers at Braemar Shipping Services Plc, the world’s second-largest publicly traded shipbroker. Here is the link:

    So every year 2009 oil was stored at sea it cost around $10.2 per barrel in tanker costs. (I used an average of .85). So if 2009 oil bought at $58.76 was sold at the end of 2010 you made ($77.11 - $58.76) $18.35 - (12 X .85) $10.20 = $8.15 per barrel profit.

    If the oil was held and sold at the end of the second year of storage you made $32.63 - $20.4 = $12.23 per barrel.

    However, if held for another year, you ended up with a loss of $30.19 - $30.60 = -$0.41 per barrel.

    So profitability in the Contango play was dependent on how long the price of oil was depressed, when the oil was purchased in the Contango cycle and how much it costs to rent a super tanker. Back in 2009, the Saudi's reduced the amount of oil they were pumping. So the Contango time was short.

    In this situation, it's apparently in the interest of the Saudi's to continue pumping oil. So it might take some time for the price of oil to recover. As the profit margin on the stored oil drops, at some point, that oil might have to get dumped back into the market. This would tend to extend the Contango period or force larger pumping restrictions...

    I hope this is helpful.
    Apr 22, 2015. 06:50 PM | 4 Likes Like |Link to Comment
  • QuickChat #280, April 16, 2015 [View instapost]
    Maya, SiliconHillbilly posted this on the "Stability Of The European Union" concentrator this morning. It might explain what happened to FRO this morning.

    "from Wolf Richter article:
    "The Shanghai Containerized Freight Index (SCFI) that tracks shipping rates from Shanghai to Northern European ports plunged 14% from last week to $399 per TEU ...and is down... 67% from the glory days just a year ago."

    I dug out a three year chart of the SCFI that shows the debacle. Look at the bottom of this link:
    Apr 22, 2015. 01:23 PM | 4 Likes Like |Link to Comment
  • QuickChat #280, April 16, 2015 [View instapost]
    I am thinking of a list Mercy. The problem with just making comments in the QC is they scroll away over time. Otherwise, I would have to depend on my memory.

    I totally agree with you on Reuters. That is my primary go to site for news in the EU. For example, if I see an article on ZeroHedge that references Reuters, I always go to Reuters to read an unadulterated version.

    Two sites I have little confidence in are Bloomberg and The Street.

    Bloomberg reminds me of the site referred to in the line by Gordon Gekko in the WallStreet movie: "Then call this number -- 555-7617: tell the man "blue horseshoe loves Anacott Steel"
    Apr 22, 2015. 12:54 PM | 5 Likes Like |Link to Comment
  • QuickChat #280, April 16, 2015 [View instapost]
    WT, I was thinking of us doing it. We start up an instablog and we enter the info in the comments. The host copies them to the header. The people I trust are the people that post in the QC.
    Apr 22, 2015. 11:55 AM | 6 Likes Like |Link to Comment
  • QuickChat #280, April 16, 2015 [View instapost]
    I wonder if it would be useful if we kept track of what news sources post WS crap and what news sources are posting what we believe to be reliable information?
    Apr 22, 2015. 11:12 AM | 4 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    Reuters) - Greece hopes to get 2.5 billion euros ($2.7 billion) by forcing public entities to lend to the state, giving it enough room to meet its obligations through the end of May, the deputy finance minister said on Wednesday.
    Money to kick the can another 30 days to June.
    Apr 22, 2015. 10:39 AM | 4 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    Good article Silicon. Here is a link to a three year chart for the Index

    The chart is at the bottom of that link.
    Apr 22, 2015. 06:57 AM | 3 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    It's getting very interesting now Mercy.
    Apr 21, 2015. 12:38 PM | 2 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    Greek Prime Minister Alexis Tsipras is expected to meet with German Chancellor Angela Merkel on the sidelines of a European Union summit to be held in Brussels on Thursday, only a day ahead of the crucial meeting of Eurozone Finance Ministers that will assess the progress made by Athens in its reforms list.

    A hint of concession possibilities, or an opportunity for further threats?

    Tightening the screws:
    This morning, White House advisor Furman says "GrExit" involves large tail risk, could impede investment, create uncertainty in markets and threaten economic recovery.

    UK Chancellor George Osborne was a bit more perilous :
    “The situation in Greece is the one at the moment that’s the most worrying for the world economy,” Osborne told reporters.

    “A misstep could easily return the world economy to the situation we were in 3 or 4 years ago”
    Apr 21, 2015. 12:37 PM | 3 Likes Like |Link to Comment
  • QuickChat #280, April 16, 2015 [View instapost]
    Smart got you in the stock. Lucky made you quick money. Very nice :)
    Apr 21, 2015. 11:55 AM | 4 Likes Like |Link to Comment
  • Swine Flu, MERS, Ebola And Medical News Concentrator January 1, 2015 To ?? [View instapost]
    First thing to do is check with your broker to see if you are eligible as a US stock holder. The ASX is sometimes a bit different. I only looked at your posted explanation of the deal, but it appears the options are a sweetener for the regular offering among current shareholders. If so, I would try to load up the truck. Those five year options in particular look like major money to me LT.
    Apr 21, 2015. 11:33 AM | 3 Likes Like |Link to Comment