Mark Anthony

Oh Yeah, The Economy Is Improving

Karl:

You have been detached from physics for too long and probably forget some of the stuffs. You need to pick up your graduate school books on physics again. Many people exressed skeptism against Cold Fusion, but violation of thermal dynamics or quantum mechanics is not one of them. Most cited reason is how does the nucleid penetrate the huge Coloumb Barrier. Quantum mechanics is precisely the reason that you have a non-zero possibility of penetrating a potential barrier which you wouldn't be able to do under classical mechanics.

Cold Fusion is REAL. Hundreds of scientists persisted in Cold Fusion experimental research for 20 years with zero government funding support, many former skeptics have been converted into supporter after they saw the experiments themselves.
newenergytimes.com/v2/...

Do you suppose all these scientists have been mentally ill for 20 years? Or they come together to HOAX the world for 20 years with no money to gain and their own career to lose? Watch this CBS 60 Minutes Program aired on April 19, 2009:
www.cbsnews.com/video/...

There have been misterious attempted supression of the CBS 60 Minutes program, by invisible hands:
newenergytimes.com/v2/...
newenergytimes.com/v2/...

Note the one skeptics in the program, Dr. Garwin himself, visited the same Cold Fusion lab some years ago, on a mission assignment by the Department of Energy. He scrutinized the experimental details and submitted a report admitting that the excessive heat is real and that the amount of excessive heat far exceed any quantity that can be explained away by chemical processes, meaning they must be nuclear in nature.
newenergytimes.com/v2/...

Dr. Richard Garwin's deny of something he saw with his one eyes a few years ago was rather dishonest and disingenuous. He destroyed his own credibility, which is rather unfortunate for such a reputable scientist.

stockology.blogspot.co...

On Nov 11 09:07 AM Karl Denninger wrote:

> "Cold Fusion" is a farce.
>
> There are many who have peddled violations of the laws of thermodynamics
> (or quantum mechanics) over the years, but they have all - every
> one - been scams.
>
> That's because those are laws, not suggestions.
>
> Anyone putting forward such a "solution" has instantly defined themself
> as a kook.

Oh Yeah, The Economy Is Improving

Karl:

Warren does not know anything more than what many of us already know. Peak Oil is a fact, not an internet meme. We peaked already in 2005. Each and every one of the world's top 20 largest oil fields are in decline, some very step.

Mexico's Cantarell, world's 2nd largest oil field, was still producing as much as 2M barrels per day as recent as 2005. Now it is less than 0.7M barrel a day and still dropping at an annual rate of 30% decline. Some Texas oil fields have a water cut of 99%: 99% of what comes out is water injected to get the oil out, only 1% is the oil. I recomment every one read Matthey Simmon's "Twilight in the Desert".

In a hyper inflation, you will not pay $6 per gallon for gasoline, you will pay much higher. Some people will simply not be able to afford gasoline any more. That's the whole point, demand destruction must occur. Some must be priced out of the market.

The Oil Drum is a good site to read discussions on Peak Oil:
www.theoildrum.com/

I believe there is only one salvation from the Peak Oil crisis: Development of Cold Fusion, and a precious metal called palladium, element No. 46. Read this web site:
lenr-canr.org/News.htm

Collapse of the dollar looks like imminent now. This web site allows real time tracking of the US dollar index:
quote.goldseek.com/dol...

Does Disaster Loom from Dollar Funded Carry Trades?

Karl:

I am not counting on Bernanke doing or not doing anything. I am counting on basic free market priciples work and it must lead to unavoidable collapse of the US dollar. It no longer matters what Bernanke does, he, or any one on this planet no longer has the power to salvage the US dollar. Doesn't matter it's Bernanke, Fernankie, Pernankie, Vernankie be the FED chairman.

The analogy is if Bernankie has terminal cancer, it doesn't matter a bit if he shot himself or not in the mouth.

I agree with your last paragraph. But your better bet is get your money out of the country before it is too late, and hopefully move to a safe haven place before TSHTF. That is exactly what many smart rich investors have been doing, like Jim Rogers. This is the reason why the hot money is MASSIVELY flowing out of the USA and into emerging markets. This massive outflow of capital money is the fundamental reason why the US dollar is DOOMed.

seekingalpha.com/autho...

Just don't know how long can one survive, holed up in his/her residence with some guns and munitions, if thing turn to that bad. A few days, maybe. A few years, tough. Don't count on that. Fleeing and getting your money out of the country is the best option.

On Nov 10 08:17 AM Karl Denninger wrote:

> Brad: Don't be so sure about "The Amero".
>
> Those who are sure that the dollar will swirl the bowl and flush
> are counting on Bernanke, at the end of the day, inserting the gun
> in his own mouth and pulling the trigger.
>
> He might shoot himself, but I argue that if he does it will be by
> accident, not intent. If there is a collapse in our currency it will
> almost certainly come with violent "regime change"; the least of
> your problems will be your investments.
>
> As I am known to say: "If you think you will need gold or silver
> you will need lead and tubular steel more."

Breaking News: Chinese Real Estate Crash

Yeah at the time I was really amazed. The whole 12 story building is still in one piece and there were hardly any cracks. How many times do you see a 12 story building fall down yet remains one piece. If there were residents inside and they were wearing safety belts as they lie on beds, they would be just fine, although I wouldn't try it at home :-) Amazing rigidity of Chinese engineering technology, isn't it? :-)

But maybe the building remained one whole piece only because the ground is simply too soft. There is a saying you can not build a mansion on beach sands. Shanghai, the whole place is basic a giant ocean beach. The whole place is simply not suitable for any high raise building. I don't know how deep you have to go to reach rock layers? A kilometer? One mile? Even if you can reach the rocky layer, consider the depth, the fundation would still be shacky, if you just think about the geometry.

Breaking News: Chinese Real Estate Crash

Ha so that's breaking news in MISH's time scale? That actually happened 3 or 4 months ago. If 3 months old news is breaking news, I don't know what you call news that just happened an hour ago.

Unemployment, Retail Numbers Don't Add Up

You asked some good questions.

Some part of the retail sales are inelastic demands. For example gasoline. You need this many gallons of gasoline to drive to and from work, and you just have to pay. There is no way to cut corner. For another example, toilet papers. I don't think any one can cut that. Haven't heard any one who stop using toilet paper and use just water. Have't heard any one who use less squares of TP each time either.

Maybe it's pent-up demand. You decide to say money, so each time you go grocery shopping you decide to buy less of the items you need. Buy a 6 roll pack of toilet paper instead of a 12 roll pack. A smaller bottle of detergent instead of a bigger one. But the consumption hasn't really gone down. So when you run out of stock you end up buying even more to re-stock.

Another explanation is the credit card industry is being screwed. As credit card companies hike rate to unbearable levels, some people may just decide to spend their cards to the max limit, and then go default on them. This too can create an artificial consumption level.

There is no way that consumers lost jobs and have less income, they are saving up more money, but managed to pay higher credit interest and also pay down the debts, too, and at the same time have the same amount of money to consume.

Does Disaster Loom from Dollar Funded Carry Trades?

How much money does Goldman Saches borrow?

The biggest US dollar carry trade borrower, is the US federal government itself, to the tune of $12 trillion. No one else even borrow any money remotely close to that amount. The unwinding of the US government's carrying of its debt will destroy the dollar itself.

That's the biggest bubble in the marketplace.

On Nov 09 03:37 PM Income Tax wrote:

> Mark Anthony,
>
> You, or me, cannot borrow at .25%, I wish I could, but GS, MS, BOA,
> Citi, and traders at London, can, via banks and bonds, and many instruments..
> Basically, they are robbing savers (who get 0%) and government (who
> take tax payers money and give it out at 0%). They want to save the
> housing market, the unintended consequence is that the liquidity
> is not going to housing, or business, but liquidate speculative asset,
> like Gold, Stock
>
> I am not saying short stocks,, it might go a while. but bubble will
> burst for sure, when that is time you go out.. just follow the market..
>
>
> Why is that for sure as PE is high, and unemployment won't get better
> as most unemployed are less educated, with housing, manufacturing
> jobs out to China, no way, employment get better. Which means less
> revenue for companies, though they can get better earning by cutting
> staff, and sell abroad..

Buffett's Burlington Buy Is Really a Bet on China

Mayascribe:

I was impressed reading PCX's recent earning's conference and the CEO says they are starting to sell metallurgic coal to China. That was well before Warren Buffett's railway buy. The CEO's claim is one piece of news that surprised me a bit and changed my prospect of US coal towards the bullish side, especially metallurgic coal.

Buffett's Burlington Buy Is Really a Bet on China

Every one agrees Warren Buffett's railway move is ill times and way over-priced. As a patient investor Warren would normally wait for the best pricing before he buys, he rarely buy at the top of price.

There is only one explanation, that is, an urgency he needs to make the move quickly. This is a big bet on US dollar bear and US export economy bull, and he knew he needed to move quick. He is too big to make quick moves in smaller players, like dry bulk shippers. A big railway play is where he can bet $44B at a time.

Does Warren see an imminent collapse of the dollar, and the inevitability that we must export a lot of raw materials to China to balance the trades?

On Nov 09 01:59 AM TraderRob wrote:

> Buffet's move here is indeed an "all in bet", perhaps on China, which
> may or may not instill lasting confidence. But it should be noted
> that his purchases of GS and GE during late fall of last year didn't
> have any major direction changing effects on the stock prices. In
> the end it's all about the fundamentals.
>
> The premium paid for BNI was particularly hefty and suggest that
> we're all missing something that the Oracle isn't. It's not a complex
> move, because Warren is a simple man, but the gamblin' rhetoric expressed
> was not particularly directed at any results within the next three
> or even five years.
>
> I don't suspect that the U.S. economy will wither away through the
> shroud of darkness, but I do expect for there to be particularly
> difficult times ahead for the rails and transports as a whole. Warren
> is a Value Guy to his death and sees a winner in Burlington, but
> we should all ask ourselves just how far back down the rabbit hole
> we'd be willing to follow him if/when this thing rolls over.

Buffett's Burlington Buy Is Really a Bet on China

Damn:

It is hard to make a move before the market does. I have been watching PCX closely for nearly 4 months (since the bottom at around $5 in July). Never get a good chance to get into this coal play. Warren Buffett's bet on BNI adds some urgency to get into coal plays. But the market simply would not co-operate with me.

I am determined to buy some PCX on the next significant dip. For now, dry bulk shippers are still dirt cheap to buy. Better buy before Warren Buffett makes his next move. If he bought railway, dry bulk shippers are the next logical target.

Not sure if Warren has spare cash left to buy shippers, after he spent so much on railways.


On Nov 06 07:22 PM Mark Anthony wrote:

> Yes! I think more and more people are starting to get it:
>
> Railway transportation
> = Shipment of Coal Export to China
> = Needs to buy US coal producers (PCX, JRCC, ANX, ACI...)
> = Needs to buy dry bulk shippers (EXM, EGLE, TBSI, DRYS, etc.)<br/>
>
> Dry bulk shippers is one of the things I am most bullish on. Another
> is one critical precious metal that China has ZERO product, which
> China desperately needs to hoard, and which America has one of the
> world's most unique producer:
>
> The palladium metal, and Montana based SWC, Stillwater Mining.<br/>seekingalpha.com/autho...
>
>
> One thing I do not understand is Buffett's timing and pricing of
> his BNI acquisition. Maybe there is an urgency for him to get out
> of the US dollar cash positions ASAP, otherwise there is no good
> explanation of his bad timing and pricing.

Roubini: Commodities Due for a Correction

The growth in China is more likely 9% for 2009. Don't know what's the number for India, but should be good, too.

The growth in China is NO WAY state-sponsored. China tried state-sponsored economy in the first 30 years of the founding of PRC, it did not work. In the next 30 years China achieved a lot by backing away from state-sponsored economy. The govern executed a series of economic relaxing policies, so outside investments poured in and the economy boomed. It's external investment sponsored growth, NOT state-sponsored growth. You get it totally wrong.

Read how free market economy works and why the money is flowing into China:
seekingalpha.com/autho...


On Nov 08 01:32 PM bkalahas wrote:

>
> Mark,
> There is a difference between the will/policy to grow and the capacity
> for growth. What you have been refering to is the capacity for growth
> in China followed by India. Probably China has better economic policies
> than India but neither country can grow at a GDP growth rate more
> than 6-8%, primarily due to state-sponsored growth limits.
> Ramanathan
>
> On Nov 06 07:06 PM Mark Anthony wrote:

Does Disaster Loom from Dollar Funded Carry Trades?

Let me explain again why US dollar carry trade is virtually NON-EXIST.

The yen carry trade existed because of easy money. It's easy to borrow yen at zero% interest. The same does not exist for US dollar today. The banks are not lending. Getting a 5% mortgage rate to buy a house is hard enough. Stock margin accounts costs almost 7% in interest. I would LOVE to borrow money from the FED at 0.25% interest. I would love to borrow any money at 3%, 4% or 5% to buy precious metal. Tell me how I can borrow the money! The fact of the matter is this easy money is simply not accessible to most people.

So where is the US dollar carry trade? It hasn't even started yet!

Does Disaster Loom from Dollar Funded Carry Trades?

Karl:

Do you actually believe in Roubini's nonsense that there is a big bubble in US dollar carry trade? That professor guy at least recognizes that he can not touch any stock himself, or he will lose his pants. He is in his fantasy dream. The real investors, mean while, must make real investment decisions based on facts, not fantasies.

How many people actually borrowed US dollar money to buy equity or commodities? How many actually used credit cards to buy gold and silver? Did India borrow money to buy gold? Did China borrow dollars to buy commodities?

Why would any one believe Roubini's fantasy which is not supported by any data or fact at all.

There WILL be a US dollar carry trade. The dollar will collapse at the end. But we have hardly started yet. The US dollar carry trade will be a "short-to-zero" trade. There are very very few actually doing it right now.

Warren Buffet's bet on railway is actually a bet on China. He is betting that the US coal will be transported to west coast and then shipped to China. So if you believe in his bet, buy dry bulk shippers.

Your better bet is buy something that China has zero but America has, and something extremely critical to a big nation's economy. The precious metal palladium is the best China commodity carry trade bet, as indicated by Andrew Snyder:

seekingalpha.com/autho...

The collapse of trucking will mean famine on American soil. I hope not. Some truckers will go out of business. But the bulk of trucking will remain in business. The real collapse will be the lifestyle of people solo-driving a car to and from work 50 miles away every day. People will have to settle for car-pool or public transportation.

Painful Unemployment Report

On Nov 06 11:36 AM Karl Denninger wrote:
> It is not a lagging indicator for loan defaults - and never has been.
>
> For consumers to consume they must have income. Can't get around
> this - defaults and thus economic slowdown take a few months to start
> to ripple through the economy once employment starts to slack, but
> when it turns up the removal of the downward pressure on loan (credit)
> performance correlates almost exactly with the resumption of positive
> economic activity.
>
> We have NOT turned the corner.

Absolutely FALSE. A consumer is a consumer and is called a consumer because he/she consumes something. You don't need to have income to consume. All the billionaires who have net loss, versus net income in the past years, have they stopped consuming because they have no income?

A consumer only needs to be breathing, to be a consumer. That includes every one from new born babies to people who have retired, and people who are on unemployment benefits. Only when a consumer stops breathing, will he/she stop being a consumer.

The dramatic drop in consumer credit, is actually a good thing. Don't kid yourself, Karl, you think all the people who lost their jobs, and that credit card companies bump up interest to 30%, those people without job and without income are desperately depleting their non-existant savings to pay down their debts, and mean while these people are not eating anything or consuming anything?

No, these people simply stopped paying the credit card company, forcing banks to write down losses. Any dollar that a consumer does not spend paying the banksters, is a dollar the consumer can spend buying things he/she and family needs.

So in a sense that is good. Instead of bailing out banks, the people are bailing themselves out using their own methods.

Buffett's Burlington Buy Is Really a Bet on China

Yes! I think more and more people are starting to get it:

Railway transportation
= Shipment of Coal Export to China
= Needs to buy US coal producers (PCX, JRCC, ANX, ACI...)
= Needs to buy dry bulk shippers (EXM, EGLE, TBSI, DRYS, etc.)

Dry bulk shippers is one of the things I am most bullish on. Another is one critical precious metal that China has ZERO product, which China desperately needs to hoard, and which America has one of the world's most unique producer:

The palladium metal, and Montana based SWC, Stillwater Mining.
seekingalpha.com/autho...

One thing I do not understand is Buffett's timing and pricing of his BNI acquisition. Maybe there is an urgency for him to get out of the US dollar cash positions ASAP, otherwise there is no good explanation of his bad timing and pricing.