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Mark Bern, CFA

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  • Profiting From Greece And ECB Events [View article]
    Gedankonomist. That will work also. Good move.
    Jan 26, 2015. 10:18 AM | 2 Likes Like |Link to Comment
  • Profiting From Greece And ECB Events [View article]
    Insightful - Thanks for the link. That wasn't up yet when I submitted this article late last night. I couldn't wait any longer and expect it to be published by this a.m. But I don't think it changes anything too much. There is still some sorting out of the final results to be done. If Syriza does, in fact, win a majority it should shake things up a bit more and this lull we are experiencing this morning should not last as long as it might otherwise, imo.
    Jan 26, 2015. 10:17 AM | 3 Likes Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    Latest exit poll results predict Syriza winning 150 of 300 seats in Parliament; one short of outright majority. We may have to wait until all the ballots are counted to find out if Syriza wins that one more seat needed to keep itself from having to share power and dilute its bargaining position.
    Jan 25, 2015. 02:21 PM | 3 Likes Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    Thanks, MJ. Always on the lookout for more info on this subject. An open mind helps find the right answers.
    Jan 25, 2015. 02:18 PM | 3 Likes Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    Only in our dreams, OG, only in our dreams!
    Jan 25, 2015. 12:15 AM | 3 Likes Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    I am not 100% positive this is how it works, so somebody can correct me if they know for sure.

    When the Fed creates currency it has a paper entry on the other side of the asset creation, not a liability, per se (the Fed doesn't owe anyone for the currency it prints). As the assets are extinguished or transferred to the US Treasury (as in payment of excess interest income not needed for Fed ops.) the paper entry is offset as assets are removed from the balance sheet.

    So, as assets on the Fed balance sheet mature, the Fed has two options: extinguish the currency by removing the assets from its balance sheet and reversing the offsetting paper entry; or it can transfer the cash received from maturing securities to the US Treasury which reduces the balance sheet and then offset the original offestting paper entry.

    Currently there are about $2 Trillion of securities on the Fed's balance sheet scheduled to mature over the next 10 years (from St. Louis Fed page)

    Of that total, more than $1.4 trillion will mature over the next five years. The average is about $280 billion a year that will mature. I suspect that the Fed would prefer to extinguish the currency, but that our political leaders will want to use that "windfall" to reduce the federal deficit so they won't have to make difficult decisions and still look good. But that will leave the currency in the system.
    Jan 24, 2015. 07:51 PM | 3 Likes Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    OG - here is the shareholder page at the Swiss National Bank site:
    Jan 24, 2015. 07:26 PM | 3 Likes Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    SHB - I concur (not that I am any smarter). But deflation is the disaster that CBs are trying desperately to avoid with all the QE and money printing. You notice how calm inflation remains despite all the printing?

    I look at commodities as the canary in the mine shaft. If the broader commodity market continues to fall somethings has got to give; and it won't be pretty.

    Some folks have declared that they think Oil at $30 or below would bring about a global recession. I think that if oil hits $30 or below it won't be the only commodity to tank. And if commodities, as a group, tank, a global recession is a good bet. But if broader commodity prices remain at current levels while oil alone tanks, a global recession is not inevitable.

    If either happens, though, CBs may pull out all the stops to fight deflation and the ultimate outcome could very well be inflation. That leaves PMs as a hedge against the worst case scenario. If CBs do not react, then PM would likely go down along with the rest of the commodity sector, imo.
    Jan 24, 2015. 07:22 PM | 4 Likes Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    DG & LT - I totally agree. Opportunities are coming but may not be with us yet. If oil gets near $30/bbl it won't stay there for long (a few months at most) but the climb may not be quick either. Then again, who cares as long it is climbing if one gets in near the bottom (shortly before or after).

    One point I think is missed: nat gas exporting will begin later this year and continue to rise over the next two years, at least, as more export terminals already approved with construction in progress will come on line. The more we export, the less imbalance between US nat gas price and EU/Japan, etc. US nat gas price is very likely to rise while foreign nat gas will fall somewhat. But I don't think we can reach parity due to the cost of transportation. It will remain $1-2 dollars lower here, imo. But that still represents a significant rise in prices here as the two nearly meet in the middle. Cheap nat gas under $4 mcft will soon be a thing of the past. And nearly all of that increased revenue will fall to the bottom line on existing wells.

    I am looking at a handful of nat gas royalty trusts that I think will see significant increases in distributions once this all plays out; will publish link(s) to articles when they are up and give all here a heads up when I submit.
    Jan 24, 2015. 07:14 PM | 5 Likes Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    OG - Very good info - thanks! The way I see it then is that the bottom could/should occur sometime between now and the June OPEC meeting. That is, unless the new king and oil minister heir apparent decide that come June there could be a change in policy and try to "talk" the markets higher with rhetoric between now and then. Thus, your advise to watch for a bottom or channel to form is well founded, IMHO.

    The only problem I see (relatively low probability) is if the Saudis use rhetoric to prop prices and then sell some future production into the price rise to protect themselves after June; then announce no change in policy is imminent. Then we could see another bottom occur during the summer months. But that should be short-lived since summer is the higher usage period. OTOH, if production is still higher than demand over the summer then the bottoming action could become dramatic and provide an once-in-a-lifetime opportunity.

    I won't wait if I see a bottom forming before June. But I will want to watch the futures volumes on oil and refined products leading up to June just to be sure. And I'll unload immediately if the new Saudi leadership announces a "no change in policy" come June/July.

    I studied OPEC as an undergrad in the mid-1970s. I learned not to listen to what they say but rather to watch what they do because OPEC usually says it will do one thing to prop prices and then do another that cause the opposite effect whence it becomes apparent. This time, though, I believe the Saudis have multiple agenda foci: reduce fracking in the US, slowing down Iran and penalize Russia for its Middle East meddling. Low oil prices accomplishes all three if the Saudis can keep it up long enough. The question is: does the new leadership have the anatomy to follow through?

    Just me two cents ($3 with inflation).
    Jan 24, 2015. 07:02 PM | 4 Likes Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    OG - Right! And I'll bet it won't be the last, either.
    Jan 24, 2015. 06:42 PM | 3 Likes Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    SHB - Good call on EEM. Over the next year or so I expect a continued flight to safety and I have noticed that whenever (over the past 2 years or so at least) equities go up globally, SPY has generally done better than EEM; likewise, when global equities fall, EEM usually falls more than SPY. You might want to do a spread short EEM and long SPY for as long as the currency wars continue. I think the US$ and our equities will benefit from foreign investors piling into US markets to weather the storms caused by falling currencies relative to the US$. Just a thought.

    I also should credit many here, especially MJ, for sharing that same view on flight to safety. I don't think we can get rich on this trade, but I do think it is a good way to park some cash for a very likely positive return while we wait for things to settle down. That is, if we are right on the continued flight to safety from foreign investors.
    Jan 24, 2015. 06:41 PM | 4 Likes Like |Link to Comment
  • 2 ETFs To Profit From The Greek Debacle [View article]
    This article is now nearly 3 years old! But since there is another potential Greek event about to happen (and the majority of people reading my articles today are coming to this one) I will do my best to keep track of the election results on Sunday, January 25, and provide my views on how to profit from the results. I will post a link to the article here as soon as it goes up, hopefully by early Monday morning. Not much to be done before that. And if the election keeps the current leaders in place, there will probably be nothing significant, in terms of trading, to profit from the outcome. If Syriza wins I will make two or three short- to intermediate-term recommendations.
    Jan 24, 2015. 06:33 PM | 1 Like Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    I'd really like to pick up some KMI if the price drops enough. I'll be watching and will sell some otm calls if it gets much lower.
    Jan 21, 2015. 11:21 PM | 3 Likes Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    Seems that investors may also think KMI overpaid for Hiland Partners pipelins at $3B. But KMI track record is good, so...

    Probably not much attributed to purchase; mainly the earnings miss, as you mentioned, Maya.
    Jan 21, 2015. 05:13 PM | 2 Likes Like |Link to Comment