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Michael Parmar  

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  • The Fed Is Changing Gear [View article]
    bg, you are right about the underlying rate being much higher, lets just say the measured rate tracked by the FED is at that level.
    Aug 4, 2014. 12:53 PM | 1 Like Like |Link to Comment
  • The Fed Is Changing Gear [View article]
    Just some guy, thanks for your comment.

    Indeed, because they bought those trillions in real estate, they don't have to worry about it again.

    Think about it.
    Aug 4, 2014. 10:51 AM | Likes Like |Link to Comment
  • The Fed Is Changing Gear [View article]
    Ptstanford, thanks for your comment and sentiment, i share it
    Aug 4, 2014. 10:43 AM | Likes Like |Link to Comment
  • The Fed Is Changing Gear [View article]
    The Fed's adopted its EXTREME policy to keep inflation expectations anchored at 2%, not create new expectations of lower than 2% or deflation.

    IT is still worried about this, hence it is still where it is today. But once inflation is heading beyond 2% it will have evidence that people are starting to build inflation expectations beyond 2%, and MUST act to keep them anchored.

    The FED is not anyone's friend, the FED has policy objectives.
    Aug 4, 2014. 10:41 AM | Likes Like |Link to Comment
  • The Fed Is Changing Gear [View article]
    Many thanks for your kind words.

    If I had said it I would have been shot down for blowing my own trumpet.
    But I totally agree with you. This is IMHO, the most important issue in the market today.

    Many thanks.
    Aug 4, 2014. 10:37 AM | Likes Like |Link to Comment
  • The Fed Is Changing Gear [View article]

    Many thanks for your comments. I shall respond to each of your points in turn.
    1. Mortgage applications are not the Feds monetary policy goal. It noted that the housing market remains slow to RECOVER ( not collapse)

    2. Indeed the labour market has seen a structural shift (My point as well) and why unemployment has taken so long to recover, and why the Fed still has rates where they are, not at 2.5-3.0% The Fed noted the state of the labour market but did NOT say it needed fixing, on the contrary its comment was more like " sorry guys but thats the way things are"

    3. See point 2: structural shift in long term unemployment/nature of unemployment. In my view the Fed is somewhat optimistic to think the long run unemployment rate went up from 4.5 -5% pre 2008 to 5.5-5.8% But I guess it is thinking even longer term than I am by factoring in future growth in government and lower overall productivity in jobs in that sector)

    4. See point 2:

    Basically, labour markets and wages (and ultimately inflation and more importantly inflation expectations) do NOT depend on the long term unemployment rate and are moderately affected by the short term unemployment rate. Which is now LOW.

    5. Yes it is, median incomes are down, household income security is down. That will get worse if inflation rears its head. More than 3/4 of the world population lives in less income security environments and at far lower income levels than the US - AND AT HIGHER INFLATION RATEs!

    We are talking about inflation (rate of change in prices, real wages) not levels.

    6 & 7 are not an issue for the Fed, they will never go insolvent nor let the US currency become insolvent. ALL THE MORE REASON TO DEMONSTRATE that it has value by preserving it through a fight against prices.

    The FED now has ONE target: to keep inflation at 2%, where it is now,which is currently edging up beyond that at the moment.

    You appear to have a fundamental misunderstanding of monetary policy, and this article was aimed at precisely people like yourself who have investor complacency and interest rate insensitivity.

    Good luck
    Aug 4, 2014. 10:35 AM | 2 Likes Like |Link to Comment
  • Reaching For Yield [View article]
    Owen, thanks for a great article.

    I was curious to see what your WMA US composite risk indicator looked like with the periods of QE overlaid? And also for the European one, connect it to monetary policy?

    If you cant put it into comments or perhaps write short follow up article, would you be kind enough to message me with the graph?

    Many thanks for the insights in this article
    Jul 29, 2014. 10:53 AM | Likes Like |Link to Comment
  • Kenmare Resources: A Speculative Call On The Ilmenite Price [View article]
    As per my last point, KMR has received a take over offer.

    Share price > + 20% since this article and my comments were published.
    Jun 27, 2014. 04:59 PM | Likes Like |Link to Comment
  • Kenmare Resources: A Speculative Call On The Ilmenite Price [View article]
    Good article, a few additional points to note:

    1. KMR has covenants tying its cash use. Hard to establish FCF but you have done a great job stripping the company to the bare bones underpinning its enterprise value

    2. Across the Indian Ocean on the Australian western continent almost matching the Latitude of the Moma mine there is purportedly a big prospect of illmenite - not sure the state of this development. In current market conditions unlikely to have received funding but also unlikely to better Africa mining costs.

    3. Some KMR competitors earlier in the year shut down production temporarily, not sure if they restarted as yet,

    4. KMR keeps producing, investors should track its shipments which are reported every half year on the KMR website. The relationship to sales (top line revenue) from these shipments contains an additional level of opaqueness given the nature and structure of some of the contracts based on prepayments, mid payments, balancing payments, sometimes with CFD components.

    Overall this is an underrated company, good operations management (not sure about strategic management, as maybe the expansion was arguably not justified in hindsight).

    Nevertheless I am watching it closely and have a small position in there (currently underwater).

    I am taking a long view because the punchline is as you say: this is a "go to" supplier.

    Share register last time I checked (6-9 months ago) had a number of big investors with large positions (e.g Blackrock, Nordic bank).

    As you say, low share price, heavily indebted. Any small prospect of improving operating margins will swing the share price from its multi-year current lows, any deterioration will lower it further.

    And then there is the issue of such a low share price attracting a return from a potential takeover for anyone that can refinance the debt at a better rate than KMR
    Jun 12, 2014. 07:39 PM | Likes Like |Link to Comment
  • Why 'Too Big To Fail' Banks Remain A Disaster Waiting To Happen [View article]
    Great Article. People like Lenny on websites like seeking alpha help us to keep an eye on things that could make a big difference to all our lives.

    Jason B, ratings agencies only publish "opinions". go watch "inside job"
    May 4, 2014. 05:47 AM | Likes Like |Link to Comment
  • Zinc And Aluminum Exploited By Middleman Vigs [View article]
    LME progress, in the right direction. But a long way to go before implementation and reduction of bottlenecks.

    I liked the comment in the Reuters article " bottlenecks are just traders moving stock from one warehouse to another in response to incentives"....
    Nov 11, 2013. 06:32 AM | Likes Like |Link to Comment
  • Zinc And Aluminum Exploited By Middleman Vigs [View article]
    Great article
    Nov 6, 2013. 08:53 PM | Likes Like |Link to Comment
  • The Default Has Already Begun [View article]
    Why US default is not mega catastrophe:

    1. US default = risk of failure to pay US govt bond holders either interest or principal. If these are missed there is a technical default, for bad management reasons, not a US govt solvency problem.

    Politicians could fail to raise the debt ceiling with a message that future payments will be met and bad debt/missed payments made good with interest. As Felix said, it could actually be good for bondholders in the long run.

    2. US$ is world reserve currency and not directly linked to default: there is no "running out of reserves" given US Fed can print more. Fed can always expand its bond purchase programme to counter rising yields.

    3. This contrasts with countries like Greece, Ireland, Portugal, Asia Financial Crisis and so on which linked Govt insolvency with falling foreign currency reserves via capital flight ( Within EU, despite a single Euro the current system still requires countries to balance their books with each other and the system that supports any imbalances in currency holdings is Target 2).
    Oct 15, 2013. 01:21 PM | 1 Like Like |Link to Comment
  • Daily State Of The Markets: It's Time To Let Price Be Your Guide [View article]
    David, what do your trend indicators and models say?

    You might want to add this one if you don't have something like it already
    Aug 19, 2013. 08:36 PM | Likes Like |Link to Comment
  • Is Now The Time To Double Down In REIT Town? [View article]
    here is the link
    Aug 19, 2013. 07:06 PM | Likes Like |Link to Comment