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I am not an investment professional. I do not engage in stock or currency trading. I am a blogger and investor who believes the failure of credit has created an investment demand for gold, and that gold bullion is the sole means of wealth preservation.
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  • The World Is Passing Through Peak Credit … Diktat Will Provide Order Out Of The Chaos Of Deleveraging 0 comments
    Dec 26, 2011 1:03 PM | about stocks: BND, LAG, AGG, TAO, FFC, PG, CHIM, CHII, FAA, SEA, ACWI, JYN, RZV, RZG, DBV, CEW, DBC, VSS, EWX, EEM, EPP, EMB, BWX, PICB, CUT, DBB, GRU, CORN, JJC, USO, IVV, OEF, PXLC, PKW, RPV, EZY, FTCS, FTA, IEV, JKF, PWV, SPYV, WCAT, PSCE, IEZ, OIH, XLE, XOP, XSD, XHB, ITB, IYR, COPX, WOOD, ALUM, KOL, EUFN, RWW, KRE, KCE, IA
    Financial Market Report for the week ending December 23, 2011

    1) ... Currencies, Commodities, Stocks, And Municipal Bonds Rose This Week On Cheap Credit Provided By The ECB’s LTRO Facility
    Currencies rising this week included the South African rand, 2.9%, the Russian ruble, 2.3%, the Canadian dollar 1.7%, the Australian dollar 1.7%, the New Zealand dollar 1.7%, the Singapore dollar 1.0%, the South Korean won 0.7%, the Swedish krona 0.6%, the British pound 0.3%, the Mexican peso 0.2% and the Taiwanese dollar 0.3%. On the downside, the Japanese yen declined 0.4%, the Brazilian real 0.3%, the Norwegian krone 0.3%, and the Swiss franc 0.1%. The euro and the Indian rupe, were unchanged on the week.

    The Small Cap Pure Value Stocks, RZV, rose more than the Small Cap Pure Growth Stocks, RZG, as the world major currencies, DBV, and emerging market currencies, CEW, rose, taking commodities, DBC, stocks, ACWI, VSS, EWX, EEM, EPP, higher, and giving seigniorage, that is moneyness, to world government bonds, BWX, and emerging market bonds, EMB, as the US Dollar, $USD, traded lower to close at 79.93.

    Yet, the seigniorage of fiat money is now declining as investors became aware in July 2011 that a debt union has formed in the Eurozone, and the world government credit bubble, BWX, popped in September, and turned international business bonds, PICB. lower. The failure of the seigniorage of fiat money is seen in the chart of world shares relative to world government bonds, ACWI:BWX, turning lower.

    Commodities, DBC, rising this week included Timber, CUT, Base Metals, DBB, Grain, GRU, Corn, CORN, Copper, JJC, Oil, USO as is seen in the chart of DBC, CUT, DBB, GRU, CORN, JJC, USO

    Large cap value, IVV, OEF, PXLC, PKW, RPV, EZY, FDV, FTA, IEV, JKF, PWV, SPYV, was the leading style this week.

    Wildcatters, WCAT, Small Cap Energy, PSCE, Energy Service, IEZ, OIH, Energy, XLE, XOP, Semiconductors, XSD, Homebuilders, XHB, ITB, Real Estate, IYR, Copper Miners, COPX, China Materials, CHIM, Wood Producers, WOOD, Aluminum Producers, ALUM, Coal, KOL, European Financials, EUFN, Too Big To Fail Banks, RWW, Banks, KRE, Investment Bankers, KCE, Stockbrokers, IAI, Financials, XLF, World Financials, IXG, Small Cap Revenue, RWJ, were among the leading sectors this week.

    Countries rising included Sweden, EWD, Norway, EWN, Austria, EWO, Germany, EWG, Italy, EWI, France, EWQ, Spain, EWP, Poland, EPOL, Europe, VGK, and Taiwan, EWT. Mexico Small Caps, MEXS, Canada Small Caps, CNDA, Russian Small Caps, RSXJ, and Germany Small Caps, GERJ, rose

    Homebuilders, XHB, and ITB, rose this week.

    Health Care, XLV, rose strongly, taking Health Care Providers, IHF, UNH, WLP, ESRX, HUM, CVH, HNT, WCG, AGP, CI, CNC, MOH, Health Care REITS, HCN, HCP, NHI, LTC, Pharmaceuticals, IHE, GSK, MRK, PFE, Prose higher.

    The Morgan Stanley Cyclicals Index, ^CYC, traded higher this week.

    High yielding investments, ABCS, PID, DWX, EDIV, BDCL, traded higher this week as is seen in this chart of ABCS, PID, DWX, EDIV, BDCL

    Finviz Screeners show the following to be have been favorable trades this week: Banks, and Education Companies, APOL, DV, EDMC, ESI, BPI, STRA, EDU, XRS, CAST, Energy Partnerships, DPM, KMP, EEP, EPD, MWE, RGP, TLLP, EEP, NGLS, OKS, WMB, MMP, SE, PAA, TCLP, APL, Utilities, DTE, WEC, D,S O, DUK, GXP, XEL, PGN, AEP, VVC, UIL, EIX, NEE, HE, ETR, OKE, ED, XLU, TEG, Credit Companies, AXP, NNI, COF, NICK, MA, V, ADS, CATM, ARCC, GPN, AEA, WRLD, RCII, Wood Manufacturers, IP, DEL, WY, LPX, PCL, PCH, UFPI, Industrial Electrical Equipment Manufacturers, ETN, ROK, AME, AOS, ENS, FELE, Metal Manufacturers, NUE, STLD, XME, RS, AKS, SMS, Chemical Manufacturers, DD, ALB, ASH, WLK, HUN, CYT, NEU, RPM, Synthetics, MTX, GGC, NL, HWKN

    Airlines, FAA, Rare Earth, REMX, Junior Gold Miners, GDXJ, traded lower.

    Brazil Small Caps, BRF, fell 13% and India Small Caps, SCIN, fell 3%. Argentina, ARGT, traded lower on inflation destruction. Alexander Ragir of Bloomberg reports on credit tightening in Brazil. Brazil’s top banks may tighten their grip on consumer and small-business lending as record high borrowing costs and the end of emergency credit pinch smaller competitors struggling with fallout from Europe’s debt crisis. Bonds maturing in 2020 sold by Banco Cruzeiro do Sul SA and Banco Bonsucesso SA, yield 20% and 14%, after the banks were shut out of international markets for the past three months.”

    Fibria Celulose SA, FBR, rose 12% this week, as Gabrielle Coppola and Cristiane Lucchesi of Bloomberg report Brazilian companies from Fibria Celulose SA to Gol Linhas Aereas Inteligentes SA are seeking to renegotiate bond contracts as the real’s tumble drives up the amount of $199 billion of foreign corporate debt in local currency terms.

    2) ... Best Performing Stocks Of The Year
    This chart of FAST, AME, NEU, ROLL, FTI, GPC, SMP, CLC, CLH, SIX, PRIM shows a number of stocks that have benefited from a rising dollar. This Finviz Screener presents the Fabulous 50 Stocks that have benefited from a strong dollarr
    Energy company of the year: KMP
    Credit company of the year: NICK
    Utility company of the year: DTE
    Education company of the year: APOL, EDMC
    Chemical manufacturer of the year: NEU
    Electrical equipment manufacturer of the year: AME, AIMC, AMRC
    Defense company of the year: ATRO, HXL
    Energy service company of the year: FTI
    Heavy construction company of the year: PRIM, DY,
    Industrial supply company of the year: FAST, ROLL
    Environmental service company of the year: CLH,
    Industrial equipment manufacturer of the year: CLC, PLL
    Automobile manufacturer of the year: AXL
    Entertainment company of the year: SIX, IMAX
    Consumer staple company of the year: KMB
    Automobile part retailers of the year: GPC, SMP
    Small tool manufacturer manufacturer of the year: LECO
    Industrial component manufacturer of the year: HEES
    Apparel clothing manufacturer of the year: OXM, CRI
    Recreational vehicle manufacturer of the year: WGO, THOR
    Drug related products company of the year: PRGO
    Resort and casino company of the year: RCL, CCL
    Semiconductor company of the year: SNDK
    Electronics manufacturer of the year: WIRE
    Software manufacturer of the year: TLEO, PMTC, ANSS, CDNS, SSYS
    Marketing service company of the year: CCO
    Retailer of the year: ROST, TJX
    Residential property management company of the year: ESS, BRE
    Railroad of the year: TRN
    Agricultural equipment manufacturer of the year: NC
    Paper producer of the year: IP
    Lumber producer of the year: LPX
    Scientific instrument manufacturer of the year: ZIGO, ROP
    Industrial equipment wholesaler of the year: DXPE
    Restaurant of the year: SBUX
    Medical equipment manufacturer of the year: ISRG
    Home builder of the year: MTH
    Automobile retailer of the year: CRMT
    Health plan provider of the year: AGP

    3) ... Credit Has Finally Expanded To Its Full Potential And A Sell Signal Appeared In US Treasuries This Week
    Leveraged Buyouts, PSP, Junk Bonds, JNK, Municipal Bonds, MUB, California Municipal Bonds, CMF, Michigan Municipal Bonds, MIW, rose. The Flattner ETF, FLAT, turned lower and the Steepner ETF, STPP, made what is a likely plummeting bottom, as the 10 30 US Sovereign Debt Yield Curve $TNX:$TYX, steepened, 2%, signaling the beginning of the end of US debt sovereignty and US Hegemony, that has accompanied the Inflationism, that came with the Banker Regime of Neoliberalism. The last remnant of the Milton Friedman Free To Choose Age floating currency regime of leverage, is now history, as the maximum safehaven value of US Treasuries appears to have been achieved. A sell signal developed in US Treasuries and in corporate bonds: the longer out debt LTPZ, TMF, ZROZ, EDV, TLT, BLV, all turned lower more than their shorter duration counterparts. Mortgage Backed Bonds, MBB, turned down this week, even though Doug Noland reports Freddie Mac 30-year fixed mortgage rates declined 3 bps to a record low 3.91% (down 90bps y-o-y). Fifteen-year fixed rates were unchanged at 3.21% (down 94bps y-o-y). One-year ARMs fell to 2.77% (down 63bps y-o-y). Bankrate's survey of jumbo mortgage borrowing costs had 30-yr fixed rates down one basis point to 4.68% (down 83bps y-o-y). The Finviz chart of Bonds, BND, LAG, AGG, all show topping out characteristics this week signaling that Peak Credit has been achieved. Deflationism has come to bonds. Risk has turned the spigot of investment liquidity completely off.

    4) ... Deleveraging Is At Hand As Financial Arbitrage Capitalism Has Run Its Course
    Doug Noland writes in Financial Arbitrage Capitalism After 10 Years Bill Gross penned a discerning op-ed for this past Monday’s Financial Times, “The Ugly Side of Ultra-Cheap Money.” Never before had the possibilities for Credit creation, and resulting fees and speculative profits, been so unfettered and incentivized. That is, as long as asset prices continue to inflate. Over time, this resulted in “money” and Credit becoming dangerously and increasingly detached from real economic wealth and wealth-producing capacity .“Gresham’s law needs a corollary. Not only does ‘bad money drive out good,’ but ‘cheap’ money may as well,” began Mr. Gross’s FT writing. I would strongly argue that this deleterious process of bad “money” driving out the relatively better commenced decades ago - and then proceeded to accelerate momentously during the nineties. Over the past decade, both U.S. household and federal debt more than doubled, as consumption boomed and deindustrialization gathered momentum. GSE assets tripled to $6.7 TN. Hedge fund assets quadrupled to surpass $2.0 TN. The global over-the-counter (OTC) derivatives market ballooned from about $100 TN to exceed $700 TN. Global central bank balance sheets ballooned uncontrollably. “Bad money” took the world by storm.

    Inevitably, a point would be reached where the quality of the underlying mountain of Credit obligations would prove incompatible with highly leveraged speculative positions and deeply maladjusted economic structures. Global fiscal and monetary policymakers have worked inexhaustibly to bolster increasingly vulnerable debt structures, through the unprecedented issuance of sovereign debt and government guarantees; by imposing ultra-low interest rates; and by massive purchases (monetization) of marketable debt instruments. And especially post-2008, this fragile structure (and associated mania) has been buttressed by the perception that policymakers retained the necessary tools to ensure the situation remained under their control. From Mr. Gross: “Conceptually, when the financial system can no longer find outlets for the credit it creates, then it de-levers.” True enough. I would add that a system will find it increasingly challenging to find “outlets for Credit” once premises behind, and confidence in, the mania in Credit instruments begins to break down.

    5) ... The World Is Passing Through Peak Credit … Diktat Will Provide Order Out Of The Chaos Of Deleveraging … Diktat Is The Dynamo In The Age Of Regional Global Governance
    The word dynamo comes from Greek dynamis, means power, and carries the connotation of an electrical generator.

    Credit and financial deregulation were the dynamos of the “age of the Milton Friedman Free To Choose floating currencies”. These created inflationism, innovation, growth, economic expansion and enabled democracy to support European socialism and Argentine socialism.

    Milton Friedman was the “great liberator of women” as well as the “great liberator of investors”. Lauren Streib in the same September 26, 2011, issue of Newsweek Magazine, in article entitled, Where Women Are Winning, documents that women living in the northern Europe nations of Iceland, Sweden, Denmark, Finland, Norway and Netherlands, are in the top ten best places to be a woman. It was Milton Friedman, who provided the Free To Choose script of floating currencies that has underwritten the northern european socialist regimes’ capability to provide better justice, health, education, government, and political gains than anywhere else in the world. The period from 1971 through 2011 is known as a time of global liberation, and the age of leverage.

    Now diktat and austerity measures, structural reforms, and debt servitude are the dynamos of the Beast regional global governance age; where deflationism, authoritarian rule, totalitarian collectivism are enforcing austerity measures, structural reforms, and debt servitude. Liberalism’s Freedom and Free Enterprise, are mirages on the Neoauthoritarian Desert of the Real. The Beast Regime of Neoauthoritarianism is going to claw back many of the advances of the former regime of Neoliberalism.

    Diktat is the dynamo in the “age of regional global governance.” The seigniorage of diktat is now rising to replace the seigniorage of fiat money, as the political capital of diktat is rising out of the ashes of the Milton Friedman Free To Choose floating currency known as Neoliberalism. The economic capital that underwrote democracy is history. Choice is now a epitaph on the tombstone of a prosperous bygone era. The rule of bankers is being replace by the rule of authoritarians, as evidenced by the appointment of emergency financial managers in Michigan by Public Act 4, and by the appointment of technocratic governors in the EU’s periphery. Fate is passing the baton of sovereign authority from nation states to the EU ECB and IMF Troika, The Beast Regime of Neoauthoritarianism is rising out of the Mediterranean Sea nations of Italy and Greece, This monster of statism is being called forth by the 1974 Clarion Call of the Club of Rome for regional global governance, as a means of providing security and stability, in a world of chaos, that is coming from derisking and deleveraging out the Banker Regime of Neoliberalism.

    Benjamin Hui of Bull Market Timer relates the yen carry trade is an example of how super low interest rates can destabilize the global financial system. Low interest rates encourage speculators to take on huge amounts of debt to invest in global assets. Once a currency carry trade unwinds itself, inflated global assets collapse and an economic bust occurs. With the yen carry trade, excess capital derived from unsustainable debt growth flowed from Japan to Iceland causing a boom and bust in Iceland’s economy.

    Steve Ludlum of Economic Undertow relates US funds flow to China by way of the dollar carry trade. As long as there are dollars and an interest rate differential there will be investment funds flowing to China to construct millions of empty apartments that are now losing value if for no other reason than there are too many of them, far in excess of organic demand. What is emerging is the required correction and the accompanying deleveraging. According to Victor Shih and others, the total amount of debt carried by the Chinese is much larger than the establishment lets on. Notice that China analysts focus on official government debt or external debt rather than the total public and private, internal and external indebtedness. The Chinese are in hock up to their necks: debt-to-GDP ratio for China is little different from Euro-deadbeat Portugal. I add that the Chinese Materials, CHIM, and the Industrials, CHII, the Airlines, FAA, and the Shippers, SEA, were the first to experience deleveraging as is seen in the chart of CHIM, CHII, FAA, SEA, ACWI.

    David Pierson of the LA Times writes of China’s Deflating Housing Bubble Falling home values. Debt-strapped borrowers. Real estate woes dogging the economy. It's old news in the United States, but now the air has started to leak from another great housing bubble, in China. Home prices nationwide declined in November for the third straight month, according to an index of values in 100 major cities compiled by the China Index Academy, an independent real estate firm. Average prices in the Shanghai area are down about 40% from their peak in mid-2009, to about $176,000 for a 1,000-square-foot home. Sales have plummeted. In Beijing, nearly two years' worth of inventory is clogging the market, and more than 1,000 real estate agencies have closed this year. Developers who once pre-sold housing projects within hours are growing desperate. A real estate company in the eastern city of Wenzhou is offering to throw in a new BMW with a home purchase. The swift turnaround has stunned buyers such as Shanghai resident Mark Li, who thought prices had nowhere to go but up. The software engineer closed on a $250,000, three-bedroom apartment in August, only to watch weeks later as the developer slashed prices 25% on identical units to attract buyers in a slowing market. Outraged, Li and hundreds of others who paid full price trashed the sales office, scuffled with employees and protested for three days before police broke up the demonstration. Walking away now would mean losing the $75,000 down payment that he borrowed from his working-class parents. "I still haven't told them," Li, 29, said of his home's plummeting value. "It will just make them worry, and it's already too late." It's all eerily similar to the early stages of the U.S. housing crash. The big difference is that the Chinese government intentionally slammed on the brakes. Over the last year it has tightened lending and prohibited the purchase of more than one home in several cities, in a bid to discourage speculators and bring down prices. Chart of Chinese Real Estate, TAO.

    Bloomberg reports “Zhu Lei, a property agent for the Serenity Coast luxury residential and hotel complex in Sanya on China’s Hainan island, recalls clients carrying suitcases of cash to shop for holiday apartments last year. ‘We didn’t even have time for toilet breaks because there were just too many clients,’ Zhu said. Today, sales in the second-biggest city on the tropical island compared to Hawaii for its sandy beaches and weather, are ‘bleak,’ he said. A two-year lending binge and the government’s plan to transform Hainan, in the South China Sea, into an international tourism destination helped fuel a 48% surge in Sanya’s home prices last year. Sanya’s home prices have dropped 28% since last December.” (Hat Tip to Doug Noland)

    Bloomberg reports “A copy of Manhattan, complete with Rockefeller and Lincoln centers and what passes for the Hudson River, is under construction an hour’s train ride from Beijing. And like New York City in the 1970s, it may need a bailout. Debt accumulated by companies financing local governments such as Tianjin, home to the New York lookalike project, is rising, a survey of Chinese-language bond prospectuses issued this year indicates. It also suggests the total owed by all such entities likely dwarfs the count by China’s national auditor and figures disclosed by banks.”
    (Hat Tip to Doug Noland)

    Tyler Durden writes China Insolvency Wave Begins As Nation's Biggest Provincial Borrowers "Defer" Loan Payments.

    Alan Greenspan’s credit liquidity policies and Ben Bernanke’s ZIRP monetary policy have been the greatest liberating forces of all time: the US Federal Reserve policy of cheap credit and a falling US Dollar, set investors free. The interest rates in the US have been close to zero, so investors borrowed that money and invested it in stock markets and commodities across the globe. And this week, cheap credit from Mario Draghi resurrected the European Financials, EUFN, and copper mining stocks, COPX. Credit easing policies, QE1, QE2, and now, coordinated central bank dollar FX Swaps, and the ECB’s LTRO, have goosed up stocks. Some of this most recent credit easing made its way into the US stock markets, creating a grand finale sector rotation in consumer staples such as Kimberly Clark, KMB, despite the recently announced diminished profit prospects for next year. Another beneficiary of this tulip money was Procter & Gamble, PG, which sent consumer staples, XLP, to a new high. One of greatest beneficiaries of US central bank easing and now ECB credit easing, have been the preferred shares, producing a steady wealth gain, as is seen in the chart of Claymore Preferred Securities, FFC, which rose 2% this week.

    Doug Noland reports on the terrific expansion of money that has occurred through coordinated US and central bank operations. Global central bank "international reserve assets" (excluding gold), as tallied by Bloomberg, were up $1.256 TN y-o-y, or 13.9% to $10.279 TN. Over two years, reserves were $2.658 TN higher, for 35% growth. M2 (narrow) "money" supply jumped $32.3bn to a record $9.672 TN. "Narrow money" has expanded at a 9.9% pace y-t-d. And Mr. Noland relates William Launder of the WSJ reports “Use of the European Central Bank’s overnight deposit facility reached a new record high for the year, suggesting recent measures by central banks and policy makers still aren’t enough to restore confidence in inter-bank lending markets. Banks deposited €346.99 billion ($453.38bn) in the overnight deposit facility, up from €264.97 billion a day earlier and a previous high for the year of €346.36 billion, reached earlier this month. The high level reflects ongoing distrust in inter-bank lending markets, where banks prefer using the ECB facility as a safe haven for excess funds rather than lending them to other banks. And Mr. Noland relates that Tony Barrett of Bloomberg reports “A measure of European Central Bank leverage may grow from a record 30 times, raising the risk of a widening in sovereign bond spreads unless governments commit to a detailed rescue plan for members, Bloomberg Industries said. The central bank’s total assets have risen to 2.46 trillion euros ($3.2 trillion), driving the ratio to capital and reserves above levels reached during the 2008 global financial crisis.”

    Beginning in November 2011, the US Dollar, $USD, has been on the rise, in relation to not only world currencies, DBV, and emerging market currencies, CEW, but also the Yen, FXY. This is seen in the USD/JPY rising from 75.7 to 78.0; and its inverse, JYN, falling from 77.9 to 75.5.

    A global currency devaluation is underway. The US Dollar, $USD, will continue to rise and unwind carry traders who borrowed dollars for next to nothing in order to speculate on other assets. As competitive currency deflation picks up speed, and as debt, BND, in particular US Treasuries, EDV, TLT, and World Government Bond, BWX, and Emerging Market Bonds, EMB, turn lower, the only safe haven investment will be gold bullion. There will be a renewed flight to safety to gold from risk currencies and from the implosion of credit, causing gold to rise to levels previously thought impossible.

    Eurozone sovereign default is inevitable, as the PIGS are among the first to loose their debt sovereignty, and as the global risk trade, being built on carry trade lending, reverses. Italy, EWI, may be the first EU nation to collapse, as it is suffers form chronic inability to access and collect taxes. Rachel Donadio communicates that Italy is now Raising The Stigma On Tax Evasion. An inquiring mind asks, is not Italy insolvent? Chiara Vasarri and Lorenzo Totaro of Bloomberg report Prime Minister Mario Monti’s market honeymoon is ending as Italian bond yields approaching 7% signal mounting concern his government may struggle to sell 440 billion euros ($574bn) of debt next year. And an inquiring mind asks are not the European banks insolvent? Fabio Benedetti-Valentini of Bloomberg reports BNP Paribas SA, Societe Generale SA, Credit Agricole SA and Groupe BPCE, France’s biggest banks, are struggling to fund about 37 billion euros ($48bn) of debt payments due in the first quarter.

    History's first sovereign default came in the 4th century BC, committed by ten Greek municipalities. Now sovereign default will encompass most all nations.

    Sovereign Default will cause the most credible of sovereigns to rise to power, where they will work through regional framework agreements to establish global governance for the security and stability needs of the world’s ten regions. The rise of the ten toed kingdom of regional global government is already underway with the EU becoming the first totalitarian collective as technocratic government has been installed by the EU ECB and IMF Troika. And the rise of this monster is seen in the Tyler Durden report World's Second And Third Largest Economies To Bypass Dollar, Engage In Direct Currency Trade.

    The death of fiat money means that gold bullion and diktat will be universally recognized currencies.

    Deleveraging leads to diktat. Out of sovereign armageddon, that is a credit bust and financial collapse, not by any human action, but rather by fate, the curtains will open, and The Sovereign, and his banking partner, The Seignior, will step onto the world’s stage. In a credit exhausted and currency devalued world, the people will come to place their faith in the word will and way of these two; they will give their full allegiance to their diktat.

    6) ... One Of The Best Deals Of The Year: Kinder Morgan Purchase Of El Paso Corporation
    Deal Book reports on what was likely one of the best public deals of 2011, On October 16, 2011, Kinder Morgan agreed to buy the El Paso Corporation for about $21.1 billion in cash and stock, striking one of the biggest energy deals in history, to tap into a boom in natural gas drilling and production.Through the deal, Kinder Morgan, KMP, will become the biggest of North America’s midstream energy companies, which are entities that process oil and gas products before transporting them to production facilities. Kinder Morgan will own or operate about 67,000 miles of pipelines stretching across the continent. “If you believe in the future of natural gas, you believe in putting together the biggest possible network,” Richard D. Kinder, Kinder Morgan’s chief executive, said in an interview. He added that the deal was “a once-in-a-lifetime opportunity.” Drilling and producing oil and gas from shale and other tight rocks has taken off in the last five years, as Exxon Mobil and other major energy companies have purchased smaller players with sizable stakes in the big shale fields. But many of the country’s shale fields, including the Bakken in North Dakota, the Eagle Ford in south Texas and the Marcellus in Pennsylvania, lack the pipeline capacity to carry all the oil and gas being produced there. The surge in output has produced such a glut that the price of natural gas has plummeted, and excess gas is being burned off instead of being captured. Of note, Natural Gas, UNG, prices have been plummeting.

    7) ... Jobs Are Where The Oil And Gas Are
    Floyd Norris of the NYT writes Jobs Are Where The Oil And Gas Are. States with oil and gas development have gained the most jobs; these being North Dakota, Wyoming, Utah, Texas, Oklahoma. States with the most toxic mortgage lending have lost the most jobs; these being Nevada, Michigan, Arizona, Florida, Georgia, These states were epicenters of the mortgage credit crisis. MyBudget360 relates that 4 states with a disproportionately large number of Alt-A mortgages, and a lot of no documentation, or low documentation loans, were primarily responsible for the toxic lending epidemic: Nevada, 48%, Arizona, 29%, Florida, 29%, California, 27%

    8) ... Enviornmental Mitigation Begins In Bellingham Bay
    John Stark of the Bellingham Herald reports that Enviornmental Mitigation Work Employs 50 As Cleanup Of Bellingham Bay Gets Underway. Excavators have built a dirt berm around the margins of the site to reduce runoff into Bellingham Bay as work continues on an interim environmental cleanup project designed to reduce the leaching of contaminants from the half-century-old garbage deposits into the water. I relate that Bellingham is the epitome of gentrification in a university town and what was a former Georgia Pacific paper and pulp mill. Now beer gardens, brew pubs, upscale hamburger joints, vitamin stores, natural food retailers, bicycle shops, and home improvement stores, thrive. Carry trade investment flowed into Bellingham as the Canadian Currency, the Loonie, expanded over the years through mining and through migration from China in British Columbia, as well as building for the Olympics. Bellingham has benefited from relocation of retired Microsoft and Boeing workers moving out of the Seattle to the city of subdued excitement. Investors who years ago moved from Southern California, and bought rental properties have done quite well financially. Now a company that builds energy service rigs for offshore Alaska energy exploration and development is moving to town. And the fishing industry and seafood processing companies are thriving on a good seasonal harvest. Employment at Heath Techna, an aircraft interior manufacturer, and Sterling Life Insurance, has remained strong.
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