Seeking Alpha

QuickChat's  Instablog

Send Message
  • QuickChat #251, January 3, 2013 234 comments
    Jan 3, 2013 11:39 AM

    QuickChat New Year, new chat...

Back To QuickChat's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (234)
Track new comments
  • whoop, whoop
    3 Jan 2013, 11:42 AM Reply Like
  • Ok, Markets tack on 300 points yesterday, yet i see no fundamental change...Any thoughts? Is the economy getting better and i am missing something?


    BTW..silver had a better % day...3% gain...for the day !
    3 Jan 2013, 11:47 AM Reply Like
  • "Markets tack on 300 points yesterday, yet i see no fundamental change...Any thoughts?..."


    I wonder if it was folks who sold on fears of big cap gains tax hikes, then bought back in after the grandstanding in Washington was finished and they found the changes not so alarming.
    3 Jan 2013, 05:04 PM Reply Like
  • Yeah, the CBO scores $4T deficit increase because nothing was done on spending and we discover from the WSJ article that it's the largest tax increase (not *rates*, just taxes) in 20 years.


    Nothing alarming about that!


    Oh! And then BHO says already that he'll be coming back this year for more taxes - to support his continued increase in spending, centralized control and wealth transfer I guess.


    I know it sure puts my mind at ease.


    3 Jan 2013, 05:08 PM Reply Like
  • It looks like a good can kicking to me.
    3 Jan 2013, 01:40 PM Reply Like
  • Will Bill Gross be right about what will happen down the road?



    I think so !!
    3 Jan 2013, 01:45 PM Reply Like
  • From IT's link
    " the Fed's now constant intervention in capital markets has achieved one thing when it comes to the real economy: an unprecedented capital mismanagemenet, where as a result of ZIRP, corporate executives will always opt for short-term, low IRR, myopic cash allocation decisions such as dividend, buyback and, sometimes, M&A, seeking to satisfy shareholders and ignoring real long-term growth opportunities such as R&D spending, efficiency improvements, capital reinvestment, retention and hiring of employees, and generally all those things that determine success for anyone whose investment horizon is longer than the nearest lockup gate."


    --This is what I have noticed about the past couple years of the market, it has been driven by traders and companies that take advantage of hype cycles, rather than good business practices. Perhaps 2013 will begin to mark the emergence of investing in good companies. Interestingly, I believe a higher cap gains tax can help that scenario as well since people will have more of a tendency to want to park their money instead of throwing it around from one hype-cycle to another...maybe I am dreaming.
    3 Jan 2013, 03:52 PM Reply Like
  • JAK


    Wake up !!!
    3 Jan 2013, 04:24 PM Reply Like
  • The FED says they expect the end of Bond buying by the end of the year. Miners and PM's are taking a hit.

    3 Jan 2013, 02:08 PM Reply Like
  • The govt need to borrow money is not going away by the end of the year so nix that idea. Also I thought the latest was going to be about the unemployment rate hitting a certain percentage. Talk about mixed and confused signals. I think this is all being played by the seat of their pants not by any logical computations.


    The balance sheet must be getting to the point that they are scared and are starting to sweat. The result is they are talking out of not only both sides of their mouth but they are also talking out of all orifices of their body.
    4 Jan 2013, 03:54 PM Reply Like
  • I believe the two data points being tossed around for ending the easy money policy was either 6.5% unemployment or 3% inflation. I would be very curious which one of those they think they might be closing in on by the end of the year. Either one or neither is good for PM's or, at the worst, status quo for PM's.
    4 Jan 2013, 04:06 PM Reply Like
  • They are seeing both situations looming in the future and don't know how to deal with either let alone both.
    4 Jan 2013, 04:10 PM Reply Like
  • JAK


    If unemployment hits 6.5% then imo you have millions of workers out of work no longer looking !! It isn't going to be because of job placements..


    I would bet anything on this...Look,we lay off 350k WEEKLY, yet ONLY create 150k jobs MONTHLY !!


    Now i did skip a few math classes in my day but with 1 million net people out of work monthly it won't add up..


    Timmy and Ben ARE BAILING out because they know the real deal..
    4 Jan 2013, 04:56 PM Reply Like
  • I remember during the last QEs BB would try to downplay the effect of QE on commodities. Then he engaged in twist because he wanted to ease but not have easing affect commodities. So first he says QE doesn't affect commodities and then he does twist because he says QE does affect commodities.


    Maybe what is going on here is jawboning to keep commodities (like gold) down because he is not doing twist anymore and he needs some way to talk commodities down. So he jawbones that they might end QE and then gold and other commodities take a hit. Then he can say again, "see QE doesn't affect commodities". Gold's not going up, so that means the markets don't expect inflation. If he can make the case that inflation are expectations are low, then the Fed has cover to keep doing QE, which is what I think they want to be doing.
    7 Jan 2013, 04:44 AM Reply Like
  • I seriously doubt this will happen as rates will go through the roof..


    Just another rumor to slow down this rolling snowball.!!!


    Can you say coverup??
    3 Jan 2013, 02:38 PM Reply Like
  • IT,
    Anyway you look at it the Fed is going to eat someone's lunch. Right now it is anyone holding Tbonds.
    3 Jan 2013, 03:15 PM Reply Like


    Been waiting for that a while now, i agree 100%...But i do think we have a serious problem that as soon as the FED mentions getting out ALL sectors are selling off.


    Stocks, bonds, commodities, etc.. Makes you think what REALLY lies ahead for us..


    Just thinking outside the box here !!
    3 Jan 2013, 03:32 PM Reply Like
  • Whether the Fed explicitly prints via QEforever, or the fedGov does it implicitly by running ever larger deficits, makes no difference. It all serves to devalue the US dollar and drive future uncertainty and inflation.


    Here's an idea:
    Use your house equity to borrow money (that you don't need) cheaply and buy physical commodities. Wait a few years and sell the commodities and pay back the low interest loan. Pocket the difference. You won't beat inflation but you will come closer then putting money into LT fedGov bonds. Shudder!


    Today's fiat currency is tomorrows toilet tissue.


    $10k bills, anyone?
    3 Jan 2013, 04:44 PM Reply Like
  • I am just overly concerned that a whisper that the Fed might be done can send shivers all through the markets...Makes you wonder what will happen if they ACTUALLY did it??


    No way they can, but what kind of sell off would you get?


    physical all the way !!
    3 Jan 2013, 04:52 PM Reply Like
  • Friday, January 4, 10:06 AM Interesting action in the precious metals had them continuing overnight a sharp fall begun after FOMC minutes suggested an earlier-than-expected end to Fed candy. This reversed with the 8:30 jobs report which showed still-sluggish employment growth. Gold has since bounced $21 to $1,651, though still off 1.4% on the session. Silver jumps $0.70, but remains -2.6%.


    Looks like $1650 and $30 dollars are a floor right now..Unemployment ticks up !! 7.8%...


    Whoever thinks this is good for stocks please explain it to me?


    We lay off over 1 million a month yet create create less than 200k in the same time period..How long can this last before a correction?


    Govt. says November was worse than expected to boot!
    4 Jan 2013, 02:00 PM Reply Like
  • 2:38 PM Gold investors are making a "major mistake" if they think the latest Fed minutes indicate the end of QE is likely by mid-year or even year’s end, Peter Schiff writes, seeing the recent decline in gold prices as a buying opportunity. The Fed's hands are tied, as any end to buying Treasurys or MBS would result in higher rates that might tip the economy back into recession. Gold finishes the day at $1,648.90


    I agree...
    4 Jan 2013, 03:06 PM Reply Like
  • I really do not know if there is any truth to any of this below but.....Might be why we are getting ANY story to just buy more time. Count this as possibly more of the band playing on the Titanic while the crew knows its sinking. Except it appears the crew is leaving the ship really fast.


    My suggestion is to prepar for the worse and hope for the best.


    4 Jan 2013, 04:00 PM Reply Like
  • A trillion dollar coin made of platinum being considered? You betcha, and possibly made and used for Voldemorte to do an end run on the debt ceiling:



    I don't think this will ever happen, but it remains amazing that this is even being discussed.
    4 Jan 2013, 04:18 PM Reply Like
  • Maya: When you think about, it's really no different than the Fed magically printing money with no real connection to GDP or any real wealth creation *except* for the lack of debt attached to it and the by-passing of the phony (in all real-world senses) "Debt Ceiling"..


    Treasury currently gets "money" by selling notes and bonds backed by only the "full faith ... etc. of the U.S. Government", mostly to the Fed and/or their primary dealers (I forget exactly the mechanism). It comes with an obligation to pay the "vig".


    The platinum coin creates the money and avoids the obligation to pay the "vig" and also avoids the issue of a "Debt Ceiling". Other than that, it's creation of money is just as magical as what we currently do.


    There is one more potential major downside: the issuance of useless paper saying "I.O.U" seems to give folks a feeling of security, helping to strengthen the USD. The minting of this coin would destroy that. It would be a tacit admission of a lot of negative things.


    But other than that, who cares? Does anyone really have faith in the USD after watching our on-going circus here? I think the only reason they hold the USD for now is they are waiting for other currencies to come to the fore as other countries gain strength in arrangements for trading using their own currencies, which has begun several places around the world already.


    When they gain confidence in those currencies they'll dump the USD and it will be toast anyway.


    The only solid way out is control of government spending, first, and a return to constitutional money, second. But if we're not going to do that, ...


    EDIT: BTW, we already have several states issuing their own currency and/or considering such, as even members of our republic have lost confidence in the USD as a store of wealth.
    4 Jan 2013, 05:21 PM Reply Like
  • HTL: Great comment. I'd be happy with a shaving of that coin. Yes, I believe Utah has already declared silver and gold coins as legal currency. We'll see what the delayed Basel 3 rules do in a couple of months.




    Here's an article I just read that I think all Renegades should read, from one of my favorite publications, "the Atlantic," titled "What's Inside America's Banks?"


    The Dodd-Frank Bill, meant to create transparency, has only increased opacity, hugely.


    A great expose, explaining that TBTF banks have trillions still on their books, of mysterious "fair value."


    Highly recommended:

    4 Jan 2013, 07:21 PM Reply Like
  • Looks like a good article. I've long doubted the veracity of the banks' reporting since we torpedoed the essence of FASB-157(?) requiring reporting at "market value".


    And there's so many other things, ...


    But have to eat dinner now (running late), so I'm going to read it tomorrow.


    4 Jan 2013, 09:10 PM Reply Like
  • Excellent article, Maya!


    It goes to show that the usual unintended consequence of massive regulations meant to "increase transparency" is to improve the ability of the clever and unscrupulous to camouflage their misdeeds in legalese and loopholes:


    "Accounting rules have proliferated as banks, and the assets and liabilities they contain, have become more complex. Yet the rules have not kept pace with changes in the financial system. Clever bankers, aided by their lawyers and accountants, can find ways around the intentions of the regulations while remaining within the letter of the law. What’s more, because these rules have grown ever more detailed and lawyerly—while still failing to cover every possible circumstance—they have had the perverse effect of allowing banks to avoid giving investors the information needed to gauge the value and risk of a bank’s portfolio. (That information is obscured by minutiae and legalese.) This is true for the complicated questions about financial innovation and trading, but it also is true for the basic questions, such as those involving loans."


    Or perhaps the consequences of Dodd-Frank were not as unintended as the public is led to believe. Recall who are their paymasters at election time:


    5 Jan 2013, 10:58 AM Reply Like
  • Fed notes and Treas notes are both notes that get their value from the productivity of US labor. If notes are created faster than labor can grow in productivity, the notes become diluted. So whether the Fed creates the notes or the treasury creates the notes, all these notes get their value in the fact that you can buy and consume things created by US citizens (dollar denominated assets). So no matter which pocket the printing press is in, or whether both pockets have a printing press, if the presses are creating notes faster than US citizens can be productive, the notes loose value. This means US citizen's consumptive power goes down because they too can't purchase as much. A tax is basically what gov does to take away consumptive power. As such, note dilution is a tax regardless of the mechanism that creates that dilution. The reason they want complicated mechanisms is so the general populace doesn't figure out its a tax, and the poor think only the rich are being taxed. This allows politicians and those that fund them to have wealth transferred their way, and they get richer while everyone else gets poorer. Its just plain theft using the gov guns as the weapon and the financial system via the Treas and the Fed as the smoke screen. This has been happening for as long as their has been gov and central banks.
    7 Jan 2013, 04:44 AM Reply Like
  • Krugman joins in on the call for a $1 Trillion platinum coin. My question is why stop there? Why not make it a $15Trillion dollar coin?


    This stuff is coming from adults? Is it really that bad to just cut back on spending? Instead you literally start playing monopoly.

    7 Jan 2013, 12:08 PM Reply Like
  • Jak,
    In the article the question of who's face will be on the coin. Just thinking it would be the wrong body part to put on there.
    7 Jan 2013, 01:06 PM Reply Like
  • JAK


    People think i am crazy when i try to explain all of this crap to them...I honestly believe that most of society jusy don't get it...


    7 Jan 2013, 01:12 PM Reply Like
  • King, Obama thinks he can just create a coin unilaterally to do an end run around the House regarding increasing debt and spending. He doesn't seem to understand that issuing new coinage is a power reserved to the House of Representatives. Perhaps he does understand this but doesn't think you do. Or he just doesn't care about what is constitutional and what is not. I think it's the latter as he plays catch me if you can through the courts. He has a new constitutional conflict at least once a quarter. Not a good record for someone who claims to be a constitutional scholar.
    7 Jan 2013, 01:25 PM Reply Like
  • jakurtz: Timely! My broker and I were talking about this $1T coin today. I emailed him my above link, and then just in the nick of time was able to add yours.


    7 Jan 2013, 01:28 PM Reply Like
  • Then we have Pelosi yelling to use the 14th admen, to raise the debt ceiling !!


    Amazing how corrupt, scared, devious , the cronies have become..I thought WE were already screwed...Things are going to get alot worse..Caged animals do unanswerable things..
    7 Jan 2013, 01:29 PM Reply Like
  • Because the more extreme the suggestion, the more obvious becomes the fraud. The ultimate expression of this, would be a 100% income tax rate on every citizen in the US. Or to describe it another way, an announcement that all human rights will no longer be observed by people in gov and those that pay for them, and gov guns will now be used to control every aspect of everyone's lives. Or to more fully describe it, an announcement that declares everyone a slave except for those currently in gov and those closely associated with those in gov. Of course such announcements are obvious. Its much more subtle to monopolize money mediums (like bank notes), because money mediums are a claim on labor. If a gov can print an infinite amount of claims on labor, then they have an infinite claim on labor. Another term for one person having an infinite claim on the labor of another person is "slavery".


    Welcome to the new normal which is really the old tyranny, regardless of what Dancing With the Stars tells people about the "common good" and "family".
    8 Jan 2013, 04:23 AM Reply Like
  • Why we won't mint a platinum coin by Felix.



    This at least puts minting the coin in the perspective it is supposed to be in.
    8 Jan 2013, 08:02 AM Reply Like
  • The instant they mint the coin is the instant the dollar collapses because everyone else in the world realizes the value of the huge stacks of bonds just became worth one ounce of platinum.


    Second how do you keep that coin from being counterfeited. Seriously easy to copy a die and stamp out coins.


    Just things I have considered. Not sure anyone else believes them.
    8 Jan 2013, 08:41 AM Reply Like
  • Although it could happen, I think this is just a political ploy to get some compromise. With that said I have always said the world could just wipe all debt out with the stroke of a pen..&...start over.
    8 Jan 2013, 09:25 AM Reply Like
  • Your right, LT. What the article by Felix talks about is that the coin idea is as crazy as having a limit to the debt ceiling. For republicans you can't pass bills that cost money and then turn around and say, "I won't pay because we have an arbitrary debt limit number." And the Dem's same ridiculousness plays out in the idea that, "Well, then we will just print a trillion dollar coin." The arguments are that both the debt ceiling and the coin are meaningless or equally crazy.
    8 Jan 2013, 09:31 AM Reply Like
  • Jak, not having a debt ceiling however is like have lots of those coins just sitting around and waiting to spend them. There has to be constraints on spending so they need to pass laws to cut spending....however neither party will do that.


    Soooooooooo.............. ends badly.
    8 Jan 2013, 11:10 AM Reply Like
  • I agree the debt ceiling was intended to be a tool to be used to not over-spend and have to print money. I don't think both are morally equivalent. Debt ceiling is intended to be used to practice fiscal constraint and responsibility, while the coin is intended to allow irresponsibility and no constraints. Two perfect examples of the two parties principles in my view (even if many Rep. have not practiced that principle at times)


    I should have probably put this stuff in the PQC but it started out as one of those topics that overlaps a bit.

    8 Jan 2013, 11:38 AM Reply Like
  • JAK: It's been a long time since any Rep's did anything but "Talk the talk" until the Tea Party showed up. This feeling goes back to at least the Reagan era.


    8 Jan 2013, 11:53 AM Reply Like
  • HTL, Yep, in fact it was under Reagan we went from being a creditor nation to a debtor nation. Loved Reagan but not his spending or anyone's spending since. Its become a disease or something.....


    As far as talking the talk not many in either party actually get past that point any more. So invest with the understanding that the debt ceiling will go up. Sequestration will not be cumulative, they will probably reuse last years but say "We really mean it this time" LOL, and the FED will buy more treasury bonds because who else will buy them or has the money to buy them. We will be headed to 23-26 trillion in debt by the end of BO's second term. The interest payments on this alone will soon wipe out any possibility of making entitlement payments just a few more years down the road.


    Economic Slaves living off the govt will be in for a shock when they get no monthly check. I wonder if there could be the possibility of riots in the streets.......(;-o
    8 Jan 2013, 02:02 PM Reply Like
  • Those of influence probably can't imagine that's a possibility. They forget things like the Watts Riots, Rodney King follow-on, the youth of the 60s/70s ...


    Change comes when *forced* upon them by the desire to survive and maintain power - just like (long ago) in Louisiana the power elite accepted Mulattoes into their class in spite of their prejudice because the white elite population was too small to maintain power w/o a bigger base.


    8 Jan 2013, 02:25 PM Reply Like
  • The absurdity isn't the prospect of printing a $1T coin. It's the idea that we have no budget to delineate how much we will spend and what we will spend it on. There should be no increase to the debt ceiling until there is a budget. Giving a blank check to a spendaholich is sheer insanity.
    8 Jan 2013, 06:26 PM Reply Like
  • Not according to Nancy Pelosi !!!


    A walking time bomb...
    8 Jan 2013, 07:28 PM Reply Like
  • Guns, I think you are wrong on one point. Those receiving guvmint checks will still get them. Unfortunately, the check will buy less goods with each passing month. Colas will be "adjusted" so payments no longer keep up with inflation.
    Imported "stuff" will rise in price even faster than home grown food and durables. Living standards will drop each year.


    Welcome to America - 2020
    9 Jan 2013, 12:48 PM Reply Like
  • "Colas will be "adjusted" so payments no longer keep up with inflation"


    That happened last century. It'll just keep up even less effectively with the adjustments that will come.


    9 Jan 2013, 01:05 PM Reply Like
  • SiHi,


    I feel so fortunate that my non-profit employer graced us with a 1% raise last week, after wages in the agency had been frozen for four years.


    And the amount withheld by the government in last week's paycheck only jumped by 10%.


    I am counting my blessings as an American citizen who is so valued by his government.
    9 Jan 2013, 01:06 PM Reply Like
  • SMaturin: No sarcasm tag needed here!
    9 Jan 2013, 01:19 PM Reply Like
  • Hillbilly, your probably right but a check that buys 10% less each passing day as inflation soars will soon seem like no check at all. Look at Weimer republic, folks got paid twice daily at lunch time and after work so they could buy something becase prices went up hourly in many cases.


    I see something like that possibly happening here when the dollar plunges but with the stooges in washington running around shouting abrakadabra who knows what disaster will befall us. There are so many to choose from.
    9 Jan 2013, 04:35 PM Reply Like
  • Yearly adjustments on daily hyperinflation may mean you starve to death in June waiting for Januarys Cola to come around again.
    9 Jan 2013, 04:37 PM Reply Like
  • SMartin, You are highly valued as a financial slave contributing your present share of taxes to the collective. As further evidence of that value we have allowed YOU to retain a portion of OUR earnings.
    9 Jan 2013, 04:40 PM Reply Like
  • DG, your generosity leaves me speechless.


    I cannot express how grateful I should be.
    9 Jan 2013, 04:42 PM Reply Like


    Now go fill up the gas tank with what is left !!
    9 Jan 2013, 05:18 PM Reply Like
  • Then I can assume you will vote for me as dictator, I mean president.
    9 Jan 2013, 07:11 PM Reply Like
  • Wat's init fer me if I vote fer you?


    I want a $10k tax credit of each of my French poodles and 40 acres and a hybrid tractor. And subsidies for my organic petunias.


    And no income taxes until GM pays theirs.


    It's only fair.
    9 Jan 2013, 07:39 PM Reply Like
  • What aspersion, calumniation, deception, fraudulence, mendacity, prevarication, revilement, slander, subterfuge, tale, whopper (without cheese) MUST I TELL TO GET YOUR VOTE!!!!


    I will tell any lie, exagerate any truth, promise any payment, till elected, but then.....the dictating will begin, the lies will become obvious, the truths will be vapor myths and the payments will be made by YOU from OUR paycheck.
    11 Jan 2013, 03:18 PM Reply Like
  • I also want a new hopium pipe.


    Can you put that in your platform?


    If you cover it with swarovski crystals, then you definitely get my vote!
    11 Jan 2013, 03:24 PM Reply Like
  • Goldman says to sell bonds now or lose 25%.....IMO, all that fed leak of ending QE soon was probably an attempt to begin an orderly exit from bonds to ____ ? whatever
    6 Jan 2013, 05:14 AM Reply Like
  • How can I "like" that comment... like that you told us... but don't "like" Goldman...
    6 Jan 2013, 07:00 AM Reply Like
  • i don't like GS either, but thought with all the talks we had last summer that bond selling reccomendation might be appropriate.


    Another thing i noticed was that no one liked Citigroup (C) last summer when it was <$25 and now at $40 it is suddenly the best performer for 2012 and #1 pick for '13 ???? GS just added it their conviction buy list.
    and WFC was the darling, but now it's out of favor?
    I admit I was one of the few that liked C and traded it, but I bailed at slightly less than $35....Go figure.
    6 Jan 2013, 07:55 AM Reply Like
  • One other thing I am watching is "the debt ceiling debate"....


    Pete Najarian (Fast Money) was completely out of the market for the first time in 20 years over the fiscal cliff....and he thinks the debt ceiling debate could top that. He says buy the VIX for protection.


    I am considering going almost all cash soon....things just don't feel right to me now and I was bullish amongst the bearishness in 2012.


    Things that bother me is APPLE wants to go lower....and it's what 20% or more of some indexes? ALso other leaders are toppy in here now. Along with charts forming tops (unless they break out upward)
    Earnings may be good, but what I read says CEO's will tamp expectations downward especially of the debt debate, and anger/division in stocks could drop on good news.
    6 Jan 2013, 08:04 AM Reply Like
  • Could you elaborate on why you're thinking about going totally into cash?
    6 Jan 2013, 12:52 PM Reply Like
  • Jon, first it depends on how things play out on the debt ceiling. Second, stocks have ran a long way with not hardly a correction, it has the feel that it's looking for an excuse to pull back.
    Just IMO.


    My big dilemma is bonds & preferred....Some are at 115%, so you know upside is probably limited...but they pay very very well. I think the fed would like these back to par soon or say by year end.


    What to do with the cash is a good question, maybe just ride it out a while and look for bargains on a pulll back...I probably won't go 100% cash. but maybe 50%. Dry powder is always a good thing.
    6 Jan 2013, 09:48 PM Reply Like
  • Thanks LT.
    6 Jan 2013, 09:52 PM Reply Like
  • LT


    I would rather be 4 months too soon getting out than a DAY too late !!
    6 Jan 2013, 11:08 AM Reply Like
  • IT


    So you get out..... what do you do with the cash?
    6 Jan 2013, 05:22 PM Reply Like
  • "So you get out..... what do you do with the cash?"


    Bail it and use it to insulate the barn?


    I have the same question/problem. I have been carefully putting it into energy partnerships and related medium high yield investments. But I still have way too much in zero yield MM funds.
    6 Jan 2013, 10:16 PM Reply Like
  • Wait for a better entry point...
    6 Jan 2013, 09:42 PM Reply Like
  • I have been almost entirely out of bonds now for some time. The only one I have left is a county TE Muny supporting the space port. It matures next year. I'm going to be watching this very closely as there will be some good issues crushed in all of this. There may be some babies in the bath water.
    7 Jan 2013, 11:16 AM Reply Like
  • My thoughts exactly Robert
    7 Jan 2013, 12:47 PM Reply Like
  • robert: Just off the phone with my broker. We decided to put out bids for my Wyerhauser, Hartford, Prudential and Williams Sonoma bonds.


    As those bids are hopefully taken, we're going to move the funds into Kayne Anderson Total Return Fund. (KYE) yields 7.4% and is:


    The Fund is a non-diversified, closed-end management investment company registered under the Investment Company Act of 1940 whose common stock is traded on the NYSE. The Fund’s investment objective is to obtain a high total return with an emphasis on current income by investing primarily in securities of companies engaged in the energy industry, principally including publicly-traded energy-related master limited partnerships and limited liability companies taxed as partnerships and their affiliates, energy-related U.S. and Canadian royalty trusts and income trusts and other companies that derive at least 50% of their revenues from operating assets used in, or providing energy-related services for, the exploration, development, production, gathering, transportation, processing, storing, refining, distribution, mining or marketing of natural gas, natural gas liquids (including propane), crude oil, refined petroleum products or coal.
    7 Jan 2013, 12:44 PM Reply Like
  • Maya: Greetings and salutations for the new year. Thanks for the tip. Seems like a good strategy. Good luck and profits.
    7 Jan 2013, 01:06 PM Reply Like
  • Back atcha', brother Bob.


    Yep. It'll good to get completely out of bonds...with a profit. What I like about the above Fund is that you don't have to mess around with those always late K-1 forms.


    Further, with all the new nat-gas and oil drilling going on in North America, I'm more and more leaving straight energy plays, and buying into the partnerships that create infrastructure and then use it for transporting oil or gas. I know I'm not the first on this train of thinking, but I also know I'm not the last.


    Could see some growth, plus a nice yield along the way. Again, this is a in-progress move. Nothing done yet, as I expect the overall market to pull back as we near the debt side of Fiscal Cliff being addressed in about 60 days.


    From a charting perspective, the S&P has just triple-topped, since 2008. Good time (at least for me) to sling off some potentially underperforming here forward stocks and bonds.
    7 Jan 2013, 01:23 PM Reply Like
  • Maya, I love the energy transports because they will always have that job and it does not matter what the price of the product is. Love your find. I am looking at it real close it is right up my alley.
    7 Jan 2013, 06:39 PM Reply Like
  • Maya, what I like about KYE is they are in the right industry and they pay on a 1099-DIV, not a K1. What I don't like is buying closed-ends at a premium, though theirs is small, and their very high management fees. I've been buying, but mostly when I can buy at par. Ya pays yer money and ya takes yer chances, eh?!!
    8 Jan 2013, 10:02 AM Reply Like
  • Joseph: Yep. As long as KYE holds its value, and pays the high yield, I'll be quite happy that management makes their fees. Yesterday, bond bids were accepted with Hartford and Prudential; then bought some KYE.


    With my preferreds and other bonds getting called early last year, I only have two bonds left and I'll be completely out of the bond market after selling them.


    Probably going to hold onto the dry powder until the debt ceiling is raised.


    Do you have any favored banking preferreds?




    For those of you who are not paying attention to the battery biz, a brand new Boeing 787 caught fire at Boston Airport yesterday.


    -- The Boeing 787 is a revolutionary airplane that saves 20 percent in fuel comsumption compared to the older models it's intended to replace. One of the ways it’s designed to save energy is by making extensive use of electrical power instead of powering many onboard system directly from the engines. But now the very batteries that are one of its most innovative features are putting the plane in trouble.


    A Japan Airlines 787 caught fire on Monday at Boston’s Logan airport. Firefighters who rushed to the plane’s parking spot reported that a fire had started “in the avionics compartmnet underbelly,” where much of the electronic equipment is housed, and that the fire began in a battery used to power the plane on the ground, according to the Boston Globe.

    8 Jan 2013, 11:02 AM Reply Like
  • Regrettably, no favorite banking pfds these days. You recall I loaded up on them in March 2009, but most have been called or they are above par so I sold them or, if still held, won't buy them now anyway. My primary remaining one is SIVBO, the SVB (old Silicon Valley Bank) pfd, also in our Growth & Value portfolio in Inv Edge. You can bet if we see another 2008-2009 ( NOT WISHING THAT ON ANYONE, JUST MENTALLY PREPARING) I will absolutely load up on the ones I think will be survivors this time around. And I always prefer cv pfds and busted convert bonds when I can find them... (a la more risky MCP right now!)
    8 Jan 2013, 01:17 PM Reply Like
  • Thanks, Joseph. My Wells preferred was also called last year. Seems the whole banking sector is weak on preferreds, as they should be with the Fed window being cheap right through 2015.


    Catching up on the latest news cycle, after spending the past month in Honduras, and also with family during the Holidays.


    The more I'm reading lately, as well as today, the more I'm leaning toward sitting on cash until the debt ceiling is resolved (yeah...right).


    As I learned during my latest trip to Copan, Honduras, the ancient Maya knew of "bitter blood," as new translations of Waxaklahuun Uba K'awhiil's stelae relates -- the 14th king of Copan, who was decapitated. Just ain't enough of that bitter blood right now to fire up new positions.


    Though I'm not a regular reader, Jim Jubak has a nice "be afraid of the ceiling," article today.

    8 Jan 2013, 01:52 PM Reply Like
  • Monday, January 7, 3:12 AM Japan's new government reportedly plans to announce an extra ¥12T ($136B) in stimulus spending for the fiscal-year through March as it looks to turn around the moribund economy. Prime Minister Shinzo Abe hopes to formulate the plan this week, with ¥5-6T to be spent on public works.


    Print baby PRINT!!


    I guess this is in vogue now, like they all found the fountain of youth..Boy is this gonna backfire real bad one day, don't know when but it will...
    7 Jan 2013, 01:20 PM Reply Like
  • Turns out investing heavily in just a few "game changers" PLUS exerting great patience over a multi-year period can turn $20K into $2million. This guy did just that between 2007 and 2010 -- making 1 or 2 big trades per year and then just sitting on them. He keeps his ear to the ground and waits until he detects the next big thing -- but once the play becomes the subject of Wall Street chatter -- he books his gains and moves on. Note his point that what you invest in -- is just as important as what you DON"T invest in. Waiting months for the right opportunity before investing was part of his key to success.


    I think his advice is very sound -- although for my personal investing I demand 2 more things 1) a management team who demonstrates execution excellence and 2) no scent in the air (of any kind) associated with "questionable" financial or operational activity.


    This interview is likely to make you think about your own investing/trading. What I like the most about this guy's strategy -- is that BOTs can't possibly be programmed to eat his lunch! LOL


    Here's the 5-minute interview:


    Got game changers??
    8 Jan 2013, 06:32 AM Reply Like
  • Thanks, Mercy. I liked how this successful fellow talked about "crowdfunding." Something, I believe, that QuickChat should be paying a lot of attention to this year.


    In effect, the Axion Power Concentrator series is/was way ahead of its time, as it is a form of social media crowdfunding.
    8 Jan 2013, 11:16 AM Reply Like
  • Maya, the flip side is that crowdfunding could be the biggest boon for scam artists since Ponzi. As I understand it, the regulatory oversight is minimal. That demands DD from the investor; but real DD is something that seems near impossible given the small size/huge numbers of entities likely seeking funding. How many JPs are there out there? Not enough, I suspect.


    Will there be a business formed that examines the CF offerings? Who pays for the investigations? How many fund seekers could they actually look at ( and stay solvent) ?


    The whole things smells "off" to me. Sure, there will be some (widely publicized) successes. But it's the failures and scams that are more interesting. Maybe someone will follow those ;-(


    CrowdFunding Scams and Greed (a TV series on CNBC?)
    8 Jan 2013, 01:21 PM Reply Like
  • Next thing for corp worries is going to be a global push to collect taxes: Apple here and below Nokia offices get raided in India:


    Apple says $6B U.S. tax payout for 2012 equals '1 out of every 40 dollars' collected from corporations
    With a year-long congressional inquiry regarding the accounting strategies of several U.S. tech companies coming to an end, Apple on Thursday issued a statement saying it paid $6 billion in taxes for fiscal 2012, representing about 2.5 percent of all collected corporate taxes combined.


    Nokia's (NYSE: NOK) offices in India garnered some attention today, but not the kind of attention you want to have.
    According to India Times, Nokia's offices in Chennai were raided by Income Tax officials. The officials said that Nokia has not paid taxes while in India. Nokia is said to have skipped out on 3,000 crore (about $545 million) in taxes, according to the Times.
    No word on whether production has stopped in India or not. Nothing official has been released by either Nokia or India on the raids.
    Shares are indicated for a higher open Tuesday.
    News Provided by Acquire Media Corporation
    8 Jan 2013, 07:11 AM Reply Like
  • I think something new to watch is to see which corps are paying taxes and still meeting or beating earnings.....the ones to avoid or short is the ones paying zero and barely meeting earnings
    8 Jan 2013, 07:13 AM Reply Like
  • Add GM and GE to the top of that list LT.
    8 Jan 2013, 07:44 AM Reply Like
  • Very possible .... and many many more.
    8 Jan 2013, 08:20 AM Reply Like
  • Wondered when this downgrade would come, with a couple of years of huge new auto sales, it had to happen. Started to post it last week:


    7:19 AM Morgan Stanley downgrades Autozone (AZO) to Underweight with a new price target of $340. The action follows a cut by Piper Jaffray in the rating of O'Reilly Automotive yesterday which took the shine off the whole sector. Comment! [Consumer]
    8 Jan 2013, 07:43 AM Reply Like
  • Inevitable. I attribute the slow deterioration of the do-it-yourself auto maintenance cycle to 4 things:


    1. The dramatic increase in high tech control systems throughout the automotive product mix requiring extremely expensive specialized tools to analyze and repair cars...


    2. A quantum leap in the knowledge base and training needed to properly repair and maintain automobiles (using those "extremely expensive specialized tools")...


    3. Much higher quality original build standards and materials which have greatly stretched the maintenance schedules and extended the life spans of key components...


    4. Devious designs by OEmanufacturers with the clear intent to make servicing their products very difficult for even expert mechanics without access to dealer-level information denied the masses.
    8 Jan 2013, 08:46 AM Reply Like
  • yep, and this just adds more fuel to the fire to my post.
    8 Jan 2013, 09:23 AM Reply Like
  • (PSEC) is certainly making use of that big capital raise they made. At this rate they are going to need to raise more capital. Is there another offering possibility in the near future?
    8 Jan 2013, 10:21 AM Reply Like
  • To an extent their regular raises are predictable (inevitable, given their business plan)...


    But I would not expect one to occur this quarter or Q2.


    BUT again, if they encountered a really good opportunity...


    There is always the chance of another funding event with a company that pays out such a high percentage of their earnings in dividends, and who uses these fundings to pay for expanding the business into a target rich environment.


    When Sandy hit, one of the investment thoughts which ran through my mind was to question what impact it might have on PSEC's portfolio, short term, and medium-term... Whether it might open up some very promising potential deals for them.


    In the past it looks like they have made it a practice to allow new capital to begin to produce and lift the entire company's performance before going back to the well. Given the success they have seen recently, we can only wonder how MUCH progress in that direction is needed to constitute "enough".


    My WAG is that we have at least 6 months before another capital injection is needed, but the individual should do extensive due diligence for this one. I have been long PSEC for several years...
    8 Jan 2013, 10:32 AM Reply Like
  • New article about Mongolia Growth Group. Posting here for those not and/or no longer following Mongolia blog. I tried to ask the CEO the questions I felt came most frequently from potential investors that I could get him to answer. If there are questions I missed, let me know, and I'll try to get them addressed if possible.
    8 Jan 2013, 10:27 AM Reply Like
  • Outstanding interview, Jon. I will keep watching MNGGF until volume liquidity grows to a point closer to my personal investing strategy. I realize that means a pricing tradeoff -- but I try to keep that discipline.


    Thanks very much.
    8 Jan 2013, 10:43 AM Reply Like
  • MNGGF uplisted in Canada today and the stock is having a nice day (see one day chart; and/or compare Friday's close of $3.86 with action since announcement they would uplist after-market Friday). 2nd time in a few weeks that I've managed to call in a timely fashion when a stock was about to go up. Other was TRQ which one QC'er told me they took a quick 25% gain on after about two weeks (congrats!).


    Don't expect to have two calls in a row that work out this well for quick trades for a long time. Posting a note to relish my momentary run of prognosticating luck.


    For those reading my stuff, don't confuse my luck for any skill. I can tell you a long-term story and provide information on my travels, but I'm normally like someone trying to run fast with two left feet and a rope around my ankles on short-term calls.
    9 Jan 2013, 11:48 AM Reply Like
  • Jon, Those two calls you had just happened to make a lot of sense to me and their charts looked ripe as well as the time of year Jan., although I was in MGG last week before the announcement of the uplisting but still mainly because you brought them to my attention. I got TRQ at 7.22 and small amount of MGG at 3.90. I am out of TRQ only because I bought more Axion on Friday (I have to stretch out the same pot of cash)


    I hope I don't owe you any fees.


    On a side note I also played LYSDY from .60 end of last year to .73 and popped back out (again stretching out the same pot of cash. I actually think both LYSDY and TRQ have much more climbing to do, it is only that 1 cent on Axion equals a bit more than .01cent on either of those:-)


    Needless to say 2013 has looked really bright for me so far, but I am incredibly superstitious so saying this outloud is really bad but at least I have my TFH firmly strapped to my head.
    9 Jan 2013, 12:44 PM Reply Like
  • I almost forgot about you helping me with PMPIX last year, which I got a 30% gain on in my retirement account although I rode the 3/4 of it back down (bad move on my part).


    Cripes...I am going to be oweing you fees soon. You have more knowledge than you give yourself credit for.


    (I have to watch myself talking about my small success' though or else they are going to come after me.)
    9 Jan 2013, 01:12 PM Reply Like
  • jakurtz,


    Glad you're making money. The timing is a credit to you. It is my sincere hope that everyone reading my work outperforms me, preferably with me still performing at a decent clip too. Keep stretching :-)
    9 Jan 2013, 01:20 PM Reply Like
  • Interesting study, about 12 years late though:

    8 Jan 2013, 12:39 PM Reply Like
  • Here is a couple of other big boyz affected by India:


    10:40 AM Nokia's (NOK) Chennai, India plant has been raided by Indian tax officials, reportedly over allegations the company has avoided paying 30B rupees ($543M) in taxes. The raid comes as the Indian government mulls rules that would require a large % of tech hardware sold in the country be locally manufactured, potentially threatening the local sales of everyone from Nokia to Dell to IBM. Cisco's John Chambers and other tech execs have lamented the challenges of doing business in India. [Tech] 6 Commen
    8 Jan 2013, 12:47 PM Reply Like


    An excellent, if short, Forbes article about grid scale electric generation and the cost of maintaining the transmission/distribution portion of the system. Big $$ numbers there!


    Micro gas turbine cost and efficiency graphed. Good info.
    9 Jan 2013, 12:37 PM Reply Like
  • In the coming New Year, 2013, both Groundhog Day and the State of the Union address will occur on the same day. This is an ironic juxtaposition of events. One involves a meaningless ritual in which we look to an insignificant creature of little intelligence for prognostication.


    The other involves a groundhog. ..


    Sorry, i just had to post it !!
    9 Jan 2013, 02:48 PM Reply Like
  • a bit more onshoring of jobs...Nissan wants to produce 85% of sales that it sells in the USA
    1:30 PM Nissan (NSANY.OB) will begin manufacturing its all-electric Leaf model in the U.S. at a plant in Tennessee that is already the home base for Altima and Maxima production. The move falls in line with a corporate goal to manufacture at least 85% of the cars its sell in the U.S. in North America by 2015. [Global & FX, Consumer] Comment!
    9 Jan 2013, 03:19 PM Reply Like
  • American made cars now have new meaning. Chrysler is now an import from Italy. GM 10% canadian 90% govt/union ummmm socialist and GM pays no taxes.

    9 Jan 2013, 04:48 PM Reply Like
  • A bunch of executives in big companies sold stock last year to avoid the coming increased capital gains rate (from 15% to 25% in 2013) from the fiscal cliff deal. During 2012 Eric Schmidt sold $1B worth of his google and 108M of that in dec. Larry page sold shares worth $57M. Starbucks CEO $107M. Mack CEO of Teavana sold shares worth $333M.



    The question to ask yourself is where will those guys be putting that money now? You get there first and you win.
    9 Jan 2013, 08:39 PM Reply Like
  • ... off-shore bank accounts and real estate? Hard to invest in. Albeit, I'd love to form a fund to fund to front-run real estate in Singapore, Monaco, Caymans, St. Barts, etc. for just these moments...


    Has anyone registered the name Tax Evader ETF yet?
    9 Jan 2013, 09:53 PM Reply Like
  • "Has anyone registered the name Tax Evader ETF yet? "


    In 1893 Richter predict Germany would one day become socialist, and they would have to build walls to keep people in. The socialist part is just semantics. What he was really getting at is capital (which is just stored human labor) will always seek its highest return. In other words it will flee repression and seek opportunity. Its a law of nature. There is a difference between levying a tax, and levying a tax you can actually collect. Tax evasion is just nature doing her thing. We can either learn to use the laws of nature to our advantage and prosper, or ignore them and experience austerity.
    10 Jan 2013, 03:12 AM Reply Like
  • well put Jak, but don't be surprised if they don't just sit on it for a while. Like until the budget/debt limit is sorted out....etc. I really don't expect them to feel they have to be 100% invested. I know GS has been buying EU stocks and corp. bonds / preferred
    10 Jan 2013, 04:34 AM Reply Like
  • Jhooper
    "In 1893 Richter predict Germany would one day become socialist, and they would have to build walls to keep people in. The socialist part is just semantics. What he was really getting at is capital (which is just stored human labor) will always seek its highest return. In other words it will flee repression and seek opportunity. Its a law of nature."


    Some will, however the number and the multiple types of minorities, who stayed in Germany and other effected areas over more than a decade as their situation got worse was incredibly large. Some saw the writing on the wall and left a decade earlier.
    10 Jan 2013, 08:50 AM Reply Like
  • (CALVF.PK) gold production going up 90% in Zimbabwe. Already sorted out indigenization stuff with gov't. Wonder if production up 90% plus a new dividend pay out is enough to unleash this stock... yet.
    9 Jan 2013, 11:09 PM Reply Like
  • 1:11 PM Unusual trading in Wells Fargo (WFC) options is noted, writes Steve Sears, with big buyers scooping up January $36 calls (current price: $34.91). Traders usually take advantage of inflated prices by selling options ahead of earnings, but the collapse in the VIX has made these puppies a better buy than sell. [Financials] Comment!
    10 Jan 2013, 04:48 AM Reply Like
  • 9:31 AM More on Nokia: Lumia shipments totaled 4.4M, up from Q3's 2.9M and generally above forecasts. Stephen Elop says Lumia 920 sales were supply-constrained. Total smart devices sales were 6.6M, -64% Y/Y (withering Symbian base), but thanks to a higher Lumia mix, ASP jumped to €182 from Q3's €155. Mobile phone units were 79.6M, -15% Y/Y, ASP roughly even Q/Q at €31. 9.3M Asha phones sold, up from 6.5M in Q3. NOK +17.6%. (PR) [Tech, Earnings] 14 Comments
    10 Jan 2013, 11:46 AM Reply Like
  • I know this is a bit more geared for a "Political Quick Chat," but I cannot seem to locate where that went (sorry if I'm posting wrong).


    Just got an email from our Company Controller, stating that our Paychecks will have noticeably lower Net Pay, citing the Payroll Tax increase and Higher Medical Insurance Premium Deductions. -.-' It's apparent that this whole "Soak the Rich" or whatever it was called is working... clearly... because a meager little college student making it on 22k is obviously FILTHY FRIGGIN' RICH!!!!!!


    P.S. Again, my apologies if this is in the wrong quick chat. If there is a political Quick Chat, just link me, please.
    10 Jan 2013, 06:24 PM Reply Like
  • The rich or the so called millionaires and billionaires didn't really get taxed more. A progressive income tax is really a barrier to prevent other people from attaining wealth, as such, Buffet advocates for taxing the rich, because he knows he won't really pay that much more in tax but he does know it will keep his competition held down and he knows he will gain favor in the eyes of the media and the vampires by claiming to be sympathetic towards the vampires.


    People with high net worths have the greatest tax shelter of all in an income tax environment. They can simply stop working and presto, no income to be taxed (or at least relatively, no income).
    11 Jan 2013, 12:21 AM Reply Like


    Actually it does belong here because the less money you have to spend the less you have to invest or buy a product. So i will have an impact on your investments, and a companies bottom line..


    Enough people don't buy, we slip into a recession!!


    My daughter is a substitute Teacher due to lack of jobs and she will be feeling this as well...
    10 Jan 2013, 07:43 PM Reply Like
  • Nissan moving Murano production to Mississippi - USA

    10 Jan 2013, 08:41 PM Reply Like
  • Here is an interesting China stat that I was unaware of:

    10 Jan 2013, 08:52 PM Reply Like
  • The female shortage number cited (40million) is nonsense. The actual number is much larger.


    If one estimates the totals as something like 500million males in the target group, and given the pervasive efforts toward selecting male babies (officially sanctioned poilicy at work now for many decades), the actual shortage may be more like 30% rather than 8%. There has been speculation that the creation of the large migrant industrial worker class was encouraged to address this dangerous sexratio imbalance rather than to yield a good workforce for new manufacturing jobs.


    Its odd that few analysts examine the ramifications for domestic market growth in China with this stark reality in mind...


    China is looking at a baby bust even more dramatic and economically important than the US baby boom after WWII. Its still a decade away, but its also not one of those problems that can be solved with a quick policy change. As with a great many things, China is walking a razor's edge...


    Barefoot, but not pregnant.
    10 Jan 2013, 09:12 PM Reply Like
  • thanks for the comment....and I agree expecially with the "no quick policy change will help it"
    10 Jan 2013, 09:36 PM Reply Like
    11 Jan 2013, 07:39 AM Reply Like
  • Nice one jpau
    11 Jan 2013, 07:45 AM Reply Like
  • LT, it may also prove useful to mention that nature's natural ratio is 3 males to 1 female to begin with, so the cards were stacked against girls to begin with! Also, this is still practiced in countries like Indonesia and India as well (I wish I had my source to cite. I was reading this in a science magazine quite some time ago). Apparently, these countries citizens try to determine the sex of the baby in the womb and they will just abort it before even letting it live once they realize it's a girl.


    There was also a somewhat similar "tradition favors the male" issue in Japan. Although they were not killing off their infant females, they were telling their females that they were next to worthless, that they were to run the household flawlessly, but that their husbands/brothers would see all the honor and fruits of the labor. Getting married was apparently as good as a death sentence, and as a result a marriage shortage (subsequently followed by a baby shortage, due to stringent rules on single mothers) ensued.



    Women would rather live single and free under their parent's roofs for the rest of their lives than get married, because they didn't want to become "Domestic Slaves" so to speak.


    Then, the Earthquake hit, and Japan saw a huge marriage boom after such a long dry spell.


    My fiance tells me sometimes that he wishes an asteroid WOULD land into the Earth, because natural disasters have a way of waking people up. I'm sorry to say that I see where he is come from.
    11 Jan 2013, 10:46 AM Reply Like
  • Spawn
    Your sex ratio is completely false.


    "In anthropology and demography, the human sex ratio is the sex ratio for Homo sapiens (i.e., the ratio of males to females in a population). Like most sexual species, the sex ratio is approximately 1:1. In humans the secondary sex ratio (i.e., at birth) is commonly assumed to be 105 boys to 100 girls, an assumption that is a subject of debate in the scientific community. The sex ratio for the entire world population is 101 males to 100 females."
    11 Jan 2013, 11:17 AM Reply Like
  • Spawn


    Ancient Maya sacrificed boys not virgin girls: study

    11 Jan 2013, 05:23 PM Reply Like
  • Unless your Gaddafi, though I guess it didn't work out too well for him.

    13 Jan 2013, 06:49 PM Reply Like
  • No inflation either ?

    10 Jan 2013, 09:10 PM Reply Like
  • but to offset it, American Express is laying off 5400 - creating weird employment numbers again - IF financials ever get finished cost cutting, we may begin to gain big time.


    SYDNEY (MarketWatch) -- Ford Motor Co. F +2.67% said Friday that it's planning to hire 2,200 salaried workers in the U.S. this year to support the introduction of new products. The job additions announced Friday were the company's largest increase in new salaried workers in more than a decade, it said. Ford is now more than halfway to reaching its target of creating 12,000 hourly U.S. jobs by 2015, it said.
    11 Jan 2013, 04:00 AM Reply Like
  • 3:08 PM The grain pits get set for the inaugural midday release of USDA crop data. Previously issued 2 hours prior to the open of floor trade, the report is set for 12 ET on Friday. The January report is a big one, with limit moves the norm recently following its release. The new time is sure to lead to a surge in midday trading volume, but at the expense of volume prior. [Commodities] 1 Comment


    USO, UCO 3:06 PM Crude oil closes near four-month highs on news Saudi Arabia cut oil output nearly 5% last month to just over 9M bbl/day, well off highs above 10M reached during 2012 and the country's deepest production cut in almost three years. As demand for OPEC crude falls, the Saudi cut shows the kingdom "still wants to have, and does have, the role as the swing producer in the market." [Commodities, Energy, Global & FX] Comment!
    11 Jan 2013, 04:13 AM Reply Like
  • Way OT: Jerusalem in the snow; cool pics:
    11 Jan 2013, 10:46 AM Reply Like
  • Could be a really good Gold and silver buying opportunity in the works?

    11 Jan 2013, 03:31 PM Reply Like
  • DG


    What will cause all of this manipulation to end? Physical buying ?


    Otherwise i really don't see an end in sight !! Besides a collapse of the dollar...
    11 Jan 2013, 03:52 PM Reply Like
  • I doubt the manipulation ever ends so it will be determined by the collapsing dollar.


    I see the physical buying, USA, China and India putting a hurt on the manipulators but what will really end it fast is if folks take delivery of contracts....this will kill the manipulation fast. I think we only need one pissed off billionaire to start doing that and it all ends.


    Now find a billionaire that is not part of the machine and get him to start to pull 30-40 million of silver out of the wharehouse every month and see what happens. Problem is the last folks to attempt that were the Hunt brothers. If they had not used margin they might have been OK.


    There is still no position limits since a judge through them out in Sept 28th 2012. So the squid still runs the markets.

    11 Jan 2013, 04:52 PM Reply Like
  • What may be a tradeable event would be ANYTHING which drives a wedge between the 2Bigs and the government...


    Say, lookie there...


    Geithner is on the way out...


    Speculation about someone new at the Fed, too...


    As usual, it will take someone with good instincts and a strong stomach to execute, since the process probably points to our collective detriment...


    But that's trading for profits in a crony capitalist/socialist system.


    An old saying springs to mind, and it may even be in proper context:


    "Its not what you know, but who you know..."
    11 Jan 2013, 08:05 PM Reply Like
  • Do there seem to be a greater than usual number of executive branch workers bailing after an election? I wonder why now, when their guy won?


    Could it be that they all know the economic fecal matter is about the hit the rotary impeller? Why stand close to the likely source when interest rates spike and inflation obviously cranks up. Better to go to that semi-private think tank job now and see if you can leverage who you know into a better retirement program.
    11 Jan 2013, 08:33 PM Reply Like
  • Correct. For a good ol' boy network to function properly, you have to create the correct mix of good ol' boys. One of the most effective techniques is to appoint a platoon of likely young fellas to high office, let them get some friendly face time with the MSM, and then launch them into a strategic, well-paid location where they can do the same for another layer downstream.


    Social networking pre-WWW, and it still works just fine...
    11 Jan 2013, 08:38 PM Reply Like
  • Anyone here follow ANV?
    11 Jan 2013, 08:42 PM Reply Like
  • Here's an op/ed article on the housing "recovery"--Blackstone is spending a hundred million a week on single family homes.
    11 Jan 2013, 09:13 PM Reply Like
  • OG: I have been following institutional housing buying for a couple of months. In Vegas, institutionals are buying 50 houses at once. They are not reselling them, but renting them out. What remains to be seen is if these institutionals are buying the homes, and then getting cheapo mortgages on them later, and then using that cash to buy even more homes.


    This challenges the drifting idea that housing is truly recovering, and has me leaning toward the idea that another major real estate scam/bubble is afoot.
    11 Jan 2013, 09:41 PM Reply Like
  • OG


    I too have been following this investment idea...I think it's going to end badly one day...


    Some people who have never been landlords have a huge experience ahead, believe me!!
    11 Jan 2013, 10:08 PM Reply Like
  • I see these sales of foreclosed homes to institutional buyers as a political chess move preparatory to elimination of home mortgage interest deduction and tightening of government control over housing in general.
    11 Jan 2013, 10:40 PM Reply Like
  • Maya, I see a possible inflation play at work here. It boils down to whether the entity buying the houses used it's own money to buy for cash or found others to hold the mortgage. Using enough cash to close the deal and then rolling 80 to 90% of the cost to someone else is my guess.


    That allows the investor to hold real property while giving the inflation risk to another institution. With today's Fed enforced cheap long term loan rates, this idea would allow the one controlling the property to let inflation reduce the loan cost while having a real physical asset. All at the cost of a 3-4% mortgage loan. I like the idea a lot!


    Sure, there will be some upkeep problems with holding the houses, but the rental income should cover most of that. You can also raise the rent as inflation pushes up the "fiat currency" value of the house. The deal could go cash flow positive in a few years with 5+ percent inflation, which is a given in my view.
    12 Jan 2013, 01:32 PM Reply Like
  • SB..that is exactly correct...I know for a fact that they bought houses in Vegas for as little as 20-25 cents on the dollar at first. It does not take much for them to double.


    I think most of this money is investor money....and btw...I read where BlackRock/Blackstone one was rushing to spend $2.5 billion now.
    They did well in Phoenix, and Miami, now in Atlanta which is the last extremely depressed mkt, but homes soared there quick off the bottom due to the other "carpetbaggers" coming in trying to duplicate them. They ran local investors out who were doing it on a small scale with prime property first..


    Excellent point u made on "holding a physical asset"...and don't forget these guys are only getting 1-2% on CD's or gov.t bonds which I think we are seeing the very first of the big boyz bailing on bonds and putting real cash to work. It ain't going to Wall St. either.
    12 Jan 2013, 03:01 PM Reply Like
  • I could be mistaken but I believe these home sales are another government program designed to concentrate power levers, i.e. - only available to pre-qualified purchasers of 10s of homes if not 100s. Individuals and small partnerships may be able to participate, but I don't think so.
    12 Jan 2013, 05:23 PM Reply Like
  • D-inv: I never attribute to conspiracy what can be explained by greed and laziness. Requiring investors to take larger amounts of distressed property in one gulp simply makes things easier for the guvmint. Remember, they aren't really in the guvmint business to help the little guy. Cutting a big guy a break is important for making "friends with contacts" that come in very handy in later, after guvmint job, life.
    12 Jan 2013, 06:09 PM Reply Like
  • Individuals are offered the homes first....for the first 15 days on the mkt. they are only available to "home owners" who are going to "live there".
    then it is opened to investors.


    These huge groupings are probably only offered after the house has been on the mkt. say over a year or longer.
    12 Jan 2013, 08:42 PM Reply Like
  • "Cutting a big guy a break is important for making "friends with contacts" that come in very handy in later, after guvmint job, life. "


    Government policies like those bundling large numbers of homes for sale to "deep pockets" are formulated by political appointees, i.e. - people with preexisting political ties to elected Executive Branch officials and their allies in Congress and at the State and local level. What you interpreted as suggestion of conspiracy is what I regard as modern extension of Adam Smith's counsel on collusion among guild members to control markets. It is part and parcel of collusive crony capitalism.
    12 Jan 2013, 09:03 PM Reply Like
  • I didn't mean to imply conspiracy. I reread my post and don't see that I did. However, cronyism is just as good an explanation as conspiracy, IMO.


    I believe LT about the "little guy first" rules. But the pockets of the little guy don't have the big down payments lenders now require for a loan. Unless it is another "low up front cost" loan situation buttered by the tax payer.


    Dog save us from our own govmint.
    13 Jan 2013, 05:43 PM Reply Like
  • For those who publish them: Instablog change.


    In the contributor center, someone complained that every time someone edits a previously posted instablog the date updated to the current date. This was something I liked, others didn't, and others won, and it was changed. (For me, I update a blog to make it current... for others, they have a stream of ideas they want to keep in order... different strokes for different folks...)


    An added layer to this change is instablogs now publish as of the date you first start working on them. So, I've been working on some instablogs about investing in Sri Lanka since December 23, 2012. I published them for the first time today on January 11, 2013, but they published with a date of December 23, ensuring that they are as hard to find as possible, even for me. (I technically published 3 blogs after the ones I published today by date order, even though I published the others before the ones today (but after December 23)... if you get my time warped drift.)
    11 Jan 2013, 09:21 PM Reply Like
  • Jon: A workaround? Make a (few?) "scratchpad" instablog(s). When you have it perfected, S & P from the scratchpad to the "real" one and delete the scratchpad one.


    Or, like me. I use my local word processor, save the final in Word '97 format and then load from that. Usually just minor adjustments from there (links may have to be pasted again, etc.).


    11 Jan 2013, 10:05 PM Reply Like
  • This issue has been fixed. Thanks to the SA crew.
    13 Jan 2013, 07:53 AM Reply Like
  • Felix Zulauf interview
    11 Jan 2013, 09:44 PM Reply Like
  • Yo! Wow! Incredible! Unique!


    This full moon bright comet I wrote of earlier now has a name: Ison.


    Seems this recently discovered comet will not just be brighter than the moon, but FIFTEEN TIMES brighter. You will be able to see this comet during daytime, full out sun, especially during this next Christmas season.


    15 times brighter than the moon?


    How the eff did I/we not know about this sooner? Pretty darn close pass by.


    The 3-mile wide asteroid which passed last month between moon and earth that got eclipsed, one which would have obliterated 800 square miles of landscape, and yet we supposedly only knew of this fly-by event to occur two days in advance, has me rethinking how our governments, all human beings, track the heavens, ever so dismally.

    13 Jan 2013, 01:15 AM Reply Like
  • 5:21 PM The Energy Department is reviewing 16 applications for liquefied natural gas export terminals and could begin making decisions early this year. Big gas users, such as DOW, EMN and NUE, which have benefited from the fall in energy prices via the shale gas boom, join together to keep U.S. gas in the U.S. Blocking such exports would help those few but hurt many more, Michael Economides writes. [Energy] 3 Comments
    13 Jan 2013, 05:35 AM Reply Like
  • LT: "... would help those few but hurt many more".


    Obviously he's done an in-depth on that, right?


    Manufacturing "renaissance"? Lower energy cost + lowering wage costs.


    Reduced heating cost for for folks with falling wages, allowing greater consumer discretionary spending? Lower energy cost.


    Less expensive products? Many products (lot of plastics) use NG as a feedstock.


    Lower transport costs? In places where infrastructure is in place (UTAH, e.g) NG-powered vehicles.




    Must be a corporate shill putting out that assessment.


    Here's the deal, IMO. Locally-produced products from locally-produced raw materials using local labor providing goods to local (and some foreign) consumers benefits the population, the economy and corporations as a whole, reduces growth of our debt, reduces inflationary forces, increases tax collections which helps reduce budget-deficit growth, ...


    When they first announced the plans to export more I began swearing like a drunken sailor because of the ill-effects on the many and benefits for only a few.


    We need to stop exporting our non-renewable real wealth to others. I'm not an isolationist and do believe in trade, but we need to husband *critical* resources and (inexpensive) energy is one of those. Not doing so leads to such as we've observed with REEs - dependency on others.


    There's a lot to be said for self-suffiency.


    13 Jan 2013, 08:26 AM Reply Like
  • I agree with you on keeping that energy here in the USA.


    I suspect the article was a rebut to the one saying Nat gas exports would raise the price to global parity of about $12. Even Cramer said this and that the export business only benefitted a few...and i say that we all benefit by cheap prices here. In all areas.
    13 Jan 2013, 09:06 AM Reply Like
  • "There's a lot to be said for self-suffiency."


    Not necessarily. Remember the phrase, "starving children in China would be happy to eat that?" If you look at the policies of Mao, they echoed your sentiment above. Under Mao China was not very interested in trade. They attempted to "keep all those local jobs", and the result was "starving children in China". Once Mao died, the leadership in China began to change course. They began to open up trade, now granted, they basically switched to a mercantilist economy, and if you note the yield on the 10 yr, it used to track with the S&P and in the 80s that changed because China was engaged in weakening their currency against ours. However, to the extent, the left the idea of "self-sufficiency", started to allow some private ownership, their economy began to grow.


    The problems we have with energy are all gov created. Take gasoline for example. Govs build the vaunted infrastructure. In fact its all the stimulus rage. Gov roads are politically driven instruments then. The result is lots and lots of roads which become a subsidy for cars and thus you have lots and lots of cars which require lots and lots of gasoline which then result in lots and lots of fighting.


    The best option is still the most logical option. Nature has provided us with laws. If we understand those laws we get rewarded. If we resist those laws we get punished. Prices are part of nature's laws, and to learn about them, we must be free of coercion. Gov's only tool is coercion, thus when it trys to use that coercion to interfere with prices, people become blinded to one of nature's signals, and the result is we get punished. And all our rhetoric about collectives and caring won't change the fact that nature doesn't care about our rhetoric. All nature care's about is if we are paying attention to the laws or not. When we do, we get rewarded. When we don't, we get punished.
    13 Jan 2013, 06:55 PM Reply Like
  • And don't we continue to flare off large quantities of gas? If we have a surplus of natgas, exporting some would reduce balance of payments. Not as easily transportable as oil, I'd think it would be a long time, if ever, before there would be global parity.
    14 Jan 2013, 08:46 AM Reply Like
  • go do your DD,,,the infrastructure is being built as we speak
    14 Jan 2013, 09:00 AM Reply Like
  • " And don't we continue to flare off large quantities of gas?"


    Flaring of gas in this country is almost certainly done as a consequence of emergency situations to avoid devastating explosions or as a means of minimizing environmental damage and risks while producing liquid hydrocarbons (petroleum) from new wells drilled where pipeline infrastructure is not available.
    14 Jan 2013, 09:10 AM Reply Like
  • Yes, and Cheniere is in the lead, but it's not as though there will be pipelines going straight to Asia and Europe. Transporting natgas is a lot less efficient than moving oil.
    15 Jan 2013, 09:27 AM Reply Like
  • Some companies in the US and South America are using micro gas turbines to turn waste gas into electricity. The gas turbines have a long life and time between maintenance and so are not a headache to the well operator.


    The controlled combustion in the turbine produces low amounts of hydrocarbon combustion products and so meets environmental regs.
    15 Jan 2013, 11:38 AM Reply Like
  • I think Capstone (CPST) is a leader in this market, but its stock has been pummeled recently.
    16 Jan 2013, 08:29 AM Reply Like
  • 11:40 AM Investors may no longer believe in managed equities - $121B flowed into equity ETFs in 2012 while $147B flowed out of stock mutual funds - but they still like actively managed bonds. More than $300B flowed into bond mutual funds, about quintupling the amount into bond ETFs. This wave may soon begin to swing, as the success of Pimco's BOND starts a rush of actively-managed bond ETFs. Comment!
    13 Jan 2013, 05:36 AM Reply Like
  • The WSJ had a recent article (Investors Sour on Pro Stock Pickers) saying people were leaving managed funds for ETFs -- low fees. Then I think I heard Friday on CNBC that Janus Capital had the biggest inflow sine 2001. Huh?
    13 Jan 2013, 12:27 PM Reply Like
  • LT, anyone: I have a question about ETFs. Do they actually buy and sell stocks or do they just replicate the price movement of the stocks they "hold"?


    13 Jan 2013, 08:09 PM Reply Like
  • They are supposed to buy the stocks they list. Like a mutual fund, but they have ways to "hedge" triple, and double ETF's, so who knows..
    IMO, the ETF thing will be a big shoe to drop someday, I don't know of many that you can buy and hold, think TVIX. These are gamblers dreams when there's volatility.
    13 Jan 2013, 10:42 PM Reply Like
  • Sili--ETF's can do either--it depends upon the particular fund, read the prospectus. Some funds are not limited to stocks, but actually purchase futures contracts. Others have buy/write features to hedge.
    ETN's are strictly derivatives and depend upon the credit worthiness of the issuing company. ETN's are often lumped together with ETF's, although together they should be called ETP's. (P is for product, a generic term.)
    There is a wealth of information on ETF's available, including a whole section here on SA.
    There is no reason to take a "so who knows" attitude; the research has already been done for you. Also, most brokers have detailed analysis on etf's available.
    14 Jan 2013, 07:42 AM Reply Like
  • SH: I don't invest in ETFs right now (for a long time I liked them for getting exposure to the emerging markets, like Vietnam). In general I think of them as valuable for an investor looking to invest in an entire sector or national market who does not look at individual stocks within that sector or nation. Its critical to do as OG indicates and do the DD, just as with individual stocks. My first cut is to determine whether I like the specifics of the ETF. Are the fees reasonable and clearly understandable? Are the investing rules (minimum market cap, specific sector treatment) logical and will they generate good results? Does the nameplate really replicate some worthwhile investment in the sector or nation... For instance, the REMX ETF which is theoretically for Rare Earths is in reality dominated by strategic metals other than rare earths, plus brokers and middlemen. It is, imo, a poor substitute for the actual sector, and thus an example of the sort of ETF which fails to meet its mission. There are many such out there, so its just as with individual stocks, let the buyer do his research or suffer the consequences.
    14 Jan 2013, 08:23 AM Reply Like
  • Thanks all. My question about ETFs is answered.


    My problem with all the more exotic (then single company stocks) vehicles is "do I really OWN anything other then promises?" With the synthetic assets variety, the answer seems to be NO.


    I feel a bit queasy once the financial engineer gurus get involved. Remember synthetic CDOs?
    14 Jan 2013, 12:26 PM Reply Like
  • 10:54 AM China moves a step closer to allowing ConocoPhillips (COP) to fully resume crude oil production in its waters after sanctioning the company over a 2011 oil spill, as the government's top economic planning agency approves a revised overall development plan for the Penglai 19-3 oilfield in Bohai Bay. COP owns a 49% stake in the 168K bbl/day field and acts as operator, while Cnooc (CEO) has 51%. [Energy, Global & FX] Comment!


    WFC, XLF 10:53 AM Wells Fargo (WFC) will indeed request permission from the Fed for a bigger capital return in 2013, says CFO Tim Sloan on the conference call. Q4 repurchases (42M shares) were not returns as they were done mostly to offset employee stock awards. A theme of the call: The bank has too much money and nowhere to profitably invest it. One popular way - mortgage lending - looks to be slowing, with $125B issued in Q4, down from $139B in Q3. Shares -1.6%, with the rest of the banks following. (earnings) [Financials, Breaking News] 3 Comments
    13 Jan 2013, 05:38 AM Reply Like
  • 5:31 AM U.K. insurer Aviva (AV) and Singapore listed CIMB Group (CIMDF.OB) have reportedly agreed to sell their Malaysian insurance JV to a consortium of Canada's Sun Life Financial (SLF) and Malaysian state investor Khazanah Nasional for 1.7B ringgit ($563M). The winning bid beat Manulife (MFC) after an 8-month auction. The sale is part of Aviva's strategy of exiting non-core ops. Comment! [Financials, M&A]
    13 Jan 2013, 05:40 AM Reply Like
  • The Obama administration is finishing a proposal to maintain a government safety net for housing finance while allowing private capital to take on the up-front risk. A date for the plan’s release hasn’t been set. Meanwhile, Republicans and Democrats in Congress are preparing to introduce bills next year to wind down Fannie Mae and Freddie Mac.
    13 Jan 2013, 06:03 AM Reply Like
  • interesting....
    13 Jan 2013, 06:20 AM Reply Like
  • Wonder about a clean energy push globally ? take a look

    13 Jan 2013, 06:34 AM Reply Like
  • Interesting speculations/thoughts by George Friedman on the US economy and where it is going. Covers decades of changes. I found it very interesting.

    14 Jan 2013, 12:28 PM Reply Like
  • "In short, it is never wise to buy at the top of an artificially inflated market and that is precisely what this market has become. I believe the above has shed some light on an important debate and has given investors reason to beware of U.S. stocks (SPY) (QQQ) in 2013".


    From "Repoed! How The Fed And Depositors Fund Banks' Big Bets" by Colin Lokey.


    Nothing we didn't already know, in concept, but provides the "nuts and bolts" that confirm what we know.



    14 Jan 2013, 01:13 PM Reply Like
  • Good read. Thanks, HTL.
    14 Jan 2013, 03:02 PM Reply Like
  • Ulysses de la Torre wrote a really good piece on frontier and emerging markets that is not getting a lot of views from what I can tell. Among other things, he has some interesting chart that the Turkish, Filipino, and Thai ETFs not only performed well last year, but actually significantly outperformed their underlying indexes.


    A Few Thoughts On The Top Frontier Markets' Stock Exchanges Of 2012
    14 Jan 2013, 02:55 PM Reply Like
  • Apple opens BELOW $500 bucks...Been a while since we have seen these numbers!!
    15 Jan 2013, 09:33 AM Reply Like
  • Debt Ceiling Fears Simply Theater For Gold Bears

    15 Jan 2013, 10:15 AM Reply Like


    I follow this author and he pulls no punches. If you haven't you should read some of his old articles..Very refreshing..


    15 Jan 2013, 10:19 AM Reply Like
  • Chen Zhiwu (Yale Professor): Be Prepared For A Fiscal Crisis In China Within Three Years (4 1/2 minute interview)
    15 Jan 2013, 10:48 AM Reply Like
  • Thanks Jon, good perspective to chew on.
    15 Jan 2013, 11:00 AM Reply Like
  • Entered into a small position in (CPST) this morning on the plunge.
    Could find no reason for the plunge. This is one facet of a shale oil/gas drilling play.
    15 Jan 2013, 11:34 AM Reply Like
  • CPST is "one facet of a shale oil/gas drilling play?
    15 Jan 2013, 11:37 AM Reply Like
  • A lof of their business is centered around providing power to un-electrified gas/ oil rigs.
    15 Jan 2013, 11:47 AM Reply Like
  • Thanks for the elaboration, FPA. Interesting info.


    I do have a few questions, though, on economics of the offshore platform micro turbine system transferability to onshore pad drilling operations. Definitely worth investigation.
    15 Jan 2013, 12:07 PM Reply Like
  • The CPST family of micro-turbines also burn unprocessed waste gas with very low emissions and so are one way to avoid flaring and still satisfy emissions regulators.


    They have very modest upkeep requirements and long run times between tear-down type maintenance.


    They cost more per kW initially but have better long term costs then piston type ICE generators. They have no circulating cooling fluid or oil system, which reduces upkeep costs quite a bit. No oil changes!
    15 Jan 2013, 12:17 PM Reply Like
  • My questions about micro turbine power generation from gas that would otherwise be flared relate to pad power requirements vs offshore platform requirements, relative cost of running grid power lines to pad locations, relative costs of creating a centralized micro-grid connecting multiple drilling/production pads, and future drilling in the various shale formations.


    Drilling in sparsely populated, undeveloped areas like the Baaken/Three Forks plays will no doubt continue and some micro turbine sales could well occur there. Drilling in other, less sparsely populated and with significantly more oil/gas and grid infrastructure in place, though, look to account for a rising share of future activity.
    For further flavor regarding potential future oil/gas developments, scan
    15 Jan 2013, 12:58 PM Reply Like
  • Capstone's oil and gas sales are rapidly increasing and equaled around 60 percent of the company's total revenue through the first three quarters of fiscal 2012. Here is a link to an SA article that talks about (CPST) and the Eagle Ford Shale Play.


    It's a speculative play as they are still not making money, but I figure their sales opportunities will greatly expand with massive increases in shale oil/ gas drilling. There is also an acquisition probability.


    HTL has forgotten more about the stock than I will ever know. I track it, and have been waiting for an entry price. The plunge today was sufficient to trigger my entry order.
    15 Jan 2013, 12:25 PM Reply Like
  • FPA: I'm suspecting another buying opportunity in the $0.6x range. This because of the *drastically* reducing short interest of the last 6 months or so - it *appears* to me that price is being held down so that shorts can exit. Down 29.75% from 6/15/2012.


    Settle Date Short
    12/31/2012 36,832,299
    12/14/2012 39,158,828
    11/30/2012 40,182,897
    11/15/2012 40,043,960
    10/31/2012 42,179,389
    10/15/2012 42,551,393
    09/28/2012 44,020,242
    09/14/2012 45,630,302
    08/31/2012 46,794,243
    08/15/2012 49,102,654
    07/31/2012 50,848,402
    07/13/2012 49,623,374
    06/29/2012 50,883,583
    06/15/2012 52,431,170
    05/31/2012 51,178,099


    I have some dry powder and am awaiting that.


    15 Jan 2013, 12:58 PM Reply Like
  • Thanks again for the elaboration, FPA.
    15 Jan 2013, 01:02 PM Reply Like
  • That's very interesting HT... I will be lurking with you.
    15 Jan 2013, 01:06 PM Reply Like
  • I've been lurking on this one for awhile, too, FPA. It has the volume liquidity I like to see, but HTL warned me a few months back about its price supports and resistance (back when it was about $1.19!) Like you said -- " HTL has forgotten more about the stock than [we] will ever know" and I really appreciate his patience with my basic questions on this one. My positions have a lot of breadth and depth in the energy space, but CPST would fill a unique niche -- at a good entry price.


    Does anyone have more details regarding the flag Fidelity has on CPST which states "Deficient -- Issuer Failed to Meet NASDAQ Continued Listing Requirements"?
    15 Jan 2013, 01:57 PM Reply Like
  • Mercy: Trading below $1 is the reason. There's a *lot* of time to fix it, with several points along the way that have extensions available.


    We went through this a few years back and it recovered to over $1 with no problem, over time.


    When the shorts have bailed enough, I expect the price will begin to rise again. A lot of the shorts were big IH holders that played both sides, like Gilder, Gagnon and Howe. So they sway the market via their influence with the brokers, IMO.


    CPST has an order in hand that adds 29(?) units per quarter over two years just by itself. So if the rest of the normal order bookings hold up, that should help margins quite a bit.


    Headwinds include the recent bankruptcy of Greenvironment PLC in Europe. We don't yet know the hit to the AR. A lawsuit has been filed by CPST against the owner, I presume to recover since Europe wisely allows personal responsibility to be part of their equations.


    15 Jan 2013, 02:26 PM Reply Like
  • It went below the minimum $1.00 closing bid some time ago... that usually means its not going to get listed on NASDAQ.
    15 Jan 2013, 02:30 PM Reply Like
  • Looks like it was 10/5/12. Only takes 10, or is it 30, days above to requalify. I'd have to go look at Nasdaq requirements again to confirm.


    But there are extensions available that delay the de-listing. CPST is already on the Nasdaq, so it's not a matter of getting listed, just avoiding de-listing. One of the common ploys, which is usually deleterious to the pps, is a reverse split. But any plan submitted to Nasdaq which they see as getting price back up usually gets the extension accomplished.


    15 Jan 2013, 02:38 PM Reply Like
  • Thanks HTL and FPA. I saw their missed $1 minimum price requirement referenced here with a 2/22/11 deadline:
    I guess lots of folks have an incentive to drive the price up again over $1 to keep the listing active -- which may pose additional opportunity/risk.
    15 Jan 2013, 02:42 PM Reply Like
  • 12:30 PM Toyota's (TM -0.4%) top exec for its North American operations suggests the automaker might produce the Prius in North America in order to be closer to where the model is seeing its strongest demand. Last year, Toyota increased Prius sales in the U.S. by 73% to reach 240K units. Comment! [Global & FX, Consumer]
    15 Jan 2013, 12:34 PM Reply Like
  • Maybe this explains CPST today: Meeting with investors and JMP Securities. I don't subscribe, so no details.



    Thx to Gene_Genome at InvestorsHub.


    15 Jan 2013, 03:37 PM Reply Like
  • I wonder if they are thinking of going to the well...
    15 Jan 2013, 03:53 PM Reply Like
  • I haven't checked their filings in a long time, but ISTR they had enough cash to not need to do that for a long time (several more quarters?).


    15 Jan 2013, 04:00 PM Reply Like
  • Would they use services of a JMP Securities type outfit in a reverse split?
    15 Jan 2013, 04:32 PM Reply Like
  • D-Inv: I have no idea yet.


    15 Jan 2013, 07:36 PM Reply Like
  • D-Inv: Some possible more info.



    And now JMP says it's a possible buying opportunity.



    16 Jan 2013, 08:47 AM Reply Like
  • Anybody considering getting into (VIX), (VXX) or (VXZ), as a one month or so trade?


    VIX is at a 52 week low. Is the market telling us that the debt ceiling is not a concern?


    Small sample: I witnessed a little old lady 80-ish freaking out about entitlements at the Post Office today.
    15 Jan 2013, 04:42 PM Reply Like
  • "Small sample: I witnessed a little old lady 80-ish freaking out about entitlements at the Post Office today. "


    Freaking out about concern that entitlements a) will be cut or b) will not be cut?
    15 Jan 2013, 05:00 PM Reply Like
  • Maya
    Most of the things I read it as not going to happen, but pressure will intensify. Probably run up before the event tho, maybe get out with enough to cover your bet a few days before. Maybe let the rest ride or just get out and wait for the next event. There is another event in March.


    A quote from the POTUS. when he was voting against the debt ceiling raise.


    “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. ... I therefore intend to oppose the effort to increase America’s debt limit.”


    — Then-Sen. Barack Obama, floor speech in the Senate, March 16, 2006


    As the saying goes, “where you stand depends on where you sit.” This is certainly true of the votes to boost the national debt limit, where almost by tradition, the party not holding the presidency refused to support an increase in the debt limit. (One big exception, as we have noted, is in 1953 during the Eisenhower presidency.)


    The president has acknowledged that his previous vote against the debt limit was “a political vote.” On Monday, at a news conference, he urged lawmakers to boost the debt limit without conditions: “We’re going to have to make sure that people are looking at this in a responsible way, rather than just through the lens of politics.” (In other words, don’t do what I did back when I was a lawmaker.)
    15 Jan 2013, 05:21 PM Reply Like
  • Froggey: You're on the money time-wise as to what I'm considering doing, maybe as early as next week. Buy one of the volatility indexes and then sell days before everything gets once again extended or kicked.


    And you are right, this "trade" could be done twice before late March. Something to do with some dry powder, before I move some more capital into high yielders, replacing the income I lost due to both selling bonds and having them called.


    If I decide to have a talk with my broker next week, I'll check back and post his observations as to this potential trade. I'm also looking at adding to some MLP positions...the question is timing when to do so.


    Excellent historical recount of Voldemorte switching hats. (((;-)


    D-inv: 80-ish year old lady was freaking out that entitlements will be cut, or through political two-step artifice, changed by definition (this is more a discussion that should be in Political Quick Chat -- I was only offering this very teeny example of market complacency right now, versus what I believe will be more volatility in the coming weeks).
    15 Jan 2013, 05:40 PM Reply Like
  • 5:51 AM Looking to reduce trade tensions between countries, the OECD and WTO formulate a new method to measure trade flows by taking into account the origin countries of the parts and services involved in the manufacture of a product. E.g., an iPhone made in China in 2010 included components from multiple nations, so its export value would have been much less than the factory gate price of $187.51. Using this method, the U.S.'s deficit to China would have been 25% lower. [Global & FX, U.S. Economy] Comment!
    16 Jan 2013, 06:30 AM Reply Like
  • I just closed my bet against the Yen by selling my holdings in YCS.


    The Yen has depreciated against the dollar by almost 10% recently, with the announcement of massive printing by the Japanese. The "short Yen" play has become widely popular.


    So, time to leave with a profit and watch from the sidelines. Some type of reaction from other Asian countries is almost certain as Japan tries to siphon off trade with its now cheaper currency. Will China and South Korea just stand and watch? Not likely, IMO.
    16 Jan 2013, 12:50 PM Reply Like
  • congrats
    16 Jan 2013, 12:54 PM Reply Like
  • You have company in that move. Kudos on a good job making some easy money.
    16 Jan 2013, 12:55 PM Reply Like
  • Jon, I had a vague unease about the speed of the Yen fall vs. the Dollar, but hadn't acted yet. Kuppy's comments were what pushed me over the threshold. He makes too much sense :-)
    16 Jan 2013, 01:39 PM Reply Like
  • Saw some news being sensationalized about Germany repatriating some of the gold it owns from France and the U.S. back to Germany. (got some histrionic nonsensical mullarkey in my e-mail in-box about Germany abandoning its gold holdings in the U.S. in view of the U.S. imminent collapse... from someone who clearly ran with the headline before reading the full story (talking about you Sovereign Man)... story excerpts below)


    "Once the shipment is complete [an 8 year project that will go through 2020], Frankfurt will hold half of Germany's 3,400 tons of reserve gold — currently worth about $183 billion — with New York retaining 37 percent and London storing 13 percent."




    "During the Cold War, Germany kept most of its gold abroad for fear it could fall into the hands of the Soviet Union if the country was invaded. Another reason was that it's easier to swap the reserves for foreign currency in London, Paris and New York, where gold is traded."


    16 Jan 2013, 03:03 PM Reply Like
  • Re: Germany taking home its gold:
    I read that Pimco's Bill Gross sent a twitter questioning central banks motives-saying maybe they don't trust each other!
    I read one article that speculated gold could go above $10K an ounce and perhaps up to $20K an ounce. If we live to see those prices maybe we should all meet in Copan for the REAL "end of world " party.


    Meanwhile, Americans and other westerners were taken hostage in Algeria at a remote nat gas complex--Al Quaida is taking credit for the attack.
    Voldemort is attempting sweeping gun reforms.
    Is that a distraction from the debt ceiling debate?


    16 Jan 2013, 06:39 PM Reply Like
  • OG typed: "Voldemort is attempting sweeping gun reforms.
    Is that a distraction from the debt ceiling debate?"


    Yes, it is. It is also an attempt to disrupt/discredit the Republicans. Make them out to be "against the children" if they refuse to support the silliness.


    An attack ad, apparently on television and reported by Bloomberg, asked why the POTUS wants to declare schools as "gun free zones" while his children have armed guards protecting them. "Are his children more important then yours?" was the stated or implied question.


    Demos gasped in horror at using the POTUS kids in a political ad. But it did make me think about the contrast between politicos and "the rest of us." They do have special rules, don't they?
    16 Jan 2013, 07:09 PM Reply Like
  • Voldemorte's new gun control policy will cost US taxpayers a half a billion begin with.


    Further, this new program will instruct doctors to ask their patients if they own guns.



    OyGee: Heck for 12 or 15 $20K per 1 ounce coins, I could by an 18 room hotel in Copan, and completely remodel it. Rooms for everybody!
    16 Jan 2013, 07:29 PM Reply Like
  • Probably doesn't concern this German gold, but seems to me I recently heard about some concerns about whether some gold bullion was all gold or gold plated tungsten.
    17 Jan 2013, 08:37 AM Reply Like
  • Ungawah
    That rumor has been around for a few years. It even hit the mainstream media in 09 IIRC for about a minute. As the TFH crowd has another conspiracy.
    Haven't heard about it for a few years.
    17 Jan 2013, 11:41 AM Reply Like
  • It may not be gold-plated tungsten, but the fear that the bars in the NY Fed vault are all rehypothecated is much more realistic:



    <<The last question I have is, "Why so little?" And that answer is easy. Most of the gold in the Fed's vaults has been rehypothecated and everyone knows it. The problem is like Dave Kransler pointed out the other day that both China and the U.S. have a vested interest in keeping the price of gold down. The U.S. because fiscally it is a basket-case and China because they want to accumulate more of the shiny stuff and they are strip mining their country's reserves faster than they can develop mining projects to dig it up out of the ground.


    If all of the gold is tied up in derivative contracts that can't be unwound at current prices, then what happens when someone who is not as polite as the Bundesbank shows up and demands their gold reserves that are supposed to be hanging out in New York?


    You know what happens. They are told to get in line or take dollars. Just like Nixon did in 1971. But the minute that happens publicly, the whole gig goes up in smoke. So, is that really what the Fed wants to happen? Of course not, so the Bundesbank allows them to save face, temporarily, and only demand a little at a time, just enough to ensure that the price doesn't drop anymore, thereby eroding the ECB's balance sheet due to their gold being marked to market while the Fed's and China's is not.>>
    17 Jan 2013, 11:52 AM Reply Like
  • SMaturin
    Yes that one has been around longer. I believe the Tungsten one is newer.


    Both plus claims of market manipulation. Just as a counterpoint to manipulation I read a statement that said approximately 'the gold market is so small, if we wanted to manipulate it. we would overwhelm it.'
    Assuming true when will the price truly respond?
    Assuming true why did gold go up 5X since 2000?


    I can't say any are true or false.
    I do own a some from much lower prices.
    17 Jan 2013, 01:17 PM Reply Like
  • "this new program will instruct doctors to ask their patients if they own guns."


    :-) Answer. None of your business!
    16 Jan 2013, 07:41 PM Reply Like
  • (CPST): Re meeting with JMP Securities: "After Capstone Turbine saw a 5.36 percent decline yesterday, JMP Securities is convinced that the sell-off was unwarranted. The firm met with the company’s management, and it believes that the company is on track to gain higher margins and benefit from stronger micro turbine sales. The firm keeps its Outperform rating on the stock".



    16 Jan 2013, 07:51 PM Reply Like
  • Thanks for the update on CPST HTL.
    16 Jan 2013, 08:07 PM Reply Like
  • Here is some more information concerning the (CPST) and (CAT) oil and gas fracking play


    Apache Corp., Houston, said it has partnered with Halliburton and Schlumberger to find ways to use natural gas to power hydraulic fracturing, one of the most energy-intensive processes employed by the industry.


    In 2012, the industry will have used more than 700 million gal of diesel to pump sand and water during fracture stimulation. That’s $2.38 billion spent on diesel at a recent average of $3.40/gal. Converting the process to using field gas would reduce fuel costs by 70%, said Mike Bahorich, Apache’s executive vice-president of technology.


    One of the biggest challenges the companies faced was finding a way to get the powerful engines to run on gas as a fuel. The companies turned to Caterpillar Inc. to solve the problem.


    “Caterpillar was able to develop dual-fuel kits that would allow the engines to run on diesel while idling and natural gas when they are throttled up for pumping,” said Brian Erickson, Apache senior production engineer, E&P Technology. Erickson, along with Sam Goswick, a drilling engineer with the Central Region, is leading the field trials. “This has been a key factor that is allowing us to move forward to make this a reality.”


    Apache, Halliburton, and Schlumberger have had several successful tests in Oklahoma in the Granite Wash using as many as eight engines running on the dual-fuel kits. A full complement of 12 engines was scheduled to be used on Dec. 10, 2012, at a frac near Elk City, Okla.


    Bahorich, Apache’s executive vice-president of technology, said “This is a real trend and it’s happening now. We’re witnessing a sea change in the industry that will have a great impact not only on how much less oil is imported but also will help keep our air clean.”


    In the example cited Apache said converting the process to using field gas would reduce fuel costs by 70%. Notice that they are not talking about access to electric grids here. They are talking about on-site ICE power generation using the energy from the drill site to power the on-going pumping operation.


    Capstone’s micro turbines operate on a variety of gaseous or liquid fuels including, but not limited to unprocessed wellhead gas. On top of this, the oil and gas fracking industry is currently undergoing rapid expansion.


    How much will the shale drilling industry expand?
    Job growth among oil producers, according to Bloomberg News, will reflect capital costs to tap into shale rock. From 2012 to 2035, over $5.1 trillion is expected to be spent to attain oil and natural gas from what has traditionally been an unconventional mining process.


    Capstone's oil and gas sales equaled around 60 percent of the company's total revenue through the first three quarters of fiscal 2012. Capstone is not a new entry into this market, they have been in this market for years.


    To me, the key investment question about the future profitability of Capstone is not about the market; it’s about their ability to rapidly ramp-up production while maintaining highly reliable products.


    Five Trillion is a big future capital investment market. CPST is only one of several ways to play this. Of course, this all assumes that fracking can be done safely.
    16 Jan 2013, 08:40 PM Reply Like
  • Thanks for sharing that info on oil/gas developer initiative(s) to reduce fuel costs. Just a few reaction thoughts off the top of the head --


    -- $5 trillion is a boat load of money. No question about it. OTOH, that $5 t is projected outlays over a 23 year period and would imply annual investment averaging ~$220 b. Absent detail on how that capital expenditure might be distributed, I'm inclined to think it is an "all in" cost projection that would include mineral leasing costs, field infrastructure development investments, and drilling expense as well as fracing costs.


    -- I have not worked on or around a fracking operation in more than 50 years so what follows could reflect ancient knowledge and imperfect understanding of current tech. That said, fracking entails pumping some type of solid material immersed in a carrier fluid into a drill hole after a casing pipe has been set in place and perforated at selected locations. Very high pressures are required to fracture the rock formations at the points of perforation in part, no doubt, due to the high pressures those rock formations are under due to weight of overhead rock, etc. Whether the diesel engines presently used for fracking operations are driving mechanical compressors or generators to produce power for electrically powered compressors is a detail I need to track down. I have assumed to date that the compressors are mechanically driven.


    -- Fueling any engine with "field gas" requires a producing well at location, a supply line from a nearby producing location, or "batch" delivery and storage of field-produced LPG. Caterpillar's dual fuel engines/engine kits would permit running on diesel until one or more wells at a drilling "pad" started producing. I understand CPST microturbines can also be configured as duel fuel but don't know they are suitable to drive mechanical compressors.


    16 Jan 2013, 09:44 PM Reply Like
  • Something to keep in mind when looking at the concept of the oil/gas industry setting up ex-grid power is the way that refineries are run. The bulk of the energy used to refine oil and gas is co-generation at the major refineries, so they tap the grid for relatively little energy in producing their bread and butter products...


    Therefore it is very logical for them to think first of setting up similar (though smaller scale) operations at the drill head, even when it is within reach of the grid.


    The oil/gas industry is unusual in this respect, but its best for investors to recognize that they operate from a "different" perspective.
    17 Jan 2013, 08:37 AM Reply Like
  • It could be that my questions about CPST market potential in oil/gas arise from having just enough knowledge about the industry to be "dangerous to myself" as an investor. There is no question there is a market of some size there as evidenced by historical sales. But, I do have questions about future scale of market for micro-turbines of various sizes.


    Oil/gas well development, oil/gas production, and refining are much different processes with markedly different characteristics. Refineries produce and use a great deal of heat in reforming and "hydro-cracking" chemical compounds in continuous processes and do so in a fixed location for decades. And, they use a lot of electrical power for process control and safety measures. Recovery of waste process heat for co-generation of power for self-use and sale of surplus into the grid is a no-brainer for profit margin improvement. And, refining does not appear to me to hold much potential as a market for micro-turbines.


    Drilling and well completion are very short-term, "batch" operations with many discrete, energy intensive steps or surges in power consumed. Rigs can remain in one location for time frames of a month to a year depending on the nature and number of well(s) drilled. Fracking and other well completion process equipment are in fixed locations for days to weeks.


    IINM, all oil/gas drilling rigs in this country have been standalone microgrids since the late '70s or early '80s. Large diesels drive power generators which supply electric power to energize drilling operations, pipe handling, "hotel" loads, etc. One or more of those diesels is in "idle" mode for long periods. I don't see much near term potential for micro-turbine sales in the drilling segment of industry.


    I suspect even where grid power might be available and fracking equipment used electrically powered compressors, any effort to rely on grid power for fracking would have a high probability of destablizing that grid. Operators would generate their own power. But, are micro-turbines large enough to power fracking pressure requirements rugged enough to withstand frequent relocation over rough roads? Where large mineral leases under development have been "de-risked" by exploratory drilling, I can see lease operators building a micro-grid and running power lines to drilling pads from a central location that has "field gas" available from earlier exploratory drilling. Any such micro-grid might be located and sized with future liquid pumping power requirements in mind.


    Just "thinking out loud" on the general proposition of oil/gas market potential for CPST (and electric power storage devices).
    17 Jan 2013, 12:43 PM Reply Like
  • Considering only part of the questions ...


    Large enough: scalable because they can be ganged. The base C-200 x 3 in a standard ISO case can go to a c-100 = 1MW. These can be ganged to make multi-MW power available and operated as a unit or independently managed to provide more/less power as needed.


    With only one moving part, standard shipping methods, ISO container (possibly the "ruggedized" version for harsh environments) should allow shipping without other than normal concerns.


    In about 2 years, the C-200 will become the C-250 and another new product, the C-370 with high and low pressure circuits, will provide even more power and flexibility (including being suitable for high altitude density operation) at reduced cost /Kw. Austenetic materials promise longer life as well as it prevents corrosion better than the current materials. Efficiency will also be higher through hihger permissible temps and more recuperation, due to the new materials.


    I don't anticipate heavy adoption in the drilling process because of the sunk cost and familiarity with current equipment, although some more progressive outfits might look at TCO and make the switch at advantageous times (no oil changes, 1/year "maintenance" of filter and inspection, 40K-8K hours before overhaul, which is replace injectors, inspect turbine for wear and R&R if needed).


    But that would surprise me too.


    Most adoptions are for pressurizing (Dominion), taking advantage of "flare gas" as a fuel (<= 7% sulfer generally, although some have used gas more sour than that) and meeting EPA regs to stop emissions caused by flaring.


    BTW, there's a lot more applications that are ramping outside the E&P areas.


    But the stock is still broken and the company has yet to demonstrate it's not by actually meeting expectations.


    17 Jan 2013, 01:05 PM Reply Like
  • I think refinery operations are a different issue than in-field needs for cheap and reliable power. Micro turbines might be a good choice because of their ability to capture waste energy therefore increasing operational efficiency. However, I also suspect that the refinery market would be more of a GE market than a Capstone market. By the way, GE and Capstone have an on-going business arrangement and there could be an acquisition possibility there.


    We know that the majority of Capstone sales are concentrated in the oil and gas industry (60%). I also know that a good portion of that business is repeat business.


    I am assuming that repeat business from well head operators means the micro turbines being installed must be meeting operational needs. There is no better metric of meeting the needs of your customers than repeat business. Based on that, and the fact that these drilling operations tend to be short lived, I assume the micro turbines are also meeting the needs of the well head operators with respect to mobility. I say that because Capstone has been selling into that market for a few years now, and I would think that length of operations would involve movement into new locations.


    My biggest concern with the company is not its market potential, it’s how well it can execute. To me, that is the primary risk here, and that is the reason I consider the investment as speculative.


    To me, the report that the shale play is going to be worth $5.1T over the next 23 years is the key takeaway. Capstone is just one possible investment opportunity, and a speculative one at that.


    What I am looking for of course is the Holy Grail... Cheap stocks with huge market potential, that is currently actually selling its products and services IN QUANITY, to repeat customers in the proposed market.


    One area that has captured my interest is transportation of the product. In the beginning that might be rail, but in the long run it would probably be pipelines... talk about ‘Standard Oil’ history repeating itself. What about exports? Gas terminals? Loading ports?


    What’s the effect going to be on very expensive deep sea drilling operations when a cheaper source of oil becomes widely available?


    Five Trillion dollars of capital expenses will generate “what” in terms of revenues and profits? This is going to cause one hell of a splash. I think making informed choices here will represent the investment opportunity of the Century.
    17 Jan 2013, 01:39 PM Reply Like
  • Davos meeting: zero-1.4% growth for next few decades & 10 years to fix the EZ.
    17 Jan 2013, 05:06 AM Reply Like
  • Author’s reply » New QC this way...

    17 Jan 2013, 08:44 AM Reply Like
Full index of posts »
Latest Followers


More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.