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  • QuickChat #252, January 17, 2013 277 comments
    Jan 17, 2013 8:42 AM

    New QuickChat #252.

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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.

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  • Oh boy oh boy. Eat your heart out on this one Gold bugs. Australian guy finds an 11lb gold nugget!

    17 Jan 2013, 12:17 PM Reply Like
  • just seen that....what a find !
    17 Jan 2013, 12:19 PM Reply Like
  • Australia with gold? Really? I had no idea. I may need to take a Geography course again.


    Anyways, those of you with stock in Intel may be happy campers, as they just scored a big deal with Cisco for making more direct-order chips. I think purchasing stock in any of the Chip makers is a good idea, because this is the staple of the electronics industry these days. (Off handedly, I can't remember if my father sold or kept his Intel, I'll have to ask him), but please debunk my thoughts if you think this is wrong ;)



    That being said, I am not convinced I would want to put any money in Cisco at this time as they are having huge turn-over issues within their organization. Speaking with experience in dealing with the IT giant, it seems to be that every time they purchase a new product line (WebEx, ScanSafe, etc), that product goes through serious customer service issues and then some. Overall, I'd say avoid Enterprise Technology giants at this time in general because people are tightening their belts right now, and businesses are not accepting technology based on a name alone these days. More and more people are asking if the IT giants are worth it, and truth be told, I think these skeptics are right. This article, in fact, points to that same trend.



    Oh, and more on that subject of cheap, off-brand PC's: This thing took off!
    17 Jan 2013, 06:45 PM Reply Like
  • Intel price performance today is a bit surprising. Price rises into market close, company report revenues in line with "consensus estimates" with a beat on earnings, and drops $1.20 (5.29%) after hours. Haven't read the company's outlook yet, but a 5+% drop after hours is surprising.
    17 Jan 2013, 10:35 PM Reply Like
  • I'm not long Intel, but this looks like the sort of reaction you can see when a big company cuts future estimates. I'm sure we will see more details this morning.
    18 Jan 2013, 07:37 AM Reply Like
  • I remain long Intel (INTC) as it's a core stock.
    22 Jan 2013, 06:15 PM Reply Like
  • Pretty solid article forecasting 2013, all in one chart:



    17 Jan 2013, 07:10 PM Reply Like
  • Well i guess the Mint has some digging to do..



    Wonder what prices we will see soon on these??
    17 Jan 2013, 09:39 PM Reply Like
  • More about the US Mint running out of silver:



    Suggest looking at the January spike of iShares Silver Trust silver holdings, and total ETF silver holdings, in provided charts. A bit of a, "whoa factor?"
    21 Jan 2013, 02:38 PM Reply Like
  • Bond drop may have just started & a self fulfilling prophecy may happen now :
    This is a 40 minute video on Fast Money, the first 3 minutes are good..and covers bonds.

    18 Jan 2013, 05:00 AM Reply Like
  • another tax haven to open up & give names....Caymen Islands to give names of companies & directors: Not going to be anywhere to hide soon
    18 Jan 2013, 08:07 AM Reply Like
  • "Not going to be anywhere to hide soon"


    That's a real shame. The confiscation of CB notes in a fiat system is bad news for asset prices. Govs with fiat system aren't funded by expropriation taxes. Ironically, the people who consider themselves the best and the brightest will be the types to support fiat systems and when they get one, they don't act like they understand what they have. The result is they start advocating for expropriation taxes because they still think they are operating under a gold system or a gold standard. The Dancing With the Stars Electorate are their own worst enemy.
    18 Jan 2013, 06:05 PM Reply Like
  • New Sri Lanka article by me:


    Interview with IFC coming next week...
    18 Jan 2013, 08:09 AM Reply Like
  • Jon- Thank you very much.
    Very thorough analysis of this 'Frontier' country. With their unemployment at 4.2% and public debt at 79% of GDP I guess I would be concerned about inflation/overheating-
    Any thoughts?


    4 Feb 2013, 10:17 AM Reply Like
  • I believe public debt level in decline after end of civil war (gov't data and charts I have says so, but need to dig more; and very honestly need to write more).


    Central Bank of Sri Lanka has shown it takes measures to keep economy from overheating


    In any case, my brokerage in Sri Lanka has believe the local stock exchange was due for a correction which seems to have started. Long-term, I like this story for more reasons I'll elaborate over time as I can compile articles that meet both Seeking Alpha standards and my own.


    I like the story and its outlook better than Mongolia at this point. Mongolia keeps bugging me with the constant harping of its news cycle - and I'm kind of ticked off with the Mongolia story at this point, which will likely show in my next article about it.


    [Anyway... off topic... I need to go curl up with a gallon of water as I have a health issue I need to "pass" which has been slowing me down for a week, mostly just trying to figure out what the issue was/is.]
    4 Feb 2013, 01:22 PM Reply Like
  • Jon-
    Hope everything moves along for you. This too will pass,
    4 Feb 2013, 02:38 PM Reply Like
  • Hi Jon,


    This is as good a spot as any to compliment you on the Sri Lanka blog and particularly on the even-handed exchange of information there. Even when some commenters say some version of "What kind of idiot are you for thinking of investing there?" you are willing to listen and patiently explain the rest of the story.


    For those of us who spent waaaay too much time in 3rd-world hell holes back in the day, a fresh perspective like yours reminds us that the world has changed, some places more than others. (I still keep a few Burmese kyat around to remind me that governments decide "official" exchange rates but the quick and the discreet often do considerably better!)


    And for those of us who prefer to slide in sideways from time to time in frontier markets, there is always the diversification afforded by MFs, CEFs and ETFs. I recently started buying some MAINX which counts John Keells among their holdings. Sri Lanka is just 1% of their portfolio, but that's 50% more than they currently have in Japan! (Mongolia is 2.7%...)
    4 Feb 2013, 08:30 PM Reply Like


    No mincing words here: " the Yen is doomed".


    short video interview
    18 Jan 2013, 02:29 PM Reply Like
  • "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies."


    -- Groucho Marx
    18 Jan 2013, 02:50 PM Reply Like
  • My most liked comment in a while... a Groucho Marx quote off the home page of an old friend from college I haven't spoken to in 23 years... who I looked up because SHB's "doomed" commented reminded me of him (he was fond in college of saying "we're all doomed")... LOL


    Posted this link elsewhere; the chart in Frank Holmes blog "How To Discover The Top Dogs In Emerging Markets" is interesting (kind of Dogs of the Dow theory for emerging markets)
    18 Jan 2013, 09:55 PM Reply Like
  • Is there someway on SA to see the highest rated comments for everyone? Also, it would be interesting to have a thread where people could copy and paste their highest rated comments. I would be curious to see what they were.
    19 Jan 2013, 11:41 PM Reply Like
  • Jhooper


    "Is there someway on SA to see the highest rated comments for everyone?"
    Individually yes on a persons comment page You can put the comments in order of most liked comments.
    On SA as a whole?
    I doubt it.


    " Also, it would be interesting to have a thread where people could copy and paste their highest rated comments. I would be curious to see what they were."


    You could do an Instablog.
    Beyond curiosity I don't think it would be useful, it seems to me that you might need context as well.
    Your choice enjoy.
    21 Jan 2013, 02:21 AM Reply Like
  • Weekend read:


    Hedge Funds And Diminishing Returns


    What got my worried attention most was the last graph in the article that shows hedge fund performance is increasingly correlated with the S&P 500. When things get that correlated...
    20 Jan 2013, 07:25 AM Reply Like
  • Jon, I am curious why you feel the correlation is concerning? There is a tipping point with hedge fund investors as more and more come online their investment approach begins canceling out each others returns and the hedge fund approach is just another investment tool and a hedge fund becomes just another fund essentially. think there was a similar phenomenon when everyone used the same TA, there becomes a law of diminishing return as more and more investors use the same approach.
    20 Jan 2013, 09:06 AM Reply Like
  • jakurtz: When different investment approaches become highly correlated, it trashes the concept of diversification. You can't diversify if all investment vehicles act the same!


    Scary scenario; some event, pronouncement or whatever starts a selling wave in one area of investment. The high correlation causes the prices of certain mutual funds to fall. Individual stocks owned by mutual funds then drop from the redemption selling pressure. Investors began selling those individual stocks. Fear feedback sets in and you get huge swings for no fundamental reason. That sort of irrational, and very human, behavior can destroy a market, even though the stocks that make up the market are healthy.


    You only need to look at 08-09 to see what might result. Home mortgage debt instruments ( CDOs, etc.) were not the only investment to get clobbered.


    I contend that investors who own MFs are much less likely to understand what the stock market is and how it works. They buy a MF as they would buy a CD at a bank. But selling those MFs using online brokerage accounts is fast, easy and ultimately dangerous. Hence the "fear feedback" problem.


    I really dislike tax sheltered accounts holding "me too" mutual funds.


    Sorry, this turned into more of a rant then I planned.
    20 Jan 2013, 11:51 AM Reply Like
  • I appreciate the "rant" SHB. I was thinking a similar situation as the flash crash might have been the fear, where a bunch of capital doing the same things at the same time, or over long periods of time, can have a dramatically unnatural negative effect on the market. Something to watch out for and be aware of. Thanks.
    20 Jan 2013, 12:57 PM Reply Like
  • I think the answers I'd write are written above...
    20 Jan 2013, 03:21 PM Reply Like
  • Keep in mind that many funds are held in retirement vehicles like the 401K or managed IRA. This means that the fire and forget investors really don't understand or really even care what funds they own. Most of these are actively managed with a default basket for those not interested or savvy enough to do their own DD and direct their investments themselves. The other side of that is the pension funds which manage investments for a similar constituency as the fire and forget investors. They too don't know or care where their money is invested until something bad happens.
    22 Jan 2013, 06:27 PM Reply Like
  • Joining this conversation late, but I must note --


    While I agree many MF <investors> are fire and forget, I disagree that funds are universally a bad choice for those of is who consider ourselves active investors.


    In our advisory business, we use MFs, CEFs, ETFs, ADRs, stocks foreign and domestic, bonds, notes, preferreds, convertibles, et al. We try to buy whatever makes the most sense for the times and hold until that is no longer true. So we own the MCP convertible notes, not MCP. Almost the same upside with greater downside protection. We buy baskets of quality companies at a discount (and thus higher yield) via CEFs.


    We buy what my research tells me are the best and brightest MF managers when we want serious diversification within an industry or sector. And I buy long/short MFs rather than their ETF clones. If I'm paying for active management I want the top dogs who can move quickly but with forethought. MFs are not part of SA's metier, but we do our best to make it one of ours!
    23 Jan 2013, 10:28 AM Reply Like
  • I have not really tracked it, but watching the top 10 articles space for the last few months, it seems like articles on income generating stocks and income investing are growing in popularity.


    a) Is this true?


    b) Is there an outside reason? (e.g. are SA articles hyperlinked to some new site beyond Yahoo and Marketwatch that is encouraging this?)


    c) Is this a market signal. (i.e. Something the broader population recognizes about the market; a sort of "Blink" moment)


    (Blink, the book by Malcolm Gladwell:
    21 Jan 2013, 10:04 AM Reply Like
  • Jon, I don't think this is a new strategy. It has been going on for 2+ years now. Articles are catching up. Therefore, IMO it's a bit late for a "mkt. signal".
    If a stock has doubled in the past 3 years, and still yields 3-4%, think what the yield is for the ones who bought 3 years ago?


    The big danger to me for some stocks is the loss of 20%+ in principal vs. the 4% yield.
    21 Jan 2013, 10:12 AM Reply Like
  • Are Dividend Growth Stocks In A Bubble? by David Van Knapp in July


    Article begins,
    "David Jackson, the founder and CEO of Seeking Alpha, stated the following in a recent comment.


    I haven't found any other asset class [beside dividend growth stocks] where there are similar causes or indicators of potential overvaluation risk, specifically:
    1. macro factors (interest rates, demographics, and tax rates),
    2. a significant preponderance of positive articles on SA, with relatively few "challenging" articles,
    3. high and rising interest from novice investors. (Please note: I'm *not* saying that all dividend investors are novices; there are many deeply experienced and sophisticated dividend investors.) The last times we saw massive rises in novice investor interest ended badly: the housing bubble (when everyone seemed to be dealing in real estate) and the tech bubble (when barbers were recommending tech stocks). I'm not saying we've reached that point with dividend stocks, but if we do, it will be too late."


    Hat Tip to Modernist for the link
    21 Jan 2013, 01:42 PM Reply Like
  • Jon,
    I agree with LT. I would also add that after the dividend tax panic selling of last quarter -- the sellers appear to be plowing back in after booking their gains because most of my high yielders have recovered. Authors may well be leveraging the interest back into income generating shares. Recall that the President wanted to triple the tax on dividend income for many families, but the final compromise increase was "only" from 15% to 20%
    21 Jan 2013, 01:50 PM Reply Like
  • Lou Basanese suggests The Fed could start buying stocks (???)


    Prediction #4: Ben Bernanke gets tired of buying bonds and opts for stocks instead.


    All credit goes to the boys at Deutsche Bank for this one. As they said, "With the U.S. housing sector apparently turning the corner, stronger equities may be the necessary tonic to further increase household wealth, and also to boost investment… While the Fed does have restrictions on what assets it can buy, it can invoke Section 13(3) of the Federal Reserve Act that allows more extreme actions in 'unusual and exigent circumstances.'"


    Who knew such a monetary policy measure was even legal? I'm suddenly getting more bullish about stocks. As the saying goes, we never want to fight the Fed.


    21 Jan 2013, 12:58 PM Reply Like
  • "more extreme actions in 'unusual and exigent circumstances.'"


    Hard to support when using BEA, BLS and Fed current statistics. Add in housing recovery and I think they woul;d get some, Ahem, "pushback".


    I wish he'd try - might be what it takes to get this unconstitutional institution abolished and maybe even force congress to actually earn their pay, by doing such things as passing budgets, actually re-working the income tax code instead of just talking about, maybe get all enlightened and actually remove some regulations and laws instead of adding thousands ...


    Oh wait! I must have something funny in this drink.


    21 Jan 2013, 01:39 PM Reply Like
  • "Prediction #4: Ben Bernanke gets tired of buying bonds and opts for stocks instead."


    At least one analyst suggests helicopter Ben has/is supporting TBTF and other bank purchases of equities.
    21 Jan 2013, 03:02 PM Reply Like
  • Consider: The Fed invests in stocks. Other than debt payments and Medicare, the next biggest item is Social Security. The US Government will not allow me to “invest” “my” social security payments in stocks (which sort of represent the US GDP). But now the Fed is going to invest for me! Hooray! (I think?). :-)


    A bit of ironic, twisted logic there, eh?
    21 Jan 2013, 03:17 PM Reply Like
  • BB will never buy stocks...never!!


    He is gone in a little over a year as well..


    Silly idea, but so are many articles...Tax payers money now being invested by the FED??? If that ever happened were in worse shape than i thought !!
    21 Jan 2013, 01:07 PM Reply Like
  • Market potential(s) for CPST in the oil/gas industry and fracking were discussed a bit a QC or two back.


    A West Texas-based family member working in oil/gas production advises that equipment used to frack geologic formations relies on mechanical compression powered by diesel engines delivering 15K - 20K hp. If electrically powered compression were used, fracking operators would have more precise control of the operation(s).


    2) Producing fields in the area draw grid power for well pumps, electrically controlled values, switches, gauges, signal communications, etc.


    3) Several producing field co-generation projects have been tried in the past 30 yrs or so. The only known economically successful effort, though, was a large chemical production complex and not related to field production or gathering systems.


    4) Some multi-well pad drilling activity is occurring in the region, but most follows conventional single well practice.




    CPST product literature state exhaust gas flow characteristics for each model, i.e. - C30 LP model (NG fuel) with power output of 28 kW has exhaust gas flow of 0.31 kg/s (0.68 lbm/s). Does that exhaust gas flow approximate fuel input volume flow or provide a basis for deriving fuel requirement?


    CPST's latest 10Q gives three month operating expense ($, thousands) through 9/30/12 as $8,841 with gross margin on goods sold of $2,606. Assuming constant margins, revenues would need to rise 3.39X to reach breakeven.


    135 MTs worth $23.6 million were shipped in the quarter. An additional $3.9 million of revenue was realized from maintenance agreements, account receivable collections, etc. It appears to me that breakeven is unlikely with less than ~460 MT shipments per quarter. Agree? Disagree?


    21 Jan 2013, 02:52 PM Reply Like
  • D-Inv: I can't answer, offhand, several of your questions.


    I think for fuel flow it would be easier to take the efficiency they publish and divide that into the output. That can then be compared to the energy content of whatever fuel is being used, NG, diesel, sour gas, ...


    The exhaust gas flow could probably be used but that likely requires working backwards and having to consider efficiency anyway ...


    As to the break even, you would need to account for the margin improvement progression which has been going steady for 17(?) quarters now. This may finally accelerate a bit as reducing COGS sold come more to the fore as newer and less expensive parts begin to work through the inventory and older more expensive inventory is depleted. This is one of the keys to the planned march toward profitability.


    Reviewing several back quarterly reports would be needed to see if there's a more-or-less steady percentage improvement or if it's spotty. I think this is important as margin has not been constant, but steadily improving. Target is north of 30%, IIRC.


    Another important point is that some other expenses will be dropping eventually: warranty expense to upgrade older units *before* they fail has been a big cost. That expense should be nearing an end soon (whatever that means) as most of the older units should have been upgraded by now.


    Management has long stated that break even occurs, IIRC, around 225 units/qtr, depending on mix of higher/lower margin units. With the C-200 and higher beginning to take a higher percentage of sales, 460/qtr would be way high. And they began publishing that number *before* they started offering the service contracts, which have generated a lot of revenue.


    Beyond pointing those things out, I'm not in a position to agree or disagree because I haven't looked at their reports for a while, although I do catch the CCs and read the presentation packages, and we know they will have some R&D expense related to development of the C-250 and C-370, both of which use less expensive but more robust austinetic materials and have a redesigned recuperator, combustion chamber (for better sealing) and impeller (CFD designed for higher efficiency).


    I don't know if R&D will stay about the same, which I suspect is not the case, increase marginally or substantially.


    Sorry I can't help more at this time,
    21 Jan 2013, 04:54 PM Reply Like
  • Thanks for the feedback, HTL.
    21 Jan 2013, 05:14 PM Reply Like
  • Assuming 100% combustion efficiency, exhaust gas would consist of CO2 + 2 H2O which is 4.989X that of input fuel (CH4) if my arithmetic is accurate. With a mass flow rate of 0.31 kg/s, I calculate exhaust output/hr at 1,116 kg. At CH4 density of 0.6556 g/l, fuel mass flow rate of 341.2 m3/h or 12, 048 ft3/h is indicated for C30 LP/C30 HP models.


    :-) Your suggested approach provides a crosscheck when I get a chance.
    22 Jan 2013, 03:26 PM Reply Like
  • D-inv: I have a simpler technique. The mass out is equal to the mass in.


    The only reason I can think of for wanting to know the output mass flow (kg/sec) is for figuring the exhaust plumbing OR the back pressure of the follow on heat exchanger that heats air or boils water. Well, also knowing the mass flow and outlet temperature allows calculation of the energy that can be extracted from the exhaust gases.


    BTW, the reason the gas flow numbers are given in mass flow instead of volume is so the temperature of the outlet gas isn't needed for the specification. The integration engineer on site is expected to calculate volume flow if needed. I would do it the same way if I were specifying the device.
    23 Jan 2013, 12:27 AM Reply Like
  • "The mass out is equal to the mass in. "


    Ok. My estimate of fuel input is a crude one based on only a portion of the input mass and, at best, might only serve as an upper bound. Oxygen needed for combustion of CH4 would constitute a part of input mass. I essentially assumed oxygen input was pure, bottled gas.


    If not bottled oxygen, it most likely is atmospheric gas in which case exhaust gas flow would include N as well as a bit Argon and trace amounts of helium, N2O, NO2 plus a bit more CO2 and H2O than given by reduction of CH4. The ratio of exhaust gas mass (mass of methane plus air) to methane would be > 4.989.


    If I haven't messed up scale factors or calculations somewhere, HTL's conversion efficiency approach gives markedly different results. Btu equivalent of a kW (according to wikipedia) translates as 0.9486 Btu/second. @ electrical efficiency of 26% indicates input Btu of 109.455/s or 394,038 Btu/h. With 1,000 Btu/ft3, natural gas fuel requirement of 394 ft3/h is needed.


    Think I will just pose the question to Capstone.
    23 Jan 2013, 02:31 AM Reply Like
  • FWIW.
    My query to capstone re-fuel requirements for C30, C65 model turbines was passed to a franchise distributor. Gist of response from the distributor was a) customers are currently running both size units on well head gas, b) standard units equipped with 10 micron or less filters can run on well head gas after liquids are stripped out, and c) the turbines require 75 psi at the fuel inlet.


    Continuing google searches turned up a spec sheet for C65 model turbines which gives NG fuel flow rate of 842K btu/h (~842 ft3/h).


    CPST looks more prospective to me now than it has for several years.
    23 Jan 2013, 11:30 PM Reply Like
  • D-Inv: Here's an old report that was linked by gene_genome over on InverstorsHub. "Making Sour Gas Into Sweet Energy".


    A couple of notables: "The microturbines that operated in Newburg could tolerate a sulfur level of 7%,"


    [HTL] This is much higher than some have speculated is is *outside* the specs for the units.


    "with minor modifications, the Capstone microturbines were able to operate successfully on the low-Btu gas that the oil field in Newburg historically had flared. The microturbines ran on gas that contained 280 to 290 Btus per standard cubic foot.


    This is the key—most engines cannot run on such low-Btu gas. “We are confident that we can run these microturbines, even with gases that are at 200 Btus per standard cubic feet,” Schmidt says. “We’ve run tests that have been successful down to 120 Btu per cubic feet. But, the efficiency does start to drop as you go below 200 Btu”.


    It's a good read if you really want to understand why it's attractive to O&G operators and some E & P outfits.



    30 Jan 2013, 04:16 PM Reply Like
  • BTW: Blackrock's latest filing puts them as possibly (CPST) largest holder now - 5.59% of shares, ~17MM. This is a large increase and speculation has already begun as that'ts the reason (CPST) has been tanking as the MMs help a "large good customer" acquire at the desired price.




    30 Jan 2013, 04:27 PM Reply Like
  • D_mn your good at that stuff HTL.


    I should hire you as head of the SEC
    30 Jan 2013, 04:47 PM Reply Like
  • Thanks, HTL. Good article. I had been aware of some sulfur tolerance in some CPST microturbines and nitrogen, CO2 tolerance in all, but the low btu fuel is new info and helps explain installations running on landfill gas.
    30 Jan 2013, 05:00 PM Reply Like
  • LT: T'wernt me! Some folks at InvestorsHub found it. It's one of the places I frequent trying to take advantage of the efforts of those that follow this stuff like a tracking dog while I do what I think I'm better at.


    30 Jan 2013, 05:02 PM Reply Like
  • I second that nomination LT!
    HTL excellent find on CPST and BLK position.
    31 Jan 2013, 07:21 AM Reply Like
  • Hans Rosling: Videos Making Global Development Visual


    You may not agree with him 100% (I don't), but his methodology of summarizing global data is compelling enough that I decided to make a library of his videos.

    21 Jan 2013, 03:15 PM Reply Like
  • Maple syrup season has started. See yall in a few weeks. Work, work, work.
    21 Jan 2013, 05:41 PM Reply Like
  • Yum! You make the best!
    21 Jan 2013, 06:14 PM Reply Like
  • ooooooh... and we just stocked up big-time in Vermont... so good...
    21 Jan 2013, 06:54 PM Reply Like
  • Impact Silver announcement today:
    21 Jan 2013, 09:06 PM Reply Like
  • John Polomny's wrote an instablog that he is buying Energy Fuels ( as a uranium play.
    22 Jan 2013, 08:30 AM Reply Like
  • The hunger for gold in India and China keeps on growing. And government attempts to curb the gold demand -- have the exact opposite effect. Perhaps the same appetite will grow in the US if the Fed and our elected officials continue debasing our currency.
    22 Jan 2013, 11:08 AM Reply Like
  • For the serious gold bugs, there's now a $250,000 gold shirt in India
    22 Jan 2013, 11:11 AM Reply Like
  • Mercy, does this give us a clue as to what the Indian government is doing to the Rupee? It suggests to me that serious inflation is in sight there. That is consistent with a coming global "currency war" that is being talked of now. Printing Yen is part of it, so is the Fed pumping out fiat money.


    BTW, that alone is a good reason to believe the Chinese are putting out false inflation numbers.
    23 Jan 2013, 12:32 AM Reply Like
  • My understanding is the Indian government had chosen to let the Rupee float freely as of early/mid last year (IIRC)
    23 Jan 2013, 03:52 AM Reply Like
  • SH,
    I don't follow India's economy as closely as others in which I trade directly, but I do follow its gold policies because India and China account for 35% of global gold demand and thereby influence gold prices heavily.


    As I understand it, past unbridled government spending sent the Rupee to its lowest level in mid-2012, but since then the government appears to favor more fiscal responsibility. There is now a fiscal reform momentum building which is helping the Rupee


    Going forward -- India's exporters have gained more free access to USDs which will likely compete with gold purchases while helping to prop our own safe haven currency. So, if the Finance Minister sticks to his budget deficit targets, the Rupee is likely to continue rising and inflation may be moderated.


    Rupee outlook from UNIDOW:
    "Currency Risk: (Outlook - Stable) The UNIDOW FIS has upgraded India's currency outlook to "stable" as the Indian Parliament back to work and approved important laws. The inaction of the federal government on the economic reforms and inability to curb mounting government spending - causing a tall building of fiscal deficit pulled the Indian currency down to hit the lowest level ever in mid of this year. After significant losses in the rupee, the outlook still has some ambiguity. However, further losses are unlikely - backed by the introduction of recent reforms, specifically FDI in retail sector to allow foreign giants to set-up their shops in the contry, and the 16th Lok Sabha elections in early 2014 preventing further losses in the Indian currency. The Rupee is expected to close around 53 for a USD by the end of 2012 and could return to Rs40s a USD by end of FY13 on fiscal reforms. The federal government sharing an intense burden of fuel prices to make it cheaper for the retail consumers."
    23 Jan 2013, 06:43 AM Reply Like
  • "Unlike China, successive administrations (through RBI, the central bank) have not followed a policy of pegging the INR to a specific foreign currency at a particular exchange rate. RBI intervention in currency markets is solely to ensure low volatility in exchange rates, and not to influence the rate (or direction) of the Indian rupee in relation to other currencies."


    "India's central bank will announce steps aimed at allowing the rupee to become fully convertible against other currencies in the next "few days," Finance Minister P. Chidambaram said yesterday." (March 21, 2006)


    Sri Lanka decided to join India in this policy of free float in February of 2012... after Sri Lanka's currency became too strong against India's for export purposes.


    (Hedge fund manager that manages an India-only hedge fund I've been trying to interview (3 cancelled appointments and counting) has said he views the free float of the Indian Rupee as a strength... maintains an honest un-manipulated market valuation... yadda yadda)
    23 Jan 2013, 06:55 AM Reply Like
  • Governments with fiat printing capability are NOT to be trusted, nor are the currency markets a reliable control mechanism for currencies which have a "free float" market policy. The ability to operate in secret, particularly by simply printing extra currency, is always something which should be assumed, but rarely can be accurately quantified.


    Notice that the currency markets react strongly to whatever such governments SAY is "reality", whether it really is or not. Any resemblance to such proclamations and the truth would be a low probability occurance.
    23 Jan 2013, 08:43 AM Reply Like
  • That's nothing compared to the inflationary power of the President.

    23 Jan 2013, 01:54 PM Reply Like


    Hmmm. It turns out that China is no longer accumulating additional foreign currency reserves, nor are they adding US Treasuries...


    This tallies very well with the scenario I have been presenting where we can expect them to start spending their reserves, and pulling down the value of the yuan to help exports.
    23 Jan 2013, 06:15 PM Reply Like
  • Perhaps. I'd like to see data on more than just foreign currency reserves to reach the conclusion drawn by the author. For instance, I'm under the impression China has been a large importer of gold. Stockpiling of other commodities could also be in play and some trade surplus might be financing foreign investment by Chinese enterprises.
    23 Jan 2013, 09:12 PM Reply Like
  • Chinese stock piling rice, iron ore, precious metals and dry milk. Doomsday prepers?

    24 Jan 2013, 10:01 AM Reply Like
  • DG, re: Chinese
    - hedging resource inflation.
    - controlling resource market.
    - strategic.
    24 Jan 2013, 10:30 AM Reply Like
  • DG
    The Chinese figured out that the US and others are making their money into TP?
    Decided to go with commodities instead?


    How much good is a stockpile of iron going to do you in a nuclear war?


    China eyes another year of rice imports to cool domestic prices
    <Chinese demand looks likely to act as a partial safety valve for an amply supplied rice market for a second year running, as the world’s top consumer of the grain takes advantage of global prices around 25-30 per cent below record domestic levels.


    Still, Chinese demand looks unlikely to bail out Thailand - where a government rice buying scheme has built up stocks equal to half of global annual trade - as cheaper Vietnamese and Pakistani grain snatch the lion’s share of business.


    China’s rice imports jumped five-fold last year to 2.6 million tonnes, making it the world’s second largest buyer after Nigeria.>


    After Nigeria?


    Cheap imports hurt Chinese milk powder producer


    This sounds less than nefarious.
    24 Jan 2013, 10:55 AM Reply Like
  • China just swapped in a new politboro right on schedule, something it does every decade. The new group immediately started dialing back the capital markets, building government run cartels around their largest government industries, and started stockpiling raw materials. Iron ore is particularly interesting since it follows the shut down of their largest iron processor, which has been over-producing and adding unneeded capacity for about 20 years. This had the further benefit of shutting down a large percentage of their rare earth production, which is a byproduct of the iron processing.


    It is my thought that they foresee rough trade relations with their primary suppliers (Australia, middle eastern oil, etc) when they begin aggressively preying upon the world markets they need to keep their industrial buildup ticking. I believe this will include a hardnosed currency war, including cuts in the yuan designed to keep their products priced low.


    Stockpiling will also help the domestic inflation which has the potential of creating civil unrest, particularly in a recessionary environment. Providing price supports and low cost staples can help keep a lid on these sorts of pressures...


    So a China actively stockpiling rice and industrial staples SHOULD be worrisome to the leaders in the West, but it is far more likely that all this will come as a rude awakening as it interrupts their usual self-satisfied navel contemplation...
    24 Jan 2013, 11:47 AM Reply Like
  • Excellent post TB.
    24 Jan 2013, 01:33 PM Reply Like
  • Oil and nat gas infrastructure stocks are flying:


    (BPL) Buckeye Pipeline Dec. 31, was $45.41; now $54.66
    (KMP) Kinder Morgan Energy Partners Dec. 31 was $79.79; now $89.35
    (ETP) Enterprise Transfer Partners Dec. 31 was $42.93; now $47.86
    (KYE) Kayne Anderson Total Return Fund Dec. 31 was $24.59; now $27.44
    (EPD) Enterprise Products Partners Dec. 31 was $50.08; now $55.52


    Every one of these high yielders are up more than 10% so far this year.
    22 Jan 2013, 02:31 PM Reply Like
  • Great list Maya. Thanks.
    22 Jan 2013, 03:37 PM Reply Like
  • Maya, I have 1.3+ percent gains today on KMR and MMP. Something is going on. Inflation play?
    23 Jan 2013, 12:34 AM Reply Like
  • SHB: Nope. Nothing to do with inflation. Inflation isn't going to happen until at least late 2015. That's the way the FED wants it.


    In my opinion, it's shifting, or better, Baby Boomer's rotating into high yield that's occurring. The Fiscal Cliff fears of what could have been measured with huge increased taxes toward unearned income were softened when cap gains "only" went up from 15% to 20%. The rich and affluent heard this.


    The rich also have had their preferreds and bonds called early last year, giving them $ to redeploy. I'm merely a dude trying to keep pace.


    Hence all the late selling last year, and wrongly so, was the Fiscal Cliff tax scare that turned into a buyer's opportunity. Eee, ahh, just as I predicted maybe as early as last April. And I'm pissed at myself that I did not heed my own predilections, north of what I've already done.


    This "potential" increase tax shift grabbed a lot of paying attention from retail investors like me, from being content with 4-5% to now going after ever more scarce 6, 7, 8+ % yields. The Internet has a lot to do with this, maybe more so than ever. Hence the search and plowing into even higher yielders, aided and induced by the last year's underperforming hedgies.


    The bubble is on. I don't think this surge is over...yet. In fact, with the republicans (maybe) agreeing to kick the can until May, plus an increase of the FED not only buying some $40B in MBSs every month, plus another $45B of monthly treasury stimulus, I can see the market drifting higher for some time.


    And idea of shorting the VIX last week, some weeks into the future, has been pushed farther into the future. I see this year shaping up much like the past few years...summer doldrums will occur.


    Suggesting to read this article:

    23 Jan 2013, 02:34 AM Reply Like
  • Just want to add to this comment that, as all of you already know, the S&P 500 is technically way overbought. The RSI on the below chart shows that at today's close of 71.82 we're near the territory of last Sept. which presaged a pretty decent drop:

    23 Jan 2013, 05:12 PM Reply Like
  • My MWE is not faring as well, up 6.75% this year after issuing $1b of 4.5% notes in 2nd week of year. I'll keep the divvies and gains, though.
    22 Jan 2013, 03:05 PM Reply Like
  • D-inv: Well...MWE is up $1.22 today; not bad.
    22 Jan 2013, 03:10 PM Reply Like
  • Old fav, which went into disfavor due to poor management, mine collaspses, the real vs. the dollar exhange rate, amongst other problems, today Jaguar Mining (JAG) popped 31.97%.


    Last week, JAG announced meeting 2012 production projections, and the stock has taken off since, trading at 68 cents on the 17th to close today at 99 cents. Today's volume of 3.8M shares is FOUR times the average daily volume.


    Maybe the management changes they made are paying off.
    22 Jan 2013, 04:16 PM Reply Like
  • 7:22 AM Molycorp (MCP) -4.3% premarket as the company sets a capital raise, offering a secondary of $200M in common stock and $100M of convertible notes. Both figures could rise another 15% if underwriters exercise their options to buy. (PR) Comment! [Commodities, On the Move]
    23 Jan 2013, 07:28 AM Reply Like
  • TB, I could not post this on the REE board. SA just says "an error occurred"
    23 Jan 2013, 08:44 AM Reply Like
  • Here is a pretty good read on where we are going:

    23 Jan 2013, 08:44 AM Reply Like
  • "Americans probably think that someday the Chinese will repo a U.S. aircraft carrier or that the mysterious Federal Reserve will foreclose on the White House because of the Treasury's inability to meet its payments."


    In a related story.



    and another...

    23 Jan 2013, 09:05 AM Reply Like
  • Good links jhooper.
    That quote in the article also caught my eye. First, because yes foreclosures can happen (as you point out) if the debt obligations go far enough or if politicians will it. And second, because I think plenty of Americans today understand that America's debt is heavily funded by foreign countries like China. They probably worry less about repos and more about the Chinese finding alternatives to buying US debt like mortgage backed securities -- which would drive US mortgage rates higher long term.


    The article's premise that it's OK to just keep adding sovereign debt "because we can print more" -- is like the thief who doesn't worry about getting caught because he can always go on to his next heist.


    Eventually the music stops for deficit spenders when the populace realizes that the higher prices for everything (including equities) simply reflects lower purchasing power versus other fiscally strong currencies. IMO, the "just keep printing" mantra is equivalent to a theft of purchasing power for anyone who has any USD savings whatsoever.
    23 Jan 2013, 10:06 AM Reply Like
  • MJ: I have a simpler view for my simpler mind to comprehend.


    Inflation is a tax, mostly suffered by those who have saved and/or invested money.


    Inflation allows the IRS to tax capital "gains" that are nothing more than inflation of the currency. A tax on constant real value.


    Inflation is a subtle hint to Joe sixpack to spend everything he earns and then borrow some more.


    For someone trying to live on investment income, inflation driven by fedgov policy is a slap in the face!
    23 Jan 2013, 12:01 PM Reply Like
  • Very well said SH!
    23 Jan 2013, 12:15 PM Reply Like
  • "a theft of purchasing power"


    If you think about it, that is really what a tax is. It is a transfer of purchasing power. Inflation takes away your purchasing power even though it doesn't take away your Fed notes like the IRS does. Either way though, your purchasing power that you created by your income is taken away by some degree. In this sense, the Fed is just a taxing entity. If we just recognized it as such, we could better utilize it. Such a recognition would then make a central bank not necessarily a bad idea. It creates an almost inescapable tax and as such a very efficient means to fund your gov. Then the issue becomes what you want your gov to do. Then you have to recognize that there is a difference between what you WANT your gov to do and what it CAN do. If you get these two things mixed up, you set the path of your populace on its way to austerity, not because of policy but because of nature.


    If gov at all levels, state and Fed, where limited to their only logical role of just protecting property (even then it gets dicey), there is an argument to be made to just taxing ourselves via inflation from a monopolized money medium. For instance, if the Fed gov were just a military that only defended our borders and a court system for states to settle their disputes among one another in, and states only policed things like theft and murder instead of what people put in their bodies, then the Fed gov deficit each year was only $300 or $400 billion compared to a $30 trillion economy growing at 10% each year, the Fed gov could just print and spend and run deficits and debt and the debt wouldn't really be an issue. The vibrancy of the US economy and its status as the world's safe haven for capital, would allow for deficits and debt like that to grow because what you could purchase with dollars would always be growing at a faster rate.


    However when you've chosen a downward spiral of decay such as we have by convincing people that safety is more important than liberty and prosperity that manifests itself in a welfare state that pays people not to work so they will vote for you because then you get richer while they get poorer, at some point (perhaps decades away), there will be a point where capital will find a better place to go. That would basically mean that the US looses its reserve currency status, and then you will have inflation and interest rates off to the moon. Again, that could take decades, but that just means we will blow decades of time that we had to return to the principles of enlightenment and avoid that pain and all the pain along the way. When you look at Obama's innagural, it seems to be that the Dancing With the Stars electorate has taken over and that rhetoric is now a substitute for reality, so it seems that darkness has now won out over enlightenment.
    23 Jan 2013, 01:54 PM Reply Like
  • "Inflation allows the IRS to tax capital "gains" that are nothing more than inflation of the currency. A tax on constant real value."


    Excellent observation, shb.


    I would note that IRS is not the only taxing authority to do so. State and local governments do so as well and at those levels the "capital gain" on real property gets taxed whether it is "realized" or not. :-) With the housing bubble bust many (if not all) went a step further in increasing tax rates to maintain revenues, effectively taxing capital losses.
    24 Jan 2013, 03:25 PM Reply Like
  • One of the reasons why I bailed on oil stocks and moved toward oil-nat gas infrastructure equities is that with the vast increase in oil (and nat gas) being brought out of the ground in North America would result in a glut.


    I had thought there would be an oil glut maybe five years from now. According to the below article, the glut is already beginning to make itself evident:


    -- The US production increases is throwing the global supply models a major curve ball.


    -- This has thrown the whole supply chain on its back, Cushing [a storage facility in Oklahoma] is just a reflection of this fact, there is more oil than the world needs right now, and the world definitely didn't need an increase in US production.



    USA and Canada are producing so much oil that the refineries simply can't refine it fast enough, and, as the above article shows, now we're seeing a major build up in storage. New refineries, if built at all, are still three or four years out.


    Nothing is for sure, but with demand down, and more efficient vehicles being produced, it appears an oil glut is soon approaching, much faster than I ever anticipated.
    23 Jan 2013, 04:38 PM Reply Like
  • Agree with your observations and conclusions. Seems to me that because, as you say, "refineries simply can't refine it fast enough", that this is the best place to be in energy right now and for a while. Thoughts?
    24 Jan 2013, 08:50 AM Reply Like
  • Maya, Invest in storage and transport. Look at your list above. Transport fees are not as volatile as price of product.KMP is doing very well.
    24 Jan 2013, 10:07 AM Reply Like
  • Meryll Lynch's 2013 Outlook: A Watershed Rotation Into Equities:


    Good 13 minute video:

    23 Jan 2013, 05:01 PM Reply Like
  • I been watching for these numbers since steel (iron ore) prices started jumping around:


    China Factory Growth Quickens to Two-Year High


    Growth in China's giant factory sector accelerated to a two-year high in January, a preliminary private survey showed, as manufacturers received more local and foreign orders in an encouraging sign for the country's economic rebound.
    23 Jan 2013, 09:22 PM Reply Like
  • (CPST): "Capstone Receives Another Follow-On Order From Large Australian Coal Seam Gas Company"


    [HTL]: Note that these units are lower-margin stuff though.


    "... stated Ivan Reolon, Aquatec-Maxcon's National Manager of Sales and Marketing. "This second contract is for an additional supply of possibly hundreds more Capstone C30 microturbines over a five year period".



    24 Jan 2013, 08:41 AM Reply Like
    24 Jan 2013, 01:22 PM Reply Like
  • O.G. LoL! And so appropriate too!


    24 Jan 2013, 01:31 PM Reply Like
  • OyGee: Very funny! Thanks.
    24 Jan 2013, 01:50 PM Reply Like
  • Hilarious!
    24 Jan 2013, 03:28 PM Reply Like
  • Re-posting that one whenever opportunity allows - thanks OG!
    24 Jan 2013, 05:47 PM Reply Like
  • OG, good one. LOL
    24 Jan 2013, 07:11 PM Reply Like
  • Gov subsidies are famous for inflating assets. When you subsidize people's health and buy their food for them, you subsidize poor eating habits and you literally inflate their assets.
    24 Jan 2013, 07:35 PM Reply Like
  • A global perspective on investing with the World Bank's IFC, an interview


    As seems often the case, need help getting clicks to help this article succeed so I can build on it with more investment professional interviews (in the works).
    24 Jan 2013, 01:31 PM Reply Like
  • Thanks for very nice comment Maya. SA editor Eli Hoffman also said this interview was "inspiring" and "superb".


    ... and yet it is struggling for page views...


    I'll figure out this publishing gig one of these days. Maybe I should just write articles about AAPL, GLD, XOM, and China :-P


    Embedded video also now works thanks to SA tech support. (Now I just need to figure out how to get this right when I submit the first time...)
    24 Jan 2013, 05:46 PM Reply Like
  • NW Territory Mint's latest bullion product--what a statement:
    24 Jan 2013, 01:35 PM Reply Like
  • Dammit now I have to buy some of that too!!!!


    O Geeeee stop it!!!!!


    Course once the guns loaded with that I'll be singing this.......

    24 Jan 2013, 07:40 PM Reply Like
  • DG-You can put it right next to your stagecoach silver!
    24 Jan 2013, 07:59 PM Reply Like
  • More toward the theme of oil inventories rising can be read in this link:



    -- Capacity on the line recently tripled to 450,000 barrels a day and helped to drive Nymex prices up by $12 a barrel since early December, on hopes that record-high stocks at Cushing would decline and the oil would fetch a higher price in the Gulf.


    But operators of the line said "unforeseen constraints" have limited the flow to 175,000 barrels a day for an unspecified period.


    -- Rising U.S. crude-oil output, now at a 20-year high above 7 million barrels a day, has plumped up crude-oil inventories, which stand 8.8% above the five-year average level, EIA data show. Last week, crude-oil stocks were at a 30-year high for the week. Inventories at Cushing have climbed nearly 14% since early December to record levels near 52 million barrels.


    -- Mark Waggoner, president of Excel Futures in Bend, Ore., called crude-oil futures "extremely overbought" and said he expects a pullback in the next few weeks to $90 a barrel, where he would be a buyer.
    24 Jan 2013, 02:28 PM Reply Like
  • For income related articles, check out the work of Randy Durig who writes about global income opportunities. List of articles:
    24 Jan 2013, 06:21 PM Reply Like
  • WAKE UP CALL. Fed balance sheet is now $3T heavy and real interest rates on home buying is now negative 4 percent (and that's coming from a mainstream Wells Fargo economist!)


    We have to ask ourselves -- whether the current market euphoria is being built upon a REAL slow recovery or on sandcastles and new bubbles?? I continue to keep a short leash on my gains, but IMHO the "good" news is that stocks will likely keep going up in the short term.


    I follow Chris Whalen and this piece is definitely worth a read:


    "We pretend that the “greatest nation on earth” can borrow endlessly ... Inflation is the ultimate tax – a steady erosion of value that affects all Americans but that we pretend does not exist."


    "we embrace a kind of silly neo-Keynesian socialism that allows President Obama to declare that we cannot balance the federal budget because it would be unfair. The Republicans, mind you, are hardly better ..."


    "as the Fed has been dealing with the ill-effects of the 2007-2009 subprime boom, they create the circumstances for numerous new bubbles in multiple asset classes. ... The supposed recovery in the housing sector is a case in point..."


    " the central bank has stoked the hell furnaces of future inflation and financial contagion. Many parts of the US economy are so badly damaged that they will not participate in this latest round of economic pump priming, but those sectors that are able to access easy money are likely to soar in future weeks and months. The good news is that stocks will go up, but bonds will go down and the cost of everything else will be higher."

    25 Jan 2013, 07:46 AM Reply Like
  • >Mercy, I can't help but compare this with the inflating bubble in China, brought about by their government policies and easy money.


    Is the US going to start building "ghost cities", because they can? Likely not. But with the stock market now apparently driven up by investors fleeing bonds and CDs and buying stocks for their dividend yield, and the hope of cap gains, how different will we be?


    Will there be floats of companies that are dividend generating entities with no other real reason to exist? Could a clever financial engineer design a "legal Ponzi scheme"? Company goes broke. Oops! So sorry! Your stock is now worthless.


    It happened in 1998-2000 in the technology market. Companies built unwanted telecom equipment, stored it and claimed it as "sold" via accounting tricks. I doubt anyone went to jail, anymore then higher ups in the "investment bank" industry after the CC of 2008-09. The laws are written to protect corporate higher ups without proof of deliberate fraud. "I didn't know about it" apparently covers almost anything. What, they didn't read documents sent directly to them? Sure. Just ignernt good ol' boys.


    I also am holding far more cash then I usually do.
    25 Jan 2013, 12:26 PM Reply Like
  • <"I didn't know about it" apparently covers almost anything.>


    I just did not see that whale coming outa nowhere!
    -J. Dimon


    Great posts, Mercy and SHB
    25 Jan 2013, 01:31 PM Reply Like
  • All, Tesla is close to a 12 month high. Is anyone else thinking of shorting it?


    But PUT options one year out are silly expensive. No one in the options market seems to have any long term hope for a thriving Tesla.


    25 Jan 2013, 12:32 PM Reply Like
  • >siliconhillbilly ... If buying PUTs is expensive and you want to short, why don't you consider selling long dated CALLs & offset that risk with selling long dated PUTs? I'm not an options guy so I'll give no advice on spread, but I've done this sort of short on the advice of a friend that is strictly an options trader. Seems to work.
    25 Jan 2013, 01:09 PM Reply Like
  • Wouldn't you need to consider if their subsidies were in jeapordy or not?
    25 Jan 2013, 01:28 PM Reply Like
  • DRich: Selling options tends to freak me out. I avoid it without a strong reason. This is just an urge to profit from a non-strategic bet.
    Not good enough to risk a freakout :-)
    27 Jan 2013, 02:15 PM Reply Like
  • A friend sent me this e-mail. Food for thought/comment:


    "Have noticed over the last month that the once daily offers from Credit Card companies has increased dramatically once again. They want to offer you interest free balance transfers for 18 mo. Think I have received 6 in the last 2 months. All have gone in the shredder!


    I have also gotten equity loan offers, of course a starting interest rate of just below 5 % but of course they are all adjustable.


    I find this such a red flag. This is exactly what happened last time...before the bank crap.


    Also have seen so many headlines saying that the "small investor" is gaining confidence and are starting to get faith in the stock market.....RED FLAG."
    25 Jan 2013, 07:20 PM Reply Like
  • I should have clarified this comment comes from a professional housewife, and she's calling a top in the market imminent based on her observations of the last decade plus.
    25 Jan 2013, 11:34 PM Reply Like
  • I would have to divide the 2 topics (2Big marketing and stock spamming)...


    The 2Bigs are indeed reverting to their prior bad habits, but what else should we expect in a crony capitalist/socialist new world? The 2Bigs are THE example of corrupt crony capitalist behavior, and these marketing ploys are confirmation, as if that was still needed, that their entire business plan now rests upon taking long shot risks with the taxpayer underwriting any downside losses.


    The stockspamming has become so omnipresent, however, that I would hesitate to call any sort of macro-market position based upon it.
    26 Jan 2013, 09:58 AM Reply Like
  • trip, do you see evidence of the 2Bigs driving an all encompassing Pump and Dump scheme? I can't believe this level of manipulation of stocks and MM funds is for no overall purpose.


    I get the feeling that it is designed to drive "retail, uninvolved" IRA and 401K type investors between fear and greed. But to what end?


    Ya'll are more experienced then I am; how would the Big Boys benefit? If investors move from "cash" (short term bonds/MM funds?) to stocks when the "news" is good and stocks to "cash" when the BS swings negative, is that enough justification for the propaganda we see?


    A scenario:
    The "scary" BS is applied after the market has fallen maybe 50% from the high and is showing signs of slowing its fall. That induces the retailers to sell approaching or at the bottom. Once the volume of sales falls off and the market bottoms, the cry of "market has bottomed, time to buy" BS begins. As the up market momentum builds, the BigBoys sell small amount of stock to the "retirement investors". When momentum slows the "frenetic happy talk" starts up to push the swing as high as possible, with the BBs dumping everything on the retailers like mad. "Stocks going to the moon next year, buy now before they are all sold out !!"


    Is this scenario realistic? If so, how can me prove it?


    Sorry, too much coffee and a sinus headache cause me to babble depressive stuff. But still........
    26 Jan 2013, 01:26 PM Reply Like
  • >Jon, lots of self-serving comments in the "investment news" arena.


    In the stock market, 99% of everything you read from institutional/commercial sources is BS.
    25 Jan 2013, 08:42 PM Reply Like
  • A good friend who was once a very successful hacker (now a very successful game programmer) recently told me that over 93% of all email is now spam. Similar inroads into txt messaging and even audio messaging should be expected...


    He told me that he thinks the infrastructure can only sustain about 2 more years of the growth of automated spamming before it collapses. Even Moore's law is eclipsed by its spammer codicil:


    "Spam and malware WILL expand to fill the entire available space of all storage devices".
    26 Jan 2013, 10:03 AM Reply Like
  • That's fascinating TB.


    Guessing the Mayans and Nostradamos didn't see that one coming.


    I've already felt the inroads into text messaging. Seems harder to block once it starts.
    26 Jan 2013, 10:42 AM Reply Like
  • For a thought-provoking analogy...


    Think about how nearly the behavior of spam in our communication infrastructure mirrors the behavior of high frequency trading manipulation in our economic markets...


    I suspect that the cautionary note about impending collapse from over-abuse applies to both cases.
    26 Jan 2013, 07:11 PM Reply Like
  • Does anyone have contacts at a newspaper in Minnesota? (Minnesota Star Tribune, etc.)
    26 Jan 2013, 02:12 PM Reply Like
  • As usual, Kuppy makes a lot of sense.



    He aptly calls the ongoing international currency war a "race to the bottom". That seems about right :-)
    27 Jan 2013, 02:10 PM Reply Like
  • The wrong kind of capitalism

    27 Jan 2013, 07:23 PM Reply Like
  • How to piss off a frog (don't miss the ending):

    27 Jan 2013, 09:11 PM Reply Like
  • Maya that was hilarious! Got my day started with a roaring laugh. Sent it to a friend who is a Science Teacher and told her to share this science lesson with her kids!
    28 Jan 2013, 06:55 AM Reply Like
  • I sent it to my wife - an object lesson in teasing the "big dog". ;-))


    In my dreams!


    28 Jan 2013, 07:51 AM Reply Like
  • Playing with my relatives is not nice.
    28 Jan 2013, 10:35 AM Reply Like
  • (CPST): "Capstone Receives Orders for $2.9 Million From German Distributor E-Quad Power Systems"


    "The January orders from our German distributor E-Quad are almost equal to the total amount E-Quad purchased from Capstone in the previous nine months and are consistent with reports that the German market is starting to rebound,"


    "Despite the slowdown in the European market, Capstone has posted higher year-over-year quarterly revenues for 23 consecutive quarters. A rebound in Germany and France would definitely ease some of the overall headwinds we have experienced in Europe," said Darren Jamison, Capstone's President and Chief Executive Officer. "Continental Europe has always been an important part of our business and represented 18% of total revenue last year. We look forward to seeing all of our European partners rebound," added Jamison.



    28 Jan 2013, 11:11 AM Reply Like
  • There was some speculation that, as Europe begins to develop their own natural gas finds (and probably using new technology to enhance production), Capstone could benefit. I consider this solid evidence that this process has started...


    The fact that even with these developments probably starting during the previous year, I would think that 18% revenue share for Europe was a low outcome, and it could easily increase much more this year (even without the current good news). I would not be surprised to see Europe account for 24%+, and perhaps for a large portion of the corporation's growth year over year.


    As for Germany, the upcoming Bundistag elections next September could push sales of Capstone products in that key market even higher as the Left and Greens gain more power to push their altenergy agenda to shut down coal and nuke plants while emphasizing solar and wind. NG seems to be the likely winner (perhaps their only relevant scale choice) to use to balance the wild swings of solar and wind dumping into the common grid.
    28 Jan 2013, 11:27 AM Reply Like
  • I don't know how much more power "the Left and Greens" will capture, if any more at all. High German electric power prices and international competition is creating some pressures.


    Could be that the political backlash to rising power prices promote greater development of domestic NG (and more CPST sales) despite the Greens, et al.


    Does shut down of coal-fired plants in Germany increase potential output of coal bed/seam methane?
    28 Jan 2013, 12:13 PM Reply Like
  • Does Germany have an abundance of medium or low grade coal in near surface deposits? If so, cheap drilling could produce a low flow supply of coal seam gas that might not be sufficient to support distribution infrastructure, but could be burned locally in a uTurbine, with the power added to the local grid.


    I'm speculating here. I don't know enough about CSG or the cost of NG gathering. I do know that if it is added to the NG pipelines it needs to be processed to meet some standard. There has to be fixed costs involved.
    30 Jan 2013, 05:30 PM Reply Like
  • SHB: Germany is a *big* green state - early leaders in going to solar, wind etc. with subsidies. I can't imagine them digging around in coal beds.


    I suspect they'll be doing more renewables, add some storage, maybe continue to push on hydrogen (HYGS has been getting some business over there for a while), etc. Plus, I think if they wanted NG they easily buy some from certain neighbors - Russia is a *big* exporter of that stuff to the rest of Europe, especially its neighbors. Unfortunately, they also use that as a political hammer against their neighbors, so there's some push for their victims to find their own and bring fracking in to start to exploit those resources. Russia will do all it can to prevent it, including funding protest groups, which has been documented a few places.


    Don't know, of course.


    30 Jan 2013, 05:58 PM Reply Like
  • Thanks HTL.


    Since they already burn NG in quantity, I wonder how big the opposition to exploiting local coal seam gas could be? If it is produced locally it just keeps foreign exchange and some jobs in country. I don't see any downside.


    Then again, Greens aren't known for being all that rational. Is imported NG "greener" than local NG? ;-)
    31 Jan 2013, 12:51 PM Reply Like
  • SHB: It's all good until NG use starts to cut down on the adoption of solar and bird-killers! Then the greens switch course, as they did here in the U.S., and resist switch to NG.


    31 Jan 2013, 12:54 PM Reply Like
  • shb, I expect even German Greens consider CO2 preferable to CH4. At least, "coal seam" gas captured and reduced to CO2 + 2*H2O stands to have some chance of a "benign neglect" posture (if not support) from the Greens. IPCC and catastrophic anthropogenic global warming mantra holds that CH4 has 25X (IINM) more warming effect than CO2.
    31 Jan 2013, 01:13 PM Reply Like
  • D-inv types: "IPCC and catastrophic anthropogenic global warming mantra holds that CH4 has 25X (IINM) more warming effect than CO2."


    Exactly. That is why we should BURN IT ALL! Right at the well head, so none of it leaks out and "hurts the environment" :-0


    Sigh. And the schools, US and EU, crank them out by the millions each year.
    31 Jan 2013, 01:45 PM Reply Like
  • HT-
    Same as when T. Boone Pickens was on his NG kick as an alternative to big oil and in the offing was a heavy promoter of wind power. Texas BTW reputedly draws a significant amount of its energy needs from wind generators- Over 12% by this account-



    NG development will reduce the inclination to seek alternatives. Our congress will just say 'See- We don't need funding for alternatives anymore.' We've got a bunch of gas already......
    1 Feb 2013, 10:42 AM Reply Like
  • Interesting article on Merkel's 'green shift' in promoting coal to replace nuclear- Coal being much cheaper than gas and utilizing new coal burning technology a 'clean' fuel.

    1 Feb 2013, 10:56 AM Reply Like
  • The court decision striking down Voldemorts non-recess recess appointments is big! Not only did the court firmly establish that the executive cannot decide when the legislature is in session or not it stipulates that only vacancies occurring during the recess can be filled by recess appointment. If it stands that eliminates the executives ability to wait for a recess to make an end run around the confirmation process. In addition all of the decisions made by illegitimate appointees will be vacated. I'm not sure what that portends for retailers in the case of the new consumer protection agency or for the labor market but I'm sure it will have some impact on both.
    28 Jan 2013, 12:35 PM Reply Like
  • Excellent analysis in the weekend WSJ noting that NLRB will be on the ropes for decisions handed down without a real quorum and Mssr. Cordray may actually have to face, gasp, gulp, QUESTIONS from a not-overly embracing Congress in order to secure his czarship...
    28 Jan 2013, 01:07 PM Reply Like
  • Kinder Morgan increasing Canadian storage capacity

    28 Jan 2013, 01:41 PM Reply Like
  • Here is about as comprehensive article on Natural gas exports as I have really show why the big oil is in LNG now, and it's not for USA usage:
    28 Jan 2013, 07:28 PM Reply Like
  • Freaking hilarious how far we humans have come. Now we have a smart phone bluetooth app that will flush your toilet if you forget to do so. Who in the heck forgets to flush? Pretty cool looking commode, though:

    28 Jan 2013, 10:28 PM Reply Like
  • I've mentioned AMSC occasionally here. Or maybe on the AXPW blog. I forget :-)


     They are having hard times after the Chinese stole technology and defaulted on contracts with them. Hence the drastic stock valuation drop since 2011.


    Their superconducting, resistive, automatic Fault Current Limiter is the only product of it's type. It can only be made with SC wire, which AMSC supplies. It is vastly superior to existing systems that aren't very successful at preventing cascading over-current failures on electric distribution links. Also considerably smaller.


    I have been wondering when this product would be used by the industry in anything other then test installations. Apparently that time has come. Could be a nice boost in income for them. None too soon!

    29 Jan 2013, 12:10 PM Reply Like
  • I just posted a version of this comment in the Axion Power concentrator.


    Re, CPST:
    I just has a thought that goes, "when regulation fails, opt out!".


    In this context, it means that if government fiddling with "green power" taxes (tariffs, surcharges, etc) on electricity buyers gets obnoxious, there now exists a technology that could allow buyers to opt out of the grid for most, or all, power needs.


    I don't know how large a burden such charges are in the US, but they seem to be higher in the "enlightened renewable power" grids of the EU. How big a percentage of the generating and delivery cost do taxes need to be before the move to micro-grids and local generation expands rapidly?


    Recall that any building that uses natural gas for heat and hot water can add micro-generation and have effectively free electricity generating fuel, since they already burn the gas in boilers, etc. Extracting energy with a gas turbine and still having 1000F degree gas for heating is a no-brainer, technically and economically.


    For you technical types, there is SOME heat energy loss when the turbine extracts mechanical energy. So call it a 70% discount in the cost of gas to run the turbine. Nothing is free in thermodynamics :-)
    29 Jan 2013, 12:58 PM Reply Like
  • hillbilly, for us technical types that would be called co-generation. I used to build engines at GE for that very purpose in the LM2500 and LM6000 Marine and Industrial plant.
    29 Jan 2013, 06:05 PM Reply Like
  • guns: yes indeed. Buzz words are handy if you understand exactly what they mean in context.
    29 Jan 2013, 06:40 PM Reply Like
  • CPST co-generation market opportunities might be fairly substantial, but could be a slow growth market for the smaller units.


    A lot of homes use home heating oil (diesel) or NG for hot water and warm water space heating via baseboard/radiator units during the heating season. CPST microturbines are available for both fuels, but that home market doesn't appear prospective for CPST. Most homes likely consume less than 5kW day whereas the smallest CPST turbines produce 30kW and demand for heating in very seasonal. Commercial/restaurant buildings, highrise condominiums, hotels, laundromats, industrial facilities using process heat in production might be good candidates for microturbine co-generation, though.
    29 Jan 2013, 07:14 PM Reply Like
  • Just adding to my thoughts on co-generation and micro-grids.


    AS the grid quality continues to deteriorate in the US, first businesses that NEED stable power, and then upscale residential areas, will move towards local control of power quality where they can "vote for quality with their money". Micro-grids will increase in number and expand in area coverage. Interconnection to other grids, micro or otherwise, will happen when useful to both entities. All without government interference. Why? Because that is the way the politically connected locals will want it.


    At the same time, the "big grid" will get less reliable. Income of those utilities controlling it will decline and even more maintenance will be deferred. Upgrades will become nonexistent.


    Think of India where the grid extends quite widely but power quality is terrible. And getting worse.


    Grid power doesn't pay for itself there, because of the political patronage system (electric power "for the masses") allows wide scale power theft. The less well to do can't afford private generation and suffer with the resulting off and on power.


    The more affluent Indians have installed diesel generators for their homes and/or businesses, so they care less about "the grid" and its problems. If the politically connected "big boys" stop caring, the politicians will began diverting tax money to other needs they DO care about. Fire, security, roads.


    The general results in India are beginning to look like where I expect our country to be in 10 to 20 years. All revenues that the guvmint can attach will go to shoring up the entitlement systems.


    Power companies will be under political pressure to carry the "temporarily disadvantaged" for longer and longer periods after they fail to pay their electric bill. After all, the "greedy money suckers" can afford a few dollars. Even better, the govmint doesn't need to borrow OR raise taxes!


    So from an investment standpoint, it seems reasonable to slowly leave the regulated utility arena and move towards owning stock and debt in smaller, private, unregulated local power supplying entities. They just might evolve into the new "universal" electric power supply mediator. I.E. "we buy all forms of energy and sell electricity"


    Electricity storage systems almost have to show up somewhere in the mix.
    29 Jan 2013, 07:22 PM Reply Like
  • SH, D-Inv, and DG --


    Thanks for sharing your technical knowledge above -- the perspective is helpful when I evaluate market players with some game changing capabilities.
    29 Jan 2013, 07:33 PM Reply Like
  • Chesapeake Energy CEO steps down today, something to watch.
    CHK up in AH.
    29 Jan 2013, 07:34 PM Reply Like
  • GDP negative for Q4. Something we all knew would happen but the CNBC folks report that everybody is surprised.



    30 Jan 2013, 08:32 AM Reply Like
  • Yeah, but CNBC's new anchor is going to up their average IQ
    30 Jan 2013, 09:09 AM Reply Like
  • Don't you think that was mostly "sandy" effect ? I think that's most of it, either way, as u said it was expected.


    It should also shut up the naysayers at the fed.....
    30 Jan 2013, 09:16 AM Reply Like
  • Jon: LOL, the good news for CNBC is that they just doubled their collective IQ...


    The bad news is that it has increased to a "2".
    30 Jan 2013, 02:20 PM Reply Like
  • Shazam! Gomer Pyle just got married.

    30 Jan 2013, 02:25 PM Reply Like
  • Joseph: This weekend I surfed around, looking for any kind of MLP or REIT that is exclusive to storage of oil and nat gas. Came up empty, only learning that MLPs in general are expanding their storage (and building pipelines probably at an unprecedented rate).


    I decided to go another direction and bought some Windstream (WIN) that yields 10.3%; a rural telecom. Chart shows that I probably should have bought it earlier this month -- like everything else.


    During a half hour plus conversation with my broker today, we spoke at length about MLPs, storage, pipelines, etc. He recommended Embridge, and with a mere flick of effort, I discovered this most excellent SA 1/28 published article on pipelines and storage, which features Embridge as much as an energy infrastructure play:



    Highly recommend for all interested in domestic MLP plays to read Value Trader's brilliantly concieved article. He has a new follower.
    30 Jan 2013, 01:52 PM Reply Like
  • Myascribe:
    Thanks for the link and the heads up on EEP and ENB. Nice yield on the EEP if it holds up.
    You are right on point about Value Trader- He must be very close to the energy industry to come up with that most useful analysis.


    1 Feb 2013, 10:20 AM Reply Like
  • Thank you, Maya. I'm at the TD Ameritrade Institutional Conference and, counterintuitively perhaps, have barely had a chance to check the market. Heard Condaleeza Rice yesterday; Simpson and Bowles today. Appreciate your thoughts on our old favorite Enbridge and I'll keep researching to find the best of the aggregation, transport, and storage companies alongside you!
    1 Feb 2013, 08:41 PM Reply Like
  • LT, I think you have spoken about this before. Student loan debt. About 1/3 of student loan debt belongs to subprime/risky borrowers.
    That is $300B of $900B outstanding loans. Interesting thing to definitely keep a watch on.

    30 Jan 2013, 02:08 PM Reply Like
  • Another 20lbs of rocks in the economy's rucksack. Not going to end well. quick quiz, what are the three most gooned up, dysfunctional, out of control areas of US economic life? -- housing, healthcare, education. What three areas has the gov't mucked in the most? housing, healthcare, education... probably just coincidence though.
    30 Jan 2013, 02:25 PM Reply Like
  • yes, I would expect that in 2014 (if we get the next 2 parts of the sequester/debt ceiling/budget solved) that student loans have to be addressed.
    I look for this to be done in maybe 2-3 ways.
    - Fed buys loans and lowers the rate to zero
    - optimum is gov't & corp. cooperation, corps hire the students and pay the loans off over say 10 years if they stay. Helps in all aspects, employment of the young, employee retention, everyone gets paid. Gov't gives corps a tax break for the hiring deal...of course after putting the screws to them on corp. tax overhaul :)
    - worst case, gov't has to write the loans off. or debt forgiveness.


    Something has to happen, I seen this week where student loans balances were up 47% last year compared to ?. It has to stop. I don't know what the average is now but we see first time home buyers with $25,000-60,000 every week. That's a second house payment. Monthly payments range from $400-$700 / mo. Won't work here in KY, salaries are not high enough.
    30 Jan 2013, 02:26 PM Reply Like
  • Problems already started. There's an nbc news article out there about it from September last year and this from CNBC today.



    30 Jan 2013, 02:40 PM Reply Like
  • LT: If the borrowed money didn't end up supplying a degree (my guess is this is common), or the degree is a worthless one (philosophy, economics, history) why would a company prefer to hire an employee with an attached debt when there are experienced, debt-less folks looking for work?
    30 Jan 2013, 05:38 PM Reply Like
  • Hospitals did this for nurses when there was a shortage. Nothing else worked to retain employees.


    It will take gov't bribery in the form of tax breaks to make it work across the board. I can't prove it, but trust me it works.


    There is no other way out for these kids...and IMO, it is not their fault. We told them to get a college education and they did. The way it was paid for was a grave mistake....a $ trillion $ mistake.
    30 Jan 2013, 05:43 PM Reply Like
  • yep, and nearly every college town is a lovely little hothouse of overpaid leftist administrators, professors, facilitators, counselors, coordinators, etc etc, all surrounded by an exquisite reality-distortion field within which quality of life is off the charts, and quality of perception is another story. These wondrous little greenhouses are bathed 365 days a year in federal, state, and foundation sunshine and are watered continuously by the finest trickle-on aqueduct system the world has ever known. No wonder everybody wants in! ;)
    30 Jan 2013, 06:06 PM Reply Like
  • LT
    They did the same with Doctors. I know one who had to work in a poor rural area to pay back her education. (I don't remember how long she had to work there.) This was a deal they offered her when she graduated.
    30 Jan 2013, 09:30 PM Reply Like
  • Froggy they do it for dentists too. The link below has the info for many programs. Join the Army and you can get $40K per year towards your student loans as a dentist. I am sure there are similar programs for Doctors.



    The big difference is that this is not for just any degree. Getting a liberal arts degree may not be in a students best interest (they know that-so they should shoulder a large part of the blame) but its the easiest one to get while partying along through college and keeping mom and dad happy with better grades and actually graduating with a college degree.


    Engineers, scientist, biologists, chemists etc... are the better degrees to get if someone wants a job. Most students are not that dedicated so they take the easy way out. Its going to cost them and us a lot!!!
    31 Jan 2013, 08:40 AM Reply Like
  • In the days of church and state, the church would advocate for the king. In return the king would use the coercive power of the gov to force everyone to support the church that was advocating for the king. The church told people that they would be punished for not supporting the king, and the king said he would punish the people if they didn't join the church and pay a tithe.


    Now, when people go to college, the college tells them they need to do whatever the gov tells them to do, and in return the gov rewards the colleges for the advocacy with grants and easy students loans. Its the same scenario. Gov that wants to control people's lives so the people in the gov can get rich, always needs an advocate, and the reward for the advocate, is the advocate gets rich too. The ones that wind up paying is the populace at large.


    We subsidize healthcare, and are health care costs going up or down? We subsidized housing, and did real estate go up or down? We subsidize education and are education costs going up or down?
    31 Jan 2013, 08:53 AM Reply Like
  • Jhooper that reminded me of this quote.


    If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand.
    Milton Friedman
    31 Jan 2013, 09:18 AM Reply Like
  • Yeah. That's the main problem with gov intervention. A gov gun can definitely induce more consumption. What it can't induce is new technology that can create additional supply to keep up with the new consumption. Thus when demand, outstrips supply, price goes up. If you really think about it, inflation is anytime an asset price goes up because supply can't keep pace. The reason a gov can induce inflation is becuase it can use guns to muster demand that outstrips supply. The result is the thing for which the coercion induced demand is mustered for, goes up in price.
    31 Jan 2013, 09:26 AM Reply Like
  • DG
    I have known a lot of students who were taking classes they knew would not lead to a job. Rather than stop digging a hole for themselves. their plan was to finish the degree and start an employable one afterwards. This was into 2011.
    31 Jan 2013, 11:01 AM Reply Like
  • Jhooper
    "n the days of church and state, the church would advocate for the king. In return the king would use the coercive power of the gov to force everyone to support the church that was advocating for the king."


    In England the king stomped out the catholic church and started his own the Church of England. the king was the head of the Church.


    In much of Europe the church got control of the govt. resulting in the Inquisition.


    Neither way is good for independence and freedom of thought or expression.
    Both examples were fresh in the minds of the founding fathers. Which is why they declared the separation of the church and state.
    31 Jan 2013, 11:17 AM Reply Like
  • "Which is why they declared the separation of the church and state. "


    They probably needed to go one further, and declare a separation of education and state, or a separation of economy and state. The inherent problems with such unions is diffuse costs and concentrated benefits. Those benefiting from the concentrations become advocates, and they always use the "public good" line to hoodwink people into letting themselves get suckered into the diffuse costs.


    This guy would be the Paul Krugman of his time.

    31 Jan 2013, 11:23 AM Reply Like
  • Jhooper
    In Eisenhower's farewell address he famously warned against the Military–industrial complex.


    There is a rumor that what he wanted to say was
    military–industrial–co... complex.


    Yes unfortunately govt allied with anything can get out of hand.
    31 Jan 2013, 01:51 PM Reply Like
  • fro .. Eisenhower's warning was dual with the second virtually ignored. "Military-industrial complex" gets all the press while the second has proven every bit as threatening to well being of the nation. It reads,
    shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.


    The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present – and is gravely to be regarded.


    Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.


    IPCC and climate change anyone?
    31 Jan 2013, 02:44 PM Reply Like
  • D-Inv: Good stuff. Worth everyone remembering when they advocate with (maybe?) insufficient thought to long-term consequences.


    31 Jan 2013, 02:50 PM Reply Like
  • Hum SA seems to have dropped it the second one should have added "congressional"
    Rumor has it this was dropped from the final version to appease the then-currently elected officials.


    another rumor said one draft added
    academic complex


    another rumor says another draft added
    scientific complex


    All fit with the rest of the document
    31 Jan 2013, 03:53 PM Reply Like
  • They will do a program where the student will have to work for a volunteer agency like Americorp for three or four years over seas and their loan will be forgiven.
    1 Feb 2013, 12:10 PM Reply Like
  • IPCC and climate change anyone? - D-inv


    Even insurers say it's probable that climate change is contributing to the increase in severe weather events in N.A . Do you have a wingnut conspiracy theory for that too?

    3 Feb 2013, 12:02 PM Reply Like
  • Insurers are just laying the groundwork for the exclusion clause "act of man" ;-)
    3 Feb 2013, 12:50 PM Reply Like
  • jpau, I would be astonished if P&C insurers have not incurred larger claims payouts in the wake of severe N.A. weather events in the most recent decade or two. The population is much larger now than it was 50 - 100 years ago with housing and businesses located in numerous previously undeveloped areas or areas with very limited development earlier. It is conceivable that climate change may be a contributing factor as it should be quite clear to anyone with a scintilla of intelligence that the single most constant aspect of earth's climate throughout it's history is CHANGE!


    Whether the extent or rate of climate change has been materially influenced by humanity as alleged by IPCC is different matter entirely. The course of history is demonstrating unequivocally that IPCC forecasts of global temperatures, precipitation, polar ice extent, etc. are unreliable. And even if those forecasts had proven valid there is consider question as to whether the most effective and reliable course for government policy would be mitigation versus prevention (reduce CO2 emissions).


    Regarding severe weather events (hurricanes, tropical storms, tornadoes, floods, droughts, etc.), the historical record is much longer and more complete for some types of events than for others. Data on number and severity of tornadoes, for instance, covers a much shorter time period and is much less robust than is true for hurricanes, floods and droughts. It is very, very clear data on hurricanes does not indicate any statistically significant increase in either frequency or severity of the phenomenon. Those data which are available for relatively severe tornadoes also do not appear to support any allegation of increased frequency or severity as is illustrated by NOAA at . I haven't looked for info on droughts or floods but something is likely available if your interested in pursuing the matter.
    3 Feb 2013, 03:10 PM Reply Like
  • Sometime back an informed person claimed that climate change would increase major storms. This was controversial at the time amongst the informed.
    Later it was 'proven' incorrect as big storms need big organization. Which is less likely with climate change.
    The official word was that we would have more events that would be smaller in size and big events would be reduced with climate change.
    It's been a few years since I've heard this and it is possible it has been debunked by now, But it's the latest I've heard, that I considered official.
    3 Feb 2013, 06:53 PM Reply Like
  • It's just a rehash of Malthus. Malthus predicted calamity from overpopulation. Climate disaster is the same. All these gloom and doomers are always wrong. The forget economics. We can't destroy the planet because the price is too high just like cant all die from overpopulation. Economics makes it so we can't afford to do such things. However people can and do make a living from fear mongering.
    3 Feb 2013, 07:35 PM Reply Like
  • There are data sets available which indicate a lull in climate change.
    4 Feb 2013, 01:52 PM Reply Like
  • History of Europe in a time lapse video (going viral on the other side of the pond) Great sound track, too:

    30 Jan 2013, 03:32 PM Reply Like
  • Wish they had a year counter to go with it counting the year as it went along.
    31 Jan 2013, 08:51 AM Reply Like
  • Gentlemen, there is a correction already beginning IMO.


    Small caps & especially micro-caps & bio-tech all red and down quite a %.


    FB missed earnings expectations and off 10%. Lots of red on my screen. Beware out there.
    30 Jan 2013, 05:00 PM Reply Like
  • One other indicator,


    Utilities are up .... maybe 5% compared to a month or so ago ?
    30 Jan 2013, 05:02 PM Reply Like
  • correction, FB is up a few pennies
    30 Jan 2013, 05:12 PM Reply Like
  • LT: My thought is that utilities are up because retired folks who need income are fleeing bonds and CDs as they mature. MM funds have been worthless for anything but parking money for a while.
    If the bond market ever starts to recover (when the Fed stops printing), reliable dividend paying utilities will start to fall. Only a matter of when.
    30 Jan 2013, 10:42 PM Reply Like
  • SH, when the stocks started rally....utilities dropped considerably.
    Yesterday, stocks down .4%, the Russell down 1.5%


    No doubt when interest rates rise they will drop....but for now I think there is a subtle move into safe dividend plays by the big boyz....they are always ahead of the game. I may be wrong.
    31 Jan 2013, 04:04 AM Reply Like
  • The russell is a great predictor. Pay attention to it.
    31 Jan 2013, 08:41 AM Reply Like
  • Might add that the baltic Dry Index is plunging too.

    31 Jan 2013, 11:40 AM Reply Like
  • Yves has an interesting article on mortgage securitization. The comments are interesting too.

    31 Jan 2013, 07:59 AM Reply Like
  • Big special dividend payouts, NOT salary increases made income go up:
    8:45 AM More on Personal Income and Outlays: December's special dividends no doubt had a role in one of the largest income spikes in memory, with the BEA reporting a 34.3% jump in dividend income. The BEA also notes the effect of lump-sum SS benefits. Likely of more import is the miss on personal spending. Comment! [U.S. Economy]
    31 Jan 2013, 08:47 AM Reply Like
  • LT, This might explain those dividend payments.

    31 Jan 2013, 09:25 AM Reply Like
  • LT, Income up and spending down. They saved it. Here is the article.

    31 Jan 2013, 09:37 AM Reply Like
  • Americans buy nearly half a billion in gold and silver in January.

    31 Jan 2013, 11:07 AM Reply Like
  • Fukushima fish with radiation 2500 times limit for human consumption.


    Sushi might be off the list for a while.

    31 Jan 2013, 11:12 AM Reply Like
  • Hm, (CPST) "Capstone Turbine Field Trained Technician preferred " says a job posting by Anadarko that was copied to the InvestorVillage board.



    Think this suggests something?


    31 Jan 2013, 12:26 PM Reply Like
  • HTL: I sincerely hope it doesn't suggest that Capstone turbines are less than robust!


    But yeah, seems Anadarko plans to use more CPST uTurbines in the future.
    31 Jan 2013, 01:03 PM Reply Like
  • I'm so glad we have "fair" markets with no illegal activities or unfair advantage. ~5 minutes. "An unusual trading pattern was seen before the DOE report today, ... ".



    31 Jan 2013, 04:06 PM Reply Like
  • Amazing! Unions supported Obamacare ... until it cost them like everyone else. Now looking for subsidies.



    31 Jan 2013, 04:11 PM Reply Like
  • Dont worry about Nokia:
    5:07 PM Nokia (NOK) and a slew of academic/business partners have received a 10-year, €1B ($1.36B) EU grant to research and commercialize graphene, an ultra-thin structure said to have "a breaking strength 300 times greater than steel," and which could potentially have a variety of electronics applications. A Nokia R&D exec compares graphene's importance to that of silicon and cheap iron. Hyperbole? We should have a better idea within a decade. 1 Comment [Tech]
    31 Jan 2013, 05:23 PM Reply Like
  • Ironic that he admixes "cheap" anything and graphene...


    They will milk the idiots in government until the fad passes. Unless the EU grant is loosely administered, Nokia is likely to spend more on the project than it takes in, and unlikely to arrive at a commercially successful product anytime this century.


    I DO see advanced material science including things like graphene playing a role in places where cost is literally no object, including some space program and defense applications, but those will be few and far between.
    31 Jan 2013, 06:36 PM Reply Like
  • trip: A slow and well thought out research program, with private money and oversight, just might turn up something. But NOKIA?? One billion Euros?


    Who does the technology belong to if they actually find something interesting? Why, everyone, of course!


    I would just love to see their plans. It should start with building a huge, "multiple use" facility to hold all the welfare recipients, uh, I mean research workers. Along with their admins (girlfriends) and other support folks (relatives). Don't forget the army of EU administrators needed to see that the money isn't spent outside the EU. Yech


    Corporate welfare, EU style.
    31 Jan 2013, 10:39 PM Reply Like
  • O Joy
    The govt gets to spend more money.


    Suspension of U.S. Debt Limit Wins Final Congressional Approval



    <Reuters A bill allowing the U.S. government to borrow money beyond its record $16.4 trillion debt limit won final congressional approval on Thursday, clearing the way for President Barack Obama to sign it into law.>


    <The Senate hasn't approved one in nearly four years, drawing complaints from Republicans that this has made it more difficult to find common ground on possible spending cuts.


    The bill states that if either chamber fails to pass a bill by the April deadline, its members will not be paid. Republicans named the measure, "No Budget, No Pay Act of 2013.">


    And if they pass some thing utterly stupid?.... Oh sorry what was I thinking?
    31 Jan 2013, 06:01 PM Reply Like
  • Dont worry, there is an article out that "the rich congressmen" can afford to miss a paycheck,


    But they won't :)
    31 Jan 2013, 06:13 PM Reply Like
  • I could take 10 people from the QC & AXPW boards here on SA and fix the problems in a week on the budget.
    Pay the debt off in say 50 years. and the gov't could still invest dollars for the people's benefit.


    But did it ever occur that probably "not a single one" in D.C. wants it that way ?
    31 Jan 2013, 06:18 PM Reply Like
  • Its not about the money. Its about the power. The failure of the FairTax to gain traction in Congress (even after being formulated to provide true revenue-neutral results) is proof positive.


    The ONLY thing that our wacky Federal income tax system does really well is to funnel outlandish quantities of power to a tiny minority of politicians.
    31 Jan 2013, 06:40 PM Reply Like
  • In all seriousness, tb, I concur with the thrust of your " Its about the power." The federal income tax system is the root of many evils including means for social engineering as well as accretion of finer control over centralized economic planning. Replacing, or substantially reforming, it is a very, very desirable objective. But, I am far from convinced the proposed FairTax is a good alternative.
    2 Feb 2013, 11:15 AM Reply Like
  • D-Inv: I've held for a long time that direct taxation of the citizens by the Feds was the single biggest mistake we ever made.


    FAIR tax doesn't address that.


    My opinion is the the Federal government funds must come from the states' taxing authority, as difficult as that would be, so that the decisions about how much and for what the money would be provided would reside in state politics - meaning the citizens might have a more direct input into the amounts and disbursements for the taxes.


    That would have two certain consequences: smaller federal government and chaos for some time. In the long-run should benefit the whole world.


    Mildly: there would be a period of adjustment to the new paradigm required.


    2 Feb 2013, 11:34 AM Reply Like
  • Anyone with questions about the FairTax should read the 2 (quick reads) "Fair Tax" books by Neal Bortz and John Linder. I have yet to encounter anyone who has read them both who has lingering doubts as to the Fair Tax system's superiority over our current system.


    As for the question of whether or not the United States SHOULD be a Federalized nation rather than an alliance of willing sovereign States, that question was debated and answered on the battle fields of the War Between the States.


    The Fair Tax is a highly efficient compromise which assumes that the United States will remain a centrally controlled Federalized nation... That moving away from the current system would require that the new system (to stand any chance at all of adoption) must be revenue neutral (capable of equaling the current system's tax revenue flowing to the Federal government)... And that a system of taxation (no matter how efficient or "fair") cannot replace a system of govenment all by itself.
    2 Feb 2013, 01:03 PM Reply Like
  • "Anyone with questions about the FairTax should read the 2 (quick reads) "Fair Tax" books by Neal Bortz and John Linder."


    Amazon informs delivery expected ~ Feb. 7.
    2 Feb 2013, 01:37 PM Reply Like
  • TB, I'm on the road home so I don't have access to my copy of "Flat Tax Revolution: Using a Postcard to Abolish the IRS" by Steve Forbes but the title says it all:
    1) Filing via postcard (every taxpayer and corporation pays 17%, no deductions, no credits, no special interest goodies) and
    2) (better yet!) Abolish the IRS.


    Some $400 billion currently going to lawyers, accountants and tax software could be used to fund entrepreneurs and other, rather more productive, enterprises...


    "Flat" isn't the same as "FAIR" or any other proposal; but ANY of them would be better than the frustrating morass we are now in...
    2 Feb 2013, 09:43 PM Reply Like
  • Amen sir. Perhaps after the upcoming national bankruptcy and dissolution event, something resembling such a plan will be an element of what rises from the ashes.
    2 Feb 2013, 09:53 PM Reply Like
  • tb, I've ordered the Bortz and Linder books to read the proposal as they presented (and defended) it. That is, I have committed to read original source material before advancing arguments for why I don't find the Fair Tax an attractive alternative to an income tax. The fact that I ordered the books and plan to read them, though, does not indicate I am completely unfamiliar with the proposal.
    2 Feb 2013, 09:59 PM Reply Like
  • I'll chime in that I prefer a National Gross Receipts Tax and to eliminate all income taxes. Rewards those who save. Taxes those who waste all our time by spending money on overpaid lawyers, accountants, consultants, and lobbyists (as a GRT taxes every transaction, not just "sales").
    3 Feb 2013, 12:15 AM Reply Like
  • Thanks D-inv. For a long time I have presented the arguments supporting the Fair Tax on line, but for a complete discussion it takes hundreds or even thousands of entries and responses. I find that the books save much time...


    This is not to say that all who read the books will agree with the concept, but thus far that has been the outcome in my personal experience.


    The Fair Tax is not of course synonymous with a Flat tax or even a conventional National Retail Sales Tax, since it incorporates certain social engineering components designed to make it palatable to the maximum political spectrum, from socialists to libertarians (thus neatly bracketing both major parties, of course). Everyone is thus seeing something there they like, and something they dislike - which is perhaps a simple definition of realpolitik.


    As long as such a discussion might run, even this is but the establishment of a beginning, since inevitably such a tax system, once established, would have far-reaching effects upon the entire structure of government. Even global geopolitical structures would be heavily impacted...


    It represents the first of a long line of dominoes.
    3 Feb 2013, 09:18 AM Reply Like
  • Now, now tb. Just think about all those high paying tax attorney and CPA jobs that would be eliminated if the federal income tax system was eliminated. What would happen to HRBlock and Turbotax! I'd bet that a few accounting professors, municipal bond brokers and IRS employees might have to find new occupations too.


    Lots and lots and lots of vested interests with stakes in existing income tax frameworks.
    31 Jan 2013, 06:57 PM Reply Like
  • If not paying taxes means that there is no need to count your money in business......


    But yea the IRS agents might need to do some looking.
    31 Jan 2013, 07:21 PM Reply Like
  • dg, replace the income tax system with a FAIR tax and I would expect head counts of attorneys, CPAs, and non-CPA accountants to drop sharply at the fortune 1000 companies, investment advisory firms, etc. I could be mistaken, but I really don't think so.
    31 Jan 2013, 07:36 PM Reply Like
  • I think your right about the head count dropping, but they wont all go away since they still have to hide money in the least taxed nation as all the large global corps presently do. I believe that least taxed nation would then be the USA. Unbelievable to think how many corporations would swam in here with their headquarters and a few million jobs.


    Alas our elected officials will not give up that power since that power ensures them many dollars from the special interest groups all clamoring to get into the office doors with bags-o-money for tax favors, grants, exemptions and truely many unknowns I am sure.
    31 Jan 2013, 07:43 PM Reply Like
  • "replace the income tax system with a FAIR tax"


    With a fiat system, you don't need expropriation taxes to "fund" the gov. Expropriation taxes are only needed when the gov doesn't own the money medium. In our case they do, so they don't need to collect in order to spend. As such, you don't need any expropriation taxes at all for the gov to spend. We could eliminate all income taxes, tariffs, etc, and just let inflation be our tax. It becomes a virtually inescapable consumption tax that doesn't require any compliance or collection costs.


    Granted the debt goes up and possibly inflation (assuming the Chinese don't ramp up their dollar asset purchases to keep their exports subsidized), but the way to beat inflation is with more productivity and less gov spending. The great thing about a consumption tax is that it is transparent. When the poor realize they have been funding their own welfare all along, suddenly you will get a whole lot more people on the band wagon of stopping wasteful gov spending. The reason they don't now is that they don't realize that the tax they are bearing is their reduced standard of living produced by gov subsidies. When they see whats happening to them by their own hand, hopefully reality will overcome their gov education and they will wake up.
    31 Jan 2013, 08:43 PM Reply Like
  • D-Inv: that would put to shame the reputed "efficiency" improvements reported over the last few yeas by corporations as they laid off workers, suppressed pay raises, reduced bene's, ...


    Our economy couldn't stand the shock as yacht purchases plummeted *again*.


    1 Feb 2013, 05:26 AM Reply Like
  • Our government at work again.

    31 Jan 2013, 07:11 PM Reply Like
  • Moby Marlin sinks boat

    31 Jan 2013, 09:29 PM Reply Like
  • What is "entitlement volumes" ??


    8:19 AM More on Exxon's (XOM) Q4 results: On an oil-equivalent basis, production fell 5.2% Y/Y; excluding impacts of entitlement volumes, OPEC quota effects and divestments, production fell 2.1%. Upstream earnings were $7.76B, -12% Y/Y. Downstream earnings were $1.76B vs. $425M in the year-ago period, driven by stronger refining margins. Shares +0.8% premarket. [Energy, Earnings] Comment!
    1 Feb 2013, 09:20 AM Reply Like
  • LT ...


    Equity volumes represent produced volumes that correspond to Statoil's percentage ownership interest in a particular field. Entitlement volumes, on the other hand, represent Statoil's share of the volumes distributed under a PSA to the partners in the field, which are subject to deductions for, among other things, royalties and the host government's share of profit oil. Under the terms of a PSA , the amount of profit oil deducted from equity volumes will normally increase with the cumulative return on investment to the partners and/or production from the licence. The distinction between equity and entitlement is relevant to most PSA regimes. The main countries in which we operate under PSAs are Algeria, Angola, Azerbaijan, Libya, Nigeria and Russia.
    1 Feb 2013, 10:11 AM Reply Like
  • tthanks D-inv
    1 Feb 2013, 12:37 PM Reply Like
  • For those interested in diversifying the assets in a self-directed IRA -- you may find this as interesting as I did. More folks are buying distressed homes and apartment buildings with IRA funds:
    2 Feb 2013, 05:29 AM Reply Like
  • On second thought -- going beyond the WSJ story -- gotta watch the taxman. Rules are complicated and the penalties are steep! Besides who wants to abdicate screening of renters to a third party?
    2 Feb 2013, 07:19 AM Reply Like
  • TB, what are your thoughts on sandstorm's purchasing of Premier Royalties common stock this past week? Apparently, Sandstorm is now a 59% holder.


    Just happened to catch this article on it:
    2 Feb 2013, 12:31 PM Reply Like
  • Several things on this topic, Jakurtz:


    The article's math is off. 33.7mm plus 11mm shares would be 44.7mm, not 46.7mm... Plus 7mm warrants, of course.


    I view the fit as excellent, for Royalty (now controlled by Sandstorm of course) has a business model which is similar to (but not identical to) that of Sandstorm. Their operations are parallel rather than competitive, up to this point, but it could also be that Sandstorm viewed Royal as a potential future competitor. This acquisition removes the threat, a strategic as well as tactical move.


    It would also seem that they intend (going formward) to use Royalty as their arm that invests in smaller, higher risk deals, while Sandstorm focuses on larger royalty contracts. When Sandstorm did the reverse split and uplisted their stock, they also entered a world of institutional investing via major exchanges which carries with it tight rules and relatively high capital standards. Royalty will be able to make moves which would be problematic for Sandstorm, if not completely beyond the pale.


    From a financial perspective, the deal appears solid but does not really add or detract value to the company based upon existing contracts held by the two. This vote of confidence by Sandstorm (which has top quality and experienced management) in the principal players at Royalty will, however, tend to lift that company's image in the field, so a synergistic outcome from that source can be anticipated.


    There are some who will be disappointed that Sandstorm elected to go this route rather than pursue various opportunities writing deals with miners in need of cash, but I believe this is a good time to trust the judgement of SAND's experienced management that this was the superior move.


    Overall I view it as a positive development and another example of the adept moves we have come to expect from Sandstorm...


    But SAND is certainly one of those complex stocks where each individual investor should conduct strong DD for themselves, for there is much information available.
    2 Feb 2013, 01:21 PM Reply Like
  • Thanks TB. Seemed to be a real smart move by Sand, I keep my eye on them but I don't completely understand their business so I just watch for now. It would take DD to figure out what percentage of what mines they own through which mining companies. One of these afternoons I may start doing some digging.
    2 Feb 2013, 08:15 PM Reply Like
  • I did notice as a streamer they showed less downside risk and volatility the past couple months while the rest of the miners keep diving. Though i believe the down trend for both streamers and miners should be reversing this month.
    2 Feb 2013, 08:20 PM Reply Like
  • SAND is definitely interesting, a quite specialized variant on BCDs and one which appears lacking any requirement to distribute earnings.
    4 Feb 2013, 03:27 PM Reply Like
  • I need a bit of education on mining terms. Anyone care to point me toward a good reference for terms such as "streamers" or expound on the term themselves?
    2 Feb 2013, 08:42 PM Reply Like
  • Streamers finance miners upfront capital needs in return for a percentage of the output, in this case gold, usually at a heavily discounted price. I believe Sand at one point recently had gold at a cost basis of $300/oz. from miners it had financed. I am sure TB can shed more light on how exactly how it works for sandstorm.
    2 Feb 2013, 08:55 PM Reply Like
  • You have it right, Jakurtz. Unlike miners whose operating expenses can (and have) affect profits, streamers (though often lumped in with miners) are acting as venture capitalists/bankers for miners. In a world where the traditional banks are increasingly uninterested in taking risks on actual startup companies (much less miners), and where they no longer trouble to maintain the skilled management staff needed to keep abreast of the very challenging mining field, a huge vacuum has been created - which expert streamers like SAND and SLW have capitalized upon.


    I won't go into detailed DD, which of course should be conducted by each individual investor, but the long term contract portfolios held by the various streamers (and there really are not many that lie at the top of the heap) is a good place to start.


    The fact that SAND does, indeed, hold a portfolio poised to see their long term contracts paid with gold (and gold equivilants, which can be a wild card since many mines produce multiple products including copper, silver, lead, zinc, etc) priced at a small fraction of the current market price.


    I no longer buy individual precious metal miners, and I am accumulating STTYF (Sandstorm's base metal and energy streamer) at $.39 or less instead of buying individual base metal miners.


    Given the political, geopolitical, and economic headwinds for miners, I believe that streamers offer both tactical and strategic advantages for the investor now and in the forseeable future.
    3 Feb 2013, 09:34 AM Reply Like
  • "Streamers finance miners upfront capital needs in return for a percentage of the output, ...."


    :-) Sounds like the hard mineral mining equivalent of a passive joint venture partner/PSA investor in development of an oil and gas lease with the payout received in "entitlement" oil.


    2 Feb 2013, 09:48 PM Reply Like
  • 2:46 AM The U.K. government plans to give regulators the power to break up banks that breach upcoming rules ring-fencing their retail operations from their investment-banking activities, Finance Minster George Osbourne is expected to say later today. "In the jargon, we will "electrify the ring fence,"" Osbourne will say. He's also expected to lay out new regulations that will limit banks' leverage. [Financials, Top Stories] Comment!
    4 Feb 2013, 05:10 AM Reply Like
  • 3:23 PM Two U.S. pension funds sue BlackRock (BLK), alleging the asset manager systematically "looted" securities lending revenues from its iShares ETFs by taking 40% of the money for itself. One academic says 20% is a more typical cut, and 35% would be considered "high." [Financials] 10 Comments
    4 Feb 2013, 05:12 AM Reply Like
  • S&P 2162 ?
    4 Feb 2013, 07:42 AM Reply Like
  • Vast Oil Reserve May Now Be Within Reach, and Battle Heats Up


    <Comprising two-thirds of the United States’s total estimated shale oil reserves and covering 1,750 square miles from Southern to Central California, the Monterey Shale could turn California into the nation’s top oil-producing state and yield the kind of riches that far smaller shale oil deposits have showered on North Dakota and Texas. >
    4 Feb 2013, 09:06 AM Reply Like
  • CPST thus far is green in a sea of red this moprning. Started a position last week @ $0.87. Thank you HTL, SH, D-Inv, et al. for all of the information you so generously share on this one.


    "Capstone Turbine(CPST) is higher this morning after it said it received a 5 MW follow-on order for a global upstream oil and gas producer. The five C1000 power packages will be installed in the Eagle Ford Shale play in Texas. This order increases this particular oil and gas producer's total Capstone fleet to 10 MW in the Eagle Ford play." Midnight Trader