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johnthebear
256 Comments
China and the Business Cycle
The 10% rise in FXP on Friday reflects the future of the short market on China. That is a bet I have made big time.
With the surge in fuel prices in China, we are about to see the collapse of the bubble, IMO. Not speculating... I am a betting man and I have a lot riding on the bet. Not sure what the difference between the terms is, but when you put hard earned money on it, you can bet it took a lot of thought and research.
Big Swing in Shanghai Market
The China Oil Companies will leap in praise of the government! Stocks will will go up in China, and the FXI stock, making a great holiday spirit suitable for the Olympics.
The only problem I can see is the Democrats in our Congress will try to figure a way to tax China's windfall Profits!
How is that for an answer to your question Mr. huangthomas?
Chinese Revaluation: Be Careful What You Wish For
Oil Outperforming Oil Stocks
A Meltdown in Emerging Markets?
After the games, I expect FXI to drop to less than $100, perhaps as low as $70. This estimate is based on a comparison of the decline of the NASDAQ in 2000 and the shape of the curve going up and down for both indexes. Plot both on a 10 year chart along with the other emerging markets and it becomes clearer the direction things are headed. Not knowable how far down anything can go.
Did you see that in the Lehman markdowns in their recent earnings report that they anticipate a 28% decline in property values in Europe? When values triple in 10 years, it makes sense and becomes comparable to CA in what might happen. How can China grow when their markets are shrinking?
A Meltdown in Emerging Markets?
Where Are the Chinese Stock-Market Riots?
They are going to sell $8.7 Billion in bonds to increase working capital! They are required to sell gas and oil below cost by the government. This will probably be passed on to consumers, then you might see riots like we are beginning to see here and in England. Truckers in England pay $9/gal for fuel.
The problem is OPEC,
VERY PLAIN, VERY SIMPLE.
THOSE THAT CONTOL THE OIL CONTROLS THE WORLDS ECONOMIC FUTURE,
AND THEY ARE NOW TRYING TO BANKRUPT THE WORLDS LARGE BANKS SO THAT THEY CAN GAIN POLITICAL POWER AND POWER FOR I-SLUM.
EVEN SUPER POWERS LIKE CHINA, INDIA AND BRAZIL CAN BE HURT IN THE COMING "GREATER" DEPRESSION.
Thursday Outlook: Commodities, Emerging Markets
Thanks for your charts, very interesting.
Oil Will Peak at $150-200 - Barron's Interview
Congress is about to enact a windfall profits tax on the Major Oil Companies to return the money to us, the outraged drivers of America. Do the profits support excessive share prices? I don't think so based on the chart evidence. Are the dividend outstanding? Absolutely not. China is selling most of the retail goods we Americans buy at Walmart. Should they be charged a Windfall Profits tax too? Wait till they start increasing their prices the way OPEC has done, and I might say yes! But certainly not now.
So where is the money going?
Simple, the countries that pump and sell the crude oil. Oil is $137/barrel and it cost our companies that buy and transport it to refineries huge amounts to process into gasoline and distribute in many thousands of service stations.
It is the Arab-Muslim nations that are making a killing. They have a club called OPEC that determines how much each country will sell on the open market. They control the supply through their oil monopoly. When they produce and sell more, the price goes down. The world markets and governments have absolutely no control over OPEC.
Remember the oil shortages in the 1970s? Remember the long lines at gas stations? Remember how high the prices were then? What happened.... We cut the speed limit to 55, drove less, started importing small more efficient cars that took away GM monopoly in this country. As a result of our required conservation and changed habits, we caused a major recession in the oil industry. The price of oil dropped to $10/barrel. Gas got cheap, we continued building more efficient cars and passed laws requiring that cars get higher m/g. Then in 2007, OPEC declared war on the world economies. They could not take us with their military, but they could easily declare economic war of a very effective and efficient nature. They can take over our banks, companies and effectively our future by owning our national debt. The wealth of the Arab kingdoms is unbelievable.
So what does all this mean for our future?
We have huge oil reserves offshore, oil sands in the western states, huge proven reserves in Alaska that our environmentalist wackos refuse to let us drill. The same is true in other countries.
Trees are a renewable resource and I guess you can say that people are as well. The reason for not drilling in 1979 in Anwar was Jimmie Carter. He thought more of a few animals in Alaska than it did of humans, Americans.
If we exterminated 95% of the caribou, they would grow back, but if we are defeated in an economic war waged by OPEC, we become slaves.
So if you agree with this notion, you should share your feelings with those unrealistic folks you know that value trees and animals more than Americans and tell them that we need to immediately begin drilling off shore and every where we can to produce as much oil in the US as possible. We cannot afford to pay the OPEC more than $400 billion a year and allow our balance of payments reach the point that they can control our government. We must defeat the notion of Windfall profits tax and even give additional tax incentives to spur our oil companies to rapidly drill on our own soil as fast as possible.
At the same time we can still go full speed ahead with alternate energy and conservation sources. The problem is America is running out of time. There is much to worry about. Do what you can to change the minds and hearts of those that are standing in the way.
Oil Prices Fall on Saudi Announcement
Congress is about to enact a windfall profits tax on the Major Oil Companies to return the money to us, the outraged drivers of America. Do the profits support excessive share prices? I don't think so based on chart evidence. Are the dividends outstanding? Absolutely not. China is selling most of the retail goods we Americans buy at Walmart. Should they be charged a Windfall Profits tax too? Wait till they start increasing their prices the way OPEC has done, and I might say yes! But certainly not now.
So where is the money going?
Simple, the countries that pump and sell the crude oil. Oil is $137/barrel and it cost our companies that buy and transport it to refineries huge amounts to process into gasoline and distribute in many thousands of service stations.
It is the Arab-Muslim nations that are making a killing. They have a club called OPEC that determines how much each country will sell on the open market. They control the supply through their oil monopoly. When they produce and sell more, the price goes down. The world markets and governments have absolutely no control over OPEC.
Remember the oil shortages in the 1970s? Remember the long lines at gas stations? Remember how high the prices were then? What happened.... We cut the speed limit to 55, drove less, started importing small more efficient cars that took away GM monopoly in this country. As a result of our required conservation and changed habits, we caused a major recession in the oil industry. The price of oil dropped to $10/barrel. Gas got cheap, we continued building more efficient cars and passed laws requiring that cars get higher m/g. Then in 2007, OPEC declared war on the world economies. They could not take us with their terrorist on 9/11 or their military, but they could easily declare economic war of a very effective and efficient nature. They can take over our banks, companies and effectively our future by owning our national debt. The wealth of the Arab kingdoms is unbelievable.
So what does all this mean for our future?
We have huge oil reserves offshore, oil sands in the western states, huge proven reserves in Alaska that our environmentalist wackos refuse to let us drill. The same is true in other countries.
Trees are a renewable resource and I guess you can say that people are as well. The reason for not drilling in 1979 in Anwar was little Jimmie Carter. He thought more of a few animals in Alaska than he did of humans.... my fellow Americans.
If we exterminated 95% of the caribou, they would grow back, but if we are defeated in an economic war waged by OPEC, we become SLAVES to the Muslims.
So if you agree with this notion, you should share your feelings with those unrealistic folks you know that value trees and animals more than Americans and tell them that we need to immediately begin drilling off shore and every where we can to produce as much oil in the US as possible. We cannot afford to pay the OPEC more than $400 billion a year and allow our balance of payments reach the point that OPEC can control our government. We must defeat the notion of Windfall profits tax, and even give additional tax incentives to spur our oil companies to rapidly drill on our own soil as fast as possible.
At the same time we can still go full speed ahead with alternate energy and conservation sources. The problem is America is running out of time. There is much to worry about. Do what you can to change the minds and hearts of those that are standing in the way.
How Will Oil Price Inflation and the Recent Earthquakes Affect China?
The real estate deflation/recession is spreading from US residential into commercial property in UK, Spain, Italy and beginning to show up in Germany. It will take a while longer, perhaps 9 months to have an impact on China.
Oil is at the heart of the problem on a world wide basis. OPEC controls production of oil and it's price.
At one time our government gave Saudi Arabia our latest military technology in exchange for stable production and price of Oil.
Now, after years of rapidly rising prices, it may be that Saudi Arabia and other oil producers in OPEC feel so absolutely rich that they can now promote global recession to make the value of all assets all over the world drop so that they can use their huge wealth to buy banks, real estate, companies etc at bargain prices to give increased political power?
Let's face it the worlds banking system has already lost $400 Billion in capital and many banks are diluting their stock by selling new shares at substantial discounts to regain their capital. Some have estimated that over $1 trillion will be lost in the coming year. Who wants to buy more discounted shares of banks and throw good money after bad?
Does OPEC have a conspiracy to make a global recession with the ultimate aim of Islam domination of the world?
The world should wake up to this potential. 9/11 was a failed attempt to take the west down by force, hitting US financial center, the Pentagon, Congress and the White House. While a military victory is possible with nuclear weapons, but might they also try an economic war through the use of oil?
In this view of the world, it is very hard to figure how China will be affected.
The Power of the Market: 600 Million People in China Lifted Out of Poverty Since 1981
Liberals can never be happy, conservatives look around and count their blessings.
Obama will try to convince conservative blacks that things have never been worse. Let us pray that truth will be exposed to the light of day, and that pandering in the black churches will end with some dramatic moves by the IRS... before, not after the elections!
Kind of makes you wonder how they measure poverty in China?
The Rising Risk of Emerging Markets
Emerging Markets Stocks: An Overvalued Asset Class?
It is a bubble led by "advisors" who are telling everyone to invest in Asia to avoid the USA. Well, it seems to me that when we slow down, we force Europe to also slow down, which in turn causes Asia to slow as well. When the chips start to drop, it won't be pretty.
Too much money laying around that investors don't understand how to preserve. They are still more interested in rate of return than preservation of capital. When it is too late, they will regret their mistakes.
The CMBS and RMBS markets are dead, and there is limited financing to buy companies or real estate, which means the markets are due to fall.
Shanghai Can't Break Through 50-Day
Investors have a terrible problem of figuring out where to invest when interest rates are lower than inflation and stocks are in a downtrend and commercial real estate is heading down, lagging the market. There are just a limited number of stocks that pay dividends and will remain healthy as stock prices generally decline.
Main advice is to be cautions and patient. Lower prices are heading our way and many will be hurt who have to sell in an oversold market. The problem is this decline will likely be much longer than most people understand.