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  • Could U.S. Shale Oil Companies Be The Next Coal Companies In Time? [View article]
    RD:

    In normal circumstances, I'd be parsing into positions, especially the majors. But, I only agree tat fear of calamity is priced in if it doesn't happen. If we start to get significant bankruptcies, then, like all other times that folks claim such-and-such is priced in, we'll see another round of major panic selling.
    Jul 27, 2015. 07:23 PM | Likes Like |Link to Comment
  • Could U.S. Shale Oil Companies Be The Next Coal Companies In Time? [View article]
    RD:

    In spite of all the negative rhetoric, which is usually buy signal, the underlying fact is that lots of very real, not good, deflationary stuff is happening out there in the global economic world, most especially in the energy and commodities sector. What some (many?) still seem to overlook is that there is $2.5T in debt in the energy sector, and it cannot be sustained if energy prices continue to plummet and/or they stay low for a lengthy period.

    Look what a single big failure, Enron, did to roil markets in 2002. Imagine an Enron every week for a while. Then, we'll see how wonderful low energy costs really are for the economy, as routinely repeated, and how stocks will behave in such case.
    Jul 27, 2015. 07:14 PM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #78 [View instapost]
    FG:

    I'm a value investor and would never suggest to anyone to wait for a new high to invest. Hardly.

    I'm just saying that there are some negative issues afoot that need very close observation, either to see them deteriorate even further or for some confirmed positive reversal. In my estimation, if not your own, it's not instructive to take cues from technicals at this juncture because they won't mean squat if the economic fundamentals and energy credit start to deteriorate.

    Technicals are great for helping to time buys, when one has other good reasons for thinking that buying makes sense. That's how I felt from 2009 to 2015, but I don't feel that way at this precise moment. Now, if we see some positive catalysts, there will still be plenty time to reap a fortune in undervalued sectors and issues. There's no need for waiting for any new SPX highs. But, failure to exercise a bit of patience and see how this plays out could also be very costly.
    Jul 27, 2015. 07:05 PM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #78 [View instapost]
    FG:

    I'm not talking about articles, opinions and rhetoric, as "fundamentals." And, I'm not talking about price action in various names. I'm talking about what's happening economically in world economies. There is nothing pushing the ball forward on any front, not Europe, not China, not emerging markets, not even here.

    The technicals may be great for a bounce and a quick trade, but they don't say anything about whether an investment, as opposed to a trade, is well considered at this instant moment. I still see substantial peril from the debt overhang associated with energy firms, so I want to see some evidence of a bottoming process in oil and commodities before I plunge headlong into new buy-and-hold positions.
    Jul 27, 2015. 05:55 PM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #78 [View instapost]
    Note that bond yields have been falling daily while all the pundits debate the timing of the Fed increase.

    There's a lot of global deflationary pressure out there, right now, and the Fed would be ill advised to raise rates into the wind. Perhaps, that will become more apparent, as time passes, or maybe they'll just ignore what's going on and raise rates, anyhow.

    IMO, FWIW, now is a time to pay much more attention to what's going on fundamentally with global economies and less time examining SPX technicals.
    Jul 27, 2015. 03:20 PM | Likes Like |Link to Comment
  • Don't Ignore The Weakness In Commodities [View article]
    e:

    All depends on what the economy and markets do in coming weeks/months. If energy drags everything into a new deflationary credit fiasco and more signs of global weakening emerge, the Fed will have a hard time justifying a rate increase. If they do it, any, just because they promised they would, when they imagined conditions might be different, then they truly are less than competent.
    Jul 26, 2015. 11:23 AM | 4 Likes Like |Link to Comment
  • Don't Ignore The Weakness In Commodities [View article]
    Get the facts: http://tinyurl.com/5jhm7
    Jul 25, 2015. 02:42 PM | 4 Likes Like |Link to Comment
  • Commodity Prices In Perspective [View article]
    The decline in commodity prices, even a severe decline, given their rapid ascension previously, wouldn't be much of a problem, except for the massive amounts of debt over-enthusiastically contributed to the sector. If the declines, especially in oil, continue unabated, there will be significant roiling of the credit markets, which, in turn, is likely to affect adversely overall markets and the economy.

    http://bit.ly/1Ig8xq6
    Jul 25, 2015. 12:31 PM | 4 Likes Like |Link to Comment
  • Energy, healthcare, BDCs, mREITs underperforming today [View news story]
    k:

    BDC's have been under pressure for over a year, first starting when they were eliminated from various indices, then on rate worries, and now accelerating further to the downside because of credit worries (energy lending fear). As we now see the selling spreading and accelerating in all yield issues, even as deflationary pressures mount, it can only suggest that the market, perhaps very well in advance, has a building fear of widespread creditworthiness issues, because, absent that, yield issues should attract money on market weakness and Treasury strength.

    Either all the angst about the fate of yield payers is unwarranted, or things are going to get really bad, whether anyone yet realizes it or not. It's one of the other.
    Jul 25, 2015. 12:22 PM | 1 Like Like |Link to Comment
  • Don't Ignore The Weakness In Commodities [View article]
    e:

    The rhetoric on rates has been upward for more than a year, now, but no increases. If this oil free-fall doesn't soon find a stable bottom, she won't have to wring her hands or debate with others about what to do because the dollar will be through the sky, and all of the economy, markets and Treasury rates will be in their own decline, making any discussion of a rate increase, much less actually doing it, comical.
    Jul 25, 2015. 12:14 PM | 6 Likes Like |Link to Comment
  • Energy, healthcare, BDCs, mREITs underperforming today [View news story]
    BDC:

    They don't need to see defaults across all sectors. All they need is for recognizable energy names to fail, and they'll get pummeled anew through guilt by association. The near-term future for BDC's is inextricably linked to energy.
    Jul 24, 2015. 09:30 PM | 1 Like Like |Link to Comment
  • Don't Ignore The Weakness In Commodities [View article]
    Nicholas:

    Interesting and thought-provoking article.

    What some seem to overlook --either unintentionally or through wishful thinking -- is that the present situation in commodities/energy is unlike past "cycles" because the betting pool (i.e. debt) is vastly larger, proportionately, than during any previous occasion.

    http://bit.ly/1Ig8xq6

    It's not that commodities, in particular, oil, cannot find a bottom and engage in a gradual uptrend. It's that the consequences of that not occurring are far more dire than in the past. If oil continues to plummet, any other deflationary pressures will be amplified by large-scale credit liquidations that will spill over into the general financial community, not just be limited to peripheral segments, as has occurred, so far. If that ensues, lots of disorderly negative market chaos will follow.

    Whether or not investors should load up on the dollar, Treasury bonds, munis, etc., it's certainly a moment for them to be circumspect about the casual buying of dips, which has worked unfailingly since 2009. Circumstances are clearly different at the present moment. It would be prudent to examine further, and with some patience, where this all goes.
    Jul 24, 2015. 09:27 PM | 5 Likes Like |Link to Comment
  • Energy, healthcare, BDCs, mREITs underperforming today [View news story]
    BDC:

    The problem is that the magnitude of the potential energy credit crisis isn't, as yet, fully appreciated by the general market, which has been behaving, as if it's simply an isolated problem associated with energy firms and some small-cap financiers. BDC's have been pounded for months, first on rate concerns (which, by the way are never going to materialize), then on energy concerns. Now, the credit issues are leaking over into the banking sector as well (see CMA. CFR). If the energy crisis expands, and any recognizable names start to be feared as bankruptcy candidates, the fear in the credit community will expand rapidly, and the general market will be sacked in the process. Should such occur, nobody will be spared, not even already-beleaguered BDC's.

    Any investment in energy firms or BDC's at this juncture is simply a bet that things will not progress that far, but the consequences of being wrong would be quite significant.
    Jul 24, 2015. 07:54 PM | 1 Like Like |Link to Comment
  • Energy, healthcare, BDCs, mREITs underperforming today [View news story]
    BDC:

    Not yet.

    Every kind of financial issue imagined as remotely linked to the energy sector has been pounded. Unless oil reverses, a credit crisis is pending in the energy sector, and BDC's are seen as implicated, whether legitimate or not. Could be even more hell to pay.
    Jul 24, 2015. 05:31 PM | 4 Likes Like |Link to Comment
  • Could U.S. Shale Oil Companies Be The Next Coal Companies In Time? [View article]
    Gold trades like every other commodity until the fear gauge blows up, then, people buy it, as if that's somehow going to make them safer. If the VIX blows up, gold will move higher.
    Jul 24, 2015. 03:13 PM | Likes Like |Link to Comment
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