Commodity Chart Of The Day: Disjointed Market - Where Are The Flows Going? [View article]
@moseslarsen: My two cents, for what it is worth.
MT: Mittal has called for (EU) trade sanctions against China. Perhaps he will succeed, but I never think this is a good strategy to compete in a global market. If China is dumping steel at low prices, there is a reason for that. As for coal: recovery will be slow given debt loads and penalizing regulations. Some may go bankrupt, and there may be consolidation. Coal's economics are certainly there on a cost/MW basis compared to everything else, the problem is that clean coal hasn't gotten traction and the negative sentiment is driving the industry (back) into the ground. Met coal doesn't have many substitutes, differing from thermal coal, but gets lumped in; it follows steel in terms of weakness here. Some of these companies (BTU, TCK) are likely to survive and thrive another day, especially if they diversify. Uranium: have no viz into this one, but once again, negative sentiment and public hysteria play a large role in the suppression of improving and expanding nuclear power generation facilities. France got this one right; everyone else could learn from their system.
Commodity Chart Of The Day: Disjointed Market - Where Are The Flows Going? [View article]
The Rockefeller shoe shine boy story is a good one, even though none of us are anywhere near the level of the legendary JDR.
I prefer trading commodity futures and currencies over stocks and indexes (and minimizing exposure to market risk); the Treasury futures swing trades have been profitable. I think it is key not to convince oneself that we will shoot out of a trading range this time without some confirmation. I'm looking at the 140 level on the 30yr and 130 level on the 10yr Treasury futures as a test.
GMO's 7-year asset allocation model for U.S. stocks (VTI) is now predicting negative returns, says James Montier, presenting at the London Value Conference, and telling the audience GMO is now 50% in cash. Liking Europe (VGK, EZU, FEZ) a year ago, the big run has GMO less excited now. The best value could be emerging markets (EEM, DEM, VWO), but China's property bubble has GMO allocating less to EM than its models suggest. [View news story]
Agreed. He does now have something in common with Bloomberg New Energy Finance, which also staged a media blitz a few weekends ago on similar threads.
More from Tepper: "We're going to get this hyper-drive market," unless the Fed starts tapering its purchases, he says (referencing 1999), adding the June meeting wouldn't be a bad time to get started. He pulls out this chart from a recent FRBNY report, showing stocks remain cheap - the equity premium to bonds is as high as it's been in the last 50 years. [View news story]
AMD (AMD +5.8%) is continuing this spring's take-no-prisoners rally/short-squeeze - shares are now up 83% from their April 18 low. This morning, the chipmaker announced a reference design (powered by its Opteron 6300 server CPUs) for Facebook's modular Open Compute server platform. AMD claims servers based on its design can drastically lower ownership costs for a PC virtualization deployment. [View news story]
4 Scary Charts Warning Of The Next Financial Crisis [View article]
One of your quotes touched on it, but I will reiterate, and have mentioned same in several recent comments elsewhere:
The Japanese will try to hedge their exposures through offsetting carry trades. Whether they will be successful from avoiding unstable conditions or losses, good question. They are used to a much weaker Yen and a carry trade environment, and in their mind, this is a return to normalcy. To make the carry trade work out well, U.S. rates need to rise.
Canadian Dollar: The Loonie Is Grounded [View article]
Canadian assets have been languishing for almost two years. I think there is significant value, but I'd like to see a sell off in these assets even further. The RBA is easing rates, having a significant effect on currency weakening, in addition to the weakness imposed via expectations of slow/slower growth. Will the BduCad do the same? Your strategy is sound, but it requires patience and picking and buying assets over years. The problem today is investors have a trader mindset and want years worth of gains in a month or less.
Interest rate and duration risk are two clear disruptors, and can greatly affect principal risk, as well as impose cost risks across the system. The Fed has not thought these dynamics thoroughly enough, and even so, they are impotent to some extent in mitigating the damage. They are complicit in hardening some of those risks. Gold should not be your only canary, Cam.
Molycorp (MCP): Q1 non-GAAP EPS of -$0.15 beats by $0.12. Revenue of $146.4M beats by $9M. Shares +5.6% AH. (PR) [View news story]
If MCP doesn't have a handle (or at least believable projections) on mining/refining costs, yields and margins, they shouldn't be in that business. That should be their priority, as well as communicating that to their shareholders/investors. Different REEs command different prices, have different demand curves, etc. Show us the goods, MCP. Keeping these issues vague just keeps the stock listed on the exchange and a casino chip trading vehicle. Serious investors want to see the proof.
Bernanke The Washington Super-Whale, Hedge Fundies And The Widowmaker [View article]
The Fed is not an almighty exogenous monetary authority; if it were, QTM/QE/ZIRP would have solved the employment and real growth situation long ago. The system is more complex than that (beyond predictive equilibria), and the Fed is a blunt instrument creating all kinds of potential shock rifts and fissures and, very well I might add, asset price inflation funnels. Perhaps the dear professor profits from some of those funnels.
A better analogy is LTCM, which in its day acted as a central bank to several countries, notably Italy, to modify its yield curve so it would gain entrance into the EU. We all know what happened to LTCM, and how much activity the FRBNY had in its wind down. The question is, who will act in the Fed's wind down when it starts to show enormous losses? To say it makes risk free bets, can print money without penalty...that is just pure nonsense. The FRBNY trading desk has plenty of leverage and breadth to make any number of market moving trades, in and out. Return the Fed to a lender of last resort, away from a rate and market manipulator/schemer.
Aside from the Fed bashing: Treasuries have been nicely tradable. Those of us who have given up the vigilanteisms find trading the instruments (i.e. futures) profitable. No need to go suicidal short (widowmaker) when one can trade the swings. JGBs even had a great swing in the past few months, with significant volatility, and I am sure the Kyle Bass' of the world have profited nicely.
How I Profited From Molycorp's Wild Trading Day [View article]
No doubt MCP is/has been a casino chip trading vehicle (not new). I noted the author has been short MCP and calling for $3-4 range for some time here. To give him the benefit of the doubt, he could have bought calls to offset his losing short puts, but whether it covered all the losses is a question. Quite frankly, MCP has trouble with visibility, so that should be the real focus here.
Would like to see other analysts write about MCP (and other miners) on SA that are not trying to pump one direction or the other.
How I Profited From Molycorp's Wild Trading Day [View article]
I have skimmed through several of your articles on MCP and have not once seen any attention given to MCP's projections for costs and yields at its MP ore processing facility. This is really the bottom line, since MCP is in the REE business to recover demand materials that are price supportive, with decent margins. Granted, the company itself has provided little visibility, and this is a problem given its debt load and cash flow situation, and a likely prospect that it will need to go back to the markets for more debt to cover operations. The latter will certainly be a temporary hit to the share price, as it has in the past. I am not a recent short seller - I sold on the way from $75 to $18 (repeatedly calling for a short at $75 on SA), but at $10 and below I am looking to become a buyer if there is a likelihood of a going concern here. With lack of visibility it is still quite the lottery ticket. (For a string of recent questions I posted, see here: http://seekingalpha.co...)
Molycorp (MCP +35.5%) shares are at the day's high after better-than-expected Q1 results, but at least some analysts remain cautious. Stifel Nicolaus cuts its 2013 earnings forecast on an assumed sales volume decline in part of MCP's business and more conservative pricing. Goldman Sachs shares concerns about pricing until the integration of its chlor-alkali plant later this year. [View news story]
Molycorp (MCP): Q1 non-GAAP EPS of -$0.15 beats by $0.12. Revenue of $146.4M beats by $9M. Shares +5.6% AH. (PR) [View news story]
Thanks for your reply. Are you certain of the geology of MP/area? MCP is also transporting HREEs from other mines to its ore processing facility at MP, or so it had been reported. http://bit.ly/pHmb88
My question on refining costs and yields still stands. I have yet to get answers, and as a potential investor, these are quite relevant. Company visibility on its costs and yields for various REE materials needs to be well understood, not vague, otherwise Twain's comment applies here.
The Japanese will also (try to) hedge their weak currency exposure by offsetting carry trades. This is an environment that they are used to and seek to return. As for everyone else - their weak historical FDI position says it all. This is not new. The sun always rises, and the generations continue to walk Fuji.
Commodity Chart Of The Day: Disjointed Market - Where Are The Flows Going? [View article]
MT: Mittal has called for (EU) trade sanctions against China. Perhaps he will succeed, but I never think this is a good strategy to compete in a global market. If China is dumping steel at low prices, there is a reason for that. As for coal: recovery will be slow given debt loads and penalizing regulations. Some may go bankrupt, and there may be consolidation. Coal's economics are certainly there on a cost/MW basis compared to everything else, the problem is that clean coal hasn't gotten traction and the negative sentiment is driving the industry (back) into the ground. Met coal doesn't have many substitutes, differing from thermal coal, but gets lumped in; it follows steel in terms of weakness here. Some of these companies (BTU, TCK) are likely to survive and thrive another day, especially if they diversify. Uranium: have no viz into this one, but once again, negative sentiment and public hysteria play a large role in the suppression of improving and expanding nuclear power generation facilities. France got this one right; everyone else could learn from their system.
Commodity Chart Of The Day: Disjointed Market - Where Are The Flows Going? [View article]
I prefer trading commodity futures and currencies over stocks and indexes (and minimizing exposure to market risk); the Treasury futures swing trades have been profitable. I think it is key not to convince oneself that we will shoot out of a trading range this time without some confirmation. I'm looking at the 140 level on the 30yr and 130 level on the 10yr Treasury futures as a test.
GMO's 7-year asset allocation model for U.S. stocks (VTI) is now predicting negative returns, says James Montier, presenting at the London Value Conference, and telling the audience GMO is now 50% in cash. Liking Europe (VGK, EZU, FEZ) a year ago, the big run has GMO less excited now. The best value could be emerging markets (EEM, DEM, VWO), but China's property bubble has GMO allocating less to EM than its models suggest. [View news story]
More from Tepper: "We're going to get this hyper-drive market," unless the Fed starts tapering its purchases, he says (referencing 1999), adding the June meeting wouldn't be a bad time to get started. He pulls out this chart from a recent FRBNY report, showing stocks remain cheap - the equity premium to bonds is as high as it's been in the last 50 years. [View news story]
AMD (AMD +5.8%) is continuing this spring's take-no-prisoners rally/short-squeeze - shares are now up 83% from their April 18 low. This morning, the chipmaker announced a reference design (powered by its Opteron 6300 server CPUs) for Facebook's modular Open Compute server platform. AMD claims servers based on its design can drastically lower ownership costs for a PC virtualization deployment. [View news story]
4 Scary Charts Warning Of The Next Financial Crisis [View article]
The Japanese will try to hedge their exposures through offsetting carry trades. Whether they will be successful from avoiding unstable conditions or losses, good question. They are used to a much weaker Yen and a carry trade environment, and in their mind, this is a return to normalcy. To make the carry trade work out well, U.S. rates need to rise.
Canadian Dollar: The Loonie Is Grounded [View article]
The Golden Canary In The Coal Mine [View article]
Molycorp (MCP): Q1 non-GAAP EPS of -$0.15 beats by $0.12. Revenue of $146.4M beats by $9M. Shares +5.6% AH. (PR) [View news story]
Bernanke The Washington Super-Whale, Hedge Fundies And The Widowmaker [View article]
A better analogy is LTCM, which in its day acted as a central bank to several countries, notably Italy, to modify its yield curve so it would gain entrance into the EU. We all know what happened to LTCM, and how much activity the FRBNY had in its wind down. The question is, who will act in the Fed's wind down when it starts to show enormous losses? To say it makes risk free bets, can print money without penalty...that is just pure nonsense. The FRBNY trading desk has plenty of leverage and breadth to make any number of market moving trades, in and out. Return the Fed to a lender of last resort, away from a rate and market manipulator/schemer.
Aside from the Fed bashing: Treasuries have been nicely tradable. Those of us who have given up the vigilanteisms find trading the instruments (i.e. futures) profitable. No need to go suicidal short (widowmaker) when one can trade the swings. JGBs even had a great swing in the past few months, with significant volatility, and I am sure the Kyle Bass' of the world have profited nicely.
How I Profited From Molycorp's Wild Trading Day [View article]
Would like to see other analysts write about MCP (and other miners) on SA that are not trying to pump one direction or the other.
How I Profited From Molycorp's Wild Trading Day [View article]
Molycorp (MCP +35.5%) shares are at the day's high after better-than-expected Q1 results, but at least some analysts remain cautious. Stifel Nicolaus cuts its 2013 earnings forecast on an assumed sales volume decline in part of MCP's business and more conservative pricing. Goldman Sachs shares concerns about pricing until the integration of its chlor-alkali plant later this year. [View news story]
Molycorp (MCP): Q1 non-GAAP EPS of -$0.15 beats by $0.12. Revenue of $146.4M beats by $9M. Shares +5.6% AH. (PR) [View news story]
My question on refining costs and yields still stands. I have yet to get answers, and as a potential investor, these are quite relevant. Company visibility on its costs and yields for various REE materials needs to be well understood, not vague, otherwise Twain's comment applies here.
Japan Implications Not All Rosy [View article]