Delojozafado

Mortgage Resets: One Shoe Dropping

Well, this weeks Treasury auctions are the miller that tells the tale! 71 billion floated out in a week. The 30 year basically down sharply BEFORE Thursday's auction and then collapsing in the Auction. The bid ratio was a paltry 2.1. The Ten year was then of course beaten down as well to a 3.35 yield in sympathy. The Treasury is going to be floating out over a $135 billion in 30 year notes alone this year. After yesterday the only hope for the Treasury bonds is that we get a substantial correction in the stock market over the Summer months. That would not save the "Q" polluted 20 & 30 year bonds but would at least bring the ten year and lesser maturities back up in price as investors flee to their relative safety.
The Game is over with the "Q" easing. Look at the price action in international (NOT international US based) oils like BP,STO,RDS/B and the ETF ENY (Canada) since the Fed meeting in March. Look at the price action in oil itself. UT ..OHH we are heading for +$60 with in a week? The price of Nat gas has vaulted through $4 as well making a huge percentage move in just days. Silver backed off some after smashing through $14, but the gold, silver and platinum are moving ahead again this morning. If gold breaks out of the $865- $920 trading range to the upside then the US Treasury,Fed and Long Term bond holders in general are going to have the hurtin' put on them.
What all this MEANS??? Is that the sub 5% /30 year mortgage rate is about to become a missed window of opportunity for the would-be buyers awaiting lower housing prices. The lower prices are coming no doubt but will the actual cost of ownership be going down? Not likely as taxes, utilities, and insurance as well as mortgage loads increase against the known expectation for inflation in what is now perceived by most to be in the mid term NOT long term out look.
There is still some disinflation afoot as evidenced by the telecom action this week as well as the sanguine attitude towards this weeks unemployment numbers as a derivative somehow being a positive. All of this is going to ultimately weigh on wages and pension benefits to those employed in the public sector. More disinflation pressure I suppose. In all the euphoria over the Stress tests underwriting the major banks no one seems to pay any attention to the Treasury's & fed's stipulation that the expectation going forward is for an additional 700 Billion in write downs still on their way for these banks. Sure they will now be expected to survive it but at what cost? Anyone like the TMV,TBT, or SRS?

What's Next for Gold and the Dollar?

In a democracy it is not nice to fool all of the people some of the times. The right sold America on their ability to manage their own wealth and life savings in Roths, IRAs and 401-K defined contribution pensions. It was a solution . It was the closest thing to Marx's Utopian idea of the proletariat owning the the means of production.
Then as with Major Tom something went wrong. The Fed Chairman said not to worry "well contained". The New Century CEO retired 4 months before it was revealed that there were irregularities in the financials. The "Dumya" went on a spending spree on a War on weapons of mass deception and the creation of the Medicare prescription drug program. Taxes to pay for any of it ? Then we found out CIT & Washington Mutual & their ilk were shopping around their debt ratings. It turned out the ratings agencies were getting paid for their debt ratings. Uht oh! Finally we were told we had to spend a couple trillion dollars to bail out the likes of BOA so they could pay out bonuses in the millions to Merill Lynch employees who had made lots of money for a failed firm. They performed well so they were not to be punished by the failure of the firm.

In a Democracy it is not nice to pizz off the plebe cite. What we have now is the back lash of the American people voting themselves some of the largess. Indeed the whole mid-term election will swing on whether the S&P can get back to a 1250 range and stay there for a while. The bitter health care debate is not going to matter when voters go to the polls in 13 months. Instead it will be what they see inside those envelopes that they receive in July . Voters are now starting to open those quarterly 401-K and IRA statements and they are feeling more sanguine. A 1250 S&P means they will see loses in their investment portfolios instead of a total annihilation of lifetime savings.

The massive liquidity flood must continue on for that to happen. Americans are now intent on voting themselves largess. They are intent on extracting some thing more from the wealthy and the filthy rich. What they perceive now as a class of people who prospered at the expense of their life savings and children's college funds.

The people want what they want. They don't care about or even need to understand about asset inflation. The seniors with CD's did not lose their savings? But they are losing their ability to support themselves on 1.7% CD rates. They embrace the hope of a '70- 80s inflation and 17% CD rates. No one is going to be sold on the idea that the defined contribution retirement plan is going to replace Social Security anymore. We still find state legislatures defining usury as being 39%. Again if you allow the creditors to amass giant un-collectable balances there are going to continue to be failures.

The right in America failed miserably in their leadership when they had the people. The average guy on the street does not care about M-2, the value of the Yen, what some bureaucrat in China says, or what is going on with precious metals. His or Her perception is based on whether they think they are going to get a "Fair Deal" from the leadership of the country. For them Rush is as entertaining as Sienfeld. Very entertaining for less than ten minutes. For them it is now about more reality and less O'Rielly.

Speculators Return to Commodities, Aussie and Canadian Dollar

While I am bullish & long on the Loonie, there are some constant defeats in the short term. We have the CEO of the Royal Bank of Canada (RY) Nixon, recently telling Harper to pound sand. RY does not intend to expand into the global market by buying the assets of any US banks or banks themselves in the south of the border land of the US Pe$o. RY it seems is concerned with operating in a manner consistent with what's in the best interest of their shareholders.

We find Bloomberg reporting yesterday (Gregg Quinn) that the BOC governor Carney with the support of Harper, " is likely to say policy makers are ready to buy commercial paper and other corporate debt to spur the economy, and create new money to pay for it"

It seems as of late Mr Harper now feeling immune from the political opposition sees a weaker Loonie as a solution. He is encouraging Canada to join the race to the bottom in devaluing currency. He should lay off the IW Harper.

Not withstanding we saw a strong rally in the pointy billed bird yesterday on the oil price spike. Oil is up/down marginally again today and the Loonie seems heading for .814/1.228 sometime next week. It may indeed weaken on weaker gold against the Kiwi and Aussie, but should still strengthen even further against the US Pe$o. It may be somewhat noteworthy to note the action in the (TBT). The TBT seems to like the near $43 handle as support. It keeps rallying back above $45. There is a conundrum in long term treasury rates rising and the US Pe$o falling. While gold is now trying to find support at $900 silver continues to move higher against what some believe are some huge short interest positions.

In the end as oil goes so will go the Loonie. The US imports nearly 60% of their oil while continuing down the road to the kind of "Q" easing that could only occur in the modern era where printing presses are no longer necessary to create fiat currencies. A few strokes of the keyboard and a few hundred billion Pe$os out of thin air and few million electrons spinning in the wires. Eventually the dollar will weaken against a virtual basket of commodities bench mark. LNG cargoes being dumped on the North American markets will return to their Asian markets and other places like energy poor/resource rich Chile. When gas prices recover oil prices will be biased higher as well.

The less complex way to play the strengthening Loonie is to buy the Canadian shars/units with yield. best results will most likely be garnered in energy/commodity themes. Some of those are (BIRDF), an O&G centric infrastructure construction company (trust),(ATPWF) and (GLHIF), carbon and non-carbon utilities, the (ENY) 70%Canroy /30% Oil sands, and (KYE) with ~12% Canroy exposure. (RY) is another good yielder (+/-7%) and one of North America's 10 strongest banks. The move in the currency of Canada higher will provide a corresponding % increase in dividend distributions. Share prices for the most part will appreciate in line as well.

Chinese Are Likely to Halt Purchases of U.S. Treasury Debt

"When you ain't got nothin', you got nothin' to lose, you're invisible"..to the people who think like you. Time to turnoff the telly. You have had enough Rush and O'Reilly, whereas the invisible HAD way too much of them. Welcome to the era of less O'Reilly and more reality! Hold on to your truthism it is all you have gathered from this coincidence!!! Whatever RUSH and O'Reilly tell you, you know in your heart is right. It is immoral to wise up a chump! The average Joe? $135,000 and up in median household income? That's about average, right?


On Mar 13 10:23 AM johnthebears wrote:

>
> I am so sorry to say that I feel like I am living in Russia, a socialist
> communist country.
>
> We now have one party government and a dictator president that sees
> himself as the Messiah!
>
> Our country is now a bankrupt nation of poor people, already losing
> $11 TRILLION DOLLARS OF REAL WEALTH, MORE THAN THE VALUE OF JAPAN
> AND PERPHAPS GERMANY, that we may never recover, since investment
> banks can no longer create money at 40:1 to be bought by fools all
> over the world.
>
> This thing is global, and all nations are poorer now as well as America.
>
>
> It may take a couple of years before the average Joe to grasp the
> significance of what he has been voting for... the Democratic Socialist
> Republic of America, but truly Oboman's mentor, Rev. Wright's forecast
> has come to be...
>
> THE CHICKENS HAVE COME HOME TO ROOST AND I BLAME DEMOCRAT LIBERALS
> AND STUPID LIBERAL REPUBLICANS.
>
> THEY ALL SHOULD BE TAKEN OUT AND SHOT!
>
> WE MAY BE ON THE VERGE OF ANOTHER CIVIL WAR.
>
> I am sorry that I must sound so pessimistic on this Friday the 13th,
> but that is my true feeling of where we stand today in America.

Treasurys Are Getting Crushed

We are reminded of a scene from the film "War & Peace". A young panic stricken army officer rushes into the court of the Czar. He describes Napoleon burning and destroying everything in a 200 mile corridor across Russia. The commanding General of the Russian Army inquires, "They are burning and destroying 'EVERYTHING'?". The officer responds "Yes General everything, you must send the army against Napoleon immediately, to stop it ". The General then replies in a countenance as if not thoroughly understanding, "Stop it?" "Yes General we must stop it!" replies the messenger. To which the General then replies. "NO! not stop it!, Let it continue!, Let it increase!"
It is clear that short term bonds are only nearly safe. But only if hedged with the TBT,AGQ,DGP & PTM. Now a platinium ETF is nearing it's initial launch. In Dec when the author reported "Treasuries are in a bubble", silver was less than $9 an ounce. Now it is backing off the recent high of $13. We see the Loonie the currency of a commodity centric economy breaking through .84/1.19 as if it were an advancing army. Up from .78/1.28 in 6 weeks. Interestingly the Loonie has made a very strong move in a few days, after the BOC and their Financial Minister Mr Carney disavowed "Q" easing for Canada last week. (for now). If you blinked you missed the correction in copper this past week and see it up another 4 cents a pound again this morning. The Chinese have a huge advantage in terms of geographical land mass. They have thousands of acres to stock pile copper, aluminum and other base metals ingots. They are increasing their gold reserves. No one sees the wisdom of the "Meatloaf"s "Two out of three ain't bad", as relates to the obscure Treasury "TIC" report. hey, 4 out of 5 ain't bad if they had been positive. Then there are the rumblings about an "AMERO"? We can take advantage buy doing a 40/40/10/10 in a SHY/CIU/LQD&WIA/TIP respectively and buy hedges in TBT when it breaks below $45, which have been very fleeting opportunities, and shares of the precious metals funds on pull backs. The party of Limbaugh and O'Reilly forgot what their greatest party member once preached. Government of the people, by the people ,and for the people... We are now left with the backlash of one of the worst 8 year administrations in modern times. The ability of the people to vote themselves largess is now overwhelming the voices of sanity. It is even more important to get re-elected than to look good,promote commerce, provide for the public safety, and to effect any prospect for prosperity for our posterity. WE however will take care of ourselves no matter who ends up paying. WE the people understand that Ronald Reagan fixed our country while knowing that when the bill
came due he would be dead. This then is the evolution of the tyranny of the old. The boomers know that in the end they will bankrupt the system, but then after all they have paid more into it than any generation before them. Somebody owes them. They may not all be dead when it blows up but they will be too old or senile to care about it. By then they will have sucked out most of what they paid in.

Tipping Point for U.S. Treasuries, From China's Perspective

Now we see the bloggers catching on to the gangsterocracy. The author uses the euphemism I have used for some time now "electronically" created money. This is I believe the first time I have seen this finally acknowledged as a far more dangerous trend than the conventional printing press creation of money. A few hundred billion of TALFs, TARPs, TRCAs here and there and pretty soon you are NOT talking about real money. The author makes no remarks on the Treasury "TIC" reports of the last 5 months. Hey, 4 out of 5 ain't bad, if you like seeing the US Pe$o becoming mystery MEATLOAF. So now "electronically" is widely acknowledged, can a reference or discussion of the "AMERO" be the on deck batter. Silver shoots reflecting the illumination of Paradise by the Dashboard Light?

How to Invest in Cellulosic Ethanol

This is a very decent article. One of interest that was not mentioned was Dyadic DYAI.PK. They seem to have of late established some superior relative shere price strength to VRNM. DYAI is a smaller cap ~$13MM vs the capitalization of VRNM near~ $65MM in capitalization. The Verenium management is mostly an arrogant rapacious predatory group. After adjourning yesterday's annual meeting they have yet to release any memos or information on what was discussed or how the vote went on a couple management sponsored resolutions that will potentially create shareholder dilution. There was a vote on a reverse stock split that would go 1:10 or 1:20. This would allow the company to issue further subsequent debt issuances with out breaking the long term $1 share price to remain listed and not be kicked over to the pinks & then the bulletin board. This would have been OK as the company's operating revenue does not meet current operating expenditures. Except for the second proposal that was a more egregious rapacious plundering of the shareholder equity and current cash flow/burn. This was a stock option swap scam. There would be no need for a stock option swap of worthless options for new option instruments that will further dilute shareholders if the directors and management had succeeded in maintaining and enhancing the share price. Mr Rivas the CEO already receives more than $700K in annual compensation. Most senior members of the board are in the +$400K range of compensation. They did not see fit to exempt themselves from eligibility for this theft of shareholder equity. This is the same scam as the Merrill Lynch/BOA bonus fiasco! in this case rather than TARP money, the VRNM board is anticipating the Gov't windfalls of a Gov't guaranteed loan/ loan /or grant under the DOE alternative energy sponsorship program. This again might have been not so bad if VRNM had enough operating income to meet or even nearly meet current expenses. It is one thing to give such incentives to some of the more than 300 rank and file employees but to perpetrate this kind of theft from shareholders to benefit senior management is unconscionable. It is plainly theft of shareholder equity at best. At worst it is likely if it passed and they still more than a day later won't reveal that, likely to trigger a class action shareholder law suit that is going to create even more negative cash flow to the operating cash burn of VRNM.

Be careful of this one. It has legs against the Gov't funding/assistance forthcoming but the traders and insiders are likely to leave you high and dry if you think you can make a total position, an all in all out Long term holding.

A couple larger caps also of note here are the Dutch conglomerate RDSMY.PK and ADM or more specifically the ADM-A mand cnvt of 5/11 with it's 8.25% yield. While ADM has it's 20% of its business model in mostly corn based ethanol, they have put expansion mansion designs into their newer facilities to accommodate a morphing into the accommodating of larger quantities of biomass for a transition over to a cellulosic process, most likely under a license from a VRNM,DYAI,BFRE etc There is a very excellent website "thecesite.com" that has about 80 different companies listed to explore this whole cellulosic ethanol theme.

A Bear in Bull's Clothing: We're Not Buying This Rally

I have been selling this rally! So sad to have just seen my position in CHK-PrD go away on Friday at $64.87. My entire ENY gone, 1/2 at $13.87 and the rest at $13.30. BCF gone at $6.84 and $7.08. FXI stopped out at $28.11. KYE 25% of the position gone in the pre ex div frenzy @$15.09. I await some add'l strength in stocks to pile into some SRS, and perhaps some DGP& AGQ. This will just be one more really ugly, "Sell in May and go away", prlude to more very dismal market performances in July and Sept. Real unemployment counting the "underemployed" who must actually be counted is over 15%. 50 million people world wide have lost jobs. Madame Death is out this morning with more on the global banking fiasco. Together world banks have written down their total loan portfolios to 98 cents on the dollar so far.... So far accounting for and writing down only about 1.75 trillion of the known $4 trillion in bad debt . The Autos and their suppliers are currently being thrown under the bus. The consumer credit fiasco has just begun to assert itself. After all auto sales are backed with the lost job take back covenant where will the returned vehicles go? Banks won't lend to consumers for the old reasons. No job is safe in this economy. The commercial real estate market is also imploding with the General Growth and Centro type Mall operators dying on the vine even as unemployment runs out and the apartment REITs will get hit next. Meanwhile the office property Reits are just hanging on, for now. Oil has already rebounded from $33 already 60% off it's bottom and OPEC determined to defend $40.
All the base metals have gone higher as well. The US dollar is becoming akin to a sole', peso, or zloty. Any commodity/energy centric theme with yield will perform as nicely as they have performed since the Oct, Nov and Feb lows in the next "bear market rally" off the retest of recent lows that will no doubt be seen in July or Sept. In the mean time those that are left in hand against trimming will continue to pay their distributions and rebound nicely after you have had a chance to add on weaknes to your positions.

Corporate Bonds Haven’t Been This Cheap Since 1932

I had 70% of my pension buyout invested in an "investment grade" corporate bond ladder. One issue has already defaulted while three others have lost +35% of their valuations. That leaves the rest of the portfolio of "relatively safe" bonds down by 12%. As these bonds continue to mature I am moving out of corporate bonds and over to the preferred/converts of commodity producers like ADM-PRA, FCXPRM and CHKPRD. I am also buying Master limited partnership funds like KYE, MTP and BSR.
The TIP fund WIA appeals to me when after they just cut the dividend the price drops back, to once again yield +6%. Quantitative easing and Temporary Reciprocal currency agreements (TRCAs) are just the New Speak of a brave new world heading down the road to hyper inflation. How does rolling over these TRCAs every 60 to 90 days make them temporary? The TRCA is a geat example of Quantitative easing going on world wide. "They say" this means they are printing money. In reality there is a much more dangerous thing going on. Money is being created electronically at a 10,000 times faster rate than any printing presses could ever hope to achieve. Investment grade Corporate bonds have proven only marginally safer than stocks so far. Inflation will destroy what safety is left of that safety margin. These investment grade bonds should be selling at a huge premium to par given where treasury rates have gone! There are closed end funds of global blue chip stocks like BDJ,EXG,IGD,FAV, and LGI that make bonds look pathetic at this point with yields from 11 to 23%. Then there are the RCC and BEP that while closed end and also selling at HUGE! discounts to NAV have date specific dissolution dates when the assets will be liquidated at NAV and distributed to shareholders. Of course you have risk with return of capital, likely dividend reductions coming, and even the overall averages exceeding the 10/10 lows. With LGI you can even get an emerging markets currency exposure. When legitimate ratings agencies emerge and corporate bond rates stabilize in line with real risk for inflation and credit risk a return to bond laddering will at some point be a sabrient strategy once again. In the meantime it would seem wise to start working towards at least a 10% position in DGP any time gold slides below $800. I would also recommend investing in Canadian and Australian utility shares. Even the AECPRC is starting to look attractive for it's international (currency) footprint.

Natural Gas: The Next Big Thing

Global production continues to increase. Third world entities are now liquefying rather than flaring most of the gas by products of oil production. The world fleet of LNG carriers continues to swell as vessels contracted for when gas was pushing $16/MM`BTU are delivered. At some point in a correction of this commodities led rally in the markets Nat Gas should bottom. The markets are even now reacting to the green shoots theories as being rather too sanguine. Nat gas may be the value of a life time right now, but after this market meltdown I would rather live twice! Look at the 52 week low for CHK! Ouch if you get in here and there is a retrace and test in the market of the March lows! I am awaiting a dip and then may tip toe in.

A Good Thing: Agribusiness Future Isn't Golden

For what ever it is worth just lately Dennis Gartman has turned neutral to bearish on gold, calling it grossly over valued against O&G (IRR) & (IGE) and the Grains (DAG) & (MOO). The ADM is mentioned in the author's remarks. Now that one is very interesting. ADM reports 3rd quarter numbers early in this coming week. Reporting on the heels of DOW's just reporting excellent results last week as a result of the AGs in their business model being strongly accretive. The last time ADM, BG and POT reported they had less than great numbers to publish. What is so particularly interesting about ADM ???? is the huge out sized move the ADM-PA took on Friday, up 5.7% in the one day. Most of that move came in the last 20 minutes of trading. Now we all know it is an even playing field out there and no smoke plumes ever arise from these companies before they report, leaking any inside info. But even so a rather large move in those preferred shares none the less. So someone is buying in a ramp up while others are moving aside to surrender shares. 49 cents would not be too bad but 54 or 55 cents would move ADM, me thinks.

Trading Platinum and Palladium Ahead of the ETF Launch

Well this is all very interesting. Up until now I have refrained from buying the (LPLA.L), due to the additional brokerage fees involved. I have found the buying (AGQ) & (DGP) in partial positions actually works as it does for (TBT). Now we are warned by the pros that trading these double and triple leveraged funds are only for day traders because each time they turn in direction a great deal of equity is eaten up. After the last Fed meeting we saw the same spike in (TBT) we saw today. Some thing very dangerous is either going on with the basis for the US currency or the principle at risk in (TBT). So far if you have owned (TBT) since it was below $40 and added recently on dips below $43.50 you are looking pretty good. So far. Any way I just added another partial to my (PTM) position on Tuesday as platinum was knocked down hard. I managed to get those shares at $13.38. Not exactly at the bottom but a nice guess based on the action in the shares the previous day. Now (PTM) rallied back some today. I would not have to own this kind of stuff except that 65% of my portfolio is in investment grade corporate bonds. Now 90% of those are medium term out to '13 & a couple 15s. There is that 10% that is long term and so beaten down that I am just enjoying the decent coupons. I will have to follow this development of a platinum ETF if it gets legs. In the meantime I may just call my broker on any further "corrections" in the platinum price and pick up a couple partials of 400 and 300 of the (LPLA.L). The divergence between Platinum and Gold is still at a relatively bullish historical gap.

Then there are the rumblings about what Jethro Bodine once referred to as "some new kindah dollars". Back in his day he was surprised to find out about millions of dollars. That was when one of the Hunt Bros remarked on their losses in cornering the silver market. A billion here and a billion there and pretty soon you're talking about some real money. Now it is a Trillion here and a Trillion there etc..

The point at last, is now we hear of this thing called an "AMERO" ? An obscure bureaucrat in China grumbles and the (TLT) tumbles...What eventually happens when a great deal of the distressed debt finally defaults, the unemployment bennies run out from the jobs in the autos and their suppliers have yet to eliminate? Who will buy the ghost malls from Simon and Prologis as they morph into Ganeral & and Centro Properties? Paulson & Ben the Dollar Slayer said they envisioned the Frannie Mac s being preserved in their current structures. OOPs, like WHOOPs they then turned around and screwed the subordinated debt holders the preferred share holders. Based on the Baird driving Wachovia to less than a $ before the market came awake from that concussion and realized it was worth seven and BEN advising 2 years ago that the subprime mortgage slime creep was relatively well contained, how are we to believe this latest man behind the curtain act of stress testing banks. Now we actually see Timmy the "G" making his bones on the "Q". The only shoots that are credible at this stage are the Gold ,silver and platinum ones. Green shoots? Not even the money is entirely green these days. But then that is only the case in which the money is actually printed and not electronically created. This situation in the early phases so far makes the Wiemar Republic look like pikers.

Some ATM's are already featuring $50 bills as an option. It all creeps in this petty pace from day to day. The tale is told by a presumed idiot. Yet the (TBT) was a horse of a different color again on Wednesday as many took a peak behind the curtain and the ten year treasury "advanced" to over 3%. IF an (LQD) can manage a decent gain on a day when the Treasury's debt is being knocked back by a similar % then what happens to (LQD) if the S&P breaks through 750 when "they" sell in May and go away? The yield goes to 8%? Even as the share price keeps dropping?

Join the Rentier Class with MLPs

The author's discussion of (KYE) focuses on MLPs. Why not examine then the benefits of KYE against (KYN)? KYN is almost exclusively MLPs. KYE is a buy alright if at any discount which is not that often. It is also ~14% invested in Canadian "Can-roys". Beginning in 2 years the tax structure is scheduled to change on these investments. That is worth some discussion. That situation is open to possibly changing or being postponed. Also currently the Loonie has been struggling, recently dipping below .77 briefly. As oil goes so will go the Loonie. Some technicians have predicted as low as .65. Other market based observers believe the .82 region is more likely by year end. Personally I look for "aboot" .90 within one year as the currency of the worlds best managed economy with the worlds strongest banking system wins out in the end. More than 10% of the KYE portfolio is then leveraged to the Loonie posing currency risk.

I prefer KYE to the KYN because the usual premium to both is generally higher for KYN. Another positive is the diversification away from MLPs only which should provide some better capital appreciation going forward. Another positive is the manager Kayne Anderson is a narrowly energy focused manager. Energy is what they do with only 3(?) CEFs. In the last quarter KYE released a statement indicating that there was a minimum dividend distribution target for 2009. They claimed they had enough cash and cash flow to meet this goal. Any dividend cut would possibly send these shares back below net asset value and drive back the yield to +12%.

Some other related ideas to the authors blog might be (ENY) 100% levered to the Loonie and currently 70% O&G Canroys and 30% oil sands. Very beaten down and not necessarily a steady dividend payer. The MLP CEF (MTP), which is almost always selling at a discount and pays out monthly instead of the quarterly KYE distribution. MTP has a small percentage of non-oil related "blue chips" (?) for some diversity. (BSR) is an ETN, no tax break on distributions as they are counted as interest but a pure play like KYN without the steeper premium to NAV. The (BGR) is an energy CEF that is overweight the coal sector. Especially the met (Appalacian) coal used in steel production. There is the (IRR) another closed ender that is composed of the major integrated "big oils". Lastly there is the as of late volatile (REP-PA). Repsol is the Spanish oil company headquartered in the Cayman Islands or the Bahammas? This preferred of a $13 billion capitalization company recently traded above $20 to below $17 against it's $25 par value. This was certainly a dramatic discount given this issuance traded so cheaply against it's ex dividend date which was just this last Friday. It was gaining again on Friday. Any post ex swoon in REP-PA may offer an opportunity back down below $18? This issue is a "non-Cumulative" so the dividend may be ????

Most of these equities are trading in a $4-$5 range as the market and the oil price seem to be trading in a range as well. ENY below $8 is a buy & a sell above $11. KYE a buy below $11.50 should be lightened up on above $14. BSR a buy at below $21.75 again should be lightened at +$25.50. MTP buying post the ex date generally around $8.80 and lightened up on in the near $11 area. BGR same thing buying near $13 & selling near $17. By purchasing partial positions and then unloading partial positions in the rallies you can build up your share base while taking some capital gains. Shares that do not hit their sell targets collect dividends.

BP Sees Cash Flow Balance at $50-$60 Oil for 2009

Well here it is Tuesday morning 3/10 and the futures are showing the market rallying? We have seen this scenario before as we keep anticipating some kind of bottom in if not the overall market at least some sector(s)? We are encouraged by the author's remarks on the oil futures. We see also a nice bounce this morning already in the commodity centric economy currency of Canada. The Loonie has just been crushed and some technicians have postulated on this pennant formation nonsense that the Loonie will go to 1.53/.65. It seems that if oil can lead out towards$60/BBL, then Nat gas which is in a huge international surplus may be able to rally back above $4/MM~BTU. Copper has already reasserted a decent rally off it's low. Iron ore has done the same although not as sharply. We must next see Appalachian coking (Met) coal also put in some kind of a rally as well.
I am not doing so well in my (BP) position being down more than 4 points off my cost basis. While BP continues to look good the REP-PA looks to be the most grossly undervalued international oil issuance of them all! It is clear from the reaction to this week's $63 Billion Treasury auctions coupled with another $1 billion in FDIC corporates being floated out by (GE) and (BAC), that something has to give. The TBT is playing chicken with the FED as to whether the Fed will step in to buy these longer term treasuries to support the prices and keep yields low. If the Fed does step up it is going to be the top in the very near term for the US dollar. It may be that it will end up being commodities that will then be the sector that leads the market averages off the bottom. It is not just the US stimulus but the world wide stimulus that is going to at some point stabilize and improve the markets for commodities. I am very keen on the IRR closed end fund. I may be missing the VLCC but just cannot put more cash into these markets until some time passes since my last purchases of this last week. Another currency hedged oil that I just added to and is also grossly undervalued is the (ENY). 100% leverage to the Loonie.

Ontario Green Energy Act: What Can Alt Energy Legislation Do for Investors?

Sandy Koulfax was an accomplished lefty.....

The GLHIF/GHH-UN.TO is a huge opportunity to get some fabulous returns . Bruce Flatt's (BAM) recent investment through a BDF coupled with the overall weakness in the stock markets have depressed this fabulous utility trust's price to ridiculous new lows not seen in years. Adding to this unit's price weakness is the on going 1st quarter weak Hydrology/Hydrometry. Now we see this situation developing which is basically related to the carbon credits economic incentive trend. While of a different nature the thrust is the same. To economically advantage through development & tax policy "Green" energy. On top of all these issues that have created this buying opportunity we now see the Loonie teeter totting back and forth over the .80 mark.

GLHIF has just reported a record for production in the past 2008 year end results. Record production led to Record Gross and net revenues. With the 1st quarter hydrology coming to an end and the addition of $65MM/CD in new generating Wind and hydro capacity, it is very likely we are going to see some more strong production results going forward through the remainder of 2009. There will be lesser and less dominate High pressure weather in the hydro electric generating topography of GLHIF over the next 3 quarters. We are going to see the end of snow in conjunction with the melting of snow pack, adding to production.

An increase in the distribution is a lot more likely than any reduction in the near term. With yesterday's ex date knocking the unit price down another 12-15 cents a share we are seeing an opportunity to invest in this great income trust well below the Flatt entry of pre-dilution $16/unit in last Dec's BDF. The price is way down but the distribution is strong and sustainable! We currently see an 8.3%/7.0% effective distribution rate for both tax sheltered and non-tax sheltered accounts. With a non-tax sheltered investment the difference as a result of the Canadian with holding can be recovered with a foreign tax credit.

We have Mark Zandi, Moody's Chief economist calling Canada, "The best managed economy on earth". This was reiterated this morning on the Bloomberg web site in a story on Canada having the world's strongest banking system. Further we have Mr Dennis Gartman 4 weeks ago declaring himself "long of all things Canadian".

A move by Canada's commodity centric economy's currency back to 50% of the recent 52 week high would take these shares and more significantly the distributions 12% higher from todays valuations. That would be a 7.8% effective distribution yield! The shares recovering 50% of their 52 week high would be reasonably expected to rise to 18.5 Canadian dollars from the current $15.10.

Time to Buy!!!!!