Ecomike

Global Warming Models: 'Out of Order'?

PBS recently (last 1-2 years?) did a special on "global Dimming".

Atmospheric Research during the 9/11 crisis when air travel was halted for 3 days over the US, combined with earlier data on pan evaporation rates (water evaporation rates from a pan) going back the 1930's (IIRC) that showed the planet was cooling, not warming, were discovered to be caused by airborne pollution (dust, combustion particulates), which have decreased considerably in the US and Europe, and increased considerably over Asia. Long story short, the new theory of atmospheric particulate pollution deflecting solar energy back into space, and thus cooling the planet, seems to counteract the heat build up increase caused by increased CO2 emissions. When both theories and data are used together, you get a combined theory that fits the data. Volcanic activity adding to air pollution, and man made air particulate pollution must be included. The problem is, that with out the high particulate levels of Asia air pollution (which will be reduced now) global warming from CO2 would have been worse than the CO2 global warming models predicted. As we clean up the atmosphere of combustion caused air particulate pollution, CO2 driven warm up will accelerate, unless we have some major repetitive volcanic events at critical times in the near future.

The real concern is still the trigger of non-linear tipping points. Besides, crude is not an unlimited resource, and we should be doing all we can to move to alternative energy options, and conservation, that reduce the risk of a CO2 triggered catastrophe.

The Death of Shipping and BDI Is Premature

NMM is probably the safest play with a huge dividend. I still think PRGN is way undervalued.

A123 vs. BYD and Other Irrational Battery Investments

John, I really enjoy your newsletter. Very informative, brief, concise, and to the point. I was surprised at your comment above about patent law not being your area, I thought IP law was one of your areas?

Please keep up the good work here. Thanks.

Sirius Earnings Preview: The Worst Is Over

Watching the level II trades today, I see what looks like a huge borrowed block 2 stage stock short sale that dropped the price 5% early today, and then a nice strong pull back towards yesterdays close. "Resistance is futile", SIRI is going higher in spite of the huge stock dump attempt to kill the rally this morning!

Q3 Earnings Quality: Expect a Variety of Hits and Misses

I have been bottom fishing this year, and done quite well with EK stock the last 3-4 months.

BDI Signals Slack Demand for Raw Materials

I am not sure but I think you two missed one of my points. I must have seen a hundred or more positions taken lately saying that the BDI is an excellent leading indicator of economic growth, but I think for now there is too much noise going on from new builds hitting the water, dropping the rates, and China buying excess material at low prices, and then cutting way back to live off the excess inventory while prices drop back down, for the BDI to be the world markets pre-indicator anymore. Hell, the last huge run up in CAPex rates, and thus most of the run up in the BDI earlier this year, had a lot more to do with just port congestion in China, and China restocking from their inventories from the September 08 to March 09 crash in imports.

All I am saying is people are reading way too much into the BDI numbers the days. If anything, just look at the recent numbers, and if anything one would conclude it is very volatile.

BDI Signals Slack Demand for Raw Materials

If you remove the Capex from the BDI, as it is mostly indicative of iron ore and coal demand in China, the BDI looks more like a slow steady climb all year which is more indicative of true demand IMHO. China ran up the Capex part of the BDI earlier this year stockpiling, then they shut off the orders when Rio POed the Chinese by doing an investment deal with BP, instead of China. I suspect China artificially pushed the Capex rates up earlier to stimulate the world economy, while stockpiling cheap materials, trading dollars for hard raw materials, and spiking the demand for Capex ships temporarily to slow the Capex ship order cancellation rate in Chinese ship yards, which use steel from coal and iron ore by the way. I am surprised no one has mentioned this in blogs before now. By the way did anyone notice that the Capex nose dived right after Rio cut the deal with BP instead of China? Hmmm! Seems to me the Capex ships were running from Rio to China, and back, and then just suddenly stopped.

Eastern Winds Favor Diana Shipping

PRGN and EXM are way undervalued compared to DSX, and have much better PE values (2:1) right now compared to DSX. ESEA is another great value. DSX has no dividend, and no sign of intentions to renew a dividend any time soon. NMM, NM, PRGN, and ESEA are all paying nice stable dividends, and several have them have much lower PEs, making their upside potentials more attractive.

Current Recession Is Tracking the 1930s Bear Market

The 1930's was more of a price deflation wave, than debt deflation, at least from the government debt point of view.


On May 17 11:16 AM Plan B Economics wrote:

> The last major episode of debt deflation in the US occurred during
> the 1930s. The other major debt deflation of the 20th century occurred
> in Japan starting in 1990. Japan is still trying to climb its way
> out of that one.
>
> Most other recessions in the western world during the 20th century
> were due to central bank tightening, inventory corrections or external
> shocks. Unwinding credit bubbles are very different from plain-vanilla
> recessions.

Current Recession Is Tracking the 1930s Bear Market

Interesting to look at the 2 almost vertical rises of about 100% from the 1932 and 1933 bottoms. We had a gold standard in the 1930's, and a continuation of Republican policy from 1929 to 1932, both are not present this time. I find the comparison between the 18 month long 2001-2003 crash, followed by a 6 month long bull market rise that recaptured most of the prior 18 month loss, and the recent 18 month crash and the current 2 month rise a more interesting comparison.

If we do crash again (which I doubt) I believe we will recover to current levels in a year or less, just like we did in 1932 and 1934, so I am 50% stocks (holding and will not sell, no matter how low we go), and 50% cash ready to pick up more bargains if others are foolish enough to give away cheap stocks again like they did at 666.

The 'Bull or Bear' Debate Will Be Resolved Soon

Great article, great charts, well done.

Are Shippers’ High Dividend Yields Sustainable?

You missed some key research. Many of those shippers you listed, like DSX and DRYS canceled their dividends late last year. Others like NMM, NM, and PRGN are not even listed in your list above. EXM is also missing?

PRGN reduced it's dividend to a reasonable size recently, to $.05/quarter, about 5% yeild of current stock price, and about 13% of earnings. It's PE is still under 2.0 right now and it is way underpriced compared to others like DRYS.

I currently own PRGN & NM, and I sold DRYS and sold EXM some time ago.

Another issue is debt. DSX has virtually no debt, which is the reason it has a higher PE. With no debt it can still make money at shipping rates roughly 1/2 those needed by DRYS or EXM due to their debt loads and P & I payment costs that affect profits and cash flow.

DSX is raising cash from stock sales in preparation to buy cheap, distressed ship assets at any fire sales while the recession continues, not to pay dividends as you insinuated, as they canceled their dividend to save cash according to their SEC filings, once again to buy cheap fire sale auctioned ships as their competitors with too much debt sink into oblivion.

Slippery Slope: Dry Bulk Shipping Contracts Begin to Default

WOW EGLE went up 50% today, and the BDI was down on a CAPE size rate drop due to the floods in Australia's mine operations halting ore delivery to the port. Article said it might last a week before shipments to the port resume, then recover. Meantime they would need to use panamax ships to bring in ore from Brazil I think. In the mean time we had nice, did I say NICE, rally in the markets here today! Hope you weren't caught short today!

Slippery Slope: Dry Bulk Shipping Contracts Begin to Default

It sure looks likes these bear authors have an agenda, mainly to sink stock prices for major short traders by scaring weak knee investors as options expire. Curious that this news was so timely as options expire! Not to worry, I just bought more shipping stocks as this kind of yellow journalism sinks their prices while options expire.

I expect a surprise rally next week. SURPRISE!

I am long, and trading the ups and downs on EXM, PRGN right now.

The Dollar Gains on Fed Minutes, Obama’s Mortgage Plan

Well it has inspired this investor.

What I find humerus about these attacks on Democratic policy, is the Republicans do the same thing, it's just called corporate welfare when they do it.

Oh yea, The Sky is Falling, find cover!