JR Ewing

Are We Becoming a Nation of Renters? Investing for the New Housing Dynamic

I have never seen some many people I know on the brink of losing everything or already there. I have one friend and one relative in law living with me because they can make enough to pay rent and would be on the street. A guy that works for me has two jobs and after child support, and health insurance and taxes can't pay his rent, student loans and car payment and will be moving in with girl friend of a month or be on the street.

Bottom line is it has become to expensive to live in the US. Wages are not keeping up with the cost of living. Medical costs of insurance and prescriptions are out of line with incomes. We need either wage inflation that won't come with the large pool of unemployed and lack of manufacturing that is not coming back. The alternative in cost of living deflation that the government is dead set on stopping.

The middle class is dead.

Thursday Outlook: Commodities, Global Markets

I might be missing a zero but I come up with 285,120,000,000 in gold 8100 tons at 1100 per oz. that is 285 billion not much to get excited about.


On Nov 05 07:20 AM Dr. O wrote:

> >>The Fed just green-lighted a continued fall in the dollar and rise
> in commodity prices, and worse, they don’t seem to care.<<
>
> A crazy thought. The US (a financial basket case, granted), still
> is the largest known holder of gold in the world (about 8100 tons).
> I know, some think the gold is no longer "there" (conspiracy theorists).
>
>
> Sooooo, who makes the most money if the price of gold goes up? The
> USA, or, whoever controls that 8100 tons of gold. Even at current
> prices, its only a few trillion dollars, but, its something.
>
> And, unlike oil, and other stuff we need, rising gold prices don't
> hurt anyone, except brides in India. The rest of you can use Palladium,
> lol.

Crops Headed for a Tough Harvest

I am not a farmer but where I live in southern Ohio all the soy beans are still in the field, weather has been cool and rainy. How long can they stay out there?


On Nov 04 01:28 PM concrete guy wrote:

> Adding to the farmers woes is the dramatic rise in the cost of inputs
> (seed, fertilizer, etc) that occurred in 2009. In our neck of the
> woods (Central Illinois), $4.00 bu corn and $8.00 bu. beans are break
> even price points with normal crop yeilds.

Bond Expert: Tuesday Wrap

Do you think we will see the TBT back down to 43 before we see 50? I am still looking for the tell on treasuries, it does not seem to matter market up/down, gold up/down, dollar up/down, new good/bad. I am long TBT leaps I bought the 41 JAN 11 for 10 and sold the 60 JAN 11 for 5. I got hit good shorting Puts in OCT. I am short puts again but they are the DEC 46's and the 42's with protection. I would like to catch the top here and buy them back and resell to reuse my protection. I am thinking that that top will come at 12:59 tomorrow buy the rumor sell the news what says you?

Fantasy Housing Numbers a Prelude to the Next U.S. Crash

A common misperception is that the ARM's will go down. Having been in many of tis teaser loans myself that is not how it works. A home owner gets say 4.25% two year loan guaranteed to reset to 6.5% plus the current Libor rate (currently 1.85% but generally 3 plus). That take the home owner to about 8.35% to 10% depending on rates. The owner was told not to worry, in two years that we can move you to a fixed 6.0%rate loan but we can get you into this house now instead of later.

So now that $1600 mortgage is $3200 and people can't refi at any rate due to banks not lending to fringe people on these loans, they can't get a loan mod unless they stop paying their mortgage and even then banks don't want to do them, so they wait until they get foreclosed on and are saving that $1600 per month, running up credit cards, stashing cash, filing for bankruptcy, extending the foreclosure time to years, while the banks are hording their cash to hold the reserves on all of these non performing assets.

People aren't stupid, they are playing the game as are the banks. No one wants to take the loss, the government is prolonging the day hoping it can stimulate or inflate prices to an amount that will hide the losses on the balance sheets.


On Oct 25 12:17 PM ResidentAlien wrote:

> I get unemployment situation is different, however are not interest
> rates lower and therefore these adjustable mortgages will reset to
> a lower payment - thereby slowing the default rate, as they require
> less income from the homeowner?
> Sorry about first post being cut short.

Tuesday Outlook: Commodities, Global Markets

What tell should we be looking for on the TBT or is it just going to be a hostage to FED policy, how long can they keep rates down?

If we get a W recession can rates really go any lower?

How much value does the TBT lose since it is a double ETF, how long can some one be long on this waiting, is there a formula or is this one a little different than other double short ETF's?

Thanks to anyone that can help.

Currently Long TBT calls and short TBT puts.

Tuesday Outlook: Commodities, Global Markets

Can anyone tell me why the TBT is getting crushed? It went down when market was going up and down. I can't find a cause except that the the S&P must be way out of bounds and will crash hard in the next few weeks and the TBT is the tell.

Paul Volcker: The Voice in the Wilderness

Does anyone see what is keeping Treasuries down, besides manipulation. How long can they hold rates down?

Absurd Inverse and Leveraged ETF Product Whining (Updated)

The SDS has saved me more than a few times, as a put seller being able to hedge quick make money on the way down and make it on the way back up has been key in this range bound market. And using the USO to short oil with its quirky contango issues in the first week on the month is big too. It cost a lot to learn these lessons - Thank you to all the Seeking Alpha writers and contributors who shine light and education on complex issues like these. Thanks Dave for all of the time that you put in week in and week out.

Could Investors Be Wrong (Again) About Treasury Bonds (TLT)?

Iggy I am no bond expert but you can't get a 10 -20 percent return at these levels, you missed that boat. That boat has a hole in it now and you will be lucky not to lose money to higher yields or inflation.

On Jun 23 01:38 PM igggy wrote:

> >The U.S government’s annual deficit of nearly $1.5 trillion is 10%
> of its GDP, a number never approached since the 1930s Depression.
> Who is going to buy all of this debt?
>
> When the stock market appears too risky and money market accounts
> yield 0.5%, people start buying Treasury bonds. They may not buy
> 30 or 10-year treasuries at first but that might be just a matter
> of time. The yields are fairly attractive.
>
> In fact, I have recently seen an article on SA saying that treasury
> holdings among US investors have gone up recently. People have to
> put their money somewhere and the new oil bubble can only last so
> long. I myself put some money into a Vanguard long bond fund expecting
> 10-20% appreciation by the end of the year.

Thursday Options Recap

Hi Fred,

Since you brought up VMC above. What do you make of what looks like a huge PUT premium spread to the calls. The stock has not traded in the low 30's since 2003, the NOV 30 is 1.25 - $15 out of the money.

60 Buy Write ETF Option Strategies

You are playing with fire, some of these ETF's are broken and on a big move your winners are capped and your losers can wipe out your small premiums. I am all for covered calls on stocks you want to own and don't mind selling but not all etf's are equal.

If It Looks Like a Bull, Walks Like a Bull, Acts Like a Bull…

What I see according to the charts from the author and the comments is that either way the market is getting to roll over. In order for it to be a Bull Market we need a higher low (drop to 800?). In order for it to be a Bear Market rally we need to retest the low of 666 and fail. So that tells me that with the lower volume and the resistance here, and the lack of fundamentals changing and oil topping the market is looking for a trigger to roll over.

But I think until we get that committed roll over you have to play both sides and even thought the open and close don't show it there is a lot of action during the day.

So either way we are due for a correction. I like the option play here with the Vix lower the SDS for June and July is cheap. I have been trading the June 49's and taking a dollar a day in just market fluxuations between open and close. Wait a 15 minutes for the futures to be absorbed then go short SP make a dollar take a dollar and make a dollar, more if you stagger them at higher levels you can make more just don't get to greedy.

Long SDS calls
Long USO puts
Long DBA
Long TBT
Short BAC puts july 12
Short NAT puts june
Short BUCY puts june

The Coming Economic Collapse, Part 3

Could it be part of the master plan to bring manufacturing back to the US. Like so many the US has bought everything on credit and will soon default but they have something the people don't have, that is a printing press in the basement. The US will inflate their was out of this and make it so expensive to not manufacture here that Chine will begin moving plants here as they build out their social systems and things there get more expensive to make as they had health care and increase wages and then add to that the yuan increases 10 fold verses the dollar making them level with the cost of goods made here. China is short one thing and is making a play to fix that, raw commodities. They are making deals all over the world while the dollars they hold are worth something to lock in pricing through ownership. (like the European Companies that bought up our steel companies, they say they are losing money and can't pay our workers more, because they sell it to themselves at a loss).

Bottom line: US will survive but you might want to make moving plans for a long vacation and take your assets with you or buy the commodities long term that you can sell off to supplement your income and offset the loss in dollar value. The ETF's TBT, DBA, GLD and I like the SDS (short x2 - SP500 as a hedge to trade in and out of if we get a wave of deflation that would kill commodities short term, some currencies Brazil and Australia look good - the oil ETF's seem broken to me so I would play the countries that have oil for the oil play. Still waiting for the next correction to move from half long/half short to all commodities and currencies as the US might play games with the dollar till then.

The Agriculture Re-Boom Is Coming

The DBA is not going to get outlawed, anymore than the USO did last year. You still have to have sellers of futures to right contracts.


On May 26 05:44 AM User 305589 wrote:

> Interesting article, Andrew, but unfortunately, you stop where it
> starts getting interesting. You present the bullish case for Ag-commodities
> but imho you do not think the idea through in earnest.
>
> Sadly, if a really big shortage were to occur, it could create a
> very tough and painful situation. If really big shortages develop
> (or it becomes clear that they inevitably will occur) then you will
> see a rush to vehicles like DBA. Since DBA invests directly in ag-futures,
> this could lead to additional (speculator) demand worsening an already
> dire situation. I fully expect that the govt will ban and outlaw
> DBA sooner rather than later in this case.
> What they can't outlaw as easily are the agricultural futures themselves
> - though in an emergency they may prohibit retail and institutional
> speculators from opening new positions in crops.
>
> Then what? fertilizer stocks or farming equipment will certainly
> get a good uplift - but when there is a drought or a flood, all fertilizers
> and caterpillar machinery in the world won't save your crops. And
> you can only extract so much additional output with ever increasing
> quantities of fertilizers. (Which, btw, already are way too much
> in use. The quantities of our food are high, but the quality, from
> a nutritional and biological point of view keeps declining rapidly.
> And no, genetic manipulations are not part of the solution, but creates
> a lot of new and related problems)
>
> Farmland has its own host of problems. Ask anyone in Alberta or Sasketchewan.
> Pure farmland investments are not the easy road to riches. many who
> thought otherwise, have learnt a very costly lesson over the years.
> And farmland in Argentine looks cheap, but carries a boatload opf
> political risks.
> perhaps you could elaborate more on your views of how to invest here
> - and not just present the bullish background story. But I guess,
> Andrew, the meat will only be available to your subscribers (what
> I respect) and your articles here are just teasers to sell your newsletter
> (wat I don't endorse)