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867046

867046
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  • Treasury prices plunge (yields fly higher) following the big rally in Europe and the NFP report. The future is unknown, but a buyer of the 10-year Treasury at 1.5% requires an unceasing stream of bad news to make money, while being open to getting fried on just the slightest bit of economic sunlight. SPY pulls far ahead of TLT in YTD returns.  [View news story]
    Potential tradable events:

    1) USAF and USN joint training exercise later this year i.e. potential Iranian interdiction: TLT++, SPY-

    2) Market run up into Xmas, SPY+, TLT-

    3) North Korea announces opening to west SPY+, TLT-

    4) US election: TLT?, SPY?

    5) Spike upwards in jobs numbers in Sep-Oct timeframe TLT-, SPY+

    6) Housing continues to improve, TLT-, SPY+

    Overall SPY bulls have more upside.
    Aug 3, 2012. 12:40 PM | 2 Likes Like |Link to Comment
  • July Nonfarm Payrolls: +163K vs. consensus +100K, prior +64K (revised from 80K). Unemployment rate 8.3% vs. consensus 8.2%, 8.2% previous.  [View news story]
    TT,

    If you look at the recent years numbers, there have been spike(s) up around the October time frame.
    Aug 3, 2012. 11:08 AM | Likes Like |Link to Comment
  • July Nonfarm Payrolls: +163K vs. consensus +100K, prior +64K (revised from 80K). Unemployment rate 8.3% vs. consensus 8.2%, 8.2% previous.  [View news story]
    Question:

    Is this the prelude to the end of year market run up into Xmas?
    Aug 3, 2012. 10:59 AM | 1 Like Like |Link to Comment
  • Why Investors Should Own Lockheed Martin [View article]
    I would think that any review of LMT would include the status of the largest military procurement, the F-35 program which is way behind schedule and way overbudget. Furthermore the ultimate unit cost of the F-35 is dependent on foreign military sales, which at this point are not completely firm.
    Jul 30, 2012. 09:20 AM | 1 Like Like |Link to Comment
  • As corn prices explode in the face of the worst drought in over a half century, ethanol, once touted as the homegrown, eco-friendly replacement for foreign oil, is fast becoming the new product everyone loves to hate. The fact is however, we've come to rely on the corn-based fuel's high octane level as a boost to the sub-grade gasoline currently being churned out of our nation's refineries. The crisis leaves us with two tough choices: higher gas prices, or higher food prices.  [View news story]
    "The USDA also administers three re-export programs involving sugar. The USDA’s Sugar-Containing Products Re-Export Program is designed to put U.S. manufacturers of sugar-containing products on a level playing field in the world market. The Refined Sugar Re-Export Program is designed to facilitate the use of domestic refining capacity to export refined sugar into the world market. The Sugar for the Production of Polyhydric Alcohol Program is established to provide world priced sugar to U.S. manufacturers of polyhydric alcohols"

    Ironically, rare mention is made in congress of our sugar subsidy.
    Jul 28, 2012. 03:14 PM | Likes Like |Link to Comment
  • As corn prices explode in the face of the worst drought in over a half century, ethanol, once touted as the homegrown, eco-friendly replacement for foreign oil, is fast becoming the new product everyone loves to hate. The fact is however, we've come to rely on the corn-based fuel's high octane level as a boost to the sub-grade gasoline currently being churned out of our nation's refineries. The crisis leaves us with two tough choices: higher gas prices, or higher food prices.  [View news story]
    The irony in your remark is that "fuel system additives" containing ethanol are sold at auto parts stores to purge the fuel delivery system of water which can be corrosive. So some ethanol is good in order to keep free water chemically passivated.
    Jul 28, 2012. 03:08 PM | 1 Like Like |Link to Comment
  • As corn prices explode in the face of the worst drought in over a half century, ethanol, once touted as the homegrown, eco-friendly replacement for foreign oil, is fast becoming the new product everyone loves to hate. The fact is however, we've come to rely on the corn-based fuel's high octane level as a boost to the sub-grade gasoline currently being churned out of our nation's refineries. The crisis leaves us with two tough choices: higher gas prices, or higher food prices.  [View news story]
    Bear,

    Your argument is not based in fact. The reality is that the eco crowd has almost no political pull in congress but conversely the farm lobby is very strong. Since corn is primarily grown in the red states, ethanol production is really a red state agricultural subsidy and is seen as a jobs program in that the fermentation facilities also happen to be co-located in red states.

    The ultimate irony in the corn/ethanol debate points to the fact that farming in the US is probably the most "socialist" business activity in the US thanks to conservative republicans and democrats.

    As you can see below from the Billings Gazette, farmers in the reddest of states want an ever continuing federal handout:

    "July 23, 2012 5:45 am • By Tom Lutey

    With the largest drought in a half century chewing up farm acres, the call for federal assistance is growing.

    Montana farm groups are calling on Congress to renew emergency loss programs that expired last September. Forage losses to drought and fire, as well as lost crop revenue are hitting southern Montana farms and ranches hard.

    “A significant portion of Montana is in pretty rough shape, the south and southeast,” said Ryan McCormick, Montana Grain Growers vice president.

    Four disaster programs that expired last September should be revived to help drought-affected farms and ranches, McCormick said. For farmers, the big one is the Supplemental Revenue Assistance Program. Also known as SURE, the program covers crop and livestock losses that crop insurance doesn’t cover. It was created in 2008 as part of the farm bill, but expired a year ahead of other farm bill provisions, which end in two months...."
    Jul 28, 2012. 02:56 PM | 1 Like Like |Link to Comment
  • China's Cnooc (CEO) expresses confidence that it will receive approval for its record-breaking $15.1B offer to buy Canada's Nexen (NXY). But not if Sen. Chuck Schumer has anything to say about it; he wants Tim Geithner to use the deal as leverage to pry open the Chinese market for U.S. companies: "It's about time we played a little hardball."  [View news story]
    What is wrong with using all the levers that are available to open up markets?
    Jul 27, 2012. 10:58 AM | Likes Like |Link to Comment
  • More on Facebook's Q2: Monthly active users (MAUs) were 955M at end of June, +6% Q/Q and +29% Y/Y. Mobile MAUs were 543M, +11% Q/Q and +67% Y/Y. Ad revenue +14% Q/Q and +28% Y/Y (was 37% in Q1), 84% of total. Payments revenue +3% Q/Q (no Y/Y data), indicating a major slowdown. Capex +213% Y/Y to $413M. Operating cash flow of $129M, -47%. R&D and sales/marketing expenses up significantly. FB reverses course, now -8.7%. ZNGA -4.6%. (PR; call transcript)  [View news story]


    There will be some price point say 3$ - 5$, where GOOG will pick up FB.
    Jul 27, 2012. 07:08 AM | Likes Like |Link to Comment
  • Initial Jobless Claims: 353K vs. 380K consensus (prior week revised to 388K from 386K).  [View news story]
    Consonant with OM's observation is the recent news that Amazon wants to build a highly automated wherehouse employing lots of materials handling robots.
    Jul 26, 2012. 12:32 PM | 1 Like Like |Link to Comment
  • The government of British Columbia says it will not support construction of Enbridge's (ENB) Northern Gateway project unless it receives a bigger slice of ~C$81B in overall tax revenue the pipeline expects to generate in its first 30 years of operation. The demands would apply to any company hoping to build heavy oil pipelines through B.C., including KMP’s plan to expand its Trans Mountain pipeline.  [View news story]
    The situation is a little more complex if one had read the article:

    1) You forget that governments reflect the will of their people. What if the majority of BC'ers don't want the pipeline? So what about "states" rights?

    2) If anyone had read the article there is a concern about setting aside enough money to make sure that the taxpayer is not on the hook for any spills.

    So I would say with BC exercising their state rights and protecting the taxpayer, they are exercising the proper conservative attitude.
    Jul 24, 2012. 03:11 AM | 2 Likes Like |Link to Comment
  • Individuals and their families have squirreled away $21-32T of financial assets in offshore tax havens, a study conducted for pressure group Tax Justice Network shows. That represents up to $280B in lost global income tax.  [View news story]
    Junker,

    So on one hand we are supposed to worship money and on the other hand we are supposed to worship Jesus.
    Jul 22, 2012. 04:01 PM | 5 Likes Like |Link to Comment
  • Individuals and their families have squirreled away $21-32T of financial assets in offshore tax havens, a study conducted for pressure group Tax Justice Network shows. That represents up to $280B in lost global income tax.  [View news story]
    Madav,

    I will attempt make the issues clear even to one with the meanest intelligence.

    For a potential leader of the federal government, offshore bank accounts are completely unacceptable:

    1) Anyone with a security clearance above secret would not be clearable. All the agencies with top secret clearances would not allow off shore bank accounts: CIA, FBI, NSA, DIA etc etc.

    2) Anyone working on anything nuclear with a DOE Q clearance would not be clearable.

    3) Anyone within the federal government who makes source selection or similar decisions (i.e. people who evaluate and award contracts) could not have offshore bank accounts.

    A little closer to home:

    4) Would biotech investors want the FDA folks who make drug decisions to be allowed to have offshore accounts?

    5) Would investors in general want our lame SEC enforcement folks to have offshore accounts?

    And yes, Obama is clearable at the top secret level because his drug use is way in the past.

    My standards are higher than yours and not having offshore accounts is about leadership. It's ok for Wen Jiabao and Putin to have offshore bank accounts, it's not ok for the President of the United States.
    Jul 22, 2012. 09:59 AM | 44 Likes Like |Link to Comment
  • Mitek Systems Sues USAA for Defamation and Unfair Business Practices [View article]
    Whether you suit has merit or not, taking USAA to court is a bad move. Settle and move on.
    Jul 19, 2012. 10:57 AM | Likes Like |Link to Comment
  • Entrepreneurs and business owners take note, President Obama says: "If you've got a business - you didn't build that. Somebody else made that happen." The comment, made at a speech the President gave at an appearance in Roanoke, Virginia recently, has gone viral, with the internet swamped with images of the President telling innovators such as the Wright Brothers, Thomas Edison, Steve Jobs and others "they didn't build that." Kevin Costner's famous line in "Field of Dreams," parodies Obama: "If you build it... we'll still say you didn't really build it."  [View news story]
    Obama comment is perfectly valid when you look at the big picture.

    1) The point is that there is a supportive cultural and economic infrastructure increases the probability for more and a wider variety of businesses.

    2) When you look at ancient civilizations, in the short term the ones with good infrastructure were able to do more. If you compare the Romans versus the English at around 100 AD. The Romans had a vibrant economy for their time, indoor plumbing and some sort of reasonable life for even the worse off. Whereas the English were savages who painted their bodies with colored dirt.

    3) In our country, no one is going to locate a modern semiconductor fab in Louisiana or Moantana. There simply isn't the educational and technical resources to accomplish this plus the required supply chain and the support contractors are too far away. If you look at it deeper, there are more semiconductor fabs in the "socialist" countries of Europe then there are in the US red states.

    4) Obama fully aware of what it takes to build a vibrant economy because I'm sure he studies the classified CIA reports on Russia. Publicly Russia is a basket case. Russia's biggest problem is demographic.
    Putin has been personally spear heading several manufacturing initiatives which have turned out to be failures. He has been trying to jump start a Russian aviation industry, but the with the unfortunate crash in Indonesia and the rise of Brazil in the small airliner league it's tough. Putin is also trying to build up a vibrant middle class, but when you have an oligarchy basically calling the shots it's tough.

    5) The other great thing about the US is the rule of law and the fact that you don't have to lay on the bribes at the city, county and local level for the most part.

    6) One other unappreciated thing is that we have very strong federal law enforcement agencies. Just look at our neighbor Mexico.

    Finally, people who whine about the US economy, the business climate, laws, so called socialism are clueless. If you look at the top 30 countries by GDP, in some way or another you will find that in the aggregate, the taxes are higher, gun laws are much stricter and business regulation is worse. A government to run a great country like the US costs money. If you don't like it, leave. Guys like Marc Faber left and now lives in Thailand. You can be sure that he has to support an entourage plus rain money down on the local authorities in order to live in the comfort he is use to.
    Jul 18, 2012. 05:20 PM | Likes Like |Link to Comment
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