Saturday, December 31, 2011
Be Scared....Be Very Scared
HONG KONG — A man in southern China died of bird flu on Saturday, the state news media reported, in the country’s first reported human death attributed to the virus in 18 months.
The death came about a week after two dead birds tested positive for the H5N1 avian influenza virus in nearby Hong Kong, causing the government to cull thousands of birds.
Saturday’s victim, a 39-year-old bus driver, died from multiple organ failure at a hospital in the city of Shenzhen in Guangdong Province, according to the Xinhua news agency, citing the local Health Department. The department said that the man began developing symptoms on Dec. 21 and was hospitalized last Sunday with pneumonia; he subsequently tested positive for the virus.
Reuters, citing the newspaper The Southern Daily, reported that 120 people who had had contact with the man had developed no signs of sickness. In the month before developing symptoms, the man appeared to have had no direct contact with poultry and had not traveled outside Shenzhen, a city of more than 10 million just north of Hong Kong.
http://www.nytimes.com/2012/01/01/world/asia/china-says-man-dies-from-bird-flu.html?_r=1
Dr. Copper Is Speaking Again...Are You Listening?
Back in January 2011, I pointed out that copper prices had in recent years started to track very closely with whatever the stock market was doing. But the key point about that relationship then was that when disagreements appear, it is usually copper that knows what the real story is.
That relationship continues to work to this day, with the two price plots mostly doing the same things, but with divergences usually working out the way that copper says that they should. By that I mean that if the SP500 makes a higher high but copper makes a lower high, that is a bearish divergence with bearish implications for both of them.
It is worth noting that there was a big "oops!" back in July 2011, when copper prices made a higher high as the SP500 made a lower high. In that instance, it turned out that the stock market was right, but copper worked extra hard in the weeks that followed to make up for lost time and to plunge to a lower value. Nothing works all the time.
The higher high for the SP500 going into the end of the year has not yet been matched by a higher high in spot copper prices, and that is a troubling development. But the problem with converting this observation into an actionable and tradable signal is that we never know exactly when such a divergence is actually going to start to matter. Sometimes it happens after just a few days of divergent behavior. Other times, the divergence persists over several weeks before it finally matters.
One other worry is a phenomenon I just shared with readers of our Daily Edition, which is the realization that a lot of currencies seem to undergo reversals around New Year's Day. The end of 2011 arrives with commercial currency futures traders holding a huge net short position against the dollar. Commercial euro futures traders have the biggest net long position in the euro in the entire 12 year history of the reporting of euro futures positions in the Commitment of Traders (COT) Report. Commercial traders are also long the Swiss franc in a big way. Analysis of COT data is something that is featured every Friday in our Daily Edition.
So what this all means is that we have a situation where an upward move for the euro (downward for the dollar) is likely because of what the COT data say, and because of the year end reversal tendency. A big drop in the dollar would be bullish for copper prices, because a cheaper dollar would mean that you would need more dollars to buy a pound of copper. So a potential big currency reversal could push copper prices upward, removing this current divergence between copper prices and the SP500. Accordingly, this relationship will bear watching closely as we move into 2012.
Friday, December 30, 2011
Try This Flyboy
There Are Only 8 Pilots In The World That Are Qualified To Fly To This Airport
When building an airport, it is always a good idea to place it in a wide, flat area that is free of obstructions and easy to access.
Or in between two 18,000 foot mountains in the Himalayas. Whichever.
Paro Airport in Bhutan might look beautiful, but is actually considered one of the most dangerous airports in the world, according to The Daily Mail.
Pilots need to maneuver between mountains, fly within feet of houses, and land on a narrow, 6,500 foot runway. Planes are only allowed to take off and land during the day, since any flying at night has been deemed far too dangerous.
Strong winds can whip down from the mountains and easily send a plane off course. Because of the danger, only eight pilots in the world are qualified to fly in and out. And they transport a lot of people.
As there is only one other airstrip in Bhutan, about 30,000 people come through Paro Airport each year.
Read more: http://www.businessinsider.com/there-are-only-8-pilots-in-the-world-that-are-qualified-to-fly-to-this-airport-2011-12#ixzz1i1bVSypD
UNG....Stay Short
October was another record-setting month for the world's largest natural gas producer, as the U.S. produced all-time record amounts of both gross withdrawals and dry production (consumer-grade gas), according to new data released today by the Energy Information Administration (see chart above). The record-setting gross volume in October (2.48 trillion cubic feet) was above its year-earlier level by 6.4%; and the all-time high for monthly dry gas production was 7.6% above last October, and surpassed two trillion cubic feet for the first month ever.
Over the last five years as unconventional shale gas has become increasingly more available due to advanced extraction techniques (fracking and horizontal drilling), gross withdrawals of natural gas have increased by one-third and dry gas has increased by more than 42%. Welcome to America's new age of energy abundance with enough natural gas to last well into the 22nd century.
http://mjperry.blogspot.com/2011/12/october-natural-gas-production-sets-new.html
Thursday, December 29, 2011
Platinum/Gold Ratio
As we mentioned in our prior post, precious metals have been in free fall lately. And while gold has fallen more than 18% from its all-time high reached in August, platinum has gotten hit even harder.
The collapse in platinum is highlighted in the chart below which shows the long-term ratio of platinum to gold. When the line is rising, platinum is outperforming gold. When the line is falling, gold is outperforming platinum.
Even though gold has been plummeting lately, the ratio of platinum to gold has been plummeting as well, which means platinum has been underperforming gold. This underperformance has pushed the platinum/gold ratio to its lowest level since at least 1986 when our platinum price data begins. As shown below, the ratio is currently at 0.89, which means platinum is currently 11% cheaper than gold. Rarely is gold pricier than platinum, but that has been the case now for a couple of months.
Wednesday, December 28, 2011
Finally! A Right Decision By Our Gov't
The United States has ended a 30-year tax subsidy for corn-based ethanol that cost taxpayers $6 billion annually, and ended a tariff on imported Brazilian ethanol.
Congress adjourned for the year on Friday, failing to extend the tax break that's drawn a wide variety of critics on Capitol Hill, including Sens. Tom Coburn, R-Okla., and Dianne Feinstein, D-Calif. Critics also have included environmentalists, frozen food producers, ranchers and others.
The policies have helped shift millions of tons of corn from feedlots, dinner tables and other products into gas tanks.
Environmental group Friends of the Earth praised the move.
"The end of this giant subsidy for dirty corn ethanol is a win for taxpayers, the environment and people struggling to put food on their tables," biofuels policy campaigner Michal Rosenoer said Friday. . . .
http://www.detroitnews.com/article/20111224/AUTO01/112240320/1148/rss25
Keep This Chart In Mind for 2012
Nothing captures better the angst of the macro swan of the east than a long-term chart of the Shanghai Composite. Our friends at The Chart Store do a great job charting anything and everything and have not disappointed on this one.
This Shanghai looks hopeless with the October 2008 low seeming to be the magnet as to where the index is moving. Unless, of course, we see a policy response — i.e., monetary easing — from the government that will send the shorts reaching for the you know you what. Tough to sell a less than transparent market that is down 31 percent in the past year.
Nevertheless, China is the blind side swan that could really sack the markets, including commodities, in 2012, in our opinion. Keep it on your radar.
Tuesday, December 27, 2011
Reason One Why You Don't Need A Money Manager
Because they are no better at it than you! Look at Bruce Berkowitz. I remember hearing how great he was, now look at his portfolio....Got whacked! You can do better yourself...Here is the key have a small number of names in your portfolio and watch them closely...You bought them for a story or some micro or macro purpose...until those change do not get sidetracked...Stick to the plan!
http://www.bespokeinvest.com/thinkbig/2011/12/27/the-dirty-dozen-fairholme-funds-12-largest-holdings.html
http://www.bespokeinvest.com/thinkbig/2011/12/27/the-dirty-dozen-fairholme-funds-12-largest-holdings.html
US is in sharp decline
"This chart from Arvind Subramanian's new book, 'Eclipse: Living in the Shadow of China's Economic Dominance,' is interesting in three respects. First, it tracks broadly the economic dominance of the previous two superpowers, the United States and Great Britain. Second, it suggests today that China has come close to matching the United States in terms of dominance. Third, it suggests that under conservative assumption about economic growth for China and the United States, by 2030 the world may well see a G-1, with China as the economic hegemon." -- Steven R. Weisman, editorial director, Peterson Institute for International Economics
http://www.theatlantic.com/business/archive/2011/12/the-most-important-graphs-of-2011/250240/
Divergence
...the chart helps to tell the story of two different sides of an economy in recovery: we've seen huge gains in productivity and a recovery in output, but at the same time we see a labor market struggling to recover, with the possibility that it will take many more years or even a decade to regain all of the millions of jobs lost during the recession...
Monday, December 26, 2011
Sunday, December 25, 2011
Saturday, December 24, 2011
Best Trades for 2012 - Winner Gets Bottle of Lotion!
Please Add Your Comments and Prognostications in Comment Section...
Short China -FCHI (ETF)
Long Gold - Through miners (GDX)
Friday, December 23, 2011
From ZH....Best Quote I have seen in long time
“It is no coincidence that the century of total war coincided with the century of central banking.”
Man I Feel Cheated...They Didn't Teach Me This in School
Barbaric textbooks handed out in Saudi Arabian schools teach children how to cut off a thief's hands and feet under Sharia law, it has emerged.
The shocking books, paid for and printed by the Saudi government, also tell teenagers that Jews need to be exterminated and homosexuals should be 'put to death'.
Recent editions were obtained by the Institute for Gulf Affairs in Washington, D.C., which says they should raise fears in the West over the use of jihadist language.
The books were published and handed out to 9th and 10th-graders despite Saudi Arabia's promises to clean up textbooks in the kingdom.
Ali Al-Ahmed, director of the Institute for Gulf Affairs, told Fox News: 'This is where terrorism starts, in the education system. . . .
Read more: http://www.dailymail.co.uk/news/article-2077658/The-Arabic-textbooks-children-chop-hands-feet-Sharia-law.html#ixzz1hMEtckkj
Thursday, December 22, 2011
Wednesday, December 21, 2011
GO NAVY!!!!
A Navy tradition caught up with the repeal of the U.S. military's 'don't ask, don't tell' rule when two women sailors became the first to share the coveted home-coming 'first kiss' on the pier.
Petty Officer 2nd Class Marissa Gaeta of California, descended from the USS Oak Hill after 80 days at sea and shared a kiss in the rain with her partner, Petty Officer 3rd Class Citlalic Snell of Los Angeles.
The crowd screamed and waved flags around the couple as they shared the short embrace, with Gaeta, 23, wearing her Navy dress uniform while Snell, 22, wore a black leather jacket and blue jeans.
Read more: http://www.dailymail.co.uk/news/article-2077283/Lesbian-couple-share-Navys-traditional-homecoming-kiss-U-S-ship-returns.html#ixzz1hDTJTYyJ
Really?
Attention cocaine users of the world: Parents everywhere would like you to know thatchanging tables are generally covered in baby poop, and we’d appreciate it if you’d think of that the next time you’re looking for a place to snort a line.
According to an informal study out of the United Kingdom, 92 percent of the more than 100 public changing tables were coated with trace amounts of cocaine. The testing was conducted by Real Radio journalists who used specialist wipes on the tables and then had them tested in a lab as part of a series to be broadcast this week called Cocaine Unwrapped.
According to the Telegraph, the UK has been named the cocaine capital of the world. The radio special talks to many cocaine addicts, some of them also parents, about how the addiction has affected their lives.
Cocaine of course can be found in trace amounts on many surfaces, most notably money. Parents would be wise to use a changing pad anytime they change a baby’s diaper in public.
The fact remains, though, that changing tables, or anywhere else for that matter, is really a bad place to do cocaine.
Twas The Night Before....
‘Twas 5 days before Christmas, when all through the house, No investor was long, not even their spouse.
The stocks were all shorted by the big old bad bear,
In hopes that St Nicholas would soon not be there.
The stocks were all shorted by the big old bad bear,
In hopes that St Nicholas would soon not be there.
The traders were certain the ‘Claus rally was dead,
With visions of profits as stocks turned all red.
And Obama was sweating, as the S&P seemed capped,
The first post-war Prez to see his third year stocks zapped.
With visions of profits as stocks turned all red.
And Obama was sweating, as the S&P seemed capped,
The first post-war Prez to see his third year stocks zapped.
When out of Europa there arose such a clatter,
Spanish T-bills sprang forth to make the shorts scatter.
Away through the 50-day it flew like a flash,
Tore open the shorts and took all their cash. . . .
Spanish T-bills sprang forth to make the shorts scatter.
Away through the 50-day it flew like a flash,
Tore open the shorts and took all their cash. . . .
Tuesday, December 20, 2011
Monday, December 19, 2011
Sounds Cool...But Somethings I Would Like To Forget About
New drug could give us all awesome super memory
Scientists have identified a gene in the brains of mice, that when turned on, give them super memories. And considering that mice brains and people brains are basically made of the same stuff, it could be possible to switch on this molecule in people, giving us tremendous super memory. But do you really want to remember everything?
Baylor University researchers discovered that a molecule called PKR serves two crucial function in the brains of mice. In everyday situations, it’s concerned with regulating how neurons interact in memory-related tasks. But when a virus invades, PRK activates a stress response that alerts the rest of the brain that something is very wrong. Alzheimer’s sufferers also experience PKR-releasing stress in the course of their disease.
Lead researcher Mauro Costa-Mattioli and his team worked with mice that had had the PKR molecule genetically suppressed. In its absence, another immune molecule known as gamma interferon steps in, and that’s when something remarkable happens. It turns out this understudy molecule is actually way better at its job than PKR, increasing communication between neurons and just generally making the memory centers of the brain more efficient.
The team realized that if they could find an inhibitor that could specifically block the PKR molecule, they could confer that same memory-boosting benefit without having to worry about genetic engineering. By injecting various potential inhibitors into the mice’s stomachs, they were able to find the right molecule. Even better, since that inhibitor blocked PKR from the stomach, that should mean it’s possible to create an ingestible drug that blocks PKR.
When the researchers tested the PKR-deficient mice in a series of memory tests, those mice were able to pick up on patterns and remember them on the first try, while the other mice needed days to figure out how to solve the puzzle. The PKR-deficient mice consistently showed significantly better memory and learning abilities than their counterparts.
Of course, there’s a pretty crucial question here - is it safe to remove a key immune molecule like PKR? Well, so far, the PKR-deficient mice have shown no ill health, as other immune molecules appear more than capable to fill in for its various functions. While it’s certainly possible that there’s still a downside here, the researchers haven’t found it yet.
Right now, this could be used to treat Alzheimer’s, or just to make you remember and keep grudges for years and years.
http://www.iheartchaos.com/post/14441759265/new-drug-could-give-us-all-awesome-super-memory
Sunday, December 18, 2011
Venezuela? WTF!
Above we highlight the year to date performance of the major equity market indices for 78 countries. The average country on the list is now down 14.15% year to date. This makes the S&P 500's year to date decline of 3.02% look pretty impressive. The US is currently the 13th best performing country on the list.
The UK ranks second out of the G7 countries with a YTD decline of 8.69%. Italy has been the worst performing G7 country in 2011 with a decline of 27.76%.
Brazil is the best performing BRIC country with a decline of 18.69%. India is the worst at -24.47%.
Venezuela currently ranks at the top of the list with a YTD gain of 79.24%, but keep in mind that the country's annual inflation is up 27%. Pakistan ranks second with a gain of 31.93%, followed by Jamaica in third at 11.37%. Greece is unsurprisingly the worst performing country year to date with a decline of 53.61%.
This Is The Path of Gold
As a matter of fact I’m pretty confident that if the dollar turns down it is going to trigger the beginning of the third and final, bubble phase, in the gold bull market.
The public is already starting to become aware of the gold bull. All we need at this point to start the flood is for gold to recover quickly from this selloff. If gold quickly shoots back up and tags, or penetrates that big psychological $2000 number I expect it will be the siren call that draws the public into the bull market. And it is the public coming into a market that triggers the bubble phase.
During this phase of the bull I expect we will see the normal ABCD wave pattern break down as gold starts to accelerate into what will almost certainly be the most incredible parabolic advance, maybe in history. By the fall of 2014 I expect we will see gold somewhere between $7,000 and $20,000 an ounce.
Bonds Historically
For some perspective on all-important long-term interest rates, today’s chart illustrates the 112-year trend of the 10-year Treasury bond yield (thick blue line). As concerns over government debt as well as a struggling global economy have increased and fears over inflation diminished, investors have moved towards safety resulting in a significant decline of the 10-year Treasury bond yield.
The 10-year yield has declined a fairly dramatic 300+ basis points (i.e. 3%) since the peak of the credit bubble. This decline has brought the 10-year Treasury bond yield to a 112-year monthly low. It is worth noting, however, that the quarter-century downtrend of the 10-year bond yield remains intact and will remain intact even if the 10-year yield were to drop significantly below 1.5% over the near-term.
Little Insensitive?
The unveiling of pictures of planned luxury residential towers scheduled to be built in Seoul, South Korea, has sparked instant controversy. The reason is obvious. The towers, which include a so-called “cloud” feature connecting them around the 27th floors, clearly resemble the World Trade Towers in the process of collapsing following the 9/11 attacks. . . .
Saturday, December 17, 2011
1.5 Million Douche Mobile
The Rolls-Royce has always had a history of elegance and class - until now.
That prestigious reputation has been smashed by the world's most vulgar makeover of the company's iconic Ghost model.
An Italian fashion design house has created a gold-covered monstrosity costing more than £1 million.
The Fenice Milano 'Diva' has been spray painted in 24-carat gold and the company is so proud of it they have described the model as a 'true.masterpiece.'
It is fitted with the same 6-litre twin-turbocharged engine of the Ghost, giving the saloon more than 560bhp and a top speed of 155mph.
Fenice Milano believes their Rolls-Royce is a 'synonym for class, elegance and style'. many would disagree.
The interior has biscuit leather and 24-carat gold throughout. The standard Ghost costs £220,000 but the Diva is now for sale at £1.05million.
Read more: http://www.dailymail.co.uk/news/article-2075064/How-vulgar--1-million-24-carat-gold-Rolls-Royce-unveiled.html#ixzz1gnCdx2FZ
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