President Obama looked tired and beat up as he unintentionally states, “I continue to be much more concerned when it comes to our security, with the prospect of a nuclear weapon going off in Manhattan” A simple slip up or something more sinister happening behind the scenes? Watch and decide for yourself.
What The Hell Is Financial Repression?
According to Bill Gross financial repression is transferring money from savers to borrowers. And according to him, we’re going to be financially repressed for decades.
This is also known as fucking the most responsible members of our financial community…the savers….for the benefit of capital misallocation and speculation. Thanks again Greenspan, Bernanke and Yellen.
All joking aside, this is an incredibly important issue to consider going forward. Until and unless the FED picks the path of savers instead of speculators, the US will never move forward. We will continue to go from boom to bust in various asset classes, giving the perception of wealth, all while the underlying economy continues to rot away. Even though the top 1% will benefit substantially it will bring an eventual collapse to the entire system. As it stands today, we would be lucky with the outcome the Japanese had over the last 24 years.
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What The Hell Is Financial Repression? Google
Bloomberg Writes: Americans Can’t Retire When Bill Gross Sees Repression
Twelve years after retiring as a telephone repairman, Roger Wood clocks 12 to 15 hours a week at a Lowe’s Cos. hardware store near Glen Allen, Virginia.
“About the same amount I made 30 years ago,” Wood, 69, says of his $12 hourly wage. “I’m worried about my portfolio because of low interest rates, even to the point of considering full-time again.”
Feeble returns on the safest investments such as bank deposits and fixed-income securities represent a “financial repression” transferring money from savers to borrowers, says Bill Gross, manager of the world’s biggest bond fund. Workers 65 and older, struggling with years of depressed yields, are the only group of Americans who are increasingly employed or looking for jobs, according to Labor Department participation-rate data.
“We’re going to be financially repressed for decades,” Gross, the 69-year-old billionaire co-founder of Pacific Investment Management Co., told Bloomberg Radio Feb. 7, citing Federal Reserve interest-rate policy that aims to cut borrowing costs. “I hate to be gloomy, but, yes, for the next 10 years, the oldsters, and I’m in that camp, are going to be disappointed in terms of the policy rate.”
About 75 million baby boomers, born from 1946 to 1964, are starting to retire and face meager returns as a byproduct of the Fed’s decision to hold its benchmark rate near zero since December 2008. Policy makers also have quadrupled the central bank’s balance sheet to a record $4.22 trillion to drive down borrowing costs.
More Needed
A 65-year-old who wanted to pay for retirement with annuities tied to bonds needed 24 percent more wealth in 2013 than in 2005, National Bureau of Economic Research President James Poterba calculated in a research paper released in February. The increase followed a drop in yields on top-rated corporate bonds to 3.8 percent from 5.4 percent, according to Poterba, whose organization is the official arbiter of when U.S. recessions start and end.
America’s Widening Retirement Gap
“The magic of compound interest works very slowly when real rates are very low,” said Poterba, also a professor of economics at the Massachusetts Institute of Technology in Cambridge. “Interest rates that have prevailed for the last few years have made it more challenging for savers to accumulate wealth, particularly if they are trying to do so in a relatively risk-free way.”
U.S. Treasury yields are at least 2 percentage points under what they would be otherwise because of the Fed’s low-rate policies and stimulus programs, said William Ford, former Atlanta Fed president who wrote a 2011 paper estimating the impact on savers of monetary easing. That reduces their income by at least $280 billion annually, his analysis shows.
‘Killing Savers’
“The costs of low interest rates are being ignored,” Ford said in an interview. “It is killing savers, elderly savers who are living on life savings that have been conservatively invested.”
Baby boomers started turning 65 in 2011, and every day for the next 16 years about 10,000 more will join them, according to the Pew Research Center in Washington. About 19.8 percent of the population will be 65 and older in 2030, compared with 12 percent in 2000, Census Bureau projections show.
Almost half of workers aren’t confident they will have enough money to retire, according to asurvey released this month by the Employee Benefit Research Institute in Washington. Thirty-seven percent of non-retirees told a Gallup poll last year they don’t expect to quit their jobs until after age 65, more than double the 14 percent who gave that answer in 1995.
Facing Crisis
Americans face a “crisis,” said Alicia Munnell, director of the Center for Retirement Research at Boston College in Chestnut Hill, Massachusetts, and a former research director at the Boston Fed. “Five more years of low interest rates are going to make providing one’s self with an adequate retirement income extremely difficult.”
The financial crunch probably will reduce consumer-spending growth in the next decade and also could hurt career prospects for younger generations, said Steven Ricchiuto, chief economist of Mizuho Securities USA Inc. in New York.
“Simple, it is a drag,” he said. Either they cut spending to boost saving or “they will just be forced to work longer, making it harder for young people to get jobs or move up the ladder.”
Side Effect
Fed Chair Janet Yellen, who succeeded Ben S. Bernanke last month, was pressed on Feb. 11 about the impact of the central bank’s policies on older Americans. During her first semi-annual testimony to Congress, she echoed her predecessor’s philosophy that difficulty for savers is an unavoidable side effect of efforts to boost employment and growth.
“A low-interest rate environment is a tough one for retirees who are looking to earn income in safe investments like CDs or bank deposits,” Yellen said. “In a stronger economy, savers will be able to earn a higher return.”
The current national average rate on a five-year certificate of deposit is 0.8 percent, compared with 2.26 percent in 2009, according to Bankrate.com. The national average for money market accounts is 0.11 percent now, compared with 0.48 percent average five years ago.
U.S. Treasuries earned coupons of 7.5 percent two decades ago. Now investing in the U.S. government generates an average coupon of 2.5 percent, according to the Bank of America Merrill Lynch U.S. Treasury Index.
The Fed isn’t planning to raise rates soon. At last week’s meeting of the policy-setting Federal Open Market Committee, officials repeated their pledge that the rate for overnight loans among banks will stay low “for a considerable time” after their asset-purchase program ends.
Tapered Program
They tapered their bond buying by $10 billion for a third time, to $55 billion a month, and predicted the benchmark rate will be 1 percent at the end of 2015 and 2.25 percent a year later, higher than previously forecast. The rate averaged about 5 percent in the year before the 18-month recession began in December 2007.
Some seniors are benefiting from the Fed’s policies, with mortgage rates the lowest in at least four decades.
Robert Fischl, 69, of Glenville, Georgia, cut his house payments by about $2,000 a year by refinancing in April 2013. His 15-year loan has a 2.3 percent annual interest rate, down from 4.63 percent on a 20-year loan. He also withdrew $5,000 during the process to help with a $15,000 sunroom expansion.
“I feel very lucky,” he said. “It is a really nice improvement to the house. We use it year-round.”
Rising Values
Rising home values and record stock prices also are helping some older Americans. The S&P/Case-Shiller home prices in 20 cities climbed 13.4 percent in December from a year earlier, down slightly from the pace in November which was the biggest gain since February, 2006. The Standard & Poor’s 500 Index jumped 30 percent last year.
“The best thing that’s happened for people looking at retirement is home prices went and up stock prices went up,” said Torsten Slok, chief international economist at Deutsche Bank AG in New York. “U.S. households have never been more wealthy.”
Even so, men and women 65 and older are staying in the labor force longer: Their participation rate was 18.9 percent in February, near a 52-year high, while the overall rate held at 63 percent, near a 36-year low.
People are working longer not only because of financial need but also because of improved health and longevity, less physically demanding jobs, more women employees, declines in company-provided retiree health insurance and changes to Social Security, according to Boston College’s Munnell.
As the risk and responsibility of saving for retirement continues to shift to employees from employers, low interest rates could force some younger workers to hold onto their jobs longer than they’d planned.
Disappearing Pensions
The number of 401(k) plans grew to about 513,000 in 2011 from 17,000 in 1984, while active participants increased to 61 million from 7.5 million, according to Labor Department data. In that time, single-employer defined-benefit pension plans fell to about 43,800 from about 165,700.
While William Pagdon knows the Fed keeps rates low to boost employment, he doesn’t like being collateral damage: He now figures he’ll have to work a decade longer than he’d wanted.
Pagdon, a 51-year-old scientist who lives in Edison, New Jersey, with his wife and young son, has about 90 percent of his assets invested in “very safe, very low-yielding” bonds and the rest in the stock market, which he fears “will crumble.”
Savings Stagnate
“My plan has been deferred about 10 years, so now I’m looking at 65 and not 55,” Pagdon says. “Interest rates have caused my savings to stagnate to close to useless.”
Loomis Sayles & Co. Vice Chairman Dan Fuss, 80, can see the impact of low rates on retirees at the grocery store near his home in Wellesley, Massachusetts.
“If you look at the average age of the people bagging the groceries, I want to help them push the cart out; and look at those riding the commuter train at rush hour, a lot of them are my age,” said Fuss, who managed the two best large U.S. bond funds during the past 10 years.
He says he’s still working because he loves it, yet empathizes with those who have no choice. “The savers are screaming.”
What You Ought To Know About Bill Gates
The Shocking Secret Behind Bill Gates’s Success Is Finally Revealed
KEY STATISTICS: (Date of Analysis: October 30th, 2013)
Full Name: William Henry “Bill” Gates III
NET WORTH: $72 Billion (2013)
Date of Birth: October 28, 1955 (age 58) in Seattle, WA, USA
Current Residence: Medina, WA, USA
Parents: William H. Gates, Sr and Mary Maxwell Gates
Education: Harvard University (dropped out)
Occupation: Chairman of Microsoft Inc, Chair of the Bill & Melinda Gates Foundation, CEO of Cascade Investments, Chairman of Corbis
Family Life: Married to Melinda Gates (1994-present). 3 Children: Jennifer, Rory and Phoebe
QUICK SUMMARY:
Gates was born in Seattle Washington to William H. Gates, Sr a prominent lawyer and Mary Maxwell Gates a businesswoman. Growing up in a very well to do family Gates was always encouraged to compete and win. At the age of 13, in 1968, Bill Gates was enrolled in the Lakeside School, an exclusive preparatory school where he fell in love with computers and programming.
Due to Lakeside’s prominent status and high level industry connections Bill Gates and a few other students were able to gain access to terminal and computer time available only to large institutions and corporations at the time. From that point on Bill could not be pulled away from programming and within a short time have developed his first game “tic-tac-toe”. Various corporate gigs followed. Even at his young age Bill Gates was already at the forefront of the computer revolution that was about to come.
In 1973, Bill Gates graduated from Lakeside with SAT of 1590 out of 1600 (indicating high level of intelligence) and enrolled at Harvard University. In his first two years at Harvard, Bill Gates showed further brilliance when working in the computer field. However, in his sophomore year Bill and his friend Paul Allen have decided to drop out to pursue their dream of building a software company. Both of his parents were supportive of the decision.
Working on various things in between, the duo registered “Microsoft” as a business in 1976. During yearly years, all employees had broad responsibilities. While Gates oversaw business details, in the first five years he was also personally reviewing every line of code the company was creating. In 1980 Microsoft worked closely with IBM to develop an operating system. Showing his brilliance once again Gates structured a deal to keep copyrights for the software while licensing it to an IBM. This was done on a hunch that the rest of the industry will use his software as well. He was, of course, right.
In 1985 Microsoft released its first version of Microsoft Windows and through various steps (and major blunders by the competitors) were able to essentially monopolize worldwide operating system market, making Bill Gates the richest man in the world in the process.
FUN FACTS ABOUT BILL GATES:
- Bill Gates intends to leave less than $10M for each if his three children “so they can make their own way” and that the family mostly drives a minivan when all going somewhere.
- Bill Gates continued to fly coach until 1997, at which point his net worth was $36 billion.
- Bill Gates has saved over five million lives by “bringing vaccines and improved healthcare to children internationally”.
- The generic silhouette outline placeholder picture in Microsoft Outlook 2010 is actually Bill Gates’ mug shot.
- Steve Jobs accused Bill Gates of stealing from Apple, Gates said, “Well, Steve, I think there’s more than one way of looking at it. I think it’s more like we both had this rich neighbor named Xerox and I broke into his house to steal the TV set and found out that you had already stolen it.”
BILL GATES QUOTES:
“I really had a lot of dreams when I was a kid, and I think a great deal of that grew out of the fact that I had a chance to read a lot.”
“Be nice to nerds. Chances are you’ll end up working for one.“
“Intellectual property has the shelf life of a banana.“
DIFFICULT TIMES AND OVERCOMING PROBLEMS:
Bill Gates’s and Paul Allen’s first company, Traf-O-Data (a device which could read traffic tapes and process the data) failed miserably. It was reported that their product wouldn’t even work. Did that stop them? Not a bit. They have looked into their failure and moved on. They went on to form Microsoft within a short period of time and the rest of history. Many will look at Bill Gates and say that the guy has never failed in his life, yet they would be wrong.
The first business failure clearly positioned them for future success, delivered a number of lessons only a failure could teach and have prepared both Gates and Allen for success at Microsoft. Then there was the battle with the Justice Department and Antitrust charges that were brought against Microsoft in 1998. It was a difficult time for both Gates and Microsoft and under certain circumstances the lawsuit could have destroyed Microsoft. Yet, through a serious of moves and sheer perseverance, Gates was able to overcome that challenge as well. He fought vigorously to defend his company and succeeded.
PERSONAL CHARACTER TRAITS:
“I never took a day off in my twenties. Not one”. – Bill Gates.
- Aggressive: From 1975 to 2006, Gates aggressively grew the company’s product range and grew the company from nothing into one of the largest corporations in the world.
- Distant: Industry insiders indicate that Bill Gates is very hard to reach and is notorious for not returning phone calls.
- Extremely Competitive: Numerous people have indicated that Bill Gates is extremely competitive. Confirmed by Microsoft’s success, there is also anecdotal evidence that Bill would study games (card, board, etc..) that he was losing in order to beat his opponents the next time they would meet.
- Demanding: Numerous Microsoft’s senior managers and program managers share first hand experiences of Bill Gates becoming verbally combative, berating managers for unsound business strategies or product shortcomings.
- Straight Shooter: Gates is known for interrupting presentations with such comments as, “That’s the stupidest thing I’ve ever heard!” and, “Why don’t you just give up your options and join the Peace Corps?
SUCCESS ANALYSIS:
There is no doubt that Bill Gates is extremely intelligent and hard working. Yet, there are numerous hidden facts that have led to his amazing success. Here they are…..
Being Born To A Wealthy Family: Without affluence he would be unable to go to Lakeside and gain access to the computers or programming at a young age. This early access to computers (when no one else had it) played a major part in his success. Without it, he would be unable to become an expert computer programmer by the age of 18.
Perfect Timing: Being born in 1958. If he would have been born just +/- 5 years, he would have lost the early window of computer revolution and his life would have taken him on a different path. Still successful, but unlikely to be as rich as he is today.
Competitive Edge: Being pushed by his parents from the very young age to be successful and to win played a significant role in his success. He always wanted to win and there was no rest until Microsoft was #1.
Supportive Family: Being supported by his parents when he decided to quit college. They could have always said NO and steered Bill towards a law degree or an MBA, closing his computer revolution window of opportunity forever.
Working Hard: In early days of Microsoft and for at least 10 years Bill Gates worked 7 days a week, putting in 80-120 hours per week. Not many human beings on this earth can sustain this kind of a schedule. He simply overworked every other competitor and grinded them under into the ground.
Winning At Any Cost: Bill is highly competitive. For him there is only two possible outcomes. Death or victory. He will work day and night, study, model and do whatever it is he believes he needs to do in order to win.
Concentrating On A Specific Area: By the time Bill Gates was 18 he has already spent well over 10,000 hours perfecting his programming and computer skills. He was an expect. He was already decades ahead of most of his peers.
Being A Demanding Asshole: I know the type because I am one. Many people don’t understand this but Bill Gates could have taken his foot of the gas by 1986. He was already a Billionaire by that point. But he didn’t.
Why?
Because for him it is not about the money. His personal preferences prove that clearly. For him it was always about building the best company in the world and changing lives. He was on the mission and no one would stop him. He knew that in order to accomplish that he had to work tirelessly to improve every little aspect of his company. He was running scared 100% of the time. He had no patience for people who wanted to coast. He wanted things done then and there. In the best humanly possible way.
He knew that anything less than that would subtract from the mission of his company and his life. It was always personal. He wanted to win and he would do anything in his power to get it done. No walls could contain him and he would not take no for an answer. He was an unstoppable force. That is the true secret to his success.
CONCLUSION:
The circumstantial points above are certainly important, yet they are not everything. Yes, he was at the right place, at the right time and from the right neighborhood, but he also worked like a madman in order to succeed.
I know that Bill Gates looks like this nice nerdy guy who got lucky. Yet, he is anything but that. He is one of the toughest competitors on the face of this earth. His net worth clearly proves that. If you stand in his way he will not hesitate for a second to cut your head off, drink all of your blood and take all of your money. He only has one gear, to win / to grow / to succeed. Anything else is unacceptable to him.
So, how can you replicate his success? While you can’t control some of the factors above, you can definitely implement the following points.
- Work Hard: If you want to perform at this level you must forget about working 8 hours a day. The chances of you being successful on that schedule are slim to none. Instead, 12-16 hour work days should become your norm.
- Become A Competitor: You must win at everything. Even if you win at finishing the dinner first. It is all part of developing this quality in yourself. Just set your mind that you must win at everything you do and soon that feeling will become a part of your life.
- Win At Any Cost: Do what you need to do in order to win. For as long as you don’t hurt others or yourself in the process.
- Concentrate On A Specific Area: Become an expert in something that will bring you success, fame and fortune. Spend as much time as possible on perfecting your skills. Forget about everything else.
- Become A Demanding Asshole: You have to be if you want success. Most people just want to get by. You must kick their ass if you want them to help you get there. You can become nice again after your first billion.
Personal Note:
No matter what your personal opinion is, I believe Bill Gates is by far the best human being living on the face of the earth right now. His personal shortcomings aside, he is directly tied to saving over 5 Million lives through his Gates Foundation. While the Pope and Dalai Lama run their mouth Bill Gates is investing most of his fortune towards betterment of humanity. While world leaders play “Liberation & Freedom” by killing tens of thousands of innocent people each year, Bill Gates has been able to convince his billionaire friends to put a foundation together whose sole purpose it is to help humanity.
As such, I salute you Bill Gates. We need more people like you.
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How To Make Money From Bitcoin
There is no question that some sort of a digital currency will be adopted over the next 10-20 years. With recent publicity, Wall Street derivative market setup and market adaptation, BitCoin has a good chance of becoming that de facto digital currency. Yet, with wild market fluctuations and no intrinsic value to speak of, how do you make money from BitCoin?
Famed entrepreneur and tech investor Marc Andreessen might have an answer. According to him….
“Andreessen is betting on the idea that there will be a big infrastructure built around currencies like this,” explains Blodget in the video above. “He’s investing in the service providers around them.” Andreessen is betting that bitcoin “is the Internet in 1993, 1994,” adds Blodget.
I think that’s a very good way to approach Bitcoin. While the currency itself might be highly volatile it will be the service providers that will make most of the money and build multi-billion companies around it. Yet, it’s not without problems. There will only be 1 or 2 winners in the space. To the likes of PayPal. With too many unknowns and uncertainties, it’s anyone’s guess what will work and what will fail.
Plus, most of these companies are in early start up phases, making an investment in them fairly difficult. With that said, it would be a good idea to watch this space and see what pops up.
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How To Make Money From Bitcoin Google
Why Marc Andreessen is betting big on bitcoin
Bitcoin is trading about 55% below its record high and Its biggest exchange is now bankrupt following a multimillion-dollar loss. Does the popular virtual currency have a future?
Marc Andreessen, the founder of Netscape, thinks so. The co-founder and partner of venture capital firm Andreessen Horowitz has invested about $50 million in bitcoin-related companies and plans to invest hundreds of millions of dollars more according to The Wall Street Journal.
Andreessen has invested $25 million in Coinbase, which creates digital wallets, and smaller sums in Ripple, a payment system as well as other bitcoin-related companies, according to The Journal.
“There appears to be some need for a digital currency that crosses borders that anybody in any country at anytime can exchange…with low transaction costs [and] can then be picked up anywhere else in the world,” says The Daily Ticker’s Henry Blodget, about the potential demand for virtual currencies.
But will that change?
Andreessen is betting on it. He expects more Internet users will use virtual currencies in the future, to transfer digital contracts, signatures and money because the costs will be less than doing the same transactions through banks and credit card companies.
“Andreessen is betting on the idea that there will be a big infrastructure built around currencies like this,” explains Blodget in the video above. “He’s investing in the service providers around them.” Andreessen is betting that bitcoin “is the Internet in 1993, 1994,” adds Blodget.
Blodget says if bitcoin does gets adopted by more people “it probably will become more valuable.” But in the meantime, says Blodget, its price “could go to a penny or a million. It has no intrinsic value whatsoever.”
Even Andreessen acknowledges the price risk. He told the Journal that bitcoin is “weird and scary and nerdy, and full of scams and frauds, just like the Internet was.”
Shocking Secret Revealed: Why Sites Like ZeroHedge.com and ElliotWave.com Are Dangerous To Your Wealth
Let me start with the premise that the sites above provide a tremendous amount of useful information and market analysis. Yet, they do more harm to most investors than they can imagine. Here is why.
Both sites operate on a conspiracy angle that markets are being manipulated and the reason you are not making any money (or even worse….losing it) is because of the big bad Government, Goldman Sachs and everybody else. It is due to the manipulation by these sinister powers that the Gold is not selling at $10,000/ounce and the DOW is not at 1,000.
BULLSHIT. IT’S TIME FOR YOU TO WAKE UP.
Whether or not someone is manipulating the markets is irrelevant here. What is relevant is the fact that the market is up over 150% since the 2009 bottom while the likes of ZeroHedge and ElliotWave continue to preach the DOW 1,000. How much money did you lose shorting the market?
Case and point: Today’s quick update from ZeroHedge.
This morning’s pre-open is dominated by deja vu all over again. Just as we saw yesterday, right on cue at 830ET, gold (and silver) are unceremoniously dumped and USDJPY is pumped so as to ensure stocks look shiny for the US open (and Biotech can be dumped to the next greater fool). Oil is not moving, 30Y bonds are weaker, and the USD is flat… all makes perfect sense if you don’t think about it.Perhaps it was all about running Copper up to $300?
Seriously? Who the hell cares. You are either smart enough to trade/invest and make money from the moves above or you can be a little bitch and whine that Janet Yellen and Obama and Putin and Goldman Sachs are manipulating the markets.
Now, before you label me as a Perma Bull expecting the Dow 100,000, I am anything but that. I just know how difficult it is to get out of the bear/conspiracy mindset once you get into it. Further, my mathematical and timing work indicates an upcoming severe bear market that I have been talking about on this blog.
However, it will not get anywhere close to 1,000. It won’t even get close to the 2009 bottom. If you would like to know when this bear market of 2014-2017 will start, how low it will go and it’s internal composition, please CLICK HERE.
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What You Ought To Know About The US Foreign Policy
When it comes to foreign affairs and geopolitical issues the new sport of choice in Washington is nation destabilization. Libya, Syria, Egypt and now Ukraine. Of course we know what had happened in Libya and what is happening in Syria. Yet, US backed new governments of Egypt and Ukraine do not disappoint either. Case and point.
“The United States expressed shock Monday after an Egyptian court handed down death sentences against 529 supporters of Egypt’s deposed president Mohamed Morsi after a two-day trial.” – Shocked? Well, if you are shocked stop bankrolling their government.
“Time to grab guns and kill all the damn Russians in Ukraine– Tymoshenko in leaked tape” – Will John McCain stand with the Ukrainian people as they kill all the Russians and the Jews?
And these are the people we know about. It’s time for the US to get the hell out of other countries and start minding it’s own business. It’s time the US Government concentrates on domestic issues and our economy instead of war, destabilization or steering up geopolitical trouble. How about sending that $1-3 Billion in aid to Detroit instead of Ukraine.
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Iran Is Building A Fake Aircraft Carrier
The amount of stupidity out there is unbelievable. With Obama/Putin slap match accelerating speed, Turkey/Spain agreeing to build/share an aircraft carrier earlier this year and some in Alaska wanting to join Russian Federation I sometimes wonder how we have made it this far as a human race. Not to be outdone, Iran is building a fake Nimitz class aircraft carrier on top of a large barge.
Why?
According to the latest theory, to blow it up in a propaganda video. Because you know, just in case the US and Iran go to war, it will work wonders for the spirits of their population. Completed with a traditional parade and an American flag burning. How do you say WTF in Persian? تکواندو
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Iran Is Building A Fake Aircraft Carrier Google
Iran Is Building a Fake U.S. Aircraft Carrier, Possibly So They Can Blow It Up
Iran is still negotiating with world powers about limiting its nuclear program, but if things go south, they have a spectacular ending in mind – or rather, had. U.S officials may have spoiled it by revealing that Iran is building a mock-up of an American aircraft carrier. The New York Times reports that since last summer, satellite photos have picked up images of a ship being built near Bandar Abbas that looks suspiciously like the Navy’s Nimitz-class carriers – though it’s two-thirds the size and has no nuclear propulsion system. “Based on our observations, this is not a functioning aircraft carrier; it’s a large barge built to look like an aircraft carrier,” said Commander Jason Salata, a spokesman for the Navy’s Fifth Fleet in Bahrain. “We’re not sure what Iran hopes to gain by building this. If it is a big propaganda piece, to what end?”
One leading theory: They’re planning to blow it up. In the past, Iran has fired missiles at barges during training exercises, then aired the footage on state-run news media. Recently, the Iranians have cut back on their anti-American posturing during naval exercises, but if the mood changes, they could tow the barge out to sea and destroy it to make one impressive propaganda film.
According to the Times, “For now, Navy analysts and American intelligence officials say they are not unduly concerned about the mock ship.” But making a 700-foot model aircraft carrier, complete with little planes on the flight deck, does take a lot of work, so let’s act surprised if they do blow it up.
Warning: Is Crude Oil Signalling Another Recession?
During the last US market collapse of 2007-2009, Crude Oil took it on the chin. Collapsing from $150 to $40 or (74%) in 2008 alone. Even though it recovered substantially since it’s low, it has been stuck in the trading range since the early 2011. Today, funds are starting to cut their long oil exposure.
Money managers cut net-long positions by 25,775 futures and options combined in the week ended March 18, U.S. Commodity Futures Trading Commission data show. It was the biggest drop since June. Long positions slumped 6.6 percent after reaching a record earlier in the month. Shorts increased 7.6 percent
Start of a new trend? Not yet. Crude oil continues to trade within its range without as much as breaking to the upside or downside over the last few years. However, I believe that trend is about to change. As our mathematical and timing work indicates, the US Equity markets will go through a severe bear market between 2014-2017. Pushing the US economy into another recession. When that happens, I expect Crude Oil to break down out of its trading range and fall into at least a $60 range.
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Warning: Is Crude Oil Signalling Another Recession? Google
Bloomberg Reports:Speculators Cut Bullish Oil Bets by Most in Nine Months
Hedge funds reduced their bets on rising West Texas Intermediate crude prices by the most in almost nine months as U.S. inventories climbed and concern eased that sanctions against Russia will disrupt oil supplies.
Money managers cut net-long positions by 25,775 futures and options combined in the week ended March 18, U.S. Commodity Futures Trading Commission data show. It was the biggest drop since June. Long positions slumped 6.6 percent after reaching a record earlier in the month. Shorts increased 7.6 percent.
Crude supplies advanced for a ninth week in the seven days ended March 14 to a three-month high as production increased to the most in 26 years and refineries processed the least oil since October. The U.S. and European Union announced sanctions after voters in Crimea chose to leave Ukraine and become part of Russia, the world’s biggest energy exporter.
“Market players are stepping back and the record longs continue to be shed,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “Overall inventories have increased a lot as refineries are doing maintenance.”
Crude dropped 33 cents to $99.70 on the New York Mercantile Exchange in the period covered by the CFTC report. It ended below $100 in each of the five days and slid to $97.99 on March 12, the lowest settlement since Feb. 6.
Prices rose 0.6 percent to $99.46 on March 21 after Russian President Vladimir Putin signed legislation to absorb Crimea, brushing aside sanctions. WTI rose 7 cents to $99.53 a barrel at 9:15 a.m. in London today.
Growing Supply
U.S. stockpiles increased by 25.6 million barrels, or 7.3 percent, in the nine weeks ended March 14 to 375.9 million barrels, the highest level since Nov. 29, according to the U.S. Energy Information Administration.
Domestic production climbed to 8.22 million barrels a day in the week ended March 14, the most since May 1988. Refineries processed 15 million barrels a day, the least since Oct. 18. The operating rate dropped to 85.6 percent of capacity as companies retooled plants before gasoline demand climbs with warmer weather.
Phillips 66 said on March 17 that its Los Angeles refinery was conducting planned maintenance. The plant has a capacity of 139,000 barrels a day. Marathon Petroleum Corp. (MPC) was performing planned work at the 206,000-barrel-a-day refinery at Robinson, Illinois, a person familiar with the matter said on March 13.
Refinery Repairs
Suncor Energy Inc. said on March 14 that it has begun maintenance at the Commerce City, Colorado, plant. The refinery near Denver has a capacity of 103,000 barrels a day.
“It’s the refinery maintenance season,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “The concern is definitely on the U.S. economy and the fundamentals.”
President Barack Obama authorized sanctions against officials and businessmen close to Putin as Russia completed its annexation of Crimea. Among the targets was billionaire Gennady Timchenko, a co-founder of Gunvor Group Ltd., an oil-trading firm. The U.S. named Putin as an investor in the company. Gunvor said Putin has never held a stake.
Timchenko sold his stake in the company to partner Torbjorn Tornqvist, according to a company statement. The transaction took place March 19, the day before the U.S. Treasury Department imposed sanctions on the 61-year-old billionaire.
Russia produced 10.4 million barrels a day of oil in 2012 and exported 7.4 million, according to the EIA. The southern part of the Druzhba line carries 300,000 barrels a day of Russian crude through Ukraine to refineries in Hungary, Slovakia and the Czech Republic.
Lower Wagers
Net-long positions in WTI crude held by money managers, including hedge funds, commodity pools and commodity-trading advisers, fell by 7.9 percent to 302,320. Long positions dropped to 334,104, while shorts increased to 31,784.
Bullish bets on gasoline decreased 1.4 percent to 57,343 futures and options. Futures slid 6.42 cents, or 2.2 percent, to $2.9028 a gallon on the Nymex in the reporting period and gained 0.4 percent to $2.9079 March 21. They were at $2.9043 today.
Regular gasoline at the pump, averaged nationwide, rose 0.2 cent to $3.525 a gallon on March 22, the first gain in three days, according to Heathrow, Florida-based AAA, the largest U.S. motoring group.
Money managers’ bullish wagers on U.S. ultra low sulfur diesel decreased 30 percent to 23,109. The fuel fell 4.55 cents to $2.9155 a gallon in the report week and dropped 12 cents to $2.9201 March 21. It was at $2.9140 today.
Natural Gas
Net-long wagers on four U.S. natural gas contracts dropped 2.4 percent to 408,941. The measure includes an index of four contracts adjusted to futures equivalents: Nymex natural gasfutures, Nymex Henry Hub Swap Futures, Nymex ClearPort Henry Hub Penultimate Swaps and the ICE Futures U.S. Henry Hub contract.
Natural gas futures fell 14.9 cents, or 3.2 percent, to $4.456 per million British thermal units on Nymex during the report week. They slid 1.3 percent to $4.313 on March 21 and were at $4.332 today.
“The fundamentals are weak for oil,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “So far, Russia hasn’t been a big threat to oil supplies.”
NATO: Russia Is About To Attack. Russia: No Attack Coming. Who Is Right?
According to NATO, Russia has amassed a strong military force right next to Ukraine, ready to attack at moment’s notice. Russia claims that no such force has been assembled and no attack is imminent.
Who to believe?
Both sides. Let me put it this way. Yes, Russia has amassed a strong military force right next to Ukraine, ready to be deployed at moments notice. Yet, as it stands today, Russia will not go in. The only thing that will trigger an incursion into Ukraine is more sanctions against Russia and/or Putin. If the West goes forward with any further sanctions, Putin will have no choice but to respond and show his “power”. That would mean a powerful military move into East Ukraine and it’s possible annexation. As such, it would be a good idea for the West to stop here if they don’t want this conflict escalating further.
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Moscow: No troop build-up or undeclared military activity near Ukraine borders
Russia is observing all international agreements on troop limits in regions bordering Ukraine, the Russian Deputy Defense Minister said, adding that foreign missions’ inspections can confirm that.
The statement was made in response to reports by several foreign media outlets over concentrations of “thousands” of Russian servicemen on the Russian-Ukrainian border.
“By the way this issue has during the last month been regularly raised in telephone conversations between Russia’s Minister of Defense Sergey Shoigu, and his foreign counterparts, including US Defense Secretary Chuck Hagel and even acting Ukrainian Defense Minister Igor Tenyukh,” Anatoly Antonov, the Russian Deputy Defense Minister said.
Sergey Shoigu has, in a very transparent manner, informed all of them about the real situation on the Russian-Ukrainian border. He also stressed that Russia has no intention to concentrate troops there, Antonov said.
Following recent probes by foreign missions in Russia of Ukraine’s bordering regions, foreign inspectors came to the conclusion that “Russian Armed Forces are not undertaking any undeclared military activity that would threaten the security of neighboring countries,” Antonov added.
The official said eight foreign inspection groups have recently visited Russia.
“Our venues and regions, where troops are stationed near Ukrainian borders, have twice been checked by the Ukrainian military,” the Deputy Minister said. “Besides, we have had on our territory inspectors from the US, Canada, Germany, France, Switzerland, Poland, Latvia, Estonia and Finland.”
Seven of those eight missions were interested in Russian regions bordering with Ukraine, Antonov said. Foreign inspectors were allowed to talk to chiefs of the Russian military units, make pictures of deployment sites and military vehicles, and control them during relocation.
“We did our best to meet our partners’ requests by allowing them to inspect all of the sites they wanted to. We have nothing to hide,” Antonov said.
The deputy minister said he was hoping that participants of those inspecting missions would inform their countries’ leaderships of what is really going on at the border between Russia and Ukraine.
“We believe this would to large extent facilitate release of tension, something the head of the Pentagon, Hagel, called for during his recent phone conversation with Minister Shoigu.”
Germans, French ‘nullified military co-op with Russia under pressure’
Berlin’s and Paris’ moves to halt military cooperation with Moscow are derailing the bilateral efforts of recent years and are completely unconstructive, Antonov said. However, according to the defense official, the two did so under pressure from their NATO ally.
“Obviously, the proverbial ‘Atlantic solidarity’ has made our French and German partners come up with loud statements against Russia,” Antonov said.
“Refusing from contacts and delegatory exchange though military departments brings to naught the positive tendencies established in the recent years, including the cooperation on Afghanistan, the dialogue on transparency of military activity and military-technical cooperation. We perceive the decision of the German side as taken under pressure and unconstructive,” Antonov stressed.
Both Russian and German defense ministries have recently undertaken some “serious efforts” in mutually beneficial cooperation, the official noted. He also highlighted the “unprecedented” bilateral work with France, including that of the Air Forces and Airborne Forces, noting that a “new impulse of cooperation” had been planned for 2014.
Addressing media on Sunday, Antonov stressed that Russia and its European partners are equally interested in military cooperation. It is “very easy to ruin what has been done by our countries [in the field of military cooperation] and it will be very difficult to restore relations,” he said.
The Russian side hopes that Germany and France will review the situation on the Ukrainian border upon receiving reports from the international inspectors and will move to restore the severed ties, Antonov said. For now, Moscow will act in accordance with the “existing realities,” he added.
Weekly Update & Stocks To Short. March 22nd, 2014. InvestWithAlex.com
Weekly Update & Summary: March 22nd, 2014
Overall it was a good week for the market with the Dow Jones up +237 points (+1.48%) and the Nasdaq up +31 points (0.74%) for the week. Structurally, the market did very well, leaving only one big gap behind at around 16,050. I believe the market will go back to close this gap when the bear market initiates.
FUNDAMENTAL & MARKET ANALYSIS:
As per our timing and mathematical work below, the market will continue to shift gears from bull market to bear market throughout 2014. Longer term, this bear market will last between 2014-2017 as I have indicated many times before. While it’s internal structure will not be as violent and as steep as the 2007-2009 bear market leg, investors should anticipate the market to lose 35-40% when it’s all said and done.
(If you would be interested in learning exactly when this bear market will start and its internal structure, please Click Here)
In last week’s update we talked about some of the best ways to approach the bear market and what you should and shouldn’t be doing. To see that report please Click Here. In this week’s update we will take a look at some of the best stocks to short and how you should approach the entire process.
Step #1: Find Highly Speculative and/or Overpriced Stocks.
The list below should get you going. Click on it to see larger image.
Step #2: Find Force Multipliers
In addition to performing technical and fundamental analysis, look for force multipliers. These are the stocks that move at X to market. For example, if the Nasdaq index moves 4%, a stock with 3X force multiplier will move 12%. All you have to do is compare index moves with the individual stock moves during the same period of time. The higher the multiplier, the higher rate of return you should anticipate.
If you believe the market is going decline substantially, it makes a lot of sense to take a short position in such stocks. If the market declines 20%, it is highly probable such stocks will decline 40-60%. Yet, this is not without risk. At times stocks move at X to market due to their fundamental outperformance. In such cases, the declines will be less than overall market. That is why fundamental and technical analysis become so important. You must first figure out if the stock is simply overpriced/overhyped or if there is substance to its outperformance.
Step #3: Take Position
Whatever your trading strategy is, once the bear market starts, execute it. As you know, shorting is inherently riskier and should be treated that way. Keep tight stop losses and execute your risk management strategies to the best of your ability.
That about covers it. If you believe the bear market is just around the corner (as we do), get yourself ready if you are interested in participating on the short side. Identify stocks to short, zero in on force multipliers, execute and minimize risk. Good luck and profit greatly. If you would be interested in learning exactly when this bear market will start and its internal structure, please Click Here.
MACROECONOMIC ANALYSIS:
Ukraine continues to dominate the news.
While the markets were able to ignore the news this week, that might change over the next few weeks and into April. As I have mentioned here before, Putin was willing to walk away with Crimea and call it a day if the West wasn’t hell bent on sanctions. Unfortunately, I don’t believe the West is done, just yet, with either Ukraine or sanctions. If they continue to slap Putin with sanctions he will have no choice but to respond with a military force in Ukraine over the next few weeks.
Let me put it this way. If the West (US or EU) slam Russia or Putin with further sanctions, Putin WILL invade Eastern Ukraine. There will be no fighting and Eastern Ukraine will quickly ask to become a part of Russia. This will create a downward spiral in foreign relations, a massive geopolitical risk and a possible selloff in US equities(see timing & mathematical section).
TECHNICAL ANALYSIS:
Long-Term: The trend is still up. Market action in January-February could be viewed as a simple correction in an ongoing bull market.
Intermediary-Term: Since February 5th, intermediary term picture shifted from negative to positive. Giving us a technical indication that both the intermediary term and the long term trends are up. Yet, that in itself can be misleading as per our timing analysis discussion below.
Short-Term: While the short-term trend remains bullish, it might be misleading as per our timing analysis discussion below.
Again, even though all 3 trends are bullish for the time being, that might be misleading. Please read our Mathematical and Timing Analysis to see what will transpire over the next few weeks.
MATHEMATICAL & TIMING ANALYSIS:
(*** Please Note: This time around about 90% of the information contained within this section has been deliberately removed as it contain too much technical information. Particularly, exact dates and prices of the upcoming turning points. As well as trading forecasts associated with them. I deem such information to be too valuable to be released onto the general public. As such, this information is only available to my premium subscribers. If you are a premium subscriber please Click Here to log in. If you would be interested in becoming a subscriber and gaining access to the most accurate forecasting service available anywhere, a forecasting service that gives you exact turning points in both price and time, please Click Here to learn more.Don’t forget, we have a risk free 14-day trial).
Based on our mathematical and timing work the next turning point is located at
Date: XXXX
Price: XXXX
XXXX
Others are getting very close.
The list below is for your reference point. It entails my investment strategy over the next few weeks for my own investment purposes. While you are free to follow what I do, please do so at your own risk. Do not take this as a trading advice.
|
Stock |
Entry Point ($) |
Action To Take |
|
QQQ |
88 |
XXXX |
|
XXXX |
1160-1180 |
XXXX |
|
XXXX |
515 |
XXXX |
|
XXXX |
74 |
XXXX |
|
XXXX |
21 |
XXXX |
|
XXXX |
420 |
XXXX |
|
XXXX |
35 |
XXXX |
|
XXXX |
65 |
XXXX |
|
XXXX |
120 |
XXXX |
|
XXXX |
100 |
XXXX |
|
XXXX |
112 |
XXXX |
Otherwise, I suggest the following positioning over the next few days/weeks to minimize risk while positioning yourself for a forecasted market action. (This is continuation of our previous positioning).
If You Are A Trader: XXXX
If No Position: XXXX
If Long: XXXX
If Short: XXXX
CONCLUSION:
An incredibly important week is coming up. Only one scenario remains on the table. I have also described the point force we are looking at and exactly what you should do. Wiith increased volatility, multiple interference patterns and an incredibly important long-term turning point we must be very careful and risk averse here. Those anticipating the moves and those who can time them properly will be rewarded appropriately.
Please Note: XXXX is available to our premium subscribers in our + Subscriber Section. It’s FREE to start.
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Weekly Update & Stocks To Short. March 22nd, 2014. InvestWithAlex.com Google