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Latest Comments294 Comments
POT: The Commodity Surprise of the Year
I want to remind you that China wants to get rid of its dependency on foreign potash. There is a big potash mine just started recently and in a few short years they don't need any Canadian potash any more:
www.chinadaily.com.cn/...
Read my past article on potash. I remember I called for starting to short POT near the harvest time. The call was correct, as July was the start of harvest season:
seekingalpha.com/autho...
Looking Good: Genco in Particular, Shipping in General
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Please note all the good piled up on harbors have to be shipped at some point of time. So the bounce of BDI will be sudden and fierce.
Peak Oil's Bell Is Ringing
seekingalpha.com/artic...
How to Save the U.S. Economy
GM must be allowed to go bankrupt and all its liabilities eliminated. Then under new share holdership the government can help with the re-organization and inject money and all that. But tax payer money must NOT be used to bail out share holders.
The global auto demand, as well as demand of PGM metals, is a separate issue from the fate of GM. US gasoline consumption in the first 8 months of this year only dropped 2.5% from same time last year. That's a very insignificant percentage drop.
Reality Hits Oil Market, Dollar Could Benefit
For 99% of analysts, when they talk about supply and demand, they always talk about demand side and never talk about supply side. And when they talk about weakening demand, all there is is just guess and speculation, no concrete number.
Here is one piece of numbers for you on the demand side, in the USA:
tonto.eia.doe.gov/dnav...
Compare the gasoline consumed in the first 8 months this year with that of last year, the number is 2.205136B barrels versus 2.261672B barrels, a mere 2.5% drop. Of course if you look at emerging economies, the number must be a significant increase. But even in the USA, the drop is only 2.5%, a very insignificant percentage.
On the supply side, do NOT under-estimate the destructive effect of rapidly plummeting oil prices on the producers. Even during good times in the early half of the year when oil price was twice current level, XOM's net profit is only 1/7 of its sales revenue. Now the revenue is probably halved as price is halved, while the cost remains the same, oil producer may not even be profitable any more. This removes a great amount of incentive to develope new oil sources.
Peak Oil is real. Mexico's Cantarell, second largest oil field in the world, is declining at an annual rate of 25% or higher. Mexico is now still the second largest oil supplier to the USA. But by as early as 2011 or 2012, Mexico will cease to be an oil exporter and will have to import oil for its domestic use!!! All of the top ten of the world's largest oil fields are declining rapidly. This decline can not be replaced if there is no high oil price to stimulate strong interest to look for dwindling remaining oil reserves in the next few years.
Read more why supply destruction in commodities is taking place:
seekingalpha.com/autho...
The commodity bull shall return with even more fierce forces soon, as severe damage to supply has already been done.
Is Norilsk Really Selling Its SWC Stake?
If there is a genius who could have predicted that PGM metal prices would fall, back at the end of February, despite of ongoing electricity crisis in South Africa and production disruption, and that US dollar would rally despite of the Fed printing like there is no tomorrow, then I will follow your genius. But no such genius exists. No one can predict short term moves.
If you believe the US dollar will continue to move up and precious metals will continue to drop, despite of most of them except for gold are already below marginal production cost, then I urge you to follow your own conviction and sell all your precious metals and stocks, and hoard US dollar cash.
I continue to exam all the fundamentals of PGM metals, and continue to believe they are extremely bullish, so I continue to hold on. For those who could not hear the pain, please sell and go away, just don't come back to get hurt a second time. I suffer heavy loss myself but I hold on as I don't see a good reason why should I sell.
Automakers facing a liquidity squeeze must have sold off their precious metal stockpile to raise cash. This put them in a very vulnerable position as they are now completely at risk of any supply discruption. They have to panic buy at some point. It was rather foolish that they sold the metals at far below production cost, and later on need to pay much higher prices to buy them back.
How to Save the U.S. Economy
There is no error in my part. One barrel of oil is about 40 gallons. It can be refined to produce a lot of things besides gasoline and diesel. Follow the link I quoted in the article. One barrel produces about 28.9 gallon of vehicle fuels, among other things. Divide it by 40 that's roughly the 71% you discovered through google.
DaveW:
I do not see anything thing wrong with SWC's Q3 result. The roughly break even result is much better than I thought. There has been some deliberate manipulation of the share price on Tuesday. There is a Bloomberg news article which obviously distort things or mislead readers.
www.bloomberg.com/apps...
For example, the article says "quarterly net loss", without a number and without indicating that it's pretty close to break even.
For example, it portrait standard forward looking statements, common in all corporation quarterly filings, and made them sound as realistic outlooks. SWC never had a problem collecting payments so far.
The worse of all, right after mentioning that SWC doesn't have a credit line and doesn't believe it can get one with reasonable terms, the author immediately follows with a comment "``It's MURDER for anyone who needs cash,'" Made it sound like SWC is so desperate for cash liquidity that it will soon be killed. The reality is SWC has more than enough liquidity and does NOT need to take up a credit line. SWC has tons of working capital tied up in the recycling business. It can easily slow down the recycling a bit to free up a lot of cash it it needs to.
The plummet of SWC tuesday is the worst stock manipulation I have ever seen. I am going to put some fresh cash in and buy more tomorrow.
Bond Expert: Treasury Update
seekingalpha.com/artic...
Obviously it's so disturbing that the Treasury will have to investigate what's going on in the market. Read also Jim Sinclair's comments.
Safe Haven Investments: Imminent Danger and Opportunities
216.157.72.247/index.p.../
Quote Jim: "It is ok to naked short anything against anyone until it costs the Treasury money. This is the financial equivalent of “Let Them eat Cake.” Somebody is going to the guillotine for these “Fails to Deliver.""
The original Bloomberg news report:
U.S. Treasury Opens Probe Seeking Improper Trading (Update1)
By Rebecca Christie and Vincent Del Giudice
www.bloomberg.com/apps...
Safe Haven Investments: Imminent Danger and Opportunities
platinum.matthey.com/m...
The company said it will take six weeks to repair. Don't count on it. There was another shut down of the smelter in September 2005. Their initial accessment was a 3 weeks down time. Ended up shut down for more than three months.
The Next Crisis Is on the Horizon
seekingalpha.com/artic...
Safe Haven Investments: Imminent Danger and Opportunities
What pink sheet stock did I mention? The only thing with a .pk I mentioned is NILSY.PK, Norilsk Nickel. They are not a small penny stock. Norilsk Nickel is gigantic. I do not recommend penny stock.
PaulTaut:
No one can get market timing correct so why even bother to attempt to time the market. Most savvy investors have totally given up trying to time the market moves and they concentrate on valuation only. Jim Rogers has not sold a single share of his Chinese shares. If he thought he could time the market he would have sold and then try to buy back cheaper. Jim Rogers is a billionaire because he recognize what he can not do and should not do, and concentrate on what he can do and should do. That is concentrating on valuation and be patient, let the market play its timing game.
When most people are by-standers, it's time to jump both feet in to buy.
China's Greatest Trade Ever
seekingalpha.com/artic...
Speculation: Is China behind the $2.29T naked shorting of US T-Bonds? It's T for Trillions!!!
Safe Haven Investments: Imminent Danger and Opportunities
Thanks for the clarification. I meant to use Noah's Ark for an analogy, without elaborate the details.
I read "...and God resolved that he would never again curse the ground because of man, nor destroy all life on it in this manner. Man in turn was instructed never to eat any animal which had not been drained of its blood"
Wonder why all the red meat sold in grocery stores do not have their blood properly drained and they hence taste foul, betraying the Christian tradition. In China, a country without much Christian tradition, people care a big deal that blood of any slaughtered animal must be completely drained or they would not buy. It's also the tradition of many cultures. Just an interesting fact.
I shall read the Noah's Ark story again.
Gold in a Credit Crisis
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