Archive - Mar 2015

Dalian Iron Ore prices have been cut in half in the last year (which must mean over-supply and not under-demand, right?). Amid China's growth target cut, Iron Ore prices there have crashed to below $60 - a record low - and that is having dramatic impacts across many regions. As we recently noted, Aussie gold miners are producing desperately to generate cashflow, but despite the booming housing market in some areas, as Reuters reports, the drop in iron ore and coal prices (the nation's 2 biggest exports) have led former boom towns to bust as "reality comes into the marketplace."

“It is only a matter of time,” says Nick Gartside, chief investment officer for fixed income at J.P. Morgan Asset management. The ECB is about to drive borrowing costs below zero for every government in the EMU and in the process lock in guaranteed losses for both itself and PSPP participating NCBs.

A brief dispatch from the MSM info sewer... 

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"Competitive devaluation” doesn’t actually work, as it is not a zero sum game (one country gaining at the expense of another) but rather currency “wars” subtract from the whole altogether (both countries lose). The entire point of currency destabilization is exactly that, and business transpires less and less under more extreme versions of instability – intentional or not. And to top it all off - No matter how you want to view all this, January was perhaps the worst month for US trade since the Great Recession.

When the same management teams that sell record amounts of their own company stock to the companies they control - companies which are now buying back record amounts of stock, this is not only the worst possible conflict of interest, it means, for lack of a better word, that the Nasdaq, bubble or not, has become the biggest circle jerk in history!

When Q1 results start to roll in for E&P companies, expect to see massive writedowns across the board as industry balance sheets will no longer benefit from calculating PV-10 based on inadequate SEC accounting rules.

During the last several years of uber-accommodation by the Fed, both stock and bond prices rose. It would not be surprising if both fell in price as the Fed proceeds with a June “lift-off”.   However, stocks might be the worse of the two performers. In a sense, markets are now beyond the control of the Fed.  They were able to change investor behavior for a few years, but the herd mentality is now becoming dislodged: “lift-off” could possibly cause a steep reversal. We expect SPX to dip below 2000 by the time of the March 18th Fed Meeting.

There’s simply a very strong feeling, if not conviction, in the western media, that they’ve won the propaganda battle. But two portraits of US girl power in Ukraine from the Guardian and Bloomberg that appeared over the past two days are just unbelievbable. Victoria Nuland and Natalie Jaresko should not be praised by the western media, they should be taken apart bone by bone, because the roles they play are far too shady to stand up to our alleged democratic principles.

We are happy to report that in February, the US economy added a recovery-validating 58,700 waiters and bartenders, the highest monthly increase in this minimum wage category in 18 months.

On a daily basis individuals jump into the financial markets with their "savings" in the hope of a thrilling ride. However, very much like skiing, inevitably you are going to take a tumble. Importantly, that "tumble" generally occurs when one becomes overly confident in their abilities and pushes the "risk" just beyond their inherent capabilities to react quickly enough. The result has tended to not be a pretty one. As we discussed earlier this week, there are many signs that suggest the current market environment has begun to push the outer boundaries of the "risk" curve. While this doesn't mean that the markets are about to "crash," it does suggest that individuals with a lesser skill set may want to be a bit more cautious.

Some must watch financial documentaries

Both sides held a gun to the nation’s head. The gun backfired.