Archive - Sep 2010 - Blog entry

Despite lackluster market conditions, Molycorp managed to raise $394 million through its July IPO at $14/share. The company will use the funds to reopen the first rare earths production in the US since 1992, making it the largest such producer in the world outside of China. The hard asset crowd has been pouring in, making it one of the best equity launches of the year. An alternative energy, national defense, commodity, inflation play is a win-win-win-win. (MCP), (LYSCF).

The August jobs report provided a ray of hope, but much more needs to be done to repair the devastation caused by the financial crisis.

Through it's policies encouraging the offshoring of jobs, mergers, decreasing of economic activity to fight inflation, and allowing wealth to be concentrated in fewer and fewer hands, the government has channeled water away from U.S. jobs, creating the worsening unemployment drought ...

Another perspective on the NFP numbers.

Counter cyclical Keynesian spending financed out of savings, instead of debt. Too bad they didn’t think about that here! Keynesian economists unable to gain a hearing in the US sell their wares in Latin America. (ECH), (CU).

There are a lot of indicators that show continuing weakness in the economy which will lead to declines in output. Key indicators to me are the decline in factory orders and the build-up of inventories. I expect this trend to continue.

The head of a major Canadian pension fund says a Chinese sovereign wealth fund is interested in making a joint-bid with a Canadian pension fund for fertilizer-maker Potash Corp. of Saskatchewan Inc. Other pension funds, and PE funds, are also looking to possibly strike a deal...

The "talkers" are talking. I'm listening and trying to guess what it means.

Honestly, I cannot predict when Bernanke will unveil QE 2. All I can say is that it largely does not matter in the grand scheme of things. Yes, it will cause some short-term volatility. But ultimately QE 2 will simply be a catalyst that speeds up the processes that are already underway. Those processes are:

1) Systemic collapse
2) Destruction of fiat money
3) Massive loss of wealth

Vow to redouble their pixie dust spreading efforts ...

The 3 1/2 point sell off in the futures for the 30 year Treasury bond (TBT), at the end of last week was the sharpest drop in 18 months. All it took to set was for Q2 GDP to come in at 1.6%, and for Ben Bernanke to remain silent about any plans to flood the markets with more liquidity. After yields bottomed in 1956, bonds suffered negative returns for 30 years! Here come the 18% mortgages. One more equity puke out in September could easily give us the real thing. (TBT), (TMV), (TIPS).

Is another bout of severe performance anxiety on its way? I think so....

Heck of a job ...

The TF says all is well. I see it different.

Those who feel that CRE is a good buy now due to cap rate spreads over treasury yields are ignoring a) that treasuries are most likely in a bubble and b) this thesis if applied last year when spreads were even higher would have lost you a lot of money. Just because something costs less than it did when it was very expensive doesn't mean it is cheap. Being less broke then extremely broke still means that your broke, doesn't it???