Tuesday, October 19, 2010

Americans Buying Guns In Preparation For Civil Unrest

Prison Planet.com
Monday, October 18, 2010

Americans are acquiring guns, silver and going on food stamps at record levels in reaction to the crumbling economy, trends indicative of a fearful public who are struggling financially and preparing for potential mass civil unrest in the aftermath of a total economic collapse.

FBI records and Google Trends research shows that firearms purchases are still at record highs, but that ammunition sales have leveled off, suggesting that a flood of first-time gun owners have rushed to protect themselves from the potential of higher crime and even civil unrest in the event of a widespread financial meltdown.

“That tells us that there are more first-time [gun] buyers coming in to buy firearms and that speaks to your worries about security. They buy a few rounds [of ammunition] first time, but they don’t buy more,” ConvergEx Group Chief Market Strategist Nicholas Colas told CNBC.

Interest in silver coins is also surging, with Americans looking for more affordable ways to protect their increasingly devalued dollar savings with many unable to afford soar away gold prices.

“Just two years ago, silver coin sales were on the magnitude of 1 million units a month, now it’s 3 million units a month,” said Colas.

Used car prices have also tailed off, a reflection of shaky confidence in the much heralded “recovery” of the U.S. economy. Meanwhile, Google searches for how to get food stamps have also skyrocketed. (more)

SP500 and Natural Gas Short Term Trend Charts

The broad markets along with metals have been on fire but in the last two weeks we have seen the sentiment become stronger. The extreme bullishness we are seeing has made it difficult for low risk swing traders to get in on the action simply because there have not been many sizable pullbacks. Instead the prices have been inching their way higher with very minor pullbacks before surging again.

The only way to take advantage of this type of price action in order to keep risk low is to take small positions when the market drops to the 5, 10 or 14 moving averages with a mental stop to exit the position if the market closes below the 14ma. Any position take up here should be small because the market is in runaway mode, meaning everyone is buying on the smallest of dips. The largest moves tend to be near the end of a trend which is why I feel this market could keep running for a few more weeks before taking a sharp plunge. (more)


Taking Stock in Farmland

Anyone that follows renowned investor Jim Rogers has heard him say forget the MBA and become a farmer. This is because he believes that food will be in short supply and prices will go much higher. He also thinks you should move to Asia as that is where the money will be made over the next hundred years. He is probably right on both, but for most people, just dropping everything to become a farmer is about as easy as moving the family to Singapore.

So can you buy stocks that generate most of their revenues from the farmland they own? Well, it is not easy, but below are a few companies that do.

Limoneira Company (LMNR) is one of the largest citrus growers in California and one of the largest growers of lemons in the United States. As you might have guessed, the lemon crop supplies the bulk of the agribusiness revenue followed by avocados and oranges. The avocado business can cause some large swings in the company's annual revenues as avocados only produce a large crop every other year. When doing your due diligence, make sure you understand if it is a big crop or small crop year for the avocado business. For instance, revenue from avocados was 75% lower in fiscal year 2009 when compared to 2010. Since this is the second largest crop, it is material. (more)

Armstrong Economics: Nice Try But No Cigar

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Chart of the Day: US and Japan Inflation


WHY COAL INSTEAD OF OIL… because coal is so damn cheap…coal is 98% cheaper than crude oil for the same amount of heat generated. In other words crude oil is 45 TIMES more expensive than coal to produce the same amount of energy as measured by BTUs. Specifically, the production cost of Exxon's oil is about $3.16 per million British thermal units (BTU). Compare this to the cheap price of energy produced by Peabody Coal, which costs just 7 cents per million BTU. That's barely more than 2% of the value of oil for an equivalent number of BTUs!

Therefore, it is an understatement to say COAL is grossly more economical compared with competing fuels like oil or natural gas, the latter's price per thermal unit similar to that of crude oil.

Furthermore, many US industries can use either oil or coal to provide the energy necessary to drive their machines. The vast Electrical Utilities industry is a perfect example. Consequently, when the rapidly rising price of oil makes it too expensive to economically fuel many industries, they switch over to CHEAP COAL…thus dramatically increasing the demand for coal. Correspondingly, the share price of coal miners, like PATRIOT COAL (PCX)…one of the largest coal producers in the US rapidly increases in value. Here's a perfect example: (more)

BNN: Top Picks

David Baskin, president, Baskin Financial Services, shares his top picks.

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Federal Reserve bailout of the $3 trillion commercial real estate industry. South Florida apartment building prices down 52 percent from peak.

If you think residential real estate is having problems, you should shift your gaze to the mammoth issues confronting commercial real estate. Little is mentioned about commercial real estate (CRE) in the mainstream media yet this is a $3 trillion market (or twice the annual GDP of Texas). Much of the problems in CRE are profound and pose systemic risks to the banking sector. While the current attention is on fraudulent paperwork on residential housing, the biggest and most hushed bailout of commercial real estate is occurring. The Fed directly buying up questionable mortgages from banks is an indirect form of bailing out CRE. Yet in some instances, the Fed has gone ahead and directly taken on the role as owner for places such as a mall in Oklahoma. While U.S. residential property prices have fallen approximately 30 percent CRE has fallen by 42 percent.

Let us take a look to see where prices stand today: (more)

Broke and Jobless: 85% of College Grads Moving Home

In yet another sign of the times, 85% of college graduates surveyed have reported that they will be moving home after they get their degrees:

Stubbornly high unemployment — nearly 15% for those ages 20-24 — has made finding a job nearly impossible. And without a job, there’s nowhere for these young adults to go but back to their old bedrooms, curfews and chore charts. Meet the boomerangers.

“This recession has hit young adults particularly hard,” according to Rich Morin, senior editor at the Pew Research Center in DC.

So hard that a whopping 85% of college seniors planned to move back home with their parents after graduation last May, according to a poll by Twentysomething Inc., a marketing and research firm based in Philadelphia. That rate has steadily risen from 67% in 2006.

“It’s peaking at levels we have not seen before,” said David Morrison, managing director and founder of Twentysomething.

While unemployment for college grads is 15% according to Bloomberg, we know for a fact that the overall rate of unemployment, per economist John Williams of Shadow States, is actually at around 22%.

It’s not just college students, it’s everybody - one in five able bodied Americans are out of work right now.

There is a reason that these numbers, especially for college grads, are peaking at levels we have never seen before: it’s because our economy is shambles with no clear recovery in sight. (more)

U.S. stocks target 2010 highs as banks rally

U.S. stocks on Monday rose to within striking distance of their 2010 highs, as better-than-expected results from Citigroup Inc. helped the beleaguered bank sector reclaim some lost ground.

The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 11,144, +80.91, +0.73%) gained 80.91 points, or 0.7%, to 11,143.69, its highest close since May 3. The blue-chip average’s highest close this year was 11,205.03 on April 26.

Leading gains on the Dow, Bank of America Corp. /quotes/comstock/13*!bac/quotes/nls/bac (BAC 12.36, +0.02, +0.16%) rose 3% and J.P. Morgan Chase & Co. /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 38.00, -0.20, -0.52%) gained 2.8%.

The S&P 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,185, +8.52, +0.72%) ended at 1,184.71, up 8.52 points, or 0.7%, with financials faring best and consumer discretionary performing the worst among its 10 industry groups. The gauge is less than 35 points from its year-to-date high.

The Nasdaq Composite /quotes/comstock/10y!i:comp (COMP 2,481, +11.89, +0.48%) advanced 11.89 points, or 0.5%, to 2,480.66. (more)


Gerald Celente: We're Living on Borrowed Time