Any college football fan knows that if your team is bound to lose
just one game during the season, it is far better for that loss to be at
the beginning of the season rather than the end. The chances of making
it to a top-tier bowl game are far better if the loss is a distant
memory in the minds of voters.
Indeed, a study by two professors at the College of Charleston
confirmed that college football coaches tend to rank their most recent
opponents -- and surprisingly, the most recent opponents of their alma
mater -- far higher than other schools.
Even more telling, in presidential elections, the movement of the
stock market in the two months leading up to election day has been able
to predict with 90% accuracy
whether the incumbent party would win or lose. And this amazingly high
correlation completely ignores the movements of the market during the
first 45 months of a president's tenure.
What exactly is going on here? (more)
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Saturday, February 2, 2013
Australia: The New Saudi Arabia?
Linc shares surged 24 percent after it told the Australian Securities Exchange (ASX) on January 23 that its shale oil assets in South Australia’s Arckaringa Basin had the potential to hold up to 233 billion barrels of oil equivalent (BOE) – an amount not incomparable to Saudi Arabia’s estimated oil reserves of 263 billion BOE.
The announcement sparked excitable headlines too, including the Advertiser’s AUD “$20 trillion shale oil find surrounding Coober Pedy ‘can fuel Australia’”.
Linc’s chief executive Peter Bond, a self-made mining magnate and among Australia’s richest executives, showed little reluctance to fuel media speculation.
“If it comes in the way the reports are suggesting, it could well and truly bring Australia back to [oil] self-sufficiency,” Bond told the Adelaide daily.
He said the discovery could potentially rival the U.S. shale boom, even at the lower end of estimates amounting to 3.5 billion BOE. (more)
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James Dines: Exclusive Look At His Stunning 2013 Predictions
from King World News
More
than 6 years ago James Dines said to me in an interview that before
this cycle ends all fiat currencies would go to worthlessness. This was
an amazing call on his part because within months of that interview the
globe began to see competitive currency devaluations erupt. Here is
what the legendary Mr. James Dines is now predicting for 2013 and what
the world faces going forward: “This is not the Great Recession the
government talks about. This is really a whole ‘New Social Order.’ It
includes a lot of my old predictions about ‘the coming end of the age of
jobs’ and also travel. We’ve seen soaring unemployment, and worldwide
travel is being inhibited by kidnapping and dangers of all kinds.”
Continue Reading at KingWorldNews.com…
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More
than 6 years ago James Dines said to me in an interview that before
this cycle ends all fiat currencies would go to worthlessness. This was
an amazing call on his part because within months of that interview the
globe began to see competitive currency devaluations erupt. Here is
what the legendary Mr. James Dines is now predicting for 2013 and what
the world faces going forward: “This is not the Great Recession the
government talks about. This is really a whole ‘New Social Order.’ It
includes a lot of my old predictions about ‘the coming end of the age of
jobs’ and also travel. We’ve seen soaring unemployment, and worldwide
travel is being inhibited by kidnapping and dangers of all kinds.”Continue Reading at KingWorldNews.com…
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Be Very Afraid When Fear Disappears From Markets
These days, many indicators suggest
we are in an extremely low-risk market environment. The Chicago
Board Options Exchange Volatility Index, or VIX, sometimes known
as the fear index, has reached a five-year low. European
sovereign-bond yields, long a source of anxiety, have eased
since their uncomfortable march higher in 2011, and the euro has
risen 13 percent from its 2010 low.
Options on currencies also suggest little fear in that market. In the U.S., the Standard & Poor’s 500 Index (SPX) rose 13 percent last year and the average forecast among Wall Street analysts is for a 9.4 percent gain this year, supported by growing profits and investor willingness to pay more for each dollar of earnings. In Europe, bank balance sheets are still fragile, but the rally in share prices inspired by European Central Bank President Mario Draghi’s “whatever it takes” pledge last summer left financial companies in far better shape to weather turmoil.
To be sure, meaningful progress has been made in escaping the abyss of systemic risk that enveloped the U.S. in 2008 and Europe in 2011. But policy makers should avoid the trap of reading too much into this stable environment. (more)
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Options on currencies also suggest little fear in that market. In the U.S., the Standard & Poor’s 500 Index (SPX) rose 13 percent last year and the average forecast among Wall Street analysts is for a 9.4 percent gain this year, supported by growing profits and investor willingness to pay more for each dollar of earnings. In Europe, bank balance sheets are still fragile, but the rally in share prices inspired by European Central Bank President Mario Draghi’s “whatever it takes” pledge last summer left financial companies in far better shape to weather turmoil.
To be sure, meaningful progress has been made in escaping the abyss of systemic risk that enveloped the U.S. in 2008 and Europe in 2011. But policy makers should avoid the trap of reading too much into this stable environment. (more)
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Is 2013 a Catalyst Year for the Uranium Market?
The Energy Report: During your last
interview with us in May, spot uranium was around $51 per pound
($51/lb), with some apparent stability at that level. Now spot is
~$42.50/lb. What's the source of the downward pressure?
Rob Chang: The excess inventory that was available for sale, most notably from Japan, has been going back into the market, depressing spot prices. Plus, the general market malaise surrounding the commodity contributed as well. But that has notably changed in recent months.
TER: Could a major short-term catalyst move uranium prices higher in the near future, or do you expect a gradual increase over time?
RC: This is the year the well-publicized U.S.-Russian HEU (highly enriched uranium) agreement, or Megatons to Megawatts program, is due to expire. Those 24 million pounds (Mlb) that were available to the market will effectively disappear. The question remains as to what the Russians will do with the remaining material. Our sources and thinking suggest the Russians are probably going to stockpile this material. It's not very cost-effective for them to downblend it, given the low uranium price environment. On top of that, it's a security-of-supply issue. We're forecasting a supply deficit up to 2025, and believe the Russians see the same thing. So it makes sense for the country to keep it in its inventory, rather than to downblend it now. There are no substitutes for uranium in nuclear plants, so to continue operating, it's really important to have a supply of uranium.(more)
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Rob Chang: The excess inventory that was available for sale, most notably from Japan, has been going back into the market, depressing spot prices. Plus, the general market malaise surrounding the commodity contributed as well. But that has notably changed in recent months.
TER: Could a major short-term catalyst move uranium prices higher in the near future, or do you expect a gradual increase over time?
RC: This is the year the well-publicized U.S.-Russian HEU (highly enriched uranium) agreement, or Megatons to Megawatts program, is due to expire. Those 24 million pounds (Mlb) that were available to the market will effectively disappear. The question remains as to what the Russians will do with the remaining material. Our sources and thinking suggest the Russians are probably going to stockpile this material. It's not very cost-effective for them to downblend it, given the low uranium price environment. On top of that, it's a security-of-supply issue. We're forecasting a supply deficit up to 2025, and believe the Russians see the same thing. So it makes sense for the country to keep it in its inventory, rather than to downblend it now. There are no substitutes for uranium in nuclear plants, so to continue operating, it's really important to have a supply of uranium.(more)
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TIPS: Understanding Treasury Inflation-Protected Securities
Inflation is a threat to every long-term investor, but with the right
investments, you can protect yourself from the loss of purchasing power
that inflation can cause. TIPS, or Treasury Inflation-Protected
Securities, are a valuable weapon in your inflation-fighting arsenal.
TIPS are bonds, but they have a key characteristic that most bonds lack: Their value is tied to rises and falls in consumer prices. Later in this article, you'll learn more about TIPS and how to buy them, but first, let's examine just how detrimental inflation can be if you don't fight it.
Why inflation matters
For several years, inflation rates have been fairly subdued, so many people don't remember just what inflation can do to your wealth. During the late 1970s and early 1980s, however, everyone got a firsthand introduction to the ravages of inflation. The oil shocks of the 1970s not only pushed gasoline prices sharply higher but also contributed to higher costs that brought on rising prices throughout the economy. With prices rising at a more than 10% annual clip from 1979 to 1981, it took less than a decade for prices to double, cutting the true value of every dollar you owned in half. (more)
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TIPS are bonds, but they have a key characteristic that most bonds lack: Their value is tied to rises and falls in consumer prices. Later in this article, you'll learn more about TIPS and how to buy them, but first, let's examine just how detrimental inflation can be if you don't fight it.
Why inflation matters
For several years, inflation rates have been fairly subdued, so many people don't remember just what inflation can do to your wealth. During the late 1970s and early 1980s, however, everyone got a firsthand introduction to the ravages of inflation. The oil shocks of the 1970s not only pushed gasoline prices sharply higher but also contributed to higher costs that brought on rising prices throughout the economy. With prices rising at a more than 10% annual clip from 1979 to 1981, it took less than a decade for prices to double, cutting the true value of every dollar you owned in half. (more)
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Japan 5-Year Bond Yields Touch Record Low on Auction Demand, BOJ
Japan’s bonds rose, sending the
five-year yield back to the lowest on record, after demand
increased at an auction of two-year notes and amid speculation
the central bank will expand debt purchases.
Bonds gained for the first time in four sessions after data showed Japan’s industrial production grew by less than forecast. The Bank of Japan (8301) could add further stimulus if warranted, Deputy Governor Hirohide Yamaguchi said today. The government sold 2.49 trillion yen ($27 billion) of two-year notes, attracting bids worth 10.13 times the amount on offer, higher than 9.73 in the previous auction.
“The auction passed without any problem since the BOJ will be buying two-year notes through its asset-purchase program,” said Makoto Suzuki, a senior bond strategist in Tokyo at Okasan Securities Co., one of the 24 primary dealers obliged to bid at government debt sales.(more)
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Bonds gained for the first time in four sessions after data showed Japan’s industrial production grew by less than forecast. The Bank of Japan (8301) could add further stimulus if warranted, Deputy Governor Hirohide Yamaguchi said today. The government sold 2.49 trillion yen ($27 billion) of two-year notes, attracting bids worth 10.13 times the amount on offer, higher than 9.73 in the previous auction.
“The auction passed without any problem since the BOJ will be buying two-year notes through its asset-purchase program,” said Makoto Suzuki, a senior bond strategist in Tokyo at Okasan Securities Co., one of the 24 primary dealers obliged to bid at government debt sales.(more)
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