Friday, March 29, 2013

Canadian Government Outlines Plans to Seize Private Bank Accounts?

[Ed. Note: Look at the financial statements of any Canadian bank. The largest liability on their books is 'Interesting Bearing Deposits.' Connect the dots...]
from Government of Canada
Chapter 3.2: Helping Manufacturers and Businesses Succeed in the Global Economy [...]
Establishing a Risk Management Framework for Domestic Systemically Important Banks [...]
The Government proposes to implement a “bail-in” regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants. [...]
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The Stock Market Crash of 1929: PBS Documentary

Watch The Crash of 1929 on PBS. See more from American Experience.

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The Perfect Emerging Markets Portfolio

Although the previous decade heralded the arrival of the BRIC (Brazil, Russia, India and China) nations, the current decade has a new class of emerging markets favored by investors. In fact, those markets, which are also known by a handy acronym -- CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa), have outperformed the BRICs in recent years.
I looked at the CIVETS nations [1] in the summer of 2010 and here is how they have performed since.

  (Market returns as measured by a leading country-specific ETF.)
At the time, I suggested investors steer clear of Egypt, and this portfolio would have gained 16% if Egypt were excluded, outperforming the BRICs by 23 percentage points or by nearly 10% on an annualized basis.
Forget emerging markets?
Yet in that time frame, the S&P 500 has gained a robust 49%. In effect, you would have been wise to simply ignore foreign markets during the past few years and save yourself a lot of trouble. But that's not the way this period should be viewed. Short-term phases of relative performance do not highlight long-term dynamics at play, as well as the opportunities for investors.
Yet the past few years have taught investors that these acronyms are helpful only to a point. The BRICs are substantial economies and hold more than roughly half of the world's population. The CIVETs can be seen as regional hubs -- countries such as Turkey and South Africa conduct a great deal of trade with their neighbors.  (more)

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Start/Buy A Business Now

from Financial Survival Network
Michael Busch has started new businesses, bought existing businesses on the market and out of bankruptcy, and is an expert on purchasing franchises. He’s helped thousands become entrepreneurs and he believes that under the current economic conditions, it’s time for you to do it. There’s lots of prep work required, but once you get started, you won’t be able to kick the habit. There’s nothing more exciting and challenging than running your own business. And it may be your only path to financial salvation.
Click Here to Listen to the Audio
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Financial Astrology: Canadian Banks at Risk?

The TSX has been very neutral since the end of January, perhaps signaling consolidation for a breakout or the eerie calm could turn into a sudden storm that no one was expecting or prepared for.  While everyone is distracted with Cyprus and Europe, Canada could have it’s own mysterious banking scandal.  Uranus is square Canada’s Sun which could bring a shock to the nations financial security near April 22nd.  With Neptune Square Canada’s natal Mars beginning March 30th there is a risk for unusual financial flows out of the country.  May 10th-11th could bring an explosion or natural disaster.

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USDA Acreage & Stocks Report Summary

The USDA issued their quarterly March 1 stocks report and first seasonal Planting Intentions Report which outlines spring planting intentions for the U.S. farmer.
Acreage Estimates (2013/14):
Corn                     97.3 mln acres (+ 0% vs. 2012)
Sorghum               7.62 mln acres (+ 22 %)
Oats                     2.90 mln acres (+ 5 %)
Soybeans                     77.1 mln acres (+ 0 %)
All Wheat             56.44 mln acres (+ 1 %)
   Winter              41.988 mln acres (+ 2 %)
   Other Spring     12.70 mln acres (+ 3 %)
Rice                       2.61 mln acres (- 3 %)
Canola                  1.65 mln acres (- 6 %)
Soybeans              77.1 mln acres (+ 0 %)
Sunflower              1.684 mln acres (- 12 %)
Cotton                  10.02 mln acres (- 19 %)

Give the current prices of Dec corn $ 5.37 1/2, it is not too surprising that we see a similar acreage number for corn in 2013/14.  What is interesting is that the southern states (AL, AK, FL, GA, KY, LA, MS, MO, NC, SC, TN, TX, VA, WV) have increased their cumulative acreage to 12.459 mln, which is 12.8 % of total U.S. acreage for corn, vs. last year which was only 11.9 %.  Prices for new crop corn were at similar levels during planting season, so I believe that we will see early bushels in Aug/ Sept coming to the market from these states (AGW with weather) from corn & sorghum acres.  Texas is expected to have 3 mln acres (+ 30 %) of milo going into the ground in 2013/14 which will compete with corn during Aug/Sept.  I believe that Sept/Dec corn spread will trend towards a carry vs. currently at 24 cent inverse.  I also believe that, assuming we get decent June weather, U.S. carryout could gravitate towards 2.0 bln bu +.

As for the wheat acres, USDA is projecting a slight increase of 2 % vs. last year for winter wheat acres. However, as we look into the HRW country, most of the heavy hitters in production like OK, TX, KS, NE, SD, MT, and CO are actually going to have fewer acres by 2.0 % at 27.400 mln.  The gain is all in the SRW country for about 24 % increase in major states like AR, IL, IN, KY, MI, MO, NC, OH, TN, and WI.  All going well with weather, I believe that spreads in the new crop months will start to widen out July-forward for both Chicago and KC.  I believe we could also see something similar in Mpls but spreads have already been widening in U/Z there for a while now, so it is somewhat limited as full carry is 26 cent vs. 9 cent carry currently.

The oilseed complex looks a little more interesting as it seems from the USDA forecasts that all competing oilseeds (including canola, sunflower, peanuts, ottonseed and soybeans) will have fewer acres overall dedicated to their production.  Soybean acres is expected by USDA to be unchanged vs. last year.  This could make a rather interesting scenario come this summer and fall in my opinion.  An already tight stocks scenario for the U.S. oilseeds balance sheet is our reality now as we have seen spreads narrow in soybeans and canola over the recent months due to smaller U.S. crop and South American logistical problems.  I still believe that spreads in soybeans and meal will continue to narrow due to tight supplies in the coming months.

Cotton acres are forecasted to reach 10 mln for 2013/14, which means I believe that cotton will probably have to travel higher in order to buy acres away from other commodities like corn & soybeans.  We have seen consistently strong export sales to China and other destinations for U.S. cotton over the last several to keep the N/Z inverse near 3.00 cent, which typically starts to erode as competing origins usually take over (i.e. Australia, Argentina and Southern Hemisphere origins).

 This has not happened quite yet, so I believe we will continue to see cotton travel higher and spreads narrow.

For all intents and purposes, it seems that the stocks report for grains was bearish as the numbers came out this morning as final results were higher than market expectations-
CORN               5.398 bln bushels
SORGHUM        91.391 bln bushels
ALL WHEAT      1.234 bln bushels
SOYBEANS       0.999 bln bushels

Still what was interesting is that the K/N in corn held its ground very well.  I still believe that nearby corn and soybean spreads will hold their ground currently as farmers will probably, in my opinion, shut off the selling spicket with this downdraft in corn and soybean prices.

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