Chinese investors are holding their collective breaths to see if the
banking crisis predicted two years ago by renowned Chinese economist Li
Zuojun will come to fruition in the next couple of months. Li's
astounding accuracy in predicting China's economy has led to him earning
the nickname "China's most successful doomsayer."
Though far from perfect, a lot of what he said here rings true. But the
interesting insight is that he forecasts that the incoming regime will
want to take its lumps early, in 2013, so as to minimize blame ("it was
the old crew's fault") and maximize praise for subsequent recovery...
He notes three other drivers (aside from this political one) including
external flows and credit expansion, and fears social instability should
the status quo be maintained...
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Saturday, June 29, 2013
Here’s How to Play America’s Energy Boom
For years, the United States was
known for being the world's largest energy-consuming nation, with
imports from abroad making up for its inability to produce enough fuels
for its appetite. Now, the U.S. is entering an energy renaissance, one that's leading to a marked shift in that position.
The International Energy Agency recently predicted
America's oil production will exceed Saudi Arabia's output by 2017, and
three years after that, it's expected to be a net natural gas exporter.
Major oil finds in California, North Dakota, Texas and Pennsylvania have
already put the country on a course toward energy independence, and
even more energy fields have yet to be proved out. Developing these new
resources and the infrastructure to transport, process and deliver this energy could take decades. Along the way, the biggest benefactor may well be master limited partnerships, or MLPs.
MLPs build, own and operate the
pipelines, barges, railcars and storage tanks to deliver natural
resources, and the opportunity in front of them is potentially massive.
In February, U.S. News & World Report quoted an investor who
estimated that more than $300 billon
of new infrastructure development is needed within the next decade to
accommodate the energy boon. For some time, this wasn't widely
recognized -- Warren Buffett bought railroad Burlington Northern Santa Fe for $26 billion a few years ago partly for this reason -- but that's changing. (more)
Shiller: a rare, honest economist, admits what most financial types never will
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How To Invest: Learn To Spot The Double-Bottom Base
The double-bottom base reflects an investor's harshest emotions:
crushing disappointment, capitulation and humiliation. If you can spot
this pattern, you can add jubilation to that list.
A double-bottom base looks like a "W" with a slightly lower right side than left side. That second bottom should undercut the first.
Why? That's where the market makes a fool out of us, flush ing folks out of a perfectly good stock before making its bull run.
Here's
what you need to see. First, the stock declines. Then it rebounds, but
not as high as the point where the first decline started. This is where
the feeling of hope surges that your stock is a winner.
Then it falls again. Many holders, losing patience with the stock, will bail out if it makes a new low. The next thing you know, it takes out that first bottom. So far all you have is a stock that's falling, and a lot of broken hearts.
But if the stock then reverses higher in increasing volume, you have the makings of a double bottom.
Crucially important, the apex of the "W" must stand above the 10-week moving average. It also must appear in the upper half of the entire structure.
If your double-bottom candidate fails to meet these two criteria, it's flawed. The all-important inflection point — the apex — is so low that any rush to buy would still be met by older longs grateful for a way out of a bad position.
Avid Technology (AVID) — a developer of software and hardware for digital movie production — built a classic in 2003. The first down leg appeared from Jan. 7 to Jan. 27, with the stock falling 22% to 18.76. (1)
The stock bounced to 23.46 by Feb. 11 (2) — above the 10-week line and, you'll see later, in the upper half of the entire yet-to-be-finished structure (although you don't know that yet).
Then came the second down leg, which took out the first by two full points and bottomed out March 7. (3) Other than an upside reversal with colossal volume, there's no reason to believe Avid would find any support at the second bottom's neighborhood. After all, it was sitting below the moving averages and as much as 31% below its 52-week peak.
Still, it started to rise. The stock showed significant volume on the upside. Still, you shouldn't get excited unless and until it takes out that apex price — 23.46 — plus a dime. As with all base breakouts, look for confirmation in the form of a volume surge.
Such confirmation didn't appear the first time Avid hit that apex, on March 26. The stock's feeble attempt fizzled.
But April 2 saw the stock soar 11% in double-paced trade (see a daily chart). That move proved to be the start of a run that lasted six months, and saw the stock rally 154% to as high as 59.77.
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A double-bottom base looks like a "W" with a slightly lower right side than left side. That second bottom should undercut the first.
Why? That's where the market makes a fool out of us, flush ing folks out of a perfectly good stock before making its bull run.
Then it falls again. Many holders, losing patience with the stock, will bail out if it makes a new low. The next thing you know, it takes out that first bottom. So far all you have is a stock that's falling, and a lot of broken hearts.
But if the stock then reverses higher in increasing volume, you have the makings of a double bottom.
Crucially important, the apex of the "W" must stand above the 10-week moving average. It also must appear in the upper half of the entire structure.
If your double-bottom candidate fails to meet these two criteria, it's flawed. The all-important inflection point — the apex — is so low that any rush to buy would still be met by older longs grateful for a way out of a bad position.
Avid Technology (AVID) — a developer of software and hardware for digital movie production — built a classic in 2003. The first down leg appeared from Jan. 7 to Jan. 27, with the stock falling 22% to 18.76. (1)
The stock bounced to 23.46 by Feb. 11 (2) — above the 10-week line and, you'll see later, in the upper half of the entire yet-to-be-finished structure (although you don't know that yet).
Then came the second down leg, which took out the first by two full points and bottomed out March 7. (3) Other than an upside reversal with colossal volume, there's no reason to believe Avid would find any support at the second bottom's neighborhood. After all, it was sitting below the moving averages and as much as 31% below its 52-week peak.
Still, it started to rise. The stock showed significant volume on the upside. Still, you shouldn't get excited unless and until it takes out that apex price — 23.46 — plus a dime. As with all base breakouts, look for confirmation in the form of a volume surge.
Such confirmation didn't appear the first time Avid hit that apex, on March 26. The stock's feeble attempt fizzled.
But April 2 saw the stock soar 11% in double-paced trade (see a daily chart). That move proved to be the start of a run that lasted six months, and saw the stock rally 154% to as high as 59.77.
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The Coming ECONOMIC COLLAPSE & Global FINANCIAL CRISIS
$59 trillion dollars in debt, how much interest on money borrowed from the private global FED RESERVE banks. How much hard assets or cash does that amount of money wield. How much bribery, influence or flat out ownership of the media, colleges, and both political parties, does that kind of power buy? The more debt we are in, the more money the FED makes on interest, from the money we borrow from them; via the IRS, and income taxes. Which they produce from thin air. What a racket!.
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Student-Loan Rates Set to Double
With just two working days left before the U.S.
government doubles a student-loan interest rate, lawmakers are haggling
over what to do about it.
The argument isn't over whether to allow the rate on the most popular type of federal loan to rise above 3.4 percent, the level set by law until July 1. It's about how much borrowing costs will increase.
"The likelihood of students keeping the interest rate they had for the last two years is diminishing by the hour," said Terry Hartle, senior vice president at the American Council of Education, the largest lobbying group for colleges and universities. "The outcome will be students will pay more than 3.4 percent in the short term," he said in a telephone interview. (more)
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The argument isn't over whether to allow the rate on the most popular type of federal loan to rise above 3.4 percent, the level set by law until July 1. It's about how much borrowing costs will increase.
"The likelihood of students keeping the interest rate they had for the last two years is diminishing by the hour," said Terry Hartle, senior vice president at the American Council of Education, the largest lobbying group for colleges and universities. "The outcome will be students will pay more than 3.4 percent in the short term," he said in a telephone interview. (more)
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Miners Can’t Operate With Gold Below $1500, Gold Fields Says
Bullion must rise to $1,500 an ounce for the gold mining industry to
be sustainable, according to Gold Fields Ltd. (GFI)’s Chief Executive
Officer Nick Holland.
“The industry is not sustainable at $1,230 an ounce, which is where the gold price is at the moment,” Holland said today in a telephone interview. “We’re going to need at least $1,500 an ounce to sustain this industry in any reasonable form.”
Gold entered a bear market in April on signs the U.S. economy was improving and fell further this month as Federal Reserve Chairman Ben S. Bernanke signaled he may slow bond purchases should the U.S. recovery continue. The plunging price of bullion is squeezing producers who spent $195 billion on acquisitions in a decade-long price boom that peaked in 2011, when prices reached $1,900 an ounce.
Continue Reading at Bloomberg.com…
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“The industry is not sustainable at $1,230 an ounce, which is where the gold price is at the moment,” Holland said today in a telephone interview. “We’re going to need at least $1,500 an ounce to sustain this industry in any reasonable form.”
Gold entered a bear market in April on signs the U.S. economy was improving and fell further this month as Federal Reserve Chairman Ben S. Bernanke signaled he may slow bond purchases should the U.S. recovery continue. The plunging price of bullion is squeezing producers who spent $195 billion on acquisitions in a decade-long price boom that peaked in 2011, when prices reached $1,900 an ounce.
Continue Reading at Bloomberg.com…
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Scary times hit mortgage shoppers
With mortgage rates rising at a record rate, it's become a scary time for mortgage shoppers.
Homebuyers got blindsided by an interest rate hike of more than half a percentage point Thursday, the biggest increase in more than 26 years. Now, many shoppers don't know whether they should scramble for a loan or wait on the sidelines.
Mike Brewer and his wife, Laura, shopped for a home for months before they finally gave up and decided to build a new place in Warrenton, Va. Since the new home won't be ready until November, however, they can't lock in a mortgage until September, said Brewer.
With rates rising by a percentage point over the past two months, they're already looking at an extra $200 a month -- and climbing -- on a 30-year mortgage.
"We had been hopeful that rates would stay low through 2013, which is why we made the jump when we did," said Brewer, who works as an IT director for a construction company. "Had we known the rates would spike, we might have changed our minds." (more)
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Homebuyers got blindsided by an interest rate hike of more than half a percentage point Thursday, the biggest increase in more than 26 years. Now, many shoppers don't know whether they should scramble for a loan or wait on the sidelines.
Mike Brewer and his wife, Laura, shopped for a home for months before they finally gave up and decided to build a new place in Warrenton, Va. Since the new home won't be ready until November, however, they can't lock in a mortgage until September, said Brewer.
With rates rising by a percentage point over the past two months, they're already looking at an extra $200 a month -- and climbing -- on a 30-year mortgage.
"We had been hopeful that rates would stay low through 2013, which is why we made the jump when we did," said Brewer, who works as an IT director for a construction company. "Had we known the rates would spike, we might have changed our minds." (more)
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