$20 oil 'is still possible': Dennis Gartman

The recent rebound in oil should not be seen as a sign that the price has reached a bottom, influential investor Dennis Gartman told CNBC Tuesday, warning that $20 per barrel was "still possible."

"I actually doubt that we have (hit a bottom) what we've seen in the past week and a half or two weeks is a substantive rally from the lows but what is depressive to me is the fact that the carrying charge has not done what one would want to see the carrying charge do in a rally," Gartman, the author of the "Gartman Letter" told CNBC's "Worldwide Exchange" Tuesday.

"We've seen the market continue to have a large contango (where people are willing to pay more for a commodity at some point in the future than the actual expected price of the commodity) and crude continues to bid for storage," Gartman said.

Gartman illustrated his point with a reference to the oil storage hub in Cushing in Oklahoma where an estimated 2.3 million barrels of oil is stored in tanks , according to oil service company Genscape, and "huge numbers of ships out on the water" also being used to stockpile oil.

"In that environment it's very hard to think that this is anything more than a much-needed technical bounce and any further $1 or $2 rally in crude oil probably should be sold. I think the lows have not yet been seen and maybe $20 a barrel is still possible."

Gartman's comments come after Citigroup published a report on Monday stating that oil prices - which have fallen 50 percent from around $114 per barrel last June to currently trade around $57 - could fall as low as $20 per barrel .

"It's impossible to call a bottom point, which could, as a result of oversupply and the economics of storage, fall well below $40 a barrel for WTI, perhaps as low as the $20 range for a while," Citi's head of global commodities research Edward Morse said in the report Monday. "The recent rally in crude prices looks more like a head-fake than a sustainable turning point."

The comments come amid a number of reports that signal a slow recovery in oil markets. On Tuesday, the International Energy Agency said that while the rebound in prices of late showed there was "light at the end of the tunnel," it "could take years" for the market to rebalance .

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The Canadian housing market – in charts

1) Canada’s housing market is 63% overvalued relative to its historical average…

2) Home prices in Vancouver are more expensive than they are in Sydney, London, and New York…
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Senior Housing Properties Trust (SNH): An Undervalued REIT With a Nice Dividend

Wouldn’t it be nice to find a high-yielding investment that’s set to prosper from a powerful, long-term trend?
Such a prospect would be quite valuable in today’s challenging investing environment – especially given the dearth of real income opportunities.
While we’re at it, what if this firm was trading at a discount relative to its better-known competitors? (more)

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The Companies Bob Moriarty Loves for the Long Term

by Karen Roche
The Gold Report

The rapid and massive response when the Swiss unpegged the franc from the euro will ripple across the hedge fund, brokerage and financial systems. It also will infect other currencies, according to Bob Moriarty of 321gold.com. Gold, he believes, will be the last man standing. In this interview, he tells The Gold Report where he is looking for love among midtier gold and silver stocks and explains why he has no love for overpaid CEOs.

The Gold Report: The Swiss National Bank surprised the world by unpegging the franc from the euro. You wrote that you suspect this will be identified as the beginning of the end and that when the derivatives market blows up, it will take down billions of dollars in hedge funds. Is this the beginning of the end of derivatives and hedge funds or the beginning of the end of something bigger?

Continue Reading at TheAuReport.com…

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Is It Time to Buy General Motors: GM Company Stock?

Is General Motors (NYSE: GM  ) stock a buy right now?
It may seem like an absurd question at first glance, because GM had a very tough year in 2014.
Its announcement last winter of a series of recalls that should have been taken care of years ago triggered a big public outcry. Just a few weeks into her tenure, new CEO Mary Barra was faced with lawsuits, heavy fines, harsh lectures from regulators, Congressional grillings -- and a federal criminal investigation that will probably require a hefty cash settlement to resolve. (more)

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Closed-End Funds on Sale

In addition, US stock prices are very high, reflecting economic optimism, while junk bonds (which are similarly exposed to economic fundamentals) are reflecting pessimism.
Investors who are way over-allocated to US stocks should consider trimming them and adding to higher-quality junk-bond closed-end funds (CEFs), which I believe offer commensurate expected returns for lower risk.

A nice bonus is that some of these CEFs may be experiencing yearend tax-loss selling, which will reverse soon. If you’re a more tactical investor, exploiting CEF discount reversion can add a couple of percentage points to your total return.

There are plenty of interesting opportunities. Foremost is PIMCO Dynamic Credit Income (PCI), which, as of this writing, is trading at a discount of more than 10%. Its earnings yield on current market price is around 11%.

I estimate its expected real return, assuming no discount changes, is around 5%-6%, which is higher than the US stock market’s expected real return of 3%-4%.

An encouraging development was lead manager Alfred Murata’s purchase of 10,000 shares at an average price of $21.94 per share on Dec. 4, bringing his total shares owned up to 40,000, or about $850,000 at today’s market prices.

This is probably chump change for Murata, but it’s still a useful signal. PIMCO insiders tend to buy shares at favorable prices, usually when their CEFs are trading at big discounts.

For investors who crave other ideas, I’ve listed some solid to excellent CEFs that are trading at attractive relative and absolute discounts. You should, of course, investigate these funds further before buying.

AllianceBernstein Global High Income (AWF)
BlackRock Debt Strategies Fund (DSU)
DoubleLine Income Solutions (DSL)
LeggMason BW Global Income Opportunities (BWG)
MFS Charter Income (MCR)
MFS Multi-Market Income (MMT)
Prudential Global Short Duration High (GHY)
Prudential Short Duration High Yield (ISD)
Western Asset Global High Income (EHI)
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This Is What Gold Does In A Currency War, Australian Edition

Australia just fired a serious shot in the currency war by cutting its overnight lending rate to a record-low 2.25%.

With the aussie as a result tanking, local holders of bank accounts and cash are quite a bit poorer than they were at this time last year. But owners of gold are doing just fine. While the metal is falling again here in the US (which is at the moment trying to withdraw from the currency war), it’s up about 20% in the past three months in countries like Australia that are on the offensive.

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