Coal Is a Bargain for the Patient

Yesterday the focus of investors’ attention was on the newly declared dividend at Apple (NASDAQ:AAPL), helped by the highest level of homebuilders’ confidence in five years and another drive higher by the financial stocks.

At the close, the Dow Industrials had gained 7 points at 13,239, the S&P 500 rose 6 points to 1,410, and the Nasdaq gained 23 to close at 3,078. Volume on the NYSE retreated to 721 million shares compared to the burst of volume on Friday due to options’ closing day. Nasdaq traded 403 million shares. Advancers were ahead of decliners on both exchanges by about 1.7-to-1.

As one technician put it, “The market seems to be on autopilot.” In other words, the technical action remains bullish buoyed by a string of breakouts and accompanied by strong breadth and renewed buying in financial and
transportation stocks.

The S&P 500 broke to another multiyear high yesterday and will probably keep slugging along unless the upper support line at 1,400 is penetrated on a reversal. Traders should use that line as a stop-loss for any index-related short-term trades. A serious caution flag would fly if the 500 broke the bottom of the support zone at 1,375 to 1,400. I summarized the support and target areas for the various markets on Thursday and Friday, and I refer you to them for guidance.

Looking for Bargains

With Brent Crude Oil pushing $125 a barrel and gasoline prices rising each day, other sources of energy are again being considered. In this country, coal has fallen to less than 40% of the overall sources of power generation after being the main source for years.

Now with natural gas so cheap, many power plants are converting to that fuel. But that’s not the case worldwide. In fact, the U.S. Department of Energy expects global demand for coal to climb to 50% by 2035. That may seem a long way off, but the point is that total demand for coal isn’t shrinking. Thus, the currently ignored coal producers are probably bargains now.

Click to EnlargeThe Market Vectors Coal ETF (NYSE:KOL) contains stocks like Peabody Energy (NYSE:BTU) and Consol Energy (NYSE:CNX), which owns its own port and thus ships coal with lower costs. The ETF has fallen from over $50 last April to the low $30s — a bargain. Note the stochastic buy and the recent pickup in accumulation. For those willing to wait, this ETF is one of the ignored bargains.

Ellis Martin Report with Jim Sinclair and the Nuclear Economic Trigger-Breaking News

In this week's interview with Ellis Martin, noted analyst and gold guru James Sinclair outlines not a scenario but a reality that is here now. The US has pulled the nuclear economic trigger on India and Japan in the interest of coercing them to cease trading for oil with Iran. The gun is actually pointed at ourselves. Listen and hear why the dollar is ultimately doomed as these countries now look to the Yuan and Euro as a trading tool instead of the dollar. That's India and Japan...Russia....China.....Europe....etc.

John Williams: The Devil’s Choice−Inflation or Deflation: Beyond Control−Why hyperinflation is inevitable by 2014

03/20/2012

James J Puplava CFP with John Williams

click here for audio

A rumour concerning €1 trillion in German bad debt

By Golem XIV on March 20, 2012

When the Chief Market Analyst of FX Solutions, Mr Joseph Trevisani, in an interview on CNBC on 23rd Sept 2011,was asked about fluctuating currency values, his reply created a stir. What he said was that you had to look at what was going on in Europe – everyone then expected him to mention Greece – but instead he said,

“There was a story out in a German newspaper this morning talking about a trillion euros, supposedly, unconfimed. of losses hidden in German Banks.”

He offered nothing further but the implication was that big players believed that the one stable and solvent European nation, the nation that was supposed to bail out the others was sitting on a time bomb of its own. Which would mean that Germany, the nation that liked to lecture others about lying, was lying. Lying about a potential trillion euro hole in its banks.

The story was around for a while but then faded because no one could add much to it, let alone confirm it. Could it really be that German banks were hiding, and lying about, a trillion in undeclared bad debts? What debts could they be if they weren’t just the exposure to bad debts in Greece and the other southern nations we already knew about? And where could they have been hidden? No answers no story.

First the easy part – what could the debts be? It has been an open secret that the Landesbanks bought up two lots of debt as fast as the ink on the contracts would dry. The first was securities made from sub-prime US mortgages. A trillion Euros of this sort of debt was created and sold in 2004-5 alone. One senior banker at one of the banks which sold this debt told me the Landesbanks would buy these securities from them before the deals were even complete. Much as property speculators further up the same stream would buy the property developements before they were even built. That debt, I have been told more than once, is still there. Sachsen LB collapsed but others are still hoping something miraculous will hatch from their egg of shit if they just sit on it long enough.

This is a pattern of hopeful deceit that is rampant globally. So it really shouldn’t be a surprise that German banks are doing it too.

READ MORE

Eric Sprott & David Morgan - Financial sense newshour 17 March 2012

Eric Sprott & David Morgan - Financial sense newshour 17 March 2012 Eric Sprott & David Morgan on Silver Manipulation Mar/17/2012 Financial Sense Newshour : Eric Sprott and David Morgan Respond to CFTC Commissioner Bart Chilton on Silver Manipulation , In a "virtual" roundtable with Jim Puplava, Eric Sprott of Sprott Asset Management and David Morgan of Silver-Investor.com each respond to excerpts from Jim’s earlier interview with CFTC Commissioner Bart Chilton on silver price manipulation.

Chart of the Day - S&P Profit Margins

Jay Taylor: Turning Hard Times Into Good Times

3/20/2012: On the Verge of Lehman Brothers II? What are the Odds?