The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.
Tuesday, September 29, 2009
Dilbert on Retirement Planning
As much as I like outside-the-box thinking, I don't expect to see this on the next CFP exam.
The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.
The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.
Monday, September 28, 2009
Quote Of The Day: German Car Industry
Every frat boy (U.S. government) loves a kegger (cash for clunkers), but the resulting hangover (fewer future sales) is another story. Cash for clunkers has come and gone. As expected, auto sales jumped. I personally finally benefited from the government's recent generosity (your tax dollars) and traded in my dear old '96 Ford F-150 for more of a family car. Would I have bought a new car without the incentive? Yes.
All of these government incentive programs are simply shifting sales/demand forward and arbitrarily rewarding some consumers at the expense of others, often for decisions they would have made anyways. They are clearly boondoggles and a waste of taxpayer money, and we're likely to see more of them since "free" money is a difficult drug to kick. We're not even close to a real recovery given that we haven't even completed Step 1 - admitting we have a problem.
The following comes from the latest piece by Evans-Pritchard:
The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.
All of these government incentive programs are simply shifting sales/demand forward and arbitrarily rewarding some consumers at the expense of others, often for decisions they would have made anyways. They are clearly boondoggles and a waste of taxpayer money, and we're likely to see more of them since "free" money is a difficult drug to kick. We're not even close to a real recovery given that we haven't even completed Step 1 - admitting we have a problem.
The following comes from the latest piece by Evans-Pritchard:
The risk for Germany is that the economy tips into a double-dip recession as emergency stimulus subsides. Its cash-for-clunkers scheme expired earlier this month after a rush of sales over the summer. The Centre for Automotive Research says sales will fall by a million next year in "the largest downturn ever suffered by the German car industry".
The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.
Tuesday, September 22, 2009
Chart Of The Day: Baltic Dry Index Revisited
Despite pervasive optimism that the global economy has left the recession behind and is poised for solid future growth, the Baltic Dry Index (BDI) continues to trend lower. Recall, the BDI is a price index which tracks the cost to ship dry commodities.
Iron ore and coal have been the two large swing commodities in recent years. These are the main products carried by the Capesize ships (the largest ships which are too big to pass through the Suez or Panama canal and must therefore go around the Cape of Good Hope or Cape Horn), represented by the blue line in the chart above.
The stockpiling of iron ore by the Chinese in the first half of 2009 led to a very nice rebound in Capesize rates (following a 96% collapse), but virtually all of the gain since the beginning of the year has now been given back. Capesize rates are now nearly identical to rates for the smaller Panamax and Supramax vessels. This seems to confirm the anecdotal evidence we've seen of pig farmers stockpiling copper as well as recently declining steel prices in China.
This weakness in the BDI does not support a resurgent global economy thesis, but it's just one variable. New ship deliveries, the rate of mothballing, and product stockpiling will all impact shipping rates along with demand. So, we must be careful not to read too much into it. Still, it would be foolish to ignore this real-time indicator of economic activity which has now been steadily falling for nearly 4 months.
The stock market is now pricing in a vibrant recovery and strong earnings growth. If this rally is to continue or if the gains are to be held, it's now "show me" time. Indicators such as the BDI which rely on more than just government stimulus to move their needle will need to start registering some impressive gains to substantiate the stock market rally. I suspect that investors will soon be forced to recognize that a deleveraging private sector won't be contributing much to economic growth any time soon. The question then turns to how long the government will be willing or able to sustain its immense stimulus measures.
The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.
Tuesday, September 15, 2009
Quote Of The Day: Robert Reich
This isn't new news, but it still makes the blood boil.
The seeds are once again being sown.
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The rewriting of history is well under way. The near global financial collapse really wasn't that bad. It all could have been prevented if only Lehman had been bailed out. Bernanke saved the world. The banks didn't really need taxpayer dollars. Goldman employees are still geniuses...Goldman won't repay taxpayers the $13 billion it never would have collected from AIG had we not kept AIG alive. (In one of the most blatant conflicts of interest in all of American history, Goldman CEO Lloyd Blankfein attended the closed-door meeting last fall where then Treasury Secretary Hank Paulson, who was formerly Goldman's CEO, and Tim Geithner, then at the New York Fed, made the decision to bail out AIG.) Meanwhile, Goldman is still depending on $28 billion in outstanding debt issued cheaply with the backing of the Federal Deposit Insurance Corporation. Which means you and I are still indirectly funding Goldman's high-risk operations.
The seeds are once again being sown.
The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.
Saturday, September 12, 2009
Poking The Chinese Dragon
It is very widely agreed upon that the trade wars that began with the Smoot-Hawley Act of 1930 were a significant contributor to the severity of the Great Depression. Obama's advisers are well aware of this, but this didn't stop the President from deciding to impose punitive tariffs on tires imported from China, increasing the tax from 4% to 35%.
Considering the desire of virtually every U.S. business to sell to the Chinese, the likelihood that China will be a substantial positive contributor to global GDP in the coming decades, the fact that the Chinese hold a significant amount of U.S. Treasury securities, and the notion that Chinese funding of our future deficits would certainly be helpful, it is clear that this move is being done simply to appease Obama's union support.
It's hard to imagine the Chinese will be pleased by this move. We're bound to see some form of retaliation from them before long. Of course, our politicians will be outraged by any Chinese retaliation. Let's hope this gets nipped in the bud quickly and doesn't escalate.
Evidence that this is simply a political ploy rather than a sound economic decision made with the best interest of the country in mind comes from a New York Times piece on this subject.
So, we're not upset that the Chinese are dumping their product at less than cost to steal market share. Apparently, we're just upset that the Chinese are selling a competitive product at a price Americans find attractive. If that's the threshold for tariffs, why aren't we slapping tariffs on every product China makes?
In the short-term, Obama may have won points with his union supporters, but at what cost? We're likely accelerating the loss of these manufacturing jobs. We're risking a trade war with the next super power. And, despite falling income and soaring unemployment, every American will now have the patriotic opportunity to pay more for their tires. The treadwear on the American taxpayer continues to increase.
This post was put aside for a day. As I was getting ready to send this out, I saw the following story from Bloomberg:
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Considering the desire of virtually every U.S. business to sell to the Chinese, the likelihood that China will be a substantial positive contributor to global GDP in the coming decades, the fact that the Chinese hold a significant amount of U.S. Treasury securities, and the notion that Chinese funding of our future deficits would certainly be helpful, it is clear that this move is being done simply to appease Obama's union support.
It's hard to imagine the Chinese will be pleased by this move. We're bound to see some form of retaliation from them before long. Of course, our politicians will be outraged by any Chinese retaliation. Let's hope this gets nipped in the bud quickly and doesn't escalate.
Evidence that this is simply a political ploy rather than a sound economic decision made with the best interest of the country in mind comes from a New York Times piece on this subject.
Also,The Tire Industry Association has opposed the tariffs, arguing that they will not preserve American jobs but will instead cause manufacturers to relocate plants to other countries where they can produce tires cheaply.
The decision signals the first time that the United States has invoked a special safeguard provision that was part of its agreement to support China’s entry into the World Trade Organization in 2001.Under that safeguard provision, American companies or workers harmed by imports from China can ask the government for protection simply by demonstrating that American producers have suffered a “market disruption” or a “surge” in imports from China.
Unlike more traditional anti-dumping cases, the government does not need to determine that a country is competing unfairly or selling its products at less than their true cost.
In the short-term, Obama may have won points with his union supporters, but at what cost? We're likely accelerating the loss of these manufacturing jobs. We're risking a trade war with the next super power. And, despite falling income and soaring unemployment, every American will now have the patriotic opportunity to pay more for their tires. The treadwear on the American taxpayer continues to increase.
This post was put aside for a day. As I was getting ready to send this out, I saw the following story from Bloomberg:
China to Probe Alleged ‘Dumping’ of U.S. ProductsIt's hard to blame the Chinese for retaliating. We'd certainly do the same had they acted first. The Chinese are most likely to target a value of American imports fairly equal to the value of Chinese tires being impacted. If we know what's best, we'll leave it at that and go back to squabbling over North Korea.Sept. 14 (Bloomberg) -- China announced a probe into the alleged dumping of American auto and chicken products, two days after U.S. President Barack Obama imposed tariffs on imports of tires from the Asian nation.
Chinese industries have complained that they’re being hurt by “unfair trade practices,” the nation’s Ministry of Commerce said on its Web site yesterday. The Beijing-based ministry is also looking into subsidies for the products, it said. It didn’t specify the imports’ value.
link to full story
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Chart Of The Day: Cantarell
Last year, I wrote about the likely peaking and production decline of some of the world's largest oil fields. The best example remains the once-giant Mexican Cantarell field. The following graph of production from Cantarell is simply stunning. Production from this one field has fallen one million barrels per day in just the last few years.
Much has been made lately of some recent exploration successes offshore Brazil and in the Gulf of Mexico. Many are claiming that these successes prove that the threat of Peak Oil is false. When it comes to the Peak Oil theory, however, the key point to remember is that it refers to easily recoverable oil. Higher oil prices will be necessary to support the very costly exploration and development efforts necessary in the deepwater and (eventually) Arctic frontier plays. The future production decline from the world's aging major oilfields will need to be replaced, and the most likely source will be much higher-cost less-traditional sources.
Disclosure: Aspera Financial, LLC is long a number of energy-related stocks and natural gas.
The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.
Much has been made lately of some recent exploration successes offshore Brazil and in the Gulf of Mexico. Many are claiming that these successes prove that the threat of Peak Oil is false. When it comes to the Peak Oil theory, however, the key point to remember is that it refers to easily recoverable oil. Higher oil prices will be necessary to support the very costly exploration and development efforts necessary in the deepwater and (eventually) Arctic frontier plays. The future production decline from the world's aging major oilfields will need to be replaced, and the most likely source will be much higher-cost less-traditional sources.
Disclosure: Aspera Financial, LLC is long a number of energy-related stocks and natural gas.
The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.
Thursday, September 10, 2009
Quote Of The Day: Jim Rogers
From a Financial Times piece:
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Unfortunately, too few people share this view. In fact, one of the key lessons learned by our experts seems to be that Lehman should have been bailed out. We've missed a wonderful opportunity to get this country back on a solid economic footing. Instead, we're simply laying the foundation for the next crisis as government debt takes the place of private sector debt.The idea that a problem of too much debt and too much consumption can be solved by more gigantic debt and consumption is ludicrous. Would that governments stop interfering with fundamental principles and let the market clean out mistakes! Marx is singing in his grave there in London as the US government now controls the auto, mortgage, insurance, banking, et al industries and he has not fired a shot. Letting Lehman fail was perhaps the only thing governments have done right during this whole drama.
The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.
Tuesday, September 1, 2009
Zambian Monkey Urine
This was too good not to pass along. Perhaps we could offer to house these chaps at CNBC World Headquarters.
From Bloomberg:
Zambian Monkeys Banned After President Urinated On, BBC Reports
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From Bloomberg:
Zambian Monkeys Banned After President Urinated On, BBC Reports
Sept. 1 (Bloomberg) -- About 200 monkeys are being moved from the grounds of Zambia’s presidency to a botanical garden after one of the primates urinated on President Rupiah Banda during a press briefing, the British Broadcasting Corp. said.
About 61 monkeys have already been moved to the Munda Wanga Botanical Gardens in the capital, Lusaka, the broadcaster said, citing an unidentified official.
Banda suggested that being urinated on by the monkey may bring him good luck, the BBC said, without elaborating.
The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.