When will Oil bottom? I guess when economic rational decisions lead to economic rational outcomes! So far, Saudi Arabia, Iran, and Iraq seem to be the only producers making economic rational decisions: they continue to raise production because price remains well over their marginal cost of production. But even within this rationality, there is irrationality: by all means don’t cut production, but why raise production, when it is not required – all it is doing is going into inventory and making a bad situation worse. For heaven’s sake, they could sell less Oil for more money simply by matching production with consumption. To be fair, the...
Those finicky Millennials; what audacity they have driving the entire economy? Back in November, I gave a TED talk highlighting the importance of socially responsible investing and its role as a concept that should really resonate with the younger crowd. Millennials have the power to change the direction of business RIGHT NOW if they would only seize the opportunity. During the day, I often keep CNBC on the TV in the background and throughout the day they interview billionaire CEOs and investors from time to time in order to get their take on the market. A common theme among most interviews is that Millennials are of the greatest interest t...
China’s stocks plunged to their lowest levels in 13 months amid continued concerns that capital outflows will accelerate as the economy slows and as support for the yuan depletes the nation’s foreign reserves. Major benchmarks on the mainland closed more than 6 percent lower on Tuesday. The Shanghai Composite Index plunged 6.4 percent to 2,749.79 at the close. The tech-focused Shenzhen Composite ended 7.1 per cent lower, also its biggest drop since January 7th and at the lowest level since September 30. All industry groups slumped, ranging from commodity companies to new-economy shares such as technology. It was the biggest one-day drop s...
The second round of French regional elections will be held this weekend. The first round last weekend saw the National Front do best in terms of popular votes and led in six of the twelve regions. The National Front is not simply anti-austerity, but it is anti-EMU. In regions that NF garnered more than 40% of the vote, the Socialists have withdrawn their candidate and urged their supporters to vote for the center-right candidate to boost the chances of defeating NF. Sarkozy, who heads up the newly-named center-right Republicans, refuses to make a similar concession. Nevertheless, when the votes are tallied, the NF is expected to ...
It seemed like only yesterday – it was 2011, in fact – that the International Energy Agency (IEA) published a report on the bright future of natural gas. Titled Are We Entering a Golden Age of Gas?, the report said how great everything looked for gas and liquefied natural gas (LNG) thanks to soaring Asian demand for the fuel. And for a few years demand did boom. In response, a number of LNG projects in the United States, Australia, and elsewhere were brought to the fore. But today, demand for LNG in key Asian markets is falling, sending prices spiraling downward. And major LNG projects around the world are under threat. It was a mere ...
With the “positive” jobs report that came out last Friday, most analysts now think the Federal Reserve will raise interest rates this month. Peter Schiff argues that the jobs report wasn’t really that positive considering the labor participation rate and the number of part-time workers. But he concedes that the rate hike may happen anyway, because Janet Yellen has changed the criteria she’s using to base her decision. On this edition of the Schiff report, Peter explains why the Fed has changed its tune, and why a hike, if it happens, isn’t the beginning of an upward trajectory. The Fed chairman is trying to minimize the importance o...
Next week we’d learn whether the Fed indeed gives us a December rate hike. Let’s take a close look at US Treasuries a week in advance of that decision. The yield on the 10-year note ended the day on yesterday at 2.24%, which is at the higher end of the year-to-date range of 1.68% to 2.50%. The yield on the 2-year note closed yesterday at 0.94%, a couple of ticks below its 0.96% interim high set on Thursday and Friday of last week. The first chart shows the daily performance of several Treasuries and the Fed Funds Rate (FFR) since 2007. The source for the yields is the Daily Treasury Yield Curve Rates from the US Department of th...
Since last June, “local investors” have been restricted to only being allowed to buy shares and disallowed from withdrawing cash from accounts. Those restrictions did not stop the stock market from collapsing further and today authorities have decided to lift those capital controls… the result – ASE has plunged below mid-Summer lows to its lowest since June 2009… authorities have decided to lift those capital controls Capital controls have been in effect in Greece since late June 2015. With their imposition came a three week bank holiday and the shutdown of the Athens Stock Exchange (ASE) until early Augus...
Is now the time for dividend investing? While the dividend investing style is almost always overlooked, it still has a place in many portfolios even though many consider it a ‘boring’ way to growth wealth in a portfolio. Sure investors often prefer growth securities that are increasing earnings or revenues, or securities with value metrics such as low PEs and modest debt levels, but now could actually be an interesting time for dividend investing. That is because markets are still near all time highs, but volatility is definitely returning. High dividend stocks can often be less volatile than their low-yielding or non-dividend pay...
We’re stuck in the middle of the range now: As you can see from Dave Fry’s Dow chart, we’ve been gyrating between 17,200 and 18,250 on the Dow for the entire year. From a mid-point of 17,750(ish), that’s just a 2.5% up or down move before getting pulled back towards the middle – other than the August flash crash which ripped us down to 16,000 – almost exactly 10% off the middle of the range. Range-bound markets can be frustrating to trade if you trade them wrong but it’s perfect for our “Be the House” style since we keep SELLING premium to all the suckers who think the Dow will go up or down m...