Gold trader
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RED ALERT, CAN'T BUY ANY GOLD COINS OR SILVER HERE IN BELGIUM !!!
OUT OF STOCK !!!
Good defensive play.
Gonna follow it
Gold May Double in Price as Paper Gold Trade Collapses
Within the gold complex, there is a disparity between the paper market and the physical market, notes Jurg Kiener, CEO of Swiss Asia Capital. He tells CNBC's Maura Fogarty & Rebecca Meehan that if the paper market collapses, gold prices may double very quickly.
http://www.cnbc.com/id/15840232?video=880574352
US Mint halts some American Eagle coin production
http://africa.reuters.com/metals/news/usnN07435260.html
Gold May Double in Price as Paper Gold Trade Collapses
Within the gold complex, there is a disparity between the paper market and the physical market, notes Jurg Kiener, CEO of Swiss Asia Capital. He tells CNBC's Maura Fogarty & Rebecca Meehan that if the paper market collapses, gold prices may double very quickly.
http://www.cnbc.com/id/15840232?video=880574352
US Mint halts some American Eagle coin production
http://africa.reuters.com/metals/news/usnN07435260.html
Gold May Double in Price as Paper Gold Trade Collapses
Within the gold complex, there is a disparity between the paper market and the physical market, notes Jurg Kiener, CEO of Swiss Asia Capital. He tells CNBC's Maura Fogarty & Rebecca Meehan that if the paper market collapses, gold prices may double very quickly.
http://www.cnbc.com/id/15840232?video=880574352
US Mint halts some American Eagle coin production
http://africa.reuters.com/metals/news/usnN07435260.html
A Golden Buying Opportunity
It might be impossible to catch a falling knife, but given a company's fundamentals, it can be possible to see when current market sentiment regarding a company's future earnings power has reached a panic-level peak. Shares of Freeport-McMoRan Copper & Gold(FCX Quote - Cramer on FCX - Stock Picks) fall perfectly into that category.
Freeport-McMoRan, which is currently trading for $45, hit an all-time high of $126 per share in mid-May. Additionally, from Sept. 26 to the close on Friday, Oct. 3, shares have fallen from $65 to $45, down a whopping 35%, as the great commodity unwind takes place.
In our view, this hideous decline in shares of Freeport-McMoRan represents a generational buying opportunity.
Freeport-McMoRan is one of the world's largest copper, gold and molybdenum mining companies in terms of proven reserves and production levels. The company has worldwide reveres of copper of around 90 billion pounds, 1.8 billion pounds of molybdenum and 41 million ounces of gold, with production levels since mid-2008 of 4.35 billion pounds of copper, 85 million pounds of molybdenum and 1.8 million ounces of gold. In 2007, mining revenues by commodity were comprised of 78% copper, 12% molybdenum and 10% gold. In mid-2006, Freeport and Phelps Dodge announced that they signed a definitive merger agreement under which Freeport would acquire Phelps Dodge for approximately $26 billion dollars in cash, creating the world's largest publicly traded copper company.
http://www.thestreet.com/_yahoo/newsanalysis/stockpickr/10441035.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
UNREAL
Forward P/E (fye 31-Dec-09) 1: 1.96
Price/Book (mrq): 0.25
Freeport-McMoRan Copper & Gold (FCX: NYSE) By Friedman Billings Ramsey ($43.71; Oct. 7, 2008)
WE ARE UPGRADING Freeport-McMoRan Copper & Gold (ticker: FCX) with a view that the stock is oversold and that the risk/reward is now compelling. Valuation multiples have contracted significantly, and free-cash generation is strong even if copper prices were to contract further.
As a result, we are upgrading to Outperform from Market Perform, but we are lowering our price target from $115 to $85
http://online.barrons.com/article/SB122335340360010903.html?mod=yahoobarrons&ru=yahoo
CRAMER "RUN AWAY" !!!!!!
The global financial crisis deepened again today as shares in British banks plummeted by up to 40 per cent and 300,000 British savers were blocked from accessing their money in the Icelandic bank Icesave after it collapsed.
http://business.timesonline.co.uk/tol/business/economics/article4898553.ece
Financial Crisis: Rush for gold as savers queue for bullion
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3123775/Financial-Crisis-Rush-for-gold-as-savers-queue-for-bullion.html
SEC Says Short Selling Ban Ends Wednesday Evening 8 October
Reuters
SEC short-selling ban to expire Wednesday night
Fri Oct 3, 2008 5:34pm EDT
WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission announced on Friday its ban on financial stock short-selling will expire at 11:59 p.m. ET on Wednesday, October 8.
Earlier in the week, the SEC said the ban would expire three business days after a $700 billion federal bailout bill was enacted by Congress. The emergency ban was part of a series of government measures designed to restore confidence in battered markets and the ailing financial system.
Are you ready for the Gold Rally ?
My WAG for 33,333,333 post is...
November 6th 2008 7AM
There is no exit plan for them....
If the dollar go back down, we may have a 20% Rally here.
Here in Belgium most of Gold resellers are out of stock.
I bought just before the rush.
Everybody here expect 2000$/once in 2009 and 5000$/once in 2012
Folks, I can't elaborate too mutch but....
You must know that AUY is under heavy manipulation.
I'm regrouping my euros to be ready to jump on AUY once they will let the dollar drop.
25$ in 2009 is my target.
I'm looking for a good CALL.
Continental Resources
"[It's in the] more aggressive growth end of the spectrum.
They also have some of the best acreage in the Rockies and is one of the most rapidly growing oil producers in the E&P space right now."
http://www.cnbc.com/id/25740025/?__source=yahoo|headline|quote|text|&par=yahoo
Somthing wrong here...
Physical is very diffult to find, while chart are selling we're going down.
http://www.netcastdaily.com/broadcast/fsn2008-1004-1.mp3
Somthing wrong here...
Physical is very diffult to find, while chart are selling we're going down.
http://www.netcastdaily.com/broadcast/fsn2008-1004-1.mp3
Interview Frank Holmes
The Goldwatcher:Demystifying Gold Investing
http://www.netcastdaily.com/broadcast/fsn2008-1004-2.mp3
Interview Frank Holmes
The Goldwatcher:Demystifying Gold Investing
http://www.netcastdaily.com/broadcast/fsn2008-1004-2.mp3
In recent weeks, we have seen the worst sell-off of commodities in the history of commodity trading. The magnitude and viciousness of the sell-offs made many traders wonder whether a slowing global economy could mean commodities are no longer bullish fundamentally.
These commodities sell-offs are precisely synchronized , which subject them to suspicion of market manipulation and government intervention. Grains, precious metals, base metals all move up together one hour, then all fall off a cliff the next hour.
As vicious and relentless as recent sell-offs have been, there has been absolutely no fundamental change in the multi-year commodities boom and dollar bearishness. It is all just inherent market volatility which naturally exists for any commodity in short supply.
The volatility is due to the presence of too many market participants chasing too narrow a market. The narrower the market, the tighter the supply. The greater the amount of people involved in a particular sector, the more extreme the volatility we will see in that market place. Gold is less volatile than silver because the silver market is much narrower than gold. Palladium has been more volatile than platinum or silver because the palladium market is even narrower.
It is a known fact that when supplies are abundant, prices tend to be very stable over a long period of time, and when supplies are tight, prices tend to shoot up rapidly, then drop viciously, only to bounce back and shoot up even more. Rhodium and cobalt prices are very good recent examples. As you might remember, I recommended cobalt as a better silver and pitched OM Group (OMG) as a cobalt play.
Why must tight supply be associated with extreme volatility and abundant supply lead to flat prices? Because when the supply is abundant, there will be abundant inventory at every segment of the supply chain, buffering any price shock and smoothing out any price fluctuation. Producers will be able to plan in advance and adjust production to meet the level of demand, based on price movement and their inventory levels.
But in a tight supply situation, inventories are depleted, which often leads to panic buying and hoarding by end users, and thus skyrocketing prices. Then the buyers think the price is too high and hold off on further purchases. Sellers suddenly find their buyers have disappeared, so they slash prices to attract new buyers, which actually drives all buyers further away as they wait for even better deals.
Speculators who were attracted by the tight supply further add fuel to the volatility by joining the bids on the rally side and participating in the panic selling as prices go down. Eventually prices fall to an extreme bottom, rewarding savvy investors who had patiently made purchases during all the selling near the bottom.
At this point, industrial users who have depleted their hoarded inventory figure the price has bottomed out. They start to buy, and suddenly find there is no supply because savvy investors have snapped up all the available supplies. And so, the panic buying begins again bringing on another round of strong rallies and vicious sell-offs.
BHP Billiton (BHP)'s recent cobalt sales history is a textbook example, as buyers on August 22, 2008 suddenly all jumped in together after waiting on the sidelines for months. I watched the $24/pound price tag that day and wished I'd had enough cash to buy, but the minimum order was two metric tons.
I wondered if during recent platinum and palladium price free fall, there might have been a few big savvy investors quietly loading up on all the actuall metal being sold off. I know Jim Rogers likes palladium. I know George Kaiser loves palladium as a long term investment. He's owned almost a majority stake in North American Palladium (PAL) for years, and recently increased his stakes.
Metals analysts such as Jefferey Christian of CPM Group are very bullish on PGM metals. I know Norilsk Nickel (NILSY.PK), the world's dominant palladium producer, pushed for direct negotiation between President Bush and President Putin to reach the deal to acquire a majority stake in Stillwater Mining (SWC) in 2003. Their strategic goal for global domination of the palladium market is clear.
The case for a palladium super bull cycle is so indisputable, SWC's presentation at 1:30pm on Sep. 9 presents very concrete data and facts as to why the PGM market fundamentals remain bullish. Latest news of South Africa's -32.8% PGM production shortfall should make the bullish case even stronger.There have to be some big players who are interested in the metals and would love to buy at lower prices.
So I am not too worried about the recent price plummet. Someone somewhere must be planning to corner the palladium market in order to reap huge profits. The supply is so tight, the global palladium market so narrow, anyone with a decently high net worth could corner the market for profit as the reward/risk ratio is just so irresistable.
Of course, when it comes to cornering markets, the most successful case is De Beers, which for over a century has successfully cornered the global diamond market. Not only did they monopolize the global diamond market, they also created a gigantic consumer market for diamonds. They purchase virtually all of the world's raw diamond production and hold it in inventory, then release the supply to the market in carefully controlled quantities, creating artificial shortages to raise prices.
But De Beers has recently been under threat from a privately held company called Apollo Diamond, which produces artificially grown diamonds that could be sold in greater quantities and at far lower prices then De Beers' offerings. Apollo Diamond's technology has the potential to take De Beers' well known motto, ''A Diamond is Forever,'" and transform it into 'A Diamond is for Everyone."
Not wanting to ruin the market price and their huge profit potential, Apollo Diamond has been very cautious, releasing a limited amount of its lab grown diamonds to test the waters, at a price not much cheaper than the natural ones.
The Apollo Diamond technology, based on Chemical Vapor Deposition [CVD], is nothing new and nothing proprietary. The only secret is the right combination of gas compositions, temperature and pressure, which the company discovered through trial and error.
Since Apollo Diamond has already demonstrated that it can be done, anyone with a decent amount of money can put together a team of CVD experts and figure out the correct recipe on their own, thereby breaking Apollo Diamond's short lived technology monopoly on growing jewelry grade, clear-colored diamonds. The huge profit potential will bring in competition, bring down prices and ratchet up availability.
All this will do wonders for platinum and palladium, since one cannot wear a loose diamond without a setting. And the setting needs to be something precious and long lasting. Gold's yellowish color does not enhance the beauty of a crystal clear diamond. And white gold is unappealing because it's not pure. Therefore, for many cultures as well as individuals, the only acceptable, pure, white precious metals that do not tarnish are platinum and palladium.
Current developments in the jewelery arena mean that demand for platinum and palladium will outstrip current global supply , as annual global platinum and palladium production requires about 0.035 grams of each of the metals for each person on earth. One diamond ring probably will require about 5 grams of the metals.
As the US dollar is being desperately pumped up, and precious metals as well as all other commodities are in free fall, many wonder if we're facing a deflational future or an inflational one. I think the diamond provides the correct answer. While speculation knocks down precious metal prices, it hasn't gotten to diamond prices. Read the Diamond Registry for the big picture. I recommend reading The "Diamond Lining" To All the Clouds:
This is the business that has survived numerous recessions because it is a business based on love, and love endures, and even grows stronger, through hard times. People will always fall in love, and get engaged and married — and when they do, they will mark those events with diamonds.
No wonder China's diamond imports have tripled in a year and are still growing rapidly. No wonder global diamond prices have increased 30% from a year ago and are still growing rapidly. There is no such thing as a price correction in diamonds, there is no paper diamond trading on COMEX, and diamonds are purchased not by hedge funds but by the general populace, who look to diamonds not just as a symbol for love, but also as an investment and a way of preserving wealth in this inflational environment. Tiffany & Co.'s (TIF) rapid sales growth reflects that reality, as does this report from Harry Winston Inc. (HWD).
Shame on the talking heads who spread the myth that higher platinum and palladium prices suppressed the jewelry demand. Have they looked at the booming diamond demand? A typical platinum diamond ring costs any where from $2000 to $5000 or higher, with 90% of the cost in the diamond.
The metal cost is a mere fraction, $200, even at $1500 per ounce for platinum. If it's palladium, the metal cost of $400/oz palladium is only $65 per ring, compared with the $2000-$5000 price tag for the whole diamond ring. If the Chinese are buying three times more diamonds at 30% higher diamond prices, then people can afford 300% higher platinum prices when buying a platinum diamond wedding ring for the commitment of a lifetime.
So I believe platinum, and particularly palladium, are the best physical assets to buy at the currently ridiculous low prices which are now below mining costs. Stocks of the only primary palladium producers in the world, SWC and PAL, are now the best stocks to buy.
And, amid the looming hurricane Ike threats, I think now is an excellent time to buy oil and natural gas players. I recommend buying (USO) and (UNG). I also recommend buying (NGAS) and (CHK). I bought them for myself, but as always I encourage people to do their own due diligence. The price of natural gas has fallen to below the production cost of some of the producers, so it is a solid bottom. Any time a commodity falls through the production cost, it is pretty much a bottom.
Likewise, as silver and gold prices drop to below many producers' production costs, it is now near bottom, thus time to buy some of the most heavily punished gold and silver players. My favorites are (PAAS), (HL) and (SIL). Of course I bought them recently. And there are many others. I also like (CDE) and (SSRI). But I cannot buy them all. People should should also look into (SLV) and (GLD). You've got to like the physical metal ETFs before you can like the mining companies.
On the coal sector, (ACI), (PCX), (BTU) and (JRCC) all have seen an even worse bloodshed than precious metal mining companies. I called on JRCC at $4, and I called profit taking on JRCC one day before it peaked at $62.83 - and I was right.
I predicted low $20-ish JRCC and I now see there's even further downside, as the coal sector really has not seen a serious correction yet, which it must. So wait till JRCC falls through $20, before you consider whether it should be a buy. Ultimately it could reach $100 one day. But for now, precious metals, especially platinum and palladium are where you want to be, not coal.
A quick rundown on Chesapeake's (CHK) Q2 earnings and then I’ll focus on strategic matters. All results US$ unless otherwise noted:
* Cash flow from operations increased 30% to $2.8B for the 6 months ended 06/30/2008. That’s probably another record for the company but they’re going to need every penny and then some as they showed $6.3B cash outflows from investing activities, with $3B going to leasehold/property acquisitions, another $3B to actual drilling and $1.2B to other capital investment (probably things like building midstream assets, compressors, etc.) This figure includes gains of almost $1B from VPP transactions, sale/leaseback transactions and property divestitures. I’ve mentioned the financial hamster wheel in the past but this gives you some indication of the scale.
* The balance sheet shows no surprises: more liabilities piling up. Debt increased 19%, the current ratio stands at 0.44 with debt-to-equity @ 1.27, up 20 bp from just last quarter. Some of these numbers may be skewed by some of the derivatives liabilities they are carrying ($3.5B in current & $3.1B in non-current liabilities) because as I understand it, these are non-cash liabilities and will be backed by actual production. What is slightly more disturbing are the off-balance sheet obligations the company is exposed to, roughly $1.9B related to equipment leases, transportation & drilling contracts and loans/guarantees to related companies. These obligations come to an additional 7% of CHK’s $27.8B in carried liabilities.
* The company showed a huge loss due to mark-to-market accounting on hedges (backed not by cash but actual production). Not a big deal. Their diluted share count did exclude an additional 6% of shares outstanding if exercised.
* The company also announced a $404M verdict against them in West Virginia that they are currently appealing in the US Supreme Court. The filing indicates this verdict will not have an adverse effect on the company.
As usual, Zman does a great job of breaking down the quarter on his blog so I don’t want to waste pixels. He is more of a trader than I am, though and focuses on different items. I’ve outlined some of these items above.
Regular readers should get the sense by now that I focus more on numbers and less on “the story.” Any story worth hearing will usually be reflected in the numbers, whether they be reserves, cash flow, balance sheet, sales growth, etc. But being a numbers guy all the time is so boring and who doesn’t love smack talk every once in a while so I direct readers to a transcript of the XTO Energy Q2 08 earnings call.
When I first read it, it sounded to me like Bob Simpson, CEO of XTO Energy (XTO), was calling out our dear old Aubrey as a “hype artist” in regards to the Haynesville (as well as their “past history”) but I couldn’t be sure as Simpson didn’t name names and I’m not well-steeped enough in the industry to know exactly who he was referring to. But I was worried because Simpson has been in the game for a long time and if Simpson was referring to Chesapeake, perhaps I am leaving myself open to disappointment with the Haynesville.
McClendon’s response in CHK’s earnings call (transcript here) cleared that matter up for me. The “hype artist” in question answers these allegations right off the bat and spends a considerable amount of time doing so (in detail). But my favorite quote on the call had to be McClendon’s response to some analyst’s call that gas would stay at $6.25/mcf due to massive oversupply: “That kind of analysis, I think, can only come at the dangerous intersection of Excel and Powerpoint. It can’t happen in reality.”
In the course of this call, McClendon and team also provide a great deal of color into other plays like the Fayetteville, Barnett and highly-hyped Marcellus Shale. He also goes into logistical details and limits which, like every other aspect of life, are grossly overlooked as people extrapolate knowledge from headlines. There are too many for me to summarize here so I highly recommend every retail investor with a stake or interest in the energy sector to read these transcripts, not just for the unusually public CEO spat but to glean real insights into how the industry runs and the limitations we have to deal with as a nation even as cynical politicians talk up energy independence.
As for our investment in CHK, the fact is we have already monetized some value in the Haynesville through the joint venture with Plains Exploration & Production (PXP) to the tune of $30,000 per acre once production costs are included. The data they provided on the wells completed to date in the Haynesville does nothing to dissuade me from confidence in management’s projections for this play. Other key points coming from the call regarding Haynesville:
* Much of CHK’s acreage in the play is held by production (HBP) as opposed to the finite lease terms in the Barnett which are forcing a drilling battle royale. So Chesapeake can control the timing of the drilling better in the new play.
* The gas is highly pressurized and so will not need to be compressed.
* Gas priced in the Haynesville is consistently over $1 higher than that in the Barnett.
* Infrastructure issues will limit the ramp-up of the Haynesville (and much more so in the Marcellus).
The other significant item to take away from this call was McClendon’s declaration of a new strategy for realizing value in the form of asset monetization via VPPs, JVs, etc. I almost think of it like a private equity group — buying assets on the cheap and sell all or part of it later at a premium. Obviously, Chesapeake has always had a large financial engineering aspect to it, with the constant balance sheet maneuvering and hedging. Why not add deal-making to it as well? The recent ability to execute deals such as the VPPs, the JV with PXP and the Woodford Shale divestiture to BP, even in this poor economic environment, gives me confidence in management’s ability to hit the financial targets they’ve set ($7.5B in asset monetizations in 2nd half 2008, $500M VPP in 2nd half 08, $1B - $2B VPPs in 2009).
An analyst on the call mentioned CHK had a core competency (or competitive advantage, if you will) in leasing land that others can’t duplicate and as such, the divestiture program is an interesting twist to the CHK story. I completely agree. They’ll need it as they estimate that 2008 and 2009 capex + costs will exceed projected cash flow and debt facilities. Things like their leasing team, their geological tech center, their in-house drilling and machine shops — i.e. things that don’t get priced into the stock until they hit the jackpot with something like the Haynesville — will give them a huge leg up as they implement this strategy. Keep in mind that CHK is the largest leaseholder in the Marcellus Shale (over 1M acres — let’s monetize some of that) and at YE 2007, roughly half their production still came from conventional plays in the Mid-Continent (i.e. not shale).
Oh and did I mention that they are now the largest producer of natural gas in the US?
Performance measurements:
* $7.5B in asset monetizations in 2nd half 2008 (VPP’s: $500M in for 2008 + $1B - $2B in 2009)
* 2008 production 851 - 861 bcfe
o Barnett - 675 mmcfe/day by YE 2008
o Fayetteville - 200 mmcfe/day by YE 2008
o Haynesville - 75 mmcfe/day by YE 2008
* Hit reserves guidance @ 12-12.5 tcfe by YE 2008 & 13-14 tcfe by 2009 (they have already met 2008 target)
* Maintain 2:1 ratio on risked/unproved to proved reserves. Large decline may signal end of growth. This ratio is currently closer to 4:1.
* Operating costs (per mcfe):
o G&A: $0.43 - 0.49
o DD&A: $2.50 - $2.70
o DD&A (non-oil/gas): $0.20 - $0.24
o interest expense: $0.50 - $0.55
For months we have counseled accounts to reduce exposure to our beloved “stuff stocks” (energy, materials, base / precious metals, cement, timber, etc.) even though we continue to think “stuff” remains in a secular bull market. We began recommending rebalancing (read: selling partial positions) said holdings on fears that the politicos were going to do everything in their power to drive the price of crude oil lower into the elections, for obvious reasons. Our long-standing target for the price of crude has been its 200-day moving average [DMA], which now stands at $110. With rude crude changing hands in mid-July at $147/bbl that strategy looked pretty foolish. Last week, however, oil tagged $111/bbl and our strategy doesn’t look nearly as wrong-footed. While crude oil’s recent 25% price decline looks bad in the charts, the price declines of many energy-related equities now exceeds 40% over that same timeframe.
We believe the “selling stampede” in the energy complex is overdone and is therefore nearing an end. Moreover, with the recent decline in crude prices, numerous members of OPEC have been calling for production cuts. While we are not expecting production cuts in the near-term, we continue to believe that if prices fall further, OPEC will step in and defend a price near $100/bbl. Obviously, we've found a price that slows oil demand, but in our view, long-term oil fundamentals remain strong.
Consistent with these thoughts, we recommend the gradual re-accumulation of the energy stocks, particularly ones with outsized dividend yields. For fund investors there are a plethora of closed-end funds and ETFs like ProShares Ultra Oil & Gas (DIG), which is leveraged two-to-one on the upside. Additionally, in past missives we have mentioned a number of higher yielding names recommended by our fundamental energy analysts, like 12%-yielding, Outperform-rated Linn Energy (LINE). Today we offer for your consideration Strong Buy-rated Delta Petroleum (DPTR) using its convertible bond, as well as Strong Buy-rated Chesapeake Energy (CHK) using its convertible preferred “D” shares. As always, terms for these convertibles should be checked before purchase.
As with oil, we have been cautious on precious metals this year despite our belief that the yellow metal also remains in a secular bull market. We think the decline from $990/ounce on July 15, 2008 into last Friday’s close of $792 is overdone. The gold stocks have fared even worse, as can be seen in the charts below. While many pundits are blaming gold's, and oil’s, decline on the stronger dollar, we don’t see it that way.
Plainly, we have been bullish on the dollar since late last year when we recommended closing down all of our anti-dollar “bets” that had been in place since 4Q01. And, at the margin the dollar’s recent strength is responsible for a modicum of the slide in “stuff stocks.” However, we think there is more afoot than just that. Indeed, the recent accelerating rotation out of “stuff” we think is largely being driven by a gathering sense that not only is the U.S. economy slowing noticeably, but so is the rest of the world. While true, we continue to believe the U.S. economy will avoid a recession and continue to muddle through (read: 0.0% – 2% GDP growth), although the odds of a recession in 2009 have clearly risen.
Nevertheless, we like gold stocks at these price points, but are again turning cautious on the U.S. dollar (see charts); and, as with energy stocks, are recommending gradual re-accumulation. Here too there are numerous closed-end funds and ETFs, but one for your consideration is the Deutsche Bank Gold Double Long Note (DGP).
The call for this week: Regrettably, for most of this year it has been more of a trader’s market than an investor’s market. While we are a much better investor than trader, we have attempted to navigate the volatile environment using the trading side of the portfolio. Recall that we advise using 80% of your equity portfolio for investment ideas and 20% for trading. And when we say “trading,” we DON’T mean day trading! Rather, we try to wait for a trading “set up” whereby the odds are tipped so far in our favor that if we are wrong we are going to get stopped-out quickly with hopefully small losses and live to play another day.
This is very very cheap at 28$.
XTO is still at 41$.
Crazy PPS
Rooftop Solar Power Now the Best Investment Under the Sun
Friday October 3, 11:28 pm ET
Emergency Economic Stabilization Act Provides 30% Tax Credit for Solar
LOS GATOS, Calif., Oct. 3, 2008 (GLOBE NEWSWIRE) -- With today's passage of the Economic Stabilization Act of 2008 -- which includes the best incentives for solar power in a generation -- Akeena Solar, Inc. (NasdaqCM:AKNS - News), one of the nation's leading designers and installers of solar power systems, believes the key elements are now in place for unprecedented growth in residential solar adoption.
``Finally, the federal government has implemented a set of policies that will spur the long term growth of the solar industry,'' said Barry Cinnamon, CEO of Akeena Solar. ``Our customers can now achieve a payback on their solar investment in five years instead of ten, with a 20 percent return on investment (ROI). In today's uncertain economy, rooftop solar power may be the very best investment a homeowner can make.''
An eight-year extension of the federal investment tax credit and the removal of the $2,000 limitation for residential installations will drastically decrease the cost of solar for homeowners. The solar tax credits, first introduced in 2005, have been instrumental in encouraging the expansion of the industry.
Akeena has been installing solar systems since 2001 and began with one office in Northern California. In the past two years Akeena has seen the number of offices it operates grow from one to 10, including offices serving California, Connecticut, Colorado, New York, New Jersey and Hawaii.
``We've been in this industry since the beginning -- we've seen where it's been, and now we are excited to guide its future as more and more people make the switch to clean, renewable, and now more affordable solar power,'' Cinnamon said.
Rooftop Solar Power Now the Best Investment Under the Sun
Friday October 3, 11:28 pm ET
Emergency Economic Stabilization Act Provides 30% Tax Credit for Solar
LOS GATOS, Calif., Oct. 3, 2008 (GLOBE NEWSWIRE) -- With today's passage of the Economic Stabilization Act of 2008 -- which includes the best incentives for solar power in a generation -- Akeena Solar, Inc. (NasdaqCM:AKNS - News), one of the nation's leading designers and installers of solar power systems, believes the key elements are now in place for unprecedented growth in residential solar adoption.
``Finally, the federal government has implemented a set of policies that will spur the long term growth of the solar industry,'' said Barry Cinnamon, CEO of Akeena Solar. ``Our customers can now achieve a payback on their solar investment in five years instead of ten, with a 20 percent return on investment (ROI). In today's uncertain economy, rooftop solar power may be the very best investment a homeowner can make.''
An eight-year extension of the federal investment tax credit and the removal of the $2,000 limitation for residential installations will drastically decrease the cost of solar for homeowners. The solar tax credits, first introduced in 2005, have been instrumental in encouraging the expansion of the industry.
Akeena has been installing solar systems since 2001 and began with one office in Northern California. In the past two years Akeena has seen the number of offices it operates grow from one to 10, including offices serving California, Connecticut, Colorado, New York, New Jersey and Hawaii.
``We've been in this industry since the beginning -- we've seen where it's been, and now we are excited to guide its future as more and more people make the switch to clean, renewable, and now more affordable solar power,'' Cinnamon said.
Astonishing chart !!
Very nice and interesting.
Last news I've received is that Sib controled + 90% Public Float.
Your theory is right, but now how can we force them to cover ?
Thanks Sumisu.
Will be nice to ad this chart here (GOLD)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=32641454
Congress sets stage for solar boom
After months of failed attempts in Congress to extend crucial renewable energy tax credits, the end game came with lightening speed Friday afternoon: The House of Representatives passed the green incentives attached to the financial bailout package approved by the Senate Wednesday night and President Bush promptly signed the legislation into law.
There were goodies for wind, geothermal and alternative fuels, but the big winner by far was the solar industry.
“It feels like we should be popping the champagne,” said a Silicon Valley solar exec Green Wombat met for lunch minutes after Bush put pen to paper.
That it took a the biggest financial crisis since the Great Depression to save billions of dollars of renewable projects in the pipeline for the sake of political expediency does not bode well for a national alternative energy policy. But the bottom line is that the legislation passed Friday sets the stage for a potential solar boom.
* The 30% solar investment tax credit has been extended to 2016, giving solar startups, utilities and financiers the certainty they need for the years’ long slog it takes to get large-scale power plants and other projects online. The extension is particularly important to those Big Solar projects that need to arrange project financing in the next year or so.
* The $2,000 tax credit limit for residential solar systems has been lifted, meaning that homeowners can get a 30% tax credit on the solar panels they install. That will save a bundle - especially for those who live in states with generous state rebates - and goose demand for solar panels makers and installers like SunPower (SPWRA) and First Solar (FSLR). (If you buy a a $24,000 3-kilowatt solar array in California - big enough to power the average home - you can claim a $7,200 federal tax credit. Add in the state solar rebate and the cost of the system is cut in half.)
* Utilities like PG&E (PCG), Southern California Edison (EIX) and FPL (FPL) can now themselves claim the 30% investment tax credit for large-scale solar power projects. That should encourage those well-capitalized utilities to build their own solar power plants rather than just sign power purchase agreements with startups like Ausra and BrightSource Energy.
“The brakes are off,” says Danny Kennedy, co-founder of Sungevity, a Berkeley, Calif., solar installer that uses imaging technology to remotely size and design solar arrays. “In just six months since our launch we’ve sold about a hundred systems. With an uncapped tax credit for homeowners going solar, we expect business to boom.”
While elated sound bytes from solar executives have been flooding the inbox all afternoon - along with invites to celebratory after-work drinks - solar stocks took a drubbing (along with the rest of the still-spooked market) after initially soaring on the news.
SunPower ended the trading day down 5% while First Solar shares dropped 8%. The bright spot was China’s Suntech (STP), which on Thursday announced a joint venture with financier MMA Renewable Ventures to build solar power plants as well as the acquisition of California-based solar panel installer EI Solutions.
Congress didn’t treat the wind energy so generously. The production tax credit for generating renewable energy was extended by just one year, guaranteeing the industry’s will continue to live year by year (at least through 2009). But given that 30% of all new power generation built in the United States in 2007 was wind, and that the amount of wind power installed by the end of 2008 is expected to rise 60% over the record set last year, the wind biz should do just fine.
But Congress did give a break to those who buy small-scale wind turbines. Systems under 100 kilowatts qualify for a 30% tax credit up to $4,000. Homeowners get a $1,000 tax credit for each kilowatt of wind they install.
“This is a huge break through for small wind,” says Scott Weinbrandt, president of Helix Wind, a San Diego-based manufacturer of 2-and-4-kilowatt turbines.
http://greenwombat.blogs.fortune.cnn.com/2008/10/03/congress-sets-stage-for-solar-boom/?source=yahoo_quote
NOW I UNDERSTAND
NOW I UNDERSTAND
US Fed Discount Window Borrowing Continues To Hit New Highs
Thu, Oct 2 2008, 20:41 GMT
http://www.djnewswires.com/eu
US Fed Discount Window Borrowing Continues To Hit New Highs
By Meena Thiruvengadam
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--Borrowing from the U.S. Federal Reserve's expanded discount window continued to skyrocket to new highs, reaching a total of $409.52 billion Wednesday as the fate of a proposed $700 billion plan aimed at repairing strained credit markets remained unclear.
The Fed on Thursday said total borrowing at the discount window, including both depository institutions and primary dealers, rose more than 50% to $409.52 billion Wednesday from $262.34 billion in the prior week. Total average daily borrowing also jumped to $367.80 billion in the week of Oct. 1 from a previous record $187.75 billion in the prior week.
Borrowing from the Fed has grown dramatically in recent weeks as already tight credit markets have come under increasing pressure.
Lending through the Fed's primary dealer credit facility, created in March for investment banks in the wake of the near-collapse of Bear Stearns, reached a new record of $146.57 billion Wednesday after hitting $105.66 billion a week earlier. Average daily borrowing through that facility also rose to $147.69 billion from $88.15 billion in the previous week. The figures includes loans made to broker-dealers Goldman Sachs, Morgan Stanley and Merrill Lynch as well as their U.K. counterparts.
The primary dealer credit facility marks the first time since the Great Depression that non-bank primary dealers have been allowed to borrow from the Fed's discount window, a privilege usually reserved for more closely regulated commercial banks. In recent weeks, the Fed said it would accept a broader range of collateral, including non-investment grade securities and equities, in exchange for loans from the facility.
Lending through the primary credit facility, used by commercial banks, Wednesday rose to a record $49.52 billion, from $39.32 billion set last week. Average daily lending through the primary credit facility also continued to soar, climbing to $44.46 billion from a prior record $39.36 billion in the previous week, the report said.
Separately, the Fed said a loan to troubled insurer American International Group Inc. (AIG) on Wednesday totaled $61.28 billion, more than half of the insurer's $85 billion credit line with the central bank.
The Fed also said it provided $152.11 billion in credit Wednesday through its Boston branch for a recently announced money-market mutual fund liquidity facility, more than double the $72.67 billion it provided on the previous Wednesday.
The Fed's holdings of Treasurys securities expanded slightly in the week ended Oct. 1, growing $43 million to $476.62 billion, according to Thursday's report. A year ago, the Fed's balance sheet showed it held nearly $800 billion in Treasury securities.
Average daily borrowing of seasonal credit fell $21 million in the week to $74 million, according to Thursday's report. Seasonal credit borrowing Wednesday was at $42 million.
-By Meena Thiruvengadam; Dow Jones Newswires; 202-862-9255; meena.thiruvengadam@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=b0mLQ9gk7h7oHq8Uk5fR6Q%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
October 02, 2008 16:41 ET (20:41 GMT)
http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=541fa3e0-7f7f-45e8-b4ba-7429828732e0
Same plan here.
No other way.
700B$ fluff will sink the ship.
Good article, I'm all in !
Schwarzenegger to U.S.: State may need $7-billion loan
In a letter obtained by The Times, the governor warns that tight credit has dried up funds California routinely relies on and it may have to seek emergency aid within weeks.
http://www.latimes.com/business/la-fi-calif3-2008oct03,0,5726760.story?track=rss
Have you wondered why the Treasury asked for a $700 Bn emergency package with the full force of the Fed behind them, and gave the Congress less than a week to deliver it?
Either these fellows have lost their nerve or the markets are riding to a fall, and it could be terrific.
We've been looking for some event, something that would have created such an extraordinary set of actions as we have seen in the past few days.
This just might be it. Special thanks to Yves Smith for flagging it.
Time to start settling those Credit Default Swaps for Fannie and Freddie (Oct. 6), Lehman Brothers (Oct. 10) and Lehman Brothers (Oct 23).
LIBOR is eight standard deviations from the norm, because the banks don't know who is holding what in their cards, but there might be some Aces and Eights in there. The TED spread is at an all time record high.
An insurance company is said to be heavily exposed.
Do you need to buy a vowel? Let's hope we get lucky.
Brace for impact.
Settlement day approaches for derivatives
By Aline van Duyn in New York
October 1 2008 03:00
The $54,000bn$ credit derivatives market faces its biggest test this month as billions of dollars worth of contracts on now-defaulted derivatives on Fannie Mae, Freddie Mac, Lehman Brothers and Washington Mutual are settled.
Because of the opacity of this market, it is still not clear how many contracts have to be settled and whether payouts on the defaulted contracts, which could reach billions of dollars, are concentrated with any particular institutions.
According to dealers, insurance companies and investors such as sovereign wealth funds, which are widely believed to have written large amounts of credit protection through credit default swaps on financial institutions, could have to pay out huge amounts.
"There is a lot at stake," said an executive at one big dealer. "This is a crisis time, and if these auctions do not go well, or if the amounts investors and dealers have to pay is seen as not being fair, it could have further negative repercussions on the CDS market."
The "auction season" starts tomorrow, when the International Swaps and Derivatives Association has scheduled an auction for Tembec, a Canadian forest products company.
This is followed by Fannie Mae and Freddie Mac auctions on October 6.
Then, Lehman is settled on October 10, and Washington Mutual is scheduled for October 23.
Even though it is possible that some participants in the credit derivatives market will have to make large payouts, the flipside is there could also be big winners. For every loss in credit derivatives, there is a gain.
The amount of contracts outstanding that reference Fannie Mae and Freddie Mac alone is estimated to be up to $500bn.
The default was triggered under the terms of derivatives contracts by the US government's seizure of the mortgage groups, even though the underlying debt is strong after the explicit government guarantee.
The CDS contract settlement could result in billions of dollars of losses for insurance companies and banks that offered credit insurance in recent months.
The recovery value will be set by auction. Usually, the bond that is eligible for the auction that trades at the lowest price - the so-called cheapest-to-deliver - is the one that sets the overall recovery value for the credit derivatives.
In the Lehman case, numerous banks and investors have already made losses due to exposure to Lehman as a counterparty on numerous derivatives trades.
The auctions next week are for credit derivatives which have Lehman as a reference entity. There are likely to be fewer contracts outstanding than for Fannie Mae and Freddie Mac because Lehman was not included in many of the benchmark credit derivatives.
However, exposure remains unclear, which is one concern that regulators now have about the credit derivatives market.
Lehman's bonds have been trading between 15 and 19 cents on the dollar, meaning investors who wrote protection on a Lehman default will have to pay out between 81 and 85 cents on the dollar, a relatively high pay-out.
The previous biggest default in credit derivatives was for Delphi, the US car parts maker that went bankrupt in 2005 and which had about $25bn of CDS.