https://www.youtube.com/watch?v=n8JOGxD60xI&feature=youtu.be
Friday, March 27, 2015
17 Year Old Hedge Fund Manager- Making Money with Charles Payne
https://www.youtube.com/watch?v=M3bunYJuf58&sns=tw
17 year old hedge fund manager Jacob Wohl joins Charles Payne on Making Money to talk biotech valuations as well as other investment opportunities.
Wednesday, March 25, 2015
Tuesday, March 24, 2015
Soaring Dollar =Currency Crisis
http://www.thefiscaltimes.com/Columns/2015/03/12/Soaring-Dollar-Could-Unleash-Currency-Crisis
he U.S. dollar is in the midst of an epic surge. The trusty greenback — which was famously derided by the likes of rapper Jay-Z and supermodel Gisele Bündchen just a few years ago — is up more than 25 percent from its early 2014 low.
Further gains look likely, too. Deutsche Bank is looking for the dollar to gain another 19 percent against the euro by 2017. All this is thanks to the combination of the relative health of the American economy and divergences in monetary policy stances.
Related: Why the Fed’s Patience Is About to Run Out
On the surface, this has been good news for American consumers enjoying a surge in real income (due primarily to lower energy and import prices). But there are downsides to a stronger dollar as well.
Stocks were pummeled Tuesday as investors begin to realize this, pushing the S&P 500 back below its 50-day moving average for the first time since January. The catalyst driving that action is the growing likelihood that the Federal Reserve responds to a fast tightening job market by raising interest rates for the first time since 2006 as soon as June. Compare that to the start of a new bond-buying stimulus by the European Central Bank and the ongoing desperation of the Bank of Japan.
Commodity prices in particular have been hammered, with the Deutsche Bank Commodities Tracking Fund (DBC) down more than 35 percent from the high hit last summer. And that, in turn, is plaguing emerging market economies, which are hurt by lower raw export revenue and exposure to China's economic slowdown. The iShares Emerging Markets ETF (EEM) is down nearly 15 percent from its September high and is down 6 percent since late February.
Related: Americans Are About to Get a Nice Fat Pay Raise
The chart below from Yardeni Research shows the close correlation between the value of the dollar and the value of emerging market stocks. What's scary is that the dollar's current valuation suggests a return to the 2008 financial panic lows could be in order — which would represent a 50 percent wipeout from here.
Cornerstone Macro’s analysts note that while a stronger dollar will pay dividends for the long beleaguered American consumer — setting the stage for a surge of income growth and balance sheet repair that hasn't been seen since the Clinton administration — it's greatly increasing the risk that a currency crisis rips through the emerging market economies. That's because the rise of the dollar has forced foreign central banks to tap into their foreign exchange reserves as their balance of trade declines. The longer this goes on, the more likely it becomes that currencies of the weaker countries will buckle under the pressure, resulting in a surge of inflation, punishing interest rates and economic turmoil. The S&P 500, like a bloodhound on the scent, has picked up on this risk and has begun to trade over the last few weeks in lockstep with a basket of emerging market currencies.
There's more at risk, too. A stronger dollar, weaker commodity prices (especially oil) and turbulence overseas all threaten the value of foreign profits earned by U.S. corporations at a time when earnings growth is already dropping at a pace that's associated with recessions. In fact, the last time the dollar strengthened to this extent was in the midst of the last two recessions.
The chart above shows how forward S&P 500 earnings estimates have tended to track the big changes in the dollar's valuation (which is on an inverse scale on the right side). When the dollar surged, earnings dropped.
Related: Why Stocks Are So Spooked by Great Job Gains
If all this wasn't enough, strategist George Saravelos at Deutsche Bank is concerned that the advent of negative interest rates in the bond yields of core Eurozone countries like Germany — and the launch of the ECB's bond buying program — will result in a massive capital outflow from the continent. The total outflow could be worth as much as 4 trillion euros.
In this environment, much of the money could pour into the U.S. in search of safety, further boosting the dollar and increasing the magnitude of the dynamics in play.
It's a policy quagmire. The U.S. has long espoused a strong dollar policy, but now doubts are beginning to grow. On Tuesday, Jason Furman, chairman of President Obama's Council of Economic Advisors, admitted that the dollar's strength is a headwind for the U.S. economy going forward. On Wednesday, the Chief Operating Officer of Goldman Sachs, Gary Cohn, said the rising dollar puts the Fed in a tough spot as the negative impacts of the rising currency are just starting to be felt.
Investors might be in a tough spot as well. The next shock could come on March 18 if the Fed, as expected, drops the "patience" language from its policy statement, putting a June rate hike in play.
he U.S. dollar is in the midst of an epic surge. The trusty greenback — which was famously derided by the likes of rapper Jay-Z and supermodel Gisele Bündchen just a few years ago — is up more than 25 percent from its early 2014 low.
Further gains look likely, too. Deutsche Bank is looking for the dollar to gain another 19 percent against the euro by 2017. All this is thanks to the combination of the relative health of the American economy and divergences in monetary policy stances.
Related: Why the Fed’s Patience Is About to Run Out
On the surface, this has been good news for American consumers enjoying a surge in real income (due primarily to lower energy and import prices). But there are downsides to a stronger dollar as well.
Stocks were pummeled Tuesday as investors begin to realize this, pushing the S&P 500 back below its 50-day moving average for the first time since January. The catalyst driving that action is the growing likelihood that the Federal Reserve responds to a fast tightening job market by raising interest rates for the first time since 2006 as soon as June. Compare that to the start of a new bond-buying stimulus by the European Central Bank and the ongoing desperation of the Bank of Japan.
Commodity prices in particular have been hammered, with the Deutsche Bank Commodities Tracking Fund (DBC) down more than 35 percent from the high hit last summer. And that, in turn, is plaguing emerging market economies, which are hurt by lower raw export revenue and exposure to China's economic slowdown. The iShares Emerging Markets ETF (EEM) is down nearly 15 percent from its September high and is down 6 percent since late February.
Related: Americans Are About to Get a Nice Fat Pay Raise
The chart below from Yardeni Research shows the close correlation between the value of the dollar and the value of emerging market stocks. What's scary is that the dollar's current valuation suggests a return to the 2008 financial panic lows could be in order — which would represent a 50 percent wipeout from here.
Cornerstone Macro’s analysts note that while a stronger dollar will pay dividends for the long beleaguered American consumer — setting the stage for a surge of income growth and balance sheet repair that hasn't been seen since the Clinton administration — it's greatly increasing the risk that a currency crisis rips through the emerging market economies. That's because the rise of the dollar has forced foreign central banks to tap into their foreign exchange reserves as their balance of trade declines. The longer this goes on, the more likely it becomes that currencies of the weaker countries will buckle under the pressure, resulting in a surge of inflation, punishing interest rates and economic turmoil. The S&P 500, like a bloodhound on the scent, has picked up on this risk and has begun to trade over the last few weeks in lockstep with a basket of emerging market currencies.
There's more at risk, too. A stronger dollar, weaker commodity prices (especially oil) and turbulence overseas all threaten the value of foreign profits earned by U.S. corporations at a time when earnings growth is already dropping at a pace that's associated with recessions. In fact, the last time the dollar strengthened to this extent was in the midst of the last two recessions.
The chart above shows how forward S&P 500 earnings estimates have tended to track the big changes in the dollar's valuation (which is on an inverse scale on the right side). When the dollar surged, earnings dropped.
Related: Why Stocks Are So Spooked by Great Job Gains
If all this wasn't enough, strategist George Saravelos at Deutsche Bank is concerned that the advent of negative interest rates in the bond yields of core Eurozone countries like Germany — and the launch of the ECB's bond buying program — will result in a massive capital outflow from the continent. The total outflow could be worth as much as 4 trillion euros.
In this environment, much of the money could pour into the U.S. in search of safety, further boosting the dollar and increasing the magnitude of the dynamics in play.
It's a policy quagmire. The U.S. has long espoused a strong dollar policy, but now doubts are beginning to grow. On Tuesday, Jason Furman, chairman of President Obama's Council of Economic Advisors, admitted that the dollar's strength is a headwind for the U.S. economy going forward. On Wednesday, the Chief Operating Officer of Goldman Sachs, Gary Cohn, said the rising dollar puts the Fed in a tough spot as the negative impacts of the rising currency are just starting to be felt.
Investors might be in a tough spot as well. The next shock could come on March 18 if the Fed, as expected, drops the "patience" language from its policy statement, putting a June rate hike in play.
Monday, March 23, 2015
Santelli Exchange: Richard Fisher rates US economy #1 but "Market Is Hyper Overpriced"
http://finance.yahoo.com/video/santelli-exchange-richard-fisher-rates-144400058.html
“What worries me is that the people that watch this show are
completely dependent on the Fed — look at the volatility. I could see a
correction taking place of substantial magnitude.”
Of course this is all the market’s fault and not the Fed’s for ballooning their balance sheet into the trillions and effectively
daring investors not to chase a central bank-underwritten rally in risk
assets and so ultimately, Fisher thinks the “people who watch” CNBC
need to stop being so complacent.
Santelli: “If you had to rate the US economy 0-10 where would you peg it?”
Fisher: “We’re #1., we’re a 10. We’re the epicenter of growth and in the sweet spot.”
antelli: “Do you think any part of the stock market being high has anything to do with the committee you just left and if you didn’t grade the economy on a curve would you still give it a 10?”
Fisher: “Well, what worries me is how totally lazy investors have gotten, totally dependent on the Federal Reserve and I find this to be a precarious situation.”
Fisher: “Are we vulnerable in my personal opinion to a significant equity market correction? I believe we are.”
http://video.cnbc.com/gallery/?video=3000363242
Then Santelli pulls out a Pavlov reference suggesting that the Fed has in fact conditioned retail investors
to be lazy prompting Fisher to point out the irony in the fact that
global financial markets are depending on a “diminutive woman” (Yellen)
to play Atlas.
to be lazy prompting Fisher to point out the irony in the fact that
global financial markets are depending on a “diminutive woman” (Yellen)
to play Atlas.Of course this is all the market’s fault and not the Fed’s for ballooning their balance sheet into the trillions and effectively
daring investors not to chase a central bank-underwritten rally in risk
assets and so ultimately, Fisher thinks the “people who watch” CNBC
need to stop being so complacent.Santelli: “If you had to rate the US economy 0-10 where would you peg it?”
Fisher: “We’re #1., we’re a 10. We’re the epicenter of growth and in the sweet spot.”
antelli: “Do you think any part of the stock market being high has anything to do with the committee you just left and if you didn’t grade the economy on a curve would you still give it a 10?”
Fisher: “Well, what worries me is how totally lazy investors have gotten, totally dependent on the Federal Reserve and I find this to be a precarious situation.”
Fisher: “Are we vulnerable in my personal opinion to a significant equity market correction? I believe we are.”
"Market Is Hyper Overpriced"
http://video.cnbc.com/gallery/?video=3000363242
GDP Latest forecast
https://www.frbatlanta.org/cqer/researchcq/gdpnow.cfm
Latest forecast
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2015 was 0.3 percent on March 17, down from 0.6 percent on March 12. Following yesterday morning's industrial production release from the Federal Reserve Board that reported a 17 percent decline in oil and gas well drilling in February, the nowcast for first-quarter real nonresidential structures investment growth fell from -13.3 percent to -19.6 percent.
Forget the Fundamentals, This Market Is About Just One Thing
http://finance.yahoo.com/news/forget-fundamentals-market-just-one-101500022.html
Related: Will Fed Rate Hikes Cost You in Higher Taxes?
Related: Yellen Really Doesn’t Want to Take Away the Punch Bowl
It's full-on euphoria. The Dow
Jones Industrial Average is back over 18,000. The Nasdaq Composite is
above 5,000. The Russell 2000 is pushing to new record highs.
Overseas, Japan's Nikkei 225
Composite, which dipped below 17,000 early in the year, took about a
month to surge from 18,000 to 19,000 and is now rapidly approaching the
20,000 level — heights that haven't been seen since 2000. Germany's DAX
recently traded above 12,000 for the first time and is up nearly 30
percent from the lows set earlier this year.
The same thing is happening in China. The Shanghai Composite Index is up 16 percent from its February lows.
The common theme: Seven years after the financial crisis — created in
the wake of a housing bubble fueled by low interest rates — global
central bankers keep doling out stimulus.Related: Will Fed Rate Hikes Cost You in Higher Taxes?
While Federal Reserve
policymakers just opened the door to raising rates for the first time
since 2006 as soon as June, they also greatly reduced their estimate of
the pace at which rates will rise — an acknowledgement of soft
inflation, recent declines in U.S. economic data and the dampening
effect the strong dollar could have on growth and earnings.
That was the green light the bulls had been waiting for.
If the Fed will be slow in
tightening, other major central banks are just ramping up their stimulus
efforts, from a new sovereign bond-buying program by the European
Central Bank to chatter that the Bank of Japan could start buying
individual stocks to rate cuts by the People's Bank of China. Overall,
there have been 25 interest rate cuts so far this year.
These new easing efforts have
been unleashed in response to a stalling of economic growth globally as
well as the deflationary impulse created by the dollar's 25 percent-plus
rise out of last summer's lows. The stakes are high since historically
big moves like this have set off currency crises in emerging economies.
The situation is made worse by the reliance of foreign economies on
cheap dollar-based credit, something I recently wrote about.
If you wanted confirmation that
it's all about the central banks now — and not about fundamentals like
earnings and economic growth — consider the chart below. It shows how
stocks globally have disconnected from earnings growth, fueled by an
expansion of price-to-earnings multiples.
Consider also that economic growth here at home has stalled as the Atlanta Fed's GDPNow Q1 growth estimate
has collapsed to just 0.3 percent while the Citigroup Economic Surprise
Index, shown below, has fallen to levels not seen since early 2011 just
before the start of the bull market's worst correction to date: A 21.6
percent peak-to-trough decline in the S&P 500.
It's become clear that Fed Chair Janet Yellen and her cohorts aren't going to rush the policy tightening process even though they should;
they will wait for the job market to tighten further and create clear
and undeniable wage inflation. We're not there yet. Thus, the bubble
will grow.
Related: The Middle Class Is Struggling in All 50 States
Ed Yardeni of Yardeni Research
has been telling clients to prepare for an "Irrational Exuberance meltup
scenario" thanks, once again, to the work of central bank officials.
Yellen is the star now as U.S. stocks haven't participated in the rises
already seen across Asia and Europe. That's set to change.
Yardeni admitted last week
that this is all a bit ridiculous, and probably shouldn't be happening,
but for now it isn't necessarily a bad thing. "This is not about
investing, this is all about the central bankers," he clarified. "These
markets are all rigged, and I don't say that critically, I just say that
factually."
Enjoy the ride while it lasts, but keep that warning in mind.
Wednesday, March 18, 2015
Tuesday, March 17, 2015
Oil Storage
http://www.bloomberg.com/news/articles/2015-02-25/here-s-why-rising-u-s-oil-supplies-aren-t-overflowing-tank-tops
(Bloomberg) -- It looks like there’s more space to store oil in the U.S. than previously thought.
The Energy Information Administration pegged crude storage capacity at refineries and tank farms in the U.S. at 521 million barrels at the end of September. With inventories rising 8.4 million barrels last week to 434 million, it may appear at first glance as though supplies from the shale boom are on a collision course with tank tops.
Not so, says the EIA. The weekly storage numbers include a few sources that aren’t included in the capacity report, such as crude in pipelines and at well sites, that can add up to more than 100 million barrels.
“We still have a way to go before we can consider ourselves to be full,” Rob Merriam, the EIA’s manager of petroleum supply statistics in Washington, said by phone. “Once you correct for line-fill and lease tanks, we’re pushing about 60 percent capacity utilization.”
Stockpiles are surging amid the highest U.S. production in more than 30 years, helping cut the price of West Texas Intermediate crude by more than half from its peak last year. The grade settled today at $48.17 a barrel on the New York Mercantile Exchange.
The EIA doesn’t ask companies how much oil they have in pipelines. It’s possible to infer an estimate, though.
In September, companies told the EIA they had about 234 million barrels of crude in tank farms and pipelines. In a separate survey companies said they had about 147 million in tank farms. That leaves about 87 million barrels of crude in pipes.
The EIA doesn’t ask companies to break out tank farms from pipelines on a region-by-region basis, so the analysis can only be done on a national level.
Then there are the crude inventories being held in tanks at leases, where the oil is pumped out of the ground. Those aren’t included in the refinery and tank farm capacity report, either.
As the shale drilling boom has expanded the number of new oil wells in the U.S., supplies at those sites has grown from about 18 million barrels at the start of 2010 to more than 32 million in November.
Weekly storage numbers include Alaskan oil in transit on tankers, which can be another couple million barrels. All in all, it can be more than 130 million barrels in storage that don’t show up on the capacity report.
Also, the EIA asks companies to include in their storage figures not only the oil in tanks and refineries, but the amount they have in transit outside of pipelines, including on tankers, barges or train cars.
Add all that in, and storage utilization falls from 83 percent to about 60 percent.
To contact the reporter on this story: Dan Murtaugh in Houston at dmurtaugh@bloomberg.net
To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net Charlotte Porter
(Bloomberg) -- It looks like there’s more space to store oil in the U.S. than previously thought.
The Energy Information Administration pegged crude storage capacity at refineries and tank farms in the U.S. at 521 million barrels at the end of September. With inventories rising 8.4 million barrels last week to 434 million, it may appear at first glance as though supplies from the shale boom are on a collision course with tank tops.
Not so, says the EIA. The weekly storage numbers include a few sources that aren’t included in the capacity report, such as crude in pipelines and at well sites, that can add up to more than 100 million barrels.
“We still have a way to go before we can consider ourselves to be full,” Rob Merriam, the EIA’s manager of petroleum supply statistics in Washington, said by phone. “Once you correct for line-fill and lease tanks, we’re pushing about 60 percent capacity utilization.”
Stockpiles are surging amid the highest U.S. production in more than 30 years, helping cut the price of West Texas Intermediate crude by more than half from its peak last year. The grade settled today at $48.17 a barrel on the New York Mercantile Exchange.
The EIA doesn’t ask companies how much oil they have in pipelines. It’s possible to infer an estimate, though.
In September, companies told the EIA they had about 234 million barrels of crude in tank farms and pipelines. In a separate survey companies said they had about 147 million in tank farms. That leaves about 87 million barrels of crude in pipes.
Lease Storage
The number may be higher now. Since the end of September, companies have opened several new lines, such as Enterprise Products Partners LP’s Seaway Twin.The EIA doesn’t ask companies to break out tank farms from pipelines on a region-by-region basis, so the analysis can only be done on a national level.
Then there are the crude inventories being held in tanks at leases, where the oil is pumped out of the ground. Those aren’t included in the refinery and tank farm capacity report, either.
As the shale drilling boom has expanded the number of new oil wells in the U.S., supplies at those sites has grown from about 18 million barrels at the start of 2010 to more than 32 million in November.
Weekly storage numbers include Alaskan oil in transit on tankers, which can be another couple million barrels. All in all, it can be more than 130 million barrels in storage that don’t show up on the capacity report.
Also, the EIA asks companies to include in their storage figures not only the oil in tanks and refineries, but the amount they have in transit outside of pipelines, including on tankers, barges or train cars.
Add all that in, and storage utilization falls from 83 percent to about 60 percent.
To contact the reporter on this story: Dan Murtaugh in Houston at dmurtaugh@bloomberg.net
To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net Charlotte Porter
Wednesday, March 11, 2015
Wednesday, March 4, 2015
"Contemplating My Own Insanity - Again."
http://www.safehaven.com/article/36809/recession-is-on-the-way-questioning-ones-sanity-beat-the-crowd-panic-now
Contemplating My Own Insanity - Again
With the above backdrop, Albert Edwards at Society General had me laughing at his own personal assessment in his Global Strategy Weekly Email Update (no link available).He titled his research "Contemplating My Own Insanity - Again." Here are a few snips.
With equity markets galore hitting record high s clearly I must be missing something big! We are at that stage in the cycle where I begin to doubt my own sanity. I've been here before though and know full well how this story ends and it doesn't involve me being detained in a mental health establishment (usually). The downturn in US profits is accelerating and it is not just an energy or US dollar phenomenon - a broad swathe of US economic data has disappointed in February. One of the positive surprises, payrolls, is a lagging indicator. The $64,000 question is not if, but rather when will investors realize what is going on?
My colleague Kit Juke summed it up nicely in his morning note "Whatever the Fed does, they will not risk the economic recovery. That bias is why rates won't get anywhere near 'neutral' before they peak. The economic cycle will be brought down by asset bubbles bursting long before 'tight' policy has any effect. Lessons were learned from the Global Financial Crisis, but not that one."
Investors are transfixed instead by the Fed and when it will tighten rates and can't see the wood for the trees. The Fed's focus on payrolls, a lagging indicator, is most perplexing but not unusual at this stage in the cycle. The reality is that the vast bulk of economic, as well as earnings, data (even outside the energy sector), has been simply dreadful.
Current Rate of Profit Deterioration
February US Data Above and Below Expectations
If you believe profit deterioration is a solely or even mostly related to
the collapse in oil prices you are mistaken.
http://www.safehaven.com/article/36809/recession-is-on-the-way-questioning-ones-sanity-beat-the-crowd-panic-now
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