Archive for the ‘Immediately available to public’ Category

Tobin Smith: Bad Energy Decisions Matter

 

Image by Harry Stilianou from Pixabay

Bad Energy Decisions Matter

The 2022 Energy Crisis Is Here as Nations Struggle to Keep The Lights On

Courtesy of Tobin Smith, Transformity Research

Many Transformity Research investors have made a fortune in our energy infrastructure investments in the last 20 months, and we stand to make a lot more profits as the 2021-2022 energy crisis deepens.

For a variety of reasons, the profitless public Exploration and Production (EP) Fracking Boom is unlikely to happen again… and thus we are in a structural bull market for energy and a longer-lasting Fracking Bust while the resurging world economy that still runs on 80% hydrocarbons for energy barely hangs on. 

We forecast $75 oil in June and $4 natural gas after it became clear the major oil and natural consumption countries were on a path to at least enough vaccination and natural immunity to re-open their economies. We knew there would be more pent-up demand for oil and natural gas, and not nearly enough marginal new production.

We knew that because in the United States, the world's new leader in energy production, the public companies that created the Great American Energy Fracking BOOM had lost $trillions in borrowed money in a race to the bottom of the energy fracking mountain. Wall Street and energy banks were not lending any more energy production money because it would only serve to make them lose MORE money per barrel of oil or MMMbtu of natural gas.  

The old rule of commodity economics--the cure for high priced energy is high priced energy--requires willing lenders and investors to finance unprofitable energy drilling and production. But the folks with the money called uncle even before the pandemic hit the oil patch. When combined with OPEC+ getting religion on oil production that skews oil prices higher at the margin, now the new marginal producer of oil and natural gas in the world (American energy industry) was cut off from their financial enablers.

When fracking technology became profitable, lenders and private equity forgot that the cure for $100 oil was $100 oil…and the $100s of billions of drilling spending made the US the new marginal producer of light sweet crude. The “produced natural gas” that…
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The True Feasibility Of Moving Away From Fossil Fuels

Courtesy of ZeroHedge View original post here.

Authored by Gail Tverberg via Our Finite World blog,

One of the great misconceptions of our time is the belief that we can move away from fossil fuels if we make suitable choices on fuels. In one view, we can make the transition to a low-energy economy powered by wind, water, and solar. In other versions, we might include some other energy sources, such as biofuels or nuclear, but the story is not very different.

The problem is the same regardless of what lower bound a person chooses: our economy is way too dependent on consuming an amount of energy that grows with each added human participant in the economy. This added energy is necessary because each person needs food, transportation, housing, and clothing, all of which are dependent upon energy consumption. The economy operates under the laws of physics, and history shows disturbing outcomes if energy consumption per capita declines.

There are a number of issues:

  • The impact of alternative energy sources is smaller than commonly believed.

  • When countries have reduced their energy consumption per capita by significant amounts, the results have been very unsatisfactory.

  • Energy consumption plays a bigger role in our lives than most of us imagine.

  • It seems likely that fossil fuels will leave us before we can leave them.

  • The timing of when fossil fuels will leave us seems to depend on when central banks lose their ability to stimulate the economy through lower interest rates.

  • If fossil fuels leave us, the result could be the collapse of financial systems and governments.

[1] Wind, water and solar provide only a small share of energy consumption today; any transition to the use of renewables alone would have huge repercussions.

According to BP 2018 Statistical Review of World Energy data, wind, water and solar only accounted for 9.4% 0f total energy consumption in 2017.

Figure 1. Wind, Water and Solar as a percentage of total energy consumption, based on BP 2018 Statistical Review of World Energy.

Even if we make the assumption that


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Democrats Stalking $5 Trillion In Billionaire Wealth For Tax Extraction

Courtesy of ZeroHedge View original post here.

Congressional Democrats are setting their sites on US billionaires – and the roughly $5 trillion in wealth held by them, according to Bloomberg.

In the last five years, this exclusive group of more than 800 billionaires tracked by the Bloomberg Billionaires Index has more than doubled its collective net worth. And according to Democrats, these unrealized gains should be ripe for the picking.

Under the rules, investment returns are only taxed when assets are sold, and the wealthy have the flexibility to only rarely sell, if ever. For Democrats, that’s a problem that requires a creative — some say outlandish — solution. Specifically, a “billionaire’s tax,” which would be an unprecedented annual levy on the investment gains of America’s richest. -Bloomberg

Advocates of the proposal – spearheaded by Senate Finance Chair Ron Wyden (OR) say it will combat inequality by hiking the effective tax rate on billionaires – who "can entirely avoid income taxes by holding assets until they die," according to the report.

Under current rules, the ultrarich can entirely avoid income taxes by holding assets until they die. If they need money — and many have far more than they could ever spend in a lifetime — they can borrow against their assets, a tax-avoidance strategy known as “buy, borrow, and die.”

"Those three things get them out of paying taxes,” Wyden said earlier this month. “Nurses and firefighters pay taxes every year, and under my plan, billionaires will, too.”

On Monday, House Speaker Nancy Pelosi told CNN: "We probably will have a wealth tax."

Treasury Secretary Janet Yellen was a bit more careful in her wording than Pelosi – saying during a Sunday CNN appearance: "I wouldn’t call that a wealth tax, but it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals and right now escape taxation until they’re realized."

Billionaires are predictably pissed.

"We should


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September New Home Sales Explode Higher

Courtesy of ZeroHedge View original post here.

Following the surprise upside surge in existing home sales, analysts expected new-home-sales to accelerate further in September but they literally exploded higher instead. After a downward revision to -1.4% MoM in August, September new home sales screamed 14.0% higher MoM in September – the biggest jump since July 2020…

Source: Bloomberg

New home sales are still down 17.6% YoY however.

New Home Sales SAAR jumped back to its highest since March…

Source: Bloomberg

Echoing Case-Shiller's recent data, median new home price rose 18.7% YoY to $408,800; average selling price at $451,700

This comes as quarterly home orders at PulteGroup Inc. missed estimates, the Atlanta-based builder said earlier on Tuesday. Pulte, faced with a backlog of contracts, have slowed sales while it catches up on production.

“The housing industry continues to experience robust demand, but significant disruptions in the manufacture and supply of many building products are extending overall build cycles,” Ryan Marshall, Pulte’s chief executive officer, said in a statement.

The Northeast saw the biggest (+32.3%) surge in sales while the MidWest saw sales slide 1.5%.





Trump Media SPAC Slides After Unveiling Plans For Paid Streaming Service

Courtesy of ZeroHedge View original post here.

It has been a wild week of trading for the SPAC presently known as DWAC after traders were blindsided last week by the announcement of a deal between the obscure SPAC and President Trump's nascent "Trump Media and Technology Group", meaning the combined company will become the home of Trump's "TRUTH" social network.

But as demand for the SPAC's richly valued shares (with a TTM multiple of 0 since neither firm has any revenue or sales, just projections) has waned after a meme-stockian retail-driven runup (which saw some institutional investors miss out on one of the biggest trades of the year) saw the market cap of the company explode into the billions, it looks like President Trump – who stands to benefit the most financially from this project give his massive ownership stake – is doing everything he can to pump up the valuation once again.

In a statement released Tuesday, Trump announced that the combined company is preparing to launch a paid streaming service (alongside other businesses that have been bandied about) in an effort to "explain more about what I am doing and why." He added that "this endeavor is about much more than politics…this is about saving our country."

Right now, censorship on social media platforms is rampant, with not just political content, but content from scientists, philosophers and other 'unorthodox' thinkers – or anything that goes to far to cross the SJWs' ideological boundaries – being reflexively censored.

Because of this corruption, Trump feels compelled to act.

The corruption of these platforms cannot be ignored. We have fallen far down the “slippery slope” of censorship in our country, and the topics that Americans are increasingly forbidden to debate are among the most important issues of our day. This wildly aggressive censorship and “cancel-culture” is not only un-American—it has direct, real-world consequences. Most obvious are the many catastrophes unfolding under the current administration: the calamitous Afghanistan withdrawal, the disaster at the Southern Border, runaway inflation, and the multi-trillion-dollar socialist spending nightmare, just to name a few.

These "silencing and cancellation" effects are more subtle but equally destructive to our society. An obvious consequence of this is polls show that Americans have little


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Bond Market Crash Will Surprise Only The Uninformed

Courtesy of ZeroHedge View original post here.

By Bloomberg macro commentator and analyst Tommi Utoslahti

A global bond market meltdown is only a matter of time. One fine morning, traders will wake up to find all benchmark yields sharply higher, 10 to 20 basis points or more, and no buyers around.

Bond price indicators are flashing deep red right now, from decade-high inflation expectations to waning auction demand and whispers of depressed liquidity. Last week, the U.S. 5-year breakeven rate briefly topped 3% for the first time since the maturity was restarted in 2004

Bloomberg’s U.S. Treasury index is on track for its worst annual loss since 2009, and that’s only the beginning. Expect the Treasury 10-year yield to top 2%, Bunds to end their two-year trek in the sub-zero wilderness and Gilts to continue pushing higher toward levels last seen in 2018.

It’s not a taper tantrum. The time for that passed months ago, and the Fed’s well-telegraphed intention to start slowing its $120 billion monthly bond purchases at next week’s meeting is all baked in.

Bonds will collapse on investors’ delayed realization that inflation is here to stay, and won’t be tamed without serious policy tightening.

Equally serious concern stems from the fact that a big part of the recent inflation spike is supply-shock driven. Conventional policy tightening would do little to resolve supply-chain problems, leaving policy makers unable to directly influence rising prices.

If all that sounds unrealistic, or just a mere tail risk scenario, consider this: wagers for Bank of England rate hikes over the next year have been ramped up to more than 100 basis points in only a few weeks. A Hundred basis points! Saying that aloud would have been seen as a joke as recently as early September.

Perma-bulls often point out that yields fell following the 2013 taper tantrum. That is correct, but it only happened after the Treasury 10-year yield had surged about 140 basis points in four months and took well over a year to return to where it was before the selloff. A similar move now from August lows would take Treasuries above 2.5%.

The biggest difference is in the macro backdrop. In 2013, the headline U.S.


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Beijing Tells Evergrande’s Billionaire Founder To Repay The Insolvent Company’s Debts

Courtesy of ZeroHedge View original post here.

Hui Ka Yan, founder of China Evergrande Group, had once amassed a fortune of $42.5 billion, placing him at the top of the wealth rankings for all of Asia. But 73% of that immense fortune has now evaporated, and the tycoon will almost certainly lose even more as anxious creditors, suppliers and homebuyers besiege Evergrande’s offices.

But that's not nearly enough for Beijing.

In a new twist of how China may soon conduct corporate bankruptcies, Chinese authorities told Hui Ka Yan to use his personal wealth to "alleviate" China Evergrande Group’s deepening debt crisis, Bloomberg reported according to people familiar with the matter.

Beijing’s "directive" – which to us sounds just a bit m,more forceful than merely "urging" – to the Evergrande founder came after his company missed an initial Sept. 23 deadline for a coupon payment on a dollar bond, and takes place as local governments across China are monitoring Evergrande’s bank accounts to ensure company cash is used to complete unfinished housing projects and not diverted to pay creditors, the people said.

According to Bloomberg, the demand that Hui to breach the corporate veil and "tap his own fortune to pay Evergrande’s debt adds to signs that Beijing is reluctant to orchestrate a government rescue, even as the property giant’s crisis spreads to other developers and sours sentiment in the real estate market."

Our read is slightly different: Beijing will still have to orchestrate a government rescue because while Yan's fortune has shrank to "just" $7.8 billion from its 2017 peak of $42 billion, that would be a tiny fraction of the $300+ billion in debt and other liabilities the company owes. As such, Beijing's demand is merely a warning to other oligarchs: if your company became over indebted and is suddenly no longer viable, your own fortune will be at risk.

Bloomberg's notes as much, saying that it was unclear whether Hui’s fortune is big and liquid enough to make a sizable dent in Evergrande’s liabilities, which swelled to more than $300 billion as of June. The developer’s dollar bonds are trading at deep discounts to par value as investors brace for what could be one of China’s largest-ever debt restructurings.

To be sure, Beijing won't have


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US National Home Prices Accelerate At Record Pace In August, “Amplified By Investor Demand”

Courtesy of ZeroHedge View original post here.

Home sales are rebounding, despite median prices at record highs and mortgage rates notably higher, and that demand-pull is evident in August's Case-Shiller Home Price data (the latest data released today from this heavily lagged series). The data was slightly mixed however with the 20-City Composite Price Index growth decelerating from +20.02% YoY in July to 'only' +19.66% YoY in August; while the National Home Price Index growth accelerated from +19.75% YoY to +19.85% YoY in August…

Source: Bloomberg

It is worth noting that the 20-City Composite Price Index has not seen prices fall on a MoM basis since March 2012

Source: Bloomberg

Phoenix, San Diego, and Tampa reported the highest year-over-year gains among the 20 cities in August.

Phoenix led the way with a 33.3% year-over-year price increase, followed by San Diego with a 26.2% increase and Tampa with a 25.9% increase.

Eight of the 20 cities reported higher price increases in the year ending August 2021 versus the year ending July 2021.

“Persistently strong demand among traditional homebuyers has been amplified by an increase in demand among investors this summer,” said Selma Hepp, deputy chief economist at CoreLogic.

“While strong home price appreciation rates are narrowing the pool of buyers, particularly first-time buyers, the depth of the supply and demand imbalance and robust demand among higher-income earners will continue to push prices higher.”

All of which explains why (according to UMich sentiment surveys), homebuyer sentiment is firmly at record lows driven by price:

Source: Bloomberg

But, what is missing from that 'survey' is the elephant in the room… Wall Street investors. As we noted previously, how is it that homes are both unaffordable and soaring in price?

As with so many other things that shouldn’t be, the answer can be found at the intersection of Wall Street and easy money.





Terrific Tuesday

4,577! 

That's a new all-time high on the S&P 500 and it came on an exceptionally low-volume day but let's not quibble – people are buying whatever Corporate America is selling, whether it's a coin they just made up last week or a SPAC they made up yesterday – form eschews substance these days and the less you offer – the more they will pay.

Does that no make sense?  Well, then you are playing the markets incorrectly, my friend!  Aside from a few companies that have gotten trashed – earnings don't seem to matter, nor does guidance.  Having a pulse seems to be enough to get investors excited and lifting stocks higher.  Tesla (TSLA) sold 100,000 cars to Hertz (Bankrupt) for $420M and the stock jumped $120Bn in value.  Even if each car was sold at a 250% profit – it would still have gained 100 times more than they could earn selling the cars — in a day.

Tesla | Barron'sAnd, of course, logically, these are the same 100,000 cars that would have been sold to someone else had Hertz not bought them – or were we worried that TSLA wasn't going to sell out their production prior to this?  No, that wasn't the case at Tesla's entire production for 2022 is projected to be 1.3M cars and it was going to be 1.3M before and after this deal.  

This chart is from Barron's way back on October 21st, when TSLA was only trading at $865.80, which was roughly $860Bn in market cap.  Since then, it has gained almost $200Bn – the entire market cap of Toyota Motors (TM) – without any of the fundamentals actually changing (it's only been a week!).  Toyota makes 1.2M cars PER MONTH and they also make $1.6Bn PER MONTH – also as much as TSLA makes in a year.  

Where is the logic to these valuations?  There isn't any.  The total global auto market is 80M cars per year – even if TSLA sold them all it would be a hell of a stretch to get to $1Tn but, currently, TSLA has 2% of the market yet their Market Cap is equal to the entire rest of the
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Despite Tesla’s Raging Success, Cathie Wood’s ARKK ETF Is Still Down 2% On The Year

Courtesy of ZeroHedge View original post here.

There's no doubt that Tesla has been the story this week. The stock rocketed higher by more than $100 per share – or several Ford market caps – on Monday to open the week following an MS upgrade and news that Hertz would be buying 100,000 vehicles from the automaker.

But even this meteoric rise hasn't been enough to keep Cathie Wood's flagship ARKK ETF ahead of the S&P 500 so far this year. 

Despite the fact that Tesla makes up 10% of the $21 billion ETF and that Tesla is up 45% this year, ARKK is still down by about 2% so far in 2021, according to Bloomberg.

The inability to outperform the market can be attributed to 34 of ARKK's 46 holdings falling since early August, Bloomberg data showed. Names like Roku and Zoom have weighed the heaviest on the ETF's performance, once again proving exactly how integral Tesla has been to Wood's success. 

Meanwhile, as we have noted, Wood has been selling Tesla on the way up, reducing her firm's exposure to the name as it has grown in size. 

Matt Maley, chief market strategist for Miller Tabak + Co., commented: “Teladoc, Roku, Zoom, Zillow, etc — they’ve all performed quite poorly. It shows that the continued rally in the big innovation stocks is really starting to narrow quite a bit.”

Despite the poor performance in 2021, ARKK is still up about 500% since 2016. Almost all of the ETF's profound success has been a result of Tesla growing more than 10x in size over the last 24 months. 

Maley says that other parts of Wood's portfolio may still have further to stumble. He concluded: “A lot of these innovative stocks got an extra boost from the Fed’s massive stimulus program. Investors realize that the Fed is going to pare back.”





 
 
 

Phil's Favorites

4 key issues to watch as world leaders prepare for the Glasgow climate summit

 

4 key issues to watch as world leaders prepare for the Glasgow climate summit

A mural near the site of COP26, the 26th Conference of Parties to the U.N. Framework Convention on Climate Change. Jeff J Mitchell/Getty Images

Courtesy of Rachel Kyte, Tufts University

Glasgow sits proudly on the banks of the river Clyde, once the heart of Scotland’s industrial glory and now a launchpad for its green energy transition. It’s a fitting host for the ...



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Zero Hedge

The True Feasibility Of Moving Away From Fossil Fuels

Courtesy of ZeroHedge View original post here.

Authored by Gail Tverberg via Our Finite World blog,

One of the great misconceptions of our time is the belief that we can move away from fossil fuels if we make suitable choices on fuels. In one view, we can make the transition to a low-energy economy powered by wind, water, and solar. In other versions, we might include some other energy sources, such as biofuels or nuclear, but the story is not very different.

The problem is the same regardless of wh...



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Politics

Trump wants the National Archives to keep his papers away from investigators - post-Watergate laws and executive orders may not let him

 

Trump wants the National Archives to keep his papers away from investigators – post-Watergate laws and executive orders may not let him

Nixon resigned after tapes he had fought making public incriminated him in the Watergate coverup. Bettmann/Getty

Courtesy of Shannon Bow O'Brien, The University of Texas at Austin College of Liberal Arts

The National Archives is the United States’ memory, a repository of artifacts that includes everything from half-fo...



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Biotech/COVID-19

An infectious disease expert explains new federal rules on 'mix-and-match' vaccine booster shots

 

An infectious disease expert explains new federal rules on ‘mix-and-match’ vaccine booster shots

Discuss with your doctor whether or not you need a booster – and if so, which vaccine will work best for you. Justin Sullivan/Getty Images News via Getty Images

Courtesy of Glenn J. Rapsinski, University of Pittsburgh Health Sciences

Many Americans now have the green light to get a COVID-19 vaccine booster – and the flexibility to receive a different brand than the ori...



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Digital Currencies

Bitcoin: why its value has rocketed once again

 

Bitcoin: why its value has rocketed once again

Shutterstock/rzoze19

Courtesy of Andrew Urquhart, University of Reading

Bitcoin’s journey into mainstream finance has reached another major milestone – and another record price. The cryptocurrency was trading at US$66,975 (£48,456) following the launch of an exchange traded fund (ETF) in the US w...



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Chart School

Price and Volume Swing Analysis on Bitcoin and Silver

Courtesy of Read the Ticker

Many take guidance from news, pundits or advisors. Well sometimes the swings of price and volume are a better measure of what happens next.

The big boys do not accumulate or distribute in single 1 second trade, they build positions over weeks, months and years. They use price swings in the market to build or reduce positions, and you can see their intent by studying swings of price and volume and applying Tim Ord logic as written in his book called 'The Secret Science of Price and Volume: Techniques for Spotting Market Trends, Hot Sectors, and the Best Stocks'.

Tim Ord is a follower of Richard Wyckoff logic, his book has added to the studies of Richard Wyckoff, Richard Ney and Bob Evans.

Richard Wyckoff after years of...

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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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