Stocks, Gold, Silver, and the printing press.

[smokingman]

Sunday 2/1/2015


French finance minister Michel Sapin meet with the Greek finance minister Yanis Varoufakis on Sunday.After he held a press conference supporting restructuring the Greek debt.

Add to this the Ms Prentoulis(Syriza’s London spokesman)held a press conference and said "Syriza’s London spokesman "In 1953 a big part of the German debt was written off and then the repayments were associated with growth. This is what Syriza is asking for Greece as well,"
Europe Fractures: France "Prepared To Support Greece" In Debt Renegotiations | Zero Hedge

Next to ask for restructuring/write offs France...then Spain.

 

[smokingman]

Among the S&P 500 companies that have issued guidance for the first quarter so far, a whopping 87% warned their results will likely miss expectations, according to Goldman Sachs. That's the ugliest prediction metric ever, at least in the eight years Goldman has been tracking it.
Goldman called the level of negativity "astounding"
Doom and gloom dominates Corporate America - Feb. 2, 2015

Sounds like a good time to raise taxes.
Offshore corporate cash piles at risk from Obama tax plan - Feb. 2, 2015
Obama's 2016 budget outlines plans to raise $238 billion by imposing a one-off, 14% tax on about $2 trillion in earnings that U.S. companies have accumulated in foreign countries.
I love how the article,and most of the media are calling it a one time tax and in the same article mention all future over seas earnings would be taxed at 19%

Obama's one-time tax, and his plan to impose a 19% tax on future overseas earnings, is facing criticism from all sides. First and foremost, experts don't think they'll be implemented.

Aside from the obvious problem of raising taxes,what legal authority does he have to tax anything overseas?
I guess we will see what the new congress does with this.

 

[pudly]

Sounds like a good time to raise taxes.
Offshore corporate cash piles at risk from Obama tax plan - Feb. 2, 2015
Obama's 2016 budget outlines plans to raise $238 billion by imposing a one-off, 14% tax on about $2 trillion in earnings that U.S. companies have accumulated in foreign countries.
I love how the article,and most of the media are calling it a one time tax and in the same article mention all future over seas earnings would be taxed at 19%

Obama's one-time tax, and his plan to impose a 19% tax on future overseas earnings, is facing criticism from all sides. First and foremost, experts don't think they'll be implemented.

Aside from the obvious problem of raising taxes,what legal authority does he have to tax anything overseas?
I guess we will see what the new congress does with this.

Just looking to give companies more incentive to move offshore to the vast majority of countries that don't work this way.

 

[GodFearinGunTotin]

Ideally rather than arguing over whether it's legal/proper/productive to tax overseas earnings, the "other" side would produce a budget, cutting programs and departments, equal to 2x whatever tax increases he proposes.

 

[smokingman]

Baltic dry index closed at 559.This is the lowest level since the creation of the index in 1985.Just a reminder on 20 May 2008, the index reached its record high level of 11,793 points.

You can now buy a bulk carrier for less than half of what it cost to originally build(many less than 5 years old).
Vessels For Sale - DRY CARGO - Bulk Carrier

http://www.reuters.com/article/2015/02/04/copenship-bankruptcy-idUSL6N0VE4AE20150204

http://www.bloombergbriefs.com/2015/01/20/energy-shipping-may-add-billion-dollar-15-caseload/

The number of Chapter 11 bankruptcies involving $1 billion or more in liabilities totaled 13 last year, Bloomberg data show, up from 10 cases in 2013 and more than double the six filed in 2007 before the economic recession.
Two of last year’s billion-plus fillings involved transportation companies: Eagle Bulk Shipping and Genco Shipping. Both drybulk cargo shipping firms

 

[smokingman]

Official CPI for 2014 report 2014 summary,and link to full text.About the only thing that did not increase where petroleum products,and most of that decline was in the last 2 months of the year.And just a reminder,the US dollar has gained value when compared to the rest of the world for 2014,if it had not(ie QE ended)the numbers would have been far worse.
Year in Review
The CPI rose 0.8 percent in 2014 after a 1.5 percent increase in 2013. This is the second-smallest December-December increase
in the last 50 years, trailing only the 0.1 percent increase in 2008. It is considerably lower than the 2.1 percent average annual increase over the last ten years.

The energy index, which rose slightly in both 2012 and 2013, declined sharply in 2014, falling 10.6 percent, the largest decline
since 2008. The gasoline index was the main cause of the decline, falling 21.0 percent, with most of the decrease over the last few
months of the year. This followed a 1.0 percent decline in 2013. The fuel oil index declined as well, falling 19.1 percent in 2
014 after a 1.8 percent decline in 2013. In contrast, the energy services index accelerated in 2014, rising 3.7 percent after a 2.4 percent advance
in 2013. The electricity index rose 3.1 percent in 2014, similar to its 3.2 percent advance in 2013. The index for natural gas,
which fell slightly in 2013, rose 5.8 percent in 2014, ending a streak of five years of declines. Despite the decline in 2014, the energy
index has risen at a 3.2 percent annual rate over the past 10 years.

The index for food rose 3.4 percent in 2014, a substantial acceleration from its 2013 increase of 1.1 percent. The index for food
at home rose 3.7 percent in 2014 after rising only 0.4 percent in 2013. All six major grocery store food group indexes increase
d in 2014. The index for meats, poultry, fish, and eggs, which rose 2.9 percent in 2013, increased 9.2 percent, its largest December
-December increase since 2003. The index for beef and veal rose 18.7 percent in 2014. The index for dairy and related products rose
5.3 percent in 2014, while the index for fruits and vegetables advanced 3.2 percent; both had declined in 2013. Also turning up after
declining in 2013 was the index for other food at home (up 1.5 percent) and the index for nonalcoholic beverages (up 0.7 percent
t). The only major grocery store food group index not to accelerate was cereals and bakery products, which repeated its 2013 increase of 0.5
percent. The index for food away from home rose 3.0 percent in 2014 after increasing 2.1 percent in 2013. Over the last ten yea
rs, the food index has risen at an average annual rate of 2.7 percent.

http://www.bls.gov/cpi/cpid1412.pdf



*one last note on the official CPI data.This from the report.

New Estimation System
Effective with the release of the January 2015 CPI on February 26, 2015, the Bureau of Labor Statistics will utilize a new esti
mation system for the Consumer Price Index. The new estimation system, the first major improvement to the existing system in over 25 years
is a redesigned, state-of-the-art system with improved flexibility and review capabilities. For more information on this new system,
please see http://www.bls.gov/cpi/cpinewest.htm.

 

[Hohn]

Hey at least their copping to the manipulation of CPI

 

[smokingman]

Baltic dry index closed at 559.This is the lowest level since the creation of the index in 1985.Just a reminder on 20 May 2008, the index reached its record high level of 11,793 points.

You can now buy a bulk carrier for less than half of what it cost to originally build(many less than 5 years old).
Vessels For Sale - DRY CARGO - Bulk Carrier

UPDATE 1-Danish shipping company Copenship files for bankruptcy | Reuters

Bankruptcy & Restructuring | Bloomberg Briefs | Financial Market Newsletters

The number of Chapter 11 bankruptcies involving $1 billion or more in liabilities totaled 13 last year, Bloomberg data show, up from 10 cases in 2013 and more than double the six filed in 2007 before the economic recession.
Two of last year’s billion-plus fillings involved transportation companies: Eagle Bulk Shipping and Genco Shipping. Both drybulk cargo shipping firms

Dry bulk cargo shipping is dying.There is no demand.
The BDI dropped to 509 upon opening this morning.In short it means it currently cost half what it did in 1985 per ton to ship bulk dry cargo.Mind you that is with 4 times the fuel cost,and more than double crew costs compared to 1985.
DryShips Inc.

 

[Hohn]

Help me out here-- how do we know that Baltic dry isn't crash just because they massively overbuilt new and bigger ships? That seems to be relevant to the discussion. Cruise ships were also overbuilt which caused cruise rates to crash a few years ago.

 

[ruger1800]

http://www.zerohedge.com/news/2015-03-01/david-stockman-warns-its-one-scariest-moments-history

 

[pudly]

The Texas governor has just signed a bill authorizing the creation of a Texas gold repository and to repatriate $1 billion of gold from the NY Fed. This is actually a big deal, given the "rehypothecation" of gold that the Fed has been engaging in. Multiple countries have demanded their gold be repatriated as they don't trust that the Fed has all the gold it claims. Getting your gold out first means that you won't be the one caught short when the time comes.

Writing's On The Wall: Texas Pulls $1 Billion In Gold From NY Fed, Makes It "Non-Confiscatable"

 

[pudly]

[video=youtube_share;RJm3cRRvPoM]http://youtu.be/RJm3cRRvPoM[/video]

 

[rhino]

That's an interesting experiment. I suppose that people are conditioned to "resist" anyone who approaches them on the street trying to sell them something. I can see having a tape loop in the big city for handling such thing.

However, if you stop to talk and actually listen to the guy . . . and you still don't think it's worth considering or at least asking what the "catch" is . . .

 

[pudly]

Anyone who knew the real value of silver would have at least hesitated before saying no, so it appears that none of them knew. The fact that he had a microphone and camera screams "experiment", so it could be legitimate or not. Then the fact that he offered several times to have it authenticated seals the deal that they didn't know and didn't care.

 

[rhino]

Of course, given the general public's ignorance of, well, everything, perhaps we should not be surprised.

 

[snorko]

I saw a similar video once of a guy trying to buy a value meal or something at Taco Bell with a gold U.S. Eagle which of course has a face value of $50.00.

 

[pudly]

Think of the following when you see the scenes coming out of Greece.

 

[JettaKnight]

The video only points out human risk aversion. There's a chance this deal is legitimate and lots of money can be made. And there's the chance that it's scam. Humans are conditioned to avoid loss.

Do another experiment: offer a bet on coin flip. People will flat out reject 5:1 payouts or more! Why? Simple probability theory states you'll come out ahead, but it's that chance that you'll lose money that trip people up. Me, I'll take 1.1:1 and we'll flip till morning comes....

 

[JettaKnight]

Interestingly, I believe the price of silver is 20% lower than when this thread started. And gold is lower too.
Crude oil, down 40% or so.

S&P 500, doubled.

Draw your own conclusions.

 

[pudly]

Conclusion:

Gold and silver are cheap.
S&P 500 is overpriced.