Saturday, 24 August 2013

Aug 24 2013 Weekend Market Comment

Aug 24 2013 -  Ya we could talk about Microsoft stock shoot up because Steve Ballmer is leaving. You know you're a bad manager when a huge company like Microsoft stock goes up 20% and more on the news you're leaving!

Microsoft in its current state is a hard company to run. It’s less a corporation than it is a pile of vaguely related businesses, including gaming (Xbox, Kinect), software (Office, Windows), hardware, and web services (Bing, cloud versions of staples like Office). But that lack of focus is due in no small part to Ballmer, under whose leadership Microsoft has had a habit of acquiring companies, and then absorbing them badly. One of them, Andy Rubin, went on to create Android and run the Android division of Google. It will not matter in the end, with it's "we want to be IBM light" core principles, Microsoft has not been relevant for years.

We also could dwell on the three hour computer freeze at the Nasdaq, but in my mind they are all non-events and if you care you can read about it on any financial site like CNBC Yahoo Bloomberg or the Financial Times.

But lets get on with talking about how to make some real money. The Market showed some surprising strength this week. After six days down on the seventh day they did rally and the traders saw it was good.

Of course that has turned or indicators up a bit. Below is our green arrows graph -- of course the mind can easily picture a bounce here just like mid -April, but that’s the discipline, because our top indicator is still pointed down and we could get a little W bounce like the last turn around. Or the markets could fall a part period remember the market can do what it wants we must trade what we are given and so far we do not have a “green arrow” and so no license to sprout bulls-horns.


OK so we are probably ready for a bounce, I expect it but this one could be very short lived. As sleepy low volume August retreats and the money mangers get back from the Hamptons,  navigating what's ahead in September could be more than a little scary. September is historically the worst month for stocks but this year, the calendar is a minefield for markets. From the Federal Reserve's mid-month meeting to German elections, Japanese and U.S. tax changes, there's a long list of potential catalysts for pain.

The Dow, on average, has been down about one percent in September, and so far this month, it's down more than 3 percent, its worst monthly performance in more than a year. The weakness shows in the NYSE market forces.


It also shows in just how extended this market is over its averages. This is the S&P500 over its 200 day moving average (brown line); this has been one very long running bull we are really way up over the averages.


Now think about what is coming this fall, here are the three horsemen of the apocalypse.
1) U.S. Budget Deadline
2) Tapering and with it rising bond yield
3) Emerging market meltdown.

Add to that China might be in a financial pull back, also the rising tensions in places like Egypt and Syria who are just begging for some intervention.

So lets start with the budget deadline
Without a deal this fall, the U.S. government will shut down. Republican leaders fear their party would end up getting blamed, leading to disastrous results in the 2014 congressional elections. The options include using a deadline in November for raising the nation's borrowing limit as leverage to push Republican causes. Their main priorities are weakening Obama's signature healthcare changes, securing broad tax reforms and getting Obama to approve the Keystone XL oil pipeline from Canada and the northern states to Texas Gulf refineries. Meanwhile the President has pushed back sighting the republican position as a childish and dangerous game. In any case the market hate uncertainty if the two parties cannot agree with the market this overbought the sell off could be sharp.

Post Tapering World
As I have said before the taper must happen because of three key reasons:

  1. Unemployment drops steadily, yes they are lower quality McJobs but people are slowly sucking it up and getting back to flipping burgers instead of building massive McMansion houses.   
  2. Central bankers are starting to worry that the benefits of additional QE are starting to be offset by the risks. Central bank balance sheets have have become so swollen they’ll prove difficult to unwind once inflation sets in; and, QE has inflated asset prices to levels where when policy starts to normalize, financial crises are likely to ensue.
  3. The U.S. bond purchase program is swelling the balance sheets of banks. The absence of significant inflation in the past few years does not mean that it won't rise in the future. When businesses and households eventually increase their demand for loans, thanks to QE commercial banks have way more than adequate capital. Money that could be lent, but is not, so called "Excess free reserves" are piling up.  Up until now that liquidity has been used to make risk free money buying U.S. treasuries but rising rates means that game is over, now banks must lend to customers to make money. The resulting growth of spending by businesses and households might be welcome at first, but it could soon become a source of unwanted inflation.


Now contemplate that:  Low paying jobs + higher interest rates + aggressive lending = STAGFLATION. The worst of all possible outcomes. That horrible world of things cost more but buying power is dropping. The immediate response will be to raise interest rates to curb inflation but that will make it worse not better.

Emerging Market Meltdown
China growth has flattened and the government has curbed the commodity hoarders. The results are that the rest of the BRIC countries are in a tailspin. No one need Brazil, Australia, Russia. India’s currency is spiralling out of control.

Turns out the end of quantitative easing has spelled an end to easy money for more than just the USA investors around the world wan their money back Here is a good piece on CNBC

Now, as the Fed appears ready to lighten up on the support it is offering to the US market, money is retreating from emerging markets—fast. Here’s a look at outflows from dedicated emerging-market mutual funds in recent weeks by Morgan Stanley:
As the rip-tide of liquidity pours out of a country, it drives the value of the currency lower. That makes imports of crucial foreign products—such as energy—costlier. The surge in spending on imports worsens the current account deficit. That prompts still more worries about investing, setting off a further outflow of investor cash. The decline of the currency gets deeper. A spiral can ensue until you hit something known as a “sudden stop,” which pushes a country into default.

Such tidal waves of foreign investment into and out of emerging markets are a well-known problem, leading to a range of banking collapses, inflationary spirals, sovereign defaults and currency crashes. (Some have referred to them as “capital-flow bonanzas.”) They were at the heart of a slew of crises in the 1990s: Argentina, Thailand, Korea, Mexico, Turkey, Chile and, yes, Indonesia.

How to Trade This
Well you should have some cash waiting for a green arrow, but I would not go as all in with September looming.  Our TBT bet continues to work; there has been a small “flight to safety pull back” but long-term bonds yields should pass 4% and TBT will climb further. You might consider some Emerging Markets Short ETF (ticker EUM). Canadian dividend powerhouse Exchange Income Fund offers a 7% yield and is looking like a good industrial play.

The fortunes of Teck Resources have been brightening.


But right now I am mostly in cash and Canadian pipelines.



Cost of a US Dollar Skyrockets (giggle snort)
Watch Video Here

After fluctuating wildly this morning between $1 and $35, the price of money spiked to an unprecedented $90 a dollar in afternoon trading, plunging international financial markets into chaos. “Wall Street erupted into absolute pandemonium once the price of a dollar jumped past $50—if this keeps up, I wouldn't be surprised if the dollar reached $275 or higher by the closing bell,” said CNBC analyst Marvin Kanisch, noting that the price of 20 dollars had soared well over $1,000 amid frenzied trading before plummeting back down to a more reasonable $430, while the price of five dollars remained steady at $5. “Everywhere you look, panicked investors are clamoring to exchange their dollars—which can only purchase about two cents apiece right now—for more stable dimes and quarters, which are trading at $18 and $32.25, respectively. And with the price of pennies falling below $140 an ounce, it’s easy to understand the sense of urgency. Bottom line: It’s a seller’s market.” With the skyrocketing dollar-to-dollar exchange rate prompting Americans to hoard as much money as possible, President Obama is expected to address the nation later today about easing America’s dependence on domestic currency.



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Monday, 19 August 2013

The Power of Music


“Music is the universal language of mankind.”
― Henry Wadsworth Longfellow







What is it in the power of Music that has built nations, sent men to war and an early demise. How can it stir the soul and built patriotism and religious fervor?

Here are the five most stirring anthems I know and not one of them is a National Anthem:

(click links to play)


Hallelujah 

Conductor

Andre Rieu














U2 

I still haven't found what I'm looking for - 

Performed by 

Harlem Gospel Choir 







Saturday, 17 August 2013

Aug 18 2013 Weekend Market comment

Aug 18 2013 - Well this week if you stayed up past midnight and looked overhead, you were treated to annual spectacle of the Perseid meteor shower. Of course this is not all that fell down "right on schedule", as I warned last week, the market sell off, as previously predicted, came right on time. This was the worst week for the US market since the summer of 2012. The DOW is down 2.3%, Cisco and Wal-Mart guided lower, manufacturing numbers came out below expectations this week.

If you followed my advice in the two prior Market Comments, you would have been out of high volatility stocks and in cash, TBT, and with tight stops in some broad stable indexes -- like EWG the German index ETF. In other-words your pain was minimal.
(click any graphic to enlarge)

No one can predict the markets but you can position yourself in anticipation of likely events. Since last November the S&P 500 is up some 25% so of course a pull back is natural and actually a good thing for the market. Oddly this sell off is not broadly based, a few super stock like Apple are keeping the index up, but some 400 of the big board stocks have hit their 12 month low. Hardest hit were Airlines and Home builders, but more concerning was a pullback in retail stocks after the warning from Wal-Mart.  A big part of what is driving this fear is the rapid rise in rates for the US 10 year treasury. For the Federal Reserve to lose control of the 10 year note is unprecedented. Of course that is exactly why we are in TBT. I would not buy most equities now but TBT continues to blaze ahead as bond price soar.

The whisper number of the street is that the sell off goes to 1600-1555. But really who cares, we don't catch falling knives but when this turns back up you will have a great buying opportunity to use your cash positions.

Here is the chart for the SPY S&P 500 ETF. Friday the sell off took us to 165.28 the 67 day average (red line). I expect there will be support about 155.50 of 1555 on the S&P 500. On the top of the graph is the 7 period RSI notice how in this recent bull market we seldom do more than kiss the RSI 30 level.



Of course this is no time to guess if this is the bottom, For that we will wait for a signal from the green arrow graph.


The Big Question?
When there is a pull back you always ask is it just a blip or a turn in the market. One Place to look is transportation.  So lets look at the company that ships all that dollar store junk from China to your local port. A.P. Møller-Maersk’s quarterly revenue fell 9% to 81 billion Danish kronor ($14.16 billion) in the second quarter.  Profits declined 13% to 4.89 billion kronor. Lower oil production at its Maersk Oil division weighed on results. The good news came out of its Maersk Line container shipping division where profits nearly doubled. The company raised its full-year earnings forecast but warned that the outlook “is subject to considerable uncertainty, not least due to developments in the global economy.”

The takeaway: While the profit at Maersk shipping division is heartening, it was driven by cost-cutting rather than rising revenues. The company spotlighted improvement in the efficiency of its vessel network and declining fuel expenses. Volumes were up 2.1%, however.

That says that things are getting better slowly for the world economy, so this is most likely a blip than a crash. For now you might go back and visit some of my stock picks in the prior Market Comments and get ready to buy on the turn.

Gold
In the last comment I mentioned that gold was nearing resistance and might retrace, well it did not. In fact if I had thought about my other comment, of how copper was breaking out and that the equity markets were weakling, I might have thought about a possible oversold bounce gold rally. In fact the setup was ripe, gold could break out and that is what happened, up 4% in a week. Still in the long run I think gold has seen its long term peak at 1800 and will one day continue down. I think the commodity trade short or long for now should be avoided. There are so many easy ways to make money right now.

Gold did well but the big pop was in miners, just look at last week for the gold miners ETF -- (ticker:GDX).


What is Working Now
One stock to consider after the pull-back is Electronics for Imaging.(Nasdaq: EFII)

Shares in TripAdvisor Inc. (Nasdaq: TRIP) fell more than 9 percent Wednesday after the CEO said a recent business model change has hurt revenue more than expected.

On Wednesday at the Canaccord Gennuity Growth Conference, Steve Kaufer, CEO of the Newton, Mass.-based travel website, said there have been fewer click-throughs to outside travel sites, and the higher price it can now charge since its model changed in June has not yet made for the lower volume, according to Reuters. Kaufer said he expects revenues to be back on track by the end of 2013, but probably not sooner.

Last month, in an interview with the Boston Business Journal about the change of model, Kaufer acknowledged it would hurt revenue in the short term, saying, “We were fairly certain when we launched it that it would hurt our revenue, and that was accurate. ... Some things help the consumer and do not help the top line. It will take us the rest of the year to regain the lost revenue momentum.”
The company’s stock fell to $73.55 over the course of the day Wednesday, but is still up 67 percent for the year. For the three months that ended in June, the company’s second quarter, revenue was $247 million, up 25 percent year-over-year, and net income was up 26 percent over the same time last year to $67 million, or 46 cents per share.

I love this company as a long term play. They will easily fix this misstep and people everywhere are hooked on TripAdvisor reviews.  Who would not want to own a company growing at 25% a year? Keep TRIP on your radar and in a few weeks/months, buy it when it bounces off the bottom.



Teck Cominco has had a great run lately, as mineral rebound a bit. Still this firm is highly tied to commodities and I am not ready to jump in at this time.


Warren Buffett Predicts His Future in 1975
In 1975, shortly after joining the board of the Washington Post Company, Warren Buffett wrote a letter to the chairman and chief executive, Katherine Graham. He had some advice as to how the company should invest its pension accounts.

All 19 pages were recently published by Fortune, and are well worth reading. Buffett, then just 44 years old, makes a succinct case against traditional stock picking and fund management.

As it turns out all he said then is coming true now. Berkshire's top 10 stock holdings are up an average of 0.7 percent for the third quarter, lagging the benchmark S&P 500 index's 4.9 percent gain.

Over 12 full months, the same story. Berkshire's stocks are up 17.7 percent (just 12.7 percent weighted) while the S&P is up 20 percent. It's true. Buffett's stocks have been falling behind the market.


Ferris Bueller's Day Off
The markets are in a summer pull back and there is not much to do but wait for the bottom. If you are thinking of taking a day off, you might want to consider taking off with the Ferris Bueller Ferrari.

One of three cars used for the '80s classic "Ferris Bueller's Day Off" will be on the block this weekend at Mecum Auctions in Monterey, Calif.

The car, one of the most famous in film history, is expected to sell for more than $250,000. But given the extravagant prices paid recently for Hollywood cars—such as $4.6 million for the Batmobile—some say Ferris' ride could fetch as much as $1 million. The Ferris vehicle is not an actual 1963 Ferrari California Spyder, but a replica produced by the specialized car maker Modena called the Modena Spyder.


Failure is not an option—it comes bundled with the software.



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Sunday, 11 August 2013

Aug 10 2013 - Weekend Market Comment

Aug 10 2013 - Be very very quiet say the traders and the hedge funds, we have only a few days to sneak away. OK maybe it is not a conspiracy but the markets are soft right now and the big money (just like us) is getting defensive.

But first I would like to gloat, you recall last week I said the VIX was way too low and sure enough this week the VIX is up on a soft pull back.

Since the market has rallied strongly from its 2012 lows and earnings have shown strength, now is a good time to trim back some positions. However, there is nothing fundamental that would necessitate a sell-off, simply taking advantage of short-term market highs.

I do expect that at any time, the market could easily be prone to a 4-6 percent pullback here. A lot of that is people looking to lock in profits. The overall look ahead is that things are getting better. The market is telling us 'pause to ponder' here, but the direction remains higher, if modestly so, by the end of the year. But this is just a pause in the context of a market that has done extremely well.

This is a good time to play conservative plays like broad ETFs, dividend plays like pipelines and to raise cash. Of course I have some graphs to back up my point. Don't forget a good pull back in the fall is common.

Retail Slump
Until now retailers like Macy's and Wal-Mart had been the bright spot in the US economy. Analysts at Retail Metrics recently identified some softness across the retail sector, raising a cautionary flag as companies head into the back-to-school selling season.

“Higher year-on-year gas prices, the payroll tax increase, summer doldrums, lack of wage gains, and competition from housing, autos and durable goods kept a lid on consumer spending in traditional retailers this month,” they said.

On the U.S. economic indicator calendar next week: two major inflation indices, jobless claims data and the housing starts report.

What the Charts Say
First off the financials are selling off.  This week the the XLF broke the 21 day moving average.


Here is our "Green Arrow" Graph and the weakness continues.



The NYSE %-over-50-day graph is looking week look at the MACD on top, momentum is dying. When it hits zero the pull back begins.


Although far from the perfect indicator the NASDAQ Summation Index is rolling over even though the NASDAQ itself is at record highs. This always a good time to "pull in your horns"


Ah but there is some good news in commodities -- copper has been gaining some ground. Long ago copper was a great indicator of economic strength since wiring is so important to the building trades. At least it is not selling off as bad. For now I will call this a "what the heck rally" In other words some funds bought a bit because $3.00 is very cheap for copper, also the latest manufacturing numbers out of China are not a sever as could be. Its gona take more than this to get me back in the commodity pits. These kind of moves can be very fickle.



What Works Now
I hope you all followed me into Electronics for Imaging mentioned back on June 29th. I would tighten your trailing stops to 5% for a guaranteed profit on this long run winner.


Springtime for Germany. The EWG German ETF continues to uber perform and delight my account. Expect this to do well until late September when Oktoberfest begins and the market turns to bratwest.


Gold
I had a reader ask me about the Gold situation.  Well as you can see gold bounced in early July off what the market thinks is the $1,200 cost of production. $1,200 is only the NEW cost of production. Shut down the new mines and stop paying overtime and suddenly the real cost of gold production drops to $400 an ounce. But what I find interesting is the lower part to this chart. Gold is priced in US Dollars. When the green line representing the US dollar is going down the black line of gold should be sharply up, but it is not. In other words there is panic at HSBC and they continue to dump a 1,000 tons of gold back in to the markets to feed the ducks. If money flows back to the US market expect the dollar to rally and gold sell off hard.



Now look at this, of course the market can go anyplace but I am going to be betting soon we have hit our heads on resistance and continue the march down. See the red line.


Well I am off to watch the sunset on my ocean view deck . . .




Sunday, 4 August 2013

USSR Bombs Canada

Aug 4 2013 -- My summer read that I am working on right now is, Area 51 by Annie Jacobsen. In Chapter 18 “Meltdown” she goes into some fascinating details about the only atomic device dropped by the USSR on another nation, in fact that turned out to be Canada.

Since the launch of the soviet built Kosmos 954 satellite in the fall of 1977, it fell to NORAD to tracking the satellite. By Christmas they were aware that it was in a decaying orbit.  Just before noon GMT on January 24, 1978 the U.S.S.R. lost its battle to try and stabilize the Kosmos 954 Satellite and it came hurtling out of the sky, finally crashing over a huge are area near Great Slave Lake in a remote part of Northern Canada.

Kosmos 954 was huge by satellite standards, as big as a school bus, 46 feet long, weighing 4.4 tons. The Satellite emitted powerful beams that were used to penetrate the ocean to track submarine movements.  Of course these penetration beams required a huge amount of energy, so it was powered by an on board nuclear reactor that was fuelled by over 110 pounds of Uranium 235. This material is the famous enriched uranium used in making atomic weapons.

As the orbit became less stable American experts from the Nevada test site, the CIA, a defence contractor known as EG& G and the DOE’s Emergency Command centre were involved in trying to determine what to do with the information. Ever since Orson Wells famous War of the Worlds broadcast the CIA was aware that mass hysteria could be worse than the actual incident. Central to their fear was that if some well meaning astrophysics or astronomers at a local university or planetarium misinformed the mayors of a few cities there could be panic and mass evacuations as one by one major metropolitan areas declared themselves the expected crash site of a fully operating live nuclear reactor dropping from the sky.
Timing could not have been worse; America was already suspicious about Nuclear power. For example this incident happened during the filming of the Hollywood movie “The China Syndrome

According to a CIA report declassified in 1997, Richard Mingus who worked at the U.S. Department of Energy’s emergency command centre in Las Vegas at the time spearheaded the American effort.  His job was fielding calls at the command centre, and to prevent Americans from panicking. All that the agency would report was that a “Space Aged Difficulty” had occurred. Nothing about a nuclear powered satellite with potential lethal fallout.  The Americans sent U2 spy planes over the Canadian North to survey the area. Meanwhile the DOE loaded radiation detection vans on to a transport plane.  They must have looked
quite the site when they were unloaded in the arctic. The American had always assumed they would be used in an urban area so the vans were painted to look like bread delivery vans. 

The Canadian effort fell to the newly created CNSC Canadian Nuclear Safety Commission. The project was dubbed operation morning light. In this video two bureaucrats talk about the only interesting thing they were ever involved in.


The largest piece of wreckage found was this massive highly radioactive chunk from the reactor core. But most of the material recovered was pinhead-sized dots of radioactive debris. The American say some 90 percent of the material was cleaned up, but their version is based on the assumption that most of the reactor vaporized on re-entry. Canadian sources say less than 1/10 of 1% of the 110 lbs. of uranium were found.  


After a few weeks of cleanup some fish were sampled for radiation and a few towns were survey for radioactive material and then everyone left.

There remains from this incident two interesting ideas to speculate on:

First what if some 30lbs of fission grade uranium is still in Slave Lake? What if this was found and later sold to terrorists and used in a dirty atomic truck bomb in a large urban area? 

Second was that according to that same declassified report, if the USSR could have coaxed Kosmos 954 in to making it through just one more orbit, it would have crashed in the highly populated urban corridor of the U.S. east coast. 


You can read more here

Saturday, 3 August 2013

Aug 3 2013 - Weekend Market Comment

Aug 3 2013 – If you are in a hurry let me give you the bottom line. The momentum of the US markets is impressive. It is like every week the market hits a new high and the markets hit a new record high this week. You must be long this market -- but this is no time to put on a new high-risk position. We are ripe for a tiny pullback in an overall uptrend; you will be able to buy this a bit better price than this week.

First lets stop and look at the really big picture. Here is the market since 1960. As you can see the 2008 financial catastrophe sort of “shifted us over” but the angle of up trend (blue line)  is the same angle the market is currently rising on. The reason I look at this chart is a I want to see if the market is at a unsustainable price and right now it does not look it.
(as always click on any graphic to enlarge)

These are the long-term bull and bear lines; so long as the green is above the market you should be bullish.



The NYSE Stocks above 50 day moving average graph looks like it has a few more days to run up. 


So looking at these indicators above the message is, we are in a secular bull market that appears to have along way to run. You can read my prediction of this in The New Momentum.

Blip on the Horizon 
Bull markets “climb a wall of worry” as things get better and better complacency slips in. As worries dissipate exuberance and hubris become the investors enemy. So it is important that we have some reality check to worry about. Here are two:

1.     The US economy nears full employment this is no time to keep stimulus on.
In the non-farm payroll graph U.S. employment is reaching the 2006 boom levels where workers were very hard to come by. In other words the September fed taper of bond buying is probably only 3 to 5 weeks away.




2.     The VIX is very low. The VIX is an index, constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge." Last week I built a gauge for you showing that you can predict near term pullbacks by drawing lines where the VIX current range is over bought or oversold. Or as I called them over greedy and over fearful. So as we pass my red line here speculators are too complacent, this means that the “last to the party” buyers are loading up. Of course once they finish buying there is no one left to buy, result a pull back until prices are again compelling.  In a strong bull market like this that is a 3% to 5% pull back.



Another Commodity Bites the Dust
This week the interesting story was that the global potash cartel blew up when Canada’s rivals in Russia said Nyet and are now starting a global price war rather than reduce supply coming onto the market. Uralkali, a key Russian partner in an informal cartel which has helped to keep prices of the fertilizer artificially high, broke ranks this week, sending shares of the main producers crashing and leading to predictions of a fall in the price of potash of up to 30 percent. Uralkali did so after accusing a partner of selling outside an agreement, but also after users proved resourceful in sourcing alternatives and, importantly, before the completion of huge new projects which would bring on new supply in coming years. For Western Canada this set off  the cancellation of proposed new projects – notably BHP Billiton Ltd.’s $14-billion Jansen potash project in Saskatchewan. Here is a graph of Potash corp stock tick POT, it kind of says it all:



  
In Pop Goes the Commodity Bubble I said that the run up in price was purely due to speculation and financial manipulation. So far only big oil continues to manipulate prices creating artificial highs. But in other areas many investment banks might be daydreaming of an alternate reality where they didn't build the huge, now tenuous, commodities portfolios, which are drawing, increased scrutiny.

Such scrutiny as the July 20th The New York Times story that accused Goldman Sachs of using its aluminium warehouses to manipulate the price of the commodity — an assertion the bank emphatically denies — costing consumers billions.

Then there's JP Morgan, which just agreed to pay a $410million fine for using trading strategies to manipulate energy markets — the bank neither confirms nor denies the manipulation charges.

In September, The Fed will rule on whether or not to allow Wall Street banks — specifically JP Morgan, Goldman Sachs, and Morgan Stanley — to keep the physical commodities they purchased during a five-year, post-financial-crisis shopping spree.

This could be The Fed's chance to correct mistakes it made while it was asleep at the wheel, allowing the commodities businesses at Wall Street banks to get bigger and more interconnected than anyone in American history ever intended.

This is a very old story; Andrew Jackson was a farmer, he originally crushed the national bank because he didn't want it to centralize commercial and financial power to manipulate commodity prices. You can almost hear him turning in his grave.
  
How to Trade This
Of course these are long term plays, but when the Fed tapers bond buying then bond yields will increase. You are ideally positioned because you own TBT on my recommendation and it will go up along with yields on the 10-year Treasury note. I bought some more this week. 

As for commodity price dropping this should aid the manufacturing tigers of the world and as you read in the New Momentum -- America. The losers are the commodity banana republics of Brazil, Australia, Russia and Canada.

I hope you still have your Germany ETF -- EWG hitting new highs this week.



Industry Focus – Web Travel
As the baby boomers get older they need less stuff but they like to buy experiences. One big-ticket experience is travel. The Internet has supplanted the Newspaper travel section and the travel agent with e-commerce.

Microsoft subsidiary Expedia.com pioneered the online travel agent market and the stock has been a market leader for the last three years. Recently Expedia reported a profit far short of Wall Street estimates for the second quarter on Thursday, hit by rising competition in its home market and poor performance in its discount travel website Hotwire.com. Expedia's shares were down 25 percent at $48.45 on Friday afternoon on the New York Stock Exchange.



Rival Priceline.com famous for the cheesy William Shatner advertising campaign has been doing relatively well in part due to not being swept up to a loft price like Expedia but earning a nice return. But of course if you followed me into Trip advisor you are in happily counting your profits as the stock continues to outperform the market.






Nuclear Meltdown
Taiwanese lawmakers exchanged punches and threw water at each other today ahead of an expected vote that would authorize a referendum on whether to finish a fourth nuclear power plant on the densely populated island of 23 million people. Nuclear power has long been a contentious issue in Taiwan and became more so following the Fukushima nuclear disaster in Japan in 2011. While many Taiwanese consider nuclear power generation an unacceptable safety risk for the earthquake-prone island, economic analyses suggest disruptive power shortages are inevitable if the fourth plant is not completed. Watch Video here.

America You Are Entitled 
Finally a survey that shows just what Americans want. In a new report released Wednesday by the Pew Research center, Americans indicated that when it comes to what they expect from their country, all they really want is to be safe, happy, rich, comfortable, and entertained at absolutely all times. Click picture below to play video:


Nation Just Wants To Be Safe, Happy, Rich, Comfortable, Entertained At All Times




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