MasterFeeds: October 2010

Subscribe in a reader Add to Google Reader or Homepage

GlobalNewsFeed

October 30, 2010

Gold Will Outlive Dollar Once Slaughter Comes: John Hathaway - Bloomberg

Gold Will Outlive Dollar Once Slaughter Comes: John Hathaway - Bloomberg

Share
________________________

October 29, 2010

M & A: Worries Grow About BHP Deal for Potash

Worries Grow About BHP Deal for Potash

will the deal go through?  If not, CAD 130/share is the target! -
----------------------------------------
From the NYTimes.com- DealBook

Potash Corporation of Saskatchewan investors seem to fear that the Canadian government may block BHP Billiton's hostile bid for the company, analysts said.

Go to Article from The New York Times:


Potash chief Bill Doyle urged patience for investors expecting an alternative to BHP Billiton's $40 billion bid, two months after starting talks with potential suitors, Bloomberg News reported.

Go to Article from Bloomberg News:

Read More

still not ready to accept reality…

Investors realise gold is not all that glitters

By Ellen Kelleher

Published: October 29 2010 18:30 | Last updated: October 29 2010 18:30

The focus of investors scouting about for value in the precious metals market has shifted to palladium, platinum and silver, as gold now trades at record levels.

Investment flows into exchange-traded funds (ETFs) backed by platinum and palladium have about matched or exceeded those wending their way into gold-backed ETFs in the last month, data from ETF Securities shows.

The rise in the metals’ prices is just as impressive. The cost of palladium – used as a catalyst in converters that clean car exhausts – soared 93 per cent to $626 a troy ounce in the past year, hitting a nine-year high thanks to a pick-up in interest from hedge funds. Silver – the poor man’s gold – now costs $23.73 per troy ounce, having risen more than 45 per cent in the same period. And platinum – palladium’s sister metal and a requisite component in diesel car engines – trades at more than $1,680 a troy ounce.

“Much like gold and platinum, palladium has experienced a QE2 sugar rush, not looking back since its $459.25 low of August 12 after the Fed decided to hold its balance-sheet constant,” said Edel Tully, a UBS commodities strategist.

The uptick in interest in the metals stems from the uncertainty surrounding the economy as well as fears about another round of quantitative easing in the US, and concerns about currency depreciation.

But volatility remains a concern. Starting next week, precious metal prices are likely to see sharp swings because of expected announcements from the Bank of England and the Federal Reserve, analysts forecast.

“Between now and the Federal Open Market Committee day, precious metals will likely endure patience-testing and see-saw price action,” wrote Tully in a recent note.

But even if prices swing in the near-term, longer-term forecasts for palladium in particular and platinum as well look compelling.

“Of all the precious metals, we’re most bullish on palladium,” claims Walter De Wet, head of commodities research at Standard Bank in London. “Demand is also strong for platinum but not as strong as it is for palladium.”

Demand for palladium is set to continue to exceed supply in the coming years as ownership of petrol-based cars becomes commonplace in China and other emerging market countries.

At the same time, palladium’s supply looks constrained. Some analysts speculate that the Russian government’s stockpiles of palladium may have dried up. Sales from the Russian government have added about 1m ounces of palladium supply annually in recent years.

UBS’s Tully forecasts that a shortage of supply from Russia could push palladium prices above $1,000 per troy ounce. Platinum prices, meanwhile, which have been rising since late 2008, look more toppy by comparison. Analysts argue that they have been pushed higher by speculators and the flow of money into emerging markets, which tends to boost commodities demand. While some expect platinum – the only metal that can be used as a catalytic converter in diesel engines – to rise higher yet in 2011, they think a correction is likely one day given that the metal has fewer industrial uses than palladium and is more costly.

“We believe that platinum positioning is over-extended; particularly as no ‘new’ fundamental driver has emerged,” says a recent UBS commodities research report.

Prospects for silver, meanwhile, are even less clear. While the metal still trades at record levels, commodities experts claim that it tends to move in line with the gold price. They warn that history suggests silver underperforms gold when markets fall and outperforms it when they rise. “The silver market surplus is quite bloated at the moment,” points out Suki Cooper of Barclays Capital. “If investment demand slows down for silver, we’re likely to see a sharp correction.”

But “silver fever” is still all the rage, with sales of silver coins set to hit a record high this year. Standard Bank’s De Wet concludes that gold and silver prices – which continue to benefit from strong interest from Asia – will see support through the Chinese new year which begins in February.

Copyright The Financial Times Limited 2010. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.

"FT" and "Financial Times" are trademarks of the Financial Times. Privacy policy | Terms
© Copyright The Financial Times Ltd 2010.

http://www.ft.com/cms/s/2/18ef998a-e382-11df-8ad3-00144feabdc0.html

PIMCO | Investment Outlook - Run Turkey, Run

Run Turkey, Run
  • The Fed’s announcement of a renewed commitment to Quantitative Easing has been well telegraphed and the market’s reaction is likely to be subdued.
  • We are in a “liquidity trap,” where interest rates or trillions in asset purchases may not stimulate borrowing or lending because consumer demand is just not there.
  • The Fed’s announcement will likely signify the end of a great 30-year bull market in bonds and the necessity for bond managers and, yes, equity managers to adjust to a new environment.

They say a country gets the politicians it deserves or perhaps it deserves the politicians it gets. Whatever the order, America is next in line, and as we go to the polls in a few short days it’s incumbent upon a sleepy and befuddled electorate to at least ask ourselves, “What’s going on here?” Democrat or Republican, Elephant or Donkey, nothing much ever seems to change. Each party has shown it can add hundreds of billions of dollars to the national debt with little to show for it or move our military from one country to the next chasing phantoms instead of focusing on more serious problems back home. This isn’t a choice between chocolate and vanilla folks, it’s all rocky road: a few marshmallows to get you excited before the election, but with a lot of nuts to ruin the aftermath.

Each party’s campaign tactics remind me of airport terminals pre-9/11 when solicitors only yards apart would compete for the attention and dollars of travelers. “Save the Whales,” one would demand, while the other would pose as its evil twin – “Eat Whale Blubber,” the makeshift sign would read. It didn’t matter which slogan grabbed you, the end of the day’s results always produced a pot of money for them and the whales were neither saved nor eaten. American politics resemble an airline terminal with a huckster’s bowl waiting to be filled every two years.

And the paramount problem is not that we contribute so willingly or even so cluelessly, but that there are only two bowls to choose from. Thomas Friedman, the respected author of The World Is Flat, and a weekly New York Times Op-Ed author, recently suggested “ripping open this two-party duopoly and having it challenged by a serious third party” unencumbered by special interest megabucks. “We basically have two bankrupt parties, bankrupting the country,” was the explicit sentiment of his article, and I couldn’t agree more – whales or no whales. Was it relevant in 2004 that John Kerry was or was not an admirable “swift boat” commander? Will the absence of a mosque within several hundred yards of Ground Zero solve our deficit crisis? Is Christine O’Donnell really a witch? Did Meg Whitman employ an illegal maid? Who cares! We are being conned, folks; Democrats and Republicans alike. What have you really heard from either party that addresses America’s future instead of its prurient overnight fascination with scandal? Shame on them and of course, shame on us. We’re getting what we deserve. Vote NO in November – no to both parties. Vote NO to a two-party system that trades promises for dollars and hope for power, and leaves the American people high and dry.

There’s another important day next week and it rather coincidentally occurs on Wednesday – the day after Election Day – when either the Donkeys or the Elephants will be celebrating a return to power and the continuation of partisan bickering no matter who is in charge. Wednesday is the day when the Fed will announce a renewed commitment to Quantitative Easing – a polite form disguise for “writing checks.” The market will be interested in the amount (perhaps as much as an initial $500 billion) as well as the targeted objective (perhaps a muddied version of “2% inflation or bust!”). The announcement, however, has been well telegraphed and the market’s reaction is likely to be subdued. More important will be the answer to the long-term question of “will it work?” and perhaps its associated twin “will it create a bond market bubble?”

Whatever the conclusion, not only investors, but the American people should recognize that Wednesday, even more than Tuesday, represents a critical inflection point in determining our future prosperity. Of course we’ve tried it before, most recently in the aftermath of the Lehman crisis, during which the Fed wrote $1.5 trillion or so in “checks” to purchase Agency mortgages and a smattering of Treasuries. It might seem a tad dramatic then, to label QEII as “critical,” sort of like those airport hucksters, I suppose, that sold whale blubber for a living. But two years ago, there was the implicit assumption that the U.S. and its associated G-7 economies needed just an espresso or perhaps an Adderall or two to get back to normal. Normal just hasn’t happened yet, and economic historians such as Kenneth Rogoff and Carmen Reinhart have since alerted us that countries in the throes of delevering can take many, not several, years to return to a steady state.

The Fed’s second round of QE, therefore, more closely resembles an attempted hypodermic straight to the economy’s heart than its mood elevator counterpart of 2009. If QEII cannot reflate capital markets, if it can’t produce 2% inflation and an assumed reduction of unemployment rates back towards historical levels, then it will be a long, painful slog back to prosperity. Perhaps, as a vocal contingent suggests, our paper-based foundation of wealth deserves to be buried, making a fresh start from admittedly lower levels. The Fed, on Wednesday, however, will decide that it is better to keep the patient on life support with an adrenaline injection and a following morphine drip than to risk its demise and ultimate rebirth in another form.

We at PIMCO join with Ben Bernanke in this diagnosis, but we will tell you, as perhaps he cannot, that the outcome is by no means certain. We are, as even some Fed Governors now publically admit, in a “liquidity trap,” where interest rates or trillions in QEII asset purchases may not stimulate borrowing or lending because consumer demand is just not there. Escaping from a liquidity trap may be impossible, much like light trapped in a black hole. Just ask Japan. Ben Bernanke, however, will try – it is, to be honest, all he can do. He can’t raise or lower taxes, he can’t direct a fiscal thrust of infrastructure spending, he can’t change our educational system, he can’t force the Chinese to revalue their currency – it is all he can do, and as he proceeds, the dual questions of “will it work” and “will it create a bond market bubble” will be answered. We at PIMCO are not sure.

Still, while next Wednesday’s announcement will carry our qualified endorsement, I must admit it may be similar to a Turkey looking forward to a Thanksgiving Day celebration. Bondholders, while immediate beneficiaries, will likely eventually be delivered on a platter to more fortunate celebrants, be they financial asset classes more adaptable to inflation such as stocks or commodities, or perhaps the average American on Main Street who might benefit from a hoped-for rise in job growth or simply a boost in nominal wages, however deceptive the illusion. Check writing in the trillions is not a bondholder’s friend; it is in fact inflationary, and, if truth be told, somewhat of a Ponzi scheme. Public debt, actually, has always had a Ponzi-like characteristic. Granted, the U.S. has, at times, paid down its national debt, but there was always the assumption that as long as creditors could be found to roll over existing loans – and buy new ones – the game could keep going forever. Sovereign countries have always implicitly acknowledged that the existing debt would never be paid off because they would “grow” their way out of the apparent predicament, allowing future’s prosperity to continually pay for today’s finance.

Now, however, with growth in doubt, it seems that the Fed has taken Charles Ponzi one step further. Instead of simply paying for maturing debt with receipts from financial sector creditors – banks, insurance companies, surplus reserve nations and investment managers, to name the most significant – the Fed has joined the party itself. Rather than orchestrating the game from on high, it has jumped into the pond with the other swimmers. One and one-half trillion in checks were written in 2009, and trillions more lie ahead. The Fed, in effect, is telling the markets not to worry about our fiscal deficits, it will be the buyer of first and perhaps last resort. There is no need – as with Charles Ponzi – to find an increasing amount of future gullibles, they will just write the check themselves. I ask you: Has there ever been a Ponzi scheme so brazen? There has not. This one is so unique that it requires a new name. I call it a Sammy scheme, in honor of Uncle Sam and the politicians (as well as its citizens) who have brought us to this critical moment in time. It is not a Bernanke scheme, because this is his only alternative and he shares no responsibility for its origin. It is a Sammy scheme – you and I, and the politicians that we elect every two years – deserve all the blame.

Still, as I’ve indicated, a Sammy scheme is temporarily, but not ultimately, a bondholder’s friend. It raises bond prices to create the illusion of high annual returns, but ultimately it reaches a dead-end where those prices can no longer go up. Having arrived at its destination, the market then offers near 0% returns and a picking of the creditor’s pocket via inflation and negative real interest rates. A similar fate, by the way, awaits stockholders, although their ability to adjust somewhat to rising inflation prevents such a startling conclusion. Last month I outlined the case for low asset returns in almost all categories, in part due to the end of the 30-year bull market in interest rates, a trend accentuated by QEII in which 2- and 3-year Treasury yields approach the 0% bound. Anyone for 1.10% 5-year Treasuries? Well, the Fed will buy them, but then what, and how will PIMCO tell the 500 billion investor dollars in the Total Return strategy and our equally valued 750 billion dollars of other assets that the Thanksgiving Day axe has finally arrived?

We will tell them this. Certain Turkeys receive a Thanksgiving pardon or they just run faster than others! We intend PIMCO to be one of the chosen gobblers. We haven’t been around for 35+ years and not figured out a way to avoid the November axe. We are a survivor and our clients are not going to be Turkeys on a platter. You may not be strutting around the barnyard as briskly as you used to – those near 10% annualized yields in stocks and bonds are a thing of the past – but you’re gonna be around next year, and then the next, and the next. Interest rates may be rock bottom, but there are other ways – what we call “safe spread” ways –to beat the axe without taking a lot of risk: developing/emerging market debt with higher yields and non-dollar denominations is one way; high quality global corporate bonds are another. Even U.S. Agency mortgages yielding 200 basis points more than those 1% Treasuries, qualify as “safe spreads.” While our “safe spread” terminology offers no guarantees, it is designed to let you sleep at night with less interest rate volatility. The Fed wants to buy, so come on, Ben Bernanke, show us your best and perhaps last moves on Wednesday next. You are doing what you have to do, and it may or may not work. But either way it will likely signify the end of a great 30-year bull market in bonds and the necessity for bond managers and, yes, equity managers to adjust to a new environment.

If a country gets the politicians it deserves, then the same can be said of an investor – you’re gonna get what you deserve. Vote No to Republican and Democratic turkeys on Tuesday and Yes to PIMCO on Wednesday. We hope to be your global investment authority for a new era of “SAFE spread” with lower interest rate duration and price risk, and still reasonably high potential returns. For us, and hopefully you, Turkey Day may have to be postponed indefinitely.

William H. Gross
Managing Director


PIMCO | Investment Outlook - Run Turkey, Run

Share this|
________________________

October 22, 2010

Goldman Advises Clients To Front Run The Fed Via POMO

Feed: zero hedge
Posted on: Friday, October 22, 2010 01:20 AM
Author: Tyler Durden
Subject: Goldman Advises Clients To Front Run The Fed Via POMO

 

After a few months of breaking down what the simplest trade in the world is, that would be frontrunning the Fed for the cheap seats, Zero Hedge is happy to advise our readers that finally Goldman Sachs itself has capitulated and is now indirectly telling its clients to frontrun Ben Bernanke via POMO. No complicated value investor nonsense, no pair trades, no cap structure arbitrage, no hedging, no levered beta plays. Buy ahead of POMO. Sell. Rinse. Repeat.

From a GS distribution to clients:

On the interplay between the FED and STOCKS: Since Sept 1 – when QE was becoming a mainstream focus – if you only owned S&P on days when the Fed conducted Open Market Operations (in US Treasuries), your cumulative return is over 11%.  in addition, 6 of the 7 times when S&P rallied 1% or more, OMO was conducted that day. this compares to a YTD return of 5.8%.  the point: you would have outperformed the market 2x by being long on just the 16 days when – this is the important part – you knew in advance that OMO was to be conducted. The market's performance on the 19 non-OMO days: +70bps.

And there you have it - the top in frontrunning the Federal Reserve is now in.

The most recent Fed POMO calendar is linked (there is one tomorrow). Frontrun away.

Tentative Outright Treasury Operation Schedule

Across all operations in the schedule listed below, the Desk plans to purchase approximately
$32 billion. This is the amount of principal payments from agency debt and agency MBS expected to be received between mid-October and mid-November
. Description: http://www.newyorkfed.org/images/spacer.gif

Operation Date1 - Settlement Date - Operation Type2 - Maturity Range

 

Oct. 22, 2010 – Oct. 25, 2010 - Outright Treasury Coupon Purchase - 4/15/2013 – 9/30/2014

 

Oh, and Ben, your criminal organization will one day pay for making a complete manipulated travesty out of capital markets.

 

View article...

October 15, 2010

List of companies involved in the rescue of the 33 Chilean miners

List of companies involved in the rescue of the 33 Chilean miners

But this happened because the Chilean people, government and President were more interested in doing whatever it took, and accepted whatever would help from sources around their country and around the world.  They did not allow false nationalism nor internal politics nor special interests to stand in the way of their heartfelt national effort to retrieve their trapped brothers.  The Chileans organized the worldwide effort and made it work.

This displays true compassion, maturity and unity of purpose by the Chilean people and is what made the rescue successful.
List of American companies who contributed to the rescue of the Chilean miners.
Organizations from other lands were likewise involved.
The Chilean President was most gracious in recognizing all those who helped create the Chilean miracle. 

  • · Schramm Inc. Of West Chester, Pennsylvania built the drills and equipment used to reach the trapped miners. 
  • · Center Rock Company, also from Pennsylvania , built the drill bits used to reach the miners. 
  • · UPS, the US shipping company, delivered the 13-ton drilling equipment from Pennsylvania to Chile in less than 48 hours. 
  • · Crews from Layne Christensen Company of Wichita Kansas and its subsidiary Geotec Boyles Bros. Worked the drills and machinery to locate and reach the miners and then enlarge the holes to ultimately rescue them. 
  • · Jeff Hart of Denver Colorado was called off his job drilling water wells for the U.S. Army's forward operating bases in Afghanistan to lead the drilling crew that reached the miners.
  • · Atlas Copco Construction Mining Company of Milwaukee, Wisconsin provided consulting on how to make drilling equipment from different sources work together under differing pressure specifications.
· Aries Central California Video of Fresno California designed the special cameras that were lowered nearly a mile into the ground sending back video of the miners.
· Zephyr Technologies of Annapolis Maryland, made the remote monitors of vital signs that miners will wear during their ascent.
· NASA Engineers designed the " Phoenix " capsule that miners would be brought to the surface in, and provided medical consulting, special diets and spandex suits to maintain miners' blood pressure as they're brought back to the surface.
· Drilling Supply Co., Houston also involved.
  • Canadian-based Precision Drilling Corp. And South-African company Murray & Roberts, drilled  backup rescue shafts in case the American rig failed. Which fortunately did not happen.

October 5, 2010

Insider Selling To Buying: 2,341 To 1 | zero hedge

Insider Selling To Buying: 2,341 To 1


Insider Selling To Buying: 2,341 To 1 | zero hedge

Share
-- The MasterFeeds

Copper Will Trade at $11,000 in a Year, Goldman Says - Bloomberg, October 5, 2010

We’ll see…
bloomberg      


October 5, 2010

Copper Will Trade at $11,000 in a Year, Goldman Says

Copper will trade at $11,000 a metric ton in a year, Goldman Sachs Group Inc. said as it raised price estimates because of swelling demand.
The forecast implies a 35 percent gain from the metal’s current price. The bank had predicted on Sept. 17 that copper would trade at $8,050 a ton in 12 months. Goldman today advised investors to buy the December 2011 contract as increasing demand leads to shortages of the metal.
Copper for three-month delivery traded on the London Metal Exchange jumped 23 percent in the third quarter, the most in a year, helped by falling stockpiles and a weaker dollar. LME inventories shrank by 17 percent in the period, and the U.S. Dollar Index, a six-currency gauge of the greenback’s strength, slid 8.5 percent, the most since 2002.
“Supply-demand deficits look set to grow on emerging- market strength and improving demand from developed economies, which we expect to significantly outpace supply growth, drawing down inventories and creating market shortages,” analysts including London-based Jeffrey Currie said in the report. “We don’t believe that the market is fully pricing these shortages and the potential for demand rationing that lies ahead in 2011.”
Zinc Prices
Three-month copper traded at $8,156 a ton at 1:38 p.m. on the LME. The December 2011 contract was at $8,025. Goldman Sachs raised its three-month forecast for the metal to $8,500 and increased its six-month estimate to $8,800.
Copper will average $9,300 a ton next year, the bank said, compared with about $7,215 so far in 2010. Electrical equipment and construction are the main sources of demand.
Goldman Sachs also raised its 12-month forecast for zinc to $3,000 a ton. The metal, used to rust-proof steel, will likely stay in surplus for now because of supply growth, though the market will be more balanced in the year ahead and “possibly swinging to times of deficit” next year, the bank said.
Zinc for three-month delivery was last at $2,288 a ton on the LME, reducing this year’s decline to 11 percent. The metal will average $2,575 in 2011, said Goldman Sachs, which on Sept. 17 predicted a 12-month price of $2,225.

CNBC.com Article: Super-Rich Investors Stocking Up Gold by the Ton

CNBC.com Article: Super-Rich Investors Stocking Up Gold by the Ton

The world's wealthiest people have responded to economic worries by buying gold by the bar — and sometimes by the ton — and moving assets out of the financial system.

Full Story:
http://www.cnbc.com/id/39510784

------------------------------------------------
Download CNBC Real-Time from the App Store for Free and get Streaming Real-Time quotes, breaking news and the latest videos from CNBC.
http://www.itunes.com/apps/cnbcreal-time



Sent from my iPad

October 3, 2010

On Tomorrow's Secret Meeting To Plot The End Of High Frequency Trading | zero hedge

On Tomorrow's Secret Meeting To Plot The End Of High Frequency Trading



On Tomorrow's Secret Meeting To Plot The End Of High Frequency Trading | zero hedge




The MasterFeeds

MasterSearch