August 28, 2008

Global Market Comments for August 28, 2008 1) Hurricane Gustav wavered, so crude fell $6 and natural gas plunged a mind blowing 10%, or 80 cents. Other commodities collapsed across the board and stocks took off. 2) Q2 GDP came in at a blistering 3.2%, almost double some forecasts. While the stimulus checks provided a minor assist, it was really all about the enormous … [Read more...]

August 26, 2008

Global Market Comments for August 26, 2008 1) Crude pops $6 and natural gas leaps 42 cents to $8.25 as hurricane Gustav turns towards the oil and gas producing facilities in the Gulf of Mexico. One mathematical model has a category four hurricane hitting New Orleans in 3-4 days. 2) The S&P case-Shiller home price index for June fell 15.4% YOY. San Francisco came in … [Read more...]

August 21, 2008

Global Market Comments for August 21, 2008 1) Crude (USO) spiked $10 to $122 when it realized that 1% of the world's production passes through a pipeline in Georgia where the Russian invasion shows no sign of ending soon. Tropical storm Fay also brought out fears of a Gulf hurricane back to the surface. Panic buying spread across a wide range of commodities contracts, … [Read more...]

August 20, 2008

Global Market Comments for August 20, 2008 1) Weekly crude inventories soared by a record 9.4 million barrels as demand destruction accelerates, knocking the price down $5 to $12.50. The world is clearly producing more crude than it is using, but there is still no margin for error on the supply side. Several big hedge funds are now targeting a move to $86 before year … [Read more...]

August 19, 2008

Global Market Comments for August 19, 2008 1) The producer price index, the real inflation rate, rocketed by 1.2% in July to 9.8% YOY. The stock market barfed 200 points. Lehman (LEH), AIG Int. (AIG), Fannie Mae (FNM) and Freddie Mac (FRE) did coordinated swan dives in true Olympic fashion. 2) According to Dataquick, home prices in Southern California have fallen 31% in … [Read more...]

August 18, 2008

Global Market Comments for August 18, 2008 1) With the euro at $1.46 on its way to the $1.30's, and commodities in free fall, it is becoming screamingly obvious that the inflation trade is temporarily dead. Long bond yields are approaching new lows for the year, with the ten year at 3.80%. 2) Nine million jobs are expected to leave the US for China and India over the … [Read more...]

August 15, 2008

Global Market Comments for August 15, 2008 1) There is a nightmare scenario unfolding in the commodities markets where the meltdown is explained not by just a two week slowdown for the Olympics, but by an unfolding global recession. Four out of five of the world's largest economies are now at or in recessions. Natural Gas has plunged -41%, platinum -37%, silver -34%, … [Read more...]

August 14, 2008

Global Market Comments for August 14, 2008 1) The momentum traders have definitively bailed from the crude/commodities trade, taking the fluff out of the market and equity valuations in the area down so much that even value players are starting to have a look see. Crude is not dead, it is just resting, and these names will fly again. My five year scenario for crude is that … [Read more...]

August 13, 2008

Global Market Comments for August 13, 2008 1) Panic buying of the dollar spilled over from the euro into the British pound, which soared overnight from $1.91 to $1.87. Britain's economic data is now looking as dire as those in the US. 2) Gasoline inventories fell a surprising 6.4 million barrels as the summer driving season draws to a close. Wholesalers are trying … [Read more...]

August 12, 2008

Global Market Comments for August 12, 2008 1) Oil pipelines are exploding in Georgia and Turkey, new wars are breaking out, and crude still goes down. The suddenly unloved commodity is clearly gunning for the 200 day moving average at $107, and broader support kicks in at $100. Texas tea has suddenly become the red headed step child of the market. 2) The Olympic coverage … [Read more...]

August 11, 2008

Global Market Comments for August 11, 2008 1) The magnitude and the volume seen on Friday suggests that the euro has had it. Trillions of dollars worth of hedges by banks and multinationals are being simultaneously unwound. Look to sell rallies from here. This means that the commodity trade, including crude, will be broken for the rest of the year. These will fall until … [Read more...]

August 8, 2008

Global Market Comments for August 8, 2008 1) The dollar had its largest one day move up against the euro in seven years to $1.49, not because things are getting better here, but because things are getting worse at an alarming rate in Europe. Stocks celebrated by soaring 320 points and crude fell to a new low in the move to below $115. Airlines were the best sector, with … [Read more...]

August 7, 2008

Global Market Comments for August 7, 2008 1) Today was the day of the AIG shock, which reported an H1 loss of $13.6 billion. All of the credit default swaps they wrote are coming back to roost. The news took the Dow down 220. 2) Whole Foods (WFMI) is suspending its dividend, canceling new store openings, and offering more low cost food in the wake of a 31% decline in … [Read more...]

August 6, 2008

Global Market Comments for August 6, 2008 1) Yesterday's 300 point pop in the stock market is proof that we are still in a bear market. It is the sixth such move in the past year. These gaps are caused by ferocious short covering rallies which then burn out. In the 2000-2002 bear market there were twelve 300 plus point moves up. Bull markets are characterized by … [Read more...]

August 5, 2008

Global Market Comments for August 5, 2008 1) Stocks finally noticed that crude has fallen $30 in a month. 2) Pawn shops are now a booming business, which see 60% of their income from scrap gold. EZCorp (EZPW) is up 95% this year, Cash America International (CSH) is up 78%, and First Cash Financial Services (FCFH) is up an amazing 165%. However, some states are gunning … [Read more...]

August 4, 2008

Global Market Comments for August 4, 2008 1) Hurricane Edward showed up and the US threatened to close the Straights of Hormuz, but crude didn't go up. Therefore, it had to go down, crashing $7 to $119. But the only way to make oil seem cheap at $119 is to start out at $148. Natural gas hit $8.60. Wow! 2) Florida based luxury homebuilder WCI Communities (WCI) filed … [Read more...]

August 1, 2008

Global Market Comments for August 1, 2008 1) The July non farm payroll came in at -51,000 and the unemployment rate shot up to 5.7%, a four year high. Short McCain. 2) The mortgage crisis will eventually be solved by the hedge fund industry, which, with $2 trillion in preserved capital, is taking over many functions until now performed by investment banks. The bigger … [Read more...]