LOOKING, LOOKING, GONE

First they said there wasn't, then they said there was and now they're saying there isn't.

That's the latest, according to the Wall Street Journal, from Chinese Finance Minister Lou Jiwei about another economic stimulus package for the world's second largest economy.

The news is out that China's probably not going to meet its 7.5% GDP growth target and the shivers and shakes are rolling through commodity markets. But the real truth is the number was bogus anyway.

Most of these numbers to begin with are cooked. As an old crony trader once told us, markets love excuses to react.  And  anyone who thinks the Fed's numbers are any different doesn't understand the term bias.

On down market days when nobody can find a valid reason for a sell off, old timers use to call it profit taking. But profits get taken everyday and the  market doesn't go down. Mark Twain put it a bit differently: "One of the most striking differences between a cat and a lie is that the cat only has nine lives."

Metals took the brunt of the so-called bad news Monday, copper, zinc and nickel.  But a few days earlier iron ore, an orphan child in this market if there ever was one, led the downturn by hitting a new low, its lowest since 2009.















Here's what Bloomberg calls its chart of the day. Investors got wrong-footed when they bet China would cough up another stimulus package at the first sign of more economic weakness. Brent crude oil futures, as the charts sows, peeled off 1.4% to close near its lowest level since mid-2012.

Extrapolating from last April when Chinese officials puffed up parts of the market including housing investors were looking for more of the same. So far they're still looking, looking, looking.

STAY FOCUSED

 
Nobody is correct all the time.

And nowhere is that probably more personified than in markets, especially market tops and bottoms.

It's easy to be too early or even get caught up in a value trap. In 2006 a colleague wrote an article about the real estate bubble.
http://www.safehaven.com/article/4545/the-love-song-of-the-us-home-owner                                

It was a bit too early. Many of his clients and readers objected at the time. But he made some serious money following a simple credo: buy right and sit tight. In his case he sold right and waited. Serious money means different numbers to different people. That's up to you.

Iron ore overnight last night hit a new low. Mining company stocks are getting hammered again along with precious metals. Seriously over sold sectors make the news almost daily. Pessimism is maximum here, an old saying of the late Sir John Templeton, one of the last century's best investors.

Find maximum pessimism, do your homework. Then buy right and sit tight. Done correctly you'll find some well-earned happiness. Lots of it in fact on your way to the bank.

Here's a length to some good advice in a beaten down sector. Read, research, react. Stay focused. It's about the money.

http://www.mining.com/web/i-was-early-but-im-still-buying-frank-giustra-fiore-financial-corp/

WAIT NO MORE: VOTE

Here's an interesting read about the kind of conniving, underhanded  people in Washington are about.

All this and more in an upcoming election year. As the article states after: ... five State Department reviews concluding that Keystone XL is in the national interest, Americans continue to wait for the jobs, revenue and security this project would provide. 

http://energytomorrow.org/blog/2014/september/sept-19-keystone-xl-american-energy-and-the-right-energy-policies

DON'T SHAKE WHEN YOU SAY IT

A lot of bloated rhetoric, most of it economic and political babble disguised as calls for more of the same, gets posted on editorial pages every day.

Every now and then, however, somebody writes a line or three that's as fresh and pure as newly fallen snow when it comes to truth.

In today's Financial Times, Gaspard Koenig's, "No laughs in Sarkozy's Groundhog Day" return, fills that bill.

Taking a page from Hollywood, Nicolas Sarkozy, the former French  leader, reinvented himself yet again on Facebook this past week with his Phoenix-like statements about going to the mountain top of self-examination since his departure from public life. 

Bottom line: It's a new Sarkozy, one who will do what he didn't do before.

Sarkozy's in good company. Politicians along with movie stars are noted for re-inventing themselves. Think Richard Nixon after his devastating losses as a presidential and gubernatorial candidate way back when politicians were just understated skilful liars compared to today's new breed of arrogant, pompous liars.

Koenig's description of Sarkozy's spiritual reformation says more--and says it better--than we need to say. The beauty and truth of his piece rests in a few paragraphs. And though this is our comparison not Koenig's, those few paragraphs apply more so today than ever to the U.S.

What France needs, though, is to revive its liberal DNA and make a clean break with its postwar tradition of state interventionism, heavy centralization  and top-down paternalism. Our country possesses all the necessary assets to flourish in a globalized world if only it were liberated from a stifling mix of ever-changing regulations and authoritarian bureaucracy.

How could Mr Sarkozy be the right man to achieve that? Under his leadership, public spending and public debt increased by 15 percent and 30 percent respectively, a score of new taxes was created, the total number civil servants kept rising, the French state acquired more stakes in private companies than ever before and a number of civil liberties were threatened.

There was no shaking in Koenig's voice here. And none in ours.
t. man hatter

ASIA OVERNIGHT

Here's a look at what's happening overnight in Asia as precious metals are getting hammered again. Even the U.S. dollar is under pressure. Treasury yields are also down following a quick rally after last week's FOMC announcement that many interpreted as more hawkish.

Some are postulating that the excessive risk warnings at the recent G-20 meeting might be causing some investor skittishness. For more and some interesting charts check out the site below.
www.zerohedge.com/news/2014-09-21/liquidations-continue-stocks-dollar-slide-precious-metals-pounded-asia-trading.

CAREFUL WHAT YOU WISH FOR

 
Declining oil prices bite some more than others. And some of that pain has hit Venezuela.

 The price of Venezuela’s benchmark basket of crude and petroleum products fell on Aug. 22 to
$90.89, a two-year low. Since the end of last month, the price has fallen 10 percent, tracking a surprising drop in international prices in spite of Mideast tensions.

For Venezuela, each $1 drop in the per-barrel price translates into a $1 billion loss of government revenue. With a fiscal deficit already estimated at 14 percent to 15 percent of GDP, the fall in prices alarms many, especially as domestic oil production continues to slide.

Russia and Iran are also affected by weak energy prices.

"The Russians are very exposed to lower oil prices. We don't know to what extent it will influence their behavior in Ukraine, but they're certainly going to feel pressure on their budget."

Russia's ruble currency has already fallen to a historic low against the dollar as its economyis hit by sanctions from the United States and European Union over its involvement inUkraine. That increases the price Russians must pay for many imports, from vegetables to luxury goods.

Iran on the other hand was trying to get its oil back on international markets after years of being under U.S. led sanctions over concerns about nuclear proliferation. Now with the so-called U.S. oil gut those negotiations might well be delayed since the U.S. appears to be in a stronger position.

Yet in a recent interview with the Financial Times, former BP chief Tony Hayward noted:

US and EU sanctions against Moscow are in danger of turning around and biting the west by constraining global oil supply and pushing up prices incoming years...cutting off capital markets from  Russia's energy group, which would eventually lead to less investment in Russian oil production, was likely to damage long term supply.

He said the US shale boom had obscured the growing risks to the world's supply, but its effects would wear off, leaving the global economy dangerously exposed to potential disruptions in th flow of oil.

Hayward may be unpopular owing to his BP gulf oil spill connection, but that should not color one's view that he doesn't have some idea about energy's future.

Just today in the Financial Times as reported in Business Week Blackstone the big investment group announced it's pulling out of Russia. 

Blackstone Group LP (BX:US) is backing off efforts to find deals in Russia, the Financial Times reported, citing an unidentified person with knowledge of the matter.

The world’s biggest manager of alternative assets isn’t renewing contracts with consultants it employs in the country, according to the newspaper. Tensions between Russia and nations including the U.S. escalated this year, leading to sanctions, as Russian President Vladimir Putin annexed the Crimean peninsula and supported rebels seeking to split eastern Ukraine.

Blackstone Chairman Steve Schwarzman joined the international advisory board of the Kremlin-backed Russian Direct Investment Fund three years ago. The $10 billion fund was created to stimulate investments in privately held businesses and wean the state off its dependence on commodities. Its investment partnerships have helped draw foreign capital into Russia’s economy, according to its website.

Blackstone’s decision also was prompted by its struggle to find any suitable investment opportunities in the past three years, the FT said. Peter Rose, a spokesman for New York-based Blackstone, declined in an e-mail to comment on the report.

Blackstone oversees $279 billion in assets including private-equity, real estate, credit and hedge-fund investments. Schwarzman said in April that investors should wait to gauge the results of international sanctions against Russia before making investment decisions.

“It’s in the ‘watch and wait’ category,” he said in an interview with Bloomberg Television on April 28. “This can have a variety of outcomes.”

There's much more here than meets the MSM's mundane coverage. When it comes to future supply disruptions, much of it falls under the be-careful-what-you-wish-for label.
t. man hatter

HAULING FREIGHT

A lot of investors pay much attention to the Dow Jones Industrial Average but little if any to the Dow Transportation, irrespective of talk about both being antiquated.

But based on the idea that both discount the future, the Transportation index is apparently telling investors something.

The strength of the transportation sector is difficult to ignore.  The Dow Jones Transportation Average ended the week just 0.49 percent below its record-high close of 8,676.19, which it reached on Thursday (NYSEARCA:IYT).

On Thursday, September 18, the Association of American Railroads reported that the total combined U.S. weekly rail traffic for the week ending September 13 was 579,440 carloads and intermodal units, exceeding the total for the week ending on August 30.  The week ending September 6 brought a decline to 525,144 carloads and intermodal units from the total for the week ending August 30, which was 579,209.  The most recent weekly total represented a 3.1 percent increase from with the same week last year.

From the report:

For the first 37 weeks of 2014, U.S. railroads reported cumulative volume of 10,718,782 carloads, up 3.5 percent compared with the same point last year, and 9,522,482 intermodal units, up 5.6 percent from last year. Total combined U.S. traffic for the first 37 weeks of 2014 was 20,241,264 carloads and intermodal units, up 4.5 percent from last year.

The chart below depicts the performance of the iShares Dow Jones Transportation Index ETF (NYSEARCA:IYT) during the past six months.  (Chart courtesy of Stockcharts.com).

As the chart demonstrates, IYT finished Friday’s trading session at $154.81, after hitting a record intraday high of $156.28.  At Friday’s closing price of $154.81, IYT ended the week 3.15 percent above its 50-day moving average of $150.08.

Investor or central banker, either way someone has to decide what the Transportation index is saying: Higher interest rates now or perhaps too late later?

 http://www.wallstreetsectorselector.com/investment-articles/editors-desk/2014/09/investors-see-weekly-rail-traffic-surge/

CONSUMER GROUND DOWN

Forget the beef, ground or otherwise

It's too expensive as consumers get further ground down with rising cost of eating.

http://www.blacklistednews.com/New_Record%3A_Pound_of_Ground_Beef_Tops_%244_for_First_Time/38026/0/38/38/Y/M.html