A few random thoughts.This image links to a sort of animated presentation at the FT about who produces, exports etc how much oil and how it moves around the world.
It is constructed in such a way that Norway falls through the cracks but it produces 2.4 million and is the fifth largest exporter.
Here is a link to a Yahoo Finance article about "paid volunteerism" as a strategy for income in retirement. I always look at what the daily retirement article is at Yahoo Finance and I probably read one or two a week and think this one is a good one.
The retirement solution for Americans is clearly evolving into something different that will require ingenuity. While this is clearly a very serious issue for all of us the aspect of this that it poses a challenge to be overcome is fascinating. I am optimistic about our ability to adapt to a different entitlement system, taking on second careers, multiple streams of income and so on but unfortunately some folks will get left behind. Wrapping your hands around this now hopefully means you won't be one of them.
I got an email from First Trust announcing what I believe is the first exchanged traded 130/30 product. The ticker is JFT and it is an ETN not an ETF.
If a picture is worth 1000 words you can look for yourself at what the strategy is.BTW I was not able to find anything on the First Trust web site. I have been in the skeptical camp WRT to 130/30 strategies, we'll see if this fund proves me wrong.
A reader left a comment saying he thought I was cautiously bullish based on my recent comments and posts. Um, no. I have the same disposition I have had for what seems like ages. Normal bear market, normal cycles, capitalism can continue to work but the markets are evolving. Despite being in the bear camp I am generally an optimistic person and expect things to work out over time but with the expectation that I need to take the bull by the horns to play a role in how things do work out for my wife and me. I encourage everyone to do the same.
Did you see the segment on The Network about the store in California selling medical marijuana? Why isn't pot legal so we can tax the hell out of it? No I am not a pot smoker nor would I be if it was legal.
We had more snow this morning! Latest snowfall since we've been here. We got a little less than an inch and it has started to melt already but it is still around 40 degrees out. Very cool.
6 comments:
Thanks Roger. Reading up on ETN's (which I am not well versed in), what is your take on accepting the credit risk aspect of an ETN? Do you beleive that this risk is priced in to the ETN's? Have a good long weekend, I hope you are doing something fun.
i would not assume that credit risk is priced in. i would say an bank that issues ETN going under is very unlikely. that said i would not concentrate on multiple issues from the same issuer.
That's some interesting figures for oil reserves, it seems Kazakhstan, Iraq and Nigeria have plenty but also problems with getting it out of the ground. This may contribute to rising prices but not as much as speculation - this contributes as much as China uses. This pdf explains it better:
http://hsgac.senate.gov/public/_files/052008Masters.pdf
I've seen arguments, including the testimony of Michael Masters, regarding commodities speculation as a cause for rising prices but, even when a mechanism is proposed (a rare enough event), I have trouble seeing how it would work.
The testimony of Michael Masters referenced above however does contain some meat as well as a mechanism that, on its face at least, does appear plausible but when you get into his analysis there are gaps. For example, Masters sees what he terms Index Speculators (hedge funds and others) as the main problem and states that, "According to the CFTC and spot market participants, commodities futures prices are the benchmark for the prices of actual physical commodities, so when Index Speculators drive futures prices higher, the effects are felt immediately in spot prices and the real economy.7 So there is a direct link between commodities futures prices and the prices your constituents are paying for essential goods."
Okay, there appears to be some substance there except end note 7 simply says "The CFTC states on its website that 'In many physical commodities (especially agricultural commodities), cash market participants base spot and forward prices on the futures prices that are 'discovered' in the competitive, open auction market of a futures exchange.'"
That's obviously not all commodity markets (including oil) nor even necessarily all agricultural commodities or the CFTC presumably would have said so and it appears a relatively minor regulatory change could fix the problem rather simply by requiring something like mark-to-market (the price at which the most recent contracts are liquidated). Masters solution on the other hand appears to be nothing less than the outlawing of anyone not an actual commercial commodity dealer from participating in commodity futures markets at all, even via swaps (actually especially via swaps).
That seems pretty extreme and would also appear to leave commodity markets in the hands of far, far fewer players, a situation that tends to have negative outcomes in its own right.
I am not commodities specialist but, as far as I know, commodity spot prices dictate the returns on futures contracts rather than vice versa and until I see a mechanism that plausibly reverses the relationship long enough and widely enough to create a major trend in multiple markets I'll continue to assume the rise in commodity prices is more of a demand, transport and production-capacity problem (and currency problem) than it is a speculative problem. JMO FWIW
That aside, yes, legalize grass! Might actually get a tax that really pays for itself for a change; besides, I need all the trading edge I can get and more seriously stoned counterparties might just do the trick! The downside of course is that I would probably have to listen to mantras of "Hare Krishna, Hare Hare" or "Capitalism Will Work Forever" while trading but feel fairly sure my desire to keep religion out of the marketplace would be suitably offset by trading profits so, ...well, we all have our crosses to bear don't we (can't believe I just said that).
Roger,
I have read a lot people here talk about PRPFX. What would make that fund go down in spurts like it has {even thopugh it certainly has done well over last few years}?? Also what would you condsider it's plusses and minusses in this climate??
Thanks!!
I think the trouble with legalizing cannabis for recreational use is that it doesn't work like alcohol where your body metabolizes it and it's out of your system within a certain time frame. Also the tolerance of people to it varies widely. How would you be able to know that a few spliffs at the weekend are not going to affect you on the drive to work on the monday morning, or the drive during work if you're a school bus driver?
Personally I think it would mean a whole lot less road rage plus less gas usage, but it's highly likely an unfortunate accident would lead to a snowflake's mom seeking redress through litigation, when it was found somebody within 100 miles of the highway had been at a party once where marijuana may have been present.
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