The tragedy in Japan will eventually lead to a massive rebuilding effort, whereby demand for timber, steel and machinery will go through the roof. As of now, economic output is at a standstill. However, soon enough, the Japanese government will be borrowing shitloads of money, and repatriating money from overseas, in order to rebuild. This, without a doubt, will be bullish for steel stocks, like CLF, X, AKS and especially PKX (proximity), as well as CUT. Thanks to a booming pac-rim, basic material are already in short supply. This will make matters worse.
Furthermore, with Japan busy at home, QE3 is all but guaranteed now. Look for THE BEARDED CLAM to smoke short sellers inside of his philly blunts, while laying the hammer down on some of you talking monkeys. Without a doubt, Senator Gint will enjoy even bigger gains in his portfolio of crap that is gold/silver. Inflation will get ridiculous, once the Japanese rebuilding process begins.
In the short term, stocks might suffer because investors have dog brains and cannot look more than 15 minutes into the future. However, once these things that I am teaching you come to fruition, there will be a fucking race to the finish. So you know, “The Fly” has already completed said race and has taken the luxuries of littering said racetrack with “bouncing Betty” landmines.
In the immediate term, I like the refiners, as their crack spread margins expand. Due to loss of refining capacity in Japan, expect refining margins to rise, worldwide. My favorite refiners are WNR, TSO and VLO. I’d avoid the auto-parts companies and most certainly Japanese industry.
Oh, with Buffet buying LZ, look for NEU to get a sympathy pop.
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“Japanese government will be borrowing shitloads of money, and repatriating money from overseas, in order to rebuild”
Fly, that repatriated money will come from somewhere. Do you think Japan will sell some assets to raise a portion of it? If so, from where?
Treasuries. Hence the need for QE3.
The Fed will buy from Japan now that Bill Gross has shot his wad? Or maybe Pimco can reload on Japanese Treasuries? That makes more sense. Gross sells to the Fed and buys from the Japanese when they are under pressure. That dude is smart.
Fly
The Japanese will do their own QEing and that is the message we got this morning. It appears to be massive and they also intervened in the currency in the Asian morning.
Thanks for the guidance.
Fly: Do you like ArcelorMittal?
Sure. Not a bad company.
Solar too.
Fly,
Warlord DMG has asked me to find out why you’re using a giant panda to discuss QE money going to Japan?
V.King
he didnt want to blind ya looking into a rising sun. ya know, cause everyone still has their shades packed in the box of bermuda shorts.
How much do you curl?
i dont curl. i hump, or pick, i can hump 165 easy on my back and walk a tall 3rd floor carry. and for dummy weights around 230. try ypicking up a 30 yrs old lady kenmore washer, from the front, and walk up 7 steps and get back to me.
i’ll get back to you with my fist…how about you power lift 750lbs V.King style …then and only then order a kenmore washer online wait for the loser delivery guy to show up at your front door and drop a stainless steel GE dishwasher on his head from your second story window….after I want you to go outside and place a $100.00 tip in the poor bastards pocket as well as local want ads so he can find himself a real job…
lol
V.King, be generous and palm drummer some “hump” alms.
OPEN blasting off
Not a Japanese Story, its a China story. Japan will be buying less Rare Earths, etc and China is NOT going to let Steel, etc to go up in price….they are the Pimp in this game and not Japan, not even USA pimping ben can do it, imho….btw, I so hope Congress will take BB’s Pimp Cup away.
Japan has some sway. They will be buying steel big time, but it’s a few months away. Maybe stuff like CAT will see more immediate action.