Comments »Jeffco’s well regarded Telco analyst Peter Misek is backing off of his uber-bearish stance on Research in Motion (NASDAQ:RIMM) this AM and upgrading the name to a Hold from Underperform.
– According to Misek RIMM could be a ~$43 stock in 12 months, if things go well.
Monthly Archives: November 2012
The Calm Before the Storm: Commodity Super Cycle
“Canada’s top mining official believes the global commodity supercycle is not over, but rather it’s just on pause before it comes roaring back to life.
Pierre Gratton, president of the Mining Association of Canada (MAC), insisted in The Globe and Mail that renewed record demand for commodities from Asia is on the horizon.
“Having been in this business now for 13 years, there is a very significant difference between the mood in this downturn and the kind of attitude and the kind of mood that I used to see in 2000 and 2001,” Gratton said, adding that he expects continued favorable sentiment among industry players to be a positive.”
Comments »Nassim Taleb: Institutions Should Roll with Black Swans, Not Resist Them
” Institutions these days should be flexible and nimble in nature and able to roll with black swan events like bamboo in a storm rather than resist them and snap a like bigger tree, said Nassim Taleb, the author and financial guru whose 2007 book “The Black Swan” predicted the current financial crisis.
Black swan events, according to Taleb, are incidents that strike unexpectedly and inflict major damage to markets and economies, many of which are obvious in hindsight.
Businesses and governments today often worry when a black swan event might occur, though they would be better to focus on being able to withstand blindside punches by being nimble and flexible like a small outfit rather than bulking up to resist the unknown.”
Comments »Daily Thoughts by Art Cashin
“As investors’ and traders’ attention spans diminish at ever-increasing speed, it is perhaps useful to step back and survey a landscape of global economic growth from a longer-term panorama in order to grasp the real trend and the real unusualness of our current environment. UBS’ Art Cashin, while not 800 years old, reflects on such a long-term cycle providing some perspective on our belief that “economic growth be regarded as a continuous process that will persist forever,” opining that perhaps, based on the study below (Is US Economic Growth Over?), we “could well be a unique episode in human history rather than a guarantee of endless future advance at the same rate.” Of course, that would never fit with the current meme that growth is credit is life, but nevertheless well worth some introspection as we give thanks this week.
Via UBS’ Art Cashin:
An Absolutely Fascinating Study – A friend of mine pointed me to an absolutely fascinating study. My friend felt it added credibility to his thesis that civilization and economics are subject to an 800 year cycle. My friend likes to cite lots of markers to prove/justify his thesis. He talks of the Dark Ages, the Age of Discovery, and the Age of Enlightenment as some of those markers. It is an entertaining hypothesis and, some day, if there is enough time, space and mental lubricant available, I may outline his hypothesis (at least as far as I can understand it).
In the meantime, I am grateful that he pointed me to a study by Professor Robert J. Gordon of Northwestern University. The study is published by the Centre for Economic Policy Research. While I don’t see any connection or support for an 800 year cycle, the report is chock full of eye-opening historical data. Here’s how the author begins to outline his thesis:
The paper makes these basic points:”
Comments »The SEC Plays Catch Up for Investors Probing Into Exchanges and High Speed Trading
Judge Orders Hostess and Union to Work Differences Out
“Seeking to save more than 18,000 jobs, a bankruptcy judge surprised Hostess Brands Inc. and its warring union Monday by delaying the company’s bid to close its 85-year-old bakery business and sell off its factories, brands and other assets.
Instead, Judge Robert Drain asked both sides to join him Tuesday for a mediation session where he will try to broker a new contract. If Tuesday’s long-shot session fails, then the company will be able to return to court Wednesday to try to move ahead with its plans to close down.
Hostess had asked the U.S. bankruptcy judge for permission to liquidate, arguing that the bakers union’s more than week-long strike had left it unable to produce Twinkies, Ho-Hos, Wonder Bread and other longtime supermarket staples. Hostess said it didn’t have the financial wherewithal to continue operating amid the work stoppage.”
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Stocks and Stories on the Move This Morning
Upgrades and Downgrades This Morning
AKS, AMAT, ADM, ARMH, BWP, CLF, COH, INTC, JOY, PBR, RLGY, RIMM, TDC, TSN, WFC, WFM,
Comments »In Play and On the Wires
US to Weigh In on Apple, Samsung Patent War
“The U.S. International Trade Commission will review a judge’s decision which found that Apple did not violate patents owned by Samsung Electronics in making the iPod touch, iPhone and iPad.
An administrative law judge at the ITC had said in a preliminary ruling in September that Apple was innocent of violating the patents. The ITC, which could have opted to simply uphold the judge’s decision, said that it would take up the matter. A final decision is expected in January.
If Apple is found to infringe, its devices can be banned for sale in the U.S.
Apple and Samsung have taken their bruising patent disputes to some 10 countries as they vie for market share in the booming mobile industry.”
Comments »Muddy Waters Announces a Short on Singapore Commodity Company
“Nov. 20 (Bloomberg) — Olam International Ltd. slumped the most in six months in Singapore trading after short-seller Carson Block questioned the agricultural commodity trader’s accounting methods.
The share declined 7.5 percent to S$1.61 at the close, the lowest since May 16, while its bonds also fell in Asian trade. Block said he is betting against the stock because Olam, which had a record level of shorts as of Nov. 15, is booking profits on transactions before it’s clear how the deals will work out and is “aggressive” in reporting biological gains.
Olam “strongly rejects the assertions made by Carson Block and or Muddy Waters,” it said in a statement. The company said earlier it wasn’t contacted before by Block nor his Muddy Waters LLC research firm, and may issue a further statement if Block publishes a report on Olam.
Block, a 36-year-old lawyer, has successfully bet against Chinese companies that trade in North America after questioning their accounting methods. One target, tree-plantation operator Sino-Forest Corp., slumped 74 percent before eventually filing for bankruptcy protection in March.
“Olam has to come out to prove their case and allay the fears raised by Muddy Waters,” said Alan Richardson, a Singapore-based fund manager who helps oversee about $82 billion for Samsung Asset Management, which doesn’t own Olam shares. “We will need to see how both sides are able to articulate their arguments.”
Bonds Tumble”
Comments »$MS Puts Out Their Predictions for 2013
“It’s the best time of the year: 2013 predictions time.
All of the banks and analysts are coming out with their updated forecasts for what the new year will bring.
Morgan Stanley’s Joachim Fels declares in his 2013 Outlook that the global economy will once again remain ‘Stuck In The Twilight’ zone of mediocre growth, and high dependence on government action. Around the world (but especially in the US and Europe) much will depend on how badly policymakers screw it up.
This table shows the firm’s outlook.”
Comments »Housing Starts Help Futures to Go Green
“WOW:
Nice number!
Housing starts for the month surged to 894K, well above the 840K that was expected, and nicely above last month’s 872K annualized rate.
This is consistent with the surge in homebuilder sentiment that we got yesterday.
Earlier:
Big datapoint of the day: Housing starts.
Analysts are expecting 840K (annualized) down from 872K last month.
Hurricane Sandy may be a factor.
As we’ve been writing lately, the creation of new houses and households is becoming a major positive tailwind for the economy.”
Comments »More on $HPQs Accounting Fraud
“Troubled tech giant HP has announced a disastrous earnings report.
The company is falling nearly 11% in the pre-market after ugly guidance, and a massive $8.8 billion writeoff at Autonomy, a British software company it acquired in 2011 for just over $10 billion.
The release blames accounting “improprieties” at the company that occurred prior to HP’s acquisition.”
Comments »Same Store Sales Fall at $BBY Again
The interwebs is killing this big box retailer. Sales were down 4.3% at stores that have been open for at least 14 months.
Comments »Carl, ‘I Want Seats on Your Board,’ Ichan Increases His Position in $CHK
Soros Buying Gold as Record Prices Seen on Stimulus
“Gold’s 12-year rally, the longest in at least nine decades, is poised to continue in 2013 as central bank stimulus spurs investors from John Paulson to George Soros to accumulate the highest combined bullion holdings ever.
The metal will rise every quarter next year and average $1,925 an ounce in the final three months, or 11 percent more than now, according to the median of 16 analyst estimates compiled by Bloomberg. Paulson & Co. has a $3.67 billion bet through the SPDR Gold Trust (GLD), the biggest gold-backed exchange- traded product, and Soros Fund Management LLC increased its holdings by 49 percent in the third quarter, U.S. Securities and Exchange Commission filings show.
Central banks from Europe to China are pledging more steps to boost growth, raising concern about inflation and currency devaluation. Investors bought 247.5 metric tons through ETPs this year, exceeding annual U.S. mine output. While both sides said talks Nov. 16 between President Barack Obama and Congress over the so-called fiscal cliff were “constructive,” the Congressional Budget Office has warned the U.S. risks a recession if spending cuts and tax rises aren’t resolved.”
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The Yen Spikes as the BoJ Refrains From Easing During Regular Policy Meetings
“The yen rallied from near its weakest level in almost seven months against the dollar after Bank of Japan (8301) Governor Masaaki Shirakawa said the opposition party’s proposals to weaken the currency are unrealistic.
The Japanese currency rose versus most of its 16 major counterparts as the BOJ refrained from adding to stimulus measures. Shinzo Abe, favored to topple Japan’s prime minister in Dec. 16 elections, has advocated unlimited easing. The euro weakened against the pound after Moody’s Investors Service cut France’s top rating, renewing concern that Europe’s debt crisis will deepen.
“Shirakawa is being cautious, pouring some cold water on some of the ideas that have been put out by the opposition,” said Derek Halpenny, European head of global-markets research at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “It’s a reason to pare short positions on the yen.” A short position is a bet that an asset will fall in price.
The yen climbed 0.2 percent to 81.28 per dollar at 11 a.m. London time. It touched 81.59 yesterday, the weakest level since April 25. Japan’s currency rose 0.2 percent to 104.10 per euro. Europe’s currency was little changed at $1.2807.
The pound appreciated 0.2 percent to 80.43 pence per euro, after depreciating to 80.65 pence on Nov. 15, the weakest since Oct. 31.
The yen will strengthen toward 79 per dollar within the next six weeks, amid demand for the safest assets, Halpenny forecast.”
Comments »Oil Drops on Israeli Cease Fire, U.S. Supply Build
“Oil slid from the highest level in a month in New York on signs that yesterday’s gains were excessive, given speculation stockpiles rose for a third week in the U.S., the world’s largest consumer of crude.
West Texas Intermediate dropped as much as 0.8 percent after climbing 2.7 percent. Crude inventories in the U.S. probably increased by 1 million barrels last week, a Bloomberg Newssurvey showed before an Energy Department report tomorrow. Prices surged yesterday as Israeli ground forces prepared to enter the Gaza Strip for the first time in almost four years.
“The market remains well-supplied,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt who forecasts WTI futures will rise above $90 a barrel before the end of the year, said by phone. “The bias is upwards due to supply risks and geopolitical tensions. The risk of an Israeli invasion into the Gaza strip is still there.”
Crude for January delivery fell as much as 75 cents to $88.53 a barrel in electronic trading on the New York Mercantile Exchange. It was at $89.07 at 11:46 a.m. London time. The contract surged to $89.28 yesterday, the highest close since Oct. 19. Prices have declined 10 percent this year.
Brent for January settlement on the London-based ICE Futures Europe exchange slipped as much as 95 cents, or 0.9 percent, to $110.75 a barrel. The European benchmark crude was at a premium of $22.46 to WTI, from $22.42 yesterday.”
Comments »Technical Analysts See a Double Top in the Euro Chart
“The euro may fall to its weakest level since August, Brown Brothers Harriman & Co. said, citing an M-shaped trading pattern known as a double-top formation.
The 17-nation euro is trading near $1.28, where the neck line of the double top comprising the Sept. 17 high of $1.3172 and the Oct. 17 high of $1.3140 lies, said Marc Chandler, the global head of currency strategy at Brown Brothers in New York.
“The minimum objective of the pattern is around $1.2450, which is just beyond the 61.8% retracement of the euro’s Q3 rally,” Chandler wrote in an emailed-note yesterday, also citing a chart based on the Fibonacci sequence of numbers. He is “cautiously bearish,” Chandler said.
The euro fell 0.3 percent to $1.2782 as of 10:03 a.m. in Tokyo from the close yesterday in New York. The $1.2450 level was last seen on Aug. 22. The currency had advanced from a low of $1.2043 on July 24 to a high of $1.3172 on Sept. 17.”
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