Is Silver Finally Cheap ?

I could not resist and picked some up yesterday.

“After a nearly 9% dive in silver prices this month, investors should be able to breathe a sigh of relief as growth in industrial and investment demand gains pace, and calls of “oversold” conditions and “bargain” prices for the precious metal intensify.

“Silver is grossly oversold at current levels, more so than any time in the past five years,” said James Carrillo, senior portfolio adviser for precious-metals investment firm Swiss America Trading Corp.

Silver futures prices SIH3 -0.92% have lost $2.65 an ounce, or 8.5%, this month, after closing at $28.70 Thursday on the Comex division of the New York Mercantile Exchange. Year to date, they’ve lost over 5%. That compares with gold’s GCJ3 -0.35%month-to-date loss of around 5% and a nearly 6% decline for the year.

“Fundamentally, silver should be rising,” as physical demand remains strong, said Carrillo. “However, the technical side of the market is dictating direction currently.”

Before Thursday’s 0.3% gain, silver prices had fallen for five sessions in a row—dropping nearly 8% during that losing streak and breaking a key support level by settling below $30 on Feb. 15. Prices closed Wednesday at their lowest since Aug. 20. The iShares Silver Trust SLV -0.65%  , which holds silver bullion, is down nearly 6% this year.

The absence of China last week due to the Lunar New Year celebrations “set the ball rolling and left the silver price at the mercy of the technical picture,” said Julian Phillips, a South Africa-based contributor to SilverForecaster.com. “I would expect a snapback just as surprising as the fall.”

Good signs….”

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“By denying coverage to spouses, employers not only save the annual premiums, but also the new fees that went into effect as part of the Affordable Care Act. This year, companies have to pay $1 or $2 “per life” covered on their plans, a sum that jumps to $65 in 2014. And health law guidelines proposed recently mandate coverage of employees’ dependent children (up to age 26), but husbands and wives are optional. “The question about whether it’s obligatory to cover the family of the employee is being thought through more than ever before,” says Helen Darling, president of the National Business Group on Health. See: When your boss doesn’t trust your doctor.

While surcharges for spousal coverage are more common, last year, 6% of large employers excluded spouses, up from 5% in 2010, as did 4% of huge companies with at least 20,000 employees, twice as many as in 2010, according to human resources firm Mercer. These “spousal carve-outs,” or “working spouse provisions,” generally prohibit only people who could get coverage through their own job from enrolling in their spouse’s plan.

Such exclusions barely existed three years ago, but experts expect an increasing number of employers to adopt them: “That’s the next step,” Darling says. HMS, a company that audits plans for employers, estimates that nearly a third of companies might have such policies now. Holdouts say they feel under pressure to follow suit. “We’re the last domino,” says Duke Bennett, mayor of Terre Haute, Ind., which is instituting a spousal carve-out for the city’s health plan, effective July 2013, after nearly all major employers in the area dropped spouses.

But when employers drop spouses, they often lose more than just the one individual, when couples choose instead to seek coverage together under the other partner’s employer. Terre Haute, which pays $6 million annually to insure nearly 1,200 people including employees and their family members, received more than 20 new plan members when a local university, bank and county government stopped insuring spouses, according to Bennett. “We have a great plan, so they want to be on ours. All we’re trying to do is level the playing field here,” he says….”

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Infograph on prices around the country

Currently $DRI is up nearly 2%…

Source

“Feb 22 (Reuters) – Olive Garden parent Darden Restaurants Inc warned that its third-quarter profit would be below Wall Street estimates, as a severe winter kept customers away.

The company expects blended U.S. same-restaurant sales at its Olive Garden, Red Lobster and LongHorn Steakhouse to be down about 4.5 percent in the third-quarter ending Feb. 24.

Darden said earnings were likely to be between $1.00 and $1.02 per share. Analysts on an average are expecting a profit of $1.13 per share, according to Thomson Reuters I/B/E/S.

The Orlando, Florida-based company’s shares were up marginally before the bell on Friday. They closed at $44.74 on Thursday on the New York Stock Exchange.”

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“There is a currency war, insists Gerald Celente, editor and publisher of the Trends Journal, and it’s going to degenerate into all out combat.

Celente’s declaration and forecast stand in sharp contrast to those of global finance leaders who are aiming to bury concerns about a currency war, as the act of competitive currency devaluation is called.

At last weekend’s G20 meeting, the finance leaders promised to “refrain from competitive [currency] devaluation,”

“It’s quite clear … that everyone around the table wants to avoid any sort of currency dispute,” Canadian Finance Jim Flaherty told reporters, according to Reuters.

“We all agreed on the fact that we refuse to enter any currency war,” Reuters said French Minister Pierre Moscovici told reporters.

“Who are they kidding?” Celente asked.

“The only reason the world economies — the United States, Europe and even China — are doing anything is because of all the cheap money they are dumping into the system. But they don’t call it currency wars. They have white shoe boy names for them,” he told Yahoo.

Names such as OMT, or Outright Monetary Transactions, and QE, or quantitative easing, sound nicer. They sound “proper,” he noted. But Celente said these programs and efforts by the likes of Japan and Venezuela to devalue their currency are part of a currency war that is definitely occurring…..”

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“Four economists, including a former Federal Reserve governor who has co-written research with Chairman Ben S. Bernanke, warned that losses from the central bank’s more than $3 trillion balance sheet could lead to the Fed losing control of monetary policy.

“The combination of a massively expanded central bank balance sheet and an unsustainable public debt trajectory is a mix that has the potential to substantially reduce the flexibility of monetary policy,” the economists write. “This mix could induce a bias toward slower exit or easier policy, and be seen as the first step toward fiscal dominance. It could thereby be the cause of longer-term inflation expectations and raise the risk of inflation overall.”

The conclusion from economists, including Frederic Mishkin, a governor at the central bank from 2006 to 2008 and an academic collaborator with Bernanke before that, will be presented at the U.S. Monetary Policy Forum in New York. Their paper serves as a high-profile warning to an audience including Boston Fed President Eric Rosengren, Fed Governor Jerome Powell and St. Louis Fed President James Bullard.

The central bank is currently purchasing $85 billion a month of Treasuries and mortgage-backed securities, following two previous rounds totaling $2.3 trillion, in an effort to lower an unemployment rate stuck near 7.9 percent. Once the economy strengthens, the central bank plans to unwind its balance sheet by raising interest rates and selling many of the assets acquired over the past four years.

Substantial Losses…”

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“……Foxconn’s hiring freeze may also be related to Apple’s move toward using more assemblers. For example, Foxconn rival Pegatron assembles about 40 percent of iPad minis, which have taken market share away from the original iPad, manufactured by Foxconn.

Analysts, investors and Apple fanboys (and fangirls) have kept a close eye on demand for the iPhone 5 as the company weathers increasing competition from Samsung. In January, concerns that the smartphone is underperforming were fueled by reports that iPhone 5 component orders had been cut. Exane BNP Paribas analyst Alexander Peterc estimates that Apple will sell 38 million iPhone 5s this quarter, 20 percent less than the prior period.

On the other hand, Strategy Analytics recent published a report that said the iPhone 5 became the best-selling smartphone globally in Q4, overtaking Samsung’s flagship Galaxy SIII. The research firm estimates that 27.4 million iPhone smartphones shipped worldwide during Q4, compared to 15.4 million Galaxy SIII units. But, as Natasha Lomas noted, neither company discloses quarterly handset sales and comparing the performance of the two devices is somewhat unfair, because the iPhone 5 launched last September and the Galaxy SIII came out back in May, meaning that the newer Galaxy SIV may have eaten into some of its sales….”

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“It was only two weeks ago that Fed governor Jerremy Stein delivered a speech titled “Overheating in Credit Markets” in which he observed the obvious and warned that a new credit bubble was forming (not to mention housing, tech, student loan, GM channel stuffing and much more). And it was only yesterday that we learned that Bernanke, after a 6 year hiatus, just had his latest “everything is contained” moment. FromBusinessWeek:

“Federal Reserve Chairman Ben S. Bernanke minimized concerns that the central bank’s easy monetary policy has spawned economically-risky asset bubbles in comments at a meeting with dealers and investors this month, according to three people with knowledge of the discussions…..”

Full article and a memory jolt on the clam

“ObamaCare will act as a neutron bomb on employment in the U.S. for two basic reasons.

Sickcare is unsustainable for a number of interlocking reasons: defensive medicine in response to a broken malpractice system; opaque pricing; quasi-monopolies/cartels; systemic disconnect of health from food, diet and fitness; fraud and paperwork consume at least 40% of all sickcare funds; fee-for-service in a cartel system; employers being responsible for healthcare, and a fundamental absence of competition and transparency.

“According to the Deutsche BankLong-Term Asset Return Study, the last time interest rates were near current levels, in the 1950s, Treasury bonds lost 40% of their inflation-adjusted value over the following three decades. With bond yields near all-time lows, Richard Barley of The Wall Street Journalwrites, “For a one-percentage point rise in yields, 10-year U.S. Treasury holders face a price drop of nearly nine percentage points. Bonds have become so richly valued that UBS is reportedly reclassifying brokerage clients who are overweight bonds as “aggressive” investors — most likely to avoid future lawsuits if and when bonds lose value.

After significant investigation I have come to the conclusion that bonds should now come with a warning label.

It is no secret that the federal funds rate is extremely low.  It has been low for a while, and according to the Federal Reserve, should remain low through 2015.  After that, according to Warren Buffett, the billionaire chairman of Berkshire Hathaway it may be difficult for interest rates and inflation to remain low….”

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“Wal-Mart Stores Inc. WMT +0.11% on Thursday joined a parade of retailers, restaurants and consumer-goods companies worried about the economic impact of the recently restored federal payroll tax that has left Americans with less money to spend.

The world’s largest retailer, Burger King Worldwide Inc., BKW +1.31% Kraft Foods Group Inc. KRFT +0.65% and others are lowering forecasts and adjusting sales and marketing strategies, expecting consumers with smaller paychecks to dine out less and trade down to less expensive purchases.

The expiration of the payroll tax cuts that knocked 2% off consumers’ take-home pay is having an impact, these companies say. It will ding a household with $65,000 in annual income $1,300 this year, and shift $110 billion overall out of consumers’ hands, estimates Citigroup C +0.92% .

Now, Wal-Mart is stocking more of its shelves with cheaper products, and smaller-size packages of diapers, toilet paper and snacks. Burger King is cutting its Whopper Jr. sandwich to $1.29 from about $2, and focusing advertising on its value menu items rather than higher-price salads or smoothies.

Kraft and meat supplier Tyson Foods Inc. TSN +1.24% are introducing more lower-priced products to help restaurants and supermarkets adapt to the consumer spending downshift.

These companies say the changes could be long-lasting and are revamping operations to better cater to consumers pinched by higher taxes, stagnant wage growth and rising gasoline prices, which jumped nearly 50 cents a gallon in the past month alone.

Less take-home pay is causing 45.7% of consumers to curtail spending, according to a survey released on Thursday by the National Retail Federation, a trade group. A quarter of consumers are delaying big-ticket purchases, a third are reducing restaurant visits, and about a fifth of shoppers are spending less on groceries, it said….”

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“Nordstrom, Inc. (NYSE:JWN) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Gross Margin Performance

Deborah Weinswig – Citi: Can you discuss the gross margin performance in the quarter maybe just give us little more color?

Michael G. Koppel – EVP and CFO: Sure. Our gross profit benefit this quarter by an improvement in markdowns year-over-year. We saw some significant improvement in our women’s apparel business, which was reflected in that, and that was partially offset by the increased costs as it relates to our Fashion Rewards program. But overall a relatively good merchandise margin performance.

Deborah Weinswig – Citi: As your guidance – in the future you talked about not relying onEBIT margin expansion to drive future growth. And obviously there is a lot of moving pieces and Internet growth and growth in the outlet, no Rack business. As we look at all the moving pieces and not much borrowing growth, how should we think about one offsetting the other?…”

Full comentary & report

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“The Federal Reserve’s “very aggressive” easy money policy is going to stay that way for a “long time,” St. Louis Fed President James Bullard told CNBC on Friday.

“This is a monetary policy that packs a punch,” said Bullard, who’s a voting member on the Federal Open Market Committee (FOMC).

Uncertainty about the future of the central bank’s bond-buying program has weighed on the stock market in recent days.

But the St. Louis Fed president said in Friday’s “Squawk Box” interview, “I think policy is much easier than it was last year because the outright purchases are more potent tool than the ‘Twist’ program was … I don’t think markets have fully absorbed that switch.”

Bullard added, “Fed policy is very easy and it’s going stay easy for a long time.”

On Wednesday, the FOMC released minutes of its January meeting, which said “many participants” expressed concerns about “potential costs and risks arising from further asset purchases.” …”

Full article and video interview 

“A few years ago, American automakers cut tens of thousands of jobs and shut dozens of factories simply to survive.

But since the recession ended and General Motors and Chrysler began to recover with the help of hefty government bailouts and bankruptcy filings, all three Detroit car companies including Ford Motor Companyhave achieved one of the unlikeliest comebacks among industries devastated during the financial crisis.

Now steadily rising auto sales and two-tier wage concessions from labor have spurred a wave of new manufacturing investments and hiring by the three Detroit automakers in the United States. The latest development occurred on Thursday, when Ford said it was adding 450 jobs and expanding what had been a beleaguered engine plant in Ohio to feed the growing demand for more fuel-efficient cars and S.U.V.’s in the American market.

Ford, the nation’s second-largest automaker after G.M., said it would spend $200 million to renovate its Cleveland engine plant to produce small, turbocharged engines used in its top-selling models. Ford plans to centralize production of its two-liter EcoBoost engine — used in popular models like the Fusion sedan and Explorer S.U.V. — at the Cleveland facility by the end of next year.

Its move to expand production in the United States is yet another tangible sign of recovery among the Detroit auto companies. Industrywide sales in the United States are expected to top 15 million vehicles this year after sinking beneath 11 million in 2009.

Last month, G.M. announced plans to invest $600 million in its assembly plant in Kansas City, Kan., one of the company’s oldest factories in the country. And Chrysler, the smallest of the Detroit car companies, is adding a third shift of workers to its Jeep plant in Detroit.

The biggest factor in the market’s revival has been the need by consumers to replace aging, gas-guzzling models. ”Pent-up demand and widespread access to credit are keeping up the sales momentum,” said Jessica Caldwell, an analyst with the auto research site Edmunds.com….”

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[youtube://http://www.youtube.com/watch?v=uBuPiC3ArL8 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=uBuPiC3ArL8

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In Play ,

On the Wires 

“Well, not necessarily, but while Apple’s stock continues to grind lower, Google’s stock is on a tear.

And now analysts are jumping over themselves to get more bullish on Google.

Just yesterday, two separate analysts put $1,000 price targets on the stock.

What gives? Well, of course people can make up all kinds of stories about the momentum of either company, and their products and so forth.

But there’s a bigger macro-market story as well.

Throughout recent years, Apple has basically been an asset class on its own: Gold, commodities, stocks, bonds, and Apple.

If you were in Apple, your portfolio did great. If you weren’t, you almost certainly lagged the market. End of story.

At a time when people were uncertain about markets, Apple was a solid store of value. A company growing at abnormal speeds at a good price. Even if the economy were to slow, there was Apple, which you know would still be crushing it….”

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