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Dr. Fly

18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.

NIKKEI Closes Up 5.68%

Big gains in Sony, Hitachi, Toyota, Honda etc.

Korea bounced by 1.7% and Australia and China were up modestly. Hong Kong was the one outlier, still sitting with minor losses. As of now, US futures are pointing to a flat to slightly down open.

Copper, gold and natural gas are up less than 1% and the dollar is modestly higher.

Crack spreads have rebounded off session lows, now down about 0.25%.

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Flash: Radiation Levels 20x Normal in Tokyo

In a press conference just a short while ago, Governor Ishihara of Tokyo had this to say:

“I received a report this morning that there was an important change of data,” Gov. Shintaro Ishihara said at a news conference. “I heard that it will not immediately cause health problems.”

via Japan Times

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Flash: Workers Abandon Fukushima Plant

Fukushima PlantNY Post is reporting workers have abandoned the nuclear power plants at Fukushima, effectively ceasing all operations.

UPDATE: workers will be allowed back on site once radiation levels drop.

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Asia Sells Off on Fears of Japanese Contraction

The NIKKEI is still up 4%+. However, most Asian markets, led by Hong Kong (-0.5%) are weakening due to fears that weak Japanese end user demand will crush their economies. Most south Asian economies depend heavily on Japan, being a main destination for their low quality shit. For example, Japan makes up 13% of Thailand’s export market.

It’s worth noting, Japanese futures are up just 2%, indicating a drop of 2% is in the cards when those lazy bastards come back from lunch.

U.S. futures are down 3.80 at the moment.

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Japan’s Refining Capacity Still Crippled

Refining margins are up 53% since Thursday. Of Japan’s 4.3m b/d of capacity, Morgan Stanley is suggesting just 1.4m b/d is offline. Moreover, because of the extensive damage to the refineries at JX and Cosmo, supply is likely to remain offline for an extended period of time.

At the present, due to Japan’s nuclear power plants turning the Northeast corridor of its country into a wasteland, they will need to import at least 317b b/d of oil and 2.1bcm of gas. They will use said fossil fuels to restart their thermal power plants, now idle at 26% capacity (oil) and 57% (gas). In order to afford their citizens with electricity, and other such luxuries, they will likely bring capacity up to 70% and 65%, respectively.

Hence the need for foreign oil.

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Crack Spreads Moderating

In Tuesday’s session, crack spreads fell by more than 6%, as investors liquidated any and all commodities. During tonight’s session, thus far, the spreads are working against the interests of the refiners, down 1.3% to $22. With oil rising nearly 1% and gasoline and heating oil up less than 0.3%, the greaseballs over at VLO and WNR will need magic wands and hypnotism machines to keep investors faithful.

Crack spreads hit a high of $25 yesterday.

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Profit Margins at 18 Year Highs

Despite prognostications of the world ending inside of a nuclear cloud, U.S. corporations are in the midst of a profitable renaissance. Margins are expected to climb by 8.9% in 2011, allowing CEO’s to raise dividends.

However, it’s worth noting, they have little to no interest in hiring lazy Americans to make their cheap goods. They much prefer the slave camps at FOXCONN to man the whip.

New U.S. labor pool, FOXCONN Factory: Shenzen, China

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And Another Chinese Trading Halt: SDTH

I am convinced; they are all scams.

The NASDAQ Stock Market® (Nasdaq:NDAQ) announced today that the trading halt status in ShengdaTech, Inc. (Nasdaq:SDTH) was changed to “additional information requested” from the company. Trading in the company’s stock had been halted on March 15, 2011 at 7:55:20 a.m. Eastern Time for “news pending” at a last sale price of $3.551. Trading will remain halted until ShengdaTech, Inc. has fully satisfied NASDAQ’s request for additional information. “

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Solar Stocks Soar

Based on the newly founded hatred for nuclear bombs posing as power plants, investors are bidding up solar names.

SPWRA +10%

TSL +9%

CSIQ +9%

STP +8%

LDK +8%

YGE +8%

JASO +7%

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A Chinese Copper Disaster in the Making

Chinese banks are in the business of extending loans to people against copper inventories. It gets better.

FT Alphaville said it best:

…buy copper on credit, take delivery of said copper, sell said copper at full price to market, then post the returns in higher yielding assets until the due date for the full payment of the letter of credit arrives — in most cases some 180 days later.

Get it? In other words, the Chinese are extending credit for the explicit purposes of commodity speculation, not so much different than our banks blowing up the housing market with hot money to homeless guys in need of a Mcmansion. Moreover, this sort of fucked up banking is not exclusive to just copper. Basically, ALL COMMODITIES CAN BE USED AS COLLATERAL for cold hard cash. Essentially, people have 180 days to pay for the copper once it’s delivered into the country—“inventory financing.”

Now you know why copper demand is so high. However, the billion dollar question is: where is all that “inventory financing” money going? And, what will happen to said investments should the price of copper begin to unwind and trade lower?

1 year chart- copper

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Raw Commodities Are Getting Hammered

Stocks are not the only asset class getting poleaxed, so are raw commodities.

Uranium -15%
Biofuels -9%
Palladium -7%
Tin -6%
Sugar -6%
Gasoline -5%
Cotton -4%
Coffee -3%

Data provided by The PPT

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Best Performing Stocks This Morning

The following stocks are outperforming, despite today’s carnage.

BWEN +20%
CBLI +12%
CCRT +12%
IPXL +8%
OSIR +7%
WSM +5%
PESI +15%

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Top Performing ETF’s at the Open

Here are the top performing ETF’s, as of 9:50 am.

BXDD +23%
DPK +16%
EWV +14.8%
SOXS +10.5%
EFU +10%
BXDC +10%
ZSL +9.5%

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U.S. Futures Bounce off the Lows

In a recent press conference, government spokesman, Yukio Edano, said radiation levels outside of Fukushima were not at dangerous levels.

Japanese markets rallied off the lows, closing down a modest 10 point fucking five percent. In sympathy, global markets staged “idiot runs” to cash.

US futures have moderated a bit and are barely down 200.

Related: the fireman company posing as some sort of high tech electricity firm, Tepco, was placed on credit watch negative by the pigs at S&P.

Oil is down almost 2% and the dollar is up for a change to the tune of 0.5%.

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Sharpest Two Day Decline Since 1949

The two day decline in Japan has erased more than 500 billion in market cap and represents the largest two day decline since 1949.

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