Thursday, July 31, 2014

MolyCorp (again)

I've been doing some bottom picking in MCP lately. Despite the bad news. This stock is down a long way from the heady days a few years ago when China was restricting exports of rare earth metals.
There is even news of China raising quotas now. MCP up today through recent resistance.

And how would a serious trade war with Russia and China affect imports of rare metals?

MCP looks like it could go back to $3 for a start here.

control risk,

Later at the end of the day:

MCP is looking technically challenging. To say the least.........



The stock indexes down sharply at the open today. The strong economic news yesterday and the increases in wages paid numbers this morning caused interest rates to rise, bonds to fall. But the weakness in stocks is only partly due to the prospect of rising interest rates and seems mostly to be a result of the increasing tension with Russia. A trade war with Russia, with the specter of a shooting war, as well as the increasing tension with China over trade and quality issues is putting a crimp in the international profits of international companies.

Stepping back. Does a trade war cause inflation the same as conventional shooting war does?

Over the longer term, as far as the Fed and interest rates go, I would be surprise if the Fed continued or proceeded with "tightening" if international tensions rise, and a trade war ensues. There is an election coming up in two years and that is traditionally a cause of easy monetary policy, but aside from that the Fed will take the future into account. And a looming trade war will cause them to put their obligation to tighten behind the mandate to maintain full employment.

This will cause the inflation that a war typically causes. Down the road. And in spades.
If this happens.

Just thinkin',


Wednesday, July 30, 2014

What Next

U.S. GDP Grows at 4% Rate

The Fed will release the minutes of the latest meeting later today.
Will those minutes reflect this latest information?

Probably not.
How will that affect the outlook of traders? Investors?

Take your marks!


Tuesday, July 29, 2014

World Trade War I

The parallel between the assassination of Archdude Ferdinand and the start of WWI and the downing of the Malay airliner in Ukraine may persist in a trade war.

U.S.EU Ready New Russsian Sanctions as Fighting Rages

And from STRATFOR:

Russia: Lawmakers Draft Legislation Against 'Aggressor Countries'
Situation ReportsTuesday, July 29, 2014 - 08:21 Print Text Size

Russian lawmakers have drafted proposals to designate nations that have imposed sanctions as "aggressor countries" and restrict their companies' operations within Russia, United Russia party deputy Yevgeny Fyodorov said, RFERL reported July 29, citing Izvestia. Earlier, the European Union imposed asset freezes and travel bans on business figures closely associated with Russian President Vladimir Putin as well as restrictions on trade with Crimea, according to an EU official, EUbusiness reported.

Read more: Russia: Lawmakers Draft Legislation Against 'Aggressor Countries' | Stratfor
Follow us: @stratfor on Twitter | Stratfor on Facebook

The stock markets seem indecisive.
Bond yields continue to decline.
Housing is weak with low interest rates.
Dry bulk rates do not rebound.
There is still talk of a Euro crisis.

Control risk, the bull market won't last forever.


Tuesday, July 22, 2014

Wrong Again

Wrong again on the direction of the markets in the short term.

Close short positions in the averages and sold volatility. For now.

PLUG treated me well over the last three days.

Got some SLV and SSRI.

The stock market is more resilient than I am.

Controlling risk,

Monday, July 21, 2014

Simon Black/Sarejevo/Ukraine

O'kay. So I get these emails from some dude named Simon Black who travels the world and gives his impression of the state of the world under the "Sovereign Man" heading.

And this is what he sent.

And I was there first.

July 21, 2014
Andorra la Vella, Andorra
Russians aren't exactly known for having a great sense of humor. But the language is full of bizarre, often hilarious expressions like "perebrasyvanie kakashkami".
Literally translated this means "throwing shit". And it applies right about now—when a bunch of people is standing around blaming one another for something that has gone heinously wrong.
"Heinously wrong" is somewhat of an understatement.
The MH17 disaster is so bad that it's made people forget about the roving army of fanatics that has taken over half of Iraq and parts of Syria in their quest to build a global caliphate.
This is much bigger. And there’s so much pent up tension between rising powers right now, there’s serious risk of it turning into a much greater conflict.
It seems ironic that the world was in a similar situation exactly a hundred years ago.
After the assassination of Archduke Franz Ferdinand in Sarajevo, Austria-Hungary issued a series of ultimatums to the Kingdom of Serbia, and ultimately declared war on July 28, 1914.
Tensions in Europe and around the world were at boiling point. The primacy of the British and other European colonial powers was waning, as recently formed unitary states of Germany and Italy were on the rise.
With so many rising powers, it was inevitable that conflict would ultimately ensue. Even if Franz Ferdinand’s assassination wouldn’t have happened, some other tinder would have lit the fire.
Similar conditions exist today.
Just like a century ago when waning British power invited a power struggle among rising nations, waning US power is creating conflict with Russia, China, etc.
A century ago, they settled it on the battlefield. Everyone knew war would eventually come to Europe. But the great miscalculation was they presumed it would be just another 19th century limited war.
It was anything but.
The great war brought brutal mass killings, bombings, heavy artillery, gassing, etc. And it changed warfare forever.
This time around, the way we conduct war is different. Similarly, leaders are miscalculating, thinking that they can scare their opponents with warships and fighter jets.
But modern warfare isn’t fought with boots on the ground. In 2014, cyberwar and economic war looms.
And this type of war is something that will affect literally every person who is plugged in to the global financial system.
I invite you to explore more with me on this critically important topic in today’s podcast. You can give it a listen here:

Until tomorrow,
Simon Black
Senior Editor,
Neither this email communication nor content posted to the website is intended to provide personal financial advice. Before undertaking any action described in this letter, financial or otherwise, you should discuss your options with a qualified advisor-- accountant, financial planner, attorney, priest, IRS auditor, Tim Geithner... Also, nothing published in this letter constitutes encouragement to avoid or evade tax obligations in your home country. Furthermore, you should understand that may in some instances receive financial compensation for products and/or services which are mentioned in the letter, and in other cases, receives no compensation. The needs of the community come first, and the presence or lack of financial compensation in no way affects the recommendations made in this letter.

If you'd like to update your email address or no longer wish to receive our daily emails, click the link below:
Blacksmith Pte. Ltd. publisher of Sovereign Man No.4 Kiarong Complex Gadong 2nd Floor Block D BSB, Brunei-Muara BE1318 Brunei Darussalam

Friday, July 18, 2014


I got my shorts squeezed today..... Kinda uncomfortable way down low.

If you know what I mean.


Thursday, July 17, 2014

Interesting site

Archduke Ferdinand Assassinated

The sidebar is interesting.
Here's what it looked like:

Malaysian Passenger Plane Shot Down

This just in:


Markets down sharply.

IF this plane WAS shot down and was at 30,000 ft. as reported it would have been done with a larger ground to air weapon. Not a handheld weapon.

Have I mentioned that the Russians are traders. It would be like them, two days after sanctions are increased against them, to short the market and then shoot down a plane.

But, I speculate .................


Wednesday, July 16, 2014

Just About to the Edge

That is what it feels like to me. Just a little push and the market will crack.

Let us see what happens.

One.  Two.  Three.