Monday, July 21, 2014

trades

     It is difficult for me to know what to make of the current situation.  The US stock market (like many others) is showing historically high valuations, based on the promise that the radically loose money policy of the Federal Reserve and most other central banks must continue.  The politicians and the media continue to beat the war drums as loudly as they can, perhaps as a distraction or perhaps because they really want a war -- it would help with the population problem and it would give an excuse for a crash.  But the markets are no longer behaving as "free", like everything else these days they exhibit strong central control characteristics.  Prices may not be "fixed" but they sure are biased.  One cannot use crowd psychology methodology for market prognostication anymore because the crowd no longer has control -- its been overruled time and time and time again in the last 6 years.

     The most curious thing about all of this is that the media (which has been unabashedly touting Rosie Scenario like a thunderstorm in a hurricane) is chanting, over and over again, the likelihood of a crash, the pullback of the supposed smart money, and in particular the asides of individual central banker figures such as Lagarde and Bullard, that the market is toppy, investors becoming overconfident, bankers taking excessive risks, and a pullback is warranted.

     I call this "curious" because this sort of behavior has never preceded a proper bubble collapse.  In 2008, in 2000, in 1987, everybody was exuberant about how the markets would never go down again.

     I cannot afford to lose here.  I have backed off of oil and gas for strictly seasonal reasons.  I'm out of gas entirely while in oil, I sold December 38's on Suncor for a very nice premium.  I put the loose cash into some large cap health issues and then sold January deep in the money calls against them.  I am happy to collect the 5% or so delay premiums and the 3% or so dividends for a six month holding period before they get called away, but in a crash I'm fairly well protected and will have plenty of cash to repurchase stuff.

     Then, I've retaken a significant position in silver.  That's always a wild card, because the silver market has always been controlled by unseen hands.  Nevertheless in a panic it could be very, very profitable.

     Finally, I've bought a significant amount of insurance in the form of VIX calls.  What I'm holding at the moment are August expiration ... but as ugly as things look right now, I'm tempted to predict that I replace them with further out instruments if they expire worthless (or also if I make a smart profit off of them)....

     In short, things look as if a major pullback, more than 20%, is really likely, it only requires for the powers that be to want it to happen.  On the other hand, a further rise from here looks to be almost impossible, there's just no fantasy that anyone can spin anymore fantastic enough to convince very many people that real growth is possible.

     Good trades to everybody -- chiz

Thursday, July 17, 2014

Drought

     There's a long article on Zero Hedge this morning about the extreme, prolonged drought occuring in the southwestern US, primarily in California.  Then, there's pages and pages of comments.  A lot of folk who sincerely believe that the problem is simply too many grass lawns being watered, too many cars being washed, or even too many showers being taken alone. 

     I guess that agriculture has become so automated, mechanized and dominated with huge organizations that responsible, so-called educated people don`t understand it anymore.  Particularly, americans don`t seem to realize how much farmland is irrigated and how much water is being used.  The results of this drought are going to be major.  The effects will be seen istrong price increases and in shortages of all sorts of vegetables, fruits, and meats.

     But that isn`t what I want to say.  I am really, really disappointed that no one seems to want to point out anymore the most basic, obvious truth to the situation.  What has changed from 100 years ago?  Well, we have built the huge dams on the Colorado and other tributaries, and huge piping systems to pump that water to lands where it can be used, so a whole lot more food is being grown.  but what else?  Has anyone noticed that the number of human beings living out there has increased by more than ten-fold?  Is anyone considering the logarithmic increase of the number of human beings on this planet?  Worldwide, our population has increased by over 150% since I was born!  

One out of fifteen people who have ever lived, in the million or two million years since mankind evolved on this planet, is still alive today!!!

 There are too many fucking people on this planet!

And nobody dares even to say so anymore.  Not one commenter on the thread even hinted at this.  It will be a far greater crisis coming upon us than even the most extreme fabrications that the global warming advocates of political change have proposed.

If, for example, there were to come to pass a sudden end of the natural gas used to manufacture nitrogen fertilizer on this planet, within six months most human beings would turn to cannibalism and half the population would be gone already ....

And nobody dares even to say so anymore.

    

Monday, July 14, 2014

gas facts

been reading arcane details all day.

a few facts, just additional color on the North American natural gas markets ...

The vast majority of nitrogen fertilizers manufactured worldwide are manufactured using natural gas as a feedstock.  This industry has grown up during my lifetime and is directly responsible for enabling the most recent worldwide population growth of 3 billion people ... without it they would die within less than a year ....

Ukraine has been a major manufacturer and exporter of nitrogen fertilizer for the world.  thinn about that statement hard in terms of current events.

Russia of course is also a major fertilier exporter.  In fact, the USA agriculture industry has been a major dependent of imports of russian fertilizer for the past 25 years.

Cheap natural gas in the USA for the last 5 years or so has stimulated the construction, renovation and expansion of fertilizer manufacturing plants.  Russian fertilizer imports have declined from around 500,000 tonnes per year to around 200,000.

Current total demand for natural gas in the USA is more than 25 trillion cubic feet.  Total demand for natural gas is growing rapidly while all other significant energy sources, coal, oil, nuclear and hydro, are all declining.

Natural gas pipelines between New York and eastern Canada have been reversed in the past few years so that Marcellus gas is being exported to Canada in quantity.

Anyone with interesting, hard facts about natural gas is encouraged to post comments.

-chiz

net neutrality

So I came across this video tonight

https://www.youtube.com/watch?v=fpbOEoRrHyU

But I am still in Brazil.

Here, the concept of net neutrality is beyond laughable.  I had to watch this video ten seconds at a time ...in between, I was torn between laughter, tears, and the excruciating effort of remembering the last several pieces that i'd heard for long enough for the next piece to make it across.

Atleast, thank the gods that the world cup matches are over.  Last week I would have needed three days to get through it.

p.s.  thanks, John ... btw I, too, hate Comcast ...but that is sort of like saying that grass is green and the sky is blue, isn't it ....