Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: stocks

OPEC Getting Some Help from Nervous Energy Company Bondholders

This article was published by The McAlvany Intelligence Advisor on Friday, July 21, 2017:

It’s no wonder that investors owning bonds of companies in the energy business are getting nervous. They purchased high-yield bonds issued by them, seeking income when there was little to be had elsewhere. Last year they were rewarded with 38 percent gains in their holdings as the industry rebounded.

But in June Bloomberg reported that those same bondholders saw their values drop by two percent. This is on top of energy stocks that have tanked 16 percent so far this year.

It’s the vicious circle facing frackers.

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Fracking’s Vicious Cycle Making Bondholders Nervous

This article appeared online at TheNewAmerican.com on Thursday, July 20, 2017:

King Abdullah ibn Abdul Aziz in 2002

King Abdullah ibn Abdul Aziz

Investors in high-yield bonds issued by small fracking companies are getting nervous. Last year those bonds, according to Bloomberg, gained some 38 percent as they rebounded from lows set earlier. In June they slipped two percent. In the bond business, that’s enough to make bond fund managers and individual investors nervous. It’s bad enough that the S&P 500 Energy Sector Index of energy stocks has lost 16 percent so far this year. What’s worse is the vicious cycle that frackers find themselves in.

For instance,

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Goldilocks Stock Market Making Forecasters Nervous

This article appeared online at TheNewAmerican.com on Thursday, July 13, 2017:  

At the moment, Wall Street investors are enjoying a “Goldilocks” economy: not so hot that it pushes prices up and not so cold that it causes a recession. Translation: Unemployment is low, wages are rising, interest rates are still near record lows, the gross domestic product (GDP) continues to grow (although not as fast as President Trump would like), and inflation is under control.

It isn’t a perfect world, but to Wall Street investors it’s close.

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More “Fake News?” Trump Behind Wednesday’s Stock Market Dump

This article was published by The McAlvany Intelligence Advisor on Friday, May 19, 2017:

Cover of "The Intelligent Investor: The D...

It’s almost too trite to say that the mainstream media engages in “fake news,” but its nearly unanimous claim that Wednesday’s selloff in stocks was due to Trump’s troubles borders on fake news. It certainly violates a primary rule of logic: post hoc, ergo propter hoc – after this, therefore because of this.

Here is a perfect, but certainly not the only, example. From Marketwatch one learns that “The sell-off came in the wake of a bombshell report in the New York Times that notes from fired FBI Director James Comey revealed President Donald Trump had asked Comey to stop the FBI’s investigation into fired National Security Adviser Michael Flynn’s ties to Russia.”

The tortured logic is this: Trump’s controversies, including those concerning Comey, are going to distract him and his administration from accomplishing many of the policy goals upon which the stock market was banking. Hence, the market will be disappointed.

Other MSM outlets lined up:

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Trump Didn’t Cause Stock Market Decline

This article appeared online at TheNewAmerican.com on Thursday, May 18, 2017:  

According to nearly every major news outlet, Wednesday’s 372-point decline in the Dow Jones Industrial Average was Trump’s fault. CNN Money said “Trump drama rattles market” while CNBC blamed the selloff “on Trump fears.” NPR said the decline was because “Trump remains embroiled in controversy” with CBC News saying it was due to “uncertainty around Trump.”

Precious few deviated from their mission to blame everything on Trump to look at the real reason behind Wednesday’s modest selloff:

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Pew Research: Gap Between Promises and Assets Widens for State Pensions

This article appeared online at TheNewAmerican.com on Monday, April 24, 2017:

A RETIRED COUPLE FROM CALIFORNIA STOP TO FISH ...

After reviewing the investment results for 230 public pension plans for the last two years, Pew reported last Thursday that, despite strong recent stock market performance, the gap between liabilities (promises) and assets for those plans widened by 17 percent, to $1.4 trillion. Put another way, those plans should have nearly $4 trillion in assets to enable them to keep their promises. The latest data shows them with just over $2.5 trillion instead.

Said Greg Mennis, director of the project,

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Three Stock Market Indicators Spell Trouble for Pension Fund Managers

This article was published by The McAlvany Intelligence Advisor on Monday, April 24, 2017:

Warren Buffett speaking to a group of students...

Warren Buffett

Michael Lombardi is a bear. Canadian-born, Lombardi has been dishing out investment advice for decades. He is getting nervous. And so should pension fund managers trying to make up for lost time.

In his March newsletter, Lombardi looked at the Warren Buffett Indicator:

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Harvard’s New Endowment Manager Shakes Things Up After Dismal Performance

This article appeared online at TheNewAmerican.com on Tuesday, February 28, 2017:

English: Harvard University Harvard Yard Harva...

Harvard University Harvard Yard

The new CEO of Harvard Management Company (HMC), N.P. “Narv” Narvekar, fired half of his staff last December, and in a letter announcing the moves, stated:

Major change is never easy and will require an extended period of time to bear fruit. Transitioning away from practices that have been ingrained in HMC’s culture for decades will no doubt be challenging at times.

 

But we must evolve to be successful, and we must withstand the associated growing pains to achieve our goals.

To each of those approximately 115 staffers who were let go, Narv offered his condolences: “It is exceptionally difficult to see such a large number of our colleagues leave the firm, and we will be very supportive of these individuals in their transition. We are grateful for their committed service to Harvard and wish them the very best in their future endeavors.”

Narvekar is the eighth permanent or interim chief executive in the last decade at the helm of HMC as returns from its $35 billion endowment continue to under-perform not only the stock market in general but its peers at Yale, Columbia, and other Ivy League schools, as well.

The company’s performance was so bad that

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Teamsters’ Pension Plans Seek Massive Cuts to Retirees to Stay Solvent

This article appeared online at TheNewAmerican.com on Monday, January 2, 2017:

Logo of the United States Pension Benefit Guar...

The Central States Teamsters pension plan, covering more than 400,000 participants, expects to receive permission shortly from the Treasury Department to cut benefits to those participants, possibly by as much as 30 percent. At the end of 2014 the plan had $35 billion in liabilities (future promises to participants as they retire) compared to less than $18 billion on hand to pay them.

Right behind Central States was the New York State Teamsters Conference Pension and Retirement Fund, which is also in trouble. Owing nearly $3 billion to its 35,000 plan participants, it has less than $1.3 billion to meet this obligation. Its plan, in its request to the Treasury Department, spelled out just how great the cuts would be:

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Trump Likely To Pick Larry Kudlow as Chief Economic Advisor

This article appeared online at TheNewAmerican.com on Tuesday, December 20, 2016:  

Speaking to the Lansing Regional Chamber of Commerce last week, Trump transition team advisor Stephen Moore let the cat out of the bag: The president-elect would shortly be naming Larry Kudlow (shown) as his chief economic advisor. Moore enthusiastically endorsed the pending nomination: “Who better than Larry? He’s one of the great economists in this country.”

Kudlow may be many things, including enjoying a long-running affiliation with CNBC and host of The Kudlow Report, but he is not an economist.

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“Upside Sensitivity” the New Buzzword as Companies Plan for Trump Economy

This article was published by The McAlvany Intelligence Advisor on Friday, December 9, 2016: 

English: Photo of the AT&T Midtown Center in M...

AT&T Midtown Center in Midtown Atlanta, Georgia.

AT&T’s Chief Executive, Randall Stephenson, spoke to a UBS investment conference on Tuesday, introducing a new phrase that more and more American companies will shortly be adopting: “upside sensitivity” studies. He spoke of how less government oversight and lower taxes would impact his business, expressing optimism that “a more moderate approach to some of those regulations is in the making under a Trump administration.” He then added:

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Investors Remember Black Monday 1987: Dow Loses 22 Percent

This article appeared online at TheNewAmerican.com on Wednesday, October 19, 2016:  

Wednesday is the 29th anniversary of the largest percentage sell-off of stocks in the history of Wall Street, including the sell-off that triggered the Great Depression on October 28, 1929. On that day in 1929, the Dow dropped 13 percent. In 1987, it dropped 22 percent.

Concerns abound about whether a repeat is likely to take place this month.

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The President Speaks and Gun Sales Soar, Again

This article appeared online at TheNewAmerican.com on Wednesday, June 15, 2016:  

Sixteen times since he was first inaugurated, President Obama has chosen to speak against guns following a shooting. Sixteen times he has either directly or indirectly assailed American citizens’ right to keep and bear arms as guaranteed by the Second Amendment. Sixteen times he has demanded that Congress do something about it. Sixteen times the American people have bought more guns.

Monday’s speech was no different. He spoke of the “assault” rifle used by the monster in the Orlando shooting on Sunday morning. He spoke of how “easy” it was for the shooter to obtain his weapons:

It appears that he was able to obtain these weapons legally because he did not have a criminal record….

It was not difficult for him to obtain these kinds of weapons….

We are … so lax in how we make very powerful firearms available to people in this country….

We ignore the problems with easy access to firearms….

We have to make sure that it is not easy for somebody … to be able to obtain weapons….

How easy it is for [self-radicalized individuals] to obtain weapons….

We make it very easy for individuals … to get very powerful weapons very quickly. And that’s a problem.

Translation: Government is determined to make it more difficult than it already is for honest law-abiding citizens to purchase a firearm. Result? Those honest law-abiding citizens head to the gun store.

Target World, a gun store in Cincinnati, is seeing a spike in gun sales, including people who have never bought a gun before. Said Bob Freeland, who brought his girlfriend to the store to buy her first gun, “It’s not at all out of the ordinary for gun sales to spike following mass shootings. Here at Target World people are buying everything from AR-15s, hunting rifles and handguns.” Said his girlfriend, Kimberly, “With the concerns in the United States, it’s just — you don’t feel safe anywhere you go, so I decided to go ahead and purchase a gun.”

The Gun Room, Denver’s oldest firearms dealer, is seeing three to four times the usual volume of sales following Orlando. Background checks are taking hours to complete, not just minutes as they usually do.

Hunters Warehouse in Bellefonte, Pennsylvania, sells firearms to dealers over the Internet and the owner, Tom Engle, told reporters for WeAreCentralPa that, as of early Tuesday morning, his store had sold between 13,000 and 15,000 semi-automatic rifles through his website since the shooting.

And many are new, and different, customers. More are women and older people arming themselves for the first time. And another niche has opened up: the lesbian and gay community. Pink Pistols is a national gun club for the LGBT population that saw its membership more than double over the weekend, with dozens of new chapters being started.

Gun makers are seeing their stocks rise in tandem with the increased demand. Sturm, Ruger & Co. and Smith & Wesson have seen their stock prices soar as well. Smith & Wesson Holding Company (stock symbol: SWHC) has seen its stock rise from $3 a share to over $21 since 2011, a seven-fold increase. One analyst has charted the sixteen times that Obama has railed against guns against SWHC stock. Every time the president speaks against guns, SWHC stock moves higher.

If anti-gunners were really interested in reducing the number of guns owned by Americans they would keep their mouths shut, or else talk about real remedies to thwart terrorist attacks by radical Muslims and others, such as eliminating gun-free zones and encouraging even more Americans to exercise their Second Amendment-guaranteed rights. But, no. The push by totalitarians to remove guns from innocent citizens is so strong that they warn the citizenry of more sanctions against guns, and the more strident the attacks, the more those citizens head to the gun stores to stock up.

Is $40 Oil the New Normal?

This article was published by The McAlvany Intelligence Advisor on Friday, April 22, 2016:  

To the consternation of traders short the market, crude has jumped from $30 a barrel in late January to over $40 currently, with many indicators pointing to still higher prices. Was $30 the bottom? What will be the new ceiling?

Every bull market rises from the ashes of fear, disgust and despair. Traders and investors reasonably expected oil to bottom at well below $30, perhaps in the 20s, with some heavyweights, including Goldman Sachs, suggesting even lower prices. Some took short positions, certain that their calculus was correct: OPEC had maxxed out, American production seemed impervious to precipitous declines in rig counts, China’s economy was faltering and signs of recession were continuing to expose themselves around the globe, including the U.S. What could go wrong?

A little energy company, Callon Petroleum, showed exactly what could go wrong. Three times in the last six months the company has sold new shares to raise equity, and three times the company’s stock has risen. Logic and experience would suggest that dilution of shares would reduce their price. But with Callon, shares jumped from $4.21 in the middle of January to nearly $10 currently.

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The Fed Joins Other Voices Predicting a U.S. Recession

This article was published by The McAlvany Intelligence Advisor on March 22, 2016:  

Harry Dent, the author of The Great Crash Ahead, says that the current rebound in stocks is a head-fake of the first order, that the end of the seven-year bull market in stocks occurred last May. He said just look at a three-year chart of the SPX (Standard and Poor’s 500 Index) and see the rounded top formation.

Instead, talking heads all across the media are calling the recent rise following the precipitous decline that began the first day of trading of 2016 just a speed bump, a hiccup as the seven-year-long bull market in stocks is getting its second wind.

Markit Ltd., the monster financial services and advisory company located in London, issued its first warning in late February with its flash that its services purchasing managers’ index

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Markit Ltd. Says U.S. Economy Is Faltering

This article appeared online at TheNewAmerican.com on Tuesday, March 22, 2016:  

Markit Ltd., the London-based global financial information behemoth, issued an early warning about signs of the coming recession in late February when it published its services purchasing managers’ index. It went negative for the first time in more than two years. At the time, Chris Williamson, Markit’s chief economist, said:

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Wall Street Pouring Billions Into Oil Companies

This article appeared online at TheNewAmerican.com on Tuesday, March 8, 2016:  

English: Logo of the Hess Corporation

Wall Street investors have started pouring billions into the energy sector, persuaded that prices not only of crude oil but stocks of energy companies have hit bottom. They just might be premature.

Pioneer Natural Resources has sold $1.6 billion in new stock since the first of the year, while Devon Energy has sold $1.5 billion. Hess Corporation and Marathon Oil have each enjoyed an influx of

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Stock Market is Predicting a Republican President

Mark Hulbert’s study of correlations between the stock market and presidential elections and Jeff Hirsch’s Stock Trader’s Almanac are making a powerful case that, come November, it will be a Republican occupying the White House for the next four years.

The Hulbert Financial Digest is so highly regarded that

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Public Pension Plans Cut Rate of Return Targets; Still Not Enough

This article appeared online at TheNewAmerican.com on Monday, September 7, 2015:  

Twenty million pension plan beneficiaries have just been warned: You won’t be getting what you have been promised when you retire. Part of the reason is that pension managers have been far too optimistic in estimating what they are able to earn on your money. And part of the reason is that they continue to remain so.

In its analysis of 126 public pension plans, the National Association of State Retirement Administrators (NASRA) noted that more than two-thirds of them have reduced their estimates, however slightly, since 2008, while 39 of them are still stuck

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Stocks to Fall Further, Say Market Bears

This article was published by The McAlvany Intelligence Advisor on Wednesday, August 26, 2015:  

Marc Faber, the bearish financial commentator from Thailand whom financial talking heads in the media love to hate, really doesn’t care what people think. He’s old enough to know his own mind (he’s 69), and he’s been right often enough that his opinions carry plenty of weight. He’s also a curmudgeon. In his June 2008 newsletter, following the arrival of $600 “stimulus” checks in everyone’s mailbox, Faber wrote this, belittling the idea that much if any of that free money would help stimulate the US’s moribund economy:

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.