Empiric Student Property Share Discussion Threads

[ian56] 25/9/2006 21:19

The Fed only jammed $8bn, expecting (knowing) bad news from the housing report.

The $3bn added yasterday expired.

Regards,
Ian

[briarberry] 25/9/2006 21:11

is this just a strange coincidence ?


The Fed jammed a whopping $11 billion into the liquidity pool on Monday by adding that amount in overnight repos against no expirations. The 5 day net reversed from a drain of $12 billion, to an add of $6.25 billion. It's not clear why the Fed would have taken such drastic action. Perhaps the Fed was spooked by the Realtors' news that existing home sale prices were down year over year. Gee. Surprise surprise. Regardless, the result was a Fed Market Liquidity Index signal similar to the one in October 2005

[briarberry] 24/9/2006 22:04

US mortgage rates, still near the top of the range for recent years...

[ian56] 24/9/2006 17:43

Very nice chart in post 465.

Regards,
Ian

[briarberry] 23/9/2006 21:37

Production declines in spite of high oil prices
by Roger Blanchard

Published on 20 Sep 2006 by Energy Bulletin.


While the price of West Texas Intermediate oil was above $70/barrel for much of the first half of 2006 and the average price of all oil grades was about $27/barrel higher than the average during 2004, global liquid hydrocarbons production declined more than 100,000 barrels/day (b/d) compared to the first half of 2005, according to U.S. Department of Energy/Energy Information Administration (US DOE/EIA) data.

For comparison purposes, global liquid hydrocarbons production increased 3.43 mb/d in 2004 and 1.47 mb/d in 2005.

Much of the global liquid hydrocarbons production increase from 2003 to 2005 was due to OPEC, which increased production 3.66 mb/d as excess capacity was brought on-line. Now there is little or no excess capacity to bring on-line.

Many new oil projects have come on-line globally in the last few years and many will come on-line in the next 5 years. Unfortunately, many of the world's large oil fields are declining rapidly and the price of oil has virtually no impact on the rate of decline for those declining fields.

Increases in production from new projects are largely being negated by production declines from old fields.

As an example of the rapid decline of giant and supergiant oilfields, the Prudhoe Bay field produced nearly 1.6 mb/d in 1988. Since 1988, production from the field has decline at about 10%/year. Prior to the partial shutdown of the Prudhoe Bay field this summer, it was producing about 0.33 mb/d, excluding satellite fields.

Even though there have been numerous fields developed on the North Slope of Alaska since 1988, Alaska's oil production has declined from 2.02 mb/d in 1988 to ~0.8 mb/d this year (before the partial shutdown of the Prudhoe Bay field).

Many other oil producing regions are also seeing rapidly declining production. Last year, North Sea oil production declined about 490,000 b/d. In the first 6 months of this year, North Sea production was down another 420,000 b/d. North Sea oil production has declined from 6.3 mb/d in 2001 to ~4.5 mb/d this year.

About two-thirds of Mexico's oil production, ~2 mb/d, comes from a complex of fields called the Cantarell complex. Production from the Cantarell complex has started to decline with an expected decline rate in coming years of 10%/year or more. For the April/May/June period, Mexican oil production was down about 100,000 b/d in 2006 compared to the same period in 2005.

Even the megagiant fields in the Middle East, Ghawar (Saudi Arabia) and Burgan (Kuwait) are experiencing serious production problems which limit the ability of Saudi Arabia and Kuwait to increase production. Optimistic economists fail to appreciate the impact of declining production from large old fields when projecting future global production.




Nymex futures for 2008 are still over $70

[briarberry] 23/9/2006 19:51

Since 2001, the health-care industry has added 1.7 million jobs.

Businessweek - Sept 25, 2006

Perhaps most surprising, information technology, the great electronic promise of the 1990s, has turned into one of the biggest job-growth disappointments of all time. Despite the splashy success of companies such as Google (GOOG ) and Yahoo! (YHOO ), businesses at the core of the information economy -- software, semiconductors, telecom, and the whole gamut of Web companies -- have lost more than 1.1 million jobs in the past five years. Those businesses employ fewer Americans today than they did in 1998, when the Internet frenzy kicked into high gear.

Ballooning government spending on health care is a major reason why Washington is running an enormous budget deficit, since federal outlays for health care totaled more than $600 billion in 2005, or roughly one quarter of the whole federal budget.

[briarberry] 23/9/2006 18:13

The chart below shows mutual fund cash levels, after adjusting for the prevailing level of short-term interest rates

Jason Goepfert
www.sentimenTrader.com

[ian56] 22/9/2006 07:31

Rate Cycle

Have we done the last US rate rise, or is there one more to go?



Regards,
Ian

[ian56] 22/9/2006 07:30

Business Cycle



Regards,
Ian

[briarberry] 21/9/2006 21:58

Inflation... many pundits describe inflation as a lagging indicator, so it could be high for a while...


Will An Oil Price Fall Push Inflation Down?
By Frank Shostak, Posted on 9/21/2006









Inflation red alert points to rate rise
By Edmund Conway, Economics Editor,(Filed: 21/09/2006)

In another worrying sign of rising prices, the Bank said its measure of how much money was circulating around the economy had hit a 16-year high. Broad money levels rose by 13.7pc in the year to August, while so-called M4 lending increased by 14.7pc in the same period. The Bank warned previously that growth in money levels could spark higher inflation.

MPC member Kate Barker warned this week that the pace of house price inflation had taken the Bank by surprise, and figures released by the Council of Mortgage Lenders yesterday underlined the strength of the market. The CML said gross mortgage lending reached £32.7bn in August. It was the 10th monthly record in the past year, up from £30bn in July.

[cymbelline] 21/9/2006 17:58

:-))

Think they might have done just that, spx is flopping very nicely atm anyway.

[briarberry] 21/9/2006 17:23

SPX... the biggest -ve divergence is the financials, they account for a large portion of US company earnings, and their stock prices are showing falling relative strength. Although this could go on for a while.





obviously, if the financials flop, it's a sign that Goldilocks is about to do a runner :)

[cymbelline] 21/9/2006 16:50

Yes, that's where I had it, the move up from 02 is 76.4% of the previous fall at iro 1365 and 78.6% at 1385-ish, but with the upper wkly bband coinciding with the top of Ian's channel I had to have a go at that. My stop's just above yesterday's high and if it goes that's my next target.

[briarberry] 21/9/2006 16:13

SPX - target could be as high as the 1370s, drawing the upper trend line, starting from the high: Jan05 and including the throw over: May06

[briarberry] 21/9/2006 15:37

hello, nice to hear from you all :)

I've been looking at another site, back now :)

[cymbelline] 21/9/2006 15:11

Good thread, Briarberry! I'll contribute if/when I find anything sensible to post but will lurk in the meantime. Thanks.

I'm short spx too now that Ian's pointed out that other channel. It's just coming off the upper bollinger on the weekly now too.

[ian56] 21/9/2006 14:27

Now draw your upper line using the Jan 05 high, instead of May 06.
There is an overthrow in the period leading up to May.

Now draw a similar set of lines for the July 06 bottom to now.

Regards,
Ian

[briarberry] 21/9/2006 12:42

SPX - already opened a small short on SPX going to start adding now as SPX goes higher

they might push it up to (edit did read: 1250s oops) 1350s, you never know but I doubt they'll make it there before a big decline, so going to risk a bit of money

World markets showing -ve divergences with SPX



not even NYSE is keeping up with SPX, nor is FTSE100

my opinion is that the SPX is only being pushed up by short closing

[briarberry] 11/9/2006 23:06

less money ? seems hard to believe :)


John Mauldin - September 8, 2006



A Warning for Politicians

Finally, Fisher referred to the national debt and growing social security and Medicare obligations. It is not the Fed's problem, and he flatly asserted they will not monetize the debt in the future. This is a political problem. Congress is going to have to get its own house in order. The Fed will not bring back inflation to accommodate a profligate Congress. He did not have kind words for the lack of spending control in Washington.
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The Japanese Current Account Balance Is Again Shrinking

The next chart comes courtesy of Bill King. Readers will remember when I directly connected the contraction of the Japanese Current Account Balance last spring and the resulting fall in stock markets all over the world, as global liquidity dried up. In fact, the Japanese central bank has inflated their current account and then rapidly dropped it three times in the last 20 years, with each inflation giving us a bubble and each drop a crisis. You can see from the chart that the Japanese stopped the slide in June, and the stock markets of the world began to recover.

Since that time they have slowly reversed that increase, and over the last two weeks we have seen another drop. This is worrisome. The Japanese are a big part of the global money supply, and they are drying up liquidity at the same time that the Fed is slowing the rise in our money supply.
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[briarberry] 07/9/2006 20:15

US$... if this is true, it's very very sad, I'm glad to see Blair going but will things be any better under Brown ? :(


Likewise many have recognized that US empire can only exist as long as other states are ready to deliver their goods against worthless green paper. And that only works as long as the dollar is the unchallenged world's reserve currency which depends a lot on the currency in which the most important commodity (oil) is traded. In November 2000 Saddam Hussein decided to sell his oil in euros instead of dollars, "accidentally" the euro reached its all-time low almost within days and the dollar crashed against the euro by 14% within weeks (which is huge in the low-volatile currency markets). US congressman Ron Paul explains: In November 2000 Saddam Hussein demanded Euros for his oil. His arrogance was a threat to the dollar; his lack of any military might was never a threat. At the first cabinet meeting with the new administration in 2001, as reported by Treasury Secretary Paul O'Neill, the major topic was how we would get rid of Saddam Hussein-- though there was no evidence whatsoever he posed a threat to us. [...] In 2001, Venezuela's ambassador to Russia spoke of Venezuela switching to the Euro for all their oil sales. Within a year there was a coup attempt against Chavez, reportedly with assistance from our CIA. What was unthinkable for a long time has suddenly become reality: a couple of key countries want to start selling oil in other currencies than USD, this peripety is quite dramatic because it starts the end of the US empire.

[briarberry] 07/9/2006 17:10

Reminiscences of a Stock Operator

[briarberry] 07/9/2006 14:03

Richard Ney on the Role of the Specialist

by Michael Templain, a fellow Bender

It was with these words that Richard Ney began his first of three books on the nature of the New York Stock Exchange. Ney wrote over 20 years ago, a time when a 750 Dow was high and today's volumes were beyond imagining. Some of his material is dated, and must be read in the light in which it was written. But the main premise of his books is still true: that the specialist exists not to ensure the free and orderly trade of stock in a particular company, but to fatten upon the innocence and ignorance of the small investor.

The New York Stock Exchange is not an auction market (2Ney, 86), though many investors still hold onto that image. It is a rigged market. Volume is an effect of price. Prices are controlled absolutely by the specialists, the 'market makers' in individual stocks. It was this discovery that led Mr. Ney to eventually give us small investors a priceless gift: enlightenment.

[briarberry] 07/9/2006 12:26

Fed watching, not sure if any of this is useful but probably worth a look if you're interested in Fed theories...

[briarberry] 07/9/2006 11:23

3 links, if anyone is interested in yield curves


UK's curve is -ve





US is fairly flat, as far as I can see (quick look) it's not been flat since 2000






Economic Whiplash - By John Mauldin - August 11, 2006

"the New York Fed demonstrated that an inverted yield curve was the best tool we had for predicting a recession."

[briarberry] 03/9/2006 12:14

Nightmare Mortgages

By Mara Der Hovanesian
Fri Sep 1, 4:00 PM ET

For cash-strapped homeowners, it was a pitch they couldn't refuse: Refinance your mortgage at a bargain rate and cut your payments in half. New home buyers, stretching to afford something in a super-heated market, didn't even need to produce documentation, much less a downpayment.

Those who took the bait are in for a nasty surprise. While many Americans have started to worry about falling home prices, borrowers who jumped into so-called option ARM loans have another, more urgent problem: payments that are about to skyrocket.
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Risks or not, the accounting treatment is boosting reported profits sharply. At Santa Monica (Calif.)-based FirstFed Financial Corp. (NYSE:FED - News), "deferred interest" -- what an outsider might call phantom income -- made up 67% of second-quarter pretax profits. FirstFed did not respond to requests for comment. At Oakland (Calif.)-based Golden West Financial Corp. (NYSE:GDW - News), which has been selling option ARMs for two decades, deferred interest made up about 59.6% of the bank's earnings in the first half of 2006. "It's not the loan that's the problem," says Herbert M. Sandler, CEO of World Savings Bank, parent of Golden West. "The problem is with the quality of the underwriting."

In the middle of one of the hottest U.S. markets, Coral Gables (Fla.)-based BankUnited Financial Corp. (NASDAQ:BKUNA - News) posted a $14.8 million loss for the quarter ended June, 2005. Yet it reported record profits of $23.8 million for the quarter ended in June of this year -- $20.9 million of which was earned in deferred interest. Some 92% of its new loans were option ARMs. Humberto L. Lopez, chief financial officer, insists the bank underwrites carefully. "The option ARMs have gotten a bit of a raised eyebrow because we generate and book noncash earnings. But...it's our money, and we do feel comfortable we'll get it back."