Mark I am shocked at the price of that house. What would just that lot be worth without the house? It looks like Mark Twain's mansion. Until houses are priced over building cost there is no housing industry. In addition costs have gone up to build. I could not believe metal in addition to wire costs on my last side job.
My vote for playing the rebound in housing is the lumber companies linked to home building.
You get the double benefit of being involved in lumber (out of favour) and housing (also out of favour). If we see a turnaround in housing, should be really big upside. This is a risky trade, no doubt, more so than buying banks, and a small position for me, but I think it will be a big winner.
The one I have invested in is Eacom Timber (ETR in Toronto, or ETRFF on the pink sheets).
Here are my notes on this:
Lumber company in Eastern Canada. Purchased sawmill assets and rights to cut timber from Domtar. Got a very good deal on this as purchased for $130 million in 2010 where Domtar had an agreement to sell for $285 million in 2007. President has deep industry background.
Prices for lumber are potentially firming due to supply issues such as the BC Pine Beetle and fires in Scandanavia.
Global demand is growing due to increased wood usage in countries like China and Japan (after the earthquake) as wood is less prone to earthquakes.
US Housing is still an issue as is the high Canadian dollar, but these should resolve over time.
Have to believe that there has been underinvestment in forestry for last 3 years and plant shutdowns which will reduce competition.
Thanks for that BB but is there one down here that looks good too? I have only looked at Plum Creek (PCL) which is huffing and puffing up a shallow grade.
Moving stop to 1310.5 on ES. That 1303 level is showing some strong support but on each test of it I believe it's getting weaker. In addition to this the bounces are getting weaker and weaker. If it breaks and the 1295 level doesn't hold then I still think 1,230 is in play. The best thing to do for anyone looking longer term is to just wait for this period to pass...if we break up above 1,340 then it's probably best to go long. If we break below 1,290 then its probably best to wait for lower prices.
Illini - The Euro is screwed man. There's just no way it can stay at its current levels in my opinion, given all of the issues it has. The size of the problems in Italy (they have to refinance like $200 Billion of their debt in the next 4 months or so I believe) and Spain, in addition to Portugal etc is going to force them to trash the currency to save itself. Given the recent history of bailouts there's no reason why they wouldn't do this. The US has already gone through heavy trashing..it's the Euro's turn now.
Euro stress tests - Ha, sounds like the same conclusion as the US bank stress tests. We knew those were BS too, yet the banks rallied. Rinse and repeat? That little stunt allowed me to recoup some paper losses left over from the crash.
Mark - I thought fewer listen to Fox/Murdoch recently. A restaurant I go to has it on constantly. Maybe it's because the family owned place, only 3 years old, traces ethnically to Albania/Macedonia. They don't know any better? Good grub though.
Illini- Probably!! But that was just a link. The Fitch report is real.
CP- I actually think this might be positive for CADC given Fitch's comments about the 'big four'. I'll leave off the obvious chance to play off wood again.
"To repeat: Monetization will have the effect of raising the prices of ‘hard’ assets, which through the imposition of various taxes on such holdings and on buy-sell transactions, will raise fiscal revenues but also lead to price inflation."
That's from WIR. But what about soft/intellectual assets? MITK, MSFT, CSCO GOOG, NFLX anyone. Even WMT pays a div and they keep buying back shares.
illini - If central banks are buying government debt with freshly printed funny money, I would think everything would go up accordingly.
Of course if government is desperate enough to buy their own debt, then they must also be planning to cut back on spending as well, I would think. So something leaching off government largess would tend to suffer unless they find new customers?
will re-enter ES short at 1307 if it comes for a scalp. longer term if you look at the prices from the may high i see a series of lower highs on the SPY chart, the exception being what might have been a false throwback high from 2 weeks ago.
the flies in the ointment are IYT and copper...two big ole flies.
"What gives?" Systemic changes in the global economy; the world lost two of their best customers in the US and Europe when same hit the windscreen. Instead of quickly taking action, the political elite stood idly by and argued while the list of action options shrank and opportunities flew out the window.
Mark > Yeah that's what I'm thinking (too obvious)...everyone expecting a bounce here. I'm keeping my ES short that I re-entered into at 1307 last night...stop out will be 1305
those vix call buyers from thursday of last week were looking for a 4.6 move from the 21 level...wonder if they know something we dont...they expire tomorrow i believe.
Last Monday proved to be a 90% Downside Day whereby 90% of the total volume traded came on the downside, while 90% of total points were likewise negative. Typically, 90% Downside Days are followed by rally attempts lasting five to seven sessions. Obviously, that wasn’t the case last week and it concerns me. Also concerning is the fact the often-mentioned 1320 level was violated, and despite the three separate rally attempts that were staged to recapture 1320, it was all of no avail. This brings us to this week, where 2Q11 earnings reports will be Wall Street’s focus. Worth noting is that of the 31 companies that reported last week, 74% of them beat estimates. Unfortunately, 15 of those “beating companies” rallied, while 17 declined. Still, if the number of earnings “beats” continues, it should provide some kind of downside cushion for equities, provided the debt ceiling “thing” is resolved. Also of note is that there are a host of technical “timing points” due this week. Accordingly, while we are disappointed, we have not given up on our bullish “call,” at least not yet. That could change, however, if the SPX breaks back below 1295.
GMO - Local paper covers water rights story in more detail, Eureka commission likely to discuss in July 20th meeting:
"The state engineer did a very good job of answering all the protestants' issues, and we will continue to work with the county to develop a monitoring, management and mitigation plan. The state engineer requires us to submit the "3M" (monitoring) plan before we can pump any water," he said.
Eureka County Commissioner Jim Ithurralde said Friday he hadn't had a chance to look at the ruling, but "we will be discussing it on the 20th."
The next commission meeting is July 20, and General Moly is a standard item on the agenda that allows for action, should the county decide to appeal the latest ruling."
Gold is now moving into the fervor segment of it's long term trend....next up is mania. We might just reach that area after the upcoming Euro Bonds proposal that is pretty much a guarantee. GDXJ is most poised to take advantage of this...
2nd > It's truly amazing what is thrown at this market and how well it has sustained it....the proverbial wall of worry indeed.
ReplyDeleteMark I am shocked at the price of that house. What would just that lot be worth without the house? It looks like Mark Twain's mansion. Until houses are priced over building cost there is no housing industry. In addition costs have gone up to build. I could not believe metal in addition to wire costs on my last side job.
ReplyDeletehttp://money.msn.com/currency/broke-not-if-you-can-print-money-fleckenstein.aspx
ReplyDeleteCan you say short/buy puts on FXE? There are really only 2 outcomes:
(1) Allow peripheral countries to default and the crisis gets worst so you just succumb and print Euros (through Euro Bonds)
(2) Prevent peripheral countries from defaulting and print Euros (through Euro Bonds).
Either way the Euro should fall.
wow, what a great game, wish USA women had been able to hold on but still what a super effort!!!
ReplyDeleteI tuned in just as the US got that cool header for a goal to go ahead 2-1. That was a good point to begin the exciting end game.
ReplyDeleteTF - And either way the German exporters are happy. But how about those officials in US that want to drive the $USD down?
ReplyDeleteI shorted ES at $1313.25..stop at 1316...target is 1303.
ReplyDeletethe game was indeed a good one. i really hate that penalty kick thing....
TOF - Do you have a crystal ball into the news?
ReplyDeletehttp://www.bloomberg.com/news/2011-07-17/euro-falls-before-summit-as-debt-concern-mounts.html
I think failure to raise debt limit isn't priced in, but we'll see about that one.
ReplyDeleteGold and silver doing a moonshot here, is it possible both the euro and $USD can move sown simultaneously?
If so, I may have sold SVM too soon, I was anticipating a pullback...
tof - great trade, you are half way home already!
ReplyDeleteMy vote for playing the rebound in housing is the lumber companies linked to home building.
ReplyDeleteYou get the double benefit of being involved in lumber (out of favour) and housing (also out of favour). If we see a turnaround in housing, should be really big upside. This is a risky trade, no doubt, more so than buying banks, and a small position for me, but I think it will be a big winner.
The one I have invested in is Eacom Timber (ETR in Toronto, or ETRFF on the pink sheets).
Here are my notes on this:
Lumber company in Eastern Canada. Purchased sawmill assets and rights to cut timber from Domtar. Got a very good deal on this as purchased for $130 million in 2010 where Domtar had an agreement to sell for $285 million in 2007. President has deep industry background.
Prices for lumber are potentially firming due to supply issues such as the BC Pine Beetle and fires in Scandanavia.
Global demand is growing due to increased wood usage in countries like China and Japan (after the earthquake) as wood is less prone to
earthquakes.
US Housing is still an issue as is the high Canadian dollar, but these should resolve over time.
Have to believe that there has been underinvestment in forestry for last 3 years and plant shutdowns which will reduce competition.
Also, a good writeup at:
http://www.stockhouse.com/Bullboards/MessageDetailThread.aspx?&p=0&m=29724264&r=0&s=ETR&t=LIST&pd=1
Thanks for that BB but is there one down here that looks good too? I have only looked at Plum Creek (PCL) which is huffing and puffing up a shallow grade.
ReplyDeleteDJIA futes -83 right now...
ReplyDeletetof- Nice entry for the ES short.
ReplyDeleteES 1305
ReplyDeleteInteresting read.
ReplyDeletehttp://yrah53.wordpress.com/2011/07/17/ayso/
Moving stop to 1310.5 on ES. That 1303 level is showing some strong support but on each test of it I believe it's getting weaker. In addition to this the bounces are getting weaker and weaker. If it breaks and the 1295 level doesn't hold then I still think 1,230 is in play. The best thing to do for anyone looking longer term is to just wait for this period to pass...if we break up above 1,340 then it's probably best to go long. If we break below 1,290 then its probably best to wait for lower prices.
ReplyDeleteIllini - The Euro is screwed man. There's just no way it can stay at its current levels in my opinion, given all of the issues it has. The size of the problems in Italy (they have to refinance like $200 Billion of their debt in the next 4 months or so I believe) and Spain, in addition to Portugal etc is going to force them to trash the currency to save itself. Given the recent history of bailouts there's no reason why they wouldn't do this. The US has already gone through heavy trashing..it's the Euro's turn now.
Euro stress tests - Ha, sounds like the same conclusion as the US bank stress tests. We knew those were BS too, yet the banks rallied. Rinse and repeat? That little stunt allowed me to recoup some paper losses left over from the crash.
ReplyDeleteI've been considerably more careful since.
CUT - Is a timber ETF, and it's sitting on the lower trend line right now.
ReplyDeleteWOOD - Is a global timber ETF.
ReplyDeleteI thought WOOD was an ETF for...
ReplyDeleteGet WOOD! Call your physician if you're long for more than four hours.
ReplyDeleteFitch gang bangs Chinese stocks... (just sticking with the 'wood' theme)...
ReplyDeletehttp://www.foxbusiness.com/industries/2011/07/17/fitch-cites-china-accounting-standards-as-risks-in-review/
Can anyone find the list of the 35 they hate?
TOF cover your short and go out to dinner. How many times have we seen this on Sunday night? 5, 7 million times?
ReplyDeleteMark - I thought fewer listen to Fox/Murdoch recently. A restaurant I go to has it on constantly. Maybe it's because the family owned place, only 3 years old, traces ethnically to Albania/Macedonia. They don't know any better? Good grub though.
ReplyDeleteFitch/China - Apparently the 35 in question are Shanghai listings, that's not too bad considering there must be thousands?
ReplyDeleteIllini- Probably!! But that was just a link. The Fitch report is real.
ReplyDeleteCP- I actually think this might be positive for CADC given Fitch's comments about the 'big four'. I'll leave off the obvious chance to play off wood again.
So why is cooper up about 1% now in London and Asia?
ReplyDeleteThey are doing a piece on Bloom TV right now about the Fitch article.
ReplyDelete"To repeat: Monetization will have the effect of raising the prices of ‘hard’ assets, which through the imposition of various taxes on such holdings and on buy-sell transactions, will raise fiscal revenues but also lead to price inflation."
ReplyDeleteThat's from WIR. But what about soft/intellectual assets? MITK, MSFT, CSCO GOOG, NFLX anyone. Even WMT pays a div and they keep buying back shares.
illini - If central banks are buying government debt with freshly printed funny money, I would think everything would go up accordingly.
ReplyDeleteOf course if government is desperate enough to buy their own debt, then they must also be planning to cut back on spending as well, I would think. So something leaching off government largess would tend to suffer unless they find new customers?
Mark - I'm not getting the connection with CADC...
ReplyDeletewill re-enter ES short at 1307 if it comes for a scalp. longer term if you look at the prices from the may high i see a series of lower highs on the SPY chart, the exception being what might have been a false throwback high from 2 weeks ago.
ReplyDeletethe flies in the ointment are IYT and copper...two big ole flies.
PAL - Island reversal complete?
ReplyDeleteJeez the Hang Seng, Taiwan, and Aussie markets don't look so healthy on daily charts. What gives?
ReplyDeleteSWC - Might be an entry here...
ReplyDelete"What gives?" Systemic changes in the global economy; the world lost two of their best customers in the US and Europe when same hit the windscreen. Instead of quickly taking action, the political elite stood idly by and argued while the list of action options shrank and opportunities flew out the window.
ReplyDeleteGMO - Maybe it's no big deal after all, not much reaction it seems...
ReplyDeletePM's - When does the orchestrated smack down come?
ReplyDeleteI was wondering what was holding BAC up at the open. $50B more. Wow.
ReplyDelete1,295 is in play...this is why:
ReplyDeletehttp://www.cnbc.com/id/38451750
bounces off support in past week: +32, +20, +12, +6 ES pts
ReplyDeletemarket getting weaker...make sure 1,295 holds before being confident getting long is what I'm telling myself...
TOF- 1295 is the level I'm looking at also. Perhaps to obvious?
ReplyDeleteSSO @ 51.51. 400.
ReplyDeleteBAC- New 52 week low @ $9.75.
ReplyDeleteThat low didn't last long.
ReplyDeleteCP- $3 in play!!
ReplyDeleteBAC - Bend over, grab ankles...
ReplyDeleteThese banks are just smokin' hot again today, aren't they? Damn, PM's are in the shitter, too.
ReplyDeleteMark > Yeah that's what I'm thinking (too obvious)...everyone expecting a bounce here. I'm keeping my ES short that I re-entered into at 1307 last night...stop out will be 1305
ReplyDeletethose vix call buyers from thursday of last week were looking for a 4.6 move from the 21 level...wonder if they know something we dont...they expire tomorrow i believe.
ReplyDelete6E holding firm at 1.40 will keep the ES propped up, we lose 1.40 then I can see the ES down at 82
ReplyDeleteDBL bottom for F?
ReplyDeleteBAC to $3, gotta retest that low again.
ReplyDeleteFrom Jeffrey Saut:
ReplyDeleteLast Monday proved to be a 90% Downside Day whereby 90% of the total volume traded came on the downside, while 90% of total points were likewise negative. Typically, 90% Downside Days are followed by rally attempts lasting five to seven sessions. Obviously, that wasn’t the case last week and it concerns me. Also concerning is the fact the often-mentioned 1320 level was violated, and despite the three separate rally attempts that were staged to recapture 1320, it was all of no avail. This brings us to this week, where 2Q11 earnings reports will be Wall Street’s focus. Worth noting is that of the 31 companies that reported last week, 74% of them beat estimates. Unfortunately, 15 of those “beating companies” rallied, while 17 declined. Still, if the number of earnings “beats” continues, it should provide some kind of downside cushion for equities, provided the debt ceiling “thing” is resolved. Also of note is that there are a host of technical “timing points” due this week. Accordingly, while we are disappointed, we have not given up on our bullish “call,” at least not yet. That could change, however, if the SPX breaks back below 1295.
F - Could be a double bottom, or we could be yawning at the employment plans being floated in DC...
ReplyDeleteThat Immelt guy needs to get to work.
EWI confirming downside...
ReplyDeleteTBT still green.
ReplyDeleteTVIX - Ka-boom, sha-ka-la-ka...
ReplyDeleteGold - Next target is $1628, there should be a pullback and consolidation period if/when it gets there. That's where a short makes sense to me.
are financials getting close to capitulation? look at MS for example.
ReplyDeleteGL guys.
ReplyDelete"TBT still green." Timmy might be conducting another auction this week, does anyone besides Bernanke show up to those anymore?
ReplyDeletetof - not sure but if MS can't hold $20.17 on the daily it'll be a teenager again real soon.
ReplyDeleteI think the most critical number for the ES is 86, now that level really must hold.
ReplyDeleteat the close of europe cash the 6e is safely above 40...it was too close for comfort today!
ReplyDeleteCopper is NOT confirming downside....
ReplyDeleteRBY - Go RBY, Go!
ReplyDelete"Copper is NOT confirming downside.... "
ReplyDeleteI'm still waiting for that commodity crash, myself.
SVM - Frickin' monster, WTF did I sell?
ReplyDeleteSPX 1298. Excellent call by tof.
ReplyDeleteJust closed my ES shorts...
ReplyDeleteLooking to short if we get a bounce on debt ceiling raise and AAPL earnings.
ReplyDeleteIn my understanding, metals usually bottom before the market, and so perhaps metals have bottomed?
ReplyDeletePMI - Down, SRS up... Trouble persists in housing?
ReplyDeleteBought a few GDXJ Sept $38 calls at $3 and bought GDXJ stock
ReplyDeleteAdding a little more to GDXJ at $38.83
ReplyDeleteIYT getting awfully close to uptrend line from March 2009
ReplyDeleteGMO - Local paper covers water rights story in more detail, Eureka commission likely to discuss in July 20th meeting:
ReplyDelete"The state engineer did a very good job of answering all the protestants' issues, and we will continue to work with the county to develop a monitoring, management and mitigation plan. The state engineer requires us to submit the "3M" (monitoring) plan before we can pump any water," he said.
Eureka County Commissioner Jim Ithurralde said Friday he hadn't had a chance to look at the ruling, but "we will be discussing it on the 20th."
The next commission meeting is July 20, and General Moly is a standard item on the agenda that allows for action, should the county decide to appeal the latest ruling."
http://elkodaily.com/mining/article_de380958-af32-11e0-a3fe-001cc4c03286.html
Gold is now moving into the fervor segment of it's long term trend....next up is mania. We might just reach that area after the upcoming Euro Bonds proposal that is pretty much a guarantee. GDXJ is most poised to take advantage of this...
ReplyDelete