Tag: Stock Markets

Is Saudi Arabia Broke?

I ask this question because of a report that I read last week……I seems that the oil arm of the Saudi royal family, ARAMCO, is about to offer an IPO on the stock exchange……

Saudi Arabia began an initial public offering Sunday of a sliver of oil giant Saudi Aramco after years of delay, hoping international and local investors will pay billions for a stake in the kingdom’s crown jewels, reports the AP. An approval by Saudi Arabia’s Capital Market Authority served as the starting gun for an IPO promised by Crown Prince Mohammed bin Salman since 2016. But unlike traditional IPOs, Saudi Aramco offered no hoped-for price range nor idea how much of the firm would be offered on Riyadh’s Tadawul stock exchange. Analysts say the kingdom likely hopes local investors will push share prices toward a desired $2 trillion valuation and buoy that price ahead of any further listing abroad. Saudi Aramco made a point in its filings to highlight its profitability and low costs through data once held as a state secret by the royal family, euphemistically referred to as its “current shareholder.”

However, economic worries, the trade war between China and the US, and increased US crude oil production have depressed energy prices. A Sept. 14 attack on Saudi Aramco spooked some investors, with one ratings firm already downgrading it. It’s hard to overstate Saudi Aramco’s power: It produces over 10 million barrels of crude oil a day, some 10% of global demand. The firm’s net income in 2018 was $111.1 billion, far beyond the combined net income of oil giants BP, Chevron, Exxon Mobil, Royal Dutch Shell, and Total SA. Al-Arabiya reported last week that pricing for the stock will begin Nov. 17. A final price will be set Dec. 4, with shares beginning to be traded on the Tadawul on Dec. 11. Analysts say a $2 trillion valuation—Apple and Microsoft are $1 trillion each—may be a stretch. By announcing the start of the IPO on Sunday, Prince Mohammed may have been convinced to take a lower valuation in order to get the IPO moving.

Why would the Royals who own the oil in Saudi want to submit to the regulations of a stock exchange?

Then maybe Gen. Petraeus has the answer……

Gen. David Petraeus, the retired four-star Army general and former head of the CIA, told CNBC on Thursday that Saudi Arabia is “gradually running out of money.”

Petraeus said the Saudi’s need their initial public offering (IPO) of the state-run oil company Aramco, to be successful. In December, the Saudis plan on releasing some shares of Aramco to the public in an effort to attract outside investors.

The IPO is part of Crown Prince Mohammad bin Salman’s “Vision 2030,” his effort to diversify Saudi Arabia’s economy and reduce its dependence on oil exports. Petraeus said Saudi Arabia’s budget deficits can be “anywhere from $40 to $60 billion” each year, depending on the price of oil.

When asked about other people’s criticisms of the crown prince, Petraeus said it was in the entire world’s interest to see “Saudi Arabia succeed” and to also see it “moderate” some of its practices.

(antiwar.com)

Petraeus is currently the chair of the KKR Global Institute, a branch of the American global investment firm KKR. Petraeus said there is no KKR investment into Saudi Arabia he is aware of yet, and that the Saudis need to “regain the confidence of all the investors of the world.” But Petraeus did say KKR has invested elsewhere in the region and put $2 billion into the United Arab Emirates’ Abu Dhabi National Oil Company.

Why is Saudi running out of cash?

Why would the Royals allow someone to gain control over their production?

I Read, I Wrote, You Know

“Lego Ergo Scribo”

Closing Thought–04Nov19

Back in the days, about 30 years ago, I was a stock trader and I made some cash and I also lost some cash…..but I wish I had a way of knowing some things in advance and I would have made a lots more cash……

Instead of gold futures I would have traded in another metal……Palladium…..

Gold may be the best known precious metal, and it’s currently selling for about $1,490 an ounce. But it’s now in the rearview mirror of a different, lesser-known precious metal: palladium. About a year ago, palladium was selling at about $900 an ounce, notes Bloomberg. Today? More than $1,800, a threshold it recently cracked for the first time, reports CNBC. As the Wall Street Journal explains, the soaring price can largely be chalked up to tighter emissions rules for gas-powered vehicles in China and Europe. Palladium is used mainly to build catalytic converters, which make exhaust systems burn cleaner. And what’s happening appears to be a straightforward case of supply not keeping up with demand.

In its primer on the metal, Bloomberg notes that palladium is not mined directly. Instead, it emerges as a byproduct in the mining of platinum and nickel, mostly in South Africa and Russia. For years, the auto industry has been talking about finding a cheaper alternative, but so far none has emerged. Don’t expect that to change: At this point, automakers seem more likely to put their R&D money into electrification—which would make palladium exhaust systems obsolete—than into a palladium alternative. In the meantime, investors are enjoying the run: Demand outpaced supply in 2018 for the sixth consecutive year, and the Journal notes that palladium is one of the best-performing market assets in 2019.

Where is that damn “way back machine” when you need it?

I Read, I Wrote, You Know

“Lego Ergo Scribo”

29 October In History

The year is 539 BC……Persian king Cyrus the Great conquers Babylon and frees the Hebrew slaves and allows them to return to their homeland……but that is not important for we hate Iran (Persia)…..

But what happened here in the good old U.S. of A.?

Does anyone know what happen 90 years ago today?  (Of course you don’t for it does not concern you)……

……..I will wait while the Google machine gets a work out…….

It was called “Black Tuesday”….does that help?

The great Stock Market Crash of 1929 and the beginning of what would be called the “Great Depression”….a time that changed much here in the US.

On October 29, 1929, Black Tuesday hit Wall Street as investors traded some 16 million shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors. In the aftermath of Black Tuesday, America and the rest of the industrialized world spiraled downward into the Great Depression (1929-39), the deepest and longest-lasting economic downturn in the history of the Western industrialized world up to that time.

https://www.history.com/topics/great-depression/1929-stock-market-crash

Let us look closely at what happened that caused this “crash”?

The stock market crash of 1929 – considered the worst economic event in world history – began on Thursday, October 24, 1929, with skittish investors trading a record 12.9 million shares. On October 28, dubbed “Black Monday,” the Dow Jones Industrial Average plunged nearly 13 percent. The market fell another 12 percent the next day, “Black Tuesday.” While the crisis send shock waves across the financial world, there were numerous signs that a stock market crash was coming. What exactly caused the crash – and could it have been prevented?

https://www.history.com/news/what-caused-the-stock-market-crash-of-1929

Now we know what happened so the question now is could it happen again?

Few people are alive anymore who remember living through the stock market crash of 1929. But plenty of people still view that fateful plunge as a worst-case scenario for what might befall investors.

The roughly 20% decline for large stocks in October 1929 actually wasn’t the market’s worst month ever, but the drop incited nearly three years of relentless selling and helped to usher in the Great Depression. Could a 1929-style market setback happen again?

Yes, it could.

https://www.azcentral.com/story/money/business/economy/2019/10/13/stock-market-crash-october-1929-great-depression-economic-downturn/3910471002/

More thoughts on the possibility of the Crash happening again…..https://www.washingtonpolicy.org/publications/detail/the-crash-of-1929-could-it-happen-again

Be Smart!

Learn Stuff!

I Read, I Wrote, You Know

Class Dismissed!

“Lego Ergo Scribo”

The Economy, Stupid!

The markets have had wild swings for about a year now….but with that the profits roll on for the corporations…..the president’s lack of economic knowledge and the wild lies of something good is just making things worse.

And this past week it has come to a head (as they say)…..it happened in the bond markets……

An economic alarm bell has sounded in the US, sending warnings of a possible recession ahead—and sending the Dow plunging 800 points by the end of the day. Yields on 2-year and 10-year Treasury notes inverted early Wednesday, a market phenomenon that shows investors want more in return for short-term government bonds than for long-term bonds. It’s an indication that investors have lost faith in the soundness of the US economy, the AP reports. What appeared to be a slight thaw in trade relations between the US and China that had sent markets sharply higher Tuesday was quickly forgotten, with the Dow opening down 400 points. By 12:30pm ET it was down nearly 650 points; a half-hour later it had plunged 737 points, or 2.6%, reports CNBC. By end of day it was down 800, the S&P 500 was down 86, and the Nasdaq was down 242, per Marketwatch.

CNBC notes that bank stocks like Bank of America and Citigroup have been the big losers today, down 5% and 5.2% respectively, as “it gets tougher for [them] to make a profit lending money in such an environment.” The yield on the benchmark 10-year Treasury note hit 1.622%, falling below the yield of a 2-year, which was 1.634%. The last inversion of this part of the yield curve was in December 2005, two years before a recession brought on by the financial crisis hit. An inversion like the one taking place Wednesday has preceded the last nine recessions dating back to 1955. When a recession might hit, if it does, is a little hazier. Months or even years have passed after an inversion takes place, and before economists can connect the two. Marketwatch notes Wednesday was the Dow’s worst day this year.

Here comes the “R” word…. a “recession”…..some are running worried….

Then there are the multiple lies about China and tariffs….remember when he said China would pay for the tariffs not the American people?  That was the same lie as Mexico would pay for that damn silly border wall.  Don’t forget the lie about all the billions flowing into the coffers of the nation…that was a lie as well…..

If China was gonna to pay and the pain would all be on someone else then why did Trump decide to postpone tariffs until mid-December?

U.S. President Donald Trump on Tuesday backed off his Sept. 1 deadline for 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods, in the hopes of blunting their impact on U.S. holiday sales.

https://uk.reuters.com/article/uk-usa-trade-china-tariff/trump-backs-off-china-tariff-plan-with-delays-for-cellphones-laptops-idUKKCN1V31CR

Would “impact US holiday sales”…..that should tell you everything you need to know about these pseudo-economic solutions….even if you are not a genius like our Supreme Leader Trump.

Be Smart!

Learn Stuff!

“Lego Ergo Scribo”

 

The Markets Made Me Do It!

Christmas is in the rear view mirror…..shopping has replaced religious thoughts with the dreams of “deals”….so what has this world wrought?

In case you were too busy trying to decide what to buy for Uncle Cletus…..the financial markets have taken a beaten…..down 1600+ points just last week….and the news does not look any better for this week….

So much for the Santa rally on Wall Street. The stock market tanked again Monday in a short trading day, making for one of its worst Christmas Eves on record, per the Washington Post. The Dow fell 653, or 2.9%, to 21,792; the S&P 500 fell 65, or 2.7%, to 2,351; and the NASDAQ fell 140, or 2.2%, to 6,192. The day’s selloff worsened after President Trump took to Twitter to blast the Fed as “the only problem our economy has,” notes the Wall Street Journal. The bleak numbers also came after Treasury chief Steven Mnuchin tried to soothe the markets before they opened, but his reassurance might have backfired.

Our dynamite Sec Treasury….that Mnuchin dude tried to soothe the savage economic beast by calling around…..

Treasury chief Steven Mnuchin made an unusual move over the weekend in an attempt to soothe rattled financial markets. But based on the stock market’s open, it appears that Mnuchin’s call to the CEO of the six largest US banks didn’t help. In fact, one financial analyst tells CNN that the call—meant to reassure the banks that all was well—might have actually spooked markets even more. Whatever the reason, the Dow plunged more than 400 points in the first hour of trading, threatening to dip below 22,000. As of 10:20am, the Dow was down 332, or 1.5%, and the S&P 500 (1.5%) and Nasdaq (1.1%) were similarly in the red. (The market woes reportedly have President Trump wondering about firing the Fed chief.)

It appears that the blame is Fed Chair and now the Sec Treas Trump is ranting that these people are to blame…..

Treasury Secretary Steven Mnuchin could become the latest White House official to get the boot. President Donald Trump has been souring on Mnuchin for some time now and the continued decline in the stock markets could be the final straw, reports Bloomberg. One source told Bloomberg that the president has considered firing Mnuchin while another said that whether he stays on or not will depend in large part on what happens to the markets.

https://slate.com/news-and-politics/2018/12/trump-is-reportedly-considering-firing-mnuchin-over-stock-market-declines.html

Mnuchin is not someone that I would ever support but in this case this toad is NOT to blame…..it is the disgusting economic policies of a person that tells everyone he is a genius…..and the markets do not trust him either……his attempt to calm things cost the markets another 600 points.

And if that does not work then he is considering firing the Fed Chair…..another person that did not create a terrible market atmosphere…..

I love when egocentric slugs blame people around him for the problems the fool created…..

The markets will be a telling story….

How fast can Mr. Trump tap dance?

Speculators Beware!

Inkwell Institute

International Studies Group

European Desk

The economic crisis has hit the EU rather hard, especially Greece and then there is Portugal, Ireland and Spain, all of which could be the next big problem for the EU.  Some of the countries are trying desperately to find ways to prevent a total meltdown of their economy…….one such move is by Germany’s government….

Germany pledged to impose a partial ban on so-called naked short-selling early Wednesday to ward off steep market drops.
Before a parliamentary discussion regarding the 750-billion euro rescue package German Chancellor Angela Merkel called for tougher regulations against speculators to restrict some financial trades saying that the future of the euro was at stake.

Naked short-selling involves traders selling shares or investments which they do not hold in hopes of buying them cheaper later.
Germany announced its intentions to prohibit naked short-selling of eurozone government debt and shares of major financial companies hoping other nations would follow suit.

This is a rather tame attempt to cut the legs off of predatory practices…speculators have given the world almost every depression and recession and to try and control devious and possibly illegal financial practices is one way to stop the train in its tracks.

However, there must be something to the attempt for the DOW slid 376 points on the news of the attempt by Germany…..looks like the speculators were trying to get out before they were caught with their pants down.

Keep in mind that speculation caused the economic bubble in Japan to burst……speculation caused the American economic bubble to explode and now China is looking at the problem of speculation….will their economy be the next busted bubble?

Financial Cowards!

The Dems. well at least most of them, are working hard to try and find a way to control the financial markets so these thieving a/holes cannot bring down another booming economy by their insatiable need for profits and not just profits but rather obscene profits…..

You would imagine that the Repubs would do all they could to protect the Wall Street thieves from any such controls…..and they are….but their is another……

New Democrats!  That alliance of centrists democrats……

Bloomberg is reporting on the new financial regulations battle:

“New Dems have promoted strong regulatory reform that institutes trade and price reporting, capital requirements, and margin requirements, all of which puts mandates on these institutions that they don’t like,” Lipman said. “New Dems have been focused on increasing transparency, reducing systemic risk, and preserving the ability for end-users to hedge their risk.”

The battle over derivatives legislation is a test for the Obama administration’s efforts to tighten financial regulation to prevent a repeat of the financial crisis that shook the global economy — a crisis exacerbated by derivatives trading.

Derivatives dealers became concerned that Obama’s plan didn’t adequately define “alternative swap execution facility” and that, in the end, regulators would write rules making them similar to exchanges, people familiar with the lobbying effort said. Over the last two months, the banks pressed to have Frank’s draft allow standardized trades to be executed privately via telephone, as they’ve been traded for decades, as long as they are reported to regulators, the people said.

The coalition sent Congress a letter on Oct. 2 saying that some reform proposals “place an extraordinary burden on end- users of derivatives.” Members also met this week with lawmakers and staff on Capitol Hill.

In the end-users coalition, broker-dealers found a powerful ally. Although the two groups say they didn’t coordinate their lobbying, their interests overlapped and many of the concessions won in the bill for end-users ended up benefiting some of the biggest Wall Street banks whose credit-default swaps exacerbated the financial crisis.

The New Democrats came to the forefront after the crushing defeat of Dems by Reagan and his machine….they decide that they would become a center for the party to rally around….it was these cowards that gave us the NAFTA debacle that help send all those jobs running to the overseas markets ….and now they want to protect the scoundrels that caused the meltdown of the US and world economies…..the truly sad part is that the people while angry at the Wall Street antics will turn a blind eye to the games being played by the big wheels……

You can almost bet that the highwaymen will find a way to help themselves to the benefits coming from Washington and in return will have their guarantee that if they screw up again, the American taxpayer will be glad to help them out of their plight……if this is the way of the future then the Dems are NO better than the Repubs….FINANCIAL COWARDS!

A side note:  Since the taxpayer made Goldman-Sachs more stable should not they get the benefits of the profits that were made on their money?  Why not demand that this company and any company that took TARP money use their profits not for bonuses but rather mail a check to each tax payer in the system…….you want demand to be created…that would do it……..Just a thought……

Consumer Confidence Soars!

Yesterday, 26 May, the markets got what they had been wanting…a bit of good news….and the investors had a feeding frenzy.

The national Consumer Confidence Index was up 14 points this month, to 54.9, according to the Conference Board, the New-York based group that conducts the monthly survey. Driving this was the ”Expectations Index,” which is the part of the survey that measures beliefs about the future. That part was up 22 points, to 72.3.

After hearing the news and watching the markets soar….I had to ask?  Huh?

Did I miss something?  Over 6 million unemployed…..foreclosures raising at an alarming rate…..prices screaming upward…..businesses closing….bills unpaid….personal bankruptcies going up…on and on…..but somewhere the economic gurus have found a way to make all that sound like a bright future for us all.

When I heard the news my first thought was, “who did they ask?  Some guy with a job making $75,000 a year?”  Apparently that is just who they asked.  Why do I say this?

In simple terms, increased consumer confidence indicates economic growth in which consumers are spending money, indicating higher consumption. Decreasing consumer confidence implies slowing economic growth, and so consumers are likely to decrease their spending. The idea is that the more confident people feel about the economy and their jobs and incomes, the more likely they are to make purchases. Declining consumer confidence is a sign of slowing economic growth and may indicate that the economy is headed into trouble.

Each month The Conference Board surveys 5,000 U.S. households. The survey consists of five questions that ask the respondents’ opinions about the following:

  1. Current business conditions
  2. Business conditions for the next six months
  3. Current employment conditions
  4. Employment conditions for the next six months
  5. Total family income for the next six months

Survey participants are asked to answer each question as “positive”, “negative” or “neutral”. The preliminary results from the Consumer Confidence Survey are released on the last Tuesday of each month at 10am EST.

Now that you have been informed on how the CCI is calculated, you can also see that I was right in my assumption.  They poll 5000 households that are stable and thriving and then they write a report stated that all is well in the land of consumption.  And the markets respond to the “good” news.  Investors benefit from the “fake” news.

Let us take another tack…..pick a business say….Staples…..Staples Inc.’s  fiscal first-quarter earnings fell by a third as consumers and businesses put off purchases of bigger-ticket items such as office furniture.

Aside from the downsizing and closings of businesses that have come with the recession, big office-supply chains like Staples are facing a wave of price competition from lower-cost vendors ranging from online discounters to giants such as Wal-Mart Stores Inc.

That does not sound like even businesses are that confident, now does it?  So the whole CCI is a made up piece of economic fairy tale that illustrates NOTHING, while giving the markets a reason for a rally.

As with all these types of reports, the info is skewed to benefit Wall Street not to show a realistic picture of what the economy is really doing and how it is effecting “real” people.

Crisis Deepens, But Can It Be Fixed?

Sarah Palin opened up her remarks here focusing on the current Wall Street financial crisis and how a McCain-Palin administration will put an end to the “mismanagement and abuses” on Wall Street.  In her usual folksy language calling the crowd “guys and gals”, she addressed the excited throng of a few thousand saying that the country’s economic problems need some “shaking up and some fixin’.”

Her economic remarks come on the same day the McCain campaign released a new ad touting the duo’s ability to fix the ailing economy. The ad explains how they will do it, “Tougher rules on Wall Street to protect your life savings. No special interest giveaways. Lower taxes to create new jobs. Offshore drilling to reduce gas prices.”

The market fell 500 points yesterday, so the question is, does the Palin/McCain ticket really seem to have an adequate grasp on the situation.  According to them, the fix is to drill for oil domenstically, that will help repair the damage done by the subprime debacle.  So I missed that part of the rconomics class, where the supply of oil controls the price of my house.  I am sure some economic brainiac can make a case for that, but us “normal” peopole ain’t buying it.