CRcapital

Feeling The Direction of The Wind

blodmell — Sun, 05 Feb 2012 13:09:18 +0000

The world was preparing for death by a thousand cuts for 2012 only a month ago. Here we are after a bizarrely fast rally all over the world. I just finished reading Foreign Affairs this Sunday morning. What defined the issue other than the case for bombing Iran as the least worse option was the general optimism. Gideon Rose reminded us what relative peace and prosperity we live in while the editors seem to think that all this clashing of ideas isn’t going to be so bad afterall?

The theme that I keep coming back to is that we are in a world where emerging markets are the future. Even the Western minded Council on Foreign Affairs and Economist mag are coming to that conclusion. The Foreign Minister of Australia, Asia’s only Anglo Saxon/Western bastion, announced Europe’s “early grave”.

The point is that the global economy probably has more legs in it than ever and we are simply confused by the changing landscape.

It takes the long view to survive the volatility though…

Pondering the Market Rally Over Obama’s speech and Some Ice Cream

blodmell — Wed, 25 Jan 2012 03:15:42 +0000

The risk rally this month is little short of stunning. Portfolios that were in the trash are in shooting range of breaking even. The fall was fast but so was the rally. I assume more volatility awaits. These are all lessons in discipline. Buy low, sell high. Duh. But nobody does it. I watched folks run for the exit in December and now they want to buy. It’s tough being an investor. Long term? That word is being gutted. The volatility has made us all nuts. Anyway, Obama has the answer for our problems…populism. I worked in the fields yesterday with the kids in the farm. We built a tree house. I couldn’t move this morn but a handful of pills made me feel better until now. The capitalist Americans have lost their way and the communist Chinese grabbed the Economist mag headline this week, “The Rise Of State Capitalism”. http://www.economist.com/node/21543160

The world is literally upside down. Thus, the emerging market story is in tact. One just has to have either the b..ls or capital to handle it.

At least the dulce de leche is delicious.

Don’t Give Up On Vale Mining.

blodmell — Thu, 29 Dec 2011 13:59:52 +0000

The preferred share is trading around 20 dollars, down from its 52 week high of 36. 36 was supposed to be cheap for a stock with such an incredible market position. Long term investing takes patient of course.

The long term story continues to look very bright. They are parking there own super tankers in China now. One of the world’s largest commodity ships operated for Vale SA reached a Chinese port for the first time, after the nation’s refusal to allow such vessels delayed by more than six months the Brazilian miner’s plan to control shipments with giant carriers.
http://www.businessweek.com/news/2011-12-29/vale-s-giant-iron-ore-ship-reaches-china-port-for-first-time.html

China Is Racing To Compete With The Dollar For Global Reserve Currency Status

blodmell — Tue, 27 Dec 2011 12:30:04 +0000

For two years, I’ve been blogging that China will convert the Yuan, issue bonds and openly compete with the dollar for global central bank reserve money far sooner than most realize. The headlines dutifully role out and the new trade deal with Japan is right in line. Basically, the Chinese and Japanese are cutting out the dollar as the transfer currency in one of the world’s most important trading relationships. The writing is on the wall. The US dollar is enjoying safe haven status now because of the dominant reserve/liquidity status but nothing last for ever.

http://www.nytimes.com/2011/12/27/business/global/china-and-japan-in-currency-agreement.html?_r=1&ref=business

Phillip Coggan, A Deeply Insightful Market Watcher Makes Some 2012 Observations

blodmell — Sun, 18 Dec 2011 20:10:03 +0000

I’ve attached a link to his article in the Economist Magazines annual “The World In ___2012″ Series. It is balanced. He is not making predictions but observations that are rational. I’ve carefully followed his writings for years and it’s worth listening to his observations.

Philip Coggan is the Buttonwood columnist of The Economist. Previously, he worked for the Financial Times for 20 years, most recently as Investment Editor. In that post, he founded the “Short View” column and wrote the “Long View” and “Last Word” columns. In 2009, he was voted Senior Financial Journalist of the Year in the Wincott awards and best communicator in the business journalist of the year awards. Among his books are “The Money Machine”, a guide to the city that is still in print after 25 years and “The Economist Guide to Hedge Funds”. His latest book, “Paper Promises: Money, Debt and the New World Order”, was published by Penguin in 2011.

Interestingly, in the same issue, there is an article guessing that OPEC could be the saviour in 2012. They argue that OPEC could do more to save the global economy than the Fed. I can hear the slogan night…don’t fight the OPEC. “In 2012, however, a collapse in the price of oil—not just a modest decline, but a plunge deep enough to revive American consumption and to transform the Greek, Portuguese, Spanish and Italian trade deficits—could be the deus ex machina that averts a catastrophic double-dip. This could be the year when OPEC finally realises that it serves its own interest by supporting, instead of sabotaging, global growth.” Now, wouldn’t that be a plot twist!

PLEASE READ
http://www.economist.com/node/21537924

China Steps Closer To Currency Convertibility. The “Redback” Is Coming

blodmell — Sun, 18 Dec 2011 19:59:44 +0000

China will open more channels for foreign institutions to invest in its stock markets, a move aimed at supporting share prices and helping to counter capital outflows as the economy slows. The Chinese securities regulator announced late on Friday that renminbi held offshore could be used to buy equities within China, a long-awaited reform that is critical to promoting more international use of the Chinese currency. The Chinese currency will begin to challenge the dollar for global reserve status sooner than we expect. Say, within 3 years?

2.7 Billion $ Exited Emerging Markets This Month

blodmell — Tue, 29 Nov 2011 13:24:47 +0000

Emerging Markets Assets which are considered “risky assets” in the global spectrum have been hammered this month. This doesn’t change the long term probability that EM assets will grow faster over the long run, but that is no help when we are catching falling knifes. It takes discipline to keep our eyes on the long run, indeed.

The Ango Saxon Minded Financial Markets Have Humbled The Euro Currency Union

blodmell — Thu, 24 Nov 2011 19:25:31 +0000

http://video.ft.com/v/1291007726001/Sachs-Time-for-an-IMF-Intervention-

The Euro will and must be saved. The region needs calm and a central bank that acts as the lender of last resort.

The Dividend Yield Matters

blodmell — Sat, 22 Oct 2011 09:40:12 +0000

As difficult as it has been to keep buying companies when they are trading at 50% DISCOUNTS from their 52 week highs based on the long term “story”, let’s not forget the dividend yield.

One of my very favorite economists is the Buttonwood’s editor and he just posted on “In Defence of the Dividend Yield.”

He says it better than I do
http://www.economist.com/blogs/buttonwood/2011/10/equity-markets-0
In a low interest rate environment, dividends matter even if they do come from a battered Brazilian steelmaker for example

Our Brazilian Steelmakers Are Oversold

blodmell — Wed, 19 Oct 2011 15:30:18 +0000

Ive been watching the news carefully regarding our Brazilians such as Gerdau and Companhia Siderugica Nacional SID. The markets have been too pessimisitic about them and dont forget they are some of the best dividend paying stocks around.

Build on these cheap prices.