No, not the weather. Me.
Clearly I’ve “picked up a bug” on my recent tour of Truck Stops, Dingy Diners, and Road Side Rest Areas …
OK, I’ve had a ‘fuzzy’ feeling for a couple of days along with some mild aches and pains and that odd ‘sparkly’ feeling along the nerves from time to time. All of it tends to point toward a virus of some sort. (And here I thought that by now I’d had them all ;-) Seriously, though, having taught classes for years and participating in the daily germ exchange of raising children along with a spouse who is still teaching ‘the wee ones’ and has brought home just about every bug known and not… I started working at about 7 1/2 years old washing dishes in my folks restaurant (by hand… no machines 1/2 century ago…) and being exposed to a couple of hundred folks germs a day. Every day. Then went off and worked in hotels at the admissions desk for a few years then in a hospital on the wards for a couple of years and as an admissions clerk for a couple. If it’s “been around” I’ve had it sneezed on me.
But I digress…
Somebody has mutated, and decided to “move in”. So far it’s pretty wimpy. Major symptom is just a very significant fatigue. I’ve got a 1/2 dozen ideas for postings, and barely enough energy to type in this “never mind”…
So for now, please accept my apologies.
The present ‘ideas’ even if ‘unadorned’ by any significant facts, fact checking, data, etc.:
Egypt
Egypt is a mess. If Mubarak wanted to TRY to do the worst possible thing, he could not have done more harm. In a patronizing “My Children Daddy doesn’t WANT to spank you…” speech he said he’s putting in charge his hand picked “yes man” VP. But not stepping down. He’ll just be hanging around the palace until September just to make sure things turn out right.
Expect a mess after Friday Prayers let out ( in about 12 hours by my reckoning…)
Expect oil and gold to rise (but I think silver would be a better way to ride this puppy). As Obama and friends are busy screwing up the US Oil industry and moved the 2012 leases out to 2017 before anyone can bid on them (yeah, not exactly headline… but important) and with Brazil having a socialism risk writ large these days, best plays are likely to be Canadian oil. IMO, SU.
EGPT is a very thinly traded ETF in Egypt. Something like about $25 Million total capitalization. It will be very bouncy (bounced up 5% on the rumor Mubarak was leaving…) I’d expect a plunge about next Monday, then one can likely get a Dead Cat Bounce trade out of it.
(I think BAL the Cotton ETF on the risk of an Egyptian cotton failure in the chaos, would be a good play but it is up today by 5% and on a spike away from the trend, so there is a very large risk of a collapse back to the SMA stack).
Also the oil tankers ( FRO and VLCCF ) stand to win if the pipeline and canal are shut down. VLCCF has an 8%+ dividend too… I’ve owned it on and off over the years.
At any rate, it’s a mess, and will stay a mess for while. This will further destabilize most world markets (on the risk of oil spikes and with a $15 / bbl premium on European oil vs USA at present) and I’d look for a generalized run out of emerging markets with a big oil bill and into countries with secure energy supplies (France, Russia, Indonesia) if things don’t resolve over the weekend.
You can start watching for a bottom formation in Brazil EWZ, and I’d expect India and China to have issues (as central banks raise rates… trying to cope with our flood of pretty paper from our dollar mills…)
Weather
Having wonderful weather on this coast, which means horrid weather for the East Of The Rockies. My Condolences… (Maybe we could send AlGore to Egypt to cool things off ;-)
Wheat is likely to get some help from promising Australian crops, but is headed up for now. Corn is likely to be problematic with the present cold / storms profile in America. Sugar is way too high. I’d start watching for a ‘correction’ soon. SGG is looking like a ‘failure to advance’ to me.
FWIW, there is a relatively new ETF in Corn with the ticker CORN.
CORN ETF
JJG the grain ETF that’s a basket of wheat, corn, soybeans looks about the same.
My best advice is to stock up on noodles and boxed cerials… Also, the ticker COW is a meat futures ETN. As folks have been dumping animals like crazy due to the high cost of feed, prices of meat were held down. Now the herd is at very low levels. Expect prices to rise into the rest of the year. With corn near a double, meat has to follow.
And I’m not seeing a whole lot of hope for loads of fresh grain crops in the next 4 months…
The “bottom line” is that you want to be in the things that China, India, and Europe will want to buy during “bad times” and right now that’s feed & fuel with hard money parking places.
However, with things moving this fast, watch out for a load of jerks and jumps. Note that TBT has bounced up and down dramatically each of the last 3 days while net doing “not much”. Folks are frantic and confused.
OK, I’ll add more as I can. For now, at least you have some idea why I’m not being very chatty…
Musings from the Chiefio 
+100 deg F?
At first I thought you were thinking about the temperature range in Oklahoma from this week to next (-31F record low to probably mid 70s next week).
Sorry to hear about your bug. Get well soon.
Harald
Hi EM.
For someone not feeling the best you have excelled yourself.
Wishing you a speedy recovery!
Ken.
Chicken Noodle Soup, Saltine Crackers, Ginger Ale, etc., oh.. and if you have to pop aspirin add 500mg Vit.C w/Rose Hips per. Take care!
Hey E.M.,
Listen to Pascvaks! Some chicken noodle soup would do you good! :)
As for “Obama and friends are busy screwing up the US Oil industry and moved the 2012 leases out to 2017 before anyone can bid on them” I am starting to feel more and more suspicious. I remember years ago reading articles claiming that large chunks of national land were being taken off the logging, mining and drilling market. The supposed reason was that they could be used as collateral to guarantee payment of Treasury Bonds should the US otherwise default. You know, just an under the table agreement of (for example) “Yeah, China, buy some more bonds. I know we look shakey, but we’ll promise some mining in Colorado if we don’t pay up!” It is not that Obama WANTS to screw over the US oil industry; they are just collateral damage caused by pushing the sale of our deficit. I was sceptical about that line of reasoning ten years ago. Having seen the same game played by the IMF in various third world countries, I am not so sceptical now.
“100 + F”…Wow!, didn´t know you were a youngster; those temperatures are a sign of youth and a robust inmune system…..unless there is a reddening in any of your legs, which would be a symptom of flebitis, a current infection of we oldies…
It seems a kind of “green-californian-flue”, caused by enhanced recycling, like the “mad-cows disease” which was caised by the recycling of parts of cows as feed for the same (you know…that “prions” stuff) :-)
Anyway, call your doctor.
Get well soon, E.M.
Just been announced that Mubarak is going to make another statement. Hopefully this time, he’s seen the writing on the wall.
Get better soon I rely on you for a clear view whether it is on how to start using a slide rule to whether I am liberal ;).
When you feel better, I would appreciate some links to stories about Brazil’s move towards socialism. It’s hard to imagine they could be any worse than the US right now, but anythings possible. I don’t see much about it Googlin’ around.
@Jim:
That won´t happen for sure. No matter who the sponsors are. In the future we´ll see the return of Zars in Russia and Peter the IV in Brazil. If you are young enough you will see it.
Well, that was unexpected… Mubarak decided to pack it in and leave afterall…
OK, turn the ideas above around (oil will drop as Suez risk drops, oil tanker storage likely to be left fallow, etc.) though I do note that BAL is continuing to spike…
At this point I’d expect a reversion to the trend line of the SMA stack (rather like the last two ‘saw tooth’ patterns) and that would be a cotton entry point… but in commodities like cotton they are less just chart driven and more driven by structural events. How much was planted? Did some country get a flood wipe out the supply? Has China got a load of orders for “cotton polyester pants” and the price for the cotton is just not relevant to the profit to be made so they MUST buy it?
At any rate, it’s a party day in Egypt and EGPT is up 6% (even though the Egyptian Stock Exchange is still closed and so the ETF can not trade the underlaying…)
But now comes the hard part. Building a government. The Military is presently in charge. Somehow they have to make a new, trusted, police force and plan a transition to an orderly civilian government; while keeping out the Muslim Brotherhood and related and while figuring out which folks “on the take” from Mubarak are slime buckets and need to be deposed (remembering that some of them may be Generals in the military…) while at the same time allowing those who are OK guys just ‘going along to get along’ to continue to ‘get along’.
It’s a very long and hard process to change a culture of corruption. I wish them luck in the effort.
So how does this impact stocks? For Egyptian companies you must wonder “Did they succeed via paying bribes and being granted favors of Mubarak? And will they fail without them? Or will more bribes and favors come from new hands?” I would generally not want to play in that field for a while. You could day trade the bounces, but it’s going to be very ‘news driven’ trading… OTOH: It could be fun to buy a ‘tiny’ of EGPT if you are bored ;-)
At this point, I’d expect a bit of a “pop and drop” as folks come face to face with the sober realities of a military government and the need to build a new government.
I’d also be very worried if I were some OTHER Middle Eastern Dictator…
There was a joke on the streets that one of the news shows reported (and that I can’t get quite right you you’ll need to imagine a bit…). It talked about a couple of revolution Friday’s that had happened. I think this one was called ‘Revolution Friday” and some other was called “Freedom Friday” and… you get the idea. Egypt, Tunisia and somewhere else all overturned on a Friday. “In responsed to Revolution Friday, Freedom Friday, and The People’s Friday: Libyan leader Muammar Qaadafi has banned all Fridays!”
You gotta love folks who can have humor during a revolution….
@All:
Thanks for the sympathy. After sleeping the better part of 20 hours I’ve awakened again feeling a bit better. We’ll see if this is the ‘high point of the day’ and I run down in 2 hours or if the fever is broken and I’m ‘over it’ modulo some recharging time… At any rate, waking up at 11 am I’m feeling a bit tired, but otherwise kind of OK. (That ‘wrung out’ feeling after a mildly fevered night).
As I’ve had other very nasty things that gave fevers up to 105 F, this is pretty tame in comparison. (Still, not a thrill… so much to do that’s not getting done…)
@Jim:
Brazil has sporadically danced with the devils of Right Wing Dictators and Socialism Dear Leaders over the years. The president before this one was a Socialist, but having inherited a very will working “economic miracle” made the wise decision not to screw it up and largely ‘talked a good game” on things like “social justice” and “redistribution” but didn’t actually screw around with the economy. In the last election they elected another socialist who is more inclined to screw with things. The stock market dutifully rolled over and has been headed south ever since. So search terms would most likely just be the name of the new president and their actions. For one, they instituted some currency controls. If you tell me I may not be able to get my money out, I don’t put any in…
So, the good guy: http://en.wikipedia.org/wiki/Luiz_Inácio_Lula_da_Silva
The new president:
http://en.wikipedia.org/wiki/Dilma_Rousseff
And while she makes some ‘less than hard left’ statements (like being anti-abortion and in favor of civil unions but not ‘gay marriage’) even the wiki gives some hints of her leanings with:
So we’ve got “more welfare” and “less private capital”.
Here’s a smidg on the currency controls issue. After years fo tight controls, about 2005 things started toward a bit more liberal, then:
http://www.ft.com/cms/s/0/02eb696e-d4f3-11de-8ec4-00144feabdc0.html#axzz1DgG1O7tX
So they decided if we were trashing our currency at record rates with $Trillion “easing” and “stimulus” they could trash theirs faster:
http://www.commodityonline.com/futures-trading/currency/Brazil-to-control-currency-rise-4887-2.html
So the new kid with Proud Socialist Roots takes over and one of the first things her minsters do is attach rockets to the Real and send it into a dive faster than even the USA can bugger the dollar… while taking evil foreign capitalists for daring to invest in the country… and expending “social welfare”.
Um, oh dear, look at the time… I think me and my money are due at an appointment over in Indonesia… gotta go, but I may come back for a visit in a few years when things have changed…
@PaulID:
Well I generally advocate for self reliance… so manybe you could just use me as a good example of how to work through to a clear view ;-)
@Adolfo:
No need for Herr Doktor just yet. So far just a garden variety minor annoyance. A ‘bad’ fever for me runs about 103 F to 104 F and I’ve had 105-106 F range a couple of times. I tend to have a slightly overactive immune system. On the other hand, bugs don’t last long when they run into me… So ‘just over 100 F’ is ‘barely worth notice’… but does confirm it’s not just in my head and I’m looking for an excuse to lay in bed all day drinking tea ;-)
@Pascvaks:
Oh, right, I’ve got a tub of Vit-C around here for just these occasions… hard to remember it when one is sleeping all the time… I’m having Chicken Ramen as we’re out of simple chicken soup, but both are about the same.
@Jason Calley:
I gave Obama “the benefit of the doubt” (honest! I even voted for him in the California Primary as an ABC Voter … Anyone But Clinton). However, I have a simple metric I apply to folks. It’s the “words to reality gap”. Someone can say one thing, then do another once or twice just due to some surprise overriding unforseen event. (“Yes, I’ll be on time… damn, flat tire.”) BUT when there is a clear pattern of saying one thing while doing the exact opposite frequently…. Then I start looking for the “null and negative”. So “said absolutly nothing about leases, but moves them so as to have a negative impact.”. When you have a load of “null and negative” in the context of “words to reality gap” then what you have is a pathological liar.
Now they may be doing it for what they see as noble reasons. Or they may be doing it as they have no choice. ( I once got to lie to my employee and not ‘finger him’ as the one about to be layed off… still hurts to remember it. One of the hardest things I ever did as a manager, but I was sworn to keep the layoff lists secret – as I.T. manager I had the whole company list 3 days in advance… no way I can leak even one name and be ‘moral’…) BUT when it happens often and with a direction that is policy driven deception.
For reasons I won’t go into here (basically, there is a well reasoned argument for lying about revolutionary goals in Marxism and Socialism) “the left” is much more prone to The Political Lie than is “the right”. Both do it, but the Republicans feel guilty about it ;-)
At any rate, it is part of an accepted dogma among Socialists and The Left ( I really do hate the ‘left’ and ‘right’ terms…) that lying to achieve goals is a good thing. So when I see that pattern in someone with policies allied to Socialism and The Left / Progressives I have all sorts of alarm bells go off. And that is what we see with the Obama administration. They have The Agenda and it doesn’t matter what the people want, The Agenda will be advanced by all means necessary. Once I see that, I run away screaming. And that is what we see with Obama. Can’t get Cap-‘N-Tax? Bring in the EPA. Can’t get oil halted in congress? EPA and cancel lease sales. Etc.
So will those lands eventually be pledged as collateral to loans? I doubt it.
More likely is that with the next Republican Administration we will simply sell them outright to the Chinese.
We have idiots on both sides…
EM
When you wrote 100+ I thought you were talking about the total amount of snow that has dropped in the Northeast US so far this winter :)
I can empathise – I am suffering too, although a different affliction. Glad to see you are recovering. I also thought the 100+ was someway weather related.
Hey Mr. Smith, “MOO.” (Another agricultural ETF).
@Verity Jones et.al.:
Notice the very first line up top? “No, not…”
Can you say “mousetrapped?” ;-)
@R. Shearer:
Yup, MOO too!
basically if its an ag product it’s running…
Though I’d expect a minor dip as we head into a new season in the world and “hope springs eternal”.
That’s an important thing to remember about Ag commodities: Every Year is a Brand New Roll Of The Dice.
Farmers plant different acreages with different product mix and the weather is a new roll of the weather dice.
So don’t ever overstay an ag trend… and watch that planting / harvest calendar…
I’m glad to hear you’re feeling better and thanks for the rundown on Brazil. I have owned VALE for a while and it’s been good so far. Bought more Friday when it bounced off its support line at about 33. I’ll read up on your links and maybe rethink that.