Wednesday, August 31, 2011

Debate Heats Up Over Commodities Holdings

More on the manipulation of Commodities. In conversations here in Naples I have discussed that if prices fluctuate so sharply and affect the general populance that  there will be investigations.
Aivars Lode

A battle is heating up over whether investors in oil and other commodities markets should be required to lift the veil of secrecy that shrouds their trading bets.
The debate has simmered in the three years since oil prices spiked to record highs in 2008, sparking concerns that speculators were driving the move. But it intensified in recent weeks after The Wall Street Journal published confidential regulatory data that identified some of the biggest players in commodities markets, and big chunks of their positions, during that historic rally.
Unlike the stock market, there are no rules mandating public disclosure of commodities positions held by investors.
Industry groups representing traders in the market have opposed releasing any data that would expose the identities and positions of any firm or individual in the commodities markets because they say it would unfairly give away their trading strategies. They have called for a probe into how the information became public.
Others have seized on the data to push for more transparency, including the release of such information on a regular basis.
Tyson Slocum, a member of an advisory committee to the Commodities Futures Trading Commission and director of the energy group at advocacy organization Public Citizen, is leading a push to force commodities investors to publicly disclose the size and nature of their trading positions.
TKence France-Presse/Getty Images
The debate over the role of investors exploded again this year when oil once again topped $100 a barrel and the Obama administration in April launched an inquiry into oil-market speculation. Above, oil pumps in operation near central Los Angeles, Calif, in June.
On Wednesday, Mr. Slocum plans to release a letter to members of Congress, as well as CFTC commissioners, seeking regular disclosure of data.
"We feel that regular disclosure of this level of data serves a crucial role in keeping markets transparent and providing critical information to decision makers and the public," Mr. Slocum said.
His group is pressing the CFTC and lawmakers to make this kind of disclosure mandatory, similar to how the Federal Reserve releases minutes of meetings within a certain time period.
Chilling Effect
Many people who buy and sell securities tied to oil, however, say that releasing the data could be harmful to their trading strategies and could prompt some to reduce their activity, having a potentially chilling effect on the market.
The Futures Industry Association has said that the release of the 2008 data "poses a serious threat" to the confidence of those in the market, who believed they were reporting their positions to regulators privately. The association said it will ask the CFTC to investigate whether any of its rules governing the handling of confidential data have been violated.
A CFTC spokesman declined to comment.
The CFTC collected the data during a "special call" in 2008, when it was attempting to figure out what was causing swings in the price of securities tied to oil. It used the data as the basis for a controversial report that concluded that supply and demand was behind the gyrations, not investors who neither produce nor consume oil on a large scale—a group critics call "speculators."
Rare View
The list contained more than 200 firms and traders, ranging from Goldman Sachs Group Inc. to Yale University to a Danish pension fund, giving a rare view into the murky world of commodities trading.
Sen. Bernie Sanders (I-Vt.), who has distributed the CFTC information, is among lawmakers pushing regulators to limit investments in oil securities by speculators.
Keeping the names private, some argue, leaves the public at a disadvantage.
Amy Myers-Jaffe, a Rice University professor who co-wrote a report questioning the CFTC's methodology for weighing the impact of speculators, said the names of commodity investors should be made public information. "The only people who don't know who's in the commodities market is the public," Ms. Myers-Jaffe said. "I wouldn't hold my deposit in a bank with a giant position in the oil market. It could change on a dime with a shift in geopolitical position," she added
The debate over the role of investors exploded again this year when oil once again topped $100 a barrel and the Obama administration in April launched an inquiry into oil-market speculation.
Oil prices have since fallen again, and settled Tuesday up 1.9%, at $88.90 a barrel. But prices remain a concern for policy makers focused on how to stimulate economic growth, because of they can act as a drag on economic activity.
Write to Ianthe Jeanne Dugan at and Liam Plevin at

Monday, August 29, 2011

A technical view of gold prices from Olson Global Markets

On weekly bar charts, GLD (the largest gold ETF) hit an all-time high
of 184.82 on Monday August 22nd. When it did, it hit key trend line
resistance seen on a semi-log scale drawn off the highs of May 12,
2006 and of March 17, 2008. It also hit another resistance trend line
drawn off the lows of May and June 2008 as well as the highs of
September 29, 2008, February 20, 2009 and December 3, 2009. What does
all this mean? It means that the 184.82 level on GLD is important over
the intermediate-term. Overbought stochastic and RSI readings on
weekly charts add to the importance of this level.

With a “gap” at 163.87 on GLD left “open” on August 5, 2011 (which is
roughly equal to $1,650 for nearby gold futures), many technicians
expect a pullback to that level to occur sometime soon. Worries that
Federal Reserve Chairman Ben Bernanke could have introduced another
round of quantitative easing at his Jackson Hole missive did not
materialize. And although the absence of such stimulus should have
calmed the gold markets down, it did not. Worries over Greek sovereign
debt began to fester once again, along with the uncertainty of how the
European Central Bank and its President Jean-Claude Trichet might
handle that deteriorating situation. As a result, a partial recovery
in gold prices was triggered by week’s end.

From this vantage point however, a “retest” of the 184.82 area on GLD
should offer an opportunity to “lighten up” on GLD or gold for the
intermediate-term. A solid surge above it, however, would suggest that
a new and steeper trajectory for gold prices, and the fear that it
represents, could emerge instead.

Jim Donnelly, Olson Global Markets

Sunday, August 28, 2011

Those Safe Havens You've Been Flocking to Aren't So Safe

It's time for a flight from safety.
The recent market maelstrom has sent investors fleeing to traditional safe havens such as Treasury bonds, recession-resistant stocks, Swiss francs and gold.
But that has only made these assets riskier, exposing investors to the possibility of a tumble. Gold, for example, shed a quick $200 an ounce this past week before rebounding.
For investors whose "safety" now poses danger, here are some unloved assets to consider instead.
In the fixed-income world, corporate bonds look better than Treasurys. Five-year Treasurys yield less than 1%. With inflation running at 3.6%, yields aren't keeping up with consumer prices. By contrast, the Barclays Capital U.S. Aggregate Bond Index, a benchmark for investment-grade bonds, yields about 3.7%—enough to keep up with inflation and a much better deal than Treasurys.
Switzerland, where the economy depends heavily on exports, has a big problem: The rising franc is making it more difficult for Swiss firms to compete abroad, which could weaken its economy over time.
Even "junk" bonds, which have been pounded lately, could be attractive. The Merrill Lynch High Yield Index has a yield of 8.6%, which suggests investors anticipate a 7% default rate, says James Swanson, chief investment strategist for MFS Investment Management.
That isn't unthinkable. Defaults topped 9% in 2009. But the rate was barely 2% in June. And publicly traded nonfinancial companies have 12% of their assets in cash, the most since 1954, says Mr. Swanson.
Investors who wish to add corporate bond exposure can use exchange-traded funds like the iShares Barclays Aggregate Bond Fund. For experienced bond buyers who don't mind risk, the sweet spot of the market might be debt rated double-B. Spreads between double-B bonds and high-grade corporates are 2.5 times normal levels, Mr. Swanson says.
In stocks, consumer staples seem expensive. The Standard & Poor's 500 Food Products Index is up 3% this year, while the broader S&P 500-stock index is down 7%. Kraft and General Mills sell for 15 and 14 times forecast earnings, respectively, at a time when more than 100 of the 500 companies in the index have price/earnings ratios in the single digits.
Military stocks, in particular, have suffered. Raytheon, General Dynamics and Northrop Grumman trade at eight times earnings with an average dividend yield of 3.8%, better than the S&P 500 yield of 2.3%.
Such stocks are cheap largely because investors fear defense cuts. But cuts are unlikely to be sudden, says Jefferies & Co. analyst Howard Rubel, and share prices reflect a worst-case outcome. All three companies are expected to boost earnings in coming quarters and keep making their dividend payments.
The Swiss franc is another potential trouble spot. It has gained around 20% against the dollar this year, thanks to Switzerland's budget surplus and lack of membership in the troubled European Union.
But Switzerland, where the economy depends heavily on exports, has a big problem: The rising franc is making it more difficult for Swiss firms to compete abroad, which could weaken its economy over time.
"Purchasing power parity" is a measure that uses local costs for a set basket of goods to show which currencies are expensive or cheap relative to others. It suggests the Swiss franc is among the world's priciest currencies. The Swiss government is worried enough that it has tried to weaken the currency in international markets. It has had little success so far, but that could change.
Expensive assets like the Swiss franc might not be as safe as investors hope. Instead of pulling money out of U.S. dollar savings to buy francs, they might be better off sticking with dollars. Not only is the dollar cheaper than the Swiss franc on a PPP basis—it is also cheaper than the euro, yen, British pound and Australian and Canadian dollars.
What about gold? It is up more than sevenfold in a decade. But while many investors believe gold is a classic inflation hedge, its track record suggests otherwise. Gold's three-decade correlation with the U.S. inflation rate is just 0.08, according to a 2010 study by researcher Ibbotson Associates. (A correlation of 1.0 means two assets move in lockstep.)
Some investors buy gold to own a tangible asset. Another route: rental properties, which can pull in yearly income that rivals junk bonds. Mortgage lending is tight, but interest rates are at historic lows. Another potential boost: the White House is considering a program to bundle distressed properties and sell them to income investors.
Many investors are buying gold simply because it seems safe in a crazy world. But when America last snapped out of a long, frightening economic funk three decades ago, the metal lost half its value in two years.
—Jack Hough is a columnist at Email:

The Keys to an Unstoppable Drive

I thought this interesting to share what makes people successful. Right now there is no substitute for focus and effort thanks Tim for sharing this with us.
Timothy G Taylor President Network FOB

The Keys to an Unstoppable Drive

"Sometime back in the mid 80’s I was invited to attend a sales seminar hosted by Don Beveridge and I was fortunate in that I got the chance to sit in on the seminar and I found it to be a memorable experience. He was motivated and his sales motivational points were strong. The ideas he shared with the audience, with a little bit of license on my part, went something like this: You wake-up at 5am, from 5-7am, you plan your day, every hour. Be in the office by 7am and by 9am get out and prospect and be in the community. At 5pm get back to the office to do your follow-up with all your prospective clients. From 7pm – 9pm you do your administrative work. After that, get into bed so you’re ready for 5am again. I heard at least two old saws proclaim, “this guy is nuts”. I thought so too but in a good way.

There were about 200 sales people in attendance, many of which were inspired by his ideas. And my guess is that many of the salesmen (there weren’t many women selling in those days) took action after that day because they wanted his results. So they probably started getting up at 5am and arrived at the office at 7am and they started making the cold calls they normally weren’t making. But pretty soon, within a few days or weeks, most would probably stop and resume their old ways. Their activity levels go back to normal. Why? Because their productivity rose above their self-image and their self-image squashed their productivity down within their comfort level; a level consistent with their self-image. They took an afternoon off here and there, maybe they watched Oprah, maybe Jerry Springer; hung out in a bar commiserating with other freight solicitors, it was hard to say. It could be their actions were becoming inconsistent with their self-image.

Today many will talk about balance in life, those are thoughts best left to the idealists and those who believe the system is rigged and we ought to spread the wealth. I believe there is a place for balance all right, mine is in balancing the checkbook and my family life. Making a difference in your life and the lives of those who depend on you is, on its own, balance. The checkbook and family unit satisfaction are only the scorecards. If your checkbook and family life is where you think it should be, you’re doing fine and don’t need to go further unless you think you can in which case you haven’t set you goals high enough. 

You will always perform at a level equal to your self-image. Our self-image is the portrait we have of ourselves. It’s the picture we’ve created about our self and is commonly based on past experiences and environmental influences. So if a new desire for improvement is introduced and it conflicts with our current self-image, it is doomed to fail. I guess I was fortunate in that I had a very successful family and couldn’t envision anything other than success.

Our actions, behaviors and yes our discipline, are all heavily influenced by our self-image. Even if you force yourself via will power to do things beyond your self-image, you won’t be able to sustain it for very long. You will go back to the old behaviors consistent with your own self-belief because you believe it and you act from this belief. What caused the Ali’s, Jordan’s, and the Annika Sorenstam’s of the world to work as hard as they did? What causes the top 1% in selling to consistently sustain their mind-boggling activity levels? Answer for all: their self-image. I
f you watched Tiger’s meltdown in the last couple of years and its subsequent effect on his golf course performance, you can see what a blow to self-esteem can do, even if it was of his own making.

Major changes occur in income, production and satisfaction for the average salesperson (in fact all people) when they understand the importance of evaluating, changing and elevating their self-image. Managers and salespeople comfortable with small and average client sizes but nervous and fearful with the high-end clients, who learn to grow their self-portrait become more confident and succeed in the large client arena. Lets not get into a discussion of which type of client you can make the most money on because you can make plenty off big clients if you set it up right and if you set it up right, it won’t be you doing the clerical work. 

Speaking of clerical work; executives who are most comfortable working clerical tasks instead of leading a group of managers and clerical workers are destined to confine themselves to a mid-level manager’s wage. Not that there is anything wrong with mid-level management or clerical work and if that is what you want to be good at, then be the best. There are many hourly pay rates in business; the highest belong to those who can lead other people in a desperate charge to the top. Job satisfaction is relevant to the position desired and the execution of satisfying your self-image. Life satisfaction is relevant to that self-image and the life that image confines us to.

As we raise our self-image we raise our expectations, behaviors and the discipline we bring to our activities. Learning to change behavior permanently is one of the most important skills a person can develop in their life. Without this skill, any self-improvement intention will result in failure and frustration. All we need to do is to change the portrait by investing time and energy with guidance through learning.

Our self-image is held in our subconscious mind. This is the inside part of our brain where all of our habits and beliefs are stored. Many estimates in the field of psychology suggest we are only utilizing a small part of our brain - generally 5% to 10%. Which means that nearly 90% is untapped and waiting to serve us. Our subconscious mind is this under-utilized resource. It’s the part of the brain that allows our body to do things naturally and consistently with such ease and proficiency that our conscious mind could never match.

Great things that seem impossible become possible when we learn to communicate to and from our subconscious mind. Here’s how: when a thought and feelings match, and are focused on over and over again, it becomes accepted by the subconscious mind. When we add pictures or visualization, which match this thought/feeling combination, we are actually changing our self-image with a new self-belief. Our self-image is only communicated to in pictures, hence the term self-image. When this ‘pictured thought with feeling’ intention is accepted by the subconscious mind it becomes a belief that executes itself automatically.

Follow these steps to a new level of discipline by changing your self-image:

Step one: Decide exactly what you want. This is critical. Is it a habit change you’re after or how about a new goal? Whatever it is, be crystal clear on the outcome you desire.

Step two: Determine the activities that would lead to this outcome. This is an easy step; just determine what you would need to be doing in order for this result to come naturally. It’s simple cause and effect. For this step, make sure you choose activities that you could see yourself doing. There are often many ways to an outcome. Avoid the activities that don’t fit your personality, but make sure the one’s you do choose will ensure your goal.

Step three: Invest 20 minutes a day in focused quiet time, Ten minutes in the a.m. and 10 minutes in the p.m. Here is the place you need to invest the time and energy. In this time, find a quiet place in which you will not be interrupted and close your eyes. With eyes closed, put your attention on the goal. With thoughts on the goal, see yourself doing these activities with ease day in and day out.
Picture yourself becoming proficient at these activities. Bring in more and more clarity to the picture every time you do this. Visualize the time of day and the reaction from those around you. The more detailed the better! And finally feel the feelings you would feel, as you would engage in these activities; also feel the feelings, with intensity, that you would feel accomplishing this goal. See yourself actually doing the deal!

Driven people produce record results because of their belief in themselves. They grew their self-image by this ‘pictured thought with feeling’ process. Many probably didn’t even realize they were doing it. Whether they intended to or not doesn’t really matter because this is how it works and it can work for anyone.

Apply this process and remember the importance of vivid pictures and concentrated feeling. Do this and you’ll never again have to be stuck in undesirable patterns from your past. With new information can come new results.

We’re only here for a visit. If you want to make a difference, you already have. There is nothing a tantalizingly close as a dream.