Hard Assets:

rffrydr · Posted: Thu May 11, 2006 11:57 am Post subject: Hard Assets:

Calling all bugs.

Okay, let's start where it all (and they) begin: REAL ESTATE

Supposing it is the seventies again: Vietnam, Mid-Eastern stagflation, crisis of confidence--Rumsfield. Solace is taken in hard assets. So... with $800/gold, $87 oil where does that leave Real Estate?

The (good) saving impulse got us into this bubble (bad); how does it come out of it? Marked to market? Or, gaining while loosing (real value)?

rffrydr · Posted: Tue Dec 06, 2011 4:29 pm Post subject:

And still more on steel:

http://www.businessweek.com/magazine/lakshmi-mittal-the-king-of-steel-trips-up-11102011.html

Mittal blinked. Peabody goes it alone in Australia coal deal. Belgium and France being run full-out at largest margins--the rest, pull outs (Germany). That'll get the message to the germans like nothing else. Mittal is India's champion, not Infosys, and that take out of Arcelor was the equivalent of Japan's purchase of Pismo Beach. Fracking and deep drilling alone will keep these guys margins up and autos/infrastructure will do the heavy lifting. Nonetheless quoting the son is telling...its time to wait on the next generation.
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rffrydr · Posted: Mon Dec 05, 2011 7:25 pm Post subject:

...right on cue: life in EEM steel--just where we always knew it would be!

http://www.bloomberg.com/news/2011-12-05/ternium-shareholders-seen-losing-two-decades-in-brazilian-steel-real-m-a.html

rffrydr · Posted: Mon Dec 05, 2011 6:31 am Post subject:

The love is the hate...is the love: Hard to believe this chart comes with $100 crude (and $3.50 gas):

http://stockcharts.com/h-sc/ui?s=X&p=W&b=5&g=0&id=p05492104949

Compare to CAT. I'd hate to say it was all a FED phenom.
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rffrydr · Posted: Thu Oct 20, 2011 8:05 am Post subject:

Gold/Copper rebounds look pretty weak. Chinese imports pegged up on the crashette but I'd say we're "done." 3-3.60 for time immemorial. QE3 can make mincemeat of this of course--but I wonder, if it comes to that, bigger chinese falloff will offset. Nothing is obvious.
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rffrydr · Posted: Tue Oct 11, 2011 8:42 am Post subject:

Money, by the WSJ money-flow index, flowing out of Basic Materials one one month basis and even on yesterday's rocket.
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rffrydr · Posted: Wed Oct 05, 2011 10:52 am Post subject:

Hard Assets can be very...pliable:

rffrydr · Posted: Wed Sep 28, 2011 6:01 pm Post subject:

This may be the stimulus that....matters:

http://stockcharts.com/h-sc/ui?s=WMT:FCX&p=W&b=5&g=0&id=p48157014136

...as much as it hurts:

http://www.marketthoughts.com/forum/deflation-reflation-inflation-or-all-three-t10386,highlight,deflation+three.html
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rffrydr · Posted: Tue Sep 27, 2011 7:10 am Post subject:

Resource equities: It's not about the dollar anymore.

http://www.minyanville.com/businessmarkets/articles/commodities-commodity-linked-equities-dollar-weakness/9/27/2011/id/37032

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rffrydr · Posted: Tue Sep 13, 2011 9:17 am Post subject:

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rffrydr · Posted: Tue Aug 09, 2011 10:36 pm Post subject:

Citi on the Miners ex Alphaville:

What is being priced in?

rffrydr · Posted: Wed May 25, 2011 6:58 pm Post subject:

Spent the day in VirginiAY City, NV. The comstock mining that brought young Mark Twain west has, I'm happy to report, sloughed off its touristy ways and returned to an actual mining operation. It's small....but it's going!

The Newedge CTA index is down 3.5% on the year and lagging the
passive CRB index by 700 bps.
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rffrydr · Posted: Wed May 25, 2011 9:26 am Post subject:

Steel: it’s all about China
Published: May 25 2011 10:16 | Last updated: May 25 2011 10:16

Aditya Mittal deserves a little professional sympathy. The son of Lakshmi Mittal, chairman and controlling shareholder of ArcelorMittal, is chief financial officer of the world’s largest steelmaker. As of Tuesday, however, he is also the head of the group’s largest and most problematic division.

In the short term, ArcelorMittal’s recovery from the global economic slowdown has been slow. Although the trends in 2011 are mostly positive, operating earnings and the share price are both down about two-thirds from pre-crisis levels. In the long term, the younger Mr Mittal can do almost nothing about the most important variable in the steel industry – China.

ArcelorMittal upbeat after 67% jump in income - May-11A significant slowdown in China would be a problem. But as long as the country continues its recent pace of development, its share of global steel demand will probably stay at around the current 45 per cent (by comparison, it consumes only 10 per cent of the world’s oil). In that case, the growth rate of global steel production could well stay at the 5 per cent it has registered for the last decade. The Mittals could continue to lead the industry in calibrating production to demand. They have been successful at this – losses were much lower in the recent recession than in earlier, milder declines.

In a decade or so, however, Aditya (or his father, if he remains in control) must brace for a tough transition. The construction of Chinese infrastructure has lifted the global intensity of steel use to levels not seen since the post-War reconstruction of Europe and Japan ended in the early 1970s. That golden period was followed by two decades of minimal growth in global steel production – and dismal profits.

When China is built out, its steel demand should fall. Chinese producers, left with spare capacity, would then be tempted to export into an already well supplied world. That implies another bad decade or two for the industry. Mr Mittal should enjoy the relatively good times while they last.
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rffrydr · Posted: Tue May 17, 2011 6:51 am Post subject:

The Glencore underwriters out in force. Here's the mantra (Credit Suisse via Alphville):

Credit Suisse on the miners

■
Earnings momentum negative – commodities down, cost pressures up.
Earnings trends -10y show that consensus earnings have consistently
lagged commodity and share prices by 3-6 months and downgrades have
tended to call a bottom to performance. Recent trends suggest an earnings
trough in June/July and improved relative performance from Q311.
■
Lagging indicator: YTD the sector spot PE has remained around 7.5x
showing the stocks are at least efficient in pricing in commodity movements.
Our focus remains on fundamentals; in H2 we expect rebounding IP
momentum and improved risk appetite to underpin metal prices and drive a
re-rating of the sector. Base metals have underperformed bulks significantly
YTD, we would expect some of this to reverse in H2 as visibility improves.
TT
Cost inflation is a natural part of the cycle however pressure has built YTD.
Our strategists expect ongoing appreciation of the A$ and ZAR, but
predicated on ongoing strength in the commodity cycle. To see the multi
year 20%+ pa inflation seen 2005-08 would require oil over $160/t in 2013
and A$/ZAR/Peso 20% stronger from here. Possible but unlikely without a
significant step up in commodity prices.
■
Stock picks: Copper (ANTO, KAZ) and platinum (LMI, AQP) screen with
the greatest downgrade risk. RIO remains top pick with cheap spot valuation,
our bullish outlook on iron ore in 2011/12 and upside potential from balance
sheet re-gearing. As confidence/visibility improves we would recommend
adding to core large cap names to gain greater exposure from more
leveraged/base metal exposed names.
TT
Inflation unlikely to reach 05-08 levels without similar
appreciation in underlying commodities
The underlying cost base for many of the mining companies have direct linkage to
commodity prices themselves given the consumption of steel, grinding media, energy etc.
The rise in steel prices and the oil prices can be taken as good proxies for rising material
and energy costs.2005-08 witnessed 20%+ annual cost inflation each year. 2004-2008 the oil price more
than doubled from an average of $41 in 2004 to $100 in 2008. To see similar levels of
energy inflation the oil price would need to nearly double from below $80 in 2010 to close
to $160 in 2013.

Once again, it's really about DEflation.
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rffrydr · Posted: Mon May 16, 2011 7:57 am Post subject:

The "lunatic fringe" theory:

http://ftalphaville.ft.com/blog/2011/05/16/569781/it-wasnt-the-froth-that-caused-the-commodities-rout/
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nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

And a lot of real money is getting HELPED here.

Every contract bought long over the last couple of months had a SELLER.

Plus there was a lot of retail 'punter' attention to shorting vehicles for silver and other commodes. News flow articles crossed my screen several times.
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