Diary of a Financier

Top Newsstuffs (March 4-10)

In Bookshelf on Sun 10 Mar 2013 at 07:48

Yet another snowstorm leading us into the weekend…

State of the Liquified Natural Gas industry: Floating LNG technology, the holy grail of gas investments | OilPrice.com
“Floating LNG production, storage & offloading concepts are revolutionary because they have the ability to station a vessel directly over distant fields, removing the need for offshore pipelines and adding the advantage of mobility, since these floating facilities can be moved to a new location once existing fields are depleted.”
The world has 10 existing Floating storage/regasification projects, 8 under construction & 30 in planning.

Rail traffic weekly: Big acceleration in growth | Association of American Railroads (AAR)
Weekly traffic +4.4% (vs. this week last year), bringing total ytd volume to +1.1% y/y.
5 of 10 carload groups posted gains: Petroleum products +69.5%; grains -22.2.
[Big bullish jump in ytd growth rate from 0.6% last week to 1.1% this.]

Infographic: How long before the 3D printing revolution? | Cool Infographics
Complete guide to 3D printing past, present & future. Putting the growth opportunity into perspective, it’s very early in the game if you compare additive manufacturing to other disruptive technologies, like computers.
#Innovation $SSYS $DDD $XONE

Fed Beige Book extolls the virtues & growth of shale gas | Business Insider
Cleveland Fed reported exciting activity in shale gas industry (especially Marcellus shale) with a pickup in cashflow, investment, jobs/hiring & housing growth.
“[Conventional oil & gas producers and Auto] dealers… are apprehensive about losing technicians to the shale gas industry, which may put upward pressure on wages.”

Alltime highs then & now: Dow Jones Industrial Average 2007 vs 2013 | The Wall Street Journal
DJIA- then 14,164 v now 14,304
GDP Growth- +2.2% v +1.6%
Median Income- $54,623 v $51,584
Unemployment (U-6)- 8.4% v 14.4%
Food Stamps- 26.9mm v 47.69mm
Fed Balance Sheet- $0.89T v $3.09T
Debt/GDP- 38% v 74.2%
Total Debt- $9.008T v $16.43T
Consumer Confidence- 99.5 v 69.6
VIX- 17.5% v 14%
10y Treasury- 4.64% v 1.89%
Gold- $748 v $1583
NYSE Average Daily Volume- 1.3B v 0.545B

Presentation: “The Big Easy” (1q13) | Jeff Gundlach (DoubleLine)
Buying silver for higher beta leverage than gold, which is attractive after lagging CB balance sheet growth. [I wouldn’t call the decoupling a “dislocation” yet, so I don’t think precious metals are wild buy/deep value here.]
Currency wars will soon lead to protectionism, especially now that Japan has joined the race to the bottom with JPY devaluation & inflation targeting.
Thinks rates will remain low for much longer, with 1.63% 10y target by YE13. So, he prefers to buy* 3% 30y Treasury over 4.5% BB credit–better relative value, particularly to hedge his low duration (2.1) portfolio.
Student loan bubble shows folly of government intervention; like housing before it, student debt is rising exponentially while graduates’ income is declining. The only baskets where there’s alarming inflation are college tuition & healthcare, both where the government has heavy involvement–not to mention SPX (from QEs).
Agrees with Druckenmiller that QE will have unforseen consequences, maybe in 2015, although he knows from his early crisis call in 2005 that he can’t time it.

Jeff Gundlach (DoubleLine) shifts gears, now buys US bonds | Reuters*
Gundlach made a bearish call in 7/2012, when 10y yield was @ 1.48%. With 10y now @ 1.87 (having hit 2%) & DJIA @ 14k, he says Treasuries are good relative value for the ST & a good hedge for his portfolio’s credit risk.
He’s still long Nikkei/short Yen with USDJPY target over 200.




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