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B4 The Bell Tuezelday Sptember 28


thesun

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Are commodities about to pop?

 

A cargo ship chartered by Chinese merchants sits in a Mississippi River berth waiting for a cargo of soybeans. Yesterday I posted an excerpt from a commodity broker cc suggesting that traders had seized the cargo to recoup losses from previous sales to China. Over the last six months the Chinese have refused to pay for several shipments of soybeans and other soy products.

Today it was confirmed that the loading company refused to load the vessel upon hearing that its cargo would be seized.

 

Demand from China has been cited as the justification for rising commodity prices. We have noted several times that the price for base metals in China is substantially below world prices. China announced a crack down on speculative lending in March of this year since then defaults have been seen on grain, steel and base metal shipments. Is there really any demand in China?

 

---We report?you interpret (tm, Plunger (slightly adjusted for seasonal variances and other related and unrelated factors))

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I've talked a lot about how Companies cannibalize themselves to stay in business...again from todays Vancouver Sun...Discounts the latest weapons in Gas Price Wars...Big Box retailers are using Gas as a loss leader...we are responding to a trend in the Marketplace , where there are big Box retailers using Gas as a loss leader , or discounting. Consumers here in Greater Vancouver are price sensitive , particularily on Gas. Unless a Gas Company wants to lose a significant volume , it MUST stay competitive.. said Chevron spokeswoman Jennifer Parkinson-Dow....The article goes on to point out the Oil Companies in staying competitive are getting reemed as they lose money by discounting BUT if they lose Market share they lose money anyway...sounds like the Auto Industry doesn't it and it can't go on long! ;)

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...uranium stocks all up. Many up 17% yesterday.

 

?And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I?ve known many men who were right at exactly the right time, and began buying and selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine ? that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.?

 

from ?Reminiscences of a Stock Operator? - Edwin Lefevre (based on the life of Jesse Livermore)

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The Fed reduced the repor pool by $2B today, and more importantly also reduced the repos to agencies by the same amount. In other words the Fed is not showing much fear about the GSEs and the economy - yet. I mentioned last week it may take a few weeks or so before the Fed grasps the magnitude of the oncoming recession.

 

Meanwhile, I am considering adding to shorts and reducing longs.

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Are commodities about to pop?

 

A cargo ship chartered by Chinese merchants sits in a Mississippi River berth waiting for a cargo of soybeans. Yesterday I posted an excerpt from a commodity broker cc suggesting that traders had seized the cargo to recoup losses from previous sales to China. Over the last six months the Chinese have refused to pay for several shipments of soybeans and other soy products.

Today it was confirmed that the loading company refused to load the vessel upon hearing that its cargo would be seized.

 

Demand from China has been cited as the justification for rising commodity prices. We have noted several times that the price for base metals in China is substantially below world prices. China announced a crack down on speculative lending in March of this year since then defaults have been seen on grain, steel and base metal shipments. Is there really any demand in China?

 

---We report?you interpret (tm, Plunger (slightly adjusted for seasonal variances and other related and unrelated factors))

China is looking remarkably like the US did in the fall of 1929. Their internal demand is directly linked to their external demand. The huge over-investments of the past few years are creating huge surpluses of capacity and severe mis-allocation of investment. We die - they die - global demand dies.

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...uranium stocks all up. Many up 17% yesterday.

 

?And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I?ve known many men who were right at exactly the right time, and began buying and selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine ? that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.?

 

from ?Reminiscences of a Stock Operator? - Edwin Lefevre (based on the life of Jesse Livermore)

Guess the only way to play is a stop under the previous day's low.

post-20-1096380642_thumb.png

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