The options are now showing a 72.9% chance that the Fed will cut to 4.50%, up from 65.8% last week. (The futures show 94%).
Goldman Says `Take Profits’ After Crude Hits Record
“Goldman said it was closing its long positions in New York oil futures. Oil has gained 51 percent this year as hedge funds and other large speculators increased bets on rising prices. Net-long positions in New York crude futures in the week ended Aug. 3 jumped to the highest in more than a decade.”
So Goldman was a seller above $92 … makes sense when you look at the chart. The day trading folks I deal with have all shifted short in Crude, but they can turn on a dime so don’t read too much into it. Remind me next time I pick a top to say I’m just counseling “near-term upside potential caution.”
An amusingly dated (and in some ways, deeply depressing) article, Why I Never Hire Brilliant Men, written in 1924. These are the five things the author, a wholesale grocery magnate, looked for in the men he hired:
I went down to my club to exercise after lunch (I eat a very light lunch of tofu and wood ear). Who did I run into down there but the King of Jordan. Or I should say one of his bodyguards. One of the four bodyguards surrounding him. They were all smaller than me but looked very fit and motivated. Plus there were four of them. Anyway, I had the presence of mind to call out, “Yo Abdullah, wazzzup?” No one seemed amused, but they left me alone. I wear glasses so I must be harmless.
Longish profile of Ospraie Management’s Dwight Anderson
“[In 2006 Anderson’s] $250 million Point Fund… plunged 29 percent in the first five months of the year after a series of wrong-way bets on metal futures, forcing Ospraie to close it down. None of Anderson’s funds carries much leverage, and that helped the flagship Ospraie Fund survive despite its 19 percent loss in the same period.
‘The fact that I had a horrible quarter is a statistical probability, and we had always told people there is that possibility,’ Anderson says. ‘We do everything that we can to manage the risk, and I think we’re better at it today than we were a year ago.’”
A statistical probability, eh?
A look at the 30-minute crude chart … trend traders have caught a big move these last several days but I have a feeling that price will soon fall below the trailing stop, currently just under $92.
Citigroup Dividend, Falling Shares Make Bank Stocks Unbeatable, by Michael Patterson
“The only other time in the past two decades when banks’ dividend yields surged more was in 1990 and 1991, in the wake of the collapse of almost 1,000 U.S. savings and loans.
The dividend yield for Charlotte, North Carolina-based Bank of America, which is currently 5.33 percent, climbed to 7.55 percent on Oct. 26, 1990. Shares of the biggest U.S. bank by market value more than doubled over the next year, four times the S&P 500’s 26 percent gain. At Wells Fargo, the fourth- largest U.S. bank, the yield jumped to 5.5 percent on Sept. 28, 1990. The San Francisco-based lender soared 120 percent the following year, compared with a 26 percent advance in the S&P 500. Wells Fargo’s current indicated yield stands at 3.59 percent.
Financial stocks as a group jumped 44 percent in 1991 as the Federal Reserve cut the target interest rate for overnight loans between banks to 4 percent from 7 percent to pull the U.S. economy out of recession.”
And Citigroup was a split-adjusted $1.60 a share back in 1990….
I was early rather than late when I bought a ton of financials back in August, and I’m sitting on some pretty large losses now (especially in WM). I thought they were cheap then, and obviously think they’re a lot cheaper now. Bargains can become bigger bargains, alas. I’m not day trading these stocks, I plan to hold them for many years, and I’m not overly worried (though if dividends get slashed that would definitely disturb me). I’m sitting tight.
Dollar’s Demise Can Be Seen Even in the Maldives, by William Pesek
“These things start out slowly, and in recent months I have had similar experiences [of merchants refusing payment in dollars] from Mexico to Vietnam. In markets, restaurants, taxis and tourist shops that long accepted dollars, many are opting for local currency.”
One look at the ten-year weekly chart of the US Trade Weighted (Major Currency) Dollar Index explains why these small merchants are no fools. This Dollar Index has fallen 35% since January 2002.
(Do you guys like these pop-out charts or do you find them annoying? Keep ‘em or dump ‘em?)
It has also been awhile since I posted an mp3 … here’s a live version of Francis Cabrel singing La fille qui m’accompagne — maybe best translated simply as My Girl (better translations welcome).
Francis Cabrel - La fille qui m’accompagne (6.3 MB .mp3)
Elle parle comme l’eau des fontaines
Comme les matins sur la montagne
Elle a les yeux presque aussi clairs
Que les murs blancs du fond de l’Espagne
Le bleu nuit de ses rêves m’attire
Même si elle connaît les mots qui déchirent
J’ai promis de ne jamais mentir
À la fille qui m’accompagneAu fond de ses jeux de miroirs
Elle a emprisonné mon image
Et même quand je suis loin le soir
Elle pose ses mains sur mon visage
J’ai brûlé tous mes vieux souvenirs
Depuis qu’elle a mon cœur en point de mire
Et je garde mes nouvelles images
Pour la fille avec qui je voyageOn s’est juré les mots des enfants modèles
On se tiendra toujours loin des tourbillons géants
Elle prendra jamais mon cœur pour un hôtel
Je dirai les mots qu’elle attendElle sait les îles auxquelles je pense
Et l’autre moitié de mes secrets
Je sais qu’une autre nuit s’avance
Lorsque j’entends glisser ses colliers
Un jour je bâtirai un empire
Avec tous nos instants de plaisirs
Pour que plus jamais rien ne m’éloigne
De la fille qui m’accompagneOn s’est juré les mots des enfants modèles
On se tiendra toujours loin des tourbillons géants
Je prendrai jamais son cœur pour un hôtel
Elle dira les mots que j’attendsElle sait les îles auxquelles je pense
Et l’autre moitié de mes délires
Elle sait déjà qu’entre elle et moi
Plus y a d’espace et moins je respire
Haven’t been playing much poker recently but I went online tonight for a tournament and was surprised to see that all buy-ins and prize money are now denominated in euros. My account, long filled with old dollar winnings, is now quoted in euros! How about them apples! How long before we see crude oil, gold, etc. quoted in euros instead of dollars? STAY SHORT USD.
