Two Trends That Will Force The Fed To Start Buying Stocks

By John Rubino – Re-Blogged From Dollar Collapse

While the Japanese and Swiss central banks have turned themselves into hedge funds by loading up on equities, the US Fed has stuck to supporting the stock market indirectly, by buying bonds. It’s worked, obviously, with all major US indexes at record highs. But it won’t work going forward, thanks to two gathering trends.

First, the main way bond buying supports equities is by lowering interest rates which, among other things, allows corporations to borrow cheaply and use the proceeds to buy back their own stock. Companies avoid paying dividends on the repurchased stock and the government gets capital gains tax revenue from a bull market. From a short-sighted Keynesian perspective, it’s a win-win.

Alas, this New Age public/private partnership on running out of steam. Interest rates have fallen about as far as they can fall and corporations have borrowed about as much as they can borrow. So the buyback binge is topping:

Continue reading

Silver Miners’ Q4’16 Fundamentals

By Adam Hamilton – Re-Blogged From http://www.Silver-Phoenix500.com

The silver miners’ stocks have had a roller-coaster ride of a year so far.  They surged, plunged, and then started surging again last week on a less-hawkish-than-expected Fed.  Such big volatility has spawned similar outsized swings in sentiment, distorting investors’ perceptions of major silver miners.  But their recently-reported fourth-quarter operating and financial results reveal the true underlying fundamental realities.

Four times a year publicly-traded companies release treasure troves of valuable information in the form of quarterly reports.  Required by securities regulators, these quarterly results are exceedingly important for investors and speculators.  They offer a clear snapshot of what’s really going on fundamentally, in individual silver miners and this small sector as a whole.  There’s no silver-stock data I look forward to more.

Continue reading

Lithium Suppliers Can’t Keep Up with Skyrocketing Demand

By Frank Holmes – Re-Blogged From http://usfunds.com

Near the extinct volcano known as Monte Pissis, high in the Andes on the Chile-Argentina border, the air is thin and animal life scarce. It’s also a prime location for lithium, the silvery-white metal used in the production of lithium-ion batteries.

Next year, Tesla plans to make 500,000 electric cars all of which will require lithium-ion-batteries

According to Sam Pelaez, an analyst on our team who recently visited the deposit, the seasonal meltdown of the snowy peaks collects lithium, sodium and other minerals from the soil and underwater hot springs, all of which flows down to the flats and settles—hence the name salt flats or, in Spanish, salares. Over long periods of time, with seasonal temperature variations, the salt builds a crust on top of the “lake,” making for a stunning landscape. Under the crust are high concentrations of lithium.

Continue reading

Why Free Trade Is Officially Dead

By Alasdair Macleod – Re-Blogged From http://www.Gold-Eagle.com

G20 Finance ministers meeting in Baden Baden last weekend agreed, on America’s insistence, to drop the long-standing commitment to free trade from the final communiqué. It is hard to know to what extent America’s position is driven by her autarkic view on world trade, or to what extent it is an acknowledgement of the fruitlessness of paying lip-service to an ideal which is never delivered. Doubtless, it’s a bit of both.

It is certainly true that finance ministers in the advanced nations have always shown a protectionist attitude towards international trade, protectionism that has intensified through attacks on American international corporations, which to a large extent can choose where to pay their taxes. The thrust of research by international NGOs, particularly the Paris-based OECD, has been to decry tax competition; however, even though it has bullied tax-havens to supply tax-related information to revenue-hungry states, it has failed to stop multinationals, armed with teams of tax lawyers, from complying with their statist demands.

Continue reading

If We Had Listened to Climate Scientists Back in 1979

By Alberto Z. Comendador – Re-Blogged From http://www.WattsUpWithThat.com

In two previous articles I made a point that seems inarguable but that advocates of emission cuts seldom acknowledge: the only worthy metric of progress in reducing emissions is the CO2 intensity of GDP, which one could also call CO2 efficiency. Looking at absolute emissions is absurd because absolute emissions depend largely or mostly on GDP and the growth thereof, which are of course unknown (especially if we’re making projections about the year 2100!).

In any case, climate policies aren’t supposed to reduce emissions by reducing GDP; sometimes advocates of emission cuts even brag about the economic benefits of their policies. So they can only work by reducing CO2 intensity, which is to say by increasing CO2 efficiency.

A second point hardly ever acknowledged is that CO2 efficiency isn’t static: it’s growing most of the time, in most places. It would have grown without the COP meetings and it did grow before the Kyoto agreement was signed – at a faster pace than thereafter.

Continue reading

How Much Profit in that Slice of Pizza?

By Dan Perkins – Re-Blogged From http://www.Constitution.com

Without carried interest perhaps hundreds of thousands of small businesses would never get started. Some people, including President Trump, say that we should tax carried interest as current income because some hedge fund or private equity managers get special tax treatment with carried interest taxed as capital gains. The hedge fund managers are not the only people who benefit from carried interest transactions. Some of you may know what carried interest is, but I think most people do not understand the term. I thought that I should define it in words people like me and you know, and then I will describe an example. By the way, if you want to see real examples of carried interest transactions in action watch “Shark Tank.”

A carried interest is when an investor agrees to help provide money for a business to start it or additional capital to run it under special terms. Generally speaking the small businessman or woman needs capital, and an investor will say, “I will lend you the money at a reduced interest rate, but in exchange for a lower cost of money to you, I want some of the stock in the company and monthly interest income. Then in the future, I want to be able to sell my stock, hopefully at a profit.” This future sale is referred to as an exit. Keep in mind there is no guarantee that the investor will get his money back.

 

Continue reading

Social Cost of Carbon Regulations Hurt the Poor, and Ignore Benefits

Anti-fossil fuel SCC relies on garbage models, ignores carbon benefits and hurts the poor


Foreword:

The Social Cost of Carbon is a key foundation for numerous Obama-era energy policies, regulations and programs. Climate alarm activists insist the SCC is rooted in solid science and economics, but it is actually little more than Garbage In-Garbage Out forecasting – and worse.

The SCC assumes fossil-fuel-driven carbon dioxide emissions are causing dangerous manmade climate change, and blames U.S. emissions for every conceivable climate-related cost worldwide. But it fails even to mention, much less analyze, the tremendous and obvious benefits of using oil, gas and coal to power modern civilization – or the undeniable benefits of more CO2 in Earth’s atmosphere helping crops and habitats grow faster and better. Finally, the SCC totally ignores the social, economic, employment and environmental costs of the regulations imposed in the name of saving the planet by converting America to a totally carbon-free energy system.


By Paul Driessen and Roger Bezdek – Re-Blogged From http://www.WattsUpWithThat.com

“If you could pick just one thing to reduce poverty, by far you would pick energy,” Bill Gates has said. “Access to energy is absolutely fundamental in the struggle against poverty,” World Bank VP Rachel Kyte and Nobel Prize Laureate Dr. Amartya Sen agree.

The UN Development Program also calls energy “central to poverty reduction.” And International Energy Agency Executive Director Dr. Fatih Birol notes that “coal is raising living standards and lifting hundreds of millions of people out of poverty.” In fact, all fossil fuels are doing so.

Continue reading