Natural gas prices today

What No One Else Has Caught... Yet

I'll make this short.
Here’s what no one else will tell you with regards to natural gas: Buy it — or miss the historical September run.
You see, it doesn’t matter what the bears say. It’s time to buy natural gas while no one’s looking.
Just as I called the $4 bottom on natural gas on May 19, I’m calling for natural gas to rally once again…
“You’ve heard it all before: Supply is outpacing demand… Our ability to horizontally drill for shale gas has made the supply picture seem unlimited... the short-term outlook is bleak,” I said back in May.
“But those are all fine examples of herd-mentality thinking. Contrarians, like us, though, are buying hand over fist.”
And we were right. Natural gas would spike well above $5 in coming weeks.
But, as expected, the bears are coming out again as natural gas pulls back. And as a result, they might miss out on the buying opportunity of a lifetime.
This may be because they don’t want to watch the charts:
Notice that every September — even in the steep 2008 sell-off — natural gas has spiked big.
And the reason for this annual spike is simple: Summer is typically the worst time for natural gas consumption, setting up the perfect trade for natural gas stocks around the month of September as consumption turns up.
Last summer, for example, natural gas suffered. But once September rolled around, natural gas roared from $2.50 to more than $5 by January 2010.
And it will do the same thing this year.
In fact I’m buying as much natural gas as I can right now in Pure Asset Trader… and I advise you to do the same.
But how do you know when exactly to pull the trigger? 
One way is to watch for MACD (moving average convergence divergence) and DMI (directional movement indicator) to crossover and agree. When they do, it's time to pull the trigger.
Let’s start with the Dow, as an example...

Take a look at the MACD and DMI on this chart of the Dow.
Notice in this chart the noticeable drop from 11,200. As soon as the Dow began to show signs of cracking at the top, DMI- (red line) crossed above DMI+ (blue line).  At the same time — and this is important — MACD (12, 26), the blue line, crossed under MACD (9).
When the two agreed, we had confirmation of a big move on the way, and the market collapsed. Used alone, these two indicators — when in agreement — are powerful tools.
Here’s how we’ve used them to find natural gas stocks.
Knowing that natural gas stocks historically pop in September, we can also use MACD and DMI to determine our exact entry price. Let’s use PetroQuest (PQ) as an example here.

Notice in the chart that MACD was already displaying a bullish signal (MACD blue line was above MACD red line). We just needed DMI+ (blue line) to cross above DMI- (red line) and we had bullish confirmation for upside.
Once we got that in late August/early September in 2009, we bought and watched the stock pop from $4 lows to more than $8 in less than two months.
A 100% gain in no time at all…
It can be that easy.
In the next few weeks, we'll be issuing a brand-new report that details more quick-gain investment opportunities... So keep an eye out on your inbox.

Stay Ahead of the Curve,

Ian L. Cooper

Energy and Capital

Is the economy improving?

WASHINGTON (Reuters) – Economic growth showed more tentative signs of improving on Wednesday as jobless benefit claims hit a four-month low last week and the international trade gap narrowed in September.

The reports followed last Friday's payrolls data showing private sectorjob growth was the best for any month since April, suggesting the economy may be beginning to pull out of its summer doldrums.

"Two months ago, three months ago there was a real growth scare and people were talking about a double dip (recession)," said Jim O'Sullivan, chief economist at MF Global in New York. "Now, the numbers are not only not showing double-dip, but they're showing reacceleration."

The number of workers filing new claims for state unemployment aid fell to 435,000 in the week ended November 6 from a revised 459,000 in the prior week, the Labor Department said. Economists had looked for claims to come in at 450,000.

The bigger-than-expected drop took a four-week moving average of claims, a better indicator of underlying trends, to its lowest level since just before Lehman Brothers filed for bankruptcy in September 2008.

At the same time, the number of people still receiving regular state benefits after an initial week of aid fell to 4.3 million in the week ended October 30, the lowest level since November 2008.

Still, analysts say the pace of job creation is not enough to pull down the United State's 9.6 percent unemployment rate.

Concern over the anemic job market was a factor behind the Federal Reserve's decision last week to pump an extra $600 billion into the U.S. economy through Treasury bond purchases.

Late Wednesday leading technology company Cisco Systems Inc (CSCO.O) reported a 19 percent jump in quarterly revenue, as more businesses upgraded their networks to handle growing Internet traffic in another sign of a recovering economy.

CHINA IMPORTS STILL NEAR RECORD

In a separate report, the Commerce Department said the U.S. trade deficit narrowed more than expected in September to $44.O billion, despite near record imports from China.

A narrower trade deficit is positive for U.S. economic growth since it suggests more demand for U.S. production.

Financial markets, however, largely shrugged off the data. Worries over Ireland's debt load helped push the U.S. dollar to one-month high against the euro and the yen early, and stocks ended little changed, as did U.S. Treasury yields.

Economists said the international trade report suggested the U.S. economy grew a bit more swiftly in the third quarter than the 2.0 percent annual pace reported late last month.

Many also said the trade deficit, which cut into growth last quarter, could be a positive in the final three months of the year. O'Sullivan said the drop in jobless claims suggests growth could pick up to 3.0 percent as the year draws to a close.

U.S. exports rose slightly in September, a third consecutive monthly gain. Imports fell 1.0 percent.

The rise in exports and decline in imports suggests a drop in the value of the U.S. dollar "might be beginning to weave its magic," said Hugh Johnson, chief investment officer of Hugh Johnson Advisors in Albany, New York.

A weaker dollar helps U.S. exporters by making American products cheaper in world markets, at the same time increasing the cost of foreign goods in the United States.

But continued high imports from China cast a shadow over the data. U.S. imports from China totaled $35.0 billion, just barely below a record set in August, while U.S. exports to the country declined fractionally to $7.2 billion.

The resulting $27.8 billion trade deficit with China, by far the largest the United States had with any tradepartner, could revive chances for the Senate to vote on legislation punishing some Chinese imports for Beijing's currency practices.

The House of Representatives approved the bill in September in the belief that China deliberately undervalues its currency to give Chinese companies an unfair trade advantage.

While many observers believe the bill will fall by the wayside following the November 2 congressional elections, some think its fate depends on whether President Barack Obama can make progress on the issue at a Group of 20 summit that gets underway in Seoul on Thursday.

The U.S. trade gap with China has swelled to $201.2 billion in the first nine months of 2010, compared to $165.9 billion in the same period in 2009.

Washington is pushing Beijing to let its currency rise more quickly in value and take other steps to spur domestic demand. On Wednesday, China ordered its banks to put more money aside as required reserves, a move that could slow Chinese growth.

(Additional reporting by Mark Felsenthal in Washington and Ryan Vlastelica in New York, Editing by Andrew Hay)

Source

Planned economy

A planned economy is an economic system in which government decisions are made by central state economic managers who determine what sorts of goods and services to produce and how they are to be priced and allocated, and may include state ownership of the means of production. Since most known planned economies rely on plans implemented by the way of command, they have become widely known as command economies. Any economic system that is centrally-planned by a government is commonly referred to as economic statism. To stress the centralized character of planned economies and to contrast the term with decentralized planning in a market economy, a more specific term, centrally planned economy, is also used. Although a planned economy may include exchanges of money, these exchanges are less important in allocating resources than the central plan.


Some advocates of a centrally planned economy claim the following advantages. The government can harness land, labor, and capital to serve the economic objectives of the state (which, in turn, may be decided by the people through a democratic process). Consumer demand can be restrained in favor of greater capital investment for economic development in a desired pattern. For example, many modern societies fail to develop certain medicines and vaccines which are seen by medical companies as being unprofitable, but by social activists as being necessary for public health. The state can begin building a heavy industry at once in an underdeveloped economy without waiting years for capital to accumulate through the expansion of light industry, and without reliance on external financing. Second, a planned economy can maximize the continuous utilization of all available resources. This means that planned economies do not suffer from a business cycle. Under a planned economy, neither unemployment nor idle production facilities should exist beyond minimal levels, and the economy should develop in a stable manner, unimpeded by inflation or recession. A planned economy can serve social rather than individual ends: under such a system, rewards, whether wages or perquisites, are to be distributed according to the social value of the service performed. A planned economy eliminates the dependence of production on individual profit motives, which may not in themselves provide for all society's needs.


Taken as a whole, a centrally planned economy would attempt to substitute a number of firms with a single firm for an entire economy. As such, the stability of a planned economy has implications with the Theory of the firm. After all, most corporations are essentially 'centrally planned economies', aside from some token intra-corporate pricing (not to mention that the politics in some corporations resemble that of the Soviet Politburo). That is, corporations are essentially miniature centrally planned economies and seem to do just fine in a free market. As pointed out by Kenneth Arrow and others, the existence of firms in free markets shows that there is a need for firms in free markets; opponents of planned economies would simply argue that there is no need for a sole firm for the entire economy.

What is the USA debt

The U.S. debt is over $13 trillion, and is the sum of all outstanding debt owed by the Federal Government.

Nearly two-thirds is the public debt, which is owed to the people, businesses and foreign governments who bought Treasury Bills, Notes and Bonds.

The rest is owed by the government to itself, and is held as Government Account securities. Most of this is owed to Social Security and other trust funds, which were running surpluses. These securities are a promise to repay these funds when Baby Boomers retire over the next 20 years. (Source: U.S. Treasury, Debt to the Penny;Debt FAQ)

The Size of the U.S. Debt:

The U.S. debt is the largest in the world. How did it get so large? Purchasers of Treasury Bonds still reasonably expect the U.S. economy to recover enough to pay them back. For foreign investors like China and Japan, the U.S. is such a large customer it is allowed to run a huge tab so it will keep buying exports. (Source: CIA World Factbook)

Even before the economic crisis, the U.S. debt ballooned 50% between 2000 - 2007, growing from $6 - $9 trillion. The $700 billion bailout helped the debt grow to $10.5 trillion by December 2008.

The U.S. Debt Level:

The debt level is the debt as a percent of the total country's production, or GDP. Total economic output, or GDP, is $14.6 trillion (Q1 2010). The debt is now 89% of GDP, up from 51% in 1988. (Source: U.S. Treasury, Debt to the Penny; Bureau of Economic Analysis)

Interest on the debt was $383 billion in Fiscal Year 2009, down from its peak of $451 billion in Fiscal Year 2008, thanks to lower interest rates. (Source: U.S. Treasury, Interest)

The most recent budget forecast from the Office of Management and Budget (OMB) showed the budget deficit at $1.3 trillion in FY 2011, more than the $1.17 trillion deficit for FY 2010, but down from the $1.7 trillion deficit for FY 2009. This is a result of the economic stimulus package, the 2008 government bailout measures and $800 billion a year Security spending. The deficit is also caused by reduced income, thanks to the EGTRRA and JGTRRAtax cuts and the Alternative Minimum Tax patch. (Source: OMB, Federal Budget Deficit)

How Did the Debt Get So Large?:

Government debt is an accumulation of budget deficits. Year after year, the government cut taxes and increased spending. In the short run, the economy and voters benefited from deficit spending. Usually, however, holders of the debt want larger interest payments to compensate for what they perceive as an increasing risk that they won't be repaid. This added interest payment expense usually forces a government to keep debt within reasonable limits.

The U.S., however, was the beneficiary of two unusual factors. First, the Social Security Trust Fund took in more revenue through payroll taxes leveraged on Baby Boomers than it needed. Ideally, this money should have be invested to be available when the Boomers retire. In reality, the Fund was "loaned" to the government to finance increased deficit spending. This interest-free loan helped keep Treasury Bond interest rates low, allowing more debt financing.

However, it is not a real "loan" since it can only be repaid by increased taxes when the Boomers do retire.

Secondly, foreign countries increased their holdings of Treasury Bonds as a safe haven, also keeping interest rates low. These holdings went from 13% in 1988 to 28% in 2009. (Source: U.S. Treasury report ”Petrodollars and Global Imbalances”, February 2006)

Even during the recession, countries like China and Japan increased their holdings of Treasuries to keep their currencies low relative to the dollar. For more, see How China Affects the U.S. Economy.

Of the total foreign holdings ($3.9 trillion), China owns $895 billion and Japan owns $785 billion. The U.K., Brazil and the oil exporting countries own about $100 - $280 billion each. The Bureau of International Settlements suspects that much of the holdings by Belgium, Caribbean Banking Centers and Luxembourg are fronts for various oil-exporting countries or hedge funds that do not wish to be identified. (Source: Foreign Holding of U.S. Treasury Securities)

How The U.S. Debt Affects the Economy:

Over the next 20 years, the Social Security funds must be paid back as the Baby Boomers retire. Since this money has been spent, resources need to be identified to repay this loan. That would mean higher taxes, since the high U.S. debt means further loans from other countries have been maxed out. Unfortunately, it is most likely that these benefits will be curtailed, either to retirees younger than 70, or to those who are high income and therefore theoretically don't need Social Security.

Secondly, many of the foreign holders of U.S. debt are investing more in their own economies. Over time, diminished demand for U.S. Treasuries will increase interest rates, thus slowing the economy.

Furthermore, this lessening of demand is putting downward pressure on the dollar. That's because dollars, and dollar denominated Treasury Securities, are becoming less desirable, so their value declines. As the dollar declines, foreign holders get paid back in currency that is worth less, which further decreases demand.

The bottom line is that the large Federal debt will ultimately slow the U.S. economy.

Source

National Debt Road Trip

Agein & agein: the usa debt

NEW YORK, Nov 10 (Reuters) - The Federal Reserve's planned bond purchases will reduce dollar-denominated debt supply next year and could drive corporate and other credit spreads tighter as well as push U.S. Treasury yields back to historical lows.

Fixed income and other financial markets have been roiled in the past 24 hours by worries the Fed will succeed only too well at its goal of fueling inflation. However, the new round of Fed buying has not even begun.

In total, the Fed said last week it would buy more than $800 billion in Treasuries, including re-investment of maturing debt in its existing portfolio. The plan is aimed at rekindling economic growth by driving down yields and encouraging investments that will spark private lending.

Analysts at banks including Credit Suisse, JPMorgan and RBS (LSE: RBS.L - news) Securities predict the purchases will cause the overall supply of fixed income assets available to investors to dwindle.

When accounting for the Treasuries purchases, the banks predicted the overall supply of fixed income assets, which includes corporate bonds, municipal, mortgage-backed and other debt, will fall by more than 40 percent in 2011, even as demand for fixed income remains strong.

RBS expects net supply of high quality dollar-based fixed income assets in 2011 to total around $1.35 trillion, which after accounting for Fed purchases of $660 billion would leave $690 billion for other buyers. Buying by foreign central banks, however, may tie up the bulk of remaining purchases, it said.

"You've taken out all the supply of high quality dollar assets before private investors have even opened the door," said John Briggs, U.S. interest-rate strategist at the firm.

"This is what the Fed wants, to drive Treasury yields lower and drive investors to alternative assets. There's not enough supply to go around with the Fed purchases so investors need to reach for yields," said Briggs, in Stamford, Connecticut.

Foreign official institutions may buy around $540 billion in Treasuries next year, RBS said. In that case only $150 billion would be available to other investors, it said.

SUPPLY TO SINK

Net issuance of other fixed income asset classes is unlikely to offset the Treasury purchases.

Credit Suisse expects net fixed income debt supply to fall 46 percent to $822 billion, from around $1.5 trillion in 2010.

Supply of U.S. agency mortgage debt is expected to jump to $559 billion, after seeing a loss of $86 billion in 2010. However this growth will be more than offset by the drop in Treasury and US agency supply, Credit Suisse said. Sales of agency mortgages may rise though net issuance of corporate, asset-backed and municipal debt is also likely to be largely unchanged, it added.

JPMorgan projects that net issuance of Treasuries, high grade and high yield bonds, build America municipal sales, emerging market corporates and structured assets will drop 40 percent to $600 billion in 2011, from around $1 trillion in 2010. This figure has dropped from $1.9 trillion in 2007, the bank said.

Companies are expected to continue to be among the largest gainers from the Fed's purchases, as dwindling supply will allow them to sell debt at even lower costs.

"In the short term the supply of bonds is going to dwindle and the yields are going to go down and the price of credit for issuers is going to go down," said David Rubenstein, chief financial officer and general counsel at credit hedge fund BlueMountain Capital Management in London. "It becomes an artificially cheaper source of capital than it otherwise would be."

Loose credit markets, however, may encourage companies to increase leverage in order to favor other investors such as shareholders and allow some companies to access capital that they would not otherwise have access to without the stimulus.

"At some point the artificial price support will run out and the companies that couldn't otherwise have raised debt at those coupon levels are going to suffer and their bonds are going to suffer," said Rubenstein. "The risks are that when the stimulus goes away, what's going to happen to the price of credit at that time?"

TREASURY YIELDS TO STAY LOW

The Fed's purchases are also likely to keep a cap on short to intermediate maturity Treasury yields, and could send some yields even lower as investors extend duration.

"A lot of money managers are already underweighting the front end of the curve, very few money managers are fully invested in two- to three-year maturities because the yield there is so low it just doesn't make sense," said Igor Cashyn, Treasury and TIPS analyst at Morgan Stanley (NYSE: MS - news) in New York.

RBS and Morgan Stanley are among banks that project benchmark 10-year Treasury yields will drop to around 2.25 percent, from their current 2.6 percent. Credit Suisse expects the notes will trade in a range between 2.25 or 2.8 percent.

"It's difficult to be short in this environment, that's the key takeaway. Its difficult to be short Treasuries with the Fed buying a huge bunch of them," said Ira Jersey, interest rate strategist at Credit Suisse in New York.

Source Yahoo! Finance

The USA debt

Reagan got elected by telling the country the debt was "out of control." Compared to national income, it was the lowest in 50 years. He probably didn't know. But his supply-side economists did. They lied to America.

In 1981 Reagan's supply siders wrote the tax cuts for the rich and his budgets. The Senate was Republican, and Reagan got the Southern Dems in the House to vote for him. All Republicans and a few Dems voted for the budget. The national debt had its worst year since 1945. The next year it got worse, and for 20 out of 20 years, the supply siders raised the debt relative to our ability to pay.

Source 

Economy depression

The number of Americans filing for first-time unemployment benefits dropped to the lowest level in three months last week, according to a government report released Thursday.

There were 434,000 initial jobless claims filed in the week ended Oct.23, the Labor Department reported.

That was down 21,000 from a revised 455,000 in the previous week and the lowest level since the week of July 9.

Economists surveyed by Briefing.com had forecast new jobless claims to rise to 458,000.

The four-week moving average of initial claims, calculated to smooth out volatility, totaled 453,250, down 5,500 from the previous week's revised average of 458,750.

Jobless claims have been stuck in a tight range since last November, struggling to break out of the mid- to upper-400,000 range and even topping 500,000 in August.

So a reading in the lower-400,000's is a welcome improvement, said Tim Quinlan, economic analyst at Wells Fargo.

"We've been stuck in this band between 450,000 and 500,000 for most of 2010, so to break through that and get to 434,000 is definitely a step in the right direction," he said. "That said, we're still not yet at a level that would be consistent with private sector growth in employment."

Desperate for a holiday job

Quinlan said a level below 400,000 is typically associated with payroll growth, but that claims are likely to continue inching lower as employment picks up.

"One week does not a trend make, but the 4-week average is continuing to come down as well," he said. "We think we're probably on the verge of turning the corner to experiencing more broad-based job growth, though it's not going to be fast enough to bring us back to pre-recession levels right away."

Continuing claims: The number of people continuing to file unemployment claims for a second week or more fell to 4,356,000 during the week ended Oct. 16, the most recent data available. That's down 122,000 from a revised 4,478,000 the week before.

Economists were expecting continuing claims to edge down to 4,428,000.

The four-week moving average for ongoing claims fell by 38,500 to 4,447,250 from the preceding week's revised 4,485,750.

State by state: Jobless claims in 17 states fell by more than 1,000 in the week ended Oct. 16. Claims in California dropped the most -- by 13,701 -- which the state attributed to fewer layoffs in the service industry. Claims in North Carolina dropped 6,607, and claims in New York fell 6,382.

Source CNNMoney

Is the economy getting better?

Canada's economy rose 0.3 per cent in August following a 0.1 per cent drop in July, helped by oil and gas extraction, wholesale trade and manufacturing.

The figures released by Statistics Canada were in line with analysts' expectations.

The federal agency also said increases were recorded in the finance and insurance sector, construction and retail trade. Utilities and forestry decreased, while public-sector output was unchanged.

Mining and oil and gas extraction rose 0.5 per cent, wholesale trade rose 1.1 per cent and manufacturing grew 0.5 per cent.

The finance and insurance sector advanced 0.6 per cent, construction was up 0.4 per cent and retail trade edged up 0.1 per cent in August.

Sourse CBC