By William K. Black (Cross-posted from Benzinga.com) Presidential nominees of either U.S. party can secure economic advice from any economist in the world. This makes it all the more amazing and sad that they choose economists with track records of … Continue reading →
The dark and dirty job of pointing out that the NAHB Housing Market Index present conditions index is up 11 points versus last April and traffic is up 5 points falls to me, I guess. The mainstream media and the NAHB itself has already widely reported only the bad news that April was down versus March…
Janet Yellen, Bernanke’s soul mate (and mouthpiece) spoke last week. She argued that the Federal Reserve’s Zero Interest Rate Policy (ZIRP) should be maintained for another three years.
Tim Geither, Obama’s side kick, had a completely different take …
You don’t realize it but there’s a fortune in your wallet right now.
What? You don’t see it? That’s because you’re looking in the wrong wallet.
Take out your cell phone. In your hand right now is your financial future if you want to get rich.
Your smartphone is about to become your new “digital wallet.”
When it comes to your credit, your investments, your banking relationships, how you shop, how you are marketed to and how you pay for everything, your new digital wallet will be at the center of it all.
Understanding what kind of hardware your wallet takes, who delivers your digital services, and understanding your relationship to digital money will be the keys to making a bundle off of it all.
In fact, as the race to shape the future of e-commerce and e-payments develops, fortunes will be made by investing in the companies destined to be big winners in this fast-growing trend.
With that in mind, here’s a snapshot of what’s here now, where the trend is headed and how you can ride this phenomenal wave all the way to your own private beach.
The Rise of the Digital Wallet
First, you have to realize that you don’t use a lot of cash-even though you think you do.
The truth is the whole world is using less and less cash.
On the low end, Swedes transact commerce in cash only 3% of the time. Europeans pay with cash 9% of the time. And Americans pay in cash only 7% of the time.
The rest of the time we’re using credit cards, debit cards, prepaid cards, checks, coupons, the Internet, and increasingly, cellphones.
There are several reasons why we’re using cash less.
This YouTube video was just brought to my attention. It’ a compilation of Bernankenstein’s greatest hits. It caused me to wonder why there are no videos of the things this deluded lunatic has gotten right. And what does it say about our society that anyone takes him seriously.
The devil is in the details.
According to various reports, Delta is in talks to purchase the idled “Trainer” refinery facility in Philadelphia with assistance from JPMorgan Chase as its financier.
On the surface, the deal seems to make perfect sense. Jet fuel is very expensive.
Delivering jet fuel to New York Harbor would have cost you $1.94 a gallon five years ago. Today it’s $3.12, or 60.82% higher according to Bloomberg.
Owning a refinery would be a good way to lock up supplies and keep fuel costs down in today’s world.
It’s so smart I’d watch for United, British Airlines and Lufthansa to do the same in short order. Perhaps even the regional carriers will get in on the action at some point, too.
All are “route heavy” on the Eastern U.S. seaboard where many refineries have to pay for more expensive imported Brent crude because they can’t access less expensive West Texas blends or alternatives coming from North Dakota shale fields.
But what the frack?
Ordinarily, airlines would simply hedge price increases like this in the futures markets.
So there must be something else at work that would make Delta and presumably other carriers so desperate they’re willing to enter the refinery business. After all, it’s a tough business — even for oil companies.
Two thoughts come to mind specifically about Delta: a) its geographic concentration, and b) its credit rating, which stinks, may be so bad the airline can’t cost effectively hedge in the open markets.
Few people realize this but several major oil companies, including Sunoco, Hess Corp, Valero and ConocoPhillips — just to name a few — are planning to close, idle or otherwise shut down refineries on the east coast.
That would remove 51% of U.S. East Coast refinery capacity from the equation by some accounts.
This means that delivering fuel into the northeast corridor’s airports is going to become especially problematic and more expensive.
In that sense, one could argue that Delta is taking prudent steps to secure its own supplies while building in defenses against higher prices ahead.
I can’t find fault with that given that every penny increase per gallon costs Delta $40 million more on an annualized basis, according to Bloomberg. I would be thinking along the same lines.
But I don’t “buy” it even though the airline spent $11.8 billion on fuel last year and understandably wants to save money.
Here’s where it gets interesting (and I get suspicious).
Most people seem to have a hard time understanding why the markets do what they do.
The only reason I don’t is that I’ve been trading professionally for 30 years.
Not that I “got it” when I started out. I didn’t. I had to learn. And I learned much of what I know the hard way. I made a lot of mistakes. I studied my mistakes, I still do, just as much as I study what moves markets and what I get right.
I’m always learning. That’s because everything changes. You have to always take in new data, mesh it with recent data, layer it over the past, and not ever think you know for sure what’s going to happen.
So, how do you do it? How do you understand what’s going on with different markets?
Here’s how I do it (and get it right a lot)…
It’s First and Foremost About the “Big Picture”
I synthesize all the big goings-on, all the headline market-moving news and data points, and I watch and “listen” to how the markets react.
Money moves markets, but psychology moves money.
Markets are living things. They have feelings; their reactions are a direct reflection of the psychological impact reflected in the buying and selling of traders (first) and investors (distantly second) to the goings-on that participants believe will affect the decision-making of other market participants.
Tags: Google (Nasdaq: GOOG), google stock, Google stock split, tech stocks
Every time one of my articles that recognizes the currently bullish trend in some economic indicator is posted over on Zerohedge, it gets thousands of views. But those posts also bring forth a shitstorm of righteous indignation from the permabear crowd, of which, ironically I am one (more or less). I do recognize cyclical bull…
By William K. Black The Wall Street Journal published a self-revealing news article on Tennessee’s recently adopted law (modeled on a template created by the Discovery Institute – a Christian group whose ultimate goal is preventing the teaching of the … Continue reading →