That is the rumor on the street that Putin has been a large seller of gold to defend the currency. Gold is a relatively liquid asset, so it makes sense. But why sell Gold if you are raising rates to 17%? Putin went all in on that one.
Dominoes are starting to fall...Credit Markets coming under pressure, liquidity drying up, Russia imploding. Any spike in the ruble will be short-lived! Raising the benchmark rate to 17% will devastate what is left of the Russian economy. NUTS!!! The world economy is much more leveraged than most realize.
I understand Russia is doing this to defend their currency which has been in free fall but that guarantees a very severe recession in 2015, which will serve only to weaken the currency further. Now the former Soviet Union economy is getting slammed by collapsing oil prices and dramatically rising interest rates. I just don't see how this ends well. Russia could very well default on it's debt and that will send the credit markets reeling globally.
What I was hoping would not happen is quickly coming into play. The Junk Bond market is being bought down by collapsing oil prices, the contagion in Russia, Venezuela, et cetera. Now I am even seeing stress in investment grade corporates! I shorted the S&P 500 a few weeks ago but that is being offset by my losses in Gold. Very surprised Gold is not catching a bid in these turbulent times. But I guess everything is sold in a credit market event, lack of liquidity. Very telling the money center banks got hit today, not a good sign. This could become very very ugly. I suspect the European Central Bank will announce QEs shortly, not sure it will do much good. I am still keeping my eye on 3 symbols JNK, HYG (junk space) and RSX Russian ETF. Good barometers.
Any time I see the term "LOL" embedded in a yahoo message post I realize immediately I am dealing with a simpleton buffoon. What this fool fails to recognize is Sprint's free cash flow has been steadily falling each qtr and their revenues have resulted in large losses, the number of customers has been falling, the debt is rated JUNK! And now that desperate Son has entered into a price war with much larger competitors with deeper pockets, investment grade ratings, access to the credit markets, possessing superior, comprehensive networks, well that spells even larger losses for Sprint in the coming qtrs. Hence the reason Sprint stock has dove an almost unbelievable 64% in the past 12 months alone!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I actually believe the recent precipitous fall in Gold Miners is a positive for ABX, the reason being it will speed up the consolidation process in the sector with the smaller players either closing their doors or being swallowed up by bigger players for dirt cheap prices. You could also have two large players merging.
The demand supply dynamics for gold is so much different than oil, where the world is presently awash in crude with many of the smaller players continuing to produce because they are hedged, gold is the opposite in many regards, with actual gold supply not keeping up with demand. A lot of Gold holdings are in paper only, also keep in mind there is no fracking revolution with gold. Mining for gold is a labor intensive, heavy going process, which can be quickly slowed or shut down keeping demand and supply in check.
The crisis in Russia, the slowing world economy, will only serve to increase the money printing globally, intensify the currency war, this will eventually be a huge positive for gold. Combine this fact with the above mentioned well contained supply demand dynamics, I believe ABX trading below $11 is a gift.
The bar is set quite high for the Fed to reinstate QE, it would be an admission that QE does not work and that QE is an endless medication without end. The U.S. Fed was hoping they could hand the ball off to other nations to do their dirty work, such as Japan, Europe and now China. We are clearly in the midst of a currency war and all that implies.
As I suspected the Junk Bond debacle brought on by the collapse in oil is starting to cross over to investment grade debt, liquidity is becoming a problem globally. People can't seem to comprehend it is leveraged oil that is negative, not falling oil prices alone. A lot more banks have exposure to this debacle than they are letting on. This is starting to spread. Russia is in big, big trouble, and they have lots of debt outstanding.
It will be interesting to see how the equity market closes today. The Money Center Banks are very good at pumping these markets up at the end of the day buying S&P futures and JNK and HYG have come off their lows.
What I see is a potential huge problem, thus far it has translated into a mild correction for the larger indexes. But we are definitely near a tipping point. When it goes, it will go hard to the downside. Not sure a Fed QE announcement would do much good in that scenario.
Whigglee, the depths of your denseness is truly remarkable and apparently bottomless, much like Sprint's stock price. You obviously question my Sprint short position and yet if I were to now disclose my price points that will somehow relieve your skepticism. Hopefully even you can comprehend the stupidity of that query. Example: I borrowed shares and shorted Sprint Jan 7, 2014 $10.05. Your response: Okay, now I believe you. If you don't trust that I am shorting Sprint does me typing a response on a yahoo message board mean anything? Rather a pointless pursuit. I am however currently short Sprint (sold half the position for a handsome profit yesterday) moved some of those winnings to add to my S&P 500 short (SDS). I have also been shorting a number of ETFs in the fossil fuel space. Sold out of a large BTU short when it broke 8. Created a short position in a few of the money center banks today. What you need to focus on Whigglee are your huge Sprint losses and your severely broken logic. I find your posts quite comical and weak.
You have to believe some of these Sprint Pumpers are paid, they spend nearly all their days typing their NONSENSE on this message board. I realize their arcane drivel is of very poor quality but what else could possibly be their motivation other than supplementing their evening pizza delivery jobs?
I was curious also, his incoherent grunts are certainly not English. Need to bring in a codebreaker on this one. I suspect it is most like a medication issue.
Excellent post! I just dropped by to see if the resident cheerleaders were still waving their pom poms and sure enough there was the Delusional Trinity (Greek, Whiggle, Moe) spewing their NONSENSE.
It doesn't take a great deal of critical thinking skills to comprehend it was an extremely poor decision by Sprint to enter into a price war with entities that have much deeper pockets, a much more comprehensive, superior network, access to the credit markets. Truly a desperate measure with severe consequences. The horrific fall in Sprint's share price clearly remains in the early stages.
Due to Sprint's JUNK debt rating we know Sprint cannot access the debt market at an acceptable interest rate to fund their operations and build out their inferior network, nor can Sprint afford to issue more shares trading well below 5. Free cash flow continues to plummet and quarter after quarter of huge losses are starting to take a devastating toll. The question becomes does Son continue to pour good money after bad funding this PIG or does he accept he made a colossal blunder in logic and cut his losses? Even if he chooses the former the funds are limited and time ain't on his side.
I realize this reality will not reach the stunted minds and dark hearts of the arrogant trio who have fallen in love with a loser but I feel joy in my heart that at least I made the effort to save them from themselves. They seem so, so angry and agitated but that is to be expected due to the weight of their huge financial losses. If only they chose to pull themselves away from the computer and take a nice long walk instead, reevaluate, come to terms with their severe lack of critical thinking skills, have a nice cup of hot chocolate!
I thought the so-called experts claimed falling oil prices were a net positive? They could not be more wrong! Keep an eye on symbols JNK and HYG, as they go so does the market. I noticed big pharma is starting to break down as I predicted.
One of the many consequences of Central Banks around the globe employing various forms of QEs, supplying an overabundance of liquidity is the misallocation of capital. This is exactly what is now happening in the commodity space, the housing market early 2000's. The excess liquidity found homes in projects that made little economic sense, pushing supply well ahead of true demand. Hence the reason oil prices are now tumbling and many of the dubious loans made in this industry are now under pressure.
The same can be said for BTU. Coal consumption in the United States has been in a downward trend for quite some time so it made sense for BTU to look towards Asia, specifically China, to lift sales and revenues. BTU entered into large costly projects in Australia, leveraged their balance sheet in the process, to take an advantage of perceived growth and energy needs of the largest populated country in the world. Unfortunately China created a false economy via their unsustainable govt spending following the financial crisis of 2008 and now they are slowing quickly proving BTU's assumptions wrong, their projects financed by debt in trouble.
Leverage and poor decisions are a deadly combination for stocks, this is why BTU's fall has been so dramatic. Although China's stock market has been up dramatically of late, that is only because China's Central Bank recently added more liquidity. China's economy continues to slow due to their deflating real estate bubble which ironically was caused by too much liquidity.
Plain to see the insanity of Central Banks follies, adding more liquidity to resolve the problem of overcapacity
caused by too much liquidity. I do believe this game has just about run it's course however because the recent bubble created in the energy sector is quite large and leveraged, much like the housing bubble. It not only composes much of the junk debt outstanding but places entire nations such as Russia in peril, the credit markets in danger.
Every seller had a buyer for all companies that eventually went bankrupt, up until it was taken off the exchange of course. What is your point?
Sphincter989, amortization is a lengthy "expense" process, and has nothing to do with the subject of fair value accounting. Marking assets to present value is rarely followed especially in a distressed market, that is moving quickly. Do you ever tire of being wrong? And why did you lie about being a CPA?
Sphincter989 is too dense, too stubborn, too bellicose to take the sage advice of others, frankly he is a buffoon. Hence the reason the fool has ridden BTU down to these levels adding all the way. But I have my doubt the clown even has money to invest, i picture him in a mobile home watching fox news in his underwear all day. What a terrible image that is.
Money Center Banks have been manipulating the equity market quite some time. It is very much in their interest to keep the equity market strong. Hence the reason they buy the S&P futures near the close, works very well on low volumes days. But the Money Center Banks cannot manipulate the debt market, much too large and out of their control and the debt markets are pointing south. Money Center Banks might win today propping up the market at the close, but they are fighting a losing battle.
The valuation placed on assets and liabilities are quite arbitrary and subjective. It is in the interest of corporations to overstate their net worth, especially in difficult times. We saw this fact rear it's ugly head during the financial crisis of 2008, banks were fraudulent in this regard and were eventually bailed out by the Taxpayers.
You see it every time a stock is getting clobbered, a poster pulls out the old book value argument.