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MFA Financial, Inc. Message Board

nitrene 10 posts  |  Last Activity: 12 hours ago Member since: May 9, 2002
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  • I've owned all the major US airlines for about 2 years now and they are all up a lot.

    My question is how much of the gains since July are related to crashing crude prices? And if crude goes back up to say $60-$70 will the airlines go down hard?

    I'm sure demand won't be affected just because oil goes back up although its always difficult to assess it precisely.

    TIA

    Sentiment: Strong Buy

  • Reply to

    compare

    by tundra0235 Jan 7, 2015 7:15 AM
    nitrene nitrene Jan 27, 2015 2:15 PM Flag

    The safest is IBB since it has the most large caps.
    XBI is very similar to IBB.
    FBT has the most growth potential but the greatest volatility.

    If you want the most leverage buy BIB -- which is essentially the dual long IBB.

    Sentiment: Strong Buy

  • nitrene nitrene Jan 27, 2015 2:08 PM Flag

    FBT seems to constantly outperform XBI & IBB. IBB seems to the dog of the three. I think IBB has too many of the megacaps so the growth is limited, I guess.

    I personally own BIB (+2X IBB). I wish there was a leveraged version of FBT. That would be the best one to own but extremely volatile.

    Sentiment: Strong Buy

  • Reply to

    S&P WILL HIT 12000 TO 15000 RANGE

    by rocks2sea Jan 7, 2015 5:57 PM
    nitrene nitrene Jan 8, 2015 6:13 AM Flag

    You're right about those things, however the main difference is that there were places for the global investors to put their money during the 1989/1990 crash in Japan so Japan crashed and the other markets kept rising after the 1989 crash.

    There is no where to hide anymore so if you don't have any faith in the Banking system what do you with your money? You buy real estate, jewelry, fine art, stocks, etc. This is exactly what the global elite have been doing. 90% of the real estate recovery in the US is due to wealthy internationals buying up real estate. The price of diamonds and high end art have skyrocketed because the wealthy have no faith in governments anymore.

    By the way if you think commodity deflation is over just wait. I predict the energy complexes will crash another 50-60%. This will create chaos and likely revolutions in all the commodity exporting states like the OPEC countries, Canada, Australia, Norway, US, etc.

    When the global crash finally comes it will be worse than the Depression of the 1930s and the debt markets will implode due to Sovereign defaults.

    I don't think in the end there will be any safety trade since even US debt values could collapse.

    Sentiment: Buy

  • Reply to

    S&P WILL HIT 12000 TO 15000 RANGE

    by rocks2sea Jan 7, 2015 5:57 PM
    nitrene nitrene Jan 8, 2015 5:49 AM Flag

    That is not entirely accurate. Japan crashed in 1989 hard and hasn't recovered because of their failure to write down the bad debt from the Banks which persists even to today. In addition in 1989 there were alternatives to global capital flows and so the investors just moved their money to other Asian countries , Europe and the US -- which were not in a deflationary depression. You also have the Japanese xenophobia of immigrants which produced a demographic time bomb. See also the 40% 'grass-eaters' phenomenon.

    You're right that low interest rates props up asset values due to financial repression (real negative interest rates). Germany now charges you money (negative interest rates) for depositing your cash at the Banks.

    The thing is that low interest rates doesn't create inflation an the traditional sense of the the Fed values it -- it doesn't create wage inflation which has a knock on effect to every thing in the chain (wage inflation -- higher input cost -- higher end cost to consumers). There may be food inflation caused by the commodity supercycle but that pretty much ended in 2012. Since then all major commodities have been crashing hard. Oil is just the latest to crash. I'm sure Natural Gas and the Agriculturals will crash next.

    No, the general trend is not inflation but rather deflation. Ask yourself is the US government more likely to print the trillions to pay back the bond holders or are they likely to default? Every profligate empire has defaulted. Thus it is deflationary.

    Is the market overvalued? Yes, but it is meaningless since financial repression reigns globally investors are using the markets as a bank account. Why are Utilities, REITs, and other high dividend paying stocks up the most? Because getting 3% in bluechip US companies is better than getting 0.05% at the Bank.

    Markets will go higher until the poor European countries start to default which will likely spread to the rest of Europe and eventually the US.

    Sentiment: Buy

  • I guess to a degree all MLPs are leveraged but I assume some have more access to capital than others. It seems like of all the MLPs I own VNR, BBEP & LINE are down the most -- about -70% from the highs. That must mean they have a lot more leverage.

    Most of the other MLPs I own like MWE, PAA, EEP, etc are barely down or at most down about 10-15%.

    Sentiment: Hold

  • Reply to

    Please enlighten me.

    by fanyixin Dec 12, 2014 7:10 AM
    nitrene nitrene Dec 12, 2014 7:43 AM Flag

    Because the Oil volatility index (^OVX) has been skyrocketing and further Oil price collapse will bring with it hedge fund blow ups which will likely trigger margin call selling at the trading desk. This is exactly what happened in early October.

    I have to imagine that WTI Crude at $40 will blow up a lot of funds and even some countries especially the weak OPEC nations.

    Sentiment: Buy

  • nitrene nitrene Dec 12, 2014 7:33 AM Flag

    No Greece and Venezuela are too small to make a difference on a global scale. There will be blow ups as you stated but it likely start in one of the weak European countries likely one of the PIIGS or maybe even France since it is essentially bankrupt.

    Of course the OPEC nations could all go belly up as well if demand doesn't return soon -- this includes Saudi Arabia, Russia and even Norway. Its pretty scary since some Oil bears have been calling for $40 or lower oil. If that occurs you've could some serious problems which would lead to next world war.

    Anyway I personally doubt the S&P index will go down more than 3-4% from here. The buy-the-dippers will be back when the oil shock dissipates at least temporarily. I think anything less than a full blown recession will be required to careen this market downwards.

    Remember that the US is really the only growing economy left from the G20 so you have all this global money pouring into the US markets -- UK & Germany are also growing slightly or at least they aren't in a recession like the rest of Europe. The US real estate markets have been propped up by the global wealthy not the US middle class.

    Sentiment: Buy

  • Reply to

    TVIX TO SOAR TOMORROW POSSIBLY 4

    by adventurguy Dec 12, 2014 12:22 AM
    nitrene nitrene Dec 12, 2014 6:22 AM Flag

    I doubt the S&P 500 index goes below 1980 which would imply maybe a 40%-50% move higher in TVIX. So best case would be about $4.50 on TVIX.

    Sentiment: Buy

  • nitrene nitrene Dec 12, 2014 6:16 AM Flag

    What will be the trigger? I don't see it. You've got QE at a global scale. Money pumping at an epic scale.

    It won't happen until the recession in the US starts probably in about 4 or 5 quarters.

    Sentiment: Hold

MFA
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