Natural Gas Futures Remain Under Pressure

Natural gas prices continue to drop, even during the winter heating season when demand typically increases sharply. As the economy weakens, many industrial companies that run their factories on natural gas are scaling back operations, decreasing demand for the commodity. Natural gas prices today are 30% lower than they were at the nadir of natural gas prices before the commodity boom began last year. Natural gas prices have dropped nearly 70% from the apogee reached in July, just 5 months ago. Shouldn't we ask the gas company to start giving rebates to rate-payers, or at least roll back their latest rate increases that they imposed when natural gas prices exploded last winter?

Free Money for the U.S. Treasury

The talk of a potential bubble in U.S. Government debt continues to grow, and the chorus grows louder every day. Other bubbles, including both real estate and commodities, have demonstrated similar phenomena, frequently not long before those bubbles have popped and the manias collapsed.

From Bloomberg today:

"The rally in Treasuries that pushed yields on bills below zero percent this week is adding to concerns that the $5.3 trillion market for government debt is a bubble waiting to burst."

Click here for the full story.

The Treasury Bubble

"It's going to be a disaster for America."

"It is a bubble... It's the last bubble left... It is insane, but that's what bubbles are!" Jim Rogers

Jim also predicted that eventually, interest rates and inflation must go much higher.

More Corn! Great Grains!

Corn Sure Tastes Good Today

Months have passed since trading grains has been this profitable. Liquidity is excellent today. I had begun to wonder if the past few months were going to become typical. Good trading conditions dominate for the grains today. I wouldn't even be surprised if corn reaches limit up.

Golden Grains Become Unhinged

All the grains have now begun to become unhinged, with soybeans, wheat, soybean oil, and even rice joining the fun! Despite soft crude oil and stock prices, the grains are showing signs of their historical independence from equities and other asset classes. A day like this has been a long time in coming! Time to make some gold from those grains!

Corn Surges on Reports of Less Acreage for Spring 2009

Farm Futures Magazine released a report his morning that indicated farmers are reducing acreage to be planted next spring in corn in favor of soybeans instead. Corn prices opened under pressure due to the state of the stock markets, but immediately surged much higher, and continues to escalate higher at this writing. Corn is 30 cents higher from the lows near the open of trading this morning.

Automakers + Government Create Pileup on the Market Freeway

All the turmoil over the automaker bailout is creating pure mayhem in the financial markets today. I'm going to take a break and go to the grocery store! This isn't worth throwing good money into the market!

I've have noticed over the past 18 months that every time government interferes and intervenes into the financial markets, uncertainty and turmoil are the result. Government interventions don't bring stability to the markets. They bring chaos!

What would have happened if, in August of 2007, when the crisis began, the government had stayed out of the financial markets? Instead of a slow and tumultuous death, perhaps the financial markets would have reached a natural bottom several months ago and begun to form a solid foundation for recovery.

Instead, we are faced with constant meddling and interventions, crushing debt, and collapsing financial markets. No investor can rely on any conditions, legal, fiscal, monetary, or otherwise. It is a nearly impossible circumstance to trade or invest with a sense of reliability or stability! Time to take a break, boys and girls, and wait for order to return to the markets!

Government isn't the solution! It is the problem!

This is market mayhem!

Treasury Promises TARP Funds to Underpin Automakers

This morning, the United States Treasury has now assured the automakers that they will provide support for the companies. Stock futures have risen and eliminated most of the overnight losses. It will be an interesting trading day as this story develops throughout the day and the weekend.

Stocks Roar Back At Open

Once again showing its resilience, stock indexes have begun to roar back upon the opening bell. The stock indexes have erased approximately half their overnight losses! Maybe Senator Reid's assessment will prove wrong!

Jim Rogers Claims Most U.S. Banks "Totally Bankrupt"

From Reuters today:

"Jim Rogers, one of the world's most prominent international investors, on Thursday called most of the largest U.S. banks "totally bankrupt," and said government efforts to fix the sector are wrongheaded."

Click here for the entire Reuters story.

Rogers has repeatedly said that by infusing capital into failing banks, the Fed reward the bad behavior of bad banks while penalizing the banks that have performed responsibly.

Commodities Back Off Recent Highs

As a rippling consequence of the overnight plunge in stock index futures, commodity prices have also shown weakness by backing off recent highs during overnight trading. This chart for soybeans is symbolic of several commodities.

I see this as an opportunity to buy, but much will depend upon what happens in the equities markets and related to the auto company bailout status, which is changing minute by minute. Right now, I like to buy on dips, once I see the commodities bottom out and start to move higher, doing this almost every day.

$50 Billion Ponzi Scheme Exposed

From FT.com

"Bernard Madoff, the founder of Bernard Madoff Investment Securities and a former chairman of the Nasdaq stock market, was on Thursday charged by federal prosecutors with a multibillion-dollar securities fraud.
"Mr. Madoff, 70, told employees that he estimated the losses from this fraud to be “at least approximately $50bn”, according to federal prosecutors."

Click here for the entire story.

The potential counter-party risk on this could have wide-spread implications, so it has import far wider than just to those clientele that will be affected.

Corporate America Not Benefiting From Record Low Rates

From Bloomberg:

"The lowest yields on Treasuries are providing no solace to U.S. companies paying the highest borrowing costs on record. While rates on everything from four-week Treasury bills to 30-year bonds fall to all-time lows, companies are paying an average 10.8 percent on their debt..."

Here is the full story.

$2 Trillion Fed Rat Hole

Bloomberg sued under the Freedom of Information Act to uncover to whom the Fed has extended $2 trillion in loans. The Fed has refused to disclose both the recipients of the emergency loans and the nature of the collateral for those loans, despite requirements by Congressional legislation to do so.

“If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, who oversees about $14 billion at New York-based ICP Capital LLC."

Here is the Bloomberg story.

Bank of America Axes 35,000 Jobs!

From Yahoo and Reuters:

"Bank of America Corp said on Thursday it plans to eliminate 30,000 to 35,000 jobs over three years, reflecting its pending purchase of Merrill Lynch & Co and weaker business activity stemming from the economic recession."

Click here for the full story.

Stock Index Futures Plunge As Auto Bailout Fails

Wow! Look at those stock futures! Wall Street is having a temper tantrum tonight! The Dow fell as much as 350 points, but has since recovered slightly!

The Euro Takes Off!

Is the safe haven play of the Dollar over? Sure looks that way based upon the Euro!

No Coincidence That Crude Oil Rises

As the Dollar drops precipitouly, the price of crude oil has risen nearly $9/barrel this week, including more than $5 today alone.

Dollar Gets Drilled!