Bill Cara’s Blog for Jul 13, 2012

CTA Trading Desk Morning Report

[7:00am ET] Good morning.

Merck (MRK) is a Cara 100 company based on its strong balance sheet, return on equity, and other peer leading financial metrics.

You may already be aware that, over the past month and 4th best over the past three months, MRK is the 5th best stock performer in the Cara 100.

Why is that?

You’ll find the answer in this article from Benzinga.com:
http://www.benzinga.com/news/12/06/2664822/merck-announces-new-phase-iii…

When Merck’s latest drug, Suveraxant, an insomnia med, has been FDA-approved for the market, it may become the “next best thing” from Big Pharma, and that’s what likely is driving the stock.

Unfortunately, the Value Line report on Merck that was released this week has no mention of Suveraxant.

Besides, at the current price of $42.91, Merck will pay a dividend yield of +4.0% over the next 12 months, so that plus Suxeraxant will let you sleep at night. However, the stock is a tad over-bought presently.

blog12_jul_13.1.gif

Have a good day.


Good morning, Geoff here.

As I mentioned the last 2 days, this could be a major point in the markets. The US Dollar is breaking out –

Strike 2! 3 strikes and your out.

But, there are also signs of the dollar topping here as well. We need to see how it performs in the next day.

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Here is the exact chart of the CRB that I posted on July 2nd and then todays chart:

ggimage07_070212.png

ggimage05_071412.png

Have a great trading day!


Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.

Symbol Name Last Trade Change Related Info
^ATX ATX 1,956.26 6:44AM EDT Up 21.90 (1.13%) Components, Chart, More
^BFX BEL-20 2,208.40 3:54AM EDT Up 11.40 (0.52%) Components, Chart, More
^FCHI CAC 40 3,157.42 6:59AM EDT Up 22.24 (0.71%) Components, Chart, More
^GDAXI DAX 6,497.84 6:45AM EDT Up 78.49 (1.22%) Components, Chart, More
AEX.AS AEX General 313.40 6:44AM EDT Up 1.98 (0.64%) Components, Chart, More
^OSEAX OSE All Share 463.79 6:44AM EDT Up 5.70 (1.24%) Components, Chart, More
^OMXSPI Stockholm General 318.17 6:43AM EDT Up 3.75 (1.19%) Components, Chart, More
^SSMI Swiss Market 6,170.68 6:44AM EDT Up 23.11 (0.38%) Components, Chart, More
^FTSE FTSE 100 5,652.83 6:44AM EDT Up 44.58 (0.79%) Components, Chart, More
FPXAA.PR PX Index 901.90 6:59AM EDT Up 5.00 (0.56%) Chart, More
MICEXINDEXCF.ME MICEX Index 1,406.53 6:59AM EDT Up 7.46 (0.53%) Chart, More
GD.AT Athex Composite Share Price Index 610.70 6:44AM EDT Up 10.54 (1.76%) Chart, More

http://finviz.com/futures.ashx

http://finviz.com/fut_chart.ashx?p=m5&t=ES

http://finviz.com/fut_chart.ashx?p=m5&t=ZB

http://finviz.com/fut_chart.ashx?p=m5&t=DX

http://finviz.com/fut_chart.ashx?p=m5&t=GC

http://finviz.com/fut_chart.ashx?p=m5&t=SI

http://finviz.com/fut_chart.ashx?p=m5&t=CL

The team will check in during the day, reporting in the Discourse when there is a new entry.

Enjoy your day.


Cara 100 Company research notes from brokers


Vad’s Catch of the Day


Kaimu’s Sound Money


Deron’s Daily ETF Analysis

Since the market began selling off over a week ago, the iShares Nasdaq Biotechnology ETF (IBB) has show considerable realative strength to the broad market. While the Nasdaq was losing support of both its 20-day and 50-day moving averages, IBB only undercut its 20-day EMA. Further, IBB quickly regained support of the 20-day EMA after undercutting it sharply yesterday. IBB ended the day near session highs. A volume fueled move above $131.01 could present a buying opportunity in this ETF. We are monitoring IBB closely for a possible long entry.

IYR

The commentary above is an excerpt from The Wagner Daily newsletter, which we have been publishing since 2002. Subscribers to the full version receive our exact entry and exit prices for swing trades of the top ETF and stock picks, access to our market timing model, and more. To get started today, sign up for your 30-day risk-free trial to our Wagner Daily stock newsletter or visit our trading blog to learn more about our proven technical trading strategy.


OptionOracle


Harp’s Roadmap


Cara on the Metalminers


Cara on the International Markets


CTA Trading Desk Mid-Day Report


CTA Trading Desk Post-Close Report


  1. Good morning. 08:30 PPI (0.1%) 08:30 Core PPI... [#111114]
    By: Bull Hunter (3552 comments) Go to top ↑

    Good morning.

    08:30 PPI (0.1%)
    08:30 Core PPI (0.2%)
    09:55 Mich Sentiment

    ——

    GOOG – Google initiated with a Neutral at Wedbush. Target $640

    ——

    “When politics are used to allocate resources, the resources all end up being allocated to politics.” ~ P.J. O’Rourke

  2. Wal-Mart and the Foolish Adherents... We need to start... [#111115]
    By: ea32da32 (2362 comments) Go to top ↑

    Wal-Mart and the Foolish Adherents…
    We need to start with educating Americans in the ways they choose to destroy their own lives by purchasing China, in excess… If you were to suddenly add .5% supply to the oil market and over time maintained that addition rate above consumption, it would not take long to reduce the price of a barrel of oil considerably; the longer you keep this little supply pressure on the further the p/b would drop. I think this same line of reasoning can apply to what Wal-Mart has done to Americans with their demand manufacturing outsource their jobs to China with regard to jobs in America. It’s been reported that 1 in 4 dollars spent by consumers are now spent in Wal-Mart. With half of what we spend on Oil going to foreign governments at what point will it be too late for this country to recover because we’re giving our wealth away to other countries. My personal opinion is the globalist have taken us too far too fast. I will never forget my generation being pumped 24/7 with Wal-Mart ads of ‘Made in America’ during the 70′s and 80′s – they pulled people in and then did a classic bait and switch, and the fools just role in…
    My opinion!
    regards
    Earl

    • ... [#111121]
      By: Grym (5469 comments) Go to top ↑
      • "Buying Walmart" and it's asssociated ills carry's weight... [#111123]
        By: dberryclan (687 comments) Go to top ↑

        “Buying Walmart” and it’s asssociated ills carry’s weight, but the bigger ills are based in the consumer’s “mind set.” America eats and buy’s itself to death day after day. Learning “to do without” is a discipline long forgotten.

        • "Buying Walmart" and it's asssociated ills carry's weight... [#111136]
          By: Grym (5469 comments) Go to top ↑

          “Buying Walmart” and it’s asssociated ills carry’s weight, but the bigger ills are based in the consumer’s “mind set.” America eats and buy’s itself to death day after day. Learning “to do without” is a discipline long forgotten.

          So true. A wise man once told me, “We don’t have to do what we want to do.”

          All too often we’re told something is addictive as if once we try it we are doomed forever to continue. Not so. I quit cigarettes after 31 years having begun at age 17 when I thought it made me look “adult”.

          People can do much more than we lead them to believe.

          We don’t really NEED to have the government take care of us or our problems. They just want us to think we do.

          Grym

          • Hi Grym - (We don't really NEED to have the government take... [#111141]
            By: ea32da32 (2362 comments) Go to top ↑

            Hi Grym – (We don’t really NEED to have the government take care of us or our problems. They just want us to think we do.)

            we think alike most often.

            Here is another read on “The Federal Reserve: History of Lies, Thievery, and Deceit” by Dr. Ken Matto; Former Congressional Candidate, 6th District N.J.

            http://www.scionofzion.com/federalreserve.htm

            the FED has friends all over;-) LOL

            take care,
            Earl

      • Grym, dberryclan; I agree with you both - we over consume... [#111125]
        By: ea32da32 (2362 comments) Go to top ↑

        Grym, dberryclan; I agree with you both – we over consume everything but that drives jobs, not many here in the US but it does. ‘commerce’. And yes we buy cheaper… but once WMT has driven Kroger/HEB/… out of business we’re all screwed.

        I think my #1 question for WMT – why the hell didn’t they send jobs to Mexico rather then load up China?

        • "The Great Atlantic and Pacific Tea Company" AKA A&P... [#111131]
          By: Ilya (572 comments) Go to top ↑

          “The Great Atlantic and Pacific Tea Company” AKA A&P was sued by Justice on anti-trust grounds back in the 1950′s. The corner ‘mom and pop’ market owners were livid that they could not compete with them on price.

          WMT has seen it’s hayday and will probably go the way of A&P over the next decade…It’s just the way marketing has always worked over very long cycles. Other examples of ‘out-living their brands’ include Woolworth, W.T. Grant and Western Auto. Marketing is a cruel business.

          I see the same business model (early WalMart) at work with Tractor Supply. They are rolling up the business of the rural old-timey feed stores and with great success. I’m sure Lowes and Home Depot have put many a hardware store out of business but that’s…business.

          The highway to success is littered with dead business plans. I recall Texas Instruement’s forey into the digital wrist watch market while they were divesting their successful oil service business…What a hoot that was!

          At least China had to by the engineering and German machine tools to make stuff. They just add labor and stir. Same with Japan post WWII.

          • Hi Ilya - I'm very much good with success - but it would... [#111137]
            By: ea32da32 (2362 comments) Go to top ↑

            Hi Ilya – I’m very much good with success – but it would have been nice for them to put some of this business south of our border – then again maybe they could not handle the lack of ‘rule of law’ which is the problem with many a country. they have safe enterprise zones in Mexico according to my friends at work that have family there. Oh well, it is what it is,
            thanks,
            Earl

          • Ilya - You left out the two on life support today: Kmart... [#111144]
            By: Dr. Strangelove (2004 comments) Go to top ↑

            Ilya -

            You left out the two on life support today: Kmart and Sears which have merged into SmearsKart. SS Kresge dominated the dime store business for nearly a century only to morgh into The Big K and Sears built the catologue business into a monolith for rural America through the age of industrialization. Sears even sold kit homes brought to you off railroad cars after WWII. Both, even merged, are a sad reminder of past successes nearly gone.

            I see Walmart is rapidly expanding into a smaller format of groceries-only stores because its CEO recognizes its wildly successful function as a conduit for Chinese manufactured PLASTIC CRAP ON CREDIT is over. Proof is in WMT clothing sales which have dropped off dramatically. The vast un- and underemployed masses know they can purchase better clothes at the local thrift shop for pennies instead of dollars.

            But Walmart will thrive as the massive welfare credits flow into its data base at midnight at the end of each month when its sales spike as explained by its CEO. Gov’t credits the welfare credit at that time. Sam must be rolling in his grave. It’s no different than dolling out free grain to the Romans to keep the peace in ancient times.

          • The sad success of WMT certainly caused a decline across... [#111145]
            By: MoKat (531 comments) Go to top ↑

            The sad success of WMT certainly caused a decline across rural and small town America. They destroyed the social fabric of many small communities across the land.

            During the collapse of the Roman Empire, grain handouts were ordered in an attempt to keep the peace. They shaved the coins like we print money. We also dole out medical care and income maintenance via SSI which has climbed from 2 million during the Clinton administration to 10 million today. Unemployment terms were doubled to nearly two years.
            A high cost to prevent social chaos and violence.

            History repeats.. yeah.

          • Dr. S. Sears and 'Monkey' Wards were the hardgoods duopoly... [#111147]
            By: Ilya (572 comments) Go to top ↑

            Dr. S.
            Sears and ‘Monkey’ Wards were the hardgoods duopoly when I was a kid. S.S. Kresge morphed into many forms before they became Kmart.

            I agree about WMT seeing the writing on the wall. Their soft-goods suck and that is where their margins are highest. Their international business plans have never considered cultural differences. How can a bunch of Baptists from Arkansas understand the consumer biases of Hindus and others. How are they going to compete on price in….China?

            Their secret weapon has always been their sleek distribution hubs. They are probably one of the largest trucking companies in the U.S. No doubt their next step on cost savings will be to buy a refinery and some tank farms like Delta to get their cost of diesel down!

            Dying quails always flutter before they crash.

          • 'Their secret weapon has always been their sleek... [#111162]
            By: no imagination (53 comments) Go to top ↑

            ‘Their secret weapon has always been their sleek distribution hubs’

            You nailed it, and it goes beyond just good trucks and drivers. An example: Have you ever noticed how cheap coolers are there? A significant cost of the cooler(ice chest) is shipping. They are bulky and can not be shipped broken down or partially assembled. Cooler mfgs built factories in locations dictated by WMT, which allowed the ‘sleek distribution’ to occur. When asked ‘how many units of x cooler might you buy?’, WMT buyer responds with a number that is so large, it is profitable to do what they want(in the short run, anyway). I know of no other retailer that can dictate factory sites.

            Long ago, I worked for major pharmaceutical company with a small(compared to prescription drugs) but decent over the counter business. We were approached by super large retailer that wanted to sell our products. The final negotiation was over and our two most seasoned, hard ass, marketing/sales staff came out looking like they had lost, bigtime. All they could say was something about the number of zeros in the order quantity.

            IMO WMT will continue to have that ‘order quantity’ advantage, which is huge.
            Thanks to all who post. I learn a lot from this community.

          • ... [#111163]
            By: Grym (5469 comments) Go to top ↑
          • ... [#111164]
            By: Grym (5469 comments) Go to top ↑
          • ... [#111151]
            By: Grym (5469 comments) Go to top ↑
  3. CAT - estimates, target cut at Credit Suisse. CAT estimates... [#111116]
    By: Bull Hunter (3552 comments) Go to top ↑

    CAT – estimates, target cut at Credit Suisse. CAT estimates were reduced through 2014. Dealer survey suggests lower potential growth. Outperform rating and new $120 price target.

    CSCO – estimates, target lowered at Sterne Agee. Shares of CSCO now seen reaching $23. Estimates also cut, given macro headwinds. Buy rating.

    INFY – The Indian outsourcing firm is now Equal Weight from Overweight by Barclays.

    INFY – estimates lowered at Oppenheimer through 2014, Oppenheimer said. Lowers outlook and cites pricing/realization pressure. Perform rating.

    MRK – Upgraded to Outperform @ MP Advisors. Target $45

  4. A very nice open up 10.58% as I type this. I'd like to see... [#111118]
    By: ea32da32 (2362 comments) Go to top ↑

    A very nice open up 10.58% as I type this. I’d like to see it melt up but as I posted last night will wait to add when the chart sets up. So far we’ve traded above the entire day average.

    Earl

    • ' and the meek shall inherit the earth '... always thought... [#111119]
      By: baz22 (2875 comments) Go to top ↑

      ‘ and the meek shall inherit the earth ‘… always thought it meant the first inhabitants, before mankind managed to exploit everything possible.. but, that’s just in our nature, and, regretfully, I am part of it also…

    • LOL - it bounced off that 50% 2da retracement like I... [#111140]
      By: ea32da32 (2362 comments) Go to top ↑

      LOL – it bounced off that 50% 2da retracement like I thought it would;-) just a lucky guess.

    • Hi Baz; consequences, my wife a 25 year ICU/Cardio nurse... [#111124]
      By: ea32da32 (2362 comments) Go to top ↑

      Hi Baz; consequences, my wife a 25 year ICU/Cardio nurse constantly reminds me that drugs are poisonous; so we do have to be careful and maybe the FDA is slow for more than ‘they are afraid to stick their necks out’. Care is always in order – but the public has little clue like the discussion on H1N1… http://online.wsj.com/article/SB100014240527023044

      our good friends are Parent Consultants for Candlelighters of Houston http://candle.org/home.html so from my knowledge of their many years of involvement drugs/doctors can help, can cure some, can extend life along with quality of life; then there comes a time when that’s all they can do…

      Bottom line – I’m slow to judge on these – I know drug businesses are in this for a profit, but their made of individuals that do care for people.

      I for one really appreciate your research – I know it must take a lot of time.

      best regards,
      Earl

  5. I've been studying this site for over 3 years. Decided to... [#111122]
    By: dukenkjp (1 comments) Go to top ↑

    I’ve been studying this site for over 3 years. Decided to write today. Based on technical factors is it time to long PDS or is it still a falling knife?

  6. Hitting new highs - at .75 normal 20da volume. I'm looking... [#111126]
    By: ea32da32 (2362 comments) Go to top ↑

    Hitting new highs – at .75 normal 20da volume. I’m looking to buy some puts but will probably wait to see if it can trade 8MM or less by close. 16pe is above TGT 14pe

  7. http://www.biocryst.com/our_science... use of hydrogen ( or... [#111127]
    By: baz22 (2875 comments) Go to top ↑

    http://www.biocryst.com/our_science… use of hydrogen ( or Deuterium > ‘ heavy ‘ hydrogen )hopefully will reduce toxic effects…

    • This is light years ahead of the old gas chromatography... [#111129]
      By: ea32da32 (2362 comments) Go to top ↑

      This is light years ahead of the old gas chromatography days, but still in its infancy stage. In Houston it’s all about agreeing to their protocols, or not. I don’t believe we’ve achieved the level of ‘individualized therapeutic levels’ besides ‘weight’; they are many years away from the ‘individual’ responses to chemical treatments; example tamiflu effects people differently since our biology’s are not exactly the same. After Travis was diagnosed with the blastoma in 2002 I read the latest blood/brain barrier report; I thought 30 years of research to tell me we’ve moved almost no where? But I applauded the efforts. Ok, the brain is a special case – hopefully some of this other research will help in that area some day. From the link it does sound like their making some analytical progress.
      Earl

      WMT is just too strong to get involved with – I should forget the name;-)

  8. nail Shelly Moore's ( W. Va ) hide to the wall, wanting to... [#111128]
    By: baz22 (2875 comments) Go to top ↑

    nail Shelly Moore’s ( W. Va ) hide to the wall, wanting to cut SEC funding… Her reasoning ” there were 90 regulators at JP Morgan and didn’t catch the mistakes “… Simon: ‘ so how is Cutting the funding going to helpcatch future problems ? ‘.. lots of stuttering at that point… G.D. it’, is there no limit ….

    • One thing you never hear on MSM is how these regulators go... [#111130]
      By: ea32da32 (2362 comments) Go to top ↑

      One thing you never hear on MSM is how these regulators go to work for the company’s they are supposed to regulate some time down the road. Personally I think the entire system is a cesspool.

  9. once again, I am so very sorry for your family's loss... So... [#111132]
    By: baz22 (2875 comments) Go to top ↑

    once again, I am so very sorry for your family’s loss… So much is trying to be done on many fronts ( brain cancer ) and that is why I keep sticking with ‘ oncy ‘… I still believe in them.

  10. ... [#111133]
    By: Bill Cara (4105 comments) Go to top ↑
    • Bill, Several times on Friday I remembered your words in... [#111149]
      By: dberryclan (687 comments) Go to top ↑

      Bill,

      Several times on Friday I remembered your words in the WIR @JPM. Maybe you should write a book that is an international work of intrique that the common man could understand exposing the system. Heck, maybe Disney would pick it up and Tommy Lee Jones, Dustin Hoffman, among an all-star cast could put it on the big screeen? LOL

      Name it , “Diamon’s Are Forever”

      oops, my own sarcasm is nauseating me, I better go…..

      • dberryclan, "Diamon's Are Forever" Let's hope "You Only... [#111152]
        By: Grym (5469 comments) Go to top ↑

        dberryclan,

        “Diamon’s Are Forever”

        Let’s hope “You Only Live Twice” fits as well. This scamming the system by insiders seems endless.

        Grym

        • Grym, "This scamming the system by insiders seems... [#111154]
          By: dberryclan (687 comments) Go to top ↑

          Grym,

          “This scamming the system by insiders seems endless.”

          You ever heard the following statement from a weary parent, trying to address miss behavior of one or more children under their supervision;

          “Now children go back to the playground and play fair!”

          Well, when I read of the fines and other “actions” handed out these days to men and women of power caught playing unfair, it reminds me of those words. However, the parent seems to weild more clout!

  11. Mystery to me why it took two high-profile failures (MF... [#111135]
    By: Vadym Graifer (4341 comments) Go to top ↑

    Mystery to me why it took two high-profile failures (MF Global and PFG Best) to incorporate such common sense rules that really had to be in there from the get-go, but as title says…

    http://www.cftc.gov/PressRoom/PressReleases/pr6303-12

  12. What if it's simply going to consolidate here, a little... [#111139]
    By: ea32da32 (2362 comments) Go to top ↑

    What if it’s simply going to consolidate here, a little pause over the next few days… maybe the same with UUP…

  13. Baz I don't want anyone to get the impression I'm pumping... [#111142]
    By: ea32da32 (2362 comments) Go to top ↑

    Baz

    I don’t want anyone to get the impression I’m pumping this because I’m not – look at the high volume rejecting 3.50 the past 4 sessions. $3.40 looks to be long term support.

    also another little article.

    Hedge Funds Love These 4 Oversold Healthcare Stocks
    http://wire.kapitall.com/investing-101/hedge-funds

  14. Once the trigger comes, the break out should propel the... [#111148]
    By: ballena (529 comments) Go to top ↑

    Once the trigger comes, the break out should propel the whole oil sector upwards, big time. It could stage another top at 87USD, but from my point of view it is a question of when, not if that XOM shoots up. No position.

    XOM has a market cap of 400BUSD and is one of the sector leaders. I use it as a thermometer of the oil stocks.

  15. or, NR ?... [#111153]
    By: baz22 (2875 comments) Go to top ↑
  16. 4 times in the last 15... [#111155]
    By: JimG (299 comments) Go to top ↑

    4 times in the last 15 years…

    http://tinyurl.com/rarebuysignal

  17. ... [#111156]
    By: Grym (5469 comments) Go to top ↑
    • Hi Grym, thanks for the link. I remember George Shults very... [#111159]
      By: ea32da32 (2362 comments) Go to top ↑

      Hi Grym, thanks for the link. I remember George Shults very well from his years with Reagan and Bush, always thought he was the statesman… I don’t believe there is anything remotely like him anywhere in government these days, with the exception of but a few like Ron Paul or maybe… hell I can’t think of anyone that’s not crass, in your face… Have you seen Chris Christy lately, he needs to check himself, starting to get on my last nerve. He seems to go out of his way to be rude and many of the tea party people have noticed this. His act is getting old. Anyway, enjoyed the article.
      Take care
      Earl

  18. from the TechnicalTake, includes 10 different variables... [#111157]
    By: JimG (299 comments) Go to top ↑

    from the TechnicalTake, includes 10 different variables from sentiment surveys to fund flows, insider buying and gave correct buy signals in June 2006, March 2008, November 2008, March 2009, June 2010 and August 2011:

    According to Guy, “The current position of the indicator would suggest that the rubber band was not stretched too tight at all when this rally started, so we should not expect strong gains.”

    http://tinyurl.com/customindicator

  19. Hi All - Here is clip of a big deal in responsible... [#111158]
    By: Luggie (639 comments) Go to top ↑

    Hi All – Here is clip of a big deal in responsible governance out of Justice: The database, known as SAVE, is a list of resident non-citizens maintained by the agency (HSA) and would help the state to challenge people’s right to vote if they are suspected of not being U.S. citizens. The Obama administration had for months denied Florida’s request but relented after a judge ruled in the state’s favor in a related voter-purge matter. Perhaps the Robert’s ruling has pushed the pendulum to the center and left leaning courts have seen the light. This when provided to all States, along with voter identification (much as we all had when turning 18 years old) may start turning the Titanic. Happy Trading

    http://www.foxnews.com/politics/2012/07/14/feds-ok

    • With politeness, the list you refer to is near useless as a... [#111167]
      By: Corner Stone (369 comments) Go to top ↑

      With politeness, the list you refer to is near useless as a voter purging method. It’s been challenged by every voter association in existence and is acknowledged to have grievous errors when used in this manner. I can reproduce the copious links if needed.
      As one example, here is trusted news source Foxnews describing a 91 year old WWII vet, born in Brooklyn, who Florida purged:
      http://www.foxnews.com/politics/2012/05/31/florida

  20. YouTube video trashing the 'system' - blog... [#111160]
    By: ea32da32 (2362 comments) Go to top ↑

    YouTube video trashing the ‘system’ – blog that!

    http://www.youtube.com/watch?v=7r-pbD1kIUE&feature

  21. ... is up. There were a number of typos that I had to fix... [#111166]
    By: Bill Cara (4105 comments) Go to top ↑

    … is up.

    There were a number of typos that I had to fix (3:10pm)

    Enjoy your weekend.

  22. Good interview on Bloomberg with Wilber Ross on the outlook... [#111171]
    By: Ilya (572 comments) Go to top ↑

    Good interview on Bloomberg with Wilber Ross on the outlook for the coal industry. His outlook for steam coal is decidedly negative for the next 10 years. Met coal is hostage to the Chinaman’s GDP. Seems cheap shale gas and EPA requirements are causing power generators to switch en masse to gas…That might be good for Generous Electric among others.

    A quick read and cogent logic from a guy that cobbled together bankrupt coal assets at the cyclical bottom and recently sold at the top…

    Wilber is whip crack smart in my opinion…

    • ALOHA!! Is that Wilbur "Sago Boy" Ross you speak of so... [#111172]
      By: kaimu (3289 comments) Go to top ↑

      ALOHA!!

      Is that Wilbur “Sago Boy” Ross you speak of so fondly? Mr. WalMart of the coal industry? Buy at the bottom-kill off miners-sell when your reputation is shot! I question his brilliance and his ethics.

      Anker West Virginia Mining is listed as the permittee for the Sago Mine. Testifying before MSHA on March 23, 2006, Vice President Sam Kitts described the corporate structure as follows, “Sago is part of Wolf Run Mining Company, which is a subsidiary of Hunter Ridge Mining Company. Hunter Ridge is a subsidiary of ICG, Inc.” International Coal Group, Inc. was formed in May 2004 by investor Wilbur Ross, who led a group that bought many of Horizon Natural Resources’ assets in a bankruptcy auction. The company produces coal from 12 mining complexes in Northern and Central Appalachia (Kentucky, Maryland, and West Virginia) and from one complex in the Illinois basin.

      Ross, originally operating as Newcoal LLC with four other investors, expressed interest in buying Horizon’s nonunion properties, but not its six union operations. According to the Associated Press, Horizon was then allowed to sever its union contracts, including pension benefits, by bankruptcy court.In March 2005, ICG agreed to buy Anker Coal Group, Inc.

      Prior inspection history

      In 2005, the mine was cited by the federal Mine Safety and Health Administration (MSHA) 208 times for violating regulations, up from 68 in 2004. Of those, 96 were considered S&S (significant / serious and substantial).

      The Charleston Gazette said “Sago mine has history of roof falls”. MSHA found 52 violations from April to June, of which 31 were “serious and substantial” (S&S). From early July to late September, MSHA found 70 violations, 42 of which were S&S. MSHA inspections from early October to late December resulted in 46 citations and three orders, 18 of which were S&S. Violations include failure to follow the approved roof control and mine ventilation plans and problems concerning emergency escapeways and required pre-shift safety examinations. The Gazette article explained that “S&S” violations are those that MSHA believes are likely to cause an accident that would seriously injure a miner.

      Guys like this give mining a bad name …

      • Kaimu, I never said Wilber was a miner. I can say that he... [#111173]
        By: Ilya (572 comments) Go to top ↑

        Kaimu,
        I never said Wilber was a miner. I can say that he is a smart investor in my opinion. Ethics have always been an ephemeral question dependent on the eye of the beholder. I recall you once said that you became a union shop in California when the money was right. Perhaps I’m mistaken and becoming a union shop was your way of ethically supporting the disadvantaged downtrodden California workers of the world…..unite!

        My only reason for recommending his interview was that I agree with his thesis and perhaps others might want to consider the investment implications. Hey, if you like steam coal, invest and enjoy. You might also consider investing in a creosote pit that soaks railroad ties and telephone poles. How can you lose investing in transportation and telecommunications?

  23. Looks like there could be a push to investigate this too... [#111174]
    By: ea32da32 (2362 comments) Go to top ↑

    Looks like there could be a push to investigate this too. Would not surprise me since much of Saudi money flows back into the London hands, banks that is. http://www.telegraph.co.uk/earth/energy/fuel/94019