Step Away From the Fiat

After hearing an analyst on Bloomberg discuss the relatively high levels of cash on hand, I wanted to have a deeper look at the numbers myself.

I struggled with data quality, and sample size, until by random chance DistressedVolatility showed me ycharts.com.  What a great site.

Check this out:

That cash, will be deployed, sooner or later.

Buybacks are coming. More dividends are coming.  Aquisitions are coming.

You can take delivery of 1000 barrels of oil in December of 2018, for $92.51.  The front-month September Contract settled at $78.98. 

That’s just slightly over 2% annualized to account for inflation and the cost to carry.

Not much point, in paying to store the stuff at that rate.

…right down to the county level for all of the United States, encompasing population and climate change models into the analytics. Check out the 27 Mb PDF, published on July 20th.

Pun intended.

Salinity data sampled during May, provided by the ESA.

By ESA - Ifremer, N. Reul

In Situ We Trust

Stocks and Oil are not at their recent lows, yet.

Government paper is making new highs.

Gold is about to pierce support practically as I type this.

I think this is a cocktail, for money to flow from gold first, bonds soon, and put support under stocks and oil, without letting them make a lower low on stocks and oil.

Of course, we’re one or two more depressing data points away from the limb snapping and stocks crashing really hard.

Conclusions: I’m likely on the wrong side of the trade for the next 3 days.

I know all 3 readers of this blog, likely don’t care about this prediction, or the fact that I I recently bought a house out there.

Looking at the YTD housing statistics for the area, for 2008 and 2009, one can apply two different forms of analytics (mostly interpolation and extrapolation) to come up with the above numbers.

At the high end of the estimate’s range, the municipality, will be in all-time record breaking territory. (or, at least decade old record breaking territory, I only have 10 years of data)

…hats off to them, for the second round raise.

I’m pretty excited for them.

Lots of time, for developers to get on this train.

Thinking cap, on.

Vancouver, takes number one spot on list for the city level.

Australia, takes the gold at the national level.

the report is stale…since it’s for Q3 2009.

Got Dirt? Got Commodities?

“this is the greatest undervaluation [of stocks] in the last half century.”

- Bill Tedford, July 1st, 2010 citing the Fed Model, he claims responsibility for originating.

The last time CME US Treasury Bond futures were bid up to 128, the S&P 500 was around 1100, it was the beginning of October 2008.

The trailing as reported EPS of Q4 2007 through Q3 2008, was $47.18. (PE = 23) The next quarter, the market ended up losing $23.13 per unit, and over the next year, the market ended up making only $13.13 per unit. (FPE = 84)

Right now…

The trailing EPS of Q2 2009 through Q1 2010, was $61.95. (PE = 16.62)

That means, it’s a much harder decision, for investors to buy Treasuries over the S&P, today, than it was for them to buy them in October. Assuming, you subscribe to the theory that the FPE on the S&P is actually smaller than the trailing. Which is easy to do, with 2010 as reported earning top down estimates at $67.38 and 2011 at $77.64.

Front month Oil was at 120. Oil is cheaper today.

Front month Gold was 850. Gold is more expensive today.

Money flows to stocks and oil here…soon.

Update: Using Operating Earnings per share and bottom up estimates for the same,

07Q4-08Q3 = $64.82, 08Q4-09Q3 = $39.61
09Q2-10Q1 = $66.16, 10Q2-11Q1 = $84.26 (estimates)