JOE (St. Joe Co.) Tests Symmetrical Triangle! - Chart

If JOE breaks down, $13 looks like a decent support level from 1998-1999. Thoughts? David Einhorn and Whitney Tilson value JOE between $7 and $13 (see previous posts for CNBC videos and links to reports).

St. Joe Company ($JOE) - Source: FreeStockCharts.com

Recent posts on $JOE:

St. Joe is Whitney Tilson's Largest Short Position, Berkowitz Wants $JOE As Largest Position (May 24, 2011)

David Einhorn is Still Short St. Joe and Moody's, Buys Yahoo (Greenlight Q1 Letter) (May 11, 2011)

St. Joe (JOE) May $24 Call Volume; BlackRock, Fidelity Magellan Own a Huge Chunk of Shares (April 20, 2011)

SEC Conducts Inquiry Into St. Joe's Land Impairment Practices (JOE) (January 12, 2011)

Einhorn's Presentation On Why He's Short St. Joe Vs. Bruce Berkowitz Who Owns 30% (December 20, 2010)

*I am not long or short this stock

Nuclear Twilight in Europe (Germany) - Guest Post

Nuclear Power Plants in Germany
(via Wikimedia Commons)
Guest post by OilPrice.com (image added)

Nuclear Twilight in Europe

It is becoming evident to many that the March nuclear catastrophe at Japan's six reactor Daichi Fukushima complex has dealt a huge, possibly fatal, blow to the nuclear industry's hopes of a revival.

A year ago even global warming enthusiasts reluctantly embraced nuclear power as a carbon-free energy generating system, and the industry was ramping up for glory days as a result.

The triple whammy against nuclear power beginning with the 1979 partial meltdown at Three Mile Island, followed by 1986's Chernobyl disaster and now Fukushima, effectively present a "three strikes and you're out" call against civilian nuclear energy power generation for the foreseeable future.

That said, with the trillions of dollars already invested in 436 nuclear power plants (NNP) worldwide, according to the International Atomic energy Agency (IAEA), the industry has begun to push back, and "ground zero" is emerging as Europe, not Japan, with the lawyers circling.

In the wake of Fukushima, German Chancellor Angela Merkel announced on 30 May that Germany, the world's fourth-largest economy and Europe's biggest, would shut down all of its 17 would abandon nuclear energy completely between 2015 and 2022, an extraordinary commitment, given that Germany's 17 NPPS Germany produce about 28 percent of the country's electricity.

If Berlin's announcement sent nuclear power proponents seating, worse was to follow, as Switzerland is examining a proposal to phase out the country's five nuclear plants by 2034.

EUR/USD Levels To Watch, LIBORs, Europe Debt Crisis Updates (6/16/2011)

EUR/USD could test the 200dma and 1.5 year uptrend line. The October 2010 peak looks like resistance again. The Eurozone sovereign debt crisis still hasn't been resolved, and since banks own this debt there are worries over contagion risk. Greece's 5Y credit default swap just hit a new high (1,769.175 bps USD). This could help, via Reuters: "IMF expected to pay next Greek tranche: eurozone sources". Below is some DV proprietary chart art and links to relevant articles. Watch LIBORs and the U.S. 2-year swap spread to see if interbank dollar funding risks are being repriced. Read more at Bloomberg"Europe Faces ‘Lehman Moment’ as Greece Unravels: Euro Credit".


Source: FreeStockCharts.com  (click for larger view)

1-Month, 3-Month LIBOR (London Interbank Offered Rate)
Direct Source: StockCharts.com

Related articles:

Hedge Funds Ramp Up Extreme Bets Against Euro
"According to a Deutsche Bank note to a client, one "U.S. house" bought a very large amount of one-month euro/dollar put options with a $1.40 strike price on Tuesday and Wednesday. At Bank of America, brokers saw someone buy a $1 billion put option with a strike price of $1.30 and an end-of-year maturity date." (WSJ)

Euro Declines to Three-Week Low on Concern Europe Debt Crisis Is Worsening (Bloomberg)

Euro-Dollar Puts Reach Highest in Year on Greece’s Sovereign-Debt Turmoil (Bloomberg)

Greek Bank Threat is Main Stability Risk: ECB (Bloomberg)

European stocks falter on debt contagion woes (Reuters)

Greece, Ireland, Portugal Lead Sovereign Credit-Default Swaps to Records (Bloomberg)

Greek Government Fall Would Be Big Step To Disorderly Default -Fitch Analyst (WSJ)

Treasuries Advance on Europe Concerns, Two-Year Yields Fall to 2011 Low (Bloomberg)

Japan’s Bonds Rise as Greece Political Turmoil Boosts Demand for Safety (Bloomberg)

Rise in dollar funding pressures spooks traders (Reuters)

ECB Constancio: Restructuring Could Increase Contagion Risk (iMarketNews)

Interest Rate Swap Spreads Widen Most Since November; Moody's Warns French Banks (Bloomberg)

Guggenheim's Minerd Interview on Global Markets, Greece's Debt Problems (Bloomberg Video)

FX Concepts's Conklin on Euro, Dollar Outlook (Bloomberg Video)

John Burbank: Asset Prices Down 10, 15, 20 Percent Will Bring QE3 Speculation

John Burbank, managing member and chief investment officer at hedge fund Passport Capital, spoke at the Committee for a Responsible Federal Budget Annual Conference yesterday (read Bernanke's keynote here) on the debt ceiling and end of QE2. I transcribed what he said below. He covered how he's investing around the Fed which I thought was important.
"There are so many variables. August seems like a long time away if you're in the market everyday. We should have a European default by then and we should understand the rate we're growing in the U.S. I think the 10 year (Treasury) is really telling you that there's low growth and a deflationary outlook, and that QE2 is ending. The markets have responded far more to what Bernanke is doing and likely to do than anything else I'd say because investing in inflation is exactly opposite to investing in deflation. Pretty much you have to turn your portfolio upside down and do the opposite. So, I think the investors and business people don't have clarity and there are so many different variables.

The question is, who's going to fix this? Is it Congress? Or is it Bernanke? Or is it the markets? Which is going to happen first. And the question is, is it going to be inflation or is it going to be deflation? Right? A lot of people compare investing to playing poker, and I say it's like we're watching the last table of the World Series of Poker because I don't know how to invest without watching what Fed does, Congress does, Beijing does. The biggest players who essentially set prices. That's the problem, we have no clarity. So the debt ceiling is just one of many different variables that we need to understand as investors"

"I think the biggest thing is QE2 is ending and many investors assume QE3's magically right around the corner. If it's not, asset prices are going to fall. They are going to fall 10, 15, 20% and then the market can start speculating on QE3."

[Question by Steve Liesman: Were you fumbling with your Blackberry hitting the sell button while Lindsey was talking?]

"Oh, Ive already been hitting the sell button most of this year so."

"The problem with the markets is people assume liquidity and the utility of the very near term is far more powerful than the certainty of the long term. So if Bernake is in the market buying Treasurys, the 10 year goes up to 4%. But then growth starts faltering and you start discounting the end (of QE2), and here the 10 year goes to 3%"

Full segment featuring John Burbank: http://www.c-spanvideo.org/program/BudgetAnnu/start/3294/stop/11530

Bernanke's Keynote at Federal Budget Conference (Full Text, 6/14/2011)

Source: CSPAN
Watch the full video at cspan.org. The conference included Rep. Paul Ryan, Sen. Michael Bennet, Alan Simpson, Lawrence Lindsey, Neel Kashkari (PIMCO, Interim U.S. Assistant Secretary of the Treasury for Financial Stability/ set up TARP during the financial crisis), Michael Pond (interest rate strategist at Barclays Capital), Diane Swonk (Mesirow Financial), John Burbank (Passport Capital), Carlo Cottarelli (IMF), Steve Rattner, Norm Ornstein (American Enterprise Institute), Rudolph Penner (former director of Congressional Budget Office), Marne Obernauer (Beverage Distributors Company) and many more. It is getting serious folks.
Chairman Ben S. Bernanke
At the Annual Conference of the Committee for a Responsible Federal Budget, Washington, D.C.
June 14, 2011

Fiscal Sustainability

I am pleased to speak to a group that has such a distinguished record of identifying crucial issues related to the federal budget and working toward bipartisan solutions to our nation's fiscal problems. Today I will briefly discuss the fiscal challenges the nation faces and the importance of meeting those challenges for our collective economic future. I will then conclude with some thoughts on the way forward.

Fiscal Policy Challenges
At about 9 percent of gross domestic product (GDP), the federal budget deficit has widened appreciably since the onset of the recent recession in December 2007. The exceptional increase in the deficit has mostly reflected the automatic cyclical response of revenues and spending to a weak economy as well as the fiscal actions taken to ease the recession and aid the recovery. As the economy continues to expand and stimulus policies are phased out, the budget deficit should narrow over the next few years.

Unfortunately, even after economic conditions have returned to normal, the nation faces a sizable structural budget gap. Both the Congressional Budget Office and the Committee for a Responsible Federal Budget project that the budget deficit will be almost 5 percent of GDP in fiscal year 2015, assuming that current budget policies are extended and the economy is then close to full employment.1 Of even greater concern is that longer-run projections that extrapolate current policies and make plausible assumptions about the future evolution of the economy show the structural budget gap increasing significantly further over time. For example, under the alternative fiscal scenario developed by the Congressional Budget Office, which assumes most current policies are extended, the deficit is projected to be about 6-1/2 percent of GDP in 2020 and almost 13 percent of GDP in 2030. The ratio of outstanding federal debt to GDP, expected to be about 69 percent at the end of this fiscal year, would under that scenario rise to 87 percent in 2020 and 146 percent in 2030.2 One reason the debt is projected to increase so quickly is that the larger the debt outstanding, the greater the budgetary cost of making the required interest payments. This dynamic is clearly unsustainable.

David and Goliath: Vietnam Confronts China Over South China Sea Energy Riches - Guest Post

South China Sea (Wikimedia)
Guest post by OilPrice.com (continued from part 1)

David and Goliath: Vietnam Confronts China Over South China Sea Energy Riches

An increasingly fractious maritime confrontation is developing in the South China Sea, with enormous implications for international companies interested in developing East Asia's offshore hydrocarbon resources. Far from the radars of city of London and Wall Street investors, the clash has seen Vietnam emerge as spear carrier for its fellow ASEAN members on the dispute.

Offshore drilling is the most capital-intensive form of exploiting hydrocarbons, but its expense and scarcity has also allowed technically advanced Western companies to drive hard bargains with third world countries over their offshore waters, as they don't have indigenous advanced technical resources nor finances to exploit their maritime wealth.

Accordingly, most countries attempt to procure the best bilateral deals with foreign companies to get a taste of the offshore revenues that come from exploiting their Exclusive Economic Zones (EEZs), which the 1982 United Nations Convention on the Law of the Sea (UNLOS) recognized 12 nautical miles as normal for territorial seas and waters and provided international recognition of 200 mile EEZs. On the vexed question of overlapping claims, When an overlap occurs, UNLOS deferred to the competing states to negotiate to delineate their final and actual maritime boundary, with the general principle that any point within an overlapping area defaults to the nearest state.

According to U.S. government statistics, Vietnam's oil and gas industry is currently the country's biggest foreign currency earner and a major procurer of imported technology. Since Vietnam's first oil export shipment in April 1987, crude oil has earned over $17 billion for Vietnam's economy, all of it from offshore production. Vietnam is currently Asian third largest oil producer behind Indonesia and Malaysia.

S&P Downgrades Greece to CCC, Watch Greek Stock Indexes (10Y Bond Yield at 17.13%; 5Y CDS 1,590)

Standard and Poor's downgraded Greece to 'CCC' from 'B' today. Greece's 10-year government bond yield rose to 17.13% this morning and its 5Y credit default swap made a new high at 1,590 basis points. See charts below and an excerpt from the S&P report after the jump (and links to more yields).

I think Greek stocks will be interesting to watch going forward as Greece and other Eurozone members deal with their sovereign debt issues. $ATG (Greece General Shares) broke below 2000 and 2009 support and the next support level is between 865-900 (in 1996-1997). Watch it trade in its new channel up against downtrend resistance. There is also a Dow Jones Greece Index ($GRDOW) which looks similar. I'd like to see that above 2003 resistance.

Unfortunately there isn't an ETF trading in the U.S, but I found out there is one on the Xetra Exchange quoted in Euros (Lyxor ETF MSCI Greece - see chart #3). Are there option chains online anywhere I can watch on this ETF, or others.

$ATG (Greece (Athens) General Share (StockCharts)

$GRDOW (Dow Jones Greece Stock Index) - StockCharts.com

ECRI: Slowdown In U.S. Economy, Global Industrial Growth Underway Using Long Leading Indicators

Lakshman Achuthan, co-founder of the Economic Cycle Research Institute (ECRI), told WSJ TV today that ECRI's long leading indicators were predicting a cyclical economic slowdown in U.S. that could last a couple of quarters.
"Now when we look this summer, the first call is a slowdown in global industrial growth (manufacturing sector). Looking at U.S. specific cycle indicators, we see in the wake of that call for a global industrial slowdown, we see a slowdown in the broad U.S. economy (services, construction etc)."

Watch the full interview below. ECRI has free excel data and charts available at their website which includes the U.S. Future Inflation Gauge, U.S. Leading Home Price Index, U.S. Weekly Leading Index (and growth), U.S. Coincident Index and U.S. Lagging Index.

Robert Shiller: Home Price Slide Could Last 20 Years, 10 to 25 Percent Decline Wouldn't Surprise Him

Robert Shiller, Yale Economist and co-founder of the S&P Case-Shiller Home Price Index (which recently confirmed a double dip in housing), told Reuters at the S&P Housing Summit that he wouldn't be surprised if home prices fell 10 to 25%, and the slide could last for 20 years. He said, "I'm a little pessimistic. We've been in a five year decline already, since the peak in 2006, and I don't see evidence that we're coming out of it."  I embedded the Reuters video after the jump. Shiller also said the U.S. economy faces the risk of a double-dip recession and a potential Japanese scenario.

Did you know there used to be two S&P/Case-Shiller Home Price ETFs that traded? (DMM and UMM) There was no market for them so they shut down. From MacroMarkets (co-founded by Robert Shiller): "MacroShares Major Metro Housing allow investors to express a bullish or bearish view on the movement of the S&P/Case-Shiller Composite-10 Home Price Index."

Why Japan Will Turn to Solar Energy Following Fukushima - Guest Post

Solar Two Power Plant (Wikimedia Commons)
Guest post by OilPrice.com

Why Japan Will Turn to Solar Energy Following Fukushima

As the dire news continues to leach out of Fukishima, the silver lining in its nuclear cloud is that renewable energy technologies, despite their daunting start-up costs, are receiving renewed scrutiny.

Make no mistake - given the trillions of dollars invested over the last five decades in nuclear energy, the industry and its lobbyists will not go down without a fight, promoting new, "safe" reactor designs, etc. etc. etc.

But the Fukushima debacle has finally bared the industry's darkest secret, it inability to manage its nuclear waste. The six reactor TEPCO Daichi Fukushima stored all its waste onsite, and the spent fuel rods and their lack of cooling have been a major contributor to the high radiation levels observed around the facility. Worse for nuclear power proponents has been the reluctant admission by TECPO that three of the complex's six reactors apparently did in fact suffer a meltdown.

So, what's next?

Hydroelectric facilities are a proven technology, but expensive and take years to construct.

Wind power also has substantial start-up costs, is erratic, and faces environmental opposition.

With the notable exception of bioethanol, little real money has gone into biofuel renewable, particularly in the U.S., where bioethanol produced from corn has a hammerlock on both subsidies and crop insurance, despite rising concerns about shifting land from food to energy production is driving up costs of foodstuffs. The leading contenders for bio-renewables, camelina, algae and jatropha, all are starved for investment as a result.

Which leaves solar energy, whose major draw back up to now has been its high cost to generate kilowatts.

S&P, FX, Natural Gas, Roubini, Jim Rogers, Tepper, Albert Edwards, Gary Shilling Updates

Frankfurt Exchange (Source: Flickr/orb_cz)
Important Linkfest!
  • Charts That Matter Next Week (With Focus On S&P 500 H&S Formation) - Zero Hedge, 6/12/2011 (Podcast and report)
  • Rogers Short on U.S. Techs, Bonds, an American Bank, Emerging Markets, Long Currencies and Commodities ("the next recession will be worse than 2008") - Reuters Insider, 6/10/2011
  • Revisiting The "Ice Age" - SocGen's Albert Edwards Charts America's Descent Into Japan, And The Market's Descent To S&P 400 - Zero Hedge, 6/11/2011
  • Tepper's Take on QE3 - CNBC Video, 6/10/2011

    His email to CNBC: "Basically Bernanke said no QE3. If SPX is down a couple hundred points and financial conditions tightened maybe they would reconsider.  There is no logic to QE3 now and the only result might be more food and energy inflation. We're in a difficult investing environment. Short and sweet."

    Here is an interesting story related to Appaloosa's involvement in Washington Mutual's bankruptcy with trust preferred securities - Hipster Battles Funds - WSJ (retail investors ftw)
  • Investors Can Profit From 'Inevitable" Financial Crisis: Mobius (Templeton Asset Management) - CNBC - 6/7/2011