Monthly Archives: June 2013

EMC raises $5.5bn via corporate bonds to fund share buybacks

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“The sharp shift in Treasury yield rates over the past few weeks means time is of the essence for those companies looking to undertake a capital return program and fund it with bonds.  The rate rise increases the cost of funding and limits the ability to take advantage of an arbitrage between the current lower cost of issuing debt versus paying dividends on shares they could otherwise buy back with the fund raising.  ‘There is the obvious arbitrage there,’ said one head of debt capital markets at a Wall Street bank. ‘Why pay a dividend in the 3% to 5% range, when you can issue bonds at 2% or less and buy back those shares?'”

http://uk.reuters.com/article/2013/06/03/uscorpbonds-tech-emc-idUKL1N0EF1VA20130603

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Euro Pacific Capital Global Investor Newsletter – June 2013

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“The central premise of Abenomics seems to be that the Bank of Japan could succeed in pushing inflation up to 2% without raising the rates on long-term debt. To do this, one would have to assume that bond investors would accept negative interest rates, even while a falling yen was eating away at principle.  Such an outcome is not consistent with demonstrable human behavior.  If the investors didn’t play ball, it was assumed that the Bank of Japan could step up their quantitative easing and buy the bonds that investors were rationally selling. But the BoJ is already buying 70% of the new government debt.”

http://www.europac.net/global_investor_newsletter_june_2013

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Get Out of Muni Bond ETFs Now

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EPJ13

“The biggest exchange-traded fund tracking the $3.7 trillion U.S. municipal market is selling at its deepest discount ever to the value of its assets.  The $3.5 billion iShares S&P National AMT-Free Municipal Bond Fund, known as MUB, touched $100.42 (the net asset value is 105.3). This is the lowest since April 2011 according to, data compiled by Bloomberg. The move reflects yields on benchmark 10-year local debt climbing as high as 2.68 percent , the most since October 2011.  The plunge follows investors pulling $1.86 billion out of U.S. muni mutual funds from Jan. 1 through June 19, Lipper US fund Flows data show.”

http://www.economicpolicyjournal.com/2013/06/get-out-of-muni-bond-etfs-now.html

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Marijuana Stocks: How to Legally Invest in the Ultimate Cash Crop

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“In short, we just don’t know enough about these businesses yet to make a low-risk investment. Does this mean you shouldn’t look into Medbox or Cannabis Science? Not necessarily. But investors would need to treat the position as money taken to the casino — speculative and expendable. As time goes on, and politicians continue to be influenced by the more than 70 percent of our nation’s population who believe pot should be legal for medical purposes, the marijuana industry will be seen more and more as a “legitimate” business. For opportunistic investors, there will be some incredible investing opportunities.  For now, though, just chill, dude.”

http://www.dailyfinance.com/2013/06/12/marijuana-stocks-legally-invest/

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National Lawyers Guild Report Supports Further Marijuana Legalization Initiatives

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“As the nation waits for a response from the White House, the NLG joins other organizations and individuals in calling for the end to marijuana prohibition. ‘Marijuana legalization will create new jobs, generate millions of dollars in tax revenue, and allow law enforcement to focus on serious crimes,’ said Brian Vicente, NLG member and one of the primary authors of Colorado’s legalization amendment. ‘It would be a travesty if the Obama administration used its power to impose marijuana prohibition upon a state whose people have declared, through the democratic process, that they want it to end.'”

http://www.nlg.org/high-crimes-strategies-further-marijuana-legalization-initiatives

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U.S. Conference of Mayors asks Obama for flexibility on marijuana

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“The United States Conference of Mayors unanimously passed a historic, bipartisan resolution calling on the Obama administration to stop interfering with state and local efforts to deal with the problems caused by marijuana prohibition. ‘This resolution will amplify the voices of local officials and voters who are sick and tired of President Obama’s administration doing the exact opposite of what candidate Obama said he was going to do, which was respect state marijuana laws,’ a spokesperson for drug reform advocacy group Marijuana Majority said.  The resolution, co-sponsored by mayors from 18 cities, lays out a long list of grievances against marijuana prohibition.”

http://www.rawstory.com/rs/2013/06/24/u-s-conference-of-mayors-asks-obama-for-flexibility-on-marijuana/

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Feds, Anaheim Try to Seize $1.5M Building . . . With No Charges Against the Owner

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“Anaheim small business owner Tony Jalali faces the loss of his office building, which is worth $1.5 million, even though he has committed no crime. The city of Anaheim is colluding with federal prosecutors to do an end-run around state laws to take away Jalali’s building because he rented space to medical marijuana dispensaries, even though they operated legally under California law.  Jalali is fighting back. Represented by the Institute for Justice, he is challenging the constitutionality of the taking of his land to put an end to the civil forfeiture in the U.S. District Court for the Central District of California in Santa Ana, Calif.”

http://news.heartland.org/newspaper-article/2013/06/25/feds-anaheim-try-seize-15m-building-no-charges-against-owner

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Sitka Pacific Capital Management Client Letter, May 2013

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“In many respects, the market action over the past 2 years — in stocks and gold — seems to reflect a misunderstanding of how periods of monetary expansion affect consumer prices and asset prices.  In the pages that follow we’ll highlight a few of these monetary expansion/inflation misunderstandings, and we’ll explain why equity investors should be growing more pessimistic — not optimistic — in light of current market valuations and the Fed’s continued quantitative easing.”

http://www.sitkapacific.com/wp-content/uploads/May-2013-Strategy-Letter4.pdf

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Donald Trump: Extradition Process Is Too Slow; Just Kill Edward Snowden

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EPJ13

“You know, spies in the old days used to be executed. This guy is becoming a hero in some circles. Now, I will say, with the passage of time, even people that were sort of liking him and were trying to go on his side are maybe dropping out… We have to get him back and we have to get him back fast. It could take months or it could take years, and that would be pathetic.  This guy’s a bad guy and, you know, there’s still a thing called execution. You really have to take a strong… You have thousands of people with access to material like this. We’re not going to have a country any longer.”

http://www.economicpolicyjournal.com/2013/06/donald-trump-thinks-extradition-process.html

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Don’t Fall Victim to Hoarding

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“Thanks to the courageous Edward Snowden, America now knows the NSA has, for seven years, collected data on many millions of our phone calls, emails and other communications, even when its top officials have testified that it had not.  And things look like they are going to get even worse. Hot on the heels of the NSA revelations, now the habitually anti-tax haven and pro-tax Organization for Economic and Community Development (OECD) wants in on the action, by forcing all countries into useless data-hoarding of private information in a very big way.”

http://sovereign-investor.com/2013/06/25/dont-fall-victim-to-hoarding/

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