Monthly Archives: August 2014

A Visit to the Libyan Stock Exchange [2013]

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“Under the ‘Great Socialist Republic’ of Qaddafi’s regime, shares were routinely provided to the people.  By management’s estimate, approximately 260,000 Libyan citizens own shares but are not yet authorized to sell them.  Under the current government, this will change beginning in August 2014.  If this holds true, expect to see a significant drop in prices across the LSM as the ‘main street’ Libyan sells his shares en masse for a quick payday.  Most people here don’t place much value in stocks; it is likely that many do not even understand what a stock is.  Forty-two years of socialism cannot be undone overnight.”

http://www.pathfinder.vc/2013/04/04/a-visit-to-the-libyan-stock-exchange/

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Seeking cheap stocks, chaos no problem? Try Libya

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“Investing in Libyan stocks may sound like an absurd idea at a time when the North African country is descending into chaos and armed militias seize oil ports or ministries at will.  Despite the turmoil, Libya is a potentially rich nation, sitting on Africa’s largest proven oil reserves. Western brands such as Nike and Marks & Spencer have set shop in the same upmarket Tripoli district as the stock market.  The Libyan bourse is tiny even by regional standards with a market value of around $3 billion, compared with its Cairo counterpart’s $70 billion and Casablanca’s $50 billion.  Libya’s chaos knocked the market down by 25 percent in 2013; it has lost some 40 percent since its 2007 launch.”

http://www.reuters.com/article/2014/02/23/us-libya-bourse-idUSBREA1M00820140223

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Benghazi ‘falls to al-Qaeda-linked rebels’

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“Armed groups claimed to have taken control of Libya’s second largest city, Benghazi, after defeating units loyal to a renegade general, taking over their barracks and seizing tanks, rockets and hundreds of boxes of ammunition.  The main police headquarters was on Thursday still smouldering after it was hit by shelling a day earlier, and smoke rose from the barracks of al-Saiqa soldiers loyal to General Khalifa Haftar, once the strongest security body in the city until it was overrun earlier this week.  Among the factions is Ansar al-Sharia, the group accused by the US of leading a September 11, 2012 attack on a diplomatic facility in the city that killed the ambassador and three other Americans.”

http://www.aljazeera.com/news/middleeast/2014/07/benghazi-falls-al-qaeda-linked-rebels-2014731161541245353.html

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Bill Bonner: This Market Is a Titanic in Search of an Iceberg

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“Think how nice Julius Caesar’s life might have been if he had just stayed home on the Ides of March, as his wife, Calpurnia, advised. Think how much better the passengers would have enjoyed their cruise if they could just forget the night the Titanic hit an iceberg.  As for investors, had they just stayed in cash for the 10 worst days in the last 25 years, their annual rate of return would have been about 60% higher.  Don’t worry. Yesterday was hardly one of the 10 worst days. It wasn’t a good day. But it wasn’t terrible. Just a bump. Which makes us wonder. Are our worst days behind us, like icebergs astern? Or ahead?”

http://www.bonnerandpartners.com/this-market-is-a-titanic-in-search-of-an-iceberg/

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Not Worth a Continental

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“There are many paths by which political leaders may destroy a country’s economy through hyperinflation. But those leaders who follow the standard checklist of the most common components to collapse can generally be assured that the economy will be destroyed.  War (Can be one major war, or, as in today’s world, perpetual small wars); Depletion of gold reserves;  Excessive Debt (Create a debt level that is beyond the ability to repay);  Devaluation of currency (Print massive amounts of currency to diminish debt);  Loss of control of inflation (Inflation morphs into hyperinflation—a state in which citizens actively try to rid themselves of the currency, as it is devaluating so quickly.)”

http://www.internationalman.com/articles/not-worth-a-continental

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Bill Bonner: The God-Like Vanity of Central Planners

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“Large-scale central planning can be effective, but only by pulverizing the delicate fabric of evolved civilized life.  It is a future that practically no one wants, because it means destroying the many different futures already in the works – marriages, businesses, babies, baptisms, hunting trips, shopping, investments and all the other activities of normal life.  Not all central planning produces calamities on that scale, of course. But all, to the extent they are effective, are repulsive. The more they achieve the planners’ goals, the more they interfere with private goals, and the more they retard or destroy the progress of the human race.”

http://www.bonnerandpartners.com/the-god-like-vanity-of-central-planners/

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Bill Bonner: The Fed’s Next Move

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“Janet Yellen is being pushed into a corner by the Fed’s own pronunciamientos. It has been threatening to raise interest rates when its inflation and employment targets are hit. And hit they have been. So what’s she gonna do?  Our guess is she means what she says. She is a smart woman. But she is not smart enough to see that she has been talking claptrap… and not courageous enough to admit that her career is built on it.  If she sees any sign the ‘recovery’ has been put in danger by her attempts to normalize interest rates… she will back up. That is the history of the last seven years of Fed policy… and it is probably the best guide to the months ahead.”

http://www.bonnerandpartners.com/the-feds-next-move/

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The Single Most Important Strategy Most Investors Ignore

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“‘If I scare you this morning, and as a result you take action, then I will have accomplished my goal.’ That’s what I told the audience at the Sprott Natural Resource Symposium.  But the reality is that I didn’t need to try to scare anyone. The evidence is overwhelming and has already alarmed most investors; our greatest risk is not a bad investment but our political exposure.  And yet most of these same investors do not see any need to stash bullion outside their home countries. They view international diversification as an extreme move. Many don’t even care if capital controls are instituted.  I’m convinced that this is the most common—and important—strategic investment error made today.”

http://www.caseyresearch.com/cdd/the-single-most-important-strategy-most-investors-ignore

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50 Billion Reasons Why Warren Buffett Is Bearish

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“The fact that Warren Buffett isn’t buying anything right now despite a $50 billion-plus cash hoard is pretty telling.  According to Bloomberg reports, cash at Berkshire Hathaway ‘rose past $50 billion at the end of June, the first time it finished a quarter above that level since he became chairman and chief executive officer more than four decades ago.’  This is a startling sign, because it could indicate that the Oracle of Omaha simply doesn’t see anything out there worth throwing his money at — and could indicate that, broadly, there is not a lot of value to be had in the current environment.”

http://investorplace.com/2014/08/warren-buffett-berkshire-cash-50-billion/

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Venezuela Seeks Buyer for Citgo Petroleum Refinery Unit

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“Petroleos de Venezuela SA is seeking a buyer for Citgo Petroleum Corp., its U.S. refining and marketing company, in a deal that may be worth as much as $15 billion.  The government of President Nicolas Maduro probably is looking to sell offshore refineries to boost hydrocarbons exports to China, raise cash and reduce the risk of having assets seized as part of PDVSA lawsuits abroad, GlobalSource Partners’ Ruth de Krivoy and Tamara Herrera said today in an e-mailed report to clients.  The sale of U.S. assets ‘would put PDVSA in a better position to negotiate settlements should adverse decisions be handed down in pending international arbitration cases,’ they wrote.”

http://www.bloomberg.com/news/2014-07-31/venezuela-seeks-buyer-for-citgo-petroleum-refinery-unit.html

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