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Wednesday, December 5, 2012

On the eve of the Feast of Saint Nicholas...

...a time especially dear to this writer, it is fitting to honor the much beloved Archbishop of Myra.

For more information, check out the Greek Orthodox Archdiocese website.

Saturday, November 17, 2012

Red Sox 2012 Demise : The Impossible Truth

Who really managed this team ?

Was it Bobby V (above), or his amazing look-alike. Carrot-Top ?

Star Wars Glut In the Offing ?

'Prequels',  can you say ???

Could be.  In The Guardian, Ben Child reports :

In the wake of Disney's $4.05bn purchase of all rights to Star Wars, filmgoers were expecting a new trilogy of films released over several years. But according to a number of US sites, new Lucasfilm chief executive Kathleen Kennedy has a far more aggressive plan. She is quoted as telling the new edition of Entertainment Weekly, which is due to hit US news stands today, that Disney envisions "two or three films a year".

Monday, November 12, 2012

Pats' Defensive Lapses -- The Impossible Truth

What could possibly account for the Patriots' bizarrely inconsistent defense ? The impossible truth can now be told.

During the NFL lockout, Pats' defensive coordinator Matt Patricia (above) was abducted, and his place taken by an uncanny look-alike (below), none other than Silent Bob, of Chasing Amy and Dogma fame.

UPDATE : Confidential sources confirm that Silent Bob is actually the second cunning substitute for Matt Patricia, the first having been Dr. John, the Night-Tripper (below) of Right Place, Wrong Time fame. 

Wednesday, October 3, 2012

Should You Be Afraid of Bogus Gold ?

If you're planning to invest in physical gold -- in bullion or bars directly, or even through some of the Gold ETF's -- the answer, apparently, is yes. Even reputable precious metals dealers have been taken in by counterfeiters. 

As Fox News NY reported, "What makes it so devious is a real gold bar is purchased with the serial numbers and papers, then it is hollowed out, the gold is sold, the tungsten is put in, then the bar is closed up. "

What to do ? SEEKING ALPHA contributor 'The Financial Lexicon' offers the following advice in a recent post :
First, stay small. There is less economic incentive to fake a gold coin as opposed to a gold bar. It doesn't mean there aren't fake gold coins floating around (there are). But if you stick with a reputable dealer, and you know what a real coin looks like, you are less likely to get scammed than you might be when purchasing a gold bar. Moreover, if you are nervous about buying a fake gold coin, you can always choose to purchase coins that dealers have purchased directly from the U.S. or Canadian Mints.
 Additionally, if you are worried about fake silver coins, you could consider purchasing some of the older 90%, 40%, or 35% silver coins that used to be in circulation. These include silver dollars, half-dollars, quarters, dimes, and nickels. There would far less economic incentive to fake these coins. Although, again, it does not mean that fakes don't exist.
 Furthermore, regarding silver bars: if you want to purchase physical bars and think you can avoid fakes by turning to silver, be aware that silver bars stuffed with lead are known to exist.
 Finally, if the possibility of purchasing fake precious metals is a worry with which you do not want to concern yourself, you could always purchase the miners as a means of gaining exposure to precious metals. One of the more popular ways of diversifying exposure to the miners is through the Market Vectors Gold Miners ETF (GDX).

Spell-checker Follies at THE ECONOMIST

This, from the front-page of THE ECONOMIST online,
Another legal bomb
New York’s attorney general files a bazaar complaint against JP Morgan Chase
It is plain, from an examination of the related article, that 'bizarre' rather than 'bazaar' was intended.

Looking for Stock Market Safety in Consumer Staples ?

Then check out David Trainer's SEEKING ALPHA piece, "The Good, the Bad and the Ugly in Consumer Staples ETFs". 

After reviewing six funds - Select Sector SPDR-Consumer Staples (XLP), 
Vanguard Consumer Staples Index Fund (VDC), PowerShares Dynamic Food and Beverage (PBJ),
PowerShares Dynamic Consumer Staples Sector (PSL), Rydex S&P Equal Weight Consumer Staples (RHS), and First Trust Consumer Staples AlphaDEX Fund (FXG) - Trainer concludes that XLP is "the only consumer staples sector ETF to rank better than the overall sector. Therefore, the only ETF we would recommend is XLP."
Essentially, Robert Goldsborough of Morningstar agrees with Trainer, in his SEEKING ALPHA post,"A Defensive Consumer Staples ETF For An Uncertain Economic Environment":
Consumer Staples Select Sector SPDR (XLP) is the lowest-priced and most liquid exchange-traded fund for broad exposure to a basket of defensive, mega-cap consumer discretionary names. As investors become increasingly concerned about potentially chilly economic winds ahead that could affect more discretionary consumer spending, they might want to consider this ETF, which holds the 41 consumer staples firms that are contained in the S&P 500 Index...
 Investors seeking nondiscretionary exposure to the consumer have plenty of choices in the ETF world. In our view, the most similar alternative to XLP is the smaller and less liquid Vanguard Consumer Staples (VDC) (0.19% expense ratio). Even though XLP owns only 41 stocks versus the 108 companies that VDC holds, the two funds show performance that has been almost perfectly positively correlated over the past five years (99%).

Saturday, September 22, 2012

Spell-checker Follies, UK Edition

Today's example, courtesy of Helia Ebrahimi of The Telegraph, in her article "QE3 will not fix America's problems, warns Paul Volcker" :
Mr Volcker, who has been a pivotal force in post-crisis regulation – as well as the architect behind the “Volcker Rule” that bares his name – addressed the Institute of Chartered Accountants in Scotland conference about how to revive the economic fortunes of the western world.
Unless Ms. Ebrahimi intended some irony here, she surely meant to write 'bears his name'.

Friday, September 21, 2012

Worried that Helicopter Ben Will Snatch U.S. Gold ?

Or more precisely, that the Federal Government will confiscate it, as it did once before, during FDR's presidency ?

You're not alone. So does fabled investor Marc Faber.

What to do ? In his SEEKING ALPHA post, Jared Cummans suggests,  among other things,  purchasing offshore physical gold ETF's such as Physical Swiss Gold Shares (SGOL) and Physical Asian Gold Shares (AGOL).

Saturday, August 18, 2012

Will China's Consumers Save It From a Hard Landing ?

Not likely, argues Cam Hui in his SEEKING ALPHA piece,'Could China Be Rebalancing Growth To The Wrong Consumer?' , excerpted below.

* * *

China's official policy is to rebalance its engine of growth away from infrastructure-led investment to the Chinese consumer (for examples, see "Crouching Tiger, Hidden Profit" and "China Beyond The Hard/Soft Landing Debate"). Having hit a recent slow patch, it appears as if the Chinese authorities have decided to pull out all the stops to stimulate growth using the same old policy tools of infrastructure spending again ahead of the leadership changeover this year...

Already, the strains are starting to show. The Chinese competitive advantage of a seemingly inexhaustable supply of cheap labor is starting to erode. Wage pressures are rising as fewer and fewer workers are migrating from the countryside to search for work in the cities. In reaction, the decision of multinational companies to offshore production to low-wage countries like China is not the no-brainer it once was. Indeed, a recent poll by Boston Consulting Group (full study here) indicates that more than one-third of American manufacturers are considering reversing the offshoring trend and bringing the jobs back to American shores...

This development must be particularly worrisome to Chinese policymakers and makes the objective to rebalance growth away from infrastructure spending to the Chinese consumer far more urgent. In this way, the Chinese economy would be able to grow more sustainably by creating a new source of demand from their own domestic economy. Alas, it does not appear likely to happen as refocusing growth away from infrastructure spending would seriously hurt Party insiders who have gotten obscenely rich in this boom...

Ironically, the latest Chinese move to engage in the more-of-the-same infrastructure-based stimulus will have the effect of rebalancing growth away from infrastructure spending to the consumer. But instead of the Chinese consumer, it will be the American consumer as the reverse offshoring trend starts to take hold and accelerate.

Legal gambling a fix for state finance woes ?

Not so, reports Steven Malanga in his CITY JOURNAL article,'The State Gambling Addiction' :

"At least 12 states, facing downturn-depleted coffers, have already expanded gambling efforts over the last three years—including Massachusetts, which became the 16th state to sanction casinos. But this approach is utterly misguided, since gambling has often disappointed as a fiscal tool and as an economic-development strategy. As legal gambling has spread, competition for limited dollars has intensified, and the new gambling enterprises seem merely to be siphoning money from elsewhere in the economy instead of generating new economic activity. “This is not an industry that creates wealth,” says Les Bernal, head of the Stop Predatory Gambling Foundation. “It’s an industry that transfers wealth.” And that’s before taking into account the documented social costs, including the disturbing fact that a significant part of gambling revenues comes from problem gamblers."

Tonight, Blogger DJ gets literary, kinda sorta

Elvis Costello - Everyday I Write the Book
Missing Persons - Words
Icicle Works - Whisper To A Scream
Bruce Springsteen - Dancing In The Dark

Friday, August 10, 2012

In memory of a great friend, a good man, recently departed.

Eternal be your memory.

Desperate to flee fiat currencies and over-priced bonds for hard assets ?

Looking for serious hard-asset diversification in one handy ETP ?

Then check out Richard Bloch's post in SEEKING ALPHA, "Betting With Jim Rogers: Beyond The Agricultural Stocks". Bloch describes in some detail Market Vectors' Hard Asset Producers ETF (HAP), which is based on the Rogers - Van Eck Hard Assets Producers Index :
This is an interesting index because it's designed to track the overall performance of a diverse set of more than 350 hard asset companies. So instead of simply weighting companies by market capitalization, the sectors are first defined into broad categories - allocated based on estimates of global demand and production.
The current sector weightings look like this:  

Thursday, July 12, 2012

UPDATED It's summer. Time for summer music...

from Blogger DJ. Submitted for your approval, a playlist that features The Sandals, The Beach Boys, Dick Dale, Huey Lewis and The News, Bryan Ferry, Roxy Music, Dirty Vegas, Telepopmusik, Santana, The Motels, Kajagoogooo, Peter Frampton, Paul Young, Traffic, Don Henley, Eddie Cochran, and many others.

Thursday, July 5, 2012


The wife and I took in Wes Anderson's latest effort at the local Cinema 1-2-3-4000, in a shoebox theater populated with grey-hairs such as ourselves, and after more than a half-hour of ads and previews were rewarded with a film of great imagination and, dare I say it, fun.

What's this movie like, or about ?  To me, it was like spending two hours in a comfy, rambling cottage by the sea.  What's it about ? And what do the reviewers say ? Glad you asked.

Roger Ebert of the Chicago Sun-Times (3.5 stars) :
Wes Anderson's mind must be an exciting place for a story idea to be born. It immediately becomes more than a series of events and is transformed into a world with its own rules, in which everything is driven by emotions and desires as convincing as they are magical. "Moonrise Kingdom" creates such a world and takes place on an island that might as well be ruled by Prospero. It's set in 1965, though it might as well be set at any time.
Manohla Dargis of the New York Times (NYT Film Critics Choice) :

Like many of Mr. Anderson’s films, including his last one, the truly fantastic “Fantastic Mr. Fox,” there’s a deliberate, self-conscious once-upon-a-time quality to “Moonrise Kingdom.” From the minute the film opens, quickly settling on a needlepoint image of a house — a representation of the one in which Suzy lives, where it all begins — Mr. Anderson, who’s more fabulist than traditional realist, underscores the obvious point that you’re watching a story. This heightened sense of self-awareness is underscored by the exhilarating camera movements that sweep across the house from right to left, left to right, and up and down, and take you on a time and space tour through the house, past Suzy’s father and mother, Mr. and Mrs. Bishop (Bill Murray and Frances McDormand, both touching).

Owen Gleiberman of Entertainment Weekly
Anderson hasn't lost his puckishly charming genius for cinema-as-diorama visuals. Yet a lot happens in this film, and not a lot of it matters. For some viewers, Moonrise Kingdom may be movie heaven, another bric-a-brac-jammed bauble to place alongside The Life Aquatic With Steve Zissou and The Darjeeling Limited. Personally, though, I wish that Anderson would come out from under the glass, or at least change what he's doing under there. 

Friday, May 18, 2012

Need some real Rock 'N' Roll to blast you off that couch ? Blogger DJ's got it...

Mitch Ryder and The Detroit Wheels - C.C. Rider
Mitch Ryder and The Detroit Wheels - Sock it to Me Baby
Steve Miller Band - Livin ' in the U.S.A.
Steppenwolf - Born To Be Wild
Jefferson Airplane - She Has Funny Cars
Moby Grape - Omaha
Big Brother and the Holding Company - Combination of the Two
Van Halen - You Really Got Me
The Kinks-  All Day and All of the Night
Bow Wow Wow - Do You Wanna Hold Me
Duran Duran -  Girls On Film
Bryan Ferry -  Don't Stop The Dance
Fire Inc - Tonight is what it means to be young
Fire Inc - Nowhere Fast
The Pointer Sisters - Fire
Frankie goes to hollywood - Relax
Haddaway -  What is Love ?
KC and The Sunshine Band - Please Don't Go 

Sunday, April 22, 2012

Belatedly I post Rita Wilson's Column on 'Greek' Easter in the Washington Post

Rita Wilson and husband, whatsisname.
Rita Wilson’s Big fat Greek Orthodox Easter
By Rita Wilson

Here are some of the things that non-Greeks may not know about Greek Easter: We don’t do bunnies. We don’t do chocolate. We don’t do pastels.

We do lamb, sweet cookies, and deep red. The lamb is roasted and not chocolate, the sweet cookies are called Koulorakia and are twisted like a braid, and our Easter eggs are dyed one color only: blood red. There is no Easter Egg hunt. There is a game in which you crack your red egg against someone else’s red egg hoping to have the strongest egg, which would indicate your getting a lot of good luck.

Holy Week, for a Greek Orthodox, means you clear your calendar, you don’t make plans for that week at all because you will be in church every day, and you fast. Last year, in addition to not eating red meat and dairy before communion, my family also gave up sodas for the 40-day Lenten period.

During one particularly stressful moment, there were many phone calls amongst our kids as to whether or not a canned drink called TING, made with grapefruit juice and carbonated water was, in fact, a soda and not a juice, which our then 10-year-old decided it was, so we had a Ting-less Lent.

No matter where I find my self in the world I never miss Easter, or as we call it, Pascha. I have celebrated in Paris, London, New York City, Los Angeles, and in Salinas, California at a small humble church that was pure and simple.

When we were kids, our parents would take us, and now as parents ourselves we take our children to many of the Holy Week services including the Good Friday service where you mourn the death of Jesus by walking up to the Epitaphio, which represents the dead body of Christ, make your cross, kiss the Epitaphio, and marvel at how it was decorated with a thousand glorious flowers, rose petals and smells like incense.

Some very pious people will crawl under the Epitaphio. I have always been so moved to see this. There is no self- consciousness in this utter act of faith. There is no embarrassment to show symbolic sorrow at the death of our Saviour.

Thursday, April 19, 2012

More info on Gold Demand in India

...provided by goldbug GoldCore, in his SEEKING ALPHA post, 'Central Banks Favour Gold As IMF Warns Of 'Collapse of Euro' And 'Full Blown Panic in Financial Markets'  (see first excerpt below), and from Christian Magoon, in his SEEKING ALPHA post, 'Will Gold Dodge These 2 Bullets?' (see second excerpt below).

BTW, the IMF warning which GoldCore headlines ? It's not prominent in the April 2012 IMF World Economic Outlook Report, but cited among 'Several trail risks' that 'are hard to quantify but merit attention'. For the skinny on the WEO Report, click here. For the full report, click here

* * *

India's central bank is further debasing the Indian rupee which will lead to further safe haven demand for gold, and is still the world's largest buyer of gold.
India has had its first rate cut in 3 years and was cut by a higher than expected 50 basis points to 8%.
This comes despite inflation being higher in March compared to last month surging to 9.47%.
The recent tax increase on gold was a futile attempt to curtail gold demand - as Indian policy makers realised accelerating inflation would lead to further gold demand.

Wedding season is at its peak in India now and Akshaya Tritiya, a large gold buying festival, happens later this month. There are forecasts of a 25% increase in demand during the Hindu festival next week after demand was curtailed during the gold jewelers strike (see Other News below).
Deepening negative real interest rates in India and the risk of an inflation spiral will see Indian demand remain robust and it may even accelerate if inflation deepens - contrary to suggestions that Indian gold demand will fall precipitously

* * *


There are two nations that lead the world in gold consumption - India and China. Both countries have strong cultural ties to gold and heavily support the number one driver of gold demand: jewelry. However, now both countries are showing symptoms that could materially impact their consumption of gold thus firing a shot at gold prices. China has publicly revised its economic growth expectations downward. India is expected to do so as well after recent discouraging GDP data. These economies which were significant growth engines - even during the financial crisis - are slowing down. That will weaken gold demand and thus prices.

In addition, India has now targeted gold with a move to double the tax on imported gold. While a 21 day national jeweler's strike in reaction to increased gold taxation recently ended, it seems likely that the doubling of taxes on imported gold will occur. This is a negative influence on gold demand in the largest consumer of gold in the world as of the 2011 calendar year.

So can this demand bullet be dodged? The answer is yes. China's economic slowdown could occur in a soft enough way to minimize impact. In addition, its central bank could use weakened gold prices as an opportunity to purchase more reserves to back up its massive exposure to paper currency including the U.S. Dollar and Euro. India is trying to jumpstart its slowing economy by cutting interest rates and the cash reserve ratio for banks. This excess liquidity has the potential to boost economic growth and thus demand for gold. In addition it also has the potential to strengthen the rupee, a currency that has weakened due to repercussions from the EU debt crisis. A stronger rupee makes gold more affordable to the second most populated country on Earth.

The second bullet [threatening the price of Gold] is the strengthening of the U.S. Dollar. Gold is primarily denominated in U.S. Dollars so a stronger dollar means gold is worth less dollars. What's behind the threat of a stronger U.S. Dollar? Simple, the EU debt crisis. Recently Spain has elevated this threat, with France potentially right behind it. In late 2011 it was fueled by the flare up in Greece. Gold swooned versus the U.S. Dollar during that period as investors went "risk off" and jumped into greenbacks. (see chart near the end of the article) Now as Spain heats up and pivotal elections near in France, this bullet seems to have gained in size and velocity.

So can this bullet be dodged by gold? The answer is not entirely, or in other words no. Gold has already been impacted by drama in Spain, but substantial damage has not occurred yet. If Spain can be contained and bailed out by the EU establishment, the impact on gold could be similar or less to Greek crisis. Remember markets have been through this event not that long ago.

The big concern is not Spain but an implosion of France. The debt to GDP ratio in France officially is 86% - more than Spain or Britain. Unofficial calculations put that figure closer to 150%. Perhaps that's why the markets are making France pay almost twice the borrowing costs of EU partner Germany. Don't tell that to the Socialist party in France however, as they dislike austerity and instead want to spend their way out. (more on that below from the BBC) In addition, this party predictably has issues with Germany's austerity push within the EU community. President Sarkozy, under election pressure, has even begun to break with the Germans and the ECB.

Wednesday, April 18, 2012

Monday, April 16, 2012

U.S. not alone : France has an education crisis too

according to Geert De Clercq of REUTERS, whose dispiriting article, 'Young, French and desperate' is excerpted below.

* * *

Some 150,000 pupils leave France's ruthlessly selective education system every year with no diploma whatsoever. Many end up in bleak suburbs around the big cities, where youth unemployment is high and crime is rife.

Those who do have diplomas face the barrier of a rigid labor market that overprotects the older generation and offers young people an endless series of temporary contracts, forcing them to delay mortgage and marriage for years.

In December, Gallup International's annual survey of 51 countries found that France is the most pessimistic country in the world about the economic outlook, and the French are more downbeat than they have ever been in the past 30 years.

The only politician who has put youth front and centre of his platform is Socialist challenger Francois Hollande, running neck-and-neck with Sarkozy in voting intention polls for the first round, and leading him for the May 6 runoff.

"If I am elected president, I want to be judged against one and only one objective: whether young people will have a better life at the end of my mandate in 2017 than in 2012," Hollande said in a keynote speech in January.

This may be even harder than balancing the state budget, another of his campaign promises.
His first priority is to reform schools. France has a meritocratic tradition dating back to the creation of a uniform, free and secular public education system in the 1880s. Children are tested from primary school onwards, with the aim of selecting the best students and directing them to top schools.

Those who do best in exams go on to top high schools such as the Henri-IV and Louis-le-Grand Lycees in Paris, and continue via even more selective "prepa" classes to the "grandes ecoles" that train a few thousand elite students per year.

The very best vie for the Ecole Nationale d'Administration (ENA), which takes only about 100 students a year, who become top civil servants, ministers and CEOs of large companies. Hollande himself is an "enarque", as ENA graduates are called.

A system that guarantees success for so few produces failure for many, especially those whose parents do not have the means or the knowledge to help their children play the game.

In "La machine a trier" ("The Sorting Machine"), published last year, four researchers describe the French education system as one that continually classifies and eliminates, condemning the bottom part of every class to perpetual failure.

Olivier Galland, one of the authors, said that in a society with mass access to education, schools need a northern European focus on individual ability, teamwork and success for everyone.
"In a way, French school is a continuation of the Ancien Regime where the diploma replaces the nobility title," he said, referring to the period before the 1789 revolution.

All candidates in this year's election agree the education system is sick, but they prescribe different remedies.

Hollande says he will create 60,000 new jobs in education, pledges to halve the number of students who leave school without a diploma and plans to give every youngster between 16 and 18 some form of training or assistance.

Reversing a Sarkozy decision, Hollande also plans to add half a day to the school week - without adding subject matter - to give children more time to learn.

Thursday, April 12, 2012

Fed Up with BLS and its CPI BS ?

Like, say the Bureau of Labor Statistics' latest Consumer Price Index Summary ?
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in February on a seasonally adjusted basis, the U.S.  Bureau of Labor Statistics reported today. Over the last 12 months,  the all items index increased 2.9 percent before seasonal adjustment.
Then check out the American Institute for Economic Research (AIER), and its EPI (Everyday Price Index).
The Everyday Price Index increased 1.3 percent in January 2012 and another 1.1 percent in February. During 12 months ending in February, it increased 4.9 percent. This is somewhat slower than the increase over the same time last year. During 12 months ending in February 2011, the EPI increased 6 percent. All numbers are before seasonal adjustments.
The EPI, a new proprietary index developed by the American Institute for Economic Research, reflects prices of goods and services people tend to buy frequently such as food, utilities, and fuel. It stands in contrast to the more widely known Consumer Price Index, which is issued by the Bureau of Labor Statistics and includes a comprehensive set of prices of all consumer products and services, including big-ticket items such as cars, appliances, and housing.
The recent increase in the EPI is driven primarily by increases in the cost of motor fuel. Motor fuel prices increased 3.5 percent in January and another 4.8 percent in February.
Another category of goods that posted consistent and substantial increases is prescription drugs. Prices went up 0.9 percent in January and 1.1 percent in February.
At the opposite end of the spectrum, personal care products and services, which include items such as toothpaste and haircuts, hardy increased in price at all: 0.1 percent in January and no change in February.
For the AIER's more detailed analysis, 'The EPI Reflects Basic Economic Change', click here.

Wednesday, April 11, 2012

Is it time to re-invest in Japan ?

I don't think so, not after reading Bruce Kasting's piece in
Financial Sense, 'Betting on the Race to the Bottom',
excerpted below.

* * *

 As bad as Euroland appears, and as shaky as the USA looks, Japan looks like it might end up winning the race to the bottom.

There are two very big issues that Japan is confronting; energy and taxes. Both of these issues will come to a head over the next sixty days. I don’t see a soft landing.

Fourteen months ago Japan had 54 operating nukes. Today it has one. By the end of May, it will have none.

There are two significant consequences of the shutdowns: (A) soaring imports of expensive hydrocarbons (LNG, oil and coal), and (B) this summer, there will be as much as a 12% shortfall in electricity to to cool homes and run factories.

The shutdown of the nukes has already led to a major turnaround of Japan’s external trade position. In 2011 Japan reported its first annual trade deficit in over 30 years. The shortfall came to Y2.5T ($32B). In 2012 that number could be as large as $100B.

The shortage of “juice” this summer will cause cut backs in supply to big industry. As a result, industrial production will fall. Depending on the severity of the summer slump, Japan could face negative GDP growth for the full year. This will translate into more red ink in the national budget (already 10+% of GDP). More debt will have to be issued to cover the gap. Japan’s already insane Debt to GDP (230%) has nowhere to go but up.

Japan is leading the world into trouble as far as demographics go. The Social Security and medical costs of its aging population are exploding.

Unlike in the USA, most of the Japanese leaders have acknowledged that the country's position is un-sustainable.

Sunday, April 8, 2012

Chasing Yield from Floating Loan Funds ?

With interest rates on conventional bonds touching rock bottom, you wouldn't be the only investor searching for yield wherever it can be found, like, say, from floating rate loan or bank loan funds.

What are these vehicles, and what are the risks and rewards of investing in them ?

Glad you asked.

Check out the articles cited below.

BTW, both Fidelity and T Rowe Price have open-end mutual fund offerings in this area,  the respective ticker symbols being FFHRX and PRFRX.

* * *

Investopedia - 'Floating-Rate Mutual Funds: Rewards And Risks'

Vanguard - 'Promise of bank-loan funds tempered by credit risk'

Vanguard - 'A Primer on Floating Rate Funds'

Wall Street Journal - 'Are 'Floating-Rate Loan' Funds Still a Smart Move?'

Wall Street Journal -'How Much Will 'Floating Rate' Funds Really Float ?'

Forbes - 'Are Floating Rate Funds The Wrong Answer To Rising Rates?'

FINRA News Release - 'FINRA Warns Investors About Chasing Returns in Structured Products, High-Yield Bonds and Floating-Rate Loan Funds'

FINRA - 'The Grass Isn’t Always Greener—Chasing Return in a Challenging Investment Environment'

Seeking Alpha - Russell Bailyn - 'Floating Rate Bank Loans: An Asset Class Suited to This Environment'

Seeking Alpha -Michael Terry - 'Loan-Based Closed-End Funds: Current Income And Inflation Protection'

Seeking Alpha - Steve Bavaria - 'After Proving Themselves in the Crash, Loans Now Seen as 'Third Asset Class''

Wednesday, March 28, 2012

And speaking of ETF's and ETN's, what's the latest from ETF Deathwatch ?

First, the skinny...
"Most of the 291 products on Deathwatch face a real possibility of closure.  The largest risk is not, however, that they may close in the future.  No, the more notable risk is that they suffer from extremely poor liquidity today.  Wide bid/ask spreads, little to no volume behind the quotes, and sleeping market makers can potentially inflict much more damage on unknowing investors than a fund closure.

"Still don’t think illiquidity is a problem?  Here’s a fact to consider: On the last day of February, a total of 152 ETFs and ETNs had no trades for the day.  Their volume was zero.  Seven went the entire month with no volume.  One product, iPath Long Extended 3x Russell 1000 TR ETN (ROLA), has yet to post its first trade of 2012.

"What makes ETFs unique and limits discounts and premiums is their ability to create and redeem shares through in-kind exchange.  However, this process requires trading activity.  The creation/redemption process typically involves 50,000 shares of the ETF.  The ETFs on Deathwatch routinely take weeks or months to generate that much volume.  For them, the creation/redemption process is virtually non-existent.  There is no ability to arbitrage the price to the net asset value."

For a detailed listing of endangered funds, click here.

Looking for Commission-free ETF/ETN Trading ?

Check this nifty utility on the ETF Database, which allows you to find a commission-fee trading platform by ETF/ETN offering, or to explore commission-free offerings by provider/platform.

Wednesday, March 14, 2012

Five Leadership Lessons from James T. Kirk...

...compiled by Alex Knapp of FORBES, are as follows :

1. Never Stop Learning
2. Have Advisors With Different Worldviews
3. Be Part Of The Away Team
4. Play Poker, Not Chess
5. Blow up the Enterprise

Knapp summarizes...
In his many years of service to the Federation, James Kirk embodied several leadership lessons that we can use in our own lives. We need to keep exploring and learning. We need to ensure that we encourage creativity and innovation by listening to the advice of people with vastly different opinions. We need to occasionally get down in the trenches with the members of our teams so we understand their needs and earn their trust and loyalty. We need to understand the psychology of our competitors and also learn to radically change course when circumstances dictate. By following these lessons, we can lead our organizations into places where none have gone before.
For the details of Knapp's analysis, click here.

Sunday, February 26, 2012

Jazz/Rock Fusion is on Blogger DJ's Sunday Menu

...which highlights Weather Report, a group formed by alumni of Miles Davis' pioneering Jazz/Rock Fusion album 'In a Silent Way'.

Hard to believe most of the recordings below are three-plus decades old.

Weather Report - Nubian Sundance
Weather Report - Teen Town
Weather Report - A Remark You Made
Weather Report - Boogie Woogie Waltz
Weather Report - Black Market
Weather Report - Elegant People
Weather Report - Port Of Entry
Weather Report - Mysterious Traveller

U.S. way past check-out time in Hotel Afghanistan

The latest enormities--assassinations of U.S. personnel excused as reactions to the accidental burning of Korans--should convince us to bid a not so fond, immediate farewell to Afghanistan. Of course, on our way out, we should blow up any materiel we can't take with us, and grant asylum to our most loyal Afghan friends, assuming they'd rather live than be slaughtered upon our exit. We should maintain a shadow covert presence sufficient to cause mischief both with the despicable, duplicitous Paks--who knowingly sheltered Bin Laden and assiduously abet the Taliban--as well as the Iranians, both of whom wish to play the Great Game in Afghanistan.  Let's not waste another drop of blood, or another dime, trying to do whatever we thought we were trying to do there. The lives of U.S. servicemen ravaged and wasted there can never be redeemed, especially at the cost of more American lives.

Thursday, February 16, 2012

Tuesday, February 7, 2012

Sometimes a song is irresistible...

Such is the case with 'Con te partiro',  which I heard for the first time last week in Santurce, Puerto Rico, in the atrium of the Museo de Arte, where the Puerto Rico Philharmonic--rehearsing for a later concert --accompanied soprano Magda Nieves and tenor Rafael Davila.

Composed by Francesco Sartori with lyrics by Lucio Quarantotto, 'Con te partiro' was popularized by Andrea Bocelli, who first sang it at the San Remo Song Festival in 1995.

Here, for your listening pleasure are Andrea Bocelli's solo Con te Partiro as well as Time to Say Goodbye,  an English version of the song featuring Bocelli and Sarah Brightman.

* * *


Quando sono solo sogno all'orizzonte
e mancan le parole
si lo so che non c'luce
in una stanza quando manca il sole
se non ci sei tu con me, con me
su le finestre
mostra a tutti il mio cuore
che hai acceso chiudi, dentro me
la luce che hai incontrato per strada
Con te partiro paesi che non ho mai
veduto e vissuto con te
adesso sui li vivro
Con te partiro su navi per mari
che io lo so no, no, non esistono piu
con te io li vivro

Quando sei lontana sogno all'orizzonte
e mancan le parole
e io solo so che sei con me, con me
tu mia luna tu sei qui con me
mio sole tu sei qui con me, con me, con me, con me
Con te partiro
Paesi che non ho mai
veduto e vissuto con te
adesso so li vivro
Con te partiro
su navi per mari che, io lo so
no, no, non esistono pia
con te io li rivivo
Con te partiro
su navi per mari che, io lo so
no, no, non esistono pio
con te io li rivivro
Con te partiro...
Io con te!

* * *

When I’m alone
I dream on the horizon
and words fail;
yes, I know there is no light
in a room where the sun is absent,
if you are not with me, with me.
At the windows
show everyone my heart
which you set alight;
enclose within me
the light you
encountered on the street.
I’ll go with you,
to countries I never
saw and shared with you,
now, yes, I shall experience them.
I’ll go with you
on ships across seas
which, I know,
no, no, exist no longer;
with you I shall experience them.

When you are far away
I dream on the horizon
And words fail,
and, Yes, I know
that you are with me;
you, my moon, are here with me,
my sun, you are here with me,
with me, with me, with me.
I’ll go with you,
To countries I never
Saw and shared with you,
now, yes, I shall experience them.
I’ll go with you
On ships across seas
which, I know,
no, no, exist no longer,
with you I shall experience them again.
I’ll go with you
On ships across seas
Which, I know,
No, no, exist no longer;
with you I shall experience them again.
I’ll go with you,
I with you.

Wednesday, February 1, 2012

Blogger DJ recalls 'New Haven' Songs

That's how Blogger DJ and his Mrs. describe songs they heard on the radio when they were in grad school, in New Haven, songs full of love and soul, songs that continue to evoke fond memories.

Not all of the songs below date from the '70's, but all have the same warmth and feel.

The Spinners - Could It Be I'm Falling In Love
The Delfonics - La La Means I Love You
Rose Royce - I Wanna Get Next To You
The Chi-Lites - Oh Girl
Roberta Flack/ Donny Hathaway - The Closer I Get To You
Amy Winehouse - Will you still love me tomorrow
The Three Degrees - When will I see you again
The Spinners - Mighty Love

Thursday, January 19, 2012

Tonight, Blogger DJ goes operatic...

...with the finale of Wagner's Parsifal

Nur eine Waffe taugt: -
die Wunde schliesst
der Speer nur, der sie schlug.
Sei heil - entsündigt und entsühnt!
Denn ich verwalte nun dein Amt.
Gesegnet sei dein Leiden,
das Mitleids höchste Kraft
und reinsten Wissens Macht
dem zagen Toren gab.

But one weapon serves:
only the Spear that smote you
can heal your wound.
Be whole, absolved and atoned!
For I now will perform your task.
O blessed be your suffering,
that gave pity's mighty power
and purest wisdom's might
to the timorous fool!

For the full text and translation follow this link.

From time to time, even professed Christians need to be reminded of what the Apostle Paul wrote in his first letter to the Corinthians

Paul 1 Corinthians 13

1 If I speak in the tongues of men or of angels, but do not have love, I am only a resounding gong or a clanging cymbal.

2 If I have the gift of prophecy and can fathom all mysteries and all knowledge, and if I have a faith that can move mountains, but do not have love, I am nothing.

3 If I give all I possess to the poor and give over my body to hardship that I may boast, but do not have love, I gain nothing.

4 Love is patient, love is kind. It does not envy, it does not boast, it is not proud.

5 It does not dishonor others, it is not self-seeking, it is not easily angered, it keeps no record of wrongs.

6 Love does not delight in evil but rejoices with the truth.

7 It always protects, always trusts, always hopes, always perseveres.

8 Love never fails. But where there are prophecies, they will cease; where there are tongues, they will be stilled; where there is knowledge, it will pass away.

9 For we know in part and we prophesy in part,

10 but when completeness comes, what is in part disappears.

11 When I was a child, I talked like a child, I thought like a child, I reasoned like a child. When I became a man, I put the ways of childhood behind me.

12 For now we see only a reflection as in a mirror; then we shall see face to face. Now I know in part; then I shall know fully, even as I am fully known.

13 And now these three remain: faith, hope and love. But the greatest of these is love.

International Thursday #3 : China's Growth Story Strictly Fiction ?

That may be too severe a judgment. Still, before you buy the GDP stats recently released by the Chinese, read the fine print, urges Patrick Chovanec in SEEKING ALPHA:

Today, China’s National Bureau of Statistics (NBS) released the end-of-the-year GDP figures of 2011. According to official tallies, China’s GDP grew 8.9% in the 4th Quarter, a steady but modest decline compared to 9.7% in Q1, 9.5% in Q2, and 9.1% in Q3. GDP growth for the full year was 9.2%.
There are two pieces of data I saw today, easily lost in the fine print, that I found particularly revealing. First, the NBS disclosed that real estate investment accounted for 13% of China’s GDP in 2011 (compared to Stephen Roach’s estimate of 10%), and grew at a rate of 27.9%. However, I noticed something that I admit I missed before, in my earlier calculations — that this is a nominal rate (not adjusted for inflation) whereas the GDP growth rate figures are real (they take inflation into account). The real (and therefore comparable) rate of expansion for real estate investment in 2011 was 20.0%. 
So I went back and re-ran the numbers, using these more accurate figures. Given GDP growth of 9.2% (a higher starting point than I used in my initial calculations), a real growth rate of 20.0% for real estate implies a real growth rate of 7.6% for the rest of the economy. If, in 2012, real estate construction were merely to level off at zero growth, and the rest of the economy was unaffected, that would bring overall GDP down from 9.2% to 6.6%. That’s higher than the number I initially came up with, but still well into “hard landing” territory. The fall-off of 2.6% is also closer to the 3.0% drop I initially calculated than the 1% decline predicted by Stephen Roach. I errored in my back-of-the-envelope exercise, but my point remains a valid one. Keep in mind, these calculations assume no impact on dependent industries like steel and cement, no impact on the financial system, and no correlation to related risks in the Chinese economy — the latter two of which I will expand upon in my next post of the series.
Keep in mind, these calculations assume no impact on dependent industries like steel and cement, no impact on the financial system, and no correlation to related risks in the Chinese economy. 
How realistic is a leveling-off of real estate investment? This is where the second piece of data I noticed fits in. The NBS — somewhat curiously– did not publish December figures for property and other fixed asset investment. However, the Financial Times did interview Wei Yao, an economist at Société Générale, who made some of his own calculations. According to him, the growth rate for real estate investment saw a rapid deceleration from 20.1% in November to 12.3% in December (it’s clear from looking at the original source data that these are nominal rates; the real rates to plug into the GDP equation would be substantially lower). 
The FT article also notes a nearly 25% decline in new housing starts in December and a 26% year-on-year rise in unsold property. And it’s not merely real estate investment that’s decelerating. Nominal growth in fixed asset investment as a whole — hitherto the main driver of growth in the Chinese economy — dropped from 25% y-on-y in October to 21.2% in November and 18.5% in December. That’s precisely the kind of broader deceleration I’m going to be focusing on the next installment of my analysis.

* * *

Paul Santos, also in SEEKING ALPHA, sees a Chinese downturn already occurring. Beyond the drop in the Baltic Dry Index, Santos points to "a serious slowdown in demand, and that, too, is already registering on public statistics, pertaining to cement consumption, automobile production or pig iron ", whose broader implications are as follows :
First, it's perhaps not a coincidence that commodities have shown to be on a downtrend for months now. But given that the real time impact that still seems to be happening now, one would expect such a downtrend to continue. Crude has managed to avoid most of the brunt of this downtrend, but taking into account the magnitude of China's importance, one would expect that Crude, too, will be hit.
This trend will obviously not only hit commodities, it will also hit commodity producers hard, both countries and companies, with a special emphasis on iron producers like VALE, BHP Billiton BHP and Cliffs Natural Resources CLF, given China's position as the world's largest producer of steel by far, as well as steel's importance to the Chinese investment boom. It is no coincidence that these companies are trading at such low multiples, this is what happens in these kinds of cyclical industries when they are about to face a negative cycle.
Beyond iron and other commodities, one would expect coal to also be hit hard. Not only will it be facing a huge slowdown on the steel industry, but it also faces incredibly low natural gas prices as well, which will pressure coal prices on electricity generation. Here, too, the shares have already taken a huge impact, yet if this slowdown continues one would expect that impact to extend further and for prices and estimates to plunge a lot more. Some names that might be hit further include Peabody Energy Corporation BTU, CONSOL Energy CNX, Alpha Natural Resources ANR, Arch Coal ACI, Patriot Coal Corporation PCX and others. This trend was actually in the news on Friday, with Patriot Coal speaking of lower exports for coal used in steel making.
The Chinese economy slowdown is no longer some speculative story. It's real and already showing in the economic statistics. This slowdown can have broad market impact, and will hit some sectors particularly hard. While I highlighted commodities in general, and iron plus coal in particular, the impact will certainly be much broader.

International Thursday #2 : It's the Falklands--or the Malvinas--Again !

What's the big deal about the Malvinas, or if you prefer, the Falkland Islands ?  What's at stake there, besides national pride and maybe a few tons of fish, in the year 2012 ?

Glad you asked.

Oil, baby, oil.

As BLOOMBERG's Brian Swint reports,
Oil explorers are targeting 8.3 billion barrels in the waters around the islands this year, three times the U.K.’s reserves. Borders & Southern Petroleum Plc (BOR) will drill the Stebbing prospect next month, one of three Falkland wells that Morgan Stanley ranks among the world’s top 15 offshore prospects this year. Meanwhile, Rockhopper Exploration Plc (RKH) is seeking $2 billion from a larger oil company to develop the Sea Lion field, the islands’ first economically viable oil find.  
“The area is underexplored and highly prospective,” said New York-based Morgan Stanley analyst Evan Calio. “These could be like the high-impact wells in Ghana and Brazil a few years ago that opened up a whole host of basins.” 
A major drilling success will further raise the political temperature as Argentina maintains its claim over the U.K’s South Atlantic territory, 300 miles (483 kilometers) from the Latin American coast. President Cristina Fernandez de Kirchner said Britain is taking her country’s resources, while Thatcher’s successor David Cameron yesterday accused Argentina of a “colonialist” attitude that didn’t account for islanders’ rights.  
[Prime Minister] Cameron has approved contingency plans to bolster U.K. troops on the islands, and Prince William, a search and rescue pilot and the second in line to the British throne, may spend six weeks there this year, the Times reported today in London.
Tensions between the Brits and Argentinians over this oil have been building for some time, exacerbated as plans by a British company to drill in the area advanced, according to Rory Carroll and Annie Kelly of the GUARDIAN (Feburary, 2010) :
"What they are doing is illegitimate," said Jorge Taiana, the foreign minister. "It's a violation of our sovereignty. We will do everything possible to defend and preserve our rights."
Last week the government summoned Britain's chargé d'affaires – the ambassador was out of the country – to receive a protest note. Buenos Aires has reportedly warned Argentina-based oil companies against exploring waters around the Falklands and there are rumours it may use civilian vessels to disrupt the rig.
British diplomats brushed aside the protests and said it was longstanding UK policy to let the Falkland Islands government develop a hydrocarbons industry within its waters. They did not expect any Argentinian military forays.
Authorities on the islands were also unconcerned. "There will be quite a bit of rhetoric and Argentina has every right to protest if it wishes. But it will no doubt conduct itself in a proper manner," said Rendell. She was unaware of any plans by Buenos Aires to disrupt drilling.
And in December of 2011, Sara Miller Llana of the CHRISTIAN SCIENCE MONITOR reported that the nations of South American trading bloc Mercosur--Brazil, Paraguay, Uruguay and Argentina -- announced they would bar Falklands-flagged vessels from their ports.

Friday, January 13, 2012

SKYNET Alert : Aerial Drones Coming to a Police Department Near You ?

That depends, reports Larry Copeland in USATODAY, on how the FAA responds to requests from domestic law enforcement to use UAV's, unmanned aerial vehicles such as those employed in Afghanistan and Pakistan for various missions.

The FAA is expected this year to propose new rules for smaller unmanned aircraft, a process that will include input from the public, says FAA spokesman Les Dorr. The agency also is talking with the Justice Department and national law enforcement groups "about possibly trying to streamline the process of applying for certificates of authorization" to operate such planes, he says. 
The FAA authorized the Physical Science Laboratory at New Mexico State University to research the issues involved. "We're extremely interested in being able to pave the way to integrate unmanned aircraft into the civil airspace," says Doug Davis, deputy director of the Technical Analysis and Applications Center at NMSU.
One of the chief obstacles to widespread use of UAVs is their inability to "see and avoid" other aircraft as required by federal regulations, a key to flight safety. Davis says he believes operators on the ground can comply with federal rules if they can see the aircraft and the surrounding environment.
That's not to say such drones aven't been tested, or even employed within the confines of the U.S. on police business.
As  Copeland notes...
Drones have flown in the USA for several years but have been limited to restricted airspace and to portions of the borders with Canada and Mexico.
The Miami-Dade Police Department has tested two 18-pound UAVs equipped with a camera for about 18 months, Sgt. Andrew Cohen says. The department has been licensed to operate the craft up to 200 feet in the air, but the drone must remain within 1,000 feet of the operator.
Moreover,  Brian Bennett of the L.A. Times' Washington Bureau reported that in June of last year, police in North Dakota's Nelson County "made the first known arrests of U.S. citizens with help from a Predator [B]", one of two such UAV's which are based at Grand Forks Air Force Base and which, according to Bennett, had flown two dozen surveillance missions since June [2011]. 
Whose drones are they, and what are they doing in North Dakota ? Glad you asked.
The drones belong to U.S. Customs and Border Protection, which operates eight Predators on the country's northern and southwestern borders to search for illegal immigrants and smugglers. The previously unreported use of its drones to assist local, state and federal law enforcement has occurred without any public acknowledgment or debate.
Congress first authorized Customs and Border Protection to buy unarmed Predators in 2005. Officials in charge of the fleet cite broad authority to work with police from budget requests to Congress that cite "interior law enforcement support" as part of their mission.
In an interview, Michael C. Kostelnik, a retired Air Force general who heads the office that supervises the drones, said Predators are flown "in many areas around the country, not only for federal operators, but also for state and local law enforcement and emergency responders in times of crisis."
But former Rep. Jane Harman (D-Venice), who sat on the House homeland security intelligence subcommittee at the time and served as its chairwoman from 2007 until early this year, said no one ever discussed using Predators to help local police serve warrants or do other basic work.
Using Predators for routine law enforcement without public debate or clear legal authority is a mistake, Harman said.
"There is no question that this could become something that people will regret," said Harman, who resigned from the House in February and now heads the Woodrow Wilson International Center for Scholars, a Washington think tank.

Thursday, January 12, 2012

"It's the Economy, Stupid !" Second of Three : If the Fed Says It's Time to Panic, Housing-Wise, It's Time to Panic

suggests Bruce Judson, in his piece, "The Foreclosure Crisis: A Nation In Denial".  

Lost in the various MSM whirlwinds surrounding the New Hampshire Primary, NFL Playoffs, and the usual welter of celebrity riff-raff stories were (1) the fact that Hellicopter Ben Bernanke sent an unsolicited memo warning Congress' finance committees about how housing imperils the economy and (2) the fact that three Fed grandees echoed Bernanke's concerns in separate speeches.

What to make of all this ? Glad you asked. Excerpts from Judson's enlightening article [where all emphases are mine] appear below.

* * *

This memo is notable for several reasons. First, it's important to remember that when the Fed speaks, it does so in sober, limited terms. So an unprompted Fed warning suggesting "a persistent excess of supply" and a "resultant drag on the economy" is comparable to the Secretary of Homeland Security holding a press conference to warn of the risk of an imminent national emergency. Second, an unprompted memo from Bernanke to the House means that he is so deeply worried he felt the need to speak out in as strong a voice as his position permits. Third, the Fed rarely speaks on issues unrelated to its direct activities. Indeed, The Wall Street Journal subsequently wrote that, "For an institution that jealously guards its independence, the Federal Reserve is wading into treacherous political waters." This further underscores the severity of the risks the Fed foresees.

Finally, a further indicator of the depth of the Fed's concerns is what may be an apparently unprecedented set of coordinated speeches by three top Fed officials. On Friday, the presidents of the New York and Boston Fed banks, and Betsy Duke, a Fed Governor, all gave speeches detailing the need for aggressive action to spur a housing recovery.

Today, an estimated 29 percent of all homes with mortgages are underwater. In addition, at least one respected analyst estimates that a total of 14 million homes will be foreclosed on from 2007 to the end of the crisis [emphasis mine]. This represents a hard-to-imagine one in every four mortgages. With foreclosures increasing, there is now such a looming imbalance of supply and demand that, as the Fed notes, further decreases in home prices are likely. Some believe home price reductions of another 20 percent are likely. This would, in all likelihood, have disastrous consequences on at least three fronts--and ripple effects that are impossible to predict.

First, many homeowners would be so far underwater that massive walkaways would be likely. The negative impact on consumer spending of such price declines would almost certainly lead to a vicious cycle of more job losses, leading to further walkaways by struggling consumers.

Second, the mortgage securities market would be in chaos. Nonperforming loans would lead to the forced recognition that bank capital (based on the value of mortgages in bank portfolios) is weak or insufficient.

Third, it is almost impossible to imagine foreclosures on the massive scale anticipated without dire social consequences or even some form of social unrest.

Detailed proposals for addressing this extraordinary risk do exist [see above]. However, they will require a determined effort. There are solutions, but they are not simple.

Thursday, January 5, 2012

Debt Bomb's Ticking even in Germany !

Per capita world debt,  illustrated in DER SPIEGEL
In part 3 of a 5-part DER SPIEGEL article on the world debt crisis, Alexander Jung details just how profligate German politicos have been, and what the nation's actual liabilities are. Some excerpts follow.

* * *

In addition to the official national debt of roughly €2 trillion, there are €4.6 trillion in future benefit promises to retirees, the sick and people requiring nursing care -- commitments that are not documented anywhere. When these commitments are included, Germany's real debt is not 80 percent of GDP, as quoted officially, but 276 percent.

As a result, an invisible mountain of social insurance debt rests on every German citizen's shoulders. According to Raffelhüschen [Bernd Raffelhüschen, an economist at the Market Economy Foundation] , to pay off this debt, each citizen would have to pay the government €307 a month throughout his life -- all because the government makes financial promises it cannot keep. It even touts its promises as benefits, and yet citizens are the ones paying for them in the end. The method has been part of the system for generations.

Wednesday, January 4, 2012

Abundant Natural Gas From Shale, Without Water Pollution ?

Apparently it is possible for the U.S. to have its energy cake and eat it too : abundant natural gas from shale without having to consume or pollute large quantities of water through the process of hydraulic fracturing or 'fracking' ( see figure to the right).

In place of water, gas fracturing or 'Gasfrac' employs LPG (liquid petroleum gas) in the extraction process, is nearly pollution-free, and far less destructive to the geological formations involved than its hydraulic counterpart, as Nawar Alsaadi explains in a recent SEEKING ALPHA post, Gasfrac Energy Services: Fracturing Game Changer .

For more on this technology, check out Anna Driver's article in REUTERS, Propane substitutes for water in shale fracking.