Natural Gas Futures Plunge 4% after bearish storage data

© Reuters.  U.S. natural gas prices tumble to 3-week low after supply report

Investing.com – Natural gas futures plunged sharply to hit a three-week low on Thursday, after data showed that U.S. natural gas supplies rose more than expected last week.

On the New York Mercantile Exchange, natural gas for delivery in July tumbled 11.8 cents, or 4.16%, to trade at $2.729 per million British thermal units during U.S. morning hours. Prices were at around $2.790 prior to the release of the supply data.

A day earlier, natural gas prices shed 0.2 cents, or 0.07%, to close at $2.847. Futures were likely to find support at $2.710 per million British thermal units, the low from May 7, and resistance at $2.915, the high from May 27.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended May 22 rose by 112 billion cubic feet, compared to expectations for an increase of 99 billion and following a build of 92 billion cubic feet in the preceding week.

Supplies rose by 113 billion cubic feet in the same week last year, while the five-year average change is an increase of 95 billion cubic feet.

Total U.S. natural gas storage stood at 2.101 trillion cubic feet as of last week. Stocks were 737 billion cubic feet higher than last year at this time and 18 billion cubic feet below the five-year average of 2.119 trillion cubic feet for this time of year.

Meanwhile, weather forecasting models called for slightly warmer than average temperatures across the U.S. over the next ten days, although not yet enough to significantly boost cooling demand.

Spring usually sees the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.

Elsewhere on the Nymex, crude oil for delivery in July fell 79 cents, or 1.37%, to trade at $56.72 a barrel, while heating oil for July delivery dropped 0.41% to trade at $1.852 per gallon.

Advertisements

Iraq About to Flood Oil Market in New Front of OPEC Price War

(Bloomberg) — Iraq is taking OPEC’s strategy to defend its share of the global oil market to a new level.

The nation plans to boost crude exports by about 26 percent to a record 3.75 million barrels a day next month, according to shipping programs, signaling an escalation of OPEC strategy to undercut U.S. shale drillers in the current market rout. The additional Iraqi oil is equal to about 800,000 barrels a day, or more than comes from OPEC member Qatar. The rest of the Organization of Petroleum Exporting Countries is expected to rubber stamp its policy to maintain output levels at a meeting on June 5.

While shipping schedules aren’t a promise of future production, they are indicative of what may come. The following chart graphs planned tanker loadings (in red) against exports.

As in previous months, Iraq might not hit its June target – export capacity is currently capped at 3.1 million barrels a day, Deputy Oil Minister Fayyad al-Nimaa said on May 18. Still, any extra Iraqi supplies inevitably mean OPEC strays even further above its collective output target of 30 million barrels a day, Morgan Stanley says. The following chart shows OPEC increasing output in recent months against its current target.

Defying the threat from Islamic State militants, Iraq has been ramping up exports from both the Shiite south – where companies like BP Plc and Royal Dutch Shell Plc operate – and the Kurdish region in the north, which last year reached a temporary compromise with the federal government on its right to sell crude independently.

Protect your portfolio profits http://www.youroffshoremoney.com

How To Hide Money From The Taxman : Bloomberg

Wealthy Americans – and those that want to be wealthy-  are not running out of ways to hide their money and lower their tax burden.The rest of the world is  getting less hospitable to American tax avoidance but here is a summary of four ways to outrun the tax burden.. A 2010 federal law, the Foreign Account Tax Compliance Act, requires all foreign banks to report to the IRS on their American customers. It’s working so well that Americans abroad say they need an introduction to open a bank account – even for perfectly legitimate purposes.

What’s left for the secretive and tax-averse ?

Here are four ways that all aspirants to wealth can still get secrecy and/or lower taxes.

1) Go overseas / offshore

There are legitimate reasons to have an overseas bank account. Americans who live overseas might want ready access to their money. An offshore trust may offer more protection from creditors or lawsuits than one set up in the U.S. An overseas limited liability company, or LLC, might let you hide aspects of your business from competitors. That’s “totally legal,” says lawyer Martin Press . “You can have money anywhere in the world.”

It’s not the tax dodge it used to be. Traditionally, banks in tax havens such as Switzerland haven’t reported those accounts to the IRS, making it possible to hide not just what’s in the account but its entire existence.

2) Hide inside a shell and keep your name off public records

The rich often use shell companies, like LLCs, to buy property or investments, so that the company name, not the individual, shows up on public documents. Another reason these structures are used to buy into hedge funds, private equity, and venture capital funds: Rich investors mostly want to avoid endless solicitations for other investments. “Once you get on somebody’s list, you get hit with every proposal,” says  Such, a tax attorney. While other investors won’t know your business, the IRS still will because LLCs are required to file tax returns every year- when owned more than 10 % by an American. When the LLC is owned by a trust ( see next section) the ownership – by a trust is not known because trusts are not registered – or because the public record only shown nominees not the actual owners.

3) Use a trust

Trusts can be used to keep assets hidden from nosy neighbors and to keep tax bills down, within reason. Income from property or investments held in the trust goes to the beneficiaries free of estate or gift taxes. Beneficiaries also can avoid regular income taxes—if the trust pays the taxes rather than the individual. Another advantage of trusts is the way they pass automatically to heirs after your death. Otherwise, your possessions and the details of your estate can get caught in the probate system, which is often quite public. Trusts are most often not registered – no public register means no one knows unless you tell them.

4) Hire an expert

The wealthy can still afford to hire sophisticated accountants, who spend years searching for legal ways to lower tax bills. A recent U.S. Senate report identified a few esoteric strategies that rely on derivatives or deferred compensation to lower tax bills. Most of the time, the goal isn’t to hide money but to control the timing of income and what form it arrives in. For example, taxpayers can pay lower rates if income is in the form of long-term capital gains rather than ordinary income.

Still, clients are getting cautious about aggressive tax planning, especially if it involves any overseas transactions, says Jack A. Bass, tax strategist with Jack A. Bass and Associates.Tax payers now know the IRS is watching what happens overseas, and the effect is similar to when drivers know police are out looking for speeders. “They’re not driving 95 down the Interstate,” Gannaway says. “They’re driving 75 with their foot close to the brake. However, the IRS is looking for millions in accounts and transfer payments – not a few hundred thousand or even a few million. If you don’t have a public criminal record or a google search revealing lawsuits you are not on anyone’s radar “.

 The Key : The Most Important Step: Take Action

Why Peter Schiff is still wrong about gold

While Peter Schiff, and others of his ilk, have remained staunchly bullish on gold since the all-time highs in 2011, I feel they have done a terrible disservice to those who have followed them for the last three-plus years of (relative) pain.

Schiff is an uber-bull, or gold bug, as some may call him, who continually calls for $5000 gold. Since markets move in two directions and not just up, I believe that anyone who is uber-anything should be dismissed, as there is no appropriate substance being proffered by simply saying the word up every day. Ultimately, they will be right, but, in this case, you have to deal with a multi-year 40%-60% drawdown before eventually being correct.

Myra Saefong had a piece earlier this week reiterating Peter Schiff’s perspective about gold going to $5000. So, let’s look at Mr. Schiff’s underlying perspective a little more closely, and see if he is finally going to be right. Or should people consider our perspective that Mr. Schiff’s followers have more pain to experience in the near term, as metals have a lower low to be seen before the next bull phase takes hold.

First, last year, Mr. Schiff was of the exact same perspective regarding gold, and, he has been of the same perspective on gold since it topped in 2011. However, we called the top to gold within six dollars of the actual top in 2011, while most were still looking for gold to exceed the $2000 mark along with Mr. Schiff. In fact, we even called the downside targets correctly even before gold topped. Since that time, gold has lost 41% of its value from its high to low during this correction. Yet, Mr. Schiff has stayed staunchly bullish during this 40% draw down.

Second, last year, Mr. Schiff maintained the perspective that “renewed weakness in the dollar and strength in oil and other commodities will add to gold’s appeal during 2014.” Despite its drop, Mr. Schiff simply dismisses it as being “completely out of touch with reality.

I want to digress for a moment and point out something to those that feel that the dollar must drop in order for metals to rise. There is nothing written in stone that states that the dollar must fall for the metals to rise. In fact, if one closely observed the market action since November of 2014 until the end of January of 2015, gold rallied almost 15% while the dollar rallied over 9%. And, yes, we expected both markets to rally together at that time, too.

Third, Schiff seems to claim that only further quantitative easing will cause the metals to rise. But, this was the same perspective he had with all the previous QE programs were instituted by the Fed. We had QE1, QE2, Operation Twist, and then QE3, and metals are still near their lowest levels in four years. Yet, we are to believe that QE4 will be the one that supposedly causes the metals to rise to $5,000? Does anyone else see the inconsistency in this argument?

Fourth, in Schiff’s recent interview, he noted that “what is holding gold back . . . is the idea that the Fed is going to be raising interest rates.” Wait a second. For years, all people have been talking about is that a rise in interest rates evidences inflation, which is the real driver of gold. So, isn’t the common theme that gold will go up when rates go up, because that is supposedly a signal of inflation?

Yet, when looking a little deeper into what Schiff is now suggesting, it seems that low interest rates are needed to cause gold to rally? Is not a drop in rates commonly viewed as being associated with periods of deflation? So, is it deflation which will cause gold to rally or is it inflation?

The answer is that gold’s movement is not based upon either if you look honestly at the history of gold’s movements. Let’s take a look at the 2007-2009 time frame, which evidenced the most recent period of deflation in our markets, and see if we can glean anything from the metals action in relation to deflationary market pressures and dropping interest rates.

We all know that the S&P 500 topped in October of 2007 and began an estimated 300-point decline into March of 2008, and then we saw a corrective bounce in the equities for a couple of months. During that same period of time, the metals continued to rally. So, here we have “evidence” of the metals supposedly rising during a period of deflation.

But, when we then look toward the May 2008-March 2009 severe decline in the equity market, we witnessed the metals also experienced significant declines within that time period. In fact, gold lost a little more than 30% (yet, rallied again, thereafter). So, when one is presented with these facts, does it make sense that the metals are surely going to rise during periods of deflation and/or low interest rates?

One has to put aside their personal biases toward the metals and recognize that they are not necessarily going to rise during periods of deflation, or due to the drop in the dollar or interest rates. Oddly enough, metals can rally during periods of deflation or dollar appreciation, and they can fall during periods of deflation and dollar appreciation.

The same applies to periods of inflation as well. I know you are likely thinking to yourselves, “Avi has really lost it this time.” But in all honesty, how can you come to terms with the reality of how they reacted during the 2008 broad equity market carnage, which was clearly a deflationary event? Did they act as the supposed “safe haven” during the strongest period of deflationary pressures experienced since the Great Depression, especially while interest rates were dropping precipitously?

The one thing said by Mr. Schiff with which I agree is that “the moves in gold come in waves.” And, these wave movements are driven by waves of sentiment. That is exactly what we track. In fact, not only did the tracking of market sentiment allow us to make various calls, such as the drop into the November 2014 low, but at this time, unlike Mr. Schiff, we still believe that lower lows and more pain are still in store for those that have been continually bullish since 2011.

So, I would urge anyone reading prominent pundit “expectations” about metals to test them against the reality of the price action history. If someone suggests to you that it is a matter of interest rate sensitivity or an inflation/deflation argument or a factor of quantitative easing, you need to think long and hard about if the price history of metals supports their proposition. I suggest that it will not.

Rather, metals are purely a sentiment trade, and unless you understand how sentiment drives metals, you will more than likely be caught on the wrong side of a popular fundamental argument. Ultimately, he will be right. But, do we all have the deep pockets to be able to withstand yet another drop to lower lows before being proven right?

See chart on GLD 2007-2009.

Tax Reduction read more at http://youroffshoremoney.com

Trading Alert : Convalo – Making money from addicts

 

CONVALO HEALTH INTERNATIONAL CORP(CXV:TSXV, CA)

0.60CADIncrease0.05(9.09%)Volume: 
Above Average
As of 20 May 2015 at 10:31 AM EDT.

Convalo Health International (Convalo) Announces Plan to Acquire Two Southern California Treatment Companies

 

LOS ANGELES, CALIFORNIA–(Marketwired – May 20, 2015) –

 

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

 

Convalo Health International, Corp. (Convalo) (TSX VENTURE:CXV), an acquisition-oriented company focused on rolling up the US addiction rehabilitation market, announced that it has come to terms to acquire two profitable southern California companies, Hollywood Detox Center and Accredited Rehab and Treatment Services (“ARTS”).  As part of the acquisitions, Convalo will retain the three top executives in key positions at the national level, strengthening Convalo’s existing management team in the area of operations, admissions and executive management.  As part of the acquisition, these executives would take over operational management of the current BLVD Treatment Centers portfolio of outpatient centers.

 

The acquisitions, expected to close very shortly pending a final purchase agreement, provide a fully vertically integrated platform in Hollywood and, within the next year, serve as a platform for the greater Los Angeles metropolitan area, offering detox services, men’s and women’s residential treatment services and aftercare services in West Los Angeles subsequent to Convalo’s acquisition last month of the outpatient center announced March 30th, 2015.

 

For the Hollywood area, the acquisition will immediately give Convalo the ability to provide services that fully encompass the entirety of the patients’ needs throughout the course of recovery, resulting in improvements to overall quality of care, a higher revenue per patient, and a more fluid patient experience at every level.

 

The accretive acquisitions will have an immediate and positive impact on earnings per share (EPS). The final terms of the acquisitions will be announced upon the execution of the final purchase agreements. The sellers will take both stock and cash as consideration.

 

“With this deal, we have a full service platform in Los Angeles,” said Michael Dalsin, Chairman of Convalo. “We wanted to announce this deal pre-closing to ensure that the respective staff members at BLVD Centers, ARTS and Hollywood Detox could openly work together to integrate and begin cross selling all services to clients. We plan to announce full financial details of the acquisition at closing, both in terms of expected positive impact on our annual revenues and profits, as well as the amount of cash and restricted stock paid to the sellers.”

“We are particularly excited to be retaining Keith Fowler and Brent Ortner from Hollywood Detox and Ryan Newport from ARTS as senior executives of our nationwide strategy and I welcome them as future shareholders and partners in our acquisition model. We expect to have a substantial amount of cash after we close this deal and are focusing on deals in New York, San Francisco, Miami and Chicago to create a nationwide network of addiction treatment centers offering the full range of addiction services from detox all the way to aftercare.”

Subsequent to listing, the Convalo Board of Directors approved the issuance of performance stock compensation in the form of options to several key personnel. Convalo issued (a) 3,000,000 options each to Michael Dalsin and Roger Greene as Chairman and CEO and Vice Chairman, respectively; (b) 500,000 options to Nitin Kaushal as non-executive Director; (c) 250,000 options to David Costine as non-executive Director; and (d) 100,000 options to Dennis Wilson as VP of Corporate Affairs. All options vest equally over three years at a market strike price of $0.55.

Convalo currently has 198,996,353 issued and outstanding common shares and 2,344,635 performance stock options available and yet-to-be assigned.

Convalo anticipates that the expiry date of the warrants outstanding exercisable for 43,125,000 common shares of Convalo at $0.50 per share, will be accelerated to November 11, 2015 pursuant to the terms of the Warrant Certificates. The acceleration is a result of Convalo’s share price achieving a volume-weighted average trading price greater than $0.60 for 20 consecutive trading days since closing. The warrants were originally issued pursuant to Convalo’s bought deal private placement of 43,125,000 units (each unit consisting of one common share and one warrant), for gross proceeds of $17,250,000, which closed on April 22, 2015.

About Convalo

 

Convalo is an acquisition-oriented company focused on rolling up the US outpatient addiction rehabilitation market led by seasoned management with experience in both US healthcare acquisitions and healthcare service asset management. In May 2014, Convalo made its first acquisition of a small, local addiction rehabilitation center in Los Angeles. Since May, the business has operated under the brand name BLVD Centers (www.blvdcenters.com) in a luxury Hollywood, California location. BLVD offers patients access to a wide range of services, including addictive and co-occurring disorders, helpful to the recovery process. In conjunction with the 12-Step approach, BLVD also offers supplemental insurance-reimbursed services catering to a variety of communities: gender specific, creatively- oriented, meditation/mindfulness, trauma and LGBT affirmative.

 

Stock Market Top ? : The Q Ratio Indicator Says Watch Out Below

 

If you sold every share of every company in the U.S. and used the money to buy up all the factories, machines and inventory, you’d have some cash left over. That, in a nutshell, is the math behind a bear case on equities that says prices have outrun reality.

The concept is embodied in a measure known as the Q ratio developed by James Tobin, a Nobel Prize-winning economist at Yale University who died in 2002. According to Tobin’s Q, equities in the U.S. are valued about 10 percent above the cost of replacing their underlying assets — higher than any time other than the Internet bubble and the 1929 peak.

Valuation tools are being dusted off around Wall Street as investors assess the staying power of the bull market that is now the second longest in 60 years. To Andrew Smithers, the 77-year-old former head of SG Warburg’s investment arm, the Q ratio is an indicator whose time has come because it illuminates distortions caused by quantitative easing.

“QE is a very dangerous policy, in my view, because it has pushed asset prices up and high asset prices, we know from history, are very dangerous,” Smithers, founder of Smithers & Co. in London, said in a phone interview. “It is very strongly indicated by reliable measures that we’re looking at a stock market which is something like 80 percent over-priced.”

Dissenting Views

Acceptance of Tobin’s theory is at best uneven, with investors such as Laszlo Birinyi saying the ratio is useless as a signal because it would have kept you out of a bull market that has added $17 trillion to share values. Others see its meaning debased in an economy whose reliance on manufacturing is nothing like it used to be.

Futures on the S&P 500 expiring next month slipped 0.1 percent at 9:36 a.m. in London.

To Smithers, the ratio’s doubling since 2009 to 1.10 is a symptom of companies diverting money from their businesses to the stock market, choosing buybacks over capital spending. Six years of zero-percent interest rates have similarly driven investors into riskier things like equities, elevating the paper value of assets over their tangible worth, he said.

Standard & Poor’s 500 Index members last year spent about 95 percent of their profits on buybacks and dividends, with stock repurchases exceeding $2 trillion since 2009, data compiled by S&P Dow Jones Indices show.

In the first four months of this year, almost $400 billion of buybacks were announced, with February, March and April ranking as three of the four busiest months ever, according to data compiled by Birinyi Associates Inc.

Slow Spending

Spending by companies on plants and equipment is lagging behind. While capital investment also rose to a record in 2014, its growth was 11 percent over the last two years, versus 45 percent in buybacks, data compiled by Barclays Plc show.

With equity prices surging and investment growth failing to keep pace, the Q ratio has risen to 58 percent above its average of 0.70 since 1900, according to data compiled by Birinyi and the Federal Reserve on market and asset values for non-financial companies. Readings above 1 are considered by some to be too high and the ratio has exceeded that threshold only 12 percent of the time, mostly between 1995 to 2001.

That’s nothing to be alarmed about because the American economy has become more oriented around services than manufacturing, according to George Pearkes, an analyst at Harrison, New York-based Bespoke Investment Group LLC. Nowadays, companies like Apple Inc. and Facebook Inc. dominate growth, while decades ago, it was railroads and steelmakers, which rely heavily on capital.

Mean Reversion

“Does that necessarily mean that the Q ratio should be as high as it is right now? I don’t know,” Pearkes said by phone. “With those sorts of long-term indicators, they can sometimes mean that the market is overvalued. But the reversion to the mean on them is usually going to take a lot longer than most people’s time frame.”

Any investors who based their investment decisions on the Q ratio would have missed most of the rally since 2009, according to Jeffrey Yale Rubin, director of research at Birinyi’s firm. The measure rose above its historic mean three months into this bull market and since then, the S&P 500 has climbed 131 percent.

“The issue we have with Tobin Q is that it does a very poor job at timing the market,” Rubin said from Westport, Connecticut. “The followers of Tobin Q never told us to buy in 2009, yet now we are warned that we should sell. Our response is sell what? We were never told to buy.”

Bond Yields

Everyone from Janet Yellen to Warren Buffett has spoken cautiously on stock valuations in the past month. Both the Fed chair and chief executive officer of Berkshire Hathaway Inc. said prices are at risk of getting stretched should bond yields increase. The rate on 10-year Treasuries slipped last week to 2.14 percent while the S&P 500 gained 0.3 percent.

“It’s probably a sensible configuration for the stock market to be overvalued because competing investments are so poor,” Robert Brusca, president of Fact & Opinion Economics in New York, said by phone. “As an investor, you’re not just looking at the value of the firm, but the value of the firm relative to other things you can do with your money.”

At 2,260 days, the bull market that began in March 2009 this month exceeded the 1974-1980 rally as the second longest since 1956. While measures such as price-to-earnings ratios are holding just above historical averages, the bull market’s duration is sowing anxiety among professionals who watched the previous two end in catastrophe.

“We’re still close enough to that prior experience and that hold-over effect is still there,” Chris Bouffard, chief investment officer who oversees more than $10 billion at Mutual Fund Store in Overland Park, Kansas, said by phone. “When you start to see prior cycle peaks on the chart like Tobin Q and any other valuation metrics that people are putting up there, it looks dramatic, stark and scary.”

Protect your Portfolio : Read more at http://www.youroffshoremoney.com

A glut of vessels and stalling cargo growth until 2020 : Goldman Sachs Group Inc.

The World Shrinks for Goldman as Commodity Rout Snares Ships

The collapse in global rates for shipping commodities from the world’s mines to mills and utilities will persist until at least 2020 on a glut of vessels and stalling cargo growth, according to Goldman Sachs Group Inc.

The extended slump is set to intensify competition in the iron ore and coal markets, benefiting the biggest, low-cost suppliers, analysts Christian Lelong and Amber Cai wrote in a report. Higher-cost producers may suffer, they said.

The Baltic Dry Index, a measure of shipping commodities including coal, iron and grains, sank to a record in February amid the fleet surplus and slowing demand for cargoes to China. The country’s transition from investment to consumption, together with a shift toward cleaner energy, caused a sharp slowdown in the dry-bulk trade, Goldman said. At the same time, shipyards churning out carriers find they are adding unwanted capacity into an oversupplied market, according to the bank.

“From the iron ore pits of Western Australia and Brazil’s Sudeste to the coal pits of Indonesia and South Africa, mining companies have experienced the end of the bull market in commodities,” Lelong and Cai wrote in the report dated May 6. “Now the shipping industry is feeling the impact.”

The daily charter rate for a Capesize vessel slumped below $10,000 from a peak of more than $100,000 in 2008, according to Goldman. Lower rates will combine with cheaper fuel to spur a period of cheap freight until enough older vessels are scrapped to balance the market, probably after 2020, the bank estimated.

Smaller World

“When transportation is cheaper and distance matters less, the world appears to be smaller and goods can travel further,” the analysts wrote. “The world has shrunk.”

Goldman cited slumping rates for hauling iron ore from Western Australia to China, described as the busiest dry-bulk trade route in the world. The cost of shipping one ton sank from $44 at the peak in early 2008 to $4.40 a ton, it said.

Global demand for seaborne iron ore, thermal and coking coal may expand only 2 percent this year, down from an average of 7 percent between 2005 and 2014, Goldman said. After that, trade-volume growth will stall to 2018, it forecast.

China’s slowing growth contributed to declines in bulk-commodity prices. Iron ore sank to a decade-low at the start of April as Rio Tinto Group and BHP Billiton Ltd. boosted low-cost output into an oversupplied market. GlobalCoal’s Newcastle thermal price, a benchmark index for the Asia-Pacific, fell in April to the lowest level since 2007.

The utilization rate of the dry-bulk fleet will drop from about 90 percent in 2008-2010 to 70 percent from this year to 2019, Goldman said in the report, which focused its analysis on iron ore and coal cargoes and the larger Capesize and Panamax vessels. Order books at shipyards will ensure that vessel capacity will continue to grow until 2017, it said.

“Faced with the risk of leaving vessels idle over long periods, we believe that shipowners will continue to charge low charter rates,” the analysts wrote. “We expect low freight rates to persist at least until the end of the decade.”

Protect your portfolio profits http://www.youroffshoremoney.com