Monday, December 16, 2013

4 Top Stories & Charts for Monday

1. Nobody expects a big correction ...

It depends on how much faith you put in market cycles, but the second year of a Presidential cycle is usually a rough one.  Hence, 2014 should see a major correction. But would you see that as a buying opportunity?

There is a lot more to it. You can read it all here.

2. Bloomberg's outlook on gold is food for da bears. Gold Funds See Unprecedented 31% Slump With World Losing Faith

Some highlights (or lowlights) ...

  • Holdings in the 14 biggest ETPs plunged 31 percent to 1,813.3 metric tons since the start of January, the first annual decrease since the funds started trading in 2003, data compiled by Bloomberg show. The removals erased $69.7 billion in the value of the assets as prices fell by the most since 1981. A further 311 tons will be withdrawn next year, according to the median of 11 analyst estimates compiled by Bloomberg.
  • The pace of ETP outflows has slowed to about 40.7 tons a month on average since June, compared with 97.7 tons a month in the first half, according to data compiled by Bloomberg. Holdings fell 28.6 tons this month. The amount held in ETPs reached a record 2,632.52 tons on Dec. 20 last year.
  • Some of the economic conditions that prompted investors to buy gold over the past few years no longer exist. The U.S. unemployment rate that touched a 26-year high of 10 percent in October 2009 after a recession in the world’s largest economy dropped last month to a five-year low of 7 percent, the government reported Dec. 6. The U.S. economy grew at an annual rate of 3.6 percent in the third quarter, the strongest in 18 months. Inflation in the U.S. is running at a 1 percent annual rate, half the pace of the past decade.
  • Gold consumption in China, poised to overtake India as the biggest buyer this year, may increase 29 percent to 1,000 tons in 2013, the WGC estimates. Gold in Europe is being refined from larger bars suitable for local users into smaller sizes favored in Asia, while Deutsche Bank AG and UBS AG are among banks that opened vaults to store metal in the region this year.
3. U.S. close to oil production record, nat gas overtakes coal

  • By 2016, the U.S. will be close to a crude-oil production record of 9.6 million barrels a day, the Energy Information Administration said Monday in a preview of its annual outlook.
  • Natural-gas production, however, was seen as growing steadily, with a 56% increase between 2012 and 2040, when production will reach 37.6 trillion cubic feet. Natural gas will overtake coal as the main fuel for U.S. electricity generation by 2040.
  • The EIA also predicted U.S. residents will drive even less than it expected last year. Annual increases in vehicle miles traveled in light-duty vehicles will average 0.9% from 2012 to 2040, compared with 1.2% per year seen in the 2013 outlook. The rising vehicle fuel economy of those light-duty vehicles “more than offsets” modest growth in miles traveled, resulting in a 25% decline in light-duty vehicles energy consumption between 2012 and 2040.

4. Finally, here is a Calvin & Hobbes cartoon snow-sculpture brought to life. Awesome.

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