J.P. Morgan on POT : Way High

Our musical accompaniment is by Jackie Wilson:
Your love is lifting me higher (Higher and Higher)
From Notable Calls:

Potash (NYSE:POT): JP Morgan raises 2009 EPS est way high - expect a positive reaction

JP Morgan is out with a major earnings change on Potash (NYSE:POT) this morning raising their 2009 EPS est to $18.50 from $11.75 a share (vs. consensus $12.70).

Firm's 2008 earnings estimate goes to $10.50 from $8.95 a share.

Notablecalls: Wow, this is probably one the largest EPS est raises I've seen in a long time. POT has gotten whacked over the past two days on apparent "sell-the-news" reaction to their fantastic results....MORE

UPDATE: Nenana Ice Classic

UPDATE: Here.
On March 31 we brought you "Big Global Warming/Cooling/Staying Pretty Much the Same Betting Opportunity". Apologies for such short notice. All bets were locked April 5.
As of this evening, the Tanana river's breakup is later than five of the 92 years the Ice Classic has been held:

April 20 1940, 1998
April 23 1993
April 24 1990, 2004

The last official ice thickness was 40.5 inches, measured on April 21.

The next target dates are:

April 26 1926, 1995
April 27 1988, 2007*
April 28 1943, 1969, 2005
April 29 1939, 1953, 1958, 1980, 1983, 1994, 1999, 2003
April 30 1917**, 1934, 1936, 1942, 1951, 1978, 1979, 1981, 1997

*Defending Champion Date.
**The Inaugural. The latest the river has broken up was May 20, 1964.
Here's the website.

Weather at Fairbanks (56 miles upstream of Nenana):

Weather for Fairbanks, AK

53°F

Mostly Cloudy
Wind: NW at 3 mph
Humidity: 37%

Thu

46°F | 32°F

Fri

51°F | 30°F

Sat

39°F | 19°F

Sun

42°F| 28°F

Weather at Nenana:

Nenana, Alaska (Airport)

Updated: 54 min 18 sec ago

49 °F / 9 °C Clear

Windchill:	45 °F / 7 °C
Humidity:	43%
Dew Point:	27 °F / -3 °C
Pressure:	29.87 in / 1012 hPa (Falling)
Visibility:	10.0 miles / 16.1 kilometers
UV:	4 out of 16
Clouds:	Clear - (Above Ground Level)

While waiting for the tripod to sink, here are the most read stories from KTVA TV (Anchorage):
(last twelve hours)

1. Polar bear chases man in Kaktovik
2. Man charged for allegedly having sex with dog
3. New details emerging about state chartered helicopter that crashed
4. It's a boy!
5. That's not a naked woman in Cheney's sunglasses
6. Car accidentally backs over child in Anchorage
7. Trig Paxson Van Palin, governor's second son born on Friday
8. Angry wife tries divorce-by-YouTube tactic
9. Anchorage launches Internet crime map
10. Warmest March ever over land

Cramer, CNBC and First Solar (FSLR)

I knew it!
From Infectious Greed:

Must. Hype. RIMM ... Must. Push. FSLR.

This is the best thing I have read in ages. It is a quote from Overstock CEO Patrick Byrne speaking on the Fox Business Channel to Liz Claiman:

I think that there’s been an unhealthy collusion developed between certain short sellers and certain journalists. They center around your competitor, CNBC. I happen to know for a fact that there’s a fax machine in the CNBC offices where hedge funds send instructions and journalists sit around and take instructions.

What? No-one is supposed to know about the CNBC Fax Machine and the daily instructions to on-air journalists from nefarious hedge fund managers. I only learned about the Fax Machine because I held a restroom scrap paper over a toaster and a cryptic message to Joe Kernan emerged slowly from lemon juice.

Must. Push. FSLR ... Must. Skewer. SBUX ... Hate. Environmentalists ... Await further instructions.

Genius.

Europeans, Buy Those U.S. Assets NOW

Major shift in the psychology today. Here's how fast things can move:
1982 DJIA close

Aug. 12 776.92
Aug. 13 788.05
Aug. 16 792.43
Aug. 17 831.24
Aug. 18 829.43
Aug. 19 838.57
Aug. 20 869.29
Aug. 23 891.17

Just like that, 14.70% in seven trading days. I'm not* saying this is the start of a five year bull move, but, for those who want exposure, ya snooze, ya lose.

*From our March 20 post, Markets: I Scream Triple Dip

...One possibility I've been toying with is a double recession following the credit crunch. The way this would play out in the stock market is a rotation out of commodities (but keep an eye on wheat) by the hot money back into equities with a run back toward the old highs on the S &P....

Reiterated on April Fools Day:
Tuesday, April 1, 2008

Gold Under $900; Oil Under $100. And: "Get Out of Commodities" - Barron's

R.I.P. Bond Rally, 2005-2008

Um, this might be really, really important.
From MarketBeat:

The long run of steadily declining Treasury yields may have ended.

In trading Thursday, the yield on the two-year Treasury note poked back above the federal-funds target of 2.25%, something that’s rarely happened in the past three years. Furthermore, the two-year note’s yield of late is higher than the expected federal-funds rate six months from now, a dramatic reversal from a trend that has persisted since March 2005.

“This could be the watershed, the inflection moment we’ve been waiting for,” says George Concalves, chief Treasury and agency strategist at Morgan Stanley. “We’ve been so tightly wound up in rates because of strong flight-to-quality flows, which was justified cause people trying to figure out where the problems were with the banks. Now, we’ve seen that come off.”>>>MORE

Valuation: Intrepid Potash (IPI)

Some things to think about from David Wilson, writing for Bloomberg:

Intrepid Potash Inc.'s initial public offering may mark the start of a bubble among fertilizer stocks, which have soared during the past couple of years along with demand for all kinds of crops.

After surging 58 percent in its first day of trading, Intrepid -- the largest U.S. producer of potash, according to its IPO prospectus -- is valued at 201 times last year's pro-forma earnings of 25 cents a share.

This makes the Denver-based company's shares more costly than those of Cisco Systems Inc., the world's biggest maker of computer-networking equipment, when the Internet bubble reached its high point in March 2000. Cisco peaked at 193 times profit, according to data compiled by Bloomberg.

Intrepid has by far the highest price-earnings ratio, calculated by adjusting last year's profit for the IPO and related transactions, out of 35 fertilizer stocks worldwide. Even so, shares of many of its peers are also rather expensive.

Russia's OAO Uralkali, named in Intrepid's prospectus as the only other publicly traded potash specialist worldwide, is valued at 70 times earnings. Potash Corp. of Saskatchewan, the world's largest crop-nutrient producer by market value, trades at 64 times. The comparable ratios for MSCI Inc.'s benchmark indexes of emerging and developed markets are about 16 times....MORE

Energy, Immelt and the Wall Street Journal (GE)

As a follow-up to yesterday's post "GE's Immelt reduced to whining after homicidal rant from Jack Welch (GE) ", DealBreaker gives us some insight into how the big boys play the game:

Electric Press

Jeff Immelt: Is anyone from the damn public relations office back yet?

Vice President: The new girl, Tiny.

JI: Wait, the hot little number who's schtoinking that editor at that financial paper?

VP: The Wall Street Journal?

JI: Right. The Streetwise Journal.

VP: The Wall Street Journal.

JI: Get her sweet buns in here. Now. Oh, and I'd like my eggs poached this morning.

VP: Right.

Tina: You asked for me Mr. Immelt?

JI: Right. So, while your entire fucking office was on vacation, we managed to divert this public stuff about Jack shooting me with our "cheaper energy" gambit. But I want some more action. I want newspapers bleeding ink about the Immer. Got it? I mean bleeding. And I want big papers. I want the Wall Streetwise Journal writing about GE. Writing about GE and how the Immer is steering it through the rough spots. This CNBC thing is killing us. Oh, speaking of, what's the story with the hit man and the CNBC people?>>>MORE

Opportunities in European Infrastructure Projects Examined

From Ernst & Young via Research Recap:

European Union member states will spend roughly 556 billion euros by 2020 on modernizing trans-European transportation systems. A new report from Ernst and Young examines the opportunities in transportation and other infrastructure projects in selected countries.

Governments in the EU are continuing to increase infrastructure spending, more private investors are coming into the market, and more private capital is flowing into infrastructure.

Among the many possibilities, the E&Y report suggests US companies partner with domestic firms to take full advantage of government contracts.

In France, where the infrastructure is exceptionally advanced, opportunities will nonetheless abound for public-private partnerships (PPPs) in air and road travel. Germany, on the other hand, is in need of significant investment of its infrastructure. Despite its historic distaste for PPPs, the current government is headed in that direction, and new opportunities are opening up in many areas.

Greece is perhaps the single most promising country for American companies...MORE

California needs $150/tonne carbon price to boost energy emission cuts

From the Department of Duh.
Good Grief. Folks who talk about how cheap this transition is going to be are either morons or duplicitous. If some silly-ass blogger** can figure out the number, the politicians and their consultants know what it is. Here's our post from Monday on San Francisco's 4.2 cent/tonne tax:

This is worse than useless. A review of the literature shows that a price of $100 to $200 per ton is required to change behavior. This is just a targeted fund raiser, gussied up in green. As such it could have the effect of reinforcing cynicism toward politician's venality.
(disclosure: I am not a cynic, I am jaded*)

Here's the story stub from Point Carbon:

California already has such ambitious renewable energy targets that it would take a carbon dioxide price of $150 per tonne to encourage investments that cut emissions beyond what existing policies require, according to consulting firm Energy and Environmental Economics.

**I do have one advantage, I've been following this stuff since 1992 and have read something on the order of 100,000 pages of science, econ, tech and dreck.

SolarWorld introduces solar PV kits for Oregon at the Northwest Solar Expo (SRWRF.PK)

What took them so long?*
From the press release:
SolarWorld, the largest maker of solar PV products in the USA, is presenting specially designed Sunkits for Oregon homeowners during this weekend's Northwest Solar Expo at the Oregon Convention Center in Portland....MORE

*Our June 19, 2007 post:
"free money" for Oregon business owners who invest in solar.

That headline is a quote, I couldn't make it up. This either: In many cases, the incentives and credits paid end up being more than the actual cost of the system.

Alrighty then, time to hit the Oregon Trail.

Maldives wants emissions cuts but not from tourism

From Reuters:

The Maldives, worried about rising seas from climate change, wants steeper cuts in global greenhouse gas emissions but is unwilling to curb its tourism industry, which is reliant on polluting international flights.

President Maumoon Abdul Gayoom, in Singapore promoting his book "Paradise Drowning" at an environmental business summit, said cutting back on tourism was not the answer even though the country's survival was more important than development....MORE

Potash Corp. Now Largest Capitalization in Canada (POT)

Who'da thunk it?
From the Globe and Mail:

Top weightings April 21, '08

	% weight in the index	Last price
Potash Corp.	4.44	210.80
EnCana Corp.	4.35	86.87
Royal Bank of Canada	4.22	48.82
Research In Motion Ltd.	4.00	126.83
Manulife Financial Corp.	3.87	38.62
Suncor Energy Inc.	3.70	119.50
Toronto-Dominion Bank	3.52	65.18
Cdn. Natural Res. Ltd.	3.18	88.01
Bank of Nova Scotia	3.12	47.44
Barrick Gold Corp.	2.52	43.32

Potash Profit Nearly Triples On Fertilizer Demand (AGU; IPI; MOS; POT)

From Fox Business:

Potash Corp. of Saskatchewan Inc.'s first-quarter net income nearly tripled amid surging demand and prices for fertilizer and one of its ingredients, potash, leading the firm to sharply raise its 2008 earnings forecast. The company posted net income of $566 million, or $1.74 a share, compared with $198 million, or 62 cents a share, a year earlier. Potash had expected earnings of $1.30 to $1.60 a share. Revenue increased 64% to $1.89 billion....MORE

From the National Post:
Potash companies to bear fruit of rising prices

Now that potash prices have broken the $1000 per tonne barrier, it's easy to imagine them staying this high for the foreseeable future, says Citigroup Global markets analyst Daniel Mon.

Mr. Mon was commenting in a note on Uralkali OAO's announcement Wednesday saying its export trader, Belarusian Potash Co., has raised prices of potash in Southeast Asia and Brazil to $1000/tonne as of July 1. "To put his in perspective, prices have now doubled in just four months," Mr. Mon said in a note. Potash began 2007 at $210....MORE

'Bear Raid' Stock Manipulation: How and When It Works, and Who Benefits

From Knowledge@Wharton:

When Bear Stearns collapsed in March, some insiders argued it was wrong to blame the firm's risky bets on mortgaged-backed securities. They had another culprit: malevolent traders working together in the upside-down world of short sales -- making money by knocking down Bear's stock.

No one openly admits to conducting a "bear raid," since deliberately manipulating stock prices is illegal. But Wall Street has long believed bear raids can and do take place. There has, however, been little academic research to explain the forces at work. Now two finance experts have shed some light on the process. "We basically describe a theory of how bear raid manipulation works," says Wharton finance professor Itay Goldstein. He and Alexander Guembel of the Saïd Business School and Lincoln College at the University of Oxford describe the procedure in their paper titled, "Manipulation and the Allocational Role of Prices."

Their key finding illuminates the interplay between a firm's real economic value and its stock price, showing how traders who deliberately drive the share price down can undermine the firm's health, causing the share price to fall further in a vicious cycle....MORE

Investors Brace For Potash Earnings (POT, MOO)

From 24/7 Wall Street:

Thursday morning, we'll get to see earnings out of Potash Corp. of Saskatchewan, Inc. (NYSE: POT). The estimates for the potash producer from First Call are $1.52 EPS on $1.67 billion in revenues. Next quarter estimates are $2.27 EPS on $2.34 billion in revenues. Estimates for fiscal Dec-2008 are $8.62 EPS on $8.29 billion in revenues.

Analysts have an average price target north of $200.00, and the 52-week trading range is $58.87 to $214.84. Shares closed down $10.71 today at $204.12. With all the upgrades seen in late 2007 to early 2008, it's either time for analysts to increase targets or make their "valuation" comments now that shares are above many price targets even though the ratings are still very positive....MORE

Hoarding Food: It's not Just for Survivalists Any More

We had a mention of this idea yesterday.*
From the Wall Street Journal:

Load Up the Pantry
I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.

No, this is not a drill.

You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)

Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax....MORE

MarketBeat ref'd the idea en passant:

...“It is just unreal what can happen when we get fear being spread as it is now, and when the general populace goes out and starts doing idiotic things like lining up at the Sam’s Club and the Costco and not buying one bag but buying 10 bags just because they might run out,” says Neauman Coleman, introducing broker at Neauman Coleman & Co. in Brinkley, Ark....

...Even though July rough rice futures closed up 62 cents to $24.82 per hundredweight on the Chicago Board of Trade, Mr. Coleman says inventory figures show that the U.S. still has plenty of rice (this country exports a good deal of its rice), so the bubble-nature of this grain will recede over time. “It’s fear and panic and pandemonium,” he says....

In "Climate Change and the Pacific Decadal Oscillation" we said:

You might want to look up the word famine. And store a couple tons of wheat in a vermin proof room. The risk of a major crop failure somewhere in the world over the next ten years just went up. My best guess (wild-ass variant) would be northeastern Russia/Ukraine. Which could get interesting:...

The Hog Cycle

No not Harley-Davidson, although I imagine some econ grad student has written the paper.
Wheat and hogs are two commodities with long price series. We mentioned the hog cycle back in January:

The hog price series is one of the longest we have records for, back to the 1200's. The cycle is:
slaughter begets scarcity begets higher prices begets breeding begets over-supply begets slaughter. It's been going on for a while.

Today Professor Mankiw tips us to a government subsidized variation:

A Bad Time to be a Pig

Chapter 5 of my favorite economics textbook talks about how governments sometimes try to help farmers by paying then not to bring crops to market, an action aimed to reduce supply and raise prices. A student brings to my attention a recent example of this kind of policy:

EDMONTON —In what is being called an unprecedented move, the federal government will pay Canadian pork producers $50 million to kill off 150,000 of their pigs by the fall as the industry teeters on the brink of economic collapse....Those who qualify for payments must agree to kill off an entire breeding barn of pigs and not to restock the barn for three years.

Van Eck Market Vectors Solar ETF (KWT)

Started trading today, a day later than planned.
The ETF opened at $41.72 and closed at its low for the day, $41.31, which makes sense as most of the solar stocks closed in the range of 625-740 nanometers (red).

When I went to the link-vault for Van Eck's KWT page, this popped out:
Van Eck phreaking

Van Eck phreaking is the process of eavesdropping on the contents of a CRT display by detecting its electromagnetic emissions. It is named after Dutch computer researcher Wim van Eck, who in 1985 published the first paper on it, including proof of concept. ^[1] Phreaking is the process of exploiting telephone networks, used here because of its connection to eavesdropping.

Not sure why that was in the file.
Here's the KWT page. More useful, right now, is Ardour Global Indexes SOLRX constituent page.

First Solar at 10.62% down to Daystar Tech. at 0.36%, I am intrigued.

Now He Tells Us-Wachovia CEO: 'Golden West was an ill-timed acquisition' (WB)

From the San Jose Business Journal:

Wachovia Corp. chief executive officer Ken Thompson was grilled at the company's annual meeting Tuesday morning as angry shareholders questioned him about the company's performance in the wake of a dismal first quarter....

...With the bank struggling through rising loan defaults in the "pick-a-payment" mortgage portfolio it acquired through its $24 billion purchase of Oakland-based Golden West Financial Corp., Thompson said, "Clearly, Golden West was an ill-timed acquisition." He added that the results are painful to him and his management team, which he said is focused on improving the company's performance and restoring shareholder value.

"We did make a bad acquisition," he said. "It has hurt us. But we can lead out of here now."

Fortunately, we aren't dependent on CEO's to give us a heads up.
For that, we look to some guy in India.
From our August 10, 2007 post:

The Day the Music Died--The Mortgage Business

On May 10, 2006 India Daily said:

Sell of Golden West Financial to Wachovia signifies burst of housing bubble

Does Nanosolar have an Announcement Coming? (FSLR)

From Wikipedia:

Traffic analysis is the process of intercepting and examining messages in order to deduce information from patterns in communication. It can be performed even when the messages are encrypted and cannot be decrypted....

...In a military context, traffic analysis is a basic part of signals intelligence, and can be a source of information about the intentions and actions of the enemy. Representative patterns include:

• Frequent communications — can denote planning
• Rapid, short, communications — can denote negotiations
• A lack of communication — can indicate a lack of activity, or completion of a finalized plan...

Here are the dates of Nanosolar's CEO's entries on his blog:

April 30, 2008???:

...Update 4/30: Thank you for the hundreds of comments we have received to this posting via email. Our team has read and digested every single of them. To all those of you who are disappointed that our first product is not for residential homeowners, we can reassure you that we do have a fabulous residential solution on our near-term roadmap — one that will bring the utility scale economics of Nanosolar Utility Panel™ technology to homes everywhere and completely redefine how residential solar is done.

April 16, 2008
April 10, 2008
December 21 2007: Update
December 18, 2007: Nanosolar Ships First Panels
November 13, 2007
October 28, 2007

Not a lot of datapoints but three in April '08, hmmmm.