- If all the cool kids are abandoning email, how will we reach customers in the future?
- Introducing a new way to “engage with” The 5
- Amazon soars, GDP surprises, gold hangs tough
- From $68 oil today to a new “oil shock” months from now?
- How three crises overseas could trigger the next recession
- Another “arteria rectalis” gold theft?
[Before we start the clock today: Tim Sykes went “live” a few moments ago with the rollout of his revolutionary R.A.L.L.Y. system for profiting from huge penny stock moves during earnings season. Already we’re seeing a tremendous response — not least because the huge moves he anticipates could happen at any moment.
It’s too late to submit questions for Tim to answer… but it’s not too late to watch the event itself. Here’s the link where you can check it out right away.]
“Why Email Will Be Obsolete by 2020” was the headline of an article published by Inc. in 2015.
“In my own workday,” wrote Inc. contributor John Brandon, “email has become less and less important. There are entire groups of people (public relations, for one) who contact me primarily on social networks first. Friends never send email anymore. They almost always send a text or chat on Facebook.”
As long ago as 2010, a writer at The New York Times said an email account was a “sign you’re an old fogey” who “still watches movies on a VCR, listens to vinyl records and shoots photos on film.” Zing…
Here at Agora Financial, the future of email (or lack thereof?) is no small matter. Email has been our industry’s bread and butter for nearly two decades — ever since Bill Bonner, the founder of our parent firm, launched the original financial e-letter, The Daily Reckoning, in 1999.
Up to that time, the newsletter biz distributed its ideas almost entirely on paper via the U.S. Postal Service. (A handful of trading advisories were sent via fax — real cutting-edge stuff there!) If Bill hadn’t taken that leap of faith, his business could have been consigned to horse-and-buggy irrelevance.
Point being, we have to go where the readers are. Which brings us to an experiment we’re keen to tell you about as The 5 Min. Forecast enters its 12th year of publication. (The 11th anniversary was yesterday; some years we forget.)
In recent weeks, a few dozen readers have taken us up on the opportunity to “engage with” The 5 in a new way — via Facebook.
No, this isn’t some lame Facebook page for The 5. This isn’t 2011 anymore. Instead, we’re taking advantage of “bot” technology to actively reach out to readers via Facebook Messenger — only once in a while, and only if you give your consent.
So if you’re just doing your normal Facebook thing, seeing what your relatives are up to, you might get a message from us saying we’ve just posted a new issue, complete with a link for instant access. You’ll know it’s coming from us if it’s accompanied by this emoji of yours truly, designed by our team…
If you have the Messenger app on your phone, it’ll pop up just like a message from your friends.
In time, we’ll be alerting you each day when a new episode of The 5 is ready — just in case that’s a more convenient way to access it than “old fogey” email.
A disclaimer if you’re averse to social media: We’re not doing this as an “endorsement” of Facebook. Again, we’re going where (we think) the readers are (at this time).
We don’t know how many people have followed through on their threat to #deletefacebook since the Cambridge Analytica scandal blew up a few weeks ago. Surveys say one out of 10, but people often tell pollsters one thing and do another. The impact won’t be clear until Facebook’s second-quarter earnings report, and that’s still three months away. (Even then it could be murky: FB has long played games with its number of “monthly users.”)
Personally, I deleted my own seldom-used account in, if memory serves, 2014. Way back then, I had qualms about Facebook’s privacy policies. And it was an intrusive time suck — with long-lost colleagues messaging me out of nowhere to play a round of Farmville or whatever.
So have no fear if you prefer email distribution. We’ll still be sending The 5 “the old-fashioned way” for a long time to come.
In no way are we “married” to the Facebook platform. When our marketing folk approached me about this concept a few weeks ago, one of the concerns I raised was, “How comfortable are we being dependent on someone else’s infrastructure?” Their sensible answer: For now, this is simply another distribution channel in addition to the scads of email providers out there.
It’s way too soon to anticipate a day when everyone is all but force-marched into Facebook and our entire business model lives or dies by Mark Zuckerberg’s whims.
Besides, who’s to say Facebook will remain a monolithic force forever? Remember when AOL was a juggernaut? (Bet you were tempted to sign up for an account just so they’d stop mailing you those damn CD-ROMs every other week.)
But if Facebook is more your speed, we’re making it worth your while to sign up for access that way. We’ll give you a free special report titled The Little Book of 40 Retirement Freebies. Inside you’ll learn how to get free drinks on cruises… how to get paid to test drive your favorite cars… how to get checks directly from the world’s largest search engine… and more.
For all their ups and downs this week, the major U.S. stock indexes are set to wrap up Friday more or less where they started Monday.
The tech-intensive Nasdaq is holding up strongest today, and why not? Amazon’s quarterly numbers reveal the best sales growth since 2011 and profits more than doubling. Microsoft, one of Amazon’s compatriots among the five biggest publicly traded companies, also turned in a good report.
The big economic number today is the Commerce Department’s first guess at first-quarter GDP — which shows annualized growth of 2.3%. That was higher than expected — indeed, the best first-quarter performance in three years.
The story with gold and oil this week is that they’ve been hanging tough in the face of a surge in the dollar.
After holding steady for the last three months, the U.S. dollar index has rallied hard the last 10 days. At 91.6, the index is its highest since mid-January…
All else being equal, a strong dollar translates to weakness in gold and oil. But gold has held steady most of this week in the low $1,320s — on the low end of its trading range all year.
And oil has been climbing in recent days despite the dollar surge. A barrel of West Texas Intermediate is set to end the week a little below $68. That’s a $5 jump in three weeks.
A jump like that points to basic supply-and-demand issues. Those issues might well worsen, and soon…
“The world risks a full-blown oil shock within months,” writes Ambrose Evans-Pritchard in the U.K. Telegraph.
He warns of “three geostrategic crises” and a “speculative scramble by commodity hedge funds.”
We should back up a moment. Why are we citing this fellow? Because — and it pains us to say this — he showed us up rather badly a few years ago.
In mid-2014, we mocked him mercilessly after he wrote a column declaring that U.S. shale energy had become a bubble, and big-bucks investors “are likely to be left holding a clutch of worthless projects.”
But Evans-Pritchard turned out to be right, even if his figures and reasoning were a little shaky. As oil prices crashed by 75% over the next 18 months, the bankruptcy courts were clogged with companies whose leadership thought the party would go on forever.
Here at Agora Financial, we were so enamored with the technology revolution of fracking and horizontal drilling that we shrugged off the fact that many of the industry’s players were leveraged to the hilt.
We shoulda known: Years of artificially low interest rates courtesy of the Federal Reserve had given the industry an incentive to pour borrowed money into projects that made no economic sense — except for the easy availability of credit. (“Malinvestment,” is the term used by the Austrian School economists.)
In The 5’s 11-year history, I still chalk this up as our biggest oversight.
So what are the three crises Mr. Evans-Pritchard anticipates?
Begin with what appears to be Donald Trump’s determination to junk the Iran nuclear deal in two more weeks. Old U.S. sanctions would come back into force, maybe along with new ones. That alone might take a half-million barrels a day off the market by year-end. (Global oil demand is about 96 million barrels a day.)
Then there’s the possibility that Saudi Arabia’s war in Yemen — already the biggest humanitarian disaster on the planet — could morph into a shooting war between oil giants Saudi Arabia and Iran.
Add to that the ongoing train wreck that is Venezuela — where the oil industry is in “near terminal collapse,” Evans-Pritchard writes, “with drilling parts running out and thousands of long-suffering staff at the state energy group PDVSA walking off the job in protest over pay arrears. Output has crashed by 550,000 b/d since early 2017.” If President Nicolás Maduro wins re-election next month, tighter U.S. sanctions are likely to follow.
Key paragraph: “‘We are pretty confident that oil will be in triple digits by next year,’ said Jean-Louis Le Mee from Westbeck Capital. By then the oil market will be feeling the delayed effects of a 40% slump in investment from late 2014–early 2017, storing up a structural shortfall of 8 million barrels a day.”
By itself, triple-digit oil isn’t fatal to the U.S. economy. We muddled along all right with oil trading between $80–110 a barrel from early 2011–mid-2014. It’s when people get used to low oil prices that trouble looms.
This morning’s Wall Street Journal has a front-page story about rising oil prices squeezing American Airlines, Union Pacific and UPS. Both Caterpillar and 3M cited higher fuel prices this week when they lowered their expectations for the rest of 2018.
So far, companies have resisted passing on these higher “input costs” to consumers. But as we’ve said for several weeks now, that state of affairs can’t go on forever. (Perhaps Amazon jacking up the price of a Prime membership by 20% is a sign the dam is breaking.)
Last year, we suggested $75–80 oil could prove to be a breaking point for the economy. That would amount to a tripling of the oil price in a little over two years. A similar tripling from late 1998 to late 2000 helped trigger the mild recession of 2001.
It was a week ago today Donald Trump lashed out at OPEC for “artificially Very High” oil prices. He knows those prices could thwart much of his economic agenda and maybe even his reelection.
But if they do leap higher from here, OPEC will have had very little to do with it.
Oh, no: Gold is once again missing from the Royal Canadian Mint. Is it another “buttload” worth?
For a second time since 2015, gold has vanished from the Royal Canadian Mint. Says spokeswoman Alison Crawford, “Last month, as a result of robust internal inventory processes, employees of the Royal Canadian Mint reported a small amount of gold missing from the premises.”
You might recall last year we told you about a Mint employee sentenced to 2½ years in prison for making off with 22 “pucks” — round gold nuggets of roughly 6.75 troy ounces each. Prosecutors said he hid them in his rectum. Obviously not all at once.
This time the auditors have discovered two missing kilo bars worth a total $84,000. Each contains 32.15 troy ounces and we’re told is about the size of an iPhone 6. Hmmm…
The Royal Canadian Mounted Police are on the case. Presumably they’re not ruling out the possibility of another, uhhh, inside job…
Have a good weekend,
The 5 Min. Forecast
P.S. Tim Sykes’ R.A.L.L.Y. workshop — showing how you can profit from explosive penny stock moves during earnings season — is now over.
But you can still watch a replay and learn how to collect gains of as much as 352% in as little as 24 hours, with just a plain-vanilla brokerage account. No options or anything exotic. Click here and you can watch it right now.
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