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"This was Valero's best fourth-quarter earnings per share since 2005, and we made important progress on our strategic goals," said Valero Chairman and CEO Bill Klesse. "In the fourth quarter, we had a smooth start-up of our new hydrocracker at the Port Arthur refinery, which was the largest project in Valero's history. We also continued construction on our St. Charles hydrocracker, which is scheduled for start-up in the second quarter of 2013. We believe these projects are perfectly suited for the current environment of strong distillate margins and inexpensive natural gas."

Klesse continued, "Also in the fourth quarter of 2012, we replaced all imported light foreign crude oils with cheaper domestic crude oils at our Gulf Coast and Memphis refineries. Since we expect U.S. and Canadian crude oils to become increasingly more available, we are pursuing options to process additional volumes of these cost-advantaged crudes throughout our refining system."

Looks like an contrarian move to invest in the gold-sector right now. Evaluating some candidates right now.. 

Nassim Nicholas Taleb is a former trader and hedge fund manager, a best-selling author, and a ground-breaking theorist on risk and resilience.

Taleb drew wide attention after the 2007 publication of The Black Swan: The Impact of the Highly Improbable, which warned that our institutions and risk models aren’t designed to account for rare and catastrophic events. Among other things, the book cautioned that oversized and unaccountable banks using flawed investment models could bring on a financial crisis. He also warned that the government-sanctioned housing finance agencies, Fannie Mae and Freddie Mac, were sitting on a “barrel of dynamite.”

One year after The Black Swan was published, a global banking crisis was brought on by the very factors he identified.

Taleb doesn’t identify as a libertarian, but he often sounds like one.He has argued that we need to build a society where major actors have “skin in the game” and our public intellectuals can bloviate without subjecting the rest of us to the consequences of their bad ideas. He supported Ron Paul in the 2012 presidential election and has cited the libertarian economist Friedrich Hayek as an influence.

Taleb has called New York Times columnist Thomas Friedman “vile and harmful” and coined the phrase the “Stiglitz Syndrome” after Nobel-prize winning economist Joseph Stiglitz, which refers to the phenomenon of public intellectuals being held utterly unaccountable for their bad predictions. Paul Krugman and Paul Samuelson are among Taleb’s other Nobel laureate bête noires.

Taleb's new book - Antifragile: Things That Gain from Disorder Taleb’s new book is Antifragile: Things that Gain with Disorder, which argues that in order to create robust institutions we must allow them to build resilience through adversity. The essence of capitalism, he argues, is encouraging failure, not rewarding success.

Reason’s Nick Gillespie sat down with Taleb for a wide-ranging discussion about:

• why debt leads to fragility (5:16);
• the importance of “skin in the game” to a properly functioning financial system (10:45);
• why large banks should be nationalized (21:47);
• why technology won’t rule the future (24:20);
• the value of studying the classics (26:09);
• his intellectual adversaries (33:30);
• why removing things is often the best way to solve problems (36:50);
• his intellectual influences (39:10);
• why capitalism is more about disincentives than incentives(43:10);
• why large, centralized states are prone to fail (44:50);
• his libertarianism (47:30);
• and why he’ll never take writing advice from “some academic at Cambridge who sold 2,200 copies” (51:49).

While the economic outlook is still blurred and markets may hit air pockets in 2013, it is worth noting that global equities are still trading one standard deviation below their historical valuation since 1996, as measured by a mix of six different valuation metrics.

The global dividend yield is currently 2.9 percent which is significantly above the G10 countries’ 10-year government bond yields and highlights the impressive bond bubble that investors have built up over the years. This long run unsustainable relationship between stocks and bonds may begin to change towards the end of 2013 if the global economy manages to steer clear of major bumps on the road. Investors should be cautious if they are overweight in bonds later in 2013.

In the US, for example, 2008 disposable income was USD 33,229, and now five years later it is USD 32,529 (minus 0.9%). Over the same period (Mar"ch 2009- December 2012), the S&P500 is up 100 percent. This is what extend-and-pretend is about: Saving banks and governments by letting taxpayers and creditors pay. It is capitalism without capital or accountability.

 

Lower income can be dealt with through dissaving, taking money from your account over a shorter period, but now five years into the crisis this patience is running on empty and despite the US Federal Reserve’s explicit focus on unemployment, the fact remains that in 2011 the average Nonfarm Payroll’s number was +153K per month and in 2012 it was  also +153K. Both way short of the desired 225K-250K per month to make the US grow at long-term trend.

China's exports in December blew past expectations, rising over 14 percent year on year, compared with forecasts for an increase of just 4 percent

Oil futures look really strong!

Good News for my Stock-picks in the oilsector.

A happy-go-lucky Wall Street enjoyed a major rally in the wake of the fiscal cliff deal, forgetting that the deal is a non-deal that adds a staggering USD 4,000 billion to US debt over ten years (Bernanke and the Federal Reserve will buy USD 1,000 billion of this in 2013 alone!)

I want to bring to your attention a nice little inverse indicator - the number of stocks trading above their 50-day moving average:

This morning a staggering 91 percent of all stocks were above ...and traditionally that is a bad sign. Forget fundamentals - we are in a no-market condition where faith is bigger than reality. We continue to fade this move by buying low delta puts....

 

- Steen Jakobsen, Chief Economist & CIO, Saxo Bank
Filed in Macro Digest

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