Wednesday, August 20, 2008

Bearish Report, Oil Rises

The report today was somewhat bearish.  SOMEWHAT (the gasoline inventories are declining far too fast; the refiners are going to have to make some spread soon), still the price closed the day up well over a $1, after having been down more than 1$.  My take has been, and will continue to be, that we have put in a bottom (unless we get more threats from Obama to remove 50 million barrels from the SPR and put it on the market, or the oil import picture changes) in Oil prices for this cycle, and the energy equities as well.  The system can't continue to have these kinds of draws in gasoline, and not be building stocks of heating oil and distillate for the coming winter.  Further, the crude oil import number was, by my reckoning, IMPOSSIBLY high.  And I don't think I am the only guy who thought so - ergo the higher price for crude.

Gold & Silver?  Still in shock as to the price decline in silver... but, my bet is that we have put in a bottom, or are in the process, for these commodities as well. 

I haven't gotten any "fan" mail lately about my call on Fannie Mai & Freddie Mac, Lehman, and the rest of the financials.  Look, I am sorry if you went long, and stayed there. You f*^%ed up. There is NO HOPE for these companies, or this industry.  Wishing (wishcasting) doesn't work; it is all over but the gun shot to the back of the head for these guys.

So... If the financial system is coming unglued... (and it is) what does that mean?

It means you gotta tune in tomorrow.  My job as the kid's taxi driver calls, and I gotta hop.

Yours for a better world,

Mentatt (at) yahoo (dot) com


Anonymous said...

NEWS FLASH! the "Free Market" is Rigged!

"Last week, Fannie Mae and Freddie Mac had just announced record losses, and so had most reporting corporations. Unemployment was mounting, the foreclosure crisis was deepening, state budgets were in shambles, and massive bailouts were everywhere. Investors had every reason to expect the dollar and the stock market to plummet, and gold and oil to shoot up. Strangely, the Dow Jones Industrial Average gained 300 points, the dollar strengthened, and gold and oil were crushed. What happened?

It hardly took psychic powers to see that the Plunge Protection Team had come to the rescue."

full article at:

How can anyone expect to make money in the markets when the PPT holds all the trump cards?

Anonymous said...

I'm still very interested on your thinking about how the Credit Default Swap beast will play out it's endgame.

I'm long precious metals ie bullion but prefer the volatility to holding $USD. The dollar looks to me like a timebomb just waiting to explode. The current geopolitical fiasco in Georgia has probably convinced many big international dollar holders that they must soon find an exit from the USS Titanic.

Anonymous said...

No, it wasn't the "plunge protection team" whatever that really is. It's just markets doing their thing. Your paranoia proves nothing:

1) Unemployment isn't mounting, at least not yet. It is going up by .1% a month at best, and not every month. Lots of people still have jobs.

2) Foreclosure crisis isn't deepening. The overwhelming majority of families either own their own house or are making payments.

3) State budgets are in shambles? Well, I guess we'd see millions of children on the streets cause education is a hugely state-funded. Ooops, the streets are empty as usual.

4) Massive bailouts are everywhere? Where? The number of vacant storefronts isn't even notable as of yet.

The markets are doing what markets do -- they go up and down. If you need your psychosis to stay warm at night, have at it. But the world isn't coming to an end yet. I know you are awfully disappointed.

Anonymous said...

What planet are you from?

Lots of good opportunities for great investments here on earth. I have heard that Lehman Bros is at a cyclical low. A great stock at a great price. You will get rich in not time.

Anonymous said...

A small minority of people get rich by buying when the blood is in the streets. Oppenheimer borrowed $10,000 when the Great Depression hit and bought stocks low -- he turned it in millions. If I had a million, I'd be buying what is really cheap right now: houses. But I don't, so I don't. Don't let your fear run your life.

Andrew said...

No, but don't let greed run it either.

Its great to buy at the bottom, but you have to be sure it _is_ the bottom first. Re housing, all indications are that it has a long way to go before it bottoms, and there's no guarantee even then that it'll start going back up in a hurry.

People who buy now, whether housing or Lehmann stock, may soon find out what its like trying to catch a falling knife. Borrowing to buy could make you a fortune - in times like these it can also rip the shirt off your back.

Anyway, this blog is about energy not teotwawki. There's a systemic energy problem affecting the USA and many other western nations - stagnant production of oil and declining net exports, which means less of it to go around. Whatever happens on the financial markets, this slow-motion problem will still be there.

Anonymous said...

Dear Anon:
Well I have a million and I won't be buying any houses right now. You know why? Because if I do I will not have a million left and may loose everything else I own to boot.

Yes buying at the bottom is great but you don't know where the bottom is. This bottom is nowhere in sight yet and will not be for a great while. Not until people stop saying stupid stuff like "if I had a million I would be buying houses" as a matter of fact. The bottom will be when buying houses will be met with derision and scorn by all right thinking men. I may be buying then but most likely not houses but productive land.

As far as whether the market is rigged or not, I wouldn't know. I know that if I could rig a market I would do it. Takes the gambling element out of making money. I don't like to gamble and I would guess other people would prefer a sure thing also. Now I don't have an ability to rig a market in anything. However, I would bet that some people can at least influence some markets for some period of time. In an imperfect and uncertain world even a sure thing is no such thing so eventually they will bet big and it will backfire on them. They will then get their comeuppance. As we will all no doubt. I wouldn't worry too much about that.

Best of luck,
Chuck H.

Anonymous said...

In 1990, with the "world comming to end economically," I bought my first ounce of gold. I also started a 18 year run at investing in the S&P 500. While the gold took a dive and then recovered (and I have since bought a lot more), by taking the chance and investing in America, I now have $335,000 (now in U.S. Treasuries) and that continues to grow (at 4%. glum ...) I have no more need for the S&P 500. Taking a chance when everything "seemed" blackest is how people get rich. And last time I checked, the corner Marathon station had gasoline & diesel. Yer a bunch of worry warts. :)

Greg T. Jeffers said...

Those who interpret their environment the best will be able to profit. The world is not coming to an end, nor is the U.S., nor the U.S$.

That does not mean that values won't change dramatically, and that some stores of value will not cease to exist, destroying the saving of those that chose poorly.

Opportunities abound! If you are cock sure that something is going down... you can go short. Same if you are sure of something heading up - go long. But be aware that you will not be right every time, and be aware of your surroundings, economic, political, etc... as these will matter greatly.

"Chance favors a prepared man"

Good Luck!