Tuesday, September 9, 2008

Lehman Brothers, RIP

Fannie, Freddie, IndyMac... today Lehman Brothers fell below $8 (you know what that means...), and Washington Mutual is on the ropes at $3...  

The problem is, I only got it 90 % right.  I got the bank failures, housing market, Fannie & Freddie, and Oil DEAD ON.  But I thought the flight to safety would have been to Silver and Gold, and boy, has that not worked out according to plan - yet.  Unfortunately, it is the PRICE response that matters, and at the moment it ain't going my way.

I am long December 2010 Silver & Gold Spreads - something has to give in the next 28 months or I will have egg on my face.

Tomorrow is Oil inventory day.  It is inconceivable that inventories of Crude, Gasoline AND Distillates are not down BIG, with Gasoline near minimum operating levels in the South and Southeast.  However... 

Anyway, I am still waiting for my entry point in Oil.  It will come, but no point in hurrying.  That goes for house buying, business expansion, hiring, buying a new car (HAHAHA!!) etc... these are ALL activities that can wait.  No need to be a hero.  The next move in Oil can make a career, even a lifetime... 

Back soon,


Mentatt (at) yahoo (d0t) com

3 comments:

Andrew said...

I'm by no means an expert, but isn't a flight to gold/silver a response to weakness (usually inflationary) in a currency? With the USD suffering deflation & holding steady as the Euro, AUD etc correct, that makes it more attractive than gold.

Of course, the US taxpayer is now on the hook for the Frannie debt, an enormous trade deficit and underfunded social services/pensions - all of which may encourage the govt to crank up the old printing presses sometime in the next 28 months ;)

Anonymous said...

The recent dollar upsurge sure has the feel of a bear market rally.

Russia today selling off USD holdings- who and how many will follow?

Viv said...

Lehman had to slash and burn through it's business to find assets to sell. A near 4 billion dollar loss, 93% divident cut and the stock is moving higher today? And the market is moving up? hahaha.

On an oil note, August global oil supply fell by 1.0 mb/d to 86.8 mb/d on North Sea maintenance, the BTC pipeline outage and lower OPEC supply. Non-OPEC output is revised by -180 kb/d for 2008 and by -85 kb/d for 2009, with hurricane outages impeding 2H08 supply. Non-OPEC growth including OPEC NGL is now 580 kb/d in 2008 and 1.56 mb/d in 2009.

And wait for this, the IEA is still expecting demand to increase this year, with the global recession and credit crunch. Whats going to happen to the markets when we start sliding from the peak...