gugaplex, make sure you attend school tomorrow, no bunking off this time.....
"Oil is losing steam. If it can't move up significantly from here, it may peter-out and turn down...."
Do you have ANY idea about economics or was this meant in jest?
Let me tell you this, If oil does go down, I'll be buying so much of it along with every other person with half a brain cell, that the price will go back north headed for Alaska
"Oil is losing steam. If it can't move up significantly from here, it may peter-out and turn down...."
Do you have ANY idea about economics or was this meant in jest?
Let me tell you this, If oil does go down, I'll be buying so much of it along with every other person with half a brain cell, that the price will go back north headed for Alaska
JasonC2 said:
DOWN significantly. Sorry to remind you, but bubbles pop. Just like EVERY bubble in the past. The bubble is going to pop soon and the longs will be left holding the bag. You are a fool playing upon emotion versus logic if you can't see this tried and true practice that has rang true time and time again....
TWI
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gugaplex,
You really do appear to be the perenial bear. I have not seen a bullish post from you.
From somebody who has been in commodities for many years I advise extreme caution when it comes to shorting at the current time. If you strongly believe it will come off, far better to stand aside and try to buy the strength once the dip is over.
Recently many seasoned traders have been carried out on a stetcher from shorting base and precious metals because it was "Just too high".
Caveat venditor.
You really do appear to be the perenial bear. I have not seen a bullish post from you.
From somebody who has been in commodities for many years I advise extreme caution when it comes to shorting at the current time. If you strongly believe it will come off, far better to stand aside and try to buy the strength once the dip is over.
Recently many seasoned traders have been carried out on a stetcher from shorting base and precious metals because it was "Just too high".
Caveat venditor.
I was in Warri a couple of months ago which is in the Delta Region of Nigeria. Any trader who takes on serious shorts right now is quite simply bonkers. The situation in Nigeria is so volatile, Iran is a worry and more importantly, the refining capacity from Sour to Sweet is pretty much maxed out.
As Twalker said, even if I were bearish on crude, I'd simply buy once the dip was over.
As Twalker said, even if I were bearish on crude, I'd simply buy once the dip was over.
"Recently many seasoned traders have been carried out on a stetcher from shorting base and precious metals because it was "Just too high". ...LOL and I bet most of them did not live through the 1970's ..there are advantages to being a bit older...you get old enough and you've seen most of the economic wriggles that exist
Twalker,
I am a perrenial bear on commodities. If you check the other boards within this site you will see I like tech, healthcare, and financials. I am bullish on the global economy. The sectors I am bullish on are still recovering from their bubble bursts, and I expect commodities to burst soon as well. I am not shorting any commodities (although I have in the past - made a good bit of money, and then quickly lost it on another trade a few months later). I agree with you that it is foolish to short them here because you could have your a$$ handed to you since it's difficult to time the end of the bull-run. I take a longer-term stance on the markets, and believe it is better to exit a long position early rather than late. Take care....
I am a perrenial bear on commodities. If you check the other boards within this site you will see I like tech, healthcare, and financials. I am bullish on the global economy. The sectors I am bullish on are still recovering from their bubble bursts, and I expect commodities to burst soon as well. I am not shorting any commodities (although I have in the past - made a good bit of money, and then quickly lost it on another trade a few months later). I agree with you that it is foolish to short them here because you could have your a$$ handed to you since it's difficult to time the end of the bull-run. I take a longer-term stance on the markets, and believe it is better to exit a long position early rather than late. Take care....
TWI
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gugaplex,
I am a long only trader in this sector but unlike you believe this bull move will be with us for many years, although not at the current pace and certainly not without some pain on pullbacks.
Sorry to accuse you of being bearish everything , I was unaware of your bullish bias on other boards. When it comes to individual equities I have a horrible track record so stick to the primary indices and do not get involved in those sections of the site.
Good trading.
I am a long only trader in this sector but unlike you believe this bull move will be with us for many years, although not at the current pace and certainly not without some pain on pullbacks.
Sorry to accuse you of being bearish everything , I was unaware of your bullish bias on other boards. When it comes to individual equities I have a horrible track record so stick to the primary indices and do not get involved in those sections of the site.
Good trading.
Directional
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gugaplex said:
A "bubble" is a completely different economic scenario from the situation with oil where demand is now beginning to overtake supply of a finite resource.
There are lots of geopolitical, economic and fundamental reasons why oil is priced where it is right now, but the India and China oil use growth factor, and continued growth in use by the west means that globally, right now, we are only just pumping enough to meet current demand, never mind future years.
There simply isnt enough spare refining capacity, or pumping capacity for the cheaply and easily refineable light sweet crude that we require. The markets are recognizing this fact and pricing it in to the cost of oil.
Sure, there are sour crudes types available in more abundance, but they dont crack and yield as much petrol or distillate as sweet crude, and there are problems with the sulphur content. Bottom line is other crude types are significantly more expensive to refine AND you need more oil to produce the same amount of refined product.
Either way, the general price trend for both oil and product is almost certainly likely to be one way from here to the forseeable future, and down isnt a likely scenario.
Directional
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"Peak Oil means not 'running out of oil', but 'running out of cheap oil'."
http://www.energybulletin.net/primer.php
http://www.energybulletin.net/primer.php
If you want to deter the speculative element of anything..oil whatever...you do it by having certainty built in...that is an excess situation which is sufficiently large that every body just goes to sleep and forgets about it. Volatility is minimal in such a situation. We have had that ,but the problem is now we do not. In an ideal world without side issues effecting certainty the excess might just about be coping. However , businesses and investors alike are looking at the narrowing trend for this excess and adding in the very real side issues that might effect that even further and as such they are speculating quite reasonably on the level of uncertainty in this situation going forward.
It would be a mistake to think that even a drop in oil to $50 was going to be the end of this story. I don't think it is. Think of it this way ,when something becomes more scarce it attracts a premium price which in turn becomes the capital incentive to invest in removing that scarcity. In this case adding to energy supplies generally. It's a kind of scarcity value tax
...however, you can easily see that if govt's start to over tax this premium you won't get that investment happening,or I should say it won't be happening as quickly as it should. Frankly I can think of a few good long term positions to build in this asset group over the next 10 to 20 years.
It would be a mistake to think that even a drop in oil to $50 was going to be the end of this story. I don't think it is. Think of it this way ,when something becomes more scarce it attracts a premium price which in turn becomes the capital incentive to invest in removing that scarcity. In this case adding to energy supplies generally. It's a kind of scarcity value tax
...however, you can easily see that if govt's start to over tax this premium you won't get that investment happening,or I should say it won't be happening as quickly as it should. Frankly I can think of a few good long term positions to build in this asset group over the next 10 to 20 years.
TWI
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I notice that the recent run up even in front end pricing despite more than adequate immediate supply is always encouraged by the leaking stories from the refiners. How many rumours per day can there be that this or that refinery has problems. they only just had maintenance season!
I have the impression that the arms and energy industry are the ones who are profiting most from the current global instability and will continue to promote a lot of half truths well into the future. The divide between corporation and politician is now totally removed and a number of people are getting very very wealthy by taking away the future of the US middle classes.
I have the impression that the arms and energy industry are the ones who are profiting most from the current global instability and will continue to promote a lot of half truths well into the future. The divide between corporation and politician is now totally removed and a number of people are getting very very wealthy by taking away the future of the US middle classes.
I've got a very jaundiced view on the whole shooting match from CEO's who think the market really needs to know every quarter what the future for their business is..through to central banks who need to make statements instead of simple announcements such as "bank rate is now X %"...most anything these guys say is so full of perhaps,maybe's ,could be's that it's got next to no value in adding to an investors decision making process..In fact I'd go further and say any investor with a space between their ears worth talking about will discount the lot and rest on his own judgement..
As for middle class America ..it would just do well to have the thought that they have no god given right to a privileged position re wealth distribution and the same goes for most western nations. Hung BigOne in China and Jose HaveALot in Brazil etc etc are going to be doing some catching up in the wealth stakes There are ways though of maintaining your wealth position simply by thinking if you can't beat them join them. They get the return on their cheap labour and you get the return on providing the capital to work in harness to that labour IF you are patient and IF you think intelligently about how to secure that capital in relation to your asset value.
As for middle class America ..it would just do well to have the thought that they have no god given right to a privileged position re wealth distribution and the same goes for most western nations. Hung BigOne in China and Jose HaveALot in Brazil etc etc are going to be doing some catching up in the wealth stakes
There are ways though of maintaining your wealth position simply by thinking if you can't beat them join them. They get the return on their cheap labour and you get the return on providing the capital to work in harness to that labour IF you are patient and IF you think intelligently about how to secure that capital in relation to your asset value.Yes, but the higher the price of oil goes, the more innovation in energy conservation will increase. If energy prices get too high, people will adjust by consuming less energy. Demand for energy will slow...
Prices will fall...
Inflation will drop........
Global stock markets will THRIVE....
Prices will fall...
Inflation will drop........
Global stock markets will THRIVE....
it all revolves around time..with enough time most anything can be adjusted.
in this case where you have a single country such as china growing at an aggregate of 7%pa which basically means it doubles it's size every 10 years then adjustment time is something we have run out of without some radical action which would be so economically disruptive no govt will sanction it.. At this point you would have to be brain dead to position yourself against this longer term energy flow and unfortunately if you have not yet noticed much of the black stuff is not actually in the hands of our nearest and dearest friends. neither is a lot of the gassy stuff. Without meaning to be alarmist wars have started over just such issues as this..scarce resources. We would hope we have learned how destructive this is ,but I wouldn't bet on that.
"Inflation will drop........" ...you might in time be right on that one ,but how about a little bet that if it does the next boogeyman will be deflation and if you have not noticed....
"Global stock markets will THRIVE..." ...markets do not thrive on deflation they stagnate
and just to cover all possible bases you can have a combination of deflation and inflation effecting different elements of the economy known as stagflation where your investments will actually only be of passing concern to your grandchildren who will have the momentus decision of whether to sell their 5% share of BP to buy their next holiday ,or should they just use the certificates to paper juniors bedroom.
12.5% rate in Iceland virtually overnight,but of course they are the exception. are they not...no other country ,or individual out there is so financially over stretched are they ?
We're walking a tightrope....hands up everyone who thinks Ben Bernanke is up to the job of making sure we don't fall off ...hands up everyone who's buying a safety net
in this case where you have a single country such as china growing at an aggregate of 7%pa which basically means it doubles it's size every 10 years then adjustment time is something we have run out of without some radical action which would be so economically disruptive no govt will sanction it.. At this point you would have to be brain dead to position yourself against this longer term energy flow and unfortunately if you have not yet noticed much of the black stuff is not actually in the hands of our nearest and dearest friends. neither is a lot of the gassy stuff. Without meaning to be alarmist wars have started over just such issues as this..scarce resources. We would hope we have learned how destructive this is ,but I wouldn't bet on that.
"Inflation will drop........" ...you might in time be right on that one ,but how about a little bet that if it does the next boogeyman will be deflation and if you have not noticed....
"Global stock markets will THRIVE..." ...markets do not thrive on deflation they stagnate
and just to cover all possible bases you can have a combination of deflation and inflation effecting different elements of the economy known as stagflation
where your investments will actually only be of passing concern to your grandchildren who will have the momentus decision of whether to sell their 5% share of BP to buy their next holiday ,or should they just use the certificates to paper juniors bedroom.12.5% rate in Iceland virtually overnight,but of course they are the exception. are they not...no other country ,or individual out there is so financially over stretched are they ?
We're walking a tightrope....hands up everyone who thinks Ben Bernanke is up to the job of making sure we don't fall off ...hands up everyone who's buying a safety net
chump said:it all revolves around time..with enough time most anything can be adjusted.
in this case where you have a single country such as china growing at an aggregate of 7%pa which basically means it doubles it's size every 10 years then adjustment time is something we have run out of without some radical action which would be so economically disruptive no govt will sanction it.. At this point you would have to be brain dead to position yourself against this longer term energy flow and unfortunately if you have not yet noticed much of the black stuff is not actually in the hands of our nearest and dearest friends. neither is a lot of the gassy stuff. Without meaning to be alarmist wars have started over just such issues as this..scarce resources. We would hope we have learned how destructive this is ,but I wouldn't bet on that.
"Inflation will drop........" ...you might in time be right on that one ,but how about a little bet that if it does the next boogeyman will be deflation and if you have not noticed....
"Global stock markets will THRIVE..." ...markets do not thrive on deflation they stagnate
and just to cover all possible bases you can have a combination of deflation and inflation effecting different elements of the economy known as stagflation
12.5% rate in Iceland virtually overnight,but of course they are the exception. are they not...no other country ,or individual out there is so financially over stretched are they ?
We're walking a tightrope....hands up everyone who thinks Ben Bernanke is up to the job of making sure we don't fall off ...hands up everyone who's buying a safety net
I'm not claiming we will have deflation, rather slowing inflation like the late 90's when markets "thrived".
