Looks like Everyone is SHORT Oil...

according to Schaeffer... the put side is overloaded...


Type rest of the post here

Getting ready to trade oil

Putting on my speculative trading hat, i am seeing I nice short opportunity in the crude complex. How to trade? I might use the puts on IXCRJ. Ishares, S&P Global energy has some 150 June puts available in the 8 dollar range. BS models show small pure premium pricing here, so i might enter this trade in the AM. Longer term, I am still bullish on Crush as per the previous post for several reasons, but here is one that is from MSN news.

Exxon Mobile has falling production, on a near and long term range. All true. There were short-term, one-time reasons for production to fall in the first quarter of 2008. But don't conclude that ExxonMobil's problems are limited to that quarter. All the evidence argues that the company will report lower oil and natural-gas production for all of 2008, even though new projects are scheduled to come on line in the second half of the year. Looking just at oil, the company's production will not grow at all through 2012.

The company also reduced its projections for annual production to 4.5 million barrels of oil equivalent a day in 2012 from the 4.8 million barrels a day in 2011 that it projected a year ago. Just further evidence that ExxonMobil has a production problem.

Granted you have Indian, Chinese, and Russian companies entering the fray to help stem that tide, but it seems as though they will be busy servicing the local growing markets first, markets that are not even 10% of the lifestyle of America.

Shorts. Bearish MOVE in Markets

AAPL looks like an interesting short here, so do puts on the OEX. PPI numbers interesting. I'm very short term bearish here. 200 MA is too much resistance, and this is a gap down. Looks bad.

Type rest of the post here

$300.00/bl Oil After 2010

I'm becoming more bullish on the complex and the CRB index. We're going to enter a period of exponential growth in the price of crude not seen since the days of Dot Com IPO's This problem may prove to be the camel that finally breaks the US consumer.

The Export Land Model
To understand the importance of exports when discussing peak oil, ask yourself the question, "What's more important: the fact that global oil production is falling ... or that the oil-exporting nations are cutting off their exports?"

The #3 Source of Oil to the US Is About to Go Offline
Mexico provides about 14% of the oil the US imports. On any given day that makes it either the #2 or #3 leading source for US oil imports after Canada and Saudi Arabia. Given that the US currently imports close to 70% of its oil needs, the Mexican oil is critical.

But here's the thing. Using straightforward ELM calculations, Jeffrey Brown is confident that Mexico will ship its last barrel of oil to the United States -- or anywhere else, for that matter -- about 6 years from now, in 2014. In a recent interview with Brown, I asked about this forecast.

"Mexico was consuming half of their production at peak in 2004. And if you look at the '05, '06, '07 data, they're basically on track, on average, to approach zero net oil exports no later than 2014," he confirmed.

Of course, the US is completely unprepared to replace this source of oil, especially considering the growing stresses on global oil supplies causing by ballooning demand from emerging markets. That means the international competition for available supplies is only going to get more desperate in the months and years ahead.

Coincidentally, while this report was in preparation, on April 30, 2008, PEMEX, Mexico's national oil company, announced it would be unable to fulfill this year's scheduled oil export obligations to the United States ... falling short by about 11%, or 184,000 barrels a day.


Kuwait has a 70% Govt Surplus.. Thank the Fed

Check out this video
Type rest of the post here

When more debt Won't do it


Faber points out a major concern: The debt-burdened U.S. economy may have reached "zero hour" -- that being when a dollar of new debt has no incremental positive impact on U.S. gross domestic product.

For the past 30 or 40 years, it's taken increasingly larger amounts of debt to increase GDP. From 2000 to 2007, total credit market growth was $21 trillion, and nominal GDP growth was only $4 trillion. We have reached the stage where a dollar in debt produces only 20 cents or so in economic growth (versus about 90 cents produced in the 1960s).

Type rest of the post here

Housing Bust Recovery in 1930s

Its refreshing to revisit a past not even my parents knew...27 dollar a month payments!

Type rest of the post here

ALT-A Starting to Crumble...

Has anyone taken a look at IndyMac Bank recently??? IMB Ticker. Wow. Looks like we have subprime number two coming on strong...
Check out this analysis from the Mortgage Guy...

Basically, the dollar volume and size of loans is bigger then Subprime, and its going the same way. 2009-2011 is the major nuclear winter of resets for these mortgages......End of post

Dow 13K, Oil 125, and Economic Bright Spots

Its been a while since i posted. A few updates. First off, Walmart is doing great! A stop out of the short from last fall produced a small loss. Google went on a tear and i should have spread the calls to May/June for the continued upside that i did not participate in. And the financials have bounced but are lagging. More rough waters ahead, with Bank of America's call on losses from equity lines mounting as one example. Lets go to the charts!

Looking at the Dow Jones, it looks like there is alot of resistance at the 13K level. The broader market is alot stronger then the major indices in many sectors, and the home builder index seems to have made a major bottom. We have a period of softness ahead, as the indicators are not confirming the recent rally. The idea that capital spending will help offset the failing consumer also seems to be helping the general economy. And what about Crude? We're about near the 133 level we figured we might get to into the summer months. But 200 is coming into 2010. The dollar seems to be making a bottom here, as we become the worlds 2nd carry trade defacto. Reversals may happen, but we should see a continuation of all the above into the late summer/fall.