Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
What will be the best performing asset-class in 2008?
crude oil?
10%
[ 8 ]
natural gas?
5%
[ 4 ]
metals?
5%
[ 4 ]
precious metals?
28%
[ 21 ]
agricultural commodities?
40%
[ 30 ]
emerging market equity?
1%
[ 1 ]
bonds?
1%
[ 1 ]
other (please specify)?
8%
[ 6 ]
Total Votes : 75
Author
Message
syrac818 Heavy Crude
Joined: Jun 01, 2005 Posts: 115
Posted: Wed Jun 11, 2008 3:16 pm Post subject: Re: Trader's Corner 2008
Wow, what a great resource here on the site, really glad I found it. Looks like there's some great minds on here.
I have been investing with a peakoil mindset since about '04 - thanks mostly to the info I found on this site. Obviously it has been a tremendous return so far.
However, no for the first time I am feeling a little hesitant. In fact, I have a small amount of cash to play with (I mean like $1K small) and was considering a short position on oil. My thought process behind this has been the demand destruction we're seeing in the US, and I feel the upcoming numbers will see an even greater drop in gasoline demand. While I know it's a global issue, I'm concerned about subsidized fuel prices being raised. Finally, it does seem like we're seeing increased production (as I read on the oil drum), despite depletion from Russia and Mexico. Looks as though we'll have more coming on, with projects like Thunderhouse being the latest. Ok, enough of me ranting..
I'm a believer in peak oil and long term increases, but feel we could see a pullback in this environment. Anybody else getting this sense? Interested to hear your thoughts - thx.
Posted: Wed Jun 11, 2008 5:39 pm Post subject: Re: Trader's Corner 2008
IF the current run up is driven by speculation and not fundamentals of supply and demand THEN you still run the risk that it has a long, long way yet to run.
Momentum is solidly in favor of still higher prices near term. I'd hate to see you get your shorts squeezed. _________________ Cougar
"Use it up, wear it out, make it do, or do without." - Brigham Young
Joined: Aug 03, 2006 Posts: 4337 Location: Graceland
Posted: Thu Jun 12, 2008 8:30 am Post subject: Re: Trader's Corner 2008
syrac818 wrote:
Wow, what a great resource here on the site, really glad I found it. Looks like there's some great minds on here.
I have been investing with a peakoil mindset since about '04 - thanks mostly to the info I found on this site. Obviously it has been a tremendous return so far.
However, no for the first time I am feeling a little hesitant. In fact, I have a small amount of cash to play with (I mean like $1K small) and was considering a short position on oil. My thought process behind this has been the demand destruction we're seeing in the US, and I feel the upcoming numbers will see an even greater drop in gasoline demand. While I know it's a global issue, I'm concerned about subsidized fuel prices being raised. Finally, it does seem like we're seeing increased production (as I read on the oil drum), despite depletion from Russia and Mexico. Looks as though we'll have more coming on, with projects like Thunderhouse being the latest. Ok, enough of me ranting..
I'm a believer in peak oil and long term increases, but feel we could see a pullback in this environment. Anybody else getting this sense? Interested to hear your thoughts - thx.
Most of the move upward we have seen recently has occurred against a backdrop of no bad weather in the Northern Hemisphere and no unexpected political events.
I wouldn't want to be short with the potential for weather and political events in the near term to provide more upward pressure.
It's also risky to try to predict the future when you are betting on a pullback as part of a presumably inevitable upward trend in price.
If you want to short something, I might check out U.S. financials. I think there is still some money to be made shorting that group. _________________
Posted: Sat Jun 14, 2008 7:15 pm Post subject: Re: Trader's Corner 2008
.
I've found an article on the asia times site and would welcome the views on it , how truthful is it ?
Credit default swap
Warren Buffett once described derivatives bought speculatively as "financial weapons of mass destruction".
In his Berkshire Hathaway annual report to shareholders he said:
" Unless derivatives contracts are collateralized or guaranteed,
their ultimate value depends on the creditworthiness of the counterparties.
In the meantime, though, before a contract is settled, the counterparties record profits and losses
- often huge in amount - in their current earnings statements without so much as a penny changing hands.
The range of derivatives contracts is limited only by the imagination of man (or sometimes, so it seems, madmen)."
The overall numbers circulating are reported in the more than 50 trillions range over five years .
"The Joint Forum of the Basel Committee on Banking Supervision, an international group of banking,
insurance and securities regulators, wrote in April that the trillions of dollars in swaps traded by hedge funds
pose a threat to financial markets around the world.
"It is difficult to develop a clear picture of which institutions are the ultimate holders of some of the credit risk transferred,"
the report said. "It can be difficult even to quantify the amount of risk that has been transferred."
Fitch Ratings reported in July 2007 that 40% of CDS protection sold worldwide was on companies or securities
that are rated below investment grade, up from 8% in 2002.
That's pretty harsh ... is there some truth in it ?
Posted: Sat Jun 14, 2008 8:05 pm Post subject: Re: Trader's Corner 2008
Scary, hey Sparky? And the truth is, nobody, not all the king's horses, nor all the king's men, can tell you how it's all put together, nor how it will break down, and into how many pieces.
Posted: Mon Jun 16, 2008 2:48 am Post subject: Re: Trader's Corner 2008
Thanks for all the comments. Just back from Austria. Had a great weekend of football, but now I am shattered. Today I need to get my head back into business. Lot's of upsets and surprizes.
Just a point about derivatives. Not all derivatives are created equal. Some are only as good as the counterpart guaranteeing them, and I always had a problem with that concept. It is like giving insurance premiums to your insurance broker, and hoping they will still be in business when your house burns down. Maybe, maybe not?
Others are not nearly as scary. Take an interest rate swap (IRS) or future rate agreement (FRA). They are just bets on interest rates. So usually they have a cap and a floor. A limited range in which they will most likely trade. Sure given enough leverage a fund or a bank can still hurt themselves badly with a large directional bet gone wrong, but in general if you buy interest protection against, say, interest rates spiking higher in the next 6-mos. there are a range of probabilities, and you may be out at the end of the contract by, say, 25 or 50 bps.
That is completely different than insuring GMAC or Ford from default on, say, $1 billion nominal in underlying with the assumption that, "hey, why not collect the premium", but expect never to be called. Obviously, when you get a blow-up like at Bear Stearns (Lehman?) you have to realize the chain reaction that would be unleashed due to counterparty default on all these underlying credit default swaps. So I think the banks have been very lax about letting the size of their credit default portfolios get so large even if their net position (long-short) is flat.
It reminds me of the shipping business and trading bills of lading. The contract strings were very, very long with the same cargo changing hands many times. At maturity when the cargo was actually shipped or delivered the counterparts used to sit down and figure out who owed whom what. Just pieces of paper around the table usually, but if someone defaulted it broke the whole chain. A dozen or more contracts built on one cargo. One seller. One end buyer. But each contract is a potential weak link. Settlement risk is a real worry. And CDS/CDOs are no different.
Later! ; - )) _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Mon Jun 16, 2008 2:15 pm Post subject: Re: Trader's Corner 2008
What are everyones views on the oil price over the next couple of months?
Personally, I have sold most of my oil options. It was just too tempting. I am planning to buy futures on fibo retracements at a later point but for now I think the price will come down. The Saudi's are clearly up to something and may announce an output increase at the same time as some regulatory reform is announced on NYMEX and ICE. On the other hand I could be completey wrong! What do you guys think?
Posted: Mon Jun 16, 2008 3:19 pm Post subject: Re: Trader's Corner 2008
I actually want oil to go down now, so some of the heat can be taken off the speculators.......no thanks to the mainstream media.
Sometimes I get this weird feeling an angry mob is going to storm the nymex trading floor and shut everything down much like the Storming of the Bastille.
//
I think oil has reached a peak and will go down for now in the near term. However I do NOT want to put my money where my mouth is. I'm willing to lose my pride by being wrong but I'd rather not lose my money.
Posted: Tue Jun 17, 2008 3:02 am Post subject: Re: Trader's Corner 2008
Supply and demand indicates crude should be lower, but the Iran/Israel factor is now putting a floor under prices, while acting like a lightning rod for further price spikes. Having cleared $137 technical objective the market does have the psychological target of $150 in its sights. I agree that the opportunity cost is worth paying to avoid an outright loss. No balls here! ; - ))
UPDATE: looks like no IOB in euros this year?
Quote:
Iran has withdrawn around $75 billion from Europe to prevent the assets from being blocked under threatened new sanctions over Tehran's disputed nuclear ambitions, an Iranian weekly said.
Western powers are warning the Islamic Republic of more punitive measures if it rejects an incentives offer and presses on with sensitive nuclear work, but the world's fourth-largest oil exporter is showing no sign of backing down.
"Part of Iran's assets in European banks have been converted to gold and shares and another part has been transferred to Asian banks," Mohsen Talaie, deputy foreign minister in charge of economic affairs, was quoted as saying.
Joined: Oct 15, 2004 Posts: 2256 Location: Arkansas
Posted: Tue Jun 17, 2008 6:50 am Post subject: Re: Trader's Corner 2008
Iran withdrawing its Euros, and now admittedly having sold its dollars, gives credibility to the article posted by MM (I think) that Iran was going to be investing in gold.
Posted: Tue Jun 17, 2008 7:38 am Post subject: Re: Trader's Corner 2008
I do not like Paul Ferrell. I think he is a big hypocrite. One day he is touting his Lazy Portfolio using tracker funds and the next he is writing about market timing to protect against the coming Bear Market of the Next Decade. When convenient he brings up the fact that he worked at MS. Then later he calls it Wall Street's Big Con. But in any case this was an interesting piece on some common pitfalls when investing. Hence why I post it here. Read everything. Listen to everyone. Then decide.
Quote:
Yes, Wall Street's got a great con game going, but it only works because America's 95 million investors are willing victims, love playing along, actually letting Wall Street get away with it! I call it "Brainwashing 101 for Dummies." Insiders use fancier terms like neuroeconomics, behavioral finance and the new "science of irrationality."
But labels aside, you're being brainwashed. And Wall Street's laughing all the way to the bank at how easy it is to dupe gullible investors by using the 11 rules of "Brainwashing 101 for Dummies." We got them for you: Everything you'll ever need to know about the big con.
Source: 'Brainwashing 101 for Dummies' _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Wed Jun 18, 2008 6:46 am Post subject: Re: Trader's Corner 2008
Quote:
Energy Weekly
Saudi move: A short-term response to a long-term problem
Volatility reaches the highest level in years
The oil market has been characterized by a high level of uncertainty in the past week as signs of rapidly tightening near-term fundamentals have been countered by the announcement of a supply response by Saudi Arabia. As a consequence of the uncertainty, volatility has surged to the highest level of the past few years.
Thin layer of spare production capacity used to offset structurally declining production
While the announced production increase could potentially
alleviate near-term tightness in market fundamentals, it remains, in our opinion, a short-term response to long-term structural problems. The bullish surprises that have contributed to tighten near-term fundamentals since the beginning of the year, such as the surge in diesel demand from emerging economies or the steep supply decline rates in Mexico, North Sea, Russia and Venezuela, are structural in nature. Use of the current thin layer of global
spare capacity does not address the key long-term issue, which remains the inability of the system to grow production capacity sustainably.
Supply increase needed to prevent severe tightening in near-term
fundamentals, but unlikely to persist
Nonetheless, we believe that the announced near-term supply response is needed to prevent a severe tightening in near-term fundamentals, exacerbated by the ongoing global de-stocking, and to offset the steep supply declines in other producing regions. However, we believe Saudi production is unlikely to remain at record high levels after the near-term shortages are alleviated,
but will likely return to more average levels by year-end. On balance, we do not expect a meaningful impact on our estimated inventory path. We maintain that the risk to our year-end $149/bbl target remains skewed to the upside given the strength of long-dated prices.
source: Goldman Sachs Commodities Research
June 18, 2008
The long list of worries about China includes inflation, rapidly rising labor costs, shortages of workers and energy, a strengthening currency, dwindling tax breaks for foreign investors and the possibility of civil unrest. With wages in China now rising close to 25 percent a year in dollar terms in many industries, the vaunted "China price" for a growing list of goods, particularly low-tech products, is no longer such a bargain.
Multinationals "should be thinking about all the world and keeping a balance," and they are doing so by encouraging suppliers to diversify out of China, said Edward Kang, the chief executive of Ever-Glory International, a sportswear manufacturer in Nanjing, China. Ever-Glory sells to Wal-Mart and Kohl's in the United States, and it is building a factory in Vietnam to supplement its three factories in China.
Very few factory jobs are headed from China to the United States, despite high oil costs that are making it more costly to ship goods across the Pacific. The factory investments shifting from China to elsewhere in Asia tend to be in low-skill, low-wage industries as China deliberately focuses on higher-wage industries like precision machining and computer component manufacturing.
That is making it an even more formidable rival for the United States. "China is becoming more competitive because they're moving upscale," said Jack Perkowski, the chairman and chief executive of Asimco Technologies, a 12,000-employee engine parts manufacturer based in Beijing. China's main rivals also suffer from serious inflation. But their costs are rising from a lower starting points. Inflation hit 25.2 percent last month in Vietnam, yet workers there still earn less than half as much as Chinese workers.
UPDATE: Bush pushes to drill offshore and remove barriers to building refiners! $70 oil here we come! HAHA!
And now for something completely different...
Quote:
Investment bank Merrill Lynch said its monthly poll of 204 fund managers across the world showed some of the most negative stances on equities it has seen in 10 years.
The main shift, the bank said, was in a view that global growth and profit expectations were falling just as expectations of higher interest rates were rising because of inflation.
"About 87 percent (of respondents) believe we are in a world of above-trend inflation and below-trend growth," said David Bowers, Merrill's poll consultant.
"People now believe we are in a world that is not only slowing but where short rates are rising," he said.
With "bigness bias" you ignore small numbers like brokerage commissions and fund fees. Big mistake: This is why more Wall Street bankers, brokers and fund managers own more yachts and make 10 to 100 times more than the average clueless investor.
In my 2nd life I would like to work as either a broker or a fund manager so I can laugh at all the "stupid" traders out there risking their own capital.
Any man who has figured out how to make money without risking his own capital is smarter than me, that's for sure!!!
//
Not to toot my own horn too much but back in June 5th when I said:
"I think corn and soybeans look hot." damn was I right! --> too bad I placed my money on wheat instead.
I still have a profit added to my name but it's basically loose change when it could of been a fist full of cold hard cash if only I had placed my bets on corn.
//
Aside from a lot of practice of course, I think trading is a profession that requires a certain psychological mindset. Basically you're either born with it or NOT. For example, there's not a day that goes by where I didn't buy, sell, hold, or fold at the most advantageous time. But it honestly doesn't bother me. Anybody who has a natural personality where life's regrets are held onto like a ball and chain wouldn't last too long in this game, even if they were a genius.
Posted: Thu Jun 19, 2008 3:20 am Post subject: Re: Trader's Corner 2008
Quote:
Natural Gas Weekly
US natural gas prices finally at international levels
However, higher-than-expected LNG demand from Asia and Europe will likely keep US LNG imports below our previous expectations. We therefore believe that the risk to current NYMEX natural gas prices is to the upside through the end of injection season to compete for cargoes.
Higher US natural gas prices likely to start attracting additional LNG
cargoes in the coming weeks
US natural gas prices have been above day-ahead NBP prices for most of June, likely providing incentive for LNG suppliers to send additional cargoes to the United States. We therefore expect a rise in US LNG imports towards the end of the month. However, even with an increase from current levels, June LNG imports into the United States will likely fall below our previous expectations by 400 mmcf/d.
Global demand for LNG has been higher than expected
Data now available for 1Q2008 shows that global demand for natural gas was actually well above our previous expectations. In Asia, year-on-year level increases in LNG purchases were led by South Korea and Japan, while percentage increases were higher in non-OECD Asia. In Europe, the increases were led by Spanish demand.
Higher-than-expected US production has offset higher-than-expected demand
Higher-than-expected pipeline exports and industrial use of natural gas increased 1Q2008 US natural gas demand above our previous expectations. However, these increases were met by higher-than-expected increases in US production, so that end-of-March inventory levels were in line with our forecast levels.
We have updated our US and global LNG balance tables
We believe that the drivers underlying the shifts observed in the LNG market relative to our expectations during 1Q2008, such as the vulnerability in non-OECD Asia's power infrastructure and rapidly increasing oil prices, will continue in the medium term. We are therefore revising up our 2008 Asian and European LNG demand forecasts and revising down our North American LNG demand forecast.
source: Goldman Sachs Commodities Research
June 18, 2008 _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
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