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The Two Most Important Charts For The Near-Term Future Of Oil Prices

Tyler Durden's picture


With nobody having any clue how the MENA situation will play out (and those who tell you otherwise can be immediately dismissed as full of feces to be ridiculed in perpetuity by everyone but CNBC where they will have a guaranteed contributor slot), and as crude has promptly become the most volatile asset class (as Zero Hedge predicted last summer when we lamented the death of equities) recently experiencing an unprecedented 7 Sigma move which likely led to the liquidation of at least one asset manager, there are two main charts which matter for the oil. On one hand, the Crude Oil non-commercial net specs are at an all time high: well over 100% more than during the oil time highs in crude in 2008. This means that speculators are anticipating an even more powerful move higher than that seen in the summer of 2008 when Crude hit $150 (it also presents the possibility of an unprecedented plunge in oil should the speculative thesis not be realized). Just as important, the performance of energy as a subsegment of all commodities is currently materially underperforming all other commodities, with Previous, Agircultural and Industrial commodity classes all doing far better than crude and its peers. Should there be a rotation out of other commodities into the energy complex, look for crude to surge far beyond $125 in the next few weeks. All it would take is one Saudi geopolitical spark.

Total WTI non-commercial net spec contracts and Crude Light pricing:

Total commodity returns by class:


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Sun, 03/06/2011 - 14:09 | 1023743 DoChenRollingBearing
DoChenRollingBearing's picture

A really BAD regime change in Saudi Arabia would send crude way higher than $125.

It might be the game changer, what with all the other financial problems (debt, deficits, wholesale theft, etc.) still out there.

But, these are possible swans we can SEE.  What about the ones we cannot?


Sun, 03/06/2011 - 14:11 | 1023751 Hulk
Hulk's picture

A bad regime change in SA is the only black swan I need to see! All other black swans will be derivative products...

Sun, 03/06/2011 - 14:38 | 1023812 Malcolm Tucker
Malcolm Tucker's picture

Anonymous activist/hacker group interview with Al Jazeera:

Sun, 03/06/2011 - 16:48 | 1024151 Hulk
Hulk's picture

Very interesting...

Sun, 03/06/2011 - 15:31 | 1023923 IQ 145
IQ 145's picture

 $4.19 / gallon for regular today at the local pump in Hawaii. Ugh.

Sun, 03/06/2011 - 16:10 | 1024048 tmosley
tmosley's picture

Gas there is always more expensive, just like everything else that isn't sourced locally.

Sun, 03/06/2011 - 16:38 | 1024115 Flakmeister
Flakmeister's picture

TM, my reply is awaiting you...

Sun, 03/06/2011 - 16:47 | 1024154 tmosley
tmosley's picture

Do me a favor and link to it.  I don't like digging through old stories.

Sun, 03/06/2011 - 16:19 | 1024075 Fahrenheit451
Fahrenheit451's picture

At least you're in Hawaii.

Sun, 03/06/2011 - 18:39 | 1024403 hero HNL
hero HNL's picture

I live in Manoa....Paying $4+ for gas is still 

sheap....In Japan right now, it's $6 and it's

supposed to be deflation over here.




Sun, 03/06/2011 - 23:32 | 1025153 Newsboy
Newsboy's picture

At Costco, or somewhere else?

Sun, 03/06/2011 - 19:06 | 1024447 Plainview
Plainview's picture

I'm not convinced the Crude pump isn't just a scam; Cushing is stuffed full of the stuff every month whether its $40 a barrel or $120 a barrel. Another spec bubble to shake ones head at.

Sun, 03/06/2011 - 14:28 | 1023776 EscapeKey
EscapeKey's picture

It would take a lot less than the 8mbpd output of SA to spike prices beyond $125.

Iran's 3.5mbpd would definitely do it. Algeria's 1.4mbpd, quite possibly.

Sun, 03/06/2011 - 14:26 | 1023778 theXman
theXman's picture

A really BAD regime change in Saudi Arabia would send crude way higher than $200. It will happen, just not this year.

Sun, 03/06/2011 - 15:11 | 1023880 Sudden Debt
Sudden Debt's picture

NO REGIME, will be a lot worse. With who are you going to trade oil then?



Sun, 03/06/2011 - 15:29 | 1023918 TeamAmerica
TeamAmerica's picture

I agree - most likely near-term outcome.  Saudi Arabia then becomes a self-service pump.

A liberal application of neutron bombs and then send in Halliburton.   No worries.

Sun, 03/06/2011 - 16:29 | 1024096 disabledvet
disabledvet's picture

you forgot the gay gorilla.

Sun, 03/06/2011 - 16:37 | 1024120 malikai
malikai's picture


A liberal application of neutron bombs and then send in Halliburton.   No worries.

Already thought this one through. It wouldn't work. All of the oil itself as well as the equipment near the detonation point would be neutron activated and radioactive. Think tritium from the hydrogen in the oil and carbon-14 from the carbon itself. There would be a bonus amount of deuterium created, however. The oil would only be good for the Eastern European and African markets. Maybe China would take it, but then it would be sold back to the west as plastic rice.

Sun, 03/06/2011 - 19:36 | 1024508 Triggernometry
Triggernometry's picture

Good to see someone else has a clue of nuclear physics.

Sun, 03/06/2011 - 17:48 | 1024296 cunningtrader
cunningtrader's picture

No-one, including TD, when rabbiting on about saudia arabia blah blah, talks about the REAL issue of supply which is?.... Ferris?...Bueller?....anyone? ...REFINERIES...OR RATHER THE LACK THEREOF... Who here knows, without cheating, hand on heart, when the last refinery was built in the US?.......that's right, 1976..........wanna know why? Because big oil colluded with the likes of the sierra club in the mid-nineties, to spread the message far and wide, that building refineries will fuck the human race..... translated, what they were really saying was, let's fuck the human race's hip pocket over with bullshit about refinery's environmental impacts, and watch the rivers of greenbacks flow baby.....


Sun, 03/06/2011 - 18:15 | 1024310 Flakmeister
Flakmeister's picture

  Ok, you are back, chew on this

In the 19th century, refineries in the U.S. processed crude oil primarily to recover the kerosene. There was no market for the more volatile fraction, including gasoline, which was considered waste and was often dumped directly into the nearest river. The invention of the automobile shifted the demand to gasoline and diesel, which remain the primary refined products today. Today, national and state legislation requires refineries to meet stringent air and water cleanliness standards. In fact, oil companies in the U.S. perceive obtaining a permit to build a modern refinery to be so difficult and costly that no new refineries have been built (though many have been expanded) in the U.S. since 1976. More than half the refineries that existed in 1981 are now closed due to low utilization rates and accelerating mergers.[18] As a result of these closures total US refinery capacity fell between 1981 to 1995, though the operating capacity stayed fairly constant in that time period at around 15,000,000 barrels per day (2,400,000 m3/d).[19] Increases in facility size and improvements in efficiencies have offset much of the lost physical capacity of the industry. In 1982 (the earliest data provided), the United States operate 301 refineries with a combined capacity of 17.9 million barrels of crude oil each calendar day. In 2010, there were 149 operable U.S. refineries with a combined capacity of 17.6 million barrels per calendar day.[20]

In 2009 through 2010, as revenue streams in the oil business dried up and profitability of oil refineries fell due to lower demand for product and high reserves of supply preceding the economic recession, oil companies began to close or sell refineries. Due to EPA regulations, the costs associated with closing a refinery are very high, meaning that many former refineries are re-purposed.[21]


As you can see, US refining capacity is the about the same. Get your spin straight

Sun, 03/06/2011 - 19:15 | 1024467 cunningtrader
cunningtrader's picture

You poor dumb c#nt, you've just supported my post.

Caerful, or you won't get paid for posting if you keep doing that lol! That, was my point  BOT,

 REFINING CAPACITY IS NOT ALLOWED TO INCREASE, BUT PRICES ARE.  You also quote demand dropped, are there BOTS in wonderland as well? This is exactly the Debeers model, constrict supply and the price will jump.

Sun, 03/06/2011 - 20:15 | 1024613 Flakmeister
Flakmeister's picture

If you removed your head from your ass and actually researched the history of refiners you might learn something. Why build extra capacity with a huge price tag that has to amortized over many years when you don't need it. 

Why don't you look at the correlation between US crude production, refining capacity and refined product demand?

I certainly hope you know more about trading than you do about anything else you have discussed here...

Sun, 03/06/2011 - 20:44 | 1024711 cunningtrader
cunningtrader's picture

Ahh....classic BOT BS....."when you don't need it"........fuck me your bosses are not getting their money's worth, see, us sheeple, the ones you get paid to misinform, understand how the law of supply and demand governs prices, but in your world, where BS is the norm, you trot disinformation readily, without  realizing that the sheeple have become aware of what you're paid  to do. Your're a fuckin joke. See google about how much oil gets stored in tankers globally....I fully expect your next post will "disinform" on this most interesting fact, and how you BOTS will continue to tell us sheeple, that even though demand is dropping, the price must go up.....


Sun, 03/06/2011 - 21:31 | 1024811 malikai
malikai's picture

Don't be sucked in. Let the trollbot have his fox news soundbite minute. It is all he/she/it gets to do.

Sun, 03/06/2011 - 18:08 | 1024343 Flakmeister
Flakmeister's picture

BTW, anyone who really wants to learn about refining

Follow the comments by Carnot... He only analyzes refineries as part of his job. You know, a professional. You will learn more about oil and refining in the 10 minutes it takes to read the commentary of a real expert than you will in 10 years at the Hedge listening to clowns like CT.

Sun, 03/06/2011 - 18:43 | 1024383 Spalding_Smailes
Spalding_Smailes's picture

Thanks for the link.

Tmosley is not the sharpest knife in the drawer either. Your right, he should stick with gold rants and the Ron Paul forums. He's been getting blasted on ZH lately ... Good work.

Sun, 03/06/2011 - 19:13 | 1024462 tmosley
tmosley's picture

Blather blather goes the delivery boy.

Sun, 03/06/2011 - 18:52 | 1024425 Spalding_Smailes
Spalding_Smailes's picture

One thing from Carnot post 


As for windmills and solar. Sure, but we cannot store electricity and how are we going to build and maintain this infrastructure.


This is the reason Buffett bought into BYD in China. Battery storage on a massive scale for wind • solar power.  His potential successor David Sokol • MidAmerican energy is already heading up research using the battery technology with wind and solar power storage. BYD is a leader in battery power, and you can drink the liquid from the batteries. Interest stuff ..

Sun, 03/06/2011 - 19:04 | 1024442 Flakmeister
Flakmeister's picture

 Its still active, the thread I linked, dont be shy ask questions, educate yourself...

Gotta run.. making pork tenderloins with a cranberry port reduction, to be served with a 93 Clos St. Denis...

Back later...

Sun, 03/06/2011 - 20:21 | 1024642 samsara
samsara's picture


You can lead a man to wisdom, but you can't make him think.

Sun, 03/06/2011 - 20:31 | 1024674 Flakmeister
Flakmeister's picture

True, but if you refrain from at least pointing to the path, you are as guilty as the fool.

Sun, 03/06/2011 - 19:18 | 1024477 cunningtrader
cunningtrader's picture

Yeeeesss BOT, keep trotting out your paid shill BS........why don't you do something for the readers here, try trolling the exploration-production companies out there, who actually cap wells with 70 metre oil columns they found lol... Here you go, try WPL down in australia for starters..

what a shame bullshitting BOTS can't be publicly outed and feathered and tarred in a public square......

Sun, 03/06/2011 - 20:15 | 1024630 Flakmeister
Flakmeister's picture

  Did you actually practice being an asshole? Looks to me like you have made it a life long ambition and goal...


Sun, 03/06/2011 - 20:44 | 1024715 cunningtrader
cunningtrader's picture

Only to BOTS...

Sun, 03/06/2011 - 23:14 | 1025109 Flakmeister
Flakmeister's picture

Since you seem to be fascinated by cunts, you don't you get somebody to slip one over your head and fuck some sense into you....

Mon, 03/07/2011 - 00:35 | 1025275 jeff montanye
jeff montanye's picture

wait... does that mean he's a dickhead?

Mon, 03/07/2011 - 01:11 | 1025335 cunningtrader
cunningtrader's picture

Ha Ha oh dear, the BOT has gone and spat his dummy, what's the matter, did HQ belt you on the back of the head and mention food stamps for failing to do your job lol?   

Sun, 03/06/2011 - 14:12 | 1023750 gorillaonyourback
gorillaonyourback's picture

you need someone on the ground in saudi arabia to give you accurate info.  cuz i could see them forcing crude oil back down to 80/brl,  if the saudis can maintain order.  if they loose saudis and supply disruption the 150-200/brl

Sun, 03/06/2011 - 14:21 | 1023773 bool2
bool2's picture

With proper planning, perhaps that number of troops will be able to contain the spark?

Mon, 03/07/2011 - 00:37 | 1025280 jeff montanye
jeff montanye's picture

yes, as the bush administration demonstrated (and the obama administration demonstrates) it's the proper planning that's the bitch.

Sun, 03/06/2011 - 14:29 | 1023789 High Plains Drifter
High Plains Drifter's picture

The Arabian peninsula gave the world the Prophet and the Arab Revolt against the Ottomans and the Taliban and 9/11 and – let us speak the truth – al-Qa'ida. This week's protests in the kingdom will therefore affect us all – but none more so than the supposedly conservative and definitely hypocritical pseudo-state, run by a company without shareholders called the House of Saud.<<<

The Taliban had nothing to do with 911. Good grief....Nor did the Arabs have anything to do with Al Qaeda.

Why does he insist on parroting the same old tired stupid rubbish, served up to us by the MSM? He is well read, or so he says. Yet sometimes he makes the most remarkably ignorant statements.

Sun, 03/06/2011 - 15:31 | 1023925 Snidley Whipsnae
Snidley Whipsnae's picture

Osama Bin Laden is the son of one of the biggest and richest contractors in Saudi Arabia. Osama spent very large sums of money to build training facilities and recruitment of Muslims that would rid Saudi Arabia of infidels... meaning specifically US Military bases. Osama Bin Laden is credited with making the Al Qaeda bombing of Khobar Towers Military Barraks in SA possible.

"William Perry, who was the United States Secretary of Defense at the time that this bombing happened, said in an interview in June 2007 that "he now believes al-Qaida rather than Iran was behind a 1996 truck bombing at an American military base."[18]

In addition to Secretary Perry, Saudi Prince Nayef, head of the Ministry of Interior and the lead investigating agency, has absolved Iran of involvement in the attack.[19][20][21][22]

On June 25, 2009, Gareth Porter published an article on the website stating that blaming Iran for the Khobar Towers bombing was a false leak released by U.S. officials and Saudi diplomats as sourced by the Washington Post article on April 14, 1997. This gesture as reported by Mr. Porter was a face saving gesture to the Saudi Arabian government for their complicity in allowing Osama Bin Laden to target U.S. military targets by using charities based in Saudi Arabia for funding purposes as long as Bin Laden did not target the government of Saudi Arabia."

In addition...Most of the aircraft hijackers on 911 were Saudis... if we can believe any of the investigative reporting or official conclusions drawn by after the fact determination.

I cannot see that Jesse is making any 'ignorant statements' in his blog post. The Taliban were the brain child of the Pakistani ISI. Al Qaeda are/were recruited from the ranks of the Taliban among many other sources from many other countries. Osama Bin Laden used funds from Islamic Charities, some located in SA, to fund the recruitment and construction of Al Qaeda training camps all over the Middle East as well as in Northern Africa.

I see no contradiction in Jesse's Blog with this statement by you... "The Taliban had nothing to do with 911. Good grief....Nor did the Arabs have anything to do with Al Qaeda."... Perhaps you should re-read Jesse's Blog prior to calling him ignorant?


Sun, 03/06/2011 - 15:52 | 1023988 Yardfarmer
Yardfarmer's picture

I think he's talking about Robert Fisk.

Mon, 03/07/2011 - 00:48 | 1025301 jeff montanye
jeff montanye's picture

jesse quoted seemingly approvingly so is it a distinction without a difference?

Sun, 03/06/2011 - 15:42 | 1023955 Yardfarmer
Yardfarmer's picture

HPD, thanks for the ever welcome contrarian perspective. David Lee Griffin proved rather convincingly that Osama Bin Laden (alias Tim Osman) died shortly after the 911 false flag terror and the following BBC documentary goes to great lengths to dispel the myth of Al Qa'ida as well.

Sun, 03/06/2011 - 15:05 | 1023866 oklaboy
oklaboy's picture

mucho gracias, great link

Sun, 03/06/2011 - 14:18 | 1023762 props2009
Sun, 03/06/2011 - 15:21 | 1023898 gwar5
gwar5's picture

China buys Euro bonds to boost a customers prospects adn curry influence. Trichet also just hinted at a rate hike which boosts the Euro. Prospects for a USD QE 3 means lower outlook, and lack of flight to the USD as a safe haven from MENA oil patch trouble confirms negative USD sentiment, boosting Euro.

Eurozone still sucks and the Irish haven't even decided yet what they'll do with the ECB. Moreover, many vulnerable parts of Europe are dependent on Libyan oil.

The Euro vs USD game is a rivalry of two pigs and which one is less muddy at the moment.  (The other website is just starved for attention)




Sun, 03/06/2011 - 21:52 | 1024865 hangemhigh
hangemhigh's picture

TO:  gwar5
on Sun, 03/06/2011 - 14:21

"Eurozone still sucks and the Irish haven't even decided yet what they'll do with the ECB."

eurozone hard late summer 2011

Sun, 03/06/2011 - 15:37 | 1023931 snowball777
snowball777's picture

We say that we hope Trichet is paying you in Euro.

Sun, 03/06/2011 - 16:38 | 1024121 disabledvet
disabledvet's picture

unless you "hablas espanol."

Sun, 03/06/2011 - 14:19 | 1023767 10044
Sun, 03/06/2011 - 14:31 | 1023795 High Plains Drifter
High Plains Drifter's picture

Super unleaded is about $3.75 a gallon with regular at about $3.25 or so. It jumped up about 50 cents in less than a week. So it will be over 4 by the middle of this week I bet.

Sun, 03/06/2011 - 14:45 | 1023823 Ben Probanke
Ben Probanke's picture

regular on us average will be at 3.60 to 3.70 by end of the week

Sun, 03/06/2011 - 15:17 | 1023889 Sudden Debt
Sudden Debt's picture

come over to Europe,

and cry a little everytime you fill it up.


1,56 euro/liter. = 8,17$/gallon

Sun, 03/06/2011 - 15:38 | 1023936 snowball777
snowball777's picture

come over to America...and cry a little every time you try to find and ride public transportation

Sun, 03/06/2011 - 15:50 | 1023984 Sudden Debt
Sudden Debt's picture

why would I ride the public transportation?


Sun, 03/06/2011 - 19:04 | 1024441 snowball777
snowball777's picture

why do people watch jersey shore?

Sun, 03/06/2011 - 14:18 | 1023768 tom a taxpayer
tom a taxpayer's picture

King Abdullah of Saudi Arabia has Obama over a barrel.

Sun, 03/06/2011 - 14:30 | 1023790 Flakmeister
Flakmeister's picture

As King Theodan said in LOTR and brilliantly recreated in the movie

"How did it come to this?"

I like to believe that I am a very rational person and I am getting very very worried. It feels like it is Sarajevo on July 27th...

Sun, 03/06/2011 - 14:49 | 1023834 pauldia
pauldia's picture


Does this matter at all? If George W. Bush had doubled the national debt, which had taken more than two centuries to accumulate, in one year, would you have approved? 

If George W.. Bush had then proposed to double the debt again within 10 years, would you have approved? If George W. Bush had criticized a state law that he admitted he never even read, would you think that he is just an ignorant hot head?
If George W. Bush joined the country of Mexico and sued a state in the United States to force that state to continue to allow illegal immigration, would you question his patriotism and wonder who's side he was on?   If George W. Bush had put 87,000 workers out of work by arbitrarily placing a moratorium on offshore oil drilling on companies that have one of the best safety records of any industry because one company had an accident would you have agreed?
If George W Bush had used a forged document as the basis of the moratorium that would render 87000 American workers unemployed would you support him? If George W Bush had been the first President to need a TelePrompTer installed to be able to get through a press conference, would you have laughed and said this is more proof of how inept he is on his own and is really controlled by smarter men behind the scenes? 

If George W. Bush had spent hundreds of thousands of dollars to take Laura Bush to a play in NYC, would you have approved? 

If George W. Bush had reduced your retirement plan's holdings of GM stock by 90% and given the unions a majority stake in GM, would you have approved? 

If George W. Bush had made a joke at the expense of the Special Olympics, would you have approved? 

If George W. Bush had given Gordon Brown a set of inexpensive and incorrectly formatted DVDs, when Gordon Brown had given him a thoughtful and historically significant gift, would you have approved? 

If George W. Bush had given the Queen of England an iPod containing videos of his speeches, would you have thought this embarrassingly narcissistic and tacky? 

If George W. Bush had bowed to the King of Saudi Arabia, would you have approved? 

If George W. Bush had visited Austria and made reference to the nonexistent "Austrian language," would you have brushed it off as a minor slip? 

If George W. Bush had filled his cabinet and circle of advisers with people who cannot seem to keep current in their income taxes, would you have approved? 

If George W. Bush had stated that there were 57 states in the United States, would you have said that he is clueless.

If George W. Bush would have flown all the way to Denmark to make a five minute speech about how the Olympics would benefit him walking out his front door in Texas, would you have thought he was a self important, conceited, egotistical jerk. If George W. Bush had been so Spanish illiterate as to refer to "Cinco de Cuatro" in front of the Mexican ambassador when it was the 5th of May (Cinco de Mayo), and continued to flub it when he tried again, would you have winced in embarrassment? 

If George W. Bush had misspelled the word "advice" would you have hammered him for it for years like Dan Quayle and potatoes as proof of what a dunce he is? 

If George W. Bush had burned 9,000 gallons of jet fuel to go plant a single tree on Earth Day, would you have concluded he's a hypocrite? 

If George W. Bush's administration had okayed Air Force One flying low over millions of people followed by a jet fighter in downtown Manhattan causing widespread panic, would you have wondered whether they actually get what happened on 9-11? 

If George W.. Bush had failed to send relief aid to flood victims throughout the Midwest with more people killed or made homeless than in New Orleans, would you want it made into a major ongoing political issue with claims of racism and incompetence? 

If George W. Bush had created the position of 32 Czars who report directly to him, bypassing the House and Senate on much of what is happening in America, would you have approved. 

If George W. Bush had ordered the firing of the CEO of a major corporation, even though he had no constitutional authority to do so, would you have approved? If George Bush had pronounced the Marine Corps like Marine Corpse would you think him an idiot?

So, tell me again, what is it about Obama that makes him so brilliant and impressive? Can't think of anything? Don't worry. He's done all this in 24 months -- so you'll have one year and ten months to come up with an answer. Every statement in this is factual and directly attributable to Barrack Hussein Obama. Every bumble is a matter of record and completely verifiable.


Sun, 03/06/2011 - 15:16 | 1023870 Spalding_Smailes
Spalding_Smailes's picture


The shadow bank got rolling with Reagan. Every president since has worked within this construct. Obama is moving to the center just like Clinton and it will look like he saved the day. But its really because of Uncle Ben. The deflation from the implosion of said shadow bank needed every last bailout pushed by Ben. But the credit goes back 30 years.

Thats why you will not see hyperinflation • the deflating of credit in off balance sheet obligations is mind-bending.


Sun, 03/06/2011 - 18:12 | 1024345 UnBearorBull
UnBearorBull's picture

It seems every ZH reader understands that Obama is just a puppet like all Presidents. I have always assumed he was installed as a fall guy, like Jimmy Carter. Carter followed the Nixon debacle, made everyone forget how bad Nixon was, and the Republicans came back in for another 12 years - which would have lasted longer if Bush I hadn't tried to stand up to Israel a little bit.

Obama follows Bush... repeat the cycle. 

And I think all this started long before Reagan. Say 1913 for a convenient starting point.

Sun, 03/06/2011 - 18:31 | 1024387 Spalding_Smailes
Spalding_Smailes's picture

I was just speaking about the massive credit influx since the start of securitization .. 1 Quadrillion.



Sun, 03/06/2011 - 15:10 | 1023877 oklaboy
oklaboy's picture

nicely put, as for all the brain dead who "junked" it, illigitmae non corobundum

Sun, 03/06/2011 - 15:56 | 1024003 TeamAmerica
TeamAmerica's picture

It's "Illegitimi non carborundum".   Writing something that sounds smart and botching it like that is all too revealing.

And BTW, even when spelled properly it's not actual's a joke phrase.

Sun, 03/06/2011 - 15:27 | 1023910 TeamAmerica
TeamAmerica's picture

Your very first line, "If George W. Bush had doubled the national debt, which had taken more than two centuries to accumulate, in one year..."  You are saying that Obama doubled the national debt?   That's a ridiculous statement to start with, and makes the rest of your rant not worth the time to read.

Sun, 03/06/2011 - 15:40 | 1023948 snowball777
snowball777's picture

You clearly didn't take the time on the first pass.

Sun, 03/06/2011 - 15:50 | 1023985 TeamAmerica
TeamAmerica's picture

Sadly, I did.

If George W. Bush had failed to conclude a war he had effectively won in favor of starting a second war based on ludicrously false information...oh wait, he did do that. 

If George W. Bush had taken a surplus and turned it into massive deficits while declaring that paying down the national debt was immoral...dang it, he did that too.  

Trying hard to come up with a reason why Bush is a worthy comparison to Obama...and failing.

Sun, 03/06/2011 - 16:16 | 1024066 slow_roast
slow_roast's picture


Sun, 03/06/2011 - 16:40 | 1024130 disabledvet
disabledvet's picture

trying to find reason Obama is worthy of Bush:  priceless.  HAPPY TRADING!  "Ain't that America--YOU AND ME, little pink house'ies--for u and me!"

Sun, 03/06/2011 - 17:42 | 1024288 Long-John-Silver
Long-John-Silver's picture

The only difference between Bush and Obama is a permanent tan.

Sun, 03/06/2011 - 18:17 | 1024358 UnBearorBull
UnBearorBull's picture

Obama is a much smoother talker. He would be a far better used car salesman than Bush Jr.


Oh, almost forgot, Obama is a Nobel peace Prize winner, like Al Gore and Arafat.

Sun, 03/06/2011 - 20:11 | 1024605 Randall Cabot
Randall Cabot's picture

And the jew supremacist terrorist Begin.

Sun, 03/06/2011 - 19:12 | 1024460 snowball777
snowball777's picture

My point was that not everything in the rant was as specious as the things you pointed out (which, I agree, were red herrings that could solve the world's food issues).


Sun, 03/06/2011 - 15:52 | 1023990 RockyRacoon
RockyRacoon's picture

There's a lot wrong with the rant, but I got better things to do than reply to it.   Like watch my grass grow.   The Czars thing started long before the O Era.   Tax cuts for buddies and cronies even worse.   Never mind, I said I wouldn't do that.

Sun, 03/06/2011 - 16:18 | 1024071 pauldia
pauldia's picture

 sorry duplicate

Sun, 03/06/2011 - 15:39 | 1023938 IQ 145
IQ 145's picture

 Correct; He's a mental defective.

Sun, 03/06/2011 - 18:05 | 1024339 Backspin
Backspin's picture

Partisan politics is soooo 2008.  We're talking about the end of the freaking world here.  Left, Right, blah, blah, blah.  Show me a politician from either party and I'll show you someone who bears some blame for this mess.

Sun, 03/06/2011 - 20:15 | 1024624 samsara
samsara's picture


The Right / Left Democorp or Repubicorp false dichotomy to keep us fighting between ourselves is now embarrassingly obvious to all.

Those who are presented to us for us to excise our right to vote, were prescreened and decided on for us.  

If they didn't want Obama to win, he would be there.  Same as Bush, Clinton et al.

Also why Ron Paul was marginalized.

It's upper and lower always was.

Sun, 03/06/2011 - 19:15 | 1024470 snowball777
snowball777's picture

If a moron copied something from and pasted it instead of a link, would people be able to tell he had done so?


Sun, 03/06/2011 - 14:52 | 1023837 lizzy36
lizzy36's picture

You know what would probably cause crude to go limit down....announcement of QE2 ending tomorrow (alas one believes, one has a better chance with george clooney than that ever happening).

Instead, Obama&Co will give lip service to the cirsis and talk about releasing reserves from the SPR. Because the threat of a 10% stock market correction apparently qualifies as a National Emergency now.

Sun, 03/06/2011 - 16:51 | 1024162 Tyler Durden
Tyler Durden's picture

Don't forget that according to the West Wing Report "there have been 20 stock market corrections since 1928 (WWR uses S&P 500 data going back to Jan. 3, 1928)"

Sun, 03/06/2011 - 17:17 | 1024228 cosmictrainwreck
cosmictrainwreck's picture

can you ellucidate, Tyler (anyone)? Report sez that, OK, and by that they mean/imply/predict......? or plan against another "correction"...?

Sun, 03/06/2011 - 14:51 | 1023838 Guerette
Guerette's picture

I want to buy a few call options on Oil futures. Should I buy Brent, WTI? How many months out?

Sun, 03/06/2011 - 19:16 | 1024473 snowball777
snowball777's picture

Yes. 2.

Sun, 03/06/2011 - 14:53 | 1023844 RobotTrader
RobotTrader's picture

Wouldn't surprise me to see crude get sold down to the original breakout line at about $90 to flush out all those spec long positions.

Sun, 03/06/2011 - 15:02 | 1023856 tmosley
tmosley's picture

Good luck with that, considering the margin increases last week had approximately zero effect.

Sun, 03/06/2011 - 16:27 | 1024088 kaiserhoff
kaiserhoff's picture

I think RT has a point.  Running stops for fun and profit works even better with high margins, and no one ever gets prosecuted for that shit.  This is not a market for the faint of heart, but it will not be a boring summer.  Got booze and popcorn?;)

Sun, 03/06/2011 - 15:09 | 1023873 JonTurk
JonTurk's picture

sold down to the breakout line, huh? you really don't know shit about how markets work.

Sun, 03/06/2011 - 15:10 | 1023874 huggy_in_london
huggy_in_london's picture

Very possible, and it wouldn't take much (a rumour here or there) .... but i don't think (if it were merely a position washout) that it would stay down there very long.  

Sun, 03/06/2011 - 16:25 | 1023979 RoRoTrader
RoRoTrader's picture

Agree with your take for risk of a suprise selloff. Hope so because I also think it will offer another terrific long opportunity.

If no retrace and it runs higher with conviction then I think $125 may be possible by Friday.

Sun, 03/06/2011 - 18:12 | 1024347 JonTurk
JonTurk's picture

and the market is dying to give you retail sheeple this opportunity, right?

Sun, 03/06/2011 - 15:14 | 1023883 Sudden Debt
Sudden Debt's picture

are you going to use those to cover those silver short loses? :)

Could be painfull RT :)

Sun, 03/06/2011 - 15:26 | 1023909 ElixirMixer
ElixirMixer's picture

I agree. Oil is really starting to bubble again and triple-digit oil is going to attract too much negative attention.

Sun, 03/06/2011 - 16:40 | 1024129 reader2010
reader2010's picture

from the historical wti/gold ratio,  oil is still not overpriced.

Sun, 03/06/2011 - 16:43 | 1024140 disabledvet
disabledvet's picture

ahh, "oil speculators."  as if "there's any money to begin with" in that space.  i would be surprised and so would the market to see a sudden decline.  right now the market is saying "soar, soar, soar"--fly like the wind you evil goo!

Sun, 03/06/2011 - 19:54 | 1024557 Confuchius
Confuchius's picture

Just to encourage you to buy some putz:


We read a European blog which quoted a Euromarket option price of $350 for July 2011 Brent crude. In fact that might have been 350 Euros.

Sun, 03/06/2011 - 14:58 | 1023850 Milestones
Milestones's picture

How can anyone rationally comment when Bro Breanank has more balls in the air than the NY Jets have on their team.

High Plains I'm kinda in your corner@ your comments though.       Milestones

Sun, 03/06/2011 - 15:01 | 1023857 bob_dabolina
bob_dabolina's picture

This is all completely normal. The recovery is in full swing and we are all winning.

Sun, 03/06/2011 - 15:12 | 1023881 oklaboy
oklaboy's picture

roll me one bro, I need what you are smokin

Sun, 03/06/2011 - 15:22 | 1023891 bob_dabolina
bob_dabolina's picture

I'm on a drug, it's called "Charlie Sheen" and everyone in our government is on it.

Join the circus that has become our world.

Sun, 03/06/2011 - 16:34 | 1024105 kaiserhoff
kaiserhoff's picture

Hey, who junked Charlie (Bang Da Ho) Sheen?  Without sex, drugs, and rock and roll, who could stand to live in any of the 57 states?

Sun, 03/06/2011 - 17:51 | 1024311 Yen Cross
Yen Cross's picture

A services(plural) based economy. Like a glove!

Sun, 03/06/2011 - 20:59 | 1024740 StychoKiller
StychoKiller's picture

Guess we all better obtain some mad skillz, such as ice sculpting, gourmet cupcake-baking, pawn-brokering, king crab fishing, flamenco dancing, etc. :>D

Sun, 03/06/2011 - 15:02 | 1023860 Iconoclast
Iconoclast's picture

If US of A citizens were paying what us Brits pay at the pump I'd be very scared given you've got plenty of guns and ammo. Our price per gallon in the UK is closing in on ten dollars and we just shrug our shoulders, shake heads and plod on as is the way in our debt slave culture.

Question, what would prices have to be before the USA goes postal, 6 dollars a gallon?


Sun, 03/06/2011 - 15:08 | 1023872 cat2
cat2's picture

I think $10/gallon.  We've already been conditioned to $5-ish.  But honestly, Americans drive way too much and the current livestyle is just not maintainable, it's at an end IMO.

Sun, 03/06/2011 - 17:15 | 1024135 reader2010
reader2010's picture

the marginal demand comes from BRIC and OPEC themselves.

Sun, 03/06/2011 - 15:12 | 1023875 bob_dabolina
bob_dabolina's picture



Obama will issue gas vouchers. The money will get borrowed, debt will get monetized, gas prices will continue up. Nancy Pelosi admits this is the best way to stimulate the economy.

You think I'm insane? Just you watch.

Sun, 03/06/2011 - 15:56 | 1024007 RockyRacoon
RockyRacoon's picture

You mean do the Saudi Stimulus song and dance?   Let's see how that works for them in the long run.

Sun, 03/06/2011 - 16:47 | 1024153 disabledvet
disabledvet's picture

gas vouchers?  more like "you are now out."  that's what a simple "stock market correction" does.  shall we even begin a discussion on a "retest"?

Sun, 03/06/2011 - 15:21 | 1023895 DosZap
DosZap's picture

If Brits drove 1/100th of the miles Americans must per day, you would understand.

Average American drives 75-100 mpg.

We have a huge assed country.

We really do not need a reason to go postal, one fine more we will just wake up,and go POSTAL.

Sun, 03/06/2011 - 15:22 | 1023903 bob_dabolina
bob_dabolina's picture

We have a huge assed country.


No shit.

Sun, 03/06/2011 - 16:11 | 1024051 snowball777
snowball777's picture

No, J6P drives ~12k / year...1000 miles per month...30 miles per day (15 each way).

Or 2 gallons, if you're a dipshit in a 'huge assed' V8 truck, 1 gallon if you're in an efficient Honda or hybrid, 0.5 gallons if you ride a motorcycle, and 0 gallons if you telecommute (w00t!).

At about $7/gallon, minimum wage 24hr/week wage slaves will be spending 50% of their income....just to get to their cells.

If I were you, I'd be going 'POSTAL' on foot ( a mail carrier!).


Sun, 03/06/2011 - 15:30 | 1023924 Randall Cabot
Randall Cabot's picture

Gas prices won't trigger any mass postal eruptions (MPEs) but food prices and scarcity will, in my opinion, because any MPEs will occur in the cities where the people there are not as dependant on gas prices but they will react strongly to food scarcity. People away from the cities will just cut back on other stuff while riots break out in the cities-unless food becomes scarce for them too.

Sun, 03/06/2011 - 16:22 | 1024080 kaiserhoff
kaiserhoff's picture

Sounds about right.  The country is still pretty self-sufficient compared with the rest of the world.  It's easy to forget that the third world gets priced out fast, and plenty of fuel use is just plain stupid.  Can you say NASCAR?

Sun, 03/06/2011 - 15:44 | 1023950 CrashisOptimistic
CrashisOptimistic's picture

You guys have simply got to bring yourselves to accept the unacceptable.

There Isn't Enough.  6.8 billion people have outgrown any possible oil production rate, a nd it's due to decline.

There have to be wars and the population has to come sharply down.  Quickly.  The longer it takes, the deeper it has to go.  The war has to be nuclear.  Oil depletion forces it.  Conventional warfare is oil intensive so it has to go nuclear.

Sun, 03/06/2011 - 17:46 | 1024294 buzzsaw99
buzzsaw99's picture

do you have a blog i can read? i love that stuff!

Sun, 03/06/2011 - 16:03 | 1024023 NewThor
NewThor's picture

Two years ago, I said that the Dow Jones CANNOT break 12500 anytime soon, because 

if it does Gas will be back up to $3.75 a gallon which is the BREAKING POINT for our 

economy. 80% of Americans are broker than ever. They've slashed salaries, benefits and 

hours worked.

The Riots begin at $4.00 gallons of gasoline.

People's savings and 401k s have been depleted.

It is still my theory that the US GOV knows that dead star Planet Nibiru

is coming around the universal bend, and they're trying to keep the economy collapsing

before this happens. BUT, they have ZERO plans in 2013.

How else would you explain the Gov being $200 Trillion in the hole and not even discussing

a plan for what to do when/if the economy collapses?

Bush said the Economy could collapse. Geithner said it. Obama said it.

Yet, we don't have a plan for what happens when it does.

And it you mention it to people, they get all glassy eyed, like it's beyond the realm of physics. 

Like no other fiat currency in history had ever collapsed.


Sun, 03/06/2011 - 16:16 | 1024063 kaiserhoff
kaiserhoff's picture

$6.66 would get the attention of the Baptists.  It's amazing what you can do with a superstition based on fear and guilt.

Sun, 03/06/2011 - 17:47 | 1024298 Long-John-Silver
Long-John-Silver's picture

You have the option to use Public Transportation which your highly taxed gasoline pays for. Here in America except for a few very large cities there is no public transportation option at all. When $4 gasoline hits we shut down because no one can afford to drive the distances involved when the cost to drive to the job is more than the job pays. This happened in 2008. It will happen again.

Sun, 03/06/2011 - 15:08 | 1023869 ivars
ivars's picture

It looks like these February 6th forecasts will hold, also time wise, with all the consequences:

Continuing Oil supply disruptions means even with the USA entering recession in Q1 2012, Oil prices will not drop below 130USD ( Brent) and will by the end of 2012 reach 200 USD with relatively strong dollar, so Oil prices will be high for everyone on this planet.



Sun, 03/06/2011 - 15:19 | 1023882 Randall Cabot
Randall Cabot's picture

I can't see how the Shia protesters can hold their own against the Saudi forces being lined up against them-unless Iran gets involved.

You would have thought "bin Laden" would have released a statement by now since he's been calling for the overthrow of the Saudi royals since before 911.

Also, how do the Lindsey Williams believers reconcile the oil elites supposedly pushing the price of oil up to $200 while the banker elites are supposedly printing the way to a growing economy? 


Sun, 03/06/2011 - 15:23 | 1023902 DosZap
DosZap's picture

For one, IRAN  won't get involved, or their ass is grass.

Sun, 03/06/2011 - 16:05 | 1024033 DoChenRollingBearing
DoChenRollingBearing's picture


Sun, 03/06/2011 - 16:09 | 1024038 RockyRacoon
RockyRacoon's picture

You're assuming they have a rational government.   I wouldn't make any predictions nor assumptions regarding the Iranians.  They have proven themselves irrational.

Sun, 03/06/2011 - 23:05 | 1025081 Randall Cabot
Randall Cabot's picture

Crazy shit has already happened since these revolts started, for one Gadaffi thinks al Queda is behind the revolt in Libya and there are reports that israel is aiding the rebels there and Obama is definitely on the side of the rebels so we have israel and the US teaming up with al Queda against Gadaffi.

But there is also a revolt brewing in Saudi Arabia but Obama has asked Saudi Arabia to supply the rebels in Libya with weapons

but obviously not the rebels in Saudi Arabia who are Shias like Iran but not the Sunni bin Laden who has been calling for the overthrow of the Saudi royals for 20 years but hasn't uttered a word of encouragement now that things are heating up.

I think the fact that no "bin Ladens" have spoken up lately speaks volumes.


Sun, 03/06/2011 - 16:15 | 1024062 snowball777
snowball777's picture

Yeah, nuke the oil fields, that'll show 'em!


Sun, 03/06/2011 - 16:55 | 1024170 disabledvet
disabledvet's picture

actually just the act of building a nuke is insane.  the expense has bankrupted the Iranian state--for a weapon "of terror"?  They've only been used once--and that was to end a war.  Use one to begin one?  Or for "defense"?  crazy.  worse yet--"once populations start moving they become the property of the disposessed."  makes sense for the Russians and the Americans to have them--although i'm having doubts about that as well now.

Sun, 03/06/2011 - 17:30 | 1024258 cosmictrainwreck
cosmictrainwreck's picture

suitcase nukes, bitchez! brief-case nukes...."tactical" nukes. talk to the Joint Chiefs; they're chomping at the bit for a test-run

Sun, 03/06/2011 - 22:59 | 1025070 BloodPigOnFeces
BloodPigOnFeces's picture

Iran is not building a nuke. They are not using highly enriched uranium. They are trying to build a nuke power plant. They cannot enrich uranium without raising suspicions, not with the IAEA running around. India, Pakistan, South Africa, Russia, China, US, France, UK and Israel has had nukes and has not used them. Iranian leaders are misquoted and their "intentions" are manufactured by the western press.

Sun, 03/06/2011 - 17:53 | 1024316 Yen Cross
Yen Cross's picture

Twiddle de/twiddle dum.

Sun, 03/06/2011 - 15:17 | 1023888 prophet
prophet's picture

Previously ...

Sun, 03/06/2011 - 15:26 | 1023908 Armando Javier ...
Armando Javier Finkeltein of the Boise Finkelsteins's picture

When the non-commercial speculators are this bullish a change in direction is probably imminent

Sun, 03/06/2011 - 15:41 | 1023951 IQ 145
IQ 145's picture

 Agreed. Well stated. also surprised to see it here.

Sun, 03/06/2011 - 15:44 | 1023958 Jasper M
Jasper M's picture

Since when has large net-long specs been a bullish sign?

WhoEver ends up in/near power in the oil patch, they will still want $ (if only so they can buy armored cars to defend them from their own people). They will continue selling oil. They can't help themselves. 

Take an analogy from Africa: No matter what horrors go on, they kept mining diamonds and uranium. World had to agree to stop buying the former to make a Dent!

Sun, 03/06/2011 - 15:46 | 1023968 CrashisOptimistic
CrashisOptimistic's picture

The markets are not relevant.

The price is not informative.  The Chinese have long term supply contracts of non public pricing.  That trend is growing.  There probably won't be a public oil market in a few years.

None of it is going to matter.

Sun, 03/06/2011 - 19:00 | 1024435 franzpick
franzpick's picture

I've been thinking price-controls, but gas vouchers are perfect for Embama's socialist, never-ending re-election campaign: nationalize the cost of free gas for the poor, the rest pay the $5-6-7/gal. rate.

He could merge the new Supplemental Program Assisting Motorists (SPAM) with SNAP, SPAM-SNAP, but why do that when you can launch an entire new bureacracy with 20k job openings for qualified applicants from the community-organizing level ?

Sun, 03/06/2011 - 19:29 | 1024497 franzpick
franzpick's picture

Always look forward to the Sunday afternoon 6pmE open of the PMs and $index: these voices from Mr. Market tell me more than any print/broadcast media drivel, as well as being maybe a minute ahead of ZH, and when we start skidding off the world financial cliff, maybe this week if SA protests materialize, I expect 3 plus days of 2-4% moves in Au, Ag, WTI and down in the doomed $ index to be the lead indicators.

Small move just started: gold up 3, ag up 6, $ down .06.

Sun, 03/06/2011 - 20:26 | 1024665 Randall Cabot
Randall Cabot's picture

And WTI is up .86 to 105.28 @ 7:14pmest

Sun, 03/06/2011 - 21:08 | 1024755 FrankIvy
FrankIvy's picture

The ultimate consideration is Peak Oil.  Any discussion of oil price that does not factor in current and near term production restraints is . . . incomplete.

Sun, 03/06/2011 - 21:39 | 1024829 r101958
r101958's picture are absolutely correct. The oil issue is much more fundamental (read PO)than just spec oil bidding and MENA geopolitics. However, I would not exclude the possibility that these two factors are being used to cover the lack of planning on our gov't part with regard to finite resources.

Sun, 03/06/2011 - 23:24 | 1025093 steve from virginia
steve from virginia's picture


All the articles about inflation and fuel prices is timely and informative; the fact of the articles themselves rather than their content.

Indeed, prices are rising now but at what point do the rising prices ration demand? Arguably far lower than the current price; momentum in markets and the desire of businesses to keep themselves going 'until things improve' is keeping the machine running.

The world's economies cannot endure extremely high prices for more than a few months. Prices are set by the amount of available credit at any given time. Keep in mind that the period before the current spike had businesses constrained by tight credit: markets in general saturated with legacy debts and finance unwilling to lend for this reason. Businesses were unwilling to borrow more because of reasonable doubt about their own ability to carry more debt.

It is this perceived ability of debtors to service debts that restrains credit. Finance -- not the government or the Fed -- generates all the credit it likes and does so whenever it feels it is safe or necessary to do so.

Comes now a necessary input that has more than tripled in price in 18 months there is a mad scramble for more credit which in turn bids the price higher. Higher price, greater collateral value, more demand for credit which bids price higher requiring more credit in a vicious cycle.

This is added credit that cannot be serviced as output from $110 oil is the same or less than $60 oil.

It is the effect on the credit markets not the pump price where economic damage is done. At some point the demand for credit bids its cost beyond the level that business returns can support. There is a shortage of affordable credit -- particularly for agents that lend long and borrow short -- and a panic begins.

This is what took place beginning in 2007 and reached a maximum in summer of 2008 when hedge funds/shadow banking were liquidating while pouring credit into crude contracts to counteract losses in other markets.

Understand that all finance markets are to some degree credit/margin markets that what is bought and sold is margin. High oil prices compete directly with finance for margin.

Once credit becomes too expensive there is revulsion and credit vanishes along with the fuel bid.

At that point all the margin in all the markets becomes sans- collateral and the margin calls begin. In 2008 the Fed kept the margin markets from crashing by spewing $13 trillion into these markets. This effected a little more than 10% of the estimated total of credit 'in play'. It also was the 'Fed shooting its wad' so to speak.

The Fed reached the limits of credibility, it cannot rescue the markets again.

Credit = credible: what the Fed sells is confidence and sweet, soothing lies that everything is going to be fine, tomorrow. Looking @ WW III getting ready to start and Peak Oil coming out of the closet like the boogeyman, things are not going to be fine, tomorrow.

Meanwhile, the debt is real as a heart attack and the next deleveraging leg will not be soothed away. Once deleveraging starts there will be no end to it because there are insufficient real, productive assets anywhere to collateralize more than a lousy percenatage point or two of it. What our economy 'produces' is consumption ... waste. At the same time, America's debtors are on the hook for it.

Make no mistake about it our 'wealth' is a fraud dependent upon a shared suspension of disbelief. Our debts are actionable leading to the loss of liberty.

Waste/wishful thinking versus binding contracts/loss of liberty. OUCH!

This leads to a note on inflation. The binding contracts/loss of liberty does not suggest that creditors will sit quietly and allow what is due them to evaporate or be 'inflated away'. The $150 trillion in outstanding US public and private debt are rich persons' assets and these will not go silently into anyone's good night.

Mon, 03/07/2011 - 02:10 | 1025418 tom a taxpayer
tom a taxpayer's picture

Steve - Thanks. I always learn from your analyses, which are much deeper than most analyses.

Sun, 03/06/2011 - 23:09 | 1025099 steve from virginia
steve from virginia's picture


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