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Yucky Euro and the Oil Slick
Yucky Euro and the Oil Slick
Courtesy of Phil of Phil's Stock World
Good golly what a mess!
I hate to say I told you so but... Oh wait, no, I'm actually loving this... I TOLD YOU SO! Look at July 2008 and look at June 2011. Now, look at July 2008 and look at June 2011. Now, look at where oil USUALLY trades. Is it over $100 or under $80? You don't want to go back further because then the case could be made for under $60.
Wages have not gone up (adjusted for inflation, since 1973), home prices have not gone up (since 1985), stocks have not gone up (since 2006) - just oil and gold and silver and other stuff that people like to hoard in hopes of making themselves even richer - even though it comes at the expense of EVERYONE ELSE IN THE WORLD.
One of the protesters in Greece had a sign that said Prime Minister George Papandreou was "Goldman Sach's employee of the month" - now THAT's a good insult! At least it indicates that the Greek people UNDERSTAND how they are being screwed over while it's the Americans who are bending over and taking it from the Banksters without complaint.
I'm not going to get into it again but WHO pays that extra $30 a barrel for oil? The bottom 99.9%, that's who. Sure The Donald also pays $4 a gallon when he gasses up the limo and he also pays double to heat his gigantic homes but a full tank in the limo is $120 while the prix fixe at Masa is $450 per person for Donald's lunch so I doubt he's as worried as you are about a tank of gas. The American people are having $1.5Bn PER DAY extracted from their wallets at $4 per gallon, which is $547Bn a year and Globally that's $2Tn spent on gasoline alone. All that money is/was disposable income that is being directed AWAY from other parts of the economy.
Add in the heating oil, natural gas, oil products (rubber etc.) and all the pass-through energy costs from manufactures and we're up to about $5Tn, nearly 10% of the global economy going up in flames to enrich perhaps 1,000 oil men (and some of those men fund terrorism with their profits) and the speculators who shove the prices higher. THEY ARE DESTROYING THE WORLD! And it shouldn't be the people who rally against these bastards - it should be the other businesses, whose customers are being robbed of their disposable income before they can even drive to the store.
Sure Exxon, for example, spends $30M a year lobbying to make sure this game continues to be played their way and they should - because XOM sold $400Bn of that $5Tn last year, so what's $30M to make sure oil stays as high as possible for as long as possible? WMT took in $104Bn in revenues and it could have been $120Bn if their customers didn't leave it at the gas station on the way to the store - why don't they wake up, get together with other consumer companies and hire their own lobbyists to help end commodity speculation and put a stop to this National disgrace? Just a thought (and one I encourage you to pass along by sharing this article with others)...
Now, getting back to my own evil speculator mode - we hit oil futures for a nice $1 worth of gains in this morning's Member Chat and, at $10 per penny per contract - that's pays for our gas money AND lunch at Masa so we're all set for the day. As I have mentioned, I really hate going long on oil as we become part of the problem but at least we concentrated our firepower on breaking the backs of the speculators last week and, guess what - IT WORKED!
Just like any bully, it really just takes a few of the other kids to stand up to them and they run away crying. We began picking off oil at $103 on June 1st and on June 2nd I detailed our results and we kept at it since then, relentlessly calling the bluff of the speculators whenever they pretended they actually wanted to buy a barrel of oil for over $100.
Oil bottomed out at $94 yesterday but may go lower still if Europe keeps spiraling downward (back to $94.50 at 8:25 and we are no longer playing for the bounce other than some fun USO calls we took yesterday). That's a 900 penny drop at $10 per penny per contract and we started out with 376,000 contracts on the NYMEX when I called the short play so that's $3,384,000,000 made on the NYMEX by shorts in just 15 days - that's nice!
Do you want to know something funny about this? When a hedge fund manager makes $3.4Bn betting on the market or speculating on commodities - he becomes a national hero but when a humble blogger tells thousands of other people how to make $3.4Bn, it pretty much passes unnoticed. I'm not complaining (much) as I enjoy what I do and our Members are pretty happy with the results but it shows you how screwed up our values are when we reward the greedy behavior and ignore the altruistic tendencies.
8:30 Update: 414,000 Americans lost their jobs last week. That's "normal" these days and does not bode too well for the next Non-Farm Payroll Report but bad news is GOOD for the market as it keeps the Fed on the table so I popped into Member Chat just now and called for long futures plays on oil (yes, I am a shameful slut) at $94.50 and on the Russell at 775. I am also expecting a softening by the EU (mainly the Germans) on the Greek situation as threatening Greece is clearly not working so now it's time to be the good cop and JUST GIVE THEM THE FREAKIN' MONEY!
I know that's not "fiscally responsible" and I know they'll "never learn their lesson that way" and it may even encourage bad behavior from the other kids but, at this point - they are burning down the EU House so Germany has to decide if they are willing to let the whole thing burn to the ground in order to punish one bad kid or if they want to pull $100 (Billion, that is) out of their wallet and buy themselves a little peace - until the next time, of course.
We went more bullish yesterday - taking disaster hedges, of course, but we went back to the well on our 12 DIA short put ideas, which held up so well during the downturn yesterday that it improved my overall outlook. As I said yesterday, when I reposted them with adjusted prices near the close: "PLEASE compare these with our original entries. Virtually NO CHANGE despite the sell-off. This strengthens my belief that these are good picks and have gone down far enough. I think the most any of these lost was $150 (the VZ puts). That’s why this is a great way to pair a hedge!"
It's all going to be up to the EU today and tomorrow. Greek Prime Minister George Papandreou, in an attempt to "quell a growing revolt within his Socialist government, called on party lawmakers Thursday to support his unpopular austerity measures." He said, "Now is not the time to quit, now is the time for us to continue. Now is the time to say 'yes' to the big changes." Two Socialist party members withdrew their support for the government's austerity plan, bringing to four the number of Socialist party members who defected this week. Greece's Finance Minister, George Papaconstantinou, resigned last night and they are still looking for someone to take responsibility for the VERY UNPOPULAR austerity program in his place. "Papandreou's goal with this reshuffle is to defuse tensions within the party and the anger among the population," a senior party official said. "He is under a lot pressure to replace Papaconstantinou, but he also has problems finding a replacement. It's a job that few know how to do and even fewer want."
"Underscoring that difficulty, earlier Thursday Socialist party deputy George Floridis—a former public order minister and a mooted candidate for the job of finance minister—resigned his seat in parliament, citing objections to the reform program... As a precondition for receiving the next tranche of its existing loan—or any further aid package—Greece must pass a promised five-year, €28 billion austerity plan" by the end of this month. If it doesn't, Greece may run out of money by mid-July, which may possibly precipitate a new euro zone crisis.
In May last year, Greece narrowly avoided default with the help of a €110 billion bailout from its fellow euro-zone partners and the International Monetary Fund, and is now seeking at least another €60 billion in aid to cover its borrowing needs for the next two years." But it's not like this will all explode tomorrow - we still have 4 weeks! So, just maybe, the markets are overreacting a bit at the moment. (Greek PM Scrambles To Reshuffle Cabinet Amid Flagging Support)
Maybe..
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Errr..... we did do something about it....
Millions of Americans started protesting for fiscal sanity with the Tea Party protests on April 15, 2009, right after the $800 bank bailouts and $1T Stimulus. That was a year before Eurotopia ever woke up.
Americans are protesting for austerity before we go broke, while Europe is protesting to prevent cuts in the Socialism that made them broke.
We also had an historic election in 2010, changed course, split the government, and have Ron Paul as Chair of the House committee overseeing the Fed.
We're still doomed no matter what happens in 2012, but millions of productive people have already emerged and organized and to form the new core that will rebuild the economy after the trash is taken out.
Meanwhile - You have all the media, hollywood, TV all attacking sane Americans as Tea Baggers, racists, facists, etc etc.
The strongest indicator of how bad the Greek crisis really is, is that Greeks are forced to throw their own bricks and bombs at the police instead of paying immigrants to do it for them.
The lazy Greeks, the delusional politicians, the greedy, psychopathic banksters & the stupid Americans are all about to get what's coming to them.
The Greeks work more hours than the Germans.
This is about debt, it has fuck all to do with real stuff.
Do the Greeks make AMG Mercedes, SAP software or high value stuff that creates wealth? Oh yeah - the Greeks grow olives, are in shipping and work for the govt.
The Germans are generally very productive because of their manufacturing, engineering and machine tools expertise. They are world class. I have seen Germans engineers on mule test teams in the NW US testing 2013 models at the hotel I was staying at. They drove all day and went over the data at the hotel until 10 pm. The Germans can take 2 month vacations because when they work, they are productive.
Sorry, I don't see why the Greeks have any complaint. Most of us reading this forum have the policy of living within our means (and we also have a rainy day fund if we have a temporary income decline). If the Greeks followed this policy this would have no problem whatsoever with bankers.
You see a drug dealer will never put a gun to your head and force you to buy and take his drugs, however a government can and will do this, so I am for the legalization of drugs and illegalizaion of government, just think who is the bigger danger to your health
Just ask your self
- do I have the option of my children not taking vaccines ?
- do I have the option of home/private schooling my children and not pay the 'school tax'
- do I have the option to save for my retirement and not give 50% of my income for SS
- do I have the option of opting out of the government healcare system
- do I have the option of not wearing a seat belt or a helmet
- do I have the option of owning self defence weapons, is self defence a right or a privilage
- can I say in public anything I want as long as I am not forcing any1 to listen
- etc.
If your American some of those question will be 'yes' but if you are European all of them will be 'NO'
Europe is nothing more than a glorified GULAG, the sooner it burns down the better
I was 1once 'arrested' for not having a bus ticket(I was a little drunk and forgot to stamp), and I jokingly asked the cops,
'So I am under arrest, but you didn't read me my rights..'
and the cop answers
'You have the right to do anything we tell you to do. period' (I am not sure if he was joking as well, it didn't seem so)
"bending over and taking it from the Banksters without complaint."
oooo Ilene i like you talk'n dirty to me.
. Oups wrong place wrong time
Americans don't complain about Goldman Sachs but that is because they still think it is part of the free-market. Americans do understand more what's happening that the Greeks though.
Greeks complain about Goldman Sachs out of anti-capitalism. This country has no hope as it is actually protesting to maintain the welfare state, this to maintain the spending, and thus to maintain the burrowing and the debt. They are far from knowing what's happening to them, let alone what led them there.
Yes it's just a different delusion same results, the difference between Greeks and Americans is the difference between a crack and a heroin addict, different substance same long term effects
The way I see it, American politicians are drug addicts, while parts of the poeple are ready for a cure which will not come as long as the addicts are in control. Whereas in Greece, the addicts are the people themselves, and if they have it their way they will soon replace their pusher with a mexican drug lord.
American's love to take it...
As Annie Lennox once stated, some of them want to be abused
Hook Line and Sphincter
TV, newsmedia and hollywood - ALL of it. it is ALL sh*t. Brainwashing the sheep.
A lot of what you say is true, but Americans don't have a 'god given' right to pay less than 4$ a gallon nor does anybody else, added to that America pays for oil with freshly printed dollars so the net cost of a barrel of oil for Americans is the cost of paper/ or electrons to make that 100$ per barrel
It is the rest of the world who needs to pay for oil in real labour and pick up the tab for America, it's like everybody is going to the Pub for drinks and the fat American comes in and says I will drink 25% of everything you order and you have no choice but to pay for me
The problem is you have the Saudi financed left and enviro block domestic energy. We have the oil, shale oi/gas, hydrates, etc.
The Greeks also have loads of govt union workers like the USA who are largely parasites living off taxpayers. Greece makes olives and that is about all they make. The lying facist EU Parliment scum let all these third world countries join. they told them that they could live like Germans. Goldman showed the Greeks and others how to lie and hide their debt.
Bankers are sh*t but lazy welfare and govt union workers in Greece are comparable shit.
If you allocate the annual costs to the US to keep "order" in the middle east and southwest asia across the annual gallons of gas consumed by US consumers, you would find that they are already paying well north of $5 per gallon ... probably more like $7 per gallon.
Ok, let's say you are right, what is the SINGLE biggest source of instability in the ME ..... think ..... but let me help you (isssssraeeeel), so the premium on oil is actually the premium to keep israel safe, the 3B the US gives israel every year for defence is peanuts half the US army is necessary only for the purpose to keep the 'god's chosen people' safe
Isn't it ironic that the US spends more on defence than the rest of the world combined but still mexican a peasant can get in anytime he wants, so all that money does not go anywhere near the real problem, but is spread over 150+ countries that the Americans police, the US is no longer concerned with it's physical borders it's truly an Global Power, some might say a Global Tyrany is already here
And no country has a choice either('If you're not with us, you're against us' G.W.B), if you don't submit to the NWO you will be made to with economic sanctions, stealth takeover of the government or outright war