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Forget Geopolitical De-Escalation - Here's The Real Reason Why Oil Is Tumbling

Tyler Durden's picture


As with  every other asset-class in the world now, fundamentals have taken a very distant back-seat to both liquidity (flow) and positioning (technicals) as traders are increasingly (in one way or another) on the same side of the same trade. Mainstream media will proclaim US energy "independence", US sanctions 'winning' over Putin, or US airstrikes 'calming' down Middle East uncertainty; but the real reason oil is plunging is... the biggest mass liquidation of speculative longs in recorded 30 year history over the last few weeks...



Obviously speculators remain massively - unprecedentedly long oil futures still...


Chart: Bloomberg

h/t Sean Corrigan


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Tue, 08/26/2014 - 21:36 | 5147450 himaroid
himaroid's picture

Dadgum inflation trades are going to kill folks. DEFLATION. Credit market trillions. QE billions.

Tue, 08/26/2014 - 21:58 | 5147530 linniepar
linniepar's picture

Petrodollaring out Putin. I dont know how this will end but 7t wont be well.

Tue, 08/26/2014 - 22:42 | 5147677 Gregor Samsa
Gregor Samsa's picture

"The US is certainly one of the world’s leaders. At some point it seemed that it was the only leader and a uni-polar system was in place. Today it appears that is not the case. Everything in the world is interdependent and once you try to punish someone, in the end you will cut off your nose to spite your face,” --Putin


Tue, 08/26/2014 - 22:53 | 5147720 Lets Buy The Dip
Lets Buy The Dip's picture

There's an expectation that times are good and are going to get better, and that this economy has legs, and oil will decide that.

 also on the market, there is a lot of caution there; we just broke a big barrier. We failed to break over 2,000 a couple of times. If we don't rise above it in a convincing way, that's the market telling us" that investors are wary,  see the chart HERE ==>

A few of the economic indicators have been pretty solid, which flows through to corporate profit. So the next few months will be interesting. 


Tue, 08/26/2014 - 23:11 | 5147783 CrazyCooter
CrazyCooter's picture

Maybe Putin has some calories stashed around Russia, decides to turn off the 10 million BBL/day spigot, and ride it out through winter. Russian winter much?

Won't happen, but all fucking bloody hell will come lose when the first major producer goes offline ... to the point that every major producer knows they have the world's balls in a vice.



Tue, 08/26/2014 - 23:40 | 5147873 philipat
philipat's picture

So, "Belgium" is now a big seller of crude?.....

Wed, 08/27/2014 - 00:12 | 5147930 strannick
strannick's picture

"There are no.more markets, only Government interventions".

-Chris Powell, GATA

What's more Fascist than that? It's worked for gold, why not oil? Though I expect oils too big a market for this wag the dog b.s. to last long.

That graph is a supremely important explanation of geopolitics, not a refutation of geopolitics.

Smack oil, destroy Ukraine. Stop Putin at all costs, because he opposes PetroDollar tyranny and  won't roll over.

God help us all

Wed, 08/27/2014 - 01:52 | 5148125 amusedobserver
amusedobserver's picture

That graph tells me that the specs were all following each other long until they realized the price wasn't following them too.  So with all the turmoil in the world getting worse, why wouldn't the price of oil go sky high?

Maybe it has something to do with Siluria Technologies.  Doesn't anyone surf the internet anymore?  There is a lot of the conventional idiocy posted in these comments further down so I'm putting this up here.

Siluria has working technology to convert natural gas to gasoline (and other fuels like diesel and jet fuel) at $1 per gallon.  This isn't just theoretical dreaming, they have built pilot plants, and now demo plants, and plan to build scaled-up commercialization plants in 2017.  They have investment backing from Saudi Aramco investment arm and Kleiner Perkins.

If oil is down maybe it is because we don't need expensive oil anymore.  Natgas is currently selling for about one-sixth the equivalent energy content of oil.  Either oil is going down, or natgas is going up.  Make your bets.

Wed, 08/27/2014 - 02:47 | 5148180 Manthong
Manthong's picture


Go back to sleep.

The fact that the NWO NWA CIC and State is trying an oily bear hug/squeeze should not be understood by the unwashed masses.

Enjoy.. fill up your tank.

Short today, long tomorrow.

Wed, 08/27/2014 - 05:21 | 5148256 zhandax
zhandax's picture

When 'everybody' crowds to one side of the boat....

Wed, 08/27/2014 - 09:13 | 5148660 Keyser
Keyser's picture

Supplies of crude are up, the Saudis have opened the spigot and have upped production and crude is being stockpied... This is all a ruse to drive down the price of crude to attack Russian exports... More of the same bullshit, different day... 

Wed, 08/27/2014 - 07:33 | 5148379 chistletoe
chistletoe's picture

Thank you for the information about Siluria ....


It is truly a pity, isn't it, that supposedly intelligent, educated individuals do not have any clue about chemistry?

Siluria has a process which can economically convert methane to ethylene in bulk.  This isvery  interesting news and it will have an impact on the plastics industry and all the other industrial uses for ethylene.  But ethylene is not gasoline any more that it is alcohol ....

Wed, 08/27/2014 - 13:35 | 5149915 amusedobserver
amusedobserver's picture

I am not a chemist, but as the article clearly states:

The OCM ethylene can be converted using a different catalyst into liquid hydrocarbon fuels or blend stocks, in a process referred to as Ethylene to Liquids. The composition of the liquids products can be tailored to a preferred composition and specification. Examples of ETL products include gasoline, condensates, aromatics, heavy oil diluents and distillates (diesel and jet fuel).

The fact that this information hasn't generated more interest (but it did generate 3 downticks!) may show that most supposedly intelligent, educated people are just clueless, period.  

Tue, 08/26/2014 - 21:58 | 5147533 Deathrips
Deathrips's picture

The FED subsidizes oil along with all the other commodities. They are selling futures betting on the acquisition of Syria, Libya, Iran and Russias reserves. The problem is they need your kids to go and get them....For FREEDUMB.

Why can they sell shit they dont own again....?


Fuck it Ill answer my own question.


Because they are using a subsidized fake market to enslave people. Its as simple as that. They are comfortable making digital blips and paper in exchange for labor/blood (etc) from the people.

For insight into how the story ends. See Venezuela toilet paper first. See Zimbabwe next. Now that youre warmed up. See "When Money Dies" Ferguson...after reading that, know in your heart that this will be at least 10x worse.


If you depend on these traitors to are fucked.







Tue, 08/26/2014 - 22:30 | 5147642 john39
john39's picture

hey, wait a minute...  you are supposed to be foaming at the mouth about that mannequin getting beheaded with a butter knife...

Wed, 08/27/2014 - 06:47 | 5148319 Ginsengbull
Ginsengbull's picture

"Why can they sell shit they dont own again....?"


Because someone is willing to buy it.

Tue, 08/26/2014 - 22:29 | 5147641 Honey Badger
Honey Badger's picture

+1 for dadgum. Should be pronounced day...gum!

Wed, 08/27/2014 - 08:01 | 5148415 Quinvarius
Quinvarius's picture

Dude.  That is why the inflation trade is going to happen.  You nutbag deflationists continue to insist deflation is possible no matter how many times you take a hammer to the head.  That credit market is why they are going to print 100's of trillions.  No matter what you think, hyperinflation is the only outcome.  They will print every dollar of that credit market, just like they have been doing the whole time.

Wed, 08/27/2014 - 09:43 | 5148794 himaroid
himaroid's picture

Your big surprise will be will you discover that your all powerful fed is not in control.

Wed, 08/27/2014 - 10:41 | 5149030 Dr Strangemember
Dr Strangemember's picture

How come nobody has brought up the pending rollout of the Elio Automobile?  CLEARLY it's already having an impact on prices given its 84 mpg.  Gas prices will fall another 85% in response.  

Tue, 08/26/2014 - 21:36 | 5147451 junction
junction's picture

I just paid $3.53 a gallon at Valero in Westbury, L.I., the lowest in a year.

Tue, 08/26/2014 - 21:40 | 5147466 Grande Tetons
Grande Tetons's picture

Prices at the pump are lower to help out regular folks.....after is payback time fuckers. 

Barry O

Tue, 08/26/2014 - 21:42 | 5147477 Dragon HAwk
Dragon HAwk's picture

Yup it's a historical trend, things always ( seem ) to get better right before an election.. good thing we haven't lived long enough to see thru all the  BS.. Oh Wait....

Wed, 08/27/2014 - 10:41 | 5149036 Dr Strangemember
Dr Strangemember's picture

Oh, so NOW I'm the fucker??????

Tue, 08/26/2014 - 21:52 | 5147516 Bossman1967
Bossman1967's picture

sad thing is you think that's good at 94 a barrel that's a rip off hello wake up everyone

Tue, 08/26/2014 - 23:39 | 5147869 Miffed Microbio...
Miffed Microbiologist's picture

WTF! I paid $3.85/gal today in San Diego! Oh yeah, I forgot I live in Cali and must have a special blend so to be environmentally friendly. Now I pray all of you from the polluting states have the decency to keep your foul air to yourselves. I'm sure Moonbeam will propose a gigantic fan to combat the grey cloud wafting over from China.


Wed, 08/27/2014 - 00:25 | 5147980 Boogity
Boogity's picture

I got scammed for $5.30/gallon in Big Sur this past weekend.  There ought be a law against price gouging by fuggin California treehugging hippeshits.  Take their fuggin 'medicinal' pot away, give 'em flat top haircuts, make 'em take daily showers, and make 'em listen 24/7 to Earnest Tubb and Johnny Paycheck at 100 db.   

Wed, 08/27/2014 - 00:57 | 5148037 strannick
strannick's picture

Straight up, Boogster.

Wed, 08/27/2014 - 10:45 | 5149050 marathonman
marathonman's picture

You can find it for $3.15/gallon in Houston area.

Tue, 08/26/2014 - 21:40 | 5147467 BiteMeBO
BiteMeBO's picture

Filled the home heating oil tank for $3.24 in NJ.  Just need to keep the zombies from siphoning it this winter.  

Wed, 08/27/2014 - 00:35 | 5147995 Midas
Midas's picture

Why do you use heating oil?  Is there not a more affordable solution?  This is an honest question.

Wed, 08/27/2014 - 06:45 | 5148315 Ginsengbull
Ginsengbull's picture

Natural gas is less safe.

Wed, 08/27/2014 - 07:10 | 5148341 BiteMeBO
BiteMeBO's picture

You selling solar?  no thanks. 

Wed, 08/27/2014 - 21:51 | 5152238 Midas
Midas's picture

I'm not selling anything.  Is heating oil more cost effective than natural gas or a heat pump?  And again, this is an honest question.  I don't live in the northeast and I have wondered why they are the only people left using heating oil.

Tue, 08/26/2014 - 21:40 | 5147470 Cognitive Dissonance
Cognitive Dissonance's picture

Wow. What a save.

Now there are only 995 on one side of the boat with 5 having shifted to the other side in the last few weeks.

Tue, 08/26/2014 - 22:49 | 5147708 disabledvet
disabledvet's picture

More like a thousand foot long supertanker. "If not an entire fleet."

The gamechanger are Tesla's in my view...not the Bakken or Permian. Sounds stupid to say "all we're lacking is a battery" but sometimes knowledge is that stupid.

Pittsburgh, PA could very well be the Doha of the 21st Century. "And that does include the natural gas too."

With the Dow at 20,000 I'll believe anything at this point...

Tooth fairy, Santa Claus, the Easter Bunny...everything is on the table now. Phuck "going long"...let's buy Kentucky!

Tue, 08/26/2014 - 21:41 | 5147471 FreeMktFisherMN
FreeMktFisherMN's picture

yawn. Oil is still in the mid 90s, and has tons of long term support lines between 92 and 87. Oil priced in gold will remain stable. 

Wed, 08/27/2014 - 07:33 | 5148380 lucyvp
lucyvp's picture

Im buying a long position if it hits 88, and for those with short memories 10 short years ago oil was $40.00 for wti.  I don't have a futures account.  Anyone have a better idea than DBO?

Tue, 08/26/2014 - 21:41 | 5147472 Toyota echo
Toyota echo's picture

323 in sebring fl

Tue, 08/26/2014 - 22:27 | 5147632 edotabin
edotabin's picture

Tue, 08/26/2014 - 22:58 | 5147730 OldPhart
OldPhart's picture

3.79 down the street...Apple Valley, CA.  Has come down from the earlier high of $4.30, but now we begin the forced shortage due to the switch back to the winter formula.


Tue, 08/26/2014 - 21:45 | 5147485 Hal n back
Hal n back's picture

Election coming. Time to push oil prices lower.

Or, push them lower to sanction Russia.

Wed, 08/27/2014 - 01:06 | 5148054 yogibear
yogibear's picture

Exactly. Barry's wants to win at all costs.

Tue, 08/26/2014 - 21:47 | 5147491 samsara
samsara's picture

"The Price Going Down...."

Like just before a Tsunami the tide goes way out... or Like a small child that just got hurt,  you hear that long draw in of a breath(which is equal to the coming scream),   then all hell breaks loose.

I say we are just a couple years out of the shale oil/gas etc bust, and depletion really starts kicking in.

Less energy at an affordable cost. EROEI.

Liquidation of the longs makes sense.

All hell breaks loose.

Tue, 08/26/2014 - 21:54 | 5147513 FreeMktFisherMN
FreeMktFisherMN's picture

The ND boom is a perfect display of malinvestment at work. They need high oil prices even more so because the QE bubble has blown in the usual regions which means capital is flowing to not a productive area like Williston, ND, but rather towards more absurd 'valuations' in CA and AZ, etc, and that means less supply in ND so housing prices  and rents and food there are sky high. So they need capital going towards them, but of course also no exporting gas so prices stay down due to that as well (less incentive to drill more, too). Supply/demand is always a two way street. Sure exporting gas means prices rise, but it induces more production, too, and also infusion of goods and services from abroad, too. That's how trade works.

The .govt with regs, too, of course, and QE and malinvestment thereof is causing all kinds of issues and untapped potential. I think the pessimism is unwarranted re: is there really a renaissance in shale that is going to last awhile, but it is warranted if it is predicated on .govt leading to misallocated resources and thus less good supply and instead bubbles in financial assets. 

Wed, 08/27/2014 - 09:13 | 5148662 LawsofPhysics
LawsofPhysics's picture

South America exports a tremendous amount of oil.  Far above what it consumes.  Imagine if the people of these countries actually started using those calories to improve their on standards of living instead of sending it to our refineries?


tick tock motherfuckers...

Wed, 08/27/2014 - 01:54 | 5148130 Rock On Roger
Rock On Roger's picture

EROEI indeed.


I doubt if anyone other than an organic farmer (or SRSrocco) has thought of that over the last few centuries?


What is going to happen when that underwater beach ball lets go?


The long breath before the wail...

Wed, 08/27/2014 - 09:10 | 5148652 LawsofPhysics
LawsofPhysics's picture

Correct, and confirmed by an executive I know at BP.  That which cannot be sustained, won't be, period.


Americans really don't understand what real poverty is, but they will soon enough.


Get those fusion reactors online motherfuckers!

Wed, 08/27/2014 - 10:48 | 5149066 marathonman
marathonman's picture

Molten Lithium floride Thorium fission reactors.

Tue, 08/26/2014 - 21:49 | 5147498 BeetleBailey
BeetleBailey's picture

Oil is manipulated more than a bra size on a Vegas showgirl application....

Tue, 08/26/2014 - 21:49 | 5147504 Grande Tetons
Grande Tetons's picture

I want to be the compliance officer on the latter. 

Wed, 08/27/2014 - 09:09 | 5147535 messymerry
messymerry's picture

@ Grand Tetons:  With a moniker like yours, I'd say you are qualified.  Lessee, this is a publik position, $108,000/yr. to start, a car, a phone, moving expenses to the 9th pit of hell (D.C.), and a phat bonus if we at ZH get to audit your assets. 

Wed, 08/27/2014 - 02:26 | 5148161 BeetleBailey
BeetleBailey's picture

Hired on the spot!

Tue, 08/26/2014 - 21:49 | 5147501 TulsaTime
TulsaTime's picture

I follow oil prices, and nothing pisses me off more than knowing prices down, supply up, and the QT just raised gas by a dime.  They are falling since the last dime jump, $3.11 coming to work today.


Tue, 08/26/2014 - 21:51 | 5147506 MollyHacker
MollyHacker's picture

paper trade winds, is this the calm before the storm, hope not.

Tue, 08/26/2014 - 21:50 | 5147507 Nadine of Tyrol
Nadine of Tyrol's picture

Wow!  I "saved" $2.85 when I filled up my car today!  Now I am going to rush over to the grocery store and use the money to buy some ....... oh wait.......

Tue, 08/26/2014 - 23:39 | 5147870 luckylogger
luckylogger's picture

Best comment in a long time....

2 thumbs up.................

Wed, 08/27/2014 - 01:04 | 5148050 torabora
torabora's picture

$2.85 gets him  a half gallon of milk and 11 cents change.

Tue, 08/26/2014 - 21:51 | 5147508 Al Huxley
Al Huxley's picture

Well, with the economy really kicking into high gear you see the resulting drop in oil demand, and so the price goes down.  As everybody returns to work and starts driving to and from their office or worksite on a daily basis, the demand for gasoline just plummets, and so that's why as a result of the booming economy, reflected in soaring stock prices, we see the price of oil cratering.  So the long-side speculators are just rationally capitulating in the face of the inevitable demand collapse that always happens when the economy starts to improve.

Tue, 08/26/2014 - 21:56 | 5147514 HUGE_Gamma
HUGE_Gamma's picture

so when PMs plunge its the FED prop desk, AMIRITE?!

funny how you would never post this same data for Gold and Silver Net Spec Longs

Tue, 08/26/2014 - 21:54 | 5147520 pachanguero
pachanguero's picture

Bullish..everything is bullish!  buy buy buy!

Tue, 08/26/2014 - 21:53 | 5147521 Ness.
Ness.'s picture

Is there anyone out there besides me thinking that demand might have something to do with this?  I know, fundamentals are so old school.

Tue, 08/26/2014 - 21:55 | 5147523 robertocarlos
robertocarlos's picture

Haha. Stupid speculators. They only made 100 qazillion dollars.

Tue, 08/26/2014 - 22:01 | 5147538 Lanka
Lanka's picture

The US$ strengthened over the last two months.

Wed, 08/27/2014 - 07:12 | 5148297 MATA HAIRY
MATA HAIRY's picture

yup, oil goes up and down inversely with the dollar. This drop in oil will cause GDP to go down because the fracking exploration will drop as oil drops. Less drilling means lower GDP.


And what effect will that have on equities????

Tue, 08/26/2014 - 22:01 | 5147540 Moe Howard
Moe Howard's picture

Don't need gas if you don't have a job to go to. Unemployment is done over the internet now, and fake job searches also.

A trip to Walmart when the EBT gets reloaded doesn't equal the daily trips to a job.

Wed, 08/27/2014 - 01:27 | 5148091 pakled
pakled's picture

Hey Moe! You're right.

Wed, 08/27/2014 - 03:22 | 5148198 EBT excepted
EBT excepted's picture

we be lookin' to get recharged not just on da 1st, but again on da 15th, PBO (pee-bo...President Barack Obama) gon' do dat fo' us...cuz we call him up on da bamaphone...den, we be a force to reckon...we be suckin' up some gas...and bama be suckin some @$$...

Tue, 08/26/2014 - 22:04 | 5147548 yrbmegr
yrbmegr's picture

Isn't it just seasonal?  We're in the shoulder season.  People shutting down refineries for maintenance, etc.  It will head up again when the weather cools off.

Tue, 08/26/2014 - 22:05 | 5147552 Salah
Salah's picture

Hey, the "petro-dollar imperium"; it all started here and on this day (Valentine's Day 1945)....a match made in cosmic eternity.   Do a natal chart on that one and you'll know how it turns out.

Wed, 08/27/2014 - 05:31 | 5148260 matrix2012
matrix2012's picture

Thanks Salah for the link

The embryonic day of petrodollar...


The Day FDR Met Saudi Arabia’s Ibn Saud

Everyone who watched was mesmerized by the spectacle, at once majestic and bizarre. Over the waters of Egypt's Great Bitter Lake, an American destroyer, the USS Murphy, steamed toward a rendezvous with history. On a deck covered with colorful carpets and shaded by an enormous tent of brown canvas, a large black-bearded man in Arab robes, his headdress bound with golden cords, was seated on a gilded throne. Around him stood an entourage of fierce-looking, dark-skinned barefoot men in similar attire, each with a sword or dagger bound to his waist by a gold-encrusted belt. On the Murphy's fantail, sheep grazed in a makeshift corral. It was, one American witness said, "a spectacle out of the ancient past on the deck of a modern man-of-war."

Awaiting the arrival of this exotic delegation aboard another American warship, the cruiser USS Quincy, were three admirals, several high-ranking U.S. diplomats and the president of the United States, Franklin D. Roosevelt. As they watched in fascination, the man in the throne was hoisted aloft in a bosun's chair and transferred from the Murphy to the Quincy, where he shuffled forward and grasped the president's hand in a firm grip. Thus began the improbable meeting between Roosevelt and the desert potentate with whom of all the world's leaders he had the least in common, King Abdul Aziz ibn Saud of Saudi Arabia. In five intense hours they would bind together the destinies of their two countries and shape the course of events in the Middle East for decades to come.

It was February 14, 1945. The end of World War II was finally in sight as Allied forces advanced on Berlin and fought their way toward the Japanese heartland. With victory assured, Roosevelt was looking toward the future and envisioning new security and economic arrangements for the nation he had led through twelve tumultuous years. He ventured to Yalta, in the Soviet Crimea, to negotiate the postwar world order and the creation of the United Nations with Prime Minister Winston Churchill of Britain and the Soviet leader Josef Stalin. Before leaving Washington, he arranged to stop in Egypt after the Yalta conference for brief meetings with three leaders whose role in the war was marginal but whose place in the future might be significant: King Farouk of Egypt, Emperor Haile Selassie of Ethiopia and King Abdul Aziz, then commonly known as Ibn Saud.

That Roosevelt included Abdul Aziz on his list was a dramatic demonstration of how far and how rapidly American strategic thinking about the Gulf region had evolved during the war. Before 1942, the U.S. government had no official interest in Saudi Arabia, even though an American oil company had struck oil there in 1938 and had created a small community of American geologists, drillers and engineers to deliver the oil to global markets. No American official of higher rank than minister in the diplomatic service had ever before encountered the bedouin monarch, and the king, in all his 64 years, had ventured no further out of the Arabian peninsula than Basra, in southern Iraq. His domain was impoverished, isolated and backward; its levels of education, public health and mechanization were among the lowest in the world.

In strategic terms, Saudi Arabia, though never colonized, was in the British sphere of influence; the British were entrenched in Iraq, Bahrain, Oman and the trucial states on the Arab side of the gulf, as well as in Egypt and Palestine. The U.S. official presence was minimal in the entire Arab world, and so was official U.S. interest. In 1941, Roosevelt rejected State Department advice to provide financial assistance to Saudi Arabia under the Lend-Lease program with the comment, "This is a little far afield for us!" The war changed all that almost overnight.

Roosevelt's military and economic advisers, alarmed by the rate at which the war was consuming U.S. domestic petroleum, began to see the potential long-term value of the Saudi fields, the only ones in the Middle East where an American company held exclusive production rights. At the same time the U.S. Armed Forces, fighting a global war, wanted an air base someplace in the Middle East that was not under British or French control. And Roosevelt, looking past the combat, nursed the hope that Abdul Aziz, who despite his lack of formal education and his country's backwardness was a hero in the Arab world, would somehow be helpful in solving a daunting problem that the president knew was coming: the future of Palestine and the resettlement of Europe's surviving Jews.

- AMEU - Americans for Middle East Understanding, Inc

Tue, 08/26/2014 - 22:04 | 5147553 himaroid
himaroid's picture

Next surprise lesson: The fed really is not in control. So long Wile E. 

Tue, 08/26/2014 - 22:05 | 5147558 db51
db51's picture

High School Dropout here (good hard working kid) just left for North Dakota..   $ 150.00K + benefits driving a tank truck.    I'm packing my fucking bags.

Tue, 08/26/2014 - 22:20 | 5147617 Tanz der Lemminge
Tanz der Lemminge's picture

But it takes $10K a month to rent a rat hole.

Tue, 08/26/2014 - 22:27 | 5147628 Bollixed
Bollixed's picture

Make your bed before you leave home. That way it will be ready for you next week when you get back home.

Tue, 08/26/2014 - 23:04 | 5147763 geekz_rule
geekz_rule's picture

be careful man.. lots of freaks out there.. as rape etc.. seriously..

Wed, 08/27/2014 - 01:36 | 5148103 Rock On Roger
Rock On Roger's picture



Keep the shiny side up this winter.

Wed, 08/27/2014 - 10:58 | 5149106 Laura S.
Laura S.'s picture

I'm just waiting for them realtors to move to North Dacota to give some spin to it. This is why I would definitely advice to buy property right now, before all the hawks come down there...

Wed, 08/27/2014 - 06:42 | 5148310 Ginsengbull
Ginsengbull's picture

Watch out fer them four wheelers.

Wed, 08/27/2014 - 22:23 | 5152348 potato
potato's picture

You got a time machine? Because if you're going back to 2008-2010 you would be right. Now, you should only go there if you're an engineer.

Tue, 08/26/2014 - 22:06 | 5147560 FieldingMellish
FieldingMellish's picture

Occasionally, speculators are on the correct side of the trade.

Tue, 08/26/2014 - 22:32 | 5147649 FreeMktFisherMN
FreeMktFisherMN's picture

I never understand completley this COT data because each trade has a buyer and seller. There are hedgers and speculators, sure, but I don't get how data can show a whole lot (I would never trade on it anyway; maybe secondary indicator at most). 

What moves prices is (aside from manipulation a la the COMEX getting momentum going via unloading millions of ounces of gold in the blink of an eye at odd hours) new buyers coming in and bidding higher like in an auction, and sellers move up prices knowing they can get more. 

Tue, 08/26/2014 - 22:51 | 5147718 FieldingMellish
FieldingMellish's picture

You don't actually believe the data do you? JPM was recently fined the princely sum of $600,000 for giving incorrect position data. At any rate, at least in most markets, the small spec position is usually wrong.

Tue, 08/26/2014 - 23:39 | 5147875 FreeMktFisherMN
FreeMktFisherMN's picture

The data is pointless anyway because the bigger issue is the complete lack of awareness of how inimical the current STATIST quo system is to the middle class. If enough people woke up to the con and the evils of inflation, the COMEX would be irrelevant as indeed paper/phyzz would diverge. So shenanigans yes go on in COMEX, but the solution is not moar CFTC/SEC, but rather people waking up and naturally making these riggers obsolete.

Tue, 08/26/2014 - 23:00 | 5147752 disabledvet
disabledvet's picture


Liquidity positions in the USA can be so large as to be market moving...just the sheer mass of paper. "It all sounds worthless until there's 10 billion on the other side of that trade too."

That's why I think there is NO WAY the Fed is moving to raise rates anytime soon. "Wall Street has excelled far beyond even their ability to comprehend the long end." The dollar surging higher should be VERY bearish...the USA price competitive with Zaire? I DONT THINK SO!

Then again...

Tue, 08/26/2014 - 23:27 | 5147835 FreeMktFisherMN
FreeMktFisherMN's picture

I'm talking about from a trading POV. Futures have buyers and sellers on each contract. Prices move as new people come in and push up or bring pressure downwards. 


Tue, 08/26/2014 - 23:51 | 5147896 cart00ner
cart00ner's picture

heh! Like my broken watch : )

Tue, 08/26/2014 - 22:27 | 5147635 A Cruel Accountant
A Cruel Accountant's picture

Less cars More bikes.

Number of miles traveled in automobiles in the us continues to drop every year.

Tue, 08/26/2014 - 23:02 | 5147756 disabledvet
disabledvet's picture

Well...okay. "Free fuel it is then."

Tue, 08/26/2014 - 22:34 | 5147655 himaroid
himaroid's picture

These french dudes never show their teeth when they smile (cock hairs). Anyhow, if Germany folds, there could be a spike in rates/commodities. Temporary.

Tue, 08/26/2014 - 22:59 | 5147746 q99x2
q99x2's picture

The sky is falling. The sky is falling.

Tue, 08/26/2014 - 23:13 | 5147796 bid the soldier...
bid the soldiers shoot's picture

the real reason oil is plunging is... the biggest mass liquidation of speculative longs in recorded 30 year history over the last few weeks...


And the real reason for the biggest mass liquidation of speculative longs in history is

that this make-believe recovery is about to give way to the worst recession since '29.  

And when it comes, either because the Fed stopped printing QE or because the Fed continued to print QE,  the DEMAND FOR OIL is going to dry up like most everybody's load here at ZH without their quotidian VIAGRA.


Tue, 08/26/2014 - 23:35 | 5147846 Downtoolong
Downtoolong's picture

Bubble markets can't go down until enough Muppets have bought into it, and then they definitely will.

That's right Muppets, the reason the markets move the way they do is because you're in it. Or, as Warren Tax-Me-More-Just Kidding Buffett once said, "Ninety percent of all investors in the markets shouldn't be there".


Tue, 08/26/2014 - 23:47 | 5147890 cart00ner
cart00ner's picture

Bring back steam power - then we can run our cars on all the speculated paper oil out there.

Tue, 08/26/2014 - 23:51 | 5147899 MalteseFalcon
MalteseFalcon's picture

Someone took away the speculators free $$.

Wed, 08/27/2014 - 00:00 | 5147933 limacon
limacon's picture

Energy breakthrough.
Cheap , reliable energy generation at hand.
Those in the know are dumping oil.

Fusion ?
90% photoelectric?

Interesting times at hand .
Massive tectonic shifts in geopolitics.

Wed, 08/27/2014 - 00:13 | 5147956 fibonacci's claus
fibonacci's claus's picture

So is oil in contango?  Where is the price/barrel going to land?  WTI @88?  Brent @93?  Then what?  Slingshot up?  Black swan flock overhead of oil

Wed, 08/27/2014 - 01:15 | 5148018 Grouchy Marx
Grouchy Marx's picture

the real reason oil is plunging is... 

the "One Weird Trick discovered by a Mom that cut her heating bill in half".

Wed, 08/27/2014 - 00:47 | 5148021 coast
coast's picture

a 1964 quarter will buy you a gallon of gas

Wed, 08/27/2014 - 01:57 | 5148131 pakled
pakled's picture

... allowing you to drive to the store and a buy a loaf of bread with a 1945 dime.

Wed, 08/27/2014 - 11:20 | 5149204 zuuma
zuuma's picture

"a 1964 quarter will buy you a gallon of gas"

That has been remarkably consistent over the last 50 years.

I frequently bring that up when nostalgic doofuses start saying: "in my day, we only paid xx cents a gallon for gas"

That same '64 quarter also bought a box of .22LR in the hardware store.

Or 5 snickers bars (the bars were larger & had suger vs. corn syrup, too)

Wed, 08/27/2014 - 00:48 | 5148022 coast
coast's picture

Also..I am a Jim Willie is his latest:

Wed, 08/27/2014 - 01:09 | 5148062 CHX
CHX's picture

Did "some short" (read PPT et al.) squeeze some weak longs, to support the US economy and at the same time tickle a (russian) bear ? 

Wed, 08/27/2014 - 01:10 | 5148063 Soul Glow
Soul Glow's picture

Here's the reason....

France's government dissolves, US will strike Syria, Europe sanctions Russia, The Fed and all central banks buying shitty bonds like MBS - the same MBS that crashed the system 7 years ago.

And on and on.

Wed, 08/27/2014 - 06:26 | 5148298 falak pema
falak pema's picture

Bubbleonomics in the WS cauldron.

Wed, 08/27/2014 - 07:11 | 5148342 RadioactiveRant
RadioactiveRant's picture

Any sign of Ebola in Nigerias (5th largest oil producer) producing regions?

It might have made its way to Delhi (pop 22m) on a commercial flight: Flight from Ebola: Fingers are crossed

If India gets it, west London won't last long.

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