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I am an economist who created theorems being bantered about for the Austerity v. Coase oppression investing, and new nest egg investing lifestyle rules. The theorems are measuring affects on markets and human unit plights over these next decades. I have been an analyst for over 21 years.... More
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  • Final Questions Posed By Stephen Hawking: God Not Needed For Creation Is His View - Think Again

    Hawking s Challenge

    Michael Holden of Reuters wrote an article on September 2, 2010, "God did not create the universe, gravity God is Not Needed, says Stephen Hawking". The other co-contributor to Hawking's theory brought forward by Holden was, "U. S. physicist, Leonard Miodinow".

    Hawking and Miodinow have the ultimate answer through the ultimate of question. A Question beckoning for an answer to a theory of absolutes.

    This question has been a challenge for a world of all the faithful and non-believers. A challenge for me for months on how I wanted to respond once the news broke. It had me research every source and theory ever published. Finally, throwing around their math, logic, and ultimately then, their theory tested; gravity may be random by perfect design, but develop order does fit in the equation was discovered in this journey.

    Answers of absolutes by Hawking's and Miodinow are the questions raising the very conditions forming life.

    It sets in motion, understanding the pure form of life constituting:

    • Solid
    • Liquid
    • Gaseous

    Life forms brought front and center. In these forms of life, you have forms born from the death of other forms. Many worship the forms of money, certainly one of mans creation of solid forms or some would call it gaseous, as it seems to vaporize during severe market corrections.

    However, another form challenging all to question or call for, "Prove There Is A God" is driving Man and Woman to make decisions affecting many other life forms by nanosecond by minute by day.

    These decisions enjoin purposeful greed, purposeful self-serving pleasures, Purposeful over-consuming, purposeful devouring at any cost, victory over another or it may lead too their decisions becoming truly giving through sharing their good fortune of Time, Talent, or Treasures through the act of unconditional LOVE (the ultimate glue of PURPOSE) within the design of Creation.

    The base then, to this ultimate question, comes from searching the, "What was the start of it all?"

    As the picture reveals, it wasn't money. You've got to go to some other big bang theory or to the Creator Himself.

    Moreover, is there proof of God within the footprints left by an ultimate design of Random Gravity?

    All Physics Laws bring Gravity within the evolution of being the original origin of all matter.

    But, there are further question begging us to come and answer in this search for the ultimate truths, such as; "Economics of Life Maintenance, based on the laws of physics" or the lack of a law.

    Many more questions needing to be answered are raised from Hawking's then are met with a finite conclusion. Why then a continued arrogance; arrogance of minds like Hawking, Miodinow, and the countless other economists and scientists missing the whole meaning of life itself?

    If your thinking this writer left out the economic decay, you would be mistaken. I did not leave out the intellectual Yale, Harvard, MIT folks, just to mention a few notable institutional think tanks.

    My statement made above would be in keeping with thoughts presented in article responses by Edward Harrison. Edward sent a direct message reflecting an article by Jeff Neilson's dealing with defining intellectuals doing what they do best. The answer to these many smart folks are in the following paragraphs.

    My striking statement comes in Neilson's article with, "Quite the contrary was my answer". It's the plight of the ones holding the level of intellectual treasure is the questioned peeled away to absolutes covered for your further reading.

    It's by the very nature of Man and Woman, to make promises and push their expectations where He or She cannot keep. The bar they may be setting for perfect can relate an immoral society or they have set it through the perceived American Dream of having it all within this world and not the next, as to follow the perfection of a feel good faith absence of a true Creator of sustaining PURPOSE.

    The imprisonment of the self than into "Mans or Woman's World Eye of Vision Worn Glasses of "Perfect".

    Understanding how the wrong view of perfection can be one of the greatest "Deceits", or learned to be one of the greatest of gifts when getting it RIGHT.

    Man and woman have had perfection tagged wrong from the very start. Call it the fall of man at the beginning of Creation, when they came into existence.

    You can say--man has Never Balanced his or her own budgets in matters of their human tissue of co-existence and their understanding of their deeper existence of the Eternal Soul of Random Gravity.

    Their budgets of working toward an ultimate of perfections within their external co-existence, and their eternal bonds of random gravity demanding change on internal life matter given by the Creator of all things human and non-human in all of the universes.

    These are the budgets of life choices hitting constantly, ALL Human Tissue given Random Life, until each are faced with your individual choices to do "With-Out", or to be non-existent in the form of all life's matter through death of your living random gravity of human tissue of solid, liquid, and gaseous co-existence to go on to the next change raising the greater questions of PURPOSE WITHIN DESIGN leading possibly for all to learn the EASTER STORY.

    This is the best definition of "The Measurement of Austerity" you will find anywhere in all the universe. Austerity coming in at whichever level it must. Again, read and understand the word "Perfect" as perfection is at the center of answering Hawking's claims. The real word of perfect is actually given in the Greek form pronounced as "Teleios".

    In answering these questions of absolutes, they all seem to fail the grade of the math involved with the affects of " Demographic Economics" playing out in the world today.

    The study of Demographic Population Control shows critical shifts coming from countries of China, India, and other growing Emerging & Developing nations pointing to eventual market downturns.

    Downturns of mammoth proportion; on a time frame coming into effect in the 2030(s) - 2070(s). A downturn making the crash of the markets and the great depression, including our recent recessions, seem like nothing. These views are brought vividly forward by Harry Dent. Dent is able to define with his charting, the vibes of signals leading to alerts for Market Crashes.

    Problems abound with tight population control are caught in the figures of math unveiled by the Demographic Economic factors as seen in the Consumers Lifecycle.

    The markets and wealth factor are supporting the developed nations to what is becoming the modern day story as written "1986" by Orson Wells. The potential of fiction becoming reality seems more possible today than ever before.

    The minds of well known economist have sent the warning flags up; minds like Dr. Jacqueline Kasun, Professor Joseph Stiglitz, as well as a host of other notable Nobel Laureates.

    The thought of "Random Gravity" plays into us looking at what are controlled actions of "Purpose". Demographic Population Control has ushered the killing of "Random, But Co-created Tissue". The killing of this random tissue needs to be stopped with sweeping laws to protect this unborn human tissue. Tissue we know to be a human at its most simplest form as described as "Random Gravity of Purpose".

    Life's very tissue being ripped from the wombs of another Random Life Form being of Human, as the abortion takes the very gravity of random life from. A life formed from co-creation with the one Creator of all life giving a finite "Co-creation of Purpose".

    A decision to abort Random Life by another life form. A life form we call human within the womb of its dwelling place. The further involvement of other established forms of Purpose impose rights by their laws governed by the heads of state.

    The final choice lies with the mother and father. Them bringing their choice too terminate the Random, but gift of Co-creation of Life. A life taken then by the medical killing staff. Life of a living tissue with the substance of random gravity of creation of life itself--causing eventually the destruction of economic system failures for many nations as prescribed by Dent and many others.

    The other side of all these equations of "Random Gravity" running upon the economic back drop, comes to dealing with the "Moral Hazard". How can you expect the very same "Oligarchy" who runs the show of what the world has experienced. It seems to being played out to become a "One World Order'. An order designed in nature as the grand plan of an Oligarchies mission. It boils down to choice. What is Right or what is Wrong.

    The Oligarchic Devil is always in the fine writing, as He plays his role in making the pieces of Wealth and Prosperity look better on the Wrong side.

    Yes, the statement of, "Liberal gets what liberal asks for" is the paramount problem bring the brink of, "Coase Oppression Theorems" coming to life or "Austerity Theorem" as I have been ahead of my contemporaries on these subject matters.

    The bold statement from Reuters of Hawking and Miodinow have announced to the world, a disregard to God, and have cancelled the Creator's connection of bringing random gravity to the origins of all creation.

    The critical response to these claims as made comes from knowing first, what the Creator means broken down. A Creator To His purest form of random gravity, kept in "Perfect Order for Purposes".

    There is only one of each of us, as proven without any doubts to our DNA/RNA footprints. The absolute sciences of the discovery of "You". The DNA making You; the only one holding such form within all the universes, known and unknown.

    God as a pure origin of random gravity of perfect design in each form to have purpose.

    Purpose giving the foundations too forms that have released untold forms, as known and unknown, by man who seeks these ultimate answers.

    The messages sent for all who seek His presence during and within their faith journeys. Journeys that have a finite conclusion of "Death of the Physical Body", born from the origin of Random Gravity; hold eternal life answers as designed by the perfection of the gravity of the soul of "Created Purpose". A soul that dwells within the origins of life itself seemingly missed within all the calculations of Hawking's and Miodinow.

    For all that find this article may take up their strength in seeking His existence through your very own. You can continue on your faith journeys to what is called life. Only the human form of what held deep within the recesses of what we know to be the soul. A soul that has an incredible form of gravity innately designed from the origins of creation by direction of the Creator too have an eternity of existence.

    It is through the promises of this Creator; known as, "I am", or given other names by faith communities told by the Creator.

    Communities given by divine messages; the Vail Lifted for the contact to a Creator to be recorded by man and woman--words to live by.

    Words delivered of hope and structure to keep a social order while we live within this human form based upon random gravity with the Creator.

    He Is the "Light of the World" has been recorded. A physical form of Random Gravity, when He was made man and dwelt among us as human flesh.

    A man whom now is giving the final answers to all seeking the origins of life. Questions of Life and the creations of the universes by His rising from the dead with His human body form in-tact.

    Critically revealed; this risen human. A human we call the Son of God, to be believed by many Christians. The pure form of the living God. Our God come to the earth of his original design in a perfect control, that becomes the living Manna from Heaven seen throughout all the Tabernacles in this world. Manna that would be random by design with all the grand purposes unveiled for all called to his living body.

    These facts alone, have dispelled and disclaimed the theory of Hawking and Miodinow. Both Hawking's and Miodinow need to adapt to a "Social Order of Purpose". Purpose within their findings of connections throughout all creations being, "Random Gravity".

    All origins of creation holding a human form have come from the consciousness of a Creator. A Creator bringing spirit to what each form of life is to inherit by grand design. A design of all human life forms along with all of Creations having a purpose.

    A purpose of being living, as a human, and/or animal of lower purpose of living and other non-living forms. The human form as the Creators grandest design, giving human Man & Woman a "Soul". A soul with the form of a "Human Body". These humans that He gives them an ability to be a "Co-creator" with the origins of all creation.

    The message sent with the word "Teleios"-- was the given hint by the Creator. The Creator gave us the same form he started as in the origins of the original Creation.

    The physics of life comes broken down to understanding then "Perfect Gravity". Gravity of transformations bringing the control of this gravity to bring to perfection of the you that exists within it. The very nature of man and woman are of "Perfect Perfections of Purpose and Meaning", as He holds the same form.

    He Announced to all that his name to Know Him by is, "I am" as in your life of being part of all His creations. He has sent the message that you hold this equality too His perfection of the "I am" of you, or you're, "I am" as one with the Creator in the word of "Teleios".

    "Teleios" is universal in the "Equation of The Human Economics Factor of Life Maintenance.

    Teleios makes a clear definition of the true origins of life itself by accepting all the good with the bad; as too be considered perfect does apply to every physics law to date and yet unveiled to the human condition of the world, as we know it today still seems a mystery.

    You might be comfortably surprised, it might not change the Oppression you may be in or Austerity as now known by the whole modern world. Austerity adding to your possible conditions personally you are experiencing within this existence.

    If you can give Him all of your trust, thoughts and friendship (Love), it helps take away many of your despairs, anger and frustration. It will become a start of being at peace with the Creator of "God", or also known as "I am", becoming than worth you're life's journey.

    Since developing a passion for theorems introduced by economists, but more so I've certainly have been and remain a God fearing man, I will repeat often. You can survive many of these days coming ahead. Days of challenges placed upon you financially, with your health, the raw facts of what makes us a human also a Human with a soul.

    Answers to life through in trusting past just a "Gravity Theory", but to trust with all of your heart, mind, thought, and soul; you have just entered the ability to adapt to survive the passion of changes within the decay of Man moving away from God and the original origins of His creations.

    This God is who has invited you back to himself as you are perfect, "Teleios", at all times within his eyes.

    Put on the glasses of the Creator. Glasses that will become extremely blurred. Blurred vision from placing God's eye glasses, because man and woman do not understand what true perfect means. Perfect as to the origins of creation and it is too be blurred until you think as the Creator thinks.

    The "Wow Factor" is being presented you. Presented to get to know the Creator. A Creator who brings the human spirit to be forgiven from what binds one to imperfection and the failings that may keep our internal gravity of the soul from growing, Growing the ability to be able to eternally live on past our human body form, if only we accept the imperfection and move with them towards the Creator.

    We find stories of real human who have lived and become examples of Saints, and other recognized life forms. Forms giving way too the eternal motions of what makes the promises of eternal life even possible. When you place your trust in God within the simplicity of Teleios, you have the root origins of what God gives as His answer to all who seek to know His view of Creation.

    This is on the heels of the theory of the "Coase Oppression Theorem" also known as the "Austerity Theorem", as pushed by this writer for all to gain an understanding.

    I kept it simple, I hope. Simple in an attempt for common minds to accept and learn; instead of the formulaic math that the quant's and professors like to read and compare theories.

    The next steps are to learn and accept are now open to you, or the "I am" of you.

    The you that allows the facts of making the Creator as part of your life, and your family's lives.

    You can make the best without making life filled with it being just about consumption. A consumption of wanting it all, with a veracious nature to over-living and indulgences of living out of our means.

    However, the importance is sent from all the current "Austerity Environments" have led to teach all to live within ones means. To moderate consumption. To live within ones means. To share this consumption with all fellow human life forms that seeks the same resolve of consciousness.

    The greed and fear of Wall Street and Main Street have bubbled in many countries as a resounding point of news flashes daily.

    News Flashes as Bubbled Problems within achieving a true economic recovery. Recovery's that can be sustainable if not developed correctly. This is where one can mark always--the knowledge of knowing how to have the edge over those that still don't or do not want to get it.

    All those who continue to cause eroding and damaging effects to the worlds we live in. Those that would seek the ruin of souls with that as their unconsciously or conscious mission.

    A mission of an Oligarchic movement causing a severe decay in the Creators design. A design of a society of social order. A "Social Order" within this random gravity affecting each one of us. Affecting us with accepting or denying high morals, ethics, and Morale's. Its paramount to connect these also with the many virtues making a society survive. Surviving on the base that allow Gods creations to live within the harmony of what is or was to be perfect in his original design.

    This is all about moral, ethical, and morale's; with the loss of virtues that continue to erode our nation and many other nations around our world.

    The time has come to make a stand. You need to stand up and make a change individually first, then within your family. To invite back a calmness of knowing a Creator that can be part of your daily life, and bring yourself and the ones you love to live within their means.

    It is that simple, it starts first from there; and it goes forward. I call it as certainly a call too many to step up and start, "Paying it forward" mentality. A paying forward of helping your neighbor as this builds a village to a nation to a global world of sustainable growth as I think we all seek under the equation of incorporating the Creator of "God" back within or lives.

    As far-fetched as this thought may be, investing and winning in the stock market, just try to take risk and make it a smaller portion of what is considered a manageable risk. Know what risk means! What is risk to you personally or to a world in change?

    Risk defined for those who think they know the answer:

    It is when you feel scared and want insurance that you will not lose and you make an effort to account to put the odds in your favor. You are no longer afraid that anything can ever be taken away from you. I call it; "The House Always Wins" if you think of yourself as the house.

    It is the end of the greatest story ever told, "The Living Words" of a Creator, God through His Son, Jesus Christ and through all of the Prophets. The story in the Bible giving the best example of risk, if it is a book you have ever read or intend to read.

    The bet has already been placed by all brought to participate in life. Many who participate known as human forms and that of the fallen spiritual forms have set their options and hedges. Everybody has tried or going to place their bets of what insurance Puts or Calls as to going long or shorting your bets as they may feel of making wrong choices within their lives or they have exposed themselves in Moral and Ethical acts one does not want to see in print.

    The problem is. Those trying to set all these options and hedges, the Living Story of the Creators Words ends with the house of God wins in the end--as he promised through the book of "Revelations".

    The important message comes in heeding what makes one make greed and money more powerful than your Creator in God.

    Its when any one considers how to cheat and wrong the many. Wrong choices on purpose who may have been given trust to them by election or by appointment in the positions in life they may hold. Taking this trust as measures to scheme and take as seen through, PONZI schemes and taking away the Creator from all public ability to worship Him. All these movements away from a "Living Social Order", that have now occurred causing the "World of MA & PA" to become open to "Coase Human Oppression Economics".

    We know God in the equation will equal a social order that will consume with a sense of not wanting it all and living more within their means.

    The Risk for the market bets are taken care of through taking emotion out and entering the math of "no greed" and "no fear". Just what is needed to get what is too establish the life style within stable social order of a creator that would be within the equation.

    Risk ultimately should always be looked at by keeping a "Living Portfolio of your Life". The view point of ones portfolio of treasures. Not the treasures of what you consume or own as assets of net worth. No, treasures of the spirit of the soul who has a choice of how to use these gifts of "Teleios" (Treasures).

    Many Souls not knowing their possession of these many of these hidden treasures of their gifts from the Creator; as to be hidden from them; to never just view risk too the dollars or items that can be worn or consumed.

    We already know the side to place most of your "Living Portfolio of Your Life". What are the treasures of the Soul of "You" that lives to read this article, and then ask. Where do I have most of my portfolio of my true treasures placed?

    Best way I know of explaining of being on the side of risk when it comes to the ultimate side of risk. Eternal Risks against your earthly investments…

    The message sent by the writings and given the headlines sent by Hawking and Miodinow actually brings the EASTER - STORY that connects the Love of the Creator for all Random Gravity making the source of purpose of the human unit of you that reads this reflection.

    Prove there is a God no longer needs to be answered. The knowledge of knowing who you are as a form of life with the soul of the origin given by the Creator says it all.

    May you keep yourself or your families calm, in what seems a sea of storms of so many wanting to take away and not add to being part of the co-creation, as all have been invited by the Creator to enter.

    May the peace of the coming days be with all reading this plea for sending a message straight to Washington and the World leaders...

    It can work...

    James Gornick

    Disclosure: Positions held within believing in the one Creator and of His Son, Our Lord Jesus Christ through the Holy Spirit who keeps all who have been given the gift of Random Gravity of life, PURPOSE in GETTING THINGS RIGHT.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Get to know Demographic Economics

    May 01 6:13 PM | Link | 1 Comment
  • An Oil Age Presenting Complicated Decisions

    The need to understand the complexity of the oil fields; develops the character of seeding your next investment picks through ETFs, CEFs, and individual select stock issues.

    With crude coming off of rough trading last week, but today on Wednesday April 11, 2012 the oil futures were popping up $1.56 on Light sweet Crude Oil contracts.

    One of the worst hit assets from last weeks slump was crude oil; a commodity that has been fairly active on the year. A number of analysts believe that high oil prices are partly due to speculators driving up the price due to fears in Iran and other parts of the Middle East. Oil saw its biggest jump as Iran threatened to close the Strait of Hormuz, a narrow body of water through which nearly 40% of the world's supply of crude must pass. This led to back and forth threats between the U.S. and Iran until there were finally sanctions placed on Iranian exports, driving up crude and gas prices alike.

    Now, it seems that Iran is willing to cooperate, as talks about nuclear policies (the stem of the issues) are slated to being mid-way through the month. A successful agreement could erase a fair amount of crude's value, which could be good for consumers at the pump, but bad for traders and investors of this commodity. The other day saw crude oil tank as a number of traders sold off for varying reasons, with one of the most significant being the possibility of a peaceful agreement between the U.S. and Iran. But does this control the futures price for oil contracts?

    Wednesday oil news showed shrinking supply and reserves. Click on source below to review Bloomberg video report.

    (click to enlarge)

    Source: Bloomberg (NYSE:XOM), (CVN)

    ETF's to watch will be seen in the United States Oil Fund (NYSEARCA:USO). This ETF fund tracks front-month crude oil futures. USO is one of the most popular commodity ETFs in the world, with over $1.6 billion in total assets as well as an average trading volume nearing 9 million. The fund is up by near 1% on the year, but stands to lose a fair amount of value if crude continues its slide from last weeks bearish trading tone. Look for USO to be extremely active as traders may try to buy in at a depressed price, or run for the hills and sell their positions before things get any worse.

    (click to enlarge)


    By reviewing the following chart, you find deep drilling is the start of the end of the oil peak production capacity coming out of ground wells.

    (click to enlarge)

    Source: Special thanks to: Global Public Media

    We prepare, perceptibly. Or we think we ensure. But oil makes the world go around. It heats our homes, runs our cars, powers our societies, finances economic development -- and triggers international hostilities. But the world's oil supplies are running out -- fast. Some think the global supply of oil has already "peaked"; we are already using up the second half of the planet's supply. With a fast-growing global populace, how much time do we have before the demand for oil vastly outstrips supply? Some analysts think we will face resource conflicts in our own lifetime, and a global economic depression provoked by our dependence on oil while trying to push for alternative energy solutions.

    Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. The concept is based on the observed production rates of individual oil wells, and the combined production rate of a field of related oil wells. The aggregate production rate from an oil field over time appears to grow exponentially until the rate peaks and then declines, sometimes rapidly, until the field is depleted. It has been shown to be applicable to the sum of a national domestic production rate, and is similarly applied to the global rate of petroleum production. It is important to note that peak oil is not about running out of oil, but the peaking and subsequent decline of the production rate of oil.

    M. King Hubbert created and first used this theory in 1956 to accurately predict that United States oil production would peak between 1965 and 1970. Source: Google Image History File

    "Our ignorance is not as vast as our failure to use what we know." M. King Hubbert

    His logistic model, now called Hubbert peak theory, has since been used to predict with reasonable accuracy the peak and decline of petroleum production of many countries, and has also proved useful in other limited-resource production-domains.

    According to the Hubbert model, the production rate of a limited resource will follow a roughly symmetrical bell-shaped curve based on the limits of exploitable and market pressures. Various modified versions of his original logistic model are used, using more complex functions to allow for real world factors. While each version is applied to a specific domain, the central features of the Hubbert curve (that production stops rising, flattens and then declines) remain unchanged, albeit with different profiles.

    Some observers, such as petroleum industry experts Kenneth S. Deffeyes and Matthew Simmons, believe the high dependence of most modern industrial transport, agricultural and industrial systems on the relative low cost and high availability of oil will cause the post-peak production decline and possible severe increases in the price of oil to have negative implications for the global economy, although predictions as to what exactly these negative effects would be vary greatly.

    (click to enlarge)

    If political and economic changes only occur in reaction to high prices and shortages rather than in reaction to the threat of a peak, then the degree of economic damage to importing countries will largely depend on how rapidly oil imports decline post-peak or importing countries push exploration off their own shorelines using oil drilling rigs.

    Source: Libyan rebels defend an oil refinery at Ras Lanuf. Photograph: Goran Tomasevic/Reuters

    According to the Export Land Model, oil exports drop much more quickly than production drops due to domestic consumption increases in exporting countries.

    Supply shortfalls would cause extreme price inflation, unless demand is mitigated with planned conservation measures and use of alternatives.

    Optimistic estimations of peak production forecast the global decline will begin by 2020 or later, and assume major investments in alternatives will occur before a crisis, without requiring major changes in the lifestyle of heavily oil-consuming nations. These models show the price of oil at first escalating and then retreating as other types of fuel and energy sources are used.

    Pessimistic predictions of future oil production operate on the thesis that either the peak has already occurred, we are on the cusp of the peak, or that it will occur shortly and, as proactive mitigation may no longer be an option, predict a global depression, perhaps even initiating a chain reaction of the various feedback mechanisms in the global market which might stimulate a collapse of global industrial civilization, potentially leading to large population declines within a short period.

    Throughout the first two quarters of 2008 are still interesting, there were signs that a possible US recession was being made worse by a series of record oil prices. Are we now moving forward to create an even worse double-dip recession if true oil exploration in the oceans cannot support keeping prices at the pump controlled and keep hyper-inflation in check along with the ugly head of deflation that would signal depression?

    This signals the call to support the post peak oil exploration sector and alternative solution plays. We used this next chart as an eye opener for getting the proper vibes on the oil drillers, especially Seadrill LTD (NYSE:SDRL), that gave a view stretching out from 2011 - 2015+.

    (click to enlarge)

    Source: DnB Markets

    (click to enlarge)

    Source: DnB Markets

    The era of the rigs are here to stay for the near foreseeable future.

    An article was written that called for "Watching for a Pullback, Findings Signs of Hope". We still see markets wanting to move sideways and up near-term. The projection is based upon the earnings report out of Alcoa (NYSE:AA) Tuesday evening.


    We are making our recommendations for investors to expose a portion of their diversification in the oil patch and the closed end fund areas. CEFs are driving progressive dividend returns as again can be seen in issues like Alpine (NYSE:AOD) Point & Figure charting provided by Dorsey Wright & Associates.

    (click to enlarge)

    Source: Dorsey Wright & Associates

    (click to enlarge)


    You need to conclude one of the most important issues is the varying types of oil and the differing benchmarks for crude oil prices around the world.

    Many might not realize that oil that is pulled out of the ground in Texas isn't generally the same as the product that comes from the North Atlantic. Instead, there are varying degrees of oil based on a variety of metrics such as the oil's API gravity. This (American Petroleum Institute) gravity is a statistic that is used to compare petroleum liquid's density to water. This scale generally falls between 10 and 70, with 'light' crude oil generally having an API on the higher side of the scale while heavy oil has a reading that falls on the lower end of the range.

    Beyond API gravity, investors also need to take into consideration how sweet or sour petroleum is. This is generally based on the sulfur content of the underlying fuel with 0.5% being a key benchmark. When oil has a total sulfur level greater than half a percent, then it is considered sour while content less than 0.5% indicates that oil is 'sweet'. Sour oil is more prevalent than its sweet counterpart and it comes from oil sands in Canada, the Gulf of Mexico, some South American nations as well as most of the Middle East. Sweet crude, on the other hand, is generally produced in the central U.S., the North Sea region of Europe, as well as much of Africa and the Asia Pacific region. While both types are useful, end users generally prefer sweet crude as it requires less processing in order to remove impurities than its sour counterpart. So in summary, light and sweet forms of crude oil are heavily prized while heavy sour types of fuel often trade at a discount to their more in-demand cousins.

    With these two key factors, investors can then begin to price these different types of oil on the world market. Currently, there are two major benchmarks for world oil prices, West Texas Intermediate (WTI for short) crude oil and Brent crude oil. Both are light sweet crude oils although WTI is generally sweeter and lighter than its European counterpart. As a result of this, WTI often trades at a premium, usually by just a few dollars a barrel. However, thanks to a Libyan crisis which has decreased the supply of light sweet crude in the European region and a supply glut at the main storage facility for WTI in Oklahoma, the premium/discount situation has flipped and now Brent is more expensive than WTI.

    Price Differences

    Thanks to two ETFs on the market today, and (NYSEARCA:BNO), investors can easily see how the two forms of oil have changed in price over time.

    While the day that the last drip of crude is burned up is a long ways out, some parts of the world may be heading for a major pinch in production. As our world population continues to expand, with the total predicted to hit nine billion by 2050, our addiction to crude only increases, as we use oil for a wide number of things in our daily lives. Besides its most dominant use as a fuel for automobiles and the like, oil is also used in a number of other processes like the production of plastics and variety of other industrial outputs.

    Of course, as countries begin to eat through their proven reserves; alternative energy will get a closer look from a number of nations across the globe. For the time being, adopting mass use of clean energy would be a very costly process, as it is much cheaper to use fossil fuels as opposed to something like solar or wind energy. But as crude begins to dry up, some nations may be forced to incorporate some of these alternate fuel options in the near future, though many will likely turn to LNG and other fossil fuel derivatives first. Another important factor to note is that there may still be vast oil fields lying undiscovered. All it takes is one lucky strike to find a major reserve that can boost any number of countries for a significant period of time.

    Until a major discovery occurs, though, there are several big-name oil producing countries that are in jeopardy of using up their proven reserves. Below, we outline five countries running low on oil reserves, and five companies to watch as the oil drama plays out:


    China is the top dog when it comes to emerging markets. Holding the world's largest population, the country is the second highest oil consumer and the fifth largest producer. Currently, China is producing about 3.8 million barrels per day. Proven reserves tally at about 16 billion barrels; putting China at risk of running out of oil in 12 years. In order to combat shrinking reserves, a number of companies are expanding operations abroad, but that will come at higher costs and will have a major effect on the bustling Chinese economy.

    The largest Chinese oil company goes to Petro China (NYSE:PTR). PTR has a market cap of $234 billion, making it one of the largest firms not only in China, but also in the world. PTR pays out a healthy dividend of 4.1%, attracting a number of investors to its high payout. Yet those looking at this firm should also note that the company is state-owned and is one of the firms seeking to move operations abroad, so it may be able to avoid major losses if it can establish significant operations outside of China's dwindling oil fields.


    Brazil is a popular emerging market that ranks high among global oil players, as its average output comes in at about 2.4 million barrels per day. For the time being, Brazil's reserves add up to approximately 12.6 billion barrels, but that is subject to change. A recent discovery could boost reserves all the way up to 18 billion, though some of Brazil's more recent discoveries may be in oil fields that will be difficult to reach. Everything held constant, however, Brazil will run through their oil reserves in just 14 years' time.

    Petrolero Brasilerio (NYSE:PBR), often known as Petrobras, is one of the largest oil drilling/exploration companies in the world, with a market cap of about $187 billion. Because Petrobras is a drilling company, their profits will be directly linked to the amount of oil they can extract annually. As one of the largest companies in the Southern Hemisphere, Brazil's shaky oil outlook could be a major problem for the long-term sustainability of this company.


    The Norwegian are currently the sixth-largest oil producers in the world, with close to 2.5 million barrels output every day. Current reserves come in at about 6.7 billion barrels, and with current production, this will tap out in seven years. Unfortunately, with little space to work with, and the North Sea already being well-explored, the country is having trouble finding more reserves, meaning that this seven-year figure has a decent possibility of holding true.

    Norway's bellwether oil producer comes from Statoil (NYSE:STO). The company is not only a major player in Norway, but also across the world. STO has a market cap of $77 billion and pays out a nice dividend of 3.9%. Statoil is majority-owned by the government, and while its oil outlooks are grim, the company seems to be finding a number of natural gas deposits, which could be a big industry as crude continues to slide.


    Colombia is an emerging market that has recently gained a lot of investors' attention thanks to the expansion of the exchange-traded industry. The country is known for its high volatility and its geopolitical instability. Their current crude output isn't high by global standards, about 670,000 barrels per day, but it's their low reserves that are the issue. Colombia has just 1.4 billion in proven reserves, which could be tapped in as little as six years. One of the country's major problems is a number of foreign companies that have been allowed to extract in Colombian territory, forcing already short reserves to quickly diminish.

    As Colombian oil begins to run dry, Ecopetrol (NYSE:EC) will be the company to keep an eye on. The firm has a market cap of $87.9 billion and a substantial dividend yield of 5%. Investors should note that large portions of Colombia are unexplored, and contain geological structures mirroring Argentina, an extremely oil-rich nation (who incidentally will run through reserves in nine years). New discoveries could boost EC, but if foreign competitors get there first, Ecopetrol could be in trouble.

    United States

    The U.S. has long been the poster-child for crude oil. We consume, by far, the most oil on an annual basis, and we are also among the top three producers. Our current output totals up to about 8.5 million barrels per day; this coupled against reserves of 21.3 billion barrels puts us next to Norway with just seven years of reserves remaining. As the world's largest consumers, we may be forced to depend even more heavily on foreign oil, which has been something of an issue in the past. "For the near future, increasing imports are the only fix for a supply crisis" writes Business Insider. This alarming figure may also spark more use of alternative fuels for our economy.

    Exxon-Mobil (XOM) is not only the largest oil producer on the map, but is also the largest company in the world by market capitalization (though Apple is nipping at its heels) (NASDAQ:AAPL). With a dividend payout of 2.5% and an average daily volume of 24.4 million shares, this stock is clearly an investor favorite. Exxon is a multinational company that is also working to bring alternate fuels to market like hydrogen, but with just seven years of oil left, may take a bit of a blow once our reserves start to run out.

    Always remember to consult with your financial advisor or seek help to understand risks within investing.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Read my full disclaimer in my profile.

    Apr 23 12:57 PM | Link | Comment!
  • Oil Futures Disconnecting Bringing Austerity Plays In The Oil Patch

    Understanding inverse economic pressure bring opportunity. The important facts building and safe-guarding your portfolio performance during these next four (4) quarters comes out of the oil patch and semiconductors.

    We will try and reveal hidden gems that can disconnect or separate from oil futures price. The oil patch are signaling a new era of profits. We also take a peak for the coming summer swoon within the semiconductor sector.

    Getting your investments right presents an austerity environment in making decisions for your choices becoming paramount, as many get it wrong and can lose big. The world though is offering room for this market to run within Emerging Growth and U.S. Markets still showing signs of life, as seen within the charting provided below.

    Source: Dorsey Wright & Associates

    Source: Dorsey Wright & Associates

    Stocks surprisingly closed out the first quarter on a quiet note reported by CNBC. The Dow and S&P 500 modestly higher and the Nasdaq slightly lower on Friday. The term "quiet" as stated by weekend comments;

    "It was hardly what the bulls experienced this first quarter, though, and the term that more clearly describes this first quarter is something more like "barn-burner." For the quarter, the Dow rose 8%, the S&P 500 gained 12% and the Nasdaq lifted by nearly 19%! It was the biggest first-quarter gain in 14 years, and it was clearly not expected by the conventional wisdom we saw at the beginning of the year."

    "What I've learned, that is how it works on Wall Street, though, because the "conventional wisdom" of what most people expect rarely ever occurs. The stock market has a wicked way of proving the most people wrong precisely when that majority expects a certain outcome. The buzz heading into 2012 was that Europe would possibly melt down, the Mideast would flare up, and that oil prices would soar to $120 -$150 per barrel. Somehow none of this has occurred, and that might be why the stock market has rallied so strongly as stated by

    Another fear swirling the trading floors and many firms was that interest rates might spike and that inflation would rear its ugly head. Again, we have seen evidence of this occurring to a small degree, but these forces have not been able to gain a solid foothold enough to rattle the stock market one bit. That has the bullish camp singing and dancing this weekend as they revel in the impressive double-digit gains for the major indices in the first quarter. Some traders the street news agencies heard from said that the first quarter performance for the stock market was "a great year!"

    No bull would complain about a 12% yearly gain for the S&P 500, and as great as this quarter has felt, it seems like another three quarters of this is not likely. A 48% return for 2012 would be a welcomed performance, but given the fact that we have nearly doubled since March 2009, tacking on another 36% might be tough. It would certainly be tough, but it would definitely be a whole lot of fun if it did occur. Does this mean we are due for a flat market or a pullback? No, it does not, but if we are to see this bull flex more muscle, we are going to need some impressive earnings when earnings season kicks off next week. Bulls would agree that it has been as exciting as the stock market has been in the first quarter of this year, and they also hope the second quarter will see that same amount of upside momentum and excitement.

    One positive that the bulls saw on Friday was that better-than-expected University of Michigan Consumer Sentiment number. It came in at 76.2, which improved upon last month's 75.3, and also topped the 75.0 level that economists expected. It is an interesting indicator, however, because it makes us wonder what drives sentiment. We have soaring gasoline prices which should be skewering consumer sentiment, but at the same time we have a soaring stock market. It may cost a bundle at the pump, but it looks like stocks hold sway when it comes to consumer sentiment.

    All three of the Strength Indexes declined last week and are now in bearish territory. The DJIA (NYSEARCA:DIA) dropped to 33.3% from 43.3%. The S&P 100 (OEX) slipped to 41.0% from 48.0% while the NASDAQ 100 (NASDAQ:QQQ) fell to 49.5% from 60.6%. While readings below 50.0% indicate that the majority of the stocks in the index are under distribution, it is the trend that tends to forecast future price direction. These indexes have been in a slow but steady down trend since the week ending 02/10/12.

    Numbers to Watch: DJIA: 12929--50-day simple moving average DJIA: 12086--200-day simple moving average DJIA: 13780--Resistance - 12/07/11 high DJIA: 12734--Support - 03/06/12 low

    S&P 500: 1361--50-day simple moving average S&P 500: 1266--200-day simple moving average S&P 500: 1425--Resistance - 5/16/08 high S&P 500: 1340--Support - 03/06/12 low

    NASDAQ: 2949--50-day simple moving average NASDAQ: 2699--200-day simple moving average NASDAQ: 3535--Resistance - 10/20/00 high NASDAQ: 2900--Support - 03/06/12 low

    Source: Markets-Edge

    Unmasking the Risk Wall Street Doesn't Want Advisors to Understand

    Rigged Money author and investment advisor Lee Munson, a former trader, talks about how Wall Street does its best to turn advisors' and investors' attention away from the most important topic: risk.

    Click through the video link to gain this insight that we use to guide many to keep risk and reward properly understood.


    The professional hedging investor or firms generally make themselves to be within a select group of mammoth players, that few can pattern or shadow their plays. Folks like Paulson, and Soros are the notable, but many can use the depths of research to be successful like these mammoth players. You can follow Paulson, Soros, and others within their SEC filings and block trade profiling of market makers they are using.

    Hedgers know what is valued incorrectly. Warren Buffet is known for finding companies improperly valued. A quick example that surfaces is the housing crisis when Paulson made one of his most notable and profitable investments. The ones, who did well, held short positions and cashed in big. While the Paulson's were making their money, many nations slid into recessions and provide the backdrop for the nations having default radar placed with the downgrades given by both Moody's and Fitch.


    The wisdom of comments made recently by Paul McWilliams of gave insight to another sector many are watching. He thinks investors should differentiate between a "swoon," dip, correction and whatever we want to call an interruption of a trend and a change in a trend.

    Two things happen during market corrections as caught with signals from the Point & Figure charting systems used out of Dorsey Wright & Associates. One is the temporary drop in price that for the broad indexes and most stocks is recovered when the trend resumes. While this is an uncomfortable event for most investors, the dip and recovery really doesn't change anything for those with valid long-term strategies. Investors who are patiently building strategic positions using a multiple buy strategy can add shares during a "swoon" and, thereby, use it to their advantage.

    The second thing that often happens during a correction is a fresh appraisal of value. During rallies there are always stocks that simply go up too far - too fast and, as a result, over-shoot a realistic and sustainable valuation.

    McWilliams thoughts about a stock's value are based on the projected value of its discounted future earnings adjusted for risk. During rallies investors in companies with high growth potential have a tendency to project optimistic growth potential and lower risk discounts. As a result, investors who do this justify higher valuations. During corrections we tend to become more risk adverse and flip to less optimistic views of future earnings and focus more on risk. This is why these stocks tend to trade with high betas (more considerably more than the broad market).

    In some cases these stocks recover to trade again at high valuations once the correction is over and the positive trend resumes. However, there are plenty of other cases where the weight of reality is a factor (situations where the high valuations simply can't be justified), and in these cases the stocks don't recover along with the broader market. This is one of the reasons why I do my best to keep a critical eye on value and share the details of my valuation assessments.

    McWilliams then directly answers our question as posed above. McWilliams thinks there is a distinct risk of a summer swoon - maybe one starting in late spring. However, investors who are doing a good job of managing both aggregate and allocation risks have likely thinned some equity exposure given the strength of the market during the first quarter of 2012, and if the swoon materializes these investors will have cash available to pick up shares of stocks they want to own during the dip.

    Our interpretation from following Paul McWilliams, are while there will always be interruptions to the spread of affluence and, with that, the spread of information technology in the world to the billions of still disconnected people, I think the trend will continue.

    Last year we went through a period of low capital investment in the networks needed to deliver these services, but spending on data centers remained strong. Going forward, we think we'll see capital spending on networks rebuild traction with the first real signs of that materializing in the second quarter. we think spending on data centers and consumer spending on mobile computing and communications will also increase - there are certainly risks of these trends being interrupted, but we just don't see anything that will stop or reverse the trends as thoughts posed by McWilliams.

    With the above as a baseline view of the future, and our belief many tech stocks are still trading below full valuations, we think there is plenty of upside potential; but between now and then, there is and always will be risks of swoons and corrections, give the advice in reviewing other sectors creating dynamics to keep on your radars.


    The housing crisis may be one example, but the other is what this article is alerting readers for plays to protect their portfolio's moving forward.

    Allocation of investment choices need ability in achieving growth, even if markets and or sectors you would think not to invest in because oil is in a bearish correction or the general market is in correction.

    The gem going green on last weeks down oil futures was the power of Seadrill LTD (NYSE:SDRL) holding an explosive growth, making it a must have choice for one's portfolio that was also blinking green when oil was red.

    There is starting of a true disconnect of oil exploration and equipment servicer's from oil futures. Brent and other oil futures on the exchanges may disconnect from other earning potentials coming out of the oil patch. These sub-sector plays evolving with ETFs and individual companies are moving up out of sequence from usual market mechanics of either oil going down or up.

    The problem of hedging, though, comes in trusting the instruments of your investment. The investment should be providing the depth of conviction that a sector and or market are going to produce a certain calculative outcome.

    Using the drillers brings focus toward Seadrill LTD during the 6th Annual Invest in International Shipping. Seadrill during the conference shed valuable light to the upward market trend they are seeing within their niche sub-sector of the oil venue.

    The inverse plays can be run with using Call (Bull) Debt Spread Option Positions or Selling of Puts in select ETFs or Buying long positions in the oil exploration stock issues as pointed out by the Point & Figure charting of Dorsey Wright and Associates and Markets Edge.

    Buying long positions at current levels are becoming attractive. Going long within a sub-sector or finding the lead issues in making solutions to world problems are the main theme we are after. Review the link above and chart provided below.

    Source: Markets-Edge

    How does this concept work? Use the price of oil coming down from its near-term high. Most would think, well this signals the whole sector should be sold off as well. In these austerity times, that thought would lose you a great opportunity in sub-sectors within the oil patch of solution plays.

    The pressure comes from the oil flow being controlled and the nations that are no longer trust the headline. These nations who choose to not take advantage of the inverse opportunity to build further depth of increasing their oil reserves by drilling closer to home, such as the conditions facing the US and other G20 nations can cause their country to re-enter into another recession as feared by Fed Chairman Bernanke in his most recent comments.

    Following the Flow of Oil News

    The following news wire out of NEW YORK, NY -- (MARKETWIRE) -- 03/28/12 -- Capital Link's 6th Annual Invest in International Shipping Forum took place on Monday, March 19, 2012, in New York City with great success and with an attendance of 927, setting a new record.

    18 Shipping Companies, along with Investment Analysts, Financiers and Market Experts participated in various panels and presentations.

    The forum provided a comprehensive review and outlook on the various markets -- the container, dry bulk, and tanker sectors, in addition to offshore drilling -- made more relevant by the timely release of companies' annual performance results. The event also examined critical issues affecting the shipping industry, such as bank financing, access to the capital markets, alternative financing, restructuring, bankruptcy, ship recycling, and investment opportunities in shipping.


    Tradewinds TV interviewed several of the participating executives at the Capital Link Shipping Forum. In addition, Barry Parker also conducted several interviews for Capital Link Shipping.

    An archive of all these executive interviews can be found by clicking on the link above.

    Starting your investments are based on oil futures staying between $75 - $150 dollars a barrel moving forward. This sector is clearly within a bear correction. It allows for going long offering buy points primed during pullback entry on your choice of the issues presented below, you can also exercise again, Call (Bull) Debt Spread Option Positions or Selling of Puts in select ETFs or Buying long positions strategies throughout sector of ETFs iPath S&P GSCI Crude Oil Total Trade (NYSEARCA:OIL), (NYSEARCA:IEO), (NYSEARCA:XOP), (NYSEARCA:OIH), Goldman Sachs Natural Resources (NYSEARCA:IGE), Select Sector Spider Energy Fund (NYSEARCA:XLE), and/or look to separate companies like; Transoceanic Seadrill , up against oil futures going down from $104.45 a barrel last week during trading. Look also at other players in the oil patch with Atwood Oceanic (NYSE:ATW), Diamond Offshore (NYSE:DO), Ocean Rig UDW (NASDAQ:ORIG), Ensco PLC (NYSE:ESV), and Noble Corp (NE).

    Is it time to expose your portfolio to energy or immediate need solutions? The answer is yes, oil is giving signals that are sending a clear message of pullback entry on some of these issues. What other solutions are investors playing in this sector? One on the go to list can be seen with Halliburton (HAL).

    The main idea of this second article in a series of austerity investment plays, are to start the oil patch on your radar for the disconnecting of oil futures price wanting to move downwards. The potential of politics and nations through their leaders can bring solutions in wanting to secure and hold off another turn at hyper-inflation and subsequent return to a deeper recession environment. The conference link as provided above, along with the video link and article out of Bloomberg should be a starting point in getting your vibes correct. Bloomberg was commenting on why oil and markets are showing a bearish correction.

    The oil disconnect plays are signaling again, a bearish correction currently. A bearish correction caught within the Point & Figure charting provided courtesy of Dorsey Wright and Associates, but right now, the start of future market disconnect will have separate issues starting to rally within the sector markers highlighted below.

    Source: Dorsey Wright & Associates

    Pay attention to the pullback buying plays with these recent signals coming within the oil patch and semiconductor space, again, giving interesting invites to investors willing to start doing their due diligence in marking their future investment strategies.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Read my full disclaimer in my profile.

    Apr 20 8:19 AM | Link | 1 Comment
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