jstratt

Will Oil Break Out, Or Fail at Resistance?

Thank you for many outstanding insights!

Cap-and-Trade: The Only Alternative to EPA's Power Grab?

After looking at Cap and Trade I fail to see its advantages. It is a huge agressive taxation scheme that will only benefit traders like Goldman Sachs.

Unilaterally enacting such a scheme has no reasonable chance of making a difference.

We would do much better to enact a voluntary plan to reduce energy usage with incentives to become more energy efficient in every walk of life. Suggested reductions in Auto, Home and Business energy usage with investment incentives would move many or most down the path. The rest would have time to recognize that they will have to change as well.

Enacting a huge additional taxation on poor and middle class citizens and business would injure our economy and our citizens. How can we expect to make a difference by eliminating unilaterally a few coal burning utility plants when China is building and bringing on line several each week.

Stop trying to divert more US earnings to Goldman Sachs and other traders who expect their politcal contributions to be returned 1000 fold by taxpayers.

Our % of world energy usage is 15% and dropping like a rock. With what we are doing to business and jobs it will continue to drop.

I dont know if the $1600 additional cost per person figure is accurate but I do understand clearly that Cap and Trade will be a huge additional tax on taxpayers.

Coming Inflation Is Good for Commodities

What is the possibility that we will not see an inflationary spike?

I like to look at both sides of a position. As a monetarist I see the quantitative easing and stimulus packages being offset by the reduction in CDO's and structured loan products.

Who knows we may have a decreasing money supply? Anyway what we do not have at present is inflation due to our strapped financial system. When the financial world recovers we will then find out the true status of inflation.

I am not betting that we will or wont have significant inflation and I am holding some Oil and Gas assets.

It is also worth considering the prospect that the Federal Reserve is just fulfilling its mission of maintaining a stable supply of money for world commerce. They have largely been able to do that for over 50 years.

Crack Spread Calculations Demystified

I have been looking for a good explanation for a while. Thanks much!

The farmers near me should have learned this last year. The crash in prices last year must have been devastating.

The Good, The Bad, And the Inaccurate Oil Forecasts

Oil has long cycles and like most I have underestimated the length of the cycles. In 1981 I started working in the oil industry and we fell down with laughter when an Oil glut was first mentioned. It was ludicrous because everyone knew that we had a finite amount of oil and would always use more so the price could only rise. Only 6 months later the Oil industry was in shambles and would not begin to turn around for at least 15 years.

The same peak oil theory became popular in the last 2 years. It does take supply time to come onto the market. When demand drops off however watch out! The predictability of Oil prices is very hard and few make money on it.

Oil prices could easily hit $20 as the Middle East producers need to keep cash rolling in. Any target they set will be cheated on. In addition when the Oil tankers are all full and storage is all full prices will bottom. Oil will be offered at whatever price can be had.

The takeaway is that Oil is a boom and bust business that has a history of long cycles and punishes unmercilously with its rapid decline and its long tenured down cycles. Let it hit bottom and let the economy improve before investing. Then let the huge storage get drawn down before investing. You will be glad you did as it may take 3-12 years.

After all of that you may have a nice profitable decade of outstanding and spectacular returns that build strong and steady... It is sweet when you hit it right.