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mr freddo

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  • Crude Oil's Long Term Fundamentals [View article]
    Oil, over the long run, will be one of the best performing investments that you can make. The fundamentals, as reviewed in this well written article, point toward continued price increases on into the future. The law of supply and demand will prevail. Unless a massive find somewhere changes the supply demand equation, oil will continue to increase in value.

    In the US, we are paying $3 per gallon currently for gasoline. Europeans have been paying more than double that amount for many years. With the demand from Asia growing ever stronger and new supply hard to find, oil prices will be under strong demand pressure for years to come.
    Jun 16 12:21 PM | 3 Likes Like |Link to Comment
  • Stay Away from U.S. Treasuries - Invest in Energy Stocks [View article]
    It is a sad state of affairs when the most powerful country in world history has no strategic energy policy. It has been our weakness since the formation of OPEC and the 1974 embargo and yet, we have done nothing but get more addicted to oil.

    Cheney did have an energy strategy. Conquer, pillage, plunder. We can see that we didn't get far with that approach.

    As intelligent as Obama is, I don' t see how anyone can get excited about his goals for our nation's automobile fleet. We have 150 million passenger cars on the road. Obama's goal is to have 1 million hybrids on the road by 2015. One million out of 150 million? Less than trivial.

    With our growing budget deficits, congress should pass a nationwide gas tax now of 2 to 3 dollars per gallon. With prices of 5 to 6 dollars per gallon, the market will start to work toward solutions to gasoline consumption. The money raised on the great gas tax can go to reducing our dependence on foreign oil with subsidies for electric cars.

    We now own General Motors. Let's force them to start building cars that support our national strategic defense policies rather than weaken them.

    Our goal should be 50 million electric/hybrid/alternate fuel cars by 2015.
    Jun 15 12:02 PM | 5 Likes Like |Link to Comment
  • Banking Crisis Not Yet Over [View article]
    All banks will be under great stress for the next several years as their loans on alt-a, commercial real estate, credit cards, ARM and prime mortgages hit the fan.

    In addition, they continue to carry many toxic assets at full value thanks to new rules on mark to market which state that if an asset is being held to maturity, it's value can be carried at par.

    But the bankers know what it is really worth. Their weak capital structure will inhibit recovery for years to come.
    Jun 15 11:06 AM | 3 Likes Like |Link to Comment
  • Hyper-Inflation or Just Hype? [View article]
    Thank you for pointing out that inflation, although greatly feared, has not reared its ugly head. Not yet anyway.

    The Fed believes that inflation is a concern, but is a "down the road" problem that they can deal with. Their greatest concern is getting the economy moving again. To that end, they are handing out free money to help banks become more profitable and assist in the repair of bank balance sheets. Until banks have sufficient capital, they will be reluctant to take on new risk.

    My problem with Peter Schiff is his prediction of hyper inflation. We survived inflation rates of almost 20% in the late 70's, early 80's but that was not hyper inflation. The inflation rate is bound to go up but the Fed will step in and start raising rates at that point.

    My own guess is that serious inflation will occur in the 2010 -2012 timeframe. By serious, I mean in the 6 to 10% range. This will be good for the stock market as most assets except cash, will appreciate.

    I am looking for a good moment to get out of cash and get my money in the ground with oil, agriculture, and precious metal ETF's. I also believe that Big Tech is a decent place to hide as these companies can pass on price increases quickly, if necessary.
    Jun 15 10:55 AM | 6 Likes Like |Link to Comment
  • Using Energy ETFs to Trade Potential Rise in Oil Prices [View article]
    I am going to take a hard look at OIH which I have owned in the past. I think it is a 2 year hold.
    Jun 10 01:20 AM | 3 Likes Like |Link to Comment
  • Chart of the Day: Household Equity [View article]
    Using the house as a cash generator for vacations, car purchases, and remodels is over for a very long time. Many in the baby boom generation lived on this type of banking for years. The steady salary pays the bills and the house gets refinanced every two years to generate spending cash. As long as the monthly payments were the same (at least temporarily), families piled on the debt, never worrying about having to pay it back.

    Now these families are in serious trouble as their mortgages are resetting, their house mortgage exceeds the value of their home, and their is no hope of refinancing.

    The current bull market is an upturn in a long term bear trend. Without the effects of inflation, the earnings to drive the market higher will not materialize. Once inflation hits, the high tech companies will do well because they can increase their prices quickly.
    Jun 10 01:15 AM | 7 Likes Like |Link to Comment
  • Big banks are placing an increasing number of trades internally, using so-called "dark pools," luring the most active traders away from traditional exchanges. The trend will likely continue, absent any new legislation, a blow to price transparency and exchange profit margins.  [View news story]
    Dark Pools, the next big catastrophe coming to your local too big to fail bank.
    Jun 8 06:03 PM | 4 Likes Like |Link to Comment
  • Manipulation of the Gold Market [View article]
    For those that still have dry powder out there, it appears that now is a good time to switch out of short term treasuries and into CEF, GLD, GDX, or SLV. I understand the benefit of physical over paper but not all of us can set up a machine gun nest outside our bunker like Market Sniper.
    Jun 8 06:00 PM | 2 Likes Like |Link to Comment
  • Gold Is Moving, Treasury Bubble Bursting [View article]
    It looks like a good time to pick up CEF while it is under $12.
    Jun 8 05:44 PM | 3 Likes Like |Link to Comment
  • Gold, Silver During Deflation: Sell the Metals Short [View article]
    Gold and Silver have only just begun their bull run. While gold was vulnerable to a sell-off once the apocalypse was off the table, it held its price as inflation became a greater fear than deflation. I believe that gold will break out to new highs over the next several months. Silver will also move higher with a greater percentage move than gold.
    Jun 4 10:17 AM | 9 Likes Like |Link to Comment
  • We're Due for a Serious Pullback [View article]
    I became smug about my portfolio performance late last week and issued a red alert. For me, this feeling of smugness means only one thing, a huge correction is coming.
    Jun 4 10:13 AM | 4 Likes Like |Link to Comment
  • Brink Lindsey: Why Krugman Is Wrong About Everything [View article]
    My brother was laid off by Apple. After 18 years and several patents, his pointy haired boss was finally able to get rid of him. He received 2 months severance. This for someone who is the inventor of the mighty mouse and holds other patents.

    He had many chances to take better opportunities along the way but chose to follow the example of his father and remain loyal to his company. In the end, he got screwed for his loyalty.

    Organizational loyalty goes both ways Mr. Krugman. It wasn't the worker who changed, it was the corporation.
    Jun 4 10:10 AM | 6 Likes Like |Link to Comment
  • California: More than Just Economic Problems (Plus Some Potential Solutions) [View article]
    I think that the Republicans in the California State Legislature are missing an outstanding opportunity to resolve the budget crisis and give voters reason to vote Republican in the next election.

    Currently, California Republicans cling to the mantra of no new taxes, feeling that they are the guardians of spending. By fighting against new taxes, their plan is to reduce the capability of state government to spend.

    This approach has not worked. The Democratic majority has figured out ways to increase spending without new taxes. In a state that is required by constitution to have a balanced budget, they have learned to hide deficit spending by borrowing.

    Republicans should modify their position to making a stand against all new "ongoing" taxes. They should sponsor a bill immediately that puts a surtax of $1000 on each and every California resident and California worker.

    This simple approach would solve several problems and create new opportunities for Republicans. The current budget crisis would be solved as $30 to $40 billion flowed in to the state.

    Voters would be angry. But that would cause them to think twice about voting again for the party that was in power, the democrats.

    Republicans can explain that they are the party of fiscal responsibility. Debts must be paid up. Talk of insolvency is absolutely dangerous and silly. The state has the right to tax its citizens and should when debts must be paid. A one-time emergency surtax would solve the debt crisis, and inflict enough pain on the general population to get their attention in the next election.

    If the voter doesn't ever pay the price of state overspending, the voter is being deceived into believing that the spending levels are appropriate.

    Jun 3 04:47 PM | 2 Likes Like |Link to Comment
  • Obama (Should Say) to California: Drop Dead [View article]
    Yellowhoard and Market Sniper, thanks for nominating me for governor. What should we name our party?
    Jun 1 11:54 AM | 3 Likes Like |Link to Comment
  • Sell in May? Not This Time [View article]
    After Friday's close I started to feel very smug. My stocks are up, I am getting to feel comfortable, maybe even start bragging a bit to my son.


    My smugness can only mean one thing. A major market sell off.
    Jun 1 01:47 AM | 3 Likes Like |Link to Comment