adamnb

The Market Bubble Is About to Pop

Compliments on an excellent and clear-headed analysis. Question:
Why not hedge the downside in commodities, i.e, examples like DUG.


On Aug 11 12:24 PM Suzanne H. wrote:

> Agreed, if the economy does badly, commodities are not going to be
> a place to hide. Commodities have barely retraced 38% of their move
> down, whereas the market has already and looks to be stalling there
> as did the Shanghai last week (can see charts legacyfunds.wordpress..../).
> I also believe we are in a deflationary environment not inflationary,
> and again the dollar may surprise everyone and move to the upside
> (although I agree some time from now, the $ is going to drop and
> commodities will rise). Commodities and emerging markets are going
> to decouple at some point, but it isn't now and much lower prices
> are far more probable vs. higher prices, so trade on technicals.
>
>
> My best guess and how my models are predicting this market to play
> out is a retracement to 950/920/870 (bear trap) area and then another
> rally to 1100 (equivalent to 50% retrace) to set up an even bigger
> bull trap before dropping to the march lows or lower. The more bearish
> option is we don't go higher than a 38% which is exactly where we
> closed friday so we are close to the start of the final leg of the
> bear market this month or next. Needless to say, this is not going
> to be an easy market to play any asset class, as I don't see the
> global markets decoupling -- some have definitely gone up more than
> others, but they all still rise and correct in tandem.

The Energy Markets According to Stupak

No comprende: Please explain following for the future's-market-challe...
"One such loophole provides a "bona fide hedge" exemption to over-the-counter energy swaps dealers who provide index fund and note managers potentially unlimited exposure to futures. In a swaps transaction, an index investor obtains a commodity return from an investment bank in exchange for a stream of interest payments, tied typically to the London InterBank Offered Rate (Libor). With a swap, the index trader doesn't go to the futures market itself, but the dealer selling the swap might, in order to hedge its resulting exposure. If a swap dealer can establish that a genuine risk is being hedged through futures, it's exempted from any speculative position limits imposed by the CFTC or the exchanges."

Obama Announces List of Grant Recipients, Recognizing Significance of Hybrid Markets

Dear John:

Don't you think it would be a good time to start and electric storage etf (they seem to have almost every other kind). I bet that there's plenty of funding out there for it.

Whither Iraqi Oil?

Good point. Somehow there is a widespread belief that oil producers are in a mad rush to produce more oil before the world runs out, as if they cared.


On Aug 03 09:14 AM Ferdinand E. Banks wrote:

> Unless I'm mistaken I think that I put on my 'leading academic energy
> economist in the world' hat one day, and explained to a couple of
> conferences that Iraq was NOT going to produce 6 mb/d of oil in the
> near or perhaps even the distant future. I think that some secondary
> school algebra was involved, which caused a problem, however it reduces
> to the following: IT WOULDN'T PAY THEM TO DO SO.
>
> It took the OPEC countries about 30 years to understand the underlying
> logic here, but now it seems to be clear. Of course, if all the oil
> in Iraw does not fall under the authority of the government of that
> country, the resulting output might be larger than in the OPEC scenario,
> but that cannot be determined now.
>
> About Canada. They have a nice reserve figure as a result of the
> oil sands, but according to estimates of future production, they
> are not going to be especially significant in driving the oil wolf
> away from our doors.

A123 Systems Moves Its Planned IPO to the Front Burner

Hi John:

Please don't take me head off, but I have to ask if you have any thoughts on the news floating around the internet of an imminent breakthru by EEstor.

7 Energy Companies That Can Benefit from Obama's Moscow Trip

Hi Kurt:

Lots of recent action around Novatek. Is it on your watch list?

7 Energy Companies That Can Benefit from Obama's Moscow Trip

I think you're right, particularly betting on warmer relations between US and Russ may also open doors to more jv's with oil majors, enabling Russ to benefit from tech transfer, which is crucial for development. One question: Usually USD and oil are in opposition; does your view on rising oil suggest a falling dollar?

China's Investing in a New Currency... And It Ain't the Dollar

I don't think it took any great strategy for the Chinese to buy natural resources. The Chinese strategy made great sense when commodity prices crashed, simply buying at fire sales. The real question is does it make sense now, with China being the main driver of commodity prices. With oil above 70 p/b, in the midst of recession, I can't figure out why China is not hitting on natural gas, where prices are still deeply depressed. One would expect that to be its next move, but it's no where apparent.

China's Investing in a New Currency... And It Ain't the Dollar

China has for some years now been the market maker in commodities. If so, what sense does it make for China to keep buying, when prices on commodities have risen more than 100 % from it low. It makes a lot more sense for China to ease off, let prices retreat, and resume purchases at far more attractive prices. I strongly suspect that is the phase we're now entering.


On Jun 16 11:37 AM Larry House wrote:

> Graham, your piece is well done, as always, but this is old stuff.
> We have seen this happening for months now. The question for commodities
> is how long will they continue to buy? When China stops/slows down
> purchases, commodities could correct in dramatic fashion.

Why Advanced Lead-Acid Batteries Will Dominate HEV Markets

By the way, John, since you are part of a growing constituency that believes diesel hybrids are the next advanced state, why hasn't it happened yet, since these are both proven technologies. It can't be any more difficult to put electric engines and brake regeneration in diesels than in gasoline vehicles. So what's holding it up?


On Jun 01 10:17 AM John Petersen wrote:

> tireman63, you know far more about automotive technology than I do,
> but until somebody figures a way to make really cheap batteries that
> can form the basis for a cost-effective EV fleet, I suspect there
> will be plenty of work for automotive service professionals.
>
> RoadRunner, you're expectations about the future of batteries are
> not reasonable and they won't be until battery prices collapse (which
> is no good for stockholders of battery companies) or gas prices are
> a good way north of $5 to $6 per gallon. It's also unreasonable to
> assume that an EV will ever mimic the performance of an ICE without
> technical advances that nobody has even dreamed of as of today. The
> really sad news is that we are going to have to lower our expectations,
> reduce our wasteful behavior and recognize that some pigs are not
> more equal than others.
>
> Don Harmon, why is it that you can call LiFePO4 immature when I'm
> skeptical about the potential for future economies of scale but it's
> offensive if Jack calls the technology immature?
>
> Speculawyer, I did put the lead-acid results in the table. In fact
> the table shows exactly how much weight and how much volume you can
> save by using li-ion batteries instead of lead-acid for each category
> of HEV. For anything less than a PHEV-10, the weight and volume savings
> are insignificant. Once you add a plug, the weight and volume savings
> are substantial.
>
> Advil, you'll really be singing my song when you start talking about
> a full-hybrid with a diesel engine.
>
> rbtbob, NiMH has done a fabulous job in the Toyota and Honda HEV's
> but the plants that make the batteries are already running at capacity.
> Moreover, Jack Lifton has written several articles on critical resource
> constraints (lanthanum) that limit the potential for expansion of
> NiMH production. Even if there were no resource constraints, the
> existing NiMH plants cannot make batteries for millions of cars per
> year and they can't build new plants by the EUs 2012 deadline. So
> the only technology that exists and has adequate manufacturing capacity
> wins! That technology is advanced lead acid.

Energy Secretary Steven Chu Should Be Fired for NatGas Views

P.S. Fuel Maker just sold major assets, including Phill, to Fuel Systems Solutions Inc. I suspect the FM is on the way to "el-foldo",

Energy Secretary Steven Chu Should Be Fired for NatGas Views

I think you spend too much time demeaning people like Chu, who knows much more about energy than anyone of us ever will, and too little time listening. If peak oil is the US worst problem, I don't think that substituting ng for gasoline buys you much. On this very blog, you have Banks, the world's leading energy economist (self proclaimed, of course) stating that US natural gas supply is, like oil, undergoing significant depletion, with near enough to take over transport. The fact is shale resources deplete much faster than traditional resources. Nor do you hear the enormous costs that it would take to build-out a nat gas infrastructure. I think it's time to take into consideration what critics are telling you: nat gas is no magic fix.

Energy Secretary Steven Chu Should Be Fired for NatGas Views

Where in the world are you getting 250 m/p/gal from diesel; semi's are lucky to get 6 m/p/gal, and almost all of them are diesel driven.


On Apr 12 01:09 PM nakedjaybird wrote:

> Fitz- simply, here are several good reasons (250 mpg on diesel which
> is an automatic 80% reduction in emissions, etc.) why we don't need
> to push natural gas transportation: try diesel nowl! (biodiesel next,
> and then biofuels! No nat gas req'd.)
>
> en.wikipedia.org/wiki/...
>
> PS: show me your evidence that Chu is being paid off (other than
> his salary).

Making Natural Gas Transportation a Reality

One question to ask: why have the oil companies, that own the natural gas in Alaska, dragged their feet for more than 25 years about building a gas line to Alberta. They obviously have the capacity to build it along the oil line they built from the North Slope to the Gulf of Alaska. My guess, they never wanted to build it. The reason: they would much rather sell to China, Japan, and S. Korea, where it would be cheap to transport via LNG and where it would fetch higher prices.


On May 12 10:00 AM pragmattist wrote:

> Prioritize the Construction of the Alaska Natural Gas Pipeline.
>
>
> As president, Obama will work with stakeholders to facilitate construction
> of the pipeline. Not only is this pipeline critical to our energy
> security, it will create thousands of new jobs.
> my.barackobama.com/pag...

Making Natural Gas Transportation a Reality

Question: What is the cost per unit of energy of nat gas versus gasoline?


On May 06 02:01 PM pragmattist wrote:

> Don't forget that… Fiat is the biggest player in the market for natural
> gas engines.
> wheels.blogs.nytimes.c...
>
>
> And that...Fiat initially would take a 20 per cent (now 35%) stake
> in the company in exchange for its small-car and engine technology.
> Initially Fiat would not invest any cash, but its technology is worth
> $8 billion to $10 billion, the person said.
>
> 209.85.129.132/search?...;cd=3&hl=en&am...
>
>
> Meanwhile...GSA will also target $15 million in an order to come
> by Sept. 30 for advanced technology vehicles -- compressed natural
> gas and hybrid buses, and all-electric vehicles.
> www.joc.com/node/410690
>
> And...Public transportation agencies across the country are joining
> in the celebration of Earth Day on April 22 with a variety of green
> initiatives and activities aimed at raising awareness and improving
> the environment.
> www.pottstownmercury.c...
>
>
> Along with many private fleets such as…AT&T converting to natural
> gas
> www.tgdaily.com/conten.../
>
> And…By converting only 10 percent of America’s fleets of trucks and
> buses to run on natural gas, we can reduce demand for foreign oil
> by $50 billion a year.
> newsok.com/legislation...
>
> Already…there are 1600 retail stations in the U.S. selling CNG.<br/>scitizen.com/screens/b...;idContribution=2636
>
>
> In Oklahoma…Boren, Sullivan and Benge have introduced federal and
> state legislation to provide responsible incentives for infrastructure
> and research that will result in the greater use of natural gas as
> a transportation fuel in the coming years.
> newsok.com/legislation...
>
> The State of Utah is taking new measures to firmly establish itself
> as one of the top purchasers of natural gas powered vehicles in the
> U.S.
> www.oxfordprinceton.co...;title=Utah+emerging+a...
>
>
> The State of California's Air Resources Board yesterday adopted a
> regulation to implement Governor Schwarzenegger's Low Carbon Fuel
> Standard calling for the reduction of greenhouse gas emissions from
> California's transportation fuels by 10 percent by 2020. The regulation
> encourages the use of four primary low carbon alternative fuels for
> transportation: hydrogen, electricity, natural gas and biomethane.
>
> www.azom.com/news.asp?...
>
> Many Senators desire… NATURAL GAS AS A TRANSPORTATION FUEL.
> epw.senate.gov/public/...;FileStore_id=e211e475...
>
>
> Obama pushes natural gas vehicles. Congressman Rahm Emanuel of Illinois
> worked with Democrat Dan Boren of Oklahoma on a bill to help increase
> domestic production. Barack Obama introduced a very similar bill
> in the Senate.
> mybossier.blogspot.com...
>
>
> After the…EPA's CO2 Finding: Putting a Gun to Congress's Head
> www.time.com/time/heal...;br/>
>
> Reid suggested cap-and-trade legislation could clear the House by
> year's end,
> www.smartbrief.com/new...;copyid=2B37DFF9-58AE-...
>
>
> And…natural gas will be a clear benefactor of the cap and trade legislation
>
> shareholdersunite.com/.../
>
> Natural gas is likely to be the engine of growth in the foreseeable
> future, according to the US government’s Energy Information Administration
> (seekingalpha.com/symbo...).
> www.businesstodayegypt...
>
> Let’s Roll!