User 184146

Atlas Pipeline Partners: Hedged Income Strategy

Somewhere in translatoin we lost the strike price. The correct strike is NOV 35 for the symbol APLKG.

Jacktraker

Why Commodities May Be Nearing a Turning Point

Here is an alternative thesis supporting the view that we may be nearing a turning point in commodity prices.

China is concerned about inflation and the rising cost of raw materials for its growing economy. They have stated publicly they will not slow down economic growth and they have stated publicly they intend to control inflation. Further, they have expressed the view that high crude oil costs are partly a function of excessive speculation as well as supply and demand. Some analysts have expressed opinions that China may use the cover of the Olympics to implement a plan to stockpile raw materials and then abruptly stop buying both raw materials and shipping until they break the speculative froth in the commodity markets. It would be helpful if the dollar was gaining strength at the same time, which just so happens to be the case. We also know that proposals to reinforce the margin and reporting rules of the commodity futures markets could be introduced on September 15th and this could get the downward momentum really moving in crude oil and other commodity futures.

If this is indeed the plan then all they now need to do is wait a few weeks longer before restarting to crank up the Chinese economy. By then the impatient Westerners will have thrown in the towel and sold all of their speculative commodity plays, especially those large pension plans that have been long the commodity future indexes.

Preposterous you say, governments don’t get involved in market economics. My reply would be that China is a centrally planned economy and they could very well have implemented such as plan. From the organizers and managers of the Olympics that pulled off spectacular displays and crushed all political dissent, I say they could pull this off as well.

8 Notes About The Fed

Perhaps we need to step back and consider some structural issues. Who allocates scarce capital? Now that capital is becoming scarce can you imagine US credit being allocated by the same folks that brought us the 2007-2009 mortgage debacle, the student loan and credit card fiasco? These are the same folks that brought us the Resolution Trust Corporation from the commercial real estate bust in 1990. Credit has been allocated not based upon the worthiest borrower but based upon the marketing and incentive fees the banks can earn. They have clearly demonstrated their inability to efficiently allocate credit and it seems as if we are going to be relying upon them once again. Unless we revive regulations and oversight of the banking industry eliminating their conflict of interest between their basic credit allocation function and their fee and incentive based marketing operations we can expect the same folks to bring us the next economic disaster. Where are the bank regulators? Where is Congress? Can anybody see beyond the next quarter’s income statement or campaign contribution?

8 Notes About The Fed

Perhaps we need to step back and consider some structural issues. Who allocates scarce capital? Now that capital is becoming scarce can you imagine US credit being allocated by the same folks that brought us the 2007-2009 mortgage debacle, the student loan and credit card fiasco? These are the same folks that brought us the Resolution Trust Corporation from the commercial real estate bust in 1990. Credit has been allocated not based upon the worthiest borrower but based upon the marketing and incentive fees the banks can earn. They have clearly demonstrated their inability to efficiently allocate credit and it seems as if we are going to be relying upon them once again. Unless we revive regulations and oversight of the banking industry eliminating their conflict of interest between their basic credit allocation function and their fee and incentive based marketing operations we can expect the same folks to bring us the next economic disaster. Where are the bank regulators? Where is Congress? Can anybody see beyond the next quarter’s income statement or campaign contribution?