Whitehawk

Is Bond Market Betting Rising Oil Prices Will Check Inflation?

I would argue that we already have much larger inflation than the usual Fed metrics would suggest. The price of gold has not been mentioned here. The stock markets are on a tear despite being overbought (and overpriced) by the indicators.

Investors Fled out of Leveraged ETFs at Exactly the Wrong Time

These products are being killed by the likes of Jim Cramer, et al. You'd think these folks would be free market capitalists, but they are not - they are establishment shills that, like our crony socialist government, try to control what people buy and sell, not to mention prices and wages, and the redistribution pipeline. The products will get killed and the lawyers will make a killing.

Crude Oil ETN to Close Down

Chris M makes the clarifying points that should have been reported on in the many articles of *misinformation* I've read about DXO's closure. I too think the closing has more to do with Deutsche's inability to arbitrage the long-short (DXO/DTO) this pair. Since there are no underlying futures contracts assets, as there are in ETFs, the CFTC thing is a red herring.

Natural Gas ETN Temporarily Stops Issuing Shares

I do not understand why PowerShares is discontinuing its issue of DXO shares. I can understand ETF discontinuance/share scarcity, as there are associated asset based holdings (buying and selling actual futures contracts), but ETNs trade on price action and a loose connection to an underlying index. DXO/DTO is hardly ever arbitraged by market makers, as anyone who trades these vehicles has noticed. So why does PowerShares care about issuances for ETNs? The fact is that ETN volume ought to grow in response to this nonsense from the CFTC, which is most concerned about manipulation of the futures markets.

Crude Weakness Ahead? (Part II)

While there is an inverse correlation between the dollar and crude, it is not "strong" from the mathematical sense, and there is certainly no unidirectional causality between the two - it is bidirectional and perhaps chaotic.

Economist Joseph Stiglitz writes that you can't answer the question of whether Keynesian economics has failed - because it hasn't really been tried yet. More stimulus, please.

GDP = C+I+G+(Ex-Im)

Increasing G to throttle C will crowd out I. G ~ 2*I when it ought to be the other way around. The Japanese found out the hard way about Keynesian economics - it choked their GDP.

Fed Balance Sheet: Week of August 5, 2009

They are not [only] pushing the problem to another generation. This reflation has plenty of ammo for the current generations......

Who's Blowing This Bubble - And When Will It Pop?

Nice article, but on the Wessel recommendation, if you want the true story read the classics, including Friedman's Monetary History 1867-1960 as a basis. Do your own research on recent years and draw your own conclusions. Wessel is a liberal who writes for the WSJ and hasn't contributed anything useful to the debate over the Fed.

We are in a reflation of a bubble, pure and simple. Trade it if you will, but use lots of hedges. While I trade, I am also a spectator of what will be as entertaining as watching an action flick, only the pain inflicted will be on real people who got caught because of unfortunate circumstance and/or because they have their heads buried in the sand. The only way to change that is education. And the only way to change that........(the problem is horrendously recursive)

Remember $20 Oil? Looks Like It's Coming Back

Short term (next 6 mos.) oil will not hit $20 nor will it hit $100. The trading range of $45 - $75 appears most likely, driven by DXY volatility. Beyond that is anyone's guess, but $20 oil seems unlikely. If it is hit, it will be quick and there will be a large recoil.

How High Will the Price of Oil Go?

Excellent article by the way - would like to see more articles like this on SA, and appreciate the author's active contributions.

Maybe I missed it, but what is the break-even point (in $/bll) for producing syn-diesel? I'm sure it depends on production sources and methods.

How High Will the Price of Oil Go?

LINE does indeed look too good to be true. Based on the numbers, dividend and competitors' numbers as a comparison. What am I missing here?

How High Will the Price of Oil Go?

Always enjoy your comments - right on.
But I'm thinking of shorting oil soon. Upside looks too good to me.


On Jun 10 11:11 AM Mad Hedge Fund Trader wrote:

> We're already in nosebleed territory. Get me out of oil! I love a
> core long position in this commodity (see madhedgefundtrader.com...),
> and expect it to hit $200 before I join the AARP. But we have really
> gone too far, too fast, and are seriously in overshoot territory.
> Industry traders have been taking advantage of the greatest contango
> of all time, buying the front month contract, taking delivery, keeping
> it in storage, and reselling it forward to reap returns of up to
> 50%. And that is without leverage! Clever analysts are resorting
> to Google Earth to spy on storage facilities via satellite. Non industry
> players have been buying it as a dollar replacement. Crude burns
> better than dollar bills. As a result, crude in storage has ballooned
> to record levels. All fine and good when the price is going up. But
> crude can’t stay this high once the sugar high that is sustaining
> the economy burns off. Better to bail now at $70 and buy it back
> at $50 once reality sets in. And for Heaven sakes, don’t try to get
> to clever by shorting the stuff!

Options Trader: Thankful Friday

I sold my oil positions late today and am now short financials, so I agree with the author. Next week will be interesting, and I expect a selloff before options expiration.

Why This Rally Is Unsustainable

Banks are making money off of the yield curve. You fail to mention that. But I agree that accounting tricks have helped their Q1 reports.

I don't buy arguments that claim program trading and quant funds are responsible for this rally. No one has really proved the recent short squeeze theory to my satisfaction yet. Which means authors writing about this need to strengthen their arguments.

While fundamentals are poor, the rate of decline has slowed and there is momentum in the market (which is more than program trading and quant funds). I expected the market to sell of before now, but it hasn't. Which indicates to me that the momentum sentiment is strong.

The author might consider trading some options to hedge his bearish positions!

Bank Stress Tests: Tangible Common Equity a Critical Metric

Excellent analysis. Would like to see it extended to all 19 banks - particularly whether any have exceptionally low or negative TCE.