Pretzel Logic

Gaza War: Expect a Spike in Oil, Gold

Regarding "Higher oil prices will be the death knell for the recent modest rally in global stock markets and the impact of higher energy costs " -- if you overlay a chart of oil and the SPX, you will see that the two have been moving in tandem for several months. Modestly higher oil prices would be bullish for equities, not bearish. I expect oil to rally to $65-85 before crashing to new lows on its next downleg.

Gold lost its luster as a war safe-haven when Russia invaded Georgia (look at a GC chart if you missed it). I doubt most investors have forgotten that lesson this soon. I expect gold to see the $600's before it sees the $1000's again.

Has the Energy 'Tsunami' Been Aborted?

"My sister the real estate maven tells me there are a lot of home buyers “on the sidelines” waiting for the deals to get better and prices to stabilize. She thinks we could be six months or so away from a bottom in housing prices."

I know I'm not a family member, but I hear from a great many homeowners who are waiting for the market to go up so they can SELL. There is a huge overhead supply in housing, so I think the "technical damage" in the housing market will make it hard for prices to rise in the near future.

And we are still completely overbuilt. For years, the realtors told us, "They aren't making any more land!" Well, according to demographics, the problem is: they aren't making any more people, either. And the days of average Joe Speculators owning 27 houses are gone. There are tons of new developments that have huge vacancies. So demand will have to rise again to meet supply before houses can stabilize.

Update: Crude Oil, Priced in Gold

SWRichmond,

I have to say that your reasoning regarding the oil/dollar market is absolutely brilliant. I had not considered things in this light before, but after reading your thesis, it makes perfect sense to me. Hats off to you.

GM May Hit $200 Before Oil Does

Hearing all this crap about "peak oil is here" reminds me of the glory days of the "new economy." "Everything's changed! Buy oil (and dot coms) now!" Not even close. The USGS indicates that the US *alone* has estimated reserves of close to a TRILLION barrels. The environmental fascists in Congress are creating the *illusion* of peak oil, by blocking votes on drilling -- but peak oil on the actual planet itself is a long way off. In a hundered years or two, when peak oil starts becoming a real issue, new and viable technologies will abound.