Dan S1

Why Are Quant Hedge Funds Getting Crushed?

These quants having problems reminds me of the Long Term Capital Management hedge fund implosion which had at least 2 Nobel Prize Winners in Economics and around 25 PhD's at their peak. They thought they were unstoppable. Most black box programs do not have good adaptability and do not change with the times.

This also makes me question how our current supposedly wise economic policy leaders will handle the US economy as well. After all, they are supposed to know more than we do about how the economy works.

Is Corn Headed for Zero?

I was against the ethanol subsidy originally. If it didn't exist, there wouldn't be so many ethanol plants here in the first place.

I formerly worked for an oil company and was against them building the ethanol plant as they got too late a start building it in the heyday in mid-2006. Construction costs for plants was soaring 30 - 40% over normal as many other firms were all competing for the same skilled construction firms to build their plant first.

I'm against almost all government subsidies in general as they are not really pro free market and do not allocate our resources efficiently.

Looks Like It's Time to Buy Oil

I believe the bottom is not in yet for the petroleum energy complex. Many people thought $40.50 was the major low, but it is not according to my technical analysis. However, we can still rally up to $55.98 and crude oil will still be in it's major downtrend.

Continue to sell strong rallies.

Let GM Fail

James West is simply telling the truth in general about GM and the truth hurts. I applaud him in being brave enough to tell the truth.

dpro0102, it sounds like you have or had some related employment with a US automaker or a supplier. That's where you show your bias. I do not and have not worked for any automaker. There are some solid GM products out there, but the few of them cannot make up for the bulk of the other products few care to buy. Why don't you speak of Hummer quality and reliability or lack of it, to be fair?

Also, I used to buy Ford products and now own a Honda product. Why? Ford in the past seemed to have better reliability than Honda long ago, but Honda has since eclipsed Ford in quality and reliability, in general. The consumer is voting for what they want with their pocketbook. Let's respect that.

Wall Street Analysts: Endangered Species

Companies are lying about their earnings. There is little to no transparency. A CEO may say their company is great while they are selling their holdings of company stock and they have plenty of liquidity and next day, they are rescued by the government ala Bear Stearns. There is no independent board of directors, but rather a buddy boys club setup. The SEC is a POS and is not really regulating properly. Why aren't new IPO's sold on a lottery system instead of being offered to favored clients? The SEC could force this, but don't.

Analysts have to be somewhat bullish and therefore, we have a dearth of sell recommendations.

The best thing to invest in very soon will be commodities instead of commodity producers. It's much easier to hide or lie about earnings and other things than the physical commodity itself.

The only way for this to end is for the situation to hit rock bottom. However, we are several years away from this.

The real reason for basically all of the problems we have today is the US government and I am basically powerless to stop it.

The Topsoil Crisis: Dirt Isn't Cheap Anymore

We speak about the depletion of land with good soil, but we also need to discuss the ever growing human population of this planet. That is the real problem!!! With more socialism prevalent in countries today, governments are basically subsidizing the population growth beyond what a free market would allow. For instance, if I have 10 kids in the US, my income taxes go down due to child tax credits and the cost of all 10 kids fees in a public school per year is about $1500 total. I propose that whomever has a certain number of kids has to pay everything for those kids and not get subsidized. I am willing to subsidize birth control. I don't want other people's problems to be my problem and vice versa, which is only fair.

Oil Majors Exiting the Gas Station Business

This situation is the same throughout the economy. Namely, that the producer of the raw material is making all the margin, but the retailer of the finished product is getting squeezed. What this tells us is that the consumer's income is increasing at a lower rate than inflation, which causes these margin squeezes.

Today, you only want to be the producer or at the front of the supply chain and not at the back as the people up at the front took all the profit and you at the back are left with all the low margins and consumers complaining that you're the one making money with these high prices when you are not.

Honestly, I saw this coming back in 2003, but I do not know how to profit from the information I know.

I agree with the oil majors that the relatively high oil prices are here to stay as I would now expect an extreme low to be around $45 to $50/bbl. Forget about $1.50/gal gas going forward, even if we go into recession in a couple years, but we can see $2 a gal gas again in low tax states in the upcoming recession. The money a person spends for fuel means that they have less money to spend on other things like cigs, lotto tickets, soda, candy, alcohol, car washes, etc, so it hurts all parts of the convenience store business as well.

Oil: Slippery Road Ahead

Gold Digger, good article. I agree with your commentary. This current upside move in energies is a retracement of a main downtrend. Expect to see lower prices going into end of year 2008.

However, this long term commodity bull market is not over and I expect record highs on all energies in 2010 or 2011.

Support for Crude at $111?

I agree that this energy rally is a retracement rally of the main trend which is still down. I use technical analysis without using any technical indicators and this is what it's telling me. I'm still expecting lower prices by end of year 2008.

On Oil and Its Manipulation

blah-blah: I respectfully disagree with you. There could be speculation on the short side for the early 90's and it caused commodity prices to fall significantly, so there it had a positive effect on the economy. Was it a problem then?

Also, speculation does not cost everyone. For me to buy a contract, someone else has to sell me a contract at the same price. If I lose, the other side of my trade wins. So there is a winner and loser (excluding commissions and fees).

You just don't want to have the other side where commodity prices rise significantly.

I have the same right as you do to speculate in any market I wish.

On Oil and Its Manipulation

If I can't speculate in the energy markets, then to be fair, no one should be able to speculate in the equity markets or at the casinos.