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  • Domestic Oil Falls To Saudi Arabia - What's In The Kingdom's Portfolio?  [View article]
    Thanks for your reply, Travis.

    I shall regard myself as having been warned to not speculate in public, in ways that could be seen as uncooperative, about matters involving powerful forces in the world that could crush me like a bug.

    Henceforth, I shall limit my comments to musings about various obscure indices and ratios, and stay away from even naming geopolitical heavy hitters.
    Jan 13, 2016. 07:15 PM | Likes Like |Link to Comment
  • Viagra Maker Pfizer Wants Some Love  [View article]
    Pfizer used to be a great company, right up the street from the Electric Boat shipyard (also a company that used to be great) in Groton, CT.

    If I ran Pfizer, we'd be coming out with a high-potency Viagra product that lasted all day, could be taken every day, and had a cash payment price-point of $30 a month for 30 pills.

    Its side effects would be to control your blood pressure, help you sleep at night, lower your golf score, and prevent angina pain and cancer.
    Jan 13, 2016. 06:11 PM | 1 Like Like |Link to Comment
  • OPEC's Divisions Keep Oil Low And Volatile  [View article]
    OPEC is divided into two major lobbies, Shia and Sunni.

    Within the Sunni group, Saudi Arabia is the dominant player.

    Right now, Saudi Arabia is decided it is in their own best interests to sell oil below their own costs of production, to use oil as a weapon. The Kingdom has ~$20 trillion in reserves, so they can keep this up for a couple of decades if they choose to. (We should be asking ourselves why they've decided to do this?, and why now?)

    The other Sunni states in OPEC have been left to scramble around and do the best they can, and, in the context of the intersectarian competition to restore the Caliphate, they'll back The Kingdom.

    So asking if OPEC is broken isn't a particularly useful question.
    Dec 9, 2015. 09:27 AM | Likes Like |Link to Comment
  • OPEC's Divisions Keep Oil Low And Volatile  [View article]
    Yes, absolutely.

    But, this is a geopolitical issue, and a matter of national security, so US energy industries cannot maintain a robust presence, in a free market economy, without protections and supports from the government.

    I fear that our national sentiment is dangerously hostile to carbon based fuels, dangerously anti-corporation, dangerously overly sensitive to imaginary environmental risks, and that prevents the US from giving appropriate and necessary support to US oil, gas, and coal industries.
    Dec 9, 2015. 09:20 AM | 2 Likes Like |Link to Comment
  • OPEC's Divisions Keep Oil Low And Volatile  [View article]
    Dear Blue Sky,

    Thank God for engineers, who built and maintain our civilization.

    You wrote, "As long as oil stays cheap our overall economy will run better, etc".

    IMHO, in the long run, shuttering our oil exploration and recovery and refining sites to maintain profitability, facilitating survival of our oil industry, makes us more vulnerable to a sudden interruption in supply, and here's my thinking.

    You're an oil man and an engineer, so correct me if I'm wrong about this:

    We can shut down our oil sites, much more quickly and profitably, than we can ramp them back up again in the event of an abrupt interruption of supply from the Middle East.

    It takes longer to build crews and get them in sync than it takes to lay them off and scatter them to the 4 corners of the world.

    It takes longer to get the nuts and bolts of any complex facility up and running, with the crews understanding the system, than it takes to shut it down.

    So, if Hezbullah (mainly an Iranian Shia proxy army) decides to blow up some Sunni OPEC pipelines, or Putin decides to bomb a crucial choke point in the chain of supply, or somebody decides to jam up the Strait of Hormuz, we're going to be very short of supply and very abruptly SOL.

    That short term crunch, lasting weeks?, until domestic production recovers, could be devastating to our country for months.
    Dec 9, 2015. 09:11 AM | Likes Like |Link to Comment
  • Domestic Oil Falls To Saudi Arabia - What's In The Kingdom's Portfolio?  [View article]
    Thanks for your reply, TB.

    I like to connect the dots, so let's see....

    The Kingdom is a devoutly Sunni Islamist country, Wahhabi, home to Mecca and Medina, hosting the hajj every year at Islam's holiest place on earth, and the hajj is one of the 5 pillars of Islam. Saudi Arabia's domestic law is Sharia law, and Sharia courts in Saudi Arabia still condemn people to beheadings every year. (I managed to dig out a cell phone video somebody recorded in the Kingdom, where an executioner in robes used a huge scimitar to behead a woman in the middle of the street. She still screamed after the first stroke, but the second stroke silenced her, and the third stroke separated her head from her body.)

    Saudi Arabia owns or influences social media in the United States and globally, it might be said, with their holdings in Twitter and Newscorp, and ISIL/ISIS is a radical Sunni group that excels in networking via social media.

    We have to believe that with the enormous power and influence of The Kingdom, if The Kingdom wanted ISIS/ISIL kicked off social media globally, it could be done on any single day, dark net notwithstanding.

    Believe me, the San Bernadino terrorists were certainly not a couple of brilliant bad guys, in that they were so technically challenged that they were having difficulty swapping out AR15 magazines and unable to detonate black powder pipe bombs, so they probably weren't up to having any dark net access.

    So, we may not be able to attribute The Kingdom with backing ISIL/ISIS, but the word "permit" could be applicable. 
    Dec 9, 2015. 08:31 AM | Likes Like |Link to Comment
  • OPEC's Divisions Keep Oil Low And Volatile  [View article]
    I don't see how you can assign "swing producer" status to the US, if, by "Swing Producer", you mean "the producer who has the final say in setting oil prices".

    The producer who has the final say in oil markets is Saudi Arabia, who has decided to chase the USA out of energy independence by crippling our oil and gas industry with oil prices substantially below the Kingdom's costs of production.

    This is simply part of competition between different sectarian groups in Islam, which has devolved to the point where other Sunni producers like the UAE find themselves at odds with the dominant Sunni producer, the Kingdom.
    Dec 8, 2015. 11:47 AM | 2 Likes Like |Link to Comment
  • Domestic Oil Falls To Saudi Arabia - What's In The Kingdom's Portfolio?  [View article]
    In order to understand today's oil market in a way that may benefit investors, I think it's necessary that one clearly comprehend the motivations and the intentions of the Kingdom (the Royal Family of Saud), because this directs the actions of corporate entities like HUN, and TASNEE.

    First and foremost, for the Kingdom, oil is a weapon. This year the Kingdom has used oil prices to chase the US oil industry out of production that would allow us to have energy independence, forcing us to rely on foreign oil. The Kingdom's goal is to secure influence over the United States internationally, which it has done for decades, and done so at a profit.

    This relationship has resulted, among other things, in a long-standing alliance between the USA and Sunni Islam, as the Saud Royal Family maintains its political status by the consent of Wahhabi Sunni clerics.

    In today's geopolitical convulsions, the energy market is buffeted by a global competition between different sects in Sunni Islam (eg., Salafists versus Wahhabists) , the greater original schism between Shia Islam and Sunni Islam, and the us-versus-them distinctions which are defined by Sharia (not just a legal guide, but a prescription for all aspects of life derived from the revealed word of Allah) that apply to Muslims in their dealings with non-Muslims.

    Now, the Kingdom has decided that their purposes are best served by selling oil to us and to the world at a loss, below their costs of production, in order to prevent the USA from maintaining energy independence and to keep the USA dependent on oil from the Kingdom.

    They can afford to do this for at least the next two decades, based on their financial reserves, which are estimated to be somewhere in the neighborhood of $20 trillion. (such numbers are impossible to be sure of, cloaked in privacy, but that number serves to get in in the most likely order of magnitude of their wealth).

    The natural consequences of this intention are that US oil companies will be crushed, unless oil independence is addressed as a national security issue.

    The anti-corporate political culture in America would make it very difficult for the US government to protect our oil industry, particularly if that involves oil at a hundred dollars a barrel, or if it requires government subsidies to keep prices lower and other steps to protect the competitiveness of US oil companies in domestic and international markets.

    At the same time, the Kingdom uses its wealth to influence other activities in everyday life in America, which is reflected in their positions in TWTR and NWSA, and countless other domains both political and financial.
    Dec 8, 2015. 11:14 AM | Likes Like |Link to Comment
  • Consequences Of The Fed Rate Hike - Cramer's Mad Money (6/12/15)  [View article]
    In 2007 and 2008 Cramer was cautioning investors not to cash out, long after a death spiral trend had been established, as though he believed that any other message to the trading public would exacerbate the falling knife decline in equities. Banks were tottering on the brink. Investors lost half of their total net worth, or more.

    Those who recognized the down market made profits going short while the knife was falling, and then buying long positions after convincing bottom patters and turn-around trends were well-established.

    Cramer "led from behind" while this was going on.
    Jun 16, 2015. 11:31 AM | Likes Like |Link to Comment
  • More Bad News For Peabody Energy - Are We Seeing The End Of The Coal Industry?  [View article]
    Obama promised that he would destroy the coal industry, the night before his 2007 election, and this is one of the few promises he's kept.

    Even before Obama was inaugurated, the energy minister from India was trolling around our coal producers, soaking up coal equities. By now, much of the US coal sector is owned by Indians, and they adore the rock bottom share prices.

    China and India are ecstatic about all the anti-coal policies under Obama's rule.
    May 21, 2015. 02:48 PM | Likes Like |Link to Comment
  • Buy The AuRico Gold Spin-Off  [View article]
    If you buy or hold AUQ shares today, what do you wind up with after AuRico Metals is formed?
    May 13, 2015. 03:19 PM | Likes Like |Link to Comment
  • Kinder Morgan And 'Missing The Boat'  [View article]
    Mad writes "In the absence of a broad market correction, the new bottom for KMI is $40 for the rest of the year."

    With broad market indices topping, and we're overdue for a correction, I think the entry point for KMI is going to be comfortably less than $40 during that correction. Cost averaging, and the confident expectation of reliable dividends, says it makes sense to buy some KMI now, and add during the correction (because you increased your cash position when the market got overdue for a correction), and hold onto it for three or four years with the sound expectation that you'll look back on this strategy with reason to applaud your own genius.

    If there isn't a correction, you'll still be safe if you buy KMI now and hold it for a couple of years. But, don't worry, there's always a correction eventually, and volatility will always have periods of fluctuation.

    Oil's going to double some time in the next year or two, so midstreams and oil services are safe places to invest now if your time horizon is longer than a couple of years.
    Apr 29, 2015. 03:25 PM | 2 Likes Like |Link to Comment
  • 9%+ Dividend Payer Linn Energy/LinnCo Missed By -$0.83, Or Did It?  [View article]
    Holding a LNCO position of around 2.5% in my portfolio. It's down about 50% from when the position was acquired. The dividend was reduced with the share price plunge, but still over 10% and still paid out monthly. I'm holding, and struggled to NOT back up the truck a month or two ago when oil was bottoming, otherwise the position would be larger.

    My expectation is that midstreams are a good investment now, and oil prices will only be temporarily low because the generosity of the Saudis is already running out. We already have Iranian interference with shipping, and the first function of oil in the Muslim world is as a weapon, so oil prices will spike again because sectarian hostility between Sunni and Shia overwhelms any capacity they have for discipline.

    I figure I'm accumulating more shares of LNCO every month, cheaply, and have more than I started with. When oil spikes, the LNCO position will blossom, as will positions in HAL and CVX. I timed the bottom for HAL, though that strategy is frowned upon by pundits, and expect rising oil prices will suppress a lot of the economy but these oil positions are like an insurance policy against open hostilities in the middle east (seems like a sure thing to me since every new year in the "arab spring" looks more and more like extremely ramped up inter-sectarian jihad).
    Apr 29, 2015. 03:12 PM | 9 Likes Like |Link to Comment
  • Copper Makes A Move - Is Copper The Next Oil?  [View article]
    Even when the Mongolian "government" leans favorably towards TRQ's/RIO's mining projects for copper and gold, it doesn't seem that any sustained progress is able to get a foothold.

    I have given up trying to second guess Mongolian mining projects, though managed to take some profits when IVN was the miner.
    Jan 14, 2015. 11:33 AM | Likes Like |Link to Comment
  • Copper Makes A Move - Is Copper The Next Oil?  [View article]
    CommonSense makes a good point about factors influencing Chinese Copper imports.

    Another factor driving down copper prices will be the Chinese copper mining project in eastern Afghanistan, which is predicted to add about 30% to Chinese domestic copper production.

    This will reduce Chinese copper imports from ex-China international sources at the same time that Chinese copper demand due to "make work" projects will taper off.

    Global copper prices and futures will eventually reflect this "perfect storm" pulling copper down.
    Jan 13, 2015. 08:11 AM | Likes Like |Link to Comment