Wednesday, July 2, 2008

$14 million for a license plate?


Back on Valentine's day, $24 million was raised in Abu Dhabi for the selling of vanity license plates.

Khouri won the auction in Abu Dhabi's Emirates Palace hotel amid chaotic scenes in the auditorium, which was packed with more than 700 people. The Abu Dhabi businessman had to push through photographers, cameramen and spectators to the front of the room to be seen by the auctioneer before thrusting his number into the air for the final time, his mobile phone at his ear throughout the bidding.

The sum of money was ``normal'' for his family, Hamdan Khouri said after the auction. ``I was prepared to spend as much as 100 million dirhams.''

The plate will be kept on one of the family cars, and he has no intention of selling it, he said.

The U.A.E. earned approximately $60 billion from oil sales last year, or more than $12,000 for every resident. Abu Dhabi controls more than 90 percent of the U.A.E.'s oil reserves.

Driving today, I noticed the gas lines where a station was selling gas .06 cents less than everybody else. No million dollar license plates here. Now we have autos, airlines, banking and housing in a depression, and stocks are rapidly following suit. Meanwhile "Oil" is hitting $144 a barrel, while the shippers and material stocks are getting crushed.

This inequity in oil can't last, when this redistribution of the world's wealth is so uneven. The only other area where pricing is so egregious is in the fertilizer stocks, which were held up at quarter's end by the hedge funds.

With the raw input cost of farming going up and the double ordering of fertilizer (remember how memory chips used to be double ordered?), how long will it be before sanity comes to this market?

Just a few weeks back, the CEO of Potash said he's sees good demand for the next 5 years, and Merrill Lynch put a $300 target on this number, one upping Goldman's $285 target.
I say "Sold to you!"

It wouldn't be the first time an Investment Bank pumped these numbers at outrageous prices.

I say Potash (POT 212.55) gets crushed tomorrow, just like the coal stocks did today.

The masses are restless. The slaves won't build the pyramids when they have to change how they eat and drive.

And this realization is hitting Wall Street and corporate America who are getting hit by the debts of the disaffected middle class who are walking away from their credit card debt and their upside down mortgage, but only after they've lived in the house for a year without paying.

So if the consumer isn't going to take the BS anymore, what makes you think that the fertilizer price pyramid game being sold by Wall Street is any different?

It's just the same fertilizer spread in a different package!

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