Thursday, October 8, 2009

Natural Gas--As advertised!!!

How's that above chart look on natural gas?

Wouldn't it of been nice to buy that at the bottom?

Did anyone on Wall Street advertise to buy it there? Oh wait. Did anyone remember this post?

At the market low? As advertised!!!!!! I'll re-post it! Because now you had the bottom in oil, the bottom in natural gas, and also the exact bottom in stocks, at 666, at the exact day, and the exact minute here! I'll repost that too. Because supposedly, that can't happen.

But you also had the top in bonds advertised here. I'll repost that too.

Looks like supposedly is wrong!

As advertised!!!!

Thursday, September 10, 2009

Natural Gas

Since Meredith said Goldman has a lot of gas left in their tank, and I've talked about GAS (Grumpy Analyst Syndrome), maybe what really needs to be revisited is natural gas.

Remember when the whole world was buying oil to store it because the future prices were so much higher?

The same situation now exists in natural gas. Look at this article in today's WSJ:

Commodity traders and utilities have been stashing cheap gas in underground storage caverns during the past year. They have been locking in sales of the gas for future delivery at much higher prices on the futures markets or keeping costs low for electric power they produce in the future.
That is sparking a boom for companies that operate certain types of storage facilities, such as one controlled by Houston energy hedge-fund manager John Arnold.

And companies that turn natural gas into the raw material to make plastics, such as Enterprise Products Partners LP in Houston, are enjoying a boost, as crude-oil-based ingredients become pricey compared with gas. The opportunities in a cheap-gas world underscore how operators in the energy business have learned to adapt to a range of market conditions. Some companies are prospering even as natural-gas producers come to the conclusion their fuel may be far cheaper for the foreseeable future. Thanks to huge natural-gas finds over the past year and weak demand in the recession, natural-gas prices have fallen to seven-year lows. Natural gas for October delivery on the New York Mercantile Exchange settled at $2.829 per million British thermal units Wednesday, up 2.2 cents, or 0.8%, and off 79% from its high last summer. By November, most energy observers are predicting gas-storage caverns around the U.S. will be full...

Crude oil historically has cost anywhere from six to 12 times more per barrel than natural gas costs per million British thermal units, a measurement of energy. As of last Friday, Nymex crude closed at a price 37 times higher than a key gas spot-market contract, said Rusty Braziel, managing director of Bentek Energy, a natural-gas research firm in Evergreen, Colo.
Remember when oil was at $37? And the ten year rate was at 37 year lows? And Goldman was pimping oil down to $27.
This blog, on December 18, had a different take on oil:
Oh give me a break. Goldman Sachs says oil can hit $27 a barrel, and then they trot out their spreadsheet this morning that says we will have $1.8 trillion of credit losses, and now we are just halfway through.

Now we have oil with a 37 handle, with the ten year rate at 37 year lows, and no one is beating the drum to buy.... So what do you do with oil here? You buy it. You buy it now. You buy it in size. And you have one of these brokerage firms, who are so bearish on oil, sell you a swap to hedge your fuel costs, so at least then, for once they'll eat their own cooking. $1.8 trillion in losses have you scared? I guess that's a market. I'll take oil here on the 18th. After all isn't 18 the number of life? And there is life in the oil market!

The same situation that existed for oil then, now exists for natural gas. But the nattering nabobs of negativity on natural gas just can't get their handle on these lower prices.

And just like the same folks couldn't get a handle on the 666 bottom, they won't be able to get a handle on natural gas when oil is 37 times more expensive.

Because Wall Street just can't get their hands around wisdom!

Monday, March 9, 2009

Time to get busy buying!

Didn't anyone listen to Buffett this morning? The spreads in the banks will be enormous.
WFC at 9
USB at 9

How about industrial companies?
IP at 4
GE at 7
AA at 5

How about steel?
X at 17
NUE at 32
AKS at 6

How about oil?
COP at 36

How about a spec in coal?
PCX at 3

How about drilling?
NOV at 25

There is a lot of action in a lot of names, but everyone has their bearish blinders on.

Take them off, and you can see sunlight!

Thursday, January 1, 2009

A New Year's Resolution-Sell your Government paper!!

Sell it!

Sell your 10 year paper!

Sell your 30 year paper!

Sell your 5 year paper! Credit Suisse said to buy 5 year paper two weeks ago. That's a call? Just sell it to them!

Sell your Treasuries! You had a heck of a year. The best since 1995. So just sell them!

Unless you are parking money for security purposes, you should sell it all. Sell them to PIMCO if they are supposedly so bullish on bonds. Sell it to Goldman. Sell it to BlackRock. Sell it to Wellington. Sell it to the fools swarming over this paper. Hit the bids for gosh sakes!

Just go and sell it!

Sell it to those shills that say we are going into deflation like Japan. Lock in interest rate swaps with these Wall Street dealers, who say rates are going to stay down here. Aren't these the same folks that told you oil was going to $27? Did that work? Did anyone notice the action in oil yesterday?

Hell, sell it to Treasury! They say they are going to buy $500 billion of MBS, of which, I find doubtful, so sell it to them.

But just start the New Year right by selling!

Sell your bonds to those bearish on platinum at $900! Did you see the action in platinum yesterday? Did that look like the start of a breakout? Didn't Wall Street say that platinum would be stagnant for the next couple of years? That's just stupid talk, promoted by those who need trading to live!

Sell your bonds to those that were bearish on the dollar at 147 against the Euro!

Remember the failures in the delivery market for Treasuries? How is it possible that our Government, is now finally going to do something about it, and do it quickly?

Bond dealers and hedge funds that fail to complete trades in Treasury securities face a penalty of as much as 3 percent on the proceeds of transactions, according to a Federal Reserve-backed industry code to be implemented in the next six months. The plan, which strengthens official oversight of trading, will be unveiled as soon as Jan. 5, said Thomas Wipf, chairman of the Treasury Market Practices Group and the head of institutional securities group financing at Morgan Stanley in New York. “It seems quite obvious that the Fed and Treasury cannot and will not accept the status quo for much longer,” Wipf said in an interview. Demand for Treasuries is so great that investors are lending cash for next to nothing to obtain the securities as collateral through repurchase agreements, or so-called repos. The problem is market participants haven’t always delivered the bonds, causing “fails” to exceed $5 trillion at their peak, according to the New York Fed.

Remember when this "naked" problem was systemic? I wrote about that on October 25.

Look at the above graph. Did you see a move after October 25? In fact, wasn't that the greatest move ever in the history of the bond market?

Now ask yourself. Does this government ever do anything for Wall Street without first tipping them off?

And if you can't find a reason to get bearish on bonds, because economic reasons appear to be negative, then just use semantics. Call the move a bubble! Doesn't everyone know that bubbles end badly! And call the dour forecasts just a "negativity" bubble.

Call it whatever you want, as long as it gets you to move! And as long as it gets you to sell!

So sell it now! All of it!

That should be your New Year's resolution


Anonymous said...

speaking of advertised, I posted this publicly on April 15 or so, 2009.

Not bad.


Anonymous said...

Palmoni, great take on things.

What is your take on the direction of the market when the dollar starts rising or when they finally make that first raise in the interest rate?


Palmoni said...


I saw that picture somewhere before--and I was looking for a place to use it--but then I didn't remember where it was!

Thanks--Good advertising!!

Palmoni said...

I just think that people would much rather own stocks than dollars.

I know "fissures" are already developing with the Federal Reserve on interest rate policy--They want to keep rates low forever--but the speculators are running the things that the Fed doesn't want them to run--so their hand will be forced sooner rather than later.

I think the strength in bonds is partly because of Bill Gross and his gigantic bets.

The first shot across the bow on interest rates, tho probably won't be fired from the Fed.

But if the economy recovers quickly--which I think it will--then the raising of rates won't be an issue.

The Pollyanna bet