Thursday, May 22, 2008

Selective Memory

I was watching pom pom TV this morning to catch the employment numbers and happened to catch Mr. Joe Kernan's insight on the energy market bubble. I just loved how he claimed they all knew tech was a bubble! Especially cheerleader-in-chief Kernan of the tech pep rally, now can identify bubbles with ease and acuracy. The Fed can't identify them, so maybe Kernan should be on consultative retainer(just a thought). Funny how Mr. Kernan, with his limitless intellect, didn't see Qualcomm comin,. or did he conveniently forgot about his drum pounding on that one? Could be a selective memory, no?

His claim of the hubris of the part of energy bulls and their own intellect is particularly fascinating given his and his cohorts track record. Try this on for size, how about it can't be an energy bubble simply because Joe Kernan and CNBC continue to think it is one !!

I realize full well there will be terrifying drops in crude which will shake many from the tree, just when it looks rosiest it will become most frightful. But sure as night follows day, we need more than we have. If this were a bubble and prices were out of sight never to be seen again, shouldn't the producers of OPEC hit the bid and sell it all. Don't you think the integrateds would be unloading it before the music stopped? Kinda like Mark Cuban did with his dot com to Yahoo.

Sounds reasonable, no? Or could it be that they know the claimed reserves are not there. Could it be that water cut, something nobody talks about is a real problem. Could it be that it used to take 1 bbl of energy to retrieve 8 bbl and now it is 1 to about 2.5 (I am recalling this from memory so don't hold me to it to closely). Could it be that the easy stuff has been tapped.

Note to CNBC, why don't you invite people who do REAL research into the energy markets. People like Samsam Bakhtari, Matthew Simmons, Colin Campbell, or Jeffrey Brown, just to mention a few. People who have a grasp of the global energy markets.

The cries for the Administration to release supply from the SPR (Strategic Petroleum Reserve) is laughable. Sure, tap into the SPR. High prices, of course, it's an emergency, I can't take the SUV around the corner to McDonald's and Target to spend my stimulus cheque! Let's throw prudent judgement to the wind, lets just be like the U.S. homeowner who tapped his home equity line to buy that waverunner, that plasma TV and Rolex. It was an emergency !! So when you lose your job and need something to tide you over, wait oh my God! I've got no cushion? Where's the pawnshop?

Tap into the SPR and just imagine what happens when Murphy's Law takes hold. Hopefully saner heads, (don't count on it) will prevail and will realise what the reserve is truly there for and the circumstances under which it is truly needed to be released. There, I will get off my soapbox.

Good speculating to you all !

Open Positions:
Long 6 units Currencyshares Japanese Yen ticker FXY @ $88.55 stop at $91.40
Long 1 unit Allis-Chalmers ticker ALY @ $14.45 stop at $16.64
Long 3 units Ultrashort Dow DXD@ $50.12 stop 2/1 at DIA $132.68/130.26
Long 2 units Ultrashort Financials ticker SKF @ $103.90 stop at XLF $26.72
Long 1 unit Currencyshares Swiss Franc ticker FXF @ $96.25 stop at $93.82
Long 2 units Frontier Oil ticker FTO @ $28.25 stop at $25.26
Short 1 units Daimler AG ticker DAI @ $86.20 stop at $82.48
Short 1 unit Brinker Int'al ticker EAT @ $21.25 stop at $24.14
Short 3 units Retail Holders ticker RTH @ $96.72 stop at $98.56
Short 2 units Goldman Sachs ticker GS @ $191.53 stops at $197.68/$193.58
Short 2 units Darden ticker DRI @ $36.35 stops at $40.27/$38.34
Short 3 units Lehman ticker LEH @ $43.70 stops 2/1 at $47.46/$45.48
Short 2 units Deutsche Bank ticker DB @ $117.03 stop at $120.18

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