Oh dear!
I find it mildly amusing that there is a huge headline in the WSJ reading: "Murdoch Wins His Bid for Dow Jones" on the same day we find ourselves on the brink of a stock market apocalypse.
What no one found mildly amusing was the movement of the market today, which pretty much sucked. Fortunately my morning sermon, "Be led not into temptation" was followed by most of the members and we enjoyed yet another profitable disaster as I called the top at 10:22 with: "XOM cannot get it together, nor can BA, CME pulling back, FDX treading water, SHLD not buying consumer confidence (or is real estate falling off a cliff?) and the DIA $135 puts at $2 are my put of choice at the moment. If the Dow can’t hold 13,450, I’ll grab the $134 puts a little early because $77.55 is a lot of money for oil, even in Euros…"
We also got great, but sad, news as our OLED's are being taken away from us for $12 a share, this is one of the few actual stocks we buy on a regular basis. Back on Dec. 30th this great small company was one of the only straight stocks I picked as a set-up for the new year:
- "OLED – the old rule on them is buy them on the 10th of the month (arbitrary) whenever they are under $6 and sell half whenever they get to $7, we’ve owned this stock for over a year that way and it’s one of the few proper stock positions I maintain.
- "This stock will one day be at $25 but that day may be a very long time from now as the very cool technology is still in development but I’m betting they will be a winner in this field.
- We did do a full dump in October when they topped out at $7.50 after having gone scary low on us but we came back in on 11/10 at $5.75 with another shot on the 10th of this month and a sale of 1/2 yesterday at $7 that reduced the basis to $4.50. Next time I buy at $6 I’ll be in for $5.25…"
The doom and gloom mood of the day did not stop us from buying more AAPL as it hit the bargain basement price of $130 but and we will be following them down with rolls on our October calls if they continue to be marked down.
The energy sector continued to collapse despite a new record high at the NYMEX where the crooks have jacked up the price by pretending they are going to have 360M barrels delivered to Cushing OK in September but they will, of course, cancel all but 30M barrels by the 22nd, as they have for the past 3 months in a row so their compadres on CNBC can then tell you how there is a shortage of oil in Cushing. There are currently more than 30M barrels scheduled for delivery every month through July '08 with over 500M barrels scheduled for deliver in the next 3 months (40Mb a week) yet only 7M of those barrels – that you are being charged for – will actually be delivered.
Where is Congress? These greedy, selfish, amoral bastards are destroying our economy. Perhaps now, as it finally hits our wallets, people will take a minute to forward this to other people. Until we stand up and put a stop to this blatant market manipulation we will remain at the mercy of the oil interests!
Really Mr. Congressman, how hard is this to understand. Traders at the NYMEX bid oil up $1.38 by trading 189,456,000 contracts worth of oil for September delivery. That cost is passed on to us, the consumers as the "spot" price and affects our goods and services. Come settlement date (8/21) no more than 40M of these barrels will be accepted for delivery as the contracts are moved to October, November and later months so they can play this game again, as they have for 3 straight years of artificial shortages.
This nation consumes 20M barrels of oil per day. At $78 a barrel that's over $1.5Bn per day for the oil industry but that's before they mark it up and sell it to you for $3 per gallon. With 42 gallons in a barrel the driving consumer is paying $126 a barrel for gasoline – think about that next time some jackass spokesman from the energy company tries to tell you that oil prices are still reasonable. Where does that extra $48 per barrel go? That's called the "crack spread" because the profits are like crack to the refiners while the consumers are forced to live like crack addicts in order to be able to afford to fill up their tanks!
The financial press, the largest of which is owned by GE, who make Billions of dollars building long-term energy projects that are based on projected high oil prices – reports the oil inventory in Cushing (where the NYMEX barrels are delivered) as if that's the whole energy story even though there is more oil AND natural gas in inventory than at any time in our nation's history. You people are holding up the merger of Whole Foods and Wild Oats because you are worried about pricing yet you let this slide?
As Capital One asks in their commercials Mr. Congressman – "What's in your wallet?" I bet it's oil money!
Back on July 10th I warned you that the "Goldilocks" economy had 3 bears: "Well, I don’t know about you but I’m losing faith, despite Larry Kudlow using the term Goldilocks a dozen times this evening, as if saying it would make it so. Just remember, the story is about Goldilocks AND three bears – today was just a quick visit from Baby Bear (inflation). Momma Bear is earnings and you don’t even want to be in the room if Poppa Bear (the end of the Yen carry trade) shows up!" I am very concerned about Poppa Bear right now!
We had yet another BSC hedge fund blow up this evening as their "Asset-Backed Securities Fund" has suspended investor redemptions "and expects losses in July." So we should be in store for more fun and nonsense in the morning!
Please, really, send this to other people. We need to start a national dialog about what's going on in the oil pits because it is NOT necessary for American consumers to pay $413Bn a year for gasoline – and that's just 1/2 of oil's usage. A trillion dollars a year sucked out of consumer's wallets to feed big oil and we do nothing?
As President Bush himself said in 2002: ""Doing nothing about that serious threat is not an option."
