I think after all these years, we are finally seeing a flight to safety bid in energy equities. I'm sure mostly everyone here can see the pattern. And, can also see it's the no debt large caps sitting on mountains of cash or who have cash flow secured that are catching the bid. The signal, imo, comes from the announcement this AM that Treasury has to raise funds, for the FED. This unleashed gold, of course--as it was the confirmation of a multi-year thesis that the Government would monetize. (Yes I realize this is not yet the textbook definition of monetization, but close enough.)
Today's bid in these energy equities has zero to do with the moves in NG and Oil. How can I say that? Because like many of you I have been investing in energy equities for years. On a day of panic with T-Bills going to zero yield, the VIX rising, and the end of the world on everyone's lips, we all know that energy equities could just as easily be tanking hard along with everything else. So it's not today's move in oil and NG. In fact, what I see now, is this flight to safety bid started last week. This is a safety move, and a currency debasement move. I see now that FRE/FMN kicked it off.
If I am correct in my analysis, this flight to safety in large cap, cash rich or well hedged energy equities is a new move, that has just begun. If I am wrong, well, I am wrong. In these markets, being wrong would be pretty easy.
Best to all,
G |
