re: Shorting oil & Goldman's call...
I wouldn't be in too much of a hurry to short oil, or
the USO here. Give 'em some rope. I don't think they'll
make it that easy for you.
I'm sure Goldman has anticipated that their rather self-
serving call will raise skeptical eyebrows, and you'd have
to think they have some ammo in reserve to fend off the
shorts that will inevitably jump in on this.
Another market "tell" here is the likes of Merrill's Richard
Bernstein being trotted out onto CNBC and trumpeting buying
big cap stocks.
...what better way to coordinate the prop job?
Gasoline is going to be $4 on average nationwide by
Memorial Day. This is a very dangerous gamble here.
Congress is already rumbling about increasing margin
requirements for oil (gee, whodathunkit Goldman?), as
the lower rungs of the working middle class, are
literally having to choose between fuel and food.
Wall Street with New York City's mass transit system,
is out of touch with the heartland where low income
workers will literally no longer be able to pay for
gasoline.
Someone making $9 bucks an hour at WalMart, who commutes
20-30 miles each way to work in the heartland, will face
gasoline expenses becoming 25%+ of their take home pay.
That's a budget allocation that used to be a mortgage,
or the rent payment in America.
Any further gasoline spike is unequivocably going to
guarantee a triple sweep for the Democrats in
November, who will waltz to victories in the House,
the Senate, and the Presidency.
And have no doubt about it, those newly elected will
waste little time in redistributing the wealth reaped
by speculators during the last 8 years.
I think we're going to see one final push for oil,
then the trap door gets pulled.
Don't be surprised to see margin requirements increased,
games with index rebalancing, the Saudi's adding production,
and even an SPR dump, while the US Dollar is propped up,
all in time for the November election.
But, before that happens - Golmdan needs a new herd to
hand the bag off too. They've got a story to sell, and
we'll soon see who's buying it, and who's selling it.
I think you can guess who'll be selling it.
SOTB |
