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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: ChanceIs who wrote (130132)4/6/2010 2:18:27 PM
From: ChanceIs6 Recommendations  Read Replies (6) of 206176
 
So let's talk Greece.....and oil.

I attended a trading seminar some time ago that stated that if you had to seek advice - or what other people thought, then you were screwed. Having said that, I want to have a "Greece-fire" discussion.

First let's face the facts. Greece is in a box and it will take a major effort to fix it. This has been kicked around Europe for the last three months (kind of like US Social Security for the last three decades), and this AM it looks like the lid will finally blow off.

What will this do to the price of my oily stocks??

1) The last time Greece was seen to be on fire - a month or so ago - the Euro tanked and there was a big flight to the good old US greenback. It made sense then, and I would expect the same now.

2) Oil is still linked to the buck. Oil should crash this time - just as it did the last time the Greece-fire started.

3) Crude has come a long way, and just had a new breakout. Time for a pullback now?? I don't really think so.

4) The stock market continues to rise - despite the rather sour economic data. Los Angeles talking out-of-cash on May 4th. Should get interesting. I think that the risk appetite has returned and is spilling over into commodities. This would make sense if our economy was healing. But we have had irrational bubbles in the past.

5) US rates are climbing. This usually puts a damper on the party.

6) Crude oil is rising. This usually puts a damper on the party - although it can take 18 months - as it seemed to do in '07-'08.

So I see an oil pull back on the Greece fire. Thoughts anybody??

OBTW: For the conspiracy theorists. Note that the US debt structure is on the short end. The Treasury auctions have been getting really dicey - including this AM's. This tends to put the US borrowing costs through the roof, and makes the US look.....well.....more like Greece and California. This is the day of beggar thy neighbor. Would the US help Greece collapse to cause a run to safety first in the buck and then into that safest vehicle of all - US Treasuries?? It would work to our advantage - at least in the short term. One must first consider how much Greek debt Goldman Sachs holds. It may be thge case that the future of Greece will be decided in Lloyd Blankfein's office as opposed to the Oval Office.
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