Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: Bosco who wrote (11410)	2/21/2001 10:12:25 AM
From: Jdaasoc	Read Replies (1) \| Respond to of 30051

Bosco: I don't like the feel of the market today. I track about 90 large cap tech stocks and 19 of the are hitting 52 W lows. You know the names of most of them. The semi's seem to be having real positive bounce from new 52W low. I just can't see how they will hold gains if this is not the real bottom. john

To: Bosco who wrote (11410)	2/21/2001 4:17:14 PM
From: Logain Ablar	Read Replies (2) \| Respond to of 30051

Hi Bosco: The quick version On the California energy crisis there is not much the Federal government can do without over stepping the States authority. Lets not forget the state helped create the issue & I’m not a fan of all US tax payers $$’s bailing the state out. The main issue is the increasing demand and decreasing or limited supply. This problem took years to develop and will not be cured over night. I expect a bad summer unless the weather is cool on the west coast. How do you fix the problem. Well no matter what there is going to be a $$ cost involved. But the steps should be: 1) Determine the power needs now and estimate for the next 10 years. 2) Add generation facilities to cover this summers short fall. Diesel or gas. 3) Set up or ensure one agency has expedited permit review (for all permits). Set time limit for approval. 20 days is ample. 4) Start building the plants or have new dams with electric generation. The fed can help with bonding here. That’s just a start. I know the state is already trying to curtail payments to suppliers so I’m sure the mess will continue. As a business person I know I wouldn’t want to sell a product and not be paid the contracted price upon completion. I’m sure you also wouldn’t want to work and then not be paid. The current state administration will not take the hard steps to ensure the problem is really solved since that would require higher costs to the voters, hurt business profits and anger the environmentists. I think the short-term problem could be solved in a year or so but long term to be environmental friendly hydro generation is the best solution. I believe this means outside of CA. Some fish may not agree but the alternative is high cost and business / population migration out of the state. You’ll see the business go first and the tax $$ decreases will create budget issues where services are cut or taxes raised. As for the oil and gas shortage. The answer is simple. Just about 3 years ago when oil hit $10 and ng broke below $2 the country was in its boom period. Of course if you were in the oil and gas industry you were in a severe recession. In these recessions the companies cut back. Rigs go into moth ball and employees are laid off. Of course the laid off employees found employment in a different field. So supply started to dry up. At the same time due to environmental reason 98% of new power plants are natural gas fired (GE turbines) so demand is picking up. When oil and gas started to recover one, the companies held off new drilling waiting to make sure the recovery was real and two when they did start to expand they could not gear up fast with the lack of skilled labor. Also contributing to the issue is new wells drilled are not producing as much product. So demand continues to increase and supply has not caught up. I doubt it will catch up for this summer but maybe by next year. For oil we’ll we have an auto industry where the high margin vehicles are the high gas guzzlers so we still see demand increases here. Also you know about the OPEC cartel on the supply side. We also have environmentalist hindering the drilling efforts (Alaska, Florida & the Atlantic coast) so we continue to import more. The reason for the drop to $10 was the asian currency crisis where the various economies went into recessions and demand (usage) dried up. We’ll that came back but if we hit a recession the world economy will slow again and oil will drop. Of course not if OPEC can hold their production in line with demand. There is more to the above issues than I posted so good luck. Tim

To: Bosco who wrote (11410)	2/22/2001 4:52:39 PM
From: John Curtis	Read Replies (1) \| Respond to of 30051

Bosco: I still don't understand how the energy shortage [oil & especially gas, and electricity is largely a derivative of the latter] has come about. !!!?! Supply and demand baby. Supply and demand. Something Californians failed miserably at projecting. First, lay out a chart (ten years ago) of then current and projected population/business influx and the associated demand for kilowatts. That chart was, and still is, soaring through the roof. Then overlay on top of it a chart of the projected expansion of generation capacity. This chart looks like a flat-line in the critical ward of my local hospital. My laymans definition of that gap between demand and supply is.......divergence. I know when playing the market TA game that when I come across a divergence in the fundamentals of an equity it can mean either good things, or bad, depending on what's driving said fundamentals. It CA's case anyone who would have read that chart could only have interpreted it as bad. MUY MALO as a matter of fact. And now....all their legislative NIMBY, "hey we don't care WHAT it costs to produce we'll only allow you to charge X," attitudes are coming home to roost. The results will be with all of us for years me thinks, and will probably ripple out into other states (I've seen articles where experts express similar worries for such as the NYC metro area--as one example). Especially since there's not really any such thing as a quick fix to power generation problems. And if the environmental messes they've been dealing with remain the same or worsen.....well....has there ever been a time in California history when the percentage exiting the state exceeded that entering?? John~