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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: excardog who wrote (2340)	6/24/2001 11:21:59 PM
From: Darth Trader	Respond to of 206184

"don't fight the fed" is what they say. I think when midterm resis is taken out at 2300, 3000 will follow soon after. BWDIK

To: excardog who wrote (2340)	6/24/2001 11:36:48 PM
From: chowder	Read Replies (4) \| Respond to of 206184

Let me begin by saying I think the article posted by the Commander is flashing a big, big yellow light. The article infers that rigs are pumping all out with no slowdown in sight. With NG prices at current levels, I expect they are. Right into the face of slowing demand, I might add. Isn't this what OPEC did a couple of years ago? We're focusing on OPEC's resolve and we aren't even looking at what we may be doing to ourselves. In a recent post Quehubo mentioned; in a recent O&G Journal article, the EIA estimated electric utility demand for gas fell 16% during January-May from year-ago levels, as electric utilities turned to other fuels because of high gas prices. Mild weather also held gas and power demand down. Demand down 16 percent? Lehman Brothers says NG demand has shifted by as much as 6-7 BCFD, due to massive fuel switching. In addition to the decreased demand for NG, we continue to drill for NG at a record pace. Increase supply via lower demand, where does this go? Then the article posted by Commander goes on to say, >> Despite the surging demand for onshore rigs, ``offshore rig demand is taking a breather,'' due to operators reassessing drilling plans or seeking authorization for increased budget funds, according to Salomon Smith Barney. << Offshore rig demand taking a breather? And we have an energy crisis? Call me nuts, but this doesn't look bullish to me. The only hope we have going forward is that demand picks up in a hurry and it picks up big time. But how does demand pick up in an economy that is slowing down? Greenspan is on record as saying the economy depends on the consumer. A consumer who is holding record levels of debt and must increase that debt even more if the economy is to have a soft landing going forward. According to the American Bankruptcy Institute, the second- highest number of bankruptcies occurred during the first three months of this year. The average amount of debt per household is 14.29% of disposable income. The percentage of credit card loans considered delinquent, as well as the number of Americans behind on mortgage payments, at the end of last year, hit their highest level since 1992, according to the Federal Reserve and the Mortgage Bankers Association. Does any of the above indicate that we can count on the consumer to increase their spending? If not, what happens to the demand for energy? And what about the funds? How high does the OSX and XNG go without institutional money? The funds are selling energy! They are rotating to interest sensitive sectors like financials and consumer cyclicals. This indicates to me that the economic cycle is moving along and it means we've seen the best the energy sector has had to offer. I'll trade a NBR and maybe an ESV from here, but that's all it'll be; a trade. The longer it takes for NG to drop under $3.50, the more it'll confirm this cycle is over. We can't continue to drill at record numbers, increasing supply, while demand is falling. We've already seen what happened when OPEC did that a couple of years ago. Just my humble thoughts. dabum

To: excardog who wrote (2340)	6/25/2001 12:20:51 AM
From: jim_p	Respond to of 206184

Scott, It will take a lot more than 6 rate cuts to turn this economy around. The consumer is just now starting to slow spending in the US. The US markets are just now beginning to realize we aren't going to have a recovery in 2001. Europe and Asia are just now starting to enter an economic slow down. It will ultimately take a strong improvement in the US economy to pull Europe and Asia out of recession once they fall into one. The Tech Bubble burst was huge buy any historic standard. We are not about to do a 180 a little over a year later. Japan is still struggling from it's bubble today and the tech bubble was worse than Japan. The economy and the stimulus needed for recovery will be far more than the Asian crisis of 97, the S & L crisis of the mid 80's or the 79 recession caused by the last oil crisis. We still have real interest rates above 2%. Before it's all over I'll bet we end up with negative interest rates in the US as we did in 79 and 93 (yes this will be good for the gold bugs). I think it's time to step back and take a hard look at the big picture. There is nothing on the horizon that is bullish for energy stocks. Even if my some miracle we turn the economy around in the first half of 2002, we then will need to turn the rest of the worlds economies around as well. The current bear market for oil stocks we have entered (if you still doubt that, take a hard look at your oil and gas stocks) could be over by then, but is a long time from now under the best scenario. It's not just the NG and oil builds that is driving this market. Perception of the US and the world economies is changing fast, and none of it is bullish for energy. Jim