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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Frank Pembleton who wrote (4087)	11/16/2001 4:57:10 PM
From: Davy Crockett	Respond to of 36161

Hi Frank, Not sure if you have seen this... lifted from John Pitera's thread Message 16666602 Indonesia The September trade surplus fell 6.4% year-over-year to $2.18 billion, as a result of sharp drops in both exports and imports. Indonesian goods heading overseas fell for the sixth consecutive month to $4.32 billion, a 25% on-the-year decrease, while imports sank 38% on the year to $2.14 billion. Unlike in neighboring Malaysia and Singapore, the smaller concentration of electronics in Indonesian exports has protected the economy somewhat from the slowdown in the US. However, the fall in oil and natural gas prices has been a problem, since they combine for more than 20% of total exports, and overseas sales dropped 28% in September. Textiles make up the biggest share of non-oil and gas exports, which fell 24% on the year, and the 0.4% drop in US Q3 GDP suggests that this sector will continue to suffer as Americans cut back on spending. Exports and tourism are the two chief sources of foreign exchange, given the continued outflow of investment capital. Tourism receipts fell a monthly 3.7% in September, and will continue to decline as security concerns increase. This means the government will be even more dependent on foreign loans and aid, especially since Jakarta has failed to raise any significant revenue from the selling or privatization of state-owned assets and enterprises due to delays by vested interests and from political turmoil. Recently the Consultative Group on Indonesia offered $3.14 billion to shore up Jakarta's 2002 budget, however, so far this year the government has received only $2.6 billion of the $4.8 billion pledged by sovereign lenders last year. All of this has caused the rupiah to weaken steadily, just after the battered currency received a considerable boost with the ouster of former President Wahid in July. Unfortunately the rupiah weakness now reflects the economic conditions more than just the political problems. Renewed and sustained currency weakness will again fuel inflation, further limiting monetary policy. October CPI rose 12.5% on an annual basis, which means the government will almost certainly miss its year-end target of 9.3%, especially as it further reduces fuel subsidies to ease its fiscal burden. With ineffective monetary policy and fiscal constraints there seems to be little Jakarta can do but to rely on the "goodwill" of sovereign lenders, who themselves are facing difficult times at home. While the situation is not yet a crisis, the potential for default increases almost daily. http://www.ntrs.com/library/econ_research/weekly/emerge_mrkts/011109.html#Indonesia My reasons for buying based on somewhat on the chart... Message 16670634

To: Frank Pembleton who wrote (4087)	11/16/2001 6:17:22 PM
From: Cogito Ergo Sum	Respond to of 36161

FWIW, Husky rumours keep leaking into my office... Every time I think of Husky I think I should have listened to Zappa. ie. Watch out where the Huskies go, Don't you eat that yellow snow.........LOL......

To: Frank Pembleton who wrote (4087)	11/17/2001 10:10:03 AM
From: russwinter	Read Replies (1) \| Respond to of 36161

I've used Fidelity Select Energy as my OSX surrogate. As I've mentioned in the past, I consider those who hit the bottoms and tops of these trades to be lucky or liars. I happened to get lucky in this instance, hit FSE at the exact bottom at 20, and feed it out at 26-27. My only patch position this weekend is CED (the Rodney Dangerfield of O&G) which is left over (bought @ 29) from my profitable NG play of last year. So I've had pretty good success with this sector, much better than my going on two year buy and hold, wait for the monster home run bet I have on the junior PMs (the most inefficiently priced public trading market on the planet). I think there is a huge secular bull move coming in the patch, but I don't think it starts in the next few weeks. This awful head fake of the last year is really going to cause long term damage to oil production, as producers will be slow to aggressively explore again. For that reason I'm sensing that the initial subsector to play will be those with the goods in the ground more than than OSX, and I'm thinking the mid tiers like CED and AOG, with some smaller names to spice it up: KCH, GAU, maybe PEL. It's maybe just a bit early on the small ones. Tax loss selling? Also oil is being used for geopolitical purposes that have nothing to do with long term supply dynamics (extremely bullish). IMO it is US policy to bolster Russian and Mexican oil production, and become their "best customer", so as to move away from the ME as much as possible. There is no way the US is going to allow Middle Eastern sources to win this game of chicken with Russia, as the later needs to be cultivated. Put Caspian Sea in our vocabulary, this time for real. I may even wander into that historic grave yard for investors, Russian oil companies (with strong western alliances). Any ideas? Therefore, I see the US filling up the SR with premium price off market oil purchases from Russia and Mexico, letting the Saudis sell the world all the cheap oil they want. The Saudis can only sell so much anyway because the tankers and refineries aren't there to take it. As this scenario works out over the next several months, the second great trade (metals being the first with even greater upside) of the next five years will develop, and I'm not talking about 30% head fakes this time. With that backdrop there is a psychological moment to strike again. I don't use TA for this. I gauge other people's sentiment and I'm looking for silence and neglect. Right now too many are looking for the big buying opportunity as if a bell will be rung, and there are those who have been trapped that will sell and shift money off to the latest "hot thing" (apparently tech, gawd!) to get slammed dunked on. What I'm looking for appears like my PM&BM thread does right now: quiet, as all the excitement is gone. In these kind of markets you've got to be IN FRONT OF sentiment shifts. As a result the best opportunity as we go to year end will be PM and base metals. Copper has had a nice turn, and I've hardly heard a beep out of anyone. Energy is still early, but probably too late to sell.