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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: isopatch who wrote (25206)	11/30/2001 12:40:56 PM
From: Paul Shread	Respond to of 52237

Iso, Looks like the USD might have turned around the .618 retrace level off the top. And yup, I got my yellow metals, my biggest position yet, and a nice week in them too. That COT report had me pounding the table too. Will be checking it again tonight. Best, Paul

To: isopatch who wrote (25206)	11/30/2001 12:41:26 PM
From: bruceleroy1_-	Read Replies (1) \| Respond to of 52237

how much do you see gold rallying?

To: isopatch who wrote (25206)	11/30/2001 2:03:37 PM
From: isopatch	Read Replies (3) \| Respond to of 52237

Important Article. Why the "Russian Card" is our Ace vs OPEC (courtesy of SI member Frank Pembleton) Message 16725763 <Lean Russia Fights OPEC And Minions By James Fenkner When Russia failed to offer meaningful cuts, as it did last week (and is likely to do again), it was branded as a spoiler, merely carrying on the ruinous traditions of Soviet-era brinkmanship. This view is leading public opinion down the wrong path. In fact, Russia is practicing what the West grew hoarse in preaching: grow wealthy by maximizing profits, not manipulating prices. It is a rich irony that Russia is now a paragon of competitive oil capitalism, while OPEC and its minions, Norway and Mexico, plod along with socialist-style oil production and a lack of fiscal prudence. Russia's oil industry has grown a long way from its Soviet roots. It is no longer an industry dominated by production quotas and political patronage. During the 1990s, it was transformed by rapid, if not wild, privatization and restructuring. In sharp contrast to the Soviet period, when all oil was the state's, 93 percent of Russia's current 345 million tons per year is produced privately. Like capitalists everywhere, these private owners are motivated to maximize profits. As Russia cannot dictate oil prices, this means reducing costs and raising efficiency. The 1998 ruble devaluation helped cut some costs, which was a windfall, but Russia's capitalists have not been sitting on their hands either. Yukos, for one, cut 20,000 jobs, or 20 percent of its total workforce between 1998 to 2001. Russia's oil majors are among the most efficient private oil companies in the world. The four Russian majors, which are almost entirely in private hands, Yukos, LUKoil, Sibneft and Surgutneftegaz, break even at $8 to $10 per barrel of Urals blend. In contrast, the two Russian majors not yet fully privatized, Rosneft and Slavneft, have the highest break-even prices, at between $11 and $12 per barrel of Urals. Competitive capitalism drives these Russian companies to increase production. Total Russian production is expected to shoot up by 5 percent in 2002. To finance such expansion, oil companies are more and more looking to domestic and foreign capital markets, and the Russian oil sector is starting to look like a true capitalist success story. OPEC's, Mexico's and Norway's upstream oil industries are primarily government owned. State control may have some advantages, but efficiency is not one of them. A state owner is distracted from efficiency by such extraneous incentives as employment, subcontracts or similar subsidies necessary to maintain political patronage. These motives cause state-owned companies to maximize costs relative to revenues. In such a case, it is better to dictate the world oil price than to accept the price set by the market. Hence the desire of Mexico's state-run PEMEX and Norway's state-run Statoil that the OPEC cartel succeed in dictating world prices. Without a strong constituency of private owners, OPEC members' budgets go largely unchecked, become inflexible and growth slows. Saudi Arabia, OPEC's largest and most efficient member, fails to balance its budget whenever oil prices average less than $20 per barrel. According to the Petroleum Finance Corporation, OPEC countries can weather prices averaging $23 per barrel or so for around a year before having to borrow in order to make up budget deficits. Unlike OPEC, Russia has a new constituency focused on increased oil production and profits rather than on perpetuating government largess. We see enough flexibility in the Russian budget for it to be met at $15 per barrel (if not lower) in 2002, and for the government to fully repay its $13.55 billion in debts. Thanks to the incentives of private property, Russia has had stronger and faster growth than OPEC, Mexico or even Norway. No wonder they want Russia to reduce production. It is hard to compete against an efficient capitalist.> James Fenkner is strategist at Troika Dialog. themoscowtimes.com