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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: PAST who wrote (36641)	9/6/2005 2:33:35 PM
From: Chispas	Respond to of 116555

Thanks ! for some GOOD news for a change !! (eom)

To: PAST who wrote (36641)	9/6/2005 2:40:13 PM
From: PAST	Respond to of 116555

Strange(?) that more of this type of news is not finding its way into general media: September 5, 2005 Tanker cargo transfers back to pre-Katrina levels Gulf tanker lightering specialist SPT reports that Hurricane Katrina caused only a brief interruption to its operations at the height of the storm. Wthin days, all of its vessels were operating at pre-storm utilization levels.There was no physical damage to its fleet nor injury to the crews aboard its vessels. SPT either positioned its vessels outside the hurricane impact area or kept the vessels in ports off the area of the storm, which reduced any potential for impact from the hurricane. SPT is a joint venture of I.M. Skaugen and Teekay Shipping involved in the "ship to ship" transfer of crude oil from VLCC's and ULCC's to vessels capable of entering ports that the larger tankers cannot enter. The only U.S. port that can handle VLCC's and ULCC's is the LOOP (Louisiana Offshore Oil Port). SPT handles about one million barrels oil per day off U.S. waters-- about 11 percent of U.S. seaborne crude-oil imports. SPT has a policy and procedures to limit the impact of hurricanes on its activities in the area and these were followed. In total, SPT estimates it lost very few operating days to Katrina related delays. "For those areas that have been impacted by Katrina, such as the refineries in Louisiana and Mississippi," says a statement from the company, "SPT is currently off loading at alternative ports to be able to meet its customers' needs. Most pipelines are operating now, the LOOP is operational and more refineries are getting back into operation. The reduced capacity in the oil import infrastructure will last for some time and will cause volumes of crude oil to be imported to be lower for some days or weeks, but crude vessels will also be employed as storage vessels. Overall utilization will thus not be impacted to a great extent." marinelog.com

To: PAST who wrote (36641)	9/6/2005 2:53:37 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

The Aftermath of Katrina: What's Behind the Market's "Resiliency"? 9/6/2005 12:15 PM ET By Bernie Schaeffer I have long held that open interest (rather than volume) is the best tool for analyzing option activity as it is a much more stable series and it reflects what option traders are doing "at the end of the day." Large volume could be indicative of transient day-trading activity (which has no impact on open interest) or could reflect traders closing existing positions (so if there is big put volume on a given day this would be interpreted as reflecting bearish sentiment when in fact it reflects the bearish bets being closed out). That said, we are in a different options world than we were just a few years ago, as the primary driver of option trades these days is the seller, not the buyer. So if call activity is being driven by those selling calls against stock and put activity is being driven by those selling naked puts - with each of these strategies reflecting a slightly bullish outlook for the underlying asset - what does a "put/call" ratio mean these days? This almost becomes a question for the philosophers, but in fact there is still a way for practitioners to use the put/call open interest ratios as market indicators, not so much in a sentiment sense as in a structural sense. It is a fact that the open interest put/call ratios for the key indices/exchange-traded funds (ETFs) - S&P Depository Receipts (SPY: sentiment, chart, options) , the Nasdaq-100 Trust (QQQQ: sentiment, chart, options) , the Diamonds Trust (DIA: sentiment, chart, options) , and the S&P 100 Index (OEX - 563.17) - have been high for quite some time. A good example of this is the SPY, on which options began trading this year. The put/call ratio on the SPY has been high pretty much since these options were introduced. Large put open interest in aggregate almost always means large put open interest at the various strike prices at or below the current price of the underlying asset. Because of the dynamics of options hedging, those on the other side of the put selling trade - who've bought the puts from the sellers - hedge their positions by being long stock. If the market declines, they buy more stock to offset the increased value of their puts. Hence there is a built-in "bid" for the market as it declines, and the more the market declines the bigger the bid. Given the huge put open interest at the 120-strike on SPY, is it any coincidence that it has repeatedly bottomed this week as it approached the 120 level (about 1200 on the S&P)? I think not. (The same could be said for the 38 level on QQQQ, at which there are about half a million open front-month puts.) Is there a fly in this ointment, or will the "put support" go on indefinitely? Up to now, the put sellers have behaved very confidently and they have not been hedging their positions as the market declines even though they are exposed to substantial losses if the market truly plunges (think October 1987). But if we get to a tipping point that panics the put sellers, their panic will take the form of closing their positions (which causes the other side of their trade to sell the stock they had bought as a hedge) or shorting stock to cover their increased exposure. In either case, this will add fuel to an already declining market, which will panic more put sellers and so on. The above is why I believe you have to look at this market in probabilistic terms. The high probability situation is what we got this week - the market finds structural support and then continues to grind higher. But the low probability situation is a crash, and this probability, while low in absolute terms, is in my opinion much higher than it's ever been in my history with the market, except perhaps in the summer of 1987. Needless to say, though, the action this week only further reinforces the thinking that this market is "bullet proof." This is unfortunate, as the best you can say is the market these days - due in large part to the structural support I've just been discussing - is able to absorb a higher caliber bullet than it had been in the past. But the downside to this is that 12-gauge shotgun fire will not only bring this market down, it will devastate it - and all the more due to the complacency that has developed as a result of the non-reactions to events like the London bombing and Hurricane Katrina. -Bernie Schaeffer

To: PAST who wrote (36641)	9/6/2005 3:13:21 PM
From: mishedlo	Respond to of 116555

From SonnyPage on the FOOL My wife and I are realtors and associate brokers working in the market north of Atlanta....mostly Roswell and Alpharetta. Our regional affiliate's CEO already had a planned meeting with us for this morning, so the discussion of Katrina and its fallout was unplanned and spontanious. The local affiliate we are associated with has twenty offices and approximately twelve hundred realtors working the greater Atlanta and north Georgia market. Our CEO tried all last week to call his counterpart in New Orleans. Finally got through briefly by cell on Friday. Imagine that you are the CEO of a real estate company in New Orleans before Katrina. One week you have a half dozen offices, several hundred realtors, a thousand plus listings. The next week all of your offices are totally destroyed or badly damaged, you have lost touch with most of your realtors and staff, and your listings, the product that keeps you in business, mostly reduced to rubble. I try to imagine myself in the shoes of a realtor there. Our business is founded upon a network of contacts and knowledge of the local market we have slowly developed over many years. What if we had no choice but to pick up and start from scratch tomorrow in another city? That is not a pleasant prospect at all. Our CEO then told of his conversation with his counterpart in our Baton Rouge affiliate. It was a very different story there. The population of Baton Rouge has doubled almost overnight. One realtor there told of his entire inventory of twelve listings all going under contract on Friday, on that one day alone! Three of those were for all cash. Finally, our CEO offered this insight on our own Atlanta/north Georgia market, and I think that he is exactly right. We have had a balanced market over the past couple of years, that is, neither a sellers' or buyers' market, with modest appreciation. Certainly nothing as dramatic as some of the hot markets have shown. He thinks, and I agree, that the cost of construction materials is about to go through the roof. Either very expensive, or in some cases, just not available. Much of those materials will head for the coast and the rebuild there. That means that new homes' costs will rise dramatically to reflect the shortage of materials. Can the builders pass it on, or, more likely, will this finally slow down the new construction market? That in turn should cause the prices in our resale market to start escalating. Not just here, but throughout the southeast at least. Is he right? It sounds very plausible to me. Finally, a last update on the status of our own evacuees. If you have followed my last three posts, I told how we came to have nine evacuees move into our home. They were my wife's oldest brother's extended family. Their story, at least, has a happy ending. Their homes near Picayune, in southwestern Mississippi, suffered only minor damage. They fled to us to avoid the storm, but stayed because of no power back home. They learned last night that the power has been restored in one of their homes, and the other two should be up and running shortly. Their employers are calling to say come back quickly, we need you. So, four headed back this morning, the rest will be on the road tomorrow. And if you find yourself in Slidell, the "Touch of Italy" restaurant, which is famous in the area, plans to reopen on Friday. North of Lake Pontchartrain is quickly getting back to normal and should be able to help the rest of the region. sonnypage