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

To: whitepine who wrote (128121)	1/31/2010 10:43:35 AM
From: ChanceIs	5 Recommendations Read Replies (3) \| Respond to of 206116

>>>...where did the rapacious 'speculators' go?..<<< I am undone. You quoted me from '08. Thanks. Now to the point - and you how I like to whine: 1) I sat in a conference last summer where a former attorney - now consultant - to the CFTC stated that Gensler was more or less being forced by politics to place trading/position limits. The guy presented about 10 different studies, all of which indicated that "speculation" - or should I say EXCESS SPECULATION - didn't cause the price spike. His call on the politics was that Gensler would do it. His call on the economics was that it would do more harm than good. Indeed it seems that CFTC has its own doubts per the Sieminski Slide #27 as referenced in paragraph #2 immediately below: 2) Last fall I attended a presentation given by Adam Sieminski - noted Deutsche Bank energy analyst. He said the same thing ... speculation didn't cause the spike. He went on to show a nice slide plotting the crude price in dollars and Euro, and said, 'in Europe there was no price spike.' See Slide #13 and Slide #30 on oil price - dollar strength correlations. (See the Oct 16 "Who's to Blame...." here: ncac-usaee.org ) 3) Why is oil crashing today??? Nobody knows. Buuuutttttt. I think that it has Greece all over it. Meaning that the Euro currencies are teetering with the Hellenic republic, and we have the ugly baby contest of fall 2008 all over again. Yes, Bernanke and the Congressional deficit are trashing the venerable old Greenback, but Hugo, the PIIGS and it seems all other nations are trashing theirs at a faster rate. People are running to the relative safety of the buck - the US is losing the ugly baby contest. Well .... the Chinese are nudging their rates upward so they aren't shamelessly debauching their coin. But that in turn is leading to a stronger dollar under the panic that Bernanke will have to match the Chinese rate increase and strengthen the buck. Did anybody fail to notice that US T-Bill rates went negative on Friday!!!!!! I think that says it all - and its Greece and flight to dollars. But we will have a have higher rates and a stronger dollar/lower oil. Remember crude crashed in the fall of '08. I see a lot of the same dynamics in play. Oh. And if we are talking speculators, lets talk Bernanke a little. In the '80s S&L crisis, we had ... "a rolling loan gathers no loss." We started this crisis with ... "extend and pretend," but we have moved into the less sanguine .."delay and pray." I see Bernanke printing all of these dollars and speculating on a bull market in mortgage backed securities (MBS). I mean ... the guy bought $1.25 trillion of them. I sure hope that he thinks that the price will go up. I mean ... that is why he paid par ($1.00) for paper we all know is worth about $0.60 - and that was before housing found a bottom, which it hadn't, hasn't, and won't for about another three years - not to mention that the default rate over at Fannie/Freddie seems to hit a record high every month. So ... ummmmm ... like Ben ..... like .... you are so smart ... did you do a NPV on those MBS? What was the discount rate you used? What other comparable investment vehicles did you consider? What is the FED's Internal Rate of Return. Inquiring minds want to know. Memo to President Obama: Have you noticed that your FED Chair has about cornered the market on the MBS ..... as in he holds about 90% of them. Have you ever considered putting position limits on that idiot??? Maybe have Gensler look into that before he messes up the oil markets.