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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: epicure who wrote (3890)	1/13/1999 3:57:00 PM
From: James F. Hopkins	Read Replies (1) \| Respond to of 99985

X; Some of the better companies will make it, if they haven't taken on a lot of debt, I don't look for this to be as bad as the last oil glut, I give them credit for having learned something. But profits are tied to that rig count number, and the margin of profit gets hurt real bad when you tie up 20% of the fleet, it even gets hard to make the bank notes. All that bad news is put on the back burner for as long as they can keep it there, as they see the writing on the wall and rat hole money in all kinds of ways. I don't want to say how much crooked stuff I saw, but they can make racketeers take a back seat with the sweetheart deals they can come up with until the last shoe drops. If the Rig count is going negative there is no amount of wishing their way out, and they know that, so it's bleed off as much as you can before the bill collectors get wise. -------------- The sector is very cyclical, and remember when it goes up, it gets extremely over bought..a mania sets in like you now have with internuts, momentum buyers push those stocks up beyond what even the insiders could dream of, banks break their necks and run all over one another trying to lend them money. ( bankers will lend you their personal rain coat when the sun is shining, but come even the hint of a cloud they want it back ). ---------- Any way just be careful I work the field and have friends in it, and me nor them knows were the bottom is, so I can't really say, every one hopes it's here, but most of them are worried. If they didn't get so carried away borrowing money during the rush, it wouldn't be so bad. Really the banks will carry them on the books for a long time , or as long as they can, in hopes they don't have to re-possess stuff they know won't bring half of what they lent on it. AS long as they have that stuff on their books then it don't look so bad for the banks, man if they have to write down loans then that bleeds over into the rest of the economy, -------------- A last ditch stand comes when they start making privet placements and creating "new" company's out of the old ones, to get a cash infusion, they have a lot of trick cards they can use, and want to hang onto their jobs as long as they can. ------------- Things like BIG rigs may look like an asset, but can become a liability if you have to tie it up for long, heck just stacking and maintain them can cost a lot of money. It cost money to park them babies, along with towing fees, and all that good stuff. I had my own boat , paid for with no bills when the last glut hit, the chapter11 guys who could work and not have to pay their bills took me down with them, as they would work at any day rate at all, and the banks were over the barrel to keep them working, so they didn't even have to pay for repairs. Some how Tide Water Marine survived, but I don't think they were puplic at the time. I sold my boat a year to late and only got a song for it. ----------- I doubt I live to see it but I sure would love to see the government get serious and developed and support solar power. I think we have the ability but the Big oils have their foot on the throat of any real moves to advance that area in behalf of the peons. ---------- Capitalism would be fine if it wasn't so full of corruption. If I was to get started on just how bad the big oils have ripped off Nigeria, I could go on and on, particularly RD. Do you remember several years ago when we went into Semolia to feed the hungry people ? ( poke a stick in the ground there and you come up with oil,) the truth is we didn't want them to have the say so on who they would sell it to, or at what price. O it wasn't really us we were just the agents for the big oil Companies. And they are owned and managed along with most of the big banks by the fraternaty of the New World Order I wonder how many people noticed that our ambassador did not stay at the embassy but took up residence the nice clean and untouched head quarters of a major oil company. <G> ----------- Jim