As the market gets lit up like a roman candle, my largest position, WNR, is up and my TZA is running without shoes. My TZA calls are ridiculous, now +150% inside of a short week, so pardon me if I seem somewhat lackadaisical in my blogging efforts. While it’s true, my TBT position isn’t fairing too well. It’s also true, it was never a big one to begin with. I was sort of moonlighting with it, a dart in the dark, the proverbial walk through the sand littered with bouncing Betty landmines.
With regards to the refiners, this is all you need to know. Crack spreads are higher today, now above $35, and the WTI-Brent crude spread is at all time highs ($28.) Okay? So as the world burns, the underlying fundies for WNR have never been better.
My question to you is this: once trading gets back to normal and asset (asshat) managers look for places to park cash, where do you think they will put it, with regards to the energy sector?
Exactly.
I never besmirch my fellow investor for trading the tape in front of him. However, you can’t go around acting like you have a dogs brain either. For once, why don’t you get ahead of the curve and quit picking up the scraps?
Having said that, I will be closing out my TZA position today. I made a great deal of money in it for my personal/aggressive account and will start to scour the market for longs. With the Swiss Franc getting obliterated, thanks to the peg, I’d avoid gold as if it were the Black Death itself. It is entirely plausible to see the seemingly “risk off” assets targeted by the power elite, in order to funnel people back into stocks. Do not be fooled by price action. There is a bubble in non-risk assets, enveloping treasuries, gilts, bunds, francs, utility stocks and gold.
At the present, I still hold over 60% cash.
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Some stocks are holding up pretty well!
Ummm…what’s not to like? Reversal in GLD and TBT. WNR leadership?
WNR and CVI are holding up!
BK, i like it.
manipulation is the ONLY thing that will drive this market back up. it’s a total and complete sham..look for buys somebody says. The wheels are coming off the world in everyway but the stock market rallies back up unabated like it’s 1999. Fuking absurd.
Maybe the wheels are still on there….
I’ll get you too.
Well said sir.
>>…the WTI-Brent crude spread is at all time highs of $28…<<
How is this sustainable?
Do some research and quit asking for handouts (no bud fox).
I was asking a rhetorical question.
It isn’t.
Until there are structural changes like increased refinery through-put or new sources of sweet light crude, then you are wrong. It is sustainable.
Do some research involving additional oil flow from the Bakken & Alberta, Cushing, PADD II, and the Keystone pipeline, and you will see that it is in fact sustainable… until a pipeline is constructed, or one is reversed, to carry WTI to the Gulf. Only then will the spread be arbed out. The physical properties of commodities make them a bit different and “logical thought” doesn’t always apply
There are two time frames here and two different causes for the spread. I agree that there are physical structural reasons that explain some of this, but those will go away in several years and thus one can’t “put a multiple” on the short-term profit enhancements they may be causing; rather, one should simply treat those temporary “extra profits” as cash on the balance sheet by adding them up and discounting them back to today. (And this isn’t a specific knock on WNR because I haven’t studied the company and have no position there. For all I know it may be undervalued via this methodology.)
However, in the short term I think that Brent will come down substantially purely based on reduced European and Asian demand, in that right now it’s just being popped up by unsustainable speculative trading. This is what I think will close the spread substantially and relatively quickly.
WTI demand will fall harder.
It is and you have no research to back up your fallacious claims.
Interesting that they basically cracked one of the main one today in sticking a floor on the Swiss.
By the way, it’s not a peg. It’s a floor. A peg is a floor and ceiling and as far as they are concerned the swiss can weaken as much as it likes.
I wonder if this pushes people to risk assets, keeping in mind that the moronic ECB may materially cut rates this week.
The first para should be in block quotes.
Seems to be a bit of a bid today. Not over yet but suprising.
Pro Surfers in Fly’s neck of the woods today for the first time ever. The scrub that wins gets $500,000 if you can believe it
http://quiksilverpro.com/live.en.html
Looks cold.
Do the surfers need a tetanus shot before going in that water?
cocaine will suffice
That beach is a lot cleaner than it was when I was a kid.
Not so much schit floating in from Joisey anymore.
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Only if Bill Oreilly took a dump last night
^^ $300,000 correction
fly you are being a bit to bearish in the short term..
bonds are coming down and gold has reversed lower..
we rally soon
I am not being too bearish. I said I was looking to buy.
This isn’t a market that seems to want to go down. The banks are holding in here which is where all the downside focus is. The other point to make is that the the pressure coming from the Swiss franc appreciation is has been taken off and to my mind this is a safety trade that the market used that has been taken off the table.
The question now is when risk on trades look okay and perhaps buying the Aussie at some stage when all this settles down may look like a decent bet.
I am noticing for the first time in months (if not years) that as the Euro falls the Q’s (NAZ 100)go up (lead by AAPL).
Really?
If there’s a correlation I wonder why? Good catch.
I wish there was a alog that caught all these weird correlations as they would be worth a fortune. That’s what Renaissance does I guess.
Very strange.
Watch the Euro and as it ticks down the NAZ via QQQ goes up.
Selling is exhausted?
Or more probably a signal Euro is about to do an intra day reversal and the big $$ know it.
I guess we got our answer.
The big $$ always know.
$USD index keeeps banging its head on $76, but can’t seem to bust through.
In fact, the high is $75.999
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Well done sir. Well done
“When the Fly implores you to get in ahead of the masses, dont ask why, instead decide whos margin call will you buy pennies on the dollar”
-Richard Cheney, Sept 2001
Wow, what a gigantic douchebag you are.
Show some respect or GTFO. Some of us had friends who died in those towers, asshole.
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God Bless
Meanwhile merger Monday/Tuesday
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Enlarge image International Paper to Buy Temple-Inland
The Temple-Inland Inc. logo is displayed on a sign at the entrance to one of the company’s facilities. Source: Temple Inland Inc. via Bloomberg
Enlarge image International Paper to Buy Temple-Inland for $3.7 Billion
International Paper Co., the largest pulp and paper maker, agreed to acquire Temple-Inland Inc. after raising its offer to $3.7 billion, ending a three-month battle for control of the shipping-box manufacturer. Source: International Paper via Bloomberg
International Paper Co. (IP), the largest pulp and paper maker, agreed to acquire Temple-Inland Inc. (TIN) after raising its offer to $3.7 billion, ending a three-month battle for control of the shipping-box manufacturer.
Kind of auld news.
But there will be more… there’s just too much cash on BS’s for it to be over.
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Does FTK work down here?
Fracking and the Marcellus region are getting heavy negative publicity now. Apparently someone dipped their toe under the rocks and performed Al Gore style math to say there’s trillions of bcf of natty that may not actually be there.
(laughter) nice Hmmm.
You should talk with Po. He had an idea the other day of how to profit from this, but I haven’t had time to dig into it.
You guys might be able to work something out. I’d be happy to trumpet the idea of I think it’s worth an attempt.
Nice. Thanks for the info.
I found what you were talking about and briefly read over that report. I don’t really see the risk that Po was suggesting could happen right now. Yes the reserves may be overestimated but they are based on statistical models which have their faults and advantages depending on confidence intervals, deviations, assumptions, etc. I don’t know how admissible or valid they are in court since they are not fact and are theoretical based upon assumptions. There would have to be some massive deviation in one company’s methods to assert fraud.
Also, it seems the companies set up bankruptcy remote SPEs to house the assets and liabilities of projects and use future cash flows as the collateral. I don’t think there’s a tradable catalyst at present because reserves have been proven but the amount is not verifiable. If the rock was completely dry that would be a different story but at this point you can determine some kind of DCF model with ranges, but zero shouldn’t be the lower bound. Marcellus is also but one shale region in the natty boom, and it’s oddly the only one that gets the spotlight.
I am however impressed by the power that anti-fracking campaigns have gained through awareness in the media. I mean I’ve been to parties where the standard layperson has talked about it in the complete environmental zealot sense. It’s one of those industries I check up on every once in a while, but I am avoiding for now.
Fracking causes Earthquakes.
Only on Battlestar Galactica.
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Eur/USD below 1.4000 even with the Stupid Swiss..
booyah shadizzles
On a longish scale, I think paper currencies are the bubble (as opposed to gold/silver). YMMV.