Oil has gone down every month since July. The last time we had a slide like this was in 2008. Oddly enough, the decline in crude started in July as well. As you well know, back then, it went down, every single fucking month, until March of 2009. Using the same model, while looking at my abacus, I’ve deduced that oil shall drop until March of 2015, around $36 or so–just so that we can conclude the mirror image strategy that seems to be unfolding.
There has to be something MOAR to this story. Dry bulk shipping rates are down 60% over the past month, during a busy time of year. For the love of God, Capesize day rates are now less than Panamax. That’s like a yatch being cheaper than a row boat.
Couple that with the hazardous drop in iron ore and one can make the case we are heading towards GLOBAL RECESSION. None of our data is suggesting this, just market dislocations. However, how else can you explain what is transpiring, from commodities to interest rates to the hair on my chinny-chin-chin? I didn’t think so.
This being the month of December, a glamorous month for investors, historically, we are setting up for a very anti-climatic end to 2014 and it arrests me–seizes me by the nose and kicks me down the stairs. Nonetheless, every single time the market dropped in December (2002, 2005, 2006, 2011, 2012), sans 2008, the market forklifted in January.
As an investor, here ‘s what you need to be asking yourself right now:
Is it worth it? What if there is a giant global recession on the horizon?
Will this lull in stock prices cessate and will the Santa Claus rally commence?
Finally, will the market bounce back in January, providing you with ideal exit points for the shares you are buying today?
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first
first
regards,
Chuck Bennett
Yes, and yes. One word,……plastics!
There really are only 2 possibilities, either the data being put out has been whitewashed to cover up major economic weakness everywhere, or the commodities markets are being heavily manipulated to keep prices artificially low. I’d say the more likely of the 2 is the data is wrong, otherwise major economies would want to start making use of all this cheap coal, oil, copper, and iron that shippers will move to them at a huge loss to try and keep from having to scrap their fleets.
China and Europe are using a lot less oil too I believe.
Oh and Venezuela is really close to defaulting, like post Lehman level… that might have some effects.
It’s like the entirety of the markets just woke up one day this Fall and collectively decided to price in the complete dissolution of the EU.
Looking at the production numbers and the chart of oil, it just seems like somebody with infinite money one day decided to stop holding up oil and instead go short.
My best guess is that the USA data is in fact reliable, but given the global economic slow down, I liken us to the prettiest girl at a mathlete competition (no sexism).
Because of this, the dollar is getting stronger, yields are staying low because foreign countries are buying our treasuries, and the demand for oil and other commodities have totally dropped. Combining this all together is a perfect storm, at least for oil. I say look for American based companies that offer goods or services that have not yet reach foreign markets.
My banks have held up. They should
be getting crushed . No comprende
Anyone else notice Greece fell 10%? China and the Nikkei have been weak too. Are we next?
I will continue loading the truck on my bullshit Vanguard account and ride it to S&P 5000+ while most of you lose sleep and money.
I’ve been saying the market is perilously high since June. Ironically around the time that oil began it’s collapse. I’m not much of an energy man however and missed the short along w/ everyone else unfortunately. http://www.bigskyinvestments.com/blog/bull-market-could-be-topping-out
SHAMELESS PLUG!
C’mon man – both a shameless and bad plug. This was written 6 months ago when markets were 5-6% lower from here (~8% lower from the peak).
are companies still hoarding cash? I am becoming convinced the fed will in fact raise rates, they aren’t joking (they are PhD heavy, no offense to others but academics are very predictable, they are very position-stubborn. Dante’s hell could open up and they would stick to their theory of raising rates), plus cheap commodities, cash, If I was a large business it would be a good time to expand and spend money on cheap goods, transportation. That isn’t a fast moving ship though, but maybe a powerful one if it kicks off. We’ve eviscerated the finances of all the worldwide trouble makers, turns out they rely on oil – huh, taming the possibility of more wars over oil. Whatever happens, its going to be interesting.
I wouldn’t go so far as predict bull or bear next year, but I would predict that there will be some big winners in what unfolds next.
so far under water in BALT I NEED a rowboat !!!
I will hereby offer explanations for the weakenss:
1. Oil is going down because we have mastered cold fusion.
2. BDI is a function of demand for the “bulk” being shipped. Who needs oil when (see #1).
3. Iron Ore is so 17th century.
4. Copper should be free… we have millions of tons worthless copper buried underground (which belongs to T and VZ). It will not be needed in the next 10 years.
5. Cotton – Getting shit on because of all the marijuana and hemp production.
6. Sugar – Destroyed as the fat population capitulates and starts eating salads.
7. The stock market – an UNIMAGINABLE 2% of all time highs. Get your popcorn ready, we are going higher.
I bet the noise about cold fusion scared the crap out of the Saudis. Good point.
oil has so much downward momentum it will probably overshoot to the downside, beyond where it should level out.
So what players are doing well in the current market? I’ve got to know.
the “players” long TLT. Up 21% YTD
The boring-ass, invest like Warren Buffet, low-turnover, tax efficient portfolio types seem to be having a great year.
Just anecdotal, based on guys I know.
Bespoke has a nice chart for you Fly,
http://www.bespokeinvest.com/thinkbig/2014/12/10/energy-sector-crashes.html
Hey Fly – is this guy right??
http://spectator.org/blog/54682/analyst-predicts-another-recession-2014-eventual-failure-dollar
“Maybe” is the answer to all your questions. Hope this helps!