Issue forth and spay them. Let none go unpunished. Into the close, their cheerful demands of sugar will be met on the receiving end of a sharp instrument, piercing their naked breast.

ERY going green for the day.

Commodities and idiot, untalented hedge fund managers over allotted to them being pushed to the point of desperation.

Kill them all, until Bernanke is forced to intervene in two weeks.

Two…LONG…weeks…

Well well well well well…

My targets for ERY are $16-17.

My targets for SCO are $48-50.

My targets for TVIX are $18-20.

I’ll be buying a round of SLV or AGQ (hat tip to Chivo) when spot silver gets below $27.

I’ll follow up with a purchase of real physical silver when the $EURUSD gets close to last year’s lows – around 1.26-1.27; somewhere in there.

Around the same time, I VOW ON ALL THAT IS HOLY AND SACRED TO LIGHTEN UP THIS GOD FORSAKEN SHORT OF ENERGY, WHICH OH SO NEARLY CLAIMED THE LAST OF MY SANITY.

Merry Maymass,

Cain Hammond Thaler

Cameco announced yesterday that they are going through with plans to acquire Nukem Energy for $136 million, plus taking on Nukem’s outstanding debt of another $164 million – which is expected to be reduced by current cash flow before the deal closes towards the end of this year.

I’m still not sure what I make of this. But here are the basics.

Right now, there are two primary sources of uranium, if you are running a reactor. You can get it through the miners, or you can get it through old, decaying empires like Russia, which are decommissioning some of their nuclear warheads.

Places like Russia take the Highly Enriched Uranium (HEU), and mark it for use in reactors; I’m not sure if they physically do anything to the uranium to “de-weaponize” it, or if they just keep very close watch on where it goes. Nukem Energy brings together these parties and brokers sales.

Now, the uranium space has already been getting pretty excited, because Russia (which for obvious reasons has been the largest supplier of the ex-military grade fuel) is set to stop decommissioning warheads sometime soon. There was already a good expectation that companies like Cameco would see the fruits of that development as a key source of fuel goes offline, leaving more reactors than fuel to run them.

So I’m confused why Cameco is busy dishing out a few hundred million to acquire the brokerage that has been making revenue from deals that are about to decrease in volume substantially. This confuses me.

But on the flip side of that, Cameco is now increasingly in charge of uranium globally. If you’re looking for fuel, you’re probably doing business with them. They just recently broke into US markets. They are busy expanding their production targets by 70% by 2020. And now, they control one of the primary sources for acquiring uranium at market that doesn’t involve working with a miner.

What will happen from here? Will Cameco keep Nukem Energy up and running as the business is? Will they jack up spreads for brokering deals, helping push uranium prices higher? Or will they just scuttle the brokerage and force the system to deal with the inevitability of HEU becoming unavailable – but right now, months or years before anyone was planning?

Miraculously, the Fed did not change their tune at all…again. Nor did they speculate in any way, shape or form about enacting further easing anytime within the immediate vicinity of “now”.

Not that that will stop the rumors of further intervention in the slightest. It’s been quiet since the FOMC announcement, but I’ll give it another hour before the die hards are running back through the streets, throwing flaming garbage at people’s doorstep.

More importantly for me, oil corrected hard this morning and has been bouncing around a slight selloff, thanks to a mingling of two developments.

The first was all estimates of oil supplies getting lit up like a Kuwait field at the hands of Hussein, as a 4 million inventory build come through the line. That makes a 22 million barrel build of inventory in the last month.

The second is a report that Iran’s envoy is Moscow has been saying Iran would be willing to hit the brakes on the nuclear program to stop the EU from putting the embargo in place. With regards to this, I doubt it. I’m sure the envoy did say that, but the instant it comes time for the Iranian clerics to actually come to the table, they definitely will back out. They built a regime on appearing in a position of total power. How would that look, if “God’s servants” got forced into submission by “the evil ones”?

Still, there was never going to be a war with Iran. Maybe at best a decimation of Iran masquerading as a war, Iraq and Afghanistan style. One where America loses a few thousand people, pisses away a few billion of borrowed money, and generally crushes their entire civilization. That’s not a secret, so the Iranians aren’t going to do shit, and we know it.

Basically, oil markets are moments (in market time, naturally) away from massive implosion. Risk premium from a supply disruption is far overpriced, and thanks to manufacturing slowing across the entire planet, our inventories continue to swell excessively.

When this realization finally dawns on the crowd, the kinds of estimates for oil prices being ventured by Goldman Sachs and Friends are going to be a distant joke. Of course, $GS will have unloaded plenty of their own stock on Gonzo by then.

Okay, I’m not going to talk about the market at all today. You know my position; if you still have doubts or generally think I’m an idiot, that’s fine. I don’t care. You need only look at last year – or the year before that- or the year before that…if you want to know what is going to be happening over the next few months.

You cannot inflate away these problems. If you believe oil can sustain $110 price levels with no impact to THIS ECONOMY, then it’s your neck. Besides, how does buying oil or oil companies help you? Who are you going to sell oil to at these prices, besides other finance guys?

What happens to oil companies when $110-120 oil crushes demand, and they find themselves with production utilization 20-30% too high? Last I checked, profits are made from volume as a product of price – not just price, assholes.

No, rather than talking about the same shit all over again, I want to ask a simple question about electric vehicles, since they seem to be all the rage today. GE is marking its future on getting tens of thousands of its employees into a GM Volt (everything Immelt touches turns to shit. Remember that).

Sweet, we have no need to burn all that polluting gasoline now. Instead, we’re going to just take our energy from where it comes naturally – wall sockets.

So we plug these fucking cars into our very cheap “energy wells” supplied in each of our homes. That outlet of course is connected to 70 miles of grid touting all sorts of resistance (if that means nothing to you, you have no business discussing energy policy), which is hooked up to a super clean all natural windmill, of course…oh, right, no, it’s hooked up to a fucking coal plant.

How is this cleaner than just burning the gas right in the car? You get the equivalent energy output of burning the gas in a power plant that’s an hour away from you, minus all the energy loss that occurs from trying to push electrons through a thousand miles of wire.

But here’s my real question of the day: we’re making a push for EV vehicles (again). So what happens to the cost of electricity when we all plug these fucking disaster-on-wheels into the grid?

(For the record, @gapandyap had a hilarious series of posts on Twitter last night, mocking everything about the Volt, which are worth tracking down. The windmill comments shitting on the laws of thermodynamics were my favorites)

Yesterday, a most wonderful thing happened. For the first time since environmentalists initially lost their nerves with nuclear fuel, more than thirty years ago, a new nuclear power plant has been approved for construction right here in the U.S.

A new nuclear power plant is being constructed less than one year after the most high profile nuclear disaster since Chernobyl, or 3 Mile Island.

Already, the naysayers are out in force. I don’t blame them, as personally I was never interested in nuclear power until very recently when I started hearing that portion of the crowd (you know the ones) saying nuclear energy production would somehow cease to exist.

But whether or not this ushers in a nuclear renascence is irrelevant. Where we are, as a planet, is to acknowledge that nuclear energy is simply not going away. It will have a place in the future, alternative options notwithstanding.

Also, remember that much of the cost associated with building nuclear energy is legal and circumscribed in nature. Having a project deadlocked for decades while costs of filings and lobbying and assessments pile up certainly effects the end cost of the energy. How does the cost of building a plant, free from having a hundred different activist groups shoving lawsuits your way, compare with building one otherwise?

What does the cost look like when the government isn’t impeding the entire length of the process?

Besides, energy diversification is important. Sure coal and natural gas look like tantalizing and superior alternatives now. But what about when the push to design systems that use those energy sources goes into effect? I don’t believe costs will stay low, especially if you start to see natural gas power plants popping up around the country. And especially not if Obama follows through with his natural gas marketing and actually tries to take it somewhere…

More importantly then: (1) nuclear power is not dead AND (2) the supply constraints for uranium very much present before Fukashima Daichi will persist.

And accordingly, CCJ will soon see its day in the sun.