Oil Market Implosion Like Clockwork

If there’s one thing you can count on lately, it’s for the oil market to make exactly the wrong decision going into summer. It’s almost a joke, really. To whichever analysts are sitting at office right now, prepping that liability report explaining why they loaded up on oil contracts going into the summer for the third year in a row, I have the following advice.

For the moment, just carve out any data sets you may have from before 2009. They aren’t worth the bits they’re stored on.

The entire move testing $100 has been shut down. The only remaining question is, do we hit $88, $85, or $79?

The worst hedge of all time, SCO, came through for me after all.

In other news, one of the Greek political parties has decided to nix the union that has held the country together with a government body. This is of course impeccable timing on the part of the Greeks, as there just wasn’t anything else we may have been worried about at this exact moment.

Today, I will be enjoying a fine chicken breast seasoned with fresh thyme from my garden, set out on the veranda, to celebrate the unstemming slaughter.

China pushed tonight to throw 50 billion yuan into their markets. 50 billion yuan is $8 billion. Does SHIBOR look like an $8 billion problem to you?

Looks like a little bit bigger of an issue than that.

Reports that China had credit issues have been disseminating for years. The background here is that China stemmed credit to get costs under control, but in doing so many of their corporations were going under, unable to obtain financing. That’s the funny thing about statists – when credit dries up, only the well connected and morally popular can get loans for anything. The black market for credit was pushing rates that would make a loan shark blush.

To tap into those double digit interest rates, the rumor was that China’s finance markets were running money out the back door and into the black markets.

If this is the tipping point for China, my calls just as recently as yesterday for 1,540 SP will be fond memories, because we’ll pass through them like a hot blade through butter.

Do yourself a favor and throw out everything you were working on yesterday. It’s worthless now. Start over from a point without preconceived notions. You’ll save yourself money in the long haul.

After AEC announced that secondary offering, the second one in just a short span of time, the stock tanked, and immediately analysts started throwing rotten tomatoes all over their press release. Well excuse me, but I’d say the estimable Jeffrey I. Friedman has once again had the last laugh, ladies and germs.

We in the 9th floor have long had respect for the good Jeffrey I. Friedman and his wisecracking ways. So much so that we have held the stock of his most formidable company consecutively through no less than four separate downturns, always buying more.

Now, with bonds melting down globally, the good Mr. Jeffrey I. Friedman’s decision to blanket his company is excess cash is looking precognitive, if not outright clairvoyant.

The stock has held up. It will sell off as our fellow shareholders, disgraced with horrible positioning, get raked across hot coals by the margin clerks. But the company is positioned beautifully, thanks all to one Mr. Jeffrey I. Friedman.

Never bet against the bitter industry veteran.

Try not to overthink the selloff. Watching players try to justify this move is like watching someone trying to reason out every little technicality of time travel in a Back To The Future movie. It ruins it, so just let it go. Grab some popcorn and enjoy the classic.

The market was way overextended, trumped on seasonal data and hope that housing/Japan would usher in a new global gilded era. Bears picked this moment to raid the camp because it had the maximal effect of taking the wind out of your sails.

My expectation is for a broad, 7-8% selloff, taking us to around SP 1540. Will I get it?

I guess we’ll find out shortly.

I’m just up late reading the steady stream of wild conjecture being published on the important subject of how unstoppable Tesla is.

You know what the difference is between AAPL and TSLA groupies?

AAPL groupies can afford iPhones…

I let go of the RGR shares I bought for $45.95 on Thursday for $48.73.

Other than that, I am waiting patiently. If a reversal is to happen, I think it materializes shortly. I’m looking for something small at first; a 7-8% retracement. Nothing spectacular. Then I want to look deep into the end of the year and get a glimpse of 2014.