$this->bbcode_second_pass_quote('miniTAX', 'T')hank you Daryl & seahorse2 for your kind attention and your comments.
Maybe I will let Mr Bill (if he had some spare time) has his say about the link before giving my impressions.
SYL.
PeakOil is You
Traders' Corner
Re: Traders' Corner
by MrBill » Wed 22 Feb 2006, 04:55:25
I guess I pretty much agree with Daryl and Seahorse. In the internet you will always find someone who is willing to write what you want to read. I can build a very persuasive case if I selectively use public sources of information and intentionally reach the wrong conclusions.
The price of oil is going to $70 in March because of the nuclear stand-off between the US & Iran over their nuclear ambitions; Shell and other oil companies exiting Nigeria, due to unrest there; pipeline sabotage in N. Iraq; terrorist attacks on oil infrastructure; Chinese growth at 10%; Asian growth above trend; and some OPEC members are calling for a 1 mbpd cut in supply for Q2'06; etc.
The price of oil is going to $50 in March because inventories of crude are 10% above 5-year averages; distillate is 27% above average; we have seen gasoline builds above trend for the past 7-weeks; and a mild winter have reduced demand for heating oil and natural gas. Plus new fuel standards are being implemented, so refiners are taking downtime to prepare for the summer driving season and the new standards, so they will be taking less crude, exacerbating a supply glut caused by OPEC not wanting to cut Q2'06 supply in response to high geopolitical tensions; etc.
All those facts are true. But by selectively giving you those facts, and filtering out any facts that are inconvenient, I can give you a completely different set of conclusions.
The IOB will not see the light of day on March 21st, one month away from today. Then the revisionists will be busy explaining that it is inevitable if not for US/Israeli threats against Iran, and a whole raft of excuses why their particular pet theory did not come to pass this time.
As for the M3, I am simply not aware of the details, as I mentioned above, but at the end of the day, it is confidence in the US dollar. Again, I can point out some reasons why I am nervous about the US economy and the US dollar, and I can give some reasons why the US dollar is at 1.1900 today and not 1.4500.
I think the fact is the dollar is stronger today than it was at this time last year and that the forward market (foreign exchange, Libor rates, IRS & FRAs swap curves) are pricing in stability in the future. So again, who are you going to believe? The hundred of thousands of paid financial experts who make their living correctly predicting and trading financial markets or a couple of armchair conspirists who have nothing better to do?
Why would a French money market trader or an Syrian banker have any interest to prop up the US dollar or US economy? If they could make money shorting US assets they would certainly do so. I have nothing against America per se (except their arrogance and unilateralism), but I certainly would not hesitate to buy euros and sell dollars if I thought it made sense. As it is, I am hedged on my currency exposure because as far as I am concerned the jury is still out on future moves in the dollar. Keep watching this space. ; - )
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Re: Traders' Corner
by MrBill » Wed 22 Feb 2006, 10:01:21
$this->bbcode_second_pass_quote('miniTAX', 'D')ear Mr Bill,
Here is the article I was talking about :
http://www.tiesweb.org/dialogues/incorr ... eri56.php3
May I let you read it so you can give me your feelings about it ?
Many thanks in advance.
Here is the article I was talking about :
http://www.tiesweb.org/dialogues/incorr ... eri56.php3
May I let you read it so you can give me your feelings about it ?
Many thanks in advance.
With regards to US M3 data it seems the BOJ is also having trouble keeping track of their yen?
$this->bbcode_second_pass_quote('', ' ')Where Liquidity Begins
There are two reasons Japan's rate outlook is a huge story for global markets. One, yields in the biggest government debt market will head steadily higher for the first time in more than a decade. Two, it may mean the end of the so-called yen-carry trade.
``All liquidity starts in Japan, the world's largest creditor country,'' said Jesper Koll, chief economist for Japan at Merrill Lynch & Co. ``When rates go up here, rates go up everywhere.''
What makes the carry trade so worrisome is that nobody really knows how big it is. For example, the BOJ has no credible intelligence on how many hedge funds, investors and companies have borrowed cheaply in ultra-low-interest-rate yen and re-invested the funds in higher-yielding assets elsewhere.
Nor are the Bank for International Settlements, Federal Reserve Bank of New York or the International Monetary Fund likely to know how much leverage this most popular of trades has enabled banks to build up. Ditto for regulators overseeing the dealings of portfolio mangers around the globe.
Japan's Boom May Explode Yen-Carry Trade:
And you guys were worried about the euro? Silly rabbits. Trix is the yen.
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Re: Traders' Corner
by MrBill » Wed 22 Feb 2006, 10:26:42
Okay, so finally got around to read this article.
Of course, it makes no mention of Mr. Chirac's and the EU3's insistance that Iran should be refered to the UN due its non-compliance of the NPT. Right there you start with the tactic of ignoring inconvenient facts.
$this->bbcode_second_pass_quote('', 'I')f this Alarm is so precise, it is that LEAP/E2020’s analyses concluded that all possible scenarios now lead to one single result: we collectively approach a "historical node" which is henceforth inevitable whatever the action of international or national actors. At this stage, only a direct and immediate action on the part of the US administration aimed at preventing a military confrontation with Iran on the one hand, and at giving up the idea to monetarise the US foreign debt on the other hand, could change the course of events. For LEAP/E2020 it is obvious that not only such actions will not be initiated by the current leaders in Washington, but that on the contrary they have already chosen "to force the destiny" by shirking their economic and financial problems at the expense of the rest of the world. European governments in particular should draw very quickly all the conclusions from this fact.
Of course, it makes no mention of Mr. Chirac's and the EU3's insistance that Iran should be refered to the UN due its non-compliance of the NPT. Right there you start with the tactic of ignoring inconvenient facts.
$this->bbcode_second_pass_quote('', 'I')f this Alarm is so precise, it is that LEAP/E2020’s analyses concluded that all possible scenarios now lead to one single result: we collectively approach a "historical node" which is henceforth inevitable whatever the action of international or national actors. At this stage, only a direct and immediate action on the part of the US administration aimed at preventing a military confrontation with Iran on the one hand, and at giving up the idea to monetarise the US foreign debt on the other hand, could change the course of events. For LEAP/E2020 it is obvious that not only such actions will not be initiated by the current leaders in Washington, but that on the contrary they have already chosen "to force the destiny" by shirking their economic and financial problems at the expense of the rest of the world. European governments in particular should draw very quickly all the conclusions from this fact.
Here they leave themselves two outs. One, the US does not initiate a military confrontation with Iran, and two, the US does not monetize their debt.
"Our March 20th, 2006, prediction was not incorrect, the US backed down, and Iran decided for 'technical reasons' to delay the opening of the IOB",
and then they will give another date in the not too distant future and the game will begin again.
Also, the euro was already $1.3500 last year, so calling for the dollar to collapse to $1.3000 from $1.2000 in 2006 (+/-10%) is not much of a prediction? I am old enough to remember the dollar dropping 700 pfennings in one afternoon thank you very much. By the time 2007 rolls around everyone will have forgotten about their $1.7000 predictions as a whole new set of assumptions will allow them to change their forecasts.
There is one event on the horizon and I am watching it very closely. Human to human transmission of the bird flu virus. If that takes off in Asia, all bets are off. The price of oil will drop so far, so fast, that we will forget all about Iran and the IOB for the next decade or so. It will make the Asian Crisis in 1998 look like a dress rehearsal in global financial contagion.
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