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Posted
Jun 30 2008, 12:28 PM
by
Todd Harrison
Rating:
This barrage of economic non sequiturs has left us immune to any real measure of financial disaster beyond the amount of cash and coin in our pockets. We no longer even notice this process. We accept it and move on. That's one reason financial disasters seem to skate along public consciousness generating only a vague sense of dumbfounded awareness; it's a stealth bear market.
The New York Times tried to spell it out over the weekend - "Battered by Oil, Dow Touches Bear Territory" - but who can be bothered to pay attention to such things when there's wine to be drunk and bill collectors at the door? What does it mean?
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Posted
Jun 27 2008, 01:49 AM
by
Andrew Horowitz
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After the close of the markets Thursday, as the fear of a continued parabolic rise in the price of oil was still fresh on the minds of investors, the U.S. House of Representatives approved a bill that that could help to reverse the direction of oil prices.
The bill would provide for the Commodity Futures Trading Commission (CTFC) to enact emergency measures to “maintain or restore orderly trading.” Concurrent to the bill’s approval, the CTFC released a notice that spells out the broad powers granted by Congress that have been used when the commodity markets have been manipulated in the past. Yes, manipulation.
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Posted
May 13 2008, 05:56 PM
by
Charley Blaine
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The chart of the Standard & Poor's 500 Index is telling me the market could move higher and happily so -- if oil prices will cooperate. That is a big if.
Fact is, the index is giving no signs of totally falling apart. It's nicely above its 50-day moving average, and it's moving in parallel with the moving average. Something that gives an investor a warm feeling inside.
And it is forming a support level at about 1,383. That means buying
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Posted
May 12 2008, 07:12 AM
by
Douglas McIntyre
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Based on the figures from the Bureau of Labor Statistics, U.S. unemployment was 5% in April. Those figures showed that 146.3 million Americans were employed in the civilian work-force and 7.6 million Americans were unemployed.
It should not come as a surprise to economists that the weakest parts of the economy last month were construction, manufacturing, and retail. The segments with some growth were healthcare and professional services. (For a complete list of jobs by sector visit 24/7 Wall St.)
The economy may be in a recession now. Some experts believe that growth will only slow modestly over 2008. Warren Buffett and George Soros have said that they think the downturn will be long and deep.
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Posted
May 06 2008, 06:14 PM
by
Charley Blaine
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I'm really not here to scare you, but, get ready, I AM going to scare you.
The news got lots of attention: Goldman Sachs analyst Arjun Murti predicted Tuesday that the price of crude oil could hit $150 to $200 a barrel in six to 24 months. (Here's one discussion of the report. Another is here.)
Crude oil in New York promptly jumped to as high as $122.73 a barrel in New York before closing at $121.84. And, as I write this, crude was trading slightly lower in electronic trading. But it also had the perverse effect of pushing the stock market higher. Indeed, the biggest winners in Tuesday's stock market were oil and gas production companies, natural gas companies. (But not refiners; crude oil is rising faster than refiners can push their prices up.)
So, if crude jumps to $150 or $200, how does that translate into prices at the gas pump. Here's the scary part.
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Posted
May 06 2008, 12:05 AM
by
Jon Markman
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If soaring gasoline prices are blowing a hole in your commuting budget, perhaps you ought to consider going to work for an oil company. That seems to be the employment road to riches these days, as the industry reportedly faces the loss of half of its aging work force over the next decade.
According to a report by Cambridge Energy Research Associates, the energy industry will lose as many as 15% of its engineers in just two years to retirement, and has therefore launched an all-out assault on finding, training and retaining new young staffers. It sounds like the boom in demand for software developers in Silicon Valley in the '90s. Bonuses and perks are escalating as companies vie for talent. Report author Pritesh Patel said new workers will stream into the industry from around the world, but there will still be a “knowledge gap” that will hamper efforts to find and exploit new oil and gas reserves.
It sounds like this is a better direction for college graduates to head than the traditional havens of medicine and law. The Society of Petroleum Engineers has published a survey that shows the average base salary for petroleum engineers was $122,458 in 2007, up 5% from 2006. Bonuses, housing allowances, retirement plan contributions and the like reportedly push the average compensation to $167,712. All this at a time when doctors and IT pros are facing cutbacks.
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Posted
Apr 10 2008, 03:53 PM
by
Jon Markman
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Watch out, Texas! Get back California, Louisiana and Alaska! North Dakota and Montana are on track to knock all of you off your high horses as the oil capital of the United States.
According to a government report published today that has stunned the energy biz, a thin layer of rock known as the Bakken Shale, located a couple of miles under the Badlands, holds up 4.3 billion barrels of recoverable oil, making it the single largest oil reservoir that federal scientists have ever assessed.
At today’s price of $110 per barrel, that puts the value at $475 billion, give or take a few bill, or more than enough to make people think ND stands for North Dallas. Or maybe that’s New Dhabi.
The U.S. Geological Survey only assessed the Bakken Shale in U.S. boundaries, so the full extent of the find, which stretches north into the Canadian provinces of Saskatchewan and Manitoba, will ultimately be larger. Already the estimate for “technically recoverable” oil – or that which is exploitable using current technology -- is 25 times higher than the last time the USGS surveyed the area, in 1995.
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Posted
Mar 17 2008, 09:21 AM
by
Douglas McIntyre
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Oil hit nearly $112 today. The debate now is not over whether oil will be at $100 for the near-term. Traders and economists are focused on whether a recession will take oil demand, and prices down, or whether falling supply will keep prices high.
The bets are beginning to move in the direction of a long, long period with oil at or above current prices. The FT writes that "Crude oil futures prices for delivery until 2016 have surged above $100 a barrel as investors bet that oil costs will remain high in the long term." While the news is enough to cause wide-spread despair, it is not a complete surprise.
The market is now willing to gamble that OPEC may never push production up very much. The high price of oil is just too good to resist. It is swelling the value of sovereign funds in Middle East nations by tens of billions of dollars a year.
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Posted
Mar 11 2008, 08:53 AM
by
Douglas McIntyre
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Several companies in the airline and auto sectors could face bankruptcy this year with American Airlines and Ford at the head of the list
American Airlines dropped 10% yesterday to hit $10.20. The shares have not been at that level since 2004. American lost money three of the last five years. It had a small net profit in 2007 of just over $500 million on $22.9 billion in revenue. The margin is razor thin.
In 2007, American also had interest expense of over $900 million. Long-term debt is about $9.4 billion.
In an industry which is as well-known for its bankruptcies as it is for its bad food, 2008 is shaping up as a truly awful year. Fuel prices are rocketing as oil passes above $107 a barrel. The recession is likely to put a drag on passengers, both business and pleasure. The $500 million that American made last year could turn to a loss of several billion in the blink of an eye.
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Posted
Dec 05 2007, 03:45 PM
by
Charley Blaine
Rating:
It looks to me like the hot money has started to flee crude oil. And the winners from that retreat look like Apple and Google.
Crude peaked on Nov. 21 at an intraday high of $99.29 a barrel -- a day that saw the Dow Jones industrials fall 211 points. It dropped to $86.95 in electronic trading Wednesday night. (Check out this chart of crude oil.) And this despite OPEC's decision to hold its production quotas at current levels at a meeting in Abu Dhabi.
Tech stocks started to move almost as soon as crude peaked and have been among the strongest market sectors in the last few weeks.
Since Nov. 21, the U.S. Oil Fund, the exchange-traded fund that invests in crude oil, has fallen nearly 12%, while Apple is up 10%. Google is up nearly 6%. The Morgan Stanley High-Technology 35 Index is up nealry 5%.
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