The BIDU Bidet

[longOnUranus]

JICKASS--THIS IS THEE MOST IMPORTANT ARTICLE OF THE YEAR FOR USSNS BEARS-PLEASE READ CAREFULLY:

 

DOES SENTIMENT MATTER ANYMORE

This reads a lot like Prechter's interview several months ago. Another wild cornered deflationist. If you believe (as I do) in a credit implosion before the helicopter money gets dropped, then they'll be right.

 

The sell-off today was ostensibly caused by irrational fear of rising rates, triggered by high employment number, which was know to the so-called PigMen in advance, of course. Being an old-time business-type thinker, I find suspect a high employment number in union with higher than expected wage increases. Higher wage pressures should cause decreased hiring.

 

Prechter's best statement from that interview was that high oil prices are not by themselves inflationary, since they reflect classic supply/demand forces and not an increase in money supply. As much as I have wanted to do the Rydex inverse Bond Fund, I still see lower rates - WITHOUT a refi boom - later this year.

 

As much as the entire financial world wants to be saved by inflation, all efforts will see the opposite.

 

Everything goes down from here.

[Drano]

On NPR's "Marketplace" radio show, today's selloff was ridiculed by an interviewee, who said that in the slow month of August, any little minor piece of news would be seized upon by the press, thus causing a selloff -- but don't worry, things will be back to normal in September, up up up up up

[Janitor]

The SPX is down and the weekly candle looks like a key reversal.

 

Yet we have only one page on M2M thread?

 

 

As Shorty would say: "Snarling Bearish"

[Brisbane Bear]

oh the humanity!!!

 

You have to laugh.

 

Here in OZ we had the Premier of our biggest State(Sydney) resigning suddenly last week with 2 other very senior Ministers.

 

His new replacement is no sooner sworn in and the first thing he does is to repeal the hugely unpopular property vendor tax.

 

This tax has been blamed for the downturn in Sydneys property market(funny thing is that no other State has the tax so whats their excuse??)and being a slimey populist politician of the highest order he wants to be loved from the get go...right?

 

Wrong,now we have the prospect of 1000s of investors looking to unload their way over-priced property at the same time...end result...more downward pressure on prices(a bounce,a bounce,my kingdom for a bounce... )

 

Sellers warned house prices may fall

August 6, 2005 - 4:24PM

 

 

The scrapping of the unpopular vendor tax has key players in the NSW real estate sector licking their lips, although prospective sellers have been warned to expect falling house prices in an oversupplied market.

 

Newly appointed NSW Premier Morris Iemma wasted no time in abolishing the 2.25 per cent tax on the sale of investment properties this week, in a move welcomed by industry bodies, real estate agents, property developers and mortgage brokers.

 

Housing industry participants have blamed the tax for exacerbating a downturn in the residential market and believe investors will return to NSW now that it is no longer at a disadvantage to the other states.

 

However anal cysts say the subsequent release of pent-up selling demand will lead to a larger fall in house prices in the short-term.

 

"In the near-term, the abolition of the tax will trigger a steeper fall in house prices in Sydney because of a flood of new homes for sale in an already weak market," JPMorgan chief economist Stephen Walters said.

 

http://www.theage.com.au/news/Business/Sel...3125937050.html

[Jimi]

TOL.

 

Die.

 

Die you pig.

 

Die. Die. Die.

 

Illiquid land holdings?

 

Die. Die. Die.

 

Slowing sales in hot markets?

 

Die. Die. Die.

 

Brothers inside selling?

 

Die. Die. Die.

 

Die you stupid pig.

 

die.

[Brisbane Bear]

my sentiments exactly Jimi...

 

along with all the rest...

[DrStool]

As much as I have wanted to do the Rydex inverse Bond Fund, I still see lower rates - WITHOUT a refi boom - later this year.

 

 

I see higher rates for as far as the eye can see, and a refi collapse beginning essentially now. A year from now, both short and long term rates will be shockingly higher than they are today.

 

And it has absolutely nothing to do with US economic activity, yesterday, today, or in the future. Economic activity is an effect of interest rate levels, not the other way around. Changes in the cost of money-liquidity are caused by changes in the supply of and demand for money-liquidty. The forces that drove rates into the ground have changed direction. They are now shooting for the sky. This is a secular process that will not, and probably cannot, be stopped.

 

China and Japan have told us that they have had enough, and their recent actions suggest that they mean what they say. As they slow their buying of US financial assets, there is only one way for interest rates to go. The private US financial system alone cannot absorb all of the paper being supplied month after month after month without liquidation at the margin forcing prices lower and yields higher, indefinitely.

 

The Fed will have no choice but to massively expand its asset base just to try and hold back the tidal forces, and it will fail. In spite of massive pumping of money into the system since April, interest rates have continued their inexorable rise.

 

It is even possible that the end result of the growing liquidity crunch will be both rising interest rates, deflation, and constantly weakening economic activity. There may be other scenarios, but the most likely of them all include rising interest rates because of the ever growing shortage of liquidity necessary to service exponentially growing debt.

 

You can read all the gory details in the Money and Credit Weekly report in the Wall Street Examiner Professional Edition. The next update will be published early next week.

[Jorma]

In recent months, Saudi oil officials have begun openly discussing their new investment plans - the first major drive to increase capacity in the kingdom since 1981. It calls for Saudi Aramco, the state-owned oil company, to increase its production capacity to 12.5 million barrels a day by 2009, drill new exploration and wildcat wells, and draw up what Aramco calls a plan to pump up to 15 million barrels a day.

 

http://www.nytimes.com/2005/08/06/business...pagewanted=2&hp

 

For the sake of arguement suppose this is true. Well true to the extent that they believe they can do those numbers.That they really are spending big money to meet those numbes, not just saying all this for all sorts of political reasons.

 

If they really think they can do it we have to accept that maybe they can. Aramco is brimming with enginers and geologists and it's hard to believe the majority of them are filled with wishfull thinking and delusion.

 

All of which is fundamentals. A fair technical arguement can be made oil is in a top area. (Chart posting experts feel free to chime in)

[GregFokker]

In recent months, Saudi oil officials have begun openly discussing their new investment plans - the first major drive to increase capacity in the kingdom since 1981. It calls for Saudi Aramco, the state-owned oil company, to increase its production capacity to 12.5 million barrels a day by 2009, drill new exploration and wildcat wells, and draw up what Aramco calls a plan to pump up to 15 million barrels a day.

 

http://www.nytimes.com/2005/08/06/business...pagewanted=2&hp

 

For the sake of arguement suppose this is true.  Well true to the extent that they believe they can do those numbers.That they really are spending big money to meet those numbes, not just saying all this for all sorts of political reasons.

 

If they really think they can do it we have to accept that maybe they can.  Aramco is brimming with enginers and geologists and  it's hard to believe the majority of them are filled with wishfull thinking and delusion.

 

All of which is fundamentals.  A fair technical arguement can be made oil is in a top area. (Chart posting experts feel free to chime in)

<{POST_SNAPBACK}>

But which then means that they'll only exhaust their limited supplies faster. The more efficiently they drill, the more quickly it runs out.

[Jorma]

In recent months, Saudi oil officials have begun openly discussing their new investment plans - the first major drive to increase capacity in the kingdom since 1981. It calls for Saudi Aramco, the state-owned oil company, to increase its production capacity to 12.5 million barrels a day by 2009, drill new exploration and wildcat wells, and draw up what Aramco calls a plan to pump up to 15 million barrels a day.

 

http://www.nytimes.com/2005/08/06/business...pagewanted=2&hp

 

For the sake of arguement suppose this is true.  Well true to the extent that they believe they can do those numbers.That they really are spending big money to meet those numbes, not just saying all this for all sorts of political reasons.

 

If they really think they can do it we have to accept that maybe they can.  Aramco is brimming with enginers and geologists and  it's hard to believe the majority of them are filled with wishfull thinking and delusion.

 

All of which is fundamentals.  A fair technical arguement can be made oil is in a top area. (Chart posting experts feel free to chime in)

<{POST_SNAPBACK}>

But which then means that they'll only exhaust their limited supplies faster. The more efficiently they drill, the more quickly it runs out.

<{POST_SNAPBACK}>

 

 

Right. Just like they have been doing for 30 years. Against all common sense. 30 years is a long long time. In any case my point was not to get wedded to the peak oil/bear case. At least on any time scale less than years, which might influence your decision making.

[GregFokker]

In recent months, Saudi oil officials have begun openly discussing their new investment plans - the first major drive to increase capacity in the kingdom since 1981. It calls for Saudi Aramco, the state-owned oil company, to increase its production capacity to 12.5 million barrels a day by 2009, drill new exploration and wildcat wells, and draw up what Aramco calls a plan to pump up to 15 million barrels a day.

 

http://www.nytimes.com/2005/08/06/business...pagewanted=2&hp

 

For the sake of arguement suppose this is true.  Well true to the extent that they believe they can do those numbers.That they really are spending big money to meet those numbes, not just saying all this for all sorts of political reasons.

 

If they really think they can do it we have to accept that maybe they can.  Aramco is brimming with enginers and geologists and  it's hard to believe the majority of them are filled with wishfull thinking and delusion.

 

All of which is fundamentals.  A fair technical arguement can be made oil is in a top area. (Chart posting experts feel free to chime in)

<{POST_SNAPBACK}>

But which then means that they'll only exhaust their limited supplies faster. The more efficiently they drill, the more quickly it runs out.

<{POST_SNAPBACK}>

 

 

Right. Just like they have been doing for 30 years. Against all common sense. 30 years is a long long time. In any case my point was not to get wedded to the peak oil/bear case. At least on any time scale less than years, which might influence your decision making.

<{POST_SNAPBACK}>

Agree 100%. Timing is everything, especially with futures.

 

My point was that the long term funnymentals remain bullish.

 

Shorter term, well... that's what stops are for.

[Guest]

DEAR JICKASS--THIS IS YOUR MOST IGNOMINIOUS AND DISGRACEFUL RICHARD640 AGAIN-I AM MORTIFIED TO BOTHER YOU AGAIN BUT I FEEL THAT THIS ARTICLE MERITS POSTING

 

Chronic Investment Myopia

 

The fact that these rather obvious signs of a looming financial crisis have gone unnoticed by traditional Wall Street investment houses is consistent with their prior history of chronic investment myopia. For example, I recently reread a Barron's article written Nov. 2, 2004, in which five Wall Strategists, myself included, were asked to predict oil prices in 2005. Of the five, I was the only one to have accurately projected higher prices (which at the time were in the upper $40 per barrel), estimating prices would reach $65-$70 per barrel. A money manager at Solomon Brothers and an energy strategist at Merrill Lynch predicted prices collapsing to $28-$35, and $31- $34, respectively. If so many Wall Street anal cysts could blow such an obvious call as higher oil prices, why should we expect their judgment to be any better now?

http://www.gold-eagle.com/editorials_05/schiff080505.html

 

[stevie Leeb pointed out that since oil bottomed at $10 and started rising--strategists have consistently predicted lower prices "next year" from 1998 until today.]

[Guest]

FROM THE PRIVATEER LETTER: WHY THE U.K. LOWERED RATES

 

Why did the BoE decide to take this step? The reason is neatly summed up by the latest report on the British real estate market. On August 5, HBOS Plc reported that in July, UK house "price inflation" slowed to its lowest level in NINE YEARS. The year on year increase in UK real estate prices had fallen to 2.3%. In other words, valuations have stopped going up.

 

In the UK, as in the US, the lions share (65-75%) of economic "growth" in composed of consumer spending. Throughout the real estate bubble in both nations, the driving force behind this consumer spending has been spiralling real estate valuations. Without these spiralling valuations, consumer spending must inexorably fall. Given the outrageous debt levels being carried by consumers in both the UK and the US, there is no better recipe for an almost instant economic recession than a peak to real estate valuations, let alone a fall in same.

 

Looking at the onset of the first and dreading beyond their worst nightmare the possible onset of the second, the BoE lowered rates, hoping to stave off what is now the absolutely inevitable.

[Yellowstone]

Don Coxe is back from vacation and talking Canadian oil sands, base metals (Phelps Dodge), and the breakout in bond yields. Good listen for those interested.

 

 

http://www.jonesheward.com/Commentary/p_Commentary.aspx

 

[Yellowstone]

Don Coxe talks about this deal as reported in the wsj:

 

Kinder Morgan

To Buy Terasen

For $3.1 Billion

 

Deal Will Provide Access

To Alberta's Oil Sands,

Which Are Gaining Luster

By DENNIS K. BERMAN and CHRISTOPHER J. CHIPELLO

Staff Reporters of THE WALL STREET JOURNAL

August 2, 2005; Page C5

 

Hoping to capitalize on a vast store of oil under development in western Canada, U.S. pipeline operator Kinder Morgan Inc. said it is purchasing Terasen Inc., of Vancouver, British Columbia, for $3.1 billion in stock and cash and the assumption of $2.5 billion in debt.

 

Houston-based Kinder Morgan operates 35,000 miles of natural-gas and oil pipelines across North America, as well as 145 storage terminals. But it lacks a significant presence in Alberta, Canada, where the world's second-largest deposit of oil rests locked in gritty oil-sands deposits.

 

Extracting and processing the molasses-like bitumen -- the type of crude oil found in oil sands -- is much more expensive than producing and refining conventional crude oil, but recent high oil prices have made bitumen projects more viable. anal cysts have estimated that oil-sands developments need long-term prices averaging $25 a barrel or more for benchmark crude -- well below recent levels.

 

Kinder Morgan's move shows one of the pipeline industry's largest players expects elevated prices to sustain development. "For the last year or so we have thought that a great megatrend to be involved with was the oil sands," Kinder Morgan Chairman and Chief Executive Richard D. Kinder said in an interview yesterday.

 

Terasen operates pipelines linking Alberta with the U.S. Midwest and Canada's West Coast. It also is the largest natural-gas distributor in British Columbia.

 

The big opportunity in the deal, said Mr. Kinder, was the prospect of building pipelines, particularly as oil-sands production is expected to rise from one million barrels of oil a day to two million sometime in the next decade. "There's a tremendous need for midstream energy infrastructure," he said. Midstream is the gathering and processing of oil and gas, the link between rigs in the field and the large interstate pipelines that carry oil and gas to consumers.

 

While the U.S. is the main market for exports from the oil sands, China has shown increasing interest. China state oil company PetroChina Co. in April agreed with Canadian pipeline company Enbridge Inc. to share the costs of building a $2 billion pipeline from Alberta to the West Coast.

 

http://online.wsj.com/article_print/0,,SB1...5501814,00.html