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B4 the Bell Humpday, Sept. 22, 2004


Guest yobob1

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FNM has been cooking the books. Everybody knows it and now its being discussed publicly. The bigger story is that the whole BKX and XBD complex have been feeding at this trough for the last decade.

 

The only question in my mind is when these dots get connected and how much of the story ever sees the light of day.

I feel like commissioning a one-time-only "extreme symphony" performance:

 

Twilight of the Carry Trade

 

The musicians, in their formal black clothing, start in a triumphant adagio, but slip into a minor key fugue.

 

Then they smash their instruments as the lights in the hall go out, and the management screams "FIRE!"

 

:lol: :mellow: :ph34r:

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More from Marshall Auerback

 

"When oil becomes scarce, those willing and able to pay, or fight for it, will secure the oil without regard from where it comes, and regardless of how they get it. To that extent it is silly to speak of oil?s ?political risk premium? as if it is somehow divorced from the attendant realities of changing supply and demand dynamics. Members of the Bush administration have openly conceded that the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein. As if to make a mockery of claims that the goal is to transform Iraq into a model liberal democracy for the Middle East, the US State Department has just announced it is switching $3.4bn of US funds from water and power projects. Most of the money will be reallocated to boosting security and oil output.

 

To what end? The dearth of oil and the corresponding need to ensure adequate supply amidst burgeoning demand is viewed as a matter of economic survival. Even former President Clinton asserted America?s right to resort to ?unilateral use of military power? to ensure ?uninhibited access to key markets, energy supplies, and strategic resources.? Supply/demand dynamics therefore will fuel America?s hegemonistic impulse and heighten the very geopolitical uncertainties which have given rise to this alleged political risk premium in the oil markets. The markets themselves remain in denial about this, much as they have about the real reasons for oil?s continued strength. They will continue to ignore this at their collective peril, as valuations continue to suffer amidst rising political risk premiums."

 

http://www.prudentbear.com/internationalperspective.asp

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