World economy talk

[uls]

but how about the bet?

you mean the 7% - 14% inflation?

that's not my position

sir emanzano suggested i take that position

if you read my reply to sir emanzano,

that is not my position

my bet is either the US govt fails to raise the money it needs to raise (and therefore fails to beat deflation with inflation)

OR runaway inflation after they have defeated the deflation monster

[uls]

wanna make bets?

here's my bet --

Despite the bailout, i bet Chrysler goes out of business before April next year

and GM goes bankrupt a few months later

[uls]

Now back to our point that even though consumers are debt laden the government still wants them to spend more... I still say its very irresponsible in the part of the government to ask debt laden people to continue spending instead of starting to cut down the debt and start saving

it's the nature of the System.

money is bank credit

MONEY IS CREATED AND LENT OUT INTO CIRCULATION WITH INTEREST.

the system only creates the principal, the interest is not created

SO DEBT IS ALWAYS GREATER THAN THE MONEY SUPPLY

This debt forces consumers to borrow constantly so the system can function

INFLATION GREATER THAN PREVIOUS INFLATION

but the system is unsustainable coz consumers get buried in debt can no longer afford to borrow

the SYSTEM is now dysfunctional

and the govt wants it to function again

[emanzano]

wanna make bets?

here's my bet --

Despite the bailout, i bet Chrysler goes out of business before April next year

and GM goes bankrupt a few months later

Uls, they're already working on it, so it's inevitable. This is from your own post in another thread.

Bush considering 'orderly' auto bankruptcy
http://www.google.com/hostednews/ap/...uW1jQD955CUMO1

Quote:
WASHINGTON (AP) — The Bush administration is looking at "orderly" bankruptcy as a possible way to deal with the desperately ailing U.S. auto industry, the White House said Thursday as carmakers readied more plant closings and a half million Americans filed new jobless claims.

With General Motors, Chrysler and the rest of Detroit anxiously holding its breath and waiting for a federal rescue, White House press secretary Dana Perino said, "There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about."

Merry christmas guys!

[uls]

merry xmas

--

the US Treasury threw GM and Chrysler a lifeline...

Now, it's the Federal Reserve's turn to help

Fed grants GMAC ability to seek bailout funds
http://www.cnbc.com/id/28382132/for/cnbc/

WASHINGTON - The Federal Reserve gave an early Christmas present to General Motors' finance arm, allowing the ailing provider of auto loans to qualify for the government's $700 billion rescue fund.

Analysts had speculated that without financial help, GMAC would have had to file for bankruptcy protection or shut down, dealing a serious blow to GM's own chances for survival. The Fed cited "emergency conditions" in justifying its decision.

[uls]

notepad lang

for future reference

Gold price above $800

USD index July 2008 71

USD index Nov 2008 88

today 80

[uls]

happy new year!

first 2009 post for this thread

Chart below shows why US govt debt paper is the i-don't-care-about-returns-just-protect-my-capital play for 2008




blue dotted line is treasuries

but as the market's appetite for risk returns in 2009, money is gonna get out of treasuries and go into riskier assets

[tidus1203]

I am BACK!!! Just got back from my vacation. New year, and it looks like we have a rally of sorts in the equity markets. But the economy IMO will see even the worsts this year. More layoffs, more closures, and yes more bailouts But the capital markets is always ahead of the economy. So watch out for the stock and FX markets if they start turnning but the economy is still bad then its time to buy. God, 2 weeks I haven't been watching the markets. 92 handle na pala Yen buti I got some out at 87 handle... New year, so be safe everyone if you're trading the markets and as uls said in the above post capital protection is still the paramount priority.

[uls]

^^

happy new year dude

yep stocks are rallying

we'll see today if the rally is for real

today is the real first day of trading for 2009

last week's trading days are thin, madami pa holiday mode

looking good for Asia this morning

[uls]

Oil price has bottomed

i thought it was at $40, but it went down to $35 or $36 but didnt stay there for long

oil is just too cheap at that price

Now, WTI crude oil has been holding above $45 for many days na

the problem with WTI is storage in Cushing Oklahoma

puno ang storage doon, so they interpret it as high inventory, so that puts downward pressure on oil price

BUT look at Brent crude -- it's trading higher than WTI crude

Brent is more realistic than WTI for now...

there's upward pressure on oil price

[uls]

Fed has lowered rates to zero

what else can they do now?

Fed buys MBS

http://www.newyorkfed.org/newsevents.../ma090105.html

Press Release
New York Fed Begins Purchasing Mortgage-Backed Securities
January 5, 2009



The Federal Reserve Bank of New York today began purchasing fixed-rate mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. Selected private investment managers are acting as agents of the New York Fed in these purchases.

Summary data detailing these operations will be available on the New York Fed’s website beginning Thursday, January 8, 2009, and will be updated on a weekly basis each Thursday.

This program, first announced on November 25, 2008, is intended to support the mortgage and housing markets and foster improved conditions in financial markets more generally.

---

oil price hit $50

WTI $50

Brent $52

[tidus1203]

OIL is bullish in the long run. I have been saying this last year and I will continue to say it again this year. Demand destruction is not forever, in fact if you have a 1 year or more time horizon even NOW is a good time to buy long term oil contracts. Buy a December 2010 contract. Or if you don't like trading futures you could always buy the USO ETF which tracks the price of Texas Light Sweet Crude. And yes the DOLLAR will lose its purchasing power as I have discussed previously and commodities is the way to go.

[tidus1203]

Since no smart money (private money) is willing to touch those MBS then stupid money (government money) is the only choice. By the way if you plan to be an American citizen please reconsider unless you want yourr kids and grand kids to pay the ultimate price later on...

[altec]

$40 crude oil is too low. It will eventually go up to $50, which is a more comfortable level for these oil producing countries. If we insist on below 50, we will be faced with another crisis, this time by most of the oil producing countries, a crisis that will aggravate the world economic crisis. And all signs show towards oil price creeping up. Hopefully, these oil countries have learned their lessons...for now.

When there is stability, it allows economies to consolidate, plug all their leaks and loopholes. When another leak pops up, then it shakes up everything: the stock markets, business confidence, real estate, etc.

[uls]

i've been tracking USO

it is off its 52 week low, on the uptrend

volume is increasing

--

for now, a more accurate indicator of true oil price is Brent

coz WTI has storage problems in Cushing and that affects WTI price

[Monseratto]

Bagong pakulo na naman...Hoarding oil while its cheap.

Oil Traders Seek Another 10 Supertankers for Storage

Jan. 7 (Bloomberg) -- Oil traders are seeking as many as 10 supertankers to store crude, potentially taking the amount hoarded at sea to almost five days of European Union demand, according to Frontline Ltd., the largest owner of the vessels.

About 25 of the carriers, each able to hold about 2 million barrels of crude, were already hired for storage. There are enquiries for 5 to 10 more, Jens Martin Jensen, Singapore-based interim chief executive officer of the company’s management unit, said by phone today. Traders are storing crude to take advantage of higher prices for supply in the future.

Thirty-five supertankers represent about 7 percent of the global fleet of very large crude carriers, according to data from London-based Drewry Shipping Consultants Ltd. Storing oil in tankers may buoy rental rates that fell by a record 78 percent last year as slower economic growth sapped demand for energy.

“I’ve never before seen storage demand on this scale,” said Didier Labat, a Paris-based shipbroker at Barry Rogliano Salles who has worked in tanker markets for about 20 years.

Commodities prices fell the most in five decades last year, with crude dropping more than $100 from the peak of $147.27 a barrel in July, as simultaneous recessions hit the U.S., Europe and Japan. Oil demand in 2008 fell for the first time since 1983, according to the Paris-based International Energy Agency.

Traders are seeking to lease ships for three to nine months, Jensen said. Crude oil for December delivery traded at $61.90 a barrel as of 10:49 a.m. in London, $13.66 more than the February contract. Oil companies and traders may be able to profit from storing the oil, assuming shipping, insurance and financing costs are covered.

[uls]

ya storage at sea

Royal Dutch Shell has been doing that for months

http://www.reuters.com/article/marke...20575220081120

DUBAI, Nov 20 (Reuters) - Oil companies plan to store millions of barrels of crude at sea as they wait for demand to pick up and prices to rise.

So far oil companies have booked ships capable of holding up to 10 million barrels, brokers have said, more than the daily output of top exporter Saudi Arabia.

On Thursday U.S. oil trader Koch and Royal Dutch Shell (RDSa.L) were the latest to confirm bookings of additional Very Large Crude Carriers (VLCC), brokers said.

why sell now when you can make a huge profit selling later?

2,000,000 barrels at $48 per barrel (Feb delivery) = $96,000,000

2,000,000 barrels at $60 per barrel (Dec delivery) = $120,000,000

[uls]

they started it

now everyone wants a bailout

**** industry seeks federal bailout
http://politicalticker.blogs.cnn.com...deral-bailout/

WASHINGTON (CNN) — Another major American industry is asking for assistance as the global financial crisis continues: Hustler publisher Larry Flynt and Girls Gone Wild CEO Joe Francis said Wednesday they will request that Congress allocate $5 billion for a bailout of the adult entertainment industry.

[emanzano]

they started it

now everyone wants a bailout

**** industry seeks federal bailout
http://politicalticker.blogs.cnn.com...deral-bailout/

This one, i whole-heartedly support!

The world as we know it will come to an end if this industry tanks.

[tidus1203]

Its the end of creative capitalism as I see it. SERIOUSLY even industries like **** are asking for bailouts. What happened to the FAILURE component of capitalism that has made it strong?

By the way horrible private job numbers yesterday. I will be waiting tomorrow for the government numbers. I heard around 500,000 job losses are expected just for the month of December. Economic Armageddon here we come!!! I am ready, I hope you are!