OilPrice.com | Finance

OilPrice.com | Finance Financial news and analysis that looks at investment opportunities within the various commodity sectors and the global economic situation. http://oilprice.com/ Wed, 08 Feb 2012 19:57:57 GMT Oilprice.com (info@oilprice.com) Is a Reduction in Population Numbers the only Sustainable Solution? http://oilprice.com/Finance/the-Economy/Is-a-Reduction-in-Population-Numbers-the-only-Sustainable-Solution.html In a recent post, I talked about why we may be reaching Limits to Growth of the type foretold in the 1972 book Limits to Growth. I would like to explain some additional reasons now. Figure 1. Base scenario from 1972 Limits to Growth, printed using today's graphics by Charles Hall and John Day in "Revisiting Limits to Growth After Peak Oil" http://www.esf.edu/efb/hall/2009-05Hall0327.pdf In my earlier post, I talked about how rising oil prices are associated with rising food prices, and how these high prices can make it harder for borrowers to repay…

]]> tverberg@oilprice.com (Gail Tverberg) Mon, 30 Jan 2012 23:32:43 GMT http://oilprice.com/Finance/the-Economy/Is-a-Reduction-in-Population-Numbers-the-only-Sustainable-Solution.html The Benefit of the Doubt Market http://oilprice.com/Finance/the-Markets/The-Benefit-of-the-Doubt-Market.html It is already January 24, and the S&P 500 has seen a grand total of two down days so far in 2012. Are we on the eve of one of the great bull markets of all time? Is it off to the races once again? I follow dozens of fundamental and trading research services and the number that are flashing warning lights right now is close to an all-time high. For example, the AAII sentiment survey now shows that 46% of investors believe that the stock market will be high in six months, well above the 39% historic average. It has only been higher than this…

]]> jimonline@irelandmail.com (Mad Hedge Fund Trader) Wed, 25 Jan 2012 2:31:53 GMT http://oilprice.com/Finance/the-Markets/The-Benefit-of-the-Doubt-Market.html Out of Africa - Portugal solicits Angolan investment http://oilprice.com/Finance/the-Economy/Out-Of-Africa-Portugal-Solicits-Angolan-Investment.html The following is an interesting and cautionary tale for investors looking at relatively "stable" Old Europe and Africa, seemingly mired in perennial crisis. Since last year the Portuguese government has been heavily lobbying its former colony Angola to invest its petrodollars there as the nation struggles to comply with the terms of a $99 billion financial rescue package. For 500 years, Angola was Portugal's biggest and richest African colony, with huge reserves of oil, gas and diamonds. The event marks something unique in world history since Columbus…

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]]> admin@namecake.com (John Daly) Tue, 17 Jan 2012 4:07:12 GMT http://oilprice.com/Finance/the-Economy/Out-Of-Africa-Portugal-Solicits-Angolan-Investment.html International Junior Oil Stocks: How Investors Can Position Themselves for High-Reward International Plays http://oilprice.com/Finance/the-Markets/International-Junior-Oil-Stocks-How-Investors-Can-Position-Themselves-For-High-Reward-International-Plays.html Without question, the oil stocks that have made me the biggest profits have been junior oil companies with international plays. Companies like Xcite Energy, (XEL-TSXv) which went from 62 cents to $6 with a heavy oil play in the North Sea, or TAG Oil developing their New Zealand asset, moving from $2 - $6 a share. (The one big international stock I missed was TransGlobe, (TGL-TSX) which went from $3.50 - $20 on drilling success in Yemen and Egypt.) These junior international plays are often orphaned stocks with big, high-impact exploration plays…

]]> schaeferk@oilprice.com (Keith Schaefer) Tue, 17 Jan 2012 4:02:19 GMT http://oilprice.com/Finance/the-Markets/International-Junior-Oil-Stocks-How-Investors-Can-Position-Themselves-For-High-Reward-International-Plays.html Argentina's Booming Economy Proves There Can be Life After Default http://oilprice.com/Finance/the-Economy/Argentinas-Booming-Economy-Proves-There-Can-Be-Life-After-Default.html Quick. Name the country whose economy despite the global recession nevertheless expanded 9.2 percent in 2010 and has kept growing in 2011 at an annual rate of about 8 percent. Still unsure? The nation defaulted on part of its external debt, roughly $93 billion, at the beginning of 2002 after undergoing three years of brutal recession. Argentina, Latin America's third largest economy. Quite a turnaround in nine years, when the nation quickly became a pariah state, foreign investment fled the country, and capital flow towards Argentina ceased almost…

]]> admin@namecake.com (John Daly) Tue, 17 Jan 2012 3:59:03 GMT http://oilprice.com/Finance/the-Economy/Argentinas-Booming-Economy-Proves-There-Can-Be-Life-After-Default.html G20 and BRICs - Who's in Charge? http://oilprice.com/Finance/the-Economy/G20-And-BRICs-Whos-In-Charge.html As the representatives of G20 nations gather in Cannes, thrashing out a new way forward for the ailing European Union's economies, a major yet little observed economic sea change is underway, as the torch is passed from Europe's capitalist systems, forged over the past four centuries, to countries considered until a couple of decades ago "Second" and "Third World - the BRIC nations of Brazil, the Russian Federation, India and China. While it is as yet unclear what form this historic and dynamic shift will ultimately take, investors would be…

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]]> admin@namecake.com (John Daly) Tue, 17 Jan 2012 3:57:37 GMT http://oilprice.com/Finance/the-Economy/G20-And-BRICs-Whos-In-Charge.html Oil & Gas Income Trusts http://oilprice.com/Finance/the-Markets/Oil-Gas-Income-Trusts.html The "New Class" in an old, popular investment vehicle Part 1: A Comeback in the Making? The income trust game is back - just in a different form. Canadian Finance Minister Jim Flaherty killed these high-yield, tax sheltered public companies on October 31, 2006 - not so affectionately called the "Hallowe'en Massacre" by the millions of investors who were enjoying 10%+ payouts annually. Canadian companies had until January 1 2011 to convert back to a regular corporation or face new taxation that essentially reverted them…

]]> schaeferk@oilprice.com (Keith Schaefer) Tue, 17 Jan 2012 3:35:38 GMT http://oilprice.com/Finance/the-Markets/Oil-Gas-Income-Trusts.html The Faustian Bargain has Enabled an Unsustainable Economic System, but Not for Much Longer http://oilprice.com/Finance/the-Economy/The-Faustian-Bargain-Has-Enabled-An-Unsustainable-Economic-System-But-Not-For-Much-Longer.html Historically people have shifted their belief systems in various ways. The Greeks and Romans believed in numerous gods and goddesses and attributed all kinds of powers to them. Then the great monotheistic religions came along and people began to believe in just one god, though they honoured him under different names. Recently, beliefs have shifted again, with people worshipping just one part of a god, the invisible hand. Thanks to Adam Smith and those who followed him, especially the current neoclassical economic theologians, we have seen such…

]]> tverberg@oilprice.com (Gail Tverberg) Mon, 09 Jan 2012 23:08:16 GMT http://oilprice.com/Finance/the-Economy/The-Faustian-Bargain-Has-Enabled-An-Unsustainable-Economic-System-But-Not-For-Much-Longer.html Is a Green Economy too Expensive in the Current Environment http://oilprice.com/Finance/the-Economy/Is-A-Green-Economy-Too-Expensive-In-The-Current-Environment.html There is a looming battle over the cost of energy between the ‘green at any cost’ versus the ‘green enough at a reasonable cost’ where wind/solar forces will battle natural gas—you can sense the fog of war ahead as the battle is being set up. The policy landscape has been designed to drive toward clean energy policies sometimes without much regard to the cost. It started with environmental groups challenging our polluting ways. Over time those views gained mainstream acceptance and today there is broad…

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]]> huntga@oilprice.com (Gary Hunt) Mon, 09 Jan 2012 22:59:17 GMT http://oilprice.com/Finance/the-Economy/Is-A-Green-Economy-Too-Expensive-In-The-Current-Environment.html How to Play Commodities in 2012 http://oilprice.com/Finance/the-Markets/How-To-Play-Commodities-In-2012.html This is my favorite asset class for the next decade, as investors increasingly catch on to the secular move out of paper assets into hard ones. Don’t buy anything that can be manufactured with a printing press. Focus instead on assets that are in short supply, are enjoying an exponential growth in demand, and take five years to bring new supply online. The Malthusian argument on population growth also applies to commodities; hyperbolic demand inevitably overwhelms linear supply growth. Of course, we’re already nine years into what is…

]]> jimonline@irelandmail.com (Mad Hedge Fund Trader) Wed, 04 Jan 2012 1:23:18 GMT http://oilprice.com/Finance/the-Markets/How-To-Play-Commodities-In-2012.html China's Bubble of Rapid Economic Expansion Could Soon Burst http://oilprice.com/Finance/the-Economy/Chinas-Bubble-Of-Rapid-Economic-Expansion-Could-Soon-Burst.html China's problems are piling up, just when the celestial kingdom is attempting an orderly handover of power. Since China's wild grab for commodities over the past 2 years has been a powerful driver of global energy markets, it will be interesting to watch global commodities markets as the China bubble begins to deflate. In economics, "cycles are forever." But China's insular government and its massive population are unfamiliar with economic concepts such as "what goes up, must come down." Watch and learn. Chinese stocks are flashing warning…

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]]> thyu@oilprice.com (Al Fin) Thu, 15 Dec 2011 23:40:59 GMT http://oilprice.com/Finance/the-Economy/Chinas-Bubble-Of-Rapid-Economic-Expansion-Could-Soon-Burst.html Iraq: An Army of Soldiers to be Replaced by an Army of Businessmen http://oilprice.com/Finance/the-Economy/Iraq-An-Army-Of-Soldiers-To-Be-Replaced-By-An-Army-Of-Businessmen.html After nearly nine years, all US Forces are mandated to withdraw from Iraqi territory by 31 December 2011 under the terms of a bilateral agreement signed in 2008. Now the job facing the war-torn country is to re-build its economy. On Tuesday, prime minister Nouri al-Maliki gave a presentation to more than 400 executives representing a wide range of industries including petroleum, engineering and construction, commercial aviation, architecture, maritime cargo and financial services; the leaders of American commerce and industry, to proclaim Iraq’s…

]]> burgessj@oilprice.com (James Burgess) Wed, 14 Dec 2011 23:54:39 GMT http://oilprice.com/Finance/the-Economy/Iraq-An-Army-Of-Soldiers-To-Be-Replaced-By-An-Army-Of-Businessmen.html What Does China's Reduction in Oil Imports and Trade Suggest? http://oilprice.com/Finance/the-Economy/What-Does-Chinas-Reduction-In-Oil-Imports-And-Trade-Suggest.html Several articles have come out recently drawing on November oil imports, trade and electricity data to suggest China is slowing rapidly and potentially heading for a hard landing. The FT reported this week that Chinese export and import growth both decelerated in November, suggesting Beijing could soon halt appreciation of the renminbi as a result. A move added some credence by comments made by the former vice-prime minister, Zeng Peiyan, and a senior delegation of Chinese business leaders to a New York gathering of hedge funds and bankers seen…

]]> Burnss@oilprice.com (Stuart Burns) Wed, 14 Dec 2011 23:31:20 GMT http://oilprice.com/Finance/the-Economy/What-Does-Chinas-Reduction-In-Oil-Imports-And-Trade-Suggest.html China’s Economy Threatened by Water Shortages http://oilprice.com/Finance/the-Economy/Chinas-Economy-Threatened-By-Water-Shortages.html Companies in China that use water efficiently will be better positioned to profit in an economy increasingly at risk from water stress and new water regulations, according to analysis by HSBC. Nine of China’s 31 provinces suffer from extreme water scarcity and 11 are very water inefficient, the bank says in its China’s rising climate risk report. The economies of 14 provinces could be at risk from water stress, because they rely heavily on manufacturing industries, it said. Government has recognised this and has responded with a target…

]]> cundy@oilprice.com (Christopher Cundy) Wed, 09 Nov 2011 23:57:57 GMT http://oilprice.com/Finance/the-Economy/Chinas-Economy-Threatened-By-Water-Shortages.html Rough Seas Ahead for Brazil's Booming Economy http://oilprice.com/Finance/the-Economy/Rough-Seas-Ahead-For-Brazils-Booming-Economy.html Brazil has fared better than most over the last year or two. True, the country does have a problem with inflation, which has proved stubbornly hard to contain, and a strong currency has caused severe problems for Brazil’s exporters. Yet the country has low unemployment (part of the reason they have strong wage inflation), robust growth, and a trade surplus of $20.3 billion in 2010. All is not quite as solid as it seems though, according to an FT article. Except for the export revenues of one company, that surplus would have been a deficit.…

]]> Burnss@oilprice.com (Stuart Burns) Mon, 07 Nov 2011 13:29:55 GMT http://oilprice.com/Finance/the-Economy/Rough-Seas-Ahead-For-Brazils-Booming-Economy.html The Stock Market's Dream Scenario http://oilprice.com/Finance/the-Markets/The-Stock-Markets-Dream-Scenario.html I’m sitting here with a mountain of technical analysis reports that are causing my desk to buckle this morning, all shouting “breakout”, “buy”, and “uptrend”. So I’m wondering, “is there a scenario out there where these might actually come to pass?” At this point I thought it might be useful to engage in what Albert Einstein called “thought experiments” and come up with a New Theory of Everything. In any case, you have probably all figured out that I am a frustrated novelist.…

]]> jimonline@irelandmail.com (Mad Hedge Fund Trader) Mon, 31 Oct 2011 4:59:32 GMT http://oilprice.com/Finance/the-Markets/The-Stock-Markets-Dream-Scenario.html Get Ready to Short the Euro Again http://oilprice.com/Finance/the-Markets/Get-Ready-To-Short-The-Euro-Again.html The financial markets exploded to the upside overnight with news of Europe’s triple resolution of their sovereign debt crisis. As I predicted in my letter only yesterday, the move has caught traders by surprise, enabling markets to break out to the upside from the recent ranges, and give this fall rally longer legs than most expect. As I write this piece, the (SPX) futures have popped to 1275, a new high for this move. Ten year Treasury yields have ratcheted back up to 2.26%, and the dollar is in full flight against a basket of currencies.…

]]> jimonline@irelandmail.com (Mad Hedge Fund Trader) Thu, 27 Oct 2011 20:55:26 GMT http://oilprice.com/Finance/the-Markets/Get-Ready-To-Short-The-Euro-Again.html 2012 and the Coming Financial Crises http://oilprice.com/Finance/the-Economy/2012-And-The-Coming-Financial-Crises.html It looks to me as though 2012 is likely to be a truly awful financial year, with several crises converging: 1. Either very high oil prices or recession,2. The US governmental debt limit crisis,3. The Euro crisis,4. The Chinese debt problem,5. Debt deleveraging in the US and elsewhere,6. Further MENA (Middle East/North Africa) political problems, and7. Conflict between need for greater resources and pollution issues. It seems to me that we may be reaching “Limits to Growth,” as foretold in the book…

]]> tverberg@oilprice.com (Gail Tverberg) Tue, 25 Oct 2011 12:44:08 GMT http://oilprice.com/Finance/the-Economy/2012-And-The-Coming-Financial-Crises.html European Debt Crisis: Is This the Beginning of the End? http://oilprice.com/Finance/the-Economy/European-Debt-Crisis-Is-This-The-Beginning-Of-The-End.html Almost exactly two years since the onset of the Greek debt crisis, the European Commission has set out to create a comprehensive strategy to rein in the crisis and return to a viable path of economic prosperity. The deadline: Sunday, October 23. With fiscal instability and credit contagion continuing to rock markets internationally, the world’s leading economies emphasized the need for immediate action at the recent G20 meeting. The group of finance ministers and central bankers pressured Europe on Saturday to “decisively address the…

]]> tsp@oilprice.com (Top Stock Portfolios) Thu, 20 Oct 2011 13:51:56 GMT http://oilprice.com/Finance/the-Economy/European-Debt-Crisis-Is-This-The-Beginning-Of-The-End.html The 65 Year Debt Bubble and a New Financial System http://oilprice.com/Finance/the-Economy/The-65-Year-Debt-Bubble-And-A-New-Financial-System.html When I write about high oil prices having an adverse impact on the economy, quite a few readers respond by saying, “No, most (or all) of the problem is a debt bubble.” They seem to think that poor underwriting of mortgages a few years ago allowed a debt bubble. Once this bubble is past, or some similar bubble, our problems will be over. I decided to see when the debt bubble really started. The answer surprised me–it appears that we have been building a debt bubble since at least 1945 (Figure 1 – based on Federal Reserve data).Figure 1.…

]]> tverberg@oilprice.com (Gail Tverberg) Wed, 12 Oct 2011 12:46:44 GMT http://oilprice.com/Finance/the-Economy/The-65-Year-Debt-Bubble-And-A-New-Financial-System.html