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/ Fri, 25 May 2012 3:24:54 GMT Oilprice.com (info@oilprice.com) Lunch with Paul Krugman http://oilprice.com/Finance/the-Economy/Lunch-with-Paul-Krugman.html The first thing I noticed when Paul walked in was the few extra pounds and silvery tinge to his hair he acquired since I saw him last. He's clearly spending too much time behind a computer writing those acidic columns for the New York Times. We're all short dated options in the end, I thought.We met at my favourite San Francisco restaurant, Gary Danko's (click here for their site at http://www.garydanko.com/), where one can get a once in a lifetime, bucket list type meal for about $300 for two, but only if you get the cheaper wine. Ideally located…

]]> (Mad Hedge Fund Trader) Thu, 24 May 2012 22:14:25 GMT http://oilprice.com/Finance/the-Economy/Lunch-with-Paul-Krugman.html World Banks have the Power to save the Global Economy, if they want to http://oilprice.com/Finance/the-Economy/World-Banks-have-the-Power-to-save-the-Global-Economy-if-they-want-to.html The global economy appears to be headed over cliff this year. The emerging world is experiencing a significant economic slow down, the Eurozone will probably break apart in the next few months, and the United States faces sharp austerity measures at the end of the year. There are enough bearish developments here to make the original Mayan calendar look prescient after all. So should we despair? Is the global economy fated to collapse in 2012?No, says Willem Buiter and Ebrahim Rahbari of Citigroup. Though the outlook…

]]> beckie@oilprice.com (David Beckworth) Wed, 16 May 2012 23:06:03 GMT http://oilprice.com/Finance/the-Economy/World-Banks-have-the-Power-to-save-the-Global-Economy-if-they-want-to.html The Strong Dollar Leads to a Fall in Commodity Prices http://oilprice.com/Finance/the-Markets/The-Strong-Dollar-Leads-to-a-Fall-in-Commodity-Prices.html Panic is on deck, to use the baseball terminology that my foreign readers are often attempting to decipher. That is the only conclusion one can reach after getting gob smacked by the price action this morning. Copper got spanked for eight cents, oil burned $2, gold shed another $26, and silver puked 70 cents. The tantrum like stock behaviour in producing and equipment companies, like Freeport McMoRan (FCX) and Caterpillar (CAT) has been atrocious. How many of you out there know that JP Morgan (JPM) is the largest holder of futures contracts in…

Read more...

]]> (Mad Hedge Fund Trader) Wed, 16 May 2012 23:00:32 GMT http://oilprice.com/Finance/the-Markets/The-Strong-Dollar-Leads-to-a-Fall-in-Commodity-Prices.html The Lack of Accountability that Allowed JPMorgan to Gamble Billions http://oilprice.com/Finance/the-Markets/The-Lack-of-Accountability-that-Allowed-JPMorgan-to-Gamble-Billions.html If I were to stake you $50,000 and set you loose in the world's largest casino, you might try your luck in a big way at a number of games to see if you could double or maybe even triple your good fortune. But it would be an entirely different matter if the $50,000 were your own money. You might decide to take advantage of the casino's restaurant for which you would at least get a meal in return for your money. And, you might even test your skills with a few hundred dollars. But unless you were a gambling addict, you would be on your way pretty…

]]> cobbi@oilprice.com (Kurt Cobb) Tue, 15 May 2012 23:04:45 GMT http://oilprice.com/Finance/the-Markets/The-Lack-of-Accountability-that-Allowed-JPMorgan-to-Gamble-Billions.html Is Constant Economic Growth Possible? http://oilprice.com/Finance/the-Economy/Is-Constant-Economic-Growth-Possible.html If we read the financial pages, economic growth seems to be viewed as the “normal” situation to which economies inevitably return. But is it really?If we look back over the past 50 years, or even over the past 100 years, economic growth has predominated. Over the longer term, we know that people have become more prosperous, and that world population has grown. The natural assumption is that economic growth will continue in the future as it has in the past.Let’s think about this a little further. We live on an earth with…

]]> tverberg@oilprice.com (Gail Tverberg) Wed, 02 May 2012 22:50:55 GMT http://oilprice.com/Finance/the-Economy/Is-Constant-Economic-Growth-Possible.html The Death of Global Integration http://oilprice.com/Finance/the-Economy/The-Death-of-Global-Integration.html The world's elites don't want to admit it. But the kind of global village that they have insisted on building--a vast free-trade paradise run by an ever more complex and opaque system of logistics and finance--isn't working, not even for many of them. The cost of maintaining this brittle, complex system and keeping the huge imbalances it creates at bay is becoming dizzyingly expensive.The consequences of those imbalances include heavily indebted countries such as Greece being driven into penury by the financial masters of Europe desperate to keep…

Read more...

]]> cobbi@oilprice.com (Kurt Cobb) Tue, 24 Apr 2012 21:16:55 GMT http://oilprice.com/Finance/the-Economy/The-Death-of-Global-Integration.html Noble Notion vs Reality http://oilprice.com/Finance/the-Economy/Noble-Notion-vs-Reality.html Seventy six years have passed since the first notion on taxing financial transactions first appeared under the pen of John Maynard Keynes in his study on Theory on Employment Interest and Money. But the idea to tax multi-billion financial transactions has remained yet to be implemented.The latest effort to introduce the financial transactions tax came from the very heart of the European Union.The European Commission, the executive arm of the EU, suggested last year in September that Europe should introduce a so-called Tobin Tax, a tax named after…

]]> (Vladimir Harman) Sun, 01 Apr 2012 15:43:50 GMT http://oilprice.com/Finance/the-Economy/Noble-Notion-vs-Reality.html When Hypotheses Are Worth Trillions http://oilprice.com/Finance/the-Markets/When-Hypotheses-Are-Worth-Trillions.html UK banking regulators and the representatives of major banks intensified their discussions on new and more rigid regulatory scheme concerning the setting and calculating the British Bankers Association's London InterBank Offered Rate (BBALIBOR). Libor, sponsored by the British Bankers Association, is the rate set for the inter-bank borrowing and lending transactions worth £220 trillion of securities a day and is produced for ten currencies with 15 maturities quoted for each currency - ranging from overnight to 12 months - thus producing 150…

]]> (Vladimir Harman) Sun, 18 Mar 2012 14:07:34 GMT http://oilprice.com/Finance/the-Markets/When-Hypotheses-Are-Worth-Trillions.html What the Greek Debt Crisis Tells us about Governance and Public Finances http://oilprice.com/Finance/the-Economy/What-the-Greek-Debt-Crisis-Tells-us-about-Governance-and-Public-Finances.html The Greek sovereign debt crisis has captured the attention of the world, both for what it says about the viability of the Euro and the EU integration project, but also for the warning signs it sends to governments around the world about governance and public finances. In the U.S., politicians both on the right and the left are using Greece as an example of how bad management of public finances can lead to economic catastrophe. In particular, for the right, Greece is at the edge of the abyss because of the bloated government bureaucracy, unreasonably…

Read more...

]]> diplomat@oilprice.com (Diplomatic Courier) Tue, 06 Mar 2012 23:05:07 GMT http://oilprice.com/Finance/the-Economy/What-the-Greek-Debt-Crisis-Tells-us-about-Governance-and-Public-Finances.html Ecological Economics: The Battle to Preserve the Natural World http://oilprice.com/Finance/the-Economy/Ecological-Economics-The-Battle-to-Preserve-the-Natural-World.html In September of 1982, a group of scholars met in Stockholm intending to reform -- even to revolutionize -- the study of economics. The new ecological economists saw the economy as embedded in, and supported by, natural systems; nature was not simply a factor in, but the foundation of, economic activity. By integrating models from ecology and economics, ecological economists sought to provide scientific arguments for preserving the natural world. The Stockholm meeting came at a critical time. During the 1970s, prominent environmentalists, encouraged…

]]> breakthrough@oilprice.com (Breakthrough Institute) Thu, 09 Feb 2012 22:27:48 GMT http://oilprice.com/Finance/the-Economy/Ecological-Economics-The-Battle-to-Preserve-the-Natural-World.html 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…

Read more...

]]> 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…

]]> (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…

]]> 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…

]]> 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…

]]> 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…

]]> (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