This is about a bubble, alright.. a $US bubble brought to you buy the FED and created by the absolute dereliction of duty of financial regulators unable and unwilling to reign in the insane speculation of the Wall Street machine. Anybody remember Grisham’s law? Bad money chases out good money - precisely what has occurred as (bad) dollars have flooded the market while real goods(good money) - oil, beans, corn, gold, you name it, are being horded - not out of absolute scarcity but because of no confidence in holding $’s.

The Bush (aka anti- regulatory) mentality of leaving these markets to their own devices - specifically the investment banks - has forced the FED to continually monetize to the point where nobody wants to hold dollars, except those who must.

Until today, I discounted talk about Weimar like conditions possible here. The truth is that they are already upon us.

Wall Street is making, so what’s the problem?!?! I mean our government has sent the message loud and clear that as long as Wall Street makes money everything is just fine. With oil at $138.00 + Wall Street is making money, so who cares about main street or anyone else. As long as the rich get richer on Wall Street and the rest of the country suffers all is normal in the U.S.!! God this country is great!

Buy Jan 10 USO out-of-the-money puts. This will give you time and lower risk

Your article fails to note that DUG closed up today despite the oil price.

A good journalist would have mentioned this.

It is so funny when you see governments and newspapers claiming that oil is going up because of the speculators. What a moronic statement…
Here’s my question at what price is dirt selling on the wall street. How ’bout air? What does air trade on the wall street 200/barrel. It’s not trading at all is it. Why, because it is plentiful. If you could poke a straw in your back yard and get thousands of barrels of oil in an hour why would you buy a contract at 138.86/barrel?

It’s demand and supply, and all that politicians are trying to do is make you forget that demand is more than 86Million barrels/day that we can pump out.

The world cannot produce more and there is higher and higher demand for it. The implications of the peak production means that our GDP’s will have peaked as well, unless we improve GDP/barrel radio our real gdp will keep dropping which means permanent recession. THAT is what we are being shielded from with the outright lies about the price of oil being something other than supply and demand

Note on Nelson’s comment: So many times articles mention ETFs such as DUG without pointing out that they have very limited liquidity and often trade at big discounts or premiums to NAV. Nobody seems to want to write about the basis risk in these commodity ETFs. DUG closed today at about a 10% discount to NAV.

Time to Close Long Oil Contracts
.
I agree with Jeff Macke. There is plenty of oil on our planet. As I write, more wells are being drilled in Russia, China, Central America, Middle East, everywhere. The time to close long oil contract positions is NOW. If you wait, you will lose big time.
.
Pseudo analysts (whose firms are long on oil) predicting fake prices will not fool investors. Do not think so? Just wait till there are no buyers for your long contracts. Greed Kills.
.

Anybody who says this market isn’t being driven by Speculators is insane , as Bush.
Just look at today one Word from Morgan Stanley and and Oil shoots up over $11.00 in one day a new record. after falling to around 122.00.
With demand being down.
At this rate it will make the great Depression look , like a Birthday party.

No way. While the fundamentals have not changed enough in five months to justify a 50% price increase, it is important to remember what Lord Keynes said: The market can stay irrational longer than you can stay solvent.

Not that all of the peak oil arguments are irrational. We are definitely peaking, but the downward slope of the peak is not going to be too steep. After all, the Permean Basin was supposed to be tapped out completely by now, but companies have figured out how to get more out of it. Those mature fields are going to produce a lot longer than most people expect.

A friend of mine who works for the CIA told me a year ago that oil would be $140 per BBL now and I thought he was completely nuts. Today, he told me a middle east war with Iran involved was a given in a relatively short time. I think we are in huge trouble! He also said bringing back a draft was something that is being very seriously considered by the Bush administration and Mc Cain would follow through on this down the line

The spot price can be driven by speculators, since not a lot of buyers buy oil on the spot market. But the overall market is much too big. Consumers unexpectedly using 1% less gas would wipe all the speculators out if they were trying to force the price up artificially.

DUG traded 39 million shares today. Limited liquidity?

NAV is irrelevant if you’re buying at 26.

DUG is not a pure crude oil play.

Speculation? Sure, maybe… but what happens if Israel strikes Iran? $138 will look cheap. More wells are being dug, but more cars are coming on the streets in China, more food is being produced for our ever-growing global population… more of everything. Read Malthus.

Malthus? Nope, read me.

This is a bubble assisted by OPEC’s unwillingness to increase production. I am angry to the point to say: OPEC countries’ leaders go to hell. Let’s nuke out these villian countries altogether.

David David David….

Yesterday you ask if the bottom is in for financials and then the market plummets 395 points. Today you suggest that it’s time to short oil? I certainly hope you aren’t trading on your own advice. If (your) history is any indication we’re going to see oil liftoff on Monday.

This is totally beyond comprehension.
Why don’t our useless elected leaders crush the whole commodity market.
It is destroying our country,present day.
I love my country but it is destroying itself for the love of money or just pure greed.I’m tired of all the excuses.
Again,why won’t our Government stop this? Let’s go one better,when will the people of this country band together and hold these people responsible. Free market capatilism is fancy words to steal money.

The sky is falling.

CNN pushed 2 messages down America’s throat repeatedly, while oil was spiking:

1) Israel says and Israeli attack on Iran is “unavoidable”

2) Don’t pull money out of your 401Ks

What curious timing….

Rotmaster, spoken like a true Marxist. I hope you were just being overly emotional.

Greed is selfish, yes but speculation happens in every corner of humanity. People constantly hedge themselves. I’ll increase my life insurance later on, because I’m so healthy now. I’ll begin to save more for retirement after I buy my new car. I’ll have kids after I concentrate on my career. They’ll be plenty of time. As an investor, you should be looking at ways to capitalize on others selfishness.

Jealousy is evil. Free market capitalism is true equality for everyone. Take advantage of it.

Good luck, and best wishes.

Associated Press ignored Gates’ support for diplomacy with Iran, reported Obama is “inexperienced in foreign affairs”
In an article discussing Obama’s and McCain’s positions on direct diplomacy with Iran, the AP reported that “Condoleezza Rice, a key player for eight years in the Bush administration’s strategy to try to isolate Iran, told [the powerful Israeli Lobby] AIPAC that there is no point engaging Iran ‘while they continue to inch closer to a nuclear weapon under the cover of talks.’ ” The article did not note that President Bush’s secretary of defense, Robert Gates, has also reportedly said the United States should “sit down and talk” with Iran. http://mediamatters.org/items/200806050010?f=h_top

A lot of you are the same idiots who said the US is a market economy and the price of oil is irrelevant to the US economy. Ya I am still laughing at you not with you……..LOL

The EIA showed a worldwide net oil export decline, which started in 2006, accelerated in 2007, and as we expected appears to be accelerating further in 2008, led by catastrophic net export decline rates from Venezuela and Mexico to the US (annualized rate of -32%/year from 10/07 to 3/08). All of the foregoing is based on US Goverment (EIA) data.

This is really not that difficult–the rapid increase in oil prices is due to importers bidding for declining net oil exports, which are showing an accelerating decline rate.

For more info, do a Google Search for Net Oil Exports + Jeffrey Brown.

Why would so many of CNN’s reporters–with B.A.s in Communications (or Exercise Physiology)–urge Americans to keep their money in their 401Ks, today?

Oil soars back above $133/bbl on Israeli threats to Iran, dollar weakness…
…
…Prices shot higher on Friday after comments that an Israeli attack on Iranian nuclear sites looks ‘unavoidable’ from one of Prime Minister Ehud Olmert’s deputies.

Speculation has mounted in recent weeks that Israel could be planning a pre-emptive strike against Iran due to its refusal to bow to Western pressure to abandon uranium enrichment projects, which could be used to make nuclear weapons.

‘If Iran continues with its programme for developing nuclear weapons, we will attack it. The sanctions are ineffective,’ Transport Minister Shaul Mofaz told the Yedioth Ahronoth newspaper.

‘Attacking Iran, in order to stop its nuclear plans, will be unavoidable,’ said the former army chief who has also been defence minister.

Any attack on Iran would likely see the Islamic regime retaliate by witholding crude exports and targeting key oil transport routes in the Straits of Hormuz — where some 30 percent of global crude supplies pass through, analysts said.

‘The reports of the Israeli comments have seen a huge spike in oil prices,’ said Bank of Ireland (nyse: IRE - news - people ) analyst Paul Harris, though he argued any Israeli attack remained a remote possibility….

http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/06/afx5089523.html

I would mention another ETF to short crude. It is HOD on TSX. I think it’s wrong to short Oil and Gas company. If you want to short crude, be on the short side of future contract directly.

The price of oil will go down but it will go as high as $260 ppb first. The Russians, Venezuela’s Hugo Chavez and the Arabs (Saudi’s and Iran) are major players trying to keep the prices high. While we Americans sat in our chairs and did nothing Iran’s president Ahmadinejad visited Bolivia last September then went to meet Chavez openly challenging the United States. All these players supply $ and arms to keep Nigeria and other independent nations unstable. The rebels who are funded by the oil producers kidnap and shut down production, Venezuela’s Hugo Chavez and the Russians are investing hundreds of millions to the South American drug lords in a joint effort to make Mexico unstable. With every headline the speculators in the US bid up the price of oil. Speculators want to make money and do so by speculating.
Israel, now worried that the democrats have a chance to win the election will use force to knock out or slow down the production of Iran’s nuclear production before October. Iran will strike back and lob missiles and people at the tankers. Iran and other Muslim extremists will ratchet up the death toll of Americans in Iraq because they have to make the US draw down, elect a president who will run away and to keep Iraq unstable and not produce oil.
While they watch the US consumers pumping the $4 per gallon gas most American still purchase the daily $5 cup of coffee at Starbucks, until this model goes away they know Americans will still not make major changes in our oil habits. At $10 per gallon we will change our habits. When we Americans get cold this winter and find out that heating the Mc Mansions is going to cost $10,000 for the season we will look back and wished that we kept filling up the oil reserve and the speculators will have the funds to speculate and invest on starting to pump oil in the US.
The price of oil is high not because it is scarce now but because it will be shortly in the future.

Look people, oil is going to $200.00 by years end, because Goldman said so a few months ago.If your SUV is paid for, keep it. If you owe more than its worth, then it just sucks to be you! Fear and greed rule!!

Dollar loses 50% over the last two years, and is still dropping like a rock - makes all US debt worth… 50% less; makes Social Security liability worth… 50% less; makes all corporate and privately held debt worth… 50% less.

US conservancy interests (tree huggers) have prevented new drilling and new refinery development… while we (to this point anyway) have squandered the rest of the worlds energy resources.

Now if we could just get rid of the annoying middle and lower classes. Maybe they could eat their young…

From my 30 years crude oil demand size simulation, forecast, war, politic are not significat factor influend the price of oil.
Oil price is depnend on downstream furel, petrochemial , fibers and energy user, housing, auto, metal industries, which depend on seasonla witer, summer deamnd peak.
As I repeatedly warned on this blog since last Sept. that Fed ratea cuts to stimulatea the consumer demand
will drag dollar lower, push
winter, summer fuel demand,
Economic stimulus package further pusher consmer demand for gasoline , fuel in peak summer demand,
On top of that last two days economic outlook imprvement further drive up consumer demand for travel fuel.
This morning unemployment shot up to 5.5 %, further delay Fed’s rate hike decision
fighting inflation, cause dollar plunged to 1.58( predicted by me on this blog
earlier.
Speculators use this demand side relation to drive oil price 11 dollars.
It is not because Goldman analyst 150 dollar forecast.
Any traders, investment bank analyst will be able to use this equation to forecast 150 .
details can be found on
www.osawh.com/Globaloiln.htm
www.osawh.com/currency.html
www.osawh.com/centmaf.html

Our government has opened the door for Wall Street to recoup their mortgage woes by opening up unregulated energy futures markets. OTC here, ICE in Europe. They are letting the Fed have a run at public speculators and pension fund managers (the ones still left playing in the bigs) with bubble timing. I sure wish the FED would start slipping out the back door. We consumers are taking it on the chin here Mr. Bush.

Supply and demand Ha! Are you serious? When in Hattie’s was last time oil pricing had been driven by supply and demand? If the toilet backs up, it’s a good enough excuse bet up the futures price.

RE: Post-Katrina Refining Capacity in U.S.
.
During or after Katrina, the WSJ Editorial Page Editors (on their cancelled TV show) used to bemoan the dirth of oil refineries, as well as the Energy companies who profited by keeping them few, underfunded, and outdated.
.
How many oil refineries are operating as intended right now, and how many do we really need? Just how much does inadequate refining capacity help raise gas prices at the pump and raise the profits of Energy corporations/speculators?

Oil price will be traded in uptrend chanel this summer before July 4 th, and peaking off after rebate check running
out.
So we should usse optimal long short strategy through my
proactive structural dynamic
sulation relationship:
Long on every setback, and short on each peak.
We are nearing short term peak
early next week, for short,
followed by short term correction for long strategy.
details on
www.osawh.com/fund2008.htm
www.osawh.com/opthedge.htm

use dollar EURO for hedging
EURO will be trraded 1.54- 1.599, near term, oil correction as EURO approaching 1.99
www.osawh.com/currency.html

For those of us invested in foreign stocks it makes no sense to pull money out into dollars. It really makes no sense to pull money out period until the market recoups its losses over time. For those who are near retirement age and are still in stocks, sorry but bad timing.

The global monetary crisis is a very complicated issue with no one answer. The folks and policy makers giving advice reminds me of the scene in Talladega Nights when they are trying to get the knife out of Ricky Bobby’s leg with another knife. It’s that funny!

we’re phuked. we go through roughly 20.5mm barrels of oil a day, up ten points is an additional 75 billion dollars a year. if people are complaining about what the cost of the war in iraq is costing our country, double it and then some and now you know the oil effect. in 1998 oil went for $10/b. now it moves $10+/b in a single day. hello mad max…

While the sky falls, I recall that my (paid off) ‘88 Corolla gets 30 mpg while I walk to my $200k/year DOD job. BTW, real estate is up in my neighborhood. Greed and Fear? Bring it on!!

We need to drill, the drill more, open up our coasts, open up our national forests, help the energy companies get permit. The price of energy is our own fault from not investing in energy infrastructure. We need nuclear plants, wind, solar, and to get rid of the insanity of ethonal.

What you all need to do is junk your gas guzzling SUV’s, and walk more.

Stop abusing the energy supply and the shieks will have to drink their oil, cause we aint buyin.

Why are the future contracts so high? Are we expecting a world war or an OPEC oil embargo? This isn’t logical. India and China are using much more oil but Russia is pumping plenty for them. Something is amiss here.

when will the west use food as a tool to offset the money piling up in the oil producing nations that have no agricultural base

Hey Hats off to all you guys…nice commentary but to no use since I am still paying $4 /gal and preparing myself for $5/gal and hence filled up my gas tank with frustration. Thanks to our Mr. President and respect less congress.

It is cheap oil that has prevented investment in the alternative energy sector. If the price continues to rise, expect heavy investment into oil alternatives. Might be some opportunity there.

Between now and 2050, it’s estimated an additional 3 billion additional human souls may inhabit this small blue-green planet (over and above those that replace the dearly departed in that time). That’s an average 75 million extra mouths to feed, clothe and shelter each year. Or around 200,000 additional human births EACH DAY!
200,000 a day… There’s your problem.
Somethings got to give. And it’s so bloody obvious.

The only way to stop this oil price hike is to stop futures trading in oil.This has to be done immediately and this can only save the world.

Oil is being used as a weapon by Iran,VZ and Russia. Putin tricked Bush and wants to reestablish ‘Soviet Union’ and is using same tactics to do so. Puppet states and front groups do the dirty work while Putin closes the spigot to the West, which essentially raises the money to pay for it’s anti-US policy. Arab states are probably just enjoying the ride, but they must realize from experience that artificial shortages end badly. Russia is not an ally under Putin, and is in fact quite the opposite. Meanwhile, marxists in Mexico, funded by HuGo, prevent Pemex from expanding production. The Dems cry about the perception of the US , but we better stop being nice and do something to thwart czar Putin.

http://www.eia.doe.gov/emeu/ipsr/t21.xls

The sudden rise in oil is predominantly speculation and a result of spreading fear and spin on the real story. The US still consumes a large % of overall world demand. The total world oil demand is 85 million barrels (for a total world population of 6.7 billion). The US oil demand is 21 million barrels (for population of 300 million). China and India combined consume LESS than half of what US consumes. So all this stories about the “growing demand from emerging countries” is a bunch of BS. Put the numbers in perspective and the stories lose their credibility in a second.

The numbers I mentioned are very easy to verify, from official US Government websites…
EIA / DOE
CIA World book

“Joe Average”… your thinking seems average too. By your logic of the coming population explosion, every commodity should explode, not just oil. Hey all those 3 billion people will need a roof over their heads too. And while energy can be produced from a variety of other sources, I do not think we can produce more land mass. So by your logic, we should all start buying land and real estate, etc. This was the argument used at the height of real estate bubble, that the US population is increasing, more and more immigrants are coming to US who will need homes, etc. etc. And therefore the price of land simply cannot come down… Now what happened to that argument is history.

Again, the argument about the coming population explosion, about the rising demand by China, India, …. though true, they do not stack up to support the current oil prices.

Having said all this, the price of oil will probably go up some more in the short time frame before the reality hits and then longer term I fail to see how the oil can sustain >$100 price.

To all the folks that want the government to do something about commodities speculation I suggest you think about the last time the government tried to set oil prices. It was a fiasco. If the government tries to control the oil and commodities market it will go overseas, in a hurry. Along with it will go all the people who know why oil and commodities are so nuts right now. Wake up folks. It’s the government debt! If we sit tight, the government tightens it belt and the Fed raises rates we might just survive this mess. It will mean a hell of a rescession and or depression but how would you like to wake up tomorrow and find out everything America saved for retirement (which ain’t much boomers…) isn’t worth squat. If I was in my 40’s, 50’s, or above I’d be seriously concerned.

A small drop in the US oil demand, more than offsets any large demand by rest of the world combined.

Shorting oil or natural gas ahead of the hurricane season is a recipe for losing your shirt. If we had a Hurricane Katrina/Rita sequence price could instanteously rise 25% in a few days. At these lofty levels that means nearly $35/bbl. The energy trading world is a different place than it was five years ago. Now there are tens/hundreds of billions of “long” money in commodity indicies (GSCI), commodity ETFs (USO)and commodity funds (QRAAX. In addition every bank and Wall Street house now has staffed large trading desks. Then there has been an exponential growth in commodity hedge funds. It is easier than ever to trade because of the CME’s electronic Globex trading system and institution can readily trade through the ICE internet based electronic system. So there are more players and its easier to trade. The acutal physical market has only grown 2-3% per annum yet the financial markets have grown 25-50% per year. With all this money chasing returns news and event shocks are exaggerated or self-fufilling. Shorting oil is like shorting dot-com shares as the market grew exponentially from 1997-2000.

There is no one magic solution to the problem. We need to increase supply (ANWR drilling) and find alternatives (nukes, solar, geothermal, wind and waves.) We need to limit demand by enforcing mileage standards. Prices need to rise to create demand destruction. The government could and should eliminate section 1240 of tax code that treats 60% of futures trading as long-term capital gains even if they are held less than 1 year. The CFTC should consider eliminating hedge exemptions on the number of futures contracts held. The CFTC should raise margin requirements from approximately 15% of the underlying price to 50% like equities. Congress should consider taxing the profits from financial energy trading at the maximum marginal tax rate of 35%. Efforts need to be coordinated with the UK because it is the only other location in the world that has the capacity to accommodate large financial energy trading.

Instead of these stupid calls by the Democrats to have windfall profits taxes on oil companies and limits on drilling and limits on refineries and nuclear plants; and in addition granting tax incentives to business for buying gas guzzler pickup, SUVS. The US should develop a comphrensive energy plan with Europe, China and India to encourage slower demand growth, limit rampant financial speculation and seek alternative to oil for transportation. Unfortunately, the do nothing Congress of Pelosi and Reid and the know nothing executive branch of Bush and Cheney have not be able to walk across the aisle and do whats good for America and the rest of the world. All they can do is bicker and complain. Good government is about compromise and about solving problems for the long-term. Its not about polls or ideologue its all about common sense. It is not possible to have the cheapest energy and being most available and be completely pollution free. Its about making trade-offs.

High oil prices…let’s thank to the morons who elected Bush to the White House.

Vote for McCain and the US troops will continue in Irak, vote for Obama and hopefully the troops will return home. With the unnecessary expenditure of having the troops in Irak upon US taxpayers, the US dollar will appreciate against other currencies, and therefore oil price will stop levitating.

On top of that, you can contribute by not driving your SUVs!

America, it is time to walk or use mass transportation …..

Yesterday’s and Thursday’s action in the futures market was probably largely due to massive short covering. I’m sure a lot of traders/funds/prop desks that were short CL and the refined products expecting a sharp fall to below $100 must have gotten hurt really badly. We’ll soon hear of major Amaranth-like blow-ups.

We don’t get that much oil from the middle east. Most comes fromm Canada and Mexio: - Maybe the people driving oil are those who want to destroy this country, why would’ t the oil producing countries who want the USA ruined be driving oil option…and doing it with our money. They will be getting the money. WHats this called in the market whree buyers and sellers enter orders to drive up prices.

One factor to note with the June 2008 international oil markets is the credibility of quality light oil supplies. I suspect the oil being pumped is trending to heavier grades and obviously costs to upgrade to light oil levels are considerable.
I would not invest against the market values of consumable oil.

WALK MORE, GET RID OF S.U.V,S AND EVERYONE WILL BE HEALTHIER!

I wonder how much of the windfall gains that our middle-eastern friends have made have found their way back to the futures markets and/or hedge funds, etf’s, etc. ?

Osama’s main goal was to take down the US economy — Hope all you speculators feel good about this.

I return to earlier comments about Malthus, and then further down from Joe Average. All of these issues are getting out of hand because of excessive global population of humans. Humane steps are needed, and rapidly, to restrain the amount of human population. It dawned again on me just this past week that China has taken at least some such steps (one child policy) that other nations including the U.S. have not had the decisiveness to address.

Oil prices have risen in the the US in last three years because of reduced net oil exports from producing nations, the decline in the purchasing power of the dollar by 50%, our relatively inelastic demand for oil and the fact we are so slow to exploit the reserves we have. The Fed has much more to do with the problem by a long shot than speculators.

If we attack Iraq to make the world safe for democracy perhaps we should instead think about joining forces with Israel to attack an oil producing nation to get our own oil fields, now that our moral currency has gone the way of the dollar with Baby Bush at the helm.

One bubble to the next. Yeah yeah strong demand. Greedy pigs making money off the backs of everyone else. Hmm goldman and morgan seem to think it’s going up. Let’s see they already inflated one bubble and now that those CDO margins are gone they are looking elsewhere. Open your eyes and watch another bubble bust in front of you. How do you think these investment banks are going to make money now? The sweet days of packaging junk and selling it off to suckers is over. Now they just post a new report and let everyone else do the work for them. Jump aboard LOL.

What is worse than very high oil prices? Not being able to get oil at any price. Or, more precisely, when world oil supply does not meet world oil demand, some portion of the world oil market will not get oil. Period. At that point it does not matter what the oil price is. Some users of oil will not get oil. Period.
That is when the real pain begins. What country will allow its people and economy to get the short end of the stick….United States, China, India, Japan? What we face now is a bidding war for oil. Let’s hope it can remain a bidding war, and not a real war.
Up to this point, the hysteria over oil has focused on the effect of high oil price. However, we are moving toward an even worse situation, where some people and some businesses will simply not be able to purchase oil because the supply does not meet the demand. The point at which higher oil prices does not bring more oil supply to the market will be the tipping point. Maybe we are at this tipping point now, If not, we seem to be fast approaching it.
In today’s world of expensive replacement oil, oil supply can not be increased by simply turning a faucet. You have to build a new billion $ offshore faucet, waiting ten years before oil flows from the faucet. In the short run, there is no practical substitute for oil (ethanol is an example of an impractical substitute that does more harm than good by raising food prices).
There is no oil crisis so severe that it can not be made excruciatingly more painful by government actions to solve the oil crisis. Exhibit 1 - the ethanol fiasco.
My greatest fear is that next week the President and Congress will outdo each other with more boondoggle proposals to solve the oil crisis. You think the speculators are putting you in pain. Wait til the President and Congress show you what real pain is.

In the past, a sharp slowdown in the US economy, the world’s biggest oil guzzler, usually pushed the price of crude oil and other commodities lower. But the Fed was caught by complete surprise after crude oil prices doubled, even as America’s economy slipped into a recession in the first quarter. “The current oil price has no relation to market fundamentals,” explained Saudi oil chief Ali al-Naimi on March 5th. “It is linked to tremendous speculation in crude oil futures. There are even those who buy futures and speculate that oil prices will reach $200 in 2013,” he said.

On April 28th, OPEC chief Chakib Khelil observed that crude oil prices were climbing, “even though supply is adequate, because the market is driven by the dollar’s slide. Each time the dollar falls 1%, the price of the barrel rises by $4, and of course vice versa. If for instance, the US dollar would strengthen by 10%, it is probable that oil prices will fall by 40%,” he figured.

Spekulator2, such simple logic has its limitations. China, India, Russia and the Middle East combined, are now consuming more crude oil than the US, burning 20.7 million barrels a day, up 4% from a year ago, according to the IEA. The emerging economies are picking-up the slack in the oil market, more than offsetting a 1.3% contraction in US oil demand to 20.3 million barrels this year. Thus, a mild recession in the Western economies and Japan might not weaken global demand for oil.

If oil price is a bubble, the speculators leave when the bubble bursts. But the laws (like the ethanol fiasco) enacted by the President and Congress remain and inflict pain on consumers, taxpayers, and the economy long after the bubble bursts.

Remember Lee Iacocca, the man who rescued Chrysler Corporation from its death throes? He is now 82 years old and has a new book. Here are some excerpts:
‘Am I the only guy in this country who’s fed up with what’s happening? Where the hell is our outrage? We should be screaming bloody murder. We’ve got a gang of clueless bozos steering our ship of state right over a cliff, we’ve got corporate gangsters stealing us blind, and we can’t even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, ‘Stay the course.’

Stay the course? You’ve got to be kidding. This is America, not the damned ‘Titanic.’ I’ll give you a sound bite: ‘Throw all the bums out!’

You might think I’m getting senile, that I’ve gone off my rocker, and maybe I have. But someone has to speak up. I hardly recognize this country anymore.

The most famous business leaders are not the innovators but the guys in handcuffs. While we’re fiddling in Iraq, the Middle East is burning and nobody seems to know w hat to do. And the press is waving ‘pom poms’ instead of asking hard questions. That’s not the promise of the ‘America’ my parents and yours traveled across the ocean for. I’ve had enough. How about you?

I’ll go a step further. You can’t call yourself a patriot if you’re not outraged. This is a fight I’m ready and willing to have. The Biggest ‘C’ is Crisis! (Iacocca elaborates onnine C’s of leadership - crisis being the first.)

Leadership is forged in times of crisis. Leaders are made - not born. It’s easy to sit there with your feet up on the desk and talk theory. Or send someone else’s kids off to war when you’ve never seen a battlefield yourself. It’s another thing to lead when your world comes tumbling down.

On September 11, 2001, we needed a strong leader more than any other time in our history. We needed a steady hand to guide us out of the ashes.

A Hell of a Mess So here’s where we stand.

We’re immersed in a bloody war with no plan for winning and no plan for leaving..

We’re running the biggest deficit in the history of the country.

We’re losing the manufacturing edge to Asia, while our once-great companies are e getting slaughtered by health care costs.

Gas prices are skyrocketing, and nobody in power has a coherent energy policy.

Our schools are in trouble!

Our borders are like sieves.

The middle class is being squeezed every which way. These are times that cry out for leadership.

But when you look around, you’ve got to ask, ‘ Where have all the leaders gone?’ Where are the curious, creative communicators? Where are the people of character, courage, conviction, omnipotence, and common sense? I may be a sucker for alliteration, but I think you get the point.

Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo?

We’ve spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened.

Name me one leader who emerged from the crisis of Hurricane Katrina.
Congress has yet to spend a single day evaluating the response to the hurricane, or demanding accountability for the decisions that were made in the crucial hours after the storm. Everyone’s hunkering down, fingers crossed, hoping it doesn’t happen again.

Now, that’s just crazy. Storms happen. Deal with it. Make a plan. Figure out what you’re going to do the next time. Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing. Who would have believed that there could ever be a time when ‘The Big Three’ referred to Japanese car companies? How did this happen, and more importantly, what are we going to do about it?

Name me a government leader who can articulate a plan for paying down the debit, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry.

I have news for the gang in Congress:
‘We didn’t elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity.’

What is everybody so afraid of? That some bonehead on Fox News will call them a name? Give me a break. Why don’t you guys show some spine for a change?

Had Enough?
Hey, I’m not trying to be the voice of gloom and doom here. I’m trying to light a fire. I’m speaking out because I have hope; I believe in America. In my lifetime I’ve had the privilege of living through some of America¢s greatest moments. I’ve also experienced some of our worst crises: the ‘Great Depression’, ‘World War II’, the ‘Korean War,’ the ‘Kennedy Assassination,’ the ‘Vietnam War,’ the 1970’s oil crisis, and the struggles of recent years culminating with 9/11.

If I’ve learned one thing it’s this:
‘You don’t get anywhere by standing on the sidelines waiting for somebody else to take action. Whether it’s building a better car or building a better future for our children, we all have a role to play. That’s the challenge I’m raising in this book.’

It’s a call to ‘Action’ for people who, like me, believe in America. It’s not too late, but it’s getting pretty close. So let’s shake o ff the crap and go to work. Let’s tell ‘em all we’ve had ‘enough.’

Make your own contribution by sending this to everyone you know and care about. It’s our country, folks and it’s our future OUR FUTURE IS AT STAKE!

“THROW ALL THE BUM’S OUT”

MEANING THE ONES WE PUT IN OFFICE!!!!!!!!!

I’m doing my part to save gas. Every time I’m rushed to the hospital, I insist on a hybrid ambulance.

FOR ALL THE BUSH HATERS

I am NOT a Bush supporter but I do think there are some good points made here by Jay Leno (of all people) that we all should read.

Jay Leno on President Bush

No matter what your political convictions are, this is an eye opener. What
a thankless people we are!!!
Jay Leno on President Bush (Surprising) it’s the Jay Leno we don’t often
see….

“As most of you know, I am not a President Bush fan, nor have I ever been,
but this is not about Bush, it is about us, as Americans, and it seems to
hit the mark.
The other day I was reading Newsweek magazine and came across some Poll
data I found rather hard to believe. It must be true given the source,
right?

The Newsweek poll alleges that 67 % of Americans ar e unhappy with the
direction the country is headed and 69 % of the country is unhappy with the
performance of the President. In essence 2/3 of the citizenry just ain’t
happy and
want a change. So being the knuckle dragger I am, I started thinking, “What
are we so unhappy about?”

A.. Is it that we have electricity and running water 24 hours a day, 7 Days
a week?

B.. Is our unhappiness the result of having air conditioning in the summer
and heating in the winter?

C.. Could it be that 95.4 % of these unhappy folks have a job?

D.. Maybe it is the ability to walk into a grocery store at any time and see

more food in moments than Darfur has seen in the last year?

E.. Maybe it is the ability to drive our cars and trucks from the Pacific
Ocean to the Atlantic Ocean without having to present identification
papers as
we move through each state?

F.. Or possibly the hundreds of clean and safe motels we would find along
the way that can provide temporary shelter?

G.. I guess having thousands of restaurants with varying cuisine from around

the world is just not good enough either.

H. Or could it be that when we wreck our car, emergency workers show up and
provide services to help all and even send a helicopter to take you to the
hospital.

I.. Perhaps you are one of the 70 % of Americans who own a home.

J..You may be upset with knowing that in the unfortunate case of a fire, a
group of trained firefighters will appear in moments and use top notch
equipment to extinguish the flames, thus saving you, your family, and your
belongings.

K.Or if, while at home watching one of your many flat screen TVs, a burglar
or prowler intrudes, an officer equipped with a gun and a bullet-proof vest
will come to defend you and your family against attack or loss.

L . This all in the backdrop of a neighborhood free of b ombs or militias
raping and pillaging the residents. Neighborhoods where 90% of teenagers own

cell phones and computers.

M.. How about the complete religious, social and political freedoms we enjoy

that are the envy of everyone in the world?
Maybe that is what has 67% of you folks unhappy.

Fact is, we are the largest group of ungrateful, spoiled brats the world has

ever seen. No wonder the world loves the U.S. , yet has a great disdain for
its citizens. They see us for what we are. The most blessed people in the
world who do nothing but
complain about what we don’t have, and what we hate about the country
instead of thanking the good Lord we live here.

I know, I know. What about the president who took us into war and has no
plan to get us out? The president who has a measly 31 % approval rating?
Is this
the same president who guided the nation in the dark days after 9/11? The
president that cut taxes to bri ng an economy out of recession? Could this
be
the same guy who has been called every name in the book for succeeding in
keeping all the spoiled ungrateful brats safe from terrorist attacks? The
commander in chief of an all-volunteer army that is out there defending
you and me?

Did you hear how bad the President is on the news or talk show? Did this
news affect you so much, make you so unhappy you couldn’t take a look
around for
yourself and see all the good things and be glad? Think about it……are
you upset at the President because he actually caused you personal pain
OR is
it because the ‘Media’ told you he was failing to kiss your sorry
ungrateful
behind every day.
Make no mistake about it.
The troops in Iraq and Afghanistan have volunteered to serve, and in many
cases may have died for your freedom. There is currently no draft in this
country. They didn’t have to go. They are able to refuse to go and end up
with
either a “general ” discharge, an “other than honorable” discharge or,
worst
case scenario, a ”dishonorable” discharge after a few days in the brig.

So why then the flat-out discontentment in the minds of 69 % of Americans?

Say what you want, but I blame it on the media. If it bleeds it leads and
they specialize in bad news. Everybody will watch a car crash with blood and

guts. But how many will watch kids selling lemonade at the corner?

The media knows this, and media outlets are for-profit corporations. They
offer what sells, and when criticized, try to defend their actions by
‘justifying’ them in one way or another. Just ask why they tried to
allow a murderer
like O.J. Simpson to write a book about how he didn’t kill his wife, but if
he did he would have done it this way……Insane!

Turn off the TV, burn Newsweek, and use the New York Times for the bottom of

your bird cage. Then start bei ng grateful for all we have as country! There

is exponentially more good than bad. We are among the most blessed peoples
on Earth and should thank God several times a day, or at least be
thankful and
appreciative. With hurricanes, tornados, fires out of control, mud slides,
flooding, severe thunderstorms tearing up the country from one end to
another,
and with the threat of bird flu and terrorist attacks, ‘Are we sure this is
a good time to take God out of the Pledge of Allegiance?’

Jay Leno

Bravo, Jay Leno. I’m sick of hearing geedy, spoiled brats complain about how tough times are. Bravo.

DUG price tends to mirror the inverse of the OIH, since it is short gas and oil companies. As noted by some of the MANY blog responses to today’s $11-highest-in-one-day
Oil move, the volume in DUG was huge 6/6 and also on 5/21, 5/22, 5/23 when it hit 26. Smart money is building a position in what will inevitably be a huge correction in oil. Remember, despite the current “story” this commodity can move down just as fast as up. And when they all rush to the exit, don’t get trampeled by greed.

Another ETF to consider - DCR - which is directly (with premium and broken model) inverse to price of crude. Although it is trading with HUGE option premiums as the psychology oscillates between euphoria and absolute terror.
It’s terminating 6/25 just for a little more pressure to add to the Iran/Nuclear, MS 150 call (hate them), and the airlines all chapter 11 as the 150 mark builds to its
prophesied level.

Hummer for sale - you buy the gas.

TO “Lee Iacocca excerpt”

Okay, so you are quoting some 82 year old senile who is fed up with the country and overall direction.
For anyone who has ever stepped outside the country, especially the developing world really knows what the reality is. Yes, these countries are coming up and making headlines, but again to keep things in perspective they are no where close to where US stands today from every single aspect - the resources, infrastructure, education, the innovation and entrepreneurial environment etc. etc. You probably have never set foot in a “public school” in China or India and compared them to the public schools in the US. For those of you who complain about infrastructure in the US, go travel some in rest of the world. China likes to show case their gleaming towers and highways but that is all limited to less than 5% of the country. Hundreds of millions live in abject poverty, whose pictures and stories you won’t read on CNN or Fox News. Many countries literally have to fight to get decent drinking water, let alone water much needed for development and industries.
Bottom-line, NO the sky is not falling upon US. There are some economic weaknesses, no question about that.

Let Lee Iacocca comment for himself, he’s not the only person with a brain. The whole world is going thru this financial mess. Even as we are headed south the rest of the world is too, it’s just that we are and will be better off than all the rest. Don’t be such a whimp. Go listen to Hank Williams Jr. “A country boy can survive” survive”

people should keep their blogs shorter

You people are all in denial! It’s hilarious. The economy is dead and quoting Jay Leno with some ditzy bravado isn’t going to help. Disaster is too mild a word for what is about to unfold. I love the smeall of chaos on a Saturday morning,
You’re all doomed with that wothless piece of feces called a dollar. Get out of denial and hunt possum with the country boy can survive while he plays deliverance for you on the banjo. Maybe he’ll share a little meat with you - HAHAHAHAHAHA, it will be your new steak. See you all later, I’ll be coming to your neighborhood and workplace soon.

Cui bono? (who benefits?)

Let’s see…
People who have oil to sell. That’s who.

Russia. Iran. Iraq. Saudi Arabia. Weatern Oil companies. Unrest in the middle east feeds the oil bubble. Bush, Putin, Ahmadinejad, The Saudis. All benefit.

Islamic extremists are patsys.
They’re happy to be given an opportunity to martyr themselves. The status quo benefits too many powerful concerns. And the people are playing into their hands.

They know that their opportuity to profit from their precious oil will fade with the invention of alternative energy sources.
The unrest that we are experiencing lets them cash out at the highest prices.

We all need to get back to basics…oil is going away, that is without a doubt. Supply/demand is a fundamental that can’t be argued with. Demand is increasing exponentially, supply is finite. Yeah, futures traders will make their money now, but the oil is still going away. Use mass trans, ride your bike, walk, get a horse and buggy. The industrial revolution is coming to an end and we are entering a new era. Yeah, it’s painful, like the ice age was, but we’ll get through it and life will go on. Back to basics - those of us who get it now won’t go through withdrawal later on when it reaches the crisis point. The U.S. dominated the earth for about 200 years and exploited the less fortunate in order to build our own wealth - those countries have not forgotten and now they take great pleasure in seeing the great U.S. fall to its knees. We need to get it together as a country - those once third world nations that are now increasingly powerful entities will swoop down upon us like vultures when they smell weakness. Check out the Interfor website for commentaries on the naivete of the U.S. as regards homeland security. It’s an eye opener. George should be holding fireside chats instructing Americans on how to get through these turbulent times. We need leadership, unfortunately there are no great minds alive today to my knowledge. Let’s all to go to church tomorrow and pray for our planet.

Congress neutered the Commodities Futures’ Trading Commission and pandered to Wall Street and Pig Oil with enormous loopholes allowing, no, ENCOURAGING, unbridled gambling with energy and food. No matter whether its the FDA, FAA, USDA, SEC etc, CONGRESS has ‘FEMAed’ America in the insatiable greed for lobbyist campaign money. You can change history, and Congress, in November, if you’re not a Party stooge.