Hey, Donald, you are headed the same way as Obama. When he first took office, his party was the majority in Congress and he failed to get any of his campaign promises into law. He wasted his time by attempting to receive bi-partisan support. Now, let's look at you.
In-action
Do you know what your fellow American citizens read and hear everyday from your administration? Gossip! Nonsense!
We hear about the conflicted aspects of your financial investments and how they can cause the look of impropriety. We hear how you hire only the rich who cannot relate to the rest of us. You say that they are the best. We see them as people who use lobbyists and other means of influence for self interest. We hear how you mix your immediate family like your daughter or extended like your son-in-law and friends with confidential data. Then, you complain about leaks, spies, hacks and tapped phones.
Bring in the clowns! There is the circus: Bannon in, Bannon out. Nunes in, Nunes out. Will so-an-so pass Congressional approval? You need two more Fed appointees. Will you choose an easy money type for your stimulus package or a deficit hawk to stop the debt that could send us all into an economic collapse. In addition, the word surfaces about conflict within your cabinet. So, what do you do? You seize a geopolitical opportunity to which the military whispered into your ear...
Syria
Yeah, a good war against another hated dictator will unite everyone behind you and end all these little distractions. They are misleading you like they misled Bush and Obama. This is the status quo along with the "Deep State" taking you off what got you elected.
Election
You were elected by men and women who are sick and tired of us policing the world while ours falls apart. Many of these people probably did not vote in recent elections because Washington is out of touch with what matters, the economy and the pursuit of happiness. These votes were enough to get you over the hump. Not the Russians! Not with the help of your fellow Republicans! Just US citizens who can relate to what you said, "We have been losing our lunch to China, to NAFTA, and every trade deal." That you would end it one way or another, either by renegotiating or end the deal. That is your primary promise and that is why you won. So, stop letting every little comment become a distraction that consumes your time. Instead, concentrate on reading the fine print in those thousand page agreements and find an area to redo and do that. If you can't work within the framework of these deals, end them. Get back to focusing on your victory pledge and stop being led into inactivity by defending your ego. Your honeymoon is almost over. These distractions are being engineered by your enemies, the status quo. Wake up! It's the economy.
Tuesday, April 11, 2017
Wednesday, April 5, 2017
Risk Takers Going Hi-Tech
If I asked you to choose between two people, one a casino employer in Las Vegas and the other a farmer in rural America, who is the gambler? Who would you pick? The answer is the farmer. Yes, the employee could place a wager from time-to-time, but year in and out, farmers are the ultimate gambler.
Crystal ball
Farmers always have to lookout into the future to figure commodity prices, costs for each type of crop, growing season with climate and water. They will need crop insurance for a harvest many months from the day they begin planting. They truly have to know when to "hold'em and fold'em."
Calvary
Help is on the way. Hi-tech is going up the country and at the Agri-Tech Summit(yes, farmers have a hi-tech summit) new devices and gadgets were revealed. This is not new news as the big boys like DuPont, Dow and Monsanto have dominated the field for years with special GMO seeds, fertilizers and water measuring devices, but the demand is so great that startups are entering into the fray. One reason is the big boys want a big return, and are not interested in smaller markets. This is exactly where the new players are entering.
Dog Collars for Cows
Connecterra and Y Combinator are two firms with that approach cows with collars. It is like Fitbit for cows. These smart collars can detect diseases entering the cows food chain and treat them before it gets dangerous. They also monitor ovulation cycles to breed in a more smoothly manner or to find a wondering herd.
Of course, the big boys do not want to lose dollars and market share. Monsanto and Dow have developed funds to meet farmers needs and the application of technology. They started venture capital programs for tech to assist farmers. With that said, the old return factor still looms large. This is why farmers can relate to newer, risk taking companies like Drone Deploy. This firm uses drones to check pastures which saves time and wages. They are getting their shot. Drone Deploy also makes software to map out fields and that follow the growing season.
Another new company is Blue River Technology. They use cameras and computers to harvest crops more efficiently.
All these smaller firms can make adjustments on the fly, and they are quick to the market. It is why they are getting their market niche. They don't have the burden of higher management dictating company policy. This is an inside plus since farmers talk to each other and the word gets out. That point was not missed by another startup, Farmers Business Network. They answer challenges presented by farmers like hiring a sales force. They place their resources to the farmer both physically and online, virtually.
As for myself, I prefer Caribbean poker, but we all get hungry. The bottom line: From smart collars for cows, drones that map pastures, to online and virtual reality, hi-tech is in the farming business.
Crystal ball
Farmers always have to lookout into the future to figure commodity prices, costs for each type of crop, growing season with climate and water. They will need crop insurance for a harvest many months from the day they begin planting. They truly have to know when to "hold'em and fold'em."
Calvary
Help is on the way. Hi-tech is going up the country and at the Agri-Tech Summit(yes, farmers have a hi-tech summit) new devices and gadgets were revealed. This is not new news as the big boys like DuPont, Dow and Monsanto have dominated the field for years with special GMO seeds, fertilizers and water measuring devices, but the demand is so great that startups are entering into the fray. One reason is the big boys want a big return, and are not interested in smaller markets. This is exactly where the new players are entering.
Dog Collars for Cows
Connecterra and Y Combinator are two firms with that approach cows with collars. It is like Fitbit for cows. These smart collars can detect diseases entering the cows food chain and treat them before it gets dangerous. They also monitor ovulation cycles to breed in a more smoothly manner or to find a wondering herd.
Of course, the big boys do not want to lose dollars and market share. Monsanto and Dow have developed funds to meet farmers needs and the application of technology. They started venture capital programs for tech to assist farmers. With that said, the old return factor still looms large. This is why farmers can relate to newer, risk taking companies like Drone Deploy. This firm uses drones to check pastures which saves time and wages. They are getting their shot. Drone Deploy also makes software to map out fields and that follow the growing season.
Another new company is Blue River Technology. They use cameras and computers to harvest crops more efficiently.
All these smaller firms can make adjustments on the fly, and they are quick to the market. It is why they are getting their market niche. They don't have the burden of higher management dictating company policy. This is an inside plus since farmers talk to each other and the word gets out. That point was not missed by another startup, Farmers Business Network. They answer challenges presented by farmers like hiring a sales force. They place their resources to the farmer both physically and online, virtually.
As for myself, I prefer Caribbean poker, but we all get hungry. The bottom line: From smart collars for cows, drones that map pastures, to online and virtual reality, hi-tech is in the farming business.
Wednesday, March 29, 2017
Stock Market: Could Be Lumbering, Staggering, Stumbling,
...in the near future. "Come on, Sebastian! The market hits new highs month-after-month," you yell. In a normal rally, you would be correct, Sir as Ed would say to Johnny on the late night show, but this is a rally of expectation and the P/E ratio's are getting some influential people nervous. Then, you add this little survey that I will share with you and you can better prepare. By the way, this survey was concluded after the last Fed rate hike.
Report
This survey was conducted by Bank of America Merrill Lynch Global Fund Manager. The results show a record number of professional investors have concerns about the market. Speaking about the results of the survey, Michael Hartnett said,"34% of professionals, which is the most in 17 years, find the market overvalued. People are jumping in because they see gains and do not want to miss the move with little else to park their money."
Of course, if I was there, I would've suggested precious metals which are up 8% this year and with their money that could easily double, but outside of this blog, I am an unknown.
Anyway, Hartnett goes on to say, "There is also the new doubt that rising interest rates will make bonds look better and then, equities could take a hit. Investors feel that a rate of 3.5% on a 10-Year Treasury to be the inflection point."
Cash
The other aspect of this survey is cash. It is the most watched indicator in global investing. The inflection point here is if cash is below 4%, that equals greed. Buying is coming. If cash is above 5%, that equals fear. Selling and tightening is coming. At present, cash is 4.8%, and falling, but closer to tightening due to the high price of stocks.
So, if my brother, Sebastian is crazy, JFL says, "Crazy like a fox."
Report
This survey was conducted by Bank of America Merrill Lynch Global Fund Manager. The results show a record number of professional investors have concerns about the market. Speaking about the results of the survey, Michael Hartnett said,"34% of professionals, which is the most in 17 years, find the market overvalued. People are jumping in because they see gains and do not want to miss the move with little else to park their money."
Of course, if I was there, I would've suggested precious metals which are up 8% this year and with their money that could easily double, but outside of this blog, I am an unknown.
Anyway, Hartnett goes on to say, "There is also the new doubt that rising interest rates will make bonds look better and then, equities could take a hit. Investors feel that a rate of 3.5% on a 10-Year Treasury to be the inflection point."
Cash
The other aspect of this survey is cash. It is the most watched indicator in global investing. The inflection point here is if cash is below 4%, that equals greed. Buying is coming. If cash is above 5%, that equals fear. Selling and tightening is coming. At present, cash is 4.8%, and falling, but closer to tightening due to the high price of stocks.
So, if my brother, Sebastian is crazy, JFL says, "Crazy like a fox."
Wednesday, March 22, 2017
Death of Sovereign Rights
The foolhardy reason why the corporate world backs trade agreements is that it allows them to seek further profits with local governments who will back their endeavors even allowing local environmental harm. This is the evil side of capitalism because in seeking those profits, the actions of the company could cause harm to the region where they operate. Companies do not ledger an account for harm only litigation fees and insurance. This is why in my unpublished book, I advocate a three strikes and liquidate policy for corporations who commit three felonies against society. If we can punish for war crimes, we should be able to punish for corporate crimes. The bankers who caused the crisis of 2008 would hate me because I would ban them from operating in any banking enterprise for their sin. Of course, I would find them too, and $BIG. In addition, every bank who participated in the scheme would have one strike against them. But hey, that's me. I'm getting off the topic. However, I also use the meme in my work, "All things are connected." Now, you can understand my thinking.
TPP
We now know where the Donald stands on the Trans-Pacific Partnership. President Obama tried to pass it in the lame duck Congress. He has such a big ego that he can't see past it. The TPP like all trade agreements is anti-sovereign in nature. This is the main central point to these deals and why they are negotiated behind closed doors. It is the same reason why NAFTA, CAFTA, WTO and the IMF have such power. They took it from the every nation. It is the thinking of the One World people. The only good news in 2016 was the surprise results that opposed the thinking of the One World powers-to-be. With that said, the behind the scenes strength in that organization needs to be exposed and opposed. It is the reason why the Keystone XL pipeline got the "go" pass and the Sioux Nation lost in their battle in the Dakota's. No matter what Trump says in public, he knew that NAFTA would win in court. And get this, when NAFTA won, they could've got repaid all their legal fees from the US taxpayer. That is the cost of the loss of sovereign rights.
Small Print
The NAFTA trade agreement not only kills American workers, it circumvents American law. There is a clause in small print that takes away our ability as citizens to protect our workers and environment. It is this clause that Trans Canada knew could overturn any opposition in their planned pipeline. The clause automatically sends the case to a tribunal court. It is called, "Investor-State Dispute Settlement."
There are three judges. One from the corporation. Guess where he is going to vote? One from the opposing party which puts the deciding vote from the NAFTA appointed judge. Simple. We lose! Dear reader, it doesn't matter what local laws are on the books, they have no barring. Now, you know what an ego President Clinton has and how he has harmed our nation. He signed NAFTA. So far, Trump just says he wants deals to be renegotiated, but he never gives details like the hidden clause, Investor-State Dispute Settlement.
It gets worse...
under the agreement, if the opposing party loses, and now you know the system is rigged, that nation or party will have to cough up the court fees for the company that was opposed. In the case of the Keystone pipeline, the US taxpayer could get hit with a $15 billion cost. It is this clause that mega companies use to push ahead their deals like in Ecuador. The small third world nation could not afford their expensive court case. They ended up losing and the nation got hit with a $31 million court fees. How do you think the people of Ecuador feel about trade deals? How do you think the Sioux Nation feels about this corruption and another blow to Native Americans?
Will of the people...
Our founding fathers wanted to form a more perfect union and they feared a too big central government. It is why they had state rights in their thinking. Our federal government has circumvented state rights. Now, bureaucrats have circumvented central government. This is why we should drop all trade deals, drop out of the WTO and even NATO. For example, if Trump gets a stimulus infrastructure bill passed, he cannot state that all products like steel, concrete, etc. are American made. The WTO would sue us and they would win! The present make-up of all transactions limits or denies any protectionist measures. It is why I say, "All things are connected." It is another reason why we lost jobs and our standard of living has declined. This in turn lowers state revenues which means less money for our schools, roads and environment. This is the negative spiral that bureaucrats and the One World people have put on our nation.
TPP
We now know where the Donald stands on the Trans-Pacific Partnership. President Obama tried to pass it in the lame duck Congress. He has such a big ego that he can't see past it. The TPP like all trade agreements is anti-sovereign in nature. This is the main central point to these deals and why they are negotiated behind closed doors. It is the same reason why NAFTA, CAFTA, WTO and the IMF have such power. They took it from the every nation. It is the thinking of the One World people. The only good news in 2016 was the surprise results that opposed the thinking of the One World powers-to-be. With that said, the behind the scenes strength in that organization needs to be exposed and opposed. It is the reason why the Keystone XL pipeline got the "go" pass and the Sioux Nation lost in their battle in the Dakota's. No matter what Trump says in public, he knew that NAFTA would win in court. And get this, when NAFTA won, they could've got repaid all their legal fees from the US taxpayer. That is the cost of the loss of sovereign rights.
Small Print
The NAFTA trade agreement not only kills American workers, it circumvents American law. There is a clause in small print that takes away our ability as citizens to protect our workers and environment. It is this clause that Trans Canada knew could overturn any opposition in their planned pipeline. The clause automatically sends the case to a tribunal court. It is called, "Investor-State Dispute Settlement."
There are three judges. One from the corporation. Guess where he is going to vote? One from the opposing party which puts the deciding vote from the NAFTA appointed judge. Simple. We lose! Dear reader, it doesn't matter what local laws are on the books, they have no barring. Now, you know what an ego President Clinton has and how he has harmed our nation. He signed NAFTA. So far, Trump just says he wants deals to be renegotiated, but he never gives details like the hidden clause, Investor-State Dispute Settlement.
It gets worse...
under the agreement, if the opposing party loses, and now you know the system is rigged, that nation or party will have to cough up the court fees for the company that was opposed. In the case of the Keystone pipeline, the US taxpayer could get hit with a $15 billion cost. It is this clause that mega companies use to push ahead their deals like in Ecuador. The small third world nation could not afford their expensive court case. They ended up losing and the nation got hit with a $31 million court fees. How do you think the people of Ecuador feel about trade deals? How do you think the Sioux Nation feels about this corruption and another blow to Native Americans?
Will of the people...
Our founding fathers wanted to form a more perfect union and they feared a too big central government. It is why they had state rights in their thinking. Our federal government has circumvented state rights. Now, bureaucrats have circumvented central government. This is why we should drop all trade deals, drop out of the WTO and even NATO. For example, if Trump gets a stimulus infrastructure bill passed, he cannot state that all products like steel, concrete, etc. are American made. The WTO would sue us and they would win! The present make-up of all transactions limits or denies any protectionist measures. It is why I say, "All things are connected." It is another reason why we lost jobs and our standard of living has declined. This in turn lowers state revenues which means less money for our schools, roads and environment. This is the negative spiral that bureaucrats and the One World people have put on our nation.
Wednesday, March 15, 2017
America, Trump: Beware the Ides of March
I'm not a superstitious guy. I'm not afraid to walk under a ladder, worry if a mysterious black cat crosses my path or feel any apprehension on Friday the 13th. There are countless other clues to a "dark" day, but I don't follow them or let them get my goat. With that said, I do think that there is a vibe out in the universe and for some unknown reason, things happen on certain dates. Again, I'm not referring to a full moon scenario, but the human condition to fulfill what people believe will happen to happen. It becomes a self-fulfilling prophecy. March 15th is one of those dates. Maybe because the Bard of Avon is so influential in our culture. I don't know, but two important aspects to our economy will take place on Wednesday.
Would you like a second opinion?
Edson Gould
Ever hear of him? He formulated an economic conclusion that when the Federal Reserve made interest rate hikes, that the third hike would be the beginning of a recession and stocks would crash. This Wednesday should be the third interest rate hike by our central bank. The economy won't stop on that day if the Fed hikes, but the seed will be in the ground to germinate.
Still not convinced? How about this past presidential advisor to Ronald Reagan?
David Stockman
He sees a "bloodbath." He calls this Fed moment, "three steps and tumble." It is the same theory that says after the Fed raises rates three times, the economy tumbles.
Now, do I have your attention? I hope so because there is a second whammy on Wednesday.
Debt Ceiling
The US national debt limit under our Treasury, will expire on Wednesday. I don't foresee any problems with a Republican Congress to help a Republican president. However, the $20T in debt fulfills my prediction. In addition, our ability to repay will generate another possible self-fulfilling prophecy, could the US default?
Consider some related aspects to the date:
Trump wants an expensive, stimulus infrastructure package. He plays politics and allows or compromises with his fellow Republicans with their health care bill. We find out, and it didn't take long, for the Republicans to show their true colors. This has nothing to do with Sean Spicer wearing his American pin flag upside down. This bill sucks! Higher premiums and lower coverage! It is why I dislike or trust the GOP. They never do anything for ordinary citizens. I rather have no health care bill than this one or Obamacare. I was foolish to vote for Obama the first time because the idea of First Payer health plan was great. We didn't get it because the Democrats are corrupt! Now, Trump will learn the hard way that his fellow Republicans won't support tariffs or our workers. They view the world this way. We are management versus workers rather than let us do right and everyone wins. Anyway, you got the Fed hiking interest rates, the US getting deeper in debt, and this time bomb. I predict that the Federal Reserve will seek permission to buy stocks just like central banks in Japan, China and Europe. The fiat system has failed, but they are doing everything to keep it afloat. We are like Caesar, seeing knives coming at him and us from every direction. Sad days ahead.
Would you like a second opinion?
Edson Gould
Ever hear of him? He formulated an economic conclusion that when the Federal Reserve made interest rate hikes, that the third hike would be the beginning of a recession and stocks would crash. This Wednesday should be the third interest rate hike by our central bank. The economy won't stop on that day if the Fed hikes, but the seed will be in the ground to germinate.
Still not convinced? How about this past presidential advisor to Ronald Reagan?
David Stockman
He sees a "bloodbath." He calls this Fed moment, "three steps and tumble." It is the same theory that says after the Fed raises rates three times, the economy tumbles.
Now, do I have your attention? I hope so because there is a second whammy on Wednesday.
Debt Ceiling
The US national debt limit under our Treasury, will expire on Wednesday. I don't foresee any problems with a Republican Congress to help a Republican president. However, the $20T in debt fulfills my prediction. In addition, our ability to repay will generate another possible self-fulfilling prophecy, could the US default?
Consider some related aspects to the date:
Trump wants an expensive, stimulus infrastructure package. He plays politics and allows or compromises with his fellow Republicans with their health care bill. We find out, and it didn't take long, for the Republicans to show their true colors. This has nothing to do with Sean Spicer wearing his American pin flag upside down. This bill sucks! Higher premiums and lower coverage! It is why I dislike or trust the GOP. They never do anything for ordinary citizens. I rather have no health care bill than this one or Obamacare. I was foolish to vote for Obama the first time because the idea of First Payer health plan was great. We didn't get it because the Democrats are corrupt! Now, Trump will learn the hard way that his fellow Republicans won't support tariffs or our workers. They view the world this way. We are management versus workers rather than let us do right and everyone wins. Anyway, you got the Fed hiking interest rates, the US getting deeper in debt, and this time bomb. I predict that the Federal Reserve will seek permission to buy stocks just like central banks in Japan, China and Europe. The fiat system has failed, but they are doing everything to keep it afloat. We are like Caesar, seeing knives coming at him and us from every direction. Sad days ahead.
Wednesday, March 8, 2017
You Don't Know $hit from Liaoning
"I'm just a soul whose intentions are good, Oh Lord, please don't let me be misunderstood."
- Eric Burton and the Animals
If I offended anyone, pardon my French. The words of the old expression may have change, but the thought remains the same. In fact, the Chinese city will add a new twist, "You don't have to be profitable to remain in business."
Economic Hub
Dear reader, Liaoning is one of China's economic hubs. The problem seems to be that this region is inefficient and hires by who you know and not, by what you know. It leads the country in defaults and yet, its doors are open for business. You see, this is an another example of the lie of free trade. Every company is state supported in this fiat nation. You lose a million this quarter, a billion this year, no problem. Fiat daddy will cover it. This does not mean that there are no quality state sponsored companies because there are many in China, Asia and Europe. It just points out that there can be no fair trade in this global environment. Gresham's Law states that bad money(fiat) will drive out good money(precious metals). Sebastian's Law states that fiat entities will drive out free capitalist companies. This is why we need protectionism and if you disagree, you don't know $hit from Liaoning.
Liaoning is not alone, I could point out examples in France or Germany even Mexico. When one thinks about it, it is amazing how our free capitalist companies compete in this global environment. Yes, I know that our banks get the same fiat protections and I wish I knew what lawyers know about bankruptcy court because it too, seems to have some corrupt under linings. How can a company default, enter bankruptcy and then, reappear like GM and be back in business? I feel that it is totally wrong to steal from workers and investors and still be an on going concern. Even if the original debt is put off into some future date, it should be repaid if the company is still functioning, but that's just me.
Back to Liaoning
There were 125 bankruptcy filings in the province and Liaoning had one-half of all Chinese defaults last year. This is a classic example of state sponsored entities. None of these firms have to pay extra to find financing. They have the complicit understanding that the government will bail them out if necessary.
Case in point: Dalion Machine Tool Group defaulted. They do not respond to questions about their company. They, like hundreds of other Chinese concerns, just go about their way, whatever way that is.
A part of me wants to bring to light the plight of Notre Dame in a similar vein. For those of you who don't know or like the Irish, the school faces the same problem as our capitalist companies face with state sponsored competition. Notre Dame is a small, private school with a student population under 4,000. They compete with state sponsored schools like Florida or Michigan with over 45,000 students. If Florida needs new equipment, a lunch date with the local congressman gets it done. The same for Michigan, Ohio State and all the other excellent state schools. Not so for the Irish, they will sacrifice in some other part of the budget and yet, they compete on and off the field. The miracle is that every once in awhile, a Joe Montana comes along and we win it all. Thank you, St. Patrick(March 17th), Our Lady and of course, God.
Go Irish!
- Eric Burton and the Animals
If I offended anyone, pardon my French. The words of the old expression may have change, but the thought remains the same. In fact, the Chinese city will add a new twist, "You don't have to be profitable to remain in business."
Economic Hub
Dear reader, Liaoning is one of China's economic hubs. The problem seems to be that this region is inefficient and hires by who you know and not, by what you know. It leads the country in defaults and yet, its doors are open for business. You see, this is an another example of the lie of free trade. Every company is state supported in this fiat nation. You lose a million this quarter, a billion this year, no problem. Fiat daddy will cover it. This does not mean that there are no quality state sponsored companies because there are many in China, Asia and Europe. It just points out that there can be no fair trade in this global environment. Gresham's Law states that bad money(fiat) will drive out good money(precious metals). Sebastian's Law states that fiat entities will drive out free capitalist companies. This is why we need protectionism and if you disagree, you don't know $hit from Liaoning.
Liaoning is not alone, I could point out examples in France or Germany even Mexico. When one thinks about it, it is amazing how our free capitalist companies compete in this global environment. Yes, I know that our banks get the same fiat protections and I wish I knew what lawyers know about bankruptcy court because it too, seems to have some corrupt under linings. How can a company default, enter bankruptcy and then, reappear like GM and be back in business? I feel that it is totally wrong to steal from workers and investors and still be an on going concern. Even if the original debt is put off into some future date, it should be repaid if the company is still functioning, but that's just me.
Back to Liaoning
There were 125 bankruptcy filings in the province and Liaoning had one-half of all Chinese defaults last year. This is a classic example of state sponsored entities. None of these firms have to pay extra to find financing. They have the complicit understanding that the government will bail them out if necessary.
Case in point: Dalion Machine Tool Group defaulted. They do not respond to questions about their company. They, like hundreds of other Chinese concerns, just go about their way, whatever way that is.
A part of me wants to bring to light the plight of Notre Dame in a similar vein. For those of you who don't know or like the Irish, the school faces the same problem as our capitalist companies face with state sponsored competition. Notre Dame is a small, private school with a student population under 4,000. They compete with state sponsored schools like Florida or Michigan with over 45,000 students. If Florida needs new equipment, a lunch date with the local congressman gets it done. The same for Michigan, Ohio State and all the other excellent state schools. Not so for the Irish, they will sacrifice in some other part of the budget and yet, they compete on and off the field. The miracle is that every once in awhile, a Joe Montana comes along and we win it all. Thank you, St. Patrick(March 17th), Our Lady and of course, God.
Go Irish!
Wednesday, March 1, 2017
Texas Tea For Everyone
I told you a few weeks ago that even though the OPEC price cut deal is sill holding together, they forgot about the possibilities of the free market. The US is filling the void. This has not been reflected in the market price of oil as it remains in the low $50s. It won't stay there. The test will be at $47.85 and it will test that retracement. The volume in contracts at that time will tell us all we need to know. Check the facts:
* Rig count has reached the "magic" number of over 1000 in use in North America.
* 2017 oil inventory builds are 3x greater than the 10-year rate.
* US shale oil production is up. The Energy Information Admin(EIA) says it will approach 5m barrels by the end of March. If this happens, US production should hit 10m barrels = #1.
Now, here is two other tidbits that you can enjoy with your Texas tea.
Gasoline
US consumption is at its weakest in 15 years. Buyers use less gas than refiners need less oil. If you put this fact into the global picture, it makes global demand less due to the fact that the US uses 9% of all demand.
Could it be all those uncounted long-term unemployed? Could it be all the new electric cars and trucks? Could it be that vehicles get better gas mileage? Could it be that our military is downsizing? Our military uses more oil than most nations. No matter what, the fact that gas demand is down 5.5% YOY is all you need to know.
LNG
Now, here is the other shoe for prices to drop. It covers both sides of oil and gas.
Last week in Germany, Iran hosted the LNG & Gas Summit. Gazprom(OGZPY) had three representatives. Their company is the largest natural gas company. They were checking out the competition. They didn't like what they saw and learned. Iran is exporting LNG and at lower prices than Gazprom. Gazprom has long-term contracts, but they are tied to present prices. Their clients want new deals with cheaper prices. In addition, Gazprom has new pipelines with China and elsewhere, but roadblocks are surfacing. Not good for Gazprom or Russia, but great for consumers.
The EIA also reported that Iran and Iraq will both increase their oil production by over one million barrels by 2020. This is like a new large producer coming online and it will more than supply any future increase in demand.
Lower prices as supply builds EVERYWHERE.
* Rig count has reached the "magic" number of over 1000 in use in North America.
* 2017 oil inventory builds are 3x greater than the 10-year rate.
* US shale oil production is up. The Energy Information Admin(EIA) says it will approach 5m barrels by the end of March. If this happens, US production should hit 10m barrels = #1.
Now, here is two other tidbits that you can enjoy with your Texas tea.
Gasoline
US consumption is at its weakest in 15 years. Buyers use less gas than refiners need less oil. If you put this fact into the global picture, it makes global demand less due to the fact that the US uses 9% of all demand.
Could it be all those uncounted long-term unemployed? Could it be all the new electric cars and trucks? Could it be that vehicles get better gas mileage? Could it be that our military is downsizing? Our military uses more oil than most nations. No matter what, the fact that gas demand is down 5.5% YOY is all you need to know.
LNG
Now, here is the other shoe for prices to drop. It covers both sides of oil and gas.
Last week in Germany, Iran hosted the LNG & Gas Summit. Gazprom(OGZPY) had three representatives. Their company is the largest natural gas company. They were checking out the competition. They didn't like what they saw and learned. Iran is exporting LNG and at lower prices than Gazprom. Gazprom has long-term contracts, but they are tied to present prices. Their clients want new deals with cheaper prices. In addition, Gazprom has new pipelines with China and elsewhere, but roadblocks are surfacing. Not good for Gazprom or Russia, but great for consumers.
The EIA also reported that Iran and Iraq will both increase their oil production by over one million barrels by 2020. This is like a new large producer coming online and it will more than supply any future increase in demand.
Lower prices as supply builds EVERYWHERE.
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