Bear Stearns

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[quote author="morekaos" date=1213659164]feeding frenzy

"Oil Rally Topped Dot-Com Craze in Speculators' Mania"



http://www.bloomberg.com/apps/news?pid=20601087&sid=a9wRqtCtGjZY&refer=patrick.net#</blockquote>


I read today that the oil ETF and the gold ETF are two of the most heavily shorted ETFs in existence.


Also, it seems the overwhelming majority of sentiment thinks the price of oil is too high.


Now for my own theory which starts with facts: The Chinese central bank stopped buying US treasuries about nine months ago. The Chinese need and want energy and oil desperately. The Chinese have been bidding on Canadian oil stocks.


My speculation: The price of oil has been rising radically because instead of storing dollars, (buying US treasures), the Chinese are buying oil futures contracts. Lots of 'em. And they aren't speculating. They have been and will continue to take delivery.
 
I know quite a few institutional oil traders. Not the clowns who have entered the market recently. These guys are seasoned traders for most of the major oil companies and tanker co's. These guys are laughing at this spike. The more the futures rise the more the buyers stockpile in order to protect themselves from future rises in price, the less it seems supply looks the more spooked the traders get and so on and so on. There is no real world shortage. There is a massive bubble of supply that is just looking for a reason to pop. The fed did it to the real estate market by raising rates. It may do it again to this one
 
zeroing in on the culprits...lock and load



WASHINGTON, June 17 (Reuters) - The U.S. Commodity Futures

Trading Commission is concerned that big investment banks like

Goldman Sachs GS and Morgan Stanley MS could be

attempting to evade position limits on oil trading through swap

deals, the agency's chairman said on Tuesday.

Walter Lukken, acting chairman of the CFTC, said the agency

had "concerns that people are trying to evade position limits

through swap dealers," which include five to 10 big U.S.

investment banks.

But raising trading margins on crude oil contracts, as some

in the U.S. Congress have advocated, could set a "dangerous

precedent" and drive players to less regulated markets

overseas, Lukken said.

(Reporting by Chris Baltimore)
 
[quote author="morekaos" date=1213743855]zeroing in on the culprits...lock and load



WASHINGTON, June 17 (Reuters) - The U.S. Commodity Futures

Trading Commission is concerned that big investment banks like

Goldman Sachs GS and Morgan Stanley MS could be

attempting to evade position limits on oil trading through swap

deals, the agency's chairman said on Tuesday.

Walter Lukken, acting chairman of the CFTC, said the agency

had "concerns that people are trying to evade position limits

through swap dealers," which include five to 10 big U.S.

investment banks.

But raising trading margins on crude oil contracts, as some

in the U.S. Congress have advocated, could set a "dangerous

precedent" and drive players to less regulated markets

overseas, Lukken said.

(Reporting by Chris Baltimore)</blockquote>


How much did the price of crude move when this news came out?


I already know the answer to this question because I was watching at the time and thought of you, but you may want to check it out for yourself.
 
Give it time. Coordination of this type does not happen overnight. Look at Morgan and Goldmans earnings this morning. These companies are desperate for revenue. They will not give it up easily. By the way heard a rumor yesterday that WB was heading for BK. World and Golden West portfolios have pulled them into negative net worth. The stock sure seems to be acting like it.
 
June 11 ? Bloomberg (Winnie Zhu): ?China?s crude oil imports jumped 25% last month from a year earlier as state refiners boosted fuel production to meet higher demand? Crude imports rose to 16.2 million metric tons in May??
 
[quote author="morekaos" date=1213823299]Give it time. Coordination of this type does not happen overnight. Look at Morgan and Goldmans earnings this morning. These companies are desperate for revenue. They will not give it up easily. By the way heard a rumor yesterday that WB was heading for BK. World and Golden West portfolios have pulled them into negative net worth. The stock sure seems to be acting like it.</blockquote>


WB is nowhere near filing for BK. You heard that from me. The lending portion of their business is not doing well to put it nicely, but they have a HUGE retail banking business accross the country, a broker/dealer in Wachovia Securities, and an investment bank. They have over $800 billion in assets inder management and $33 billion in net tangible assets. WB is a monster. The 3rd largest bank in the US behind Citi and JPM chase. They aren't going BK. They may be forced to sell off assets and possibly divisions, but a BK is not in the cards.
 
MoreKaos,

The dynamic you describe is exactly what happens in the semiconductor industry. When there is a hint of a shortage, everyone doubles upon orders, then tripples up on orders. The factories go crazy trying to build the stuff, and then the bottom falls out.
 
[quote author="lendingmaestro" date=1213847516][quote author="morekaos" date=1213823299]Give it time. Coordination of this type does not happen overnight. Look at Morgan and Goldmans earnings this morning. These companies are desperate for revenue. They will not give it up easily. By the way heard a rumor yesterday that WB was heading for BK. World and Golden West portfolios have pulled them into negative net worth. The stock sure seems to be acting like it.</blockquote>


WB is nowhere near filing for BK. You heard that from me. The lending portion of their business is not doing well to put it nicely, but they have a HUGE retail banking business accross the country, a broker/dealer in Wachovia Securities, and an investment bank. They have over $800 billion in assets inder management and $33 billion in net tangible assets. WB is a monster. The 3rd largest bank in the US behind Citi and JPM chase. They aren't going BK. They may be forced to sell off assets and possibly divisions, but a BK is not in the cards.</blockquote>


LM I do not disagree. It was just a rumor. I think theree is no way the gov would ever let a major go under. No matter what. I have stated a mid level could go like DSL or WM. Howerver, I have had a great time shorting WB, and the others for that matter.
 
And now the Perp Walks begin. This has such shades of the S and L crisis it is not even funny. The more things change the more they stay the same



<span style="font-size: 13px;"><strong>Former Bear hedge fund managers surrender </strong></span>



Ralph Cioffi and Matthew Tanin, who managed Bear Stearns hedge funds before the subprime collapse, charged with lying to investors about mortgage market risk.



http://money.cnn.com/2008/06/19/news/newsmakers/bear_stearns_investigation.ap/index.htm?cnn=yes
 
<em>"Buffett dismissed suggestions that "speculators" are responsible for the high price of oil, saying energy prices are being driven solely by supply and demand."</em> - per CNBC


..<p>

and some more:


http://www.bloomberg.com/apps/news?pid=20601109&sid=a_lDHpkarNuQ&refer=news
 
More - What are you going to do?


1. Cut your losses short?


2. Double down?


3. Hang tough with your current position?


4. Something else?
 
[quote author="morekaos" date=1213879571][quote author="lendingmaestro" date=1213847516][quote author="morekaos" date=1213823299]Give it time. Coordination of this type does not happen overnight. Look at Morgan and Goldmans earnings this morning. These companies are desperate for revenue. They will not give it up easily. By the way heard a rumor yesterday that WB was heading for BK. World and Golden West portfolios have pulled them into negative net worth. The stock sure seems to be acting like it.</blockquote>


WB is nowhere near filing for BK. You heard that from me. The lending portion of their business is not doing well to put it nicely, but they have a HUGE retail banking business accross the country, a broker/dealer in Wachovia Securities, and an investment bank. They have over $800 billion in assets inder management and $33 billion in net tangible assets. WB is a monster. The 3rd largest bank in the US behind Citi and JPM chase. They aren't going BK. They may be forced to sell off assets and possibly divisions, but a BK is not in the cards.</blockquote>


LM I do not disagree. It was just a rumor. I think theree is no way the gov would ever let a major go under. No matter what. I have stated a mid level could go like DSL or WM. Howerver, I have had a great time shorting WB, and the others for that matter.</blockquote>


http://www.washingtonpost.com/wp-dyn/content/article/2008/07/15/AR2008071503065.html?referrer=emailarticle&ref=patrick.net



Covered my short on WB. Like Horse shoes, hand grenades and slow dancing...close is good enough!!!
 
[quote author="morekaos" date=1216348562][quote author="morekaos" date=1213879571][quote author="lendingmaestro" date=1213847516][quote author="morekaos" date=1213823299]Give it time. Coordination of this type does not happen overnight. Look at Morgan and Goldmans earnings this morning. These companies are desperate for revenue. They will not give it up easily. By the way heard a rumor yesterday that WB was heading for BK. World and Golden West portfolios have pulled them into negative net worth. The stock sure seems to be acting like it.</blockquote>


WB is nowhere near filing for BK. You heard that from me. The lending portion of their business is not doing well to put it nicely, but they have a HUGE retail banking business accross the country, a broker/dealer in Wachovia Securities, and an investment bank. They have over $800 billion in assets inder management and $33 billion in net tangible assets. WB is a monster. The 3rd largest bank in the US behind Citi and JPM chase. They aren't going BK. They may be forced to sell off assets and possibly divisions, but a BK is not in the cards.</blockquote>


LM I do not disagree. It was just a rumor. I think theree is no way the gov would ever let a major go under. No matter what. I have stated a mid level could go like DSL or WM. Howerver, I have had a great time shorting WB, and the others for that matter.</blockquote>






http://www.washingtonpost.com/wp-dyn/content/article/2008/07/15/AR2008071503065.html?referrer=emailarticle&ref=patrick.net



Covered my short on WB. Like Horse shoes, hand grenades and slow dancing...close is good enough!!!</blockquote>


Nice one.
 
So far the double down looks good. Oil broke 50 day moving average and if it can't hold next stop may be the 200 DMA at 104. We shall see. I think things are not going well on the China/India consumption side. May take till after the Olympics but I think China will admit it soon enough and the bottom may fall out of Oil. If you think things are bad here with a a -14.5% loss on the S&P;take a close look at the China markets down 43.5% year to date. Can you imagine if the Dow was down that much this year...They would be YELLING DEPRESSION!!! Something smells like rotting Mooshoo here.
 
[quote author="morekaos" date=1216765232]So far the double down looks good. Oil broke 50 day moving average and if it can't hold next stop may be the 200 DMA at 104. We shall see. I think things are not going well on the China/India consumption side. May take till after the Olympics but I think China will admit it soon enough and the bottom may fall out of Oil. If you think things are bad here with a a -14.5% loss on the S&P;take a close look at the China markets down 43.5% year to date. Can you imagine if the Dow was down that much this year...They would be YELLING DEPRESSION!!! Something smells like rotting Mooshoo here.</blockquote>


Oil, gold, wheat, whatever, the CRB is breaking down. Look at the China market down 53.42% year to date. Europe and Japan reported their first negative GDP quarter and the begining of their recessions. They will lower rates as we raise them. Long dollar bet looking better every day. Go long this market we will rally though the end of the year.
 
[quote author="morekaos" date=1218838568][quote author="morekaos" date=1216765232]So far the double down looks good. Oil broke 50 day moving average and if it can't hold next stop may be the 200 DMA at 104. We shall see. I think things are not going well on the China/India consumption side. May take till after the Olympics but I think China will admit it soon enough and the bottom may fall out of Oil. If you think things are bad here with a a -14.5% loss on the S&P;take a close look at the China markets down 43.5% year to date. Can you imagine if the Dow was down that much this year...They would be YELLING DEPRESSION!!! Something smells like rotting Mooshoo here.</blockquote>


Oil, gold, wheat, whatever, the CRB is breaking down. Look at the China market down 53.42% year to date. Europe and Japan reported their first negative GDP quarter and the begining of their recessions. They will lower rates as we raise them. Long dollar bet looking better every day. Go long this market we will rally though the end of the year.</blockquote>


It seems you are doing quite well.
 
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