Soros sells oil short

[biker]

News flash: CNBC just reported that George Soros is selling oil short, now that it is above $65 per barrel.

Soros is one of the richest men in the world.

He also funded ads supporting the Kerry campaign to the tune of $70 million. Only to be completely eclipsed by the $500 thousand Swift Boat Veterans ad campaign.

So maybe it's time to buy oil.

[moonshine]

Futures markets show decreasing prices over the next few years. I'd tend to agree with Soros.

[biker]

Seriously, though.

Soros might be a political ignoramus or on the wrong side of history (or both), but he is no financial dummy.

He has enough financial clout and savvy to cause a successful (for him, at least) run on the British poind a few years ago.

So he is worth watching.

Unlike the previous hikes over the past year, this recent runup in oil prices seems to be having an impact on broader markets. The wind seems to have gone out of the Dow's sails. While the economic statistics mill says the economy is currently doing well, the stock market is always focused on the future.

The Fed has been raising interest rates for the past eighteen months. Yet long rates have been falling. And that contra-trend has recently accelerated.

Long-term interest rates are also focused on the future, not what current rates are doing. Declining long-term rates typically presage a downturn.

So, maybe George is on to something.

[biker]

I've been stalking a couple of food stocks, typically a defensive play.

I've been unsuccessful.

The market is bidding up the prices of these defensive stocks, just what you'd expect to see when you're about to go into a downturn.

Of course, the market has correctly predicted 9 of the 5 last recessions. So maybe I'll have to glumly keep registering gains.

[moonshine]

If peak oil were imminent, and the market were taking it into consideration, we would expect continuous rising contract prices. Which we don't have. Contract prices peak with January and February of 2006, and then begin to taper off.


Contract Month
Last
High
Low
Settle

September, 2005
$66.70
$67.10
$64.42
$66.86

October, 2005
$67.20
$67.75
$65.46
$67.37

November, 2005
$67.60
$68.00
$66.07
$67.55

December, 2005
$67.50
$68.05
$66.40
$67.64

January, 2006
$67.80
$68.05
$66.74
$67.69

February, 2006
$67.70
$67.95
$66.85
$67.69

March, 2006
$67.60
$67.98
$66.70
$67.61

April, 2006
$67.30
$67.95
$66.85
$67.41

May, 2006
$67.20
$67.39
$66.65
$67.20

June, 2006
$66.95
$67.18
$66.18
$66.97

July, 2006
$66.70
$66.83
$66.70
$66.73

August, 2006
$66.50
$66.70
$66.50
$66.49

September, 2006
$66.25
$66.80
$66.25
$66.25

October, 2006
$66.44
$66.44
$65.50
$66.02

November, 2006
$65.70
$66.09
$65.70
$65.78

December, 2006
$65.50
$65.70
$65.19
$65.54

January, 2007
$65.22
0
0
$65.22

February, 2007
$64.92
0
0
$64.92

March, 2007
$64.67
0
0
$64.67

April, 2007
$64.41
0
0
$64.41

May, 2007
$64.15
0
0
$64.15

June, 2007
$63.75
$64.00
$63.75
$63.89

July, 2007
$63.61
0
0
$63.61

August, 2007
$63.25
$63.25
$63.25
$63.35

September, 2007
$63.20
$63.20
$63.20
$63.09

October, 2007
$62.86
0
0
$62.86

November, 2007
$62.63
0
0
$62.63

December, 2007
$62.50
$62.60
$62.27
$62.40

June, 2008
$61.57
0
0
$61.57

December, 2008
$60.60
$61.50
$60.40
$60.75

December, 2009
$59.40
$60.25
$59.40
$59.65

December, 2010
$58.70
$60.30
$58.70
$58.95

December, 2011
$58.60
$59.25
$58.40
$58.65

Source: The New York Mercantile Exchange

[lars]

Originally posted by biker
I've been stalking a couple of food stocks, typically a defensive play.

I've been unsuccessful.

The market is bidding up the prices of these defensive stocks, just what you'd expect to see when you're about to go into a downturn.

Of course, the market has correctly predicted 9 of the 5 last recessions. So maybe I'll have to glumly keep registering gains.

Any idea what the puts are going for on the options markets surrounding energy 4 to 6 mons out? There is a spider basket of oil stocks as well, symbol might be $OIH, that is great to watch for technical analysis indicators such as OBV, RSI and William's %R they may be screaming OVERBOUGHT!

I listened to an analyst over the weekend that said 12 to 16 months after oil has hit a new, sustained high on a #/barrel basis, there is a contraction in the U.S. economy which will likely be rippling globally.

House starts contracted in the report that came out today and Borders/Walden group only managed a 2 cent/share net vs a 10cent/share net ly same period. Retail is contracting and may not recover in the 4th quarter due to increases in min wage, energy costs and global commerce which is squeezing brick 'n mortar profits something fierce.

Lars

[biker]

What he said

[moonshine]

Airline stocks might be another defensive move. I picked up AAI just before it hit the S&P 500 and cashed out nicely when the fund managers ran the price up to fill out their portfolios.

I'm still waiting for AWA to hit a 5 year high. I'm guessing somewhere in the 16-17 range would make me happy.

Risk? Oh yeah! Reward? If these peak oil folks keep up their doom and gloom campaign it should payoff nicely when they are discredited.

[LaNdReW]

Originally posted by moonshine
Airline stocks might be another defensive move. I picked up AAI just before it hit the S&P 500 and cashed out nicely when the fund managers ran the price up to fill out their portfolios.

I'm still waiting for AWA to hit a 5 year high. I'm guessing somewhere in the 16-17 range would make me happy.

Risk? Oh yeah! Reward? If these peak oil folks keep up their doom and gloom campaign it should payoff nicely when they are discredited.


Ah, the crux, what if the doom and gloomers are right? What if demand keeps rising, China keeps growing, and output goes flat?