Downside & Divergence

“World share markets fell for a seventh day on Thursday, hit by evidence that Europe’s debt crisis has stalled economic growth and as concern over the fiscal problems facing the United States ratchets up.”  (ReutersEconomy Has Green Shoots From China to U.S. as Data Surprise (Bloomberg).  Many divergences noted by Chess.

Looks like the sterile ‘Operation Twist’ will morph into straight money printing, with Williams Says Fed May Buy $85 Billion in Bonds Per Month (Business Week).  WOW! 

“Ben Bernanke risks being remembered for the same monetary folly that was perpetrated by John Law, the banker who fled 18th century France after creating an asset bubble, the deputy governor of Norway’s central bank said.”  Bloomberg

We all know Peter Schiff and ISA believes him to be completely sincere.  He says “Dollar collapse before Obama out” (HAI).  My thoughts:

  1. Obama or Romney would make no difference to the endgame.
  2. Schiff ignores the extremely positive U.S. trade fundamentals because of horizontal drilling.
  3. The problem is not the dollar; the problem is fiat money.
  4. Yet the underlying idea suggestion a crisis occurs in the next four years seems reasonable imo.

But don’t get to grumpy.  The world moves forward and changes fast.  Interestingly, “…Greenslade estimates that Google’s total revenue also now exceeds that of the entire U.S. newspaper industry…”  Slate

Natural gas has been strong too.  Gas Prices Doomed to Stay Low as Producers Pump Faster at Bloomberg.  All the arguments in this bearish piece seem to have holes imo.  Declining supply is the short term bull case…

Intermediate term is the electricity generation market:  Many Coal-Fired Power Plants Poised to Retire, Group Says at Bloomberg.

The big prize long-term for natural gas is the transportation fuel market.  While some suggest Natural-Gas Cars to Get Home Fueling (WSJ -google the title to read), ISA thinks the consumer market is fools gold.  The opportunity is for long-haul and especially regional trucking as the realistic opportunity (The Trucker).

“The International Energy Agency (IEA) has predicted that by 2035 nearly 90% of the oil produced in the Middle East will be bought by customers in Asia.” (BBC).  Good thing ‘Saudi Dakota’ sets more records for oil production in September as US moves towards world’s top oil producer by Mark Perry.

“Vast shale plays worldwide are going to be explored and developed although it’s going to take more than a decade before another country outside the US or Canada can duplicate the current US shale boom…”  OGJ

Middle East LNG country Qatar mulls U.S. shale gas investments (Marketwatch).

Sounds like the Utica is going to be a gas and NGL play (PBT).  Falling gas prices:  WSJ.

Oil Is Harder To Get And Will Cost More In The Future:

Out of Oil

2 thoughts on “Downside & Divergence

  1. Great stuff today! My, a lot is sure happening – Europe recession reported today, Israel/Syria on the brink of war, USA fiscal cliff in full headlines now that the election is over, etc.! Hard to sort it all out in the short term (next few months), but in the long term I am afraid that odds are that Peter Schiff is correct – something has to give and when it does, it will likely come as a crisis event. My solace (investment wise) is that people will still need energy, food, and a means of exchange (precious metals?).

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