When will the price at the pump finally cause every person to
yell "Ouch!" or "Ohweee!"? Well, that moment is soon approaching
for almost everyone. Our pal Jim Righeimer wrote today in the
Daily Plot..thinks that it is a Democrat/Republican thing. We
think it is a big greed thing!
Jimmy says he supports McCain's idea of 100 Nuclear Facilities
around our country. 100! He also seems to be from the school
that believes that we can drill our way out of $8 dollar a
gallon gasoline! He said he was shocked to pay $4.59 this week
for each gallon of gas. We have been paying $4.77 - $4.85 for
the last couple of weeks! He failed to mention any possible
Financial or Institutional Market Speculation that has driven
the cost per barrel into the stratosphere! Jim failed to mention
the fact that the Congress and the Administration has failed to
call and enact serious Regulations that will roll back the Enron
Exception added to the 2000 Farm Bill...that allows speculators
to buy Futures with no money down and makes Market Manipulation
an easy gig....for those that know their way around the market.
Jim, also didn't mention the 400 Hedge Fund Managers that have
been taken into custody by the Securities and Exchange Commission
for wrong doing, fraud and serious misrepresentations of products
civilians might invest in. Maybe, CALPERS or CALSTRS got hit and
the finally action had to be taken. Lot's of those Pension funds
may soon be in danger of becoming insolvent. Then what? Sounds
like another Government bail-out coming hey? Let us hope upon
hope that Chairman Chris Cox stays the course and keeps the heat
on this "Greed Merchants of Doom"! They are indeed the reason
that Energy and Commodity prices are going through the roof.
When those Sub-Prime Mortgages and Discounted Bad Credit Card
Debt Funds became "Persona non grata" on Investor sheets....they
had to pump that cash someplace. Guess: OIL, GOLD, CORN,
SOYBEANS, ENERGY FUTURES and who knows what more!
The regulations thatwe are talking about include: Higher Margin
Liquidity demand requirements, limits on market participation...
percentage of the buy-in's even with associated Investors or
Investment Vehicles. The days of the Wild, Wild West in for
Investing...need to cease. We need to go back to the pre-2000,
pre-Enron Exception rules!
Jim also failed to clearly identify how the Investment Community
is using the term "Hedging" to soften how greed driven it is:
There is nothing wrong with signing contracts with producers for
products at a certain price for a certain term. The example was
in 1980 when the US Government bought the complete supply of then
Mexican Oil....for $10 a barrel for 10 years! That is not a
"Hedge Fund"! That is called a Contract to Purchase. The average
Joe cannot guarantee the country of Mexico that they will pay any
"certain price" for any "certain term" without a huge basket of
Cash and Guarantee's! The US Government could do the same thing
with Iraq right now...if we wanted to. But no, it is in the best
interest of Iraq that the rate float so that they can get more
money for products. Less money the US Government will have to
provide to Iraq right now.
So, where are we? Unemployment in California has risen to 6.8%
and will be going much higher, much sooner than most thought.
The Real Estate Market is dust and only the very rich are able
to buy into much right now. Construction has been frozen and
new car sales have literally ground to a stop! The demand for
cost effective vehicles has skyrocketed overnight. The price of
food and literally everything we buy is going up astronomically.
We are going to see many municipalities go belly up, many counties
and perhaps many good people we even might know. The worse case
scenario will be the lost Public Safety budgets and the fact that
the falling Real Estate prices will require projections of future
Federal, State, County and City budgets for years to come!
The good news is that the demands for water, electricity and more
infrastructure...has abated somewhat. We believe that drilling in
the Arctic National Wildlife Reserve or drilling off the "dead sea"
coast of South Texas..will not lower our price of a gallon of gas.
We believe that long term oil contracts by the Federal Government
from major oil producing nations may cut the cycle, but then who
is going to play? Guess, we may find out who are friends are soon
enough!
No comments:
Post a Comment