A quick post on crude. If it came as a surprise to you that Goldman lied on a downgrade of a price target to create a buy point then you are certainly on the wrong side of the crude trade. Clearly you did not check out my posts here, where I predicted a short term bottom in crude.
Retards talking on TV will give you any and every reason as to why shit goes up and down, they have lots of airtime to fill and precious little insight to share. This morning I heard the claim that crude is rising because the ‘risk on’ trade is back and that crude is up on the strong economic outlook in the USA. This is ludicrous on so many levels. First of all, the economy has very little to do with the stock market and corporate earnings, simply refusing to count the poor people doesn’t improve the economy. The real reason crude is up is because we don’t have enough of it and the countries that produce it are largely run by horrible regimes and have largely uneducated unruly populations ready to roast said rulers alive. 114 is the rubicon, from there we will not come back until the speculative bubble – and it is that – pops. Last week there was all this talk about underlying demand not supporting crude at these prices – as if that has ever made a difference in a speculative bubble.
Let me explain something for the last time, Saudi Arabia and all of OPEC have lied about proven reserves (as their export quotas are based on proven reserves) and seek to manipulate the price to that sweet point where it is as high as possible without really affecting demand. Libya has yet to go full retard – we won’t be seeing reliable oil from there for a while, and I fully expect Gadaffi to attempt to destroy as much of the infrastructure as possible once it becomes clear he will be toppled (by no means a certainty). Add to the mix the general instability of a region that produces most of our oil, think Yemen, Syria, Egypt, Bahrain. In other news, Nigerians continue to fight over the rule of a country that no one would care about except for… you guessed it… OIL. Instability in oil producing countries with a history of sabotaging oil infrastructure and kidnapping oil workers is very good catalyst for steady oil production and lower prices. I wonder if Nigeria going full retard is priced into oil yet, or the potential civil war in the Sudan over… you guessed it again… their oil producing regions that straddle the north and the south and are hotly disputed.
Have the conviction to trade your thesis or get out of the way.