Bush Places Call On Oil Bets

All,

 

Looks like I'm not the only one who believes that just mentioning and supporting the idea of offshore drilling would change the sentiment of futures traders in Oil.  This is a quote from an article (link below) on Bloomberg.com:

 

``The prospect of considerable supply even though it may take some time to bring on line changes decisions of energy buyers, hedgers and investors,'' said William Whitsitt, president of the American Exploration and Production Council, which represents oil and gas companies. ``There is no doubt in my mind that this can have a positive effect for consumers.''

 

But listen to what the Dems are saying.  No wonder they are usually not the best entrepreneurs or business leaders:

 

 Democrats have blocked congressional efforts to lift the ban, arguing that Republican estimates that there are some 86 billion barrels available are overstated and  doing so would have no short-term effect.

Did they miss the class "Supply and Demand in Futures 101"?  The price of oil is traded in futures which are based on the future supply to the oil reserves.  If the future has the potential to have more oil on the market -whether or not it is next month or 3 years from now - the futures markets will take note and trade accordingly.

 

This is a bold and stalwart political move for Bush, as now it is up to Congress (and the Dems more especially) to show their true colors of who they represent.  The People have been asking for drilling relief for some time now.  It will be interesting to see what happens.

 

As a side note, oil futures are down today.  I wonder why?...

 

Here is the full article: http://bloomberg.com/apps/news?pid=20601087&sid=agDd8wY3LT9w&refer=home

--
Tijs Limburg
Chairman and CTO of DMX - Digital Media eXceleron, Inc.
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The "Don't Tread on Me" Flag: The First Navy Jack is enjoying renewed popularity these days thanks to an order from the Secretary of the Navy that directs all U.S. Navy ships to fly the First Navy Jack for the duration of the War on Terrorism.

Financial Black Friday - Mortgage Finance Sector Crashes

Well, some have been predicting a crash in the markets for some time, and while it is not a broad based crash (yet), the plunge in the Financial sector that has occurred this week, more especially today, makes this a Black Friday in my opinion.

 

Fannie Mae and Freddy Mac, the to goliath mortgage finance companies that are backed by the government, crashed 39% and 45% respectively today, bringing the financial markets to their knees and bringing the Dow to its lowest intraday point so far in 2 years - below 11,000 points.

 

And it's only July.

 

In some ways I'm nervous to see what happens in September and October, which are known to be stormy to downright terrible months for the markets even in stellar years.  The economy is shaping up to be a "perfect storm" that I don't think either Presidential Candidate has any qualifications to resolve.  We could be in for quite a ride, and unfortunately, a lot of losses.

 

Here are some articles that should be a wakeup call.  Now is a good time to save money (in cash accounts - not securities), and to move your current stock investments into dividend yielding stocks and bonds.

 

I'm not sure what this means for the housing market as a whole, or what it means for people who want to get into a home, but I wouldn't get into a mortgage right now without qualifying for FHA, which was made during the depression years to get people into homes, so an FHA insured loan should be able to ride out any stormyness.

 

http://finance.yahoo.com/loans/article/105380/Fannie-and-Freddie-Shares-Plummet-Again

 

http://www.nytimes.com/2008/07/11/business/11ripple.html?_r=1&partner=yahoofinance&oref=slogin

 

--
Tijs Limburg
Chairman and CTO of DMX - Digital Media eXceleron, Inc.
Get eXcited!
www.dmxed.com

Blogs:
http://phystrings.blogspot.com/
http://getoutofthedark.blogspot.com/

The "Don't Tread on Me" Flag: The First Navy Jack is enjoying renewed popularity these days thanks to an order from the Secretary of the Navy that directs all U.S. Navy ships to fly the First Navy Jack for the duration of the War on Terrorism.