So, is today an inflection point?

[GRG55]

Re: So, is today an inflection point?

Just looking at one of my possible stox to buy to-day, Duke Energy Co. (DUK), it barely caught a dead cat bounce as of 3PM EST. And that tells me plenty about this market.

If DUK would have rallied sharply, it would have meant that America had an energy plan worth mentioning. But potential buyers of DUK are just as frightened of the greenies as I am, so why would they buy a company like Duke Energy that produces electricity from coal, from nuclear, from wind, among other methods, when the Obama Administration wants solar power--- a joke.

So, DUK did not bounce, and if Duke can't rally, then how can this DOW rally have legs? Aside from scams, bail-outs, and Hummers, what does America produce? Or another way to say it: if America can't produce cheap energy in any meaningful amount, then how can the country produce anything and sell it competitively in the world economy?

No, I don't own any DUK, so I have nothing to disclose. But I do own shares in oil companies including shares in producers of heavy oil from the oil sands in Alberta.... And even heavy oil is out of favour by the current Obama Administration.

The highlighted sentence is incorrect. You can bet your optionARM mortgaged farm that the oil sands is front and center in the new Administrations energy deliberations, and it was a prominent topic of discussion between Obama and Harper during their recent cookies and milk session in Ottawa. The Obama Administration is going to find a way for the USA to pay the costs of carbon abatement in the tar sands in exchange for secure energy from that source. Count on it...

[Glenn Black]

Re: So, is today an inflection point?



Here is a chart I borrowed from a report I did for a large Middle East oil company in 2004. Data is from a major study done ~1960's.

Notice who is #1 consumer of energy per $GDP generated.

Today, Canada is #1 energy pig in the world, even worse that the gool 'ol USofA. This is primarily due to:

• Canada's high energy consumed for aluminum smelting, ore extraction, manufacturing, and tar sands oil processing (if you start with 4 bbl of tar sands oil, it consumes the equivalent of 3 of those bbl's of energy to make those 4 bbls; netting you 1 bbl of oil that can be sold, an energy yield of a mere 25%. This is mainly fueled by Canadian natural gas)
• Canada's wasteful space heating & poor building insulation (73% of Canadian energy consumption goes to space heating, building code had no thermal insulation required in buildings before the 1950's)
• Our long delivery lines from a big country with spread out population
• Our wasteful habits & poor machine/appliance efficiency
• Our cold Canadian winters (very small part of the picture)

All over the world, economic prosperity is directly tied to energy consumption. Has been since Watt's first steam engine.

Everybody is much more efficient today (higher/better $GDP per unit Energy consumed), but the relationship still holds.

The overall base inflation on everything from $147/bbl oil has eased for now, but until we find a new game, energy consumption will still be tied to economic activity (GDP).

I support your conclusion about Duke, provided Duke is sufficiently representative of the industry as a whole, rather than responding to something specific to just them.

[tombat1913]

Re: So, is today an inflection point?

The highlighted sentence is incorrect. You can bet your optionARM mortgaged farm that the oil sands is front and center in the new Administrations energy deliberations, and it was a prominent topic of discussion between Obama and Harper during their recent cookies and milk session in Ottawa. The Obama Administration is going to find a way for the USA to pay the costs of carbon abatement in the tar sands in exchange for secure energy from that source. Count on it...

Now THAT'S what I'm talking about! Decisive insider information for the itulip community!

[K Carlson]

Re: So, is today an inflection point?

Here are my predictions (AKA guesses).

S&P-Intermediate low: 650
Bottom in 2010: 550
Dow-Intermediate low: 6,700
Bottom in 2010: 5,700

The Dow Jones Transport Index seems to be consistently underperforming all the other indexes. I would like to short it via an inverse ETF, but can't seem to find one. Does such a creature exist?

[Truefire]

Re: So, is today an inflection point?

Every good gold bug knows whats goin on. It's all about driving the gold price below the 50 day moving average and kicking in the hedgies sell off of same, further driving down the gold price. This makes the dollar look strong which reinforces Treasuries.

The dance continues.

[GRG55]

Re: So, is today an inflection point?

Here is a chart I borrowed from a report I did for a large Middle East oil company in 2004. Data is from a major study done ~1960's.

Notice who is #1 consumer of energy per $GDP generated.

Today, Canada is #1 energy pig in the world, even worse that the gool 'ol USofA....

Too bad we didn't ship all the jobs making real stuff off to China, and replace them with an entire economy centered around jobs making toxic origami on Bay Street.

If we had, we too could claim a much lower energy footprint per $GDP...like the good 'ol USA. Imagine how much better off we'd be today, eh...:rolleyes:

[blazespinnaker]

Re: So, is today an inflection point?

Here are my predictions (AKA guesses).

S&P-Intermediate low: 650
Bottom in 2010: 550
Dow-Intermediate low: 6,700
Bottom in 2010: 5,700

The Dow Jones Transport Index seems to be consistently underperforming all the other indexes. I would like to short it via an inverse ETF, but can't seem to find one. Does such a creature exist?

You could try buying some puts..

http://finance.yahoo.com/q/op?s=IYT

[FRED]

Re: So, is today an inflection point?

Here are my predictions (AKA guesses).

S&P-Intermediate low: 650
Bottom in 2010: 550
Dow-Intermediate low: 6,700
Bottom in 2010: 5,700

The Dow Jones Transport Index seems to be consistently underperforming all the other indexes. I would like to short it via an inverse ETF, but can't seem to find one. Does such a creature exist?

Yes. From Time, at last, to short the market, Dec. 27, 2007:

Proshares Short S&P 500 (SH)

1 Year Return: -7.36% vs +7.7% S&P500
Net Assets: $233.55M
1 Year Correlation: -0.96
Group comments: Negative, low activity.
20% correction may yield a 19% return.
$119/$100 invested.
Comments: Low risk, low negative beta play.

Today versus then: