drbubb Posted June 20, 2008 Author Report Share Posted June 20, 2008 Richard Rainwater's Two Billion Dollar Bet -- Unwound Top investor Richard Rainwater made $2 billion betting that oil prices would soar to over $100. His investments go back to when oil was trading below $20, and he was a heavy buyer of Oil stocks and oil futures at those lower prices. When oil ouched through $129, he sold everything. One of teh things that drove him to do so was a poll showing that 75% said they could see oil prices going higher, and they were taking steps to cutback on oil consumption by: downsizing their cars, buying hybrids, and driving less. He thinks the resulting demand destruction will bring prices down. When it falls enough, he will be buying again. After a pullback, he expects oil to go much higher. When it does, he wants to make another $2 billion. This fits in with my own view... DrBubb, Do you see gold being dragged down by any retracements in oil ?? Oil could retrace from here. The news out of China is big: they are raising oil prices, and that will hit demand. Paradoxically, a fall in oil could mean more money flowing into precious metals. I reckon will could see oil drift down over the coming weeks and months towards my $100-$110 target Look at this old Oil price chart from an article I wrote back in 1991 In the mid-1970's there was a big pop up to over $10 (think$140 this time), and then a sharp drop to under $10 (say $8, and think $80-110 now). After that oil slowly worked its way back up oevr many months. Then when it broke the old hog, and shot up quickly to $40 (think $400 this time.) I would not be surprised to see a similar patter develop in the months to come. Link to comment Share on other sites More sharing options...
drbubb Posted June 25, 2008 Author Report Share Posted June 25, 2008 THE COMING PAUSE IN OIL PRICE RISES... The trends in place at present seem to be that we are seeing deflation in the things which we buy with or are associated with debt - ie housing, banks and so on - while we are seeing inflation in things your buy with cash - commodities. Good explanation. What we are seeing at the moment is rising inflation (far from hyperinflation) combined with a credit crunch. Certain items financed by easy money (like homes) that already inflated to excessive bubble-like levels, are now being discounted because the easy money is not there any longer to sustain the high prices. There are two main possibilities: + The bubble-like prices will deflate until they become affordable again in a time of not-easy money. They could even fall to an "excess" on the downside if the credit crunch intensifies, and 65-70% loans (a more traditional lending percentage) are not even available. + The governement could panic, and try to stop the price fall by making credit easier and easier. (I am not sure how: buying properties, and buying new securitised junk, perhaps?) and then we may head into real hyperinflation, where even house prices start rising again. I can see no reason the bet on number 2 above (yet). But we need to stay alert. If we are headed into number 2, then other assets (like gold and energy) will rise into bubble-like valuations well before house prices take off again. And if we are in number 1, then Central bank efforts to maintain confidence as house price slide may keep gold up. Oil prices may be set to fall IMHO, because the pain felt by America is spreading globally. Oil price subsidies are being removed, and we are beginning to see global oil demand destruction (not just demand destruction in the US) - which is exactly what is needed to bring oil prices down. A fall in oil prices would allow governments to back-off on their interest-raising policies (and rhetoric), which could mean that gold will start to push up again. Link to comment Share on other sites More sharing options...
Gatesy Posted June 25, 2008 Report Share Posted June 25, 2008 THE COMING PAUSE IN OIL PRICE RISES... Good explanation. What we are seeing at the moment is rising inflation (far from hyperinflation) combined with a credit crunch. Certain items financed by easy money (like homes) that already inflated to excessive bubble-like levels, are now being discounted because the easy money is not there any longer to sustain the high prices. There are two main possibilities: + The bubble-like prices will deflate until they become affordable again in a time of not-easy money. They could even fall to an "excess" on the downside if the credit crunch intensifies, and 65-70% loans (a more traditional lending percentage) are not even available. + The governement could panic, and try to stop the price fall by making credit easier and easier. (I am not sure how: buying properties, and buying new securitised junk, perhaps?) and then we may head into real hyperinflation, where even house prices start rising again. I can see no reason the bet on number 2 above (yet). But we need to stay alert. If we are headed into number 2, then other assets (like gold and energy) will rise into bubble-like valuations well before house prices take off again. And if we are in number 1, then Central bank efforts to maintain confidence as house price slide may keep gold up. Oil prices may be set to fall IMHO, because the pain felt by America is spreading globally. Oil price subsidies are being removed, and we are beginning to see global oil demand destruction (not just demand destruction in the US) - which is exactly what is needed to bring oil prices down. A fall in oil prices would allow governments to back-off on their interest-raising policies (and rhetoric), which could mean that gold will start to push up again. Great post Doc. It would be great to see no1 happening with less pressure on govts to raise rates supporting rising gold prices, leaving the door open for another bite at the oil cherry once it has corrected a little. You can absolutely see as well that if oil prices do drop, with the "perception" of inflation in the publics eye being soooo imporant to govt these days, that they would be comfortable not raising rates. Any increases in gold are far less visible/relevant to the general public (at the moment) and even if headlines reappear at $1000 again, they will soon disappear once it is broken for good until, say $1500. For this reason I think the fed may at some point favour soaring gold over soaring oil. Link to comment Share on other sites More sharing options...
kernull Posted July 1, 2008 Report Share Posted July 1, 2008 I just got this spam email to my mailbox: Subject: Oil prices 150 dollar per barrel .... bla bla bla so, this must be the top. Link to comment Share on other sites More sharing options...
Gatesy Posted July 14, 2008 Report Share Posted July 14, 2008 Lehman have short oil positions.... http://www.telegraph.co.uk/money/main.jhtm...4/bcnoil114.xml Link to comment Share on other sites More sharing options...
Bobsta Posted July 16, 2008 Report Share Posted July 16, 2008 Lehman have short oil positions.... http://www.telegraph.co.uk/money/main.jhtm...4/bcnoil114.xml So this won't be needed then? http://www.stopoilspeculationnow.com/ Apologies if this has already been posted/discussed. A friend just sent it to me... seems the US public isn't happy (surprise, surprise) and wants someone to blame. This particular phrase caught my attention: "Every time you buy products such as food or gas, you are impacted by unregulated, secretive and often foreign commodities futures markets" ... I'm not sure they intended to be xenophobic - but how sad that the site attempts to blame everyone else in the world. How about looking at all the huge SUVs and V8s you drive before pointing the finger elsewhere?! Link to comment Share on other sites More sharing options...
drbubb Posted July 16, 2008 Author Report Share Posted July 16, 2008 MATT SIMMONS is on Bloomberg today talking about Oil prices He says he expects $600 "in the next six months to five years". He admits that is a "made-up number", but he thinks it is far more likely than the $50 that many are talking about Link to comment Share on other sites More sharing options...
Gatesy Posted July 16, 2008 Report Share Posted July 16, 2008 MATT SIMMONS is on Bloomberg today talking about Oil prices He says he expects $600 "in the next six months to five years". Link to comment Share on other sites More sharing options...
kernull Posted August 1, 2008 Report Share Posted August 1, 2008 bottom is in! Link to comment Share on other sites More sharing options...
kernull Posted August 2, 2008 Report Share Posted August 2, 2008 a bit late ZG interview: http://audio.marketviews.tv/audiofiles/synd/zapata8.mp3 Link to comment Share on other sites More sharing options...
kernull Posted August 3, 2008 Report Share Posted August 3, 2008 received this chart from stockcharts.com, should be posted under an "oil jokes" thread, they call 70-80 oil. Link to comment Share on other sites More sharing options...
drbubb Posted August 6, 2008 Author Report Share Posted August 6, 2008 oil is consolidating just below the strongest support line: 120 bearish sign expect the downtrend begin at 10:35 (crude inventories) , move should be of 10 bucks , however at 115 we certainly will bounce the ideal short position for gold would be 889, but it as 885 right now, lets see what happends I repeat my earlier forecast- made when Oil was on its way to $146: + Crude oil will fall to about $100 (target: $80-$110), and then + Crude will soar to $400 by 2010-12 The first part may come within August (and could be retested) - which is sooner than I had thought Link to comment Share on other sites More sharing options...
drbubb Posted August 11, 2008 Author Report Share Posted August 11, 2008 ...and once they've triggered these stops, they can't do that same trick again! Right. Have a look at : Oil (USO) vs. Gold (GLD) Gold's huge stop position has allowed them to force it lower than Oil USO Support: Oil-$110 x 0.80 = USO-$88 But the charts show lower support, namely about USO-$82. And that's equivalent to WTI-$102.50 per barrel Link to comment Share on other sites More sharing options...
Bobsta Posted August 11, 2008 Report Share Posted August 11, 2008 I don't wish to derail this thread but would be interested in the opinion of others on this: There's been discussions on various threads over the months (years?) as to the validity/accuracy of pricing from spread betting companies. I'm not trading Crude but if I were I'd be quite surprised to see those sharp pip-by-pip movements (which would easily trip stops/limits). Is this normal for crude, or is there something screwy going on at IG Index? Link to comment Share on other sites More sharing options...
frizzers Posted August 11, 2008 Report Share Posted August 11, 2008 There is something screwy going on at IG Index. They are crooks. Link to comment Share on other sites More sharing options...
drbubb Posted August 11, 2008 Author Report Share Posted August 11, 2008 WATCH OIH - we could have seen a low in OIH today A leap in OIH, has often given an early warning of an impending upturn in GLD Link to comment Share on other sites More sharing options...
chazza Posted August 12, 2008 Report Share Posted August 12, 2008 WATCH OIH - we could have seen a low in OIH today A leap in OIH, has often given an early warning of an impending upturn in GLD Just had a quick peek at the chart. Seems to me like we could test 170 on OIH, no? Especially considering Crude Oil could well go lower. Link to comment Share on other sites More sharing options...
drbubb Posted August 12, 2008 Author Report Share Posted August 12, 2008 sure. this is only a A leg for oil. But it may be a C leg for GLD This is constructive. This is what a bottom should look like: The above is the Oil Holders etf (OIH) - includes shares of Oil Service companies. It often leads Oil (USO), which has sometimes led Gold (GLD) also. It made a low yesterday on light volume, and then rose on heavier volume. That's a very positive sign, and now it looks set to break above that downtrend line. If OIH opens higher on big volume, a bottom may be in place, and I think it is then likely that a Gold bottom will come within a few days also. OIH is higher this morning in NY, and has broken its downtrend. Meantime, GLD looks set to test its low on lighter volume, which would be a potential bottoming formation. But more work is required, and maybe a visit to GLD-$79 to fill that gap from last Christmas Link to comment Share on other sites More sharing options...
chazza Posted August 13, 2008 Report Share Posted August 13, 2008 sure. this is only a A leg for oil. Good point Link to comment Share on other sites More sharing options...
kernull Posted August 15, 2008 Report Share Posted August 15, 2008 interesting, while the gold future contract is priced 100 bucks higher than the current, Light Sweet Crude contract for Dec 2015 is priced at 110, almost 4 bucks lower than todays 113.60 http://futures.tradingcharts.com/chart/CO/C5 just by the time peak oil will be peaking at full scale, kind of "buy and go to the beach" investment Link to comment Share on other sites More sharing options...
kernull Posted August 15, 2008 Report Share Posted August 15, 2008 oil exports falling , who knows due to what is this, i guess likely due to a bit lower demand than due to peak oil phenomenon Link to comment Share on other sites More sharing options...
kernull Posted August 20, 2008 Report Share Posted August 20, 2008 Good point I think that B wave began this week. A: 147-111 B: 111-122 C: 122-105 Link to comment Share on other sites More sharing options...
drbubb Posted August 21, 2008 Author Report Share Posted August 21, 2008 I think that B wave began this week. A: 147-111 B: 111-122 C: 122-105 could be. or lower on C Link to comment Share on other sites More sharing options...
chazza Posted August 22, 2008 Report Share Posted August 22, 2008 I think that B wave began this week. A: 147-111 B: 111-122 C: 122-105 and finished this week!? Link to comment Share on other sites More sharing options...
kernull Posted August 22, 2008 Report Share Posted August 22, 2008 and finished this week!? good call! p.s. If 105 is not the bottom, I don't know what I am going to do Link to comment Share on other sites More sharing options...
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