Balance This
Let’s begin…
I’ll be moving cubes sometime soon, and escaping the camera.
In oil, we have another one biting the dust as Indonesia plans withdrawal from OPEC. See, there’s this thing with OPEC: you have to be an EXPORTER of petroleum to be in the club. Dropping output from mature fields + increasing domestic consumption = now net importer of oil. Good times, no?
Also, in Australia we have a demonstration that you don’t have to know what you’re talking about to get media coverage. Despite the protestations of this Aussie, the theory of “Peak Oil” has almost nothing to do with reserves being depleted. Further, any good “peakist” (ahem) would tell you that we’ll certainly have oil for the next 30 years and beyond. The only question is how much will you pay for it.
I know you’ve heard that here before.
One of the Fed governors is resigning… Mishkin wants to go teach. It’s not really all that newsworthy, but it’s a bit of curio.
Oil is still holding strong around $130, despite surprising drops in American driving. OPEC ministers insist that oil OUGHT to be selling for only $60 or $70, but much like distraught homeowners in California, it’s worth what people are willing to pay for it.
On the market today, the boogey man jumped out of the “Financial” closet and made everyone crap their pants as a Citi analyst said that AIG might need even more fresh cash after just raising $20B (Citi said that? Pot, meet Kettle.) and Midwest regional bank Key Corp upped its expected loan writeoffs for the year by about 50%.
Also, I came across a new Chinese company through my DryShips following: Sino-Global Shipping (ticker: SINO). It just had its IPO (debut) on the stock market about a week ago. It’s not really technically a shipping company, but rather a shipping services company that facilitates port services in Chinese ports. Keep an eye on it. I think it’s too rich right now, but around $12 a share would be a strong deal. If you can hold on for a ride and you’re big on China, then you might be willing to take a look at $14.
Also, if you’ve been requesting that I highlight a small cap company and/or not catching my cues on DryShips (you know who you are) then don’t say I’ve never responded. SINO’s market value is a mere $28 million.
On government, here’s a fun game on balancing the budget. It does a good job highlighting the difficulty of balancing the national budget, but I can’t say I really agree with the limited scope of your budget options and the lack of side effects from various decisions.
Want to know how to balance the budget according to this thing? Tax everyone to damn hell and cut military expenses big time.
Still, it’s entertainment.
Side note on Bank of America: I forgot about their little cash kitty on the side called China Construction Bank. The holdings are worth at least $21B, and even accounting for the sensitive nature of dealing with the Red Chinese gov’t, they could tap that ass for $10B in funds if they really needed to without being forced to dilute their shareholder base. I’ll go ahead and say with that remembrance being remembered, BAC at under $34 is looking pretty solid.
New blog title? Inspired by Dr. Oppenheimer quoting of the Bhagavad Gita after the nuclear test success, “Now I am become death, the destroyer of worlds.” I don’t wear long tattered black robes, so I am obviously not death, but if I’m real lucky maybe one day I can wear spectacles and be the destroyer of finance.
Plus the new title is a lot shorter,
Morgan Fox
