From thestreet.com
Dear Messrs. Mulally, Nardelli, Wagoner and Gettelfinger:
The popular reality program "The Biggest Loser" pits obese people against each other in a competition to see who can lose the most weight. Sound familiar? You, Detroit's Big Three automakers, are obese companies that need to drop the excesses weighing you down. You can't compete with foreign auto companies doing business in the U.S. and abroad. Each of you has an issue that should infuriate every taxpayer. On top of that, the United Auto Workers, the union representing your employees, has only exacerbated your problems.
Ford(F Quote - Cramer on F - Stock Picks)
Mr. Mulally, as Ford's CEO you are asking for a $9 billion line of credit ... "just in case." You have testified under oath that you really don't need that money but want it just in case one of the other automakers goes belly up. That would help your business sell more cars, right? With all due respect, good-bye. No money for you! ..........
Rest of Article....
Sunday, December 7, 2008
A Letter to Detroit
Monday, November 24, 2008
The Stages of Grief
From thestreet.com 11/24/08
I spend a good amount of the trading day talking to people from all walks of trading life. On Thursday I had a profound conversation with a guy I had never spoken to before. The conference call was the result of a heated conversation I was having with a money manager regarding Citigroup(C Quote - Cramer on C - Stock Picks). I was fuming about how the shorts were crushing the stock. It felt like it was Lehman, American International Group(AIG Quote - Cramer on AIG - Stock Picks), Fannie Mae(FNM Quote - Cramer on FNM - Stock Picks), and Freddie Mac (FRE Quote - Cramer on FRE - Stock Picks) all over again. It felt like the market was going to zero. I was really worked up. My friend interrupted me and suggested I hold on while he put another trader on the conference call. "Paul" (not his real name) also was worked up about how the markets were acting so irrationally. During our conversation, he uttered a thought in passing, "This feels almost like someone is dying." ....
Rest of Article
Monday, November 10, 2008
Obamanomically Correct
From thestreet.com 11/10/08
am very thankful for this column. It has provided me a platform to sound off on a wide range of topics: the dollar, OPEC, drilling, interest rates, real estate, the bailout package, gold, volatility, stocks, bonds, and of course, politics. Now that the election is over, I can focus in on the economy and the markets again. I will be forever changed in that I have found a new passion for the political process. I have been given a great opportunity to host a daily show on Foxnews.com called "The Strategy Room" and we throw around topics that affect everyone.
I mention "The Strategy Room" because it is intended to be a political forum. During my months as host, I have realized that the economy is front and center on the minds of just about all of the emailers to the show. They are worried about their investments, their homes and their jobs. ......
Rest Of Article
Monday, November 3, 2008
Looking Ahead With Hope and Trepidation
From thestreet.com 11/3/2008
One day left until we find out who will occupy the White House for the next four years. Whoever it is, he will inherit a mess. Campaign promises will have to addressed before they're discarded. The rescue/bailout has to be implemented, and more important, paid for. And there will be pressure from all around to re-regulate the markets. Most of this will likely take many quarters to sort out, so I anticipate volatility in the markets early on. My hunch is that government will grow in size and grow in scrutiny as it prints itself trillions of dollars to work with. Over time, analysts will simply take it for granted that big government is here to stay.
The volatility in the markets will eventually give way to steadying yet directionless markets. September is known as the weakest month for the S&P, and it did not disappoint, with futures opening the month at 1282 and closing at 1169, a loss of 8%. .....
Rest Of Article
Wednesday, October 29, 2008
Monday, October 20, 2008
The Killer 'C's'
From thestreet.com 10/20/08
I was doing my regular Saturday morning television show "Bulls & Bears" on Fox. The topic was taxes and I was trying to explain why I disliked presidential candidate Sen. Barack Obama's "spread the wealth around" comment to Joe the Plumber. A friend and professor at Temple University, Marc Lamont Hill, joined us to defend the democrat's side of the issue. The discussion came back around to me and an analogy popped into my mind. I said, "Marc, let me see if I can put this in terms you can relate to. Being a professor, how would your students feel if you decided to implement the following -- all the hard working, late-night studying, social-life sacrificing 'A' students had to give the bottom dwelling 'D' students some of their high scores? The 'D's' would come up to 'C's' and the 'A's' would come down to 'C's.' You would be removing the incentive to work hard, succeed and get rewarded." ....
Rest Of Article
Tuesday, October 14, 2008
Central Banks Should Go Long
From thestreet.com 10/13/08
I have spent 12 hours a day and most weekends engulfed in thought and opinion surrounding this current financial crisis. I have listened to and interviewed economists, congressmen and congresswomen, senators, administrators, regulators and CEOs. There is only one conclusion I can come to. It is clear that nothing is clear ... to anyone . There has been enough finger-pointing to fill a century of political opinion. Banks blame lenders, lenders blame regulators, regulators blame politicians, and politicians, being the carnivores they are, blame each other.
It has gotten to the point where, if I am interviewing someone and he or she starts the interview with a line about how we got here, I stop them mid-thought and ask, "We all have our own ideas about how we got here, now... can you offer any help going forward?"....
Rest of Article
Monday, October 6, 2008
Nowhere to Run
From thestreet.com 10/6/08
"Is everything going to be OK, Dad?"My son asks me this question on the ride back from the beach Sunday afternoon. While listening to Bloomberg radio for the entire two-hour drive yesterday, I had no idea he was paying attention to the commentator and expert guests. He is 10 years old, for heaven's sake. Why should he have to worry about our economic future?
Well, it wasn't easy trying to explain how we got where we are. And it wasn't easy trying to convince him that things will be OKafter hearing that European regulators are doing whatever they can to help avert a financial meltdown there. But I tried.
I explained that things will get uglier before they get better. But the sun does eventually shine after prolonged rain storms. And it will shine here as well. "America will be ok, buddy."
Rest Of Article
Monday, September 29, 2008
A House of Cards on Solid Ground
From thestreet.com 9/29/08
I have watched, listened to and spoken to more senators and representatives in the last two weeks than I care to. The fact that they are all willing to get on TV and tell us why they think we desperately need a $700 billion bailout, or why we need it somewhat, or why the plan is ridiculous tells me that they know less than you or me.
The way I understand this is that the loose lending practices over the better part of the last 20 years or so is the foundation for a disastrous house of cards. Congress, the Fed and various administrations' acceptance of the "affordable housing" push was the first floor. There is plenty of blame to go around, but without this basic premise, the subprime lending boom-turned-explosion couldn't have taken place. Fannie (FNM Quote - Cramer on FNM - Stock Picks) and Freddie (FRE Quote - Cramer on FRE - Stock Picks) were encouraged to lend more and therefore generate more fees. ....
Rest of Article
Treacherous Times
From thestreet.com 9/21/08
The upheaval in the financial markets in recent days has been treacherous. The 4% swings of multi-trillion dollar markets is both unprecedented and unsettling. But we have to take some solace in the fact that the indices ended this past week virtually unchanged, thanks to a lot of help from the Federal Reserve, the Treasury, the White House and even Congress.
You know all the numbers: the $700 billion Treasury wants to use to rescue our financial system by buying bad mortgage-related debt, the $85 billion loan to AIG, etc.
Of all the week's events, Tuesday morning stands out most in my mind......
Rest of Article
Sunday, September 21, 2008
Stay Calm Amid the Chaos
From thestreet.com 9/21/08
The upheaval in the financial markets in recent days has been treacherous. The 4% swings of multi-trillion dollar markets is both unprecedented and unsettling. But we have to take some solace in the fact that the indices ended this past week virtually unchanged, thanks to a lot of help from the Federal Reserve, the Treasury, the White House and even Congress.
You know all the numbers: the $700 billion Treasury wants to use to rescue our financial system by buying bad mortgage-related debt, the $85 billion loan to AIG, etc.
Of all the week's events, Tuesday morning stands out most in my mind. With AIG(AIG Quote - Cramer on AIG - Stock Picks) on the verge, I called my friend and broker Bobby at UBS(UBS Quote - Cramer on UBS - Stock Picks). I asked him how UBS stood given the fact that over the last few days, one investment bank after the other had been targeted by aggressive short-sellers. He said his firm was in very good shape. My concern was that after the shorts were through with all the U.S. banks holding mortgage derivatives, they would turn to the international banks with similar exposure. I instructed Bobby to but the full value of my portfolio in Treasury bills. He said the rates were really low and I instructed him to do it anyway. I was worried that my 23 years of blood, sweat and many tears would get swallowed by short-sellers smelling blood. I have no issue with legal short selling; I just did not want my portfolio to be chum for their very successful campaign.
Turns out Hank Paulson saw the same thing I did and headed it off before the impending run on the banking system was able to take hold.
I applaud those actions and those only. I am a free market advocate and have a hard time justifying some recent Fed and Treasury actions, but the protection of our deposited money in the various money market funds was brilliant. It differentiates the Wall Street risk from Main Street fallout. I agree that most on Main Street could care less if Lehman bankers are out on the street looking for work. I agree with them: That's the nature of risk and working for a company dealing in risk as its business model.
But when Mom and Pop on the corner of Main and Elm are worried about their cash deposited in the bank, we come face to face with the possibility of a a run on the banking system. We all lose in a run on the bank. Wall Street freezes and Main Street panics. The scary thing is that the panic would be justified as no one knows what ends a run on the modern bank. I certainly don't and haven't heard anything out of the government regulators and lawmakers that addresses a run on the banking system. So I bought 3-month T-bills for almost no yield. 80 basis points! I did not care that I would be getting three times that amount in normal times. Last week was not normal. I have no gut feeling what the next few months will bring. As my pal Dennis Gartman would say, if you put a gun to my head to guess what is next, I would choose "just pull the trigger" option. Its the safest!
My bottom line here is to keep calm, be nimble and this is not the time to take risks that haven't been fully vetted. I have reduced my exposure across the board, moved cash into T-bills and am waiting for a more clear sign of stability before putting more money to work.
As an update, I am long Goldman Sachs(GS Quote - Cramer on GS - Stock Picks), Toll Brothers(TOL Quote - Cramer on TOL - Stock Picks), Hovnanian(HOV Quote - Cramer on HOV - Stock Picks), CME(CME Quote - Cramer on CME - Stock Picks), the dollar index, gold, Exxon Mobil(XOM Quote - Cramer on XOM - Stock Picks), Devon Energy(DVN Quote - Cramer on DVN - Stock Picks), Chesapeake Energy(CHK Quote - Cramer on CHK - Stock Picks) and Chevron(CVX Quote - Cramer on CVX - Stock Picks). I am also looking for an entry point into natural gas futures. I haven't added new positions and am playing very close to the vest right now.
This means more now than any other time I have written it:Trade with your head and not over it!
Tuesday, September 16, 2008
Saturday, September 13, 2008
Monday, September 8, 2008
Watch for a Builder Rebound
From thestreet.com 9/8/08
When I heard that Treasury Secretary Henry Paulson, Fed Chairman Ben Bernanke and the two CEOs of Fannie Mae (FNM - Cramer's Take - Stockpickr) and Freddie Mac (FRE - Cramer's Take - Stockpickr) were meeting this weekend to discuss a rescue package for the mortgage-financing giants, I wasn't sure how the market would react.
That is until I heard Pimco's Bill Gross talk about the way the feds might backstop the two. He would be the guy to listen to with regard to where money and influence might be applied. His assessment was right on, and the market is certainly applauding the outcome. As you are no doubt aware by now, the U.S. government will take over Fannie and Freddie under a conservatorship plan and receive senior preferred stock. This investment implies the full support of the U.S. government and should strengthen our housing market's shaky legs. .......
Rest Of Article
Wednesday, September 3, 2008
Avoid Urge to Get 'Even'
From thestreet.com 9/3/08
This makes a lot of sense. I remember a day when naturalgas prices were falling. I had been bullish in the morning -- and right -- as the early trade was higher. But as the day progressed, a weather pattern changed and the sellers took over.
I foolishly decided to defend my position. (That's a very bad idea, as no one is bigger than the market -- a golden rule to successful traders). As prices tumbled, I added to my long positions, assuming that I would need only a small bump up in price to "get back to even."
The price continued to fall, and I continued to add, still only needing a small turn north in price and I could get "back to even."......
Monday, August 25, 2008
Now, Let the Games Begin
From thestreet.com 8/25/08
The 2008 Olympics are in the books. The U.S. won the most medals and China won the most Gold. Now it's time for the real games to begin.
The Democratic National Convention (DNC) kicks off this week, to be followed by the Republican National Convention (RNC) next week. The gamesmanship will far surpass that of the last two weeks in Beijing.
The Democrats will likely spend the week talking policy: the economy, energy, taxes, spending, trade and everything else that matters to them. Then they will presumably nominate Senator Barack Obama as their candidate with Senator Joe Biden at his side.
The GOP with go through the same drill and nominate Senator John McCain and whomever he chooses as a running mate......
Rest Of Article
Thursday, August 21, 2008
Wednesday, August 20, 2008
Tuesday, August 19, 2008
The Benefits of Trading
From thestreet.com 8/19/08
While discussing the market's trials and tribulations with folks at a party this weekend, some interesting observations arose.
One guy who is in fixed income seemed to be the most talkative. Although he has always made a good living, his phone seldom rang, even in a very busy major brokerage office. It was the equities guys rocking and rolling for years.
Now as equities have become shaky investments, his fixed-income desk is in big demand. Fixed income represents safety and a hint of return, he said. We laughed at the rates seen in Treasuries, the fed funds rates and inflation. And we chatted a bit about the relationship between inflation and fixed-income returns.
Another guy spent his days in structured products. He told me that they were busy creating products -- anything that would pull people out of cash. He mentioned a bizarre structured product called a Barrier Note. It appears to be a structured investment that plays out like this: ...
Rest of Article
Wednesday, August 13, 2008
Traders Must Go by Intuition
From thestreet.com 8/13/08
Last Sunday, during a ritual morning run, I remember feeling a hint of a breeze that seemed more emphatic than usual. It wasn't obvious, but it was enough to elicit my brain to think, "Hey, maybe there is a change in the weather coming."
When I returned from the run, my neighbor mentioned that she thought the weather was turning; she could "feel it." We intuitively spot slight changes in the weather, consciously or not.
In a column that I wrote on June 11, I talked about a trader's intuition about trading activity in stocks of agricultural companies. Until that day, these stocks had been on a tear.
Shares of Potash (POT - Cramer's Take - Stockpickr) had surged from $105 in January to $229 that day. Bunge sat at $122, Monsanto was trading $140 and Deere topped out at $82 per share........
Rest of Article
Tuesday, August 12, 2008
Nothing Lucky About Rally
From thestreet.com 8/11/08
Eight seems to be the magic number.
In Chinese numerology, recurring numbers represent luck, and 8/8/08 was thought to be the luckiest day. Three eights were the perfect day to launch the Olympics. However, that day the luck was flowing here in our equity markets rather than in Beijing where the numerologists reside.
Think about this for a minute. If someone told you that there was a brand new conflict between Russia, a big oil producer with 200 million residents, and its small (population 4.5 million) border neighbor Georgia, and if you heard that Russian tanks were rolling and casualties were mounting, what would you guess the reaction would be in the oil market? Up $5? $10?
Wednesday, August 6, 2008
Big Blue Moving, Grooving
From thestreet.com 8/6/08
At the end of the trading day, I usually spend a few minutes paging through stock and commodity charts. Occasionally, something jumps out at me. Yesterday I was scanning the usual suspects: Goldman(GS - Cramer's Take - Stockpickr), Chevron(CVX - Cramer's Take - Stockpickr), Apple (AAPL - Cramer's Take - Stockpickr), Research In Motion (RIMM - Cramer's Take - Stockpickr), steel, Chesapeake Energy(CHK - Cramer's Take - Stockpickr), oil, gold, dollar, corn, International Business Machines(IBM - Cramer's Take - Stockpickr), Morgan Stanley (MS - Cramer's Take - Stockpickr), Norfolk Southern(NSC - Cramer's Take - Stockpickr) ... wait a minute, go back ... IBM.
I know the green flags were waving all day in tech of all forms -- consumer tech, big-cap tech, semis and Internet infrastructure. Techs started strong and stayed strong all day. IBM is one of the little talked-about tech stocks lately that have been doing quite well. It is up about 19% year to date and has held up in the face of some really choppy markets recently.
Rest Of Article
Monday, August 4, 2008
All Aboard the Rails Trade
From thestreet.com 8/4/08
Don't miss your train, it's departing.
After many attempts, Gold finally hit a record last week in London. It was a result of frenetic buying coming from everywhere. There was big buying in the U.S. and Europe, surprising even some longtime fans of Gold. You know, I have loved and recommended gold for years. This time the world brought Gold to a record that surprised some but not me.
This week, I talked on Fox's Bulls & Bears TV show about a trade that makes a ton of sense to me. With the recent high cost of fuel, the railroads have become the shipping method of choice. It has been a favorite space of Warren Buffett. He has amassed an 18% stake in Burlington Northern(BNI - Cramer's Take - Stockpickr).
One of the main reasons the rails are prospering now is because diesel fuel has risen faster than oil, gasoline and jet fuel. The national average diesel price topped out recently at $4.85 a gallon, up a whopping 67% vs. last year. It still sits at $4.68 per gallon today. .........
Rest Of Article
Friday, August 1, 2008
Wednesday, July 30, 2008
Playing the Mexican Peso
From thestreet.com 7/30/08
In traditional tortilla-making, corn or maize is cured in lime-infused water. The lime juice releases the skin of the corn from the kernel and also liberates the vitamin niacin and the amino acid tryptophan.
The cured kernels are then ground and rolled or pressed into thin cakes and cooked at a high temperature. The resulting tortilla emerges as a low-fat, low-sodium food, packing calcium, potassium and fiber.
Quietly, the corn tortilla has surpassed bagels and muffins to become the No. 2 packaged bread product here in America, second only to sliced bread. Tortillas and their byproduct tortilla chips and taco shells have quickly become a $6 billion per year industry here in the U.S.
One of the little reported byproducts from the skyrocketing grain prices was the massive weight they inflicted on the Mexican and Central American economies. In case you didn't know, corn is the mainstay of the Mexican diet. Corn tortillas are the staple of the food chain in Mexico. Corn and maize are used in various forms of tortilla production. What bread is to the American consumer, corn is to Mexican and Central American consumers. ................
Rest of Article
Monday, July 28, 2008
Time to Cover Integrated Oil Shorts
From thestreet.com 7/28/08
A month and a half ago, I wrote about an interesting "tell" that I was getting from the oil markets. I say market(s) because I noticed a distinct diversion that day. Oil prices had just exploded.
The prior Thursday and Friday (June 5-6), oil ran up $17 a barrel. I have been trading commodities for 22 years, and I can say I have seen many things, but never anything like that before.
So with oil trading up massively those two days, I was expecting oil companies to show some real upside on the following Monday. The "tell" for me came when the energy sector was one of the weakest during this run-up in its primary product. ....
Rest of Article
Wednesday, July 23, 2008
Be a Trader, Not a Gambler
From thestreet.com 7/23/08
I remember a trade I almost made six years ago like it was yesterday. It was winter 2002 and the weather was absolutely freezing. Gas was ripping higher and I was bullish -- I was long 100 April $7 calls in natural gas.
I remember the day the calls went a full dollar in the money. I was up a cool $1 million on the trade. I will never forget the next conversation I had. I went to sell the calls and the guy holding the bid backed off a touch. He backed off by a small amount, but enough to tick me off.
The trade was still massively profitable, but I let this guy get into my head. I thought: "Fine ... but you will be sorry, this market is going higher." It didn't. Instead of hitting the next best bid to get out, I got stubborn.
I was no longer trading, I began to hope. I was trying so hard to be right, to show this guy (whom I would probably never see again) that I was right. I left the position on............
Rest of Article
Monday, July 21, 2008
Iran Talks Can Help
From thestreet.com 7/21/08
Well, did you think Iran was just going to shut down its nuclear program?
I have been closely watching the Undersecretary of State William Burns and the results of his historic meeting yesterday in Geneva with the Saeed Jalili, Iran's top nuclear negotiator.
Don't get me wrong. It is definitely a step in the right direction to send a U.S. diplomat to the bargaining table with Iran. The purpose was to negotiate with the Iranians regarding their uranium enrichment program.
I think the meeting was largely symbolic, however. The U.S. sent Burns, Condoleeza Rice's undersecretary, to the meeting for a single day. And he was sent with demands that Iran has already rejected from much more influential diplomats.
However, I am very happy we sent him. I think the message Burns carried to Geneva was actually a message being sent to a place near Iran, but not on the Persian Gulf. I believe it was a message sent to Tehran, but meant for Jerusalem...........
Rest of Article
Wednesday, July 16, 2008
It's Not So Bad Out There
From thestreet.com 7/16/08
To my mind, things not as bad as everyone seems to think.
Alcoa(AA - Cramer's Take - Stockpickr) and General Electric(GE - Cramer's Take - Stockpickr) beat analysts' estimates. And Intel(INTC - Cramer's Take - Stockpickr), Altera(ALTR - Cramer's Take - Stockpickr) and Wells Fargo(WFC - Cramer's Take - Stockpickr) have posted solid quarterly performances. Plus, crude oil dropped $6.49 on Tuesday and is down more than $1 on Wednesday.
The consumer price index was up 1.1%, an improvement for the first time in more than three months.
Citigroup(C - Cramer's Take - Stockpickr) reports results on Friday. The stock has been crushed, closing at $14.50 after hitting $56 a little more than a year ago. Analysts around the Street are certainly going to shoot low; after all, any analyst who has been around for a while is surely not going to go out on a limb with overly optimistic Citi numbers. ...........
Rest Of Article
Monday, July 14, 2008
Pawn Shop Trade Golden
From thestreet.com 7/14/08
It was almost a year ago to the day. I remember because it was just days before Major League Baseball's All-Star break. It was raining hard and the market was a bit nervous about subprime, but we had no way of knowing the Pandora's Box that would unfold in the coming months.
I had been calling the bull run in gold and was (and still am) very bullish on the metal. There was a business I had been following for a while that would be an incidental winner if gold prices stayed high and the economy weakened. I had pitched a new Bolling story for Fast Money. It was a "Dirty Trade" segment on pawn shops.
My theory was this: With a nervous economy and jittery job market, pawn shops stood to benefit. Seeing tough roads ahead, I suspected that people would pawn their gold jewelry and use the money for necessities. Pawn brokers would be the right business at the right time.
EzCorp (EZPW - Cramer's Take - Stockpickr) remains that best play on my "pawn shop" theme. It is one of the world's largest operators of pawn shops. It derives revenue from two main sources.
First, it collects interest from the loans it makes. In some states (Texas, for example, where the majority of EzPawn shops do business) the interest rate on short-term loans can go as high as 240% ... legally!
In about 25% of those loans, the customer chooses to walk away from the collateralized jewelry, electronics, musical instruments, etc. If that happens, EzPawn shops are allowed to sell those items. ....................
Rest Of Article
Sunday, July 13, 2008
Thursday, July 10, 2008
Betting on the Buck
From thestreet.com 7/9/08
The moon is waxing crescent. It is 39% visible on its way to the first-quarter phase appearing on July 10. It's not until July 18 that the full moon is visible, as the sun reflects the moon's full image back to Earth.
It is said that people, animals, tides and events are affected by the lunar cycle. The notion is that these unpredictable occasions become increasingly emphatic as we approach a full moon. It is believed that crime rates increase and people's behavior becomes more erratic and agitated as we approach the full moon.
Apply that science to the markets, and we are in store for some wild trading over the next 10 days. If the wild swings and gyrations of the last two days are any indicator of the next 10, put your seat belts on and get ready for liftoffs or crash landings or more likely, both.
So what has been moving the market the last few days? Oil? Nope. Earnings? Nah. Economic data? Not really. The one indicator that has been moving just ahead of wild swing in the market is the dollar.
The dollar started out strong in Europe on Monday, and the indexes were up in early trading. The dollar started to weaken and fell sharply at around 10 a.m. Two hours later, the Dow began a rapid slide from 11,350 down to bear territory at 11,150. Then, on Tuesday, after spending the early morning resting around the unchanged level , Mr. Jamie Dimon, CEO of JPMorgan Chase (JPM - Cramer's Take - Stockpickr)), offered a bit of hope through a truly compelling speech to the FDIC forum in Arlington, Va. ............
Rest of Article
Monday, July 7, 2008
Brazil Knows Oil
From thestreet.com 7/7/08
Ten years ago, I was in Brazil for a commodities conference, and I had a great opportunity to meet with some petroleum producers and refiners. It was clear that Brazil was getting its act together.
The oil industry was growing, and money was being spent on exploration and development of new oil fields. I realized that the Brazilian oil industry was worth watching.
The Brazilians are very forward-looking and are willing to spend big to produce more oil. They realized then and now that the world was going to need more oil. They were willing to spend some serious real on insuring their place in the global oil picture.
On a Saturday afternoon, I had some free time and went to Ipanema beach in Rio De Janiero. It was a sandy tropical beach with beautiful people everywhere. While sitting there, a kid came up to my beach chair and began showing me how he made a souvenir with wood and leather. He was very animated, and I found him amusing so I bought the thing for a few U.S. dollars.
It wasn't until a few minutes later that I realized he had an accomplice who had reached under my beach chair and lifted my bag. I got fooled by the old "look over here" scam. I had some money and nonsense in there, nothing to get too fired up about. I chalked it up to being a gringo in a place fairly unfriendly to gringos........................
Rest Of Article
Wednesday, July 2, 2008
Gold in a Pennant Race
From thestreet.com 7/2/08
Gold is breaking out of its pennant just as everyone begins to gear up for the Olympics in Beijing. As we head into the July Fourth weekend, the Olympic trials -- the competition to decide who will represent the nation in the games and go for the gold -- are heading down the homestretch.
Let me explain the logic and psychology of a reliable technical pattern -- the pennant. After a market, in this case gold, makes a big move in either direction, it starts to get volatile. Big moves up are met with big moves down.
Both bulls and bears are confident and take turns pushing the price up, then down. This goes on for days, but as time passes, the trader instinct begins to kick in ... "Why isn't this following through?"
The moves up and down become less and less exaggerated. The pattern that forms is called a pennant because the widest part of the flag is at the beginning and eventually closes in on a small point at the tip.
Pennants are great predictors of a substantial price move, but there is a catch. We don't know which direction the big move will go. The psychology again: The pent-up bulls and bears are ready to add conviction, but only one will win and we aren't sure which one. So, we wait for the "breakout." ..................................
Rest Of Article
Monday, June 30, 2008
Over a barrel: A day that shows how the global business of oil hits home in NJ
From NJ.com
by Jeff May and Tom Johnson/The Star-Ledger
Sunday June 29, 2008, 12:01 AM
Eric Bolling settles into his desk and glances at the computer screen.
"Holy crap," the 45-year-old commodities trader murmurs.
It is Thursday morning and the New York Mercantile Exchange has opened a few minutes earlier at 9 a.m., and the price of crude oil is already up $4, to $138 a barrel.
Bolling, an ex-minor league third baseman who lives in central Jersey, reaches for his phone.
"Vin, it's R.B.I.," he says, using his nickname. "We have to buy 20 of crude," -- jargon for executing a trade for 20,000 barrels.
"Wow," he says after hanging up. "We're going to see an all-time record today."
He is dead on: A few hours later, crude hits $140 a barrel, continuing a dizzying ascent that has dragged down stocks and put a dent in Americans' wallets.
Oil is a complex business. It starts with exploration and drilling and leads to refiners who turn it into products such as gasoline. Then, it's pumped into trucks and shipped to the local filling station on the corner. The price is affected by countless, interlocking factors: the value of the dollar, politics, pipeline explosions, surging demands from China and the huge bets traders make every day from London to Dubai to New York.
On Thursday alone, Libya threatened to cut production from its fields, the president of OPEC estimated crude could soon reach as high as $170 per barrel, and U.S. lawmakers took steps to curb excessive speculation.
Amid all of this, one thing is certain: Oil's historic march is changing the lives of everyday people -- from traders like Bolling to 17-year-old Brittany Dippold and the car she chooses to buy and John Brackett and the number of passengers his party boat carries.
Here's the story of how the global business of oil hit home in New Jersey over the course of a single day.
3:30 A.M.: THE DAY BEGINSÂBolling's alarm clock goes off before dawn and, after getting ready, he drives into Manhattan to appear on the Fox Business Network's "Money for Breakfast" show, which airs at 7 a.m. These days, his schedule puts him on air more often than in the pits at the exchange, but it hasn't checked his appetite for trading.
Once one of the biggest individual traders of oil and energy futures on Nymex -- at his peak, he says, he accounted for 5 percent of the daily trading -- he has scaled back. Much of his money is now invested in shares of energy companies. A good amount of the consummate trader's money is now in cash.
"It's too dangerous to make a big bet on oil futures," says Bolling, who labored in the Pittsburgh Pirates' minor league system before a torn rotator cuff forced him to search for a new career. "If I had the same stake as I had two or three years ago, I could be wiped out in a day."
After seeing the rise in crude shortly after 9 a.m., Bolling calls his clerk at the Nymex and hedges his bets by buying 2,000 ounces of gold at $913 an ounce.
10:30 A.M.: THE LIMO DRIVERÂWith the average price of gas in New Jersey running $3.986, Gene Goobic no longer calculates trips in miles. Goobic, the manager of Short Hills Limousine and Van Services, uses gallons as his measuring stick.
Newark Liberty International Airport is exactly 1.4 gallons of gas away from the company's headquarters in Millburn, for example, using the service's Lincoln Navigator, he said.
On this morning, Goobic picks up a family of four in Short Hills for a trip to Newark airport. The limo service, shelling out $2,600 a week for gas, has started charging passengers a 15 percent surcharge to help cover costs.
"We have to pick up the slack," Goobic says. "If we don't, we're going to lose a lot of money. We have to stay above water."
To make matters worse, he says, a lot of his corporate clients are capping how much they're willing to pay.
"So if a guy calls me up and says my company is only letting us pay $71, sometimes we have to bite the bullet," he says. "Do we lose the $10 bucks or do we lose the customer? If a person or company uses us a lot, we'll give them a little break. I'm just hoping prices don't go up any more."
11:00 A.M.: 'BURNING GAS'Sam Abolata is on his fifth and, he says, his last Hummer.
The owner of Mia Sorella restaurant in Manville says he's now paying more for gas than the lease payment of his 2007 Hummer H2 SUT. The daily commute from his home in Flemington is easily costing him $40 a day, he says, as he prepared to open for lunch at 11 a.m.
"Even when the car's parked, it feels like it's burning gas," he says. "Maybe I should buy a gas station."
He's trying to sell the Hummer, but there aren't a lot of takers. Later in the day, a survey by the Civil Society Institute and Opinion Research notes three out of four Americans expect gas to cost $5 a gallon by Labor Day.
So what will Abolata's next vehicle be?
"Maybe a bicycle," he said.
11:10:'NO-NO'Deborah Fineman, president of Mitchell-Supreme Fuel in Orange, scans a computer screen to see the latest Nymex quotes. These days she watches prices "all day, every day."
Prices were up 14 cents -- and climbing -- an hour after OPEC president Chakib Khelil told a French TV station crude will likely rise to between $150 and $170 a barrel this summer.
"It used to be, in the summer, you'd buy futures contracts and try to establish prices for your customers," says Fineman, a lawyer who bought the company in a 1988 leveraged buyout with her husband, John Bozik. "The problem is the market has gone against historical trends."
Higher prices have put the squeeze on Mitchell-Supreme, which ships millions of gallons of fuel oil a year to homeowners and apartments in northern and central New Jersey.
Heating oil is up 55 cents a gallon this year, which translates into a 76 percent increase since January, she says. Many residential customers, whipsawed by the twin threat of recession and inflation, can't afford to fill their tanks.
"We go to fill up and the homeowner says, 'No, no,' because they figure the price is going to come down," says Fineman, adding Mitchell-Supreme's profit margins have slipped 10 percent over the past year. "So instead of going to the house twice, you have to go three, four or five times. You can't pass on the entire price increase to our customers because they can't afford to pay their bills."
NOON: ANOTHER WILD DAYBolling munches on a turkey wrap at a restaurant next door to the exchange. When someone remarks how relaxed he seems, he picks up his phone and calls his clerk: "Hi, it's R.B.I. What's crude doing? How about gold?" He nods, reassured, and says neither has moved since he bought them a few hours earlier.
Bolling learned the hard way of not paying close attention to his trades. Six years ago, he took the morning off to read to his son's preschool class. At the time, he had a big bet that natural gas prices would fall. But the night before had turned unexpectedly frigid. Gas futures were soaring.
As he sat in the class reading, Bolling was bombarded with text messages: "Where are you? You have to get here." He began to sweat, but finished reading the book. The teacher asked the class: "Any questions?" Twenty-five hands went up, he recalled, but he stayed and answered every one.
When he left, his son looked up and told him, "Dad, it was great."
By the time he got back to work, he was down $2.1 million, he recalls.
1:00 P.M.: MISSING THE TORN SHIRTBolling enters the Mercantile Exchange a little before 1 p.m., shaking hands with most of the people he passes. He never wears a tie -- not even to his own wedding -- and always wears mismatched socks, a superstition from his days playing baseball.
He began trading at the exchange in 1986 and quickly fell in love with the competitiveness, confusion and chaos of the pits.
"I love trading," he says ruefully, noting the exchange floor has changed since electronic trading began in 2006. About 80 percent of trades are made on computer screens.
"I miss it, coming out with a wet shirt, a torn shirt, but it's not there anymore," he says.
Upstairs in his 12th floor office with drop-dead views of the Statue of Liberty, Liberty State Park and Jersey City Gold Coast, he picks up the phone and rolls over some natural gas contracts for July into August so he doesn't actually have to take delivery.
"Okay, dude," he says once the deal is done. "Perfect."
2:05 P.M.: THE PARTY BOAT CAPTAINÂJohn Brackett said he spends two hours a day tracking commodity prices. That didn't used to be in the job description of a party boat captain.
Since 1980, he has operated the Queen Mary, a 75-foot fishing boat that sails out of Point Pleasant Beach. Brackett, who usually heads out to sea at 7:30 a.m., so customers can catch runs of bluefish and striped bass, returns to dock shortly after 2 p.m.
The diesel fuel he uses has jumped 50 percent in price, and he says he knows why.
"They are not just building buildings over in China, they are building whole cities, and because of that they need diesel to run their trucks, trains and all of their heavy equipment," he says.
To save fuel, Brackett doesn't open up the Queen Mary's engines as much as he used to. But there's another bigger problem.
"What affects me is when people are coming from Allentown, Pa., and they have to drive 120 miles," he says. "If they get 20 miles to a gallon, that means it costs them $8 more than last year to make the trip. The disposable income is not there."
2:20 P.M.: CLOSING OUT THE DAYOnly 10 minutes remain until the close of regular trading at Nymex.
Bolling has only made three trades so far, a far cry from his days in the trading pit, when he would have made more than 200 transactions by this time. These days, it's the big banks and hedge funds who move the price of energy.
"The trends are much bigger and deeper than they were before," he says.
5:00 P.M.: A RUN ON SMART CARSRay Catena's Edison dealership is packed with Mercedes, Porsches and Aston Martins. But his Smart showroom is the busiest area on the lot.
The dealership has sold more than 250 of the Mercedes-Benz-made Smart cars -- which start at around $11,600 -- since they first started arriving Jan. 18. On this day, he's got 10 left. They probably won't last the week, sales manager Leigh Farrell says.
Brittany Dippold, meanwhile, is one very happy 17-year-old.
Her father, Anthony Dippold, is closing the deal on a Smart car convertible for her.
Why the Smart car?
"Four dollars a gallon," he says. "And this car gets around 40 miles to the gallon."
The car was actually Brittany's choice. After shopping and researching, she was pushing for a used Audi TT. But when she saw the Smart car and its three-cylinder, 70 horsepower engine, she simply "fell in love with it," her father says.
The deal clincher: she's going to be paying for the gas.
POSTSCRIPTThe oil rally didn't stop Thursday.
The price of crude touched $142.99 a barrel Friday, up more than $8 in just 48 hours. Analysts' predictions of $150 -- which months ago seemed outlandish -- may be just days away.
Staff writers Sam Ali, George E. Jordan, Joseph R. Perone and Ian T. Shearn contributed to this report.
Profit on Offshore Drillers
From thestreet.com 6/30/08
Editor's note: This is part III in a series on oil. Let me just say that this has been an interesting two weeks with this column.
First, I wrote about the emerging problem with the oil supply and potential fixes. I suggested that after talking to big ocean driller Transocean (RIG - Cramer's Take - Stockpickr) that we should begin the process to push Congress to lift the moratoria on Outer Continental Shelf (OCS) drilling.
After doing some painstaking due diligence, I found out that we may achieve oil independence in as little as a year, and as long as six years, depending on the location, depth and prior infrastructure.
Next, I took the position a step further. I contacted other drillers including another major offshore driller, Diamond Offshore (DO - Cramer's Take - Stockpickr). Officers there confirmed the information I had developed during my discussions with Transocean. I have gone on record saying that I believe that these time frames are realistic and attainable.
Since those two columns ran, I have been bombarded with email requesting more information.
Last week, I had the good fortune to interview both Sarah Palin, the Republican governor of Alaska and Ed Rendell, the Democratic governor of Pennsylvania. Both are very important in the world of oil.
Palin came out very much in favor of drilling the OCS and her state's own Arctic National Wildlife Refuge (ANWR) territory in an effort to reduce our dependence on foreign oil. She agreed that the oil reserves of ANWR are in the 10 billion-barrel range. She recognizes the need for that oil if we are ever going to reduce our reliance on foreign producers.....
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Friday, June 27, 2008
Thursday, June 26, 2008
Wednesday, June 25, 2008
How to Solve the Oil Crisis
From thestreet.com 6/25/08
Oil is $130-something per barrel, and gasoline is over $4 per gallon. I am paying more for everything from milk to electricity to airline tickets. FedEx(FDX - Cramer's Take - Stockpickr) and UPS(UPS - Cramer's Take - Stockpickr) aren't delivering ... earnings. Retail stocks are getting hit because people aren't buying stuff with gas at $4.
And Starbucks cannot sell a $4 latte for the same reason. This is what happens when the world's most ravenous (for oil) country has no clearly defined energy policy. These are just a few of the results of a lack of national awareness of the problem and the potential solutions.
Barron's pointed out that the average U.S. consumer uses 25 barrels of oil per year. In China, that number is two barrels and in India it's less than a single barrel. The perception is that the growth in oil demand in those emerging countries will pick up and they will use more and more oil. True, we will need more oil.
What's the problem?
The world has been running out of oil?
The world has run out of "easy oil"?
The world is going to run out of accessible oil?
False, false and false.
We have billions upon billions of barrels and gas equivalents of oil available to the world. In fact, we have billions upon billions available to us in the U.S. We have an estimated 18 billion barrels off the Outer Continental Shelf.
Certain people in Congress would have us believe that those barrels are 10-plus years away from our refiners' cracking towers. That's just not true. I told you about the conversations I had with Transocean(RIG - Cramer's Take - Stockpickr) officers and their time frames for that oil in the last column. I have since confirmed that opinion with other big-time ocean drillers, and the picture remains as clear as it was last week.....
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Monday, June 23, 2008
Emerging Solutions for the Oil Crisis
From thestreet.com
When the market is acting crazy and I need to clear my head, I get out and run or power walk. After 4-6 miles, my mind usually becomes much clearer and I can focus on the issue, trade, or whatever.
I'm in LA right now, trying to make sense of the oil market. I have done two 10 mile jaunts on back-to-back days. When I left home last Thursday, crude oil had just dropped $4.75 on word that China had raised fuel prices (by reducing subsidies) to most drivers.
Speaking on TV last week, I had suggested that we should lift the drilling moratorium in the Alaska National Wildlife refuge (ANWR) and the Outer Continental Shelf (OCS) off of the off the U.S. coast. Noting these potentially huge reserves, the pension funds, hedgies and other speculative interests might bail on a maturing bull run in oil. Selling on top of selling might break the bull market's back and send prices south for now.
A Congressman followed my segment and suggested that drilling wouldn't help for 10 years or more. I know this is absolutely untrue, so I called Transocean (RIG - Cramer's Take - Stockpickr), the biggest driller in the world. An officer of the company told me that depending on the location of the drilling, oil could be realized in as little as a year.
Ultra-deepwater fields might produce in 3-5 years. For the most remote locations, without any prior infrastructure support, that barrel may require a 4-6 year window. I suggested 8 years and he said that he could not envision a situation where it would require more than 6 years to bring a barrel out of the ocean floor. .........
Saturday, June 21, 2008
Thursday, June 19, 2008
Wednesday, June 18, 2008
Charge Ahead With Mastercard
From thestreet.com
"Fill, Cash, Regular." Those words are becoming more difficult for me to say to the gas station attendant for a fill-up. I would gladly pump my own gas to save a few cents per gallon of liquid gold, but the law requires someone else to do it for me in New Jersey.
After spending the first few years of my post-baseball career working for Mobil Oil as a marketing representative, I learned that the added octane of premium blends is not worth the higher price. So I use "regular" unleaded. My only exception: when premium gas (not mid-grade) is within five or six cents per gallon higher than regular unleaded.
I just hate the fact that I leased a Range Rover Sport that guzzles gas the way my nine year-old swigs Gatorade. I am in the service station at least once a week. At a combined 10 miles per gallon, a 20-gallon tank, a 20-mile commute to Manhattan and a weekend at the beach, I spend entirely too much time at the gas station. So I'd rather "Fill" rather than come back sooner than necessary.
Now, the interesting part: "Cash." Who carries this kind of cash around anymore? I am absolutely bewildered when the attendant asks me for payment. It's like 80 bucks! "Are you kidding?" I never, ever used a credit card for gas. I always paid cash. Not anymore. I now use the old plastic.
We have been used to dropping $20 or $30 in the gas station, but now we are approaching a C-Note for gas- just wild! That makes the decision to use plastic easier.....
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