Friday, January 27, 2012

Kyle Bass: SHTF imminent

Kyle Bass on The Global Economy & Finance Situation – BBC Interview, recorded 15.11.2011
Bass schools airhead BBC hostess

India uses gold to buy oil

India to pay for Iran's oil in gold
India has decided to pay Iran in gold for the oil it purchases, according to a report carried by an Israeli news website DEBKAfile. The move is an attempt to work around the sanctions imposed by the United States and Europe over Iran's alleged nuclear programme. India had earlier indicated that it was in talks with Iran to pay for the oil in either rupees or in yen, but now it seems that India has decided to switch to gold.

Wednesday, January 25, 2012

Marcellus is a gas (lease) bubble that will burst

DOE slashes gas estimate for Marcellus Shale
On Monday, Chesapeake Energy announced it would respond to "the lowest natural gas prices in the past 10 years" by cutting production and reducing the number of active drilling rigs in "dry gas" areas, including parts of the Marcellus Shale in northeastern Pennsylvania. Chesapeake also said it would cut expenditures on new gas leases from $3.4 billion in 2011 to about $1.4 billion this year, and focus that spending on "liquid-rich plays."
John Michael Greer at the Archdruid Report:
Thus it’s as certain as anything can be that at some point in the fairly near future, probably though not certainly within a year or two, the shale gas bubble is going to pop, major names in the industry are going to go the way of Countrywide Mortgage and Washington Mutual, and gas drilling is going to slump until rising gas prices and declining budgets for exploration and drilling come back into a relationship that makes sense. Mind you, it’s equally certain that the closer we get to the bubble’s end, the more extravagant will be the claims made for the permanence and game-changing nature of the so-called “shale gas revolution,” and the more abusive will be the responses of those whose jobs depend on the bubble to any suggestion that a bubble is in fact what’s going on.
James Howard Kunstler
the manias over shale oil and shale gas will reveal themselves as just more bubbles in a long cavalcade of bubbles, and both will begin to founder on a shortage of investment capital. The shale plays will prove to have been a national self-esteem-building program, not any part of an energy policy.

Tuesday, January 17, 2012

Barret Capital Management accused of using client cash for its own purposes

Canada version of the MF Global scandal, eh
TORONTO - One of Canada's investment regulators has accused Barret Capital Management, a firm specialized in futures and options on metals and other exchange-traded commodities, of using client money for its own purposes. The Investment Industry Regulatory Organization of Canada warned Monday that Barret clients are at risk due to the firm's "ongoing misappropriation of their money to fund losing trades and ongoing misinformation about the value and holdings in their accounts." The allegations have not been proven. IIROC has set a hearing for Tuesday morning to suspend Barret's membership in the organization and stop Barret from dealing with the public. In requesting the expedited hearing, the regulator alleged Barret made "significant misrepresentations to clients including through manipulating account values, misrepresenting account values and holdings by way of false account statements or otherwise providing false information to clients and by manipulating on and off book payments to clients."

Friday, January 6, 2012

Hungary sovereign issuance debt downgrade


Fitch Ratings-London-06 January 2012: Fitch Ratings has downgraded Hungary's Long-term foreign and local currency Issuer Default Ratings (IDR) by one notch to 'BB+' and 'BBB-', from 'BBB-' and 'BBB' respectively. The Outlook on the long-term IDRs is Negative. The agency has also downgraded Hungary's Short-term IDR to 'B' from 'F3', and its Country Ceiling by two notches, to 'BBB' from 'A-'.

"The downgrade of Hungary's ratings reflects further deterioration in the country's fiscal and external financing environment and growth outlook, caused in part by further unorthodox economic policies which are undermining investor confidence and complicating the agreement of a new IMF/EU deal," says Matteo Napolitano, Director in Fitch's Sovereign Group.

Sunday, January 1, 2012

Don't believe the hype about energy

Oil is still around $100 per barrel.

Oil is still $100 per barrel. Think about that for a minute. It started last year at $91 a barrel. The U.S. is driving less miles now than we were in 2007. Europe is in recession. The U.S. is headed into recession. With demand down, prices should have fallen. There have been misleading stories in the MSM about the U.S. exporting petroleum products and the AWESOME Bakken oil fields. It is nothing but bullshit spin. The supply of cheap easily accessible oil is declining. The existing easy to access oil is depleting and the newly discovered oil is hard to access and expensive. Obama is praying the spin will work until November. As the article below details, he may make it through 2012, but by 2014 the gig will be up. If Obama chooses to attack Iran, all bets are off. The economy will collapse at $150 oil.