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Sunday, March 3, 2024

Monday Mayhem – Iraq Kicks it up a Notch

Iraq shiite militia

“A well-regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.”

Iraqi citizens are taking it to the streets to stop the Sunni Militant advance that has now moved on to 
Saadiya, a "city" of 20,000 people which leads the US media morons to conclude that they are just about to take Baghdad, a city of 5,672,513.  The MSM plays on American's complete lack of geographical knowledge and poor math skills to excuse the profiteering by their sponsors
(Banksters and Energy Companies) that has driven the price of oil in America up 7% this month – even though oil wasn't this high during most of the actual war in Iraq.  

Anyone who actually knows anything about war knows that the ISIL doesn't have the men, equipment or supply lines to hold what they have now, let alone march on Baghdad, let alone move another 200 miles south towards the nation's oil fields – but that doesn't fit the story the media is spinning, so it doesn't get any play.  

As noted by the New York Times (and pretty much no other paper) the goal of the ISIL is to provoke a civil war in Iraq and many of their clams of captured cities and Shi'ite executions are nothing but propaganda meant to incite riots.  As I said last week, if you follow the money, it trickles down from the $2Bn monthly windfall this unrest is giving NYMEX traders, not to mention the 90M barrels of Global oil sold each day for +$7 ($19Bn per month), 2M of which (+$420M per month) comes from Iraq itself.  

Despite all the unrest, our $107.50 oil short from Friday's post is still going strong at $107 this morning (up $500 per contract) and we're still shorting at the $107 line (those of us not so crazy as to leave shorts on over the weekend) as we're hoping to see some capitulation on the 154,000 contract that remain open (1,000 barrels per contract) on the NYMEX between now and Friday's termination date.  

As of Friday, any open contracts must accept delivery FOB at Cushing, OK – a terminal which holds, at most, 50M barrels and is half full already.  I posted a chart on Friday that showed FAKE!!! open interest of 172,551 open contract and now, one trading day later, it's down to 153,752, which means they canceled about 19M barrels worth of orders on Friday.  

Why, you may wonder, would traders cancel over 10% of their orders in one day when there's a crisis driving up the price of oil?  Well, that's because it's FAKE!!!  The crisis is fake, the demand is fake – the entire energy trading set-up is nothing more than a con game to extract a maximum amount of profits from Global consumers in exchange for the 2nd most plentiful liquid on the planet.  

I'm not going to have a big debate on this matter – you either believe it or you don't but we did tell you how to make $750 on Wednesday and $750 on Thursday and $500 on Friday shorting oil, all of which worked our perfectly – so let's at least conceded that there may be something to this scam theory that bears investigating by Congress (if they weren't also owned by the same Banksters and Oil Cartel members as the media is).  

What I can tell you is that, by Friday, all but 20M of the 153M barrels of FAKE orders will be canceled.  These are current contracts that would deliver 153M barrels of oil to the United States in July at (currently) $107 per barrel.  

By cancelling those orders, the Criminal Cartel that controls energy trading in the US will create an artificial supply shortage in the US, right at the height of summer driving season, which will enable them to charge $20-30 more than the fair price of oil (don't take my word for it, ask the CEO of Exxon) for another month.

If you want to do something fun with the kids this summer, send this article to your Congressmen along with an Email asking them what they are doing about price manipulation in the Energy Markets and then send us their responses.  We did this last year with our Members and, amazingly, many of the letters we got back, especially from GOP Senators and Representatives, contained identical language – as if it were written by Oil Lobbyists on their behalf!  

USO WEEKLYMeanwhile, we'll see if we can get another entry on shorting oil (/CL) at $107.50 (or USO $39.50) in the usual 9am run-up into the NYMEX open (see chart every day!) but I don't think they're going to get these today as already the premise (Iraq falling) is stretching very thin as the Sunnis run out of small towns to roust.  

Bloomberg is running a headline which reads "Oil Topping $116 Seen Possible as Iraq Conflict Widens" but, if you actually read the article (as few people do), they are talking about BRENT Crude, not US WTIC contracts.  It's a subtlety that, of course, will be lost on most traders (intentionally).  

So it's another fine morning to short oil and, of course, we're still working our Buy List (Members Only) and, halfway through our May Trade Review, I notice that we had over 100 Trade Ideas in the First three weeks of the month, over 80% of which were successful so I'm not going to apologize for going oil crazy at $107 – when we have an opportunity to make the same winning trade over and over and over again – we take it!  

In other news of note, Central Banksters have been propping up Global Equities markets by directly buying positions for themselves.  As noted by David Marsh, "Large and similar-minded public-sector investors can show herd-like behavior, seeking the illusive return, for example in the “search for yield” in many markets and thus creating fresh volatility."  According to the OMFIF (Official Monetary and Financial Institutions Forum) $29.1Tn of investments are now held by 400 public-sector corporations in 162 countries.  

Norges Bank Investment Management (NBIM), with $880 billion under management, of which more than 60% is invested in equities. The fund owns on average 1.3% of every listed company globally, and 2.5% of listed companies in Europe.

Rivaling NBIM is now the State Administration of Foreign Exchange (SAFE), part of the People’s Bank of China, the biggest overall public-sector investor, with $3.9 trillion under management, well ahead of the Bank of Japan and Japan’s Government Pension Investment Fund (GPIF), each with $1.3 trillion.

 If you were wondering what idiots were buying equities at these ridiculous valuations – there's your answer.  Hey, I'd buy Trillions of Dollars worth of stock too – if I were able to print the Trillions of Dollars I was using to buy them with! 

$4Tn has poured into Europe alone in the past two years and European Equities are now trading at a record 17.5 times annual earnings.  That's a return on equity of just 5.7% but, of course, that sounds FANTASTIC compared to bonds, doesn't it?  

In fact, Corporate Dividends are now higher than the 2% average bond yields and those yields even sound good compared to Japan's 0.59% rates on 10-year notes.  Japan's bond rates have gotten so unattractive, in fact, that people have finally stopped buying them.  Benchmark 10-year bonds failed to trade on April 14 for the first time since December 2000 and didn’t change hands during two morning sessions last week. The 12-month moving average of JGB trading volume dropped to a record 39.6 trillion yen ($388 billion) in April, according to Japan Securities Dealers Association figures going back to September 2004.

“The flows on both the buying side and selling side continue to fall,” said Takehito Yoshino, the chief fund manager at Mizuho Trust & Banking Co., a unit of Japan’s third-biggest financial group by market value. “Falling volatility is a very serious problem for traders and dealers who are unable to get capital gains.”

“It’s difficult because the business is shrinking,” Hiroshi Kunimura, the director of fixed-income trading in Tokyo at Barclays Plc, one of the 23 primary dealers obliged to bid at government bond auctions. “Because we’re in an environment where traders take positions at auctions only to sell them at BOJ buying operations, trading volumes with investors struggle to increase.”

 So the only person buying Japanese debt (now 240% of their GDP) is the Bank of Japan.  This is what we usually call a crisis folks or, as the MSM likes to say – "Monday".  

Be careful out there!  

 

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