Comments on: Dollar, Asian Stocks Tank on Carlyle Capital Collapse, Credit Market Worries

By: Anonymous

Anonymous — Thu, 13 Mar 2008 19:56:00 +0000

If you reprice the S&P 500 in euro terms, it has already fallen by more than half since its peak in 2001.

By: Anonymous

Anonymous — Thu, 13 Mar 2008 15:54:00 +0000

In other words, the production decline rate will outpace the decline in demand due to recession, keeping the price of oil rising. And as energy becomes the limiting factor in production, all commmodity prices will rise with oil.

Moe Gamble

By: Anonymous

Anonymous — Thu, 13 Mar 2008 15:50:00 +0000

There is an annual oil production decline rate that De Margerie of Total estimated at 5-6 million barrels of oil a day. Schlumberger's Gould has given an estimate of 8% for the decline rate.

We'll be lucky to offset that with 2 million barrels per day of new production this year. Saudi Arabia's Khursaniyah is already 4 months late, and now is promised for "later this year." Manifa (1 million barrels per day) has been delayed a year. Chevron just announced that 7 projects due online this year have been postponed until at least next year.

Discoveries in the Gulf of Mexico were the lowest in 2007 of the past 10 years, despite record spending on exploration.

Right now, the IEA estimates that demand will be growing 2% in 2008, largely because of increases in demand in China, India and the oil-exporting nations themselves (especially the Gulf countries and Russia). But even if you allow for zero growth in demand, you're looking at something like a 50% increase in the price of oil, even if the dollar stabilizes at this level.

Moe Gamble

By: Anonymous

Anonymous — Thu, 13 Mar 2008 14:46:00 +0000

"Energy and metals will eventually correct violently once it becomes apparent how bad the US recession will be..."

Perhaps. But, then again, why would investors want to hold paper currencies during the demoliton of this house of cards? They may see a recession and lower demand but it doesn't mean they won't increase their own demand for something that holds value. In the end it's all a confidence game - as you and I both well know. Step right up and pick your poison. I'll pick something that's either useful or has a tradition of holding value, thanks.

An ounce of gold today at it's "inflated" level buys the same 10 barrels of oil it would purchase in 1953.

Hardly inflated, eh?

By: Anonymous

Anonymous — Thu, 13 Mar 2008 13:29:00 +0000

"Yves, if you re-price Nikkei in dollar terms, the fall's not nearly as dramatic..."

Yves, if you re-price S & P 500 in yen terms, Holy S**t....!

Econolicous

By: vlade

vlade — Thu, 13 Mar 2008 09:32:00 +0000

Yves, if you re-price Nikkei in dollar terms, the fall’s not nearly as dramatic…

By: a

Thu, 13 Mar 2008 08:20:00 +0000

I don’t think the Carlyle news is really that significant. It’s the Fed, pure and simple. Investors are taking the view that the Fed is willing to print as many dollars as it takes to save the banking system; since that’s quite a lot, the dollar will be trashed. This has the effect of forcing American housing losses on foreigners, which is probably the most politically expedient option.

By: Anonymous

Anonymous — Thu, 13 Mar 2008 08:00:00 +0000

yves

why do you suggest this undoes the fed action? its only $20B being dumped on the market (assuming the margin lenders dump).

you suggesting its the fear of contagion (cockroach) factor?