Ft. Collins Filling up

william the wie

Gold Member
Nov 18, 2009
16,667
2,402
280
WTI's warehouse for delivery on futures contracts, Ft. Collins, is filling up. This has some obvious consequences for the stock market.

Margin calls on futures are not restricted to a trader's account much less just futures contracts.

Panics jump markets. 1929 was preceded by a collapse in the small grains market and major scandal in the London Stock Exchange which may have been related to commodities trading.

Banks have been issuing junk bonds to wild-catters and selling them to yield whores as high risk/high return vehicles. It is quite possible that a few bond funds may go belly up in spectacular fashion..

Sales of royalty trusts, oil field royalties, to little old ladies have been hot for years so lawsuits against brokers are quite likely.

So, this problem is likely to get real interesting.
 
Always follow Brent and WTI, then handle my money accordingly.

Have done well since 2001.
 
Well commodities should always be part of a balanced portfolio but I much prefer pipelines and NG utilities with their own in house supplies. But it looks like we are in territory not seen since the legalization of private bullion possession in the Carter administration. Demand is shrinking and supply is expanding.

Wattage production, industrial commodity use and several other quick, down and dirty estimates for GDP indicate that China's economic growth has been overstated for as much as a year. Since Chinese debtloads are based on a growthrate of at least 7% and it's real growthrate is 2-5% according to more and more analysts a crash bigger than the meltdown could be coming.

So, the question is are we headed for a double whammy? The expansion of oil production was and is predicated on Chinese growth continuing to be that of an emerging economy. If it has become a developed economy then the energy over supply is really huge and China passed the poorer countries of Europe in purchasing power parity about a decade ago.
 
Good analysis. All I know is that I was told to maximize liquidity when energy looked screwy. Had friends lose their shirts over the last 14 years, and we have ended up with more properties and some cash than was comfortable to deal with. I would like to sell some of that off by summer.
 
If you are in CA in particular the fire and mudslide seasons are likely to be epic. As to real estate I can't understand how my 900 sq.ft under AC can possibly be worth 30 times purchase price but that is what I'm told.
 
I'm in N FL, Jax Beach to be exact and 1.2 miles from the ocean. Given the number of people fleeing the left coast and North East but as to CA properties a piece of advice. All of the valleys in the state mean no evaporative cooling while the drought continues and ever lower inland air pressure to start tornadoes and attract hurricanes. Since building codes to resist seismic damage are bass-ackwards to what reduces cyclonic damage a tipping point may be closer than you realize.
 

Forum List

Back
Top