Paul Krugman: the U.S. Will Have to “Seize” Big Banks

Nobel laureate economist Paul Krugman said the U.S. will eventually have to “seize” big banks as the economic and financial crisis deepens.

“In the end, we’ll come to it,” Krugman said in an interview with Bloomberg Television today, referring to nationalizing banks. “You guarantee the liabilities of everybody but seize the big ones.”

He also said the U.S. economy won’t stabilize until “late in the year.” Paul Krugman joins Stiglitz, another Nobel laureate to express his concerns over this bank plan.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Nobel Prize-winning economist Joseph Stiglitz on the Geithner Plan

The U.S. government plan to rid banks of toxic assets will rob American taxpayers by exposing them to too much risk and is unlikely to work as long as the economy remains weak, Nobel Prize-winning economist Joseph Stiglitz said on Tuesday.

"The Geithner plan is very badly flawed," Stiglitz told Reuters in an interview during a Credit Suisse Asian Investment Conference in Hong Kong.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

S&P 500 Crosses 50 Day Moving Average

I have found a very good article on Bespoke Investment Group Blog. They mention the S&P crossing the 50 day moving average.

Sentiment is positive for risk taking investments like long oil positions.

"After breaking above its 50-day moving average briefly early last week, the S&P 500 failed to take out this resistance level and headed lower for the remainder of the week. But the index has broken above its 50-day once again this morning, and its ability to hold above this level will be a key test for whether or not this rally can continue. The S&P's 50-day is currently at 795, so watch for where the index closes in relation to this level today."


Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Oil Futures Trade at Multi Month Highs

Nymex Crude Oil Futures rose to 53 dollars a barrel this morning to the highest levels in almost four months. The move is being supported by a weak dollar, and the US plan to remove toxic assets from bank balance sheets.

Crude oil Futures rose 64 cents to 52.71 dollars a barrel.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Latest Hugh Hendry Videos - Part 1

Hugh Hendry is a british contrarian hedge fund manager. One of the best in this field.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Hugh Hendry - The Eccentric Hedge Fund Manager

I have found this very interesting article about my favourite hedge fund manager on Seeking Alpha. Here in the Oil Traders Blog you can watch all of Hugh Hendry`s videos. He is not only insightful but very fun to listen to.

"Hendry does not have the notoriety of a Jon Paulson but he has been prescient in many of his calls - plus he has agreed with me on many topics (always a bonus).

As a guest, he is incredibly engaging with wicked wit (snark) and the ability to dance around (or verbally undress) opponents. He is a bit cocky though. I am posting a series of 4 videos from this month - all before the Fed decision to go Banana Republic, but in case you missed it, the United Kingdom chose the same path (create debt with one hand of power, and buy it with the 2nd hand), so much of what he talks about applies to both countries. He is firmly in the deflation camp and no matter what amount of printing presses, he thinks we're going Japan.

Unfortunately for those who disagree with him he has been spot on, on his calls up to here - I don't have firm data on his performance but he says he made 32% in 2008 and is up 10% through March in 2009, which spanked the pants off most professionals worldwide. "Pundit-wise" he has been nailing things. At the bottom of this post is an "editorial" he wrote back in November 2008.

Inflation will become a reason to worry for authorities again at some point, but they should think about combating deflation right now, Hendry said. "It is coming back in the future. All I'm saying it is just an unprofitable proposition at the time," he said. Betting on inflation is as if "we got a new book and we've read the last page. But if you read the entire novel, it's a different journey."

The market has grown for about 30 years and for a long period, it will be "going nowhere," Hendry said, likening this period with the one after the crash of 1929 and with the crisis in Japan at the beginning of the 1990s, despite claims that this time it is different because the world has evolved."

Oil Rallies 10% This Week

Oil futures ended lower on the last trading day of the week, pressured by an upmove in the US Dollar.

Even though, prices held above 51 dollars a barrel and ended the week up 10 percent.

The Federal Reserve's aggressive measures boosted optimism of a global economic recovery and on the reflation trade. Inflation might just be around the corner.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Oil Up on Fed's Bond Move and Weak Dollar

"We have for the time being a return to risk appetite in the oil market and it's based on the Fed's announcement yesterday" said analyst Mike Wittner of Societe Generale.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Oil Tops $50 as Inflation Concern Spurs Commodities

Crude oil rose to near 50 dollars a barrel for the first time in more than 2 months, after the U.S. FED announced plans to spend 1 trillion dollars buying back long term debt.

The Fed is seeking to purchase U.S. Treasuries, mortgage- backed bonds and other debt, raising optimism that moves to end the global recession will increase fuel demand. The dollar traded near a two-month low against the euro, prompting investors to purchase oil as a hedge against inflation.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Meredith Whitney: This Year will be Worse than 2008

A surge in borrower defaults and unemployment pressures will make 2009 an even uglier year for banks than last year, analyst Meredith Whitney said.

Meredith Whitney predicts "breakups and M&As on a grand scale" as the financial industry seeks to remake itself in the face of all its capital pressures. This were Meredith Whitney`s comments:

"I don't think this year is going to look any better than last year. In fact it will look worse because there's so much credit coming out of the system."

"The probability of more people going into default is higher, so the banks are going to have a tough time"

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Pimco`s El-Erian: Early to Call a Market Bottom

"If you're intellectually honest, we simply don't know. There are so many moving pieces. The reality is we were overdue for a technical bounce. We're getting it, but it's too early to call the bottom with any conviction."

But El-Erian said things are changing too rapidly and there is too much uncertainty over Washington policy-making decisions to declare that the worst has passed for the economy and Wall Street.

"It's an upside-down world where everybody is in the same boat and you need a lot of coordination so that we can navigate what are pretty fluid conditions. There is some good news but there's also some bad news."

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Oil Outlook

Fadel Gheit, managing director of oil and gas research at Oppenheimer & Co., and CNBC contributor Ron Insana share their outlooks for oil.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Oil Goes Down on OPEC Decision

Oil traded down to around 44 dollars a barrel today after OPEC decided to leave existing output targets unchanged.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

OPEC agreed to keep oil production quotas unchanged

OPEC agreed to keep oil production quotas unchanged and will meet again on May 28 to review targets, ministers said after today’s meeting in Vienna.

“We decided to leave this unchanged and now it is time to fully adhere to the cuts we agreed upon” said Qatari Oil Minister.

The Organization of Petroleum Exporting Countries met in Vienna today to discuss possible action to revive prices that remain $100 below July’s record even after a record production cut agreed on in December. Oil futures have risen 3.7 percent this year to finish last week at $46.25 a barrel in New York.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

A new Tax of 0.25% per Trade?

One congressman wants to tax the value of all trades one quarter of 1%. The man who introduced the bill is congressman Peter Defazio Democrat from Oregon. These were his comments on Fox News:

" Well you know we heard this before 1932, when congress doubled the then tax of point 22%. Devastatingly diminish banking business threaten the country's banking structure, possible closing of the stock exchange. The stock exchange at that point was that 41. Congress doubled the tax and use the money to rebuild America. And then of course the stock exchange went up to a thousand before the tax was allowed -- in 1966. The brits have a tax of one half of 1% of all trades on the London exchange I think people are still doing business there aren't --"

One thing is for sure, if this tax goes through the Dow Jones will trade below 5,000 in a nutshell.

Conoco CEO sees Oil at 60 to 70 USD

ConocoPhillips' (COP) chief executive said Wednesday that the company sees oil prices moving up to $60 or $70 a barrel over time but not going more than $80.

Speaking at the company's analyst meeting in New York, Jim Mulva said the Houston-based oil giant's strategy is based on modest oil prices.

"We don't have expectations of oil prices of $80, $90, $100, but we do look at oil prices moving up from the low levels we've seen," Mulva said. "Maybe in neighborhood of $60 to $70 over time."

In the same meeting, ConocoPhillips Chief Financial Officer Sig Cornelius said the company needs oil prices to average $52 a barrel and natural gas prices to average $6 per million British Thermal Units to break even and for it to able to pay dividends in 2009. If oil prices average $40 a barrel, ConocoPhillips could lose $3 billion this year and force the company to cut its capital expenditure budget further, he said.

"We believe we do have flexibility to make further capital reductions if necessary," Cornelius said. "Our debt may creep up if facing that scenario." He added, however, that reducing the company's dividend is not under consideration.

ConocoPhillips reduced its 2009 budget to $12.5 billion.

Answering questions about possible acquisitions, Mulva said bringing down debt takes priority over making purchases.

"Given our share price...and our debt position, we really think the priority is bringing the debt down," he said.

Earlier Wednesday, the company's exploration and productions vice president said ConocoPhillips' current strategy doesn't include acquisitions targets, but the company isn't ruling out entering into deep-water joint ventures.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.