That's Alfred Frueh's January 16, 1932 New Yorker classic, "Just around the Corner", commenting on President Hoover's statement that "Prosperity is just around the corner".as a reminder of how extended a decline can be and how they can fool you.
- On September 7, 2008 Fannie Mae and Freddie Mac were placed into conservatorship.
- On September 14, 2008 Merrill Lynch agreed to be acquired by Bank of America.
- On September 15 Lehman filed their bankruptcy petition.
- On September 16 AIG became a 79.9% subsidiary of the U.S. Treasury.
- Within 10 more days the Nation's largest thrift, WaMu was seized and five days later Wachovia was gobbled up and we were off to the races.
We only had to re-post the cartoon nine times in the next six months.
From Bloomberg:
Two Top Commodity Traders Disagree on Oil’s Path After Rout
July’s oil rout, the worst since 2008, is leaving two top commodity traders at odds over how long the slump will last.
Pierre Andurand, one of the most successful traders in the past year, told clients in a letter sent July 24 that oil prices won’t recover substantially until 2017. Andy Hall, one of the best-known oil investors, is increasingly adamant that the market has it wrong, writing in an Aug. 3 letter that a perceived glut in oil supply is overstated.
The two managers, among a select group who run hedge funds with heavy exposure to the industry, both profited last year as oil dropped into a bear market. When oil rebounded in the first half of this year, their views diverged, and now the two are completely at odds over whether there’s a glut in the supply of oil that will determine prices.
So far, Andurand’s been right. His main fund at Andurand Capital Management gained 3.5 percent in July, bringing his 2015 gains to 4.8 percent, according to a person familiar with the matter. Hall’s oil-focused commodities fund at Astenbeck Capital Management slumped 17 percent last month, Reuters reported.
A spokesman for Andurand declined to comment. Calls to Astenbeck weren’t immediately returned.
July Slump
Signs that oil was recovering from its collapse last year have vanished since late June. Oil dropped to the lowest level in more than four months on Thursday amid speculation that a global glut that drove prices into a bear market will be prolonged.
West Texas Intermediate crude dropped 1.1 percent Thursday to $44.66 a barrel at 3:18 p.m. in New York. It has fallen 25 percent since the end of June.
Hall, whose $100 million compensation while at Citigroup Inc. in 2009 ignited controversy over pay packages at bailed-out banks, wrote in his letter that while the last month was “brutal” for commodity investors, there’s no fundamental reason that oil shouldn’t rebound. An end to sanctions on Iran wouldn’t have an immediate impact on oil supply, he said, and demand for oil in the U.S. and China is rising.
“There is something of a disconnect between perception and reality,” Hall wrote in his letter, a copy of which was obtained by Bloomberg. He criticized estimates by the International Energy Agency that show a surplus in oil at 3.3 million barrels per day in the second quarter as “difficult to reconcile with what has actually been happening in the oil market.”
‘Oversupplied Market’
Hall said with pessimism in the oil market currently at “extreme levels,” it will take concrete evidence that low prices are having an impact on supply, before oil can stage a sustained recovery.
“We believe that is coming,” he wrote.Previously on the Andy Hall channel:
Andurand said in his letter that the decline in oil prices last year hasn’t pressured the industry enough to slow production and eliminate a glut of supply....MORE
Feb. 2015
Astenbeck Capital's Andrew Hall: Oil Is Going To $65 And The Surviving Shale Plays Will Do Just Fine
I think he's early but right.Former Oil Guru Andrew Hall Is In Cash
There are still 1100 oil rigs operating in the U.S. and they are now being directed to the lowest risk plays i.e. U.S. production won't start to decline until the third or possibly even the fourth quarter.
Probably more importantly the dollar is strong and any further appreciation could quickly knock 15-20% off the price of oil regardless of fundamentals.
On the demand side: in December and January China basically leased every tanker in the world to hoard the lower priced goo, now India is going to do the same albeit with less storage available.
Should they fill their tank farms and eliminate that source of demand we're set up for another dramatic decline.
Sept. 2014
Oil: Former Phibro Guru Andy Hall Bets Against Shale, Buys Long-dated Futures
$100 Million Oil Trader Andy Hall: Maybe He Wasn't As Good As Advertised
How Some of the Biggest Funds in Oil Trading Got Wrong-footed By the Widening Brent-WTI Spread
Phibro Superstar Andrew Hall’s Commodity Hedge Fund, Austenback Down 10% YTD
The Last Word On Oil Trader Andy Hall and Life On the Right Hand Side of the Distribution
Occidental buys Citi firm Phibro for $250 million (OXY)
