Here is a link to a hysterical video regarding the value of an advanced degree in the humanities.
Thrilled does not begin to describe how I feel seeing the message making its way out into Blogsphere.
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So... back to Oil and energy equities and the markets...
TPTB have clearly decided to smush the US$ in an effort to increase exports... clearly these nitwits don't read my blog... Oh, well... there are no macro solutions, only micro solutions...
My sense is that while the U.S. IS in grips of an ongoing and long lasting credit contraction, not all commodities will fall in line. Oil, me thinks, is at the head of that list.
The Energy SPDR, XLE, is back to where it was when Oil was $55 per barrel, and given the price of Oil is nearly $30, or nearly 60%, higher today... well, my bet is that these 2 have likely diverged as much as they are going to. The U.S. might be headed toward third world status... that does not mean you have to join in the effort. If Oil prices only remain here and head no higher, they probably harm credit expansion while also increasing the prices of energy equities... if they head much higher it most likely be due to a steepening in the decline in Oil imports, and that would be an unmitigated disaster for credit expansion.
If that happens, keep an eye on JNK, the Junk bond ETF. Junk has had an unbelievable rally and some smart folks think Junk's been blown into a bubble by our friends at the Fed... personally I am agnostic on that... BUT if you start to see JNK heading south I would be looking to get flat energy equities UNLESS Oil, the commodity, is doing well. (That was purposely ambiguous as I am not making a recommendation, only an observation and a method of confirmation... that may or may not work or be accurate.)
I am long the US$ and have been for a few days... when the index got down in the low 77's and only 3% of the market was bullish on the US$ I figured that was good enough for me... I THINK, not sure, just THINK that if the US$ catches a bid here it won't be too terrible for Oil, and if it sinks further Oil will take off the low $90's(?). Its a pretty good hedge. And yes, they could both go up together, and less likely they could both go down together... For you Gold Bugs... it wouldn't take much US$ appreciation to do some damage in that market place... trees, contrary to newsletter opinion, do NOT grow to the sky... as always, when I am wrong I am gone... or very hedged.
I am going to maintain, hedged and unhedged, positions in energy equities for the foreseeable future as I think the opportunity for some kind of energy shock by the end of 2012 to be very, very high. I don't want to miss it by being too cautious. That's not an investment for widows and orphans... and I reserve the right to change my flippin' mind...
So watch JNK, XLE, and the price of WTI along with the US$ Index.... should be interesting.