Con-tango

December 11, 2006
In Views
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Weathering global investments

John Rutledge finds investing akin to… meteorology, and I wholeheartedly agree with him, this excellent analogy allows us to portray a global backdrop of meaningful events and their interactions, which is quite helpful in the discovery process of investment opportunities.

This is the ongoing weathermap of global events as he sees them; any difference in pressure or temperature, or any change in the conditions, may allow us to ride a profitable arbitrage storm:

John Rutledge Investment Weathermap

As I’ve mentioned in previous posts, I feel one should still be long commodities and assets in general… a storm created by the additional injection of liquidity into global markets arising from the unavoidable slowdown of the US economy… too much paper following the same assets.

December 5, 2006
In Economy, Views
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A 2007 recession?

Paul Krugman

To start, I
urge you to visit Mark Thoma’s blog to take note of the comments sparked by
Paul Krugman’s… 2007 recession prediction in his New York Times
article of 1 December 2006. As a matter of fact, I
strongly recommend reading
all his early December posts, they all touch quite unsettling themes:
the USD
demise ,
the folly
of the war in Iraq and
the wall
to Latin American relations.

September 29, 2006
In Views
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OPEC cuts back

According to the FT report
from Carola Hoyos, dated 29 September 2006, two of the OPEC members decided to
make public their cutbacks in production, exasperating the rest of the organization’s
associates.

September 27, 2006
In Lessons, Methods
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…Going to the movies

NYMEX_CL_X06, Chuck Le Beau's Giant Footprints

This is a snap shot of Chuck LeBeau’s latest little film; and it’s related to the recent drop in crude prices. Unfortunately for Amaranth, they did not take to heart this basic lesson in trading…

Click here to watch this nice video.

Happy trading.

September 22, 2006
In Economy, Views
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…A huge haircut

Natural Gas NG0611 Source: Prophet
(click to enlarge)

According to Bloomberg’s September 21 piece,
by Katherine Burton and Justin Baer, Amaranth Advisors LLC hedge fund
lost $6 billion or 65% this month on a natural gas long bet.