Saudi Arabia Day of Rage; Japan Quake

Day of Rage in Saudi Arabia should prove to be interesting.  So far it is very calm, however, with a major portion of US Oil coming from the country---this could spook the market quickly if it gets in gear.


The top five sources of US crude oil imports for December were Canada (2,064 thousand barrels per day), Mexico (1,223 thousand barrels per day), Saudi Arabia (1,076 thousand barrels per day), Nigeria (1,024 thousand barrels per day), and Venezuela (825 thousand barrels per day).

Also, keep an eye toward Japan.  With one of the largest quakes in the last 100 years worldwide, it will take weeks, if not months, to access the true infrastructure damage.  BOJ has indicated that it will continue to pump money into the economy; however, with interest rate at 0% (and they have been for a long while) how do you inspire growth and lending?  What can the pent-up demand be for yen denominated lending?

Bottom line---VERY LITTLE UPSIDE TO ANYTHING!

Todd Hunnicutt

Oil Effect....

With oil up another $1.00 plus today, what industries stand to profit?  The short answer is NONE.  In fact, the oil spike is likely to kill the "recovery."  Basically, everything will cost more due to the increase cost of transportation.

If there are any short term winners, financials temporarily benefit due to increase in bond prices.  But, on the banking side, real estate assets likely to continue to decline...ultimately, weaker balance sheets.

Economy on Slippery Oil

The stock market is off over 200 points in two days, and the S&P is off almost 2.5% since February 18th.  This is the death nail to the "recovery" which was at best paid for with "funny money" (the  Gold and Silver market have been shouting this for the last several months).

Quick question, what sector in the economy can recover in the face of increasing oil prices?

Back with the answer tomorrow!

Todd Hunnicutt

The Brass Verdict

Just finished this book.  It is a great read and if your looking for a book with one  or two twist....you might just enjoy it as well.