Skip to main content

The Paulie & Benny Show - Fight Oil With Strong Dollar?

How many people actually make critical decisions in Washington? Definitely not Bush. Why aren't there more pressure on the CFTC to clamp down on the position limits issue? If you read between the lines, Paulson does not think speculators are to be blamed for the spike in oil price. Bernanke has been unusually quiet on the matter. Bush has been quiet because nobody has told him what to say on that matter.

Its significant that Paulson holds that view because that will point towards the mediation prescribed by Paulson and Bernanke. If it was me, you all know what I would have prescribed already.

Hence, the Paulie & Benny Show is prescribing the stronger dollar as the medication for curb oil prices.The US dollar just cnotched the biggest weekly gain against the Euro since 2005 and the biggest weekly rise against the Japanese yen since December 2004. Bernanke’s speech on Tuesday prompted the strong turnaround in USD sentiment; he said that US economic risks have diminished and he’s paying attention to the weak dollar. Increasingly over the past few months, a weaker dollar seems to be negatively correlated with oil prices although whether a causal relationship exists between these two is another issue altogether.

What we do know is that Paulie & Benny would not do things halfway. If they are prescribing a stronger USD to counter oil price, then believe you me that it will be a sustained and prolonged strategy for more than a few weeks.

I hope its successful. If not, I hope Paulson would kindly remember how Nelson Hunt tried to corner the silver markets in the past by hoarding futures. Hence speculators can be akin to hoarders, especially when they act as a group, and when this group is overwhelmingly stronger than other genuine players. Paulson may think that asking CFTC to change rules is tantamount to market intervention, well, remember that the LME had to step in and changed the rules to bust the silver cornering attempt by Nelson Bunker Hunt.

To me, thats where oil price is headed, for its Alamo. Hence it is infinitely better for all to "tweak the rules" at US$130 than to tweak it at US$180. Surely if oil were to go to US$180 this year that Paulson would maybe admit that speculators are responsible. I do think Paulson is still beholden to the big investment firms in New York rather than do the right thing for the markets. I do think that Paulson may be buying time for the big investment banks to neutralise their positions before asking CFTC to act to lower position limits.

Choice A or B, Paulie & Benny are acting to strike down oil price. The more successful they are, the better it is for equities.

photo: Carmen Soo


Popular posts from this blog

My Master, A National Treasure

REPOST:  Its been more than two years since I posted on my sifu. This is probably the most significant posting I had done thus far that does not involve business or politics. My circle of close friends and business colleagues have benefited significantly from his treatment.

My Master, Dr. Law Chin Han (from my iPhone)

Where shall I start? OK, just based on real life experiences of those who are close to me. The entire Tong family (Bukit Kiara Properties) absolutely swear that he is the master of masters when it comes to acupuncture (and dentistry as well). To me, you can probably find many great dentists, but to find a real Master in acupuncture, thats a whole different ballgame.

I am not big aficionado of Chinese medicine or acupuncture initially. I guess you have to go through the whole shebang to appreciate the real life changing effects from a master.

My business partner and very close friend went to him after 15 years of persistent gout problem, he will get his heavy attacks at least…

PUC - An Assessment

PUC has tried to reinvent itself following the untimely passing of its founder last year. His younger brother, who was highly successful in his own right, was running Pictureworks in a number of countries in Asia.

The Shares Price Rise & Possible Catalysts

Share price has broken its all time high comfortably. The rise has been steady and not at all volatile, accompanied by steady volume, which would indicate longer term investors and some funds already accumulating nd not selling back to the market.

Potential Catalyst #1

The just launched Presto app. Tried it and went to the briefing. Its a game changer for PUC for sure. They have already indicated that the e-wallet will be launched only in 1Q2018. Now what is Presto, why Presto. Its very much like Lazada or eBay or Alibaba. Lazada is a platform for retailers to sell, full stop. eBay is more for the personal one man operations. Alibaba is more for wholesalers and distributors.

Presto links retailers/f&b/services originators with en…

How Long Will The Bull Lasts For Malaysia

Are we in a bull run? Of course we are. Not to labour the point but I highlighted the start of the bull run back in January this year... and got a lot of naysayers but never mind:

p/s: needless to say, this is Jing Tian ... beautiful face and a certain kind of freshness in her looks and acting career thus far

I would like to extend my prediction that the bull run for Bursa stocks should continue to run well till the end of the year. What we are seeing for the past 3 weeks was a general lull where volume suddenly shrunk but the general trend is still intact. My reasons for saying so:

a) the overall equity markets globally will be supported by a benign recovery complemented by a timid approach to raising rates by most central banks

b) thanks to a drastic bear run for most commodities, and to a lesser extent some oil & gas players, the undertone for "cost of materials" have been weak and has pr…