| Oil still falling -- 6/4/2008 |
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As we have said before, demand has to come down at some point. Oil hit around $135 and is now off almost 10% from it's highs. Very exciting, but way too early to call a reversal in trend. OPEC and other countries like Iran can easily manipulate the oil market by reducing production at anytime they want. Let's hope they do not. When will we see relief at the pump which will impact inflation months down the line? Oil has to hold lower for weeks to months, not a few days like we have now. It is also all over the news how oil inventories are coming down when it is expected they go up. They are also leaving out the news that oil companies are not unloading super-tankers off the coast for technical difficulties. (yeh right). Some good news for round 2 of the credit crisis also. A major bond fund manager said he was buying Lehman Bros debt and that the stock is way undervalued. The shares were also upgraded by Merrill Lynch after falling over 18% over the past week on rumors that they may need to raise capital. While customers could certainly start a run on the remaning 30 to 40 billion liquidity that Lehman has, the new Fed credit facility would likely prevent them from going down a Bear Stearns path. If that did happen, Lehman's stock would absolutely crater. While this is some good news, I would not say they are totally out of the woods yet. Something to watch.Get The Limit Order for $6.65/month with a 3 month membership. The Limit Order stock picks continue to outperform the market, Register for free and check it out. |
