The Rude Awakening
Laguna Beach, California
Tuesday, April 24, 2007 ------------------------------ - The effects of unlimited shorting on the market,
- Monitoring oilfields in a "sorta-casual" kind of way,
- Capturing floating IQ points, government-backed gold and plenty more…
------------------------------ Joel Bowman, reporting from Laguna Beach, California… Below you'll find a couple of emails about oil and a couple of emails about shorting…but no emails about shorting oil…or about oil shortage. Today's letters to the editor are in response to the following three columns: Oil of L.A., Part I - By Byron King
Oil of L.A., Part II - By Eric J. Fry
Don't Sell Short Selling Short - By Gary Galles
As always, send me your own thoughts on anything Rude and/or Awakening at
aussiejoel@the-rude-awakening.com Speaking of awakening, remember that you'll soon receive the inaugural edition of the 5 Min. Forecast, Addison Wiggin's quick wrap of the day's events…in, you guessed it, 5 minutes. As I mentioned in yesterday's Rude Awakening, Addison has promised to include some juicy tidbits from his recent interview with Warren Buffet along with the regular, bullet style updates and insights. It will arrive in your inbox very soon, so join me in giving it a quick read when it does. And now, your mail… -------------------------------------- Dear Rude,, The critics of the shorting thing seem to have some points. Since you have ignited the debate, it might be interesting to see how it would resolve if your team and your readers could come up with a method to correct the problems that improper shorting creates. There has to be a balance point out there somewhere. As it turns out, unlimited shorting also had the same effect on silver in the commodity market. The Feds stood by and allowed unlimited shorting no matter what. It got even more interesting when buyers actually wanted to take possession of real silver for industrial purposes. It was getting hard to find. But the short sellers were allowed an unlimited hand and it didn't seem to matter if the stuff was available or not. So, Aussman, where is that ideal balance point? There should be one out there somewhere. Since the brokers, dealers, hedge funds, etc… insiders who make and break markets…seem to have an unfair advantage, how do we even it out again? There needs to be a balance for the rest of the participants in the markets…pro/con hype notwithstanding. Let's turn your columns into a forum for collective answers that really work. There are a lot of IQ points floating around out there and some of them read and respond to your columns. Who knows… good working answers might be the result.
G. Eriksen
Rude Reader ------ 100% Profits Pledge ----- "If at least 12 of my recommendations don't gain 100% or more in the first year, we'll
refund your entire subscription cost." Steve Sarnoff, Options Hotline editor. When my publisher told me they're pledging to give you the opportunity for at least 12 100% winners this year or your money back, I said they were nuts. But then I looked back at my track record… and the tables turned. Check it out for yourself right here. ----------------------------- Hi Byron, Toss in Transocean into the mix of drillers as well. Their services will be increasingly needed. They must be sitting back in Texas just waiting for existing contracts to expire so they can start charging ever increasing rates. One story which has not hit the radar screen in the USA so far seems to be Molybdenum. Blue Pearl Mining up here has been on a great upward spiral. They mine, and produce Moly exclusively. Regards, Larry C. ------------------------ Dear Rude Boys: The fact that "shorting" is becoming an accepted and acceptable part of investing and trading is made evident by the introduction of the Long and Short ETF's sponsored by ProShares in the U.S.A., and HorizonBetaPro in Canada. These Exchange Trader Funds allow an investor to track all the major indexes, and in the case of ProShares, industry sectors, either long or short. Some of these ETF' s allow you to trade on virtual margin, with the gains and losses equalling double the gains or loss of the underlying index. Since you "buy" these ETFs, the (logically false) moral conundrum of the "shorting naked" issue is neatly solved. And, if you are correct in your appreciation of the market's future direction, then "good things" will always happen. Those who oppose the use of shorts are equivalent to those who would want a harvest without rain. Best they keep their feet dry by keeping out of the market's muddy slogging. Better they just buy gold, and bury it in a hole in the back forty (but don't let that darn Mogumbo see you doing it). B. Lyons
Regina ------------------------------------------ Dear Rude, Greetings!
I've watched oilfield operations in my own sorta-casual manner since back around 1950. There is a vast difference, today, in the way it's done insofar as environmental impact.
No more open slush pits of drilling mud; it's all self-contained. There's very little oil spray and garbage around a drill site. Sure, it's noisy for the length of time to drill the well, but once it's set up for the pump, that's about all that's left in view. And the electric motor and pump system isn't noisy.
The last gas well on my own family's little ranch played out several years ago. It's capped. Other than the capped pipe sticking out of the ground some two or three feet, an outsider would never know there had ever been a well there. Same for a couple of other wells in another pasture; you'd never know they'd been there.
But people read about the history of Venice, and think that nothing's changed…
Best regards,
A. Eatman
Texas ---------------------------------- Dear Rude, We have owned our place in Venice Beach since 1984. At many community meetings in the Oakwood area, longtime residents would get up and say that, "the new developers were paying high prices for the housing so they could slant drill for oil under everyone's gardens," and we would all laugh. The newbies, that is, would laugh. I always said, "When we get letters from Chevron stating that they relinquished their rights to any oil under our properties, then and only then, would we know for sure the oil was gone, or at least not financially viable to drill." In 1990 we received such a letter. My question is, how many dinosaurs have expired in that timeframe to create additional oil, or is this just another plan for eminent domain (per The Riches)? Love being Rudely Awakened every morning. When the crash comes, what better place to be stuck than the beach of LA? A Happy Venetian, Carolyn Ward ----- Government-Guaranteed Gold ----- From Hulbert's #1 Ranked Advisory Letter of the Last 5 Years, The Closest Thing to No-risk Wealth on the Market Today… "Government-Guaranteed Gold" This new U.S. government-backed guarantee lets you own gold with no risk…but with 100% of the gains should gold prices take off. Here's the catch… You must act on this by May 15, 2007… or you risk missing the official deadline and getting shut out of this forever…Read on here.. | 
