Thursday, March 10, 2005


I missed the name of the JP Morgan representative who made a great point on closing bell today. The demand for oil normally grows in line with the growth in world wide GDP. Recently, it has grown at twice the GDP. This is an indication of hoarding. Folks who believe the price is going to $80 per barrel are storing extra supplies now.

World economic growth is so strong that it will take time for supply to catch demand. However, we are not having shortages like those in the 1970's. In those days, fireplaces were lit and men chopped a lot of wood. Women crocheted afghans and set thermostates at very uncomfortable levels. Some folks even unplugged refrigerators. Service stations opened sporadically and lines formed for miles when a tanker truck arrived.

The good news is that the price will drop extra quickly when the hoards are finally used. Hoarders tire quickly of tying up cash in excess inventory if supplies are plentiful and the price is not rising.

The bond re-financing of the past few days went well. Yields dropped today after the ten years were sold. The re-financing highlighted the world wide liquidity. Companies and nations are sitting on piles of dollars. Long rates are not likely to go very high as long as there is so much cash around. Capital spending is growing quickly so pressure will be on rates but profits of big American companies are also growing quickly.

INTC--WOW! Semi-conductor companies are forecasting selling products and making profits. An upgrade of RFMD today sent the stock soaring. INTC raised estimates after the close today. The stock is up better than 2% in after market trading. The NAS 100 has under-performed all year but is showing signs of life. QQQQ is trading up ten cents in after market trading and I noticed it down 37 cents at one point today.

BIG BULL BOOM BUBBLE BUST is under-way. Invest early so you can be out before the BUST!