Long BP, Short Obama

Long BP: because BP is currently trading below book value. As the Huffington Post put it yesterday, it is worth more dead than alive.
I consider this market valuation the result of a panic selling, a consequence of the media and Barack Obama's focus on BP as responsible for the oil spill.
And they might be partly right: it might be that BP is responsible for the mistakes that caused the spill. But the question is: how much will this cost to BP at maximum?
Considering that BP currently makes quarterly profits in the magnitude of $6 billions, they have plenty of room to "make it right".

I think there is currently a mob hysteria against BP that will have to calm down at some point. The hysteria might not have reached its climax yet: there could be a total boycott of BP gas stations, etc.
There could be a worsening of the oil spill, dozens, hundreds of law suits, etc.

But can we live in a world where hysteria goes on so far? If BP is brought down, there will be many negative consequences: will oil companies continue deep water drilling after the events of the last months? What will be the legal protection they will have? What will be the implications on the cost of the barrel of oils?


There were already several bad oil spills in the past, and the fact that we have a new one in deep water (which makes the fix so complicated) is the consequence of:
- the world addiction to oil,
- a depletion of oil sources in dry land and low water locations.

We want the oil, and BP was there to get it. Yes, they did a big mistake. But sooner or later somebody was going to make a mistake in one of the dozens or hundreds of deep water wells.
Obama should be careful not to go too far after BP because this fight might very well haunt him in the future.
There is a lot of hypocrisy in going after BP, and not blaming ourselves for wanting the oil, but not the spills that it might cause. We should know by now that oil spills are a part of this human activity.
Once people calm down on their witch hunt, they might look back in the current time and judge that Obama only played a role as a witch-hunt follower, rather than a wise leader.

If we truly want to protect the environment, I think we should acknowledge our addiction to oil and its risks and impacts on the planet. And we should acknowledge that we all have a responsibility in the oil spill, not just BP.

Long FP, XOM, GOOG, MSFT, RIMM, PGR, IBM

I like all those positions.

In average across those the current market PE ratio is about 12, which is very low considering the Fed Funds Rate is at 0.25%.

I consider these positions typical Warren Buffet plays: companies making consistently making profits, profits consistently growing, and low market valuation (PE about 10 to 15).

The only downside risk is really a 'Lehman' type event, perhaps in Europe with banks balance sheets, or sovereign debt issues.

Ideally one would have a hedge against such risk: PUT option on certain banks?
I have little hedge position right now: just PUT option on PCY, just in case the world markets tank.

World main economic blocks balance sheets (attempt)

Here is something I would like to complete...
It is an attempt to model the world's main economic blocks balance sheets.

By economic blocks, I mean:
- US/EU/JP/China/etc households
- US/EU/JP/China/etc corporations
- US/EU/JP/China/etc governments

The objective is to have the big picture on:
- who are the biggest economic actors? and how they compare?
- who is overleveraged? and potential consequences?
etc.


Here is my first draft.
I welcome any input, as I find it hard to get and verify some of the information.

Jim Cramer calls the housing bottom but forgets to mention Robert Toll is selling

Jim Cramer should have mentioned that Robert Toll is currently selling his shares of Toll Brothers.

Inestors beware.
Shame on Jim Cramer for this one.

Accounting made in USA - a cartoonist nailed it

source: http://immobilienblasen.blogspot.com/2009/04/emporer-has-no-clothes-but-who-dares-to.html
Thank you

Great interview with Dylan Ratigan

Great interview from Dylan Ratigan.

http://www.fedupusa.info/Dylan_Ratigan_Interview

President Obama, please listen to it.

(I think President Obama reads my blog)

KB Home short squeeze deja vu

the current rally could be a short squeeze, and it has the look and feel of the september 2008 rally...