I figure energy prices will make a big fall in 2012 with Natural gas leading the way. Anyone else agree? I bought Alcoa and am looking at tire and steel businesses. They use lots of energy. I sold BBT, I took 20% and happy.
Price of natural gas in europe is 5 times more expensive than usa. In Asia it's even higher - about 8 times. Demand for oil is increasing while supply is decreasing - I think we'll see higher oil prices this summer. Natural gas prices will turn around once natural gas prices drops to the marginal cost of gas production - then it will rebound and go back to the replacement cost of natural gas. Situation in natural gas is unique to America. We're flooded with it. If we can convert a substantial segment of the USA auto and truck fleet to natural gas, oil prices will drop but I think it's going to take several years to make a meaningful conversion.
If you think energy prices are going to tank, don't understand why you bought alcoa. Also it's is also certain that demand in the steel and tire industry would decrease should oil go south. Last time oil tanked aluminum, steel and tires got clobbered.
Think you should have kept some of your bbt position. Compare bbt pretax profit before bad loan provisioning and foreclosure expensure to other banks. Real eye opener. Their foreclosed property expense last qtr. was $348 million while their provision excluding cover loans was $223 million - $571 million in aggregate. Their normal bad loan costs per quarter should be roughly 70 bsp per year $180 million per quarter.