Let's estimate that for 2014, the net imports accounts for 25% of the oil consumed in the US. OPEC knows that this number is heading towards 0%.
If OPEC could drop the price to $50 and maintain this as a new reference standard, they could force many of the oil operations in the US to just shut down. This could then result in the net imports to rise to 50%.
For the Saudis, they would be happy with this number because 50% at $50/barrel would be the equivalent of 25% at $100/barrel
I found this info on the FXY site:
"JPMorgan Chase Bank, the depository for the trust, maintains a deposit account denominated in Japanese yen. Interest earned by the trust, if any, will accrue daily and will be used to pay trust expenses. Any excess interest will be distributed to shareholders monthly. If the trust’s expenses exceed interest earned, the trustee will withdraw Japanese yen held by the trust to pay the excess, thereby reducing the number of Japanese yen per share."
Since futures are not being used, you will not have the problems found in YCS.
In 2012, net imports accounted for 40% of the petroleum consumed in the United States.
In 2013, this number dropped to 33%.
The OPEC nations are accustomed to the good lifestyle and are not going to give it up without a fight.
The Saudis have a good chance of winning since their cost for extraction is only a few dollars per barrel.
In Atlantic City, the Pier shops at Caesars cost over 200 milllion to rebuild, just 6 years ago. It is a huge mall extending over the ocean. I am not sure if Caesars has any ownership interest in this property. This mall is on the verge of forclosure and was just sold for 2.8 million, less than 2% of what it cost to build. One would think that this upscale mall would be worth substantially more than what it was sold for. Four casinos have already closed in Atlantic City with the Taj Mahal scheduled to close next month. Should Caesars Atlantic City be forced to close their gambling operations, their real estate would have essentially negligible value.
With YCS at 86.60, I just bought a Jan 80/90 call spread for a debit of 5.72 as a test to see what is available. If it pulls back, I am buying some shorter term call or spreads.
I noticed that there was a 1:3 reverse split back in Oct 2011. Since YCS uses futures or options to achieve the 2X, there is always the problem of contango, slippage, and additional expenses for the ETF, tending to bias this to the downside. The 2X ETFs usually has such a warning and even recommends that these type of ETF should only be traded on a daily basis. An good example of this is UVXY. We will just have to keep a close eye on this trade and take profits when we can.
This recorded show is now on YouTube. Just enter "Coast To Coast AM - November 17, 2014" in the search window. He comes on at 14:00
He does raise a few good points about what could cause the financial implosion. What do you think?
For GLD, resistance is 115, formed by the bottom line of the descending triangle. A close above this level could negate the downtrend.
and how to prepare for it. If you miss it, the show will be uploaded to Youtube in a couple of days.
He claims that he had predicted the 2008 financial crisis.
Leading up to the IPO was exciting for him. However, he is probably not suited to be CEO and running the day to day affairs of the company. Perhaps they should be looking for a new CEO. How about Steve Ballmer? He is not doing anything now. (just kidding)
It looks like today's volume will be around 5X the normal volume. For such a low volume stock, he should realize that his comments would result in a 10% pop in share price. Hopefully, this is not a pump and dump.
What happens if stock and options trading is halted. The put options would no longer be trading. Do you think that the put options would then be cash settled by the options exchange?
Think about buying 1,000 of the Jan 2015, 0.50 puts. Wait for a slight rally to get them for around 0.25, $25,000. This would be a 50/50 bet. You risk 25k to win 25k. Chapter 11 will give them some hope of a possible turnaround. Do this only if you think the turnaround will not work out.