Dubai Friday

Special shortened format today due to the holiday. Hope you guys had a great one; market not in the best of moods today. I'll be out with the family most of the morning and I don't see a lot of point in playing on this half day of trading but will check in once or twice.

Market Sentiment Watch: Dubai Debacle Meets Black Friday. Look, I only need six months of no payments and I'll be fine, really, I promise. It's $59 billion. It's a 6 month standstill, not a default. And it's not exactly like the world didn't see problems here with stories going back to early this year about construction workers abandoning their Mercedes at the airport as work dried up. S&P has been downgrading this debt repeatedly since March. In the global scheme of things Dubai World's troubles alone are not that big. Whether or not there are "other Dubai Worlds" waiting in the wings is the fear at present. Whether or not Dubai causes a domino effect amongst lenders with exposure who might have already been weak is another. 

  • Asia and Europe were floored by the news,
  • U.S. Futures overnight:
    • DJIA: were down 250 at the low, now off 200.
    • S&P: were down 40 at the low, now off 26.
  • Crude has been off as much as $5 or 6% since Wednesday's close.

    • If you thought OPEC was going to risk a quota increase at its December meeting think again. That was a long shot before, now its just not going to happen.
    • Crude has strong support in the $70 to $73 range.
  • Gold retreated from a record high as of Wednesday, was off as much as $42 overnight, and is currently off $26 as I type this as investors buy, of all things, the dollar.
  • Dollar - The dollar index was at 75.55, up a percent, before backing off that level earlier this morning and faces resistance at 76, 77, 78. Meanwhile, nothing has changed to suggest that the greenback is going to be getting support from the U.S. government any time soon. There are however indications some foreign central banks may intervene to weaken their own currencies.
  • Honestly, unless more financial shoes drop in the near term, I don't expect the weakness to be long lasting. If the bulls are able to fight off this weakness in relatively short order the shorts had better watch their backs.
  • Finally, there's Black Friday ... jury is still out on that; online results look strong and early looks at sidewalk crowds look large but no telling yet if those folks will really open their credit constrained wallets.
  • Nutshell: Weak, ugly, open, probably a higher close and new highs still likely for the markets prior to year end, as nothings really changed.


Commodities  & Inventories Watch:

Crude oil rallied $1.94 on Wednesday to close at $77.96 after the EIA reported a pretty neutral tilted toward bullish inventory report (see below). Yesterday, as U.S. investors stuffed themselves silly, the dollar rallied on the Dubai news and crude gave back most of the gains ending off $1.73 at $76.23. This morning crude is trading at $74.15.

Quick EIA Inventory Summary

ZComments: Crude stocks improved vs year ago levels as a rally in imports was partially offset by a bump in refinery capacity utilization. Demand for gasoline and distillates ticked up with gasoline running at better than average levels but diesel still skimming the bottom of the historical range for this time of year.

Natural gas saw one of its strongest rallies in recent memory, ending Wednesday up $0.40 (+7%) at $5.16 on Wednesday. Yesterday, while the U.S. equity markets were closed, gas ended up a penny. This morning gas is trading off a few pennies and has been occasionally green. 

Quick Storage Review: The EIA reported an injection of 2 Bcf vs the Street's 8 Bcf and my + or - 5 Bcf estimate. Gas traded higher before the report on a cold weather forecast and higher after based on the knowledge that we got a smaller than expected injection AND that it would be the last one of the season.


ZComment: For gas prices to remain in the $4.75 to $5.50 range we need cold, sustained cold. The current forecast looks promising. But the next big thing for natural gas sentiment arrives on Monday with the release of the EIA's 914 data. Note that above I've included a couple of new charts showing where storage is now and where it would go to by the end of the withdrawal season under historic withdrawal scenarios from the past decade.

Odds & Ends:

Analyst Watch:

  • Zip.


63 Responses to “Dubai Friday”

  1. 1
    jiveyjr Says:

    thx, for getting up early and give us a take on this Dubai fiaco…very well done

  2. 2
    Wyoming Says:


  3. 3
    jiveyjr Says:

    thx Wyoming…I started lightening up a bit last week and am going to trim further today…

  4. 4
    PackMan Says:

    Well, I and others have been saying for a while that it will be a small door that everyone tries to exit thru at once, when the rush to the exit starts.

    And today the exit door will be even smaller than normal.

    Should be interesting …

  5. 5
    jiveyjr Says:

    one of my hedge fund buddies Bloomberg header reads “everyone is a fully invested bear”….all it takes is a catlayst to change the mojo; not sure this will be it but who really knows

  6. 6
    1520sbroad Says:

    i think today will be a stop order clear out and then monday will likely tell us more about the general state of affairs.

  7. 7
    zman Says:

    Lot of stopped clock bears touting how right they have been with this news.

    1) I don’t think this news stops the run and in fact may drive money from emerging markets back to some sectors of the U.S., 2) Europe was down hard yesterday and is rebounding today (even financial indexes that contain banks with direct exposure to the Dubai loans), so it’s the U.S.’s turn for a slide today, 3) Swings SHOULD be big today, given the light volumes associated with holiday markets, 4) the opens were harsh but there is already buying from well off the lows, 5) the S&P is still well above it’s 50 day average and doesn’t look ready to challenge that, and 6) I stick with my opening statement about further highs in the near term.

    Just doing a fly by…

  8. 8
    BirdsofpreyRcool Says:

    HeadTrader not particularly fazed by the mrkt… his comments —

    there’s talk of the carry trade unwinding, repricing of all asset classes, blah, blah, blah….

    the dollar index is ALL THE WAY back to where is was on Monday [emphasis his]

  9. 9
    BirdsofpreyRcool Says:

    The Investment Grade CDS index is about 6 bps wider at 108 now.

  10. 10
    BirdsofpreyRcool Says:

    The VP of Investor Relations at EXXI was busy buying stock on Tues and Wed. Paid an avg price of $2.41 for 30,000 shares on Wed. Just FYI.

  11. 11
    zman Says:

    Ok really, I’m not working today but BOP, re 8, would have saved me a lot of time last night if I’d just gone with blah, blah, blah for the body of the post, lol. Send him my version and tell him thanks for me.

  12. 12
    BirdsofpreyRcool Says:

    z — you know traders… they don’t use any more words than they have to!

  13. 13
    BirdsofpreyRcool Says:

    z — and i liked your comments this morning…

    thing is, if the mrkt is crapping out b/c some palm-tree shaped islands in the middle of the Persian Gulf defaulted on highrises and indoor ski jumps… well, it’s not like you couldn’t see this coming. Even Moody’s has been steadily stepping down the ratings of Dubai for the last 11 months.

    personally, if someone wants to sell their EXXI or KOG or HK this morning on news that Dubai wants to defer interest payments… i’ll take the other side of that trade.

  14. 14
    BirdsofpreyRcool Says:


    Markets may be overreacting to Dubai World’s shock debt standstill. European and Asian stock and bond markets have fallen while safe-haven currencies such as the dollar, euro and yen are up. That’s hardly surprising. The Dubai government sprang this news on the eve of a four-day holiday. For Dubai to now claim it had anticipated the market reaction to its “sensible business decision” is preposterous. Dubai stands accused of irresponsibility, incompetence and bad faith. Few will trust now anything it says.

    Even so, there’s a good chance that Dubai’s problems will prove a local issue. The sums involved are small in the global scheme of things. The emirate’s total debt outstanding is reckoned to be $80 billion, huge in the context of Dubai’s $75 billion GDP, but not enough on its own to threaten the financial system since any actual losses would be a fraction of the total. The only Western bank whose exposure looks material relative to its overall loan book is Standard Chartered, but it has a robust capital position to absorb losses. And while oil-rich neighbor Abu Dhabi has refused to support Dubai World, there’s no evidence that Abu Dhabi will pull the plug on Dubai entirely.

    Of course, it is possible Dubai’s woes could trigger a new global credit crunch if enough investors flee to safe havens, draining liquidity from other vulnerable markets. It doesn’t help that this shock was delivered so close to the end of an unexpectedly strong year in the credit markets, when many investors are looking to lock in profits. If anything, this may bring forward the usual seasonal slowdown in the markets. At this stage, however, the risk of contagion is small. Most at risk would be neighboring Middle Eastern markets where there has been no shortage of similarly reckless spending. Dubai’s neighbors are also among its biggest creditors. But unlike Dubai, the other Gulf states have vast oil wealth, making it unlikely they will lose access to funding.

    But so long as central banks continue to pump extraordinary liquidity into the system, the markets should be able to accommodate local shocks. With interest rates low and signs of recovery around the world, that liquidity will continue to find its way into risky assets. The real risk will come in 2010, as the liquidity starts to be withdrawn and the full-scale of government deficit problems become apparent. At that point, risk premia may start to rise, leading to higher interest rates and the dreaded “double dip”, forcing a new wave of losses. Dubai has provided a necessary wake-up call to frothy markets currently pricing in a robust recovery. But the greater systemic risks are likely to lie elsewhere.

    Write to Simon Nixon at simon.nixon@wsj.com

  15. 15
    zman Says:

    Re 12 – hear ya

  16. 16
    zman Says:

    Re 13 – really hear ya

  17. 17
    VTZ Says:

    I would comment on this Dubai fiasco and the impact on the dollar and gold but it’s so ridiculous to talk about an anti-currency event and the corresponding “flight to safety” in the USD of all places that I’m not even going to entertain it.

    All I can say is that gold got it’s ~50 dollar pullback Nicky was looking for on a BS headline and that should satisfy lots of people. This whole event is an indicator that the gold rally is good and strong because it is not being perceived as a safe asset yet.

    Instead asset managers are running from currency to currency in circles due to the competitive devaluation that’s going on.

    Also funny is that I think it was Faber who had the gall to talk about other defaults that could come such Japan and some of the other Baltic states due to the size of their debt. *cough* US *cough*

  18. 18
    BirdsofpreyRcool Says:

    VTZ — along those lines…

    Some Thoughts on Dubai
    By Scott Rothbort
    RealMoney Silver Contributor
    11/27/2009 10:22 AM EST

    I just can’t seem to get a day off. As Dubai is the subject of the day, here are my thoughts.

    First, be forewarned that the 1% Rule is not operative on a shortened trade day.

    Second, I believe this is going to be handled internally by the United Arab Emirates and other closely aligned oil-rich Arab nations.

    Third, lack of follow-through in European markets — which are big Arab banking centers — appears to indicate that we have either: i) a one-day downside event or ii) the overreaction was exacerbated by a U.S. holiday. I would note that the German DAX and UKs FTSE were up by 0.6% and the French CAC40 (CAC) was rising 1% as I write.

    Fourth, the VIX was overbought right on the open. It went from a reasonable level to elevated in a heartbeat. This is simply the action of sloppy hedge funds, most of which don’t understand volatility. The VDEV will barely move on today’s action.

    Fifth, no matter when a non-U.S. market event occurs, the entire world still rushes to buy the U.S. dollar and our government securities. This is the huge flaw in the thesis that the rest of the world is concerned about the U.S. debt and dollar.

  19. 19
    VTZ Says:

    BOP – It just proves that the US treasury (and as a result the USD) is the biggest bubble of all.

    I can rest assured that the rest of the world is concerned about the US debt and dollar no matter what the CNBC and Realmoney hacks have to say about it.

  20. 20
    BirdsofpreyRcool Says:

    VTZ — agreed on the US debt = bubble. Question is, how big will they blow it… and how will it end. Will they deflate it? Or will it blow up in our faces (like the two bubbles that preceded it, tech stocks, housing prices…)

    US Govt Bond Debt is the last bubble this country has to blow. If we use US debt to build (invest) in a sustainable economy, then it is worth inflating the balance sheet for a while. If debt is used to make transfer payments for consumption and wasteful spending… well, it’s not going to have a happy ending.

  21. 21
    VTZ Says:

    Well that USD “strength” was shortlived… 75.50 to almost 74.90 in short order.

  22. 22
    VTZ Says:

    The US debt bubble will blow as soon as they stop monetizing debt (which they can’t because other countries aren’t going to finance them forever and because they fear deflation the most. At least in Japan most of the govt debt is held within the country). As a result the US will get more devalued/inflated which is why the US dollar will continue it’s fall until the bubble pops.

    Both ways is not safe for the dollar, there is no way out and this will not end well.

    Trust me that other countries don’t want to own paper that’s paying record low %ages in a currency that’s being devalued massively and systemically.

  23. 23
    VTZ Says:

    One path ends in default, the other has chronic and systemic devaluation of the $

  24. 24
    BirdsofpreyRcool Says:

    Wow. Dow was down over 230 points near the open… back to only down 93 now. Light action, big swinging day.

  25. 25
    BirdsofpreyRcool Says:

    One path inflicts permanent and devastating damage. The other peters out over time, and can reverse (think value of UK pound under Thatcher). I recall when you could get almos 10 francs to the US dollar…

    things can change… if you don’t blow them up first.

  26. 26
    BirdsofpreyRcool Says:

    IG CDS index only about 2 bps wider than wednesday’s close now… the FEAR TRADE is petering out. For now.

    IG 105.25

  27. 27
    VTZ Says:

    RE 25 – Well then we agree that the USD will continue to be chronically devalued for the next decade and nobody should be holding the bonds.

    The alternative to bonds paying next to zero and losing value due to currency losses are gold that is paying zero but appreciating.

  28. 28
    kiaora Says:

    VTZ Are you lagging into more gold positions today of just letting the dust settle?

  29. 29
    BirdsofpreyRcool Says:

    The US consumer seems to be addicted to spending. The US govt administration seems to be addicted to redistributing wealth, taking from the productive and giving to the nonproductive. The world is the Enabler in all this. As long as interest rates on US govt debt stays low, we are living in a Crack Neighborhood.

    Things will change, one way or the other.

  30. 30
    VTZ Says:

    Letting my position sit for today only because I added to my equities yesterday (because I buy on in CADs on the TSX) and they have held up nicely. Take for example SLW which is up 1% today on the TSX (down a bunch on the NYSE because it was closed yesterday).

  31. 31
    zman Says:

    Oil off $2 so it’s recovered about $3 from the lows.

    NG flat, to slightly green from down $0.20 there. Good to see it hang in pre EIA on Monday. Will be proactive on that number either way.

  32. 32
    VTZ Says:

    I would say that NG hung in there well today all things considered.

  33. 33
    Dman Says:

    My 2 cents: the flight to “safety” in the “dollar” just shows that not everyone gets it yet. Gold & other commodities still the place to be. Sugar & corn up today, wheat barely down. People still want food, even if the Dubai bizarro-buildings never get finished:


    And BTW, I obviously never studied my gulf micro-states carefully enough, but now I gather that Dubai was building all that stuff and they *don’t* have oil wealth behind them! Wow.

  34. 34
    VTZ Says:

    I just read that Dubai debt was trading above par 100% two days ago and fell to 40% today.

  35. 35
    zman Says:

    NG closed up 3 cents at $5.20
    Crude down $1.91 at $76.05 … not too shabby. Monday will be interesting. I’ll have the wrap out sometime tomorrow.

    Best thoughts to Tiger Woods hurt in car crash. Be safe folks.

  36. 36
    PackMan Says:

    18 — BOP — Scott is a friend of mine (really) and makes some obvious points, but Real Money will hire almost anyone … enuf said.

  37. 37
    PackMan Says:

    6. Or the real reaction will be when everyone realizes that Black Friday was a bomb.

  38. 38
    PackMan Says:

    20. Look around … what do you think ? The answer is obvious, isn’t it, and it is not good.

  39. 39
    PackMan Says:


    re: the strong US consumer:

    I hate to be a downer during the holidays — Deck The Halls and all that — but by cutting back, Americans are behaving like the rational, mature, thoughtful beings we always hoped we’d become.

    And cutting back seems to be exactly what people plan on doing.

    Rutgers University put out one of many surveys that show consumers plan to spend a lot less this Christmas season.

    A scientific survey of 653 folks, with a sampling error of just plus-or-minus 4 percentage points, showed that 65 percent of those asked said they would spend less for the holidays this year than in 2008.

    And last year, as you’ll recall, was no great shakes.

    Only 9 percent will be spending more, and 24 percent about the same. Two percent are non-spenders.

    There’s no secret as to why: Americans say they already have been spending less over the past few months (59 percent) because they are worried about the economy.

    Nearly as many people think the US economy has suffered a “fundamental and lasting change” as think there’s been a “temporary downturn.”

    So, get off consumers’ damned backs. They’ll start spending money wastefully when they feel like it.

  40. 40
    PackMan Says:

    Those 9 pct better be spending quite a lot to make up for everyone else !

    I spent $10.88 cents today on Black Friday, so I am not in the 9% (but made a lot more trading !).

  41. 41
    PackMan Says:

    re: Global Warming / Cap & Tax fraud being perpetrated on us:

    The CRU scandal has already ensnared Britain’s leading climate “scientist” Phil Jones (whom one principled leftie says has only “a few days left in which to make an honourable exit”) and his American counterpart Michael Mann (as in “Mann-made global warming”).

    Given that these two men and their respective institutions are the leading warm-mongers on the planet, and the guys who dominate the IPCC, Copenhagen et al, it would be most unlikely if the widespread data-raping were confined only to the United Kingdom and the United States. Here’s an interesting snippet from my colleagues at Investigate magazine in New Zealand re their National Institute of Water and Atmospheric Research:

    NIWA’s David Wratt has told Investigate magazine this afternoon his organization denies faking temperature data and he claims NIWA has a good explanation for adjusting the temperature data upward. Wratt says NIWA is drafting a media response for release later this afternoon which will explain why they altered the raw data.

    At least they only “altered” the data, unlike the CRU, which managed to lose it.

    Upon examination of said “raw data”, it seems that the country’s temperature increased 0.06° over a century – ie, nada. But by the time Dr James Salinger (a big cheese at NIWA, the CRU and the IPCC), had “adjusted” the data New Zealand was showing an increase of 0.92° – ie, some 15 times greater than the raw data showed. Why?

    It might be that “climate change” is an organized criminal conspiracy to defraud the entire developed world. Or there might be a “good explanation”. I’d be interested to hear it. Fortunately for NIWA et al, among the massed ranks of “environmental correspondents”, plus ça climate change, plus c’est la même chose.

  42. 42
    zman Says:

    re 37 … Early Black Friday result story, no indication it was a bomb



    re 40, and I bought the wife a Volvo C30 so I more than made up for you Pack, lol.

  43. 43
    zman Says:

    U.S. banks less exposed to Dubai than European rivals


  44. 44
    zman Says:

    another “encouraging signs” for Black Friday story:


  45. 45
    zman Says:

    From Accuweather – mentions Bastardi’s December comments:

    A storm rolling in from the Pacific Coast will bring needed rain to the Deserts, but could also bring snow to some unusual places in Texas, instead of a severe weather threat.

    Several inches of snow will fall on the traditional areas of northern New Mexico and southern Colorado Sunday.

    Snow or a mixture of snow and rain are forecast for Pueblo, Colorado Springs and Santa Fe.

    Expect stretches of wet highway along Interstates 40. Portions of interstates 25 and 70 could become snow-covered.

    While the storm now appears to be much less of a severe thunderstorm threat for coastal Texas and Louisiana Sunday night and Monday, the consequence will be a cold rain and flooding problems.

    Flooding in poor drainage areas is possible along the Texas coast into Louisiana Monday, resulting in slow travel along I-10.

    The storm could bring the most significant rain to the deserts of Arizona and New Mexico since September.

    While drenching rain and much-needed will fall in some of the Deserts, “snow” may catch some people by surprise in Texas.

    Expert Senior Meteorologist Dan Kottlowski feels accumulating snow may spread from the Guadalupe Mountains to San Angelo and Del Rio Monday into Tuesday. Guadalupe Pass along I-10 could be affected.

    AccuWeather.com Long Range Expert, Joe Bastardi feels this could be a cold and stormy month for much of the southern U.S.

    Bastardi added that this combination could mean additional snow and wintry precipitation events for parts of the interior South this winter.

  46. 46
    zman Says:

    Arctic air finally moving south:


  47. 47
    BirdsofpreyRcool Says:

    I couldn’t ask for a better Christmas present, than to expose the sham “science” behind Man-Made Global Warming (and the “scientists” who profit from it). Ho, Ho, HO!!! 🙂

  48. 48
    BirdsofpreyRcool Says:

    Reading that the Crowds came out for Black Friday. Early indications are “good,” maybe 10% higher YoY, but would like to see more data on purchases, not just crowds.

    Still, not all bad news.

  49. 49
    BirdsofpreyRcool Says:

    Packman #18 — “RealMoney will hire almost anyone”… LOL. No argument from me! Just trying to post some comments to put Dubai in perspective.

    Like your response in #38… Palm-Tree shaped islands financed by massive debt and not backed by oil production??? The answer is obvious.

  50. 50
    PackMan Says:

    42 — our subscription $$ at work Z …. LOL

  51. 51
    PackMan Says:

    Some reading:



  52. 52
    PackMan Says:


    The Monday after BF is always filled with claims of how great it was … spin spin spin.

    Reminds me of an old joke about a thrice married woman who never consummated any of her marriages … the first 2 husbands died doing extreme sports to celebrate their wedding day. The third husband was a real estate developer …

    The punch line is ….

  53. 53
    BirdsofpreyRcool Says:

    Black Friday… as seen thru eBay’s eyes.

    Mildly interesting interactive graphics–


  54. 54
    BirdsofpreyRcool Says:

    PackMan — ????????????

  55. 55
    PackMan Says:

    “He sat on the edge of the bed and kept telling me how great it was going to be.”

  56. 56
    PackMan Says:

    every night..

  57. 57
    PackMan Says:


  58. 58
    PackMan Says:


  59. 59
    PackMan Says:

    Despite the improved mood, frugality has not gone out of style. Many of Friday’s shoppers seemed to stick to lists and take advantage of discounts, rather than give in to impulse purchases.

    “My feeling is that consumers are just more realistic and more accepting of the economy and where their personal situation is this year,” said Jim Fielding, president of the Disney Store chain. “They’re coming in with a budget and they’re coming in with a list.”

    Indeed, veteran retailing executives and analysts said that, while store turnout was improved from a year ago, they had never seen the American consumer shop so strategically.

    “If it’s at full price, nobody’s even looking at the stuff,” said Marshal Cohen, chief industry analyst for the NPD Group, who spent the day surveying malls.

    Terry J. Lundgren, president and chief executive of Macy’s, said some 5,000 people lined up outside Macy’s in Midtown Manhattan on Friday morning, slightly more than last year. But he said consumers were still shopping with caution.

    “They’ve got a budget that they’ve planned to spend and I think most consumers will stick to that,” he said. “We expect that this will be a market-share holiday season. We don’t need consumers to spend more money. We just need to make them spend more money with us.”

    The National Retail Federation, an industry group, reported that high-definition TVs, laptops, winter coats and Zhu Zhu Pets toy hamsters were among the most sought-after items.

  60. 60
    Jay Says:

    Re Mexico: Ok to post, fair use checked.

    Jeremy Martin:
    Petroleum World News
    There are times when something is happening around us that we might not deem as monumental as history later judges.
    With life’s daily sturm und drang, especially during these trying financial times, the debate unfolding around Pemex’s development of the Chicontepec oil fields might not appear at first glance to be such an occurrence.
    Various developments suggest otherwise. Indeed, Mexico’s debate over Chicontepec could turn out to be a historical marker for the nation’s energy sector.
    Underscored by the unexpected change at the top of Pemex in early September, there has been an increasing restlessness with the continued decline in oil production and missed targets at the national oil company.
    What had long been an implicit message from President Calderon and Energy Minister Georgina Kessel quickly became explicit: What is happening at Chicontepec and why does it cost so much to be falling so short?
    To understand their angst, let’s review the numbers: Pemex has spent approximately $11.1 billion dollars and has earmarked over $2 billion in 2009 alone for Chicontepec.
    Pemex set a 70,000 barrel per day target from Chicontepec in 2009 but had only hit 30,000 barrels per day by the end of September.
    As the demand for Chicontepec accountability became much more overt – including public comments by Secretary Kessel – the newly created Comision Nacional de Hidrocarburos (CNH) also began to weigh in. And it did so in a very public and direct fashion.
    CNH chief Juan Carlos Zepeda minced no words by declaring, “The project should be stopped and reinstated (until) there is a real development plan.”
    These comments were followed by questions from other CNH members as to Pemex’s investment and technical plans for Chicontepec.
    Critics contend that this was merely an effort by the CNH to flex its muscles as the new-kid-on-the oil block. Perhaps, but flex away they have — and with good reason as the nation’s newly established oil watchdog.
    Proving that CNH and others are not lone voices, the changes on Pemex’s Board of Directors have also figured in the evolving Chicontepec debate. Fluvio Ruiz, who joined the expanded board earlier this year as an independent member stated in an interview that Pemex was far too “optimistic” about the projects.
    The awareness of the issues surrounding Chicontepec is very important. This debate would not be happening right now if there had not been energy reform legislation passed last year in Mexico.
    And, let’s be honest: This is a debate worth having, if for no other reason that it will force the various levels of bureaucracy in Mexico to address a public policy disaster.
    For years, the clarion call surrounding Pemex was that it needed the ability to spend more money. But after spending huge sums on Chicontepec, it reminds us of a basic economics lesson: More money does not always mean a positive return on investment.
    And as a CEO of an oil field service company said during a recent conference call: “When there’s that amount of noise…Pemex will probably have to look at their strategy.”
    This “noise” is nothing if not a din that underscores the healthiness of a pluralistic debate. Moreover, as the world prepares for climate change discussions in Copenhagen in December the International Energy Agency has used its annual report as a plea for efforts to address emissions and fossil fuel dependency.
    But more relevant might be the fact that Plan B for Copenhagen has suddenly become Mexico City – the site of the next international climate change summit.
    The debate over Chicontepec and Mexico’s steady conversion to oil importer is clearly unfolding against the larger backdrop of a global energy transition and Mexico’s desire under President Calderon to be a world leader on the issue of climate change.
    Mexico should seize this opportunity to use Chicontepec as a historic marker in its domestic energy debate. In doing so, it will have much to tout at the next stop of the climate change world tour and might very well redefine its energy future.

  61. 61
    PackMan Says:


    By Jessica Wohl Jessica Wohl – Sat Nov 28, 5:46 pm ET

    CHICAGO (Reuters) – In a worrisome sign for retailers, data released on Saturday showed that sales rose a scant 0.5 percent on the traditional kickoff to the holiday shopping season despite early signs of a strong showing.

  62. 62
    zman Says:

    Thanks BOP

  63. 63
    zman Says:

    Iran plans to add 10 enrichment sites, yep sanctions working greeeaaatttt.


    Crude up 50 cents as Asia rallies a percent and the dollar falls half a percent.

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