The Freedom Factory

Long energy and short financials has been a winning hedge fund trade this last quarter, but has since unwound. Oil has fallen nearly $30/barrel off it’s highs approaching $150/barrel, and financial stocks have been all the rage of late. Concensus is that, although we’re not in a recession, GDP growth is stagnant and markets are all over the place. How should a prudent investor approach today’s environment, particularly in dealing with energy? Continue Reading

On June 14th, the Financial Times reported that finance ministers from the world’s biggest economies (G8) disagreed with each other on the role of “speculators” in driving politically unacceptable energy prices. Today, the Associated Press adds Saudi Arabia to the list of country’s blaming financial markets for rising prices. The U.S. Energy Secretary declared that insufficient production was to blame for high oil prices, not the popular scapegoat, “speculators.” Perhaps both are right to some extent, but only if you properly define “speculator” to be our very own central bank!

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Just this last month, the Senate Judiciary Committee debased the integrity of our government and insulted the American people by harassing executives from some of the world’s largest oil companies. The premise of the hearings was that oil and petrol prices are high because of a global corporate conspiracy. Today, the Financial Times reports that a similar scapegoating effort is being directed by world leaders towards oil “speculators.”  Politicians are constantly on the hunt for quick answers to dumb questions, so let’s clarify a few things about the role of “speculators” in markets… Continue Reading