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Crude’s Collapse & The ‘C’ Word

Crude’s Collapse & The ‘C’ Word thumbnail

Why aren’t more people talking about this? It’s a huge development and nary a peep anywhere. The mainstream media is filled with baited expectations for 3% wage growth on Payroll Friday. All eyes are on the labor market, which is a lagging indication, instead of on the oil market, which is forward looking.

As of this writing, the futures curve for WTI has expanded this current selloff. The level of alarming contango has continued to widen, in both amplitude as well as frequency, in just the past few days.

The question at the front was rhetorical. The reason everyone wishes to focus on the labor report is obvious. The wage data in particular outwardly though misleadingly conforms to the idea of an economic boom, at least in the US. The crude market isn’t just saying “wait a minute”, it completely refutes that very thing.

Furthermore, the oil curve had only been in backwardation less than a year. It flipped toward that positive economic signal, which was widely covered, exactly one year ago today.

We’ve seen this all before. The oil curve shifted to contango last on November 20, 2014. It was ignored then, too, and after catching some reluctant notice immediately dismissed as a supply glut in favor of data showing the “best jobs market in decades.” The payroll reports four years ago were just too lovely to set aside for this impossible, according to Economists, ugliness.

Guess which one proved more valuable in assessing the way the global economy was headed, US most definitely included:

Etc., etc.

That, too, was a rhetorical exercise. Expect to hear about another “supply glut”, OPEC and some such, when convention finally does address another futures curve leaning the wrong way. And then we will hear about how “unexpected” everything will be when the labor market data proves irrelevant (already being legitimately uninspiring) all over again.

Honest analysis would take the WTI futures curve, along with the yield curve and eurodollar futures curves, as the world economy and markets traversing deeper into the red (below). Here as well as overseas. 

The alarms grow louder and louder. 

 

Alhambra Investment Partners



63 Comments on "Crude’s Collapse & The ‘C’ Word"

  1. Davy on Sat, 3rd Nov 2018 10:29 am 

    Juan quit the puppeteering and just be JuanP and argue some ideas you lame brain.

  2. Gaia on Sat, 3rd Nov 2018 10:47 am 

    Greed is destroying our only home (Earth).

  3. Davy on Sat, 3rd Nov 2018 4:11 pm 

    I forgot to add, I hate you too nederdumbassNazis. Ive called you a disgusting semi-human on many occasions. Though are the best friend I have in this world, and will ever have, I still hate you.

  4. Davy on Sat, 3rd Nov 2018 4:31 pm 

    juanP identity theft:

    “I forgot to add, I hate you too nederdumbassNazis. Ive called you a disgusting semi-human on many occasions. Though are the best friend I have in this world, and will ever have, I still hate you.”

  5. Davy on Sat, 3rd Nov 2018 6:12 pm 

    “The Real Economic Shock Is Yet To Come” – Trade War Deepens Across Asia”
    https://tinyurl.com/yb7ewgxb
    (graph) https://tinyurl.com/yb9oj77e

    “Right now, the economic impact of the escalating trade war between Washington and Beijing seemed to deepen last month as factory activity and export orders dove across Asia, with some analyst warning Reuters that the worst has yet to come. New data earlier this week showed exporters and factories came under severe pressure, as manufacturing surveys showed some growth in China, but a rapid slowdown in South Korea and Indonesia and a straight out contraction in activity in Malaysia and Taiwan.”

    “many orders from abroad are still frontloaded in anticipation of yet more tariffs and the impact is still mostly indirect, through the business confidence channel. The real economic shock is yet to come”

    “In late August, we pointed out how the first round of US-China tariffs in early July might have already slowed down global trade. Now, Reuters points out that the Harpex index, which tracks weekly container shipping rates, has collapsed 25% from its June peak.”

    “And here is the bombshell: “As everyone anticipates a further tariff hike…there is still a lot of front-loading going on. After Jan. 1, we expect many trade and economic activities to tumble,” said Kevin Lai, senior economist at Daiwa Capital Markets. The storm clouds have been gathering for many months, it is now that the downside risks are becoming increasingly more pronounced. A recession is coming.”

  6. Davy on Sat, 3rd Nov 2018 6:18 pm 

    “If You Think Trump And Powell Aren’t Getting Along…”
    https://tinyurl.com/y8ppjbs7

    “The mechanics of oil are related to the eurodollar conditions for India and beyond. If India has gotten itself into a world of hurt, where is oil demand going to come from? That country was one of the last remaining places on earth, EM or not, where fast growth wasn’t just fairy tale talk. India has been, hands down, the best performing of the EM group. Textbook deflationary disruption. In other words, if the world economy loses India, too, placing that place alongside China in the eurodollar destructive column, WTI contango makes perfect sense having nothing to do with a supply glut. Eurodollar consistency in each market, foreign and domestic. Modi’s sudden change of heart about Patel really has nothing to do with interest rate hikes. Makes you wonder about Trump’s similar reassessment of Powell.”

  7. I AM THE MOB on Sat, 3rd Nov 2018 6:26 pm 

    Davy

    Enough with the spamming of zerohedge you narrow minded half wit..

  8. Davy on Sat, 3rd Nov 2018 6:52 pm 

    do you understand them MOB?

  9. JuanP on Sat, 3rd Nov 2018 8:19 pm 

    Someone is stealing my identity and reposting old comments after editing them. It has to be Delusional Davy. Please tell me we don’t have more than one derandged lunatic on the board! With the Exceptionalist it is more than enough. ROFLMFAO! You are all a bunch of freaks. I am the only one here who is NOT bat shit crazy! I swear! I am sane! I swear! ROFLMFAO!

  10. JuanP on Sat, 3rd Nov 2018 8:20 pm 

    Davy is the one that ruined the board for most people.

  11. makati1 on Sat, 3rd Nov 2018 8:28 pm 

    Right on, JuanP.

  12. Davy on Sun, 4th Nov 2018 3:25 am 

    JUANP PUPPETEERING
    I HATE DAVY on Sat, 3rd Nov 2018 8:10 am Davy has so many enemies, including ones he doesn’t know about, it’s unbeleivable. Why? Because Davy is the biggest fucking douche bag to walk this planet. Yeah, I’m not on ur list and I fucking hate ur guts as well Davy boy. God, how I wish Davy boy and me went to school together. I would have punded his fucking face and loved it.
    JUANP PUPPETEERING
    I HATE DAVY on Sat, 3rd Nov 2018 8:18 am Forgot to say why I hate u. Every part, every fiber of who ur reeks like the most stinking garbage dump imagainable- u make the smell of rotting flesh smell better than the odor u emit. U have so many goddamned enemies u can’t keep track. Its because you are a vile quasi human wretch. EVERY NEGATIVE HUMAN TRAIT U EMBODY IN SPADES. NO WONDER U ARE SO UNIVERSALLY HATED.
    JUANP ADMITTING
    JuanP on Sat, 3rd Nov 2018 8:59 am OK, Davy, I take credit for fucking with you. I will fuck with you for as long as I can; I enjoy doing it. ROFLMFAO! Come on, Exceptionalist, grow a pair and take it like a man. It is time you fought some real battles and stopped hiding behind your murdering, criminal, terrorist government. Go take back the streets of St. Louis! LOL! You are such a sad fuck, Exceptionalist! Not even your children love you!
    DAVY SHOWING DISCOVERY TO NEDER
    Davy on Sat, 3rd Nov 2018 9:09 am Satisfied neder?
    NEDER AGREEING
    Cloggie on Sat, 3rd Nov 2018 9:26 am JuanP, perhaps you concentrate on more positive subjects, like perma-culture and scale back a little on personal attacks.
    DAVY IDENTITY THEFT
    Davy on Sat, 3rd Nov 2018 4:11 pm I forgot to add, I hate you too nederdumbassNazis. Ive called you a disgusting semi-human on many occasions. Though are the best friend I have in this world, and will ever have, I still hate you.
    JUAN P DECEPTIVELY BACK PEDDLING
    JuanP on Sat, 3rd Nov 2018 8:19 pm Someone is stealing my identity and reposting old comments after editing them. It has to be Delusional Davy. Please tell me we don’t have more than one derandged lunatic on the board! With the Exceptionalist it is more than enough. ROFLMFAO! You are all a bunch of freaks. I am the only one here who is NOT bat shit crazy! I swear! I am sane! I swear! ROFLMFAO!

  13. Davy on Sun, 4th Nov 2018 3:27 am 

    Well, here is the classic board lunatic playing his deranged games. We have all the games here. We have puppeteering, identity theft, admitting the games, attacks, then deceptive backpedaling. Juan, you are the one enjoying these games not the rest of the board. It looks like billy does too because I know billy wants a return to the old days when 5 of you at once came after me. He doesn’t do well alone. Juan, the one thing you are not capable of doing is debating ideas. This is proof you have lost your battle. You are now irrelevant and just more board noise distracting us from our search for the truth. Juan, you are a decent guy when you are on your medication. When you are not you a flaming lunatic. SEEK HELP

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