Jim: You said that oil will go to $100/barrel before it hits$25/barrel. I'm not so sure.

 

The reason I'm confident that the Dow Jones industrial average will top 10,000 before it hits 6,000 is that stocks are a leading indicator. They anticipate recoveries, typically turning upward 6-9 months before the economy as a whole. We are already one year into the recession, so I'm guessing we are getting close to the point where stocks will turn the corner. When you add in the fact that valuations and yields are the most attractive I've seen in my adult investing life, the outlook for equities is quite good.

Oil, on the other hand, reflects mostly immediate, near-term supply and demand. If the economy gets worse before it gets better, stocks might see the light at the end of the tunnel, but oil won't. It can't. Prices will keep falling as demand deteriorates in

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In the energy market Wednesday, oil prices inched lower, with crude for January delivery closing at $46.79/barrel, down 17 cents. January reformulated gasoline lost 1.68 cents, to $1.0415/gallon.

In its weekly inventory report, the Energy Information Administration said that crude stocks fell for the first time in 10 weeks, easing 400,000 barrels for the week ended November 28. Analysts had been looking for a 2 million barrel increase.

The EIA reported that gasoline supplies also dropped, by 1.6 million barrels, and that distillates were off 1.7 million barrels. Refineries were operating at 84.3% of capacity, down from 86.2% a week earlier.

OPEC continued to send the message that it will cut production at its meeting in two weeks, with Qatar’s oil minister Abdullah bin Hamad al-Attiyah saying that the group wants crude oil prices at between $70 and $80 a barrel “because $70 is the minimum price at which we can [continue

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Eric Roseman says none of the “big three” automakers deserves a bailout. Even if they get one, it will only delay their inevitable bankruptcy. Letting Detroit go under will be painful. But Eric says that is better than wasting more taxpayers’ money. And it could help restore some confidence among investors.

This from Sovereign Society:

With the auto industry now the “bailout flavor of the month” in November, investors are fretting over the possible demise of one or possibly all three U.S. automobile manufacturers. The Big Three have seen their respective stock prices virtually annihilated in the last few months, with General Motors (NYSE:GM) trading at the same nominal price as during the Great Depression.

Conservatives in Washington are balking at an auto industry bailout and investors are worried that any delay in helping Detroit will result in the collapse of the industry, hundreds of thousands of jobs and the

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Nigeria's foreign currency reserves rose this week to 59.7 billion dollars said the Central Bank of Nigeria. The rise breaks a trend over the last months still dropping crude oil prices in the international market. Oil prices have more than halved since hitting record levels of above 147 dollars in July on concerns about the faltering global economy. Since the beginning of 2006, militant attacks have cut Nigeria's oil output from 2,6 million barrels to around 1,9 million barrels.

Plunging crude oil prices and currency weakness are creating a crisis in Russia that makes the US look like a boomtown. Financial turmoil is mounting pressure on the Kremlin, says Andrew Snyder. And the resulting desperation could lead to some interesting profit plays.

This from Today’s Financial News:

If you think the situation is bleak here in the United States, you would wet your pants if you took an in-depth look at Russia’s economy.

Its stock market seems to be closed more than it is open. Its currency is plunging. And its government is running out of options and money to fix the situation. Russia makes America look like we are sitting atop a booming economy.

Putin’s downturn could lead to some easy profit potential. But more on that in a minute.

For nearly all of the last decade, Russia’s economy has been based on the country’s ability to sell its natural resources to Europe

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Home construction maven Toll Brothers Inc. (NYSE:TOL) joined the choir of the footsore and cash-starved today by calling on government to make it all better. According to CEO Robert Toll, the U.S. government needs to “aid” the housing market, primarily by propping up home values.

His line of argument makes sense in the strange, warped world that has emerged in 2008: If you throw billions at the empty suits who made high-risk loans and the empty heads who committed to them, how about making it easier for those who are willing and able to take out a solid mortgage… by reducing mortgage rates and fees and by “providing incentives such as a buyer tax credit for the purchase of all types of homes.”

Just like the U.S. car industry: Have Uncle Sam help out with some cash so unionized car workers can keep making cars.

From a practical point of view, they

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I spent the weekend at the Washington D.C., Money show. The show has shrunk from last year, and the opinions ranged from "this is an incredible time to buy" to "Aaaaaaiiiiiii!!!!!" I'll have more about that in Wednesday's Money and Markets column.This morning, the market is rising on news of a $586 stimulus plan in China and a new A.I.G. bailout in Washington. I'm not sure why the market thinks this is good news. Last time I looked, the Federal Debt had soared to such levels that each American now owes over $32,000. I think that's unsustainable, as long as the US dollar holds its present value.In other words, it would be a lot easier to bear if that debt was only (in relative terms) $3,200. That's not so scary, is it? I wonder if Uncle Sam is thinking the same thing. The Russians

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“It was the best of times, it was the worst of times.” Justice Litle thinks Dickens’ classic line  provides an apt description of today’s markets. Sure, this year has been hell. But it has also created some amazing opportunities for contrarian investors. Justice says this is most apparent in the oil and natural gas market, where irrational risk aversion has made most people forget the fundamentals.

This from Taipan Daily:

Mark my words. It will not be six months before the world tests Barack Obama like they did John Kennedy. The world is looking.

— Vice–President-Elect Joe Biden

Just a few weeks ago, Vice–President-elect Joe Biden (back when he was plain old Senator Joe Biden) promised the world that Barack Obama will be “tested” by America’s enemies.

“Remember I said it standing here,” Biden told his Seattle audience, “if you don’t remember

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TheStreet.com reports that the top 10 performing exchange-traded funds in October were all inverse ETFs. These funds move in the opposite direction to the indexes they track. And some double the size of the movement.

The PowerShares DB Crude Oil Double Short ETN led the way with 66.6% gains in October, as crude oil prices continued to slide.

Click here to read the list in full

The last global recession the world had was in 2001. Nymex crude oil prices, which had gone above $35 a barrel in September and October 2000, fell briefly below $20 a barrel in late 2001 before recovering in April 2002 to above $26 a barrel.

The oil price required for a marginal cost player to return its cost of capital is $65-75 per barrel.

Economic necessity is often cited as important in the price level. The lowest breakeven oil price that would bring the 2008- 2009 budget into balance in Saudi Arabia is $30 per barrel. The level in the UAE is $40 and in Qatar it is $55. The average breakeven for GCC is $50 per barrel.