I’m confident that the trend for REITs will be down through the end of 2009. That’s why I suggest buying the UltaShort Real Estate ProShares ETF (NYSE: SRS. Current price $18.52) as a way to profit from weakness in the REIT sector. But fasten your seatbelt! SRS will be volatile!

REITs may appear cheap, but they are very dangerous to hold right now. A basic tenet of corporate finance is that a company or a sector is only creating value for shareholders if its return on invested capital (ROIC) exceeds its weighted average cost of capital (WACC). If its WACC exceeds its ROIC, it is destroying value. This describes the situation facing the REIT sector for the next few years.

Most REITs cannot float unsecured debt at anything less than 10% or 12%, so their cost of capital is high and rising. At the same time, due to the

I’m confident that the trend for REITs will be down through the end of 2009. That’s why I suggest buying the UltaShort Real Estate ProShares ETF (NYSE: SRS. Current price $18.52) as a way to profit from weakness in the REIT sector. But fasten your seatbelt! SRS will be volatile!

REITs may appear cheap, but they are very dangerous to hold right now. A basic tenet of corporate finance is that a company or a sector is only creating value for shareholders if its return on invested capital (ROIC) exceeds its weighted average cost of capital (WACC). If its WACC exceeds its ROIC, it is destroying value. This describes the situation facing the REIT sector for the next few years.

Most REITs cannot float unsecured debt at anything less than 10% or 12%, so their cost of capital is high and rising. At the same time, due to the

When most people think of oil, they think of light, sweet crude that comes up out of little holes in the ground. You describe oil by its API gravity. For example, oil like Brent crude or West Texas Intermediate has an API gravity of 38-40. The oil that Col. Drake pulled from the ground at Titusville, Pa., in 1859 had API gravity near 60. These types of oil are relatively easy to pump from a reservoir, lift to the surface and transport via pipeline to the refinery.

The Shift to Heavy Oil, with an “Energy Microsoft” at the Forefront

But a significant portion of the world’s oil is much lower quality than the light, sweet stuff. Indeed, most oil that’s found in nature is a heavy, viscous hydrocarbon with the consistency of cold molasses. This heavy oil - defined as API gravity 22.3 or less - is difficult and costly to produce

Bullion and oil appear in the lineup of power players that Doug Casey thinks investors can count on as the world slips deeper and deeper into what he calls the “Greater Depression.” Despite the raging economic storm and Doug’s doubts that Western civilization’s governments will take the actions needed to quell it, though, the Chairman of Casey Research is nowhere close to calling the game. In fact, he sees silver lining in the clouds of crisis—opportunity—and expresses optimism that technological advances, coupled with capital rebuilding once over-consumption runs its course, will prevail eventually. The Gold Report caught up with the peripatetic author, publisher and professional international investor between polo matches in New Zealand, one of several nation-states he calls home from time to time.

The Gold Report: You’ve been discussing what you’re calling “crisis and opportunity,” and in fact have a summit by that same name coming up in Las …

Alex’s Notes: Hat tip to Simon Heapes who pointed this article out to me this morning.

I certainly found the amazing drop in oil price strange when it occurred. When I see an amazing rise or drop, I have learned (ok call it being cynical) that many times it might just be someone tinkering in the markets.

I have seen far too much evidence of this kind of tinkering PERSONALLY to just dismiss it anymore. So when a massive shift occurs, not only do I look at market fundamentals, what the technical traders are saying, but also I look for motive and manipulation.

To assume we trade in “free markets” any more is simply naive.

Does this mean I think every move in the markets are contrived?

No, that is not what I am saying.

What I am saying is, that markets have been manipulated for far smaller incentive than the sovereignty and or control of