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Energy Crisis? What Energy Crisis?


Election no reason to get bullish on alternative fuels.


Greetings from New York, where the notion that the new regime is "bullish for alternative energy" is, to be perfectly blunt, the silliest notion I've seen since last summer, when I got angry (really angry) emails for saying the Ag stocks were in a bubble.

Crude is $65 a barrel. America has a dead consumer, a financial meltdown in progress, a massive deficit and the collective attention span of a goldfish. The only thing we don't have, at least for the moment, is an energy crisis.

You can do what you want, trading-wise, but playing yesterday's bubbles as an "investment" is akin to loading up on Beanie Babies in the hope that they'll start selling for $20,000 apiece again.

Then again, maybe I just lack the vision to picture a world where Americans start buying insanely expensive cars that need to be recharged every 100 miles when gas costs less now than it did a year ago. Load up on windmills, Don Quixote, I'll be busy re-doubling my efforts to teach my family the art of the Grift.

Here's what I'm looking at, beyond readily portable tents that can be carried at the end of a good stick:

  • Robert Rubin is being bandied about as Treasury Secretary? Surely we're not talking about the same Bob Rubin who got paid $10-$15 million to play the same role at Citigroup (C) that Joe Louis once held at Caesar's Palace, right?

  • Neither "re-opening the TARP" nor unleashing a second round of stimulus packages can give the economy as much bang for the buck as gas prices dropping 25% in a month. Suffice it to say, the consumer remains less stimulated than Hugh Hefner. I'm happy to pay my share; I just don't want it wasted in an attempt to awaken the dead.

  • Adding to my tax grumblings is the fact that this year's volatility has made a mockery of the concept of "holding for the long term." To pick one of the scores of groups giving back yesterday's huge rally, consider coal names.

    If you were sharp enough to buy a basket of, say, Massey Energy (MEE), Arch Coal (ACI) and Peabody (BTU) (just to name 3 heavily traded names), you went to bed a hero, woke up a bum, and are now down on trades which were up over 10% yesterday.

    This election was easier to handicap than a Globetrotter's game. The stocks aren't being moved by politics. They're moving by animal spirits. Rule one in stampede markets is not letting a gain turn to a loss.

  • While we're in the no-longer-growing-globally group, one name which is actually moving on news is ArcelorMittal (MT). The world's biggest steel producer missed earnings, cut production and is shaving cap-ex in response to a crisis Mittal's eponymous CEO described as "a situation the world has not seen since the 1930s." ArcelorMittal's stock is down over 17% today, up over 13% in the last week and down over 41% in the last month.

    Again, ArcelorMittal is the world's largest steel company, not a Chinese start-up. Capital-gains taxes stink, and are likely to get worse, but it beat the snot out of riding ArcelorMittal down 75% in the last 4 months.

  • If you don't believe me, ask those who've been lugging Cisco (CSCO) in their portfolios since it was in the $70s. The router kingpin reports tonight. At the risk of sounding cynical, I doubt even a surprisingly strong quarter will catalyze the fourfold increase required to get the buy-and-hold camp back to even.
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No position in stocks mentioned.

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