Fiscal Flop

June 05, 2009

Name: Phil Flynn

Company: PFGBEST

Years Trading: 25

Favorite Movie: Patton

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What's all this talk about fiscal discipline and getting the budget under control? Come on Fed Chairman Ben Bernanke, what are you trying to do, kill the commodity rally? All my evil speculator friends were just licking their chops watching the US run up a huge piles of red ink while you were using the green ink to print money so you could put it in the hands of the speculators reacting to these wildly bullish policies for commodities. Then you, Mr. Kill Joy, have to go and spoil it all by telling that Senate committee that we can’t keep spending money like drunken sailors. I mean when you say stuff like “unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth. Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance” you have to be careful because the market might actually believe you! When you talk like that and send a strong message to lawmakers and the Obama administration that you can’t keep spending money that you don’t have someone might actually think that you are serious. Don’t scare me like that.

What are you trying to do? Break the commodity rally. Stop the dollar from being worthless? Save the government from themselves? Oh sure you can point to the bearish Department of Energy report as the reason for the sell-off in energy (and no doubt it was bearish big time) but bearish supply reports don’t always move markets these days. We have rallied on reports that were more bearish than this and let’s face it the market was overbought and begging for a correction anyway.

Listen, what really matters to energy prices these days is the perceived value of the dollar and the perceived ability of the government to stop its massive spending binge. Oil has been moving because of the disturbing widening of the yield curve that seemed to suggest that the government’s ability to keep rates down in the long end would make every dollar the government spends that they do not have more and more expensive to pay back. Oil moved because it saw the threat posed by the widening yield curve and it expressed those concerns with soaring gold and silver prices, ratcheting up copper prices. Not to mention talk in recent weeks that the untarnished best in the universe debt rating of the United States of America’s was even rumored to be downgraded.

And you Mr. Grumpy Bernanke have to go ruin it all by saying enough is enough. Why tell the Senate and Obama and the rest of America that we can’t have our cake and eat it too? I like cake! Don’t tell us that we cannot have it all like universal health care, finance Social Security, buy out auto companies, bail out Fannie and Freddie, massive stimulus packages and speculating in the green energy space and at the same time drive down the dollar and make commodity speculators rich. What kind of downer talk is that? Whenever you think that way remember there has never been anything false about hope. We have faced down impossible odds. We've been told that we're not ready, or that we shouldn't try, or that we can't afford it because our budget deficits threaten financial stability or we can’t because of our threatened ability to borrow indefinitely to fund a budget deficit that already this year is estimated to be $1.85 trillion, equivalent to 13 percent of the nation’s GDP the highest level since World War II. Or that we can’t because we are on path that will make this country bankrupt, just remember that generations of Americans have responded with a simple creed that sums up the spirit of a people. Yes we can! Yes we can! Commodity bulls all over the world thank you.

Note to my loyal readers. Due to an update of our email spam filter it seems that for the last month or so some of your valuable emails may have been blocked. I have recently discovered this problem much to my dismay and I see many of my important emails caught up in the junk file. So if you sent me an email that I haven’t responded to please feel free to contact me again. In the meantime I will get around to trying to answer each and everyone in the junk mail that I can find except of course the one from that Nigerian prince. And by the way prince, I am still waiting for that account!

The oil market is shaking off all that weak demand talk inspired by yesterday’s dismal EIA report. Still oil has bigger things on its minds and still looks poised to move higher. This might be a great time to institute some butterfly option plays. Call for details. Also I am thrilled about some exciting changes here at Alaron trading. As many of you know we have been acquired by PFG Best and now will be known as ATD trading a division of PFG Best. This is going to allow me to offer you so much more than I was able to before. We will be keeping you informed on an array of new services and platforms and FOREX etc. And what is really exciting is we are going to expand The Energy Report and offer a lot more on the daily blast as well as new plans for expanding Alaronenergies and a new website as well. Plans we have had on hold are now soon going to be a reality and I cannot tell you how happy I am and how excited about what we'll be able to share with you! I will keep you informed on more information in the coming days!

About the Author

Phil Flynn is Energy Analyst and General Market Analyst with PFGBEST (www.pfgbest.com). Phil is one of the world’s leading energy market analysts, providing individual investors, professional traders and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline and energy markets. Phil’s market commentary, fundamental and technical analysis, and long-term forecasts are sought by industry executives, traders and global media.

Because he has been available to media around the clock, even during some of the most turbulent market periods in history, and because he has built a solid reputation for accuracy in his market analysis and forecasts, through thousands of interviews and broadcast appearances for more than a decade, Phil Flynn has become a headline-making name even as he continues to provide expert advice and customer care to his proprietary trading account clients.

Media highlights include: CNN, CNBC, Bloomberg, ABC, CBS with Katie Couric, NBC’s “Today Show” and “Nightly News with Tom Brokaw”, FOX’s “O’Reilly Factor”, PBS’s “The Newshour with Jim Lehrer” and “Nightly Business Report”, MSNBC’s “The News with Brian Williams”, Wall Street Journal Report, The Wall Street Journal, Business Week, Investor’s Business Daily, The New York Times, The Los Angeles Times, Chicago Tribune, Associated Press, The Toronto Globe & Mail, Houston Chronicle, Futures Magazine, National Public Radio’s Marketplace, a chat with the President of the United States, and many more venues.

You can read Phil’s daily market analysis and blogs at www.pfgbest.com.

PFGBEST is among the largest non-clearing U.S. Futures Commission Merchants, with customers, affiliates and brokerage offices in more than 80 countries. The company is a leader in sustainable investing through diversified products including managed funds, futures, forex, options, full-service and discount brokerage, trader education, market research, and direct online futures trading through its BESTDirect™ platform, and numerous other platforms and applications.

Phil’s commitment to and experience in futures trading is documented in two books, The Mind of a Trader (Financial Times/Pitman,1997), and Trading Online (publisher, date), both by Alpesh B. Patel. Phil is a lifelong resident of Illinois. He attended Daley College in Chicago before beginning his career on the trading floor of the Chicago Mercantile Exchange.

Phil Flynn
Phone: 800.935.6487
Email:pflynn@pfgbest.com