To Greece with L-O-V-E.

February 12, 2010

Name: Phil Flynn

Company: PFGBEST

Years Trading: 25

Movie: Patton

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To Greece with L-O-V-E

L is for the way you love to spend. O is for Oh gosh it has to end. V is very bad budgetary. E is even more cuts that even unions can't ignore. Cash is all that they can give to you. Bailouts are just one but maybe two. Save Greece, the rest can make it, fix your budget and please don't break it. Love was made for Greece and you.

There is nothing like a Greek love story. Greece got a lot of love just ahead of Valentine's Day as the EU says they will stand behind Greece and their mountainous piles of debt. They will stand behind them despite the fact that they are angry at them for running their debt last year to 12.7% of their GDP even though the EU's limit is 3%. How romantic!! Of Course get your hankie out as you know so often these Greek love stories are really a tragedy. A tragedy that in the short run may look like a match made in heaven but could lead to more bad behaviour. It may lead to more bailouts and more bad behaviour from other EU countries like Portugal, Italy, Ireland and Spain that will expect the same type of loving treatment. Still the EU stands behind Greece despite the fact that not all has been well in this passionate relationship with the EU. Forget those rumours floating around about help from the International Monetary Fund as the Greece says they were only talking and getting debt advice and not asking the cash. A likely story! But if the EU spurned the Greece would they get into a relationship on the rebound?

Of course when it comes to love age is not an issue! Just use a little Grecian Formula,. It's as easy and one two three, just add the cash and the debt just gradually fades away. Is there a Grecian formula to step in and bailout Greece?

Of course all of this has significant implications for oil and commodities! The value of commodities has been determined in large part by the value of the dollar and its relationship to the EURO. The carry trade has made the Euro soar. The growing potential for more bailouts from the EU means that confidence in that currency may never be what it was.

Yet today the market is focus on a Funny Valentine from China. China once again is raising their discount rate in a surprise move that caused oil to fall from its major resistance of 7550. We have raised the concern about China bubbles in the wine makes me happy all of the time and this aggressive move by China's Central Bank of China said it will raise the reserve-requirement ratio for banks by half a percentage point from Feb. 25, for the second increase this year. This means that major banks in China have to keep 16.5% of their deposits on reserve though the specific rate can vary for each bank according to the Wall street Journal. For oil demand this is critical as demand growth for oil is almost all focused on growth in China the world's major emerging market. In Fact in Yesterday's International Energy Agency report they said as much. The Financial Times reported that The IEA said demand growth this year would come entirely from emerging markets and that, in spite of an improvement in the outlook for economic growth in the developed world, expectations for oil consumption in the west had barely changed. Over all the IEA said that we will see global oil demand growth by 120,000 barrels per day to 1.6m b/d with worldwide consumption expected to average 86.5m b/d this year. Of course that was before China's surprise move.

As I wrote yesterday that a close above $7550 means the bulls should try to test near $80 but we failed at that level. Now that is a major resistance. The news out of China should mean that that level should be a great area to play off of for a long term move! The Department of Energy Report is still a hurdle but play off of that level.

Nothing says L-O-V-E like getting signed up for the Phil Flynn Energy Blast. Make sure you get original The Energy Report first! Accept no imitations! You would not get the love of your life and imitation Diamond ring, now would you? Or paper roses! Of Course not! Make sure your significant other is getting all the love they deserve by getting them signed up for the Original Energy Report! Just call me at 800-935-6487 or email me at pflynn@pfgbest.com and as always make sure you are tuned into the Fox Business Network where there is always a lot of love for the markets.

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