Kevin Kerr of Kerr Commodities Watch says oil can go to $40/barrel or lower; Rick Santelli tells listeners to expect major volatility; John Butler thinks stocks will peak in 2015; and Jeff Rubin explains how he predicted $40-$60/barrel oil last year when no one else saw it coming.
Here are a few excerpts from this week’s set of interviews, which recently aired to our subscribers (click here for more info).
Kevin Kerr on $40 oil:
I think a key target now that's very attainable is $40/barrel. That would've been really unfathomable a little while ago that we would be back down at these levels and sustained there but bottom line is that the Saudis have very deep pockets—a lot of cash on hand. Now the rest of OPEC, that's not necessarily true but the Saudis can keep this going for a long time and they're doing it. They said that they're not going to cut production—they have no intention of doing that. And so I really think as we reach these key technical levels and fundamentals are in place that are going to keep driving it lower, that $40 is very attainable and maybe even a little below…(click here for more)
Santelli on stock market volatility: “You ain’t seen nothin’ yet!”
You know I think, Jim, when it comes to volatility, in the old words of Al Jolson, "You ain't seen nothin’ yet!" I really do think that when you have central banks around the world putting their thumbs on the scale in a variety of ways what may ultimately happen is that either doing more of whatever central banks are doing, which is trying to simulate, or eventual removal of such accommodation is going to be a wild ride and I think we are getting a very very small taste of that right now...(click here for more)
Butler on stock market peaking in 2015:
I tend to use longer-term metrics for evaluating corporate balance sheet health and profit growth prospects... I look at fundamentals that tend to only play out over multiple quarters or in some case multiple years. So I've been looking for a top for over a year now and of course I've been wrong but, that said, the reasons I've been wrong have not themselves changed. That is, corporate profit growth has turned negative as I expected. Yes, earnings per share are up. But that's just because of share buybacks. If you strip out share buybacks, earnings per share are not up and corporate profit growth is negative. And so there are certain fundamental developments that I was anticipating that have come to pass but so far they have not been sufficient to result in a material correction to valuations. Could it happen this year? Absolutely. Do I think it will happen this year? Yes, I do…(click here for more)
Jeff Rubin on how $40-$60 oil was “no mystery”:
Last year when you were on our show you forecasted that oil would go down to $40-$60/barrel when it was still trading around $90. What were you looking at that no one else was?
I think there's no mystery...triple-digit oil was a huge incentive for the growth of supply and what we've seen is huge increases in supply particularly from North America… But at the same time those very high oil prices…were starting to weigh heavily on demand. And as we've talked before in the context of my last book, The End of Growth, anywhere you look these days, since the recession, world growth has really found a much lower gear and particularly for oil markets, the so-called BRIC countries, and the story is the same for coal so I think what we are seeing here is the inevitable consequence and perhaps the paradox of triple-digit oil prices that it unleashes these new sources of supply but at the same time it weighs heavily on economic growth…(click here for more)
Our market technician for this Saturday is Robin Griffiths, former chairman of the International Federation of Technical Analysts, out of the UK. He’ll cover stocks, currencies, gold, and oil. Then, on the Big Picture, Jim Puplava gives his own outlook for the market this year in “Double, Double, Toil & Trouble…Then a Bubble.” All of the above is available on our Newshour Podcast page this Saturday. Be sure to tune in through our site or in iTunes!
