Drone attackOh my, my! Did someone not say the short position in Birchcliff was 12million? No doubt also true for other energy companies. Many fund managers and trading houses enter the Monday session woefully underweight Canadian energy stocks. To see Birchcliff below $2.00 was ridiculous enough, but to see that freefall drop from $1.94 to $1.69, -why it was pure idiocy! At least that piece of unreality was addressed in the overnight when the market gapped up into the $1.90’s the following day.
What can you say? It’s the golden age of interest rates artificially forced too low and bond curves bent right out of shape. The perfect storm for mispricing risk. Why price discovery gets pitched clean out the window.
I love that pledge of oil from the U.S. strategic reserves. It’s been offered many times but never seriously honored. It’s merely a big stick. Logistically it’s just way too cumbersome. A seemingly wonderful gesture but comes it comes with so many strings attached that few can avail themselves of it. There isn’t even pipeline capacity available to seriously enable those requesting it. And how do you pay it back? At less than or more than you paid for it? The offer is like the famous Southern expression, “You all come back now,” which essentially means, don’t come back no more.
There will be many who will tell you this is only temporary, and things will be back to normal by Tuesday. Don’t believe them. Most of those comments will be from people who don’t own these stocks but wished they did, -like those 12 million Birchcliff shorts.
Drones can go anywhere, Iran has lots of them and Bolton has been fired.