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Perhaps you’ve heard the phrase "the sins of the father shall be visited on the son." Well, here’s a case where that’s definitely not true:
Yesterday, The Travelers (NYSE:TRV) insurance took the place of its parent Citigroup (NYSE:C) on the Dow Industrials Average.
Reuters reports that in 2002, when Citigroup spun off The Travelers, former Citigroup CEO and founder Sandy Weil said he wanted to focus on "…important opportunities to invest our capital really on a global basis, in much more high-growth businesses."
Apparently that didn’t work out too well for Citigroup. The Travelers, on the other hand, is being hailed as an icon of financial stability. Oh, the irony.
*****The Federal Highway Administration said that the number of miles driven collectively by Americans dropped another 3.1 billion miles in March 2009 from a year earlier.
3.1 billion is a big number. So if Americans are driving 3 billion fewer miles a month, it means 36 billion fewer miles a year. Sounds like a huge drop in demand for oil, right?
Well, we’d have to know how many miles are driven a year to be sure. And the article reporting this data conveniently left the total out. That meant I had to do more work…
In perusing the Federal Highway Administration website, I actually couldn’t find the raw total miles for 2008. But I found the cumulative estimate made in December of 2008, so that will have to do. The number? 2.9 trillion miles!
Now that’s a huge number. (To put it in perspective that would be 15,591 out and return trips to our Sun-it would be like if you travel to and from the sun 42 times day. This is NOT a small number.) And 3.1 billion a month, or even 36 billion a year, kind of pales in comparison, doesn’t it?
*****I don’t mean to dismiss how much demand destruction has impacted oil prices. But like any market, the oil market clearly over-corrected when it sent oil prices to $33 a barrel.
Have oil traders over-reacted in the opposite direction with oil at $68 a barrel. Maybe. But then again, there’s a reason that oil traders are content to pay the lease rates on tankers to store unsold oil. They clearly believe they’ll get higher prices later: much higher prices.
*****I discovered yesterday afternoon that the TradeMaster video from technical analyst Jason Cimpl didn’t work quite right. So I’m going to make it up to you today by offering you Jason’s latest video masterpiece.
This video features the two latest trades Jason issued for his TradeMaster Daily Stock Alerts readers. The two positions featured in the video were just bought yesterday. I will follow them here in Daily Profit so you don’t miss Jason’s sell signal if you choose to enter either of these trades.
You can view the video HERE.