TMFDeej (99.47)

VeraSun is four times stupider than it thought / Russia's screwed

November 14, 2008 – Comments (4) | RELATED TICKERS: VSE , RSX

I've blasted ethanol companies in general and VeraSun in particular (I'd provide a ticker, but this company is toast and I rode it all the way down...in CAPS at least) a bunch of times in the past.  I hate to kick a company when it's down, but (...well no I don't) VeraSun announced today that it anticipates that its third quarter loss will be around $464 million, nearly FOUR TIMES as large as it originally reported less than a month ago.  No wonder these morons went belly-up, they can't even figure out how terrible they really are.  The production of ethanol from corn is a terrible business to begin with.  It barely survives, even with massive government subsidies.  Mix that with some absolutely horrible hedging and you have a recipe for bankruptcy.

Ethanol producer VeraSun expects 3Q net loss to be 4 times higher than earlier estimate

Cory Garcia, an industry analyst with Raymond James & Associates is quoted in the above article stating that more bankruptcies are a "real possibility" in the industry if oil prices stay low for an extended period.  Good luck guys.  The only hope that ethanol producers have is if Obama and the Dems funnel even more money their way.

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Russia's screwed: Russia’s Texas Tea Party Cools

"Russia's budget for this year was balanced on assumptions of oil prices at $70 a barrel, and next year's is budgeted for $95 a barrel."

I would short the RSX in CAPS, but it has fallen so far already.  Perhaps I still will.  Hmmmm, If I recall correctly Russia is something like the eighth largest holder of U.S. Treasuries (ranked by country).  Think that they will have tons of cash to throw at us in the near future?  Nope. 

Add to this the fact that China has decided to spend its money to help prop up its own sliding economy rather than to finance our wasteful spending and I suspect that it will not be purchasing as many treasures in the future either.

Who in the heck is buying all of this paper that the government is hawking and how long can it last?

Foreign owners of US Treasury Securities (August 2008)

Nation                           billions of dollars           percentage

Japan                                  585.9                           21.38%

China                                  541.0                           19.74%

United Kingdom                    307.4                           11.21%

Oil exporters                        179.8                           6.56%

Caribbean banking centers     147.7                           5.38%

Brazil                                   146.2                           5.34%

Luxembourg                          77.5                            2.82%

Russia                                  74.4                            2.72%             

Hong Kong                            61.2                             2.23%

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I told you that the Jets would make the playoffs.

What a win over the evil Patriots last might.  Too bad it kept me up past my bed time.

Deej