United Airlines: Hedge Funds Hurt Us on Fuel

[Robbien]

Source: The Street

Caught in a vicious cycle as hedge funds and other financial players ratcheted the price of oil steadily higher, United parent UAL(UAUA Quote - Cramer on UAUA - Stock Picks) on Wednesday reported a $547 million fourth-quarter loss, primarily due to fuel hedging losses.

On an earnings conference call, CEO Glenn Tilton pointedly noted that Goldman Sachs had predicted fuel prices of $200 a barrel by year-end.

"Today, crude oil is not $147 a barrel. nor is it $200 a barrel, but rather $40 a barrel, but yet we are in a financial crisis," he said.

"The implosion in price established a huge commodity bubble, just as we had a huge credit bubble," Tilton said. ""If there is one thing I have learned about commodities, it is that high prices beget low prices. What was unusual was the amount of financial institutions and hedge fund participating in the bubble.

"You've seen those positions unwind," he said, noting that the groups' participation "created the rapidity of the decline," imposing a burden on companies that must purchase large quantities of fuel to do business.

Going forward, Tilton said, "we are hearing from the (Obama) administration and from and various exchanges that there is going to be more disclosure require, more transparency required, and I think that's going to be a good thing."

Read more: http://www.thestreet.com/story/10458868/1/ual-hedge-funds-hurt-us-on-fuel.html?cm_ven=GOOGLEN

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[lostnotforgotten]

1. Peak Oil Is A Bitch Because It Can Cut Both Ways As Prices Fluctuate

eom

[natrat]

2. whatever, more like goldman sachs etc are predatory swine who should be hamstrung

[madrchsod]

3. it`s about time the boys start turning on their buddies

everyone with a brain knew "they" were running up the price not based on demand but on fear and greed. this just was`t fuel it was all the commodities across the world.

now the commodities are back to their real levels.

[DCKit]

4. Even my condo complex buys contracts for NG...

so we can budget without surprises, but our guys (so far) haven't tried to outplay the market and we haven't lost our asses.

Dear Southwest,

Don't hire compulsive gamblers to cover you ass on the fuel contracts. They'll fuck up your shit.

[slipslidingaway]

5. And AJC predicted the market was headed higher in 2000...

http://makethemaccountable.com/podvin/street/020224_LeadingLambs.htm

"...On January 7, 2000, the stock market analyst who is most often quoted by the corporate media appeared on the PBS program Wall Street Week. Abby Joseph Cohen of Goldman Sachs proclaimed that the market was headed much higher, and that investors should be enthusiastic buyers.

One week later, the Dow Jones Industrial Average made its all time high. It has since declined over fifteen percent. Cohen has urged the public to buy stocks all the way down.

On March 22, 2000, she sent out an advisory stating that the NASDAQ Composite was “undervalued” and recommended that investors aggressively purchase high technology stocks.

As of February 22, 2002, the NASDAQ Composite is sixty six percent lower. The XLK index of high tech stocks is down sixty eight percent. Cohen is still bullish.

The individual stocks that Cohen recommended have done even worse than the market as a whole. Her favorite energy stock in 2001 was Enron. She encouraged the public to add to their losing positions as the stock and the market went lower.

Her record is actually better than that of other high profile Wall Street brokerage analysts..."