Media Appearances

I'm saying that, five years from now, if you adjust for today's dollars, we're going to be between $15 and $40. That's been our forecast all along and it still is.

However, it takes time for technology to play out. Right now there are frackers who can produce a barrel of oil for $23 and there are frackers who can produce a barrel of oil for $90. Somewhere in between there is a fracker who can produce a barrel of oil for $50. Right now he's the one for whom there is just enough demand. So that's why the price is where it is.

OPEC is no longer the swing producer. It's the American fracker who is the swing producer. American frackers have, at today's level of demand, a cost function that is between about $25 and $80. So, unless there is a demand collapse and I can show you all kinds of statistics that show that demand is actually growing, which is what you would expect when prices come down we're moving up through the cost structure.

The ECB's move is "not as big a deal as it seems," TrendMacro CIO Donald Luskin wrote in a note, especially in light of Wednesday morning's announcement that the ECB had authorized Greece's central bank to use "Emergency Liquidity Assistance" for Greek banks as needed.

"If you put both of today's policy moves together, what it means is that the Greek government -- not the Eurosystem -- will be on the hook for the collateral. But there will still be a funding mechanism for the banks, in case there is a serious run on them. That's the important thing," Luskin wrote.

The geographic shift of the Ebola crisis to U.S. soil in recent days has also put investors on edge, as concern about the spread of the virus and its potential impact on economic growth mounts but with no clear answers evident.

"This is the authentic black swan, the one nobody expected," says Don Luskin, chief Investment officer at TrendMacro. "Markets are experiencing the shock of recognition with Ebola."

Big round numbers like 1900 are often tough to barrel through easily..

Don Luskin, chief investment officer at TrendMacro, says the recent market weakness is history.

"Round numbers are meaningless, but it's meaningful to make all-time highs," says Luskin. "The winter correction is over. Spring has sprung. It's going to be a very good year. The sector rotation out of growth stocks that had everyone scared in April is over, and in fact has reversed itself. "

"To have only a 6% correction is a great sign of strength," says Donald Luskin, chief investment officer at TrendMacro. "It is telling us that U.S. stocks might have been tired but didn't want to go down. They just took a little nap."

..."The economy is not sprinting, but it's finally back on its feet," Luskin says.

Lorcan Roche Kelly, chief Europe strategist at TrendMacro, a US fund advisory firm, said the euro-area GDP numbers were at odds with ECB lending data, which showed continuing reductions in credit to small and medium- sized companies.

Without increasing credit to this critical sector, any return to vigorous growth was nearly impossible.

In a note put out yesterday, Lorcan Roche Kelly of Trend Macrolytics has a slightly contrarian take on what the ECB should do tomorrow. First of all, he does think there will be a rate cut, whereas previously he was skeptical.

BUT, he argues that a rate cut isn't the right tool for the job, and won't accomplish anything because of how broken everything is. Instead, the ECB needs to open up new channels to extend credit to Small and Medium Sized Enterprises, especially in the periphery where traditional monetary policy channels are impaired.

For a broad example of what the ECB could do that would actually be effective, he writes:

It may be that these moves are enough to prompt action from the ECB -- such as increasing collateral eligibility of SME credits, or so-called "structural operations" through the national central banks. If they were, then that would certainly be much more positive for the euro area than a rate cut.

Bottom line:

As usual with the ECB, this Thursday the rate announcement is made 45 minutes before the press conference starts. An announcement of a rate cut is a likely signal that the ECB is going to do nothing more. Conversely, no rate cut announcement should not necessarily be viewed as a time to sell. The data -- especially the inflation data -- demands a reaction from the ECB. If it -- correctly -- chooses not to use the interest rate tool, then anything else it chooses will have more of the "big bang" properties that can give the ongoing rally new legs. On the other hand, if the ECB does nothing at all, we will have the seen the top in the peripheral debt rally, at least until the ECB finally responds.

The European Central Bank Thursday...announced that if Cyprus didn't finally iron out a deal with international creditors by Monday, then the ECB would cut off emergency funding to the country's banks.

"This is a hard deadline of Monday evening on the continued existence of the Cypriot banking system as we know it," said Lorcan Roche Kelly, chief Europe strategist at research firm Trend Macro in Ireland. "While it was never likely that it would survive intact, the ECB has this morning forced the issue."

TREND MACRO, Lorcan Roche Kelly: "Reports on depositors being in the firing line have been circulating for weeks, and so it is not a surprise that the bail-in has been announced. However, the risks -- beyond upsetting Cypriot depositors -- are unknown. The rather bold assumption on the part of the Europeans is that this will have little effect. They may well be right. There have been rumors of a depositor bail-in for weeks and there have been no signs of flight. The ECB has promised to back-stop any disruption -- that is a promise that we can rely on. However, the risk is that depositors outside Cyprus will take fright and start to leave their banks. The euro has no single treasury backing it. Therefore, more than any other currency it has to rely on trust to maintain its value. With this deal, the euro area is testing the trust of both the markets and ordinary depositors. It seems likely that it will pass the test, but the judgement is out of its hands. Bank deposit flight can be [handled]. Trust in the currency cannot so easily be restored."

There's a debate in Ireland happening tonight designed to help reduce the massive debt burden the country is still facing since the collapse of the country's banks in the financial crisis... Lorcan Roche Kelly of Trend Macrolytics has emailed us a fantastic explainer of what's going on in Ireland. This is the clearest explanation we've seen yet, and we're very grateful for Lorcan's clarity on this. Be sure to follow him on Twitter @lorcanrk.

In the wake of the collapse of the Irish property market, two of the worst Irish banks -- Anglo Irish Bank and Irish Nationwide Building Society -- were nationalized and turned into a new institution called Irish Bank Resolution Corporation (IBRC) with the intention of working the institution down over a number of years.

The new institution had funding needs of over EUR 30 billion that were met by the government -- as owner of the institution -- writing a debt instrument called a Promissory Note. This note was repoed through the Irish Central Bank through a mechanism called Extraordinary Liquidity Assistance (ELA). Under ECB rules, ELA is outside normal ECB lending and is done at a national central bank level with ECB oversight.

The terms of the Promissory notes require payment at the end of each March of EUR 3.1 billion from current spending.

The current government -- elected in 2011 -- promised to reform the Promissory notes to end the arrangement requiring EUR 3.1 bn annual payments.

In the approach to to next payment -- due in 8 weeks the government has promised not to make the payment.

Two weeks ago a government proposal to exchange the prom notes with longer term debt on the Irish Central Bank balance sheet was rejected by the ECB.

Today's developments are the government trying to skin the cat another way. First, they are ending IBRC. After the passage of the legislation currently in front of the Dáil, it will no longer exist.

The IBRC assets will be moved to NAMA (Ireland's bad bank). The prom note will be replaced at the Irish Central Bank with NAMA issued bonds that are covered by a government guarantee.

The NAMA bonds will be structured like normal bonds -- only requiring annual interest payments until the end of their term -- and so will lead to reduced current expenditure in the short term.

However, this deal still has to be given the ok from the ECB who have oversight of the Irish Central Bank. They may make their decision tomorrow, if so it will be announced by Mario Draghi at the ECB press conference at 1:30 GMT.