THERE IS SOMETHING ABOUT NATURAL GAS

There is an article in the Honolulu Advertiser today indicating that the local gas company was turning to renewable sources. We don't use natural gas (NG) in Hawaii, we use synthetic natural gas (SNG). What’s happening to the price of natural gas? Last week, with crude at $72/barrel, NG dropped below $3/million Btu, or a ratio of 24. This is a seven year low for NG. (Hawaii residents pay about $4/MMBtu for SNG.) The historical average is about 8.4. A further drop to $2.25/MMBtu has been predicted by some.

Apparently, the recession hit NG users more than other fossil consumers, and inventories are at peak, with the further expectation that the coming winter will be mild. Interestingly enough, though, the stock value of NG companies remains relatively high

Thus, it seems to me that one should purchase some NG index, like UNG. Looking at its chart, a little more than a year ago, UNG was at 64. Today, it closed at 11.69.

Powerplants that use NG produce half the carbon dioxide of coal. If the carbon tax is ever adopted, then NG should benefit. All things concerned, then, even if the price of NG further decreases, in a year or two, UNG should begin to climb, perhaps even back up past 50. So I bought.

On Saturday, I reported on three stocks I purchased only because they looked like they might go bankrupt, had not yet, but showed intriguing potential. During this 10 week period, Freddie Mac went up 240%, Fannie Mae 174% and Sirius XM Radio 201%. I’m as shocked as anyone else, but, amazingly enough, today, Freddie jumped 18%, Fannie 42% and Sirius 4%. What is happening? Any comments out there?

The Dow Jones Industrials edged up 3 to 9509, and world markets mostly increased. Oil is at $74/barrel and gold dropped $13/toz to $941.

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Well, in the Atlantic, Bill can be dismissed, although there is a disturbance in mid ocean that is expected to follow almost the exact path of Bill. There are four storms heading for Hawaii, possibly. Hilda is now a Tropical Storm, but could well become a hurricane over the next 24 hours...but should pass sufficiently south of the Big Island. A new one, Invest 94, is already south and west of Hawaii, but various models show it going in various directions, including northeast to Hawaii. The advantage we have is that the waters around Hawaii remain "relatively" cool.

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