Both Merrill Lynch (NYSE: MER) and Citigroup (NYSE: C) plan to raise a great deal more money to shore up their battered balance sheets, mostly from foreign governments.

According to The Wall Street Journal, "Merrill is expected to get $3 billion to $4 billion, much of it from a Middle Eastern government investment fund. Citi could get as much as $10 billion, likely all from foreign governments."

While the investments may raise questions in Washington about overseas capital controlling large interests in US financial companies, it also begs a more interesting question. Why aren't large pools of US capital investing in US companies? Certainly Warren Buffett or Calpers have the funds to take large pieces of companies like Citigroup.

The answer may be that sovereign funds have a much longer time horizon to get their money back. That would make sense since they only answer to their governments.

The only other explanation is that US institutions don't have much faith in the American economy and financial structure.

Douglas A. McIntyre is an editor at 247wallst.com.

With oil's recent strong moves to the upside, we are now sitting at record high oil prices and are within striking distance of crossing through the psychological $100 barrier. This leads us to ask ourselves if and when $100 oil is finally going to become a reality.

OK, first I have to decide if I think that $100 oil is in fact coming in the not-so-distant future, and to that question the answer is yes, I do. When you look at the current market dynamics, all indicators point to even higher oil prices coming our way. But when? When will we see the $100 oil that everyone is starting to talk about?

With oil prices currently at $92.38, we really aren't that far from seeing the magical $100 mark. With only a little over 8 percent to go, it is feasible to argue that prices could hit $100 this week. I don't think we will see $100 oil this week, but it is a possibility. Let's consider that prices are already trading up about 9 percent from last Wednesday, when we got our last U.S. inventory report from the U.S. Energy Department.

Oil prices have picked up right where they left off yesterday, fueled by new concerns over tensions in the Middle East. Prices have moved up $1.42 on the day to $88.52 and hit an intraday high of $88.99 earlier in the session.

Yesterday, traders pushed prices higher after the U.S. Energy Department's weekly inventory report showed an unexpected decline of 5.3 million barrels, but today's extra price gains are being attributed to new violence between Israel and Lebanon. Any Middle Eastern conflicts will result in price gains, and that is exactly what we are seeing today on news that Lebanese troops fired on Israeli warplanes.

While it is true that a conflict between Israel and Lebanon would not impact supplies from the region, there is always the fear that an escalation of violence between the two would draw in the big oil players in the region. This is the first encounter since last summer's conflict between Israel and Hezbollah rebels, which pushed oil prices to last summer's highs.

According to a report in Bloomberg, oil is selling in record territory on worries that Turkey may invade Northern Iraq. Uncertainty is never a good thing when it comes to business, and when it's related to oil prices it rocks the world, and potentially the world's economy.

• Turkish Prime Minister Tayyip Erdogan told reporters his country would pursue the Kurdistan Workers Party, or PKK, regardless of diplomatic costs, according to an Agence France-Presse report. Northern Iraq holds some of its largest oil fields, including Kirkuk, the source of much of Iraq's exports.
• "If they start shelling across the border, the price is going to go up,'' said Addison Armstrong, director of market research at TFS Energy LLC in Stamford, Connecticut. "When there is tension in the world, oil gets bid up.''

This unpredictability in the region has kept oil prices up even though demand is not as strong as speculators anticipated during its rise over the last few years. For me, this is an unfortunate irony as I read this news after returning from a breakfast meeting where I told an associate, "Oil will be $60 a barrel before it is $100, unless war breaks out somewhere." This is very sad to me, because just the possibilty of war creates a rise in oil prices that I envision causes more pain for those at the bottom of the economic strata barely getting by now.

Former President Jimmy Carter just doesn't know when to shut up. Here is the man who may go down as the worst president in American history and he still is trying to build his legacy. A legacy of what? A legacy of saying stupid things at the worst time? Saying the recent elections in Venezuela, which he oversaw as an "observer" were fair and equitable? The man who let the shah of Iran fall in 1978, only to see the Ayatollah Khomeini take over and begin a reign of terror, including the 1979 hostage crisis at the American Embassy? Carter should call it a day and go back to Habitat for Humanity -- where he has done good work.

Carter has seen many members of his staff leave their posts recently, as his latest book was viewed as a joke. He is pro-Palestinian and virtually anti-Jewish. He says he isn't, but his statements supporting the wrong group show otherwise. Carter speaks to anyone who will listen as if he believes he was a great and wise president. Right.

Carter's presidency was marked by record high interest rates, international failures culminating in the failed rescue attempt of the hostages in Iran, and the idiotic "fireside chats" where he accused Americans of being in a "malaise." America was so "malaised" that Carter was crushed by Ronald Reagan 48 states to 2. The day Reagan was inaugurated, the hostages were released -- some 444 days after their capture. The State Department had warned Carter that the embassy was at risk, but Carter chose to ignore the warnings. Gee, what a surprise.

So why do we even give this guy a forum to spout off like a scorned lover? He never got over the Reagan landslide, and has taken every opportunity to publicly criticize President Bush. There was an unwritten rule that retired presidents do not openly criticize the current occupant of the Oval Office. So much for protocol.

Jimmy, it's time to go back to Plains, Ga., and retire -- for good.

Georges Yared is the CIO of Yared Investment Research and the author of "Baby Boomer Investing...Where do we go from here?"

Halliburton Company (NYSE: HAL) today reported better-than-expected results, proving its many naysayers wrong. The oil service giant posted EPS at $0.63 and revenues at $3.7 billion, both above the $0.56 EPS and $3.5 billion revenue expectations from Thomson Financial.

We already knew about the gain from the past KBR Inc. (NYSE: KBR) spin-off (not included in above numbers for ease of comparison), so that was already baked into the cake. The company noted a rebound in North America, saying "in June we experienced the highest monthly United States well stimulation revenue in our history." The Canadian operations, though, continued to be weak.

Halliburton has been redefining itself for the future, and the naysayers who have been arguing against the stock are probably scratching their scalps as they try to find a fault in the report today. Its corporate move to Dubai should help it compete for more Middle East contracts, its investments in Russia are paying off, it is still buying back shares (25.746 million at an average price of $35.37 in Q2 alone) and it's already spun-off KBR.

This was also one of Jim Cramer's "Top 9 for 2007" and is performing quite well, with shares up almost 3% at 52-week highs in early trading. Compared to other oil services stocks, this one is not at all-time highs, since it did trade north of $40.00 in early 2006 before some of its woes came to light.

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

A couple of days ago it looked as though we were well on our way to $70 oil, but prices have fallen over $1 a barrel today following this week's inventory data from the Energy Information Administration.

In its report the EIA indicated that oil stockpiles last week rose by an impressive 6.9 million barrels and gasoline reserves increased by 1.8 million barrels. With both oil and gasoline inventories up traders have pushed oil down $1.08 to $68.02 and for the moment has put the brakes on the recent bullish run for oil.

Refinery production has been a vital area of concern this year with American refineries being unable to maintain output levels running above the critical 90% range. Even though gasoline inventories were able to jump last week, America's refineries are not able to take responsibility for the recent upward move. The EIA reported that refinery output actually fell last week 1.6% down to 87.6%. The truth behind last week's increase was actually a rise in supplies of blending components for gasoline.

Even with today's inventory data and subsequent pullback in oil prices I do not think that we have seen the end of this current bull oil market. For now things are cooling off, but let's not forget that we are still only at the beginning of the summer driving months, and with all the violence that is taking place in the Middle East these days, there are still plenty of factors that could, and should, lead to higher prices by the end of the month. We may see oil pull back another couple of dollars down to $66, but I for one will not bet against $70 oil by the end of the month just yet.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.

The war is off budget but we are finding the money somewhere. There are only two possible somewheres -- either we (the federal government) are printing it, or we are borrowing it. Probably some of each, but more borrowing than printing. So if we are borrowing the money, who is lending it to us?

The rest of the world, of course, through their purchase of U.S. treasuries. And who is doing the most buying? The Chinese, of course. They have the largest imbalance of trade with the U.S. Interestingly, so are the Gulf states in the Middle East because of the petro dollars that get recycled into U.S. equities but also into treasuries. How ironic that "our war" is being financed by the indifferent Chinese and the very effected Gulf states, who have a direct interest in us protecting theirs.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

A friend of mine, T.R., is an officer in the Air Force, currently stationed in Kabul, Afghanistan: not exactly a resort, and not a place you would want to spend another 250 days in. He tells me the troops like Oreo cookies -- made by Kraft Foods Inc. (NYSE: KFT) -- of all things. They like them better than "homemade." Perhaps, greater reliability; an important concept in the military. Perhaps it is the preservatives; also an important concept in the military.

Here is the most interesting thing about his email. He reads all my stories and he informed me that he bought one of the oil stocks I recommended and sold it for a quick 10% profit. Now that brings several thoughts to mind. First, there is the dramatic impact the Internet has had on the ability of people to stay connected to the world -- trading stocks from Afghanistan! Second, I'm a buy-and hold-guy and evidently he is not. All of my oil-related picks have continued to rise --Valero Energy (NYSE: VLO) and Anadark Petroleum (NYSE: APC) in particular -- and he would have been wiser to hold on to them. Of course when you are in a war zone, perhaps your time horizon is now, so who can blame him.

When I relayed this story to someone else, he fantasized about an "enemy combatant" in a bunker a mile away also reading my story and trading stocks. Not likely unless it was an Al Qaeda or Taliban leader moving money to Switzerland or the Bahamas, as warlords are prone to do.

Anyway T.R., when you read this you should know you are loved and respected, and your friends miss you and can't wait for your safe return. And more Oreos are on the way!

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

Two Sumos -- government and big oil companies -- are wrestling for control of the oil industry. And according to the Wall Street Journal [subscription required], a big shift in bargaining power is putting government on top. This could be a crushing blow for oil companies and the people who invest in them.

In the past, oil companies enjoyed the upper hand because they had the capital and the expertise to take on the risk of exploring for new sources of oil. As a result, big oil traded that ability to take risk for equity ownership of oil fields. But since there are fewer new places to explore, governments increasingly find themselves in control of their own energy destinies.

With demand strong and supply dwindling, prices are high and governments have the capital and expertise they need to develop their own energy resources -- leaving leaving big oil companies with a smaller piece of the pie. In some places, the producer nations are simply taking majority stakes in existing projects away from Western oil companies. Even when the Western company is paid for its property, future profits are erased. In December, Royal Dutch Shell PLC (NYSE: RDS.A) was forced to turn over a majority stake in Russia's giant Sakhalin 2 project to Gazprom

When I think of the jowly former Exxon Mobil Corp. (NYSE: XOM) CEO Lee Raymond and his $400 million retirement package, I feel little sympathy for big oil. But if big oil wants to strengthen its long-term profits it will need to find a way to increase its bargaining power. And this could come from developing sustainable energy sources --such as solar and others -- and pushing for greater energy efficiency in automobiles.

The resulting lower prices could strengthen big oil's bargaining power with governments and position it to extract a bigger share of end game profit. Meanwhile it would be positioned to profit from the next big energy wave.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Exxon or Royal Dutch Shell.

Oil prices were on the move again today. This time you can blame Iran for adding turmoil to the oil market.

It is no secret that tensions have been high lately between Iran and the West over the country's nuclear program. Today that relationship took on added pressure when it was reported that Iran had seized 15 British sailors and marines in the Persian Gulf.

According to the Britons the personnel were on patrol in Iraqi waters inspecting merchant ships when they were taken prisoner by Iranian vessels. The Iranians, of course, dispute that claim and insist that the British military vessel had illegally entered into Iranian waters.

Hopefully the situation will work itself without any harm coming to the captured Britons, but it's definitely not a pretty situation and one that is going to continue to keep oil prices higher.

Over the past couple of months America has really been bulking up their naval presence in the Gulf with the primary focus of showing strength to Iran. As the two countries continue to exchange pretty harsh words over Iran's nuclear energy ambitions the situation is definitely a fragile one. Two American carriers, and a strike group of over 6,500 sailors and Marines were added to the area recently. This is definitely a volatile situation and hopefully one that does not spiral out of control. For now let's just hope for a quick resolution to the situation.

On the day oil prices moved up by $0.52 to $62.21.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.

ConocoPhilips (NYSE:COP) shares tumbled today after the third-largest U.S. oil company said fourth-quarter production would be below forecasts. Higher output in Alaska and the U.K. wasn't able to offset declines in the Timor Sea, conrtinental U.S. and Libya, Reuters said. The company's shares last traded at $66.49, down $1.70 or 2.49 percent.

Exxon Mobil (NYSE:XOM) and Chevron Corp (NYSE:CVX) also fell as oil prices continued to drop They have now hit $56 a barrel, according to the Associated Press. Does that mean cheaper gasoline prices will follow? Texas oilman T. Boone Pickens for one expects oil to average $70 this year. I am not sure they will hit those levels, but I think the days of really cheap oil are over.

Still, as Bloomberg News points out. the unbelievably mild winter that we've had this year is affecting the market. Prices had their biggest one day drop since December 2004

``We're getting follow-through from yesterday because the picture hasn't changed,'' said John Kilduff, vice president of risk management at Fimat USA, told Bloomberg. ``The temperature forecasts keep going up, which, combined with a relatively quiet geopolitical picture, is clobbering both crude and heating oil.''

Expectations that world oil supplies will soon peak and then sharply decline are incorrect, according to Cambridge Energy Research Associates. The research firm found that the remaining global oil resource base is 3.74 trillion barrels, three times as large as the people who believe supplies have peaked.

Since the Democrats took control of Congress, a battle is going on within the Bush administration on the direction of its Mideast policy. You can see this with the resignation of Donald Rumsfeld and the subsequent appointment of Robert Gates as Secretary of Defense. We also got additional evidence with the resignation of John Bolton as American Ambassador to the United Nations. This is literally a battle of the Bushes.

On one side we have the "neoconservatives" or Bush 2 people who were the architects of American foreign and defense policy during President Bush's first term. They are internationalist in scope and want to remake the Mideast and, to a lesser extent, the rest of the world in a new Western, democratic mold, beginning with Iraq. They want to accomplish this with or without help from the rest of the world.

On the other side are the "realists" or Bush 1 people who served during President George H.W. Bush's term of office. These individuals value stability and American control of the situation with much less regard for ideology and are very wary of trying to change the existing world order. Some have said that they don't mind a dictator as long as he is our dictator.

Why should we care?

Last month when OPEC decided to cut production by 1.2 million barrels a day during November, the eleven nation group also announced intentions to make further cuts in December. Today the oil cartel tried to re-affirm this intention as Saudi Arabia's oil minister put out a statement that the group will consider more cuts in December. So why is this news? If the group already said they were going to make the cuts, why is this statement coming out of Saudi Arabia considered new news?

Those readers who have been following the OPEC situation on this blog already know that statements out of OPEC really need to be seen before we can believe them. For the past few months we have continuously heard the group talking about and promising cuts, but just have not seen the follow through needed to really help oil rebound. The November production cuts that were promised didn't really work out so well. While the group was promising 1.2 million barrels a day pull backs, analyst's are actually estimating that OPEC nations have been successful in cutting about half of that volume.

So, it stands to reason that when OPEC stated last month that more production cuts were coming in December, the market was a little weary of the promises. OPEC just does not have the history of cutting back on the flow of the precious crude while prices are high. Sure, $60 oil is a far cry from the peak we saw this summer up around the $80 level, but at $60 a barrel we are still looking at pretty high oil. Will these countries actually cut back when their most valuable export is so richly priced? Many are doubtful. Many think that these continuous promises and statements from the group are merely a psychological ploy to pull buyers back into the market.

GE ended the day at $33.71, up 51 cents, a 1.54% leap in its price. What caused this leap? Certainly there doesn't seem to be too much exciting going on in the series of press releases coming out of GE's PR department that would be catching people's attention. Many had attributed GE's surge in price to the newfound confidence in a more stable Middle East and positive news on oil.

Is there something else in effect, though? GE recently announced it was acquiring Kinder Morgan, a natural gas distribution company. Certainly some seem to think that GE's getting further into the energy business is a good thing. In a period of time when energy profits have never been higher, investors might be responding to GE's latest company purchase with a vote of confidence.