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November 12, 2007
Lehman closes short term trade on Ethanol
In a note today, Lehman took off their short term buy on ethanol producers VSE and AVR and put on the Bear. That is consistent with the closing of the window for discretionary blending as ethanol prices have risen from the summer lows. Lehman was right as the shares both did outperform in the last couple months, but are down sharply today. Lehman says they believe a 40-45% chance of an energy bill passing before end of the year with an increased RFS. I put those chances closer to 60%, so that is where we disagree. I do agree that ethanol is in the shit for the next year though without an RFS.
Posted by Martin at November 12, 2007 10:51 AM
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