Shorting AVR - Aventine Renewable Energy Holdings

What Does Aventine Do?

The Company and its subsidiaries, is a producer and marketer of ethanol in the United States.

The Bears: Surging Corn Prices, Falling Demand, Ethanol

Surging corn prices and supply exceeding demand are putting immense pricing pressure on the ethanol industry, and Aventine Renewable Energy Holdings is feeling the pain.  Furthermore, corn-derived ethanol is a costlier means of production than sugarcane-based ethanol.  AVR will take yet another hit with the rising cost of natural gas.  But most importantly - ethanol is a scam - while the finished product is cleaner than oil, the production process is anything but environmentally friendly.  In summation - short Aventine Renewable Energy Holdings!

The Bears: Government Subsidization, Made in the USA

While ethanol may be a scam, government is pouring a lot into the ethanol industry, because the finished product can be marketed as "green" and, being corn-based, it can be produced readily on U.S. soil.  While gas prices continue to soar, more and more money will be pumped into the ethanol industry, at least until people wise up to it' faults.  Short-term money to be made here.