Tuesday, January 29, 2008

Peak Oil "Reprise" and a Real Energy Policy

I try to sidetrack myself with Georgia Tech basketball, golf, fly-fishing, economics, books on the civil war, and any other hobby which I may indulge....however, those of you who know me best will not be surprised to see I am back on the subject of peak oil once again. I simply can't get it off my mind - I can't shake it!

Last week, we had the second CEO of a major oil company (Royal Dutch Shell's van der Veer; the first being CEO Jim Mulva of Conoco Philips) predict oil demand will outstrip supply by 2015:

These are unprecendented statements by a CEO of one of the world's largest oil companies! It was made even more surprising as they were spoken at the World Economic Forum in Davos, Switzerland.

Was anyone listening? Really listening and understanding the implications of this man's words? Neither in the State of the Union address last night, nor in the never-ending Presidential campaign do we here any of our "leaders" really address the issue of peak oil, let alone mumble the phrase "peak oil" out loud in public. In the words of the Grateful Dead, we're doin a "9 mile skid on a 10 mile ride".

Bush recently made a big deal request for his buddies in Saudia Arabia to "turn on the spigot". Of course Bush more than anyone but perhaps Cheney knows that the so-called "spigot" is already fully open and has been since we invaded Iraq. In fact, despite a massive drilling campaign the last 4 years, Saudi oil production in 2006 (and likely 2007) was not able to match their peak production reached in 2005. Basically the Saudis, like so many oil producers, are running to stand still. That is, it's all they can do to for their new oil-well production increases to match the declines of their tired old wells (3 of their largest reservoirs have reached "peak oil" production and thus their production is declining rapidly).

In addition to the two CEO's mentioned above, expert Houston oilman Matt Simmons, investment guru Stephen Leeb, and amateurs such as myself and Aaron Wissner (see the WSJ article on him a couple days ago) are making efforts to educate our leaders and policymakers. That said, I can definitely say that my efforts have so far fallen on deaf ears.

I first tried contacting the members of Congress and the Energy department. I got polite responses, but no agreement (and no debate). Last week, I adopted a new strategy. I sent emails to Warren Buffet, Bill Gates, the "Google Guys", and former GE CEO Jack Welch (through his Business Week column). Each of these people are well respected on Wall Street and have announced very large charitable foundations to help mankind in some capacity. I made the argument that all their iniatives would likely fail if the biggest threat to mankind (peak oil) was not addressed in an urgent manner. I was asking nothing for myself. I was asking them to use the power of their name recognition, their easy access to government officials at all levels, and yes, their money to help the US media and government understand the nature of the challenge facing us. I also listed the basics of my energy policy, wish should begin immediately:

1) Government incentives for a massive buildout of wind, solar, and nuclear energy.
2) Government incentives for auto companies to design and manufacture electric and other non-gasoline powered automobiles with high range capability.
3) Immediate punitive taxes on all gas guzzling cars and trucks (Hummers, SUV's that get 11 mpg, etc), with the revenue going directly to 1) & 2) above (not to Congress).
4) Buildout of the infrastructure to deliver energy to non-gasoline powered transportation, including massive research, development, and manufacturing of battery technology.
5) Federal government assistance to support either COP's or TransCanada's proposal for a massive natural gas pipeline from Alaska through Canada to the midwest US gas hub.
6) The ethanol initiative should be rolled back - it is a misguided policy. First, it takes quite a bit of energy to produce ethanol. Second, it takes huge amounts of water, which we are increasingly at supply risks due to the effects of global warming on large areas of the continental US. Lastly, it is causing large inflation in food prices. A bad policy all around, but what Bush policy isn't?
7) STOP the huge tax breaks given to the oil companies that are keeping the price of gasoline in the US artificially low. This is insanity and must stop now.
8) Lastly, and most importantly, we need the US media and US government to be as knowledgable and conversant about peak oil as they are (finally) about global warming. The solutions to address peak oil are also the solutions to help address global warming. The difference is in the urgency. Peak oil is far and away the most urgent threat to human civilization. The media and government need to be educating the American public at large about the issue so we can get the public mandate to use government funds to address the issue. The money needed is far too large to address the problem without the involvement of the government.

I got no response except from Jack Welch, who would only agree that we need to build new nuclear energy plants. Who knows if the underlings who read these people's email even forwarded them up the ladder. I doubt it.

I still bombard the WSJ, Business Week, local and national news papers with my opinions on peak oil in the hope that somewhere out there, sometime soon, a person of fame, national exposure, and respect on Wall Street will begin the effort of preparing our nation for what is coming. I rarely even get my letters published. Lord do I wish I was a billionaire. I'd buy the USA Today, publish only articles on energy (with colour photographs of nude women) and give the papers away for free.

Sure, the world will continue to produce oil after 2015. However, let no one fool themselves, the production at some point around that year will fail to keep up with demand (I actually think it will be sooner than 2015, especially when I saw the cheap car TaTa Motors is making for the Indian market) and the price of oil will just sky-rocket. No country is more at risk than the US due to its inefficient cars, lack of mass transit, and a suburban lifestyle based on these inefficient gasoline powered automobiles which must travel large distances for work, food, and day to day life.

So, I spend alot of time wondering why the government is not addressing this issue. Could it be I am wrong about it? I have been wrong before (once I think). Oil production data is not that complicated an equation. The theory of peak oil has been proven in Alaska's Prudoe Bay, the North Sea, the huge oil reservoirs in Texas, Oklahoma, and the Gulf of Mexico. The man credited with the theory of oil reservoir peak production correctly predicted continental US oil peak production (Hubbert predicted in 1956 the US would peak out in 1965-70, which it did):

Sure, there have been two "elephant" fields in recent years: the Jack well (Chevron, CVX) in the Gulf of Mexico may have as much as 15 billion barrels of oil. That said, it's located 5.3 miles below the surface of the sea and far away from existing pipeline infrastructure. The other monstrous find (estimated to be 8 billion barrels of light sweet crude) was discovered by PetroBras (PBR). But before we break out the chamagne, realize this find is 155 miles off the coastline and 4.5 miles below the surface of the sea. To reach the oil, Petrobras will have to run lines through 7,000 feet of water and 17,000 feet of rock, sand, and salt.

These two elephant fields are one of a handful discovered in the last 30 years. However, by the time they are brought online they will be needed just to meet the decline of the fields currently in production. Meanwhile, demand from China, India, Russia, and the middle east will continue to ramp up.

Currently, the the US's own EIA predicts worldwide oil demand of 135 million barrels a day in the not to distant future (currently, world demand is approx. 85 million barrels a day). Yet, two oil major CEO's have doubted if man will ever produce more than 100 million barrels a day.
The question I have is where is that other 35 million barrels A DAY going to come from?

I must be wrong since the issue is still underneath the radar of our "strategic thinkers" in Washington. Yet, no one has made an argument to me other than "well damn Mike, if we could just drill in Alaska and off the coast of Florida and California we'd have all the oil we would need for decades". Sorry, that is just so much BS and all one has to do is look at the data. I won't despute that oil exists in those locations. What I will debate is that their impact is in the low single digits as a percentage, and won't impact the overall trend of peak oil, nor the day of reckoning one iota. All it does is produce false hopes and again delay us in addressing the issue head-on with courage, determination, and yes, sacrifice. None of which attributes the people and government of the US seem to possess any longer. So, we la-de-da down the road and into the abyss. If ever I was wrong about something, I pray that I am wrong about peak oil and the effect on world civilization. That said, I am afraid I and other peak oil folks are dead right. Someone prove me wrong! Lord knows I could then concentrate on my next golf shot or landing my next trout without peak oil swimming around in my brain. OCD? On this issue, I'd hafta agree that I am.

Monday, January 28, 2008

Article on Geopolotics

here is the best article on geopolotics i have read recently (from the NY Times):

on a lighter note, the Jackets won at Virginia in overtime as Matt Causey again comes to the rescue. tech is now 10-9 & 3-3.

Thursday, January 24, 2008

Market Update: Two out of Three....for now....

Gold? A good pick, up $24 at the moment and above $900/oz.
Weak Dollar? A good bet, down 0.8% today after the huge rate cut. See:

Energy? A terrible bet (?). The energy stocks have been slaughtered in the last few weeks.

So, 2 out of 3....but time will tell.

For gold, I'm quite confident we'll see higher highs and lower lows as the cutting of US interest rates while inflation is strong should prove to boast the precious metal.

For the dollar, I still think it goes lower. The ECB, with memories of German's hauling wheelbarrow's of cash around Berlin, is still respectful of inflation and is thumbing their nose at the US "policy" maker's pressure for them to lower interest rates. So, the Euro should get stronger, the US dollar weaker, and the wheelbarrows should be sent across the Atlantic to us. Did anyone see my letter to the editor in Tuesday's Wall Street Journal?

For energy, the third leg of this strategy, now is the time to BUY! Look at Conoco Philips - great earnings yesterday, a PE under 10, A rated, and this stock is in the low 70's down from a 52 week high around $90? This stock should be at $100 and expected to earn $10/share in 2008. S&P has a $104 target. Oil services have likewise just been hammered. They are a screaming BUY! The sell-off in energy and energy services in the last few weeks reminds me of last year when oil went from what, $75 down to $50 (if memory serves) and all the talking heads on CNBC said oil was going back to $30 ("where it should be") and scared alot of investor's out of energy investments. Of course, during the rest of the year, oil went to near $100/barrel and energy stocks and funds averaged about 30% gains versus the S&P dismal 4% returns. The same scare tactics are happening now (although note that oil is remaining above $85 even in the face of the market selloff and expectations of a recession). So, HOLD your existing energy investments and BUY more. You will be rewarded.

As for the dollar, I keep wondering what will replace it as the world's reserve currency. Will it be the Euro? Interesting question. While reading an article in the WSJ yesterday about an agreement between Russia and Bulgaria to build another nat gas pipeline, I realized that Europe is about as energy dependent as the US and then the thought came to me: when will a resource rich nation with huge energy reserves take on the role of world reserve currency? Remember, one reason the US took over this role from the UK was the discovery of huge energy reserves in Texas, Oklahoma, California, and the Gulf of Mexico. I hate to say this, but we could well see Russia currency become the world's strongest as they are now the largest oil exporter and they have huge reserves of nat gas which they have already shown they will use to hold Europe hostage. Europeans are already complaining this year of nat gas energy prices being some 15% over last year. Will Russia turn out to be the cold war winner in the long run?

Regardless, I am 2 outta 3 so far....but I bet in a few months, I'll be 3-3 and batting a thousand.

!!! Jackets Win !!!

Georgia Tech's win over NC State last nite in Raleigh put the Jacket's record at 9-9 and 2-3 in the ACC. So why am I so excited when they have such a mediocre record? Because last night's game was exciting and the Jackets are finally "jelling" bay-beee! This victory over NC State at their house was the first for the Jackets in the last dozen tries.

The insertion of D'Andre Bell has picked up their defensive effort for sure, but the big surprise is the token white-boy, milktoast Matt Causey. Causey, a 5th year senior, is from Georgia and grew up watching GT basketball. He was not recruited by Tech out of high school, and he ended up at Georgetown University before transferring to North Georgia. After the Jackets lost their two freshman stars to the NBA last year, Hewitt brought in Causey to play at point guard. This is the story of a young man making the most of his dream come true: to play with the Georgia Tech Yellowjacket jersey at the Institute's Thriller Dome. He knows he is not going to the NBA, but he is a student of Georgia Tech basketball point-guard history and leaves his heart on the court every time he enters the game. He scored 30 against Virginia Tech the other night followed up by 18 last night against NC State. My favorite was a little spin move backboard shot after a behind the back dribble on a fast break. That said, the lob to Jeremis Smith and the subsequent monster tomahawk dunk was one for the ages! Oh Doctor!!

I just read on the Ga Tech website that Causey, who has no cartilage in his left knee, has overcome a dislocated kneecap, a dislocated shoulder and a dislocated jaw this year and has yet to miss a game.

After a miserable start, the Jackets are playing with energy, and there is a chemistry in the huddles during timeouts that just wasn't there earlier in the season. Hewitt is playing scorer Lewis Clinch off the bench, which took some guts as he set himself up for some criticism. But the defense is not doubt much better now, and all the kids are really enjoying themselves on the offensive end. They are beginning to play unselfishly, which is the sign of a team that wants to win at any cost.

So, can they make the NCAA's after such a bad start? I think they can. Look at their results this year against top-25 opponents (all loses, so far..):

L, 83-79, #8 Indiana (at Indiana)
L, 92-79, #14 Vanderbilt (at Vandy, ok, they looked terrible in this game!)
L, 71-66, #2 Kansas, they gave this game away with turnovers
L, 83-82, #1 at the time, North Carolina (Jackets with a last second shot to win the game)

The Jackets have proved they can play with anybody. They are now gaining confidence that they can close out a game and post a W on the board. I especially like how they played smart at the end of the NC State game, getting the ball into Morrow's hands who is 85% from the foul line. He sank 4 foul shots in the last 19 seconds to put the game away.

I guarantee you the teams within the ACC are very aware of the Jackets power. On the national stage, they are probably a well kept secret. Hopefully, the Jackets can keep posting wins in the ACC and work their way into March Madness. If so, they could surprise on the upside bay-beee!

Redneck Jokes

How do you know when you're staying in a Redneck hotel ?
When you call the front desk and say, 'I gotta leak in my sink,' and the clerk replies, 'Go ahead.'

Did you hear that they have raised the minimum drinking age for Rednecks to 32 ?
It seems they want to keep alcohol out of the high schools.

Two reasons why it's so hard to solve a Redneck murder . . .
1) The DNA is all the same
2) There are no dental records

Did you hear about the $3 million Redneck Lottery?
The winner gets $3.00 a year for a million years.

and finally, my personal favorite:

A State Trooper pulls over a pickup on Highway 16 and says to the Redneck driver, 'Got any I.D. ?'
and the driver replies, 'Bout wut ?'

'Bout wut?' har har har. i just love that one!
thanks to steve s.

Tuesday, January 22, 2008

The World Needs a New "Leader"

As I sit here recovering from feeding my wood stove through two consecutive 6 degree nights, I watch CNBC report on worldwide markets down some 5-10% while the US market was closed for MLK day. The Federal Reserve panic'd and cut the Fed Funds rate today by 0.75% as the Dow Jones opened up down over 400 points. Today's drop was *after* the Dow and S&P500 gave back ALL the slim gains of in the Dow and S&P500 last year. Meanwhile, gold is up to about $900/oz and the US dollar is weaker today by 0.7%. Both to be expected with the Fed cutting rates and turning on the printing presses in the face of inflation data which, if it could speak, would say "don't do that!"

How did we get into this mess? The economy doesn't appear to be in that bad a shape, and is officially still not in a recession (as defined by two consecutive quarters of negative GDP growth). Although the market looks ahead, discounting and anticipating the future, this recent decimation of equity values is somewhat unusual in the face of the economic growth rates seen in 2007. So, what gives and why are the world market indexes selling off so drastically?

The difference, in my opinion, is the loss of confidence in the US dollar, the top US financial institutions, and the current administration from both a fiscal and "policing" perspective.

I've already commented on the sub-prime fraud and the selling off of US financial institutions to foreign powers and the corresponding impact on the US dollar. But let's talk about the "policing" aspect of my argument. We have in the Bush administration one which is very well acquainted with spying and policing. Just look at the cell phone tapping, the "Homeland Security" department's iniatives, etc. etc. Yet, when it comes to policing the economy, they don't seem to have had a clue. Or, did they really understand it, and turned a blind eye? I believe the latter.

Many financial experts knew the sub-prime fraud was a disaster waiting to happen and were raising red flags two years ago. Pimco's Bill Gross, nicknamed the "Bond King", was warning everyone about sub-prime at the end of 2006. The secretary of the treasury surely must have heard him as well as most folks at the Federal Reserve where Bill Gross is an acknowledged big player due to the amount of bond assests under his management. So, why did the administration do nothing?

The reason, of course, exactly like the S&L disaster under Bush #1, is that they people involved in the sub-prime fraud were making huge sums of money. Not only that, the S&L crisis was "solved" by using the US Treasury, via the "RTC", to bail out the same people who made money stealing retirees S&L assets in the first place(!) So, the thieves made money twice. The same thing is going on now. The same banks and institutions which pushed CDO's to our Europeans "friends" and made huge comissions on trading these repackaged debt instruments will be bailed out by the Fed and make money again as the leverage unwinds and the low rates allow them to escape financial (much less criminal) disaster. Even the fired CEO's of the companies involved are walking away with tens of millions of dollars in severence for their ability to destroy shareholder value

So, why do so many middle-class Americans support Bush? It is a question I wonder about constantly because if you ask a Bush supporter, you never get an answer! Part of the problem is middle class people often seem to believe they are "rich" and that Bush is looking out for their interests. I would define middle-class in America as anyone with $5 million or less in assets. By comparison, the Bush crowd, the "ultra-elite", have net worths in the order of 100's of millions of dollars if not billions. They have the inside information on interest rates and government policies, as well as recipients of the lucrative financial loop-holes in the tax system in order to maximize their gains further without being taxed (hedge fund managers for instance).

The democrats, or any other anti-republican group, can't seem to convince the American middle-class that the republicans are NOT acting in their best interest. In fact, the middle class in America has been decimated by Bush economic policies. At the same time, the ultra-rich, again, those over $100 million in assets are raping the US treasury, making huge fortunes on the backs of the middle class taxpayers and savers. They then take Dick Cheney's advice and invest their fraudulent money into European municiple bonds, where I am sure most are planning to relocate to when the US finally sinks into the abyss due to their lack of fiscal discipline. And this by the so called "MBA" administration who used to preach to the Democrats about spending. Oh please.

When will the middle class in America wake up and understand they are being taken advantage of? Probably not until the distractions used by the republicans are ignored. Religion, gay marriage, the right to life and similar issues are used to sidetrack folks from understanding the real issue - your tax dollars and the US treasury are being stolen from you.

Foreigners understand this fact. The US dollar has fell 40% since Bush has taken office. Meanwhile, oil, gold, and most commodities which are priced in US dollars have sky-rocketed. It's too bad foreigners are more observent of US policies than the average American voter. So, the world needs a new leader. Who will it be?

The Law of Numbers:

Say the market is at 1,000 and it drops 10% to 900. Did you ever stop to think that the market must now recover MORE than 10 to get back to where it was (1,000). In other words, a 10% gain from 900 only gets you back to 990.

Tuesday, January 15, 2008

Stock Investment Dilution - Citigroup as an Example

Say you own 100 shares of Citigroup, and you bought it a few years ago. Your investment was probably based after considering such factors as PE ratio, earnings per share, debt, dividend yield and the company's earnings prospects going forward.

As we all know, Citigroup was heavily involved in the sub-prime fraud. I call it fraud, because when you have ratings agencies such as S&P, Moodys, and Fitch slapping AAA ratings on debt paper which then pays off at $0.20 on the dollar (if that!), something was definitely fraudulent. Anyhow, so now Citi (among many others) is in trouble and the stock has fallen from the mid 50's to the high 20's. Ouch. We find out today that the company is laying off thousands and cutting the dividend, which could be expected.

What bothers me (other than the fraud, the Treasury dept. "looking the other way", and the subsequent bailing out of the Wall Streeters by lowering interest rates and deep 6'ing the US dollar) is how Citigroup is now raising money by selling preferred securities (private offerings) to the government of Singapore, a Kuwaiti investment group, Saudi Prince Alwaleed bin Talal, and others. This is all legal so long as the board of directors approves.

Even though it's "legal", what about the poor bastards I described earlier that bought Citigroup a few years ago taking common investment considerations into account? Haven't their investments been diluted by the issuing of the preferred securities? Of course they have! Were they given a chance to subscribe to these securities - the press releases say so, but the truth of the matter is that the offerings were over subscribed even prior to the press releases, so in reality, the common "joe-blow" on the street had no chance to get in on the same terms.

Just another example of Wall Street shananigans that increasingly are putting the individual investor at a disadvantage. Think this doesn't affect you? Well, it does if you own mutual funds which own Citigroup and the other companies that are behaving similarly.

Sunday, January 13, 2008

The Market so far in 2008

Last week was the third straight week of declines. So far in 2008, the Dow has lost 6.3%, the S&P 500 is down 5.6% and the Nasdaq has fallen 9.4% (its worst run in more than five years).

This means the market has given back all the gains made in 2007, and then some, in just 3 holiday shortened weeks.

The dollar continues to weaken further. No surprise there considering the twin deficits and the Federal Reserve easing interest rates while inflation is rising. Gold is just about the only investment (other than shorting the dollar or going long the euro) that was up since New Year's Day, and depending on what gold investment you hold, substantially up. It jumped over $10/oz the other day just as Bernanke was explaining the need to ease US interest rates and crank up the printing presses.

Oil, and oil stocks, are holding up fairly well considering the general tone of the market and that this is the time of year where refineries transition from heating oil to gasoline. Expect expensive gasoline this spring and summer driving season! Oil service stocks have been hammered recently and are a screaming BUY. Earnings season will be in full swing over the next 3-4 weeks, and expect the oil service companies to shine brightly (yet again). Day rates for some offshore rigs are running as high as $600,000/day. Natural gas has been very strong lately, which is interesting because this is the time of year natural gas inventories are perceived as being sufficient to supply the remaining winter demand. That said, the energy equivalent of nat gas has fallen way behind that of oil, and the relationship appears to be correcting itself despite inventory data.

Does NASA engage in Story-telling?

you have to watch this!

i love it that the NASA spokesperson never addresses the questions posed, but just slufs them off as "bad science" .... hahaha, his lack of explanations do as much to prove the point as if they said nothing at all.

thanks to brian for this. if true, it ranks up there with JFK, electronic voting machines, and manipulated iranian gunboats issuing threats (without hearing their outboard motors....)

full disclosure (Moon Hoax Busters vs. Hoax Believers):

this site has explanations of many if not all of the Hoaxer's proposed theories. great stuff.

Thursday, January 10, 2008

What is a "Conservative Republican"?

Back when I registered to vote (1977), the "solid south" was solidly Democratic and "conservative republicans" (small letter "r") were actually conservative. At that time, I considered myself a "conservative republican" and registered to vote as such. Boy, how times have changed. What has happened to "conservative republicans"?
The definition of a "conservative Republican" (cap letter R): A person who believes in the following: small government and free enterprise; the individual protections and liberties guaranteed in the US Constitution and Bill of Rights; the separation of church and state; fiscal responsibility, low and fair taxes, and balanced budgets; a strong military and a firm and fair foreign policy which respects the rights of sovereign countries; free and fair trade; using our natural resources for the benefit of the country but whom also believes in leaving a healthy environment for their children and the generations to come; that America is only as strong as its broad middle class.
Well, there's the problem right there - this definition no longer applies. Let's examine each aspect of a traditional "conservative republican" and see if Bush qualifies:
1) A person who believes in small government and free enterprise. Hmm...small government you say? President Clinton, in his 8 years as President, reduced the size of the US government to that of the Kennedy administration. He did this using computers and office automation to upgrade the government's beauracracy, reducing the number of Federal employees in the process. As a contrast, the 7 years of the Bush administration has seen a huge increase in the number of Federal employees. If one counts Federally bank-rolled private contracting firms, the number is even more astounding - by far the largest size the Federal government has ever been. This is not due to simply growth in "Homeland Defense", but is across the board. Unfortunately, education and infrastructor did not participate in the growth. Not only has the government beaurcracy grown, but it was decided early in the Bush years not to pay for the growth, a nice present for our kids and grandkids. So, in this regard, who was more like a traditional "conservative Republican", Clinton or Bush?
2) Individual protections and liberties guaranteed in the US Constitution and Bill of Rights. Hmmm....let's see...The Bush government now has the right to listen to your phone calls and get your complete calling history from your phone company. The Bush government is using the GPS systems in our phones and cars to track our geographic movements. The Bush goverment can now torture. Cameras are deployed in all major US cities watching our every move, with advanced imaging software linked to huge tracking databases. A global individual rights watchdog group's 2007 report put the US in the same group as Russia, dead last. This group listed their biggest concern to the fact that Congress is debating "ID cards" (similar to the ones the UK is issuing in Wales) which will potentially have photos, finger-print, and perhaps DNA information on them. Their concern is that these cards will be manditory to receive the simplest of services. The US Justice department is apparently no longer a seperate branch of government, but tied directly to the bequests of the executive branch. And, a person in Florida was recently tasered by a policemen for having the unmitigated audacity to exercise his rights of free speech by asking John Kerry to explain his ties to the Skull & Bones club at Yale (which of course the Bush family is tied to as well). And, the ultimate blow to "freedom" was the introduction of the electronic voting machine, which the state of California (thank God someone was paying attention!) labelled as the ultimate killer of democracy and declared them unlawful in that state. Unfortunately, not many other states have followed suit. So, is Bush really a "conservative republican" in the traditional and historical sense? Absolutely not. 1984? you bet, except Orwell was 20 years too early.
3) Separation of church and state...Hmm...let's see, we have elections focused on silly issues of abortion and gay marriage instead of the real world-class issues. We have priests, ministers, and rabbis speaking from the pulpit and telling their congregations who to vote for. We have tax breaks for churches, but only for certain religious affiliations. We increasingly have the "religious right" lobbyists controlling Congressional policy and screening our Supreme Court justices. Here we have a country (the US) formed by immigrants fleeing from European religious persecution specifically writing in our country's founding documents that church and state be kept separate. How ironic that Europe, who has gotten over "religion", now gazes across the Atlantic wondering what the hell happened to America? So, are Bush and the "conservative republicans" really that wrt to separation of church and state? Absolutely fact, they use and abuse the ignorance of the religious right to get elected. As an aside, I personally see nothing "Christian" about the Bush/Cheney administration...that is, if you compare the actual writings of Christ with the actions and policies of the administration. I am constantly flabergasted at how so called "Christians" can be so ferverntly pro-Bush. I'd rather they'd be atheists and despise him!
4) Fiscal responsibility, low and fair taxes, and balanced budgets. Hmmm...we have by far the largest fiscal debt in the history of the country. And I don't buy this argument about debt as a % of GDP. Hogwash, you still have to finance the debt regardless of the % of GDP! The Bush fiscal and budget policies are a disaster. We have hedge fund managers making $500 million per year who have specific loop holes for them to escape taxation because they are "entrepeneurs" and "create jobs". BS. Despite the spin, I love to quote Jack Nicholson in the classic movie Chinatown: "You can read the papers, listen to the news, and watch all the TV ya want, but if ya wanna know what really happened, follow the money." Well, the money during the Bush years has gone to the Wall Streeters and his political "friends" in the utility, oil, timber, and financial industries. We have a sub-prime fiasco that sent the financial stocks on Wall Street soaring and the bonus and salaries of the CEO's to the moon. Now, we see the stocks falling, the CEO's laid off, and calls for a government bailout. But guess what? The CEO's already got their payoff (and CNBC wants us to feel sorry for them?). So did the friend of Cheney in Louisiana who got paid $80,000/month for a 2 acre plot of swampland to store the FEMA trailers (all the trailers were destroyed in a flood by a typical LA afternoon rain). Follow the money? Well, you must leave the country as the dollar has dropped 40% since Bush took office. We are FULLY dependent on the Chinese to buy our bonds to finance the debt, which they are willing to do...for now at least. What will happen when the percentage of Chinese exports to the US becomes less and less? Will the Chinese continue to buy bonds of a sinking currency? What happens when the US then has to raise the interest rates on these bonds to get buyers? Hmm....will "old Europe" buy the bonds? I think not..they just bought AAA-rated (thanks S&P, Moodys, and Fitch!) sub-prime debt only to find out its worth what, 20 cents on the dollar? I don't think the European central bankers will be willing in the future to bail out Wall Street at the expense of their own citizens' savings. Follow the money..well, Bernake now has to lower interest rates in order to bailout the Wall Streeters (very reminiscent of Bush #1 and the savings and loan disaster, don't you agree? the "RTC" or "resolution trust corp" was used then...and there was nothing about that to "trust" let me tell you...) and the Federal Reserves printing presses are working over time. Meanwhile...oil is over $90 a barrel and milk, beef, and wheat prices are rising quickly. The Chinese and Arabs are buying off huge chunks of America's biggest banks and financial institutions (who btw have all your financial information in their databases). What do the Bush policies have in store wrt inflation? Inflation is going to roar like a caged Tiger while Bush forces Bernake to cut rates. Why do you think gold is close to $900/oz today? Hmm....this is NOT conservative republicanism. Not by a long shot.
5) A strong military and a firm and fair foreign policy. Hmm....well, our military is strong wrt to advanced weaponry, but that's always the case in a military industrial society like ours. That said, is the military strong when tour duties in Iraq are double and triple what they are supposed to be? Is our military strong when we have "free-enterprise" companies like Blackwater operating in Iraq *outside the chain of command of our own military*? Is this even constitutinal?? Is our military strong when we create wars and then rush in without the number of troops our leading Generals say is required to do the job correctly? Is our military strong when our retired Generals take the unprecedented step of speaking out against the current commander-in-chief raising serious questions about intelligence, management, and overall strategy? Is our military strong when we start out to capture bin Ladin, have a marketing job pulled over our heads to begin an unnecessary war, with the result that Bush's family friend bin Ladin goes uncaptured? I wouldn't be surprised if Osama is somehow captured right before the upcoming Presidential election....What kind of foreign policy do we have that drives countries like Iran to develop nuclear weapons? Hell, if I was President of Iran, and I saw how the US has destroyed Iraq, I would sure as hell be developing a nuclear warhead! I remember when a Brazilian citizen was recently asked to comment on Petrobras' huge off-shore oil discovery. The Brazilian declared "I wish Petrobras would quit finding so much oil - soon Bush will invade!" And, although I laughed, this man was NOT laughing. He was dead serious. But it's not only the Arab countries we have pissed off, it's also "old" Europe and the rest of the world. It is fair to say, and I have travelled all over the world, under Bush, the US has gone from one of the most admired (if not THE most admired) countries on the planet to the most hated country, and the country most recently polled as the most "terroristic" country on the planet by the rest of the civilized world. Is this "conservative republicanism" policy? I think not. It is fascist uni-lateralism.
6) Free and fair trade. Bush is certainly for free trade, but let's examine the policies. Unfortunately, the largest component of the trade deficit is oil. Oil is over $90/barrel enriching Bush's friends the Saudis, but also enriching the entire Middle East and Russia, causing Putin to flex his country's muscles, and why not? Russia, fueled by its oil and gas resources, is ascending while the US is in decline. But, do our trade policies deal with the oil issue head on? If one were to look at the recent Energy bill that was passed, the answer is definitely not. Peak oil is the largest threat to our economy and our way of life, yet the Bush administration buries its head in the sand, offering ethanol as a solution. All ethanol does is increase the price of wheat, corn, chicken, and beef - prices already heading upward as a result of the weak dollar. Is this considered "conservative republicanism" trade policy? No, it is not. But at least the oil executives are getting filthy rich.
7) Natural resources used for the benefit of the country. Hmmm...let's see, the Bush administration opened up *public* BLM lands for the benefit of his buddies in the timber and mining industries. No open bidding, just treasures by decree. Bush denied global warming for the first 6 years of his term. Bush even wanted to open up Rocky Mtn Nat. Park for oil and gas exploration as his solution to the "oil problem". Meanwhile, Bush rolled back the only good thing Nixon ever did (Nixon established the EPA and as a result, clean air and water legislation) by allowing coal burning utilities lessor air quality standards so his buddies in the utility industry can make more money while Americans get to ingest mercury in our water and in our seafood. Meanwhile, he puts a buddy from the chemicals industry in charge of the EPA's clean water division, and another buddy from the utility industry in charge of the EPA's clean air division. After California, frustrated with the EPA's lack of leadership, finally legislated their own clean air standards, Bush's Justice department declared their legislation unlawful as it is the EPA's domain! Imagine, the EPA suing California for wanting clean air?! No wonder Arnold said the EPA should be renamed the EDA, or, "Environmental Destruction Agency". Is this record on the environment typical of conservative republicans? Perhaps it is... historically... but today, with the knowledge we have about pollution and technology, who can consider these actions in the best longterm interest of the American people? Again, the policies are a complete failure.
8) Lastly, America is only as great as its broad middle class. Well, this is the bottom line on how to judge the Bush administration over the past 7 years, and the verdict is in: the middle class in the US has just been hammered. Sure, unemployment is around 5%, a historically low number. That said, the percentage of high paying manufacturing jobs has plunged while lower payer service economy jobs have increased rapidly. Senior citizens who rely on social security checks are losing ground fast as the SS inflation adjustments as fudged by the Bush economic team don't come close to keeping pace. Imagine a 2 percent increase in SS checks last year as oil went up 57% and food inflation was roughly 6%. Meanwhile, the "Bush tax cuts" were aimed squarely at the 0.01 percent of the richest Americans, while Joe-blow will get stuck with the tab for the sub-prime bailout of the Wall Streeters and for the two wars we are waging. Americans who do the right thing and save money, must be very vigilant. A CD earning 5% doesn't look so good when the dollar is dropping 7%/year, real inflation is 4-6%, and taxes take out another %. In reality, an American earning 5% on a US dollar denominated CD is actually LOSING about 7%/year in purchasing power. All this said, the worst brunt of Bush policies won't be felt until he is out of office.
In conclusion, is Bush really a "conservative Republican"? The answer is NO. He is actually the most radical President in the history of our country. You could make an argument that Bush's radical policies have done more to weaken the overall strength of the United States than any other President in history, and you would be correct.
I am now a registered Democrat, but I yearn for the days of old and REAL conservative Republicanism. Its a sad day in America when political hypocrisy on a national level can not only take place but thrive!
What's the solution? Actually, I wish the United States would go to a 3 party system, but it will never happen since the two (broken) parties are in ca-hoots to prevent it. So, we are kinda hosed unless a Lincoln or a Kennedy comes along (wait, those two guys were shot weren't they?)
If I were President, here's what I would do beginning day one by telling the American people about these changes, getting their support, and driving the legislation through Congress:

1) Anyone not elected by the American people (yes, that means the lobbyists) are not allowed in the House or the Senate chambers when they are in session. Period.
2) Begin a massive buildout of wind, solar, and nuclear energy and the infrastructure to deliver this electricity to alternative powered automobiles and other mass transit.
3) Stop making war to steal oil.
4) Make a case for raising interest rates and let the banks and Wall Streeters take their lumps.
5) Balance the budget and together with 4) above restore the value of the dollar.
6) Rip up the tax code and start over. It will be fair, and people making over $1oo million dollars a year will get taxed at higher rates!
7) Separate church and state. Speak of it. Live it.
8) Restore the 3 branches of government and the integrity of the US Constitution and Bill of Rights. Educate Americans from the Presidential pulpit and remind them what the Constitution does and does not allow.
9) Govern and tax by a very simple rule (Spock's rule from Star Trek): The good of the many outweigh the good of the few.

That would be a good start at implementing real conservative Republican ideals. Don't get me wrong, I am a Capitalist, and I am for wealth creation. But when the government is used as a fascist tool to rape the US treasury of the majority for the benefits of a small group of the power-elite, the long term result can only be tragic. We need change and we need it now. I can only hope that the US can recover from the two terms of George W. Bush.

Wednesday, January 9, 2008

Primary Colors

Obama wins Iowa with Hillary 3rd (yippee!). Although Hillary wins NH, and Obama comes in 2nd, he gets the same number of NH delegates as Clinton.

After the win in mostly white Iowa, rumour has it the black religious leaders in South Carolina and Atlanta who previously were backing Clinton are abandoning Hillary as they now feel Obama actually has a chance to win a national election.

Ron Paul almost gets as many votes as Giuliani, but no delegates. (Is it true that all of Giuliani's sentences have a noun, a verb, and 9/11?)/ Paul's speech after the primary was electric and his young supporters were full of energy. Ron Paul is the only candidate out there who seems to understand the long-term consequences of how the Republicans have raped the treasury and the dollar's 40% drop in value since Bush took office. He has no chance of winning I suppose, but you gotta love a guy who lays it all out for people to see. Young people are beginning to see the country they are going to inherit from the present war-mongering power elite in Washington.

Meanwhile, McCain rises from the dead to win NH on the Republican side. I believe his message of fairer taxes and fiscal responsibility rang true with the frugal Yankee state. Huckabee came in 3rd after winning Iowa. Romney came in second after spending more money than the sub-primers stole from European investors.

How ironic is it that the leading candidates' names are Obama (ryhmes with Osama) and Huckabee? Can you imagine being introduced as President Huckabee? Sounds like a character out of a Mark Twain story.

Tuesday, January 8, 2008

LSU 38 Ohio State 24 (So sorry Mom)

After scoring the first 10 points of the game, Ohio State wilted as LSU came roaring back to make the game a laugher. Just as last year when Ohio State ran the opening kick-off back to lead Florida 7-0, Ohio State took an early lead only to see the highlight film stop after the first quarter.
With respect to the debate about the best football conference in the land, this debate is officially OVER. Bowl records:

Big 10 5-5
SEC 7-2

The only ray of light for Big 10 fans was Michigan's 41-35 win over the Florida Gators(congradulations Frank!). If not for the multitude of Michigan turnovers, the margin of victory in this game would have been much greater.
But alas, SEC teams LSU and Georgia end the year #1 and #2, and OSU falls to #5.

As my LSU grad neice said the other night to my mom, "what is a buckeye anyway?" She was extremely puzzled on the response and said "how can LSU possibly lose the game when their mascot is a powerful fighting Tiger and Ohio State's was some kind of nut?"

Thursday, January 3, 2008

It's Official - $100/barrel Oil

Yesterday, a single contract (1,000 barrels) of oil was traded at $100/barrel. That said, the word from the pits was that a particular trader wanted to make history and that this trade was somewhat suspect. I'm sure he's one of those Italian body-building trader types that wanted to have the biggest boast at the pub in Manhattan where these boys go to drink off the stress of trading and pick up chicks.

Today, however, $100/barrel oil crossed the electronic trading ticker, and that means it is for real. Still, all the talking heads on CNBC and other media keep saying that oil must fall back to $40/barrel or some other ludicrous level which they feel Americans are entitled to.

For year end tax reasons, the large integrated oil companies do let inventories dwindle, as today's EIA report showed (4 million barrel draw down). So, it would not be a surprise to see oil come down a bit in the next couple months as they increase inventories to prepare to ramp up gasoline refining for spring. Remember, last year there was a huge shakeout (oil dropped to $50/barrel in the first few months of 2007) in which the faint of heart got rung out and then oil ran toward $100/barrel the rest of the year. All this said, prepare for $4.00 gasoline this spring as worldwide oil inventories are below the 5 year average, especially in the US & Japan, while worldwide demand continues to be strong.

The talking heads on CNBC seem to be pinning their hopes on the new Saudi field which is expected to produce 500,000 barrels a day and start in the first quarter this year. However, folks like myself who believe in peak oil wonder if this new production will be able to make up for the declining production in the 2 or 3 huge reservoirs in Saudi Arabia that have apparently reached peak production and now are in precipitous decline. Remember, Saudi production peaked in 2005 and they were not able to match that level in 2006 or 2007 despite a huge drilling initiative. Perhaps they can in 2008 it sure will be very interesting to keep an eye on. Of course the next question is, even if they do introduce some "spare capacity", will China and India buy up the oil as quickly as it fills up the tankers?

Meanwhile, oil & gold stocks continue to rally and the dollar continues to weaken. This trend should continue when the Fed cuts interest rates yet again to bail out the sub-primers on Wall Street.