Seeking Alpha

Gregor Macdonald

View as an RSS Feed
View Gregor Macdonald's Comments BY TICKER:
Latest comments  |  Highest rated
  • What's the U.S.'s Energy Policy? [View article]
    People still use hoary phrases like "Big Oil"? How quaint. How thoroughly out of date. Really, it's very charming. It's like listening to dinosaurs debating Soviet Communism vs Western Capitalism.

    There is no Big Oil. The western oil companies are now midgets. They are in liquidation. They are irrelevant.

    Gregor
    Sep 11 12:14 PM | 14 Likes Like |Link to Comment
  • As the Oil Age Ends, A Return of the Canal and Rail Age? [View article]
    Is it your view that we make discretionary energy-use choices? My view is that history is quite clear on this matter. We do not make discretionary energy use choices. We choose from what's available, and most importantly we choose the source with the highest energy density. You think we would exercise discretion to move away from super high energy-density oil, were it not becoming more expensive in real terms (because of peak oil?). There is simply no precedent for discretionary rejection of a cheap energy source. But go on. Do explain.

    Gregor
    Mar 24 03:06 PM | 7 Likes Like |Link to Comment
  • As the Oil Age Ends, A Return of the Canal and Rail Age? [View article]
    "To suggest we are going to go back to a coal age."

    Could you please explain why that is a ludicrous assertion?

    I define a return to a coal age as a return to a time when coal is the number one supplier of energy to the world. Could you address my assertion, on that level?

    Question: I assume you are aware of several hundred years of energy use data, including the last 60 years, and the last 20 years. So you might reference this in your response. Thankyou.

    Gregor
    Mar 24 03:00 PM | 6 Likes Like |Link to Comment
  • Oil Supply: As Russian Production Tops Out, World Supply Will Continue to Slip [View article]
    <i>MacDonald seems to be feeding some kind of agenda-driven purpose rather than any connection with reality</i>.

    Thanks Freddy. I was wondering if you could do the audience a favor: since you regard natural gas liquids as oil, you simply go on record as stating "I Freddy Hutter regard natural gas liquids as crude oil, and do so in all my analysis and data." I think this would clarify for people where you are coming from.

    Best,

    G
    Sep 13 05:30 PM | 6 Likes Like |Link to Comment
  • Perhaps There Are Unseen Green Shoots [View article]
    We may very well come to an of end to this recession-depression, on a short cyclical basis. Possibly for a period time even up to a year. However, there are deep structural, demographic, and energy-supply issues that are totally unique to this juncture in US history that foreclose upon any sustained recovery. It's terrible, and I wish that were not the case. On a 6-12 month basis, I don't wish to argue with ECRI's work. I too see a relief period that would largely be marked by a lower dollar, a boost to agricultural and light manufacturing exports, and some inward investment. However, the twin limitations of interest rates and energy supply (oil) are waiting for us, any time we attempt to emerge from the hole. And that does not even mention the overall crushing nature of the aggregate debt. What you can have therefore is a replay of the January 2007 to July 2008 phase, where exports advance and BRIC is doing well--but US housing, autos, and the FIRE economy (the debt creation economy of finance, insurance, real estate) continues to contract. And when I use the word "contract" I'm being generous. If such a scenario played out, we would crash once again in Summer 2010, in car-crash of higher interest rates, a massacre in commercial real estate, and higher oil prices. Not to mention a potential debacle in government debt, and, the usual policy mistakes from both the FED and the federal government--who are now making mistakes not on a large level but on a scale that is truly awesome.
    Jul 19 11:26 PM | 6 Likes Like |Link to Comment
  • Why We're Nowhere Near a Bottom in Housing [View article]
    Thanks for all the comments. I think I am obligated to acknowledge, additionally, that the relentless downward trajectory of housing prices is incredibly painful for the country and for many people. As such, essays like mine will often draw a vehement, critical response. However, as a wise man once told me, that which you know may hurt you but that which you don't know may ruin you. I think that it's best we face up, therefore, to the fact that there will be no recovery in US housing to the previous price level. Once we get through it, however, towards the end of this decade, then housing will once again regain its utility value as a place to shelter, run a small business, store capital, and grow a garden. If you ponder this, for a while, it's not a sad prospect but in fact its a happy one.

    There are already cities, like Portland OR, Totnes, UK, various places in France, and Canada, and elsewhere in the US where buying a house in the next 24 months will give the owner enough utility value to offset any further declines. Temperate climes and/or fertile soils and also an aware local populace will be very good things to optimize for. That's what I intend to do.

    Best,

    G
    May 18 07:44 PM | 5 Likes Like |Link to Comment
  • Case-Shiller Still Predicts Massive 45% Fall from Today’s Values [View article]
    The American house no longer offers the owner an upwardly volatile call option, on robust future wage growth. Peak oil and global wage arbitrage are a big part of the problem.

    Consider this, even without the bubble--the biggest housing bubble in history--there would still be an adjustment owing to our hollowed out manufacturing economy, and poor education trends.

    The US house is no longer something special. But, it remains priced like it's special. If you own anything above 350K you should be prepared that, despite your good schools and nice neighbors, there simply will not be enough economic activity in your local metro area to support the required quantity of buyers, to purchase alot of higher priced homes.

    Not sure why people don't get this but a general rule is as follows: people rarely understand large systems. Their field of vision is more limited to a local view.

    G
    Nov 27 02:00 PM | 5 Likes Like |Link to Comment
  • Global Hydro and Nuclear Power in Perspective [View article]
    Poor people use coal. The world is getting poorer. Oil has peaked. Thus, the future is obvious: a return to coal as the world's primary energy source, with tiny, marginal additions from hydro, solar, wind, and nuclear around the edges.

    I know. It's grim.
    Oct 17 12:54 PM | 4 Likes Like |Link to Comment
  • Global Hydro and Nuclear Power in Perspective [View article]
    French use of nuclear cannot be scaled up or used as an example for what the whole world can do. In other words, France is now a nuclear outlier, and will remain so.
    Oct 17 12:52 PM | 4 Likes Like |Link to Comment
  • Global Hydro and Nuclear Power in Perspective [View article]
    I'm not aware of any previously expressed enthusiasm for NG. My position is neutral: I am skeptical of claims that Shale NG is a crappy resource that offers little prospect for new supply. And, I am skeptical that we can transfer large demand loads from, say, oil based transport to NG. In other words, I don't accept the high or the low case for shale NG. I simply agree that it's there, it's available, and it's part of how the US is about to have the highest NG production in 2010 since 1974. Not quite, but very close, to an all time high.

    HTH.

    G
    Oct 17 12:44 PM | 4 Likes Like |Link to Comment
  • Energy Watch: Solve for California [View article]
    Thanks for all the comments.

    There's an enormous amount of research that I have done, that sits behind this brief blog post. The annual cost to the state budget and to the state's productivity and air quality caused by the automobile-oriented transport system is gargantuan.

    I very much enjoyed user 353732's social stratification comments.
    seekingalpha.com/artic...

    Indeed, I think it's fair to say that the wealthy elite of CA control alot of the real estate through which rail would run, and, they love to promote green and climate slogans but neither want to have their own cars dislocated, nor think very much about doing the same for the State. In short, they like policies that green-up the power grid as it will affect their lifestyle "less". Or so they perceive. I suspect this is why the Sierra Club is much happier to address emissions of buildings, than California's 33 million vehicles (all vehicles). The Sierra Club does not want to irritate the elite.

    I remain amused the whole EV solution idea. CA is already importing more of its electricity than any other state (as a % of the whole) and it has to use a huge amount of that simply for Water Conveyance and Treatment.

    But look what happens when you try to build a Utility Grade Solar plant in a CA desert. Uhhm, that's not a "Republican" senator that stands in opposition to that.

    Thanks for all the great comments!

    G
    Nov 19 11:02 PM | 4 Likes Like |Link to Comment
  • What the IEA Doesn't Want You to Know About Peak Oil [View article]
    Extremely well done. I will be mentioning this excellent piece liberally, to my pals. Keep it coming.

    Gregor
    Sep 7 09:00 PM | 4 Likes Like |Link to Comment
  • Global Sovereign Bond Watch: Overstuffed Supply [View article]
    I agree with Bookkeepers remarks. I don't know if Bookkeeper agrees with mine. It's also possible I could have used different terms to transmit my views, thus getting closer in agreement to Bookkeeper's perspective.

    However, I suspect that bookkeeper and are asking the same question: in a world where cash itself has been dislocated and may see further dislocation, does one become more concerned about holding non-cash assets. Or less? In a world where the "capital-potential" of all assets including cash comes under question, what to do?

    I assert that since WW2 we have all lived in an era where the income stream behind senior sovereign debt was rarely if ever in question. The only real question in senior sovereign debt in this era was inflation risk. Not repayment risk. In addition, this era has also been marked by currencies that have only had to deal with the same questions, of inflation or deflation.(There are indeed OECD examples that don't conform to this view, but I will leave them aside for now).

    For two decades you could have heard me say "I don't ever want to live in a world where paper money in the OECD becomes such a problem that holding gold becomes preferrable. Moreoever, I certainly don't want to live a world where industrialism comes under such enormous pressure from financial system issues, that gold mining, a worthless human endeavor, becomes not only profitable but a sector with a bright future."

    I think we are living in that world right now.

    I agree with bookkeeper, using his/her term of "capital-potential" that such potential continues to bleed away from physical assets with real value. However, in a world where the store-of-value is now bleeding away from cash and sovereign bonds, then perhaps we should make a grand leveling and ask anew where is there store-of-value?

    Gregor

    Jan 30 12:38 PM | 4 Likes Like |Link to Comment
  • New York City Home Prices Are Headed for Collapse [View article]
    One of the most common analytical errors I see in my own work, which concentrates on the global oil market, is that people generally do not understand how the dynamics of very large systems work. All your points about NYC real estate are valid--but--what you don't seem to understand is that the system is much larger than all that. Given the massive, broad, structural condition of this market, your points are simply not enough to move it opposite to the facts which Keith outlines in his piece.

    Look at it this way: look how well the NYC RE market is still holding together despite the structural forces placing pressure down upon it. What that should tell you is that it's hard to turn these systems in a hard way, in either direction. The problem is that the array of structural pressures on this market are all pointing down. Even if your points started to emerge, there would be several years of flat and chop in this market. At the very least, certainly you can see no upturn is coming.

    And so you have to ask yourself: is the risk greater that NYC RE turns up, or turns down again? Answer seems pretty obvious from a probabilistic viewpoint.

    G
    Jun 6 10:33 AM | 3 Likes Like |Link to Comment
  • New York City Home Prices Are Headed for Collapse [View article]
    Love the data, Keith. And love the very well organized article. I've been watching the US housing market for a decade. My specialty area is energy, however, and the two are of course inextricably linked. I wrote as much (again) just recently in "Housing in North America: Peak Oil’s Primary Victim."
    gregor.us/economics/ho.../

    In short, the excess capital which allowed for the salaries and gains over the past 50 years, which supported US housing prices, is going away. Watch how each new leg down will fool mainstream observers into thinking that lower prices equals higher affordability. This is the mistake Carl Case (of Case-Shiller) made last summer in his call for a housing bottom. There will be housing bottom calls for years, and years to come.

    Best,

    G
    Jun 5 10:54 PM | 3 Likes Like |Link to Comment
COMMENTS STATS
41 Comments
109 Likes