Macro Monitor

Where Will the Markets Go from Here?

Whidbey: I agree, we appear to be gearing up for an interesting august.
HeberWho? I'm sorry you feel that way, though I find it entertaining that you took that time to post such a comment.

Cheers

If Commodities Falter, Export Reliant Currencies Could Follow

EUARTE - interesting points, thanks for the post.

naplsguy - I find it entertaining that you took the effort to make that post.

Offshore Drilling Isn't the Answer - Supply and Demand Is

The Old Wizard - Shale is one of the most expensive means of obtaining oil. You're looking at well above $60 per barrel, just for extraction. Huge investment isn't going to happen because companies are too conservative (rightfully so) about the future price of oil. That's the brute reality of the geology and the economics.

Applauding the Fed's GSE Action

It amazes me to think about the logic of a GSE bail-out. Here’s the genius: if the economy (for lack of a better word) sucks and American's are loosing money on their houses, let's have the American taxpayers pay for it!!

Offshore Drilling Isn't the Answer - Supply and Demand Is

First of all, thank you all for your comments -- I enjoyed reading them. Since it would be difficult to reply to each of your individual responses, I’ll attempt to conjure a “one fits all” response.

It seems that most criticism comes from my comment that, ‘opening up the artic wildlife refuge will do little to ameliorate prices.’ My reasoning stems from the fact that there are already 68 million acres currently leased offshore that contain an estimated ~70% of our oil reserves. I am not opposed to deep sea drilling in the least; in fact, the future anticipation of increased oil production can influence prices today. So, from a short-run perspective, the answer is not to open the Artic Wildlife Refuge, but to engage in contracts in the 68 million acres already leased.

From initial conception through project completion, offshore drilling rigs take years before becoming operational. An offshore jackup rig, for example, will take approximately 3-4 years before becoming operational. Construct a semi-rig, and you’re in the ball-park of 5 years. But these numbers only include construction times -- there are many other necessary steps (feasibility studies, environmental regulations, etc) that add significant time to these estimates. More information can be found here: www.eia.doe.gov/oiaf/a.... How will this help reduce demand or increase supply in the short run?

In the end, oil prices will ease when demand subsides. Eventually, as ‘Mathman Prophecy’ posted, people will spur demand destruction. This is best accompanied by maximized oil production, and significant investment in alternative energies. The profit motive will accomplish this.


PS – I strongly disagree that speculation plays a key role in the price of oil. I commented on this here: davews.blogspot.com/20....

PPS – Correction (per Investor612): President Bush, not McCain wants to open the ANWR to drilling.

Good Time to Buy Chinese Currency: Follow the 'Hot Money'

Arun N – Assuming growth remains robots, are you sure investors would head for the nearest exit?? It seems to me that higher interest rates would attract more USD capital. I certainly agree that things can change in an instant.
rlirph – That’s a very interesting point, and one that amazes me. China can certainly use a more open / complex financial system. Just look at Chinese firms who wither produce or consume commodities. Can you image being a ‘smaller’ firm not being able to hedge against commodity inflation, or being able to lock in profits??
pldragon - thanks for the comment.