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  • Buffett Increases Stake in COP - Smart Move! [View article]
    Can't comment on Conoco, client confidentiality. Always appreciate reading your articles, Fitz. Any thoughts on Lukoil political risk?
    Nov 17, 2008. 06:37 AM | Likes Like |Link to Comment
  • Will Obama's Economic Policies Drag the U.S. Down? [View article]
    I appreciated your insight on the yield curve, especially Wicksell's theory. It is inexplicable to me why Paulson and Bernanke blew $2 trillion, except fear of change. Your remark about Peron made sense. Eager for change, no one asked Obama to explain what he would change to into what.
    Nov 17, 2008. 06:15 AM | 1 Like Like |Link to Comment
  • The One-Word Topic of the Day, and Week: Obama [View article]
    "Obama broke no real news but gave a steady and sober performance."

    Lather, rinse, repeat. Calms uncertainty, panic, itchy scandal and FOIA. Suitable for the whole family. Do not swallow.
    Nov 8, 2008. 03:10 AM | Likes Like |Link to Comment
  • Gold Miners: Biggest Drag on My Portfolio, Yet the Biggest Opportunity [View article]
    SAO PAULO (Financial Times, Nov. 8) - Brazil's newly discovered presalt oilfields may contain more than 100bn barrels, Haroldo Lima, head of the industry regulatory, said yesterday. Every well so far sunk into the presalt fields has struck oil - a hit rate of 100 per cent.

    If you believe any of that, you deserve every penny you lose on a "safe" state-controlled, negative cashflow, blue sky momentum play.
    Nov 8, 2008. 02:47 AM | Likes Like |Link to Comment
  • Silver - Better Than Gold, But Still a Commodity [View article]
    I liked Bapcha's article, and it's point well taken that 'Bad money drives out good' (Gresham's Law). Perfect mint condition coins are more valuable than those which have been scratched, clipped, filed. Bullion coins are sold and kept in plastic cases for that reason.

    However I must say that the informal economy is trading Eagles, Maples and Kangaroos from hand to hand, and while care is taken to preserve gold coins in good condition, they are money coins, not numismatic rarities -- i.e., merely an ounce of .999 gold in a recognizable shape, easily exchanged in private trade or over the counter at a coin shop according to a daily buy/sell spread.

    I like silver coins and bars because I think silver has farther to run up in dollar value, central banks have no supply, and silver is handy to pay in settlement of smaller bargains. Those of us who use PM coins may be many or few, but it leaves no paper trail.
    Nov 8, 2008. 01:06 AM | Likes Like |Link to Comment
  • We Have a Debt to Discharge [View article]
    Excellent statement, David. Thank you.
    Nov 7, 2008. 09:19 AM | 2 Likes Like |Link to Comment
  • What Do the Rate Cuts Mean for the Market? [View article]
    Another item at FT Alphaville today. The Feds balance sheet ballooned to $2 trillion in the last few weeks.
    Nov 7, 2008. 08:25 AM | Likes Like |Link to Comment
  • 'The Shallowest Generation': A Rebuttal [View article]
    Thanks, Dennis. Good rebuttal.
    Nov 7, 2008. 07:49 AM | 2 Likes Like |Link to Comment
  • What We Don't Know about the Markets [View article]
    Good article, timely, well argued. Adding you to my author Watchlist.
    Nov 7, 2008. 02:21 AM | Likes Like |Link to Comment
  • What Do the Rate Cuts Mean for the Market? [View article]
    Naively, I understand capitalism to mean productive labor, savings, and prudent investment in plant and equipment. Whether public goods serve anyone other than government workers and government contractors is debatable. It's always better to privatize utilities and let the market decide winners and losers.

    But the operative paradigm that inspires Obama and the Congressional leadership is "paper capitalism," limitless borrowing, income transfers, central planning, entitlements, and bailouts backed by promises to tax later. How this can turn out well escapes me.

    If I understand it correctly, the Fed has lost control of the money supply, according to FT Alphaville

    What happens if China stops buying our IOUs?
    Nov 7, 2008. 02:01 AM | Likes Like |Link to Comment
  • Where Have All the Peak Oil Believers Gone? [View article]
    "At a Caracas petrol station last week, Gloria Padron, a paediatrician, ticked off items that would cost about the same as the 60 litres of fuel gurgling into her Land Cruiser.

    " 'Let me think. A Magnum ice cream. A cup of coffee. A cheese and ham arepa [sandwich]. Small stuff like that. Can't say I've ever really thought about the price. Why would you?'

    "When a litre costs 0.7p, and filling the tank of a 4x4 costs 42p, it is a fair question. Petrol is so cheap here - reputedly the cheapest in the world - as to be almost free. Even under the artificially overvalued official exchange rate, petrol is 45 times cheaper than in Britain.

    "So while oil-importing nations appeal for relief (George Bush called in vain this week on Saudi Arabia to increase its output so as to bear down on prices), major exporters such as Venezuela bask in their immunity from the petroinflationary pain. Venezuela has the seventh-largest oil reserves in the world, and petrol is lavishly subsidised...

    "Nigeria used to be among the cheapest places on the planet to fill your car, with a litre going for just 0.3p in 1990. These prices fuelled a massive smuggling industry. A decade later it had reached 8p a litre, one of the factors in big protests against the government.

    "In Iran, prices of 5p a litre and a lack of refining capacity combined to create shortages. Rather than introducing steep price rises, the government opted for rationing. But the result was the same: motorists went on the rampage, setting fire to petrol stations."
    Nov 6, 2008. 02:03 AM | 1 Like Like |Link to Comment
  • Where Have All the Peak Oil Believers Gone? [View article]
    The other factor to consider is the fallacy of talking about "we" -- as in: We are running out of oil. There is no "we" in the oil business. The exporters Saudi Arabia, Iran, Iraq, Russia, Nigeria, Venezuela (and, yes, most of the self-sufficient producers like Brazil) subsidize consumption of oil and gas. Production sharing agreements with the West amount to a lop-sided deal that skims half or more of whatever Exxon or Shell produce for export.

    The true meaning of Peak Oil is called Resource Nationalism. USA, Japan, Korea, Germany are destined to pay far more for imported oil.
    Nov 6, 2008. 12:53 AM | Likes Like |Link to Comment
  • Where Have All the Peak Oil Believers Gone? [View article]
    To put that in context, even if you recovered every drop OCS, it's about 3 years US consumption at current rate, no population growth, no additional cars or 18-wheelers carrying food to market.
    Nov 5, 2008. 05:58 AM | Likes Like |Link to Comment
  • Where Have All the Peak Oil Believers Gone? [View article]
    BigG wrote: "the problem is not that we are running out of oil, but that a certain group will not allow drilling in the USA where there are large known reserves, such as under the city of Los Angeles, off the California coast, off the Florida coast, in Alaska etc."

    Nope. Only ~20 billion barrels Ca, Fla, Ak outer continental shelf (OCS)

    "Many proponents of domestic energy security consider gaining increased access to Federal resources to be one of the biggest challenges. Part or all of nine OCS planning areas, which include waters off 20 coastal states, have been subject to longstanding leasing moratoria enacted annually as part of the Interior and related agencies appropriations legislation, or are withdrawn from leasing until after June 30, 2012, as the result of presidential withdrawal (under section 12 of the OCSLA). Some of these areas contain large amounts of technically recoverable oil and natural gas resources. The MMS estimates that conventional oil and gas resources (i.e., UTRR) in OCS areas currently off limits to leasing and development total 19.1 billion barrels..." U.S. Department of the Interior Minerals Management Service February 2006
    Nov 5, 2008. 05:45 AM | Likes Like |Link to Comment
  • Petrobras: Mixed Sentiment Despite Record Production [View article]
    "Reserves certainly aren’t the issue for Petrobras."

    Anadarko and Exxon are currently drilling the celebrated Brazilian pre-salt prospects at the most optimal structural locations and will report sometime in the next few months whether or not it's commercially feasible to recover any light sweet oil in Tupi-Carioca. I expect the answer will be no.
    Nov 4, 2008. 03:40 PM | Likes Like |Link to Comment