Lex Luz

Crude Prices Plunge - UltraShort ETF Positioned for Profits

This strikes me as a less-than-thoughtful analysis. Clearly the momentum at present favors continued declines in oil prices, but what happens when the impacts of the global inflation regime created by the trillions of dollars in newly-issued central bank scrip begin to be felt? What would be the impact of oil being priced in a currency other than the dollar (though what that would be now seems a challenging question to answer).

It seems imperative also to consider global instability and "wild-card" factors in making these decisions, too. What happens to the price of oil if Israel attacks Iran and Iran blocks the straits of Hormuz?

The article isn't investment advice, it's a gambling tip. You may have the best of it for the next hand or two and maybe the DUG is a good gamble if all current trends hold and if no wild-card scenarios arise.

Wall Street Breakfast: Must-Know News

CCerenz - Our auto companies are uncompetitive because they are run by fat, lazy bureaucrats with no market savvy and neither the ability nor the willingness to innovate given their knowledge that no matter what happens, they will be bailed out by Uncle Sam as is happening now. Yes, they have high labor and legacy costs. This too is a reflection of poor management. Everyone loves to pile on to the unions and they certainly bear their share of the blame but at the end of the day there is SOMEONE running the company who must set strategy and execute against it. When that strategy fails, the CEO should either adjust or accept failure. Instead, American auto company CEOs go crying hat in hand to Congress and whip up a spectacular frenzy among the deluded that it's all the fault of someone else. Nonsense. We are a nation of whiners indeed - and there are no greater whiners than those who've led once-great businesses into the sewer.

Magazine Covers as Contrarian Indicators

I would argue that both you and Castle are correct, but in different timeframes. Monetary deflation may be occurring now, but price inflation will continue and in fact accelerate for the next year at least as producers of consumer products (non-discretionary especially) take advantage of pricing power. Consumers really haven't seen the price impact of the massive jumps of commodity and shipping prices, nor have they seen the full impact of increases in input costs of food items.

Price inflation has been lagging monetary inflation for decades; to my way of thinking price deflation will lag monetary deflation too. Thus, you're both right.

Drilling in ANWR: What's Not to Like?

Considine's "argument" above sums up just about everything that's wrong with the far-right wing on this issue. It's simple a pure-partisan shriek that advances nonsense without any regard either for facts or for the possibility that there might be a solution to our energy issues if we work together. Partisans on both sides of this issue want to stop progress in the name of "winning," except that by winning in this case it's likely that they sentence the nation to death.

What's needed instead is a real energy policy. Yes, we must drill ANWR, and we had better start yesterday, because it's going to take 10 years to realize significant production and we will ultimately find that there is far less oil there than the most optimistic estimates "prove." The jobs benefit alone will be worth it, and we'll realize that far sooner than we realize whatever oil we actually can pump out of the ground.

At the same time we must recognize that drilling for more oil doesn't solve anything - if we remain dependent solely on hydrocarbons for our energy needs, we will absolutely face our ruin and that right soon. So yes, drill absolutely everywhere. At the same time, begin building out nuclear capacity, wind (to say wind is not efficient is utterly laughable - go ask T. Boone Pickens what he thinks of it), thermal solar, PV, geothermal, biomass, and more. Get solar and wind power into every new housing development, with full grid tieback (there's something power companies have resisted for far too long). Give power companies an opportunity to have a piece of these micro-generating and micro-distribution options.

I object to government subsidies on principle, but if we're going to give them, let's stop giving them for oil exploration and start giving them for development of net-positive new fuels for transportation. Let's also build out rail infrastructure for freight and passenger traffic, especially light rail and other public transit projects too.

To sit around shrieking that the Democrats or Liberals want to take away your freedoms is idiotic. For environmentalists to screech that we have to stop living is equally idiotic - we've gone too far down the oil path now to stop. We need to drill for more oil to be sure, but we also must recognize that it IS finite, and it WILL "run out" as a practical matter, and the result of that is the certain death of billions of people and most of the world's nations UNLESS we move on to alternatives, fast.

This isn't about controlling people's lives, their options, or their privacy. It's about finding ways to work together so that we can all survive the crises that are here now and coming next.

1,238 Billion Barrels of Oil Reserves: Is This an Oil Price Bubble?

Well, paulk, we're going to face far higher taxes irrespective of what anyone thinks or says or does about oil. We can't fund our current obligations, let alone have a prayer of funding future obligations, and I see no one in Congress, irrespective of party affiliation, willing to tackle that issue. Even if taxes rise to 100% on individuals and corporations we can't fund ourselves, so sooner or later something absolutely has to break.

When you say "we've tried that before" with respect to cooperation and a multi-partisan approach to energy policy, I'm somewhat lost. I don't recall any energy policy in our country other than "keep it cheap and burn it all," which I recognize is hyperbole, but the point remains: I haven't seen the cooperation you speak of. Would love to have a countervailing viewpoint on that.

I'm not sure either that I understand the argument that environmentalists want to take away people's liberties. Certainly I think there are fringe elements that want us all to die in the name of Gaia, but the broader streams seem to be advocating more strongly for reducing energy demand and for cleaning up. Both of these seem like good things to me, especially in the longer term.

I am hopeful that leadership will emerge - and soon, at that - that will tackle the twin perils of fiscal irresponsibility and energy irresponsibility, and that will create a unified front, or at least a "middle path" toward restoring America's potential. We've squandered a lot of it. I don't think it's too late to turn it around but I do think we have to stop screaming at each other first and foremost.

By the way I think Lewisabroad is absolutely right: high energy prices are a great thing insofar as they spark innovation. We have indeed been too fat for too long.

1,238 Billion Barrels of Oil Reserves: Is This an Oil Price Bubble?

People who simply sit in the corner and shriek about the liberals and the so-called "green menace" are as much a part of the problem as people who drive their Escalades out to protest the latest fashionable environmental cause.

Demand for oil is rising, and though Hubbert's career was nearly destroyed for his peak oil prediction, it is entirely obvious that he was absolutely right. So, probably sooner rather than later, we will "run out" in the sense that we will not be able to expand production quickly and effectively enough to support growing demand. Sure, plenty of oil will be left in the ground, but that's not what's meant by running out in this scenario. We're going to go to war over this stuff, again and again, unless and until we can wean ourselves off it.

We must embark on an energy independence program in the United States, and that means drilling everywhere in the short term, building out nuclear, solar, wind, geothermal, biomass, and other viable alternatives in the medium term, and developing net-positive liquid fuels for the long term. Simultaneously, we MUST address an infrastructure and culture that is almost completely single-occupant automobile dependent. It's wasteful and stupid, and we simply can't pay for it anymore. That's also a long-term problem.

Real leadership in this country will emerge when we start looking inward again, and when we recognize that we're either all going to live together or we're all going to die together. Stop screeching about "liberals this" and "green menace that." Stop squealing about endless protections for places we can't afford to set aside forever anymore, thanks to our own stupidity, avarice, and profligacy up to now.

Let's start finding ways to come together as a nation so that we can have at least SOME chance to survive now and set our children up to thrive later.

Want Lower Gas Prices? OK, Let's Increase Supply

Increasing supply "solves" nothing. My opinion is that we must drill everywhere where there is reasonable expectation of extracting oil. The Bakken fields, ANWR, coastal areas - drill 'em all. BUT... let's not kid ourselves. Doing this only extends the horizon by some unknown timeframe, and it comes with unknown, potentially serious consequences ecologically. The only actual solution to the end of the oil era is to develop viable alternative fuels and also to reduce fuel consumption of all kinds. That means extraordinary changes to infrastructure and culture too. This is the nation that put people on the moon and brought them home safely simply because we said we would. If we could do that, we can tackle this challenge too. The first step, though, is admitting that increasing the supply of oil is NOT a solution. The next step will be to build energy policy that reflects that reality and that transcends the nonsense politics of the past 35 years.

I give us about 1 chance in 9.