Candor7

Peak oil nervousness is caused by vague anecdotal evidence and ignorance of exploration and extraction methods, argues energy consultant Michael Lynch: Oil's still abundant - and new supplies should bring the cost per barrel closer to history's $30.

Nobody I know is blaming politics for declining discoveries, more expensive exploration and production, or increasing depletion rates. Mr Lynch tries to tie the current debate to the oil embargoes from 40 years ago - but tellingly doesn't mention one person today.
>>>>>

Man, Locksmith, have you ever got that right! No sooner does an Oil exploration company file for exploration rights on offshore or public property, when all of a sudden, its placed in some form of "conservancy." We are plagued by an eco movement which has a religious fervor. Historically the movement is similar to the prohibition movement of the early 20 th Century. The government moves according to their lights, and HAS to get out of this loop before we fall back to horses and carriages. LOL. What a bunch of Duds!

And as you point out, no one wants to really point fingers at these eco idjits in reviewing the industry. Political correctness ( national socialist at this point) circumscribes capital investment. Duds ALL!

And I have enough faith in these consumate duds and their government counterparts to bet that oil will stay above 50 dollars for the next 3 years at least. Thirty dollar oil? Dreamers. Aug 25 12:17 PM |Report abuse| Link | Reply 00


On Aug 25 11:33 AM locksmith wrote:

> Lynch is going through all his old buzz words again. He misses so
> many things and is so vague I am surprised NYT publishes it.
>
> A)reserves additions ARE backdated to date of discovery - even with
> that discoveries peaked in 1960s and have declined every decade -we
> need to find oil before we produce it
> B)new, better technology allows us to maintain current oil flow rate
> at cost of higher depletion. Look at Cantarell - stagnant production
> until 1999 when they introduced nitrogen injection - then horizontal
> drilling in 2020 -production increased for a few years but is now
> crashing - (yesterday Mexico announced they are buying oil from Brazil,
> which means USA is buying oil from Brazil indirectly)
>
> C)Lynch totally ignores the energy and other natural resource input
> requirements of oil extraction. Dollars are only an abstract marker
> for real biophysical costs. The energy return on energy invested
> on oil has gone from 100:1 (1930s) to 30 to 1 (1970s) to 11:1 (2000)
> and anecdotally is much less now - additionally how much energy and
> natural resources will it take to rebuild the massive oil/gas infrastructure
> around the world with 40+ year average life? That isn't even included
> in those energy profit figures.
>
> D) Nobody I know is blaming politics for declining discoveries, more
> expensive exploration and production, or increasing depletion rates.
> Mr Lynch tries to tie the current debate to the oil embargoes from
> 40 years ago - but tellingly doesn't mention one person today.<br/>
>
> E). His final argument about total resources available being enormous
> mentions "some geologists". Again, he tellingly doesn't mention one
> name or organization to substantiate his claims.
>
> F) if deflationary bubble pricking continues which I expect, much
> of the remaining oil will cost more than the market can pay and new
> investments will stagnate- its all about flow rates in the end.
>
>
> From a trading perspective, i would be long the oil companies that
> have ability to grow low cost flow rates and be short the market
> -net neutral. Oil is and will be for sometime, the lifeblood of civilization
> - can't make wind turbines with wind, yet.
>
>

Peak oil nervousness is caused by vague anecdotal evidence and ignorance of exploration and extraction methods, argues energy consultant Michael Lynch: Oil's still abundant - and new supplies should bring the cost per barrel closer to history's $30.

Nobody I know is blaming politics for declining discoveries, more expensive exploration and production, or increasing depletion rates. Mr Lynch tries to tie the current debate to the oil embargoes from 40 years ago - but tellingly doesn't mention one person today.
>>>>>&g...

Man, Locksmith, have you ever got that right! No sooner does an Oil exploration company file for exploration rights on offshore or public property, when all of a sudden, its placed in some form of "conservancy." We are plagued by an eco movement which has a religious fervor. Historically the movement is similar to the prohibition movement of the early 20 th Century. The government moves according to their lights, and HAS to get out of this loop before we fall back to horses and carriages. LOL. What a bunch of Duds!

And as you point out, no one wants to really point fingers at these eco idjits in reviewing the industry. Political correctness ( national socialist at this point) circumscribes capital investment. Duds ALL!

And I have enough faith in these consumate duds and their government counterparts to bet that oil will stay above 50 dollars for the next 3 years at least. Thirty dollar oil? Dreamers.

From Bernanke's Reflections on a Year of Crisis: "After contracting sharply over the past year, economic activity appears to be leveling out, both in the United States and abroad, and the prospects for a return to growth in the near term appear good."

Lots of credit available to finance these purchases?

For how long?

Nanoeconds.

Hedge Funds Should Be 'Regulated Out of Existence'? Time for a Reality Check

Hedge Fund regulation should simply be minimal with an FDIC insurance program for lients of such funds. Anything elese is nationalization lite.

Hedge funds provide capital for emerging markets abroad and here at home, because of the intelligence, high motovation, and less risk aversion of their subscribers.

Its dead wrong to even talk about "banninig" hedge funds. They are an engine of growth, and thjose which are defectove simply disappear as being market inappropriate. The government has little business dictating the public interest. The public interest requires that such capital be readily available, not stymied by Obama's ideas of "wealth redistribution" as opposed to "wealth creation."

The Hedge Fund spin of the federal morality police reminds me of the prohibition era. Water was no subsitute for wine, and its time to start pointing that out to the fools who think otherwise, or America is about to take up parallel station with Zimbabwe in terms of future living standards, and this recession will last for 40 years instead of 5.

Enough of this Nationalist Socialist ideology in terms of redesigning our capital markets. This foolishness needs to be met head on and "wrassled" down.

Cheers,
C7

UAW's tentative deal with GM (GM) and the Treasury includes enabling GM to contribute shares instead of cash to a new, union-managed healthcare plan. On Tuesday, GM said it didn't expect to reach a deal with the UAW before May 26, when an offer to bondholders to exchange $27B in debt for a 10% stake expires. The deal, which must still be ratified, will not necessarily allow GM to avoid bankruptcy.

The bond holders will never agree to a 10% future stake in GM when they are contracted for much more, as secured debtors.

They want shares in lieu of cash. The government wants the Union to have control rather than those dirty rotten greedy "hedge funds."So our tax dollars will go for shares which will be in the hands of te Union, perhaps held in trust by the US government, nationalization lite Agency to come.

This is going to bankruptcy court, ,and I pray that the judge is one who does not cotton to "nationalization lite."

And this case could go all the way to SCOTUS. Do not give up band holders!!!!

I do not want my tax dollars used to subsidize the "greedy unions".
I would much rather see the "greedy Hedge funs" retain their interest and control of GM, or whats left of it. Then we won't have to drive little box cars while all government civil servants get first dibs on Cadillacs.

Wealth redistribution is actually "greed redistribution."

Don't forget that.

Cheers,

C7

Analysts say companies that pitch credit cards to riskier customers and those that issue cards for retailers will be hardest hit by new legislation being signed into law today. Major players include BAC, C, COF, HBC, GE and TGT. The new laws - which restrict fees, limit rate increases, and require more transparency - could lop $10B in revenue off the industry's top line.

The Zero administration interefres with the contractual relationships of America yet again. Credit card markets are great without this boondoggle. If I don;t like my credit card I shop and get one that
does not have any punitive clauses, and they are ouot there. My present card is with a Credit Union, which charges reasonable annual fees, and has a low cap on all its interest, and no fancy programs.

The market gave me that card, and the government had nothing to do with it. Why can't the rst of America handle so called "greed" of the capitalist system in the same way? Huh?

I do not buy any of this crap from the federal government and its propaganda, while it literally screws America royally through its "nationalization lite" scheming. And if you do, then your wake up is not too far down the road. Good luck with that.

All this "law" will do is cause my annual creit card fee to go up
due to increased administrative costs of my bank.

Thanks a lot you fed, Ass Hats.

Cheers,
C7

When will it all end?

Agreed Moon, in spades.

Perhaps looking to Canadian equities which are commodity based
might be indicated by the socialist intervention in our market economy.
There are many trading at one quarter their true market value, and demand
for their products will come from overseas.The USA will become isolated
and will need rebuilding after the ideologues who parasitically infect our hitherto freemarket are unelected and sent packing. That will happen as the USD declines and the standard of living in the USA goes South.But it will take perhaps 15 years to rebuild.

The present administration has its own surreptitious agenda of wealth "redistribution." This is what ruins our free market economy.
Strident protests from journalists like Charles Krauthammer are now seen as politically incorrect, but he and men of similar thinking are historically accurate.

I believe the key to future money making in such an envirinment is to examine what Asian investors did to accumulate wealth during the era when China was still starving under its socialist 5 year plans, which were later abandoned in timely fashion. In those days essential commodities required by China were targeted, and investors acumulated wealth by investing in thse sectors. And today they remain strong as China's demand still inflates those markets, such as fertilizer, oil, grain, and others.China now owns considerable chunks of those sectors.

In what sectors will the US continue to thirst for resources because and despiteof the destruction of the free market economy? Agricutural, energy,
health care, and some areas of R&D come to mind.Also some military
supply sectors, such as the small arms industry and its ammunition requirements also may be areas of interest. Ammunition production in the USA is currently evolving to off shore sources in Russia and elsewhere, for example.This will also happen in many other sectors.

I agree with your premise, that the US economy is compromised by ideology . In the short term we can make money from the dynamic, but we also need to have very well planned strategies for diversifiation away from
U.S. markets, to others which have the desired characteristics which the USA's now lacks,

In doing such planning it would be advisable to move one's capital to a situs which is favorable, in case the current evolution of adminsitrative isolationism results in locking down the free movement of capital abroad.
Such a restriction would be easily imposed by executive order,once the government controls the boards of our "19" larger banks, which will soon be a "fait accomplis." It will likely be couched in terms of Homeland Security /IRS concerns, and will be applied to individuals rather than corporations that are given a "pass" by the government's "wealth redistribution" paradigm.

For the private investor, this necessity is almost a no brainer, but it really depends on how far one wants to look ahead. We may have another 10 years of this dynamic, and so one's vision may need to adjust to see fifteen years ahead. This is a reach, given that most of us only look at the present quarter, and perhaps the next two.But at the end of this excursion into socialism, whether it be in 2013 or 2017, there will be huge opportunities
for wealth accumulation as America rebuild after rejection of this dysfunctional socialist paradigm.

Thanks for writing this piece. Many have similar thinking, and are trying to formulate plans of action. So here are my two cents of contribution, for what they are worth.

Prices Continue to Rise: Only a Matter of Time Before Dollar Gets Pressured

Misotran,

Your point is well taken about the political depression 1.0 you mentioned.However the jury is out on results of interventionism
by our government. If they can retreat from their interventive stanz,
then we will gradually evolve towards a more regulated finance system like Canada has, hopefully. But i fthe government becomes entrenched in our finance and production systems, we will no longer have making profit as the most significant motive in business.
The government will impose ideologically based corporate goals which will prevent our institutions foom functioning as creators of wealth, to being distributors of wealth as dictated by government. And then we will have the politically induced depression you mention., i.e. ommunism in short, of an American brand based in "fairness" imposed on a reluctant yet peaceful public who do not yet realize what is truly happening. That impositon could become increasingly totalitarian.

So far the government has made it very difficult for TARP recipients to buy their way out. That is not a good sign. As well the government yesterday presumed to dictate who will sit on Bank of America's Board of Directors. It may be that Political Depression 1.0 is already happening unless the "givernment" reigns itself in
from micromanaging corporations illegally, and without any power basis except the carrot of money/repayment, and the threat of public defamation. This has yet to play itself out fully. In any event, the unrest of which you speak may now be unavoidable.Americans sense this, which is why equities such as Ruger and Smith and Wesson have increased in value.

On May 15 12:36 AM Mistrofan wrote:

> Moon - with all due respect (because I like your view points a lot)
> - what people do NOT realize here in North America (and for that
> matter worldwide) what would have been the implications of a Great
> Depression 2.0 (without the help of Bernanke and Paulson). I have
> to say first that I HATE interventionsim. But, that being said, this
> time is way too bad (I choose carefully the verb time) - as a matter
> of fact it is so bad that US would have suffered not only an economic
> great recession/depression but more important would have suffered
> a POLITICAL Great Depression 1.0!!! Due to market interventionsim
> there are voice (more of the far right) that the governemnt is going
> too far and this is a socialist union and so forth... I do prefer
> these voices. Why? Because I personally lived in COMMUNISM 23 years
> of my life. And, I am sorry to say it - the North Americans have
> NO idea how that can be. My point - a Great Depression 2.0 would
> have create chaos and imense unrest in North America. I am convinced
> that the new Communism era would have started here. That is why was
> necessary to be done what was done.

Trying to bypass multi-year purchasing processes, Boeing (BA) is leasing drones to government agencies and militaries. Boeing thinks the market could grow to $10B in a decade.

Note that 2209 Census Takers have already entered the GPS coordinates of the homes of everyone in America in a massive data base. I have no doubt that Boeing will be leasing drones to the government, which shows every sign of slowly collecting all it needs to look into anyone's back yard if it is so inclined for any reason. Boeing is right on with its prediction as far as I am concened.

Beware of Ulterior Motives Behind Statements of Financial Experts

The interesting thing about this "recovery" with so much TARP monety bouncing around is that there is a class of investors and associated government policy makers at the Fed who want to "MARKET" the recovery.

Using the facts allows one to separate shite from shinola. Its easy to confuse marketing with sound strategy. Mr. Buffett , in addition to being an investor has also become a "marketer" of this recovery, and makes public statements to shape it. The secret in taking away the good that Buffett offers us is simply to read his words, and then examine his action. His action is what we can take as the real sound advice,and you will notice that his action is not always congruent with his own marketing statements.

Its the same with the "stress test" which is essentially a marketing strartegy designed to entice private capital back into the market.Mr. Kim says to look at the facts and shows us his approach, and I believe he is very good in separating good advice from marketing
statements. Marketing statements are designed to impact sentiment and if you find yourself swinging with a guru and your emotional quotient is high, born again enthusiasm may really hurt the bottom line.

This emotional dynamic , and its objective balance are played out right here in this comment thread. LOL. Good investing requires a very balanced mix of these two during these perilous times. Enthusiasm is good, but better look twice or thrice before you leap
to follow the guru.

Bullish on Silver, Less So on Gold

Look at this Kristjan, and what do you think? Sure indication of the BIG BOUNCE to come ?

Quote:

Release:#4016-97

For Release:May 7, 1997

CFTC Grants a Dual Trading Exemption to the Comex Division of the New York Mercantile Exchange
The Commodity Futures Trading Commission (Commission) has issued an Opinion and Order granting a Dual Trading Exemption to the Comex Division (Comex) of the New York Mercantile Exchange.

The Commission has completed its review of the Comex's petition for exemption from the Commodity Exchange Act's (Act) dual trading prohibition for its gold and silver futures contracts. The dual trading prohibition forbids a floor broker from executing trades both for himself or herself and for customers in the same contract during a trading session.

Subject to Comex's continuing ability to demonstrate that it meets applicable requirements, the Commission has determined that Comex maintains a trade monitoring system which is capable of detecting and deterring, and is used on a regular basis to detect and to deter, violations attributable to dual trading and, to the extent feasible, other violations involving the making of trades and execution of customer orders, as required by section 5a(b) of the Act and regulation 155.5. The Commission further has determined that Comex's trade monitoring system includes audit trail and recordkeeping systems that satisfy the Act and regulations.

A copy of the Opinion and Order may be obtained by contacting the Commission's Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, [phone].


www.cftc.gov/opa/press...


On May 07 12:15 PM Kristjan Velbri wrote:

> Missing_Link, I think you are right about that. I stumbled upon GATA
> myself the other day and went to the CFTC website to see if what
> they say is true and it was. Gold AND silver are being manipulated.
> Just take a look at these files at tell me it's not the case: www.cftc.gov/marketrep...
>
>
> GATA's specific allegations can be found here: www.gata.org/files/PIR...

Bullish on Silver, Less So on Gold

Look at this Kristjan, and what do you think? Sure indication of the BIG BOUNCE to come ?

Quote:

Release:#4016-97

For Release:May 7, 1997

CFTC Grants a Dual Trading Exemption to the Comex Division of the New York Mercantile Exchange
The Commodity Futures Trading Commission (Commission) has issued an Opinion and Order granting a Dual Trading Exemption to the Comex Division (Comex) of the New York Mercantile Exchange.

The Commission has completed its review of the Comex's petition for exemption from the Commodity Exchange Act's (Act) dual trading prohibition for its gold and silver futures contracts. The dual trading prohibition forbids a floor broker from executing trades both for himself or herself and for customers in the same contract during a trading session.

Subject to Comex's continuing ability to demonstrate that it meets applicable requirements, the Commission has determined that Comex maintains a trade monitoring system which is capable of detecting and deterring, and is used on a regular basis to detect and to deter, violations attributable to dual trading and, to the extent feasible, other violations involving the making of trades and execution of customer orders, as required by section 5a(b) of the Act and regulation 155.5. The Commission further has determined that Comex's trade monitoring system includes audit trail and recordkeeping systems that satisfy the Act and regulations.

A copy of the Opinion and Order may be obtained by contacting the Commission's Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, [phone].


www.cftc.gov/opa/press...


On May 07 12:15 PM Kristjan Velbri wrote:

> Missing_Link, I think you are right about that. I stumbled upon GATA
> myself the other day and went to the CFTC website to see if what
> they say is true and it was. Gold AND silver are being manipulated.
> Just take a look at these files at tell me it's not the case: www.cftc.gov/marketrep...
>
>
> GATA's specific allegations can be found here: www.gata.org/files/PIR...

Bullish on Silver, Less So on Gold

I am totally in agreement with you Kristjan, on your sound prediction about silver.

I also hold a long position on SW, and have for about 40 days.THe small cap stocks in sound silver comanies such as Endeavour and First Majestic also make good investment at this time but bear more watching as they do fluctuate more on both down and up
market indicators.I am bullish on buyingmore of these compahies should they decrease in value with the volatility in this rally pattern we now see.

I felt quite strongly about the very factors you have pointed out,so much so that I paid a 2 dollar premum per ounce for the purchase of actual physical silver which was then selling at around 12 dollars on the spot market about 30 days ago. As silver now touches the 14 dollar level I feel quite vindicated and also predict that silver will likely run up too a value in the low 20 dollar range , or possibly even higher as the cup analysis you mentioned indicates.

Fist Majestic Silver is an excellent source for physical silver, they are recapitalizing by simply releasing their accumulated reserves onto the market. Their 2 dollar premium per ounce may repel more folks as time goes on, and the upper ranges of silver value are approached, but so far the silver offerings of First Majestic have been sold very quickly.So the physical silver market still remains quite robust.

Please post more on this topic as time goes on. I am most interested in examining any other factors you might raise such as Silver Beta, which will indicate when the market is topped.

Thank you for a well written and well researched article.You hit it spot on.

But no one can predict the market 100 per cent of the time. The down side? I will have a nice silver anchor I can use on my boat
for a few years. So then the laugh might still be on me.

Cheers,

C7

A group of 400 executives from state-owned and private Chinese firms will arrive in the U.S. and Canada next month, to hunt for cheap distressed assets. The group is expected to look at the auto, petrochemical, energy, metal, media, furniture and consumer goods sectors.

Well if there is no plan, then we are really in trouble. The money printing presses will overheat at some point. A skidded soft collapse
in slow motion is much better. It will allow us to shop till we drop.


On May 07 02:24 PM Just Say Whoa! wrote:

> Just one more indication there is no "plan" by China to "collapse"
> the USD.
>
> If there was, wouldn't they be able to pick up these assets are much,
> much lower prices after the "planned collapse"?
>
> FWIW, they appear to be as clueless as we are about the future....
>
>

A group of 400 executives from state-owned and private Chinese firms will arrive in the U.S. and Canada next month, to hunt for cheap distressed assets. The group is expected to look at the auto, petrochemical, energy, metal, media, furniture and consumer goods sectors.

It would be interesting for them to offer a buy out to GM.

Why buy treasury bills when you can buy GM?

For a song and some General Tso's chicken for the president?