Black Rain

2009 Oil Estimates

Ok, I have some serious problems with the numbers you stated above. . . .

1) Your highest peak supply number mentioned is 85.69 (and demand was at 86.94)
2) Your current demand number says we are at 85.27, presumably with the same supply (85.69).

So, how the heck did we end up with 50mm - 100mm barrels of excess "stored" supply in the past 3 months?

Jeffrey Saut: A Rally in the Works?

Why is it everyone seesm to only look at past stock market history to predict future stock market history?

If the cause of this was the subprime collapse reducing asset values, and we have yet to go through similar problems with ARM resets, commercial real estate and credit cards is this the beginning of stock market declines or the end?

Has Irrational Anguish Unduly Decreased Asset Values?

Thanks for the laugh this morning. How exactly is a return to being "in-line with historical rational levels" an "Irrational Anguish" experience? I suspect that you have not seen anything yet. . . Especially when you consider the current economy and our government's willingness to run a deficit of $1T a year.

Surprising Call for Return to the Gold Standard

My theory is our current mess is GREED! It appears to me that risk has been mis-aligned with senior executive compensation. There is simply too much incentive to drive corporate earnings at any cost.

Most compensation is in the form of stock options. When you are a CEO you only care about driving the earnings of your company during your tenure. There is no long-term consequences to taking outsized risks -- all of the risk lies with the shareholders if you put the company on a path to destruction that will play out years down the road.

When you retire, the guy behind you (next CEO) has to take even bigger risks in order to keep driving earnings upward at an increasing pace to make HIS stock options pay off. Rinse and repeat as you go through multiple CEO's and you have a perfect recipe for overleveraging your balance sheet and taking unwarranted risks to drive as much short term earnings as you can.

I think this is what caused Alan Greenspan to question his belief in the system. His view of the system was that companies would have a motivated interest in their own survival that would prevent them from doing the absurdly stupid. But how can that be when you are going to increase top CEO compensation from the normal $5M - $10M to $10s or 100s of millions for a few extra nickels and dimes of earnings today? The only way to achieve this would be to increase the risk your company is taking . . .