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  • Stocks Poised for Big Rally [View article]
    At the end of it all, the market will reach infinity and everyone will be given a magical unicorn that farts gold coins and poops vanilla ice cream.
    May 14, 2010. 08:46 AM | 68 Likes Like |Link to Comment
  • Why Canada Should Be the EU's Model [View article]
    You can't be serious. Reward the sick and punish the frugal.

    Alberta constantly sends money East to the have-not provinces yet struggles with labor shortages while others wait in disparate areas for manufacturing or fishing industries to recover.

    Transfer payments weaken the good economy and enable poor economies to continue on the same track.

    If your economy is sick or dying you must work to change it - not have an out or excuse to bide your time.

    This is a very contentious issue within the same country - you honestly believe it would work in Europe between diverse countries? You do understand that wars in this region have been conducted for thousands of years don't you?
    May 17, 2010. 04:22 PM | 22 Likes Like |Link to Comment
  • Why Oil Will Sink to $20-$40 Per Barrel [View article]
    Oil to Natural Gas ratio - you lose all credibility when you bring up that relationship because its one used for accounting purposes - period. Link it to another replacement fuel (coal) if you like. There is no meaningful amount of interchangeability between the two fuels.

    Oil is a global market - Natural Gas is constrained to the North American market - can be brought in but currently not exported.

    We have gone through a severe credit crisis and sub-optimal growth over the past 2 to 3 years and oil consumption in the USA has dropped a mere 2% - that should raise alarm bells.

    The single most important piece of the world economy is oil. Without cheap energy there is approximately 2 to 3 billion people too many in the world and exporting goods would be next to impossible.

    Oil at $70.00 is inexpensive. Inflation adjusted oil was more expensive in the late 1970's.

    All new oil that will be required to cover depletion an future demand increases from the hard to find/produce category - deep water and oil sands. Check out deep drillship rates - 500K per day - rig only. Full cycle E&P costs in the oilsands do not make sense at $70.00 USD/bbl.

    Yes oil can go lower but it will not stay there for long - when the world economy recovers you will wish you had that barrel of oil versus that $70.00 USD.
    Sep 15, 2010. 09:12 AM | 19 Likes Like |Link to Comment
  • Is Deflation Really That Scary? [View article]
    I think Inflation has had people chasing return for sometime, even developing complex investments that financial gurus could not even decipher.

    Chasing return has been part of the reason we were put into a financial crisis. Perhaps a 10 year term of deflation would be a good thing.

    Would force people to deal with debt, not extend and pretend.

    Would force governments to balance budgets.

    Would force people to live within their means.

    If you have no cash and lots of debt it will be very painful as it should be.
    Jun 18, 2010. 10:37 AM | 15 Likes Like |Link to Comment
  • Examining the Chances of a Market Crash Before the Mid-Term Elections [View article]
    "We know intervention is a reality, and we know these key technical levels are in danger of being breached. Put those facts in an election context which is looming as a disaster for the party in power and you get a scenario which should give overly enthused Bears pause."

    I think the first step in the destruction of a society is the apathetic attitude towards fraud and corruption. Propping up the market with debt or tax payer money without publicly declaring so specifically is just that.

    I hope for the USA's sake and the entire free world for that matter that you are a conspiracy theorist and trying to kick-start dialogue.

    If not and you are serious it might be time to start mobilizing a militia instead of writing blogs like this one.
    Jul 19, 2010. 02:45 PM | 12 Likes Like |Link to Comment
  • Why Not to Bet on Energy Stocks [View article]
    People unfamiliar with the exploration of oil and natural gas do not understand the dire situation the world is in. We have reached the end of cheap oil. Incremental production is only coming from deepwater offshore or oilsands - this type of production is very expensive to find. The current world demand is 86 million BOPD - that current production declines at approximately 8% per year - that 86 million barrels per day is going to be 36.5 million barrels per day in 10 years. Factor in our estimated surplus production of currently 6 to 7 million Barrels per day and in 10 years our "current developed oilfields will be producing +/-40 million barrels per day.

    Demand in 10 years (assuming an increase per year of 1.0%) which would be historically low - that would be conservative given India/China etc. balanced with conservation - demand will be 95 million barrels per day. (IEA estimates 130 million BPD by 2030 - think they are wrong due to conservation but still a staggering estimate).

    Are we going to find 50 million "NEW" barrels per day at $60.00 oil?

    Look at the majors oil companies - retreating back to our shores to chase tight natural gas plays when the current fundamentals of a fossil fuel that has not been embraced by policy makers. Follow the money - they too are realizing the conundrum and many have not been able to replace reserves of oil.

    Finding and development costs on new production in the oilsands of Alberta is close to $60.00 per barrel - Offshore Brazil where the drillships cost upwards of $600,000 USD per day to operate.

    Inflation is expected to ramp up over the next 5 years - agreed?

    Enjoy the $80.00 oil while it is here and until the writing is on the wall for all to see when the economies recover you may well see lower oil prices - then you will see another price shock, oil at $200, $300 per barrel.

    Bottled water is more expensive than oil per barrel.

    The world will have to conserve at a rate that will seem impossible today, developing countries will be forced to forgoe their industrial revolutions. Countries with state owned production companies will begin to see the merit in not selling oil, instead hoarding it for its own needs.

    My money is just fine sitting in oil based exploration and service companies. Everything goes up and down - I suppose you are putting your money in treasuries, commercial real estate, banks or consumer stocks?
    Mar 24, 2010. 09:37 AM | 12 Likes Like |Link to Comment
  • What Is Going On in Sweden? [View article]
    Ring Ring...Ring Ring...
    - Hej
    - Hello this is the US Department of statistics
    - Yah
    - Did you not get the memo we sent out last year about manipulating your statistics to elevate confidence?
    - nej
    - Don't let it happen again!
    - Min dalag
    Mar 2, 2010. 05:11 PM | 12 Likes Like |Link to Comment
  • Why Oil Will Sink to $20-$40 Per Barrel [View article]
    Mr. Galt - You don't find it at all strange that Saudia Arabia has produced between 6 to 9 million barrels per day for 30 years and their reserves have gone up? Did you know that your production quota in OPEC is base on your percentage of total reserves - doesn't give you much incentive to reduce reserves as you produce oil does it?

    Ghawar in Saudi is a great example of the decline of easy oil - check it out if you like.

    Declines on mature fields are between 5 to 6% a year - just to replace declines we must find approximately 5 million barrels per day per year. A newly drilled well at the start of its curve declines at between 20 to 30 percent in the first year (flush production) - that 5 million barrels per day you just found is only 3.75 million barrels after one year and then may assume a 5 to 10% decline profile.

    It is a severe treadmill we are on. The easy oil is all gone. Now its deepwater and oilsands, rogue regimes and nationalized oil companies, and some jurisdictions are getting tougher to drill in for some reason (GOM, soon to be Iraq when the US leaves)

    Do you think all the production increases you mention would have occurred over the last 3 years at 30 to 50 per barrel?

    Best cure for a low oil price is a low oil price.

    Short if you like but $70.00/bbl is cheap oil, enjoy it while its here.

    Bottled water is trading at $800.00 per barrel - there is a good short.
    Sep 15, 2010. 03:39 PM | 11 Likes Like |Link to Comment
  • Is Deflation Really That Scary? [View article]
    Absolutely correct. A lot of people here are worried about runaway inflation - likely not going to happen.

    Demand is lower, credit is lower, capacity is underutilized.

    Higher longer term unemployment. People paying off debts and not spending at previous pace. New jobs will pay less and have less entitlements.

    Go ask for a raise - not likely.

    We have walked down the same path as Japan when our leaders vowed we will not do that and we have learned from their mistakes - I don't see much difference in what we have done.

    Deflation will be here for some time to come. The next bubble is probably gold.
    Jun 18, 2010. 09:02 AM | 11 Likes Like |Link to Comment
  • One down day for stocks, and the word is already out that the Fed might continue with QE Lite. Recent remarks by Yellen and Dudley that the economy and inflation are too weak to begin a reversal of monetary policy are interpreted as a signal that the Fed will keep its balance sheet at current levels by replacing ~$17B/month in maturing mortgage debt with Treasurys.  [View news story]
    Pathetic...if you guys consider your current economic conditions as a crisis that requires unprecedented monetary stimulus I shutter to think what your Fed will do if things really do get bad.

    You guys should take back your country and swallow the bitter pill for the benefit of your future generations.

    Instant gratification, no willingness to make tough decisions, the current legacy of the USA.
    Apr 19, 2011. 09:03 AM | 10 Likes Like |Link to Comment
  • It's Going to Happen Again Unless Bernanke Is Brought to Heel [View article]
    The Federal Reserve System was conceived by bankers for bankers in the early 1900's. They couldn't name it "Central Bank" as in Europe. The government was trying to protect the people from the "money trust".

    Lets name it "Federal" to give it the illusion of being a legitimate institution. Lets also put "Reserve" after Federal so people think we actually have reserves. The Fed has a check book but has no bank account with money in it.

    Inflation is the only tax that governments can impose on their citizenry without inciting riots. Inflation allows governments to borrow at a whim to satisfy pet projects and delay tough decisions.

    The Federal Reserve is allowed to create money out of nothing and charge interest on that nothing, pretty good gig if you can get it. In order to keep up with the charade you need a partner, that is your federal government.

    It worked very well for the first 60 to 75 years. Investors are much more informed nowadays, thanks to mass media and dissemination of information it is harder for the fed to stay ahead of all the sheeple.

    Perhaps the fed actions are no longer working because investors understand more clearly exactly what is going on. Investors are trying their best to preserve wealth and buying power because they know the Fed is no longer trying to "stimulate" the economy but is actively destroying your dollar to give the illusion of wealth creation.
    Apr 5, 2011. 11:09 AM | 10 Likes Like |Link to Comment
  • Why We'll See $300 Oil by 2020 [View article]
    Oil in the early eighties was cheaper than it is today. Inflation adjusted it is relatively cheap right now.

    Corn ethanol - more energy to produce it than it produces - without subsidies it wouldn't exist.

    Right now the world consumes 87 million barrels per day, with average declines that production will be approximately 45 to 50 million barrels per day in 2020 at a time when world demand will be at approximately 100 million barrels per day. Assuming we really start to decrease demand to flat over the next 10 years you will need to find over 40 million barrels per day of "new" production.

    The low hanging fruit is gone, the new oil is in 5000 feet of water and in the oilsands where current finding and development costs of greenfield projects require oil prices over $80 per barrel. Add in moratoriums on drilling in certain areas and increased costs due to regulation and liabilities do you think those costs are going down? More and more of the worlds new oil is in tough places to work (geo political problems/regimes).

    Why are huge companies like Exxon having poor liquids growth profiles and now taking positions in natural gas plays in North America?

    How much oil have you personally tried to find in your days?

    The USA is printing money at a feverish pace and you think eventually inflation is not going to be a concern?

    $300 oil in 10 years would be wonderful, hope it doesn't run further than that.
    Jul 30, 2010. 11:53 AM | 9 Likes Like |Link to Comment
  • Why Canada Should Be the EU's Model [View article]
    I see how in Quebec it can be construed as a great benefit of living in Canada and a "quaint Canadian positive view of sharing" - mention transfer payments in Alberta and you will illicit a very different response - one containing many four letter words none of them quaint.

    If you can pay for your entitlements in Quebec from your own provincial coffers then fill your boots - if you cannot balance your books without assistance from other provinces then perhaps you are living too high on the horse - out west that means spoiled.
    May 18, 2010. 09:06 AM | 9 Likes Like |Link to Comment
  • New Risk Aversion Could Test 2009 Lows [View article]
    You have a new follower. Why we keep reading articles that tell people it is safe to wade into this market is absurd. The list of wrong things in the world is longer than the compelling reasons to buy. A "flash crash" occurs 1 week ago and still no explanation.

    Most of us put a good portion of our life savings in the market and then witness a meltdown of 10% with no reason. People playing this market are gamblers.

    I think we will look back at the last few years as the loss of investor confidence era - it will take some time for companies to regain the trust of the retail investor.
    May 14, 2010. 02:39 PM | 9 Likes Like |Link to Comment
  • Climategate: Revolt of the Physicists [View article]
    The problem with man has always been his ego. Throughout history we have convinced ourselves of our intelligence, all knowing and reasoning capability.

    I live and work in Calgary, Alberta - 10,000 years ago this city was covered in approximately 1 mile of ice. I am not sure what caused the warming event that managed to melt all that ice but I do know one thing - man had nothing to with it.

    It is difficult for mankind to accept they have no control over their environment, to do so would be an admission of vulnerability.
    Nov 30, 2009. 10:30 AM | 9 Likes Like |Link to Comment
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