akapital

Oil: $20 a Barrel? Or $200?

Nice polemically title should generate alot of comments like mine...

A rising dollar will merely keep oil prices (in dollars) in check.

A fallng dollar, oil remains a great hedge.

The third way, that nobody see coming is alternative energy coming on board.

So keep averaging down on any fall in oil, keep a position in alt energy, and that should rationalize any price your paying at the pump.

But what do I know, I am just a kid from Brooklyn...

Gold and Oil - The New Mecca

An investment in oil of some kind makes sense for the followng reasons:

1. Off of historical highs, so timing is ok
2. Hedge against dollars if you hold dollars
3. Hedge against rising fuel costs if you use fuel

If price of my oil investment falls then the silver lining is that I pay less at the pump everyday and my dollars are worth more. When oil goes up I can rationalize paying more at the pump because my investment in oil goes up.

As for gold, this is an investment that I really do not understand at all and therefore I am not in it. Neither long nor short gold. Shiny stuff but what is it good for? I would rather invest in something that has use value. But hey I guess that's my loss.

Arianna Huffington: New Media Outlets Must Prove Commitment to Truth

The fundamental distinction which underlies the article is that between a culturization/educative process and mere ideology. The problem is that such a distinction cannot be made, whether it be in mass media or otherwise.

The very effort to label news or media as truth or objective is the most eggregious example of spin/ideology (e.g. Fox News).

Of course culture and ideology at its most eggregious examples are easily distinguished but the majority of situations are gray...the modus operandi of any observer/reader should be guarded. A critical education seems inocuous (sic) in this regard.

The problem is not that we believe everything we read/watch, but rather, for the most part and on the whole we mostly read what we believe.

The distinction between mainstream and peripheral sources itself may be a sort of referendum of votes on versions of the truth.

But don't take my word for it...

America, The Nanny State

Well said.


On Nov 02 11:31 AM bob adamson wrote:

> Mr. Quinn focuses on the US medical health insurance debate as a
> metaphor for the larger debate over the role of the state in the
> economic life of a nation. The following tries to put some context
> into that larger debate.
>
> Since the current economic crisis came to a head last year there
> has been an important division between the centre left and centre
> right on how to respond to the deep downturn and where ideally to
> be headed coming out of it. The left wants to protect employment,
> incomes and employment benefits and rebuild public infrastructure
> and social and environmental programs to both maintain and rebuild
> better balance (economic, social and ecological) and social equality;
> these being the measures of a healthy and sustainable economy and
> society. The right wants controlled ‘creative destruction’ of wasteful
> public and private social and economic institutions and accelerated
> shifting of economic focus to the healthiest sectors of the private
> sector promoted by deregulation and a lowering tax and public debt
> burden coupled with a greater embrace of globalization; these being
> the way to greater growth and individual freedom. This division was
> temporarily masked in the third quarter of 2008 and the first of
> 2009 as almost all embraced the need for short term stabilization
> of the investment banking sector and shock stimulus of consumption.
> Now that (perhaps prematurely) it appears that the crisis phase has
> past, the right increasingly calls for a return to their core agenda
> while the left continues to see the need for both short term stimulus
> and a longer term drive to achieve the balance and equality described
> above. This debate is now front and centre.
>
> Mr. Quinn presents a more red blooded Libertarian version of the
> right agenda. Logically under that version there would have been
> no fiscal and monetary intervention last year to save the investment
> banking sector and the general economy from a deflationary collapse
> and something rather more than creative destruction would have been
> given free reign to reset the economy and society on the course to
> what purist Libertarians of a right political orientation would see
> as a freer and better state. It should be acknowledged, however,
> that such a choice is as much a policy of social engineering as anything
> proposed on the centre left or left.

Stop looking to regulation to fix the financial sector and let the unhealthy banks die. "Regulation tends to make problems worse rather than better," analyst Roger Nightingale says. But if we didn't bail out the dying banks, to whom would bank executives turn to reinstate their swollen bonuses?

Ahem. This conflates regulation with bailouts, most likely in an effort to rally the idiots around and lead the mob into the streets.

Meanwhile, CNBC let's try and think deep thoughts. Bail outs bad, regulation good. Yes, we can have two ideas running through our mind at the same time.

How Does Ethanol React to Deflation?

consider VRNM and BP partnership an ethanol trade. Their biomass to ethanol process is in the black if gas is north of $3.00 dollars a gallon. A good trade to hedge a long oil position with me thinks and to diversify the corn ethanol hedge.

Energy Myths for the 21st Century

It is always a question of more or less really. I take issue with those who prima facie conclude that Malthus was wrong? More or less.... Yes, food production increased due to technological advances and yet we still do not see "full consumption" (e.g. a great number of people are starving.)

Well, people might counter, that is simply a distribution problem or the simply necessity of inequity. But wait, are not those key variables of the equation? So too it is with Oil production, supply, and demand. I think that point ought to ring polemical to any audience today should you wish to wake people up from their slumber and as Kafka wrote "have the effect of an axe on the frozen sea within."

But hey maybe its just me that has an overabundant need for drama...

The Top 10 Acquirers in Greentech

look for GE to be looking to buy BCON, smart grid energy play with existing or pending contracts on most of the major US grids

Oil / CAD Correlation Tested: Long Side to Benefit

Nice article. Another reason I like Oil related investments is that it is also effectively an investment in emerging and growth markets because Oil will benefit from an emerging market (based on the assumption that most emerging and growing markets increasing their use of oil).

Granted you would get better returns knowing which emerging markets grow but if you simply invest in oil (or energy related in general) you don't have to worry about picking the "winners" per se as oil will benefit. Just as oil took a huge tumble when the global economy supposedly came to a screeching halt last year, as it has ramped back up oil has had a nice run. So not only is it a hedge on the dollar but is a nice way to get some global exposure, especially if you are in a fund like JINRX or another global energy fund which includes stocks like CNQ and PBR.

I am also a proponent of alt energies and though you don't get the same US dollar short I think there are some great global solar investments.

Again, nice article.

Growing Fears in Oil

"The fact is the price of oil is up almost 62% this year."

That is certainly a fact that I will not dispute but to put in context oil is well below its all time high. But perhaps both of those price points (both the all time high and the price as of Jan 1) are anomalies. And that is why the short term oil trade is befuddled me thinks.

The Economic Impact of the G20 Ending Oil Subsidies

This is one of the most interesting articles that I have read on SA for some time. Granted it is speculative in nature (e.g. that the G8 will be ending subsidies for fossil fuels) but that is precisely what makes it so interesting. And further more, aren't we all here speculating about something or other?

I also happen to agree with most of the premises and conclusions of the author. Subsidies for fossil fuels are no longer giving us a valuable return on our investment. We need to diversify. Some might argue that it is not even a choice; we have to diversify.

I think the diversification argument holds as true for the individual investor as well as our gov't energy policy. We will see that played out in the coming years.

Talent shift: Could a high-IQ exodus from finance lead to stronger productivity growth and a more robust economy?

I concur with Annualgain. You are making a big assumption that there is in fact high IQs on Wall St. I think instead what you have is a lot of well intentioned people trying to make alot of money for themselves. Some of them may have high IQs.

I think the question that you really want to ask is will big money shift from Wall St. to finanancially reward genius of other fields (teaching, science, new technologies, etc.)

I do not believe that is likely however because of some very basic fundamental believes (that I don't personally share) of our society.

For example, we live in a society that appears to financially rewards great sport talent over teachers. But upon further inspectiion who is actually doing the rewarding? The private sector is giving out the big rewards. But that does not mean that they are attracting the best talent. They are simply attracting people that want to make money. Meanwhile tax payers certainly do not want to pay teachers more money for teaching their kids.



On Sep 18 11:51 AM Annualgain wrote:

> High IQ's on Wall Street? Where?

If free markets fail because humans are irrational, aren't the regulations we impose irrational too?

Cute but that is actually a faulty logic that you are working with there.

First off you are assuming a true premise, that humans are irrational. That may be true in some circumstances, but is it true across all circumstances and all the time? Smart people can do irrational things does that make them irrational? A .350 hitter can have a bad game does that all of a sudden make them a sub par hitter? Does the "irrational" description hold generally true and if so at what success or failure rate? If akin to baseball batters then maybe so.

Second, even if free markets fail because humans are irrational that does not then mean that regulation of those markets fails for the same reason.

One of the rationales behind free markets is human nature (if you believe in any such thing, that humans are innately or naturally selfish and that this has an overall beneficial effect for everyone, etc.). The argument for free markets is itself irrational but then the argument that they should be regulated does not then necessarily become irrational by virtue of this fact.

Thirdly, if free markets were a closed irrational system that were regulated from without (externally) then regulation could provide a sort of corrective mechanism immune to the irrationalism of that system. However, if both systems operate within a larger system of irrationalism (e.g. socio-political) which itself has no self-corrective system then all bets are off.

So to conclude, all baseball batters are sub-par and humans are not necessarily irrational but large numbers of them put in a certain context can surely ruin the world.

What's the U.S.'s Energy Policy?

Energy Policy is clear, the quesiton is how you spin it.

So called increase tax on traditional fossil fuel is merely a move away from subsidizing these forms of energy and moving towards subsidizing others (e.g. DOE grants and loan programs for alternative fuels).

Traditional fossil fuels have benefitted from billions in subsidies from the US govt (Did we ever call this socialism?). The move from traditional to alternative fuel subsidies has really nothing to do with "global warming" per se. Global Warming is not relevant to the new energy policy as much as clean air, water, and price stablization. The introduction of alternate fuels (albeit at a snails pace) is intended to bring competetiveness and an attempt to level the geopolitical energy playing field.

Call it socialism, call it Carbon Cap, call it a bad idea, good idea. There is clearly a policy there. Many don't agree with it. Quite frankly I think many don't understand it. As with most things, generally those that don't understand it or agree with it stand most to lose by it; those that stand most to lose by it, don't understand it. Those who lives might be impacted by it, don't agree with it.

If only this whole paradigm could be as simple as the ole tv tube being replaced by HD....of course I want a cleaner clearer picture of the world...

Countering Those Anti-Peak Oil Types

JeffDB, thanks for the very thoughtful reply. The 3.50 for biomass fuel is my recollection of one of Carlos Riva's (CEO of VRNM) quotes during a conf call. How accurate and optimistic it is I don't know but their technology is currently in use today.

As far as subsidies for oil, I don't have any literature per se and in any case I think historically the bulk of the subsidies have come in a variety of covert forms (e.g. various wars fought in the persian gulf for the last 20 years).

Interesting conjecture on the BP and Exxon Investments. I agree, it's a hedge against high oil. I would think the preferred alt investment from an oil company is going to be a liquid fuel that can be mixed and distributed along with existing fuel (gas, oil, diesel) infrastructure and I believe that both algae and biomass (both food and non-food grade) ethanol can be. I am only a proponent of the non-food grade type for the reasons you and others have pointed out (land and water uses).

Yes, following that analogy further, both the Food Industry and Drug/Pharma are feeding off eachother. One causes the disease and the other cures it. You can have your cake and eat it to. I think things will initially be the same with our fuel conversion....shades of green...gotta walk before we can run...

Again, thanks for the thoughtful dialogue.




On Sep 09 06:30 PM JeffDB wrote:

> On Sep 09 05:38 PM akapital wrote: