Friday, August 19, 2011

The Problem is not Peak Oil... the Problem is our Politics

"It's incredibly troubling to us as a free society that people would plead guilty to something that they actually did not do." Kay Levine, Professor of Law, Emory University

America's justice system continues to disgrace all Americans... I don't think I need to comment on this. Read it for yourself. Either they are guilty or they are not... being able to win a conviction from the Nancy Grace jury pool is not the point.


I don't know the writer's politics... but Libertarians will love this.  I look forward to the day that America can get over its post-war self and respect the rights and liberties of its own citizens while it eschews confiscating the people's resources in order to serve the inflated egos of (self)important politicians. Especially presidents (and that's coming from a guy that refuses to engage in "pathological hatred of the president posing as patriotism" and, I'd like to add "posing as an informed opinion" to that.


Prosecutors claim not to have enough evidence in this case of 2 Miami Beach police officers beating a civilian for turning them in for police brutality - evidence such as a broken nose, black eyes, cuff marks... yet have no problem bringing sexual assault cases (especially in custody cases) without any physical evidence whatsoever... that politics and corruption has infected the justice system with perp walks, attempts to taint the jury pool, selective persecutions... and judges that condone the whole sorry affair... well, we can do better than this.


The equity markets energy sector seems to be forecasting a steep decline for price of Oil... and it might happen (temporarily)... but I have been sitting with cash and put most of it to work in high dividend paying energy equities, which I view as trading at steep discounts... I don't know that I have ever mentioned names before, but now that I am no longer a "registered person" in the securities industry I am free to do so (and this is not investment advice or a recommendation.... you are on your own!).

Here are some names I have bought recently: Royal Dutch Shell (RDSB), Total (TOT), BP, Exxon (XOM), Conoco (COP), Chevron (CVX), Hess Petroleum (HES), Petro Bras (PBR), SeaDrill (SDRL, and ENI (E)... all but SeaDrill trade on the NYSE.  I also own most of the offshore drillers. Please notice that with the exception of PetroBras, these equities all pay big dividends; the average dividend is twice the yield on the 10 year Treasury. Oil might head lower in the short term... and it might not... that's the risk you take... but I will quote a smart guy I had dinner with recently... he's an energy analyst of sorts... "at this time we are FAR BELOW (my emphasis) the equilibrium price of Oil". 

I think Oil can double from here, and I think the energy equities can go 3X or 4X in that scenario. Time frame? Before Dec 2013. Its just a guestimate... arrived at by eyeballing the inelasticity of the price of Oil... if the data changes, I reserve the right to change my mind (unlike most American's and their political belief systems... if I am wrong, I am GONE).

Of course, I am wrong quite often... its not how you handle the winners that matter in this biz... its how you handle the losers.

Tuesday, August 16, 2011


I read this article about professionals that had spent nearly a decade of their lives foregoing income in order to get an advanced education so that they could make more money... only to, for one reason or another, be forced to do something for a living that they could have done right out of high school. (And I get it the whole enrichment thing... but we are talking money and finances here... something that can actually be measured.)

The writer explores the issue reasonably well... but without examining the most fundamental issues: Were these people financially "harmed" (please! let's forget intellectual "enrichment") by the educational decisions they made?

Education is often mis-credited as the source future wealth... but if that were true, why are the majority of student loans in default or deferment? The answer is simple and unavoidable... speaking in the aggregate for most "educational investors", otherwise known as students, the cost/benefit analysis is financially negative. While education CAN be a path to wealth - Surgeons and Trial Lawyers seem to do pretty well - it does not always work out that way... and while I have done no scientific study... we all know that with the human lifespan being what it is that there is a point of diminishing returns in paying to stay in school rather than getting paid to work.

In fact, judging by the nearly $1 Trillion in U.S. student debt... it would appear, that with the exception of Social Security and Medicare, that the university educational system is the greatest transfer of wealth -from the future earnings of today's students to the present day university faculty and administrators - in the history of such heists.

I remember when I went looking for work in the securities business... people would ask me where I went to business school... I replied "I don't have an MBA"... "then how are you going to work on Wall Street?"... I had already run a successful business that I started out of my 1 room apartment (after working for a few years in order to save some dough... I had all manner of sh#! jobs, and one good one) that had a couple million in revenue and a very acceptable bottom line before within 5 years... wasn't that good enough? As it turns out, the people hiring did not come from that type of background (working class, self-educated, and self made), so it was a pain in the a$$ catching on, but as it happens, luck was with me. I caught on at one of the top investment banks, and proceeded to tear into Graham & Dodd's "Securities Analysis" until I could quote the passages complete with page numbers... it is amazing what you can learn with a $2 library card or a $29.99 investment at Barnes & Noble... and in spite of my lack of "education", I was the number one producer of new business at the next 3 firms, firms that were populated with all manner of "credentialed" (the question should really be "Credentialed by WHOM"?) folk, I worked for before starting my own shop... Imagine that? Relying on your own wits. Who'd a thunk it? Certainly not the university/industrial complex... after all, one can't possibly think without their training... I have a 2 word comment for these folks... and it ain't "Thank you".

The point is this: there are all manner of opportunities in a market economy... the university/industrial complex has done an incredible job of convincing young people that their only hope of future success is through their choke hold... and the university/industrial complex will not let go of that choke hold (of course, the Web is going to disrupt them terribly... but notice that in this case the continued choke hold attempt of withholding the CREDENTIAL but not the education... Bizarre... ) until you are so deep in debt that you can never get out... this, despite the unassailable empirical evidence that the source of most millionaire's (not talking Billionaires here) wealth is their small business, savings, and home. So why are the dreams of the young people mentioned in this article being scaled back? Because somebody is trying to scare the sh#! out of them for their own self-interests, not the interests of these young adults. The bottom line is this: If it is financial security/wealth you seek open a business of some sort, buy a home, and have a family. If not, feel free to go into a lot of student debt, consider yourself more educated than the millionaire next door, complain relentless about the unfairness of the system, divorce, have no children/one child... sound familiar? I don't have to label them here... we all know who they are...

Young people: Don't you believe a word of this horse sh#! Go to work, save money, have a family, open a business, fail, try again, succeed, save, buy a modest home, buy modest cars, save, invest, work some more, and in between enjoy yourselves... you'll get there... and you will be far better off getting there and starving these M***** F*****'s while your'e getting there. You need enough money... but you won't get there by going into massive debt unless you come out the other side with a barrier-to-entry professional license that the market actually needs (think dentist, not accupuncture.. or as I call it inaccuratepuncture... and why, exactly, do dental schools require undergrad degrees in humanities? Do you walk to school or do you bring your lunch?).

I don't know how these f*&&^%!er's in the university/industrial complex live with themselves.

Monday, August 15, 2011

"Why the Left Fears Libertarianism"

Read this excellent article.

Thank Goodness! Somebody else sees the character assassination the Liberal Media and the Far Right (as well as their infiltration) did on the "Tea Party".

The Tea Party began as a Libertarian movement within the Republican party... how it morphed into being led by Bachman makes me ill...

We were so close.... yet so far... we just don't have the numbers yet to go it alone without the Religious folks that bring the debate exactly where the Left wants it. Bachman's anti-Gay and the Left pro-Gay debate is simply beyond unimportant, and as always, when jerks get together they bring the debate far away from where it should be - namely, that government has NO PLACE in the marriage business or our bedrooms.


BHO.... GWB.... the only thing separating these guys is Abortion. The major parties simply cannot govern.


Hoo- Boy! I gotta get my boots on from some stuff.  The B.S. just gets deeper and deeper.

Bernake is not responsible for screwing your grandmother... he is responsible for the U.S. banking system and is not terribly concerned with his "double mandate" at the moment.  nor should he be.

If the U.S. government were to go back on the "Gold Standard", wouldn't that be tantamount to abandoning the $$'s position as the global reserve currency? (In effect, wouldn't gold become the reserve currency?)  There might well come a day when that might happen... when it does, you won't be reading my blog... or any other blog for that matter... you will have far more pressing problems.

The U.S. banking system is back on the ropes... that's what the equity market just told everyone... Europe's financial leaders may or may not get it done... no matter what, none of it is inflationary.


The U.S. equity market got killed for a couple of weeks, and last week I felt that valuations on energy equites were simply outrageous... so I bought a bunch. Sometimes one should be buying the commodity... and sometime's the equities of the commodity producers... at these prices, I like the equities of the producers more.

Saturday, August 13, 2011

Whoa, Boy!

I have been going through a round of de-motivation. I have been blogging about what I see going on around me, admittedly from my own perspective, for 6 + years.

Watching the U.S. rack up $1Trillion budgets - 3 years in a row - so that no one has to "suffer", watching 50% of American children growing up with subsidized housing, or subsidized food, or subsidized healthcare, or housing or.... whatever (and growing up not to be self-supporting men and women but cowed slaves of the benevolent Big Brother), culminating in last week's S & P downgrade of U.S. debt... (and actually... I only WISH that were the culmination)...

Whoa, Boy! "May you live in interesting times"... and then I had the great pleasure to read this article today... only Mr. Podhoretz did not go far enough. I have said it before and I wills say it again:

The Left has been reduced to a One Issue movement or political group - and that issue is ABORTION.

Obama and his ilk have failed at everything... and have ruined anything and everything they have put their hands on... and yet, the intelligentsia still support these knuckle heads... WHY? Because, in the final analysis, they are being held together, and are surviving by, just one issue. Doubt this?

Think about it... if Obama and a couple of other big shot Leftist said that they stand by ALL of their silly Keynesian horse sh#!... BUT, had come to their senses and now reject the idea that somehow abortion is not killing innocent human beings for convenience... their party, movement, whatever you wish to call it... would disintegrate overnight. (Not long ago, they were the party of abortion and divorce... but the evolution of pre-nuptual agreements and the outright rejection of marriage took them down to the one issue...)

What does the Left stand for? Abortion and benevolent government (and an electorate addicted to that government's services). Benevolent government is imploding around us as we speak, irrespective of our willingness to notice... can you name something else the Left stands for? Come on... they are STATISTS... and the State has failed.... and yet they are still bound together... and by what? Abortion... with a little, and I mean very little, Gay marriage on the side.

Look, our system has some failures... the diversion of wealth to a very small fraction of the population is a glaring example... but maybe.... no, probably, much (with a large helping of political buy offs by the Elite) of that has to do with the values of the people participating and supporting the system... maybe by not saving and investing, by not demanding that our government run its finances appropriately, by not living within our means, being good neighbors and citizens that do not demand so much "free stuff", and believing that something can be had for nothing... the problem is US.

The Left is dead. They killed themselves with abortion (look at the offspring of the U.S. Supreme Court, the U.S. Senate, and the State Legislatures... the Republicans out breed Democrats nearly 2 to 1) and with failed policies.

Who will fill the void?

Tuesday, August 9, 2011

Lawlessness and "Thuggery"

The U.K. is experiencing U.S. style riots, at first mostly in its Black communities (I do not wish to offend... African American does not fit U.K. subjects)... and now spreading to other "working class" and impoverished areas.

The cause of liberty and small government are certainly NOT served by rioting, looting, vandalism, and violence.  The cause is served by hard work, diligence, respect for one's neighbors and the community at large, and the effort to further the interests of one's family through enlightened (as opposed to criminal) self interest. Did I mention not harming your fellow man? That, too.

The U.K. has, for the most part, no history of African slaves on its soil (although the U.K.'s merchant fleet seems to have trafficked in African slaves quite a bit)... why, then the outcome of hopelessness and lack of economic participation?

Me thinks the export of America's media has not helped the Black community in the U.K., if I make use of understatement.

I have feelings of solidarity for my fellow man when they are being oppressed, but I have little sympathy for those that will not help themselves, and nothing but scorn for those that would profit by exporting disaster to others. That would be you, Hollywood and the low life's running the world of Rap.


For the media nit-wits State-side that continue to stoke the flames of anger and resentment for political gain:

Please take a hard look at what is going on in London... and then keep in mind that the U.K. has a history of police restraint which the U.S. lacks... and that the U.S. has guns aplenty, something the U.K. lacks. There is enough dry tinder here to do some real damage to real people... no need to walk around setting off sparks and lit matches... that is, if you have any humanity at all.

Monday, August 8, 2011

The Delirious States of America

I listened to the President's speech today with dismay. So did every other market participant.

Clearly, the president is only interested in being re-elected, and has no interest in finance, mathematics, or economics (but he does seem to like to quote Warren Buffet... I am sick of Buffet-philes).  The U.S. cannot tax its way out of this problem.

IF the U.S. were to increase the government's revenues as percentage of GDP, net revenues will decline.

Does anybody not get that? That is, besides the "professional Left"?

The U.S. government has become a parasite on the world economy according to Vladimir Putin, current Prime Minister of Russia... unfortunately, the U.S. government has become a parasite on its own people. The parasite has to be scaled back, one way or another...

The dereliction of duty by the professional Left is simply a disgrace. So many of our "best and brightest" have taken leave of their faculties and have taken refuge in the balkanization of the Web, associating only with those that tow the party line... and allowing a few very twisted "experts" to do their thinking for them.

Keynesianism has failed humanity and much of humanity refuses to do the math because it doesn't comport with their belief systems... data be damned.

There is no point in "I told you so"

I'll spare you the "I told you so".

None of the actions taken by the U.S. Federal Government and regulatory authorities fixed anything over the past 3 years. Some of the actions taken were absolutely necessary to prevent the inconceivable... but since that time, no action has been taken that will actually fix ANYTHING.

The political battle of the "Know-Nothing's" continues... it seems that neither electorate identifying with the Right nor (ESPECIALLY) the Left, knows a g**-d*** thing.

Bright, educated people taking rock hard stands on issues that they have taken no time to understand... relying on the affirmation of their fellow "Know-Nothings"... this is no way to participate in the body politic... and yet it has become the entire body politic.


The financial markets continue to show deflationary pressures are upon us... the 10 Year U.S. Treasury note has a yield under 2.5%... even with the S&P downgrade. And speaking of THE downgrade... you have been put on notice... one way or the other, this will get sorted out, and under no scenario that I can foresee will deflation not be the bigger threat.


Oil is a volatile commodity... and right now the price of WTI is in the low to mid $80's.... but most of the world's consumed Oil is NOT prices by WTI.  Energy equities appear cheap to me (although they could get cheaper).

It is (long past) time to get small, and stay small.


We can't fix Afghanistan... we can't even fix Detroit. Af-Stan is not worth a single American serviceman's life.