The Price of Crude

The price of crude, and Bambi love by the media, these are the two things that just now interest me, and the price of crude interests me most.

Dropping again today, about four dollars when I last looked. The explanation given is that Dolly has been down graded --and some other trivial thing as well.

I do believe that lifetime professional analysts of the oil markets are genetically stupid. They have to be. I've been interested in this matter about a month now, and have read no more than two dozen articles, yet even I know that Dolly don't matter; the price of crude is not dropping because of any economic event anywhere, it's dropping because the American people want more exploration --and a change in public attitude is long term!-- and if they want more oil it's possible it might happen. This frightens the sacred cow --otherwise known as "speculator"-- and despite the religious stupidity of my conservative brethren who have no redemptive belief beyond the mindless mantra --Supply & Demand-- in fact the great changes that may occur (on the basis of the tiniest suggestion that there may eventually be a change in supply), is because current sacrosanct "speculators" are not speculators in the historical sense, men willing to take risk, but are in fact manipulators, men who have used vast sums to inflate prices, at no risk! simply because great sums can control markets; and they never expected any increase in supply.

These are pension fund investors, who's investment was 13 billion in 2003 and is 260 billion now. That's enough to set whatever price they want.

They do have a problem though. It's not their money. It's not their business to take risks. They're charged with maintaining the security of the funds they've been given. Those funds are secure as long as they can control prices. Lose that control, and they're no longer fund managers but true risk takers. If things collapse, they've been criminal. They have reason to be worried. Worried men make mistakes.

Since the price right now is so far outside of the rational --it should be somewhere around the price for the production of the last barrel of oil, around sixty bucks-- if the price ever does tend back toward the rational, they'll be wiped out. Couldn't happen to a nicer group of guys.

I think right now they're merely nervous, some are trying to back up a little. But anytime you start to back up there's always the chance you'll turn and run. Panic happens, and an orderly retreat is far harder than an orderly advance. Collapse could happen. As I've said, that will be good. Hopefully then all money managers will be shot.

Of course, this is speculation of my own and only as a recent interest and based on very little information. But a couple of things are clear:

--No man is more piously stupid about oil markets than a conservative in obeisance to the great god Free Market. They can not countenance the outrage of questioning the perfection of the great Saint, Speculator.

--There is no longer any such thing as a free market in oil, because so much oil is produced by Muslim and leftist countries who, since 9/11, don't much like us. This being now true, they can now collude, either attitudinally or in fact, and effectively always keep supply below demand, no matter how much we produce. They're quite willing to do it because at $140 per barrel they do have an income stream.

--They only way that collusion can be broken is if the price spike can be broken. If it is broken, if the price moves again towards production cost, oil drops in value by half; the income stream is broken and collusion is broken; and more oil is then released, not less, and the price drops further. But the only way that spike can be broken (short term) is if the institutional investors panic, and tip the present house in a matter of days.

So, will it happen? Might. Sure would be fun if it did.

Conclusion: The free market in reference to oil is a dead concept. There can be no free market as long as Islam is united against the West. Some new thinking will have to occur, some new market structure developed. Oil is no longer a commodity, it is a weapon. (The new Star Wars we need is new energy policy --nuclear and oil shale).

Note: Supposedly some new regulations concerning oil shale production are to be proposed today? That's a nice little additional impetus towards uneasiness in the markets.

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Futures closed down $3.09, I don't know what market.

Should give credit where credit is due. There's a good chance the Democrat move to curb "speculation in oil markets", just by the virtue of its being undertaken, is having a positive downward effect:

"The demand for 'paper barrels' ... has begun to swamp the price signals that are generated by the more traditional hedgers and the large producers and the consumers of petroleum products in tune to the real time dynamics of supply and demand," said Energy Committee Chairman Jeff Bingaman, D-N.M.
Republicans said the bill would have little if any effect and said Congress should instead lift a ban on offshore drilling along the Atlantic and Pacific coasts and the eastern Gulf of Mexico.

It's painful to me that my party is the dumb party in this matter, but at least they do want more drilling. But as I've said, drilling won't do it, because unless the price spike is broken OPEC can always keep supply below demand, no matter how much we drill. Failing breaking the price, the only thing we can really do is go nuclear --nuclear and shale.

Matters That Matter Not Bambi

Crude oil! Dropping like a rock! Maybe.

My own assessment is that this is not a suppy/demand equation, but a gremlin in the free market. At 60 dollars a barrel for the most expensive extraction now going on, but with oil at 140 a barrel, and supply only 500 thousand barrels a day short of world demand, it makes no sense that somebody isn't spending a hundred dollars to extract a barrel of oil for a forty dollar profit.

There can only be two reasons that's not happening: that the people who extract oil believe this is just a bubble, and so don't think the immediate extra expense to bring up low producing wells is worth the risk; or that there's just a gremlin inflating prices. That prices fell this week by nearly twenty bucks, just on the president's rescinding the Executive Order prohibiting off shore exploration, tells me it's a gremlin.

Just what the name of the gremlin is I don't know. It could be some sort of world wide hysteria, a belief that from now on and forevermore demand will always outstrip supply... This could be like a global warming scare, not believed with much reason but believed by everybody nevertheless.

Or it could be a resource nationalism, again a sort of global mind set, so many producing nations now content with the revenue they're getting, and content as well to draw things out so that their resources last longer. If this is true it would act like a restrictive collusion, though in fact just a shared mindset.

It could be the strangulation of environmentalism, such that oil shale and tar sands can't be developed. They certainly can't be developed just now on any large scale, and there's no present hope that environmental religiosity is going to pass anytime soon.

It could have something to do with fears of instabilities, but I doubt it, because it seems to me such fears produce spikes, not a steady climb. Same with "disruptions", that always happen here and there. Or it could have to do with...Speculators!

Actually, I'm inclined toward this idea, because of the vast sums new investors --institutional pension funds, that sort-- have put into the market. My reasoning on that is that pension fund money managers don't speculate, they invest in things that are secure. If that's true, then if they do "speculate" in oil futures, it's because they've come to see them not as high risk/high yield, but as secure. If they see oil futures as secure perhaps they see something most others don't, and what they see might be that if they can put in enough money, they can keep prices high, so that what had been risky become a sure bet. It certainly has been a sure bet for several years now. But Bush made an unexpected move when he removed executive objection to off shore drilling (He had been saying the congress had to act first, and no one would expect that a Democrat congress would act). But the worm begins to turn, the American people now support more exploration. If we could start drilling, that half million barrel per day deficit would disappear lickety-split. This becomes something of a fly in the ointment if you happen to be one of those with a lot of money tied up in futures. Maybe time to get out?

I haven't read any article were any analyst accepts that it was merely Bush's words that caused the downturn (many other reasons given), and certainly no professional analysts concerned for his reputation is going to suggest that speculators have anything to do with driving prices higher. But these people, after all, have their own pieties, just as well as anybody else: speculators are sacrosanct, presidents insignificant. But I have no such pieties, not pretending to expertise, I just note:

--Prices are way out of line with the cost of production, &
--If there is a gremlin, "speculators" --who "buy but don't sell"-- are certainly one possible villain.

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In other matters not Bambi I wonder if there's going to be a floor fight at Denver... 'Course, I guess that is sort of Bambi too.

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Note:
This is a link to the more standard explanations for the price drop. I'll note the drop started Tuesday, and continued Wenesday, Thursday, and Friday. Bush lifted the off shore drilling ban on Monday.

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Update, July 20.

Nice little post from something called American Sentinel, nicely written, making the argument that Bush rescinding the Executive Order prohibiting off shore drilling did make a difference:

Yes, yes, I know; as reported, the Bush43 order is mainly “symbolic.” But immediately following that announcement, the price of petroleum took a steep drop. Locally, we went from $4.05 per gallon to $3.90 per gallon in two days. Yes, yes, I know, there may be additional reasons why the price of petroleum plunged; but those reasons seem to be insufficient by themselves. According to Bloomberg, the factors at play were reduced tension between the U.S. and Iran; a slowing global economy; lower U.S. fuel demand; and rising supplies. But the lower domestic demand and the rise in supplies was not something major - - and even if the short term outlook has improved, why the steep drop in the oil futures market?

After all, the long term outlook for supply and demand hasn't improved, has it?

Actually, yes it has, and President Bushe's order on June 15 is an important part of why the futures market fell.

Always enjoy finding a man who agrees with me, at least on part of the argument. --Note: it was on Tuesday, not Monday, that Bush rescinded the order, and that was immediately when the drop started.

Cleavage

Working with a new concept. How about: Obama's handlers aren't political geniuses, but just very disciplined, well financed fellows with a script? By this idea, as long as the script is "correct", in terms of responding to the given political dynamisms, they do all right. But when the dynamism changes, and they have to adapt, they stumble.

The illustration on point would be Iraq. It was supposed to be a quagmire, nobody foresaw the turn-around coming (nobody on the left). Barack would run as the antiwar candidate of superior judgment. But there has been a turn-around and his judgment stinks, and his attempt to reposition himself has been immensely clumsy, such that now nobody knows for sure just what his position is but neither the right nor the left trust him.

Certainly it was expected that if he won the primaries he would then tack toward the center. But there was no thought that he would have to tack to the center on Iraq, which would remain a disaster. Now that it's not a disaster, but his repositioning is, he's going to Iraq. But this is a seat-or-the-pants move, it wasn't in the script, and I doubt that the puppet masters have any idea how it's going to turn out.

I do though, expect that they know exactly what they're going to attempt: It's not that Barack is going to adjust his views to the reality on the ground, it's that with all the publicity, reality is going to be made to adjust to his views.

His Iraq speech of a few days ago will be his position --still a 16 month time table. His speech after he comes back will affirm that the reality he saw on the ground supports the prescient judgment made in that speech before he left. Never mind whether it does or not, the press will define what Barack says as what is real. After all, reality is narrative, and the massive media coverage will confirm that what he saw is true and that what he suggests is wise.

I presume this is their intent, to use the fawning massive media to define a reality that will work until November.

I don't think though that it will work, and not because of the counter arguments of the blogs or talk radio. I don't think it will work because I don't think New York likes Chicago. Chicago is trying to do this all on their own, I don't think New York will accept that Chicago is setting spin. After all, The Spin, is their business. Chicago just butchers hogs, and nothing else that anybody cares about. I think that even during the trip, and certainly after, there will be "discordance". The message will not mesmerize. There will be gaffes, and dishonesties pointed out. The New Yorker cartoon was not a critique of the right, it was a first mockery of the Messiah. It's time to take him down a peg or two, cleverly, of course. It's not that New York doesn't want a Democrat as president, it's that they want to make it clear who it is that controls that president's fate, his success or failure, --and it sure isn't Chicago.

Who Likes Barack?

Nobody. He's not a likable guy. He's prickly, sour, and very tenderly full of himself. You can kiss his ring but you can't pull his leg. How can you joke about a guy you can't joke with? You probably can't, not in a good humored way, but you can mock. That means you have to dislike the guy, and the audience has to dislike him with you. Fifty percent of Americans do think he's a jerk, there's an audience out there.

But humor of it's nature, if it's mockery, is mean. And here's the PC rub: is it permissible to be mean to a black guy, a liberal black guy, even one so eminently mockable as this thin skinned thinly accomplished Barack?

Of course, No. One can not be mean to a jug-eared bozo if he's black. That would be "racist". But then, one man's racism is another man's satire. For myself I'll take my satire over your racism. And I'll chose to be a free man over a slave. No population that is afraid to mock its leader is temperamentally suited to be free. If Barack doesn't like jokes about himself neither does the Grand Ayatollah Kamenie. I don't like the Ayatollah and I don't like Barack, and besides, how do I know he doesn't like goats? He grew up in Indonesia, after all, and that's not America. I heard it said once that Bin Laden liked goats, --and people laughed. We do know that Barack likes Barack.

But I'm pretty sure the New Yorker doesn't like Barack. The cover cartoon that supposedly was mocking right wing attitudes towards the Obama's was in fact mocking the anointed one and spouse by the simple argument that they were the only ones on the cover. To assert, later, that this drawing simply illustrates the right wing's unfair stereotyping and paranoia is simply to assert, later, that this drawing illustrates the right ring's unfair stereotyping and paranoia. In fact the drawing is mocking Obama and wife, and only Obama and wife. Those so very sophisticated so very intelligent types who say: "Oh, I get it," don't get it; the cartoon mocks the messiah: and saying: "This is what the right wing thinks" merely makes the mockery PC acceptable.

Mockery was intended. In the same way that many on the left don't like Hillary there are many on the left who don't like Obama. It's just that it's very hard to criticize a black guy, so it has to be done by subterfuge and indirection. But the New Yorker, and I think now many in New York, really don't like that guy. The reasons aren't clear but they can be guessed. Some might be a mere Hillary preference, but I think most of it is pure Obama distaste. He's a new guy on the block, and an outsider. He's Chicago, and Chicago is trying to pull this off with no East Coast help at all. And of one thing I'm absolutely certain: the powers in the East are far more concerned that they keep their power within the left, than they are that there be a Democrat president rather than a Republican.

An Idea Worth Pursuit...

To start: It's hard to make fun of somebody you don't like; nobody can make fun of Obama; therefore nobody likes Obama.

This makes sense to me. In conversation, it's only when with friends in a jovial setting that the humor comes easily. A lot of that humor is making fun of those friends. Of course, jokes can be made of people not present --presidents, for example-- but the jokes have to have some lightness. You don't get much of a chuckle if the "joke" is only a vilification.

The best humor, certainly the easiest, is among friends about someone reasonably well liked.

Late night comedians, "among friends" --their audience-- can not make fun of Barack. That still argues that nobody likes him.

How about this: If you hate someone, it's hard to get a laugh unless your audience hates him as well. Well, late night comedians don't hate the Barack --they certainly had best not. There's rumor about that nuts have been threatened.

Or how about this, simply: To get a laugh you have to be on the same page as your audience. This observation I pronounce as true. Still, nobody can get a laugh about Obama.

That's incredible. The guys perfect material for mockery. Tiny face, big ears, as a starter. Huge ego, no accomplishment, as a follow. Constant gaffes, ignorance, flop-flipping, weird friends, "inartful" statements, an objectionable, foolish, overpaid virago of a wife... The guy is an absolute gold mine of the mockable...

Yet nobody cracks a joke.

Another idea: As the Emperor has no clothes, the Obambi has no humor. Could this be why there are no jokes, because one joke would indicate he has no clothes?

This makes a lot of sense to me. Once the jokes started they couldn't stop, because there's absolutely nothing about this guy that's not a joke. Get off the seriousness, move to mockery, and the floodgates open. The material is endless, and it would be a release. This business of having to pretend to take seriously a dope is hard on everyone.

So, I have solved the riddle: There are no jokes because, one joke cracked, the facade is cracked, and mockery pours through. It would be "the shot heard round the world." One wise crack would bring down the Messiah.

Interesting.

New York Hammers the Hog Butcher

From a Republican perspective things are going nicely: New York has decided to take out the Obama. Two evidences of this:
--The New Yorker July 21 cover, showing Obama as a Muslim, and his wife as a gun toting revolutionary; and in the same issue
--An article by Ryan Lizza: "Making it, How Chicago Shaped Obama", indicating not a great deal of accomplishment, but a certain comfort with the city, mayor, cronies, et al.

The hammer is falling. Why must it fall? This is the argument, from the beginning:

Obama is a puppet. The proof is that he's a dope, but he's been very successful. How can a dope be successful? Answer, only if somebody is pulling the strings. Who's pulling the strings? Well, Obama's never been anywhere but Chicago, thus, Chicago is pulling the strings. But who's "Chicago"? Not known, not determined, but it's clearly, et al. It realy doesn't matter, it's Chicago.

But in the most perfectly proper of all worlds who is it, properly, who "pulls strings", controls nations, sways governments, intimidates presidents, and just in general has knowledge of all that is moral? Why, The Great City. Surely. New York! Always! And always must it be so. So what happens if Puppet Barack becomes president? Fate! The World! Who would control the world? Well, not New York... but... dare it be said... the Hog Butcher! So gross!!! This the estimable men of the Center of All can not allow, and so they must take down the puppet (not that they have anything against the puppet, mind you) but they just can not allow goodness to be left to the ham-handed mercies of the Masters of Chicago. The spinning globe would unbalance, things would tilt, confusion would reign, men would be dizzied, the compass askew... And anyway, so gross, a president Hog Butcher defacto.

So the puppet Obambi must die. He may not win!

First strategy? Smear. Second strategy? Smear. Et al.

Supposedly the New Yorker cover is mocking the rabid Right's racist view of Obama and wife. My: "Bad racist Right. Shame!"; and the article is "objective".

If the Cover satirized the Right, some sort of rabid goon should be apparent somewhere, how else establish that only in the eye of a mind like that could there be such a racist view as this? But there is no such goon, and only one "eye" in this composition, the overview of that splendidly liberal cover moniker, The New Yorker. It's only, The New Yorker, as the "eye" sitting atop this scene, that casts down its gaze on this most problematic couple. And this is in fact what that eye sees: a problem. Never mind just what problem, and to whom, but they are a problem, and one thing you can do to people who are a problem is make them a threat. In an electoral system, those seen as a threat, if it's a wide enough and great enough threat, are no longer a problem. It's threat that the New Yorker wants to convey and it's threat they do convey, though not of the Right, but of the man they actually do fear.

So, so much for the cover. --The article, on the other hand, seems not to be a smear. I've read about as much of it as any ordinarily healthy American is going to read (they do have dull writers) and from what I've seen it seems fair. Damaging, of course, because, relatively at least, fair.

So, the Titans struggle. New York takes v Chicago. Goody. All we actually need is a tie. A death grip would be nice but a tie is just fine. That will give the reasonable part of the country an entertainment and a rest, and then that part of the country can give john McCain something to do for the rest of the next four years.

Tony Snow -- The Easy Life

Died today at 53. He had a wife whom he loved and who loved him. He had three kids, all apparently healthy, whom he loved and who probably loved him, about as much as kids do. And he was cheerful. What an easy life when you're cheerful.

And what a hard life when you're bitter. But how easy to be bitter and how hard to be cheerful! The cheerful in fact is magical, and the cheerful man a magician.

What a gift such a man is to himself and to those around him. There is good in life and there is bad. Stuff happens, and the good is certainly easier than the bad; but with either, if the fundamentally cheerful man is there, there is magic. How immensely I admire that magic, how splendidly Tony Snow plied that gift. It is a gift, yet I expect it takes work.

I am more cheerful for knowing that there can be a Tony Snow.

More Money Maunderings

An exceptionally interesting idea just popped into my mind as I was on the way to the bank to withdraw some of my own personal many millions: The reason the Obama campaign opted out of public financing is not because they expected to raise such huge sums, but because, not being tied to public funding, they would be in total control of whatever was raised.

If they accept public funding, after the convention they only control 84.1 million dollars. If they don't have that limit, they can request that all funds that would otherwise be contributed to Democrat groups in support of the candidate instead be contributed to the campaign directly. McCain's group, all sources combined, expects to raise and spend about 400 million between now and the election. McCain will only control the 84.1. Suppose Obama does only as well. His campaign would control all 400 million, that's 315.9 million more of control than McCain will have directly over his own campaign.

Here's why it's important: Obama has no accomplishments and no capacities. If groups other than his own put out ads, even though favorable to him, they won't be quite what his own organization would have put out. This means that there will be dissonance. Dissonance does not lull one to sleep, the mind still functions. Obama's campaign is purely one of mesmerization, no intellectually functioning human could think he's suitable to be president. That's why they need complete control. If the pro Obama arguments ever start to vary, the spell is broken, and the mind is free to think. Whether it will think or not is open, but at least then thought will be possible.

This is a good idea. I remember how when I was a kid I used to hypnotize chickens in my Grandparent's farm yard. You hold them firmly, lay them on their side with their necks stretched out a bit, and then slowly draw a line in the dust in front of their beaks. Withdraw, and they just continue to lay there. Just why that happens I don't know, but it does, and it's just amazing to see a perfectly healthy chicken just lying there flat on its side, paralyzed from movement.

I used to see how many I could get down at once. Sometimes I could get down a dozen, but there was always one problem: if there was any kind of wind at all, at some point a light leaf would be blown in front of the chicken's line of sight. And the spell would be broken. Up would get the chicken, slightly shaking its head before getting it's bearings back and suddenly scuttling off. Then they would all get up, all the chickens. All my work ruined by just that one little light flying leaf.

So too the Obamians. It's true that many are not quite so bright as a chicken, but many are. If the spell is broken, a lot of them are going to cease lying there with their necks stretched out. A lot of them will get up, shake their heads, and go do something else.

The Obama camp has to control the message. Anything off message, and the regular pendular swing of the golden coin is broken, the spell is broken, and the chump just stands there with his grin.

I do expect this will happen, and when it does it will happen like the snap of a finger.

Money Update

Dear K,

I don't know how well your news sources follow this, but this is what I know:

--McCain raised slightly more money in June than in May, and in May he raised slightly more than Obama. (Obama hasn't reported his totals yet for June and doesn't have to until the 20th.)

--The RNC is raising many more times money than the DNC. Almost all of this money goes to support McCain.

--Taking these two sources together McCain has about three times as much in the bank as Obama, and expects to have 212 million ready to spend after the convention (84.1 public financing; that's the only money McCain will directly control).

--A lot of the nutroots --the small donors that supposedly explain the Obama fund raising phenomena-- are saying: Not another dime from me! That's because they don't like his move to the center.

--Hillary's big donors are not forking out. They intend to --Democrats uber allas-- but haven't yet, just because in private meetings with Obama they haven't liked his condescending manner. ("Underwhelming", quotes Robert Novak.)

--And Democrat dissatisfaction with Obama is rising! However he might be doing with independents, more Democrats dislike him now than during the primaries (there are polls showing this, as well as increased acrimony in the comments sections of liberal blogs). Since he doesn't technically yet have the nomination sewn up, that's not really the direction he wants to go; and Hillary is doing nothing to help him. She in fact made a point of showcasing his flip-flop on FISA (which for some reason does actually matter to the far left). She voted against it --feisty girl!-- while he placidly went along with it.

--Obama's numbers when they come out will be interesting. His contributions have been falling 20% a month since January. What he gets from small donors will be down for sure (there's no real reason to give just now, plus so many are now angry); and who the big donors are will be important. If a lot of them aren't Hillary supporters he'll be in bad shape, even if he actually out-raises McCain.

--The joke on the web is that he's going to have to flip-flop-flip; he'll have to decide public financing is a good idea after-all. Nobody actually knows how he's doing.

--A lot of Hillary supporters still haven't given up. There's a group called PUMA (Party Unity My Ass). As a Republican I have to say they're my kind of people.


See you, --M

Great Minds...

...think alike. I'll have to do more on this latter.

But someone, someday in the major media is going to wake up and take a good long look at Barack Obama's campaign and notice something very strange; it is staffed from top to bottom with Chicagoans who have mostly made their bones working for Mayor Richard Daley and the Chicago Machine.

It is not an exaggeration to say that Barack Obama's campaign is being run out of Chicago. He recently moved most of the Democratic National Committee functions to the Windy City and his campaign headquarters is there as well.

The question the press might want to ask would be is there anything being "run" in Chicago that doesn't have Mayor Daley's fingerprints all over it?

And I'm going to speculate how it might be possible to make the New York Times bitter about this. After all, it is New York that controls the world, and not some hog butcher in the Midwest.

Whoops. For some reason the above link doesn't work. It's from a piece by Rick Moran at The American Thinker; so instead I'll post the link to the article from which Moran's is taken: Seth Gitell, writing for the New York Sun: A Cog in the Chicago Machine.

To Post Onward!

I think I've had enough of a break now from the political season to go back to writing a bit without gagging. I really did overdo the primaries. Who in the world cares that much? Life gets thin if it's just politics.

My present appreciation of Obama is that he's just a "Yes Massa" black boy from Chicago with a grin. "What Obama really is?", "What Obama really believes...?" Who cares? Silly questions. I don't think Obama even is. I don't think he has anything to do with his campaign and I don't think he'll have anything to do with his presidency. I think he's pure Chicago. Chicago runs his campaign, Chicago will run his presidency. He'll do what he's told.

Who"Chicago" is, I don't know, I just know it's not Barack. His whole career has been white people giving him things. Now he wants white people to give him the presidency. It could happen. But at least it won't be Barack, "the radical", running things, it will be "Chicago boyz" running things, Chicago style. That's probably good, it just means corruption and graft; but we'll be safe. No mobster would want Al Qaeda moving in on his turf.

I suppose this is an idea that could be fleshed out. I'll say now only that it's strongly my impression. I has been my unchanged impression for weeks. I simply never see any evidence of Barack being in command; I've seen no evidence that anytime in his life he's ever been in command.