At last they are starting to see that their constituencies are running the show and not the environmental wackos. Americans want to put their energy security in their own hands and not hand it off to Mullahs and Chavez. And on reading this I find it too bad that Jim Webb (D Va.) isn't running for President instead of Obama.
Sen. Jim Webb (D-Va.), fresh from his GI Bill victory, said that he is now making energy a major priority. “We need to look at all our assets,” he said, suggesting a large package including expanded offshore drilling, alternative energy, nuclear power and technology to make coal cleaner.
I am really heartened by talk like this from the Dems. At the very least I hope a guy like Jim Webb becomes Obama's Energy Czar. He actually gets it that we need to change our behavior toward oil and nuclear in order to get control of our national security. The Japanese and the French get 70% of their power from nuclear energy why shouldn't we? Hell, we invented the technology! Nuclear is the short term fix and alternative energy is the long term fix.
We can't just give in to the the Sierra Club and those people that want to protect the view from their million dollar homes. Hell, we probably wouldn't even be embroiled in the Middle East (at least since the 70s) if we had total control of our energy security. Part of the reason we propped up dictators and other undesirables in that area for so long is because we didn't want the Soviets to hurt our oil supply.
You could make the argument that we are filling up our tanks with the very thing that will get us embroiled in every hot war for the next century. We are actually giving the Mullahs money so that they can build nukes, and fund Hezbollah, so they can wipe Israel off the map. Even though we aren't buying Iranian oil directly all they have to do is pop off a few missiles, and it sends oil prices up, and it enriches them. So I guess the Dems are finally starting to understand that to "Stop the War with Iran" we need to throw the environmentalists under the bus.
Thursday, July 10, 2008
Wednesday, July 09, 2008
Hedge Funds Beat Down in 2008
I guess they just weren't ready for high oil prices and an economic downturn at the same time. I wonder how these guys would have done in the early 70s?
Hedge funds delivered their worst performance on record during the first half of 2008, revealing that the industry has not been immune to the broader market turmoil.
As a group, hedge funds declined 0.68% through the end of June, and are down 0.75% so far this year, according to numbers published this week by industry tracker Hedge Fund Research.
The figures represent the worst first-half of the year performance for the industry since the research group began tracking returns in 1990.
Hedge funds delivered their worst performance on record during the first half of 2008, revealing that the industry has not been immune to the broader market turmoil.
As a group, hedge funds declined 0.68% through the end of June, and are down 0.75% so far this year, according to numbers published this week by industry tracker Hedge Fund Research.
The figures represent the worst first-half of the year performance for the industry since the research group began tracking returns in 1990.
Iran Tests Missile: Oil Goes Up
Sure enough the Iranians pop off a few missiles and oil prices go up. Luckily for everyone who isn't long oil the market settled down once the Supply Report showed that gas stores built up yet again.
Gasoline inventories were up by 900,000 barrels for the week, nearly double the 500,000-barrel boost expected by Platts. Over the holiday, gasoline stocks usually decline or are flat.
The rise in supplies "implied demand for gasoline is tapering off," said Tom Orr, head of research for Weeden & Co.
I think $4 gas is some kind of break point when it comes to gasoline supply/demand. People will just drive less and start to change their behavior and buy smaller cars to compensate.
Gasoline inventories were up by 900,000 barrels for the week, nearly double the 500,000-barrel boost expected by Platts. Over the holiday, gasoline stocks usually decline or are flat.
The rise in supplies "implied demand for gasoline is tapering off," said Tom Orr, head of research for Weeden & Co.
I think $4 gas is some kind of break point when it comes to gasoline supply/demand. People will just drive less and start to change their behavior and buy smaller cars to compensate.
Tuesday, July 08, 2008
TheWhoFarm Message Clouded by Stunt
I agree with much of their message. I support energy independence, the need to develop alternative energy and even buying local produce but this is case-in-point why hardly any regular Americans listen to environmentalists.
TheWhoFarm, that’s who, a newly minted publicity-seeking environmental collective with an agrico-political mission: to persuade the 44th President of the U.S. — whoever that turns out to be — to transform the White House’s 17-acre lawn into an organic farm.
“We’re here to restore the edible landscape,” says Daniel Bowman Simon, 28, the group’s organizer and spokesperson and a young man given to making grand pronouncements. “We want to bring seeds of change back to the White House.”
So they are going to break the world record for standing in line for a product which happens to be the 3G IPhone. That means that this group instead of being productive members of society are camping out for a week to buy a $299 phone and are trying to get the President of the United States to turn the White House lawn into an organic farm. Just think about that for a second.
They do have a sustainable living message but it gets buried under a publicity stunt and the idea that they have the time and the means to wait in line for 7 days in order to buy a phone. They even got free publicity from Fortune magazine.
This is exactly why their message falls on dead ears with the majority of Americans. People that have to work for a living do not have the means to eat healthy foods which usually costs more, wait in lines in front of the Apple Store for 7 days, or even afford to buy 3 IPhones (their leader Daniel Bowman Simon is buying one for himself, one for Obama, and one for McCain.) How can people that are so divorced from reality like members of TheWhoFarm relate to regular Americans?
The sad part is that I think their base message is a very good one. Buying food grown locally helps keep small farmers in business and stops all of the transportation costs it would take to get food from Chile or wherever. I don't care about the carbon footprint but I do care about the diesel fuel that powers all of those trucks, dry bulk tankers etc. might be(after being refined) coming out of an Iranian oil well.
I think the sustainable living message of groups like TheWhoFarm would connect with more Americans when you tie foreign oil to security, and high gas pricing as enriching the very countries that hate us. If you eat an apple grown in upstate New York you are taking your security and well being back from the Oil Sheiks and the Socialists Dictators.
TheWhoFarm, that’s who, a newly minted publicity-seeking environmental collective with an agrico-political mission: to persuade the 44th President of the U.S. — whoever that turns out to be — to transform the White House’s 17-acre lawn into an organic farm.
“We’re here to restore the edible landscape,” says Daniel Bowman Simon, 28, the group’s organizer and spokesperson and a young man given to making grand pronouncements. “We want to bring seeds of change back to the White House.”
So they are going to break the world record for standing in line for a product which happens to be the 3G IPhone. That means that this group instead of being productive members of society are camping out for a week to buy a $299 phone and are trying to get the President of the United States to turn the White House lawn into an organic farm. Just think about that for a second.
They do have a sustainable living message but it gets buried under a publicity stunt and the idea that they have the time and the means to wait in line for 7 days in order to buy a phone. They even got free publicity from Fortune magazine.
This is exactly why their message falls on dead ears with the majority of Americans. People that have to work for a living do not have the means to eat healthy foods which usually costs more, wait in lines in front of the Apple Store for 7 days, or even afford to buy 3 IPhones (their leader Daniel Bowman Simon is buying one for himself, one for Obama, and one for McCain.) How can people that are so divorced from reality like members of TheWhoFarm relate to regular Americans?
The sad part is that I think their base message is a very good one. Buying food grown locally helps keep small farmers in business and stops all of the transportation costs it would take to get food from Chile or wherever. I don't care about the carbon footprint but I do care about the diesel fuel that powers all of those trucks, dry bulk tankers etc. might be(after being refined) coming out of an Iranian oil well.
I think the sustainable living message of groups like TheWhoFarm would connect with more Americans when you tie foreign oil to security, and high gas pricing as enriching the very countries that hate us. If you eat an apple grown in upstate New York you are taking your security and well being back from the Oil Sheiks and the Socialists Dictators.
Are Speculators Driving Oil Markets? By the Numbers
Now this article has some very sobering statistics on how the Futures Market have changed in the past 5 years. The market used to be 70% legitimate hedgers.
That's not our present world, though. Today roughly 30% of market participants on the New York Mercantile Exchange (NYMEX) are identifiable hedgers with a legitimate business purpose. That fact and a twenty-fold increase in capital flowing towards commodity futures during the past five years - growing at a rate of $1 billion in contracts per day - point to a remarkable shift in how futures prices get set, by virtue of who's around to set them.
Today the number of paper oil barrels traded daily on NYMEX (and that's just the most regulated exchange) is over three times the number of physical barrels consumed daily worldwide.
Supply and demand of the physical product, by and large, has remained fairly stable. In 2005, global oil production was 84.6 million barrels per day, and consumption was 83.6 million. Today, those numbers are 86.5 million and 86.4 million.
So supply and demand in actual oil is about equal, only 30% of the market are legitimate hedgers that need the market to protect their prices going forward, and billions of dollars of liquidity is chasing fewer barrels of actual oil. No wonder prices have tripled.
That's not our present world, though. Today roughly 30% of market participants on the New York Mercantile Exchange (NYMEX) are identifiable hedgers with a legitimate business purpose. That fact and a twenty-fold increase in capital flowing towards commodity futures during the past five years - growing at a rate of $1 billion in contracts per day - point to a remarkable shift in how futures prices get set, by virtue of who's around to set them.
Today the number of paper oil barrels traded daily on NYMEX (and that's just the most regulated exchange) is over three times the number of physical barrels consumed daily worldwide.
Supply and demand of the physical product, by and large, has remained fairly stable. In 2005, global oil production was 84.6 million barrels per day, and consumption was 83.6 million. Today, those numbers are 86.5 million and 86.4 million.
So supply and demand in actual oil is about equal, only 30% of the market are legitimate hedgers that need the market to protect their prices going forward, and billions of dollars of liquidity is chasing fewer barrels of actual oil. No wonder prices have tripled.
FED Rolls Out New Home Loan Rules
It seems like the FED shouldn't be doing this kind of thing. It seems to be something that Congress should be doing. I guess it deals with banks and lending so that is why they are the ones who are cracking down.
The plan, which will be voted on at a Fed board meeting on Monday, would apply to new loans made by thousands of lenders of all types, including banks and brokers.
Under the proposal unveiled last December, the rules would restrict lenders from penalizing risky borrowers who pay loans off early, require lenders to make sure these borrowers set aside money to pay for taxes and insurance and bar lenders from making loans without proof of a borrower's income. It also would prohibit lenders from engaging in a pattern or practice of lending without considering a borrower's ability to repay a home loan from sources other than the home's value.
The plan, which will be voted on at a Fed board meeting on Monday, would apply to new loans made by thousands of lenders of all types, including banks and brokers.
Under the proposal unveiled last December, the rules would restrict lenders from penalizing risky borrowers who pay loans off early, require lenders to make sure these borrowers set aside money to pay for taxes and insurance and bar lenders from making loans without proof of a borrower's income. It also would prohibit lenders from engaging in a pattern or practice of lending without considering a borrower's ability to repay a home loan from sources other than the home's value.
Monday, July 07, 2008
Case By Case Analysis of McCain's Economic Plan
First of all he needs to fix this section so that is isn't so damn long winded. I bet that I may be one of the few voters that is going to read through this whole mess. McCain should either use bullet points or separate things into distinct pages grouped by what he intends to do to fix the economy. For instance have something like "McCains Plan to Help With Higher Living Costs" with a click-through. In any case here is a breakdown:
1. Helping Americans Confront Higher Living Costs: He intends a gas tax holiday, stop filling the SPR, ending Ethanol subsidies, tariff barriers and sugar quotas drive up food prices and hurt Americans.
This seems like a pretty decent populous message but it is seems to be shooting pretty low when things really need to change. It kind of feels that the McCain camp has no idea of what government should do to confront higher living costs and just put some populous stuff up there and hoped for the best. We need nuclear plants, alternative energy, and shouldn't be using corn to power our cars. Nuff said.
2. Helping Americans With The Housing Crisis: Create a new HOME plan that allows Americans to trade in their home loan for a new FHA Home loan.
It sounds like a sound plan but the eligibility requirement seems pretty onerous though.
Holders of a non-conventional mortgage taken after 2005 who live in their home (primary residence only); can prove creditworthiness at the time of the original loan; are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and can meet the terms of a new 30-year fixed-rate mortgage on the existing home.
So this person has to provide creditworthiness at the time of the loan? It would seem logical that quite a few people that took out a non-conventional loan in 2005-2007 did so because their credit was not good enough (or their income wasn't high enough) to qualify for that 30 year fixed rate loan. Or they just bought too much house and can't afford the payments. I guess these people lose their homes.
Also you have to wonder if this person was delinquent or facing a reset or whatever then they probably couldn't qualify for a new 30 year fixed rate mortgage since they now have a damaged credit rating. In any case he doesn't describe what would happen to a person who took out a loan that is over the FHA limit of $260K. Would this person get a partial refinance or how would that work?
3. Cutting Taxes For The Middle Class: McCain will repeal the AMT and double the personal exemption for dependants
Both things do not affect me so I really don't care either way. I know the Alternative Minimum Tax is dreaded by many upper middle class Americans (or even families with two wage earners) so that tax should be abolished. The other cut will put more money in the pockets of families and I guess that is a good thing.
4. Pro-Growth Tax Policy: He will keep taxes low on entrepreneurs, keep the current income and investment tax rates, get rid of estate tax, require a 3/5th majority to raise taxes, keep dividend and investment tax rates, allow companies to deduct the cost of equipment investment.
This seems pretty strait forward and would be what I would base quite a bit of my support on. I think something that is risky like collecting a capital gain should not be taxed at all. You might lose your entire investment if things turn sour or you aren't careful. Why does the government deserve a cut of my risk? I think something called the "death tax" needs to be repealed on general principal. While the 3/5 majority would work on paper but it seems like it would be unconstitutional. I think the deduct the equipment thing would be a great boon to some businesses and would encourage capital spending that might actually hasten a recovery.
5. Tax Cuts On American Employers: John McCain Will Reduce The Federal Corporate Tax Rate To 25 Percent From 35 Percent.
This may be a difficult row to hoe with all that anti-corporation rhetoric going on. Maybe tie this to a public works initiative. For instance if a company gives a certain certain percentage of their net income or products to charity then they would qualify for the lower rate. The Department of Human Services or some other agency would be in charge of seeing if the company qualifies for the so called "helpful corporations tax rate."
So for instance Eli Lilly gave away $ x-billion in free drugs to inner city clinics then they would get a 25% rate instead of a 35% rate. Make giving to charities a financial imperative that actually acts in the shareholders interest. Then corporate responsibility would translate directly into increasing the bottom line. Hell, the SEC could even put this into the 10Q with a line that had the amount and sizes of charitable acts that triggered the 25% tax rate.
6. Pro-Innovation Tax Cuts: McCain will ban internet taxes, prohibit new cellular phone taxes, and establish Permanent Tax Credit Equal To 10 Percent Of Wages Spent On R&D.
This seems like a pretty good idea but that last one seems kind of needlessly complicated to me. I guess it is for companies and should incentivize them to spend more on R&D. I'm not sure why it is based on wages and not total dollar expenditure. I guess it is to encourage companies to either pay their scientists more or perhaps increase R&D head count.
7. Retirement Tax Cut: John McCain Will Act To Lower Medicare Premiums.
Of course he doesn't say how he will pay for this. I guess though spending decreases or something.
8. A Real Choice For Simpler Taxes: It will give Americans the choice of staying under the old system or switching to a new system with two tax rates and a "generous" deduction.
This seems like a good idea but the IRS would have to build on another "simple system" tax arm in order to process a completely new type of tax form. Also would this system bring in less or more revenue? It will also crate a cottage industry of tax pundits advocating one plan over the other for a given tax payers financial situation.
9. Reforming Washington Eliminating Wasteful Spending: John McCain Will Stop Earmarks, Pork-Barrel Spending, And Waste.
This whole part should be in a totally different page and just linked to the main economic plan. They should also site some of the bills that McCain labels as pork and who issued them. I think McCain needs to hire some web people who know about ease of web-site usage.
Basically he wants an line-item veto so he can cut out the pork and reduce earmarks. However he doesn't provide a linked-to example on what he deems pork. I heartily applaud him for it but I'm not sure if a line-item veto is constitutional or not.
10. John McCain Has The Leadership And Courage To Make The Right Spending Choices. He will basically balance the budget.
This seems like a very laudable goal if he can actually achieve it. I however think that as long as we are fighting two hot wars in Iraq and Afghanistan we would have a hell of a time balancing anything with our economy going so slow. It was easy for Clinton to do because we had freed up that Cold War money and rode a massive tax boom due to the Internet Bubble. McCain has two hot wars, an economic downturn, the subprime mess, a banking mess, as well as insane gas prices killing consumer spending to worry about. Balancing the budget may be too much to ask.
11. Eliminate Broken Government Programs. The federal government itself admits that one in five programs do not perform.Reform Our Civil Service System To Promote Accountability And Good Performance In Our Federal Workforce. Eliminating Earmarks, Wasteful Subsidies And Pork-Barrel Spending. Reform Procurement Programs And Cut Wasteful Spending In Defense And Non-Defense Programs.
This seems like a good idea as well. However he talked about earmarks and cutting pork in issue 9 above. This is where he should put his actual plan for overhauling every agency that he deems "broken" (if he has a plan) and what concrete fixes he plans to make on those departments. Put it under the title of "The Government if Broken! I'm the Repairman! Here's what I'm going to do." with a picture of him rolling up his sleeves or perhaps wearing a tool belt.
12. Budgetary Reform To Give Tax Cuts A Fair Chance: John McCain Will Reform Budgeting To Treat Equally Spending And Taxes And To Stop Damaging Tax Hikes
A lot of funny double talk in this statement. I think this section should be rewritten because it seriously reads like gibberish. It seems to be something about reforming the budgeting process by taking tax cuts off of the books or something. It is just Beltway nonsense that regular Americans don't care about.
13. Reforming Entitlement Programs For The 21st Century: He will Reform Social Security, control Medicate Growth, Cut Prescription Drugs to the Rich.
This is basically private accounts which actually kicks massive ass. In fact I would love it if they poured my Social Security money directly into my 401K so I can manage it myself. There are no concrete plans to his Medicare reform it is just platitudes. He promises to do something about premiums rising so fast but doesn't say what. The prescription drug cut for rich dudes is a no brainer issue as well.
14. Promoting Trade and Competitiveness: John McCain Will Lower Barriers To Trade and make American workers more competitive:
He wants a strong dollar and a whole bunch of new trade deals to "even the global playing field." I just don't understand the Dems opposition to free trade sometimes. If you make a Colombian person richer you create a new consumer that will eat American Taco Bell, watch American DVDs, and shower with Axe Bodywash.
Of course that Colombian will be replacing a low skill job that could go to an American. But maybe that job could seriously help a third world person get out of a third world situation. Even a low skilled American worker has a better lot in life then many Colombians. I thought the Dems were all about helping the people of the world. I guess that was the JFK Democratic party.
Also McCains plans to make Americans more competitive seems like more platitudes and amounts to nothing concrete. If he had a plan to send every American that can't afford it to a trade school or get them a college degree then it would be an actual plan. However McCain just has some vague ideas on this.
15. Reforming The Unemployment Insurance (UI) System: John McCain Believes We Should Have A Single, Seamless Approach To Job Transition Assistance. John McCain Will Reform The UI System So That A Portion Of Each Worker's Unemployment Insurance Tax Is Deposited Into A Lost Earnings Buffer Account (LEB). John McCain Will Reform Training Programs To Provide Quick Assistance To Workers Seeking New Skills. John McCain Will Provide Special, Targeted Assistance For Older Workers.
Now this is some actual meat buried at the very end of this mountain of poorly presented ideas. This LEB seems like some kind of fallback account for people that lose their jobs and can actually be retained if they get another job quickly. Seems like a good idea but who is going to manage it?
I wonder how close this LEB will be to the 6 months of full pay that people say they need to have in liquid savings if you lose your job. In any case this will put a nice buffer in place for people that are living paycheck to paycheck so they don't have to worry about getting the axe. Too bad this great idea is buried at the end where noone is going to read it.
1. Helping Americans Confront Higher Living Costs: He intends a gas tax holiday, stop filling the SPR, ending Ethanol subsidies, tariff barriers and sugar quotas drive up food prices and hurt Americans.
This seems like a pretty decent populous message but it is seems to be shooting pretty low when things really need to change. It kind of feels that the McCain camp has no idea of what government should do to confront higher living costs and just put some populous stuff up there and hoped for the best. We need nuclear plants, alternative energy, and shouldn't be using corn to power our cars. Nuff said.
2. Helping Americans With The Housing Crisis: Create a new HOME plan that allows Americans to trade in their home loan for a new FHA Home loan.
It sounds like a sound plan but the eligibility requirement seems pretty onerous though.
Holders of a non-conventional mortgage taken after 2005 who live in their home (primary residence only); can prove creditworthiness at the time of the original loan; are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and can meet the terms of a new 30-year fixed-rate mortgage on the existing home.
So this person has to provide creditworthiness at the time of the loan? It would seem logical that quite a few people that took out a non-conventional loan in 2005-2007 did so because their credit was not good enough (or their income wasn't high enough) to qualify for that 30 year fixed rate loan. Or they just bought too much house and can't afford the payments. I guess these people lose their homes.
Also you have to wonder if this person was delinquent or facing a reset or whatever then they probably couldn't qualify for a new 30 year fixed rate mortgage since they now have a damaged credit rating. In any case he doesn't describe what would happen to a person who took out a loan that is over the FHA limit of $260K. Would this person get a partial refinance or how would that work?
3. Cutting Taxes For The Middle Class: McCain will repeal the AMT and double the personal exemption for dependants
Both things do not affect me so I really don't care either way. I know the Alternative Minimum Tax is dreaded by many upper middle class Americans (or even families with two wage earners) so that tax should be abolished. The other cut will put more money in the pockets of families and I guess that is a good thing.
4. Pro-Growth Tax Policy: He will keep taxes low on entrepreneurs, keep the current income and investment tax rates, get rid of estate tax, require a 3/5th majority to raise taxes, keep dividend and investment tax rates, allow companies to deduct the cost of equipment investment.
This seems pretty strait forward and would be what I would base quite a bit of my support on. I think something that is risky like collecting a capital gain should not be taxed at all. You might lose your entire investment if things turn sour or you aren't careful. Why does the government deserve a cut of my risk? I think something called the "death tax" needs to be repealed on general principal. While the 3/5 majority would work on paper but it seems like it would be unconstitutional. I think the deduct the equipment thing would be a great boon to some businesses and would encourage capital spending that might actually hasten a recovery.
5. Tax Cuts On American Employers: John McCain Will Reduce The Federal Corporate Tax Rate To 25 Percent From 35 Percent.
This may be a difficult row to hoe with all that anti-corporation rhetoric going on. Maybe tie this to a public works initiative. For instance if a company gives a certain certain percentage of their net income or products to charity then they would qualify for the lower rate. The Department of Human Services or some other agency would be in charge of seeing if the company qualifies for the so called "helpful corporations tax rate."
So for instance Eli Lilly gave away $ x-billion in free drugs to inner city clinics then they would get a 25% rate instead of a 35% rate. Make giving to charities a financial imperative that actually acts in the shareholders interest. Then corporate responsibility would translate directly into increasing the bottom line. Hell, the SEC could even put this into the 10Q with a line that had the amount and sizes of charitable acts that triggered the 25% tax rate.
6. Pro-Innovation Tax Cuts: McCain will ban internet taxes, prohibit new cellular phone taxes, and establish Permanent Tax Credit Equal To 10 Percent Of Wages Spent On R&D.
This seems like a pretty good idea but that last one seems kind of needlessly complicated to me. I guess it is for companies and should incentivize them to spend more on R&D. I'm not sure why it is based on wages and not total dollar expenditure. I guess it is to encourage companies to either pay their scientists more or perhaps increase R&D head count.
7. Retirement Tax Cut: John McCain Will Act To Lower Medicare Premiums.
Of course he doesn't say how he will pay for this. I guess though spending decreases or something.
8. A Real Choice For Simpler Taxes: It will give Americans the choice of staying under the old system or switching to a new system with two tax rates and a "generous" deduction.
This seems like a good idea but the IRS would have to build on another "simple system" tax arm in order to process a completely new type of tax form. Also would this system bring in less or more revenue? It will also crate a cottage industry of tax pundits advocating one plan over the other for a given tax payers financial situation.
9. Reforming Washington Eliminating Wasteful Spending: John McCain Will Stop Earmarks, Pork-Barrel Spending, And Waste.
This whole part should be in a totally different page and just linked to the main economic plan. They should also site some of the bills that McCain labels as pork and who issued them. I think McCain needs to hire some web people who know about ease of web-site usage.
Basically he wants an line-item veto so he can cut out the pork and reduce earmarks. However he doesn't provide a linked-to example on what he deems pork. I heartily applaud him for it but I'm not sure if a line-item veto is constitutional or not.
10. John McCain Has The Leadership And Courage To Make The Right Spending Choices. He will basically balance the budget.
This seems like a very laudable goal if he can actually achieve it. I however think that as long as we are fighting two hot wars in Iraq and Afghanistan we would have a hell of a time balancing anything with our economy going so slow. It was easy for Clinton to do because we had freed up that Cold War money and rode a massive tax boom due to the Internet Bubble. McCain has two hot wars, an economic downturn, the subprime mess, a banking mess, as well as insane gas prices killing consumer spending to worry about. Balancing the budget may be too much to ask.
11. Eliminate Broken Government Programs. The federal government itself admits that one in five programs do not perform.Reform Our Civil Service System To Promote Accountability And Good Performance In Our Federal Workforce. Eliminating Earmarks, Wasteful Subsidies And Pork-Barrel Spending. Reform Procurement Programs And Cut Wasteful Spending In Defense And Non-Defense Programs.
This seems like a good idea as well. However he talked about earmarks and cutting pork in issue 9 above. This is where he should put his actual plan for overhauling every agency that he deems "broken" (if he has a plan) and what concrete fixes he plans to make on those departments. Put it under the title of "The Government if Broken! I'm the Repairman! Here's what I'm going to do." with a picture of him rolling up his sleeves or perhaps wearing a tool belt.
12. Budgetary Reform To Give Tax Cuts A Fair Chance: John McCain Will Reform Budgeting To Treat Equally Spending And Taxes And To Stop Damaging Tax Hikes
A lot of funny double talk in this statement. I think this section should be rewritten because it seriously reads like gibberish. It seems to be something about reforming the budgeting process by taking tax cuts off of the books or something. It is just Beltway nonsense that regular Americans don't care about.
13. Reforming Entitlement Programs For The 21st Century: He will Reform Social Security, control Medicate Growth, Cut Prescription Drugs to the Rich.
This is basically private accounts which actually kicks massive ass. In fact I would love it if they poured my Social Security money directly into my 401K so I can manage it myself. There are no concrete plans to his Medicare reform it is just platitudes. He promises to do something about premiums rising so fast but doesn't say what. The prescription drug cut for rich dudes is a no brainer issue as well.
14. Promoting Trade and Competitiveness: John McCain Will Lower Barriers To Trade and make American workers more competitive:
He wants a strong dollar and a whole bunch of new trade deals to "even the global playing field." I just don't understand the Dems opposition to free trade sometimes. If you make a Colombian person richer you create a new consumer that will eat American Taco Bell, watch American DVDs, and shower with Axe Bodywash.
Of course that Colombian will be replacing a low skill job that could go to an American. But maybe that job could seriously help a third world person get out of a third world situation. Even a low skilled American worker has a better lot in life then many Colombians. I thought the Dems were all about helping the people of the world. I guess that was the JFK Democratic party.
Also McCains plans to make Americans more competitive seems like more platitudes and amounts to nothing concrete. If he had a plan to send every American that can't afford it to a trade school or get them a college degree then it would be an actual plan. However McCain just has some vague ideas on this.
15. Reforming The Unemployment Insurance (UI) System: John McCain Believes We Should Have A Single, Seamless Approach To Job Transition Assistance. John McCain Will Reform The UI System So That A Portion Of Each Worker's Unemployment Insurance Tax Is Deposited Into A Lost Earnings Buffer Account (LEB). John McCain Will Reform Training Programs To Provide Quick Assistance To Workers Seeking New Skills. John McCain Will Provide Special, Targeted Assistance For Older Workers.
Now this is some actual meat buried at the very end of this mountain of poorly presented ideas. This LEB seems like some kind of fallback account for people that lose their jobs and can actually be retained if they get another job quickly. Seems like a good idea but who is going to manage it?
I wonder how close this LEB will be to the 6 months of full pay that people say they need to have in liquid savings if you lose your job. In any case this will put a nice buffer in place for people that are living paycheck to paycheck so they don't have to worry about getting the axe. Too bad this great idea is buried at the end where noone is going to read it.
Red Sox Fan Attacks Person with New York License with Bat
I think Red Sox fans need to hang their head in shame over this incident.
A man was ordered held without bail Monday for allegedly beating a New York man with a baseball bat because he thought the man was a Yankees fan.
As it turned out, the New Yorker allegedly beaten in the land of the Red Sox isn't even a big baseball fan.
Police say Robert Correia, 20, and others spotted a car with New York license plates leaving a fireworks display Friday. The group approached the car and began yelling about the Yankees, according to the police report.
Yes, this animal hit another man with a baseball bat because he "thought" he was a Yankees fan. So it would have been possible that some hapless person from New York could have been killed by a deranged Boston fan just because he was a fan of another team.
I think certain members of the Red Sox Nation have an inferiority complex is so they have to resort to violence in order to make themselves feel better. And the saddest part is the guy had to use a deadly weapon. He couldn't have fought the New Yorker man-to-man. He had to run away and get a bat like a loser. I guess 86 years of futility just does that to a person.
A man was ordered held without bail Monday for allegedly beating a New York man with a baseball bat because he thought the man was a Yankees fan.
As it turned out, the New Yorker allegedly beaten in the land of the Red Sox isn't even a big baseball fan.
Police say Robert Correia, 20, and others spotted a car with New York license plates leaving a fireworks display Friday. The group approached the car and began yelling about the Yankees, according to the police report.
Yes, this animal hit another man with a baseball bat because he "thought" he was a Yankees fan. So it would have been possible that some hapless person from New York could have been killed by a deranged Boston fan just because he was a fan of another team.
I think certain members of the Red Sox Nation have an inferiority complex is so they have to resort to violence in order to make themselves feel better. And the saddest part is the guy had to use a deadly weapon. He couldn't have fought the New Yorker man-to-man. He had to run away and get a bat like a loser. I guess 86 years of futility just does that to a person.
Thursday, July 03, 2008
What Iran Might Do If it comes to War
Hmm this is a very sobering piece if you are up on Iran's possible showdown with the West and all the sabre rattling by Israel.
Tehran will be betting on the following as a plan to avoid the toppling of their regime:
First, the declared and internationally to-be-accepted objective of an Israeli/American strike is to stop Iran from going nuclear, much like the declared objective of Desert Storm was to liberate Kuwait. Toppling regimes is something that coalitions weren’t supportive of in 1991 and won’t support in the coming war.
Second, Iran has mastered the ways of guerrilla war. They may be justified in their belief that if their surrogates in Lebanon and Iraq can continue to survive Israel’s attacks or disrupt post-invasion efforts, then their own similarly trained forces in the IRGC would be able to perform even more spectacularly. The chaos could be multiplied if accompanied by simultaneous escalations against U.S. forces in Iraq and against Israel.
If I was Iran I would try for a 3rd option. Stall for time in any way that they could. They can game the West and try to comply at first while keeping the nuclear program in place as long as they can. Then when Obama wins the Presidency Iran would walk away from the table and count on the US keeping Israel in check.
If Israel goes it alone and bombs Iran's nuclear facilities then Iran would have free hand to strike back, escalate the war by attacking American interests in Iraq, strike Israel through surrogates in Lebanon or anything else they would please. They would have command of the field.
So if Obama sells out Israel (which I unfortunately think will happen) then Iran would keep their regime and possibly have a huge propaganda and maybe even a military victory. I could be wrong and Obama could be like Woodrow Wilson once America was committed to WWI. He did everything he could to win the war and maybe Obama will follow his example. So far, however I seriously doubt it.
Tehran will be betting on the following as a plan to avoid the toppling of their regime:
First, the declared and internationally to-be-accepted objective of an Israeli/American strike is to stop Iran from going nuclear, much like the declared objective of Desert Storm was to liberate Kuwait. Toppling regimes is something that coalitions weren’t supportive of in 1991 and won’t support in the coming war.
Second, Iran has mastered the ways of guerrilla war. They may be justified in their belief that if their surrogates in Lebanon and Iraq can continue to survive Israel’s attacks or disrupt post-invasion efforts, then their own similarly trained forces in the IRGC would be able to perform even more spectacularly. The chaos could be multiplied if accompanied by simultaneous escalations against U.S. forces in Iraq and against Israel.
If I was Iran I would try for a 3rd option. Stall for time in any way that they could. They can game the West and try to comply at first while keeping the nuclear program in place as long as they can. Then when Obama wins the Presidency Iran would walk away from the table and count on the US keeping Israel in check.
If Israel goes it alone and bombs Iran's nuclear facilities then Iran would have free hand to strike back, escalate the war by attacking American interests in Iraq, strike Israel through surrogates in Lebanon or anything else they would please. They would have command of the field.
So if Obama sells out Israel (which I unfortunately think will happen) then Iran would keep their regime and possibly have a huge propaganda and maybe even a military victory. I could be wrong and Obama could be like Woodrow Wilson once America was committed to WWI. He did everything he could to win the war and maybe Obama will follow his example. So far, however I seriously doubt it.
Obama on Iraq: At least he'll listen to generals first
I guess that 16 month BS is actually subject to some kind of change depending on what his generals tell him.
"Let me be as clear as I can be. I intend to end this war. My first day in office I will bring the joint chiefs of staff in and I will give them a new mission and that is to end this war," Obama told reporters in his second news conference.
But he added: "I would be a poor commander in chief if I didn't take facts on the ground into account."
So if the generals tell him that they can't possibly pull out in 16 months and not leave chaos behind them then he will "take the facts into account." At least then heading for the exits in 2007. Here he is dumping on the Surge which has been a great success despite his partys objection to it.
"While some have proposed escalating this war by adding thousands of more troops, there is little reason to believe that this will achieve [victory]," Obama said.
"It's not clear that these troop levels are sustainable for a significant period of time, and according to our commanders on the ground, adding American forces will only relieve the Iraqis from doing more on their own."
Again Obama is wrong on the Surge but he might actually get a withdraw with a victory instead of cutting out when the going gets tough.
"Let me be as clear as I can be. I intend to end this war. My first day in office I will bring the joint chiefs of staff in and I will give them a new mission and that is to end this war," Obama told reporters in his second news conference.
But he added: "I would be a poor commander in chief if I didn't take facts on the ground into account."
So if the generals tell him that they can't possibly pull out in 16 months and not leave chaos behind them then he will "take the facts into account." At least then heading for the exits in 2007. Here he is dumping on the Surge which has been a great success despite his partys objection to it.
"While some have proposed escalating this war by adding thousands of more troops, there is little reason to believe that this will achieve [victory]," Obama said.
"It's not clear that these troop levels are sustainable for a significant period of time, and according to our commanders on the ground, adding American forces will only relieve the Iraqis from doing more on their own."
Again Obama is wrong on the Surge but he might actually get a withdraw with a victory instead of cutting out when the going gets tough.
Wednesday, July 02, 2008
Oil Supply Report: More Tail Wagging the Dog
Here we go again with spotty reasoning of why oil prices are going up.
The EIA said crude stocks fell by 2 million barrels last week. Analysts were looking for a drop of 1.2 million barrels according to a poll by energy research firm Platts.
Distillates, used to make diesel fuel, jet fuel and heating oil, rose by 1.3 million barrels while gasoline supplies rose by 2.1 million barrels. Analysts were looking for an increase of 2.4 million barrels in distillates supplies and a decline of 500,000 barrels in gasoline stockpiles.
So the supply of things that oil is made from goes up due to demand destruction but the amount of actual oil barrels goes down. So this sent the price up? Supposedly the oil itself isn't worth anything unless you turn it into gas or distillates. The reason why there is lower crude stocks is because it is so damn expensive and refiners aren't loading up on it. Some are actually reducing utilization since crack-spreads are so junk now.
I think alot of this oil supply drops are simply due to refiners not buying as much oil since the demand for the gas they make with the oil is out of is going down. Why would any refiner in their right mind pay to stockpile $143 oil?
However the idea that lots of traders are going long before the 3 day weekend and the ECB raising interest rates (and any potential hawkish statements that they could issue) makes much more sense to me. Now if there was a hurricane building in the Gulf of Mexico oil would that $170 a barrel that OPEC wants in two days.
The EIA said crude stocks fell by 2 million barrels last week. Analysts were looking for a drop of 1.2 million barrels according to a poll by energy research firm Platts.
Distillates, used to make diesel fuel, jet fuel and heating oil, rose by 1.3 million barrels while gasoline supplies rose by 2.1 million barrels. Analysts were looking for an increase of 2.4 million barrels in distillates supplies and a decline of 500,000 barrels in gasoline stockpiles.
So the supply of things that oil is made from goes up due to demand destruction but the amount of actual oil barrels goes down. So this sent the price up? Supposedly the oil itself isn't worth anything unless you turn it into gas or distillates. The reason why there is lower crude stocks is because it is so damn expensive and refiners aren't loading up on it. Some are actually reducing utilization since crack-spreads are so junk now.
I think alot of this oil supply drops are simply due to refiners not buying as much oil since the demand for the gas they make with the oil is out of is going down. Why would any refiner in their right mind pay to stockpile $143 oil?
However the idea that lots of traders are going long before the 3 day weekend and the ECB raising interest rates (and any potential hawkish statements that they could issue) makes much more sense to me. Now if there was a hurricane building in the Gulf of Mexico oil would that $170 a barrel that OPEC wants in two days.
The Obama Market Correction?
I was watching CNBC this morning while getting ready for work and they had these two talking heads on from the Obama and McCain camps. One of them brought up a very interesting point. Could the fact that Obama clinched the Democratic nod and McCains relative weakness going forward be the cause for this recent market to sell off?
The guy said that the market is pricing in the cost of an Obama victory and what he will do to our economy. Lets see, Obama announced victory on June 3rd and the S&P was at 1377.66 and oil prices were at $124.46. Currently the S&P500 is at 1261.52 and oil is at $143.57 a barrel. So that is nearly the 10% decline that we would need for a classic correction.
Of course you will say that the market dropped due to oil being 143.57 and you would probably be right. However you could make an argument that the market is pricing in an Obama tax and spend policy that would probably have us in a full scale depression by 2009. No government has ever taxed their way out of an economic downturn. In fact the Great Depression was made even worse due to Hoover increasing taxes.
Also oil prices might be going through the roof because an Obama White House will not increase domestic supply. In fact Obama may be suspected of caving in to environmentalists who would love to see gas go to $5 or $8 a gallon in order to shut down world growth. He already wants to impose the failed Carter era Windfall Profits tax that would simply be a way to raise taxes on domestic oil production and constrain further exploration. In fact many people are saying that Obama is running for Carters second term complete with oil shock and stagflation. Too bad Obama doesn't have a crazy redneck brother like Billy Carter to cheer up the nation.
You can also make the leap that some of the "lets bomb Iran" rhetoric coming from Israel is because they are afraid of an Obama White House. In fact Obama talks about being buddy-buddy with the Mullahs in his so-called "meetings without preconditions." Maybe the Israelis are afraid the US will give up the farm to the Mullahs and not back up Israel when they are staring down possible annihilation.
So you can make the argument that Israel needs to get rid of the Iranian nuclear program while they still have Bush in the White House. I mean Bush stood by and let Israel attack southern Lebanon even though it was a terrible failure. In fact we would probably support an Israeli strike covertly with satellite photos and the like. But Obama might not.
They might think that with Obama in the White House Iran will go nuclear no matter what "pressure" the world communtiy puts on them. There is no way that Israelis will live under the threat of nuclear annihilation. So they need to strike while they still have an ally in the US who will not constrain their range of action.
Maybe they think an Obama White House (unlike a Hillary White House) would stand idly by and let Tel Aviv disappear in a mushroom cloud before he does anything. I mean Obama has anti-Israel people as advisers, wants to sit down with Israel's enemies, and even wants to enrich those same enemies with high oil prices. How can Israel trust the guy enough to stop them from being nuked?
So tensions between Israel and Iran are ratcheting up before Bush leaves and as a consequence oil goes to $143.57 from $124.46. So the investing gameplan for an Obama Presidency might mean staying long gold and oil while shorting almost everything else.
The guy said that the market is pricing in the cost of an Obama victory and what he will do to our economy. Lets see, Obama announced victory on June 3rd and the S&P was at 1377.66 and oil prices were at $124.46. Currently the S&P500 is at 1261.52 and oil is at $143.57 a barrel. So that is nearly the 10% decline that we would need for a classic correction.
Of course you will say that the market dropped due to oil being 143.57 and you would probably be right. However you could make an argument that the market is pricing in an Obama tax and spend policy that would probably have us in a full scale depression by 2009. No government has ever taxed their way out of an economic downturn. In fact the Great Depression was made even worse due to Hoover increasing taxes.
Also oil prices might be going through the roof because an Obama White House will not increase domestic supply. In fact Obama may be suspected of caving in to environmentalists who would love to see gas go to $5 or $8 a gallon in order to shut down world growth. He already wants to impose the failed Carter era Windfall Profits tax that would simply be a way to raise taxes on domestic oil production and constrain further exploration. In fact many people are saying that Obama is running for Carters second term complete with oil shock and stagflation. Too bad Obama doesn't have a crazy redneck brother like Billy Carter to cheer up the nation.
You can also make the leap that some of the "lets bomb Iran" rhetoric coming from Israel is because they are afraid of an Obama White House. In fact Obama talks about being buddy-buddy with the Mullahs in his so-called "meetings without preconditions." Maybe the Israelis are afraid the US will give up the farm to the Mullahs and not back up Israel when they are staring down possible annihilation.
So you can make the argument that Israel needs to get rid of the Iranian nuclear program while they still have Bush in the White House. I mean Bush stood by and let Israel attack southern Lebanon even though it was a terrible failure. In fact we would probably support an Israeli strike covertly with satellite photos and the like. But Obama might not.
They might think that with Obama in the White House Iran will go nuclear no matter what "pressure" the world communtiy puts on them. There is no way that Israelis will live under the threat of nuclear annihilation. So they need to strike while they still have an ally in the US who will not constrain their range of action.
Maybe they think an Obama White House (unlike a Hillary White House) would stand idly by and let Tel Aviv disappear in a mushroom cloud before he does anything. I mean Obama has anti-Israel people as advisers, wants to sit down with Israel's enemies, and even wants to enrich those same enemies with high oil prices. How can Israel trust the guy enough to stop them from being nuked?
So tensions between Israel and Iran are ratcheting up before Bush leaves and as a consequence oil goes to $143.57 from $124.46. So the investing gameplan for an Obama Presidency might mean staying long gold and oil while shorting almost everything else.
Tuesday, July 01, 2008
Airlines as a Contrarian Play? GOL Looks good.
I seem to think so since many airlines are trading at pennies on the dollar. This article points out some information about the oil bubble and what stocks will recover off of it bursting.
If oil prices decline, as I expect them to, then input costs for all carriers will decline markedly, if even for just several months. There is certainly enough room to juice this speculation for at least a quick 35% to 50% profit, possibly more. Plus, add some dividends into the picture, profitable earnings, and a big bear market rally and you should hit a home-run in airlines before December.
I agree with this assessment since people still need to fly for business and other reasons. They certainly won't be driving with $4.00 gas so flying may actually be cheaper to some people. I just love stocks that have been beaten up and are badmouthed by just about everyone. You just have to make sure that they don't go bankrupt while you wait for the bubble to burst.
One airline that looks good is GOL Linhas Areas Inteligentes S.A. (GOL) which is a Brazilian Regional Airline. They currently have a 78 aircraft fleet and fly to 59 destinations mostly in Brazil and its neighbors. With Brazil's recent potentially massive oil wealth from their Tupi field we may be seeing less crushing poverty and more middle class and affluent people who would have the means and the ability to fly.
So we could have incredible growth out of regional carriers like we saw from China a few years ago. Some Chinese airlines were 8 to 10 baggers before high jet fuel beat the crap out of them. So stocks like GOL could now be purchased at discounted rates so you get margin of safety in spades. This stock is trading at its 52 week low. The best part is that GOL pays a pretty decent 4% dividend as well. So you will get paid to wait out high oil prices.
If oil prices decline, as I expect them to, then input costs for all carriers will decline markedly, if even for just several months. There is certainly enough room to juice this speculation for at least a quick 35% to 50% profit, possibly more. Plus, add some dividends into the picture, profitable earnings, and a big bear market rally and you should hit a home-run in airlines before December.
I agree with this assessment since people still need to fly for business and other reasons. They certainly won't be driving with $4.00 gas so flying may actually be cheaper to some people. I just love stocks that have been beaten up and are badmouthed by just about everyone. You just have to make sure that they don't go bankrupt while you wait for the bubble to burst.
One airline that looks good is GOL Linhas Areas Inteligentes S.A. (GOL) which is a Brazilian Regional Airline. They currently have a 78 aircraft fleet and fly to 59 destinations mostly in Brazil and its neighbors. With Brazil's recent potentially massive oil wealth from their Tupi field we may be seeing less crushing poverty and more middle class and affluent people who would have the means and the ability to fly.
So we could have incredible growth out of regional carriers like we saw from China a few years ago. Some Chinese airlines were 8 to 10 baggers before high jet fuel beat the crap out of them. So stocks like GOL could now be purchased at discounted rates so you get margin of safety in spades. This stock is trading at its 52 week low. The best part is that GOL pays a pretty decent 4% dividend as well. So you will get paid to wait out high oil prices.
America is 16th Happiest: Blame the Boomers?
That is according to this recent study:
Denmark is the happiest nation and Zimbabwe the the most glum, he found. (Zimbabwe's longtime ruler Robert Mugabe was sworn in as president for a sixth term Sunday after a widely discredited runoff in which he was the only candidate. Observers said the runoff was marred by violence and intimidation.)
It seems that one of the reasons why we are stuck in 16th is because of baby boomer angst.
A survey released last week found one reason America doesn't top the list: Baby Boomers are generally miserable compared to other generations. Further, a public opinion poll released by the Pew Research Center in April found that 81 percent of Americans say they believe the country is on the "wrong track." The response is the most negative in the 25 years pollsters have asked the question.
You know why they are miserable? The universe no longer revolves around them. Of course America is on the "wrong track" whatever that means, because they are no longer the center of attention in the world. Their music is no longer relevant, their candidate (Hillary) was soundly defeated, hardly anyone cares about their old war and peace movements (Vietnam,) and race warfare is almost a dead issue.
Obama represents the first post boom leader and he is always talking about not fighting their fights or engaging in their debased form of party warfare. He still engaged in their class warfare though but that is the liberal in him. I think this Baby Boomer sudden irrelevance is why Obama being friends with a former Weather Underground terrorist doesn't resonate with anyone at all.
Denmark is the happiest nation and Zimbabwe the the most glum, he found. (Zimbabwe's longtime ruler Robert Mugabe was sworn in as president for a sixth term Sunday after a widely discredited runoff in which he was the only candidate. Observers said the runoff was marred by violence and intimidation.)
It seems that one of the reasons why we are stuck in 16th is because of baby boomer angst.
A survey released last week found one reason America doesn't top the list: Baby Boomers are generally miserable compared to other generations. Further, a public opinion poll released by the Pew Research Center in April found that 81 percent of Americans say they believe the country is on the "wrong track." The response is the most negative in the 25 years pollsters have asked the question.
You know why they are miserable? The universe no longer revolves around them. Of course America is on the "wrong track" whatever that means, because they are no longer the center of attention in the world. Their music is no longer relevant, their candidate (Hillary) was soundly defeated, hardly anyone cares about their old war and peace movements (Vietnam,) and race warfare is almost a dead issue.
Obama represents the first post boom leader and he is always talking about not fighting their fights or engaging in their debased form of party warfare. He still engaged in their class warfare though but that is the liberal in him. I think this Baby Boomer sudden irrelevance is why Obama being friends with a former Weather Underground terrorist doesn't resonate with anyone at all.
Obama Introduces Faith Based Initiative
Too bad this guy is such a tax and spend liberal who is going to send this country into a second Great Depression with his wet-behind the ears, raise taxes, steal from the oil companies, economic policy. He has some very good points as well. In fact he is actually tacking toward the political right in this faith based initiative he is introducing.
He would increase spending on social services, starting with a $500 million-a-year program to keep 1 million poor children up to speed on their studies over the summers. He would increase training for charities applying for funding and make it a grass-roots effort. He would elevate the program to be "a critical part of my administration," a reference to criticism that Bush paid barely more than lip service to his effort.
Obama also chose a different emphasis for why religious charities are an important answer to solving poverty and other social problems: because they better know the people who are hurting, instead of Bush's argument that religion itself is a transforming power the government must not be afraid to harness.
He is 100% right. A church is actually part of the community so they know who is hurting and who would need the most extra food or tutoring or whatever. They usually have a much better dollar to helping people ratio then some faceless aid group from California with 40% overhead. Plus, they don't give just out of the kindness of their own heart but as a commandment from God.
He would increase spending on social services, starting with a $500 million-a-year program to keep 1 million poor children up to speed on their studies over the summers. He would increase training for charities applying for funding and make it a grass-roots effort. He would elevate the program to be "a critical part of my administration," a reference to criticism that Bush paid barely more than lip service to his effort.
Obama also chose a different emphasis for why religious charities are an important answer to solving poverty and other social problems: because they better know the people who are hurting, instead of Bush's argument that religion itself is a transforming power the government must not be afraid to harness.
He is 100% right. A church is actually part of the community so they know who is hurting and who would need the most extra food or tutoring or whatever. They usually have a much better dollar to helping people ratio then some faceless aid group from California with 40% overhead. Plus, they don't give just out of the kindness of their own heart but as a commandment from God.
Monday, June 30, 2008
Iraq to Bring 6 New Oil Fields Online
It seems that things are really starting to go decently in Iraq since they are now bidding out 6 of their oil fields to foreign companies. I have a feeling that a US firm will not win outright (they might win 1 or 2 for appearance sake) since the US would be accused of trying to "steal Iraq's oil wealth" or other nonsense. However I would bet on TotalFinaElf (TOT) winning a big chunk since the Iraqis turned to the French in the 70s to help them with their oil industry. This development should change the supply/demand picture going forward.
All the oil fields on the list are producing oil, Shahristani said, noting that the new contracts would raise the country's oil production by 1.5 million barrels per day.
Iraq's current daily oil production is around 2.5 million barrels.
So here we should have 1.5 million barrels of oil that will have added to total world supply by 2009 (bids are due by next March and contracts will be handed out in June) and this should push prices lower. It probably won't burst the oil bubble since good news about Iraq usually isn't very popular with the main stream media.
In any case we have lowered demand, everyone jawboning the market downward, and the potential for increased supply (Iraq and Brazil) going forward. I still think we will have $100 or less (Maybe even $80?) oil by this time next year.
All the oil fields on the list are producing oil, Shahristani said, noting that the new contracts would raise the country's oil production by 1.5 million barrels per day.
Iraq's current daily oil production is around 2.5 million barrels.
So here we should have 1.5 million barrels of oil that will have added to total world supply by 2009 (bids are due by next March and contracts will be handed out in June) and this should push prices lower. It probably won't burst the oil bubble since good news about Iraq usually isn't very popular with the main stream media.
In any case we have lowered demand, everyone jawboning the market downward, and the potential for increased supply (Iraq and Brazil) going forward. I still think we will have $100 or less (Maybe even $80?) oil by this time next year.
Bottled Water a Huge Oil Drain?
I did not know this about bottled water:
The Pacific Institute, a California think thank on sustainability issues, contends that producing bottles for US water consumption required the equivalent of more than 17 million barrels of oil in 2006, not including the energy for transportation.
Assuming these numbers are correct then that is quite a bit of oil that is being wasted so that someone can drink something that already comes out of a tap. I already drink tap water in a recycled bottle that I keep in my refrigerator. All you need to do if you are worried about your tap water is buy a Brita water filter. I guess bottled water would be good to store for a natural disaster but any other time it seems like a rip off.
The Pacific Institute, a California think thank on sustainability issues, contends that producing bottles for US water consumption required the equivalent of more than 17 million barrels of oil in 2006, not including the energy for transportation.
Assuming these numbers are correct then that is quite a bit of oil that is being wasted so that someone can drink something that already comes out of a tap. I already drink tap water in a recycled bottle that I keep in my refrigerator. All you need to do if you are worried about your tap water is buy a Brita water filter. I guess bottled water would be good to store for a natural disaster but any other time it seems like a rip off.
Left Blowing it By Going After McCain's POW record
The Far Left has made a serious error in going after him on Vietnam. They can win against McCain if they went after him on the economy or the same-as-Bush rhetoric but they can only lose going after him like this.
But farther to the left — and among some of McCain's conservative enemies as well — harsher attacks are circulating. Critics have accused McCain of war crimes for bombing targets in Hanoi in the 1960s. A widely read liberal blog on Sunday accused McCain of "disloyalty" during his captivity in Vietnam for his coerced participation in propaganda films and interviews after he’d been tortured.
I thought the Dems wanted to not look unpatriotic and to make sure the election isn't won or lost of Flag Pins or Obama not saying the pledge of allegiance. In fact Obama is pulling out the stops to make sure he is viewed as patriotic.
Every time the Left bring up McCain's war record they make it about what happened in Vietnam and not about the issues. If the election is a referendum on Vietnam (where Obama has the advantage of being a teen during most of it) they will lose handily.
I think the Obama campaign should seriously take these Far Left bloggers aside and tell them to increase pressure on the bad economy and not mention McCain's war record again for the duration. If the Dems make this election about Bush's screwups and the economy they will win. If it is about what happened in Vietnam they will lose. It is just that simple.
But farther to the left — and among some of McCain's conservative enemies as well — harsher attacks are circulating. Critics have accused McCain of war crimes for bombing targets in Hanoi in the 1960s. A widely read liberal blog on Sunday accused McCain of "disloyalty" during his captivity in Vietnam for his coerced participation in propaganda films and interviews after he’d been tortured.
I thought the Dems wanted to not look unpatriotic and to make sure the election isn't won or lost of Flag Pins or Obama not saying the pledge of allegiance. In fact Obama is pulling out the stops to make sure he is viewed as patriotic.
Every time the Left bring up McCain's war record they make it about what happened in Vietnam and not about the issues. If the election is a referendum on Vietnam (where Obama has the advantage of being a teen during most of it) they will lose handily.
I think the Obama campaign should seriously take these Far Left bloggers aside and tell them to increase pressure on the bad economy and not mention McCain's war record again for the duration. If the Dems make this election about Bush's screwups and the economy they will win. If it is about what happened in Vietnam they will lose. It is just that simple.
Friday, June 27, 2008
Evergreen Solar's Financing Plan: Seems Smart
I think it may be time to go long the thin-film solar company ESLR again. They issued $325 million in notes in order to finance a new thin-film solar plant in Devens, Mass. The stock got punished on fears of what might go down in the future. This is what they did:
The incentive for potential buyers is that, assuming the stock price rises by 2013, shareholders can get their convert their notes into cash and stock, said Wedbush Morgan Securities analyst Al Kaschalk.
The solar company said each $1,000 note was valued at 82.6 shares, at an initial conversion price of $12.11. Notes can be converted into cash up to $1,000, and if the stock trades above $12.11, any additional value would be paid in shares.
But this would have a dilutive impact on the company's existing shareholders by increasing the number of Evergreen shares outstanding, explained Signal Hill Group analyst Michael Carboy.
So this would be bad if their stock went above $12.11 (it is trading at $9.72) since they might be on the hook and would have to issue new stock above that price. So what they did to increase the price it would take to trigger the excess stock they:
To get around this point, Evergreen entered into a capped call transaction with an affiliate of Lehman Brothers, the lead underwriter, that will raise the effective conversion price to the company to $19.00 per share. Lehman will provide the extra stock Evergreen would have to issue should its shares trade above $12.11 and below $19.00.
So they put the dilution risk on Lehman instead of them from $12.11 to $19.00. So if this plant does turn out to be a big success then ESLR might be able to buyback some stock in order to counter possible dilution if the stock does go above $19. I think it might have been an overreaction for the stock to drop 10% like it did since dilution would be a full 10 points away and not just 3 points without this capped call.
The incentive for potential buyers is that, assuming the stock price rises by 2013, shareholders can get their convert their notes into cash and stock, said Wedbush Morgan Securities analyst Al Kaschalk.
The solar company said each $1,000 note was valued at 82.6 shares, at an initial conversion price of $12.11. Notes can be converted into cash up to $1,000, and if the stock trades above $12.11, any additional value would be paid in shares.
But this would have a dilutive impact on the company's existing shareholders by increasing the number of Evergreen shares outstanding, explained Signal Hill Group analyst Michael Carboy.
So this would be bad if their stock went above $12.11 (it is trading at $9.72) since they might be on the hook and would have to issue new stock above that price. So what they did to increase the price it would take to trigger the excess stock they:
To get around this point, Evergreen entered into a capped call transaction with an affiliate of Lehman Brothers, the lead underwriter, that will raise the effective conversion price to the company to $19.00 per share. Lehman will provide the extra stock Evergreen would have to issue should its shares trade above $12.11 and below $19.00.
So they put the dilution risk on Lehman instead of them from $12.11 to $19.00. So if this plant does turn out to be a big success then ESLR might be able to buyback some stock in order to counter possible dilution if the stock does go above $19. I think it might have been an overreaction for the stock to drop 10% like it did since dilution would be a full 10 points away and not just 3 points without this capped call.
North Korea Comes In From the Cold
I think Kim Jong Il is tired of being under the gun and decided to get some of what China is getting. There is no sense having your people starve while you pursue nuclear ambitions that are pretty much a waste of time. I think China may have threatened him with assassination if he didn't toe the line. I love how AP tries to rain on the parade as best they could.
Past experience suggests North Korea will seek more rewards before it moves further to disarm. If Pyongyang actually hands over the nuclear bombs believed to be in its arsenal — the country's most valuable bargaining chips — the communist leadership would only do so after a long wish list of demands is granted.
That is just common sense. Anyone in North Korea's place would game the 6 nations into some pretty sweet deals. The US can't really block your way because Bush is trying to put together some kind of legacy. So they would get security guarantees, 2 state of the art nuclear reactors, food help, or almost anything they want. It's the Libya Principle. When dictators play ball they get hooked up with the goodies. I hope Iran is watching these developments closely.
Past experience suggests North Korea will seek more rewards before it moves further to disarm. If Pyongyang actually hands over the nuclear bombs believed to be in its arsenal — the country's most valuable bargaining chips — the communist leadership would only do so after a long wish list of demands is granted.
That is just common sense. Anyone in North Korea's place would game the 6 nations into some pretty sweet deals. The US can't really block your way because Bush is trying to put together some kind of legacy. So they would get security guarantees, 2 state of the art nuclear reactors, food help, or almost anything they want. It's the Libya Principle. When dictators play ball they get hooked up with the goodies. I hope Iran is watching these developments closely.
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