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27 June 2008

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João Carlos

Coronel Lang,

In the interest of give some contrarian opinions and make possible an open and democratic discussion (when everyone say the same thing we have parrots, not democracy).

Peak Oil can be hiting world now. http://www.theoildrum.com/
(read a lot of old posts, a lot of info there about some myths, including the Oil Shale myth)

I too advice to read the book "Twilight in the Desert"

Some economists disagree with the "meme" that "speculation is the vilain":
http://www.econbrowser.com/archives/2008/06/how_big_a_contr.html
http://www.econbrowser.com/archives/2008/06/klings_question.html

And we can say one of some economists to say it is Paul Krugman: http://www.econbrowser.com/archives/2008/06/klings_question.html (too many posts about speculation and oil)

We need observe that Krugman was right about a lot of things: Asian's crisis, dot com, house bubble, Iraq war and Bush.

The reason the Right hates him is that he is right.

João Carlos

sorry the bad english, my native language is portuguese

Duncan Kinder

For a flavor of the disconnect between any sensible MidEast and/or energy policy and what the current mentality is, I direct people's attention to today's online poll made by the Wheeling, WV Intelligencer, which states:

Should the United States force Iraq to turn over a percentage of its oil production?

I would like to be able to shake my head at such people and say, "Sure, you guys to to Iraq and force them to turn over the oil - just so long as it's your ass and not mine."

But it doesn't work that way.

Meanwhile, John Robb wants us to build resilient communities; and these are the people who I have to work with.

Go figure.

Cromwell's severed head

I'm new to this web site and have now, put it on my short list of daily must reads. IMO, the best sites are reflected in their comments section and man are there some great ones here. Thanks to all. I would add one recommendation to the reading list.
Don't Blame the Saudis

Gas Price Gouging
By MIKE WHITNEY

http://www.counterpunch.org/whitney06242008.html

Bartolo

It was 10 pounds of material in a 5 pound bag and called a blivet. Sixty years ago in school unthinking boys applied that term to overweight classmates.

jonst

Joao Carlos,

When one is on a bus, heading off a ravine high in the Alps, and all, every last one, of the passengers yell, 'stop the bus'....you got democracy.

Curious

The middle east is about to explode if current trend continues. The usual internet signs are showing up again.


http://www.newyorker.com/reporting/2008/07/07/080707fa_fact_hersh

“The Finding was focussed on undermining Iran’s nuclear ambitions and trying to undermine the government through regime change,” a person familiar with its contents said, and involved “working with opposition groups and passing money.” The Finding provided for a whole new range of activities in southern Iran and in the areas, in the east, where Baluchi political opposition is strong, he said.


Report: OPEC president sees oil at $170 this year
http://www.marketwatch.com/news/story/opec-president-reportedly-sees-oil/story.aspx?guid=%7BC21A68F2-0A15-4ADB-BE6A-9A18B41642EF%7D&dist=msr_1


Congressional Resolution Demands Bush Act on Iran
http://www.truthout.org/article/congressional-resolution-demands-bush-act-iran

(July-august first window. sept-October next window)

Oil will hit $200-250 once the war starts.

Got A Watch

The spectre of the "Limit Oil Speculation Act" legislation now working its way thru the colon of Washington politics seems to have already had a marked effect on the oil market.

Just not the one they intended. Those who were "short" oil are now running for the hills, while the "longs" simply sit, secure in the knowledge they are in control. Or so I am told, by someone who trades oil futures contracts.

India recently tried a similar measure, which caused the price of oil there to soar even higher than when they were talking about how much of a "problem" it was at a lower price. Solution? Not so much.

Then we have the "Act" which would require the US Navy to blockade Iran to prevent ttem from receiving any oil imports. Yet more genius.

These are classic problem (not) solving strateies: if the problem is "x" bad at a certain price level, lets drive the price up to "X" level, thus exacerbating all the negative effects.

The unintended consequences of thoughtless actions.

Got A Watch

A debate in a financial forum where the "evil speculators" theory gets trashed hard by real traders, make of it what you will:

http://www.tickerforum.org/cgi-ticker/akcs-www?post=50077&page=1

"Santelli - Oil Speculation = Bull****"

Warning: harsh language, strong arguments

IMHO the real cause for all this "speculation" is the flood of easy money unleashed by overly-Wall St.-friendly Central bankers in Washington, intended to bail out their overly leveraged and over-extended speculator Investment Bank and Hedge Fund friends.

So what did they do with all that (almost free) money dropped from helicopters? Why of course, they speculated with it.

But that is only part of the reason why oil is so expensive. We have already passed the top of Peak Oil, and there is only way to go on from a peak. If there was excess supply of energy, no speculation could be maintained for long, as not all producers are in agreement with each other. See Libya and their recent statements.

It is a complicated situation with many, many facets.

btw someone mentioned "Jerome a Paris" above, he is a regular contributor at 'The Oil Drum' website, which many have linked to above. If you are interested in oil and energy, that is THE site to read up on daily happenings, and also some of the very best analysis anywhere. Their work on the 'Export Land Model' is stunning.

martin K

On a positive note: now may be the time to put money into zeppelins again. It seems to me the air-cargo hauling of luxury goods will be the first to go.

Curious

"Limit Oil Speculation Act" legislation.


Oh yeah... that'll solve oil price problem. As if congress has jurisdiction over global oil market. All the important trading floor are outside the country (except NY)

The minute that act is passed. NY oil market will be destroyed.

It'll move to London, UAE, Singapore.

And domestic oil price will skyrocket, simply because nobody will sell them in our market anymore due to price control.

Cloned Poster

I have to revise my last prediction above re prices.

The pigs on wall street are being what they are, pigs at the trough, this whole plan is for McCain to do a superexpifuckingalidois drop of oil prices in October (needs a 30 day lead time) with a copper fastened oil deal with Shia Iraq (/Persia).

What a sting!

Curious

Things are about to snap. big time.

The neocon clown show is about to end in big bang.

http://theblogattheendoftheworld.blogspot.com/2008/06/us-meltdown-imminent-says-fortis.html

BRUSSEL/AMSTERDAM (DFT) - Fortis expects a complete breakdown of the American financial markets within days or weeks. This explains, according to the bank insurer, the series of interventions on Thursday with the aim of strengthening themselves by € 8 billion. "We are ready at the last moment. The U.S. is doing much worse than we had thought,” said Fortis chairman Maurice Lippens, who insists that CEO Votron shall not be replaced. Fortis expects bankruptcies among the 6,000 U.S. banks that have low coverage. "But the same goes also for Citigroup and General Motors, and thereby starts a complete meltdown in the U.S.”

Ish de Leon

I am a late comer to this discussion but is the margin call requirement for trading oil futures still 5%? I saw a while back that a Congressman was trying to increase it to the levels of the stock market or closer to 50%.
Wouldn't this measure slow down the feeding frenzy. Might it be possible to fine tune the market using the margin call requirements as a control knob? Right now it seems to be stuck on wide open!
http://finance.yahoo.com/tech-ticker/article/31528/Kill-the-Oil-Speculators-Raise-Margin-Requirements-Force-Physical-Delivery?tickers=BP,USO,DUG,OIL,OIH,XOM,XLE

rjj

Curious,

I don't read Dutch. The source appears to be The Telegraph", not "The Financial Telegraph."

Here is the article in Dutch.

Perhaps this a perfectly reputable publication.

My question: is some incestuous son of a bitch trying to start a stampede?

Curious

Who knows. whatever it is. market crashed big time in the past 3 days. Fed is in panic mode. Giving signals and jawbowning everybody but nobody cares. (The fedreserve has run out of money, everybody knows they can't do a thing without money)

The entire market is about to crack big time. It's just waiting for a trigger. Somebody is going to make loads of money.

Here is Fortis from google.
http://news.google.com/news?hl=en&ie=UTF-8&tab=wn&ncl=1224356463

incidentally, oil closed at records $143 today. not pretty at all. we are definitely going to hit $150. Then a lot of thing will collapse.

Curious

A healthy financial group doesn't raise $12.5B capital like they see a ghost coming for no good reason.

http://www.nytimes.com/2008/06/27/business/worldbusiness/27fortis.html

The company said it was forced to take what it called “exceptional measures” because of tough market conditions as well as its purchase of parts of its former rival ABN Amro, which was completed just before the credit crisis hit last year.

Fortis said it would sell about 6 percent more shares to institutions to raise 1.5 billion euros, and up to 2 billion euros of nondilutive preference shares. It will save 1.3 billion euros by not paying an interim 2008 dividend, will sell noncore assets and sell and lease back real estate, and pay its full-year dividend in shares.

“We are unpleasantly surprised by today’s announcement. Measures of this scale clearly indicate that management is not very confident in Fortis’s ability to generate organic solvency in the near term,” an analyst at Bank Degroof, Ivan Lathouders, said.

Fortis shares were down 15 percent to a more than five-year low.

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