Before I get on with my rant, this article on why insider trading should be legalized appeared on the front page of Marketwatch.com. Laws regarding drugs, alcohol, tobacco, insider trading, etc... are ill considered and rarely, if ever, in the interests of The People. That is, The People that don't enjoy a good "perp walk". (Nancy Grace and her merry band of fat jag-offs are only too happy to ditch the presumption of innocence... and Habeas Corpus while they are at it). Speaking of which... how embarrassing to our Constitution, particularly the 4th Amendment, is the "prep walk"? Its not just embarrassing - it is a disgrace. An action unworthy of our role in the world. No wonder Ruddy Giuliani invented it; Giuliani might be the worst excuse for a human being here in America since gold ol' Senator Joe McCarthy.
Ok. On to my rant.
Oil supply has proved particularly vexing to the Cassandra's, while Oil price predicting have been unkind, in the extreme, to the Cornucopians. As it turns out Matt Simmons was right about prices for all the wrong reasons, and Dan Yergin was wrong about Oil prices for all of the right reasons... or as we say on Wall Street: "A great call - with nothing to show for it".
Yes, Oil prices are up (and lately down) back around $100 per barrel, and are almost entirely at this lofty price due to the US$'s decline relative to the rest of the currencies AND the political situation in the MENA countries, with just a little "Peak Oil Light" thrown in to screw up the parade. Oil exports might well have peaked, but ethanol, Nat Gas, and the Tar Sands have certainly lessened the blow.
See, that's the thing about the End of the Oil Age or even the End of the World. Industrious folks will try to profit from it. Maybe even call it off (for a while, anyway). They will convert corn into ethanol, build nuclear plants, maybe poison all of Canada to convert the Tar Sands if necessary.
I have mentioned before how much I am impressed with the handling of the financial crisis by the American Fed and Treasury. I am equally impressed by the world Oil industry's ability to squeeze production from non-conventional sources. Think things are bad? If it were not for the motivated actions of these 2 groups they would have been infinitely worse. Yes, I know gasoline is $4 or so, but that's a great deal better than the $6 I was thinking 2 or 3 years ago would be likely at this time.
As it turns out, the world doesn't want to end without a fight. It took 12 years for Oil to go from $10 glut with increasing production to $100 with relatively flat production. It might be another 10 or 15 years of price spikes and collapse before we know what's what with production. And that might be a good thing... because its all about the rate of change.
Everything is relative, and everybody's gotten this thing wrong. While the Cassandra's thought the world would end in 2010 and the Cornucopians said it was all tin-foil-hat B.S. my bet is most can't admit their own errors in calculation. The trend is your friend, and the trend suggests a long, drawn out slug-fest. Said slug-fest will likely eliminate the middle, but not the have's and have not's.
to be continued -