The Truth About Gas Prices, cont...

March 5th, 2012

As the "conservative" media continues to push last month's RNC talking points, rational actors keep pushing back by stating what are commonly known as facts. I harped on this HERE recently.

Today, the NY Times editors state it plainly:

"There are lots of reasons for the rise in gas prices, but the lack of American production is not one of them. Domestic crude oil production is actually up from 5.4 million barrels a day in 2004 to 5.59 million now; imports have dropped by more than 10 percent in the same period. Despite a temporary slowdown in exploration in the Gulf of Mexico after the BP oil disaster, the number of rigs in American oil fields has quadrupled over three years. There have been new discoveries and the administration has promised to open up more offshore reserves. To say that Mr. Obama has denied industry access is nonsense.

Equally nonsensical is the Republican claim that Mr. Obama’s proposed repeal of $4 billion in annual tax breaks for the oil and gas industry — whose five biggest players posted $137 billion in profits last year — would drive prices upward. As is Newt Gingrich’s claim that a proposal now taking shape in the Environmental Protection Agency, and fiercely opposed by refiners, to lower the sulfur content in gasoline would add 25 cents to the cost of a gallon. Agency experts say it would add about a penny.

The truth is that oil prices are set on world markets by forces largely beyond America’s control."

Sen Sanders is leading the fight against unbridled speculation HERE.

Obama's Oversight Of Energy

Feb 25th, 2012

Since the election of President Obama, domestic crude production has steadily risen for the first time since 1985 reversing nearly a quarter century of decline.

Image via

Image via

One More Time... Gas Prices Edition

Feb 24th, 2012

It's the speculation in commodities markets which is to blame for the recent explosion in gas prices.

Period.

While the "conservative" media is blaming the President, the irony here is that the solution is the exact sort of regulation his detractors would scream bloody "Communism" over.

Kevin G. Hall lays out the facts:

"U.S. demand for oil and refined products — including gasoline — is down sharply from last year, so much that United States has actually become a net exporter of gasoline, unable to consume all that it makes.

Yet oil and gasoline prices are surging.

On Tuesday, oil rose past $106 a barrel and gasoline averaged $3.57 a gallon — thanks again in no small part to rampant financial speculation on top of fears of supply disruptions."

What If Greece Goes It Alone?

Oct 4th, 2011

Nouriel Roubini says they should do just that:

"Greece is stuck in a vicious cycle of insolvency, low competitiveness and ever-deepening depression. Exacerbated by a draconian fiscal austerity, its public debt is heading towards 200 per cent of gross domestic product.

To escape, Greece must now begin an orderly default, voluntarily exit the eurozone and return to the drachma."

I couldn't agree more.

Roubini lays out the pros and the cons of walking away and notes that recent examples, such as Iceland's transformation, could provide a model. However, what Roubini prescribes is going to be regarded as radical and even dangerous... to everyone but Greece.

A vast majority of Greece's current woes are due to externalized pressures. Most of the debt crisis which erupted in 2010 resulted from their heavy investment internationally in mortgage backed securities. What's more, even some Eurozone leaders, like Germany's Merkel, have stated outright that predatory hedging and credit default swap speculation elsewhere in the world dramatically expanded and has prolonged their agony.

Exit from the Eurozone is in Greece's sovereign best interests. Yet the global economy has coalesced around the demand that they not act in those interests. They are faced with choosing whether to do what is right for their people or doing what is demanded by the foreign financial institutions which hold their debt.

Time To Make A Buck Off Fukushima?

April 1st, 2011
Please donate to Japanese relief by clicking HERE

The crisis in Japan is already making some speculators very rich. The third paragraph in a Bloomberg article this morning detailing the ongoing irradiation of the area surrounding the Fukushima Dai-Ichi meltdown reads as follows:

"Cattle futures surged to a record in Chicago yesterday on speculation demand for U.S. beef would increase in Japan after radiation from the stricken nuclear plant contaminated food supplies. Tyson Foods Inc., the top U.S. meat processor, said the country may increase imports."

When most of us see tragedy unfolding, we think of the impact on the lives of those involved. But there are always those savvy players who see opportunity. Look at Larry Kudlow's shockingly honest off-the-cuff remarks about the human versus economic toll immediately following the tsunami:

"The human toll here looks to be much worse than the economic toll and we can be grateful for that."



For all the heat he took over this, what went largely unsaid is how widely held his world-view has become. Listen closely to his whole statement. It never occurred to him that what he had just said was in any way wrong. Frankly, I found his apology more offensive. Oh, he was sorry he said it, alright, but it is "normal" for many in the West to view markets in a moral vacuum. We should be discussing this. But we aren't. We move along after every outbreak of war, disaster or carnage to the next exploitive media frenzy. We rarely take time to shine a light upon those who stick around to make a killing after the killing.

I have complained before about the especially predatory potential of commodities trading. The fiscal right and Libertarians in particular bristle at the suggestion that this might be prevented via some form of regulation. They live in a bubble where there is an inherently benevolent outcome of allowing the "market" to run free. Those who dare to even suggest that there are moral imperatives that demand we limit some financial activity are met with accusations of dabbling with "socialism" or even outright "Communism." I am willing to take the heat from the "free market" zealots this time.

Exploiting Fukushima for financial gain is not just flat out wrong. It's pathological.