Friday, May 30, 2008
This is the third time in the last 15 years that we have seen this scenario. It seems to me that there is a tremendous supply of dollars chasing the next big thing. In the 90's the stock market marched to new highs due to "irrational exuberance", companies like Enron and WorldComm created new accounting to rack up "profits". When the curtain was pulled back and everyone realized the people pulling the strings didn't have the fundamentals, the bottom fell out.
In the early part of this decade the same scenario played out in real estate. The Wall Street gurus found new hedge founds to sell sub-prime loans and run up housing prices to irrational levels. The greater fool theory kept people buying until some started defaulting. Suddenly the curtain was pulled back again and look at the mess the real estate market is in.
I have no doubt that something similar is afoot in the commodities market. Oil prices are in the irrational range based on my years of working in oil research. Will we find new "funny" structures that traders have created? Possibly. Then Congress will hold some hearings and the money men will move on to some other way to find a way to invest all these excess dollars.
What that will be, I have no idea, but I'd bet money that it will happen. The world is awash with dollars.
Update: An interesting article I found several days later predicting $50-$70 per barrel oil in our near future. Also comparisons with housing bubble.
Thursday, May 29, 2008
Here's the numbers for my current house. Since I plan to stay here for at least 10 years, its looks like a no-brainer.
Friday, May 23, 2008
A key point:
Fortunately, there is a method that can be used to check on whether the observed warming is anthropogenic. It relies on comparing the observed pattern of warming with the one calculated from GH models. Essentially we try to see if the “fingerprints” match. The fingerprint is the pattern of warming, that is, the rate of warming at different latitudes and altitudes. Greenhouse warming should give increasing rates as one goes from the surface up into the atmosphere -- peaking at about 10 kilometers, where the rate of increase is about a factor of two greater than the surface rate, and quite pronounced in all the models.The observed pattern, however, does not show any increase at all; in fact, the data from balloon-borne radiosondes show a slight decrease over the equator. Evidently, the observed and calculated fingerprints don’t match, indicating that the human contribution to current warming is insignificant, too small to be discerned. The cause of warming must therefore be natural, either an internal oscillation of the atmosphere-ocean system, or an external effect, perhaps stemming from the Sun.
The recent revelation that sea buoys have not detected any warming but cooling also boast the magnitude of the hoax the environmentalists are forcing on us to drive up gas prices and destroy our standard of living.
Of course, why let data get in the way of your religious beliefs.
Thursday, May 22, 2008
It was instructive to listen to oil company executives try to elucidate causes of high energy prices at Congressional hearings yesterday. Now, I believe, that politicians smart enough to graduate from Law School should have a fundamental understanding of the Economic Law of Supply and Demand. So why are these politicians spewing their ignorance?
Lets review some facts:
- we have lots of oil in this country - more than 75% off-limits due to Environmentalists
- we have even more shale-oil deposits off limits due to ???
- We have enough coal to last for centuries. In the 1970's I worked for a coal company developing technology to convert coal to oil. Why aren't we working on that?
But wait you say - what about global warming?? We can't burn all those carbon based fuels, can we? Besides the lack of evidence to support AGW (man made global warming), let's assume that it's true. Well obviously we should be going full speed ahead to the only green-house friendly energy source that is economically viable. Windmills?? No. Solar energy?? No.
Nuclear power!! But wait- we can't build new nuclear plants. Why? Well the environmentalists feel that the truckload of waste fuel that that has been accumulated over that last few decades will threaten their god planet.
So politicians paid off by environmental interests have reduced supply of energy in all manner (except for really expensive sources like solar and wind). So it's no surprise that prices are high.
It's time to stop blaming oil companies when you go to the gas pump and put the blame squarely where it belongs - the wacko greens.
Monday, May 5, 2008
And we won't go into a recession!!
How do I know that? I work for a big international company and like all international companies we have been expanding into growing markets like gang-busters for the past 10 years. And there is no slow down over seas. With the weak dollar, exports are booming as American goods are cheaper in non-US markets.
This is brings jobs and dollars back into the US, counteracting a lot of the outsourcing that has been going on.
The economy has been growing since 2001 and we have not reached a peak. Maybe when the Democrats fail to extend the current tax cuts we will see that come to pass.
Friday, May 2, 2008
So now I'm stuck losing $600 a month on this property. If I didn't have $50K of equity in it, I'd just walk away from it (the loan is not in my name). I was hoping the ARM would adjust since interest rates have dropped so much, but so far the loan is still at 11%.