Monday, April 30, 2012

Top EPA Official Resigns over "Crucify" Comments

Following up on Thursday's "Nasty: "EPA Official Not Only Touted 'Crucifying' Oil Companies, He Tried It" (RRC)"; when the bureaucrats start acting like rulers rather than public servants it is time to rip them out, root and branch.

That ruling thing is for our European friends and is very different from governing.
See "European Politicians Think They are Rulers; Need Energy Wasting Palace" for ruler ramblings if interested.

From Reuters:
EPA region head resigns after crucifixion comment

A regional Environmental Protection Agency chief based in Dallas resigned on Monday after a 2010 comment surfaced in which he compared his enforcement of energy companies with crucifixion.

Al Armendariz, who was the chief of EPA's Region 6 office, sent a letter of resignation to EPA Administrator Lisa Jackson late on Sunday, which she accepted on Monday.

"I have come to the conclusion that my continued service will distract you and the agency from its important work," Armendariz said in the letter.

A link to a video of a talk Armendariz had given in May 2010, in which he compared his strategy on energy companies that had broken the law to that of Romans taking over towns, had been circulated by lawmakers including Senator James Inhofe, a Republican.

The conquerors would "find the first five guys they saw and they'd crucify them," he could be heard saying in the video. "And that town was really easy to manage for the next few years."...MORE

Al Armendariz Crucify

IMAGE CREDIT: The People's Cube, "If Only the Romans Had the EPA to Crucify the Dissenters.

Occupy Oakland Cancels Golden Gate Bridge Shutdown--Realizes Not the Way to Win Hearts and Minds and Could Get Them Shot

From OO's Occupy the Bridge blog:
Occupy Oakland and the Golden Gate Bridge
The following is a statement by the Occupy Oakland Golden Gate Bridge Shut Down Committee, including members of OO Labor Solidarity and the OO May Day Assembly.
On May 1, workers and students throughout the country will walk out of their jobs and schools in an unprecedented General Strike. As a part of this day of action, thousands of nurses in Northern California will be striking Sutter hospitals. ILWU Local 10 will also be shutting down the Port of Oakland for eight hours in honor of the historic May Day struggle for the eight-hour working day. There will be protests in Oakland, including a mass march for immigrant rights and an evening convergence on Oscar Grant Plaza.

For over a year, workers in the Golden Gate Bridge Labor Coalition (a multi-union body of Golden Gate Bridge workers) have been fighting for a contract to defend their healthcare and to resist other concessions demanded by the Golden Gate Bridge District. While they have strike sanction from various labor councils and are planning a mass action on May 1, it is still not clear if they will be striking. Last night, the Golden Gate Labor Coalition requested the Golden Gate Bridge shut down action be called off. Occupy Oakland called for a bridge shut down on May 1 only if these workers were on strike. As reiterated last week, our plan has always been to take this action in solidarity with the workers, not in place of them.

Since the conditions for the action will not be met, we are no longer organizing to shut down the bridge....MORE

"EIA: Lower 48 US February Natural Gas Output -0.6% Vs Revised January Level "

As I said upon the release of the April 19th storage report, this is the production report the cognescenti have been waiting on.
Front-month futures up 7.4 cents (3.39%) at $2.26.
Remembering the knee-jerk upmove after the Chesapeake announcement in February, the higher it goes the better the entry point for shorts.
One of these days we'll give you a weather report for July-September 2012.
From Dow Jones
Natural-gas output in the Lower 48 U.S. states in December eased 0.2%, or 0.14 billion cubic feet per day, to 72.54 billion cubic feet a day, government data released Wednesday show.

The decline is the first since February 2011 and came against record-high output in November. The Energy Information Administration revised up November output to 72.68 bcf/day from the preliminary level of 72.61 bcf/day.

December's decline came primarily from a drop in Wyoming output, which slid 3.4% to its lowest level since September, partly due to a fire at a compressor station, the EIA said...MORE.

Gasoline: How to Trade the 2016 Presidential Election (Plus: conspiracy theories about 2012)

You read that right, 2016.
From Platt's The Barrel blog:
High gasoline prices? All politics, according to a pundit
If you're a trader, be prepared to take a position in the options market for the November 2016 RBOB contract soon after a winner is declared in the US presidential race.

Here's the guideline: if Mitt Romney wins, go short. If Barack Obama wins, go long. Because if the former happens, traders will want him to be re-elected, lower gasoline prices will help that, and traders will make it happen. If Barack Obama is wrapping up his second term, traders will want to damage the prospects of whatever Democrat is looking to succeed him. High gasoline prices will make that more difficult to occur.
It has come to our attention recently that there is a lot of this conspiracy floating around the internet. David Baker, who writes about energy for The San Francisco Chronicle and often quotes Platts, wrote about it a few weeks ago. You can see his writeup here.

David said he was spurred by encountering a raging debate over this issue on DailyKos, a left-wing website. If you search "gasoline prices" and "DailyKos," it's stunning how active the discussion is. Here's a good example of it.

This conspiracy theory took a huge boost this past weekend when Keith Olbermann, who recently has been fired again, so he isn't working anywhere, brought it up during the roundtable on ABC's This Week. For those of you who aren't familiar with the roundtable, it is populated by very important, very smart, very profound pundits, saying important/smart/profound things. Conspiracy theories aren't normally heard.
But there was Olbermann this past Sunday, essentially saying that there's a relationship between the political desires of traders, whom presumably he assumes are all Republicans, and the price of gasoline. In the annals of energy discussions during the roundtable, it was right up there with comedian Bill Maher declaring on the roundtable a few years ago that Brazil had "gotten off oil," which would be of great interest to Petrobras...MORE

Natural Gas Liquids Are Keeping the Drillers Afloat (and exacerbating the oversupply) CHK; RRC; DVN; APC

Phil Flynn lets the cat out of the bag on the most important factor for drilling and production planning in the current low-priced market for dry gas.

Just kidding about the "cat-out-of-the-bag" bit.
The pros live and breathe this stuff and any adviser, analyst or manager who doesn't know the difference between the Utica and Marcellus shales or who can't compute the relative value of Chesapeake's acreage vs. Range or the fact that Devon's NGL reserves are larger than Anadarko's has been/will be fired and/or sued.

From Inside Futures:
The Energy Report Natural gas rig counts may have hit a ten year low but does that really mean that gas production will fall significantly enough to avoid a storage crisis? Reuters new reported that the number of rigs drilling for natural gas in the United States fell by 18 this week to 613, data from oil services firm Baker Hughes showed on Friday.  Horizontal rigs -- the type most often used to extract oil or gas from shale -- fell by 16 to 1,139. Oil rigs fell by 9 to 1,328.

Yet the Energy Information Agency says that when it comes to gas if you are getting liquids you are less likely to cut back production. The EIA says that combined marketed natural gas production from the top five natural gas producing states Texas, Louisiana, Wyoming, Oklahoma, and Colorado actually increased by about 7.5% in 2011, although their share of total U.S. natural gas output fell slightly to about 65% they show that marketed natural gas production from these states in 2011 totaled 15.7 trillion cubic feet (Tcf).

The EIA says that the drop in the top states  combined share of total U.S. production reflects increased contributions from other states, particularly those in which operators significantly expanded development of shale gas formations. Shale gas production from states such as Pennsylvania helped boost overall U.S. natural gas output by almost 8% in 2011.

Due primarily to drilling programs in the Marcellus shale formation, Pennsylvania's marketed natural gas production in 2011 more than doubled to nearly 1.3 Tcf, according to preliminary estimates from Pennsylvania's Department of Environmental Protection. Arkansas has also seen strong growth in its marketed natural gas production, with output more than tripling since 2007 due mainly to increased production in the Fayetteville shale play.

The EIA says that  Alaska is the country's second leading natural gas producer in terms of gross withdrawals, but most of the state's production is not brought to market, as production volumes far exceed local demand and there is insufficient pipeline capacity to transport the gas to distant markets. Most of Alaska's natural gas not brought to market is re-injected into existing oil fields to provide sufficient pressure to maintain oil production rates.

The EIA  highlights from the top marketed natural gas producing states in 2011: Texas. Natural gas production increased 4.5% from the year before to the highest level since 1980, due in part to growing output from the Eagle Ford shale formation where drillers who are aggressively pursuing high-value liquid hydrocarbons are also producing growing amounts of natural gas....MORE

New Infographics About the Federal Budget

Via the CBO's Director's blog: 

Budget Infographic - Revenues

April 17, 2012

The federal government took in $2.3 trillion in revenues in fiscal year 2011 (which ended on September 30, 2011), about $1.3 trillion less than it spent. Most of those revenues come from individual income taxes and the payroll taxes that support Social Security and Medicare's Hospital Insurance program. The infographic below provides a closer look at the federal government's
revenues in 2011.

Infographic for Federal Revenue

... MORE

Fish in a Barrel: Shorting European Banks

From UBS via ZeroHedge:

...ECB is the primary liquidity lifeline in absolute terms for the following banks:

Click through to enlarge.

Equities: which way from here

Up 1% this week.
After that, who knows.
From Marginal Evolution:
There is lot of negative talk about the absence of stock trade volume on the way up in the equities with pundits citing it as an ominous sign that it signals an eventual collapse in the stocks.

Above is a connection between equity spikes and volume on that day for the last 4 months and one can clearly see that volume spiked higher on days the Dow rallied....MORE

Sunday, April 29, 2012

UPDATED--Climateer Line of the Day: White House Correspondents Dinner Edition

 "Four years ago I was locked in a brutal primary battle with Hillary Clinton," Obama said. 
"Four years later she won't stop drunk-texting me from Cartagena."
-from Politico

Reason has more:
The White House Press Correspondents' Dinner is About as Bad as You Think, Only a Little Bit Worse and a Little Bit More Fun

Glencore, Dictators and Spies: A Giant Among Giants

From Foreign Policy:
When Glencore, the world's biggest commodities brokerage firm, went public in May 2011, the initial public offering (IPO) on the London and Hong Kong stock exchanges made headlines for weeks in the Financial Times and the trade-industry press, which devoted endless columns to the company's astonishing valuation of nearly $60 billion -- higher than Boeing or Ford Motor Co. The massive new wealth turned nearly 500 employees into overnight multimillionaires and made billionaires of at least five senior executives, including CEO Ivan Glasenberg. "We are not going to change the way we operate," vowed Glasenberg, who had started as a lowly coal trader for the Swiss firm nearly three decades earlier and, with the IPO, immediately became one of Europe's richest men. "Being public will have absolutely no effect on the business."

And what a business it is. The firm was forced to pull back the curtain on its famously secretive doings to go public, and what it revealed shocked even seasoned commodities traders. Glencore, which Reuters once called "the biggest company you never heard of," turned out to be far more globally dominant than analysts had realized. According to its 1,637-page IPO prospectus, the company controlled more than half the international tradable market in zinc and copper and about a third of the world's seaborne coal; was one of the world's largest grain exporters, with about 9 percent of the global market; and handled 3 percent of daily global oil consumption for customers ranging from state-owned energy companies in Brazil and India to American multinationals like ExxonMobil and Chevron. All of which, the prospectus said, helped the firm post revenues of $186 billion in 2011 and employ some 55,000 people in at least 40 countries, generating an average return on equity of 38 percent, about three times higher than that of the gold-standard investment bank Goldman Sachs in 2010. Since then, the company has only gotten vaster in scale. It recently announced a $90 billion takeover of Xstrata, a global mining giant in which it already holds a 34 percent stake; if the deal goes through, Glencore will rule over an "empire stretching from the Sahara to South Africa," as the Africa Confidential newsletter put it. As it is, Glencore already trades, manufactures, refines, ships, or stores at least 90 commodities in some three dozen countries. "Glencore is at the center of the raw material world," said Peter Brandt, a longtime commodities trader. "Within this world there are giants, and Glencore is becoming a giant among giants." 

What the IPO filing did not make clear was just how Glencore, founded four decades ago by Marc Rich, a defiant friend of dictators and spies who later became one of the world's richest fugitives, achieved this kind of global dominance. The answer -- pieced together for this article over a year of reporting that included numerous interviews with past and current Glencore employees and a review of leaked corporate records, dossiers prepared by private investigative firms, court documents, and various international investigations -- is at once simpler and far more complicated than it appears. Like all traders, Glencore makes its money at the margins, but Glencore, even more so than its competitors, profits by working in the globe's most marginal business regions and often, investigators have found, at the margins of what is legal.

This means operating in countries where many multinationals fear to tread; building walls made of shell corporations, complex partnerships, and offshore accounts to obscure transactions; and working with shady intermediaries who help the company gain access to resources and curry favor with the corrupt, resource-rich regimes that have made Glencore so fabulously wealthy. "We conduct whatever due diligence is appropriate in each situation to ensure we operate in line with Glencore Corporate Practice," said spokesman Simon Buerk, when asked how the firm chooses business partners and local representatives.

But to experts, there's simply no other way for a company like Glencore to thrive. "Unlike the case with many industries, minerals and energy are often owned by the state in Third World countries," said Michael Ross, author of The Oil Curse and a professor at the University of California, Los Angeles. "And in a number of countries where Glencore operates, doing business means putting money into the pockets of repressive governments and corrupt rulers. In some of those places … it's hard to draw a line between what's legally corrupt and what's not."  
Indeed, going public, according to the sources I spoke with, means building on the business model created and perfected by Rich, who, before his controversial pardon by U.S. President Bill Clinton, was a legendary fugitive, a regular fixture (along with Osama bin Laden) on the FBI's Most Wanted list. The new Glencore, these sources say, will be like the Glencore of old -- only much, much bigger. In today's superheated market for natural resources driven by booming emerging markets such as Brazil, China, and India, Glencore wants to grow -- and in a major way. Already the world's biggest middleman, it now wants to control the entire business chain, from mines and smelters to storage facilities for finished products, and from pumping oil to shipping it to refineries, while trading and hedging all along the way, industry experts say. "That's one way that Glencore makes so much money," a Geneva-based industry source told me. "When you are vertically integrated you make more at every step. The money stays in the same pocket."...MUCH MORE

Do House Prices Beat Inflation? Should They?

From Calculated Risk:
The upward slope of Real House Prices

Shiller Real House Prices A year ago, Dave Altig asked Just how out of line are house prices?. Dr. Altig's post featured both a price-to-rent graph and a real house price graph originally from the NY Times based on Professor Robert Shiller's work.

The price-to-rent ratio graph Dr Altig presented seemed to show that house prices were getting back to normal, but the graph based on Professor Shiller's work seemed to suggest that house prices could fall much further. Below is an updated graph from Shiller through Q4 2011.

The Shiller graph has suggested to many observers that house prices track inflation (i.e. that house prices adjusted for inflation are stable - except for bubbles). Last year I pointed out the slope depends on the data series used, and that if Professor Shiller had used either Corelogic or the Freddie Mac house prices series, before Case-Shiller was available, there would a greater upward slope to his graph.

An upward slope to real prices makes sense to me as I've argued before: "In many areas - if the population is increasing - house prices increase slightly faster than inflation over time, so there is an upward slope for real prices."

This is the updated graph from Professor Shiller....MORE
HT: Abnormal Returns

Stanford and Silicon Valley

From the New Yorker:
 Get Rich U.

There are no walls between Stanford and Silicon Valley. Should there be?
Stanford University is so startlingly paradisial, so fragrant and sunny, it’s as if you could eat from the trees and live happily forever. Students ride their bikes through manicured quads, past blooming flowers and statues by Rodin, to buildings named for benefactors like Gates, Hewlett, and Packard. Everyone seems happy, though there is a well-known phenomenon called the “Stanford duck syndrome”: students seem cheerful, but all the while they are furiously paddling their legs to stay afloat. What they are generally paddling toward are careers of the sort that could get their names on those buildings. The campus has its jocks, stoners, and poets, but what it is famous for are budding entrepreneurs, engineers, and computer aces hoping to make their fortune in one crevasse or another of Silicon Valley. 

Innovation comes from myriad sources, including the bastions of East Coast learning, but Stanford has established itself as the intellectual nexus of the information economy. In early April, Facebook acquired the photo-sharing service Instagram, for a billion dollars; naturally, the co-founders of the two-year-old company are Stanford graduates in their late twenties. The initial investor was a Stanford alumnus.

The campus, in fact, seems designed to nurture such success. The founder of Sierra Ventures, Peter C. Wendell, has been teaching Entrepreneurship and Venture Capital part time at the business school for twenty-one years, and he invites sixteen venture capitalists to visit and work with his students. Eric Schmidt, the chairman of Google, joins him for a third of the classes, and Raymond Nasr, a prominent communications and public-relations executive in the Valley, attends them all. Scott Cook, who co-founded Intuit, drops by to talk to Wendell’s class. After class, faculty, students, and guests often pick up lattes at Starbucks or cafeteria snacks and make their way to outdoor tables.

On a sunny day in February, Evan Spiegel had an appointment with Wendell and Nasr to seek their advice. A lean mechanical-engineering senior from Los Angeles, in a cardigan, T-shirt, and jeans, Spiegel wanted to describe the mobile-phone application, called Snapchat, that he and a fraternity brother had designed. The idea came to him when a friend said, “I wish these photos I am sending this girl would disappear.” As Spiegel and his partner conceived it, the app would allow users to avoid making youthful indiscretions a matter of digital permanence. You could take pictures on a mobile device and share them, and after ten seconds the images would disappear.

Spiegel needed some business advice from campus mentors. He and his partner already had forty thousand users and were maxing out their credit cards. If they reached a million customers, the cost of their computer servers would exceed twenty thousand dollars per month. Spiegel told Wendell and Nasr that he needed investment money but feared going to a venture-capital firm, “because we don’t want to lose control of the company.” When Wendell asked if he’d like an introduction to the people at Twitter, Spiegel said that he was afraid that they might steal the idea. Wendell and Nasr suggested a meeting with Google’s venture-capital arm. Spiegel agreed, Nasr arranged it, and Spiegel and Google are now talking.

Spiegel knows that mentors like Wendell will play an important part in helping him to realize his dreams for the mobile app. “I had the opportunity to sit in Peter’s class as a sophomore,” Spiegel says. “I was sitting next to Eric Schmidt. I was sitting next to Chad Hurley, from YouTube. I would go to lunches after class and listen to these guys talk. I met Scott Cook, who’s been an incredible mentor.” His faculty adviser, David Kelley, the head of the school of design, put him in touch with prospective angel investors.

If the Ivy League was the breeding ground for the √©lites of the American Century, Stanford is the farm system for Silicon Valley. When looking for engineers, Schmidt said, Google starts at Stanford. Five per cent of Google employees are Stanford graduates. The president of Stanford, John L. Hennessy, is a director of Google; he is also a director of Cisco Systems and a successful former entrepreneur. Stanford’s Office of Technology Licensing has licensed eight thousand campus-inspired inventions, and has generated $1.3 billion in royalties for the university. Stanford’s public-relations arm proclaims that five thousand companies “trace their origins to Stanford ideas or to Stanford faculty and students.” They include Hewlett-Packard, Yahoo, Cisco Systems, Sun Microsystems, eBay, Netflix, Electronic Arts, Intuit, Fairchild Semiconductor, Agilent Technologies, Silicon Graphics, LinkedIn, and E*Trade....MUCH MORE
HT: Longreads

Saturday, April 28, 2012

Rare Droughtflood Battering England as Government Resorts to Doublespeak

From The Telegraph, April 27:
Tornadoes and record-breaking storms - but we're still in drought
Forecasters have warned of property damage, traffic disruption and power cuts as storms and even the odd tornado batter the country. 
But while the Environment Agency had 13 flood warnings and 42 flood alerts in place last night, it said many areas would remain in drought for the foreseeable future because groundwater levels were still extremely low. Householders faced the bizarre situation of being at risk of flooding while at the same time being urged to save water....

...It could turn out to be the wettest April on record. Some 97mm (3.8in) of rain has been recorded so far this month — 139 per cent of the average. The record, set in 2000, is 120.3mm.

The Environment Agency said recent rain had helped to push up soil moisture levels in the South East and East Anglia. River flows have increased and most are now normal or higher, although six are still below normal....MORE
If you are getting four inches of rain per month you are not in a drought. Period.
You may have an aquifer problem, you may have a potable water problem, you may have an engineering problem.
You don't have a drought problem.
You may however  have a forecast problem.
On March 23, 2012 the U.K.'s Meteorological Office issued their three-month forecast:
Period: April – June 2012 Issue date: 23.03.12

The forecast presented here is for April and the average of the AprilMayJune period for the United Kingdom as a whole.

This forecast is based on information from observations, several numerical models and expert judgement.


The forecast for average UK rainfall slightly favours drierthanaverage conditions for AprilMayJune as a whole, and also slightly favours April being the driest of the 3 months.

With this forecast, the water resources situation in southern, eastern and central England is likely to deteriorate further during the AprilMayJune period.

The probability that UK precipitation for AprilMayJune will fall into the driest of our five categories is 20-25% whilst the probability that it will fall into the wettest of our five categories is 10-15% (the 1971-2000 climatological probability for each of these categories is 20%).
As anyone who has ventured into the agricultural commodities pits knows, forecasting the weather is one of the dodgier intellectual pastimes one can pursue.
On April 6 the Met rolled out a new tool:
Met Office launches new forecast that tells you likelihood of rain on your barbecue
The national forecaster has previously been criticised for getting the weather wrong. Most famously in 2009 when the so-called “barbecue summer” predicted early in the year turned out to be a washout.
The furore prompted a rethink in how the weather is communicated and a proposed new US system that gives a more exact prediction of the likelihood of rain.
However there were fears that the revamp could cause even more confusion and it was launched without fanfare this week....MORE
They are now attempting to extend the reach of their expertise:
The Met Office and space weather
Even NOAA in the U.S. had to amp up the humility and dropped the paragraph they used to end their press releases:
NOAA understands and predicts changes in the Earth’s environment, from the depths of the ocean to the surface of the sun, and conserves and manages our coastal and marine resources.

"The Best of the Bozeman Police Reports"

As usual you could mentally add "Alcohol may have been a factor" to half of the reports although this week there appears to be more of an equine flavor (smell?) than usual.
From the Mess that Greenspan made:
It’s been a few weeks since the last look at the Bozeman police blotter and, with the weather being unusually warm for this time of the year (although we got about four inches of snow last night that should last about a day – go figure!), there are indeed some interesting items to report, highlighted by the very first entry below....
  • ... A caller reported seeing a driver on a cellphone. The caller was also on a cellphone.
  • A person reported that four horses on Dawn Drive are fed only once every few days and are “knee deep in manure.”
  • Ten miniature horses were left on a Bolinger Road property by the previous owners. The new owners wanted to know what to do with them.
  • A caller reported an injured whitetail doe. The caller said the deer had a leg injury. The caller was advised to leave the deer alone and that “many deer live successfully on three legs.”
  • A man has been riding his motorcycle down South 10th Avenue, speeding and doing wheelies. This is an ongoing issue.

"House GOP calls for turning macroeconomic policy over to a cabal of unelected bankers, with instructions to ignore the jobless"

My nominee for best headline of the month.
The Money Illusion reprises it in his post:
An unelected and anonymous cabal of bankers
A better read is his quick hit on yesterday's GDP numbers:
Spending on cars and houses doesn’t matter

Thoughts on the Mad Cow Outbreak

We like Dogbert. .


December 13, 2008

Don't Miss These Spirit Airways Specials

From the Boarding Area blog:

I’m So Glad Spirit Airlines Exists, Even if I Don’t Want to Fly Them

Via Matthew, they’re running a “More Bang or Your Buck” sale to Cartagena, Colombia. Upfront payment is required.
They are also running a “GSA Sale” with “scandal-free fares” because “you don’t have to spend lavishly to travel in style.” Oh, and GSA stands for “Great Savings Always.” Heh.

This of course is the airline that ran an Anthony Weiner sale and invited customers to check out the (suntan) oil on their beaches after the Gulf oil spill.

HT: Boarding Area's Kulula Airlines post.

For Sale: Home in Florida

From Florida Design Magazine:


Homes of the Rich: has more on one of the nicer shacks to come on the market in North Palm Beach.
(click to enlarge)
Screen shot 2012-04-27 at 11.35.12 PMScreen shot 2012-04-27 at 11.35.01 PM
SIMMONS-SARAY-D18-1BScreen shot 2012-04-27 at 11.38.28 PM

Science: "Can You Die If Someone Squeezes Your Testicles Hard Enough?"

From Gizmodo:
Today it was reported that a woman killed a man by squeezing his testicles. My immediate question was: can you die if someone squeezes your testicles hard enough? I asked Dr. Irwin Goldstein, urologist and San Diego Sexual Medicine's director. Here's the answer:
Yes, the testicles are exquisitely sensitive to touch and there is a huge release of adrenalin when there is excessive force applied to these organs.
Testicular pain is referred to the lower abdomen, mesenteric plexus, and causes men to stop abruptly what they are doing, lie on the ground, close their eyes and bend their knees.
A heart attack could certainly result from severe testicular pain from squeezing.
So there you have it. Maybe the man in China didn't die specifically from the testicle squeezing—we don't have access to his autopsy report—but yes, apparently any man can die from a heart attack caused by severe testicular pain.
HT: The Rhetorician

Williston, ND Has Probably Surpassed San Francisco and D.C. for Highest Average Annual Wage

Since the depths of 2008-09 I've thought of Prof. Perry as "The Happy Economist".
From Carpe Diem:

Metro Area   Average Annual     
Williston, ND$70,000
San Francisco$64,820
Washington, D.C.$62,890
New York City $58,500
Los Angeles$51,600

From today's Williston (ND) Herald:
"Williston Economic Development’s deputy director has the daunting task of tracking job creation in the Williston area. Shawn Wenko says he likes to see how Williston compares to other cities in the state. And, it’s probably no big shock that Williston leads the state in job growth. Wenko says Williams County created over 12,000 jobs from January 2010 to September 2011.
“That number doesn’t surprise me. If we could have brought housing online faster it would probably be even more....MORE

The golden touch: Rolling with the lords of the craps table.

A game I've never really understood. As best as I can tell it is all about streak management which is far from precise.
Sure there are the whip shot (spin on a vertical axis without tumbling) and the drop shot (freeze the lower die) but they are more effective beating ten-year-old kids at Monopoly than making money at craps.
From Harpers, 2008 via the author's blog:
For the gambler, dice have long been the best machine with which to turn a small amount of energy into a large amount of uncertainty. For the philosopher, there is no handier piece of rhetoric with which to evoke the foggy relations between God and universe, universe and man, or man and his own affairs. And so as I watched two members of the Golden Touch Craps team construct a dice pit in a windowless conference room of the Hyatt Regency O’Hare, I could not help but feel as though I were witnessing the creation of a universe, a green, felt-covered, racetrack-shaped cosmos where the dice are subject to the will of man and the men, therefore, are gods.

The cosmos, in this case, was a bundle of hinges and planks that had emerged the same morning, ex ovo, from the back of Colonel Joe Fox’s Ford. The gods were milling around like Teamsters, lugging boxes and power tools and their own steak-fed bodies, gradually transforming the beige void of the Allegheny Room into a miniature casino, a school for the study of dice control. I myself felt moved to pitch in, holding one end of the scuffed rail as Colonel Fox unrolled the layout with its pass and come solicitations lettered in red and gold. He wore a gold crucifix and four gold rings and a gambling face like something out of the Old West, lines of stony indifference etched around his mouth and eyes. “I musta re-covered three hundred pool tables in my life,” he muttered as a GTC colleague plugged in a tiny vacuum cleaner and ran it over the felt.

The Golden Touch Craps team had scheduled one of their “Crap$ 101” courses to begin the following day. In Crap$ 101, novice players receive two days of hands-on instruction in Golden Touch betting systems, Golden Touch visualization techniques, and, most important, the Golden Touch “controlled throw,” a method of retaining influence over the dice after they leave the hand. Tuition is $1,495, which does not include room, board, or a ticket to Chicago O’Hare; but with eight coaches and sixteen students, the student-to- faculty ratio bests the Ivy League. For an additional $300, students can take home an instructional Golden Touch DVD and the Gripper, a block of green foam designed to enhance the muscle memory of the fingertips. As graduates, students are eligible to enroll in the $1,995 Advanced Course, though some of the school’s wealthier alumni opt for private instruction at up to $10,000 per day. Those who prove themselves capable dice controllers and clubbable personalities are sometimes invited to teach Crap$ 101 as assistants to the assistant instructors. The post includes a $400 honorarium, drawn from tuition receipts.

I spotted Frank Scoblete, the gray-bearded, potbellied Zeus of the Golden Touch, unpacking a box of Grippers. Frank spent more than thirty years teaching high school English on Long Island before reinventing himself as America’s Number One Best-Selling Gaming Author. In person he seemed easygoing, with rounded features and feathery white hair, but when we shook hands his eyes had the watchful opacity of security cameras. He began gambling during the Eighties on the weekends, counting cards in Atlantic City. “I wasn’t addicted to the gambling,” he told me; “I was interested in seeing whether we could beat the casinos, these monsters, this industry that relies on the stupidity of its clients.” On the table beside the Grippers lay a selection of Frank’s teachings: Forever Craps, The Craps Underground, Golden Touch Dice Control Revolution! and Beat the Craps Out of the Casinos! On the cover of this last book is a photograph of Dominic “Dominator” LoRiggio just after releasing the dice. The cubes hover in perfect alignment below his outstretched hand, like tiny kites guided by invisible strings. He is dressed conservatively, in a blue Oxford and rimless glasses, but his eyes shine with a mystical blaze....MORE

Friday, April 27, 2012

Natgas drilling rig count hits new 10-year low

Look for a count in the high 400's before the trend is over.
From Reuters:

The number of rigs drilling for natural gas in the United States fell this week to the lowest level in 10 years as historically low prices continued to force producers to slow dry gas operations.

The gas-directed rig count has dropped in 14 of the last 16 weeks, sliding 18 this week to 613, matching the number of rigs drilling for dry gas back in April 2002, data from Houston-based oil services firm Baker Hughes showed on Friday.

The count climbed last week for only the third time this year.

One of the mildest winters on record sharply cut gas demand and built up a huge surplus inventory that has steadily pressured gas prices this year.

Front-month gas futures hit a 10-year low of $1.902 per mmBtu late last week, a level that crimped producer profits and made most dry gas drilling uneconomic.....MORE

Sectors: "Energy's Pain is Consumer Discretionary's Gain"

From Bespoke Investment Group:
Each week in our Sector Snapshots report, one of the topics we cover is the performance of individual sectors relative to the S&P 500.  Looking at relative strength helps to show which sectors are outperforming and leading the market, which sectors are underperforming and lagging the market, as well as other relationships between sectors.  One notable trend in this week's relative strength charts was the divergence between the Consumer Discretionary and Energy sectors.  As shown in the chart below, just as the relative strength of Energy began to fall off a cliff, Consumer Discretionary stocks took off.

Looking at the above chart, it seems completely reasonable to think that what would be bad for the Energy sector (lower energy prices) would be good for the consumer.  Looking at a longer term chart, however, shows that this has not always been the case....MORE

China: People's Daily Online Portal Comes Public, Jumps 74%

From the April 9 post, "Deng Xiaoping Smiles: Peoples Daily Online is Doing an IPO":
Peoples Daily Online is the website of the flagship newspaper of the Communist Party of China.
Deng Xiaoping helped lift 1,000,000,000 Chinese out of subsistence poverty* with his pragmatic market reforms: ...

"Do not care if the cat is black or white, what matters is it catches mice"
From Reuters:  
China state news portal jumps on debut after $219 million IPO
China's Co Ltd finished 74 percent higher on its first day of trading in Shanghai after a $219 million IPO as investors flocked to the state-backed news portal, giving it a bigger market value than the New York Times.

Demand for shares were so high that the stock was suspended for most of the afternoon, after triggering multiple stock exchange circuit breakers.

"Investors are scrambling for due to its scarcity. As long as you're a Chinese person, you would know the company," said Liu Guanwu, a media IPO analyst with Beijing-based consultancy Analysys International.

At its Friday closing price of 34.72 yuan, 73.6 percent higher than the initial public offering price of 20 yuan, was worth 9.6 billion yuan ($1.5 billion), more than New York Times, which has a market capitalization of $951 million....MORE

Shell Takes Aim at Biggest Prize in Energy: Natural Gas into Diesel (RDS)

From the WSJ Europe's The Source blog:
Shell is moving ahead with plans to build plants in the U.S. that could convert dirt cheap natural gas into high-valued diesel fuel, hoping to profit from an almost tenfold mark-up in prices that many analysts say is the biggest prize in the world of energy today.

With U.S. natural gas trading at the equivalent of $12 per barrel of oil, and crude oil at over $100 a barrel, the opportunity for profit is huge, but not without its risks. Building a gas-to-liquids facility would cost billions of dollars and take most of this decade to complete. The U.S. is already littered with money-losing long-term investments that fell victim to unexpected shifts in natural gas supply and demand.

Shell is the world’s leading operator of gas-to-liquids (GTL) facilities, which chemically convert natural gas into premium diesel, lubricants and chemical feedstocks. It operates the world’s largest GTL plant in Qatar and a smaller one in Malaysia.

The profitability of these GTL plants was a major contributor to Shell’s consensus-beating first quarter profits of $7.28 billion.

Similar plants in the U.S. could be potentially very profitable, said Shell’s Chief Financial Officer, Simon Henry. The company is looking at sites in Louisiana and Texas as the possible location for a plant producing at least 70,000 barrels a day of liquids from natural gas.
But the process is slow and complex. A final investment decision is unlikely to be taken within the next year and construction would probably take the rest of this decade, he said. The GTL plant in Qatar, which has a capacity of 140,000 barrels a day, cost around $18 billion and took five years to build....MORE

Which Finance Types Will be on This Weekend's Sunday Times Rich List?

From Insider Monkey:
Richest Hedge Fund Millionaires in the UK and Ireland
We received an email about the richest hedge fund millionaires in the UK and Ireland. The Sunday Times created a definitive guide to the wealthiest individuals in Britain and Ireland: The Sunday Times Rich List. Looking at the 1,000 richest people in the UK and the top 250 in Ireland, the paper will also reveal those who made their fortune in finance.

The 2012 Rich List, which is published this weekend, will see 54 hedge fund managers take their place among the richest Britons.

Topping the league table of hedge fund managers is Alan Howard, co-founder of Geneva-based Brevan Howard.. Making his mark as one of the most newly made billionaires, Howard, 48, launched the hedge fund in 2002 and has trebled his personal wealth since 2009 after a stellar 2011 produced fees of $1.5 billion. The Sunday Times Rich List estimates his personal wealth to be £1.4 billion – a huge increase from £975m in 2011 and £375m in 2009.

Chris Levett is a newcomer to The Sunday Times Rich List with a fortune of £250m.. Levett launched London-based Clive Capital in 2007. Clive Capital is the world’s biggest commodities fund management company, with $4 billion under management.

The 24th annual Sunday Times Rich List is based on identifiable wealth (land, property, other assets such as art and racehorses, or significant shares in publicly quoted companies), and excludes bank accounts (to which the paper has no access)....MORE, including the top 21 table.

So Much for the Keynesian Multiplier: $359.1 billion Q1 Deficit Buys $142.4 billion Q1 GDP Growth

We are past the point of no return.

The Austerians will come in with their lies and crash Gross Domestic Product.
They will be followed by the Inflationistas and their lies.
If one has even a grade school grasp of economics this is a terrifying graph.
It was bad enough back in the day when we presented the comparison in terms of percentage growth of debt and GDP. When the presentation is in dollars...
From ZeroHedge:
Presented without much commentary, because little is necessary: the only ratio that matters for the US economy, the change in US public debt ($359.1 billion) and US GDP ($142.4) in the first quarter, hit 2.52x and rising.

It takes $2.52 in new debt to "buy" $1 of economic "growth"

Let's Go: "Easy Money Policies Risk Creating a Housing Bubble in Germany"

Let's Go is a series of budget travel guides perfect for the impulsive property speculator.
More seasoned investors may want the challenge of pre-WWI Baedeker Guidebooks.
From History Squared:
Hott and Jokipii found keeping interest rates two low, as measured by the Taylor rule, can explain up to 50% of the overvaluation of the property market in previous bubbles. ~ voxeu
Credit Suisse notes the Taylor rule (inflation and unemployment rate), indicates "peripheral Europe needs a policy rate of minus 6.5%, while Germany needs policy rates of 6%. Rates at current levels 1 .25% are equivalent to a 2% boost to German GDP growth, on the OECD Interlink model." 


"We believe Germany will likely continue to see a monetary policy that is too loose — and thus we continue to buy domestic Germany." 

Real estate may be a better play....MORE

Solar: "Thin Film 2012–2016: Technologies, Markets and Strategies for Survival"--GTM Research (FSLR)

From Greentech:
Slide Show: Is Thin Film Solar Dead?
Well, not dead, but in dire need of a transfusion as per the GTM Research thin film report. Plus a few words on First Solar. 

GTM Research just published its most current and detailed report on thin-film solar technologies and markets. The author, MJ Shiao, conducted a webinar this week (archived here) which gave an introduction to the topic and the report.

Those following the news are well aware that recent events in the thin-film solar market are less than positive.
First Solar is closing its German factory and idling four of its industry cost-leading production lines in Malaysia. The company's stock price is currently trading at $18.31 per share -- that's below it's $20.00 2006 IPO strike price. (On a somewhat unrelated note, Mike Ahern, the current interim CEO of First Solar is crowned King of the Inside Sellers here.)

As Shiao said, If First Solar is struggling -- other thin film firms are in deep trouble as well.

Abound Solar has curtailed manufacturing in order to retool for an improved product. Odersun and UniSolar are bankrupt. NanoSolar, MiaSolé, SoloPower, Solexant, AQT -- who knows if these firms can survive the next few years?

Here are some of the slides from that report and some commentary:

Thin film solar's premise remains lower efficiency than crystalline silicon but at a much lower cost.

Markets are moving away from heavily subsidized Germany and Italy to emerging markets like China, the U.S., and South America.

"Milwaukee Red Cross Told To Prep For Chicago Evacuation During NATO Summit"

We've been eagerly awaiting this get-together, links below.
From CBS Chicago:
Is there a secret plan to evacuate some residents of Chicago in the event of major trouble during the NATO summit next month? CBS 2 has uncovered some evidence that there is. It comes from the Milwaukee area branch of the American Red Cross.

CBS 2 News has obtained a copy of a Red Cross e-mail sent to volunteers in the Milwaukee area.
It said the NATO summit “may create unrest or another national security incident. The American Red Cross in southeastern Wisconsin has been asked to place a number of shelters on standby in the event of evacuation of Chicago.”...MORE
Although we were disappointed in the President's chickenshit decision to get the G-8 meeting away from the protestors by moving the venue to Camp David, Chicago will still host NATO.

Feb. 26 
Debate: The Proper Role of Violence in the #Occupy Movement
You thought perhaps we had moved-on from #Occupy.
Heck no! Just wait for the G-8 and NATO summits in Chicago, May 19-21.
The summits overlap Chicago Craft Beer Week, May 17-27.
How fun is this going to be? Mayor Emanuel, #Occupy folks and beer?
In the meantime here's what's occupying my #Occupy in-box....
Mar. 6
Dammit: "Obama shifts location of G-8 summit from hometown of Chicago to his Camp David retreat" Rahm says "Not Insulted"

Thursday, April 26, 2012

"Battle of the Beards: Bernanke vs. Krugman"

There are plenty of places you can get the story but CNN Money  has the headline (and a rather hirsute asst Managing Editor).
From CNN Money's Economy blog :

Resistance is futile ... you will be assimilated!
By now, you have probably heard of the "feud" taking place between Federal Reserve chairman Ben Bernanke and Nobel-prize winning New York Times economic columnist Paul Krugman. And if you haven't, what the heck are you doing reading this blog?

Anyway, here's the lowdown in case you aren't up to speed. Krugman took Bernanke to task in a Sunday NYT magazine piece, criticizing Bernanke for not doing enough to tackle the problem of high unemployment. Krugman argued that a temporarily higher level of inflation might be necessary (and not problematic) to help bring down the unemployment rate.

In one of the more damning (and most widely picked-up) comments, Krugman geeked out (in a sci-fi, as opposed to econowonk, sort of way) and compared Bernanke to the infamous Borg of "Star Trek" fame, writing that Bernanke's refusal to consider higher inflation targets as an option show he had been "converted into a half-robot servant of a hive-mind."

Bernanke responded to questions about Krugman in his press conference Wednesday, saying that seeking a higher inflation rate would be "reckless" and only lead to a slightly faster pick-up in the drop in unemployment. He added that it risked damaging the Fed's reputation as an inflation-fighter.  Krugman gleefully retorted that this was further evidence that Bernanke had been assimilated by the Borg....MORE

A Look at Chesapeake Energy's Sidecar Arrangement with CEO McLendon, DealBreaker Style (CHK)

Following up on this morning's "Press Release: "Chesapeake Energy Corporation's Board and CEO Aubrey K. McClendon Agree to Negotiate Early Termination of Founder Well Participation Program":
A very different tone versus the Corporate General Counsel's initial response:
Chesapeake General Counsel: "Whatcha Lookin' At?" (CHK)...
From DealBreaker:
Chesapeake’s CEO Inconvenienced By Having To Find New Creative Ways To Exploit Shareholders
You may remember that Chesapeake Energy got some bad press last week for giving its CEO interests in all of its wells, and that CEO taking hundreds of millions of dollars in loans against those interests, and Chesapeake maybe not telling shareholders about that in the most forthright conceivable way. At the time, Chesapeake’s general counsel Henry J. Hood let everyone know that everything was fine and Chesapeake’s board was on top of the situation. Today, though, we learn that Henry J. Hood’s bosses are not as supportive as, I dunno, Dan Walfish’s*:
Chesapeake also wishes to clarify a statement appearing in its April 18, 2012 press release captioned “Chesapeake Energy Corporation General Counsel Henry J. Hood Issues Statement.” The statement that “the Board of Directors is fully aware of the existence of Mr. McClendon’s financing transactions” was intended to convey the fact that the Board of Directors is generally aware that Mr. McClendon used interests acquired through his participation in the FWPP as security in personal financing transactions. The Board of Directors did not review, approve or have knowledge of the specific transactions engaged in by Mr. McClendon or the terms of those transactions.
That statement doesn’t need clarification! That statement is perfectly clear! “The Board is fully aware of the existence of the financing transactions” means “everyone on the board is aware that financing transactions exist.” If Henry J. Hood had meant “The Board is fully aware of the details and amounts of the financing transactions,” he’d have said that. Being aware of the existence of a thing is the lowest level of knowledge that you can have about that thing. I am fully aware of the existence of Pinterest. The full extent of my knowledge about Pinterest is that it exists. See? Shut up everyone who’s all “‘fully aware’ means ‘generally aware’ now HUH LAWYERS?”

THAT’S RIGHT, say lawyers. I’m going to go out on a limb here and guess that the skills that allowed Henry J. Hood to say “the board has heard of this thing you call ‘financing’” but get a bunch of people to hear “the board knows all the details of what Aubrey’s up to, and it’s fine so don’t trouble your pretty little heads about it” served him well (1) in law school (you know this) and (2) in parsing the SEC rules governing related-party transactions, which restrict pledges of stock as collateral...MORE

Natural Gas: As We Bid Farewell to the May Futures (NGK12) We Look Forward to the June's (NGM12)

 It was a good short.
NGK12 expiring today, chart from ino
012-04-26 12:59:04,  NATURAL GAS May 2012 (E) (NYMEX:NG.K12.E)

Idiot Headline of the Day: ZeroHedge Edition

No (further) comment:
Gold “Bargain of Lifetime” As Gold Standard Inevitable, Possibly Within Year - $10,000/oz Looms

Refiners Unshorted and Overloved (VLO; HES; WNR)

From Schaeffer's Research:
With crude oil prices currently north of $100, and drivers across the world feeling pain at the pump, one would assume that oil refiners are having a banner year. The misconception that high oil prices drive profits higher for refiners is prevalent among many members of the general public. This is indeed false, as higher oil prices raise the input costs (crude that they purchase) without necessarily driving profit margins higher. There are many factors that can influence the profitability of refining companies, but perhaps the most important to consider are the crack spread, Brent Crude-West Texas Crude spread price, and seasonality.

Historically, refiners flourish between late February and mid-May, ahead of the busy driving season. For the most part, however, that hasn't been the case this year. Large-cap names such as Valero (VLO), Hess (HES), and Tesoro (TSO) have all substantially underperformed the broad market since late February. There are, however, two glaring exceptions to this generalization -- Western Refining (WNR) and Sunoco (SUN). For simplicity's sake, I'm excluding integrated oil names from this list, mainly because their increased refining costs are offset by their ability to produce their own raw crude oil...MORE 
...From a sentiment perspective, analysts remain very bullishly aligned toward the refiners. Among HES, SUN, TSO, VLO, and WNR, there are currently a total of 22 "strong buy" ratings with only three ratings of "sell" or "strong sell." Additionally, short interest on these names is down by an average of 18% over the course of the past month. Now that sentiment is growing extremely rosy, and the fundamentals for these names have begun to break down, this could be an opportune time to take short positions in select refining names.

Alphaville Diagnoses The Incredible Chinese Copper Inventory Build

From FT Alphaville:
China is being buried alive in copper
According to Wikipedia, compulsive hoarding is a disorder characterized by the excessive acquisition and inability or unwillingness to discard large quantities of objects that would seemingly qualify as useless or without value.

We’d like to make the case that China is suffering from this disorder and that we’re at the stage where a psychopharmacological intervention needs to be organised by China’s friends and family. If not China’s hoarding tendencies could destroy the world as we know it.

Case in point, the following picture from a Standard Chartered’s trip to examine copper inventories in bonded areas in eastern Shanghai last week....MUCH MORE
Amazing. It's like the cat lady who, when asked about the hundred tabbies just removed says:
"Well it started with three and then it just sort of got away from me"
Or the guys I mentioned in 2010's "CME Group expands dairy complex with cheese futures":
Years ago I heard of a Chicago company that made a whey-based artificial cheese.
Apparently the operation was headed by a mad scientist type who had come up with the formula but had no marketing ability.

He was producing the stuff and not selling any, converting all the investors' cash into this "analog" goop and storing it in Chicago area warehouses.

Then the Chernobyl reactor blew, the price of whey skyrocketed, I've no idea what the connection was, the company went broke and the receivers opened the warehouses to find tons of this 'cheeze', semi-molten in the summer heat.

That's what I thought of when I saw this story, tons of the stuff oozing out of bonded warehouses. No connection of course, just a visual....

Press Release: "Chesapeake Energy Corporation's Board and CEO Aubrey K. McClendon Agree to Negotiate Early Termination of Founder Well Participation Program"

A very different tone versus the Corporate General Counsel's initial response:
Chesapeake General Counsel: "Whatcha Lookin' At?" (CHK)

Via MarketWatch:
OKLAHOMA CITY, Apr 26, 2012 (BUSINESS WIRE) -- --Board to Review FWPP Financing Arrangements 

Chesapeake Energy Corporation CHK -0.44% today announced that its Board of Directors has determined that it does not intend to extend the company's Founder Well Participation Program (FWPP) with its chief executive officer, Aubrey K. McClendon, beyond its present 10-year term ending December 31, 2015. The Board of Directors and Mr. McClendon have committed to negotiate the early termination of the FWPP and the amendment to Mr. McClendon's employment agreement necessary to effectuate the early termination. The FWPP, which was approved by shareholders for a 10-year term in 2005, in conjunction with Mr. McClendon's employment agreement with the company, provides Mr. McClendon a contractual right to participate and invest as a working interest owner (with up to a 2.5% working interest) in new wells drilled on the company's leasehold. 

Following consultation with the company's Board of Directors, Mr. McClendon will separately disclose supplemental information regarding the interests he has acquired through the company's Founder Well Participation Program as of December 31, 2011. The company also announced the Board of Directors is reviewing the financing arrangements between Mr. McClendon (and the entities through which he participates in the FWPP) and any third party that has had or may have a relationship with the company in any capacity....MORE

Weekly Natural Gas Storage Report: Up 47 Bcf

As we said earlier this week the numbers the pros are looking for is the April 30 production consumption report.

From the EIA:

Released: April 26, 2012 at 10:30 a.m. (eastern time) for the Week Ending April 20, 2012.
Next Release: May 3, 2012

Working Gas in Underground Storage, Lower 48
Region Stocks in billion cubic feet (Bcf) Historical Comparisons
04/20/12 04/13/12 Change Year Ago (04/20/11) 5-Year (2007-2011) Average
Stocks (Bcf) % Change Stocks (Bcf) % Change
R=Revised. The reported revision resulting from resubmissions of data from one or more respondents caused the stocks for April 13, 2012 to change from 2,512 Bcf to 2,501 Bcf. As a result, the implied net change between the weeks ending April 6 and April 13 changed from 25 Bcf to 23 Bcf.

Historical working gas levels for the weeks ending March 23, 2012, March 30, 2012, and April 6, 2012 also were revised to reflect resubmissions of data. Working gas stocks for the week ending April 6, 2012 were changed from 2,487 Bcf to 2,478 Bcf, which lowered the implied net change for that period from 8 Bcf to 6 Bcf. Working gas stocks for the week ending March 30, 2012 were changed from 2,479 Bcf to 2,472 Bcf, which had no impact on the implied net change for that period. Working gas stocks for the week ending March 23, 2012 were revised from 2,437 Bcf to 2,430 Bcf, which lowered the implied net change for that period from 57 Bcf to 50 Bcf.

Changes to the salt-nonsalt breakout for the Producing region are available for download from the link below.