The Occasional Observer

failblog.org

You will laugh--guaranteed!

Thanks to FNG @ work for the tip...
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ed note:

Warning! While getting some yuks from this website, also be aware that some of the "FAIL"s are videos. I watched a few of them. And then, I got hit with a wicked virus. My computer is totally unable to boot up. Just be aware.

Well, glad to see Pan Am bomber al-Megrahi was released so BP could get their oil deal with Libya. I will NEVER buy from a BP station.

Nice, Beasty. Feel free to drop mulitple meaty, heavy issues on my plate after midnight.

Let me start with this point: the Reuters article tells me little. It states that oil prices "could collapse" as a result of impending changes in commodity regulation, but (A) not does not tell me what those changes are, and (B) glosses over the fact that Goldman Sachs (with all of their direct and indirect influence) sees unfettered growth in oil prices over the next 12 months. The case would not appear to be a slam dunk that new regulations (of some variety) = a decline in oil prices.

The article argues that that "speculation" is leading to increased volatility in oil prices. But who defines "speculation"?

Apparently, a recent Rice Univ. study says 50% of oil traders are "speculators." Noncommercial traders are up to 71% of the volume in the commodity, up from 30% at the beginning of the decade. Sounds ominous.

But let's remember a few things: There has been a proliferation of financial instruments--ETFs, ETNs, managed futures programs, alternative asset class mutual funds, just to name a few--that are allowing the both the retail investor, and the institutional money manager, to participate in the oil market as they never have before. Investors with brokerage accounts can now add a GSCI Commodity ETF, or a Crude Oil linked exchange traded note, to a portfolio without the magnified risks involved with options or futures trading. Institutional money managers can find liquid investments to meet specific goals, such as a low correlating asset to U.S. stocks that can bow the efficient frontier can create more favorable risk-return relationships.

Are these people speculators? If the Reuters article's implied definition of speculators as "noncommercial traders" holds up, then yes. But that hardly seems to meet the idea that most folks have of speculators.

My guess is that, to the casually informed observer, "speculator" means something else entirely. They would be considered gamblers who bet long or short positions becuase they: (1) enjoy high-risk, high-reward propositions; (2) have inside information; (3) are seeking to maniuplate the market; or (4) all of the above.

This definition hardly seems to fit the way many, if not most, investors seem to be incorporating oil into their portfolios currently: as a hedge against a dollar collapse, and/or a long-term play with an eye towards the BRIC nations economic growth and global resource scarcity.

But, you may be wondering, what to make of the seemingly irrational run up of oil from 50 to 150 in 2008, only to tumble back to its starting point? Did the supply/demand balance of oil, from an economic standpoint, change that drastically, and that quickly?

Probably not. But when viewed in light of what was going on in the broader capital markets, there is some logic to it. After all, by mid '08, U.S. and foreign stocks had already suffered large losses, and the worst was yet to come. Equities were losing their appeal. Fixed Income values were suffering as credit spreads balooned, and investors worried about a flood of defaults over the horizon. Short-term cash instruments were paying near zero interest rates. For a brief period later in the year, treasury bill yields actually went negative, meaning investors were willing to tie up their money for some period of time, with the guarantee of a small loss, but preferred that to the risk of larger losses elsewhere.

Amidst this backdrop, oil seemed to have a lot going for it. It had positive price momentum for a time, while equity markets were moving in reverse. The "peak oil"/resource scarcity story resonated with many investors, who felt the commodity would sustain its value even if certain economies were contracting. After all, the "awakening" of the Chinese and Indian economies were creating vast new demand for oil, and there would continue to be plenty of price support for oil if the American economy (and dollar) hit the skids, b/c SWFs might decide it makes more sense to stockpile a valuable asset if prices decline, than invest in low-interest rate notes that are creating cash flows in a diminishing currency.

Basically, plenty of investors, including hedge funds and institutions, looked out there and saw oil as the one reasonable "story" they could justify loading into when the rest of the world seemed to be going down the drain. Hence, a bubble shift.

The problem with defining the above ativity as "speculation" is that it does not differ from what goes on in any other marketplace: equities, fixed income, real estate, etc.

If people think that an asset can appreciate or improve their overall portfolio, who is to tell them they are wrong? Should regulators make the call that a stock, commodity, or personal residence is "overvalued" and investors must be turned away? That sounds good if you were the person loading into oil at $140, but how would it sound if you were the person trying to buy Microsoft in 1987, or Dell in 1993, when the stocks had already appreciated by hundreds of percent from their IPO price, and plenty of folks probably were screaming their P/E's were unsustainable. If you were locked out of those stocks by regulations that said "no more speculators", you would have missed out on the thousands of percent that the stocks appreciated from there. And more importantly from the policy perspective, you would have choked off the easy and cheap availability of capital to these firms, and potentially stymied their growth. Poor policy when one considers how integral these firms and their products were in improving productivity in the economy at large. To me, I'll always trust a free-market price over the judgment of some bureaucrat to tell me how valuable any asset is--be it a stock ot the future delivery of a barrel of oil.

The flip side is when the investor is colluding with others, or even acting on their own to intentionally skew the price of an asset for their own gain. How to differentiate this type of investor from the type described above is the job of a regulator, in a nutshell. But that is the case where regulations and regulators can be worthwhile. In those circumstances, it becomes a simple cost-benefit analysis: is the money we are spending on enforcement acutally worth it? In reducing market manipulation, are we actually producing a net gain to the economy through a more efficient distribution of capital, that it more than counterbalances the cost of enforcement?

Unfortunately, on this last point, the Reuters article gives me little to go on. What is the cost? Who are these manipulators, and what strategies can you lay out that would lead me to believe they could be caught and/or deterred from engaging in nefarious behavior at an acceptable cost to the taxpayer?

I don't see much in the article addressing those issues, only a range of opinions from the investment banks about what could happen. Brodman's comments hit closest to home:

"there's a growing political imperative out there. An oil price rise of $30 a barrel would offset 40 percent of the stimulus spending. That's not what these countries are looking for"

Just as I thought, it's concern that Obama's political narrative (e.g., the "success of the stimulus") could unravel that is driving the train. Who knows whether Brodman's $30 a barrel increase would have happened on its own; what's important to the administration is that it can't be allowed to happen. And rather than increasing the supply of oil, we'll just put de facto price caps in place by gutting the buy-side of the market. Because price controls have always worked so well in the past.

Surprise, surprise. ABC, NBC Won't Air Ad Critical of Obama's Health Care Plan

It's probably no surprise to my fellow OccObs'ers that I'm generally against any kind of government regulation, but the implications of this one intrigue me. This article from Reuters is about regulating oil speculation. It's been reported recently (although I don't know why it took so long), that oil speculation was and is the main cause for the dramatic increases and fluctuations in oil (and therefore gas) prices in the last few years. This may be the shred of politics I picked up from my maternal grandfathers, but what do speculators actually contribute to anyone? It's basically gambling that has adverse effects on the whole country. The draw to regulation is that it is likely to reduce the price of oil by $30/barrell, which will help pay off some of the stimulus (the article explains it better).

Along the same lines, should we regulate high-frequency trading? This is basically computer programs that buy and sell securities very quickly, trying to eek out small gains, which aggregate to large gains over the course of time. These HFT programs accounts for some ridiculously large percentage of trading volume (something like 70%).

Fredo, you know more about this stuff than I, so please enlighten me if I'm erroneously straying from my libertarian ways.

The Dems now no longer have 60 votes (not that they had them before) now that Ted Kennedy has passed on. Perhaps this combined with the widespread outrage at the town hall meetings will temper the socialist agenda in the bill. But, the probably just me being optimistic.

That's all I have to say about that.

In case anyone didn't hear about it, the Mrs. and I welcomed our daughter into the world on Saturday morning, 8/22/09, at 10:50 AM. It certainly wasn't a typical labor.

Strawberry Girl woke up at 8:00 saying she was having a lot of contractions, but that she figured it was a false labor. She'd wait it out and thought it would subside. I kept the boys company for breakfast and checked in every 15-20 minutes with her as she was resting upstairs. She said lying down made the contractions less painful and she didn't want the boys to see her in pain. She said she was going to take a shower, and when she got out I checked on her again, and she said she was going to "do her hair." Ah ha! "You think we're going to the hospital today, don't you?", I asked. Yes, she said. "I'm not sure what time, but we're going today."

"Are you timing your contractions, I asked?" She says she can't see the clock from the bed. I get her my watch.

Around 10:00 she comes downstairs. I'd dressed the boys, started getting them a snack, and had told my mother to come over. We just needed to wait for her arrival and we could go.

Just after that, the missus tells me, "the contractions are coming pretty regularly. I'm worried we waited too long." What!?! I tell her to get in the van, because she's between contractions. I'll get the bags.

I get the bags in the van and finish with the boys snack. I try my Mom's cell, and get voice mail. Call my Dad at the office (only about 1.5 miles away). "Hey Pop, we need to go the hospial."

"You're Mother's on the way over."

"I know. We need to go now."

"I'm on my way."

Dad gets to the house, and we exchange greeting on the front lawn as I head to the van. S.G. and I leave Bethpage about 10:25. I start ripping up 107 and get to a long red light at 107 and S. Oyster Bay Road. I try to go into oncoming traffic to pass, but end up coming to a stop, as I end up my-front-bumper-to-his-front-bumper with a car that was making the left onto 107 South. Another car, turning in the lane next to him, keeps me from going around. Traffic starts to pile in behind these cars, and the horns start to erupt. Finally I weave thru, well ahead of the light changing. As I continue to blow lights and slalom up 107, my cell rings:

"I don't know what you think you're doing driving like THAT, but you're not going to get to the hospital at all with that kind of driving. I was at that intersection, you know."

"Thanks Mom, gotta go."

I got all the way up 107, and turned Westbound onto Old Country. At this point, S.G. is barely able to talk because of the intensity of the contractions. I call the hospital, and after getting transferred a few times, I tell them we're on the way in, and I think my wife is going to be delivering soon, so get a room ready. The nurse later tells me they get these calls all the time, so she didn't think much of it.

After continuing with some fantastic driving stunts worthy of the French Connection, I finally managed to get us to the hospital in time for Strawberry Girl to give birth. Sort of.

S.G. had already informed me that the baby was crowning, just as we were passing the Barnes and Noble on Old Country Road on the way to Winthrop. She told me I needed to pull over right there to deliver. No way, I said. We're almost there. Figuring we were only about three minutes out, I told her, "don't push!" (I'm sure I'll get laughed at for that one later), and continued to weave between Westbound and Eastbound traffic, blowing every red light along the way. Thank goodness for that EVOC course.

By the time we got to Winthrop, I did a blowby past the security checkpoint, and pulled directly up to the E.R. door. I ran inside to get a wheelchair. As I entered the E.R., I announced to everyone and no one in particular that I needed a wheelchair to get my wife to labor and delivery. A security guard rushed down the hallway with me (and a wheelchair) towards my van. To my surprise, the missus was already walking into the hallway with another woman holding her arm. Just as I was telling her to get in the chair, she sort of folded to the hallway floor, and the woman with her said to me "I'm an EMT, and we need to deliver here."

It all happened pretty quick. The guard put over a transmission for a nurse. The nurse came out and shouted "code white." Then there were like ten people shouting "code white" and then the hall was filled with the whole E.R. staff (probably 30 people) within a minute. Strawberry Girl was about two to three feet from the sliding glass doors that are the entrance to the E.R. from the parking lot, but a bunch of security guards stood in front of the door with their backs to us to block the view, and they shooed away any pedestrians.

The medical staff delivered the baby, but she was practically half out already. I was scared to death when a nurse was asking for suction and they were all sitting around looking at each other like, "we don't have any suction." Luckily, the baby started crying a few moments later.

Finally, after the cord was clamped and cut, and the baby was being attended to by a gaggle of nurses, a nurse from the delivery wing showed up with a sealed package of sanitary linens. Just a bit late on that one.

They wheeled S.G. on a gurney, and the baby in a crib, down to the labor and delivery wing. As we were walking I called my parents.

Mom: "How's [S.G] doing? You think she'll deliver soon?"

Me: "She already delivered the baby. On the hallway floor in front of the E.R. You still think I was driving too fast?"

Mom: "Wow."

Anyway, there wasn't much for them to do in the delivery wing, but clean up the baby and the wife, and give her the pitocin to keep everything contracting and cleaning out. She thinks that stuff is from the devil. Seriously.

One of the nurses brought some paperwork to S.G.: "Do we have permission to deliver your child and provide treatment?" Heh.

Anyway, here are the most important details:

Mother and child are both doing very well, and should be released from the hospital tomorrow right on schedule.

If any of you haven't gotten my texts regarding the name and vitals, let me know, I'm happy to talk!

Many blessings for you and your family with the birth of your new baby girl.

tastes like Kool-aid and bourbon.

not good

That is all.

Just emailed from Father-Of-The-Beast (not sure if it's bogus, ut it's good anyway):

Some of us witnessed the arrogance of Barbara Boxer (CA) as she admonished a brigadier general because he addressed her as "ma'am" and not "Senator" before a Senate hearing. This letter is from a National Guard aviator and Captain for Alaska Airlines. I wonder what he would have said if he were really angry. Long fly Alaska!!!!!

You were so right on when you scolded the general on TV for using the term, "ma'am," instead of "Senator". After all, in the military,
"ma'am" is a term of respect when addressing a female of superior rank or position. The general was totally wrong.. You are not a person of superior rank or position. You are a member of one of the world's most corrupt organizations, the U.S. Senate, equaled only by the U.S. House of Representatives.

Congress is a cesspool of liars, thieves, inside traders, traitors, drunks (one who killed a staffer, yet is still revered), criminals,
and other low level swine who, as individuals (not all, but many), will do anything to enhance their lives, fortunes and power, all at the expense of the People of the United States and its Constitution, in order to be continually re-elected. Many democrats even want American troops killed by releasing photographs. How many of you could honestly say, "We pledge our lives, our fortunes and our sacred honor"?

And of course the guy who came up with this is being villified--so much for freedom of expression and fairness...especially when you see stuff like this:




For these paintings, comic artist Alex Ross (no relation to Bob) was highly lauded--especially for the one of Bush.

Manhattan judge forcing Google Blogger to give up the identity of an anonymous blogger.

Forget red states and blue states, let's get fired up about green states! No, I don't mean green energy (although that would be good for my current job), but rather the color coding on Gallup's latest poll results showing conservatives outnumbering liberals in ALL 50 states. Not a hint of white anywhere to be found!

This morning I figured something out. In private conversations about homosexuality, I've expressed my own opinion that I feel it's immoral. As a result, I was called homophobic, intolerant, old-fashioned and a variety of other terms (I don't really mind old-fashioned). Now, I've known a decent number of homosexual people, and liked some of them. I realized the ones that I've liked, don't define themselves by their sexuality and put it in everyone else's face. I don't share what goes on in my bedroom with my wife, and I don't expect other should either.

Phobic means and irrational fear. My judgment that homosexuality is immoral is neither irrational nor a fear-it's an opinion founded in my core values. I don't treat others badly because I disagree with their morality or lack thereof (homosexual or otherwise), so I shouldn't receive snap judgments from those who disagree-it's hypocrisy.

I also realized that I also dislike when others who define themselves by one issue pounce on me when I show the slightest disagreement. Vegans and extreme environmentalists come to mind. Instead of thoughtful debate or even respectful disagreement, you get demagoguery. Folks like this don't worry about offending people who disagree with them, but lambaste whomever opens his mouth in the slightest dissension.

In reading Maureen Dowd's latest rant today (I sometimes enjoy doing self masochistic things like reading Dowd or watching Maddow to see how much pain I can take), I caught the footnote at the bottom of the article:

Thomas L. Friedman is off today.

I couldn't help but think perhaps a more fitting footnote would have been:

As always in the NYT, common sense and rationality are off today.

from The Devil's Den:



ht: mynameisbond

Rasmussen takes it to Krugman and sticks it hard. Bravo. Perhaps Krugman ought to find a target other than one of the most historically accurate pollsters, especially in recent elections.

I urge people to read this horrific story. Every time I hear Obama and his naive team suggest we should "just open a dialogue and negotiate" it makes me lose a little part of myself. Perhaps his administration should be forced to read this and realize that there will be NO negotiating with disgusting animals like al qaeda.

Khidir was just 6 years old when he was savagely ripped away from his family, kidnapped by al Qaeda operatives in Iraq.

"They beat me with a shovel, they pulled my teeth out with pliers, they would go like this and pull it," said Khidir, now 8, demonstrating with his hands.

"This is where they hammered a nail into my leg and then they pulled it out," he says, lifting up his pant leg to show a tiny wound.

He says his captors also pulled out each of his tiny fingernails, broke both his arms, and beat him repeatedly on the side of the head with a shovel. He still suffers chronic headaches. He remembers them laughing as they inflicted the pain.

Who is so morally bankrupt and savage that they would do that to a six year old?

And to think of the outrage by liberal elites because we "violated" the "rights" of terrorist garbage by putting some panties on their heads and making them listen to loud music. THAT is not torture. What is described above is torture.

The guy is totally bat-s*** crazy, but he sure can drive a point home.

Gotta love it.

for Wed., August 6th:

Carla Jean Moss: Where'd you get the pistol?

Llewelyn Moss: At the gettin' place.

Carla Jean Moss: Did you buy that gun?

Llewelyn Moss: No. I found it.

Carla Jean Moss: Llewelyn!

Llewelyn Moss: What? Quit hollerin'.

Carla Jean Moss: What'd you give for that thing?

Llewelyn Moss: You don't need to know everything, Carla Jean.

Carla Jean Moss: I need to know that.

Llewelyn Moss: You keep runnin' that mouth I'm gonna' take you in the back and screw ya'.

Carla Jean Moss: Big talk.

Llewelyn Moss: Keep it up.

Carla Jean Moss: Fine. I don't wanna' know. I don't even wanna' know where you been all day.

Llewelyn Moss: That'll work.

BTW, ht to ManBeast who set this thread off with a textmessage.

But I really hope there is a hell just so Diane Schuler has somewhere to burn for eternity.

This is the woman who caused a massive accident on Taconic Parkway in upstate New York that killed her, her daughter, her three nieces, and three men in a second vehicle. In addition, her son was severely injured.

Initially, the picture was painted that Schuler was not feeling well and that led to her driving the wrong way on the parkway causing a horrific head-on collision.

Now the truth comes out: she left a campsite at 9:30am and was driving aggressively the entire time--flashing brights, tailgating, straddling lanes, and even passing a car using the shoulder. Around 1:30pm the fatal crash occurred. Toxicology reports show that her blood-alcohol level was 0.19, more than twice the legal limit (or the equivalent of about 10 drinks) with another 6 grams undigested in her stomach. Additionally, she had high levels of THC in her blood that indicate she was smoking marijuana 15 minutes to an hour before the crash. An open bottle of Absolut was also recovered in the wreckage.

So this woman was drinking while driving, as well as smoking pot with five children in the car (ages 8, 7, 5, 5, and 2). She was entrusted with the care of her brother's three children, much less her own two children. And yet she commits this heinous act of carelessness and stupidity.

Congratulations on destroying the lives of four families, much less the extended families, friends, and co-workers who will also feel the loss. The case is now being treated as a multiple homicide but what good does that do now? She's off the hook. Who can be punished?

And now that the truth is out, how long will it take before they try to paint Schuler as a victim--most likely of addiction. "Oh, this wasn't her fault--she had a problem that she was bravely fighting and dealing with in a heroic manner. The alcoholism is at fault, not a loving, responsible mother."

Mark my words--it's coming.

And just when I thought this story couldn't make my any sicker...

Kudos to Hillary (did I actually just say that?) for throwing a sucker punch early in the 2012 race.

Any way you look at the situation, it's a win for the Clintons. If the White House tries to make the claim that they set up the negotiations for the release of the reporters in North Korea, it makes their administration look weak an ineffective that an outsider had to get the job done. And if they say that Bubba went over on his own, then Hillary gets to point out that the Clintons can accomplish missions on their own that the presidency was unable to.

And listening to the press conference was priceless: every time one of the reporters thanked "President Clinton" for obtaining their freedom, Obama must have thrown up a little in his mouth. Nothing like getting that idea into people's heads again--"President Clinton." Even if it's a few years away, those little nuggets tend to stick.

Subliminal campaigning--it's all the rage...

And things look better for Mitt by the day.

I was (almost) encouraged by some headlines I saw in the NYT.

The first one is Top 1% Paid More in Federal Income Taxes Than Bottom 95% in ‘07. But alas, instead of pointing out why this is the reason the rich benefit from tax cuts or why you don't want to overtax the rich and cause them to leave with their money, leaving everyone else to pay their share, the article was about how the richest had the best income growth.

The second one It May Be Outrageous, but Wall Street Pay Didn’t Cause This Crisis. Even closer, but no cigar.

And the third, Profit Dropped 66% at Exxon Mobil, doesn't even mention the windfall profit bill.

sigh

http://www.geekologie.com/2009/08/youre_doing_it_wrong_woman_dra.php

I. Want. Pictures.