Friday, June 24, 2011

The Silly Season in America; No Tennis or Pimm's

     The Silly Season has begun. In England this season involves regattas and tennis and Pimm's at garden parties and everyone in the City is either a little bit hungover or on holiday. The papers are full of silly headlines involving the Queen or Fergie or shenanigans at Wimbledon. Here in America the Silly Season begins with dozens of little known Republican politicians declaring their candidacy for President. They shout and whinge about the economy, about jobs and about how terrible it is for the average American to pay $4.00 a gallon for gasoline while they walkie-talkie their limo drivers to wait out front.
     Americans like cheap gasoline. They believe it is their God-given right to have cheap gasoline. They drive to the local corner market when they could walk, and they leave their engines running (even when the temperature outside is a tepid 70F as it was here last week). They buy pickup trucks and never use the back of them to carry anything but the family dog, while getting 15 miles to the gallon. They drive ATVs around and around my house in Maine, making me rethink my gun-control stance. They drive from NYC to northern Maine - an 8 hour drive - for a long weekend (they are renting said house).
     The confluence of these two things - silly politicians and average Americans whinging about gasoline prices - led to the silliest of silly things yesterday. President Obama announced he had authorized the release of oil reserves from our SPR and from the IEA's stocks. We are to receive the 'gift' of 30 million barrels of US crude from the SPR and 30 million from the IEA. Oil prices puked, despite much head-scratching. US consumption is close to 20 million barrels per day, so that's a day and a half's worth from the SPR. The IEA link is more surprising, but it could be that it to try and hammer down the unnaturally high Brent/WTI spread.
     I heard that the news of the SPR/IEA release leaked out (probably in Europe, the IEA has to notify the producing/holding nations before tapping its reserves). Some oddly anomalous spread trading was noticed about a week before the announcement. There's one for you Commissioner O'Malia....

Tuesday, June 21, 2011

Guest Post: The Story of the Carolina Wren

     This was written by my Mum, Jeanne Wold. The bird's lessons should replace many a firm's 'mission statement'. Enjoy.
     "When Spring arrived in Tellico Village, TN my husband, Just, moved his stained glass workshop out of the sun porch and into the garage. A few days later he noticed a small, brown bird flying around the space, then leaving. A short time later the bird came back with a twig in her mouth and landed on a plastic magazine shelf above the worktable. She made several trips despite Just's attempts to shoo her outside. She was making a nest.
     Before he left the garage, Just tore out the nest and put it in the rubbish barrel. Back the little bird came the next time the garage doors were open. Again, Just destroyed the nest. This went on for several days. Every time the doors were left open the little bird was hard at work building another nest. It was evident that the persistent little Carolina Wren was building this nest where she wanted to, come hell or high water!
     By this time Just was won over. Whenever he closed the doors he left one garage door open up high enough for the little wren to walk under and then fly to her nest. Although her mate was a frequent visitor, he never came into the garage unless he could fly in or out through a wide open doorway. Instead he stood guard outside while the mom did all the work.
     One day I was surprised to see the mom-to-be land on my desk in the office upstairs, with a twig sticking out on both sides of her beak. She sat there for a moment and then retraced her flight path through the master bedroom and out of the terrace on the second floor. At the time I surmised that she must have mistakenly flown in the wrong door. However, maybe we had forgotten our agreement and had closed the garage doors tight. Could that have been? Was she reminding me? Yes, indeed. There was no opening for her to enter the garage.
     As little and cute as this bird is she has a piercing call; one day last week she let out several screeches as she sat beside her nest. We knew that she had finished laying her eggs and the next phase had begun.
     Both Just and I enjoyed this experience immensely. Our little messenger has taught us the following: She knows exactly what she wants and how to go about getting it. She shares her enthusiasm with others and invites them to participate. She makes each of us an intricate part of the plan by keeping us up to date on the progress and alerts us whenever we are forgetful. She never for a minute puts aside her goal and - happily - we make her goal our goal."

Thursday, June 9, 2011

Saudi Arabia and the Price of Oil

     Yesterday's OPEC meeting ended with the Saudis being outvoted on raising production. This is a double-edged sword for the Kingdom, which is pumping billions into jobs and mosques in a bid to avoid a popular uprising. The Arab Spring, which started with Facebook and ended with Egypt, Tunisia, Syria, and Yemen in tatters, won't come to Saudi as long as the money holds out. A trader told me that Saudi tried to look like the "good guys" in yesterday's OPEC meeting, cajoling and pushing to raise the production ceiling. In truth, Saudi is angry with the US for supporting all the riff-raff rebels in the Middle East and loves that the current high price of oil is hurting the US economy. According to analysts, if Saudi keeps up its social and religious investments to keep the peace, the price of oil has to reach $300 a barrel to support it. Take that, American infidels!
     And, although US demand for oil is said to be quite a bit below normal, you wouldn't know it on the road. I've been on Route 95 from MA to ME and back a bit lately and I haven't seen so many huge RVs in years. One caravan of about 10 RVs came all the way from Oregon - imagine their collective gasoline tab. And up in the North Woods of ME our peace and quiet was repeatedly interrupted by kids on ATVs going around in circles for hours.  If Americans continue to believe that cheap oil is a national entitlement then the Saudis will get their wish. I'm putting a bet on at Ladbrokes that we reach $300 by the end of the decade.