Natural Gas exhonerates Speculators! 1

Ok, I have conversed with many via twitter that think speculators are the devil.  While I agree, as a speculator, that they are a part of the problem, I disagree that they drive price.  Instead, speculators only carry the momentum that is already pushed upon it by outside factors.  I am excited to point out the latest example of speculators being neutral when it comes to price.  Natural Gas is a commodity that is played just like oil.  There are a hundred different ways to play this commodity, but the most important point is that it is at multi-year lows.  Has demand gone down? No, but supply has gone up.  Due to fracking (no comment on the legitimacy of this process here) they are finding it under every rock in the U.S.  I exaggerate this on purpose.  Because the notion that it is everywhere is speculation.  Speculators are getting out of the trade because of an assumed over-supply.  They are correct!  This lowers the price to unheard of levels.  It is almost a 1/3 the price is was in 2010.  Where are the Senators now?  Why aren’t they out congratulating us?..  Hypocrites!

The major difference between Natural Gas and Gas at the pumps is that there are more factors for gas at the pump.  When it comes to gas, we are far more subject to feuding countries that supply it, and profit lines of major refiners here in the U.S.  Remember that it is Oil that is speculated, not the price of gas at the pump.  Big oil companies are profiting huge on the difference between the price of oil per barrel and what they can get at the pump.  Here is what I mean: Last April price of light sweet crude was $125 per barrel and oil companies were still able to make a good profit at $3.25 per gallon.  Now that oil is only $103 per barrel, they are able to charge over $4.10 at the pumps.  This isn’t speculation, but profit.

The GOP Conspiracy 1

Before I begin, I must be very clear that I am not a conspiracy theorist kind of guy nor an anti-Republican!  Therefore, it is an internal struggle to put this out there, but after several months of introspection I feel it is time.  The Republican Party seems to have conspired to keep Buddy Roemer out of the race for president.  He would never come out and say it because it opens him up for an all out attack from the party.  He would then have an even smaller chance to win an election.

What are the facts?

Buddy Roemer has all the experience you would want for a commander-in-chief.  At Harvard, he earned a BS in Economics and later an MBA in Finance.  From 1981 to 1988 he served as a Congressman.  From 1988 to 1992 he served as Louisiana’s Governor.  While there he cut the unemployment rate in half, reformed their campaign finance laws, and balanced the state’s budget.  I don’t mention this to get readers to vote for him, but to show how qualified he is to have been a candidate.  The problem isn’t what he has done, it is what he hasn’t: He has never accepted Super PAC, or special interest money.  Matter of fact, this has been his platform to get elected.  The fact that he doesn’t accept this money makes him an enemy of the state, if you will.

Imagine running Buddy out there when his platform of campaign finance reform and getting SuperPAC’s out of politics could make your party look bad, as a whole.  Fox News network, a GOP slanted news network, hasn’t even hinted that Buddy Roemer exists.  He was left out of all debates.  Why you might ask?  At first they told him he wouldn’t be allowed in the debates until he officially signed on as a candidate.  That makes perfect sense until you realize that several others hadn’t that they allowed in debates.  So, Buddy officially announces his running.  Then they told him that he had to have at least 2% of the votes of a given state to qualify.  Again, you might think that this is a fair request.  We cannot have everybody and their brother in a debate, but you have to know that when they required this from Buddy, John Huntsman, Michelle Bachmann, and Rick Perry didn’t have 2% yet they were invited into these debates.  Despite the hypocrisy of the situation, Buddy attained the 2%.  Then they said he had to have 5% of the votes.  At this time only Perry and Bachmann didn’t have the 4% but they were allowed in the debates.  Matter of fact, Buddy was ahead of both of them in the polls.  You still saw no mention of his existence on Fox News and he wasn’t allowed into the debates.  Buddy Roemer was working hard to get the 4%, and then they dropped the bomb.  They told him that he had to have a minimum amount of money raised for his campaign to get in the debates that was far beyond what he had raised to that point.  This, they knew, went directly against his platform.  He will not accept more than $100 per campaign donation.

As a result, Buddy Roemer has dropped out of the GOP race and decided to run as an Independent via the American’s Elect process.  Although I’m voting for Governor Roemer and love his platform of Campaign Finance Reform, this is not my point.  I hate the fact that politics has come to this.  Republicans snubbed one of their own because he was a threat to their pocket-book.  Democrats would have done the same thing if the situation was reversed.  It is a bi-partisan problem.  They will do anything they can to “keep the money in.”  This is why we, as a Republic, have to fight our own apathy and do something about it.  We have to support someone like Buddy.  Even if you don’t plan on voting for him, you should want a man like him in upcoming presidential debates.  His take on money in government shouldn’t be silenced or big corporations will continue to own our democracy.  We have to get the money out, and supporting people like Buddy is a way of going about it.

 

 

 

Profit, not speculation, driving gas prices! Reply

One year ago Crude oil was $120 per barrel and never broke $3.25 at the pump. Currently, Crude Oil is resting at $102 per barrel and the average price at the pump is over $4.00.  Therefore, since April 2011, oil companies are saving $20 a barrel while gas prices have risen 23%. This equals a profit increase of 40%.  Real demand has been very steady, so we have to assume that prices are merely profit based.

Several Senators and Congressmen and women have come out to attack “rampid speculation.” Senator Bernie Sanders has gained popularity just for his stance against Wall Street on this issue.  Sanders is sponsoring the End Excessive Oil Speculation Now Act.  Now I don’t see any problem with this idea, but they are so far off the point here.  It is like Papa Bear getting mad at Mamma Bear because Goldilocks ate Baby Bear’s breakfast.

Speculation does have a piece of the blame here, but it is minute compared to the almighty profit of big oil companies.  Also, speculation drives the price down just as much as it drives the price up.  The major fault with speculation is that it swings the prices more dramatically than it would otherwise be.  For example, at the end of 2008 we thought the financial world was collapsing.  Because everything in speculation is anticipation, speculators figured that demand would diminish further than it actually had.  This assumption led to the price of oil to fall to $32 a barrel.  In actuality, it had dropped, but only minimally in the grand scheme of things.  Within a year, prices had gotten back to $80 a barrel.  At that price, everyone was pretty happy.  You see, $80 is the breaking point for big oil companies to make money.  They were returning to big profits and we were still under $3.00 per gallon at the pump… a far cry from being over the $4.00 we were seeing in the summer of 2008.

Exxon Mobile, a company I love, makes 17 billion dollars a year before taxes.  Knowing that they are losing money in Natural Gas, where do you think they are getting record profits?

 

Understanding Oil and Gas Prices Reply

Because understanding the price in oil is a bit of a specialty of mine, I thought I might share (in the simplest of terms) why the prices are what they are.  There has been so many wild accusations and finger-pointing that I feel it is time for some rational explanations.  To quote just a few people and media comments: “Speculators are strangling America.” “Obama has no energy plan.” “A vote for Newt, is a vote for $2.50 gas.” “Drill baby Drill.” “We have to make ourselves energy independent from the middle east.”  While all of these comments have grains of truth in them, they are really founded in misconceptions about the oil markets, where we get our oil, and how much policy can even affect prices.”

Let’s start with speculation.  Speculation does drive up the price of oil, but remember it also drives down the price of oil!  Speculation is just that, speculating on demand.  This really just makes for greater swings in oil, not a simple driver to higher levels.  Here’s what I mean: Summer of 2008 we had oil hovering just under $150 a barrel.  Prices at the pump were in the $4.25-$4.50 range. People trading futures, options, and companies that represented oil were looking at problems in the middle east and possible limited supply.  That December the price of a barrel bottomed at around $32 a barrel and at the pump around $2.65 a gallon.  This right there is a very telling point.  People were not decreasing demand of oil by 4.5x.  In fact, actual supply/demand ratio didn’t fall by much, yet the price per barrel tanked.  This was a result of insane speculation.  It was a much larger swing than was warranted due to fears that our entire economy was swirling around the toilet.  This important fact is also an explanation of price gouging.  Realize the price at the pump has moved significantly less, percentage wise even though it is much cheaper for them to purchase the oil.  This is a very important realization.  The price of refinement hasn’t changed.  Only profit margins increased.  Oil per barrel is only 21.33% of what it was, yet they are able to charge 58.88% of what they used to. I assure you they were making a killing even though the price of oil was at $150, now we’ve just increased their profit margins.  The only ones losing are the people who actually take the oil out of the ground.

Let’s use the Saudi Arabians as an example.  When prices were at $150 a barrel, they were rolling in money, but they didn’t set that price.  Matter of fact, they were actually increasing supply as much as they could to take advantage of the prices.  If you speak to anyone in the know about oil, you will find out that they need prices to be $80 or more to turn a profit, so $70 above is great for them.  There are a multitude of reasons why it is dangerous to become dependent upon some of the middle east countries for their oil, but it is important to note that none of them have ever even hinted at the fact that they would decrease supply.  We are their life-line.  When I say we I am including China and all major oil consuming countries.  We get more than 20% of our oil from Canada, we are increasing our Brazil Oil connections, and have always been a large oil supplier ourselves.  So, in summation, we don’t rely too heavily on middle eastern countries for oil.  They are just a player and do everything they can to keep us happy.  They know they are not a necessity in this game, much like Coke tries to appease their vendors.  They are the biggest and the baddest, but it comes down to keeping your customers happy.

The idea that Obama has no energy plan is hilarious to me almost as much as Newt Gingrich saying he will give us $2.50 per gallon gas.  Both are ridiculous.  Obama does have a plan, and you cannot simplify it too much by saying he just wants to use “green energy.” What he has is plenty of supply, but two strong forces working against him.  Exxon Mobile is one of the largest players in the game.  They are going to sap every bit of profit out of a gallon of gas that they can.  I don’t blame them because they are beholden to their stock holders and, after all, it is a profit driven business.  Are we to assume that they should take losses so that you can drive to the grocery store on the cheap?  No, that is ludicrous.  There is the chance that companies would go out of business.  The fewer refineries, the higher prices.  You get the drift.  Not to mention, that there is no way Obama has the pull to completely rid the stock market of speculation.  Republicans are “free-market” and pro-capitalism.  Is there a chance in hell that they allow him to pass legislation limiting the amount of speculation on Oil as a whole?  For both of these reasons, Newt doesn’t have a chance of bringing gas down to $2.50 a gallon on his own.  Why?  If he proclaims “Drill baby Drill” it will only be a temporary fix.  Speculation will drive prices down because people will assume that Supply will go up… This is not the case!  They will only drill what is economically feasible.  Exxon is NOT going to drill themselves out of a profit!  As supply maintains virtually what it does already, the prices will eventually reach a norm and be subject to speculation about the next middle east squabble.

Bottom line.  Speculators, big oil companies, and politics all play their role, but the only way to get prices low and keep them low is to find an alternative forms of energy (which I know is a sin to say out loud), or the government has to get into oil production itself because it is a for profit game.

Earmarks are a Microcosm of how Government Works 7

Corporations have bought off our government.  Below is a list of some of the earmarks for 2010 that went to campaign donors.  You have to see a list like this to see the gravity of the situation, and this is just the tip of the iceberg.  I cannot show you every single earmark that went to campaign donors.  I would to make a point, but it is simply too much raw data.  I know no one will read this line item by line item, but the extent will grab attention.  This is just to illustrate how bad it really is.  Also, I understand that earmarks are just a small percentage of the National Budget, but you have to remember they are a microcosm of how government works.  Tax loopholes, subsidies, tariffs, anti-competition laws, etc. etc. are all written in this same manner.  They just aren’t as clearly stated that they were written for Company X that might have donated to Congressman Y’s campaign via straight donation or Super PAC.  Enjoy:

Tim Bishop Rep. (D-NY) got $13.5k in donations from STIDD Systems and gave them a $3.6mil earmark.

David Dreier (R) Rep of Cal. received donations from Chang Ind. and rewarded them w/ a $3.2mil earmark.

  • Aerovironment Inc: Donation to Dreier equals $1mil earmark.

Rich Shelby (R) Senator of Alabama gave 23 earmarks for $90mil to campaign donors or companies that lobbied him.

Sam Johnson (R) of Texas: L-3 Comm. donated to his campaign, and he gave them a $3.04mil earmark.

  • SVTronics Inc also has a cozy relationship w/ Johnson that took the next step to a $2.72mil earmark (3rd base)
  • Rockwell Collins Inc, gets a $2.4mil earmark for their efforts in lobbying and donating to his campaign.
  • Raytheon Co. donated heavily to his camp and was rewarded w/ $1.6mil earmark.
  • Mustang Tech., Sam Johnson campaign donor, got a $800k earmark.

Tim Murphy (R) of PA received campaign $ from Curtiss-Wright Corp via PAC’s and rewarded them w/ $2.88mil in earmarks.

  • Converteam Inc., a campaign donor of Murphy’s, also got an earmark.  This one only $1.6mil.
  • PPG Ind. donated directly, through PAC, and lobbied him to get their earmark of $1.6mil.
  • Eaton Corp., another Murphy donor, got a $600k earmark sponsored by Murphy.
  • National Center for Defense Mfg & Machinery donated to his campaign and was rewarded w/ a $1.6mil earmark.

One of Ed Pastor’s, (D) of AZ, biggest campaign donors is Honeywell Int.  He sponsored 2 earmarks of $4mil and $3.2mil.

  • United tech. lobbied/donated to campaign and got a $4mil earmark courtesy of Mr. Pastor.
  • Robertson Aviation dropped 100k on lobbying, much of which on Mr. Pastor.  They got a $2.4mil earmark via Pastor.
  • BAE systems, a Pastor donor, also got a $2.4mil earmark.
  • Goodrich Corp.  donated through PAC’s and received a $2mil earmark.

(R) Robert Aderholt AL congressman gave a $6mil earmark to Victory Solutions.  You guessed it, they’re donors to his camp.

  • QinetiQ North America spent a ton of $ lobbying Aderholt and was rewarded w/ a $3.2mil earmark.
  • Miltec Corp supported his campaign, and he supported their bottom line w/ a $3.2mil earmark.
  • Peopletec Inc.  Same deal.  Donated/lobbied and got an 3.2mil earmark.  Goes around comes around, I guess.
  • J2 Technologies donated to his campaign and got a mere $3mil in earmarks.  Wonder were their .2mil went.
  • SUMMA Technology spent 30k on lobbying Mr. Aderholt, and was the recipient of a $2.4mil earmark.
  • Intergraph Corp. donated to his campaign and magically got a $2.32mil earmark.
  • Raytheon Co: 1 of Edward J Markey’s (D. Representative of MA) 10 biggest donors got a $4mil earmark.
  • Foster-Miller spent 32k lobbying Markey and got a $3.2mil earmark.

Cerus Corp. dropped over 160k lobbying Edward J. Markey D. of Mass. and was rewarded w/ 2 seperate earmarks of $2.4mil.

  • ‎123 Systems: Edward Markey of MA, a $2mil earmark. Oh, ya they donated to his campaign too.
  • QD Vision lobbys Edward Markey for a Nanocrystal Source Display: They get an earmark.

Rep. Joe Courtney (D) of Conn. biggest campaign contributor was General Dynamics… Yes they got a $4.8Mil earmark from him.

  • Honeywell was a big contributor & Lobbied him, they got a $4mil earmark sponsored by Courtney.
  • United Tech., his 4th largest donor, got a $4mil earmark that he sponsored.
  • Alion Science & Tech., donated and lobbied Courtney,  weird how they got a $3.6mil earmark via Courtney.

IN (R)Dick Lugar got camp. $ from Altair,Flagship Ent, AmeriQual, and Allison Trans. Each got their own earmarks of $3mil or more

Steve Buyer (R) of IN received donations from Society of Indep Gas Marketers, BP, Bridgestone, Marathon Oil, and XCel Energy Pac.  No wonder  he twice co-sponsored: Disapproving a rule submitted by the EPA relating to the endangerment finding and the cause or contribute findings for greenhouse gases under section 202(a) of the Clean Air Act.

Mark Souder (R) of IN sponsored $3.6mil in earmarks for Raytheon Co.  and yes they were one of his biggest donors.

Andre Carson (D) of IN sponsored $9.8mil in earmarks.  1/2 of that money went to campaign donors or peeps that lobbied him.

David Loebsack (D) of IA earmarked $9.6mil for Rockwell Collins Inc. after they donated to his campaign.  $9.6mil.

R of Kan Representative Todd Tiahrt’s biggest campaign donor was Boeing.  He got a $6mil dollar earmark just for them.

  • Hawker Beechcraft, a Tiahrt donor/lobbyer got a $7mil earmark courtesy of Mr. Tiahrt’s sponsorship.
  • Kaman Corp. Lobbys him and donates to his campaign to get a modest $3mil earmark.
  • Curtis-Wright Corp is a big donor and receives a measley $1.6mil earmark.

Steven Rothman D of NJ set aside $5.6mil in earmarks for Stevens Inst. of Tech. You guessed it, they were campaign donors.

  • Dynamic Animation Systems: Yup donated to his campaign and hired lobbyists to get in Rothman’s ears and they get a $3.5mil earmark.
  • Covanta is yet another down the line where they donate and get an earmark.  This time, $2.5mil.
  • Absecon Mills donor gets $2mil in earmarks
  • Phacil Inc lobby’d Mr. Rothman and gave to his campaign, they were rewarded w/ a $2mil earmark.
  • General Dynamics too donates to his campaign and lobbys his office and is rewarded yet another $1.68mil earmark.

Bill Young earmarked $4mil for Alliant Techsystems after they contributed to his campaign and hired lobbyists to pull his ear.

  • Alakai Consulting and Engineering donated to Billy and only got $1.6mil in earmarks.
  • Contributor Honeywell got $1.6.
  • SAIC donated to the campaign and got 2.4mil in earmarks from him.
  • Bill Young R of FL co-sponsored 64 earmarks totalling $128million.
  • Raytheon Co. a $4mil benificiary contributed to his campaign.

John B. Larson D. of CT received $87k in contributions from United Tech. and rewarded them w/ $4mil in earmarks.

  • Honeywell contributed to his campaign and got another $5.6mil in earmarks.

Jim Moran has been a naughty boy.  If you look at ITT Corp, one of his donors, he granted them a $1.6mil earmark for their support.

  • Argon ST got 2.4 million and donated to his campaign.
  • Dynamis Inc. same story.  Donated to campaign; got $2mil in earmark money.
  • ObjectVideo Inc. same story: Donated and got $2mil in earmark money.
  • Innovative Defense Tech. Same-Same.. Donated to get $2.0mil in earmark money.
  • Dynamic Animation Systems then next in a long line of earmarks for this guy.  Donated and got a $2mil earmark in return.
  • Progeny Systems donated to him and only got $1.6mil in earmark money.
  • ITT Corp. got 1.6mil for their campaign contributions.
  • EM Solutions, another $1.6 million dollars in earmarks.
  • DDL OMNI Engineering.  $1.6 million and a donor.
  • MobilVox Inc. 1.6mil
  • SyTech Corp got $1.6 mil for radio inter-operability system from earmark money after donating to his campaign.
  • SAIC Inc dontated and got 1.6mill too.
  • Curtiss-Wright Corp secured 1.6 mil in earmarks through their contributions to Jim Moran.
  • Jim Moran (D) of VA also gave ManTech Int. a $2mil earmark; they too a big donor to his campaign.
  • BriarTek Inc. was Jim Moran (D) of VA 5th biggest financial campaign supporter and was rewarded w/ a $2.4mil earmark.
  • IR-Vascular Facial Fingerprinting is what they are getting the earmark for.  via the defense spending.

(R) Doc Hastings sponsored two seperate earmarks of $2.4mil that went to Honneywell and Infinia, both were top donors to his campaign…

(D) Adam Smith co-sponsored $3.5m in earmarks for Lockheed Martin.  Lockheed is one of his top five campaign contributors…