Thursday, November 28, 2013


     We all know about Orwell's "1984".  Snowden did not reveal anything we didn't already deeply suspect.

     There was a science fiction story that I read as a teenager that has been teasing me in much the same fashion.  For years now, I've been secretly wondering if a fiction author actually hit on what is really ailing the world economy today, and hit on it fifty years ago.... I did not think that I could ever find it but lo and behold, google helped me out and here it is.

This should be required reading for Tyler Durden, Paul Krugman, Janet Yellen, and perhaps a host of other economists and folk ....and you might want to have a look, also ....

Frederik Pohl -- "The Midas Plague"

Wednesday, November 27, 2013

false idols

     Can anyone out there explain to me how worshipping the U.S. flag, singing to it, praying to it, and making zillions of copies of it to display inside, outside, over and under absolutely everything (or rather, paying the chinese people to make them for us ...)

     how that is any different from worshipping a golden calf or any other relic or idol?  And was that not exactly what we were warned against?

Saturday, November 23, 2013

Paddy O'Furniture

     I went out last night to the local watering hole for a nip before bed.  They had a local singer performer who had an Irish aspect, an Irish name, and an Irish repertoire.  He was not very good,
which is neither here nor there, and I had trouble distinguishing his lyrics.
     At one point in the performance he took a breath to say about how uncommonly warm it was. Now if you haven't read my previous posts about natural gas, now would be a good time to check them out.  There was just something about his comment that did not stick right with me.
     The evening was warmer than the previous one, as well as the next one.  but checking with reasonabloy dependable sources in the internet I ascertained that the temperature was well within the norms for the given date and time.  As I performed this exercise I realized that his statment had not been a casual friendly gesture, but rather a political statement.  So one train of though launched in my brain was, "How sad, that as a society we have become so politicized, so opionated, that we cannot even have a conversatiion with a stranger about the weather without its being a political debate."  The next thought was, "How sad that we have become so politicized that we don't pay attention to the actual world around us anymore, we all have our minds completely made up already about how things are and we don't need for reality to intrude."

     Tomorrow night, the temperature is going to be uncommonly cold for the date and time.  On balance for the month, the temperatures have been slightly below the thirty year average.  Next week, the temperatures are going to be well below average, not only here but across much of the most populated areas of the continental United States.  Parts of Texas are seeing temps thirty or more degrees colder than average.  Already a few astute traders are beginning to notice.  Natural Gas spot prices are just beginning to rise, despite everyone's preconceived political beliefs.  It will be several weeks before very many people put it together.  Demand way more than it has been recently as electric generation, industries, residences, and even some transportation consumption has been added to the infrastructure.  Also, due to the lack of current operational rigs and the faster decay of fracked wells which have become our primary source  recently, the available supply is not what it has been and in fact will be insufficient to meet demand in the dead of winter.

     But I took heart in realizing that this is always how it works,  in the markets.  Feast or famine.  People catch on one by one, a few at first, then a few hoards, and finally the stragglers come along, the ones who always wait to make very, very sure, and who always buy at the top and then sell at the bottom.  Long about the first of May my Irish folk singer will finally realize that he is cold, and maybe he should invest in some natural gas or maybe install a gas space heater in his house or something.  By then I will be ready to take profits and getting ready for the beach....

Saturday, November 16, 2013

true story

     I've known one young man who was way smarter than I am.  I think his name was Fred Meisel.  He lived just down the street from us in high school.  He scored 792 veerbal, 800 math on his SAT's.  He dropped out of high school in the eleventh grade ... to matriculate at Yale.

      The last time I saw him, he and I were sitting with Melissa Bartlett on her front porch, on a lazy spring day, enjoying the balmy evening in conversation.  I had dropped out of college to search for a reason for life.  But he said to me, "You are wasting your life.  You should be using all the talents you have to do some good, something worthwhile, with your life."

     Next day he got on a plane to go back to New Haven for graduation.  The plane went down in L.I. Sound and everyone on it was killed ....

Saturday, November 9, 2013


might as well say this here, too.

After Katrina devastated the shallow water wells around the delta, natural gas prices briefly topped $17/mcf and some folks got dollar signs in their eyes.  With the advent of fracking, major new gas fields were opened up.  "Utica", "Marcellus", "Barnett", and even venerable old coal companies got into the act drilling for coal bed methane.  By 2007, Baker Hughes reported that there were almost 1800 rigs in the field in North America drilling for gas.

Well, the price collapsed, of course, all the way back down to around $2.50, well below what it cost to drill a new well and almost lower than what it cost just to keep the existing wells open.  All the new wildcatters were driven out of business, many properties had to be resold, and the only people making money were the outfitters.

Enter Wall Street.  Always eager to find new ways to fool the public, they started offering folks like Al Gore big, big money in order to convince the public of two things, one that there is a developing crisis under the label of "global warming" and two that US reduction of carbon-based fuel use would have an impact on it, and Wall Street could invent "carbon swaps" and "carbon credits" as yet another new financial vehicle to trade.  Al Gore became a multimillionaire and just to make a point he put fancy lights all over his house inside and out in Oak Ridge so it looks like a christmas tree at night.

Infrastructure takes a long, long time to change.  Adaptations to oil price changes and NG price changes take many years to work their way through the economy.... building NG pipelines to small cities takes time .... changing over millions of fuel oil furnaces to NG takes time ....building NG fueling centers and changing bus systems over to burn NG takes time ...convincing small town councils to change their habits takes times ....

Then, as prices for gas bumped along the bottom, Mother Nature decided to get involved.  She threw us a series of extra-mild winters and extra-mild summers.  Wall Street loved it as "proof" of their global warming thesis.  The drillers hated it as more and more of them went bust.  By the summer of 2012, there were less than 400 rigs still in operation.  The media and the politicians are all shouting from the rooftops about the modern day miracle of new gas and oil production in the USA.  They are practically guaranteeing full energy independence by 2020.

fat chance.

There's a funny thing about a fracked well.

The old, conventional wells, the oil wells, the mixed ones, and even the dry gas ones ... used to be, you just stuck a straw into the ground and the stuff blew out everywhere, the biggest problem was containing it.  Remember "blowout preventers" from DeepWater Horizon????  And the stuff just keeps coming and coming like the eveready bunny, for decades.

Not so with fracked wells.  Yes, there is shale almost the girl next door.  But there's another thing you remember about the girl next door?  Its very, very hard to get her to put out, maybe once or twice.  After that she marries you and she never puts out again.  Well its the same with fracked wells.  Their initial output is pretty modest in comparison with a conventional well.  But then, the output starts to decline almost immediately.  After a mere five years or so, its hardly worth the bother to even collect it.  You can try fracking it again, but that works about as well as divorcing your wife and then marrying her back again;  she is still not going to put out for you.

Enter the winter of 2013-2014.  Wall Street is trying to hide some "inconvenient truths".  The ice cover in the Antarctic las summer (winter there) was the largest on record.  ON RECORD!.  Since the beginning of satellite surveillance over 40 years ago.  Meanwhile the minimum reached in the Arctic was 1.7 million square miles greater than the year before.  It was the first year that the fabled "Northwest Passage" through Canadian waaters, did not open up for shippers and tankers, in six years.

Even the wooly bears in my area had mostly or all brown coats, a tell-tale sign that something "different" is up.....

I don't know about you.  You can do what you want.  I have more firewood in stock at this time than I have ever had before.  I did start the first fire late in September, a month ahead of schedule.  the temperature right now is hard frost, not unheard of, no, its about "normal" for this time of year, but we have not had a "normal" winter for a decade.  I also have over half my portfolio invested in natural gas companies.....with demand at an all-time high but the number of drillers approaching a twenty year low ... you figure it out .....