A Couple of Things

My only problem with this story is that the New York Times sat on it for two months. The fact that the New Republic was set to run with the same thing probably pushed them to bring it out last night, but my how things would be different had this story broken in December. McCain's campaign would have most certainly derailed and we would probably have Mitt "I like to strap my dogs to the roof of my car" Rommney as the Republican nominee. Still, I'd be surprised if this sticks around too long. The media simply adores McCain and they aren't about to let something like this tarnish the image of "The Maverick". I'd also wager that mot Americans don't know that McCain cheated on his first wife after returning from Vietnam. He left her for a much younger and much wealthier Trophy Wife. Apparently he has a thing for the younger stuff.

The other day I wrote about Oil passing the $100 a barrel mark and I'd like to add a thing or two if I could. First, the market still doesn't justify this price increase as I suspect traders are just jittery about things that don't really matter all that much. Put simply, there is adequate supply right now though the cushion is a bit tight. Earlier today, Texas Oilman T. Boone Pickens agreed with me (yeah right) and said that he's going short on oil and expects it to fall back slightly before moving well above $100 by the second half of the year. I couldn't agree more. Too many of the analyst who study oil are drinking the Kool Aid and seem to peg everything on above ground factors. Sure, they are important, but not nearly as much as what's happening underground. (As I write this, oil has fallen back to $98 a barrel)

Look, call me a kook if you want, I don't care, but the shit is really, really, really close to hitting the fan. There are some big projects coming online this year but the fact of the matter is, they won't be enough to offset the growing demand from Asia, the declines from aging fields and the dramatic increase in consumption among exporting countries. That last part is the important thing to keep in mind and is often totally overlooked. Saudi Arabia may very well increase production this year by over 1 million barrels a day, but when coupled with their decline rate of around 4% and the big increases in domestic consumption, it will be a wash, if not a decline overall.


Suburban Hell

I've said it before and I'll say it again, you've got a year, maybe two to "party on" and after that it's all over. We've been blessed with a tremendous energy source, quite possibly the most efficient in the universe, and it's increasingly difficult to get it out of the ground. We'll leave a lot of oil untapped, perhaps as much as 1 trillion barrels, but for the most part, the easy to get stuff has already been got. The past 50 years have seen the biggest misallocation of money and resources in the history of the world. I'm talking of course about Suburban Sprawl, the thing we'll regret for centuries. I have a lot of friends who live in the 'burbs and I honestly do feel sorry for them. They have made a horrible investment, more so than any of us can presently imagine as the suburbs have absolutely zero future. None, zip, zilch, nada. You think it's a waste land now, wait 10 years.