ABC football announcer Brent Musberger had Pickens up in the press box at the start of the third quarter of Saturday night’s Kansas-Oklahoma State game.
The billionaire Pickens, an OSU alum, went straight to the point when Musberger asked him about Peak Oil.
“We’ve got 85 million barrels of (global) supply and 88 million barrels of demand,” Pickens said.
I hope at least a few of the football crowd was listening attentively.
As I noted in a post earlier this week, adapted from my weekly newspaper column, Pickens called $100/bbl oil by the end of this year a few months ago. Representatives of Big Oil companies and shills like Daniel Yergin scoffed.
Well, they’re not scoffing now. And, what could well be more serious, at least in economic terms, than global warming, is starting to get mainstream public airplay.
November 10, 2007
Govt accounting regs pushing CDO writedowns
Via Naked Capitalism, I read about two new developmental regulations essentially forcing more clarity and re-evaluation of CDOs. Combine that with marketplace changes and this is what you get:
In other words, the first regulation allows less papering-over of hugely different credit ratings of different tranches within a collateralized debt obligation. The second fights artificial valuation.
Then, the market comes in, with CDOs now having to have more transparency, and says, “These ain’t worth shit.”
Yves Smith goes on to say that CDOs have a lot of leverage over other, tangentially connected, financial issues. In other words, “You ain’t seen nothing yet on fallout.”
The good point about the regs is they should help prevent future CDO excesses. Bad point is they should have been on the books years ago.
Bit of history from another Smith post: CDOs were created in 1987 by Drexel Burnham Lambert, home of junk-bond king Michael Milken. That alone is reason why we should have had more regulation of them years ago.
The first is that new accounting rules gives companies far less latitude in how they value this paper. As the Financial Times explained it:They are the “buckets” into which financial statement preparers must classify financial assets under FAS 157, a new US accounting standard for financial years beginning in November...
At the top of the bucket hierarchy is Level One, involving assets with prices quoted in active markets, such as mainstream stocks. Level Two contains less-traded securities and uses prices for assets very like the one being valued.
At the bottom lurks Level Three, assets with “un observable inputs”, meaning their value is calculated via a series of assumptions. Most collateralised debt obligations end up here.
While these categories may be familiar to many readers, what is not as widely know is that another rule, FASB 159, pushes institutions to put positions into the lowest bucket possible. Thus, no phony-baloney Level 3 valuation if there is a way to come up with a gridded or extrapolated Level 2 value.
The second development is that markeplace changes are forcing the revaluation of CDOs. Having first gone through re-rating subprime bonds, they are now tackling CDOs, and downgrades will force commercial banks, investment banks, pension funds, and other holders to recognize losses.
In other words, the first regulation allows less papering-over of hugely different credit ratings of different tranches within a collateralized debt obligation. The second fights artificial valuation.
Then, the market comes in, with CDOs now having to have more transparency, and says, “These ain’t worth shit.”
Yves Smith goes on to say that CDOs have a lot of leverage over other, tangentially connected, financial issues. In other words, “You ain’t seen nothing yet on fallout.”
The good point about the regs is they should help prevent future CDO excesses. Bad point is they should have been on the books years ago.
Bit of history from another Smith post: CDOs were created in 1987 by Drexel Burnham Lambert, home of junk-bond king Michael Milken. That alone is reason why we should have had more regulation of them years ago.
November 09, 2007
Mukasey vote swapped for DoD pork
Senate Majority Leader Harry Reid swapped Mike Mukasey’s nomination for the Defense Department appropriations bill, which doesn’t include Iraq and Afghanistan costs.
This was a routine appropriations bill. So what, so what the fuck, if GOP Senators were using procedural tactics to delay it? Reid could have played that same game with some bill some Republicans lusted after.
Instead, Mukasey was swapped out for military pork. No other way to put it.
The DoD regular appropriations bill is about 50 percent pork as it is. Probably would have done the country a damn bit of good, Mukasey aside, for it to sit a while.
And, Dodd got stiffed out of the chance to filibuster, and deliberately, I believe.
I hereby nominate Harry Reid for the “Get Some Conejos” prize of the week.
This was a routine appropriations bill. So what, so what the fuck, if GOP Senators were using procedural tactics to delay it? Reid could have played that same game with some bill some Republicans lusted after.
Instead, Mukasey was swapped out for military pork. No other way to put it.
The DoD regular appropriations bill is about 50 percent pork as it is. Probably would have done the country a damn bit of good, Mukasey aside, for it to sit a while.
And, Dodd got stiffed out of the chance to filibuster, and deliberately, I believe.
I hereby nominate Harry Reid for the “Get Some Conejos” prize of the week.
Health care costs — like mechanics' costs?
Just like the auto mechanic who has an incentive to overdiagnose car problems. And, just as the complexity of today’s autos means, who are you or I to challenge an overdiagnosis of car repair problems, so, who are you or I to challenge the diagnosis of a cardiologist?
Five chickenshits on Mukasey?
The four Democratic senatorial presidential candidates — Clinton, Obama, Biden and Dodd — all say they opposed Michael Mukasey’s nomination as attorney general. Yet, none of them could actually be present in the Senate to officially vote no?
That’s pretty much ditto for McCain on the Republican side, who weaseled out of having to vote either for or against Mukasey despite saying he believes waterboarding is torture.
That’s pretty much ditto for McCain on the Republican side, who weaseled out of having to vote either for or against Mukasey despite saying he believes waterboarding is torture.
Josh Marshall muffs first chance to explain Peak Oil
Early Thursday, the TPM editor wondered aloud how much the Bush/Cheney saber-rattling on Iran was driving the rapid ramp-up in oil prices.
I told him it, even if combined with Turkey’s saber-rattling on the Kurds, probably was no more than $10/bbl, and even that much effect was due to world supply tightness. I then noted I had written my most recent newspaper column about Peak Oil, T. Boone Pickens’ prediction of $100/bbl oil and related issues.
I implored Josh to take the opportunity to familiarize his readers who aren’t up to date with it on Peak Oil, including through referencing a website such as The Oil Drum. I bluntly juxtaposed Peak Oil to global warming by saying the U.S. could grind to a halt before the world burns to a crisp, to link two metaphors.
Well, Josh took a whack at it this evening, but kind of whiffed. I cite this sentence as proof:
No, no, no, Josh.
King Hubbert factored in rising prices driving more marginal production techniques in more marginal production areas as part of his Peak Oil prediction methodology.
And, the statement above, to me, just doesn’t get the basic bell curve fact of Peak Oil, either.
I e-mailed Josh again, re the quoted statement of his: No. We will then, globally, be on the downslope of the bell curve and past the peak. Many analysts not named Daniel Yergin believe we are at that point RIGHT NOW.
I hope Josh, in the posts he promises for Friday, does a better job. We need major bloggers to discuss this more in hopes of getting politicians to honestly discuss it AT ALL.
I told him it, even if combined with Turkey’s saber-rattling on the Kurds, probably was no more than $10/bbl, and even that much effect was due to world supply tightness. I then noted I had written my most recent newspaper column about Peak Oil, T. Boone Pickens’ prediction of $100/bbl oil and related issues.
I implored Josh to take the opportunity to familiarize his readers who aren’t up to date with it on Peak Oil, including through referencing a website such as The Oil Drum. I bluntly juxtaposed Peak Oil to global warming by saying the U.S. could grind to a halt before the world burns to a crisp, to link two metaphors.
Well, Josh took a whack at it this evening, but kind of whiffed. I cite this sentence as proof:
Over time spiraling prices will lead to more investment and eventually more supply.
No, no, no, Josh.
King Hubbert factored in rising prices driving more marginal production techniques in more marginal production areas as part of his Peak Oil prediction methodology.
And, the statement above, to me, just doesn’t get the basic bell curve fact of Peak Oil, either.
I e-mailed Josh again, re the quoted statement of his: No. We will then, globally, be on the downslope of the bell curve and past the peak. Many analysts not named Daniel Yergin believe we are at that point RIGHT NOW.
I hope Josh, in the posts he promises for Friday, does a better job. We need major bloggers to discuss this more in hopes of getting politicians to honestly discuss it AT ALL.
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