Saturday, April 30, 2016

Again, Just Too Much To Post -- I'm Taking A Break -- April 30, 2016

Updates

May 1, 2016: I wasn't the only one who noticed game 1 of round 2, the San Antonio Spurs vs the Oklahoma City Thunder. Yahoo!Sports suggests a San Antonio Spur blowout could have a huge impact on the Thunder. 
What happened in this 124-92 Spurs victory on Saturday night in the AT&T Center was downright jarring to the Thunder, promising to test the foundation, the fabric, of this franchise. Oklahoma City had come to these Western Conference semifinals finally healthy and strong and believing the partnership of Durant and Westbrook could sustain itself in a long series against the Spurs.
Only the Thunder were an embarrassment. They let the Spurs take one open shot after another and lost them in transition and sometimes didn’t even run back on defense. They let the Spurs humiliate them and made more real the fear that the possibility of San Antonio taking them apart in this series could be the push that Durant needs to walk away for good, to believe everything has run its course here.
Later, 10:29 p.m. Central Time: the Spurs win by 32; up as much as 43 points. Final 124 - 92. 

Later, 8:48 p.m. Central Time: wow! making it look easy. Some NBA teams are still playing the 7th game in Round 1. San Antonio swept the first round, winning four games, losing none. Tonight they are playing Oklahoma City Thunder. It look like the Thunder is phoning it in. San Antonio leads 70 - 43 at the half. Are you kidding? 70 at the half?  SA is the #2 team; OKC is ranked #3. 70 - 43. Hmmm. For OKC, Kevin Durant 4 of 13 field goals; Russell Westbrook, 3 of 13; and those two are the super-stars for OKC. SA's Tim Duncan? 2 for 2; and Tony Parker, 1 for 3. For SA, it's all LeMarcus Aldridge, 13 for 18. LeMarcus: two years at UT; nine seasons with the Portland Blazers, and signed with the Spurs in 2015. Wow. And Kahwi Leonard, 9 for 12. Two years with San Diego State. Selected by Indiana Pacers in 2011 but traded to the Spurs that night. Won the NBA championship with the Spurs in 2014. And SA still has the "old guard': Tim Duncan, Tony Parker, Manu Ginobili.
 
Original Post
"Fast and furious."

There is some incredible news yet to be posted today but I have to take a break. I will be back to blogging later.

There may be some big things in the works if one believes what the tea leaves are telling us.

But last night I noted that our local grocer has lamb chops for sale. My wife just sent me the list of herbs and spices we need to marinade lamb.

Several years ago we came across the best marinade for lamb in Weber's Big Book of Grilling. I truly believe that one needs only two "cookbooks": 1) Webers for grilling; and, 2) Betty Crocker's (the 1950 edition) for everything else. I'm not joking. I prefer the older Betty Crocker handed down from previous generations; I do not like the new one.

I use all fresh herbs (rosemary and thyme, for example) for the marinade, and we've found that 12 hours is the minimum amount of time necessary to properly marinade lamb. We prefer 24 hours and generally go with 18 hours simply because we get a late start -- which will happen if I don't get moving.

Have a great day. Back later.

**************************
Lamb Marinade Preparation


Thyme

Rosemary

Rosemary and Thyme


Minced Garlic

All Ingredients

Trimmed Lamb Chops

To Begin Marinading For 24 Hours

Is Baghdad About Ready To Implode? -- And Why Did I Only Find This Over At Drudge? -- Enquiring Minds Want To Know -- April 30, 2016

Updates

May 1, 2016: "Breaking news": Iran cancels all flights into Baghdad airport. [I was unable to verify this; Travelocity does not list flights into/out of Baghdad/Tehran.]

Later, 8:37 p.m. Central Time: this story is starting to gain some traction. Washington Post headline -- Protests in Baghdad throw administration’s Iraq plan into doubt," LOL -- the "plan" was to "run out the clock" and that is exactly correct. If Baghdad "blows"/implodes, it will be interesting to see Barack watching from the bench.
President Obama’s plan for fighting the Islamic State is predicated on having a credible and effective Iraqi ally on the ground in Prime Minister Haider al-Abadi.
And in recent days, the administration had been optimistic, despite the growing political unrest in Baghdad, about that critical partnership.
But that optimism — along with the administration’s strategy for battling the Islamic State in Iraq — was thrown into severe doubt after protesters stormed Iraq’s parliament on Saturday and a state of emergency was declared in Baghdad.
The big question for White House officials is what happens if Abadi — a critical linchpin in the fight against the Islamic State — does not survive the turmoil that has swept over the Iraqi capital.
My suggestion: "run out the clock." It's been a good strategy. Why change now. Let Hillary deal with it. 

And then go golfing.
Original Post
 
Perhaps this is a non-story, but it sounds like things are a bit tense in Iraq, #2 in crude oil production in the Mideast, I believe. This story did not make it on David Muir's ABC Nigthly News last night so it might be a non-story. But here we go, for the archives, if nothing else.

The Mirror is reporting that protestors have stormed the Green Zone and the Iraqi parliament; Baghdad declares a state of emergency. 

The AP is reporting the same story.

The Washington Post is posting the same story, but in "breaking news," Baghdad Bob says it's all over, that it was simply a misunderstanding. Anti-terror forces have stepped down, and local authorities are calling it simply a demonstration.

******************************
Texas Wild Flowers -- 2016
 Set #4





Russian April Oil Output Flat -- April 30, 2016

Reuters/Rigzone is reporting:
Russian oil production edged lower in April: to 10.86 million barrels per day (bpd) from a record 10.91 million in March.
The preliminary statistics show Russia is determined to keep oil output high after the world's leading crude producers failed to clinch a deal to freeze output to support weak crude prices.
The sources said seasonal maintenance at oilfields and refineries brought production down.
Production still running above the 2015 average of 10.73 million bpd, however, which was the highest yearly output for nearly three decades.
Russian oil output has repeatedly surprised on the upside over the past decade, rising from as low as 6 million bpd at the turn of the millennium. Oil experts have repeatedly predicted a decline but it has yet to happen.
So many story lines here. Most remarkable is the "exactness" of the figures. 10.91 million - 10.86 million = 50,000 bbls or 0.4% and "we" know it's due to "seasonal maintenance at oilfields and refineries. Call me cynical, but 0.4% is a rounding error. I wish I could account for my own monthly spending that closely.

I still think the graph at this post (and reposted below) is the best I've seen for putting things in perspective. [Within each bar, the lower, darker segment is crude oil; the upper, lighter segment is natural gas.]

We Now Know Where $6 Billion In Saudi Reserve Assets Went -- LOL -- April 30, 2016

The other day I mentioned that Saudi Arabia lost "only" $6 billion in reserve assets in March. Hold that thought while "taking in" the screenshot below:



It certainly puts things into perspective when commiserating about the state of American entrepreneurism, innovation, and technology.

By the way, with regard to that long, long post on America's productivity decline, it may or may not mean all that much to "the individual." It may not even mean that much in "the aggregate."

The embedded graphs below come from this site.

From 2013 to 2016, under the Obama administration:


source: tradingeconomics.com

For the past ten years:
source: tradingeconomics.com

Since 1950:
source: tradingeconomics.com

The Scariest Chart On The US Economy? -- American Enterprise Institute -- April 30

Updates

Later, 10:06 a.m. Central Time: the graph(s) on this page are "five-year rolling averages" for annual productivity growth. Annual productivity growth charts can be seen here
 
Original Post
US productivity at this link. The first graph below is as it appears at the link. The second graph with some notes added so that I could put the first graph in historical context.


At the link, the author suggests three interpretations:
  • US innovation has come to an end; low-productivity workers first to lose jobs in recession; workers now returning to the work force are the lower-productivity workers
  • we are mismeasuring productivity; current productivity formulas/statistics were based on "steel-and-wheat" economy; those algorithms/assumptions/formulae don't work for an IT economy
  • current "lull" is to be expected; innovation off the radar scope drags productivity down; "seed corn" being planted for another cycle of productivity gains
I assume "productivity growth" is unrelated to global economy. That assumption may be terribly wrong. And it's important to differentiate between "global economy" and "globalization." This might be a good place to start when sorting that out

Let's say US innovation and entrepreneurism have not changed. Let's say IT has matured (it's been around since at least 1984).

If one takes out US innovation, entrepreneurism, and IT maturation, then is one left with policy? I don't know. But one wonders.


Legend:
  • RR: exact years of President Reagan's administration
  • Bill: exact years of President Clinton's administration
  • 1: first term for George W Bush (an overhang from Bill's presidency)
  • 2: second term for George W Bush and first term for Barack Obama (reflects the ship of state as it started turning in the first term of George W Bush)
  • BHO: the second term of President Obama and the overhang that Hillary will inherit
************************************
National Productivity

As defined/discussed at wiki, about halfway down that webpage, under the subsection called "National Productivity."
There are different measures of productivity and the choice among them depends either on the purpose of the productivity measurement and/or data availability. One of the most widely used measures of productivity is Gross Domestic Product (GDP) per hour worked. 
This, of course, is fairly simplistic compared to an alternate method called or multi factor productivity or total factor productivity.
Based on the nature of the discussion at the AEI link at the very top of this post suggests that productivity in this case is being defined as GDP/hours worked.

*************************************
The Arguments

The first argument had two parts:
  • innovation has come to an end in the US
  • in a recession the less productive were "made redundant" first, and now with unemployment rate back to 5%, employers are hiring the less productive workers
Obviously, the argument that innovation and the spirit of entrepreneurism in the US has come to and end, is hogwash.  I won't even address that one. If accurate -- that innovation is dead in the US, Obama has done more to "destroy" the US than even I could imagine.

The second part of that argument: the less productive are now being re-hired. Not even worth discussing. One can come up with a dozen counter arguments, but the military has some of the most sophisticated technology in the universe, and the all-volunteer force, many of them high school graduates with no prior training do just fine with that state-of-the-art technology. It would be hard to argue that the best and brightest are volunteering in droves for the US military.

The second argument: we are mismeasuring productivity. We probably are, but that doesn't explain what has happened in the last four years. What surprises me is that the Obama administration did not re-define productivity to make things look a lot better.

The third argument: it's simply a "technology" lull. Of course that's just as crazy, but let's take a minute and explore that for a few minutes. I would opine that the folks who came up with this one might be on to something, but they are just a "off" a bit. Let's say the incredible drop in productivity is due to "technology." It's not a "technology lull." It's "technology misplaced." Countless billions of dollars have been spent on companies like Solyndra and SunEdison. Countless billions of dollars have likewise been spent on EVs with little to show for all that investment.

Having said that, I think those arguments are all a stretch.

***********************************
Can The Slump In Productivity Be Explained?

It comes down to this: the sharp drop in productivity in the graph above appears to be "cyclic." The question is whether the remarkable decline in US productivity is simply to be expected / inexplicable (sort of like the business cycle) or is the result of something specific? For purposes of this post, I will assume the severe slump in productivity is manmade.

*************************************
The Obama Legacy: Decreased Productivity

1. Tens of thousands of new pages of compliance rules and regulations across the entire federal bureaucracy. Without question, this is the #1 reason for decreased productivity. Simply google Obama legacy compliance regulations. This may be as good as any essay on bureaucracy run amok.

2. Idealism at any cost. "Fixing" health care was a noble effort, but in the end, the president let lobbyists write the bill. The result was a trainwreck, their word, not mine. ObamaCare is the 800-lb gorilla in every corporate boardroom. 

3. Bad science. Climate change is a given; assuming US taxpayers can make a difference is perhaps the best example of presidential hubris. This has led to multiple bad policy decisions, mostly in the area of energy: the war on coal; intermittent, undependable energy; redundant energy; energy shortages; expensive energy.

4. Balkanization / polarization of America. This is an interesting one. No less than McClatchy DC has identified politics of anger, fights, and division as Obama's defining legacy. Tens of thousands of new pages of compliance regulations might have happened under any president but it's hard to imagine any president more polarizing than President Obama. The polarization has simply put America in gridlock. Nothing gets done, but a lot of dollars and manpower are spent on either side fighting for their side. At its extreme, Balkanization has led to the growth of CAVE dwellers. Historians will begin the chapter on the Obama presidency with these words: No other presidency, since Abraham Lincoln, was marked by such divisiveness.

5. Legalized money laundering. Perhaps the best example of spending money that adds absolutely nothing to the economy is "cap and trade." It's not that the beneficiaries don't break even, they go spectacularly broke spending US taxpayer money. Solyndra is Exhibit A; SunEdison is Exhibit B.

6. Crime. I don't know how economists factor in law enforcement when it comes to determining productivity. But releasing tens of thousands of felons over a short period of time certainly seems like it would be a drag on the economy. Permitting open borders does little for American productivity.

7. Inability to make a decision. President Obama's inability to make a decision may be best exemplified by his lack of a "Syrian strategy" for years. With regard to US productivity it was best reflected by his inability to make a decision on the Keystone for six years.

8. Anti-business. "Keeping the boot on the neck of BP" was excessive, inflammatory, overkill, but demonstrated well President Obama's attitude toward business in general. By 2012, Obama's anti-business, anti-job bias was already evident. [It might be of interest to see that ObamaCare let that list of "Top 10."]

Bottom line: Regulations, ObamaCare, and bad science account for 99% of the US decline in productivity. Many more causes exist but compared to the Big Three, the rest are simply ankle-biters.

Note: the first half of this post was posted yesterday but completion was purposely delayed to allow myself to think about the graph. I am leaving up the initial post because some readers have left comments at that post and I don't want to lose the comments. 

Friday, April 29, 2016

Week 17: April 24, 2016 -- April 30, 2016

Miscellaneous/International
Saudi Arabia's reserve asset base falls only $6 billion in March
Why the Saudi Aramco  IPO will not be enough
Saudi unveils sustainable post-oil economic plan
Weekly energy tweets suggest things starting to improve
Bakken crude gets to Netherlands (Europe) 

Operations
Schlumberger, Halliburton consider pulling out of North America
Statoil's Skarston wells are quite remarkable -- even for Statoil
Statoil well reports a crude oil IP of over 5,000 bbls
Random example of managing production
Halliburton cust 6,000 jobs
Halo effect? You betcha 

Natural gas
North Dakota hits natural gas output milestone 

Three (3) New Permits -- April 29, 2016

Active rigs:


4/29/201604/29/201504/29/201404/29/201304/29/2012
Active Rigs2986189186209


Three (3) new permits --
  • Operator: Whiting
  • Field: Heart Butte (Dunn)
  • Comments: 
HRC renewed five (5) permits, an Ann H. Thome in Williams County; and four Fort Berthold permits in Dunn County

KOG canceled three permits, three Smokey permits in McKenzie County.

***************************
Cancelled KOG Permits

See first comment below. Yes, the three canceled permits were listed as Kodiak Oil & Gas permits:
  • 26541, PNC, Kodiak Oil & Gas, Smokey 146-99-2-3-10-15H3, 
  • 26542, PNC, Kodiak Oil & Gas, Smokey 146-99-2-3-10-15H,
  • 26543, PNC, Kodiak Oil & Gas, Smokey 146-99-2-3-10-16H3, 
I only looked at one file report, #26541:
  • October 28, 2014: sundry form received by NDIC; KOG requested a permit renewal for this well.
  • November 13, 2014: standard form releasing this site back for restoration; "Location was never built. OK to release."
  • December 2, 2014: letter from NDIC to Kodiak Oil & Gas approved the sites to be released; the company was released from the bond.
  • September 28, 215: letter from NDIC to Kodiak Oil & Gas indicating that the "referenced permit will expire October 29, 2015."
Bottom line: it appears that this is simply paperwork catching up with activity in the real world. Exceptional attention to detail in a time of lots and lots of activity for the NDIC. Before any well can be transferred to a new operator, and before a permit/well can be released "back to site restoration" requires the NDIC to physically inspect the site and audit the entire file report.

*****************************
Tuna Steak - Salmon - Artichoke - Baby Peas - Deanston



The tuna steak for me; the salmon for my wife. The tuna is marinaded for about two hours with olive oil, Worcester sauce, soy sauce, and pepper. The tuna steak is grilled for not more than four minutes. Only buy the best artichokes (otherwise, don't) and they will take a full hour to prepare (boil) with lemon.

Off The Net For Awhile --

Updates

May 8, 2016: one multi-billionaire does his part to help New Jersey return to income equality. He left. 
 
Original Post
 
In The Wall Street Journal today or yesterday or recently (our issue did not arrive today which seems to happen fairly often): Atlantic City facing bankruptcy.
Atlantic City has so little money left that it could miss a $1.8 million bond payment due Sunday, a step that would make it the first New Jersey municipality to default on debt since the Great Depression.
The Jersey Shore gambling destination has endured years of strain as a third of its casinos shut down. But now its cash levels are low enough that bankruptcy is a possibility for the 39,000-population city.
Once prized as a vacation destination because of its giant casinos and boardwalk, Atlantic City is in this position because of a declining economy and mounting debt. Its predicament is more severe than most distressed U.S. municipalities because it has the worst credit rating of any American city.
I track this stuff at this post.  Atlantic City first made the list on December 21, 2013. It's been a long time since I've re-visited the "cities" page.

Camden and Newark made the list some time ago. I was curious how they turned out. This was as curious as I got -- NJspotlight.com reported back on July 22, 2013:
Detroit’s bankruptcy sent shock waves through political circles and intensified the debate over whether state and local pension systems are underfunded, but don’t look for Camden or other distressed New Jersey cities to follow Detroit into bankruptcy court, municipal finance experts said.
While more than 20 counties and municipalities and authorities in 10 states have filed bankruptcy since 2003 because of poor financial practices or unsustainable pension debt, New Jersey has not had a local government bankruptcy since the Great Depression.
“Camden in many ways is in worse shape than Detroit, but Camden isn’t in bankruptcy and isn’t going to go into bankruptcy,” said Marc Pfeiffer, assistant director of the Local Government Research Center at Rutgers University’s Bloustein School of Planning and Public Policy. 
“While New Jersey has a few municipalities that are severely distressed, we are considered one of the better states in oversight and managing funds, and it’s a system that continues to work. The states where municipalities have gone bankrupt were those with a lack of oversight and limited engagement by the state government until it’s too late,” said Pfeiffer, who spent more than 20 years tracking New Jersey municipal finances before retiring last year as deputy director of the state Department of Community Affairs’ Division of Local Government Finance.
Camden, Paterson, Trenton, Harrison, and Asbury Park are all under supervision by the state’s Local Government Finance Board and part of a special transition aid program “designed to keep municipalities afloat,” Pfeiffer said, and both Harrison and Salem City are under close fiscal supervision because of problems with development bonds.
A bankruptcy like Detroit just isn’t going to happen in New Jersey,” agreed Jon Moran, the New Jersey State League of Municipalities’ longtime legislative director.
“Here in New Jersey, for a community to declare bankruptcy, you have to get approval from the Local Government Finance Board, and before it gets to that point, the Board and the Director of the Division of Local Government Services will already have taken steps to fix the problem.”
It appears Atlantic City somehow slipped off their radar scope.

I really don't know.

********************************
A Note for the Granddaughters

Speaking of New Jersey, one of my best summers (in retrospect) was in Westfield, NJ, a bedroom community of NYC, many years ago. I always have to check the journal to get the year correct ... let's see... give me a moment ... ah, yes, here it is ... the summer of 1971. 

I had a summer job there; it was the most difficult job I ever had, but I probably learned more about life / unit of time (time best measured in hours, perhaps -- it was that intense). I've blogged about it several times before so I won't repeat the story. A typical "Westfield" post is here, but it doesn't say much about the job. Whatever. But it does talk about mini Basque cheese, which is more interesting.

Our younger daughter is now in the cheese-making business, focusing on goat cheese.

The Scariest Chart On The US Economy? -- American Enterprise Institute -- April 29, 2016

Note: disregard this post. This is the "first half." This post has now been completed and can be found at this link

US productivity at this link. The first graph below is as it appears at the link. The second graph with some notes added so that I could put the first graph in historical context.


At the link, the author suggests three interpretations:
  • US innovation has come to an end; low-productivity workers first to lose jobs in recession; workers now returning to the work force are the lower-productivity workers
  • we are mismeasuring productivity; current productivity formulas/statistics were based on "steel-and-wheat" economy; those algorithms/assumptions/formulae don't work for an IT economy
  • current "lull" is to be expected; innovation off the radar scope drags productivity down; "seed corn" being planted for another cycle of productivity gains
I assume "productivity growth" is unrelated to global economy. That assumption may be terribly wrong. And it's important to differentiate between "global economy" and "globalization." This might be a good place to start when sorting that out

Let's say US innovation and entrepreneurism have not changed. Let's say IT has matured (it's been around since at least 1984).

If one takes out US innovation, entrepreneurism, and IT maturation, then is one left with policy? I don't know. But one wonders.


Legend:
  • RR: exact years of President Reagan's administration
  • Bill: exact years of President Clinton's administration
  • 1: first term for George W Bush (an overhang from Bill's presidency)
  • 2: second term for George W Bush and first term for Barack Obama (reflects the ship of state as it started turning in the first term of George W Bush)
  • BHO: the second term of President Obama and the overhang that Hillary will inherit
************************************
National Productivity

As defined/discussed at wiki, about halfway down that webpage, under the subsection called "National Productivity."
There are different measures of productivity and the choice among them depends either on the purpose of the productivity measurement and/or data availability. One of the most widely used measures of productivity is Gross Domestic Product (GDP) per hour worked. 
This, of course, is fairly simplistic compared to an alternate method called or multi factor productivity or total factor productivity.
Based on the nature of the discussion at the AEI link at the very top of this post suggests that productivity in this case is being defined as GDP/hours worked.

*************************************
The Arguments

The first argument had two parts:
  • innovation has come to an end in the US
  • in a recession the less productive were "made redundant" first, and now with unemployment rate back to 5%, employers are hiring the less productive workers
Obviously, the argument that innovation and the spirit of entrepreneurism in the US has come to and end, is hogwash.  I won't even address that one. If accurate -- that innovation is dead in the US, Obama has done more to "destroy" the US than even I could imagine.

The second part of that argument: the less productive are now being re-hired. Not even worth discussing. One can come up with a dozen counter arguments, but the military has some of the most sophisticated technology in the universe, and the all-volunteer force, many of them high school graduates with no prior training do just fine with that state-of-the-art technology. It would be hard to argue that the best and brightest are volunteering in droves for the US military.

The second argument: we are mismeasuring productivity. We probably are, but that doesn't explain what has happened in the last four years. What surprises me is that the Obama administration did not re-define productivity to make things look a lot better.

The third argument: it's simply a "technology" lull. Of course that's just as crazy, but let's take a minute and explore that for a few minutes. I would opine that the folks who came up with this one might be on to something, but they are just a "off" a bit. Let's say the incredible drop in productivity is due to "technology." It's not a "technology lull." It's "technology misplaced." Countless billions of dollars have been spent on companies like Solyndra and SunEdison. Countless billions of dollars have likewise been spent on EVs with little to show for all that investment.

Having said that, I think those arguments are all a stretch.

***********************************
Can The Slump In Productivity Be Explained?

It comes down to this: the sharp drop in productivity in the graph above appears to be "cyclic." The question is whether the remarkable decline in US productivity is simply to be expected / inexplicable (sort of like the business cycle) or is the result of something specific. For purposes of this post, I will assume the severe slump in productivity is manmade.


*************************************
The Obama Legacy: Decreased Productivity

1. Tens of thousands of new pages of compliance rules and regulations across the entire federal bureaucracy. Without question, this is the #1 reason for decreased productivity. Simply google Obama legacy compliance regulations.

2. Idealism at any cost. "Fixing" health care was a noble effort, but in the end, the president let lobbyists write the bill. The result was a trainwreck, their word, not mine. ObamaCare is the 800-lb gorilla in every corporate boardroom. 

3. Bad science. Climate change is a given; assuming US taxpayers can make a difference is perhaps the best example of presidential hubris.

4. Balkanization / polarization of America. This is an interesting one. No less than McClatchy DC has identified politics of anger, fights, and division as Obama's defining legacy. Tens of thousands of new pages of compliance regulations might have happened under any president but it's hard to imagine any president more polarizing than President Obama. The polarization has simply put America in gridlock. Nothing gets done, but a lot of dollars and manpower are spent on either side fighting for their side. At its extreme, Balkanization has led to the growth of CAVE dwellers. Historians will begin the chapter on the Obama presidency with these words: No other presidency, since Abraham Lincoln, was marked by such divisiveness.

5. Legalized money laundering. Perhaps the best example of spending money that adds absolutely nothing to the economy is "cap and trade." It's not that the beneficiaries don't break even, they go spectacularly broke spending US taxpayer money. Solyndra is Exhibit A; SunEdison is Exhibit B.

6. Crime. I don't know how economists factor in law enforcemen when it comes to determining productivity. But releasing tens of thousands of felons over a short period of time certainly seems like it would be a drag on the economy. Permitting open borders does little for American productivity.

7. Inability to make a decision. President Obama's inability to make a decision may be best exemplified by his lack of a "Syrian strategy" for years. With regard to US productivity it was best reflected by his inability to make a decision on the Keystone for six years.

8. Anti-business. "Keeping the boot on the neck of BP" was excessive, inflammatory, overkill, but demonstrated well President Obama's attitude toward business in general. By 2012, Obama's anti-business, anti-job bias was already evident. [It might be of interest to see that ObamaCare let that list of "Top 10."]

Bottom line: Regulations, ObamaCare, and bad science account for 99% of the US decline in productivity. Many more causes exist but compared to the Big Three, the rest are simply ankle-biters.

Update In Saudi Arabia's Reserve Asset Base -- Courtesy Of John Kemp -- April 29, 2016

In 2015, Saudi Arabia set its 2016 budget based on $60 oil. Prior to that, as far as we know, Saudi's budget had been based on $100 oil for years. Running the numbers, suggests there is no way "we" will average $60-oil for calendar year 2016. To get there, oil will have to be at $80 this autumn.

For Saudi, $60 oil is not much better than $40 oil, and long-term, Saudi can't survive on $60 oil.


Some takeaways from the graph above:
  • 27 months of data are shown; Saudi's reserve assets decreased in all but six of those months
  • but even with $110 oil for eight months (2014), the kingdom showed outright losses in two of those months, and minimal increases in most of the other months; during this period Saudi consistently said it "liked" $100-oil but in fact they needed a higher price; in June, 2014, at prices > $110 (and trending upward), the kingdom showed a negative growth in reserve assets
  • in the past 14 months, the kingdom has lost almost $150 billion in reserve assets
  • there's more to reserve asset management than just the price of oil; in January, 2015, despite an average price of Brent lower than it was later in the year, the kingdom showed a slight increase; for the entire rest of the year, significant decreases
  • look where John Kemp has set the "x" axis: at $100 oil; in 2017, it will be interesting to see if the graph is re-set to reflect $60 oil
  • in February, 2015, when average price of Brent was $60, the kingdom lost $20 billion; based on most recent losses, it does suggest that the kingdom set $60/bbl as the basis for their 2016 budget
An IPO of 5% of a 2-trillion-dollar company will provide a one-time infusion of $100 billion cash. 

XOM And CVX Report Today -- April 29, 2016

From the AP:
Exxon Mobil Corp. (XOM) on Friday reported first-quarter earnings of $1.81 billion.
On a per-share basis, the Irving, Texas-based company said it had profit of 43 cents.
The results exceeded Wall Street expectations, but Exxon does not adjust its reported results based on one-time events such as asset sales. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 31 cents per share.
Others reporting today:

CVX: forecast, a 20-cent/share loss;
TransCanada (TRP.TO): forecast, a 66 cent/share profit;

Data Points From RBN Energy's Update On US LPG Exports -- April 29, 2016

In a long note like this, there will be typographical and factual errors. Personal comments / opinion may be interspersed with "facts." If this information is important to you, go to the source. I do this simply for my benefit to insure that I really do read the article and not skim through it.

This is taken from "episode 2" of RBN Energy's update of US LPG exports from the Gulf coast. It really is quite an amazing story and suggests that one of the big stories of the 21st century will be the emergence of US as the global energy powerhouse.

Some of the data points follow.

First, the data points from "episode 1":
  • US domestic production of NGLs (like propane and butane is soaring
  • US liquified propane gas (LPG) exports in the past three years have rocketed to the top
  • US exports of LPG now surpasses exports by the old Big Three: UAE, Qatar ("cutter"), and Algeria
  • the rise in LPG exports may be ending
  • exports from the Gulf coast may be in for a decline
  • more propane and butane from the Marcellus and Utica will be re-routed to Marcus Hook, PA
  • demand for new propane dehydrogenation plans and flexible steam crackers will be climbing
This episode, episode 2, will focus on how the Panama expansion will affect LPG exports. The data points follow.
  • the Panama expansion will be operations within a few weeks
  • all but the world's very biggest LNG vessels will be able to transit the canal
  • huge times savings from the Gulf coast to Asia: from more than six weeks (around Cape of Good Hope) to three weeks (Panama Canal)
  • daily rates for these sea-going tankers have tanked
  • two "events" have changed LPG export dynamics: Marcus Hook and PDH
    • Mariner East 2 pipeline across Pennsylvania will re-route 275,000 bopd by 2017; to Marcus Hook, PA
    • once at Marcus Hook, LPG-BR (rail) across the US; propane at those terminals is at the expense of propane at Gulf coast terminals
    • more domestic processing through increased number of PDH plants
  • US LPG exports have been on a tear
    • January, 2013: 184,000 bopd LPG exports from Gulf coast
    • January, 2016: 1,047,000 bopd LPG exports from Gulf coast (nearly six-fold increase in three years)
  • destinations:
    • exports to China: 111,000 bopd (up from 17,000)
    • Japan 70,000 bopd (up from 55,000)
    • South Korea: 37,000 bopd (up from 11,000 bopd)
    • Singapore: 30,000 bopd (up from 4,000 bopd)
    • China is the biggest importer of US LPG, beating out Canada (87,000 bopd in 2015, more than half was ethane)
    • rounding out the top six: Mexico (91,000), Brazil (47,000), and the Netherlands (46,000), Dominican Republic (32,000)
  • the LPG export terminals along the Gulf coast
    • EPD/Houston Ship Channel: 
      • completed its 2015 expansion; can now load one VLGC every 24 hours (from 300,000 bopd to 533,000 bopd)
    • Targa Resources/Galena Park
      • 3Q14: completed its expansion, from 100,000 bopd to 233,000 bopd 
    • Sunoco Logistics/Nederland/Mariner South
      • anchor customer is Shell; 150,000 bopd, or almost 20% of Gulf coast exports
    • Occidental Petroleum/Ingleside
      • commissioned in 2015, but exports have been negligible
    • Phillips 66/Freeport
      • building the latest LPG export terminal, a 150,000 bopd facility at Freeport, TX; to be on-line 3Q16; completed; first shipment December 16, 2016
    • Buckeye Partners/Trafigure/Corpus Christi
      • accounts for about 2% of Gulf coast exports so far this year
  • Total LPG export capacity from Gulf coast: 1,200,000 bopd export capacity
Bottom line: Marcus Hook, PA, and PHD plants in the US have changed the dynamics of US LPG exports. 

Many, Many Story Lines In Today's RBN Energy Post On US LPG Exports From The Gulf Coast -- Friday, April 29, 2016; More Bad News For ObamaCare -- People Have Quit Signing Up; Dropping Out In Large Numbers

Updates

May 7, 2016: ObamaCare exchange in Idaho the most recent to look like to be in trouble.
An ObamaCare insurance exchange once viewed as a steady ship in a sea of glitch-plagued websites is now running into problems of its own – adding to a new mess of health industry complications under the Affordable Care Act, including premium hikes, jittery insurers and failing co-ops.
Your Health Idaho (YHI), the Idaho marketplace that was one of the better-run systems when the law went into effect, was late getting thousands of state residents critical tax forms this year. One recent report said the call center also has struggled to answer customer calls, directing them instead to send requests by email -- and the system has taken months to enroll some people after they signed up. 
“We saw this coming years ago. We were promised that by having a state exchange, the customer would have a far superior experience compared to the federal level, and that’s proven to be false,” said Wayne Hoffman, the CEO of the Idaho Freedom Foundation who has opposed the Idaho state exchange from the start. He said they were warned that under the federal exchange, customers might “have to wait months and months for forms to be returned to them, yet, that is exactly the same experience people in Idaho are having today.”
Your Health Idaho, meanwhile, is blaming Washington -- saying the reason for the delay in tax forms was faulty information they received from the federal government.
Later, 8:09 p.m. Central Time: for background to this update, see the original post below (obviously) but also this post from 2015. When I read the original earnings report from Aetna (see below) I thought there was much more to the story that was not being published. I was write. Forbes provides that additional information:
Bertolini praised U.S. Health and Human Services Secretary Sylvia Burwell and the Obama administration for changes they have made within the regulatory framework established under the law. In particular, Burwell’s team curtailed “special enrollment” periods, which allow Americans to sign up for coverage after the traditional and primary enrollment period that runs from November through January of each year.
Insurance executives from Aetna and Anthem to Cigna, Humana, and UnitedHealth complained special enrollment periods made it more difficult to manage costs. Actuaries need to know who is paying the premiums, their health issues, ages and other characteristics to manage premiums and expenses that are paid in claims from so-called risk pools. Allowing additional sign-up periods messes with their risk planning.
Bertolini said Aetna’s losses in the first two and a half years that subsidized coverage has been available on public exchanges have been “well, well below” the costs of buying that membership or building out the markets he mentioned. Thus, he sees a path for long-term success akin to private insurance industry administration of Medicare benefits for seniors under the Advantage program as well as Medicaid managed care.
“We see this as a good investment, hoping that we have an administration and a Congress that will allows us to change the product like we change Medicare every year and we change Medicaid every year,” Bertolini said. “But we haven’t been able to touch this product because of the politics. But if we get to that point, we are in a very good place to make this a sustainable program.”
Original Post
 
This is the kind of typographical error I used to make when I first started blogging. It's an error made by lack of attention to detail; or complete ignorance. See how long it takes you to spot the glaring error in the "cut and paste" taken from The Street: Real Money:
Inside the United States, [Hess has] pared back fracking operations in both the Bakken, where it currently operates only two wells and in the Utica shale, where it currently operates none.
Whatever. Time to move on.

One know things have really changed in the Bakken when one is relieved that the number of active rigs remains near 30.

Active rigs:


4/29/201604/29/201504/29/201404/29/201304/29/2012
Active Rigs2986189186209

RBN Energy: US LPG export terminals poised to serve the Pacific Basin.
Fueled by soaring domestic production of natural gas liquids (NGLs) like propane and butane, U.S. liquefied petroleum gas (LPG) export volumes the past three years have rocketed to the top, surpassing exports by the old Big Three of LPG: United Arab Emirates, Qatar and Algeria. But that rise in LPG exports may be ending, and the share of exports made from Gulf Coast docks may be in for a decline. More propane and butane will be pulled from the Marcellus and Utica to the docks at Marcus Hook, PA, and demand for propane on the Gulf Coast—from new propane dehydrogenation plants and flexible steam crackers—will be climbing. That suggests that less LPG may need to be exported from the Gulf Coast to keep the market in balance. In today’s blog we continue our look at the soon-to-open Panama Canal expansion with an updated examination of U.S. LPG export terminals along the Gulf Coast.
As we said in Episode 1, the wider, deeper locks being built along the Panama Canal will (finally) be in business within a few weeks, enabling the world’s growing fleet of Very Large Gas Carriers (VLGCs) that move most U.S. LPG exports to take that important short-cut between the Caribbean and the Pacific. (All but the world’s very biggest liquefied natural gas (LNG) vessels will be able to float through the expanded canal as well.) The time saved will be huge; a trip from the Gulf Coast to Asia around the Cape of Good Hope takes more than six weeks, compared with only three weeks-plus via the Panama Canal. And time, of course, is money. Cut the time it takes for a Houston-to-Tokyo round trip in half and (aside from the canal tolls) you’ve halved the LPG freight rates.
And that’s not the only way LPG shipping costs are coming down. According to a recent analysis by Fearnley Securities, average daily VLGC rates are now below $40,000 (in part because of all the new carriers being built—one a week in recent months) and daily rates may fall to $25,500 (at or below the representative break-even price) in 2017. That would of course be good news for those hoping to sell increasing volumes of U.S.-sourced LPG to Asian markets (including the India subcontinent), which use the propane/butane mix primarily for cooking and heating but also as a petrochemical feedstock.
As we discussed in yesterday’s blog, however, when the 275 Mb/d Mariner East 2 pipeline across Pennsylvania comes into service in 2017, it will pull significant volumes of propane/LPG to the Marcus Hook export terminal near Philadelphia, leaving less Marcellus/Utica-sourced propane and butane to be railed out of the region to distribution terminals across the U.S. Volumes at those terminals will be replaced by propane otherwise headed to the Gulf Coast. Also, flexible steam crackers (which we expect to turn to more propane as ethane supplies tighten and ethane prices rise) and new PDH plants will increase domestic (more specifically, Gulf Coast) consumption of propane, thereby leaving less propane available to export from Gulf Coast terminals—especially under RBN Energy’s Cutback Scenario, which is a pricing view similar to the current forward curves for crude oil and gas, and which would result in a lot less propane being produced over the next five years than most of the market had been figuring before the oil price collapse.
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The Other Page
 
Warning: this is not an investment site. Do not make any investment, financial, travel, or relationship decisions based on anything you read here or think you may have read here.

I say that because I'm going to post/link some financial stories. I post them not because I'm invested in them (in fact, I am not directly invested in any of them to the best of my knowledge); I'm posting them because they help put the Bakken in perspective; they have interesting story lines; and/or they simply caught my eye and I couldn't sleep earlier this morning, and I didn't want to read any more of Dorothy Parker right now and the Wall Street Journal has not yet arrived.

UPS says it may owe the Central States Pension Fund almost $4 billion. It's a complicated story (at least for me) but I "love" UPS so I thought I would read the article:
United Parcel Service Inc. warned it may have to take a charge of as much as $3.8 billion related to a potential pension-fund obligation.
The cost would be triggered if the U.S. Treasury Department approves benefit cuts to protect the solvency of the Central States Pension Fund, UPS executives said Thursday. UPS pulled out of the fund in 2007 but agreed to make up any losses its remaining members experienced.
The world’s largest package-delivery company may have to record a charge of $3.2 billion to $3.8 billion if the government approves the benefit cuts, executives said in an earnings conference call. UPS plans to oppose such a move by the Treasury. Even with the charge, earnings this year probably still will fall within the company’s forecast of $5.70 to $5.90 a share.
Call Bernie. Call Hillary. More evidence of income inequality. Pig-to-man pancreas cell transplant will make scientist highest-paid US executive of 2015. Patrick Soon-Shiong will soon be inshiongly rich:
Patrick Soon-Shiong performed the world’s first pig-to-man cell transplant to treat diabetes. He sold two drug companies, making enough to become a billionaire and buy a stake in the Los Angeles Lakers basketball team. Now Soon-Shiong can also add this distinction to his resume: the highest-paid U.S. executive of 2015.
The 63-year-old physician received a $329.7 million pay package last year as chief executive officer of NantKwest Inc., a cancer-research firm that went public last July and has a market value of $715.5 million. That sum vaults him to the No. 1 spot on the Bloomberg Pay Index, a ranking of the top-paid executives at companies that trade on U.S. exchanges.
Most of his pay stems from 19.4 million stock options granted before the initial public offering.
Hess. I am not interested in the discussion about investing per se, but I was curious on The Street's headline: "...based on the Hess strategy." So, what's the Hess strategy?
Two of the U.S. independents reporting this week, Hess and Pioneer Natural Resources, show vastly different approaches, with Pioneer continuing to increase production at all costs and Hess showing restraint on spending until oil markets recover.

Pioneer's CEO Scott Sheffield has been singular in his goals during this bust in oil prices. It's been about maintaining production growth throughout.
Indeed, in his latest quarterly report he broke his company record again, delivering 220,000 barrels of oil equivalent, an increase of 7,000 barrels of oil equivalent (BOE) over the fourth quarter of 2015. But revenues from this gain in production, with oil below $50 a barrel, have not translated to the kind of cash flow that PXD will need to continue to keep beating its own records.
With a projected $1.4 billion in cash flow for 2016, Sheffield will still come in $600 million short of his own guidance for covering capital expenditures for the year. With that kind of cash burn, it'll need a seriously large asset sale, or a much less likely secondary stock or bond capital infusion. That's not a strategy for an oil price that remains below $50 for very long.
Now, look at Hess.
CEO John Hess was quick to begin his quarterly comments by noting a lower-for-longer strategy. This corresponds to the $1.6 billion stock secondary it did in February, shoring up their balance sheet for the long haul.  Inside the United States, it's pared back fracking operations in both the Bakken, where it currently operates only two wells and in the Utica shale, where it currently operates none. It's assigned much of their capex for 2016, lowered 40% from 2015 levels, to offshore projects in the Gulf of Mexico and Guyana. These are growth projects that reflect a long-term investment return on capital that current shale assets onshore cannot deliver. But with revenues missing by $47 million for the quarter and down 36% from 2015, Hess shares were pummeled, dropping below $60 a share.
And, of course, more dismal news regarding ObamaCare. From Investor's Business Daily:
Aetna reported 911,000 ObamaCare exchange members as of March 31, down more than 4% from over 950,000 at the same time a year ago.

The news is somewhat of a surprise after Anthem said it saw a modest increase in customers largely thanks to nonprofit co-ops going out of business in some of its 14 markets like New York and Colorado.

Anthem ObamaCare enrollment rose 8.6% to 975,000, from 898,000 a year ago.

Centene, a Medicaid insurer specialist that’s rapidly expanding its ObamaCare exchange reach with low-premium, high-deductible plans, recently reported a 55% enrollment spike to 683,000. UnitedHealth (UNH) had 795,000 exchange customers at the end of Q1, but has said it will exit all but a “handful” of states in 2017.

Total exchange sign-ups rose 8.5% to 12.7 million, from 11.7 million a year ago, but it’s not yet clear how many people actually paid. Last year, 1.5 million had dropped out by the end of March.

Reports from six states show that ObamaCare enrollment has shrunk about 14% from the number reported in February, but it’s unclear if that trend will hold.

Aetna management expressed optimism that its exchange business will break even in 2016, though it’s still getting a feel for the medical costs of this year’s members, given the relatively large amount of customer churn from year to year.

Overall, Aetna’s ObamaCare-compliant enrollment, including off-exchange customers, fell to 1.2 million from 1.275 million a year ago.

Thursday, April 28, 2016

For The Archives -- Fracking And Groundwater -- April 28, 2016

From Rigzone:
The impact of horizontal drilling and hydraulic fracturing on groundwater quality in the Cline shale play is not believed to be permanent, new research from the University of Texas at Arlington (UTA) suggests.
The research is the first to analyze the groundwater quality in the Cline shale region of West Texas before, during and after the expansion of unconventional exploration and production.
Researchers found that water samples from private wells contained chlorinated solvents, alcohols and aromatic compounds exclusively after multiple unconventional oil wells had been activated within 3.1 miles of the sampling sites.
Large fluctuations in pH and total organic carbon levels also were detected in addition to a gradual accumulation of bromide.
These changes and levels are abnormal for typical groundwater quality, said Kevin Schug, the study’s lead author and UTA’s Shimadzu Distinguished Professor of Analytical Chemistry and director of UTA’s Collaborative Laboratories for Environmental Analysis and Remediation (CLEAR), in an April 26 press release.
However, the results also suggest that containment from unconventional drilling may be variable and sporadic, not systematic, and that some toxic compounds associated with areas of high unconventional drilling may degrade or become diluted within the aquifer over time.
The study also indicated that contamination pathways are complex; various toxic compounds were detected in groundwater seemingly at random times in areas of high drilling activity. Schug said that more research is needed to precisely quantify and understand contamination cycles as well as to understand aquifer resilience to pollutants.
I Beg Your Pardon (Rose Garden), Lynn Anderson
 
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A Note to the Granddaughters

I generally take Sophia -- she will be two years old this June -- to the park every day for about an hour or so. I try to keep it varied and interesting. Today we took five dice. Sophia loves to play Yahtzee. She has no idea what she's doing but she loves to put the five dice in a cup and roll them, and then throw her arms up, and yell "Yahtzee" when she rolls a Yahtzee. She gets a Yahtee on every roll.

On the way home, Sophia was getting antsy, so I gave her the five dice to play with on her tray on her stroller. About half-way home I noticed that one die was missing.

I feigned my irritation, telling Sophia we were going to have to go back over the ground covered, and look for the missing die. She was very serious, and, she, too, leaned out over the stroller, to help look for the missing die.

We had backtracked about a block when I noted she was holding a die in her hand, and there were still the original four in her tray.

Putting "2 and 2" together, it was clear we were never missing the fifth die. Sophia had put it in her mouth and that's where I had not checked. I guess to keep from getting in trouble, when I feigned irritation, she kept her mouth shut and continued the charade of looking for the lost die, and then when the time was right, put the "lost" die in her hand so I could see it.

Never a dull moment. 

Lifeline For Oil Companies -- April 28, 2016

I do not recall when I first thought this, or when I first posted it. Most recently, I posted it April 12, 2016:
  • $40 oil is a lifeline for US shale oil.
  • $50 oil will allow most US shale oil companies to survive.
  • $60 oil, they will thrive.
Over at Rigzone today, this is the headline of the lead article:  Rising Oil Prices Throw Lifeline to Shale Producers. The article is written by the most accessible global oil analyst currently on the scene: John Kemp, writing from London, for Retuers.
Brent prices for 2017 ended trading above $50 per barrel on Wednesday for the first time since mid-December following the largest and most sustained rally in prices since the oil slump started.
The average for the 12 futures contracts expiring in 2017, called the calendar strip, has risen by 34 percent from its recent low of $37.45 on Jan. 20 to $50.26 on April 27.
Spot prices, represented by the nearest futures contract, dominate the headlines and are of most interest to analysts and financial investors. Most hedge funds and other money managers concentrate on nearby futures contracts because they are the most liquid.
Calendar strips for future quarters and years are far less prominently reported in the media and analyst commentaries. But the majority of crude producers and consumers such as airlines rely on calendar strips to hedge future sales and purchases.
For producers struggling to meet debt payments and avoid breaching the terms of loan covenants, rising prices are a chance to lock in future revenue and reduce downside risks.
Oilfield Dad, Bryan Martin

EIA's Update On Iraq -- April 28, 2016

From the EIA:
The U.S. Energy Information Administration released its updated country analysis brief on Iraq’s energy sector.
There is some good background information here for future stories and could enough for a separate story now.
Iraq is OPEC’s second-largest crude oil producer and holds the fifth-largest proved crude oil reserves in the world.
In 2015, Iraq’s production increased by almost 700,000 b/d compared with the production level in 2014, representing the largest year-over-year increase since Iraq’s production recovery in 2004, following the start of the Iraq war...Iraq continues to lower its ambitious oil production targets...After lowering the target to about 9.0 million b/d by 2020, Iraq may lower the target down to 6.0 million b/d if oil prices continue to be low. -- U.S. EIA
From the link:
Iraq was the second-leading contributor to the growth in global oil supply in 2015, behind only the United States. Crude oil production in Iraq, including fields in the Kurdistan Region of northern Iraq, averaged 4.0 million barrels per day (b/d) in 2015, almost 700,000 b/d above the 2014 level.
Iraq is the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC) and accounted for about 75% of total OPEC production growth in 2015. Iraq's oil consumption decreased slightly in 2015, and as a result, all of the crude oil production increase was exported to international markets. 

What Has Been Will Be Again, What Has Been Done Will Be Done Again; There Is Nothing New Under The Sun -- Ecclesiastes 1:9 -- April 28, 2016; Pioneer In The Wolfcamp -- Cash Costs Down To $14/Bbl

Flashback, 1987.

This is a story for of the US oil bust back in 1987. It is remarkable how it sounds just like today. A huge "thank you" to the reader who sent me this link.

From The New York Times, March 1, 1987, almost 30 years ago:
This session in Mr. Rudman's den did not seem to be a run-of-the-mill opening for a discussion about the oil industry, but very little is run of the mill about Mr. Rudman, from his remarkable vigor to his contrarian instincts to his eye-catching attire. At 77, he is a legend in the oil industry, a maverick who has made his fortune by following his instincts. And now that exploration efforts have slowed to a virtual standstill in the depressed oil patch, the venerable oilman is once again moving against the crowd, spending millions of his own dollars to drill new wells.
Mr. Rudman, whose career dates to back the 1930's, is an independent operator in a field increasingly dominated by corporate behemoths, a health food devotee in a world more attuned to t-bones, an aficionado of plumed hats and red velvet tuxedos in an industry that prefers conservative suits or blue jeans. And as unremitting gloom shrouds his fellow oilmen, he also stands out as an optimist.
''I've been waiting 56 years for this,'' said Mr. Rudman. ''It's the greatest opportunity that has ever existed in my lifetime. The way I figure is that if the price of oil is 50 percent of what it was and your drilling cost is 50 percent of what it was, you're in the same situation only the deals are so much better now.'' During the boom years, he said, too many investors were crowding each other out of the best opportunities. ''Right now, I figure I'm going to go at it as hard as I can. I'm spending every dime of my income on drilling wells.''
Other oilmen maintain that Mr. Rudman's optimism should be taken with a few grains of salt. He can afford to be enthusiastic, they say, because he scored a remarkable coup in 1981, at the height of the oil boom, by selling off all his producting wells to the Petro-Lewis Corporation. In a debt-ridden industry, he is one of the last of an endangered species, a cash-rich oilman. He said he is investing millions of his own dollars in approximately 70 wells this year.
Mr. Rudman bases his optimism on the lowered costs of drilling wells in a depressed industry. With the number of active oil rigs in the United States down to 839 from a peak of 4,530 in 1981, rigs can sell for 10 cents on the dollar. Promoters who once charged fat fees for oil deals are now desperate for investors. Most of the wells that could be drilled for $1 million to $3 million a few years back can be done for half that now. Mr. Rudman figures he has more chance of getting in on a deal that could turn into a major find, and he is certain the current carnage in the industry will eventually lead to shortages and substantially higher prices.
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Forbes Suggests The Same Thing

Forbes suggests America's oil boom just taking a breather:

Pioneer Natural Resources is a bellwether company, a Platonic ideal of all that is possible for America’s oil industry. Pioneer has the strongest balance sheet of any of the American independents with $2.5 billion in cash against about $3 billion in debt. It has built up a massive 800,000-acre position in the Permian Basin, a region that has emerged as the single best oil province in America, where the rigs are still running even at these prices.
Finding oil is not the issue for Pioneer, it’s how to get it out of the ground as quickly and efficiently as possible. The company figures it has about 12,000 drilling locations in the Permian, enough for about 90 years of drilling at its current pace. Pioneer’s balance sheet is strong enough and its land is good enough that even as America’s oil industry has flatlined (with U.S. oil output down to 9 million bpd from a high of 9.6 million) Pioneer has managed to keep growing its output, which at 222,000 barrels of oil (and gas equivalent) per day is about 10% higher than a year ago.
The company, as I wrote in this late 2014 profile, will be a survivor.
Pioneer reported impressive first quarter earnings yesterday and its stock is up 6% in Tuesday morning action. Sure the company had a big net loss, bringing in just $685 million in revenue against $1.1 billion of expenses. But when you back out that pesky stuff like $350 million in non-cash depreciation expense, Pioneer pretty much broke even. It is still running 12 rigs (down from 30 in 2014), and has gotten its cash costs down to about $14 per BOE.

Hess With Three Producing Wells Completed -- April 28, 2016

NDSU quarterback sensation goes #2 in NFL draft, to Philadelphia Eagles. Story here:
The Eagles selected North Dakota State's Carson Wentz because they believe he can be their quarterback of the future. The present, they said, belongs to Sam Bradford.
"Sam's our quarterback," Eagles executive vice president of football operations Howie Roseman said Thursday night. "We've been clear about that."
The Eagles made a total of three trades to move up from No. 13 overall in the NFL draft to No. 2. After the trade to No. 2 last week, Bradford skipped voluntary workouts. The Eagles were informed that Bradford wanted to be traded and would not participate in May organized team activities.
"Sam is the leader of this football team," coach Doug Pederson said. "He's the quarterback. I've said all along that he's the quarterback. He's the guy we want leading this charge. When he comes back, he's welcome with open arms."
Barring a trade or injury, Wentz isn't even expected to dress for a game in the regular season.
Wentz's climb to the top of the draft was as improbable as the Eagles'. He started just 23 games in his career at North Dakota State, a powerhouse at the NCAA Football Championship Subdivision level. But the 6-foot-5, 237-pound Wentz impressed teams with his physical tools and arm strength.
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Back to the Daily Report

Active rigs:


4/28/201604/28/201504/28/201404/28/201304/28/2012
Active Rigs2986185187209

Wells coming off confidential list Friday:
  • 31949, SI/NC, Petro-Hunt, Glovatsky 145-98-24D-13-1HS, Little Knife, no production data,
  • 32120, SI/NC, EOG, Austin 438-2635H, Parshall, no production data,
No new permits.

Wells coming off confidential list today:
  • 18664, 746, Whiting, Eide 5-13H, Truax, t81/10; cum 230K 2/16;
  • 28239, EXP, Petro-Hunt, Dolezal 145-97-20C-17-5H,
  • 30951, drl, EOG, Van Hook 70-1411H,
  • 31109, EXP, SHD, Charging Wildcat 22-31H,
  • 31110, EXP, SHD, War Eagle 22-31H,
  • 31111, EXP, SHD, Luke Neset 22-31H,
  • 31136, EXP, Newfield, Jorgenson Federal 148-96-10-15-11H,
  • 31137, EXP, Newfield, Jorgenson Federal 148-96-10-15-1H,
  • 31138, EXP, Newfield, Jorgenson Federal 148-96-10-15-4HLW,
Whiting renewed a Loomer permit, #31151.

Three (3) producing wells completed:
  • 29128, 977, Hess, BW-Johnson-149-99-1003H-4, Cherry Creek, t3/16; cum 6K after 3 days;
  • 29129, 1,266, Hess, BW-Johnson 149-99-1003H-5, Cherry Creek, t4/16; cum --
  • 31477, 311, Hess, BL-Davidson-156-96-3526H-8, Beaver Lodge, t3/16 cum --
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Texas Wild Flowers -- 2016
Set #3


Speaking Of Hitting A Soft Patch, It Appears Venezuela Has Hit A Pothole The Size Of Bernie Sanders' Home -- April 28, 2016

Forbes is reporting that Venezuela does not have enough money to buy the ink and paper needed to print its own currency.

Venezuela ... tic, tic, tic ....

Soft Patch: President Obama -- The First President In History Who Never Delivered A Single Year Of 3.0%+ Economic Growth; Home Ownership Rate Third Lowest In History -- April 28, 2016

Updates

Later, 8:12 p.m. Central Time: as the stories keep rolling in on the economy, and President Obama trying to explain what Americans are missing and where to place the blame, I looked up the quote, "the emperor has now clothes" on the internet, and saw a photograph of the president playing golf. Just saying.

 
Original Post
 
I knew the "Lost Decade" was bad; I did not know it was this bad. The gatewaypundit is reporting and if it weren't for Drudge, I would not have known. Thank you, Mr Drudge.
On Thursday the Commerce Department announced that the US economy expanded at the slowest pace in two years. GDP growth rose at an anemic 0.5% rate after a paltry 1.4% fourth quarter advance. 
Ronald Reagan brought forth an annual real GDP growth of 3.5%. 
Barack Obama will be lucky to average a 1.55% GDP growth rate. 
This ranks Obama as the fourth worst presidency on record. Barack Obama will be the only U.S. president in history who did not deliver a single year of 3.0%+ economic growth. 
If the economy continues to perform below 2.67% GDP growth rate this year, President Barack Obama will leave office with the fourth worst economic record in US history.
Today's GDP report.

The news just keeps getting worse. With record low rates and huge emphasis on home ownership under this administration, home ownership rate is now the third lowest on record.  MarketWatch reports. As noted often, it's hard to make a mortgage payment when government mandates result in $2,000/month in health care premiums.