Now, the links for today: from the WSJ, from readers, from wherever. No update on the ObamaCliff, but the picture is becoming clearer: a) no deal before December 31, 2012; b) workers will see increased taxes coming out of their pay checks in January; c) taxes on dividends won't be an issue until April, 2014; d) DoD will immediately cut positions, but not personnel; using smoke and mirrors, they can move the 2013 spend plan to the left while the political theater plays out; e) states counting on federal money will see a significant cut, throwing state budgets into disarray; f) folks with dividends and capital gains won't be affected until April, 2014; g) sometime in late January, a compromise will be reached; h) January will be chaotic but by summer things will be back to normal, assuming one considers a recession "back to normal."
Natural gas: front page story, WSJ: US gas exports clear hurdle
Shipping some of the newly abundant U.S. natural gas overseas would benefit the nation's economy more than keeping it all at home, according to a long-awaited government study that has the potential to reshape the global energy market. The endorsement could turn the tide in a politically sensitive issue.
Gas producers are eager to export more, while big consumers including manufacturers and chemical companies are leery that exports could raise domestic prices. Environmental groups, meanwhile, fear that allowing exports would encourage more natural-gas production.Or not. Economic suicide groups (ESGs) and faux environmentalists (FAs) will have the last say in this administration if history is any guide.
Deals: A huge Wall Street deal yesterday suggests that oil and gas are more valuable than gold and copper, SeekingAlpha.com. Freeport's stock collapsed 16% on the announcement. The WSJ has a huge story on the deal.
Guar: a bubble goes pop, WSJ, p C1 -- a classic bubble story.
... a recent sharp decline in the export price for guar gum to $7,000 a ton, from a peak of $27,000 a ton in May, has caused trouble for the likes of Mr. Parihar. "I just hope that prices rise again. Otherwise, I am ruined," he said.
The bust also hurt oil-services companies like Halliburton Corp. that depend on guar gum, a product made from the bean in India and exported to the U.S. and other markets. The gum is used to thicken water that is mixed with sand and pumped horizontally into the cracks in shale rock to free the gas, a process called hydraulic fracturing.Go to the link for the rest of the story.
Music: Perhaps one of my favorite stories today. I was an early adopter of Pandora, but have since moved on. I can do pretty much what Pandora does for free. The more Pandora sells, the more it loses. Something tells me this is not what they teach at Harvard school of business. I haven't read the story, yet, but I assume this is because every song played results in a royalty payment that must be paid by Pandora. And Pandora listeners don't have to pay to subscribe to Pandora for basic services. And if one puts Pandora in a back window, one doesn't even see any advertising (I don't know if they even have visual ads; I haven't visited Pandora in months.)
Sotheby's set a record yesterday for a work on paper, at least by some measures, when it sold a Raphael drawing for $47 million. -- WSJ, p. A2. The drawing: "Head of a Young Apostle." This was nearly twice the estimate ($24 million); the drawing was Raphael's last, nearly completed painting, "The Transfiguration" which hangs in the Vatican.
This is how you destroy the domestic oil industry. Protect the Lesser Prairie Chicken; slice and dice the eagles -- op-ed, WSJ.
The U.S. Fish and Wildlife Service recently announced that it will formally consider listing the Lesser Prairie Chicken—whose habitat includes some of the nation's major energy fields—as a threatened species under the Endangered Species Act. This clearly is another desperate ploy by the Obama administration to further its campaign against oil and gas drilling. Such egregious overreach has been a specialty of the Environmental Protection Agency in the past. The administration has now found another agency to do its bidding.
The Lesser Prairie Chicken is a ground-nesting bird native to portions of Texas, Colorado, Kansas, New Mexico and Oklahoma. In Texas, it is found primarily in the Texas Panhandle and the Permian Basin. Listing the bird as threatened or endangered would make drilling all but impossible in these economically thriving regions. The Permian Basin alone produces more than one million barrels of oil a day, accounting for almost 70% of Texas' total production and 20% of the nation's oil production. It also supports thousands of jobs and provides millions of dollars in state revenue.Meanwhile, solar farms destroy desert tortoise habitat and wind farms have a broad waiver to slice and dice the national symbol.
ObamaCare (not my word, see Wiki): Speaking of birds, this turkey will be in court for decades: the opening for a fresh ObamaCare challenge -- op-ed, WSJ.
ObamaCare is being implemented, having been upheld as constitutional by the Supreme Court in June in a series of cases now known as National Federation of Independent Business v. HHS. It is becoming increasingly clear, however, that the court took a law that was flawed but potentially workable and transformed it into one that is almost certainly unworkable. More important, the justices also may have created new and fatal constitutional problems.World food prices fell in November: foreshadowing the Great Recession of 2013.
ObamaCare, or the Affordable Care Act, was conceived as a complex statutory scheme designed to provide Americans with near-universal health-care coverage and to effectively federalize the nation's health-care system. The law's core provision was an individual health-insurance purchase mandate, adopted by Congress as a "regulation" of interstate commerce. The provision required most Americans to buy federally determined minimum health-care insurance, or to pay a penalty more or less equivalent to the cost of that coverage.
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