Tuesday, July 28, 2015 -- Part III

I have said from the beginning that Tesla is a battery company disguised as a car company surviving on government subsidies and mandates.

I guess we got a bit more proof of that today, with this headline over at The Street: Tesla Tanks As GE Eyes Energy Storage Role.

This is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here.

By the way, based on many, many articles about GE over the past year, it appears GE has gotten its act back together, is on a roll, and will be a powerhouse of an energy company in the US and in France, of all things, by 2020.

The market today, with 3 - 5% rise in share prices in the energy sector show just how fast things can change.

For investors, the change in the price of shares will start showing up about six months before we see the demand for oil catch up with the supply of oil. 

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For The Archives: Politics

Updates

July 30, 2015: The National Journal agrees -- it's Biden's moment. 

July 29, 2015: Trump is now saying the same thing -- Hillary will flame out and Biden's star will rise.  

Original Post

 

I am/was ambivalent about posting this. This is an e-mail note I sent a reader with regard to some political story last week. As I wrote it, I wrote it thinking I might post it sometime. This note, of course, is not ready for prime time, but I don't want to lose it, so will post it (pretty much as originally written with some editing) for archival purposes, and then add some stuff on the end.

Oh, yes, now I remember. It was in response to the article suggesting that the White House is beginning to undermine Hillary's campaign:

Yes, that was an interesting story. I've thought about it a lot.

Each succeeding president may / may not destroy the preceding president's successes; may / may not re-write history of the former president.

1. When Bush left office, Iraq may or may not have survived as a success story. It probably would have turned out the way it did, regardless. However, Obama made sure Iraq imploded and Bush's legacy (a free, democratic, thriving Iraq) is dust. Obama made sure of that. Along the way, Jarrett took over, and made Iran the Mideast superpower.

2. Obama has very, very weak legacies in the making: ObamaCare, the Iran nuclear deal, global warming, etc. He very, very badly needs a successor to shore up his weak legacies. His only hope is a Democrat winning. If he orchestrates the implosion of Hillary, the GOP wins, almost by default without much of a battle.

3. Unless.

4. Unless there's an Obama knight-in-waiting. Obviously it's not going to be Sanders. And we haven't heard much from O'Malley. It is interesting that the Drudge headline (I did not read the story at the link) today is Biden: in or out. Biden would most likely keep the entire Obama staff in their various bureaucracies and replace them with his own cronies only as necessary. Jarrett might even stay. Biden would do what he could to save the Obama legacies. Only problem: age. Well, actually a second problem: old white guy. Well, actually a third problem: a buffoon. [There's only one greater buffon in Washington, right now, at a similar level of power: Boehner.]

5. Having said that, both Hillary and GOP need to fear Biden. In Obama's eyes, even if Biden lasted only one term (due to age, health) that would be enough time for him to save Obama's legacies -- think LBJ following JFK.

6. An aside: I will be irritated if Congress does not put Hillary under oath when she comes to testify. Even if "under oath" vs not being "under oath" before Congress is a fine line, just knowing that she has raised her right hand to swear to tell the truth will make her very, very cautious in her answers. A lot of "I never intentionally...." "I don't recall the specifics, but I never knowingly lied ..." Etc. etc.

7. It's also very possible, the IG investigation will go nowhere; this was simply a leaked threat to keep her in line.

8. The primary system of nominating candidates really challenges the Dems this time; if we had the pre-60's convention nominating process, it is very, very likely a charismatic Democratic governor -- somewhat centrist -- would steal the show on the second or third ballot, but now candidates have to put together a winning primary race starting months early.

9. The GOP is screwed if Trump goes nuclear -- third party option.

So, the added comments:

1. Regarding #7 above: that appears to be a hoax of a story. It is now being reported there never was any intention of this administration to sic the IG on Hillary.

2. To win the presidency, actually to win anything, one needs to peak at the right time. Even in soccer, the US Women's team needed to peak at exactly the right time. For Hillary, she peaked before she became SecState; perhaps she peaked as the junior senator from New York, much like the junior senator from Illinois, though his star kept rising. She may have peaked when "she stood by her man."

3. The Planned Parenthood's "Josef Mengele-like research" story appears to have some legs to it and the fact that Hillary has not yet distanced herself from at least the part about working to minimize the crunchiness will cause her great problems. I don't think mainstream America has problems with what are analogous to miscarriages in the first trimester, but when talking about crunchy skulls, that is beyond the pale. And the videos are going to keep coming.

4. It looks like the Dems are coming down to this -- Hillary, fading; Biden, goofball; Kerry, a legend in his own mind and his star is rising. Kerry will get the Nobel peace prize next year, right as the presidential campaign gets into full swing.

5. For the GOP: the best debates since the Reagan candidacy. One-on-one, Trump will destroy any other candidate in a debate -- even if he makes no sense.

6. For the networks: hoping beyond all hope, Trump will win the GOP nomination. The ratings for the presidential debates will set new records.

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$200 Oil

I've posted it before but just to reiterate: when I suggest "they" are setting us up for "$200 oil," I don't mean "literally" that oil will go to $200. I am suggesting that when the demand catches up to supply, and the price heads back to $100 fairly quickly, pundits and talking heads will start talking crazy talk, they will start talking about $150 oil, $200 oil, etc.

The data points and graphs that haunt me day-in, day-out:

1. The graph of Saudi oil production over the past five years, despite a 5-year, $35-billion expansion of its drilling program and an all-time high of active rigs in the Mideast.

2. The fact that $200 billion (maybe more) and at least 45 projects have been canceled, deferred, scrapped, whatever in the past six months, and most of these projects have been off-shore projects that take six to seven years to get on-line.

3. The end of the second quarter 2015: North Dakota hits 68 active rigs, a post boom low. Early in the 3Q15, North Dakota back to 73 active rigs.

4. Oil companies planning to add 80 million bbls of new crude oil storage capacity along the Texas-Louisiana coasts this year alone (for perspective, Cushing holds 150 million bbls). The storage facilities in Texas/Louisiana are around 300 million bbls of crude oil.

5. Nigeria, a huge exporter of crude oil, may be the first Saudi-engineered casualty of the oil wars.

6. Besides off-shore projects being deferred / canceled / scrapped, the current off-shore plays in the North Sea are showing their age. Brazil and Mexico are both struggling with their off-shore projects.

7. Other than the Permian, Eagle Ford, and the Bakken, most of other shale plays in the US are being ignored.

8. The tsunami of oil hitting the market in 2015 finally tails off in 2016, but will take a good year to "burn off" the excess.