Friday, May 20, 2016

Insane? -- May 20, 2016


May 23, 2016: The Financial Times -- US companies' cash pile hits $1.7 trillion. Story was posted May 20, 2016, and has the same data points as the one below. Some additional notes:
It is the first time the top five cash hoarders have been made up exclusively of tech groups, an industry that generates more of its sales abroad than any other sector and one that has been embroiled in tax disputes in both the US and Europe.
The ever increasing amount of cash also highlights how US boardrooms are reticent to invest in their businesses, choosing instead to increase dividends, in a sign of the continued anxiety that economic activity could still slow at home or in China.
The report showed the first annual dip in capital spending since the US emerged from recession. Expenditures on things like new equipment slipped 3 per cent to $885bn as energy and mining groups retrenched in the face of sharply lower commodity prices.
“Companies are hoarding cash,” said Jack Ablin, chief investment officer at BMO Private Bank.  
Maybe if tax codes were a bit more corporate-friendly, some of that cash would be winding its way through the economy.
Original Post
My definition of insane at this link: surprise me. In case the link breaks, but much more at the link:
Apple, Microsoft, Alphabet, Cisco Systems, and Oracl are sitting on $504 billion, or 30%, of the $1.7 trillion in cash and cash equivalents held by U.S. non-financial companies in 2015.
That's even more cash concentration than in previous years, as these five companies held 27% of cash in 2014 and 25% in 2013. Apple alone is holding more cash and investments than eight of the 10 entire industry sectors.
This Makes My Day

One of my dearest friends (husband and wife) who I met because of the blog were kind enough to send this photo.

There is a huge back story to this picture, but it's a personal story, and I will let it stand without comment, but it means the world to me, for many reasons.

To D-- and K----, thank you. Oh, and the Kat, to whom I owe several dozen burgers on bets I've lost over the years.

Kaiser-Francis Renews Three More Permits -- May 20, 2016

I might touch on this again some time: the fable about the hare and the tortoise, and then take a look at Kaiser-Francis; what a great back story. This might have been the first time I blogged about Kaiser-Francis, almost five years ago. Wow. From another post: Kaiser-Francis is a small private oil and gas company with long history in North Dakota, albeit small, until January 22, 2016, when it was noted that Kaiser-Francis acquired 115 wells from Fidelity (MDU)

Active rigs:

Active Rigs2580188189209

Six (6) new permits --
  • Operators: BR (3), EOG (3)
  • Fields: Bailey(Dunn), Parshall (Mountrail)
Seven (7) permits renewed:
  • SHD (3), permits for a Charging Wildcat, a War Eagle, and a Luke Neset, all in McLean County
  • Kaiser-Francis (3), permits for a Parshall well, a Pratt well, and a Banner well, all in Mountrail County
  • Enduro, a permit for an MMU well in Bottineau
Slawson canceled one permit, a Blade Federal permit in Mountrail County

Nothing About The Bakken -- Beach Books This Summer, Including John Hands CosmoSapiens -- May 20, 2016

Don't look for any new posts for several hours.

My Book To Take To The Beach This Summer

Cosmosapiens. Or Cosmos Sapiens. It is written both ways on the jacket -- front and spine. Author: John Hands. Copyright 2015 by John Hands, but first published in hardcover in 2016.

A must-read for any high school graduate on her way to a major in chemistry, biology, anthropology, pre-med, or philosophy this next year. 

Wow. Six hundred pages.

Great, great summary of where we stand with regard to:
  • the origin of the universe 
  • the formation of 95 naturally occurring elements
  • the emergency of life on earth
  • understanding the fossil record
  • the taxonomy of all living organisms on earth
  • the evolution of humans
  • behavioral evolution
  • evolution of human consciousness
The author states at the outset, at the end of chapter 1, which could have been prologue, or introduction:
Any investigation is heavily influenced by prior beliefs. I was born and educated a Catholic, became an atheist, and am now an agnostic. I have no prior beliefs in theism, deism, or materialism. I genuinely do not know. And that is part of the excitement of embarking on this question to discover from scientific evidence just what we are and may become. I invite readers with an open mind to join me on this quest.
That was on page four.

On page 582, the first of 39 conclusions:
It is almost certain that the empirical discipline of science will never be able to explain the origin of the matter and energy of which we consist.
If there is any "hole" in the book, it appears to be with regard to "energy," ATP, redox -- and any reference to Nick Lane.  

It appears the author gets as close to metaphysics as possible without crossing over. Is "metaphysics" in the index? Yes, "metaphysical questions," 91 - 3, 579; and, "metaphysics," 498, 503, 544.
Then follows "Notes," from page 588 to 616.

Then follows "Bibliography," from pages 617 to 627.

Then follows a glossary, pages 628 to 645.

Illustrative credits are provided in the next two pages.

The index extends from page 648 to 674.

Authors in the bibliography that give me particular "joy" (again, with 20 entries on each of 11 pages, there are about 200 authors cited):
  • Karen Armstrong, The Great Transformation: The World in the Time of Buddha, Socrates, Confucius and Jeremiah, 2006
  • Michael J Behe, Darwin's Black Box: The Biochemical Challenge to Evolution, 1996
  • A G Cairns-Smith, Seven Clues to the Origin of Life: A Scientific Detective Story, 1985
  • Stephen Jay Gould, multiple publications
  • John R Gribbin, Deep Simplicity: Chaos, Complexity and the Emergence of Life, c. 2004
  • Desmond Morris, The Illustrated Naked Ape: A Zoologist's Study of the Human Animal, c. 1986
  • Simon Singh, Big Bang: The Most Important Scientific Discovery of All Time and Why You Need To Know About It, c. 2004
  • James D Watson and Gunter S Stent, The Double Helix: A Personal Account of the Discovery of the Structure of DNA, c. 1980

Reason #398 Why I Love To Blog -- May 20, 2016; Iowa May Keystone The Dakota Access, But Canada Presses On With It's Own Trans Mountain Expansion Project

Yesterday I posted this:
Oil & Gas Journal is reporting:
Canadian Prime Minister Justin Trudeau appears ready to fulfill a campaign promise to ban crude oil tankers off northern British Columbia in a move that would throw the proposed Northern Gateway Pipeline into question.

The $6.5 billion, 1,177-km twin pipeline proposed by Enbridge Corp. would carry blended bitumen from Alberta to a terminal at Kitimat, BC, and return diluent to Alberta.

TransCanada also has proposed a project called Energy East, which would link the oil sands with eastern Canadian provinces and the Atlantic.
This pretty much indicates the direction Barack Trudeau will take with regard to Canada's oil and gas industry. 
Today this story from Penn Energy:
Canada’s National Energy Board (NEB) has concluded that the Trans Mountain Expansion Project is in the public interest and recommended the Federal Governor in Council approve the proposed expansion. The NEB’s recommendation will allow the Project to proceed with 157 conditions if the Governor in Council approves the project. The Federal Government will make the final decision on the Project in December 2016.

“Trans Mountain is pleased with the NEB’s recommendation,” said Ian Anderson, president of Kinder Morgan Canada. “The decision is the culmination of a lengthy and thorough regulatory review process and considers the many thousands of hours of environmental and technical studies, scientific evidence and community engagement that has been part of this comprehensive assessment. After an initial review of the report, Trans Mountain believes the 157 Project-specific conditions, many in response to input from Intervenors, are rigorous and appear to be achievable.” Trans Mountain continues to analyze the NEB’s conditions for implications to community commitments, costs and Project timeline, but is still expecting the in-service date to be December 2019.

“This report is a reflection of our evidence along with the valuable input from Intervenors and our conversations with communities, Aboriginals and individuals,” added Anderson. “Now, more than ever our Project makes sense for Canada. We have demonstrated the demand for much-needed access to global markets and how building this pipeline will bring both dollars and many thousands of jobs for communities in British Columbia and Alberta at a time when our economy needs it most.”

BBC's Analysis Of The Iran-Saudi Arabia Conflict -- May 20, 2016

One of the best posts I had on the Mideast was the post on "end times for the caliphate." John Kemp has now alerted me to another nice analysis of what is going on in the Mideast regarding the Iran-Saudi Arabia conflict. It is not as good as the caliphate story, but it's a keeper for those trying to figure out what's going on "over there."

Some data points regarding the proxy wars between Iran and Saudi Arabia across the Mideast, in Lebanon, and from Syria to Yemen. This analysis focuses on Lebanon.

  • the Shia militant group, backed by Iran, allied with Syrian al-Assad's forces
  • anti-Saud
  • origin, 1980's to fight Israel's occupation of south Lebanon 
  • remains dedicated to "liberating Palestine" -- though now deeply embroiled in the war in Syria
  • "Death to Israel" being replaced by "Death to Saud"?
Takfiri: a specific term to describe Muslims who believe society has reverted to a state of non-belief, but in today's Middle East it has also become short hand for Sunni jihadist groups.

Saudi Arabia, to counter Iran's influence in Syria: long backed a variety of politicians and institutions in Lebanon, including the Hariris --
  • former Prime Minister Saad Hariri
  • his father Rafik, a former prime minister who built his fortune in Saudi Arabia; killed in massive truck bomb, in 2005
  • the killing of Rafik blamed on Syria at the time
  • later, a Hezbollah commander was charged with the killing
  • hindsight: the killing now looks like the moment when Iran's allies began their push against Saudi influence in Lebanon -- but the kingdom was slow to recognize this, as Hezbollah chipped away at Lebanon's state institutions
Saudi Arabia convened a League meeting to protest a massive mob attack on the Saudi embassy in Tehran
  • Lebanon's foreign minister, an ally of Hezbollah, abstained
  • the snub infuriated Saudi Arabia; Saudi halted a $3 billion package of aid to the Lebanese army
  • Saudi funds which had been pouring into Lebanon, including the media, dwindled
  • Analysis:
  • by leaving/abandoning Lebanon, will the void be filled by Hezbollah (Syria?)
Saudi's checkbook diplomacy: no strategic thinking; and now pummeled by deteriorating oil prices
  • Saudi now realizes Hezbollah is no longer just a Lebanese faction; it is a "regional power"
Lebanese themselves may see stability now that Saudi Arabia is leaving
  • in the words of one Lebanese businessman:
"We helped build Saudi Arabia, and the Gulf, now Iran is the new El Dorado," said the businessman.

For Iran and Valerie? This seems to be working out just fine.

New Mexico Initiative On Oil Imports -- May 20, 2016

Over at the discussion group, a reader has posted an editorial on a New Mexico initiative to stop / curtail importing crude oil into the US. My reply:
I think anyone who thinks this through realizes "cheap" imported oil is not the problem.
It actually starts closer to home: US government subsidies/support for intermittent, unreliable, expensive, inefficient, wasteful, bird-killing wind and solar energy, which requires back-up fossil fuel.
The problem extends to keystoning new pipelines and hysteria over CBR. The problem extends to the war on coal which under the next administration could expand to the war on fracking.
The problem extends to CAVE dwellers. 
Headlines From The Wall Street Journal and Comments

Credit-card debt nears $1 trillion as banks push plastic. I helped the banks hit the $1 trillion threshold. I am moving some of my money into Stickley Furniture. LOL.

Deere's 2Q16 sales decline wasn't as steep as feared, resulting in earnings that topped expectations. One wonders if the significant drop in royalties in the Bakken, the Eagle Ford, and the Permian could have affected farmers. In western those who consider themselves farmers are more likely to be oilmen, whether they care to admit it or not.

US existing-home sales rose in April.

First glance at iPhone maker's retail revamp. This is something worth checking out. I haven't looked at the story yet. When I last visited the local Apple store, I asked one of the employees how the retail store has changed under their new senior vice president of retail and online stores, Ms Angela Ahrendts, former CEO of Burberry, who now reports to Tim Cook. It will be interesting to see if the article says anthing the Apple employee said. [The article was worthless; the comments are much more helpful.]

How the 15-minute doctor's appointment hurts health care.

Random Update In Area Of Increased Statoil Activity -- May 20, 2016

In yesterday's daily activity report, Statoil had permits for a 6-well pad in Patent Gate, about six miles northeast of Alexander, ND.

The wells on this six well pad will include drilling units in:
  • the Camp oil field
  • the Poe oil field
  • the Alexander oil field,
  • the Patent Gate oil field
I assume that has happened before, but it probably is not often.

The general area:

Zooming in:

War On Wind, Solar -- May 20, 2016

Weekly crude oil supply: when I first started blogging back in 2007, the 30-second sound bite -- the US had 22 days of crude oil inventory. That number held for quite some time. Silently, completely off the radar scope, the new "normal" for US crude oil inventory is 33 days of crude oil. At some point, this will be reflected in global crude oil statistics, everything from exports to utilization to cheap energy, etc., etc., etc. 34 - 22 = 12 / 22 = a 55% increase in this commodity. Meanwhile US imports are maintaining historical levels, and occasionally surpass previous levels.

Weekly Crude Oil Supply Estimates: days of gasoline inventory, US, source:
  • 5/13/16: 33.6 days of inventory
  • 1/31/14: 23.3 days  
  • 1/24/14: 22.9 days
  • 1/17/14: 22.2 days
  • 1/10/14: 21.8 days
  • 1/03/14: 22.2 days
  • 12/27/13: 22.3 days

To the best of my knowledge, "we" have never been blessed with so much oil:

RBN Energy has another post in its series on natural gas today. My first thought after reading this -- without massive subsidies and/or incredible mandates/restrictions imposed by federal and state governments, the almost seemingly inexhaustible supply of natural gas in the US will simply overwhelm solar / wind over the long term.

In India: 123.8 degrees Fahrenheit, somewhere in India; previous record, 123.08 degrees. According to the linked article, the heat will get worse over the next few days. The Indians are going to be using a lot air conditioners over the next few days. Let's see if their solar energy projects can keep up.

Active rigs:

Active Rigs2680188189209

RBN Energy: utilities seek to expand gas reserve.
Which brings us to whether chicken farming is like long-term gas hedges. Thanks to tougher environmental rules, low natural gas prices and other factors, electric utilities aren’t just building more gas-fired generating capacity, they’re running their gas-fired units a lot more than they used to. Utilities also are retiring many of their older, smaller coal-fired units—the ones that, while not very efficient, could be relied on in the heat of summer and cold of winter. All that has left utilities more dependent than ever on gas-fired generation and, with that, more exposed than ever to the risk of natural gas price spikes. Many utilities have regularly engaged in short-term hedging, mostly with the aim of reducing gas-price volatility. More recently, though, electric utilities have been considering—and actually making—investments in gas reserves/production assets or making long-term commitments to buy gas, figuring that 1) natural gas prices are at or near their lowest prices in years; 2) many oil and gas producers, squeezed by low prices for their commodities, are looking for deals, and 3) gas-reserve investments by utilities might be eligible for regulator-approved rates of return (typically about 10%/year), just like the rates of return utilities are permitted to earn on their investments in power plants and transmission lines.
We first blogged about this topic almost two years ago in which we discussed Florida Power & Light’s (FPL) proposal to invest up to a total of $191 million in 38 PetroQuest Energy gas production wells in the Woodford Shale in southeastern Oklahoma.
Tesla. For MBA students, I think the most interesting story to follow for the next two years will be the Tesla ramp-up story. If Tesla even comes close to meeting its self-imposed deadline, this will truly be the story of the century. As much as I think this whole story is a scam, if MuskMelon can succeed, it will prove that American ingenuity and productivity has not died, as some have suggested. Remember, he says Tesla will begin delivering the Model 3 in late 2017: 100,000 in 2017; 400,000 in 2018, two years earlier than its original target and a 10-fold increase over the 50,000 vehicles it made in 2015. This would seem to be a bit worrisome:
One complication is that Tesla has not finalized the Model 3 design and specifications, said automaking consultants and supply executives who asked not to be identified because Tesla prohibits them from disclosing contract details.
War On Obesity

War on obesity. Two years ago I might have been "upset" about this, but no longer. I think it's great. The emphasis on sugar vs fat may be misplaced, but who am I to argue. Whatever.

Two months ago, in March, I began a serious weight reduction program. It turned out to be one of the biggest challenges I've undertaken in quite some time. While in the USAF I had to "maintain weight" but it was easier: younger folks tend to burn more calories, all things being equal; the AF had a mandated fitness program; our efficiency reports required comments regarding fitness and weight; and, I had women friends around the world.

Okay, three out of four of those were accurate.

Yahoo!News is reporting:
Nutrition facts labels on food packages are getting a long-awaited makeover, with calories listed in bigger, bolder type and a new line for added sugars.
And serving sizes will be updated to make them more realistic — so a small bag of chips doesn't count as two or three servings, for example.
I now pay very close attention to calorie counts. While standing in line at Starbucks I look at the calories. I won't eat spur-of-the-moment, impulse-buying snack that has more than 100 calories, and even then, probably not. Not if it's impulse buying.

When I started the severe weight reduction program, I had planned on posting the diary when I reached certain milestones, but I have decided not to do that. I'm not sure why I changed my mind but for now, no diary update.

I'm not even sure I want to provide any details. Everyone goes about this differently and I'm not sure my comments will add anything to the discussion. But I will say this: if one wants to be serious about weight reduction, one must approach it the same way one would approach putting one's dog on a diet. 

By the way, back to that small bag of chips counting as two or three servings. It will be interesting to see how many servings are in a can of soup. And I wonder if the same can of soup is worth two servings in the US and 10 servings in Bangladesh.

No Comment

Business Insider is reporting:
On Wednesday, LinkedIn said that a security breach resulted in over 100 million user passwords being compromised.
Now the company's taking action. Anyone with a LinkedIn account who hasn't changed their password since 2012when the breach happened — is receiving an email asking them to change their password.
My wife, who doesn't have a LinkedIn account, received the e-mail. Now, how does that happen. Did LinkedIn go back to the hacker and get the list of hacked e-mail accounts. There is only person with a LinkedIn account who has e-mailed her. That would be me. I have not received an e-mail from LinkedIn unless it ended up in my Spam folder and I deleted it unknowingly.

I guess it's time to change my password. If possible, I will close my LinkedIn account. I don't want to be LinkedIn any more anyway.