Fifteen Minutes -- Fast And Furious -- November 23, 2020

Second Take

GM, ouch: US government announcement today will cost GM a third of its annual net income. Takata air bags. Wasn't this issue resolved years ago? Nope. At least not for GM. Other manufacturers got on with it; replaced the air bags; did the right thing. GM put their customers at risk for the past four years, petitioning the NHTS four times starting in 2016 to avoid a recall. ESG, anyone?

First Take

First things first: last thing I said about the market yesterday -- all things being equal the market should do well today -- Dow up nearly 250 points at opening; dropped back to about 200 points now.

US manufacturing, services activity: expands RAPIDLY in November. Link here.

GDP. Wasn't there talk of a 1% contraction in 4Q20 or 1Q21 -- I forget which. GDP Now has 4Q20 up about $6.

Legacy Fund deposits: I expect the latest deposits to be posted by COB today. [For some reason that site is not loading for me; alternate site here.] If interested in October newsletter, here's the PDF:

https://www.rio.nd.gov/sites/www/files/documents/PDFs/SIB/Publications/Vested%20Interest/sibvestedinterstoctober2020.pdf. 

China flu watch: second wave so much worse than first wave. But, deaths not maintaining pace. Tracked here. More later. Link here.  

Covid-19 cuts greenhouse emissions by 100%! Not. LOL. The surge in greenhouse gases sustained despite global lockdowns. Link here. 

Warren Buffett: previously reported. Now Motley Fool reports that Warren Buffett has fallen in love with his own stock. 

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

Sports: Dallas Cowboys showing life. Everyone now talking about Dallas going to the Super Bowl. LOL. 

Abu Dhabi: I saw this story; no interest in it, but readers (all three of them) sent me the link so I felt pushed to post it. Abu Dhabi plans to invest $122 billion over five years in oil spending to boost output. Link here. My reply, not ready for prime time:

$122 billion over five years =

$24,400,000,000 / year =

 

Current cap: 2.6 million bopd (OPEC-imposed cap)
Current capacity: 4.0 million bopd

Goal: increase capacity to 5.0 million bopd

Assuming the $24.4 billion/year is for only "new oil" --

Then

$24.4 billion / 365 million bbls = $66.85 / bbl (if the $122 billion is budgeted only for new oil)

I assume the $122 billion will be used for old oil and new oil.

If $122 billion is used for ALL oil, then

365 x 5 x 5 million bopd = 9,125 million or about 9.125 billion bbls of oil

$122 billion / 9.125 billion = $13/bbl

I'm sure there are several ways to do the math, but if $122 billion allocated for:

• only new oil: then about $70/bbl required for that new oil;
  
• all oil, current and new: then about $13/bbl required.

Somewhere between $13 and $70 is probably the "real" number, about where we are now, at $40 - $50/bbl. 

It appears to be a lot of the Red Queen on the treadmill. 

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Corky's Cousin Piggy Has Come To Visit

Corky has not been seen for about three weeks now. Sophia says Corky is still visiting her parents in Chicago.

Over the weekend, one of Corky's cousins, Piggy, arrived at Sophia's house to see Corky. Apparently Piggy was not aware that her cousin was traveling. That's fine. Sophia says Piggy will stay for the holidays. Too dangerous to travel, now, with all those people standing in line to buy honey-baked hams.