• Consumers And Volatile Oil Prices

Consumers across North America daily check the wildly fluctuating prices of gasoline at their favorite neighborhood stations. Magically, prices change at all pumps in unison. Just as strangely, pump prices have not dropped in step with the currently defeated price of crude.

Price of crude oil today floats around USD$35 per barrel, down severely from a high of over $147 only months ago. You don’t require a calculator to realize that the current price is now at approximately 24% of it’s high which is not reflected in your wallet’s hemorrhage as you fill-up. You drive off disillusioned and frustrated, but you feel less anxious than you did following your recent summer fill-ups during the oil speculation frenzy. You hear rationalizations like, “OPEC is contracting its output by 2.2 million barrels per day,” or you read, "... global demand is expected to shrink by about, …" well it doesn’t matter, you just know that you and millions of gasoline consumers are at the front line of this commodity’s implications on the future. What can you do? What will you do?

It would be easy to blame oil industry conspiracies for the wild ride of oil pricing. Reality is that stakeholders directly or indirectly connected to the industry are simply doing what is necessary to extract as much money as possible out of their respective positions. Each is being human. Expectations of high returns currently includes “hoarding.” At least this is the prevailing clairvoyance of astute speculative bets. Keep that one in mind.

To shatter more assumptions and agitate matters further, hoarding has exacerbated the impact of refinery output reduction. Refiners had curtailed operations, contemplating drops in demand. The resulting confusion ignited volatility in prices to frenetic levels. Such volatility is not constructive to the overall long-term health of the exploration and refining sectors of the industry. Uncertainty in oil prices is also not therapeutic to an ailing economy.

Crude reserves are bursting the capacities to contain them onshore to the point where storage availability has become scarce, and oil filled tankers are sitting afloat offshore, awaiting a more favorable price day. This is a calculated measure to apply pressure on the outcome of pricing speculation. This strategy expects a global economic recovery. Should that not occur, the tactic hopes that a depletion in refined oil might eventually bring back prices of $60 or even $70 per barrel. These are the price levels that many oil resource dependent economies require if they are to escape overwhelming deficits. How can a Middle East monarch possibly retain power over a semi-suppliant population, building palaces, ordering 400-foot yachts, and over-fitting Airbus A380s on $35 oil? Can’t do it. Something or someone has to give.

Here we are in the middle of a cold winter, yet consumer demand for oil continues to drop. Diligence with home thermostat settings has had a direct impact on consumption. “Travel” reduction has also cut a deep gouge into supplier assumptions. Overall reduction in consumption of all goods affects the price of oil negatively, and consumers should remain vigilant. We should all maintain our current frugal attitudes toward accumulation of all things not grown in soil. The speculative bets made against the consumer, may turn to bite the hands that placed them.

The OPEC cartel and other oil producing nations will continue to be conflicted. They are each competing for a piece of the consumer’s oil dollar. Since each barrel of oil finds its own independent path to market, the Saudi barrel will always seek a position on the delivery system ahead of the Venezuelan barrel, which will itself attempt end-runs on the Nigerian barrel coming across the ocean. Current prices have also macerated attitudes like those of Venezuelan Strongman and part-time Latin American hero Hugo Chavez, who is now soliciting help (read begging) from the major oil companies he not so long ago demonized and seized assets from. Evidently there is no persuasive Spanish translation of the adage about “burning bridges” he is familiar with.

The outlook on oil prices may be uncertain, however, there is one enduring certainty world markets can rely on, … the consumer will persist as the arbiter of good taste on conscientious consumption. The consumer will continue to command oil price trend direction. Should current tendencies persevere, and consumers stay the course, chance will be infinitely more accommodating to the reality of an economic recovery within the next eighteen months.

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• Is Obama Right To Ignore Bush Transgressions?

President Bush has cloaked his term in the White House with a singular distinction of secrecy that would give Richard Nixon a case of acute envy. President Elect Obama has just indicated that he does not want to be, “looking backwards.” Is this an appropriate deflection for an incoming administration?

The eight-year imperial Presidency that George W. Bush and Dick Cheney have enjoyed, has been one long sequence of questionable and unexplained, but massively expensive events. Taxpayers have been patient as they watched an administration mislead them into a war whose astronomical costs may never be audited, and through which much questionable siphoning of cash has been deftly executed. Bush and Cheney friends, along with their companies including Halliburton Co. were seen to be taking advantage of hundreds of thousands of contracts. Taxpayers were not surprised when Halliburton’s Chairman announced he was moving headquarters offshore to Dubai. The endless fomenting suspicions were not appeased, they were irritated. Repeatedly, questionable corporate ethics were given a pass.

Obscene pictures taken in a prison they had never heard of also confused Americans. They were further conflicted in how they should feel with the detention of prisoners in Guantanamo, held indefinitely without due process. The discomfort was not really for the prisoners, but was due to a certain malaise stirring in the knowledge that while laws provide us protection against imprisonment without at least having had the benefit of due process, the Administration had managed to somehow circumvent the rules. Who might be next?

America was provided detailed explanations on the extraction of information from extrajudicial prisoners, through a particularly aggressive method, and “waterboarding” joined the English language. We have more recently wondered about the extent to which spying on our lives has actually occurred. Although we have moved through anxiety regarding terrorism, and then passed into annoyance on the invasion of our privacy, we are now slipping into a tunnel of suspicion that government attitude has shifted to an assumption that everyone is suspect until proven otherwise.

The Iraq war, the Iraqi reconstruction, and the countless available accesses to financial abuse and corruption, continue to make headlines. These reports do not exhaust our patience as much as they might have done prior to the current financial crisis overtaking our lives. The bombardment of bad news has to be prioritized. A $15 trillion debt trench has been dug by corporate and political mismanagement, with enabling help from very suspicious Congressional oversight.

Whatever Obama’s motives for not being emphatic or specific on digging out any wrong doing, the decision appears to be the right path for him to take, and his Presidency can be given a pass on this one. The problem is deep and wide, but it is not his. This conundrum is endemic across too many levels of the system from the White House to the Capitol, from the Pentagon to Wall Street, and from Iraq to Dubai. Taxpayers will have to pressure their elected Congress and the hired bureaucracy to deal vigorously with those who have trampled on laws, if accordant evidence of wrongdoing surfaces. The current administration and legislature cannot be given a pass. The country does not need a witch hunt, however, taxpayer outrage deserves a relief valve and the American Democracy can withstand the heat.

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• Cell Phone Invasion Of Thought

There exists a space of about six feet in diameter around each of us that has long been considered our very personal and intimate domain. We become uncomfortable when someone invades that space uninvited, yet cell phones invade more than our personal space. They intrude on the moment.

Whether cell phones have become an addiction can be debated, however, what has become an incontrovertible event of daily life is the cell phone’s ability to vexingly override everything and anything that might be momentarily adventuring in the minds of hundreds of millions of us. Elevators, for example, bundle others into our small unconcealed air space, but these invaders don’t generally intrude on our cerebral deliberations and consciousness. Our personal spaces are intruded on unusually when we are in motion. Thought, on the other hand, is invaded by untimely surprises of cell phone rings. Sudden appearance of a call, forces a diversion, even a dismissal, of whatever is preoccupying our minds in the moment.

When in a conversation with an acquaintance or friend, and the person’s phone rings, their attention is instantly diverted. Even if they don’t automatically answer the call, they will check who is calling, then perhaps provide an accommodating gesture indicating the caller is less important in their lives. The gesture is not reassuring. Their glance returns to the phone, there is a hesitation, then the decision becomes final. Your discussion is to continue. The sequence of the moment has been broken. The discussion, intimate or business, received a decisive insinuation. Whether you were more important than the intruder, you might never know. A phone’s ring barged in on your fellow traveler’s thoughts, as well as your own. You can’t help but be irritated. All of us feel that irritation daily.

The rudeness, or selfish behavior that intrudes on our lives by those who must share loud cell phone conversations with crowds, are not the most disturbing trend impacting our cultures. The most troubling reality is the cell phone’s random intrusion willingly allowed into our minds, striking rudely into the heart of our thinking, deliberating, pondering, creating, considering, or reading, and writing. We accede to the most invasive trespassing when we are alone, yet that is when we do much of our more important thinking. It would treat mankind to preferential treatment and would nurture humanity’s advancement if we implored our cell phones to provide us some long disconnections from the ring. Our common consciousness would be grateful.

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• Democrat Responsibility For The Economic Crisis

On their road to domination of Congress and The White House, the Democrats clamorously and successfully, accused the Republicans of engineering the current economic crisis gripping the nation. Today Democrats control the country. Now what?

As dust settles on reality, the evidence of responsibility now points backwards in large degree to the Democrats, not just Republicans. At least to a much greater degree than the MSM ever pretended. The following piece of video shows segments that cannot be repudiated. Democrats were the biggest beneficiaries of Fannie Mae and Freddie Mac generosity, yet their leaders were at the frontlines of defense for those who were at the heart of the mortgage financing bubble. Democrats not only prevented oversight and restraint, they enthusiastically applauded the abuse.

One can put spin in the retelling of most events, however, the high culpability level of Democrats for the financial disaster that has been inflicted on the Nation is difficult to deny. For example, the words of the bombastic Barney Frank, the Harvard educated Democratic Attorney from Newton, Massachusetts, cannot be spun, twisted or camouflaged. As you watch the video on the following link, you might wonder why no one has asked Barney Frank or the Democrats to explain his unambiguously stated position. Don't get too hung up on the fact that the video is from Fox News archives. They didn't force Frank to fabricate the Democratic position.
YouTube Fox News Video - Barney Frank & Co.

Apologists for Mr. Frank, including the NYT, steadfastly refuse to assign him responsibility for a questionable lack of interest or awareness in organizations under his aegis, while they suggest he is the smartest guy in Congress, and that he has been bold enough to “take on” Paulson. Has everyone forgotten that Mr. Frank is Chairman of The House Financial Services Committee? I rather think that this is more substantiation of his capacity to outwit and out-shout his detractors. And he does it with such compassion.

Mr. Frank has proven the most gifted Congressional deflector. He very successfully diverted attention away from his and Ms. Pelosi’s negligence, and from the role of Democratic policies and tendencies in the creation of a social experiment in utopia where everyone with or without income would own a home. Of all people to whom Barak Obama now owes infinite gratitude for his Presidency, Barney Frank is at the top of that list. Mr. Frank should have a bedroom in the Obama White House named after him. Well, … at least for four years.

Republicans can take some heat for not having been more vocal, however, leadership out of the current economic quagmire is now squarely in the hands of those who fuelled the fire that destroyed value across all markets burning trillions of dollars. We will be witnessing Mr. Frank and his associates parade the SEC through an artificial inquisition, knowing nothing will come of the performance. Questions will be asked and answered with equally tempered determination, resulting in nothing. Retaliations will be minimal, nor will they serve the public good, and restitutions will be impossible. While Democrats have won control of the nation, their motives and their capacities to steer America out of the recession with diligent concern for taxpayer interests, are in serious doubt and will continue to remain so.

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• Myths Of Debt To Be Corrected For 2009

The year 2008 brought a rude awakening to a population enthralled by a bottomless availability of cash. Mesmerized into debt accumulation we now wonder how we could possibly have overdone it.

As we launch into a new year, it might bode well to be reminded of some of the myths we enjoyed so much these past two decades.

• Debt is your key to achieving the lifestyle you deserve.
This well-oiled refrain was repeated ad nauseum throughout the past quarter century, to the point where the affirmation morphed into an accepted assertion. I borrow, I spend, and therefore I am. The Fed, Congress and the White House have historically presented a united front to convince taxpayers that they should seize all opportunities to consume. It has been the patriotic duty of all citizens to consume impulsively and with abandon, taking absolute custody of the title Consumer.
• Spend yourself into economic recovery.
It appears that all media has bought into this myth. Abundance of noise from economists and pundits has been particularly effective for too long on this one. The economy needs you. Business needs you. There are bonuses to be paid out at the top that will trickle down and stimulate all corners of your economy. Your guilt will get you if you don’t spend everything you can borrow. Forget saving for a rainy day. Forget budgeting, and absolutely reject the concept of finding balance between funding your needs and setting aside money for your future unanticipated emergencies. You don’t want this recession to devolve into a depression, do you?
• The Debt you are drowning in is not your fault.
How could you possibly have known that buying your first home for $500,000 with nothing down and a variable rate mortgage would launch a perfect storm through your future, ravaging your state of mind?
• Wall Street, The Fed, and the World Bank know what they’re doing and they know best what is good for you.
This one requires little delineation here. Dissecting it might even be a little too depressing, and might dissipate the joy of a brand new year. We'll save it for a future article.
• Becoming highly leveraged is a right of passage into nether regions of society.
Leverage’s modern redefinition is imbued with notions of achievement beyond simple debt. It embodies an ultra-modern conversion of water to wine. Wall Street was able to stretch the boundaries of debt with the creation of derivatives, those unfathomable, little understood but outrageously leveraged vehicles that were so effective in creating billion dollar bonuses. With government advocacy, the banking industry distended debt to the extreme boundaries of leverage, inventing unfathomably creative debt instruments hiding behind ambiguous terms such as "derivatives." The beauty of this myth rests in its apparent ability to have magically enchanted the top of the economic intellectual food-chain.
• You should not wait until tomorrow to acquire what you can get today through debt.
Instant gratification has become a firmly entrenched affliction. Capricious satisfaction of wants has transplanted patient and planned fulfillment of needs or considerations for the future. It is almost as if there has been a very deep shift across a broad swath of consciousness, and now the thrill of the chase no longer provides the joy it once did. Have indulgence and consumption become the voyage?

Intuitively we have all known for over a generation that we were living a great paradox. Lifestyles were better than ever, yet in the core of our beings, we all felt an unmistakable angst. Since the mid eighties, each one of us sensed that very conflicting dichotomy between what we were doing, and what we knew was right. We were over-borrowing ourselves into the highest standard of living known to any society in history. Political leadership cynically applauded.

2008 slapped us into acknowledging that our intuitions were right, and that long-term health of an economy requires savings and also requires investments. It has been years since it made any sense to leave money in a savings account to collect interest. Inflation deducted from the interest left a shrunk balance at year-end. Bernanke’s interest rate cut to a half percent, will have little impact on borrowers’ access to loans. Panic set-in, and attitude shift will be slow process. Congress and The Fed should revisit the government's interest rate policies. Taxpayers should be looking forward to making money on their "savings," … in the bank.

We are thinkers, inventors, creators, producers, nurturers, and spiritual beings, who can enjoy a material abundance we ourselves define and frame. We decide the nature and scope of our intellectual and spiritual sufficiency. Rather than giving in to external strafing of our decision making, it is high time each of us gave a little more room to our own individual Intuitive Knowers, abating the consequences of our overwhelming egos and intellects. Human satisfaction and progress should not be measured in GNP growth, or intoxicating accumulation of possessions. The voyage has become exhausting. It is time to sweep aside the myths. It is time for living with less anguish, and acquiescing to the truly profound joys life offers far from the sirens of debt.

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