Michael Fitzsimmons

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    • Black Gold or Yellow Gold?
      Oh doctor!! Save the Republic indeed. Actually, I have often thought it is high time the 50 states (or, as one here has said 52 (add Israel and Iraq) use band together and effect state's rights to call a Constitutional Convention. I wrote something awhile back on this to honor John Adams after the excellent HBO series on his life and deeds:

      thefitzman.blogspot.co...
      Jun 09 20:01 pm |Rating: 0 0 |Link to Comment |View article
    • Black Gold or Yellow Gold?
      icandoitdon: i was thinking about your comments while changing the oil in my truck. i couldn't get it off my mind. what better way to sum up the failure of the US/Israeli foreign policy but to note that, in your words, two different countries as Israel and Iraq would end up as the "51st and 52nd states" from a bugetary perspective! the US is funding both sides of a completely disfunctional objective!

      misschinagirl: you said "The idea that companies will cut production in response to a windfall profits tax is not necessarily true. A company's responsibility to shareholders is not to increase profit margins -- it is to maximize total profit." which i suppose i agree with. what i said was that they would cut exploration and production *budgets* (which the CEO's have said), which would, in my opinion, which would then lead to a cut in production. they are not necessarily the same thing. that said, i agree they will maximize profits, which in my mind maximizes margins (i.e. they will continue to pump the cheap oil where they already have the infrastructure built, but hold off on the multi-billions dollar E&P projects until the government comes back around - or takes them over! :O
      Jun 09 14:36 pm |Rating: 0 0 |Link to Comment |View article
    • Black Gold or Yellow Gold?
      IraqVet: you call my comments on Arabs/Israeli "inaccurate"... can you plz be more specific? which comment and why? on iraq, were they not forced to defend themselve? again, if someone took over Mexico, threaten to nuclear bomb the US, wouldn't the US in that case be pretty stupid not to arm itself with nukes if it didn't have them? this is simply common sense. i mean the whole reason the US had the nuclear bomb first was because it was in a race with germany and russia to develop it to protect itself. next, when did i put a dollar amount on iraqi lives? never. are you confusing someone else's responses with mine? if u are talking about icandoitdon's comment, i think it is very refreshing to break down how much US dollar's have been thrown at Iraq and what do we have to show for it? not a damn thing (but the defense dept and defense companies sure have had a time eh?). wrt to sticking what i know, you still have said specifically what i said that was seemingly so ignorant to you. please, be specific. wrt my support for obama, what is my alternative?? another 4 years of failed bush policy and more tax breaks for bill gates and warren buffet? please, give me a break.

      hello1: if you are speaking about my statement that the oil companies have "lawful responsibility" to their shareholders, this is indeed the case, and indeed exactly what the oil companies themselves had said if congress imposes windfall profits taxes: they will pull in their exploration and production budgets to keep their margins in tact (i.e. to keep share price from falling). this means less oil. so, you say it lacks reasoning, but that is exactly what the CEO's of the oil majors are saying, and, as i shareholders in these companies, that is exactly what i want to hear!

      there is no collusion. the futures market is setting the price of oil and they see:

      1) increasing demand from china, russia, india, the middle east
      2) production decreasing last year from XOM, COP, and CVX
      3) nationalitzation of oil in venezuela, russia, and soon brazil
      4) cheap, plentiful easy to refine sweet crude production dropping
      5) digging tar sands and saudi finally increasing heavy crude production
      6) large depletion rates in mexico, north sea, prudoe bay, and russian oil production decline after years of growth

      how in the world should oil prices go DOWN with all of the above taking place?
      Jun 09 07:46 am |Rating: 0 0 |Link to Comment |View article
    • Black Gold or Yellow Gold?
      Thanks again for all the great comments.

      philips: that is exactly what i have been telling the "plenty of oil out there" proponents: why the heck would saudi and the oil majors be processing heavy crude, and in the case of the tar sands, loading tar into huge trucks, transporting it to a refinery where they basically boil the oil out if there was such plentiful easy to access oil as these guys seem to believe? it doesn't pass the sanity test.

      TedSpick: a cheap shot is only cheap if it is untrue. you can back bush all you want, but since we are on an investment website, here are some facts:

      1) bush has grown the size of the US government to 30% of GDP
      2) bush has grown the US deficit to the largest in history
      3) bush's tax and spend policies have led to the dollar's 50% devaluation
      4) after inflation and dollar's devaluation, REAL returns in the S&P are negative for his entire term (!)
      5) oil has gone up 6x during his administration

      these are facts, not cheap shots.

      pursley: i very much take acception to, and RESENT, being called a Neo-Nazis! what i tried to do was give an even handed objective over-view of what US/Israeli policy has led to: bad news for both the US and Israel. was Yitzhak Rabin a neo-Nazi? no, he was a Jew who won the Nobel Peace Prize. i'll debate you on the issue, but respond on a point by point basis, not with name calling. up until now we've had a fairly intellectual back-n-forth. i've lost respect for you with this latest post.

      TAS: yeah, Jimmy Carter was a real bad guy... he wanted us to get off foreign oil and into solar, wind, and nuclear. in retrospect, he was DEAD RIGHT. all that's happened since then is an end to that "political" energy crisis and a return to your idiotic ways of oil dependence. so, now we spend $700 billion a year out of the country for oil, and our US currency is being devalued. if Obama will offer me and the country the policies of Jimmy Carter with respect to energy, perhaps there is hope after all. we've seen what 8 years of Bush led "conservative republicanism" has gotten us: a much, much, much weaker country on every level: domestic policy, foreign policy, and economic policy. they are not "conservatives&qu... they are the most radical administration in the history of the US. and, despite all the bullshit about republicans being good for "the markets", well, check out the *real* returns of the S&P during their "reign", NEGATIVE. and he'll leave with the worst to come....



      Jun 09 00:12 am |Rating: 0 0 |Link to Comment |View article
    • Oil Will Peak at $150-200 - Barron's Interview
      don't see oil at $75 ever again unless the US enters a deep-deep recession or depression. any lack of demand in the US will be quickly sucked dry in china, india, russia, and the middle east. we are entering the last oil crisis - a crisis unlike the political energy crisis of the 1970's, this crisis is a worldwide supply/demand crisis. the futures contracts will not allow the price to fall to $75 as people the world over will be glad to secure delivery at $80, $85, $90, etc. etc. you get the picture.
      Jun 08 22:44 pm |Rating: 0 0 |Link to Comment |View article
    • Rising Crude Prices: Not Necessarily Good for Oil Stocks
      Don't let the action in oil stocks on Friday scare you out of them! I don't care what anyone says, with oil north of $137 i want to own companies that produce millions of barrels of it a day (XOM, COP, CVX). i remember a wise man in san diego told me "the markets always do what they have to do to insure the fewest number of people make money". read that again. anyhow, point is, the oil stocks sometimes "correct" violently to scare out those johnny-come-latelys and weak of heart stockholders. earlier this year (just like last year) stocks like conoco traded down sharply to the low-70's. now, after all the turmoil, it's at $92. stock prices will in the long run follow earnings, and earnings are going to skyrocket at most energy companies. that said, i don't like pure refining plays as surely their margins will be squeezed bigtime.
      Jun 08 22:41 pm |Rating: 0 0 |Link to Comment |View article
    • Black Gold or Yellow Gold?
      ok, as bill maher would say "it's time to get real":

      optionsgirl: i've changed my mind, and will get in the middle of the Israeli/Arab debate. these things need to be said in spite of the hellstorm that will be dumped on me for saying so:

      i was less than honest in my first reply to you. it was indeed sarcism and a dig at US/Israeli policy. i believe that policy has been a complete disaster - not only to the US, but to Israel as well. let me explain:

      it is no big secret that Israeli lobbyists were pushing hard for war in Iraq (like they are now for war in Iran). they also have refused to acknowledge the right of a Palestinian state. so, what's the result of these policies?

      - massive backlash in the arab world against the US and Israel
      - precipitated the first war i can remember that Israel did not walk away the clear winner
      - made Iraq a beehive of "terrorism"
      - deficit US spending leading to a huge fall in the US dollar
      - fall of US prestige in the world (not to mention a reputation for torture)

      but, most importantly, US/Israeli policy has resulted in these two items:

      - strengthened the arab oil producers by helping to raise the price of oil thus generating arab wealth beyond all comprehension
      - forced Iran to develop a nuclear policy

      explanation for these two views:

      when the US went into Iraq in a manufactured war where Rumsfeld actually threatened to use nuclear weapons (!), it took millions of barrels of oil off the markets for years. at the same time developing country oil demand went up. the price of oil popped. as the Iraqi conflict raged on year after year, a geopolitical price premium was tacked onto oil, and has remained ingrained in the price. oil went higher again. Arab oil producers are becoming ungodly wealthy. this would have happened sooner or later due to worldwide supply/demand fundamentals, but US/Israeli policy accelerated the price movement to the upside. look as friday's over $10 move in oil - all based on an Israeli official saying a strike against Iran was "inevitable"... even more wealth to Arabs. good for Israel??

      on the second point, Iran has watched its neighbor Iraq be invaded, lose their sovereigncy not to mention hundreds of thousands of its citizens dead. just to make a point, what would you expect US response to be if a foreign country invaded say Mexico, called the US a member of the "axis of evil" and possesed nuclear weapons and threatened to use them? wouldn't US policy in that scenario be extremenly foolish not to develop nuclear technology to protect itself? ok then, why is it different for Iran? if i were them, i would be arming myself too! good for Israel??

      see, the US/Israeli policy has brought on the exact scenario that they are now complaining about! it is a failed policy: the Arabs are richer and want nuclear weapons to protect themselves from US/Israeli policy.

      now, the Russians made a great proposal to solve the Iranian situation - international inspections, Russian delivery of the fuel, diplomacy etc. what was the response by the Israeli lobby and the US? no negotiations along those lines. Iran proceeded accordingly.

      speaking of Russia, how long do you think Russia and China are going to stand by and watch the US/Israel connection take over middle eastern oil that they themselves so badly need (at least in China's case)?

      now, Israeli had a leader of vision who could see through all this stuff, and was backed by the majority of its people. he, in an event so remininscient of JFK, was assassinated. what was the result? more war, death, and still no Isreali security.

      the thing i don't understand about Israeli policy is this: if the argument Israel made about its right to exist as their own country was correct, then why does that same argument not hold true for the Palestinians many of which were evicted from the land that is now Israel? it just doesn't make sense to me. it is not logical. and it will simply not lead to peace or Israeli security. i believe Yitzhak Rabin understood this.

      violence only leads to more violence. the way forward, like Obama has said many times, is via diplomatic means. if Israel or the US bombs Iran, and if Iran responds by shutting down the straits of Hormuz, which most intelligence reports say they are capable of doing, 25% of the world's oil supply goes off the market in an instant. what do you think the price of oil will do? what do you think the result of that price and supply disruption will be to a US economy that is already on the brink of a recession? to the world's economy?

      as i have said many times, it won't matter how many US dollars a person holds in their account(s) if the basics of food and protection are gone. this could easily happen if a economic depression hits the US as a result of Israeli or US bombing of Iran. we go into economic chaos if the price of oil goes to $300/barrel, or worse yet, cannot be obtained in quantity at any price. that is where current US/Israeli policy is leading us, IMHO.

      thus, the sarcastic remark.

      leh: thanks and great comments!
      Jun 08 15:07 pm |Rating: 0 0 |Link to Comment |View article
    • Black Gold or Yellow Gold?
      oop! i screwed up: energy policy link is here:

      thefitzman.blogspot.co...
      Jun 08 12:13 pm |Rating: 0 0 |Link to Comment |View article
    • Black Gold or Yellow Gold?
      Thanks for your comments, as usual i like it to be two-way:

      optionsgirl: i sincerely apologize if i offended anyone (jewish or arab). i know better than to get in the middle of that debate. that said, re-reading it, my wording could have been better! the point i was trying to make, and have made before when i praised Israel for their Project Better Place iniative on electric cars, is that some countries (unlike the US) are attempting to release themselves from oil dependency. please read my past energy policy posting where i am sure you will understand my view on this subject.

      CLH: at this point, i respectfully disagree that the gov should get out of the way. the challenge facing us in this energy crisis is so immense, we must have government leadership and support to pull it off. certainly the policies of the last few years have not been helpful, and have magnified both the urgency and the scope of what has to be accomplished.

      BMiki: i was unaware that Vanguard PM was closed, and that being the case i certainly should not be recommending it! thanks for the heads up!

      LordDarley: sorry for the gloom and doom. i don't like to be that way, but alas, i try to be a realist. i started my campaign about worldwide oil supply/demand when oil was at $55 and i was told i was an idiot, doomsdayer, numbskull, etc. etc. now it's at $135, and still no energy policy from the US government or much recognition at all from the US media that we are in a crisis that threatens our economy and national security. i cannot say today that the US is the best nation on the planet: we import 60% of our energy, have two undeclared "wars", our dollar has dropped over 50% since bush was in office, our fiscal deficit is out of control while we give tax breaks to the uber-wealthy. sorry, but in my opinion, the policies of the US government are so skewed, i think we'll have alot of trouble recovering from the hole we have dug (and continue to dig...).

      ALL: i continue to pound the table for Americans to get active, alert their political leaders, and support a sound, well-crafted, long-term, comprehensive energy policy:

      seekingalpha.com/artic...



      Jun 08 12:11 pm |Rating: 0 0 |Link to Comment |View article
    • Exxon's Hoard
      Of course the Saudis say there is plenty of oil - they never want to see the US get off oil and would love to see the country go down the tubes.

      If oil is so very plentiful, why then is Saudi building the most expensive industrial project in the history of the world to pump sea water into the ground and to get the hardest crude to process - heavy crude? If oil is so readily available, why are companies in Canada scooping up tar sands with huge trucks and then spending gobs of money to process it? Debunking peak oil, when oil was up $10 in 2 days and is now pushing $140/barrel is missing the point: worldwide oil supply simply is not keeping up with worldwide oil demand. The futures markets sets the price, and those guys can see a year or two out. So can I.
      Jun 07 08:12 am |Rating: 0 0 |Link to Comment |View article
    • Smells Good: The Case for Natural Gas
      The 50% devaluation of the US dollar is just in the last 8 years, most of the damage done when rep held both houses of Congress and of course our illustrious presidency. Here's a chart of just the last 2 years:

      quotes.ino.com/chart/?...

      If you want to talk about socialism, what do you think of an administration that backs the Federal Reserve taking over a publicly traded investment firm (Bear Stearns) with tax-payer money? That said, I have to admit I probably would prefer the socialism of say Sweden, Finland, and Canada to what we have in the US today: a raping of the US treasury by the uber-wealthy while the middle class (what's left of it...) struggles to buy gas, food, and pay their car and house notes. You point to history and if you have some historical perspective yourself, you must be aware that country's fall from power when the majority ("middle class") can't make ends meet. That is the track the US is on at present.

      It's amazing to me the blindness virus that political ideology can cause people to conveniently ignore facts.

      Age is not the biggest factor in determining intelligence. If experience and history were factors, what can one say about Bush's second term? Apparently he learned nothing from the disastrous first 4 years.
      Jun 05 10:54 am |Rating: 0 0 |Link to Comment |View article
    • Energy, Inflation and the U.S. Dollar
      yuman: yes, what you say is correct. however, the rationale behind a "core" inflation number was dreamed up back when energy and food had short term fluctuations that the economists supposedly want to dampen out. that is an outdated way of looking at inflation now that both energy and food have been on multi-year sustained uptrends. i totally agree with Barry Ritholtz: the government is reporting "inflation without inflation". my suggestion is we go with a straight inflation number that includes energy and food. with the monetary woes the US has with its twin deficits and currency crisis, the least we can do is face the real facts. as with the energy crisis, as long as we stay in denial, the more dire the consequences when reality hits us in the face.
      Jun 05 10:43 am |Rating: 0 0 |Link to Comment |View article
    • Energy, Inflation and the U.S. Dollar
      sedek: i agree the US dollar has a role in the price of oil. however, the US dollar has dropped roughly 50% while the price of oil has increased 6x. so, not all of oil's price increase can be explained away by the dollar. i still believe, the two main reasons the US dollar is weak are:

      1) a ballooned government and huge fiscal deficits
      2) $650 billion leaving the US every year for oil (trade deficits)

      these are now systemic US dollar issue. my belief, as i have said many times, is that the current administration's strategy for a strong dollar, which is mostly rhetoric, is doomed to failure in a worldwide market of savy investors. the only fix, in my opinion is:

      1) a comprehensive long-term well crafted energy policy like this one: thefitzman.blogspot.co...

      and

      2) fiscal discipline by our government, that is for instance, raising taxes on the uber-wealthy at a time of "war"

      those are the only two rational responses to the twin deficits. i believe the energy policy is the most important and urgent. otherwise, as we continue into a future where worldwide oil supply does not keep up with worldwide demand, oil will increase in price, and the US flow of capital out of the country will not only continue, but grow, and grow rapidly in my opinion. so far, the government is 0-2 on both these points, and we are seeing the effects in our currency, our stock and bond markets, and the devaluation of the US dollar. it all goes back to "oil denial" and, it will lead to a very drastic lowering of the standard of living for most Americans.

      wrt raising interest rates: the Fed can't do it. too much consumer debt. to do so meaningfully (enough to strengthen the US dollar and fight the real rate of inflation), would be to push rates up so high the consumer would roll over and we'd have a deep deep recession. that is why i maintain 1) and 2) above are our only hope. and, we should have gotten started on both 4 years ago (or earlier).

      as far as speculator's role in oil, sure there is! as there is in gold, wheat, corn, etc. etc. and has been ever since the beginning of US markets. it's funny how the "free market" guys (the same guys that just had the Fed take over Bear Stearns, a publicly traded firm....) are all for free markets as long as they work in their favor. the high price of oil is the BEST thing that could happen to us now - providing we get the hint and enact an energy policy. the smart money in the oil markets know that long term, there is a big supply/demand problem.
      Jun 04 12:28 pm |Rating: 0 0 |Link to Comment |View article
    • Energy, Inflation and the U.S. Dollar
      smoke: thanks, and you're exactly right - i should not have responded. however, the idiot remark was the first thing i read this morning while having my coffee. my irish temper flared before i knew what happened!
      Jun 04 11:16 am |Rating: 0 0 |Link to Comment |View article
    • Energy, Inflation and the U.S. Dollar
      aubie: you don't seem to understand - the bush administration has:

      - increased the size of the US government to 30% of GDP
      - spent like a drunken sailor and bankrupted the US (plus, we have nothing to show for it)
      - devalued YOUR currency 50%

      the socialist HAVE been in power, with the exception that all the US treasury money went to the *uber-wealthy socialites*. wake up man! look at the facts of what has been going - most of the real damage being done when the republicans had both house of congress as well!

      interesting how an article than advises buying GE can seem socialistic to you. more republican ideological blindness in the face of facts you'd rather not acknowledge. good luck sir!

      btw - a am a REAL conservative republican, not this new radical branch of the "conservative republicans" that grow government, rape the treasury, and fund undeclared and unconstitutional "wars".
      by the way, i didn't sink to calling you an "idiot", i debated with facts, which is less than what you did. good day sir.
      Jun 04 09:28 am |Rating: 0 0 |Link to Comment |View article

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