Hello Mr. Gopher-
I guess if push comes to shove and I have to take one, if asked "Smart Guys" or “Smart Alecs?”, I prefer the latter. Early on when I fashioned myself a really smart trader, I had a board meeting with a bunch of guys I had formed a partnership with in Chicago. At a break in our meeting, one of the larger investors in the fund sent his son to speak to me. The son said to me, “I think it is important that you understand that we do not hold levity at a premium.” I wish I had the stones at that point to say, “Too bad, because I hold levity at a very high premium!” The partnership, needless to say was over in a year.
You know no matter how bad things are they can always get worse or somebody has it worse than we do at any moment of any day. My friend Doug used to remind me of this occasionally and I remember hearing a story from my buddy Scott about a gal that did a stint in Uzbekistan telling how she used to have to stick her nose in to smell the chicken hanging in the market. If she did not vomit, then she could take it home and boil it for hours and maybe not get sick from eating it. She apparently lived on eggs and beer the entire time she was there. For years now when things don’t go as planned, I will frequently mutter to myself, “hey at least you are not eating bad chicken in Uzbekistan.”
My friend Rick wrote the following…
The BP spill is certainly a horrible thing, but if you pay attention to the media you would think the entire gulf is dead forever. As a young boy, I remember a time I was in a friend’s pool and was having a great time, but had to pee. Long story short, I let her rip. Continued to play in the pee-water, justifying my act by figuring the ratio of pee to water was harmless. Is the ratio of oil to the gulf the same as my pee to that pool? Or more like a mouse peeing in lake Tahoe? Would be interesting to know.
Rick knows I could never leave this alone and quietly preys on me knowing that I will have to respond…knowing I will get nasty responses. For this I again welcome you to the club of those I have offended. The numbers grow daily.
Being more juvenile in my thinking and far more disgusting by nature, I was instantly reminded of the theme song from the movie “Jaws” playing during the pool panic scene in the movie “Caddie Shack” as the Baby Ruth bar is slowly discovered floating on the surface of the water… As disgusting as this oil slick is, Rick, I thought it was a more appropriate parallel. I did a little looking and here is the quick math:
The Gulf of Mexico contains 643,000,000,000,000,000 gallons of water.
· 2,434,000 cubic kilometers of water (6.43 * 1017 or 643 quadrillion gallons).
Worst case, there are 5,040,000 gallons of oil spewing into the Gulf every day.
· Simmons (the worst) estimate of spillage is 120,000 bbls per day * 42 gal =5,400,000 g/day
The volume of the Caddy Shack pool is ~ 90,000 gallons.
· 30’ X 80’ with an average depth of 5’*7.5 = 90,000
The average fecal product is 0.16 gallons
· That is disgusting, look it up yourself.
Oil spilling per day worst case | 5,040,000 |
Deepwater Horizon oil rig fire | 4/21/2010 |
Today | 6/24/2010 |
Total days spilling | 64 |
Total worst case spill to date | 324,718,558 |
|
|
643 quadrillion gallons | 643,000,000,000,000,000 |
Spill volume/Gulf Volume | 0.00000005050% |
Average "Baby Ruth" volume | 0.16 |
Public Pool volume | 90,000 |
“Baby Ruth” Volume/Pool Volume | 0.00018% |
|
|
Floater disaster / Gulf Spill | 3,520 |
Gulf Spill / Floater disaster | 0.028% |
The Floater disaster in a public pool is on the order of 3500 times worse than the oil spill in the Gulf as of today. But the pool only affects people.
Obama’s strong-arm position has affected British pensioners, who own 40% of BP, as well as American pension funds that own 39%. In other words, the economic damage of BP goes far beyond the Gulf. The damage is spreading to pensions, pensioners, and portfolios all around the world. ~ June 17, the UK’s Daily Mail
This is a disaster that hurts the ecosystem and industry in the Gulf. Sequestering everyone elses’ savings, retirement and pensions exacerbates the damage. Halting exploration for oil, means higher oil prices which also hurts everyone else. Pensioners paying for laid off oil workers because of the Administration imposes a drilling moratorium is insane. This really sucks. Further, as opposed to the poor schlep that gets whacked in his pension fund. If you really, really suck so bad that you are “too big to fail”, the US Government will give you ~$100 bln so you can suck some more. And, man do these guys suck. I’d rather be lucky than smart and thank you for that stop at $36.
|
| BP Stock Value | BP Stock Value | Lost |
Bail out funds | 31-Mar | 23-Jun | Value | |
$ 30,900,000,000 | JP MORGAN CHASE | $ 51,114,022,325 | $ 26,573,559,530 | ($24,540,462,795) |
$ 55,000,000,000 | BANK OF AMERICA CORPORATION | $ 793,583,974 | $ 412,574,672 | ($381,009,303) |
$ 32,100,000,000 | MORGAN STANLEY | $ 640,602,304 | $ 333,041,359 | ($307,560,945) |
$ 10,000,000,000 | WELLS FARGO & COMPANY | $ 384,053,535 | $ 199,664,769 | ($184,388,766) |
|
|
|
| ($25,413,421,808) |
Right now, there is still liquidity but unemployment, housing and debt have not been fixed. Final demand is not picking up. 94% of home financing is now being done by the Feds. Banks are not lending and not really being asked to as capital formation (demand) is low. Suspending marked to market accounting allowed the Feds to stall any real tough decisions, but the “smart guys” are running out of dance moves.
He’s a cute little fellah, hope he doesn’t grow up to be a Big Mean BEAR.
I can’t wait until the US bankers fly here first class to come and by me lunch at a nice restaurant with the money they borrowed from the Fed, (who borrowed it from the taxpayers) and then loaned it right back to these “smart guys” again, so they could then lose it in a bad BP trade. But, then the President, drove the stock price down 48% in my 401k, decided to demand that they cancel the BP dividend I was hoping for so, he could tell the newly unemployed offshore oil drillers that he would “take care of them” when he imposed the drilling moratorium, which has stopped the price of oil from going down and made the price of gasoline far higher for the driving vacation I planned through the Rockies in a couple of weeks.
On second thought, you know, I think I might just be “busy” next time a US Banker asks to buy me lunch. Kinda feels like I might somehow beborrowing money from my kids, even if he does pay for lunch…
When they run out of dance moves and the music fades…While banks all over the world were imploding and some $50 trillion vanished inglobal stock markets, the derivatives market grew by an estimated 65 percent, according the Bank for International Settlements. BIS convenes the world's 57 most powerful central bankers in Basel, Switzerland, for periodic secret meetings. Occasionally, they issue a cry of alarm. This time, derivatives had soared from $414.8 trillion at the end of 2006 to $683.7 trillion in mid-2008 - 18 months' time.
The derivatives market is now estimated at $700 trillion (notional, or face, value, not market value). The world's gross domestic product in 2009: $69.8 trillion; America's, $14.2 trillion. The total market cap of all major global stock markets? A mere $30 trillion. And the total amount of dollar bills in circulation, most of them abroad: $830 billion (not trillion). One of the Middle East's most powerful bankers conceded recently that even after listening to experts explain the drill, he still does not understand derivatives and therefore doesn't trust them and won't have anything to do with them. And when that weapon of mass destruction explodes, he explained, "Our bank's customers, from all over the world, will be saved from the disaster." Washington Times, 10-May.
Smart guys… can’t live with ‘em. Shakespeare wanted to kill all the lawyers…just food for thought. Perhaps we should mandate low SAT scores for all bank executives and any that make decisions. Then hire them for similar wages as public school teachers, who also score very low on SAT’s. Only allow them to work 9 months out of the year but give them tenure so they don’t care about making money. Then they can just go back to the age old business of rippin’ off granny at 0.5% in her passbook to loan it back to her grandchildren at 25% on their credit card. Don’t need big brains for this, never did.
"I am for a government rigorously frugal and simple, applying all the possible savings of the public revenue to the discharge of the national debt; and not for a multiplication of officers and salaries merely to make partisans."
-Thomas Jefferson…
Thanks for the quote Stephen, I too “wish this guy was running for office.”
All the best,
Leon
P.S. Though I don’t actually own (nor would I advocate owning any) BP stock, all hyperbole aside, I will be out of touch for the month of July and I arrive into Denver on July 1!
No comments:
Post a Comment