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Oil, Guns & Money


All that you need to know about oil, guns, money, war and peace...


The Future of Gasoline Futures

The Wall Street Journal reports that "low inventories and the rising number of refinery outages" are stoking fears of a "summer supply crunch" and justify "futures prices in excess of $2 a gallon."

  • Analysts say refineries have enough time to rebuild inventories before Memorial Day, the unofficial start of summer.
  • They also say that the "wild card" will be imports.
  • Yesterday, the May reformulated-gasoline blendstock futures contract on the New York Mercantile Exchange climbed to an eight-month high on news of trouble at several U.S. refineries before settling at $2.1918, up 3.31 cents.
  • That helped boost front-month crude to $63.85 a barrel.
  • Since the end of January, gasoline futures have gone up 60% as stockpiles have gone down by more than 27 million barrels-about three times their seasonal rate of decline.
  • Demand is running at a record 9.5 million barrels a day, which seems like a perfect time to find out that inventories have never been this low relative to demand.
  • But, Doug MacIntyre, an analyst at the Energy Information Administration (the Department of Energy's statistics and analysis arm, says: "It's too early to panic."
  • He also says that inventories need to reach 214 million barrels by the end of May to give refiners a cushion against supply snags, but it "depends on when imports start increasing again."

Summer's Almost Here! Or, It's Coming in the Near Future...

  • So, do we have any reason to believe that exports won't ramp up to help us ease into a nice comfort level by summertime?
  • Sure! Some of our best friends are the ones pulling the strings:

    Our good buddy Mahmoud, giving us the (wrong) finger

    Hugo Chavez getting advice on how to help the U.S. have a pleasant summer

    Indonesian President Susilo Bambang Yudhoyono waving bye-bye to U.S. oil inventories

  • Wait-Indonesia? They don't hate us.
  • Indonesia is the land of the once-in-a-lifetime honeymoon, isn't it?

  • Actually, it is.
  • It's also the land of this:

The Future of Oil and How it Pertains to Our Future

In an article titled "Eating Fossil Fuels," geologist Dale Allen Pfeiffer points out that approximately 10 calories of fossil fuels are required to produce one calorie of food. Why?

  • Pesticides are made from oil.
  • Commercial fertilizers are made from ammonia, which is made from natural gas.
  • Farm machinery is built and powered by oil.
  • Things like refrigerators are made in oil-powered factories, shipped via oil-powered trucks, and run on electricity, which is made by burning natural gas or coal.
  • But what about alternatives, like nuclear energy? That should reduce our dependence on oil.
  • A quaint idea, but nuclear power requires uranium, which is discovered, extracted, and transported using oil-powered machinery.
  • Even your computer required ten times its weight in fossil fuels to manufacture it.
  • Thus, once oil becomes completely unaffordable, computers will become completely unaffordable, meaning it's only a matter of time before we're back to this:

The Future of Ancient Inventions

So, the Chinese invented the abacus. But they also invented gunpowder. The Arabs invented math. And they happen to use quite a bit of gunpowder these days. Heck, so does the US, as it takes on everyone else's gunpowder with its own gunpowder. Defense contractors are doing quite nicely, thanks to America's use of gunpowder around the world these days.

  • Lockheed Martin (LMT), which derives 95.8% of its revenues from defense:

  • Raytheon (RTN), which derives 92.7% of its revenues from defense:

  • General Dynamics (GD), which derives a relatively scant 78.2% of its revenues from defense:

  • War is good business.
  • Peace isn't.
  • The Nation of Peace Flag-stitched with "peace" in 37 languages-from a tiny outfit called Syracuse Cultural Workers, goes for a paltry $48.
  • Slightly less than the $120 million (as of 2006) that Lockheed Martin charges the U.S. Air Force for its F-22 Raptor, a fifth-generation stealth fighter.

    A $48 "Nation of Peace" flag

    $240 million worth of Lockheed Martin whoop-ass

Michael Moore's Economic Future

Yes, the big defense contractors are profiting on a grand scale-something that really sticks in the craw of left-leaning filmmaker/author/eater Michael Moore.

  • Moore once said that Halliburton (HAL) was run by a bunch of "thugs," and suggested that for every American killed in the Iraq war, Halliburton should "slay one mid-level executive."
  • There have been 3,296 U.S. soldiers killed in Iraq since the war began, as well as 707 civilian deaths, for a total of 4,003 dead.
  • Halliburton has 106,000 employees.
  • Killing 4,003 of them would still leave the company with a workforce of 101,997.
  • Moore not only dislikes Halliburton and others in the defense industry, he doesn't seem to like the stock market, either. In his book "Stupid White Men" he wrote "I don't own a single share of stock."
  • Oh?
  • Peter Schweitzer, a former member of the Ultraterrorism Study Group at the U.S. government's Sandia National Laboratory, and currently a research fellow at the Hoover Institution, says Moore doesn't quite walk the walk.
  • According to IRS filings, Moore owned shares of Halliburton, which he sold for a 15% profit.
  • He also had investments in Honeywell, Boeing and Loral.
  • As for the oil companies that he said "deplete irreplaceable fossil fuels in the name of profit" in his book "Dude, Where's My Country?" (Sunoco, Noble Energy, Schlumberger, Williams Companies, Transocean Sedco Forex, and Anadarko), Moore saw fit to include them in his portfolio…in the name of profit, apparently.
  • Moore's upcoming film "Sicko" takes on drug companies and HMO's.
  • According to Schweitzer, over the past five years, Moore has "taken on" positions in Pfizer, Merck, Genzyme, Elan PLC, Eli Lilly, Becton Dickinson and Boston Scientific.
  • Looks like there'll be a nice retirement in Michael Moore's future.
  • Maybe he'd like a swanky place in good ol' Indonesia.

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