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  • Grease my Palm with Big Oil

    Grease my Palm with Big Oil


    by Ben Stooge

    (Editor's Note: We have had readers who claim to be unable to tell which column is the parody and which is the original. We're pretty sure Ben Stooge's column is parody, but these days you never know.)

    Brainy types want to control and regulate the goo companies and tax them until they are ready to call it quits. Why subsidize with one hand and tax and regulate with the other? That's like the government buying a hooker for a congressman then making him wear a raincoat. What's the point?

    I've done such a good job revising the history of my bad financial advice that you actually believe I've done you a service. Today I'm going to defend the poor, maligned, beleaguered, and downtrodden US oil industry.

    Magical Pre-charged Chemical Battery


    Billions of batteries are buried underground. Can you believe it? All we have to do is dig them up. We don't even have to charge them. That's been done for us by the sun back when struthiomimus, hadrosaurs, and dimetrodon roamed the steamy permian jungles. Huge leafy plants turned the sun's energy into cellulose and other compounds. Then, over hundreds of millions of years, those compounds rotted into a stinking, gooey, black liquid that today run a hedge fund manager's $1.7 million Bugatti Veyron. That's a lot of pricey technology riding on dirty, old plant rot, isn't it? Time to think about a newer, cleaner, renewable form of energy?

    Nah, read on.

    This goo doesn't just run hedge fund managers' cars. It runs your Toyota Camry, too. In fact, if the goo suddenly vanished you'd be hitching an ox up to your Camry, if you had an ox. Otherwise, maybe you'd hitch up your mother-in-law. Same goes for the hedge fund manager's Bugatti, except if he's any good he's hedged the apocalypse that made the goo go away by buying an ox farm.

    The whole world depends not only on this goo but lots of goo cheap, especially the USA. If the USA ever has to pay market prices for the goo, it's entire economy will have to be drawn by oxen. People in the cities will freeze, starve, riot. The US military will invade Canada. To prevent that happening, the US military invades Iraq instead. Even Alan Greenspan said so for a day last week. He took it back the next day.

    Wars to keep the goo cheap are a multi-trillion dollar subsidy to the goo industry at taxpayer expense, not to mention thousands of dead and wounded solders and the environment. But that's what free markets are all about. Also, some say hundreds of thousands of Iraqis died. Who cares about them? Not me, and neither should you. You should buy goo company stocks because with all that government subsidy in money and lives, you can make fat profits, too.

    I know you're wondering, what is this fabulous goo that I use in my car and can make me so much money? Hang onto your balls. I'm getting to that.

    This government subsidized goo industry is concentrated into a handful of really huge goo companies, which by coincidence are represented by high ranking members of the US government that gives them free access to public lands to rip up forests and jungles to extract the goo, to the sea where they suck it out of the ground and pollute miles below on the bottom of the ocean, and to burning deserts where the US government has installed friendly dictators to let the US goo companies operate and shoot civilians. Sometimes these dictators don't stay friendly and have to be taken out via "preemptive war." That's dictators for you.

    These goo companies ship brave men and women to these nasty spots where they are confronted by the local inhabitants who try to defend their land and rights, much as you as a US citizen might if the tables turned. These citizens have bombs sort of like the US but cannot afford an air force, thus they are called "terrorists."

    Once these goo companies have stolen the goo at gunpoint, whatever they don't spill into the ocean on their way to North America they sell here at a profit. But do they get a parade? No! Long haired eco freaks in Birkenstocks, rich lobbyists for the alternative energy cartels, bearded hand-wringing lefty academics, and other ingrates, losers, and troublemakers give these noble goo companies a hard time. Can you believe it? All the goo companies want to do is turn the goopy goo into the sloshing light liquid that you pour into your Camry so you can drive to work. These boneheads, and that includes the free press in the US that reports bad things about these fine goo companies incessantly, fight to keep this goo goopy and hold down profits.

    Liar's Profits

    After all the government subsidies, the free access to land, the deaths and injuries and pollution for which the goo companies are not accountable, the profits on a either a percentage-of-sales basis or a percentage-of-equity basis are less than the profits of other government subsidized industries, such as the banking and real estate industries. But no one complains about them. It's not fair.

    After all that, the political and brainy types want to control and regulate the goo companies and tax them until they are ready to call it quits. Why subsidize with one hand and tax and regulate with the other? That's like the government buying a hooker for a congressman then making him wear a raincoat. What's the point?

    Who owns these goo companies? Not hedge fund managers and other rich guys but the same rocket scientists that bought asset-backed securities that funded sub-prime mortgages and stocks in dot coms during the tech stock bubble: the pension funds of cops and pilots and taxi drivers. Without the dividends these companies generate they'd all starve to death.

    It's Nice to be Nice. It's Mean to be Mean.

    The USA can't make it a day without America's goo companies. They are dependent on unreliable dictators installed by the US, relentlessly and cruelly attacked by the slanted media, and derided by pointy headed professors. USA without its brilliant and effective goo companies will collapse in a matter of hours. End of the world. Locusts. Raining frogs. Cats and dogs living together. Real wrath of God type stuff.

    But the good times will go on as long as we appreciate the goo companies by buying their stocks and not siding with the intellectuals and troublemakers. Maybe the goo companies won't pack up and leave and we can keep driving around in trucks with enormous tires and huge engines fueled with bargain-basement goo, that is if you don't count the $1 trillion subsidies and deaths and other costs. Like a pack of Paris Hiltons, we just don't understand how good these goo companies are for us. We think they are rich at the expense of our wallets, health, liberty, and the lives of our brave young soldiers. That's so stupid!

    Many Ways to Win with Big Oil

    Guessed what this magical goo is? That's right! Oil.

    US oil companies are making a fine product that we got to have. They are making it in a free market way and selling it at a free market price. So let's give them some free market space and stop bothering them with annoying anti-freedom questions and taxes. You can recapture some of the subsidy you pay with your taxes by buying oil stocks for your retirement portfolio, or you can have your kids join the military and fight for them and get paid by the government. It's dangerous so I don't let my kids do that, but it's good for yours.

    Burning oil causes pollution. So does burning cattle. In fact, burning cattle smells worse, unless the cattle are sliced up into steaks and cooked on a grill. Then they are absolutely delicious. Not so oil. We can reduce pollution if we remove the government subsidy and let oil reach a market price. Then cars will get smaller. But that's un-American, so forget about it.

    Sooner or later we'll kill all the people where the oil is or maybe we'll run out of oil before that. In any case, I'll be dead, so who cares? That's generations from now. In the mean time, let's give the oil companies their due. Let's vote for oil and buy their stocks.

    Previous columns by Ben Stooge:
    Another View of the Economy from Abroad

    Ben Stooge is a corporate press type who writes for iTulip. He does not own any of the stocks or other crap he shills, and rarely knows what he's talking about. But that doesn't keep him from expressing his opinions as if he did.

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    Last edited by FRED; 10-01-07, 05:11 PM.

  • #2
    Re: Grease my Palm with Big Oil

    first!

    parody of...
    Big Oil, Little Gratitude

    frightening ben stein's crap gets such high ratings.
    Last edited by FRED; 10-01-07, 05:12 PM.

    Comment


    • #3
      Re: Grease my Palm with Big Oil

      Originally posted by metalman View Post
      first!

      that's...
      Big Oil, Little Gratitude

      frightening ben stein's crap gets such high ratings.
      Texas oilman pleads guilty in Iraq oil/food case
      Mon Oct 1, 2007 1:34pm
      By Daniel Trotta and Paritosh Bansal

      NEW YORK, Oct 1 (Reuters) - Aging Texas oilman Oscar Wyatt pleaded guilty to conspiracy on Monday in the U.N. oil-for-food scandal in which millions of dollars in kickbacks were paid to Saddam Hussein's government to win oil contracts from Iraq.

      Comment


      • #4
        Re: Grease my Palm with Big Oil

        Originally posted by metalman View Post
        Texas oilman pleads guilty in Iraq oil/food case
        Mon Oct 1, 2007 1:34pm
        By Daniel Trotta and Paritosh Bansal

        NEW YORK, Oct 1 (Reuters) - Aging Texas oilman Oscar Wyatt pleaded guilty to conspiracy on Monday in the U.N. oil-for-food scandal in which millions of dollars in kickbacks were paid to Saddam Hussein's government to win oil contracts from Iraq.
        There are no limits to the ingenuity of man to find a way around whatever latest rule has been imposed. We have achieved a state where it is permissible, indeed expected, that previous codes of conduct will be routinely contravened. The apparent sin, however, appears in getting caught.

        Certainly I don't condone Wyatt's transgression, but I wonder how many "millions of dollars...were paid to Saddam Hussein's government" over the years by various US Administrations, the French, Germans, Russians, Chinese,...

        Comment


        • #5
          Re: Grease my Palm with Big Oil

          Originally posted by metalman View Post
          first!

          parody of...
          Big Oil, Little Gratitude

          frightening ben stein's crap gets such high ratings.
          Extract from Ben Stein's column link above:

          "...If they're making a legal product that we can't live without in a legal way and selling it at a legal price, let's lay the heck off of them and let them do their jobs..."

          I can swear I remember hearing the exact same words from the tobacco industry apologists... ;)

          Comment


          • #6
            Re: Grease my Palm with Big Oil

            If you are not really old, you will likely see it running out. You think oil prices are high now? No, it is cheap, at only 10 cents per cup.
            Peak Oil is real and it will hit hard. Sooner than you would think.

            Comment


            • #7
              Re: Grease my Palm with Big Oil

              Originally posted by BlackVoid View Post
              If you are not really old, you will likely see it running out. You think oil prices are high now? No, it is cheap, at only 10 cents per cup.
              Peak Oil is real and it will hit hard. Sooner than you would think.
              Peak oil exports will hit before oil production peak.

              Comment


              • #8
                Re: Grease my Palm with Big Oil

                Originally posted by dbarberic View Post
                Peak oil exports will hit before oil production peak.
                Media Advisory - America's top oil suppliers to slash exports by 2012: CIBC World Markets
                http://money.cnn.com/news/newsfeeds/...27092007-1.htm

                NEW YORK, Sept. 27 /PRNewswire-FirstCall/ - CIBC - Six of the largest oil suppliers to the U.S. are poised to significantly cut exports by 2012, ramping up pressure on supply and price, and intensifying the focus on one of the last great deposits open to private investment: Canada's oil sands.
                The forecasted cuts by Mexico, Saudi Arabia, Venezuela, Nigeria, Algeria and Russia are the subject of a keynote address that Jeff Rubin, chief market strategist and chief economist at CIBC World Markets will deliver at the firm's Industrial Conference Oct. 2 in New York City. In his remarks, Mr. Rubin will share his latest research on the global oil supply/demand balance, with specific focus on the size and scope of the oil supply crunch facing the U.S. over the next five years.
                Mr. Rubin's calls on oil prices, currency valuations and carbon taxes have garnered international headlines and have been instrumental in bringing key economic issues to the spotlight. Earlier this year, he predicted that oil prices would reach US$80 and that the U.S. and Canadian dollars would reach parity in 2007. He has also renewed a call made in 2005 that oil would reach US$100 a barrel by the end of next year.

                Comment


                • #9
                  Re: Grease my Palm with Big Oil

                  Originally posted by dbarberic View Post
                  Media Advisory - America's top oil suppliers to slash exports by 2012: CIBC World Markets
                  http://money.cnn.com/news/newsfeeds/...27092007-1.htm
                  From a recent post of mine on the Peak Oil string. We've been paying close attention to this situation for nearly 3 years now. You have it right - we are in no danger of running out of oil. It's how fast we can adjust our consumption behaviour in the event of a faster than currently expected rate-of-change in supply. The US economy and society are incredibly inventive and flexible enough that a slower increase, or a plateau in production, can be accomodated without a lot of real fuss. Going to be interesting to see how it plays out...

                  "Why I Can't Completely Dismiss Peak (Plateau?) Oil - in two sentences (well, sort of):

                  "From our ANI Correspondent

                  Nicosia, Sept 8: Saudi Aramco in its Annual Review 2006 said that last year the company's crude oil production declined by 1.7 percent, while exports declined by 3.1 percent, compared with the previous year.

                  Crude oil production in 2006 averaged 8.9 million barrels of oil a day (b/d) and exports 6.9 million b/d."


                  Full disclosure of biased personal opinion: For at least the next 5 to 10 years the pattern of global crude production (resource/reserves is not the issue) and availability to consumers will largely follow the pattern of Saudi Arabia's production and consumption. The economic implications will depend, in part, on this pattern - a steeper than anticipated decline in Saudi exports, which is a real possibility, could be an economically disruptive outcome by compressing the time available for adjustment to alternatives...."

                  Comment


                  • #10
                    Re: Grease my Palm with Big Oil

                    Originally posted by GRG55 View Post
                    It's how fast we can adjust our consumption behaviour in the event of a faster than currently expected rate-of-change in supply.
                    That behaviour is about to change as goverment policy will demand it.
                    http://investing.reuters.co.uk/news/...QUEBEC-TAX.XML

                    TORONTO, Oct 1 (Reuters) - Quebec province slapped the country's first carbon tax on energy firms on Monday, as Canadian business leaders urged "environmental taxation" to rein in greenhouse-gas emissions.
                    Last edited by bill; 10-02-07, 03:28 PM.

                    Comment


                    • #11
                      Re: Grease my Palm with Big Oil

                      Originally posted by bill View Post
                      That behaviour is about to change as goverment policy will demand it.
                      http://investing.reuters.co.uk/news/...QUEBEC-TAX.XML
                      Note that the government took the politically easy way out and advertised this as a "tax on the energy companies", and the lazy, un-informed, idiot journalists played their part by printing it as such without questioning the Govt line.

                      If the tax does not get "passed on" to the consumer, there will be NO behaviour change of any consequence. Consumers will keep consuming, and the energy companies will keep trying to provide what people want to buy.

                      Finally, you can be absolutely certain that whatever money Quebec, already one of the highest tax jurisdictions in North America, collects from this tax (regardless of who ultimately pays it) will go largely to improving the perks and benefits of provincial politicians, civil servants, and politically correct NGOs (it takes little to imagine this constituency jetting off business class to yet another UN sponsored shrimpfest at a 5-star international conference centre - complete with the obligatory handwringing, moral admonishments for the developed economies, and kumbaya-moment closing ceremony photo-op).
                      Last edited by GRG55; 10-04-07, 09:12 AM.

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                      • #12
                        Re: Grease my Palm with Big Oil

                        I don`t get it. I read Stein`s essay and thought he was extolling the same sort of free market capitalism we ourselves seek.

                        What part of his column is "crap"?
                        Greg

                        Comment


                        • #13
                          Re: Grease my Palm with Big Oil

                          Originally posted by BiscayneSunrise View Post
                          I don`t get it. I read Stein`s essay and thought he was extolling the same sort of free market capitalism we ourselves seek.

                          What part of his column is "crap"?
                          he writer's point is that holding the oil industry up as an example of free markets is a joke. it's subsidized by the government via military, access to public lands, externalization of pollution costs, etc.

                          Comment


                          • #14
                            Re: Grease my Palm with Big Oil

                            Metalman -

                            Please note that the very large financial risk inherent in exploration all rests on the oil companies. If they drill dry holes, the Government is nowhere in sight to bail them out on the expense. They drill a LOT of dry holes, and pay hundreds of millions out in exploration costs that yield zip. Deepwater drilling off of huge platforms especially racks up very large scale expenses and is considerably more elevated risk.

                            In the rest of our economy, we adhere to the free market principle that if a business is willing to take on high risks, then it is a double standard to resent their obtaining a commensurately large profit. In point of fact, oil major's large profits are constantly challenged by such large expenses that they are equivalent to the very largest payouts by the largest insurance companies in the world. For oil majors, that's their daily risk environment.

                            When hurricanes cause billions in damages offshore, they won't find the Government anywhere near to pick up any part of the tab, and the public remains entirely uninterested in their loss.

                            As if that were not enough risk, the government taxes big oil far and away more steeply than any other sector of the economy. US government taxes are a very large part of the end price at the pump. And traditionally whenever the Government get's into a fiscal jam, their favorite creativity consists of inventing yet more taxes upon big oil. This is the go-to whipping boy for congressmen and senators, they go at it with relish, and the populist public regards them as displaying great stature as statesmen promoting social justice by this endeavor.


                            Last, but probably far and away the largest risk, is expropriation of hundreds of billions of dollars of their already spent exploration and infrastructure money within nation states - viz. Venezuela encouraging Exxon and Chevron and other majors to invest huge sums in locating oil and developing technology and building vast on-site infrastructure to extract it, in a dozen countries worldwide. Look at the Russians summarily kicking all the majors out of their mega-giant Stockman Gas and Petroleum fields in the Arctic.

                            They let the majors in to explore, locate oil or gas, then spend billions putting in state of the art infrastructure costing a fortune, then simply 'change the rules' on some flimsy 'environmental' excuse (since when do the Russians give a rat's ass about their environment when it comes to oil and gas money), and boot the majors out entirely, in takeover's reminiscent of grand larceny. The amounts of money which are 'disappeared' by this nationalisation game verge on the size of the GDP of small countries. These losses would be company breakers for any companies smaller than these majors.

                            Then when many hundreds of millions have been committed irrevocably by these majors these nations get really cute, and 'change the rules' and impose new tariffs and terms which wrench the controlling intrest right back to the host country, making the entire project so uneconomical for the major that sometimes they literally throw in the towel and walk away from tens of billions of their own money. This is exactly what happened in Venezuela. Who's noticing the gargantuan western oil company losses there?

                            Where's the government or the US public when these massive risks take gargantuan bites out of the majors' assets? Who takes on the risk, the oil companies alone, or the rest of us with them?

                            Seems to me we let these companies bust their butts locating and extracting the oil, and we succumb to the populist Chuck Schumer's of the world, by vilifying the oil majors and cheering the efforts of an already leech like government to suck them further dry whenever they manage to profit. When large insurance companies build fat profits, we understand they are building financial soundness to carry large insurance claims. When the oil companies build their balance sheets, we vilify them. There's a large double standard in there somewhere.

                            Look at net profits as a percentage of the oil production costs and plant and equipment in the oil industry (gargantuan), and then look at net profits as a percentage of "plant and equipment" in the software industry, and you'll see two very different animals.

                            The software industry has problems of it's own, but 'plant and equipment' and 'exploration or massive nationalization risk' are certainly not among those problems.

                            My sense is anyone succumbing to the notion that the US oil majors are in bed with the government and merely "robbing the nation of it's oil wealth" should probalby talk to an oil industry CEO and see what they are muttering about the Government's leech like 'interest' in their profits. That same government can be counted on to hurriedly disassociate itself from any oil company liabilities.

                            Government regards the oil industry as a cash cow to be milked, and has not a care in the world whether they are fostering an environment where the US oil majors can remain viable instruments of American energy autonomy (even partially) as more and more national oil companies get cute and bushwhack them by nationalizing a decade of their massive exploration and infrastructure investments.

                            These kinds of risks would be considered astronomical in any other area of American business. We only employ a willful blind spot in recognizing it of the oil industry. Such nationalization or massive hurricane damage losses can be fatal to even quite large companies, yet no one in America has the vision to understand that if our oil majors are crippled by a few such instances occurring to closely together, we've got no-one else to go out and scrape up some more oil for America.

                            These days, that's a very, very good question to ask.
                            Last edited by Contemptuous; 10-07-07, 04:49 PM.

                            Comment


                            • #15
                              Re: Grease my Palm with Big Oil

                              Originally posted by metalman View Post
                              he writer's point is that holding the oil industry up as an example of free markets is a joke. it's subsidized by the government via military, access to public lands, externalization of pollution costs, etc.
                              All very valid points metalman.

                              However, with the exception of the military (because there in no substantive international element) can't the same criticism be levelled at the timber industry, the agriculture sector, coal extraction, nuclear power, commercial fisheries, base metal mining (go have a look at what the copper mines have done to the lands around Butte, Montana) and a lot of the recent coastal real estate development (a sector which seems to completely escape any criticism because everybody loves rising home prices)?

                              Whether the symbiotic relationship between government and business (any business) is constructive deserves continued vigorous debate. And we now have the seemingly chaotic free-for-all example of China, with all its well known positive and negative aspects, as a new reference to compare with.

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