Baltbear on Finance markets are like marshmallows

Removing all the politics from today’s sense of how to rebuild the economy, it is useful to look around and see what the people who can actually look ahead are seeing.

Is OPEC adding capacity? no. the saudis and kuwaits have both cancelled deals to make better use of future oil, because they can see no sign of demand.  Mexico’s fields are collapsing (which was part of the hyper-spike earlier in the year). China’s major fields are declining, if not collapsing. (even cramer’s people acknowledge that..possibly so his boys can cover shorts) , and yet oil “can’t find” $50 .

Another part of the nonsense about the bright future of petroleum is in the idea of Canadian tar.

Here’s some iconic realities courtesy of another commentator:

…” the energy requirements of the projects planned for tar sands development already exceed the amount of available natural gas from the entire Mackenzie River project. Virtually all estimates for natural gas usage in tar sands operations by 2015, just 10 years hence, exceed the projections for available amounts of natural gas…
“Immense amounts of water are currently being discarded into settlement ponds, in which it may take 200 years for the smallest particles to settle down to the bottom. Meanwhile, the water is toxic, and mixed with exceedingly high levels of heavy metals and other exotic elements that you probably do not want to eat.”

So, how to proceed towards an economy that can actually afford to use the remaining oil resources properly?

Back to the idea of getting inefficient cars off the roads, out of the junkyards, away from the air supply, creating investment oportunities for alternative vehicles to actually make it from the “concept” display at a convention, or a magazine, and into car lots and driveways.”

Posted under business

today gm announced it can see the end of its cash reserves.
conbress has already told gm to go take a hike.
is this a poker game, gm bluffing to see if congress folds?
probably, becuase neithr side wishes to deal with the issues:
the roads are filled with cars that people value, becuase thy have no choice.
while oil is “cheap” and to kep it that way, a 10 cent fuel tax,
with the proceeds to go to buying cars made before 89 off the roads,
cars turned into tuna cans, not “recycled” as cars,
buying the cars at their original retail price with vouchers usable
only for buying cars made after 2002 that meet forward looking cafe goals
would get assembly lines moving again, provide locked base leverage for
extending credit, reduce health care costs, reduce oil dependence.
directing such vouchers back to the car “makers” as tax offsets, or
to be exchanged rirectly for r&d money maintains the forward motion,
and the delivery channels already exist between dealers and makers.
used car lots can use the vouchers as payment for floor plan with banks.
banks can hold the vouchers as capital for loss reserves,
and a clear, fast, utterly trsanparent market can immediately appear
for moving the “cash” value of thse vouchers, in th same way that a dtc
can keep track of “street name” equities.
ten cent a gallon equals about $18 billion dollars.
cars being taken of the road, let’s call it $8000 each,
thereby retiring 2.25 million cars, without “debt”.
invoke debt against tax revenues as a model, and double to 4.5 million cars a year.
let’s pretend there is shrinking dependence on a dead car in the driveway,
and say a demand for an additional 4 million vehicle units a year is created.
is that enough to bail out gm?
ask your congressman why it isn’t being done.
and pass this post along to anyone you know
who pretends to be “looking for solutions.”

Posted under business, finance, investing