Tag Archives: markets

That and maybe Something Else

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Fracking-based energy production is not expanding at anything like a useful rate, even as oil approaches $100/barrel, which only benefits Russia while harming us American consumers.

America’s largest frackers are reporting huge profits but plan to keep oil production in low gear this year, adhering to an agreement with Wall Street, even as prices approach the $100-a-barrel mark for the first time since 2014.

That “agreement” consists of

commitments they made to limit production and return more cash to shareholders, an effort to win back investors who fled the industry after years of poor returns.

That’s certainly a factor. However, even as President Joe Biden (D) claims he wants these producers to produce more in the face of those rising costs, he’s also spending far more energy begging OPEC—and Russia!—to produce more.

There’s another factor that may be strongly informing these producers’ decisions, though.

Maybe these producers just don’t trust Biden, given his openly declared war on our hydrocarbon energy industry—on the frackers—and Biden’s refusal to undo all—any—of his anti-carbon regulations and his other bars aimed explicitly at limiting oil, natural gas, and coal production.

Maybe they think Biden would only resume his war against them once the present energy and resulting inflation crises pass.

They wouldn’t be far wrong.

What Happens When

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This is an example of what happens when President Joe Biden (D) presses his assault on our nation’s energy production industry, presses his enthusiastic destruction of our energy independence, and does his kowtowing to Russia (and to OPEC) regarding that nation’s and that cartel’s oil and natural gas production and sale.

He’s reduced the United States of America to begging other nations for energy, and those nations along with Russia are now showing their contempt for Biden’s obsequiousness.

The headline summarizes the matter.

As Oil Nears $100, Saudis Snub US, Stick to Russian Pact Amid Ukraine Crisis

And this:

Rising oil prices and fears of a Russian invasion of Ukraine have created a dilemma for Saudi Arabia: help the West by pumping more crude to tame the market, or stand by a five-year-old oil alliance that is helping Moscow at the expense of Washington.
For now, the world’s largest crude exporter is sticking with Russia.

And this:

President Biden has repeatedly called on Persian Gulf producers to pump more oil to reduce gasoline prices that, for Americans, are about twice as high as they were earlier in the pandemic. Those calls have grown more urgent as oil prices have risen toward $100 a barrel….
Instead, the Saudis have said they won’t pump more than they agreed to last year as part of a deal between the Organization of the Petroleum Exporting Countries and Russia[.]

It doesn’t matter a whit to Biden that this problem wouldn’t exist if he got his Biden-Harris administration out of the way of our domestic oil and natural gas production so we could go back to being independent of our enemies and acquaintances for our energy, our economic life.

It doesn’t matter a whit to Biden that European nations’ dependence on Russia for their energy wouldn’t exist if he got his Biden-Harris administration out of the way of our domestic oil and natural gas production so we could go back to supplying Europe with oil and natural gas.

A USPS “Upgrade”

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The USPS is being pressured by President Joe Biden (D) and his EPA to go greenie-er in its vehicle upgrade. So,

The proposed action, which we are evaluating under the National Environmental Policy Act (NEPA), includes an initial order plan for 5,000 electric vehicles, and the flexibility to increase the number of electric vehicles introduced should additional funding become available.

The US Postal Service wants to convert 10% of its 230,000 vehicle fleet to battery-operated “in the coming years,” but says going all electric would cost an additional $3.3 billion beyond its normal budget of $6.3 billion.

What jumped out at me, though, was this comparison between the replacement vehicles for which the USPS has contracted and its present fleet:

In response to a report that the NGDV [Next Generation Delivery Vehicle] only achieves a fuel efficiency of 8.6 mpg in typical use, compared to the Grumman’s 8.2 mpg, the USPS pointed out that the comparison was flawed because it was conducted with the NGDV using its air conditioning system, which the LLV [Long Live Vehicle] does not have. With it turned off, the NGDV achieves 14.7 mpg, according to the USPS.

A 70% increase in mileage with the a/c turned off? That seems to me a poorly designed air conditioning system, even with the windows open for mail delivery every few feet. That just means the compressor is running all the time; it shouldn’t be imposing that big a load on the engine. And: what’s that bump going to do to the battery in the electric NGDV, both its miles between charges and its charge-discharge lifetime?

The Fed and Social Engineering

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President Joe Biden (D) wants our Federal Reserve System to engage in economic social engineering, so he’s nominating as the Fed’s banking supervisor the climate activist Sarah Bloom Raskin. Among her lately remarks concerning credit allocation and climate change was her last-spring op-ed in The New York Times. She led off that piece with this:

Climate change poses the next big threat. Ignoring it, particularly to the benefit of fossil fuel interests, is a risk we can’t afford.

She had this, too, in the same piece:

The Fed is singularly poised to seed strategic investments in future economic stability.

And this:

The decision to bring oil and gas into the Fed’s investment portfolio not only misdirects limited recovery resources but also sends a false price signal to investors about where capital needs to be allocated[.]

Raskin had this in her September 2020 Project Syndicate op-ed, reprinted by Duke Law:

US regulators need to be encouraged to think more imaginatively about how they can engage with local transition efforts. For example, how might financial policies from diverse agencies be stitched together to produce outcomes that enable firms to hit their net-zero targets? How can financial policy be used to help accelerate a transition that redeploys workers for new jobs, or to assist households that are being asked to change their spending habits? And how can regulatory changes relating to disclosure, access to credit, and pricing of risk support a rapid and just green transition?
…
In short…[f]inancial regulators must reimagine their own role so that they can play their part in the broader reimagining of the economy.

That’s not the Federal Reserve’s role, though. The Fed’s statutorily required goals are to maximize employment, stabilize prices, and moderate long-term interest rates. There’s nothing in there about climate change, or “guiding” lending to this or that government-favored group of Americans and away from that or this government-disfavored group of Americans, or any other sort of social engineering.

One more thing. Aside from Raskin’s own altered-state understanding of the Fed, a larger problem regards the present administration’s overall attitude. That Biden-Harris actually nominated Raskin says volumes about his own view of law and his own willingness to disregard it in order to increase his administration’s power.

Out of Touch?

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Or openly lying?

Small businesses are booming, according to the Biden-Harris administration.

President Biden’s efforts have not only helped millions of Main Street businesses keep their lights on and employees on payroll, they have enabled a remarkable rebound in small business activity, with small business demand for labor and inventories near record highs.

And

According to a leading survey of small business owners, the share of small businesses planning to create new jobs in the next three months is higher than it ever was at any point during the previous Administration. Another recent survey of small business owners found that 71 percent are optimistic about their own performance in 2022, up from 63 percent one year ago.

Carefully unidentified surveys. An openly identified survey, a Goldman Sachs survey, says otherwise.

86% of small business owners say that broader economic trends, such as supply chain issues, inflation, and workforce challenges, are having a negative impact on their small businesses

And

66% of impacted businesses say it is a problem for their business that suppliers are favoring large businesses over small businesses….

And

84% of small business owners say inflationary pressures have increased since September of 2021

And

Two-thirds of small business owners do not think the Federal government has done enough to address the economic trends

And

29% [of small business owners] think things in the US are moving in the right direction, reflecting a 38% decline since June of 2021.

That should be an embarrassing disconnect for the Biden-Harris administration, which makes me repeat my question: are the personages in this administration, from Biden-Harris on down, that far out of touch, or are they openly lying to us?

Either way, this is an incompetent administration, and it’s going to be a dangerous three years, domestically as well as globally.