The Washington Post (September 8)
“The slaughter in Syria goes on.” The Post is convinced it won’t end until Bashar al-Assad’s regime comes to an end. The EU’s boycott of oil from Syria is one promising development. “Syria is vulnerable to an economic squeeze. The more that Western governments can apply it, the greater the chance of saving lives.”
New York Times (August 7)
There’s a sensible way to quickly cut $100 billion from the budget. The Times points to “two obvious and long overdue cuts: ending the web of tax breaks enjoyed by the rolling-in-dough oil industry and terminating the ethanol subsidy.” Over 10 years, eliminating these tax breaks “would save up to $100 billion…without hurting the poor and middle class or slowing the economy.”
Financial Times (May 6)
In a single trading session, commodities prices came crashing down on Thursday, with silver falling 13%, oil 10% and gold 4%. While the sharp correction was not predicted, a slew of rationale has subsequently been offered to objectively explain the dip. The Financial Times finds most of this reasoning specious, writing “the ease with which we explain price swings – in any direction – suggests that we do not really understand them at all.” Instead, the FT opts for a simpler explanation. “Last week’s slide probably just means that a self-inflated bubble self-deflated a little, in accordance with its own internal mass-psychological dynamics. Put simply, investors took fright.” Trying to explain what caused the fright or predict where it may lead is a fool’s game. Commodities may go up or they may go down. We cannot know.In a single trading session, commodities prices came crashing down on Thursday, with silver falling 13%, oil 10% and gold 4%. While the sharp correction was not predicted, a slew of rationale has subsequently been offered to objectively explain the dip. The Financial Times finds most of this reasoning specious, writing “the ease with which we explain price swings – in any direction – suggests that we do not really understand them at all.” Instead, the FT opts for a simpler explanation. “Last week’s slide probably just means that a self-inflated bubble self-deflated a little, in accordance with its own internal mass-psychological dynamics. Put simply, investors took fright.” Trying to explain what caused the fright or predict where it may lead is a fool’s game. Commodities may go up or they may go down. We cannot know.
Tags: Commodities, Gold, Oil, Price Swings, Silver
The Economist (April 20)
African countries welcomed China with open arms. Supplying over a third of China’s oil, Africa’s largest trading partner is now China. Good will, however, is in shorter supply. Africans are accusing China of “ripping them off.” Tension arises from the poor, often dangerous, working conditions provided by some Chinese employers. The shoddy construction of some pledged public works generates more complaints. The Economist reports a “Chinese-built road from Lusaka, Zambia’s capital, to Chirundu, 130km (81 miles) to the south-east, was quickly swept away by rains.” In the capital of Angola, “cracks appeared in the walls” of a Chinese-built hospital “within a few months and it soon closed.” Trade is still booming, but suspicions are growing.
Wall Street Journal (March 29)
Will the 30% spike in the price of oil hobble the U.S. recovery? This is unlikely. Prices have not hit new highs. They are actually down 30% from two years ago. Moreover, “the U.S. economy is today well-positioned to absorb an oil spike without experiencing it as an oil shock.” The U.S. is 9% below peak oil consumption which occurred in August 2005. In addition, the U.S. has gotten more efficient with the oil it uses. “We’re consuming the same amount of crude oil that we did 12 years ago and real output is more than 25% higher.”
Tags: Efficiency, Oil, Recovery, U.S.
Washington Post (March 8)
Oil again crossed the $100 per barrel threshold. The price hike isn’t entirely bad. It may “spur conservation and stimulate domestic oil production, thus rendering the country less vulnerable to future oil shocks.” The 1973 oil crisis certainly did. The U.S. economy now “consumes less than half as much petroleum and natural gas per dollar of economic output as it did.” In fact, the Post would welcome higher gasoline taxes to encourage “sensible long-term conservation measures.”
Tags: Conservation, Energy, Oil, Tax
The Financial Times (July 19)
What a difference a decade makes! In 2009, China consumed 2,252 million tons of oil equivalent, approximately 4% more than the U.S. In 2000, the U.S. used twice as much energy as China! China has also replaced the U.S. as Saudi Arabia’s biggest oil customer and Japan as the world’s largest importer of coal.
What a difference a decade makes! China passed the U.S., consuming 2,252 million tons of oil equivalent in 2009, approximately 4% more than the U.S. In 2000, the U.S. used twice as much energy as China! China has also become the world’s largest importer of coal and Saudi Arabia’s biggest market for oil exports.
The New York Times (July 13)
As BP inches toward stopping the massive oil leak in the Gulf of Mexico, the New York Times examines BP’s past performance. The newspaper draws a harsh conclusion. “In pursuit of growth and profits, BP has taken monumental risks and suffered the consequences. But its record shows that it has been unable or unwilling to learn from its expensive mistakes.”
The Times—London (June 21)
BP has achieved “the absolute worst possible corporate response to an oil disaster.” The Times runs through BP’s missteps and especially takes CEO Tony Hayward to task. Hayward has become a “global laughing stock” at a time when BP and its shareholders need leadership.
The Washington Post (June 17)
BP will escrow $20 billion to fund the oil spill cleanup. The Post puts this amount in perspective. That’s enough money “to buy all the shares of the Kellogg Co. And it’s larger than the annual economic output of 90 countries.” Not many companies can make a $20 billion mistake and still survive. Fortunately, it looks like BP can.
