Strategic

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DOUG  By Guest Blogger Doug Rowat
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Scattered about Texas and Louisiana in vast underground salt caverns are hundreds of millions of barrels of oil. These barrels represent the US’s Strategic Petroleum Reserve (SPR), which is designed to control the impact of “severe supply disruptions” or assist in emergencies that “may cause major adverse impact on national safety or the national economy.”

Somewhat overshadowed by the incredible amount of newsflow this year—the Ukraine war, Liz Truss’s ineptitude, the Queen’s death, Europe’s economic death spiral, Kanye West’s death spiral, the most aggressive central bank interest-rate policies since the 1970s, the worst bond bear-market in centuries, Taylor Swift blowing up Spotify—is the fact that the US has been drawing down its SPR at the fastest rate ever. By far.

In March, President Joe Biden announced that his administration would start tapping these reserves and draw 180 million barrels before year-end. This 180-million-barrel draw was, in fact, recently completed and has cut the US’s strategic oil reserves by almost 35% over the past year, leaving reserves at their lowest levels since the early 1980s:

US Strategic Petroleum Reserve (000s barrels): never in history have reserves declined so far so fast

Source: EIA

Biden’s not the first president to draw on the SPR, of course. Nearly every president has drawn from it since its creation in the 1970s, but notably there have only been three instances of emergency releases: in 1991 during Desert Storm, in 2005 in the wake of Hurricane Katrina and in 2011 as a result of conflict in Libya. These emergency releases combined, however, totaled far less than Biden’s drawdown this year. In fact, nothing in the entire history of the SPR compares to what Biden’s done during his presidency. Since Biden’s inauguration in January 2020, more than 235 million barrels have been released from the SPR.

Biden’s tactics have no doubt contributed to lower oil and gasoline prices this year, but it’s probably not a significant contribution. A global economic slowdown due to rapidly rising interest rates, less oil demand from China due to its draconian Covid lockdowns and simple demand erosion from the US consumer’s reluctance to pay record-high gasoline prices of more than US$5/gallon seen earlier this year have all probably had far more influence on oil and gasoline prices.

So Biden’s strategy has been of questionable effectiveness, but it’s also been risky. The 400 million barrels that remain in the SPR should be put into perspective. It sounds like a lot, but relative to global demand, it isn’t. The world consumes nearly 100 million barrels a DAY. Further, if the US Department of Energy tapped these reserves at maximum capacity (4.4 million b/d) the remaining supply would only last about three months. In other words, reserve levels, while not yet fragile, are definitely precarious, leaving the US with a far-below-normal security level for future energy emergencies.

From an oil-price perspective, investors and commodity traders also know that these reserves will eventually need to be replenished. After all, the 40-year average SPR level is more than 600 million barrels—more than 50% higher than where we are now. So continuing to tap reserves will, at some point, likely no longer contribute to lower oil prices, but instead have the opposite effect. Once it becomes obvious to the market that the reserves must be replenished, further releases will be signaling only the likelihood of increased future demand—thus risking the unintended consequence of higher oil prices. Where this tipping point lies exactly is hard to say because we’re in uncharted territory, but it’s analogous to a car running low on gas—it can still drive farther, but the need to pull into a gas station increases by the mile. Markets will be watching that SPR needle carefully.

Then there’s the issue of whether Biden’s decision was based on economic need or political utility. Would all of the factors mentioned above not have stabilized gasoline prices on their own? Was this being done to avoid a “major adverse impact” on the US economy or was it done for optics ahead of the mid-term elections? After all, we’ve had past recessions and periods of elevated inflation that haven’t necessitated the need for SPR drawdowns, certainly not on this scale. And yes, gasoline prices were briefly very high this summer, but the US consumer has generally remained in good shape throughout 2022 as evidenced by the fact that almost any American who wants a job has got one at the moment.

Jeff Eshelman, president and CEO of the Independent Petroleum Association of America, may have made the most stinging criticism of Biden’s current use of the SPR: “The [SPR] is meant to protect consumers against emergency supply disruptions, not politicians during an election year.”

There were a number of reasons why we overweighted Canadian equities this past summer. Longer-term factors included commodity-cycle positioning, cheap valuations, relative-strength breakouts, etc., all of which Ryan detailed last week. Near-term factors included the likelihood of energy prices rising during an upcoming European winter where Russian oil & gas shutdowns are all but a certainty.

But it’s fair to say that we can now add the increased likelihood of the Biden administration bungling its SPR drawdown as a further justification for this decision.

Though it might be fitting if the unprecedented SPR releases do backfire, especially if the only reason that the administration went down this road in the first place was to secure political advantage.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Investment Advisor, Private Client Group, Raymond James Ltd.

 

123 comments ↓

#1 RowatNation aka Prince Polo on 10.29.22 at 10:10 am

What would pique the interest of the TurnerInvestments brain trust to consider an additional energy tilt to the B&D portfolio by adding an O&G ETF, or is the international and Canadian indices’ weighting already enough?

#2 Sail Away on 10.29.22 at 10:23 am

Thanks Doug, good article. So Biden is drawing down oil reserves? Must be Trump’s fault.

Watching some news channel yesterday, there was a piece on illegal immigration that said, and I paraphrase: ‘US illegal immigration over the last twelve months was higher than ever before in history due to Trump’s immigration policies’

Head. Must shake.

#3 baloney Sandwitch on 10.29.22 at 10:33 am

The Russians and Saudi’s with OPEC openly use oil as a weapon (which they are doing right now), certainly the Biden admin is entitled to defend. Plus you negate your argument that the reserve is not all that material.

#4 KNOW IT ALL on 10.29.22 at 10:38 am

And you wonder why politicians are getting chased around with hammers.

The people will only put up with so much.

Paul Pelosi is not a politician. And you are revolting. And banned. – Garth

#5 Sail Away on 10.29.22 at 10:41 am

Let me illustrate the absurdity of Canadian RE from perspective of a US experience:

Our Montana hunting team was me, my lifelong buddy Mike and his 28yo son Damon. Damon graduated Michigan as a mechanical engineer 6 years ago and took a job in Kalispell, MT. In 2019, he bought a bare 5-acre lot with well for $129,000. Since then he has been building a house, relying on family for help. He and wife had a kid this May, so he took an 8-week paternity leave and poured every second into the house, which is now roofed, plumbed, wired, insulated and buttoned up, ready for drywall and interior work over the winter. Beautiful place with stained cedar board and batten.

Total cost of the 2,000 s.f. build: $140,000, with $12k more expected to occupancy.

All done on $85k trainee engineer salary. My buddy floated him $50k. No other debt. Settled, debt-free and stable by 28.

Compare and contrast..

#6 David on 10.29.22 at 10:51 am

Hopefully Trump will be back in office in just over two years and Keystone will get built. Cancelling it was probably Biden’s biggest blunder.

#7 Old Boot on 10.29.22 at 10:55 am

Biden isn’t just draining the reserve supply of oil; he’s also throttling domestic supply with both hands.

https://www.wsj.com/articles/federal-oil-leases-slow-to-a-trickle-under-biden-11662230816

No relief for high gas prices will be forthcoming.

#8 RowatNation aka Prince Polo on 10.29.22 at 11:00 am

#33 Inflation on 10.27.22 at 4:49 pm
Garth why are you not on twitter?

Because this comments section is enough of a sewer! ZING!

#9 Søren Angst on 10.29.22 at 11:11 am

From an oil-price perspective, investors and commodity traders also know that these reserves will eventually need to be replenished.

————

Exactly and all that means after the US Midterms. Expect Energy, Transportation costs to increase, fueling inflation.

EU holding the line on emergency oil stocks for the most part (Table 2, compare Jan vs. Jul 2022). If you add in commercial oil stocks Germany, France and Italy are in good shape, Figure 3.

https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Emergency_oil_stocks_statistics&oldid=581493#Emergency_oil_stocks_statistics

On nat gas,

Natural gas prices are down, supplies nearly full in Europe
https://www.washingtonpost.com/world/2022/10/28/gas-prices-europe-energy-crisis/

#10 Dogman01 on 10.29.22 at 11:21 am

Doug

The drawdown of the SPR is due to a clear and present emergency in the USA.

Americans do notice gas prices, and almost 50% of them voted for the “Bad Orange Man” in their last election. Now think on this; despite all the obvious flaws of the “Bad Orange Man” , almost 50% thought the establishment was so utterly horrible they would vote for that guy.

The US Establishment has become so corrupt and insular as to be unable to address the root causes of Trump, in so much that they have exacerbated the divide and Trump may actually run again and win.

“Trump did not bring division. Division brought Trump. If you don’t see that, then you’re part of the problem.” Ryan Fournier

It is amazing that over the last two years they could not see the division in their country and could not adopt reasonable policies that would heal that division, instead they doubled down, aligned the radical left with the neo-cons, promoted a woke, Globalist, pro-war agenda and further alienated the general population.

The US “Establishment” has an emergency existential threat on its doorstep, its called Democracy.

#11 IHCTD9 on 10.29.22 at 11:28 am

“The [SPR] is meant to protect consumers against emergency supply disruptions, not politicians during an election year.”
——

There’s a zinger :D

#12 the Jaguar on 10.29.22 at 11:30 am

Seems like the pendulum is beginning to swing back from it’s far left position on lots of issues.. The importance of oil and gas to economies (never mind keeping peeps warm) is one example. Note how this ‘snippet’ from an article in this morning’s NP is phrased as well, beginning with the word ‘Sanctions’, and including the phrase ‘geopolitical events’ :

“Sanctions against Russia have cut off the supply of fuel for several of the next-generation nuclear reactors that Canada hopes to pioneer in the next few years, and there’s no immediate idea how to replace it, according to documents obtained by The Logic from Natural Resources Canada.

“There is an immediate HALEU supply and security constraint that impedes the advancement of some SMR projects in Canada,” says a briefing note prepared last spring for the deputy minister at Natural Resources. “Russia is the primary commercial supplier of HALEU, but recent geopolitical events have suspended all trade possibilities.”

Since Russia invaded Ukraine and Canada all but halted trade, the note adds, “securing HALEU supply now represents the critical path to deployment in Canada and globally.” ++

There has also been a three part series in the NP written by a college professor from Portland ( Lyell Asher ) about how anti racist programs on college campus’s only worsen divisions. ( Portand of all places). +++

Another stating that in Quebec, Legault’s new cabinet choices indicate ” Indentity and Cultural issues are out, economic development is in”. ++

Weekly protests in many European countries, and the
US Mid Terms are just around the corner and not looking great for Joe B & company.

Oh….and did you hear that Elon Musk just took over TWITTER.?

#13 Mikey on 10.29.22 at 11:38 am

People that got wacked in housing and markets obviously don’t know this.
At the top of the mania phase, everyone wants in, even those who haven’t ever followed the stock market…FOMO – Fear Of Missing Out. The 2021 REDDIT crowd pushing up ‘meme’ stocks like GameStop and AMC was a classic example of a Mania Phase top.

Adding 30% to the money supply in short order and ZIRP were big drivers.
I’m still waiting for a bottom to buy back.
It’s the greatest losses in Canadian wealth prolly ever.
I Talked to my bank loans buddy and she said their very concerned going fwd for many people. She manages numerous offices. They should be I said.
Luck to all.

No for me.

#14 epic bear on 10.29.22 at 11:38 am

this train wreck is hilarious. draw down the SPR to zero, and you’re at the mercy of the Saudis, Russians, Iranians… no. wait. you’re already at their mercy since you stopped investing in energy close to a decade ago and threatened oil and gas executives with jail time .. brilliant strategy mr. Biden. brilliant. now go begging Venezuela Iran and the Saudi’s to produce for you.. idiots

#15 Mikey on 10.29.22 at 11:44 am

PS my thoughts going fwd.
Another int rate hike.
Problems will persist and the fools at the helm will continue being foolish.
A couple years down the road housing will bounce back due to a shortage and inflation.
If you believe anything that comes out of the Gov you have already lost. They missed in a huge way buy not increase rates long ago. Because they need votes and they love power. Knowing the diff will make you rich or poor.
I’m good :-)
Jagmeet is the biggest fool lol

#16 Shawn on 10.29.22 at 11:48 am

About Oil Prices and Alberta

OPEC of course exists to be a cartel to curtail oil production and raise prices. This they have generally done well at this since about 1972. There was a weird period a couple years ago where they seemed to be flooding the market to push U.S. shale out of business but in general it is undeniable that OPEC exists to push oil prices higher and that they have done so. (Ask Biden.)

Therefore, Alberta owes an enormous debt of gratitude to OPEC. Alberta oil industry thinks of itself as a free market but it clearly has ridden the coattails of OPEC for 50 years now.

Pierre Trudeau would never have invoked the National Energy Program if OPEC had not succeeded in pushing oil prices up by hundreds of percent in the 1970’s.

I often sing the prises of Alberta. But my first loyalty is always to truth and logic as I see it. Alberta is great in large part due to OPEC. If not for OPEC the individual middle east producers would have flooded the oil markets for decades and the high-cost oil sands would never have been developed to any extent.

Alberta and Albertans owe a huge debt of thanks to OPEC and I think that is simply undeniable.

I once wrote same to the Energy minister years ago and got a letter back denying this was the case.

In conclusion, Thank You OPEC. Actually I wish you did not exist but I recognise that you have benefited me. It’s a distasteful thought but true.

#17 IHCTD9 on 10.29.22 at 11:50 am

#5 Sail Away on 10.29.22 at 10:41 am
Let me illustrate the absurdity of Canadian RE from perspective of a US experience:

Our Montana hunting team was me, my lifelong buddy Mike and his 28yo son Damon. Damon graduated Michigan as a mechanical engineer 6 years ago and took a job in Kalispell, MT. In 2019, he bought a bare 5-acre lot with well for $129,000. Since then he has been building a house, relying on family for help. He and wife had a kid this May, so he took an 8-week paternity leave and poured every second into the house, which is now roofed, plumbed, wired, insulated and buttoned up, ready for drywall and interior work over the winter. Beautiful place with stained cedar board and batten.

Total cost of the 2,000 s.f. build: $140,000, with $12k more expected to occupancy.

All done on $85k trainee engineer salary. My buddy floated him $50k. No other debt. Settled, debt-free and stable by 28.

—————

I got a bro who was mortgage free at 30 or so via a good RE buy, a severance, and a house build. Done on a single income as well. More work than anything else. That was 20 years ago. Today, a tiny suburban lot is 200k locally, hours from the gta, and a sheet of 5/8” T+G is $65.00.

It’s going to take years to fix, and lots of pain.

#18 Mikey on 10.29.22 at 11:50 am

Greenflation too awesome.
We are in stagflation IMHO. Peeps are going to get mowed over. I’m rarely wrong only on timing a bit.
Better to know the devils details so you can tackle it.
Ignorance is not biss. T2

#19 Mikey on 10.29.22 at 11:55 am

RBC: Canadians expected to lose wealth at pace not seen since early 1990s
https://www.bnnbloomberg.ca/rbc-canadians-expected-to-lose-wealth-at-pace-not-seen-since-early-1990s-1.1838288

And I think there are some deals starting to show.

#20 Dogman01 on 10.29.22 at 12:02 pm

What are they up to?

The Ruling Class of the West…what are they up to?

Rolling out a ubiquitous censorship in societies whose foundational values are Free Speech; Gleen Greenwald; The Consortium Imposing the Growing Censorship Regime:
https://greenwald.substack.com/p/the-consortium-imposing-the-growing

Aligning with the most radical and insane Left Wing policies; Ottawa’s woke plan for washroom equity:
https://financialpost.com/opinion/matthew-lau-ottawa-woke-plan-washroom-equity

Adhering to an economically suicidal Green Agenda, attacking the most basic needs of energy with little support and no reasonable alternative presented; Opinion: Ottawa has 13% support on its oil and gas policies
https://financialpost.com/opinion/ottawa-oil-and-gas-policies

Inflation and cost of living that is impoverishing their populations; More Canadians are turning to food banks than ever before, new report says;
https://www.cbc.ca/news/canada/food-bank-canada-usage-1.6631120

Seemingly happening throughout every Western country, almost like it’s an agenda…

#21 Quintilian on 10.29.22 at 12:11 pm

When you get a flat, you use your spare, until you get to place where the leak can be fixed.

That is the purpose of the spare.

#22 jess on 10.29.22 at 12:19 pm

Greenflation ?

Ud. 2021 billion -dollar weather and climate disasters
https://www.ncei.noaa.gov/access/monitoring/dyk/billions-calculations

https://www.cnn.com/2022/10/28/us/gallery/superstorm-sandy/index.html
Superstorm Sandy made landfall over New Jersey on October 29, 2012.
The storm surge destroyed homes, ripped apart piers on the Jersey Shore and inundated subway and highway tunnels in New York. Nearly 8 million people lost power across 15 states and Washington, DC.
Sandy was responsible for at least 72 deaths in the United States and caused an estimated $81.9 billion in damages. It was the fourth-costliest US storm behind Hurricane Katrina in 2005 and hurricanes Harvey and Maria in 2017, according to the National Oceanic and Atmospheric Administration.

#23 jess on 10.29.22 at 12:21 pm

what is the leftover goo worth?

U.S. Gold Mining Company Violated Environmental Law more than 3,000 Times

A U.S. federal judge found that a gold mining company has violated environmental laws more than 3,000 times at its Buckhorn Mine in “one of the unspoiled natural areas” of Washington State, the Office of the Attorney General said Thursday.

The maximum penalty under the Clean Water Act is US$54,800 per violation, per day, for up to five years. Crown Resources and Kinross could face more than $160 million in penalties for their pollution.

#24 The General on 10.29.22 at 12:24 pm

Oil production isn’t the issue, refining capacity is shrinking. And the U.S. simply hasn’t built a new refinery in 30 years. Many refineries in the states are configured to use heavy oil, whether from Venezuela or Alberta. Alberta oil will eventually refill the strategic petroleum reserves. You’re welcome, Uncle Sam. Btw, we are exporting more oil to the states than ever before.

#25 Sail Away on 10.29.22 at 12:27 pm

#17 IHCTD9 on 10.29.22 at 11:50 am
#5 Sail Away on 10.29.22 at 10:41 am

Let me illustrate the absurdity of Canadian RE from perspective of a US experience:

Our Montana hunting team was me, my lifelong buddy Mike and his 28yo son Damon. Damon graduated Michigan as a mechanical engineer 6 years ago and took a job in Kalispell, MT. In 2019, he bought a bare 5-acre lot with well for $129,000. Since then he has been building a house, relying on family for help. He and wife had a kid this May, so he took an 8-week paternity leave and poured every second into the house, which is now roofed, plumbed, wired, insulated and buttoned up, ready for drywall and interior work over the winter. Beautiful place with stained cedar board and batten.

Total cost of the 2,000 s.f. build: $140,000, with $12k more expected to occupancy.

All done on $85k trainee engineer salary. My buddy floated him $50k. No other debt. Settled, debt-free and stable by 28.

———-

I got a bro who was mortgage free at 30 or so via a good RE buy, a severance, and a house build. Done on a single income as well. More work than anything else. That was 20 years ago. Today, a tiny suburban lot is 200k locally, hours from the gta, and a sheet of 5/8” T+G is $65.00.

It’s going to take years to fix, and lots of pain.

———-

No, no pain. It’s really easy to just step across the border. Sometimes the grass actually is greener.

#26 Debtslavecreator on 10.29.22 at 12:28 pm

Most corrupt us admin in history. Deliberately collapsing the us and the west as part of their long planned agenda 2030 global dictatorship with a sharply reduced population subject to China style social credit score and surveillance. Obama and his crew is still running the show

#27 The General on 10.29.22 at 12:32 pm

What entity uses more oil than almost anyone else on planet earth? Why, the U.S. military juggernaut, of course. Mabey peace could bring oil prices down?

#28 Tasty Treasures in a Purina One Sauce on 10.29.22 at 12:34 pm

Maybe it’s my hangover but something isn’t making sense. Congress has been selling the reserve oil to fund the US deficit since 2015. The Bipartisan Budget Act, the The Tax Cut & Jobs Act, Fixing Surface Transportation Act and probably others mandate the sale to fund things like improving the SPR infrastructure, roads and whatever else. Some sales required by these laws haven’t even started yet but will in the mid to late 2020’s.

I thought the plan was always to draw the reserve down to about 250 million barrels by 2028.

#29 Dogman01 on 10.29.22 at 12:47 pm

#16 Shawn on 10.29.22 at 11:48 am

Shawn , I concur OPEC are Market Makers and benefit the entire industry by creating stability. They did shake the tree of frackers a few years ago .

In the 90’s-2000’s in Calgary, I watched as three companies put in Fibre-Optic lines, they overbuilt capacity as capacity on Fibre Optic was extraordinary (Alien tech from Roswell I suspect). Prices for the service fell fell fell until two of three went out of business and Telus bought up all the Infrastructure. – Last man standing won it all.

Governing Dynamics: Ignore the Blonde – https://www.youtube.com/watch?v=CemLiSI5ox8

Adam Smith was wrong.

#30 The General on 10.29.22 at 12:53 pm

Electric cars have been around for a long time. Why was this technology snuffed out so long ago? And steam power had lots of potential. Model T cars could be run on alcohol. Henry Ford envisioned farmers creating their own alcohol fuel to power their tractors. Rockefeller, I’m guessing, was a prohibition supporter. Kind of like the hemp prohibitionists which followed.

#31 Doug Rowat on 10.29.22 at 1:14 pm

#3 baloney Sandwitch on 10.29.22 at 10:33 am
The Russians and Saudi’s with OPEC openly use oil as a weapon (which they are doing right now), certainly the Biden admin is entitled to defend. Plus you negate your argument that the reserve is not all that material.

—-

Optics can count as much as results.

—Doug

#32 jess on 10.29.22 at 1:18 pm

friday, October 28, 2022
District Court Enjoins Arizona Company from Distributing Adulterated or Misbranded Dietary Supplements

A federal court permanently enjoined a Chandler, Arizona company from making and selling adulterated and misbranded dietary supplements, the Department of Justice announced today.

In a complaint filed on Oct. 12, 2022, the United States alleged that Global Vitality Inc., doing business as Enzyme Process International, along with company owner Steven D. Roderick, and the company’s corporate secretary Gorica Blagojevic, violated the Federal Food, Drug, and Cosmetic Act by distributing adulterated and misbranded dietary supplements. The government alleged that despite several Food and Drug Administration inspections over eight years and an FDA warning of non-compliance, the defendants continued to manufacture dietary supplements that were adulterated and misbranded in violation of current good manufacturing practice regulations, relevant food safety standards, and hazard prevention measures.

#33 The General on 10.29.22 at 1:18 pm

Why does humanity allow entities like Vanguard, Blackrock and StateStreet to control/manage 20 trillion $ in assets? Too much power in too few hands is anti-human. And they own each other, with a revolving door of the same people controlling said entities? Gangs of New York on steroids.

#34 The Original Jake on 10.29.22 at 1:26 pm

Excellent write-up. Pump prices may have fallen from their summer peak but have since inched back up. My last fill up shocked me.

Putin’s challenged Ukraine invasion increases the odds of him weaponizing energy this winter. Add in a depleting SPR, cancelled pipelines and we are quickly back to an energy crises, higher inflation… and higher rates.

#35 Is anybody listening? on 10.29.22 at 1:41 pm

Ottawa: Nonsensical. Hypocritical. Disrespectful. Cynical.

From a near-$400,000 hotel bill, to menstrual products in men’s washrooms, to the PM’s assertion that the Ukraine conflict is “absolutely accelerating” Canada’s energy transition, things in our Nation’s Capital continue to get beyond silly.

https://niagaraindependent.ca/ottawa-nonsensical-hypocritical-disrespectful-cynical/

#36 Irish Stew on 10.29.22 at 1:43 pm

Biden did it all for optics.

They cannot afford to have added poor publicity before midterms. – the same reason he asked the Saudi’s to delay their reduction until after midterms.

Our politicians are forgetting they represent the people.
The people are suffering from poor decisions.

American needs to be self sufficient w/ oil.
Begging Venezuela to help is a joke.

#37 The General on 10.29.22 at 1:50 pm

DELETED

#38 Oilbertastan on 10.29.22 at 1:53 pm

Keystone could have been flowing by now… a crazy bad decision

#39 KNOW IT ALL on 10.29.22 at 2:02 pm

BANNED

#40 Trump was right. Again. on 10.29.22 at 2:03 pm

Trump wanted to top up the strategic petroleum reserve back when oil was comparatively cheap. But congress said no.

Trump also told the Germans not to rely on Russian energy. The Germans and all of the media laughed at him. After all, they had wind.

Trump was right about a lot of things. Except possibly the vaccine. Turned out that was not all it was cracked up to be, although it seems to have been better than nothing. But TDS runs strong.

#41 Shawn on 10.29.22 at 2:09 pm

Fibre Optics?

#29 Dogman01 on 10.29.22 at 12:47 pm
#16 Shawn on 10.29.22 at 11:48 am

Shawn , I concur OPEC are Market Makers and benefit the entire industry by creating stability. They did shake the tree of frackers a few years ago .

In the 90’s-2000’s in Calgary, I watched as three companies put in Fibre-Optic lines, they overbuilt capacity as capacity on Fibre Optic was extraordinary (Alien tech from Roswell I suspect). Prices for the service fell fell fell until two of three went out of business and Telus bought up all the Infrastructure. – Last man standing won it all.

Governing Dynamics: Ignore the Blonde – https://www.youtube.com/watch?v=CemLiSI5ox8

Adam Smith was wrong.

*********************************
Thank you. A few of us understand we in Alberta ride OPECs coat tails.

One of the three Fibre Optic companies was I am pretty sure LEDCOR. Seems to me two brothers involved and maybe bankrupted the company.

Nortel too lost big.

I don’t recall if Telus picked up the assets but that sounds logical. Some of it was far from Canada though I think.

Not sure your point on last man standing. Seems pretty normal in business. Winners and losers.

Back around then Nortel was reporting GAAP losses and but big profits on an adjusted basis or whatever term they used. The financial press focused on the adjusted number and claimed they were profitable. They were not. Telus appeared to have low profits due to expensing the cost of getting new subscribers. In reality Telus was the big money maker.

#42 Victor Llearna on 10.29.22 at 2:15 pm

DELETED.

#43 Ron on 10.29.22 at 2:17 pm

High stagflation 5% to 15% yearly rates going up and down is going to be here for many years from higher carbon taxes, higher taxes many municipal, provincial plus federal government, green, environmental UN, EU, China, other world organizations, institutions left communistic, socialist polices plus many other government spending, debt, taxing policies that will keep inflation high and get much worse. Count on it.

#44 jess on 10.29.22 at 2:21 pm

thinking

…”Markov chains are widely used in statistics and computer science to handle sequences of random events, whether they are card shuffles or vibrating atoms or fluctuations in stock prices. In each case, the future “state” – the order of the deck, the energy of an atom, the value of a stock – depends only on what’s happening now, not what happened before.

Despite their simplicity, Markov chains can be used to make predictions about the likelihood of certain events after many iterations. Google’s PageRank algorithm, which ranks websites in their search engine results, is based on a Markov chain that models the behaviour of billions of internet users randomly clicking on web links.”

https://www.bbc.com/future/article/20221019-how-a-magician-mathematician-revealed-a-casino-loophole

#45 Rhana on 10.29.22 at 2:31 pm

The carbon tax under Trudeau, Freeland Liberals just 3 times higher now will cost $1,277 per person. Read it up.

#46 crossbordershopper on 10.29.22 at 2:33 pm

there was a time when canadian oil and gas stocks were the thing, then trudeau kinda killed the whole thing when we went green. I never voted on any green movement or anything but our government did, I think Canadians together all own a pipeline or something, no one ever talks about it, it might never make money, i dont know how a pipeline doesnt make money but govt can figure a way.
Canada could of been something, but I see sub par growth for the long term, we should be talking about junior cdn oil stocks as a portfolio etc. they seem to finally have it right, hedged production, managed growth, dividend cash out to shareholders and buy backs as long as the balance sheet is healty.
an oil business is just like any other business in the end, there has to be a reason to invest capital , for a return ,oil guys dont hate the envionment, the world needs oil 100 million barrels a day and growing, Africa alone by 2050 will have more people than China and India combined, who are we to tell developing countries to hold back growth and not use oil, China will continue to build coal plants while we dilly dally with carbon rebate cheques and blue boxes thinking we are doing something for the environment or something.
Africa collective population growth rate is 4 x a year of Canada entire population of 38 million.

#47 Dragonfly58 on 10.29.22 at 2:33 pm

#5 Sail Away. Here in the Lower Mainland I could not have done that even in 1980. I didn’t become an Tech until the later 1980’s , Trades first. But a good friend went straight into UBC/ Mech. right after High School. Class of 78. Started at about $36 K / year. 5 Acres was $85 – $125 K even then . And a well $10 – $20 K on top of that.
Came close to owning 5 Ac in 1992. A pretty swampy plot out here in Langley. Old, tumble down, Hippy built A frame that was more of a camp out than a house. Very dubious well. When I looked at it it was $150 K asking, it eventually sold for $125. Figured I would be better off saving up for something with a more livable house. Never happened, prices went up a lot faster than savings .Ended up on a double lot surrounded by larger places for $300 in 1995.
About 1.5 -1.75 Million today for a similar 5 Ac. bare land, starting point. 2.5 – 3 gets you something move in ready.

#48 crowdedelevatorfartz on 10.29.22 at 2:44 pm

Fire up the Fracking machines.
Pump toxic goo into the ground under high pressure to push out the last bit of oils and gas….
Who needs drinking water when you have fracked fuel.

Keep the Tar sands and the pipeline on the back burner….just in case.

#49 crowdedelevatorfartz on 10.29.22 at 2:47 pm

Speaking of “Ye”.

When did hundreds of millions of net worth $$$$ cross the line into batshit crazy?

#50 Flop… on 10.29.22 at 3:01 pm

“Are you a Cheese-head?”, they guy bellowed from the Walmart parking lot, in Washington State, as he focused in on my B.C License plate.

I’m not sure, was my puzzled response.

No one had ever explained to me that some Americans, particularly in the northern states, refer to cross-border shoppers as Cheeseheads.

I’ve never just drove across the border to get groceries, but I take minimal stock across the border when I go south on a camping trip, and I make sure load up the fridge on the way back, that’s for sure.

Turns out they’ve got too much cheese down there anyway, 1.5 Billion Pounds in stockpile.

From the article…

“Why So Much Cheese?

Over the last 30 years, milk production in the U.S. has increased by 50%.
Yet, while milk production has climbed, milk consumption has declined. In 2004, Americans consumed the equivalent of about 0.57 cups of milk per day. By 2018, average milk consumption had dropped to 0.33 cup-equivalents.

In response to this predicament, the U.S. government and dairy companies have been purchasing the extra milk and storing it as cheese for years.”

So here’s the convoluted tie in to today’s column.

They’ve got too much cheese, and are depleting their oil reserves.

The only option is to stop all this electric vehicle nonsense, and start making cars that run on cheese.

Picture this, you have a big slab of government supplied Monterey Jack in the back, your hungry, the cars hungry, you pull over at a rest stop, rip a handful off and chow down, you shove some in the tank, this is the stuff rednecks dream about.

Their favourite new Monster Truck will be named The Grater…

M48BC

https://www.visualcapitalist.com/us-cheese-stockpile/

#51 Nonplused on 10.29.22 at 3:05 pm

Ah, energy. Such a topic. So much to know, so important, yet we are dealing with a public that generally believes electricity comes from a wall socket and gas stations “make” gasoline. It’s sort of like health care. We keep doing all the wrong things because the public can only understand simplistic solutions.

For example, you can’t “fix” healthcare because the public can understand “taxing the rich” a lot easier than they can understand all the things that would be necessary to deliver real world solutions that are available now. Likewise you can’t fix energy because the public can understand “greedy oil companies” a lot better than geology, economics, politics, thermodynamics, and depletion.

But let’s dig in. If you want references, use Google. Or Duck Duck Go, they tend to memory-hole things less. It’s all right there in your hand and I don’t have time.

The first thing to understand is energy is everything. Resources more generally, but sufficient energy usually leads to sufficient other resources. It is safe to say energy IS the economy, not the other way around. This is beyond proof if you look into it. GDP and energy consumption has a 98% correlation, which is as close to fact as you can get statistically.

Energy also equals technology. iPhones don’t charge themselves, and they come from a factory, powered by energy and using resources that can be expressed as energy.

So three axioms to keep in mind as I continue are:

1. Energy = resources.
2. Energy = the economy.
3. Energy = technology.

The 4th one, a bit harder to prove to those who are not students of history, is that resources = geopolitics. Whether you are studying the fall of Rome or the root causes of WWII, it is access to resources that underlies most large scale human tragedy. So,

4. Energy = politics.
5. Energy = war. (inversly)

Mankind has over the last 200 years consistently improved the availability and density of energy, and thus everything else. We’ve gone from biomass (dung, wood), to wind and water, to coal, to oil & gas, to nuclear. But for various mostly political reasons the transition to nuclear has stalled out and a reversion to low density wind and water has been proposed, with detrimental results. We’ve wasted a lot of time and money on something we know just won’t work except in very limited circumstances and at very limited scale.

So we are stuck with oil & gas, and to some extent coal.

But we also know these resources are not renewable. We’re running out. I don’t care where you think the oil came from, the standard theory that has proven very useful for finding it, or some sort of abiotic nonsense, it doesn’t matter. It is running out. And it is not uniformly found in nature. Nature put it in some places and not others.

Much of the cheap and easy oil and gas in prime locations is already gone. We aren’t fracking every well 10,000 feet down, drilling offshore, developing tar sands, and importing oil because we want to. We don’t have a choice. Our marginal barrels are no longer cheap. In short, the western economies have already used up all of their “cheap oil”. The oil we have left is expensive. Some cheap oil is still on production, but it too will run out. No more is to be found.

(Please don’t use the “there is always more!” argument. Yes, I am aware that no matter how many times you vacuum there are still some bread crumbs. The point is every time there is less until the amount remaining is inconsequential.)

So where is the remaining cheap oil? Well, mostly in OPEC+ countries, primarily Saudi Arabia and Russia. Not good from a geopolitical point of view. And we can’t do without it. Europe is about to prove that point. Watch this winter very carefully. Even if they skirt through, pay careful attention to what they have to do to make it.

The western empire will, as all empires always have, take those resources it needs. Preferably through trade and economics, but by force when necessary. The history of every war is written as such. Except maybe Vietnam. I’m not sure anybody knows what that was about.

We also know that sanctions are always a prelude to war. Sanctions are war, fought another way. Sanctions are designed to defeat an opponent with non-military means. But when they fail, the armies take over. As they say, “when goods no longer cross boarders, armies do”.

This is why the stated objectives in the Ukraine war seem to have so little to do with Ukraine. It’s because they don’t. Nobody really cares which corrupt government claims sovereignty over eastern Ukraine. Nobody has really controlled the area since at least 2014, and probably a lot longer than that. The people who live their have their own ideas.

But Russia on the other hand, there is a target. There are vast resources there. Important resources. Europe has been invading Russia in an effort to gain control of those resources for hundreds of years. They are attempting to do so again. That is why a negotiated settlement to this conflict is off the table. It has little to do with Ukrainian democracy. It is quite a stretch to argue that there was ever any democracy in Ukraine. Whenever it does rear its head, it is quickly suppressed.

So what can we take from all of this? Well, we were already in a fair amount of energy trouble just due to geology and depletion. Now the problem has become artificially acute due to politics. War is not just on the horizon, it is underway. The war will not end until one of the combatants realizes their objectives. For the west, that means either subjugation of Russia on western terms, or the excommunication of Russia from the world economy and learning to live without them.

In a nuclear armed conflict, this is the most dangerous of wars. But the resolve on both sides is to the death. The US has already publicly stated that they are free to use nuclear weapons in response to non-nuclear strategic threats. We already knew that this was the Russian position also. This is beyond dangerous.

Buy all the things. Especially energy. And live each day as if it might be your last. That was always good advice, as nobody ever knew when they were going to check out or why, or even where. But now more than ever. But continue to do business as if you will live forever. (Yes, I know it’s a quote. Use your Google.)

(I’m so tired of the “Sources!” cry. The people who use it know you can cite sources. They are merely trying to derail the conversation.)

#52 Doug Rowat on 10.29.22 at 3:22 pm

#40 Trump was right. Again. on 10.29.22 at 2:03 pm

Trump wanted to top up the strategic petroleum reserve back when oil was comparatively cheap. But congress said no.

—-

The maximum capacity of the SPR is only a little more than 700 million barrels, not far from levels it was at when he was president, so it’s hard to argue that this would have mattered.

—Doug

#53 Old Boot on 10.29.22 at 3:29 pm

On stranding and nationalization of strategic assets such as oil. Trudeau purchasing the Transmountain pipeline ringing any bells?

https://michaelshellenberger.substack.com/p/top-dems-urge-biden-to-nationalize

#54 ElGatoNeroYVR on 10.29.22 at 3:37 pm

#25 Sail Away on 10.29.22 at 12:27 pm
No, no pain. It’s really easy to just step across the border. Sometimes the grass actually is greener.
==========
Is it though ? As a Canadian citizen only I get asked tons of very detailed and pointed questions when I travel to the US (even for training) . For most people getting a US work Visa is all but impossible , not even mentioning a green card . Would you even be able to get a driving licence or legally buy a gun in the US as a non-US resident ?
Not saying it is impossible and clearly for a very small percentage of well educated Canadians your advice is spot on , just not for most.
Also you keep giving these examples of houses in the middle of nowhere as if it was the choice for most people , it is not. Yes ,some people like to live on an acreage , or in a cabin in the mountains , or in small town ; I respect that and wish them(you) hapiness.
For myslef personally and a good portion of others this would not be the lifestyle of choice , actually it would be a nightmare.
Point is that not everyone lives the same way and the advice to relocate in the bunny patch or bear territory or South of the border is just not realistic or desirable.Don’t lose sight of the fact that you are in a fortunate situation as a dual citizen.
My work as well as tourism has taken me to visit a few small and medium sized cities in the US and I would never ever want to live there. Granted I did well for myslef and my family right here at home , in Canada.

#55 Faron on 10.29.22 at 3:38 pm

#85 Dharma Bum on 10.29.22 at 7:21 am
#44 Faron

You forgot to add some tripe about micro aggressions, safe spaces, being triggered, etc.

Your micro-self sounds aggressively triggered, sane people will give you some space for our own safety.

Like that?

The degree to which you all are triggered by the shared ideologies with the wack job who bludgeoned Pelosi is… Interesting.

#56 kommykim on 10.29.22 at 3:52 pm

RE: Jeff Eshelman, president and CEO of the Independent Petroleum Association of America, may have made the most stinging criticism of Biden’s current use of the SPR

=======================================

If anything, this should bolster the consumer’s confidence in Biden’s decision. I’ll bet this is cutting into PAA member profiteering.
I know that’s not what they were designed for, but drawing on the reserves while oil prices are high and filling them when prices are low kind of makes sense eh?

#57 Brian on 10.29.22 at 4:29 pm

#56 kommykim
Better check your facts!

Average price paid for oil in the Reserve – $29.70 per barrel

https://www.energy.gov/ceser/spr-quick-facts

#58 Ed on 10.29.22 at 4:34 pm

He could have had Keystone XL except for global warming or something.

#59 Sail Away on 10.29.22 at 4:52 pm

Re: fracking and making your own luck

My uncle made his fortune by recognizing opportunity in a less-desirable location. The North Dakota fracking boom was heating water via propane in winter in uninsulated tanks, so he hauled in a spray insulation machine and made a deal with the extraction company that he would cover all costs to sprayfoam insulate one tank on a test basis, then split propane savings 50:50. The propane usage difference was astronomical, so he moved completely into the sprayfoam business, later adding rhino liner for abrasion resistance, all while continuing to reap profits from the one early tank experiment.

Eight years of expansion later, he sold the company for $12M.

#60 Linda on 10.29.22 at 4:54 pm

Doug, your post underlines what has been happening for quite some time now: politicians making macro-economic decisions not based on actual consumer need, but instead to bolster or shore up some perceived political outcome. When the leadership signals that ‘what’s in it for me’ is the top priority, no wonder the average citizen acts in the same way.

#61 Phylis on 10.29.22 at 4:57 pm

They were draining the reserve when oil price went negative? Woulda shoulda coulda pumped it up to 800m+ then? (2020). There is so much I don’t understand.

#62 Boomer Bill on 10.29.22 at 5:12 pm

#5 Sail Away

Compare and contrast US real estate experience vs Canadian…
______________________________________________________

Will do. Inlaw’s estate was north of 10 million due in part to a commercial property bought a half century ago and sold to developers. Better half and I didn’t need the money so we passed it on to our kids. Millionaires before they turned 30….

#63 Yukon Elvis on 10.29.22 at 5:31 pm

#55 Faron on 10.29.22 at 3:38 pm
#85 Dharma Bum on 10.29.22 at 7:21 am
#44 Faron

You forgot to add some tripe about micro aggressions, safe spaces, being triggered, etc.

Your micro-self sounds aggressively triggered, sane people will give you some space for our own safety.

Like that?

The degree to which you all are triggered by the shared ideologies with the wack job who bludgeoned Pelosi is… Interesting.
“””””””””””””””””””””
Automated response do not reply. This is a public service from the Greater Tool Assburger Syndrome Watch.

Congratulations. One a scale of one to ten this post merits 5 assburgers. Keep up the good work.
Admin.
.

#64 Reality is stark on 10.29.22 at 5:46 pm

Biden was right.
Putin has been living on high oil prices and funds his military with oil money.
This year the Russian economy will contract 10%, so let’s make sure they continue to feel the pain.
Next year they go down 25%, a severe depression. Let oil prices revive a bit NEXT YEAR. Keep the pressure on this despot this year.
A bully has lots of plans until that little 5 foot 6 Napoleon gets punched in the face and finds out what Waterloo is all about.
I bet Klitshco would rip his lungs out.
We should be training Ukrainian pilots on F-16 and F-18 jets and gifting them as well as the defunct Hawk missile systems and the 180 mile single rocket HIMARS systems IMMEDIATELY.
We should also consider fast tracking new weapons systems from Northrop Grumman, Raytheon etc., and bypass the costly US Army approval systems. I am sure the Ukrainian government would waive any mishap liability issues.
A win/win for everyone but especially the American taxpayer.
This would be a fabulous time to let the Russian public know their losses will escalate exponentially using obsolete US weapons.
I believe it is time we treated the Ukrainian military with respect and gave them full access to technology that any NATO nation would enjoy instead of treating them like a second class operation.
These guys have earned the best we can offer, they have been pleading for more and they have earned the right to fly F-35’s but we are too smug to give them the equipment to win this war by the end of next year.
What a tragedy.

#65 Penny Henny on 10.29.22 at 5:47 pm

Scattered about Texas and Louisiana in vast underground salt caverns are hundreds of millions of barrels of oil.
/////////////

Seriously? Won’t the oil get salty?

#66 Penny Henny on 10.29.22 at 5:49 pm

And yesterday’s #5 Faron, miss a day miss a lot.
You never know when he is going to go complete train wreck and you won’t want to miss that. So much fun to watch though.

#67 Wrk.dover on 10.29.22 at 6:15 pm

Nice post! Makes me feel warm and fuzzy about putting another 1% of my worth into seven energy cos Thursday 10% late by a week, and down Friday.

Earnings to follow, for sure.

Here’s a link to what Garth’s peaceful blog moderation has become:

https://howardlindzon.com/welcome-to-hell-elon/

Think twice before you rant here folks, this is a good man’s hobby blog, not Q-Anon.com.

#68 Wrk.dover on 10.29.22 at 6:18 pm

Seven more energy cos: edit

#69 Diversified in Mississauga on 10.29.22 at 6:22 pm

We should not complain about gas prices here in Canada, or the U.S. for that matter.
I just came back from Germany and paid $2.40/litre for regular. Doesn’t sound too bad, but this is EURO’S! That works out to $3.26 CAD/litre.
But what you don’t see EVER on the Autobahn is a pick-up truck. As Elon would say, “Let that sink in.”

#70 XOM on 10.29.22 at 6:32 pm

Exxon can get production to a million barrels of oil per day in Guyana, a former Dutch colony in South America.

Exxon is getting the permits approved faster than the Guyanese people getting their licenses renewed at the tax office.

#71 Søren Angst on 10.29.22 at 6:35 pm

I might get my wish for the rebound happening around Halloween.

https://www.google.com/finance/quote/.DJI:INDEXDJX?window=YTD

Then again, US Fed FOMC meet next week Nov. 1, 2 and again in Dec so not holding my breath … but it would be nice that the rebound has started.

Probably 75 bps seem to be the consensus from the US Fed.

Then Canada, queue

PURCHASING POWER PARITY

Watch your exchange rate go down further (small bounce when BoC raised its rate recently)

https://www.google.com/finance/quote/CAD-USD?sa=X&ved=2ahUKEwjM8K7Vvob7AhU3YPEDHTcFAzwQmY0JegQIBhAc&window=YTD

and imports rise in price from the US, hello Inflation.

Brought to you by the …

Bank of Canada

where Macklen et. al. skipped PPP class that day.

#72 jess on 10.29.22 at 6:39 pm

more financial education ?

Ernst & Young to Pay $100 Million Penalty for Employees Cheating on CPA Ethics Exams and Misleading Investigation
Largest Penalty Ever Imposed by SEC Against an Audit Firm

FOR IMMEDIATE RELEASE
2022-114

Washington D.C., June 28, 2022 —

SEC Charges 16 Wall Street Firms with Widespread Recordkeeping Failures
Firms admit to wrongdoing and agree to pay penalties totaling more than $1.1 billion

Washington D.C., Sept. 27, 2022

https://www.sec.gov/page/news

SEC imposed 13 fines > 100m on public companies during its latest fiscal year that ended sept.30th (wsj)
========
According to BEA data, the Personal Savings Rate in the U.S. now stands at 3.5 percent, exactly where it stood in August of 2008 –

#73 Wrk.dover on 10.29.22 at 6:43 pm

#51 Nonplused on 10.29.22 at 3:05 pm
Vietnam. I’m not sure anybody knows what that was about.
_____________________

Culling Hippies was my take, as one, at the time.

I didn’t understand corporations and lobbyists yet.

Still, that’s what it was….
M69NS

#74 crowdedelevatorfartz on 10.29.22 at 6:47 pm

A big boat in little Halifax

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiohtK9wob7AhWPADQIHfOpA-gQvOMEKAB6BAgMEAE&url=https%3A%2F%2Fwww.saltwire.com%2Fatlantic-canada%2Fnews%2Famerican-aircraft-carrier-uss-gerald-r-ford-leads-strike-group-into-halifax-for-port-visit-100788386%2F&usg=AOvVaw1M4TdHndI3J5kSUgg8bAQp

#75 fishman on 10.29.22 at 6:48 pm

There’s been a lot of grain moving out of Vancouver harbour lately. And apparently a lot more grain ships lined up too. I didn’t think the crops were that good this year. Kept hearing about lack of rain. Maybe grain from last year? Maybe Bayer aspirin people worked their magic with GMO’s & Roundup. You do know you need acetylsalicylic acid to make heroin out of morphine! Northern California rice crop is half of last year. I wonder how the pulse crops in the prairies turned out?
Anyways the Ukes just bombed some Ruskie ships in the Black Sea. Russia has nixed the grain export deal. All they have to do now is sink a couple grain ships which is easy enough & the insurance companies will freak. Sailors too. Prices going uppa, uppa, uppa.Everybody stocked up their pantry for the winter? right? Oops, too bad B.C. doesn’t have any canneries left. I coulda turned you on to some premium canned tuna & salmon. Looks like you’ll have to get your cans from China after they’ve worked their magic with our fish. My private stock is reserved for family & friends. Sorry.

#76 SW on 10.29.22 at 6:50 pm

Just watched an old George Carlin piece about politicians being only interested in keeping and expanding their own power. He was right and most of what he said back then is just as applicable today if not more. It’s not by coincidence the SPR release ends just before mid terms.

#77 Sail Away on 10.29.22 at 6:53 pm

#62 Boomer Bill on 10.29.22 at 5:12 pm
#5 Sail Away

Compare and contrast US real estate experience vs Canadian…

———

Will do. Inlaw’s estate was north of 10 million due in part to a commercial property bought a half century ago and sold to developers. Better half and I didn’t need the money so we passed it on to our kids. Millionaires before they turned 30….

———

Sure, massive inheritance. I guess that’s also equally available to young folks with drive and ambition.

#78 jess on 10.29.22 at 7:01 pm

Ukraine lost 90% of wind power and 50% of solar power due to Russian attacks Ukrinform agency.

October 29, 2022
EU Commissioner Says Almost $17 Billion In Russian Assets Frozen

Westinghouse to build in poland nuclear

#79 Wrk.dover on 10.29.22 at 7:02 pm

#74 crowdedelevatorfartz on 10.29.22 at 6:47 pm
A big boat in little Halifax
________________________________________

Find the CTV (ATV) news fluff piece from this evening.

#80 TurnerNation on 10.29.22 at 7:22 pm

Hellow I am a reclusive Billionaire with exactly
$6.66 billion to be invested.
I however do require my advisor/adviser to be displaying pronouns in their email signature.

The three pillars of successful investment.: prospectuses, profits, pronouns.

#81 Søren Angst on 10.29.22 at 7:25 pm

Off topic.

So Elon says they will have a review committee about who to reinstate, what’s OK and not, etc. etc.

Of course, the batsh!t Right knows what that means and that their last couple of days of frolic on Twitter might come to an end.

So Jack Posobiec (1.8M followers), Righty at Large, decides to encourage them to let loose while they still can (again, CAUTION for the Milquetoast and there’s 1 in there about what happens to your kid in a Blue state … too funny)

https://twitter.com/JackPosobiec/status/1586423532879478785

… meanwhile, Elon discovers carbs.

https://twitter.com/elonmusk/status/1586411481574166528
https://twitter.com/elonmusk/status/1586410852646674432

What can I tell you other than it’s a crazy World that can be a lot of fun at times.

#82 Søren Angst on 10.29.22 at 7:48 pm

RE: Off Topic

OMG.

They cut Jack Posobiec’s Tweet off.

Most of the juicy Bats!t Crazy Right Replies are gone.

So much for free speech at Twitter with Elon in charge. Must be some lingering subversive Lefty still working at Twitter.

Darn. Oh well. Fun while it lasted.

#83 Doug Rowat on 10.29.22 at 7:52 pm

#51 Nonplused on 10.29.22 at 3:05 pm

…But let’s dig in. If you want references, use Google. Or Duck Duck Go, they tend to memory-hole things less. It’s all right there in your hand and I don’t have time….

—-

You just posted a comment as long as War and Peace. I’d say you have all the time in the world.

—Doug

#84 Ronaldo on 10.29.22 at 8:07 pm

#21 Quintilian on 10.29.22 at 12:11 pm
When you get a flat, you use your spare, until you get to place where the leak can be fixed.

That is the purpose of the spare.
—————————————————————-
So what do you do if your spare is out of air and there’s nowhere to get air?

#85 DON on 10.29.22 at 8:11 pm

Regarding Tatiana’s blog post yesterday.

I gave my 12 year old $5 for reading the blog and summarizing what he learned.

Could get a staggering ROI back.

#86 an investor on 10.29.22 at 8:25 pm

40 Trump was right. Again. on 10.29.22 at 2:03 pm

Trump wanted to top up the strategic petroleum reserve back when oil was comparatively cheap. But congress said no.

—-

The maximum capacity of the SPR is only a little more than 700 million barrels, not far from levels it was at when he was president, so it’s hard to argue that this would have mattered.

—Doug

Wasn’t America energy independent when Trump was in the White House? Wasn’t gas less than $1.80 per gallon?

Your politics and the contempt you feel for Donald Trump are clouding your judgement.

If you’re betting that America is going to collapse, think again.

#87 Ronaldo on 10.29.22 at 8:29 pm

#30 The General on 10.29.22 at 12:53 pm
Electric cars have been around for a long time. Why was this technology snuffed out so long ago? And steam power had lots of potential. Model T cars could be run on alcohol. Henry Ford envisioned farmers creating their own alcohol fuel to power their tractors. Rockefeller, I’m guessing, was a prohibition supporter. Kind of like the hemp prohibitionists which followed.
——————————————————-

https://www.energy.gov/articles/history-electric-car#:~:text=Around%201832%2C%20Robert%20Anderson%20develops,an%20English%20inventor%20in%201884.

#88 Quintilian on 10.29.22 at 8:33 pm

“Global financial stability risks have increased amid a series of cascading shocks”

Obviously, these people are not infallible, but can be certainly be taken more seriously than a couple of the prolific posters on this blog.

Ronaldo 84:
So what do you do if your spare is out of air and there’s nowhere to get air?

Nothing, if everybody is in the same boat.

#89 Stock picking bad on 10.29.22 at 8:47 pm

This all sounds like evil stupid crazy cowboy stock picking to me. Garth has always been a ‘Hate stocks as a strategy’ guy. Evil to talk of oil, Canadas curse. No money here, look away.

#90 Flop… on 10.29.22 at 8:48 pm

Not sure how many cities in Canada have a homeless problem, Vancouver, we mix homelessness and steroids with outstanding results.

Was poking around online and saw a story about a company named Pallet supposedly banging out tiny houses for the homeless for $7,500
USD.

I don’t know if Vancouver can afford that, we prefer to hose our taxpayer money on $750k public toilets, correction, 750k for one toilet not that long ago, 7.5k for a shelter, 750k for a toilet, 100 times more, that currency exchange is a killer.

Apparently they built a village in Sonoma County for people in just ten days, probably still be voting in it in 10 days here, I’ve been here 20 years starting on the downtown Eastside in a hostel, things only seem to have gotten worse.

Here’s the website

https://palletshelter.com

Inflation is ripping, rents are exploding, I tried to think back on my Flop Drops journey about what was the cheapest transaction I had seen this year if you wanted to shelter yourself.

I remember a couple of months ago someone paid 35k for a manufactured home that needed a bit of work out Langley way.

Here’s what they got for 35k

https://www.zealty.ca/mls-R2690519/58-3031-200-STREET-Langley-BC/

They were originally asking 178k, and I remember thinking at the time good for them, and I hope it works out for them.

This is normally the time in my post where I work out that I don’t know what point I’m trying to make, so I just decide to wrap it up…

M48BC

#91 Ponzius Pilatus on 10.29.22 at 9:03 pm

#84 Ronaldo on 10.29.22 at 8:07 pm
#21 Quintilian on 10.29.22 at 12:11 pm
When you get a flat, you use your spare, until you get to place where the leak can be fixed.

That is the purpose of the spare.
—————————————————————-
So what do you do if your spare is out of air and there’s nowhere to get air?
————-
Never cars have flat tire sensors.
After the red light comes on, you’ve got 80 kms.
But is requires special tires, which costs more.
A gimic almost as bad as the “rain sensor”.

#92 Born in Hamilton on 10.29.22 at 9:38 pm

Biden’s inauguration was in January 2021, not 2020 as the article states. Unfortunately, this means that his four-year term isn’t even half over yet.

#93 Faron on 10.29.22 at 10:38 pm

#75 Yukon Elvis on 10.29.22 at 12:13 am
#70 What a Clown on 10.28.22 at 10:18 pm
#63 Yukon Elvis on 10.29.22 at 5:31 pm

Hey, cool. More ad hominem abuse. And you guys wonder where I learned it and why it comes so easy hereabouts?

On a lighter note, ran my Mt. Finlayson loop this eve to begin training for some upcoming races. Not at my fastest, but bopping down a trail feels mighty fine. Averaging around 15kms of running and walking per day for some months now. Maybe grind out Plain 100 next year.

#94 millmech on 10.29.22 at 10:44 pm

Mr Rowat
I guess one should keep adding with Baytex, Cardinal, Gear, Athabasca, Meg.
With the SPR needing replenishing and oil cutbacks by OPEC will this create more inflation?

#95 Ronaldo on 10.29.22 at 10:48 pm

#74 crowdedelevatorfartz on 10.29.22 at 6:47 pm
A big boat in little Halifax

The USS Gerald Ford.

Just think, Canada could have built 30 of those for the 400 billion that was divvied out in 2020. Or, it could have build 4000 hospitals at an average cost of say $100 million. Or 5000 F35s. Or 80,000 km 4 lane hiway. Let that sink in.

#96 Faron on 10.29.22 at 11:31 pm

#92 Born in Hamilton on 10.29.22 at 9:38 pm

Trump: promises foxconn plant that never gets built

Biden: Helps pass legislation leading to two Intel plants being built in the midwest among many other benefits.

So, you are telling us you don’t like leaders who get programs passed and running?

#97 Ronaldo on 10.29.22 at 11:43 pm

#91 Ponzius Pilatus on 10.29.22 at 9:03 pm
#84 Ronaldo on 10.29.22 at 8:07 pm
#21 Quintilian on 10.29.22 at 12:11 pm
When you get a flat, you use your spare, until you get to place where the leak can be fixed.

That is the purpose of the spare.
—————————————————————-
So what do you do if your spare is out of air and there’s nowhere to get air?
————-
Never cars have flat tire sensors.
After the red light comes on, you’ve got 80 kms.
But is requires special tires, which costs more.
A gimic almost as bad as the “rain sensor”.
———————————————————–
Well, my old truck doesn’t have one of those fancy rigamajigs but I know I can always call BCAA. Never failed me yet.

#98 Summertime on 10.29.22 at 11:55 pm

European prices of natural gas and overall energy prices are diving, despite having no imports from Russia.
The gas depots are full, Europe can not even process the LNG tankers and store the gas, there is that much alternative supply coming in.

There goes the myth of cold winters, etc. maybe except for Britain due to their inflation and overall economic problems (caused primarily by excessive debt), that Britain experience is soon coming to other over indebted countries.

Europe produces 40 % of its energy from renewables plus it has huge capacity in reserve in the form of coal and idle coal plants, idle nuclear plants etc.

Plus oil is easily transportable.

So I would not worry about Europe being cold and hungry.

But the picture of future energy prices is worrisome.
Ontario and Quebec buy oil on the world markets so further inflation is quarantined. Only Alberta will profit from higher prices.

So with these new coming inflation what will Chicken Little at BOC do? Stop increasing rates as inflation is ‘crushed and subdued’, that is pretty much guaranteed.

Even though we are yet to face the real inflation problem with inflation persistently high for a very long time. To fight inflation we much have nominal rates higher than the real inflation, that is in double digits, not the fake CPI.

Expect more lies and excuses from central ‘bankers’.
the

#99 The General on 10.30.22 at 1:24 am

#64- Reality is stark: You’re really itching to see some mushroom clouds, bud. Have you signed up yet to fly one of them f-35’s? It’s more like the charge of the light brigade Ukrainian style over there.

#100 Doug Rowat on 10.30.22 at 1:47 am

#92 Born in Hamilton on 10.29.22 at 9:38 pm

Biden’s inauguration was in January 2021, not 2020 as the article states.

—-

Correct. Perhaps I was harkening back to simpler times. Pre-Covid, pre-Ukraine. And back when Ye was only mostly crazy.

The drawdown from the SPR since Biden’s inauguration (January 2021) is correct however.

—Doug

#101 Wrk.dover on 10.30.22 at 7:00 am

#89 Stock picking bad on 10.29.22 at 8:47 pm
This all sounds like evil stupid crazy cowboy stock picking to me. Garth has always been a ‘Hate stocks as a strategy’ guy. Evil to talk of oil, Canadas curse. No money here, look away.
_________________________________

I woke up and smelled the coffee.

How many countries in the world have a massive domestic energy market with readily available shares on the local market in their own currency?

Canada eh?

#102 Boomer Bill on 10.30.22 at 7:50 am

#77 Sail Away on 10.29.22 at 6:53 pm
#62 Boomer Bill on 10.29.22 at 5:12 pm
#5 Sail Away

Compare and contrast US real estate experience vs Canadian…

———

Will do. Inlaw’s estate was north of 10 million due in part to a commercial property bought a half century ago and sold to developers. Better half and I didn’t need the money so we passed it on to our kids. Millionaires before they turned 30….

———

Sure, massive inheritance. I guess that’s also equally available to young folks with drive and ambition.

—————————————————————-

I know of plenty of young people who are doing quite fine away from big city centers in Canada as well in addition to the ones who have been helped big time by parents in major centers. If you want to extend your comparison you should also include the wonderful cost of health insurance States side versus Canada. A young family member was treated at Princess Margaret about a decade ago and got in touch via social media with young people in the States with the same types of cancer. The US folks couldn’t wrap their minds around the fact that this family member was being treated at one of the top 5 cancer research hospitals in the world and not being billed for it whereas they were incurring hospital bills in the 100s of thousands.

#103 Ponzius Pilatus on 10.30.22 at 7:54 am

97 Ronaldo on 10.29.22 at 11:43 pm
#91 Ponzius Pilatus on 10.29.22 at 9:03 pm
#84 Ronaldo on 10.29.22 at 8:07 pm
#21 Quintilian on 10.29.22 at 12:11 pm
When you get a flat, you use your spare, until you get to place where the leak can be fixed.

That is the purpose of the spare.
—————————————————————-
So what do you do if your spare is out of air and there’s nowhere to get air?
————-
Never cars have flat tire sensors.
After the red light comes on, you’ve got 80 kms.
But is requires special tires, which costs more.
A gimic almost as bad as the “rain sensor”.
———————————————————–
Well, my old truck doesn’t have one of those fancy rigamajigs but I know I can always call BCAA. Never failed me yet.
———————
Yeah,
The BCAA Card.
Don’t leave home without it.

#104 IHCTD9 on 10.30.22 at 9:01 am

#97 Ronaldo on 10.29.22 at 11:43 pm

Well, my old truck doesn’t have one of those fancy rigamajigs but I know I can always call BCAA. Never failed me yet.
———

Last flat I had was on my trailer on the 401 westbound near midnight. No spare, no CAA, no phone. I just kept going (it was a tandem axle so the rim never hit the pavement). The tire deconstruction over the next hour of driving was epic, good enough for a photo.

#105 crowdedelevatorfartz on 10.30.22 at 9:06 am

@#99 General mayhem.
“It’s more like the charge of the light brigade Ukrainian style over there.”

+++
Yep.
Only it’s the Russians “Not reasoning why. Theirs is but to do and die”
And they are dying by the tens of thousands.
They seem to be dutifully following the orders of a corrupt dictator.
Eventually they will have enough.
Fear only works for so long before Putin’s own people will push back.

I’m just curious.
Does the Russian govt pay you in Rubles or good old USA greenbacks?

#106 millmech on 10.30.22 at 9:15 am

Mr Rowat
Any idea what the return is on the new Ukrainian Aid Bonds that Canada just issued?
Thanks

#107 crowdedelevatorfartz on 10.30.22 at 9:23 am

@#95 Ronaldo
“Just think, Canada could have built 30 of those for the 400 billion that was divvied out in 2020. Or, it could have build 4000 hospitals at an average cost of say $100 million. Or 5000 F35s. Or 80,000 km 4 lane hiway. Let that sink in.”

+++
Unfortunately the bureaucrats in Ottawa don’t think, or work, that fast.

It took 11 yyears and endless meetings for the unnecessary, unaccountable, anonymous drecks of Govt to decide what type of sidearm our military will purchase for its thousands of missing soldiers…….

As one of the people involved in the entire agonizingly slow, interminable process complained,
” No one was in charge, no one was accountable…..”

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwiY-4fPhIj7AhWCMDQIHYo0DxYQFnoECBsQAQ&url=https%3A%2F%2Fnationalpost.com%2Fopinion%2Fmatt-gurney-on-military-sidearms&usg=AOvVaw3lJ4-NP5q0uJt04deBk2iR

11 years to choose a sidearm for thousands of soldiers that they cant find.

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwi-_pH7hIj7AhViHTQIHQm5CvYQFnoECBcQAQ&url=https%3A%2F%2Fwww.ctvnews.ca%2Fcanada%2Fmilitary-sounds-alarm-over-recruiting-problems-as-canadians-steer-clear-1.6083496&usg=AOvVaw15Kq2oiztB-RHHI17Bk4hz

Nah.
Even $400 Billion dollars won’t solve Canada’s worst problem.

Analysis paralysis.
The govt would spend $200 Billion of that money hiring more federal employees ( Women, Aboriginals, LGBTQ first in line in all Federal Govt hiring processes .) to study why it takes so long to spend the other $200 Billion.

Our tax dollars down the trough into the drain.

#108 Brett in Calgary on 10.30.22 at 9:38 am

Doug, how do you see higher for longer energy prices impacting Japan/Germany (two top 5 economies)?

#109 SoggyShorts on 10.30.22 at 10:37 am

#102 Boomer Bill on 10.30.22 at 7:50 am
#77 Sail Away on 10.29.22 at 6:53 pm
#62 Boomer Bill on 10.29.22 at 5:12 pm
#5 Sail Away

Do Americans with good health insurance really pay “100s of thousands” for cancer treatment?
I mean insurance at 500-1,000 per month sounds crazy to us, but if houses are 500K less, and jobs pay 50k more, etc who cares? Just get insured, no?

#110 Mikey on 10.30.22 at 11:05 am

40 Trump was right. Again. on 10.29.22 at 2:03 pm
——-
You will NEVER here that from the MSM. So corrupt.
He also sat with Zilinsky warning about major issues with Russia. The Ukrain is one of the most corrupt countries in the world. My granny and gramps came from the Ukrain to escapes Hitlers crazy..
I sure ain’t giving Putty a pass. Nothing is atj it appears on the news.

Looks like a rally will be a bear market rally only.
I do believe the governments will not be able to service the debt with ballooning interests rates. That could make things ugly.
I think they hold on another rate increase as the delayed affects of these increases have yet to be seen.
This IMHO is a time to plan for bad and hope for the best.
But Im not optimistic. I think major stagflation and that ain’t good for the working class.

#111 Mikey on 10.30.22 at 11:16 am

130 trillion in global debt.
Govs everywhere are broke.
They like creating Word war so they can default on their debts.
Evil really.

#112 Linda on 10.30.22 at 11:23 am

#75 ‘fishman’ – Canada’s prairies actually had a decent crop yield this year, mainly due to much needed moisture occurring early in the growing season. Then an extended warm autumn allowed the crops to be harvested in a timely manner. Now, it is true that drought conditions are occurring in much of Alberta & Saskatchewan (Manitoba mainly had issues with excess moisture this year). The early season moisture allowed a good crop this year. Whether drought conditions will alleviate in 2023 in time to allow another decent yield is anyone’s guess at this point. Right now, not looking very promising.

#113 DON on 10.30.22 at 11:52 am

#97 Ronaldo on 10.29.22 at 11:43 pm
#91 Ponzius Pilatus on 10.29.22 at 9:03 pm
#84 Ronaldo on 10.29.22 at 8:07 pm
#21 Quintilian on 10.29.22 at 12:11 pm
When you get a flat, you use your spare, until you get to place where the leak can be fixed.

That is the purpose of the spare.
—————————————————————-
So what do you do if your spare is out of air and there’s nowhere to get air?
————-
Never cars have flat tire sensors.
After the red light comes on, you’ve got 80 kms.
But is requires special tires, which costs more.
A gimic almost as bad as the “rain sensor”.
———————————————————–
Well, my old truck doesn’t have one of those fancy rigamajigs but I know I can always call BCAA. Never failed me yet.

*********

BCAA works great…except when they told my friend they wouldn’t tow her dual wheel truck wasn’t covered.

#114 Doug Rowat on 10.30.22 at 12:03 pm

#86 an investor on 10.29.22 at 8:25 pm

Your politics and the contempt you feel for Donald Trump are clouding your judgement.

If you’re betting that America is going to collapse, think again.

—-

SPR capacity is just factual, my post is critical of Biden and our clients have substantial US exposure.

Never mind.

You enroute to Comet Ping Pong?

—Doug

#115 Ponzius Pilatus on 10.30.22 at 12:24 pm

Re: Oil
Does Alberta have any museums and/or any famous oil paintings that the “stop oil” protesters could target?

#116 crowdedelevatorfartz on 10.30.22 at 12:41 pm

@#110 Mikey
“The Ukrain is one of the most corrupt countries in the world. My granny and gramps came from the Ukrain to escapes Hitlers crazy..”

“They like creating Word war so they can default on their debts.”

+++
History is a challenge for you .
I get it.
The debt is still there after the shooting stops.

Your comments remind me of a famous saying….

Abraham Lincoln – Quote – Better to remain silent and be thought a fool than to speak and to remove all doubt

#117 Dragonfly58 on 10.30.22 at 12:47 pm

#109 SoggyShorts. The insurance premium vs wages vs cost of living ratio is good when you are relatively young. The premiums climb significantly as you age or have expensive claims. Eventually, if you have had serious problems they won’t even cover you or impose lifetime maximum cost coverage.

#118 crowdedelevatorfartz on 10.30.22 at 1:17 pm

@#112 Linda
“Whether drought conditions will alleviate in 2023 in time to allow another decent yield is anyone’s guess at this point. Right now, not looking very promising.”

+++
Its raining buckets in the Lower Brainland.
( The Media sexes it up by calling torrential rain “An Atmosperic River” or …. Really hot weather is dubbed “A Heat Dome” ….nothing like a bit of drama in the Weather report to make a Weather Reader feel important).
Windy as well.
Supposed to rain for the next few days.

The jet stream should bring some your way.
If this is another wet winter like last year. ( Rained constantly from Nov to June…. )
The Prairies may be A-OK.

#119 Rhonda on 10.30.22 at 1:21 pm

The NDP Singh has something cooking and wants Trudeau Liberals to implement it. It is taxing annually capital gains not when the assets, investments are sold. This looks like same tax policy the Liberals did with taxing every year the compound interest that increases the final balance of your investments each year like compound interest investments such as zero coupon bonds, strip bonds, residuals, Canada savings bonds, GICs, term deposits in non-registered accounts.

If you have a gain, increased value in your non-registered accounts by Decemer-31 each year the NDP wants it subject to income taxes at your marginal capital gains tax rate. The NDP sees that have reinvested dividends you have to pay taxes on those every year so the NDP Singh wants the same for capital gains, increased equity values every year.

Union and government pension plans should be taxed every year on their pension asset values capital gains too if the NDP keeps pushing this stuff so they can make taxes fair right that is what the NDP is all about fair. Give me a break what a bunch of BS.

#120 Mikey on 10.30.22 at 1:26 pm

#116 crowdedelevatorfartz on 10.30.22 at 12:41 pm

Nope war is a great diversionary tactic.
EOS
Most wars are started and extended and are illugit.

Mr Know it all.

#121 Tom from Mississauga on 10.30.22 at 1:54 pm

The pension plans that margined up to buy UK bonds were inept, not Liz Truss. BoE and media bailed the pension cowboys out. Now a no growth, anti fossil fuels unelected leader is charge. The UK, like China, is un-investable.

#122 Steven Rowlandson on 10.31.22 at 6:48 am

Indeed, dogs are lucky up to a point.

They don’t worry about any kind of insurances, licenses, taxes or laws.
They don’t buy or rent places to live, and they usually don’t worry about their next bite to eat.
Money? What is that to a dog?

#123 Steven Rowlandson on 10.31.22 at 7:01 am

RE#111
130 trillion in global debt.
Govs everywhere are broke.

Mikey what happened to the other 200 -220 trillion in global debt? Debt is often greater than you think.
The latest number for global derivatives exposure is approximately 2 quadrillion USD.
I think there is no honorable way out of this situation without a lot of programs spending especially the social and military spending being repudiated and even that might be too little, too late.