The massive spill in the gulf has led to:
- A moratorium on new deep water drilling in the gulf of Mexico.
- The probable acceleration in decline in the amount of oil coming through the Alaska pipeline: http://online.wsj.com/article/SB10001424052748704067504575304942111464272.html?KEYWORDS=Alaska+pipeline
- Norway banning new oil and gas drilling "until the investigation into the explosion and spill in the US Gulf of Mexico is complete"
The oil industry is already struggling very hard to keep oil production steady.
Demand for oil is growing in China, India and throughout the developing world.
The economy is improving slightly in the developed world.
Something has to give. I forsee either another 2008 run-up in prices (147/barrel or worse), the recession coming back tanking oil demand, or something in the middle. This article from the oil drum is very good:
http://www.theoildrum.com/node/6574#more
Friday, June 18, 2010
Sunday, June 6, 2010
The ownership society
The story:
------------------------------------------------------------------------------------
Utah Jazz fans sue over new seating policy
SALT LAKE CITY (AP)—A group of well-heeled Utah Jazz fans has sued the team’s corporate parent, claiming a new seating policy has caused their VIP seats to plummet in value.
Members of the Jazz 100 Club, in their complaint filed Friday in 3rd District Court, are seeking more than $19 million in damages.
The dispute stems from a January policy change allowing all season-ticket holders to also transfer ownership rights to their seats in EnergySolutions Arena.
Previously, only 220 courtside seats that were held by the 50 to 60 club members could be sold or bequeathed, an exclusivity that increased their value.
Club members say their seat positions that once sold for as much as $200,000 now go for $20,000, a drop of 90 percent.
Jazz officials say they take the matter seriously.
------------------------------------------------------------------------------------
Commentary
Once again we see how the insiders, the elite, the privileged first rig things in their favor and then scream bloody murder if anyone attempts to undo the rigging.
Much of American society has sadly become like this. Anyone with an ounce of intellectual honesty can see that we have become a class society with serious privileges afforded to the top. In this case they can sell their asset (the season ticket) but others cannot (or could not). That's a pretty serious difference. A consequential difference. A class difference. In this case literally.
The average fan could buy but not sell, the real power and real ownership of those seats resided with the team owners. They retained *real* ownership. The "Jazz 100 Club seats" on the other hand afforded real ownership to the purchaser. Team owners and "Jazz 100 Club" in one class and other fans in another.
This is a metaphor for our so called "ownership society" which has always been a fraud. Like the majority of Jazz season ticket holders, people have been made to *feel* like owners but were never really *made* owners nor awarded the true privileges of ownership. In the case of the stock market the difference is one of scale not class. The middle class is given 401ks and ESOPs while the top brass is given stock grants and options that are orders of magnitude bigger.
Ownership is not real unless it's sizable.
When average Joe purchases 100 shares of stock he's not an owner in the same way that top brass are when they get grants of 10s of millions of shares. Imagine being able to purchase a corner of a cupboard in 10 million dollar home. That's what most of us get in the stock market. Technically it's "ownership" but not really.
The upper classes have always been about privilege: getting it, maintaining it and expanding it. Be it through an explicit class (like the Jazz 100 Club), through more informal manifestations of class, or through scope (the CEO gets 35 million shares, the ESOP gives you 100) they have it and always want more. When some sort of class privilege is ended it costs those in that class money.
The "ownership society" sounds like a great idea. If there was ever a sincere effort to engineer a *real* ownership society it would be a very good thing but all that we have done so far is window dressing and feel good stuff.
The next point will make for entire post at a later time. The change in corporate compensation over the last 30 to 40 years which gives top brass most of their compensation in stock has been in my opinion one of the most severe and cynical manifestations of class warfare in our nations history. Before this changeover direct comparisons of salaries provided a rigor that has been swept away with the stock option granting game. Say senior executive X makes 85,000 and an assembly line worker makes 5,000 (think 1970). The comparison is easy. But fast forward to 2010 and the senior executive makes most of his compensation via a maze of stock options and grants and it's not so simple. And there is of course an intellectual slight of hand going on whereby it's implied that the executives are not so much being *paid* as "made owners" (which is OK!). They are getting an ownership stake and that's a good thing because that "aligns their interests with those of the company."
This would imply of course that without these extra inducements the senior executives might actually operate in a way opposed to the company? Does that make any sense? CEO's and other top brass were secretly sabotaging their companies in 1970 because they didn't make enough money? This is of course absurd. If there is any class of employee who we can realistically expect to "have his interests aligned with the company" to begin with it's the senior management team. Any compensation system based remotely in reality that sought to "align the interests of employees to those of the company" would start at the bottom, because it is there that common sense dictates employees are most likely to not have their interests aligned with those of the company to begin with. OK maybe they don't matter and are easily replaceable. How about skilled workers, salespeople and engineers. Wouldn't it be a good thing if we made sure *their* interests were aligned with the company? Well that's not what happened, the stock option windfall goes overwhelmingly to senior managements - the one group that we should expect to *already* have their interests aligned with the company.
What is going on of course is class warfare perpetrated relentlessly by the top 2% to 5% on the rest of us.
This group is the biggest impediment to a *real* ownership society and will have to be fought tooth and nail if it is to ever happen.
------------------------------------------------------------------------------------
Utah Jazz fans sue over new seating policy
SALT LAKE CITY (AP)—A group of well-heeled Utah Jazz fans has sued the team’s corporate parent, claiming a new seating policy has caused their VIP seats to plummet in value.
Members of the Jazz 100 Club, in their complaint filed Friday in 3rd District Court, are seeking more than $19 million in damages.
The dispute stems from a January policy change allowing all season-ticket holders to also transfer ownership rights to their seats in EnergySolutions Arena.
Previously, only 220 courtside seats that were held by the 50 to 60 club members could be sold or bequeathed, an exclusivity that increased their value.
Club members say their seat positions that once sold for as much as $200,000 now go for $20,000, a drop of 90 percent.
Jazz officials say they take the matter seriously.
------------------------------------------------------------------------------------
Commentary
Once again we see how the insiders, the elite, the privileged first rig things in their favor and then scream bloody murder if anyone attempts to undo the rigging.
Much of American society has sadly become like this. Anyone with an ounce of intellectual honesty can see that we have become a class society with serious privileges afforded to the top. In this case they can sell their asset (the season ticket) but others cannot (or could not). That's a pretty serious difference. A consequential difference. A class difference. In this case literally.
The average fan could buy but not sell, the real power and real ownership of those seats resided with the team owners. They retained *real* ownership. The "Jazz 100 Club seats" on the other hand afforded real ownership to the purchaser. Team owners and "Jazz 100 Club" in one class and other fans in another.
This is a metaphor for our so called "ownership society" which has always been a fraud. Like the majority of Jazz season ticket holders, people have been made to *feel* like owners but were never really *made* owners nor awarded the true privileges of ownership. In the case of the stock market the difference is one of scale not class. The middle class is given 401ks and ESOPs while the top brass is given stock grants and options that are orders of magnitude bigger.
Ownership is not real unless it's sizable.
When average Joe purchases 100 shares of stock he's not an owner in the same way that top brass are when they get grants of 10s of millions of shares. Imagine being able to purchase a corner of a cupboard in 10 million dollar home. That's what most of us get in the stock market. Technically it's "ownership" but not really.
The upper classes have always been about privilege: getting it, maintaining it and expanding it. Be it through an explicit class (like the Jazz 100 Club), through more informal manifestations of class, or through scope (the CEO gets 35 million shares, the ESOP gives you 100) they have it and always want more. When some sort of class privilege is ended it costs those in that class money.
The "ownership society" sounds like a great idea. If there was ever a sincere effort to engineer a *real* ownership society it would be a very good thing but all that we have done so far is window dressing and feel good stuff.
The next point will make for entire post at a later time. The change in corporate compensation over the last 30 to 40 years which gives top brass most of their compensation in stock has been in my opinion one of the most severe and cynical manifestations of class warfare in our nations history. Before this changeover direct comparisons of salaries provided a rigor that has been swept away with the stock option granting game. Say senior executive X makes 85,000 and an assembly line worker makes 5,000 (think 1970). The comparison is easy. But fast forward to 2010 and the senior executive makes most of his compensation via a maze of stock options and grants and it's not so simple. And there is of course an intellectual slight of hand going on whereby it's implied that the executives are not so much being *paid* as "made owners" (which is OK!). They are getting an ownership stake and that's a good thing because that "aligns their interests with those of the company."
This would imply of course that without these extra inducements the senior executives might actually operate in a way opposed to the company? Does that make any sense? CEO's and other top brass were secretly sabotaging their companies in 1970 because they didn't make enough money? This is of course absurd. If there is any class of employee who we can realistically expect to "have his interests aligned with the company" to begin with it's the senior management team. Any compensation system based remotely in reality that sought to "align the interests of employees to those of the company" would start at the bottom, because it is there that common sense dictates employees are most likely to not have their interests aligned with those of the company to begin with. OK maybe they don't matter and are easily replaceable. How about skilled workers, salespeople and engineers. Wouldn't it be a good thing if we made sure *their* interests were aligned with the company? Well that's not what happened, the stock option windfall goes overwhelmingly to senior managements - the one group that we should expect to *already* have their interests aligned with the company.
What is going on of course is class warfare perpetrated relentlessly by the top 2% to 5% on the rest of us.
This group is the biggest impediment to a *real* ownership society and will have to be fought tooth and nail if it is to ever happen.
Thursday, June 3, 2010
The truth about immigration
http://www.newsweek.com/2010/05/27/reading-ranting-and-arithmetic.html
http://www.msnbc.msn.com/id/37493275/ns/world_news-americas
http://www.msnbc.msn.com/id/37493275/ns/world_news-americas
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