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This idea ought to make a Nobel Prize Winner

Jay H

PFG, Picture Framing God
Yes Bob, Bob D is right. When ever a thread leaves you at the gate just say "just keep your head in the sand". That a coy, and I guess polite, way of saying "your stupid and I'm not".

To your point though many of the third world countries are stepping up into the modern age. Even if they aren't consuming as much energy as we do, they are catching up at a break neck speed. In an electrical journal I still get I saw where China is currently building 550 powerhouses. From 2000 to around 2005 they have increased their power consumption 150%. What do you want to bet they don't care how much sulfur is in the coal or even know what a scrubber is. I'm sure there is other countries that are growing at similar rates.

That number (550) really blows me away. If it takes 5 years (and it doesn't take that long) to get a plant online that is still an average over 2 plants a week coming online for 5 years. I can't even imagine that! Can you? Yea, I think your right that these heavily populated countries are coming on strong and you can bet they aren't as concerned with greenhouse gases and solar cells as we are.

Aren't they worried about a coal shortage? Don't they know that they can't run off natrual gass for long? Why aren't they conserving energy because of the cost of it?

Doug Gemmell

SGF, Supreme Grumble Framer
Commodities Issue

This is from the International Herald Tribune (Whatever that is. I just pulled it off the net):

"Gold prices don't go up just because jewelers need more gold, they go up because gold is an investment," said Roger Diwan, a partner with PFC Energy, a Washington-based consultant. "The same has happened to oil."

Changes in the way oil is traded have contributed their part as well. On Nymex, oil contracts held mostly by hedge funds, essentially private investment vehicles for the wealthy and institutions, run by traders who share the risks and rewards with their partners, rose to more than 1 billion barrels this month, twice the amount held five years ago.

Beyond that, trading has also increased outside official exchanges, including swaps or over-the-counter trades conducted directly between, say, a bank and an airline. And that comes on top of the normal trading long conducted by oil companies, commercial oil brokers, or funds held by investment banks.

"Five years ago, our futures exchange was a small group of physical oil players," said Jeffrey Sprecher, the chief executive of Intercontinental Exchange, the Atlanta-based electronic exchange where about half of all oil futures are traded. "Now there are all sorts of new investors in trading commodity futures, much of which is backed by pension fund money."

My bold. We have met the enemy and he is us. A lot of money that was pulled out of the stock market went into commodities. Bear in mind that the pension funds include some mutual funds, 401K's, etc.

What a nightmare.


CGF, Certified Grumble Framer
So you are surprised at how fast Third World countries are growing? Amazed that they're using up coal and blowing sulphur dioxide into the air we all breathe? Polluting our waters and killing off wildlife - some never to be seen again?
Gee Jay and Bob, you sound like environmentalists all of a sudden.

Doug's post is what its about - money. Supply and demand. Worldwide supply is declining while demand goes up.

When Chevron and BP were drooling at the gates of Kazakastan to get their spindly fingers into some of the worlds largest oil reserves back in the late 80's, the President of the state and his Ministers dragged the bidding war on for 2 reasons:
1) Favorable development and interest (i.e. money)
2) Guarantees that the sacred salmon of the Caspian would not be killed off

The point is, when the stakes are high enough, capitalism will find a way to get it done. The benefits of drilling in ANWR aren't high enough yet,and heck, nobody knows for a fact how much if any oil is there. Only speculation.
When the price of oil hits 200-250 dollars a gallon its a different story. Then the environmentalists can and will hold the oil companies to task, make them jump thru hoops to get it done. Otherwise we're no better than those appalling, wasteful, polluting Third World countries.

Bob Carter

SPFG, Supreme Picture Framing God
Hey Gemini-I really do not know anyone that doesn't want clean air; clean water.

The argument is always in the degrees

On that, there appears no moderation from extremists on both sides

I guess if my point was/is lost it might be that we give a pass to "developing" countries.

Bob Doyle

SPFG, Supreme Picture Framing God
Doug, so housing market stinks, let's buy oil? That's why my gas costs so much! I guess now we know where those refi loan salesmen went to get new jobs! Guess the cycle does keep going around because they were probably the ones that were working at Enron buying and selling energy to themselves to inflate the price there! I'd laugh if I didn't have to heat my house or drive my car.

Bob if the world would put the same environmental demands on developing countries as we have then maybe something could be done about global warming. But instead of our companies exporting our "clean" technology and regulations they export the jobs and ignore environmental concerns where they move to. I guess for the company I can see their desire to lower their costs, labor being one of them. But I should think that when they know they can't dump pollutants here they should be compelled to follow the same rules elsewhere.

Bob Carter

SPFG, Supreme Picture Framing God
Hey Bob D-Thi is truly one of those amazing threads where we all tend to agree on almost all the major points, doesn't it?

It's almost like we were sitting around face to face enjoying a cold adult beverage together


SPFG, Supreme Picture Framing God
I was catching up on some reading last night and I came across some interesting facts about energy use. I had mentioned before that buildings are the biggest users of energy, it turns out they account for 2/3 of the energy we use when you combine commercial, residential, and industrial buildings.

The US has the second largest per person annual energy consumption. Canada is actually the highest.

Natural gas useper household is down thanks to more efficient furnaces, better insulation, and a population to the south but electricity use is up. Leaky ductwork is one of the biggest places heating and cooling energy is lost in a home.

One of the fastest growing segments of energy consumption is electronic gadgets, especially ones with stand by modes. Digital photo frames add an average $9 a year to your electric bill. Satellite and cable converter boxes are always on even when the tv is off and they don't need to be. If you use a power strip for them, get one with a switch so you can turn it off when not in use. Other big energy wasters are trickle chargers left plugged in when not in use and computers left on 24/7. It doesn't hurt the computer to turn it off when not in use or you can reset the stand by mode on it so it isn't running all the time.

One of the other interesting things I read was that there is alot of heat energy going to waste in manufacturing that could actually be captured and turned into electricity. There is enough to provide nearly 20% of our energy needs if it was recaptured and there are companies that are starting to partner with industry to do that.

Less than 30% of the fuel burned at power plants makes it to the transmission lines as electricity. The rest is vented into the atmosphere as steam and heat. It can be recaptured and used as a source of energy with the right technology.

Motors used to power alot of equipment are very inefficient. Most run at one speed, high, all the time. Replacing them with a variable speed motor can increase their efficiency and save electricity.

Pat Murphey

SPFG, Supreme Picture Framing God
"Five years ago, our futures exchange was a small group of physical oil players," said Jeffrey Sprecher, the chief executive of Intercontinental Exchange, the Atlanta-based electronic exchange where about half of all oil futures are traded. "Now there are all sorts of new investors in trading commodity futures, much of which is backed by pension fund money."

My bold. We have met the enemy and he is us. A lot of money that was pulled out of the stock market went into commodities. Bear in mind that the pension funds include some mutual funds, 401K's, etc.

Commodities are generally viewed as speculative and therefore don't meet the "prudent man" test for pension investments and are rarely found in managed pension plans. You might find self-directed 401k type plans with some commodities, but even there, if managed by any institution for a group, that would be unlikely. These monies are more likely found in hedge funds or certain mutual funds unrelated to pensions.

Doug Gemmell

SGF, Supreme Grumble Framer
Pat, here's another article linking rising oil prices to pension funds.

All Things Considered: Everyone knows that oil prices are high because demand in places like China has boomed while supply has remained stagnant or fallen. But some oil analysts are focusing on a different issue: the amount of oil that's being held off the market in storage.

Oil companies and others like to buy futures contracts to make sure they've got oil coming to them well into the future. But lately, people who have nothing to do with the oil industry are buying oil futures, holding them as can't-lose investments that can return well over 10 percent.

Investment banks from Morgan Stanley to Goldman Sachs are making so much money from oil futures that they've become a hot investment for all sorts of big-money players.

Some of the biggest players are U.S. pension funds, which have put billions of dollars into oil futures. At least one analyst thinks that pension funds have become part of the machinery driving higher gas prices.

"I think if you saw all the pension funds walk away," says Ben Dell, an oil analyst at Sanford Bernstein, "you'd probably see a $20 drop in the crude price."

Dell compares removing pension funds from the oil market to "losing the whole of Chinese incremental demand."

The problem, he says, is that pension funds and other investors are buying oil to remove it from the market -- which can help drive up demand -- before selling it for a profit some months later.

Pat Murphey

SPFG, Supreme Picture Framing God
If you found out that your pension money was being invested in oil futures, you would probably have a cause of action against the pension manager. I love how press stories use numbers - "Billions" of dollars are a drop in the bucket in the multi-trillion dollar pension business.

Bob Doyle

SPFG, Supreme Picture Framing God
Yeah Pat, tell that to the Enron employees. Their pensions were tied to the market, and while their bosses got their money out, the workers lost everything.

Pat Murphey

SPFG, Supreme Picture Framing God
Didn't I say "oil futures" not company stock. It would have been illegal for more than 10% of Enron's "pension" plans to be in company stock. Unfortunately the rules are different for 401ks. If you have a choice, the Enron debacle is an example of why you should diversify 401k holdings. If a company gives you company stock in a 401k or in a stock plan without offering a pension option with diversified investments, you should cover yourself with other vehicles such as IRAs or find a better employer. I spent years in my union pension position fighting those who wanted to convert our TWA pension plan to a 401k in order to buy the company as we drifted in and out of bankruptcy. My position was vindicated when the United Pilots did that very thing and lost everything in a subsequent bankruptcy. None of the above goes to my point about oil futures/commodities in pension plans.
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