Daily Market Comment
nemo paradise

Now that we are assured that interest rates will remain at very low levels with absolutely no possibility of inflation or currency debasement, and the equity markets are again near all-time highs, it’s time to yawn, crawl back under a tree and sleep for another twenty years.

After all, the stock market is rigged by high-frequency traders who are taking the rightful profits of small investors and keeping them all for themselves, corporations don’t pay any taxes and they are morally unfit for any responsible investment portfolio, and there’s a guy in New York who runs the whole merger and acquisition business out of a briefcase (the New York Times said so). The little guy doesn’t have a chance any more — not since Clinton was president, anyway.

Obama’s going to cave to big energy. The Chinese are conspiring with Harry Reid to control all solar power in the US, and the USDA sends swat teams to arrest Bay Area farmers selling unpasteurized milk.

Cut to “No Country For Old Men,” and Tommy Lee Jones and Woody Harrelson in the Texas desert:

Woody: “It’s one hell of a mess, ain’t it, Sheriff?
Tommy: “If it ain’t, it’ll do til the mess gets here.”

Out of all this, we find one thing we can agree with, and that’s this: Obama will cave to big energy. Or rather, he already has. Not only will the Keystone be built, so will many, many others.

Further, the notion that any nation can afford to avoid an accelerated and vigorous approach to hydrocarbon extraction from oil shale is hilarious. I’ll explain.

For all the speculation about climate change and the potential damage it may cause, there is one thing far more frightening, far more dangerous and far more threatening. And that thing is a true energy shortage. Here I am not talking some temporary imbalance occasioned by geopolitics, but a dwindling of available energy supplies to a point where far more lives are lost than any sea level rise, ephemeral or real, or any drought, or any “severe weather” can cause. Our consumption of energy continues to expand, and harsh realities will soon impress upon us just how inexorable that growth will continue to be.

Any energy shortfall results in real loss of life. The price and the supply of energy dictate in large part everything from crop yields to large-scale sanitation. I’m not going into detail on this.

So I will buy Schlumberger (SLB). I’m a little late to this party; living in the dark, as I do, I was unaware that other folk have been recently touting the stock. But I am unsurprised. It has almost doubled since its 2009 low. Don’t care. Looking for a triple here in 12 months.

I know. Bring it on. But that’s my bet.

nemo paradise

About nemo paradise

Nemo has been perversely fascinated by finance since emergence from college as an English major with little or no math. His opinions, analysis and observations are generally subjective, and employ vast amounts of quantitative analysis the same way that an elephant turns savannahs into useful energy, with impressive piles of dung as a by-product. Nemo has been professionally employed in the trading and analysis of and commentary on financial markets since 1972. Nemo makes no short-term predictions, except when seized by caprice. The future is inherently unknowable, but is subject to analysis. Very, very infrequently, this analysis uncovers situations where outcomes are not random over the longer term. And, as you can tell, Nemo is a smug son of a bitch who has learned from his mistakes to guard his projections very, very carefully, but has no hesitation in attacking like a starving wolverine the misconceptions, idiotic assumptions and howling fallacies that financial pundits offer with stunning frequency.

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