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August 23, 2006
The geopolitics of oil: an issue that involves us all, Wed., Aug. 23, 2006, 5:43 PM
I received the following letter from a professor at a ranked research institution (University) in the United States. He comments on the geopolitics of oil. Later, I'm going to make a final comment about the thread I started.
"Dear Bill -I'm the guy who forwarded the post yesterday concerning high oil prices. As you know, we've discussed this matter, and the implications of peak oil, on previous occasions; I think it's important for your readers to dig beneath the WS optimism regarding energy issues, and to see what worms may actually be crawling beneath those rocks.
The components of this problem are many: there are political issues, geopolitical issues, fiscal and tax issues, supply and demand issues, and indeed purely geological factors that all need to be calculated and discussed. There are many worthwhile sites. Here is a small selection:
http://www.theoildrum.com
http://www.energybulletin.net/
http://www.peakoil.net/Obviously, the specifics are controversial -- and should be discussed and, if need be, controverted; and just as obviously, one cannot remove politics and geopolitics from the discussion. But that said, I was surprised by the political angst that your discussion unleashed, and wanted to add a couple of points.
We live in interesting times (as the Chinese curse has it), and in order to maneuvre and survive the shoals and rapids that lie in front of us, we have to understand them as they actually are. The prince, says Machiavelli (I paraphrase here; you can add bull and bear in substitution), is neither bold nor diffident simpliciter; rather, he is bold when boldness is required, and diffident when diffidence is called for. He sees reality as it is, without sentiment, without illusion, and he simply rides the waves -- he doesn't try to bully the wind, and he does not cower in the face of placid lakes. And this, of course, means seeing the world for what it is, rationally, objectively, dispassionately.
This is the reason most of us gather at your site -- to trade insights and analysis. Very little is accomplished by giving vent to one's political passions -- even if you think you're 'right' -- because such discussions are inevitably shallow, superficial, resting upon unexamined and unacknowledged premises -- so that even if you've got (or think you've got) Truth 'by the balls', it's like throwing mud and sludge into the water you plan to drink. It does a great disservice to the community we're trying hard to build here.
The rhetoric emerging from Teheran is certainly frightening. But the rhetoric coming out of Washington -- and I speak as a political independent, with no discernible partisan leanings that I can detect -- and the chorus of its supporters in the media, is equally hard for me to fathom. There are profound risks afoot in the world; but current breathless attempts among certain individuals to fan yet another war hysteria (WWIII is already here, says Newt Gingrich?) corresponds to nothing in the objective reality that I can see -- Iran, whatever dangers it may ultimately pose, is not about to bomb Topeka in the next few days, or even years. And there are many disinterested, and fairly well informed and intelligent observers who find the arguments currently being made in Washington to be disingenuous -- to say the least.
But those are my views, and even these are matters that can and should be discussed in rational and measured tones. Ultimately, the greatest danger facing the world today is a certain rabid and rancid irrationalism that is sweeping the globe -- and that is armed to the teeth -- and that I find very frightening. I -- no, we here together -- may not be able to do much to stem the tides of history. But history itself will condemn us nonetheless, if we allow ourselves to get reduced, both as individuals and as a group (like the blinded chorus in an Ancient tragedy), to being merely cheering sections for the catastrophes that may lie before us."
To all, there are two points I'd like to make about my earlier article ("Geopolitics: the power of deception") and the subsequent reader comments:
1. I too believe the UN is corrupt in many ways, but in a civil society, vigilantism is abhorred. It is not up to one nation to impose their Rule of Law and values on any other because they disagree with the aggregate view of all nations any more than say Americans would permit the same behavior in their own country.I believe the UN is the best place to fix global problems of a political nature. The fact that the institution has never lived up to its potential is not sufficient reason to dismiss it. It is up to economically and militarily powerful nations to clean up the corruption at the UN so that this global dispute-resolution body can be a more effective instrument.
The fact that one or a couple nations can take matters into their own hands is not acceptable to most of the world. That fact is undeniable. On the other hand, the military intervention of any one country on behalf, they say, of the rest of the world, has proven to be an utter failure " not just by Americans, but by Russians, French and British as well.
I will not say more except that geopolitics seems to have overwhelmed people here today. There was no reason for it. It happened that one blogger, who happens to be a psychiatrist, is seeking attention. If he continues, I'll do what the readers advise as to whether he stays or gets banned.
2. There were today a few readers who questioned my deleting some readers comments. The only comments I pulled were a couple from legitimate and long-time commenters who personally attacked one another -- not me or my views -- and I'm not going to permit that stuff on my blog. My readers have told me they don't want it.
And where I pulled a couple, those two commenters wrote me to apologize for their attacks on one another. And they have continued to post valuable comments.
For this blog to function, there has to be a semblance of control, otherwise it simply becomes another of the dregs of the web. I'm not going to allow that. I want readers to comment about issues " pro or con " with me or against me " and I happen to be incredibly tolerant (in my own eyes anyway) " but there are limits.
I'll now give you a slice of my own life as it has been touched by the UN, which admittedly isn't a great deal.
First, I have a younger brother who (I'll put words into his mouth) refers to me as: a right wing capitalist (****). But then, it is my brother who goes to the UN in New York and to global conferences like was held in 2002 in South Africa and gives speeches on behalf of the poor. I respect that, so I don't really mind what he calls me; he's earned the right.
Second, a few years back I happened to be walking through the lobby of the Hyatt-Regency San Francisco Embarcadero while attending the Gold Show; I came across a large group of maybe 40-50 people listening to a single individual. I stopped, listened and asked a question. Although the audience did not approve, the man asked me to carry on a dialogue, which we then did in private at an adjoining lobby bar. The following day, I watched as Sipo Mzimela challenged another speaker in a room full of maybe 2500 people. Later, off-stage he invited me to Atlanta and to South Africa. I chose to go to Atlanta, where I met with his publisher, but ultimately turned down the opportunity of sponsoring his book, "Marching To Slavery". I did, however, agree to support his South African organization in the capacity as senior financial advisor. You see, this man had been the UN lead for his former organization, the ANC (Nelson Mandela) but had later quit along with his associate Prince Buthelezi to join the Inkatha Freedom Party. The man he debated that day in San Francisco in the early 90's was the new head of the UN delegation for the ANC, which later took control of government in South Africa. After the free elections, because of the manner of appointing Ministers, both he and Buthelezi (who I had met a year or two earlier in New Orleans) joined the government as the Minister of Corrections and the Home Affairs Minister respectively. That is about the time I lost contact. Until today.
I always believed in the IFP cause because I believe in helping oppressed people and Inkatha represented some seven or eight million Zulu people who are a tribal minority in their country. But, ultimately, I came to also see the other side of issues, which caused me to stop from going too far in any one direction.
And during the process of this education, I learned how utterly contemptible are the UN delegates who sell their votes on important issues.
I have moderate views on politics; I don't write a political blog; and I have no interest in permitting people to spout their dogma here. I do value your opinions, and hope that you can express them intelligently with respect to issues, without attacking individuals. That's all.
When I bring up an issue that is political, there is always an economic or financial undertone.
As for people like Sipo Mzimela, he'll always be my friend because I understand his values and respect them. He seems not deterred by those in power presently who who would rewrite history. I called him today. He is now back in Atlanta, a clergyman at St. Bart's Church, where I last saw him 15 years ago.
Sipo is writing another book. I wish him well. He has lived an amazing life from being sent as a youth by the African National Congress to Soviet schools to acquire an education, and then to the UN to argue the ANC position, then to lose faith in that and to switch sides. As he says, it has been a somewhat tumultuous life.
He has seen so much in that life that I hope he takes the time to enlighten us here " at least those interested in a civilized discourse -- as to what can go wrong when powerful foreign economic and political interests become involved in local affairs.
I am not a pollyanna. I just happen to believe the world is as small a place as we want to make it. It's up to the people in it " not just governments " to listen to one another, and to work at making it a better place for all. I try to do my share and more.
As owners and managers of capital, I believe we ought to help one another and simultaneously withdraw our support for those who are the trouble-makers, including all those who would deceive us.
With enough people, from all parts of the world, we can build mountains one pebble at a time. We need not care about our skeptics. We need to take the long view on this. Problems of the magnitude we face today will take multi-generations to correct, so it will not be us who solve them. But we can lay the groundwork, or we can stand by or even help make it worse.
There will always be warlords in our midst. That's obvious. My point is that without the right 'worldly' attitude, our global society will go downhill fast.
As for me, I have a date next week for surgery. And this weekend I'll be travelling out of town to celebrate the 60th birthday of a family friend I've known for over 45 years. I'll try to do part of a Week In Review.
But if I don't get around to it you'll understand why, I think.
Posted by Posted by Bill Cara on August 23, 2006 05:43:45 PM | Category: Community Chat
Discourse
Here, Here! - to your stance on the geo-political dialogue that got heated. I take away that there are strong feelings on all sides, which will affect oil, gold, and equities. In oil prices, there's not only a "terrorism premium" but also a "Bush premium".
We'll do fine this weekend, Bill, even if you don't get to doing the review.
For TC-2005 users, I managed, with their tech support, to create a scan which returns Cara 100 stocks with RSI 7's (daily, weekly, and monthly) below 30 and those above 70. That will become part of MY standard week-in-review.
Posted by: Jock
at
August 23, 2006 6:27 PM [link]
Bill, thanks both the letter from the professor and your own testimony. You show that it is not possible to reduce issues to black and white when you have been exposed to the blend of colors that make them so complex. And unfortunately it is too easy to resort to comfortable prejudices when issues that we do not face directly from day to day get raised in discussion.
Have a great weekend and best of luck with the surgery.
Posted by: number2son
at
August 23, 2006 6:48 PM [link]
Bill,
It pleases me very much to see good financial bloggers like you or Ritholz, whose only motivation seems to be to help people navigate the markets by sharing your experience, gain more and more of a following. Unfortunately, the downside is that it also tends to diminish the overall quality of the comment section.
This is your blog and you can delete any comment you care to. You don't owe anyone an apology or even an explanation.
True, it may only take me 5 or 10 seconds to recognize that I can skip the rest of any post where some wackjob suggests that wiping out Iran would be a good idea or some similar nonsense. But I still always wish I had those 5 or 10 seconds back. And then, of course, the pissing contest gets rolling.
So personally, I'd actually prefer you were quick on the trigger but as I said above, it's your blog and your call.
In any event, best of luck to you and thanks for your efforts.
Posted by: RMX
at
August 23, 2006 7:01 PM [link]
Jock,
Would you be able to export and post this list on a site, say every 15 minutes or every hour, or perhaps send to Bill for an automated posting, if possible and if Bill agrees of course? That would be awesome.
Posted by: ursus
at
August 23, 2006 7:28 PM [link]
RMX and others,
Whenever I write something, I think about what the gem or nugget is going to be that could possibly help somebody who never had the experience in life and the markets that I've been fortunate to have.
We all have biases and flaws in our character, but I happen to think that when anybody writes as many words and articles as I have in the past 27 months, the reader does catch on, and perfection isn't expected. Nobody here is perfect, obviously.
The best we can do is to study from others, apply ourself, and hope for a good outcome. If we have a positive outlook, and apply those lessons, and don't suffer from the "credulity syndrome" I often refer to, then we'll do ok in life.
A lot of what I write about is plain old common sense. For instance, I'm not knocking the fact that if you ask the Treasury Secretary or President about the state of the economy, you're going to get a one-track answer. If you ask an oil sheik or Boone Pickens, for example, where oil prices are headed, they won't say "down" unless there is a different agenda at work.
We -- myself included -- spend too much time seeking answers from sources where the answers ought to be known in advance. We need to challenge all sources of info.
Have to go for dinner, but thanks.
Posted by: Bill Cara
at
August 23, 2006 7:33 PM [link]
Sure, ursus, I'd be glad to in some way to make that happen, if it appeals to Bill. Maybe at week's end would suffice. For TC-2005 users, I'll be glad to share the code.
As Bill has pointed out, RSI 7's below 30 mean the stock has fallen into "accumulation range" but it's not a direct "buy signal".
Still, I have been surprised to see virtually ALL of the Cara 100's Bill has made us aware of as enter the "accumulation zone" provide at least a tradeable bounce. They all seem to drop a "kangaroo tail" and then rapidly rise. Interesting.
Bill, Jock,
Just wanted to second Ursus's request. I am sure that Bill received the same in his recent survey. Maybe this is an opportunity to pilot something quickly.....
Posted by: rward
at
August 24, 2006 12:47 AM [link]
Just curious about this TC-2005 software. Can anyone lead me to more info on this software? Reviews, opinions, costs?
Thanks everyone
Posted by: JamesT
at
August 24, 2006 8:49 AM [link]
TC-2005 isn't the most sophisticated TA software, but it does have advantages. It's cheap ($30/mo.for 20 min. delayed data) can scan 7500 US stocks by some fundamental and lots of technical criteria, and has Media General's 31 Major Industry and 208 Sub-industry groups. They give a great overview of the market. It's sold through worden.com . It's run by the Worden family; Don Worden was one of the early pioneers in TA. Also, tech support by email and phone is quite good.
FYI, tonight's list of Cara 100 stocks with RSI 7's <30 is: HD, NTES, SBUX, WMT, TGT, HOV, BC, BBBY. I'm sure Bill would point out that daily, weekly, and monthly RSI 7's <30 constitute just one criterion among several that must be met to justify a buy.
The professor who wrote me this letter on the geopolitics of oil wanted me to clarify that he had only "forwarded", as he clearly stated, the earlier message board post on the high price of oil, that he had not written it.
As he reminded me: "while I may be smart enough to read the handwriting on the wall, the credit for actually writing it belongs to the far sharper minds who populate these public message boards".
Posted by: Bill Cara
at
August 25, 2006 11:08 AM [link]

In general, I try not to post about political issues because I am very passionate which leads to posts that can offend others. After reading all the views, I want to throw in my two cents because I am interested to see if anyone shares similar views on terrorism. I am certain I will be flamed by many but so be it. I am not beholden to anyone's views but my own.
There is no question that there are extremists who look to promote their cause at the expense of others. Al Qaida appears to be motivated by removing all western influence from the middle east, including Israel. If Israel found a new homeland and all foreign influence moved out of the middle east then would Al Qaida stop? Would Iran stop promoting the likes of Hezbollah and Hamas? Not sure but I always try to look to motive to better understand one's actions.
I am very much against the Bush Administration's approach to diplomacy today. After 9/11, Afghanistan was given a chance to produce Al Qaida; they did not and we took action. I fully support that. But the Iraq invasion was a farce in the sense that Bush throttled up the fear level in order to go to war. Iraq was not a threat to us. Iran may or may not be a threat to us; the US, through diplomacy or lack thereof will ultimately determine the extent of the threat.
Like any wild animal or human being, when cornered, Iran is defending their territory and right to produce nuclear power. I use this analogy because of Israel, US occupied Iraq and Afghanistan, pro US Saudi Arabia, pro US Turkey, pro US Jordan etc, etc. As mentioned earlier in the other thread, the US appears to be trying to control the middle east. Should Iran enrich uranium for warefare then the world will need to respond. Human nature is survival. I believe Iran will only strike if provoked. Right or wrong that that's what I see.
Now as to the motives of the Bush Administration, I will not speculate beyond that the world was purposely deceived through fear mongering with bogus information to support the invasion of Iraq.
One last comment regarding the deletion of posts. Bill did not allow a comment I left in response to one of his regarding online gambling. I did not like it but it's his blog and he can do whatever he wants with it. I also do not like any kind of censorship because it reminds me of the thought police but I do understand Bill's desire to keep posts from alienating readers from participation.
Posted by: cb
at
August 23, 2006 6:24 PM [link]