Letters to the Editor
Kevin C
Published Letters: 140 Editor's Choice: 23
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The problem with the "peak oil" wolf crying
[Read the article: The missing link in Mexico's declining oil production]
[Read more letters about this article: Here]It has already been pointed out that people have been harping on imminent disaster for 30 years, and that that is part of the problem. So far technology has been keeping up with demand--even though, as pointed out, production of individual fields is decreasing fairly much as expected. So is this "peak oil?" Well I think people have problems with "peak oil" as a concept/crying out in the wilderness because it is mostly presented as doomsday. We reached "peak whale oil" and our houses are still lit, thanks to regular old oil and kerosene (and then electricity). Running out of oil seems to be something that is necessarily out of the blue and catastrophic to fit the "peak oil" mania. There's plenty of coal left (which can be liquified--the Nazis were hampered by running out of oil, but they worked out technological work arounds), nuclear power, solar, wind, biofuels, whatever. I wouldn't necessarily bet against humanity's adaptability.
In terms of the poster that says someting to the effect that "America used to be Saudi Arabia," I'd like to point out this: https://www.cia.gov/cia/publications/factbook/rankorder/2173rank.html That is America is STILL the 3rd largest producer of oil (other sites claim 4.8 m barrels per day, but that'd still make the US number 3). We produce less than we did by about 50%, but we still produce a significant amount. Unfortunately for us, we also consume about 20 million barrels per day, far more than anyone else. Yeah we peaked, but 30 years ago and not disastrously and what we have is a runaway consumption problem as much as a declining production problem.
By the way, had_enough, it is easy for you to demand an apology in Salon years hence because I doubt you would provide one in turn--look at the proliferation of Malthusian nuts on Salon that post that the world is at its population limit and nobody should have kids. The world was supposed to be on the brink of its human carrying capacity two centuries ago. Nobody is apologizing for that, in fact there are plenty of people still predicting it. That's not to say that it isn't possible that catastrophe won't come to pass--it is just to point out that doomsday predictions are seldom repudiated--the due date just gets pushed out.
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I don't understand how that greed hypothesis got a star
[Read the article: The missing link in Mexico's declining oil production]
[Read more letters about this article: Here]Oil is a commodity--it is IMPOSSIBLE to choose which barrel to pump out of the ground based on price of recovery unless you are fixing prices. Saudi Arabia can basically poke a straw in the ground and get oil out (I forget whose quote that is). There is absolutely no way that you could say to the Saudis to not produce at all while you pumped out $70 a barrel oil from elsewhere. They'd produce happily at $70 a barrel, maybe, but the temptation to undercut you would always be there as not every producer is an absolute monarchy.
You can monkey with the market clearing price as a cartel, but without one the market will clear based on supply and demand--and if you have a lot of $10 a barrel oil around, that point won't be $70.
Maybe I misunderstood the poster, but that's like saying why don't we just legislate against inflation.
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It's a lot harder to have the courage to pop a bubble
[Read the article: Class war and credit snobs]
[Read more letters about this article: Here]Honestly, if the WH/Congress had stepped in while the rise in house prices was still lifting all boats, it would have been far more likely to be painted as "anti-poor."
So, while there were probably plenty of people that were complicit in their downfall, the banks were supposed to be the adults in this situation. That's not to say that people weren't very, very, very, predictably stupid. Taking a mortgage you can't afford when the payment resets because house prices always go up is stupid, especially after having witnessed a bubble burst around the turn of the century. Those people are likely to be punished enough--repossessions and at least 7 years of problems with credit. What really burns my butt is potential inappropriate selling--refinancing 65 year olds with fixed payments into negative amortization loans and the like--I don't know how big that issue is, but I'm hoping that the connection of big, greedy investment banks in ownership of some of the subprime companies may allow some of these (hypothetical perhaps) grannies getting put out on the street.
So regulators, get on it, before the lawyers beat you to it and get billions while each granny gets $48.56 in a class action settlement.
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Pemex and greed
[Read the article: The missing link in Mexico's declining oil production]
[Read more letters about this article: Here]Ok, I get the point now. You do leave out one of the major factors behind the abuse of Mexico's oil fields--the fact that the oil fields were nationalized. Pemex can't/couldn't really take a long term view of profit maximization since it supplies around 1/3 of the Mexican government's revenue. It also serves as a huge patronage machine that is probably 3x overstaffed. There is no room for investing appropriately--let alone managing the fields for long run production.
That's not to say that private companies would necessarily have done it better, but a company beholden to politicians with not that many controls on their influence (as with Pemex) is not going to be in it for the long haul. Way harder to trade longer term oil production over immediate term tortilla subsidies for the poor, say.
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Subprime lenders will go bankrupt
[Read the article: Class war and credit snobs]
[Read more letters about this article: Here]They have buyback clauses in the debt--if a certain amount of loans go bad within the first 6 months, say, they are obligated to buy back the loan/security. That is what is driving them to the wall. So many loans are going bad that they don't have the money to buy them back.
The other issue with originators of securities is that they often slice them up into tranches with different ratings. The ones that they can't unload, if they can't unload some of the tranches, tend to be the lower rated ones. So they can be caught out by that. I-banks won't go bankrupt over this, but it may sting a little.