Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

“Peak Oil” Nonsense

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Peak Oil? Nonsense. Sure, conserve energy and go green and all that, but let's stick to the facts about oil reserves.

Otherwise, I’ve just about had it with this dramatized rant and whoop and holler by certain a certain poster here and other alarmists about the “Dangers of Peak Oil.” He goes around on the net finding other soothsayers that supports his theory to get more hype for his website, and cries “fire” to get people to stampede his website for more information on how to head off another “crisis.”

Slope is too sacred of a temple of truth to allow this crap to splash the walls and not get cleaned off.

I'm just a Petroleum Engineer, not a scientist or a Doctorate PS Bullshitist, but about the closest thing you'll know to an expert on the subject of oil reserves, other than "THE Expert," whomever the media says that is next.

Over the past 33 years mankind has consumed more than three times the world’s known oil reserves in 1976 – and today proven oil reserves are nearly double what they were before we started. The story with natural gas is even better – here and around the world enormous amounts of natural gas have been found. More will be found.

There will never be "no oil" in your lifetime, so relax, and discern the truth for yourself when you get the facts. If you are old enough to read this, your shiny car will have plenty of gasoline for your lifetime. You may not be able to afford it, but they cannot possibly run out. So all you have to do is make some money with us here on Slope, and you’re set, just like the politicians. Whenever there is GREAT change, there is also GREAT opportunity. It is impossible to be otherwise. Instead of worrying about the black hole right now, look for new opportunities… it won't take long, they're EVERYWHERE.

Now that oil is $80/bbl, it opens the door to production of different grades of oil and different kinds of oil, and new places that oil was never thought to exist.

America has the biggest "Shale Oil" field in the world, at over a trillion barrels, that has never been tapped until two years ago, because it will be expensive to extract, and the technology has not yet been improved enough to tackle it before then. But money solves a lot of problems, and $100/bbl oil would certainly do it. You will have to be surprised how fast the technology will ramp up when there's a profit to be made. Just type in “shale oil reserves” into your little Search Bar, and you’ll come up with hundreds of new projects that have never before been thought possible. And these are primarily domestic, lower 48 States, where the oil in America was thought to be depleted!

Ever heard of the Bakken Formation? No? Why not? GOOGLE it, Mr. OilPrice, or follow this link. It will blow your mind. http://www.usgs.gov/newsroom/article.asp?ID=1911
The Bakken is the largest domestic oil discovery since Alaska's Prudhoe Bay, and has the potential to eliminate all American dependence on foreign oil. There’s enough crude to fully fuel the American economy for 40 years straight. And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL! Well, except we know those damn oil barrons are going to gouge us, but cheap oil nonetheless.

Another example of huge unexpected and unknown reserves are the "Coal Oil" sands in Canada that they are already extracting by truck and converting to usable oil. It's slower to extract and convert than to simply produce liquid oil, but the one field they are producing from today is bigger than the Saudi field, which is the biggest in the world. And that isn't the only "Coal Oil" field in Canada, and certainly not the only one in the world. These Coal Oil fields contain almost as much oil as the Saudi Arabian oil fields.

Most people don't realize that we only produce about 20% of the oil from a producing oil sand (conventional production), and leave the rest of it there because it was too expensive to produce by secondary or tertiary recovery methods. That is no longer true, so the natural oil reserves just doubled when the price of oil doubled.

One more real obvious report that you should have caught up on, is the the Stansberry Report from 2006. Hidden only 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world. It is more than 2 TRILLION barrels. Who gives a blinking crap about “Peak Oil?” It’s just more jargon that we don’t understand to create a crisis from (sorry about the hanging past participle).

Governments and alarmists that don’t care about the truth or the facts are good at creating crisis after crisis, so that they can be your friend and be the only one to solve the problem, that is, by taking control, taking your rights, enacting more laws, forming more committees out of their cousins, and generally living like Kings off of years of perceived crisis. Oh yeah, and they can take over whole countries if they need to and the gullible public is behind them on an invasion, and they can get enough young people to fight their special-interest wars for them.

No sir, the only real perceived crisis here is that the great masses of people will figure out that there is not a shortage, but rather an EXCESS of oil, for centuries to come, and that the price of oil should be back down around $20/bbl. Whatta ya’ know, we’ve been lied to again.

When I was in college in the 1970's, the known problem of that time was that temperatures were getting "colder." By the year 2030, it would be so cold that plants could not live and man would face extinction without drastically changing things. That was to be in my lifetime.

But now the "experts" claim "Global Warming." It's all just a theory, like Evolution, but after so many "experts" parrot the "truth" in the media, and even colleges and universities begin teaching it as truth, then it becomes "truth,' even when at best it's a 50-50 shot. I’ve read that 63% of those surveyed were “concerned” about Global Warming. Geez, don’t people even know how to ask the right questions anymore?

Why make a crisis out of something? There's money to be made, control to be taken, and new gov't offices to fill. And of course, the 30-year cooling trend that prompted the global cooling scare in the mid-70s abruptly ended in the late 70s, replaced by with a 20-year warming trend that peaked in 1998.

Watch this short video from the founder of the Weather Channel how he blows Al Gore's climate change scam out the window. Finally, a REAL EXPERT showing the fallacy of the concept of "global warming". www.kusi.com/home/78477082.html?video=pop&t=a

Philosophy Section

If you don’t mind, I would like to delve a little bit into what you might think you “know.” Tim likes philosophical stuff, so maybe he will let me rant on the rant, of why I’m having to waste my time keeping others from wasting your time with more worthless and time-consuming “information” that doesn’t hold a candle to truth.

How can a “Theory” of Evolution be taken as fact so easily, when this treatise involved in biology asserts no proof, or even a well-defined premise, that man evolved from apes? Even if the truth we are seeking were revealed, people believe that because they comprehend, they conclude that they have successfully taken in the material and reached a proper conclusion. Permanent incorporation requires repeated exposures and answering difficult questions. We can eliminate this major misconception or false expectation with the evidence of psychological research and the Ebbinghaus Curve of Forgetting. Recall deteriorates rapidly unless refreshed; a known fact, proven.

Well, getting too long-winded. I’ve written a whole Essay on truth and how we “know” things, another four pages. It even answers the question “What is truth?” Not even Plato could answer that question.

If anybody’s interested, let me know, and I’ll post it. Oh, and as an aside, it even answers the question of “Why did God create man?” with a darn good “theory.” I challenge you to come up with a better one.

Psych Flux

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Among the body of the trading populous, there is surely a subset of folks that are bearish and wanted to short the devil out of the market once a huge bounce took place, and now they are furious with themselves for having missed the boat.

I'm not in this camp, but I'm certainly partly angry with myself for not being even more aggressive. This is effortless to say in retrospect, of course. Had the market been up 268 points instead of down the same amount, I would be upset with myself for very different reasons! As I've said many times – and will say many times more – traders are rarely happy.

I don't blame the folks that held back, though. I was mentioning "the bounce" repeatedly recently. Well, I think we got our bounce. When, you ask? Monday and Tuesday! Yep, that was the big bounce! Whoop-dee-freakin'-do! 

The psychology that has caused would-be bears to hold back………and caused your long-suffering narrator to not be as aggressive as he might have been………has easy-to-identify origins. Let's face it, for the past ten months:

+ Every dip was a buying opportunity;

+ The government clearly was not going to let equities fall;

+ Goldman Sachs wasn't going to let equities fall;

+ Short positions were good for one day; two days, tops;

+ Just like in the movies and on television, we all knew that things were going to work out fine in the end.

It is my contention that the reality has changed. My response to the above five points is:

– Rallies are now selling/shorting opportunities. The kind of event we saw on Monday/Tuesday is a gift to bears. I understand Cramer was jumping all over the place with excitement on Tuesday after the close. That makes sense, given the man's track record and the psychology of the market.

– The government has bigger fish to fry than the stock market. The doe-eyed optimism from just one short year ago is utterly gone, and I imagine Obama might be quite content to leave the office after one term, Lyndon Johnson style. It's going to be a job that nobody wants.

– If there is one homogeneous religion on Wall Street, it's the worship of money. Goldman cares about profits and profits only, and whether it's the short side or the long side, they're going to make profits happen.

– Closing out short positions after one or two good days can produce some quick and tidy profits, but meaningful profits require some patience – – and some tolerance for swings up and down. I've been sitting tight on my shorts, even though days like Monday and Tuesday make it a bit nerve-wracking.

The fifth bullet point – – about how everything is going to work out just fine – – is something that simply isn't true. The video-saturated public gets accustomed to Happy Endings, because that's how things are supposed to go. But think about the everyday people of Germany in 1935………..or American in 1860……..or Japan in 1940………or China in 1949. These were regular folks, not much different than you or me, just trying to provide for their families, live their lives, and get along. Do you really think the fact they didn't expect the horrors that awaited them around the corner made any difference? Of course not.

We are living in a slow-motion train wreck, and no one knows how the movie is going to end. I do believe, however, that even though no one on the planet knows if the environment we're going to find ourselves in is going to be (1) deflationary, or (2) inflationary, neither of those scenarios is going to produce a happy result. In other words, we know things are going to end badly. We just don't know which flavor of bad.

In the meantime, tomorrow is going to be much more interesting than your run-of-the-mill trading day. There is no reason at all the Dow won't move up 300 points. There also isn't any reason it won't move down 300 points. Irrespective of what it does tomorrow, I think a new general trend is in place, and I think everything changed starting on January 20th, no matter what the next few days holds.

Paging Doctor Freud

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I saw this fascinating photograph in yesterday's newspaper. The scene was of the president's top financial and economic advisors, flanking the President, who was discussing the 2011 federal budget.

Do these gentlemen seem posed in a way that suggests they are a little – – I dunno – – fearful? I have clustered them more tightly together than they were on the podium for the sake of space……….

0203-protect

The Government’s Forecasting Ability

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Tuesday morning's New York Times had an interesting article on the federal budget and the fact that annual deficits are projected out as far as the eye can see. The federal forecast extends through 2020, and it shows year after year of trillions upon trillions of dollars of red ink.

One aspect of this I've always wondered about is: how accurate have past federal forecasts been about surplus/deficit projections? Intuitively, I had always assumed Washington's projections would have leaned heavily toward the rosy side. It turns out this supposition was correct.

The Times put together a very interesting graphic – shown below – illustrating, over the years, what the projection of the ensuing ten years would be (shown in light blue) versus the reality (shown in dark blue). As you can see (although I know the faint blue is hard to discern), in almost all cases, government projections were too high by hundreds of billions of dollars. I've highlighted some of these clusters of optimism with the rounded red rectangles.

Even the forecast from last year (the light blue line on the right side of the graph) has already been shifted downward (e.g. much worse deficits) just one year later.

0202-debtpredictions 

What does this mean? It means that, even though the projections for the next ten years are the worst ever in the history of the United States, they are probably far too optimistic.