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March 01, 2012

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SANTORUM,PALIN,GINGRICH---

Santorum proved he is number 2 last night by winning three states and pushing Romney hard in Ohio. Santorum is riding the religious right energy wave against Gingrich and Romney. This strategy worked in Oklahoma and Tennessee where there are strong pockets of the religious conservatives. However, he is going to have to win in a strong strong moderate state soon.

Palin is very interestingly "voting for" Gingrich while not endorsing him in order to keep the faith with the Tea Party. At the same time she has much good to say about Romney and offers him guidance on his forthcoming battles with Obama. In doing this she and Dick Armey who has endorsed Romney are leading the Tea Party to a slow acceptance of Romney. Exit polls last night showed that it is working as Romney gained around 50% of the Tea Party votes against Santorum. And, Romney has a decisive lead in women votes over Santorum.

Gingrich, the self proclaimed party intellectual, acted like he was at a 50 year class reunion as he marched us back through time with his long winded speech on the history of his comebacks and bitterness toward his opponents be it Romney, Wall Street, the Party elite or Santorum. His $2.50 gas speech which I hear he is going to pay to give in a nationwide 30 minute prsentation on Energy was so boring that I wanted to turn him off. And, finally his constant "I am the only one" who can debate Obama claim to fame is beginning to make him sound exactly like the "I" man. Romney, Paul and Santorum can all hold their own against Obama and Rubio,Christie and Palin can all handle Biden. $2.50 gas is another smoke and mirrors scheme with no basis for achievement. Gingrich will muddle through the south but at this point north of the Mason-Dixie line he cannot finish higher than 3rd.

LEADERSHIP DEFINED; In the book, 'The Real Romney,' he places a sheet of paper on a wall requesting volunteers . He is leaving Bain Consulting Co and starting Bain Capital. Every single employee of Bain Consulting placed his name on that list.

T BOONE PICKENS--this morning once again gave the American public a dose of reality. The world's oil prices are controlled by OPEC. The US enjoys the world's cheapest oil and gasoline and natural gas prices. Oil: $109 versus $129. Gas: $3.75 versus $8-$10. Natural gas: $2.30 versus $13-16. The US problem is we do not exploit our resources and turn them into exports and we consume too much Diesel fuel with our fleet of 16 million trucks. With Diesel at $4.20 his plan is to convert the truck fleet to natural gas over 5-10 years. Note that a week or two ago Navigant announced the production of natural gas trucks and yesterday GM did the same. This conversion will decrease US imports from OPEC 60% and save 2.2 trillion dollars in imports. Immediately most critics (not counting global warming fans) point out that there are not a lot of NG stations along the road. However, for trucks there are about 400 nationwide and as the trucks convert T Boone says there are already many truck stop companies planning to add NG to their stations. T Boone says it is not necessary to have the Federal Government install the infrastructure although it would speed things up. So where might the problems be?

First, understanding the gasoline problem is important. Gasoline prices go up for two reasons:
1.Summer gasoline is different than winter gasoline and is more expensive to produce so gasoline always goes up in the summer. Simple enough.
2.The US imports oil and refines it. We then export a large portion of gasoline to other countries where we can make larger profits. Remember that gasoline is taxed at the pump significantly and that money goes out of our pockets and into the Federal and state and local government bank account. It is not profit for the oil companies. Gasoline sent to Europe sells for $8 a gallon. $10 in Saudi Arabia. etc. So, oil companies like any other business sell to the highest bidder. If instead of importing the oil at a higher price we produce our own oil or refine oil in the Canadian pipeline then we start with a lower cost basis and gasoline will stay lower.

Natural gas , however, will do the same eventually. American companies will eventually get around to liquifying natural gas and transporting it to China or India where it sells for $16. So, it is unlikely that NG will stay at $2.30 very long. The next cold winter will push it higher. The key to maintaining stable prices is exploration and production. Four more years of Obama and gasoline prices will be much higher. The amount of NG in the US is huge and the potential to use it just beginning to be exploited. T Boone says he is frustrated by a White House and a Congress who don't understand the US energy situation. But, I can tell him--T Boone: " They understand but they have a different agenda for energy and NG will only be used for political purposes to get elected."

BII McCORMICK @ 88% APPROVAL; With the 'Market' probably getting ready to tank AGAIN; campaign contributions toward you might be a good alternative. What do you say Bill ? We might have to go back to Gerge W. to find those approval nos. GOOD WORK

Today's observations:

VOLT on HOLD
GM is putting the VOLT on hold. Will likely layoff 1300 workers. GM announces that GM and Chrysler will begin production of trucks powered by Natural Gas. One week after a 7% buyout of the French company GM freezes the Obama prized electric car and heads back to fossil fuel—Natural Gas. What about hybrids you might ask?

Well, here are the facts: the hybrids in their 5 years of sales have captured 2.5% of the car market. And, of that the Prius hybrid has 50% of the hybrid market. For now the electric and hybrid markets have made little impact. Once again the point to be made is that one cannot easily create a mass market unless consumers want the products. SO far the US consumer prefers the high mileage gasoline cars like the Ford Focus. President Obama stated he would buy a Volt and drive it after his Presidency but it may have to be a used Volt. Another embarrassing moment for the President. By the way First Solar another of the big solar companies stock is now down 80% since he took office.

ISRAEL----

In perfect smoke and mirrors fashion the President addressed the Israeli conference this weekend and told them that America will not let Iran get a nuclear weapon while at the same time warning that there was too much talk of war. But, at the same time he stated that we needed to let sanctions work. When do Japan,Russia,India and China join the sanctions? Today he somehow convinced the Israeli PM to sit with him and look happy as he assured them we have their back but they need to wait. Meanwhile, in the opposite of smoke and mirrors the PM smiled and said that Israel would be in control of their own security and would strike when they needed to. Now, those sounded compatible but they are more independent than compatible. And, Israel now has the President in a position that if they attack he must come to their aid or back out of his assurances—something that would surely cost him the Presidency. Since the President refused to define events that would trigger a go decision it remains for Israel to dictate the timing of action.

McCain----called today for air support for the rebels in Syria. No fly and action against Assad’s troops. Interesting next move for the President there as well.

HILLARY---says Republicans do not speak for the US on foreign policy. Only the President. And, she asked the Muslim world to ignore them. Consider the President’s apology to be the US policy toward Muslims. Based on that logic the Democrats should not have been so critical of GWB on Iraq. After all he was the President.

VOLT on HOLD
GM is putting the VOLT on hold. Will likely layoff 1300 workers.

I posted my energy comment on CNBC this morning and it received 88% agreement. Even the liberals are beginning to understand the misdirection of this energy policy.

Energy strategy results show the difference between reality and theory. In theory there is global warming. In reality fossil fuels add to it. In theory the people want it stopped. In reality Al Gore and Soros want to make billions off the carbon credit scheme and the government investments in alternative fuels. In reality the American people want cheap cars, cheap gas and cheap electricity. In theory if the President can subsidize an exotic set of new businesses based on alternative energy then millions of new high paying jobs will be created. In reality building windmills, solar panels and batteries are low paying jobs which quickly moved to China and the companies the President bet on are now in chapter 11. Their workers laid off. In theory the world is ready for alternative fuels. In reality even with gas at $10/gallon in Europe Spain's investments in alternative energy were not competative with fossil fuels and the nation is broke. In reality energy alternatives must be cost competative before a mass market emerges. Today the alternative energy market is for those who have money to waste. In reality you cannot drive people to alternative cars that change their lifestyle by simply restricting fossil fuel production and driving prices up--they will respond and vote you out of office.

The problem with environmentalists is they always focus on elimination instead of improvement. If they would spend their money and energy on improving safety,products and systems rather than banning them then businesses would be far quicker to make changes in response. Making pipelines less prone to leaks, making deep water drilling less prone to accidents, making horizontal drilling less likely to produce escaping methane gas, favoring a move toward natural gas versus electricity, opening new exploration areas where high quality reserves can be found while demanding safe drilling improvements, pushing for nuclear plant approval while demanding earthquake proof standards, etc. are all better strategies than demanding we close off all the off shore oil wells in Southern California and the Gulf Coast, banning drilling in Alaska or national parks or trying to eliminate the use of fossil fuels completely. The US has just closed 5 coal plants and 3 gasoline refineries. Those are jobs, revenues and strategic resources the country needs for security as well as exports to balance our trade deficit. This administration "gets it" they just have a different agenda for the nation based on theory that is not working. This 12 months their energy strategy is to do anything and say anything that will get them to 4 more years. In reality we cannot afford 4 more years of theory.

IS IT ALL 'MOOT'? Radio stations in the SE are broadcasting Sheriff Arpaio's investigation results. Reports by investigators state The Administrations last release of a 'Certificate of Birth' for the President was "fraudulent". This was also declared within days of its issue by an Atlanta software firm and is in court.

'BIG SOLAR', Subsidized Implosion ?; Is the Administrations' 50% subsidies of 'Big Solar' Power Contracts becomming the source of their demise ? A third Co ('Abound Co'.-2 billion) and a fourth (First Solar-600 million)have arrived at the 'abyss'. Have the subsidized programs caused their 'reach to extend beyond their grasp' ?

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