Hank Speak

I hope the only lesson learned here is not, if you are going to fail, make sure you fail so big we can't afford to have you fail.

Debt should not be used to increase your return on equity numbers, debt is bad, debt is dangerous, debt is to be avoided, always has been, always will be.

I find it odd that companies like Microsoft, that have no debt, grow revenue, grow net income, each and every quarter don't see there stock go up.

While their stock went no where for the last 5 years, leveraged home builders and investment banks saw there stock go through the roof.

For a while.

So now that people are a little "concerned" about their investment holdings a check on the amount of debt a company has may be an idea. I'm an old banker so it's always the first thing I look at.

One reason to check this now is the cost of borrowing is going up, way up, for everyone.

But the best reason to check the amount of debt on the balance sheet is, the last time I checked you can't go bankrupt if you don't have any debt.

Public companies have access to public equity, they don't really need alot of debt. They have taken it on over the past 10 years because it was cheap and they could boost their return on equity number with it.

It looks like those days are over.

Senate Republicans Defeat Oil Windfall Tax Measure

Dear Communists:

We the Democratic senators wish to apologize for those nasty hearings way back when. They were all the Republicans idea anyway. We have seen the error of our ways and now wish to embrace your political and economic way of life.

Yes we are somewhat concerned with the North Korean, Cuban, and Russian standard of living but we are willing to make sacrifices in order to ensure no oil companies make billions of dollars.

By the way before we commit fully to this new, we are all equal, way of life what is the price of gasoline in North Korea?

While your checking on that we will continue to ensure there is no drilling for oil on the ice or the water around here, and keep trying to convince those idiot Republicans to take the oil companies money and .. uh.. build windmills to .. ah.. lower the price of gasoline.

Thank you.

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Energy Speculators Draw the Heat

"Members of Congress have joined the anti speculation bandwagon blaming speculators for high oil prices and have proposed legislation to curb energy trading." (click the read more icon for the full NY times story)

Whenever the government interferes with the market bad things happen.

Always have, always will.

Maybe they should increase margin requirements in the corn market as well?
Or is the high price of corn a direct result of government subsidized ethanol plants?

Perhaps congress should question farmers about the high price of corn, demand to know how much money they are making, threaten a "windfall" corn tax?

Or is farmer bashing not as politically advantageous as oil executive/speculator bashing?


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Senators Challenge Oil Executives

Democrats on the Senate Judiciary Committee grilled top oil executives over their pay and warned that Congress was intent on taking action that could include a tax on so-called “windfall” profits. (click on the read more icon to read the full NY Times story)

I try not to get too political here, but I can't stand by without commenting on this one.

Blaming oil executives for the price of oil has got to be the dumbest thing I have ever heard of.

Taking the oil company's profit with a "windfall" tax could be the second dumbest thing I have ever heard of.

Are the senators going to take those tax dollars and go find more oil?

Any guess what the average price for oil was in 1998?

$11.91

I guess the oil executives 10 years ago weren't smart enough to manipulate the price of oil to a more profitable level.

Where were the senators in 1998?

Maybe they were busy buying SUVs.

Where do they think the profits from publicly traded oil companies go? They go right back into the economy looking for, drilling for, and producing more oil.

What are the impediments to finding and producing more oil?

My answer, politicians and environmentalists.

Who pays for politicians and environmentalists?

You.

You elect and pay the politicians. You give money to the environmentalists.

They both say you can't drill for oil here or there, you can't import "dirty" oil, you can't build nuclear reactors, you can't, you can't, you can't.

Meanwhile we, (I put myself in this category) have spent the last X number of years burning fossil fuels like there was no tomorrow.

Now what?

We all need to reduce our energy usage.

We need to move electricity production from fossil fuels to nuclear.

We need to allow the "greedy oil companies" to spend their "windfall profits" looking for oil anywhere they want to.

There are environmental risks in both the nuclear and oil production solutions. We need to mitigate these to the best of our abilities while allowing production to occur.

The choice is ours, not the politicians, and not the environmentalists.

We use the energy, we have to make these decisions. We can choose to allow the energy industry to produce what we demand. Or we can choose to impede the energy production we all need.

We cannot demand lower carbon emissions, outlaw oil drilling in certain areas, and then scream at oil executives because we don't like the price of gasoline.

I do have to remind myself every now and again that all politicians have only one agenda. Get re elected.

Ultimately that is their only concern, and if they can make some political hay yelling at oil executive then that is what they will do.

What they actually believe is anyone's guess.



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