Patrick’s Rants

Got this in the email today:

Cindy Sheehan Goes to Washington
Cindy Sheehan

There is nothing unusual about the fact that I am heading to Washington, DC today. Indeed, since my son was killed in Iraq on April 04, 2004, I have been to our nation’s capitol dozens of times.

(more…)

(Updated 2008/06/18 18:15 - wow that was freaking fast!)
(Updated 2008/06/18 18:45 - I didn’t get to respond to this last update as it was just after dinner)
(Updated 2008/06/26 19:30 I should have had a response by 2008/06/23 13:43 even allowing for a “business day 48″ So I sent the follow up email)
(Updated 2008/07/01 7:24 Still no responses from Sandisk despite two emails to the rma address)
(Updated 2008/07/03 6:40 they called and left a message on my answering machine - no concept of what time of day it is here I guess - and left a bizarre message in my RMA inbox)
(Updated 2008/07/23) I have the new MP3 Player.

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Attentive readers might remember my Sandisk Support post. I’m now doing the dance with Sansa again and this time I’m a little steamed. I filed a support request that was closed after two contacts. I’m going to post the saga in all its glory. The Sandisk is dead. Won’t power on.
This is a long post. I will add an update line to the top of the post as it progresses. (more…)

We’re having an impact! Today we reached a quarter of million mark, a huge fundraising milestone. We’ve collected almost 8000 signatures from committed voters in San Francisco. And for the first time since she’s taken her seat Madame Speaker (Pelosi) has had to talk about why’s she’s taken impeachment off the table.

This week the House Judiciary Committee will hold clearly imperfect and pandering hearings into the “abuses” of the Bush administration. Cindy for Congress, of course, believes with the vast majority of San Franciscans that impeachment hearings should have begun in January of 2007 and, if so, would have been completed by this time.
(more…)

We made a commitment to you that when the time came, we would do
everything we could to help Cindy Sheehan. That time is now.

Cindy Sheehan is making a courageous run for the Congressional seat
in San Francisco, to challenge Nancy Pelosi, who has done nothing but
cave in to the Bush/Cheney criminal war agenda, while the approval
rating of Congress drops into single digits for the first time ever.

(more…)

I’m not a gynecologist
But I’ll take a look

Last Tuesday a memorial service was held for seven helicopter crash victims here in Flagstaff¹. This town is both big and small at the same time. While you might not recognize everyone that you see here everyone is connected to everyone else and there are many stories about the people involved and more untold about this event.

The crash occurred Sunday June 29 at around 3:45pm.² Investigators combed over the crash scene for almost a week. They collected pieces of the choppers to send to Phoenix to reconstruct the scene.

I have heard a few stories regarding the crash and some of the people involved. (all second hand of course) There’s Michael McDonald the firefighter who needed emergency treatment for an adverse antibiotic reaction, whose crew mates reportedly left the fire in the Grand Canyon upon hearing about the crash. One of the the pilots seemingly knew he was going down and had begun to unstrap and remove the fire extinguisher in his cockpit but was unable to use it. The flight nurse hung on for several days at the Flagstaff Medical Center in critical condition while hospital staff held very little hope that he would survive. On one of the helicopters a crew member got out at the Flagstaff airport due to weight limits unknowingly saving his own life and setting himself up for the condition known as survivor’s remorse. Although flights were grounded, the remaining employees and crew members insisted on being allowed to get back to work flying.

One commentator has said that we don’t say thanks enough to these heroes in the sky. We probably don’t. They fly in, grab someone who needs serious medical attention and fly off with them in the space of minutes. It is a dangerous job for which they receive a little extra pay that may or may not make up for the incredible amount of stress and levels of high adrenaline that tend to be maintained throughout the entire flight.

1. Memorial Service
2. Initial crash reporting

I don’t comment much on the passing of public figures, but I chanced upon the passing of Joe Barr this morning. While I didn’t know the more playful side of Barr that is written about, I did read his column from time to time.

This morning we also hear that Tony Snow has died. Snow was a staunch Fox News Republican defender who worked for the White House as well before he resigned to concentrate on fighting his cancer. The link also mentions that he subbed on the Rush Limbaugh show which is no major surprise.

If we are going to remember Snow, we must also remember Tim Russert. A quiet persevering host who never let his guests off easy.

And let’s not forget George Carlin. In the days after his death he was remembered on NPR, NBC (playing early Saturday Night Live episodes) and Limpbaugh’s show. Unfortunately, although Limpbaugh claims that George was behind Limpbaugh on environmental issues (quoting from rushlimbaugh.com)

CARLIN: Let me tell you about endangered species, all right? Saving endangered species is just one more arrogant attempt by humans to control nature. It’s arrogant meddling. It’s what got us in trouble in the first place. Doesn’t anybody understand that? Interfering with nature. Over 90%, way over 90% of all the species that have ever lived on this planet, ever lived, are gone. They’re extinct. We didn’t kill them all. They just disappeared. That’s what nature does. We’re so self-important, so self-important. Everybody is going to save something now. Save the trees, save the bees, save the whales, save those snails. And the greatest arrogance of all, save the planet. What?

RUSH: This is great stuff. And of course these are the things the left ignores about George Carlin. But listen to this next one.

Listen to this next one indeed. I found the skit funny. But I can see it for what it is: a routine. Limpbaugh, unfortunately for him, cannot. Instead he sees this as support for tearing up the planet.

CARLIN: I’m tired of these self-righteous environmentalists, these white bourgeois liberals who think the only thing wrong with this country is there aren’t enough bicycle paths, people trying to make the world safe for their Volvos. There is nothing wrong with the planet. Nothing wrong with the planet. The planet is fine. The people are (bleep) — difference, difference. The planet is fine. Compared to the people, the planet is doing great. It’s been here four and a half billion years. Did you ever think about the arithmetic? The planet has been here four and a half billion years. We’ve only been engaged in heavy industry for a little more than 200 years.

RUSH: Yes. Does this not sound like things you have heard on this program?

CARLIN: Two hundred years versus four and a half billion, and we have the conceit to think that somehow we’re a threat, that somehow we’re going to put in jeopardy this beautiful little blue-green ball that’s just a-floatin’ around the sun? The planet has been through a lot worse than us, been through all kinds of things worse than us, been through earthquakes, volcanoes, plate tectonics, continental drift, solar flares, sunspots, magnetic storms, the magnetic reversal of the poles, hundreds of thousands of years of bombardment by comets and asteroids and meteors, worldwide floods, tidal waves, worldwide fires, erosion, cosmic rays, recurring ice ages, and we think some plastic bags and some aluminum cans are going to make a difference? The planet isn’t going anywhere. We are! We’re going away.

And did you notice? He says, “Compared to the people, the planet is doing great. It’s been here four and a half billion years”
Well Limpbaugh, if you don’t understand it’s a skit now, you’re just dumb. I mean, the evangelical born agains think the earth is only 6000 years old and that humans road around on dinosaurs. That makes extinctions scarier not less scary. But Limpbaugh sees this as supporting his ideas that we should essentially be “Earth first, we’ll mine the rest of the planets later.”

Yes my friends. Rush Limbaugh here again. I know what’s right for you. Don’t listen to those Democrats. They want you to use those toxic light bulbs - those curly fluorescent things. The ones that have as much mercury as a year’s worth of fish. The old light bulbs will be illegal my friends and you won’t be able to eat the fluorescent ones! That’s something you won’t hear from the gangstas in the drive by media.

Oops! I’m off track here. I really wanted to talk about that myth, “global warming”. Today on my web site I cite an isolated example where the ice is actually expanding in Northern California. My friends, if global warming were anything more than the Democrats way of controlling your life, there would not be this expansion of the ice sheets in California. And aside from that, my ice maker would stop working. Inside my freezer the temperature hovers around zero degrees celsius which proves that Al Gore is still bitter over the stolen legitimate election in 2000 and he’s making up global warming to try to blame on the Republicans. I mean, Jimmy Carter knew global warming wasn’t real. He told people to put on a sweater to conserve energy! You don’t put on a sweater unless it’s cold my friends; so Jimmy Carter single-handedly rebukes the global warming “theory”.

So now you know. Global warming isn’t real. And even if it were, the biggest “green house gas” is water vapor my friends and no one’s suggesting that we get rid of rain! Plants and trees need carbon dioxide so more is better! Let’s drill the hell out of the coast line and the Alaska wildlife preserve. Heck, I’m not going to be around for the consequences and frankly I don’t care.

Or - the other things that happen in the futures/commodities market.
Rush stated on his show:

“So once again, my friends, it falls to me, becomes my responsibility to give you a short course on speculators and speculation. We’ve done this a couple of times before, but let me try a different tack. What is speculation? What is the commodities market? It’s the futures market, by definition, speculating on what’s going to happen in the future, which means that people are betting on the price of whatever commodity in the future is going to be, be it soybeans, be it corn, be it oil. “

Right so far…

“Speculators are just bettors, and they make money both ways if they’re right. If they bet the price is going to go down and they sell their contract and it goes, they’ve made money. If they bet it’s going to go up and they buy a futures contract, they make money.”

Um… I think what he’s trying to say is that if you short or sell a contract and the price goes down you make money. Same if you are long or buy a contract and the price goes up you make money. But, if you are short and the price goes up you lose when you have to close out your contract. Same thing for the longs. If you buy and the price goes down you lose when you close your contract.

He goes on:

“But there’s nothing about futures or options that makes it any more attractive to bet that commodities will go up than to bet they will go down. If you guess wrong on the direction, you lose money. That’s all you need to know about speculation. When you speculate on the price of a commodity, what you’re doing is betting on whether the price will rise or whether it will fall. You’re not betting on whether you want it to rise or fall. This is the difference. Everybody thinks that the speculators are trying to drive the price up or trying to drive the price down, that’s not what they’re trying to do. They’re guessing. They’re betting. It may be educated guessing, educated betting, but they still are. You’re not betting that you want what you’re doing will cause the price to rise or fall, not whether you hope it will rise or fall. Your money is going to do nothing to cause the price of oil to rise or fall. It’s gonna base itself, all the results on the good old laws of supply and demand.”

Futures markets are a combination of futures contracts and options on those contracts. Suffice it to say that it gets complex. There are speculators in these markets but the biggest players are the suppliers and the consumers. In this market the suppliers are the oil drillers and pumpers, the consumers are the oil companies themselves. In some cases the oil companies can be the suppliers as well. An oil producer might want to be long or short depending on which way they think prices will go.

Let’s take a hypothetical oil producer - some guy in Kuwait for instance. He is trying to get the highest price for his oil that he can while trying to maintain a minimum dollar amount that he will get per barrel (bbl). So Kuwait guy decides to lock in a price of $80.00 bbl. He enters a contract to sell (shorts) one contract¹ at $80 bbl. We’re going to assume that he will hold his contract until expiration. If the price of oil is $90 bbl he loses because his contract is for $80 bbl and that’s all he gets. If the price goes down to $60 bbl, he gets $80 bbl; the price he locked in. Shell Oil decides that they don’t want to pay any more than $80 bbl at the same time as Kuwait guy decides to sell and they buy one contract at $80 bbl. We’ll assume they hold their contract until expiration as well. If the price goes to $90 bbl, up Shell Oil only pays $80 bbl because that’s the contract they bought. If the price falls to $70 bbl they still pay $80 bbl.

Enter the speculator or investor. When the guy in Kuwait decides to short but Shell Oil isn’t ready to buy the investor enters the contract. He buys the contract for $80 bbl. If the price starts to rise Shell might decide they want to lock in their price at $85 bbl and buy a contract. The speculator decides to sell at $85 bbl and that’s the contract that Shell ends up with. In this case the speculator made $5 bbl² the Kuwaiti producer makes nothing and Shell locks in their price at $85.

There are a couple of interesting things about commodities contracts. First the margin requirement - or amount of cash that you have to have in commodity trading account - is quite low when compared to stocks. It changes over time and by how much money you have outside of the account, but it can be as low as 10% of the contract amount and quite close to 100% depending upon the volatility of the market. If you have a contract and don’t close it out by buying when you are short or selling when you are long you are required to either deliver (if you are short) or receive (if you are long) and pay up if you happen to be long.

Where the speculators do can affect the price of oil (or other commodity) is if they believe that the price it too low and there is no one to short a contract (for each buy there is an equal and opposite sell). The shorts don’t get into the market until the price is too high. If there is no one to sell you a contract you can’t buy one. They don’t make the price go up or down.

Like I said, Rush got it partly right. I didn’t add the options on the commodities markets which adds that much more to the mix. If you want more, check out one of the many commodities brokers, such as Lind-Waldock

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1. 1000 bbl
2. Times 1000 barrels = $5000.00

Everyone’s pointing the finger at everyone else. The oil companies blame the “speculators” for the high cost of oil and gasoline at the pumps. George Bush and John McCain want to drill offshore and in the arctic reserve saying that it’s the Democrats fault for the high prices.

Here’s the truth. Gasoline stations make pennies per gallon on the sale of gasoline. If they don’t sell something else, they are slowly circling the drain. Credit card processing charges alone are killing them. It’s not the gas stations that are raising the price of gas.

Speculators are betting that the price of oil will go up or down. They don’t actually control the price, they merely bet on the direction. Anyone who knows anything about the commodities market knows that the so-called speculators do nothing to actually set the price - except to bet that the price will go one way or another.¹ The commodities market also helps to smooth out the price and you will find that the oil companies participate in the commodities markets to enhance their profits and even out their costs. The oil companies are reporting record profits². If it were truly the speculators - and only speculators - causing this price rise, then the oil companies would have the same profit margins as they did in the 90s. But that’s not the case is it?

The truth about the high price of oil is complex. It’s not going to be solved by drilling for more oil. It’s not going to be solved by lifting bans that protect wildlife, the coast, fishing industries, etc. The first reason is that while drilling might be safer today than it used to be it’s going to take a long time to get that oil into the pipeline and the risk to the environment is simply not worth it. Gas will be at $10.00 per gallon before we start to see oil begin trickling into the supply chain.

I’m going to be political here and blame the high cost of gasoline right at the Administration’s feet. I wrote about Dubya funding hydrogen research nearly two years ago. While funding for research that promises some possible returns 20 years from now, it does nothing to increase the supply or reduce the cost of oil today and will not work in today’s automobiles.³ So that’s strike one against Bush. The fact that he and Dick Cheney have heavy ties to the oil industry mean that even if this were a genuine initiative it’s highly suspect. Congress and Bush need to support research like that being done by Conoco Phillips and Tyson Foods⁴ which would create a renewable diesel fuel source⁵. That’s funding fuel that can be put into today’s cars.

Congress and Bush can modify the Farm Bill and fund subsidies for farms that produce ethanol feed crops. Without getting into all of the other politics of the farm bill, paying someone to leave their fields fallow to prop up food prices can be replaced by paying the farmers to redirect their output. The farmers get essentially the same result; prices remain steady and they are being paid to work instead of being paid to not work as the fallow payments encourage. Engines that can use ethanol in up to 85% concentrations exist today - the hang up is not having the premixed fuel. The other thing they can do is reduce or eliminate tariffs on imports for use in ethanol production (not to compete with food).

Cheney and Dubya need to release their energy summit meeting notes. It’s not top secret. If there’s nothing to contribute then why did they have the meetings? If all they did was toss some bones to the energy companies and Kenny Boy and twist a bogus energy crisis in California⁶ into a recall campaign against a Democratic governor, then we need to know that too. There is nothing top secret about electricity. And hey, if it’s OK for Dubya and company to listen in on my private phone conversations (and if I have nothing to hide I won’t mind will I?) then it’s damn sure OK for me to read what Kenny Boy and Dick had to say about my electric bill.

The credit crisis - as it’s being called - is a major contributor to the price of oil. Bankruptcy reform, a laissez faire attitude about the middle and lower class, and a hands off approach to the housing market all contribute. Pretending that we’re not in a recession doesn’t help. With our financial markets slowly melting down, the value of the dollar vs. other currencies is sliding. Oil is traded worldwide in US dollars. So when the Canadian dollar is twice the US dollar (when it used to be $.70 US) means that the price of oil hasn’t really changed. Consider if the dollar is only worth half of what it once was - the price of oil at $130 bbl is really equivalent to $75 a few years ago compared to the value of the dollar on the world market. (I’m simplifying this a little - well, maybe a lot, but you get the drift). None of this affects people in Dubya’s income bracket. They don’t care. You won’t see Dick bicycling to work any time soon so none of this will change.

Acknowledging that global warming is real, reducing energy dependence on the rest of the world through innovative technologies that don’t require a complete change in the type of cars that we drive (that type of change is ten+ years in the making according to Cringley) and doing things like adding more bike lanes will reduce our dependence on foreign oil. Riding your bike to work one day a week for a five day work week reduces your auto fuel bill by 20%. Asking US Citizens to sacrifice a little would reduce our dependence on foreign oil. Installing just a few more wind turbines and a couple more solar panels will help too. Actually funding research that will help today and tomorrow will help. Hell even giving new technologies the same breaks that are currently given to oil companies would even the playing field and eliminate the need for drilling over a short period of time.

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1. I started writing this a few days ago and yesterday (2008/06/25), that big fat idiot blow hard Rush Limbaugh was telling his listeners the exact same thing, although I didn’t hear him remind listeners that oil companies participate in the commodities markets. If you dare, the link to that part of his show - where he got it partly right - is here. I’m posting a follow up with the other things that commodities markets do/how they operate.
2. Oil company record profits
3. Robert X. Cringley restates that in his column, It’s the Platform Stupid, presumably he has done the research that backs up his “platform” or type of car claim. He revisits the energy topic in What a Difference a Day Makes
5. The original fuel source for diesel engines is said to be peanut oil, a renewable source of diesel fuel.

Status of Conoco Phillips, Tyson Foods collaboration.

6. Enron, led by Ken Lay, is now know to have caused the energy shortages in California including rolling blackouts by manipulating supply, exploiting deregulation all while calling for more deregulation.