Rothschilds – another non-sustainable business model

Inspired by an article by Jesse Riseborough and Simon Casey

NATHANIEL Rothschild’s the future 5th Baron Rothschild says he now plans to build one of the world’s largest coal producers.

A member of the Rothschild lineage that helped bankroll Britain’s war against Napoleon, he is leading a $USD 3 billion ($A3.12 billion) takeover that will create the biggest exporter of coal to China

So what do you think the motivation of this is … perhaps greed and control …. by suggesting he could corner the control of the coal exports to China …. when China’s apparent strategy is to use all the worlds coal before they have to touch their own ….  because its cheaper …. and makes excellent strategy … because then they will have the option to burn their own coal totally within their own borders … and so much for the worlds need to reduce burning of fossil fuels.

Most Indonesian coal (there are exceptions… yes but few) is generally not preferred for China in any case due to its high water content –  so what is the real strategy behind this …?  perhaps it is to subtly ( though there is nothing subtle about this) apply pressure to China to just suggest that he can for another advantage or have China as a partner in this venture .. mind you I work in commodities … I think he has a snowballs chance in hell of ultimate success .. going up against a sovereign state in this fashion with their essentially unlimited balance sheet –  but as I said … perhaps this is the opening gambit, and this is merely a vehicle for another strategy, yet to be revealed.

If China even considers such a block possible, does he really think that China will let someone outside of China control –  where importing coal is seen by China as part of an overall strategy … people have to stop thinking that China thinks as we do … they don’t …. their vision runs in decades not our baby steps, in other words the next 3–12 months where most of the western world seems to reside.

If we continue down this road, China will have the last laugh …. they are using our greed and lust for money to win this particular battle … and the war … (as they see it) … please wake up and understand.

If this article is true, I would be surprised, as I really would have thought that the 39 year old Nathaniel Rothschild would have come up with a more innovative and technologically savvy strategy … such as control of essential earth minerals … necessary for us in today electronics or perhaps tomorrows energy sources or perhaps research into a sustainable way to make hydrogen .. which could provide a portable essentially non-polluting power source from fuel cells …. but no … with this dated  coal strategy which would have been innovative 50–100 years ago .. I so don’t think so –  as it has so little vision and is so passe’  ….. do get with it mate, remember what century you are in.

Tags: Rothschild+strategy+is+dated

Gulf of Mexico

A sea turtle is mired in oil from the Deepwater Horizon oil spill on Grand Terre Island, Louisiana June 8, 2010. (REUTERS/Lee Celano)

From the Bostpn Globe, here is the link to over 40 other pictures taken during the disaster… we all did this .. because of our dependance on oil, hopefully some good will come out of this… and from where I stand, it could only be we need to invest in fully sustainable renewable sources of energy … many countries are …. we all need to get on board,

Arcimoto Pulse

Hi… here is something I thought was interesting a new electric 2 seater car, made in the USA..

You can contact them…

Arcimoto, LLC
544 Blair Boulevard
Eugene, OR 97402

(541) 683-6293

here is the link to their website…http://www.arcimoto.com/concept

RSPT Changes – is this Government having a Blonde Moment?

The RSPT… I of course do not cast any slight against blonde’s in general who are far more intelligent than the players in question, namely Rudd and Swan

From Rueters (with a staff reporter)

Swan says country will unite behind RSPT

Meanwhile, Treasurer Wayne Swan says Australians will come to support the RSPT, given the need to boost super, build new infrastructure and help small business.

“The country united behind stimulus and we’re confident that in the fullness of time – despite all the argy bargy of recent weeks – they will get behind these plans for a stronger economy as well,” Mr Swan said in a speech in Brisbane.

“I’m not going to pretend this debate has been easy, but it’s a debate I welcome because it goes to the core of our prosperity in the Asian Century.

“It’s really important we have this national debate and every view gets aired as we work towards the final detail of the policy.”

Like I said …  I keep saying this about Swan and Rudd… are their any lights on in Canberra… blonds as well as being more fun, have considerably more intelligence that these soon to be “former” members of the Australian Government..

Swan and Rudd … will be the first players at their level… I was going to say calibre (wrong), to shoot themselves in both feet …. I wonder if Labour wants to get re-elected… if they do … some tough choices by the back room boys need to be done and done quickly…. it proves again that the Labour party has NO concept of Business or their irresponsible rantings into the market.  Changing the sovereign playing field after miners have made their investment is the worst form of governance… retrospective taxation is a totally cowardly and irresponsible way for governing … of course if they had made these changes only for future projects they would have earnt nothing as no future money would role in as the International miners including Australia’s own will look for greener pastures – including moving Billions of dollars out of the Australia market … to a more amenable legislative and tax structure… I wonder if there is any room in Monaco..? and there are plenty of countries out there who would welcome the miners with open arms – the other downside from this as all the employees in those countries everywhere but Australia will not be paying their taxes to Australia…. dumb.

Now all that needs to happen is for the Sword of Damocles to fall on Rudd and Swan and Australia can move back to reality – without the RSPT  …. do that or Labour could spend the next 13 years in the wilderness.

If it doesn’t and they get this legislation through the house, it will not hopefully get through the Senate …  however… Bob Brown also has been known to have his blonde moments.  They won’t use this for a trigger for an early election as they , the Labour party will lose.

If they don’t come back to reality, then Julia Gillard would be hopefully be the first Australian woman Prime Minister… who hopefully can think without testosterone and ego getting in her way… so long as she remembers that she is governing for all of Australia, and not just those of the Labour persuasion… the “Them and Us” attitude is the biggest single reason why this world is not pulling together…. The only down side of the alternative option is that if we have a new government, then perhaps Abbott may be the new Prime Minister… hmmmm…. the man who said in Public not to believe what he said.. sometimes… please define sometimes… can you put up a sign please.

Tags: RSPT+Australia, A+Blonde+moment

RSPT… the reality of the proposal…

I really thought the below from the Managing Director of Xstrata, Mick Davis, who wrote in a letter to London’s Financial Times this morning ( it’s worth quoting at some length):

“Australia’s reputation as a stable regime for foreign investment has already been damaged and investments in Australian resources are at risk of being delayed or canceled. The consequences will be borne by mining communities, prospective employees, superannuation funds, customers, service providers and suppliers, impacting on Australia’s prosperity, particularly in resource-rich remote or rural locations.

“Resources are immovable but diversified mining companies have a choice of countries in which to invest. The government has shown itself willing to breach investors’ trust and damage the economic case on which multi-billion dollar investments were made. In developing countries, we manage this risk by availing ourselves of fiscal stability agreements. Sovereign risk concerns about Australia may once have seemed absurd. Sadly, today they are foremost on every mining company board’s agenda.

“The mooted risk of other countries following suit is largely overdone. No other country is considering imposing such a punitive tax on its mining industry. Australia’s resource taxation will be isolated as the highest in the world at 57 per cent. Indeed, many resource-rich nations regard this tax as an opportunity to gain a larger share of global mining investment – unfortunately for Australia, it is”

This is real, and the above especially the part about the consequence in bold… is how it will impact on us.  – what they don’t mention is of course what it will do the Australia’s reputation and our foreign exchange rate… including our balance of payments, and lets not forget our GDP…

Please – could someone turn the lights on in Canberra, especially in the heads of the idiots who thought this up…run the figures through the modeling again… I could even do this in a spreadsheet (I don’t need a super computer)… its so simple – the government needs to see that they are impacting the whole countries future here… Rudd and Swan ….. what a legacy to leave… Australia as a real banana republic thanks to the political meddling based on totally unrealistic and incorrect assumptions that they have feed into their modelling.

If the Government goes ahead, assuming they can get it through the senate… the miners will say no thanks and they will say it unanimously.  They will change their plans, their focus, and move to another country that welcomes them (surely with the appropriate incentives), and has not taken them for granted and so penalizes them – and they will take their money and go with our benefits, our future and our financial security with them…lets not forget that they will not be paying tax here.

What they, that is Swan and Rudd need to understand is that these are by and large Public companies, real Multi-Nationals who have only one thing to consider besides the Corporate Laws and that is their fiduciary duty to the company and to the shareholders, that is to create shareholder value… paying 57% effect tax does not do that… I really like the comment though that really encapsulates it… The government has shown itself willing to breach investors’ trust and damage the economic case on which multi-billion dollar investments were made ….. if the tax comes in we can say goodbye to the insulated artificial lifestyle we enjoy as a country… and hello at the very least to high unemployment, falling real estate prices especially in the West and in rural / mining economies and a lot of mining associated companies without customers.

Such an event is a no-brainer… a lose-lose for Australia and it is so inevitable – if Australia wants a future with a resources sector as part of the mix, the tax cannot be introduced … if in their ignorance they do, then it will have to go at the first opportunity, probably after the next election.

This is real, and it is a commercial reality…if they companies do leave and seek other pastures, you can be sure the deal to have the companies come back will be a lesson in brinkmanship…something that has not seen since the hard ball days of the “cold war”…with the Australian government saying… ..”how high did you want me to jump, Sir..”  – the only trouble with that is it won’t be Swan and Rudd saying it… because they will be in opposition..

Tags: RSPT+Tax, RSPT+a+mistake, Is+there+a+light+on+in+Canberra+?

Limits to Growth

Why are we here? And how did we get here… I think you will find that is the question that people should be asking now, and will be asking more and more over the coming years.

Let us look at history just for a while, something which we almost never do, there have been Oh so many instances which we can point to where we as a species, did not learn from the past, and there are two culprits for this beside arrogance and all of the platitudes, like “it can’t happen to me”, “Think positive”, “it will all work out” … this position we are in for one reason, the resources of the planet are finite, the call and demand for those resources by the ever increasing population is causing the very scarcity of the resources to finally be brought into focus… the old scarcity principle is well and truly alive, the trouble is this time it really is real.

Why are we surprised with this… since the Club of Rome was formed in 1968 and with their first major publication in 1972 was Limits to Growth – the Club of Rome, seems to have as its charter .. “to act as a global catalyst for change through the identification and analysis of the crucial problems facing humanity and the communication of such problems to the most important public and private decision makers as well as to the general public.”

The original report, examines fives variables which are: world population, industrialization, pollution, food production and resource depletion.

An update to the original report came out after 20 years, and another after 30 years (published in 2004). Another is expected in the short term, the 40 year report.

In 2008 Graham Turner at the Commonwealth Scientific and Industrial Research Organisation (CSIRO) in Australia published a paper called “A Comparison of `The Limits to Growth` with Thirty Years of Reality”. It examined the past thirty years of reality with the predictions made in 1972 and found that changes in industrial production, food production and pollution are all in line with the book’s predictions of economic and societal collapse in the 21st century.

There is huge controversy about some of the claims made in the books, however in essence it sheds light on a simple fact, that resources are finite and are therefore limited. This is so important when we look at non-sustainable energy resources such as Petroleum based products (that currently underlies our entire way of living), rather than using sustainable resources for all our product needs. This of course gets me to another issue, we need an alternative to petroleum products, not to convert basically many food based crops, such as corn etc, as a base for maintaining the status quo and further polluting the atmosphere, we need dramatic research into a sustainable ways to produce hydrogen, as well as any other form of sustainable ways to produce, portable and peak load electrical energy (the somewhat mythical cold fusion comes to mind), some positive early work is already evident – much more emphasis on this work needs to be shown.

If we cannot find a sustainable energy source, what do u think will happen to the civilisation as we know it.. as one of the biggest problems with a global market, is how do you ship products from one point to another when there are no oil products to power the ships, road transport, farming machinery and of course airlines. It seems on the outside looking in , countries should be looking to provide incentives to their local industries to at least make them self sustaining in the essentials of life, food, clean water, and shelter – and being communal animals.. a community.

Any thoughts…?

Commodities and Ethics

Commodities is a fascinating sector to work in – the trading on everything from Oil, Gas, mineral and food commodities is essential for the worlds economies.  Generally it is however the most difficult place to actually do a deal, because of the lack of any effective control, regulations or transparency in its dealing with the other companies in the sector.

My company is acting primarily at the point as a seller mandate for those sellers who have products to sell… well you may think that is wonderful, because no matter who actually buys the product you are selling we get paid, this is right, however there are a few assumptions with that line of reasoning… as with every human endeavour the single most important part of dealing in this sector is due diligence on the supplier, the product, the seller and buyer chains including the mandates and of course the actual buyers.

Now currently I have a deal for 30 million barrels of JP54 (jet fuel) do u think I can find a real buyer who can follow the procedures on this deal ?  Lots of talk, lots of rhetoric, lots of promises, but no actual real buyer… the majority of buyers want POP (Proof of Product) before they will show any POF (Proof of their funds) – unfortunately sellers will not provide anything to a buyer until they have shown Proof of Funds… so we are in this difficult place.. which always comes down to who will blink first…

Sellers have to follow specified procedures, because normally these procedures are forced on them in a direct response to their suppliers, who are generally refineries.

Quite frankly if I hear one more buyer tell me he wants POP, proof of product,,, before providing anything I think I will scream… POP is like the title document to you house, it is the legal proof that the product exists, and can be lifted.  Too many buyers want Proof of Product, when they have no money of their own, because they need the POP to show their bank or backers to release the fund to buy the product so they can on-sell the product usually without owning the product outright for less than a few moments… this is called flipping….

Essentially if I had a understanding bank manager, and a POP document, I could also trade in Oil… using the POP to take to a major buyer… like I say to these continual requests for POP… if I had POP what would I need you for… you are the Oil trader, you are supposed to actually have the capacity to buy the oil to resell at a higher price.

In the last week I have dealt with five so called buyers, not one of them would stick to the sellers procedures, not one of them was capable of buying the product we have for sale…

Unfortunately ethics, honour, transparency, integrity coupled with competence are very rare beasts to find in the commodities game… sadly.  When you find someone who exhibits these attributes hang on to them, because they are definitely the exception not the rule.

More on this soon..

Tags: Commodities, Oil+and+Gas, No+ethics,+or+honour

Oil in Australia, Oil Companies are Altruistic !!

If you believe the Oil companies in Australia – I can only speak of Australia – they are truly altruistic organisations whereby they buy the oil, the ship it here in bulk, import, store it, refine it, then cart it by road, rail and sea to a large number of outlets all for about 1-2 cents per litre profit.

For those people who don’t know what Altruism means (mainly for the oil companies, just in case)  here is the definition of Altruism. 

Now if I was a shareholder in these companies – I would sack the board and all of the C level executives  – who can make a profit and stay in business operating on such a small profit - however as usual this spin has little foundation in fact or reality – thats why it called Market Communication Strategy – or in the old days Public Relations or PR.

Look staying in business and making a healthy profit are normal – its what drives our society – well in the business sense – somehow the Oil companies have got all sensitive about it and feel they have to justify their profit somehow – or some fiction as to reality. Exxon the worlds biggest Publicly trade oil company made a quarterly profit of USD$10 billion on sales of $100 billion – it’s not just Exxon Mobil that’s raking it in. Royal Dutch Shell reported net income up 68% to $9 billion. Earlier, BP (BP) reported a $6.5 billion third-quarter profit and Conoco Phillips (COP) a $3.8 billion profit. Chevron-Texaco (CVX) is expected to post 53% higher earnings of $3.9 billion. See here for verification of Exxon Corporation 2007 full years profit – before the current scarcity speculation – Exxon Mobil Corp. on Friday, Feb. 1, 2008 posted the largest annual profit by a U.S. company, $40.6 billion as the world’s biggest publicly traded oil company benefited from historic crude prices at year’s end. Now from my previous entry here we see that there maybe as much as $30-$60 a barrel is made up of speculation on the price of oil – then suddenly it goes higher as soon as someone even hints or starts talking about scarcity – this truly is the absolutely worst ethics –  even though almost anything goes in business there should be such a thing as ethics – or am I just naive?  Yes David you are naive.

My dear old Dad – God bless him – used to work for the multi-national oil companies in Asia – he told me of an scenario whereby products where shipped from point A-B – say Singapore to Sydney a case in point -  but on the books of the transaction – the products went through every possible country division between the two points – each one making a profit on the way through!  Now could it be possible that a multi-national oil companies might do the same and make only less than 1% profit on the refining of the oil into many kinds of fuel, diesel, aviation jet fuel, and a myriad of petro-chemical products in Australia

The note here is in Australia – however the real money is made outside of Australia – now what if these oil companies selling back and forth between their various country divisions – worldwide and soon hey presto the price of oil on the Singapore markets is said to be $30-$60 more than it should be.

Now I know that this may not only happen to oil – so they are not alone here.

It comes back to scarcity by manipulation – from all accounts we have enough oil at today’s levels – confirmed by no less than the Secretary General of OPEC for at least 30+ years.  So in the meantime until the oil companies can find something else to monopolise – they make hay whilst we live in ignorance and fear.

Then you get the following from the ABC – who are they working for here, are they a PR organisation for the Oil companies ?  Softening us up – again fear, speculation and scarcity are at the forefront.

Now this brings us to another point – the price of oil in Singapore or wherever else it is benchmarked suddenly lifts by – let’s say $5 a barrel – then without taking a breath the price of petrol when it hits the pumps jumps accordingly – my concern here that the terms of trade for most companies is that all shipments bought before that $5 rise – which many may still be on the water – for the next 15-30 days – the profit for these shipments still on the water has now jumped $5 more a barrel. However when the price of crude goes down – it seems to take forever for the oil companies to come into a parity ratio?  Do you think they might be hoping against for the price to go back up and revalued all their shipments en-route again? – You can’t have it both ways guys – mind you the normal terms of trade is that the price should not go up until the next shipment is paid for from the oil fields.

This is not how normal companies buy products – it seems peculiar just to the oil companies – it is brazen scarcity manipulation of the price.

Now as we are seeing at the moment – the price of oil is reducing – perhaps because there is a lot of interest in the speculation and manipulation of the markets by the big players – who is bigger than the oil companies themselves – these oil companies are huge multi-national conglomerates – larger than many countries GDP – with loyalty only to money – no loyalty to anybody or any country – their only loyalty is to maximise return to their shareholders via increasing financial returns – ethics – what do you think?

They are not as bad – just on a grander scale and for a much longer time than the recent “creators” of the toilet paper – that is called Sub-Prime – they have just being doing it longer – over the years they have made and continue to make huge profits – underwriting the scarcity principle – we all live in fear – what if there isn’t any more oil so I can go out to work, to drop the kids off, to go to the mall to go to …..

OK one day there won’t be – but before that time – long before that time – we will have alternatives – cars powered by electricity, Hydrogen fuel cells maybe even solar charge, and various other sources of energy I cannot even conceive of . But once that happens the Oil companies will have lost their scarcity control – it will be transferred before that time probably to the power companies instead – we know that speculation on the price of power was one of the main reasons for the power crisis in California – OH dear – there’s another mess we are about to get ourselves into.

We not even taking into account what Carbon trading will do the price of almost every service and product, imported, exported and made / supplied in Australia – that’s a whole another issue to examine.

Tags: Oil+Australia, Oil+Ethics, Oil+Scarcity

Why the price of Oil is so high

Last week, crude oil hit an all-time high of USD$146, and the sky rocketing cost of fuel is impacting our customers, our employees, the communities we serve, and the economy as a whole. United Airlines, and the majority of other major U.S. airlines, are asking our most loyal customers to join us in pushing for legislation to add more transparency and disclosure in the oil markets. Please see the attached open letter from the leaders of the U.S. airline industry.

I don’t know how much effect this will have as the trading is not done in the USA by and large – but any reduction in the speculative greedy game is good.

This game of greed – where the speculators do nothing, contribute nothing, not add any value to the product – they just make huge amount of money which we the end users us – end up paying for. 

Recently in an interview with OPEC Secretary General – Abdullah al-Badri – taking another swipe at speculators – go to this link – and play the Video  says there is no need to raise production stressing global supply levels are more than adequate

An Open Letter to All Airline Customers (in the USA).

Dear [Ms. or Mr. Citizen]:

Our country is facing a possible sharp economic downturn because of sky rocketing oil and fuel prices, but by pulling together, we can all do something to help now.

For airlines, ultra-expensive fuel means thousands of lost jobs and severe reductions in air service to both large and small communities. To the broader economy, oil prices mean slower activity and widespread economic pain. This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers. Since high oil prices are partly a response to normal market forces, the nation needs to focus on increased energy supplies and conservation. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation.

Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs.

Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with several other modest measures, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated oil market and permit the economy to prosper.

The nation needs to pull together to reform the oil markets and solve this growing problem.

We need your help. Get more information and contact Congress by visiting StopOilSpeculationNow.com

Robert Fornaro Chairman, President and CEO AirTran Airways Bill Ayer Chairman, President and CEO Alaska Airlines, Inc. Gerard J. Arpey Chairman, President and CEO American Airlines, Inc. Lawrence W. Kellner Chairman and CEO Continental Airlines, Inc. Richard Anderson CEO Delta Air Lines, Inc. Mark B. Dunkerley President and CEO Hawaiian Airlines, Inc.

Dave Barger CEO JetBlue Airways Corporation Timothy E. Hoeksema Chairman, President and CEO Midwest Airlines Douglas M. Steenland President and CEO Northwest Airlines, Inc. Gary Kelly Chairman and CEO Southwest Airlines Co. Glenn F. Tilton Chairman, President and CEO United Airlines, Inc. Douglas Parker Chairman and CEO US Airways Group, Inc.

Tags: Price+of+oil

BHP confident of success

The Chief Executive of BHP Marius Kloppers said he was confident the company’s $200 billion takeover of Rio Tinto Ltd would be successful.

The world’s largest mining company last week kicked off the formal regulatory process for the takeover and filed its first paperwork with the European Commission, the European Union’s antitrust regulator.

See here for full article BHP was confident of Rio Tinto success

Tags: BHP+and+Rio