Daily Archives: May 13, 2004

Dan Jenkins on Phil Mickelson’s Masters

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As noted here earlier, Dan Jenkins is American’s finest sportswriter on golf. He has covered an incredible 53 Masters Golf Tournaments in a row, and here is his Golf Digest article on this year’s spectacular tournament that Phil Mickelson won in dramatic fashion. The entire article is a a must read for any golf fan, and here are a few tidbits of Jenkins’ wit and wisdom to give you a flavor for the piece. First, on the questionable ruling that allowed Ernie Els to take a drop out of a horrible lie in some debris:

Now all I have to do is try to avoid hooking a sentence into some cut-and-paste neighborhood that will closely resemble the spot where Ernie Els’ golf ball wound up on Saturday.
I mean that time in the third round when Ernie’s ball came to rest among the roots, twigs, leaves, sticks, rocks and limbs of a place that looked so strange and far away you’d have had a hard time getting a National Geographic photographer to go in there. This was after he’d hit a soaring golf writer’s hook off the 11th tee.
I fear there’s no silly rules official around who can rescue my sentence the way this guy did Ernie’s golf ball. It could have been the free drop that won the Masters. Els got out of the “ice storm debris” with a bogey 5 when a double or a triple was what he deserved.
The rules official who permitted the incomprehensible relief — and I shall withhold his name out of kindness to his family — must pardon me if I say it looked like a lift out of Uganda and onto I-20 near Augusta.

And what about Mickelson, the man who Jenkins had previously criticized for not having what it takes to win one of golf’s major championships?:

It was my 53rd Masters in a row, and I must confess that in all of those years I have never seen anything as thrilling, exciting or dramatic as Phil Mickelson’s victory.
Yeah, that Phil Mickelson. The guy with the enormous promise tainted by a record of failures in majors. He went out in the Big Heat on Sunday, and first he survived it, then he courageously stood up to the Big Easy coming down the stretch and sensationally won with golf shots instead of the mistakes of others, and thereby buried all of his past nightmares and, I hope, all of our bad jokes about him.

Masters Sunday was a feast of brilliant golf shots and clutch putting strokes, to be sure, and it was obviously the confirmation of Mickelson, but it needs to be said that the public couldn’t have lost no matter who won, Phil or Ernie. Which is why it was so memorable, so historic.
It came down to a battle between the other two best players in the world today. The battle of the anti-Tigers.

Jenkins goes on to put Mickelson’s performance on the back nine of Augusta National in the context of other great final day performances in past Masters Tournaments, and then points out what he likes about Mickelson in comparison to another top golfer:

To me, one of the nicest things about Mickelson’s victory is that he’s a guy who’s loyal, unlike another star we know. Phil’s caddie, Bones Mackay, and business manager, Steve Loy, go back more than a dozen years.
Other nice things about Phil are that he’s accessible, unlike another star we know, plus he’s talkative, he’s interested in other sports, and despite his fame and wealth, which were already in evidence, he was hard at work to trim his physique and improve his game long before he arrived in Augusta a week early, Hogan style.
Incidentally, Phil didn’t ask Mark O’Meara how to do any of that.

Then, Jenkins provides his theory on what might be going wrong with Tiger Woods’ game:

Nicklaus is the exception to the “window theory” on putts, having been the only guy to make them for 20 years. Every great the game has known, except for Jack, has enjoyed a period, a window, of making darn near every big putt for eight, nine, 10 years — then the door slams.
Tiger may have hit that wall. Forget the “swing plane.” Surely every good golfer realizes that when you start missing putts, it eats away at the rest of your game like a poison. Tiger was tied for 35th in putting at Augusta.
The only thing wrong with Tiger is, he’s gotten so bogged down in mechanics that he’s lost his intuition. It’ll be interesting to see if Tiger sticks with what he’s doing, whatever that is, or goes back and rediscovers what he did to become great.

Finally, in his inimitable style, Jenkins asks and answers the age-old question:

Meanwhile, here’s another question: Now that Phil Mickelson has done it, who’s the best current American player who has never won a major?
I look around the dismal landscape and see only one answer.
Michelle Wie.

Rim shot!

What is Richard Rainwater up to?

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One of the more interesting Texas billionaires is Ft. Worth’s Richard Rainwater. He cut his teeth in the big-time financial world by overseeing the tremendous increase in value of the Bass Brothers’ from 1970 through the mid-1980’s, including what turned out to be a very lucrative bet on the Disney Co. during that period. Rainwater then struck out on his own investing heavily in energy, real estate investment trusts, and health care and, as he put it several years ago, “I’m just a retired guy who made a couple billion by being in the right place at the right time.”
Maybe so, but Rainwater’s contrarian investment strategy has always been interesting to follow. Today, this Wall Street Journal ($) article reports on Rainwater’s latest investment — buying a 7.5% stake in battered telecommunications giant Global Crossing Ltd. in recent weeks as its share price plunged in response to new accounting troubles and possible delisting from Nasdaq.
News of Mr. Rainwater’s investment in Global Crossing along sent the company’s shares up $1.30 to $10.70 yesterday afternoon. The stock had lost almost 40% of its value in less than the past month after management announced that it might need to restate financial results for the past two years and that Nasdaq may delist the company.
Global Crossing was one the biggest stars of the telecom boom and its founders were big contributors to President Clinton’s second campaign. But the company slid into chapter 11 in 2002 amid the market downturn and questions about its accounting. It emerged from Chapter 11 in December 2003 with a cleaned up balance sheet, only to announce in late April that poor internal controls had led management to underestimate access costs by between $50 to &80 million for gaining access to other telecom networks. That led the company’s auditor — Grant Thornton LLP — to withdraw its audits and left the company in violation of the conditions for listing on Nasdaq. Inasmuch as such errors (particularly just after getting out of bankruptcy) do not exactly generate confidence in management, Global Crossing’s ability to obtain new financing is subject to serious question in the investor marketplace.
Nevertheless, that’s when Rainwater went to work, according to the WSJ article:

As some investors fled the stock, Mr. Rainwater turned a relatively modest investment into a large stake, according to filings with the Securities and Exchange Commission. Mexican magnate Carlos Slim Helu, already a major shareholder, added to his stake and now owns 9.9% of the company. Mr. Rainwater declined to comment on his purchases. The company’s other major stakeholder, Singapore Technologies Telemedia Pte. Ltd., has a 61.5% stake.

Mr. Rainwater owns three million shares, according to the filings. His holdings represent 13.6% of the company’s publicly traded shares. Between March 17 and May 11, Mr. Rainwater spent $24.4 million on Global Crossing stock, with the purchases accelerating in the past two weeks as the share price fell into the single digits.

The telecommunications industry has been one of the most perilous investments over the past decade. For a variety of reasons, the huge run up in value in most telecommunications companies during the late 1990’s has been followed by a plunge in value that appeared to have no bottom. Rainwater’s bet is the first positive sign for a battered industry in a very long time.

The myth of declining energy reserves

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In the wake of this news regarding oil prices, Morris A. Adelman is a professor emeritus of economics at Massachutsetts Institute of Techonology and long has been one of America’s leading energy economists. In this article, Professor Adelman eviscerates the myth that humanity?s need for oil cannot be met and that a gap will soon emerge between demand and supply. The entire article is a must read during the current season of political demagoguery, and here are a few snippets to pique your interest:

There is not, and never has been, an oil crisis or gap. Oil reserves are not dwindling. The Middle East does not have and has never had any ?oil weapon.? How fast Russian oil output grows is of minor but real interest. How much goes to the United States or Europe or Japan ? or anywhere else, for that matter ? is of no interest because it has no effect on prices we pay nor on the security of supply.

The doomsday predictions have all proved false. In 2003, world oil production was 4,400 times greater than it was in Newberry?s day [Newberry, a geologist, predicted in 1875 that the world was running out of oil], but the price per unit was probably lower. Oil reserves and production even outside the Middle East are greater today than they were when Akins claimed the wolf was here.
World output of oil is up a quarter since [Jimmy] Carter?s ?drying up? pronouncement, but Middle East exports peaked in 1976?77. Despite all those facts, the predictions of doom keep on coming.

If the cost of finding and developing new reserves were increasing, the value per barrel of already-developed reserves would rise with it. Over the period 1982?2002, we found no sign of that. Think of it this way: Anyone could make a bet on rising inground values ? borrow money to buy and hold a barrel of oil for later sale. With ultimate reserves decreasing every year, the value of oil still in the ground should grow yearly. The investor?s gain on holding the oil should be at least enough to offset the borrowing cost plus risk. In fact, we find that holding the oil would draw a negative return even before allowing for risk. To sum up: There is no indication that non-opec oil is getting more expensive to find and develop. Statements about nonopec nations? ?dwindling reserves? are meaningless or wrong.

U.S. oil policies are based on fantasies not facts: gaps, shortages, and surpluses. Those ideas are at the core of the Carter legislation, and of the current Energy Bill. The Carter White House also believed what the current Bush White House believes ? that, in the face of all evidence, they are getting binding assurance of supply by opec, or by Saudi Arabia. That myth is part of the larger myth that the world is running out of oil.

Professor Adelman’s piece dovetails nicely with this Fred Singer article on the ill-conceived Nixon and Carter Administrations’ energy-related policies that were implemented in response to perceived shortages of oil.
Hat tip to Professor Kling over a EconLog for the link to Professor Adelman’s timely article.

CFTC investigating natural gas storage numbers

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This Chronicle article reports that the Commodity Futures Trading Commission has subpoenaed information from several energy companies — including Duke Energy Corp., El Paso Corp., CenterPoint Energy Inc. and Oneok Inc. — to determine more information about how storage data is compiled and reported to the Energy Department’s statistical arm, the Energy Information Administration. Dominion Resources Inc., the nation’s largest storage operator with about 28% of the U.S. storage capacity, says it is voluntarily providing information even though it has not received a subpoena.
Energy company investors follow EIA’s weekly numbers for trends on whether supplies of natural gas are plentiful or tight. The subpoenas come on the heels of a big increase in natural-gas prices last fall. Starting last October, natural-gas prices rose about 50% to $7.22 per million BTU’s in mid-December, then dropped to $6.19 per million BTUs at the beginning of 2004. Natural gas prices tend to track crude-oil prices, which are at 13-year highs. The benchmark natural-gas futures price rose 1.9 cents yesterday to settle at $6.40 per million BTUs on the New York Mercantile Exchange.
Storage operators are required to report how much working gas (i.e., gas available for withdrawal) they have injected into underground aquifers, salt caverns and depleted wells. To meet seasonal swings in demand, operators often purchase gas during the spring and summer, and then put it back into pipelines in the fall and winter. Typically, the storage operators collect fees for storing gas, and many of them also are natural-gas producers and marketers who benefit from higher prices.
The latest investigation follows the disclosure in recent years that several energy companies reported false trading volumes and prices to industry trade publications. As a result of that probe, 13 companies paid a combined $180 million to settle charges of false reporting and attempted price manipulation. For example, Enron Corp. has agreed to pay a $35 million fine, which is pending approval from Enron’s bankruptcy judge.

Stros lose Miller and to Fish

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The Stros’ string of good luck ended on Wednesday evening as they not only lost to the Fish 5-2, but also may have lost Wade Miller. Miller battled gamely through five and two thirds innings (4 hits, 3 walks, 3 runs, 5 K’s), then left with soreness in the same area of his neck where he had a pinched nerve during the 2002 season that put him on the shelf for two months. He will be MRI’ed today.
Dontrelle Willis pitched a rare Juice Box complete game for the Marlins, as this game really came down to a key play in the bottom of the sixth. With two out, the Stros had closed to 3-2 and had runners at second and third. Ensberg blistered a ground ball up the middle that looked like it would plate the two runs and give the ‘Stros the lead, but Willis gloved it with a “look what I found” expression and threw Ensberg out. That was all she wrote as Willis proceeded to put the ‘Stros down in order in the last three innings to secure his fourth win.
The rubber game of the series tonight looks like a mismatch as the ‘Stros inconsistent Tim Redding goes up against the Marlins’ sturdy Carl Pavano. The Mets come in to the Juice Box on Friday for a weekend series.