More on oil prices

oil rig.jpgThis Angry Bear post provides a good overview of the probable impact of current oil prices on the American economy, which segues nicely to this recent Wall Street Journal ($) interview with ExxonMobil CEO Lee Raymond, in which he observes the following:

WSJ: What do you think of ChevronTexaco’s decision to acquire Unocal?
Mr. Raymond: I can never remember an industry consolidating at high prices. But I can remember an industry consolidating at low prices.
WSJ: Some people think prices will keep going up.
Mr. Raymond: Maybe. I’ll bet they’ll be lower at some point.
Let me go back to the last time we went through something like this, which started when the shah of Iran was around. [The shah went into exile in 1979.]
A lot of people don’t remember, but we went through a period of relatively high oil prices, which by today’s standard would be very high oil prices, that lasted for almost five years. It was at that time that we got into our first stock-buyback program.
As today, we had very strong cash flows. There were a lot of people that were talking about buying other companies. Although we didn’t say it directly at that time, we had a view that the price structure could not last — that it was fundamentally unstable, and that it was just a matter of time. And so we concluded that the cheapest oil we could buy was our own. But because of the stock-buyback program, we were roundly criticized on Wall Street. There were no opportunities. We were liquidating the company. All that kind of stuff.
But the facts are that, behind the scenes — we were not going to say it publicly, obviously — we just felt that the price structure couldn’t persist. And, come along December of 1985, it just collapsed. Went from $28 to $10 in two weeks. So when people ask today, what are you going to do with the money, my answer is: We’re not going to do anything stupid. We’re going to manage it like we’ve managed everything else.
WSJ: What is Exxon planning to do with all its cash?
Mr. Raymond: First of all, we’ll sort through it. And secondly, why in the world would we ever tell anybody in advance what we were going to do with it anyway?

The fluctuation of oil prices is a common topic on this blog, and prior posts on the topic can be reviewed here.

Paul Johnson on JP2

johnpaui.jpgBritish historian Paul Johnson (author of “Modern Times,” “History of the Jews,” “History of Christianity,” “A History of the American People,” and his more recent “Art, A New History,” among others) is one of my favorites. In Modern Times, one of his dominant themes is the development in the 20th century of huge governments and their exponential capacity to do evil, particularly to human life.
In this insightful Opinion Journal op-ed on Pope John Paul II, Mr. Johnson notes that the world has lost one of its staunchest supporters of the sanctity of human life:
pauljohnsonhistorian.jpg

This great pontiff was essentially a defender, promoter, protector and enhancer of life: life in all its forms, as God created them, but especially human life.
He sought to limit, almost to vanishing point, the occasions on which the state, let alone individuals, might legitimately extinguish or frustrate life. He had spent his manhood largely under the tyranny of the two vilest anti-life systems the world had ever seen: Nazism and Communism, together responsible for the unnatural deaths of over 120 million people in Europe and Asia. He had seen at close quarters the appalling consequences which inexorably follow when authority is directed by philosophy contemptuous of life.

John Paul was, perhaps, most vehement in his condemnation of abortion, especially when practiced under the sanction of law and on a huge scientific scale, in the clinics specially created to smother the spark of life before birth, which he compared to the death camps erected by Nazi and Soviet mass murderers. It was a sharp sword in his heart which filled him with righteous indignation that, after the world had been scourged for more than 50 years by the mass killings of totalitarianism, anti-life politicians, above all in the democracies, should have set up a holocaust of the unborn which has already–as he often asserted with awe and anger–ended the existence of more tiny human creatures than all the efforts of Hitler, Stalin and Mao combined.
But it should not be thought that John Paul’s defense of life was conducted on principles seen as conservative. He was an absolute and implacable opponent of capital punishment, an issue on which he parted sorrowfully from many of his warmest admirers. He was most reluctant to admit the admissibility of war in almost any circumstances. He was wary of giving any kind of approval to President Bush’s active war on terror, and plainly opposed the invasion of Iraq. It was his view that a righteous ruler, however tempted by the urge to end wicked regimes, should not set in motion events which would soon move out of control and perhaps cause evils far worse than those it was designed to end.
Not that the pope condoned terrorism in any form. He was never among those clergy in the West who mitigated their disapproval by pointing to legitimate grievances.
Indeed it would be hard to imagine a greater contrast between Pope John Paul, who spent his entire existence searching perpetually to prolong and preserve life, and that evil caricature of a spiritual leader Osama bin Laden, who from the moment he awakes, throughout the day, until he falls into a troubled sleep, directs his agents to end as many lives as possible, including their own (but never his). In their cataclysmic duality, these two men came as close as ever human beings do to embodying the principles of Good and Evil.

Read the entire piece.

You don’t say?

eliot_spitzer.jpgEliot Spitzer, the New York AG (i.e., “Aspiring Governor”) made the Sunday talk show circuit yesterday in regard to his campaign against corporate wrongdoing generally and his ongoing investigation of transactions between AIG and a unit of Berkshire Hathaway (earlier posts here) specifically.
The investigation — which has not yet resulted in a single indictment, but has battered AIG’s stock and credit rating — involves scrutinizing complicated financial transactions that were approved by scores of transaction lawyers, accountants, and consultants for both AIG and Berkshire. Indeed, the MSM reporting on Mr. Spitzer’s campaign have not even attempted to obtain an explanation of the transactions from the persons involved in structuring the transactions. Nevertheless, the Lord of Regulation said yesterday that he had strong evidence that former AIG chairman and CEO Maurice “Hank” Greenberg committed fraud in initiating the deal between A.I.G. and General Re, the subsidiary of Berkshire. Mr. Spitzer’s following comments will give you a flavor for the entire interview:

These are very serious offenses, over a billion dollars of accounting frauds that A.I.G. has already acknowledged. . .
That company was a black box, run with an iron fist by a C.E.O. who did not tell the public the truth. That is the problem.

Today, this NY Times article today reports that Mr. Greenberg is probably going to refuse to testify based on his Fifth Amendment privilege at a deposition that Mr. Spitzer has scheduled for Tuesday.
After Mr. Spitzer’s public comments of yesterday, how could Mr. Greenberg responsibly do anything else?
By the way, it’s nice to see that someone else is noting that Mr. Spitzer is manipulating prejudices in an unhealthy manner.

Stros 2005 Review: Stros sweep Reds and head out on the road

Roy O1.jpgThe Stros rode strong pitching from the Rocket, Brandon Backe, Roy O. and Brad Lidge over the weekend in sweeping the Reds, 3-2, 4-3, and 5-2.
The Stros finish their first home stand of the season at 4-1, although the five runs that they scored in the Sunday win over the Reds was the most that the club has scored in any of its first five games of the season. At least Bags hit a couple of yaks over the weekend, along with taters from Bidg, Ensberg, and Lane. Rookie Chris Burke drew his first start of the season in the Sunday game (in left field) and acquitted himself well with three hits.
The Stros now go on the road for a week with an odd Monday, Wednesday, and Thursday series in New York against the 1-5 Mets, who just won their first game of the season on Sunday. Ex-Stro Beltran has not yet warmed up (.273 Avg./.304 OBP/.455 SLG.), so let’s hope he stays in the doldrums for awhile longer. After the Mets series, the Stros visit Cincinnati for another series next weekend against the Reds (3-3), and then return for a quick four game homestand on Monday April 18th with two games each against the Braves (4-2) and the Brewers (3-2) before heading back out on the road against the Cardinals (2-3) and then the Pirates (2-4).