The OPEC Game: Forced non obsolescence

Supply and demand are not the only economics forces at work.  The other market mover is disruptive technology and obsolescence. When a new technology comes along to make another technology moot, then it quickly exploits that weakness and takes over when it's allowed to do so.  For example, where can you get typewriter ribbons anymore?  And where did floppy disks go? Everyone has many USB disk drives. I can't find a computer that uses floppy drives.

In W. Brian Arthur's book The Nature of Technology he explains that the economy is never quite at stasis, it is always changing on the time frame of decades not months like glacial movement but still in motion.  And the genesis of new technologies is born out of the arrangements set up today.

Now, back to OPEC.  OPEC has a valuable commodity they can sell so long as competing technologies cannot make enough money to remain solvent - in business long enough - to obsolete oil for good.

So OPEC plays two long games at the same time.  It tries to maximize the value when it can from every barrel of oil. It plays the production game to raise or lower oil value month over month. It keeps member countries happy and fills national coffers.

But every so often it plays the obsolescence game as well.  It increases production in the face of falling demand. Or it holds production steady in spite of falling prices to make oil so cheap it's the only game in town.  With most of the world reliant on oil products, that makes it harder for people to adopt alternative energy means because it is cost-prohibitive to switch.  That captures another group of people to their customer base.

Vladimir Putin: what not to do

Russia desperate for gas pipeline to Europe

Ok so Vladimir Putin annexed part of Ukraine. And in exchange suffered sanctions, isolation, the Saudis dumping oil to bankrupt both fracking US shale drillers and expensive corrupt oil production like Russia. And a drop in oil prices to levels that might bankrupt Russia.  Does this sound like a good deal for Russians?

So you can't have it both ways, Vladimir.  You can't upset them and expect them to sit quiet. You learned nothing from George Bush II's foray into unilateral action. UK doesn't count they've been US lapdogs since the 1970's. He acted without seeing the long game and ruined his reputation, ruined his countries standing, plunged the economy and so on. I thought Russians were smarter than Americans? They don't have to beat you they control your state through your economy. You are a fuel export country. You depend on reliable treaties. You depend on prompt payment. You've given them an excuse to punish your country. Better for them. Worse for your people.

When you piss off your customers, you're going to pay to keep them.  And this depression might last longer than your hold on the Crimea. So acting alone against the West will continue to cost your people. If you were smart, you'd turn 180 degrees and be the best friend Europe ever had. Wedge between them and the Americans.  

The Fed's Recovery Plan: Lie and hope for the best

People like Max Keiser have railed for years about the atrophied and dishonest nature of the US stock market/ US banks / US regulators relationships and the weak economic outlook.

Here is the reality; the economy was damaged by the US banks' greed.   The US government bailed out companies that deserved to fail (how would the economy look if home owners held mortgages that were worth 50% to the bankruptcy creditors - that seems like a logical  and fair outcome - the debtors win and the bankers lose).  The US regulators are OK with fining US banks and to keep the crimes under prosecuted.  The last fact, the US government shot it's bolt of free money bailing out the companies they hoped would keep jobs. Of course to do that the corporate sociopaths demanded their own livelihood was part of the bargain.

So my postulate is this: the US commercial system will continue to downplay the corruption, continue to lie to the people about what went on, and to hope that the continued wish becomes reality as people make the improvements to the economy themselves.  No bankers will go to jail, no money will be refunded to lost pension funds. The US Fed plans to keep lying about the number of US dollars in circulation and basically "will the recovery" like a necromancer might raise a body from the dead. 

Travel Process Efficiency?

Why institute a travel approval process that saves $10 on a hotel room but through the delay in approving same the cost of the airfare goes up $100?

How can that be claimed to be efficient?

The reality is that when the estimate is made, the airline cost is ignored. Only the accountants enter the data, so that removes the honest assessment of what went on.  No one puts the two numbers together.

Oil Transport Reality

Oil Transport by Rail : Estimated loss 42 people and  $200 million. 

Oil Transport by Pipeline : Estimated loss $44 million.

Pipeline Strategy and Politics

It's sheer madness to continue to push for pipelines across any territory.  Here are the facts:

Any pipeline requires onerous regulatory review, which often ignores the facts, and review at many levels.  All it takes is one jurisdiction to object to the placement en route to block the project for almost indefinite periods.  Certainly longer than any company can afford to wait.  As the resource loses value, the business justification evaporates as well. Anytime the people get upset, the politicians fear for their jobs and delay the business.  Any politically motivated mayor, reeve, or alderman can manipulate the democratic process for personal gain. Obama, the Democrats, Boehner, the Republicans, Harper, Prentice, and Trudeau and Mulcair are all benefiting from energizing people to get active in the political process, supporting them, which has little to do with the approval of any pipeline.  Pipelines are approved by bureaucrats.

The environmental lobby is powered by emotions, not facts. The environmental agenda manipulates people to ignore the relative safety and risks of options.  It's far easier to manipulate sentiment.  How does one gallon of oil sands refined oil emit more than a gallon of Saudi Arabian oil?  It does because Neil Young says so. The environmental lobby is the same as the politicians - they want people to support them on an issue people agree with.  We still need energy at the end of the day, what alternative do they offer?

No one remembers the Three Mile Island accident, they remember that nuclear power is dangerous because Greenpeace told everyone it is.  Why do we need to burn oil as the majority fuel source in North America?  Because people blocked the construction of nuclear power plants because Greenpeace told them so.  So, now what? We would have been better off with a nuclear power plants so we didn't need as much crude.

Every jurisdiction demands their cut, their bribe, from the proceeds of the pipeline business.  One could argue that insurance towards reimbursement for loss from pipeline spills justifies this demand.  But the reality is if a spill happens people will sue the company and expect them to pay it off any case.  All those payments are a tax on oil that doesn't belong to them.  A tax that benefits environmentalists as much as other citizens.

What Alberta should do is build a refinery and save the jobs for the local Albertans. Then the problem of shipping the refined oil becomes everyone else's problem. That's the way the public wants it, and then no other jurisdiction can benefit from it.

What is stream of conscious creation?

I use a very simple creation method to get ideas out: continue creating until your thought process stalls. I start by some simple meditation.  Normally just breathing. Not Om meditation. I do not aim my mind at a goal. I let it wander which is against meditation where you are focussing on the centre to consider your inner self. Not bad for a white guy?

Start with one idea and let it evolve and come out into some form as your main goal. Attaining that level of control on one thought is key.

Never delete your thinking nor criticize it while your brain is trying to get the ideas out. Most people lose creating by starting to edit before they have fully formed ideas. Don't self edit. Don't criticize.
Last edit comes later once you've distracted yourself and forgotten your thought process.

It really helps thinking like a Buddhist. You realize that the ideas don't exist anymore than you do so you don't feel ownership. Just stewardship. It's ok if they don't make sense. That takes time.

Accept your ideas as a starting point. Not a final goal. Once you attain idea maturity then put it on paper and THEN edit it. Simple is better. Concise and packed with meaning is better. Most insightful thoughts are deep but centred. Not bland and obvious. There is a design saying, a design is complete when you remove all that need not be there.

Most blog posts are stream of consciousness. That's why a word or two is wrong and some time later I've gone back to do a final pass. But look at the output. Apart from a few words or clarifications they are all stand-alone ideas done to fruition. Takes me less than 5 minutes. I can write off one before I board a plane. I do them waiting in line. My brain is constantly meandering. I have learned a unique valuable skill to realize I can form it and then release it.

Now my other secret is I've written four books. 300+ pages each in Strunk & White so about 600 pages each in normal writing. That is how I learned short sharp writing.

If you want to learn how start by meditating and ask for some advice. I'm here as long as my brain is. 

Your boss is the biggest stressor in the workplace

There is mounting evidence, that most people know with anecdotal evidence, that your boss is the beginning of your stress at work.

While people may have thought something similar to today's Dilbert. There is evidence to back that up:

Boss Competence and Worker Well - being

The Link Between Employee Satisfaction and Firm Value, With Implications for Corporate Social Responsibility

It is a serious issue for companies in the future when the success depends on the #Bosses.

Economic War: Western-Style

Russia's Central Bank Steps In to Steady Ruble


Putin may be a pre-Glasnost Russian oligarch, but he was raised in the world of intrigue and not the world of finance.

Perhaps he miscalculated while he was busy preparing military plans to defend his temporal sphere of influence?  His economy's collapse was entirely predictable.  What he did not learn in KGB spy school is that capitalist  economies are interrelated. Interdependent.  And dominatable by the biggest bully on the block.

So once you plugged into world finances you are subject to risk of economic warfare.  And the US can swamp anyone, even allies, when and if it chooses.  Just ask Canada about all the trade sanctions against the US for unfair / protectionist practices they simply ignore - wood, salmon, - and keep going.   


http://gwynnedyer.com/2014/oil-blind-sided-by-technology/

Sanctions were not the biggest weapons in the American arsenal.  Oil independence means their demand can be used as a weapon against corrupt governments as Gwynne Dyer explains above.  They can turn production up and drop the ruble to nothing.

And it gets worse if you are Russia.  What people forget is that the US has a strategic ban on oil exports.  They are artificially lowering supply, not just lowering their purchase of oil, due to the 40 year embargo on oil export thanks to OPEC and the 1978 crisis.  http://www.businessweek.com/articles/2014-11-05/bhp-billiton-starts-exporting-u-dot-s-dot-oil

All that needs to happen to make the Russian economy - in these worsening times - drop to zero is to allow US companies to dump oil on the market. 

So Putin can celebrate liberating a few hectares of land.  Maybe that will comfort the Russian people unemployed in bread lines?

Alternate strategies are just as viable as military strategies

Where would America be now, if instead of invading Iraq in 2003 for a second time they had invested $1 trillion in solar panels and wind farms? 

Here is my conjecture:

Oil would be $40 a barrel and the treasure and more importantly the lives of both soldiers and civilians would remain.  The Middle East would be full of poor dictators unable to buy weapons to keep their people down. The rotted governments would have collapsed from the inside. Real change might have taken root and without the rallying cry of America the Crusader perhaps the moderates would have won.

There are many ways to win. Not all of them are obvious.

Better management is an illusion

http://www.dilbert.com/

Making someone work on multiple projects doesn't give you multiple person years of effort, it makes people more likely to exploit the confusion.

Turkey, the nation, is lead by morons

Turkey is a confusing ally.  On the one hand, they don't like the Assad regime next door.  They also don't like the Kurdish parties inside Turkey and Northern Iraq and Syria.

On the other hand, they refuse to help fight Islamic State (Caliphate). They refuse to let US fly from Turkish airports.  They refuse to let Kurds move in to reinforce their brothers fighting the Caliphate. They consider the Kurds and Islamic state equal enemies.

They have forgotten a simple maxim: the enemy of my enemy is my friend.

Why wouldn't they allow Kurds to go fight in Syria? The more that empty out into Syria the less are left in Turkey.  The weaker Islamic State is then the better for Turkey.

No one says they have to let Kurdish fighters back later on.  They could solve two problems at once. 

The fact that they can't see where their true interest lies, leads me to think they aren't lead very well. 

One thing a manager can't turn down.

A manager can follow all sorts of madness in the name of better management. They adopt all sorts of fads in the quest to remain relevant: Right sizing. Divestment. Agile programming. Tsun Tzu for business decisions. And so on.

There is one condition that survives all this needless poking and prodding. Success.

If you are successful you make your manager look good. I've said it before you aren't hired to do a job you are hired to make your boss look good. If you adopt that philosophy it improves your chances because every decision is win/win. Work done the right way pays off twice.

Succeeding makes your boss look good.

If he interferes with how you got to successful he risks ruining continued success. By actively changing it, his fingerprints are all over the failure. He will be accountable for wrecking the success you have given him.

That's worse than laissez-faire. Letting it be.

So it's simple. If you want to be left alone to work then be successful. You leave your manager no choice but maintain the status quo. 

When an Army becomes a bureaucracy, the results are predictable:

This is a thoughtful and frank discussion of what is wrong with the US military.


An Officer Corps That Can’t Score

Any Army officer worth his salt should accept reality.  If an officer becomes political - all about themselves - rather than tactical then the system is doomed.



The greatest indictment is that the "Up or out" professional progression breeds the wrong kind of behavior from leaders.  Military operations are a costly and difficult skill to master, why would you want the successful ones to leave what they know best?

What has happened is the reliance on technology to make up for shortfalls in personal training. When your weapons are getting better then how can you see your officer corps is not as dedicated to the profession?

The root cause is the same for all the ills: it should not be shocking to anyone, that when politicians meddle with the military and the military doesn't stand up for itself.  It becomes a bureaucracy.

Post-war Ukraine will look like post-war Yugoslavia

Since neither NATO nor Russia want a fight to the death over Ukraine, this crisis won't go nuclear and therefore the only other option is an uneasy peace.

I predict that the #Ukraine will look like post-war Yugoslavia with a divided ethnic separation.  The peace deal won't go far enough until they agree to weapons cantonment sites, disarmament of militias, and an UNPROFOR-style peace observation force. 

One side will drift into the Russia sphere and the other into the Western sphere of influence. 

If I was an ethnic Russian war criminal, I wouldn't feel safe in post-war Russian-side Ukraine. Look what happened to Ratko Mladić, the commander of the army.

Bartering: Pots for Soil

I found a great way to save tree pots that you get from the garden stores from the recycling bin.

I collect my pots from all the bushes and trees from the season, at least 10 or more, and I take them to a local business garden shop.  I trade a set of pots for a few bags of potting soil.  I don't ask for much and I am consistent.

I reason it like this: a couple of bags of soil can be written off each year and also if this business has a greenhouse he or she can raise a few trees in those pots and sell them for a couple of bucks to tens of dollars that will more than make up for a couple of bags of soil.

Helps the economy, saves recycling. 

The Manager Rule

There is a constant push for improving efficiency in organizations to meet the needs of stakeholders and shareholders. When hierarchies are looking for ways to reduce cost, then managers are most expensive and the least useful components. In theory, a manager handles all operations within a unit and expending resources to manage the performance of that unit is a necessary.  In reality, managers spend more time making sure they are needed in the operations they oversee than doing the forethought, planning, and managing that are expected by the job description.


Here is a simple rule to decide whether or not you need a manager:

If the manager can't make decisions about the purpose, the people, or the resources of the suborganization he or she leads then get rid of the manager. Use a team lead instead. 

A team leader directs work day to day - they lead the team. Use performance bonuses to motivate the team leader to motivate performance. Use an administrator to account for the numbers day to day, just as before. Then a higher manager is responsible for many sub-organizations managed by team leads.  A manager still handles the extra effort but at a higher level and distributed. That is how you handle improving efficiency.

Leaders can run the work which is what you need. But they aren't responsible for those bigger decisions they need to go higher for a decision. Which is a win-win, you save on management and don't waste effort of a manager for day-to-day simple stuff.  Every big decision is still held by a higher manager, that is where accountability rests. 

The final change is the adopt a Leader / Manager contract that explains exactly the responsibilities of each. Depending on the specifics of the duties, the leader can set up the work, the team, and so on but needs approval by the manager. The manager oversees all administrative but cannot interfere with daily operations.  If a problem exists that stops production then the manager is responsible for resolving the issue. The team lead can halt production until those issues are settled.

Crimea Stolen for The Black Sea Fleet: The Great Putin Swindle

Russian leadership must assume all people are typical, unenlightened and unremarkable.  But we in the West can figure out the subtleties of our politicians so it should come as no surprise when our democratic talents are applied to their obvious tactics. Let me explain the Ukrainian invasion by Russia. It's all about retaking the Black Sea Fleet for Russian military interests, pure and simple.

There is a lot of information on the Black Sea Fleet problems between Russia and Ukraine here. The bottom line is the agreement and the politics of the Russian Black Sea Fleet located at Sevastopol Ukraine has been an irritant for Russian leadership for years with constant complaints by the Ukraine regarding unapproved access, rights, permissions etc. The bottom line is - more than national pride - a lot of effort goes into arguing with the Ukraine. This port is STRATEGIC not economic nor NATIONALISTIC. Russian didn't care who owned it so long as they could lease it / use it. To reproduce the naval capability of the Sevastopol naval base would take billions of dollars. I'm just guessing it would take 50 billion to replace it. Not the ships, they would sail to the new base,  just the port capability, the housing, infrastructure etc. That's a lot of cash no one has lying around. So this is what the invasion is all about.

Remember Putin represents a group of Russian economic leaders, he is their military operative, and if he cared about nationalistic ideals he would stay at home and help the poor in Moscow, that would probably be a better use of the money funding an invasion.

Let me explain my point with a brief timeline.

On 19 February 1954, Nikita Kruschev gives the Crimea to the Ukrainian Soviet State Republic (SSR).  

2002 - Russia's last attempt to solve the Black Sea Fleet problem was using  Yanukovich; first as the agreeable Prime Minister and then ulitmately as the Ukrainian President. That solves their problem for them because they've "got a guy on the inside".


February 2010 - Yanukovich becomes Ukranian president.

April 2010 - Not 2 months into office as President, Yanukovich and Russia sign a deal ensuring the longer term lease of the Black Sea Fleet port. Russian gets a longer lease on the port in exchange for cheaper energy to Ukraine. 

February 2010 - February 2014 - Yanukovich allegedly bilks riches from Ukraine and the country spirals towards collapse. This is the economic benefit to Ukraine that comes with the lease for the Black Sea Fleet port, but where does it go? Europe-leaning populace in Ukraine inspires a revolution, Yanukovich uses deadly force on protesters and then flees the country for Russia.

March 2, 2014 - Losing control in Ukraine and potentially losing that port, Russia mobilizes and takes over key points in the Crimea. What key points? Protecting the people? To restore law and order? To defend ethnic Russians? Does Russia station troops in town squares to do all that? No. Russia surrounds airfields and military bases that would be used to take back the Black Sea Fleet port. If this invasion was about protecting citizens then the forces would be deployed against the western edge of Crimea to protect them from Western Ukraine. That's not where they are.

It is so obvious what this is about, that it really looks like theft. If Putin had made any other moves it would look genuinely humanitarian. Instead he looks like the highway bandit he is. He's not saving anyone. Nor is he fooling anyone.

So again, Russia makes a deal to get the port, Russia gives Ukraine money. Russian puppet steals the money back. Russia takes the port. Russia keeps a port worth say $50 billion for the cost of some international rebuke. This is the Great Putin Swindle.

He made a deal with Ukraine knowing he could renege on it and get his money back, either by loans to a failing state or by military force when they collapsed. This is a swindle, he never intended to pay for it, just bide time until he could get it back.

If I was a Russian Ukrainian (ethnic Russian in Ukraine) I would want to know how safe I was with a government capable of doing this? If I was a Russian Ukrainian I think I would get more from being a Ukrainian and having Russia spend lavishly to get the port back.