Monday Afternoon Links

• Economic sectors reach their peak salience when the industry is either at peak valuation or just starting to decline, and they don't get thought of much after that. (At one time, the most-watched episode of television in history was Who Shot J.R.?, a soap opera episode about the murder of an oil baron. In the 2020s, oil just isn't synonymous with money, and for a similar punch your show would have to be about someone in tech, or just maybe finance.)  [Byrne Hobart]
  
• Their explanation for our doldrums is simple: we’re more risk averse, and we don’t care as much about the future. Risk aversion means stagnation, because any attempt to make things better involves risk: it could also make things worse, or it could fail and turn out to be a waste of time and money. Trying to invent a crazy new technology is risky, going into consulting or finance is safe. Investing in unproven startups or speculative bets is risky, investing in index funds is safe. Trying to overturn the scientific consensus is risky, keeping your head down and publishing papers that don’t say anything is safe. Producing challenging new art is risky, spewing an endless stream of Marvel superhero capeshit is safe. Even if, in every case, the safe option is the “rational” choice for an individual actor in maximin expected value terms, the sum total of these individually rational choices is a catastrophe for society. [Mr. and Mrs. Psmith’s Bookshelf]
• Fundamental to our approach to energy markets at RBN is a view that natural gas, crude oil and NGLs have become much more interdependent than in the days before shale. What happens in gas impacts NGLs, which influences crude oil, which loops back to the natural gas market. There was a time when you could live out your career in the gas business, or the NGL business, or the crude business and get by with knowing very little about the other hydrocarbon markets. Those days are gone forever. For example, today’s gas prices make no sense unless you understand the economics associated with NGLs and associated gas production. Production of condensates from crude wells directly compete with natural gasoline, the highest margin NGL for gas processors. Natural gasoline prices are being boosted by its use as a diluent for Canadian bitumen crude oil. Low prices for ethane result in rejection of ethane molecules back into the natural gas tailgate stream of gas processing plants. These examples and many more typify today’s highly integrated liquids and gas hydrocarbons markets. [RBN Energy]
• Its nature owes to the fact that it is an island, surrounded by stormy seas. Too small to grow all their own food, the British had to use those seas. Their merchant marine and their navy became huge and skillful. This affected fundamentally the governance of Britain. On the Continent, kings had big armies, which made them strong against their parliaments (Churchill’s word for legislatures), and they became more absolute. Britain had a big navy, and the king had trouble getting money from Parliament even for that—and much more trouble for the army. Navies are not so handy for oppression at home. Britain became freer, power more divided. Once the British had conquered the stormy seas near Britain, they could go anywhere in the world. And they did. [The New Criterion]
• At the conclusion of the war two years later, Hussein found himself buried under nearly $80 billion in debt owed mostly to the Gulf states, a massive reconstruction project to repair the damage done by eight years of war at an estimated cost of $230 billion and a standing army of more than one million he could neither afford to pay nor release into the devastated economy. Hussein required oil prices to be raised to a minimum of $25 a barrel to remedy his situation. Instead prices fell from $20.50 a barrel in early 1990 to $13.60 in the summer due to continued overproduction by Saudis and Kuwaitis, each dollar taking a billion dollar toll on Iraqi revenues. To add insult to injury, Kuwait was allegedly slant-drilling along its border with Iraq into the Iraqi side of the Rumaila oil field, causing an additional loss of $2.5 billion. Saddam claimed "The oil quota violators have stabbed Iraq with a poison dagger," issuing the ominous warning that "Iraqis will not forget the saying that cutting necks is better than cutting means of living." [link]
• The 2020 election forced everyone’s eyes wide open for vote rigging, but far fewer have paid attention to the corruption of the last United States Census, conducted in one of the worst years in human history, 2020. This isn’t me spit balling, here.  The Census Bureau came out and admitted that they botched that census.  Just like every pipe burst, power loss, machine failure, extension, or batch of found ballots always favors the Democrat candidate, who do you think the census botch favored? [Seth Keshel]
• “I know the Americans have increased production pretty dramatically in the last 10 years, but it might not always be that way,” she said, speaking after her province joined the recently established Governors’ Coalition for Energy Security as the first non-US state member. “They need to know that if they’re looking for additional supply, they shouldn’t be looking to Iran or Venezuela. They should be looking to their friend up north.” [Bloomberg]