Although that certainly smarts, I can’t say that I’m surprised.

Provident has traditionally been a very conservatively managed trust.  They look to increase their reserves with the smallest amount of risk (i.e. expanding production through infield drilling and acquiring proven reserves), and they really don’t take off any more than they can manage, and manage well.  A case in point was the divestiture of its equity interest in BreitBurn Energy Company L.P for a total sale of about $305 million USD.

Provident has been beaten down lately with the rest of the markets, commodities in particular.  As fast as oil prices rose, they fell even faster.  I suspect that the price action from most Canadian trusts came as a result of big money fleeing the market to increase liquidity, and money was pulled from even the most attractive places.  No stock is/was safe.

The good news behind all this is that fundamentally the trust looks fairly robust.  Funds flow from operations in Q3 were up 44% from the same quarter of last year.  Production from the Canadian side of the O&G business was up just slightly (~1%) from the same quarter year over year.

Interestingly, the payout ratio was down to 61% for the third quarter, as compared to 89% from Q3 last year.  For the nine months ended September 30, the POR was just 53% compared to 88% for the same period last year.

So why the dividend cut?

Just like any business in this economic climate, PVX is facing the same pressure economically as the mid-majors in the U.S.  The forecast for oil prices in the next 6 to 12 months is anyone’s guess, and while things were looking up as of the end of the third quarter, they aren’t so bright going into Q4, and I suspect the results from this quarter, reported next year, will be less than palatable.

Provident believes that capital spending must be aligned with prevailing economic conditions. To this end, the Board of Directors has adopted a conservative capital budget of $165 million. Provident has an extensive inventory of quality opportunities available for additional investment. Provident will review its capital program throughout 2009 to determine whether any combination of work program results, commodity prices, equity and debt market conditions or other material factors merit changes to the capital budget. -Source

It’s clear that Provident is getting a head start on the budgetary aspects of this downturn in the oil and gas industry, however I believe that they are savvy enough to capitalize on these bad times. In a lot of respects, they already have.

The company has a new development they’re calling the Pekisko play in Northwest Alberta, consisting of a 100% working interest in about 54,000 acres of undeveloped land.  What’s interesting about this is that that acreage is right next to existing company operations.  So they know the geology and they know the local reserves.

In fact, they drilled two horizontal exploratory wells that production tested more than 250 bpd.  Not bad, even for $50 oil.  In all, the reserves are estimated at 2 million barrels of proved plus probable oil based on these two offset wells.  In all the company has about 300 drilling locations in the play, so they’ll be busy for a while.

In all, I’m not really worried about my stake in PVX, sure the distribution cut is a bummer, but again I’m not surprised.  The potential that keeps presenting itself to the company is still attractive, and the fact that they capitalize on their opportunities is a sign of a well-run oil and gas company, regardless of the market or industry conditions.

I look for oil prices to hover between $40 and $60 for about the next six months or so, and then go up as the economic conditions strengthen.

To be honest, I’m not sure it would have mattered.  Taking a step outside my own viewpoint and looking at the overall campaign Barack Obama ran, I’m not sure the Republicans had a big name they could put up against the man from Illinois and stand a fair chance in the same economic environment that McCain had to operate in.

As I mentioned in a quick response to MJ, Barack Obama had the charm and charisma that is almost uncharacteristic of a politician, regardless of affiliation.  He has a way of communicating that sucks you in, mesmerizes you, and you go away feeling part of his team.  The problem is, he really doesn’t say much at all, you know you like what ever it was, you just don’t know why.

Try this: Watch a speech given by Barack Obama, and try and quantify how you feel after watching.  Then, sit down and read the transcript of what he just said.  If you remove the charisma and charm, his message takes on a whole new meaning.  Or at least less of one.

In my opinion, if this election were held 10 months ago, Barack Obama doesn’t stand a chance.  Given the nature of our political system, capitalizing on such a widespread event like a severe economic downturn that affects nearly everyone, the minority party will beat the incumbent 9 times of 10.

I take issue with MJ’s other statement, though:

I said it before and I will say it again, the economy is hurting and until programs are put together to keep people in homes and save banks, instead of programs just to save banks, the current course of events will continue until things bottom out.

I disagree.  Putting a program in place to keep people in homes is like trying to fight a war without taking casualties. There are two types of people that are being forced out of their homes: the type that couldn’t afford the home in the first place, and the type that gambled on variable rate interest rates when interest rates were at an all time low to begin with.

You won’t solve any economic problems by keeping people in houses that couldn’t afford them in the first place. Even if you (and I mean YOU because the government would spend YOUR money to do it) pay off their mortgage all together, their income levels won’t support the local economics of their neighborhood as it would if they had their own money to make the monthly payments.

The other type, the type that gambled on moving interest rates, are arguably collateral damage.  You could say that they were taken advantage of, and to a certain extent I agree, but it doesn’t justify bailing them out of a decision that was ultimately their own.  No one should know and understand your finances and investments better than you.  And if some one convinces you that a 4% variable rate mortgage is a good idea when rates really can’t go down much more, that’s on you pal.

There is another type of person that is being forced out of their homes right now, and those are the people that were living on the ragged edge of their means, even though they were making all their payments.  One lay off and they’re done.  You’ll have that during any economic down turn.

Bailing out the banks is another issue, as the economic effect of an illiquid banking system is more far reaching than the housing problem.  You have retirment accounts and pensions, along with other traditional investments that are predicated on a financial system that makes loans.  You have to keep liquidity in the banking system, or the banking system will fail at it’s sole purpose: lending.

That’s not to say I agree with how the government is going about stimulating the banks at all.

In the end, you’re going to see the course of events continue until things bottom out, regardless of whom you bail out.  The more money you use to do the bailing though, the longer it will take to bottom out.

MJ goes on to say:

It’s scary to see different companies reporting their earnings, because with each report an annoucement of job cuts of 3%-5% occurs.

True.  That happens in every recession.  Always remember, the harder the markets rise, the harder they fall.

You see job cuts follow earnings because job cuts have an immediate effect.  You tell an employee to stop working, and you stop paying them right then and there.

Capitalism will heal this problem fastest so long as the government doesn’t try to “help” it.  There are those that say capitalism is what got us into the spot we’re in, but what they forget is that it was Bill Clinton that tried to “help” it by pushing Freddie and Fannie to make loans to those who couldn’t afford them.  That’s not capitalism.

You can have capitalism, or you can have socialism.  You can’t have both and expect things to work out and differently than they have.

Perhaps it’s not that I’m not happy with the results, maybe it’s that I’m uneasy.  Yeah, that’s a better term.

I find it troubling that we’ve elected to the office of the President of the United States a man that has unarguably affiliated himself with such questionable people.  The likes of Jeremiah Wright and William Ayers; neither of these men reflect what I view as men with respectable character to be associated with at all.  One can argue about the extent in which Barack Obama was associated with either of these men, but the fact that he was associated with them at all speaks to his own character and morals, first and foremost.  After all, I believe your character is reflected upon by the company you keep.

As citizens, we’re asked to select the next leader of the free world, and John McCain and Barack Obama were the best our two political parties could come up with?  This year more than previous, I feel as though I had to vote for the lesser of two evils.

I digress.

Barack Obama’s success as President is at the mercy of the economy.  The majority of people leaving polling places indicated that the economy was the number one factor when making their decision to vote, and I believe Obama’s success as President will hinge on the same.

If the economy does not turn around within four years, and if unemployment is at levels higher than during the Bush administration, and if the stock market is at levels lower than highest-high during the Bush administration, Barack Obama will have a very difficult time getting re-elected.

Why? He promised change, and people are going to hold him to it (the Republicans specifically will too, for sure).  There were very few fine details of what Barack Obama would change, aside from broad and general overtones that he would raise taxes on the rich, redistribute wealth, raise capital gains and dividends taxes, bankrupt the coal industry allowing electricity prices to “necessarily skyrocket”, give everyone the right to health care, etc.

Unfortunately for the Democrats, if he does any of these things before the economy rebounds, he’ll do nothing but stretch out the recession.  And if he stretches it out too far, he’ll only see a single term as President.

What do you mean by “too far”?

As I’ve mentioned numerous times on this blog, Americans have a severe short-term memory problem (after all, they forgot that it was actually the Clinton administration that started the housing problem). They view $3 gas as “cheap” compared to $4 gas they bought two months prior, even though just 8 months further back in time it was under $2.

They voted for change, but even more explicitly they want change now.  I’m reminded of the character “Violet” in Willy Wonka and the Chocolate factory… “I want the world, and I want it now!”

So, smart guy, what should he do?

If Barack Obama is smart, he’ll “change” very little in the first year of his administration.  The harder the government tries to “fix” our economic problems, the longer those problems will drag out.

Instead, he should cut federal spending until it hurts, and then cut some more.  Be smart about it, and leave the programs that provide a return on investment alone.  There are some obvious infrastructures within the federal government that may benefit from an increase in spending (spending money on the federal highway system always pays off in tough economic times), although those are few and far between.

He can also put a stop to all the needless pork stemming out of Washington too.  All he needs to do is hold a 10 minute press conference on national television and say the following words:  “Any bill that crosses my desk that has so much as one cent of pork or earmarks attached to it will be vetoed, no questions asked.”  Then, back that statement up with action.

Even if it’s a bill to cure cancer, with an additional million to fund a bacon museum, he vetoes it, and holds another 10 minute press conference on national television and explain to the American people why he had to veto a bill to cure cancer.  It’s a simple as that.

After that, show the people the results.  Show them what the budget was before he made his federal spending cuts, and then show the budget afterwords, and detail all the federal programs that were cut and what those cuts saved us.

If there is still a budget deficit, explain to the American people that he’s going to have to raise taxes, slowly, and for everyone, over the next 4 years (assuming he’s planning on running for re-election), and he’ll evaluate the budget every year to determine if he can halt the tax increases or even lower them.

Remember, all Americans should benefit from federal programs equally.  The rich typically don’t benefit from the federal highway system any more than the middle class, and they shouldn’t pay more for it either.  The postal system benefits everyone who has ever mailed a letter.  Just because you pay more taxes doesn’t mean your mail gets delivered any faster, or for any less money for a stamp.  The FAA benefits anyone who travels by air, or anyone who has received cargo or mailed anything via the federal airspace system.  Just because you pay more in taxes doesn’t mean your plane goes any faster or your ticket is any cheaper.  NASA benefits us all, just about equally.  Velcro, microwaves, Tang… all used and consumed by those who pay taxes and those who do.

So it’s all about the economy?

Yes, for the most part.  Barack Obama ran his campaign leveraging his ability to attract money as well as taking advantage of the weak economy.  Remember, it was just over 12 months ago that Barack Obama came out and said he was going to raise taxes… for everyone.  It was easier to get away with then because people still had funds in their 401(k).  As the economic downturn started pressing people financially, he realized that claiming to raise taxes on everyone would be political suicide.  So that’s when he started talking about raising taxes on anyone over a certain dollar amount.  After all, those people should be able to absorb higher taxes… right?

Barack Obama has to “change” things drastically and he has to give the people that voted for him a qualitative and quantitative return on their vote.

If the people that voted for him are no better off than they were at the end of George W. Bush’s term, he will not be re-elected.

I went to the polls to vote for the best man for President, only to find out he wasn’t running.

Pumping units provided the linear motion to the production string required to produce the liquid emulsion that is made up of water, crude oil and natural gas, among other elements.  Other common names for pumping units are beam pumps, sucker rod pumps (SRP), pump jacks, horse head pumps, and nodding donkeys.

Pump jacks are commonly referred to by their model, which is fairly common between manufacturers.  For instance, a 16-53-30 pumping unit is smaller than a 57-76-54 unit.  The model number is denoted by the rated torque of the reducer, the maximum rod capacity, and the maximum stroke length.

So the 16-53-30 unit will support 16,000 in-lbs of torque put out by the reducer, pull 5,300 lbs worth of rods, and have a stroke length of 30 inches.

-Source

Obviously, the deeper the well, the more rods you’ll need in the well bore, requiring a larger pumping unit to pull the weight.

Some major manufacturers of pump jacks are Lufkin Industries, Bethlehem, Parkersburg, Cabot, and Rigmaster.

Overall, a pumping unit is made up of several major components.  The samson post holds the walking beam with what’s called the saddle bearing.  A pitman arm connects the rear end of the walking beam to the reduction gear box crank, which is driven by the prime mover, or engine/motor.  The horses head attaches to the opposite end of the walking beam, to which the bridle cables attach.  The shape of the horses head ensures that the bridle cables move in a linear motion, even though the walking beam is rotating.

There are more exotic variants of the pumping unit, such as air-balanced units, but this description should provide the basic concept.

Additional Resources

Lufkin Pumping Units

Terrified? Really?

Houses are being shot up because of political affiliation.  Cars are being vandalized because of a bumper sticker.  The common folks in our country have never been so divided.  Well, at least going back to the civil war.  And that’s the part that is really scary.

The civil war was fueled by differences in opinion on high level political issues, i.e. slavery.  The differences grew so strong that groups stormed into nearby towns, divided by political boarders, murdered entire families, and burned towns to the ground, just because of their political affiliation which was determined by nothing more than geographic location.

And back then, they didn’t even have the internet to spread the vitriol of today at warp speed.

People are becoming so passionate about their candidate that they’ll stop nothing short of cursing in public and starting feuds with people who are their neighbors.

So when does this stop?  No one can agree to disagree any longer.  We’ve got the Democratic party who would love nothing more than to have a total of 60 seats in the Senate so they can leverage their numbers to “get things done”.

Is that really a good idea?  Removing the dissenting opinions from debate ultimately will lead to destruction. Providing any one group with unbridled power will remove any common sense from the system.  Just ask the Germans.

The really scary part of all this is that our own political system is doing a better job of dividing the country than uniting it. Where will that philosophy take us?

Politicians want nothing more than for their party to rein supreme, but don’t understand the cost.

It seems that the stability of the global economy is trumping anything OPEC can do to prop up the price of crude.  There is still a lot of money leaving the energy markets, either by force or lack of confidence.

Unfortunately, with every down day in the crude market, the foresight of alternative energy comes more into question. Everyone with a vested interest in developing alternative energy is starting to question the security of the decision to steer to wind, solar and other alternative energy sources.

As the price of gasoline slides, efforts from the likes of GM with the Chevy Volt seem to carry less of a return.

I think in the long run crude oil prices will start moving up again.  It’s just a matter of how long the alternative plays can ride out the dip.

Three years ago Pickens donated $165 million to Oklahoma State’s athletic department in an effort to buy OSU’s way back into contention in the Big 12 Conference. Brand new indoor practice facilities for every sport on campus, a revamped football stadium, press facilities, etc. It was all worth doing, and Pickens was going to foot the bill to do it.

Just to make sure everyone knew he was serious, he allowed the school to take out a $10 million life insurance policy, you know, just in case.

But what’s striking about all this is that Pickens didn’t just donate the money to the school.  He took the money and plunked it down in BP Capital Management, a hedge fund controlled by none other than Pickens himself.

It turns out, BP Capital Management isn’t immune to the current market forces, and has had nearly all of the $165 million in “donation” wiped out by margin calls.

So now the University is stuck with an ongoing project (that has now been put on hold) with no way to fund current development, much less see the project through to completion.  The football stadium expansion was funded with loans backed by what was a $300 million chunk of collateral in BP Capital.  That was when times were good and oil was expensive.

Oh how the times have changed.

The initial gift kept growing and growing as it sat in BP Capital, thanks to the increasing oil prices after the hurricane action in the gulf gave an instantaneous jolt to the oil markets.  But what goes up must come down.

As oil prices started to fall, BP found itself “on the wrong side of the market” so to speak.

So now the stadium project (named after Pickens, naturally) generates over $1 million in interest payments per month.

Hopefully this will serve as a lesson to major institutions that there is no substitute for cold hard cash.

May the common investor take note.

Frequent readers of The Corner Office Blog know that I’ve been bearish of Chesapeake Energy (CHK: chart, web, Y!) due to their huge amount of debt (and the pilfering of shareholders to pay off that debt by diluting the stock) when commodity prices were at record highs.

I’ve owned CHK before and have made money off the stock, but when credit started tightening over the last year to 18 months, I knew CHK would end up with a target on its back just due to the debt alone.

Well, it seems the debt has come back to haunt Chesapeake, along with an in-house trading philosophy that ended up costing the company $1.6 billion on paper, and forced CEO Aubrey McClendon to sell all of his own companies shares involuntarily.

Here’s how it all went down.

Chesapeake was making money hand over fist when commodity prices were high, just like any other player in the field.  Then, their trading operations made the gamble that the run on oil and gas wouldn’t continue.  So the company bought options and other financial vehicles to lock in the current rates (around $120/bbl for oil at the time) to protect from what they saw as an expensive downside risk (also known as hedging).

So what happened?  Oil continued to rise to a high of just over $145/bbl in July of this year.  That’s actually a good thing for Chesapeake, right?  Not necessarily.  Since Chesapeake hedged their oil at $120, they were only getting paid $120 for every barrel they pumped, not $145 that was the current market price.  Again, they’re still making boo-coo bucks at $120 oil, but they could have been making more.

The fact that they could have been making more shows up as a loss on the balance sheet.  All in all, Chesapeake could have made as much as $1.6 billion more if they had not hedged their oil and gas at lower prices.  So this goes as a loss on the books for the second quarter.

What effect does the debt have?

Creditors typically want to see that their their loans are safe, and as such they write in certain conditions that if met, they reserve the right to call the note.  Sort of like having a margin call if you can’t maintain the margin requirements.

So I suspect that the $1.6 billion loss on Q2 earnings triggered such an event.  Since banks would like nothing else than to have cash right now, they probably capitalized on the opportunity to call Chesapeake on a loan, and I suspect it was a big one.  So now Chesapeake has to scramble to come up with a boat load of money to pay off the note.

As a result, there is a fire sale going on right now in the oil patch in Oklahoma and Texas.  I suspect Chesapeake is selling everything they can, from surplus oilfield equipment to leases, just to raise money.

But what about the CEO’s shares?

Chesapeake CEO Aubrey McClendon was so sure of the prosperity of his own company that he bought shares… on margin.

When the second quarter results showed a multi-billion dollar loss, the shares couldn’t have headed for the deep end fast enough.  Due to insider trading rules, McClendon couldn’t unload shares prior to the news, so he had to ride it out.  By the time the smoke cleared, the brokerage called him on failure to maintain margin requirements and sold his shares for him.  All of them.

So what does all this mean?

It means that there are a ton of CHK stock holders out there that are stark raging mad.  And rightfully so, but it appears for now that they really don’t have a stick to shake.  Chesapeake gambled and hedged oil and gas and got burned.  End of story.

It also means there are going to be opportunities to capitalize on Chesapeake’s misfortune.  There will be some leases available at rock bottom prices since the price of oil is falling, and some weak hands are being flushed out of the patch.

Corner Office Comments

Debt isn’t always a bad thing, and can be used as leverage in some cases.  However, when you hold a lot of debt in an industry that’s making record profits, you’d be wise to get rid of the debt as soon as possible.  If and when the credit industry tightens, those with the most debt will be the first to be denied.

1. There is no way to escape politics unless you turn off the TV.
2. Most people aren’t actually listening to what the two presidential candidates are saying.

John McCain keeps telling everyone that “…American’s are hurting” when addressing the economic problems here in the United States.  Hurting?  Really?

Taking a fastball to the ribs leaves one hurting.  I guess I haven’t been informed of the new definition of the term “hurting”.

Sure, peoples finances aren’t what they used to be 12 months ago, and some are at risk of losing their home if they haven’t already.  But are they really hurting?

I guess I’m tired of being told that I’m hurting.

McCain makes these comments and then gets a roaring ovation for claiming he’s going to “fix” the problems that are hurting the American people.

Barack Obama then claims that he’s tough on terrorism and he “…wants to kill Osama Bin Laden”.  Yet another roaring ovation erupts.   Way to go out on a limb, there, Barack.

Both candidates claim that we need a quick fix to this credit crisis because right now small businesses “…can’t get a loan to make payroll”.

Think about that for just a minute.  We need to fix this problem because a business can’t get a loan to MAKE PAYROLL!

It’s the free-thinking capitalist in me that ponders the thought:  Maybe these small businesses shouldn’t be able to get a loan to make payroll…  because they’re in the position to need a loan to make payroll!

Right now it’s obvious to this kid that these two clowns of our government are trying to say what ever needs to be said to get themselves elected.  It’s the followers that attend these rallies that hoot and holler when their man says something profound like “I want to kill Osama Bin Laden” as though it’s some kind of revelation that’s going to win the hearts and minds of everyone, that I worry about.

I think a majority of the CANROYS are oversold due to the nuclear fallout from Wall Street, and I still believe there is some significant upside to PVX.

My basis is down around $10 per share now, and will continue to buy under $8, so long as the we continue seeing money trickle back in to the market.

I’ve been perplexed by the market these last couple weeks, so much that I’ve started wondering if what we’re seeing happen right now is actually for real.

Is this a complete melt down of our financial system that would cause a collapse of the stock market, or could this be the most golden of all buying opportunities?

By in large, I think the stock market will be ok, so long as the government doesn’t try and step in and strong arm a fix for this mess that stems well beyond the stock market.  So is this a buying opportunity then?  Yes, I think so.

I thought I was doing pretty well when I bought more Provident Energy (PVX: chart, web, Y!) last week at $7.30 per share.  I felt otherwise when the price dropped below $5 per share by the end of the week.

So what’s happening here?  Obviously there is a huge demand for cash by institutions.  Normal Joe investors like you and me don’t have the pull to chop 50% off the top of any stock, let alone the entire market.  Hedge funds and institutional investors do, however.

I think what we’re seeing is a demand for cash by lenders, which is forcing those who don’t have cash to find it quickly.  So you’re seeing a run on many stocks that isn’t completely justified.  At least not to the extent they’ve been beaten down.

Consequently, this has pulled the market cap down well below what is reasonable.  For normal Joe’s like you and me, this means that there are some golden buying opportunities out there right now in companies who carry little to no debt, and are going to do just fine given enough time.

So what about my Provident?  The yield is up around 22% as of the close last Friday, and it’s been years since it’s been this cheap.  Obviously PVX is tied to the oil and gas market, which has also been beaten to a pulp lately.

But we’re on the verge of winter, which should stabilize the price of natural gas and heating oil, and should provide some stability to the natural gas players, of which PVX is one.

Honestly, I’m in the stock for the dividend, as I suspect most are.  So far, they’re holding the line at $0.12 Canadian for the October distribution, and will report Q3 operating results on November 12th.

This whole thing started snowballing well before Bush took office, and the proof is out there on the internet, if you just care to look.  For instance, an article from 1999 in the New York Times on how Fannie Mae was being pressured to offer easy credit to increase lending… by who?  None other than the Clinton administration:

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. -Source

And you can’t tell me we didn’t see this coming. It was seen coming back when this little fiasco was conceived.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s. -Source

And the result?  Yeah, the writing was on the wall, all the way back in 1999.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.” -Source

So, here is how this all really went down.  This mess was started by the Clinton administration.  The Bush administration inherited what would become the biggest financial mess in recent history, the Republican congress sat through the good times, and the Democrats jumped into the majority just before the fall out.  And now everyone is blaming everyone else, and nothing has been accomplished to fix anything.

Well, I shouldn’t say that.  The fact that our government isn’t accomplishing anything, is actually accomplishing what needs to be done: Nothing.  Let the banks fail.  Let those who lose liquidity suffer from the loss of liquidity.  And don’t spend my hard earned money trying to “fix” anything.  The markets are taking care of themselves in my opinion, and while it’s going to stink for a while, keeping the government hand out of the free market cookie jar will get things squared away all the more quickly.

Just because Americans have the right to own a home of their own, does not mean that they should all have the ability.

The Clinton administrations exercise in socialism failed.  Perhaps we should give capitalism a shot again…

The city will “seal off” 30 percent of government and Communist Party-registered vehicles Oct. 1, the Beijing government said on its Web site today. It will also limit the time the remaining government vehicles, as well as company- registered and private cars will be allowed on the roads, it said. -Source

The city of Beijing also put a stop to building work and shut down factories during that same time frame.

The effort is actually quite elaborate.  For instance, the last number of a license plate of each car will determine which days that car will be disallowed from the roads in Beijing. Social organizations and various businesses are shifting work schedules to stagger the traffic flow.

Unfortunately, this means that I won’t be able to gauge what effect this curtailment has on oil prices.  A while back, I mentioned that around the same time China took the cars off the road and shut in manufacturing facilities, the price of crude oil started dropping.

Now that Beijing is going to keep the curb in place, it will be tough to tell if this was all simply coincidence or if China’s demand for crude is actually a measurable quantity in this regard.

Crude oil is down $30 since the curb went into effect.

The Reserve has closed their funds (after breaking the buck), which makes me look like a genius for moving my money out of RYPQX a week prior. if only by reason of being lucky.

To be honest, I’m not sure what this financial situation means for me.  I’ve still got plenty of cash at Emigrant Direct making a measly 3%, but it’s guaranteed money, and good enough for an emergency fund.

None of the stocks I own have gone under, and they’re actually holding up rather well.  PVX dropped under the $10 mark, and even flirted with the sub $9 level for a few days.  Unfortunately I ran out of cash after I bought another chunk of shares at $9.75 thinking I was really timing things well.  You can time the markets, and then wish you hadn’t even bothered.

My mortgage is still secure, and I’m still able to pay it.

My 401(k) and other retirement accounts have taken the same beating my trading account has, but I don’t need that money for another three decades or more.

So now I just sit back and watch.

I’m finding myself actually enjoying watching things unravel, which is almost sick, I know.  However, I think this period in time should remind everyone that no one should have more knowledge of where your money is than you.

It’s kind of funny.  You don’t ever know who’s swimming naked until the tide goes out.

I have to admit, I’m a bit of an early adopter, so I jumped at the chance to download “Chrome” in beta format. 

Chrome appears minimalist by design, but the advertising super-giant claims that the browser is faster, safer and “easier” than its counterparts.

So far, the new browser does appear to be faster than loading the same pages in Firefox, and considerably faster than Internet Explorer, although I really don’t have the means to quantify that statement.

A few features I like about the new browser: Dynamic tabs, application shortcuts, and what they’re calling “incognito mode“.  The dynamic tabs feature allows you drag individual tabs out of the browser into its own window.  At first I thought this was kind of “gimmicky”, but then I realized that I could launch two instances of Chrome side-by-side on my monitor, and move tabs from one pane to the other.

The incognito mode is neat because it doesn’t save any information (i.e. cookies, passwords, history, search information, etc) on your computer.  It’s not terribly convenient since you have to open a separate instance of the browser, and it’s not something to use all the time since it won’t store cookies to the sites you want to have stored in local memory.

With all the data tracing going on these days, one really has no idea what the information you’re blasting through the ‘net will really be used for, much less what you blindly allow to be stored on your computer.  Incognito mode would be nice for public computer access though…

Application shortcuts allow you to store shortcuts to internet-based applications right on your desktop; although I’m not sure how this is much different than creating a link to an application.

Chrome is taking a bit of getting used to, and there are a few quirks about the program that I’m still trying to figure out.

Tried Chrome? What do you think?

The Story Behind Chrome

It’s had a good run recently, which makes me wonder if it’s too late to get in.

In no way do I think we’re out of the woods in terms of our countries credit and debt problems, and I think we’re just now seeing the effects of a slimmer wallet.

I’m happy to say that we’ve managed to fulfill this goal about 6 months early this year, which gives us time to start saving for next years $10,000+ contribution limits.

(Starting in 2009, the Roth IRA contribution limits will be indexed to inflation.)

So now I have to figure out where to stash the money for the next six months.  I’m leaning towards the Emigrant Direct account, since they increased the APY to 3%.

“The market is oversupplied by at least 1 million barrels a day. If OPEC would like to remove this additional oil out of the market, then OPEC has to cut some production,” OPEC governor Mohammad Ali Khatibi told Dow Jones in a telephone interview. -Source

Oversupplied by only 1 million bbls per day?  Is that all?

Perhaps they should wait to see what demand looks like after China restarts manufacturing operations after the closing of the Olympics.  As I mentioned in a previous post, China had shut down manufacturing in an effort to reduce pollution in preparation for the games back at the beginning of July.  Right about the time crude prices started to slide.