The speculation about speculators speculating about oil price

It's becoming a recurring theme to blame the high oil price on "speculators". This of course implies some sort of clear distinction between someone legitimately purchasing oil contracts or someone purchasing or selling them purely for profit. There is of course a difference. You might call the first one a country or a company. You might call the second a trader.

The solutions being presented suggest that all we have to do is convince Wall Street to stop trading oil! Here's a choice exert:

Saudi Arabia promises to fill in the supply gap if the Iranian crisis escalates, but there's only one place that can help stave off high oil prices: Wall Street.

Now, blaming speculators for high prices is nothing new. What is new is that one of the largest speculators in the oil markets, none other than Goldman Sachs (GS), admitting that heavy speculation does have an impact on oil prices. How much? Well, Goldman's oil analyst wrote in a note last month that every million barrel equivalent of oil futures that was net long the market adds 10 cents to the price of oil. The market is currently net long US benchmark crude, or WTI, by 258,406 contracts which is equivalent to 258 million barrels of oil. At 10 cents per every million barrels, that would mean speculation is currently adding $25.80 to every barrel of oil -- without the excess speculation, oil would trade at around $81.52.

Note the language here, without the "excess speculation". Excess. So who decides whose contracts are "excess"? ALL of the contracts are speculation but only some are "excess" speculation. Well it's simple some are probably saying, the "excess" would be those not in the market to take delivery. It sounds simple, but effectively what you are saying is that you would be entering into a non-transferrable binding contract. A country that made a loosing bet on oil for instance would not be able to trade their contracts and would have no option but to take delivery, take the losses and then put the product back on the market. Not very effective. So this is to say that if we are to have an oil market at all, it will be a speculative market.

Despite the verbal assaults, there has been little impact on global oil supply as a result of the tougher sanctions on Iran. OPEC estimates Iran produced 3.424 million barrels of oil a day in February, which is off around 5.4% from the 2011 average. Increased crude production from the rest of OPEC, namely Libya and Saudi Arabia, more than made up for this small decline in output. Meanwhile, the U.S. market continues to be well supplied. There is currently enough oil in commercial oil storage tanks to cover 57.5 days of demand, which is 4 days more than a year ago and 6.6 days more than the five-year average.

But it is the potential for a massive supply disruption that is adding a special premium to oil prices, even though such a possibility is remote. Saudi Arabia's oil minister told reporters last week that the Kingdom stands ready to "make good any shortfalls – perceived or real – in crude oil supply." This week, the Kingdom's cabinet released an official statement saying that it "alone" would supply enough oil to the markets to return prices back to what it deems to be a "fair" level for consumers. U.S. benchmark crude futures shed about $2 after the news, to end Tuesday at $106.07.

If only the futures market cared about the present. What they are telling you here is that even though there is plenty of supply now (enough to last 57.5 days) the "speculation" is being driven by fears about the future. People are paying a premium now because they are anticipating supply issues in the future. Traders are "bull" now because they anticipate supply disruptions in the future. Wall Street isn't causing the anticipation, possible supply disruptions are.

We're all speculators. Ever filled cans of gasoline because you knew or expected the price to go up? congratulations, you're a speculator. The price could possibly go down, but you made a bet it wouldn't. That it would go up and paid a premium price in the now to save money in the future.

Now I'm not saying the market isn't corrupt. It is. But if we want to do something about that, oil speculation is hardly the place to start. The reality is, if it wasn't Wall Street, it would be someone else. Like the Chinese for instance, or Japan whose imports have tripled since Fukushima. There is no shortage of demand, and speculators have nothing to do with that.

Canada and the fine line between reality and lies

Gone are the days of fairytale stories about Canada's incredibly stable and safe banking system. These stories are now slowly being replaced by a stark reality: Canadians are carrying too much debt.

It is now 2012, and the much promised economic security and stability isn't here. Sure, many supporters of our politicians will say "well it's not our fault, the global economy is at fault" and I certainly won't argue that point, it is definitely at fault. What few seem to realize though is we are a part of that economy as well. It's not that I honestly expected the global economy to be out of the woods but what upsets me is just 1 year ago: our politicians and supposed economic experts did expect that. What good is an "expert" if they can't tell which way the wind is blowing?

Even now, our politicians continue to provide promises of "balanced books" by 2014, 2015, and beyond. Pick a year and somewhere there is some government estimating that's the year their books will be balanced. But based on what? This is utter and complete double-think. The world economy cannot both be recovering and holding back economic recovery at the same time. Someone's lying, and I don't think it is reality.

Canada's tipping point will be here within the next few months. Already austerity is the talk of the town in Ontario. Quebec is now pulling an Alberta; betting that royalties from mining will cover anticipated deficits. People should be quite upset when royalties are used to balance budgets. Why? Because that's future revenue being used to cover current revenue shortfalls or overspending. It's shortsighted and when the future they are stealing wealth from arrives, what then?

Maybe that future is here right now. A recent indicator to our true economic health passed by recently showing just how thin the line we're walking really is. Back in February TD & RBC ended a cheap mortgage financing scheme early a few days after a series of warnings about Canada's debt load sustainability. But it didn't last long as the banks recently just launched the same deal again! What's going on here? Can you think of a good reason why banks would cancel cheap financing for mortgages early only to relaunch the same deal a month later? The only answer I can think of is that Canadian's are out of wiggle room.

If we're to keep up the illusion that our economy is actually still growing, secure, and stable Canadians must be able to afford houses. Not being able to afford a home is a sure sign that your purchasing power has been destroyed; that your real wealth has fallen. Thus there is a need for the Bank of Canada to maintain low interest rates and for banks to offer cheap loans. As long as housing sales & housing starts look healthy most people believe the economy is healthy. Indeed "housing starts" blanket the headlines every time new reports come out. However, if the Canadian household debt continues to grow then it is safe to reason that housing starts & housing sales are only bouyant due to the financing options available and only at the record low interest rates that come with them, but should these rates raise it's likely many people will not afford their monthly payments: triggering defaults. Sound familiar?

February mid-month round-up: Greece burns, Alberta gambles & Canada trades soul for Pandas

Well it would appear that China has finally found a spot to park it's unwanted USD. That would be here in good old Canada and all it cost them was leasing us two Pandas. What a deal! Back in 2011 I wrote a quick post about why Canada's economy is good, bad and bullshit. A key portion of this post was that China was dumping the USD - but one year later with multiple countries such as Russia, India, and Iran writing off the USD as well one has to wonder, who exactly is taking it? Well it would appear the answer is Canada.

Now not only are we trading resources to the U.S. for a devaluing USD, no no.. now we will accept them from China as well. Many people are probably looking at our new trade relations with China and say to themselves: "well thats good isn't it? We're diversifying from dependence on the U.S. economy" - but this isn't really the case. Whether we are receiving USD from China, or USD from the U.S. it is still USD which is directly tied to the health of the U.S. and global economy. So are we breaking our dependence on the U.S.? When it comes to the actual physical trade: yes. When it comes to the value we receive for what we trade: no.

Are you a big coffee drinker? Have you noticed anything happening to the price of coffee? How about other imported foods? If you are conscious about your grocery bill you will probably have noticed it's gone up quite a bit. This is a direct result of piggybacking the CAD off the USD. Many analysts now claim the CAD is directly tied to resources now. They indicate that when resources go up, the CAD goes up, and when resources go down, the CAD goes down. However, the target for comparison always happens to be the USD. You may notice that if the CAD does exceed the USD, it's not by very much and not for very long. This is because while resource prices influence our dollar, a 1:1 ratio with the USD at most (approximately) is essential not just for continuing trade with the U.S. but also to continue trade with any country who trades using USD. The number of countries is large, albeit dwindling. It is really a match made in heaven: MAny countries around the world are looking for a place to dump their USD and Canada's valuable resources are "open for business". As most of our politicians are heavily involved in the U.S. stock market, they also have a vested interest in keeping the USD alive, even if the cost of food and gas for you and your family becomes unaffordable. This is the new measure for economic health, this is why the Euro was rising even as Greece was burning. On paper accepting austerity is great, but in reality it is destroying what's left of their physical economy. You know; the economy that feeds people, not HFT.

On top of Canada's "everything must go" fire sale policy it appears that we also are in a bit of a huff about proposed changes to the U.S. banking system. The take away paragraph from this article is:

The source of concern is a new U.S. regulation meant to deter deposit-taking institutions that receive backstopping from Washington from engaging in speculative trading for their own—not their clients’—profit, a practice known as proprietary trading. Risky trades by global banking giants were central to the banking crisis that compelled former U.S. president George W. Bush to launch a $700-billion bailout of Wall Street in 2008.

Translation: our banks engage in the same practices as in the U.S.

It goes on further:

“I think the impact could be very, very negative,” said Canadian Bankers Association President Terry Campbell. “If you interfere with the ability of governments and corporations to fund themselves, if you interfere with liquidity in the marketplace, which is necessary for funding, then you could have a very severe impact on our economy.”

Translation: Governments and Corporations fund themselves using risky and sometimes fraudulent banking practices and if we try to change that now then our "financial stability" is put at risk. Canada's complaints about these changes should confirm for all Canadians that our banks ARE NOT anymore stable than the U.S. or European banks. When you combine this fact with a world that uses the USD and a U.S. whose financial system is mostly dependant on foreign countries providing goods for that USD it should be no surprise the Fed's crisis fund bailed out non-US banks including Canada's TD.

The crisis in Greece is a preview of what's to come for all countries that engage in these practices as their ponzi economies rely on ever-increasing returns while peak oil ensures returns will be ever diminishing. It is the shortfall between leveraged value and real wealth which has Canada concerned as without riskier and riskier ways to leverage funds: profits dry up. For proof of this look no further than Alberta's latest budget which depends on a predicted 40% increase in oil revenue to meet expenses and bring Alberta out of a deficit (yet again).

Alberta's entire budget is based on a "bet" and betting is a feature of gambling. So Alberta's budget isn't really a "budget" at all now is it? When I budget for the month, I do not assume that sometime during that month I'm going to win the lottery and I certainly do not factor my theoretical lottery winnings into my budget. After you win the lottery and have the money in your hand then it is safe to include that in your budget. Now of course the odds of predicting oil price are a lot better than winning the lottery, but the cost of failure is the same.

Back in 2008, no energy analysts and no economic experts predicted a drop in oil price from $147/barrel to $38/barrel. No experts predicted that there would be a scooter revolution due to the price of gas at the time. Alberta has spent the last decade convincing Albertan's the oilsands were making them rich and yet wheres the money? The sustainability fund has been drained, infrastructure is crumbling or 20 years behind, the heritage fund in leu of their olympic train, $25m rebranding effort, and $2B for carbon capture is hardly sufficient to account for all of the resources given away in Albertan's names. With the latest budget and Alberta's continued campaign to pretend it has more money than it does - I expect a repeat of the 2008 situation in Alberta within the next 2 years.

Remember, at $147/barrel - and with cheap credit everywhere - debt could not be sustained. This time around all of that cheap credit has been used up and I believe the ceiling on oil demand is a lot lower. There is no more debt people (Americans) can get into to subsidize their ever-increasing cost of living. If oil hits Albertas targets and without some external crisis (Iran), it's highly unlikely it will be sustained any longer than the time it takes for those price changes to show up in the cost of consumer goods.

Further Reading: The Federal Reserve's Explicit Goal: Devalue The Dollar 33%: Forbes

November mid-month round-up: Occupy dies, the New World Order is born, the revolution begins

The Occupy movement is dead. Seriously. In it's place however is the new American revolution. They look similar, and the new American revolution is still calling itself Occupy, but they are very different.

I'll point out this difference for you in a very simple contrast of thought:
1) Occupy: When it first started people asked how long it could possibly go on for.
2) The revolution: People are asking how it can possibly end.

This difference may seem insignificant, but I assure you it is THE difference that makes this now a non-violent revolution. Whether you agree or don't agree with what Occupy has become, one thing everyone can agree on is that it's come so far now that it won't stop and it can't stop. It might change shape, venues, tactics.. but the fight is definitely on. The increase in police oppression shows that the system is aware of this. The status quo is in danger, and they know it.

The system is also coming out with the truth more and more. Take this article from Bloomberg/Businessweek:

“Asset sales are impractical in the current environment,” said Simon Maughan, head of sales and distribution at MF Global UK Ltd. in London. “Every bank is selling, and no bank is buying. It just won’t work. Beyond that, the magnitude of the cuts the banks are talking about is nowhere near the likely required amount of deleveraging. They need to reduce hundreds of billions more to adjust to the new world order. There has to be a recapitalization.”

Thats right, to "adjust to the new world order". That's what the Greece/Italy technocrats are a part of. You see, the system is currently working on transforming the population into accepting non-democratic economic policies. This is the new world order, it's a lot like the Kings and Serfs from the old world order.

As the European banking system continues to collapse and it becomes obvious this WILL be affecting North American commerce you can expect that the New World Order will be making it's North American appearance soon (probably after the U.S. supercommitee fails), and that the war on youth I've been blogging about will go into full swing.

This is an exciting time, scary but exciting. The most important thing you can do to prepare yourself, is to prepare yourself mentally for the what were once unbeliveable situations we are about to witness first hand. This is history in the making.

Debt Collapse - $20,000 Gold - Mike Maloney (FULL PRESENTATION)

Canada: A country in economic denial

Well the market since the S&P downgrade of U.S. debt has been a fun ride huh? Gold continues to set what seem like daily records while stocks are "only slightly higher than a decade ago". But all of these lightning fast developments have not shaken the faith Canadians (and in particular, Albertans) have in the positive outlook on the economy. Canadians still believe that the politicians we call leaders had "no idea" this was going to happen. We are a country in economic denial.

Psychologically it is no different than when a wealthy business man looses their job, their house, and will continue to dress in suits even though they live in a car. This is becoming commonplace amongst the U.S. population whose jobless outlook is bleaker by the day. It is indeed a psychological issue, and is quite prominent amongst our population too.

No one believed the titanic could sink either...

For instance, last week when I tweeted that I had successfully predicted the Bank of Canada interest rate dilemma i received an overly rude message from a fellow Albertan which said "Being essentially the smartest man alive, I'm sure you've turned all your nostradamus like predictions into millions ". This is a typical reaction from someone that is in denial, and finds the topics I write about truly frightening. So frightening that to effectively deal with them he must fantasize about nostradamus like "fortune tellers", which normally are quite crazy to put his mind at ease. For it is simply impossible that Canada is not in the pristine economic shape it has been claiming and anyone with evidence or opinions to the contrary must be crazy.

My prediction wasn't the work of nostradamus. It was a simple conclusion based on a trend being set by current events; the outcome was obvious and I explained briefly the logic to reach the conclusion. All it takes to make such a prediction is to stay current with events, and to think for yourself. The sender of this message obviously hasn't actually read anything I've written, otherwise he would be well aware that millions in fiat money is just what I have been saying it is. Worthless. Why would I want it? I write what I write because it is what I think, and I strongly *hope* that at least a few Albertans and Canadians were inspired to prepare for their futures from my words; that is all, not money, nor twitter followers. I personally don't care if you listen to me or not -- ultimately we are all in charge of our lives, but what we all have in common is that we are on the Canadian economic titanic together. It is your choice whether you want to believe this ship isn't sinkable or not, I surely won't convince you otherwise if you believe it's unsinkable in the first place.

Of course, having provincial and federal governments that also are in denial are not helping matters. Alberta has announced that it's deficit is in better shape than first thought. Of course these numbers are all based on events before the U.S. downgrade during a period where oil was sky-rocketing. As I have reiterated over and over and over again; the oilsands can *ONLY* bring in a profit during large upward moves and it is unlikely with world-wide economic growth outlooks that we will see $120 oil again this year, and it will be rare that we see $100. I predict the price will remain between $80-$100 for the rest of the year. This of course means all of the profit predictions being made by the Alberta government are based on the Q1 run up in oil prices. again as I've explained many times though, input costs take longer to catch up to the price of oil than profits do and once the bar is set for $80-$100 input costs all of those market riding profits are going to dry up. We've already seen this happen once before, remember when $70 was "high and profitable"? Now the government dreads a $70 oil price. It's also a one way road, meaning that input costs don't come down. What happens instead? the projects shut down. The Alberta and Federal governments have been playing Russian roulette with the Albertan (and Canadian) economies with the full support of an uninformed population in economic denial. They are uninformed because an informed populace would have seen the direct connection between Alberta's "growth" in the last few years and the U.S. QE programs. An informed populace would have noticed how in 2008 we lost hundreds of thousands of jobs the moment injections of cash from the U.S. stopped flowing into American businesses in Canada.

As I often say to my friends "if Canada was any other country [without our vast natural resources], we'd be so broke we wouldn't know what to do with ourselves". We may quite possibly be the worst money managers in the first world. We simply don't realize it because theres always more "oil in the ground" or "fish in the sea" to replace the funds we squander and not to mention our number 1 trading partner can (for the moment) print all the money they need to pay us. If Canada properly managed it's resources, we'd all be living like kings. Instead we've opted to "sell the pond, instead of the fish" and at bargain basement rates at that. From the actual issuance of our currency, to the oilsands, to our nuclear industry it is safe to say that Canada is "For Sale" and it is through these bottom basement price sales that Canada has been able to lie about the amount of foreign business we are loosing due to global economic circumstances. At least up until now.

Canada, we are a country in economic denial. Time to face reality.

A conflict over ethical oil

By now anyone who follows energy, economics, or the environment has probably heard the term "ethical oil". If you are not familiar with it; it was coined by Ezra Levant in his book Ethical Oil: The Case for Canada's Oil Sands. It also coined a lesser known term "conflict oil".

Recently a new blog came to my attention which was influenced by Ezra's book and it's causing quite the stir amongst environmental groups not sure how to counteract the image being portrayed. This image or argument is essentially that right now society requires oil, so would you rather get this oil from unstable, civil rights violating dictatorships or from friendly democratic Canada. This argument is painted for you in colorful contrasting advertisements which pop up on the blog showing the clear contrast between "life" and "death" (green or orange), along with exaggerated images to reinforce the idealism. A happy worker in a green field for "life", and a destroyed oil excavation site with Hugo Chavez imposed over top for "death" for instance.

Inside the site is scattered with cherry picked statistics, such as the employment statistics for nearby native communities. It is certainly a clever ploy by Big Oil which more or less renders the environmental aspect and argument moot as no matter what anyone says regarding environmental impact the response has become "well would you rather have 'ethical oil' or 'conflict oil'?". Clever indeed.

What the website fails to mention however is that as long as we have dependence on oil the world will always require conflict oil. Lets put this in perspective, here is a chart showing world oil consumption and production. Do you see the spread between European oil usage and production? How about for North America? Never-mind even about Asia-Pacific, but consider it none-the-less. For this argument we will not look at it as we don't need to. So roughly from that chart, you could say that if Europe and North America didn't import (or export), production would need to increase by what? 20million/day? 30million/day? Well according to Canadian Association of Petroleum Producers Canada's total production in 2010 was 2.8million barrels / day. By 2025 they estimate 4.3!!! (Keep in mind, this is the oil industries estimates, not the *REAL* numbers.).

So here is what I ask you Ezra, how is your argument for Canadian oil relevant at all? The world doesn't just need oil, the world needs conflict oil. There is no magic bullet to make that not so, and no amount of Canadian ethical oil (rated at 1.5million barrels / day in 2010 (World usage = at least 85 / day)) will change that. Do you know why Ezra? Because unlike ethical oil, conflict oil doesn't need $100 / barrel to pretend a profit is coming in.

The oil sands are environmentally damaging and are not financially viable. We don't even know what the untold costs in environment and water usage are. They will never ever ever add up to more than a drop in the world oil usage bucket, because production is inefficient. It requires too much energy to make a barrel of low-quality "oil" from these projects of last resort. Remember when $70 / barrel was "expensive" and enough to make Alberta a profit? What happened to that? now we need $100. What happened is the input costs caught up with the output costs, and we don't want to know what happens if a sudden market move drops oil well below the input costs as it takes time for those price fluctuations to reach production. In other words the oilsands *only* bring in profit during sudden upward market moves in oil up until the time input costs rise due to the cost of oil. Get it?

Conflict oil vs. Ethical Oil is a straw-man argument. The infinite growth economy doesn't care how many people die to fuel it, or how much of the environment is destroyed. All it cares about is fueling more growth, which needs more resources, or the debt pyramid we've sold our kids into will collapse on our heads. You've been warned.

PS: Here is another reason to not buy into ethical oil vs. conflict oil.

* Updated | 08/08/2011: Well it's Monday now. The U.S. S&P downgrade has taken effect in the market; and what do you know, this appears in my twitter feed. Yea, wow. Amazing I know. Get it yet? The oil sands are a MONEY LOOSER. The price CAN NOT climb forever. What is worse: we are selling our resources short, without our own stock or "strategic petroleum reserve". That's right, we have no SPR.

The next Alberta economic boom will be funded by faith

Good day to you Albertans. I haven't written on this blog for quite awhile, in fact I wasn't even sure if I was ever going to blog again. Things are moving too fast now to really spend any significant time on a particular subject however I feel Alberta's economy needs some special attention right now.

Just recently I saw an article proudly displayed on every frontpage: Alberta tops U.S. job creation. Apparently Alberta's job market grew by 22,000 jobs where as the ENTIRE united states only recorded 18,000. Naturally Albertans rejoiced, claiming that boom times were back and economic growth was on the way. Further it seems to be not a reason to be concerned but instead put even more faith the Alberta government is right "waiting for oil & gas revenue to rebound". Anyone remember Ed-TV almost 3 years ago? Anyone remember Alberta's "5 year economic action plan"? Yea, I didn't think so, apparently 3 years into this plan we are still on step 1 "waiting for oil & gas revenues to rebound". So lets look at when they will be rebounding.

Who buys our oil? Who is our largest trading partner? Well it happens to be the U.S. The same U.S. that had the remarkable drop in job numbers, and now today GDP data just kicked the U.S. while already down. One has to wonder exactly where all of this expected economic growth is going to come from? U.S. oil demand continues to stagnate, and lets be honest about how much time it takes for oil infrastructure to be set up for any profitable sales to China or other cross-continental markets. A long time. China certainly is pursuing this option though, and you can trust that China (the largest slave-wage market) really has Albertan's jobs and wages at heart.

Just wait for the day in the very near future where Alberta says "hmm, we really didn't see this coming". Because they will, of this I have no doubt. The forgotten 5-year plan will be revived and extended into a "10 year plan" and by the time Albertan's and the Alberta government take the global economic situation seriously we will not have the funds to do anything about it.

The new Alberta boom is based entirely on faith that Alberta "always has a boom". We simply expect economic booms to be thrown our way, and when we are not in one we are waiting for the next. There is no world-economic data to show any signs of a coming boom for Alberta. Yes, we had more jobs than the U.S., so what? That means a whole bunch of our clients will soon not afford our product. 18,000 jobs for an entire country is dismal, it does not point to an Alberta job boom, it points to a U.S.A. mega-economic failure and this will surely affect the Albertan economy in the not-to-distant future. Faith alone can't sustain us anymore.

Miss Canada 2011

Here we go again, another Miss Canada contest. Leaders debates, campaign roadshows, and probably more time spent in a stylist's chair than your favorite hollywood actor. Is it any wonder we have such low voter turnout when so many Canadians are not even entirely sure how our political system works? Let alone having any faith it works at all?

canada.com

Browsing comments on election articles you often will see statements such as "I'm not voting for Stephen Harper." Well just an FYI, hardly anyone in Canada is voting for Stephen Harper. You would have to be a member of his Calgary constituency. You see here in Canada, we actually don't vote for a Prime Minister, believe it or not. We don't even vote what "party" will be in power. Our MPs vote for these things and it is indeed quite possible to have a Prime Minister elected from a party not in power, as long as the house has faith in the governing body. In simple terms, we elect members of parliament and nothing else.

I know it sounds simple right, and yet here Canada is stuck in this Canada/American party politics, first-past-the-post void. Canadian elections today are more like leader popularity contests, which is funny because it is also entirely possible for the "leader" to not even have a seat in the house. This is why leaders choose a constituency that is highly likely to vote them in and favor "their party". Wouldn't it be embarrassing for Prime Minister Stephen Harper to not get elected to his seat? Yes it *could* happen in our political system. When it comes to the "party system", I believe strongly in what Gerald Celente has to say:

"they're having a party, and you're paying for it." -- Gerald Celente

This election though has had a few interesting turns in events. everyone has heard about Harper throwing students out of his rallies. I personally don't care what he does at his rallies, it is his prerogative who attends and who does not. Whether it represents true democracy or not is debatable but in any case it is not illegal. However, what seems to be getting the good old media white-wash on this is that it is the RCMP doing these background checks:

“I was told the RCMP had done a screening and that perhaps my name was affiliated with something on Facebook or the Internet,” MacDonald told the Star. “Something that made me unfit to enter. They wouldn’t say what it was.”

The RCMP are even complicit in removing media from Harper events:

Since when is it the RCMP's job to work for political campaigns in this manner? Normally we would say things like this happen in a police state but as mainstream media constantly reminds us we are not Iraq and this is not a police state, which leaves me still almost a year later without an appropriate term to call this circus:

Truth of the matter is that Canadian elections are just for our entertainment. None of the parties have any interest in explaining the real way things work. All of them have latched on to this party policy crap which is usually superficial issues that don't affect our overall agenda. Notice how during this election all work for the people has stopped to campaign, but agendas we take part in such as bombing Lybia are going ahead as scheduled. In the end no difference will be made, especially if we go with either the Conservatives or the Liberals who both have publicly stated an intention to sell Canadian sovereignty.

The Cons:

The Libs:

So you see, when it comes to what matters to those in power; on the real issues, they all agree. That is why Ignatieff is not using the G20 public inquiry as an election issue. The liberals don't want an inquiry into the rights abuses, just as much as the conservatives don't. Indeed it was the Paul Martin liberals who created the event in the first place, at which rights abuses have occurred at almost every single event held. The Liberals will focus on the costs though, to give the illusion of opposition. There are many other examples of the singular agenda between the Conservatives and Liberals.

When it comes to the NDP, they will promise the moon to get in power. But once they get in and realize the world economic state what will they do about it? The sad truth is that today, no political "party" or politician has the political will to come out and lay down the situation about the world debt collapse and peak oil even though it's obvious confidence in the economy just isn't there.Take for instance the Liberal Platform fiscal policy which states:

A Liberal government will commit to reducing the deficit to one percent of GDP within two years, down from 3.6 percent in 2009-10. We will set subsequent, rolling targets to continue decreasing the deficit every year after that until the country is returned to surplus. Unless Canada is faced with an unexpected second recession, all fiscal planning will be consistent with this anchor.

"Unless Canada is faced with an unexpected second recession"? How often do you see that on a political platform? Or take Harper's flagship platform promise which might take effect in 4 years if everything is A'Ok economically. Politicians today are running on empty promises, because that is all a politician really has under their belt to offer. They then go and backup their empty statements with propaganda campaigns to keep peoples faith in a political system of all stripes and colors that has screwed them over time and time again. How many politicians does it take to change a light bulb anyway?

Canadians need to realize that we have some serious structural issues that go far beyond our partisan political bickering. Until politicians stop painting the world in rainbows, sunshine and lollipops voter apathy will only go up. Fewer and fewer people believe the tired rhetoric coming out of these people's mouths on a daily basis and I believe this trend will only continue as the world situation gets worse and increasingly contradicts the unrealistic promises in their platforms until one day there will only be one action left to take: facing reality.

Automatic Trading: How the human race has become a slave to market speculation

While not an article on Alberta, I feel this article is important to understanding how markets have started to work everywhere in the world.

Once upon a time the stock market was used for mostly honest investing. It was a vehicle designed to manage an emerging national scale of supply and demand principles. It allowed fledging new industries to embark on capital adventures that would otherwise be impossible because of the amount of resources needed to get started. The market was the needed elixir to solve the old world problem of “to make money, you need money”.

The [free market] system fostered the growth of the economy as it allowed both average and wealthy people alike to invest their money by taking calculated risks with the chance for profit based off investment size and future speculated profitability. While savvy wealthy investors always had an edge, everyone had a chance to reap a reward.

Today the market is a rather different beast. For instance, it is not uncommon for 60%+ of market activity to be completely automated. Those in control of that 60% claim it is not detrimental to market stability or industry. They purport that it is the evolution of stock trading and is another tool in the box. What most of the public are unaware of is that automated trading not only destabilizes the stock market, but in fact obliterates the original purpose of the stock market which is public investing and adventure capital.

My experience in automated trading comes from 3 years of working on a trading engine indirectly for Wall Street. During this time I had Wall Street traders teaching our team personally what they look for on the stock market and what they do when they find it so that I could program their thoughts and have a computer make the same decisions they would, but much faster. When I left the company our prototype automatic trader could send thousands of trading signals per second. This is hundreds of times the speed of Wall Street’s best traders and in fact redefines the entire trading game. This has made automated traders one of the top products in the trading industry and is rapidly rendering the human trader obsolete.

“Why is this important? Why should we be concerned about this new investment marvel?”
The reality is that morally-incapable machines are making decisions that are purely market driven and leave out the value-added human factor that spins off of investments placed in risky but potentially game changing innovation. To illustrate the detrimental impact automated trading has and the potential disaster it represents, it is important to have a rudimentary understanding as to how it works.

An automated trading application see’s essentially two things. It sees a basket of symbols (stocks to trade), and it sees a series of real time market signals (The buys/sells of stocks in the basket). The fact that decisions are made in “real time” is what’s the most important here. The fact that the computer can read an incoming signal, process it, and respond to it before a human trader even sees the signal is what gives automated trading an upper hand; it is also why the stock market has essentially run away from human control. Essentially, by the time now that any human receives information about the stock market, that information is already out of date because 60% of the activity that will respond to that event has already done so. In essence this means machines are leading the market, with traders making decisions based on the decisions made by machines to attempt to pull what little money remains from those transactions. You can also imagine that if the traders are essentially along for the ride determined by the machines, investors are holding onto the back of the rollercoaster praying the machines don’t take another dive.

True investing has become a thing of the past. Regardless of whether you believe a company will do well or even if every single person that comprises the 40% of market activity believes a company will do well, should the machines disagree, then that company will not be getting a rise to its stock price. The reason of course is that the weight of the machines versus the weight of the people is now lopsided in favor of the automated trading at current ratio of 60% v.s. 40%.
Essentially, computers now have more power to speculate future market events than the humans in control of the events do. One of the main problems with this is computers will always make decisions based on a “sure thing”. Humanistic and moral considerations never factor into the machines decision making process.

Consider the computer identifies two corporations: Weapon corporation A and Medical corporation B; To the computer, it does not see a “weapons” corporation and it does not see a “medical” corporation, it sees two stock symbols and considers them to be equals. It has no idea that the weapons symbol makes weapons. It is seeing a set of 3-6 different letters that it can cross reference with news articles, other symbols, and that symbols history. So the computer starts processing on this symbol and finds many references to it. It finds a good stable history of price increases and see’s patterns emerging that this symbol is likely to go up in the near future. The computer has no idea that reason these patterns are emerging is because a new war is breaking out among third world nations. It goes ahead and starts *long positions on the symbol, thus giving the weapons manufacturer more money to go ahead and propagate the war with. At the same time, the computer is dealing with the symbol for this new start up, Medical Corporation. This companies symbol has little in the way of references, its history is flat and unstable, and is not a good candidate without the emotional perspective to go long on. The computer once again has no idea the reason that the Medical corporation is not doing well is because they are dealing with high end, test phase medication to cure aids or cancer (keep in mind the example is fictitious, it is done to illustrate why decisions are made) and would be
spending far more money than they are currently making (again, the need money to make money logical problem). The computer, seeing this company as a bad bet will not put money towards it, and in fact may decide it’s a good bet for losing money and short the stock (with the long term effect of bringing the companies stocks down when 60% of the market is shorting it). The unmanned, morally unbound computers have the power to put the medical corporation out of business. The computer does this because what they are working on is not a sure thing, and their historical pattern would show this.

The problem is that independent innovation, which is normally funded by investors, can be and is destroyed by automated traders with no concept of the benefit of advancing technology that advance humanity. That example “medical corporation” could be any type of corporation whose direction is innovation from clean energy, aqua-culture and nanotechnology; all could be regarded as risky and therefore potentially shorted .

As it becomes self-evident that humanity is nearing the peak of the oil-age, future technologies are not going to be luxurious experimentation but imperative undertakings tied to establishing a sustainable existence and quite likely the future of mankind. The automated market will starve innovation based corporations for investment funds because the computers will decide it is a bad bet. The traders and investors must go along with that decision or risk huge losses since the computers carry more trading weight so the stock will likely be valued less. Consequentially it will be humanity who suffers. Innovation based corporations could cease to benefit from the corporate model and be relegated to finding private investors which would drastically reduce the potential money going into them.

Communities are being subject to the whims of an automated market that is likely to favor corporations that make weapons , cigarettes and alcohol among many others because they’ve always been good bets in the market historically, despite being detrimental to human progress.