Ed’s Daily Notes for December 17th   1 comment

Bloomberg: North America to Drown in Oil as Mexico Ends Monopoly

The flood of North American crude oil is set to become a deluge as Mexico dismantles a 75-year-old barrier to foreign investment in its oil fields.

Plagued by almost a decade of slumping output that has degraded Mexico’s take from a $100-a-barrel oil market, President Enrique Pena Nieto is seeking an end to the state monopoly over one of the biggest crude resources in the Western Hemisphere. The doubling in Mexican oil output that Citigroup Inc. said may result from inviting international explorers to drill would be equivalent to adding another Nigeria to world supply, or about 2.5 million barrels a day.

That boom would augment a supply surge from U.S. and Canadian wells that Exxon Mobil Corp. (XOM) predicts will vault North American production ahead of every OPEC member except Saudi Arabia within two years. With U.S. refineries already choking on more oil than they can process, producers from Exxon to ConocoPhillips are clamoring for repeal of the export restrictions that have outlawed most overseas sales of American crude for four decades.

“This is going to be a huge opportunity for any kind of player” in the energy sector, said Pablo Medina, a Latin American upstream analyst at Wood Mackenzie Ltd. in Houston. “All the companies are going to have to turn their heads and start analyzing Mexico.”

Keep in mind, it will take more than a few years for all this oil production to come online. Even when it does, the world’s oil situation could look very different. I would call this a good thing, but the affect on oil prices is too far away to determine.

USAToday: GM’s CEO rejects repaying Feds for bailout losses

Here is GM’s gratitude:

The General Motors bailout may have cost the government $10 billion, but GM CEO Dan Akerson rejects any suggestion that the company should compensate for the losses.

He says Treasury officials took the same risk assumed by anyone who purchases stock.

“I would not accept the premise that this was a bad deal,” Akerson said during a question-and-answer session at the National Press Club in Washington. He also said the government’s $49.5-billion aid to GM helped save billions of dollars in tax revenue and government social services.

And I will show my gratitude to GM by never buying a GM product for the rest of my life…

Fox News: Judge deals blow to NSA phone data program

The best news I’ve heard in a while:

A federal judge ruled Monday that the National Security Agency’s bulk collection of phone records likely violates the Constitution, in a major setback for the controversial spy agency.

U.S. District Court Judge Richard Leon granted a preliminary injunction sought by plaintiffs Larry Klayman and Charles Strange. However, he also stayed his decision “pending appeal,” giving the U.S. government time to fight the decision over the next several months.

The judge wrote that he expects the government to “prepare itself to comply with this order when, and if, it is upheld.”

The ruling was the first major legal defeat for the NSA since former contractor Edward Snowden began exposing secrets about the NSA’s data collection over the summer.

…”The Fourth Amendment typically requires ‘a neutral and detached authority be interposed between the police and the public,’ and it is offended by ‘general warrants’ and laws that allow searches to be conducted ‘indiscriminately and without regard to their connections with a crime under investigation,'” [Judge Leon] wrote.

He added: “I cannot imagine a more ‘indiscriminate’ and ‘arbitrary invasion’ than this systematic and high-tech collection and retention of personal data on virtually every single citizen for purposes of querying and analyzing it without prior judicial approval. Surely such a program infringes on ‘that degree of privacy’ that the founders enshrined in the Fourth Amendment. Indeed I have little doubt that the author of our Constitution, James Madison, who cautioned us to beware ‘the abridgement of freedom of the people by gradual and silent encroachments by those in power,’ would be aghast.”

The Obama administration has defended the program as a crucial tool against terrorism.

But in his a 68-page, heavily footnoted opinion, Leon concluded that the government didn’t cite a single instance in which the program “actually stopped an imminent terrorist attack.”

“I have serious doubts about the efficacy of the metadata collection program as a means of conducting time-sensitive investigations in cases involving imminent threats of terrorism,” he added.

I view the NSA program of collecting metadata as the difference between the U.S. as a democracy, and the U.S. as an Orwellian-style totalitarian state.

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Posted December 17, 2013 by edmcgon in Market Analysis, News, Politics

One response to “Ed’s Daily Notes for December 17th

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  1. Here is a good read if you are ever tempted to believe our politicians can enact laws (or want to) that do what they tell the public they are suppose to do:
    http://www.bloomberg.com/news/2013-12-17/accidental-tax-break-saves-wealthiest-americans-100-billion.html

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