Stock Markets and Oil Rigs (5/13/10)

Here is where I shall vent my spleen on whatever political topic might cross my mind on a given day. Comments or responses may be posted to whatever forum might be appropriate to that particular topic.

Stock Markets and Oil Rigs (5/13/10)

Postby Ferguson Foont » Thu May 13, 2010 8:20 pm

Another drilling rig has collapsed, this one off the coast of Venezuela. If anyone tells you that offshore drilling is safe, the appropriate response is to laugh in their faces and never regard anything they ever say again in their lives as the truth.

Fortunately the Venezuelan oil rig's collapse did not cause any environmental problem. This may have something to do with Venezuela being less hostile toward regulation of oil companies and their contractors/suppliers than we are, or maybe it was just luck. In any event, it stands in increasingly stark contrast to the effects caused by the collapse of the Deepwater Horizon.

All attention lately has been focused on trying to stop the sea floor gusher of oil that continues to feed the monstrous slick. It will be a relief when the oil pouring into the Gulf waters is finally stopped, but there seems to be some idea that this will be the end of the environmental threat here. Nothing could be further from the truth.

The oil slick now covers an area bigger than several of our entire states. It contains so much oil spread over such a vast area that there is literally no way within human capability to contain it or pick it up. There is no hope for any effective cleanup. Nearly all of it will eventually wash ashore somewhere, most likely on American beaches in Texas, Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina, North Carolina, and possibly (but less likely because of the course of ocean surface currents) Virginia and Maryland. This may become, indeed almost certainly will become, the greatest man-made environmental disaster event in American, and possibly in world, history, even if the "leak" is completely plugged today.

Drilling off the mid-Atlantic seaboard is the stupidest idea anybody ever had. Nothing Barack Obama has done has made me question his knowledge of science to the extent that his brief flirtation with this idiotic, potentially catastrophic idea has done (although his pending cancellation of the American manned spaceflight program comes pretty darn close).

Now, last Thursday we had a bit of fun (if you consider the disappearance of trillions of dollars of American wealth into nothingness in just a few minutes is a barrel of laughs) on the stock market. Many companies including Procter & Gamble lost well over half their paper value, and the value of some, most notably the highly successful and quite well solvent consulting firm Accenture, saw their shares fall literally to ZERO, theoretically wiping out their entire value. The market overall lost over 900 points in about half an hour. It then recovered almost all of it in the next fifteen minutes. To put it mildly, this was weird.

At first this was attributed to a typographical error in which some broker typed a "B" rather than an "M" to be followed by "illion shares" in a sell order and had the trade actually go through. This explanation was, of course, complete and utter nonsense, but it was reported so widely that it has very nearly become common knowledge.

Then the explanations began to involve the trend toward market decentralization, where the "circuit breakers" that come into effect slowing down or actually stopping trading when the market fluctuates too wildly that have been implemented at NYSE can be circumvented by trading on various satellite stock exchanges instead. This certainly played a part, but it was only the path that was taken and is not even potentially the triggering event itself. They still have not released any genuinely plausible explanation.

I believe it would be more precisely accurate to say that they have not yet "concocted" any plausible explanation. I strongly believe that investigators know what happened, but for obvious reasons they are refusing to say so in public. I believe, almost to the point of being certain of it, that this was a cyber-attack, probably originating in China or Russia, or even an American bank or brokerage house, but it could have originated anywhere in the world, and its purpose was to test a technique to be employed in earnest at some later time. I believe that the test was highly successful.

Think about this: If this had been the result of a typo, someone would have sent us tumbling down long before now. Whatever did this wasn't easy to achieve or it would have been done already. Lots of people all over the world hate our stock market, and lots of others could stand to profit unimaginably from such an event if they knew in advance that it was coming and when.
Republicans whine and Republicans bitch: "Our rich are too poor, and our poor are too rich."
User avatar
Ferguson Foont
Posts: 1786
Joined: Fri Jun 27, 2003 12:22 pm
Location: Silver Spring, Maryland

Return to Foont's Editorials

Who is online

Users browsing this forum: No registered users and 0 guests