2009 look see at Simmons &Co.

[slow_dazzle]

 

After all, the same set of guru's  as a group have run US foreign policy  since WWII.   From Nitze to now is one unbroken line of global dominance in ALL areas policy thinking.  

Yes. they knew back then and they know now. Hubbard might have been ridiculed openly. His message was almost certainly not new back in the 1950's; they would have known and planed accordingly. This is one of my pet peeves. People assume that we amateurs are the only ones who know. Bollocks: if we know now, they knew back then.

If you want a dynamite examination of the whole problem read the first chapter of Transformation of War by Martin Van Creveld.   This is now a required reading book for every officer in most  military establishments.

The name is familiar. I'll look the book out and read it.

Nope, the whole problem has been a hot button since WWII geopolitically.

Echoing what we have discussed already: if we know, they knew. Anyone who thinks otherwise is dreaming. The real question is how they have planned their response. I have a view on that question that I'm not posting here.

Thanks jeromie. To quote Oscar Wilde, "The truth is rarely pure and never simple".

[Jeromie]

All plans are obsolete from the first hours of battle is a very old expression.   Even more importantly, fighting the current war based on the past war is a proven concept for insuring loss to your side.   

It was apparent to me that the failures in Iraq signaled the end  of traditional flexible response.  From that point on, the US must develop it's own internal alternate energy sources and those of it's expected area of domination... The America's or face military  challenges  without proper logistics for the nation and it's allies.    From that point on,  every internal energy source became key.  War is now finwar , especially after a mutual collapse that was not anticipated globally. Here was the real result of fighting the next war based on the old war as metaphor.

The state backs every unconventional source to the hilt even if it is surreptitious. Remember, who was on Cheney's little oil commission back in 2001?   They decided a lot of things. That is obvious. They also got rapped in the head too and had to adjust     their policy plans and implementation. Plans must always be very flexible. Adaptability is the name of the game.

[quick]

Plans must always be very flexible. Adaptability is the name of the game.

This is why I wrote " BAU is dead and I just hope a die off wont get all of my family tree due to the steps I and a few others in my family have taken. "

I and my family mean squat to TPTB and their ' flexible/adaptable ' plans !!

I think it wise for everyone to take this type of attitude and stop thinking government will provide anything to anyone past this summer or next !!

[forager]

Great thread Jeromie. Thanks for putting in the work. It looks like you are completing the puzzle here.

[Jeromie]

Thanks everyone.  Everyone needs to remember that investment banking deal making is almost totally a relationship business.  The players on both sides of a syndication must know and trust the people in the middle.    Simmons has been involved  a lot with people at Morgan and Deutsche  Bank.   This is from the top guy down to the people who buy his deals. The other side of the equation is those seeking deals.  They trust the middle to deliver and Simmons is an oil patch guru. That means close relationships to secure the deals. This is all clubby shit from  Dimon at Morgan to the people at Chesapeake  or XTO  and so  forth.    What do you think the explanation is when the XTO guy or the DB person asks  " Just what are Matt's aim's with his books and  lecture circuit material?" Now just what would the  answers be from all the Dilbert's and Pointy Hair's at Simmons & Co. International?.      He does seem to lack business in Saudi though?

[Pegasus]

Yeah thanks Jeromie I think I learned more in this thread than I have researched in the last year. 

[The Black Knight]

"As you  know, I see the US running out of effective ways to pay for imports. In simple terms we run out of ability to import in excess of our exports in any major way. That could be a 2009-2010 happening.   I regard North America as a single survival unit, thus Canadian imports to the US and the reverse are  survival  wash out.  Circumstances will dictate a fixed exchange in the US.

Will new infrastructure be in place enough to offset decline?   I do not know, but circumstances dictate again a geopolitical response along with a very weak dollar."

I'm not sure Jeromie, that most here understood or comprehended the gravity of such a statement... We touched on this a couple months past. What would the "geopoliticial response" be? This was very much on the minds of those posting on Hanson's Lists towards the end and we held the topic for perhaps a couple of months... Ok, for starters, time to get everybody on board what is meant by "geopoliticial" and a couple of recent theories revolving around this concept... (just so everybody is on the same page, so to speak...) THIS, is where the shit will very likely hit the fan TSHF...

http://en.wikipedia.org/wiki/Geopolitics

Geopolitics is the art and practice of using international political power. Traditionally, the term has applied primarily to the impact of geography on politics, but its usage has evolved over the past century to encompass a wider connotation.

In academic circles, the study of Geopolitics involves the analysis of geography, history and social science with reference to spatial politics and patterns at various scales (ranging from the level of the state to international). It examines the political, economic (see geoeconomics) and strategic significance of geography, where geography is defined in terms of the location, size, function, and relationships of places and resources.

One of my favorites...

http://en.wikipedia.org/wiki/Clash_of_Civilizations



"Huntington seems to fall in the primordialist school, believing that culturally defined groups are ancient and natural, however his early work would suggest he is a Structural Functionalist. His view that nation states would remain the most powerful actors is in line with realism. Finally, his warning that the Western civilization may decline is inspired by Arnold J. Toynbee, Carroll Quigley, and Oswald Spengler."

and an a opposing view...

http://en.wikipedia.org/wiki/The_End_of_History_and_the_Last_Man






    

[Jeromie]

I see that geopolitical response being a forced pullback of the US from any actual attempts at enforcement of superpower status. The  presumption died last year.    At best , for the US , I see a  settlement of energy " entitlements" in the next year depending on the  outcome of  political solutions to the US financial system breakdown.    The US, of course, is more dangerous now than it has ever been. It is geopolitically wounded and very  painfully wounded at that.  Thus the best case energy settlement is  Russia regaining her old Eurasian hegemony  in a very muted but effective way. Russia controls and allocates energies in central Eurasia.    China gets a big piece of the pie and controls what China has already secured plus a muted energy  hegemony in Iran. This is all very loose, that is why it just might work.    The US keeps A hegemony over the Persian Gulf and  most particularly gets a free hand  in the America's  so long as the US allows a free hand quid quo pro.    On that basis, the US exits Iraq and the three  regional hegemon's warily cooperate with each other.


 As to the financial problem, the US surreptitiously allocates it's imports into the US while moving  headlong to reduce foreign exchange from energy. Hence, the absolute need to develop  energy sources inside North America and heavily reduce imports of energy from other areas  outside the America's.  Russia gets it's  great respect back . China reacquires the great face  it needs. The US gets to minimize the loss.

Absent such a quid pro quo in the context of financial system righting, we face a major disaster and so does everyone else in the world.   Otherwise,  why would every central bank in the world of consequence have floated the Federal Reserve Banks a trillion dollars directly and who knows how much Treasuries in actual totals. We have no idea how much is through private owners as nominee's. 

They are all  in it together and the minimum price is an end to the superpower pretension.  No more  boss of all bosses  stuff.   

[The Black Knight]

"I see that geopolitical response being a forced pullback of the US from any actual attempts at enforcement of superpower status. The  presumption died last year. "

You bet, Jeromie. I'll settle with what you're hoping for! I do think the Obama administration, is trying to "right some wrongs". I'd be extremely happy with the "quid quo pro", in the spirit of cooperation. If that cooperation cannot be achieved, we both know what those consequences might be. People should also understand, that this will undoubtedly lower our "standard of living", in the terms most people believe this to be, consumption... We could be feeling this transition, even now...

I just hope, that we (the world) can pull out of this downturn in time...Meaning, can China and Russia (especially Russia) make a reasonable recovery before chaotic situations begin to arise? For that matter North America? We don't know how deep a hole we're falling into and it appears this is only being witnessed and not managed, as of yet. The "bottom" had better be in sight for some regions around the world, or the "have nots" will have no other choice but to come knocking! (and not politely)

[Jeromie]

My original post has the  wrong revenue numbers for  Simmons.  I misread the value of the mergers for a different item one line above.   They did $16.5 bn in activity   Thus at 4 % , their total value would be $66 million.     Thus, if Simmons wound  up with a net of 10 % , his take home would have been $ 6.6 million.     On reflection though,  Simmons and  Company  must do a whopping consulting business too where they  advise  their clients in other syndications they do not participate in directly. They sell the knowhow about dealing with the really big guys themselves. How much?  It must be a few billions , at least.

Damn , the bad eyes do get in the way. They still did the 46 transactions they list in the detail sections of their website.

[The Black Knight]

I suppose, what really has me rattled is contemplating that North America (the world's largest economy indeed which effects the whole world) has just witnessed it's "limit to growth". That is, a turning point, a transition from upward to downward... Much like Japan (world's second largest economy) experienced almost 20 years ago. If this is the case, then it's reasonable to believe that the U.S. will never be able to repay debt owed to other countries having only "partial recoveries" such as witnessed in Japan.

It may be a bit presumcious on our part to think these other countries would "forgive" us... However what other reasonable alternative do they have?

Many people liken the U.S. to that of Rome. When Rome fell, the victors just didn't pick right up where Rome let off, it brought down an entire civilization, and many of it's advances for hundreds of years.... Could something like this happen again? For one, I'm glad North America is a "island" with many miles of ocean in between those whom may be/become our enemies...

[Jeromie]

As I often have said,  return Treasuries to legal tender status as they mature.  They get live money to spend in the US. We control the prices and what they may be.  Treasuries are payable in Dollars. That is the same dollars  if the dollar index is 80 or 40. Dollars are dollars.  Last resort after a default. After default it is a choice between sovereign repudiation  or legal tender. The sovereigns  choice.  If you cannot pay  on a past basis, the sovereign pays on a self adjudicated basis. That is the impress of sovereignty. The treasury itself is the same as depositing Federal Reserve Notes.   In between the rock and a hard spot leaves only these two choices. That or roll over forever.

[quick]

With geopolitics, enter the likes of Iran and Pakistan. The world is in a mess. there are so many factions that no one plan of action can cover all the bases which is why I'm sure Jeromie said " Plans must always be very flexible. Adaptability is the name of the game. "

A miss step by anyone of the geopolitical players changes the complexion of the game.

I'm sure that is why The Black Knight said " I'm not sure Jeromie, that most here understood or comprehended the gravity of such a statement ". I think this understates the gravity of the situation and is a prime reason why I read here on a regular basis.

My purpose here is to gather information from every source and to formulate a survival plan for the worse case scenario. Unfortunately - surviving the worst case scenario might not be possible with planning. Maybe with luck.

The very worst case is a nuclear incident caused by a rogue state like Pakistan which mushrooms ( no pun intended ) into something much worse.

Really bad would be Iran closing the Straits of Hormuz and the US without enuf oil to run its military machine in the middle east for the length of time needed to ensure oil from that part of the world.

bad will be an un-controlled die off, due to something similar to the closing of the Straits of Hormuz causing a lack of oil to grease the North American wheels of industry/agriculture.

What seems possible if everything goes right,  will be a controlled die off caused by shortage of oil due to the lack of credit ( as jeromie outlined ) and a lack of alternatives in a timely manner to fuel the American economy which will have consequences enuf for everyone in NA.

Best would be the old BAU - But we all know that ain't gonna happen.

[Jeromie]

 With  Pakistan we get to the current bursting boil.  All three hegemon's  , from behind the scenes need to act in concert here.    But they have an immense problem in open source warfare.  They come to the real test of conventional forces . They excise the Taliban no matter the  so called collateral damage to civilians or they put the Taliban in power with a leash around the collar.    Right now though it looks like the it might be the first option. That is obliteration of the Swat Valley.   The lesson will be that conventional forces are no longer capable of obliteration of open source forces. They are down to the Roman Option which will not win either, as I see it.  So they leash the Taliban and put it in power in their own chickenshit  state.    That will scare the shit out of the Iranians, especially with a new Baluch state . . Bust up Pakistan and put the heat on  India.    I wonder if this thing was intentionally allowed to blow up!

As for the nukes, three nuclear powers jointly end that problem.   

But , fast moves required here that work together and do not cancel each other out.    It has been brewing for years.

[hard rain]

Interestingly, I think the geopolitical's have been on  this for over a generation.    If you delve deeply into geopolitics, it is apparent that the single greatest frustration was the fact that the USSR was an exporter of petroleum  with huge gas reserves and the US was  no longer an exporter of petroleum and had now entered light oil   irreversible  decline. Even in 1942, there was considerable angst over  US exports to supply WWII oil needs.    At all costs US policy was designed to insure the US always had a balancing of petroleum  to offset the USSR advantage.  

My  cousin was  a naval  intel guy at the WH during the Carter Administration .  Oil was the constant denominator.    Obviously, finding value in  North American unconventional  gas and oils was a key parameter.  Forcing prices to accommodate these resources would be a very key national security policy. After all, the same set of guru's  as a group have run US foreign policy  since WWII.   From Nitze to now is one unbroken line of global dominance in ALL areas policy thinking.   And oil was the single greatest logistics problem.   That became   ultra important from the day the US forced flexible response as NATO policy .   That was 1956, if I  remember  correctly.  Flexible response as military policy  to contain the parameters of mutually  assured destruction has been  responsible for at least 2/3rds of military expenditures since the fifties.   All the military guru's make that point. If you want a dynamite examination of the whole problem read the first chapter of Transformation of War by Martin Van Creveld.   This is now a required reading book for every officer in most  military establishments.

Nope, the whole problem has been a hot button since WWII geopolitically.

Of course US govt intel "gurus" have known about it (oil depletion and US vulnerability) for years.  But what have they done about it? If they had such a handle on it why didn't they have any real policy of energy conservation. Why did they let the automobile and highway construction, the great suburban buildout, run amuck up to the present day? If they were so well informed, why didn't they listen to Al Gore's professor in the 60's about carbon build-up and global warming? Why did they kill the electric car and the urban electric trams? Why did they stand by while the railroads were dismantled?

Lots of other questions could be asked. But the point is that they made utterly wrong policy decisions and wasted decades that could have been devoted to dealing with this problem.

Sure, they attempted to achieve global military dominance and sole superpower status. But this is no lasting solution either, and wasted millions of lives and trillions of dollars. Now we see the futility and rely on "flexibility" and "adaptability". What a waste of power, opportunity and "intel"!

Why did these men of such intelligence and good will make all these disastrous decisions? Could it be the profit motive, a systemic failure, a flaw of capitalism and even its adversarial ideologies? Hubris? Flawed human nature? Without even trying to answer, simply observe that this is worldwide collapse, across ideological, racial and national lines. It is basically the collapse of modern industrial civilization and its over-reaching.

Of course the three superpowers will have to carve up the globe and especially the volatile mideast in order to avoid regional and global conflagration. But have no illusions, that these "superpowers" are as flawed and internally weak as the US. For example, their degree of environmental degradation and destruction is much greater than the US. They are basically on the same (failed) developmental course as the US.

To recognize this is not nihilism, as you have accused in the past, jeromie. Obviously something will survive this collapse of civilization. People here at this forum are preparing to survive this transition period in all kinds of ways.

Clearly you question the validity of peak oil. NG, alt fuels, Matt Simmons' consulting, or Barack Obama, or even the whole lot will not save the day. Your details and arguments on these subjects miss the point.

Your postings are always informed and interesting, but I have always thought that you miss the "doom" that this site is supposedly all about