In a presentation today, Contango Oil & Gas CEO Kenneth Peak stated that the economics of oil and gas exploration in shallow Gulf of Mexico waters have improved significantly compared to 2008 conditions due to a dramatic decrease in dayrates for the jackup rigs used in shallow waters that has more than offset moderate increases in administrative and insurance costs. Mr. Peak also spoke at length about the new permit process in place and Contango’s efforts to adapt to changing regulatory requirements. Read this article for more details.
The mid-term election results appear to match what market participants expected in the days leading up to voting yesterday. We will refrain from political commentary other than to make the observation that there is a difference between “benign gridlock” when the country’s course is essentially sound and gridlock when our fiscal situation is heading for disaster — which to us seems more like a suicide pact than a political strategy. Meanwhile, the Federal Reserve is set to announce the details of its second round of quantitative easing later today. QE2 is essentially a euphemism for printing money, which in our modern economy takes the form of the Federal Reserve buying treasury bonds of intermediate to long term maturities. Read this article for more commentary.
According to the Financial Times, Google is planning to construct a price index that could eventually serve as an alternative to official government statistics. While the Google Price Index (GPI) is still a work in progress and only tracks web-traded goods, the potential for expansion into other sectors of the economy could provide a more complete picture of inflation in the future. If fully developed, the GPI may keep government statistics honest in periods of higher inflation.
There probably is no other prominent American who is less suited to the sound bite than Berkshire Hathaway Vice Chairman Charlie Munger. In any particular appearance, specific comments made by Mr. Munger can be collected in a manner that leads to a highly unflattering overall portrait. Charlie Munger does not need any defenders, and we do not necessarily agree with or endorse all of his views. Regardless, it is interesting to make a few observations regarding the reaction to his recent lengthy appearance at the University of Michigan. Read this article for more details.
Warren Buffett and Bill Gates unveiled The Giving Pledge initiative in June which launched one of the most ambitious philanthropic initiatives in history and has the potential to generate hundreds of billions of dollars in gifts over the next few decades. Both Warren Buffett and Bill Gates have already pledged the vast majority of their wealth to charity and the goal of the pledge is to encourage other billionaires to do the same. Surprisingly, the initiative has generated a significant amount of controversy among those who believe that it is politically motivated. Read this article for more details.