Thank goodness this episode dropped as I was waiting for great insights from Harley, Mike and Lyn. Fantastic episode and great insights on the macro of the oil markets in 2022 pre recessionary era.
Lyn is a titan, her insights are clear, concise and always backed up by plenty of evidence. So many go on gut and personal experience ignoring the facts that disagree with their intuition.
2 years later, 2 things that stood out to me in this conversation was the expectation that we might already be in recession if not by early 2023, we all felt this 2 years ago. We did not expect the 2023 AI boom. Lyn in yhe next 5 years is potentially in the realm of expecting higher oil as far as 200 dollars per barrell. Here in 2024 we visited 65 dollars per barrel, rallied to 75-ish, and now we're back down at 62 per barrell. I'm just considering the developments that occurred since then, it's fascinating and fun to revisit these chats. Recently became more of a Mike Green fan, so these talks are still great to hear and reflect on!
I find it a little close minded of him tbh, Mike is a better man than I am to deal with his flippant disregard re government guarantees and sponsorship given to industry 30s-40s. If you have an ideological opposition to that involvement, sure; air your grievances, but don't be an obscurantist when we are all trying to get to the truth of the matter.
I wonder if Lyn knows that she’s the smartest person in the room? Very intelligent and Very Articulate! I would love to 2hrs to pick her brain on the big picture in this crazy economic times! Does she have a website or UA-cam channel?
Great show ! But makes me crazy when people say QE isn’t money printing , doesn’t go in the economy . QE is government debts bought by the fed by lowering interest rates . Without QE government couldn’t borrow so much as such low interest rates , so they can borrowed more and that money borrow is directly spend into the economy by the government right ? By lowering artificially interest rates to permit government borrowing more cheaper , it reduces the cost of borrowing for houses ! Propping houses up so people borrow more to buy an overvalued house and they uses equity on their houses to spend ! Rich get super rich since stock goes up with low interest rates . QE not inflationary ? not money printing ? Well it certainly help, regardless semantic …
17:57 No, Mike. They can’t just easily guarantee profits on oil wells. To some degree they can but only for a time. It’s far more complicated than that. 1) Oil wells take a lot of time and money to get set up and running, and that is providing that.. 2) High quality oil must be there to begin with. 3) Part of that quality dynamic is that the oil must be profitable and cheap enough to produce, since the market won’t necessarily develop wells from oil that costs, say, $200 a barrel to produce. Governments can only expand supply if the raw materials to those supplies are there at a cheap enough price to begin with. Money does not create raw material resources. The world peaked in conventional oil some time ago. And the world peaked in oil discovery in the late 1960’s. DESPITE spending more on oil exploration, and spending more on technology and developing better technology to more effectively use and extract oil, we are finding less. Much much less. This has been the trend since the late 1960’s. And the US Shale oil is in decline. We exploited the best wells first and they have massive decline rates, far faster than conventional oil. So the US will be heading back to its peak oil days now. By the 2030’s, the world is likely to have its final oil peak. And economic growth is tightly/highly correlated with oil production and consumption. A contraction in oil production and consumption WILL lead to economic stagnation and decline. On top of finding less oil plays (as demand for oil increases with time), since it is a finite resource, the large conventional oil plays are already in decline. Oil is declining at an annual rate of about 6%. So just to maintain our standard of living we need to be fining more Saudi Arabia’s. That ain’t happening. So how can the government create supplies indefinitely? They can to some degree, provided the cheap energy resources are the there to begin with, since it takes energy for all economic activity, whether supply or demand side. The ‘law’ of supply and demand are nature work within the confines of the laws of physics, thermodynamics. In the future, we will run more into supply shocks because the raw martial won’t be there to readily meet demand due to scarcity of cheap material of which oil is used to produce and mine, because of peak cheap oil itself. The US was just developing and producing its cheap oil reserves when it was doing supply side economics during the WW2 era. Then the US peaked in that cheap oil in the 1970’s. We could do supply side economics better because we had the cheap energy to do so. Global population is not growing in a meaningful way, BUT the conventional oil plays are in decline. So even if we maintain the current population indefinitely into the future, and demand stayed constant, oil supply would be in decline over the long term. And even worse, you’re not creating the GDP growth to bring the much more expensive oil. So yes, the developing world can’t afford expensive oil, and even developed economies will cut back consumption with expensive oil, but going into the future, we aren’t replacing the oil to make up for the current decline rates! The developing countries will sadly eventually be crowded out from getting the oil that they need. The western powers will eventually fight with each other and beak up alliances because they’ll be fighting over the remaining energy resources. The age of growth as we have known it to be is essentially over.
What's Lyn's 200 USD oil call based on? Just lack of supply? Does she factor in any EV/ E-scooter/ E-bike adoption in her view? Interesting discussion tend to side with Mike.
Bassman is so annoying as usual. Nothing can budge him, everything is the FED, everything is money printing. He's not gonna zig-and-zag well it's all about that! wtf
I completely agree with Mike on we need to increase supply, but the US is incapable of doing that in 2022, because of the culture shift away from work ethic and the fact we shifted society away from a labor/production workforce to a desk job financial workforce and producing very little.
Thank goodness this episode dropped as I was waiting for great insights from Harley, Mike and Lyn. Fantastic episode and great insights on the macro of the oil markets in 2022 pre recessionary era.
Lyn is a titan, her insights are clear, concise and always backed up by plenty of evidence. So many go on gut and personal experience ignoring the facts that disagree with their intuition.
2 years later, 2 things that stood out to me in this conversation was the expectation that we might already be in recession if not by early 2023, we all felt this 2 years ago. We did not expect the 2023 AI boom.
Lyn in yhe next 5 years is potentially in the realm of expecting higher oil as far as 200 dollars per barrell. Here in 2024 we visited 65 dollars per barrel, rallied to 75-ish, and now we're back down at 62 per barrell.
I'm just considering the developments that occurred since then, it's fascinating and fun to revisit these chats. Recently became more of a Mike Green fan, so these talks are still great to hear and reflect on!
it is rare for me to find someone i like in financial podcasts, but Harleys disagreeable and no bs personality is refreshing
I find it a little close minded of him tbh, Mike is a better man than I am to deal with his flippant disregard re government guarantees and sponsorship given to industry 30s-40s. If you have an ideological opposition to that involvement, sure; air your grievances, but don't be an obscurantist when we are all trying to get to the truth of the matter.
@@jayk3551 what wrong conclusion ?
Excellent discussion especially Lyn's bullish insights on energy.
This was SO good!
Hahaha ... you did so well, Lyn. I work in a male dominated industry and I've sat through plenty of meetings like that! 😆
3 mins in and I already love this haha!
you wife said this......last night.
Another outstanding presentation - thx for doing this for free!
I wonder if Lyn knows that she’s the smartest person in the room? Very intelligent and Very Articulate! I would love to 2hrs to pick her brain on the big picture in this crazy economic times! Does she have a website or UA-cam channel?
Great show !
But makes me crazy when people say QE isn’t money printing , doesn’t go in the economy .
QE is government debts bought by the fed by lowering interest rates .
Without QE government couldn’t borrow so much as such low interest rates , so they can borrowed more and that money borrow is directly spend into the economy by the government right ?
By lowering artificially interest rates to permit government borrowing more cheaper , it reduces the cost of borrowing for houses !
Propping houses up so people borrow more to buy an overvalued house and they uses equity on their houses to spend !
Rich get super rich since stock goes up with low interest rates .
QE not inflationary ?
not money printing ?
Well it certainly help, regardless semantic …
17:57 No, Mike. They can’t just easily guarantee profits on oil wells. To some degree they can but only for a time. It’s far more complicated than that.
1) Oil wells take a lot of time and money to get set up and running, and that is providing that..
2) High quality oil must be there to begin with.
3) Part of that quality dynamic is that the oil must be profitable and cheap enough to produce, since the market won’t necessarily develop wells from oil that costs, say, $200 a barrel to produce.
Governments can only expand supply if the raw materials to those supplies are there at a cheap enough price to begin with. Money does not create raw material resources.
The world peaked in conventional oil some time ago. And the world peaked in oil discovery in the late 1960’s. DESPITE spending more on oil exploration, and spending more on technology and developing better technology to more effectively use and extract oil, we are finding less. Much much less. This has been the trend since the late 1960’s.
And the US Shale oil is in decline. We exploited the best wells first and they have massive decline rates, far faster than conventional oil. So the US will be heading back to its peak oil days now.
By the 2030’s, the world is likely to have its final oil peak. And economic growth is tightly/highly correlated with oil production and consumption. A contraction in oil production and consumption WILL lead to economic stagnation and decline. On top of finding less oil plays (as demand for oil increases with time), since it is a finite resource, the large conventional oil plays are already in decline. Oil is declining at an annual rate of about 6%. So just to maintain our standard of living we need to be fining more Saudi Arabia’s. That ain’t happening.
So how can the government create supplies indefinitely? They can to some degree, provided the cheap energy resources are the there to begin with, since it takes energy for all economic activity, whether supply or demand side. The ‘law’ of supply and demand are nature work within the confines of the laws of physics, thermodynamics.
In the future, we will run more into supply shocks because the raw martial won’t be there to readily meet demand due to scarcity of cheap material of which oil is used to produce and mine, because of peak cheap oil itself.
The US was just developing and producing its cheap oil reserves when it was doing supply side economics during the WW2 era. Then the US peaked in that cheap oil in the 1970’s. We could do supply side economics better because we had the cheap energy to do so.
Global population is not growing in a meaningful way, BUT the conventional oil plays are in decline. So even if we maintain the current population indefinitely into the future, and demand stayed constant, oil supply would be in decline over the long term. And even worse, you’re not creating the GDP growth to bring the much more expensive oil. So yes, the developing world can’t afford expensive oil, and even developed economies will cut back consumption with expensive oil, but going into the future, we aren’t replacing the oil to make up for the current decline rates!
The developing countries will sadly eventually be crowded out from getting the oil that they need. The western powers will eventually fight with each other and beak up alliances because they’ll be fighting over the remaining energy resources. The age of growth as we have known it to be is essentially over.
Dreamteam
'Clearance prices' aren't deflation - they're closing down prices, after which supply contracts and the price level rises.
What happens when Hugh hendry hacks the producer desk . I spit my bonds in my coffee I laughed so hard. Been eatin a lot of bonds.
big respect guys,
only home owners / debtors have skin in the game. renters can skip war.
What's Lyn's 200 USD oil call based on? Just lack of supply? Does she factor in any EV/ E-scooter/ E-bike adoption in her view? Interesting discussion tend to side with Mike.
Green "We are far from the no action government"...check notes...yup, Trump printed the most in history...???
Bassman is so annoying as usual. Nothing can budge him, everything is the FED, everything is money printing. He's not gonna zig-and-zag well it's all about that! wtf
they are now printing the interest on the money debt printed earlier.....
I completely agree with Mike on we need to increase supply, but the US is incapable of doing that in 2022, because of the culture shift away from work ethic and the fact we shifted society away from a labor/production workforce to a desk job financial workforce and producing very little.
My wet dream is that people cut the governments out of their lives completely^^
The “get the F off my back” approach.
Move to Somalia.