But there are a couple of things that everyone should be aware of. I attended a seminar last week in which a speaker talked about how much oil there is off the coast of this country or that, and how new technology will this or that, etc etc. The thing to note is that almost three barrels of oil are consumed for every barrel discovered, and the global macroeconomy is still out of sync.

The most important thing though is is situation with OPEC, and I think everybody should know the score here. When the price of oil touched ten dollars a barrel, the OPEC people decided to get their game together. This was at the end of the last century. They took control of their destiny shortly after the beginning of this century.

NOW THINK ABOUT THE FOLLOWING. The price of oil touched $147/b, and this was one of the main impulses for the macroeconomic bad news that followed. The oil price fell to $32/b, and all the half-baked started talking about it falling to 20 or less. Instead OPEC cut output by about two million barrels a day, and now we have a price of about $75/b. This would have been unthinkable 15 years ago, or maybe 10. What has happened is that OPEC is now in charge, and assisting them is the fact that non-OPEC production has 'peaked' (I think). Moreove, when the next oil price escalation begins, it will begin in the seventies, instead of the twenties.

And about John von Neumann. Everybody talks about his seminal paper on game theory, but when dealing with the oil market it's best to think about the taxi ride he took with Bronowski in London during the war, which is mentioned above.

Among other things any oil price escalation that is sustained for any great length of time is literally a nightmare for the US, and for Canada. This can and would destroy the viability of large established businesses here, leading to massive economic hardship. To make things worse, the US economy, given its already huge and growing foreign debt load, could implode leading to perhaps the US removing its dollar from floating on the open market. And possibly even removing itself from international free trade when it is realized in panic that the US would have to look inwards at totally rebuilding itself to get off of oil dependence.

Why can't we have politicians who make the kind of calculations that must be behind OPEC's and SA's program? I saw a picture today of Mr Obama laughing with gutter mouthed Jon Stewart, and I wondered what could be so funny. If he is bounced out in the next presidential election, we should end up with an all-out nutter in the White House (although I suspect/hope that the Republicans can dispense with their hard line lady candidates). This is why Mr O. has forced me to take a time-out from my loyalty to the Democratic Party.

I'm not so sure any solution lies with politicians, no matter what their persuasion. They seem to have a remarkable ability to demonstrate the law of unintended consequences. Perhaps they should just stick to legislating broad goals, stop micro-managing potential solutions and let the marketplace work it out.

Strikes me that the solution lies with shifting away from an overly large reliance on petroleum for transportation. Probably a combination of increased fuel efficiency, hybrid & electric vehicles, bio fuels, etc. Perhaps coal-to-liquid fuels.

Frankly, I'm a little tired of the market. Tired of the lies by millionaires who are ticked off that they arn't billionaires. In addition, one of the best articles I ever read in Fortune was by a businessman who wanted a partnership between business and government. That's naive of course, but given what might happen in the not too distant future, it's something to think about. I don't know about the United States, but in a country like Sweden the right and perhaps the only solution has to do with education. It just might happen in this country that they are on the way to getting things right, but remembering some of the things that I have heard about the educational system in the Big PX, I think that Mr Obama should leave show business and his interest in those two dumb wars he's always talking about, and concentrae on teaching the childrem of his constituents to prepare for the great new world of the future, with its billions of new inhabitants.

I was going to try to condense my thought processes, but your thought isn't a bad one either. I guess a quick ramp up in demand could produce a price peak that could not be met by production - as new production takes some time to get on line, so that's probably not the whole story.

You can blame the price peaking and subsequent economic crash on the speculators, but the speculators probably sensed something in the market - how demand did not rush in to meet the higher prices. That's probably what urged them to push prices higher bullishly. I think they did not realize what they might cause however.

The problem, as I see it, is that to exceed that peak again (July, 2008 = 86.673 Million barrels per day, according to the EIA) you need both a healthy economy (one that could withstand oil prices even higher than $147/barrel) and of course the capacity to produce it. But I don't see the economies getting that healthy anytime soon, and as they years go by, production capacity will just continue to drop. Note that even on the lowest month since July, 2008, we had over 83 milllion barrels produced per day (in Jan. 2009). All that production has just served to further deplete wells that were already declining in 2008. In July, 2008, Mexico produced about 2.8 Million barrels per day. Now it produces about 2.5 Million barrels per day. Replicate that with many nations around the world, and you can see how repeating July, 2008 gets harder every day.

It's true that some countries are able to sustain or even increase their production figures, but as you pointed out, it doesn't seem to be in their interest to actually produce all the oil that they can produce.

Maybe it will be an undulating plateau, as many suggest. It doesn't matter much where the exact peak might be. A world with even large static oil production (even in good economic times) is still one that is very alien to all of us. At this point, it seems far more likely that we will figure out ways to displace oil (PHEVs, NG vehicles, electric vehicles, etc.) than get more of it out of the ground in any given month.

As you mentioned, the gentleman from Total believes that oil production will never exceed 89 million barrels per day.

So has oil peaked or nearly peaked? Does it really matter? Close enough, I would say.

Also, I call an undulating plateau a plateau. The undulations might come about by macroeconomic meltdowns or partial meltdowns. As for an economy healthy enough to manage an oil price of 147 or more, well, I dont know. Just think about it: 147 collars for a barrel of oil that 8 years earlier was selling for less than ten dollars. That cant be a good thing for those of us on the buy side.

When oil was gyrating wildly over the past three years, I felt that a "fair" price was $50-75/b. Enough money in that to run the countries that pump it, enough for the non-OPEC'ers to want to explore for more, and yet not exhorbitant enough to bankrupt the folks who consume the product. Possibly still expensive enough to encourage the continues search for alternatives, as well.

We can absorb gradual increases through many means - 10% price increases per year add up over a decade or two (witness our absorbtion here in the US of health care costs over the past 20 years at such a rate - ugh!). It is the "shock" rates (+100% in less than a year) that scare the consumer into withdrawal.

In the fantasy which makes me the president of the US, I would do the following to prepare for the next round of potential oil shocks, assuming it is there and ready to kick off as the world economies get back on the road again:

Set the US strategic reserve cap at 3 Billion barrels ... then buy low, sell high. We would determine a band of acceptable prices for this lifeblood commodity, and if the price falls below the band, Uncle Sam becomes a customer, and adds to the strategic reserve, and supporting prices. If the price goes above the band, we become a seller, but only to our own domestic buyers. US consumption is about 20-25M bpd. If the strategic reserve adds up to 3M bpd to the "production" supply side, we can do so for nearly three years given the 3 gigabarrel strategic reserve. That should be enough to dampen ANY speculations or price gouging via supply-constraints from anywhere, for many years to come.

Then, when "reasonable" pricing returns, the reserve supply is gradually turned off. When the market sees this as an intentional and predictable strategic control mechanism, I believe "shocks" will disappear. The band of acceptable prices should, of course, be increasing at say 4-6% per year, in order to keep all the necessary incentives in place for displacing fossil-oil with alternatives.

This latest economic collapse resulted from a shock-sensitive system being created, and then being struck with multiple self-induced* shocks. I don't think too many people would argue the point at the moment, "that which does not kill us, only makes us stronger". It damned near DID kill us. A series of stronger controls (regulating mechanisms, for those who know control-theory) are necessary to keep an ever growing world economic system from swinging around like a bad bridge in a strong wind.

*By self-induced, I mean when the greedy got the greediest: unregulated (stupid) derivatives trading went nova, and the oil futures markets went into the hands of the speculators. (Please tell me how it would not be possible for producers sitting on top of gigabarrels to take a little profit and bid up the price of the futures for their own product!?! In a supply-constrained market, that's where the prices are set! I wouldn't doubt for more than 3 seconds that this was going on in 2007-2008. In a low-demand market, or in an oversupply situation, the price is set in the spot market, hence the dive to $9/b in the late 90's. No one then would have dreamed of spending a dime on an oil futures contract much above that miniscule spot price.)

Looking forward to comments, rebuttals and further discussion!

Regards to all, RW Vesel

"A rational capitalist believes in an almost-free market - i.e. the market which cannot be manipulated for the good of a few, at the expense of the many."

RV...

Bill Bonner Provided as a courtesy of Agora Publishing & The Daily Reckoning Australia Sep 16, 2010

Students learned far more than undeserved self-esteem in school and every one could read his diploma.

I don’t see anything in the comments above that suggest a sustainable world civilization of a US of 1930.

But in 1930 there were 2 billion people, not 7 billion.

Listen, they had their chance at least 3 times earliers but could not do anything, because there was too much cheap oil in the ground. Now OPEC decides what happens (at the margin) on the supply side of the market. And Mr, they are NOT speculating.

And Don is back with his sad song about population. Unfortunately, he is correct.

I guess he just keeps revising it downwards....

I guess we'll have to differ about the level of speculation going on in 2008, when prices peaked. Can you cite or provide some sort of analysis which would indicate more S&D and less speculation, I'd be interested in seeing it.

My "opinion" is based on the fact that there are three centers for oil futures trading - NYMEX, the London Exchange, and a "baby NYMEX" in Dubai. The Dubai Mercantile Exchange (launched in 2007 - note the timing!) )does not provide transparent reports of daily trading activities, and is essentially an unregulated exchange. The NYMEX itself is "regulated" by the CFTC, and does issue daily reports, such that suspicious trading patterns can more easily be tracked. What goes on overseas, however, can invisibly drive up the prices, with no response from any regulatory agency, here or abroad.

"Persons within the United States seeking to trade key US energy commodities – US crude oil, gasoline, and heating oil futures – are able to avoid all US market oversight or reporting requirements by routing their trades through the ICE Futures exchange in London instead of the NYMEX in New York." From: http://www.globalresearch.ca/index.php?context=va&aid=8878

Please do not gloss over the potential for the greedy to overwhelm a market when the proper conditions exist! Recall the Hunt Brothers trying to corner silver in the late 70's. Two guys drove silver up tenfold before their bubble burst. The owners of oil (over 90% of proven reserves are owned by non-public entities!) had NO motivation to cap the price of their product - and EVERY motivation and opportunity, in 2006-2008, to exploit a situation which would add substantially to their incomes. Tell me - WHY would they not take advantage of the situation? I don't for a moment think that every one of them was too altruistic to not take advantage of the perfect speculative environment, at our expense.

In the game of speculation, the only trick is to not be the last one out of the pool when prices begin to collapse. "Smart money" is rarely last out.

As to the earlier "three times" you refer to? I think it took that many tries for them to "get it right", and they learned to play the game by a different set of rules, not the collective production-limiting meetings OPEC had tried over and over to support prices. One single big player, such as the Saudis, could say, "We will cut our own production enough (just a few percent) to cause a supply-demand imbalance, to the negative, and then play in the futures market to make up tenfold in pricing increases, what we lost from the small production decrease." A few other large players recognize the savvy in the idea, and do the same. If the total of all suppliers IS indeed production limited, as everyone here seems to feel, then it doesn't take much self-control or self-limiting on the part of any individual supplier or group, to keep supplies at just under the demand level, thereby feeding the perfect speculative storm environment.

ALL speculative bubbles end in collapse - from a multitude of possible triggers. This 80% collapse in oil prices (from about $150 to about $30) was a speculative bubble bursting - demand collapsed, and prices immediately followed. How did the industry recover to the "fair price" range of $50-$75? It didn't take long, did it? They now know how to play in the current essentially unregulated environment, where they are the only people at the controls...

I know this all sounds like "big bad consipacy" ranting, but having seen the financial markets go through multiple self-indulgent profit orgies from the 70's to now, it is obvious, to me, that this is how "big smart money" thinks. I have absolutely no shred of evidence to the contrary. When they don't have a commodity to play with, they make up a new instrument or skimming strategy to play with, a la "junk bonds", "credit default swaps", "hedge funds", "LLC", etc. etc. etc.

Your final comment about goverment getting down to business, is just what I was aluding to in the previous post. The current wars were started by people who were in bed with business, and used every excuse at their disposal to take advantage of a crisis and turn it into a series of money machines for their business friends. The house of cards was built in earnest from 2001 to 2008, and we're still trying to clear the lot from the debris of the collapse. New banking and financial regulations are just a step in the right direction. Managing speculative excesses, for life-blood commodities such as oil, would be another such step, IMHO.

Regards, RWVesel

I'm discussing this speculation thing tomorrow, so I dont mind clarifying my position.

If China and India stopped buying, and OPEC decided to produce more instead of less, every speculator who insisted on continuing to buy would have gone bust. The actions of speculators were validated by supply and demand. Without that validation they had no power.

On earlier occasions when the price jumped up, speculators who got in early made money, while those who continued to go long were wasted. The climb from 32 dollars to today's 75 is not the speculation that some people think, but OPEC controlling the supply.

All this talk about speculation is from people who think that socialists have taken over Wall Street. Completely absurd. If the global macroeconomy got back in the groove, OPEC could have a meeting and by limiting production, push the oil price up over 80 dollars. And this is what they are going to do.

Scenarios

I always thought the Road Warrior was a good movie, though LIVING it might not prove to be quite as amusing.

I'm sure there was a "peak 8-track tape" event in the 1970s.

Another thing peak oil indicates is that you can't drill your way to higher production. Even if the oil was technically available (it probably is) the market factors will not support it. We can shout "Drill, baby drill!" all we want (thank GOD that e-pulse has none of those types around....) but what we really need to do is figure out how to displace oil use faster than its production declines.

As for peak oil being a truth that we can't handle, I wouldn't necessarily disagree with that. Unfortunately, its pretty difficult to hide. I don't know any competent business person that would ignore something that's likely true, however unpleasant. The same should apply to private citizens and governments as well.

I have to clarify one thing, so that we both perhaps can end up on the same page. By standard definition, "speculation" does NOT work if supply is known to exceed demand. (One actually can speculate even that way, by "going short", rather than "long") Speculation works spectacularly when it is anticipated that demand will exceed supply, or it is already an accomplished fact. Then, speculation can make you rich. This is exactly what I was referring to as being in the right situation. A smart trader recognizes these golden opportunities (they don't come along every day, you know), and makes a "bet" going long on the commodity. He can have enormous leverage in the futures market, and a small "bet" can pay off tenfold very easily. Options on futures multiply this leverage even further.

The oil producers, in 2006-2008, I am sure, saw the golden opportunity, to not only make their bets to win in the futures market, but to also drive up the price of the underlying commodity so that their own production profits were enormous. Temporarily overpaying for a few tens of thousands of barrels in the futures market was temporarily dwarfed by the immediate uptick in prices acheived on their millions of barrels a day production. This was literally FREE MONEY, extracted from crude consumers - does anyone who is unconstrained by regulation EVER pass up free money??? I leave it to you to answer this not-so-rhetorical question.

By the way, I made some of this free money in a small silver bubble, so I know whereof I speak - this isn't blind intellectual speculation on my part. Again, all speculative bubbles burst - oil did this when REAL demand dried up. Everyone who remained speculating at that time had to unwind their position in order not to take huge losses, which could also COST plenty in the futures market, considering futures are typically purchased by speculators on margin (10-20% of actual cost). Large scale unwinding of long positions exacerbates commodity (and stock) price collapses. When all the positions are unwound by those "last ones out of the pool" guys, then pricing slowly returns to "fair" levels - assuming supply and demand are more or less in balance. If the supply is not dialed back to match demand, then there is a glut, and no one will buy at anything but the lowest prices found in the spot market.

I assure you that the big producers, and now the middle-east Dubai exchange traders, understood this even better than we do. The Dubai exchange started out only trading three types of contracts - all oil related, only one on actual production, and the other two were "spread" instruments, between Middle East sour crude and either Brent Sea or East Texas crude. (Since the collapse in crude oil related activity, they have since added precious metals, steel, and fuel oil.)

Bottom line, you cannot speculate "long" successfully unless there is more demand than supply, and you do best if you get in the game early, and out before the bubble bursts. I think this fits in with your supply and demand fundamentals without contradiction. All I will add is that if speculation was NOT involved, I don't believe oil would have even crossed $100 a barrel in 2008, and it might have taken another year or two to get there instead, based only on supply and demand fundamentals.

Regards, RWVesel

Peak Oil Article from TOD

-Jim

The speculation smoke screen was raised by OPEC to explain the fantastic and sustained price rise of oil that began in 2003-4. You see, you are supposed to believe that it was not OPEC constraining supply that caused the escalation, but little guys on Wall Street (and in Las Vegas, according to one genius).

BUT THE FACT IS THAT IT WAS THE COMBINATION OF CHINA ETC BUYING, AND SUPPLY FROM OPEC NOT EXPANDING, AND THE PEAKING OF NON-OPEC SUPPLY THAT CAUSED THE PROBLEM - The problem that gave some of the OPEC countries money that they could only have dreamed about earlier. Yes, there was speculation by communists and socialists in the big Wall Street financial institutions, but without the validation provided in the physical market, there would have been the same situation as during earlier price escalations: the speculators who got in early made money, and those who stayed in lost money. Those, Mr Vesel, are the facts, and it is a mistake to look any further.

At present, OPEC is still beating the speculation drum. See e.g. the latest edition of the journal 'THE MIDDLE EAST'. And listen, the oil price recovery in 2009 could only have been possible due to OPEC's restraining supply, and the inability of other suppliers to increase the output of oil.. Why not accept the facts?

I will only say my last piece ... (successful) speculation merely amplifies pricing trends that are inherently due to supply / demand imbalances. They don't CREATE them, just amplify them. When there are financial instruments (derivatives in the futures market) available, representing future delivery of a commodity, speculation ADDS to the demand side of the equation. A producer, or production cartel, can make a veritable killing when he can do both: A) Constrain the supply -and- B) Speculate (long) in the derivatives market, walking the price of the commodity up the steep slope (gradually, not all in a day or a week) of the hockey stick price curve.

Now, if they producers didn't themselves speculate, they could count on with absolute certainty, due to the very existence of the futures market, that there would be speculative activity that would be of great benefit to the producers' cause (i.e. immense profit).

I personally observed this amplification, which is inherent in the "hockey stick" shape of the price curve. Stock market bubbles, real estate bubbles, tulip mania, etc. all have the same characteristic shape, and all of them, without exception, are consequences of speculation.

If you'd like further informatin on this topic, and how the artists do it, any specialist, or "market maker" on Wall Street, or commodity trading specialist, can tell you all about it. I suggest a private conversation with a so-called "investment banker" would be very enlightening.

I still don't think we disagree fundamentally, except on the point of speculative amplification of a trend.

I'm wondering if you had any thoughts on the proposal I made, regarding the exercise of de facto pricing regulation through the use of the US Strategic Pertroleum Reserve, which would effectively kill any attempts at serious market-disrupting speculation, or coordinated production cutbacks by the "cartel"? Would the cartel try to break such a strategy, by executing three years of (hostile) production cutbacks? Or would they be happy with a managed increase in prices, devoid of serious volatility, so they could count on a steady stream of income without the necessity of quarterly meetings and production coordination, quotas, and backroom arm-twisting?

Kind regards, Rich V.

Enlightened regulators are almost always dumber than than those they seek to regulate and make things worse.

A perfect example, from today's news - October 5, 2010: ================================================================== PARIS – Former Societe Generale SA trader Jerome Kerviel was convicted on all counts Tuesday in one of history's biggest trading frauds, sentenced to three years in jail and ordered to pay the bank a mind-numbing euro4.9 billion ($6.7 billion) in damages.

The ruling marked a huge victory for Societe Generale, one of France's most blue-blooded banks, which has worked to clean up its image and put in place tougher risk controls since the scandal broke in 2008.

The 33-year-old former futures index trader stood expressionless as the court convicted him of all charges and pronounced a five-year sentence with two years suspended. Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly euro50 billion between late 2007 and early 2008.

In a stunning blow, the court also ordered Kerviel to pay the bank back the euro4.9 billion that it lost unwinding his complex positions in January 2008 — a punishment he would almost certainly be unable to pay. That sum marked the largest-ever alleged fraud by a single trader. =================================================================

One guy - 50 ***BILLION*** Euros ($70B USD) in "bets" in the futures market...

Don:

In 1936 John Maynard Keynes wrote: "Speculators may do no harm as bubbles on a steady stream of enterprise. But the situation is serious when enterprise becomes the bubble on a whirlpool of speculation."

(i.e. when "playing the market" BECOMES "the market", you can be 100% assured the disruption and ruin lies ahead)

Speculators betting against other speculators do not *control* anything, in the environment of a supply/demand imbalance. Very few "smart guys" will bet against a trend - the saying in the business is "the trend is your friend". As a speculator, you simply do not want to be among the LAST guys to get in with a long position, just before the trend finally breaks down, and price collapse begins to take place. In supply/demand imbalance situations, speculators do no regulate, they amplify. If you believe otherwise, please read any number of treatises out there on the topic of market speculation. When speculative buying activity is dominating the price action of a commodity, whether it be oil, silver, real estate, or tulip bulbs, prices enter a "hockey stick" pattern, swinging very high, very quickly - and at some point, becoming unsustainable.

Speculation can also cause prices to deviate from their intrinsic value if speculators trade on misinformation, or if they are just plain wrong. This creates a positive feedback loop in which prices rise dramatically above the underlying value or worth of the items. This is known as an economic bubble. Such a period of increasing speculative purchasing is typically followed by one of speculative selling in which the price falls significantly, in extreme cases this may lead to crashes.

(cont.)

Having a background in process control theory actually helps with finding ways to control speculative runaways, either to the downside or the upside. In the case of a commodity like oil, and a "storage tank" big enough to affect the market, such as the US Strategic Petroleum Reserve (SPR), it can be likened to a pretty simple control strategy. When prices move out of the desired price (control) band, the SPR is either a source of oil when prices get too high (here the SPR sells), or a sink when prices get too low (here the SPR buys). Three major benefits are gained:

A) Prices are managed just enough so that economic disruption is minimized. This benefit in itself is probably worth hundreds of billions to possibly trillions of $$$ in avoided societal costs due to economic disruptions. B) Producers and consumers have a reasonably predictable forward view of the pricing environment, and they can plan accordingly. C) The SPR becomes a profit center for the US government, not a "cost center", because it will be operated on a "buy low, sell high" strategy.

The allowable price band should not be too constraining, or the controls will unfairly and probably negatively, affect the market, and decrease its efficiency. I suggest, that for the current environment, the lower values for control bands should be $40//bbl for some minor buying, and $30/bbl for major buying. On the high side, $90/bbl for minor selling, and $100/bbl for major selling. These limits should grow at least at the rate of inflation, perhaps more, so as to continue to encourage alternatives which would reduce our dependence on fossil-oil as a commodity.

The market will operate freely, without regulation, in the $40-$90/bbl region, EXCEPT for the underlying psychological influence of the known regulation mechanism. That is, as prices move toward either of the extrema, speculators will not be encouraged to "pile on" in the direction of the trend, because they know that it won't move much beyond the defined control limits. They cannot amplify trends, because their tiny "bets" on some tens or hundreds of thousands of barrels will be swamped out by the controlled release or purchase of millions of barrels by the SPR. Speculators may still play in the market, as long as they can make money with the commodity trading in the $40-$90/bb range.

In a global economy, with such huge sums and numbers of livelihoods at stake, I feel it is imperative that we not use "sound bite" 18th & 19th century economic viewpoints as the means of governing our economies. This last twenty five years (so as to include the 1987 Market Crash), is exemplified by the higher volatility and greater inherent risk of laissez-faire free-market thinking. Governments have to, through regulation, at least loosely manage the excesses of the acquisitive financial community, which has no regard for the long term view, or the need for social responsibility. If only one in 100 people on the planet acts in pure self interest, and one in 1000 of THOSE is in a position of substantial influence, we have nearly 70,000 potential "agents of social disruption" to be concerned with. Not an insignificant problem, don't you think? Especially when a significant number of them flock to the latest financial scam-de-jour, such as junk bonds, oil speculation, credit default swaps, etc. etc. etc.

Each of these, in small measure, had inherent benefits. But they all outgrew their britches in short order, and became economic monsters - huge houses of cards that fell when a stiff breeze came along... Then we ordinary citizens paid dearly, in many ways. The first, rather quiet, trillion-dollar Fed bailout of a financial house of cards did not occur in 2008-2009. It was in 1998, when the Fed had to bail out Longterm Capital Management, LLC. That's another good read - here's a transcript of a NOVA documentary on the topic:

www.pbs.org/wgbh/nova/transcripts/2704stockmarket.html

Regards, RWV

When the S&L’s collapsed some decades back and the recent mortgage fiasco these businesses were already highly regulated, virtually run by several levels of government calling the tunes and the steps. Perhaps the worst were pseudo federal government agencies, Freddy and Fanny. In many cases compelled by congress to make insane loans.

These regulations were written by politicians imposing their will. They imposed their will to get votes. That’s the way the system works. I suppose the first regulation should be that those making the regulations not be making them to pander to their voters, but this can never happen. We have what used to be called a dilemma, a useful word seldom used since the advent of pc - a pc world where everything can be solved. Dilemma is sooooo unenlightened.

How about having regulations clearly demarking what is illegal? Setting really severe penalties for individuals. Now a mugger can get a bigger penalty than a guy who steals billions. How idiotic.

I hate to use a sports analogy but I’m going to so it anyway. The officials in a football game scrupulously enforce a very complicated set of rules (regulations.) (I heard one say it was easier to pass the NY state bar exam than the Ref’s exam.) They do not set any policy. I want regulators to be like football officials. (Every year the rules are tweeked.)

Let us all operate on a level field within the rules. Those who don’t should never be allowed on the field again.

But it's a complex world, and it ain't gettin' any simpler. The forces of unenlightened self-interest grow right along with everything else, and technology, sophisticated schemes, and loopholes let them get away with all kinds of shenanigans - EXPENSIVE shenanigans...

The quarterback can't get away with tucking the ball under his jersey in an NFL game, but the financial guys pull that stuff all the time, because A) It's easy to hide things B) No one wants to allow, or pay for, a regulatory body that will crawl up their behind with a microscope on every major transaction. (Free Market!!!)

RV