Thursday, May 29, 2008


I found some seeds selling at 50% discount and bought 17 packets of them for $14.68

Seed Type
Balsam Camellia Flowered Mixed Colors
Bean Scarlet Runner
Beet Detriot Dark Red
Broccoli Early Dvidend Hybrid
Carrot Tendersweet
Cilantro Longstanding
Garden Bean Royal Burgundy
Garden Bean Tendergold
Garden Bean Romano
Garden Bean Cherokee Wax
Garden Bean Improved Tendergreen
Garden Bean Kentucky Wonder
Pea Alaska
Pea Early Perfection
Pea Dwarf Grey Sugar

I will vacuum them and store them in refrigerator.

Sunday, May 25, 2008

Google Trends on "Peak Oil"

Google Trends is an interesting indicator for search patterns on internet
There is a spike in News Reference Volume of "Peak Oil" in last 30 days
US consumer 25% of global oil and it is at #3 in Google Trend Region

Wednesday, May 21, 2008

Countdown to $200 Crude (7)

Crude Oil prices have gone crazy today. Crude futures surged to a fourth straight record, up $4.19, or 3.3%, to $133.17 a barrel in New York.

Tuesday, May 20, 2008

Countdown to $200 Crude (6)

Third successive day oil prices jumped. Today, the jump was $2.02. It is relatively big jump.

Oil Prices Set Another Record, Closing Above $129
U.S. light, sweet crude futures closed at $129.07 a barrel on the Nymex.

Monday, May 19, 2008

Why build more warehouses and increase inventory in US?

I saw today this newwire:
Amazon to open new facility in Hazelton, Pa., creating 1,100 jobs

I have been an Amazon Prime customer for several years. They give me 2-day free shipping. My average transactions per year is in double digits
I have noticed that starting this year even a 2-day shipment takes only one day. UPS is Amazon's carrier. I tracked UPS orders and found that recently they have increased the number of warehouses (these are either Amazon's warehouses or third part warehouses).
I became so confident about 2-day delivery getting delivered overnight, that I ordered mother's day gift on 8th May. It was delivered on 9th May.
This may look like a bullish news on surface.
I have an alternate theory behind this one. Just in Time (JIT) has been the corner stone of supply chains for over two decades. It is built around the assumption of cheap oil prices. With rise in gas prices, JIT world is slowly collapsing.
This means retailers (regardless of online or brick & mortar) needs to build more warehouses and stock up goods and supplies.

When I look at last quarter's GDP numbers, inventory played a vital role.
Why should companies stock up when they are aware of US consumer's
reduced purchasing power?
It makes sense when warehousing cost is smaller than shipping cost.
Pain at the Other Pump: Shoe Prices Rise
One more factor, China has increased minimum wage and this also adds up to cost.
Here is a crude example:
Lets say I can sell 100 pairs of shoes (each $50 today) in next 2 years and I also know that in next 2 years
shoes prices will $100/pair. It makes sense to stock up 100 shoes today even if I can't sell them in next
If my theory is correct, then we will see significant upside in inventory numbers in next quarter's GDP report
In 2006, Apple shipped an iPod from Shanghai in 2 days via FedEx. I seriously doubt if Apple is still mailing
iPod from Shanghai directly. It would make more sense for them to stock up iPods at local Apple store

Countdown to $200 Crude (5)

Start of brand new week and we have a new record for crude oil $127.05. It crossed $127 for first time at the closing of trading on Nymex
Nymex-traded oil finished Monday at yet another record high, hitting $127.05, after a seesaw trading session that saw crude prices hit alternately by profit-taking and supply concerns.

OPEC President Chakib Khelil reiterated recent comments from the cartel that despite record prices, oil markets were well supplied and blamed high prices on speculation, a weak dollar and geopolitical problems.

Qatar oil minister Abdullah al-Attiyah also insisted there was no need to boost oil supplies to global markets. "The market doesn't need more oil," he said, pointing to a cut in forecast oil demand growth by the International Energy Agency.

Friday, May 16, 2008

Countdown to $200 Crude (4)

Another Friday and another new crude record. It settled at $126.29. That is $0.33 higher than the record set on last Friday. This is not a big jump but a new record nevertheless.

CNBC says
Oil Prices Finish at Record Above $126 a Barrel

Oil prices shot to new highs again Friday as traders, unimpressed by U.S. and Saudi efforts to boost supply, kept buying on the belief that prices had more room to rise. Light, sweet crude for June delivery jumped $2.17 to settle at record close of $126.29 on the New York Mercantile Exchange. Earlier in the session, prices surged to $127.82 a barrel, also a new high. It was the eighth time in the past 10 sessions traders rewrote the record books, and the first time prices topped $127 a barrel.

Investors shrugged off news from Saudi Arabia's oil minister, Ali Naimi, that the country increased its production by 300,000 barrels a day last week in response to requests from customers. The market also had little reaction to the Energy Department's announcement said it would cancel shipments into the Strategic Petroleum Reserve for six months beginning July 1.

Oil industry observers questioned whether either move would have a significant effect on soaring energy prices.

"It's ridiculous because I don't think this is going to bring the price down," said Phil Flynn, an analyst at Alaron Trading, of the Energy Department's move.

Sunday, May 11, 2008

What would $120 oil mean for the Global Economy

Wescott Report is from April 2006. A little over 2 year old.
Robert could not foresee the following factors:
(1)Plateau of global oil production
(2)Federal Reserve going on a US$ printing binge
(3)Limitation of global refining capacity
There has been no coordinated terrorist attacks in last 2 years and yet oil is over $120/barrel.
Some of us maybe thinking that, there will be no negative consequences on Global Economy due to $120/barrel of oil
and it is just another number. Robert F. Wescott thinks otherwise. His thoughts are:
Stock market valuations would likely fall more than they did after the Kuwait invasion or after 9/11. Given the negative confidence effects and negative supply effects,the global recession would likely be severe.
What would $120 oil mean for the Global Economy
Info about SAFE:
Securing America's Future Energy (SAFE) works as a nonpartisan,
not-for-profit organization committed to reducing America's
dependence on oil and improving U.S. energy security in order
to bolster our national security and strengthen the economy.
The Wescott Report
This report gives an overview of the broad economic effects of
a scenario in which oil prices surge to $120 a barrel due to
coordinated terrorist attacks on global oil transportation
infrastructure. It is not intended to be an exhaustive analysis.
This scenario was the basis for a simulation exercise conducted
by Securing America's Future Energy (SAFE) at the World Economic
Forum Annual Meeting 2006 in Davos, Switzerland.
If oil increased to $120 a barrel and stayed there for a year because of coordinated
terrorist attacks on oil facilities, the world's oil bill would be about 8% of
world GDP (even assuming some reduction in the quantity of oil demand) - higher than
at any time in modern history. Such oil prices would almost certainly precipitate
a global recession. In addition to negative demand effects, there would be large
negative supply side effects, policy effects, and confidence effects. Meanwhile
financial markets would likely judge these attacks on global energy supplies more
seriously than Iraq's 1990 invasion of Kuwait of the 9/11 attacks, because of
their continuing disruptive effects. Stock market valuations would likely fall
more than they did after the Kuwait invasion or after 9/11.
Given the negative
confidence effects and negative supply effects,the global recession would likely be

Saturday, May 10, 2008

Garden: Plant Protection

That is picture of chili pepper leaf nibbled by bird

40 in. X 25 ft Garden Fence

Cable Ties (500)

Last week I had a bad experience of freshly sprouted chili pepper plants nibbled by birds. The birds also pecked the soil in the pot. They must be looking for worms. I had to do something to prevent future mishaps like this one.

I went to the local hardware stores "Home Depot" and Lowe's today and bought a bunch of stuff to give some protection to my plants from birds:

Code Item Cost(US$)
215893 1-1/2"X1 - 1/2"-1FT (14GA) 15.88

Home Depot

Code Item Cost
030699182206 Zinc Plated Slotted Angle 3' 31.92
099713032064 40 in. X 25 ft Garden Fence 8.88
728494139302 Cable Ties (500) 6.97
030699032211 5/16 1" Bolts (3/pack) 3.92
030699075546 5/16 Hex Nuts 3.38
030699076642 5/16 Washers 3.60

Total Before Taxes $74.55

I prefer metal slotted angles for frames:

(1) Results in a sturdy structure
(2) Faster to assemble and disassemble
(3) Metal is a good investment against
a falling US$

Cons: High initial cost

Final Assembled Product: Plant Protector (Hopefully this will work)

Friday, May 9, 2008

Countdown to $200 Crude (3)

TGIF! It is another summer day here, nice and warm. Crude prices reached another new height today. It was $125.96 on the NYMEX. Here is what CNN had to say about the gas prices:

Commodity prices surge: U.S. light crude oil for June delivery settled at a record $125.96 on the New York Mercantile Exchange, after hitting a trading record of $126.20 per barrel earlier.

The national average price for a gallon of regular unleaded gas rose to a record $3.671 from $3.645 the previous day, according to AAA.

Thursday, May 8, 2008

Little Giant MegaLite Aluminum Ladder

I bought two of these ladders from Costco today.
The cost of ladder is $200.

Why buy Ladder?
(1) They are useful tool around home, workshop
and farm
(2) The cost of aluminum commodity has gone up in last several years and it will continue to go up in near future. Aloca (AA) last quarter was not that good as they lost their margins on higher price of aluminum. US$ will continue to get weaker and it is better to invest in hard assets than keeping US$ in bank. The spot price of Aluminum today is 1.3/lbs Just the aluminum in these ladders is worth $40
(3) I will debit $400 from anticipated stimulus check

* Meets or exceeds all of OSHA & ANSI standards
* Heavy-duty construction
* Slip-resistant rubber feet
* 1.12" square rungs for better foot comfort and more stability
* Folds to a compact size for storage and portability
* Maximum capacity: 300 lbs.
* Extension Height: 15'
* Storage height: 4’ 7”
* Step ladder height: 4' – 7’
* Scaffold height 4'
* Weight: 31 lbs.

Countdown to $200 Crude (2)

Another brand new day and another new record.

U.S. crude oil futures ended at a record high on Thursday, fueled by yet another rally in
heating oil futures, which hit a new peak.

On the New York Mercantile Exchange, June crude


124.6 1.07 +0.87%

settled up 16 cents, or 0.13 percent, at $123.69 a barrel. It traded from $121.58 to $123.90 in regular floor trading hours.

"The heating oil price strength is providing evidence of a global tightening in gasoil/diesel supplies that hasn't been fully priced into the market," said Jim Ritterbusch, president
of Ritterbusch & Associates in Galena, Illinois.

World oil markets have enough supply now, but OPEC is willing to pump more if needed to keep pace with demand, Abdullah al-Badri, the group's secretary-general, said in a
statement on Thursday.

OPEC exports, excluding Angola and Ecuador, will rise 220,000 barrels per day in the four weeks to May 24 on Asian demand and a recovery in Nigerian supplies after a strike that crippled output, said Roy Mason, an analyst at British consultancy Oil Movements.

Saudi Arabia has booked eight supertankers to carry 16 million barrels of crude to the United States through May and early June, the highest number of spot cargoes this year,
according to a shipping industry source.

Countdown to $200 Crude (1)

Crude futures closed at an all-time settlement high of $123.53 a barrel Wednesday (05/07/2008). I think we will hit $200 by 2010. This is my first post on this series.
I will have a new post every time Crude hits a new high.

Retail gas prices soar to fresh record
With nationwide prices at an all-time high of $3.645 a gallon, drivers now pay 20% more than they did last year.

NEW YORK ( -- Retail gasoline prices have jumped to new record high, auto group AAA's Web site showed Thursday. The national average price for a gallon of regular unleaded gasoline rose to $3.645, surpassing the previous record set May 1. Gas prices have been marching steadily higher since the start of the year. Drivers now pay 20% more than they did a year ago, when a gallon of gas cost on average $3.034. The price of gas has been pushed up by record high crude prices. Crude futures closed at an all-time settlement high of $123.53 a barrel Wednesday