NO VOTE ON ENERGY!

In 10 days, Democrats plan to head for home without allowing an up or down vote on offshore drilling. Pelosi and Reid are standing their ground, for now. With T. Boone hammering away that we spend 4 times as much on foreign oil each year as we spend on the Iraqi war, McCain is within striking distance of Obama. He is dead even in at least one poll but behind 3 or 4 points on average. The news media is in love with Obama, the news media produces many of the polls. The race is tighter than it looks.

A number of moderate democrats would vote for drilling if given the opportunity, it is the common sense thing to do. Energy is likely to be the deciding issue this November. Reid and Pelosi are playing a high risk game of chicken. Surely their plan is to work toward a grand compromise, giving incumbents the opportunity to do something. Incumbents are generally safe but voters will "vote the bums out" if there is no action before November. By the way, the current wholesale price of gas implies a retail price of about $3.70 within a week or two.


CAL jumped $4 per share today! With both Congressional and Iranian negotiations basically on hold, it seems unrealistic to expect the sharp drops in the price of oil to continue short term. However, there has been a stock market shift. Consumer cyclical stocks, financial stocks and airline stocks soared again today. Bank losses have pretty much been written off and airlines did not lose nearly as much as was projected. The price of many things continue to drop, giving consumers spending power. Even stable oil prices could be enough to allow airline stocks to creep higher. CAL has bounced 100% in only 5 days! As noted before, in the face of extreme oil prices, CAL added $500 million to its cash reserves in the last quarter. High oil prices are causing SUVs and small planes to be parked. The cut back in travel is real but the bus, subway and commercial plane are the mass transit winners.

Real Estate is the biggest winner of all. The person who takes over the payment on a $500,000 beach condo, that has a $500,000 mortgage attached will start out with zero equity. However, that property will be worth about $1,500,000 in 15 years. During those 15 years, the rents might pay off $200,000 of the mortgage. The equity will have gone from zero to $1,200,000 with no money down. Of course, the buyer must be prepared to subsidize the rent payments for the first few years.

BUY SOMETHING!