Posted by: graemebird | June 4, 2009

A Lesson In The Theory And Practical Reality Of Capital Markets: The Shadow Of The Valley Of The Threat Of Carbon Taxes.

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I have worked in a banking. And was briefly in corporate finance.


As a janitor?


No as a managers assistant in Collins Street Melbourne. I reported to the Managers of the two biggest portfolios. The portfolio that handled other financial institutions and the portfolio that handled our giant resource companies.

“How come 7 of the hottest years in record came in the last 11? Coincidence?”

No in fact its just bullshit. Lies. A play on words. And an entirely arbitrary assertion. Do you have accurate records of each year of the Medieval warming period? NO!!!!!

You don’t even have the basis of a comparison between the 1990’s and the 1930’s.

Pick a cause. But don’t pick CO2 because thats you being an unscientific moron:

1. After Soviet communism fell the record-keeping was altered since, for example, Siberian records were no longer kept in the Chaos. Clearly this makes the ground-data tainted. And so biased it towards hotter recorded temperatures.

2. During the 80’s and 90’s SO2 release was radically reduced because of improved emissions standards, not ruling out the acid rain beat-up. We know for a fact that SO2 in the stratosphere will have a cooling effect. In the 2000’s the rise of industrial China has lead to a resumption of high levels of SO2 output.

3. The data was tainted by the urban heat island effect. This is a proven fact in the US and nothing to be poopy-pants about.

4. A mistake was detected by Stephen McIntyre in the American satelite data leading to a calculation that in America the 30’s were hotter than the 90’s. We can infer that this is the case for the world entire. Jumbling all the records into one big stew is a moronic way to put together world averages. So actually the people who told you that were lying.

5. Sami Solanki’s raw data has determined that in a 60 year period of the twentieth century the sun was more active then at any like period for 8000 years. He hedges and says “for at least 1150 years” and probably 8000 years. But the raw proxy data says 8000 and thats the assumption we have to make. I’m not sure about which 60 year period but its likely solar cycles 17-22 inclusive or thereabouts (more intense solar cycles are of shorter duration)

6. Glacial periods tend to start slow and end all-at-once. Interglacials seem to end with a series of “little-ice-ages” each one with a greater than 50% chance of being more severe than the last. We just recovered from a “little-ice-age” doofus. That allows the people who lied to your stupid ass the potential to make these outrageously idiotic statements with what amounts to “plausible deniability”.

“Here’s a question – what’s with this irrational, subservient, and utterly unjustifiable fetish for supply-side economics?”

I’m not into supply-side economics. I’m Austrian/British Classical synthesis. Like Gerry Jackson and George Reisman. The best living local and global economists respectively.

This is no carbon-tax alarmism. The very shadow of the outline of the phantom of the carbon tax, never mind the future possible reality, is crippling us and imposing massive expenses on us.

That the carbon tax rumour is having a relative crippling effect is manifest from the reliable supposition that the share price of Linc, Carbon energy Australia, Central Petroleum, Cougar Energy et al, will be depressed from what they otherwise would be. All these shares (a little less so for Linc) are appallingly undervalued.

Since they represent what ought to be the growth industry of the future along with nuclear startups……. since this is the clearest, most readily available new energy with the current skills-base and capital stock…. since this is the case on the eve of energy-deprivation…. these stocks more than any others ought to be selling at a premium.

Ron may stop me if I’m wrong. But junior resource-based companies live and die on the support of their shareholders. They must continually go to the market to issue new shares and raise money that way. But it is irresponsible to do so, except out of pure necessity, unless the shares are carrying a premium. Since this is a swap of less valuable cash for horribly undervalued shares.

What this means is that the growth rate of this nascent industry (deep underground coal-gasification) is not merely retarded. But it is slowed down by leaps and bounds. So the constant lying and debauch of the scientific method by our science-workers, research-grant-whores, and leftist media fruitcakes, is a debilitation that must be causing great harm.

On top of that as a bare minimum, it is criminal stupidity to levy any tax at all on retained profits. Criminal stupidity. Since it is retained earnings that are directly responsible for capital accumulation.

So the battle ought to be on to destroy the company tax. At the very least on retained earnings. And in fact to get rid of any charge on business-to-business spending that is not strictly user-pays (perhaps royalties alone excepted since currently they constitute a way of conferring property-titles).


Central Petroleum has found a 9000 square kilometre underground seam of coal. This astonishing booty is something to near turn the family Saud a darker shade of green and can potentially put to an end their reign of Jihadist sponsorship without a shot fired. It could do so if we combined this booty with as much nuclear power as the water resources in the region allow.

The area is the Pedirka basin. Either side of the border of South Australia and the Northern Territory.

I assume that these guys are phenomenal exploration geniuses and people of great vision who ought to be put up for the Queen to honour as knights of the realm. But they don’t have either the cash or the expertise to exploit these resources. Hence this astonishing booty of 1.4 TRILLION TONNES OF COAL ( you are reading this right) must be exploited in two and three-way partnerships.

The people with the expertise to exploit these resources are the other juniors (Linc may be less junior) I’ve mentioned. All lack the finance to exploit this potential at a fast enough pace to bring the new high-priced energy era to a close.

The leftist lies, from a movement that CANNOT be appeased, has brought this disaster upon us; The first time in living memory where a global recession and high energy prices coincided.

Instead of selling at a premium the shares of these compaines are selling at an horrendous discount. None moreso then Central Petroleum who surely must be the most extraordinarily undervalued stock in Australia, if not the world.

Now I need to investigate Central Petroleum more its true. I am open to correction on things I have said about them. But we have near-proof already that this undervaluation is putting these guys in a box. And it comes from the complicated financing operations that the boss John Heugh (SIR JOHN HEUGH IF I HAD MY WAY. ALONG WITH SIR RON KITCHING)is explaining to the market.

Look at the bind that I at least imagine that this man is in? He cannot simply dilute his shares with a share issue. Since his entire company is valued at around 25 million dollars. Even though in one prospect alone, they and their joint venture partners HAVE 1.4 TRILLION TONNES OF COAL TO EXPLOIT. ROUGHLY EQUIVALENT TO 2.8 TRILLION OIL BARRELS.

So his job on the financing side becomes enourmously complex. The iron law of small-cap extraction firms is not to go into too much debt. And yet he would be totally irresponsible to his shareholders to water down the stock.

That his stock isn’t valued by now, in the 100’s of millions, rather than only at 25 millions, can be sheeted off to the fact of our taxes on retained earnings, and on business-to-business spending…….. and on the scandal….. of the shadow…. of the threat …… that these idiots in Canberra …… might actually go ahead with the economic crime of the century …….. and make good the threats to restrict CO2 production ….. for no reason at all beyond appeasing a movement that cannot be appeased.
Graeme Bird | 06.05.09 – 9:14 am | #



  1. Logged moderated post:

    Your comment is awaiting moderation.
    No thats rubbish dover. There is no mathematical way to model the risk of a ponzi-scheme. Or of a situation where ponzi-money overmatches cash money by a factor of 30-to-1.

    We know that elephant on its trunk will fall over. We don’t know when. You must be tripping to think that this is some sort of thing that can be modeled beyond the fact of it having to fall over.

    All fractional reserve banks are insolvent. You cannot be insolvent and unprofitable at the same time. Hence the moment that the industry turns insolvent is the very time that the clock begins to tick as to when the whole system must fall over. This is why consumer price inflation targets are always positive and not zero or negative. This is why no progress can ever be made at ending inflation while we have fiat cash without high reserve asset ratios.

  2. moderated posts logged here:

    Your comment is awaiting moderation.
    Supposing that Central Petroleum market valuation is now 35 million. Its up and down by the hour. But lets take that estimate.

    Now Central Petroleum has a great deal of other gear. But they have a single property in the Pedirka basin. This property is a seam of coal.

    Ten years ago that seam of coal would have not been economic for anyone. When John Howard put in a train line in the middle of Australia he called it a NATION-BUILDING INVESTMENT.

    I hated it. I thought it was poxy. I thought that the whole idea is that when English-Speaking navies command the seas, Mountain ranges pull us apart, seas bring us together, and the key to the future was ports, ports and more ports. Trainlines coming a distant distant distant distant distant second when it comes to economic transport.

    Well you have to hand it to John Howard don’t you? I am reminded of one of the last great plays of the Elizabethan period when I say TIS A PITY HE WAS A THIEF.

    Yes its a pity he was a thief. And its a pity that he left the reaction to the gun mass murders to blood-sucker-central lifer to deal with it. By the way I’m not dismissing the problem. I’m not saying he was wrong to respond to the killings. But he ought to have forged a harm-minimisation compromise himself. Using all his formidable powers. Its not a backburner issue. Not left it up to the lifers at blood-sucker-central.

    He hurt a lot of good-hearted men.

    But apart from these two failings my God that little-man was a genius.

    One time I got pissed at the local pub. I was railing against these detention centres. I was saying it was un-Australian. I was so angry. But then he was right and I was wrong. Because they killed the industry good and proper.

    Now we have to pull out of our committments. And we have to renew legal-original-intent. Then we can be the kind and decent nation that we want to be without digging a hole for ourselves.

    Nonetheless the theme is we think that Howard is wrong. But unlike the rest of you, so many times when we think he was wrong he turns out to be right.

    Now they have found all this coal in the Pedirka basin.

    John Howards nation-building investment doesn’t begin in twenty years time. It begins in the next five years.

    You see once you own the coal, And once the capital investment is spent, then to turn a tonne of coal into 2 barrels of diesel was costing linc about 17 dollars variable cost at one stage.

    But then I did find that in practice they leave half the coal in the ground.

    So that brings us to one tonne being one barrel of oil equivalent gear. Or you could think of it in terms of straight diesel.

    17… well lets say 30 dollars of added variable cost once the capital has been amortized.


    Not only does John Howards investment make sense for us. It makes sense for the world. And for the war on terror. And for the wider war against the environmentalists.

    9 Jun 09 at 4:53 pm
    Your comment is awaiting moderation.
    Supposing the margin on 1.4 trillion barrels of diesel is discounted to the prestent. And supposing we say that the margin after all amortization of capital investment and paying of taxes and so forth…….

    …… supposing the net present value of all returns specifically to the shareholder-alone was ONE CENT PER BARREL??????



    The market capitalisation of Central Petroleum is only about 35 million dollars.


    ……… 400

    What we are saying then is that free trade in resource company investment, and in ownership of Gods creations, IS LITERALLY INSANE… unless and until the resources are handed out by virtue of homesteading and royalties and by no other method.

    9 Jun 09 at 5:02 pm

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