Mb Speaks
Well another issue bites the dust. Seems like just a few days ago I was sitting here writing the last editorial..man how time flies when you’re dreaming of something better to do! I kid! It’s been a true gas putting this “rag” back on the streets and this issue has a lot more to offer than the last one did. As I reassemble the old Wire team, I’m reminded of the days when we used to cut and paste pictures and text on an art board and work until 4am only to get into a car and drive it to Toronto to a web press all the while wondering what we’d forgotten or what had fallen off. Some of you were still in diapers. (and some of you will be again). Times sure have changed. Now it’s designed on a computer that has more than a 25mb hard drive, proofed with a colour laser printer and uploaded to a printer’s server from anywhere in the world. Once the snow flies, I plan on putting one of these together from some pool side in Mexico while drinking Tequila and eating too many nacho chips. You think we have attitude now?... Wait until the liquid courage kicks in! Anyway, I want to thank everyone who sent best wishes after the re-debut issue. Thanks to all who submitted ideas, art or pictures and especially the advertisers who came back on board. Without you, there would be no paper at all. Even though this is the most fun I’ve had publishing in a long time, I’m not footing the bill alone, I have drinks to buy! That said, readers...make sure you visit our sponsors and buy something in their stores or restaurants so they have more money to spend with us in the future. That way we can add more pages and more colour and more writers and more cutting edge conspiracies! And remember there’s a Wire Weirdo in all of you....
keep the faith
Mb
The Price of Gas by Randy Wright
So what’s up with the price of oil? At an all time high, it has pushed fuel prices through the roof affecting business, travel and everyday life. Police have cited people for turning their cars off to coast down hills and towing companies have seen a sizable increase in the number of people running out of gas, as drivers play the “wait and see if the price goes down” game. Having topped $140 a barrel this month, gas geeks everywhere ask “Is it supply and demand or speculation that’s driving the market?”
The safest answer is.... both.
With the development of unregulated international derivatives trading in oil futures over the past decade or more, the way has opened for the present speculative bubble in oil prices and only a handful of major oil trading banks such as Goldman Sachs or Morgan Stanley have any idea who is buying and who selling oil futures or derivative contracts that set physical oil prices in this strange new world of “paper oil.”
Until recently, US energy futures were traded exclusively on regulated exchanges within the United States, like the NYMEX, which are subject to extensive oversight by the CFTC (Commodity Futures Trading Trading Commission), including ongoing monitoring to detect and prevent price manipulation or fraud but In recent years, however, there has been a tremendous growth in the trading of contracts that look and are structured just like futures contracts, but which are traded on unregulated OTC electronic markets. The trading of energy commodities by large firms on OTC electronic exchanges was exempted from CFTC oversight by a provision inserted at the behest of Enron and other large energy traders into the Commodity Futures Modernization Act of 2000 in the waning hours of the 106th Congress.
Then in January 2006, the Bush Administration’s CFTC permitted the Intercontinental Exchange (ICE), the leading operator of electronic energy exchanges, to use its trading terminals in the United States for the trading of US crude oil futures on the ICE futures exchange in London – called “ICE Futures”. 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. Ultimately, The US Government energy futures regulator, CFTC opened the way to the present unregulated and highly opaque oil futures speculation. It may just be coincidence that the present CEO of NYMEX, James Newsome, who also sits on the Dubai Exchange, is a former chairman of the US CFTC.
In the most recent sustained run-up in energy prices, large financial institutions, hedge funds, pension funds, and other investors have been pouring billions of dollars into the energy commodities markets to try to take advantage of price changes or hedge against them. Most of this additional investment has not come from producers or consumers of these commodities, but from speculators seeking to take advantage of these price changes. A common speculation strategy amid a declining USA economy and a falling US dollar is for speculators and ordinary investment funds desperate for more profitable investments amid the US securitization disaster, to take futures positions selling the dollar “short” and oil “long.”Oil is one of the best ways to get huge speculative gains. The backdrop that supports the current oil price bubble is continued unrest in the Middle East, in Sudan, in Venezuela and Pakistan and firm oil demand in China and most of the world outside the US. Speculators trade on rumor, not fact. In turn, once major oil companies and refiners in North America and EU countries begin to hoard oil, supplies appear even tighter lending background support to present prices. Goldman Sachs estimates that pension funds and mutual funds have invested a total of approximately $85 billion in commodity index funds, and that investments in its own index, the Goldman Sachs Commodity Index (GSCI), has tripled over the past few years. Notable is the fact that the US Treasury Secretary, Henry Paulson, is former Chairman of Goldman Sachs.
And what of actual demand for oil by consumers? Although demand for oil is declining in the U.S. and Europe, overall global demand is still rising, fueled primarily by China and India.
China for example to encourage economic growth, set fuel prices well below international prices. To do that the government last year alone forked over $22 billion of its own money to subsidize fuel costs and give motorists and commercial transportation a break and with 1,000 new cars hitting the streets in the capital city of Beijing alone, the demand for fuel has been unprecedented. China has seen oil consumption grow by 8% yearly since 2002, doubling from 1996-2006 indicating a doubling rate of less than 10 years. In 2008, auto sales in China were expected to grow by as much as 15-20 percent, resulting in part from economic growth rates of over 10 percent for 5 years in a row, with a large percentage being the sale of SUV’s.
World oil consumption is projected to rise by almost 1.2 million bbl/d during the second half of the year, reflecting the impact of higher expected prices, lower economic growth, and growing pressure in some countries (such as India, Malaysia, Indonesia, and China) to ease price subsidies, which could dampen consumption growth. Global consumption in 2009 is expected to increase by 1.4 million bbl/d because of upward revisions in projected 2009 economic growth in some regions, such as Latin America.
So despite our conservation, the world wide demand grows, the prices go up and speculators continue falsely inflate its value by hoarding and cornering the market. For those who remember the “Oil Crisis” of the 70’s we just have to wonder whether we’ll be pushing our cars to the pump sometime soon.
Interview: Ron Sexsmith by Michael Bell
One of Canada’s premier tunesmiths will be coming to Peterborough in August. 9 albums, a bunch of tours and thousands of fans including the likes of Elvis Costello, Paul McCartney and Sheryl Crow and Ron has hit the big time. He recently performed at Showplace to a sold out hall and his appearance at Crary Park will give thousands more an opportunity to find out why he’s become one of the most sought after songwriters around. A reserved performer and nervous traveler, Ron spoke to me a few days after returning from his European “vacation”......
Mb: Hi Ron
Ron: How are we doing?
Mb: Doing well. So we're interviewing you because you're coming back to Peterborough in August.
Ron: That's right.
Mb: You've been up here a number of times. How do you like playing here?
Ron: Ya, it's all been pretty good memories. I played there not too long ago, actually. I played a theatre. I think it was just a one-off show. It was a good time. I don't know too much about Peterborough though. I don't get there except to play from time to time.
Mb: Well it's a uni and college town. I imagine a perfect market for you.
Ron: Ya, it's hard for me to say really. I don't know how I do it terms of the colleges. It's nice to think that anyway.
Mb: So you've been out of town of late, I hear.
Ron: Ya, I'm on a bit of a promo trip overseas. I've done a few different trips actually Last month I went to Scandinavia and all these places and the other day I went to London and Paris for a couple of days.
Mb: Fantastic. Is that something you like to do, travel?
Ron: Ah well, that's a tough one because.. I mean, I love performing. I don't mind if I'm in a tour and we're traveling around in a van or something. I'm not a big fan of flying.. airports and stuff. I'm kinda nervous. I'm a nervous traveler. When I don't have to do too much flying I enjoy it.
Mb: So what do you do when you get to an airport? Are you a nervous guy and then have a couple of drinks on the plane or try to sleep or...?
Ron: I don't go that route. It's just that, they put you through so much. By the time you get to your gig, you know? I feel really stressed out... and then actually being on the plane; all the turbulence. Nobody likes that right? I've just got more and more... it never used to bother me so much. Now I get pretty nervous about it. But I'm not pounding them back. I guess I could take something to knock me out, but I want to be alert.
MB: So what else do you like to do in life, besides perform. Any hobbies?
Ron: Not a whole lot really. I like to watch movies and reading. But for me, the happiest time is when I'm home playing my piano and drinking coffee. That's my favourite thing to do really. I like walking around. I walk more than almost anybody I know. I don't golf or anything (laughs) Music for me and songwriting is a 24/7 kind of thing. I'm always writing. And if I'm not writing, I'm learning somebody else's songs to play for my own amusement. So I don't have a lot of time for anything else.
Mb: And where does the inspiration come from when you're writing? Where do you find you're getting the best tunes?
Ron: Ah, it's sort of all around you. That's the thing about being a songwriter. It's really about staying open. You never really know when your next idea is going to come. You may overhear it in passing. You may watch a movie and somebody says something in a movie and the lightbulb comes on over your head. A lot of times it's just because you're going through some stuff. and whatever it is. It's my job to kind of recognize it and try to take it somewhere. That's kinda what I do for a living really. The other stuff is the fun stuff, performing and everything. But it's hard work doing the writing.
Mb: And how was writing the new record? Did it come to you easily?
Ron: Some parts did. Some parts came to me easier than on some previous records. The lyrics on this album seemed to kind of flow more without too much trouble. Lyrics have always been the toughest part. I was working on it and started writing the songs when i was recording my last record and while I was waiting for it to come out. I don't know how I do it. It's just a matter of staying ahead of yourself. So I don't really know how long it took me. Sort of the standard amount of time.
Mb: It's a different sounding record this time around.
Ron: Ya I think so. Every record I try to take it someplace else. This record just because of the horns it gives it a different vibe, I suppose.
Mb: I kept thinking you'd been listening to a lot of Blood sweat and Tears!
Ron: (laughs) It wasn't my idea to have horns on the record. My original idea was to make the record just me and the piano. It was what I wanted to do originally. It just grew into this whole other thing. The horns were almost an after thought. We recorded most of the record in England and my producer got the idea. He thought a lot of these songs would benefit from horns and he'd been to Havana before and recorded there and found some of the best horn players he'd ever heard so we hopped on a plane and went down there... and right away.. I mean I wasn't sure if it was going to work, but right away I dug what they were doing, the whole Latin thing.
Mb: Has it been received well by everyone as a new sound and growth or... ?
Ron: I think so. Most of the reviews I've seen have been quite positive. I'm sure there's some bad ones out there, but you can't please everybody.
Mb: Speaking of pleasing everyone, I have to ask you, how did it feel to have Elvis Costello become one of your biggest fans?
Ron: That was so long ago. That was about '95? It really gave me a push, you know, because I was struggling with my first record. It really wasn't doing well and then Elvis started talking about it. Then it got re-released in '96 and had a second life. So I've always been grateful to him for that. We've toured a bunch of times and we've remained in touch over the years. But that whole Elvis thing is part of ancient history (laughs)
Mb: So what else? What do you want to say to our readers?
Ron: I'm really looking forward to playing the Festival of Lights. Anytime I get a chance to play with my guys, my band... I'm looking forward to hanging out. I really like playing Canada in general. I'm kinda a home body. We're doing a bunch of things this summer. Edmonton... and all that and the Peterborough show. I hope I don't come back there too many times, because I was just there a few months ago. But I'm really looking forward to it.
Mb: Well the last time you were here you played a 500 seater. This time, the festival draws from 3000-7000 people. I think you'll be pleasantly surprised at the turn out for you.
Ron: Ya, I've heard good things about it!
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