Colombia

July 12, 2015 10:52 PM


As many of you know, I live in Miami—what you probably don’t know, is that without the cocaine trade, Miami would still be a backwater like Fort Meyers—good weather, some interesting architecture, but not much modern development. Instead, Miami is the capital of Latin America. It got to that pinnacle through the activities of a motley band of Colombians—none more famous than Pablo Escobar. With the cocaine coming in, the money had to go out or at least get laundered into something. As you l... more

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Lionfish

June 4, 2015 10:24 AM


Many years ago, when I still invested in mining companies, I visited a promising exploration target in South America. As we drove up a river valley towards the deposit, we entered a lunar landscape where nothing grew. The valley walls were denuded of vegetation and the river ran orange from acid mine drainage. As we travelled the next 10 or so miles, the earth grew pock-marked by diggings and heaps of alluvium. Within this backdrop there were many villages where all residents seemed to be wo... more

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There Will Be Blood!!! (Part III.v)

January 20, 2015 6:36 PM


Modern central bankers are from the school of thought where there is always an eloquent academic model to approach each crisis with. Naturally, volatility is their enemy—in a highly leveraged world, volatility usually leads to dislocation and crisis. Central bankers obviously know that the halving of oil’s price in a few short months adds unnecessary volatility to their carefully orchestrated worlds. What they want to do is corner the price of oil within a narrow range, suppress volatility a... more

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There Will Be Blood!! (Part III)

January 5, 2015 10:20 AM


At some point during the great housing bubble of the last decade, financial alchemists met over beers to solve an intractable problem. Decades earlier, they had perfected the art of taking mortgages, pooling them into mortgage backed securities and selling them to pension funds, insurance companies and other mindless institutional investors. These funds would always buy the senior tranches that were almost bulletproof, but what do to with the lower tranches? These were the tranches that woul... more

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There Will Be Blood!! (Part II)

December 26, 2014 12:12 PM


Let me be clear: I am no expert on shale wells. I’m not even an “almost” expert in the shale sector. If you called me an idiot when it comes to shale drilling, I wouldn’t argue with you. With that caveat out of the way, I’m going to generalize about the shale sector (anyway). In oil and gas, most of the money is spent up front in acquiring the drilling rights and putting the well into production. You then have revenue and hopefully some profit in the period afterwards, as the well produces ... more

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