The Authority of the Referees
Discover more from Reserve Report
“…and the way it worked, was that the referees in the Art Market - the experts who declared a painting was by this old master or that one - those experts were encouraged to make mistakes. A Ref who attributed a painting to a famous artist was paid a lot better than a Ref who said it was by some obscure assistant” - Michael Lewis, The Hand of Leonardo
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THE REFEREES.
Without going into it, a deal - that we recently looked at - appears to be transacting at a comically high price. The scenario required for those assets to pay back is something along the lines of Saudi Arabia & Qatar’s hydrocarbon supply magically disappearing from the map.
Yet - in this case (as is common) - no whistle was blown to stop the bid.
To an extent, Oil & Gas has its own Referees - auditors, bankers, reserve auditors…
… and in a situation like this, you’d expect an advisor to stop the play.
This event reminded us of Michael Lewis’s “Against the Rules” - a podcast that profiles “the attack on the authorities of the referees in American life”.
In his episode, “The Hand of Leonardo”, Lewis outlines the attack in four steps:
A Market in need of a Ref (just to survive)
The Seller captures the Ref
The Compromised Ref becomes a Stable Ref... an integral part of the market; he absolves both buyer & seller of blame
... you hear the 1st creaks & groans of system about to crash under the weight of its own stupidity
We recommend giving that episode a listen.
And if you’re just now trying to (re)establish how a game is being played, assume the referees are compromised.
And play accordingly.
And as the Wirecard events have shown us, it’s not wise to count on a whistle -
DALLAS FED SURVEY.
The Dallas Fed Energy Survey was published on Wednesday.
The survey was conduction from June 10–18.
168 energy firms responded:
115 E&Ps; &
53 OFS firms
Traditional indicators - regularly tracked in the survey - can be found here.
We found the Special Questions section (where these graphics come from) to be particularly useful.
And the Comments section had a bit of everything -
While this comment made us laugh (someone needed a coffee)…:
“Is oil and gas private equity over?”
…we found this take to be insightful:
“Banks are completely unprepared for what is heading their way. They will need to figure out how to own energy assets this fall.”
SPORTS.
Vince Carter (the basketball player) - aka “Half-Man, Half-Amazing” - is officially retiring.
On October 6th, 2009, a (then) young teammate - Dwight Howard - jokingly referred to Vince as “Half-Man, Half-Retired”.
Carter had had knee injuries that stripped him of his Jordan-esque high-flying abilities, from which he never fully recovered.
3,915 days - nearly 11yrs after Howard’s joke - Carter is leaving the court.
We are once again reminded that sports are one of the last true, uncompromised emotional outlets in our society…
… a place where both the fans & the players can truly express how they feel:
In hockey, you can literally punch the other guy
A Knicks fan can actually call for the head of James Dolan (and they do)
And a basketball coach (Popovich) receives write-in votes for president
From an aesthetic appreciation to awe-inspiring surprises…
….the ways Carter expressed himself through basketball - a career that touched 4 decades - was a rare combination of the best human emotions.
He had a gift… and that gift wasn’t taken for granted.
~40yrs ago - by some kind of magic - a boy in Florida picks a ball, and eventually learns to fly.
It was as if the basketball gods said “for the love of the game, let’s give them Vinsanity” -
OTHER NEWS.
Tracy Alloway goes for 30min w/ Carson Block - this combo is always worth the watch, regardless of topic -
US crude stocks set an all-time high
Canada gets downgraded by Fitch
Looks like Sable Permian filed
BIG Oxy write-down coming
Tapstone put in a stalking-horse bid for Templar…???
Oklahoma: the OCC shuts down proration
Well, a 2nd wave of the virus appears to be upon us (at least in Texas); if you’re looking for a show to watch, and you haven’t seen Occupied, we recommend it. Long-story-short, a naive Green Party takes over Norway, tries to shut off Oil & Gas production, & geopolitical chaos (little-green-men & all) ensues - catch y’all next week -