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The Authority of the Referees
“…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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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.
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.”
Vince Carter (the basketball player) - aka “Half-Man, Half-Amazing” - is officially retiring.
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
….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” -
US crude stocks set an all-time high
Looks like Sable Permian filed
BIG Oxy write-down coming
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 -