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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (53158)	7/8/2006 1:46:14 PM
From: Chispas	Respond to of 116555

Mish, you've probably already seen this one, from London : lfpress.ca

To: mishedlo who wrote (53158)	7/8/2006 2:27:37 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 116555

obviously the new SEC Commissioner is a complete idiot, which is bullish i guess -nfg-... from WSJ: In a speech Thursday before the International Corporate Governance Network, Republican SEC Commissioner Paul Atkins gave a spirited defense of spring loading, calling it a legitimate and low-cost way for boards to efficiently compensate executives. He rejected claims that such awards amount to trading on inside information. "Boards, in the exercise of their business judgment, should use all the information that they have at hand to make option-grant decisions," Mr. Atkins said. "An insider-trading theory falls flat in this context, where there is no counterparty who could be harmed by an options grant. The counterparty here is the corporation -- and thus the shareholders." i guess this idiot thinks it's OK to OVERLY dilute EXISTING SHAREHOLDERS to benefit insiders. Cyberonics Inc., a Houston medical-device maker, drew questions for a June 2004 grant made to several executives on the day a Food and Drug Administration advisory panel recommended approval of a Cyberonics device. Trading in Cyberonics was halted that day. Grants carried as their exercise price the closing price of the prior day. After trading began again, shares leapt 78%. so if they issued the options 1 day later, they would have issued 44% fewer options, resulting in 44% less dilution to shareholders (and actual dilution was much higher if options were issued at the money--in that case the spring-loading resulted in a gift to insiders worth 78% of the value at issuance). but according to the moron in charge of the SEC, what they did was fine.

To: mishedlo who wrote (53158)	7/8/2006 4:28:35 PM
From: Elroy Jetson	Respond to of 116555

That's the economics I'm familiar with when it comes to tar sands. Shell will spend $11 billion to increase production by 100k barrels per day. At an overly generous $75 per barrel, minus a 1/8 royalty, and a very optimistic production rate of 365 days per year, thats additional annual revenue of $2.4 billion. That's less than a 22% return, which wouldn't be an approved project at many oil companies. An this overlooks the variable costs. If we guess variable costs are $25 per barrel, then you're down to a 13.5% rate of return - based on super-optimistic production estimates. RIP if oil prices decline. .