I’ve been reading about two things of special interest. One is the development of computer technology and the other is the attempt by Congress to legislate lower oil prices.
The first involves a concept called ‘The Singularity’ when computers develop enough to be able to improve themselves.
In 1965, I. J. Good first wrote of an “intelligence explosion”, suggesting that if machines could even slightly surpass human intellect, they could improve their own designs in ways unforeseen by their designers, and thus recursively augment themselves into far greater intelligences. The first such improvements might be small, but as the machine became more intelligent it would become better at becoming more intelligent, which could lead to an exponential and quite sudden growth in intelligence.
The real singularity is when computer scientists create ‘Artificial Stupidity’.
Indistinguishable from the real thing. The Singularity will look and sound just like Ronald Reagan.
“It’s morning in America, again!”
“No, you jackass, it’s 9:33 at night!’
As for the oil markets, prices have been ‘swinging’ according to the New York Times. I suspect the down swings are okay, but the ones that go the other way are too hard to bear:
U.S. Considers Curbs on
Speculative Trading of Oil 
Tim Sloan/AFP-Getty Images“My firm belief is that we must aggressively use all existing authorities to ensure market integrity,” Gary Gensler, the chairman of the Commodity Futures Trading Commission, said in a statement.
By EDMUND L. ANDREWS
Published: July 7, 2009 WASHINGTON — Reacting to the violent swings in oil prices in recent months, federal regulators announced on Tuesday that they were considering new restrictions on “speculative” traders in markets for oil, natural gas and other energy products.
The move is a big departure from the hands-off approach to market regulation of the last two decades. It also highlights a broader shift toward tougher government oversight under President Obama.
Since Mr. Obama took office, the Justice Department has stepped up antitrust enforcement activities, abandoning many legal doctrines adopted by the Bush administration.
It’s going to be hard for the CFTC to distinguish ‘Bad’ speculators and ‘Good’ speculators. Good speculators are needed to take the opposite positions of physical trades – they provide the all important liquidity. The bad speculators simply buy the market and and use their size and transaction velocity to push up prices.
The problem is that one of the ‘Bad’ speculators is Goldman- Sachs, the fourth branch of the US government.
OUCH!
Another ‘Bad’ speculator is China, buying oil with some of its dollar reserves. Here, China would be ‘screwing’ America in the morning again … but, what’s new? I imagine all the producers are buying long- dated crude contracts – and some call it hedging! This would make the producers bad speculators. Why wouldn’t producers manipulate the market? Easier to make cash on oil you DON’T have to deliver … and if for some ungodly reason delivery is required … they actually have crude oil to deliver!
Yeaaaay!
Also, shippers and refiners are selling crude back and forth to each other outside of the reach of CFTC. A tanker load of crude is represented by a receipt. How many times will that receipt change hands between the Gulf of Arabia and the Gulf of Mexico? Between the terminal and the the refinery?
I say, good luck CFTC! I really hope this is the ‘singularity’ thing can bring back Hope. You know, so we can ‘move forward’.
Ronald Reagan, moving forward into morning in America, again …