“THE CERTAIN IMPACT ON energy prices and the oil industry of what euphemistically is being called the “spill” needs no further description for regular readers of this space. And for those who aren’t, it ain’t good.
Yet for all the justifiable disgust and outrage from the endless images from the underwater pictures showing BP’s crude spewing from its crippled rig to the images of oil-soaked marine birds, Americans show little inclination to renounce their energy gluttony. A graphic from the U.K. Guardian passed along by Barry Ritholtz on his terrific blog, The Big Picture (www.ritholtz. com/blog), shows that the U.S. consumes 25% of global oil output while having less than 5% of the world’s population. This helps explain the Brits’ feeling that we Yanks are being less than honest with ourselves in our pique at BP. “They raise a valid point,” he adds.
What Americans are loath to admit is that there are limits to our consumption. Similarly, the U.S. has absorbed a huge chunk of the world’s savings to satisfy our massive budget deficit. The latest Treasury International Capital data show private long-term inflows totaled an “astounding” $250 billion in the first four months of the year, says William O’Donnell of RBS Securities.
But the European debt crisis probably has staved off that day of reckoning for the U.S. government. Global investors have flocked to dollar assets as it’s become painfully apparent that the euro isn’t ready to assume the role as a true alternative to the greenback.”
It is always gratifying anytime a column of the importance of Up and Down Wall Street recognizes the work . . .
RANDALL W. FORSYTH
Barron’s June 19, 2010