Wednesday, December 30, 2009

Unconventional Gas Extraction and the Need for Water Conservation

According to the numbers released at “The World Gas Conference” held in Buenos Aires, recent advances in shale oil extraction technology have manifested from wishful dream to physical reality much quicker than even the most positive optimists could have possibly imagined. These surprising advances in unconventional gas extraction have opened up 3 trillion barrels of shale oil, which can be cheaply converted to natural gas. This extraction has been enabled by a new form of three-dimensional seismic imaging that allows engineers to find the right spots to use hydraulic fracturing (or fracking), thus freeing up "tight gas" by smashing energy rich shale rocks.

Monday, December 28, 2009

Chinese Banking Strength

Chinese banks' non-performing loan ratio dropped from 2.42% in January 2009 to 1.66% at the end of Q3 2009. In contrast, Western banks have steadily increased loan-loss reserves. Some (such as Tony Wang and Grace Tian of ChinaKnowledge) have pointed to this change as proof that the Chinese banking sector has grown stronger during the financial crisis and is well situated to expand abroad.

Saturday, December 5, 2009

Gold as an Asset Class

My hesitancy to hop on the gold train is based on the limited use of gold as a productive asset. Unlike other precious metals, gold has little real use in a modern society apart from as jewelry. Since determining the fair value of gold is impossible, it is likely that once the inflow into the market dies down, prices will plunge with little downside support.