5/18/2020

Hello there,

I hope everyone had at least the 43rd best weekend of their lives. The Last Dance is officially out of new episodes so I am pretty sure the apocalypse is about to actually happen. Wait a second. What's that? Live sports returned this past weekend?!?! Huzzah! That is right. Bundesliga futbol (Germany's top soccer league) returned this weekend to provide the world with its first view of live sports in what seems like 85 decades. Unless you count the Korean baseball league as a live sport. No one does though. I never thought I would see live sports again in my lifetime. I am not that familiar with Bundesliga but I watched and was happy to see live competition again. There are a handful of American players in that league as well so that helped to make it that much more interesting. Hopefully the young guns that are playing in that league can develop into solid players that can maybe get the US men's team to qualify for the next world cup.... SAD! There was some positive news last week however. Gilead Sciences made some headway on developing an effective treatment of Covid-19 and Moderna Inc released positive news on a possible vaccine. China and Iran are doing dumb stuff again. The number of US oil and gas rigs continues to decline and the annual debate over "peak oil" is making its rounds already this year. All in this week's edition of the #bucketsblog.

May 18, 2020

Gilead, no- not the Handmaid's Tale Gilead, is developing a drug to take over the world

• With great Gilead comes great responsibility to find a way to take over the world. In the real world, Gilead Sciences has developed a Covid-19 fighting drug that kinda sorta is effective against the virus and goes by the name of Remdesivir. No one knows how any medicine in the world actually works, but the Wall Street Journal (WSJ) took a shot at explaining how Remdesivir works:

• As you can see, it is fairly simple in how it works. It does some crazy RNA stuff and invents cloning while in a cell and produces little RUSS cells that angrily dunks on the bad cells in the body. I think that is how scientists should explain things moving forward. Good cells are "RUSS" cells, bad cells are "pat-bev" cells, and cells that make people do shady things are "snake" cells. Way easier to understand. Remdesivir has been used in hospitals on critically ill Covid-19 patients since receiving emergency authorization from federal health regulators on May 1st. The drug has had some success and it is now being combined with various other treatments in hopes that Remdesivir will find a teammate or two that can wreak havoc with it on the virus consistently. Like when MJ was paired with Pippen and then later on with Rodman. That's what the virus needs to see in order to be scared into submission. It needs to see a prime Rodman cell with some type of crazy green dye in it so it matches prime Rodman's hair color. I really need the NBA to come back so my sports references can expand beyond whatever I just watched on The Last Dance. The hope is for Remdesivir to follow the path that HIV treatments did in the 1980s. There was an early agent developed in the 80s to combat HIV and it was paired with various other treatments in order to try and find the ultimate combination. In doing that, treatment of HIV became progressively better over time. However, Covid-19 is needing a solution asap if the world doesn't want to fall into an economic abyss where the Handmaid's Tale Gilead people might actually take over. Scientists have a year in this case as opposed to a bit more time in the HIV situation. There are a hundred-ish other treatments and vaccines being developed worldwide as well so hopefully one of those ends up working and can be mass produced in a short time-frame. That is, unless China or Iran screws things up by trying to hack medical research on the virus. Ah, right on cue.

When the world needs someone to screw something up, who you gonna call: China-ran!

• Dude, okay that was a poor attempt at mimicking the Ghostbusters theme song, but you get the point. China and Iran are up to their Scooby Doo villain ways again and are meddling in things they shouldn't be meddling in. SEE! Another reason why lives ports need to come back as soon as possible. Play it in a Truman Show type world or something. No fans. That's fine. Let's just make it happen. Ghostbusters and Scooby Doo are popping up in a blog that is sports and news based. I think the world just hit rock bottom. Chinese hackers are hacking more than RUSS when he doesn't get a foul call he thinks he deserves and then proceeds to foul the absolute spirit out of an opposing player so the game stops and he can make his point, sternly, to the blind referee who missed the call. According to US officials:

• Iran has also been hacking the same type of American firms since at least January 3rd, also according to US officials. The good news is that these officials are not the same officials who RUSS thinks are blind. Cybersecurity researchers have stated that Iran's primary target is none other than Gilead Sciences. Times have changed over the years and a cyber-attack is getting closer to being declared an act of war, according to US officials. These officials are viewing this act as a "direct attack on US public health" since they have hindered vaccine research in a few cases. The global, no-rules for some countries, pursuit of a vaccine for Covid-19 is the "Holy Grail" right now, according to assistant attorney general for national security John Demers. In his words:

• Luckily for America is that we have Indiana Jones on our side and if anyone can find anything Holy Grail-like then it is Jones. You can hack a computer, but you can't hack a Jones. Unless you are RUSS and you think Jones just fouled you.

US oil and gas rigs collapsing quicker than snake's mental fortitude in a Twitter battle

• Question: How many burner accounts does snake activate when he's getting obliterated for being an idiot on Twitter? Answer: Infinity. Question: Is America's oil and gas rig count at an all-time low? Answer: Yes. Wild times we are living in. According to Baker Hughes, oil and gas directed rigs in America fell by 34 for the week ending May 8th to arrive at an all-time low of 374. Within these numbers, oil rigs fell by 33 to settle at 292 and gas rigs just by 1 to arrive at 80. The prior all-time low was set in May 2016 at 404. Baker Hughes began tracking rig data in 1987. This isn't all that surprising considering a supply shock (Saudi price war with Russia) and a demand shock (Covid-19 causing lockdowns) happened at the same time to create mega-black-swan. Kind of like when Dwight created "mega-desk" in an episode of the greatest TV show of all-time, The Office. The world just created mega-black-swan for the oil industry. America's drillers have cut rigs by an average of 52/week since mid-March when the entire world started to go into lockdown mode and caused fuel demand to drop by a staggering 30%. The Reuters article included a note of how analysts are expecting oil and gas co's to be very hesitant to bring back rigs and return to growth mode throughout 2021 and 2022. Investors were already hammering E&Ps to focus on returning cash to shareholders as opposed to the old paradigm of growing production at all costs. Now the pressure intensifies and it would be highly surprising if oil and gas co's choose to chase increasing prices by increasing drilling over the next couple of years. A handful of E&Ps may indeed increase production, but it will likely be through M&A instead of organic growth. Cowen & Co, an E&P research firm, stated that 2020 capex has declined by 45% across 37 independent E&P co's that the firm tracks. So the decline in rig counts is following the same path of capex reductions which makes a ton of sense. Not a lot makes sense in the world now-a-days but at least that does.

DID WE HIT PEAK OIL? -- The question that is asked every couple of years

• Everyone wants to be a baller and a shot caller and most people are neither. The trick is, if you can be a shot caller then you most assuredly can be considered a baller as well. That or you can just take the easy route and put 20" blades on the Impala. That is the real secret to being both without having to try that hard. There have been quite a few pundits who have tried to take the shot-caller route in the oil industry by mightily declaring that the world has hit "peak oil." Peak oil's definition according to Investopedia:

• Peak oil was a popular declaration before hydraulic fracturing came into play. Also from Investopedia:

• Long story short, peak oil occurs when demand outpaces supply and supply basically has no chance to catch up. Peak oil in the traditional sense is clearly not in play, but the definition is getting tweaked a bit. In today's world, the definition is basically asking if the world has hit its peak oil demand even though supply is readily available. I don't think anyone in history would have predicted that peak oil demand would have been reached without a massive supply deficit occurring simultaneously. Shell CEO Ben van Beurden believes it "is hard to say" if demand will ever go back to where it was pre-covid-19 in a Bloomberg interview last week. Most analysts thought peak demand was not going to hit until the late 2020s or sometime in the 2040s. It also seems likely that analysts throughout history have always said peak demand is probably 1 to 3 decades away and have just kept moving the time horizons out further whenever a new decade arrived and oil demand was showing no signs of peaking. The world was using ~100mmbpd of oil until mega-black-swan happened. Mark Lewis, analyst at BNP Paribas Asset Management, believes that 2019 may end up being the peak for oil demand. He believes that some of the demand loss that was caused by the mega-black-swan event may never come back and oil demand could stick around in the 95-100mmbpd range for the next several years before slowly settling into a long-term decline pattern. Oil demand has always been very resilient however since the base product is used in so many products around the globe. Peak demand could indeed have happened. There is always a chance of that, but it seems unlikely at the moment. The article notes that the number of analysts who are calling that oil demand has peaked is in the minority. IHS Markit, a major oil and gas research co, sees 2019 oil demand coming back by 2022. Maybe by then, RUSS and Harden will come back to OKC to join up with SGA, Adams, and Bazley to win a title. That would be the ultimate baller, shot-caller squad. Well. Maybe. If OKC is allowed to play with three balls on offense at all times, one for RUSS, one for Harden, and one for the other three guys, then maybe that offense would be dynamite.

Thoughts of the week:

• Getting a hair stuck in your mouth has to be a million times more gross when you’re bald. (via The Hustle)

• Alarm clocks are maybe the only device that make you mad in both scenarios, whether they work or not. (also via The Hustle)

• I just figured out this past week that any cake can be a cupcake if you put it in a cup.