Here's a thought: Are too many countries playing a kind of economic chicken? Their refusal to control stimulative policies, despite increasing inflation and runaway oil prices, has them in a highly risky position.

Many countries are already experiencing double-digit inflation -- Russia, Turkey, South Africa, India, Indonesia, and the Philippines -- despite recent interest rate increases.

"These guys are falling behind the curve," says Edwin Gutierrez, an emerging-market bond portfolio manager at Aberdeen Asset Management in London, in the hopes that the surge in food and energy prices will prove short-lived. "It's a very dangerous game," says Mr. Gutierrez.

One of the few exceptions? Brazil:

...There, the central bank moved quickly to raise interest rates despite comparatively mild price pressures. The country suffered enormous inflation in the late 1980s and early 1990s before getting the problem under control. "Brazil knows better than anyone what happens with hyperinflation," says Terrence Gray, who manages $3 billion in emerging-market stocks at DWS Scudder, an arm of Deutsche Bank.

[via WSJ]

Missed this earlier today, but the editorial in today's FT by BP CEO Tony Hayward is worth reading in its entirety. He beats up on three myths, as he calls them, largely having to do with the role of speculators in the current price run-up; the idea that we are close to running out of hydrocarbons; and that we can switch quickly to a low-carbon economy.

For my money he is less convincing on points two and three, but he makes sense on point one. Resource nationalism is a big issue, as is under-investment -- even if I loathe the line of rhetoric that says our problems are above the ground, not below -- and that needs to change speedily. Trouble is, with countries seeing massive revenue increases from increased price, and thus not needing to invest and produce more, there is little incentive to spend, even at these high price levels. Strangely enough, it means there is little incentive to invest when prices are high, as above, and there is little incentive to invest when prices are low, for obvious reasons. Welcome to the strange and messed-up global oil market.

Here he is on the market's fundamentals:

Yet energy supply has struggled to respond. Production by the Organisation of the Petroleum Exporting Countries fell by 350,000 barrels of oil a day last year. The production situation is even more challenging in the market-oriented nations of the Organisation for Economic Co-operation and Development, where many existing basins are maturing fast. In Britain, for instance, North Sea gas production recorded the world’s lar-gest decline for the second year in a row, falling by 10 per cent in 2007. UK oil output rose very slightly, but this is a one-off, based on a single big new field. Production remains on a downward trend.

The last time oil prices surged to this kind of level, 30 years ago, new production from the North Sea helped bring prices down. This time, new OECD production will have to come from frontier provinces such as the Canadian oil sands, the Arctic and the deep waters of the Gulf of Mexico.

Another big impact on supply is Russia, where production has begun to decline. It is a little-known fact that, until now, the growing demand for oil from China and India in recent years has been met almost barrel for barrel by rising supply from Russia.

As an aside, Hayward says the new BP Statistical Review of World Energy is out, but I only see last year's edition.

I'm on record saying that Yahoo and Microsoft would both be better off if their respective CEOs found non-company-related things to do with their time, but I was still interested to see this chart from the new Glassdoor.com service. It essentially drives corporate transparency, allowing you to glean salaries, managerial quality, etc., all via people who work there. 

It's a nice idea -- call it a PG and more quantitative version of FuckedCompany.com -- and I'm at least intrigued. While waiting to see how Glassdoor progresses, here is one piece of data the company has extracted to demonstrate its efficacy: A comparison of employee ratings of Yahoo's Yang and Microsoft's Ballmer.

My conclusion: Both companies' employees are delusional. 

Nattering about Steve Jobs' health, as well as a WSJ story this morning about the cult of personality that grew up around Broadcom's Henry Nicholas, got me thinking about personality premiums at public companies. What U.S. public companies have the largest share price premiums attached to their current CEOs? In other words, which companies would see the largest share price declines were their CEOs to be incapacitated, hit by a bus, abducted by someone from Betelgeuse, etc.?

Some candidates:

• Steve Jobs. Apple's CEO is the heart and soul of the story at Apple. That company has to be near the top of the list of PP (Personality Premium) stocks.
• Warren Buffett. Berkshire Hathaway's main man likely doesn't have the premium he did a few years ago, but it's still outsized. A transition is coming, and has been long-discussed, but the stock could easily decline on a change.

Anyone have suggestions for other CEOs with positive premiums? Let's leave aside the CEOs with negative premiums for now. We can beat up on them later.

Nice of the fine folks at Pensions & Investments magazine to give my site a Silver Medal in their search for the best financial blog. If I have to lose to anyone, I suppose I can tolerate losing to my friend Barry -- even if he is a loud bastard.

More here and here.

Turns out that the Panama canal has been misbehaving in recent weeks, which likely hasn't been helping U.S. oil inventories. Transit times for the canal had ballooned to 10 days, and only now are they down to a more typical 36 to 48 hours. Similarly, the backlog of ships has fallen to 36 from a whopping 130.

Why the Panama problem? No-one is really sure. The Panama Canal Authority says it was lock repair, plus heavy arrivals, and a labor dispute, but shipping agents aren't convinced, with one saying that it was the worst he had seen in his lifetime.

By way of background, the Canal handles 600,000 bbl/d of crude oil, and such shipments represent about 15% of canal traffic.

[via Lloyd's List]

I've been messing with the latest data from BP's 2008 Statistical Review of Energy Markets. If I get a moment I'll do more, but here is an animated look (via Google chart widgets) at oil consumption and growth therein across U.S., Asia and Europe from 1965 until today.

Ugh. For some reason it's not remembering to resize the bubbles based on market size, but works properly in the spreadsheet. Will try to fix later, if I have time. For now you can pick the dimension via which you'd like to size the respetive markets from the drop-down on the chart.

I haven't been mentioning books here as often as I used to, so I'll try to get back on track. I'm just finishing up Rick Perlstein's fast-paced Nixonland, and I highly recommend it. It is either a fascinating  look at the rise of paranoia politics in America during the 1960s and early 1970s, or it's an entertainingly-written screed by yet another Nixon-hater.

Where do I come down? I think it's the former, but you can read it and make up your own mind.