Buffett Partner Munger Wrong; Energy Independence is Smart: Citigroup’s Morse
Berkshire Hathaway (BRK-B) Vice-Chairman Charlie Munger made headlines Wednesday for arguing against U.S. energy independence. He said every barrel of imported oil means more domestic supplies are available when needed.
Related: Energy Independence Is A Dumb Idea: Berkshire Hathaway Vice-Chair
Meanwhile, on Capitol Hill, a Senate panel Tuesday questioned whether banks should be allowed to control infrastructure like warehouses and pipelines used to store and transport essential commodities. The subcommitee hearing followed a New York Times investigation, which found that the control of aluminum warehouses by Goldman Sachs’ (GS) had inflated the metal's price and cost consumers billions of dollars.
Related: Oil & Gas Companies Are Setting ‘Our Democracy on Fire,’ Says Gasland Director
The Daily Ticker asked Ed Morse, head of global commodities research at Citigroup (C), about both. The former U.S. deputy assistant secretary of state for international energy and one of the 12 smartest people on Wall Street (according to Business Insider), says Munger's argument "is not correct" because if a country is producing as much oil as it's consuming or has a surplus..."that means when there's a disruption of supply in the world market, you can weather that storm better than any other country in the world."
Related: Oil Tops $100 Again, Here’s the 1 Thing Energy Investors Need to Watch
And when asked about the hearings on banks' control of commodities, Morse admits he has "complicated thoughts" on the matter (yes - we do realize he works at a big bank). He went on to explain the dynamics and new rules surrounding warehousing that will positively affect the prices of goods.
“The world is moving globally toward more competitive conditions no matter what the result of those hearings may be,” says Morse. He explains why in the video above.
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