Goldman Sachs ramped up its forecast, calling for Brent crude to hit $90 a barrel by the end of the year. That's up from its previous call for $80.
The Wall Street bank expects US crude to hit $87 a barrel, up from $77 previously.
"While we have long held a bullish oil view," Goldman Sachs strategists wrote, "the current global oil supply-demand deficit is larger than we expected."
Despite historic surpluses because of a once again booming SE NM Permian basin and our new standing as the second biggest oil producer in the USA, state House Appropriations Committee Chair Patty Lundstrom continues to preach hawkishness as she doubts the longevity of the boom and urges spending restraint.
More worrisome to doves is Lundstrom citing the state's various pension funds as a priority for the newfound wealth, putting the priorities of baby boomers and the yet unborn over the very real needs of today's generation. Needs such as this:
Staff of the Legislative Finance Committee found child abuse deaths in New Mexico more than doubled in fiscal year 2020 from the previous year and the state has the second-highest rate of repeated child maltreatment in the nation. (That data was revised downward by the LFC on Friday).
Experts such as those at the Brookings Institution have repeatedly told state lawmakers and the Governor that the pension funds are not in a crisis. But the children of the state remain among the most disadvantaged in the nation. And they don't get pensions.
As for the Governor, she's on a turtle's pace when it comes to discussing the incredible amounts of new money--literally in the billions:
--$1.4 billion forecast to come in over the state's current $7.4 billion General Fund budget.
--$1.5 billion forecast to go into the state's revenue stabilization and early childhood education funds in the next two years.
--$1.75 billion in federal Covid relief money.
--The state's Land Grant Permanent Fund, which benefits from the energy bull market as well as the stock market, now stands at a stunning $24 billion.
With the Permian one of the most attractive oil fields in the world cost-wise and expected to keep humming along even in down markets, surplus revenues could grow faster and larger than ever.
So where's the plan? Buy more Temperpedic mattresses to stuff it in? And what are the R's doing besides sitting on those mattresses? Not even talk of tax cuts? Why, it's heresy, gentle readers.
The lack of urgency and vision in Santa Fe to put the money to work efficiently is part of the institutional character of the Roundhouse controlled as it is by the Legislative Finance Committee whose motto is if the sky isn't falling today, surely it will tomorrow. (Not to dismiss the excellent oversight the LFC and its staff provides the state. We just disagree on the solutions.)
This kind of largesse cries out for robust leadership with far reaching vision from the executive and the legislature. Or will it be crying time again when those gruesome social conditions rankings come out?
STEPPING UP
That $3.5 trillion spending bill from the President is dividing progressives and moderate Dems over a number of issues, including this one:
The Biden administration is eliminating the stepped-up basis, an egregious loophole that allows the rich to pass down billions of dollars in assets through generations without ever having to pay a single penny on their growing value. It’s a $42 billion per year tax break that overwhelmingly goes to millionaires and billionaire heirs, and it has no place in a fair tax code.
The White House says the provision would not impact farm and ranch owners in rural states such as NM but that isn't stopping those landowners from urging folks to contact the NM congressional delegation to keep them out of harm's way.
The plan to eliminate the stepped up basis has been rejected by a House committee but billions accumulated in this new Gilded Age are going to have to find their way to the taxman, if Biden's sweeping reform bill is to become reality.
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(c)NM POLITICS WITH JOE MONAHAN 2021
(c)NM POLITICS WITH JOE MONAHAN 2021