How do these people keep their jobs ? The incompetence shown is unbelieveable.

When did competence and positive results stop mattering here in this country? My dog can do just as good a job as these apes and for a lot less kibble as well.

Their fascination with biofuels is much more deserving of criticism.

Volatility is one of the predicted outcomes of peak oil -- it's not a gradual monotonic trend up, it's rapid price shocks and collapses around a rising trend. That's damn hard for anyone who is locked into having to buy a commodity to deal with.

It's easy to second-guess hedging decisions with hindsight. Lots of people criticized airlines for NOT having hedged fuel when Southwest Airlines did. It's just damn hard to predict future prices of anything except on an averaged basis over longer time periods. But no one sells fuel that way.

Come on Jack, these folks (Uncle Ted) are folks from your party (democrats), they are just here to 'help' us. They 'see' the future. They are the true 'progessives'. Be careful, they could take your democrat card away from you.

Pardon me for not being clued in to the various connections between local pols, but could you explain the reference to "Goldschmidt-Hansen." I'm assuming Mr. Hansen is not a should-be-sex-offender, so what is the connection?

Mr. Hansen has served in many government jobs since his days as a fair-haired friend of Mr. Goldschmidt. He is a charter member of the Old Boy Network.

these folks (Uncle Ted) are folks from your party (democrats)

I hope you're trying to be funny. If Ron Saxton were governor, who would be running Tri-Met?

Yep -- same guy, Fred Hansen.

You see, the only party that counts around here is the Goldschmidt crony party. I hope I live to see the day that that changes.

Excuse teh Internet lingo, but I had to LMAO that the same bank that took TriMet for a ride on the derivatives contract also had a front-page Oregonian story announcing that they were opening 20 new bank branches in the state ...

Not trying to defend these monkeys but with gas prices rising as high as they were it probably made sense at the time to lock in. Southwest airlines has been the master of this for years and even they got burned on it.

One of the posters above noted that TriMet's defense of biofuels under the economic conditions is what I can't understand at all. That's the real concern in regards to management.

If that's your only complaint about the management over there, you haven't been paying attention.

Southwest airlines has been the master of this for years

That makes my point. Tri-Met has never been smart enough to hedge fuel cost increases. And it decides to start playing the game at the worst time in history to do so.

Some financial consultant pals probably got a six-figure fee for setting it up. And a bank made a monster profit. What was it that George Passadore did for a living before taking over the Tri-Met board? Uh huh.

This hedge tactic is not just for big-time organizations like TriMet. Remember it was during the same period that at least one of the major US automakers was guaranteeing to pay buyers the difference if their gas cost over $2.99 a gallon.

(Of course, those buyers are not obligated to pay the automaker the difference if gas costs go lower, which TriMet has to do.)

Now, in an ironic twist, the automakers are simply being propped up by the American taxpayer instead of selling cars.

I agree with canucken. It seems like unless you were clairvoyant, fuel prices looked like they would continue to go up. The only thing that stopped and reversed the rise was the economic collapse of the market. If you saw that coming I hope you sold short.

Agreeing with Mitch Conners and
at the risk of being fair to the bus company's management -- which I realize a few of us are not inclined to be -- they were in good company,
In his annual letter to shareholders, Warren Buffett ticked off a list of money-losing mistakes. Among them: He bought a block of ConocoPhillips shares just as oil and gas prices were reaching their highest levels. The move was timed so poorly, he wrote, that even with a rebound in prices, the cost to Berkshire will probably be several billion dollars."
Which makes it sound as if had TriMet employed the world's most successful investor they would be just about where they are today.

Too bad Hilary's got a gig. She could provide a valuable consultation regarding how to play the futures game successfully.

This entire sorry episode is just a perfect example why the TriMet Board needs to be elected by the public instead of being appointed by the Governor. Until such time as there is at least some public accountabilty by TriMet - and currently there is NONE - nothing of substance will change with that agency.

Uh, gee, then all of the local politicians would have to find someone who has had a real job and might disagree with them.

That's all these boards are - rubber-stamping lackeys.

"TriMet Board needs to be elected by the public instead"

Uh, hate to break this to you, but have you looked at what we elected to City COuncil and Metro?

If Warren Buffett were running Tri-Met, would it be cutting service, and dealing with an instant white elephant train line with equipment that it has to figure out how to fix on its own? I doubt it. As the post said, this latest blunder is one in a continuing series.

Tri-met's hedging ratio seems too high at 70% versus a more typical standard among industry in the range of 50%. Also, it should be spread out over the course of a year or so. But Tri-met isn't the only one: Northwest Natural locked in some rather high natural gas prices last year, which fortunately should abate next winter. Then there's the real winner: the city of Portland buying Biodiesel for $7 per gallon under a longterm contract. This one takes the cake.

No, what really takes the cake is all the solar panels being bought with public dollars with an effective price of 50 cents per KWH or more versus the going wholesale market price for electricity of less than 5 cents per KWH. I guess the public and youngsters are impressed by these high end electrics but as usual cost is ignored because the faceless taxpayer gets the tab. Ever wonder what that public purpose charge is on your electric and natural gas bills? It's effectively a slush fund to buy high cost renewables and put them on public buildings. Some of it also goes to build low income housing, and energy efficient appliances for new high end homes.

Their fascination with biofuels is much more deserving of criticism.

Didnt Randy Leonard do the same thing to the city? Taxpayers must be thrilled they are paying $7/gal for biodiesel when they could get regular diesel $2/gal.

http://www.portlandtribune.com/news/story.php?story_id=122834393262807600

This is what happens when the city commissioners read books. Somebody ought to introduce them to some basic math texts.

Agree with previous posters: TriMet is as "bungling" as the geniuses at Southwest, who also got caught in the hedge.

Southwest hedges all the time, and it has been quite successful with the practice in the past.

Tri-Met picked this point in history to get into the game for the one and only time. Great call -- one of many.

Figureatively speaking, the people runing Tri-Met seem to have a private (public not allowed) playground and are aided and abetted in their play by the local media who seem to think PR releases are a form of investigative reporting.

>Tri-Met picked this point in history to get into the game for the one and only time.

But wasn't it understandable from a business perspective, since that was the one-and-only time that fuel prices have spiked that drastically?

But wasn't it understandable from a business perspective, since that was the one-and-only time that fuel prices have spiked that drastically?

What's understandable, at least for those not blinded by the light of Hansen's 25W "brilliance", is that the same monkeys at typewriters writing Shakespeare's sonnets (or whatever) could run Tri-Met better than its current cast of clowns.

And bananas are very reasonable these days.

Southwest is a private corporation that employs its own analysts and traders. Trimet is a tax payer-supported public utility that knows di** about NYMEX futures. The people involved in this decision should be fired. I also wonder whether key bank made political contributions to certain county politicians.

PBJ: TriMet commits $1M for bike Park & Ride facilities

http://www.bizjournals.com/portland/stories/2009/03/09/daily4.html

So they don't have any money to run buses anymore, but they have a million smackers to install new bike racks, and replace old ones.

From what I can tell, everyone who bikes to MAX brings their bike on board anyways. Who's going to leave their valuable mobile possessions at a MAX station?

So if TriMet is so flush that they can spend a million on some pricey new bike sheds, why can't we restore some critical bus service?

The buses was already being starved before the recent proposed cuts. There were 100 more buses running ten or twelve years ago. Those people don't live near MAX. They didn't go away, they just drive now.

A friend recently sold 170 acres of "old growth" rolling forest land in the Redland area to Tri-Met. Tri-Met has all kinds of grandiose recreational plans for the property, involving hiking trails and bike paths and God knows what else, to further satisfy the wannabe earth muffins that infest the Tri-county area. The property is presently outside the Tri-Met boundary, and has 70-acre/one dwelling building restrictions attached to it. Once Metro extends its boundary claws into the area, however, and assuming the economy recovers within that time frame, the land will go on the block to the highest bidder for development. The resulting residential construction, you can rest assured, will resemble smoked oysters packed in a tin.

The property helps support a small migrant population of about a dozen or so blacktail deer, a few coyotes, a handful of grouse, bunnies and the like. My friend has been a concerned and faithful custodian of the property for more than two decades, as were his father and grandfather before him. And said friend is an ardent hunter, as are his friends. But no more...not on the Old Homestead, now out of bounds.

The Metro folks like to drag their cronies out to Redland and show the place off. The only access roadway to the land passes within 30 feet of my friend's house, and continues across the 4-3/4 acres that Metro allowed him to retain, albeit most reluctantly.

With their new tinker toy just out of its box, Metro's bureaucratic urge to "modify" upwelled to the surface, and in a rush. My friend came home one day to find that a planted half-acre stand of 35-foot Ponderosa pine had been thinned, and the remaining trees heavily pruned. The trees, Metro explained, were "crowding one another, and restricting their growth". My friend told the Metro-ites that "crowding and infilling was what Metro does best," and why weren't they interested in continuing that excellent strategy rurally? Was Metro fearful, he further inquired, that the trees would shortly be at each other's throats? His remarks, just as he intended, did not sit well with the brick-and-mortar barons.

But worse than the sterilized stand of trees, says my friend, were the dead branches and pine needles left lying on the ground, to a depth of two feet. Perfect kindling for the bone-dry August-September months to come. Is Metro
concerned? Not in the slightest...somewhere, in their alleged minds, resides the Irrefutable Law of Evidence that forest mulch was absolutely vital to the well-being of the surrounding flora -- and the more, the better.

Oh-K...

The only levity to date -- and how sweet it was, my friend informs me -- occurred when one of the Metro department heads, a female, made a junket to the Old Homestead. She parked her car and proceeded to cruise the timber, declining my friend's offer to accompany her. She was equipped, thank you, with one of those satellite-powered gimcracks that at the touch of a buttom told her where she was at any given moment, in relation to where her car was parked. My friend retired to his front porch, poured himself some Old Crow, and waited. And waited...

Two-and-a-half hours later, his phone rang. It was somebody at Metro headquarters, calling to inform my friend that the lady had called her office to say that she was hopelessly lost in the woods, and to inform my friend of her circumstances -- hence the call. My friend quickly rounded up a couple of his hunting buddies (who were very familiar with the Old Homestead terrain) and together they ventured forth and began scouring the woods.

The Metro lady was soon located, a bit the worse for wear and a quarter mile from her starting point, totally disoriented and tight-lipped. My friend says he bit his own tongue 'til it almost bled.

"The only thing that wasn't picture-perfect about the day," he says, "is that it wasn't raining cats-and-dogs..."

Peak Oil Review, a weekly summary of daily Peak Oil Newsletters from ASPO (Assoc. for Study of Peak Oil) reports this:

Some US airlines hedged their price for jet fuel when crude oil was at $100 a barrel or higher in 2008, assuming that costs would keep rising. But oil maxed out in July at $145 a barrel, then tumbled 75% over the next five months as a global economic downturn took hold. Airlines were forced to pay peak prices for fuel even as the recession cut the number of passengers they served. (3/26, #14)