An Oil Titan Rich with Surpluses

Norway is oil-rich and is home to one of the strongest currencies in the world this decade. It’s also an incredible country gifted by warm people and a strong work ethic.

Prior to my arrival last Sunday, I had last visited Norway back in 1997. That trip was short – barely three hours following a quick stop from Copenhagen via an overnight cruise.

But my arrival in Oslo on Sunday was certainly memorable…

May 17 is Norwegian Independence Day. Oslo was overwhelmed by a massive parade celebrating the country’s independence from Sweden in 1814. Driving home the celebratory mood was also Norway’s victory in Moscow as it won the Eurovision Song Contest. What a party! I didn’t sleep that night – nor did anyone else in Oslo because festivities didn’t end until about 3am.

I was in Oslo to make presentations to Norwegian insurance and investment management companies. I was impressed by the Norwegians, their candid opinions, warmth and deep intellect. I was also fascinated by the cities’ modern design – heavily influenced by wood, similarly to Denmark.

Norway is home to the best-performing currency in Europe this year. In fact, since 2000 the Norwegian kroner has remained strong vis-à-vis its largest trading partners; the currency has also blasted higher against the sagging dollar this decade rising a cumulative 17%. Though it has lagged against the euro since 2000, the kroner has appreciated versus its Swedish neighbor.

Norways means oil – big oil. This is one of the richest countries in the world whereby the state pension fund has an enormous US$324 billion dollars in assets. That sum equals roughly $80,000 per citizen. Through its vast surpluses, the Norwegian government has prudently invested its assets this decade but like other state pensions worldwide, it did suffer losses in 2008’s market meltdown. The recent strong outperformance of the NOK versus foreign currencies has also adversely impacted first quarter results, down 8.7%.

Norwegians, however, are very domestic when it comes to investing.

Many Norwegians prefer to invest locally and refrain from global investing. The country is home to the largest energy-related asset management infrastructure with dozens of oil and gas mutual funds and other collective investment products. Also, if you’re looking for high quality investment-grade oil-related bonds, Norwegian mid-cap companies are still selling at a discount to par and offer attractive interest rates in kroner.

My message to Norwegians this week can be applied to other investors, too.

With the Norwegian kroner strong in 2009, my advice was to start selling the currency in favor of gold. As an investor, you always want to sell from a position of strength, not weakness.

Since 2005, gold prices have appreciated versus all major currencies, including the kroner. And while the Norwegian kroner is probably the best-managed currency in the world, its future is tied to oil and gas.

Norway is still exploring in the North Sea but has yet to find a major new offshore oil discovery this decade and like other major producers is struggling to replace its annual production. Peak Oil has arrived in Norway just like it has in Russia and many other oil-producing countries in and outside of OPEC.

No currency can remain strong indefinitely. As oil prices collapsed last July, the kroner quickly plunged. It has since recovered along with the price of oil. Yet this was a reminder that despite Norway’s strong balance-sheet its performance is tied to energy prices.

Diversification is essential even for a strong balance-sheet like Norway. I’d be reducing my exposure to the kroner in favor of gold – still the ultimate currency and eventually the only inflation-hedge ahead of a rapid expansion of the monetary base virtually everywhere since late 2008.

http://rosemanblog.sovereignsociety.com/2009/05/the-view-from-norway-an-oil-titan-rich-with-surpluses-.html

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Pianist Leif Ove Andsnes’s successful collaboration with his compatriots, the Norwegian Chamber Orchestra, gained a Grammy nomination for their recording of two Mozart concertos earlier this year, and his pairing of concertos by Mozart and Beethoven was the attraction of the NCO’s current short British tour.

Andsnes’s style of directing from the keyboard is as economical as his playing, so in Birmingham’s Town Hall it may have been those looking down on proceedings from behind the platform, and seeing his face rather than his back, who had the most interesting perspective.

Yet the rapport between pianist and ensemble was clearly audible. In Mozart’s Concerto No 14 in E flat, K449, which opened their programme, the central andantino’s exchanges found Andsnes and the instrumentalists expressively tailoring the phrasing each to the other. While it was Andsnes’s crystalline passagework that shone out in the final rondo, they achieved a seemingly spontaneous ebb and flow of tempo.

By contrast, the performance of Beethoven’s Third Piano Concerto in C minor, Op 37, had a natural nobility and integrity. Both in the silken arpeggios of the first movement’s coda and the playfulness of the finale, the debt to Mozart emerged, making this a performance full of insight.

The concertos flanked works presided over by Terje Tønnesen, the NCO’s violinist director. Prokofiev’s Classical Symphony was crisp in discipline if at times curiously mannered, while Grieg’s Holberg Suite was played – by heart and from deep in the heart – in honour not of the Eurovision win (delighted though they were), but of Norway’s National Constitution Day.

http://www.guardian.co.uk/music/2009/may/20/review-nco-tonnesen

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July 6-July 12, 2009

In the Lofoten Islands in the northern part of Norway, one of the most fascinating sceneries in Europe, we celebrate every year in July a week of classical chamber music with leading musicians from the international arena.

The Lofoten Islands, with its steep mountains rising more or less directly from the sea, and with 24-hour daylight, is the most perfect environment for taking in music, and music lovers from many parts of the world gather in many different venues, mostly wooden churches, to listen to Haydn, Mozart, Beethoven, Schubert, Schumann, Brahms and others.

This year’s programme features the brilliant Orion String Quartet from New York; pianist Anton Kuerti from Canada, with a direct pedagogical line to Beethoven; the Norwegian Grieg Trio; Engegard Quartet; and grand old man Arve Tellefsen on violin.

www.lofotenfestival.no

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Alexander Rybak’s win for Norway in the Eurovision Song Contest on Saturday evening was well-timed; it was on the eve of Norway’s Constitution Day.

Eurovision win aside, Norwegians don’t necessarily need a good reason to celebrate Constitution Day; the Norwegian people are some of the most patriotic in Europe and the iconic national flag, red with a white and indigo blue Scandinavian cross, can be seen waving from buildings and in the hands of most Norwegians at festivals and parties.

Prime Minister Jens Stoltenberg, on a visit to Spain, was greeted by 2,000 Norwegian expatriates waving flags in the town of Torrevieja, where he gave a speech, giving warm greetings in both Spanish and Norwegian. Stoltenberg noted that 40,000 Norwegians live in Spain, roughly 1% of Norway’s current population, and was impressed by the turnout not only from Norwegian citizens but also from Spanish people who also helped celebrate Norway’s Constitution Day. Stoltenberg was later joined by Spanish and Norwegians at the old sailor’s church in Torrevieja, where he placed a wreath commemorating fallen Norwegian sailors.

In Norway, the annual Oslo Children’s Parade, a national institution, occurred in the morning with children from all 111 of Oslo’s schools taking part. The children walked with brass bands playing festive music up Oslo’s main street, Karl Johans gate, to the Royal Palace where they were warmly greeted by the Royal Family. Crown Prince Haakon and Crown Princess Mette-Marit, who greeted children in Asker earlier in the morning, toured the Oslo ward of Grünerløkka in the afternoon. All celebrations in Norway went off with few errors, the most notable being the delay of trains using the Oslo Tunnel, in which a helium balloon floated into the tunnel, causing a brief scare for train operators.

Celebrations for Norway’s Constitution Day occurred all over the world, from a gathering in a Shanghai hotel where 300 Norwegians feasted on imported traditional Norwegian foods, to a street parade in Brisbane, Australia, where the police had to stop traffic for the revelers. Norway’s neighbor Sweden was especially happy on Constitution Day, where Norwegian-Swedes dressed in folk costumes and held up copies of the newspaper Expressen, who deemed Norway’s winning Eurovision song “the best winner since ABBA” and published a large headline in Norwegian, stating “We look forward with you.”

Constitution Day will end with Norway’s new national hero Rybak, deemed “Alexander the Great” in the Norwegian newspapers, arriving at Oslo’s Gardermoen airport at 9:25 p.m. local time (1925 UTC). Record crowds are expected to greet him, as he invited everyone via state television to the airport for his trip home.

http://en.wikinews.org/wiki/After_Eurovision_win,_Norwegians_show_their_patriotism_on_Constitution_Day?curid=126423

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After an exciting voting in front of thousands of people in a fully packed Moscow Olimpisky Indoor Arena and millions of TV viewers all over Europe, it was finally Alexander Rybak from Norway who received the highest number of points from televoters and juries from the 42 countries participating in this year`s edition of Europe`s favourite TV-show! Norway managed to gather 387 points altogether – a new record! -, followed by Yohanna from Iceland with 218 points and Azerbaijan`s AySel & Arash who collected 207 points.

Europe experienced a breath-taking show live from the Olimpisky Indoor Arena in Moscow tonight with 25 acts from 25 countries giving their very best. 20 of these had qualified from the two Semi-Finals while host nation Russia and the so-called `Big Four` – France, Germany, Spain and the United Kingdom – were automatically set for the Final. After all 42 countries had voted, it was Alexander Rybak from Norway who was the lucky winner with his song Fairytale, collecting 387 points altogether.

Alexander Rybak was born in Minsk (Belarus) on the 13th of May, 1986. He grew up in Nesodden just outside the Norwegian capital Oslo. Alexander has played violin and piano since he was five years old, he also composes his own music and sings. Alexander has performed with artists like Arve Tellefsen, Morten Harket, Hanne Krogh and Knutsen & Ludvigsen. In 2006 he won the Norwegian talentshow Kjempesjansen with his own song Foolin’. Alexander has performed with one of the worlds most celebrated violinists, Pinchas Zukerman. He also played the role of the fiddler in Fiddler On The Roof at Oslo Nye Theatre (2007) and has a role in the forthcoming movie Yohan – Child Wanderer which will be released in August 2009.

50 percent jury impact
This year, the European Broadcasting Union introduced changes in the voting of the Eurovision Song Contest Final as for the first time in years, the winner wasn`t decided solely by televoting. In contrast, a mixture of 50% televote and 50% jury was used. For this purpose, national juries consisting of five music industry professionals gathered in all 42 participating countries who ranked the songs in Eurovision Song Contest style, giving 12 points to their favourite song, 10 points to their second favourite, etc. The results of the five jury members were then added up and accounted for 50% of the country`s votes. Those results were then combined with the televoting results.

http://www.turkishpress.com/news.asp?id=343608

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On the 100th day anniversary of Barack Obama’s presidency last week, I was speaking to 1,000 media, agency and marketing executives at “Gulltaggen,” the Nordic Countries Interactive Advertising Bureau annual conference in Oslo, Norway. Unlike here in the U.S., where rabid Republican partisanship borders on anti-Americanism (and often seems to cross that border), among Norwegians the enthusiasm and support for President Obama is unrestricted and seemingly universal. My previous visit to Europe was before the November election and Europeans truly didn’t believe Obama could be elected. They logically thought the same America that had foisted George W. Bush, Dick Cheney, Condoleezza Rice and Donald Rumsfeld on the world could not embrace Barack Hussein Obama as its president.

The change in attitude toward Americans among Europeans, at least among Scandinavians, is palpable. Once again, an American accent is met with enthusiasm rather than sullen rejection and even anger. Whatever your politics or your perceptions of President Obama’s first hundred days, it is gratifying that we can now travel to many countries without the need to constantly be on the defensive. There are those here who resent the Obama apologies during the G-20 Conference. I, for one, am grateful that I no longer feel the need.

The Gulltaggen (Golden Tag) Conference is among Norway’s largest and most important media events. Other speakers included Wired editor Chris Anderson, who previewed his soon-to-be-released book “FREE: The Past and Future of a Radical Price;” author and pundit Seth Godin; Jonathan Kish of McCann Erickson Israel; Mike Walsh, author of “Futuretainment — The New Media Revolution;” and the engaging Dr. Kjell A. Nordstrom, who spoke on “Funky Business Forever.” Norway’s media business continues to be dominated by newspapers and leading newspaper companies. They entered the online business early, are capturing the online classified advertising business, and while struggling with a declining ad economy they appear in much better shape than their U.S. counterparts.

While there is extensive competition from satellite television channels that cover Europe, local TV is dominated by three channels, led by government funded NRK and independent TV2. There is no advertising on NRK and the independents are limited by regulations to airing commercials between programs. Ad restrictions in Norway have slowed DVR penetration.

Because so little TV advertising is available, the global advertising recession is having less impact in Norway and other regulated countries than in the U.S. While the U.S. advertising business is expected to lose 25% of its revenues between 2007 and 2011, Norway’s ad economy will decline by less than 10%. And advertisers have embraced online advertising with enthusiasm and creativity, albeit with minimal comparative impact from video, social networking or even mobile applications.

The U.S. interactive business community is influenced heavily by executives from the traditional media players, but is dominated by companies that have emerged since the mid and late 1990s. VC funded companies proliferate. Vertical ad sales networks are ubiquitous. In the Scandinavian companies, traditional media companies have either not yet felt the impact of the new media or they have been more aggressive participants in the emergence of online business opportunities.

In my conversations with leaders of the interactive business community in Norway, I searched for parallels and comparisons to the challenges and difficulties, as well as the opportunities, here in the U.S. Overall, I experienced far less distress, more sense of opportunity, and less economic fear. There is less dependence on VC funded business models and more creativity. There is not a great deal to be learned from the Scandinavian experiences, as best I can tell, and even less those in Scandinavia can learn from their U.S. counterparts.

http://www.huffingtonpost.com/jack-myers/president-obamas-first-10_b_196609.html

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For wild swimming fans, there is nowhere more beautiful or dreamlike than Norway’s fjords and lakes on a midsummer’s evening

There is something about wild swimming, about cutting your hands through the water of rivers, lakes, seas, that a dip in even the sleekest of infinity pools can’t match. It’s the freedom, the swirling of currents on your skin. But most of all, it’s the total immersion in a natural landscape, the feeling of being a continuous part of the elements — water, earth and sky.

Norway’s landscapes must be some of the most aesthetically daring arrangements of water, rock and sky anywhere in the world. Swimming in its steep fjords and sweeping valley lakes is an experience that’s practically operatic. In summer, not only are the water temperatures bearable, but the sun shines on late into the night and, in some places, never sets.

Bergen in July had taken on a strangely Mediterranean climate. My friend Christina and I were starting our trip with a few days there, staying in a boutique hotel called the Hanseatic, carved from a medieval warehouse on the Bryggen. This is the city’s historical wharf, a warren of old storehouses, merchants’ offices and fishermen’s quarters. Baking heat rose from the cobbled streets that wound their way around the harbor just outside our windows. We wandered down there, past the market with its fish vendors speaking 16 languages fluently as they flicked knives through great swaths of marinated salmon, making up sandwiches in the shade of plastic awnings.

Traders were selling reindeer skins from the north. We carried on along the Nordnes promontory, between rows of sunlit clapboard houses. Good swimming spots include Helleneset and Gamle Bergen, but even in the city center the waters are crystal clear. On Nordnes, you can swim from the rocks behind the United Sardine Factory, now an arts center, or, for a few kroner, dive from the boards high above the water on the western point. At a latitude several degrees north of chilly Aberdeen, on the east coast of Scotland, the granite was scented with suntan oil, laced with stretched-out nut-brown limbs: already the local Bergeners had taken up their favorite sunbathing spots. Blond kids ran and flipped, turning somersaults into the fjord.

From the end of the diving board, the view was entirely surreal. Ahead and to the west, the outlying islands shone like promised lands in the perfect afternoon, on a blue-bronze sea. Round to the east loomed a vast container ship in the fjord, so apart from everything else that it looked like a paperweight pinning down the separate poster of the landscape. I jumped. The deep cool waters sloughed off the day’s heat in one clean sweep. We swam along the base of the cliffs, ducking under ropes and resting against floats. Young men were diving off rooftops into the water.

Soaking in the confines of my clawfoot bathtub that evening, underneath a huge old winching wheel, my skin was already a riot of sun-pricked freckles. Heading along the Bryggen, there are countless tables for drinking in the sun, and there is also the Enhjorningen, or Unicorn, one of the city’s best restaurants. We ate angle fish and sweetly marinated blackberries in its wooden upstairs rooms, and then we made our way towards the funicular railway station in growing dusk. From the high plateau of Mount Floyen where the funicular ends, the night stretched slowly over the city lights below. We came back up here the next day to go fell-walking through the pine forests, then headed on, to the wilder waters of the north.

An air-pass with Wideroe, one of Norway’s domestic airlines, took us up to Trondheim for a couple of days. A curious mixture of wild west film-set streets — all clapboard storefronts and jittering steps — a vast medieval cathedral, a baroque wooden palace and buzzing student cafes lends Trondheim its idiosyncratic charm. We admired the buildings, but really, we were more interested in the lakes that lay at the other end of the tramline. Having packed a picnic, we took a ride. The tram wound serenely through the streets and parks, past birch trees and fountains, climbing out through the wooden suburbs, through clouds of rosebay willowherb, into the hills and woods.

There are several lakes to explore along the tram route, but the loveliest is Kyvannet at Lian, right at the end of the line where the tram pulls up in a forest clearing. From here, it’s a short walk down to the grassy lakeshore. By day, the banks are peppered with locals. At 10 o’clock at night, it was still light enough and warm enough to swim, and by then the place was deserted. At 11 o’clock, there was just the flickering of a distant campfire somewhere on the opposite shore, and the calling of birds in the dense pine woods, the purple skies reflected in the mirror-calm waters. Christina, who is a professional fine art photographer, set up her tripod and took her shots. Striking out for the floating wooden diving platform in the middle of the lake, flipping on to my back in this weirdly bright, jewel-like amethyst dusk, the air spiked with sweet pollen, I thought this was possibly the most beautiful place I had ever swum. To swim through the water was to swim inside the sunset itself, reflected — fingers carving through liquid clouds of violet and rosy streaks of light. We stayed there until close to midnight, swimming and warming ourselves with a final round of picnicking, pulling on our Norwegian woollies and scrambling back to the clearing in time to catch the last tram home.

Our hostel, Pensjonat Jarlen, was basic but comfortable and clean. If you want to stay somewhere more luxurious, go to the Britannia, a stately Victorian-era pile. It’s also worth checking out the program of open-air concerts on the local tourism Web site. We went to the cathedral graveyard one midnight (as one does) and were startled when angels started singing, until we realized it was a choir giving a late-night performance for a walled-off audience beyond the other end of the building. Luckily for us, the musicians had left the cathedral’s side-door open, so we snuck in past the coats and instrument cases, hid in the dark behind a pillar and watched the choir from the back as they sang through the open main doors to the rows of listening faces outside. We tiptoed out, with the sound streaming into the half-light.

From Trondheim, we flew to Bodo, then onto Svolvaer in the Lofoten Islands inside the Arctic Circle. The twin propellers of the tiny Cessna carried us towards a landscape so beautiful, so perfect, that again it seemed quite dreamlike. Rising sheer from the turquoise sea, the high wall of Lofoten peaks loom in great whipped-up tufts of snow-capped rock, their milder sides a carpet of green. Everything appeared to be the ultimate of its kind: no green could have been greener, no blue bluer, no mountain could have looked more mountainous, nor any water purer.

Svolvaer, on the island of Austvagoy, is the Lofotens’ main port. We picked up a hire car, enjoyed fish soup on sun-drenched decking at Bacalao, one of the many restaurants on the harbor and headed west, into the countryside. Causeways now connect the islands. One of Austvagoy’s highlights is an ecologically responsible marine safari run by biologists. Flying out in a Rib across the Arctic waters, we saw sea eagles, eider ducks, Arctic terns and Arctic seals on far-flung rocks, before cutting the engine to drift silently in starfish coves studded with sea urchins, black-green water slapping softly against the banks of glittering copper seaweeds.

We spent most of our time on the westward islands of Vestvagoy, Flakstadoy, Sakrisoy and Moskenesoy. There is plenty to explore here: pretty wood villages, artists’ studios and old Viking remains. Roads loop between sheets of vertiginous mountainside, around white sand bays, through fields thick with wild flowers. The gigantic skeletal frames of wooden fish drying racks dot the shores.

On Vestvagoy, we stayed at Mortsund, a relatively new collection of wooden cabins on stilts above the water. In the endless Arctic light I sat on our deck watching the circling birds until after one in the morning. The gulls cried “Error! Error!” in the glimmering shreds of the sunset, like they were taking issue with the dying of the day. Further along the island chain we stayed in a real rorbu — an old fisherman’s cabin on stilts, converted for guests — on tiny, magical Sakrisoy. Water lapped below the floorboards and shone outside the tiny windows. Our beds were up in the loft, once more under a huge old winching wheel, and breakfast was over the road where Dagmar, the owner, cooked up waffles in an upstairs dining room carved out from her antique shop. We tucked into reindeer meat, eggs, bread and cloudberry jam, along with good strong coffee, and headed out with her son Michael in one of the boats.

Michael took us over to Bunesfjord, a tiny hamlet only reachable by water. We moored, and started our hike. Passing the handful of painted wooden houses, and the open-air tearoom — a platform in a meadow with desks and chairs from the old primary school — the grassy track led on through banks of scented meadowsweet, up and over the crest of a hill. A vast sweep of perfect white Arctic beach waited on the other side, littered with the shells of Kamchatka crabs and bleached Siberian tree-trunks, driftwood washed up in the storms. We pulled off our jeans in the buffeting wind and ran.

Great green waves sluiced over us. It was cold, the Arctic sea, but, being warmed by the Gulf Stream here, not debilitating. I’d say it’s slightly warmer here in July than it is in the Atlantic off Scotland’s west coast on New Year’s Day, so euphoria should be tempered with caution. I struck out towards the mouth of the bay, dodging strands of kelp. Each time I flicked my head sideways to take a breath, mountain peaks and distant shepherds’ huts framed themselves in the dripping arch of my arm. Somewhere further out in these same waters swam the whales and, in their season, orcas. If there is a place to forget which species you belong to, or where the landscape ends and you begin, this is it.

Since last summer, the Norwegian government has announced it is considering opening the Lofoten shelf for oil extraction.

http://www.taipeitimes.com/News/feat/archives/2009/05/14/2003443539

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