Investing Advice For Women Isn’t Sexist; It’s A Necessary Corrective

Sallie Krawcheck, at one time widely considered the most powerful woman on Wall Street, was fired twice from high-profile banking jobs, partly, she believes, because she was a woman.

"It wasn’t as though the boss said, 'We don’t like female parts,'" she told The Huffington Post recently. It was, according to Krawcheck, because she took an approach to business that she has since come to believe is inherently female -- focusing on long-term goals and relationships. (There was also a lot of office politics at play, to be sure.)

The "women are different" theory is now driving the 51-year-old's second act. Krawcheck has founded Ellevest, an online investing platform targeting women. Women do not invest their money at the same rate as men. The reason for this is up for debate; while some believe women are risk-averse, others note that they simply earn less money than men. 

Krawcheck has a different take: Women simply face different challenges -- like financing long career breaks for care-taking, paying for maternity leave, living longer than men, etc.

The new site is still in beta mode, with a launch planned for later this year. Krawcheck also chairs Ellevate, a women's networking company. HuffPost talked to her recently about women, Wall Street and why we’re more likely to want to have a beer with the guy running JPMorgan than with Hillary Clinton.

Why don’t women invest as much as men?

Wall Street is for men by men, I like to joke. I know lots of outstanding financial advisers who do a great job for women, but overall the industry does a great job for men. CNBC looks a lot like ESPN. The goal of investing is beating the market. It’s male. It feels competitive. When you speak to women about investing, they rarely talk about beating the market. Women talk about what they want to do in life and how investing can help them get there.

Doesn’t creating an investing company targeting women specifically just serve to keep the financial industry male dominated?

For years, I bristled at the idea that women would need their own thing. Well-intentioned journalists would say we need more hand-holding. We need simple. That’s not it. Women’s needs are different. What do I mean? We talk about the cost of a career break. That’s not something men grapple with. Women on average take breaks of up to 11 years and they are extraordinarily expensive. Another issue that impacts women more is not having mandated parental leave.

You talk about how the retirement crisis is a big women’s issue.

It is an insight I had a year ago when I was putting on my mascara one morning. We retire with two-thirds of the money that men have -- and we live longer.

If we cast retirement as a gender issue, the solution becomes about keeping women in the workforce, mandating parental leave, helping women invest more -- all of which can help grow the economy. The solutions go from depressing to pretty much all positive.

Aren’t I better off just putting my money into a low-fee index fund, rather than letting a so-called expert pick stocks for me and charge higher fees?

Over time, if investing is your only goal, yes you are better off putting your savings into a diversified low-fee index fund. That is the portfolio that we will use. I would say advisers can bring other capabilities to bear. For example, there is enormous value in a financial plan. It’s hard to go where you want to go, if you don’t know where you are going.

What was it like to be a young woman on Wall Street when you were starting out in the '80s? How do you think it’s changed?

It was outwardly hostile. I was left with a Xerox copy of male parts on my desk every morning. I don’t believe that happens now.

All those guys who were hazing you back then probably run things now.

Your theory may be correct, but when I go person by person I don’t know where they are. 

Does it ever frustrate you that for all your success, people still keep asking you “how do you do it” and “tell us about being a woman”?

Not at all. Because when I was in my 20s. Even in my 30s, there were so few female role models. When I would look around, I couldn’t see a path forward. I remember working at Salomon in London and being literally the senior woman there. I am really always very happy to talk about how I did it and how I didn’t do it and the approach, because there still aren’t enough role models.

The percentage of women in C-suites and in boardrooms is still absurdly low. Why?

If there were an answer, well-meaning people would have closed the gap. Some part is not mandating parental leave and that women don’t make it through the funnel [to the top]. Some is inherent gender bias. Likability and success in men is positively correlated. Think Jamie Dimon, you want to have a beer with him. [Editor’s note: Nope.] It’s inversely correlated for women; think Hillary Clinton. Men and women both have biases like this.

My mother told me, "I’m not going to vote for Hillary. She’s too ambitious." I said, "Mom, hello?" She said, "You do it in a nicer way, honey."

This interview has been edited for clarity and length.

CORRECTION: A previous version of this story misstated Krawcheck's role with Ellevate. She runs the organization but is not a founder.

The Federal Reserve Holds Off On Interest Rate Hike

The Federal Reserve announced on Wednesday that it is leaving its benchmark interest rate unchanged, a move designed to encourage recently robust job creation to continue.

The decision by the Federal Open Market Committee, the central bank panel charged with adjusting its influential federal funds rate, means Americans will likely avoid paying higher interest rates on their mortgages, car payments and other loans.

The influential federal funds rate, or the interest rate banks charge one another for overnight lending, will remain at a target range of 0.25 to 0.5 percent. The Fed raises the interest rate to head off rising price inflation by slowing the pace of job market growth.

“With appropriate monetary policy, we continue to expect moderate economic growth, further labor market improvement and a return of inflation to our 2 percent objective in 2-3 years,” Federal Reserve Chairwoman Janet Yellen said at a press conference announcing the decision. “However, global economic and financial developments continue to pose risks.”

The last time the Fed raised the federal funds rate was in December, the first time since the 2008 financial crisis. It is a testament to the tenuous state of the economic recovery eight years later that the Fed is still exercising so much caution.

Wednesday's decision was widely expected, in light of modestly gloomier global economic conditions and lackluster U.S. wage growth.

As investors have become more anxious, credit has become harder to obtain in the United States. The tighter lending had the same depressing effect on the economy as a 1 percentage point Fed rate hike, according to economists at Goldman Sachs.

The dollar also continues to rise relative to foreign currencies, making U.S. exports less competitive.

And while the U.S. economy continues to produce jobs consistently, wages declined in February.

Yellen acknowledged that the robust job market had yet to produce significant wage growth.

“I must say, I do see broad-based improvement in the labor market and I’m somewhat surprised we’re not seeing more of a pickup in wage growth,” she said. “It is one of the factors that suggests to me there is continued slack in the labor market.”

Inflation is finally approaching the Fed’s 2 percent target, however, indicating that the Fed may soon have the evidence it needs to raise the interest rate when the FOMC meets again in April.

The price of consumer goods, excluding food and energy, rose 1.7 percent growth in the 12 months ending in January, according to the price index favored by the Fed.

SAUL LOEB/Getty Images

Federal Reserve Chair Janet Yellen speaking at a press conference on Wednesday after the Fed announced that the benchmark interest rate will not rise.

Indeed, all ten sitting members of the FOMC, as well as the seven regional Federal Reserve bank presidents not on the committee, believe economic conditions will allow for an interest rate hike before the year's end.

The 17 officials' predictions, however, released in a survey known as the "dot plot," show greater pessimism about the economy than when the Fed last met. The officials' median projection is that the Fed will raise the interest rate to 0.9 percent by the end of 2016, compared with the December 2015 median projection of 1.4 percent.

One sitting FOMC member, Kansas City Federal Reserve Bank President Esther George, voted against the decision, favoring a 0.25 percent rate hike at this time.

In a week dominated by presidential election and Supreme Court nomination news, the Fed’s announcement stands to draw only moderate attention.

But the lack of a rate hike, which gives the economy more leeway to grow unencumbered, is probably good news for Hillary Clinton’s presidential candidacy. The putative Democratic front-runner is poised to benefit from a positive economic outlook, since voters are more likely to return an incumbent party to power if the economy is doing well.

Public opinion polls and the populist electoral mood in both political parties suggest that voters still do not feel their economic fortunes palpably improving, despite a record streak of job growth. Many analysts argue that the lack of a political upside to the high-performing economy is because Americans are, on average, not making much more money.

That is why progressive economists and activist groups have been calling on the Fed to allow unemployment to dip even lower, so employers will begin raising wages more significantly in order to compete for workers.

The progressive Fed Up coalition, comprising groups representing low-income workers and communities of color, is calling on the Fed not to raise the benchmark interest rate at all in 2016.

“The Fed needs to connect the dots with reality: involuntary part-time work is still almost double pre-recession levels, labor force participation rates are still low, Black unemployment is more than double white unemployment and Latino unemployment and underemployment is still at crisis levels, and wage growth is almost non-existent,” Dushaw Hockett, executive director of SPACES, a Washington, D.C. community group that is part of the Fed Up coalition, said in a statement.

“Rather than slowing down progress, the Fed should do all it can to facilitate growth in 2016 and beyond.”

Etsy's New Parental Leave Policy Is Basically Perfect

Etsy just increased the amount of parental leave it offers. Starting April 1, all workers at the Brooklyn-based company known for selling hipster-precious, hand-crafted goods will be able to take 26 weeks off after the arrival of a child via birth or adoption. 

That’s a big increase from the company's old policy, and follows examples set by a bunch of other tech companies that are racing to improve benefits as the war for talent continues.

But what truly makes Etsy’s announcement notable? It's gender neutral. Men and women at the 800-person company will be eligible for six months leave and -- this is key -- Etsy will no longer give more time off to "primary" caregivers, a falsely neutral designation that companies effectively only apply to heterosexual women.

Etsy

Etsy's headquarters in the Dumbo neighborhood of Brooklyn.

Previously, Etsy gave "primary" caregivers 12 paid weeks off, and "secondary" parents five paid weeks.

"It was playing out in a gendered way," Juliet Gorman, Etsy’s director of culture and engagement, told The Huffington Post.

"Male employees read the policy and thought, 'I must only be eligible for secondary,'" she said, adding that there's no established definition of what constitutes a primary or secondary parent. 

The company is following on the heels of Netflix, Spotify and Facebook, which now offer men and women equal paid time off. The United States has no paid leave policy, but does guarantee 12 weeks of unpaid leave regardless of gender to some new parents.

Gorman pointed out that most millennials are raising their kids in dual-income households where the expectation is that both parents share responsibilities. Designating one of those parents the primary caregiver seemed like a "dated concept," she said.

Although she didn’t know how many Etsy workers fall into the millennial age bracket, Gorman said the company adheres to a "millennial ethic," which apparently means it has a progressive bent and is concerned about the well-being of its workers. Etsy also offers such benefits as six-week sabbaticals and paid time off to volunteer.

"Etsy, regardless of age, is a very kind of plugged-in, ear-to-the ground, socially progressive company," she said.

Of course, we don't know how Etsy's new policy will play out in real life. At Facebook, for example, new fathers still reportedly take about half the time off that's offered to them.

"In many places the idea of a man taking time off at all is stigmatized. For a man to say he’s a primary caregiver, it’s downright impossible," said Josh Levs, author of All In, a book that looks at how fathers are treated in the workplace.

Primary and secondary parent designations are basically just "coded language" that reinforces traditional gender stereotypes, Levs said. 

Using a policy based on these designations is harmful is a couple of ways. First, it puts women at a disadvantage at work, as colleagues and supervisors tend to either consciously or unconsciously expect them to stop prioritizing their jobs after the arrival of a child. This typically means that new mothers aren't promoted as much, or aren't asked to take on extra responsibilities like traveling. Indeed, one study found that women’s salaries decrease with every new baby they have. 

Men, on the other hand, see their incomes rise when they become fathers. However, they’re put on unequal footing at home, deprived of key bonding time with their children and the ability to provide support to their coparent. Men who take leave are less likely to have partners who suffer from depression, one study found.

A couple of years ago, Etsy CEO Chad Dickerson tweeted about taking a five-week paternity leave and encouraged other dads to follow suit.

@avleen @johngoulah @kellan CEOs & BODs should make leave not just acceptable but encouraged. Etsy BOD 100% supportive. Asked for baby pics.

— Chad Dickerson (@chaddickerson) November 7, 2014

Oh, and giving men and women different amounts of time off for caregiving -- beyond the time it takes a birthmother to heal from childbirth -- is considered discriminatory, said Peter Romer-Friedman, a Washington-based civil rights lawyer.

"Policies that give disproportionate amounts of parental leave are vulnerable to legal attack under sex discrimination laws," he said.

"Being a good dad" is now part of men's aspirations in addition to being tall & having a beard - E. Harðardóttir @IcelandUN #SharingtheCare

— MenCare Campaign (@MenCareGlobal) March 14, 2016

 

Levs knows this better than anyone. When he was working at CNN a few years ago, he tried to use the 10 weeks of parental leave his parent company Time Warner offered, but was told he wasn’t eligible. Men could get the 10 weeks if they adopted a child with their partner or used a surrogate, but fathers whose partners gave birth could only get two weeks paid time off. Ultimately, Levs filed a complaint against the company and Time Warner changed its rules.

Still, plenty of other firms hold fast to the "primary" caretaker concept, including Goldman Sachs, JP Morgan and Adobe.

When Levs asked Goldman if a heterosexual man with a wife who gives birth to a child would ever be eligible for paid leave, the company declined to comment. When HuffPost asked about this again recently, a Goldman spokeswoman said she didn’t have anything to add.

The North Face Just Destroyed Trump's Simplistic Opinion On Jobs

Donald Trump has a lame excuse for outsourcing the production of his clothing brand. The North Face, meanwhile, is proving that it's possible to keep business local. 

The Republican presidential front-runner has been criticized for using overseas manufacturing for items in his Donald J. Trump Signature Collection of suits and ties. When pressed on the issue during the GOP debate in Detroit on March 3, Trump said it's cheaper to produce clothes in, say, China and Mexico, than in the United States.

"They [these countries] make it impossible for clothing-makers in this country to do clothing in this country," Trump said. 

While he's right that it can be pricey to make clothes in the U.S., often because of high labor costs, there is a growing demand for locally sourced goods. Americans want to buy domestic -- and apparel companies like The North Face, which recently expanded its made-in-America offerings, are listening.

The North Face's newest clothing line, which launched March 1, is made entirely in the states. It's the second iteration of the company's Backyard Project, which "is about connecting with local artisans right here in the U.S.A. It’s about knowing which farms grew your cotton, who spun the yarn, or how your product was dyed,” Sumi Scott, The North Face's director of sportswear, said in a statement.

The new line features hoodies for $90 and T-shirts for $40. They're made with cotton sourced from farms in California and Arizona, spun in the Carolinas and sewn in factories in Los Angeles, according to James Rogers, sustainability manager at the apparel company. North Face did not provide sales figures for the line. 

Bright Black/The North Face

The Backyard Project is now available in several new styles and colors.

The company unleashed its original Backyard Project series in 2014. The year before, nearly 80 percent of Americans said they preferred American-made products over foreign-made ones, per a survey from Consumer Reports. Market research by The North Face confirms these findings, Rogers told HuffPost.

Production of domestically made clothes jumped 35 percent between 2009 and 2013, according to American Apparel and Footwear Association, an industry trade group.

“There’s starting to be this consumer base that appreciates [locally sourced products],” Tim Kraft, assistant professor of business administration at the University of Virginia's Darden School of Business, told The Huffington Post. “A lot of it is around food, and it’s an interesting concept to take to other retail products.”

The trend is still small, though. In 2013, only 2.6 percent of the clothes sold in America were made on U.S. soil. Some apparel companies, like workwear brand Carhartt, are now focusing on producing more affordable "Made in the U.S.A." clothing, in part to help their garments appeal more to shoppers. 

In addition to supporting American businesses, producing apparel in the U.S. probably has a lower energy footprint than manufacturing garments in, for instance, China or India, two of the major countries exporting garments to the U.S.

"Facilities [in America] are going to be more environmentally compliant," Beril Toktay, faculty director of the Ray C. Anderson Center for Sustainable Business at Georgia Tech's Scheller College of Business, told HuffPost. 

But making clothes in America doesn't 100 percent guarantee that they'll have a smaller environmental footprint. For instance, sourcing cotton from California, as The North Face's Backyard Collection does, might sound like a questionable move, given the state's historic drought. 

"If The North Face is purchasing cotton from California, I would actually be a little worried about the local footprint of their sourcing strategy," Toktay said.

Rogers insists, however, that "California cotton farmers are some of the most efficient in world."

JC Video Productions/The North Face

Cotton.

Sourcing locally has another potential advantage: It can cut down on the lag time between when a producer places an order for materials and when that shipment arrives. This can make companies nimbler and more responsive to what shoppers want. 

"If you can manufacture locally, then you can respond much more rapidly to consumer demand," Toktay said.

Shorter supply chains are also easier to police. Long, complicated networks make it hard for retailers to know whether the farms and factories contracted to make its materials are meeting high labor standards.

"The retailers don’t often have a lot of direct, day-to-day contact with all these factories,” Elizabeth Cline, author of Overdressed: The Shockingly High Cost of Cheap Fashion, told the U.S. News and World Report in 2014.  

Spanish textile company Inditex, which owns the popular Zara brand, has relied on local and regional sourcing for years. In 2012, Zara sourced almost half of its products from Spain, Portugal and Morocco, creating a short supply chain that could be manipulated quickly in response to changing tastes.

Inditex's strategy may be paying off. In 2015, the company’s profits rose 15 percent, and Zara's CEO, Amancia Ortega, became the world’s second-richest man. However, the company has dealt with repeated allegations that some of its suppliers in Brazil, Argentina, Turkey and Eastern Europe used sweatshop labor to produce Zara garments. 

While the North Face can keep a close eye on its Backyard Project line, this is just one part of the company's overall business. For the rest of its products, the North Face sources from 33 countries, including the U.S. 

Bright Black/The North Face

Employees at JC Industries trimming threads on the Backyard Project t-shirts as the final stage in the production process. JC Industries, based in Los Angeles, started in the 1970s making custom trims and has expanded its operations over the years to offer vertical manufacturing.

The North Face shares parts of its supply chain with its parent company VF Brands, which has attracted criticism in the past for sourcing from factories in Bangladesh, a country notorious for weak labor protections.  

However, after the 2014 collapse of the Rana Plaza garment factory building in Bangladesh killed over 1,100 workers, VF founded a coalition with 26 other companies to collectively dedicate five years and $50 billion to improve labor conditions in the factories they use. The North Face belongs to this coalition through VF. 

Despite the advantages of making goods in the U.S., domestic production has some drawbacks. Areas where consumers live don’t always have the highest quality source materials, for example. 

When you think about locally sourced goods, Kraft said, you have to ask: “Is there a potential quality risk?” 

The North Face hopes the Backyard Project will show that companies can make quality clothing while returning to traditional ways of producing goods, according to Rogers.

"Really, this is an old way of making apparel," Rogers said. 

Trump seemed to say during the March 3 debate that he would move his clothing operation back to the U.S., where his "Make America Great Again" hats are already produced. Doing so would bring his company's practices into line with his oft-repeated vow to "bring jobs back" from foreign countries. 

However, as tends to be the case with his grand promises, it's anyone's guess whether he'll follow through on this one.

The Trump campaign did not respond to a request for comment. 

Editor's note: Donald Trump is a serial liar, rampant xenophobe, racist, misogynist, birther and bully who has repeatedly pledged to ban all Muslims -- 1.6 billion members of an entire religion -- from entering the U.S.

4 Things You Need To Know About The Latest Jobs Report

The monthly jobs report came out on Friday, and things are pretty good overall.

The big headline numbers were great: The economy added 242,000 jobs in February, much higher than the 195,000 that economists estimated, and the unemployment rate remained at 4.9 percent, which is nice and low. 

But if you drill down into the data, the picture is a little murkier.

Here are four things we know about the economy from the details in this report:

1) Wages aren't growing much, and it's hard to say why.

Average hourly earnings were down by 3 cents in February, to $25.35. Year-over-year, wages are up about 2.2 percent. That's not great -- although, thanks to very low oil prices and low inflation, it's not terrible either. But it's worth asking why wage growth since 2010 hasn't been as robust as growth in previous recoveries. 

Shane Ferro/Huffington Post

2) Nonetheless, people are coming back into the labor force.

As we said earlier, the economy added 242,000 jobs this month. But perhaps more importantly, details in the household survey show that more than 500,000 entered the labor force by starting to look for work again. In order to be officially unemployed, a person must not have a job and must be looking for work. Discouraged workers, who have given up looking for jobs, aren't counted as part of the labor force. It's a sign of a healthy economy when those people start looking for jobs again, even if they don't find work immediately.

3) But the unemployment rate for blacks is twice the unemployment rate for whites.

The unemployment rate for whites in the United States is 4.3 percent. For blacks, it's 8.8 percent. This is an economic dynamic that has been persistent since the Labor Department started tracking unemployment by race back in the 1970s. The chart below is not really America's best look: 

Shane Ferro/Huffington Post

There's a huge racial disparity in the unemployment rate in this country.

4) There is a lot of growth in low-wage industries.

The retail industry added 55,000 jobs last month, and food service added 40,000. These have been some of the strongest growth industries over the last few years, which means the economy is adding a lot of low wage, service sector jobs. That said, the economy also added a lot of health care (38,000) and construction (19,000) jobs in February, which tend to pay quite well. 

How Americans Get Duped Into Buying Endangered Animal Items

You might be contributing to the decimation of endangered animal species without even realizing it. 

When illegal ivory, tiger pelts or rhino tusks make their way to markets and e-commerce sites, traffickers may try to conceal how the products were obtained. They'll use terms like "bone" or "walrus tusk" to describe ivory, duping retailers and customers alike. What's more, uninformed shoppers or tourists might not know that tortoiseshell and certain types of coral or wood are also part of this illicit trade network, which is estimated to be worth between $50 and $150 billion per year. 

Major companies across the e-commerce, retail and travel industries are now banding together to raise awareness and reduce the amount of illegal wildlife products Americans buy. 

Google, eBay, Etsy, JetBlue and Tiffany & Co are among the 16 firms committing to eliminating these products from their supply chains, the U.S. Wildlife Trafficking Alliance and the Obama administration announced Thursday.

“A lot of Americans are just not aware that they could be buying illegal products and adding to this global problem,” David J. Hayes, chair of the alliance and former chief operating officer at the Department of Interior, told The Huffington Post.

Each company will take action within its own sphere of commerce. Some will warn customers about the impacts of illegal wildlife products, while others will flag items on sale that potentially violate wildlife policies or provide educational videos on sustainability for travelers.

ChinaFotoPress via Getty Images

Illegal ivory and ivory products confiscated in China. 

Several online retailers have already taken steps to block harmful items from their sites. eBay and the online bidding platform LiveAuctioneers.com have banned illegal ivory sales. Etsy has banned all ivory and prohibited sellers to list goods made from threatened or endangered animal parts. 

"It's hard for the consumer to know what's legal and what's illegal, and it can be hard for the retailer to know," said Beth Allgood, U.S. campaigns director for the International Fund for Animal Welfare, a conservation nonprofit that has worked with eBay, Etsy and LiveAuctioneers to remove illegal ivory listings. "We can be partners to retailers who don't know all the regulations."

For JetBlue, the awareness campaign will primarily inform passengers traveling to and from the Caribbean and Latin America, said Sophia Mendelsohn, JetBlue’s head of sustainability. In videos to be shown on JetBlue’s flights, residents and small business owners from the region will speak about how sustainable tourism practices can support wildlife diversity.

“We want to stop this issue at its root cause,” Mendelsohn told HuffPost. “We’re going to cut out unwitting demand so there’s less profit in drawing out these natural resources, whether it’s for tech, necklaces or special meals” at local restaurants.

Lam Yik Fei via Getty Images

Leopard skins seized by Hong Kong customs officials.

Other corporate partners that have pledged to work with the alliance include Ralph Lauren and Royal Caribbean Cruises. The Association of Zoos and Aquariums will exhibit seized illegal wildlife products in its parks to highlight the threats posed to various species. Discovery Communications will produce virtual reality content focusing on trafficking and conservation. 

The household brands committed to this new effort will work to establish best practices for smaller names in the travel, e-commerce and retail industries.

“These companies are accepting industry leadership and making sure smaller ones aren’t involved in wildlife trafficking,” Hayes said. “These are true industry-wide efforts.”

Stockbyte via Getty Images

An illegal haul of rhino horn.

Awareness of wildlife conservation has been growing for some time. President Barack Obama issued an executive order to implement a wildlife taskforce in 2013. The corporate alliance announced this week is a result of that effort.

Public interest in the issue spiked last year following the killing of Cecil the Lion. The backlash against the Minnesota dentist who shot down the lion in Zimbabwe heightened scrutiny of trophy killings and spurred action from the travel industry.

American Airlines, United Airlines and Delta Airlines announced last summer that they would ban transport from Africa of the “big five” game animals -- lion, elephant, rhino, leopard and buffalo.

ASSOCIATED PRESS

A lion in an enclosure of the Lion Park, in Johannesburg, South Africa.

This Could Explain One Of The Biggest Mysteries Of Cheap Oil

The price of oil has crashed over the last year and a half. In the middle of 2014, a barrel of crude cost over $100. Now it's worth just over $30.

Normally, such a collapse would lead OPEC to pump less oil. The idea is that less oil on the market helps keep prices up. But despite a historic fall in oil prices, the Saudi Arabian-led international oil cartel hasn't budged: The biggest step it has taken so far is offer to freeze production at its current record levels. Production cuts are not on the table.

The big question is, why? One theory is that OPEC simply has less control over the oil market than it used to, thanks to the shale gas revolution. Another possibility is that OPEC wants oil prices to be low precisely in order to drive shale oil producers, which have higher costs, out of business. 

Here's a simpler hypothesis: Maybe the Saudis aren't cutting production in the face of low prices because huge portions of their oil reserves might eventually become worthless. That's what James Rowe, an environmental studies professor at the University of Victoria, thinks. 

If that happens, today's oil prices won't look low -- not when there's an overabundance of an asset that can't be sold. But oil prices are the lowest they've been in 12 years, you say. How could they ever be considered high? 

This explanation relies on two related ideas: a carbon bubble and stranded assets. The carbon bubble refers to the fact that energy companies around the world are sitting on five times more fossil fuels than can be burned, the research nonprofit Carbon Tracker estimates. Those assets, worth about $2 trillion, are referred to as "stranded assets."

So what does that mean for an oil company that controls a state? It might as well sell as much oil as possible while still can.

Saudis can't sell oil for $100 a barrel, obviously, but Rowe said they "appear to be positioning themselves for the next best option: gobbling up as much of the earth’s remaining carbon budget for themselves before the bubble bursts. Isn’t it better to sell at a lower price than to receive nothing at all from vast unburnable reserves?"

By the time the world has moved on from oil, Rowe said, Saudi Arabia "will have sold what it could while its reserves were still burnable."

And the country will have moved on as well. Its oil minister, Ali Al-Naimi, has said Saudi Arabia will be a solar exporter by the middle of this century.