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DrumBeat: July 14, 2008
Posted by Leanan on July 14, 2008 - 9:15am
UK joins debate on speculators in oil markets
LONDON (Reuters) - A British parliamentary panel will on Tuesday join in the debate on why oil prices are at record levels above $145 a barrel and whether speculators have played a role.The UK Treasury Commmittee will grill economists, executives from electronic exchange ICE Futures Europe and officials from the UK regulator the Financial Services Authority.
After consulting a wide variety of experts on both energy and markets, I could find nobody who sees speculation as a major contributor to the oil price spike. The problem is massive global demand overpowering a finite supply, aggravated by uncertainty about oil supplies in the Middle East, Nigeria and Venezuela. But the image of evil men on Wall Street manipulating oil prices fits, to borrow the trenchant phrase of the late historian Richard Hofstadter, "the paranoid style" in dealing with the current crisis.
Bush lifts offshore drilling ban in symbolic move
WASHINGTON (Reuters) - President George W. Bush lifted a White House ban on offshore drilling on Monday to try to drive down soaring energy prices, a largely symbolic move unlikely to have any short-term impact on high gasoline costs.
Petrobras Says 36 of 38 Platforms in Oil Strike Are Producing
(Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, said it's producing crude from all but two of 38 offshore production platforms affected by a strike that began this morning.
Contaminated US site faces 'catastrophic' nuclear leak
More than 210 million litres of radioactive and chemical waste are stored in 177 underground tanks at Hanford in Washington State. Most are over 50 years old. Already 67 of the tanks have failed, leaking almost 4 million litres of waste into the ground.There are now "serious questions about the tanks' long-term viability," says a Government Accountability Office report, which strongly criticises the US Department of Energy for delaying an $8 billion programme to empty the tanks and treat the waste. The DoE says the clean-up is "technically challenging" and argues that it is making progress in such a way as to protect human health and the environment.
Russia blasts oil majors on production
MOSCOW (AP) -- Three of Russia's oil projects, which all have foreign participation, failed to achieve oil production targets in 2007, Russia's Audit Chamber said Monday.The state auditor said in a statement that the projects in question were ExxonMobil's Sakhalin-I, Gazprom's Sakhalin-II and Total's Kharyaga, all of which operate under production-sharing agreements.
Petrobras says strike cuts output by 300,000 bpd
RIO DE JANEIRO (Reuters) - Brazil energy giant Petrobras said on Monday that a strike started by its oil workers at midnight on Sunday will cut its production by 300,000 barrels per day.
PayPal's cofounder hopes to produce a practical $30,000 all-electric car in four years.
Could sustainability lead to an authoritarian future?
Those who imagine humans eventually returning to agrarian societies also often imagine that such societies have the potential to be much more democratic and egalitarian than our current world. But, among those who imagine what I'll call a sustainable industrial future, there is little discussion of future political arrangements. It is implied that we will continue with nominally liberal democratic governance in North America and Europe. (It's hard to see, however, how that model will apply to say, the governments of central Africa.) But a sustainable industrial future, if it can be achieved, might require the regimentation of the individual beyond anything we have so far experienced.One need look no further than the issue of population to realize that this assertion is not overblown. In any sustainable society population cannot grow indefinitely. It must be stabilized at some point. How then to stabilize it? Normally, nature manages this task by making the death rate equal to the birth rate. The question that should concern us is whether we want to allow nature to match high birth rates with high death rates or whether we'd like to keep both birth and death rates low. Presumably, one of the principal advantages of industrial society is that it is able to provide a healthy longevity to many more people. This implies that to stabilize the population we must achieve birth rates low enough to match our low death rates.
The right to bear children, however, is regarded as a fundamental human right not to be interfered with by the state. And, the choice not to bear children is also regarded as a right in many countries. But if the choice is left up to the individual, there is no guarantee of a stable population. How then should we go about matching birth and death rates?
Russia says Czech oil supply cut "not political"
MOSCOW (Reuters) - Russia said on Monday it cut oil supplies to the Czech Republic last week for technical reasons, and denied it was linked to Prague's role in a U.S. missile defence shield."Trade with the Czech Republic or other traditional partners is in no way linked or connected with resolving the problem of deployment" of missile shield components, Deputy Foreign Minister Sergei Kislyak told reporters.
Russian pipeline monopoly Transneft said supplies to the Czech Republic via the Druzhba pipeline dropped by half last week only because two Russian firms had decided to refine more crude at home.
Iran's gas export prospects sink as tensions rise
LONDON — Iran's vast gas reserves will remain largely untapped so long as Western companies are scared off by political tensions and U.S. sanctions stop Tehran from getting the technology it needs to develop them alone.
Pull-out Demand Signals Final Bush Defeat in Iraq
Prime Minister Nouri al-Maliki's demand for a timetable for complete U.S. military withdrawal from Iraq, confirmed Tuesday by his national security adviser Mowaffak al-Rubaie, has signaled the almost certain defeat of the George W. Bush administration's aim of establishing a long-term military presence in the country.
U.S., Iraq Scale Down Negotiations Over Forces
U.S. and Iraqi negotiators have abandoned efforts to conclude a comprehensive agreement governing the long-term status of U.S troops in Iraq before the end of the Bush presidency, according to senior U.S. officials, effectively leaving talks over an extended U.S. military presence there to the next administration.
Britons spurning foreign holidays as economy dips
Travel operators are reporting a marked shift in holiday habits among Britons this summer with a sharp rise in people choosing to take a break in the UK instead of going abroad. The strength of the euro, uncertainties about the economy, airport frustrations and rising fuel costs have all combined to increase the appeal of, say, a weekend in Weymouth or a fortnight in the Fens.
Even with gas prices cresting above $4 a gallon, large SUVs, pickup trucks and even Toyota Priuses barrel down freeways here in suburban Detroit at more than 75 miles per hour -- well beyond the 55 mph that was the national speed limit during the '70s and '80s.If the U.S. Energy Department's calculations are right, all these lead foots could save the equivalent of 29 cents to 94 cents a gallon if they slowed down just to 60 mph -- and reduce the fuel they burn by about 7% to 23%. But most of my neighbors and I still choose to hit the gas rather than add 10 or 15 minutes to our commute times.
Slowing to 55 MPH Could Speed us into Recession
There is no better example of how out of touch Washington is with reality than the idea that our energy crisis can be addressed with a reduction of the national speed limit to 55 miles per hour. This is a classic sterile ivory tower academic type answer to a much more messy and complex question than politicians realize.
That is why I believe we have gone off-track in our arguments for more energy exploration; we are approaching the matter from an economic and political viewpoint, rather than one of basic rights. This argument should be framed as the right to mobility versus the regulatory burden of an overweight government determined to use the many laws on the books to restrict our freedom to travel.One of the first things tyrants do when they take power is restrict the right to travel. The Roman Emperor Diocletian restricted the right of the peasantry to move off their tenant farms, laying the groundwork for medieval serfdom. The Russian Tsars did likewise at a later date. The Bolsheviks always required special passes for travel, and the fascist state in modern Russia is now doing likewise. Ditto Castro. Control of the movement of people means control of the individual.
Against the alarming backdrop of gasoline prices at over $4 a gallon, oil industry executives are busily working the halls of Congress to make the case for increasing domestic oil supply. In addition to pushing for access to the Arctic National Wildlife Refuge (ANWR) and oil reserves off the east and west coasts, however, some industry reps are also rehashing the argument that the Law of the Sea Treaty (LOST) presents an opportunity further to secure American oil by "locking in" drilling rights in our Arctic continental shelf.
Prepare for a Shock: Electric deregulation could zap your checkbook
It wasn't long ago that legislators from around the country were streaming into Pennsylvania to get a look at a successful model for electric utility deregulation...."Everyone was expecting this vibrant market to emerge and I don't think anyone envisioned PECO being the only provider in an unregulated market in 2011," Haver said.
World Oil Markets In Chaos – No Solutions In Sight
World oil markets are in a state of total chaos and this is nowhere more evident than in the United States. The price for West Texas Intermediate (WTI), a benchmark crude oil for the US, has shot up by nearly 100% in less than a year and a substantial portion of this increase has taken place over the last six months. WTI closed at $139.64/B on 26 June. It was trading at an average price of $29.07/B in the second quarter of 2003 and around $80/B at the end of last year. Some analysts are now projecting the price to rise to as high as $150/B by the end of the year.The spike could not have come at a worse time. The US economy, facing one of its worse housing and financial crisis in generations, has been teetering on the verge of a severe recession since last August with no sign of a quick turnaround. Skyrocketing costs of the Iraq war coupled with rising inflationary pressures had already weakened the government’s ability to stimulate the economy through monetary or fiscal policy. With crude oil and other energy prices escalating daily, bringing the economy out of its current doldrums will be an even greater challenge.
Measure fills balloon sellers with worry
With helium costs skyrocketing and supply shortages developing, the balloon industry has struggled for more than a year to compete as worldwide demand for the gas has, well, ballooned. Adding to the turmoil is a bill in the California Legislature that would ban helium-filled foil representations of birthday cakes, Hello Kitty and the like.Foil balloons -- made from a tough polyester film known as Mylar or some other metalized material -- are accused of causing hundreds of power outages each year in California by short-circuiting power lines they encounter during escape attempts.
Paraguay: Oil Shortage Limits Public Transport
Asuncion (Prensa Latina) Public transportation service in Paraguay is still limited today by the shortage of gas oil due to logistic problems.To save fuel and avoid suspending the service, companies of this sector decided to implement an emergency plan that includes functioning of only 20 percent of its buses.
Zambia's sole petroleum refinery runs out of crude oil feed stock
LUSAKA (Xinhua) -- Zambia's sole petroleum refinery, INDENI Petroleum Refinery, has stopped producing petroleum products after running out of crude oil feed stock, according to Zambia Daily Mail....Konga said the ship ferrying the crude oil feed stock had delayed to dock in Dar-es-salaam because of some challenges in paying the supplier.
Taxi shortage latest threat to Dubai boom
But it is not simply a lack of taxis causing the problem. In fact Dubai has more taxis per person than most other major global cities.According to Bloomberg, Dubai has around 4.9 taxis per 1,000 people, compared to 4.7 in Tokyo, 2.7 in London and 1.6 in New York.
The problem has more to do with the city’s lack of public transport, soaring temperatures that can reach as high as 50 degrees Celsius in the summer months, and the cheap price of fuel, according to analysts.
India May Pay Twice as Much for Gas by 2010 on Demand
(Bloomberg) -- India, Asia's third-largest energy consumer, may pay as much as $12 per million British thermal units for natural gas in 2010, U.S. consultant Facts Global Energy said in a report.Consumers may pay twice as much for the cleaner-burning fuel because gas demand may grow at 5.1 percent a year between 2007 and 2015, and amid record crude prices, Facts said in a report e-mailed today. The price of delivered gas to consumers from Reliance Industries Ltd.'s gas discovery on the east coast is about $6 per million British thermal units, half of the U.S. benchmark gas price at Henry Hub.
Gas crisis 'threatening' WA tourism
The West Australian gas shortage is threatening to wreak havoc on the state's tourism industry because of higher costs for laundry services.The accommodation sector is facing a "major, major crisis" that may see international and interstate visitors being turned away at hotel reception desks, said Australian Hotels Association WA general manager Paul Brockschlager.
Canada: Gas tax will hit Metro hard
The region's transportation hub stands to lose a lot if a provincial carbon tax became reality, according to the chief executive officer of a transport company in Moncton.Vicki McKibbon, of Armour Transportation Systems, said the New Brunswick government's proposed gas tax would drive up costs beyond reason in the transportation industry, adding that wouldn't bode well for Metro since a good number of transportation companies are located here.
Pakistan: Saudi “bailout” and our energy map
Those who think that Saudi Arabia will once again write off the oil dollars should take another look at the world oil situation. The prices are rising on a daily basis, and what was yesterday simply a comparatively modest gesture to a Pakistan under nuclear sanctions, would today amount to extravagance. Therefore Pakistan should move quickly to exploit its coal deposits so that the dependence on Saudi largesse doesn’t become highly irresponsible, if not politically suspect.
ANALYSIS - What price Saudi oil bill deferrals for Pakistan?
Saudi Arabia - LONDON, July 14 (Reuters) - Saudi Arabia has agreed in principle to defer payments for crude oil sales to Pakistan, the Financial Times reported, raising speculation about what the kingdom is looking for in return.
Airline fares are up, fuel prices are at a record high, the dollar is down. That’s put the travel industry in the tank, right?Not really, insisted Alex Trettin, president of the Carlson Wagonlit Travel Center on Broadway Plaza in downtown Tacoma.
“With all the doom and gloom in the press, you’d think we’re all losing our jobs,” Trettin said last week. “Most of the people in the Puget Sound area are still working, still spending money and still traveling.”
UK: More nuclear plants ‘to be approved within two years’
At least eight new nuclear power stations are to be approved within the next two years and built swiftly under fast-track planning procedures, The Times has learnt.Gordon Brown believes that they will be needed to avoid an energy crisis in the next decade, and more will follow as the world tries to reduce its dependence on oil for power.
Coal To Liquid Fuel Study To Be Released
Officials in one eastern Kentucky county say they are ready to tell the world they have the answer to the country's energy crisis.Pike County officials say they are excited to release their findings from a year long coal to liquid fuel study.
Pickens' plan should spark energy debate
We don't know if Pickens' energy plan is the answer to America's energy woes, but at least an energy "voice" is on the scene. That can't be a bad thing. We hope Pickens does start a national energy debate that results in a plan the nation can live and prosper with.
Iraq's electricity-starved capital goes solar
BAGHDAD -- In a city with constant electricity shortages but no lack of sunshine, the new buzz is solar energy.Teams of engineers have appeared along major Baghdad roadways, bolting panels and bulbs to rows of towering steel poles to make solar-powered streetlights.
White House: Bush to lift offshore drilling ban
WASHINGTON - The White House says President Bush is planning to lift an executive ban on offshore oil drilling.In a Rose Garden statement on Monday, the president plans to lift the ban. But by itself, the move will not lead to more drilling off America’s coastline.
Congress must still lift its own legislative ban before offshore drilling can happen.
Canada should play big role in new world oil order: IEA
PARIS -- Canada could play a crucial role in helping to alleviate the current international energy crisis if it continues to expand Alberta oilsands production and considers allowing exploration off B.C.'s pristine coastline, according to a senior official with the International Energy Agency.But IEA chief economist Fatih Birol acknowledged there are major environmental considerations that weigh heavily on both options.
He also said increased Canadian production won't by itself alter the emergence of a "new world oil order," with consistently higher prices that could lead to economic decline particularly in the world's poorest countries.
Russian navy boosts combat presence in Arctic
MOSCOW - The Russian Navy on Monday said it was boosting its combat presence in the Arctic, including near the Norwegian island of Spitsbergen, amid increased international interest in the region."The Russian Navy has restored the presence of combat ships of the Northern Fleet in the Arctic region, including in the region of Spitsbergen," the Navy said in a statement.
That Sinking Feeling: Why Off-shore Drilling is Wrong Regardless of Peak Oil
It's a sinking feeling watching your country collectively making bad decisions over and over again. It seems like it's about to happen once more with the move to expand off-shore oil drilling and in the Arctic National Wildlife Refuge. This is happening because there hasn't been enough logical introspection into what is driving our thinking.
Happy Days for Oil Companies Reaping Massive Profits
Fortune released its list of the most profitable companies in the world and 7 of the top 10 were major oil companies, including the top spot. Of these, 5 out of 7 were companies with major holdings in the U.S.The myth that oil isn't creating huge profits is a favorable one for these companies, who fear their exclusive elite status in the business world may make them a tax target. The myth may have some rather skewed basis in reality, in that the profit margins (net income, including tax, over net sales revenue) are not as high as some companies. However, the fact is that oil companies commodity deal in a commodity that has become worth so much, this they don't have to have a large profit margin to make epic profits -- they simply have to sell.
Future of big oil companies threatened by skills dearth – survey
The world's biggest oil producers are facing a "major skills shortage" over the next decade, which was the industry's biggest threat, a report said on Monday, as London Brent crude traded just under $143 a barrel.Audit, tax and advisory firm KPMG International said that all the national oil companies' directors that it had surveyed said that "a lack of skilled personnel was the biggest threat to their businesses going forward".
Homeowners who use heating oil seek alternatives
As heating oil approaches $5 a gallon, consumers in the oil-reliant Northeast are looking at pellets, heat pumps, firewood and even geothermal systems to soften the blow of high oil prices -- which have almost doubled in the past year and gone up nearly fivefold since 2003.
As gas costs keep rising, look at ways to fight back
With gas prices hovering above $4.50 per gallon and with the growing likelihood that those prices may rise to $7 or more in the near future, the time has come for America to declare war.“Declare war?” you may say. “Aren't we already waging one too many wars these days?”
But I'm not talking about war on another nation. We need to declare war on oil itself: a multipronged attack involving business, government and you and me.
Melting Ice = Rising Seas? Easy. How Fast? Hard.
Most forecasting is easier and more reliable in the short run than over the long haul. Think of weather prediction. (And history is full of failed long-term forecasts of everything from oil prices to human population trends.)But for scientists studying the fate of the vast ice sheets of Greenland and West Antarctica, the situation seems reversed. Their views of sea trends through this century still vary widely, while they agree, almost to a person, that centuries of eroding ice and rising seas are nearly a sure thing in a warming world. The great shifts of sea level and temperature through cycles of ice ages and warm intervals make that clear. I wrote about that consensus last year in covering the reports released by the Intergovernmental Panel on Climate Change, but also wrote about scientists’ frustrations over trying to convey the importance of a slow-motion disaster.
Oil Brings Americans Closer to OPEC Debtor Dependence
(Bloomberg) -- Petroleum-exporting nations from Saudi Arabia to Russia are not only charging Americans record high prices for fuel, they are also poised to become the biggest creditor to the U.S. government.Holdings of Treasuries by oil producers and institutions such as U.K. banks that are proxies for Middle East nations rose 44 percent this year to $510.8 billion through April, four times faster than the rest of the world, according to the Treasury Department's most recent data. At the current pace, they'll surpass Japan, which holds $592.2 billion, as the largest owner this month.
While the investment of so-called petrodollars into government debt is helping to temper a rise in borrowing costs as the U.S. finances a record budget deficit, it highlights America's dependence on foreign money. New York's Chrysler Building was bought last week by Middle East investors.
Oil prices head lower as dollar advances
LONDON (AFP) - Oil prices fell on Monday as the dollar strengthened and traders took profits from a record run that saw crude hit historic highs above 147 dollars per barrel last week.The dollar got support after Washington announced measures to bolster Fannie Mae and Freddie Mac, two giant firms holding almost half of all US mortgage debt which had been pushed to the brink by the US subprime home loan crisis.
(Hyper)-Inflation, Deflation, HOCG and LOCG
At a certain point, we see a growing disequilibrium between supply and demand (Peak oil and food commodities) and we end up having an inelastic supply (peak oil) and a rising or stable demand for the LOCG . Prices start rising at an abnormal rate. There is inflation and sometimes hyperinflation.Important is to understand that this is the direct result of Fractional Reserve Banking and fiat money creation by the banks and political authorities. In other words, they are at the very origin of the evil they are blaming the speculators for today.
Farewell Indymac, What's Next? Say Hello to the 1970s Inflation Rate (Part 2)
When the smaller banks fail, the “Big 5” will snatch them up at pennies on the dollar compliments of Bernanke's printing presses. Maybe now you can see why every nation wants to get as far away from the dollar as possible. They understand the worst is yet to come. Bernanke's “Big 5” banking bailout is only ensuring the dollar crisis will continue. However, no nation will be able to completely escape the effects of the falling dollar since it remains the universal currency. It is deeply embedded within global commerce and has extensive reach throughout the global financial system.And of course, you must have the dollar to buy oil. But this could change. In fact, Iran has already tried to convince OPEC members to follow its lead in demanding Euro payments for oil on its newly created oil exchange (I previously discussed this global dependence on the dollar in the article “The Big Secret about Peak Oil and the U.S. Military”). In the meantime, most nations continue to hedge the weak dollar by increasing gold reserves. As for the Middle East , they have their hedge against a weak dollar – oil.
UK: 'Lights will go out' by 2015 if Lords rejects Planning Bill
The lights will go out across the UK in seven years if the Planning Bill coming up for review this week is rejected in the House of Lords, according to a leading business trade body. It estimates the country needs £100bn of investment in major energy plants by 2020.
OPEC to Say Demand for its Crude to Fall in 2009, MEES Reports
(Bloomberg) -- The Organization of Petroleum Exporting Countries will tomorrow say demand for its own crude oil in 2009 will be less than its forecast for 2008, the Middle East Economic Survey reported, without saying where it got the information.The 13-member OPEC will say in its July 15 Monthly Oil Market Report that the call on its crude next year will be 500,000 barrels a day less than the corresponding figure for 2008, the Cyprus-based newsletter said today.
Venezuela says it will stop sending oil to US if Exxon freezes assets
MARACAIBO, Venezuela (AP) - President Hugo Chavez says if Exxon Mobil Corp. dares to freeze Venezuela's assets, he will not sell any more oil to the United States.Chavez said Sunday that while the U.S. oil giant lost an international court case to freeze the assets in March, it is still trying.
He said that if Exxon Mobil succeeds, oil prices will reach US$300. He also accused the company of stealing Venezuela's oil.
Nigerian Oil Union Suspends Strike Over Fuel, Welfare
(Bloomberg) -- A Nigerian oil workers' union suspended its strike to force the government to lower the price of diesel, improve the country's poor roads and the welfare of union road-tanker drivers, the union said.
Five-day Brazilian oil strike begins
Brazil's Oil Workers Confederation began a five-day strike against Petroleo Brasileiro SA, an action that may cut the country's daily crude production by more than 50 percent.
China oil demand unmoved by power woes
BEIJING — China's worsening power woes are all but guaranteed to trigger a surge in imported oil, just as they did in 2004 during the worst crisis in decades, right?Wrong, say experts and industry sources. While the theme is familiar, the circumstances couldn't be more different, suggesting that oil bulls looking for a reason to push crude beyond $150 (U.S.) a barrel will need to look elsewhere.
Kazakhstan to Tax Oil Production at Up to 20% of Output Value
(Bloomberg) -- Kazakhstan will tax oil production at 4 percent to 20 percent of output value depending on the size of the field as the government seeks greater revenue from its energy assets, a deputy finance minister said.``The bigger the oil field, the bigger the tax will be,'' Daulet Ergozhin said today by telephone from the capital Astana. The government will try to maintain the attractiveness of oil- field investment in assessing the tax, he said.
Latin America Oil Rig Use Rises to 22-Year High as Oil Surges
(Bloomberg) -- Oil and gas rig use in Latin America rose to a 22-year high in June, led by Brazil, Mexico and Venezuela, according to a report by Baker Hughes Inc.Oil explorers in Latin America deployed 398 rigs last month, or about 36 percent of drilling equipment used globally excluding the U.S. and Canada, the highest since April 1986, Baker Hughes said on its Web site. The region's rig count rose 8.7 percent from a year earlier.
Jet Fuel Premium Collapse as Airlines Ground Fleets Weakens Oil
Fuel demand will fall 7.5 percent this year, or 95,000 barrels a day, and 104,000 barrels a day in 2009, according to the U.S. Energy Department. That will spur as much as a 90 percent decline in the fuel's premium to heating oil futures, said Mike Busby, manager of oil and refined-products trading for Northville Industries Corp. in Melville, New York.
Worth the risk? Debate on offshore drilling heats up
Environmental hazard or energy bonanza: Oil and natural gas trapped beneath the USA's ocean floor mean different things to different people. As gasoline soars beyond $4 a gallon, President Bush and his would-be Republican successor, John McCain, see a viable source of domestic production. Democrat Barack Obama and the nation's environmentalists see a threat to pristine waters and beaches — and little help at the pump from offshore drilling.It's a debate with a rising decibel level, thanks to an energy crisis fueled by rising demand halfway around the world.
Bill passing brings electric rail closer to reality for Auckland
THE recent passing of the Land Transport Management Amendment Bill takes the Auckland region a step closer to electric trains and other public transport improvements.That’s the belief of Auckland Regional Council chairman Michael Lee, who is grateful for the support of MPs at a time when oil prices are constantly rising.
Africa: The Next Victim in Our Quest for Cheap Oil
Whether or not we have fully arrived at peak oil can be left to the nitpickers and bean counters to decide. What we know for sure is that the cost of black gold has exponentially risen in just a few short years, and the global economy it is built upon is currently straddling a razor waiting for the inevitable slice. That final cut may come from Nigeria, where all the major oil companies have done business, dirty and otherwise, for the last five decades, degrading the environment and depressing the general population along the way.
Italy and Britain eye nuclear power potential
PARIS (Reuters) - Italian Prime Minister Silvio Berlusconi said on Sunday oil-consuming countries should meet to fix a maximum price they were prepared to pay for oil or they would have to invest heavily in nuclear power.Berlusconi denounced the "unfair" movement of wealth from consumer nations to oil-producing countries and the "exponential" rise in prices.
Forests to fall for food and fuel
Demand for land to grow food, fuel crops and wood is set to outstrip supply, leading to the probable destruction of forests, a report warns.The Rights and Resources Initiative (RRI) says only half of the extra land needed by 2030 is available without eating into tropical forested areas.
Governors talk of moving beyond corn-based ethanol
PHILADELPHIA - Governors from the coal fields of West Virginia to the corn fields of Iowa talked Sunday at their summer meeting about moving beyond ethanol produced just from food sources.They sometimes have different priorities in reaching this conclusion — priorities that can be as simple as who grows corn and who feeds it to livestock.
And they're also not talking about replacement so much as supplementing: using switchgrass or wood waste products, for example, along with corn.
Bush climate action now? "Bogus": Schwarzenegger
WASHINGTON (Reuters) - California Gov. Arnold Schwarzenegger said on Sunday the Bush administration did not believe it should do anything about global warming and that any last-minute action before leaving office would be "bogus."
Russian researchers flee melting Arctic ice floe
MOSCOW - Russian scientists are evacuating a research station built on an Arctic ice floe because global warming has melted the ice to a fraction of its original size, a spokesman said.
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Link above OPEC to Say Demand for its Crude to Fall in 2009, MEES Reports
This is astonishing! OPEC, knows in advance, that demand for its own crude oil in 2009 will be less" than in 2008. In fact, demand for OPEC oil will be half a million barrels less next year than this year. How do they know that? Perhaps they know they will produce half a million barrels less next year, therefore demand will be half a million barrels less. After all, is there any other way they could possibly know?
Ron Patterson
"Perhaps they know they will produce half a million barrels less next year, therefore demand will be half a million barrels less. "
LOL. rimshot!
I read demand to equal consumption. Consumption will be down because that is all they can produce.
I have a hard time with all of the "demand" statements I read, for that reason.
WaMu and National City plummet
Shares of the two troubled banks each plunge about 30% as investors fear the possibility of more bank failures.
http://money.cnn.com/2008/07/14/news/companies/washington_mutual/index.h...
What will bank failures do for oil investments?
I thought the exact same thing when I read that headline...
Yep, they've been setting themselves up for this for a while now. Nothing to see here, move along, lol.
Compare with this claim from Lehman
Crude oil set to tumble below $100 next year, Lehman predicts
"Lehman Brothers to collapse before next year, Lehman predicts"
BrianT...The strategy of these banks is simple. Since there is no avoiding the inevitable let's go bankrupt first so that our depositors will get some money before the FDIC runs out. If the depositors are satisfied we might avoid jail time, we might avoid tar and feathers and a rail ride out of town, maybe the angry mob won't gather and burn our houses down.
I took a peak at the ten most active list just now...NCC seems to be winning the race to the bottom. WAMU in second but gaining ground...and surprise surprise Fannie and Freddie stock has hardly moved. Are they in shock?
You know, I am so disgusted right now that I am going to get on a Harley and change the air in my head! Maybe I will stop at the Iron Horse and see Helment Dave and the regulars. Maybe I will be back tomorrow. Here is hoping that all have a pleasant day...me too...
To cite Oscar Wilde:
Work is the curse of the drinking class.
And again,
Moderation is a fatal thing... nothing succeeds like excess.
And yet again,
We are all of us in the gutter.
But some of us are looking at the stars.
Cheers! Enjoy the ride!
And, a little off topic, but one of my favorites from him:
"A man who marries his mistress leaves a vacancy in that position".
well the bank we[+ one adult child] use is on some short lists for failing . i closed out savings there as a precaution 6 mos. ago & tomorrow get most checking $ out[wife's check goes there for now] & will open an account at another. over 25 yrs. w/ em.
clearest sign to me re my bank was stock down over 90% YTD .
today CNBC analyst said, 'we can't recommend putting $ under u'r mattress"...
also NBC analyst 'oh FDIC has 60 billion & if that's not enough u have the full force of the US gov. backing u'r account..'
The Lehman projection is apparently based on their assumption that KSA is squeezing USA by not producing on purpose, even though they can.
Once negotiations with the new US president have guaranteed their future security, KSA will allegedly (according to Lehman) open the spigot and cheap oil will flow again and prices will drop to $65-$80/barrel.
Interesting that at the same time, as linked above, OPEC is assuming that oil demand will be less in 2009.
Surely somebody's lying more than the rest :)
SamuM writes:
It kinda makes sense. KSA feels threatened by the current administration. So they fight back by doing whatever they need to dramatically increase their wealth awaiting a time to use it. With a new president and presumably an administration easier to work with they might reward the USA.
If such happens I would be more likely to believe the "blue eyed slave" remarks.
Would that 65 be in "new" dollars or old dollars?
Sheesh! Lehman? Investment "banks" are not people I would take advice from or even listen to. These are stockbrokers and whatever they say is designed to influence people into doing their bidding. Hey buddy, I got some good high grade alternative investment vehicles you should be considering.
No-you have to give them a special label that intimidates the mark. SIVs (structured investment vehicles) is a good one. Sounds really intelligent and technological, like financial engineering. Actually anytime you can get words like "structured" or "engineering" in the title you are on the right track. You want your scam to sound very complex-Greenspun was the master at this garbage.
This is an interesting prediction--that oil prices will fall below $100 per barrel in next year. The prognostication is made even more interesting by the reason it gives for the anticipated price decline. Oil prices will fall not because of demand destruction, but because of increased supply from OPEC.
But how likely is this?
Two camps have emerged that would find an increase in OPEC supply highly doubtful.
One camp consists of the Peak Oilers. These are the Materialists, the physicists and chemists, and their applied science cousins, the engineers and geologists. The Oil Drum attracts a good number of these people, and we are all familiar with their arguments that appear daily here on this blog.
The other camp consists of economists, political theorists, historians and psychologists. These are the Vitalists. They come to the same conclusions as the Materialists--that an increase in OPEC production is highly unlikely--but for very different reasons. Amongst their ranks are people like Amy Myers Jaffe, with an article posted here on TOD yesterday...
http://www.chron.com/disp/story.mpl/editorial/outlook/5884752.html
and Bassam Fattouh of the Oxford Institute for Energy Studies, who presents many of his ideas in this report, "OPEC Pricing Power"...
http://www.oxfordenergy.org/pdfs/WPM31.pdf
Amazing to me is that the Materialists and Vitalists, even though they embrace the same conclusion, have split into two warring camps. The two articles by Vitalists above religiously shun any mention of Peak Oil. They seem to embrace the reserve figures published by OPEC countries as if they were revealed truth. Likewise, many Peak Oilers have also bowed their necks, ruling out any possibility that geopolitics and/or the internal political or economic developments within OPEC countries could stunt their oil production. The controversy very much reminds me of the early Christian doctrinal dispute over the Nicene Creed:
William Manchester, A World Lit Only By Fire: The Medieval Mind and the Renaissance
That curiosity aside, I find Morse's predictions of increased OPEC supply more than a little counter intuitive. What possible motive would OPEC have to increase supply and drive the price of oil back down below $100 per barrel? Bassam Fattouh discusses this extensively in his paper linked above, "OPEC Pricing Power." He concludes that many oil price "scenarios implicitly assume that OPEC has the incentive to increase market share (production) without any regard to oil prices. Specifically, it has not been investigated if the projected output path (increased OPEC production) will serve the interests of OPEC."
Fattouh builds the case that "rapid increases in OPEC output...are implausible and 'are likely to be contrary to OPEC's own best interests'." Fattouh's doubts that OPEC countries will increase production are based on a simple concept--that OPEC countries want to make the most money that they can. And along this vein he cites a study that calculates OPEC's NPV (Net Present Value) of future oil profits under various scenarios. His conclusion: Aggressive expansion of OPEC production output can yield lower payoff than if OPEC merely decides to maintain its market share (flat production). "In other words," Fattouh concludes, "it is more profitable for OPEC to err on the side of under-investing in new capacity as opposed to expanding capacity as the decline in oil sales can be compensated for by the increase in oil price in tight market conditions."
So anyway, he gets back to the same conclusion of the Peak Oilers--that OPEC production will not increase--but just for different reasons.
Now back to Morse's prediction that OPEC production will increase. The only possible motive I can see for OPEC to increase production to the point that it drives prices back down below $100 per barrel is if the Saudi royal family's imperial sponsor, the United States, somehow is able to convince it that it is in its best interest to do so. This, however, is also highly unlikely. US prestige and influence is on the decline, not on the rise, and the Saudi royal family is under increasingly mounting pressure from within its own borders to maximize oil profits.
A nonsensical statement.
"Many?" Like, who?
"Some" even talk a lot about geopolitical elements, even as symptoms of peak oil feedback loops:
Link.
The link to the Nicene Creed is, to be mild, ill-advised.
"The link to the Nicene Creed is, to be mild, ill-advised."
But nonetheless, in the context of the post, interesting. I tend to abhor dogma--I appreciate this example of the tragedy it sometimes leads to.
Good points worth arguing.
However, one must also balance exporter OPEC NPV against potential substitution. If price rises too much in a short time, this rise (not the high level itself) historically results in demand destruction. Further, if high price levels continue, this can result in demand substitution of an asset the price of which OPEC does not control. This has been modeled by Lisku et al in their oil export pricing model.
Thus, it would seem, that for oil exporters having spare capacity (assumption), the optimum strategy would be to let price rise as high as not to trigger major worldwide destruction/substitution, while hopefully ensuring long term production and revenue stream.
One could argue we are already past a level of comfortable for oil price and that destruction/substitution is already happening. The harsh words from KSA against biofuel initiatives within the OECD could also be interpreted as signs that OPEC is aware of the risks of current higher prices - up to a point at least.
However, as you (imho) correctly state, this appears to make very little difference in the end: if production doesn't rise for whatever reason, prices are likely to plummet - even if they might correct a bit.
So, in the end the fact that geological peaking and political production curtailing are more likely than unlikely to happen at the same time, does not make our lives a teeny bit easier.
Excellent points all, SamuM.
My feeling, however, is that if demand were to take a sudden nose dive, OPEC would curtail production in an attempt to defend some floor price.
Furthermore, I believe that they would be successful.
Afterall, between 1979 and 1985 OPEC did get its act together and reduced production from approximately 32 million BOPD to 17 million BOPD. At that time, however, it just couldn't overcome the combination of a flood of new production hitting the world markets from Russia, Mexico, the North Sea and Venezuela and decreased world demand from 67 million BOPD to 58 million BOPD (1979-1983). Because I have managed to convince myself that we have reached non-OPEC Peak Oil, I don't see things playing out this time like they did in the 1980s.
When two arguments lead to the same conclusion, in this case the vitalists and the materialists conclude production isn't going to increase, sometimes both are right. The vitalists have a legitimate argument concerning the motivations of producers, even if they don't acknowledge PO. As they point out PO is not necessary in order to predict a supply crunch. And as the materialists point out, if PO has been reached, then whatever the motivation supply will decrease. IMO, we have reached a point where both processes have come into play. A complete understanding of the world requires both interpretations be used appropriately.
This is not to ignore the other meaning of vitalist in this thread, which is the spread of magical thinking. But it also true that one can be a psychologist or and economist, and still be realistically dealing with the human part of the world, even if many ignore real world physical limitations in their theory.
I think most of the "peakists" here at TOD would agree that there is no definitive way to know that the Saudis don't pump more because they can't or because they don't want to. So what they do is look at the evidence, such as is available to the outside world, and try to make a judgment based on that.
What evidence do the vitalists making their judgment on? Could be, should be, may be. IMO, this is the same universe the Bushists live in, a world of Will, in which human agents are responsible for everything. The materialists, on the other hand, are reality based. The materialists could be right. But so could the quarter in my pocket if I flip it.
shargash,
I certainly didn't mean to impugn all the posters here on TOD. Gosh, people come here from all sorts of political, philisophical and relgious backgrounds. And the service that TOD performs is invaluable.
The argument between the Vitalists and Materialists is actually a very old one. It started with the advent of the Renaissance. Up until that time the Vitalists--i.e., theologians--held sway. But then concepts like reason, rational thought, empiricism, objectivism and scientific materialsim started to take hold, which all got rolled up into a larger philosophical framework called Modernism. Today scientific materialism has become one of its dominant creeds.
Perhaps one of the best modern-day critiques of Materialism is given by Daniel Yankelovich in his book Coming to Public Judgment: Making Democracy Work in a Complex World. As he explains, one of the flaws of Modernism is:
The same idea is expressed more concisely by Jacques Barzun: "[W]hen by a combination of science and finesse, useful inventions are created and benefit the common life, the public is doubly convinced that science has a monopoly of truth."
An early critic of Materialism was Max Weber. He questioned its spiritual failings. As Yankelovich explains:
Materialism experienced another crisis following WWII. Disillusionment came about when science and technology were used to perpetrate mass murder and genocide on a scale never before imagined.
I believe that Materialism may now be facing another crisis, this time not triggered by those turning its achievements towards evil, but by men of good intentions. More specifically, I believe science and technology may have reached their limits to control the environment for human benefit and comfort. But even more alarming, good intentions may end up having negative, unforseen and extremely destructive consequences, such as global warming.
Downsouth,
My degree is in Philosophy, so I'm pretty familiar with the old debate. I would agree that materialism is having a crisis, though I do not believe it is an internal crisis. Basically, much of the world is turning away from an empirical, reality-based view of the world, and towards a faith-based (or will-based, or fantasy-based) world view.
Materialism has it's limits. However, it is absolutely sovereign at describing the material world (that's not to say it is never wrong, just that it is far and away the best framework for understanding the world). I have no issues with people who want to use other frameworks to describe the human reaction to the world. It is when people begin to use faith in attempt to describe the world itself that I object.
You can see this turning away in Christian fundamentalism's (or Osama bin Laden's) rejection of much of modern science. You can see it in the Bush administration's "wishing for a pony" in Iraq. You can see it in blind faith in capitalism. You can see it in AGW denialism.
The human race isn't going to be able to deal with the our various real world crises in a fog of medieval superstition. So I have a tendency to smack down vitalism whenever I see it mis-applied to the empirical realm.
BTW, there was a typo in my previous post that I can't fix now that's it been replied to. I intended to write "The vitalists could be right. But so could the quarter in my pocket if I flip it."
"Basically, much of the world is turning away from an empirical, reality-based view of the world, and towards a faith-based (or will-based, or fantasy-based) world view."
This is certainly happening in the US. What about Asian cultures such as India and China, where an increasingly educated middle class seems to be embracing the views of the western Enlightenment?
I don't think it has been a big factor in Asia. I'm not sure about India. There has been something of a rise in Hindu fundamentalism lately, but I don't know if that's been translated into the kind of delusional thinking we see in the US.
shargash,
I certainly can't disagree with anything you said.
The atackers of Cartesian philosophy hold that science and numbers are not the only truth; the defenders retorting that if reason is given up, intellecutal anarchy and wild superstition will reign.
But I believe that analytical reasoning faces a greater challenge than these frontal attacks. This challenge comes from the false prophets of Materialism--those who pass their opinions and judgments off as "science." In this category I would put almost all modern economists. This is not to say that the study of economics is unimportant, or even less important than the study of physics or chemistry. What it is saying is that when the abstractions of scientific materialism are applied to mental and social processes, the result is disastrous.
Along similar but very different lines I would include all the generals and military "experts" that the Bush administration marched out to argue in favor of the Iraq invasion. We all remember the infamous Colin Powell testimony before the United Nations. The public believed they were getting knowledge. Instead, what they got was ideology, cant and outright lies.
I'm not sure the public knows who to trust any more.
Whenever I heard discussions like this I often think of Paul Ehrlich. Guys like him remind me that we are not omniscient. Life is complicated.
..in other words you can't use reason to study human beings. That is what you are implying?
I think the problem with economic and social theories tends to be too little use of reason, not enough. People do a little investigation, form a hypothesis, then go out and try to remodel society based on a half-baked idea.
For example, in economics there has been a tradition of treating human beings as rational actors who will always maximise self-interest. This is an idealistic (faith-based) view. We would like it to be true.
Whereas a contrarian investment perspective observes that human beings fall prey to self-deception, herd behaviour and manias, and expects bubbles and booms and crashes and scams and crises to follow.
In this example the latter perspective is more accurate because it is more scientific - it observes "the human animal" and notes how men ACTUALLY behave, as opposed to how we would like to think of ourselves.
Yes.
Is that lame on?
1.2% rise in demand plus a 5.2% decline rate equals new oil to the tune of 6.4% needed. That's 5.5 million barrels using an all liquids of 86,000,000.
Does Megaprojects support that number for 2009?
Cheers
Here's a theory about OPEC advance knowledge of demand:
We all know that there is a turn-over in producing wells. Older wells decline in flow rate and become less important in the mix of producing wells. Newer wells are drilled and come on line. But newer wells produce oil that is generally of a lower quality - heavier, more sour, whatever it was that kept them from drilling lots of wells in that part of the oil field during the initial development. Maybe for reasons just outlined, they know that what they will have to offer next year will be less desirable than what they are offering this year. Maybe they know it is so much less desirable that they have no hope of fooling buyers. Maybe they know that the newer oil can't all be processed unless there are massive upgrades of the worlds stock of refineries. So it really can't all be sold. Isn't that 'less demand'?
You might say that there is less 'supply' of 'good' oil. But they choose to say that it is a problem with the attitude of buyers which leads to reduced demand.
Happy quatorze juillet
http://hvcchoir.com/wp-content/uploads/2008/07/french-national-anthem.mp3
(if you listen carefully you can hear my daughter)
Best hopes for revolution
Yes, this was a bad day for the French Aristocracy--
I was in Paris in 1989, and it was quite a party on the 200th anniversary.
Kind of as interesting time, with Berlin Wall coming down, China in revolt, a hint of positive energy was present.
Of course that was short lived, and one only had to look to the US and the Reagan presidency, and to Thatcher in the UK, to see this was folly.
Aussi a toi, M. Super-Homme Deux!
I see they're still singing the politically incorrect original with all that stuff about 'qu'un sang impur abreuve nos sillons'(let impure blood water our furrows), etc.
Tut tut.. don't you guys have some kind of 'Marseillaise lite' for bleeding hearts like ourselves? A softer, gentler, version, perhaps. :-)
RE: Jet Fuel Premium Collapse as Airlines Ground Fleets Weakens Oil
The story suggests that as the jet fuel demand falls, the premium between distillate and jet fuel may decline, reducing the price below the present $4.2766 a gallon in New York. But, the price of heating oil may spike this year, if we have a colder winter than last, thus the market price of jet fuel may not actually decline. All those stories lately about people in the Northeast having trouble paying for their heating oil just makes one think the airlines aren't out of the woods yet. Folks around here have used monitor type kerosene heaters in winter, as they are quite efficient. And, kerosene can be burned in diesel engines, thus the pump price of kerosene is about the same as diesel, even though there's no road tax on the kerosene.
E. Swanson
Interesting that refineries are expecting a 90% drop in the crack spread of jet fuel over heating fuels.
This would drop jet fuel crack spread below $5, below the historical average - not unheard of, but possibly signaling seriously weakening aviation growth. If I'm reading this right.
My personal understanding about mid-distillates suggests the same conclusion that you came to, Black Dog.
That is: crack spread for mid-distillates unlikely to drop significantly, unless the world wide diesel/fuel oil power generation demand drops significantly. There have already been black outs due to shortages worldwide, so I'd assume that a small easing in jet fuel demand would be unlikely to immediately show as a crack spread price drop for jet fuel.
Then again, in the China oil demand unmoved by power woes demand response in China is already happening in regards to diesel in power generation. Surely if this goes on, things will ease worldwide.
Am I reading this right?
Don't try burning kerosene in a diesel.You will need a full engine rebuild if you do.Pistons,rings,valves and seats and probably big end bearings.Very,very expensive.
I recall that during cold weather, adding some kerosene to the diesel in a car can prevent thickening due to cold temperatures. The amount added to make #1 diesel was about 5% kerosene and 95% #2 diesel.
http://www.amsoil.com/storefront/acf.aspx
And:
E. Swanson
When running a fuel terminal, you attempt to keep your #1 Fuel Oil tank clean (water clear, no yellowing), you also sell it as Kerosene. In Northern climes you blend 10%, sometimes 20% or even 30%, into your #2 Fuel Oil (Diesel) to keep it from gelling. We used to call it X/Y blend.
Not sure about that reference of Mercedes saying to add gasoline. Lowers the flash point, strictly verboten for a diesel engine. Must be a mistake on that web site. Gasoline will crater a diesel faster than you can say 'pre-ignition'.
Great piece on the tar sands complete with video;
"Canadians ponder cost of rush for dirty oil"
http://www.guardian.co.uk/environment/2008/jul/11/fossilfuels.pollution
"As oil prices continue to reach record highs, the search for new sources of energy has led the world to Alberta, Canada, and its vast oil sands. Now, John Vidal finds, the country famed for its wilderness and clean living finds itself caught between fuelling the world's oil-hungry economy and the ecological devastation and soaring greenhouse gas emissions that exploiting the tar sands produces"
In the DrumBeat yesterday or the day before (I think it was), one of you characterized capitalist politico-economic strategy as privatizing profits and socializing losses. Glancing back now, I can't seem to find who posted that and in what context.
Anyway, just wanted to thank you for posting that suggestion, as it seems to me to capture the effects of capitalist society in a nutshell. I've been thinking a lot about this little nutshell since I read it. Was that your own characterization, or someone else's?
I think it was River that used the expression yesterday. However, it has been around for a while. I first read it on the web maybe 6 months ago. I don't remember where, however, and I have no idea who came up with it.
It is a pithy quote, though, and spot on.
A quick google shows it in less catchy form in marxist literature back to at least 1987. I suspect it originates nearer 1887...
Shargash...I definitely did not originate the quote. I believe the first time that I read the quote was in the 1970s. I have no idea where it originated but the Marxist literature guess is as good as any. Or, it might have originated with Nietzsche. WAG.
How about this? We're all Enron now.
Those Special Purpose Vehicles were never outlawed.
Professor Willem Buiter, blogging for the Financial Times, has a modest proposal--and some "inconvenient truths"--to discuss with American taxpayers:
On July 11, 2008, the New York Times reported that US government officials were considering a plan for the US government to take over Fannie Mae and/or Freddie Mac if their financial situations were to worsen due to the US housing crisis. These government officials were also reported by the New York Times as stating that the government had also considered calling for an explicit federal government guarantee of $5 trillion on debt owned or guaranteed by the two companies through legislation. You can see why the creditors to these GSEs don’t seem to be too worried. There are many forms of socialism. The version practiced in the US is the most deceitful one I know.
An honest, courageous socialist government would say: this is a worthwhile social purpose (financing home ownership, helping my friends on Wall Street); therefore I am going to subsidize it; and here are the additional taxes (or cuts in other public spending) to finance it.
Instead the dishonest, spineless socialist policy makers in successive Democratic and Republican administrations have systematically tried to hide both the subsidies and size and distribution of the incremental fiscal burden associated with the provision of these subsidies, behind an endless array of opaque arrangements and institutions. Off-balance-sheet vehicles and off-budget financing were the bread and butter of the US federal government long before they became popular in Wall Street and the City of London.
[..]
So let’s call a spade a bloody shovel: nationalise Freddie Mac and Fannie May. They should never have been privatised in the first place. Cost the exercise. Increase taxes or cut other public spending to finance the exercise. But stop pretending. Stop lying about the financial viability of institutions designed to hand out subsidies to favoured constituencies. These GSEs were designed to make losses. They are expected to make losses. If they don’t make losses they are not serving their political purpose.
http://enrevanche.blogspot.com/
h/t Ilargi
http://www.theautomaticearth.blogspot.com/
NO! Mae and Mac are NOT federally insured. The higher returns go hand in hand with the risk. Let them fail.
Privatizing them in the first place (good idea or not) is irrelevant at this point. They are private, and should remain so, right up to their deaths.
Excellent Post! I really like the Automatic Earth link related to the French Revolution and the Storming of the Bastille.
I don't see America quite to the stage of open armed revolt though. Very few feel the pain yet.
Until people see hyper-inflation, massive joblessness and a dramatic change in their personal lifestyles you might not see anything like public outrage. What did we think: "Deficits don't matter."
After the pain hits all bets are off.
I think more people feel pain than you suspect.
You have identified the fact that we have the worst of all worlds. We have socialism disguised as capitalism where we pretend to do things in the public interest but primarily serve well connected private interests. Unfortunately, however, almost all of us have been caught up in this snare and will be destroyed if we fail to shore up these institutions.
Debt is the main culprit. Our government refused to pay the piper and is forever putting off that payment until the next and then the next generation. How the Republicans, primarily, can continue to talk about the sacredness of tax cuts is the biggest crime.
I believe it is derived from the earlier expression, "Heads I win, tails you lose."
I heard George Will, the conservative columnist on "This Week With David Brinkley" use it back in the 1980's
RC
I use that expression all the time. It is a fairly old observation - decades.
I don't have any idea where it was first cooked up, either, but it is a nice succinct summary of our brand of corporatism.
I'm in Australia and I've heard that expression for many years; particularly in relation to the Nationals (a rural/farming party).
Garret Hardin, in his 1986 "Filters Against Folly" book, wrote this up as The Double C - Double P Game (Commonize Costs, Privatize Profits).
The whole book is a gem if you have not read it (or re-read it) lately. The "Numerate Filter" is, IHMO, what TOD is all about: understanding in quantitative terms the importance of flow volumes, the implications of decline, and the inadequacy of alternatives.
Here's a quote from the book:
"What is the free enterprise system? . . . Calling the system a 'profit system' is misleading, because it is truly a 'profit-and- loss system' as far as the competitors are concerned. The general public wins because competition ensures low prices. The great fortunes made by some enterprisers can be viewed as commissions for helping to keep prices down for everyone. Unfortunately, the truth is not always so simple. A comprehensive history of great business fortunes would show a disconcertingly large number that were made in a quite different way: the enterpriser devised a silent way to commonize costs while continuing to privatize the profits. . . . The hidden rules of the game are these: Commonize Costs and Privatize Profits. The result we may refer to as . . . the CC-PP Game. Such a union of privatism and commonism is not even hinted at in the official apologies for free enterprise. . . . Commonize costs and privatize profits--but don't tell anyone. This has been a formula for success for centuries."
Now if we combine this with the idea that fascism is the combination of corporate and state power, what is the result? Fascism is a system in which private wealth supports a totalitarian government in exchange for guaranteed profits, while related losses are distributed by the government to those unable to resist.
At first this might be ordinary taxpayers, but eventually for the regime to survive, war will be used to seize the land and resources of other countries and their citizens will take the losses.
super390...do not forget the corporation's ability to externalize the cost of environmental degradation...by externalization, the costs of degradation are then spread throughout society. This is another cost that is caused by corporations but borne to a large degree by the general public. That is, if a clean up is accomplished at all. Bushco has been busily dismanteling whatever environmental protections that were put in place by past administrations to force corporations to clean up after themselves.
As a matter of fact, the government is one of the biggest polluters and seldom cleans up after itself.
Garrett Hardin is most famous for his fable, The Tragedy of the Commons -- which, of course is exactly about all of the above. It definitely didn't start with Bushco, although they have been among the most blatant in recent history. Hardin was writing about something that was already well established.
By the way, his solution to the intractable problem was population control and a strong central authoritarian government. I suppose that is what is in store for us.
Good idea ... privatize profits, socialize loses. Also I haven't heard the figures yet but: How much do you think the CEO of IndyMac is going to make as the bank closes due to bad judgement at the top while others (over $100K) lose their shirt? He was all smiles on TV.
Mozillo started that scam shop then he started Countrywide. The USA government decided quite a while ago to foster a Grifter Nation-these guys are just doing what they need to do to get richer under the actual rules of the game (not the theoretical rules). The key for these guys is to stay out of jail and the vast majority do. It is all pervasive at this point.
A more succinct term is "kleptocracy", which is precisely what the USA is now.
WNC-- Actually it is closer to a:
kakistocracy (kăk'ĭ-stŏk'rə-sē, kä'kĭ-)
n., pl. -cies.
Government by the least qualified or most unprincipled citizens.
[Greek kakistos, worst, superlative of kakos, bad; see caco– + –CRACY.]
They hang the man and flog the woman,
That steal a goose from off the common,
But leave the greater villain loose,
That steals the common from the goose!
There is no other way to wealth. But if it happened long enough ago, people are happy to believe it was God's will, and think the ruling class is some kind of special race.
Did you just make that up, or does it come from somewhere else? I apologise if this is something I should know... It's great, anyway.
Hi beingtime,
re: "privatizing profits and socializing losses"
A further twist on an old theme:
http://www.democracynow.org/2008/1/18/free_lunch_how_the_wealthiest_amer...
David Cay Johnston, Pulitzer Prize-winning investigative journalist for the New York Times. His latest book is titled Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You with the Bill). He is also author of the bestselling book Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich—and Cheat Everybody Else.
Excerpt:
“I’ve got the documents. President Bush, who will go down in history as the great tax cutter, owes almost all of his fortune to a tax increase that was funneled into his pocket. What happened is, an oil man named Eddie Chiles wanted to sell his money-losing Texas Rangers baseball team.” (Goes on to talk about the use of eminent domain, etc.)
A new International Petroleum Monthly came out, supposedly July 10, but I don't remember seeing it when I looked earlier. April amounts are a bit lower on a worldwide basis. Crude and condensate is 74.080 million barrels a day, down from 74.353 (revised downward) million b/d from March. All liquids is 85.466 million b/d, down from a 85.599 million b/d in March.
One thing I noticed is that Saudi Arabian crude oil production for April dropped to 9.1 million barrels a day, from 9.2 million barrels a day in March. When we were earlier estimating what impact the 300,000 barrels a day increase, plus the 200,000 barrels a day increase would have, I think some of us were assuming a 9.2 million barrel a day starting point.
I think it was discussed in the July 10 DrumBeat. Darwinian usually posts a brief summary/analysis.
That was my thought too. I went back and looked and it wasn't there. There were several other reports out that day, which Darwinian discussed. (I did, too.) I am suspicious that the report didn't really come out until this weekend, even though it is labelled July 10. If anyone has a link to where it is discussed, maybe they could point me in that direction.
I downloaded the EIA IPM for July 2008 to one of my harddisks at July 10.th (US time).
Naw, it came out very late in the day July 10. I meant to post something the next day but just did not get around to it. I will try to be more punctual next month.
Changes, April as compared to March:
World Oil Production down 273,000 barrels per day.
OPEC Oil Production down 232,000 bp/d.
Non-OPEC production down 41,000 bp/d.
Big changes on the downside, Nigeria down 150 kb/d, Saudi down 100 kb/d, Norway down 98 kb/d and Canada down 48 kb/d. Ups were Australia 65 kb/d, Brazil 47 kb/d and UK 46 kb/d. Lots of other changes but smaller.
The biggest news, in my opinion was Non-Opec, for the first four months of this year was down an average of 512,000 barrels per day or 1.25 percent compared to the same four months last year.
Ron Patterson
Although, I suppose, you could say conversely that global production in the first 4 months of this year was 1.1 mbpd above the same period last year, or a gain of 1.5%.
Yes, that is exactly what happened and one could say that. However that, was in my opinion, OPEC jerking us around. They cut production in in October of 2006 then started undoing that cut in July of 2007. Now the OPEC 11, (OPEC 13 less Angola and Iraq) are almost back to the point they were in October of 2006. (Angola was not a member of OPEC in 2006 and had no quota until this year. Iraq is not subject to quotas.) All the gain in OPEC since October 2006 has come from Angola and Iraq. The rest of OPEC is down just over 150 kb/d from Oct of 06, according to OPEC own Monthly Oil Market Report. A new report is due out tomorrow and I will post a report on what it has to say.
At any rate, OPEC is now pumping flat out so we shall see what happens from this point. Saudi is trying to bring new production on line, from some very old fields. Let's hope they are successful. But looks like they, or more correctly OPEC, are expecting a decline of half a million barrels per day next year.
Ron Patterson
Darwinian,
Will the graph below complement explaining OPEC development in crude?
Click diagram for larger version.
Yes it does, thanks. The lowest point in OPEC production, in the las 4 plus years, was early 2007. This was an OPEC cut in production, though we earlier thought it might be natural decline. But we now know it was a cut pure and simple. This has all been an education for all of us.
Earlier, before the cut, OPEC was producing flat out. Then they cut and now they are producing flat out again. They have plateaued, and may be in decline. Non-OPEC has been on a four and one half year plateau and it appears that now they may be falling off that plateau.
At any rate, the OPEC cut and increase to earler production levels, have given us a false sense of security. The real increases, and the only increases have been for Russia, Angola and Azerbaijan. Now only Angola seems to have any steam left and they don't have much. Actually Azerbaijan may still increase a bit but Russia is clearly in decline.
We are currently in the last stages of the peak plateau. Well, in my opinion anyway.
Ron Patterson
Here's hoping you're wrong. I just got a cold feeling in the pit of my stomach when I read that.
I see plateau continuing due to big demand destruction. There's a good bit of recognition on TOD of US economic vulnerability but IMHO other places, particularly China, are ready for a fall.
I don't think you'd particularly want demand destruction, being a Dad and all.
At least to me, this is what demand destruction means.
This point about them dropping production is the key thing for the general public to understand. That OPEC's production is only now what it was a 18 months ago exposes the lie of OPEC doing us such grand favors by "increasing" production. They aren't. They are resuming production.
This tells the general public one of two things are true: the prices we are experiencing are OPEC-manufactured or are beyond OPEC's control, i.e. the drop was not intentional. Either case gets you to the same place: if OPEC can't control the market, it is due to one thing and one thing only: they no longer have the production capacity to do so.
That is peak, pure and simple. With some tiny room for error here and there, as goes the KSA, so goes the world.
The general public "getting" this one simple point would be a tipping point.
Cheers
Pssst! Jonesing for some 1st class doomer porn? ;-)
Wanna see full frontal peak-oil induced financial devastation?
[...along with more evidence that we are cutting back on the gas-guzzling....]
Here are the charts for the major independent oil refiners in the US. Maybe time to start a refiner death watch.
I never understood the enthusiasm for refining stocks. Anybody with a hlaf a lick of peak oil sense knows that refiniries will be shuttered as supply drops. 16mm bbl/day capacity chasing 14mm bbl/day in supply? Sounds like a recipe for disaster, as every non-integrated refiner struggles to keep running. These guys have not seen the bottom yet, and won't unless/until the integrated majors buy them for a fraction of the value of their assets.
RE: 16 mmbbl/day capacity chasing 14mmbbl/day supply:
Yesterday I was researching something, and of course I had forgotten "the good old days" of 2004. Of course, the cornucopians were waiting for the bubble to burst, with all of the reasons it was a bubble, the same ones as we see today, but most importantly, the refinery capacity running 110%.
Thanks for the graphs. These go very well with my post (last week) Why Isn't the Price of Gasoline Higher ?.
The reason the price isn't higher is because the independent refineries are losing their shirts selling gasoline. So are the independent gasoline stations, sometimes owned by the same companies as own the independent refineries. The majors, with consolidated operations, are able to report reasonable profits when they consolidate the loss on refinery and gas station operations in with their other operations, because they have a lot of oil that they are pumping for $50 a barrel, but selling to themselves at $130 barrel.
I have seen analysts suggest that the majors will purchase some of the independents, and this will all end well. I can see them picking up a refinery or two, as it suits their needs, but I suspect that there is enough refinery overcapacity (especially in the simple refineries) that by and large this won't happen. I would like to hear other people's thoughts on this.
US Refinery Utilization has been declining since 2005
I would expect the same problem around the world, with the stock values of companies holding independent refineries plunging around the world. If the situation gets worse, I would expect some governments to step in if they can, but I am not sure that they are that aware, or have the extra money to bail the operations out.
It seems like this could end badly, with too many refineries closing, relative to what are needed. Am I missing something? Are there natural limits to this, that bring crack spreads back up?
Yes. The refiners compete with one another. If a refiner closes, that means that the guys who survive get a better price.
Low crack spreads mean one thing: there is too much gasoline in the world.....as far as the refiners are concerned.
EDIT: That should more accurately read: too much gasoline in the US. Some refiners in Japan have been able to cope with falling domestic demand by becoming exporters.
I don't have the facts, but my suspicion is that US refiners are not easily positioned to follow that strategy. Distance from potential markets being one factor.
So this new refinery in South Dakota. First one in years, etc..
Is it being setup to handle 100% heavy/sour oil? Or is it doomed before it ever opens.
I think it's supposed to refine Canadian crude. Tar sands.
There's another tar sand expansion proposed for Marathon's Superior, WI plant. And the famed Indiana BP plant that would have used Lake Michigan to dilute their excretions was also to be designed for tar sand oil. The Enbridge pipeline expansion across WI to IL/IN was just completed. The ducks are in a row for Canadian sands to grow as a source of Hummer food, but sadly almost no one in the US is aware of the downsides of tar sand production.
I think they're aware, but don't care.
The Dakotas are at the end of the pipeline. They had actual shortages last year, including during harvest, when the farm equipment needed a lot of diesel. I'm not surprised they want their own refinery. It's our own little domestic exportland.
I understand that there are different kinds of refineries. Some are very simple, and comparatively cheap to build. Those are the ones we built many years ago, and I think, are the ones in oversupply.
There are also refineries with "crackers" and "cokers" that handle heavy crude, and special equipment for handling sour crude. I believe those refineries are in short supply, at least in certain locations.
The actual situation may be a little more complicated than this.
I caught this on CNN yesterday.
Hyperion
Seems to be predicated on a non existant pipeline from Canada.
Does not seem to be likely.
Pete
Seems like a refinery is too valuable a 'piece' of equipment to allow to remain idle. Likely, I think, the bigger guys will swallow up the smaller ones and continue running the same refineries under a different name. In this case I can see the relatively low gasoline prices continuing as long as the big oil companies are willing to make most/all of their profits on the crude and keep refinery margins low to nonexistent.
I don't see a lot of the majors purchasing many refineries. They just got through selling them to the independants. They saw this coming some time ago, Amoco alone closed one, Casper, and sold 3 others, Salt Lake, Mandan and Yorktown.
Casper was closed about 1994. The others were sold by about 2003 after the BP takeover. Amoco had been entertaining offers before however.
They were downsizing overall in-house ref. capacity and increasing economies of scale by only keeping the big ones. It was during this time frame that Valero and a couple others became decent forces in the refining end of the business, by buying the castoffs of the big boys, a questionable strategy at best. They should have been asking themselves why the big boys were divesting themselves of these assets.
I do expect some attrition in refining soon. I don't really think it will happen faster than demand destruction though. I can only chuckle when I hear of new refineries here in the states, lol.
There is new capacity going in at some of the existing big ones now. Those that don't have heavy crude capability are furiously adding that capability as fast as they can, increasing overall capacity incrementally along the way for the most part.
The ref % rate last year in May was most telling on the whole situation. Huge surge in price as % dribbles away. Tried pointing it out but was more or less ignored. WT seemed to really start paying attention to it later in the summer though. I still think it is one of the most important datums that we can see.
Excellent chart Gail, thank you very much!
It might be very informative to look at some annual reports for explanations as to loss of profitability in a market where product prices are rising. There also look to be some short-selling candidates here too. I'm sure longterm stockholders are perplexed and want answers too.
On this subject, here's a news article from May:
Japan begins talks to expand gasoline exports to US
If oil prices remain where they are, none of that makes any sense. The US has surplus refining capacity and is making too much gasoline.
It's one of those paradigm shifts that will take a while to sink in because for so long many of the politicos have avoided the reality of peak oil by asking for more refineries.
The real issue on the surplus gasoline is the surplus gasoline from around the world, not the US. Everyone wants diesel. The refineries nearly always end up with some gasoline at the same time. The reason prices in the US have managed to stay lower for gasoline is that other folks have been willing to ship the US their excess gasoline. The amount of gasoline has held up better than any other product in Jan to April, according to EIA data. Because of the relatively better supply, gasoline prices haven't risen as much as diesel or jet fuel.
I can't make that theory work with the data.
Here's a link to the weekly imports/exports data:
http://tonto.eia.doe.gov/dnav/pet/pet_move_wkly_dc_NUS-Z00_mbblpd_w.htm
Take a look at the figures for Total Gasoline Imports (column G)
Average for 2008 so far: 1,071,000 barrels per day.
For similar period in 2007: 1,125,000 barrels per day.
So gasoline imports are 5% less than last year.
In addition, gasoline inventories are higher.
Everything points to a domestic surplus:
(1) Lower domestic consumption.
(2) Lower imports from abroad.
(3) Greater domestic inventories.
(4) Lower domestic refinery utilization.
First post after a long lurker. Things here in Kuala Lumpur are looking bleak although the rank and file hardly notice. Great provocative site - I'm a rotating equipment engineer for mainly offshore projects. Things are hot as you can imagine - how long will it last? Oil is definitely on the way out, but still a lot of gas and LNG is a big business. A lot of the gas projects I'm looking at are 30 - 40% CO2 out of 250 - 500 mmscfd. All of the CO2 that is captured by the membranes is cold vented - so much for Al Gore. Carbon credits? Who is going to spend $500+ million for a CO2 reinjection platform? Plus, just where is the reservoir to inject? Pretty depressing really. I'll try to keep you posted on the SE Asian scene. --klcard
CO2 venting ... OMG
From wikipedia on Natural Gas:
Component Typical wt. %
Methane (CH4) 70-90
Ethane (C2H6) 5-15
Propane (C3H8) and Butane (C4H10) < 5
CO2, N2, H2S, etc. balance
Is wiki inaccurate, generally speaking, on this one?
It can vary literally all over the map.
Some underground gas reservoirs are almost entirely C02 obviously we don't generally pump those.
Think about volcanic gases for example C02/H2S etc.
On the opposite end you have wet gas reserves which have a lot of liquids all the way to gas dissolved into oil.
What Wiki is talking about is the average value of the reserves we like to exploit not exactly the same as the average of whats under the ground if you drill a random hole.
Denbury Resources used C02 from a reservoir above a buried extinct volcano to get oil out of depleted oil fields in Mississippi and Louisiana. Their engineers were able to go into an aged oil field after primary immiscible C02 flood to do secondary CO2 flood to get oil from the rock pores that was left behind from a previous CO2 flood. CO2 flood was a tertiary recovery process after the secondary recovery by water flood. Permian Basin fields have yielded more after tertiary recovery than would have been otherwise possible. The CO2 was piped from the Rockies to the sandhills near Midland/Odessa, Texas.
http://www.denbury.com/
The Chinese were using polymer flood technology to get more oil out of Daqing.
The word for carbon dioxide flood is miscible flood. I apologize. Was more than a year ago when I studied the Denbury literature.
co2 flooding is miscible if it is conducted at a high enough pressure for the co2 to be miscible with the oil. minimum miscibility pressure or mmp is mainly a function of the temperature of the reservoir and the composition of the oil.
miscibility is not something that can be determined directly, it is determined in the laboratory by observing the recovery from a core flood as a function of pressure. recovery is much greater above mmp.
in some cases, even after years of waterflooding, the reservoir pressure is not above miscibility pressure. in which case injection, or more specifically net injection(injection minus production), has to be increased to raise the pressure above mmp.
The distinction may be between natural gas in the pipeline and natural gas as it comes from the ground. I'm sure each field has its own composition, but what gets delivered to customers strives for a consistent product.
You have to bring your NG from your field inline with the calorific value that burners where designed for.
Some people from England probably remember the move from town gas to NG. You had to change all the burner heads.
In general you have to clean up the NG coming out of a field. It would be interesting to see if NG wells today require more clean up then in the past. I suspect that there has been a steady degradation in the quality of NG fields being produced.
I bet 30 years ago you would not have produced a field that was 50% CO2.
And membrane gas separation is not exactly cheap either financially or energy wise.
http://www.airproducts.com/Products/Equipment/PRISMMembranes/page06.htm
And you also have solvent stripping.
"Pipeline Quality" or merchantable natural gas is less than 5% inerts, usually imposed by gatherers at a lower level, and increasingly, producers better keep it in line, otherwise get penalized for cost of purging the line and refilling it with "marketable gas." Or, at least get threatened with that possibility.
exxon has been producing the labarge fiels in wyo since about 1985. not 30 years ago, but 23. the labarge field averages about 17% methane, the rest is co2 and h2s.
when the price of sulphur was high, i believe they were getting more for the sulphur than the ng. at some point, they gave up on sulphur production because of the low price of sulphur. they began reinjecting the h2s. i dont know the status of that operation at present.
the co2 is separated and used for eor. first rangely field in colorado, later lost soilder, wertz and salt creek in wyoming. other smaller nearby fields are in the plans. bell creek in montana is also in the plans as well as some smaller fields along the proposed pipeline route.
chevron has some similar projects worldwide.
Hello Elwoodelmore,
Thxs for this info. If they can get the extracted sulfur transported to markets cheap: they would be damn foolish to not be selling every possible sulfur ton [5-page PDF Warning]:
http://minerals.usgs.gov/minerals/pubs/commodity/sulfur/mis-200804-sulfu...
-----------------------
SULFUR IN APRIL 2008
Reported prices continued to increase through April as supplies remained tight globally. The average customs value, however, of elemental sulfur imported into the United States in April 2008 decreased to $198 per ton. This was 10% lower than that of March 2008, but 10 times what it was in April 2007.
----------------------------
Compare to one month earlier:
http://minerals.usgs.gov/minerals/pubs/commodity/sulfur/mis-200803-sulfu...
------------------
SULFUR IN MARCH 2008
Prices continued to increase through March as supplies
remained tight globally. The average customs value of elemental
sulfur imported into the United States in March 2008 was $221
per ton, 15 times what it was 1 year earlier. The March 2008
average customs value was about 80% higher than it was in
February.
----------------------
The volativity in the sulfur and sulfuric acid markets must drive the purchasing agents worldwide absolutely nuts!
EDIT: that volativity probably helps explains why paywalled sulfur forecasts published by Pentasul, and other outfits, cost such BigBuck$$.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
i think they stopped processing h2s because the price was low at the time and they were faced with the cost of upgrading the h2s process equipment. i think there is an spe paper about this from about 2000. but i don't know the current status.
Well I'm not a process engineer, but I can tell you deal is that you can push a carbon steel pipeline (with anodes) not much above 20% CO2. The deal is that you cut your 30-50% (yes up to 50%) CO2 down to 20% with membranes and then you're good to go for export after glycol dewatering.
The permeate gas - which comes out at near atmospheric pressure - is simply cold vented. It would take fantastic energy, i.e. eat into your cut of export gas, to raise this up to a reinjection pressure plus no one is interested in drilling for a suitable 'basin' for this gas. I've had a look at a few reinjection concepts - so far they die in the water when you mention numbers like 40-60 MW of compression required (this is big number offshore).
Amine CO2 stripping is used onshore to handle the 20% levels to whatever needed afterwards. I don't know what they do with this CO2 - however I'm sure it is not for making tonic water. I've been told that big amine units are not suited for offshore installation with high CO2% and big flowrates. Aside from large towers, complex pumping and so on amine is not very efficient with high CO2 levels.
The current consensus seems to be if you've got 500 mmscfd of sour gas - membrane clean it and export about 275-300, vent the nasty low pressure CO2 and like I said before - who is this Al Gore?
i dont have 1st hand knowledge of exxon's plant, but it is my understanding that the co2 is separated cryogenically. the gas is compressed to a high pressure, expanded through a choke, which cools the gas stream to cryogenic temperatures and the various components are separated as liquids, sort of like refining in reverse.
the methods you describe are probably only economical for low concentrations of acid gases.
Some field in UAE has 25% H2S, yes 250,000 ppm.
According to EIA Malaysia's on track to import
oil in 2009.
http://www.eia.doe.gov/emeu/cabs/Malaysia/Full.html
Malaysia’s new oil production projects include the Kikeh block, the country’s first deepwater oil and natural gas discovery. Field operator Murphy Oil expects initial production of 40,000 bbl/d in January 2008, ramping up to 120,000 bbl/d later in the year.
Is this still on track?
James
Kikeh is good to go, and the next big one is Gumusut Kakap at 150,000 bopd. But the reservoir profile for G-K drops to about 75,000 after 6 years and the then long slow burn to nothing. Of course water injecting like crazy. Some idea of future recovery of the associated gas which is being reinjected at 300 bar to rates up to 300 mmscfd. Tapis crude off the west coast of the peninsula is just about tapped out...nothing really left there except the sour gas aforementioned. The deepwater oil fields off NE Borneo, e.g. Kikeh and Gumusut are the play now.
Thank you very much for the reply.
"The deepwater oil fields off NE Borneo, e.g. Kikeh and Gumusut are the play now."
Does this area correlate with the Spratley Islands?
Hmm... I get ~40 kt a day of CO2 from these figures. Or 0.108 kg cu ft^-1.
Scaled up by 2004 Malaysian production, that comes to 216 Mt. That's about 1% of present emissions emitted by one type of industry by one country. So much for Al Gore indeed.
I don't have all the numbers...but note that not all of the fields are sour. But the shallow producing ones are...
I would estimate, pretty roughly, that the amount of CO2 being vented (or will be shortly) in this region is about 250-350 mmscfd. Added to this is the even worse greenhouse gas - C3+ that passes through the membranes - maybe 5-7% of the permeate?
This may or may not go much higher - depends on a lot of factors I suppose. The power plants in Japan depend on gas production/LNG from these fields. Personally I find it horrible - I would love to be the compressor engineer to design the first big offshore CO2 reinjection unit - with more to follow...
VIDEO: Electric car shootout in London
I felt weird watching this. There is actually a market in the developed world where you have a choice of buying three or leasing one battery electric car and no, the Tesla Roadster is not one of them. In fact all of the cars in this roundup cost less than 30k sterling. A lot of people wouldn't want to be seen in at least one of them but hey, it's a start.
As for their comment about wishing some of the more exiting options would be "put into production", Tesla is on target to deliver 4 units a week through the summer and hopes to ramp up to 25 a week by years end
Here's hoping for more non FF transportation options
Alan from the islands
This is an update to our post
Bumpy Crude Oil Plateau in the Rear View Mirror
http://www.theoildrum.com/node/3793
or
http://sydneypeakoil.com/matt/Crude_Oil_In_Rear_Mirror.pdf
The Russian crude oil peak is clearly visible now.
This is a graph made from data from the new International Petroleum Monthly from the EIA, that I mentioned above.
Thanks for the update. On a related note:
Russia says Czech oil supply cut "not political"
Sure, supplying the domestic market first is not a political decision :)
How about geological cut? If you can't pump it, you can't export it - esp. when domestic demand is rising and favoritism comes into play.
Hi Samu,
How do you think things are going in Finland? I do believe my dear home country is completely reliant on Russia for oil and gas, so I would just like to know what your views are. You can also write to me privately and not waste any bandwidth here :)
Take care,
Jussi
Hi
also from Finland too...
today read a few things: fishermen are having trouble with the diesel prices; reindeer herders also (IIRC they need to drive after the herds about 10,000 km/year with snowmobiles etc, so it's getting expensive). Also at some areas the road maintenance for smaller roads is suffering due to asphalt prices rising about 10% instead of expected 5% or so.
Best,
Seppo
Finland, Finland, Finland...
Moro.
Well, we aren't just dependent on Russian gas but lately we've had trouble with Russia imposing higher timber duties and the pulp&paper industry having trouble getting enough raw material. Further more Russian trade is not helped by the over constant 50km queue of trucks at the border. Yet we are ever more dependent on our comrade friends, with various Finnish industries relocating their production first to the Baltic countries and now overtly to the Russian side.
As for PO resilience, we haven't done anything and aren't about to do anything. Our food production is very oil intensive both at the plow head and in food miles. In a crisis would only be able to cover 80% of the country's needs. All the other industries too are geared to work with centralized warehousing or truck based JOT madness. The truck drivers are complaining about high oil prices but at the same time there are more and more miles of cargo to drive around each year.
The ethanol debate has been buried somewhere. Only a year ago we were about to leap ahead with ethanol production with Neste making large investments and prominent ministers advocating more independents to invest in production facilities. Now all independents are packing it in and the prime minister is talking about 'food production strategy' for Finland. How about that for a change of direction. First you want to burn all your food for energy, then suddenly its worth people's lives and nation's future.
I haven't really got a clear picture yet where Finland is in the PO world but I can guess its somewhere at the bottom, with no resources, and with these dependencies. However I trust our sisu and our traditions and experience from the wars. At least Finnish people are used to their summer cottage lives, with no electricity, water from the well and dry toilets. That maybe our future.
A small red cottage and a potato patch...
I'm curious as to what the climatologists make of this. Urbansurvival has picked it up and with the recent earthquakes, its starting to look like a trend. Any ideas on what's happening up there?
Also in the US: http://hvo.wr.usgs.gov/kilauea/update/images.html Kilauea is very active with lava fountains spewing forth. Couple this with bizare earthquakes in ocean off of Oregon http://www.sciencedaily.com/releases/2008/04/080413184801.htm
What was it that Edgar Cayce said about the Western US submerging some day?....
You might want to take a look at how long go that Arctic ocean blow happened...
Read carefully, Grasshopper.
As for what an environmentalist might think, well, I think that water probably got a little warmer right around there. It might have helped with the melt that occurred from the bottom, but probably wasn't much more than a minor positive feedback given it happened 6 and 8 years before the Twin Big Melts of '05 and '07.
Cheers
Was wondering if anyone had firsthand experience with the area since alot of climatologists have been going up that way. 8 years is a drop in the bucket time wise for this type of thing.
Halfpasthuman/urbansurvival/peoplepnemonics keep talking about an earthquake in the western US later this year so I was wondering if there was more to it than just lingustic patterns. Might be time to buy some worthless realestate in Arizona :-). Also makes me very glad I don't live in Cali and that the Rockies are between here and there.
"I got some ocean front property in Arizooona." George Strait.
The idea that California can drop in the ocean is an urban legend, basically. It can't. It is moving northward very slowly and in millions of years will be an island off the Northwest. (Even that is stretching reality. It's really just the costal strip west of the I5.) Might be a pretty nice place to live by then. Got a time capsule?
BTW, who is talking about an earthquake later this year? Link? That sort of predictive ability isn't very plausible just yet, though I've seen some astonishing predictions before.
Cheers
BTW, who is talking about an earthquake later this year? Link?
http://www.urbansurvival.com/week.htm
Dig in his archives.
Electric Lotus Elise.
Electric Lotus
Video is in German and I couldn't see any numbers. Could anyone here translate the video?
Funny thing is in '97 Lotus developed an electric elise with zytec and said it would enter production if there was sufficient demand.
Kafka
The Video is in Dutch, not German.
Of what relevance is an electric race car? There is a reason that so many electric cars are focused on performance vehicles - it is easier to hide the inherent high cost, lack of room, etc. Sure, electric race cars will give people a false sense that EVs are an available and practical substitute to petroleum powered vehicles, but that won't make it any more real.
Electric race cars are of the same relevance as fuel-burning race cars.
It is a proving ground for performance characteristics and new technology innovations. If an electric can beat an IC car on any given circuit that is a big deal. The improvements made there can then be scaled down to more practical vehicles for the street.
For me the relevance is that the Lotus is already light weight. I'd say that makes it a pretty good contender for a conversion car.
As some posters like making comments about 'liberals', 'conservatives' or my favs - "free market" or "capitalism" I offer up: USA: A dishonest, spineless socialist state
http://blogs.ft.com/maverecon/2008/07/time-for-comrade-paulson-the-pull-...
Good article, but I thought he took pains to avoid the actual label-Fascism.
Ahhh, but any of these short hand labels allow for reframing. Better to look at the long horror of it all, with as few labels as possible.
I read it earlier this morning. What does America have to do to get a financial press as relatively honest as Britain has? Is there just something in the water that makes British right-wingers fib less than their American counterparts, or is it that America's capitalist culture was built on seductive salesmanship, while Britain's earlier capitalism was based on the blunt fact that people needed textiles and coal?
It is cultural. Why does the typical Japanese CEO appear to have 100X the integrity of the typical American CEO? Different culture.
Hardly
http://www.time.com/time/world/article/0,8599,1151722,00.html
The grass is always greener on the other side of the
fenceocean. The USA has no monopoly on corruption, there's plenty to go around. But American academia does seem to have a special problem with its own psychopathology. So our academics wallow in dysfunctional political correctness and continually play "The idiot who praises with enthusiastic tone / Every century but this and every country but his own." (The Mikado, Gilbert & Sullivan.) To hear them talk, you'd think the USA controlled the fall of every sparrow anywhere across the globe.How many times do we have to hear 'we are in favor of a strong dollar'? I was sick of that mantra, coming from Paulson and Bush year after year.
Paulson stopped using the above rediculous statement because lately he has been telling us that the 'financial institutions are adequately capitalized'. Every time Paulson, or the institution's CEO, makes the claim that they are adequately capitalized withing a few days they are issuing new stock, begging soverign wealth funds, or running to the Feds abc credit windows for a new infusion of capital. That is, if they do not collapse first. Indymac collapsed Friday and the FDIC rushed in and burned an estimated 10% of their reserves paying off people standing in line to withdraw money. Many more are on death watch.
I watched Jim Rodgers being interviewed on Bloomberg tv this morning. I have never seen the guy so pissed off. He wants the high level staff at both Fannie and Freddie held in jail without bond untill they can face charges in court for fraud and 'scamming the public'. I'm with you Jim.
The ongoing saga of Fannie and Freddie seems to produce new headlines each hour. The latest (that I heard) is that, among other actions, Treasury and/or the Fed is going to purchase equities from F&F. Our government is going to buy stock in two private corporations. Do any out there think this sounds like a free market? I mean this is way over the top. Having and using a plunge protection team is bad enough but this is...well, it is the end of what was left of a free market. The veil has fallen, I don't think that anything that happens going forward will surprise me. If you happen to be the CEO of a large financial institution and the shorts are killing your stock prices, just call Paulson or Bernanke...They will be happy to buy your stock and screw the shorts. BTW, I heard that Bernanke has installed one of those 'take a number' devices at the discount windows.
and from Mish...
'In the course of a few days we have seen Paulson go from saying Financial Institutions Must Be Allowed To Fail to requesting Congressional "authority to buy unlimited stakes in and lend to the companies".
Paulson now seems to be acting on the principle that as long as one is telling lies there is no additional harm in doing it with gusto. Otherwise it is very hard to explain how an "unlimited lending line"can possibly have "terms and conditions necessary to protect the taxpayer".
There is one other possibility. Perhaps as Paulson crossed the Rubicon he landed in the 5th dimension. In some alternate universe, his statements just might make sense.'
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com/
River,
I caught Jim Rodger's on Bloomberg this morning as well. The guy is dead on. What's going on is a travesty.
The American form of Capitalism has been transformed into a large Ponzi scheme. The investment banks, the GSE's, the student loan mortgage originators, all are engaging in exactly the same type of behavior. They generate fees (ie profits) by selling debt based securities with no long term viability. Eventually the investing public realizes these securities are all but worthless, and stops purchasing them. At this point the company goes bankrupt, with upper management executing their golden parachutes. It's disgusting.
I read this morning that the FDIC is covering 50% of all non FDIC insured deposits. WTF?!?! Who authorized that?
When you disallow failure, you no longer have capitalism. It is only the risk of failure that keeps companies honest, which keeps capital safe.
Ugh.
Not a pretty Monday for Capitalism.
Garth
Absolutely. Capitalism, when it works, is an evolutionary system, by which I mean that it requires non-survival of the unfit. Poorly run enterprises need to fail, or be bought out by their more successful competitors, or be split up by corporate raiders, to extract what value remains in their operations.
Once you have some enterprise which is "too big or important to be allowed to fail" you have an enterprise which is too big or important to remain in the private sector. One solution, of course, it anti-trust operations to split those huge enterprises into smaller ones that can compete with one another (i.e. fail individually without threatening the system).
Unfortunately, in this country we wait until the enterprise has failed, THEN rescue it. So, as mentioned above, the profits have already been sucked up by the private sector (mostly by the wealthy who then complain that their taxes are too high), and the smoking ruins are finally propped up by the taxpayer.
I disagree. These aren't poorly run companies-this is widespread fraud-Jeff Skilling should sue for unequal prosecution of the law http://www.bloomberg.com/apps/news?pid=20601109&sid=a1liVM3tG3aI&refer=home
IMO, the capital to run these companies is too cheap, and given out with out enough oversight. Why? Because every payday billions of dollars are poured into the stock market by average people who wouldn't know a healthy company from a ponzi scheme.
The idea that everybody in America is going to retire on their investments in the stock market is asinine. 98% of the general population has no business investing their $$$ in the stock market. They are cows being led to the slaughter by greedy investment bankers and other wall street mercenaries who are all skimming a larger and larger percentage off the top.
Something has to give...
The idea that capitalism is in any way a meritocratic operation seems to me to run up against the simple fact of inequality: He who has the gold makes the rules.
Now no past system of inequality has failed to develop a durable ruling class. No past ruling class has allowed itself to be judged by empirical standards. When old systems collapsed, a free-for-all developed, which is meritocratic if you think trial by combat is meritocratic. Meritocracy meant something else in the sordid rise of British capitalism, when you made a fortune running a satanic mill and then bought up members of Parliament to pass the Enclosure Acts to grab farmland cheap and diversify your portfolio. Meritocracy meant something else again in the Reagan era, complete with lobbyists and the Keating Five.
In each case, you do one thing to get on top, and a different thing to stay there, but you make sure to close the hatchway behind you. So wealth polarization and class stratification will continue until a property system either collapses or is overthrown. I consider 1861 to be the overthrow of America's first ruling elite, the slaveowners, and 1932 to be the overthrow of its 2nd ruling elite, the robber barons. Anything less cataclysmic (less political) than those events is not significant.
I think the mistake the US made was not to restrict the size (or longevity) of corporations. There seems to be a natural evolution of businesses to ever larger sizes. Eventually, the corporation acquires enough money and influence that it is able to distort the markets in its favor. Why compete when you can get the government to give you no-bid contracts, or when you can get the government to write laws in your favor?
Although it isn't my specialty, my understanding of early US history is that corporations were very different then, basically temporary entities designed for a specific purpose such as building the Erie Canal. They gradually morphed over time into ever larger entities. Then we had several absurd Supreme Court rulings asserting that corporations had the same rights as people.
Things might have turned out differently if corporations were never allowed to grow and never granted "rights" beyond the rights of the people who make up the corporation. Then again, maybe not. Money is power, and you can't trust people not to use it to accumulate ever more power.
The thing is, for anything that can't just be bought in a store - i.e., all of the unique things that only a government would buy, like armaments or public works - it would make good sense for the government to just produce the item itself. You are pretty much just talking about one buyer (monopsony) and just one or a very few sellers (monopoly), so there is absolutely nothing "efficient" about that arrangement even under the most extreme libertarian free market ideology. You might as well have the government making the stuff themselves, cut out the profiteering, and at least save the taxpayers a few dollars. We would have gained the advantage of turning off the huge pork barrel/lobbying trough that has so distorted and corrupted our political system.
Socialism? Yeah, I guess. But what's so much better about what we have now?
"...it would make good sense for the government to just produce the item itself..."
Yes and no. A lot of what the government wants, it wants erratically or episodically. There's little continuity with pandering politicians coming and going every two years. So they'd staff up one year, and then pay those employees to do nothing for the next ten, since it's politically difficult to lay off government employees regularly or repeatedly. The payroll would be so massively overpadded that you'd never see a dime of your Big Savings. And the lobbying and pork barrel would simply shift over to people doing everything possible, legal or illegal, to get their friends and relatives into nice lucrative sinecures. IOW it would be exactly as in any bog-standard impoverished country you care to name.
The corruption game cannot be won except by "eternal vigilance", and amid the nice cozy comforts of a modern consumer society, hardly anyone wants to bother about stuff like that. If you simply give Joe and Jane Sixpack a small "stimulus check", they'll be delighted to snooze in their beery stupor while you loot billions, and they'll vote for you forever because you were so kind to people like them.
You make a good point, except that contracting to the private sector fails to avoid these problems. You end up with arms manufacturers lobbying for the procurement of new weapons systems that represent little real improvement and are not really needed, just in order to stay up and running. It is even more of a problem, because if you eliminate government jobs you are a hero to the taxpayer, while if you eliminate private sector jobs you are evil.
One way to minimize this problem with government programs is to have a constitutional sunset mandate for all government programs. They all automatically expire after X years, and their continuance requires new legislation. I'd even require a supermajority for their continuance; if they are that worthwhile, then their value should be evident to more than 51%.
That "mistake" may have pre-dated the formation of the US. I was reading Buckminster Fuller's "Critical Path" and he mentions how some companies did much of the behind-the-scenes work for governments like the East Indian Tea Company did for England. He even goes as far to say that even though England lost the Revolutionary War on the ground, they may have won it later through banking and financial relationships.
Interesting reading. Especially the bit below...
http://en.wikipedia.org/wiki/British_East_India_Company
What we have now is "crony capitalism", governed by a kleptocracy. Other places that had similar systems used to be called "banana republics", and I'm not talking about clothing stores.
These are the guys (and basically guys just like them) that are supposed to lead the USA through the post peak period? Seriously? I think you are struggling with the realization that they don't give a crap. Hank Paulson has got 750 million dollars-the problems of the USA are not his problems, they are your problems. On the slide in the USA, everybody is on their own (with the notable exception of the superrich who show exceptional unity).
River,
It looks like maybe China and some of the OPEC countries are finally refusing to buy some of this structured debt coming out of the United States...
http://www.nytimes.com/2008/07/14/washington/14guarantee.html
That leaves the U.S. Government as the lender of last resort. The rub is that the U.S. Government doesn't have any money either. It also must borrow the money.
If the U.S. Government continues down this path, how long do you believe it will be before China and the OPEC countries draw the line on U.S. Government sponsored debt too?
Down South...I have been out riding today. Just saw your post and I read the article at your link.
First, the azz hat that wrote this says: 'To those prone to blame lax regulation, the mortgage fiasco was the inevitable result of a quarter-century in which American policy makers prayed at the altar of market fundamentalism, letting entrepreneurs succeed or fail on their own.'
What market fundamentalism? The Fed has not allowed markets to function without meddeling with interest rates and they have shown on numerous occasions that they have no idea what interest rates should be set at.
Then the moron says: 'This was the spirit in which Alan Greenspan, the longtime chairman of the Federal Reserve, allowed banks to engineer unfathomably complicated webs of mortgage-based investments that, through the first half of this decade, sent real estate prices soaring and expanded homeownership.'
This is simply a bs attempt to get Greenspan and the other morons that have been asleep at the regulatory wheel off the hook for the train wreck that is in progress...and, make it sound that they have been carrying out their regulatory oversight diligently. Baloney!
Then there is this bit of drivel: 'As some called for intervention by the Fed to cool a speculative binge, Mr. Greenspan resisted. He believed the risks of real estate were effectively limited because debt was widely dispersed. The market would sort it all out.
“Alan Greenspan had this view that the light hand of regulation was best,” said Vincent R. Reinhart, a former Federal Reserve economist and now a scholar at the American Enterprise Institute.'
Greenspan resisted and said 'the market would sort it all out'...No mention of the fact that Greenspan resisted by keeping the interest rate way too low for way too long...Setting interest rates rediculously in a bubble is a 'light hand'..and Reinhart is a scolar at AEI? No one works for AEI unless they are a neo con, a Zionist, or both. These characters at AEI will be busier than a cat kicking sand on scat for many years to come. These are the revisionist historians that I warned of in earlier posts. But lets not digress...
Back to the article: 'When housing prices commenced plummeting, the ugly truth emerged that many banks did not understand the details of the mortgage-backed investments they owned. Ignorance proved expensive.'
Right! The poor bankers had been sold a pig in a poke. They didn't know what they were buying. Then they should not be bankers! This azz hat scribbler is saying that the bankers were incompetent. How did this moron get a job writing for the NY Times? It gets better...
'A general fear of debt took hold. Banks that had offered loans to students under a federally guaranteed program suddenly could not sell investments linked to those outstanding debts, meaning they could not raise cash for the next crop of loans. Dozens of banks pulled out of the program.'
I could sum up that ramble with one sentence: The Ponzi scheme collapsed.
Back to Fannie and Freddie: 'They swelled into highly leveraged behemoths, it was said, on the implicit guarantee that the government would step in and rescue them if they ever got into trouble. This allowed them to borrow money more cheaply than their competitors could, enabling them to make loans more cheaply.
That secured more business and rewarded their shareholders, along with their handsomely compensated executives. It emboldened them to trade in highly risky investments.'
Mish said their gearing, depending on the date, varies from 60 to 200:1. That is some very highly leveraged hot potatos. Without an implicit government backing they would not have gone out on that limb, that far. If they had done so, they would already have gone tits up. The regional banks that have been failing are geared waaaay below those levels.
Here is where I really have a problem: 'The government was getting something for its protective largess. It was using Fannie and Freddie to pursue the social goal of broader homeownership, particularly among racial minorities.'
Why does the government think it should be promoting home ownership? A house adds nothing to the GDP, as plant and equipment and tons of other things would. So the government set itself up in the biz of misallocating funds. Why? I will tell you why, so the scammers could make a killing on this whole phony racket and when it collapsed they can hand the taxpayers the bill. We are screwed.
and the sniveling ends with: 'Yet here, in the aftermath of a financial crisis brought on by what were once called American virtues — financial engineering and risk management — Washington may bail out Fannie and Freddie for the simple reason that they are too big to fail. If they go down, so do whole neighborhoods. So, perhaps, does the global financial system.
“The thing we have to do now is to make sure that Fannie and Freddie remain solvent and continue to make loans,” Mr. Baily said. “We just don’t have any choice.”...
The Times lists this as 'New Analysis'...I call it total bs.
Imo. F&F should be allowed to fall flat. That is the only way this country will remain solvent down the road. Without threat of failure there is no capitalisim. With a Fed chief and Treasury Sec that are joined at the hip to Wall St there is no free market. Let the stock holders of F&F eat it, and especially let the bond holders eat it. While we are at it lets get rid of the Fed and get the government out of the mortgage biz and the student loan biz. I went to college working a full time job to pay my way. I never had a student loan. The GI Bill helped because I spent four years in the navy but it didn't come close to paying for my college tuition, books and living expenses. If I can do it, anyone that wants to can.
As old maps had written on unexplored areas: 'Beyond here lie dragons'...China is a dragon. I think the end could come far more quickly than most imagine. The people inside the DC beltway and on Wall St are not in touch with the real world. I worked in DC many years. It was a nut house back in the 60s-70s, I cannot imagine what it is like now. The people in DC now are a pack of thieves that will stop at nothing to make all the money they can as fast as they can. I see no hope that anything will get better. This bunch makes the crowd that was in DC when I was there look like girl scouts.
When I was a kid, Sunday afternoons were great for a Monopoly Game with my little brother and sister. I'd always beat the socks off both of them, but that was because I was always the Banker, and because I was the Banker, I gave myself lots of extra money from the bank. $400 for "going around go" to me, $200 to my little brother, and $100 to my sister. They couldn't count yet. So, after I owned all of the properties, all with hotels, and all they owned were the Railroads and the Utilities, the game was pretty much over. They were broke, I was rich. But, the game was fun, I was powerful and rich; I liked to watch the little people squirm, and so, I would loan them money to keep them in the game. I remember counting out the orange $500 bills, knowing that they would soon be mine.... all mine. Not a chance for them, but for me, it was really cool to control all of that paper money. The game always ended when the bank had no more money because I had it all. We'd go do something else.
I think the present scenario in the US/World is much like my childhood game of Monopoly. The Wall Street Players want to keep us all in the game (they're having so much fun and how else to generate Forty Million Dollar year end bonuses?), but, and this is their problem, they run the bank, so to speak, and as the bankers, they just help themselves and periodically hold us all upside down and shake us until all of the change falls out of our pockets. It's just too damn much fun and, it's just too easy. How else to explain the low interest rates of the past six years, refinancing your house for a "better rate" and, oh, by the way, why not take an extra $50K for a new pickup and some four wheelers.... and while we're at it, here's a zero interest rate program, oh sure, it'll readjust, but you're house is going up in value every year and so just refinance for a better fixed rate than you can have right now. And, your monthly payment won't be any more than what you're now paying. WOW, where do I sign? I never thought I could afford a New Ford F350 with leather seats and a four wheelers for my large wife and family. Oh, by the way, throw in a trailer besides, make the refinance for an extra $60K. Yippie, we're rich.
So, paying for a $45,000 truck over 30 years is a good deal?
Lets go back for a ways. First, IRA's, then 401's, then the dot coms and then the latest, low, low, low interest rates, and a golden goose house. If Bush had his way, Social Security would now be privatized and yowie, Katy Bar The Door. IRA's, and 401's are swell, but, and this is a big but, insiders know the game. Outsiders don't. Joe Sixpack, typically has no idea where his IRA/401 money goes, "some fund, or something". Wall Street knows and they know, every other Friday, all this money shows up from all of the Joe Sixpacks in the whole frickin country. The consequence has been a Dow Jones that maybe ought to be at 1000 has pushed through 14,000. What goes up, goes down and I'm afraid what is left of the middle class is going to be shook real good this coming round. Dow at 900 anyone?
Find an old Sears Roebuck Catalog, from the turn of the 20th century. I've seen one published in 1908. Furniture to completely furnish a two bedroom home for $65, an 1894 Winchester, $11, a buggy, $45, and so on. My daughter lives in a house that recently appraised for just shy of $300,000. I remember it selling for $47,000 brand new, less than 30 years ago. We're flying realms above reality folks. Oh, but wait, I can watch TV on my telephone.
Best from the Fremont
Denninger is pretty steamed today.
While he's doubtless right about the fundamentals, I think he may be wrong on the timing. People aren't tired of the lies. They're still eagerly eating them up. Like Fox Mulder, they want to believe.
Huh. What explains this burning desire that I have at the moment to go bowling with Hankie Paulson's big bald head?
Seriously people...
Seriously...?
You might feel like bowling with Hank Paulson's head, but Joe and Jane Sixpack have never heard of Paulson, and they're just hunkered down slightly anesthetized by the evening's libations and hoping for their free ride to come by. Which is just as well since the vast majority of coups and revolutions simply kill a lot of innocent people only to make matters worse.
River have you listened to this yet?
Special interview:Bud Burrell
"The Greatest Crime in History"
http://www.financialsense.com/fsn/main.html
WOW! this guy is intense. He's a bit off on oil but the finance stuff is just... WOW!
Bud Burrell’s comments at about the 57th minute mark are quite revealing.
Giving up to six months for the terrifying price to be paid may be optimistic. As remarked on today's Automatic Earth (July 14th, 2008) http://theautomaticearth.blogspot.com/:
Yes, enjoy the ride. Paradoxical words on Bastile Day.
IMO, today represents a sea change in perception. The coordinated Fed & Treasury bailout has not had the usual effect. After a few minutes of knee-jerk buying, Wall Street is apparently giving the plan a big thumbs down. This is a very different reaction than with Bear. The financials are down 3.5%. The broader markets are down as well.
Has the Fed lost its mojo, or at least any shred of credibility? Could be.
I can't resist posting two appropriate cartoon links here - they were drawn for Guardian articles about Larry Elliott and Dan Atkinson's book 'The Gods that Failed'
http://www.rbooks.co.uk/product.aspx?id=1847920306
published last month.
http://www.guardian.co.uk/business/gallery/2008/jun/04/creditcrunch.bank...
http://www.guardian.co.uk/business/gallery/2008/jun/04/creditcrunch.bank...
The storyline isn't really new. Infectious Greed by Frank Partnoy published in 2003 tells much the same tale.
http://us.macmillan.com/infectiousgreed
It should be an interesting week,
BobE
A few notes from my India trip (I am originally from India but currently live in New Jersey). I had gone to visit my family who live in Chennai, a large city in Southern India.
When I last reported, all of Southern India had been wracked by fuel shortages. Most of these problems have been resolved for the moment. However, vulnerabilities in the fuel distribution system in India are now evident to everyone. Previously people used to keep their car's fuel tanks mostly empty and fill up only a few liters at a time. Now, everyone keeps fuel tanks fully topped up.
Public transit usage soared for the few days the fuel crisis lasted. Public transit was not affected very much since the bus service (run by the state of Tamil Nadu) keeps a months worth of fuel in its own storage tanks. All of the trains run on electricity.
I visit India approximately every year or so. The increase in traffic volume in the past year is astounding. In Chennai, parking has become a huge problem. City streets are narrow and there is virtually no place to park cars outside stores. Even middle class people who have cars often need to hire chauffeurs (available on a temporary basis) to get around this problem.
The road transport situation in India is, in some respects, far more diverse than in the US: Human powered and IC engine powered. Two, three and four wheeled vehicles. You can see some of the more unusual kinds of vehicles used to transport goods and passengers can be seen on my web site here: http://www.coralfringe.com/gallery/India2008
This does have an interesting consequence - for every transport job, the smallest possible vehicle that could get the work done tends to be used. On the other hand, many vehicles have badly maintained engines and I could see them belching smoke. The only way this will improve is if the price of fuel increases to the point where operators become more careful.
"On the other hand, many vehicles have badly maintained engines and I could see them belching smoke. The only way this will improve is if the price of fuel increases to the point where operators become more careful."
Unfortunately, fuel prices won't help with air quality. A small 4 stroke motorcycle pollutes more than a car with a catalytic converter. The cheapest vehicle of all, a 2 stroke motorscooter, can pollute as much as 100 cars.
My vehicle is a 50cc Yamaha scooter and I take some offense at that.
I call B.S. If you can't provide a link to your source please refrain from posting such "facts".
http://www.majorsexplored.com/engineering/articles.cfm?ID=-1541579652
http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1247506
No need to be offended, just google it.
Possible storm heading towards the Gulf of Mexico.
http://www.wunderground.com/tropical/tracking/at200894_model.html
'Get real' on climate change
Professor Sachs is author of Common Wealth: Economics for a Crowded Planet and has been referred to as the people's economist.
http://www.canberratimes.com.au/news/local/news/general/get-real-on-clim...
Re: Homeowners who use heating oil seek alternatives
I wonder how pellet supplies will fair this winter given the enormous spike in stove sales. There were chronic shortages back in '05/'06 and I imagine this year will be even more troublesome, especially within the New England market. If I'm right, there could be a good number of new stoves sitting idle because there won't be any pellets available to burn.
Cheers,
Paul
The heating method of last resort this coming winter in New England, for those who cannot afford a new stove/furnace/boiler/heatpump, and for those who bought the stove but cannot obtain the fuel, and for those who cannot come up with the cash for a fill-up of the oil tank, or still owe the oil dealer from last year, or got disconnected by the gas company, and for those who realized that it's simply cheaper (per BTU) than propane or kerosene *, is...
... (resistive) electric heat.
Assuming 1 KW average "normal" household power usage, and 4 KW when heating with electricity (that's just adding 2 small 1.5KW "space heaters"), if 1/3 of the households switch to electric heat that's a doubling of the total electrical load. In colder weather (requiring more than 2 "space heaters" per house) a doubling of demand could happen with a smaller percent switching. The grid cannot supply that. And that is why our biggest threat this coming winter is:
Rolling Blackouts.
When they happen, almost nobody will have any heat at all. Most heating systems that use other fuels - even pellet stoves - also require electricity to function. The only heating systems operating will be those with backup power, and wood stoves.
*) in Vermont at least, where for a couple more years we can "enjoy" $0.13/KWH electricity (residential retail rate) from long term fixed-rate contracts. When new contracts are agreed on, I expect the price to double or worse.
The price of electricity has gone up in much of the rest of the northeast, so there may be some demand destruction.
But we've come close to rolling blackouts in winter before (particularly Vermont). We've basically lucked out because of relatively mild weather (summer and winter).
And that was when other fuels were cheaper than electricity... Thus my worry about blackouts in the coming winter, if the weather is colder than normal, or even if it is "normal".
Is there any evidence for electrical "demand destruction" in the Northeast states where the price of electricity has risen? My impression is that most people take the electricity bill as a given, and don't even bother to change a light bulb. At the most, they cut down a bit on air conditioning. But that won't affect winter use. Even those who installed efficient light bulbs, but switch to electric heat, will use as much in the winter as if they haven't replaced the bulbs, since the heat not generated by the bulbs will have to come from the heaters instead.
Well, there's an increase in utility cutoffs. If that's not demand destruction, I don't know what is.
Hi VT,
Certainly what you describe is a major concern to me, BC_EE and many others. The distribution system would seem particularly vulnerable, as much of it dates back to the '50s and '60s and was never intended to support major, temperature-driven loads of this kind.
I made reference to this article in an earlier Drumbeat:
http://www.boston.com/news/local/maine/articles/2008/06/25/utilities_urg...
However, as I noted at the time, I suspect the real reason why electrical utilities don't want to see a major uptick in electric heat demand is not so much system related as it is financial -- they don't want customers to rack-up massive power bills they simply cannot afford to pay.
Cheers,
Paul
Electricity at .13 per Kwh is $38 per million Btu's, $5 heating oil is about $35 per million Btu's, aside from furnace inefficiency, no savings to be had yet using electric heat. I thought about a conversion for my parents home from heating oil to electric, but at .11 per Kwh it just does not make sense, we will air seal, insulate and replace the 5 windows that have not yet been upgraded. Making the building envelope more efficient should be the first priority, reduce the heating demand first, then consider equipment replacement.
HereinHalifax: "I wonder how pellet supplies will fair this winter given the enormous spike in stove sales."
Even industry insiders wonder about pellet supply. The editorial in the current issue of Hearth&Home magazine, the main information source for manufacturers and dealers of wood and pellet stoves (and gas stoves and fireplaces and so on), was about the boom in pellet stove sales. ("It reminds me of the late '70s panic buying", says one New Hampshire retailer.)
The editorial also said ". . . Northeasterners were lined up five deep at sales counters in order to purchase a pellet stove; delivery might be five months down the line and, although they don't know it, there's no guarantee that pellet fuel will be available to carry them through the winter."
This winter will be an interesting one in lots of ways.
John
Hi John,
I know it well. I was once part-owner of the largest hearth dealership in Atlantic Canada that, sadly, after some thirty-five years exists no more -- buy me a drink and I'll tell you my sordid tale of woe (*). During that time, we sold thousands of Whitfields, Harmans, Dell Points, Envirofires and a few others I can't remember off the top of my head although, thruth-be-told, I wouldn't thank you for any of them.
Cheers,
Paul
(*) It involves a clever bookkeeper who was also a compulsive gambler and an equally unscrupulous and manipulative sibling.
Link above The right to mobility: How the left is violating our fundamental liberty by refusing our right to drill for oil
This article would be hilarious if it weren't so foretelling of where the offshore drilling issue is going. The author frames personal mobility as a God-given American right and paints the libs as some sort of shadow organization hell-bent on controlling the American people.
Unfortunately, I think we're going to continue to see attitudes like this as long as drilling is limited. No matter how many studies there are out there suggesting they're wrong, people will continue to say that we can just drill our way out of this mess (whether they actually believe it themselves or not) and Joe Sixpack will undoubtedly join their side. I, for one, am all for drilling, because it seems like the only argument that will shut up these "energy independence" people is physical proof.
This "American Thinker" blog is as wacky as it gets. The comments seem filtered heavily by the blog owner to simply create a chorus of "great post - I agree 100%". Right-wing-nuttery at is most florid.
Yes, I enjoyed reading the comments from that site to see how stupid the fruit loops are.
One thing that certainly won't hurt is a transparent, publicly funded effort to get a non-politicized scientific assessment of the potential offshore resources in question as advocated by Matt Simmons.
kenny,
I can understand your desire for an independent and visible evaluation of the reserve potential of those undrilled areas. But the answer can't be obtained by studying the issue. Even the oil industry can't provide a valid number. They may offer a big reserve "potential". I've been a petroleum geologist for 33 years and can tell you exactly what "potential" means in oil patch lingo: I can offer any number I want and you have no data to prove I'm wrong.
There are lots of examples I can offer to show you huge errors (both optimistic and pessimistic) when it comes to predicting "potential". Here's the best: The North Sea oil fields were a huge boom to the UK economy as well as the rest of the EU (and they blew the opportunity to modify their economy away from oil just like the US did when oil hit $10/bbl in 1986). About 25 billion bbl of oil produced the last I heard. But are you aware that the first major N Sea field was found with the 93rd well drilled out there? Not the 9th...not the 3rd....yes...the 93rd well. I've seen many fields discovered, drilled up and put on production. And even at that point I've seen ultimate recovery estimates be in error by 50% either way.
So when you here someone minimize or maximize "potential" reserves bear in mind: they can't tell you for sure IF oil exists under this spot or that spot but they can be very sure how much is or isn't there under that same spot. Think about that for bit. Sorta like: I can't be sure if I have a mouse in my cupped hands but I'm sure he weighs 1.2 ounces...if he is actually there...or not. Maybe. I think. I'm almost sure. Oh, wait, I have a model from the U.S. Mouse Survey which estimates he weighs 1.2 ounces...if he is , in fact, there.
I'm not picking on you kenny. I harass exloration geologists just the same when they throw their reserve "potentials" at me.
Kenny, meet Ponocchio. Matt does not advocate that. He advocatED that. He now says it's a waste of time, but what the hell.
Cheers
Welcome to the right wing in America. There was a funny comment to one of Atrios' posts the other day:
It is too kind to liberals, but it does capture the spirit of the US right wing perfectly.
So you see, when the US invades Saudi Arabia and Iran, it won't be a war of agression. It will be a defense of human rights! And it will all be the fault of the liberals.
The rest of the world is not nearly worried enough about the US.
Shargash,
When the "right wing" fails - as they have in the last decade - it is not because of conservatism. The problem is they tried to emulate their liberal brethren because they are ashamed of conservatism for some reason. If we had a true conservative government, things would be running a lot smoother right now...
/sarc or /scary?
this is the sort of stuff i see stated for real on jingoist blogs -
the problem is obvious: we need to CARVE A BIGGER STONE HEAD.
I think I'm going to be just saying "we need to carve a bigger stone head!" in response to all sorts of things from now on. Thanks!
I don't think a more perfect, or creative, response from the neo-cons is possible.
Well done, Tornado Zone, you have proven the theorem. Your prize is in the mail.
Cheers
See my post just below this one. The problem is not that we are not conservative enough, or that we are not doing conservativism correctly, the problem is that it doesn't work. What we have right now in the U.S. government is the natural consequence of 20-30 years of conservatism. That is, the government is working for the interests of those who it is supposed to be regulating as opposed to working in the interests of the people. It's called regulatory capture.
I don't think conservative means what you think it does. We've had 40 years of growing gov't and higher spending with less phyical production. That's not conservative politics.
Oh I understand conservatism all too well and that's precisely what I'm saying doesn't work. Certainly, a bloated government should be trimmed (as Bill Clinton closed military bases after the cold war). But, conservatives seem to want to through out the baby with the bath water, get rid of the useful things the government does in addition to the wasteful parts. This leads to regulatory capture because the normal checks and balances that the government does (all that bureaucracy) are removed.
In any case, the population has been growing, therefore the government needs to grow too in order to do its job.
middle-west,
I rarely use the word "conservative" to describe the American right wing today, and in fact it only appears in that usage in the quote from someone else. The American right wing is hardly conservative in any reasonable use of the word. And the Democrats in America are neither left wing nor liberal. I'm not sure what to call them, maybe the "not-so-far-to-the-right wing". I also don't believe the right has been emulating liberals, assuming you could find a liberal in the US to emulate.
In any case, I agree with the statement that "When the 'right wing' fails - as they have in the last decade - it is not because of conservatism". When they have failed, it is because of bonehead, unworkable solutions that make the problem worse. Belief systems don't fail. Policies fail.
In my view Republicans are liberal and Dens are socialists. Both are big-gov't overspending panderers.
many of the "ideas" introduced during the Clinton presidency were reworks of RM Nixon ideas. So, from your view, RMN was a socialist? Not in my view. The Repubs have moved to the right of good ole Atilla the Hun and the ems have moved to the old position held by the Repubs.
Neither party has any idea what fiscal conservatism is, in the midst of it all. We ain't seen nothing yet on the Federal Debt front. Just wait until Social Security turns the corner and pays out more than it collects for a fiscal year. After that, there will be no way to balance the Federal Budget.
"The American right wing is hardly conservative in any reasonable use of the word."
It seems to me that a reasonable sense of the word is to say that a conservative wants to keep things the way they are rather than change them. They have been doing a good job of keeping the money flowing from the producers to the owners.
See, the reason why the Kaiser failed to win the Great War is because he was ashamed to be a true German - too nice to the Jews and the poor and those other subhumans. We won't make that mistake next time.
See, the reason why Israel was overrun by the Babylonians was that the king was too modern and liberal. If he'd stoned more prostitutes, murdered more pagans, and sacrificed more calves, Jehovah would have beaten the vastly-larger enemy legions for us. The solution to every problem is to go further back into the past.
I've noticed something similar about libertarians and neocons. When deregulation seems to fail, they invariably say that the deregulation wasn't done right, or we need more deregulation to fix the broken deregulation. They never really seem to get it that certain things need regulation by the government in order to keep society working properly.
A few examples off the top of my head: if the energy markets hadn't been deregulated in California, Enron wouldn't have happened. If the FDA had been doing its job inspecting food like it was supposed to, they wouldn't be still scratching their heads over where and what is the salmonella infested food which may or may not be tomatoes. If the federal reserve had been doing its job regulating the banking industry, it would have enforced good practices on mortgages five or more years ago and we wouldn't have a sub-prime mortgage crisis.
But whatever, political creeds can be like religious fervor and need no rhyme or reason, only belief.
Gwy: I think a lot of the responsibility has to be placed on the American public. John McCain says he will carry on George's legacy in every way and he is in a tie for the Presidency. Arnold screws the Californians on Enron and now the public wants him as the Energy czar. The American public, for whatever reason, wants to be abused-there is a very strong submissive, masochistic streak running through the nation IMO.
Yeah I agree. I don't know, I suppose the corporate upper-class has usually had a better advertising campaign than the progressives. Then again, maybe Roosevelt's Great Society was an aberration and it's hopeless to think that a progressive policies can prevail in the long term.
The latest rant by JHK is great-I love the part about calling in the air strike on Vegas to show the new American resolve-He is starting to remind me of a more intellectual, toned down Hunter S. Thompson http://jameshowardkunstler.typepad.com/clusterfuck_nation/
JHK isn't qualified to carry Hunter Thompsons jock strap. JHK's stock in trade is rabble rousing. Hunter Thompson was an original thinker.
There is a place for both these men, but it isn't in the same sentence.
I noticed a number of gas stations closing relatively recently. I've also run across at least a couple stations this weekend (in Minnesota and Wisconsin) without any higher octane fuel. They'll have 87, but not 89 or 92.
One example (as of yesterday - Sunday) in Wisconsin exit 92 off of 90/94 - there were 4 gas stations, now there are 2, but probably pretty similar volumes of traffic - hence the lack of higher octane fuel (which I can only guess they carry less of than 87 octane). They were out of 89 octane.
Has anyone else noticed this? Is there a short-term worry about this? I can only imagine when stations close what can happen locally. There was an article last week about a town with only one gas station that closed - so they had to drive some distance to get gas. This is effectively a spot shortage. It seems like a very good precursor to real spot shortages -if they happen gradually- will push more stations out of business further exacerbating the problem in certain areas (probably not big cities any time soon).
I haven't heard much talk about this - I suppose a lot of people here aren't connected with people that are stranded by these issues.
There have been several news stories about this. The profit margin on gasoline is razor-thin, and many stations are losing their shirts. The most vulnerable are independents and stations in low-traffic places. There will be a shakeout, and gas stations in high traffic areas are the ones that will survive.
Also note that Big Oil is pulling out of the gas station business. They're selling their gas stations.
The profit margin on gasoline is razor-thin, and many stations are losing their shirts.
It's hard to believe that it was just a year ago that I was constantly defending against the argument that oil companies essentially set their margins, and were therefore gouging the public. I guess they just got tired of those fat refining margins. (Not aimed at you of course, Leanan).
But we are constantly hearing about record oil company profits. It seems that the profit in the whole extraction/refining/distribution/retail system is just badly allocated. I don't see how it would help the oil companies if lots of retail outlets went belly up, even if these were not owned/franchised by the oil company. Robert, maybe you have some idea why these profits are so mal-distributed.
They moved up the food chain. A year ago, it was low gasoline inventories that causes the price spikes. Oil prices were relatively constant, so refining margins went up. This year, inventories have been in better shape, and it is oil prices driving higher prices. Refiners and retailers are having a much more difficult time raising prices, and because inventories are OK and refinery utilization is low, there is some excess in the refining system that keeps prices from rising much above the increased oil prices.
Oil producers, now they are making some money.
Video of GWB "putting the ball in the court" of the US Congress to lift ban on OCS drilling:
http://www.msnbc.msn.com/id/21134540/vp=25674794�
Sweet- the premercial for me was an ExxonMobile advert on technology being useful to prevent pollution from fossil fuels.
Interesting. These guys are good.
I posted this in yesterday's DB early this morning, but it deserves a repeat here:
Train map of the Greater Tokyo Area:
http://www.u-bourgogne.fr/monge/g.dito/poisson2006/images/tokyo_trainmap...
This is what a REAL train system looks like.
And those trains generally run frequently, reliably, and ON TIME. The locals may even identify the train according to the time. Take the 12:17 here; when it gets to Shinagawa, cross the platform and take the 12:59...
We in the USA can only wish; service here is a fatuous oxymoron. Feckless glassy-eyed overpaid drivers never seem to grasp that noon is not 1:30, it's when the big hand and the little hand are on the twelve; worthless overpaid managers simply don't care; and crooked overpaid politicians in charge busy themselves collecting graft to such a degree they haven't time even to consider whether they care.
Readers should note, however, that even leaving aside the issue of lazy incompetent staff, we in the USA would have another show-stopping problem with a system like Tokyo's. The region covered by that map contains roughly as many people as the entire State of California all the way from Mexico to Oregon, crammed and jammed and packed and scrunched and wedged into the acreage of just one modest-sized US county. It's almost beyond the imaginings even of a New Yorker, and it's what makes that system economically practicable.
Rather few Americans will live that way voluntarily.
Hello Econguy,
Thxs for the fascinating graphic info. If the USA cannot postPeak build out Alan Drake's standard gauge railtrack ideas in sufficient time [I support Alan 100%], then I hope the TOD engineers are working on my quick, cheap, and easy narrow gauge minitrain & SpiderWebRiding ideas as the next fallback option.
JHKunstler called for an airstrike on Vegas, but I think a better idea would be to carefully take apart the skyscapers and bigbox buildings. The steel, when transported to the vital cities & towns could form the basis for a huge narrow gauge network; to function as the ribcage to the spine and limbs of Alan's standard gauge ideas. My feeble two cents.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Tokyo has an extremely high population density, even for a city. Public transport in this situation makes a lot of sense.
Nope. A non-trivial portion of that transportation system is private. The rail companies figured out long ago that to stay in business they had to integrate retail shopping into their model, thus many department stores are owned by rail companies (or more specifically, an integrated conglomerate owns both rail and retail companies.) These companies often own considerably real-estate along the lines, and then lease these to small/medium stores.
Transportation and commerce are inextricably linked, and it is important for US cities to fully acknowledge this publicly and own up to the consequences of having to move away from an ICE-only transportation system.
Probably most Americans would call a train public transportation regardless of who owns it. Airlines are referred to as public transportation although they are privately owned (even if they are so massively subsidized that in financial terms they might as well be government agencies.) The key seems to be that unlike private cars or taxicabs, railways and airlines are open to use by the public (for a fee of course), whereas private planes ("general aviation") are typically not. But go figure: in the USA a "private" school is open to the public in precisely the same sense. The words get confusing, as with British "public", i.e. private, and "state", i.e. public, schools. Note that most of the Japanese "private" lines still receive subsidies one way or another, as with airlines.
The commerce issue is very important. The Washington DC Metro, to go by the very modest use I've made of it, has somehow - deliberately or by accident I don't know - managed to get a couple of its stations connected up with significant shopping places. If you can get from the stores to the train without getting your gift-wrapped packages ruined by the pouring rain, that's an advantage (alanfrombigeasy take note.) Of course, with old lines in old cities, you're often stuck with what you have.
Oh, and for readers, I'll emphasize the point about population density a third time. The Tokyo system is simply not going to happen anytime soon anywhere in the USA. If you happen to wish otherwise, get over it: hardly anyone here wants to live at such inconceivable density. Even in Manhattan, many midday trains are somewhat infrequent (10 minutes) or are not the full 8 or 10 cars. This did not seem to be the case on the central lines in Tokyo, some of which ran full trains every couple of minutes all day long and didn't drop down to ten minutes even at late hours. North America is simply not Asia.
The distinction isn't about ownership or access to the public. It's really between private and communal transportation. In a bus, train or plane, you're crammed in with lots of smelly, loud or otherwise unpleasant people, and you're at the mercy of the service's schedule. In a car, you're at the mercy of traffic delays, but even the worst traffic jam rarely adds more than a half hour to a trip in town. It's a nice convenience for the driver with a big price in fuel and parking space.
"lots of smelly, loud or otherwise unpleasant people" Sorry but your implying that is all the other passengers are like that. Maybe a small minority could be called that but it is offensive to the vast majority of us who commute and regard ourselves as clean and polite.
Smelly are the motorists with smoky mufflers. Loud are the hoons with horns, souped up engines and doof-doof music. Unpleasant are the motorists who don't give way at pedestrian crossings.
Here's to public transport.
Didn't mean to imply the majority were that way, but it only takes a few to ruin the trip for everybody. Ever been stuck with a screaming baby on a plane? I was more relaying the attitudes of drivers than endorsing them myself.
I'm not here to put a happy spin on buses and trains. By any objective measure of comfort and convenience, communal transportation is less desirable than private transportation. Just look at the different costs of taxis and buses. Cars are a luxury because of that added comfort and convenience, but most Americans don't recognize it as a luxury because of heavy subsidies in fuel, roads and parking that make driving affordable for everybody. As long as it remains affordable (maybe not much longer), very few people will give up driving for mass transit. I know how drivers think. The way to reduce driving is to price parking at the actual price of space while making mass transit relatively affordable and convenient. You can also subsidize parking where it helps like suburban Park and Ride lots.
You're getting it all backwards. Tokyo didn't start out with high population density, and then they built a railroad afterward. OK, it did -- but only in the historical section, which is a small portion of this entire map. Like Manhattan compared to Greater New York. The reason why Tokyo has high population density is that they built the rails FIRST, and then everything else was built to maximize utility in retrospect to the existing rail lines. If you have a railroad, then everyone wants to live within walking distance of the railroad, and all the stores want to be close to the railroad station, because that's where all the people are. Thus, the parts near the station are the highest value, and thus they have a high density. Almost everything on this map was built after World War II. It was all farmland before that.
In the US, they would build the highway first, and then there would be a lot of big box crap near the highway offramp, which required lots and lots of parking space, and so on and so forth.
Of all the Americans living in Tokyo that I knew, which was a lot, I never met one that didn't hugely enjoy living at what you call "inconceivable density." They may have disliked other things, like pizza with mayonnaise and squid. But, the density never bothered any of them. Indeed, just as is the case in New York today, they usually insisted on living at the very city center, the equivalent of the Upper West Side in New York today, although this was much more expensive than some alternatives.
But, the density never bothered any of them.
Self-selecting group. If you do not like density, you won't stay in the city.
"Density" is not something that you like or dislike. You can have very high density, like a college campus, which is perfectly pleasant, and rather low density, like much Phoenix, which seems very "crowded" because everyone is driving around in cars. Everyone in Phoenix is complaining about how "crowded" it is, while people on the college campus are looking around asking, "where's the party?"
Sure it is.
You choose if you'd like to live in a tiny 3 room apartment with no green spaces or a large suburban house with your own private yard/garden.
Trust me, in Tokyo there is traffic on every level. From cars on the highways, cars on the local streets, bikes on the way to the station, crowded trains and stations, and even packed sidewalks. You notice the density. Phoenix has nothing on us.
But I happen to tolerate if not like living like this. Most suburban Americans I suspect would not.
Handy wallet-size.
Treehugger had a good link today consolidating all of the Electric Cars expected to be release in the next few years.
17 Electric Cars You Must Know About
Some fifty years ago, Diefenbaker spoke of the need to build a trans-Canada power grid to facilitate the movement of power along an east-west axis. Perhaps his dream will ultimately come true (crossing fingers for the undersea cable option linking Newfoundland and Labrador and Nova Scotia).
http://www.canada.com/montrealgazette/news/editorial/story.html?id=b9ce7...
Cheers,
Paul
It has been argued that John George Diefenbaker, a.k.a. Dief the Chief (1957-1963), was the last Conservative (as in, "there are aspects from the past worthwhile 'conserving'") Prime Minister of Canada. Such was the lament by the philosopher/social critic, George Grant, in his classic study of Canadian society, Lament for a Nation. Subsequent Canadian Conservative leaders have been of either liberal technocratic or neo-liberal technocratic persuasion.
IMO, it would be delicious irony if, when the worm turns, something from Diefenbaker's legacy was 'conserved'.
Perhaps, just perhaps, if Newfoundland did connect to the grid through Nova Scotia, a 40 year injustice would be righted.
Alas... sigh... we have the
neo-liberal, whoops sorry conservative PM Harper in charge. More lament for the nation.Hi Zadok,
Diefenbaker was a honourable man who genuinely loved this country, its people and its institutions and that, in my books, goes a long way to covering-off any perceived shortcoming. For even greater lament, contrast Harper and Bob Stanfield.
Cheers,
Paul
Hi Paul,
Ditto, ditto, ditto.
We're on the same page here! Stanfield holds a special place for me, too.
Cheers!
Tom
Hi Tom,
I had the great pleasure and good fortune to meet Bob on a number of occasions over the years (my grand mother was his riding secretary) and I was always awestruck by his intelligence, integrity, warmth and self-effacing good humour. He was a remarkable gentleman and deeply missed by all who knew him.
Best regards,
Paul
Paul, I think it was the Chronicle Herald that referred to Stanfield as "the best prime minister Canada never had."
Of course, had he been PM, he would have been pilloried by historians, journalists, and political scientists. Such is the natural benefit of not having a record to judge.
All that said, however, he was known far and wide as a "gentleman's gentleman." Nor did he have too shabby a track record as premier of Nova Scotia either.
Cheers!
one for totoneila
The List: Five Commodities to Hoard
http://www.foreignpolicy.com/story/cms.php?story_id=4375
others four listed are silver uranium, nickel and cobalt
I have room in my barn. Now where do I go to stock up on U238? Would that be at Sam's Club or Costco?
You want to stock up on U235 since U238 isn't fissible.
You need the U235, a hundred kilos---
Anyone using the rifle method, and I mean anyone, could make a bomb with that amount.
It may be a bit dirty, but it would be a real mess.
Why buy from a big box variety store when it's available at a big box "book" store?: (Amazon.com) Uranium Ore
Some of the "customer reviews" for that are really nice.
And the other products they shopped for.
Sure. Just look for the Blue Glow Special.
might get some of these at costco too- ya know along w/ ....
http://www.costco.com/Browse/Product.aspx?prodid=11009034
MUST READ THIS IMPORTANT INFORMATION BEFORE PURCHASING A CASKET
MUST READ THIS IMPORTANT INFORMATION BEFORE PURCHASING A CASKET
Q: Why is Costco Wholesale selling caskets?
As a service to our members.
Q: If members have more questions...
Now here's some news for ya all to chew on.
http://www.interfax.ru/news.asp?id=21671
Russia and Saudi Arabia concluded agreement about the military technical collaboration
Moscow. On July 14. Interfax - agreement about the military technical collaboration (VTS) between Russia and Saudi Arabia it is signed on Monday in the evening in Moscow.
As transmits the correspondent "of Interfax", agreement in the presence of the prime minister RF of Vladimir Putin signed the chapter of federal agency on VTS Mikhail Dmitriev and Secretary General of the highest national security council of Saudi Arabia [Bandar] Bean sultan.
Eric,
Sorry, but the link is coming through in Russian text. Can you help with the translation?
Regardless, why don't I have a good feeling about this??
Zadok_the_Priest -
USA: "But look at all we've done for you!"
KSA: "Yes, but what have you done for us lately?"
Nations have as much long-term loyalty to each other as streetwalkers have to their customers.
These instances of countries formerly chummy with the US but now cozying up to China and Russia are perhaps a disturbing sign that the US is increasingly percieved as a losing bet.
Two axioms of history tend to have universal application:
1. Nations don't have morals - they have interests.
2. Real politique is called the "real" thing for a reason.
These days, the bear (Russia) & the dragon (China) seem to have a better sweep of the forest floor and its denizens than the eagle. Height is not always an advantage.
"...Vladimir Putin signed the chapter of federal agency on VTS Mikhail Dmitriev and Secretary General of the highest national security council of Saudi Arabia [Bandar] Bean sultan."
Is this the same "Bandar sultan" that was nicknamed "Bandar Bush" because of his close ties to the Bush dynasty?
And the same Vladimir Putin of which GWB said "I was able to get a sense of his soul.."?
Oh please sir, say it ain't so!!!
Ah, I love the smell of capitulation in the evening…
But it has sure taken long enough getting here! Many of us who are old enough to remember the normal business cycle and yes, Virginia, despite the protestations that “this time it’s different” it still exists and can strike with a vengeance…have wondered “how in the world is the stock market holding up at these levels? Where is the needed capitulation, the “blood in the streets” hysteria that we should be seeing?”
At last, capitulation seems to have arrived at least in the financial community. Surprisingly, the contagion which must surely come has now yet followed, as the broader markets are still not showing the stock price setback it surely should have by now.
But the financial community…now distrusted and discredited by almost everyone, with banks and mortgage lenders and insurers priced as though EVERY HOME with a mortgage is going into foreclosure NOW, is surely in full capitulation. The predictions are growing so fantastical that…well, what can a person say really, it’s just absolutely off the charts, and the web makes all bloggers and commentators equal.
A poster just up this string posts the words of an obvious authority, Bud Burrell are quoted with block quotes and everything:
“There are things going to be coming out in the next six months that every single American is going to know that they’ve had half their retirement income stolen from them, half their real estate value stolen from them. Not lost under market pressures. Not part of a market adjustment. No bubble being burst.”
“The discussion on the smaller US banks has now turned into a quibble over whether "only" 150 will collapse, or whether perhaps 300 bank failures is still a too conservative number.”
If Bud says it, it must be true, and Bud does at least run with interesting company:
http://garyweiss.blogspot.com/2007/12/whos-bud-burrell-and-other-questio...
Of course then the question becomes “who’s Gary Weiss?” but like I said, in the blogging world they are all equal, right?
The SEC has been watching internet blogging and message boards apparently in an effort to see exactly who is out there planting rumors.
Today on the Washington Mutual message board, there were reports indicating WITH NO EVIDENCE a bank run, but the other posters on the board were very alert, claiming to duly report this to the SEC. We must recall that we are in the first real bear market lasting an enduring period of time since “blogging” became a national pastime, and no one know s what effect hysteria has on blogs, and the blogs then have on the market.
The case of Charles Schumer’s remarks concerning Indy Mac just the other day point out how fast events can be propelled by words alone, and the short selling investor/speculator has every reason to sow hysteria and rumors wherever possible.
To throw a name a bit more famous into the ring, Yahoo news reported today that Warren Buffet's Berkshire Hathaway stock was down 20% from its all time peak. Buffet did not seem hysterical, however, saying that if his shareholders expected the returns this year that they got last year, they might want to sell the stock.
In the longer run, Buffet recently stated he was willing to take bets that the S&P Index would be up more over the next decade than the hedge funds would be, and I assume he is including the short selling hedges who always seem to find a way to get their strident panic sowing message into the media.
Whom to believe, Buffet or Burrell? Now that has to be a toughy…:-)
RC
Roger: Many of these firms are not being run like actual businesses-they are being run like private clubs which exist solely for the pleasure of upper management and an inner circle. It might be a surprise to yourself that some of these firms have hit a brick wall, but it is no surprise to upper management-the only question was when. Lehman Bros (as an example)-valued at 7 bill with 760 billion in debt. This firm went public in 1994-are you trying to say that you believe the partners would have been this foolhardy with their own money? The cronyism and corruption rampant between financial firms, hedge funds, pension managers and investment managers is totally out of control-you think this is all the fault of internet rumour mongers?
"The cronyism and corruption rampant between financial firms, hedge funds, pension managers and investment managers is totally out of control-you think this is all the fault of internet rumour mongers?"
ABSOLUTELY NOT, no more than I believe the gas pedal is what propels the car I drive!
The financial community(admittedly a generalization) deserves the distrust and disrespect it gets, it has EARNED IT.
But somehow, somewhere we sooner or later find our way back to the fundamentals. Some financial firms, such as the ones you describe above, may well deserve full bankruptcy and liquidation. But would it be 300 banks? How many "banks" are there in the U.S. anyway, does anyone even know? And how are "banks" being defined? In the last few years everybody with a pulse seems to have wanted to start a bank, but since most of these so called "banks" could not possibly survive FDIC and SEC oversight, they instead become firms that perform banking functions with little or no oversight. Everything from rent to own to pawn shops to "check cashing" firms now operate, or try to, as "banks". What are these firms worth? You figure it out...and the banks, the real ones have dragged themselves into the gutter trying to compete with them.
Of course there had to be a setback, and probably a damm big one...but at some point, we have to look at each institution individually. What is clouding the issue?
Look, If I see a setback coming, and surely anyone with a brain would, and can afford to go short, something not anyone could afford to do, my best best is to step on the accelerator, get out there and start saying things like "it could be 300 banks going down the tube!!"
So I take down the decent ones with bad ones, big shit, I made a fortune, let the little piss ants try to pick up the mess of their shattered retirement and foreclosed homes, right? I personally know people WHO NEVER RECOVERED FROM THE 1970's, because they were terrified into FAKE LONG TERM HYSTERIA ABOUT THE LONG TERM FUTURE OF THE COUNTRY!
I disrespect crooked bankers, but equally so I disrespect a bunch of vultures and hyenas trying to sow panic and fear for their own benefit!
Let's try to recall that the DAMNED HOUSES ARE STILL OUT THERE!
THEY ARE AN ASSET!! Let's try to remember that we still pay the lowest gasoline prices of almost any industrialized nation, still drive the biggest damn cars, still live in the biggest damn houses with the biggest appliences, and still have more money in the bank than we know how to handle! How do I know this?
Just as I started writing this e-mail, the CBS News was reporting that roughly 37% of American money deposited in banks and S&L's was OVER THE $100,000 dollar FDIC insured limit!!!!! HOW MUCH MONEY DO YOU PEOPLE HAVE ANYWAY? AND HOW DAMN STUPID ARE YOU TO LEAVE IT IN A BANK KNOWING YOUR OVER THE FDIC LIMIT??? Oh, that's right, you heard on one of the panic mongering sites that bonds are unsafe because America is GOING BANKRUPT, AND DEFFEYES SAYS WE WILL BE IN THE STONE AGE IN 20 YEARS, NO NEED TO PLAN YOUR FINANCES, RIGHT?
I don't know if we are at Peak Oil or not, but it won't matter, PEAK IDIOCY will finish us off first. There is a reason the poor are poor, but in our efforts to do away with the poor, WE HAVE MADE IDIOTS RICH.
gee, I sure hope I haven't offended anybody...:-)
RC
All you've done is point out the obscene concentration of wealth in the top few percent of Americans. Most Americans have little or nothing in the bank.
That's just incoherent. The richest people in America are the ones with the 37% over the FDIC limit. They don't believe anything bad is going to happen. They don't read Deffeyes. Few of them have even heard of Peak Oil. Almost none of them read the "panic mongering" sites on the Internet. They are the people who have been lulled into complacency by the soporific media. It's not stupidity. It is ignorance.
And what evidence do you have that any of the people you accuse of sowing panic are doing so to profit from it, or that they even have investments that would allow them to profit from it (though I'd think they'd be stupid if they didn't)? If you are convinced that stocks are going down, there is no reason to talk them down. In fact, the fewer people that know they are going down, the better. The only people who need to talk down a stock are the people who think the stock won't go down if they don't talk it down. If you know a stock is overvalued, you're doing everyone a service by letting them know. The idea that people on the Internet have any significant effect on the market as a whole is just silly, an example of "the trenchant phrase of the late historian Richard Hofstadter, 'the paranoid style'", to quote from one of the stories above.
We may well be entering a new Great Depression. Were you aware that people in the depresion could say, "DAMNED HOUSES ARE STILL OUT THERE!" It is just that many of them were owned by the banks. And lots of prices, including gasoline, were very low during the depression.
"The richest people in America are the ones with the 37% over the FDIC limit."
Could that be correct? Do the wealthiest Americans actually leave big chunks of money in the bank earning passbook rates? That doesn't sound like a way to stay rich for long...
And if it is only a tiny percentage of wealthy who are in the position of being over the $100,000 limit, why does the larger media even care? It would be a problem that affected only a tiny fraction of Americans, much like reporting that Picasso paintings had declined in value...
Somehow, a picture is being painted here that does not sound coherent...
"And what evidence do you have that any of the people you accuse of sowing panic are doing so to profit from it, or that they even have investments that would allow them to profit from it (though I'd think they'd be stupid if they didn't)?"
That depends on what you call "evidence". Just the other day after rumors about Bunge, the giant commodities firm were spread in the media (relating to a takeover, and other rumors saying the take over was off, etc.) the price moved almost a 1000%, but by the end of the day had settled back into a range of a few percent where it started the day. Just today, rumors on the Washington Mutual Saving and Loan website were saying that there were runs on Washington Mutual branches. People driving past Washington Mutual saw business as usual with NO EVIDENCE of a run on any branch. At last look, WM stock was down over 35% but was already rebounding after hours (when the pros trade, not the average investor). For the record, I own no shares in Washington Mutual. However, a few years ago, I did own shares in a company about which rumors were spread that a Federal Food and Drug Administration investigation was to be launched. The company share price went from over $2.00 to pennies within hours. Anyone shorting the stock would have gotten wealthy within hours. By the end of the day the stock was back at it's old price, but if a shareholder believed the panic or had automatic stop losses in, they could have been wiped out (some were, or at least they were put out of their position at a major loss). Later, some rogue FBI agents were even implicated in the scam. There was NEVER any evidence of a FDA investigation.
This should answer your question "If you are convinced that stocks are going down, there is no reason to talk them down. In fact, the fewer people that know they are going down, the better. The only people who need to talk down a stock are the people who think the stock won't go down if they don't talk it down. If you know a stock is overvalued, you're doing everyone a service by letting them know."
If you KNOW it is overvalued, then yes, but that is not what is happening. What you want if you intend to make money VERY VERY FAST is to create a false impression of a companies weakness. Then you know when it is going to happen and how fast, so you know to get in, get the money and get gone. It is a tactic that has been used for years. If the industry sector you intend to short is already weak (i.e. financials right now) then the media is already working to your benefit. I pointed up in another post on this thread the way in which Yahoo News portrays the current bank failure issue, in which they say "More banks will fail". You have to read well down in the text to realise that according to the experts Yahoo themselve is using for the story, the worst case scenario is 2% to 4% of all banks failing in the next 18 months. That's 2 to 4 percent!
You say "The idea that people on the Internet have any significant effect on the market as a whole is just silly...", I must ask, what could POSSIBLY cause you to believe that? The internet has transformed the investment landscape in ways that are not yet understood even by the professionals. The internet is the ONLY source of INSTANT financial news that is worldwide in scope. No, I think your assuption about the effects of the internet on the world markets is extremely naive, almost impossible to understand if you have grown up in this era.
One last thing, and I mean no offense here, and correct me if I am wrong, but you really have not dealt with the financial community much, have you? It's a pretty gruesome business actually. This nation desperately needs to begin MASSIVE financial education about how the real world works and the effect of modern technology...it is not your fathers market as depicted in those homy textbooks you may remember from college.
RC
Thanks for this. It re-affirms my impression that people in the financial sector are "making their own reality". These folks know nothing about how fragile things are in the "real" world (based on an ecological, biological view). Their beliefs that they can game the system are basically delusional. The bottom line is: nature bats last (tip to Guy McPherson).
Could that be correct? Do the wealthiest Americans actually leave big chunks of money in the bank earning passbook rates? That doesn't sound like a way to stay rich for long...
Considering the preformace in the stock market or stocks like GM - the bank's a pretty good plan.
ThatsItImout, you're probably right, but you're screaming too much. And the beer I'm drinking (Faxe 10%) makes you even less comprehensible than you might ordinarily be.
You claim that there are assets with value--I guess we need to ask, "who has ultimate claim on those assets?". I'm guessing that that claim will go to those who can buy or work for them. Arabs, blue-eyed Arabs from Calgary, and the Chinese.
Hmm, I'm not sure that I'm any more comprehensible than you, so I'll cut off this post.
"Let's try to recall that the DAMNED HOUSES ARE STILL OUT THERE! THEY ARE AN ASSET!!"
Ummm, well, maybe, but there might be some awkward problems to solve before they can be used as an asset.
For many years, the US Government has told everybody that they absolutely must buy a house, and by implication the biggest house they can possibly manage, and then some, and then some more. The message has been reinforced since World War II by bailouts, lavish tax breaks for builders, lavish deductions for buyers, and the massive profits many house owners made from the 1970s inflation (especially those who paid off 5% mortgages with 15%-compounded inflated dollars garnered from lush union jobs that kept up beautifully with the vanishing dollar), all this largess at vast expense to the general taxpayer. And then came Greenspan's gargantuan bubble of the noughties - come one, come all, the age of working for a living is over, get on board the magic carpet and ride for free up the property ladder.
So now huge numbers of people "own" far more house than they can possibly know what to do with, or can handle financially, or can even keep dusted and vacuumed. Consider that for a number of years, Kennedy Homes in Chicago ran a radio ad frequently that (jokingly) depicted their houses as roomy enough to have a civic chorus rehearsing at one end of the Great Room, and a tennis match or some darned thing going on simultaneously at the other. Now, I haven't heard that ad lately - I wonder why - but that has been the government-promoted ideal for decades.
And then, oops, fuhgeddabout peak oil, just consider peak lunacy, the cost of operating those vast palaces, or of carrying the empty ones, rocketed up, with no clear end in sight. And then consider today's Fannie and Freddie bailouts, and all the trillions-worth to come at taxpayer expense, and imagine what the operating or carrying costs will be tomorrow as the dollar sinks into the mud.
So houses can no longer be carried practically for free, which may make them a less effective speculative investment for middle-class freeloaders than they were during the bubble. That means we find ourselves with a surplus. But that's OK, we simply hang around and wait for aging of the general housing stock to work it off.
Oops again: the damned houses are made of vinyl, which deteriorates under ultraviolet light from the sun; and cardboard, oh, excuse me, "engineered lumber", which in most non-desert locales deteriorates from the always-adverse interaction between glue, humidity, and mildew, to say nothing of temperature and humidity fluctuations if the HVAC is not kept running at full bore and ruinous expense. And then there are the roofs with the bazillions of "it takes a village to make a house" peaks and valleys and flashing and whatnot, but let's not even go there, we've got the idea. So the surplus has a sell-by date, financially, chemically, and physically. Oops again.
Under the circumstances, it might be smart to make those ASSETS more affordable, i.e. marketable, by converting some of them to duplexes or even four-plexes. They're plenty big enough and then some, and there's plenty of people in grotty apartments who would move to something affordable in a heartbeat. And despite a certain doom meme, many of those houses are NOT so exurban that transportation is entirely hopeless. But such a proposal would set up a race between ultraviolet and humidity on the one hand, and glacially-moving zoning boards desperately trying to salvage "property" values on the other hand, and town councils who only want highly affluent people in their jurisdiction on the third hand. I think ultraviolet and humidity are dead certain to win long before any significant number of conversion permits are ever issued.
Really, it's rather unfortunate and obscenely wasteful.
PaulS,
I could not agree with you more...it's been a horrendous waste. And what is astounding is that the so called "discounted" post crash prices are still insanely high for the garbage these houses are.
Think about the lost opportunity, and the fact that these houses could have been built to the highest standards of energy efficiency...no don't think about it, it will only make you depressed.
RC
No problem. The houses are too far away from work to make commercial sense?
Get rid of social security and welfare and convert them into orphanages and old age group homes. Problem solved.
You think I'm joking? We'll do what we must when we run out of money.
SoCal, USA: From doing a bit of a walkabout today... Some branches, but not all, of IndyMac have huge lines out front, and have had those lines pretty much all day long. People milling about, standing under umbrellas, etc. I didn't go up and ask anyone, but it sure looked like a bank run.
CNN has been covering the story. Some people were waiting all day, and were turned away at closing time.
Seems a lot of people had more than $100,000 there. They've been told to expect 50 cents on the dollar for anything over the $100,000 limit. (That's for all accounts in one bank, not per account.) IRAs are covered to $250,000. Annuities and mutual funds are not covered at all.
And some are calling for Sen. Schumer to be censured for starting the run on Indymac.
What do you think would happen if the US gov't came out and announce we've reached PO? A little truth can go a long way to destabilize the system.
Schumer is a rat-you don't break the code of silence http://en.wikipedia.org/wiki/Omert%C3%A0
Nah. I think someone wasn't forthcoming with their "insurance" money. You never know what can happen to your if you "insurance" policy lapses.
The problem is that $100,000 isn't all that much money these days. It has not been adjusted for even the phony inflation figures that the government puts out. At least recently that I can recall.
Not everyone bought a house during the housing boom. At least the same number sold their house that bought one, including myself. Those inflated dollars we got had to go somewhere and the bank is supposedly the safest place. But when FDIC insurance is seldom if ever adjusted for the rising prices of houses this is the result.
It is annoying and inconvenient to have money in several banks. What do the really wealthy do? Do millionaires have their money in 10 different banks? Maybe they do. I don't know any that well.
Spend a week or two in a hospital uninsured or go out house shopping today, even after the bubble burst, and see what you get for $100,000. It ain't much and yet that is the maximum the FDIC insures. What we have now for all practical purposes are banks in which accounts are only minimally insured.
The financial system is going back to the bad old days of bank runs because of it.
The problem is that $100,000 isn't all that much money these days. It has not been adjusted for even the phony inflation figures that the government puts out. At least recently that I can recall.
I must be poor; that still seems like a lot of money to me.
That's cause you're not selling corn at 13 bucks a bushel.
The really rich use something called a "sweep account". Or at least they did at A.G. Edwards where I used to work (now part of Wachovia Investments). It's basically a meta-money account. Say you want to put 650,000 in a money market: this looks like one account at AGE (and my understanding is that other firms offer these), but they in turn put 100,000 in bank A, 100,000 in bank B, 100,000 in bank C... and 50,000 in bank G. The customer can treat it as one account, but the whole kit and kaboodle is insured.
The FDIC will insure more than 100K, its just that you have to pay to insure amounts larger than $100K.
Let us now look at headline as it appeared in big orange letters on Yahoo News:
Analysts Say More Banks Will Fail
Now let us create a headline based on the facts as they are given in the article, which states that there could (notice, not would, but could) be 150 bank failures in the next 18 months:
Roughly 2% of U.S. Banks Could Fail Say Analysts
gee, don't sound quite as scary does it?
Let us include the worst case scenario given in the article:
Roughly 2% To 4% of U.S. Banks Could Fail According To Analysts
Not good, but still not exactly the end of the world.
This is based on the fact there are roughly 7500 banks in the U.S. and possible bank failures are projected as 150 on the low side, 300 in worst case scenario as seen by the analysts used for information for the article.
Kind of puts things in perspective don't it? But I will say this, WHATEVER BANK YOUR IN, GET BELOW THE $100,000 FDIC LIMIT! Why wouldn't you?
RC
Hmmm...2% of the banks could fail...that doesn't sound bad unless those 2% are the big ones!!! I'm guessing that's 2% by number of banks and not 2% of the amount of wealth those banks handle?
The "analysts" cited by the MSM have been abysmal at predicting where the economy has been headed. Some of them having been telling people to sell commodities and buy financials. Some have been telling us for months that the "subprime crisis was well-contained". Many have been predicting stock market rallies to new highs. Their predictions of 2-4% are no more real than their predictions of new highs on the S&P 500.
But I agree that people should get below the 100K limit. Also, no one should have all their money in one place, even if they're below 100K. Even if you are insured, it could takes months to get at your money.
Even if you're insured to $100K....what if your bank is the among the last banks in line for payouts at FDIC? How many banks did they estimate could fail at a time?
If the FDIC had $100, they just spent $10 on IndyMac. So, that leaves 9 more banks at the same size or 18 at half the size. Good luck! (By the way, I just heard on NPR that one depositer only got 60% of his 401K account from IndyMac today).
i know there will be some banks that will fail, for the usual reasons. but if a bank takes in money at 0% or 0.5% or 3% and loans it out at 6.5% or 22% ,it would seem to me they should be able to make money. and fees, $1 or $2 for using an atm, $35 for an overdraft or late payment, give me a break.
bad mortgages, you say ? every mortgage i have taken with less than 20% down has to have hoi(home owner insurance) which the borrower pays for to protect the bank.
now, if a bank cant make money under those circumstances, it is probably because of bad management.
i dont know about fannie or freddie, it seems like they are playing with funny money (taxpayer sponsored debt)anyhow.
I just watched on CSPAN the US House of Reps hold a 2 hour debate on energy. They resurrected an old Newt Gingrich format where for the 1st hour the minority leads controls the balance of time, and the second hour the majority lead controls the balance of time.
The result, more of the same. You know the drill, pun intended. Anyway, the debate ended with the Bart Stupak D-Michigan expounding (wrong word, he spoke for over 20 minutes though) about "excessive speculation" and promoting his pump act bill.
Interestingly, in regards to speculation, it seems to be the only topic the 2 parties remotely agree upon. Look for some kind of action here from congress.
Based on my observations, with this kind of debate underway, we are f'd if we expect these yahoos to be helping us out with a path forward.
A revolution eventually brings the same people back up on top. One might say the Tories have finally won the Colonial War.
Is there really any difference between 87, 89 and 92 octane? Which cars out there supposedly require the higher octanes? I used to have an Alfa Romeo that supposedly required 92 octane, but it ran fine on 87
I realize that this is a late answer, but YES, there are cars that run better on higher octane. I am not an expert on this, but I had a Camaro Z28 that ran on high octane. (back then, it cost $1.28). These cars have a higher compression ratio, which means the piston squeezes the air and fuel mixture more. If a lower octane is used, the fuel/air mixture will ignite early (before the spark plug fires). This produces knocking when you accelerate hard. This knocking is bad ware on the engine.
When I had the Z28, I always new when they sold me the cheap gas, because as I accelerated back onto the highway, it would knock.
Would anyone care to comment on this?
Abundant energy will power future growth
This article is being offered as "evidence" that discredits peak oil by a prominent conservative commentator in Australia.
From the article:
And the Titanic was unsinkable.
In any case, this is basically Peter Huber's argument--that the sum of the output of a group of depleting energy sources will show an infinite rate of increase.
If you ignore the quality and cost of exploiting these reserves, they look like a lot. But these "oil reserves" are not really oil reserves. They are stuff that can be mined and made into oil with a lot of processing. You don't just stick a pipe in the ground and have oil gushing out.
The key question to ask is "what is the expected flow rate for these reserves?" The answer is pretty low - not even half a Saudi Arabia.