DrumBeat: September 17, 2008
Posted by Leanan on September 17, 2008 - 10:10am
Oil spikes $6 on safe-haven buying, weak dollar
NEW YORK - Oil prices shot up $6 a barrel Wednesday, rebounding as fears of a spreading crisis in the U.S. financial sector sent skittish investors scrambling out of stocks and into hard assets.The big rally at least temporarily halted crude's steep, two-month slide and brought prices back within striking distance of $100. Investors were frantically buying the same commodity that until this week they shunned in the belief that the slowing global economy was eroding demand for energy.
But analysts said oil is unlikely to resume its upward climb; the economic downturn has indeed sharply curtailed demand, and they noted that recent rallies often have been followed by sharp selloffs as oil market traders try to cash in.
No relief in sight for summer heat trend
For the 30th consecutive year, the Earth's summer temperature was above average (left), according to data released Tuesday by the National Climatic Data Center. Global temperatures were the ninth-warmest since records began in 1880. (Climatologists define summer as the months of June, July and August.)
Iran likely to face more power cuts this winter
TEHRAN: Iranians are likely to endure further power cuts this winter despite their country's huge oil and gas reserves, Energy Minister Parviz Fattah warned in comments published on Wednesday. "There is a possibility of blackouts in autumn and winter," the Etemad newspaper quoted the minister as saying.Fattah said cheap electricity and the resulting high levels of consumption were to blame for the inability to meet demand.
A MAGNITUDE 5 earthquake struck southern Iran overnight near the port of Bandar Abbas, site of a major oil refinery, Iranian media reported.The same region was hit by a 6.1 magnitude earthquake last week that killed at least seven people.
Three workers killed in Medgaz accident
MADRID (Reuters) - Three workers have been killed, four badly injured and one other is missing after an accident during the construction of an undersea gas platform between Spain and Algeria, the Medgaz consortium said on Wednesday.
Nigeria: Militant attacks cutting oil production
LAGOS, Nigeria - A spokesman for Nigeria's state oil company said Wednesday that militant attacks are now cutting the country's daily oil production by about 1 million barrels a day, 40 percent of what the country produced before the militant campaign began three years ago.Nigeria was producing 2.5 million barrels of oil a day before militants started a campaign of attacks in 2005 that cut the output to 2.1 million barrels a day.
But militants have dramatically stepped up their attacks since Saturday, and Nigerian National Petroleum Corp. spokesman Livi Ajuonuma told The Associated Press that has cut production by more than 1 million per day. That's a further 600,000 barrels a day lost, putting the country's daily output at around 1.5 million barrels produced per day.
"It's a heavy loss," Ajuonuma said.
Medvedev wants Russia to set Arctic seabed borders
MOSCOW (Reuters) - Russian President Dmitry Medvedev ordered his officials on Wednesday to draft a law marking out Russia's borders in the Arctic, where it is competing with the West for control of vast energy resources.Medvedev did not specify where the borders should lie but Russia has claimed large swathes of territory and any unilateral action would breach a deal between the five Arctic Sea countries to let the United Nations rule on their rival claims.
'We must finalise and adopt a federal law on the southern border of Russia's Arctic zone,' Medvedev said in televised remarks to his Security Council.
'It is our duty to our direct descendants. We have to ensure the long-term national interests of Russia in the Arctic,' he said.
An urban legend to comfort America: alternative energy will save us
We often hear that rising prices will incent scientists and inventors to produce clean and bountiful new energy sources, from Mr. Fusion to zero-point energy generators. I too share this faith, but that does not mean that these wonderful devices will appear when we need them. This is the “whale oil” fallacy. Yes, it happened in the 19th century that new sources appeared before the last whale was harvested for its oil. That does not make it a law of nature.
Collapse of Wall Street precedes complete disintegration of system. About those "green jobs"
The “progressive” or alternative press mostly subscribes to the constant corporate media/government lie that things will get back to “normal.” Hope for a good transfusion of fresh blood from a new president is periodically based on misplaced faith in the handmaidens of the status quo, Democrats or Republicans. Regardless of this quandary, we had best understand better the fact of collapse.A big-picture analysis includes the loss of cheap, abundant energy that cannot be replaced. The news media studiously ignores this while pretending to present real news on energy and the environment. This policy is followed also by the mainstream or Establishment Environmentalists who are paid publicists for the technofix. Some of their work on pointing out problems and brushfires is invaluable, but you don’t hear a car-free-lifestyle message from them, and you probably won’t -- until that’s everyone’s only option.
More heating funds released, senators say
WASHINGTON, D.C. -- President George Bush has directed the release of $120 million from the Low Income Home Energy Assistance Program fund to help states prepare for the upcoming winter, Maine's senators announced this morning.
IEA Assessing Case-By-Case Ike Oil Disruption
The International Energy Agency (IEA) said on Wednesday the damage caused by Hurricane Ike on U.S. oil and gas output was less visible than in 2005 but that it still required a case-by-case assessement.
Pride Expects the Pride Wyoming to be a Total Loss
Pride International reports that the Pride Wyoming, a 250-foot mat slot jackup rig operating in the U.S. Gulf of Mexico, is missing and expected to be a total loss following Hurricane Ike. The rig's last location was at Ship Shoal 283, approximately 90 miles south of Houma, Louisiana. All rig personnel had been safely evacuated prior to the arrival of the storm.
Food Banks Finding Aid in Bounty of Backyard
BERKELEY, Calif. — Natasha Boissier did not expect an epiphany while pushing her baby’s stroller exhaustedly around the neighborhood. But eyeing her neighbors’ yards, Ms. Boissier began noticing the abundance of fruit trees — and how much of their succulent bounty wound up on the ground.
Berkeley approves public financing of solar panels
BERKELEY, Calif. - The Berkeley City Council Tuesday night gave final approval for the nation’s first municipal program to finance solar arrays for homes and businesses.The city’s Sustainable Energy Financing District could accelerate the adoption of rooftop solar by overcoming one of the biggest obstacles to homegrown green energy: the $20,000 to $30,000 upfront costs and long payback time for a typical solar system.
U.S. may seek IEA's emergency gasoline supplies
WASHINGTON (Reuters) - The Bush administration was considering asking the International Energy Agency to release emergency gasoline and diesel fuel inventories into the U.S. market after Hurricanes Ike and Gustav disrupted domestic supplies, a cabinet official said on Wednesday.U.S. Energy Secretary Sam Bodman told reporters that the Bush administration could decide as early as Wednesday afternoon whether to make the request to the International Energy Agency.
"It would be to provide refined products," Bodman said following a speech to the National Petroleum Council.
"The real need on a macro basis, from the country's standpoint, is the availability of refined product...gasoline and diesel, but largely gasoline," he said.
The federal Energy Information Administration reported earlier on Wednesday that U.S. gasoline inventories were at their lowest level since 1990.
AutoNation CEO reacts to credit crisis
Jackson is an outspoken industry leader who has advocated for higher gas prices to curb America's addiction to foreign oil, and has pushed U.S. automakers in recent years to stop building too many cars and trucks, which he complained just ended up sitting on dealer lots like his with huge discounts.Through June, AutoNation's net income for the year was $103 million, down from $155 million during the same period a year ago. That's a decline of 34%.
He's predicting that many dealerships will go out of business or consolidate as a result of the tough economic climate.
China, climate change and US dollars (video)
China's growth in oil consumption accounts for about one-third of the world's incremental oil consumption that's happened since 2000, and now China's oil consumption already accounts for about 10% of the world's total oil consumption. And the US accounts for 25%, but China's is growing very rapidly. And that is taking place, moreover, at the moment when we're probably at the peak, overall peak, of the global oil production or very near to that.
Mainstream economists and so-called experts have filled the minds of most Americans with many economic myths that are constantly reinforced by the media and repeated on the streets. These myths are erroneous at best, sometimes based on half truths.The majority of them are just false. We read and hear them every day: "inflation" is caused by rising oil prices; consumption is the most important element for economic growth; low interest rates are helpful to the economy; government expenditures help "stimulate" the economy; there is an energy "crisis," and many others. We will examine the most common ones and proceed to explain the reality behind these myths.
North Carolina: Schools, agencies feeling fuel pinch
Hurricane Ike has interrupted the shipment of diesel fuel to Iredell-Statesville Schools, jeopardizing the district's ability to transport students.
AUGUSTA, GA - One Augusta gasoline distributor predicts it will take two weeks before supplies return to normal.
Florida: Diesel Shortage Affects Local Schools
A diesel fuel shortage due to Hurricane Ike is causing local school districts to cut back on field trips and some athletic events.
Alabama: Gas woes force city to curb bus routes
High gas prices might persuade more Huntsville residents to ride the bus, but a fuel shortage caused by Hurricane Ike is forcing the city to temporarily cut back bus service.
Fragility of our energy system hits home - and wallets
Ike reminded us once again how vulnerable we are to disruptions in the flow of gas from refineries in the hurricane-prone Gulf Coast area.
Blame the bloggers Chapter 1,384
Florida Secretary of Agriculture Charles Bronson said some of the blame for runs on gasoline in the wake of Hurricane were due to rumors spread on the internet.
City of Atlanta Has 15 Days Of Fuel Left For City Vehicles
ATLANTA -- The gasoline pinch isn’t just affecting you -- the city of Atlanta said it only has enough gas to get through the next 15 days and it’s asking everyone using a city vehicle to conserve.“I guess we’re all going to have to start riding horse and buggies,” said Atlanta resident Roger Evans.
Memphis City Schools teachers may seek 4-day week
Teachers in Memphis City Schools are expected to ask for a four-day week in their union negotiations this year, setting up the scenario that could change tens of thousands of daily lives as early as next fall.
Indonesia: The energy crisis: How can PLN save itself?
In order to ensure a stable supply of power (mostly for Java and Bali), state electricity company PLN managed, after some degree of "persuasion", to convince malls and office buildings to use their own generators for three hours per week.PLN had originally requested they use their own generators for 10 hours per week, but finally agreed on just three. Either the their "persuasion" was not strong enough, or Java and Bali are still not free from the threat of blackouts.
Energy security 'more important than climate change'
Securing the country's supply of electricity is more important than tackling climate change, a new report from energy analysts has claimed. It warned that the UK's economy could be wrecked if there was no action to plug the energy shortfall predicted for the next decade, with businesses going bust and hundreds of thousands of people losing their jobs.But the report, led by Ian Fells, emeritus professor at the University of Newcastle and a veteran energy policy analyst, has been dismissed as "naive" by Greenpeace, and "overstated" by the energy secretary John Hutton. Environmentalists argued that the report's recommendation for new coal-fired power stations went against the advice of scientists and that the rest of the world was forging ahead with renewables.
Russia: Oil Firms Producing at Loss Due to Lower Crude Prices
The country's oil companies are losing money on crude production after a decline in prices pushed the market value of a barrel of the Urals blend below the cost of getting the fuel to consumers and paying taxes, UBS said Tuesday.A Russian company shipping crude from the Siberian city of Nizhnevartovsk would post an operating loss of $13 per barrel after costs and taxes are taken into account, analysts Dmitry Lukashov and Maria Radina said a note to investors.
"Every company in Russia is losing money on crude oil export deliveries or crude oil domestic deliveries," Lukashov said later by telephone. "If you don't have a refinery, you're losing money."
The view from the graveyard of empires
The continued growth and all the military, diplomatic and cultural muscle that flow from it have been based on cheap oil.But the era of cheap oil is over. It is over in part because of the huge and increasing new demands for energy by people in India, China and other countries that have climbed up the development ladder to the gardens of consumerism.
It is also over because oil is a finite resource. Experts quarrel vigorously about when global oil stocks will go into permanent decline.
Some point to the fact that since the mid-1970s the discovery of new sources of oil has not kept pace with new demands and say we are already on the downward slope.
Others say the tipping point when the oil lake starts to run irretrievably dry comes a bit after 2050.
Whichever estimate is right, the end is nigh.
CNBC's "Hunt for Black Gold" will Premiere on September 24th
"The Hunt for Black Gold" hosted by Maria Bartiromo follows the flow of oil from the moment it comes on line, into the supertankers, into the refineries and finally pumped into the consumer's gas tank. Bartiromo's special moves from Alaska's North Slope all the way to the Gulf of Mexico - critical areas in the national oil debate....Bartiromo's special addresses the issue of global thirst: which countries consume the most crude - you might be surprised. "The Hunt for Black Gold" also looks at the peak oil theory: How much oil is left? Is the planet running dry? Some of the foremost experts say yes.
World economic crisis - Australian AWL 2008 conference report
Peak oil: too many catastrophists, but production of oil is all downhill form here. Price of oil now driven by cost of producing the marginal barrels: deep water oil, e.g. Gulf of Mexico. No huge new oil fields to discover. Future of increasingly constrained energy production: need for sustainable energy. But no way capitalism can get there before the house of cards collapses.
Pre-salt ‘could double Brazil gas supplies’
Brazil's natural gas production could double with supplies from the country's recently discovered pre-salt offshore reserves, consultants Gas Energy Participacoes said."Jupiter, Tupi, Iara and Carioca (fields) have the potential to produce 120 million cubic metres per day," Marco Tavares, a director at the consultancy, told reporters yesterday at the Rio Oil & Gas conference in Rio de Janeiro this week.
Experts warn EU of climate change 'trade war'
Concerns are growing that import restrictions being mooted by the EU and other developed states as a means to protect their domestic energy intensive industries against 'dirty' imports from developing states like India and China could lead to a global trade war.
Arctic Ice Retreat May Be Harbinger of Climate Change
Warmer Arctic waters may release from the seabed methane locked up in compounds called clathrates, Sommerkorn said in a telephone interview from Oslo, where the WWF Arctic program is based. On land, the extra heat will help release carbon dioxide and methane, both greenhouse gases, from the soil, he said.``The loss of Arctic sea ice does not only have Arctic implications,'' Sommerkorn said. ``It has the potential to seriously amplify global climate change.''
Before becoming chief executive of the RCS, Pike spent twenty five years in the oil industry. His background hasn’t prevented him from calling for alternative energy sources to fossil fuels, and making criticisms that have embarrassed industry executives, latterly over the amount of oil lost to leakages.But the most intriguing argument is that we’re simply not told the truth about how long oil supplies will last. Conventional wisdom reports the oil reserves as 1.2 trillion barrels. There’s far more than the oil companies report. This is neither cock-up nor conspiracy, he says, but a combination of conservative reporting, a failure to understand probability theory, and consequently a lack of understanding of the figures actually mean. Oil engineers and planners have their own – these are figures we don’t see.
Were We Wrong To Fret About Peak Oil?
Remember when $200-per-barrel oil looked inevitable? Or, at the very least, a $100-per-barrel plateau looked certain? Plenty of oil analysts thought that was just over the horizon (yes, I was also guilty of this). But now crude futures are hovering down around $90, despite the succession of brutal hurricanes in the Gulf of Mexico—mainly due to fears that the crisis on Wall Street will knock more wind out of the U.S. economy and further dampen demand. So does that mean all the frantic concern about "peak oil" and all the apocalyptic blather about the end of mass air travel and so on and so forth was all totally baseless and wrong?
US lawmakers vote to end 26-year ban on offshore drilling
WASHINGTON (AFP) - US lawmakers Tuesday sought to overturn a decades-old ban on offshore drilling voting in favor of a new energy bill which has been spurred by spiralling oil prices.The new bill, which was put forward by the majority Democrats in the House of Representatives, was approved by 236 votes to 189.
It would allow drilling off the US coastline up to a distance of between 50 to 100 miles (80 to 160 kilometers) overturning a 1981 federal moratorium.
Under the ban, states had been prohibited from allowing offshore oil and gas drilling and exploration, protecting virtually the entire Atlantic and Pacific coastlines and sections of the Gulf of Mexico.
As global fuel prices rocketed earlier this year, US President George W. Bush had lifted the drilling ban in July, urging lawmakers to swing behind him in the country's search for energy independence.
Oil rebounds after 2-day tumble
LONDON - Oil prices rebounded Wednesday as traders viewed a two-day $10 drop as overdone and driven more by recent market jitters than by fundamentals.Sentiment got a boost on news that the U.S. Federal Reserve agreed to provide an $85 billion emergency loan to rescue insurance giant American International Group, helping stabilize global markets rattled by the failure of U.S. investment bank Lehman Brothers.
Evidence indicates that what appeared to be the Opec-induced supply shock was a delayed, catch-up response to rising inflation. Under demand stimulus from the Vietnam war, the US economy was growing rapidly. The prevailing Keynesian policy under Democratic president Lyndon Johnson was to tolerate a bit more inflation to reduce unemployment. With the unemployment rate below 4% from 1966 to 1969, and crucial prime-age male unemployment below 2%, inflation was creeping up.Economist Milton Friedman had warned from April 1966 onwards that the economy was overheated. Both he and Edmund Phelps argued that, as unemployment would return to its natural rate, inflation would also rise — in other words, stagflation.
Officials: 10 dead after U.S. Embassy in Yemen hit by car bomb
SAN'A, Yemen (AP) — A car bomb exploded at the front gate of the U.S. Embassy in Yemen's capital Wednesday, killing six Yemeni guards and four civilians, officials said. No American personnel were reported hurt.A second explosion followed the first blast almost immediately, a U.S. embassy spokesman said. A Yemeni security official said the embassy was hit by two car bombs, followed by heavy gunfire that lasted about 10 minutes.
Britain 'faces power cuts threat'
The UK will experience prolonged power cuts in about five years unless urgent action is taken now, a report warns.It said a third of generation capacity was due to be decommissioned by 2020, but was not being replaced fast enough.
The report, by nuclear supporting Fells Associates, said new reactors would not be ready in time, and questioned spending on renewable energy.
The Next Big Disruption: Peak Oil
What happens when the demand for oil clearly surpasses suppliers' ability to provide it? No industry will escape the disruption of so-called peak oil.
Report: The Peak Oil Problem and the CRM Solution
One of the many tines in a multipronged approach to solving the energy crisis could be the effective use of enterprise applications like CRM and Web 2.0 technologies like social networking to reduce the strain of transportation costs on businesses.
Shell restarts 26,000 boed in Gulf after Ike
NEW YORK, (Reuters) - Shell Oil said it restarted some 26,000 barrels of oil equivalent per day from the Gulf of Mexico in the wake of hurricanes Gustav and Ike."While Hurricane Ike did not damage our East area assets, we still have remaining repair work at some locations (Mars, Ursa, West Delta 143 and Cognac) from Hurricane Gustav that could not be completed before we evacuated for Ike," the company said in a press release issued late Tuesday.
Bristow Group says it sustained some storm damage
Bristow Group Inc., which operates helicopters that ferry workers and equipment to offshore oil drilling rigs, said Wednesday it sustained some base damage and lost at least four offshore refueling stations during recent storms in the Gulf of Mexico.The Houston-based company said its Galveston base incurred substantial damage from Hurricane Ike and preliminary assessments show flooding and likely some structural damage at its Intracoastal City and Creole bases.
US consumer prices ease on cheaper energy
U.S. consumer prices posted their first monthly drop in nearly two years during August as a weakening global economy cut energy costs and relieved some inflation pressures, government data showed on Tuesday.
Nigeria militants threaten broader "oil war" in delta
PORT HARCOURT, Nigeria (Reuters) - Nigerian militants threatened on Wednesday to broaden their "oil war" to offshore oilfields and announced attacks on a crude oil pipeline in the Niger Delta and another Shell-operated facility.
Militants: they have destroyed Nigeria oil line
LAGOS, Nigeria - Militants say they have destroyed an oil pipeline that crosses southern Nigeria in the latest attack to hit the restive crude-pumping region.The Movement for the Emancipation of the Niger Delta says in an emailed statement Wednesday that it destroyed the conduit in a rare daylight attack.
Russia harshly criticizes NATO visit to Georgia
MOSCOW (AP) — Russia's Foreign Ministry issued an unusually harsh condemnation Wednesday of the NATO chief's visit to Georgia, saying it showed "Cold War reflexes" and will further destabilize the region.NATO's support for Georgia after its war with Russia last month can only be seen as "encouraging Tbilisi to engage in new reckless ventures," the ministry said in a statement.
Colombia oil find could reach 100 million barrels
A British company has discovered an oil deposit that could hold up to 100 million barrels of crude, Colombia's energy minister said Tuesday.The find in Colombia's eastern plains could be the country's largest in a decade, Minister Hernan Martinez told Bogota-based Caracol Radio.
Petro-Canada Sees Surging Costs at Fort Hills Oil Sands Project
(Bloomberg) -- Petro-Canada, the country's second largest refiner, estimated costs to develop the Alberta, Canada, Fort Hills oil sands fields have increased by 50 percent since a project memorandum in June 2007.The increase comes from the price of construction materials, labor, project management and engineering, Petro-Canada said in a statement distributed today by Marketwire. An investment decision will be made in the fourth quarter after completion of the engineering and design plan, the company said.
Scientists, FDA face off over safety of BPA in consumer plastics
ROCKVILLE, Md. — A hormone-like chemical should be taken out of food packaging, especially baby bottles, infant formula cans and other products used by children and pregnant women, university researchers and consumer advocates told a Food and Drug Administration subcommittee Tuesday.The FDA has said that the chemical, bisphenol A, or BPA, doesn't pose a risk at the levels to which people are commonly exposed. BPA has been detected in the bodies of virtually all Americans tested.
But critics questioned why the FDA based that ruling on three studies funded by the chemical industry, all of which found BPA to be safe at current exposure levels. Hundreds of independent studies in animals and cells suggest the estrogen-like chemical poses serious risks.
Automakers downshift on loan requests
DETROIT — U.S. automakers have decided to back off from their drive for $50 billion in loan subsidies from the federal government and now are focused on persuading Washington to appropriate the money to back the original $25 billion promised in last year's energy bill.The strategy change came over the weekend after the government let Lehman Bros. file for bankruptcy protection rather than providing financing to help the investment bank find a buyer.
Solar companies feel fallout from Lehman bankruptcy
Fallout from Lehman Bros. Holdings Inc. Sept. 15 bankruptcy filing is hitting the clean-tech sector.At least three solar companies, including SunPower Corp. of San Jose, Evergreen Solar of Marlboro, Mass., and JA Solar Holdings Co. Ltd. of Shanghai, China, have issued statements in the wake of Lehman's bankruptcy about stock loans made to Lehman that could dilute earnings per share.
Tar sands - the new toxic investment
Shell and BP have been warned by investors that their involvement in unconventional energy production such as Canada's oil sands could turn out to be the industry's equivalent of the sub-prime lending that poisoned the banking sector and triggered the current financial crisis.The criticism came as a report was released yesterday warning of the potential financial risks of tar sands, and members of the UK Social Investment Forum met in London to consider a Co-op Investments campaign on halting oil industry involvement in the carbon-intensive oil projects.
Airports go for green with eco-friendly efforts
Logan's turbines are one of the most visible examples of the environmentally friendly initiatives being embraced by major U.S. airports. From low-flush toilets and hybrid taxis to solar panels and recycled coffee grounds, some of the largest airports are aggressively implementing green measures to save on energy costs and to generate favorable impressions among travelers.
KYRGYZSTAN: Melting glaciers threaten livelihoods
BISHKEK (IRIN) - The number of glaciers in Kyrgyzstan has dropped by 15 percent over the past 30 years, according to Kyrgyz environmental experts, because of climate change."The process of melting glaciers is a very serious problem for Kyrgyzstan because the main water resources are connected first of all with the glaciers," Anna Kirilenko, with the BIOM environmental NGO, told IRIN in the capital, Bishkek.
Obama and McCain: No Climate Doubt
While there are substantial differences between the climate and energy planks of the presidential candidates, it’s clear that Senator Barack Obama and Senator John McCain agree on something that a persistent cluster of comment contributors here (and about 20 percent of the country) rejects:That the threat posed by the buildup of heat-trapping greenhouse gases in the atmosphere from human activities is sufficient to justify a concerted, sustained effort to curb, and eventually deeply cut, such emissions.
Climate change already altering farm practices
More than 65pc of Australian agricultural businesses say they have perceived a change in the climate and 62pc say the change is affecting their operations, according to new figures from the Australian Bureau of Statistics.
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
Petro-Canada is talking itself out of the Fort Hills oil sands project.
I read in the WPIR thread, that memmel expects an attack on Iran.
I agree.
“Israel to Acquire GBU-39 Small Diameter Bombs”
http://www.defencetalk.com/news/publish/missiles/Israel_to_Acquire_GBU-3...
See also http://www.thailandnews.net/story/406111
“the International Atomic Energy Agency (IAEA) has issued a new report that while confirming the agency's full-scope inspection and verification of Iran's nuclear activities, discovering no evidence of any military diversion, is permeated with "serious concerns" and "outstanding questions".”
http://atimes.com/atimes/Middle_East/JI17Ak03.html
Stefan Simanowitz Westminster Committee on Iran: “Bush could still attack Iran”
http://www.guardian.co.uk/world/2008/sep/17/iran.usa
“Iran 'sending weapons to Taleban' “
http://news.bbc.co.uk/2/hi/south_asia/7616429.stm
“The United States has not yet issued a visa for Iranian President Mahmoud Ahmadinejad to attend the United Nations General Assembly later this month in New York”
http://www.earthtimes.org/articles/show/231777,still-no-us-visa-issued-f...
“Russian President Dmitry Medvedev said Friday, "We know that certain players are planning an attack against Iran.”
http://www.haaretz.com/hasen/spages/1020706.html
“And, perhaps, it is a prelude for more serious and dangerous actions in the near future, above all a naval blockade of Iran to choke off its access to, among other things, imported fuel.” (A naval blockade is an act of war)
http://www.atimes.com/atimes/Middle_East/JI13Ak01.html
Would appreciate your view, memmel.
Coupled with today's embassy attack in Yemen, http://news.aol.com/article/attack-on-us-embassy-in-yemen-kills-10/17736...
which incidentally appeared at the same time as AOL/Netscape homepage feature's Propeller's quote by Palin's that she expects to see Jesus' return in her lifetime,
http://www.propeller.com/story/2008/09/16/palin-quoti-will-see-jesus-com...
may I suggest that any October surprise by this White House administration would be right in keeping with the bizarro world that's unfolding (and has been unfolding) under their watch.
Note to PaulusP & memmel, an attack on Iran would serve as a nice distraction from Wall Street, a full meal deal dished up hot to satisfy the hungry appetites of every nut-case in America.
B/c if the GOP can get every nut-case to vote for them, four more years. Yippeeeee....
Hold on folks, this could be quite the ride.
It's rather obvious that Palin is a fundamentalist nut case. I'm sure she would like nothing better than to replace McCain as Fearless Leader.
http://www.salon.com/news/feature/2008/09/15/bess/index1.html
She is quoted as thinking Jesus will return during her life time and that the Earth is very young. Maybe she thinks she can walk on water too. I suggest she give it a go, preferably in the middle of the Atlantic Ocean. Woops, I forgot, there's still some whales left out there which could do a Jonah and gobble her up, spitting out the leftovers back on land. Darned.
E. Swanson
Meanwhile, the state of Alaska celebrates it's 50th birthday by drilling into ANWR...
Peak Oil averted (for, oh, about 3 months)
This is not an unusual belief framework. You'd probably be happier too, if you believed the same. If ignorance is bliss, and what you don't know can't hurt you, isn't knowledge best avoided?
Certainly it distracts conservatives from annoying questions about why their government is nationalizing businesses left and right and far right.
"Please, feel free to take a page from my handbook."
Palin as Mayor
If she didn't listen to city council, why listen to Congress?
And just wait until this lady is commander of the armed forces.
American Democracy: R.I.P. (1776-2008)
It almost worked...
The picture that is beginning to emerge is of someone who is very ambitious, demands complete loyalty of her staff, punishes anyone who disagrees with her, and doesn't care much for public scrutiny (Palin routinely uses a private Yahoo e-mail account to conduct state business because she believes that personal emails are not subject to subpoena).
Are we sure that Bush II did not have any illegitimate offspring that relocated to Alaska?
Unfortunately it appears that this is a common practice: the current administration took a working e-mail archive system and ditched it for one that doesn't work, canceled the program for a law-conforming "replacement for the replacement" at the point it when it looked like it would actually get implemented, and as added defense has government business conducted via non-governmental accounts so that "auto-delete after 30 days" policies can be used:
http://arstechnica.com/articles/culture/bush-lost-e-mails.ars
http://arstechnica.com/news.ars/post/20080512-white-house-insists-it-has...
Pallin is on record for her support of a $600 million dollar bridge from the mainland to her little town of 7,000 people.
http://hosted.ap.org/dynamic/stories/P/PALIN_BRIDGE_TO_WASILLA?SITE=VANO...
One of the busiest bridges on the East Coast is the I-95 Woodrow Wilson Bridge across the Potomac a few miles south of D.C. It is a new bridge yet under construction, but carrying a full load of traffic, projected to cost 2.5 billion and to provide passage of as many as 225,000 cars a day. It is six times the cost of Pallin's projected town bridge but might carry 70 times as many cars.
Pallin's town cannot afford to pay for the bridge with its small number of wage earners. It is a political project.
The math is a bit fuzzy. Probably the Woodrow Wilson bridge costs four times the amount of Pallin's bridge as there will likely be a wee bit of cost over run there and this Woodrow Wilson is almost finished and carries a hundred times more than the amount of traffic estimated to move in and out of Wasilla to Anchorage.
Which was recently hacked into by the hacker group Anonymous.
http://news.slashdot.org/article.pl?sid=08/09/17/1949222
commander in chief of the Red army? Closer every day
As far as I can tell everything is in or very close to in place for and attack on Iran. Hostilities could break out any day now. On the election side and attack before the election would be beneficial to Mcain given that Obama is a controversial choice for change. You don't change horses at the beginning of a shooting war and if anything Mcain is a far better choice than Bush for waging war.
On the financial side although the connections are probably convoluted the recent spate of financial problems at the same time that we had a major drop in oil prices and unwind of the carry trade from a strong dollar have to be playing a strong supporting role. I don't think anyone knows how all this is related but the drop in the price of oil was a strong earthquake happening to a weakened financial system.
The point of this is that my opinion is that this drop was not and accident of the market but instigated in conjunction with the Saudi's we are paying a heavy price for it and will pay and unknown price in the future since it acts like a moral hazard in many ways. This was not done just so a few Americans could feel better during the election.
So if war does not happen very soon with Iran probably before the elections we will be very lucky. After Mcain takes office it would simply take time to reset up the current military forces and financial matters may overwhelm any misguided moves with Iran and barring a war I think that Obama stands a very good chance at winning.
So the good news is its probably now or never the bad news is its probably now or never.
Thanks for this. As I see it "now" is until the end of next month, or perhaps till middle of Oct. , as it seems unlikely that an attack would be carried out very near election time.
Re Airports go green, the local Naval airbase her is fittet with several large arrays of PV as well.
I have noted previously I see a lot, relatively, of alternative energy devises at strategic sites. Locks, powerplants, industrial area's. Off course that may also be because these area's have no or little inhabitants, but still.
I think Sam Sleiman's quote in the article explains the primary motive for these "green" efforts:
"The perception is that airports are pollutants, and we wanted to change the perception."
These "highly visable" efforts are a step in the right direction, but I think their primary purpose is to help the airports/companies pretend to be doing something constructive.
Boston Airports "20 turbines" for $140k means they installed 20 toys on the roof. Upon further inspection, I bet those are "throw away" turbines designed to last 5 years.
And I wonder if the reporter bothered to look into the "estimated" production of any or all of these projects...
I cannot find a link, but recall Thomas Friedman in a recent interview saying that a real green revolution will have (financial) casualties - words to that effect. When everyone says they are green (greenwash - my added words) that's just a party - as in a party on dude.
Pete
The good people of Singapore don't have much faith in us....
Customers crowd AIG subsidiary in Singapore
Nouriel Roubini rendered a devastating condemnation this morning of how badly the Fed bungled the AIG bailout...
http://www.rgemonitor.com/roubini-monitor/253625/the_transformation_of_t...
This is what happens when you allow the same people who got us into the problem try to get us out of it.
One of the most disturbing features of the bailout is the government's total lack of transparency. Everything this government does is hidden behind a veil of secrecy. As Roubini notes:
So as an expat who has lived in Mexico for the past seven years, I say: "Welcome to little Mexico!" (Or is it big Mexico?)
In an interview back in 1990, the Peruvian novelist Mario Vargas Llosa called Mexico the "perfect dictatorship." It looked like a democracy, headed by a president who could not be re-elected, and was equipped with all the institutional bells and whistles usually found in democracies. But it was in fact not a democracy, but instead an oligarchy ran by a small, powerful elite.
So what are the trademarks of a "perfect dictatorship"? They are numerous, but the four main features are:
► There is the appearance of political competition, but in reality all political parties are financed by the same oligarchy. In the case of Mexico it was so blatant that at times the oposition parties received their funding directly from the dominant party (the PRI).
► The media is either owned outright by or bought off by the oligarchy. In Mexico's case, instead of censoring the press, the oligarchy kept newspapers afloat- and loyal- with cheap newsprint, floods of government advertising, and generous gifts to journalists.
► Government operations, especially those dealing with the economy, are totally opaque. Open meetings are not required, there are few open records laws and those that exist are not enforced.
► There is no accountability. Nobody ever goes to prison. Nobody ever loses their ill-gotten gains. As the Mexican writer Carlos Fuentes puts it: "Yet the deeper reason for the crisis has simply to do with democracy in Mexico. The secrecy surrounding our economic realities is related to the absence of something well know in Anglo-Saxon law for which ther is not even a proper term in Spanish: accountability, checks and balances."
In other words, dictatorship is acheived through collaboration, and not coercion.
And what are the fruits of the "perfect dictatorship?"
► There is one economic crisis after another. Government degenerates into one big soap opera.
► When crisis strikes, there are always "emergency" measures, always ample talk of "reforms".
► Despite all the flowery rhetoric, nothing ever changes. In each crisis the net effect of the "emergency measures" is the decimation of the middle class and a reconsolidation of the monopolies and stanglehold of the economy held by the oligarchy.
So welcome to little Mexico! The irony is that most thought it was the millions of undocumented immigrants from Mexico flooding north who posed a threat to the American way of life. But low and behold it wasn't them at all. They in fact were running away from the very system that America's ruling elite is doing everything within its power to impose upon the United States.
Yes-thus the priority of the USA/Mexico merger. TPTB absolutely drool when they see how Mexico is structured.
Now comes news of the next big bailout--The Federal Reserve.
That's right folks, the Federal Reserve is out of money. The Treasury says it will auction off T-bills today "to fund the central bank's operations to provide liquidity to financial markets."
http://ftalphaville.ft.com/blog/2008/09/17/16019/the-feds-run-out-of-money/
http://www.marketwatch.com/news/story/treasury-provide-cash-fed-market-l...
What does this portend? My guess is inflation.
Hard to say, but one thing is clear-the parasite has stepped up its bloodsucking of the productive economy greatly, with zero opposition. Naomi Klein as Nostradomus. This is almost exactly out of the Argentina playbook-that one resulted in the banks stealing deposits, aided by the government. Some of the banks involved, such as Scotiabank, received little or no MSM coverage here on the whole fraud.
Even including Eva (Sarah) Peron.
Don't cry for me Wasilla.
The playbook BrianT mentioned was in 2001-2002. Eva died in 1952.
The parallel is that Carlos Menem, a mix of Spanish and Turkish blood, betrayed the people of Argentina within 24 hours of being elected.
Lackey of the IMF. All the mixed bloods voted for him and promptly ended up in Villas Miseria.
Best wishes for NObama.
This kind of racism has no place on this site. Please do not post on TOD.
My guess is Hyperinflation.
But that was too easy. This is a re-run afterall.
Here's more:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aQ58hpS0fRH8&refer=home
I hear the price of gold is soaring.
http://ap.google.com/article/ALeqM5jND4r3B-VBZu2Ogg2_yzjYnPIP8gD938NVKO0
----------------
Gold prices surge after AIG bailout, dollar drop
..Gold for December delivery rose as much as $90.40, or 11.6 percent, to $870.90 an ounce in after-hours trading on the New York Mercantile Exchange after jumping $70 to settle at $850.50 in the regular session. That was the biggest one-day price jump ever; gold's previous single-day record was a $64 gain on Jan. 29, 1980. In percentage terms, it was gold's largest one-day advance since 1999.
Prior to the rally, gold had fallen 25 percent since surging to record levels above $1,000 an ounce in March.
-------------------------
So... let me get this straight: Lots of big banks make lots of risky loans and dress them up as not so risky loans through obfuscation. Next, bank loans start going bad when housing market tanks, they get caught with their pants down by the oil market & lots of banks start going under. Next, Federal reserve buys the failing banks. Next the Treasury department sells bonds to cover the funds the federal reserve used to buy banks with a lot of bad debt. The federal government is now using it's good credit rating to sell a bunch of bonds to cover the bad loans a bunch of banks with a now junk credit rating made.
I should be happy that the treasury is at least trying to raise some money from bailing out these businesses but you'd think the rating on the t-bills would be worse and the interest rates higher since the federal government is now basically speculating in bad bank loans. But of course, the American taxpayer ensures that the federal government pays its debts so I suppose it isn't quite the shell game it looks like.
The thousand (or is it half a trillion?) dollar question now is, with its takeover of AIG, did the U.S. taxpayer just become the insurance provider for $500 billion of toxic waste?
Good credit rating? Well...
Pressure building on U.S. debt rating: S&P
The funny thing is WWE referees are more legitimate than rating agencies at this point-Lehman debt had an A rating last Friday (absurd as that is).
I learned back in the dot.com peak that ratings agencies were lagging indicators at best, and often contrary indicators. It is laughable how you can go to any company's ticker after a hard day and see downgrades. Of what value can that possibly be?
If AIG ruins the credit rating of the U.S., you have to imagine that a lot of the national debt held in dollars is going to be moved somewhere else. And if the U.S. can't get any credit, on the bright side they probably won't be able to fund any more unnecessary wars, but on the dark side, they won't be able to fund much of anything else either.
Just remember kids, Bernanke and Paulson didn't get any congressional approval for their actions, they just went ahead and did it.
Actually, the AIG trip is illegal under USA law as far as I know (I might be wrong). If you are going to turn over the ownership of a public company in this manner, you are supposed to allow the owners of the company (shareholders) a vote on the matter-management doesn't have the right to circumvent the rights of owners. I am not saying it wouldn't have been done anyway, but this is effectively a government seizure of private property done without any legal authority as far as I can see (maybe some lawyers could elaborate).
I'm sure you have probably noticed that the Fed and the current Administration have completely bypassed the congress and judicial branches. I've seen numerous quotes from various senators claiming they can't do this without talking to congress and later not a peep and of course no action. So we have effectively lost to branches of our government and the system of checks and balances.
This will not end well.
The consequences of that are too scary to even contemplate.
That is nothing but a bunch of obfuscatory language for "monetizing the debt". Governments monetize their debt when they are ready to kick the inflation machine into high gear. We're past the point where tinkering around with the interest rate in 25 basis point increments is going to make any difference, which is why the Fed didn't bother to mess with it. Today, we just started a whole new ball game.
Obviously this applies to the upper muckety-mucks. Lower on the chain, we note that the Mexican police boast of a perfect record; if a crime is committed, someone is arrested and sent to the Casa Gordo. Problem solved.
ET, my emphasis was on economic issues, but your observation is yet one more of the features of the "perfect dictatorship." The number one priority of the criminal justice system in Mexico is to protect the state. The second priority is to protect the ruling political party, its leaders and certain other well-connected economic elites. The third priority is to operate as a huge, for-profit criminal enterprise. And the fourth priority is to serve and protect the people.
The end result is that you have some political/economic elite (and this is a true story, I'm taling here about the Niño Verde, scion to one of Mexico's wealthiest families) caught on video accepting a suticase with over a half a million dollar bribe from a prominent businessman, and nada pasa--nothing happens. He doesn't even lose his political post. The finance chief of Mexico City, with a yearly income of little over $100,000, is filmed gambling in Vegas, placing bets of $10,000 each or more. Again, nada pasa. Nothing happens to him, but the fellow responsible for filming and distributing the video to the media is sent to prison.
And an 18-year-old kid who ducks under the gate at the subway to avoid paying a 20-cent subway ticket spends six months in prison, while daily the police murder and kidnap and steal with impunity, all under an umbrella of protection provided by the prosecutors, judges and politicians.
When we talk about the criminal justice system in Mexico, it's like turning the clock back 200 years. Think of Jean Valjean in Les Miserables, sentenced to hard labor for many years for stealing a loaf of bread. Think of Monsieur the Marquis from A Tale of Two Cities who, after running over and killing a child in his carriage, charges: "It is extraordinary to me that you people cannot take care of yourselves and your children. One or the other of you is for ever in the way. How do I know what injury you have done my horses." And the reaction of the people:
And then Bush goes and dumps $1.5 billion of U.S. aid atop this fetid pile of dung with his Merida initiative. It would have been much simpler to just write the checks directly to the drug lords.
The criminal justice system in the United States certainly isn't as bad as that of Mexico--yet. But there is no doubt in my mind where the actions of the current administration lead. I've seen it, and I've lived it. And let me assure you, it ain't pretty.
The American people have no idea what they are forfeiting with their complacency.
I remember the Blackwater mercenaries deployed in New Orleans post-Katrina, and their behavior. It convinced me, I was no longer an American.
And I felt great sympathy for the Iraqis who hung three of them by their heels from the bridge.
Alan
I spent some time in Mexico when I was younger. The first thing that struck me was how very rich the upper class was. The second thing was how they called out army platoons (with bayonets) to surpress any kind of disturbance - and how totally corrupt the police were.
"Rule of Law" didn't just happen by accident in English history. There has been a long struggle to limit the powers of rulers going back at least to "Magna Carta".
Bush declared himself (on multiple occasions) to be beyond the Constitution and nobody called him on it. Now the stage has been set for some real crazies to take control.
Peak oil, financial meltdown, and climate change are stressing the system all at the same time. Perfect for causing the sheeple to panic and crowning a dictator.
It could happen. I've heard it said that freedom is like the air we breath--you really don't miss it until it's gone.
As Eric Hoffer observed in The True Believer, "Unless a man has the talents to make something of himself, freedom is an irksome burden..." I wouldn't be too sure that too many really want any more freedom than perhaps the absence of overly grating interference when they go about the mindless routine business that is all they care to carry out, or perhaps are even capable of carrying out, in this life. And even at that, if you simply mutter the magic incantation, "safety", most will tolerate grating interference almost without limit.
I mentioned this elsewhere. You would be surprised at the number of middle class Indians who crave for a "benevolent" dictator to come and just solve all our problems. Apparently all our problems are caused by democracy and too much freedom.
I always tell them that we have failed democracy and not the other way around. I also ask them to provide me a list of "benevolent" dictators. The road to hell is always paved with good intentions. Polpot wanted to make Cambodia an agrarian paradise.
I somehow get this feeling that people really don't ever want to grow up and take responsibility. Nice to have Daddy Dictator take care of you all your life.
Srivathsa
And the d@mned thing about it is, if we are going to go socialist, there are a lot of different companies that would be a lot higher priorities on my shopping list for nationalization.
Yeah. I say we do like Hugo, and nationalize the energy companies.
Hugo's incompetance has been a huge boost to the Alberta economy.
Go Hugo!
Bush tried that with the Iraq National Oil Company. He screwed that up too.
The article 'Peak Oil Postponed' above make my blood boil.
Not that it is complete rubbish by some ivory tower academic who clearly failed geology 101, but that it is a headline comment piece on a popular technology website that has had feedback comments turned off to avoid the possibility of having his ego deflated by acquaintance with physical reality.
And I speak as a (lowly) associate of the Royal Society of Chemistry.
He may have spent 25 years in the oil industry, but a guarantee you he's never put his name on a drillsite.
FF
I guess I got angry at being talked down to in an article which reduced peak oil to a question of putting more straws into the milk shake. And I'm sure that phd researching into the fluid characteristics of water in zero gravity has given him real insights to our current predicament...
And then we have pesky problem case histories like a couple of regions developed by private companies, using the best available technology, with virtually no restrictions on drilling, Texas & the North Sea:
http://www.theoildrum.com/files/TexasAndNorthSea.png
I think that the guy is assuming that there is just as good a chance that we would find another East Texas Field after 1972, as there was that we would find it before 1972 (actual discovery date around 1930, basically by accident). We don't stop finding oil fields post-peak, but we tend to find the big fields first, and the smaller fields that we find post-peak can't offset the declines from the older, larger oil fields, which is why, IMO, we can compare Saudi Arabia to Texas and the world to the North Sea.
He says "Oil engineers and planners have their own – these are figures we don’t see"
Strangely enough, the oil engineers and planners I know ( a few ) as well as some oil workers (more), are the only people I know that accept peaking and declining of oilfields. Most believe we are near imminent world peak.
That's been my experience as well. People I've met, geologists mostly, that are involved in the oil industry seem to be pretty aware of what's going on. It's like when Feinman polled the NASA engineers vs. management about what the odds were of a space shuttle exploding: the managers all rated the probability as 1/100,000, whereas when he polled the engineers they said something like 1/100. The managers don't have a good idea about the actual workings of the projects they are managing. (Incidentally, the actual odds are working out to be about 1/100.)
Have we not been told in recent weeks that the real movers and shakers on Wall Street knew the worst was over, that the fundamentals were strong, that each bailout in turn would be the last one needed to fix everything?
Are you suggesting that the "experts" have a general credibility problem?
I don't know, maybe the people who define "expertise" have a credibility problem.
That's the same song that was sung from 1929-1932 and repeated occasionaly until 1941.
Corporate strategy and bubble dynamics. Sweet!
"The article 'Peak Oil Postponed' above make my blood boil."
That's why I tend to skip those kinds of articles. It's not worth the frustration - especially when they are too cowardly to allow comments.
Thanks to reading the comments here I was spared wasting time reading his article. I do find his reference to "oil engineers" most enlightning though. Honestly, it made me laugh. No one in the industry uses that term. Not even the secretaries. I work with petroleum engineers, not "oil" engineers. And everyone in the oil patch (except the drilling crews for the most part) have understood PO for at least a couple of decades. We just call it the "reserve replacement" issue. Even when you here someone like the CEO of Chesapeake give his "ra ra all is well" speech it's meant for only the shareholders...present and future. I promise you that PO crosseshis mind a dozen times a day. Moor specificly, PO/PNG for his company. PO is the main reason that his comoany (as well as mine an others)is going balls to the wall after unconventional NG. It's the only play that offers the possibiltiy of reserve increases (except for production/corporate acquisitions) y-o-y....which is an absolute necessity for every public company.
He may be wrong, but his point about statistics is valid. You can't add a bunch of P90 numbers and get a P90 result. I think it would be good for the folks on this site to address the issue rather than just insult the guy, or offer anecdotal evidence against his point. Why did he fail Geology 101? Be specific about factual errors - please!
People used to come here for some non-corporate insight into the oil supply situation; not just to get a particular world-view confirmed. I urge TODers to address his issue directly. Is there evidence that most oil reserves are not in fact given as P90 numbers? What about the issue of mis-reporting of OPEC reserves? Can we get some real data and insight, please?
If I just wanted an echo-chamber for my own worldview I'd just listen to Fox News, or DailyKos.
I preferred it when TOD posted detailed analyses of Ghawar, or explainations of longwall mining practices, etc. That was actually useful!
This is the DrumBeat. Basically an open thread. Don't click on the DrumBeats if what you want is in-depth analysis. That's not what they're for.
We're a bit off our stride at the moment. The financial crisis, Ike, and the upcoming ASPO conference means we're not posting the kind of articles we usually do. Frankly, it would be kind of silly to post, say, an in-depth analysis of Saudi production. People are only paying attention to AIG and Ike at the moment.
It has been discussed here:
http://europe.theoildrum.com/node/4197
His point that you can't add individual P90 numbers to get a P90 number is valid, but my personal suspicion is that even the individual fields "P90 numbers" don't behave like idealised P90 numbers, so his "more mathematically correct" approach is just as unlikely to match the real world. (The conclusion might still happen to be right, but not for those reasons.)
You can read the thread for other views.
Economic crisis, indeed. I wonder if those far more knowledgeable about stock markets could comment on the following occurring as I type:
S&P is bouncing around between -1.5% and -2.0%. Either there is a glitch or something seems mighty strange: At every low, there is a massive influx of trades, escalating upwards in volume: 71m, 72m, 73m, 75m, 95m... and NOTHING in between. This is all via Yahoo! Finance chart. I'm assuming the in-between numbers are not actually zero, but are so small they don't register with this software. Still...
Edit: Criminy! 239m and 358m!
Is that a normal pattern, or is this evidence of the existence of the more nefarious version of the PPT? Or is this program trading? To me it looks for all the world like a market trying to crash and not being allowed to.
Inquiring minds want to know what you think.
Cheers
FURTHER EDIT: OK... FOUR straight inputs of 658,073,280?!!! WTF is going on? That followed by 663m?
And with all that the market can't get above -1.2% or so? Where the hell would it be without this series of massive and bizarre trades?
EDIT: Just after 10:30 S&P, DOW and NASDAQ all dove below 2%. Currently -2.61, -2.25 and -2.69.
Holy mother, gold up $48 today? Wasn't paying much attention to the markets today until I read your post.
The TED spread is going through the roof. It was up 50% yesterday, another 32% today to 289 basis points. Historical averages are about 1/10th of that. All the measures of risk & fear are rocketing upwards. We are very close to the edge today.
Whoah! I saw it going up yesterday and wondered if it was a transient spike. It seems like every time that TED spread has peaked in the last few months we've had a major "correction" to the stock market. Is this spike an effect of the Lehman news or is it an indicator of worse news that's going to come?
It is primarily a sign that money flows have seized up. This is partly a reaction to Lehman & AIG and partly fear. The banks don't know who is solvent and who is not (they probably can see their own balance sheets and are afraid the other banks are just as bad off), so they're unwilling to lend to each other.
Banks Scramble for Funds as Crunch Spreads
Oops. High TED spread indeed.
Market madness today. Gold, silver, treasury bills...
The SEC is cracking down on naked short selling. Worried about scenario Denninger laid out last night, maybe?
He is smart-Morgan Stanley down 40%, GS 20% today. The irony is that all these guys are/were the biggest players in this theoretically illegal (no one is ever penalized) activity.
Roubini recently predicted that Lehman's collapse would trigger a run on the other Wall St. investment banks.
If they'd done that a few days early it might have saved AIG, too.
Well, the massive trade volume surges have continued with each bigger than the last and very little between. The latest was 3.884 BILLION. This is on the S&P 500.
Make that two over 3.9 billion as of 11:36 AM.
So, nobody knows if this is all unusual or not?
Cheers
Apologies to John Lennon's Estate:
Imagine there's no banking
It's easy if you try
No savings & loans
No credit unions either
Imagine all the people
Living for today...
Imagine there's no credit
It isn't hard to do
Nothing to lend or borrow
And no interest too
Imagine all the people
Living without debt. . .
You may say it's a nightmare
But it's where we're headed
I'm afraid someday you'll join us
And cash & barter will be the only way. . . .
There's an interesting article that Paul Krugman linked to today in his blog:
McCain's Dangerous Do-Nothing Economics
That's absolutely hilarious, I had no idea.
I swear, I don't know if a voice recording of Herbert Hoover's 'fundamentals of business are sound' speech exists or not, but if it could be dug up in some archive and juxtaposed with McCain's speech, what a perfect commercial it would make!
McCainvilles, Palinvilles. . . . McPainvilles!
You guys laughed at me when I talked about "Tiny Houses" in 2006. They look more and more interesting with time. The new definition of "Single family homes?"
http://www.tumbleweedhouses.com/
McPainvilles. I think you may want to copyright that WT!
"Common wisdom" in New Orleans is that a single person needs about 400 ft2 and a couple about 600 ft2 to be comfortable. Personal exceptions, of course.
Small, but not "tiny". And FAR smaller than new construction norms in the USA.
Alan
The biggest problem I've encountered is not overall dwellings that are too small but individual rooms being too small with the result that the temperature swings wildly from uncomfortably too hot to quickly too cold once you open the windows. A small house is not a scaled down version of a large house, it needs to be designed in its own right.
Unfortunately, at least in England, the number of rooms in a house is generally taken as proportional to its desirability so idiot "property developers" ("flippers" in US parlance) insist on moving and adding walls to squeeze in extra rooms (even just en suite toilets in tiny houses where it doesn't make sense). I sometimes wonder how much of the housing stock has been damaged by their meddling.
The size of a house is a really lousy metric to judge a house by.
Instead, judge it by its energy consumption.
i.e. a 400 sq ft tar paper shack will use a whole lot more energy than a 1600 sq ft super-insulated house. Also, a well built house of durable materials may last 200+ years and some of the new crackerboxes built with cheap crapy materials won't survive long enough for the original owner to get it paid for before it self-destructs.
The long term answer to many of our energy problems lie in building (having/requiring) buildings designed to last for hundreds of years and super-insulated to keep energy usage to an absolute minimum.
My 2 cents worth of views on the subject.
Yep, there's nothing wrong with outbuilding your neighbors... Especially along the gulf coast...
Caption: A single home remains standing amid a scene of devastation in Gilchrist, Texas. Photo: Reuters
I saw that photo before, and wondered why that house is still standing. Better construction? Better site? Or just pure luck?
There was a house in a subdivision on the Big Island of Hawaii that survived a lava flow. It's funny, because you hear folktales like that all the time. The volcano is erupting, and people who respect the volcano goddess, Madame Pele, by offering a sacrifice or being polite to a rude stranger or hanging ti leaves before their homes are spared. The lava flow parts and goes around their homes, while burning up all their neighbors'.
In reality, though, it sucked. The whole subdivision was covered with hard black lava, and there the house was in the middle of it. No roads, no electricity, no water. No neighbors. But absolutely no damage to the house or property, so insurance wouldn't pay.
C'mon guys. Photoshop. That house isn't even missing shingles. In addition, it appears to be freshly washed and painted. I don't think so...
That is a Reuters photo. If it's Photoshopped, all the news services were fooled.
Honestly, this version of the image is so low-res, how can you tell if there are shingles missing or what the paint job looks like?
I'm all for healthy skepticism, but geez. It's gotten to the point that every photo is suspect of being Photoshopped, even if there's little or no reason for it.
Floods can do weird things. In Western NC ca 1977 there was a big flood on the Cane river. I remember one farmer's house on the river was washed away. In his front yard was a rototiller that had a washtub over it for protection from the weather. Rototiller and washtub remained intact and unmoved while house behind it was gone.
There's a much larger and clearer version of the photo here.
And here is credit for the photo:
Remarkable that this house is still standing with so little damage. I wonder: it is still located on the correct piece of land? Look how close it is to the foundation of the lot to the left, and also I would think the back of the house should be facing the bay to get the optimal view, not perpendicular to it. Lucky? owner, but I bet driving 40 miles to get a carton of milk now won't be much fun...
It was probably facing what used to be a street. A sidestreet off the obvious road you can see in the photo. The deck on the side of the house looked out over the ocean.
It does look like the patch of land it's on was spared for some reason. You can still see the lawn to the right of the house, while it's washed away everywhere else.
Also notice the grass where the missing right side chunk of the driveway would normally be. You would expect to see dirt here. My guess is the stout concrete foundation became like a surfboard and moved this house over from the right side of this photo, but I could be wrong.
Still examining the photo--I still think this house has surfed from the right side of the photo. You can still see the missing right chunk of the driveway on the far right patch. Also notice how the house is on top of the former fence footing of his neighbor's property [see left edge of concrete driveway plus the exposed footing]. Possible scrape marks on the patch of lawn to the right as the house moved over it? I now tend to agree with Leanan that the house didn't turn 90 degrees, but I still think it has surfed off the original location. Glaciers, which are magnitudes bigger, have no problem moving if given sufficient bottom lubrication and an appropriate shove....
Also the local tv helicopters have all flown over this house providing live video and some crews have visited it on the ground. It most definitely is not photoshopped.
I am reminded of an interview with the owner-builder for the only house in St. Bernard Parish to escape both water & wind damage.
He was told hurricane straps were a good thing, so he put on a lot of them. He was told that gluing joints was a good idea so he used a couple of cases of Liquid Nails. He used some screws and some nails, and tried to put an extra one in.
He was told to elevate and added eighteen inches.
"I guess I have wasted a lot of money on insurance over all these years".
Best Hopes for over spec construction,
Alan
CNN has the answer to the mystery. It is real, not Photoshopped. And it's not a fluke.
The owner (Pam Adams?) was interviewed by Anderson Cooper last night on CNN (I've had the impression Cooper has been wanting to cover Ike more fully than up to now from certain commments he's made). She's visited the house and it is completely wrecked. Anderson asked her about neighbours and she said she knew of a few who had evacuated like her and had visited the scene with them. Unfortunately she seemed to speak of the rest of her neighbours in the past tense and said she would break down in tears if she said any more.
I feel the number of people reported missing is so frightening that nobody wants to mention it. However these numbers are always too high but I am sure the official death toll will rise.
It's Gandalf's house, obviously.
And it remains unfathomable to me why the USA wants to cover up this natural disaster. Show the pictures and video to most people worldwide (and even in most of the USA I believe) and they gasp in astonishment.
Is it because of oil industry damage?
Is it to protect the insurance industry?
Are there more problems at the flooded
germ-warfarebio-defence lab than admitted?Or something even worse?
Could Ike make it harder to justify a strike on Iran at this time?
Density, and with it walkability and bikeability plummets with increased foot print (house + yard) as well as the increased % of urban area devoted to the automobile (50+% in Phoenix for example).
The "prime area" around each Urban Rail stop or station is about 1/4 mile. Prime targets for TOD, with walkable neighborhoods (everything within walking distance or a stop or two away).
VERY hard to do that with large isolated homes, with half of the land area devoted to the car/SUV.
Alan
In the real world you've got a very long row to hoe. As long as high density remains strongly associated with incessant racket, lousy schools, muggings, and other negatives, low density will remain an aspirational goal even should it become largely unaffordable. Until and even beyond such a time, said plummeting may well go on being widely seen as desirable. After all, despite a variety of ingenious punitive fuel and car taxes and car "inspections", enough Europeans seem to aspire to lower density (yes, not as low as in the US, there simply isn't the room) to clog many of their peripheral streets to a near standstill. And back here in the USA, 'we' seem set to go into the near to medium-term future with the urban (i.e. non-urban) structure we have rather than with what we may or may not come to want, since the financing required to change anything seems to be evaporating faster than the proverbial snowball in hell.
One must also bear in mind that pedestrians and cyclists are widely seen as obnoxious obstacles which many people would like to outlaw, as they have in effect successfully done in places like Pennsylvania suburbs, where so many crosswalks are forbidden to pedestrians on pain of heavy fines that it is legally impossible to get much of anywhere on foot, and in certain cases even to ride the bus (think topology: how do you complete your round trip when it is forbidden to cross the street?) Even here in Madison, Wisconsin, the Berkeley of the Midwest, with more pedestrian/cycle adaptations than most places, we have a certain notorious driver of a dark-green SUV who likes to run cyclists off the road, and AFAIK impunity rules and he still has his license...
The perceptions are the long lasting result of a variety of government policies, and perceptions will change as reality changes.
Gangs are becoming entrenched in LA and other suburbs. Crime and drug dealing in others.
My neighborhood has a delightful quality of life and a truly diverse (and usually interesting) population. We talk to and help each other.
Surveys show that a large minority of Americans (perhaps 30%) want to live in TOD today. Satisfy that market demand (and lower USA oil consumption and CO2 emissions), and let the emptying suburbs swim as they can with much of their population gone (and typically the most desirable % of their population). And as Americans are herd animals when it comes to housing, once the herd leaders go towards walkable and bikeable communities, all but the stragglers will follow.
So build enough Urban Rail, zone for TOD and let "nature take it's course" (just no rescue packages for suburbia, let it die).
Alan
Well, I for one think you are on the right path.
Micro Dwellings
http://www.n55.dk/MANUALS/MICRO_DWELLINGS/micro_dwellings.html
Drudge Report Headline:
http://news.yahoo.com/s/ap/20080916/ap_on_bi_ge/bank_deposits_safety
Federal bank insurance fund dwindling
http://www.npr.org/templates/story/story.php?storyId=94617079
Perhaps it's time for the U.S. to swallow the same bitter medicine that the IMF and World Bank have shoved down the throat of developing nations from Argentina to Jamaica. One of the first measures is to shut down giveaways like Social Security and Medicare. Loan guarantees for students attending college, that'll have to go also. Under the IMF programs one of the first steps are massive firings of government employees...De-Baathafication, sound familiar?
I'm sure all of the disaster capitalists are licking their chops as the formerly great U.S. economy comes tumbling down.
The US could use a little IMF "tough love". The Disaster Capitalist could them move in and take everything from the weakened population.
It didn't work in Argentina (Chavez helped pay the bill, and told the IMF "get the f***k out of here , and never come back.")
Of course, Argentina is a politically literate country with a well educated population, and great resources.
The US is politically illiterate, with students who cannot locate Argentina on the map.
Aren't you being a trifle harsh here?
Geography Test
Only 6% of Americans aged 18-24 can't find the USA on a map.
And only 21% can't find the Pacific Ocean.
Geez, the Pacific Ocean isn't all that easy to find on a map, is it now ** :)
** (if you're drunk and blindfolded and the lights are off)
He said they couldn't find Argentina on a map, not the US.
I think he was being a bit more than mildly sarcastic. I read in a book "The Dumbing Down of America" that 90% of an Ivy League undergrad class (Upenn I believe) did not know the capital of Portugal.
Srivathsa
Hmmm...not so fast. Your Salon writer says,
Up to a point, Sinclair was partly right. But life is too short to be spent constantly looking up banalities, even with the help of Google (or sometimes despite that help - in some cases, if you fail to stumble upon the right jargon-word or jargon-phrase, Google will drown you in irrelevancies.) You really do need some measure of working knowledge in order not to bog down in constant repetitious research. Modern tools do ease that requirement, but today's more complex world strengthens it; I'm unsure which prevails but I suspect the two effects largely cancel out.
Oh, and (again from your Salon writer) I'm not quite buying Miss Upton's "nervousness" line. You really had better learn to cope with that before you go on stage at a public event, especially a major one. Otherwise the affair risks coming to a bad end, in the worst case a messy end involving a sickness bag, and I assure you I'm not joking about that. So if "nervousness" was really a problem rather than a mere empty excuse, then perhaps the pageant promoters are letting their participants down by failing, at the very least, to point them to where they can take a bit of suitable training.
Was not Bush II elected on the promise of reducing the size of government to something you could drown in the bathtub?
He has been successful beyond his wildest dreams.
And just how has he reduced its size? All the figures I read show its increase.
karlof1, methinks BOP was being sarcastic...
translation... Bush will be remembered for shrinking the US government by bankrupting it:-)
Who do you think is calling the shots here. LOL
But people are whiners and paint false images, in Argentina they still have Social Security and pensions to this day and they even get COLA's and basic health care.
Of course if they want a leisurely life on welfare they are SOL as it should be.
Another day, another MSM article in the spirit of THE ONION-the Rothschilds are not supporting Obama because he is an "elitist" http://politicalticker.blogs.cnn.com/2008/09/16/prominent-clinton-backer...
And she thinks she's going to get better treatment from John McCain? If Obama's an elitist, what's Cindy McCain? I love the sweet taste of hypocrisy in the morning...
"Elitist" is code for "educated liberal" -- it has nothing to do with money. The Republican establishment -- perhaps fearing that they are about to be blamed for gutting the US economy -- have reinvigorated the culture wars in hopes of obliquely laying blame at the feet of the Liberal Eastern Establishment. The groundwork was laid at the Republican Convention.
I realize that Lynn Forester de Rothschild was a Hilary backer but she is obviously nervous about having someone who doesn't belong to her "club" in the White House. The "elitist" charge is now a convenient one since the Republicans have taken pains to paint Obama as an elitist. All this really proves is that money is thicker than party loyalty.
Hoover could easily have called FDR an elitist. Voters in those days realized that pince-nezes and cigarette holders were irrelevant in the face of starvation.
Automakers downshift on loan requests
They're worried about getting "only" their promised $25 billion instead of $50 billion? I hear a violin playing for these guys somewhere. It's hard to have sympathy for companies that repeatedly lobbied not to have the corporate fuel economy standards increased, especially since if they did that they would be profitable right now. but then again, maybe these companies really would have a hard time getting a loan from anyone else, they're not very profitable lately and in any case, it seems the banks are going under/getting nationalized one by one.
I wonder what the USA wind power industry could accomplish with 25 billion in support (or solar). The crazy thing is this 25 billion is a pittance compared to what they have already thrown down the Wall Street rathole.
Heck, you could even give me $25 billion and I'd probably manage to get a fuel efficient car mass produced in some fashion. I think we should use that 25 billion to invest in mass transit. Fuel efficiency AND not bailing out pig-headed corporations.
All this is not rocket science-I tend to believe that the most powerful in the USA feel it is more profitable to gut the country, rather than raise it up.
BrianT "All this is not rocket science-I tend to believe that the most powerful in the USA feel it is more profitable to gut the country, rather than raise it up."
You are so right, I could not agree more. Just like in the Russian Revolution (or the French), the most powerfull cannot wait until their mansions are worthless; their yachts are worthless; their Picasso's are worthless; their private jets are worthless; their money is worthless; their diamonds and gold are worthless; their courtside seating to the Laker's games are worthless; when they have so gutted the country that they are now living like peasants (or dead). Clearly this is what they want, and this is what they will get.
The rich still have their mansions, their yachts, their Picassos, their diamonds and gold, and their private jets. The nominal cash value of material wealth is irrelevant unless you intend on selling them -- or buying more. In the latter regard, a nice round of deflation that lowers the price of things can be quite a nice buying opportunity, allowing one to add to one's stash of mansions, Picassos, and the other things.
Oh, and the truly rich don't go to Lakers games.
Just a couple days ago- about 200 million US for flying pigs http://www.guardian.co.uk/artanddesign/2008/sep/16/damienhirst.art1?gusr...
Gutting the country means selling off all the public goods that you and I use. It's happened all over Latin America and other IMF disaster areas. Many luxury goods are portable and have global markets. The rich never imagined that they could screw things up so much that they could no longer sell their yachts and gold to Dubai.
Give me the 25 billion and I'd fund school lunch programs, disability services, and tennis shoes. The rest I'd spend on putting tall speed bumps on every road in town spaced 25 feet apart. The latter should help facilitate the use of those tennis shoes.
Technical Analysis (TA) – Sixth Post
Oil is up today after yet another low yesterday. The oil inventory data is due today, and it is bound to be bad. If this is a V bottom, this would be a good day to go long. On the other hand, the Smart Money (SM) loves to whipsaw people after long trends. Also, we have seen how little news matters when it battles “money.” I guess that most have read the rumor that the Saudis are going to reduce production.
One theory is that the Saudis were the ones who destroyed the Soviet Union by lowering the price of oil. Now, the price of oil has crashed and the Russian stock market is in the tank. Do you think the price of oil might be kept down until the Russian economy has been totally toasted or maybe just until it is “medium rare”?
So, what does TA say about all of this? My program is an end of day (EOD) program. And, I am only getting a strong short signal on the breakout strategy (1 out of 5), and a weak “measured gap” short pattern.
I had a decent limit sell order on my USO puts yesterday, and someone bought them. I now have no position. Because the price is moving up today, and I don't have any long signals (EOD), I'm not buying anything today. Consolidation patterns are the norm after long trends, and I hate to get whipsawed.
For my TA, I am using OmniTrader (20-day backtested) with the pattern recognition module (short, med, and long), and I trade USO as a proxy for oil. I am using the standard strategies for breakout, trending, and reversal (all filtered and non-optimized), one that I created with all 75 systems, and another one I created with only the volume systems (both optimized and minimally filtered). Once again I have put myself out as a fortune teller – a sure way to end up looking like a fool. I am not an expert at TA, I am a beginner. Please add to this analysis, and don't feel shy about flaming me if I said something dumb. I definitely want to stay out of the group of the “stupid people losing money.”
Generaly.
I got one insight from all that. The energy gain (in aggregate) from Saudi Oil is probably higher than Russias - which tells me unless there are more hedge fund liquidations or demand falls off a cliff, that oil prices aren't going much lower:
Today's Moscow Times article states that:
"The country's oil companies are losing money on crude production after a decline in prices pushed the market value of a barrel of the Urals blend below the cost of getting the fuel to consumers and paying taxes, UBS said Tuesday."
And the treadmill picks up speed...
If I'm right about the attack on Iran then the target price for oil is around 70-80 dollars.
I'm guessing we might see big announcements of a surge in oil shipments from KSA to help the US get back on its feet or one other move.
As far as war we would expect another surge of shipments anyway as the Gulf states clear out most of their inventories in case the Persian Gulf is blocked.
So I think this rally in prices should get busted or stomped on hard. Gold will probably get a smackdown also.
However I think this is getting close to the end I gave them to the middle of Oct or so before fundamentals and economic conditions will force oil and gold up and the dollar down.
But one more punch is left.
Looks like more consolidation is happening. Now it is the Fed and the Treasury: http://www.nytimes.com/aponline/washington/AP-Treasury-Fed-Auctions.html
Hopefully we can reduce payroll costs by eliminating redundant positions.
Chris
NEWS RELEASE; Due to an unpresidented shortage of chickens The Fox will now have complete access to the hatching room to insure a continued supply of chicks in order to address this crisis. The Fox assures everyone that the fundamental supply situation is sound and there is no need to panic.
unpresidented
Subtle :-)
Yes, for the last 7.8 years we have been unpresidented !
Alan
This Argentina: The Sequel isn't funny anymore.
I'd like to suggest further consolidations: Now that we own a piece of AIG, I think we should place all of our insurance activities in that vessel and then spin it off. Crop insurance, flood insurance and nuclear accident insurance liabilities can all be shifted to AIG with their actuaries given the ability to set premiums. We'd lose New Orleans and most of Entergy's unsafe fleet as uninsurable but we would no longer be faced with the problem of immediate insolvency of the federal government should the liabilities come due in a big way. AIG should be able to pay a portion of a one time payout after it is spun back out to the private sector.
Chris
My daughter was on track to have her graduate school student loans paid off within seven years. She was a little bummed out when I told her that she needed to add about $85 billion to the loan balance.
WT, tell her not to worry.
With hyperinflation just getting started, she will be able to be a waitress and her tips in one afternoon alone will cover her current debt.
If you can't afford silver or gold, buy the "For ever" Postage Stamps instead (just kidding, sort of).
Let's offer her a better deal: call in her loan now and force her to liquidate. She shouldn't be getting the benefits of the low interest rate if we are going to inflate our way out of the current situation. And, it is not raising taxes if we are just penalizing elitists for blowing money on education.
Chris
westexas - you are better than that. (I thought)
True.
I should have pointed out that her generation is on the hook for the hundreds of billions in borrowed costs for the Neocon's invasion of Iraq--plus the trillions of dollars that McPain plans to spend staying in Iraq for "Maybe a hundred years." Before too long, I expect to see something like a student loan protest march on Washington.
BTW, CNN is now reporting that Obama is doing better than Kerry did in 2004 in every single battleground state.
We really need a "This Day in The Great Depression" website that would allow us to read typical news from a roughly equivalent point in 1930 (assuming the housing collapsed served as 1929). I bet we'd be shocked at how deluded people were about how soon things would get better.
I am curious where the drops of the DOW from this week compare to the shellacking during the Great Depression. Who has the comparison stats?
First, you should ask how the modern DOW compares to the DOW of the depression years. Who decides which companies are in that particular index and how their stock price movements affect the DOW? Is Rupert Murdoch involved? :/
The Dow now is not comparable to the Dow of the Depression years. The components are totally different. Components of indexes are regularly rotated around for a variety of legitimate and illegitimate reasons IMO. The NASDAQ is the most notorious offender.
They all do it. Mergers and bankruptcies are legitimate reasons. But lots of times stocks are replaced simply because they are not "performing" and make it look like investing is stocks is not a good move.
I kept track of changes made in the NASDAQ 100 for a few years at one time. I could hardly believe it. As soon as a stock fell out of favor, out it went. In came the next hot one that had doubled or tripled. The Dow even stooped to this when it added Microsoft and Walmart, belatedly as it turned out.
Comparing the Dow, the NASDAQ or even the S & P indexes over time is totally fallacious. Their components are not the same over time. The resulting distortion makes stock investing look more rewarding than it is. That is one reason I don't do it anymore.
Things that are different can not be compared, added, subtracted, multiplied or divided. These indexes are regularly used to calculate return on equity investment over time which is the dividing of two different things. It is silly nonsense, but widely done anyway and also widely believed.
It is as silly as a farmer trying to increase his animal return on animals investment by replacing 10 cows with 50 pigs. He reasoned that since 50/10 was much larger than 10/10 his animal return on animal invested was 5 times greater.
EROEI does this same kind of thing when comparing different forms of energy. It is total silly nonsense.
x,
you have a real bug up your ass.
Comparing things is not silly. It's how we, you know, decide what's best to do. Your crusade against EROEI is total silly nonsense.
Give it a rest.
Well, if you have a basket of stocks and can buy & sell to follow the shifts decided on by whoever defines the index, then you can match the performance reasonably well. E.g. Vanguard does it with their 500 index fund. Not perfect of oourse, but quite close. Yup, the YTD performance of my mutual fund investment totally SUCKS!
I moved all of my 401K to a Stable / Conservative fund in February of this year. It just now hit positive territory. It's staying there until I see signs of true recovery. This may be awhile and eventually even the most stable funds may dry up....we'll see.
In the last three days the DJIA lost about 7% of its value. Since the high in last October of ~14.1k we've lost about 25%.
On October 29th, 1929 it lost about 13%. The week following there were two more days of big falls about 23%. By November 11th it had lost 40%. By the time it hit bottom in 1932, it had lost 89%. So we have a ways to go yet before it's the great depression.
I suspect that a wider swath of the general public has vested interests in the market in 2008 than 1929.
Speaking as one living in rural Nova Scotia and as one who looks after several churches, my treasurer is beside himself b/c the parish nest egg continues to shrink, my warden's son who owns a small business is watching his rainy-day investments plunge by the hour, and my wife, who otherwise doesn't pay much attention to current events, is wondering aloud how much will be left in her pension portfolio at the end of this year, let alone in 15 years when it is set to help provide us with a retirement supplement.
A loss of 10% will hurt a lot of people and not just those who live in the Hamptons. Notwithstanding the big players, market capitalism was extensively democratized these past few decades. The evaporation of billions means declining purchasing power for millions.
And we aint seen nothing yet.
Happy days are here again.
So -- by this time 2011, the DOW should be at about 2000........ if we're lucky.
On this day in 1930, the cornerstone of the Empire State Building was laid; Boulder Dam was renamed Hoover Dam (controversy over the naming can be found here); Jo-Jo Moore debuted for the NY Giants; a gunpowder plant close to Everett, WA blew up; the Savoy hosted Fletcher Henderson; and probably most important to the direction of the era, in response to the Smoot-Hawley Tariff, Canada enacted the Canadian Emergency Tariff. (interesting Smoot-Hawley site)
That's the annualized rate.
Latest Weekly Oil Product Supplied
4 Week Averages 08 vs. 07 plus % YTD 08 vs. 07
These statistics do not include any variation in end user or retail storage, which have had significant declines in gasoline and presumably other products as well.
Alan
Ah..., please be careful about the pRoJEctIonss for the future of the markets when the currency itself is hyperinflated into oblivion.
Do you have a chart for the Argentine markets in 2001, Germany in the 1920s... etc?
What happens to those markets during hyperinflation when cash in the pocket, mattress or "bank" is losing it's value daily?
The Hubbert Linearization might just be accurate if we stop replacing broken parts of the FEDs printing presses over the coming decades.
-Otherwise simply rotate those decline curves 90 degrees counter-clockwise as an average...
Nick.
Absolutely, 2008 must be the benchmark year, after this it is meaningless.
The graphs fail to take into account the fact that demand will decrease with financial distress, decreases the price of crude and temporarily increasing the markets, given that the curve would not be straight down but more elongated, ending in one or many sudden cliff (crash) events.
"US lawmakers vote to end 26-year ban on offshore drilling"
That headline is a complete fraud, congress voted to extend the ban (which would expire after Sept 30) five years in the most accessible areas (within 50 miles of the coast) and removed the incentives for states to allow drilling between 50 and 100 miles.
This bill is just political cover and does the opposite of what the Democrats will claim they did.
Of course the news media won't call them on their BS.
All too typical, say one thing and do another. Change is just means means the name on the door changes.
http://www.democracynow.org/2008/9/17/us_seizes_control_of_aig_with
Dismal discussion of the meaning of the AIG bailout: [not mincing words]
"It means class warfare is back with a vengeance."
Jeez. 900 billion for the connected and no money for railroads, nuclear, wind or solar. Doesn't look too good going forward.
Thanks for the link, urbangardener.
The response of the Bush administration has been identical to that of the Hoover administration, and the outcome will, as the article you linked points out, likely be the same.
The perfect storm is brewing for the implementation of "The Shock Doctrine." What the oligarchs could not achieve in the 1930's, they hope to achieve now. And this time, there will be no New Deal.
Ruh-roh.
China paper urges new currency order after "tsunami"
Looks like our Chinese overlords are unhappy.
IMHO many people are going to shocked at the amount China invests in rail, nuclear, wind and solar over the next 20 years while the USA does little or nothing in these areas.
From slightly vague memory, China has planned 20,000 km of new rail lines, electrification of a comparable length, speed upratings, double tracking. This does not include standard gauge rail links to the EU or Pakistan (via Tajikistan and Afghanistan panhandle).
Shanghai will become the #1 subway city in the world by every metric (route miles, passengers, # of stations, # of lines, etc.)(, and Beijing MIGHT become #2.
Best Hopes for Chinese Rail,
Alan
Major plans for nukes announced as well.
I might have already posted this, but they are putting in the worlds fastest passenger rail line http://www.telegraph.co.uk/travel/2659524/China-planning-worlds-fastest-...
All those trains aren't going to do them any good once oil falls off a cliff, there is way too many people to feed over there.
IMO, the current Chinese leadership truly understand their past rulers full appreciation of wheelbarrows, rickshaws, and bicycles as top secret, strategic, logistic weaponry:
http://web.archive.org/web/19960101-re_/http://www.uni-kiel.de/sino/ar/s...
I just hope North America can do the same.
Actually, I think they can avoid famine.
Say, 5 years of "zero child" policy, reduce life expectancy by a couple of years (they are building up some serious respiratory diseases), reduce diet (less meat, etc.), make deals with Brazil, Canada & Argentina for food imports, farm Zimbabwe.
And China has survived hundreds of famines in the past.
Alan
It helps that they're net food exporters.
Yes, but yields will decline with minimal oil.
But it is good to start ahead of the game (and have VERY large grain reserves).
Best Hopes for Chinese food,
Alan
Yup, One for Washington DC, 2 for NYC, 1 for Chicago, 4 for Hollywood, 2 for Houston, etc... (Great Big Grin)
Actually, think about it. If they could manage a successful first strike and prevent massive retaliation it would free up a LOT of oil for Asia and drop the price of it back to $10 or less per barrel by eliminating US oil consumption.
The loss of a declining customer might be worth it?
Typed with tongue firmly predded in cheek!
China is also planning 200 GW wind power capacity by 2020, and 250 GW hydro power. But the nuke plans really must speed up. Only 5% share of nuke as a goal by 2020 is unacceptable, considering coal consumption increased by 15% in the first half of 2008. Hopefully the 2020 goal will be 10-15% nuke instead although it would imply about 200 new nuclear power plants being built. But it has to be done if China is to reduce its massive dependance on coal (which is a national security issue as well as peak coal in China is approaching soon).
Current plans will very likely result in safety shortcuts, I doubt that they will meet OECD standards.
Faster still invites more disaster.
A massive energy conservation/efficiency program is a better alternative.
Alan
Conservation and efficiency must of course be a big priority, but the demand will grow ferociously anyway, especially since transport has to be electrifed as well. There will be over 300 million cars in china by 2020, no oil for that. Peak coal in china is looming, wind is a welcome addition to the grid, and will be absolutely huge in china, but no replacement for coal, only nuke can do that. Peak coal in china is not something the world will want to see in an economy the size of the US economy in 10 years time, not to mention China's annual trade volume which soon will far exceed any country in the world.
Got gold and bullets? We're going to need it.
At the current pace, a reasonable guesstimate IMO would be maybe 10 trillion of taxpayers money taken before the cycle of abuse ends-this thing has just started.
Seems someone over there heard of Bretton Woods. Fixed exchange rates tied to gold - it's the American Way!
This is hearsay... I work for a mid-sized E&P and I showed up to work today, first day back from Ike and am hearing that we have about 50,000 boe/d in the Permian Basin shut in because of Ike. No damage, but apparently no place to go with the product because of all the refineries shut in, storage is backing up. If we are having problems, I can imagine the rest of Permian is too. Could be a few hundred thousand boe/d down.
Platts via WSJ is reporting 3.7 million barrels per day refinery capacity is still shut down and another 1 million diminished; Baytown (.5 million barrels daily capacity, nation's largest refinery) offline until end of September.
http://blogs.wsj.com/environmentalcapital/2008/09/17/ike-update-refiners...
Good news for those Wallstreet Tycons and for the US in general:
1. Dollar is tanking.
2. Oil is up 5.63% to 96.28
3. NG is up about 8.2%
4. Gold is up by 11% so far.
Greg Jeffers comments from yesterday:
http://americanenergycrisis.blogspot.com/2008/09/holly-molly.html
Interesting guy, isn't he. Thanks for the link. I enjoyed reading his posts.
WT see my post above. I don't think the party is over yet. Gold and Oil up vs dollar down is not out of the woods yet. Expect a strong smackdown on the oil markets in the next few days to a week depending on how the prices move.
Given a shoot war with Iran could start any day however trying to time the bottom is probably not a good thing.
From fundamentals oil and NG will have to rise by December Jan just to meet our basic requirements esp if we get one more Hurricane in the gulf. The chances of losing money on Dec or later contracts is pretty low.
The chances of some wild price swings including touching 70-80 are pretty high before then.
I still believe that the powers that be can make one last swat at gold and oil but after that the fundamentals make it effectively impossible to keep prices down. I'd say about the only thing that would keep oil prices down longer would be a 1929 style drop that simply shook everything.
Excellent primer on the shell game in which the taxpayers get to pay the tab http://www.financialsense.com/fsu/editorials/amerman/2008/0917.html
One that same note, the Gold Standard may come back.
IMO the events of the last couple weeks might have moved up the implementation date of the Amero currency somewhat.
How's Vermont coming along with those secession plans? I might consider moving.
The last time Louisiana tried that, the results were most unpleasant.
Alan
Russia Halts Stock Trading
Some analyst on BNN this morning was saying that Russian banks (ruble market) have stopped lending to each other - they are having a major financial crisis over there. And then they added: "of course in Russia, whenever there is a major crisis, the military gets involved".
The brown stuff is impacting the whirling blades faster than I can keep up with it. :]
Denninger summarizes the USA situation-Puplava said a while ago he expected a Depression but right now it looks deeper than that-I can't foresee any of Karl's recommendations being implemented in any logical fashion at all http://market-ticker.denninger.net/
There were several articles about this this morning. Apparently, something similar happened yesterday. This time, trading is suspended indefinitely.
But they were blaming Russia's invasion of Georgia, and the nationalizing of energy assets, rather than the credit crisis. Foreign capital is fleeing Russia.
Hi everyone, this article about a GE/Google partnership to enhance the grid did not make drumbeat. I want to share it.
Google teams up with GE on grid problems
Some possible problems relating to Money Market liquidations. I usually don't comment on things outside of the oil area but I thought this was noteworthy. In the financial markets today we saw a huge amount of money come out of money markets and go into treasury bills. Most money markets are made up of short term debt instruments like C.D.'s, Commercial Paper, Repo agreements. If this continues it could reduce the available amount of short term financing for large corporations that is critical, causing a credit crunch. To give you an idea of how much some companies rely on this..General Electric (GE) has $196 billion dollars in short term debt that will need to be rolled over in the next twelve months. Can they do it, if not how do they finance their short term cash needs. I am sure they will figure it out but it illistrates the problem.
Thanks,
Don
Holy God we have a real problem here. How on earth are people gonna be focused on Peak Oil with the rapid inflation brought on by the fed. printing fiat money that is coming soon. For that matter, it will be difficult for us to differentiate between inflation oil and gas rises and peak oil rises. Also, I fear that OPEC will price their oil in Euros if we don't become more fiscally responsible.
What we're seeing here isn't inflation, its massive _deflation_ - the disappearance of money in the form of defaulted debt & the crippling of the main means by which new money is created - credit.
Think about it. For printing-press style inflation to occur, the Government would need some means of bring that money into the economy. They've tried really hard to do this through credit, but despite all their efforts credit is freezing up dramatically. They've spent decades breaking unions, exporting jobs offshore and suppressing wages, so there won't be an inflationary wages breakout. Yes, they're going guarantor on the debt of AIG and Frannie, but there's tons of other banks large & small that are going to fail without being nationalised.
What does this mean for the average person? Well, without credit many businesses will find it difficult to operate & will lay off staff. A lot of businesses will end up closing their doors altogether. As banks fail people will lose their deposits and investments. It all means a society with a lot of people who just don't have much (or any) money. Prices come down, but no-one can afford to buy. Its a great time to be rich though, as you can pick up quality assets at bargain basement prices.
Its all happened before, in 1929, and all the ingredients are in place for a repeat performance. And yes, I really doubt anyone will notice PO happening during all this, at least not until things stabilise down the track & society tries to rebuild, only to find the required energy is no longer available to do so.
You are right- this is deflation. World wide this week, 4.5 trillion has evaporated, and it is only Wednesday.
And the evaporation continues into Thursday.
Stocks fall amid new rescue moves
http://news.bbc.co.uk/2/hi/business/7622318.stm
OK I understand that this money is all on a computer but the government is still footing the bill for these bad debts, and printing money is one of the prime ways of doing this.
I've been watching these financial developments with a sort of morbid curiosity wondering where it will all end and whether/how much its going to affect us/me.
There's talk of Nationalising these institutions and that's a big deal but wouldn't a "Manhattan Energy Project" be a sort of Nationalisation of any Energy Problem/crisis?
Nick.
In the past some of us have speculated on the likelihood of some sort of 'October surprise' or other dramatic event on the part of the Bush Regime that would serve to distract the American electorate from the unpleasant realities of our current situation.
Well, in just this last week the financial realities have gotten several orders of magnitude more harsher and more frighteningly personal and immediate. It's pretty scary.
Does this mean that the Bush Regime is proportionately more desperate to do something really rank to divert the growing public rage at being suckered by Wall Street and their enablers in both the Administration and on Capitol Hill?
What would fit the bill? Perhaps a conveniently staged terrorist attack at least as dramatic as 9/11? Perhaps a staged false-flag attack on American 'assets' in the Persian Gulf? Perhaps Israel deciding to 'defend itself' against Iran by carrying out a major air strike? Perhaps a preemptive attack on Iran by the US?
As I don't have a crystal ball, I am not predicting anything. But if one is inclined to worry about such things, then I think the justificaction for such worry has just been kicked up a few dozen notches. Time, of course, will tell.
But just remember: desperate people do desperate things; delusional people do delusional things; and sociopaths act sociopathically. We have no shortage of any of the above.
My expectations these days are pretty low. About the best I can legitimately hope for is that we will get to Inauguration 2009 without the proverbial shite hitting the proverbial fan.
Good is merely the absence of evil, and though that might not seem like much, these days it is still a pretty tall order.
Frankly, I'm hoping that Bush goes out with a whimper rather than a bang. Cheney might try something, but I think his influence ain't what it used to be with most of his lieutenants indicted or fired.
Consider that there was almost zero rhetoric out of washington after the russians invaded south ossetia. That play in particular looked to me to be the hawks whispering in the Georgians' collective ear that they would have support. The Georgians would have to be mad to do it without tacit approval from someone in Washington. I was puzzled as to why the Georgians would provoke the Russians just right now, so this might be it. Also, I thought it was interesting that it was Cheney who was organizing the relief effort for Georgians. Why would he do that? It's not like he has organized any other relief efforts, not even for disasters in this country.
Maybe the ones doing the whispering were thinking about it as some sort of "October surprise". It'd be a horrible thing if that were true though, that those conservatives would provoke a war just to win an election, but then again, I wouldn't put it past them.
The U.S. Embassy in Yemen was attacked by "Militants linked to al-Qaida."
16 dead in attack at US Embassy in Yemen, Yahoo News, Sept. 17, 2008 6:25 PM ET
The financial situation (read crisis) has been engineered pre PO for the purpose of hiding PO in plain view. I realise some (even PO aware) will look at this statement with suspicion. Lets be brutally honest about such things as governments, finances, war
All wars are really about resources..land, water, minerals, blah blah blah.
The truely suspicious thinking would be to assume its all a cosmic accident that the markets are tanking.
I dont ask you to believe me...in fact I hope you try logically thinking this through on your own. I trust you will arrive at the exact and true conclusion, this
energy crisis, financial meltdown, sabre rattling between world powers, power and control struggles...
Are all part and parcel of humanity.
Wars are financed in advance with debt, believe it or not. People have always felt a upset over something perceived lost (water when the well runs dry) even when trivial (cry over spilt milk). Thats why drought
is perceived worse by people collectively then individually by one persons well going dry or spilling milk compares to accidently shooting the cow.
Finacial collapse, war, injustice, doesn't happen in a vacuume. Bread isnt leavened without yeast. This fiasco and mayhem has a method to their madness and sadly its pre baked into the cake. The wars have started in earnest...as has the economic collapse.
You ain't seen nothin yet
"The truely suspicious thinking would be to assume its all a cosmic accident that the markets are tanking"
I put that tin foil hat on about 6 months ago. Our masters know more than they lead on about PO. They decided to have on more cash orgy before blowing the whole thing up. Iraq-housing bubble all PO preparation.
This guy had it pegged back in 2005.
This notion that a cabal in a smoke filled room purposely engineered this financial crisis is nothing short of silly. Collapses of this kind happen when the powers that be lose control, and that is what is happening right now. A lot of the moves you're seeing in DC and NY are the desparate flailing of our elite trying to head off this crisis and failing.
This notion that a cabal in a smoke filled room purposely engineered this financial crisis is nothing short of silly.
Ok, you are right. It is just a coincidence economic conditions arouse that are doing what PO would have done anyway . And silly Cheney got lucky that he found himself in Iraq at the onset of peak oil, Im sure it was not discussed in his secretive "Energy Task Force" meetings. Though I would assume that having control of huge oil wells comes in handy in a post peak world. I'm sure it was purely coincidental. Just a stroke of luck.
I wonder if the room was smoke filled when they were divvying up Iraqi oil fields pre 9/11?
The oil fields that are still not providing them with a profit?
And you think they're in control of anything?
Paranoia and silliness. The levers and knobs available to our economic elite are failing to steer this economy anywhere. That's not an engineered crisis.
I apologize ahead of time if this has already been posted or discussed. Anyway, FWIW, Congressman Don Young saying we have plenty of oil in ANWR and we should drill. Someone posted this on one of the other boards I frequent as justification to we have plenty of oil, we just need to drill for it. I don't even bother to try to argue anymore why the amount of oil left in Alaska is not going to save us, help, sure, make us independent of ME oil, no.
http://www.youtube.com/watch?v=MlfmvwxxgHM
Morgan Stanley in Talks with Wachovia
Two words: Moral Hazard
If you're worried about not getting bailed out, just make yourself bigger...
Denninger's really on a roll:
We are absolutely and instantaneously screwed
If what he's predicting comes to pass, even ELP will not be enough.
So wait a minute, from what I understand, Bernanke is a bright guy. In fact from what I understand his area of expertise in economics is the Great Depression. So, surely these guys must have considered the possibility of the hyperinflation and removal of foreign investment? Maybe they didn't think it would hit them so hard? Are we really going to get hit hard or is this all hand-wringing? Maybe Bernanke and co. are trying to walk a fine line? Something doesn't add up about this.
*edit* When I say "hit hard" I mean the worst case scenarios, not what we're seeing presently.
Hyperinflation did not occur in the Great Depression. Not in the United States, anyway. It happened in Weimar Germany, and was more a political object lesson than an economic one.
So I doubt Bernanke is thinking about that much at all.
"As the old saying goes "There are no atheists in foxholes." ShawnGBR writes a brilliant rejoinder in There Are No Libertarians In Recessions.""
During the Great Depression the United States was on the gold standard. Tricky Dick (Richard) Nixon took us off the gold standard. I cannot understand who gave Bernanke the authority to invest money in companies whose management has taken huge risk and may yet be capable of generating billions of dollars of losses going forward. The Lehman bailout does not seem to be such a good deal if the U.S. gets 80% of years of losses going forward and a constant drain of funds toward corporate jets, stock options, bonuses, and business theory that does not work. I do not think it a good idea to buy bad companies with taxpayers' funds. If the treasury were to buy companies they should buy healthy profitable ones.
All these institutions are continuing the business practises which got them into trouble, re-bundling and securitising debt.
All the bail-outs are doing is allowing the party to continue.
If bankrupted then the viable parts could be sold off, and the remainder would be assessed at their true value.
It is appalling regulation which allowed a total lack of transparency in debts which allowed this to happen, and we have the same guys who created the mess in charge of sorting it out, or in reality trying to muddle through with BAU.
"The Lehman bailout"---
Lehman was the one not bailed out, and is now being sold off.
Are you referring to AIG?
The ethanol producing company Verasun warned they will report a loss due to the high costs of corn.
VERASUN Ethanol warned of losses, investors sold shares in the company
Governments have forced the use of ethanol by mandate. The effects are contributing to the financial crash. Not only did we have tax money diverted to ethanol subsidies, we have potential corn shortages on the horizon, the technology has a very low energy yield if any, and investors who funded ethanol companies are losing.
Hello TODers,
http://www.abcnews.go.com/Blotter/story?id=5828158&page=1
-----------------------------
FEMA Says No to Ice For Hurricane Survivors
Under New Policy, FEMA Says Ice is Not Its Responsibility
.."It's frustrating that the government can deliver $85 billion to bail out AIG, and they can't deliver ice in Texas," said Ben Smilowitz, executive director of the Disaster Accountability Project (DAP), a nonpartisan organization that monitors the nation's disaster response system.
..Besides preserving food when electricity is out, ice is essential in maintaining temperature-sensitive medication and feeding formulas and keeping people cool in the aftermath of disaster, relief and support workers say.
"This isn't for their gin and tonics," said Elise Hough, CEO of the Houston chapter of United Cerebral Palsy, who says she encountered a lot of indifference when she started raising the issue of FEMA's ice policy last month. "This is for people who are extremely sensitive to heat, and ice has a huge impact on their health and safety."
-----------------------------------
So, I would now expect the reverse of this to be true too: if you are freezing to death FEMA will probably not provide blankets or emergency heated shelters. You had better find someone who has some heat, then kindly ask if you could be allowed inside to reduce your hypothermia.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Hello TODers,
http://publicbroadcasting.net/kera/news.newsmain?action=article&ARTICLE_...
------------------------
Evacuees Trapped Without FEMA Assistance
...But as grateful as the Foreman's are for the hospitality, living with almost 1,000 other evacuees is a strain. While he watches the kids, his wife and in-laws are standing in a FEMA line, signing up for housing assistance. A 30-day, government-paid stay at an area hotel.
What they learn, however, is that FEMA is not offering debit cards or vouchers to pay for food and transportation, something FEMA did following Katrina and Rita. Without that, Foreman says the housing assistance is almost worthless for his family.
Foreman: We evacuated for Hurricane Gustav two weeks ago and we spent everything we had trying to take care of our family for Hurricane Gustav. Then we come back to evacuate for Ike and we have nothing left. We made it here on fumes. We can't make it to a hotel without something.
Reporter: So if you don't get assistance for food and gas, can you move to a hotel?
Foreman: Probably not.
------------------------------
Banks, brokerages, and insurance companies get more assistance than a taxpayer down on his luck. I guess it is really true: the American Dream is not negotiable when you are at the bottom of the food chain.
Michael Chertoff just interviewed live on ABC13. He was specifically asked why FEMA is not providing debit cards, vouchers etc. His reply was "because they're not needed - this isn't a situation where people don't have their wallets". He also said that unlike Katrina, most of the population was thanking them for the great job they are doing.
So there you have it.
Heckuva job Mikie!
Expect more and more of this.
The government is going broke, the taxpayers aren't in a generous mood, charities are being asked to do more and more with less and less. I think increasingly, the reaction is going to be, "Why should my hard-earned dollars be given to people who insist on living in harm's way...without making adequate preparations?"
Just human nature Leanan. I'm sure that if there is a severe cold snap up north this winter the folks in TX will have the same attitude about Yankees begging for gov't heating oil assistance. I think there are still few of those "let them freeze in the dark" bumper stickes around. After all "if you choose to live up north in harm's way you deserve to freeze". Not my personal feelings, of course, but I've always tended to be in the minority.
The real shame is the state of the economy our 2 party system has led us to. When times are good most folks wouldn't be so harsh about lending a gov't hand to those in need. Perhaps we should just take such current sentiments as precursers to what PO will deliver. I believe it will take a good 10+ years for the economy to recover. History shows a pretty clear record of that time frame regardless what the PTB are feeding the folks. That should run us smack dab into serious PO conditions under most models floating around.
They didn't help, but the underlying problem is not enough resources. Greer has a good article about it, which I posted in today's DrumBeat.
That is exactly my point. The rules are changing. And it's not necessarily a bad thing. They have to change. We can no longer afford this, individually or as a nation.