DrumBeat: September 29, 2008

Oil plunges $10 as US bailout plan voted down

NEW YORK - Oil prices tumbled more than $10 a barrel Monday, dropping back below $100 as a U.S. financial bailout failed to win legislative approval, raising fears of a prolonged economic downturn that could drastically erode global energy demand.

Light, sweet crude for November delivery sank $10.52, or 9.8 percent, to settle at $96.36 on the New York Mercantile Exchange, after earlier dropping as low as $95.04.

The dramatic sell-off capped a week of frenzied volatility in oil markets.

7,500 Mexicans evacuate; flooding shuts oil wells

MEXICO CITY (AP) - Mexican officials have evacuated 7,500 people and are keeping oil wells shut in Veracruz due to severe flooding from heavy rains along Mexico's Gulf coast.

The state's top civil protection official, Ranulfo Marquez, says large sections of the towns of Minatitlan and Hidalgotitlan are under 10 feet (3 meters) of water.

Price Gougers Wanted

The Bush years are looking more and more like the Nixon years: a dishonest executive, a military quagmire, paranoia, upset hippies, ballooning size of government, and now...gas lines – at least if you live in the mountains of Western North Carolina. Last night on the way to the organic grocery store I counted 12 closed gas stations and one that was open.

What gas that is available is going for close to $4/gallon, and people are angry. Some complain of “price gouging.”

I complain too: we don’t have enough price gouging!

OPEC: Good is Bad - Bad is Good

OPEC coordinates oil production policies to help stabilize the oil market and help oil producers achieve a reasonable rate of return on their investments. This policy is also designed to ensure that oil consumers continue to receive stable supplies of oil. Hence, OPEC is at its weakest point when it does not have excess capacity. With excess marketable capacity, OPEC can influence oil prices when they are increasing, but might not be able to influence prices when they are decreasing. As an old adage says “adding fuel to fire”; however OPEC defies the old adage and are adding fire by withdrawing fuel.

The Thunder Horse challenge: Optimize perforating performance in an HP/HT deepwater well

The Thunder Horse field in 6,000 ft (1,829 m) of water in the Gulf of Mexico, has stacked consolidated sandstone reservoirs at 20,000 to 30,000 ft (6,096-9,144 m) subsea with pressures of 14,000 to 18,000 psi (96.5-124 MPa), temperatures of 190 to 270° F (88-132° C), and mean rock strengths of 4,000 psi. The wells normally are completed with a 7-in. (17.8-cm) liner and perforated with 3 3⁄8-in. (8.6-cm), high-shot-density (HSD) wireline guns with deep penetrating charges. However, as a result of drilling problems in one well, a 4 ½-in. (11.4-cm) production liner was cemented in the 8 ½-in. (21.6-cm) hole. The tight tolerance between the fired guns and the pipe ID created an additional challenge. After extensive analysis, design, and yard testing showed the well could be perforated safely using 2 7⁄8-in. (7.3-cm) HSD guns with new enhanced deep penetrating charges that could deliver better perforation performance than the original gun system. The results from the well’s cleanup program indicated an even better perforation efficiency than observed earlier.

Why We Can't Afford Cheap Gas

With the cost of crude oil again nearing the $100-a-barrel mark (even after last week’s financial meltdown) and this summer’s record gas prices in the rearview mirror, automotive executives and industry analysts are already heralding the return of gas-guzzling trucks and SUVs. Car makers are rolling out new truck models, and even Republican presidential candidate John McCain, in a new Michigan TV spot, promises to "spur truck sales." Never mind that only months earlier, these same analysts, as well as auto executives and consumers alike, insisted that the future of the automotive industry lay in more fuel-efficient models like hybrid and electric cars. Now, however, it seems that many involved are slowly slipping back into the pre-$100-per-barrel mindset that was so popular when pump prices were under $4 a gallon and drivers of SUVs and trucks roared down the roads with clean consciences.

PDVSA’s Growing Presence

CARACAS (IPS) - Central America, Cuba, the Dominican Republic and islands in the eastern Caribbean are receiving more and more oil from Venezuela, while major refineries are planned in South America -- at Pernambuco in northeastern Brazil, and at El Aromo, on Ecuador's Pacific coast.

State oil company Petróleos de Venezuela S.A. (PDVSA) has a finger in all these pies. In turn, it has opened the region's largest oil reserve, the Orinoco Belt, to joint exploitation with other Latin American state-owned oil firms.

Ecuador rules out oil takeover, sets investment

QUITO (Reuters) - Ecuador's leftist president, Rafaela Correa, Monday ruled out nationalizing oil companies but said he will "not allow" them to reduce investment levels.

Russia Q2 gas exports rise 12 pct yr/yr - c.bank

MOSCOW (Reuters) - Russia's gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) increased natural gas exports by 12 percent year-on-year in the second quarter of 2008 to 49.6 billion cubic metres (bcm), the central bank said on Monday.

Australia: Peak Oil (Proof)

Tonight I speak about a serious concern of my constituents about the consequences of peak oil, which will have grave local and global impacts. The term "peak oil" refers to the stage when global oil production peaks and future oil production begins to decline. With the global demand for oil increasing rapidly, production declines are predicted to result in severe petrol price increases as buyers compete for supplies. Given the dependence on oil, including for energy, food, travel and consumer products, disastrous impacts on the global economy are expected. While some say peak oil has already hit and others say it will occur in 2030, it is essential that we prepare. New South Wales and Sydney's over-reliance on petrol makes us extremely vulnerable to impacts, and we must protect current and future generations. Given the consequences of peak oil and the serious threat of global warming leading to climate change, governments have a responsibility to urgently reduce our dependence on fossil fuels.

Highway stations to be well-stocked, says petrol dealers association

KUALA LUMPUR: If you’re looking for fuel, head for the highways. That is the advice of the Petroleum Dealers Association of Malaysia (PDAM) in view of a shortage in supply at some 100 stations around the Peninsula.

Asia Coal-Prices falls below $130 on demand concerns

SYDNEY (Reuters) - Coal prices for power generators in Australia, a benchmark for Asia, fell to a 5- month low of about $129 a tonne in the latest week, amid worries of slowing demand in Europe and China.

Reports of growing coal stockpiles at Chinese ports and power stations as well as sharp falls in freight rates more than offset news of supplies disruptions.

India: KPCL importing coal for fuel security

BANGALORE: In a move to ensure sufficient fuel supply for its power generating stations, the State-owned Karnataka Power Corporation Limited (KPCL) has started importing coal from Indonesia.

According to Karnataka Power Corporation Limited sources, coal is being imported for a week now to tide over the sudden coal shortage caused due to heavy rains which disrupted mining activities in the Western coal fields and Orissa.

No conspiracy lurks behind gas prices

Federal party leaders who muse about how oil companies might be gouging consumers -- which comes as gasoline prices rose despite the per-barrel price of oil dropping -- should remember Ockham's principle. They should also reacquaint themselves with the basic facts of economic life, such as the effect of shortages on price.

Why It is Important for Investors to Create A ‘Wise Energy Use’ Stock Portfolio

Starting today – with the story right below this one on our Home Page – EnergyTechStocks.com is rolling out a new kind of stock index not to be found on Wall Street. The time has come for a “Wise Energy Use” index — a strictly informal stock index intended to start every investor thinking about building a portfolio of companies whose fundamental business is to save their customers money by saving them energy.

The Return Of King Ag

"The greatest fear everyone in farming has is that prices will collapse and we'll be stuck with high costs for fuel and fertilizer," Horneck says. "Farming has never been cheap. But it has gotten vastly more expensive. Fortunately the prices are saving a lot of people, and it's high time that happened. We've had plenty of experience being on the bottom. I've been in this business since 1980 and there's never been a time when farmers have been able to call the shots like this."

What is Good for the Goose Should be Good for the Gander

As I write, the Congress and the Administration are negotiating on a $700 billion tax payer bailout of the nation’s credit industry. I find it ironic that the very people who contributed to problem are the ones being trusted to come up with a fix. But that point aside, Republicans and Democrats, bureaucrats and bankers, candidates and the media, all agree a mass infusion of government money is needed to fix the problem. Gee, aren’t these the same folks who just a few short weeks ago were criticizing the use of government tax credits to support the ethanol and bio-energy industry? They said it was bad policy to spend a few million dollars to subsidize the renewable energy sector. Now it is okay to spend close to a trillion dollars to cover the debts on home loans, car loans, credit card defaults and iTune downloads. So why is this crisis different?

Japanese Honda Suppresses Alt Fuel GX Automobiles as Company Refuses to Sell CNG Cars to Spokane

Japanese Honda is suppressing its own alternative fuel technology and denying its cars and home refueling devices to Americans eager to get off of oil. Honda, it seems, is going slow on its alt fuel vehicles, fearing the public will continue to abandon its more profitable gas guzzling SUVs such as the Honda Pilot. The Pilot is one of the most fuel inefficient vehicles on our nation’s highway.

California took on energy crisis, now it faces water crisis

Once a week, a truck brings drinking water to the small town of Bodega, just west of Santa Rosa. Without this delivery, the Bodega Water Company could not meet the needs of the town's 150 residents who normally rely on well water. The company expects to step up the trucked-in deliveries to twice a week and then daily as the state's drought worsens and groundwater supplies dwindle.

Gore's Rebellion

Even if every U.S. coal plant were razed to the ground tomorrow, it wouldn't make any difference for global CO2 while China expands.

Sour economy tied to psychology that fed gas panic

NASHVILLE, Tenn. - As anxiety on Wall Street led banks and other investors to hoard cash last week, a different kind of market fear gripped cities across the Southeast.

A hurricane-related disruption in gasoline supplies prompted jittery drivers from Atlanta to Nashville to top off their fuel tanks more than usual, causing sporadic shortages and temporary shutdowns of stations. These closures only magnified the problem, of course, leading to more shortages, which sent local prices skyrocketing.

"It's a wonder people didn't go out and empty all of the grocery store shelves, too," said Larry Lamb, of Nashville. "All you need to do when something like this happens is just calm down."

Perhaps — in hindsight — that is the sensible thing to do.

But economists and other experts say individuals — not just Americans — are hard-wired to respond quickly when they are scared, and in a way that is not always in their own, or their neighbors', best interests.

Oil falls to near $103 on global slowdown fears

Oil prices fell to near $103 a barrel Monday on concern that economic growth will slow across the globe despite a tentative agreement in Washington on a $700 billion bailout package to stabilize the U.S. financial system.

By midday in Europe, light, sweet crude for November delivery was down $3.50 to $103.39 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell Friday $1.13 to settle at $106.89.

Iran's central bank to inject $15bn from oil fund into banks

Iran's new central bank governor said he would inject $15 billion (Dh55.1bn) into the banking system to help them boost industrial production, a move economists have warned will stoke surging inflation.

Governor Mahmoud Bahmani said the funds would come from an oil reserve fund and by helping to boost production would ease price rises, echoing the government's line.

The tank isn't empty

It is taken as an article of faith, thanks largely to a decades old prediction made by M. King Hubbert on American oil production, that the world is in imminent danger of running out of oil. Peak production, the day when oil production begins its irreversible slide, may be less than a decade away, say some experts, and the world economy could collapse overnight in response.

Except that isn't the truth, argues Robin D. Mills in The Myth of the Oil Crisis: Overcoming the Challenges of Depletion, Geopolitics, and Global Warming. He believes that the world is in little danger of running out of oil, that the world has enough conventional and unconventional sources of oil to last it many decades – even centuries. The peak oil arguments are based on faulty logic and science and assumptions which aren't grounded in reality.

Search for a strike

Consumers in Hawaii and the nation need to brace for continued high gas prices until alternative energy sources can be developed on a commercial scale, warns a prominent university futurist.

"I think that we are long past the time when we could more or less effortlessly and painlessly transition from oil to alternative forms," said Jim Dator, director of the Hawaii Research Center for Future Studies at the University of Hawaii.

Consumerist society fuels rising oil prices: The time has come to question our 'need' for excess

For some time it has been impossible to pick up a newspaper without reading about the soaring price of fuel. The increase has been truly dramatic due to a quadrupling of the cost of a barrel of oil since 2004. It is something that we all feel because of the impact that it has on our everyday lives.

What may be less obvious is that this same price increase has also been a major shock to the global supply chains that support commerce and bring most of the low cost products to the high street. Worryingly, the impact of the price hike is still working its way through those systems.

South Korea Seeks $90 Billion of Russian Natural Gas

(Bloomberg) -- South Korea plans to import $90 billion of natural gas from Russia via North Korea, with which it shares one of the world's most heavily fortified borders, to reduce its reliance on more expensive cargoes arriving by sea.

Russian govt plans more oil tax cuts for 2010

While the Russian stock market was suspended, Russian government officials put together a plan that would help increase investment in the Russian oil sector. Kremlin economic advisor Arkady Dvork ovich said on September 19 said his country would propose more tax cuts for the oil industry this year and implement them in 2010.

The Rise of Natural Gas Populism

What is interesting about the Pickens/Chesapeake twin campaigns is their direct, populist appeal. Most firms go to Washington to lobby for what they want, and there’s not doubt Mr. Pickens and Chesapeake are doing their measure of that.

But they are also spending millions of dollars doing things the old-fashioned way: taking their case over the heads of politicians and directly to the people — or more specifically, to consumers.

Congress' failure leaves energy policy up in air

WASHINGTON — Few issues have been debated as long or as heatedly in Congress this year as energy policy — with so little result.

Inaction means the debate over offshore drilling, how much the federal government should offer in new alternative energy incentives and whether higher fuel economy standards are needed is left to next year. There won't be presidential politics then or members of Congress seeking re-election. That could increase chances for consensus.

Oil flowing from offshore spigot still years away

WASHINGTON (AP) — The welcome sign is going out to oil and gas companies off the Atlantic and Pacific coasts.

v A quarter-century ban on offshore exploration expires in this coming week, but don't expect to see a chain of drilling platforms from the beaches anytime soon.

It will take a couple of years, at least, before any oil or natural gas leases are issued, years more before any oil is found and perhaps a decade before any of it begins to flow to refineries.

Dems fail to extend oil shale moratorium

GLENWOOD SPRINGS, Colorado — Senate Democrats on Friday tried passing a bill that included language that would continue to prohibit the Bureau of Land Management from issuing final oil shale regulations.

But that effort failed when the financial stimulus package, which would have contained the oil shale ban, stalled in the Senate on a 52-to-42 vote.

Africa: Leaders Say Fuel, Food Crises Have Hit Nations Hard

The soaring cost of fuel and basic foods over the past year has left many countries in sub-Saharan Africa unable to adequately fund critical activities, such as healthcare and provision of safe drinking water, their leaders told the UN General Assembly's annual high-level debate on Thursday.

Guinea-Bissau's President João Bernardo Vieira said the sharp rise in the cost of oil had been particularly destabilizing on the economy of his country, which is already among the poorest in the world.

Wind power plans may be blown off course

Problems in sourcing sufficient turbines, and in planning, construction and grid connection are hampering the “wind rush”. A recent report by a committee of MPs showed that in most of the remote locations where wind farms are being built, there is no access to the national grid. In some places, developers are facing 12-year delays before they can be connected.

There is also an urgent need to expand the industry’s skilled workforce and present opportunities for graduates. According to Brown, the resurgence of apprenticeships and the launch of the engineering diploma will help to plug the gap.

Ammonia Fuel—The Other Hydrogen Future

It may indeed be the case that pure hydrogen will be one of the many solutions that can be harnessed to rescue us from our current reliance on imported oil. There is much promise in today’s research. But the technical challenges facing pure hydrogen today in economic production, storage, and transport put that piece of the puzzle years in the future—and we need answers right now.

What if this vision of a distant hydrogen energy future ignores a critical reality: that an alternative approach to hydrogen fuel is available immediately; that with minimal modifications we could convert the bulk of our gasoline and diesel internal combustion engines to an existing hydrogen based fuel, eliminating carbon emissions and reducing our dependence on foreign oil; that a proven technology exists to produce this hydrogen based fuel without carbon dioxide emissions; and that new and more efficient synthesis is already in coming online? What if we do not need to wait for the hydrogen future of the year 2030? What if our hydrogen future is within our grasp right now?

Pumping the biofuels, from Rio to the Humber

Finding oil is one thing but when it comes to getting it to the market, the big challenges stem from the demand for cleaner and greener fuel. Refiners and distributors worldwide are facing new regulations to reduce the sulphur content of fuels and tighter government targets to cut carbon dioxide emissions.

In the “downstream” sector (the business of refining, production and distribution), gas-to-liquids technology that converts natural gas into diesel and other liquid fuels is “on the verge of commercialisation,” according to Al Troner, president of Asia Pacific Energy Consulting in Houston, Texas. “It could make a big difference.

PM finds he can't sell coal to Newcastle

It was a city built on its steelworks and coal, but Prime Minister Kevin Rudd was confronted by a new breed of Newcastle residents committed to climate change.

Coal power plants 'must be clean'

Coal-fired power stations must not be built unless they can capture and store CO2, the Environment Agency has warned.

Cities get too much blame for global warming: study

LONDON (Reuters) - Cities often blamed for producing most of the world's greenhouse gas emissions actually generate just two-fifths or less, according to a study published on Friday.

U.N. agencies, former U.S. President Bill Clinton's climate change initiative and New York Mayor Michael Bloomberg have all said that 75 to 80 percent of total emissions come from cities, the paper in the journal Environment and Urbanization says.

But using data from the U.N. climate change panel, it estimates the correct figure at between 30 and 40 percent.

Scientists pressure Australian PM to step up carbon cuts

SYDNEY (AFP) - Australia's leading climate change scientists Monday pleaded with Prime Minister Kevin Rudd to override his top adviser on the issue and drastically slash carbon gas emissions.

Professor Ross Garnaut, commissioned by the government to review Australia's response to the global problem of climate change caused by mounting carbon gases, has recommended a 10 percent drop from 1990 levels by 2020.

But 16 scientists, including Roger Jones, coordinating lead author of a United Nations' Intergovernmental Panel on Climate Change report, said emissions must decrease by 25 percent.

Europe warms fast: Med drier, north ever wetter

OSLO (Reuters) - Europe is warming faster than the world average and governments need to invest to adapt to a changing climate set to turn the Mediterranean region arid and the north ever wetter, a study showed on Monday.

Europe's mountains, coasts, the Mediterranean and the Arctic were most at risk from global warming, according to the report by the European Environment Agency and branches of the World Health Organization and the European Commission.

Is there an index for US financial stocks? If memory serves, Larry Kudlow implored his listeners to sell oil and buy financials in January of this year. Oil is basically flat now, around $100, so I wonder how an index of US financial stocks has fared?

In a depression, it seems to me that the "winners" are those who lose the least. Art Cashan, with UBS, was just on CNBC stating that it's usually a bad bet to bet on the end of the world, because it only happens once. Having said that, he ended with this suggestion:

It might be a good time to be looking for a (hopefully he meant financial) bomb shelter

How about the Nasdaq Financial 100?

Thanks, it's actually better than what I thought it would be, but it has taken a lot of borrowed money to keep slow the decline.

If you extend the scale back a bit to the peak at about 510 midway through last year and the latest intra-day low today (about 267) we're heading towards a 50% loss from peak in just over about 15 months.

And the close for the S&P Financials today


This is probably the best free site available for checking market charts for stock market sectors, commodities themselves, world markets, Bonds, you name it :

Market Summary Page: Click on the index, or sector, of interest for individual charts:


They also have really pretty historical charts (and more for paid subscribers, of which I am not one).


An here is the Renix, the renewable stock index. It's performance for the last 5 years was much better.


..however this year's been so far pretty bad.

Great chart JayH,

Everyone please remember that these charts show the "nominal" price of the index. If you factor in inflation, this has been a full catastrophe in the financial sector. If your not betting on the end of the financial world, sooner or later the price drops will match the value of the underlying assets, meaning it is time to buy.

JPMorganChase has been able to buy two large firms (Bear Stearns and WaMu) back to back at about 12 cents on the dollar. Tell me, even in this wipeout, has anyone seen any $200,000 houses available for $24,000?


Funny you should ask that question. Just today, I took a trip up my mom's place and noted large numbers of "For Sale" in the front lawns of many more houses than usual (I've been keeping track of such things for over a year, now.) In fact, one of the houses had several large yard signs, hand scrawled and obviously homemade touting it to be owner financed for $50,000. It was totally beat, and had all the makings of a crack house, and I wouldn't have paid 50 bucks for it, much less 50 grand, but I wouldn't be at surprised the the Donald Trump Wannabe trying to unload it had paid a lot more for it a few years back as a sure fire investment. After all, Real Estate always goes up. At least, that's what I hear, anyway...

SubKommander Dred

Hello JayH,

I Just Gotta Ask You --> THEE Jay Hanson of the Thermo/Gene Collision & Dieoff.org?

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

With the rapid disappearance of financial institutions, you could worry about what these composite indeses really represent.

True. It might be interesting to see what the total market cap was for the top 10 US financial institutions on 1/1/08, versus now.

Half pf Azeri crude production (470k bpd) suspended indefinitely:



That's a lot of oil to be off line. Combine that with the over 746 tb/d that is still off line, (as of September 26th), in the Gulf of Mexico and you get over 1.2 million barrels per day that is off line. There was a time when this fact would have sent oil prices soaring. As I write this NYMEX crude is down $5.70. The pundits on CNBC say it is "demand destruction". Looks like a little production is being destroyed as well. But I guess that is temporary and can be ignored. Well, at least the traders seem to think it can be ignored.

Ron Patterson

And then there is Nigeria.

it's astounding just how much iss off line total just now. There must be serious demand destruction in play just now for fundamentals like these not to push oil sky high again...unless...there is still a lot of unwinding of positions just now. If contracts expire end of month then it wouldn't surprise me to see oil push $120 by mid october and I don't just mean a spike.

I guess a lot also rides on the outcome of this bailout!.


another quickie, the IEA data for C+C is going to plummit.

another quickie, the IEA data for C+C is going to plummit.

Right, they will plummet in August, September and October, but they will be considerably higher in July. I expect to see a new record high in July before production falls off a cliff for the rest of the year.

Contract settlement: Light, Sweet Crude Oil Futures

Trading terminates at the close of business on the third business day prior to the 25th calendar day of the month preceding the delivery month. If the 25th calendar day of the month is a non-business day, trading shall cease on the third business day prior to the business day preceding the 25th calendar day.

Ron Patterson

Contract settlement day was last week, the day oil spiked up over $120 on a short squeeze.

It seems to me that a meltdown in the credit markets would impact an oil buyer's ability to fund purchases. I wonder if that's part of what we're seeing? If so, it is real bad news for gasoline in the SE and heating oil in the NE.

In last Friday's API call at 57:54, one of the things Red Cavaney was concerned about was the impact of credit shortages on all of the oil industry. He thought it could even have an impact on oil production, as companies who rely on debt to pay workers found it increasingly difficult to do so.

I think the lack of credit availability is impacting the US gasoline inventory situation, and will make it more difficult to get back up to normal levels. It also has to be affecting oil buyers' ability to fund purchases. I can't imagine that very many of these purchases are being made by cash. More likely, there is financing of some kind, and this is drying up.

As I write this NYMEX crude is down $5.70. The pundits on CNBC say it is "demand destruction".

So, apparently there are two options for the economy:

Option 1: Bail out Wall Street, get money moving again and return to (mostly) BAU. However, this increases demand for oil and oil prices skyrocket, causing serious long term issues with the economy;


Option 2: Wall Street does not get bailed out (either voluntarily or through the bailout package failing to resolve this), the economy has a 'correction' (I love that clinical term they use for this) and demand for oil goes down, as well as price, but with serious long term issues with the economy.

Damned if you do, damned if you don't.

I don't see it that way at all. The bailout will happen but we will not return to BAU. We are in a recession and the recession will get deeper regardless of the bailout. The recession is now spreading throughout the world, except for oil exporting nations of course. Demand destruction will continue. This will disguise the drop in oil production. I expect oil prices to stay low, if indeed $100 oil can be considered low, for at least six months or more. I would hesitate to guess what will happen next year.

I expect oil to trade between $80 and $110 for the next several months.

Darwinian if by 80-110 you mean until the election or and attack on Iran then I agree if you think that the current price reflects fundamentals then I disagree.

For us to even see demand destruction we would have to see a market thats reasonable well supplied and see refining margins negative and see plenty of cheap gasoline. At this point demand is below the supply of oil such that demand destruction from secondary economic problems has overwhelmed oil supply.

Right now we have the US well below MOL for gasoline with significant shortages in certain regions.
At some point these refineries will come back on line and these regions will be supplied with gasoline.

Last time I checked Wall Street was not the main oil user in the US. Financial meltdown will eventually lead to lower future demand as growth stops then slows but this problem is not whats happening now. Right now Main Street wants gasoline and cannot get it. Laws agianst increasing gasoline prices are resulting in shortages.

Finally if the oil supply was plentiful it makes sense that the price of oil would fall steeply say down to 40-50 a barrel since oil prices are set on the margin a oversupply has as large a price effect as a under supply.

Show me real proof of significant demand destruction and I'll change my tune just because the media is claiming it does not make it real.

Certainly we have reasons for low oil prices but supply and demand i.e fundamentals are not whats happening at the moment. The large price spike at contract settlement time should have given people a clue that things are not as the seem.

If you start the cycle of trillion dollar bailouts, this place might as well be renamed Zimbabwe for its more than 10,000 percent inflation as it started handing out money to every loser in town and even as far as the wilderness. You might have plenty of money to buy gas but not the ability to produce it if you feed parasitical economic growth by handing out moeny to every corp. that needs a bailout. Brother can you spare 500 hundred billion?

At some point people started buying Prius autos and the value of inner urban areas began to be greater than the relative value of the exurbs. Of course you do not live in a world where the inflation adjusted value of oil always goes up. There is no such market as always goes up adjusted for inflation.

"Option 2:"

imo, that is the prefered option both for our grandchildren's inherited debt and for a continuation of civilization.

and why o' why is the $ strengthening ?

and why o' why is the $ strengthening ?

You probably mean the dollar vs. the Euro... This is probably because the Euro is going down faster than the dollar. They just had several major bank failures over the weekend in Europe... Since currency trading is a zero sum game, this just means the dollar is dropping slower than the Euro. Race to the bottom...

and why o' why is the $ strengthening ?

It's not, it's just that the other guys didn't have their Wheaties this morning.

Is this a BAD thing???

IMO this collapse of the ponzi finance scheme is a preview of serious oil depletion. Just like the assurances of reputable experts have overnight become cries of alarm re financial collapse, the same thing is going to happen with oil depletion. The other similarity is that the richest and most powerful in the USA are going to use the power of the state to protect themselves and attempt to increase their power and wealth-the USA citizens will be totally on their own when serious oil depletion bites if current trends continue.

Well, Wall St. seems unimpressed with this bailout plan.

Ya - that oversight bit may have put them off.

London not to happy either:


FTSE down 5% roughly 4850 and falling fast, which puts it at around Jan '05. or July '97 take your pick!

Is this unimpressed business because they are unimpressed or are the boyz sending a message? Dow seemed to be down fast right off the bell and in the first hour, then pretty flat-line since. I don't know, but maybe find out for sure on Wednesday, or would that be Thursday morning"?

Whatever happens I am going to be standing back with my hands in my pockets making sure my wallet doesn't go anywhere.

My guess is that Wall Street is continuing to game the system. No matter how real various aspects of this meltdown might be, I'm sure it's being played for everything possible. That's exactly what Wall Street would do; it is how we got here in the first place. And don't forget, there are large numbers of players that know it is hopeless to fix this crash; all they will do is extract everything they can.

How does it feel to be branded

And know you're a cow?

cfm in Gray, ME

Hi Dryki, you say:

How does it feel to be branded
And know you're a cow?

Well as a cow I made my last moo on July 27 2007 when I lost all bullishness and got rebranded with this $$$, so feeling pretty okey dokey (for the moment) amigo, thanks for asking ;)

Hmmm that sounds rather snotty, but not meant that way, just enjoyed the picture you painted of the cow and ran with it.

Yes and when you come down to it even those players gaming the system will feel the pain, I think it has to do with something about gaining the world etc.

I wonder if someone with a financial head on could answer me a question?

Much is made of the statement that the credit crunch is due to lack of trust between banks. Since they don't know who has the bad debt they won't lend to anyone and thus everyone finds credit difficult.

So why doesn't the government force all financial institutions to 'open the kimono' and be totally transparent about the debts, assets, financial derivatives etc. they own. Each of those would also have to be open and honest, all the way through the market down to the real world assets.

Understanding the real financial position of any entity would then be a case of tracing through the spiders web and totalling up their position, risk and therefore liquidity position.

At one stoke all organisation's trustworthiness can be determined by anyone. Some would obviously be insolvent and the government could support or wide-up those. Everyone else could then have evidence for trusting another organisation, and the credit market could ungum itself. Confidence restored, line drawn.

What's more, it doesn't take any money for the action, just for those insolvent entities you want to save.

OK, so why doesn't that work?

The government tried to tighten up the accounting rules this year to force banks to be more open about their hard-to-value "level 3" assets. However, the banks have fought tooth and nail and got the accounting rule changes delayed. Banks don't want people to know what's on their books. I think it is because some (most?) banks would turn out to be insolvent.

In short, if the books are opened, people are afraid the books will be just as bad as they feared (i.e. the fear and mistrust have a good solid foundation).

Well if its as bad as people fear, then no loss - you just get it over and done with quickly.

If its worse, then its going to come out in the end anyway.

However it could be better....

No matter which option, it gets things out in the open so people can move on rather than worrying that Bank X is actually hiding something. Rumour is worse than not knowing.

Given that the bill hasn't passed, it sounds like an option for the government to force the institutions (no choice allowed) is a potential route forward.

Who knows, making it permanent might serve to keep these organisation on the straight and narrow?

No one really wants to air their bad laundry. It would be bad for their stock, and it would cause a lot of people to run on these banks, which is why the indu$try would never $upport legi$lation favoring thi$ to Congre$$... Think of all the contribution$ the $enators and Representative$ would lo$e out on...

And besides, there is really a good chance that everyone has a lot of bad laundry, which is bad as a whole, but you are right: in essence, you are saying that in order to understand the problem, you need to measure it and see it; if we can't see it, we can't fix it.

In part that is EXACTLY what Denninger suggests.

Again, for the peanut gallery:

Level III assets must be fully disclosed along with all formula and models for their marks, quarterly, in the 10Q/10K.
Derivatives must all be moved to a regulated exchange with a central counterparty to guarantee margin supervision. No exceptions.
Leverage must be reduced to no more than 12:1 across the system. No exceptions.


A lot of the "structured" investments were deliberately designed to be as complicated and as opaque as possible.

If they 'open the kimono', it will soon become apparent that *nobody* now knows how to unscramble this mess - including the companies themselves.

For the moment, everyone can pretend that there is still value behind the kimono. Keep it closed unless you want to see a *real* panic.

Just my 2 cents :\

I have absolutely no training in economics or finance and even I know these things are worthless, just because (but not only because) of the way they are tiptoeing around them. They know it too. The time for pretending is over. That's what this bill today was about...more pretending.

"Generally Assume the Opposite Theory"

Regarding energy and finance, generally assume that the truth is the opposite of what officials are telling us.

Apparently, we are seeing across the board attempts by central banks across the world to inject liquidity into the system. They were discussing the relative strength of credit defaults swaps for various governments on CNBC.

protect themselves from what, and how? we're all in the same big cooking pot. more money will buy them a little time, but that's about it

Quoting a review of the Myth of the Oil Crisis

"Mills, a petroleum economics manager for the Emirates National Oil Company in Dubai"

If I can ask a silly question - what is petroleum economics? Is it related to geology at all?

".. what is petroleum economics?


and why should i listen to a petroleum economist who doesnt know what "reserves" means ?

This was my favorite part..

The peak oil arguments are based on faulty logic and science and assumptions which aren't grounded in reality.

Science, protected by a bodyguard of faulty logic and assumptions.

(EDITED.. reread the article and pulled a quote)

what is petroleum economics?

This is when you take a demand graph and move the supply curve to the right revealing a new equilibrium price per bbl.

All of the area under the newly drawn curve is fresh market supply. Depending on the scale of your graph the total amount may be thousands or millions of barrels.

Finding oil this way is a lot cheaper than the old fashioned methods and saves wear and tear on your draw works and roughnecks.

Unlike many peak oil advocates, The Myth of the Oil Crisis is a thoroughly sourced effort. And while many nations are reticent to release internal data on the state of their oil resources, Mills is well-placed as an industry insider to make educated guesses utilizing available data.

I have not read the book and would hate to imply support by purchasing a copy. I'm curious as to whether the peak oil community, and the oil industry in general, would be able to read the description of Mills as a "well-placed industry insider" with a straight face.


PS. Is that Simmons over there ROTFL?

"Educated guesses"? Is that the same as a SWAG? Now, THAT'S funny....my guesses are better than yours, nyah nyah nyah...

A shattering moment in America's fall from power

The global financial crisis will see the US falter in the same way the Soviet Union did when the Berlin Wall came down. The era of American dominance is over.

CNN just reported on the markets, and they're spinning the bailout as a failure (as reflected in the huge selloff).

Fed takes fresh steps to battle credit crisis

WASHINGTON - The Federal Reserve and other countries’ central banks announced new steps Monday that makes billions of dollars available to squeezed banks here and abroad to battle a worsening credit crisis that threatens to unhinge the U.S. economy.

The Fed said the action is intended to “expand significantly” the availability of cash available to financial institutions in an effort to provide relief to the worst credit crisis since the Great Depression. In taking the action, the Fed cited “continued strains” in the demand for short-term funding.

Is there no technical/feasible limit ot how much bail out finance the Fed can counjure up? Where the heck is it all coming from? Anyone checked M3 recently?


Peak paper?

The Fed is still hoping to get foreign governments to fund the bailout. There have been some reports that the US has been going around with the tin cup ("Hey, buddy...can you spare a trillion for an American who's down on his luck?").

If that doesn't work, the option of last resort is to monetize the debt (i.e. print up money to loan to the government). That will be very bad for the dollar, and the Fed is trying not to do that. Some people have suggested forcing Americans to buy treasuries by requiring a percentage of all 401Ks to be invested in treasuries. I've heard 25% tossed out as a number. I suppose that could work for a while (until government debt swamps the amount of money in 401Ks), but it would take a lot of money out of other things, equities in particular. It would also be pretty unpopular.

Please don't quote "Treasure of the Sierra Madre" on this disaster. I hate to imagine our whole country ending up like Fred Dobbs.

"You know, the worst ain't so bad when it finally happens. Not half as bad as you figure it'll be before it's happened." (Bob Curtin, Treasure of the Sierra Madre)

It's one of my all-time favorite movies. I can just imagine the Chinese reaction to US panhandling: "You again!"

Or members of the Chinese Finance Minstry riding up on horseback sporting large sombreros:
"Dollars? We don't got to show you no stinking dollars!"

SubKommander Dred

Some people have suggested forcing Americans to buy treasuries by requiring a percentage of all 401Ks to be invested in treasuries.

Reminds me of the old communist system.

Reaganism is 2 for 2:

USSR: 1989
USA: 2009

Some people have suggested forcing Americans to buy treasuries by requiring a percentage of all 401Ks to be invested in treasuries.

This is a highly workable solution provided the government extends low cost loans to the citizenry to facilitate their purchase of treasuries.

No-no theoretical limit. The whole problem is that you cannot strengthen the host (economy) by feeding the parasite. The parasitic financial economy is weak because the underlying real economy can no longer support it. At this point, you would think that Ben and Hank have sole responsibility for the USA economy. There is probably no way out, but the only logical chance would be massive energy and infrastructure spending focused (along with tax cuts and an increased deficit) on getting the host economy rolling again, getting it strong enough to support the parasitic financial economy. No leaders in the USA are even discussing this-the real economy would need trillions of dollars of investment almost immdediately to jumpstart this corpse.

Watching the debate on the bailout bill, it has occurred to me that we may be missing the point. I cant find where I read some one yesterday indicating that he contacted several institutions seeking credit and was assured that credit was available. Is it not possible that this is not a credit crisis but a personal liquidity crisis?

Many foreclosures have come about as a result of the inability of individuals and businesses to realize the benefits of expected growth that has not occurred. Individuals were suckered into adjustable rate mortgages with the argument that by the time the higher rate kicks in their financial position would have improved as a result of continuous growth. Instead what happened? Growth was lethargic and energy prices sky-rocketed, putting a stranglehold on personal and business cash flows. Is it not more likely that, it is peoples ability to honour their debt obligations that is in crisis.

I'm with Richard Heinberg who wrote that the 700billion would be better spent on investment in alternatives an renewables that reduce America's (and the world's) dependence on FF and in particular oil. I'm not an American but, IMHO America needs to create jobs in industries that reduce instead of increase dependence on FF especially oil. This bail out will probably not arrest the decline of the US economy as the economic effects of PO take hold. See
this thread
on the drumbeat of September 27. US legislators have been talking about the bankrupt institutions returning to profit and being able to realize a return to taxpayers as I write this, fat chance! Where is Roscoe Bartlett?

As I post this, the bill has failed to pass in a recorded vote by 207 in favor to 226 against! Can I say, “Welcome to the long emergency”.?

Alan from the islands

Is it not possible that this is not a credit crisis but a personal liquidity crisis?

Well I think so. The little software company that I work for sent out an email blast today titled " Banks won't give you credit? We will! Purchase our product in four easy payments, no interest, no fuss no muss. Guess what? We got a 35% increase in sales today, not too shabby for a down day in the global economy, eh? We're actually a specialty niche market application targeting small to medium sized manufacturers and we have a very close relationship with most of our customers. Of course we don't intend to hand out their permanent license key until they've paid in full but we fully expect that most of them will pay.

Hong Kong has lost almost 800 points today, all the European markets have triple digits losses also.

I wonder why they are perceiving this plan as a failure, it's pretty close to what Paulson asked for but with more oversight.

The TED spread is at record high this morning (http://www.bloomberg.com/apps/cbuilder?ticker1=.TEDSP%3AIND): 3.55%

Another CNN talking head came on, and said, "Imagine how much worse it would be without the bailout."

We don't have to imagine any more:

House Rejects Bailout Package, 228-205; Stocks Plunge

Title says it all. DJIA down 472 as I write this.... We're in for a ride. Wheee!

Actually, the DOW was down over 600 before the voting started. I'm trying to get a rollcall tally to see who veoted how, but both the Thomas and House Clerk sites are down or more likely overswamped. One thing is certain: It was Republicans voting against the administration that caused the bil's failure!!

	        Ayes	Noes	PRES	NV
Democratic	140	95	 	 
Republican	65	133	 	1
     TOTALS	205	228	 	1

It looks like you have 12 Democratic regions or politicians you need to buy in the revised bill-certainly not like climbing K2.

Here's a link to the roll call.

Interestingly enough, there was only one person not voting. That to me is amazing because it's a tough decision to make whether to support this bill or not and a lot of congresscritters seem to think that the solution to tough decisions is to avoid the issue by not voting. Kudos to them for actually standing up and being counted in an election year, however they voted. (You know, since that's their job and all...)

Interestingly enough, there was only one person not voting

Senator Jabba the Hut got stuck inside his new Prius.


The simple fact that is is titled:
"To amend the Internal Revenue Code of 1986 to provide earnings assistance and tax relief to members of the uniformed services, volunteer firefighters, and Peace Corps volunteers, and for other purposes"

points out most of what is bad about our gov't. How far from the actual purpose can you get?

That it failed is bad. That it was so poorly constructed is worse. I'd say Paulson failed at brinkmanship, and this lays at his and Bernanke's feet.

Feinstein ought to talk to her dissenters before "blaming" the Republicans for their votes.

You must get your politicos straight; it's Pelosi you want to villify. But I do agree about the bill's title. That alone made it deserving of a NAY vote.

Thanks, I knew it was brain fart as I typed it, but I couldn't make the name resolve correctly.

I'm actually not vilifying for once. I don't blame any rep for voting their constituency when the issue is so divided and the path is so unclear.

The problem with Pelosi is she's been going against her constituency for years, and especially since her becoming Speaker. The only way she'll get re-elected is with massive numbers of Republicans voting for her instead of their slated candidate.

From Laura Rozen

A Hill staffer writes that the Democratic leadership "both recognized that this was an incredibly tough vote for a lot of members, and they thought they had a real promise from the Republicans to deliver enough votes to put together a win. They weren't imposing party discipline because they thought they had enough Dems plus enough Repubs to get a win. They delivered their votes, and the Republicans did not deliver theirs."

If accurate, it seems the circumstances indicate finger pointing is in the right direction.

The Emergency Economic Stabilization Act of 2008 was amended to HR 3997, An Act to amend the Internal Revenue Code of 1986 to provide tax relief and protections for military personnel, and for other purposes, introduced by Rep. Charles B. Rangel (D-NY) in Oct. 2007.

You can determine how each representative voted at Final Vote Results for Roll Call 674.

From the NY Times article linked above.

One of the more contentious issues was how to limit the pay of executives whose firms seek government aid, a top priority for Democrats and even some Republican lawmakers. But it was a concern for Mr. Paulson, who worried about discouraging firms from participating in the rescue plan, which seeks to convince companies to sell potentially valuable assets to the government at relatively bargain prices.

The conceit of Paulson and the CEOs is remarkable. We are told there is a crisis of huge proportions which needs immediate action. But, the CEOs will need some time to figure out just how many millions of dollars they should make as the result of our 700 billion dollar gift to them.

Asking us to believe these companies are willing to sell assets at a discount is a joke. We are buying the equivalent of very old used cars from dealers who won't allow us to take them to a mechanic of our choice to inspect them first.

Let's start fixing the problem by firing Paulson.

The most galling thing I read was that the same firms that would be bailed out by the taxpayer were/are jockeying to be paid countless millions in "fees" to "administer" this "investment fund" "on behalf of the taxpayer". I couldn't believe it, but coming from this bunch I guess it is par for the course.

Interesting analysis from Glen Greenwald over at Salon


Bailout follows the 10 normal principles for how our government functions

And linked from there was this:

Treasury Officials Admit Bill's CEO Compensation Measure and Restrictions on Paulson Were a Farce

Treasury officials had a secret conference call with Wall Street executives. Unfortunately for them, some bloggers were on the call. The 'Treasury boys' on the call made it clear that "the tranching is a mere formality... They could take the $700 billion max as soon as the bill has passed."...

And they admitted that "the exec comp provisions sound like a joke, They DO NOT affect existing contracts, they affect only contracts entered into during the two years of the authority of this program and then affect only golden parachutes."


Let's start fixing the problem by firing Paulson.

I agree. Newt Gingrich was quoted as saying if he were still in the House, he would vote yes - very sadly. He said it was a terrible bill, but it was the only option, because it was the only option Paulson would accept.

Er...hello? In that case, isn't the obvious answer to fire Paulson?

Another CNN talking head came on, and said, "Imagine how much worse it would be without the bailout."

Looks like that talking head knew what he was talking about.


This comment of yours illustrates just how clueless you are in general.

Good work keep it up.

Oh! by the way, look over there... BONK.

I'm clueless? Give me a break dude. The market was down 250 points approximately, the talking head said it would be far worse without the bailout, the bailout failed and the market closed down nearly 800. I would say that is "far worse".

Just the facts....

The market was down about 600 points before the voting even started.

C'mon!!! You are telling me the drop from 250 points to 700 points in a matter of minutes had nothing to do with the deal falling through!! Please!


Stock markets plunged as it appeared that the measure would go down to defeat, and kept slumping into the afternoon when that appearance became a reality.

When you look at the last 5 sessions, it's clear that "irrational exuberence" overtook many and pushed the market up--sort of a mini-bubble. Today saw an adjustment back to reality as Wall Street's extortion failed.

This morning on CNN, Ali Velshi noted that futures were pointing sharply up, and said, "You can't use the stock market to evaluate this bill, it's just really volatile."

Gee, maybe because it doesn't fix any underlying problems, and in exacerbates the already critical overall US debt issue?

It's just micturating into a headwind at this point, but here's what I wrote to my three Congressmen this morning:

Dear Senator,
I should commend your diligence for working long hours through the weekend, but I find myself wishing that you had just recessed as scheduled instead.

Seven hundred billion dollars would have provided health care coverage for every uninsured American for more than a year. It could have placed a kilowatt of solar PV panels on the roof of almost every home in the entire country. Would’ve, could’ve, should’ve... but you knew all that already.

But no: Secretary Paulson gets most of this first $700B installment to pay off his colleagues/cronies at Goldman Sachs, as a reward for their greed and poor judgment. The pitiful “concessions” he offered up to Congress would be laughable, were they not such a slap in the face to the electorate. You didn’t even insist that the securities we’re buying should be marked to market!

I understand that no one is willing to take the blame for crashing the economy, especially this close to the election. But I also understand that the longer Congress plays “hot potato” with this Insolvency Crisis, the worse the ultimate consequences. Where will we look for leadership in a Legislature that is committed to maintaining an appearance of business-as-usual, without even a fig leaf of legitimacy?

I am horrified by the craven cowardice, the betrayal of the constituents, and the utter lack of accountability displayed by my elected representatives. But I am not surprised.

The coming collapse, with its abject poverty, hunger, loss, and wars, has been rendered unavoidable now for your children as well as mine, because no one would step up and speak the truth. Thank you for your continued service, Senator.

Congress had no problems voting over 650 Billion to Big War--which is a yearly bailout vote for a huge waste of resources that's rearely commented upon. Then there's all the additional Empire and War costs that bring the total Big War bialout to well beyond 1.2 Trillion. In the House, the latest Big War Bailout vote only got 39 nays.

Yeah, but who's gonna vote against Supporting Our Troops?

This time, there's no buzzword, no hot button, no canard for Congress to hide behind. Everybody hates the CEO's of the financials and their "short boys" Paulson and Bernake. Everybody. Think it'll make a diff, what 90% of the people say they DON'T WANT? Think again.

My favorite quote was by a Congressman who said his calls were coming in at around 50-50: Fifty percent No, fifty percent Hell No!

The "support our troops" votes are actually supplemental bills tacked onto the main "defense" bill. Same with VA bills.

The Public is getting fed up with responses like "So?"

Technical Analysis (TA) – 14th Post

Great, it looks like the first payment of our $700 billion (probably much more) is soon to be heading into the pockets of the Smart Money (SM). Just remember, they told us that this would “rescue” our banking system. Will the media hold them to it, or will they tout the need for more billions for the banks in the future? In the meantime, the banks in Europe react to this good news by going deeper into crisis, and Wachovia feels so good, they want have the urge to merge. I'm glad that both the Democrats and Republicans were able to “work together” for this magnificent giveaway to some of their larger campaign contributors. On the WSJ audio this morning, I heard that some Democrats yelled at Paulson – I appreciate that loud version of lip service. In addition, Frank's Marx Brothers comment totally took away any need I had for rationale, data and proof that the give-out program would work.

I would expect all of this weakness in the US banking system, and the extra borrowed money to be bad for the dollar (and good for oil). But no, the dollar is flying high this morning against the EURO. This is where I ignore all other reasons, and blame all short term price movements on the SM (it gets me going in the morning).

Because the DJI and the dollar are down today, it could lead to some selling of oil to pay for margin calls. Oil is down this morning, which could also lead to more selling, or it could lead to a reversion to the mean tomorrow.

Gold is holding its own, but considering the increase in demand for physical, I would guess that the increase would be greater if it weren't for control of the paper by the SM. Still no physical silver available here in Atlanta – while in the meantime, the paper price is relatively low... I would guess that this is somewhat bullish for oil.

The gasoline futures are at about 2.5 this morning and falling, but we still aren't able to get gas here in Atlanta. Lets see if I remember from ECON 101, “When demand exceeds supply, price does what?” Anyone expecting a big inventory increase this week? Control by the SM again?

(About the following TA analysis: I apologize for the jargon, and I have attempted to give as much of an explanation as possible in the last paragraph. Unfortunately, I have a stack (and growing) of books (and the Internet) that explains everything, so it is not possible to explain much more without overloading this post. In addition, you will want to get a copy of the chart of the oil ETF “USO” (I trade USO because I don't have an oil futures account) to see the price movement. Also, I am not using TA as a magic tool to make money, it is 80% to keep me focused on the price so that I stop out and avoid big losses. Most of the value I get in these posts could be summed up by just saying, “It looks like the price has made a big (or small) move opposite my position today, so it looks like I will stop out (or not).”)

As far as my TA on OmniTrader is concerned, for USO, I am only getting unfiltered (“unconfirmed”) signals. I am getting an long signal (71/99) signal from my volume strategy from seven days ago, a strong (98/99) long signal from my “all systems” strategy from six days ago, a weak short (26/99) signal from the unfiltered reversal strategy from yesterday, and a weak (1/5) short recognized “Trend line reversal” pattern. The overall vote is a weak (53/99) “long.”

There is a short term bearish trend line for the past six days (including today) based on the high price, there is a six day high price resistance line at about 89 and a low price resistance line at about 84. And, the low price resistance is at 73 from ten trading days ago. This morning, we have broken the bottom of the six day range, and may test the ten day low.

I would have to say that overall, this short term TA is bearish, but I may just buy on this “dip.”

(For my TA, I am using OmniTrader for short term movements (20-day backtested, end-of-day [EOD]) with the pattern recognition module (short, med, and long), and I trade USO as a proxy for oil, and UGA as a proxy for gasoline. I am using the standard strategies for breakout, trending, and reversal (all filtered and non-optimized), one that I created with all 75 systems, another one I created with only the volume systems (both optimized and unfiltered), and an unfiltered version of the reversal strategy. I use OmniTrader because is is highly automated, and somewhat easy to learn; however, I don't know if the this the “best” program out there. 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 (sometimes a badly hungover beginner). This is in no way to be considered to be investment advice, I'm the one who needs investment advice. 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.”)


Why try and "pump" a commercial here on TOD? You posted this "stratigic product placement add" before here. Omni trader must be so poorly accepted in trading circles, you find it necessary to hype and hawk it on the net. Go schlep that spiel someplace else...I doubt TOD'ers are buying stupid right now.

Nephilim: n. A race of beings mentioned in the Old Testament, described as being physically impressive and heroic. ( http://en.wiktionary.org/wiki/Nephilim )

Troll: n. A supernatural being, now especially a grotesque humanoid creature living in caves or hills or under bridges. ( http://en.wiktionary.org/wiki/troll )

One and the same...?

I think Generaly is entitled to his opinion here, just as I'm entitled to skim over it if I don't agree.

"Living under bridges"?

Carefull there fella....alot of people think the next realestate bubble will be people fighting for a place to live under that bridge!


I prefer the more accurate term (prehuman) as I most resemble cro magnon in physical appearance


Pic looks like Barabbas of lore dont ya think?

Maybe I was too strong... But i am a big beleiver in a free, open discourse on this page. Sometimes we read things we think are offensive, stupid or just plain wrong... But they are different points of view. There are many times in history folks have had an alternative point of view and have been ridiculed, only to be proven right... I for one read some things that I don't agree with, but I (try) not to attack the messenger, but am not afraid to challenge the message using fact, data and statistics. And if I'm wrong, it's a learning opportunity... I guess I'm just trying to say is "A mind, like a parachute, functions only when open."

"Sometimes we read things we think are offensive, stupid or just plain wrong... But they are different points of view. "

There's a difference between "wrong", "stupid" and "offensive", and different people draw the line differently.

But sometimes people are so blatantly offensive and absolutist that you just can't slough it off with "oh, they are different points of view". Sometimes people here, and on any public forum on the net, are simply gratuitously offensive. And you can't lump that in with stupid and wrong.

I guess I'm trying to say that you can disagree with someone without being offensive. You can say "I disagree, here's why, and here's how I see it". Or you can say "what absolute total retarded crap, you are a cretinous idiot for expressing that view, and there is absolutely nothing we have to say or learn from each other, you f**king moron!".

There has been a fair amount of the latter recently.

[edited to add: this is not specifically directed at you, geckolizard. Just a general observation on the topic. ]

Absolutely no offense.

I, um, happen to agree with what you say. :) I usually use a little humor/sarcasm to make my points... But, on the flip side, even though I disagreed with with Nephilim on this particular post, he got a tick or two up elsewhere on this page from me. I agree with open debate, and not character attacks as what seemed to be happening to Generaly.

There's a great quote from The American President that I think reflects what our focus should be... Good reading.

"America isn't easy. America is advanced citizenship. You gotta want it bad, 'cause it's gonna put up a fight. It's gonna say "You want free speech? Let's see you acknowledge a man whose words make your blood boil, who's standing center stage and advocating at the top of his lungs that which you would spend a lifetime opposing at the top of yours." You want to claim this land as the land of the free? Then the symbol of your country can't just be a flag; the symbol also has to be one of its citizens exercising his right to burn that flag in protest. Show me that, defend that, celebrate that in your classrooms. Then, you can stand up and sing about the "land of the free"... We have serious problems to solve, and we need serious people to solve them." - President Andrew Shepherd, The American President

I'm glad that both the Democrats and Republicans were able to “work together” for this magnificent giveaway to some of their larger campaign contributors.

I used this quote about a week ago... Using it again:

The only difference between the Republican and Democratic parties is the velocities with which their knees hit the floor when corporations knock on their door. That's the only difference.- Ralph Nader

And as I said last time you used it:
speed matters.

I just spotted Larry Kudlow giving everyone on TOD a negative rating for writing disparaging ecomonic posts on the message board.

Each time he rated someone down he said "Free market capitalism is the best way to prosperity."

If Larry Kudlow is giving TOD down ratings that should mean in the current reverse-world TOD ratings should actually rise. The other day there was a story in the NY Times Op-Ed written by Tom Wolfe who brought to public awareness the term "Masters of the Universe*" in his popular Novel Bonfire of the Vanities

The Masters of the Universe is a phrase from that book referring to ambitious young men (there were no women) who, starting with the 1980s, began racking up millions every year — millions! — in performance bonuses at investment banks like Salomon Brothers, Lehman Brothers, Bear Stearns, Merrill Lynch, Morgan Stanley and Goldman Sachs. The first three no longer exist. The fourth is about to be absorbed by Bank of America. The last two are being converted into plain-vanilla Our Town banks with A.T.M.’s in the lobby and, instead of Masters of the Universe, marginally adult female cashiers with wages in the mid-three figures per week, stocked with bags of exploding dye to hand the robbers along with the cash. American investment banking, the entire industry, sank without a trace in the last few days.


Kudlow should be burned in effigy.

Just think how rich we all would be if we deregulated the heroin and cocaine markets. There is also too much regulation of the pimp profession also. These things were completely legal in the 19th century yet we experienced six or seven depressions in that century compared to only one in the highly regulated 20th century. Private enterprise is essential to prosperity but it needs strict rules and strong enforcement to keep the game fair.

A few years ago the Economist was arguing for the controlled legalisation of drugs. After all compared to the war on drugs the war in Iraq is cheap and successful.

For those not around in those days, Kudlow was fired (resigned) from Bear Stearns 15 years ago for cocaine use. Both he and Cramer currently offer the short term unexpected reward that our society has come to 'expect' which is why they are so popular.

That both are admitted criminals doesn't seem to matter to the Wall Street crowd. In fact, it makes them more like that crowd.

Doesn't Kudlow also use that gag-making line "Right on America"?? Whenever I hear that my skin just crawls. It's like when Bush or Cheney appear on TV. Cannot watch/listen without feeling slightly sick. (Usually turn off TV and don't watch!)

John McNasty was only a junior at Episcopal High School ~

“Because most Americans did not know what the United States had done in Iran in 1953, few had any idea why Iranians were so angry at the country they call‘the Great Satan.’”

“Our oil companies — Gulf, Standard of New Jersey, Texaco and Mobil — received a 40 percent share of the new National Iranian Oil Company, and the shah established a tyrannical dictatorship,” Velvel writes. “So our misconduct of yesterday contributed greatly to, (and) probably caused, the terrible situation in the Middle East we find ourselves in today.”


Unlike the US public, the Iranians have long memories.

The day after 9/11 I ran to purchase a Wallstreet journal (I figured I would own a piece of history) It took 7 different locations untill I found one. I still have it and occasionally take it out and look at it. Tomorrow I expect to go and purchase another WSJ for posterity, although I doubt I will have the same trouble in locating a copy...being everyone will be paupers by then.

Future conversation between generational family members.....LITTLE GIRL; "Granddad is it true you rode machines made of steel and paid for it all with pieces of paper that had dead guys faces on them?"

Oldman; "Yes precious, its true, but we didnt know the paper was as dead as the mens faces and the cold steel machines warmed up the planet....say, want to see an old paper from back then? Let me show what was called the WSJ"

The two front pages I keep are from the 'Independent' in the UK. One headlines the 2 million people (including me) who marched in London past Downing Street on a cold February day against the imminent invasion of Iraq. The largest event in British political history, largely ignored ever since.

The other is the day they headlined peak oil. They got a lot of the details wrong but it was a MSM first.

Nephilim, you posted this morning in the DB for September 28 that Jewish law makers will not vote before sundown b/c of Rosh Hannah and the significance of the spiritual theme of 40 (days/years in the wilderness, etc.).

Today, September 29th, is the Christian Feast of St. Michael and All Angels (a.k.a. Michaelmas) that celebrates the triumph of Michael over Satan in the cosmic battle between good and evil.

IMHO, also an appropriate spiritual theme for today' market news. Who are the angels here? Who are the demons? Hold on folks. Paradise is in for a bit of purging!

There are no angels, no demons. Just billions and billions of mediocre humans.

Just billions and billions of mediocre humans... yes, who are about to learn a valuable lesson in humility.

Yes, it's true: Mediocre humans can't percieve angels and demons.

I posted that Jewish lawmakers wouldnt vote AFTER sundown. If I misstyped that....Iam sorry.
My point was...if it dont get done today...and it looks like it failed...it wont get done.

Tell me honestly, did you really think this was gonna be run up a flag pole and saluted? Everyone knew this bailout was a poison pill for the repubs.

This is all pre-engineered to slow the growth for the rationing of oil by design. The best minds in PO have predicted a more totalitarian gov in advent to PO.
Well...this is the precursor.

Nephilim, you may be right, or your timing may be off by a few years yet.

Historically, it seems financial systems in this kind of situation manage to weather a series of financial crises like this before they finally succumb. Each time they cobble together some sort of rescue plans that buy time (sometimes decades) but that ultimately fail.

We've been in this final stage of the inflation cycle now since (arguably) Nixon took us off the gold standard. We have had several crises and subsequent "rescue plans" that got us over the hump, but really just pushed the real problem (and costs) into the future.

This current crisis may be the last one, but I suspect we have a few more boondoggles to go before the dollar really becomes worthless and you buy your Heirloom issue of the WSJ.

The immediate response by the markets is not necessarily meaningful. Let's see what the next few months bring.

(and let's check the stock in our pantries, etc, just in case ;))

Agreed. Rome wasn't built in a day, and it didn't fall in a day either. But, it indeed did rise and fall...

Rome is a good example - it really was centuries of decline before the final spasms.

Unfortunately as many have pointed out, the rate of Collapse is roughly directly proportional to the complexity of the governing and financial systems (economy), and the rate of consumption of the resource base (which is typically much more rapid in more complex economies regardless of population).

The Life Cycle of our current complex civilization is probably very near it's end ... (that is a massive understatement for a highly opiniated doomer).

Republicanism has devolved into an Ideology of Idiocy, something utterly unlike Conservatism.

So this is what Republicanism has devolved into - what we are watching today. An ideology of idiocy, of sound bites, snippets of unrelated thoughts. Platitudes. Stunts and lies. Like solving the energy crisis through offshore drilling, and reducing the budget by attacking earmarks. Platitudes. Fake solutions

The embodied image of the New Republicanism is Sarah Palin. A pretty face, with a vapid feel good life story. A smile filled with sound bites incapable even of linking the ideas into any coherency. Trade is good. Russia is bad. Families are struggling, Tax Relief is needed. Cutting spending by cutting earmarks and thus balance the budget - nevermind that earmarks make up under $5 billion of a $2.8 trillion budget.

McCain is little better having declared that we won the Iraq war. Unable to identify why we are there in the first place except to bring the war to the terrorists - though they weren't ever there in the first place.

Republicanism has given us a post 9/11 world devoid of human rights, where we now have lost the ability to respond to any crisis. A post-Katrina world where disasters are now permanent hits upon their targets. FEMA cannot even provide basic basic support. Southeastern United States dry of gasoline two weeks after Hurricane Ike and reports the outages will last at least another two weeks.

How bad can the Ideology of Idiocy get?? Well, today it is looking like utter economic collapse of the United States. A dollar in freefall, the federalization of the financial services industry. A stock market that is down 25% from two years ago, and falling 200 and 300 points a day. We are witnessing the failure of investment banks, the largest insurance company in the world, the insolvency of the FDIC. The next president will have to deal with Gitmo, renditions all over the world, housing in freefall, daily bailouts of Wall Street, Russia building nuclear reactors in Venezuela and occupying Georgia. Pakistan shooting at US troops with impunity right now. A military that has been eviscerated and left hollow.

When I think it can't get any worse it does. I literally heard a snippet of Palin talking about how humans and dinosaurs walked the earth together, and watched a video of her in a church with hands being laid on her as a pastor preached about killing the snakes, stomping on the heads of the devils who opposed her.

The Ideology of Idiocy, the dittoheads, the evangelicals, the white talking heads spouting hatred on Fox news and on day time radio. And what is truly frightening to me is this: We could just end up at the end of the day on the exact same path with a John McCain Presidency and Sarah Palin Vice President. And the Republicans DO have a weapon. They still have racism. The hatred of the black man. Lies about Obama's religion, lies about his roots, lies that feed racism, that can give the white voter a reason that is not racism to not vote for Obama. ("Isn't he a Muslim??")

So we get the idiot, we get the Ideology of Idiocy to run the country after eight years of it. We literally sell the country down the river, literally destroy this great nation for the one thing that over the course of our history has always torn us apart, hurt us, weakened us. Racial hatred.

Racism. Republicans still have the race card, can use the Ideology of Idiocy to pull that card and finally, completely, once and for all, destroy the first democracy.

Don't think I can call it the "first democracy". The country was founded on the ethnic cleansing and genocide of the original inhabitants, harsh African chattel slavery and the disenfranchisement of females (contemporaneous Six Nations had a form of female franchise, so the idea was not unthought of). For many people, the USA was never as great as it is cracked up to be. I do agree that there are alot of storm clouds on the horizon right now. I'm sort of scared.

The country was founded on the ethnic cleansing and genocide of the original inhabitants, harsh African chattel slavery and the disenfranchisement of females

Sadly, I expect at least some of these things to come back with ferocity. We've come a relatively long ways, but as noted upthread, the Life Cycle of our current complex civilization is nearing an end. And we have so far to fall.

sendoilplease said: Unfortunately as many have pointed out, the rate of Collapse is roughly directly proportional to the complexity of the governing and financial systems (economy), and the rate of consumption of the resource base

Another grim dimension of the approaching storm will be the rapid reversal of the enlightenment. As Collapse unfolds, the number of scientists will steadily dwindle. Pastors and priests, on the other hand, will hold increasingly more sway in local affairs. Undoubtedly, there are some who are looking forward to this increased influence.

In terms of levels of religious fanaticism, America is already off the charts compared to other industrialized nations. I can only imagine what the situation will look like in about 10 or 20 years.

The history of the world is rife with such. The US is no more and no less guilty than any other established country on the planet, and the less established countries seem to be lining up to follow the same path. The exact times differ, but even the fair hills of Ireland and the long settled plains of China have such monstrosities in their past.

I suspect that it is just how people work, and I am amazed that this modern world has been as peaceful as it has.

First democracy or not, well said, Scotjen.
The debasement of our language is especially infuriating, when it becomes impossible to even hear a rational statement of fact from our public servants.
In the words of Garrison Keillor:

...write memos of ingenious persiflage and obfuscation, like a cat smoothing the litter box.


It is idiocy - and it is the same kind of idiocy we see in every one of these events throughout history.

The names of the "idiots" change, the exact sequence of events and their particular causes change, but the behavior of the leaders prior to collapse is pretty much the same - desperate idiocy.

This is unavoidable, it has to run it's course, and virtually all of the leaders involved will look like idiots in the end.

Paying too much attention to the trivial details - like having a retarded voodoo priestess/witch as a vice president - only bothers you if you think it matters.

And it doesn't. Who is in charge during the collapse will only change slightly the way the dust settles.

And IMO, no, you will not be able to determine now, who is the least dangerous choice for your leader - the butterfly effect is in full force and no one will be able to predict which idiot will cause the most damage.

And IMO, no, you will not be able to determine now, who is the least dangerous choice for your leader

   I think I have to, at least partially, disagree with that. Though I do consider myself a doomer, I'm a slow decline, stair-stepped doomer (though I'm sure some of those steps are gonna be real doozies).

   But I'm sick of this "no difference between the candidates" crap. Okay, maybe not a LOT of difference, but certainly some useful differences.

   I still believe that a leader who would at least get out of our way a bit, and maybe even help, so we could deal with the big changes coming, would be VASTLY better than a "denialist" type, like we've just had, who fights for every last drop of the Earth's blood.

   Of course, I still have dreams delusions of the next president coming out and apologizing profusely to the world for the worst president in history's complete blundering of the last 8 years. And doing other useful things.

   Did you hear The Omega Man say *in the debate* that "we have 3% of the world's reserves and use 25% of the worlds oil production"? I thought that was a pretty clear statement that he knows the situation.

Perhaps it's just part of the denial or bargaining stages still lingering.

When I think it can't get any worse it does. I literally heard a snippet of Palin talking about how humans and dinosaurs walked the earth together,

I read this and I couldn't believe it. Yet... here it is in the LATimes

Soon after Sarah Palin was elected mayor of the foothill town of Wasilla, Alaska, she startled a local music teacher by insisting in casual conversation that men and dinosaurs coexisted on an Earth created 6,000 years ago -- about 65 million years after scientists say most dinosaurs became extinct -- the teacher said.

I had a nice rant here all written, but I'll just skip it and say: Apparently the enlightenment was a fleeting thing. We're rapidly heading for the new dark ages. Let's just skip ahead and start burning witches and heretics already.

P.S. Did you know Palin is a Russian name? In Russia, she'd be Palina though, since her name would take a feminine ending.

*edit* I can't stand it: does she think then that oil is abiotic too? And she's supposed to know a lot about energy?!!??

But, Gwydion, she can't be all bad... After all, her husband Todd is the 'First Dude' of Alaska. Wouldn't anyone else here want to be the 'First Dude' (or 'First Chick') of Alaska or any other state (or the country for that matter)?


The opposite of Dude is Babe! Not Chick! Let's get our nomenclature straight here!


Fareed Zakarra said on CNN that the problem is not that Palin doesn't know the answer to some questions; the problem is that she doesn't even understand some of the questions.

Oh come now. The coexistence of Jesus and the dinosaurs is an established fact. This image provides indisputable visual evidence:

Undeniable Proof

The painter HAD to have been there to be able to so convincingly capture this heart-rending event.

This image also proves that the internet is over 2000 years old.

Wow! I'm sold! To think I was so deceived by the secular humanists!


Hey! It's a picture of Jesus and me. Where's Sarah? She should be in the picture.

Who woulda thunk Gore is older than Methuselah?

Apparently, you haven't visited the Creationist museum in Kentucky. Bet you didn't know Tyrannosaurus rex ate coconuts, did you?

*chuckles* i think one too many coconuts hit that guy on the head.

I would say that with a 50 caliber rifle youve got 50% odds of surviving if a polar bear is 30 feet away and really hungry. Dinasours would have been signifigantly more dangerous and harder to kill than polar bears...at least the ones more than twice the weight of polar bears. Dinasaurs had small brains; a brain shot would have been extremely difficult.

6000 years ago with at best bronze age technology killing a polar bear would have taken 6-12 badass hunters.
Bronze age tech VS. T-Rex? NOPE! Humans would have NOT been masters of Earth if Dinasours existed in 4000 BC.

Dinasuar bones are ? hundreds of feet UNDER rock! Even if you are ignorant of geology shouldn't it be intuitively obvious it would take a VERY long time for hundreds of feet of rock to build up over a dead dinasuar? The Flood of the Bible definately does not explain how Dinasuar bones are found at such depths.

If humans coexisted with Dinasuars there would be credible evidance; cavemen bone pits WITH dinasaur bones would do it for me. What is plausible to me is that Dragon myths are based on something similar to Crocodiles that the ancients encountered. Never heard of any evidence of this though.

Logic is irrelivent to the faithfull. I have faith, but I also believe in science. I have doupts in my faith but I do NOT doupt science.

Do you think people started finding dinosaur bones in the 19th century?

I'm sure many of the monsters of mythology (dragons included) were inspired by finds of dinosaur bones and somebody asking themselves WTF?!?!


If your country is getting you down, just try another one. Why suffer? America is not for everyone! It has its good points, no doubt. But it also has its minuses---especially the right wing "free market" people who have prevented a public healthcare system and public transportation.

My opinion is that America has unconsciously adhered to the Maximum Power Principle (if you don't know what this is, google it) as closely as it could. In a world of expanding energy, America could use it fastest so America got the most goodies (on credit). In other countries, cultural barriers prevented the free market crowd from exploiting oil energy as fully as it was in America.

America is an "outlier"--in its use of oil, in its incarceration rate, in its auto ownership rate, in its religiousness and in many other statistics. So what it will go through as energy declines will be special.

Emigration is also not for everyone, but it worked for me! I was pretty miserable about one thing when I was living in America: I applied for private health insurance (because as a college adjunct lecturer I didn't get health insurance). I was 23 and perfectly healthy, by the way, so I qualified easily by the way BUT since I was single they made me take an AIDS test. A man I had never seen before walked into my kitchen and drew blood with a needle from---where???. I was fuming but what could I do? I decided that these people could just KEEP their free market, but I was going to take care of myself!!!

I vowed to leave the USA. And a couple of years later, one day in June 1995 that is just what I did!

And if I hadn't liked my new country (Japan) either I would have just kept on emigrating until I found the somewhere that fitted in with my ideas. But I like it here.

You only have one life (that is until you are reincarnated!) so why spend it waiting in a gas line or bemoaning the lack of public transportation? After all, finally the whole world is a kind of "free market" in that you can vote with your feet and leave.

And the US idea on the free market also implies when people are no longer necessary (ie unemployed, living on handouts) that they might just as well not exist anymore, since they add nothing productive to the "free market".

On the other hand I can admit that it's not easy leaving friends and family. Luckily mine totally understand my position. And that helps a lot!

Well said. Voting with your feet is a rational response to living in a place that is unsustainable because of the local/regional/national culture. Sometimes I wish it were discussed here more often.

My opinion is that America has unconsciously adhered to the Maximum Power Principle (if you don't know what this is, google it)

Homer to the Max

Actually, I think the rate of collapse is based on the speed of the average communcation of the time period.

If it takes days/weeks to communicate from one end to the other of the known world, collapse will take longer than, say, today where it is near instantaneous.


Sendoilplease: I wish I were off by a few yrs or wrong altogether, but alas Iam not. This is the age of fast food, drive thru beverages, instant text messages, instantaneous lobotomies, day traders, etcetera. This is gonna happen faster then anyone thought possible...not like anyone here didnt see it comming. The financial collapse has been predicted as part and parcel of PO on here forever...at least I assume it has, me being new here and all. You must admit you had at the very least, a sneaking suspicion when you anaylised the data and found it necessary to start alternative energy YEARS AGO to prepare for the advent of PO today. All I see is hot air blowing smoke up my skirt about what NEEDS to be done and 99% of that isnt gonna work either.....ethanol this... cars running on H20 that....perpetual motion machines.
The doomers that spoke of monumental societal shifts apparently had it right all along.

I do think the current financial tragi-comedy is one of the rapid and monumental economic and cultural shifts we have been expecting, one of the many we will be experiencing.

But I think the stage of financial collapse in which the dollar really becomes completely worthless, where we as individuals start barter and refuse dollars in our own lives, is much closer now but still a few years off yet (say, 0-5 years ?).

Who knows, Time will tell.

Found this in the inbox this am. Coincidence? I think not!

Yeah, but with new technology, we will be mining those oldies for another 50 years at current rates.

Speaking of music, I suspect that a lot of people are thinking of this song:

Make the world go away
Get it off my shoulder
Say the things we used to say
And make the world, make it go away

One, thanks for the chuckle on a stressful day, for both national and personal reasons.

Two, save that graphic! That's a great demonstration on the dangers of improper cause and effect relationships.

Yea! It was the great rock and roll that brought us all that oil production!

We just need mo'betta music!

Two, save that graphic! That's a great demonstration on the dangers of improper cause and effect relationships.

Great graphic. Is it for real? Because if so they may well be correlated in an odd sense. "Best First" and its corollary "receding horizons" works in a number of fitness phase spaces connected with humans and their brains. Pleasing original rock songs achieving cultural penetrance have a much higher EROEI than they did in 1965. Similar to "the end of science"; there is still progress, but incremental and at great cost.

Feel free to downgrade me for being nuts.

On a less facetious note, everything about rock music is created to appeal to an age of cheap energy. The lyrics, the tempo, everything.

I suspect the next cohort of kids will turn their noses up on all styles of music that require amplification.

And a lot of rock music is meant to be played while driving along in your car.

The little bump in oil production and rock music in the mid 1980s I remember feeling the effects--not really understanding the "why" of it all. I was in college in Massachusetts and students played the music loudly so you could hear it outside the open dorm windows--Cindy Lauper, Madonna, Tears for Fears, etc. The music helped create a a "pumped up" feeling on the campus, as though we were kings coming into our birthright.

And many of the people I knew wanted to work in----FINANCE after graduation!! Those were the days!

How'd they get all those songs into a 500-song list? Man, they can do wonders with compression!! Er... or is that just hyper-deflation taking hold already?



PS. The Bailout has gone down in flames in the House!

Peak Rock Music - LIES - BLASPHEMY.

This is clearly wrong, we will never run out of great songs!

The Rock Age won't end due to running out of stoners...

Rock of ages, cleft for me, let me find my crude in thee....


Play a song for a man, he'll have music for 3.5 minutes. Teach a man to play guitar and he'll have music for a lifetime. (Or until the he runs out of strings or the guitar breaks.)



Tower of Power said it all in 1974:

There's only so much oil on the ground
Sooner or later there won't be much around
Tell that to your kids while you driving downtown
That there's only so much oil on the ground

Since the rock peak precedes the oil peak, that pretty much clinches the causality, that rock music creates (or maybe just pushes out) the oil. They didn't put the name ROCK into the name for nuthin. Or maybe it was simply the very high sound volumes that were popular back in the day, perhaps it is simply acoustics causing enhanced oil recovery. In stead of "drill, drill, drill", we should be shouting "drum, drum, drum"!

In the words of Ambrosia,

Nice, nice, very nice
So many people in the same device

Oil prices falling big today. 8$ at this time. I keep hearing on CNBC is that traders see big time demand destruction due to global economic slowdown. Any comments on why the sharp drop?

Huge drop came immediately after voting rejected the housing bill. Dow tanked 700 points, for a while everything looked like armageddon but most of it is on the rebound now. Oil at ~$98

There is no bailout "plan". Why to worry? Fed Pumps Further $630 Billion Into Financial System. So, here we are!

Helicopter Ben Strikes Again.

"Our mission, as set forth by the Congress is a critical one: to preserve price stability, to foster maximum sustainable growth in output and employment, and to promote a stable and efficient financial system that serves all Americans well and fairly."- Ben Bernanke

Thumbs up to a job well done!

heckof a job, Benny!

The bailout plan was rejected!!!!
Now the lousy banks will have to come up with their own bailout.
However, I suspect there will be more negotiations and an ammendment to get it to pass by tomorrow.

Yeah!!!! The market crashes, credit dries up completely, the nation goes from a recession right into a depression, mortgage holders will be thrown out of their home, no more construction so all construction workers will be out of work, millions will be out of work, children will starve! Yeah, yeah, yeah!

Hope you enjoy it folks.

Ron Patterson

An old saying: "Haste makes waste"

If Paulson & company had not been so quick to shove through an ill-conceived plan, then there would have been more time for others with informed opinions to weigh in and for a stronger consensus to be forged around a better plan. Because this road was not taken, we have not only wasted a week, we are in a far worse position than we were a week ago.

What is needed is a counter-proposal. Bernie Sanders (senator from Vermont) has one sort of, it's still a bailout of the "financial industry", but he proposes to tax the rich to pay for it. I would rather push an alternative that involves:
* investment in the real economy (infrastructure, energy) rather than "financials",
* roll back the Bush tax cuts for the rich (at the least)
* reduce military spending
* put a small tax (a few cents) on each financial transaction, that would reap a huge amount of money and also discourage the endless shuffling of "money" around in circles in "derivatives" etc
* free up the "clogged credit system" via other means. This can include forcing the banks to disclose what exactly they have on the books, rewarding the better-managed banks while letting the bad ones fail, setting up new (and closely regulated) banks if needed (with taxpayer money as seed - and owned by the taxpayers).

There is a better solution that is not tax payer funded!
People will not starve without credit, they may actually start to live within their means!

no mortgage holder will lose his house when his bank fails. His contract is still in force, as long as he makes his payments. Somebody else will pick up the note, probably raise his fees, but they can't "call it in."

No, there was a provision in the bill to help mortgage holders who were about to be evicted already. Now I hear that companies who depend on short term loans to keep their business going will simply have to close their doors. Doors will be closing all over America. Unless something is done in the next couple of weeks, this could be far worse than the last great depression.

Yet the cheering continues. Gad!

Many of the provisions in the bill providing protection for homeowners and renters DON'T require billions in bailout dollars to implement. Indeed, most can be done with little or no money being appropriated at all.

The whole bill and its purported pupposes is/was very dishonest and was to be a bipartisan railroad-job--Bush called it "his bill."

Bill's Discussion Draft

The government may be liable to bail out depositors in FDIC insured banks. The government gaurenteed some mortgage backed securities. May not reward those scoundrels who invested their shareholders money unwisely. A bank is no different than an auto manufacturer, restaurant, or retail store that has financial difficulties and needs bailing out. Credit is hard to get for people who are credit risks. It should have been harder to get credit rather than easier, given the hoardes of people who have walked away from paying their debts.

Unless something is done in the next couple of weeks, this could be far worse than the last great depression.

The crisis we are experiencing is a solvency crisis, not a liquidity crisis. Throwing yet another $1,000,000,000,000 at the problem won't make it go away. It might provide some time for the smart money to get out but the payment for our exesses of the past 20 years will still come due.

The problem with the bailout bill, even in its current 100+ page form, is that it addresses the current symptoms of the problem rather than the root cause while concentrating near dictatorial power in the hands of a political appointee. I believe that Mark Denninger has correctly identified trust as the immediate problem and he proposes an excellent solution:

The solution is simple, it is elegant, and it will work.

1. Force all off-balance sheet "assets" back onto the balance sheet, and force the valuation models and identification of individual assets out of Level 3 and into 10Qs and 10Ks. Do it now.
2. Force all OTC derivatives onto a regulated exchange similar to that used by listed options in the equity markets. This permanently defuses the derivatives time bomb. Give market participants 90 days; any that are not listed in 90 days are declared void; let the participants sue each other if they can't prove capital adequacy.
3. Force leverage by all institutions to no more than 12:1. The SEC intentionally dropped broker/dealer leverage limits in 2004; prior to that date 12:1 was the limit. Every firm that has failed had double or more the leverage of that former 12:1 limit. Enact this with a six month time limit and require 1/6th of the excess taken down monthly.

Simple, straightforward, honest and no one gets unreasonable power. It places 'rule of law' over 'rule of man'. But what of the current bill?

Will the market go down significantly if we don't pass the bailout bill? -- Yes it will.

Will the market go down significantly if we do pass the bill? -- Yes it will.

There are folks who have been warning of a dramatic financial crisis for years: Bill Bonner, Jim Pupluva, Doug Noland, Mark Denninger, etc. The didn't use any fancy financial analysis, just common sense to argue that our economic and financial systems are seriously out-of-whack. Anyone who has followed them is not at all surprised by what is happening now, only by how long it took us to get here.

So that's why I am still opposed to the bailout bill -- it distracts from the real problem and only delays the inevitable. I say that forcing banks to come clean about what's on their books is the important first step toward dealing with this crisis.

Will it solve the problem? No.

Are we headed for another Great Depression? Most likely..

Is there anything else we could do to avoid it? Not really.

Will politicians and an uninformed public make incredibly bad decisions along the way? Definitely!

Will better information help everyone make better decisions? -- It can't hurt!

Happy Exploring for safe places to put your money!

-- Jon

I think Denninger's plan has a far better chance of working than Paulson's plan.

In any case, there is no reason to rush this. Bush & Co. did the same thing with the Iraq war. Hurry up, we have to start the bombing before summer in Iraq, we can't keep the troops in a state of readiness too long, etc.

Why should we believe Paulson instead of over a hundred economists?

I don't know why we even need complex derivatives for commercial bank purposes. It would seem that simpler constructs would do for all primary lenders, with only high finance dealing with the blended constructions.

Any solution needs to resolve problems on Main Street as well as on Wall Street. That means personal debt and commercial needs. Personal debt needs credit card reform (no forgiveness, but capped rates for closed accounts, and rollback of usury fees). Mortgage relief needs to be equally given to good debtors as well as bad, else you just roll the defaults uphill as devaluation expands.

The whole proposal was a farce-logically, any firm going to the taxpayer for a handout because their cowboy management blew the farm betting on derivatives should be required to wind down their derivative exposure as a requirement of being a welfare baby. This wasn't even mentioned in the proposal.

I've previously talked about ING Direct's home mortgage business. They decided to keep the loans on their own books, and since they couldn't fund 30 year mortgages, they did five year fixed rate loans, which floated annually thereafter. Results?

From 2000 to 2007, they made 100,000 loans, and the total number of foreclosures through the end of 2007 was fifteen. Not 15%, a total of fifteen, or about two per year.

The money they are intending to prop up these failures will be much better spent helping people through the hard times that are coming, but it is imperative that we also refrain from helping individuals that made bad choices.

While not spending the taxpayers money is best, if it is spent then it should be strictly on the basis of dividing the X$ by the number of current citizen taxpayers and sending everyone their share with no other consideration.

Darwinian, it has to come down so why not cheer about it. We have been "enchanted" by this abstraction called money for far too long, to the point where we have almost destroyed the biosphere.

Yes, most of what we find comfortable and familiar will go, and not a moment too soon, billions will die, and not a moment too soon.

Most of what we find familiar and comfortable has a name: Planetary Cancer.

I'm laughing loud and rubbing my hands with glee, watching the cataclysm live via the net.

Watching the chemotherapy take out the disease is better than sex. My dream is within my grasp.

Yes I agree Lucifer, billions will die. Somehow I just don't find that all that cheerful. Now pardon me while I pour myself another drink.

No pardon needed, I'll join you in the drink I think.

wadr, maybe now's not the best time to booze yr brain ...
better meditate on exactly where am i right now? and look even more directly and unselfishly at the big messes all around.
just a suggestion.

What kind of business "depends on short term loans to keep going?" They are already out of business!

It is interesting that nearly every PO advocate can see the nonsense of economists who claim an economic "solution" to PO based on additional supply due to rising price. Yet too many people on this board fail to see the similar nonsensical argument that you can "solve" an unsound balance of trade and debt level by taking away accountability from bankers through a taxpayer bailout.

If the mortgage banks who own house notes fail and disappear for bad Wall Street betting why not declare their debtors free and clear [instead of selling off the assets for pennies on the dollar to another mortgage banker who will raise the fees while the debtors still have huge old debts on much lower priced homes]-

"Congrats Harry and Harriet Homeowner mortgagees [or Barney and Betty Businessowner Borrower or David and Darlene Developer leveragees]: you just won the mortgage LOTTERY! What are you gonna do next?"

- Spend your now paid off housing budget in your local economy? Hire more workers for your business [or increase their pay packages]? Redesign all those house plans to be more smaller and more energy efficient so they'll be more marketable?

[I know, I know. It doesn't work that way. Just dreaming!]

Most of what you describe is already happening, and would have regradless of this "bailout" bill

For the first time in a long time, the House voted in the Peoples's Interest, and only a Republican revolt made that result possible. The bill's main failure is its being a blank check despite the so-called added "safeguards" that doesn't even begin to address the root of the problem.

They were warned, they didn't listen. Why the hell should we care?

Right, why the hell should we care if another 20 to 30 million people are thrown out of work? If money completely dries up, if banks go bust, many millions will be thrown out of work. Children will starve right beside their parents. But why should we care?


They should have voted for it. Held their noses, but voted for it.

The chastisment of the money lenders could then have followed at a leisurely pace.

If 20 million people are thrown out of work it will not be because of a rejected bailout.
It will be a needed bank correction to make up for some of the massive greed.
If all they do is support financials, then they need a real job anyway.
This total reliance on credit and loans has to stop.
If companies cannot make payroll without loans, so be it.
People can go back to hard cash again instead of all the phony money.
IF the rich people suffer, and lose their wealth, they deserve it for being so greedy.
All I have is 1 years salary in an account. The Treasury, Wall Street and the President are so far removed from the average American that they do not understand why we do not want a bailout!
Let the rich people pay for the bailout, not me.
I do not want $10K of my money helping some greedy bank make more money.
Who needs a bank anyway? I can put my money into hard assets.
My grandparents lived through the great depression and did not starve.

This may be the only way to teach a nation and it's citizens to live within their means. It's certainly something they don't teach in school!

Ron: What a farce-700 billion dollars (to start) would put a hell of a lot of people to work. Some estimates for this Paulson scam went as high as 7 trillion-don't tell me 7 trillion dollars cannot jumpstart the economy if used logically. I forgot-that is wasteful socialism-it is only justified if the money is thrown down the rat hole never to return to the economy.

Some estimates for this Paulson scam went as high as 7 trillion-

Brian, either you just made up this 7 trillion figure or some idiot on the net just made it up. My aunt Fanny could have said "I think this scam could go as high as 7 trillion" and I would have been correct in saying what you did. I don't believe a damn word of it. So give us the source of this 7 trillion figure and then we will discuss it. Else please stop coming up with these wild exaggerations.

Ron Patterson

Fine-present your evidence for the actual bill (or stop with the insults)-and don't say 700 billion dollars-that is a joke.

Just as I thought, you pulled that 7 trillion figure right out of your posterior. Brian, please quote actual figures that you can back up or stop posting altogether. Again:

Some estimates for this Paulson scam went as high as 7 trillion..

You just made that crap up Brian! You just make up crap! End of story.

Ron Patterson

There are numerous sources on this one-here is one http://market-ticker.denninger.net/archives/587-The-Mother-Of-All-Frauds...

It is not there Brian. Again, you just made it all up. This was wrote well before the new bill, that was rejected today, was ever written. And there was nothing in today's bill that gave Paulson or his successors to do anything concerning Fanny or Freddy. And it talks about 20% of the Fanny and Freddy debt of 5.3 trillion. That comes to just over one billion.

However there was NOTHING in the bill rejected today that authorized anything concerning Fanny and Freddy. That was handled by the Fed because Freddy and Freddy were quasi-sponsored by the federal government anyway. Today's failed bill had nothing to do with Freddy or Fanny.

At any rate the bill today authorized 700 billion, in three installments, if needed, and not one penny more. Anyone who makes that out to be 7 trillion is engaging in nothing more than wild hyperbole.

How about...

"Where did you get that figure? Can you provide a reference?"

But no, it's "you just make up crap! end of story". You just might consider a slightly less absolutist, totalizing style, and maybe you'd be able to make some real points. As it is, you just shut down any communication, and seem like a jerk. If that's what you want, fine.

But it really seems to me that you confuse being "right" with being "effective".

Sgage, here is what I said:

So give us the source of this 7 trillion figure and then we will discuss it.

But apparently you failed to read that post where I asked him to provide his source. Please do so next time before making such a rude remark. Thank you kindly.

Here Faber estimates 5 trillion, since Denninger's infinite estimate isn't enough for you. Actually, I can't remember where I read 7 trillion (whether from Denninger, Faber, Mish, Noland, Puplava-who knows?)-if I had I would have said it, Einstein. You are a master at focusing everything on the irrelevant. Did someone estimate 7 trillion instead of the reported 700 billion? Why no, it was 6 trillion (and the 6 trillion estimate wasn't notarized). http://www.lifeaftertheoilcrash.net/Archives2008/WhitneyDetonationSeptem...

Brian, this article says it may take as much as 5 trillion, (not 6). The bill however authorized 700 billion, in three installments. If it would really take 5 trillion, then they would fail because not one more penny would have been authorized. The bill was not open ended! 700 billion was all that would have been authorized.

The idea that they could get 5, 6, or 7 trillion when only 700 billion would have been authorized is truly bizarre. If that be the case then they could just authorize 7 thousand and then get 7 trillion because .... because.... because the fuzzy logic of some people says they could get any amount no matter how much was authorized.

Hi Ron,

The other day you said you weren't sure what the correct path was.

I was wondering...in all sincerity...if you've come to any new insights about this.

We've already seen that 20-30 million thrown out of work due solely to a political-economic pseudo philosophy. We already have children starving. I wrote on this forum almost two years ago that the actual numbers of US citizens lacking gainful employment, healthcare, and proper clothing and nutrition was GREATER than those at the time of FDR's One Third of a Nation speech, and there was zero comment.

Lots of warning bells were being rang years before the current "crisis." BUA was allowed to continue--exhorted on is more proper. Over the last month, we've received ten different come-ons to "establish" pre-approved credit cards. But, how can that eb if the credit markets are "all locked up"?

Some underwriters of MBS still maintain their AAA ratings and have yet to default on any payments to bond holders. How can that be!!!! ALL MBS are "Toxic paper" that MUST be foisted onto the taxpayer, not eaten by the unscurpuplous companies that issued it or, like Paulson's Goldman Sachs, marketed it and then shorted the hell out of the indexes to create the current crisis.

I can't think of one now deceased family memeber who would have backed the "bailout." Certainly, none of our living family does. All of us--then and now--lived within our means and mostly followed the rules. And most could be called La Follette Progressive Republicans, which is to say they would likely be Greens today.

Because doing this so-called "bailout" will not stop the scenarios you describe. We are about to undergo a deflation/depression. No sense in making sure a hyper-inflation goes with it.
If we are going to spend this money, don't bailout banks, don't bailout people over their heads. Use it for something solid...like infrastructure. I would rather take 700B and give it to all of the people than bailout the banks in a "cash for trash" exchange.

I think it's interesting that this, the most doomerish site I frequent, has such a broad number of people screaming for the bailout.

1) The numbers rarely lie. We've known we're in a housing bubble and a debt bubble for a long time. It's popping now. How can we expect the market NOT to contract significantly while people watch 25-35% of the house equity in the country evaporate?

2) Even after this drop, stocks are still way high compared to some commodities like gold, and we've only unwound a few years of massive return. Anybody see a return to 1999 levels, or worse?. Plus, more companies are "service related" than ever before, and we have a trade imbalance. The index really needs to go way down and grow back up based more on industrial output.

3) Any money we spend needs to help individuals keep working and to build more sustainable infrastructure. A nice long bout of inflation really won't help that much. If we're going to spend money, let's spend it on energy-related projects.

4) Pain now means less pain later. If we can slow the speeding train, it will crash less forcefully into peak oil. Yeah, it'll hide it for another year or two, but it'll give more people time to adjust their lives. I could sure use the time!

I don't really know how to call a bottom on the drop, but I really doubt the washout is done. There are likely many players who were hoping for a bailout today that will soon be forced to exit positions at a loss, go bankrupt, or face loss of investor confidence and have money pulled. A run to the exits by investors might trip up hedge fund selling and hit us another go-round tomorrow, I imagine.

millions will be out of work, children will starve!

Fear not.
Princess Sarah is already communicating with the Farce,

"Help us Obi-Wan Cain-noknee. You're our last hope."

It's going to be interesting to see what happens in Asia, starting in a few hours--after a record point drop in the Dow, with credit markets freezing up.

Staff, please bear with me and allow me to post:

For the first time in a very, very long time I can say I am proud of my fellow Americans. It may not last past tomorrow, but for today I can dream they might also stand in the face of energy descent, economic destruction and climate change...

Damned fine moment.


Power to the People!

So far. There will be a lot of arm-twisting tonight, and probably an attempt to pass it again soon.

Definitely-IMO the bank bailout is going to happen-all this vote did was change the final makeup of the bill somewhat. My guess is that the final draft that is approved will be throwing money at more parties than just corrupt Wall Street cowboys. Realistically, they need to buy maybe 12 votes-shouldn't be insurmountable (they have a real big piggy bank all Americans are paying for).

Thus, Leanan: I sent out two-mails to friends and family before the vote and have turned them into a blog post. I am asking them to not let up and get edumacated ASAP.

Of Crashes, Failures and Bailouts


I believe the people sent a lot of e-mail to their congresscriters. In the house, those who thought they had locks on re-election voted for the bill. Those who weren't sure voted against it. Two thirds of the Senators are not up for re-election so they would be for it, just in case the forcast badness was true. The other third who are up for re-election will have to go home and tell the people in their jurisdiction why they wanted to give $700 billion to bankers. No one likes bankers ... they will give you an unbrella on a sunny day and take it away if it clouds up.

One of the reasons this all happened was Barney Franks (the only one I remember distinctly) and others; "We have to make sure the poor have housing of their own ... " It is not politically correct to say "Tough S***". So the banks made it possible for them to over extend. Congress caused the problem years ago and, of course, they won't own up to it now so 700 billion of your money to get congress off the hook is a good deal.

I'm an old guy and I sure didn't start off in a McMansion. It was a 27 foot trailer for three of us and later an 800 sq foot house. 50 years later we are doing OK with some land and nice house paid for. Now the congress that caused it in the first place is going to f*** it up for those of us that worked damn hard and didn't overspend to get here.

Ron: You and I are doomers so what's the difference if the country gets a head start down the same road with a financial crises. At least there will be some crude for an easier transition to a pastorial life style.

Vaya Con Dios or Good random luck

Your choice Drummers

BTW: GeckoLizard, that was not you, you are not old enough. That was your old man. :-)

Someone's been reading my bio :)

At 30 years young... Ahh... This is fun to watch. I've been telling people this stuff for about a year and a half, and now I've been vindicated (unfortunately).

However, I'm old enough to be a widower (Wife passed about 2 months ago, cancer... Which is why I disappeared for a while.) She didn't live to see what's coming, dunno if it's a blessing or a curse. Her life insurance has allowed me buy a new Prius and be debt free except for a mortgage... Social Security is coming in for the kids (ages 3 and 5), but with what's happening with the Government we'll see how long that lasts. I am closing in less than a month on my first house, locking in the low rate while I still can (I expect interest rates to shoot up to la la land in the next 12 months). The funny thing about house hunting: I got a lot of attention from both the morgage officer at the bank and the realtor. Why? Ain't a whole lot of other people looking for houses. It's a nice, small, very well kept energy efficient ranch style brick house for <$120K... 20% down brings me to around $95K, and I'll probably pay more than that in a bit... It's not a McMansion (those disgust me)... Gonna put energy efficient windows, geothermal heat/cooling, and insulate the pi$$ out of it. It's near the middle of town: short walking distance from my bank (actually, credit union- I don't trust banks), the gas station, parks, a school, and the bus route... And I'll hunker down with the kids in the small city I live in as everything goes down in flames. I'm hoping for Argentina style inflation so I can pay my house off WAY less than 30 years. This'll be one hell of a ride kiddies... Fasten your seat belts.

I'm sorry for your loss. I know the rest of this stuff is of little consequence when you finally understand what real life is all about. Hang in there.

On your post, I've been telling people for a year and a half and more that housing prices were not sustainable and the banks were way over levered and headed for a huge fall. Nobody looks at my like I'm a crazy person anymore.

I was telling my boss today that anyone who really wanted to know what was happening could have found out easily enough and prepared for it. I told him the Peak Oil is even better understood, that the information is readily available, and pretending that it isn't going to happen doesn't mean it won't.

I'm sick of all the whining from the entire US about "How could this happen?" when it was clear as day it was happening and what the results would be.

Take the kids to the park this weekend and have some fun. You're obviously smart so you'll be fine no matter what happens.

Welcome back.

I am truly sorry for your loss.

...kids (ages 3 and 5)...

Children are the greatest happiness that a man can know.

Love your children and spend as much time with them as you possibly can - the years will pass faster than you imagine.

Best of luck with everything...

Thank you for your condolances... It is appreciated.


Been where you are, a brain tumor. Hard times. Luckily, I've found another and even have a new son. I hope you and your children will be as lucky as I have been... whatever that means to you all.


My condolences

and my accolades !

Your children chose well in their father :-)

Best Hopes for the children and their father,


I'm sorry for your loss. Take care of your blessings (and keep those seat belts fastened).

Hello TODers,

I think it is interesting to monitor I-NPK companies as a proxy for the Credit Crisis + Peak Everything. Remember that job specialization is dependent upon food surpluses.

Recall the earlier weblink where traders were selling because they thought farmers wouldn't have enough cash or be extended sufficient credit-->thus to be denied the crucial Liebscher's Optima balance of Element inputs they needed in a timely manner for subsequent high harvest yields.

Possible Liebig Minimum evidence in Bangladesh:

Pest attack makes Aman prospect bleak in 5 N dists

DAE officials said dearth of potash usually causes disease in paddy fields. Shortage of potash weakens paddy plants and make them susceptible to attack by leaf blight disease and brown plant hopper.

..Agronomists said potash makes paddy plants strong and phosphate helps them attain maturity. Most farmers could not buy the fertilisers this year due to their high prices, they said.
Of course, an extended google search shows that insufficient I-NPK application is becoming increasingly common in many poor countries.

Obviously, the hardest Liebig Minimum to overcome is when your topsoil and O-NPK composts head offshore [see Haiti]. To compound the misery, newslinks also said most of Haiti's minimal amounts of I-NPK decided to go for a saltwater swim, too.

IMO, I-NPK shares getting hammered [POT @$240/share last June, at the current moment @$127/share] is not good news. If all the agri-shares pricing decline is totaled up-->That is a lot of money that went where?

Why isn't the decline in the share price good news? Afaict its a case of traders thinking "we're headed for recession, therefore commodity demand drops and prices come down, therefore sell commodity stocks". I'd say its the rare trader who understands the fundamentals underlying NPK demand.

In other words, the decline is simply a buying opportunity. Of course, the share prices could continue to drop for some time yet ;)

Hello Commuter,

Thxs for responding. The decline in the share price is bad for farmers because they cannot get enough I-NPK now around the globe, and the price/ton is still projected to go higher. The traders are selling shares because they suspect and/or realize that farmers cannot get adequate financing to offset the still rising price/ton. A lot of farmers could go broke waiting for the I-NPK price/ton to go down.

Storms Keep Coming for Fertilizer Industry

“Long-term, however, our concerns are the same ones we’ve been expressing for some time about fertilizer supplies being very tight,” Schmura adds.

In addition, she says dealers are facing unprecedented restricted credit with the collapse of financial markets.

All indicators point to increasing fertilizer costs and tight supplies again this year, making it imperative that farmers talk to dealers about their needs as soon as possible, says Schmura.

Farmers are already feeling the pinch as they try to lock in spring fertilizer.

“If I want 32% liquid nitrogen for spring, I have to pay for it all up front now,” says one farmer from Southwest Minnesota. “My co-op wouldn’t even give me a price on urea for spring delivery. I hope that doesn’t mean there is none available.” As for orders of phosphorous and potassium, farmers are being told they must pay for 25% this fall and the remainder in full by January 10, 2009.

Fertilizer prices expected to double

Norman Larter, a dairy farmer in Winsloe, north of Charlottetown, grows much of his own feed. He's been told by his fertilizer supplier that prices are expected to double next year.... "If things don't change, there's going to be nobody left farming," he said.

Two fertilizer companies told CBC News the price of some ingredients used to make fertilizer, including potash and nitrogen, are increasing.
My earlier posts on FF/I-NPK latency delays help explain why I-NPK prices can rise for a long time even as crude oil pricing diminishes.

Bill Joyce, CEO of Potash Corporation, expects fertilizer prices to increase further over next 5 years as no new significant supply is expected to come before 2012. Dwindling global stock to use ratio, which has declined from 23.0% in 2004 to 18.8% in 2007(Source: Food and Agriculture Organization), has intensified global food crisis further boosting demand for fertilizer.

Rob Robertson, vice president/governmental relations for the Nebraska Farm Bureau, said state farmers and ranchers could feel the impact of the nation's financial blues next year. That would be even more likely if access to credit becomes tighter and input costs -- such as fuel, fertilizer and seed -- continue to soar.

Also, Robertson said that, if commodity prices take a nose dive because of the current financial turmoil, that would be devastating to producers, especially with input costs going up.

"Fertilizer prices have basically doubled in the past two years and continue to rise," Francl said.

He said farmers are currently being asked to make commitments for their 2009 fertilizer needs and to pay a substantial portion of that commitment, sometimes 100 percent, up front.

"The credit function of these transactions is being shifted from the fertilizer producers and retail dealers to the farmers," Francl said. "The net result is that it increases the farmers' cost."
Imagine if the only way you could buy any food inputs for your family is to prepay cash six months to a year ahead.

I hope these links and my additional text help you understand the developing situation. That is just another reason why I have been long advocating for the ramping of O-NPK recycling. Pres. Bill Clinton is now on record for the same O-NPK ramp by his Global Initiative calling for the landfills to be shut, then everything recycled, too.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

I was surprised and pleased that 1) my Dem. Rep. voted against the bailout and 2) it failed. But how can we face such a moment without fear and shaking.

I can hear the combine in the field. The soybeans are coming out-- harvested today. The commodity price for soybean dropped the maximum limit today. Probably will tomorrow as well. But the seed, fertilizer, land rent, diesel are already paid. We stand a lot to lose. What if we lose the last few remaining small farmers. The ones who know how to grow food. When I say food I don't just mean GMO corn and soybeans.

I'm glad we didn't bail the Wallstreet Boys out-- but they're a nasty bunch and might come after us yet.

It's quite likely that the harvester of the soybeans locked in the sale price through the futures market while the price was higher.

Yes-- but many had been feeling burnt by locking on on futures last year. So, are coming into market and others will hold on waiting to see what prices do. There are still people around here who tell the tale that during the Depression you could spend more transporting your crop to market than you could get for it. People hungry- but no money to buy foodstuffs.

Yeah, the massive sin during the Depression was the availability of pleanty amidst a sea of want. Both sides of my family farmed in Southern California during the Depression, and I've seen their tax returns and other business-related documents to know they were very lucky when compared to their kin from Ohio and Indiana.

Its X-Rated.

Lots of swearing.

But it might cheer you up.


Its best with the sound on.

Would like to see same done for USA, that was done well IMHO.

August global oil supply fell by 1.0 mb/d to 86.8 mb/d -- IEA


Check the growing OPEC spare capacity at the above website.

Peak oil is not in the rear view mirror.

Rainsong, this was discussed almost three weeks ago when the report first came out. No one really knows what OPEC's spare capacity is and they certainly are not taking the IEA's word for it, due to their terrible record of predicting production data in the past. It is likely however that Peak Oil IS in the rear view mirror.

Nigeria was rumored to have some spare capacity. Iraq was rumored to be capable of adding capacity. The Saudis may be resting certain fields or wells. Am not sure you can make an airtight case to prove the IEA lacks knowledge... but you might check their stated Kuwait reserves.

Middle East regional oil use of 8.24mn b/d in 2001 projected to rise to around 11.84mn b/d by 2012.


Growth of over 300,000 barrels consumption per year.

The Middle East can afford to consume more oil than China, and they have a much smaller population and a small agricultural base with limited manufacturing capability.

Japan contains almost no oilfields and lacks major farming infrastructure, yet they are a major world economy.

Hello TODers,

Got Gold Report – Gold, Silver Demand White Hot

Physical Metals Command High Premiums in the U.S.

Widespread reports of bullion dealers large and small running out of physical gold and silver products in the U.S. are true. Premiums are the amount over the spot price paid or charged by dealers.

This time, however, not only has there not been the usual flow of metal back into the market, dealers report that there are many more new investors that want to buy than usual.

So, we have more buyers for less actual metal.
I am not a Precious Metals [PM] expert, or a coin collector, but I wonder if an uncirculated, numismatic quality PM-coin will be generally easier to trade because its provenance will be unquestioned.

The buyer doesn't have to worry about coin-shaving or other physical adulteration because the seller has no reason ever to reduce the numismatic quality.

Lots of people have the well-worn, Pre-'66, much-circulated PM-coins, but easily establishing the full metallic value, especially if that value goes really high/oz postPeak, takes more time and effort than a numismatic coin.

Do the PM-bugs agree with this assessment?

As an aside: Let's hope the hoarding demand for I/O-NPK, heirloom seeds, wheelbarrows, and bicycles becomes white hot, too.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Ask a hundred gold bugs and probably get a hundred answers. The Eagles (gold and silver) always carry a premium, especially Silver Eagles. Good luck getting any silver eagles now. I use CNI, one of the largest coin dealers in the country, and they have been out of almost all silver coins and many gold coins ever since the big take-down in PMs occurred three or four weeks ago. BullionDirect is taking orders, but warns of delays. The Pre-64 coins (junk silver) are pretty popular and I don't think it's all that difficult to distinguish them from the "slugs" we use today. It's all good!

Some further thought for your consideration:

As noted upthread by another TODer [see Denninger + Trust], in the postPeak years ahead creating a minimal, instantaneous degree of trust may save your life.

I am picturing myself as an older man shuffling along with a small crust of bread when some drugged out youngsters confront me. If I offer them a numismatic-quality coin: they may let me continue shuffling along uninjured because the coin quality instantly convinced them of its legitimacy of value [I created a small degree of trust between the kids and I].

Contrast this offer versus presenting a well-used PM-coin where they instantly proclaim that it is a worthless fake and/or not worth much. This creates instant MIS-TRUST in their minds--> they feel insulted, then angry, then they really give me a thorough thrashing leaving me maimed and bleeding in the gutter. Again, no different than one banker trying to trade a doubtful toxic security to another banker [Denninger + trust again]--> bad things happen when a smooth transaction cannot be negotiated.

As posted before: the future belongs to the young, always has, always will. Prepare yourself to deal with kids like the one in this photo:


Once the Overshoot Decline gets rolling, I have no doubt we will see instances of people being loaded into boxcars to be shipped out. Recall the historical examples of dumping Armenians in the scorching desert, the cramming of people into German WWII boxcars, and so on...

If you are in possession of a numismatic coin, and everyone else has a well-worn coin: If you are lucky-->maybe your high-quality coin will instantly create the necessary 'Degree of Trust' in that soldier's mind [outside guarding your stifling boxcar], that he decides to give you a potentially lifesaving long guzzle of water from his canteen.

See http://dieoff.org/page226.htm

ATTN: Dieoff.org appears to have a new format, please check it out!

Dieoff.com took me to some kind of marketing spamsite, when it used to always take me to Jay's Dieoff. IMO, this is just another sign of decline. So please remember DIEOFF.ORG, not DIEOFF.COM.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Instead of a precious metal coin, you could try giving them lead. In the form of a .45 hollow point at close range. Personally, I'm a lover, not a fighter, but if some punk bashing my head in and ripping me off becomes a distinct possiblility, I'll make sure he gets paid for his efforts.

SubKommander Dred

Bring a wheelbarrow to work and cash your paycheck on your lunch hour and quick by groceries before you go home!!


Youll need a wheelbarrow to put all the notes in once you cash the paycheck and will have to buy groceries at lunchtime (noonish) because inflation will make the wheelbarrow full of cash worthless by 5pm.

I meant, is that the scenario caused by not passing the bailout or passing the bailout?

Or are those explicit instructions for the end of this week? Because I don't expect to get a raise by then, hyperinflation or not.

I think it's something like: No Bill - No Money, Yes Bill - Money not worth anything BUT: the wheelbarrow will always come in handy:-}

All the debt created in the last x decades has been predicated upon infinite growth, being able to produce the stuff in the future to justify the debt today. As we start to hit the edges of growth constraints the fiscal model will fail and most probably catastrophically because of it's invalid core assumption.

As I see the problem:
The stuff already exists, it just has not been paid for an cannot be paid for from non-existant future earnings.

So do we;

1. throw all the people that cannot pay for stuff out of their homes and give the homes and stuff back to the failing finance system or
2. Do we cancel all houshold debt by fiat and give the finance system the big finger, leaving people with shelter and a small resource base for food production, their urban garden.

What is the humane choice

Where is the ultimate executive power in a society, ultimately the people have executive power they just will not exercise it until things get bad, then they march in the streets, and if there is no improvement then they go to war with administrations which unfortunately denegrates to all out rioting and civil war. That's Life on this mad little planet.

All of the above is a gross oversimplification.

Money has no value, it never did, it never will. It is an abstraction, an illusion, a tool that is now broken.

Time to make a new tool.

I'm taking cash out of the ATM every day. Everyone I know is doing the same, and I heard (Rumour Only - No link) that there is an MOL for cash too, and if it gets low, people are going to hoard.

I'm just telling you want I heard at work, and a guy on CNBC made a passing comment a few minutes ago about ATMs running out of money.

I'm a smart guy, but I've never heard such talk and now twice in one day. I don't like the coincidence.

Good luck everyone. This might not be the next Great Depression, but it will at least be the Great Recession.

No matter what you think of Mish, he did a fine job firing up the populace on the bailout bill. Kudos Mike for your grassroots efforts to make some congress members stop, think and become nervous about their jobs.

How Voter Fury Stopped The Bailout

I agree. I actually emailed my Critters after reading his plea.

They can take a few weeks and come up with a plan. It won't kill them or us.

I don't think more time enhances the likelihood of passage. One legislator said the phone calls on the plan were running 50/50 Half said no and half said hell no. These guys are all up for reelection in a month. Timing couldn't be better or worse, depending on your point of view.

Australia's new climate proposal came out an hour ago but nobody took any notice

Shorter version; pseudo carbon tax next 2 years then cap and trade aiming for 550 ppm max by 2050 with international help. Auction revenue goes for green makeovers and some handouts to crybaby industries.

Thanks to Wall St even Australia's huge mining industry is now worried. Therefore I guess we will burn everything to keep the wheels turning. With 550 ppm the Great Barrier Reef is toast, well lightly simmered.

550 ppm!?       As a target?!


As Dubai runs out of oil reserves and production diminishes, they build extravagant resorts to try to attract tourists:


Yes. Tourists who will very soon have no way to get to Dubai. At least it will be a nice place for the invading armies to put up for a while.

Hello TODers,

IMO, Predictive Collapse & Directed Decline seems intuitively obvious to me with Russia going postPeak plus the Russian stock market being closed again. Putin and his Boyz need to move quickly to establish, then consolidate Asimov's Foundations and Strategic Element Control:

Russia plows on -- Oligarchs expand their reach

..Meanwhile, the Kremlin's loyal oligarchs consolidate control over Ukraine's ports as part of their campaign to take hold of the region's scarce commodities. Going far beyond energy, the Russian strategy now expands to food resources, threatening to leave millions of people cold and starving.

In February 2008, according to Ukrainian media reports, Russia's FedComInvest assumed control of Sumykhimprom, Ukraine's largest fertilizer manufacturer, whose products are essential to growing healthy crops and increasing Ukraine agricultural yields. FedComInvest belongs to the leading Russian sulfur supplier, FedCom, which generates some $2 billion in annual sales.
IMO, it seems that Putin understands that job specialization depends upon food surpluses, and the I-NPK and sulfur input control over Ukrainian topsoil maybe the best postPeak way to insure that future Ukrainian crops will mostly head to Russia, if required.

As posted before: people will do just about anything to get NPK and the other trace Elements: burning every tree in sight to get potash, cat mummies, human bones, bird & bat guano shipped around the world, the scorching Atacama nitrates, sulfur extracted from volcanic fumaroles, potash mines 3300 feet underground, etc.