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DrumBeat: October 27, 2008
Posted by Leanan on October 27, 2008 - 9:30am
At Asian food market, a sign of lost confidence
Empty rice shelves encase a fear that has transcended American culture, as consumers have learned that things they saw as entitlements - food staples, fuel for a commute, toys, and toothpaste free of poison - could no longer be taken for granted."I was like, 'What is going on?' " said Peter Park, a 28-year-old Willamette University law student who moved to Seattle from South Korea when he was 15. "This is the last country that I thought would run out of food."
Sri Lanka: Extended credit period from Iran
COLOMBO: Petroleum and Petroleum Resources Development Minister A.H.M. Fowzie and Ceylon Petroleum Corporation (CPC) Chairman Ashantha de Mel have successfully negotiated an extended credit period of full 90 days from Government of Iran.
Thailand likely to barter rice for Iranian oil
Hanoi (VNA) - Thailand, the world's biggest rice exporter, plans to exchange rice for oil from Iran, its commerce minister said on October 27."Our senior officials plan to go to Iran by mid-November to discuss the specifications of oil and rice that would be exchanged," Commerce Minister Chaiya Sasomsab was quoted by news reports as saying.
As Dubai skyscrapers keep rising, buyers and developers eye world's financial woes
DUBAI, United Arab Emirates (AP) - Dubai's long, lucrative property boom is hitting rough times, with property-flipping speculators and hopeful foreign buyers increasingly worried as easy oil money and quick profits dry up.It's far from clear, though, if a bubble has truly burst or if the once red-hot market is simply cooling.
Don't believe in climate change? You still need a carbon tax
So let's say that climate change really is bunk. Does that mean that we should forget about carbon taxes, the development of alternative energy, and all the other steps proposed to fight climate change?Not at all. In fact, there is only one such policy - carbon sequestration - that would be without value if anthropogenic climate change is a mirage. In every other case, the policies proposed to fight climate change are not only sensible, they are essential, even if climate change is dropped from the equation.
Chinese hostages 'executed' by Sudan kidnappers
KHARTOUM, Sudan (AP) -- The kidnappers of nine Chinese oil workers have killed five of the men, execution-style, a Sudanese Foreign Ministry spokesman says.Ali Sadiq said two other kidnapped workers managed to flee their abductors, while two still remain in the hands of the kidnappers.
Petrobras' Costa Says Oil Prices to Rise Again
(Bloomberg) -- Oil prices will rebound because of scarce supply, said Paulo Roberto Costa, head of refining at Petroleo Brasileiro SA, Brazil's state-controlled oil company, the Valor Economico newspaper reported.Declining output from existing fields, means new discoveries of 8.5 million barrels a day are needed to meet demand, Valor quoted Costa as saying.
Delays in bringing new fields online would hamper the ability to meet global oil consumption, even if it remains at the current level of about 85 million barrels a day, Costa was quoted as saying.
Slip in oilsands expansion worries Newfoundland mayor
There may be thousands of kilometres between Alberta's oilsands and the southern Newfoundland town of Marystown, but Mayor Sam Synard is still keeping a close and increasingly anxious eye on a possible downturn in that province's oil fortunes.Major energy companies, including Suncor Energy, Petro-Canada and UTS, have announced they are delaying projects or cutting spending on oilsands work, in response to the spiralling global credit crisis.
Thousands of workers from Newfoundland and Labrador commute to jobs in Fort McMurray and other communities in Alberta's oilpatch, to such an extent that what experts call the "receipt economy" is guiding the fortunes of many towns in the province.
Carmakers may be next up for bailout
NEW YORK (CNNMoney.com) -- Bush administration officials have had talks with the nation's automakers about providing possible federal help for the cash-starved companies, a White House spokeswoman said Monday.
U.S. forces staged attack in Syria, U.S. official says
WASHINGTON (CNN) -- The U.S. military conducted a "successful" strike into Syria on Sunday to kill a suspected al Qaeda facilitator, a U.S. official said Monday.
U.S. helicopter shot down in Afghanistan
KABUL, Afghanistan - Insurgents shot down a U.S. helicopter after exchanging fire with its crew in central Afghanistan on Monday, while a suicide bomber in the north killed two U.S. soldiers inside a police station, officials said.
China may lend Russia $25 bln as part of oil deal
MOSCOW (Reuters) - Russia and China will sign a much-delayed long-term oil supply deal on Tuesday and Beijing is in talks to lend Russian companies $20-$25 billion in export-backed loans, industry sources said on Monday.The deal will give Beijing access to 300 million tonnes of Russian oil over the next 20 years, accounting for 4 percent of its annual demand, while allowing Russian firms to sort out immediate financing needs during an acute liquidity squeeze.
Oil producers are understandably desperate. In the space of only three months, crude oil prices have fallen by more than half - slashing their export earnings and cutting into their oil-dependent budgets.Still, OPEC must tread extremely carefully as it attempts to put a floor under oil prices. The sharp decline in the price of energy has been the only sliver of good news amid a tide of financial woe enveloping the world. It reduces inflationary pressure and gives more space for central banks to cut interest rates.
Oil in a Week (OPEC & the Decision to Cut Output)
It is noted that there exists an oil cycle of approximately ten years for the meltdown of prices in the recent past, even when causes varied in each case. The collapse of prices in 1986 was caused by the increasing supply from outside OPEC whereas the second collapse in 1998 was caused by the Asian economic crisis and the decline in demand there at a time when OPEC increased output (the Jakarta resolution of 1997). The current price meltdown, on the other hand, is caused by the decline in demand as a result of the rapid and massive increase in prices during the first two half of the year in addition to the declining demand as a result of the global financial crisis and the lack of confidence in the proposed economic solutions.
LUKoil crude output down 2.1% in Jan.-Sept.
MOSCOW (RIA Novosti) - LUKoil's crude output in January-September decreased 2.1% year-on-year to 71.2 million metric tons (522 million bbl), Russia's largest independent oil producer said on Monday.The company produced 62.3 million tons (457 million bbl) in Russia and 3.9 million tons (29 million bbl) under international projects, representing year-on-year declines of 1.7% and 7.9% respectively.
VIENNA, Austria /PRNewswire/ -- If there were such a thing as a process server's academy award, Freedom Watch Chairman and Chief Legal Counsel Larry Klayman most likely would be nominated for one. (http://www.freedomwatchusa.org ).After thwarted by OPEC security from serving his complaint charging the cartel with illegal price fixing, market division and collusion in agreeing to lower oil production, Klayman sprang out from a line of TV press to serve a complaint on an unwitting OPEC oil minister on his way to be interviewed following OPEC's emergency meeting here.
An ‘invisibility cloak’ for tsunamis?
A tsunami is headed right for a vulnerable shallow-water gas platform. The next minute, the first wave passes by harmlessly as if the structure had completely disappeared. Impossible? Perhaps not, according to a team of French and British physicists that has devised an ‘invisibility cloak’ that could, in theory, hide susceptible platforms or coastlines from ocean waves such as tsunamis.
GAO finds agencies using oil products to fuel AFVs
Federal government agencies are meeting requirements to acquire alternative fuel vehicles (AFVs), but they currently are running them on petroleum products, the US Government Accountability Office said Oct. 23.
Cooling climate ‘consensus’ of 1970s never was: Myth often cited by global warming skeptics debunked
Now, new research also skewers the global warming skeptics’ claim that, in the 1970s, scientists believed that an ice age was imminent. Researchers of the day had discovered that Earth had been cooling since the 1940s. Some believed that continued increases in the amount of planet-cooling aerosols kicked up or emitted by human activity — dust and smog, for example — could easily tip the planet into an ever-deepening cycle of cooling, skeptics have repeatedly pointed out. That wave of concern was obviously a false alarm, the skeptics note, so maybe today’s scientists are equally mistaken about global warming.Not true, climatologist Thomas C. Peterson of the National Climatic Data Center in Asheville, N.C., and his colleagues report in the September Bulletin of the American Meteorological Society. The team’s survey of major journal papers published between 1965 and 1979 found that only seven articles predicted that global average temperature would continue to cool. During the same period, 44 journal papers indicated that the average temperature would rise and 20 were neutral or made no climate predictions.
Heinberg: A Back-Row Seat at the Collapse Revue
The actions of national governments and the central banks to shore up the credit market have constituted an effort to establish a floor below which the credit markets cannot fall further. Whether these efforts will be successful we shall discover soon enough.However, the deeper Peak Everything crisis effectively establishes an ever-descending ceiling above which a recovery can never rise. The recession is lowering the price of commodities that would otherwise be at all-time high prices due to scarcity. Why? Demand is falling because fewer people can afford food or gasoline.
So far, despite massive efforts to infuse trillions of dollars in new money and credit to keep the international financial system at proper pressure, this is a textbook case of deflation.
Chavez Ambitions in Venezuela, Abroad May Shrink With Oil Price
(Bloomberg) -- The same tumbling oil prices that led OPEC to slash output last week threaten to send Venezuela's economy into a tailspin, and put an end to President Hugo Chavez's ambitions to expand his socialist revolution at home and abroad.To cope with plummeting oil revenue, the source of half the government's spending, Chavez may have to cut domestic handouts and foreign aid. The first items likely to go will be arms purchases from Russia, oil subsidies for Cuba, and job- creating local projects such as bridges and subways, economists say.
Warzone where oil prospects outweigh risks
Half way up a barren mountain in northern Iraq the earth begins to shake. Starting slowly, a deep rumble is heard, stopping suddenly with a thin hydraulic hiss. But this is no earthquake. It is part of a seismic test to search for oil in a region where crude is so prolific that it oozes from the rocks.Andy Grosse, exploration director of Sterling Energy, the British company funding the programme, says: “There is nowhere else left like this on earth — where there is so much potential but so little exploration has been done. For an oil company, it's like being a kid in a sweet shop.”
Chevron Replaces BP As Third-Biggest Oil Major
US oil major Chevron Corp has replaced Britain's BP Plc as the third-largest non-government controlled oil company in the world, as problems in Russia and currency weakness have hit BP.
Neither Obama or McCain Understand How to Tackle the Oil Crisis
A detailed examination of the Obama and McCain energy platforms and track records reveal that neither man has tackled the issue of a potential oil catastrophe which would quickly tear this nation apart. Nor does either reflect the sense of urgency such a looming catastrophe—constant, continuous threats by Iran, Venezuela and other OPEC activists — requires.
On McCain, Obama, Energy & the Environment
I've spent the past few weeks researching John McCain and Barack Obama on the issues of energy and the environment. I've looked at their published platforms, reviewed their speeches and debate appearances, and scanned the opinions of a gaggle of pundits.And, after all that research, I'm reminded of a TV commercial from the 70s, the one with the French chef comparing margarine and butter. "There is no differ-ance…" he exclaimed.
Vietnam's President in Moscow for Energy Talks
Vietnamese President Nguyen Minh Triet held talks with President Dmitry Medvedev and other top Russian officials at the Kremlin on Monday to boost trade and energy ties.
Zimbabwe: Wheat growers face fuel problems
WHEAT farmers in Umguza are facing problems of securing enough fuel to use in harvesting their crop while the only combine harvester in the area constantly breaks down.Some farmers told Chronicle during a visit to the farming area yesterday that they now feared the problems might result in their crop being damaged by the summer rains that are about to start.
Waste watchers: Save cash and the environment
Milly d'Escrivan has shed 4.5kg (9.9lbs) this week, making her the biggest "loser" in her Cambridgeshire group. Ms d'Escrivan and nine other young mothers have lost more than 40kg (6.3 stone) between them over the past four months. Like thousands of others around the country who are trying to shed the pounds, they meet regularly to offer each other moral support and to swap recipes and tips. Unlike many other women, however, they are watching their waste, not their weight.They are part of an innovative scheme helping women to cut their food waste and shopping bills in half – using simple, old-fashioned home economics. If their success were repeated nationwide, the scheme could save the UK 2 million tons of wasted food a year – and £5bn.
Arctic is melting even in winter
The Arctic icecap is now shrinking at record rates in the winter as well as summer, adding to evidence of disastrous melting near the North Pole, according to research by British scientists.They have found that the widely reported summer shrinkage, which this year resulted in the opening of the Northwest Passage, is continuing in the winter months with the thickness of sea ice decreasing by a record 19% last winter.
UK: Genteel custodian of grand houses turns eco-warrior to save green spaces
The National Trust is to take up an aggressive eco-stance to protect green spaces and prevent desecration of the countryside.The trust, one of the country’s biggest landowners, has decided to shift its focus to become the leading champion for the protection of green fields - a move that puts it on a collision course with the Government over housebuilding, development of eco-towns and the proposed expansions of Heathrow and Stansted airports.
DESPITE advances in alternative energy technologies, oil remains the world’s primary fuel. We wonder: Which of the following countries will deplete its oil reserves first?Answers: A. Mexico; B. Russia; C. United States; D. United Kingdom
Critics say Barack Obama's, John McCain's energy policies leave Americans wanting
Ostensibly, presidential candidates John McCain and Barack Obama have very different approaches to America's energy problems. But when some experts look at them, they see the same thing: Timidity."We need to get away from looking for a silver bullet," says Paul Linzmeyer, a partner in Innovation for Sustainable Organizations, an energy consulting firm based in Appleton. "There is none. … Both (candidates) are going in a different place than we are today, and that's what we need, but I don't think they're bold enough."
Pickens: My Energy Plan Is The "Only Plan"
(CBS) If you've been watching television lately, chances are you've seen a white-haired Texas oil man promising he can save America from foreign oil by using wind power, solar energy and domestic natural gas. He's T. Boone Pickens, and he's playing the role of pioneer and provocateur, in a massive national campaign warning of an energy crisis as dire as the current financial one.As 60 Minutes contributor Charlie Rose reports, Pickens says he has a solution - a plan that might sound unrealistic in the current economic climate - but one he hopes will be good for the country and good for Boone Pickens.
Funding becoming harder to get for green startups
LOS ANGELES (Reuters) - Saving the planet is looking a lot less profitable than it was a few months ago, and investors once enamored with finding the next high-flying alternative energy startup are retrenching.Venture capitalists poured a record number of dollars into alternative energy companies as oil prices peaked at $147 in the third quarter, but some say that investment has trailed off substantially as crude prices declined and the global economy has slipped toward recession.
Not only are venture firms demanding lower valuations for what they call "cleantech" companies, they are also shying away from those with riskier technologies and startups whose business plans will require large amounts of capital.
Can smoke and mirrors ease global warming?
OSLO (Reuters) - Backers of extreme technologies to curb global warming advocate dumping iron dust into the seas or placing smoke and mirrors in the sky to dim the sun.But, even though they are seen by some as cheap fixes for climate change when many nations are worried about economic recession, such "geo-engineering" proposals have to overcome wide criticism that they are fanciful and could have unforeseen side effects.
Oil falls below $62 as investors eye weak demand
SINGAPORE (AP) -- Oil prices fell to 17-month lows below $62 a barrel Monday in Asia as investors brushed off OPEC's output cut, focusing instead on growing evidence of a severe global economic slowdown that would undermine crude demand.Light, sweet crude for December delivery declined $2.22 to $61.93 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore, the lowest since May 2007.
Cheap Crude: A Flash in the (Oil) Pan
The biggest mistake the United States could make right now is to assume recent weakness in oil and gasoline prices means the energy crisis is over and the US can go back to our old energy habits and policies.
Qatar calls for oil ‘between $70 and $90’
Qatar believes that current oil prices are low and should be between $70 and $90 a barrel to satisfy consumers and producers, Prime Minister Sheikh Hamid bin Jasim said in comments published today."We believe oil prices should be in the reach of everybody," Reuters quoted Jassim as telling local media.
"But we want to be protected. The current prices are a bit low. We are talking about prices ranging from $70 to $90 which we think are fair for consumers and producers."
Nigeria: Halliburton Scam - EFCC Seeks Clues From Abroad
The Economic and Financial Crimes Commission (EFCC) is at present seeking evidence from abroad in a bid to nail Nigerian officials alleged to have received bribes in order to help some foreign companies secure juicy oil and gas contracts in the country.Top on the cases on which the anti-graft body is seeking clues is the $180 million bribe allegedly paid some government officials by Halliburton to secure Liquefied Natural Gas (LNG) contracts.
The rise (and fall?) of petro-states
The Kremlin's assertiveness and strident defense of national interests in the Putin era is ascribed to the boom in world prices of natural gas and oil, which Russia exports in abundance. Russia reaped direct dividends from the steep increase in fossil fuel prices by accumulating foreign exchange reserves to the tune of US$560 billion by mid-2008. Indirectly, possession of the much-coveted strategic minerals enabled Russia to neutralize energy-hungry Western European countries, particularly Germany, so that the "West" was divided over taking an anti-Moscow foreign policy line.
China CNPC to issue 20 bln yuan bills next Monday
Authorities are encouraging the issuance of medium-term corporate bills and all forms of corporate debt, to bolster corporate financing and prop up the economy as growth slows.
SK Energy drops China crude unit plan-paper
SEOUL (Reuters) - South Korea's top refiner SK Energy has dropped a plan to build a crude oil processing unit in China due to government price regulations, a local newspaper reported on Monday.
Nigeria: Fire Guts Intergrated Oil and Gas Tank Farm
A tank farm on Apapa-Oshodi expressway belonging to Intergrated Oil and Gas limited, situated around the Ibru oil depot in Tincan island area of Lagos went up in flames yesterday.
Free fall at the pump eases worries on living costs
Concern about high gasoline prices and the rising cost of living have melted away in recent weeks as a free fall in oil prices brought relief at the pump, dropping from more than $4 a gallon to well under $3.
South Africa: The future of the state
How will peak oil impact on South Africa? Will we run out of water? It will need to assist Cabinet to assess mega-projects strategically. Do we need aluminium smelters? We are not good at posing, let alone beginning to answer, questions such as these.
Oil is at the centre of two major crisis, one of which remains within the realm of news networks as part of the economy. According to the cost of oil, the cost of everything else in society goes. The current downturn has dampened the demand for oil and decreased its value as a speculative investment for the future. Some pundits have ignorantly claimed that because the price of oil has gone down there is obviously no problem with supply. Unfortunately we are somewhere at peak oil now, just past, right on, or just about there, we won’t know yet for a while. And while there is still lots of oil, demand will increase again if the economy recovers, but regardless, future oil will be harder to obtain and more expensive because of that. That will cause ripple effects of higher costs for all products but more importantly, higher costs for food.
A politics of crisis: low-energy cosmopolitanism
2008 is the year of a triple shock: the global food crisis (which made the realities of food-insecurity palpable), the global oil-price rise (which put localized transition on the agenda as never before) and the global financial hurricane (which gave the state as agent a new lease of political life). The long-term consequences can at present be only dimly discerned. At this stage, it can be said that together they do provide opportunities for the political left (in its broadest sense) which were barely imaginable at the start of the year. But it is also true that dislocating financial and energy crises offer promising ground for the political right.
“I suspect,” wrote Friedman, “we will find ourselves living in a world in which key global economies are more intimately tied together than ever before. It will be a world in which multilateral diplomacy and regulation will no longer be a choice. It will be a reality and a necessity. We are all partners now.”Blog columnist and cranky savant James Howard Kunstler takes an opposite view: “While I recognize the appeal of the ‘singularity’ narrative, which has the human race making a sudden evolutionary leap into some kind of cyborg-nirvana, I regard it as an utter bulls--t fantasy that has zero chance of occurring, given our stark predicament.”
RAB bans withdrawals from energy fund after oil price falls
RAB Capital's energy fund, once worth more than a £1bn, has banned withdrawals by investors as it struggles with the fall in the price of oil and other commodities.The flagship fund has lost more than 50 per cent of its value in the last 12 months, and in a move to shore up its standing, RAB has moved to stop investors cashing in their holdings.
RV sales hinge on credit: Lower gas prices will help, but financing is biggest obstacle
"We been saying all year that the real issue is not fuel prices," said Kevin Broom, director of media relations for the Recreation Vehicle Industry Association. "It's credit, and we believe that that continues to be the case."It may help some and may offer some hope but fuel prices are not the driving factor in consumers buying an RV, it really is credit —— where people can get loans for what they are buying."
Hybrid engine inventor heads for UM Hall of Fame
Alexander Severinsky thought he had escaped long waits for basic goods when his family fled the Soviet Union in 1978. But barely a year later he found himself in his Oldsmobile Cutlass, in the Texas heat, at the end of a line of cars waiting to gas up."I just came from Russia a year ago, where I stand in lines for food, and now what changed? I'm back in line, only for fuel," he said, laughing, in his accented English.
Better fuel efficiency, he reasoned, could boost gas supplies and end the lines. "So I decided to look into what is the problem with engines."
New global energy strategy tackles climate change, saving USD 18 trillion in fuel costs
Berlin, International — Aggressive investment in renewable power generation and energy efficiency could create an annual USD 360 billion industry, providing half of the world's electricity, slashing over USD 18 trillion in future fuel costs while protecting the climate, according to one of the most comprehensive plans for future sustainable energy provision launched today.
Climate change 'making seas more salty': Scientists report changing salinity in oceans can be attributed to manmade climate change
Global warming is making the sea more salty, according to new research that demonstrates the massive shifts in natural systems triggered by climate change.Experts at the UK Met Office and Reading University say warmer temperatures over the Atlantic Ocean have significantly increased evaporation and reduced rainfall across a giant stretch of water from Africa to the Carribean in recent years. The change concentrates salt in the water left behind, and is predicted to make southern Europe and the Mediterranean much drier in future.
The Public's Dangerous Misunderstanding of Climate Change
As I report on climate change, I come across a lot of scary facts, like the possibility that thawing permafrost in Siberia could release gigatons of carbon dioxide into the atmosphere, or the risk that Greenland could pass a tipping point and begin to melt rapidly. But one of the most frightening studies I've read recently had nothing to do with icebergs or megadroughts. In a paper that came out Oct. 23 in Science, John Sterman - a professor at Massachusetts Institute of Technology's (MIT) Sloan School of Management - wrote about asking 212 MIT grad students to give a rough idea how much governments need to reduce global greenhouse gas emissions to eventually stop the increase in the concentration of carbon in the atmosphere. These students had training in science, technology, mathematics and economics at one of the best schools in the world - they are probably a lot smarter than you or me. Yet 84% of Sterman's subjects got his problem wrong, greatly underestimating the degree to which greenhouse gas emissions need to fall. When the MIT kids can't figure out climate change, what are the odds that the broader public will?
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If we get off of oil faster than the cheap-to-produce oil depletes, the price will remain low, and we won't be encouraging a counter-productive search for poor resources.
If pigs could fly ...
It is not all that hard: http://mdsolar.blogspot.com/2008/06/oil-is-too-expensive.html
Chris
Hello TODers,
http://www.marketwatch.com/news/story/hang-seng-crumbles-127---/story.as...
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HONG KONG (MarketWatch) -- Hong Kong stocks crumbled under a barrage of selling Monday, with the benchmark Hang Seng Index plunging 12.7% to its lowest finish in more than four years as investors who bought shares on credit were forced to offload them in a falling market.
[The prominently featured comment]: Just pulled my head out of my rectum...apparently I'm not dead. O.K. I'm going back in.- shasta
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Should be another interesting week ahead on global stock and commodity markets
Thank you. The PPT has learned it's lessons. tactically at least.
They started manipulating Dow/S&P futures in Australia.
""What we're seeing is capitulation selling on covering of the yen positions. That's creating an awful lot of uncertainty," said Benjamin Collett, head of hedge-fund sales trading at Daiwa Securities SMBC in Hong Kong. "The yen continues to strengthen as people are unwinding risk and there is nothing but pain there.""
http://www.marketwatch.com/news/story/hang-seng-crumbles-127---/story.as...
“The system is paralysed, and it is starting to look like Black Wednesday in 1992. I’m afraid this is going to have a very deflationary effect on the economy of Western Europe. It is almost guaranteed that euroland money supply is about to implode,” he said.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/326005...
How can Hang Seng be down 12% and the Dow down .56%?
Volume will be on a pre Holiday level.
Ken Deffeyes: Peak Oil is the Real Cause of the Current Financial Crisis
Oh. And BTW, Top o' the Morning to all!
To -1.
Dow down all of 92 pts, even as DVol: UVol is 10:1.
How about this. The US closes the market by not allowing trades.
While intermittently hitting bids.
The executive's words were "Nobody is paying attention to the spot price anymore. It doesn't mean anything."
To -2's:
Want that be hilarious when the US Government has to step in
bail out the Las Vegas Sands? Talk about a Casino Economy!
"Dow 6000 Next Week
Relax, no reason to panic. In today’s WSJ everything is just rosy. There is a years worth of bad news in just one issue! CALPERS lost 21% of it fund since June (48 billion dollars). They even mentioned that 63% of their stocks were in the global market (talk about dumber than a sack of rocks). They might have to ask California employers for a 4% increase in contributions on top of the current 13%.
Then on the same page there is an article projecting state budget shortfalls for next year ranging from 2 to 10 percent depending on the state. Let’s just triple that to be more reasonable 6 to 30 percent. California was projecting 5% so we will figure 15%. What part of the state budget gets cut first? CALPERS employees: Teachers, Police, Fire, Highways and all sorts of government services.
This is going to be fun for everyone!"
http://greatdepression2006.blogspot.com/
The recent volatility in the stock market has affected my expectations. I checked bloomberg earlier, seeing
S&P 500 870.69 -6.08
NASDAQ 1,542.44 -9.59
Russell 2000 463.15 -7.97
I initially thought wow another big drop down 6-10%, then I saw that that was just the points lost actual percents were -0.69, -0.62, -1.69.
Yeah right! The US market is down over five trillion dollars since July. The PPT did not have enough cash to swing the US market so they are trying to swing the Dow and S&P from Australia. Takes a lot less cash to swing that market. Unfortunately the S&P/ASX 200 Index and the Dow Jones Australia LPT Index usually follows the US market, they do not lead it. At any rate pumping up the Australian market would have very little, if any, effect on the US market.
Mac, if there is such a thing as the PPT, they could not possibly be dumb so dumb as to think swinging the Australian market would pump up the US market. Both, right now, are at the mercy of the financial markets. And that is what the Fed is trying to do right now, pump up the financial markets with the bailout package in an effort to help the industrial and other equities markets.
Dow down .56%? Since when? At any rate, if you are talking about one day's movement, such a disparity is commonplace. They are two different markets, half a day's timezones away. Overnight news or inter-day news can easily cause such a disparity. The Hong Kong drop was huge but it is also a much smaller market. Half a day later the New York market moved on other news.
Today's Trucking: Diesel crunch worsens; supply weeks from normal
It seems that we are well into a period of economic and ecological chaos as we bump up against the limits to growth.
The economic chaos demonstrates some of the disconnects between our assumptions about what is normal and the reality of our habitat. For example, a steady, reliable, cheap supply of finished products from petroleum is assumed to be normal. If not that, then some "replacement" products that the so-called free market substitutes seamlessly.
The ecological chaos is only just beginning. We are wired to deny that it is happening and to deny that we are a significant cause of the environmental chaos. Global Climate Change is one complex aspect of this with many implications, but so are the changes in resource availability and the build up of toxins affecting us and other species that comprise the context which makes life possible for us.
These complex issues are not resolved in sound bytes, and require sustained commitment to understanding and responding to the issues at hand.
Our current responses seem to be limited to tantrums, ego-centric escapism and scapegoating, and war.
Interesting times. Off to help out a couple of elderly folks today. I hope their retirement nest eggs are not destroyed completely this week.
A Desire Named Streetcars: Alan Drake to be Interviewed on “Think” at KERA.org at Noon Central Time
Yea! Go, go, go Alan Drake--a national treasure. I hope Alan can effect RR & TOD change so we can compete with China's buildout of 75,000 miles of RR:
http://edition.cnn.com/2008/BUSINESS/10/27/china.railways.ap/
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China OKs $292B railway plan
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Next Question: Who will be first in SpiderWebRiding & O-NPK recycling postPeak?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
CNN is really late with that; I read it Saturday October 18 in my daily.
Farm-Credit Squeeze May Cut Crops, Spur Food Crisis
In my alternate incarnation, x, I have railed many times against the silly nonsense that rising ethanol production causes rising food prices. We now have proof that I was right. Corn prices have fallen by about half and ethanol production is reaching new highs.
I have not noticed any decline in food prices since the drop in corn prices. The relationship of food prices and corn prices is tenuous at best. It is definitely is not causal.
I don't expect this evidence to have any effect on ethanol opponents though. Their opposition is not based on evidence, but near religious fervor.
Corn prices have fallen by about half and ethanol production is reaching new highs.
Interesting observation.
"The relationship of food prices and corn prices is tenuous at best."
your statement implies that corn is not food, you have data to support that ?
"Their opposition is not based on evidence, but near religious fervor"
Can't talk for others, but, my opposition is that food should not be used as fuel for machines. It's immoral and wrong, like feeding cows to cows, it's as simple as that and involves no religious fervour whatsoever. There is no justification or argument for doing such a thing on such a scale. None!
Reducing fuel usage is the obvious answer to the problem.
The corn used for ethanol is not human food. (Of course if you're a darwinian you wouldn't distinguish between feed and food as to them we're all animals.) The corn used for ethanol is not eaten by any humans. Not even in Mexico. An important by-product of corn ethanol is DDGS and that is an important animal feed and as such exported to Mexico as well. So, you can have your ethanol and eat your meat too.
The corn used for ethanol may not be human food, but the soil it is grown in, the water used to irrigate it, and the fertilizer supplied for it would all grow human food.
Sure. Ethanol corn is almost not irrigated. Generally, it's not worth it. And why do you need more human food? 27% of America's food is wasted. So, is there really a shortage? If there is and if that is therefore reflected in the price the farmers will grow more. The consumer is in control. Now, didn't you want less CO2 from fossil fuel also?
Corn ethanol is a non-renewable inasmuch as the phosphate and potassium chloride (potash)fertilzers essential for high energy yields were extracted from finite ore bodies that took millions of years of deposition to reach commercial size.
The term renewable energy and ethanol are not synonymous, but a contradiction.
I don't think phosphate and potassium end up in your tank. So, your point is pointless. You will have a hard time recycling burnt carbon (as in fossil fuel) however.
"I don't think phosphate and potassium end up in your tank."
well, without phosphate and potassium, neither will ethanol.
voodoo energy economics: just ignore all the fossil fuel inputs.
You make quite a voodoo jump there: from potassium and phosphate to fossil fuel inputs. ???
Voodoo would be if phosphate and potassium would dissappear. They don't.
It does not matter if the corn is edible by humans. Corn production for fuel and edible food crops compete for the same land. Thus we are coupling transportation and food production.
When the two are put into competition with each other, the farmers will plant whatever gives them the highest return for their investment. If the market values transportation fuel higher, land previously used for food production is taken out of production. This has ripple effects with other food crops, as their total amount planted also becomes a function of the land left over after the "do I plant more or less corn?" decision has been made.
Also, last time I checked this was a losing strategy. Someone interviewed in the movie Blind Spot said that 14% of corn production provides less than 1% of the nation's liquid fuel. Add on top of that the high inputs required and ethanol is a loser from almost every angle.
Ethanol proponents recognize this because they have been forced by the numbers to back away from their claim that ethanol is "the solution" and now say that "it is a transition fuel."
Coupling food production and transportation is a very, very bad idea, and we should decouple them as soon as possible. Soon we are going to have enough trouble feeding the world without this added wrinkle.
"Ethanol is a loser from almost every angle". So, you're against growing any renewable fuel? Then keep doing what we have been doing: pump and burn more oil? For how long? What is the cost of CO2 being put out from fossil fuels? And what is the real price of fossil fuel going to be?
I advocate powerdown and an orderly reduction in our numbers.
Anything else, in my view, is inadequate to meet all the challenges we face: loss of energy, loss of soil, loss of fresh water, climate change, etc.
Roger that ... you first.
No problem. I've sold my sedan and am converting a Geo to run on electricity. Plus other changes.
Lynford.........You are absolutely correct. You represent the overall sentiments of the vast majority of humankind.
Power down is the best and probably the only option which gives us all chance continuing some semblance of civility in the future.
Of course YOU won't power down by choice if it means you have to suffer or make some sacrifice.
That is for somebody else or another country. You are exercising your FYJ rights in all their glory.
Many people think altruism is a human concept and quote instances in reality to prove their point.
In actuality, altruism is just a word, a concept or idea which humans cling to, thinking it is what makes us human.
If the affects of peak oil cause us to descend into chaos just watch how we behave and how the decent will be exacerbated by simple human behaviours.
For example, would you hang back if there is a run on the banks, will you share your money, if you happen to be one of the lucky ones to get your money out before the doors close or it collapses.
If the government says don't top your fuel tank up beacause it will cause fuel to run out.
Will you? Will you if you see others filling up?
There will be no women and children first, the children if they are not yours, will be trampled in the run to the only door out, of the crowded burning building.
That is our future.
There will be no orderly descent into a brave new world of cooperation.
Cooperation will be the end result though. It will be a survival mechanism, after we have outlasted others in our attempts to ensure the best life for ourselves.
There will be charlatans with agendas, with ideas on how to engineer our way to prosperity. Engineer our way to an orderly life in a world with less and less oil. We'll be clutching at anything if we think it offers a way out.
It's all a function of denial.
Aangel, the Stanford study shows us that there is over 1,000,000,000 Acres of Abandoned farmland in the world. Heck, we pay farmers Not to Farm 34 Million Acres in the U.S.
The guy in the movie was Wrong (imagine that.) We are currently providing 700,000 Barrels of Ethanol/day using land that increases our corn acreage by approx 16%. BTW, Corn is $3.82/bu, today. You can't "grow it" any cheaper than that.
That's a lot of "abandoned" farm land.
However, how much of that land has adequate water, and how much NPK will it take to make marginal land productive-- and at what price?
Also, there might just be something to be said for not growing crops on every square inch of land in the world-- birds and bears need something, too.
And there is a lot of beautiful topsoil under a lot of concrete and blacktop in housing developments and shopping malls that might be put to better use.
I don't think there is any shortage of land. Probably really not a shortage of money. There is definitely a shortage of imagination and good will.
With an economic incentive, farmers will use the most productive land they have if it will maximize profits. Given that, it's likely that the abandoned and "not farmed" land is not the choicest land, much like the remaining oil is heavy and sour, not light and sweet. Therefore we are growing ethanol on prime land and reducing its utility and health to run vehicles.
Given the whole suite of factors going against it, I believe the point still holds its ground: putting fuel production into competition with food production is a bad idea that only gets worse the more fuel is produced.
As for the movie figure, I'll double check that I got it right. In any case, what's the source for your figures?
Aangel, an acre of corn will, on average, yield 450 gallons of ethanol. Only about 60% of that land is used for ethanol production, however. The protein, nutrients, etc is returned as high value livestock feed (the end use of about 90% of the corn grown.
Anyhoo, you can figure about 700 + gal/acre. This is to say that if you didn't want to produce the current 11 Billion Gallons of ethanol you could take 16 million acres out of production, and arrive at the same amount of cattle feed that you started with.
Good Grief!
You cannot divide the yield per acre by .6!
Nobody is as stupid as you continue to pretend to be, knock it off!
Unless the cows are pissing ethanol the yield will be 450 gallons per acre no matter what you do with the DDGs.
Ah, Rethin, M'boyo, Good to see ya. Glad you're doin okay.
Let's try it One mo time, ok?
Let's say we're going to produce another 3 billion gallons of ethanol/yr (we are,) and feed the same number of cattle (we are.) How many more acres do we need to plant (without a 1.5% increase, annually, in yields (we'll keep it simple.)
The fact is, we'll have to plant an extra 4,3 million acres (I'm dealing with "round" numbers, here, so don't get your panties in a wad if we're off small amount some places.) 4.3 X 450 = 1,935,000,000 gallons. Now, the problem we have, here, is we now have way too much cattle feed, and since DDGS are more efficient cattle feed than corn we're going to have a LOT of corn left over.
So, we will produce the last 1.1 billion gallons using corn that we were already producing. 1.1 B/450 = 2.4 million acres.
Now, you're going to get the equivalent of 55 bu/acre of corn in DDGS from that new 2.4 million acres + the 4.3 million acres. 55 x 6.7 = 370 M bu/corn equiv. So, you've "lost" 150 bu corn/acre x 2.4 million acres = 360 million bushels. And, you've gotten it back in DDGS + plus your 3 Billion gallons of ethanol by planting 4.3 million acres. If THAT ain't 700 gal/acre I'll kiss your keister.
Pucker up baby.
z/x (also kdolisso if you are listening),
Nobody is against corn ethanol. Make as much of it as you want. What we are against is government subsidies for it. If corn ethanol is such a good idea (better than gasoline), the market will support it.
As one of life's Nobodies, I can assure you that I am against using corn ethanol for fuel while the EROEI is low. The energy to make the ethanol would likely come from some other fossil source, such as coal or natural gas, thus the energy in the ethanol represents a process of converting the other fossil sources to replace oil products. And, growing the corn has large environmental impacts, such as soil erosion and water pollution, which are usually not included in the market price.
As far as the subsidies are concerned, if one wants to cut the direct subsidy for ethanol, lets also cut the subsidies for oil, including the cost of the massive military industrial system which provides protection for the oil imports from other countries. I think our involvement in Iraq is just one example of such spending. Lets have a "free market", with all the hidden externalities included. Maybe then, the other solar and wind sources might also be competitive as well.
E. Swanson
If you see any of my previous posts, you will know I agree with you. I should just change my screen name to "Price in Externalities". If energy is priced correctly, EROEI will take care of things.
When I refer to subsidies, I mean direct and indirect subsidies (i.e. unpriced externalities). I think that if this happened, you would have almost no corn ethanol produced.
For example, I don't think that wind and solar thermal should get any direct subsidies, even though I am hugely in favor of these technologies. If you made coal companies pay for all of the costs of their pollution, our grid would have almost no coal left in it in short order.
How about no agricultural subsidies at all -- the business model of ADM and Cargill would be significantly different.
No transportation subsidies -- we won't have airplanes and freeways. Also, probably no Wal-Mart.
All good, so far as I am concerned. But where do you stop? Education? Police? Fire departments? Medical care (that's a great one -- things would be a lot better without all the weird un-accountable externalities in medicine).
Watching what is going on in the world these days, it is hard not to believe that a less subsidized world might be a more localized, and in some ways, much more human scale world.
"How about no agricultural subsidies at all"
I think this is a pretty good idea. I think we have gotten pretty far away from the point of Ag subsidies, which was to keep people from starving if food prices got too low to support profitable farming.
About the only current Ag program I like is the CRP program, which I think does a good job of rewarding people for taking care of externalities. I think that you could make a case for rewarding growers of healthy food, by the fact that they are reducing other costs to the system (healthcare).
I think police, fire and education are different, becuase you are not providing subsidies to for-profit firms, you are providing a service directly.
Consumer, if you google Chippewa Valley Ethanol, and Poet Ethanol you will see that the direction is in simultaneously harvesting the cobs, and burning them for process heat. This will, virtually, eliminate any fossil fuel usage in refining (the major use of fossil fuels in the ethanol chain.)
In parts of the U.S. E85 ethanol is half the price of diesel. If you subtract the only important subsidy, the $0.51 Blenders Tax Credit, you still have Diesel priced 65% higher than E85. Keep this in context of the fact that, burned in a "proper" engine, E85 is as efficient as diesel, and you start to get a whole different perspective.
The thing is, it's an embryonic industry, and, it's Omnipotent Rival OWNS the supply/distribution Channel. It's going to need a little continued assistance to get on it's feet. But, it will be well worth it. After all, at this Early Stage, we're already running the equivalent of 20 Million Vehicles on a product made in the U.S., and NOT the Middle East.
You make a decent argument for ethanol, but I don't see what that has to do with corn. Corn is only used as the feedstock because it is subsidised. Lowering barriers to entry is a reasonable use of small-scale government intervention, you are right about that.
I just don't like it when Gov picks the solutions (i.e. corn for ethanol). I would much rather have them identify the problem (tax gasoline) and let the market find the best solution.
The thing is, Consumer, we were already raising corn, and making whiskey from it. It's, actually, pretty easy to do, and we've been doing it for hundreds of years. In fact, the first thing we did after the "Revolutionary War" was have an insurrection over Ethanol. "The Whiskey Revolution" Anyway, it was an "Easy" first step.
As for the observation, upthread, that this one billion acres isn't, probably, the "best" farmland: That is, of course, correct. However, the new genetically modified seeds (such as the ones that overcome aluminum toxicity in soil) have made many hundreds of millions of acres cultivable.
As for the I-NPK argument: THAT has got to be a Valid argument when looked at in the long-term. It will have to be addressed, "With," or "Without Ethanol."
I am. See my note above.
It's a theoretical distinction. If there were no mandates/subsidies/tariffs, there would be no corn ethanol. You would still be opposed to allowing it, I wouldn't, but it wouldn't matter because the economics would be against it.
All distinctions are theoretical because for humans using language they can be only descriptions of the world and not the world itself.
But using the more usual meaning of what you say, the important point is whether what I describe is actually happening, and many posts here on TOD indicate that it is, so perhaps yours is the theoretical distinction?
Watch for alot of AgLand to be sold. And the public will not understand.
Pilgrim's Pride cannot declare bankruptcy because it's same creditors
lent to the other "packers" as well.
The value of all their loans would take a hit.
Kunstler is plain speaking this morning, a bit more reflective, and IMO, right on the mark:
Easthampton Burning? October 27th, 2008
http://www.kunstler.com/
Zadok - I agree the "cranky savant" is in rare form.
Here is another smack at Thomas Friedmans prgnostacations (I cant spell for $hiet);
"The world isn't flat, it's flattened"
http://www.atimes.com/atimes/Global_Economy/JJ28Dj07.html
IMO a fantastic overview of ongoing and up comming world events.
Cheers
Cheap Crude: A Flash in the (Oil) Pan
This is a very thoughtful article that puts forth some simple but commonsense ideas.
"Commonsense?"
"What's that?"
"I've heard of that. I think it's something that had something to do with America back before 1980."
Always look on the bright side:
Wallet Pop's, 10 Things Going Right in America Today,
Don't worry, be happy. And, of course, have a nice day:-)
Now, where have I seen this before?
http://in.youtube.com/watch?v=jHPOzQzk9Qo
Wow! The DB is just full of jewels of commonsense today:
It all goes back to the thing that everything is relative. It's like my father used to tell me about the Great Depression. You could buy a cow for $10. But nobody had $10.
The power of Petro State may not decrease in a relative sense unless one considers their internal factors.
How stable will Iran, Venzuela, and Russia be if collapsing oil prices combine with financial turmoil to lower the living standards of their peoples.
How stable will the United States, Great Britain and Germany be if collapsing home prices combine with financial turmoil to lower the living standards of their peoples?
This is a valid question though my personal top worry is Saudi Arabia.
I've too often wondered how tight the royal family's grip on power is in Saudia Arabia.
Clearly, seeing the royal family overthrown has always been Osama Bin Laden's #1 stated objective. How close might he be?
I really don't have any reliable intelligence on this. I've heard the Saudi Royal family is kept in power by the United States, that it is a brutal dictatorship that operates a very efficient police state.
That said, nothing ever stays the same. If the above is true, the Saudis can eventually get fed up and revolt. Another possibility is the royal family could stay in control but replace the U.S. with another sponsor, like China or Russia.
I read somewhere that Bin Laden doesn't want to overthrow the Saudi Monarchy, just make them follow a more pure form of islam.
How stable will the United States, Great Britain and Germany be if collapsing home prices combine with financial turmoil to lower the living standards of their peoples?
Compared to Venezuela or Iran there is a big difference at least in GB or Germany: gasoline prices. They are/were incredibly low in the first mentioned countries, and widespread purchase of gas guzzlers was encouraged, especially in Venezuela. There have been riots in Iran a little more than a year ago when gas was rationed (and the gas on the 'free' market is much more expensive.)
As of Germany, there is a tax on acquisition of real estate, which was raised to 3.5 per cent in 1997. That's quite a lotta money when you dream of your own four walls, and I think it's effects are quite the contrary of US style subprime mortgages, keeping people without sufficient financial basis away from buying houses. And we are not that dependent on automobile infrastructure. Thanks god there are quite a few new developments showing the way how to do with less cars in our country. I hope there will be many more of them.
And in Germany the memory of the hard times after WWII is still alive in many. I think Germany is quite well prepared.
My father sold a 300 pound hog for $5.00 during the great depression. He also got a quarter section of land by just paying the taxes.
During the 80's, farmland in central ND which was mortgaged at $500 per acre was written down to $300 per acre by the bank, since that was all the bank could get even if they forclosed.
Relax everybody. The cavalry has come to the rescue.
You can now sleep better knowing Big Daddy is taking care of everything.
Cheerful thought for a Monday.
Leanan, you're hittin' 'em out of the park today:
But for the free market fundamentalists, doesn't the falling price of oil prove, just absolutely prove, that peak oil is a hoax?
Nuclear Power May Be in Early Stages of a Revival
Just who will finance all these plants? The U.S. Taxpayer? There must be some limit to what the tax system can pretend to support -- or do I just not get it?
That's a good question. But then, who's going to finance any new power plants? At the end of the article, it talks a bit about a problem in the 1970s is that electricity prices rose so much that there was demand destruction and new power plants couldn't be built.
After they have finished bailing out bankers the question is where will the money come from for nuclear or renewables.
DaveMart,
An even more urgent question is where will the "money" come from to buy all the US Treasury notes
that will be issued to pay for this "Bailout"????
With rampant world wide deflation and the sudden increase in the "value" of the dollar there is a growing
concern that there may not be 2 or 3 trillion dollars worth of foreign currency available!!
DD
If nuclear power was too cheap to meter there wouldn't of been demand destruction due to the high price of electricity.
http://www.albertleatribune.com/news/2008/oct/27/manure-more-valuable-hogs/
---------------------
Is manure more valuable than hogs?
The downward trend in hog prices and the dramatic rise in fertilizer costs have turned conventional wisdom on it’s head.
---------------------
Speaking of hogs: let's pump a bunch of manure tanker loads into the halls of Congress. This olfactory lobbying effort should induce them to pass Peak Outreach and mitigative change legislation fairly quickly.
A scene from Mad Max: Beyond Thunderdome comes to mind...
Aunty Entity (Tina Turner): It's called Underworld. It's where Bartertown gets its energy.
Mad Max (Mel Gibson): Oil, natural gas?
Dr. Dealgood: Pigs.
Mad Max (Mel Gibson): Pigs like those? Bullshit.
Dr. Dealgood: Pigshit... Pigshit. The lights, the motors, the vehicles... all run by a high-powered gas called methane. Methane comes from pigshit.
This might not be too inaccurate after all...
Recall my earlier fantasy [future reality?] postings, whereby Tiger Woods takes a time out [from his busy high-fee appearance schedule of plowing golf courses into veggie plots, thereby further promoting his growing international brand of NIKE gardening tools and apparel] to plow the White House lawn into a Victory Garden as the huge gallery cheers mightily.
See, Toto, I thought you might like the Mad Max reference... Post-apocalypse cities powered by O-NPK...
And an abundance of pigshit comes from an abundance of pigs. And and abundance of pigs is made from an abundance of corn. And an abundance of corn is made from an abundance of oil and natural gas!
Fortune has an interesting piece today. It highlights six couples who make between $250,000 and $500,000 per year and who claim they will be forced to put “the American dream” on hold if Obama’s proposed tax increases become law:
http://money.cnn.com/galleries/2008/fortune/0810/gallery.tully_henrys.fo...
It harkens back to what Robert Hughes warned of back in 1993:
Uh, boy. It's kind of hard to feel sorry for people who are saving twice as much every year as the average family earns.
And their big expenses are private school for their kids, and gymnastics, music, and dance lessons. Gee, maybe if you didn't have four kids it wouldn't be such a terrible burden.
I have very little sympathy for anyone making over a quarter million a year. That's triple what we make ("we" is my wife and I, both working full time and using our fancy college degrees) and we're raising three kids.
Oh, sure, they live in a "high cost-of-living area?" Boo-hoo.
I noticed one family lives in a $350,000 home, while stating their earnings at $500,000. Wow, holy disposable income Batman. They claim almost a quater million dollars saved in CASH! While maxing out their 401K accounts. But "we dont think of ourselves as rich..."
Most folks might put a maximum home purchase at 2 or 3 times their salary. Earn 80k, so you can buy a home at 240k MAX (probably best not to leverage oneself that much but you get the idea) - these guys own a nice home thats LESS than than their annual income and have cash in the bank that could almost pay it off (if it isnt already paid for). They are the poster children for why they CAN afford this tax.
My advice to that financial adviser from Peoria: Buy lots of guns, in a couple of years youll need them to defend you and your family from the angry mob outside your door who havnt eaten a real meal in 3 weeks. And turn off the sprinkler system or youll tip them off to the fact that you have water too.
They act like they are the only ones who are going to miss out on the "american dream"
Gun sales thriving in uncertain times
Talk to any gun-store owner and he'll tell you that Obama has done more assault rifle sales than any man in history. Just the prospect of him in office has bumped up sales of designs that were "banned" once before, and semi-automatic rifles in general.
Plus they're inflation-proof. :)
Submissions for concealed carry permits are also way up (at least here in TX), for the same stated reason.
Ben, I have even less sympathy for two people with fancy college degrees that whine about how little they make and seem to be envious of people that make triple what they make.
Question Ben: Just what are "fancy college degrees?"
Answer: "Typical" college degrees but in a pretty font.
Whining? Really?
I'm one person with two fancy college degrees, and I make probably the bottom quartile of everyone here on the board. And a single parent of two small kids to boot... Divorced, you'd assume, and this is my choice in life? No, I'm widowed.
But I have learned that a 2,000 square foot home will not make you twice as happy as a 1,000 square foot home (in fact, I beleive the opposite- larger homes just add more stress). I don't have huge sums of money saved somewhere, but I also have no debt except one student loan and my mortgage. That's it. And guess what? I'm probably in better financial shape than most folks my age (and the Social Security checks I get from the government for the kid's behalf sure don't hurt).
I have every right to whine... I have every right to be pissed that the life my parents had in their 30's and 40's will probably be much better than mine. I have every right to be angry that if things really hit the fan (as they slowly have been this year) that I will see my kids have even less of life than I had. And I have every right to look at ALL those folks who make $200,000 a year, who bought their house on a goddamn ARM, and who defaulted on their $500,000 home costing my financial system HUGE money and ruining my economy. Do you want to know what these folks drive? Probably not a Prius... Look at the demographics of folks who buy a Hummer or Tahoe. These folks piss their money away on these gas hogs and don't really care about the cost of gas for the rest of us. Their consumption with trips, huge houses in sprawling subrubia, and massive energy inefficient vehicles are what piss me off.
So yes, I do have issues with people who make $200,000 a year or more, if only because of what they spend it on.
Geckolizard,
Do you realize that this is exactly how people in the third world countries feel about an average American/European? It is a free country. You are entitled to make as much money as you can and spend it on what you like.
But the universal end result is high wages breed overconsumption. Overconsumption is the main driver of most of the problems we see now (credit crisis, global warming, Peak Oil, etc.) Yes, we have a right to make money... We have a right to make a lot of money. But, after I make a lot of money, does the consumption that it allows me to partake in healthy? If I use my money to buy a Prius (which I did), if I my the money for a vasectomy (which I did), if I use my money on energy efficient housing near public transportation (which I did) then yes, this is healthy consumption (at least from my point of view). If I were to get a McMansion, a Hummer, and have 8 kids then maybe it's not very healthy consumption...
I don't think the problem is high wages (a good thing!) but high borrowing. One way to stop overconsumption is to make it difficult to borrow. E.g., 50% down payment to buy houses, no money lent to buy cars, no credit cards (only debit cards), etc.
And don't forget to add childcare into the mix. 4 kids, all of whom spend 8, 10, 12 hours a day in childcare 5 days a week. I really think this is a timebomb that is often overlooked. The real destruction of the family unit will not come from gay marriage but packing your children off to childcare at 12 weeks old until they're old enough to go to school. The social consequences of this will be huge.
I don't think so. This "time bomb" is actually the way many people have lived for generations. The nuclear family where one parents stays home is a luxury born of cheap energy.
It was far worse in the past. Dickens' Oliver Twist gives us a glimpse of London at a time when economically speaking, even middle class families could not support more than one child at a time. Children as young as three would be turned out to fend for themselves, resulting in gangs of kids roaming the streets.
Having a parent who stays home might be a 'luxury' of cheap energy, but I think a key difference this time around is the lack of stability in the child's life. Having worked in a day care center (and a good one at that) I saw first hand how it works. The high turnover in staff, the child/caregiver ratios, etc. Breaks your heart to see a 16 week old kid dropped off at 7am, parked in a swing chair most of the day cause there's 9 other kids 12-18 months old who 'need'/demand more attention from the 2-3 overworked caregivers, who change on a monthly basis, and are paid minimum wage. And oh yeah, picked up at 6 pm right at closing time.
In the days before cheap energy it would often have been family members (grandparents, remember them?) or a nanny who looked after the kids and could form a real bond. Yes, a childcare center is better than having 3 year olds roaming the streets, but it's still a far cry from what a society should aspire to. Especially the most wealthy society ever to exist on the planet.
I see it as just another example of the mixed up priorities of the times. These HENRY's exemplify it perfectly as they are sooooo extreme. Why have one parent stay home with the kids when you can go out and earn another $200,000 for that flat screen, vacation to Hawaii, Hummer lifestyle?
Sometimes. I suspect the extended family is the most "natural" form of the human family, and probably the best for the kids (though not necessarily for the parents ;-).
But often, the relatives could not afford to watch the kids, either.
My own parents grew up like weeds. My mom was watching her own siblings while her parents worked when she was as young as five. Her parents left her alone when she only a few months old. (My grandparents, whom I remember as being as kindly and loving as any grandparents could be, would have been considered child abusers by today's standards, at least with respect to how they raised their own children.) My dad sometimes didn't come home at night; his parents didn't notice.
Daycare and babysitters have been a way of life in Hawaii for generations (partly because of the extremely high cost of living). Sometimes it was grandma doing the babysitting, but often it wasn't. And it hasn't proven to be a time bomb there.
What strikes me about today's kids is how overscheduled and oversupervised they are. I know, it's not considered safe for kids to play alone these days. But I used to roam for miles when I was a kid, and I loved it. I was a very independent child, and I think I'd have gone crazy if I had to keep the kind of rigid schedule many kids today have.
Check out 'Lark Rise to Candleford' by Flora Thompson.
A wonderful read anyway, which looks at growing up in a village in Oxfordshire in the 1880's.
By the age of 3, children were wrapped up warmly, given a hunk of bread and pushed out of the door, rain of shine, winter or summer.
They grew up tough and self-reliant.
Child care is pretty much a modern invention, along with constant adult supervision.
And I'd hate to see the mortality rates, there were a whole bunch that didn't grow up at all. Survivorship bias.
That was what it was all about. There were no spare resources to raise a sickly child, although if a child did get sick then the parents would do their best from their limited resources.
By the late Victorian era though, in the villages child mortality was chiefly associated with childbirth and periodic measles epidemics and so on.
At other times and places such as the mining villages when there was a strike, many perished from shear want, with severe malmourishment and cold hitting them hard.
Child mortality in the cities was also a whole different ball-game, and there until the start of the 1800's mortality in the population in general had exceeded births for many centuries, being made up by countryfolk moving in.
I also used to roam for miles, not coming home till supper time. So I agree that's yet another social warping influence on the youth of today...trust NOBODY! It's often misleading to try and generalize from your own experiences but my whole socio-economic peer group was raised by their mothers. And yet they have now put all their own kids in daycare. Quite a radical change in just one generation and bound to have ramifications down the line.
At least they're paying for their kids upkeep, unlike welfare moms with four kids all on the public dole. If that's how they want to spend their bucks, more power to them. I know plenty of people who do all the same things on a fraction of their salary. They just don't complain about it much.
It's the complaining that's the issue here.
The issue with these people is the complaining, but the big issue in society is the families that make $80K a year and are trying to live like these guys.
The standard of living portrayed by in this article is seen my most as what they are entitled to. I think that's how we got in this mess. It's not these "doctor+lawyer" families, it's the "cop+teacher" families who thought that this was the basic standard of living that hard working two-income families should be able to obtain. So they did all of the spending, but none of the saving.
It's pretty hard to resist the temptation to "supersize" when the whole system relies on people spending more than they intended.
How do loggers buy $50,000 trucks? Creative financing.
Try to buy a home for $100,000 (twice your salary) -- they don't exist, but creative financing will resolve the problem.
And on and on -- the Wall Street investment bankers are nothing but drug pushers. And of course the addicts bear some responsibility for their choices.
But let's not lay this whole mess at the feet of "welfare mothers" and the poor schumcks who "should have known better".
Americans have felt uniquely entitled to the entire share of the world's wealth for a very long time. A new vision is gradually emerging. It could be a lot better, but there will be a lot of pain in withdrawal.
Well, you can supersize a pair of pants for free :-).
It isn't always a good idea..
But Leanan, the guy with 4 or 5 kids
even shops for discount airfares online!!
Next thing you know he'll be re-using coffee grounds.
Where's airdale when we need him?
Whatever happened to "noblesse oblige", the notion that those who were better off were obliged to aid those who were not as well off?
You can bet if I was pulling in $250K to $500K, I would find something to complain about, but I wouldn't be carping about my duty to support my government.
The situation in the US is pretty complicated right now. I make a good bit of money and, in an abstract sense, I don't think I pay enough in taxes relative to what I make. On the other hand, I strongly resent having what taxes I do pay going to subsidize bombing wedding ceremonies in Afghanistan (or the vast rest of the military excesses of the US that spread far more suffering and death than any terrorist could dream of) or going to bail out the very people who have trashed the US economy over the past 30 years or so.
I find the whininng of the US upper classes especially annoying, considering that the last 25 or 30 years have seen the largest transfer of wealth in history from the American lower and middle classes to the top few per cent. Inflation adjusted median income has not increased at all during that time. All the benefits of the US economy have gone to the elites who are now whinging about maybe having to pay more in taxes.
I was interested in voting patterns and wealth a few days ago. I found some BEA data about GDP per capita state by state and I examined the voting patterns in the last four elections map over at wikipedia.
What I found is that of the top ten states by GDP per capita, the majority in 7 have voted for the democratic candidate in all of the last four elections, 3 have gone republican each time with a fourth going republican 3 out of 4 elections. Of the lowest ten states by GDP per capita, only 1 has gone for democrats 100% of the time, but 5 have gone republican 100% of the time with a 6th going republican 3 out of 4.
What does it mean? For the majorities, the majority of people who are better off more often than not tend to vote democratic, people who are worse off tend to vote republican. The Republicans cast themselves as the low tax party. Well-off people either don't mind paying more taxes on average or don't believe the republicans when they say they're for low taxes.
*edit* The natural question here is are you well-off and therefore you vote democratic, or does voting democratic make you well-off?
You should read "What's the Matter with Kansas". It explores why people consistently vote agaist their economic best interests. The short answer: social issues.
Basically, the GOP has sold abortion policy so well (without ever delivering on it) that they have gotten poor rural Kansans to vote to transfer more of their money to the upper class.
When times were OK, people seemed to care more about Gay Marriage than putting food on the table. I think that may change soon.
Most tax-benefit systems are in fact highly regressive, and the more you earn the more benefits you get and the lower your percentage of income taken in taxes, due to various deductions for things which have been defined as 'good' - that definition having been supplied by the better off.
Tax deductability for housing is a good starting point, so if you have a shack in Kentucky you may pay considerable taxes relative to, say, a Government employee in California, who also gets his wages from the State.
Voting Democrat does not necessarily imply any abnegation of self interest, or willingness to in fact pay higher taxes - deductions can cover many sins, whilst those naughty lower class people usually have to pay full rate for what they do.
There are so many problems with this article, that it's hard to know where to start. I think this basically highlights what's wrong with America, and why the coming economic downturn will be so hard on people. Our ideas about rich and poor are so skewed from the historical realities, that people who are historically "comfortable" consider themselves "poor", those that are historically "wealthy" consider themselves "barely getting by" and those who are rich consider themselves "comfortable".
I make about 1/4 as much as the lowest income featured in this article, and realize that I am quite wealthy by historical standards. I have a car (2007 VW) better than even the richest person could buy 50 years ago. I have a computer in my house that can do more than any afforded by the richest person 50 years ago. I have so much to eat that I have become fat. My dog eats organic food. I fly in airplanes at least twice a year, something that used to be only for the very rich. I have travelled outside the country - that used to be something only very wealthy people could ever do in their lives.
The other thing that people need to understand that every dollar of Gov spending is a tax. If you spend it, you have to tax it. Maybe not today, but someday - either through direct taxes or inflationary policy.
And every tax is a confiscation of productivity by a motivated and successful person, for the edification of someone else.
"Taxes are what we pay for a civilized society." US Justice Oliver Wendell Holmes
Or you could look at it this way: taxes are what pay for an orderly society. People who are successful are the ones who are benefiting the most from the society taxes provide, and therefore owe the most to support said society.
I would say that interest paid on the debt that is used to pay for an orderly society is what we pay for an orderly society, would be more accurate.
or
Taxes pay the interest paid on the debt that is used to pay for an orderly society is what we pay for an orderly society... ah hell its all screwed up now.
We borrow to pay for our orderly society so our kids don't get to have one.
That sums it up.
Only a few percent go for order. My taxes pay for the police, judge and jury....and for medicaid fraud, food stamp graft, childcare "rings", wars, research, and lots of other stuff that goes beyond structure. Some is definitely warranted, but I believe starting with a bias of "less is better" is the way to go, versus "let's try a tax and a bureaucracy and see how it works".
Hey, I broke -10 on that one, you got +15. That's the best spread in days! High five!
That is simply untrue. Here's a pie chart from Wikipedia.
Is there graft? Sure, but it's not "most" of your taxes (and percentage-wise, it's probably less than state and local governments).
The biggest chunk is social security - but that is paid for by social security taxes. (Whether that will continue in the future is questionable, but for now, social security is solvent, and is more than paying for itself.)
The second biggest is defense, which you may be against...but from a big business perspective, the US military is the same as your local police. They help ensure that it's safe doing business, only overseas rather than at home. Heck, even libertarians support the military (though they may not support our adventures in Iraq, etc.).
I read once that the reason Europeans accept higher taxes than Americans is that in Europe, people see themselves benefiting from the taxes, while in the US, we see taxes as something that help only others. Here in the US, we think people who end up needing unemployment or food stamps are somehow lazy or otherwise deserve to starve. While in Europe, they tend to think, "There but for the grace of god..."
I find the disconnect here in the US quite bizarre. People who are against taxes...while they work for the federal government, or live off social security and/or food stamps. Eeryone thinks the benefits they themselves use, whether food stamps, the courts, clean water, the roads, the schools, etc. are a good use of taxes - it's all those other things that they don't personally use that are a waste, or graft, or socialism.
Leanan,
Thanks for the pie chart.
Interesting.
Two mistruths here:
1. If you add veteran benefits (2.5%) to DoD (19%), the sum (21.5%) exceeds SS (20.2%). How can Vet benefits not be a part of war expenses? Therefore war-making is number one.
(Also, what fraction of SS is used to subsidize families of deceased military personnel? This should also be accounted for as war making expenses.)
2. Second mistruth, of course, is that of calling it "defense". More often it is preemptive war making and the feeding of the military industrial complex with no bid contract awards.
Reasonable, I guess. Though I wonder if interest on the debt will not be the largest wedge of the pie soon. (And some of that was to pay for the war in Iraq, too, no doubt.)
However, I daresay most Americans, and definitely most businessmen, would think preventing Iran from blocking the Strait of Hormuz is vital to their interests and a worthy use of tax dollars.
But there is no reason for Iran to block the Strait of Hormuz unless they are attacked first.
They have nothing to sell other than oil. Why would they block the Strait of Hormuz, deprive themselves of oil revenues and earn the condemnation of the whole world unless they are attacked and have nothing to lose?
I think they're worried about being attacked...and not just by us.
The point is that high defense spending is not going to keep the Strait of Hormuz open.
On the contrary, an aggressive foreign policy fueled by high defense spending is more likely to lead to war with Iran which will close the Strait of Hormuz. If you are thinking of Israel, it is easy for us to stop them. Don't give them permission to fly over Iraq and immediately end all economic & military assistance if they attack Iran.
It is better for us to spend our money to wean ourselves off of oil instead of trying to control oil producing regions. Even if we succeed in colonizing the middle-east eventually oil is going to run out anyway.
deleted: Leanan said it better (as usual).
As someone said recently, it is patriotic to complain about your taxes, or something like that. Was it ComPalin?
Chris
And each motivated and successful person is an island all unto himself, whose motivation and success is entirely independent of the society, government, and ecospace within which he lives, entirely self-sufficient and self-defensible. Wait...
Schools, roads, sewers, clean water, policing, national defence, emergency services, courts and administration of the law, standards and regulations necessary for the smooth functioning of our socio-economic systems, primary research and development (before commercial profitability is even in sight) etc. and, yes, a social safety net to ensure those who are subject to misfortune do not fall so far that they are unable to get up again. Take away all these things and you no longer have a secure economy nor a secure society.
NO ONE is a success without input from others. We need government to provide the framework in which hard working people can succeed. The taxes you pay keep the system going that is essential to the general order, which is itself essential to maintaining the wealth of the wealthy.
The selfishness and shortsightedness of your comment is breathtaking. Elightened self-interest should dictate that the rich happily pay the bulk of the taxes to maintain the systems from which they derive enormous benefit.
Oil tanker chock full of bullshit. I have never even heard of, let alone met, someone with a nice income who worked less because of taxes.
It's utter and complete tripe that you should be embarrassed for repeating.
Tell me, until people start having honest discussions about the sh!t currently hitting the fan, and the even greater load of sh!t to follow, how in god's name are supposed to fix any of our problems?
Jeers
Well said.
The Republicans accuse Democrats of "tax and spend".
But fact is that the Republicans practice "spend and de-tax (the rich)".
That leaves the bill on the table for them who follow in the wake of this deceptive looting of government assets.
I enjoy watching people like these lose everything. These types of people are our society's greatest burden and biggest obstruction to change.
I do feel extreme sympathy for their innocent children (the poor kids will suffer because of the "sins" of their parents - their greed, gluttony, stupidiy and ignorance).
These semi-wealthy people are so naive they actually think it matters who is elected the new and likely last president of the US of A.
They refused to take responsibility for themselves. They expect mommy government to be their provider.
They deserve everything they get.
Where I grew up, Rural farm country, we had a term for these people...White Trash with Money. No common sense about the world they lived in. Waste everything they could get their hands on and cry poor, at the first sign of helping another person in need. The failure of their Parental responsibilities is so very apparent here. Think they will survive the coming rain? I think not. I hope not.
We have folks like this in the city too. The only difference is that they blow their cash on different things. My only beef is that these bozos can tank the economy if you get enough of them together at the same time.
Not long ago I was commenting online about the value of paying off the mortgage early. There are some out there who thought that this was the stupidest advice imaginable. I asked one of them what they would do instead, and he said "buy real estate". I wonder if he has changed is tune by now..
Did you mention that paying off your mortgage IS "buying real estate"?
I think the Obama strategy is actually targeted more towards those in the uppermost brackets. The charts on the Fortune story tell the tale: Those making an average of $15,000,000 per year pay 20% of it to taxes, about the same as those folks merely making $350,000.
So, why not write an article about how a family making, say, $50,000,000 per year will suffer when their tax bill goes from $10,000,0000 to $15,000,000? What dreams do they have to defer when their after-tax income is a meager $35,000,000?
The Koch family of Koch refining, for example, takes this sort of whining to a whole new level. David Koch is estimated to have a $17 billion fortune and he personally has sought to eliminate the estate tax so that his children will never starve. I shed no tears.
The new, Obama-proposed tax would not be $15,000,000. It would be $11,500,000. So your prospective "earner" of $50,000,000 would have $38,500,000 remaining for whatever they might spend that kind of money on. Of course, they already know that - if you make that kind of money, you would pay attention, as would your tax guy.
In contrast with David Koch, Bill Gates favors the Estate Tax, as does Warren Buffet. Not all of the truly rich are tightwads who are concerned about their progeny being able to survive in an orderly society.
Allowing great fortunes to be passed(largely unmolested) on to the children of the very rich is a de facto aristocracy. We are living with the consequences of that now, I believe. The great estates should escheat to the people upon death of the very rich. Passing on an education and a few hundred thousand dollars to your progeny should be the limit.
And while I am wishing for things I can't have...how about a pony?
I wouldn't care if the limit was in the multi-millions. What I think is wrong, what is so damaging to society, occurs when the amounts being handed down the generations is in the BILLIONS, i.e. enough money to move markets, sway government policy, to control the fates of thousands of people, etc. Such real power should not be handed to one by right of birth, regardless of ability. Such power should only be conferred on the basis of merit. To do otherwise is to invite aristocracy to flourish and with it corruption and depravity.
Given deflation, $100,000 is the new $1,000,000. ;>)
I think restrictions on the amount of wealth bequeath-able should be extended to corporate entities as well. Corporations and trusts should have a legal "lifespan" at the end of which they are dissolved. Corporate death penalty is also a good idea.
From Nigeria:Halliburton Scam - EFCC seeks clues from abroad
What about possible American collaborators, like... to pull a name out of the air... Dick Cheney?
Probably all innocent stuff: Cheney was too busy finding leads on yellow cake contracts to be busy about 'juicy oil and gas contracts'. Besides, he's arms length from the business side of things; otherwise, that would be conflict of interest, wouldn't it?
Wait, conflict of interest vs. interest in conflict?? mmmmm..... perchance, Iraq??
Oh boy, Dick... you better hope Obama is Ford and is generous with those Presidential pardons.
Crude Could Hit $20 A Barrel.
The perma Bear Beutel predicts $20 crude.
http://www.cnbc.com/id/27398298
They said about $37/barrel.
Could Yergin be right......?
Imagine the state of the global economy if prices actually get that low-->the un-affordability level of the average unemployed postPeak person to buy energy and food will be skyhigh. Like the poster upthread said: "Cow = $10 bucks, but nobody had any money."
Yergin is completely wrong. His forecast concerns oil supplies growing for many years into the future. Oil has been in tight supply for a few years now. Speculation causing prices to rise would not have been possible without tight supply. What price oil drops to is irrelevant if there is reduced capacity to pay for it. Demand will rise again and then the price will rise once more. This will inevitably cause other drop and the world will sink into a depression. Perhaps then serious efforts will be made to address the problem.
The important thing with regard to peak oil is that when it gets to $20, we need to keep it at twenty. Many are motivated to anticipate profitable resource recovery as scarcity makes the price increase. In the face of peak oil, this is just the wrong thing to encourage because all new resources are worse than current resources. Keeping the price low through coordinated conservation efforts avoids wasting effort on trying to develop these poor resources.
If we do get it down to $20, lets be ready to make further cuts in consumption that anticipate the depletion rate of oil that is already developed. That way, we can keep it at $20 for at least a decade and perhaps an entire trasportation fleet replacement timescale.
Chris
Unless we institute rationing, decline in demand is only a response to a decline in affordability. If "prices" stay low that'll be only due to "the economy" being lower still. Pick your poison.
For the US, the best option is probably rationing. We have a very innovative stand-by rationing plan that appears to avoid problems with black markets by including a white market in rations. It can be started by the President and does not require action by Congress.
Europe has had some success with fuel taxes and might want to continue in that mode. But, it is worth remembering that when we are off of oil, that tax revenue should be gone. Thus, if some programs rely on the fuel tax for funding stability, an alternative must be found. There is a pretty bad dynamic that goes on with sin taxes where the revenue from the sin becomes so needful that the sin becomes even more tolerated.
In the US, tax policy takes quite a long time to modify. We would do better just using the rationing plan we have to hand.
Chris
mdsolar -
As much as I am loathe to give the government even more power, there is something to be said for some form of gas rationing.
I look at it this way: if I am going to have my gasoline consumption restricted, I would rather have it done via rationing combined with an affordable price, rather than having it done through additional taxes imposed upon out-of-control market volatility. The former method is largely just an inconvenience; the latter method is not only an inconvenience but also drives me closer to the poorhouse.
And as we all know (at least in the US), once a tax is brought into existence, it is usually there for good, in one form or another, as the government becomes addicted to the additional revenue.
Gore has proposed tax shifting: tax what we burn, not what we earn.
Hanson has proposed a fully refunded tax (100% dividend).
On the rationing side there are Tradable Energy Quotas http://www.teqs.net/
Those are all carbon proposals. I am beginning to think that each fossil fuel and land use issue should be treated seperately. Oil has its own unique issues with depletion of the good stuff. And, we have a history of rationing gasoline in the US along with a policy in place. That gives the tip to rationing in this case. Coal seems to be headed for cap-and-trade which will be effectively a tax on electricity. I'd much rather see regulation prohibiting any new coal plants and fining utilities for using coal generation above a certain declining level each year. I think fines work well with industry. With natural gas, the potential for the Sabatier reaction to provide a renewable based substitute suggests that we might actually want to encourage retention of gas infrastructure. One might want to leave gas alone while renewables like wind and solar can come up to speed. When we have excess renewable energy, we can store it as methane for use in our current system. Expanding cropland needs to be balanced by tree planting elsewhere or perhaps biochar can make cropland carbon negative. The nitrogen cycle is just as important as the carbon cycle here because of the impact on estuaries.
Then, there are a whole host of efficiency actions to consider: freight shifting to rail, CAFE standards, building codes.... And, we have a series of incentives as well: $7500 for getting one of the first plug in hybrids, production tax credits for wind and accelerated depreciation for renewable energy equipment. Should we double down or are these industries growing as fast as they should?
One size fits all seems like it can't work so the attempts at a comprehensive response, all carbon tax or all rationing or all regualtion or all incentives are distractions from the real work.
What we need is 'bold persistent experimentation.' With gas rationing we can be bold because the policy is already set to be implemented. With coal, civil disobedience may be how we move forward, which is also bold. Maybe the carbon tax will only ever be applied to natural gas further on down the road, but at least we will try the experiment.
Chris
I was reading some recent Matthew Simmons presentations last night, and it occurred to me that, over the course of the past year, even normally staid and restrained commentators on Peak Oil have been displaying increasing signs of exasperation, impatience, and calculated hyperbole in their public writings and speeches. I think in particular of Simmons, along with Tom Whipple, Robert Hirsch, and Richard Heinberg.
I would say that is just one more small sign that 2008 is turning out to be a break-out year for the Peak Oil doomers in all sorts of ways.
Well...maybe they thought their time came, when oil hit nearly $150. The problem with peak oil is that nearly everybody thinks about oil exclusively in terms of price.
I refuse to be activist of PO. I gladly debate PO, however I don't give a damn if people get the idea or not. As far as I am concerned, this stupid humanity deserves to get whacked big time. I know it would harm me, but if we the people are stupid enough so that we do not understand PO and its implications, its for the better if we go extinct.
Stupidity is not a crime for which one deserves to be punished. It is an affliction and deserves our pity. It is rather like religion, a combination of denial and wishful thinking. It is just the psychological makeup of the average human and ranting because people do not understand and deserve to get whacked makes no sense.
The world is the way it is and people are the way they are. I am just as disappointed as you that people simply do not understand about peak oil, overpopulation and overshoot in general. But I understand why they do not understand and do not wish them ill because of their ignorance.
Ron Patterson
Stupidity is an evolutionary disadvantage that is "punished" through extinction.
The statement might have been better phrased as, "Is our society, culture, or civilization worth saving?"
Or if you like, are we individually smarter than yeast, but collectively dumber than a sack o' hammers?
http://despair.com/meetings.html
Spoken like a man who knows absolutely nothing about evolution. What species has ever gone extinct because that species was stupid? And the question is not whether our culture or civilization is worth saving. It is whether or not humanity is worth saving. I am confident it will be saved. There are far too many of us, occupying every niche on the planet. No matter what happens there will be enough survivors to keep the species going. Homo sapiens are not an endangered species.
We are all victims of circumstance. No one deserves to die because of their ignorance just as no hare deserves to die because he did not her or see the owl approaching. It and we are all just a part of nature. Because we, as a species, have never been in this predicament before no adaptation has evolved to help us through it.
Perhaps the wisest will be the ones with the best chance of survival. But it will not be their just desserts, it will just be the hand that nature has dealt them.
Ron Patterson
Darwinian -
Well now, I would agree that a critter like a cockroach or an athlete's foot fungus never needed much intelligence to become a successful species - just the ability to breed at least as fast as they are being killed off by their natural predators.
However, things are quite a bit different when it comes to homo sapiens. Not endowed with great strength, speed, large teeth and claws, or a high reproductive rate, humans became the dominant species on the planet solely through one characteristic - intelligence. Way back when, a stupid human had a much better chance of becoming some predator's dinner, whereas a smart human would have brained the predator with the stone axe he had just invented ('technology' thereby saving the smart human's hairy arse).
Though hard evidence is lacking, and the subject is highly controversial among anthropologists, there is some conjecture that says that the Neanderthals faded away because they weren't quite as clever as Cro-Magnon man and therefore couldn't compete as successfully over the long haul.
Maybe high intelligence will, in the final analysis, NOT turn out to be the most successful survival characteristic among competing humans. Given that highly intelligent/highly educated people tend not to carelessly breed like rabbits (with some even chosing to be childless), they may ultimately breed themselves out of existence, particularly should we enter an era where brutish strength, unbridled promiscuity, and a penchant toward spontaneous violence become more important survival characteristics.
"the time machine", h g wells? ...published in 1895?
when it comes down to the crunch, neocons, who operate on the principle that government should lie to the governed, will be eating the rest of us, who have been deliberately dumbed down to have the IQ of cattle.
...only wells got it ass-backwards:
oh well
...and god forbid anyone mentions that there are certain radical religious beliefs that say non-believers have the souls of cattle.
Ron, you're rude!
What is stupidity, sir, if not a maladaptive response? Stupidity is humanity in full flower, able to reach for the stars, or able to step on your own crank.
Only time will tell when it will be our turn to go under, species-wise, but it will happen, and our singularly stupid collective behavior appears to be hastening the day. I can't imagine that anyone would have a problem with that view of evolution, except perhaps one whose parochial interest is such that he resents any interlopers' trammels on his sacred grounds.
There's a long stretch between you, O Expert, and a "know nothing."
As one of my friends said, while discussing teenagers: "Stupidity SHOULD hurt!".
Apparently McCain and Palin said some nice things about ethanol in Iowa: http://greeninc.blogs.nytimes.com/2008/10/27/mccain-and-palin-utter-the-...
They are just the cutest pair of pander bears.
Chris
http://www.ohio.com/business/33345234.html
-------------------------------------------
Obama's support of alternate fuels sways farmers
It's not politics as usual for some Ohio corn growers whose futures are tied to ethanol
Rural America might still feel more closely aligned with the Republican Party's conservative social views, but it's the Democrats who are supporting the ethanol and subsidy policies that benefit so many farmers.
Ohio's corn growers are among those scratching their heads as they head to the polls next month.
------------------------------------
It's not the politics that concern me so much, but this excerpt from the article:
------------------------
One issue facing many farmers is that for the first time, many must pay for next year's fertilizer today to lock in prices that seem to have no ceiling in sight, and out of fear that demand from developing nations like China and India will create a shortage.
Deerfield's Wallbrown said he was paying about $120 a ton for potash — one of his fertilizer ingredients — just five years ago. Currently, it's going for about $800 a ton, he said.
So he has already purchased his supply for next year.
-----------------------------
As debt financing disappears into the vortex: will farmers have sufficient cashflow to prepay far ahead for the inputs they require?
How far can this prepayment security strategy be extended? Should a postPeak family be required to cough up the cash to be assured of getting groceries a year later?
What if the oil exporting countries said you had to prepay now to get the oil a year from now? Wouldn't that make it easier and cheaper for them to extract the last barrels? If it works for the farmers to be assured of I-NPK [plus it helps ramp O-NPK], wouldn't this also be a good thing for oil-importing countries?
I am not an economic guru, so I have no idea if this is even possible.
toto,
In a sense, what you propose has been going on for decades in the oil patch. I'll use China as an example. For at least 10 years they have been buying into fields around the world. Old fields needing reworking (Venezuela) or new fields just being developed (Angola…now China’s largest source of oil). The details are seldom offered but a typical trade might go like this: China pays for 100% of the capital cost but receives 60% of the oil production after the capital cost is recovered. How good a deal can this be? Depends on the costs vs. the price of oil when production begins. China’s share might have cost them $80/bbl at a time when oil is selling for $160/bbl…or $40/bbl. In essence they are paying for that oil in advance by spending the development capital. An additional benefit on some trades may be the "right of first refusal": China not only owns their share of the production but has an unrestricted option to buy the rest of the production at "market price". This access may become critical when supply cannot meet demand even if all the potential buyers can meet the price.
The exact terms of these trades are much more complex and variable. But this “concession’ structure does pretty much what you question: oil is effectively prepaid by some of the buyers through these capitalization deals.
Rockman,
Thxs for the info.It would be interesting to know what % of global supplies are now locked into these 'right of first refusal' contracts.
For example, using your numbers, if the Chinese are enjoying big profits on their $80 barrels when the market is $160: they should easily be able to bid 1 cent more per barrel for that portion in the 'right of first refusal' to secure that supply too.
yeah, kind of strange the two of them together, what are they afraid of that she will go off and say something off the wind-up tape ? at least the dem's have enough balls to let biden run.
"Together, more or less in line,
just keep truckin on."
where's the do-dah man ?
Don't know, but he once told me you've got to play your hand
Sometimes your cards ain't worth a dime, if you don't lay'em down....
Chris
Sometimes the light's all shining on me...other times I can barely see...
Yea for PO aware Heads. Where's Wharf Rat?
"pander bears" - I like that!
Interview on CNN with chairman of Suzulon Energy who just announced $5 billion in new renewable energy investment in China and India:
http://money.cnn.com/video/?/video/news/2008/10/27/news.corneroffice.suz...
He says the social and environmental impacts of energy investment need to be taken into account.
He doesn't think the U.S.'s "boom and bust" market cycles are very conducive to formulating effective solutions to the energy problem.
Zimbabwe: Wheat growers face fuel problems
Interesting or should that be instructive. I assume unemployment is very high in Zimbabwe, yet the harvest is halted because there is no fuel for the harvester. For whatever reason, harvesting the crop by hand is not practical, even in a country of high unemployment, starving people and acute fuel shortages.
I take from this that there is no natural mechanism which kicks in at some point to move people onto the land, even in cases of extreme hardship. I imagine that this will also be the case in the West, where structural problems and Climate Change will also bring about widespread problems with food production.
Nobody has any cash to hire people. There's high inflation, and limits on how much money you can withdraw from the bank each month.
And the fuel, fertilizer, etc., is subsidized by the government, so the farmers don't pay the "real" cost.
Still, I think you are right - moving back to the land is not something that will occur naturally. In bad times, people go to the cities, where the jobs are. Even in Harare, where they bulldozed the slums and dumped the people back on the countryside...they came back.
Hello Burgundy,
Good points. At this time, I think that Pres. Mugabe fears that giving out lots of lethally sharp scythes, machetes, hoes, and pitchforks would make the people clear a path directly to his house before they took to harvesting what they could from the fields. Too bad he wasn't Peak Outreach proactive much earlier. Let's hope the other global leaders notice in time so we don't replicate the sad events in Zimbabwe everywhere.
The new Net Oil export spreadsheet is out...I feel kind of like the guy in the movie the Jerk..."the new phonebook is here the new phonebook is here!" Anyway, declining trend:http://netoilexports.blogspot.com/
Jim Rogers advice: Buy agriculturals!
Check this: Farm-Credit Squeeze May Cut Crops, Spur Food Crisis
http://www.bloomberg.com:80/apps/news?pid=20601087&sid=a.YrOnFi9aJM&refe...
They are talking about Brazilian crop to drop 20%. They are not talking about Argentina, not about Ukraine, Kasachstan or India. Bottom line: We are going to see a severe drop in supplies of Soybeans, corn and wheat. Prices will go to the moon.
One could also say: buy Oil. Reference is made to the Petrobras article above. THE LOWER THE PRICES, THE LOWER SUPPLY WILL BE.
Just look what is going on in this moment with agriculturals:
http://www.bloomberg.com/markets/commodities/cfutures.html
Don't they realize that food is a declining share of global GDP? This planet is on the cusp of a fantastic "post-food" economic paradigm! Food is so 20th century.
Should we nationalize food production? Energy?
This is cute. I think you all will get a kick out of it.
KDolliso Brews Ethanol. :)
Hello TODers, I know I usually bring bad news and its always in advance and its always in spades.
Good news, I can't find anywhere in the financial news
to support what I am about to tell you all, so go check the numbers yourself.
I saw capitulation today in the USA stock exchanges. The volume numbers were thru the roof. I realise this news is scant and many won't be able to take comfort or solice from it.
The "good news" part is....shhhh...its a secret, okay.
The volume was up and the better news is...it isn't news according too the MSM.
Now heres the kicker, who ya gonna believe ? me or your own lying eyes? I know its horrible and all that, and I see what you see, I see stuff in advance though. I know Iam gonna need to pee late at nite, I know Iam gonna walk around in the dark, I even know Iam gonna bang my shin. I know stuff before it happens.
Bad news though (Nephilim picks 1 of 4 horses and saddles up) This won't stop or even stall PO, its actually a given and this market is because of PO.
I gave you the info I had and its up to you to do what you want with it.
Giddy-up !
The MSM is reporting that volumes were low, except at the very end, which was probably hedge fund liquidation time.
CNBC is in fine form tonight. McCain and Obama should tell GM to "get bent," but can't, at least before the election. We should open up the borders to immigration, because that's the only way we're going to sell all those unsold houses. We can avoid the fate of Japan, if only we don't raise taxes (like Obama wants to do).
It sounds like they are already preparing to paint President Obama as the guy who killed the economy. Of course, the possibility that the economy can't be saved no matter who is in the Oval Office doesn't enter into it.
Here's the Dow (blue) with volume (red)
A few more minutes of trading like that...
The housing situation won't be improved without buyers- I am surprised no one has floated the idea of USA green cards conditional upon the investment of a certain amount in USA real estate. This would give an immediate jolt to RE prices, as speculators bought up ahead of the rush.
Plenty of people need houses, and soon they'll be affordable. If you have a job.
GM is going bankrupt in some sense -- they have to shed their retiree pensions. That's got to be the main goal for the big 3.
i noticed the last minute trade volume has been going nuts the last few months... i looked into it, and there's some technical term for it, which i've forgotten and i didnt save the urls.
anyhow, when i first noticed the phenomenon, the first-minute and last-minute volumes kinda matched... which led me to believe that people were selling out overnight to play with the money elsewhere, in markets that were open.
lately, last-minute volumes have been hitting 100 million shares, sometimes.
if you look at today's activity, you'll notice that the market tanked down at the open, then climbed, then we had this last minute downer, again.
if we're watching a planned demolition of the global economy, intended to disguise peak oil and its role as motive to stage 9/11 and the "war on terror", then it begins to make sense in a perverted sort of way: the big players cash out of wall street overnight, manipulate overseas markets with their wall street cash, then, as the opening bell approaches on wall street, figure out what the plan for the day is and either buy back in at the opening bell, or wait for a while, letting the downer pre-market data terrorize investors into selling.
i think what we're witnessing here is wholesale economic terrorism, an economic 9/11.
That was interesting. And it was a sudden sell off. It seems to me that this sell off was required to keep the bad news going. Once psychology changes (e.g. an up day) it becomes more expensive (via shorting or using shares in inventory) to drag things down again.
So it was necessary at the expense of a couple of million shares of key stocks or index-options to get the market to sell off.
If it was a sudden liquidation, why not sell slowly during the day rather than dumping at any price, 5 min. into the close in order to close the indexes down.
As I understand it; it's when time's up on unsettled margin calls and positions are liquidated to cover payment. What you are seeing is hedge funds and other leveraged investors taking a bath, day after day. The losses mounting up within the financial system must be staggering.
Doug Nolan had a piece in Asia times entitled Histories Biggest Margin Call
http://www.atimes.com/atimes/Global_Economy/JJ28Dj02.html
This crisis is acting as a sort of global margin call whereby highly leveraged players of all sorts are being forced to liqudate assests at whatever price they can get. This ought to mean that those with cash, and the wisdom to know when to use it should be able to benefit from the misfortune of the worlds gambling uber-rich. So why doesn't the situation inspire any confidence that that is actually whats going to happen? Perhaps it is because the collateral damage to the economies is going to cost everyone dearly.
No, No, No...you didnt get fully what I was saying. geesh, Iam a lousy communicator.
When people (retail investors) sell, they almost always have mutual funds. this means they get the close. The big boys (institutional investors) are the fund managers. They gotta liquidate to pay the rats jumping ship. The hedge funds ( usually for the rich )
(but now available to any smuck who bellies up too the bar) managers are experiencing the same thing.
Now what I was driving at ( fiddling with the radio and steering with my knee, while holding a ciggerette)
Was that the worst has past.
That was the supposed "good" news. The bad news is, peak oil is still the underlying culprit. "Like a thief in the nite" (Ask Zodak the priest about that quote) this isnt going away.
Now Iam getting back on my horse and ride.
Giddy-up
Nephilim, Zadok here.
You're a great communicator... except you haven't told us to where you're giddy-up-ping?
Btw, a carry over from your posting few nights ago: you're in my prayers.... I can include your horse, too, if you like.
Cheers!
Ahh, You Zadok are familiar with the equestrians studies I see. No doubt, since you have the abilities of discernment, you are aware of the term "My string has been played" refering to a group of horses all riden and played out. The first horse (white) was a Hobson's choice and already left the barn. The Rose colored horse was gone before I got there also. The dark horse was likewise in use, but not yet returned and still in use, unlike the white and rose horses, their back and drying off. Its the pale horse thats going to run rough shod, but he's gonna leave the oil alone, the other horses having messed with it quite a lot.
As for where I ride, the horse seems to know the way and all I do is go along, Iam a bit player really. Get it?...horses bit?...okay, not funny, I agree. I would rather the black horse not return at all, but closing the barn doors, after the horses have left, well, we all know how well that works huh?
Zadok, "Pray for the forest pray for the trees, pray for the fish in the deep blue seas.
Pray for yourself and for God's sake, say one for me, poor wretched unbeliever". James Taylor, Gaia
This PO oil thing is gonna take time to play out. In the future, flipping pages in a history document or telling the tale will seem rather fast and won,t convey the depths or hardships. Those living it couldnt possibly pass on to those who didn't. Heck, Iam preaching to the choir.
I don't think the worst has past. For hedge funds or anyone else.
This chapter is over and the new chapter is starting. The reason you don't think its over is because it was written that way, otherwise you would put down the book in disinterest.
The economic turmoil will carry forward and the writter makes that abundantly clear, but the current severity of the downturn will correct and improvement will somewhat take precedence.
You see all to well that oil prices coming down is a bad thing, like a ciggerette smoker considers a full carton of ciggeretts a good thing. Of course it is a bad thing that oil prices come down, and you know why.
Companies shedding employees, more and more homes vacant, world supply lines in chaos, a global rout, everyone welcome. "Give us your poor, your tired, your huddled masses longing to be free"....Isnt that what the sign on the door said when everyone came?
Thats PO for you, deceptive advertising ? sure, you come too expect it. The recent severe market downturn will correct over a period of time, then resume, growth as you knew it, will never be again, as you already know. Who can honestly claim they are surprised ?
Don't tell me you can put this book down, I know better.
Pitkens on 60 min ... We are entitled to the oil
http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=10370047&ch=...
bleepin' classic
I don't understand the difference between us "having a call" on their oil at market price vs. them selling it on the open market and us buying it on the open market.
NEWS FLASH!!!!
From CNN
A jury has found U.S. Sen. Ted Stevens of Alaska guilty on all seven counts of making false statements on Senate disclosure forms. Stevens, 84, is the longest-serving Republican senator in history.
When will the people in this country wake up. High Crimes and Treason by the President, all the way to this petty BS of Stevens getting his house built by his oil buddies...is anyone awake?
C_A
The number of drilling rigs active in the United States has grown more than 50% since 2003.
http://intelligencepress.com/features/bakerhughes/ (Baker Hughes)
More drilling worldwide is leading to lower oil and natural gas prices.
so all we have to do is drill to lower gas and oil prices... we dont have to find anything, we just have to drill.
boy, that's a relief.
i guess, then, there's no sense in drilling in 10,000 of water, 20,000 more feet of dirt under that, 200 miles offshore.
nope.
now we can drill in any gardenspot vacation paradise where those nasty environmentalists will hold still for the drilling.
i recommend las vegas.
No not Las Vegas. What is drilled in Vegas, stays in Vegas.
ROTFL
Presumably, this is a result of the increase in oil prices:
And the 50% increase in drilling had the following effect on US crude oil production (Katrina/Rita had an effect in 2005):
The graph of Baker Hughes rig counts shows that natural gas rigs are down in the last month or so. Oil rigs seem to be continuing their climb.
Barack Obama: Neo-nazi assassination plot smashed by US government
http://www.telegraph.co.uk/news/newstopics/uselection2008/barackobama/32...
What are the odds on assasination within the year?
Colin Powell looks like having made the right call not to stand previously.
Sounds like a couple of kooks to me. Two kids who met on the Internet and came up with a crazy fantasy. Did they really think they could kill over 100 people...and then kill Obama? While wearing white tuxedos, no less.
My guess is that it was mostly talk. They didn't even know where Obama was going to be.
They are undoubtably completely potty, and had no chance of carrying out a hit on the Presidential candidate who anyway seems to be some way back on their priority list.
I'm guessing though that they may represent a more substantial body of opinion, some of whom may still have enough sanity remaining to actually be effective.
Eh. Comes with the territory for presidents. Numerous people have attempted to kill Bush, most of them completely nuts, with little chance of actually succeeding.
And a lot of Americans have been hassled by the Secret Service on suspicion of being up to no good.
All presidents run this sort of risk. Recent near misses, have all been nut cases -as opposed to people with political motivations. The present environment, as affected by wingnut hate radio, and fellow travelers making ridiculous charges about terrorist pals, and communist plots, is likely to bring out a much bigger than normal supply of nut cases. The increased level of danger is real.
Breaking news courtesy of Caitlin Moran, and her take on survivalism:
http://women.timesonline.co.uk/tol/life_and_style/women/the_way_we_live/...
Hello TODers,
Recall from prior postings that once the people understood Liebig's Law of the Minimum; that NPK and other trace Elements were vital to photosynthesis: manual mining of bones and guano got underway at low O-NPK flowrates. Then, in the early days of the I-NPK phosphate industry in Florida: manual phosphate miners would take a year to exploit 15 acres vs today's flowrate of huge draglines mining 15 virgin acres in a mere month.
Same with potash: originally O-NPK sourced by burning trees [Google the first US patent], then manual pick, shovel, and wheelbarrows in the first I-NPK mines at low flowrates again. But now:
http://www.mining-journal.com/mining_magazine/Mining_Mag_Breaking_News.a...
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New Sandvik fleet for PotashCorp
..The Sandvik MF420 has a variable height and width, and is designed to cut and transport material to auxiliary haulage equipment in one continuous operation. The machine can be used to drive entries, excavate mine rooms and extract pillars. Depending on the haulage system utilised, the MF420 can cut and convey approximately 15 tons of potash ore per minute.
The overall length of the machine is 12.8m and the weight is approximately 213 tons. The borer miner can cut to a height of 3.7m, and a width of 6.1m as standard, but also features adjustable cutting drums to allow changes to be made depending on customer`s requirements.
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How many pick & shovel miners would it take to mine & move 15 tons/minute?
But wait...at no cost to you and as a special bonus offering in this posting:
http://news.yahoo.com/s/ap_travel/20081027/ap_tr_ge/cb_caribbean_disappe...
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Sand snatchers shrink Caribbean beaches
...Some islands offer local quarries or designate certain beaches for mining, but large-scale nighttime thefts persist despite police patrols. Front loaders and other heavy equipment are now used instead of shovels to steal sand, which sells for nearly $200 for 1 cubic yard.
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That may be a higher price than the production cost of a cubic yard of raw ore P or K.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
http://finance.yahoo.com/banking-budgeting/article/106031/Forecasters-Ra...
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Forecasters Race to Call the Bottom to the Market
Could the Dow reach 7,000? 700? Seven?
-----------------------
There's a new Bond movie coming out. How about DOW .007
This one is seriously off topic.
It belongs to the discussion on the Wörgl freigeld. local currency.
The inspiration for the Wörgl experiment was one Silvio Gesell.
I feel inspired by the man's extraordinary insight.
Here's the preface to his "The Natural Economic Order"
Enjoy.
http://www.utopie.it/pubblicazioni/gesell/preface.htm
This is for Gail or anyone else in the insurance biz out there.
I just received a letter from my auto insurance company (AFI) and it said that come January 2009 when the yearly policy is renewed, all premiums will be adjusted based on your credit information from your credit reports. "We may also use a third party to develop your credit-based insurance score." What the hell is this all about? Are they going to start denying or raising insurance premiums based on x level of credit scores? I have excellent credit score, but WTF is this all about? Is it just another way for them to say, sorry we had to raise your rates due to your credit score?
How wide spread is this with other insurance companies?
Wow...the screws are already tightening for 2009!!
Some insurance companies have been using credit ratings for several years in rating automobile and homeowners coverage. When actuaries look at the data, it turns out that people with lower credit ratings have worse claims history, for both auto and homeowners coverages. There are a number of possible explanations:
1. People with lower credit ratings may have fewer cars per family, so the cars they have may be driven more miles. The lower credit score in this case picks up the extra mileage per car driven, since there are fewer cars to spread the mileage over. They may also live in areas that are more prone to burglaries, so have more homeowners claims. Nowadays, they may own a home that is going into foreclosure, so may less careful about taking care of it.
2. People who are careful about their credit may also be careful about other aspects of life--safer drivers, don't own large dogs that they let run loose, keep their smoke alarms working properly, etc. so they have fewer claims.
3. A certain amount of both auto and homeowner claims are probably somewhat fraudulent--claiming auto damage that was present before the policy period started, or claiming storm damage that was really wear and tear. People with high credit scores may be less inclined toward fraudulent claims.
4. There may be some intermediate issue which tends to cause both the low credit scores and more claims. For example, people with serious drinking problems or who take recreational drugs may tend to have low credit scores. They probably also are not very good drivers, and tend not to take good care of their homes.
I haven't been following the issue very closely. I believe that there are some states that forbid the use of credit scores in rating. There really isn't a direct cause and effect between credit scores and claims, which is one reason some insurance departments object. For example, a person who has had to file for bankruptcy because of large health bills might have a low credit score, but might be a great insured otherwise.
I guess the upside is that if you have a good credit score, you might get a discount on your rates.
Although I have a very good credit score, I find the whole thing a bit scary. Credit scores, and police records are accessed when you apply for a job. I get the feeling that once someone gets themselves into a hole, these factors are going to conspire to make it hard to climb out. Kinda feels like one mistake (or unlucky break) could send an otherwise responsible person into a deathspiral.
Thanks for the complete answer, Gail. I guess if this credit-based analysis has been going on for awhile, I was just surprised that they were so overt in a letter to spell it all out. That way they are covered if premiums go up without you have lots of claims filled.
The difference in France is interesting.
Credit companies there are not permitted to hold data in the same way as in the US and UK, and so can't rate customers.
This has led to much more conservative lending practices, and a low level of personal debt.
Of course, the major banks just decide to use depositors money to leverage up for a load of dodgy loans to 'emerging' countries abroad, which are now submerging, aided by the criminals in institutions like AIG, who admitted that they were undertaking transactions to enable European banks to get around capital reserve limits, but that is another story.
Hello TODers,
I hope you will read the weblink, not the teaser segment below:
http://economictimes.indiatimes.com/News/Economy/Foreign_Trade/Cut_price...
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Cut prices or we’ll reduce imports, India warns fertiliser suppliers
NEW DELHI: In an effort to rein in fiscal deficit by checking the rising fertiliser subsidy bill, the government has now aggressively signaled to global sellers that India, the big urea shopper, will not import this year if the commodity was unavailable at a reasonable price.
The ball lies in their court, even as the government meanwhile helplessly watches the gains accruing to the subsidy bill from falling global input, raw and finished material prices in recent week cannibalised by the free falling rupee against the dollar.
----------------------------
Wow! This is a high risk strategy IMO [I hope they are just bluffing]. India would be better off just to go ahead with normal price and volume negotiations.
Besides the Indian finance problems mentioned in the article, there are also agricultural effects that need to be considered:
Lack of nitrogen is the easiest Liebig Minimum to undesirably achieve because of high gasification rates and water-leaching. Additionally, this element has a tremendous effect on consequent plant yield if non-Liebscher optimized, and I already have high doubts on the amount and quality of India's topsoil testing nationwide. Also, I think many subsistence farmers in India do not do legume crop rotation for nitrogen fixation, but repeatedly go for crops needing high urea amounts, thus any residual nitrogen would be quickly exhausted.
Also, it is far cheaper for a Haber-Bosch ammonia and urea plant to temporarily shutdown [plus sell the natgas elsewhere], than to try and force them to continue production, but sell at a loss. Especially if there is a big spike in natgas pricing coming from shortages this winter [Refer to Rune Likvern's latest keypost]. Another danger might be if production volumes and transport flowrates get badly skewed in relation to to the critical seasonal timeslot for fertilization and sowing of the seeds; in other words, an unnecessary perturbation in the FF/I-NPK latency timecycle to really foul-up JIT delivery.
Next, if India does decide not to import urea, and the dire harvest effects become evident: this is like 'blood in the water' to finance sharks; they will brutally pound the rupee even further plus withdraw their invested funds. Finally, my guess is that communications from govt. to poor farmers is pretty weak: telling them that there is no urea will set off all kinds of farmer rioting and/or suicides--sadly, as evidenced by the many links that I have that posted over time on TOD, these events are already occurring at high rates.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Short sellers were betting the stock of Volkswagon would go down. Then there was news of a buyout by Porsche. The short squeeze that ensued when too many short sellers tried to cover their short positions at once drove the price of VW market cap. up hundreds of billions of dollars. The old adage that those holding long positions in stock can only lose the value of the stock while short sellers might have unlimited risk is proven true today. Some short sellers might have lost the ranch, the farm, the whole enchilada.
http://biz.yahoo.com/rb/081028/business_us_volkswagen.html
My guess would be that the short sellers are likely underwritten by the Government money floating around from Paulson et al, so why should they care?
All they are worried about are their bonuses, which they seem to get regardless of how much money they have lost.