DrumBeat: January 9, 2009

Saudi Arabia Can Raise Capacity a Third, Saleri Says

(Bloomberg) -- Saudi Arabia, the world’s biggest oil producer, could raise its oil production capacity to 15 million barrels a day, a former Saudi Aramco official said. That would be almost one-third above the current level.

“The resources are there, the organizational capability is there,” Nansen Saleri, president and chief executive officer of Houston-based Quantum Reservoir Impact and former head of reservoir management at Saudi Arabian Oil Co., said in an interview today in New York.

Scientists Refute Argument Of Climate Skeptics

ScienceDaily — Scientists at the GKSS Research Centre of Geesthacht and the University of Bern have investigated the frequency of warmer than average years between 1880 and 2006 for the first time. The result: the observed increase of warm years after 1990 is not a statistical accident.

Bruce Sterling’s Annual Report on ‘Things in General’

Then there’s energy. I’m not a Peak Oil guy, but of course wild turbulence in energy prices is gonna put people on edge. How can any person of reasonable prudence invest, plan and build with that kind of uncertainty?

Oil Price Volatility and Economic Chaos

When oil was trading at $40/barrel, no one believed the claim that it would hit $60 per barrel. When oil passed $60/barrel, no one believed it would break $100/barrel. When it shot past $100/barrel, no one believed it would get close to $150/barrel.

And when peak oil theorists warned that persistent high and rising oil prices would destroy demand for oil by triggering a major economic recession, no one believed us then, either.

Yet the arrival of that recession more or less on cue has done little to increase the respectability of peak oil in the mainstream media. With the exception of Dyer, who also wrote about it in his December 23 column, no one in the mainstream is even talking about peak oil anymore.

Venezuela faces racing inflation, slowing growth

CARACAS, Venezuela – Analysts predict Venezuela's economy is headed for a worse year than the government admits, as falling oil prices stall growth and inflation soars in the import-dependent country.

Takeover talk returns to oil patch

CALGARY, Alberta (Reuters) - Shares of Canadian oil producers, hard hit by crashing commodity prices and the credit crunch, have staged a quiet comeback since bottoming out in November and observers say the takeover chatter that roiled the market late last year may return as conditions improve.

Colo. company raises $34 million for biofuel plant

DENVER (AP) - A Colorado company that developed a process using bacteria to convert wood to fuel has raised $34 million to build its first biorefinery.

Saudi official says global oil demand could fall 45 percent

DUBAI (Reuters) - Oil demand could fall 45 percent due to the global financial crisis, but investments should be increased to ensure supplies are maintained, a senior Saudi government official said in remarks published on Thursday.

Majid al-Munif, an adviser to Saudi Arabia's oil minister, said the global financial crisis may cut oil demand by 23 percent to 45 percent, pan-Arab Al-Hayat reported, citing remarks made at a conference on Wednesday.

Algeria's Disappointing Gas-Plots Auction

The North African country saw scant interest in a recent auction of gas rights, a sign of weaker investment appetite among energy majors

TVA: Waste pond in Alabama ruptures

STEVENSON, Ala. (AP) — The Tennessee Valley Authority says a waste pond at its Widows Creek power plant in northeast Alabama has ruptured but the spill is contained.

The spill comes after a major rupture last month in Tennessee, when a dike released nearly a billion gallons of toxic-laden ash.

Tennessee Valley Authority Sued Over Coal-Ash Spill

(Bloomberg) -- The Tennessee Valley Authority, the federally owned utility, was sued on behalf of residents and property owners in eastern Tennessee affected by a coal-ash spill that dumped 1 billion gallons of sludge.

The Amish Flock From Farms to Small Businesses

The Amish move into the world of commerce has been more out of necessity than desire. Over the last 16 years, the Amish population in the United States — mostly in Pennsylvania, Ohio and Indiana — has nearly doubled, to 230,000, and the decreasing availability and increasing cost of farmland has forced many of these agrarian families, especially the younger generation, to gravitate to small business as their main source of income.

Recession resistant coal industry cuts back

CHARLESTON, W.Va. -- The ailing economy has left a big question mark hanging over the U.S. coal industry: will last year's high-priced contracts and today's declining costs be enough to offset rapidly falling world demand this year?

Already, mine operators have scaled back production plans for 2009, namely coking coal used for steelmill blast furnaces as manufacturing grounds to a halt.

Peabody Energy Corp., one of the world's largest coal miners, said this week it was cutting its production in Wyoming and Australia because of the economic downturn.

Investors have pulled billions out of the market and coal companies have not been immune.

Credit crunch may lead to another rice crisis

MANILA, Philippines (AP) — A drop in oil and fertilizer costs has halved the price of rice — a staple for almost 700 million of Asia's poorest — but it could jump again this year as farmers struggle to secure loans amid the credit crunch, experts said Friday.

The price of the regional benchmark, Thai 100 percent Grade B rice, fell to $575 per ton last October from a record high $1,080 per ton in April — a result of record production and declining oil and fertilizer costs.

Farmers, however, suffered losses because they were left with a lower-priced crop produced with high-priced fuel and fertilizer, said the Philippines-based International Rice Research Institute.

The outcry is muted, but the food crisis is getting worse

The financial debacle has drowned out coverage of food shortages. Where are the billion-dollar bailouts for the hungry?

OPEC President Says Oil Trend “Not Comfortable”

(Bloomberg) -- Angolan Oil Minister and OPEC President Jose Maria Botelho de Vasconselos said the current oil “price trend is not comfortable”, as crude fell for a fourth day.

“We know the price had a significant decrease and the trend is not comfortable,” he said today in the capital, Luanda. He did not clarify his comments further.

Ecuador Seeks $280MM Line of Credit from Iran for Oil Projects

Ecuador plans to seek a $280 million line of credit from Iran to finance pipeline and other oil-sector related projects, Mining and Oil Minister Derlis Palacios told Dow Jones Newswires Thursday.

"We are asking for a credit line of $280 million, especially to invest in our pipelines. We are sure that this money will come," Palacios said in a telephone interview.

Canada's oil sells for less

CALGARY — A supply glut has jammed up Canada's pipeline system, driving the price of Canadian crude below global benchmarks in an anomaly expected to cut into fourth-quarter profits in the oil patch.

The short-term aberration, caused in part by new output from the oil sands, comes as energy companies grapple with unprecedented swings that have seen the price of crude soar to a record $147 (U.S.) a barrel in July and sink to a close of $41.70 Thursday.

At times in December, the price of a barrel of West Canadian light crude fell almost $10 below that of benchmark West Texas intermediate crude (WTI), but the gap has since narrowed to about $2.50. The two usually trade at similar prices, or even a slight premium for the Canadian blend.

Era of cheap energy 'will never return'

The era of cheap energy is over and will never return as Britain pays the price of turning into a low-carbon economy, the former chairman of the Environment Agency has warned. Sir John Harman accuses politicians of failing to be honest with people about the costs of developing and delivering new forms of clean energy.

And he calls for measures to combat fuel poverty, through price controls, subsidies or higher state benefits to prevent the creation of a new class of low-carbon poor.

Steve LeVine - Falling Oil Prices: Again, Blame Speculators

Hedge funds and other speculators have had a hand in oil's price decline, just as they did in its rise. But don't expect congressional hearings now.

Russia-Europe Gas Spat Ends — For Now

The two sides are still unhappy. Putin has portrayed Ukraine as a flaky transit country, while Ukrainians say Russia is simply a bully. Over the next few weeks, Moscow and Kiev still have to agree on a price for Russian gas deliveries, subsidized since Soviet times. And even if that happens, there's no guarantee this same dispute will not flare up again in the coming months, as it regularly has over the past few years.

Hungary’s Car Workers Desperate as Gas, Recession Threaten Jobs

(Bloomberg) -- It’s 10 a.m. on a Thursday and Janos Oklos would normally be on the assembly line, installing dashboards at Suzuki Motor Corp.’s factory in northern Hungary.

Instead, he’s in his slippers, taking out the garbage at the hostel where he and 300 co-workers live in sight of the car plant in Esztergom. A natural-gas shortage caused by the dispute between Russia and Ukraine, forced the factory to close until next week, raising concerns about jobs cuts a month after Suzuki said it was reducing the local workforce by 20 percent.

Turkey aims to be alternative gas route to ease Europe's reliance on Russia, but problems loom

ANKARA, Turkey (AP) — As Europe is once again held hostage to the gas quarrels between Ukraine and Russia, Turkey is hoping to become an alternative route for the continent's energy imports — but its ambitions face tough practical and political challenges.

Analysis: Gas crisis forced a reluctant EU to act

VIENNA, Austria: Just a few days ago, the European Union was doing its best to stay out of the natural gas standoff between Ukraine and Russia.

On Friday, it was deeply — if belatedly and reluctantly — involved: It dispatched observers to Ukraine as part of a deal aimed at getting the gas flowing back into the 27-nation bloc again.

EU monitors typically keep tabs on border disputes, not pipelines. But Russia's cutoff was seen by many as an act of economic warfare — threatening millions of Europeans in the depths of winter.

Guaranteeing reliable energy supplies then came to be seen as a vital strategic interest.

Political fallout of Bulgaria's gas crisis

On Thursday, the crisis became so severe the ministry of energy issued an "austerity ordinance" which made major cuts to usage of natural gas to keep essential services like hospitals and schools open.

This in a fully-fledged member of the European Union.

Not surprisingly, the Bulgarian public is deeply unimpressed by their politicians.

Press reports have surfaced suggesting the government was warned by the Russians in the middle of December that there could be a disruption in gas supplies, yet no action appears to have been taken.

Baker Hughes announces December 2008 Rig Counts

Baker Hughes Incorporated announced that the international rig count for December 2008 was 1,078, down 18 from the 1,096 counted in November 2008, and up 42 from the 1,036 counted in December 2007. The international offshore rig count for December 2008 was 291, down 6 from the 297 counted in November 2008 and unchanged from the 291 counted in December 2007.

Entergy downgraded to 'Sell' from 'Hold'

Deutsche Bank on Friday downgraded power provider Entergy Corp. to "Sell" from "Hold," citing natural gas and power price declines and a weakened growth outlook due to price drops and lower earnings expectations for regulated utilities.

Chesapeake Energy Chief to Remain for 5 More Years

Chesapeake Energy Corp. Chief Executive Aubrey McClendon agreed to remain at the helm of the natural gas producer for at least five years, under a new employment contract that provides him a $75 million bonus.

Mr. McClendon was one of the most prominent executives swept up in a wave of margin calls last fall, which forced him to sell 94% of his Chesapeake holdings, worth more than $2 billion at their peak. The forced sale had led some analysts to speculate that Mr. McClendon might leave the company he co-founded in 1989.

List of power plants with coal ash ponds

Power plants in each state with coal ash ponds and the amount in tons stored, according to an Associated Press analysis of Energy Department data from 2005, the latest year statistics were available.

Greening the Ghetto

A hundred and fifty years ago, New Bedford was the whaling capital of the world. “Nowhere in all America will you find more patrician-like houses; parks and gardens more opulent, than in New Bedford,” Melville wrote. Today, the town is filled with empty factories. Its long list of problems— failing schools, high unemployment, gang violence — make it just the sort of place Jones likes to work in. The logo of Green for All, which is based in Oakland, California, is a sun rising over a crowded cityscape. The group’s goal is to broaden the appeal of the environmental movement and, at the same time, bring jobs to poor neighborhoods. Jones often says that he is trying to “green the ghetto.”

Hybrids Heat Up at the Car Show

Despite lower gas prices and few car buyers in sight, automakers are still seeing green with a raft of new electric and hybrid vehicles.

When It Comes to Cash, A Thai Village Says, 'Baht, Humbug!'

Homemade currencies, sometimes known as community or complementary currencies, have a habit of popping up during economic crises. Some towns in the U.S., Canada and Germany introduced their own scrip during the Great Depression. Similar schemes have emerged more recently in Japan, Argentina and Britain.

Petrobras to Pay Most in Bond Market Since ‘03 on Oil

Bloomberg) -- Petroleo Brasileiro SA, owner of the Americas’ biggest oil discovery in three decades, will pay the most in the bond market in five years to finance a record investment plan after crude prices tumbled.

The state-controlled producer may tap international debt markets within days, said Gianna Bern, president of Brookshire Advisory and Research Inc., a Flossmoor, Illinois-based energy economics research firm. Petrobras will boost borrowing this year from $8.5 billion in 2008 to help fund an investment plan of about $22 billion, Credit Suisse Group AG said yesterday.

Obama's energy quick fix bound for the slag heap

In November, The New York Times asked a number of prominent energy experts to assess president-elect Barack Obama's chances of ending American dependence on imported oil. Vaclav Smil, the prolific environmental thinker at the University of Manitoba – he's written 25 books – was one of these experts. The only way that Mr. Obama could significantly advance this objective, he said, would be with the help “of a deep and lasting recession.” Otherwise, he said, “there will be precious little of any rapid change.” As for Mr. Obama's promise to enact a cap-and-trade regime to discourage the use of fossil fuels, “it will only further cripple America's industries.”

Why so bleak, Prof. Smil?

“Energy systems are inherently inertial,” Prof. Smil said. “Energy transitions take decades to accomplish. Anyone who expects Mr. Obama to transform the world will be disappointed [and] the degree of disappointment that must follow such naiveté will be phenomenal.”

Gas Fight: T. Boone Pickens and FedEx Square Off

Dallas billionaire T. Boone Pickens and FedEx Corp. chief executive Fred Smith are now duking it out—over, of all things, the virtues of natural gas as a transportation fuel.

Bulgaria has learned what energy dependence really means

Whatever the reason for the cut off supplies of Russian natural gas to Bulgaria, the energy shock that hit the country on January 6 was a painful reminder of its total dependence on Russia’s energy policy.

During Gas Shortage – They Steal Gas Water Heaters

ZAGREB, CROATIA - Just like that old joke about selling ice to an Eskimo, Croatian thieves have become famous. During the biggest wave of the energy crisis which hit Croatia, when millions of people are freezing in neighbouring countries due to gas shortages, which is a serious threat in Croatia as well, gas water heaters are “hot goods” for Croatian thieves!

Half of Kyrgyz schools close due to power shortages

BISHKEK (Reuters) - Almost half of Kyrgyz schools have closed for two months due to the shortages of electricity needed for heating as the impoverished Central Asian state struggles with an energy crisis.

"According to a government decree ... all schools that use electricity for heating will be closed until February 28," an Education Ministry spokeswoman said.

Pakistan: Country's breadbasket facing flour crisis

Lahore: The Punjab province, considered the breadbasket of the country, is on the verge of another severe flour crisis - not due to smuggling or mismanagement - but because of current energy crisis.

The 10-12 hour power cuts daily mean that the supply time from mill to market has increased from eight hours to 2-3 days which could easily spark another flour crisis in the country.

Brazil's Ethanol Industry

The energy crisis of the 1970s brought about high gas prices and limited supplies that generated an intense interest in renewable fuels and weaning ourselves from foreign sources of oil. However, when gas prices plummeted in the 1980s, renewable fuels and energy independence were quickly forgotten.

The story evolved differently in Brazil. After investing heavily in renewable fuels in the 1970s, Brazil kept the program alive during the 1980s. This has given Brazil a head start in the current situation. With its robust ethanol program, Brazil has developed an extensive ethanol industry. In this article we will discuss the structure and growth potential of Brazil’s ethanol industry. In future articles we will discuss Brazil’s domestic usage and exports.

Green Crude

Never mind falling oil prices. Bill Gates and the Rockefellers think they know a better way to fill up your gas tank: algae (Yes, we mean pond scum).

Somali pirates free Saudi supertanker

MOGADISHU (Reuters) - Somali pirates freed a Saudi supertanker seized in the world's biggest ship hijacking for a $3 million ransom on Friday, an associate of the gang said.

The capture of the Sirius Star and its $100 million cargo of crude in November drew attention to a surge in piracy off Somalia that has brought global navies rushing to protect one of the world's most important shipping lanes.

Farah Osman, speaking to Reuters from Haradheere port near where the tanker had been held, said the pirates had wanted more money but finally agreed $3 million for the ship.

Saudi Arabia deepens February oil supply cuts

TOKYO (Reuters) - The world's top oil exporter, Saudi Arabia, will deepen its crude oil supply cuts in February from January levels to Asian consumers to their lowest in almost five years, industry sources said on Friday.

Oil below $40 after jobs report

NEW YORK (CNNMoney.com) -- Oil prices fell Friday as a government report showing significant job losses added to concerns about weaker demand in an ailing economy.

U.S. crude for February delivery fell $1.89 to $39.81 a barrel.

Taking the shock out of farm energy costs

The memory of $140-a-barrel oil brought George Scott to the Energy Solutions for Our Farms conference in Moncton.

“I have a lot of oil furnaces heating six acres of greenhouses,” said Scott, Managing Director of Scott’s Nursery Ltd. in Lincoln, New Brunswick. “After what happened with the price of oil this year, I’m looking for an alternate heat source.”

A Green Agenda for Obama's First 100 Days

The world's top environmentalists offer the president-elect their advice on the priorities he should set for his first 100 days.

The Peak Oil Crisis: Cars - Redux

With increasing gasoline prices and falling family incomes, unlimited use of private cars that nearly all in America now enjoy will start moving back up the socio-economic tree. The fortunate, who can afford the new generations of ultra high-mileage plug-in cars, will not have to worry about increasing gasoline prices, shortages or rationing. For the rest, use of the aging fleet of our current car inventory will gradually be reduced. Car pools and public transit are likely to become far more prevalent. Efficient cars will become more desirable as gasoline approaches unaffordable prices.

The very nature of the car will likely evolve to a smaller more utilitarian device to compensate for declining incomes and high gas prices. Consumer perceptions about what constitutes a desirable car that grew up in last 50 years will no longer matter. Various forms of government intervention into the automobile and oil industries - ranging from tax policies to ownership -- will have a major influence in the evolution of cars during the coming decades. In Europe, 30 years of high liquid fuel taxes have resulted in a civilization that uses about half the oil per capita that we use in America. There are already calls in the U.S. for much higher, possibly varying, gasoline taxes to stem roller coaster gasoline prices.

Gazprom expects gas monitoring deal signed Friday

MOSCOW/KIEV (Reuters) – Russia's gas monopoly Gazprom said a deal to monitor gas exports via Ukraine would be signed Friday, allowing for the resumption of supplies to Europe cut off by Moscow's price row with Kiev.

Crisis chills Europe's ties to Russia

Moscow – With parts of Eastern Europe now going without heat because of the lingering natural gas conflict between Russia and Ukraine, officials in Europe say they must do more to prevent Russia from having so much control over the continent's thermostat.

India calls in army but returning workers ease crisis

NEW DELHI (Reuters) - India called in troops to load fuel tankers and some striking employees at state oil firms went back to work on Friday, easing fears of a prolonged fuel crisis.

The government dug in its heels on the third day of a stoppage that has triggered panic buying and cut natural gas and crude oil output in the energy-hungry nation, saying no further talks were possible and threatening to imprison striking workers.

Schlumberger eyes job cuts beyond North America

SAN FRANCISCO (Reuters) - Schlumberger Ltd, the world's largest oilfield services provider, plans to shed 5 percent of its North American workforce, or 1,000 jobs, and is looking at cuts elsewhere, a spokesman said on Thursday.

"We do anticipate reductions in jobs worldwide, but it's too early to say," said Stephen Harris, a spokesman for Schlumberger, which has 84,000 workers in about 80 countries.

Chevron sees big drops in fourth-quarter production and earnings

SAN FRANCISCO (Reuters) - Chevron Corp (CVX.N) expects its fourth-quarter earnings to be significantly lower than the previous quarter due to the impact of lower energy prices on its exploration and production business.

The second-largest U.S. oil and gas company also said on Thursday its U.S. oil-equivalent production in October and November was 608,000 barrels per day, down from 647,000 the previous quarter and 730,000 in the fourth quarter of 2007.

Argentina offered natural gas surplus

LA PAZ -- Bolivia says it will try to sell some of its natural gas surplus to Argentina now that sales to Brazil have dropped 30 percent.

Chinese oil fund in the pipeline

China is reportedly planning to establish a giant government-led fund along the lines of the National Social Security Fund, in a bid to stabilize oil supply, demand and prices.

..."The timing is good for setting up the oil stabilization fund," said Han Xiaoping, an energy analyst with Beijing Falcon Pioneer Technology Co. "At present the international oil price is relatively low and China has adequate forex reserves."

China should use the fund to build more crude oil reserves and digest some of its foreign exchange reserves, he said.

International Energy Agency 'blocking global switch to renewables'

The international body that advises most major governments across the world on energy policy is obstructing a global switch to renewable power because of its ties to the oil, gas and nuclear sectors, a group of politicians and scientists claims today.

The experts, from the Energy Watch group, say the International Energy Agency (IEA) publishes misleading data on renewables, and that it has consistently underestimated the amount of electricity generated by wind power in its advice to governments. They say the IEA shows "ignorance and contempt" towards wind energy, while promoting oil, coal and nuclear as "irreplaceable" technologies.

Start-ups put farm debris to use as fuel

JENNINGS, La. — Want to see what you'll be pumping into your car in a few years?

Come visit a scruffy patch of land here in sugar-cane country, where 15-foot-high piles of what looks like hay stretch three blocks alongside a gleaming, silver-and-yellow jumble of pipes, tanks and girders.

The hay, actually crushed sugar-cane stalks, is feedstock for the first cellulosic ethanol demonstration plant in the USA. The biorefinery cranked up this week and, according to its backers, kicks off a new era of clean transportation fuels that won't compete with the food supply. Corn-based ethanol, by contrast, has been blamed for driving up food prices and doing little to reduce the global warming gases emitted by petroleum-fueled vehicles.

The Downside of ADM's Focus On Biofuels

Even before oil prices collapsed, Patricia A. Woertz had one of the most delicate balancing acts in business. Now things are getting downright precarious.

As chief executive officer of Archer Daniels Midland, the world's largest grain processor, Woertz has watched various parts of her $70 billion-a-year empire gyrate wildly during the past year.

Tilting at wind farms

A way to make wind power smoother and more efficient that exploits the inertia of a wind turbine rotor could help solve the problem of wind speed variation, according to research published in the International Journal of Power Electronics.

Wind company shuts doors in Rutland

RUTLAND, Vt. - A Connecticut company working to install a wind-power project on Grandpa's Knob in Castleton, Vt., is closing its Rutland office.

Temporary Suspension of Madera, CA Ethanol Facility Operations

SACRAMENTO, Calif. /PRNewswire-FirstCall/ -- Pacific Ethanol, Inc., the leading West Coast-based marketer and producer of ethanol, announced today its intention to temporarily suspend operations at its 40 million gallon per year ethanol facility located in Madera, CA. Extended unfavorable market conditions for producing ethanol has prompted Pacific Ethanol to suspend operations beginning January 12th.

Philippines revisits nuclear energy option at 'white elephant' plant

MORONG, Philippines (AFP) – The Bataan nuclear power plant stands as a monument to the greed and corruption of the years the Philippines spent under strongman president Ferdinand Marcos.

It was originally meant to cost around 500 million dollars, but the final price tag of 2.3 billion dollars was only paid off in April 2007.

A huge slice of the inflated balance was allegedly stolen by Marcos and his cronies.

And it has never powered so much as a light bulb.

Nuke plant cuts power by 60 percent after leak

VERNON, Vt. – Vermont's lone nuclear power plant is cutting the amount of power it generates by 60 percent after finding a leak of mildly radioactive water.

Lithium Unicorns and Alternative Energy Storage

I am gravely concerned when Li-ion battery executives use a report that would not pass muster with the SEC as proof that their companies don’t face any supply issues, particularly when the report acknowledges that price increases will be required to justify the resumption of mining and processing of alternative resources.

New homes being built smaller

The American dream is shrinking. For the first time in at least a decade, builders are substantially reducing the size of new houses.

"We're trending toward smaller homes," says Gopal Ahluwalia, director of research for the National Association of Home Builders. He says growth in the average size of new single-family homes, which went from 1,750 square feet in 1978 to 2,479 in 2007, is starting to reverse.

His analysis of Census data shows that homes started in the third quarter of 2008 averaged 2,438 square feet, down from 2,629 square feet in the second quarter. Ahluwalia, who began the quarterly analysis in 1999, says there have been slight dips before, but the latest drop was much steeper and is likely to hold even after the economy recovers.

New rules on toys could spell doom

Looming federal regulations that could force used-item retailers and thrift stores to trash many children's toys and clothing are getting a second look from the Consumer Product Safety Commission.

The regulations, passed under the Consumer Product Safety Improvement Act in August and set to go into effect Feb. 10, are aimed at eliminating lead-tainted products designed for children 12 and younger. They require all such products — clothes, toys and shoes — be tested for lead and phthalates, the chemicals used to make plastics pliable.

The main issue for retailers is the costly testing, which can run from about $400 for a small item to thousands of dollars for larger toys with multiple pieces, according to Kathleen McHugh, president of the American Specialty Toy Retailing Association.

Products not tested would be deemed hazardous whether they contain lead or not, under the wording of the law.

Abby Whetstone, owner of Twice as Nice Kids in Denver, said consignment stores such as hers would not be able to afford expensive lead tests.

"It would affect every piece of inventory we have," Whetstone said. "We're a little terrified at this point."

Obama's green energy plans build hopes, skepticism

WASHINGTON (Reuters) - Proponents of alternative energy and energy efficiency were elated on Thursday by President-elect Barack Obama's economic stimulus speech, but some analysts warned his energy agenda could hit turbulence in Congress or from the slow economy.

Will Americans put on "recession pounds"?

DALLAS (Reuters) - Americans may reduce the amount they spend on food in response to a sour economy but some experts fear they may pick up weight in the process.

The specter of "recession pounds" is a concern weighing on health professionals, who point to numerous studies linking obesity and unhealthy eating habits to low incomes.

They fear that as people cut food spending they will cut back on healthy but relatively expensive items such as fresh fish, fruit, vegetables and whole grains, in favor of cheaper options high in sugar and saturated fats.

George Monbiot: The sceptics are skating on thin ice

The weather of the past few weeks would have been unexceptional in the early 1980s. Today it is being cited as definitive proof that manmade climate change can't be happening. There's a splendid example of such blithering idiocy here: Gerald Warner, writing in the Telegraph, contends that the cold snap lends more support to the idea of a new ice age than to global warming theory. Were he to apply this reasoning consistently, he would have to write another blog on Sunday showing that, due to the unseasonably warm temperatures the Met Office forecasts for the UK this weekend, global warming is definitely happening. And the following week, if there's another cold snap, he should predict a new ice age again.

Cyprus runs risk of desertification, says geophysicist

NICOSIA (Reuters) - Cyprus runs the risk of desertification by the end of this century as it feels the brunt of climate change and drought, an expert warned on Friday.

Can Nitrogen Be Used to Combat Climate Change?

Excess nitrogen mitigates carbon dioxide's effects--but with considerable risk, scientists say.

Study warns of dire overheating of crops, food crisis by 2100

Hotter summers from global warming will drastically reduce crop yields and lead to a disastrous food shortage for billions of people by the end of this century, predicts a study released Thursday in the journal Science.

"The hottest seasons on record will represent the future norm in many locations," says the study by David Battisti, a University of Washington atmospheric scientist, and Rosamond Naylor, director of Stanford University's program on food security and the environment.

While much attention has focused on the threat of increased drought because of climate change, the potential impact of increased temperatures on crops is often overlooked, the report says.

The EIA has released the annual price data for 2008, and as expected, the average 2008 spot price is slightly (35¢) below $100:

Here are the year over year exponential changes in US spot oil prices since 1998 (the one annual decline is highlighted):

1999: +30%/year
2000: +45%/year
2001: -16%/year
2002: +1%/year
2003: +17%/year
2004: +29%/year
2005: +31%/year
2006: +15%/year
2007: +9%/year
2008: +32%/year

The 10 year (1998-2008) rate of increase was +19%/year (doubling about every 3.8 years).

If oil prices average $50 in 2009, the 11 year rate of increase will be +11%/year (doubling about every 6.5 years), and the year over year decline rate would be -69%/year (a 50% reduction in price in one year).


Since I have learned so much from you here on TOD, I owe ya' a favor...so take it for what it's worth, just don't bet every cent you got on that curve, o.k.?


Nothing to bet on, the curve, through 2008, is historical. Nothing is going to change it.

But it will be interesting to see what the next 10 years looks like--out to 2018.

Using the three exponential rate of change numbers referenced above:

At +19%/year (1998 to 2008 rate of increase), nominal oil prices in 2018 would be $668.

At +11%/year, nominal oil prices in 2018 would be $300.

At -69%/year, nominal oil prices in 2018 would be 10¢ per barrel.

(There is actually a certain symmetry to 2018, versus 2008. Our middle case is that the top five have, through 2008, shipped about 20% of their post-2005 cumulative net oil exports, and our middle case is that by 2018, halfway to projected near zero net exports, they will have shipped about 80% of their post-2005 cumulative net oil exports.)

so WT,
if we assume that gold is an inflation hedge, and gold has increased at a rate of 11% / year on average over the past 10 years ($290 - $850)
then 11% is the real rate of inflation

if you deflate oil by the rate of growth of gold over that last 10 years

19% - 11% = 8% real growth in oil prices over and above inflation

or of course you could say that becuase golds rate of increase over the past 40 years has been about 8.9% per year (better than the S&P!) so perhaps oil, once it got out of an over supply situation, was mostly driven by inflation for most of the past 10 years,

and it is now driven by a declining supply to go beyond the "gold inflation rate" if the nominal rate of 10-20% keeps up

I now believe that we are totally doomed... completely... without question. We lost our ability to work together without crutches. Consider:

- Up until the late 1980s, if one wrote a letter to someone one was usually assured of getting a decent, well-formatted, and informed reply back;

- In the 1990s, one could expect an acknowledgement of getting a letter, but some follow-up was necessary;

- Today:
Them: Did you ever find out that info?
You: Yes, I sent you the e-mail with the details.
Them: Oh, I didn't read it.

Oh, sigh... we're so doomed....

I think the main problem is that email is losing the battle with spammers. When people open up their inbox and find it cluttered with hundreds of garbage messages, people will just throw up their hands and stop using it.

I have yet to see a serious proposal that can fix this.

Try gmail. Works for me.

I got a GMail account, never gave out the address ANYWHERE to ANYONE.

The ONLY mail I have EVER got for that GMail account is SPAM.

I take the 'Spamless' promise of GMail with a pair of elbow length rubber gloves AND some Waldo's.

E-stamps would get you a long way there :)

Email is steganograpic camoflauge. The NSA and whoever is doing intelligence for the Russians send out 100,000 spam messages for each real message so you can't use traffic analysis to find out what is going on.
Otherwise a 1 cent per message tax or fee would trash spam. You can't send out ads that don't pay for themselves. The local grocery store could send you coupons and expect a payback. Not many other people could expect a payback.

You have ignored both the law of large numbers and the gullibility of people. Personal avarice trumps anything that any government could do. The bulk of spam is due to so-called" entrepreneurs. Whatever devious means may be encoded by the NSA are well below the noise level and undecipherable. If they chose the "Hiding in plain sights", the same rule applies.

BTW, I seriously doubt that you know what stenography is. My key was when you used the the phrase "whoever".

Buy another roll of aluminum foil, wrap it around your head and get back to me.

If you present a more cohesive message, I will be glad to get back to you.

"Gerald Warner, writing in the Telegraph, contends that the cold snap lends more support to the idea of a new ice age than to global warming theory. Were he to apply this reasoning consistently, he would have to write another blog on Sunday showing that, due to the unseasonably warm temperatures the Met Office forecasts for the UK this weekend, global warming is definitely happening. And the following week, if there's another cold snap, he should predict a new ice age again."

This is why I prefer to use the term "climate change" rather than "global warming". My experience in talking with people about this reveals that most of them have the idea that the entire planet will warm up evenly and turn into desert. In fact, some areas will be cooler or wetter, because the temperature rise is an average. Some of us will not be badly affected; Calgary is 1 km above sea level in a continental climate zone, so we're not overly concerned about rising sea levels or hurricanes.

One other piece of terminology I object to is stating that the sea level is going to rise by x metres by the year 2xxx. This gives people the idea that if their beachfront house is x metres plus 1 above the high tide mark now, then they'll be alright. Far more likely is the occurence of storm surges, not just hurricanes, that temporarily swamp coastal areas, then do so with increasing frequency over the years until people give up rebuilding each time and move away.

Calgary doesn't have storm surges, but the Bow and Elbow Rivers that flow through it have had two "once-in-a-century" floods in the past decade. The homeowners that live along the banks have rebuilt twice, with slightly higher retaining walls along the river each time. As Isaac Asimov liked to say, "Against stupidity, the gods themselves contend in vain".

"Global Warming" or "Ice Age" I personally believe both forces are at work. Ice Age-Normal 22K year cycling, Warming-High CO2. Both are powerful forces opposing each other, who knows what type of chaotic weather will come.

For an argument that CO2 based warming is the trigger for an ice age see John Hamaker's "The Survival of Civilization," especially Chapter 4.

PDF Warning

It doesn't really matter whether it is cooling or warming ... the historical data shows that the climate isn't stable over timescales of hundreds or thousands of years. When the climate changes, not if, I doubt we will be able to adapt fast enough

Periods of continental glaciation, and the interpluvial periods between them, are caused by orbital forcing. There are three main cycles that force climate: orbital eccentricity, axial declension, and the precession of the equinoxes. These cycles may potentiate or cancel one another out. The periodicity of these cycles vary, so that glaciations aren't regularly spaced in time. The fact of the matter is that currently, orbital forcing is being completely swamped by the accumulation of high heat capacity gasses in the atmosphere, dumped there by the oxidation of fossil fuels and other human activities. CO2 is the primary culprit and accounts for about half of observed warming.

As for sea level rise, the wild card is the West Antarctic Ice Sheet (WAIS). The WAIS rests on unconsolidated glacial till on the sea floor and has collapsed and reformed repeatedly over the course of the Cenozoic. Collapse of the WAIS would raise sea level six meters in a matter of only a few years. The WAIS is inherently unstable and how likely it is to collapse anytime soon is anyone's guess. Thermal expansion of the world ocean coupled with the melting of mountain glaciers worldwide make sudden collapse of the WAIS in the near future a distinct possibility. People are well advised to live sufficiently far inland from the coast.

Sir, I disagree.

The IPCC assume an infinite atmosphere and do not successfully model Water Vapour or Cloud. Even the term ‘Green house Gas’ is loaded. In order to get a Green house effect, you require a closed system encapsulated in Glass in order to limit convective heat transfer. The basic concept of Temperature increases with CO2 emissions is fundamentally flawed with respect to a chaotic open system which contains Water Vapour. as a primary main forcing

To make CO2 the culprit (natural or Anthropogenic) for warming is flawed.:

Latent Heat of Evaporation
Latent Heat of Fusion
Specific Heat
Sensible Heat (temperature)
And Especially: the Specific Heat of Water.

There may be some slight warming tendency due to Anthropogenic forcing, but it is by far inadequate as an explanation of the (now recently collapsing) warming trend.

Oceanic forcing, Orbital forcing, Solar forcing, Water Vapour, Condensation are all in the gang. CO2 was the poor junior member of the gang that was unhappily caught at the scene of the crime. The real culprits are walking away and nonchalantly whistling.

Of course, the next excuse is that Anthropogenic CO2 will cause ‘tipping points’ – at some vague point in the future. Where is the evidence? Where is the mathematical model? These future ‘tipping points’ are currently unsound. Oceanic temperatures and pressures at the depths that Methane Clathrates are found are stable. There is no warming at these depths. Methane Gas releases however in North Hemisphere Lacustrine and Tundral environs and are evidence of the recent decadal warming trend. And this now appears to be in reverse. Any tipping points will be way out of our hands and are due to Orbital and Solar forcings that lead to Ice House or Hot House stages in the record.

What is needed now is a peer reviewed explanation of why 8 years – (lets both agree that the 1998 anomaly was due to the Pacific Oscillation) of a cooling trend were not identified in advance by the IPCC models even as CO2 continues rising. Bearing in mind that the IPCC completely overlooked any possibility of cooling I suggest that, if this delta increases with time, the advocates of Anthropogenic Global Warming will have a problem because as always: Observation trumps Theory. And before any say that this is the ‘10th warmest year on record’, I agree it is the 10th warmest year – in a cooling trend from a high point and each successive year since then is cooler than the prior year. The overall warming phase since the start of the Holocene with natural variations such as the bronze Age Warm , The Roman Warm The Medieval Warm and cooling phases such as the LIA shows sufficient warming as great as the current Modern Warm Period. None of these periods required an Anthropogenic pulse of CO2. All the models predicted a warming trend. The temperatures are now well below the IPCC low case.

I understand that Mr. Gore recently made a prediction on German TV that the Arctic Ocean will be ‘Free of Ice in Five Years’. This claim was made in late 2008 around the time of the Poznan Conference. This is good. He has committed to an actual date which will be verifiable by observation.

Latent Heat

Specific Heat

Sensible Heat

kind regards


You write much about the "Greenhouse Effect" (which has long been known to be a poor choice of wording), but present so many errors that it's hard to know where to start commenting.

For example, the Milankovitch orbital changes which influence climate have very long periods, thus would have little impact over the next few hundred years. Water vapor in the atmosphere is a known "greenhouse gas", but mankind is not directly changing the amount, it is instead a function of temperature. The CO2 "greenhouse effect" changes atmospheric transmission in a different range of the IR emissions compared with H2O. Most of the warming due to CO2 occurs above the troposphere in the Stratosphere above almost all water vapor. Changing the CO2 in the stratosphere warms the troposphere below. In the troposphere, most of the heat removed from the surface is transported upwards by way of convection, with both sensible and latent heat playing a part. Of course, your claim that the model builders assume the atmosphere to be infinite is completely off the mark as there would be no way to compute the IR heat transfer from one layer to the next out to deep space.

There's been considerable discussion regarding the Earth's temperature changes in the recent past, by which I mean the last 2000 years or so. That there was a Little Ice Age in Europe is well known, but on a global scale, it's impact appears to have been small. There is even less evidence for a global warming during the so-called "Medieval Warm Period" which exceeded present conditions.

I expect that you have no proof of your claims, other than a few "peer reviewed" presentations which have since been shown to be flawed. If I am wrong, I am sure that you will post references for EACH of your outlandish claims in a follow up comment.

E. Swanson

Thanks Black_Dog. That was well said. I wanted to reply but was so overwhelmed. As you said, it's hard to know where to start. And I'm at work which limits my time available to dig up all the references I would like. Perhaps tonight or tomorrow.

dropstone, please educate yourself before posting on this again. There is a lot of science you could learn from.

WaterWeasel, Mr. dropstone might do well to look at this post:


There was an earlier post on the same topic:


E. Swanson

Mr. Swanson...all I can say is:



"....you require a closed system encapsulated in Glass in order to limit convective heat transfer.."

the earth at some altitude is surrounded by deep space, essentially a vacuum, so how's that going to transmit heat by convection ?

infared si, convection no.

Do any climatologists ever talk about climate change in terms of heat, or thermal mass? All I've seen used so far is temperature. (A cup of boiling water has a is hotter temperature than a 55 gallon drum that's full of 50F water, but the drum has more heat as well as thermal mass (resistance to temperature change)).

It doesn't mean much to me when they point out that heat islands (such as cities) have increased in temperature over the past 50 years... what I can understand better is how much more heat are the ocean currents moving.

I use the heat example all the time starting with a boiling pot of water then explaining that the same roiling happens in the atmosphere then I get to teach people how high and low pressure areas and wind work.

At this point I say that adding heat to the atmosphere generally increases the wind speed and the temperature effect is secondary.

From here on out its really a matter of how much they grokked but generally they realize that climate change is complex but because they understand wind and I'll also throw in how wind works in evaporation they understand that stronger more powerful storms and extreme weather are the primary results not "hot" air.

If I've still go them then I'll talk a bit about the ocean as a heat reservoir and the surface wind driven currents salinity/water temp in the ocean and how it works the same way as the atmosphere but slower. A lot of people seem to know that Europe and the west coast of the US are warmer because of currents and we can then talk about how the ocean controls weather.

So once they grasp how the heat causes the worlds atmospheric and ocean circulations all you have to do then is ask them what happens when we start mucking about with it via adding CO2. At this point generally they get that extremes are the answer.

Actually, I believe the Humboldt Current runs south from Alaska and keeps the west coast of North America cooler than it otherwise would be. Certainly does in the summer when it's foggy 24/7.

Sorry, wrong continent and direction for the Humboldt Current. From Wikipedia:

"The Humboldt Current is a cold, low-salinity ocean current that flows north-westward along the west coast of South America from the southern tip of Chile to northern Peru."

Oops, my bad. There is cold current offshore here, but it's apparently called the "California Current".

Thanks for straightening me out!

As a former San Diego resident (hello Ocean Beach!), I can assure you that the CC can be a cold current indeed.

Moderates the weather is probably more correct for these currents both Europe and California.

The east coast of the US does not have this sort of flow of fairly constant temperature water cost to the coast.

I generally focus on the winter warming effect i.e the water temperature is high vs other coastal areas on the same latitude.
So by warm I mean warm winters. Spain is at the same as Boston and you have Vancouver etc. Gives people and understanding of how important Ocean currents are to climate.

My experience at least is few people really think about this but they seem to pick it up once you explain it a bit.

"Beware the reductionist" K. Cunningham

Too bad the rating system is down.

I would like to give all you climate experts upthread high +5's for stopping to explain to us climatology dumb dumbs about the basics of this stuff. I'll admit to being close to totally "Ignorant" about this stuff.

Also kudos to Ignorant upthread for giving the example of the steaming tea cup and the luke warm 50 gallon drum full of water.

Speaking of reductionism, I was wondering if it was possible to start with a hypothetical planet, say one that is covered entirely by water (no land masses, no ice caps) and rotates without any tilts at 24 hours per revolution and has a simple circular orbit around the sun. What would climate on such a planet look like? How would it change as we vary CO2 content in its atmosphere?


Everytime I read about, especially, neocons, touting the next ice age, and we don't have to worry about global warming, climate change, CO2, ad nauseum, I wonder if they really get it about Peak Oil/Peak Uranium/Peak everything. If they jubuliantly celebrate others being wrong about CC, they obviously do not think about their cold butts stuck in cold caves, without any heat source to warm our overshot population. Maybe someone should let them know, you know, like starting a great website to spread the news ????

Of course, the next target for ultra conservative right wing nuts (ultracons ?) will be that the ice age is a myth as well.

It's officially a Depression. I got laid off yesterday.

Now I can finally start working on my non-profit project of fundraising for the local food bank. I also have a half ironman and Escape from Alcatraz to prepare for, and my golf game is in the trash.

I was smart enough to save %20 of my pay each month and unemployment pays 1800 a month so this is a welcome respite. However, if it gets really bad, all my cash money is protected in IRAs. And since the foreclosure across the street is price to dump, it's not looking good for my mortgage holder should I need to BK.

Supposed to get into the 70s this weekend.

My sympathies. And good for you for saving 20% of your pay each month while things were going well... HUGE kudos to you. But, with the job loss, unfortunately, you aren't alone... See my post below.

From reading your comments, I'm not sure if I should say I'm sorry or not.
But, good luck none the less.

Remember, keep your swing simple, so that any changes you make are isolated and predictable.

EDIT: I was just trying to keep it lighthearted, I truly am sorry. Best of luck to you.


Looks like you a little more prepared than most, but the news is still a bummer.

Take care and good-luck.

Well now I dont feel so bad! I got fired on Monday for seeking employment elsewhere. Yea I saw it coming.

I didnt make enough money to save any of my paychecks. Im relieved to have rent covered for this month. I may not win my unemployment case so Im selling some of my prized possessions. My iPod Touch: sold, but good riddance. My guitar and amp: not yet sold, may take it to the local MusicGoRound to see what I can get out of it. Not much Im sure. Gotta go make my car payment today. 96 Geo Metro, cant complain since it almost pays for itself.

Supposed to snow all weekend. Lame.

Good Luck to both of you.

Echoes of the Grapes of Wrath. A double dose of good-luck to you spudw. May you hold on to your guitar (useful for busking) and land on your feet.

Keep plugging.

Sorry to learn of the change in your employment. I got wiped out by the Recession of '75 and never really recovered. I moved back to the home place and didn't find professional employment until '84, a position that went away after the Challenger Accident in '86. That was my last full time employment, with only a bit of part time contract work since. The moral to my story is that it's easy to kickback and let things slide, especially if you have a free roof over your head.

If your previous job might return as the economic mess subsides, you might only be out for a short while. If it looks like the job is gone for good, then I suggest that you may already have a new "situation". Looking for a job is a job in itself and you will likely be better off if you start your job search immediately. It's likely that you will not find similar work, so you must adjust your sights to accept whatever you can do that meets your needs. During my job search, I found that there were usually 20 or 30 other applicants for the few professional jobs I thought I was qualified for. It's beginning to look like finding work in this "recession" will be even tougher than which I experienced, so don't get caught thinking you will just find another situation in which you can use your previous skills (and education!).

Good luck to you!

E. Swanson

You really think the economic mess will subside? My advise: don't count on it.

Well the morning meeting I went to started off with "Let me assure you nobody is getting laid off." Then we were told the 3 week shutdown we were on last quarter wasn't enough and there will be a 4 week shutdown this quarter, "And they will continue until the economy improves."

I guess I'll get an unemployment check for the first time in my life. Yippee.

Good luck to those that have lost jobs, and those that will.

"The shutdowns will continue until the economy improves" - that sounds quite a lot like the old joke: "The beatings will continue until morale improves"

Most people would much rather have time off without pay, or even a pay cut, than to lose their job completely. It can even be enjoyable if you haven't been pushing your budget to the limit. A while ago my company gave us a 10% pay cut along with 10% TOWP, and the employees responded very positively. Of course a 33% pay cut (4 weeks off out of 12) would stress the budget a little more...


So sorry to hear that. I lost mine three weeks ago. It's a tough time to be looking, that's for sure. I can survive on the unemployment for a while, but the long term is going to be "interesting".

Just try to cut money from your budget when you can, look for activities that don't cost much (I've been walking the dog a lot). Good luck.

Change is a good thing. Do not be so sure your IRA money is safe. What plans have you made that are of a more serious nature, other than improving your golf game? Rumor has it the FED is looking to bring the IRA program "under its wing".

Simplify and Power down.

How's the new motor home doing you now?


Really, you guys seem so smart rehashing old PO topics. I must say I fell for it for a while. Now I'm just as happy as a pig in slop that I bought my new motorhome with a big Cat deisel. The family loves it and I can easily afford to operate it.

It's being prepped for a trip. Diesel is under two bucks again and it's still cheaper than air travel, and probably uses less fuel when you add in my daughter's wheelchair.

One correction though. It's not my motorhome, I just insure it. It's the bank's motorhome. As the old addage goes, it you owe the bank a million dollars, you're in trouble. If you owe them a billion dollars, they're in trouble. California law allows me to keep my IRAs and 401k no matter what, and I only have about two years worth of cash outside of those accounts. I would argue that this layoff will allow me to substantially downsize my liabilities with a minimum impact on my assets.

I'll assume for a while that this is just a slowdown. I've been working 30 years, have survived too many layoffs to mention, seen good times and bad, made and lost and made money. If I'm wrong, I'll give back all the stuff and move on. It's just stuff. I transitioned just fine from a Suburban to a Prius, and will equally transition to a bicycle if necessary. Like I said above, my daughter is in a wheelchair and in ten years hasn't walked or talked. My priorities are clear and stuff is no longer even on the list. I'll even wash and wax the motorhome on the day the show up to take it back.

So, thank all of you for the kind words. I've been a member for a year and a half or so, and while I don't agree with all the positions presented, I am very clear about three things. Things will get very bad. I will keep reading and posting on my favorite website TOD, and I will happily survive no matter what.

I refuse to be defined by my balance sheet, and what the rest of the world thinks about me is quite frankly none of my business.

Hang in there fellow travelers. Enjoy the ride.

Sorry to hear about your daughter and the loss of job. Good luck, stay positive and stay creative.



I refuse to be defined by my balance sheet, and what the rest of the world thinks about me is quite frankly none of my business.

Those two realizations are both important prerequisites to happiness.

Best of luck

Depression just hit here too.
My wife was just told her job is ending --they're closing the place down.

We need that two-earner income. Plus the medical coverage.
We're most worried about the medical coverage.
One health crisis and you're bankrupt without coverage.
(Even with coverage, under today's 30-40% co-pay rates you're still bankrupt.)

Young people don't seem to worry. They think to themselves, I'm young and immortal. One piece of advice: don't be so cocky. A medical catastrophe can strike out of nowhere. Read "The Black Swan" and think health as well as financial.

This so-called "recession" is spreading too fast and too big to ignore.
GWB is passing the torch after having torched the place.
All hail Nero.

part of the problem of living without a "job" is convincing yourself that you can do it. there is always that gotta-get-up-and-go-to-work wolf lurking at the door. part of the highly overrated protestant work ethic. survival si, slavery no.

a good portion of the income i now depend upon was generated "in the '90's" when oil was below $10 - a period of unemployment.

Total 2008 job loss: 2.6 million

Another sobering government labor report released Friday showed the economy lost 524,000 jobs in December, bringing 2008's total job loss to just below 2.6 million.

Last year's steep drop in employment marked the highest yearly job-loss total since 1945, the year in which World War II ended.

The vast majority - 1.9 million - of last year's job losses came in the final four months of 2008, after the credit crisis began in September. November's job loss was revised up to 584,000 from 533,000, and October was revised up by 103,000 to 423,000.

Professional and business services, a category seen by some economists as a proxy for overall economic activity, had a 113,000-job drop in employment. And financial services jobs fell by 14,000.

The economy has lost more than 2.5 million jobs in the current recession, which began in December 2007, far surpassing the previous two recessions, and just below the 2.7 million jobs lost in the 1981-1982 recession, which had the deepest unemployment in the 70-year history of the report.

And there goes the 3 million jobs O was going to create... It is just treading water at this point.

Great Depression jobs parallel may not be far flung

NEW YORK (Reuters) - When economists tell us the current U.S. slump could never turn into another Great Depression, they all point to one thing: one of four Americans was out of work in the 1930s.

But since the definition of joblessness has changed over the years, this expert assessment might be too rosy.

The huge difference between the 1930s and now is the size of the government and monopoly sectors (including pseudo monopolies). The current path leads to a glorified 70s Soviet Union economy, with government workers comprising a record % of the workforce.

At least it's a once in a lifetime event... Oh, and wait for the 'revised' numbers.

Uh, my lifetime includes three of those years.

The 1945 number must in some way be War related. Some sort of end-of-the war disclocation, or final aggregate non-farm payroll loss coming at the end of the war?

Obviously the most severe number is the 1982 annual loss, which occurred when the working population of the US was much smaller. (US population in 1982 was 230 million vs over 300 million in 2008)

Question: why do educated economists produce data that's on an absolute rather than a relative basis like this, thus rendering the information near-useless?


In 1945 the US pop was about 140 MM. 8 MM veterans returned from the war.

The ship yards closed. Tanks, guns and ammunition production ceased. Aircraft factories closed and contracts by the thousands were cancelled.

The big difference now is that > 50% of the population is working, a smaller proportion are children and students, and a much larger proportion are retired. This doesn't leave much room for too many unemployed. Very few households would have no employed adults. Most retired have some income and are not 100% depending upon family.

In the 1930's, most households had one wage earner, so 25% unemployment meant one in four households without an income. A very different situation. Plus the large number of farm families not earning a living but not "unemployed".

Even now in US new motor vehicles still selling at rate of 10million per year( one in ten households); doesn't sound like a depression(yet), but keep talking you may still be able to talk us into one in a few years.

Neil1947 I made exactly the same points myself in a previous post by Gail.

To reach levels equivalent in suffering we would need to see closer to 50% unemployment then 25%.

In my opinion or economy is back to about 2003 and headed for 1990. After we pass that point we enter the
next depression. That means for example for housing losing 20 years or appreciation for homes.


We can argue if inflation adjustments need to be made but the median price in 1990 was 80-100k depending on how
you roll back inflation. In the US the median price is now 185k.


So we need to see a 50-60% drop in home prices from the current levels before we even enter into depression
levels. Home prices are still about 15-30% overpriced or more given the 3X income rule with a median household
income about 50k


This give 150K as the median price. So we need to fall 20% just to get back to normal.

Thus from where we should be i.e 150K I'm suggesting once we hit normal we will fall another 50k or another 33%.

During the Great Depression housing prices generally fell 50%. This implies of course that we will see a significant
drop in Median house hold incomes from 2 incomes to one or from 50K median to 25K and 3X 25K is 75K for a house.

Now to reach the real Great Depression we would need to actually see and additional 25% drop or and overall decline of
75% in employment.

This final 25% drop is exactly what you need to drop the final housing prices down another 25-50% or down to about 50k
for the median house price and around 12-15k for the median salary. Basically this perfectly matches having the majority
of the population with a single wage earner per house hold making minimum wage.

I'd suggest if you consider this and what we have in the history about the real Great Depression then my assertions and
the real problem of the first Great Depression match up very well.

Detriots median house prices is right now is 80K.



And median income is 28K.

This matches perfectly with my assertions.

For Detroit then I'm asserting that housing prices will still drop 50% and income 50%.

So no Detroit is not yet in a depression but its coming.


I follow what you are saying, and I agree that there is still much unwinding to be done, but the trend, as you point out, looks like a snake eating it's own tail.

As wages drop, so must the house prices to stay at that 3x income point, (although I have seen 2.5x suggested). At some point a bottom must be reached where "real" value stops the drop.

Not being a bean counter, I have a concept of "real" value for myself, but I don't have the foggiest of how to quantify it.

IOW, what halts the drop?

Any ideas?

IOW, what halts the drop?

In many places it stops at zero are actually the value is basically negative depending on how usable the land is once its cleared and the work needed to clear it. I'd suspect that the salvage value of the homes after a while would be pretty low. Pine does not make good firewood.

Cities in the Midwest routinely have problems with the costs of condemning and destroying homes.

Obviously it depends on the area but that dependency is one of the basic reasons I propose we will create enclaves.

As far as wages go you would have to adjust a bit for the US but generally your talking third world wages of a few dollars a day.
Enough to basically buy food for the day. I'd guess for the US your talking about 1-2 dollar and hour or so.
So ten to twenty dollars a day would eventually become common. I'd guess at least 15% and that could be low would eventually be making this. Thats using todays dollars and todays food prices. This would feed 2-4 people.

Assuming your not living in a squatter shack I'd guess for rent would be about 1 weeks wage.
If you look at our current slums rents in slums generally equal about 1-2 weeks wages on average.
So rents for crap slum dwelling would be about 50-100 a month. At 10x rent your talking 500 to 1000 for the space.


This would be for a efficiency for a family of four to six. So a three bedroom has three families or so
so your talking rents of say about 75*3 or 225 or say 2000-3000 for a SFH converted to the poorest slum living.
Some will of course be zero. I'd guess higher up the average could go to like 20K for the standard poor housing.
Very little above that and 20k up your getting into my concept of enclaves and out of the slums.

If you check real estate for your standard inner city rundown SFH thats about right.

I think minimum wage will break down and plenty of people will work for cash at these wages.

This is really just standard 3rd world living but I've upped it a bit assuming that the US is less populated and
has more resources then your typical 3thrd world country.

I just check Detroit on truila and non foreclosure 3/1 are going for 10k so this fits well with my suggestion that
they still have to fall by 50% to be in a real depression. At 5k for homes sold without duress your now getting
down to depression level. Still a bit overpriced even at that but its getting there. To some extent as you see
prices would stop falling as more and more people moved in and shared the rent.

But compared to todays prices its effectively zero vs current prices. It will be a lot of money in the future.
Understand that only homes that have some external value i.e they are close to jobs or something have any value.
And this can change in a heart beat if a company shut down.

Sorry to reply but found a good link.


This is a 5 bedroom for 10,900. So say you get 500 a month rent out of it then it should be 5,000.

But you can see that the bottom of the curve for Detroit is starting to get down there.

It seems that you can't find a non foreclosure for less than 10k listed but I suspect by 2010 plenty of 2k-5k homes
will be listed. Once 30% or so are at that level then your in my slum living from there its a matter of the number of occupants.
Prices don't drop you just put more people into the house.


For once, I think you're out of your mind. You are basically saying 1932 wasn't a depression because we didn't go back to 1865 or some silly notion. Prices have to fall something like 75% from the peak to define a depression? That's nonsense. A depression is not defined by housing sales, but by GDP. It doesn't matter where we were in 1990, it matters where we are in relation to where we were at the peak because that backward movement is loss of GDP, jobs, credit, etc.

75% unemployment? Dude, get out of your books and numbers and deal with a little real world! I grew up a bit of an egghead, but a poor egghead. I have REAL PRACTICAL sense of what poor means. In 1932, one income was **enough** to raise a family. Now, two are needed for most people. Losing half that income will hurt almost the same. The house will be gone, the cars, the extras, etc. Remember, people without a steady job could get SOME work. Also, extended families were almost certainly more numerous, so many households probably had more than one wage earner, or there were just fewer nuclear families to be devastated by job loss. Children could work. Not anymore. And the savings rate was much, much higher than today and the debt load much, much lower.

You also need to keep in mind many people did not directly get thrown into the poor house. A majority lived relatively well during the great depression. So, if a two-income family goes to one, how is that any different?

Finally, it is nothing more than ivory tower silliness to say we are not in a depression until it's over. Just as the current recession started a year ago, not in November when it was declared. Is one not in a hurricane because only the outer bands have yet hit? You're not "in" it unless the eye passes over you?

That is, if we hit the point of depression, then the depression started a year ago, not six months from now. We'll either have a depression or not, and arguing we aren't in one is nonsense because *you don't yet know whether we are in a recession or a depression.*


Look during the depression a lot of people starved to death in the US its well documented.
People where living in shacks etc. Think the worst slum in India.

Detroit still has a ways to go to hit that level and so does the US.

Given that that during the time period for the Great Depression most Women did not work.
i.e the able bodied work force was half what we have today then there is nothing wrong with my math.

Obviously Detroit is fast approaching the same unemployment levels precentage wise as where seen
during the great depression but just as obvious they are not yet starving to death and we are not
sending in food aid.

I'd suggest you read up on the Great Depression we are not even close yet.

Also given that families where larger then on needs even more unemployment now to match the dependent to worker ratio
that happened during the Great Depression.

Look during the depression a lot of people starved to death in the US its well documented.

It is? But the death rate during the Great Depression did not increase. It decreased, in fact. (Though the effects of the depression were seen in a lower birth rate.)

In addition to what Leanan said, some things, and this is perhaps the best way to put it, aren't measured in numbers. And, memmel, nothing you said above negates any of my points. I think I counterpointed some of your points fairly well.

Also given that families where larger then on needs even more unemployment now to match the dependent to worker ratio that happened during the Great Depression.

Not unless you have stats on the number of wage earners per given sizes of households. My point was that any given household is more vulnerable now. Even more so when you consider all the basic skills people had then that would have mitigated a lot of misery that might be felt this time because nobody knows how to do anything with their own two hands.

just as obvious they are not yet starving to death and we are not
sending in food aid.

Oh, don't be silly, man! You are comparing the first year of the (possibly) current depression with results for the ENTIRE Great Depression. We have nine more years to go! This is a common error I see all too often. This is sloppy, memmel, especially for you. If this issue interests you, perhaps you'd like to follow-up with some stats from the first year of the Great Depression? Maybe then your arguments would hold up.

This issue isn't important to me, however. It's an academic determination, so I will not belabor the point. I did have an interesting thought.

Consistent with my point above, defining a depression in terms of GDP seems arbitrary to me. In idealistic conditions, one could imagine a society transforming to a more pastoral, yet not non-technical, society and the GDP as currently measured falling but quality of life rising. Would that be a depression? No. Not in any real sense. It would be only in the whacked out minds of economists. So, perhaps the percentage of poor is a better measure. I.e., how many people are living a depression? What would the numbers be? One definition I've seen is four quarters of contraction. Another, I believe, is either 10 or 20% reduction in GDP. By the first measure, we never came out of the recession of 2001 but for a brief period and have been in a depression for quite a bit. At least, as measured by Shadow Gov't Stats.

Me? I lived a depression for most of my years from 6 to 18, along with the many millions of others living well below the poverty line. Academic definitions don't carry much impact for me.


I don't have the stats off hand for wage earners per household during the Depression but we certainly have plenty of documentation on women entering the work force after WWII and during the war for that matter. Therefor its sensible that they where not in the workforce before.

Leanan found this.


I'd also suggest that during the Depression a lot of deaths went uncounted thus I question the official reports.
In some cases not out of malice people had no money so they simply buried the bodies.

Ccpo it sound to me like your taking what I'm saying personally. Please don't I grew up as a young child in Holly Springs Mississippi.


My mom was a social worker there. And although I we where ok we were by no means wealthy. I've also lived in Vietnam and China.

And although I hate bringing it up I've been through experiences personally that took me to the dark side of hell. My understanding of poverty is not academic and not just seeing it. Few Americans have lived through what I have thank god and I know full well what in store for a lot of people given what I'm saying. I know exactly where the bottom is I lived it. I understand from your post that you had a hard life but I've been there too and I know for a fact that things can get a lot worse then most people imagine.

My point is you have to trust me that I'm not talking about poverty from a Academic view point I understand it from personal experience.

Now back to what 75% unemployment means from peak well again most households have two wage earners these days so the first 50% drop takes you to what we call poverty the next 25% loss takes 25% of the population to abject poverty and facing starvation.
This matches well with the household wealth during the 1930's. Right now we don't have extensive abject poverty and Hoovervilles.
And yes your probably correct in that I'm talking about the latter stages of the Depression.

In any case since this is probably going to be the Greatest Depression its fairly easy to work the numbers.
First we have to deflate the bubble thats been building since the 1980's. This means all the economic indicators will roll back to the values they had in the 1990's house prices, car sales, wages etc. This deflation in durable goods is simply the end of our massive credit bubble not the actual depression. I'd call it a long recession it will take time to rollback our credit bubble.
I'd say at least 2-3 years. And understand that at the price level this is deflation in durable goods or anything purchased with credit it says nothing about needed commodities where are priced depending on consumption or population. Food and energy in particular have no reason to follow the trend in deflation. Right now they are but this could literally reverse at any time.

So 2-3 years from now we are back to level with the credit bubble deflated and the various economic indicators back to sane levels with the exception of a unthinkable amount of debt now on the books of the US government.

Only at this point do we begin to enter the real Depression so I'm basically saying that the start of the real depression not the collapse of the credit bubble only begins once we hit 10-20% unemployment. Things are different this time around in the sense that the speculative bubble is much much larger then what existed during the 1920's. Its been blown for decades unwinding it will take a lot longer then most people realize and the real bottom is a lot lower.

If you don't mind I'll use housing prices as a proxy for the credit bubble you could use M3 but given that the US is 70% a consumer economy the effects of the credit bubble are readily seen in rising home prices and also this chart includes inflation.


Its fairly obvious looking at this and just about any other economic indicator that growth since the late 1990's was purely driven by a credit bubble with little or no intrinsic real economic growth.

This bubble has to pop before we even get to the real deflationary bubble.
I'd argue that the 1920's leading up to the first Great Depression are a better fit to the period of 1975-1990.
Thats when the economy was growing in a manner similar to how it grew before the last Great Depression.
One could readily argue that we should have started or normal depression back in 1987 with that stock market crash.


If we had followed a conservative fiscal policy then then we should have entered a real depression at that point.
We literally printed our way out of it.

So a better description of whats happening right now is deflationary credit bubble collapse with the majority of the
deflation taking place in the credit markets and in particular long term credit. Since the driving force for sustaining
the inflation in the first place was a decades long housing bubble most of the deflationary pressure will be felt in housing
and related industries. The entire FIRE family of businesses are in deep trouble so its not just housing per se but the sister
financial bubble and insurance bubbles. By default this will also take out related industries such as the Auto industry and
large swaths of the pyramid of businesses that directly and indirectly driven buy the housing bubble.

But this is not our Depression its simply the end of complete stupidity.

Sure the standard of living will fall dramatically I'd suggest that by the time the bubble is popped that people will be living similar to the 1970's standard of living/purchasing power. For most eating out in a restaurant would be a real treat new clothes a welcome Christmas present etc. I was a child then so I can go back and look at my own life and contrast it to todays.

Only once the long term credit bubble is deflated does the real depression start.

To understand why you have to recognize that the US government can assume almost all the long term debt it may allow some to default but it can monetize a large amount of the outstanding long term debt. Sure its debt deflation but its not "real".
The Government can and will buy up large amounts of defaulted debt at "face" value to ensure that we don't actually collapse.

Only when there is no-longer any long term bad debt to purchase do we enter the real depression. At this point the US Government can do nothing to stop the continued slide. Japan is a very good example for the first half of what we are going through not the Great Depression. Given the lack of savings and other issues I expect that our descent will be much faster than Japans but its a far more realistic model for our current condition than 1929.

Bottom line is we have a long long way to fall from our current position it will takes several years to even enter our real depression after the government has monetized the large amount of existing debt and allowed some to default. Once thats gone
we finally enter real deflation without a massive debt bubble. And the reason its real is that the government can do nothing
about it since we finally don't have any debt to assume that has any real economic effect. I'm sure we will continue to see
a flood of foreclosures and bad mortgage debt but at this point no one is buying a house anyway so it does not matter if the
debt defaults or is underwritten. Right now it does matter i.e without government intervention we would have collapsed.
Our real Depression starts when we collapse even with government intervention.

I'd also suggest that during the Depression a lot of deaths went uncounted thus I question the official reports.

Perhaps so. Unrecorded is probably more accurate, though.

Ccpo it sound to me like your taking what I'm saying personally.

Not at all. I try to take comments as intended. I typically am offended when there is an intent to offend - or when the comments are inherently offensive (from my perspective).

And yes your probably correct in that I'm talking about the latter stages of the Depression.


Only at this point do we begin to enter the real Depression so I'm basically saying that the start of the real depression not the collapse of the credit bubble only begins once we hit 10-20% unemployment.

First, I'm sure you realize you are preaching to the choir wrt where we are headed, so I've no argument there. Our difference of opinion is largely one of semantics. Your definitions are superflous: you're either in a depression or not. What it appears to be along the slide down is irrelevant in the end.

Since I am 98% sure a a full-on depression is what we are entering, I see no point in calling the early stages a recession only to redefine it later as depression. As an academic, I would, of course, speak differently. That's the benefit of not being stupid, but not being an academic: I don't have to pretend a thing is two different things at the same time.


Well I'll cover your last point about Recession vs Depression. Its not just Academic understanding where we are on the curve is in my opinion important for making decisions about your future. Few of us are wealthy enough to effectively retire and raise our own food on a paid off farm larger or small. Most of us have a limited amount of money. Personally I have enough to buy a decent trailer and some land in most parts of the US not enough for a house. In my opinion a trailer is not a great purchase so I'm not making the move because I think we have a ways to go before this thing is over. If I thought we where further along I'd make different decisions.

Next its important to understand that right now we are in a deep recession not a depression because economic policy could pull us out i.e its a monetary problem that can eventually be solved by printing money. This create a moral hazard and all kinds of other problems that would eventually lead to a collapse of the currency. The earliest the currency collapse could happen is 2015 but who knows ?
We should have never had this bubble after 2000 and it went for almost 10 years. I could readily see more financial games pushing the final collapse into a real depression out to 2020-2025 ignoring peak oil. And we could well have one last revival of the economy before we enter the "real" depression.

Its not academic and its not just definitions. Only once the government policies put in place since the last depression finally fail to work are we in a new one and they could and probably will work for a little while.

And next I think its very important because the main reason for the failure of attempts to avoid having this recession turn into the depression will be peak oil. If somehow oil supplies remain adequate and prices low then despite declining production we could avoid a Depression for some time like I said earlier.

The most probable outcome is that the economy will begin to rebound second half of 2009 as housing prices finally fall in some ares houses will start selling again the layoffs will continue but companies will report profits etc etc. So no we are right now in a Recession and the definition is important. The depression comes either because of peak oil or because Government policies no longer work. We simply are not there yet.

The most probable outcome is that the economy will begin to rebound second half of 2009 as housing prices finally fall in some ares houses will start selling again the layoffs will continue but companies will report profits etc etc.

This is the source of our problem here, well, the second source, perspective. I am willing to say here and now there is no way on god's green earth there is a recovery in '09. A short-term bounce, maybe, but not a rebound.

The rest of that is unintelligible. You've really got to use more punctuation. I think you were claiming houses will start selling? They are selling. They always will be, but not enough to offset prices falling further. Also, in '10 and '11 there are a LOT more resets coming. This will likely be the year commercial real estate collapses.

People are going to keep tight hold of their purses, so there won't be much buying happening, relatively.

As for definitions, since there isn't even agreement on what constitutes the definition of depression, good luck convincing everyone you've got THE definition. But, really, our problem is you think this might only be a recession. Fat chance. Thus, to my way of thinking there is almost no chance this isn't going to be a depression, so fiddling around with "recession" is delusional. Keep in mind, one definition of depression is 4 quarters of falling GDP. We are already there. After all, four years should qualify! (See Shadow Gov't Stats.) Even if you toss out SGS's numbers (which are just the gov't's former method of calculation), we have been falling for a year. You can claim there was a bump 2Q '08, but that was false - just stimulus checks.

As for what to do, because I plan with ACC, PO and economic collapse in mind at all times, whether we are in recession or a depression couldn't possibly be less relevant.


If large numbers of people had died of starvation during the Depression, it would have shown up in the census (barring massive conspiracy). It didn't.

The truth is much harsher, of course.

Government Shadow Statistics.

What was the mechanism used in the 30s-50s? Seems like even the U6 numbers are pretty bad.

If you add the percentage of people on full welfare to these numbers, I wonder what you get?

And what about the number of people who are working part-time or are underemployed? How do they figure into the official unemployment figures?

According to this from Calculated Risk, the number of involuntary part-time workers has increased by 3.4 million over the past year, to a total of 8.0 million:


"And what about the number of people who are working part-time or are underemployed?" DownSouth

My wife works for Macy's as a part-time retail manager. They don't pay benefits but the hourly compensation is pretty strong. Macy's announced today that they are closing 11 sub-par stores in the first Q of 09'. With the current downsizing she looks more secure than her full-time competition but we are bracing for the worst in any case.

Economists getting gloomier about outlook
Rising unemployment, consumer spending drop spell deeper trouble ahead


For those who have lost or are in danger of losing their jobs: Best wishes for a soft landing.


Time to be thinking about alternative lifestyles:


But maybe with the addition of birth control?

I forget where I read this during the past week, don't know if it's true, but according to one article most people who leave forclosed homes are moving in with either family or friends. They are not buying cheaper homes nor are they renting. The way I figure, this is going to lead to a BIG surplus of empty dwelling structures.

The way I figure, this is going to lead to a BIG surplus of empty dwelling structures

I'm sure they will be stripped to the bone by vandals in short order. Of the newer structures there will be no evidence of them within a decade other than the foundations considering the shoddy construction and materials used on these monstrosities.

Hey... At least it's not like building City Hall on an Overpass...

You can speed and pay the ticket in the same place

Ah, home. :) Grew up a bit north of Fall River, in Foxboro, and had a good time visiting family up there just before Christmas.

Now every time I head up there, I wonder how many more 500+ mile car trips I'll be able to take.

Hey raober, small world, I grew up in Plainville.

Don in Maine

There no glut of foreclosed properties here, but I'm sure it's coming. I'll be ready with crowbar and truck. Gonna get granite counter tops, new cabinets, new bathroom, furnace the works. Gonna be better than a million dollar gift card to home depot (humor only)

Sure will. The square feet per person will be shrinking substantially in the future. Friends and relatives moving in is just the first wave. Next will be people taking in strangers as lodgers. People will remodel to create accessory apartments in cellars, attics, and garages, or to turn single family residences into duplexes, wherever this is feasible and zoning rules allow (and many jurisdictions will have to relax their rules sooner or later).

If 2007/8 = 1929/30, then 2008/9 = 1930/31, 2009/10 = 1931/32, 2010/11 = 1932/33.

That Great Depression 25% unemployment was in 1933. If you believe the Shadowstats series, then we are on track to exceed that 25% by 2010/11.

I don't know about you, but after I've lost my job, I wont care about these numbers anymore.

I noticed in his speech the other day that O started to hedge by saying create or SAVE 3 million jobs. Maybe it's just semantics if at the end of the "day" there are 3 million more jobs that there would have been if nothgin was done..

In fact that seems to be the argument for all of this intervention crap - it would be worse if we did nothing. I wonder...the bad debt has to be defaulted and it will be sooner or later, but later is going to be more painful acoording to Denninger and others.

Hey - I just used "their" logic against "them" - force the level 3 off-balance sheet defaults now since it will be worse if you do nothing and wait.


The thing is, I think, that we won't be able to start heading in the right direction, unless and untill all toxic "assets" are disclosed.

Hundreds of billion, or more, have been spend to improve liquidity of the financial markets; losses probably mount in the tens of trillions, if not more.

In fact that seems to be the argument for all of this intervention crap - it would be worse if we did nothing.

I like even better the logic of "Everyone agrees that something has to be done." And this has been used as justification for doing some really not bright things. But, hey, we did "something."

Don't forget that the US economy needs to add, on average, 100,000 jobs per month just to stay even with (legal) immigration and people entering the workforce for the first time. That means that by losing 2.6 million jobs in the last year, we are really 3.8 million behind where we were a year ago.

The 'official' unemployment number is so bogus as to be worthless. It does not include people entering the workforce for the first time (college grads for example), people who were fired from their jobs, or people who have been out of work for more than six months. Also, if you made $100K a year at your last job and you take a 32 hour a week job at minimum wage to survive, you are 'fully' employed.

The company I work for has announced that 20% of us are getting the axe before the end of January. This is after continual layoffs for the past 18 months. They'd better hurry, because people are dropping like flies from stress related health problems. I know of five coworkers who have had heart attacks and one who had a stroke in the past year, along with a menagerie of various back, neck and mental health issues.

And talk about taking optimism to a new level:

"Stocks decline after mixed unemployment report"


(emphasis mine)

Mixed? Mixed with what... The housing price drop? Or maybe the spike in foreclosure? Or maybe the $2T+ government debt O is talking about for 2009...?

I don't see how over a 500K drop in jobs in ONE MONTH is mixed. It's like saying the Lions (who ended 0-16) had a 'mixed' year.

As one CNN wag put it: "Detroit is hopeless. And the Lions are pretty bad, too."


It's time to clean up Drumbeat and clamp down on all the doom and gloom posting before the thought police get you:


SEOUL, South Korea - Prosecutors sought a formal arrest warrant Friday for a mysterious South Korean blogger known as "Minerva," whose purported dire predictions about the global economy, including the collapse of Lehman Brothers, have caused a sensation in this country.



Hello Pragma,

Thxs for the info. As posted before: Nate & I are both 6 foot-five. When the time comes, We got first dibs on the longest bunks available in the KBR camps. I bet they have #119198 already reserved to be forcibly tattoed on me. :(

I hope you aren't uncomfortable folding up your knees in case the bunks are too short.


Procrustes (Προκρούστης) or "the one who hammers out", also known as Damastes (Δαμαστής) "subduer" and Polypaemon Πολυπαίμων "harming much"[dubious – discuss], is a figure from Greek mythology. He was a son of Poseidon and a bandit from Attica, with a stronghold in the hills outside Eleusis. There, he had an iron bed into which he invited every passerby to lie down. If the guest proved too tall, he would amputate the excess length; victims who were too short were stretched on the rack until they were long enough. Nobody ever fit in the bed because it was secretly adjustable: Procrustes would stretch or shrink it upon sizing his victims from afar. Procrustes continued his reign of terror until he was captured by Theseus, who "fitted" Procrustes to his own bed and cut off his head and feet. Killing Procrustes was the last adventure of Theseus on his journey from Troezen to Athens.


Hello Ptoemmes,

LOL! Thxs for the warning, but I would much prefer that we all start counting down our digits to delay the high rates of extinction [see prior posts on digitizing for Optimal Overshoot Decline].

At the very least, it could make for an interesting PGA golfing handicap. IMO, it is much safer for Tiger@Ten to have the maximum grip possible on the tractor's steering wheel & controls while Master-fully plowing the White House lawn and Augusta National. :)

What is the better postPeak marketing brand name match for max. Peak Outreach effect?

1. Tiger & CAT [Caterpillar tractors]
2. Tiger on the back of a Deere [John Deere tractors]

Picture Obama really moving us to dramatic Peak Outreach & full-on Paradigm Shift change [extremely doubtful,IMO]. But just imagine the powerful re-election symbolism of his & untold millions of upraised American right-hands [minus the pinky finger] while the huge throngs endlessly chanted, "Four more years!".

For the speedy touch-typists on TOD: 'hunt & peck' postPeak typing will still work at a vastly reduced digit count.

I gotta ask what is your obsession with cutting of everyones pinky finger? It's kind of creepy.

Hello Theantidoomer,

Not an obsession on my part, but it seems to be a good way to directly tie our exosomatic tool use to declining habitat and rising extinction rates; a full-costing of the environment to our continued MPP. Recall that currently economics does not account for ecosystem externalities.

In short: just a way to make every raindrop truly realize their contribution to the flood.

Losing a finger or two to save lots of species is much better than having all ten fingers, but nothing to hold.

As posted before: IMO, I believe the average person will never take the time to understand the arcana of PO & CC, but they can readily understand no more elephants, tigers, gorillas, sequoia, salmon, mountain lions, horses, poodles, bats, tomatoes, sahauro, etc.

ptoemmes - My first wife still has that bed. She recently divorced her third husband and she is already looking for her next...guest.


I bet they have #119198 already reserved to be forcibly tattooed on me

I think they use bar codes now.

Actually they've moved on to surgically implanted RFID chips.

As #119198 would likely say, "RFID chips are probably much easier to get accustomed to..."

For newbies:

by Tadeusz Borowski, #119198

..However, those who loaded them into the gas weren't bad people. They were Jews whose families were also burned.

They weren’t bad people, they were simply accustomed...

I will need several stiff rums tonight to get that image out of my mind.

In Japan, they have an expression "It is the nail that sticks out that gets hammered".

Height need not be literal.

Something to be considered as things "progress".

This is such a strange story. If it weren't for the fact that the guy had a computer, I would wonder whether this was North or South Korea. I guess it reminds me more of mainland China..


As a result, beleaguered government officials have been seeking new ways to monitor the Internet, and now South Korea is about to become one of the first democracies in the world to impose rules on Internet users by law.

The Korea Communications Commission (KCC), the country’s broadcasting and telecommunications regulator, is looking to rewrite media law to have Internet sites face the same restrictions as news organizations, making them subject to libel suits and such.

The KCC also moved to limit online anonymity, requiring Internet users to register their real names or verifiable nicknames to post comments on sites.

This is such a strange story. If it weren't for the fact that the guy had a computer, I would wonder whether this was North or South Korea.


Perhaps they are not polar opposites as TPTB would have us believe.

What is even stranger is that he was right. I could almost buy the theory that he was yelling "fire" in a crowded theatre, except that the theatre was on fire.

If we are to start jailing people, how about:

"The American economy is strong"

John McCain:
"The fundamentals of the American economy are strong"

Alan Greenspan:
"There is no housing bubble and if there is, it is a mild one with a soft landing"

Jim Cramer:
"No. No. No. Bear Stearns is fine"

and let's make that a North Korean jail. :-)

I would comment, but I live in Korea.



lol you bugger!

(Assuming yer 'mercun, that is not a slur, just to be clear)


No offense, being American. I was hoping to a hit a funny bone, but by law us resident aliens can't engage in political activities here.



My favorite mixer is vodka. After 2 or 3 of these, the numbers invariably look 'mixed.'


It's interesting that the U.S. government is now going to be Big Brother through default and everyone's going along with it in silent resignation.

There was a Science Fiction 3-D Movie back in the Sixties with a spooky comparison called:

The Bubble

Synopsis: This sci-fi outing was originally released in 3-Dimensional "Spacevision" and tells the tale of a young couple who go for a fun day of flying and end up forced into a gigantic plastic bubble during a sudden violent storm. Inside the inverted bowl is an apparently empty ghost town, that on further inspection proves to be filled with old movie props and strange "residents" who seem to suffer from a bizarre form of echolalia.

Spoiler Alert! You never see the strange Alien force but all of the inhabitants of the town passively accept whatever role ALF assigns them. The hero, Michael Cole, discovers the source of the problem. In an inconspicuous part of town everyone lines up each night to be plugged into the feeding machine. In the dramatic highlight Michael takes an axe and destroys the machine thus liberating the townspeople. Most of the townspeople don't accept his help with gratitude however:

You've ruined everything...who'll feed us now? is the general refrain.

Perhaps we should all cue up (no pushing or shoving please) at 1600 Pennsylvania Ave. for our green job and get fed.


It's interesting that the U.S. government is now going to be Big Brother through default and everyone's going along with it in silent resignation.

That's because people are scared shitless. That's how it works.

RE; Vermont Yankee

..Spokesman Rob Williams says the leak is unrelated to one in a valve gasket that was reported Wednesday.


Well that's a relief!


Consiering the amount of "mildly radioactive" water and gas that is released from plants on a regular basis, I'm surprised this even got a mention.

The Smart Car


Yesterday I commuted to downtown San Diego with a friend who had recently purchased a Smart Car. I got a chance to see and feel for myself what a small for two vehicle feels like.

It handled nicely, didn't feel at a disadvantage in heavy traffic, parking was a breeze, but you have to remember to park on the outside edge of the parking space or people looking for a space will inevitably pull into the space before they see that your Smart car had already occupied said space. He had the Cabriolet model and it turned heads everywhere we went.

At a sticker price of under $16,000 with upgrades and 40/45 MPG this looks like the car I would buy if I was in the market which I'm not. My current 6 cyl SUV with 18/22 MPG has a Blue Book value that is falling faster than a stone so I think I'm stuck for the foreseeable future. I used to trade my car every 3 years now I've been driving my current one for 6 and I can see holding it for at least another 5.

Perhaps by then we'll have an efficient mass transit system and I can keep my clunker in reserve for those occasional road-trips.


I live in London and have seen some of these Smart cars and I can say that -even with "European" eyes- they are tiny!

I'm not sure you need to go so small to get 40/45 -have a look at the BMW 1 Series Efficient Dynamics 1xx diesels. No doubt small is great for parking though.


Have you ever actually sat in a Smart car?

Actually they are very roomy ... I have had more than one Smart (I currently have a Smart Roadster, better performance and even higher mpg) and I'm sure for a long while my neighbour thought I was mad. He always drove a Range Rover SUV, but while on holiday he borrowed a Smart, now both he and his wife have one each.

My experience is that Americans colleagues could always think up at least ten reasons a minute why they shouldn't drive a Smart ... IMO big isn't always better.

I read/saw that Toyota was coming out with a vehicle similar to a smart cat in a year or two.

Bought a diesel Smarttie 1.5 yrs ago and 75 mpg (imperial gallon) is still happening on hwy drives. We're 20 miles from downtown Vancouver where parking can be expensive. Finding free spots, fast small spots, or just sharing spots with other small street metered cars makes the cost factor impressive as well. Also, quite impressive in snow and starts easily for a diesel in cold weather.

People are always staring at us, and kids make fun of us, but it is all made worth while every time I fill up the 5 gal/22.5 litre tank.

On a side note. I heard from a Japanese friend that there is a premium on pollution/emission charges from the Japanese Gov't on diesels. Still not sure if that makes sense, as diesel engines can outlast gas pots anywhere from 2-1 to 4-1. She said that her father recently switched back to gas as he was finding diesel costs too much for the minimal driving he does.

I am beginning to suspect that owning a diesel is worth the extra costs if you drive roughly double or more than the average?

I borrowed the older slightly larger Smart while on holiday in Spain a few years ago and it was good. I drive sports cars usually so am used to small and light.

I remember hearing a lady at the Chicago motor show last show asking how on earth the Lotus she was looking at could do 150mph on a sub 2 litre engine... Her mindset -as is most Americans I suspect- so used to carting a 3ton+ blob of steel round that anything less than a 4 litre v8 is "underpowered"...


I was looking at Electric Bike motors last night at a Chinese MFR called 'Golden Motors'.. with their little 'GM' sticker on the product. Poetic Injustice!

They're wicked cheap! (DANGER! Don't do it!) Anyone know if they have a good product or not? I hear too many people say the BIONX motors and cust. support has been really disappointing.. but I'd like to find a really reliable Brushless Hubmotor. http://www.goldenmotor.com/

Here's the 'Instructables' tutorial where I heard about this company.. Solar Electric Trike.. and don't hate it because it's too stylish! It's better than I've got..

Give it snow tires and a Ski Up-front, and I could be Burl Ives! (Ala; Rudolph)


What about these?

We haven't tested them out personally, but will soon. We're buried under snow here for at least another month. If you can wait that long, I'll let you know what we think. If not, please tell me your impressions.

Best of luck to you!

Thanks for the link!

For the moment, I can't tell much about one hub motor to the next.. I think I have to get to some forums and listen to the comments and reviews.

The Golden Motor site has a lot of LiPo batts and a RegenBraking Controller I'd like to hear some rants/raves about..

For the moment, I've got the motor, batt and controller from a discarded Razor Motocross bike.. 400w I think and an SLA 36v batt.. So I'm going to do a test bed putting the motor/batts onto a bike-trailer.. just get the pushing help when I need to carry some loads.. or a daughter. Will probably try to put pedals back there, too, and get a few watts back from the Oatmeal&Syrup budget!


Heinzmann is the originator that all the chinese hubmotor companies are ripping off. They are expensive, but worth it from a durability perspective.

Look on Craigslist for "eBike" brand electric bikes. They quit making them several years ago. I've noticed some popping up from time to time with dead batteries. They came with genuine Heinzmann hubmotors, and you can usually get the whole bike for less than the cost of a new Heinzmann.

Another Chinese brand is Crystalyte.

Construction and quality is acceptable for low end Chinese manufactured goods. I found the system to be more than adequate for driving a bike. I did take issue with the 36v operation. The manufacturer had down graded a 48v controller to operate on 36 V -- perhaps for legal reasons. Addition of a few components to the controller rectified the problem. Sadly, the top end speed no longer constitutes a street legal bike ;)

The largest drawback of an e-bike is the weight to power density to price trade off for the batteries. Having 45 pounds of lead acid cells on a bike greatly increases the amount of work required of you and the motor. As many have pointed on TOD, nothing quite beats the energy density to weight ratio of liquid hydrocarbons!

My personal feeling that an electric recumbent trike with good fairings would be far more viable. Of course, the top end speed for that with both motors working would be well over the legal speed limit!

Of course, it you are out in the great plains of the USA there are other ways of powering a trike!

Thanks.. Yeah, the Recumbent Velomobile is kind of the 'End of the Rainbow', while I might de-optimize mine by raising the rider height somewhat and make the entry/exit more carlike.. Just need to get around town.. and I'd like to see and be seen by the rest of the traffic.

I've also toyed with ways to put Fairings on the bike without getting stuck in a bubble. I keep adding 'Retractable Landing Gear' with skate wheels to the designs, to work at stops and for parking..

I'll keep an eye out for those Heinzmann's..

I had a Smart Car in Europe and it pretty much fell apart after 30K. Engine, steering brakes, door handles, lights, etc. Sort of like a Yugo. Treat it like a baby if you can. Avoid speeds over 55 mph.

Maybe better to wait for the euro diesels to arrive. Nobody in Europe will touch the Smart Car anymore because many other companies make better products. 53 mpg is the new minimum people will buy.

I bought a smart (the 's' is not capitalized) in May with the express intent of selling it for a profit, which this filthy capitalist did.

During the few hundred miles I drove the car, I came to like it. I may buy one at some point for personal use, but this is not the time for me.

The interior is great. Note I did not say 'great for such a cheap car'. It is really nice by any standard. Mine had heated seats and mirrors, glass roof, 6 disk changer with subwoofer, power locks and windows, and all the other doodads people demand these days.

The exterior is plastic panels bolted to a formed steel egg of a rollcage. The car has six airbags, ABS, and stability control, and is about as safe as a car that light can be made.

The real downer is the transmission. It is a true manual with a single clutch, but it is controlled electronically. This was maddening to me on two levels. First, it shifted too slowly. Second, trying to ease your way up or downhill from a stop was an exercise in futility. The computers just couldn't figure out how to operate the clutch properly. I found a couple of hills I could not get up from a stop without smelling major clutch burning and jerking around pathetically.

If you live in a flat city, and never had to carry more than two people and minimal cargo, it would be perfect. Chicago, for example.

Chevron sees big drops in fourth-quarter production and earnings

I'm flabbergasted.

Just imagine, the YOY drop in oil production is 17%!!!!

It is well known that wages and salaries are "sticky". That is, they will go up with inflation, but are resistant to downsizing with deflation. Employers tend to cut positions rather than cut wages during downturns, which is why the unemployment rate is the main thing people are looking at during economic downturns.

However, while wages are "sticky", they don't hold fast forever. When things get bad enough, you finally do start seeing pay cuts as well as staffing cuts. When you see the pay cuts starting to happen, then you know that you are no longer in another garden-variety, temporary downturn, but something much more serious.

My wife got a letter yesterday from the college where she teaches as a faculty member. They announced an immediate across-the-board pay cut for all employees. The President, to his credit, is leading by example and taking a 10% cut. The other senior administrators are taking cuts in the 5-7.5% range. Most faculty and professional staff are getting cuts of around 2-5%, and the lowest-paid staff are getting cuts of at least 1%.

We're just glad she still has a job. There will probably be more shoes to drop in the future.

There will probably be a lot more institutions resorting to pay cuts over the next few months. If this becomes widespread, then this will be a very strong signal that we are seriously in a deflationary mode.

This has become increasingly popular. Caterpillar is cutting salaries by as much as 50%. The governors of California and New York are asking state employees to accept a 10% pay cut.

The thinking is that it's more expensive to hire and train new workers when the economy rebounds than it is to retain your current workers.

New York's governor is asking state employees to take a 10% pay cut? That's news to me and I'm a New York State employee. As far as I know he's only asked us to forgo the 3% raise we are due in April under our contract, and to accept an additional week pay lag. (Meaning we'll get paid for only 51 weeks in 2009, and will get paid for the extra week after we retire or leave state service)

From what I've heard, Paterson is also asking state employees to pay more for their health insurance and their pension system. Doesn't mean he'll get it, of course.

The Governator's plan is more straightforward. He wants state workers to take two days off per month, unpaid.

"Sticky wages"?? I don't think so. Everybody that got a 20% wage increase during each of the last 3 years, raise your hand.....didn't think so.

From BLS....."Retail prices on staple American foods rose by double-digit percentages in the last year, 2007, according to new data from the federal Bureau of Labor Statistics (BLS). The cost of milk rose 26 percent, and egg prices grew by 40 percent."

From REUTERS......""WASHINGTON (Reuters) - U.S. food prices will rise by at least 7 percent in 2009 because of higher feed costs for chickens, hogs and cattle, said a group of food-industry economists on Thursday.

It would be the third year in a row that food prices rose faster than the overall U.S. inflation rate. Food inflation is the highest since 1990.

"The sizable increase in the cost of producing food has not been fully passed on to the consumer," said private consultant Bill Lapp. He foresaw food inflation of 7 percent-9 percent in 2009.""

I have mentioned it before, no one can beat hyperinflation from the wage/salay side. No one.

Perhaps we should invest our wages/salaries in the stock market first? Is that still recommended by the elites?

Times they are a changin:

New cover of Fortune Magazine:

A pic of a guy in a pinstriped suit in handcuffs & the following:

Sending Wall Street to Jail
They took your money. They wrecked the economy.
Now it's payback time.

It sure is. Check out today's Denninger:

Does not all of the above involve defrauding investors and indeed The American Public by making false representations as to the quality of the borrower, the structure of the debt itself, and/or its value? In some cases Wall Street firms went so far as to be shorting what they were selling to customers - the most-clear declaration you can find that they knew what they were doing, and it was not an accident, and the ratings agencies have disclosed that in some cases they knew of errors in their models yet did not disclose them for months - or years.

So folks, if you're in this space - selling, trading, buying debt - or if you're a member of a law enforcement agency at the Federal level - why aren't you raising hell about this?

Everyone says "we need re-regulation" but from where I sit we have plenty of laws to punish these acts right now! In fact, the above look pretty good - fines of up to one million dollars per count, where each separate security (e.g. each mortgage, bond, etc) can constitute a separate offense? That ought be plenty of existing law to confiscate all of the assets of the people who actually caused this mess.

I only quoted a small bit, the whole article is very much worth reading.

Kevin Phillips in Wealth and Democracy has an entire chapter that deals with this subject of what's "legal" and what's "illegal."

For me, it all harkens back to what Martin Luther King said:

We must never forget that everything that Hitler did in Germany was "legal." It was illegal to aid and comfort a Jew, in the days of Hitler's Germany.

--Martin Luther King, Love, Law, and Civil Disobedience

This is where I disagree with Denninger when he wrote:

But at the same time it is my opinion that the underlying acts that were necessary for this mess to get to where it is are already illegal.

I think MLK and Phillips come a lot closer to getting it right than Denninger does. From Phiillips:

Corruption, like larceny, comes in many forms, some blatant, others more subtle. Booms, speculative heydays, and other periods of money worship bring the highest ratios of both corruptions, the hard and the soft...

In the epigraph at the beginning of this chapter, Charles Kindleberger capsulted the practical and philosophic interrelationships of financial booms and unlawful behavior. A megaboom was bound to breed even more. Many, many books and articles have explored the transgressions, and the Wall Street Journal, in an ethical retrospective on the nineties, acknowledged that "historians are intrigued by the parallels they see between this era's frauds and those from past periods of financial frenzy." From Kindleberger's research, crashes and panics have often "been precipitated by the revelation of some misfeasance, malfeasance or malversation [the corruption of officials] engendered during the mania. It seems clear from the historical record that swindles are a response to the greedy appetite for wealth stimulated by the boom."

Less obtrusive but at least as important has been the corollary corruption of thinking and writing--the distrotions of ideas and value systems to favor wealth and the biases of "economic man...."

The result by 2000 was a Washington in which liberals found themselves muttering about "corruption" that was largely legal behavior--decision-making lubricated by so-called "soft money" political contributions, and resulting in flagrant tax favoritisms, bank bailouts, gutted regulations, and see-no-evil adminstration of the federal election laws....

In the 1980s, as befitting an age of knowledge industries and communications, the selling of a new political economics was mounted through a well-funded network of foundations, societies, journals, and theories. Broadly, their efforts were designed to uphold corporations, profits, consumption, wealth, and upper-bracket tax reduction and to undercut government and regulation. Some of those involved antedated the 1970s, most notably University of Chicago economist Milton Friedman and the "Chicago School" of free market economics. All together, they would give self interest--critics sustitued selfishness and greed--another philosophic era in the sun.

--Kevin Phillips, Wealth and Democracy

Peggy Noonan said something very surprising, coming from her, in today's column:

Lately I think the biggest thing Americans fear, deep down—the thing they'd say if you could put the whole nation on the couch and say, "Just free associate, tell me what you fear?"—is, "I am afraid we will run out of food. And none of us have gardens, and we haven't taught our children how to grow things. Everything is bought in a store. What if the store closes? What if the choke points through which the great trucks travel from farmland to city get cut off? I have two months of canned goods. I'm afraid."

Nooners said that who worships at the feet of Ronald Reagan, then it is significant. But then again, she didn't say that she fears this herself, just that "Americans fear". These people will cover their butts when reality hits, and claim they had nothing to do with any of it, saying they could see it all coming.

Agreed. Wonder where's all the hype about "trickle-down" and yada yada gone to lately? Seems even the grouchiest "uninhibited free markets will save us all" types have gone warily quiet.

Of course what Peggy Noonan says has been true for most of the last century, but no one notices until a downturn hits, then they worry.

The hysteria level down at street level is almost to boiling point now, with the biggest concern being JOBS. If I can keep a steady income going, then I can re-organize, pay down debt, and things go o.k., but cut off the income stream, and stuff hits the fan for me whether or not the rest of the country is doing well or not.

We are starting to see a tip of what's coming, and sure enough it's a replay of the late 70's early 80's, in that a lot of folks are looking for businesses of their own to go into. The big boys and chains seemed untouchable a few years ago but now we know they didn't know anymore than the rest of us, they just talked a good game. We could see another entreprenarial blast coming now that will rival even what happened in the 1980's. One thing we know, you have no safe future with the corporations, they will throw you under the bus at the first sign of trouble! Keep the powder dry, and keep CASH ready so you can jump in (or out) of things fast, when this turn comes all too many of those scared out of their pants by what has been going on do not want to be too timid and miss the rebound...we just don't how long it's going to take and the wait could be painful for awhile longer.


Peggy Noonan is rich. When TSHTF the wealthy will find enough but they'll be good at hiding it as conspicuous consumption is no longer the PC. Remember John Denver, the environmental balladeer, singing about Sunshine On My Shoulders. When the Oil Embargoes of the 70's were playing out he had a private underground gas-tank installed on his private property in Colorado. He was convinced that Peak Oil was imminent so he did the natural thing: looking out for #1.

Personally I think the current downturn is just the first chapter in what will be a long escalator ride down.

"Fasten your seat belts...it's going to be a bumpy night." Betty Davis as Margot Channing, All About Eve


There's early reports of another smaller ash leak, in Al. (still TVA) this time.

Re: Gas Fight: Pickens vs. Fed. Ex. up top.

Remind me again why a mandate for natural gas use in trucks is okay for Mr. Pickens but a mandate for ethanol which Mr. Pickens opposes is not.

One of us is getting senile. Lately Mr. Pickens has taken wrong postions in the oil market according to his own word. Now he takes
what appears to me as a hypocritical positions on vehicle fuel mandates.

I think he is losing it. He is 80 years old. This is what happens when people don't act their age.

By the way, 90 year old Kirk Kerkorian (through his Tracinda Corp.) is another one who doesn't know when to quit. He has lost millions and perhaps even billions in investments in Chrysler, General Motors and lately Ford. The guy is fixated on auto companies and despite losing on Chrysler and GM, poured millions into Ford at $6 per share. He has now dumped it for less than $3 per share.

Lucky for him there are no more American auto companies big enough to lose the rest of his money on.

I agree with you. It happens all over the world, that old men just can't stop to be in the "light of the world". Often they ruin their families with their "bets". They just can't stop the casino playing. Otherwise they think of their near death.

I forgot to mention W. Buffet. He seems to be the "new" American herald. He also lost billions of paper $. And still is drinking his Cherry Coke all the day.

The high cost of fuel this past year did serious damage to our economy and society. After a brief reprieve gas prices are inching back up again. Our nation should not allow other nations to have such power over us and our economy . We have so much available to us in the way of technology and free sources of energy. WE seriously need to get on with becoming an energy independent nation. We are spending billions upon billions in bail out dollars. Why not spend some of those billions in getting alternative energy projects set up. We could create clean cheap energy, millions of badly needed new green jobs and lessen our dependence on foreign oil all in one fell swoop. I just read an eye opening book by Jeff Wilson called The Manhattan Project of 2009. It would cost the equivalent of 60 cents per gallon to drive and charge an electric car.If all gasoline cars, trucks, and SUV's instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota. Why don't we use some of the billions in bail out money to bail us out of our dependence on foreign oil? This past year the high cost of fuel so seriously damaged our economy and society that the ripple effects will be felt for years to come. www.themanhattanprojectof2009.com

BeyondGreen, duplicates here we come!

Thank you for the recommendation. I've just ordered a copy -- but I must confess I am a priori skeptical about its economics.

If all gasoline cars, trucks, and SUV's instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota.

Extravagant claims like this automatically set my bullshit detector ringing -- on the assumption that if it sounds too good to be true, it probably is too good to be true. But I'll suspend judgment until I've read the book.

Perhaps there is a magic bullet after all ... :-)

Dear Oil Drum readers,

I am a first-year student at a Canadian university, and I just changed disciplines, from Mechanical Engineering, into Chemical Engineering. However, this was quite a daunting decision, which was four months in the making.

Now, I believe that there is quite a large amount of engineers, other professionals, and otherwise informed people, who read this site, who should have some insightful opinions on the matter.

Therefore, can anyone advice me as to whether I made the right choice? A complete doomer scenario notwithstanding, I think I would succeed well in either discipline. Do people here have any insight on which would place me for a more certain future?

In case any of you were wondering, I am succeeding quite well thus far, after one semester. I have a 91% average in my 6 classes from this past term. I am also strong in chemistry, i.e., 3rd out of 340 students.

My current line of reasoning is that mechanical engineering has a far greater number of graduates, compared to the number of job openings. Many positions in mechanical engineering also seem to be more discretionary—many mechanical engineers work in the automotive, robotics, et cetera.

However, in my mind chemical engineering focuses more on the synthesis or processing or reprocessing of chemicals vital to any form of industrial or modern civilisation, i.e., fertilisers, fuels, polymers, water treatment, and more. It would be quite easy to find a career in the oil and gas industry, or any resource extraction industry, or any industry that transforms resources into useable commodities. Or my attraction to chemical could simply be explained by my love for [practical] chemistry.

Now, this seems to be slightly longwinded, however now I must solicit your opinions. Is anyone reading this an engineer, especially chemical or mechanical? Or anyone else for that matter who has an opinion?

Please enlighten me with your opinions on your beliefs if this is a good schooling decision. What do you believe job prospects will be for chemical engineers (in training)? I will definitely place some weight on your opinions.


I think chemical engineers are great. It is my experience that their fundamental training is very adaptable. If you have an affinity for it, all the better.

I have an MS in petroleum engineering. Many of the graduate students where Che Eng BS. They did very well.

Good luck.


"Therefore, can anyone advice me as to whether I made the right choice?"

No one can predict the future, but those who have post-secondary education in a useful subject (ie, not Elizabethian literature) do better over the long run. Bear in mind that during your working life over the next four or five decades, you will live through several economic cycles. Your choice is as good as any other, I think.

What is important, and I was fortunate enough to learn it young from parents and other elders who lived through the Great Depression, is don't spend more than you make. I graduated university in 1978 just in time for the last oil boom, and survived the disastrous decade of the 1980s recession because my only debt was a mortgage on an affordable bungalow, and everything else I paid cash or did without. Too many people suffered in the 1980s then or are suffering now because during the good times the money went out as fast as it went in. Too many people then and now had leased BMWs (I drove a rusted VW Beetle), a fancy McMansion (I lived in the basement of my house and rented out the main floor until I paid off the mortgage), trips to Hawai'i (I went hiking in the Rockies adjacent to Calgary), and all the latest electronic gadgets (I didn't buy my first computer until 1998).

I can't emphasize it too strongly: stay out of debt, and don't spend a penny more than you make.

No one can know the future, do something you are interested in. I am working as a control system engineer after working in IT, just take what comes along.

"but those who have post-secondary education in a useful subject (ie, not Elizabethian literature)"

Literature is about lives lived, emotionally wrenching experiences, despair, adapting to new and challenging circumstances...

What are we facing in the world as we live our lives today: emotionally wrenching experiences (job loss, house repossession, family under stress);despair; new and challenging circumstances.

Whatever path of institutionalized education is chosen, it should prepare you for life outside of your role as a cog in the big machine.

Were I Zeus, I wouldn't let anybody out of Engineering School without the demonstrated ability to analyze literature, just as I wouldn't let anybody graduate from the arts/humanities/social sciences without mechanical, construction, financial and/or other technical skills.

And this for engineers and literature majors, etc., not so much to provide them with a wider range of job opportunities, but rather to reduce the likelihood of mystification and manipulation when confronted by challenging circumstances.

Yes, I do realise that question was worded quite poorly. I also should have written "advise" rather than "advice". Engineering really does deteriorate your language skills...

And advice about being wise with money is definitely important. I think I'm one of the few sane people at times, seeing how people my age throw away their money, get credit cards at this age and don't pay them off, or rely on 'bailouts' from mum and dad...

So far, I think my finances are quite good. I commute by bicycle or bus (since it's absurdly cold); my tuition was paid entirely by scholarships this year; and I have enough money pocketed from summer to cover next year's tuition easily. My expenses, other than tuition, are a very small fraction of what I make over the summer.

I just hope I don't get blinded by money in the future and continue to follow your advice--and my nature--and be cheap ;)

Hi John,

I got my engineering degree (Purdue) in Industrial Engineering (also called Manufacturing Engineering). Did that type of engineering for about 6 years, then migrated into product design work (combo of Mechanical Engineering and Computer-Aided Design CAD) for about 4 years, then into being a Plant Manager for 2 years (terrible decision), then back to product design work for another 5 years, and now I have my own business and design and produce products on my own.

At one of those consumer product design jobs I had an engineering manager who had a chemical engineering degree.

So my advice is to stick with the engineering program of your choice, but get a little background in the other general engineering fields so you can float around the engineering world as jobs present themselves. Ten years out of college it will barely matter what adjective goes with your engineering degree - what will matter is your experiences and capabilities.

Learn a little mechanical (especially about materials), learn a little manufacturing (know about basic machining, forming, assembly methods), maybe squeeze in a class on production scheduling or supervision. But especially take a basic CAD class - learn how to read a blueprint and how to make basic 2D prints. Basic AutoCad still rules. 3D stuff you can learn later on the job IF you are good at 2D.

Good Luck!


Thanks a lot for the advice, Greg.

One of my professors from last term told me the same--do what you love, but keep your mind open and jump at any opportunity to expand your skills. He also said that if I go onto graduate studies, the division between disciplines becomes less straightforward. Although depending what the world is like in 2012, I decide to give up on my hope of further studies and get to work intead.

I have two material courses in upper years, however machining is something I don't know too much about. I will keep that in mind if I ever get an opportunity to learn some more about that field.

As for CAD, I consider myself quite good. I had an Autocad and hand-drafting course in which I suceeded quite well. I also worked at an engineering firm over the summer and did mostly 2D drafting and some 3D in Microstation... and I hope drafting skills turn out to be useful, since I love it :P

Therefore, can anyone advice me as to whether I made the right choice?

I am a chemical engineer, and I switched from chemistry for much the same reason: Job prospects looked a lot better in engineering. And while mechanical is not a bad choice, I think the variety of options with a chemical engineering degree is greater. I could have gone to work for Frito Lay, BASF, Shell, Intel, or Fluor Daniel - to name a few.

Plus, the demand is much as you say. I have never had a big problem getting mechanical engineers, but I have had lots of problems at times finding chemical engineers.

Thanks for the post, Robert, it is reassuring.

I also hope you are enjoying your new job! From what I read it seems extremely interesting, although I need to find time to reread your last article and research the process more in-depth.

All I can say is I hope that later on in life I will be able to have a job of the same calibre of yours!

If memory serves, Canada needs about $2 billion in water and wastewater system upgrades. You may want to consider civil or environmental engineering (though as you mention, chemical also fits in there). Also consider transferring to a tech school. I went through NAIT and I'm very please with how things turned out for me.

I'm planning to study bioengineering (option: agriculture) next year. Good idea?

ChemE is as good as any other engineering field. However, check out your local community college and learn some "hands on" stuff - like: welding, small engine repair, blacksmithing. Then you have the best of both worlds.


SO...Can you weld/solder? Do you know which end of a cow gets up first? Which end of a horse? Ever dig a posthole by hand? Do you change the oil in your own car? Can you patch a flat tire? Can you wire a switch in the house? Know what a framing square is? Know how to straighten a used nail? Ever bake your own bread from scratch?

Get all the education you can, but don't leave out the real stuff.
Simplicity is the Art of Life..

Chemical engineer?
Learn to make a great still, you will always be in demand and you will never go hungry.

> Can you weld/solder?

> Do you know which end of a cow gets up first? Which end of a horse?
I bet the cow or horse knows. Btw, dont sneak up on them and scare them.

> Ever dig a posthole by hand?
Almost never, you set up the posts when the ground is wet, otherwise it is ten times as much work.
And use fenceposts slim enogh to make the hole with a spit. (skewer?)

> Do you change the oil in your own car?
Could do, have never done it even if it would be good for the engine to halve the
service intervals for the oil. I dont like servicing cars, they are small and
cramped compared with a tractor.

> Can you patch a flat tire?
Yes but I often dont bother to fix the inner tube. The small tube with liquid rubber dries
out after one repair. The savy thing to do would be to queue 4-5 inner tubes and then repair
all of them at the same time.

> Can you wire a switch in the house?
Thats easy.

> Know what a framing square is?
No idea.

> Know how to straighten a used nail?
Why would I do that when new nails are so cheap?
Ok, I have tried when I have brought too few nails.
But torx head screws and a battery screwdriver rules. ;-)

> Ever bake your own bread from scratch?
Sure but I have not cutivated my own yeast.

No one needs to know everything, know something, learn more
and cooperate and things will be fine.


Now, Sir, can you guess the real meaning behind each of those questions?

Let's see if you win the gold ring! HA!

Power down M_R.

Theoretical knowledge is good but it realy gets usefull when you can combine it with an understanding of the practical, physical world? And good engineering is often about
making solutions simpler?

Your list of questions read like a random list of things you do when living a rural life as a farmer. Been there and done that but moved out, computers, internet, the local university, energy, environmnet and then politics were a lot more rewarding then milking cows.

I am more into powering up due to living in a country with very good resources in biomass, hydropower, infrastructure, industry, "green-tech", fairly good government institutions and we even got a majority of the population demanding fiscal responsibility. My party would never have won the latest election withouth a strong stand on fiscal responsibility.

Can you weld/solder? ... That's brazen question if I ever heard one. I love the smell of fresh roasted solder flux in the morning.

which end of a cow gets up first? ... the faster one?

Ever dig a posthole by hand? ... still have the popped blisters on my hands to prove it

change the oil in your own car? ... used to, but Jiffy Lube is so much easier

patch a flat tire? ... on a bicycle, yeah (I also slept at this motel that's supposed to make you smart and watched a garage mechanic plug an auto tire)

I solder in my sleep (well, that may be an exaggeration, but I do it quite well while awake). I understand the concepts of welding, but I have never attempted it and would be somewhat hesitant...

And I know to stay clear of a cow getting up, and to stay away from its backside. However, if memory serves, their rear end tends to lift first.

I've dug blisters off my hands, I know how to plant and maintain fruit trees, shrubs, and other vegetation, but I don't know what a posthole is.

I don't own a car; although I maintain my bicycle and motorcycle by myself, albeit with help from my dad.

I have patched road bike tyres, although it is not fun.

I can wire a switch as long as it's a 15 amp circuit or so... I wouldn't trust myself with anything higher.

Framing square--around windows?

A used nail, I can never make a new nail. But with a good surface and a hammer I've made many useable again.

And I've only helped bake bread from scratch--however using store-bought ingredients... I definitely don't grow grain in the garden. Just vegetables and fruit so far.

Thanks reminding me to work on those skills on the side... and I'll work on a still when I've got some time ;)

Thanks reminding me to work on those skills on the side... and I'll work on a still when I've got some time ;)


It is to distilling what TOD is to energy/peak oil.

You can learn how to extract essential oils and distill pure water. ;-)

Soldering is quite useful there too, just make sure there is no lead.

Good Luck!


Get into a coop program if you can, it helps with paying for school and gives you experience in the real engineering environment. In my experience, all engineering overlaps somewhat so it isn't so much which degree you seek as what you do while in school and after. The engineering course work is just a starting point for a lifetime of education. Getting good marks isn't an end in itself, it's just an indication you have mastered the elementry fundamentals the profs are teaching you. And don't fool yourself into thinking you are getting some valuable esoteric information in undergraduate (or even graduate) engineering, cause you're not (Just go to the research journals in your field and try reading a random article to get a feel for how little you know). If you find you are interested in something, go teach yourself about it and learn how to swim without guidance in the sea of knowledge, odds on you'll be able to find a fourth year project in that area and might even develop some real expertise. Learning how to independently learn will be more valuable than any actual course work.

In terms of the job market potential after graduation in Canada, I think mech is probably better (and hence there are more of them), it is a more generalist moniker. Chemical engineers seem to be pigeon holed too much when seeking a junior level position. I think there are way more chemical engineering graduates than there are true "chemical engineering" positions, and many chemical engineers eventually find themselves in some other sort of engineering position.

Chemical engineering is actually a bit of a misnomer because very little of chemical engineering has to do with actual chemistry (ie the transformation of one molecule to another). It is more about the handling and manipulation of fluids, so it should probably be called Fluids engineering. Just telling you because in first year you might not know what it really means to be a "chemical engineer". You'll learn about, mixing of fluids, separation of fluids, phase changes of fluids, piping and pumping of fluids, heat and mass transfer in fluids. You also learn some basic chemistry, but it isn't the central focus, it's like the math you learn, a useful tool.

Yes, I am tempted to do co-op, however I will decide come the end of second year--my first term wouldn't be until that summer.

It also depends on my luck in getting good, relavent summer jobs. This past summer, I worked for an engineering consultancy which did a lot of work for local mining companies. We (I only did drafting, albeit) played a big part in designing a few integral components of a new mine from scratch. It was an amazing experience, and it will definitely encourage me to take co-op if I can afford to spend the extra year.

Although, I have no financial need, fortunately--my parents have enough saved up for 2½ years of tuition; I have enough for next year in my bank account; and I am sure to make a significant amount of money this summer, although the definition of 'significant' highly depends on how economic conditions affect summer jobs for students.

Lately, I'll admit to being consumed by my courses--I don't have any time to read and study things on the side, as I did in high school. But I am told this will change come 3rd year, when you specialise more, and have a fair bit more free time.

I am very glad you brought that up--now to follow through with that recommendation as soon as I can devote a bit of time to independent learning.

As for jobs, you have a point--there are many more mechanical jobs, however from what I gather, there are still more jobs per graduate for chemical engineering than for mechanical. But I expect to be suprised where I am working in 10 or 15 years--I just hope it is somewhere good in the energy industry, either oil & gas or alternate energy... if things pan out.

And, I do understand that chemical engineering is better termed 'process engineering', or many better descriptors, although it does involve a lot of chemical concepts; that is, thermodynamics, mass transfer, and I'll just give up since your list is quite comprehensive! Now only to discover what exactly what I will end up doing, since from the (few) chemical engineers I have spoken to, their jobs vary drastically!

Thank you for the insightful post.


Excellent question and many excellent replies upthread!

Let me add to this the following:

Mother Nature does not divide herself up into specialized disciplines.

Mother Nature does not divide herself up into specialized disciplines.

The whole notion of defining yourself as being a "Chemical" engineer rather than a "Mechanical" or an "Electrical" engineer or a "Neurobiologist", etc. is purely an artifact of how we organize our Adam Smithian civilization into "specialities".

In truth, you need to be "all that you can be" without falling prey to the mind benders of the economics, political science, philosophy and religion departments.

Regardless of what you "major" in, try to take one or more courses on how the human mind works, more particularly on how people and society try to, and succeed in, manipulating your thought processes. Remember ... Dilbert is an engineer ... and Dogbert has it all over him as well as his pointed hairs boss.

Dilbert is NOT a comic strip ... it is a documentary.

Thank you for that--I have more electives in my upper years, and that is definitely an option.

However, from what I have noticed, many psychology and sociology classes at my university are quite a joke! However, there is one amazing neuroscience/psychology professor that I would love to take a class with!

Otherwise, that is definitely a topic about which I should do some learning myself.

Out of chance, do you have any books on the topic of the human mind, etc., that you would recommend to me?

It may also be too late, I have fallen prey to philosophy in the past. However, I am thus far immune to economics and religion.

And thank you for the Dilbert strips. I'll do my best to use Dogbert as a role-model rather than his counterpart ;)

do you have any books on the topic of the human mind, etc., that you would recommend

A few stand out in my mind at the moment:

1) The Naked Brain by Restak M.D. (that's the one I read, although let me add that the criticism here about the "neuro-society" aspect of the book is valid. Nonetheless I still highly recommend Restak's book, but perhaps to read it only after you have grasped some fundamentals about the "triune brain" and about real evolution (not the intelligent design kind))

2) Quick Thinking on Your Feet by Valerie Pierce (even if you never master all the techniques suggested by Ms. Pierce, merely having open eyes as to how others (the Dogberts) manipulate their way through society is priceless)

3) Keep reading The Oil Drum as an antidote to MSM propaganda -- no matter how "clever" you think you are getting, you will never stop being human and you will never stop being vulnerable to manipulation. Many of the editors and commenters at this site are simply brilliant and know how to keep one toe in the reality based part of the Universe (oh yeah, speaking of being "clever", two more books: The Black Swan and Fight Club)

Do you have any books on the topic of the human mind, etc., that you would recommend? --Part 2

Warning this is unabashed blog whoring:

Aside from reading books, reading TOD, I started keeping a journal of sorts on my observations about the "insane" society I live(d) in and how it seems to keep stampeding towards the cliff.

1) This brought to my mind the notion of a herd of Lemmings running toward the edge: Click here to see some initial sketches of the idea as it formed --now mind you though, this was back in 2005, soon after the Bush 2004 Presidential election and I was in awe at how "mixed messages" like "stay the course", "only cowards cut and run" completely outwitted the clever Kerry campaign.

2) The writing process forced me to keep paying attention to small troubling thoughts.

3) The book and blog publishing companies want you to think you have become "clever" and "special" after having read their stuff. You need to keep reminding yourself that you are not "special", we're all pretty much alike.

This advice wont make it easier to decide but it is also a good idea to choose a speciality, finish a project and get an exam. I have personally made the mistake of spreading my energy and time on too manny things, its fun but its not an easy path.

I am a ChemE that graduated in May 02.

I would say that you will be fine.

Even though companies have been cutting back on total Engr headcount, there are so few graduating these days that companies cannot begin to replace their aging/retiring baby boomers.

Fortunately, I work for DuPont in a pretty recession/depression proof roll.

I have worked for several other companies previously. I would urge you to look at the long term potential/viability of any job offers you get.

I had 2 of my previous companies go out of business/outsource to China. Look for something away from commodities and with relatively low labor cost as a % of total product cost.

Breaking News:

China carbon dioxide emissions fall 5+% in 4th quarter of 2008! This is huge from the main growth source of emissions this past decade. Hopefully the economy will get its footing by late 2009 and we can keep emissions at their lower level by rapidly deploying efficiency.

Check out details on China energy shifts at:

Onwards to sustainability,

Here's a technological breakthrough - my Dell PC has turned into a time machine. I opened up CNN, and one of the stories seems to be written about 1998:


"Kicking back in retirement" - "As we discussed early on, money contributed to a 401(k) grows tax-deferred."

That's a good one - money grows - I'll have to use that one.

Hello TODers,

This website thinks the bottom for I-NPK is in:

WEEKLY FERTILIZER REVIEW: Fertilizer Prices Hint at Start to Seasonal Strength

After crashing on international markets over the past few months, prices on most fertilizers appears to be stabilizing, with signs the market is creeping higher on seasonal demand...Forward prices out of the Black Sea are about $27 a ton higher for February and March, suggesting a bottom is in.
Have you hugged your bag of NPK today?

Those forward prices are a risk premium. They are expecting a war there shortly. Georgia II.

I was really into tech stuff as a kid. I had my ham radio license in 9th grade. I worked in a vw repair shop in high school. I planned to be an engineer, took physics,calculus, etc. in college. To make a long story short I became a lawyer. The technical skills and understandings I gained, have numerous times been very useful. Liberal arts people - which includes most lawyers, have little or no understanding of engineering or science. That lack of knowledge is a handicap in advising a client in a technical field. And there is a lot of tech stuff involved in dealing with business clients.
Looking back some 30 years I am glad I took the career path I did. Many engineering jobs in my experience are relatively boring and repetitive. You are also typically an employee in a large organization and subject to the asinine middle management experience. The more socially adept engineers typically get moved up into management and do very little engineering.

As with everthing -- you pay your money and you take your choice

Good luck


Do you have a point, or are you just fleshing out your memoirs?

I think s/he was referring to the Chem Eng query above, but didn't answer in the same thread...

"Saudi official says global oil demand could fall 45 percent"

This tidbit, or should I say a todbit :-) received no response.

Was it ignored intentionally?

This would mean that oil demand would drop to ~1970 levels, with a population increase of ~50% and with a substantial increase in the so-called standard of living.

Perhaps they know what we do not, or are not willing to confront, but it just seems like BS.

Or they could just be someone in a thwab grabbing a sound bite.

Feedback required.

pragma -- I did notice but didn't comment at the time as he gave no rational of what seems to me to be a very irrational statement. If I recall correctly the global recession caused by the late 70's oil price spike reduced global consumption by 15%. This eventually led to $10 oil in 1986 and almost threw the KSA into bankruptcy according to some sources. The world, particular the third world, suffered greatly through this period. Given the link between oil consumption and livelyhood a 45% reduction in consumption would seem to be predicting a world in dire straights much worse the the most negative doomer out there. Time will tell.

Given the link between oil consumption and livelyhood a 45% reduction in consumption would seem to be predicting a world in dire straights much worse the the most negative doomer out there. Time will tell.

As I said in the previous reply, it's not much worse than the most negative doomer as Ilargi over at TAE forecasts something similar and has been pretty accurate up to now.

An interesting question is would the world be in better shape to survive Peak Oil if we crash really hard now, leaving a possible decade or so to recover to a more sustainable system while still having the temporary cushion of the ability to increase oil supply (although not to higher than today)? Or does it make it worse?

Edit: Does it make it worse? Stoneleigh has posted the following reply over at TAE where I posted the Saudi link.

Stoneleigh said...


The Saudi's quoted are right - investment would have to be maintained, even in the face of a demand collapse, in order to avoid a supply collapse to follow. Personally I think investment won't be maintained as it will be both financially and physically impossible to do so. Hence I think we will see a supply collapse that would send oil prices through the roof at a time when very few will have any purchasing power to speak of. That is a recipe for extreme hardship, and also for a hard limit on any kind of eventual recovery.

I'll tell you Tow, even though it's just speculation on anyone's part, but in the world I envision at a 45% drop in consumption there would be no recovery, there would be no shift to sustainability, there would be no concern about global warming, there would be a daily life and death struggle for billions, there would be 10's of millions in the US with no income at all and with virtually no gov't assistance. There would be a total collapse of international trade which would mean starvation for 100's of millions in short order, there would be resource wars to rival the worst armed conflicts ever seen in recorded history.

But that just my vision. I think many folks don't understand the connection between hydrocarbon consumption and sheer survivability. There are many aspects of our energy consumption which have been very wrong. We must change those wasteful habits. But when someone predicts a 45% drop in consumption and doesn't understand the real ramifications I think they miss the real issue should their prophecy come true: the body count. Discusing any other aspects is wasted breath IMO.

But when someone predicts a 45% drop in consumption and doesn't understand the real ramifications I think they miss the real issue should their prophecy come true: the body count. Discusing any other aspects is wasted breath IMO.

Ilargi and Stoneleigh are well aware of the ramifications. They know they are predicting an imminent catastrophe for most of the world's population. In fact I'd say their view is very similar to the world you envision in your comment. I fervently hope they are wrong.

I'm sure the Saudis understand what a 45% drop would mean as well.

It would be pretty much the ultimate Shock Doctrine.

My first thought was when did Ilargi become an advisor to the Saudi government :-)

Seriously though I think it's about inline with Ilargi's projections which is why he believes that the financial crisis trumps Peak Oil for at least the next 5-10 years. Ilargi has said that he believes one of the reasons the unstable debt mountain was built so high (by people who in his opinion did know better) was to allow the financial elite to crash the system on their own terms at Peak Oil.

Ilargi further maintains that all the bailouts etc are designed to transfer what real wealth still exists back to the super rich and screw the rest of us.

So, the Saudi comment is either smoke, or they consider total financial collapse a possibility.

to allow the financial elite to crash the system on their own terms at Peak Oil.

I'm not ready to sign on to that theory, yet.....

Much of our blindness can be attributed to human nature, as has been discussed here at length. That said, the figures tell me that what we face is very bleak indeed and simply can not have escaped the notice of TPTB.

Many of my friends have asked me, "Well, if you're right, why isn't anything being done?". More and more, I'm thinking it is because very little can be done. Mitigation yes, soloution no.

I'm a believer in "Never try to explain through malice what can be explained by stupidity", but I don't see Ilargi as a tin-foil hatted conspiracist either.

Time will tell.

When do mitigations add up to a solution?

The main problem might not be peak oil but mechanisms in the finanscial system, legal system and peoples perception of problems limting the rate of adaptation to new cicumstances. I hope the right parts of the red tape gets shredded when it becomes obvious that society has to become leaner, faster and get a lot of work done.

When do mitigations add up to a solution?

By my terms, never, but perhaps it's an issue of semantics.

For example, if we are already into "tipping point" territory with ACC, (and I believe we are) then everything we do from now on is mitigating the effects of the changing conditions.

I agree with you that the adaptation rate will be a big problem. IMO, the vast majority of adaptation will not be proactive but ad hoc as people and countries are thrust into a new situation.

We are seeing this now in phrasing regarding "reviving" the US economy. It can not and should not be revived because the previous levels were unsustainable and largely illusory.

Real change will not take place until the concept of limits is understood by the majority, and I don't see that happening for quite some time. Until then, we are just rearranging the deck chairs on the Titanic.

I am much more of an optimist since the our government have an institutional memory of past crisises, our goverment do a signficant ammount of proactive things, we got a large ammount of industry and knowlede that are long term relevant and the infrastructure is fairly ok and more important being maintained.

Times are rough but so far I got the feeling that we still control our destiny. Its not about reviving the Swedish economy, its only about keeping the good investments and changes rolling while the free market sort out the details. We dont have to invent a new economy.


Just like ACC, the problems and the response to them will vary widely over the world. I confess that I was speaking from an Americentric viewpoint, where getting any consensus is usually quite difficult.

For example, much of the EU has recognized the seriousness of ACC and taken steps to address it, whereas the USA has engaged in a fractious partisan debate that has wasted a lot of time.

Having worked in Sweden, I know that the Swedish mindset is quite different from North America, so you could likely fare better than other countries through long term thinking that is often practiced in Sweden. Your optimism could be justified.


The costs to produce ethanol exceed the price paid for it. The failure rate of ethanol plants might be compared to the failure rate of Detroit mortgages except the rate of failure of ethanol plants may be higher.