DrumBeat: February 23, 2009

Colonial delays pipeline expansion indefinitely

Colonial Pipeline on Monday announced it had indefinitely postponed plans to expand its petroleum pipeline between Gulf Coast refineries and Atlanta.

Demand for gasoline and other petroleum products is down, making it difficult to project future market conditions, the company said in a statement.

Lower increases in global temps could lead to greater impacts than previously thought, study finds

Princeton, NJ - A new study by scientists updating some of the findings of the Intergovernmental Panel on Climate Change (IPCC) 2001 Third Assessment Report finds that even a lower level of increase in average global temperatures due to greenhouse gas emissions could cause significant problems in five key areas of global concern.

The study, published in the Proceedings of the National Academy of Sciences, is titled "Assessing Dangerous Climate Change Through an Update of the IPCC 'Reasons for Concern."

2008 Was Earth's Coolest Year Since 2000

Climatologists at the NASA Goddard Institute for Space Studies (GISS) in New York City have found that 2008 was the coolest year since 2000. The GISS analysis also showed that 2008 is the ninth warmest year since continuous instrumental records were started in 1880.

European officials go wild with new car incentives for buyers

European governments are giving price discounts directly to buyers of new cars, hoping to stimulate sales for troubled automakers, fuel national economies and replace older, more-polluting cars.

The explosion of simultaneous plans has astonished analysts.

"Europe seems to be going quite mad, launching schemes to help," says Nigel Griffiths, chief auto economist in consultant IHS Global Insight's London office. "Very good job; very fast. All done independently in the past six or seven weeks."

4 ways to fix Detroit - but none are easy

Force a merger? Fund a GM bankruptcy? Allow Chrysler to die? There are no good choices for Washington in dealing with the auto crisis.

Oil prices tumble below $39 despite OPEC cuts

NEW YORK – Oil prices tumbled below $39 a barrel Monday as traders shrugged off reports that OPEC had slashed production, focusing instead on falling stock prices.

Light, sweet crude for April delivery for April delivery fell 4 percent, or $1.59, to settle at $38.44 a barrel on the New York Mercantile Exchange.

Iraq gives Kuwait $13.3 billion in compensation

KUWAIT CITY: Kuwait said on Monday it has received a total of $13.3 billion in compensa-tion from Iraq for the 1990 in-vasion and occupation of the oil-rich emirate by Saddam Hussein's forces.

Woman 'fined' for low power use

An energy-conscious pensioner claims she is being "fined" by British Gas for using too little electricity.

Margaret Pracy, from Brighton, who has a pre-payment meter, made her home as energy efficient as possible and uses only about £5 of power a week.

Now British Gas is to charge her 54p extra a week, because her consumption has fallen below the minimum threshold.

Scores of Australians flee new wildfire flare-ups

MELBOURNE, Australia - Scores of people fled their homes in southern Australia on Monday after strong winds fanned still-burning wildfires, triggering fears of a new wave of destruction after the blazes that killed more than 200 people this month.

The best measure of oil price is what you paid today

Market watchers at the International Energy Agency, for example, have continued to refer to a structural tightness in the oil market and the risk of oil shocks even as the world market is absorbing so much surplus crude that traders are buying the stuff just to store it on the high seas in tankers.

As soon as prices collapsed, researchers wasted no time in predicting the next spike. Some even said it could come within a year.

Those with egg on their face include the head of Total, Christophe de Margerie, who embraced the theory of peak oil and insisted that prices had entered a new paradigm.

Total Won’t Immediately Sign $5 Billion Iran Gas Deal

(Bloomberg) -- Total SA, Europe’s third-largest oil company, has no immediate plans to sign a delayed $5 billion deal for development of Iran’s South Pars natural-gas field, Chief Executive Officer Christophe de Margerie said.

Portugal floats offshore wind farm plan

Portugal has become a prime spot for wave energy farms, given the coastal conditions and the government’s support for renewable energy projects. Now Portuguese energy powerhouse Energias de Portugal has signed an agreement with Seattle’s Principle Power for a deep-water floating wind farm.

Coal-fired utility signs big solar deal

NRG Energy, one of the United States’ most coal-dependent utilities, on Monday signed a deal with California startup eSolar to develop solar power plants.

Peak Oil: why $40 per barrel is no cause for complacency

These days it is comforting to have one thing not to worry about. As the world teeters on the edge of a full-blown depression, and business is crushed between slumping sales and seized-up credit markets, at least the oil price is in retreat. From an historic high of $147 per barrel last July to around $40 today, the price of crude has collapsed so quickly it is tempting to believe it means the end of the energy crisis; that the spike was just some speculative aberration; and that all talk of ‘peak oil’ is so 2008.

It is true that the horizon has been utterly transformed. Last year the big issue keeping many company bosses awake in the small hours was rising energy bills - this year all manner of competing spectres haunt their sleepless nights. But to relegate oil simply because the price has slumped is to misunderstand the causes of the recent spike and collapse, and therefore the future outlook for energy prices and what it means for business and the climate.

Which capitalism will it be?

The crisis in global capitalism demands a revolution in spirit - fundamental change in attitudes and behavior. Reform cannot merely rush parents and kids back into the mall; it must encourage them to shop less, to save rather than spend.

Penalize carbon use by taxing gas so that it's $4 a gallon regardless of market price, curbing gas guzzlers and promoting efficient public transportation.

And how about giving producers incentives to target real needs, even where the needy are short of cash, rather than to manufacture faux needs for the wealthy because they've got the cash?

Gulf countries counting on $204B in projects

Countries of the Middle East’s Gulf Coast will invest $204 billion in oil and gas projects in 2009, or 11 percent more than in 2008, say organizers of October 2008’s OGS 2009 tradeshow and conference.

Some 265 projects are said to be currently underway, either in planning stages or under construction.

Oil prices stay low amid slowdown

World oil demand is expected to average 85.10mn bopd in 2009, a decline of 0.6mn bopd YoY. The decline in OECD oil demand is expected to outweigh demand from Non-OECD countries. World oil demand growth will come largely from China, Middle East and other Asia. These countries will make up for 78.0% of Non-OECD growth, according to OPEC. In 2008 high oil prices and removal of subsidies in the first seven months and economic crisis in the second half led to oil demand destruction. The gloomy economic outlook for 2009 with major world economies in recession is expected to lead to a further decline in oil demand. The US unemployment rate has reached 7.6% while major Asian economies are facing a major decline in export revenues.

OPEC cutback fends off 20-dollar fall: Kuwaiti official

KUWAIT CITY (Xinhua) -- Recent output cuts of the Organization of Petroleum Exporting Countries (OPEC) have thwarted a looming price slump of 20 dollars per barrel, a Kuwaiti oil official said here on Monday.

"But for OPEC cut decisions, oil prices could have slipped to 20 dollars per barrel," Nawal al-Fezeaa, Assistant Undersecretary of the Kuwaiti Ministry of Oil, told the official Kuwait News Agency (KUNA).

Reform, regulation in focus at Nigeria oil meet

ABUJA (Reuters) - Oil and gas investors are looking for clarity from Nigeria on long-awaited energy sector reforms and reassurance about its regulatory environment at a major industry conference starting in Abuja on Monday.

Treasury mulls options for GM, Chrysler

Obama administration says that all options - including bankruptcy - are being considered for the struggling automakers.

Alaska: Governor backs off renewable energy support

Gov. Sarah Palin has trimmed back her support for renewable energy in the face of declining oil revenues, but the Legislature is still pushing forward with last year's proposed projects.

UK: CPA blasts energy firms on insulation failure

Andrew Warren, director of the Association for the Conservation of Energy, says energy companies have only been insulating 575,000 cavity walls a year, rather than the 950,000 the government had expected.

Instead, many energy companies are meeting emissions targets by other means, such as by sending out low-energy light bulbs.

Slice of Stimulus Package Will Go to Faster Trains

It may be the longest train delay in history: more than 40 years after the first bullet trains zipped through Japan, the United States still lacks true high-speed rail. And despite the record $8 billion investment in high-speed rail added at the last minute to the new economic stimulus package, that may not change any time soon.

Outsmarted by the Smart Grid?

Let’s go back and examine these issues one at a time. First, start with the premise that the smart grid will enable us to redistribute energy consumption throughout the day. It’s fitting that the girl is standing in front of a clothes dryer because that and washing dishes are the only examples anyone has ever been able to come up with about how residential users are going to “redistribute” their energy consumption.

What else can they do? Are they going to wait until after midnight to watch television? Are they going to heat up dinner at 4 a.m.? Are they going to turn on lights at sunrise instead of when it gets dark? And how about air conditioning, that most voracious consumer of electricity? One suggestion floated by the Electric Power Research Institute (EPRI) in “The Green Grid,” a study published last June, is that people might “pre-cool” their homes by running the air conditioning in the morning in anticipation of hot afternoons. This may indeed level peak loads. But it will also consume more energy, since some of the pre-cooling will obviously dissipate.

There’s one more thing about drying your clothes at 10 p.m. Have you ever noticed what happens if you leave wet clothes sitting in the washer? They start smelling a little moldy, don’t they? Maybe this idea about drying your clothes just after you wash them isn’t such a bad idea…

Cuts at power companies raise red flags about reliability

Utilities are aggressively cutting spending on new power plants and wires, raising concerns about higher prices or electricity shortages when demand rebounds in a year or two.

Utilities and independent power suppliers plan to shave capital budgets 10% in 2009 and 2010, according to Edison Electric Institute, the industry trade group. The 2009 cuts could total 20% by year's end, says Larry Makovich of Cambridge Energy Research Associates.

"When the economy rebounds, electric power is likely to rebound at the same time and quite strongly," he says. "We have a legitimate concern there's going to be a price to pay."

Unitil clients: We've had enough - Storm response highlights years of anger for some

It wasn't just the December ice storm.

There were the lofty salaries for executives and the record earnings of $8.6 million the company reported two years ago while customers were paying the second highest electricity rates in the state.

That, on top of the years of unanswered complaints about broken poles and overgrown tree limbs threatening wires. Residents in Greater Fitchburg still clearly recall the hardships they faced a decade ago when a similar storm left them in the cold and dark, some as long as a week.

Oil rises on views US may step up banks rescue

VIENNA – Improved confidence in financial markets, helped by reports the U.S. government may increase its ownership in Citigroup, boosted oil prices above $40 a barrel Monday despite a steady stream of bleak corporate and economic news.

Aramco-Shell Saudi refinery resumes exports

DUBAI (Reuters) - Saudi Aramco and Royal Dutch Shell's joint venture Jubail refinery restarted oil exports on Monday after bad weather interrupted the flow for four to five days, shipping sources said.

Exports across the Gulf had restarted on Monday after bad weather disrupted crude flows from Iran and Kuwait. Refined product exports from Iran, Kuwait and Saudi Arabia were also interrupted.

Kuwait restarts oil exports after storm disruption

KUWAIT (Reuters) - Kuwait resumed oil exports on Sunday after a halt caused by adverse weather conditions, which also affected Iran, a spokesman of a Kuwaiti state oil company said on Sunday.

Opportunities for Iraq

The recent trip to Iraq by President Nicolas Sarkozy of France was a good omen for Iraq and also for America. Sarkozy was candid about his aims. "I came to show France's willingness to take part in the economic development of Iraq, in the rehabilitation of its infrastructure," he said. Left unsaid was a desire to make sure the French oil company Total - which once held contracts with Saddam Hussein - will be given consideration as Iraq begins writing new contracts with foreign oil companies.

This ulterior commercial motive is precisely what makes Sarkozy's Iraqi sojourn a positive sign. It says that government analysts have begun to see the light at the end of the Iraqi tunnel. Their interest confirms that security has improved markedly and that Iraqis are starting to resolve their differences by political means. Sarkozy's visit means that France sees Iraq as a sound investment opportunity.

BP, Shell Net to Fall More Than Peers, Barclays Says

(Bloomberg) -- BP Plc and Royal Dutch Shell Plc, Europe’s largest oil companies by market value, will suffer bigger profit declines than peers as crude prices stay near lows, according to analysts at Barclays Plc.

What we are not told about oil prices

Gasoline prices keep going up and the price of oil goes down. Obviously this is a sign that big oil companies are gouging us. Ask any Democrat politician, ask President Obama, read any newspaper, watch CNN, NBC, ABC,CBS and MSNBC, they will all say the same thing. In fact, ask your neighbor, he will also tell you the oil companies are fixing oil prices and gouging the public. Why not, no one explains oil prices so what else is one to believe?

Forties Crude Declines After BP Sells Total a Second Shipment

(Bloomberg) -- North Sea Forties crude fell after BP Plc, Europe’s second biggest oil company, sold Total SA a second shipment in as many days.

A cargo of Forties loading in 10 to 23 days cost 5 cents a barrel less than Dated Brent, according to data compiled by Bloomberg. That compares with a premium of 13 cents on Feb. 20.

Saudi to halt fuel oil exports 3 mths ahead: trade

SINGAPORE/DUBAI - Saudi Aramco will halt fuel oil exports three months ahead of the start of summer, due to swelling demand for power generation fuels and tighter gas supplies, industry sources said on Monday.

The world’s top oil exporter is also expected to import the residual fuel at the start of the second quarter-between two and four cargoes a month over the summer-as supply of alternative utility fuels tightened, they added.

Diesel to Dip Below Gas as Valero Output Rises, Aiding VW Jetta

(Bloomberg) -- Diesel is falling below gasoline after two almost uninterrupted years of selling at a premium as the global recession saps demand for the world’s most-consumed transport fuel and inventories rise.

China loan turns Russian oil east

For China in the medium to long term, according to one Russian bank, the new deal will "provide an impetus to massive development of Eastern Siberia" from which China is best placed to benefit. "We believe that two options are possible: greater [Chinese] access to the East Siberian fields (currently two upstream projects via a joint venture with Rosneft) and the potential transformation of East Siberian Pacific Ocean pipeline network into a joint stock company, with China getting 49% or 50% control in it."

If the latter materializes, that would give Beijing a control stake in an oil port to be built at Kozmino Bay, near Nakhodka, on the Sea of Japan.

China prepares to buy up foreign oil companies

China is preparing to open a new phase in its race for the world's resources by using its huge currency reserves to buy foreign oil and gas companies.

BP freezes managers' pay as employers cut budgets

BP has become the latest large UK company to implement a pay freeze, The Times has learnt.

The salaries of virtually all the senior and middle managers who work around the world for Britain's largest company by market value will be the same in 2009 as they were in 2008.

Pa. may reveal secrets in gas shale rush

HARRISBURG — Three decades ago, environmentalists and public officials rang the alarm when the price of fossil fuels shot up and drilling companies descended on western Pennsylvania's oil and gas fields in search of paydirt.

The state Legislature responded with the 1984 Oil and Gas Act, which forced the companies to comply with strict new environmental standards — but also handed them a cushion that allowed them to keep secret most information about their below-ground discoveries for five years.

Now, with a fresh wave of exploration companies flocking to Pennsylvania in pursuit of natural gas in the sprawling Marcellus Shale rock formation, state legislators are considering peeling back that cloak of secrecy.

Kuwait likely to weaken dinar to boost budget

Kuwait is expected to continue to depreciate the dinar against a strengthening dollar to help stimulate the Gulf Arab state's economy by boosting oil revenues, economists said yesterday.

The Opec member has let the dinar fall below the levels of its old peg to the dollar to offset a recent rise in the dollar and support government efforts to shore up the economy.

Swans Commentary: Blips #81

WHICH BRINGS ME BACK to the Doomsters. Some welcome the chaos in the making in the name of the famed "socialist revolution," but others, often located in the U.S. -- people who have made a business (often profitable) of predicting doom and gloom -- lend a hand to the repressive times ahead. People like James Howard Kunstler, Jay Hanson of dieoff.org fame, Jan Lunberg of "Cultural Change," Dale Allen Pfeiffer of Surviving Peak Oil, conspiracy theorist Michael Ruppert of From the Wilderness, Matt Savinar of Life After the Oil Crash, are just a small sample of that notorious crowd.

ONE TO PARTICULARLY ENJOY is Dmitry Orlov, who for years predicted the collapse of the former Soviet Union and is now predicting the same outcome for the U.S. Orlov's recent speech given on February 13, 2009, at the Long Now Foundation -- a bunch of new/old-age do-gooders -- in which he claimed "that all the [support] systems and institutions that are keeping us alive [are crashing]." Says Orlov: "Forget 'growth,' forget 'jobs,' forget 'financial stability.' What should their [the policy makers] realistic new objectives be? Well, here they are: food, shelter, transportation, and security." Orlov goes on with a mind-numbing rant that includes getting a tiny chunk of land to grow food and an AK-47 for security. Notice that health care and education are not a part of his program... One should read the entire diatribe, "Social collapse best practices," to get a clear picture of today's face of reaction. Gloom and doom, it actually is -- and utterly socially irresponsible.

Economic crisis bodes well for electric cars

ANALYSIS: The next five years is likely to see the rapid development and deployment of new vehicle technology in the context of favourable policies taking shape in the United States, Europe, China and Israel . While the global recession, credit crunch and low oil prices will act to slow investment across the economy, aggressive industry policy to support electrification will help cushion manufacturers of electric and other highly efficient vehicles from the recession's effects.

China's Chery Auto unveils electric car: company

SHANGHAI (AFP) – China's largest independent carmaker Chery Automobile rolled off its first plug-in electric car this week, the latest Chinese automotive company to produce an alternative energy vehicle.

The all-electric car, S18, can go up to 150 kilometres (93 miles) on one charge and has a maximum speed of 120 kilometres (72 miles) an hour, the company said in a statement.

Tokyo Electric to build solar plant in California: report

TOKYO (AFP) – Tokyo Electric Power Co. will build a solar power plant in the US state of California through its subsidiary Eurus Energy Holdings Corp., according to a report.

Iraq invites France back to build nuclear plant

BAGHDAD, (AFP) – Electricity Minister Karim Wahid on Sunday invited France to help Iraq build a nuclear power plant, three decades after Paris constructed a reactor near Baghdad that was bombed by Israeli warplanes.

U.S. Biodiesel Said to Face European Union Tariffs by March 13

(Bloomberg) -- The European Union plans to impose tariffs on U.S. biodiesel to protect EU producers from American subsidies and price undercutting, said two people familiar with a case that threatens to heighten trans-Atlantic trade tensions.

Developers say biodiesel project still alive

Although they have not provided regular updates to town of Montezuma officials as once promised, the developers of a proposed biodiesel plant in the town said last week that their project is still on solid ground.

“The news is there is no news,” said David Colegrove, president of the Auburn BioDiesel Corp. “We haven't had any news to release.”

Colegrove's statements followed a town meeting days earlier when residents expressed concern about the viability of the project, given the lack of communication coming from the owners.

Can Geothermal Power in Iceland Thaw a Frozen Economy?

Iceland hopes to use its geothermal resources to innovate its way out of the financial crisis.

Australia: Tensions boil over on climate change

Tensions over climate change have boiled over, with an angry Nationals senator berating a senior public servant during a parliamentary hearing.

Senator Ron Boswell, concerned that emissions trading will cost jobs, lashed out at the bureaucrat after he tried to say the cement industry would not be decimated by the scheme.

"You are a bureaucrat that's never been in the market in your life," Senator Boswell barked.

Ending a climate of inertia

Less than a month into the job, Lisa Jackson, the new administrator of the Environmental Protection Agency, has already engineered an astonishing turnaround. She has pledged to reverse or review Bush administration directives that had slowed the government's response to global warming and has brought a new sense of urgency to an issue that President George W. Bush treated indifferently.

Ministers get close look at Antarctic ice threat

TROLL RESEARCH STATION, Antarctica – A parka-clad band of environment ministers landed in this remote corner of the icy continent on Monday, in the final days of an intense season of climate research, to learn more about how a melting Antarctica may endanger the planet.

Representatives from more than a dozen nations, including the U.S., China, Britain and Russia, were to rendezvous at a Norwegian research station with American and Norwegian scientists coming in on the last leg of a 1,400-mile (2,300-kilometer), two-month trek over the ice from the South Pole.

U.S. Climate Change Science Program Must Focus on Health, Experts Say

WASHINGTON, Feb. 23 /PRNewswire-USNewswire/ -- The U.S. Climate Change Science Program (CCSP) must make public health a strong focus as it undergoes an internal reorganization under the Obama administration, say leading medical experts, health and environmental groups.

A memorandum signed by 22 medical experts and 10 groups recommends that CCSP correct the program's historic "relative under-emphasis... on human health and human dimensions in general" and instead address "the important and growing gaps in knowledge and practice."

US Climate Czar: CO2 Regulation Ruling To Come Soon

WASHINGTON -(Dow Jones)- President Barack Obama's climate czar said Sunday the Environmental Protection Agency will soon issue a rule on the regulation of carbon dioxide, finding that it represents a danger to the public.

The White House is pressing Congress to draft and pass legislation that would cut greenhouse gases by 80% of 1990 levels by 2050, threatening to use authority under the Clean Air Act if legislators don't move fast enough or create strong enough provisions.

Simply Hoping That Humanity Will Save The Environment May Do More Harm Than Good, Experts Argue

ScienceDaily — Do you "hope" that everyone will see the light and start living more sustainably to save the environment? If so, you may be doing more harm than good.

So say an environmental scientist and an environmental ethicist in a provocative essay in the journal, The Ecologist. John Vucetich, assistant professor of animal ecology at Michigan Technological University, and Michael Nelson, associate professor of environmental ethics at Michigan State University, challenge the widespread belief that hope can motivate people to solve overwhelming social and environmental problems.

Re: Outsmarted by the Smart Grid?

The writer is being intentionally deceptive. It doesn't take much effort to schedule major loads to run during non-peak hours. For those not overly concerned about the cost of electricity, continue to use it whenever and however you want, but for those who want to save money on their utility costs, TOU rates are the sensible choice.


Ohio is one state that has "smart meters." I have a friend who lives near Youngstown, and she does try to wash the dinner dishes after 9pm. She turns on the dishwasher before she goes to bed.

But aside from that, I kind of agree with the article. She has a large family, so must wash the breakfast and lunch dishes during the day. It is icky to leave clothes in the washer wet (and you have to wash them in the morning if you want to put them on the clothesline rather than use a dryer). The major load for most people is the fridge, and no one's going to turn that off during peak hours.

Me, I don't have a large family so I could wash a whole day's dishes at night. But other than that, I don't know what I could shift. Maybe heavy-duty computing, when I render the occasional animation (but I usually do that at night anyway, so it doesn't tie up the computers when I'm awake).

Hi Leanan,

For large families that run their dishwashers two or three times a day, the adjustment will be no doubt more difficult. We have a dishwasher, but it takes about four days for the two of us to fill it, so I simply wash dishes by hand.

Our front load washer has an eight-hour time delay option so I could set it to have the washer come on an hour before the peak rate period begins. For machines that don't have built in timers, you can buy yourself a basic wall timer for $5.00 at a garage sale or thrift store and plug your clothes washer into that. Note that washing machines use very little electricity, unless you wash your clothes in hot or warm water and you heat your water with electricity.

The major load for most people is the fridge, and no one's going to turn that off during peak hours.

Refrigerators are not generally the largest electrical load in your home. Ours is rated at 476 kWh/year (1.3 kWh/day) and my Kill-a-watt meter indicates that our daily consumption is about 25 per cent below that. In any event, since refrigerators operate 24 hours a day, more than half this electricity will be consumed off-peak. There's a very good chance that the operating costs of your refrigerator will be lower under TOU rates than standard domestic service.


You still haven't said what major loads could be easily shifted to off-peak hours.

On our electric co-op, for a very small break, our geothermal heat pump is off from 2-3 PM and from 4-5 PM. They supplied the controls and wired them up. The difference is only slight, as we have a very tight house and LOTS of insulation, plus triple pane argon windows. For people who work outside the home, they wouldn't feel any difference, but if I come in early and am really hot and sweaty, I usually take a shower first anyway, and cold water at the end of that will wake me up and cool me off. It would be nice to have a cold house, but I don't keep it cold anyway. I installed a two stage system, which usually runs on 1 1/2 tons for a 1700sq foot house, so the humidity is pretty low except on really hot days when both segments are running.

Oklahoma recently adopted DSM rules, but the specific plans have not been presented and either approved or denied, except for some quick start provisions. The utilities will make a few bucks, but the overall reduction whould be significant, both in dollars and in KWH.

But the vast majority of Americans don't have geothermal heat pumps. And probably most people who aren't at home during the day leave the aircon off anyway, if they're at all concerned about costs.

I have the thermostat set to 80 from 9:30 AM until 4 PM when the A/C is operating, and the heat set to 62 for the same hours when the heater is on. It makes more difference when it is on the weekend schedule. Oklahoma can be really hot if the A/C is off completely, and even with 6" SIPS panel construction, it takes a while to cool down. It needs to operate occasionally for the heat exchanger to swap out the stale air (and moisture).

I don't think most people in Texas, or the Sunbelt in general, leave the A/C off during the day. The house would burning hot when you got home. I leave mine at 78 or 80 and the A/C still runs very, very frequently. I'll be adding insulation this spring, after I get a couple of things taken care of in the attic, and we will see what that does. I'll bet there are millions of homes like mine that would benefit greatly from steps like this and TOU policies should prod people to think about these things.

Many of the homes built in the south have been built with northern designs as their basis. Old southern homes tended to have recessed windows, deep overhangs over windows, wrap around porches, deliberate airflow pathways to maximize cooling via natural flow, etc. Most of these design lessons were lost in favor of mass construction of designs that originated much further north. Most existing homes in the south are simply not well suited to this climate.

Retrofitting is about the best you can do but if the option appears to purchase an older home with more traditional southern design considerations, and if you can afford to make that jump, that might save you more money than retrofitting. Another option would be to build new but with a design intended for the climate, as opposed to having been imported for mass manufacture.

I would operate our dishwasher, clothes washer and dryer off-peak; the dishwasher has a time delay option that allows us to run it overnight if we so wish and I generally do laundry on weekends which are off-peak all day. I would also place our electric water heater under timer control so to lock-out its operation during peak hours and run our dehumidifer, which draws 750-watts, off-peak as well.


Well, the article did name washing dishes and clothes as candidates for shifting. According to the EIA, humidifiers and dehumidifiers (together with ceiling fans and evaporative coolers) are less than 2% of household energy use. (I would guess most people don't even have dehumidifiers.)

The water heater...if people aren't home to use hot water, they could just turn it off. (My parents used to do that.) If they are home, I can't see many people doing that, no matter the differential.

So far, the article looks dead-on accurate to me, not misleading at all. Washing dishes is really the only thing that can be easily shifted...if you have a dishwasher. And I suspect a lot of people already run their dishwashers at night. They tend to be noisy, which is a pain if you're downstairs watching TV in the next room. So people run it later at night, when the family is upstairs in the bedrooms and can't hear it.

For people who don't have or don't use dishwashers, and people who wash their clothes in apartment laundry rooms or laundromats...there's little incentive for them to shift their usage.

Dehumidifier use will obviously vary by climate, but next to our heat pumps it's the single largest consumer of electricity in our household, by far.

Electric water heaters will often run during the early morning hours to recharge after showering, and you can theoretically shift that load to non-peak times through timer control.

Most MURB laundry rooms and presumably all laundromats are on commercial service, so residential TOU rates would not apply.


In the US, dehumidifier use is negligible.

Electric water heaters will often run during the early morning hours to recharge after showering, and you can theoretically shift that load to non-peak times through timer control.

Only if you're not planning to use hot water during the day.

Most MURB laundry rooms and presumably all laundromats are on commercial service, so residential TOU rates would not apply.

Commercial users are more likely to be offered differential rates than home users, but for something like laundromats, they probably won't do much good. As with carwashes, there are security concerns.

I think the article is right. Load-shifting doesn't decrease usage, and some cases, would increase it. Given the limits we are facing, I don't see this as particularly worthwhile.

In the US, dehumidifier use is negligible.

OK, we'll take dehumidifers off the table. :-)

Only if you're not planning to use hot water during the day.

If most of us are away at work during the day, there should be no real issue. In addition, most water heaters have enough storage capacity to supply a household with hot water during peak hours.

Commercial users are more likely to be offered differential rates than home users, but for something like laundromats, they probably won't do much good. As with carwashes, there are security concerns

Residential and commercial customers are served under two very different rate structures -- the former is normally charged for energy alone and the latter demand and energy. Commercial customers already have an incentive to shift load to their non-peak times, i.e., flatten their load curve, because of these demand related charges.


Electric water heaters kick on whenever the thermostat calls for heat and if you shower in the morning and the tank refills with cold water, how do you prevent the elements from cycling on unless you lock them out with an external timer?

If no one will be home, you can turn off the water heater. This is what my family used to do. OTOH, if you are going to be home, you want hot water to use during the day.

Residential and commercial customers are served under two very different rate structures -- the former is normally charged for energy alone and the latter demand and energy.

It's a real mish-mash in the US. You may be charged differential rates depending on time of day, your total usage, time of year...or not. In my area, there's no mandatory smart metering, but people who use 75% of their electricity during off-peak hours can get a discount. There are similar programs for commercial users.

If no one will be home, you can turn off the water heater. This is what my family used to do. OTOH, if you are going to be home, you want hot water to use during the day.

Well, a timer control will handle the first scenario seamlessly without the need for daily human intervention. The second scenario with the customer staying at home shouldn't be a problem either. The two standard size electric water heaters found in most Canadian homes hold 180 and 270 litres of hot water (the closest American equivalents are 50 and 80 gallons respectively). That should be sufficient to allow us to ride through to the next off or shoulder peak -- NSP's daytime shoulder peak rate, which is the same as it regular domestic rate, runs from 12h00 to 16h00 so there's a four hour window of opportunity to recharge the tank before the second on-peak period kicks in.

It's a real mish-mash in the US.

No doubt. I suspect most commercial customers are simply charged demand and energy, with TOU as an option. In any event, the focus of the article is residential customers, not commercial or industrial users.


Well, a timer control will handle the first scenario seamlessly without the need for daily human intervention.

Yes, but you can do that without time of use pricing.

NSP's daytime shoulder peak rate, which is the same as it regular domestic rate, runs from 12h00 to 16h00 so there's a four hour window of opportunity to recharge the tank before the second on-peak period kicks in.

Off-peak hours vary a lot here. In some areas, it's 1am to 7am. For my friend in Ohio, it's 9am to 9pm. She's pretty frugal, but would not turn off the water heater during those hours.

In any case, I think Mr. Tucker is right. Time of use sounds like a better argument for solar power than for differential pricing.

Yes, but you can do that without time of use pricing.

I could, but I'm trying to imagine why I would if there's no economic incentive. I would definitely lock-out its operation during peak times if I knew I was paying a premium, but with a flat charge per kWh, regardless of the time of day, what's the point?

Off-peak hours vary a lot here. In some areas, it's 1am to 7am. For my friend in Ohio, it's 9am to 9pm. She's pretty frugal, but would not turn off the water heater during those hours.

Understood. Nova Scotia Power's TOU schedule is available at: https://www.nspower.ca/documents/heatingbrochures/Time%20of%20Day%20Rate...

The schedule for the Province of Ontario, which will be exclusively TOU shortly can be found at: http://www.oeb.gov.on.ca/OEB/For+Consumers/Understanding+Your+Bill+Rates...

I trust most utilities/PUCs try to structure these rates so that they achieve their goal with the least amount of pain; no doubt, some are a little better in that respect than others and a 9:00 am to 9:00 pm peak without an interim shoulder seems a tad harsh.


I could, but I'm trying to imagine why I would if there's no economic incentive. I would definitely lock-out its operation during peak times if I knew I was paying a premium, but with a flat charge per kWh, regardless of the time of day, what's the point?

The water heater is on less, so electricity consumption is lower, so your bill is lower.

That is why my parents did it. There was no differential in pricing.

As an engineer, I'm sure you could easily calculate the amount of electricity that this would save with a high degree of accuracy, but I'll ask this question in a general way... As a rough guess, how much electricity would be saved if your parents shut down their water heater for an average of eight hours per day? (You can adjust the length of time the tank is turned off as would be required.)


It was longer than eight hours. They'd turn it off at around 10pm when they went to bed, and on when they got back from work in the evening.

This was Hawaii, where cool water in the morning is pleasant, and people traditionally shower in the evenings, not in the morning.

The article on "Smart Grids" is confusing the goals of smart grids with the goals of "peak/off-peak " variable pricing.
Variable "time of day" pricing is design to get individuals to use some appliances(dishwashers, cloths dryers ) during off peak periods to help to reduce the anticipated peak load.

Smart Grids can do this as well by for instance cycling refrigerators with more off minutes than on minutes during peak periods. The real value of smart grids is the ability to modify real time demand, that cannot be done by individuals, or timers.For example if a power generator drops off-line, the smart grid can turn off ALL refrigerators, AC, hot water heaters for 5 minutes, until new power can come on-line, or so that a heavy industrial user is given a 5 min warning before they are dropped off. The alternative is to have rolling blackouts, but then even low power uses for example lights, TV, fans are also off and everyone is inconvenienced.
The real value of smart grids will be when millions of PHEV's are in use and plugged in at home and at work. This will allow a smart grid to "borrow" a small amount of power(5%) during a power supply problem or at peak load period and "repay" later. A really smart grid would be able to calculate how much charge each PHEV will need to get home, and only borrow less than this amount, returning it all during the off-peak evening charge.
Statements about the smart grid such as " I don't want to come home to a hot house" or "I don't want my PHEV to have no charge when I leave work" are just showing the lack of understanding of the "smart grid" concept.

The article on "Smart Grids" is confusing the goals of smart grids with the goals of "peak/off-peak " variable pricing.

Actually, I don't think it is. It's arguing that the GE ads are confusing them.

William Tucker's article starts off acknowledging the originators of the "Smart Grid" Al Gore ....., but then attacks this concept by introducing the GE add and confusing the smart grid concept with "Smart Meters" , you seem to have fallen for that misdirection; quoting from you above;

"But aside from that, I kind of agree with the article........ The major load for most people is the fridge, and no one's going to turn that off during peak hours."

Tucker further goes no to claim that a "smart gird" cannot reduce power or help to integrate renewable energy.
This is what Al Gore had to say about an "integrated smart grid" at the Web2.0 summit

"The Solution: Modernize and expand the infrastructure for moving electricity from where it is generated to where it is needed through a unified national smart grid. Make that grid ‘smart’ so that it can monitor and balance the load, accommodate distributed energy from local areas and, in the near future, capitalize on a massive national fleet of clean plug-in cars. This new grid encompasses both the long-distance, high-voltage transmission lines and the lower voltage distribution systems that connect the power to customers.

The Benefits: Updating our grid with advanced transmission will save money, increase reliability and protect consumers from outages, and make possible a clean electricity system. It will move renewable power from where it is generated to wherever it’s needed, whenever it’s needed. Just like the interstate highway system and railroads before it, investing in modernization of the grid will create thousands of jobs for American workers".

Tucker further uses the visual of the GE add to scorn the concept of a "smart grid";
"It’s fitting that the girl is standing in front of a clothes dryer because that and washing dishes are the only examples anyone has ever been able to come up with about how residential users are going to “redistribute” their energy consumption."
Well, you have come up with another big energy user, the fridge, but miss the point that the "smart grid" is smart because it can reduce your fridge's electricity use during peak times by longer times between compressor cycling.You don't have to turn the fridge off, or start the dryer after 10pm, the grid modifies energy use( ie reducing power consumption) not necessarily turning off( that's why is called "smart").

you seem to have fallen for that misdirection; quoting from you above;

I was responding to HereInHalifax. He was talking about the time of use element of the article, and that was what I was responding to.

That was actually just a small part of Tucker's article. He also says:

But these are different things. The true “smart grid” will be a digitalized distribution system that conveys real-time information. Incorporating remote wind and solar, on the other hand, will require an upgraded grid, something entirely different. Our present 345-kilovolt AC transmission wires can’t do it without unacceptable line losses. We will need to rebuild to 765-kilovolt DC system – something that could take decades and easily cost several trillion dollars.

One has very little to do with the other. However, they are often described as the same thing.

Since the winds amy change speed or direction without notice, a smart grid is needed when there is a large percentage of wind power generation connected to the grid.

If we don't move to TOU rates and implement smart(er) grid technology -- and I personally think we need both -- what's the likely outcome? Can we continue to invest tens or hundreds of billions of dollars in expanding and reinforcing our power systems? Would it not be better to properly manage demand than to simply respond to it and, in the process, better utilize what we already have in place?

Right now, a residential customer can come home from work and turn on the oven to make dinner (3.5 kW), throw a load of laundry into the washer, triggering the electric water heater to kick on (4.5 kW) and perhaps run another load through the dryer (4.5 kW), while their CAC is blasting away (4.0 kW). All of this happening when electricity is in critically short supply and the utility is importing power from its neighbours at $1,500.00 or $2,000.00 per MWh.

With the proper price signals, our customer may decide to shift some of this load off-peak (their call) and with an intelligent grid, if the water heater, CAC and dryer are all operating at the same time, we can at least balance the loads so that they play nicely. All of this can be completely transparent to the customer with little or no degradation in service.


I know I'm not the one you asked. I don't think it is so easy to determine. The water heater has two costs, standby costs, which one would expect to be proportional to the temperature difference between the water temp, and the environment the WH is in is the only one you are affecting. There might be some variation in the heating efficiency, depending upon how long a thermal pulse is needed, as well. And turning it back on would imply a fairly long reheat pulse. That might be good, or might not. I suspect this second effect probably only applies to gas heaters, as electrical heating elements are presumably inside the insulation.

A less drastic step would be to set back the WH thermostat during the day. That would clearly reduce standby loses, and you can time the reheating pulse.

I'm curious. If you turn off your water heater for, say, 8 hours and then turn it on again, wouldn't the heater have to run for awhile to get the water back up to temp? How does the energy for reheating the water everyday compare to what you would have used keeping it warm during the day?

I've seen similar efforts to compare air conditioner use that suggested doing anything more than raising the day time temp by 2-3 degrees actually wound up using more electricity when you kicked in the lower temps at the end of the day.

And then there is my co-worker who is upset and "challenging" his water bill of $250 dollars for December - seems he used nearly 50000 gallons that month - watering his lawn, he says.

Turning off your water heater for eight hours, especially if the water is below its normal set temperature due to prior usage, should save a tiny amount energy due to slightly lower standby losses; it would never take more energy to reheat that water after an eight hour shutdown than would be consumed if it were to operate freely.

The actual runtime upon resumption of operation will be determined by the wattage of the elements, the volume of the water to be reheated and the difference between the current temperature of the water and its set temperature. Assuming a 4,500 kW element, a 270 litre/72 US gallon tank and a 15C/27F temperature rise, you're looking at approximately one hour recharge time.


"I'm curious. If you turn off your water heater for, say, 8 hours and then turn it on again, wouldn't the heater have to run for awhile to get the water back up to temp? How does the energy for reheating the water everyday compare to what you would have used keeping it warm during the day?"

Thermodynamics can help with assessing this situation. The greater the temperature differential between the desired temperature of the water and the ambient temperature (of course insulation of the water cylinder comes into this, too), the more energy is required to maintain it there. Switching off the cylinder and leaving it to cool overnight, when the temperature differential is greatest, is advantageous.

Maintaining the water at a given high temperature when the ambient air temperature is cooling is going to trip the thermostat and light the burner/element more often.

Another way of looking at it - let's say you're going on holiday for a week - would you think it'd be cheaper to leave your home's thermostatically-controlled heating on all week than to turn it off and restart it on your return?

When we had our 3-day outage after the ice storm, our 80-gallon electric water heater was unheated for the duration. We used little hot water during that time, but it remained quite hot. Our unit was installed in 2001 and has R17 foam insulation inside. When we go away on vacation I simply turn the breaker off, and it seems to save quite a bit.

The big question is with a recovery rate of 88 gallons/hour, or about an hour to reheat the entire volume, why does it have a duty cycle of about 13% - 3 hours/day of "on" time - which changes very little whether or not we are home and using hot water. This equates to 14 kWH/day, and seems like an awful lot just to make up for standby losses.

So yes, an off timer makes a lot of sense. It could stay off most of the night without affecting our family.


This is a bit of an offbeat comment but I'll just stick it in here.

I keep our water heaters on timers as well (it's a dual house), with them only on fairly briefly in the evening (hawaii). But what's saved isn't just a matter of how much heat is lost through the heater insulation during the day.

In the house adjoining, which I don't own, many of the faucets are of the single-stickshift variety rather than a hot and a cold knob. It makes me nuts, but 99% of people just push the handles straight back for a 50/50 mix of hot and cold water when they're washing their hands or rinsing something. Usually the hot water doesn't even have time to make it through the pipes, and when it does it's not noticed by them.

My repeated demonstrations of proper use of a faucet control are not well received.

I shudder to think how many tons of CO2 are injected into the atmosphere annually due to this peculiar intersection of ergonomic design and human cluelessness.

Thus, having the water heater off during the day means we're not heating as much wasted hot water. I'm replacing the faucets with dual-control ones as they break, but have been prevented from doing it by fiat. Of course all faucets at my place are H and C.

I installed a tankless hot water heater which uses natural gas. My natural gas usage is down plus we never run out of hot water when we need it. I suspect traditional hot water heaters will soon be a memory with tankless becoming the dominant form and the only remaining tanked hot water systems being solar.

I suspect traditional hot water heaters will soon be a memory with tankless becoming the dominant form and the only remaining tanked hot water systems being solar.

Will all electric water heaters be tankless too? I shiver at the very thought.


I have assisted a number of homeowners in installing tankless gas hot water heaters. Special considerations (large enough gas supply, higher grade flue mainly), but I see tankless GAS hot water heaters as clear "good things".

Electric tankless hot water heaters not so.

"Standby" heat losses from the tank are avoided with both types, but gas systems can easily accept "peak demands" for more gas for hot water. Our electric grid is not so resilient. A massive switch to electric tankless water heaters will probably increase peak demand, with adverse consequences for the grid & system.

Best Hopes for People knowing the difference (as Paul does),


For sure. As I've said before, I'm convinced there's a special place in hell reserved for electric tankless water heaters, right next to the 110-volt electric dryers. I'll report back to everyone upon my arrival. :-)


I disagree with your position that dehumidifier use in the US is negligible: I have found it to be a large portion of our summer electrical use. After some effort, my wife and I have managed to get our home electric load below 10 kW-hr per day, averaged over the last year. We hang most of our clothes to dry, have replaced nearly all of our old light bulbs with CFL's, almost never use the A/C, and generally try to minimize waste wherever possible. However, the dehumidifier is a real power hog, and if I don't use it fairly regularly for 2-3 months in the summer, the basement suffers. I'm not eager to risk a mold problem downstairs, so I swallow hard and let it run when the dew point climbs above 60 or so. In rough numbers, it probably represents 30% of our summer electrical load, and it is the primary reason that we see the monthly averages (kW-hr per day) spike in July and August.

But how many people actually use dehumidifiers?

According to the EIA, "Other HVAC-related appliances—ceiling fans, dehumidifiers, humidifiers, and evaporative coolers—all together accounted for less than 2 percent of U.S. electricity consumption."

But many in the US use A/C, and a very substantial part of the cooling effort is dehumidifying the conditioned air. Anytime you strive to cool the air you have to cool the water it contains, which isn't too bad, but when you try to cross the dew point (which you will, when you're getting the coils down close to freezing) you have to condense the corresponding fraction of the water out of the air, and carry away the latent heat that is released.

That is one key reason that limiting air infiltration helps on those hot, muggy days. It's also why running a bathroom vent to remove humid shower/bath air makes sense.

In the winter adding water with a humidifier costs energy too, and you have to evaporate (effectively boil away) all the water that goes into the air to get the humidity up where you want it. In really dry (desert) climates the same mechanism makes swamp coolers 'work' to cool a house - it's a benefit instead of an issue.

Separating the humidity control functions from the temp control functions is possible as well. Dessicant wheels can turn summer solar heat into dehumidification, for example.

Interesting idea, but it's a whole different kettle of fish from time of use pricing.

It reminds of something my sister told me about northern California, though. She almost never has to use her aircon, despite summer temps regularly going well above 100F. Her house is oriented to take advantage of the winds that arise every evening as soon as the sun goes down. Open the windows, and breeze is so stiff you have prop the doors open or they slam shut. It cools the house down almost instantly. She said it was the law that houses had to be oriented that way, or that they were thinking about making it a law. Can't remember which.

Lots of old-time building considerations are routinely ignored these days. My parents said you should always put the garage on the N side of the house, for added thermal buffer. They put that side "into the hill" as well, for less exposed wall.

Open air-flow from W to E (prevailing wind direction) was designed-in as well. Open a few windows, like you say, and you get a breeze of some sort most days.

Her house is oriented to take advantage of the winds that arise every evening as soon as the sun goes down. Open the windows, and breeze is so stiff you have prop the doors open or they slam shut. It cools the house down almost instantly. She said it was the law that houses had to be oriented that way, or that they were thinking about making it a law. Can't remember which.

In California windiness is mainly a local phenomena, I live in the Delta region (wind gap between the coast and the central valley), so it is frequently windy. But, in most locations California is not very windy. The wind is an enemy of my cooling, as it stirs up the air and doesn't allow the radiational cooling to remain near ground level. The key determinant of my A/C needs, is the morning minimum temperature (as that determines how much precooling I can bank), and a windless night will have a minimum several degrees cooler.

When we bought our house it came with a dishwasher. We used it after the big T'giving dinner the year we moved in, and haven't used it since. A dishwasher is something any energy conscious person can, and should, do without.

We have a clothes dryer but very rarely use it. We hang clothes out to dry on the line.

We don't have air conditioning but there is an evaporative cooler on the roof. We used it the first few years we lived here but haven't used it the past several years.

When the electric garage door opener quit working, we didn't fix or replace it. We open the garage door by hand.

My point is: If you do without all these electric gizmos, the peak usage issue becomes moot.

I use my dishwasher because I read somewhere that it's actually more efficient to use a dishwasher than to wash dishes by hand. At least if you use the air-dry setting, which I do.

Also, because you have to use it regularly or the seals get stuck.

Yes, depending on your hand-wash style. If you keep a trickle of hot rinse water flowing steadily while you wash, then total energy consumed by hand washing is higher than a dishwasher. But if we're talking only about electricity, the reverse is true, since most US homes heat water with natgas.

The "electric gizmos" that some people rail against can be huge energy savers - like my electric razor, which consumes something like 1% of the energy of a hot-water shave with a hand razor. And I'll bet that my 20-year-old Norelco contains a lot less embodied energy than a mountain of worn-out disposable blades.

The "electric gizmos" that some people rail against can be huge energy savers - like my electric razor...

I don't shave. Beat that!

In winter I have a beard. Around the spring equinox I whack it off with sissors but not clear down to bare skin. I keep my whiskers fairly short in summer then start letting them grow again in fall. Way less "embodied energy" than shaving with electricity or a blade.

As for the relative energy efficiency of a dishwasher versus hand washing, I was specifically referring to electricity usage. If you have an electric hot water heater, that must be factored into the comparison. Our hot water heater burns natural gas, and is insulated. We fill the dish pan with hot water once, then rinse the dishes in cold water. The gas to heat the water and the three or four gallons of water itself, I would imagine amounts to considerably less energy usage (and cost) than running the dishwasher. You're right, Leanan, about the seals. Ours are shot but since we never use the dishwasher we really don't care. We keep extra dishes stored in it.

I know from the EnerGuide label that our dishwasher uses an average of 1.8 kWh per load and I'm guessing my friend's forty plus year old RCA model uses two to three times that. I wash dishes by hand, once a day, first by pre-washing in cold soapy water, then heating approximately 500 ml of water in an electric kettle for a second wash -- my total electrical usage is less than 0.05 kWh. YMMV.


I have often wondered about the dishwasher v. by hand comparison. Does "by hand" mean running the water for the whole time you're doing the dishes? If it does, that habit can be changed.

The way I see it, each thing we do uses a little electricity and they all add up. Heating, cooling, washing dishes, the telephone, computer, phantom load, vacuum cleaners, hot water, hair dryer, shaver, lighting, cooking, refrigeration... basically, we use electricity all day. Now we have electric toothbrushes, and a plethora of battery-powered kids' toys.

So far I am whittling away at that list, inching the thermostat down, doing without A/C, parking my car outside unless it is snowing. It was nice to get a rebate from the electric company for agreeing to turn off our A/C during peak hours (as we are not using it at all...). However the pace of my progress is glacial. It seems like the opposite approach, where government rations a minimum of electricity and you have to pay a lot extra for anything above that, would be most effective in changing patterns quickly. It would suddenly make sense to wear a sweater to bed, to refrain from giving your kids a bath daily, to replace all the gizmos with hand-cranked tools, to sing with friends instead of listening to canned music, etc.. etc...

DD - note that in drought zones, the dishwasher supposedly saves water, so it's better than hand washing dishes.

DD - note that in drought zones, the dishwasher supposedly saves water, so it's better than hand washing dishes.

Maybe, but I would contend that it depends on how one goes about washing dishes. We stack the clean soapy dishes in the other sink then rinse them all at once with cold water. I've seen people who leave the water running while washing dishes, and rinse each item individually before putting it in the drying rack. A dishwasher probably does save water compared to hand washing this way.

BTW, as for the swamp cooler, I have water rights and have considered filtering ditch water for evaporative cooling. Without adequate filtration, the ditch water is too dirty; using it unfiltered would make a nasty mess. Using the "free" ditch water would certainly save on the water bill but the pump and blower motor would still consume electricity. There's only a few days each summer when it would really be nice to turn the swamp cooler on. The past few years we've just gone without using it.

Dear HH Halifax.
Bit of a safety tip here.

I really would not recommend running a diswasher, washer-dryer or dryer in the house when you are out or asleep. These three things are the cause of most fires caused by electrical appliances. I did not believe this urban myth until I saw our local volunteer fire crew stopping off for a pint at our local after a shift early last autumn. They had just been called out to a blaze and they said the cause was a 'another bl**dy dishwasher'. If you do this, make sure you have more than one smoke alarm and independent earth leakage circuit breakers on these items (I dont know how you do mains tripping in North America, but I use independent ELCB's.

With the dryers, it's LINT. Gotta watch that LINT.

IF you camp or heat with wood, I've heard it's a good fire starter.

With the dryers, it's LINT. Gotta watch that LINT.

IF you camp or heat with wood, I've heard it's a good fire starter.

Take your lint, or cotton balls from the drugstore as an alternative, and a jar of "Vasoline". "Mush" the Vasoline into the lint so that it is saturated with it, then pack it into an empty pill bottle, or 35mm film container etc and pack it in your survival kit.

When time to start a fire pull off a pinch of it. By adding the Vasoline you get a result that won't blow away, will catch fire even if being rained on, and burns much hotter & longer.

(Yes, I know, Vasoline is a petroleum based product. I suspect lard or some other fat would work well too as a substitute but have not tried that)

I appreciate the heads-up. I seldom use the dishwasher; I'm guessing I've used it a dozen or so times over the past seven years (can't quite overcome the feelings of guilt).

We have smoke and CO detectors on each floor which are connected to the home security system, so provided the guy at Chubb isn't off taking a wiz, the fire department will be dispatched even if we're not home to make that call. I confess I'm a bit paranoid about house fires having survived one nearly thirty years ago.

My father, prior to his death, installed an ELCB on the incoming mains in his home in Wales. I believe there are additional GFI (ground fault interrupt) protection devices on the main rings, or at least the ones that feed the outdoor outlets. He was meticulous about most everything, but no more so than with matters of personal safety.


Good for your father!

I myself live in a way that's mandated for the poor in the US - you can tell where the smoke detectors WERE ... by the hanging wires. Ground-fault detector? What's that? Everything jerry-rigged and patched together, and built to last maybe 20 years, 50 or 60 years later you're still using it. Many opportunities daily to burn the place down ... the need for a bug-out bag isn't external threat, it's the very place in which I live. And yet, being poor and therefore a non-person, I am EXTREMELY THANKFUL for this place, instead of living under a bridge, or in a TB-infested homeless shelter.

In the brave new future, things are just not going to be as safe. Cooking over open fires, applying "home engineering" to wiring and plumbing and heating problems, maybe doing home crafts on equipment like you'd see in any street-workshop in India, we will have to learn to be more mindful.

Thanks. I miss my dad a lot.

I know nothing of the challenges you've encountered in your journey so far but, FWIW, I get the impression that you'll do OK and that things will continue to improve for you going forward. Good luck!

BTW, my partner's dad was a put-a-penny-in-the-fuse-box sort of guy who would mend the breaks in extension cords with cellophane tape (I kid you not). When we would visit, I would lay in bed all night speculating on the precise moment of my untimely death.


LOL OK you really made me laugh with that!

Yeah, I think things are looking up, knock on wood and cross my fingers and all that.

Just heated a pot of water on the stove.... Bathtime!

We've had TOU metering for over 25 years (Pacific Gas and Electric). So, what do I think about it?

1. It isn't for everyone. We make out because we switch over to our PV system during peak hours and have solar hot water heating.

2. The tariff system matters, that is, when is "peak." For us, peak time is noon to 6PM weekdays (weekends are all at the lowest rate). One of the keys for us is that we can start to cook meals at 6PM. However, the peak for new TOU meters is 1PM to 7PM (our peak time was grandfathered in). In our case that would mean all of our meals would be cooked on peak and seriously detract from its value.

3. Family size matters. My wife and I are retired and can be quite flexible. I believe it would be difficult for families with kids to avoid high peak charges.

4. Peak rates can be very, very high. During the summer, we can be charged as high as 36 cents/kWH if we exceed certain use thresholds on peak.

5. As has been noted up thread, there are lots of little things that can be done. But, there is a lower threshold of usage that isn't going to be changed. Our typical background usage is about 400 watts per hour. This includes clocks, power cubes we can't shut off, refrigerator/freezers, etc.

I believe it matters whether switching to TOU metering is done to save money or to help the environment. Personally, I believe if the intent is to save money, people would be better off buying a Kill-A-Watt meter to find serious energy waste and to consider various alternative energy systems.


I'm not sure it would help the environment, either. TOU metering is not supposed to reduce usage. It just shifts it around. In some cases, it will increase usage.

Ok, a couple of things:

TOU use can help the environment if fewer plants are needed to cover peak usage which is the objective of the PG&E TOU program.

Given KW cost at peak, I believe it does reduce usage although I agree it does shift some around. If you are paying 36 cents/kWH for AC, I believe most people with TOUs will raise the thermostat. In our case, what we do is set the thermostat really low while we are on the PV system and then shut the AC off when I switch back to the grid at 6PM so it does reduce our usage.


I'm not sure it would help the environment, either. TOU metering is not supposed to reduce usage. It just shifts it around. In some cases, it will increase usage.

Peaking plants are usually less efficient (and less likely to use renewables) than baseline, so the issue is more complicated. Also the utility may have to import peak power over long distance transmission lines, with concommitent loses.

"Easily"? .. A lot of what's now required will not be easy, and of course You know that, and They do not.. but that doesn't have to drive our planning.

There is first this assumption, then the demand by our culture that it be made easy, or people won't do it. and sure, most People won't usually go the harder route, I do recognize that.. but this doesn't mean it will continue to be that way. The daydream might be lifting for them soon enough, and then the equation of what people will be willing to do, or will be forced to do- will change.

I can't be worried about the definitions that drive the suburban mind today.. they are there, and they're real, real obstacles to getting ready for what's coming.. but we also have to get out of that set of expectations and look at the tools that will possibly help us through a different reality than the one that they can see.

There ARE ways to make Hay while the Wind is Blowing, to mix metaphors.. and they aren't that hard to design into workable systems. Implementing is another matter (THE other matter), of course.. but that doesn't actually negate their workability.. it just makes sneaking them in a lot harder.

A lot of what's now required will not be easy, and of course You know that, and They do not.. but that doesn't have to drive our planning.

I was responding this this claim from HereinHalifax:

The writer is being intentionally deceptive. It doesn't take much effort to schedule major loads to run during non-peak hours.

I don't see anything deceptive about the article, intentional or not.

I think the load problem is going to solve itself. As with many other things, we're going to find capacity is actually overbuilt, for the new level of consumption.

It is possible you could save on total consumed power by pre-cooling in the morning. The reason is that the A/C is fighting a much lower temperature delta (btw the indoors, and the outdoors), so it ought to be able to remove a BTU for less energy then. Of course if too much of the extra cool is dissipated that might overwhelm the efficiency effect. We use the poormans whole house fan (bring in cool night air via window fans to get the house as cold as possible). A properly designed cooling system, ought to be able to take advantage of cooler night time temperatures to bank some cooling during this period. Of course todays dumb systems do not try to do that.

I would think the greatest possibilities for TOU would be in the commercial and industrial sectors, not in the home, where convenience rules.

It is possible you could save on total consumed power by pre-cooling in the morning.

The article mentions that, but also points out that you would increase your total energy use.

I would think the greatest possibilities for TOU would be in the commercial and industrial sectors, not in the home, where convenience rules.

Yes, that's my thought, too. China shifted their factories to the night shift when they were having power shortages during the day.

Contrary to the article's claims I adopted the practice of pre-cooling my home in the morning and dramatically slashed my total electric consumption while improving my comfort. It would have been even more dramatic savings if I had TOU metering.

But it wasn't just simply changing when I ran my air conditioner so I can't precisely state the savings. I adopted the practice of opening up all my windows in the evening as soon as outdoor temps fell below indoor temps or just before going to bed. On nights with no breeze I would use fans too. First thing in the morning when I got up I would decide if I was going to need any AC for the day. Often I didn't but if so I immediately shut the windows, drew the shades and set the AC to come on until the house dropped to 74F. Usually this only took 30 minutes or so, rarely an hour of AC running. The AC is very efficient at dawn because outdoor temps are at their lowest for the day. When the humidity was low I turned on a mister by the compressor which dropped the temps further and sped up the cooling.

With the house sealed up tight a 74F morning temp might rise to 78F on a hot day and I had no further need of running the air. Prior to this I had been simply leaving the AC set 77F all the time and it would run a lot during the afternoons and early evenings when outdoor temps are often in the 90s. The AC worked much harder when running at this time of day then it does when running in the early morning.

Refrigerators are not generally the largest electrical load in your home. Ours is rated at 476 kWh/year (1.3 kWh/day)

Wow! You must have an huge refridgerator. Mine is rated at 88 kWh/year. The freezer a little higher at 105 kWh/year.

The dishwasher has a timer, but I don't have an off peak rate for electricity. The timer will be useful when I want it to run of the solar panels, during the day.

Wow! You must have an huge refridgerator.

Not by North American standards. They're EnergyStar models (ok, I confess there are actually two) and having checked the tags they're rated at 472 kWh/year not 476 as previously stated.

We have a high efficiency BOSCH dishwasher and it appears to use a little less than 1.8 kWh per load. Their respective EnerGuide tags are shown here:


Dude, you have two huge refrigerators.

Tom A-B

Those refrigerators may be Energy Star rated, but they are still energy hogs. And, you have two of them, so your usage is 944 kWh per year. When I bought a new refrigerator, I noticed that the larger ones tended to use much more electricity. I opted for an 18 cubic foot size with the freezer on top, which is rated at 417 kWh per year. The estimated cost for this smaller one is only $36 per year.

E. Swanson

The second refrigerator is only turned on when we have parties and require extra space for trays, platters and drinks. It operates perhaps 100 hours a year, if that.


With a large family we use fridge/freezer bigger than that with little guilt. The money we save by buying in bulk plus not eating out or shopping daily easily pays for the power, and the cost is small compared to HVAC for this house at least.

We have an old fridge in the garage, too -- but it's mostly used for Thansgiving prep or sometime Fourth of July parties.

Some day we'll have PV solar and I won't begrudge the fridge/freezer their shares. The HVAC, oven, range, dishwasher, and dryer will need to watch out, though!

So he's got an extra fridge that uses 1.3 kwh/day. Who cares.

The typical US household use is about 36 kwh/day. I think if you can get it under 10kwh/day you're doing pretty well. People with off-grid solar will often live on 3 kwh/day and some people (really serious ones) can go to 1 kwh/day.

The big energy hogs are electric hot water heaters, space heating and air conditioning.

Those refrigerators may be Energy Star rated, but they are still energy hogs.

I have an energy star refrig, and it uses a resistance heater to avoid condensation problems. I don't think the bar is set very high. I also have an energy star LCD TV, which uses about 220watts -the infrared thermometer shows the screen temperature as 99degrees!

Are you sure it's 88 kwh/year? What kind/model is it?

According to the Energy Star website, even the most efficient Fridge with a top freezer uses 171 kwh/year. And that's one of those specialized SunFrost models with no automatic defroster. And those cost about $3,000.

Sorry but the links are to a German web site. I am sure you can search the model names and find some info in English.

Here is a link to the fridge
88 kWh/year but no ice box.

And here is a link to the freezer

The freezer uses 141 kWh/Year, more than I stated above.

Of course, they are far too small for the average American, but big enough for me. If I am ever going to run a fridge and freezer from a PV system in Germany, these are the types that will allow me to do it.

They always seems to mention that air conditioning uses a large amount of energy but they never suggest retrofitting homes with geothermal heating and cooling. Why do we miss this opportunity?

Good point.

That would be an excellent tax credit idea.

Please run for Congress.


My guess is that because it takes too much space for the typical McMansion lot. My sister's house in Sacramento is gorgeous. I love it. Except the lot is barely larger than the house. She wants to garden, but is doing it in pots because there's no room in the yard.

Then there's apartment complexes. I read once that with the new vertical loops, you can heat and cool an entire apartment building in about an acre. Great, except existing buildings probably don't have a spare acre, and developers wouldn't want to give up that much. They're not the ones who will be paying the utility bills, after all.

The vertical loops don't take much room, but you would have to plan carefully to prevent thermal saturation and coupling between neighbors. The bigger problem is having access for a drill truck, and drillers who can recover all the mud and maintain the area to avoid pristine-lawn destruction.

The other issue is cost -- it'll about double the installation or replacement cost for HVAC, and that mean it only makes sense AFTER other energy-savings have been considered and implemented. For example, I could replace every bulb in my house with LEDs (or CFLs at half that price) plus trade-out the fridge, freezer, and clothes machines for less money, or I could replace my windows and add insulation.

If you do all that, and cut your cooling needs by half, then your new system wouldn't cost much more than a direct replacement....but you've still spent double the money overall.

Of course there is an ROI to be had, but that takes long-term buy-in plus some math.

When it comes to money or sustainable living we always seem to side with money, the false idol.

Another energy saving idea would be to produce chest refrigerators instead of the energy wasteful uprights that lose their chill every time you open the door.

And add an option to have the compressor remote from the unit while you're at it. During cooling peak load you pay once to take heat from the food and dump it in the house (along with power dissipated), and then again to move that heat from indoors to outdoors. In the winter you pay to heat the surroundings yet cool the food.

Ovens are just as bad -- 1" of insulation for 300F delta T.

Better insulation and intentional use of waste heat could drastically improve efficiency.

This is why we vent our dryer indoors during the cold season. The added humidity is a nice bonus, too.

For a chest fridge, just get a chest freezer and set the thermostat to the warmest setting. If that is still too cold plug the freezer into a thermostatically controlled outlet and put the temp sensor into the chest through the drain plug.

Also with TOU metering I bet it would be possible to use chest freezers and chest refrigerators on timers that keep them off during peak rate times. Just keep the thermostats a couple degrees lower and make sure there is plenty of thermal mass inside the units so that they can't coast through the peak rate times without warming up too much

I wouldn't do this for an upright unit that is accessed during peak rate times as they lose their cool when opened.

I recently got an energy star chest freezer and was surprised they still only use about 2.5 inches of foam insulation. It would cost much more to use significantly more. I wouldn't insulate the walls or roof of my home with so little.

After my experience with Quest pipe, I would be reluctant to put down pipe in the ground that would not last at least a very significant amount of time such as 50(?) years. With peak oil upon us, pulling up the old pipe and setting down new pipe could be very expensive during next 50 years. Fifty years might allow solar to develop and alternatives to copper or fossil fuel based pipe to be developed.

You can do veritcal loops in a goethermal system. What they need to do is come up with a way to run the vertical loops under the footprint of the building with minimal disruption.

I have often wondered if you rigged up a drilling rig and set 8-5/8" pipe at 4,000' or so (110 degrees) in cold climates how much space you could heat. What if you drilled horizontally??

Selling ground heat as a utility.

Tackling global warming right at the source. Extract heat from the earth.

How about all those soon to be uneconomic shale wells??

Community service type thinking.


FF - The contractor we used for two 300' wells said that 300' was as deep as he would go due to his concerns about getting into water zones which were brackish water, and he had to use the same rules as for oil and gas wells to protect the Usable Safe Drinking Water (USDW) under Oklahoma's interpretation of EPA's rules. If you run casing, you vastly increase the cost and also lose the direct formation contact, through the drilling mud / gel which Oklahoma also requires.

The cost of horizontal wells is about 4 million dollars or more. A vertical well that is less than 10,000 feet may cost a million dollars. In the geothermal fields of California, they found they were depleting the heat in sections of rocks they had pumped water through. After a number of years they had to abandon these wells and drill other areas where the rocks were hotter. In Iceland they have heat fields over a recently active volcano, with heat conducted from the magma chamber. Hawaii also uses geothermal from a recently active volcano.

One of the most efficient uses of solar power has been rooftop water heating panel units that preheated water sent to a domestic hot water heating tank in the home below. In Israel these were seen on rooftops all over the country. The units paid for themselves without subsidies. They might be useful in the southern states; especially the SW where there is more solar intensity.

FF: Contact a good drilling contractor to quote you a 4000 foot well cased with 8 5/8" back to surface and then start running your economics. Your wondering should have some solid starting points.

I think one huge opportunity that is never even mentioned is using outside air to cool refrigerators. For at least 5 months, in Minnesota at least, the temperature outside is lower than inside a refrigerator. It couldn't be that hard to have a controller that could circulate outside air to keep one's refrigerator cold. If I didn't live in a condo building I'd try to rig something up myself.

A couple of people here have done this. Though as you say, you pretty much have to own your own home.

I have friends in Eugene with a beautifully maintained old house which has been retrofitted with insulation, but left original in its quaint details - like the "cold box."

It's an insulated cabinet in the kitchen with holes in the bottom that connect to the basement, and vents out the top to the outside. It passively convects cold air all year long, and never freezes. Not the best idea for meat and dairy, but most things in the 'fridge don't need to be kept at 5C anyway.

The new stimulus bill includes incentives (30% of cost) for geothermal to existing owner occupied homes


Best Hopes for Incentives for Rental homes as well,


Thanks, Alan.

Looks like solar and geothermal can apply to rentals as well as new homes.

Of course, geothermal costs 2x as much, so 30% off still takes some deeper pocket digging, and solar helps the resident more than the landlord.

Still, it's a step in the right direction. I'm glad there are a few decent concepts buried in that bill!

Hi Paul,

I think the article raises some good points, but does have some problems. For example:

So if we shift more uses to off-peak hours, we may save the utilities lots of money. But we won’t be saving energy. At best, we’ll be using the same amount.


At best it will make electricity a bit cheaper and perhaps shave 5 to 10 percent off the anticipated growth in consumption.

I don't understand how both of these statements can be true. If we're using the same amount of energy but just leveling demand by load shifting, then the second statement can't be true. And if the second statement is true, then the first statement, i.e. "we won't be saving energy" cannot be true.


The first premise is that, by conveying real-time pricing the smart grid will encourage people to redistribute their consumption of electricity to off-peak hours of the day.

I agree that some load shifting will occur, but I think the larger effect will simply be load suppression during peak price periods. If you price something high enough, consumption will go down. Witness what $4 gasoline prices did to destroy demand last summer, and what <$2 prices are doing to restoke demand now.


Finally, as mentioned above, the great virtue of large-scale solar installations will be that they coincide with hours of peak demand. If we ever get to that point, we won’t want to flatten loads. We will want to keep them the way they are.

Nothing to worry about here. The existence of large-scale (or small-scale solar) with a very cheap marginal cost will stoke demand plain and simple. Or in other words, solar power will reduce the hot-summer-day peak price of electricity and raise demand for air conditioning.

I'm all in favor of pricing things according to their economic cost and/or value, so I believe that peak-demand prices for electricity should be higher than base load prices. Furthermore, I think all sorts of behaviors will emerge to reduce peak demand, such as more people painting their roofs white or figuring out ways to get by with less air conditioning. Load shifting will certainly be part of it, but not necessarily the dominant part.

You've raised a number of good points and I hadn't noticed the contradiction until you pointed it out.

I think you're right on all accounts. It wasn't all that long ago when an out-of-province long distance call during daytime hours was $1.00 per minute. I tried my best to call after 18h00 when Bell offered a 30 per cent discount and, if the time zones were favourable, after 22h00 (or was it 23h00?) when the rates were 50 per cent off. If I did call during the day, I did my best to keep it short, as in "Send money." **click**.

With regards to electricity, if I know I'm paying a sizable premium during peak times, I may avoid using electricity altogether (e.g., do the steaks on the outdoor BBQ rather than grill them in the oven), use a little less (e.g., wash my clothes in cold or warm water as opposed to hot and dry them on the line rather than tossing them into the dryer) or choose a more energy efficient option (e.g., the toaster oven or slow cooker versus the oven range). We have choices; we just lack the right stimulus.


RE: China's Chery Auto unveils electric car

Looks like the Chinese are going to beat GM to the punch. Who would want to buy a GM Volt that only went 40 miles on a charge when the Chery car could travel up to 93 miles per charge? Of course, we don't yet know whether either car can travel the stated distance in a side by side comparison on real roads.

E. Swanson

From the article, the Chery is an all electric car, and 93 miles is the max distance without a recharge. The Volt, however, is a plug in hybrid that is an all electric chassis with an ICE generator on board. It will go 40 miles on the current battery capacity, then the ICE, which in the Volt turns a generator, not the wheels, kicks in and will power the car to the end of the fuel load, which is around 300 miles IIRC. If you drive the Volt less than 40 miles between charges, the ICE doesn't get used. The Volt, or any other vehicle with the same configuration, gives the best of both worlds - all electric for most trips with the ability to go much longer distances when necessary.

Looking at the specs, I see that you are correct. My memory was that the original Volt concept was an all electric. Now, GM says they are going to build a sedan with a 150 hp motor which will go 100 mph, as well as a plug-in hybrid drive. But, I thought the whole point of building a hybrid is to mate a smaller motor with a battery storage system to be able to operate the motor at nearly full power for maximum efficiency. What happens after the car has been driven 40 miles? Doesn't the motor kick in and charge the battery? Will the battery then be kept at a high level of charge until the car is stopped? How much more electricity will be added to the battery pack, the equivalent of 30 miles of driving, or 20 miles?, or only 10 miles? Or, will the battery be left essentially discharged, to be later re-charged from the grid?

It will be interesting to see how the Volt concept works out in actual driving by real people.

BTW, GM's other "new" vehicles shown in their recovery plan look to be cross over types with bad aerodynamics, which won't do well on fuel economy. Those are the cars which most people will buy, given the extra cost of the Volt...

E. Swanson

It's been awhile since I've read anything on the Volt, but IIRC the ICE generator supplies enough current to power normal operation of the car once the battery is depleted to a certain level, but not enough to charge the battery at the same time. I don't remember if the battery would be charged while the car is stopped, like at a traffic light, or whether it would have to wait for a plug-in charge. The most efficient method would be to use any excess current above that necessary for propulsion to charge the battery while the car is in use.

Maybe GM needs to add a second generator, then the car would operate like the WWII diesel-electric submarines - when on the surface, one generator charged the batteries and the other provided the propulsion power.

The point of a PHEV is to charge the battery using the electric utility grid, not the on board generator. Assuming GM is not stupid, the battery would store charge from regenerative braking. The generator will probably shut off when the car is stopped at a stop light to save fuel. The generator will probably supply average power to the vehicle, but flooring the accelerator will draw power out of the battery too. The generator will probably keep a "discharged" battery charged at some level, say 30%.

VIENNA – Improved confidence in financial markets, helped by reports the U.S. government may increase its ownership in Citigroup, boosted oil prices above $40 a barrel Monday despite a steady stream of bleak corporate and economic news.

Contrast with this from Mish:


Not only is Citigroup a black hole from which no taxpayer dollars can escape, but Geithner's brain is a black hole from which no intelligent thought can escape.

And then this AM's Talking Heads who can't
remember the lies they told just this last Friday,

and we get to this from Ilargi:

"...[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. this system was to be controlled in a feudalist fashion by the central banks of the world acting in concert by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations...."

Springsteen unwittingly provides a picture of the demise of America. When he wrote the song(Thunder Road) 35 years ago. all roads seemed open. They no longer are. We passed the summit in the seventies, and we never noticed. So somewhere in there tragedy and hope comes up, ugly and beautiful all at the same time. Despair and faith. Misery and belief."


But let's talk about Chandra Levy now, eh? ;}

I thought the two great quotes over the weekend were:

Said one high-level official, “I think the market is missing that the whole intent of this process (stress testing) is to show that the banks have enough capital for even worse outcomes than we currently envision and to show there’s a program in place to give banks access to that capital if they need it.”



The real question is why the Obama administration keeps coming up with proposals that sound like possible alternatives to nationalization, but turn out to involve huge handouts to bank stockholders.


Citi in talks over bigger U.S. stake - report
Bank and regulators said to discuss plan for government to convert preferred shares to common stock.

That just means that when it goes bankrupt, then the government will lose its common stock just like everyone else. What kind of deal is that?
If the government has a larger stake, then they will have more power to screw it up.
Why are we propping up that bank? IMO - Let it fail and move on to the next one.

Why buy stock in a bankrupt bank? If its balance sheets (total current assets) fall below the minimal stress test limit, the government bank regulators have to close the bank anyway and the government gets its assets and they are auctioned off to pay back depositors, tax liens, etc. If there is any money left the lenders (bondholders) and stock holders might get that. The way some of these banks were betting on energy derivatives, CDS - credit default swaps, and packaging collateralized debt obligations to try to get inflated mortgage bond ratings there might not be much money left. During the c. 1989 Savings and Loan bank crash - real estate crash, the government formed the RTC, Resolution Trust Corporation to run the banks and manage foreclosed properties until the properties could be auctioned off over a two year period. In the process the Feds closed the doors of the institutions and disbanded the employees. Entire apartment complexes were foreclosed on during the crisis and had to be sold to new owners. Some of the employees were kept by those who bought the complexes.

I was happy that Ilargi used my quote for that :-)

I posted the Quigley quote(and a couple more) in the TOD Quotes thread.


Folks JUST DON'T GET IT. It was planned.

To further drive it home. Let's hear from David.

“We are grateful to the Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promise of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during those years. But, the world is now more sophisticated and prepared to march toward a world government. The super-national sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.”

- David Rockefeller., speaking to his fellow global socialists at a meeting in Baden-Baden, Germany, June 1991.

Who would you have to hear from to get the message?

Unless you have been inoculated with the "Anti" conspiracy serum.

Is it believing in Conspiracies to read the quote, or is it by deriving an opinion based on the quote?

But there will be no recovery until the banking system is reformed and restructured, and the median wage begins to increase enough to support both savings and increased consumption.

Making additional debt available first as a cure is nonsensical, because the debt we have cannot be serviced and must be written off. To do so is Ponzi economics, which is what Greenspan was practicing, and why the decline has been so precipitous.

The longer we avoid making the necessary changes, the more we risk an involuntary default.

Dividends Falling Most Since ’55 Means S&P 500 Still Expensive
By Michael Tsang


So simple, yet so painful.

We all knew it. Since Springsteen. In 1975.
My parents asked me all the time , "What happened
to you." And us Dirty Fuckin' Hippies (didn't know it
at the time ;}) tried to give 'em the answers, when
they didn't even like the questions.

What better thing for those who craft conspiracies to aggregate huge fortunes for themselves or to usurp power from national governments than to have the meme of the "Conspiracy Theorist"? No one want's to be publicly mocked as a nut, so this meme serves as a tool to shut up those who would otherwise point to their suspicious actions.

The meme of "Conspiracy Theorist" is itself a conspiracy to keep us quiet and prevent too many uncomfortable questions from being asked - LOL!

Seriously, conspiracies do exist, and if there are valid reasons to question possible criminal / conspiratorial behavior by TPTB, then we should never be afraid of asking questions, digging and calling for openness and accountability.

We would prefer that you use the acceptable term "formal collusive oligopoly" rather than "conspiracy," please.

The super rich and powerful, that small .01 % or whatever, there #1 goal is to stay rich and consolidate and strengthen their power and increase their control. Whatever their vision for humanity it certainly includes this as #1. They have all the information we have and more. plus they know the info from the disinfo since they are the ones creating it. Givin that they are not stupid people and are aware of p.o. and climate change limits of growth and population. What lines do you suppose they are thinking down?

Leading up to the Iraq war it was obvious that that the power had every intention of going to war and they were just doing a song and dance sell job, wmd's and all the rest. About the same time avian flu virus was all over the news ,how bad it would be if it went airborne and how many could die etc. . My first thought was holysh*t there giving everyone a pre-packaged explanation for when they spread their bio-engineered flu and people start dieing everywhere. Fortunately i was just being paranoid but how unlikely is such a scenario ? And does the new flu virus "breakthrough" have sinister implications?

I know this aint the place for conspiracy theory's but someone else brought it up.

Samsara, I can't find an original source for that Rockefeller quote. WikiTalk says it's apocryphal. Snopes has nothing.

“For more than a century, ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure - one world, if you will. If that is the charge, I stand guilty, and I am proud of it.”

- From Rockefeller’s “Memoirs”, (p.405).

Hmmm, badly written, or does he not care about admitting this now...

I read with interest the link up top: Saudi to halt fuel oil exports 3 mths ahead: trade.

Although fuel oil has typically been seen as a heavy pollutant with little benefit for domestic use, Saudi Arabia, along with Iran and Kuwait, have increasingly been burning larger quantities of fuel oil for power generation and water desalination, analysts said.

I was in Saudi, working for ARAMCO, for five years in the early 80s. During two of those five years I worked in their power generation department. Back then, most of their power and desal plants used natural gas almost exclusively. For a few hours each month they would burn fuel (bunker) oil and on rarer occasions they would even burn naphtha. This was usually just to make sure that the oil injectors an pressure pumps were working rather than for any other reason.

Natural gas was plentiful in those days. It was easier and more economical to use than any other type of fuel. They had so much gas that they often even injected it back into the oil reservoirs just to keep the pressure up. So I am wondering what has happened to their abundant supply of natural gas. Perhaps it is far more profitable to export it as LNG and import bunker oil. Or perhaps they are just running short of natural gas.


Part of it that they are reducing oil production (to comply with OPEC quotas, etc.). Less oil production means less gas production.

Yes, this is definitely part of it as they state in the article. However Saudi produced almost half a million barrels of oil per day more in 2008 than they did in 2007. This means gas production was likely dropping while oil production was increasing.

Domestic consumption of fuel oil climbed by 9 percent in 2007 and 11 percent in 2008. The combined increase over the two year s totals 55,000 barrels per day. Their consumption for fuel oil hit 351,000 bpd in 2008, said Raja Kiwan of PFC Energy.

That's 20 percent in two years, two years when Saudi was producin near their peak. Saudi was still producing well over 9 million barrels per day in October of 2008 and averaged over 9.1 mb/d for the entire year of 2008.

I have a feeling something else is going on here.


what is the status of the permian khuff at ghawar? does anyone know ? are/were they cycling gas from the khuff ?

Wild Conjecture from a non-expert: Assuming Aramco is using water injection way,way down below: perhaps the Frac'ed MRC gas horizontals in the Khuff are watering out faster than anticipated? I would imagine Super-K geo-fractures would be even worse in the Khuff than in the Arab-D oilzone.

From Feeble Memory: I seem to recall SS, F_F, or Euan mentioning about water geo-fracture migrating up from the Khuff causing water problems in Shedgum.

My source in Saudi Arabia attributes it to a shortfall in natural gas supplies (which as Leanan noted, is aggravated by a decline in casinghead gas production). In the early 2006 time frame, he predicted a two year increase in Saudi liquids consumption of about 500,000 bpd (their 2005 consumption was 2.0 mbpd, and the latest revised EIA data show 2007 consumption of 2.2 mbpd).

I believe that one of the issues is that natural gas prices are kept too low to make it worthwhile to produce much natural gas in Saudi Arabia.

That doesn't explain why the Saudis are not using it themselves. If it is very cheap, then they should be using it in their own power plants and desal plants instead of fuel oil.

Saudi doesn't have many gas fields. Most of their gas comes up with their oil. They flare nothing. At every oil field they have GOSPs, or gas-oil seperation plants. That is where the bulk of their natural gas comes from and the get it with the oil whether they want it or not. So if their oil production is falling, it makes sense that their natural gas production would be falling also. The problem is, it started falling long before they started cutting back their oil production.


The Saudi Aramco uses world class field management. In addition, we know that almost all Saudi gas is associated with productive oilfields, which means withdrawing the cap would damage the reservoir. We also know that SA was producing oil at high rates for the past several years prior to this reduction, and producing some natural gas.

If we assume that high draw dropped reservoir pressure in at least one major oil field (Ghawar?), everything falls into place. The oil must be maintained in the oil zone, so if water pressure was dropping, the gas pressure would also need to be lowered, hence the glut of gas during high rates of oil production. We know from reading TOD that SA has been installing huge water injection systems, implying that perhaps they are having difficulty maintaining water pressure, and also has put great effort into finding non-associated gas during the recent SA gas glut. They need gas to repressurize their fields now that production has turned down. Hence no gas on the market and a return to bunker crude. Switching to bunker crude for power in SA is a no brainer. Of course this makes WT look like an optimist.

Gas, gas everywhere and not a whiff to burn.

We are talking modern world class oil field management here. Oil AND gas production are maximized, and should not be linked. Leanan and Darwinian, you are brilliant, but with modern oil field management, less oil should have no effect on gas production, as excess gas should be reinjected as it is in Prudhoe Bay. You are thinking of production from old reservoirs that were poorly managed. That less oil means less gas in a water drive field with a gas cap means the field was stressed.

SA hopes to be the world swing producer. Swing means UP and DOWN. If they must draw down pressure to maximize production, they must build pressure up when production falls. But to build pressure they need gas.

So Saudi Arabia needs an intermittant source of non-associated gas. Or they need to solve their pressure drop problems, but I think they already know this, and haven't come up with a solution. Do not be alarmed when you see reports of SA acquiring gas for injection. DO be alarmed if they pop the cap on one field to feed the others. All SA fields ought to have long and productive tails like Jay Field of Florida (just closed). For SA to sacrifice one of their fields means N. Pars is a chimera.

I am not a reservoir engineer.

Cold Camel

Very interesting. What is your background?

Well I read this great site on the internet....

So Saudi Arabia needs an intermittant source of non-associated gas.

Qatar, Iran, perhaps UAE


Pipelines take quite a while. How many are willing to sell?

Qatar is selling LNG. Perhaps two years (in a rush) to build a pipeline through desert from Qatar to Ghawar (look at a map, remember few regs, Aramco expertise).

Iranian offshore is flaring gas just a few miles from offshore Saudi fields in some places. Further to other Saudi offshore fields.

Still, all could be in place in 4 to 5 years max. Significant gas imports in two years, or less, with "crash priority".


Right Alan, this shouldn't be a problem, hence my concern if they pop the cap on an oil field.

Cold Camel

Another 180 degree spin-they put out this story that "stress" tests will be conducted to determine which banks are worthy of being saved with taxpayer money and which are hopeless cases-the new story is that the weaker and more corrupt the bank management, the more taxpayer money that firm will be receiving (as long as they are connected) http://www.marketwatch.com/News/Story/Story.aspx?guid=%7bB5909A31-DAB1-4...

And along those same lines

Charlotte, North Carolina-based Bank of America, which has received $45 billion in TARP funds in exchange for preferred shares and warrants, would be 66 percent owned by the government if its entire stake were converted to common equity, according to data compiled by KBW Inc., a New York-based investment bank.

For Regions it would be 69%

For Fifth Third it would be 83%

For Citi it would be 5 times the Cap value or 85%

I heard somewhere that 50% is defacto nationalization. In for a dime...

Robert Gibbs ,white house press secretary, yesterday "the government stands squarely behind the private US banking system." That's a good one.

Apologies if this tidbit has already been circulated: The Fed models apparently say the recession is almost over, which might explain some of their actions. If they actually thought it was going to get much worse, they might question their past and planned actions more rigorously.

  • http://seekingalpha.com/article/118339-end-of-the-recession-in-2009
  • The Fed's data show that the recession probability peaked during the October 2007 to April 2008 period at around 35-40%, and has been declining since then to less than 10% for December 2008 and January 2009. Looking forward through 2009, the Fed's model shows a recession probability of only about 1% on average through the next 12 months, and below 1% by the end of the year (.82% by January 2010). The Treasury spread has been above 2% for the last 11 months, a pattern consistent with the economic recoveries after the 1990-1991 and 2001 recessions.

    Of course, being a cynic, I muse whether the spread isn't being affected by weakness in the 10-year bonds rather than new strength in 3-month, and of course whether any Fed prediction really matters in a global recession.

    I'm confused (as usual). How is the recession coming to a close if unemployment is climbing and the only things that are selling are priced at cost? The stack market only holds steady for a day or two because the government promises to give away more money with less strings attached than was predicted.

    The old Texas phrase comes to mind: Wish in one hand and sh** in the other...see which one fills up first.

    Well, they always say that unemployment is a lagging indicator.

    Not that I buy this "recovery by mid-2009" theory...

    Their problem (and the problem with so much mainstream media conventional wisdom) is that they are assuming that this is just another cyclical downturn, and that patterns from past downturns can be applied like a template to this one.

    This is a faulty assumption, for at least three reasons:

    1) Global energy supplies (and indeed, all non-renewable resources) are peaking and will soon be declining. The previous growth trend cannot be sustained, because the resource base won't be there.

    2) Global climate change combined with global population overshoot means that we are already past Peak Habitability for the planet. The impacts - from submerging coastal areas, to spreading droughts, to a host of other disasters - will increasingly be taking their toll, acting as an increasing drag on the economy.

    3) The US in particular has been living far beyond its means on multiple levels, from the chronic imbalance in trade, to a massive imperial overextension, to the chronic indebtedness and over-leveraging at all levels, from the federal government down to individual households. Add to this the current spasm of spending money we don't have, at a level that a million drunken sailors couldn't begin to match. It is all utterly unsustainable; the party is over; the bills are now coming due. BAU is history; it cannot go on; it cannot be "recovered".

    The bottom line is that what we are now experiencing is not a temporary cyclical downturn, but rather a paradigm shift. We are beginning a transition from an old economy in which the trend lines generally point upwards, with an occasional and temporary downward correction, to a new economy in which the trend lines generally point downwards, with an occasional and temporary respite. It may take TPTB, the mainstream media, and the general public many years, maybe even a decade or more, before they finally face up to and admit this reality. That does not change the fact that reality, it is. It does mean that most of the Washington policymakers are operating on the wrong assumptions and making the wrong moves, just like generals are notorious for fighting the previous war.

    Not only have the trend lines been changing from upward to downward, but this change in the trend lines is having a profound impact on debt. As long as trend lines are upward, it make sense to borrow long-term, and pay the debt back with interest. Once the trend lines turn around, borrowing and paying back with interest just gets the borrower into a deeper and deeper hole.

    The world has become increasingly "hooked" on long-term debt. It is this debt that has enabled companies to grow from small companies to international one; families to buy homes of their own; and governments to purchase much of their current infrastructure. All of this is a real paradigm shift, relative to say, the 1700s and 1800s/

    With the shift from upward to downward trend lines, there has to be a big increase in debt defaults, and an unwind of debt. With this debt unwind, cash flow of everyone (governments, businesses, and individuals). Instead of increased debt adding to cash flow, there is suddenly reduced debt acting to reduce cash flow. To make matters worse, the reduced demand (because of the reduced debt) brings down prices, and oil and other commodity price. With these lower prices, all producers of these commodities (farmers, oil companies, gas companies) suddenly have lower cash flow, even before the lower borrowings.

    All of this is a huge mess. As long as resource availability is in a downtrend, there is no reason to expect for debt to pick back up. This continuing debt unwind is what is driving the current recession. It seems to me that (1) long term debt and derivatives need to be unwound, and (2) we need to go to a new system that severely restricts debt and derivatives, before we can have stability again. Such stability, however, will come at a much lower level of economic activity than we have today. The paradigm shift I mentioned in paragraph two of this comment is going to have to start reversing to go the other direction (international businesses-> smaller business; people inheriting homes, rather than buying them; governments living within their means). After the unwind is over, we will find ourselves in a very different world.

    The debt unwind isn't what's driving the recession. You say so yourself Gail; it's resource limits:

    As long as resource availability is in a downtrend,

    Not only will more debt fail to fix the situation, any "stimulus" only makes matters worse.

    The only sort of stable system has to operate at a much lower level of economic activity and to do so woth next to no debt. Even "savings" - as in retirement monies supposedly set aside for future resources - will be questionable. That savings needs to be spent now on building up resources. Instead of debt, we need to "pay it forward". Instead of interest, money needs to decay. [I don't want to suggest that an economics of decline will everywhere be an inversion of economics of growth - YMMV.]

    The financial crisis is first and foremost an ecological and environmental crisis. Limits.

    cfm in Gray, ME

    There are a lot of things going on at once:

    Oil hitting resource limits -> economy cannot grow -> debt unwind -> reduced demand -> falling prices -> lower cash flow -> less drilling -> less oil in the future

    The debt unwind is not stoppable, and I am not suggesting that it should be stopped. We need to change our entire way of thinking, to an approach that does not use long term debt, and go forward on this new (in part, very old) basis.

    I am sure that it is peak oil and peak resources that are causing the debt unwind. This debt unwind is causing the financial crisis, which is one and the same as the peak oil crisis, even though a lot of peak oil people don't recognize it as such.

    The magniture of the debt unwind is huge. We are witnessing pieces of it every day, and it has barely started.

    The only way the debt unwind will eventually stop, is when society is able to move forward without long term debt. (Some short term to facilitate sales will always work.) But to move forward without long term debt, society will need to be much different. Companies without huge cash reserves will be very much restricted in terms of what they can do (say, opening a new mine or building a new deep sea well or opening a new restaurant), because they will be unable to use debt. Citizens will find it difficult to purchase houses or cars, because of the debt constraint. The total amount of investment in new infrastructure will be very much lower, keeping oil and gas production low. Business are likely to become smaller, and inheritance more important.

    It seems like one possible scenario is that the current unwind will lead to a world-wide monetary crash, and the world will need to set up new monetary systems. The world will go through a very difficult time while this is happening. The new monetary system(s) that are set up will be just like the old ones, and we will make the same mistakes all over again. Long term debt will again be issued. We will again try to ramp up oil and gas production, hit resource limits at a lower level than previously, have huge debt defaults, and crash again. This may happen several times, before those setting up monetary systems finally figure out that the world economy cannot grow long term, and long term debt won't work without growth. A different type of monetary system will be needed (no fractional reserve banking, amount of money constant or declining), since long term growth not possible.

    Brilliant, but Peak Oil is not presently driving economic decline. Economic decline has taken on a life of its own, hence the difficulty those mired in Peak Oil mindset have negotiating financial reality. My analogy is we are falling down an elevator shaft just below and slightly faster than the resource elevator.

    To successfully negotiate the coming crash you must avoid both resource scarcity and economic collapse. You get this. Few do. I've been hiding from both threats. Others I warned of Peak Oil invested to profit from resource scarcity rather than hiding and have lost almost as much as those who ignored me.

    Make sure you tell us what to do, not just what you see in the fog of the abyss.

    Cold Camel

    It would make for quite an interesting extended discussion to consider all of the ways that things will be different, and how one could best adapt, assuming that we somehow avoid a complete and hard collapse on the one hand, and that this is in fact not just a temporary downturn but a permanent paradigm shift. Here's a start:


    1) No debt! If you are still in debt, get it paid off QUICK!

    2) This means you must live within your means - actually a little below your means, because you will have to be saving up for things rather than financing them with borrowing.

    3) "Living below your means" suggests first and foremost that you do in fact have "means". If you have a source of income, you are a "have"; if you do not have a source of income, you are a "have not". See to it that you have a RELIABLE source of income. In a declining economy, this can never be taken for granted, but raises and improvements in your income are especially dubious. Security of income is hugely important; forget about opportunities for future gain - those will be increasingly rare and commonly fail to pan out.

    4) However you choose to earn a living, do all you can to hang on to it for dear life. Increasing numbers of people will lose their livihoods, and it will increasingly be hell trying to find some other way to make a living. Avoid doing anything that will make you more vulnerable to the pink slip.

    5) "Living within your means" also suggests that frugality is the lifestyle of the century (and probably forever). Learn how to live cheaply.

    6) "Living cheaply" means first and foremost giving up luxuries and non-necessities. Pare down your life to the bare essentials, then keep trying to pare down a little more. The 21st Century is going to be one long exercise in giving up things; get ahead of the curve.

    7) "Living cheaply" also means learning to do as much for yourself as you can. The less you need to buy, the better, for things in the marketplace and the money to buy them will probably be increasingly scarce. You know the drill: grow as much of your own food as you can, preserve it, cook your own meals, learn how to sewing & handcrafts, learn DIY maintenance and repairs, etc.

    8) In particular, strive to become as independent of fossil fuel supplies as you can. These may become increasingly hard to get and your income will probably not keep up with their prices. Again, you know the drill: insulate and tighten your home, use energy-efficient appliances (or preferably alternatives like clotheslines), invest in wood heat and solar water and space heating (and maybe some PV pannels if you can afford them), travel on foot or by bike whenever possible (and live somewhere that makes this possible to do).

    9) "Living below your means" and not incurring debt implies that you are going to be saving money. Be careful about where you park this money. There are risks inherent in just about every possible strategy, including hiding precious metal coins on your own property. It is going to be very hard to find any place to park your savings where the risks are not excessive relative to the returns on offer. It will still hold true that one should not put all of their eggs in a single basket; diversification is essential. In general, the farther away the people or instituions are to whom you entrust your money, the greater the risk that your trust will be betrayed; keep your money close to home, know the people with whom you are entrusting it, and watch them like a hawk.

    10) You can be doing everything right, but you will still be at the mercy of forces beyond your own control. It is going to be a bumpy, frightening ride down, so fasten your safety belt! Make lots of friends, especially of neighbors, and do everything you can to encourage everyone you know to hang in this together. Stay alert, stay wary and sceptical - especially of official pronouncements and propaganda.

    The above is by no means a complete list, but it is what came immediately to mind.

    WNC that's a very good post.

    Now that I think I'm in a safe, stable place, I'm starting to put out feelers about jobs, and looking the most for jobs I would have a natural enthusiasm for. Working as a "page" at the local library, working in an auto parts or hardware store, Home Depot (which is nearby) some odd stuff that a lot would not consider "plum" jobs except for the library maybe, but stuff I know I'd like, so I'd be much less in danger of a pink slip than at some job I hate, like bathing dogs and cats (done that!) or selling idiotic knickknacks.

    Also, think in terms of what they did for fun in the 1930s. No cable TV, no TV at all in fact, AM radio for the news and I wish they'd run Fibber McGee again, he's funny! Library for books, and there's a lot of fun in fishing and foraging. Find ways to have fun that are free or actually pay you, like collecting wild foods.

    Why on earth would you pay off your debt? You should be using whatever remaining cash/credit limits you have to purchase the unpurchaseable when the economy collapses. Pay the minimums until you lose your job and then respectfully submit an IOU.

    I ran into the lady who takes care of my daughter at school yesterday. They were looking for a house to rent. I happen to know they purchased a house three years ago. He got laid off and she makes chump change as a disability aid. I asked matter of factly if they were returning the house to the bank and they matter of factly replied yes. I suggested they stay as guests of the bank until the Sheriff shows up, which could be quite a while from now. The stigma is gone for those who didn't cause the problem. They lived within their means but the economy collapsed anyway.

    So to me, paying off the bank while they get bonuses, or even paid for that matter, is simply an obscene idea.

    Otherwise, I like your message. Simple is the new rich going forward for most of us.

    Why on earth would you pay off your debt?

    Because I'm expecting the deflationary version of the apocalypse. Cash will be king. Things of all kinds will be cheap, as people sell their possessions for whatever they can get. The eBay/garage sale economy, as Kunstler put it.

    Which is why I agree with Jteehan; Stop paying the bank, squirrel away your cash (not in a bank you fools! BURY it somewhere!) and spend your money on preps. Go bankrupt if you have to. Go into full on prep mode. And yes, things WILL become cheap, in the great sell-off, we'll be like all those little old Russian ladies selling everything they had in the train stations in the collapsing USSR.

    So, which will make you feel better? That you paid on your upside-down mortgage for six months and kept your credit cards current for six months, then lost your job and have about $100 to your name, or that you stopped paying on your upside-down mortgage and it took 'em 6 months to get around to telling you to leave, and said F.U. to the credit cards, bought preps with what cash you didn't bury, and when you lose your job you're much better prepared for the Apocalypse?

    If you CAN pay off your debt within say six months it may be easier to just do that, but most people here in the Empire have years and years, decades, worth of debt and the only thing that's happening in the next six months is they're likely to lose their job.

    So, which will make you feel better? That you paid on your upside-down mortgage for six months and kept your credit cards current for six months, then lost your job and have about $100 to your name, or that you stopped paying on your upside-down mortgage and it took 'em 6 months to get around to telling you to leave, and said F.U. to the credit cards, bought preps with what cash you didn't bury, and when you lose your job you're much better prepared for the Apocalypse?

    Neither. I would not take out a mortgage in the first place (and have not).

    Neither did I. I could have, in the late 90s and arguably should have. But I wanted the payment to be a slam-dunk to pay, make it about the same as rent, and mortgage payments were already getting significantly higher than rent. If I'd been less cautious, I'd have gone for it, but then if I were that much less cautious, I'd probably be sitting on an upside down mortgage on a place in a location I really don't like.

    Written by fleam:
    ... or that you stopped paying on your upside-down mortgage and it took 'em 6 months to get around to telling you to leave, and said F.U. to the credit cards, bought preps with what cash you didn't bury....

    Running up credit card debt in the months before a default is proof of fraud and will prevent debt from being forgiven in bankruptcy. Prison, seized assets, garnished wages or involuntary servitude may be in the future for such people.

    Where do you get this deflation argument from? Govt borrowing is 10% of GDP. Money supply is growing at another 10% of GDP.

    Even in January, where I think one can reasonably argue that things were coming undone, both the PPI and the CPI were UP! Gold is going up, not down. Wages are up. Healthcare costs are up up. Education costs are up up up. There is no deflation anywhere to be seen.

    Then there is this whole Peak Oil thing I've been reading about which as I understand is going to cause prices to spike wildly up. Food shortages. Resource shortages of all kinds. All that stuff made out of oil and natural gas is gonna get real expensive. If only there was a site that explained how much stuff was made out of or relied upon fossil fuels.

    The only thing going down are stocks and houses, which are not included in the CPI, only rents are. And existing home sales aren't even included in GDP calculations.

    Finally, Bernanke thinks deflation is a possibility. And I think it has been clearly shown that he doesn't know his ass from a hole in the ground. Inflation is the only possible outcome of this mess.

    Let's just say that I think Stoneleigh probably has it right. She's been pretty accurate so far. More so than most of the supposed experts.

    The gov't is trying to create money, but it's being destroyed too fast for them to get ahead of it - same thing that happened in the last Depression, as per John Kenneth Galbraith's book. A good read BTW.

    And on the local level, I think we're headed towards a largely barter economy. The common people, most of us in the US, have less and less money in our pockets, we're trading, scrounging, Dumpster diving, shopping garage sales for that 50c or $1.00 pair of sweatpants rather than pay $4 for 'em at Goodwill, etc.

    Result: deflation.

    Well, that's not the definition of inflation, but I know where you're going.

    As far as the government trying? They are most definitely succeeding.

    In the last week, Federal Reserve Credit surged $76.9bn to $1.907 TN. Fed Credit expanded $1.040 TN over the past 52 weeks (120%). Elsewhere, Fed Foreign Holdings of Treasury, Agency Debt last week (ended 2/18) jumped $15.3bn to a record $2.576 TN. "Custody holdings" were up $446bn over the past year, or 21%. M2 (narrow) "money" supply increased $11.2bn to $8.261 TN (week of 2/9). Narrow "money" has now inflated at an 18% rate over the past 21 weeks and has jumped $735bn over the past year, or 9.8%.

    Until we're bartering chickens, this is what inflation is, and it sure looks like it's going up.

    People have got less and less in their pockets, Wal-Mart is considered upscale out here, a lot of people shop at the plethora of Dollar Stores, sure the credit cards are randomly pushing people's rates to 30% and more, but the result is not their collecting that, but people then being pushed over the edge and defaulting. Car dealers practically can't give cars away. There may be a lot of money swishing back and forth at the upper levels, but they keep on finding that this or that fund or stock is an empty poke, a walnut that's all shell.

    So it's unsophisticated gut feeling, but I'll stick by my feeling that this will be another deflationary Depression.

    If I knew for sure, I'd be a rich man.

    I guess in the end I don't really care. Neither is particular good.

    Hang in there and thanks for the chat.

    IMHO, lots of us are going to be much poorer. Also, it is possible that there are lots more dollars printed in the future, but I may have fewer of them-the rest might be in overseas bank accounts or some such. Deflation for me may mean that what I have to sell is not worth much in comparison for things I want to buy, like overseas oil.

    Mish has written about this extensively and a key thing to remember is not the monetary increases but the destruction of debt. Why is this important? Because in this economy debt is money!

    So what has happened? Someone tracked this either over at Naked Capitalism or at Denninger's Forums (I forget which) and said they found evidence that the central banks had pumped nearly 8 trillion dollars into the world economy. But this was counterbalanced by the destruction of over $40 trillion or so of wealth (someone's debt, which is wealth to whomever owned the debt). So far, the printing mania hasn't come close to the level of destruction of money in the global economy. Further, the inflationistas and the deflationistas are much closer than they are willing to admit. Both of them are talking about destruction of debt/credit in vast sums. Both of them are talking about how banks are not lending, even with all this capital being pumped into their coffers. And both camps also foresee a danger of hyperinflation downstream. The major difference is that the inflationistas keep implying that hyperinflation is right around the corner. Someday they'll be right but a stopped clock is right twice a day too.

    For the moment, the global economy is acting like it is deflating. And worse, it has farther to go before I think we'll see hyperinflation. The US Fed won't hyperinflate willy-nilly. That's their last resort option. They won't play that card until the borrowing window either closes or effectively closes (interest rates go so high that it's no longer possible to borrow). Then and only then will we see the likelihood of hyperinflation come into play.

    Now personally, I'm expecting a hyperinflationary blowout, just not for a few more years. Two years ago people were asking me how long the market could act as insane as it was then and I reminded them that it acted pretty darned nuts for 3 years in 1979-1982. One of the few things Keynes said that I agree with was "The market can stay irrational longer than you can stay solvent." I fully expect the market to destroy 99% of those people who are playing to get rich off of a hyperinflationary blowout. Some few of them will score but it won't be deliberate. It will be accidental.

    In the meanwhile, that takes most of us right back to Westexas' longstanding ELM recommendation. If you are debt free, own your property, have a way to produce food, and can produce something (food or otherwise) that you can barter, you will be richer than many of those around you if the USA goes the way of the USSR. And even if it doesn't you will still be better off than most people in this country during economic hard times.

    Hello Greyzone,

    Good points, well said.

    Minor correction:

    ELM = Export Land Model

    ELP = Economize, Localize, Produce

    I think you meant ELP.

    Thank you, and I did mean ELP!

    WRT inflation vs. deflation:

    Inflation is too much money chasing too few goods; deflation is too little money chasing too many goods.

    You can have either inflation or deflation in an economy that is either expanding or contracting. The thing is, though, that to get inflation in an expanding economy, you need to have the money supply expanding even faster than the economy is expanding; in a contracting economy, you only need the money supply to not contract as quickly as the economy.

    The exact opposite applies with deflation. In an expanding economy, you only need the money supply to not grow as fast as the economy, while in a contracting economy, you need the money supply to be dropping even faster.

    Now, if you accept my assumption that we are in a paradigm shift and transitioning to a declining economy, then note that we WILL have inflation UNLESS the money supply contracts even quicker than the economy.

    It appears that this might actually be happening at the moment. I do not take it as a given that this MUST have happened, and I do assume that this is exactly what the FedGov policymakers should NOT want, as it makes it more difficult for them to service the Federal Deficit. On the other hand, they are acting as if they do not believe or know that paradigms have shifted and we are now entering into long term decline; they probably still believe that we can grow our way out of these expanded federal debts.

    I must assume that eventually they will have no choice but to face up to reality. At some point, they will probably be forced to either repudiate the federal debt explicitly through sovereign default, or else to liquidate the federal debt implicitly through hyperinflation of the money supply.

    Thus, I continue to operate under the assumption that what we have at the moment is deflation, that what we are likely to have within a few years is hyperinflation, and that this is likely (but not certain) to be followed by a long-term deflation.

    RE: Paying off debt vs. conserving your money for other priorities (and sticking it to creditors):

    Maybe I'm just "old-fashioned", but I've always believed that one must honor one's word. If you promise to repay something, then come hell or high water, you move heaven and earth to make the repayment.

    Then again, maybe "old-fashioned" is going to become "new-fashioned" again, in a lot of different ways.

    Maybe if you live in the anonymity of the city, then walking away from your debts, sticking it to your creditors, and dropping out of sight is a viable strategy. For those of us living in small towns, though, we are not anonymous. Our relationships with our neighbors do matter, and our personal reputations do make a significant difference when it comes to establishing and maintaining those relationships.

    If it becomes known in a community like mine that you are not a person who honors his word, that gets around, and it will make a difference in how people deal with you, especially when times get hard (as they are going to).

    IMHO, at least for small town dwellers like myself, pocketing your loan repayment money and sticking it to your creditors is being pennywise and pound foolish. You don't know what the future repercussions of that act will be, but there is a very good chance that they will be huge and might very well cost you a lot more than anything you might be able to pocket.

    Finally, I have to look at the guy I see in the mirror every morning. I want that to be someone I can respect - certainly someone I can respect a lot more then the thieving banksters and politicians. YMMV.

    Frugal living is one of those things which is good for the individual and bad for society. Businesses lay off employees or go belly up due to a lack of customers. This cuts the number of customers for other businesses and cuts revenue to local and state governments which in turn continue the downward spiral by lay offs and bankruptcies.

    And Americans have been very good at being non-frugal, in fact better at being non-frugal than anyone. Real frugality has mostly died out with the Depression generation. But, as much as Americans now want to continue being non-frugal, for the good of Society of course, they're being forced into frugality.

    Take for instance the lady whose story is all over the net, who lost her house and job and lives in her car with her two Golden Retrievers. Sleeps at night in a parking lot set up for the car-living homeless women to sleep safely at night, in Santa Barbara. Think she's eating out at upscale restaurants? Think she's showering any more often than she absolutely has to? Since that story came out a year or so ago, she may not even have that expensive ol' car any more, and is even more frugal. The dogs may have even been found homes by now, no more dog food expenses.

    And so it goes, job loss and house loss and illness and all the things that are driving so many Americans into the food banks and homeless shelters, it's an epidemic of frugality! And all against our will.

    Frugal living is one of those things which is good for the individual and bad for society. Businesses lay off employees or go belly up due to a lack of customers...

    And deflationary expectations, to the extent that they are held only make it worse. If you want to buy X and have the money, why not wait until the price has fallen even further? People claim that computers/electronics disprove this effect, but computers/electronics have been on the exponential improvement curve for decades (Moore's law), whatever depression of sales is caused by the effect has been relatively constant over time. Krugman thinks we are very close to a deflationary spiral. And he insists they are very hard to get out of.

    bad for society.

    Incorrect. Frugal living is good for society. It is bad for this debt-bloated, fantasy-based society. In the end, it is even good for this society for it is the only way out of this mess in the long term.


    What we are talking about here is Keynes's "Paradox of Thrift". There was considerable debate about it within the economics and public policy establishment even when we were operating within the growth paradigm. Now that we are transitioning into the decline paradigm, its continued validity must be very seriously questioned.

    If an economy is in decline, then the "pie" which might figuratively describe how resources are allocated in that economy, is shrinking. There is less to go around, and hard choices must be made. This is what I meant when I said that the 21st century would be one long exercise in giving up things.

    This being the case, trying to "stimulate the economy" to achieve a "recovery" is exactly the wrong thing to do. The only policy that makes any sense is to manage decline in a manner that conserves and carefully allocates resources as efficiently as possible, minimizing human suffering and mitigating the pain and other social consequences of decline.

    The more frugal that individuals and households can be, the less their demands are upon that shrinking pie. Thus, rather than being "enemies of the state", they are being great patriots! Encouraging individual and household frugality is exactly the right thing that policymakers should be doing.

    I suggest that everyone needs to be extremely sceptical of most of what is being spouted off by government officials and "experts" in the mainstream media. Almost everything they are saying right now is almost certain to be wrong.

    It is not clear to me whether paying off debt makes sense. If it helps you keep your property, it is probably worthwhile. Having debt may be helpful, If you need to move, and can't sell your house. If worst comes to worse, having a lot of debt leaves you with the option of walking away.

    I think we will need to plan to live on what we are making, and to try to store a little for hard times, when crops fail, or there are other misfortunes. What we store may need to be in the form of food for the future, like the Mormons do, rather than money. The problem is that storing food is difficult.

    I think having a lot of local friends and neighbors will be helpful. You may want to join a nearby church, whether or not you believe any of the teachings. I would suggest a liberal church (Unitarian, Episcopal, some Lutheran) rather than one of the conservative ones that believe that the Bible is be taken literally.

    Though I have already paid off all my credit card debt, I am not sure it was wise. Lately I have decided that the goal should be to have assets free and clear and/or debts with little or no associated equity. A bunch of equity stranded with a debt (a house with 20% equity, a half-paid car) is at great risk. A paid off house or car has obvious value. A credit card bill with no job has no obvious liability in a credit-averse world.

    Working on your premise, WNC.

    NO DEBT MEANS: No loans extended to others. No counterparty debt. No loans, particularly none to anyone you don't personally know.

    No counterparty debt means NO FIAT CURRENCY, as it is a debt to a soverign state. The poison to the individual works against the state as well. Capital must be parked elsewhere.

    No counterparty debt means NO CORPORATIONS, as corporations exist only in the credit based world. Shareholder equity is a form of debt. You exchange hard earned cash for the promise of a share of corporate income in the form of dividends or share appreciation. This is debt.

    No debt means NO PENSIONS. Pensions are a complex loan from tomorrow's workers to today's retirees.

    No debt means NO SOCIAL WELFARE NET. Welfare is a loan from today's workers to today's unemployeed.

    No debt means NO INSURANCE. Insurance is a promise to pay if something goes wrong. A promise is a debt.

    No debt means NO LOANS FOR EDUCATION, primary or secondary. Someone will have to fund the education of children, so it must come from family as internal debt to the family.

    No debt means NO PAPER TAXES OR PROFITS. Taxes must be in terms of real objects, because the government will not accept paper that others refuse.

    No debt means NO ELECTRONIC TRANSFER OF FUNDS. Payment must be in real terms.

    No debt means CONSTRAINED TRADE.

    Boy, WNC, this sure is bleak.

    No debt means SEVERELY CONSTRAINED PRIVATE PROPERTY RIGHTS, since without debt tax structures for viable governments becomes too heavy. So governments will sustain themselves through conscription (think Mafia).

    No debt means NO INTERNET. How will you pay for electronic information?

    And last, but not least, resource decline and no debt means NO INCOME. Think about it. On average, Joe the Plumber will be losing business, losing his job, downsizing, whatever. Most of us will be "Have Nots" pretty soon as our jobs, savings, pensions, insurance, trade and friends fizzle out, and debt is not an option. You are Joe the Plumber or Joe the Plumber is your customer. Even if you are the most efficient producer, your customers will have less and less ability to pay. Considering that most Americans are starting pretty close to zero net wealth, we don't have far to go. Sure there will be exceptions, but that's like betting on the lottery. I've been searching for years and I just can't find a way to prevent myself from becoming poor.

    At least I have an idea of a way to keep from starving or becoming a slave.

    Sadly anyone who imagines a world with continued impersonal debt must be delusional. Humans aren't willing to loan at negative interest which is what is required for debt to exist during a period of resource decline. Would you loan your neighbor ten gold coins if he promised to return nine tomorrow?

    Be prepared for rock bottom. Create a life that requires no income.

    Wow. I didn't plan on writing such a pessimistic post. I hope somebody can shoot down my arguments with logic I can follow. Unfortunately all the great minds on this site are miserably pessimistic. We make a dour crowd.

    Cold Camel

    I think there is a possibility of very short term debt - paying for the internet and perhaps for fire insurance on your house. Here you are only getting credit for a fairly short term transaction.

    What doesn't work is long term care policies, and whole life insurance policies. Social Security only works as a transfer payment, based on what is available at a given point in time, with no guarantee that 10 year from now, or 20 years from now, there will be an equivalent amount. If the world is poorer, it is doubtful that there will be as much funds available then.

    Currency can be tied to some object of high value (perhaps gold, or food). Again, it cannot be a long-term obligation. It might have an expiration date.

    Cold Camel:

    Bleak??? Some of the doomers here consider me to be a hopeless optimist! ;-)

    I don't believe that we will be going back to exactly the way things were back before the fossil-fueled industrial revolution, but studying how things were and people lived then does provide some useful guidance for imagining how things might be in the future.

    I note that while debt was not unheard of in those days, there was very much less of it, and it tended to be more in the nature of short-term personal loans. Money, of course, was the hard stuff - gold and silver. There was an economy, and society managed to function, but you are right - a lot of the features of an advanced economy that we have been taking for granted probably can't continue in a declining economy where there is a decreasing amount of debt sloshing around.

    Remember that I did say that the 21st century was going to be one long exercise in giving up things. A lot of the things you have mentioned are things that a lot of people are going to have to give up sooner or later and learn to live without.

    I have no doubt that there will be a lot of experimentation and ingenious innovation and adaptation, so it is quite likely that to some extent, it will not just be a matter of giving up some of these things, but of replacing them with something different. A lot of what worked in the old economy will no longer work in the new economy. The converse is also true: some things that might not have worked in the old economy will now be found to work a lot better. It only stands to reason that, given such a massive paradigm shift, we should see a lot of consequences and changes.

    I'm with you WNC.
    I'm doing my best to prevent a decline below 1870 in the U.S. I intend to thrive in a world in which I won't have access to oil, electricity, or welfare. It ain't easy, but I've cracked the nut. My family and I will be warm, fed, sheltered, surrounded by sane friends and productively engaged. I think.

    So far the world has returned to 1997 from 2007. We still have internet and electricity and oil consumption is dropping towards 1997 levels also. The economy can revert all the way to 1950 without significant disruption worldwide, past that, Hell breaks loose. No way the decline stops in 1950. Parts of the economy are headed for the 1930's this year. I can't predict the future, but I don't imagine we'll skip the 1940's. Maybe we hit the 1930's, bounce back into the 1940's then revert some more.

    To be safe I should prepare for feudal Europe, but I can't figure out how, nor do I really want to inhabit a world with slavery. I guess I'm an optimist too.

    This kind of discussion has been limited because so few of us can take significant practical steps to protect ourselves from a significant social regression. I've been working on my plan for six years and it doesn't get easier. Most people are so screwed, even the enlightened ones don't want to talk about it. We perceive the decline as so bad, there is no point in preparing.

    I've settled on a target of 1870 because, (1) I can buy 20 years,(2)I can envision it, and (3) I can achieve it. Sadly, for almost everyone else I know, one of these three ingredients is missing. They can't see the need, can't see themselves living that way, or are to constrained in their personal reality. Who wants to replace a pleasant dream with a nightmare reality?

    I don't expect the future to resemble the past in any way either, but I use a regressive timeline as a rough template. It just doesn't make sense to expect economic or social improvements during a period of resource decline. The internet may stay in my 1870 world, but we won't be flying in personal airplanes. Nor will BAU continue but with electric cars and tidal power.

    I'm playing the odds. The odds are good the mainstream is optimistic. I'd rather be pessimistic than optimistic and dead, or cold, or hungry.

    Sorry for the personal rant. I owe quite a bit to the visionaries that post here. If I listed their names, I'd leave someone out. Thank you all.

    Cold Camel

    This recession is different in the same way the boom times of the 1990s were different. Pundits expected the boom would not end and now they expect the bust won't end. Fortunately pundits are wrong at least 50% of the time.


    With all due respect, I'm afraid that you are still living in the old paradigm. The old paradigm assumes that the upward trajectory continues indefinitely, with cycles of expansion and contraction around the secular trend. Given such assumptions, it would seem perfectly logical to look to past history for guidance on future projections. Thus, in the past, predictions that expansions or contractions would continue unabated forever were always eventually proven wrong, so it would seem to make sense that predictions that the present contraction will continue unabated must also be wrong.

    Unfortunately, we are in the midst of a paradigm shift. The asumption that the secular trend upward in economic growth will continue is no longer valid. There are now good, multiple reasons to believe that we have no entered a period of protracted economic decline, which must continue until society has reached a lower level that is sustainable given severe ecological and renewable resource constraints.

    If this new paradigm is in fact real, then projecting the future based upon past patterns is inherently doomed to failure.

    I concede the possibility that any recovery will not reach the levels that existed in the past but a recovery will most certainly happen in the future just as long periods of growth always ended. From the point of view of working families the peak of purchasing power was way back in the 1970s. Almost all economic growth in the past 30+ years has gone to the investor class. The paradigm shift happened long ago for most people.

    If I heard it right on the radio this mornng both (all) of Philadelphia's major newspapers are now under bankruptcy. The Inquirer and The Daily News.

    It's not quite as bad as it sounds. The owners bought the papers for too much money and were required by their loan agreement to pay ever-increasing amounts on the debt each year. But advertising revenues have been seriously hit. But the newspapers generate plenty of cash. They'll be able to run the papers and hopefully be able to re-negotiate. That's the good news.

    The bad news is that the owner of the papers went to the governor asking for a bailout of the papers. Forget the parties. This is a very dangerous road for newspapers to take, but they have a choice between being beholden to the government or to Wall Street and their creditors. Both options seem fairly bad for expecting the Fourth Estate to have much impact on the disaster we're running towards.

    So are GM, Ford, and Chrysler now:

    Monday, February 23, 2009

    "government soliciting DIP financing for automakers

    the journal.

    Still, people involved in talks with senior Obama administration officials said that the administration believes that the option of Chapter 11 filings by the two auto makers needs to be seriously considered.'

    "...this locks in that the carmakers, unlike the banks, will be hustled into bankruptcy. given the general incompetence on display in both washington and detroit these days, i am hardly sanguine about the prospect. the hope is for reorganization, but the chance of liquidation is not small. either way, massive tranches of jobs will be cut, denting already-strange government notions of demand management. and i'm half certain no one in congress or the administration has considered the potential fallout to synthetic CDOs."


    So what to do with GM & Chrysler (article topside)?

    Cast off Chrysler to the sharks, sit back and enjoy the show. The US auto market has just become too small to support more than two domestic manufacturers, given the enroads of the Japanese. Given that the market is more likely to shrink than grow, there just is no need or place for the smallest of the "Big 3" (which now is really "Half of the Big 4 plus a half-pint").

    Then make GM go through a Chapter 11, and really do a good job of restructuring it. Sell off Saturn, Hummer, and even Opel, shut down Pontiac, merge Buick and Caddy, merge Chevy and GMC - or move all of the trucks into GMC and make it THE truck division. Say bye-bye to lots of dealers and to legacy union contract and post-retirement benefit millstones around their neck.

    Come up with some way to cushion the blow to the suppliers so that there are at least enough kept in business to make sure that Ford and a slimmed-down GM can stay in operation.

    Why do I keep thinking about our military?


    The joke in my town is you can tell when a business is about to fail by looking for the Grand Opening sign on the window.

    Along those same lines - we went to Blackhawk Plaza Sunday afternoon, which is a small high end mall in a high end location in the East Bay area of Northern California. Now it was raining a bit, which usually puts a damper on Californians' activites, but the place was deserted. Several vacant storefronts, and several "Opening Soon" type signs. The eating places were all empty, except for the bar at Blackhawk Grill which had a few patrons watching whatever was on TV. Not a good sign in an area where displays of excess money are the norm.

    My wife drug me to Southdale Center in suburban Minneapolis this weekend. Their supposed claim to fame is being the first "indoor" shopping mall, but also benefits from being located in a higher income suburb. There were plenty of people there either at the cinema or at the town square type events in the common areas, but the amount of vacant stores amazed me. It has probably been 4-5 years since I last visited that particular mall and it is one of the most vibrant shopping areas in the greater Twin Cities area. The one busy store we did visit was the discount chain Marshalls. When my spouse couldn't find what she needed there we went to Macys and found similar prices as most everything was discounted 30%, 50% and even 80% off original. We left without purchasing anything. Designer jeans at 50% off are still over $100, a pill even my wife wouldn't swallow when our job security is lacking, pay is frozen and bonuses are distant memories of better times. The economy, at least retail, is far from the bottom.

    Canadian Retail Sales Record Biggest Drop Since 1991

    (Bloomberg) -- Canadian retail sales fell twice as fast as expected in December, the biggest drop since January 1991, as consumers curtailed spending on cars, building supplies and clothes.

    Retail sales tumbled 5.4 percent from December, the third straight drop, to C$33 billion ($26.5 billion), Statistics Canada said today in Ottawa. Sales fell 2.4 percent in November. Economists expected a 2.7 percent drop, based on the median of 17 estimates.

    The drop in retail sales follows reports of the country’s first trade deficit since 1976 in December and record job losses in January, as Canada suffers its first recession since 1992. The central bank’s monetary policy panel, led by Governor Mark Carney, lowered its benchmark interest rate to a record-low 1 percent on Jan. 20, and said more rate cuts may be needed to jolt the economy.

    Fed Ex Chairman to speak on Electrification of Transportation at National Press Club Today

    Event Date:
    Feb. 23, 2009

    Event Type:
    NPC Luncheon

    12:30 PM

    Sponsored by:
    Speakers Committee

    Event Location:

    Frederick W. Smith, chairman, president and CEO of FedEx Corp. and co-chairman of the Energy Security Leadership Council -- will address a National Press Club Luncheon on February 23rd in a speech titled
    "Confronting the Energy Threat: Electrification of Transportation as the Path Toward A Stronger Economy and Enhanced National Security."

    Otherwiae occupied with family health issues

    Best Hopes for a Spreading Meme,


    So the Early Rally Fizzles in the stock market. That lasted all of 2 hours.

    The question is: What is the bad news, new details on the Citigroup deal or the news that Biden's the Stimulus Czar!

    thinks it's a verdict on Obama's bank plans.

    Wouldn't it be something if Barack Obama is the first black President - and the last President.


    No. Quite possible, and the probability is rising literally by the hour.

    Stocks are recovering a bit. Is it because of the White House briefing?

    Never mind. Off the cliff again.

    I was going to say, "White House briefings always scare the market these days", but then I checked Yahoo and see that the market already said that more eloquently than I.

    Edit: "Anything but nationalization" says Obama.

    What other options are there? "Bankruptcy" says the market.

    I still expect nationalization, only called something else, though.

    I don't see why people are so scared of nationalization. I think it's better than just handing over piles of cash, never to be seen again. As long as it's temporary. Just nationalize, break up into pieces, and re-privatize with much more stringent regulations. To me, that's better than saying "here's a couple hundred billion, try to do better next time."

    Why nationalize or bailout? Bankruptcy nationalizes depositor assets only, and nail the bondholders and stockholders. It would still be bad, and likely the US could only do one at a time, but it's still the way to go. IMHO

    Why nationalize or bailout?

    The claim is that whatever you do you gotta be real careful. Just letting Citi fail would mean any debts owed bu Citi to other apparently healthy banks would be written off, causing cascading failures throughout the system. It is not even clear if a nationalization announcement might not set off this sort of reaction. I think we are in a situation where nothing can be shown to have high enough probability to work, but where the action cannot be delayed much longer.

    They've nationalize 14 banks this year and counting. They nationalized about 1000 during the S&L meltdown.

    We're just a nation of labels, whose definitions are frenzied-up by the media that does America's thinking.

    At least here on TOD, ones opinion's are shared openly no matter how stupid I may find them. And I'm quite sure people click the idiot button next to my name all the time. But at least we're trying to discuss the issues.

    In this case, your plan is as good as most. I really could use a couple hundred billion though. I least I would make sure everyone was fed and had a roof (full of solar panels) over their heads.

    Denninger says look out below.

    Interestingly, City and BOA are both still up today, so their investors like what they hear -- just nobody else does.

    Denninger is not very hyper today. Almost sound resigned.

    Edit: Looks like the S&P wants to retest the 52-week low before close today. Looks likely it'll be an ugly until the bell. Then the market can think things through and decide whether to bounce or set shiny new lows tomorrow.

    Yeah, maybe. The thing is, if you haven't sold by now, what is it exactly are you waiting for? Most people never sell losers, they ride them to the ground. As for the government saying one stupid line that sets things off, are you kidding me? The whole of the US government is making Biden seem as quiet as a mute. They've exhausted all possible combinations of stupid words and sentences and are left with nothing but repetition.

    I've said this 100 times: you might as well get in the game, because if the DOW does go to zero your cash will have the exact same value.

    On another note, today I converted another pile of green pieces of paper into a Phoenix System 4840P. Now I have electric transportation in my survival kit. http://www.electricrider.com/crystalyte/phoenix.htm

    The thing is, if you haven't sold by now, what is it exactly are you waiting for?

    My feeling is that there are a lot of "buy and hold" investors still in the market. They've lost half their retirement funds, and are hoping for a bounce back (temporary or otherwise). They may eventually reach the point where they decide losing half is better than losing all.

    My impression is that the experts' advice is getting darker. It started out, "This is just normal ups and downs, don't change your investment strategy." Then people started saying, "If you're young - below age 45 - you have plenty of time for your portfolio to recover." Now you have people saying, "If you don't have 80 years before retirement, you should reconsider" or even "Buy and hold doesn't work anymore, we need to save, not invest."

    I agree with you about "experts" getting gloomier.

    Already, the Producer and Consumer Price Indexes have continued increasing in January, demonstrating that the specter of deflation is no more than a Bernanke fantasy. Once inflation reappears in earnest, accompanied by higher interest rates caused by the excessive budget deficits, Bernanke will not rein in money supply immediately, as he currently claims he would; the unexpected (to him) resurgence in inflation will cause hysterical denial and delay in necessary tightening for at least a six to 12-month period.

    The whole article is worth a read. http://www.prudentbear.com/index.php/commentary/bearslair?art_id=10194

    AIG Seeks More US Funds As Record Loss Looms

    American Insurance Group, the insurance giant that is 80-percent owned by the US government, is in discussions with the government to secure additional funds so it can keep operating after next Monday, when it will report the largest loss in U.S. corporate history, CNBC has learned

    Sources close to the company said the loss will be near $60 billion due to writedowns on a variety of assets including commercial real estate.

    That massive loss is likely to spur downgrades in its insurance and credit ratings that will force AIG to raise collateral that it doesn't have.

    Case in point for the "why not nationalize" crowd.

    Speaking of nationalizing, when do Fannie and Freddie ask for more money next?

    Feds: Corrupt judges jailed teens for cash

    Hillary Transue, 15, was "sort of shocked and taken aback" when a judge sentenced her to a wilderness camp for mocking an assistant principal on a MySpace page. She wasn't alone. Fourteen-year-old Phillip Swartley got nine months in a boarding school for pocketing change from unlocked vehicles. Now two Pennsylvania judges have resigned after prosecutors said they took kickbacks totaling $2.6 million in exchange for increasing headcounts at private detention centers.

    I have to say that that is REALLY SICK!

    Private detention centers, private health care providers, private banks, private profit at the expense of we, the People... It's ALL SICK. Sick unto death.

    Those judges should have to spend some time in the detention centers.

    Just a reminder to all of you out-of-whack Rick Santelli fans, his employer GE has already received 5 Billion in direct government assistance and another 129 Billion in loan guarantees all because his employer over-extended itself and couldn't refinance its huge debt. Presumably adding extra bathrooms to handle all the crap flowing from CNBC.

    Maybe we should let GE fail.

    Short term GE debt - 193,650,000,000
    Long term GE debt - 300,067,000,000

    Regardless of what anyone thinks about Santelli, we actually should just let them all fail. Much of this debt is a combination of mortgage loans that were never repayable in the first place, coupled with derivatives bets based on MBS instruments created from those fraudulent loans.

    Just let 'em all fail. GE, Citibank, JP Morgan - let 'em fail.

    If you consider for a moment that in a true bankruptcy proceeding, the obligations of these companies would be paid back at pennies on the dollar (because that is all they are really worth), we'd be better off than we already are. We've injected almost $400 billion into Citi alone, via capital and loan guarantees on bad debt. Citi's market cap is a mere $12 billion dollars. Does it make sense to pour $400 billion (and counting) dollars into a $12 billion company?

    The best thing about mass bankruptcies is that it would level the playing field, reducing many of the "wealthy" to not wealthy status and allowing different persons to move in as owners and managers of the remains of those companies. Instead, Obama is busy repeating the sins of George Bush, bailing out his banker buddies as fast as he can throw YOUR cash at them. This is supposed to be an intelligent response? Obama is nothing but another Washington corporate shill, just like his predecessor. (What happened to all the infrastructure work we were promised? It got swept aside in favor of a few billion in road construction and trillions in banker bailouts. Obama is a liar as well as a shill.)

    Note: I am all for better regulation, as the shambles called the SEC has proven completely incompetent at regulating the markets or preventing fraud (Madoff or Stanford anyone?). But shoveling taxpayer money at failed institutions is just pure stupidity. Think about what could be done with $787 billion dollars if we focused on building out rail and electrifying rail. Instead it's going into financial black holes like Citibank.

    So I say just let 'em fail! Real failure punishes those who failed and is cheaper for us to pick up the pieces. The government shouldn't nationalize Citi. It should shut it down via the FDIC. The only obligation the government should have here is protecting the depositors via the FDIC. The stockholders, the bond holders, and the entire management team can just go twist in the wind.

    I don't mind helping out companies/people who've come on hard times through no fault of their own. I just think it's important to separate the miscreants from the misfortunate.

    The difference to me is that Mr. Santelli's company gets to default on the loans but keep all the buildings while Joe Sixpack loses the building. Additionally, corporations come out of bankruptcy with stellar credit ratings while individuals are barred for years from participating again in society.

    It's this bailout my corporation, but not my neighbor attitude that pisses me off about GE/CNBC/Santelli

    However, if the rules in BK were the same for Corporations and Individuals with some of the exception noted above being equalized either way, then yes, let those who fail fail. I'm already unemployed so it matters less to me.

    They're all just mad over there because they just got notices that the $35 options they got 10 years ago are about to expire. At least there is some justice.

    I understand about safety nets and helping those who fall into hard times through no fault of their own. But the situation with 90% of the major banks is purely malfeasance. They argue that these people should never have taken out these loans. I ask the banks "Didn't you do due diligence before extending that loan?" Many of these loans fail basic tests that used to be in place for anyone trying to get a loan. These banks made clearly bad loans. Let them fail for it. The entire financial system is going to be a mess anyway. All they are trying to do now is preserve the status of the people at the top when those people are the ones that created this mess. If we let them fail, it costs us less and it ensures that the majority of these miscreants don't profit from it.

    And that includes GE, Citibank, BoA, etc.

    But shoveling taxpayer money at failed institutions is just pure stupidity.

    It's not stupidity. They are ripping the taxpayers off blind and will do so until the taxpayers and citizens wise up and take bold action to stop it. I'll leave the various ways that might be done as an exercise for the reader. One hint though, it's not going to depend on voting. Look how much change we got last November.

    cfm in Gray, ME

    Greyzone wrote: "Obama is a liar as well as a shill."

    You just described 99% of our current sitting politicians as well as 99% of those who are waiting in the wings for 2010 elections, 2012 elections and on and on. The only (extremely faint) hope is to STOP voting each and every time for one of the two parties. Please!

    My optometrist is also my State Senator. Never gave a thought to politics till after Katrina.

    He ran on a slogan of "People are Dying and no one is doing anything about it" (Mortality was up 48% after Katrina).

    Income down by 1/3rd (less time to practice medicine), but he is enjoying it.

    One City Council member (former GM for New Orleans Saints football team) could be making $1.5 million/yr in Miami or Seattle, but chooses to stay and work on recovery in New Orleans.

    Best Hopes for better politicians,


    The CEO of Total was just on CNBC. He said that the worst case would be a spike in oil prices, due to supply problems, before we see an increase in demand. That is of course what I expect to see--a combination of voluntary + involuntary net export reductions outpacing the decline in demand, with future net export declines being mostly involuntary.

    But wouldn't the voluntary part of the net export reductions be terminated as soon as the target price of say $80 was struck?

    eastex -- And there, IMO, is the $64,000 question. I'm not too surprised OPEC seems to be showing some collective discipline. I figured if it didn’t happen on this pricing slump then perhaps the next. But what happens, as you offer, when prices increase? If prices do rebound in the next 12 months or so, will those OPEC members with excess capacity accept the proposition their reserves are worth more being kept in the ground then trying to boost cash flow some and risk driving prices back down? Those excess capacity owners are watching Mexico et al declining at significant rates. Will those countries just increase production enough to offset the declines of the other exporters as well declines in the net consuming nations?

    Lots of possible answers all with varying shades of gray. As usual, only time will tell.

    By the end of 2012, our middle case is that the top five's post-2005 cumulative net oil export capacity will be about 50% depleted. I estimate that they are shipping about one percent of post-2008 cumulative net oil exports about every 50 days.

    Also by the end of 2012, my guesstimate is that combined net oil exports from Canada, Venezuela & Mexico will have declined to about 2.8 mbpd or so, versus 5.0 mbpd in 2004 (EIA).

    In other words, I think that involuntary net export declines are going to very quickly be the norm, especially among top net oil exporters.

    A short reminder: In the time of period that it took a young person to go from birth to high school graduation--18 years--the US went from the discovery of the largest Lower 48 oil field, the East Texas Field (1930), which was capable of meeting about one-fifth of world demand at the time, to net importer status (in 1948).

    As we're talking about a coming depression, we can also mull over the question of supression, the supression of knowlegde, and inconvenient truths.

    Cheap oil is a bad idea. It's a sign of how bad the economic situation really is. It's also going to be bad news for an eventually recovery because we are going to need to borrow billions from the Gulf Sates, and if they don't have it to lend, this could be very problematic. There's also the problem of political instability in the Gulf if the price falls to far in the wrong direction. Having to send an army to the gulf, on top of all our other commitments, would be yet another costly adventure, with an uncertain outcome. One things for sure, the US Army will never reliquish its control of Iraq, which arguably contains the last, great, untapped, source of good oil on the planet.

    Yesterday I saw an old interview with Iraq's Saddam Hussein. It was interesting. He didn't want to look at the questions in advance, and he spoke very rationally and intelligently. He was asked whether Iraq had weapons of mass destruction, and he replied truthfully that Iraq had no weapons of mass destruction and anyway it was impossible to hide them anywhere, you could hide them in your pockets like a pill, especially with dozens of inspectors searching high and low for them.

    He was then asked about the importance of Iraq's oil and why their was a conflict with the United States. Saddam said, "If you want to control the world, you need to control the oil." He then mentioned that if the United States succeeded in control the oil of the Middle East it would effectively control the economies of Japan, China, India, France, Germany, Britain and eventually even Russia. It then struck me that a ruler like Saddam, who knew where lots of political skeletons where buried in the Middle East and beyond, after all he was a CIA asset for years, like Bin Laden, had to be executed, basically to shut him up for ever.

    I was talking to a lady I know who works for a large British bank the other day. I was in London for a visit and we had lunch in a place I know in Soho. She told me something interesting about the current financial crisis, which may be of interest. She told me that the main reason the UK government doesn't take over the entire banking system, which is the only sensible way forward, is because they don't want to take over responsibility for a financial sector that is insolvent, but more importantly because if they nationalised all the banks they would have access to the books and they don't want that either, because then it would be impossible to hide the true extent of the collosal loses that have been incurred. The UK and European banks are arguably in an even worse position thant he banks in the United States, believe it or not!

    Many British banks have hidden their losses in subtle, offshore accounts, and the government likes it that way. They are desparately trying to buy time and hope that something will turn up to save the day at the last moment. In reality, according to my source, the entire UK and European banking system is insolvent and the losses are stratospheric. If this news gets out in the wrong way, at the wrong time, without due 'preparation' the consequneces could be disasterous for the economy and political instability.

    The European banks have leant heavily to the economies of 'New Europe' or Eastern Europe, and they are now teetering on the edge of an abyss. They cannot even pay the interest on their loans. This year alone it'll be over 500 billion dollars, which they don't have. The total ammount the European banks have supplied to Eastern Europe is well over 25 trillion dollars, and my friend said the banks are opperating on the basis that close to half of that ammount is lost. Twelve trillion in losses is enough to destroy the entire European banking sector and what's bad is that the European governments won't be able to plug a debt hole of such gigantic proportions.

    What this means is that Europe could well be on the edge of economic disaster, if these numbers are accurate, and some miracle doesn't turn up out of the blue. In a way these numbers remind me of the secrecy surrounding Saudi Arabia's reserves and the entire Peak Oil 'secret.' It's like our ruling elite have lead us all over a cliff, like the cayote in the roadrunner, and we're all desparately still running, and are afraid to look down, because we'd suddenly realise the reality of our situation and plummet, not a particularly comforting thought.

    About the banks It seems strange the government destroyed Lloyds, Britain's only solvent major bank by making it take over the completly insolvent RBS. They seem to have a kamakazie attitude. We can't vote them out for another 15 months.

    What this means is that Europe could well be on the edge of economic disaster...

    In addition to being better positioned economically, the U.S. might also be in better shape socially as well. By this I mean there may be less possibility of social unrest.

    A few weeks ago someone posted a link to a series of lectures here on the DB(I think it was FMagar). There are about 30 or 40 of them, so I've been listening to them one or two a day, as time allows.

    Anyway, this morning I was listening to the one by Scott Atran, Research Director at the National Center for Scientific Research in Paris, France. Besides dispelling a lot of the stereotypes and racist crap we're bombarded daily with here in the U.S. about Mulims, I found this part very interesting. Regarding terrorist radicalization, he said:

    What does do it is moral outrage: "They're doing it to our people." And it only works if that moral outrage resonates with your personal experience. In the United States there is no possibility. Why? Because Muslims in America buy into the American Dream. Their demographic profile is exactly the average. They're under represented in prisons just like Jews are and they're thoroughly integrated. In Europe they're 5 to 20 times likely to be poor. They're representation in the prison population ranges from 60% to 80% of the total prison population.


    And if no one has noticed, we just elected a president that isn't exactly a WASP either.

    We all like to beat up on the USA, myself included. (I've got a theory that the fact that so many Americans are so exigent is what makes America what it is, so this is not an appeal to be less critical.) But when push comes to shove, the United States might not be the worst place in the world to weather out the storm.

    DS - I came across this guy the other day and thought of you;

    "Wealth, Virtual Wealth and Debt" by the Nobel prize-winning chemist Frederick Soddy


    "Soddy wrote that real wealth was subject to the inescapable entropy law of thermodynamics and would rot, rust, or wear out with age, while money and debt – as accounting devices invented by humans – were subject only to the laws of mathematics."

    ""Debts are subject to the laws of mathematics rather than physics. Unlike wealth, which is subject to the laws of thermodynamics, debts do not rot with old age and are not consumed in the process of living. On the contrary, they grow at so much per cent per annum, by the well-known mathematical laws of simple and compound interest ... It is this underlying confusion between wealth and debt which has made such a tragedy of the scientific era."[6]"

    That's interesting stuff, Soups!

    I just finished reading a book, Topsoil and Civilization, that shows how topsoil is one of the true measures of wealth, and shows example after example of say, City X in the Mideast or Mediterranian or Northern Africa, that suppored 100,000-odd people, and they allowed their topsoil to erode and now there are a few hundred half-starved semi-nomads and their sheep, there now. Fascinating book, a very good read, and first-class Doom.

    But if the banks of City X were still around, the laws of mathematics would ensure that the debts on the backs of those half-starved sheepherders would be huge, in X money at least.

    Now, about the $40 oil right now, after what I've seen in small town Northern Arizona, and other places, in fact every place in the US now, I'm going to say that we're heading into a deflationary Depression, and that $40 oil now, may be the equivalent of $80 or $100 oil a few years ago. When you're broke, $40 is a LOT of money! This is where the old idea of measuring earnings in terms of hours-of-work to buy this or that, would make sense. Because that $40 is getting bigger for average Americans than the old $80 or $100 ever was.

    Thanks for the link, souperman2.

    Just by chance one of the lectures in that series that I mentioned talks of this very issue. Peter Atkins is Professor of Chemistry at the University of Oxford and he discusses entropy and the second law of themodynamics beginning at min. 18 in his lecture. He's got some nice slides to illustrate his point.


    He illustrates the chain from solar nuclear fusion → sunlight → photosynthesis → human consumption, entropy increasing along the way. At some points along the chain destruction does facilitate construction, or at least a waystation in the journey to greater entropy, such as through the process of photosynthesis. Man relies on the process of photosynthesis for his food and energy.

    He doesn't go into the carbon fuel thing, but it is easy to see that coal, oil and natural gas represent a huge accumulation of biomass that formed over millions of years of photosynthesis. We seem to be pretty much hell bent on squandering it in short order. If you equate that biomass to wealth as Soddy I believe would, then we're clearly a heck of a lot poorer today than what we were a couple of hundred years ago.

    And yet the amount of money in the world has grown exponentially over that same time. So we think we're a lot richer. I think our monetary construct allows us to confuse our rate of consumption with wealth.

    Overnight I got to thinking that TOD had done some stuff on this, so this morning I did a search and came up with these:




    The ones by Herman Daly are especially enlightening. The problem is he writes at such an elevated academic level that I think few can understand what he's talking about. It's extremely difficult to understand him if one doesn't understand where we currently are or how we got here. Somebody needs to bring his writings down to the level of mere human beings, filling out his ideas with history, current events and current economic theory. But of course that is well beyond the capabilities of TOD. We're talking a book, and probably a rather long one at that.

    And since, in a modern economy, debt is money, we're right back where some folks (like you and others) have always pointed - we can't base a civilization on infinite growth.

    My wife is doing a school project/report on gas pricing factors (as a middle-aged returning student with a peaknik hubby her focus is different than much of her class!) I've of course helped find a ton of background articles on individual factors, from oil production to financial concerns to political issues. Is there one article any of you would suggest as the best overview of gas pricing calculation based on various factors? Magazine article for easy APA referencing would be best.

    Thanks in advance!

    The retail gasoline industry has a publication, monthly, which is probably online. I cannot recall the name, but it would probably be the best source. Probably published by PennWell out of Tulsa, since they cover most of the industry. I used to have a friend who managed a station for Phillips before the COP merger, and remember her eyeballing it.

    Kind of busy and have not read everything that is posted so if this has already been pinted out I appologize.

    Scary story on methane research in the arctic.


    Good article. There was another article about global methane emissions in the AGU's EOS of 3 Feb 2009.

    Zhuang, Q. et al., "Global Methane Emissions from Wetlands, Rice Paddies and Lakes"

    Very scary as the changes can be readily seen to be occurring.

    E. Swanson

    People who think that hydroelectric power doesn't contribute to AGW need to think again. CH4 from anaerobic decomposition in reservoir sediments is a significant contributor.

    People who think that hydroelectric power doesn't contribute to AGW need to think again. CH4 from anaerobic decomposition in reservoir sediments is a significant contributor.

    That is true, but is highly site dependent. Low head hydro should have little of the effect. It is also true that most of the methane release is committed to early on, i.e. tearing down an already existing (and filled) dam won't fix it. At that point the best strategy emissionwise is to continue generating hydropower.

    ...most of the methane release is committed to early on, i.e. tearing down an already existing (and filled) dam won't fix it. At that point the best strategy emissionwise is to continue generating hydropower.

    Preventing or eliminating CH4 emissions from reservoirs isn't the only, or even the primary, reason for taking out dams. Preserving or restoring lotic ecosystem integrity, including fish spawning migrations, to my mind is the main reason dams should not be built in the first place and removed if already in place. Restoring the hydrological regime of the watershed and minimizing surface evaporation are other reasons for not damning rivers with dams.

    Virtually all lakes are in geological time, temporary disturbances of the hydrological regime of the watershed. Many lakes in N America are the result of glaciation, moraine damming of rivers or geologic rifts.
    Even parts of the great lakes will drain when Niagara falls erodes up to Lake Erie.
    Should be accelerate the natural process of lake exit erosion to restore the hydrological regime of the watersheds to pre-glacial times? What about beaver dams, should they be ripped out also?
    Many steps can be taken to reduce the unfavorable impact of dammed bodies of water and increase the favorable impacts, such as improved habits, for birds and fish. We don't need ever mile of river dammed, but a mixture of flowing rivers, rapids and lakes adds diversity of habitat.

    Vastly overstated. And CH4 has, unlike CO2, a short half life (< decade from memory vs. millennium from electricity produced from FF).

    Hydroelectric power is to be preferred environmentally. we need more dams.

    Grand Inga plus soem geothermal & HV DC could put Africa on a VERY low carbon (say 98%) electrical grid.

    Best Hopes for more Hydropower,


    I was really glad to read your post , Alan. I have always felt that this was a somewhat strained argument, since anything which rots releases methane, and the debris in lakes is no different. Plus, the material will decomplose in lakes whether or not the water power is used for hydro or not.

    Clearly, several low head dams, versus one large one will have vastly different impacts. The former would flood far less land area, and store much less water, for effectively the same amount of power generation. There still are some effects on the river, and on the ecosystem. But that is true of anything we do. Unless we decrease the human population significantly we face major tradeoffs.

    ... and to hell with anadromous fish species.

    Dams are preferable to coal-fired power plants. Dams may even be preferable to nuclear power plants. That said, dams are ecological disasters in their own right. They prevent the migration of riverine species; they trap sediments which might otherwise build river deltas and replenish marshes and bottomland soils; they typically inundate ecologically sensitive bottomlands during construction; and they allow a few powerful, greedy men to claim ownership of that which rightfully belongs to no one.

    Sorry. Only a species that was bent on slicing up the last few crumbs that the planet had to offer, could see anything "green" in large-scale hydropower.

    Dams... trap sediments which might otherwise build river deltas...

    Ironic that someone who lives in New Orleans should be an advocate for dams! Katrina wouldn't have caused nearly as much damage as she did had the hydrological regime of the Mississippi not been so radically degraded by dams, levees, & channelization resulting in the loss of delta wetlands. Oh well, you reap what you sow...

    And CH4 has, unlike CO2, a short half life (< decade from memory vs. millennium from electricity produced from FF).

    Well, it's not like that carbon just disappears though. The residence time of CH4 in the atmosphere is short because it is oxidized to CO2 on those timescales.

    This is natural carbon, not fossil carbon.

    Swamp gas has been part of the life cycle since algae changed the earth's atmosphere.

    No Climate Change from the natural carbon cycle,


    Huh? Permafrost and clathrates aren't part of the natural cycle? And how is fossil carbon not natural? I'm not sure what you're trying to say, but whatever it is, it's wrong.


    In tropical and temperate reservoirs, forests drop leaves (and other vegetative matter) that was atmospheric carbon a few months/one or two years before. This goes down into a reservoir, some % becomes swamp gas, which becomes CO2 within a decade. Leaves pull this natural "biosphere" carbon out of the atmosphere and make more leaves & wood.

    All part of the natural biological carbon cycle, no net carbon added to the system.

    Unlike carbon that has been sequestered for millennium to millions of years.


    All part of the natural biological carbon cycle, no net carbon added to the system.

    Claiming no net carbon assumes that no imbalance exists at all between source and sink. Is there any evidence to support this? I would be inclined to suspect that the opposite is true, that human activities are perfectly capable of increasing the proportion in the atmosphere.

    You are also implicitly assuming that the amount of CO2 that becomes CH4 is static and cannot change, which is almost certainly not the case.

    (Also, don't we want to draw down CO2 if we can? Releasing that CH4 sure doesn't help.)

    I doubt very much that changing the ratio of decaying carbon that becomes CH4 before CO2 will have much of a global impact. (Reservoirs are also well known for sequestering carbon, logs do not rot quickly in fresh water mud, organic muck etc.).

    The US is increasing forest cover (and has since before WW II), a carbon sink of sorts.

    OTOH, the fossil fuel saved by using hydroelectric power has made a significant difference.

    ATM, Manitoba is shopping for customers for 5 GW of new hydro, sold 800 MW to Wisconsin. Much better than 5 GW of western coal fired power.


    For the goldbugs:


    Totoneila, how's that for O-NPK recycling?

    Hello Consumer,

    Thxs for the link, fascinating stuff. The old fairy tale never told us that the 'goose that laid the golden eggs' hid them inside something resembling a Baby Ruth candy bar. Is that a nut or nugget? LOL!

    Citibank - "Senate Majority Leader Harry Reid said he supports efforts of the federal government to dramatically expand its stake in Citigroup, but wants people to back off from the dramatic rhetoric. "

    “It’s not nationalization, it’s protecting the taxpayers’ interests,” Reid (D-Nev.) told MSNBC’s Morning Joe program on Monday.

    If it is not nationalization, then what is it? I am a taxpayer, and have no interest in Citibank.
    Harry Reid is in dream land like always. One day he will wake up when he is out of the Senate on his A$$.

    If it is not nationalization, then what is it?

    I think it's being called 'lemon socialism'.

    If it is not nationalization, then what is it?

    How about "The Crime Of The Century?"

    >Many passenger trains run on tracks owned by freight companies, and they are slowed on long stretches of single track, where trains must pull onto sidings so others can pass.

    Do I understand correctly that passenger trains are sidelined so that faster freight trains can pass? Where's Alan when you need him?

    Alan can speak on this best, but in general Yes, Amtrak has 2nd priority, fraights have 1st. So Amtrak trips can get interesting, apparently the trains are notorious for leaving late, getting to the destination late, etc.

    Ran Prieur's done some travel by Amtrak lately, and has said a bit about this.

    By regulation, passenger trains get priority. On several RRs (UP is the worst), that is fiction. Freight makes money, longer runs (more time) cost $$$, so shift delays onto Amtrak.

    With the recent drop in volume and rail improvements (double track El Paso - Los Angeles & Los Angeles- Chiacgo, etc.) are improving Amtrak times.

    On my Amtrak trip to ASPO-Houston, the tracks were clogged, grain, chemical & building materials shipments mainly on sidings (container trains get priority in reality).

    During WW II, priority was #1 Freight, #2 Troop Trains #3 Civilian Passenger Trains.

    Best Hopes for Double Tracks (x3 or x4 capacity and faster shipments),


    Anecdotally, there is a switching yard outside my old office where the SP branches between the SF peninsula and towards Oakland and inland. FWIW, the freights always waiting for the Amtrack, ACE, and CalTrain trains to go through.

    I'm sure the goal of any line operator is to most efficiently get as many train cars through as possible. Whether they always do that or not you'd know best.

    Global warming expected to be much hotter...

    MIT researchers just said 2100 now expected to have two times the temperature change they projected in 2002 unless dramatic policy changes occur.




    /begin sarconal drip

    But those guys over at the Heartland Institute said they've proven that global warming is a sham! How can you believe that stuff?


    /end sarconal drip

    Seriously, the situation with AGW appears to be close to crossing some new threshold but the world's immediate problems are unfortunately pushing real climate solutions into the background.

    By the way, I found it amusing that Hansen has been predicting 25 meters of sea level rise by the end of the century for a few years now, while the IPCC seems beset by ever increasing predictions - first 1 foot, then 2, now is it 4 feet? Guess who is looking smarter and smarter as time passes on that issue? Hint: It's not the IPCC.

    The IPCC was constrained by the limits of their particular efforts - they had to model climate change and demonstrate that their models worked with respect to recent history. Immediately after their 2007 report was released, Hansen was credited with saying something like "Do we not know enough to say more?" which confused a lot of naysayers, and generated dead silence from the IPCC researchers. Of course they knew enough to say more, but their particular research was not directed at saying more.

    In addition, they were constrained by having to get the whole report approved by ALL of the member nations of the UN. That reportedly resulted in a substantial softening fo the report.

    I would now like to ask Hansen if we do not now know enough to say more !!!! He seems to have the bully pulpit due to his reasonably stated projections, and I wonder if he has more to add.

    Rant Off/

    By the way, I found it amusing that Hansen has been predicting 25 meters of sea level rise by the end of the century for a few years now

    I try to follow such things, and don't don't recall any such prediction. IIRC he made the following argument. (1) With projected nearfuture CO2 levels, the equilibrium sea level would be roughly 25M higher. (2) The conventional wisdom that the time scale for icesheet response is on the order of 5000 years might be wrong. (3) He gave some reasons, both theoretical, and observational, why he thinks the time scale could be several times shorter. But, nowhere do I remember any serious discussion of the time scale being shorter than 500 years, which would be 5M/century. And anything as fast as a 500 year timescale is pretty tough to defend scientifically.

    Post peak gigging for comedians? The return of the wandering mistral, this time on his bike?


    I wonder if Beyonce will be next to get in the saddle?

    Hello TODers,

    Unfortunately, they don't show the railbike. It sure would be interesting to read the details on this ride [4:21 in length]:

    Railrider Speed Test Motor Ver 2.0

    With a new 36 volt, 800 watt Brushless DC motor system, we had to test out the top speed. We had 3 people on the rider, and hit a top speed of over 20 miles per hour.

    Same group, but forty miles [3:49 in length]!

    Railriding the Upper Hudson River Railroad

    Last summer, the UHRR gave us permission to go on an excursion through the Adirondack Mountains along the Hudson River. Man it was beautiful! We rode over 40 miles that day with the help of our newly install electric motor!
    Glad to see some people trying to make potential postPeak progress towards SpiderWebRiding Networks.

    EDIT: Tags: Rail Rider Railrider Railriding Railbike Railcycle UHRR Electric Track Car Geen Vehicle Adventure

    this may be the coming transportation .. although its been arround for a while



    Another headline, seemingly from "The Onion." This was posted over on The Automatic Earth. Amex is offering some account holders $300 to close their accounts:


    I love the way they put it on the Amex website

    Enroll now to simplify your finances.

    Enroll by February 28, 2009.

    Pay off your entire balance between March 1, 2009 and April 30, 2009, and we will send you a $300 value prepaid card to thank you. Enrolling in this promotion will automatically cancel your account.

    This link doesn't work for me.


    Try this (https).

    The mind boggles.

    The sun will shine tomorrow,
    Betcha ya bottom dollar,
    It will,

    --from Annie the Musical
    where is Daddy WarBucks when we need him?

    Oops, my mistake accidentally removed the "s" (secure connection) from the http string when I cut and pasted. Your link is correct.

    I notice that there's an add for American Express Business Gold Card on the web page. You sure this isn't a link to the Onion? Or, as the old saying goes, "Don't let your left hand know what your right hand is doing"...

    E. Swanson

    I just heard about it on the radio, so now I believe it's true.

    Like a 1930s German, if it's on the radio ... I believe it!

    The key part is that you have to pay off your account in full. In effect, AMEX is discounting the face value of the loan, if you pay it off in full. The amount of the discount is a function of the size of the balance. One would think that they appear to be a wee bit concerned about rising default rates.

    and by contrast, bofa is offering a line of credit loan at zero interest for (nearly) a year. the transaction fee is 3%.

    They offered zero percent checking, and two percent CD's. Their mortgage rates and credit card interest rates were higher than zero percent.

    Some car dealers offered zero percent financing, probably high loan origination fees, but it was not easy to find this zero percent financing. When an interested car buyer arrived, the buyer was usually switched to a higher interest rate product, even with a high downpayment in hand, and may have incurred a thousand dollar loan processing fee. The young had no established credit record.

    Here's an interesting link that provides a historical chart of the Dow Jones since the beginning. Anyone familiar with Chris Martenson's crash course will recognize the "hockey stick" effect where the corner is turned in the 1990's The rate at which it's coming down is pretty dramatic when looking at the entire chart.


    Edit: This chart was last updated in Sept. 2008. For comparison of where we are today (~7100) just eyeball it and you can see just how far we've dropped since the Oct. 2007 all time peak.

    This link gives the DOW on a log liner scale, much better to see relative changes, many times the DOW has increased >100%. Any logarithmic growth (even 1%) gives a hockey stick if over a long enough time period.


    Extrapolating from 1900, DOW at 800 looks at about on long term trend for 2010.

    It seems like the big run-up came after interest rates started their long decent, form their highs about 1981. With lower interest rates, debt became more attractive and businesses could use it to grow and expand. Also, the lower the interest rate, the higher the net present value of future earnings, especially if one could plan on year after year of growth.

    Gail -- You know the numbers much better then me so correct/modify my conclusions as you see fit.

    The single biggest factor in economic growth has been the housing market. As you point out lower interest rates began the construction expansion. TPTB recognized the most expedient method of continuing growth/avoiding recessions was to feed this beast even more. To use a sports analogy (which few of us really enjoy) TPTB decided to throw some financial steroids (sub prime loans) into the mix. Lower rates had added to the building boom but eventually the credit worthy buyers had satisfied their needs. In order to continue the expansion a new class of borrowers had to be generated. I could almost accept this as a possible viable approach. Eventually many of these sub prime folks would have defaulted but the mortgage companies might have been able to deal with that. But then TPTB allowed Wall Street to double down on these bad bets by allowing the secondary derivative market to develop. Thus eventually not only did the mortgage industry take a serious hit but also a very big chunk of the bank/investment sector.

    Hindsight is nearly perfect of course. But is this how you see our road to ruin as you look back?

    It is certainly at least part of it.

    In Europe, the big problem is all of the lending to Eastern Europe.

    If you look around, there are pieces of the problem everywhere. The housing industry and the subprime pieces are some of the earlier, larger ones to manifest themselves.

    Glenn Beck working the 2014 DOOM angle (3 parts) without once mentioning oil depletion http://www.youtube.com/watch?v=QRxFPOkPElU&feature=related

    Hello BrianT,

    Maybe these hypothethical 2014 scenarios are just a prelude; perhaps Glenn Beck is just prepping the masses to receive the real bad news of the PeakOil scenario?

    Each decade the average amount of electricty consumed per household has increased. Currently there are more than 80 coal burning power plants planned or under construction in the United States.


    In China there has been a trend towards building more coal power plants. In 2007 there was a report of 9% growth in coal power plant use. The Chinese with their 1.3 billion people yet used less electricity per capita than people in the United States and exported many manufactured goods.


    Burning coal emitted about 205 pounds of CO2 per million BTU's of energy produced.
    Natural gas emitted about 117 pounds of CO2 per million BTU's of energy produced.
    Gasoline emitted 172 pounds of C02 per million BTU's of energy produced.


    Carbon taxes are likely to enrage voters who were very loudly complaining when the price of gasoline rose to $4.00. People who live in deserts are particularly susceptible to water problems as population growth has more rapidly depleted water resources and required more. Due to politics people would rather water their lawns, wash their cars, and water golf courses in the desert complete with artificial lakes (high evaporation rates) than to give water to farmers who produced their food. During times of drought goverments had to apply mandatory water restrictions, I suppose the golf courses and Hollywood swimming pools are of the highest priority in California. The rate of car ownership in the United States is one of the highest rates in the world. People drove around in large cars, commuted long distances, and blamed global warming on others. Some global warming people had presumed the sea levels had been constant until recent times, when in fact they had risen about 360 feet in 20,000 years. Lakes were drying up for centuries before present. The Great Salt Lake in Utah was once at much higher levels than present. The ancient beaches were preserved on the sides of the mountains along the current lake shore.

    Some global warming people had presumed the sea levels had been constant until recent times

    You really post some bizarre statements sometimes (and lots of interesting stuff as well though) rainsong! Where's your source for that?