DrumBeat: March 8, 2009
Posted by Leanan on March 8, 2009 - 10:38am
Chevron aims to unlock huge Mid-East reserves
Chevron, the second-biggest US oil company, will in the next few months begin large-scale testing of a production technique that could unlock tens of billions of barrels of reserves across the Middle East.The technique, for producing heavy oil that cannot be extracted using conventional methods, will be used in the partitioned neutral zone between Saudi Arabia and Kuwait.
Chevron’s plans follow its success in extending its licence from the Saudi government to operate in the neutral zone for a further 30 years.
China flexes cash-rich muscles over oil and minerals
The maxim - ‘loot a burning house’ - has been followed by China’s military strategists for millennia. When your adversaries are in difficulty, press home your advantage to profit from their misfortune.The country’s political and economic doyens have been putting that age-old philosophy into practice again in recent weeks. They have been taking advantage of China’s enormous cash reserves and the plummeting global demand for natural resources to exploit an international fire sale in oil and minerals to ease concerns about the country’s long-term energy security.
Saudi 'to expedite work on two gas fields'
Top oil exporter Saudi Arabia will expedite work on two offshore gas fields in the kingdom as it seeks to meet growing domestic energy demand, a report said.A spokesman with state oil giant Saudi Aramco declined to comment on the Middle East Economic Survey (MEES) report.
Thomas Friedman: The Inflection Is Near?
Let’s today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.”“We created a way of raising standards of living that we can’t possibly pass on to our children,” said Joe Romm, a physicist and climate expert who writes the indispensable blog climateprogress.org. We have been getting rich by depleting all our natural stocks — water, hydrocarbons, forests, rivers, fish and arable land — and not by generating renewable flows.
“You can get this burst of wealth that we have created from this rapacious behavior,” added Romm. “But it has to collapse, unless adults stand up and say, ‘This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate ...’ Real wealth is something you can pass on in a way that others can enjoy.”
California And Detroit Go To War Over Gas Mileage
For more than three decades Detroit's Big Three and their allies have successfully blocked or limited changes to the nation's fuel economy rules. However, with General Motors and Chrysler LLC facing bankruptcy, the carmakers are making what could be one last stand, and this one they may well lose.
Conn. considers end to zone gasoline pricing
HARTFORD, Conn.—A Connecticut legislative committee has endorsed a proposal to prohibit fuel distributors from charging varying amounts to gas stations based on their location.The practice, known as zone pricing, has been criticized by lawmakers for the past several years as unfair to drivers and gas stations.
Growing your own vegetables can be a garden victory
Today, there’s a new call to create victory gardens.This time around, these gardens, which are typically composed of annual row crops, are seen as a solution to everything from coping with the failing economy, to a means of keeping food safe, to eliminating the energy and environmental costs of transporting produce hundreds or thousands of miles across the country and world.
Mileage tax gains speed in Congress
WASHINGTON Despite opposition from the White House, a proposal to tax motorists on the number of miles they drive each year is gathering speed on Capitol Hill.Its popularity is increasing as Congress searches for alternatives to the federal gasoline tax, which isn't indexed to inflation and hasn't been raised since 1993.
Supporters say that a mileage tax would be a more reliable source of funding for the upkeep of the nation's roads and bridges. Many environmentalists endorse it, saying that it would lead to less driving and less pollution.
Saudis Race All Night, Fueled by Boredom
This may be the most popular sport of Saudi youth, an obsessive, semilegal competition that dominates weekend nights here. It ranges from garden variety drag racing to “drifting,” an extremely dangerous practice in which drivers deliberately spin out and skid sideways at high speeds, sometimes killing themselves and spectators.For Saudi Arabia’s vast and underemployed generation of young people, these reckless night battles are a kind of collective scream of frustration, a rare outlet for exuberance in an ultraconservative country where the sexes are rigorously segregated and most public entertainment is illegal. They are, almost literally, bored out of their minds.
Sri Lanka: Energy crisis looms nearer
Although, last week Power and Energy Ministry won a major hurdle in passing the Sri Lanka Electricity Bill, which was withdrawn four times earlier, the Sri Lankan consumer would have to see power cuts if there were no rains by mid March.“We would have to implement power cuts if the drought continues and if there are no rains by March 15.” Power and Energy Minister John Seneviratne told The Nation.
In the universe of absolutely battered "green" stocks (See: For Green Energy Investors, a Particularly Tough Ride), biofuels have been among the worst. Falling prices and oversupply led to an industry-wide slump as ethanol prices sank along with other fuels, while being squeezed at the same time by a smaller drop in prices for crops used to make the stuff.The damage caused a few analysts to question the future of the entire ethanol industry. Happily, a few early signs are appearing that the floor might be in. Today Merrill Lynch is out with a report predicting a possible surge in ethanol prices next year as demand continues, oil prices rise and grain prices soften under the weight of a global recession.
For Green Energy Investors, a Particularly Tough Ride
If there is a lesson to be learned from the precipitous fall in "green" stocks last year, it's this: Combining greed with good intentions can make for a poor investment strategy.
Getting to the Bottom of the Greenland Ice Sheet
Greenland—the world’s largest island—is also home to one of the world’s largest ice sheets (after Antarctica). If Greenland’s two-mile-thick ice sheet melts completely, it would ultimately raise global sea level by 23 feet, drowning significant portions of coastal regions under water.It would also add large quantities of fresh water to the ocean, with the potential to change ocean circulation patterns that could, in turn, affect rainfall patterns, fisheries, and climate.
This is not youthful rebellion. We see the catastrophe ahead
This isn't the next fad. The naive popular narrative that "every generation has their thing" and that climate is ours - that we're the "Facebook generation" - simply does not hold. This isn't about being disaffected and rebellious without a cause. This isn't about dropping out, rejecting the norm, culture jamming and hacking the system. This isn't even about altruism. It's not just about defending the rights and lives of those who are less fortunate than us, and it certainly isn't about polar bears. This is about us. For the millennial generation the patronising cliches fall apart, because this isn't about ideals so much as hard science and the terrifying reality that what the scientists have been warning us all about for years - those sea level rises, catastrophic droughts and melting ice caps - will now happen in our lifetimes.
Land Use and Density Affect Fires in Indonesia
A study in Nature Geoscience suggests that while drought may lead to the worst incidences of burning, land use and population density also play roles.
King Coal's reign challenged in courts, D.C.
BILLINGS, Mont. - Beneath the frozen plains of eastern Montana and Wyoming lie the largest coal deposits in the world — enough to last the United States more than a century at the nation's current burn rate.The fuel literally spills from the ground where streambanks cut into the earth, hinting at reserves estimated at 180 billion tons. But even here lawsuits over global warming and the changing political landscape in Washington are pummeling an industry that has long been the backbone of America's power supply.
In recent weeks, a group of rural Montana electric co-ops abandoned a partially built 250-megawatt coal plant, ending a four-year legal campaign by environmentalists to stop the project. The co-ops plan to instead get their electricity from a natural gas plant — more expensive for customers but also more likely to get built.
A few miles away, the U.S. Air Force dropped plans for a major coal-to-jet fuel plant once touted as the harbinger of a new market for coal. There are no signs it will be revived.
Historical Patterns Predict This Crisis Will Last Through 2025
I see this coming war taking one of two shapes. It will either be a war against Global Warming/Peak Oil/Water Shortage and other threats to our living environment, or it will be a battle against another nation or group of nations (Arab or Chinese being most likely).
There is plenty of energy for everyone.Sure, I know all about peak oil and the dangers of nuclear energy and the high cost to produce solar and wind energy.
But those things are all trivial compared to the untapped energy sources we have all around us.
Australia - Eco-acvitist spotlight: Far-north Qld campaigns for public transport
Public transport usage in Cairns amounts to less than 4% of trips. The government target is for “at least 10%” of trips to be by public transport by 2036. The government is only considering an upgraded bus network to meet this target.Svargo Freitag told GLW: “We want to see the Cairns region develop into a national model for sustainability, showcasing solutions to peak oil and global warming. Cairns stands to lose its tropical rainforests and the Great Barrier Reef and is subject to rising sea-levels, so we have a huge incentive to do the right thing.”
Among the OPEC members who will suffer considerably from the fall in prices is of course Iraq, which needs oil revenues more than the others because of its special situation. Having achieved a lot last year in terms of security and stability, Iraq needs more money to sustain its growing security forces, whose number has soared close to 609,000 from 250,000 only two years ago. In addition to sustaining the security forces, Iraq has to continue with reconstruction projects and also modernize the oil industry's infrastructure.
Iran refineries' capacity to reach 3.2 million b/d, minister
LONDON, March 8 (IranMania) - Oil Minister Gholam-Hossein Nozari said on Saturday that the capacity of the country’s refineries will reach 3.2 million barrels a day from the current 1.7 million, IRNA reported.He added that the objective will be materialized by the completion of eight refineries under construction in different parts of the country.
China to import more LNG from Qatar
Fu Chengyu, general manager of China National Offshore Oil Company (CNOOC), said in the opening ceremony for CNOOC's office in Doha that his company has secured LNG supply of 13 million tons a year up to date coming from the locally produced and import from Russia and Kazakhstan."But this can't satisfy the market demand. We plan to import 60million tons of LNG each year by the year of 2020. We hope part of this additional volume come from Qatar."
Iran inflation hits 25.9%: reports
TEHRAN (AFP) – Inflation -- one of the biggest challenges facing oil-rich Iran -- has hit 25.9 percent in February, local news agencies reported on Sunday.Inflation rose to 25.9 percent in the Iranian calendar month of Bahman ending February 18 from the previous month's figure of 24 percent, the ISNA news agency quoted the central bank as saying.
Iran calls for cooperation with non-Opec
Iran's oil minister called for cooperation between crude producers inside and outside Opec, saying it was necessary in view of the global economic downturn, the official Irna news agency reported.
Q: Congress let the ban on offshore drilling expire last year, and some are pushing Congress and President Barack Obama to reinstate the ban. If they're unsuccessful and the ban expires, what can South Carolina expect?A: "Indifference. I really don't think there's any oil out there. ... To be able to find oil and drill for offshore oil requires a great deal of money. For an oil reservoir to be economically viable requires there to be a fairly good-sized reservoir. From my reviews of the public record, there are no oil reservoirs of any consequence that would entice anybody to drill. ... Even if one can identify a reservoir, and this oil is technically recoverable, it does not mean that it is economically recoverable."
The Current Stagnation of Natural Gas Vehicles in America
Most of you already know I believe natural gas transportation is the key to ending US reliance on foreign oil, protecting the America from the economic and social implications of peak oil (some of which we are experiencing today), and meaningfully reducing CO2 emissions. With a desire to practice what I preach, I embarked on a mission to study the non-fleet (consumer) NGV status quo in America and determine how I can obtain and refuel a NGV. Here’s what I found out.
Masochism is not the way to save the planet
No baths? No cups of tea? I’m all for saving our Earth, but there’s green . . . and then there’s miserable. Can’t we make the 21st century better without going back to the 19th? There are two ways to cut heating bills — one is to self-flagellate until we’re warm enough, and the other is to use modern, ecologically sound technology to heat and light our homes.
Greenhouse gas pollution threatens Southern Ocean food chain
RISING concentrations of acid in the Southern Ocean caused by greenhouse gases are damaging the ability of some sea creatures to form shells, posing a serious threat to marine life, a study by Australian scientists has found.One of the study's authors, Dr Will Howard, said the findings were the first evidence from nature, rather than a laboratory, that the acidification of the Southern Ocean will potentially have a big impact on marine life.
The Obama permits plan won’t work: A straightforward tax would produce results much quicker
The solution, of course, would be a tax on carbon, offset by lower payroll taxes. But unlike the hidden tax of cap-and-trade — the higher costs of doing business are passed on to consumers in the form of higher prices for electricity, petroleum products, and other goods — a carbon tax is out there for the voters to see. And given the choice between a stealth tax and a straight, visible tax, politicians will pick the former every time. Even if, as in this case, the stealth tax is less likely to accomplish its objectives — assured revenues for the exchequer and investment in green energy.
Tough odds facing bill to impose carbon tax
WASHINGTON: Representative John Larson has embarked again on his lonely quest to enact a national tax on carbon dioxide emissions. His idea is to set a modest price on a ton of emissions, gradually increasing it each year until the desired reduction in heat-trapping-gas pollution is achieved.Under the bill he introduced last week, virtually all the revenues from the tax would be returned to the public in lower payroll taxes.
Prince Charles: 'We have less than 100 months to stop climate change disaster'
A dire climate-change warning will be issued by the Prince of Wales when he tells the world we have 'less than 100 months to act' before the damage caused by global warming becomes irreversible.Charles will repeat the prediction made by experts that there are around eight years in which to make further cuts to CO2 emissions, halt deforestation and take other measures to stave off a permanent problem.
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From Statistics Canada at:
http://www.statcan.gc.ca/daily-quotidien/090306/dq090306a-eng.htm
"Sales of refined petroleum products in January [2009] totalled 8 336.0 thousand cubic metres, 3.5% lower than the same month a year earlier. (One cubic metre equals a thousand litres.)"
Re: The Obama permits plan won’t work
Not only would the consumers be able to see the carbon tax, they would also see the increase in prices as Peak Oil continues to push up the base price. Then, the consumers, who are also voters, would throw out the folks that imposed the carbon tax. That's why a direct rationing system with a white market for trading allocations is the only way which would actually work...
E. Swanson
I agree in general terms. Moreover the questionable offsets which plague the European system (along with free permits) would be claimed as carbon tax deductions. The fact that the CO2 spot price can fall as well as rise is the same as fossil fuels themselves, it's the physical flow which counts for climate purposes not the dollars.
Carbon trading has much better psychology than carbon tax. There is the guilt loop..we use too much so we drove up the price. Or the safety valve..the carbon price reduces in tough times. Since the US EPA SOx scheme seems to work OK maybe the US can be the 1st country to get it right.
Prince Charles: 'We have less than 100 months to stop climate change disaster'
Charles will repeat the prediction made by experts that there are around eight years in which to make further cuts to CO2 emissions, halt deforestation and take other measures to stave off a permanent problem.
And what is it that he expects to happen to stop climate change within 8 years?
It takes 8 years to build a nuclear power plant, and only a few are scheduled.
It takes 15 years to replace the cars, which very little is being done.
Maybe we should nationalize GM, and produce electric / hybrids only.
Charles talks big to the World, but Britain is one of the worst offenders along with the US.
More likely that in 8 years, oil production will be down to 50 mbpd.
Charles says nothing about peak oil. I guess Princes do not run low on oil.
Is it possible that it is easier for people to accept global warming instead of peak oil?
With all due respect, Charles is saying it's Winter for Human
Civilization.
And our shelter should now be complete.
JOURNAL: Markets Tracking Nicely to D2 Scenario
Dshorts four bad bear markets graph. Four-bears
Unfortunately, the transitional period of decline is tough place to be. Inertia (connections and loyalties to existing organizations and ways of life), a reluctance to write off sunk costs (investments from portfolios to worthless homes), and confusion (what will I do in the future to get by?) pose roadblocks. Perversely, once the system hits bottom, its easier to decide (the options become clear) but you don't have the resources needed to make changes anymore.
http://globalguerrillas.typepad.com/globalguerrillas/
"More likely that in 8 years, oil production will be down to 50 mbpd.
Charles says nothing about peak oil."
Leacock's Law: Never make predictions about the future for your own lifetime. That way, you won't be embarrassed when they turn out wrong because you will be safely dead.
Chuck and the Firm never handle cash, have no idea what things cost in the real world, and inherited great wealth.
http://www.swivel.com/graphs/show/30265784
I think we are about 15th on a per capita basis.
Maybe interesting do a pre/post recession per capita C02 by country to see how a downturn effects all in the world. Say 2007 vs 2009.
Marco.
When Will the Oil Price Pop?
This is a great article. More opinions on peak oil. Chris Skrebowski is still predicting peak oil will happen in the 2010-2011 range. My opinion is that 2008 was definitely the peak.
Ron Patterson
Interesting and thoughtful analysis, Darwinian. I respect Jim Kingsdale because after he was wrong in his prognosications of a year or so ago he has never been one to deny he was wrong, try to make excuses or cover up the fact. A real class act. As Abraham Lincoln said: "The man who can't make a mistake can't make anything."
I wonder though, under his "really big depression" scenario he predicts world oil demand will decrease by only 3.5 million barrels per day. Some of the oil bears are predicting world oil demand will decrease by 15 or 20 million barrels of oil per day in a depression scenario. They base their predictions on the fact that oil demand plummeted by some 13%, or 9 million BOPD, during the worldwide recession of 1979 to 1983, and they expect this to be much worse than that.
My opinion is that 2008 was definitely the peak.
When did you change your position on this? Last I recall, you were saying "Crude oil actually peaked in 2005."
http://www.theoildrum.com/node/3001#comment-241284
I presume you are talking about C+C?
Please don't be a smart ass Robert. I have posted perhaps a dozen posts since then admitting that I had it wrong. The very high price of oil brought more oil on line than I, and a lot of other people expected. Referring to Simmons' prediction on oil prices I asked, a couple of days ago: "Why can't some people simply say; I was wrong?" I have said it now let's get over it.
That being said, 2005-2008 was the peak plateau. High and low months in those four years were just noise. And Ihave also posted many posts, well before 2008, explaining that the plateau is, or was, the important point. Quibbling over which month, or even which year was a tiny bit higher that the last is just silly.
Now can we please stop this childish na-nanna-na-na crap and have a serious discussion about peak oil.
So getting serious Robert, what is your opinion of this statement from my above link?
Ron Patterson
Please don't be a smart ass Robert.
Stop being a cranky old man, Ron. I wasn't being a smart ass. I haven't had much time for TOD lately, and that's the first time that I had ever seen you mention a peak other than 2005. If you have a problem with me asking for clarification, then that's your problem.
But since you seem to want to pick a fight...
Quibbling over which month, or even which year was a tiny bit higher that the last is just silly.
The fact of the matter is that many people were dead certain of a 2005 peak. No possibility that they were wrong. Absolutely went out on a limb over it, which is something that I warned would damage credibility if it turned out to be wrong (and I argued it would be wrong). It doesn't take away from the message to say that we are at or near peak. It takes a lot away to say we peaked in 2005 only to see a new peak in 2008 and go 'oops.' If you haven't noticed, there have been a lot of stories in the media to the effect that "those peak oilers were wrong again." You can only cry wolf so many times, and people tune out the message. Here you are once again suggesting a 2008 peak. Take your own advice and stop making statements like that that can blow back up in your face. Much better to just say that peak is nigh.
Take my own advice? When did I ever say that we should not give predictions concerning peak oil? I have never made such a silly statement. Everyone makes predictions concerning everything from the weather to the stock market. And others write that those predictions were wrong and explain why.
Some of the greatest minds in the field are making predictions concerning peak oil. Robert Hirsh wrote, (from my above link), in February of 2009:
That is exactly what I have been saying since 2005! Though I do not believe it will continue for another 2 to 5 years. I said over and over again that we were on the peak plateau. And I stand by that prediction. It has proven to be absolutely correct so far and I feel very confident that it is true. And I will not stop saying it until it is proven wrong. And from the data provided in the link quoted, I don't think it will be proven wrong. But if it is then I will simply state; I was wrong!
Again Robert, those saying that the peak oilers had it wrong are just wrong themselves. They simply have not examined the data. Oil reached a peal plateau in 2005 and remained on that peak plateau for four years. Now it is falling off.
Ron
When did I ever say that we should not give predictions concerning peak oil?
When I read this:
Quibbling over which month, or even which year was a tiny bit higher that the last is just silly.
I take it that you don't think it's a good idea to focus on a specific year. This was always my objection to those who were so dogmatic about a 2005 peak. As I have said many, many times - it was never about who was right. It was about what I saw as an unnecessary credibility risk over a critically important subject.
Moving on...
Moving on...
Agreed! The link I posted above is one of the very best articles I have read in months on the future prospects of oil production. I found the article simply mind blowing. Jim Kingsdale is one of the most informed people in the field. He posted last September :Megaprojects Predict Decline of Oil Production
In the article mentioned earlier, he revised some of his predictions made in the September article. We could very well begin to see catastrophic decline rates, similar to Cantarell, in many of the world's giant and super-giant oil reservoirs in the next few years. The prediction of a gradual decline in world oil production over the nest few years may prove to be very overoptimistic.
Ron
World crude oil production is up 18% over the last 30 years, compared to an increase of maybe 500% over the previous 30 year period. 18% over 30 years is a plateau by any standard-anyone familiar with the basic facts would agree IMO.
So getting serious Robert, what is your opinion of this statement from my above link?
I want to separate this from the previous message, because I don't want to keep that going. The fact is that I am much more worried now than I was back in the summer when I felt like high prices would start to curb consumption. Now I see consumption picking back up, and oil companies delaying or canceling projects.
I am still investing in oil as a defensive measure, but there is nothing else in the stock market that I feel good about. I bought some PBR back in December when it hit $17.50, because I thought it was ridiculously underpriced (and it has moved up sharply since then). But I am seriously concerned about how things are stacking up.
That's one reason I haven't been around much lately. I am trying to make hay as fast as I can while the sun is still shining, while also spending all of my spare time on trying to figure out a way to keep the rain from coming too quickly.
It looks like you were far more right than anything Darwinian!
Looking at C + C, there was only one month to ever top the May 2005 level. Triple the price and only one month of raised production? That's just crazy. Looks like 2005 was it.
Total Liquids is double counting a lot of barrels in the form of ethanol, so what's the point of looking at it?
When I tell folks about PO, the first thing I tell them is;
"There has only been one month ever that topped the May 2005 production level. All that drilling and tripling oil price didn't improve flow rates." That is a convincing fact and immediately gets attention. (Especially among fellow commodity producers who are use to high prices creating a glut of increased production.) Subtract off the ficticous portion of the Venezuala production, and 2005 was the Peak. What more could one want than that??
The failure of the oil industry to produce since 2005 in light of the price jump is all I need to know. Zero alternatives came/will come about. Zero policy change came/will come about. This is good info for personal use, but society as an aggragate will suffer. Nothing will change that.
I don't think anyone cares about peak production any more, anyway. What they care about is price. If production falls off a cliff now, they won't blame it on geology. It will be because the demand wasn't there (as reflected in the price).
If production falls off a cliff now, they won't blame it on geology. It will be because the demand wasn't there (as reflected in the price).
I think your statement is accurate, which is why I also think it may be a couple of years before we know where we are really at. Demand is going to have to pick back up in order to collide with supply again, and that may take a couple of years. If demand doesn't pick up, falling supply will cause the collision at some point.
I'm starting to come around to Leanan's way of thinking that "[geological] peak oil will never be fully acknowledged". i.e. by the MSM.
The depression hits, investments suffer, so there is less oil. By the time some investments get started again, there is another recession, etc.
Implicit in this discussion is that the 86 mbpd demand for oil globally was sustainable and has not been pumped up by all the excesses of the past decade and a half.
The US consumes twice as much oil per dollar of GDP as does Japan and Germany. it consumes 20 times as much oil per capita as does India. Even if you assume that half of all Indians don't "count" for much consumption that is still 10 times as much oil per capita. And as Robert can vouch, Indians are not dropping dead like flies for the most part.
The current economic crisis might very well force the US to live within its means and that might mean a fairly big drop in demand.
While peak oil might have happened in 2005 or in 2008 its effects on price might be felt now only much later.
I could be way off mark.
Srivathsa from India
Hello S_yajaman,
It will be interesting to see how this will play out between the 'already-developed' countries and the emerging countries:
http://www.reuters.com/article/latestCrisis/idUSN08412531
----------------------
Developing world may need $700 billion -World Bank
Developing countries could face a financing gap of $270 billion to $700 billion this year as trade income dwindles and rich nations vie for capital to deal with a global slump, the World Bank said on Sunday.
The World Bank said even at the lower end of that estimate, resources of international institutions would not be sufficient to meet the financing needs as more and more emerging and developing countries are hit.
---------------------
IF this funding goes for building more highways and personal cars in the US [instead of Alan Drake's ideas], I would rather see this money go to other emerging countries that want to build out their RRs.
I agree.
It looks like 2008 C+C (subject to revision) will be very slightly higher than 2005, but if we use 5/05 as the index month, the industry has failed to match or exceed the 5/05 rate for four periods: last seven months of 2005, all of 2006, all of 2007 and all of 2008 (average production over each time period). True, individual months (subject to revision, generally downward) have exceeded the 5/05 rate, but we are basically dealing with numbers that are within the margin of error and as noted above, subject to revision. The bottom line is that crude production (conventional + unconventional) basically stopped growing in 5/05, and we are facing a cumulative shortfall that is approaching a billion barrels of oil (relative to what we would have produced at the 5/05 rate). Think of all the money spent by the oil industry worldwide from 2005 to 2008--and the bottom line was? We have a cumulative shortfall measured in hundreds of millions of barrels of oil (900 mb, through 11/08), relative to what we would have produced at the 5/05 rate.
The cumulative shortfall metric is one that I have been advocating for years, because it goes to the heart of Hubbert's argument, the area under a production rate versus time graph. BTW, I would also argue that Deffeyes was modeling conventional production.
Regarding the "Peak Oilers Are Wrong Again" stories, most of the stories I have seen have focused on price and have avoided production numbers like the plague, i.e., rising prices are due to "speculation," while falling prices mean that Peak Oilers are wrong.
good guess: 2008 C&C was 54'000 bpd higher than 2005 according to preliminary EIA numbers out today.
What's the error bar on these numbers again? Don't sell the 2005 peak short so soon!
Looking at C + C, there was only one month to ever top the May 2005 level. Triple the price and only one month of raised production? That's just crazy. Looks like 2005 was it.
The problem with that argument is that it is wrong. The 11-month average for 2008 is higher than for all of 2005, and unless December comes in with a huge drop over November, the entire year 2008 will be higher than 2005. So someone will come along and trump your 'one month' argument with a full year argument. That's why I don't like putting it on the line over a specific date.
Total Liquids is double counting a lot of barrels in the form of ethanol, so what's the point of looking at it?
The right answer would be somewhere in between, albeit closer to C+C than to all liquids. The problem with C+C only is that it does ignore any legitimately positive EROEI fuels. To illustrate, let's say I could take a barrel of oil and multiply it into 10 barrels of some fuel with similar properties (not likely, but as an example). Only counting C+C would ignore those additional 9 barrels.
The failure of the oil industry to produce since 2005 in light of the price jump is all I need to know.
There are a couple more things you need to know. What were the assumptions on future oil price that oil companies were making in 2005? I can tell you that it was on $35-$40 oil. Second, even if they had correctly predicted much higher prices, how long does it take to bring a project online? The answer is several years. So it isn't like flicking a switch in which high oil prices lead right away to higher production.
Isn't the premise of Peak Oil that all of the low hanging fruit is gone, and that although there is more oil yet to be found, it will be more expensive to find, produce, and get to market? If so, the very arguments everyone here is making validate that very premise.
We are all after the same thing here, or at least the commentors above me in this thread as I write seem to be. The fact of the matter is that we are "at" peak oil, whether two years ago or three years from now. The devil may be in the details, but the whole point of the study of Peak Oil is that the theory has been validated and we are looking to the future for how we will maintain our existence, or in the obvious opinion of some on TOD, how we won't.
It seems to me that the break we have had with the drop in demand was not taken advantage of with continuing development or with looking to substitutes, such as the so called "Picken's Plan." If the megaprojects listed on the WIKI had stayed on schedule, we could come out of this in better condition. We did not, and the future oil production, exports, and the resulting impact on world economics will most likely accelerate due to the hesitancy or inability (and it makes no matter which) slowing worldwide exploration, drilling and development.
While I enjoy the discussion, I do not care who is "righter." We are facing a crisis, sooner rather than later, caused by Peak Oil. And, I do not think I am a doomer.
"I do not care who is "righter." "
Me neither.
The way I look at it is like runs of a simulation model. In the "reference run", without former President Bush's decision to create a housing boom and bust, peak oil (C+C) is in 2012, leading to a crash in 2014.
In this run of the model (the one we're living in), the Great Crash of 2014 came six years early, and abraded off the top of the peak.
The difference in peak timing is ... what? Five years in a semi-period of 150? Three percent? Who cares? Physicists are happy if their results are within an order of magnitude.
"I do not care who is "righter." "
Me neither.
And no matter how many times I say "it isn't about who was right", people still think it's an argument about who was right. My argument - and I sure I have said this about 2 dozen times - is against making very dogmatic statements about a specific peak date, and watching the peak get surpassed, which then provides easy ammunition for the opposition. I have dealt with those arguments on numerous occasions - "they have been saying peak oil for 30 years" - and it would be a lot easier to make my arguments if I didn't have all of these false predictions thrown back in my face.
The funniest thing about all of this is that some of the ones who are yelling "the actual date doesn't matter" are some of the same people who called for a very specific peak date. But I give up. I am getting tired of trying to convince anyone we have a problem.
Come on Robert, you are getting out of character now. I can recall no one insisting on a specific peak date. Who are these folks who have insisted on a specific peak oil date? How would one go about doing that? Would one yell; "I insist on a specific peak oil date!"
From day one we have debated everyone's guess on the approximate date oil would peak, and it has been really interesting. We all were caught by surprise at the collapse of oil prices. But so far none of us has been really surprised by the production figures. They plateaued and are now, in my estimation, headed down.
You will not be able to convince anyone we have a proplem. The vast majority of people are concerned only with the immediate problems of the day. Events, not predictions, govern their behavior.
Ron
I can recall no one insisting on a specific peak date.
Ron, you know this isn't accurate. I am not talking about a day; I am talking about someone saying with certainty that May 2005 or December 2005 was the absolute peak month. Look down the thread. Someone wanted to argue that May 2005 was the peak. I pointed out that 2008 would be higher. The response? "Who cares?" That's just the thing I have a problem with. Many people are dogmatic about calling for specific peak timing, and then if it turns out not to be true they start rationalizing, or say "Who cares?" Well if they are going to say "Who cares?" now, then why did they think it was important to base their arguments around a specific peak month?
Bottom line for me, and why I care: I think it weakens the message, and makes it more difficult to educate people. And I still haven't given up on educating people, which is why I have an issue with it. But if people don't think it is becoming harder to convince others that we have a problem - and part of the reason is because so many predictions have been incorrect - then they need to get out more.
Sorry, Robert, but I think this is just silly. Why should you worry about other people's "false predictions"? You can't stop people from making predictions, and you shouldn't even try. People have every right to make whatever predictions they want...wrong or not.
People have every right to make whatever predictions they want...wrong or not.
Sure they do, just like people have every right to point at those failed predictions as a reason to ignore peak oil. The thing is, the former - the failed predictions - make it a lot harder to convince people. When I have tried to talk to people about peak oil, I have had Deffeyes thrown back up in my face as an alarmist who clearly doesn't know what he is talking about. After all, how many times has he been dead certain we peaked on Thanksgiving 2005 or later revised to the first week of December? This is the sort of thing that causes the peak oil camp to be looked upon as a cult. That impacts me, and my ability to talk to people about the issue, which is why I worry about it.
I will be perfectly honest here. I have spent a lot of time lately trying to figure out whether I belong here any more. I first came here to learn, and when I could, to educate. I still enjoy the Drumbeat stories; lots of good stuff in there. But I find myself disagreeing with so much of what is said - and lately even so many of the essays - that the education piece gets lost in the noise.
The site is supposed to be about Energy and the Future. But it seems that we have a very narrow view of what the future must be. It is that same dogmatic certainty that causes people to say with dead certainty that May 2005 was the peak. But when the dogma turns out to be wrong, the people I am trying to convince were just handed their arguments on a silver platter. I guess it's that whole mentality that I have an issue with: I hate dogma and think it's harmful. Some people seem to think dogma is fine as long as it's the 'right' dogma. I know I am swimming against the current any more.
The thing is...it doesn't matter whether predictions are "dogmatic" or not. They will still be thrown in your face. People will ignore any hedges, qualifications, etc.
Deffeyes' Thanksgiving prediction was clearly a joke. He's using mathematically smoothed curves; peak oil for him is a year, not a day.
Sorry if it caused you annoyance or inconvenience; I thought it was great. We got a lot of mileage out of the joke here.
I am not one to make predictions myself, but I have to respect those who do. It takes 'nads. But in the end, I think people who are willing to do that get more respect than those who don't.
That is because you aren't a scientist.
You simply DON'T make a statement that is provably wrong unless you want to look like a complete idiot. Scientists have a VERY low tolerance for "wrong".
You can say, "Based on X,Y, and Z, I think A,B,and C. Oh course there could be something I don't know that causes equation F that I used to calculate this to be completely wrong."
I'll leave certainty for the creationists thank you very much.
Calling peak and being wrong makes ALL OF US look stupid. Do you not grasp that, or you simply not care what other people think? If the Oil Drum is be an echo chamber for the true believers thats kinda sad.
Your point is irrelevant: nothing about PO is being done in what could be called a scientific way. The material itself - production data - doesn't even exist. About all you could call any research on PO is a white paper.
Also, there is a problem in saying not taking a risk to avoid embarrassment is good. It is always and forever, bad. The opposite is always and forever good, if done in good faith. In fact, if one truly believed peak was in 2005 and said nothing, such a person would, and should, be considered rather poorly. In fact, their action would be considered unethical and/or immoral if the they ended up being correct.
Robert's problem, and yours, appears to be an unwillingness to deal with the ambiguity and confront ignorance and/or propaganda. It really is quite simple to point out to anyone even though so-and-so had made a somewhat specific prediction, it was made within the context and expectation that a plateau would be expected. Further, that the so-and-so in question was, in fact, correct thus far as we are, in fact, on a plateau.
I think this is a vital point. I truly believe that without becoming a society (global or otherwise) that can speak honestly, agree honestly and disagree honestly, we have precious little hope of ever making things any better than they are now because the same human vices will distort anything and everything we create in the absence of basic honesty, ethics and morality.
The untruthful should be shunned. There should be no method by which they can take on important posts in society on any level. And all it requires is people committing to honest communication and being willing to call a lie a lie.
So, if there are those who would make hay out of a prediction that appears to be wrong, but isn't, and you let that cause you to attack those in your cohort as opposed to those seeking to disparage and disrespect your cohort without reason, I'm not sure the problem lies with the predictor.
Just my 2c.
Specific to Robert: suspect a goodly part of your dissonance may lie more in the fact that PO activism has changed significantly by virtue of peak almost certainly being past, and that primarily due to above ground factors. I get a great sense of people being adrift and on edge at least in part due to that rudderlessness.
We are in a transition to solutions and away from predictions. And the other two aspects of The Perfect Storm dominate at the moment, and might for a few years.
All of this is frustrating. And scary as hell.
Cheers
Robert's problem, and yours, appears to be an unwillingness to deal with the ambiguity and confront ignorance and/or propaganda.
You have it exactly backwards. My frustration is that this is ambiguous, but isn't being treated at all that way. I have always treated it with ambiguity, which is how it should be treated. That's why you always hear me speaking of a near-term peak, and not risking the credibility of my arguments by suggesting we peaked in a specific month.
But the people making predictions are mostly not scientists, and neither are those responding to the predictions.
It's politicians and business people who run the world. They're the ones who admire people who are willing to go out on a limb.
Both. I don't think it makes all of us look stupid, and I don't care what other people think.
And echo chamber? Who said predictions have to be that peak oil is now? Half the fun of this place is that there are so many different predictions.
I am not one to make predictions myself, but I have to respect those who do. It takes 'nads.
I don't think it takes nads at all when the wrong predictions are just rationalized away. It would take nads if more people were willing to admit they were wrong, but more importantly understand why they were wrong and learn from the experience. I seem to recall that you didn't think it took nads to make my bet on oil prices a couple of years ago. You certainly didn't seem to think it took nads, or that you had any respect for me because I stuck my neck out on the prediction. In fact, I think you characterized it as effectively a stupid bet. But what I did was make a bet, putting my money where my mouth was, and came within a whisker of losing. Note that my prediction wasn't even wrong, and you said something like "For all practical purposes, you were wrong." But you seem to have quite the different standard regarding wrong peak predictions. I was almost wrong, and you said "You were wrong." Deffeyes was wrong, and has been in the past, and yet you just hand wave that away.
I'm amazed you think comments on a blog post matter in the real world.
Leanan is right, these predictions don't matter. People will still dismiss you out of hand. If you come across a person who throw Deffeyes back in your face you are clearly address a person who already has decided on the subject and closed their mind. If they didn't have Deffeyes they'd toss something else just as inane out and consider the matter closed.
But then again I never considered educating people anything but a waste of time.
Oh, I think it took 'nads to make that bet. I just don't think it had the effect you wanted it to have.
It did make for great entertainment, though.
Maybe because I can recognize the difference between a prediction and a joke?
I just don't think it had the effect you wanted it to have.
The bet was really a proxy for something else: I didn't believe Saudi's production drop was geologically-induced, and I believed they would raise production as prices went higher. I should have just bet that Saudi production would go back up - which it did. You are correct that while I technically won, lost in that was the message that I had intended to convey: Saudi production is not in free-fall.
Maybe because I can recognize the difference between a prediction and a joke?
So all of these were jokes?
http://peakoildebunked.blogspot.com/2006/04/279-many-wrong-predictions-o...
My own opinion is that this is why more people don't take peak oil seriously. If it weren't for so many (high-profile) people making so many failed predictions, peak oil wouldn't be akin to astrology in many people's minds.
They weren't all jokes, but the ones that weren't jokes were not "dogmatic." May have been is not a prediction in my book.
And I could not disagree more. And even if that were true...how is that relevant to people posting in the comments here?
And I could not disagree more.
Why then do you think peak oil is looked upon as a cult of sorts?
And even if that were true...how is that relevant to people posting in the comments here?
Because these people don't live only within Drumbeat. They carry the same message out to the public. They interact with friends and family, and say the same thing. When they make the same sorts of wrong predictions to their friends, they may end up losing a potential ally.
Robert, in my view, when dealing with an out-of-context problem like Peak Oil, there is almost certainly no way to change most peoples' minds. Just try to get a Democrat to become a Republican, or vice versa, which is another out-of-context situation. Both have very valid points that work within their context or worldview.
It's almost certainly true that specific predictions that keep failing are destroying credibility. But I've concluded that only one out of twenty people can hear the peak oil message. The rest have to experience it first before their mental furniture is rearranged. And they will latch onto anything to "refute" it, just like some of the climate change deniers are doing now. Failed predictions are just the handiest things to throw sometimes.
Just a point of view, not the truth ;-).
That was the longest thread I've ever seen on TOD, and it centered on which year, 2005 or 2008 was the peak oil king. The difference between the BPD for those two years is so small in comparison to total production, does it really matter? Let's end that dumb argument by agreeing that 2005-2008 was a plateau, marked by bookend highs in 05 & 08.
If it does remain the peak period for oil production into the future, then that will mark an amazing plateau in time, portending a future descent that won't be pretty.
I am a Yellow Dog Democrat and no Bush fan by any stretch of the imagination, but I think it patently absurd to say that the housing boom and bust was created because of a deliberate decision by the president to do so.
Ron
How so? Greenspan and Bush quite deliberately kept interest rates low and quite deliberately pushed expansion of mortgages and quite deliberately pushed the creation of creative financing.
How is that not pushing a bubble? Are you claiming they were too stupid to know how bubbles are created?
Cheers
"The 11-month average for 2008 is higher than for all of 2005, and unless December comes in with a huge drop over November, the entire year 2008 will be higher than 2005."
Who cares?
Mr. Farmer checks the overnight CBOT first thing after waking up in the AM. He listens to market commentary 5 times a day. He ponders purchasing more land, a newer tractor, or expanding the feedlot. Or selling everything and moving to Florida.
When I show him the tables for monthly EIA monthly oil production, he just CAN'T believe it. He calls his meighbor to come over at look at the madness.
Here's a group of people (commodity producer in general) who've been punished every time they invested in productive capacity. They assume that massive production increases follow every market bull move, because they always have. Now you have the end of that. This blows people's minds when they see it.
It doesn't matter that the false Venezuala data gave 2008 the Peak. Who Cares. Anybody considering a major shift in their farm operation is STUNNED, absolutely STUNNED at the pathetic performance of the oil industry the last five years in light of the crazy price run-up.
Limits to Cycles and Harmony in Revolutions
Technological/Forecasting & Social Change, 59, No 1, 1998
-THEODORE MODIS-
" The fascination around cycles stems from the fact that they offer predictability, particularly for what concerns a change in the direction. As if one could see around corners. At the same time, it is this very fascination that contributes to the cycles’ detriment, because predictability entails predeterminism and thus infringes upon free will. Things would still be manageable—emotionally—if the predictability concerned linear or at least monotonic growth. Passionate reactions are not really provoked by predictions of world-population growth, or by stock-market growth. But to say that there will be regular and inevitable downs, e.g., the stock-market crashing every fifty-six years, or that war activities will flare up every twenty-five years, is sure to trigger emotional response, anxiety, and possibly anger. People do not like the idea that they are not getting better, and they do not want to be told that they do not have any choice. So they react emotionally attacking the very existence of cycles."
Why Stalin executed Kondratieff.
Cycles in Self Organized Criticality Systems.
Self-Organized Criticality: A New Theory of Political Behaviour and Some of Its Implications.(chaos theory)
Publication: British Journal of Political Science
Publication Date: 01-APR-01
Author: Brunk, Gregory G.
"The shocks to human systems are of two very different types, but so far most social scientists have only recognized exogenous, normally distributed shocks. These produce the random walk that, until recently, was thought to generate most economic and political time series. The second sort of shocks are the internally propagated complexity cascades of SOC systems. While commonly encountered in historical narratives, they have not been recognized as a general class of events with a common cause. One such traditional explanation is that the First World War was triggered by a sequential series of mobilizations, which were thought to be necessary because of a belief in the 'cult of the offensive', which saw defensive warfare as an inferior strategy. In fact, this is just a description of a complexity cascade in a different jargon.
There is a most important implication of the revelation that SOC systems exist in the real world. All statistical approaches that are based on normally distributed errors will greatly underestimate the chance of spectacular changes occurring in such systems. As one approaches the edge of chaos, very large magnitude events are much more commonly encountered than in a normal distribution with the same standard deviation. So if political behaviour is typically non-linear, this explains why major prediction errors so often occur when our linear models are used to forecast future events, even if these models have exceedingly high levels of explained variance."
The Kondratieff long wave is sometimes referred to as the two-generation wave. It takes that long for the influence of the older generation, the ones who survived the last downturn and learned the hard lessons, to die off. Anyone who was an adult during the Great Depression is either dead or in a nursing home, so their lessons are lost or denied.
My mother is neither dead nor in a nursing home. They raised both of us kids to be fairly frugal. And the result for me anyways is no debt and a lot less stress than most of the other people around here seem to be suffering from..
Dale,we are,I believe,past the stage of human "progress",where we depend on word of mouth communication of history.
There is plenty of history of the Great Depression in books and on the net.There is no excuse for lessons being lost or denied in a literate society.
The problem isn't "lessons being lost." It's that people start to think, "It can't happen now." And that some things just don't have much impact if you haven't lived through them yourself.
Reading through this article I hear an echo of Taleb.
I watched the Siegfried and Roy TV special and there were several shots of their 100-acre preserve in Vegas. Most ponds had black swans, actually quite a few. That’s an interesting looking bird now that I understand some other concepts of the name "black swan".
Just a short ways from where we live north of Reno is a wetland area called "Swan Lake" and winter home to 1000+ swans. This year last month we had a two-week warm spell and the swans took off back to Canada about three or four weeks early. Boy, did they get a surprise ... I imagine they are all puffed up to max insulation about now bitching about their leader's stupidity just like we do.
The storms came and the drought news for the our area changed to normal water with 12 feet of fresh snow around Tahoe.
Another oil depletion factor that should be kept in mind is that many of the recent wells are horizontal for max rate of recovery and have a depletion curve far different that Hubbert’s depletion curve …OK … OK … OK … Ooops; not unlike the turkey’s life expectation before Thanksgiving.
Lyn
In a long conversation with my brother this morning, he says all this talk of deflation is little more than government propaganda.
He's a retired accountaning manager who before going into Chevron's international division was something like third in command at their accounting center in Concord, California.
He keeps meticulous records of everything. About 18 months ago he and my 92-year-old mother moved in together so he could look after her. He says the cost of the basic "food basket" they purchase has increased from a little over $200 per month to a little over $300 per month in the last year and a half, and it continues to rise. "Everytime we go to the store," he said, "the price of some item we regularly buy has gone up." Most recently he has noticed the increase in the price of canned food items.
While he admits that maybe the price of stocks and real estate may be in retreat, the "everyday stuff you need" is not. "They ain't goin' down," he says.
Also, when he moved in with my mother she bought a new Chevy Cobalt. He was over at the Chevy dealership the other day and he says the sticker price of the same car is now about $2000 higher than it was 18 months ago.
There may be deflation for rich people. But for poor people it's a cruel lie.
I think what he's missing is the lag. It will be six months to a year before the drop in fuel prices is reflected in food prices.
Food prices have already fallen in many third world countries (because they eat food that is less processed, maybe?)
And to DownSouth:
Keep repeating the word "deleveraging" and it's just now starting
for households.
and home prices are still being crushed.
Another 40% to go.
Ex of deflation:
Citi on May 23, 2007 $55 per share.
Today, $1.03
"Ex of deflation:
Citi on May 23, 2007 $55 per share.
Today, $1.03"
While I agree with you in general, fallen stock prices are not an example of natural deflation. They are the result of Wall Street bankers whose sharp practice finally caught up to them.
In Canmore, Alberta, just west of Calgary, a car dealer was advertising on Calgary radio stations that with the purchase of any new SUV or pickup, he would give the buyer a free new sedan as well. I've noticed in Calgary newspapers that SUVs are selling at roughly the same price as small cars for any given model year.
I see your arguement and at first was reluctant to post
stock price as an example of deflation...
but (you knew the "but" was coming ;}
these banks were leveraged at 40:1 with GE others higher.
The toxic (fraud) assets (outofthemoney race tickets)
are worthless and yet the Gov'ts and Central Banks
say they are at full value.
Until this garbage is defaulted and major trials
are held the markets will, there's no other word, deflate,
rushing for any asset that has zero leverage attached.
An added bonus, stocks will/are be/ing abandoned to finance
government attempts to stop the deleveraging.
"Real investors, foreign governments and central banks, are already sitting on mountains of paper losses due to the loss of purchasing power of the dollar in their own currency. For them, U.S. Treasury debt is a toxic asset which has no real market value because there is no real market for it. Any sizeable offer to sell will result in a swift withdrawal of all bids. U.S. government debt has grown out of proportion to economic activity. It will never be repaid, except in the dreams of the budget director.
The Obama White House has been hijacked
The outlook is very bleak."
Fekete Interview Feb 2009 deflation
Estch this video and pay careful attention to Howard Davidowitz:
http://www.youtube.com/watch?v=nD5l6ttYSSg
The businesses that have high prices will go out of business.
Most big companies borrowed ... heavily ... to become big. Some were 'Take- over' or 'Take- under' targets ... capitalized with debt and more debt.
The 'Niewe American Paradigm' will have everything paid for and operated out of cash flows, no credit.
A big company that has a lot of debt is probably borrowing to pay expenses and roll over older debt. This company has a dilemma. It can either meet the market which means sell prodcuts at cash- price levels (hold your hand down near the floor) or maintain or raise from current price levels (hold your hand over your head). If they keep prices high they will go out of business. If they lower prices they won't be able to service their dabt.
Here is an incomplete list of failed retailers: http://reconstitution.us/rcnew/?p=1562
Ann Taylor (Apparel) Downsize
Bombay (Furnature) 9/20/07
Boscov's (Department) 8/4/08
Buffets Inc (Restaurant) 1/22/08
Charming Shoppes (Apparel) Downsize
Children's Place (Spec. Ret) 3/26/08
Comp USA (Computers) Downsize
Dawahares (Apparel) 5/30/08
Dillards (Department) Downsize
Eddie Bauer (Apparel) Downsize
Foot Locker (Apparel) Downsize
Friedmans (Jewelry) 1/14/08
Geoffrey Beene (Apparel) Vol Liq.
Goody's (Apparel) 6/9/08
Goodyear (Tires) Downsize
Kirkland's (Furnishings) Downsize
Levitz (Furnature) 11/8/07
Linens N Things (Furnishings) 5/2/08
Liz Claiborne (Apparel) Downsize
Lone Star (Restaurant) Downsize
Mervyns (Department) 7/29/08
Movie Gallery (Rental) 10/16/0
Pacific Sun (Apparel) Downsize
Pep Boys (Auto Parts) Downsize
Pier One (Furnishings) Downsize
S&A Restaurant (Restaurant) 7/29/08
Sharper Image (Gadgets) 2/21/08
Shoe Pavilion (Apparel) 7/17/08
Sprint (Telecom) Downsize
Starbucks (Restaurant) Downsize
Steve & Barry's (Apparel) 7/9/08
Talbots Downsize
Whitehall (Jewelry) 6/23/08
Wickes (Furnature) 2/3/08
Wilson's Leather (Apparel) Vol. Liq.
Zales (Jewelry) Downsize
Add Home Depot's Expo chain (4,000 employees), Circuit City, Tweeter Home Entertainment, KB Toys, Mattress Discounters, Fortunoff's, Ritz Camera; There are many on the edge of insolvency; Whole Foods, Sears plus thousand of GM and Chrysler automobile dealerships.... among others.
More Davidowitz: http://www.youtube.com/watch?v=wY2Hf3v_Xms
Here's a STUNNING list of listing homebuilders from Implode - O - Meter:
Ailing/Watch List™:
18. Sotherby Homes
17. SunCal Companies
16. Twinmark Homes
15. Gunstra Builders
14. Altieri Homes
13. Comstock Homebuilding Companies
12. Reeves Williams
11. Pulte Homes Inc.
10. Centex Homes
9. D.R. Horton, Inc.
8. KBH Home Inc.
7. Hovnanian Enterprises Inc.
6. Ryland Group
5. Standard Pacific Homes
4. John Wieland Homes and Neighborhoods
3. Beazer Homes USA
2. Meritage Homes Corporation
1. Lennar
http://builder-implode.com/
This WAS certainly one of the largest American industries over the past ten years ... measured in both cash flow, percentage of GDP or book value ... Lennar, Beeazer, Ryland, Hovnanian ... are giants. 70 large homebuilders have already failed.
Another large industry was mortgage lending and origination. So many are gone.
337. HSBC - HFC & Beneficial
336. JPMorgan Chase - Warehouse
335. Ameritime Mortgage Co. LLC
334. Perfect FHA - Wholesale
333. EquiFirst
332. Residential Loan Centers of America
331. CU National Mortgage
330. Colonial National Mortgage - Wholesale
329. U.S. Mortgage Corp. - Retail
328. First Interstate Financial - Wholesale
327. Realty Mortgage Corp.
326. Vertice
325. USA Home Loans - Wholesale
324. SunTrust Mortgage - FHA Wholesale
323. New South Federal Savings Bank - Wholesale
322. First Federal - Wholesale
321. 21st Mortgage - Wholesale
320. J.B. Nutter & Co. - Wholesale
319. Homebridge Mortgage Bankers - Refinance.com
These are but a fraction of the 337 housing lenders that have bitten the dusty dust. http://ml-implode.com/index.html#lists
Also prominent on the list are #212. Countrywide Financial Services and #263, IndyMac Bankcorp.
The tension betweeen the forces keeping prices high - including government stimulus and bailout efforts - versus the deleveraging forcing the credit component out of prices will be the story of the next 24 months. Prices, wages and asset prices will have to fall. How this happens and with how much suffering will be critical. In two years, $2 an hour might be a good wage. $80 a month might be a good rent. $1 a gallon might be a reasonable price for gasoline. Getting that $2/hour job will probably be a real challenge.
Hello Steve from Virginia,
That is fascinating--mucho kudos!
Friday, November 21, 2008
Study shows upwards of 80% of hedge fund employees never actually knew what the word “hedge” meant
Chicago, IL—A recent study conducted by the Gallop Group showed that of 5,000 hedge fund employees surveyed during 2006-2007, 83% of respondents were unable to correctly define the word “hedge.”
“It’s just like, you know, part of the title” said one trader confidently. “Another way of saying ‘badass’ fund or ‘rockstar’ fund.” “My Range Rover is hedge,” he insisted, as if to corroborate. Other responses were equally absurd, ranging from “a Greek word” to “some Jewish dude’s last name.”
When told that hedging involved systematically eliminating risk, most subjects just stared ahead blankly. Others checked the time. Several respondents were able to eventually grasp the concept, but they found it quite novel. “Ohhh…you mean that…” said the portfolio manager of a $500M fund, as if a light bulb had gone off inside his head. He then added: “Yeah, we didn’t do that shit at all.”
From LeveragedSellOut
We've bottomed when this industry no longer exists.
the food prices have continued edging up with a few exceptions and the lag should be showing up soon.
Comparing food prices is a tricky business. One must be careful that like and like are being compared (my favorite theme). The other day I bought some Banquet TV dinners that were marked down to the price where I usually buy them (88 cents or less).
When I got home I realized that there were no longer 5 meat balls in the things. Sure enough they had changed the picture on the package from five to four. I did not notice it in the store when I bought them. So even though the price was the usual price, there was really a price increase.
Another trick is to change the ingredients such as substituting soy protein for meat. Most won't notice unless they read the label.
With services the trick is to cut back on timeliness or frequency of service. When I worked at the post office they liked to eliminate pick up points and close down stations thereby forcing customers to spend extra time mailing and saving the post office money by having to pick up mail at fewer points. This is on top of the regular stamp price increase. Out here in the country my mail now comes at about 3:00PM whereas a few years ago it came at about 10:30AM. They have combined carrier routes and probably eliminated some station time and carriers or both.
The price paid can be raised even though the casual observer thinks it is steady or even declining.
Inflation is alive and well IMO. The other day at Walmart I was getting my usual 3 gallons of water (I don't trust my well in the country). I was surprised when they charged me 37 cents per gallon refill instead of the usual 33 cents. That is a 12 percent increase. There is no shortage of water in Iowa. In fact it is falling out of the sky at the moment.
A box of "Good and Plenty" used to be 6 ounces, now it is 3.5 ounces and still costs $1.00. This is was a movie theme box of licorice candy, now it is downsized and inflated in price. Every where I look, from boxes of cereal to cans of soup, even at the cheaper food stores, the prices are going up and up.
I buy food for myself and for a few other people to help them rather than them going to food pantries, which in some cases only parce out once a month.
No wonder some people who have lost their jobs are so worried, they know that whatever monies they do get from others will not stretch as far as they once would.
Charles.
Here too the same story! We have two 800 ml bottles of milk delivered every week. Well as of April the size is going down to 660ml per bottle and the price is going up 10%. HELP!!
Unless that same lag reveals a shortage in planted crops, in which case prices for food products will stay high even if feed-in costs are low.
Unless the recession digs in deeper still, in which case prices will be low even though people are starving, simply because they have no money at all.
We get to pick between bad-worse-worst eventualities.
That's a fascinating story, Leanan. Thanks for the link. I will email it to my brother.
The anecdotal example it cites is this:
That's a 20 or 25% jump in 1 year. My brother is reporting a 50% jump in 1-1/2 years. So they're not totally out of sync.
They are, however, totally out of sync with what the U.S. government is reporting. From the story you linked:
Also, notice that the story is not arguing that food prices are going to go down, but that the rate of increase will go down:
I agree with you. It seems to me, that so far, deflation is something happening to someone else, somewhere else. I have not noticed a drop in the price of groceries, sundries, clothing, electronics (beyond the established Moore's Law-driven phenomenon), movie tickets, utility bills, books, tools and other stuff at Lowes,college tuition, medical bills, etc. Yes, gasoline dropped, and went up, and has seemed stable for a little while, but that could change any time.
Perhaps overall deflation will come as some her say, but this seems to be more reminiscent of stagflation from the late 1970s, where people are losing jobs, incomes are flat at best, and the price of most stuff the majority of people buy continues to rise.
Bah to the finance industry. The government should have let it all collapse and just paid off everyone's mortgages to stave off civil unrest/revolution (Maslow's hierarchy), and they would probably have ended up spending less than they are now. Then new local and, at best, regional banks could have formed under tight regulations, with say a 15-1 maximum loans to reserve ratio. Same with failing industries...the USG should let them fail, then fresh blood and new ideas could arise to form new, different companies that are attuned to the new reality.
Moonwatcher,
I think you have hit the nail squarely upon the head. If the masters of the universe get their way, we will be asked to pay exorbitant prices for things for years to come in order to pay for their excesses.
Actually there is historical precedent for this in the United States:
DownSouth, thank you for the great example. Too bad the politicians won't read and heed.
An article in the Business section of the Democrat Gazette Arkansas's main paper told of this same story. Food makers raising prices just when costs are going down and the Stores that sell these things are complaining about it.
I have noticed that packaging of products are getting smaller and prices are staying the same or even going up. I have started to hunt for better deals online for some things. And surprise, surprise online you can find those same products at better prices. Somewhere out there someone is thinking they can profit from last year's Oil price spike. Even though some of the cost of doing business might still be in the system, this does seem suspect.
Core inflation is not figured off of food and energy prices which does also seem to be stupid. As they are the two biggest things that people spend money on all the time. ( not as big as a house, but you buy food all the time, it should be in the figures of inflation )
Charles.
I was thinking this morning of a cartoon I saw about a year back, when oil was near its peak.
In the cartoon, a bearded man in overalls has stockpiled an enormous amount of wood out back of his rural house (shack). As this man continues swinging his ax, another man reads a magazine on a nearby stump. On the cover of his magazine is a close-up of a beaver with the headline, "Beavers and Peak Oil: What do they know?"
Man on Stump: "Conclusion: Not much, but they sure are chopping down a lot of trees."
Man Chopping Wood: "Yup."
If I were a cartoonist, i'd be stocking up on similar ideas for about a years time when oil is back at $100.
Obama: keep spending and not "stuff money in their mattress."
In an interview aboard Air Force One on Friday, the president said that he expected his administration, which took office on January 20 amid the worst economic crisis in decades, to "get all the pillars in place for recovery this year" and he urged Americans to keep spending and not "stuff money in their mattress."
http://www.reuters.com/article/GCA-BarackObama/idUSTRE5262CW20090307
It would appear that bank runs are currently underway, and thanks to this statement will accelerate come Monday morning.
When are politicians going to learn to just keep quite?
The guy is starting to sound a lot like GWB-his strength during the campaign was that he talked like an adult and now he is talking like a 5th grader. He is saying nonsense like "we can't nationialize ALL the banks" as if that was proposed by anyone.
Denninger, as you might expect, has some heated words about this.
Calculated Risk has some excerpts from the interview. The full actual quote was:
“What I don’t think people should do is suddenly stuff money in their mattresses and pull back completely from spending,”
http://www.calculatedriskblog.com/2009/03/obama-another-750-billion-need...
As for Denninger or Krugman, Mr Obama is not listening:
“Part of the reason we don’t spend a lot of time looking at blogs,” he said, “is because if you haven’t looked at it very carefully, then you may be under the impression that somehow there’s a clean answer one way or another — well, you just nationalize all the banks, or you just leave them alone and they’ll be fine.”
Someone need to stick a pin in the bubble that has formed around Obama. I may not have agreed with him, but at least I use to respect his intellect. Not now, he has been completely captured by the big financial companies.
The simple fact is that Denninger is 100% correct but Denninger could never run for President, let alone be elected. Obama might be doing his best, but his superiors have him on a very short leash IMO.
You could have voted for me.
Though a friend told me that I would have died in office killed by a congressperson not wanting to live on minimum wage. If they can vote that people in the US get to learn how to live on 7.25 an hour then they should learn how to do the same. Though that was just one of my platforms, it would have been the one killing me my friend said.
Short of a coup, we are going to have to learn how to live with these leaders, who seem not to want to put on trial those who made this mess and got rich doing so.
Charles.
How many civilian nuclear power experts does TOD have? What do you think about this?
http://www.technologyreview.com/energy/22114/
There seems to be no shortage of 'Generation 3', 3+, 4, and other non-generation-specified designs such as this...and I use the word 'design' loosely for some of them...some of them seem to have blueprints on the shelf, and others are pretty pictures and hopeful words. I wonder how much engineering design work this one has? What happened to the pebble-bed reactor design?
It would be a great achievement to move away from dirty coal electricity generation to a relatively fail-soft, lower-nuclear-waste design such as this one claims to be.
Before some folks voraciously point out that a credible, cleaner energy supply will not solve the World's resource depletion/over-population/pollution woes...I get it...I have railed myself against over-population...this post is about new ideas for base-load electricity...
And I think that the administration's repudiation of Yucca Mountain is a mistake. OK, Yucca cannot be guaranteed to house high-level rad waste for a million years or whatever, but it can keep it safely sequestered for at least a couple of hundred years. Maybe within that time we can burn the waste in more advanced reactor designs. OK, or we will be dead or throwing rocks or spears at each other. In any case, Yucca would keep the wastes better isolated and for longer than keeping the wastes at each reactor site, collapse or not.
The leader of the senate is our own Harry Reid who ran and is still opposed to Yucca Mountain. He is up for re-election in 20 months so Yucca Mountain is DOA for now. We get to see his smiling face on TV telling us how he got insurance for 11 million kids. We do not hear of his congressional complacency for millions out of work and money for the banksters.
Here in Northern Nevada the unemployment is 11%, well above the national average. This is because the size of the gaming and tourism industries and their dependance on discretionary income which is going away fast.
Haven't looked at the link, but don't need to.
The answer is, unless production-scale prototypes have been operating for five years plus (to prove it Really Works (TM)), the approvals and inspections processes are nailed down, the manufacturing/operation/disposal chain is ready to go, and operator training programs are ready -- unless all of that, it ain't gonna help.
Mileage, instead of, or in addition to, gas taxes
Always a favorite with gas guzzlers. Tax my Hummer just like that Prius.
But how would they tax my 1982 M-B 240D ? Computerless, it can run (daylight hours) without electricity once started. (Some small battery to run my LED brake lights & turn signals would be considerate of other drivers).
So even if retrofitted (where, how much, how long to retrofit all cars ?) I can deprive it of electricity "on occasion" and drive tax free. As for odometer readings, cables can be removed ... Antitamper improved after 1982.
Mileage taxes cannot be implemented (IMHO) before 2030 at the very earliest. Chose tax regime (I drive on city streets paid for by property taxes, not gas taxes), are all miles = in tax ?, then design tax monitor, then install it in all new cars for 20 years, then do a massive retrofit campaign for all old cars (see my 1982 M-B) and THEN start charging the tax.
Best Hopes for Driving my Last Car until I wear out, and higher gas taxes,
Alan
Alan,
one of the first requirements is for every car to get an "EasyPass" box or its equivalent - which you'll have to pay for, of course. You won't be able to register your car without it.
It's absolutely idiotic to tax mileage separately, because vehicle weight is as important as miles driven in determining wear and tear on bridges and other vulnerable stretches of roadway. We already have a tax that includes the combined effects of weight and miles driven: the gas tax, of course! In fact, we see the weight differential explicitly included in the different tax rates for gasoline versus diesel.
Raising taxes is the political "third rail," while introducing a new one with a complicated and subjective revenue-neutral offset formula allows for more money to be scraped off while maintaining plausible deniability.
And to reassert my tinfoil-hat status here, let me observe that an EasyPass box allows for remote sensing of more than your vehicle location - it can be used to determine your speed, too. How long before that speeding ticket magically appears in the mailbox, without any recourse or ability for you to face your accuser? It's already being test-run in the private sector:
http://query.nytimes.com/gst/fullpage.html?res=9505E4DE1738F936A35754C0A...
Here in North Carolina, we seem to have moved past the idea of using GPS and other electronics to build a tax system. We have a new safety/emissions inspection process that requires a yearly inspection of all vehicles in order to obtain yearly registration. The mileage of the vehicle is recorded and entered in a state database as part of that process. The state can simply calculate the difference in the odometer reading after the second inspection, then send out the tax bill along with the registration form.
Not that such a system would be any more popular with the masses...
E. Swanson
I don't know about you, but I could live without my speedometer for six or nine months of the year. Reconnect that cable a month or so before inspection time.
Heck, my old Rabbit had a self-destructing plastic gear in the speedometer/odometer assembly that popped around 50-60k miles. Sure helps the resale value - provided you fix it before the buyer shows.
I would hate it.
I don't drive much. On my last car, I had only 30,000 miles on it when it was 15 years old. People found this so hard to believe that they added an extra 100,000 miles to the number whenever I had it serviced or inspected, assuming the odometer had rolled over. I told them it hadn't, and made them change it back, but every time I went back, they'd add it again.
My '87 Dodge Dakota speedometer cable broke a couple of years ago. I drive it about 1600 miles a year. It does have to pass annual inspections (emissions are now waived, for this age vehicle) - odometer readings are recorded but a delta-miles reading of "zero" seems to be no impediment to legal passage of inspection, which requires entering relevant data into a computer hooked to state MV database which presumably has all sorts of "pass-fail" policies built in.
Re. the alternative GPS-type of monitoring how far vehicles drive: this will NEVER fly in the U.S. of A., home of the free, the brave, and the rugged individualist who fears the intrusion of the state into his personal life more than anything - you can be certain that the John-Birch fringe will start the stories about Obama's gov't tracking their movements as the first step toward one-world-government and black helicopters following their every move, whether they're going to a John Birch meeting or cheating on their wives. This type of monitoring will be DOA roadkill on the Interstate before anyone even has the guts to propose it. And, as Alan and others here point out, it's easy to defeat in a dozen different ways.
Dick Lawrence
Speedometers are one thing but GPS is another.
Sure, pull the speedometer cable. That's easy to reconnect.
GPS is EASILY defeated with a very small piece of tin foil over the antenna.
There's no effective way to enforce this, it just creates more government jobs like the current set of new policies being put in place by Obama.
One thing my wife taught me over the years; there's ALWAYS a work around to new rules.
Go ahead, put the GPS on our cars. You won't get true mileage or position data. Ever.
Here in Nevada they understand. The registration depends on the value of the car. When gas was high and Hummers cheap and small cars valuable, Hummers paid less and Prius paid more. FUBAR, Murphy is an optimist.
BTW: With golf courses closing around here, you can pick up an electric golf cart pretty reasonable. If you do, get the 48VDC variety rather than the 36VDC. It matches solar better with 2-24V (200Watt) panels rather than 3-12V (130Watt) panels for about the same money.
Obama gets millions back to work! News at Eleven!
Having everyone paid to watch after someone else and make sure they are paying their fair share of the 16.9 Trillion Dollar tax on everything you do. New Tax-Hound have been hired, these men and women will follow you everywhere you go and make sure that you pay for everything you do including sleeping with your fair share of the newest TAX ON EVERYTHING.
If you sleep to much, eat to much, drink coffee to much, vacation to much or just plain Live to much, these people will know about it. You will have to pay 99% of your earnings to the Government or face Chain gang prison sentencing.
The Chain gangs will build roads, bridges and homes for those that do pay their FAIR SHARE of the TAX ON EVERYTHING.
Vote now, Tell your congressperson you want to be taxed into the STONE age.
This has been a public service post.
Charles.
That would be WAY better than some kind of GPS/EZPASS-type of big brother continuous monitoring and reporting system. How long will it take the government to include a remote speed governor and braking so the policia can remotely pull you over whenever they wish and for whatever they want? How long before all this remote geegaw gets hacked int by the same crow that brings us malware and identity theft?
This idiotic plan will kill driving more than anything else. The perfect excuse to ride a bike! Even though bicyclists must obey traffic laws when they are on the road, unless I am mistaken, if a cop pulls you over on a bike he or she cannot compel you to show any identification. "Can I see your driver's license?" "No, I don't have one."
Unfortunately, many motorists will be able to argue that many of those miles were out-of-state. I would imagine that this scheme could be successfully challenged legally as an unconstitutional state impairment of interstate commerce.
Even with newer cars one can get around this. My 2002 VW for example has an instrument cluster that you can talk to with a laptop and the right software. Some of the uses are innocent enough - if you have a new key made, they use this facility to teach the cluster about the new key.
They have put lots of controls into the thing in order to prevent someone from rolling the odometer. For example, if you need to replace the instrument cluster, the new one comes with miles reading 0. You are allowed to change it to anything you want until the reading exceeds 100 miles. After that the cluster won't allow this. But my understanding is that there are shady software vendors offering tools that let you bypass this and roll the odometer any time you like. Ultimately it is just a matter of re-flashing the memory in the right spot.
My thinking is that any sort of mileage tax would have to be done in a different fashion. Perhaps a completely independent counter on one of the axles like what the truckers use.
A mileage tax could do more harm by diverting attentions to political and ideological agendas rathers than the actual enviromental/ energy issues. Just tax the fuel at source and reinvest those funds in new, clean energy projects. Its been done before, albeit (in part) via tobaco taxation.
A little anecdotal information, about organizing a local response:
First off, I would like to thank the owner/operators of the oildrum. The information they have proved over the years, on hurricanes impacts, peak resources and sustainability have been a ray of truth in a world of darkness. I may not post that much, but I do read what is posted.
Their effort to ask the question “what next”, and to provide a forum for those trying to solve these problems are quite inspirational. I do not lightly use those words. If you knew how bitter, cynical and pessimistic a person I am, you would be shocked to hear them come from my mouth (or keyboard).
But now to the core of the issue:
After reading articles posted here, I recently started trying my hand at organizing a local response to what is coming. (Again, something very out of character for me.)
I decided to start with a Neighborhood watch committee. Mostly because I didn't think the neighbors would be open to the whole sustainability message. On the other hand, fear of the economic downturn might just spur some kind of participation.
An sure enough it did, and I was correct about the unwillingness to hear about the societal shift that is coming. They have not accepted that they will be forced into dramatic life changes over the next couple of years. I was careful to be very low key in probing their state of mind, so as not to poison them to the message. Instead I just talk about my “hobby” of reading about “old time knowledge” and history. About my research into how my grandparents lived. That way, I can give them the information they will need, without starting a political argument.
This is a subdivision where everyone has lived for a decade, yet nobody knows their neighbor's name, or would even recognize them if they met on a street. I've collected contact information and learned everyones stories and life situations. This is an upper-middle-class neighborhood, but some are in dire straits, and still in denial. One person is out of work, with huge credit card balances, yet they are only now considering how they may be forced to live a more frugal lifestyle.
As I've talked to people, you can see the kernel of fear in the back of their eyes, as they consider that we are headed into another great depression, yet are unwilling to really acknowledge and act in such a way to prepare for it.
I can't say I've made a lot of progress with the neighborhood watch or promoting a sustainable lifestyle, but I have laid the groundwork(it's only been a month or so) . It is my view that you can't MAKE people change. They have to come to it of their own accord. They have to do the five stages of grief before they are ready. All I can do is provide them with the information and resources they need, once they have made the journey.
When they are ready for it, I will direct them to the following websites and books:
http://www.growbiointensive.org/
http://www.bountifulgardens.org
The Encyclopedia of Country Living - Carla Emery
Gardening When It Counts: Growing Food in Hard Times (Mother Earth News Wiser Living Series) - Steve Solomon
Putting Food By (Plume) - Janet Greene
Root Cellaring: Natural Cold Storage of Fruits & Vegetables - Mike Bubel
Nice post.
Thank you.
I have been a member of a subdivsion's watch program and all in all less than 10% of the people living there were members. I walked the roads everyday and talked to people and most of them did not even care to vote in the elections for city officals, let alone for national ones.
I lived in a high crime area, where if your house was up for sale the best thing you could do was still live in it to keep people from breaking in and stealing the copper or taking the fridge and stove.
You get people who are so tied up in their own TV that they hardly get outside to see the sunshine. It is sort of depressing.
Charles
CNN has a little feature about how people are dealing with unemployment.
The fourth story is kind of interesting:
They're actually netting more money now, because they're not paying for daycare.
But the general outlook of those people is grim if nothing happens in the next few months. Sure some of them have learned to save money here and there, but generally they seem to have been stuck in a rosy future timeline before the banking failures hit them with job loses.
WesTexas and his ELP hopefully is saving some people.
Charles.
G.O.P. Senators Say Some Big Banks Can Be Allowed to Fail
TS
A.I.G., Where Taxpayers’ Dollars Go to Die
TS
Who got AIG's bailout billions?
"Representative Paul Kanjorski told Reuters on Thursday that he had been informed that a large number of AIG's counterparties were European.
"That's why we could not allow AIG to fail as we allowed Lehman to fail, because that would have precipitated the failure of the European banking system," said Kanjorski, a Democrat from Pennsylvania who chairs the House Insurance Subcommittee."
http://news.yahoo.com/s/nm/20090308/bs_nm/us_aig
So who gets to fail ? the taxpayers ... why not the stock holders ...their gamble.
This is priceless. It is a satirical look at Obama's trickle-up poverty plan. Enjoy.
http://www.wikihowl.com/get-your-family-out-of-a-financial-crisis.html
So, China is prosperous because of their low taxes? Maybe it's because they have a lot of CO2.
The meme on this "joke" is not-so-subtle anti-tax. There is a group of uber-wealthy "Americans" who are bummed out that our tax system is returning to something a bit more progressive than the Bush admin and that the scary death tax might take a bite out of their aristocratic future. I shed no tears for them. I do find it sad that they employ so many field agents to carry out their agenda. The ensuing confusion keeps these Horatio Algers riled up and does little to develop real long-term solutions.
Yes, China is prosperous because of their low taxes. For the first time in their history, farmers pay no taxes. We need to relearn basic economics here in the US. Unfortunately, this administration seems completely incompetent.
And if we get rid if taxes, labor rights, and environmental laws, we can have utopia, too.
Oh yes, that is a brilliant idea. Go live in China and suck the grey smoggy air choked with blowing dust full of heavy metal particulates...and enjoy your water while you are there too. I have traveled the world with the U.S. military and I would protest my rear-end off to keep our environmental laws from being rolled back. And I bet our farmers would love to take the deal of paying no taxes as long as they receive zero subsidies, right? Yes, let everyone run wild and the last of our topsoil will run down the Mississippi and/or blow away...the dead zone in the GOM will BE the GOM. Yea, verily, zero taxes and zero regulations are the shining path to righteous American success.
I have noticed that there are more people growing gardens of late. We won't be able to get all the produce from local that we could get from shipping from other places. I mean look at things like Acai berrys, a plant used where it is grown for thousands of years just now making it into the US and European markets. There are hundreds of other plant products that have been getting wide use in recent decades that come from the tropics and just can not be grown in most of the US or Europe.
So are we doomed to have less tropical foods on our plates. Most likely unless we get a lot more into using those Transporters from Star Trek. Or using Sailing Ships, and getting Freeze dried products shipped in.
Passengers have to go by train, all planes do is fly in produce from other countries.
As we get more local with our food products, we should push for more variety and more greenhouse grown tropical plantings. After all Iceland does have Banana crops grown in greenhouses, and has since the mid-70's, I know I was there and have seen them.
Charles.
Forget the tropical fruits and airplanes.
100 mile diet on local rail line. Using tri hybrid motive power
http://www.trihybridstealth.com/stealthspecs.html
Cool! Might be just the thing to jumpstart local narrow-gauge SpiderWebRiding to 'ribcage' support Alan's standard-gauge RR & TOD 'spine and limbs'. It is the logical way to go once rubber tires become Unobtainium.
Some idle speculation:
Hugo Chavez has called for a Venezuela to Argentina railroad along the eastern foothills of the Andes. This would be a good thing for those communities in Peru & Bolivia that now rely on trucks over the Andes as well as western Brazil.
Chile & Argentina are now building a good electrified standard gauge link through the Andes.
Build a good semi-HSR (freight at 90 to 100 mph/144 to 160 kph) electrified rail line through Mexico and Central America (they will need one anyway post-Peak Oil).
There remains the Darien Gap of 62 miles/100 km. At first rail ferries while a multi-billion program digs tunnels and builds elevated causeways through the mountains and flood plain.
http://en.wikipedia.org/wiki/Dari%C3%A9n_Gap
Electrified rail, largely driven by hydroelectric power, from Chile to the US. Much of the express service at 90 to 100 mph, some as slow as 50 mph.
A wide variety of foods could still be available at reasonable cost.
Best Hopes for Trans-Continental Rail,
Alan
I wanted to put this comment back up thread in the discussion about the president telling us not to put our money in the mattresses, unfortunately it would have wound up so far down thread that it would probably been misread. As far as bank runs is concerned people shoud know that there isn't much physical money kept in bank vaults anymore. Also I have been told that if you want to take out $10,000 or more you will have to fill out paper work to get it, and if you want to take out a very large sum, in cash, it may take you as long as a week to get it, that is after you have filled out the necessary paper work, and had your interview, with the local police dectetive, not to mention the FBI and the bank examiners.
I suspect we might see an attempt at a bank run, but it will fizzil out when people discover they aren't going to get there money any time soon.
cc
Although the $10,000 threshold for reporting does exist, it's not that big a hassle to get your money out. Yes, it takes a couple of days but no police interview was involved. I've know people who did, then put it in safety deposit boxes.
Besides are you really going to withdraw 100,000 and stash it under the mattress? That comes to pretty big lump in the middle of the bed.
The thing to remember is, that historically, during radical times, the government can completely change the rules any time it wants. So stay nimble.
They can issue a new currency (making your mattress money useless)
They can limit withdraws, making the mattress money a good idea (as occurred in Russia and Argentina)
They can just confiscate it (as Roosevelt did with gold)
My advice would be don't keep all your eggs in one basket.
I think even Denninger, reccomends Local Credit Unions
Speaking of which: I just opened a free checking account with a local CU down the street and was pleasently surprised to get 4.01% interest on my balance. And I'll get that rate as long as my balance doesn't exceed $25,000. Better the any short term cd rates I've noticed lately.
I don't think bank runs now will look like bank runs did in the 1930s.
Northern Rock looked kind of like the 1930s, but they also had people sucking money out of their accounts via the Internet. Their web site struggled to handle the traffic.
I think bank runs today will be electronic. Rather than lining up at their local branches, people will be moving their money via the Internet, or withdrawing it via ATM.
That's a provoking thought Leanan. Please correct any of my following assumptions: Bank A has an electronic ledger saying it has $X amount of deposits. The bank borrows from the Feds and loans an amount equal to $X times what ever the fractional rate they are allowed. Let’s say 8 times just for illustration. Another simplification: one depositor. Let's say the bank has lent the max: 8X. The depositor does an electronic transfer of $X to another, Bank B. Bank A has no cash on hand but it's still receiving cash flow from the outstanding loans. It might not have a pile of cash equal to $X on hand but it’s easy to type the $X into an electronic transfer.
I know this is very simplistic but I'm not familiar with the banking regs. Bank A is still receiving revenue from the $8X loans. It's paying back the Fed (?) for the fraction it borrowed from them but still making a profit (?). So...is the bank out of biz or is it a biz with a positive cash flow and very little overhead? Don't need many workers if you are only depositing checks sent to you. Perhaps the Feds have a rule about foreclosing on any bank which looses its borrowing base. Feel free to keep any answer simple and blunt.
Bread Lines in California
http://www.myfoxatlanta.com/dpp/news/dpgo_Bread_Lines_Seen_in_California...
Denninger is in fine form today.
I am in the process of bailing out of BOA and running to USAA, where I do most of my other financial business. If USAA screws up, then it will be time for a local credit union.