The numbers for commercial real estate are ugly, but I wonder if the result might be more a slow deflation than a sudden pop. Banks seem to routinely roll over commercial mortgages if they can't be repaid. Which they would never do for ordinary people.

Thanks for the graph. It does look pretty tame next to the 80's but as speeding_ mentioned, there's likely been a lot of consolidation, so though fewer, they pack a bigger punch. Commercial RE is going to be an interesting bag of surprises. There's essentially no talk in the mainstream about the trouble with CRE, or even in residential "shadow inventory."

Elementary, dear Watson. In the world of logical thought there is a technique called the process of elimination, and it works like this:

Since it is highly unlikely that the people who believe in Anthropogenic Climate Change would do such a thing, it therefore follows that those who strongly disagree or whose interests are threatened by it are the culprits.

I hope that clarifies things for you.

Yeah, I always trust theives. That is what hacking is, isn't it? Well, sometimes it results in fraud, like stealing work which has a common-law copyright and changing it, whether by omission or otherwise, and calling it real - oops, that is what the hackers or their employers did, isn't it?

I do not condone what either party did. I will rely on the simple graphs of temperature change over time, particularly those which reflect an accelerating rate of change. Besides, the "positive" feedbacks which are now (or at least seem to be, now) kicking in, all of this will be forgotten by the time the earth's atmosphere and oceans warm another 2 degrees Centigrade.

The public by and large believes the climate science establishment is a condescending bunch of snobs who believe they are entitled to live and work on the public 's money and at the same time so arrogant that they feel entitled to claim personal and professional privacy concerns apply to thier work.

I'm somewhat wary of listening to anyone who claims to know exactly what the "public" thinks - unless backed up by a poll, atleast.

The point anyway is that scientists and activists should think about what deniers/polluters might do and prepare appropriate response to win the PR battle. This includes good responses to hacking, IPCC Himalayan blunder, Snowstorms etc. We should almost treat it like a presidential campaign and run it like one.

Not that I think any government will actually do anything real about AGW - just some hand waving and sloganeering. Humans can't take actions that hurt personally in the short term for something that helps everyone in the long term.

Mac, Very well stated.

I am not mensa level, but I have the psychology backgound.

I r just a dum hic from arkysaw.

Hic^

Charles

and there can be absolutely no doubt that there were dirty tricks pulled by the researchers and or thier spokesmen at this point

Absolutely false.

I've been noticing the Decomposition of the court, I'd say.

Of course you know why NONE would file a defamation suit.

They would not stand a cat in hells chance of winning it.

IANAL, but defamation suit will not help here - unless monitary damage is shown. And no scientist I know of has a stomach for something like that ...

Better to let EPA make a policies based on CC and let deniers/polluters bring challenges.

I have always thought that Dioxin [etc] poisoning will be the limit to pop growth. Once we are sitting in the cold and dark [as I watch the snow falling again here in the UK] as organisation crumbles, those who had the foresight to buy rubbish tips will be selling plastic, 50 yr old used diapers and other 'human peat' for the trolls to warm their open fires..

People didnt live for 30 yrs in old days just because of the hard life - it was the fire in your roundhouse/wigwam etc that poisoned you.

Trash, thrown away, lost over board, left on the beaches of the world, or just about anywhere, be it up river or down on the coasts.

The ocean stirs it around and slowly breaks it down to the hair fine particle that finds its way into you own diet.

100's of millions of tons of trash plastic in the oceans at least.

Best use for the stuff is to be ground and reused. Or dissolved.

Charles.

Yep in general I agree with what your saying.

One more point is that know one really knows what the fundamental level of demand is for oil. By this I mean both infrastructure and also what decisions people are willing to make. I'd argue for example that plenty of case history exists to suggest that the car is the last thing to go and its what people will hold onto. This is because once its gone its gone. If you can find stats I suspect that many families reduced to living on welfare try and keep their car.

In general what I'm trying to say is few people are really considering the economic landscape when things are seriously stressed. We are not even close to the level of desperation that occurred during the Great Depression. Certainly the safety nets put in place since then are playing a role but also the modern dual income household can take a hell of a financial hit and still go on with daily life. They may lose access to credit and default on their debt obligations but in general if they can make some income at all they can make it at some level. With two or more potential wage earners you can get buy.

I think we have crossed the Rubicon if you will on the matter going into 2008 families where fighting to hold onto their gains primarily speculative gains in real estate going into 2010 families are focused increasingly on day to day survival and not living on the streets ( with no car ). Demand patterns are very different between the two cases. Most importantly is that pre 2008 people where willing and able to sacrifice to make their debt payments while now they are willing to default and keep their daily living standard higher.

This growing group of people focused on paycheck to paycheck life that have defaulted on their debt probably filing bankruptcy represents a group that is far less likely to cut back dramatically on gasoline even as prices rise. This is because driving a car is the last thing that they have which keeps them differentiated from the true poor. Coming form Arkansas this is very well known and its the 4X4 in front of the trailer or the Cadillac in front of the shack. In America once you give up on the homeowner dream there is a second level if you will which is car ownership and driving.

People don't think about it much because most people are a bit better off than this lower middle or upper poverty level class.
But there is this huge intrinsic level of resistance and it there for a good reason. The infrastructure in the US is geared towards the automobile. If you have a car then your lifestyle is similar to people with a lot more money if you don't then your mobility and life style is in general dramatically different and a lot more restrictive in the US.

Thus I think that there are a lot of excellent arguments for a strong resistance level in the US at a certain consumption level.
I of course thing we have already hit our inelastic demand level and that a further fall in demand of any large magnitude is unlikely.

I've thought about it a lot and I've come to the conclusion that I will keep a car as long as I can. If gasoline price go high enough I'll use alternative transportation but I don't see me giving up on car ownership even if I just use it on the weekends for pleasure driving. Probably keep it to buy groceries also until local corner stores come back. Or if I live in the country make the biweekly or monthly run into town. In short I'd keep right on using gasoline as long as I could even if it became a luxury good.
I'm a bit less into cars then a lot of people but I'm willing to hang in there to the point that its one of my luxuries.

Thus I have to think that demand for gasoline exists right to the point where its a true luxury for many and no longer a necessity.

http://www.lovemarks.com/nomination/62

This is about the Vespa in post war Italy but my point is that people are not recognizing this intrinsic demand.

On another tact every now and then people claim that as things get bad people will give up their mobile phones and say cable TV.
In both cases esp mobile phones I think people are seriously missing the intrinsic demand factor.

Of all the things we have done in modern times I'd argue that the car/motorbike mobile phone and then TV are the luxuries that people will keep as long as possible. These are your average person not your radicals but your plain ordinary person.

Again its trivial to figure out this is true since if you go to even the most impoverished place in the world you find cars/motorbikes mobile phones then TV's :)

That does not say what the actual overall consumption level is for oil products simply that the demand exists right down to the bottom.
Real demand all ways equals supply but if you spend a bit of time looking at it then it seems clear that their is significant real demand for oil products even down to the point that they are luxuries not necessities. Basically your not going to outbid the farmer in Africa that uses a small motorcycle to haul his crop to market or take his family once a month to the city etc.

Rising prices will simply ensure that oil usage is a rarer and rarer luxury yet its also persistent. At some point of course the remaining demand levels and alternative biofuels meet in a viable system. Just as obvious this can't be done until demand has dropped to a fraction of what it is today. But thats the substitution point where alternatives to using oil for luxury use are viable.
Probably biofuel but perhaps electrical who knows. Heck for a lot of the world probably donkeys and mules and horses no telling.

The key point is with a bit of thought its fairly clear that oil consumption can rapidly transition into being a sought after luxury item that people are willing to pay for thus the floor or intrinsic demand level is in my opinion far higher than most people realize and price will simply ensure that you partake in luxury use less often. Lets say you love a fine steak and when your rich you have one every other day. As you get poorer you have one less and less often until say you only have one once a year as thats all you can afford. Oil has this sort of luxury good capacity.

Perhaps one day in the future this might be the only time someone rides in a car.

http://www.firstcarrental.co.za/-Weddings-car-hire.aspx

But I'm pretty confident that the demand is there all the way down to the point that its a treat at your wedding.

Charles,

There is a key assumption in this paragraph that not everyone shares:

However it is not only possible but likely that the US economy could improve in the first half of 2010 until the next oil (or gasoline) price spike arrives. One reason the US is blessed for now is that markets are malfunctioning by being overly concerned about the relative value of the Euro vs. the dollar, when it should be concerned with the absolute level of net exports that westexas keeps talking about.

Quite a few people are waiting, not for a recovery, but for another leg down in the markets and general economy due to any one or more of the following: sovereign default, Chinese banking issues, commercial real estate collapse, city/state bakruptcies -- take your pick.

I fully expect markets to respond to any such calamity, especially Euro-troubles, as they almost always have in the recent past -- with a rush to the dollar which will drive down the dollar price of oil. This malfunctioning you mention may continue for some time and will likely be accompanied by a further, perhaps modest decrease in demand. Any bullish oil traders may find themselves in a short squeeze as a result.

As I said above, timing is obviously the difficult part and, if a year passes without an economic crisis, I will probably have to modify this prediction. But for now, this is what I expect.

You are absolutely correct, however, that global net exports are the only thing we need to pay attention to for the long term and the story there is pretty obvious:

1. once a nation switches from exporter to importer it never goes back
2. every decade, more nations make this switch

From the Energy Export Databrowser:

The green "exports" curve in this case represents the total amount of oil available to the global markets.

We will slowly watch as the green countries on the map wink out and change to red. Here are the nations that have recently made or are about to make the switch from exporter to importer:

• Indonesia (2004)
• Great Britain (2005)
• Vietnam (2010?)
• Egypt (2011?)
• Argentina (2015?)
• Mexico (2016?)
• Denmark (2017?)

I'm still dumbfounded that players in the oil futures markets can't figure this out.

-- Jon

westexas, sadly enough this happens. But also sometimes very serious adverse effects are so infrequent, that they don't appear in the trials. Even then, most registered medicines have serious adverse effects in 1:10.000-100.000 patients and stay registered. It is the reverse side of the medal of pharmaceutical healthcare.

If I were a real sneaky hillbilly and thought I might be getting seriously sick , I do believe I might be tempted to cross a couple of state lines, get a fake address, a throwaway phone, and a diagnosis fron a doctor who knows me as the new patient just moved to the nieghborhood.

Then I might be tempted to buy a health policy w/o saying any more than necessary.

Seriously, I am a free market kind of guy, but the medical and insurance businesses have sunk into such a cesspit of buttcovering and money gouging,aided, abetted, and turbocharged by the legal prfession, that I can see only one hope for a return to sanity.

Euro style socialized medicine.It would be unfair as hell to a lot of people, but in the end, we would all be better off-excepting the parasites making a living out of the health care system without contributing constructively to it.

One aspect of our modern capitalist way of doing business that is usually overlooked is the tendency of bueacracies, companies, and industries to grow like cancers, until a point is reached where by the product delivered is entirely secondary to the maintainence of the evergrowing organism doing the delivering.

The problem is probably not so much caused by drugs that kill, but by drugs that have no measurable effect whatsoever, cherry-picked from a whole range of clinical trials conducted by the companies that own the drugs themselves. If the sample size is small enough and if there are a sufficient number of trials, you will always find a proportion whose results by pure chance can be classified as 'statistically significant'.

Good article on the subject by Ben Goldacre at his Bad Science Blog:
Head to Head
Is the conflict of interest unacceptable when drug companies conduct trials on their own drugs? Yes

http://www.badscience.net/2009/12/by-me-in-the-bmj-the-dodginess-of-drug...

We pay a lot more than even the nearest comparable country yet have as many uninsured as S Korea has people almost.

'Nuff said.

Today insurance companies don't make a big percentage compared to many other businesses, but that's only part of the "profit". Some goes to docs, some to lawyers, some to bandage companies, some to companies who make machines that go "bing", and who knows where else.

To reduce cost more than the value of graft (which is likely significant), you'll have to cut services. Just changing who processes the paperwork and collects money and pays bills is only going to address a small part of the cost picture.

There is a dichotomy, but unlike years ago, even when I was a young boy, it wouldn't even occur to over 99% of the population to take the train on a long distance trip. Part of that is that our trains suck but part of the reason they suck is that they have been neglected. Even with massive investment to make them a viable long distance tool, it would still be difficult to get people out of their autos or what has become a horrible nightmare, our aviation system.

Part of it, I guess, is that I am a romantic and love those old movies where almost everyone took the train. Loved my experience in Europe as well. I am also old enough to have experienced actually getting around a fair bit with a long distance train.

But then the love affair with the auto got out of control. We could put a dent in that love affair if we neglected the interstates even more than we already have. Unfortunately, the stimulus money fixed up considerably some of the interstates that were in deep disrepair. Shortsighted, I think.

The problem is that we think we must do it all. Bring back a decent train system and continue to maintain and expand highways. Doing both just delays the day when people won't have a choice.

We shouldn't wait for fuel to go through the roof before we have an alternative in place. By that time, it will be too expensive or perceived to be too expensive to engage in what will be called a luxury.

Frankly, I don't think we will ever truly recover from this recession. On top of the government being broke, there is a resurgence on the right by those who don't want government to do anything other than police our social mores.

It would probably be best to set aside that wireless "charge while driving on the freeway" concept from upthread for a while. Sure, I've heard about the lab experiments in transferring small amounts of power over distances on the order of a meter, and I see no theoretical technical reason why it couldn't be scaled up. Still, it seems ludicrous to envision building, say, 100,000 lane-miles of that sort of thing, and at a power level suitable for running vehicles, i.e. orders of magnitude more than what's been demonstrated. It would probably make electrified rail look dirt-cheap. And given all the ridiculous fuss over the "risk" from power-line fields and cell phones (which must be utterly trivial since the "effect" seems to be buried in the noise despite the ubiquity of both), the whining and lawsuits would kill it even if it were otherwise practicable.

Isn't it only about 100sq miles to replace the entire US power grid? I think that's what they were saying - 10x10 miles using something like the Ausra solar thermal plant. Compared to war and other things that we have done. We built the highway system I don't see why we couldn't rebuild the whole thing if that is what it takes.

(1) Maybe, then, given this winter's events, top-level Eurostar engineering staff need to receive a briefing from Swiss Federal Railways on coping with snow, since it was apparently beyond their ken. And the British could certainly obtain and heed some advice on coping with not just snow, but "leaves on the line", especially when said leaves are of the "wrong kind".

(2) Private automobiles can certainly come close except in large overcrowded cities. A 96% record indicates failure on about 4% of one-way journeys even in an ideal case where one needs only one train or bus to complete a journey; in the real world one often needs two or three. To attain, say, an 8% rate of failure, my car would have to let me down more than once a week, week in and week out; it just doesn't happen quite that often even in winter. As an added bonus, the car makes it possible, for example, to deviate somewhat from the usual route or time in order to offer someone a lift, pick up some groceries, etc. Even the smallest deviation is often punished by a huge cost in time when using buses or trains.

(3) It's always amusing and disgusting to see "congestion" given as an excuse for poor service when the carrier (or a regulatory agency) sets the traffic level. In such cases "congestion" means nothing more than "I chose to commit fraud by selling more capacity than was actually mine to sell." (With airlines, the fraud is usually committed by governments or air-traffic quangos that fail to limit takeoff and landing slots; for example they could auction off such slots to the highest bidder, with severe penalties on airlines that hoard slots without using them.)