I sure would like to see some form of federal incentives to drive alternative energy investment, other than the ethanol subsidies that just make the farmers happy. The more general the better I think, as it should not try to direct the innovation toward one solution but focus more on KwH or MPG.
Too the extent that the forgone investment involves maintenance, rather than the plugging and abandoning, of stripper wells, it is permanently lost production.
On an unrelated note...
Top 10 give-the-middle-finger to the U.S. picks for PE Obama's Senate seat by Governor Blagojevich
10) himself
9) Michael Jackson
8) that guy who caught that ball that f'd the Cubs
7) Howard Stern
6) Jesse Ventura
5) Alan Greenspan
4) a Madoff boy
3) somebody with the surname, 'Booth'
2) nobody, 'cause these f'n Senators can't deal with odd numbers
1) anybody from The Hair Club for Me
It'd be nice if we could contrast that with worldwide supply & demand.
Rogers convincingly details the opposite natures of the economic & commodities cycles. Overinvestment leads to overcapacity, in turn leading to cheap materials that drive a booming economy. In time the underinvestment and booming economy clear the overcapacity and the rush is on to build new capacity; however, that doesn't happen overnight, leading to much higher commodity prices that inevitably drag on the economy. And so the cycles continue... or do they? Excessive supply did not cause this collapse nor did high prices.
"Both Firefox and IE are crashing more often on CR lately. Is it just me, or is it new ad structures on the page? \t R | \t \t \t \t12.15.08 - 11:50 pm | #"
I think there are one or two ads out there that when they load cause FF to crash for me. It does not happen often enough for me to poke through the logs to figure out which ones they are though to block them.
Had a chat with a good friend who runs operations for a middling size O&G company today. It's a disaster in process. They are way past thinking about making investments, just trying to figure out how not to blow their loan covenants next quarter.
I have to say, what that chart shows above all is that
(a) petroleum investors are (in some ways) total morons, always buying new supply just in time for prices to crash, and
(b) we really need an intelligent national energy strategy to develop resources that are not only less environmentally damaging but also either less subject to boom-bust cycling, or at least decorrelated with the oil price cycles.
Also,
(c) if the chart follows the prior bubble's path, the oil patch is about to re-run their early 80's depression. Texans are about to be served some humble pie, and Gulf Coast real estate is likely to get cheaper faster than expected...
P.S. As mentioned in an earlier thread today, Wisdom Speaker is now taking over for Wisdom Seeker. He continues to seek wisdom, but now also seeks to speak it, where possible.
@Zephyr - Last time around, the price took about 6 years to fall halfway from peak to trough.
This time, it's done that in about 3 months!
(Assuming trough is around $20/barrel as previously.)
I'd also note that the 1980s oil patch real estate crisis was intimately connected with the S&L crisis that evolved soon after... Lots of investments predicated on never-ending oil wealth turned out to be paper fantasies.
Maybe it's different this time now that we're much more into oil importing, though.
I don't understand oil future contracts. If analysts are saying we will see $30/bbl oil next year, why are the futures from March on out all priced over $50?
GS also called for a $90 "superspike" back when we are $60 on the way up, which seemed like a wildly bullish call at the time... these things are relative
I don't understand oil future contracts. If analysts are saying we will see $30/bbl oil next year, why are the futures from March on out all priced over $50?
Sardonic | 12.16.08 - 12:24 am
Deflation, of course. March's $30 will buy what $50 buys today!!
We are moving much closer to it it now. It might happen next year.
http://www.russiatoday.com/news/news/34730 Although Russia's reserve fund, built up when oil prices were high, should be adequate to keep the economy on track for at least three years, joining OPEC may be a way forward.
Aleksandr Razuvaev , Chief Analyst at Sobinbank, says this could happen sooner rather than later.
"I doubt that Russia will immediately become a new member of OPEC. But I think it's 100 per cent likely to happen next year, and Russia will play a leading role in this organization"Â he said.
I am still waiting for the formation of a wider "commodity OPEC". It will get quite interesting in commodity land over the next 12 to 24 mo
Russia solves the problem of the OPEC members cheating with their supply. Basel Too | 12.16.08 - 12:36 am | #
It just might. As I mentioned here before I was part of a project team that developed the basis for the last down move at Aramco Explorations in the early 80s. The aim was to force other OPEC members to stop cheating. We projected the Saudi budget impact down to $5 a barrel when a barrel was in the $30 range. The Saudis won the battle and lost the war, at least until the late 90s.
I believe that the Russians will play it a lot smarter as they suffered deeply from the consequences of the Saudi actions.
Although Russia's reserve fund, built up when oil prices were high, should be adequate to keep the economy on track for at least three years, joining OPEC may be a way forward.
Aleksandr Razuvaev , Chief Analyst at Sobinbank, says this could happen sooner rather than later. RE | 12.16.08 - 12:35 am | #
Is that the fund that's down 30% in a little over 2 months? And they need something like $80/bl for a balanced bugdet. Seems a bit of a rosy prediction if you ask me.
Cant wait to see the damage in the Canadian Oil sands - where some costs to extract are at current market prices. Was a great idea to dump a few billion in there at $100 oil.. but at $40 and change? Ouch? Be prepared to see some pretty massive and nasty write downs from that area soon...
Is that the fund that's down 30% in a little over 2 months? And they need something like $80/bl for a balanced bugdet. Seems a bit of a rosy prediction if you ask me. Pissed Off In California | 12.16.08 - 12:52 am | #
I think that is the primary reason why quite a few are calling for a much higher Ruble devaluation.
From The Economist print edition
An online Nostradamus, and the search for his identity
BACK in September a message appeared on an online bulletin board owned by Daum, the most popular web host in a country, South Korea, with a huge internet culture. Written by someone called Minerva, it predicted the imminent collapse of Lehman Brothers, a now-defunct investment bank.
Wild speculation is normally disregarded, but when it proved to be right just five days later, a prophet was born. Word raced through the netizen community, and when Minerva went on to predict that the Korean won would fall against the dollar by around 50 won a day in the first half of the week of October 6th, his followers began to watch the currency markets in anticipation. The won did indeed fall by about that much over the next three days.
"I think that is the primary reason why quite a few are calling for a much higher Ruble devaluation. "
Roubini is calling for a 25% devaluation. And wasn't there some body posting as dc100 I believe a while ago talking about major devaluation rather than eat through much more of their SWF?
RE, what is your take on RSX at these prices? bgates | 12.16.08 - 1:01 am | #
I don't watch Russia closely enough to give you a good answer. However, in the present climate I would consider it highly risky as I don't believe that the crude correction has fuly played out. However, if the Dollar continues its fall at this pace for another week or two than all bets are off as energy may benefit disproportionately. The Dollar is shockingly reversing even faster than it rose.
The peak oil story has not been nullified by the scramble to unload every asset for cash -- including whomping gobs of oil contracts -- during this desperate season of bank liquidation. The main implication of the peak oil story is that we won't be able to generate the kind of economic growth that defined our way of life for decades because the primary energy resources needed for it will be contracting.
Just as global oil production peaked, our economy evolved into a morbid hypertrophy, and the chief manifestation of it was the suburban sprawl-building fiesta that has now climaxed in the real estate bust. By the early 21st century, when so much American manufacturing had been swapped out to Asia, there was no business left except sprawl-building -- a manifold tragedy which wrecked the banks that financed it, and left the ordinary people mortgaged to it with ruinous liabilities.
That economy is now in its death throes. The "normality" it represents to so many Americans is gone and can't be brought back, no matter how wistfully we watch it recede. Even so, it was obviously not good for the country. The terrain of North America has been left scarred by unlovable objects and baleful futureless vistas that, from now on, will shed whatever pecuniary value they once had. It represents the physical counterpart to the financial mess that has been left to the young generations to clean up -- and the job will take a very long time.
-JHK
We have to, so to speak, get to place mentally where we can face the kinds of change that are now necessary and unavoidable. We're not there yet. It's not clear whether the elected new national leadership knows just how severe the required changes will really be. Surely the public would be shocked to grasp what's in store. Probably the worst thing we can do now would be to mount a campaign to stay where we are, lost in raptures of happy motoring and blue-light-special shopping.
The economy we're evolving into will be un-global, necessarily local and regional, and austere. It won't support even our current population. This being the case, the political fallout is also liable to be severe. For one thing, we'll have to put aside our sentimental fantasies about immigration. This is almost impossible to imagine, since that narrative is especially potent among the Democratic Party members who are coming in to run things. A tough immigration policy is exactly the kind of difficult change we have to face. This is no longer the 19th century. The narrative has to change.
The new narrative has to be about a managed contraction -- and by "managed" I mean a way that does not produce civil violence, starvation, and public health disasters. One of the telltale signs to look for will be whether the Obama administration bandies around the word "growth." If you hear them use it, it will indicate that they don't understand the kind of change we face.
-jhk
" Blackhalo writes:
I sure would like to see some form of federal incentives to drive alternative energy investment, other than the ethanol subsidies that just make the farmers happy. The more general the better I think, as it should not try to direct the innovation toward one solution but focus more on KwH or MPG.
Blackhalo | 12.15.08 - 11:36 pm | # "
The British have an alternative to gasoline called "petrol."
The US can mandate that all gasoline be 50% petrol by 2010.
That will work about as well as any other government energy policy in the last or next decade.
"A tough immigration policy is exactly the kind of difficult change we have to face."
we have the world's toughest immigration policy in the world now - jobs shrinking at an incredible rate.
in any case, native-born americans should feel grateful that this economy has been largely fueled by folks who will never see a social security dime in their lives... a more subtle element of the ways American boomers have screwed the world forever.
I see FRNs as the most fraudulent paper on the planet, so I'm not shocked... bgates | 12.16.08 - 1:29 am | #
I am a gold investor as well. However, investing in gold just about obligates you to watch the dollar as the relationship is so pronounced. The dollar is the primary price signal for gold though at a time of worldwide currency debasement/competitive devaluation this is bound to change at some point. I think it will happen within the next six months.
Have you read Heinberg? Pretty good history tying human advancement to energy forms & availability. Explains a lot, and doesn't bode well for the future.
Let's not forget that, at the end of the day, Joe Sixpack--the American consumer--is the most powerful variable in any Keynesian equation.
At the moment, household liquidity is the lowest on record, and falling. Additionally, the consumer has restricted access to lines of credit and there is no sign that is going to change any time soon.
So, Joe pulled back when the price of fuel and everything else broke his back. Now, we're seeing demand destruction and unemployment is rising.
Now, let's say that GM declares bankruptcy. According to the Center for Automotive Research, a 50% reduction in Detroit 3 activity would produce 2,462,375 job losses in 2009, or approximately 205,198 per month. Add that number to the claims already coming through the pipe and you're looking at double-digit unemployment rates. That doesn't even begin to include the losses to personal income or tax revenue.
There's another issue. Everyone is concentrating on the stabilization of asset prices--specifically, financial assets. They're focusing on that because that's Bernanke's focus. After all, OMG, we have to protect the banks. Aside from the talk here, no one is addressing the problem of falling real asset prices.
Joe Sixpack is the 1,000-pound gorilla in the room and his balls are in a vise. The high debt load is squeezing from one side and falling asset prices are squeezing from the other.
I don't see where Bernanke, or anyone else, has successfully addressed the problem of stabilizing the prices of real assets. Frankly, I don't think they can do it. Right now, all I see are a few extremely liquid banks and millions of illiquid households. Further, I don't see any sign that's going to change any time soon.
As a general rule, Joe Sixpack doesn't spook easily. So, consider this: when the CPI prints tomorrow, it's expected that it will have dropped by the most on record, and the record goes back to 1947. Also consider that spending is now down 20% from the same time last year.
A federal lawsuit was filed this morning against U.S. Treasury Secretary Henry M. Paulson, Jr. and the Federal Reserve Board to stop all bailout funds from going to American International Group, Inc. (AIG). According to the lawsuit, the U.S. government, through its ownership of AIG, is not only violating the Constitution, but also promoting and financing the destruction of America using American tax dollars."
Read the whole article to catch the unbelievable portion. PDF to the filed complaint is linked in the article. Thomas More Law Center - News
Both Firefox and IE are crashing more often on CR lately. Is it just me, or is it new ad structures on the page?
R | 12.15.08 - 11:50 pm
Better solution than Firefox or IE: download google Chrome and don't install flash....for sites you need which use flash, use one of the other browsers.
My three local circuses, Yankee, Shea, and Giants Stadium, all currently have replicated almost identical twins, only a few feet away, like those pods in the sci-fi movie.
The plan is to tear down the old soon after the final touches are added. But I think they should leave them standing, as comic monuments to "growth".
Flooding the economy with cheap dollars at some point will increase prices. People are cutting back, filing for unemployment benefits, fretting over health care insurance that they know soon they won't be able to afford.
"Aside from the talk here, no one is addressing the problem of falling real asset prices."
Worst of both worlds. Production part of the economy contracting badly while financial/consumption part of economy outright collapsing. 35-50 percent GDP reduction is quite possible within next few years.
Seniors adjusting to incredibly low yields (and the selling of tanking muni and corporate bonds and equities at recent bottoms) spend less of the little money they do spend
After WWII the Russians were good cartel players. They limited the amount of oil, gold, platinum, and diamonds they exported. During the cold war they borrowed money in eurodollars and dutifully paid their debts. After the thaw in the cold war they flooded the market with oil and diamonds. It will be interesting to see, not what the Russians say they are going to do; but what the actually do. In times of economic weakness OPEC has had problems with both cartel members and nonmembers cheating to get additional revenue by exporting more oil.
I'm not too worried about Exxon Mobile. When they cannot make a profit from oil send me an e-mail. Suppose we will be short of coal then also. No matter what the source of energy the price can and will be run up due to the amazing public. Hell, they could run up the price of rats while we the people worry as to whether they'll be able to trap enough. Just imagine what animal rights crackpots could do to rat prices.
From that article,"(w)hatever the size of Opecs cut, the floating storage surge is a clear sign the cartel is losing its battle to cut supplies more quickly than demand falls."
Yogi If you look at yap stones I wonder if Easter island statues were actually a form of money. If so in the end they were trying to create larger and larger statues (trying to inflate their money) but society was collapsing. Becoming more efficient in the means of production along with proper stewardship of the earth would seem to be the only way to continual prosperity. It may not be possible.
Tg my favorite part of the story is the archaeologists who tried to figure out how they erected the stones without cranes or even pulleys. Various theories were put forth for decades, including alien visits...
Finally, one had a brilliant idea. Why not ask the remaining locals. They were a bit indignant, wondering why no one bothered to ask them before, but proceeded to demonstrate how simple it was, using sand to move them a few inches at a time.
Low Treasury yields do not imply domestic deflation.
In Bernanke's speeches that CR linked to in a previous post, he (Bernanke) says that the Fed should try to lower long-term rates on Treasuries if/when it runs out of fire-power in short-term rates. Since the latter has happened, and since the Fed has been ballooning its balance sheet in all sorts of creative new ways, it's reasonable to suppose that the lowering of rates on longer-dated Treasuries is at least partly the Fed's doing. In other words, the Fed is probably buying Treasuries on the open market with newly created money. This is part of "quantitative easing" and is quite the opposite of deflationary.
The dollar's strength is a different matter. As the dollar becomes stronger relative to other currencies, that lowers the cost of imports, which is deflationary (in the US). The dollar's rise likewise raises the cost of US exports in other countries, which might slow the US economy further, which is also deflationary. But there has often been inflation during times of the dollar's strengthening. My guess is that a stronger dollar (relative to other currencies) will not overcome the other factors currently in play vis-a-vis deflation/inflation. (These other factors are monetary policy, fiscal policy, demand destruction, and capital destruction).
In theory, sufficiently determined fiscal and monetary authorities can offset any deflation. Bernanke has advertised his anti-deflation colors for years. Obama seems on board with huge stimulus. Congress will probably go along. Consequently, I'm betting that U.S. domestic deflation will be relatively contained. It depends, though. Ben, Tim, & Barack may need to drop more dollars from helicopters than will be politically or financially feasible. If so, then, well, ouch.
Note also that the Fed has been struggling a bit so far, as it has been trying to do quantitative easing mostly by its lonesome. It's been pumping liquidity into financial institutions, and that liquidity is just sitting there. Debt is out, saving is in, and that's a good thing because we have massive solvency problems, not just a liquidity problem. But that means that even quantitative easing might have a limited effect, because it usually is designed to work its magic through increased lending. However, if money creation is coupled with fiscal policy that directs the new money to people who will spend it (e.g., state governments or unemployed workers), then we will get the economic equivalent of an Emeril "BAM".
Would an edited version of CR comments be useful? How about a remix? A cross-referenced index? The daytime comments are impossible to follow in their current form. I can put time into it but my software skills suck. Some of the work can be done by a bot but a good index must be logic-driven.
"However, if money creation is coupled with fiscal policy that directs the new money to people who will spend it (e.g., state governments or unemployed workers), then we will get the economic equivalent of an Emeril "BAM"."
--Droll
I watched an excerpt from an Obama interview today. He claims to have a Christmas list of "shovel-ready" projects to spend money on. Probably a lot of these are State projects, so Congress will be on board. If the feds don't require matching funds from the bankrupt states, I think you'll see your directed fiscal policy.
The question is: how much is enough?
The good news is that construction labor is pretty good at moving to where the work is. The bad news (as I have seen expressed here) is that construction labor is not completely fungible, and of course a significant part of the Mexican labor has already departed the country.
I'm guessing that it will take a lot of construction activity to provide the needed fiscal stimulus, since this "WPA" work will not be accompanied by the speculation and leveraged financing that accompanied the housing construction boom. But it should at least prop up immediate consumer spending fairly quickly. probably less on durables than on consumables...
Yogi, it must have taken many labor hours why and however they did it. Somehow that has to be supported by the rest of their economy. Did it bring about their decline? Was it simply stimulus spending to keep the unemployment low?
"The good news is that construction labor is pretty good at moving to where the work is. The bad news (as I have seen expressed here) is that construction labor is not completely fungible,..."
the fed should ad 1/2 cent in tax to provide investment for sustainable energy
Yes, that will work wonders. Siphon off 50% for administrative fees, then let the bureaucrats that invested in IBs and AIG as a way to sustain our present economy choose our future investments. Brilliant.
If alt energy is such a great idea - go for it with your own money. Start a hedge fund and invite your friends and family.
Much of this alt energy is like teenage rebellion - anything but the status quo is cool - so long as mommy pays for it.
Don't you guys ever sleep? Broward Horne | Homepage | 12.16.08 - 4:14 am | #
I'm kept up at night wondering how we're ever going to deal with the massive cash inflow to the government when we start making money from the TARP, and if I should offer to match the profit dollar for dollar. Of course, I'd have to cap it at ten dollars, but I'm wondering if that's ridiculously high and might cause animosity for trying to show up the government. It's amazing I get any sleep.
Finally, one had a brilliant idea. Why not ask the remaining locals. They were a bit indignant, wondering why no one bothered to ask them before, but proceeded to demonstrate how simple it was, using sand to move them a few inches at a time. 1 currency soon [yogi] | 12.16.08 - 4:32 am | #
Read AKU-AKU by Thor Heyerdahl, the man who sailed the Kon-tiki raft from Peru to the Marquesas. He actually paid the Easter Islanders to show him how their ancestors carved them, moved them, and erected them. It's amazing what they can do with sheer muscle power and stone age tools. The archeologists say they've disproven his theories on the people and culture of the island, but I don't know if I trust them and he spins a nice story
British "petrol" (or AGS) is the same as US "gas" or "gasoline", the lowest MW petroleum distilate cut (C7-C9).
Years ago I owned a Triumph motorcycle. The owners manual called for washing the oil filter with, "paraffin," at every oil change. In my neck of the woods, paraffin was a hard white solid that one sealed jelly jars with. In those days before the internet it took a long time to figure out that British paraffin is what Americans call kerosene.
So misallocation of resources to the statues was not a root cause. 1 currency soon [yogi] | 12.16.08 - 5:17 am | #
IIRC Easter island is the most remote point on earth, so regardless, the population would outstripped the resources. And since there was no intermediate travel destination for 1500 miles, the idea of keeping ocean going vessels around probably didn't look sensible until it was clearly too late, if it made sense at all.
1 currency soon [yogi] writes:
"Doesn't sound like good news for the laborer. How about moving the work to where the labor is?"
You don't always have that choice when you are investing in public works. Let's say we decide to build a big solar power station. Would you build that in Flint, or someplace in Arizona?
Construction workers moved to Las Vegas to build enormous casinos and unneeded housing. I'm sure that they would welcome the opportunity to move elsewhere to build something more useful. LV is not exactly an ideal place to settle down.
If you can propose a useful public works project in Flint, I'm sure that it could get funded. But you would have to justify building a public work in an area that is in the process of depopulation due to unfavorable weather and politics. If we're going to spend money on public works, we should do so in a way that is constructive for the future. To me, that means building in places that have an economic future, where people actually want to live. Remember that Michigan was able to thrive only because of the depressed economic conditions in the South when all of the industry was located in the North. It doesn't do as much good to build out the places where people used to be as it does to build out the places where people are going.
Absolutely, J6P is the metaphorical end point consumer, a point that I've been making for much of this year and realizing that John, Yves, Fritz and Ivan 6P are as much a part of this equation. The fundamental issue is the over-extended and leveraged consumer, who is now deleveraging. It has gone psychological and no amount of liquidity stimulus to financial intermediation systems will fix that. OECD markets are displaying massive amounts of fear and desperate short-term gain measures, both in credit and equity. Pick your indicator - VIX, TED, A2P2, bonds, whatever.
But the Asia markets and shipping are showing something else entirely in the real sectors: apocalyptic loss of confidence in future demand, everywhere. What people generally fail to recognize is that the last bust was only 10 years ago - same market participants, same burned punters, same wounded policy communities. The panic retrenchment has already started and there are precious few signals of an upside.
And for the hundredth time, hosing liquidity at a solvency problem will not work.
I know this board generally gets this. It's my daily interactions which wind me up on broadbanded cluelessness.
Finally protection to financial holocaust survivors:
Judge signs order to protect Madoff investors
NEW YORK A federal judge on Monday threw a lifesaver to investors who may have been duped in one of Wall Street's biggest alleged frauds, saying they need the protection of a special government reserve fund set up to help investors at failed brokerage firms.
U.S. District Judge Louis L. Stanton ordered that clients of Bernard Madoff's private investment business seek relief under a federal statute created to rescue cheated investors. Stanton also ordered that business be liquidated under the jurisdiction of a bankruptcy court and named attorney Irvin H. Picard as trustee to oversee that process."
Valid points, sm, but keep in mind moving population around even in the name of efficiency has costs too. (Termed "dislocation" by many economists) I don't want to live in Flint, but I don't want to see them starve. Balance.
good night.
That Yahoo article is misleading. It doesn't cite text in the order or give the procedural context, or even say who the parties are. A Judge can't "order clients to seek protection from SIPC."
Don't you think the order transfers control over the accounts to the SPIC, so Madoff employees can't touch them? I think the SPIC also has the power to transfer accounts to solvent brokers. As the guy of cnbc said last night, no one knows at present which account records are complete and accurate and which ones aren't. So any transfers and or release of funds will probably be slow.
One other point. The talking heads seem to agree that anyone with an account with Madoff is responsible for submitting a claim and providing evidence that the claim is valid.
We will know soon how bad it is going to be. Retail sales for December are going to be fugly. Which will be bad for commercial real estate by Spring. Which will be reinforced by the coming carmeggedon.
Which will lead to a generally yucky day for most people.
Another omen of doom? When the Stones tour they won't sell out the stadium. They have sold out every other way possible however.
Meanwhile, a federal judge on Monday threw a lifesaver to investors who may have been duped, saying they need the protection of a special government reserve fund set up to help investors at failed brokerage firms
I'm not sure that "bailed" is the right word. The SPIC insurance covers only $500,000 per account and many investors had much more than that in their accounts which presumably is uninsured.
Credit enima is coming..... writes:
I would hold physical oil but the neighbor might report the oil drums in the driveway.
Credit enima is coming..... | 12.16.08 - 12:36 am | #
Is funny and conflates the two markets I'm having a lot of difficulty figuring out.
We will know soon how bad it is going to be. Retail sales for December are going to be fugly. Which will be bad for commercial real estate by Spring. Which will be reinforced by the coming carmeggedon. Which will lead to a generally yucky day for most people. nova | Homepage | 12.16.08 - 6:51 am | #
TAKE THE MARKET ON THAT!!!!!!!! (oh... yeah.. they're doing that right now...)
"TAKE THE MARKET ON THAT!!!!!!!! (oh... yeah.. they're doing that right now...)"
Seriously, though, was there some correlation to actual news for that futures blast off half an hour ago? Did Timmah Timmah hit the buy button instead of the snooze button when his alarm went off this morning?
"A federal judge on Monday threw a lifesaver to investors who may have been duped in one of Wall Street's biggest alleged frauds, saying they need the protection of a special government reserve fund set up to help investors at failed brokerage firms."
That was quick, not to a good thing to anger Israeli/American Jewish Overlords. Screw the rest of Americans.
MEXICO CITY (AP) - A U.S. anti-kidnapping expert was abducted by gunmen in northern Mexico last week, a sign of just how bold this nation's kidnapping gangs have become.
U.S. security consultant Felix Batista - who claims to have helped resolve nearly 100 kidnap and ransom cases - was in Saltillo in Coahuila state to offer advice on how to confront abductions for ransom when he himself was seized, local authorities said.
"A federal judge on Monday threw a lifesaver to investors who may have been duped in one of Wall Street's biggest alleged frauds, saying they need the protection of a special government reserve fund set up to help investors at failed brokerage firms."
That was quick, not to a good thing to anger Israeli/American Jewish Overlords. Screw the rest of Americans. \t one_timmy | \t \t \t \t12.16.08 - 8:00 am | # Isn't he just talking about the SIPC?
Re local economies: I like this article, but realize this guy is basically describing Africa. He could have said "America, meet the African economy" except he left out the parts about open graft and corruption and Mugabe.
Really?, greater cashflow spurs more investment....hopefully not alot of money was spent on that study. What's next, a study to determine if its harder to breathe in a smoke filled room.
Tsar or czar[1] (Russian: царь (help·info), Bulgarian, Serbian, Ukrainian: цар, in scientific transliteration respectively car' and car), occasionally spelled csar or tzar in English, is a Slavonic term designating certain monarchs.
Originally, the title Czar (derived from Caesar) meant Emperor in the European medieval sense of the term, that is, a ruler who has the same rank as a Roman or Byzantine emperor (or, according to Byzantine ideology, the most elevated position adjacent to the one held by the Byzantine monarch) due to recognition by another emperor or a supreme ecclesiastical official (the Pope or the Ecumenical Patriarch).
U.S. May Give Car Czar Power to Force Bankruptcies
"TAKE THE MARKET ON GOLDMAN...... THEY ROCK!!!!!!!!!!!!!!!!!!!!!!!!!!"
Abso-frickin'-lutely. They beat the street! Consensus was for a loss of $3.70/share. Those smart guys blew it out of the water with a loss of $4.97/share. Go GS, Go!
U$D/JPY caving to new lows 89.74 and has been leading stock indices downward, maybe somewhat immune to what's left of the thundering herd mentality holding up equities. Leveraged way to be bearish.
OT, but helpful since professional and militant disinformationalists are particularly active when the legitimacy of authority is questioned, and systemic crisis loom.
Seventeen Techniques for Truth Suppression
by David Martin
1.\tDummy up.
2.\tWax indignant.
3.\tCharacterize the charges as "rumors" or, better yet, "wild rumors."
4.\tKnock down straw men.
5.\tCall the skeptics names like "conspiracy theorist," "nut," "ranter," "kook," "crackpot," and of course, "rumor monger."
6.\tImpugn motives.
7.\tInvoke authority.
8.\tDismiss the charges as "old news."
9.\tCome half-clean. This is also known as "confession and avoidance" or "taking the limited hangout route."
10.\tCharacterize the crimes as impossibly complex and the truth as ultimately unknowable.
11.\tReason backward, using the deductive method with a vengeance.
12.\tRequire the skeptics to solve the crime completely.
13.\tChange the subject. This technique includes creating and/or publicizing distractions.
14.\tScantly report incriminating facts, and then make nothing of them.
15.\tBaldly and brazenly lie.
16.\tExpanding further on numbers 4 and 5, have your own stooges "expose" scandals and champion popular causes.
17.\tFlood the Internet with agents. This is the answer to the question, "What could possibly motivate a person to spend hour upon hour on Internet news groups defending the government and/or the press and harassing genuine critics?" Don't the authorities have defenders enough in all the newspapers, magazines, radio, and television? One would think refusing to print critical letters and screening out serious callers or dumping them from radio talk shows would be control enough, but, obviously, it is not.
Dec. 16 (Bloomberg) -- Goldman Sachs Group Inc. reported a fourth-quarter loss of $2.12 billion, the first since the company went public in 1999, as asset values and investment-banking fees declined.
Exploration projects are continuing at a brisk pace from what friends tell me. Development will obviously slow down. No need to get it out of the ground quicker.
Exploration is strategic. Development is tactical. A drop in development work will reduce the day rates, making exploration more affordable. Of course, many in management have been drinking the Wall Street koolaid, so they may do something stupid.
Data acquisition and processing companies should see relatively little slowdown. Drilling and engineering firms will see a lot.
FWIW Firefox on Solaris 10 x86 doesn't seem to have any problems w/ the CR site.
I didn't go back to re-read it, but down around p.8 or 9, the CEO implies that the smaller E&P companies levered up with debt at the top and they're having a really hard time getting bond issues through.
It's conceivable we could see flat/falling energy prices for a long time. This is a deflation.
It implies to me that we're in for a short, sharp spike when Mexico and North Sea production fall off the edge of the world in a few years.
What happened to all the oil money from the record profits of just a few short months ago? Now we are to beleive that exploration can't go on without astronomical oil prices? Maybe all those dollars shouldn't have been distributed as share holder dividends and held in reserve for just such an occurance. But no, that money is gone and when the economy picks up we can again start paying the high dollar. There seems to be no incentive to reinvest profits for the oil companies futures, it all goes to line pockets, then when the market changes and demand is up we (the consumer) have to ante up for what should be business investment.
First
Dam
Lefty's lubricants made from petrol eh?
I sure would like to see some form of federal incentives to drive alternative energy investment, other than the ethanol subsidies that just make the farmers happy. The more general the better I think, as it should not try to direct the innovation toward one solution but focus more on KwH or MPG.
Too the extent that the forgone investment involves maintenance, rather than the plugging and abandoning, of stripper wells, it is permanently lost production.
Not good. Not good at all.
On an unrelated note...
Top 10 give-the-middle-finger to the U.S. picks for PE Obama's Senate seat by Governor Blagojevich
10) himself
9) Michael Jackson
8) that guy who caught that ball that f'd the Cubs
7) Howard Stern
6) Jesse Ventura
5) Alan Greenspan
4) a Madoff boy
3) somebody with the surname, 'Booth'
2) nobody, 'cause these f'n Senators can't deal with odd numbers
1) anybody from The Hair Club for Me
It'd be nice if we could contrast that with worldwide supply & demand.
Rogers convincingly details the opposite natures of the economic & commodities cycles. Overinvestment leads to overcapacity, in turn leading to cheap materials that drive a booming economy. In time the underinvestment and booming economy clear the overcapacity and the rush is on to build new capacity; however, that doesn't happen overnight, leading to much higher commodity prices that inevitably drag on the economy. And so the cycles continue... or do they? Excessive supply did not cause this collapse nor did high prices.
best get the big truck ready to roll...
BWWWWAHAHAHAHAHAHAHA!!
Whoa; I'm too young to have lived through the Lyndon Larouche insanity, but I'm looking him up on wikipedia; he looks like the pre-ron-paul ron paul.
Personally, I have been divested from the energy sector as of Q1 2009.
variant of 3 - dusty baker
Both Firefox and IE are crashing more often on CR lately. Is it just me, or is it new ad structures on the page?
R, nothing has changed. Sorry for the problems ...
Darn - I get complaints that people can't see the charts (from .gov sites) and other problems that I think are blogspot related.
Best Wishes.
CR plans the crashes, as folks here seem happiest when things are crashing.
"Both Firefox and IE are crashing more often on CR lately. Is it just me, or is it new ad structures on the page?
\t R | \t \t \t \t12.15.08 - 11:50 pm | #"
I think there are one or two ads out there that when they load cause FF to crash for me. It does not happen often enough for me to poke through the logs to figure out which ones they are though to block them.
Had a chat with a good friend who runs operations for a middling size O&G company today. It's a disaster in process. They are way past thinking about making investments, just trying to figure out how not to blow their loan covenants next quarter.
Calculated Risk(Excellent) writes:
\tR, nothing has changed. Sorry for the problems ...
Darn - I get complaints that people can't see the charts (from .gov sites) and other problems that I think are blogspot related.
Best Wishes.
| \t12.15.08 - 11:54 pm | #
\t Calculated Risk | \t \t \tHomepage
Calculated Risk | Homepage | 12.15.08 - 11:54 pm | #
no issues here.. You might consider loading Process Explorer to sluth out you problems.
Pardon my ignorance, but what's an O&G company?
SpendingPulse 2008 Holiday Midseason Update: U.S. Retail Sales Settle Into Steady Double Digit Declines Across Most Sectors
http://www.marketwatch.com/news/story/SpendingPulse-2008-Holiday-Midseason-Update/story.aspx?
Jeeebus!
Naw, we refill the gin bottles with watered down antifreeze, sell it under the Blue Lagoon Brand. I think I smell a price increase now.
O&G company
Oil. Gas. Company
corrected link?
MarketWatch.com
And no where is this more apparent than in Calgary Alberta where K budgets are getting slashed, bigtime!
I have to say, what that chart shows above all is that
(a) petroleum investors are (in some ways) total morons, always buying new supply just in time for prices to crash, and
(b) we really need an intelligent national energy strategy to develop resources that are not only less environmentally damaging but also either less subject to boom-bust cycling, or at least decorrelated with the oil price cycles.
Also,
(c) if the chart follows the prior bubble's path, the oil patch is about to re-run their early 80's depression. Texans are about to be served some humble pie, and Gulf Coast real estate is likely to get cheaper faster than expected...
P.S. As mentioned in an earlier thread today, Wisdom Speaker is now taking over for Wisdom Seeker. He continues to seek wisdom, but now also seeks to speak it, where possible.
On the bright side, those McMansions will likely get cheaper to heat/cool.
"petroleum investors are (in some ways) total morons"
my pathetic attempts to catch a bounce in E and BP this summer transcended mere moronic behavior
The last oil price bubble took 20 years to hit bottom. I wonder how long the price decline will go this time.
Perhaps it's different this time...
@Zephyr - Last time around, the price took about 6 years to fall halfway from peak to trough.
This time, it's done that in about 3 months!
(Assuming trough is around $20/barrel as previously.)
I'd also note that the 1980s oil patch real estate crisis was intimately connected with the S&L crisis that evolved soon after... Lots of investments predicated on never-ending oil wealth turned out to be paper fantasies.
Maybe it's different this time now that we're much more into oil importing, though.
I don't understand oil future contracts. If analysts are saying we will see $30/bbl oil next year, why are the futures from March on out all priced over $50?
Symbol Lookup from Yahoo! Finance
tbonds > 136. amazing.
under 2.8 tomorrow?
Question to those holding gold. Is anyone factoring in CBs selling gold to tamp down the upward move?
analysts are wrong alot ..Goldman called for $200 oil...I prefer to use the magic black 8 ball for my stock picks
"Is anyone factoring in CBs selling gold..."
they more they sell, the less control they have.
and, FWIW, the brits sold a boatload near the bottom in '02... didn't seem to hurt
"Goldman called for $200 oil"
GS also called for a $90 "superspike" back when we are $60 on the way up, which seemed like a wildly bullish call at the time... these things are relative
I don't understand oil future contracts. If analysts are saying we will see $30/bbl oil next year, why are the futures from March on out all priced over $50?
Sardonic | 12.16.08 - 12:24 am
Deflation, of course. March's $30 will buy what $50 buys today!!
This is quite interesting in this context. I mentioned that I expected Russia to join OPEC a while ago.
http://www.haloscan.com/comments/calculatedrisk/ 3212868099908643258/?dt=1224579860#678562
We are moving much closer to it it now. It might happen next year.
http://www.russiatoday.com/news/news/34730
Although Russia's reserve fund, built up when oil prices were high, should be adequate to keep the economy on track for at least three years, joining OPEC may be a way forward.
Aleksandr Razuvaev , Chief Analyst at Sobinbank, says this could happen sooner rather than later.
"I doubt that Russia will immediately become a new member of OPEC. But I think it's 100 per cent likely to happen next year, and Russia will play a leading role in this organization"Â he said.
I am still waiting for the formation of a wider "commodity OPEC". It will get quite interesting in commodity land over the next 12 to 24 mo
I would hold physical oil but the neighbor might report the oil drums in the driveway.
I mentioned that I expected Russia to join OPEC a while ago.
Russia solves the problem of the OPEC members cheating with their supply.
"I am still waiting for the formation of a wider "commodity OPEC"."
that would basically amount to "let's gang up on japan and non-eastern europe"
"Russia solves the problem..."
someone needs to make the Nigerians seem modern, organized and honest
"Russia solves the problem of the OPEC members cheating with their supply."
God bless free markets!
"I prefer to use the magic black 8 ball for my stock picks"
And the magic 8 ball says????
NYC is warmer than san diego in the middle of december. odd. that won't help nat gas prices.
Russia solves the problem of the OPEC members cheating with their supply.
Basel Too | 12.16.08 - 12:36 am | #
It just might. As I mentioned here before I was part of a project team that developed the basis for the last down move at Aramco Explorations in the early 80s. The aim was to force other OPEC members to stop cheating. We projected the Saudi budget impact down to $5 a barrel when a barrel was in the $30 range. The Saudis won the battle and lost the war, at least until the late 90s.
I believe that the Russians will play it a lot smarter as they suffered deeply from the consequences of the Saudi actions.
Although Russia's reserve fund, built up when oil prices were high, should be adequate to keep the economy on track for at least three years, joining OPEC may be a way forward.
Aleksandr Razuvaev , Chief Analyst at Sobinbank, says this could happen sooner rather than later.
RE | 12.16.08 - 12:35 am | #
Is that the fund that's down 30% in a little over 2 months? And they need something like $80/bl for a balanced bugdet. Seems a bit of a rosy prediction if you ask me.
What is happening are the wide cyclical swings in the economy due to fractional reserve banking and the explosion and contraction of credit.
Fractional reserve banking was originally adapted from gold deposit banking so as to expand the credit needed to exploit colonies around the world.
Most of the American colonies were founded by corporations drawn by charter and financed through the credit derived from fractional reserve banking.
Derivative of the day:
The "end of history" has ended.
Cant wait to see the damage in the Canadian Oil sands - where some costs to extract are at current market prices. Was a great idea to dump a few billion in there at $100 oil.. but at $40 and change? Ouch? Be prepared to see some pretty massive and nasty write downs from that area soon...
Is that the fund that's down 30% in a little over 2 months? And they need something like $80/bl for a balanced bugdet. Seems a bit of a rosy prediction if you ask me.
Pissed Off In California | 12.16.08 - 12:52 am | #
I think that is the primary reason why quite a few are calling for a much higher Ruble devaluation.
http://www.guardian.co.uk/business/feedarticle/8163106
RE, what is your take on RSX at these prices?
Conjure goes Korean?
From The Economist print edition
An online Nostradamus, and the search for his identity
BACK in September a message appeared on an online bulletin board owned by Daum, the most popular web host in a country, South Korea, with a huge internet culture. Written by someone called Minerva, it predicted the imminent collapse of Lehman Brothers, a now-defunct investment bank.
Wild speculation is normally disregarded, but when it proved to be right just five days later, a prophet was born. Word raced through the netizen community, and when Minerva went on to predict that the Korean won would fall against the dollar by around 50 won a day in the first half of the week of October 6th, his followers began to watch the currency markets in anticipation. The won did indeed fall by about that much over the next three days.
[..]
"I think that is the primary reason why quite a few are calling for a much higher Ruble devaluation. "
Roubini is calling for a 25% devaluation. And wasn't there some body posting as dc100 I believe a while ago talking about major devaluation rather than eat through much more of their SWF?
RE, what is your take on RSX at these prices?
bgates | 12.16.08 - 1:01 am | #
I don't watch Russia closely enough to give you a good answer. However, in the present climate I would consider it highly risky as I don't believe that the crude correction has fuly played out. However, if the Dollar continues its fall at this pace for another week or two than all bets are off as energy may benefit disproportionately. The Dollar is shockingly reversing even faster than it rose.
(set time scale to 8 hrs)
http://www.netdania.com/Products/FinanceChart21/FinanceChart-2-1.asp?symbol=EURUSD|netdania_fxa&name=EUR/USD
Congrats, Mr or Ms Speaker. Probably you've been speaking it all along.
"From the mouths of babes..."
10-Year\t3.750\t11/15/2018\t111-03+ / 2.48\t0-09½ / -.034\t00:49
Roubini is calling for a 25% devaluation. And wasn't there some body posting as dc100
Pissed Off In California | 12.16.08 - 1:04 am | #
I missed that post. DC1000 is an old time poster here. He usually didn't get much into currencies but he might have in this instance.
The peak oil story has not been nullified by the scramble to unload every asset for cash -- including whomping gobs of oil contracts -- during this desperate season of bank liquidation. The main implication of the peak oil story is that we won't be able to generate the kind of economic growth that defined our way of life for decades because the primary energy resources needed for it will be contracting.
Just as global oil production peaked, our economy evolved into a morbid hypertrophy, and the chief manifestation of it was the suburban sprawl-building fiesta that has now climaxed in the real estate bust. By the early 21st century, when so much American manufacturing had been swapped out to Asia, there was no business left except sprawl-building -- a manifold tragedy which wrecked the banks that financed it, and left the ordinary people mortgaged to it with ruinous liabilities.
That economy is now in its death throes. The "normality" it represents to so many Americans is gone and can't be brought back, no matter how wistfully we watch it recede. Even so, it was obviously not good for the country. The terrain of North America has been left scarred by unlovable objects and baleful futureless vistas that, from now on, will shed whatever pecuniary value they once had. It represents the physical counterpart to the financial mess that has been left to the young generations to clean up -- and the job will take a very long time.
-JHK
True.
But the Constitution is alive and well. It is under attack, but it always has been. Normal is relative.
"The Dollar is shockingly reversing even faster than it rose."
I see FRNs as the most fraudulent paper on the planet, so I'm not shocked, though I am too stupid to capitalize on the trend for the most part.
We have to, so to speak, get to place mentally where we can face the kinds of change that are now necessary and unavoidable. We're not there yet. It's not clear whether the elected new national leadership knows just how severe the required changes will really be. Surely the public would be shocked to grasp what's in store. Probably the worst thing we can do now would be to mount a campaign to stay where we are, lost in raptures of happy motoring and blue-light-special shopping.
The economy we're evolving into will be un-global, necessarily local and regional, and austere. It won't support even our current population. This being the case, the political fallout is also liable to be severe. For one thing, we'll have to put aside our sentimental fantasies about immigration. This is almost impossible to imagine, since that narrative is especially potent among the Democratic Party members who are coming in to run things. A tough immigration policy is exactly the kind of difficult change we have to face. This is no longer the 19th century. The narrative has to change.
The new narrative has to be about a managed contraction -- and by "managed" I mean a way that does not produce civil violence, starvation, and public health disasters. One of the telltale signs to look for will be whether the Obama administration bandies around the word "growth." If you hear them use it, it will indicate that they don't understand the kind of change we face.
-jhk
The state of Nevada is considering lowering the gambling age to 18 to counteract the 22% drop in gaming.
Desperate measures. Insane.
" Blackhalo writes:
I sure would like to see some form of federal incentives to drive alternative energy investment, other than the ethanol subsidies that just make the farmers happy. The more general the better I think, as it should not try to direct the innovation toward one solution but focus more on KwH or MPG.
Blackhalo | 12.15.08 - 11:36 pm | # "
The British have an alternative to gasoline called "petrol."
The US can mandate that all gasoline be 50% petrol by 2010.
That will work about as well as any other government energy policy in the last or next decade.
"A tough immigration policy is exactly the kind of difficult change we have to face."
we have the world's toughest immigration policy in the world now - jobs shrinking at an incredible rate.
in any case, native-born americans should feel grateful that this economy has been largely fueled by folks who will never see a social security dime in their lives... a more subtle element of the ways American boomers have screwed the world forever.
Desperate measures. Insane.
Agreed. If they're going to drop the gambling age, they may as well drop it to twelve!
Better to not see a dime, or see that dime and know it isn't worth anything?
I see FRNs as the most fraudulent paper on the planet, so I'm not shocked...
bgates | 12.16.08 - 1:29 am | #
I am a gold investor as well. However, investing in gold just about obligates you to watch the dollar as the relationship is so pronounced. The dollar is the primary price signal for gold though at a time of worldwide currency debasement/competitive devaluation this is bound to change at some point. I think it will happen within the next six months.
Both Firefox and IE are crashing more often on CR lately. Is it just me, or is it new ad structures on the page?
R | 12.15.08 - 11:50 pm | #
R, are you using CR Companion? Just want to make sure it's not the culprit, and if it is, to fix the problem.
doom,
Have you read Heinberg? Pretty good history tying human advancement to energy forms & availability. Explains a lot, and doesn't bode well for the future.
If they're going to drop the gambling age, they may as well drop it to twelve!
Broward Horne | Homepage | 12.16.08 - 1:37 am | #
What about the minimum age of prosititues? Hmm..
every penny below 1.75 per gallon that gas drops...
the fed should ad 1/2 cent in tax to provide investment for sustainable energy
Let's not forget that, at the end of the day, Joe Sixpack--the American consumer--is the most powerful variable in any Keynesian equation.
At the moment, household liquidity is the lowest on record, and falling. Additionally, the consumer has restricted access to lines of credit and there is no sign that is going to change any time soon.
So, Joe pulled back when the price of fuel and everything else broke his back. Now, we're seeing demand destruction and unemployment is rising.
Now, let's say that GM declares bankruptcy. According to the Center for Automotive Research, a 50% reduction in Detroit 3 activity would produce 2,462,375 job losses in 2009, or approximately 205,198 per month. Add that number to the claims already coming through the pipe and you're looking at double-digit unemployment rates. That doesn't even begin to include the losses to personal income or tax revenue.
There's another issue. Everyone is concentrating on the stabilization of asset prices--specifically, financial assets. They're focusing on that because that's Bernanke's focus. After all, OMG, we have to protect the banks. Aside from the talk here, no one is addressing the problem of falling real asset prices.
Joe Sixpack is the 1,000-pound gorilla in the room and his balls are in a vise. The high debt load is squeezing from one side and falling asset prices are squeezing from the other.
I don't see where Bernanke, or anyone else, has successfully addressed the problem of stabilizing the prices of real assets. Frankly, I don't think they can do it. Right now, all I see are a few extremely liquid banks and millions of illiquid households. Further, I don't see any sign that's going to change any time soon.
As a general rule, Joe Sixpack doesn't spook easily. So, consider this: when the CPI prints tomorrow, it's expected that it will have dropped by the most on record, and the record goes back to 1947. Also consider that spending is now down 20% from the same time last year.
Demand destruction. Think about it.
Just some thoughts.
Demand destruction. Think about it.
mp | 12.16.08 - 1:43 am | #
That's alright, I don't like too demanding people anyway. I bet Conjure feels the same.
The British have an alternative to gasoline called "petrol."
The US can mandate that all gasoline be 50% petrol by 2010.
That will work about as well as any other government energy policy in the last or next decade.
Not One Cent | Homepage | 12.16.08 - 1:34 am | #
British "petrol" (or AGS) is the same as US "gas" or "gasoline", the lowest MW petroleum distilate cut (C7-C9).
top ten was funny, lawyers guns and money
A federal lawsuit was filed this morning against U.S. Treasury Secretary Henry M. Paulson, Jr. and the Federal Reserve Board to stop all bailout funds from going to American International Group, Inc. (AIG). According to the lawsuit, the U.S. government, through its ownership of AIG, is not only violating the Constitution, but also promoting and financing the destruction of America using American tax dollars."
Read the whole article to catch the unbelievable portion. PDF to the filed complaint is linked in the article.
Thomas More Law Center - News
Frankly, I don't think they can do it.
mp | 12.16.08 - 1:43 am | #
Can't be done. Might as well try to defy the laws of physic.s
Excellent speech, btw.
"British "petrol" (or AGS) is the same as US "gas" or "gasoline", the lowest MW petroleum distilate cut (C7-C9).
Howie | 12.16.08 - 1:46 am | # "
I know, that's why the proposal would be as effective as any other likely policy.
Comrade Bear-
Heinberg lives up in my part of the world, and I have read his works, along with hearing him speak.
Interesting how gold is trading above platinum's price. Pretty much all the gold that has ever been mined is available in bank vaults somewhere.
Ah well, only 24 hours out on the Asia tank:
Bloomberg.com:
World Indexes
More to come.
Fundies are fkd.
C
All life is tied to energy forms and availabilty.
British "petrol" (or AGS) is the same as US "gas" or "gasoline", the lowest MW petroleum distilate cut (C7-C9).
Howie | 12.16.08 - 1:46 am | #
Shhhh, Howie.
Don't tell the government.
If we're real quiet, maybe we can fool them into putting gasoline back into gasoline.
Both Firefox and IE are crashing more often on CR lately. Is it just me, or is it new ad structures on the page?
R | 12.15.08 - 11:50 pm
Better solution than Firefox or IE: download google Chrome and don't install flash....for sites you need which use flash, use one of the other browsers.
WNBA-toast
Arena Football-Toast
Nascar-Struggling
NFL-Cut 10% of headquarters staff
MLS-tick tick tick
NBA/MLB- Cutting ticket prices
The circuses are showing signs of strain.
they may as well drop it to twelve!
Twelve-year-olds are too smart.
My three local circuses, Yankee, Shea, and Giants Stadium, all currently have replicated almost identical twins, only a few feet away, like those pods in the sci-fi movie.
The plan is to tear down the old soon after the final touches are added. But I think they should leave them standing, as comic monuments to "growth".
Unintended consequence #32:
Flooding the economy with cheap dollars at some point will increase prices. People are cutting back, filing for unemployment benefits, fretting over health care insurance that they know soon they won't be able to afford.
"Aside from the talk here, no one is addressing the problem of falling real asset prices."
Worst of both worlds. Production part of the economy contracting badly while financial/consumption part of economy outright collapsing. 35-50 percent GDP reduction is quite possible within next few years.
"My three local circuses, Yankee, Shea, and Giants Stadium"
The poor bonds the municipalities sold to cover their share. Be funny to see which get defaulted on first? Shea is my vote.
Drill baby drill! Oh wait that would lose use money..
Unintended consequence #33:
Seniors adjusting to incredibly low yields (and the selling of tanking muni and corporate bonds and equities at recent bottoms) spend less of the little money they do spend
GM,
Looking at the demise/reduction of a fair number of highly paid but essentially useless "entertainment" occupations, we are.
I like high school sports events, myself, tix $5.00, walk to the games,
kids appreciate the support, etc.
The home town "local" college football team has no starters from within this state.
Recruits heavily in CA.
Good time to polish up my neglected guitar and harmonica skills, just for self-improvement.
After WWII the Russians were good cartel players. They limited the amount of oil, gold, platinum, and diamonds they exported. During the cold war they borrowed money in eurodollars and dutifully paid their debts. After the thaw in the cold war they flooded the market with oil and diamonds. It will be interesting to see, not what the Russians say they are going to do; but what the actually do. In times of economic weakness OPEC has had problems with both cartel members and nonmembers cheating to get additional revenue by exporting more oil.
I'm not too worried about Exxon Mobile. When they cannot make a profit from oil send me an e-mail. Suppose we will be short of coal then also. No matter what the source of energy the price can and will be run up due to the amazing public. Hell, they could run up the price of rats while we the people worry as to whether they'll be able to trap enough. Just imagine what animal rights crackpots could do to rat prices.
Don't really have a clue what it means/ Off Jessecafeamericain. Mat Simmons referenced it on financial sense on saturdays podcast
News Kontent: Another Swiss giant on the edge ~ Glencore
The FT has an interesting article about supertankers being used to store the oversupply of crude oil:
FT.com / Energy - Supertankers store 50m barrels of oil
From that article,"(w)hatever the size of Opecs cut, the floating storage surge is a clear sign the cartel is losing its battle to cut supplies more quickly than demand falls."
I wonder what the price of that last old growth tree was on Easter Island.
No doubt there was a tree hugger nearby who couldn't afford it, tearing his hair out.
CR, Can we call the sub-prime mortgage crisis a result of one big ponzi scheme by sub-prime lenders and investment banks?
oil is green. tbond opens @ 2.90% in 5 hrs? meshuggah.
Yogi If you look at yap stones I wonder if Easter island statues were actually a form of money. If so in the end they were trying to create larger and larger statues (trying to inflate their money) but society was collapsing. Becoming more efficient in the means of production along with proper stewardship of the earth would seem to be the only way to continual prosperity. It may not be possible.
Damn.
Don't you guys ever sleep?
Don't you guys ever sleep?
It is hard to tear the eyes away from the orthanc stone. Sauronson only lets us see enough for despair.
Fair.
Fair is a changing word.
But Fair is an honored promise.
Justice,
If you're still there
Rogaine will restore...
My Hair.
I've officially spent two months goofing off. I suppose I should something constructive today. Like find a coffee shop of coeds in Boise.
Tg my favorite part of the story is the archaeologists who tried to figure out how they erected the stones without cranes or even pulleys. Various theories were put forth for decades, including alien visits...
Finally, one had a brilliant idea. Why not ask the remaining locals. They were a bit indignant, wondering why no one bothered to ask them before, but proceeded to demonstrate how simple it was, using sand to move them a few inches at a time.
Moved from other thread.
Low Treasury yields do not imply domestic deflation.
In Bernanke's speeches that CR linked to in a previous post, he (Bernanke) says that the Fed should try to lower long-term rates on Treasuries if/when it runs out of fire-power in short-term rates. Since the latter has happened, and since the Fed has been ballooning its balance sheet in all sorts of creative new ways, it's reasonable to suppose that the lowering of rates on longer-dated Treasuries is at least partly the Fed's doing. In other words, the Fed is probably buying Treasuries on the open market with newly created money. This is part of "quantitative easing" and is quite the opposite of deflationary.
The dollar's strength is a different matter. As the dollar becomes stronger relative to other currencies, that lowers the cost of imports, which is deflationary (in the US). The dollar's rise likewise raises the cost of US exports in other countries, which might slow the US economy further, which is also deflationary. But there has often been inflation during times of the dollar's strengthening. My guess is that a stronger dollar (relative to other currencies) will not overcome the other factors currently in play vis-a-vis deflation/inflation. (These other factors are monetary policy, fiscal policy, demand destruction, and capital destruction).
In theory, sufficiently determined fiscal and monetary authorities can offset any deflation. Bernanke has advertised his anti-deflation colors for years. Obama seems on board with huge stimulus. Congress will probably go along. Consequently, I'm betting that U.S. domestic deflation will be relatively contained. It depends, though. Ben, Tim, & Barack may need to drop more dollars from helicopters than will be politically or financially feasible. If so, then, well, ouch.
Note also that the Fed has been struggling a bit so far, as it has been trying to do quantitative easing mostly by its lonesome. It's been pumping liquidity into financial institutions, and that liquidity is just sitting there. Debt is out, saving is in, and that's a good thing because we have massive solvency problems, not just a liquidity problem. But that means that even quantitative easing might have a limited effect, because it usually is designed to work its magic through increased lending. However, if money creation is coupled with fiscal policy that directs the new money to people who will spend it (e.g., state governments or unemployed workers), then we will get the economic equivalent of an Emeril "BAM".
Would an edited version of CR comments be useful? How about a remix? A cross-referenced index? The daytime comments are impossible to follow in their current form. I can put time into it but my software skills suck. Some of the work can be done by a bot but a good index must be logic-driven.
"quantitative easing might have a limited effect"
Oh yeah, pissing our pants collectively during wintertime and singing joyful songs to keep us all warm?
"However, if money creation is coupled with fiscal policy that directs the new money to people who will spend it (e.g., state governments or unemployed workers), then we will get the economic equivalent of an Emeril "BAM"."
--Droll
I watched an excerpt from an Obama interview today. He claims to have a Christmas list of "shovel-ready" projects to spend money on. Probably a lot of these are State projects, so Congress will be on board. If the feds don't require matching funds from the bankrupt states, I think you'll see your directed fiscal policy.
The question is: how much is enough?
The good news is that construction labor is pretty good at moving to where the work is. The bad news (as I have seen expressed here) is that construction labor is not completely fungible, and of course a significant part of the Mexican labor has already departed the country.
I'm guessing that it will take a lot of construction activity to provide the needed fiscal stimulus, since this "WPA" work will not be accompanied by the speculation and leveraged financing that accompanied the housing construction boom. But it should at least prop up immediate consumer spending fairly quickly. probably less on durables than on consumables...
Yogi, it must have taken many labor hours why and however they did it. Somehow that has to be supported by the rest of their economy. Did it bring about their decline? Was it simply stimulus spending to keep the unemployment low?
"The good news is that construction labor is pretty good at moving to where the work is. The bad news (as I have seen expressed here) is that construction labor is not completely fungible,..."
Spoken by a landlord.
the fed should ad 1/2 cent in tax to provide investment for sustainable energy
Yes, that will work wonders. Siphon off 50% for administrative fees, then let the bureaucrats that invested in IBs and AIG as a way to sustain our present economy choose our future investments. Brilliant.
If alt energy is such a great idea - go for it with your own money. Start a hedge fund and invite your friends and family.
Much of this alt energy is like teenage rebellion - anything but the status quo is cool - so long as mommy pays for it.
What's a republic?
Don't you guys ever sleep?
Broward Horne | Homepage | 12.16.08 - 4:14 am | #
I'm kept up at night wondering how we're ever going to deal with the massive cash inflow to the government when we start making money from the TARP, and if I should offer to match the profit dollar for dollar. Of course, I'd have to cap it at ten dollars, but I'm wondering if that's ridiculously high and might cause animosity for trying to show up the government. It's amazing I get any sleep.
My guess is that like Pyramids, palaces and Cathedrals, they were part art, part status symbol.
The account I read (Jared Diamond) focused on lack of environmental policy, but that may just have been a symptom of overpopulation.
o/t ... Ecuador is walking away $4 billion of 'illigitimate' debt racked up by the previous junta.
So misallocation of resources to the statues was not a root cause.
Finally, one had a brilliant idea. Why not ask the remaining locals. They were a bit indignant, wondering why no one bothered to ask them before, but proceeded to demonstrate how simple it was, using sand to move them a few inches at a time.
1 currency soon [yogi] | 12.16.08 - 4:32 am | #
Read AKU-AKU by Thor Heyerdahl, the man who sailed the Kon-tiki raft from Peru to the Marquesas. He actually paid the Easter Islanders to show him how their ancestors carved them, moved them, and erected them. It's amazing what they can do with sheer muscle power and stone age tools.
The archeologists say they've disproven his theories on the people and culture of the island, but I don't know if I trust them and he spins a nice story
British "petrol" (or AGS) is the same as US "gas" or "gasoline", the lowest MW petroleum distilate cut (C7-C9).
Years ago I owned a Triumph motorcycle. The owners manual called for washing the oil filter with, "paraffin," at every oil change. In my neck of the woods, paraffin was a hard white solid that one sealed jelly jars with. In those days before the internet it took a long time to figure out that British paraffin is what Americans call kerosene.
"Much of this alt energy is like teenage rebellion - anything but the status quo is cool - so long as mommy pays for it."
How about we clawback the oil subsidies and tax carbon emissions? Everyone should pay their fair share, right?
So misallocation of resources to the statues was not a root cause.
1 currency soon [yogi] | 12.16.08 - 5:17 am | #
IIRC Easter island is the most remote point on earth, so regardless, the population would outstripped the resources. And since there was no intermediate travel destination for 1500 miles, the idea of keeping ocean going vessels around probably didn't look sensible until it was clearly too late, if it made sense at all.
IIRC=?
OK: If I remember ...
If I recall correctly
Goodnight.
"Spoken by a landlord."
--1 currency soon [yogi]
So do you disagree, or are you making some other point?
Doesn't sound like good news for the laborer. How about moving the work to where the labor is?
Flint, MI could probably use some construction projects.
1 currency soon [yogi] writes:
"Doesn't sound like good news for the laborer. How about moving the work to where the labor is?"
You don't always have that choice when you are investing in public works. Let's say we decide to build a big solar power station. Would you build that in Flint, or someplace in Arizona?
Construction workers moved to Las Vegas to build enormous casinos and unneeded housing. I'm sure that they would welcome the opportunity to move elsewhere to build something more useful. LV is not exactly an ideal place to settle down.
If you can propose a useful public works project in Flint, I'm sure that it could get funded. But you would have to justify building a public work in an area that is in the process of depopulation due to unfavorable weather and politics. If we're going to spend money on public works, we should do so in a way that is constructive for the future. To me, that means building in places that have an economic future, where people actually want to live. Remember that Michigan was able to thrive only because of the depressed economic conditions in the South when all of the industry was located in the North. It doesn't do as much good to build out the places where people used to be as it does to build out the places where people are going.
mp @ 1:43am EST
Absolutely, J6P is the metaphorical end point consumer, a point that I've been making for much of this year and realizing that John, Yves, Fritz and Ivan 6P are as much a part of this equation. The fundamental issue is the over-extended and leveraged consumer, who is now deleveraging. It has gone psychological and no amount of liquidity stimulus to financial intermediation systems will fix that. OECD markets are displaying massive amounts of fear and desperate short-term gain measures, both in credit and equity. Pick your indicator - VIX, TED, A2P2, bonds, whatever.
But the Asia markets and shipping are showing something else entirely in the real sectors: apocalyptic loss of confidence in future demand, everywhere. What people generally fail to recognize is that the last bust was only 10 years ago - same market participants, same burned punters, same wounded policy communities. The panic retrenchment has already started and there are precious few signals of an upside.
And for the hundredth time, hosing liquidity at a solvency problem will not work.
I know this board generally gets this. It's my daily interactions which wind me up on broadbanded cluelessness.
C
The Register is a great site, thanks Broward. Will try to digest some of it when I'm more awake. Good night.
"And for the hundredth time, hosing liquidity at a solvency problem will not work."
--Counterpointer
Yup. But they want to believe.
Hosing liquidity will, however, create inflation, IMHO.
Finally protection to financial holocaust survivors:
Judge signs order to protect Madoff investors
NEW YORK A federal judge on Monday threw a lifesaver to investors who may have been duped in one of Wall Street's biggest alleged frauds, saying they need the protection of a special government reserve fund set up to help investors at failed brokerage firms.
U.S. District Judge Louis L. Stanton ordered that clients of Bernard Madoff's private investment business seek relief under a federal statute created to rescue cheated investors. Stanton also ordered that business be liquidated under the jurisdiction of a bankruptcy court and named attorney Irvin H. Picard as trustee to oversee that process."
Yahoo! 404 - Page Not Found
Valid points, sm, but keep in mind moving population around even in the name of efficiency has costs too. (Termed "dislocation" by many economists) I don't want to live in Flint, but I don't want to see them starve. Balance.
good night.
Yen 89.99
Real-Time Forex Quotes
That Yahoo article is misleading. It doesn't cite text in the order or give the procedural context, or even say who the parties are. A Judge can't "order clients to seek protection from SIPC."
1 currency soon [yogi] |,
Don't you think the order transfers control over the accounts to the SPIC, so Madoff employees can't touch them? I think the SPIC also has the power to transfer accounts to solvent brokers. As the guy of cnbc said last night, no one knows at present which account records are complete and accurate and which ones aren't. So any transfers and or release of funds will probably be slow.
One other point. The talking heads seem to agree that anyone with an account with Madoff is responsible for submitting a claim and providing evidence that the claim is valid.
We will know soon how bad it is going to be. Retail sales for December are going to be fugly. Which will be bad for commercial real estate by Spring. Which will be reinforced by the coming carmeggedon.
Which will lead to a generally yucky day for most people.
Another omen of doom? When the Stones tour they won't sell out the stadium. They have sold out every other way possible however.
Bernie's buddy's will get bailed
Meanwhile, a federal judge on Monday threw a lifesaver to investors who may have been duped, saying they need the protection of a special government reserve fund set up to help investors at failed brokerage firms
I'm not sure that "bailed" is the right word. The SPIC insurance covers only $500,000 per account and many investors had much more than that in their accounts which presumably is uninsured.
ova you know that might be a good way to way track this mess. seems like a lot of groups on the road.
Demand destruction. Think about it
you have to get crispy up to speed on this subject.
PO+LS=DD
Credit enima is coming..... writes:
I would hold physical oil but the neighbor might report the oil drums in the driveway.
Credit enima is coming..... | 12.16.08 - 12:36 am | #
Is funny and conflates the two markets I'm having a lot of difficulty figuring out.
ShortCourage writes:
CR plans the crashes, as folks here seem happiest when things are crashing.
ShortCourage | 12.16.08 - 12:00 am | #
Is also funny and is absolutely at least 50% true.
ICSC-Goldman Store sales in 10 minutes.
OT -- The CR comments devoted much space recently to the shoe thrower, Muntadar al-Zaidi.
Here is an update.
Muntadar al-Zaidi has suffered a broken hand, broken ribs and internal bleeding, as well as an eye injury, his older brother, Dargham, told the BBC.
The United States is committed to the worldwide elimination of torture and we are leading this fight by example.
GWB, June 2003
We will know soon how bad it is going to be. Retail sales for December are going to be fugly. Which will be bad for commercial real estate by Spring. Which will be reinforced by the coming carmeggedon.
Which will lead to a generally yucky day for most people.
nova | Homepage | 12.16.08 - 6:51 am | #
TAKE THE MARKET ON THAT!!!!!!!! (oh... yeah.. they're doing that right now...)
"TAKE THE MARKET ON THAT!!!!!!!! (oh... yeah.. they're doing that right now...)"
Seriously, though, was there some correlation to actual news for that futures blast off half an hour ago? Did Timmah Timmah hit the buy button instead of the snooze button when his alarm went off this morning?
"A federal judge on Monday threw a lifesaver to investors who may have been duped in one of Wall Street's biggest alleged frauds, saying they need the protection of a special government reserve fund set up to help investors at failed brokerage firms."
That was quick, not to a good thing to anger Israeli/American Jewish Overlords. Screw the rest of Americans.
Heck uv a job Batista:
MEXICO CITY (AP) - A U.S. anti-kidnapping expert was abducted by gunmen in northern Mexico last week, a sign of just how bold this nation's kidnapping gangs have become.
U.S. security consultant Felix Batista - who claims to have helped resolve nearly 100 kidnap and ransom cases - was in Saltillo in Coahuila state to offer advice on how to confront abductions for ransom when he himself was seized, local authorities said.
"A federal judge on Monday threw a lifesaver to investors who may have been duped in one of Wall Street's biggest alleged frauds, saying they need the protection of a special government reserve fund set up to help investors at failed brokerage firms."
That was quick, not to a good thing to anger Israeli/American Jewish Overlords. Screw the rest of Americans.
\t one_timmy | \t \t \t \t12.16.08 - 8:00 am | #
Isn't he just talking about the SIPC?
Re local economies: I like this article, but realize this guy is basically describing Africa. He could have said "America, meet the African economy" except he left out the parts about open graft and corruption and Mugabe.
charles hugh smith-End of Work, End of Affluence III: The Rise of Informal Businesses
SIPC = small investor protection corp
not
SIPC= Stupid investor protection corp
Isn't he just talking about the SIPC?
ille_vir | 12.16.08 - 8:10 am | #
Like the judge cares what SIPC is. He got his name in the paper. Mission Accomplished.
TAKE THE MARKET ON GOLDMAN...... THEY ROCK!!!!!!!!!!!!!!!!!!!!!!!!!!
Heh. Just saying some people seem to find nefarious Jewish conspiracies everywhere they look.
Interesting advice to CITI on how to cut costs:
http://www.hindu.com/thehindu/holnus/006200812161813.htm
deflation number coming.... tick tick tick tick tick
CPI -1.7
Housing -18.9.
INDU to be +1000 on that.
This is OT...
With the Fed buying mortgage backed securities outright, won't that make the banks or investors that originally bought them whole?
Even if the underlying mortgages default, the servicer forecloses, but the losses are eaten by the Fed.
Do losses on MBS purchased by the Fed really affect them?
Really?, greater cashflow spurs more investment....hopefully not alot of money was spent on that study. What's next, a study to determine if its harder to breathe in a smoke filled room.
Tsar or czar[1] (Russian: царь (help·info), Bulgarian, Serbian, Ukrainian: цар, in scientific transliteration respectively car' and car), occasionally spelled csar or tzar in English, is a Slavonic term designating certain monarchs.
Originally, the title Czar (derived from Caesar) meant Emperor in the European medieval sense of the term, that is, a ruler who has the same rank as a Roman or Byzantine emperor (or, according to Byzantine ideology, the most elevated position adjacent to the one held by the Byzantine monarch) due to recognition by another emperor or a supreme ecclesiastical official (the Pope or the Ecumenical Patriarch).
U.S. May Give Car Czar Power to Force Bankruptcies
U.S. May Give Car Czar Power to Force Bankruptcies (Update3) - Bloomberg.com
"TAKE THE MARKET ON GOLDMAN...... THEY ROCK!!!!!!!!!!!!!!!!!!!!!!!!!!"
Abso-frickin'-lutely. They beat the street! Consensus was for a loss of $3.70/share. Those smart guys blew it out of the water with a loss of $4.97/share. Go GS, Go!
With the Best Buy news and the Fed meeting this could be a big up day.
PSgirl writes:
Yen 89.99
U$D/JPY caving to new lows 89.74 and has been leading stock indices downward, maybe somewhat immune to what's left of the thundering herd mentality holding up equities. Leveraged way to be bearish.
OT, but helpful since professional and militant disinformationalists are particularly active when the legitimacy of authority is questioned, and systemic crisis loom.
Seventeen Techniques for Truth Suppression
by David Martin
1.\tDummy up.
2.\tWax indignant.
3.\tCharacterize the charges as "rumors" or, better yet, "wild rumors."
4.\tKnock down straw men.
5.\tCall the skeptics names like "conspiracy theorist," "nut," "ranter," "kook," "crackpot," and of course, "rumor monger."
6.\tImpugn motives.
7.\tInvoke authority.
8.\tDismiss the charges as "old news."
9.\tCome half-clean. This is also known as "confession and avoidance" or "taking the limited hangout route."
10.\tCharacterize the crimes as impossibly complex and the truth as ultimately unknowable.
11.\tReason backward, using the deductive method with a vengeance.
12.\tRequire the skeptics to solve the crime completely.
13.\tChange the subject. This technique includes creating and/or publicizing distractions.
14.\tScantly report incriminating facts, and then make nothing of them.
15.\tBaldly and brazenly lie.
16.\tExpanding further on numbers 4 and 5, have your own stooges "expose" scandals and champion popular causes.
17.\tFlood the Internet with agents. This is the answer to the question, "What could possibly motivate a person to spend hour upon hour on Internet news groups defending the government and/or the press and harassing genuine critics?" Don't the authorities have defenders enough in all the newspapers, magazines, radio, and television? One would think refusing to print critical letters and screening out serious callers or dumping them from radio talk shows would be control enough, but, obviously, it is not.
Seventeen Techniques for Truth Suppression
This might be bad?
Dec. 16 (Bloomberg) -- Goldman Sachs Group Inc. reported a fourth-quarter loss of $2.12 billion, the first since the company went public in 1999, as asset values and investment-banking fees declined.
ew thread
ova, bad? That should spark a huge rally!
Hank should be investigated for insider trading. Nice punt at the top, hank.
ova - wow, the Stones Index, I'll add that to the bringup on VIX, A2P2, TED, Dryships, Hang Seng financials...!
Thank you. Fairfax has a justified reputation for concentration of genius.
C
Counterpointer | 12.16.08 - 9:11 am
Just a little "out of the box" thing.
A bit late, I know, but
ExxonMobil Refining & Supply today announced it will invest more than $1
billion in three refineries
Exploration projects are continuing at a brisk pace from what friends tell me. Development will obviously slow down. No need to get it out of the ground quicker.
Exploration is strategic. Development is tactical. A drop in development work will reduce the day rates, making exploration more affordable. Of course, many in management have been drinking the Wall Street koolaid, so they may do something stupid.
Data acquisition and processing companies should see relatively little slowdown. Drilling and engineering firms will see a lot.
FWIW Firefox on Solaris 10 x86 doesn't seem to have any problems w/ the CR site.
I've been thinking something like this ever since I read OXY's last con call a few weeks back.
Occidental Petroleum Corporation Q3 2008 Earnings Call Transcript -- Seeking Alpha
I didn't go back to re-read it, but down around p.8 or 9, the CEO implies that the smaller E&P companies levered up with debt at the top and they're having a really hard time getting bond issues through.
It's conceivable we could see flat/falling energy prices for a long time. This is a deflation.
It implies to me that we're in for a short, sharp spike when Mexico and North Sea production fall off the edge of the world in a few years.
What happened to all the oil money from the record profits of just a few short months ago? Now we are to beleive that exploration can't go on without astronomical oil prices? Maybe all those dollars shouldn't have been distributed as share holder dividends and held in reserve for just such an occurance. But no, that money is gone and when the economy picks up we can again start paying the high dollar. There seems to be no incentive to reinvest profits for the oil companies futures, it all goes to line pockets, then when the market changes and demand is up we (the consumer) have to ante up for what should be business investment.