Markets will do whatever it takes to screw the most people.
State Of Play: On behalf of would-be shale oil drillers, the Pennsylvania Office of Homeland Security is tracking anti-gas drilling groups and their meetings, including citizens foolish enough to attend a public showing of a documentary about the environmental hazards of natural gas drilling.
His Master's Voice: Treasury Secretary Timothy Geithner has met more often with Goldman Sachs CEO Lloyd Blankfein than with Congressional leaders. Any questions?
Suspected US drones kill 13 Unless someone else has taken to sending drones to drop missiles in Pakistan, the US killed 13 more “suspected terrorists”, after killing 5 on Sunday and a total of 29 last week. Sudden death, without warning, out of the sky in a country not at war with the attackers... sounds vaguely familiar.
Facelift: The folks getting rich making obesity ubiquitous want to re-brand HFCS (high-fructose corn syrup) "Corn Sugar". It'll still make you fat, but they'll feel better about it.
Supply/Demand: One of the problems in applying standard economics to petroleum is that their school solution says that rising prices caused by demand outstripping supply will (a) decrease demand and (b) increase supply. Tell that to the guy who needs a tank of gas to get to work. Tell that to BP and friends, who have discovered only 10 billion barrels a year while we have been using 30 billion barrels. “This is crucial to understanding oil markets in the years to come,” according to the IEA.
Money Quote: "We are managing to a view that home prices are more likely to be headed down rather than up." - Capital One CEO Richard Fairbank
What Goes Around: The top 1% get 24% of all the income in the US. If the Republicans have their way, the richest 120,000 people in the country would receive an average tax break of $3 million each over the next decade. What's wrong with a little class warfare? What's wrong with a lot of class warfare?
One more time: Scientific studies have repeatedly found no causative nor correlative link between autism and vaccinations. Perhaps parents wanting someone to blame should look to the wider environment and the multitude of man-made chemicals we have spewn about.
Things in a Certain Order: After being criticized for putting American citizens on CIA hit lists, the Obama administration is considering having a quick trial in absentia before letting the CIA kill citizens. Or a quick trial after they're caught and before they're executed, depending.
War Profiteering: Prudential Financial has been profiting from the deaths of American soldiers for at least 10 years – with the knowledge and consent of the VA. Ain't capitalism greed great?
Money Talks: The US Camber of Commerce, with a political war chest rivaling that of the Republican Party (as though there were a difference) is facing complaints that it laundered millions of dollars meant for charitable work into attempts to thwart Obama's policy proposals – which the Chamber views as a public service.
Sound Bites: While you wait breathlessly to find out what the market did today, remember that “the market” is really just 112 stocks being traded back and forth between robots.
Tiny Tiny Print: Real estate developers are now including a little item in the sales contract that says that for the next 99 years, every time the house you just bought is sold, they get 1% of the sales price. Royalties.
Behave! Don't make me count to 3,285 or whatever number of days it is until banks have to comply with the Basel III regulations and show that at least 8.5% of their “capital” is actually capital. What did you expect when a bunch of bankers make rules for a bunch of banks.
Porn O'Graph: How to stop smoking...
7 comments:
"One of the problems in applying standard economics to petroleum is that their school solution says that rising prices caused by demand outstripping supply will (a) decrease demand and (b) increase supply."
No. There is nothing wrong with so-called "standard economics." It's just that you don't understand it very well. You seem to be talking about a situation in which the demand curve shifts out to the right (or up). In this new situation the price of gas must be higher, because the supply curve has an upward slope.
Now, why would economists draw the supply curve with an upward slope? Because they recognize that the cost of producing oil (or most any good for that matter) is not equal across all suppliers.
At a low price, oil is produced and sold only by the lowest cost suppliers. At a high price, oil is also produced and sold by higher cost suppliers.
Let me add that your concern is that the supply curve kinks to become perfectly vertical at some point.
In other words, there is a point at which it's simply not possible to produce more oil/gas, even as the price goes to infinity.
Long before the price of oil/gas reaches infinity we will be shifting to alternatives. That's what market pricing is about.
The relevant question is how smooth will the transition be to alternatives.
Let me also add that the economist quoted in your article (Fatih Birol) probably would not like the way his comments were written up by the press.
There are some confused, muddled statements in there.
Birol's basic point appears to be that the economic slowdown has shifted the demand curve to the left (or down), which is keeping prices fairly low.
In this situation there is little incentive for the alternative energy investments to be made.
Had there been no housing bubble, etc., oil/gas prices might be soaring, and we'd be seeing lots of alternative energy investments right now.
In the end, I would guess that Birol is worried about whether a smooth transition to energy alternatives will be possible.
Dear Anony (1,2,3): First – Boy I hate it when my straw man gets burned down so quickly. Second – there is lots wrong with “standard economics”, just not this (maybe...) Third: If I might speak for myself, my real point in this item was to draw attention to the in-elasticity of demand and the in-elasticity of supply in petroleum in order to discomfort the cornucopians who claim that unfilled demand will 'create' supply. In petroleum, it will not, no matter how high the price (incentive).
In passing, of course, the commentary depends on the understanding that in our modern economies petroleum for transportation is essentially irreplaceable and will be chased to unimaginable heights by insatiable demand.
There are real world limits to petroleum reserves, found and unfound. There are real world limits to the amount of energy that can be put into making “oil” out of close seconds. There are no reasonably viable and alternatives – at any price within any reasonable timeline – to replace gasoline.
I agree that Dr. Birol's target was far different from mine in this particular item. If his concern is how abrupt and disruptive the transition from petroleum to whatever comes next will be, he's not alone.
SAR's format does not lead itself to nuance, that doesn't mean nuance is lost on me. But this doesn't bar me from setting up straw men in future editions.
CKM:
I think some of your readers need a lesson in Energy Returned on Energy Invested (ERoEI).
One more time:
Your comment here and those in the past on vaccinations advocated by the State and Big Pharma and associated industrial organizations like the WHO are very questionable:
Family to Receive $1.5M+ in First-Ever Vaccine-Autism Court Award
http://www.cbsnews.com/8301-31727_162-20015982-10391695.html
The vaccine issue is much more complex than you have posted in the past. Big Pharma (yes it exists just like Big Finance) is moving into the vaccine biz big time. For starters, the H1N1 vaccine of last year was a Fraud perpetrated by Big Pharma to get the WHO and other international agencies to peddle its suspect products. Just like shitty (WALL STREET's adjective) securities, vaccines can be shitty too.
It's hard to keep track of all the Rackets in progress but certainly anything involving Big Pharma is suspect. PFIZER, a Big Pharma charter member is a Racketeer under US law:
http://www.federalcriminaldefenseblog.com/2010/03/articles/racketeeringorganized-crime/pfizer-hit-with-140-million-rico-verdict-over-alleged-promotion-of-offlabel-uses-for-epilepsy-drug-neurontin/
So, please, show more respect for those who do not want their bodies invaded by State Mandate and Racketeers.
Anony 6:39 - The item said there was no causative connection between childhood vaccination and autism. Nothing in the item addressed the question of individual choice in immunization. As long as those who fear science enough to reject vaccinations and try to slip by because most of us are vaccinated can go right ahead and peacefully (or not) succumb to preventable diseases. They should not, however, get to spread preventable diseases because of fears of the some world-wide conspiracy.
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