Thursday, December 29, 2011

SAR #11363

Who gets fleeced next?

Resolution: On behalf of climate scientists and the reporters that follow their work, be it resolved that the word "unexpected" will no longer be used to describe Mother Nature's tendency to do things her way. For example, "The glaciers in Peru's Cordillera Blanca mountains are unexpectedly melting faster than conservative IPCC models predict." will henceforth be reported for what they are - mounting indications that we are headed for an environmental disaster will within the lifetimes of at least half the people now alive. It ain't unexpected if respected scientists have been predicting it for decades.

True Faith: This happens to be about oil and gas, but it is the classic American solution to all of problems, big and small. “A lot of the technical problems that exist today will be solved in the not-too-distant future.” - per corporate evangelist Jim Letourneau. Just click your heels.

Penny For Your Thoughts: The euro dropped nearly $0.01 against the dollar in an hour of trading today - with no appreciable cause other than the revival of the very reasonable fear that the eurozone debt crisis is still with us. The euro also hit a 10-year low against the yen. Gold was down 2.25% on the day.

Shopping Tip: Electrical shortages in Uganda are seriously cutting the annual grasshopper harvest. Stock up now. Rare earths are going to be limited, too, as China cuts export quotas.

Word/Wise: DHS says it will (continue to?) monitor the public postings of Twitter and Facebook users, and it will create fictitious user accounts and scan posts of users for key terms in an effort to entrap gather data on users. Your file will be kept for five years and passed around to various government agencies.

Caution Steep Grade Ahead: If our various debt death-traps cannot be cured by issuing more debt, a "sharp and sustained drop" in market averages may well result in 50 - 60% declines by next Christmas. Use lower gears.

Laundry Cycle: Krugman sees "debt-eroding inflation as something helpful in dealing with debt overhang." Maybe so, but it is simply a slow and sneaky way for the government to renege on its debt. Why is impoverishing savers at the expense of spenders a Good Idea? Krugman also claims "we’re awash in savings with no place to go." It that's true, I'm willing to take in the wash.

Precautions: A six-year study showed that those who took multi-vitamins had nothing to show for it but less money.

Swan Song: It would be interesting to see the term "monetary easing" retired and good old fashioned "printing scads of money" resurrected for use in sentences such as " The only thing that will save the Shanghai Composite index from a precipitous fall (if down 30% in a year isn't precipitous) would be for the government to massively inflate the money supply. Like Bernanke does and the ECB is trying to do.

If, Then, Why: Petroleum - WTIC - is back at the $100/barrel mark, but I paid $2.96 at the pump for gasoline today. How's that possible? Petroleum has risen steadily of late, while gasoline prices keep falling. This is counterintuitive at best.

Simple Truths: The deficit is being rattled, like a chain in a dark cellar. Let's turn on some lights: If we digressively reduce the federal budget deficit we will drive up unemployment. The deficit was and is large because the economy collapsed, not because of 'out of control spending'. Social Security will not break the budget. Social Security is fully paid for through 2038, as is. Outrageous profits in the health system will break the budget. Let's shine a little light over in that corner for a while.

Porn O'Graph: Where the Wild Dark Things Hide.


TulsaTime said...

If, Then, Else, Fail - In spite of the great recovery, gasoline demand keeps falling. And the US is now a net exporter of gasoline.

I guess the gubbmint will have to come up with a coverup. We can't have some obvious divergence giving the lie to the Great Recovery. Just one more sign of society in the circle around the drain.

fajensen said...

Laundry Cycle: Savers, What savers? Those savings have been repo'ed away and are now lost ... About 60 times over, judging from there being a tad over USD 600 Trillion outstanding derivatives in the OTC market right now.

OkieLawyer said...

Laundry Cycle:

Think of it this way: there are two basic ways to alleviate too much debt in the system. One is for employers to raise wages so that employees (disproportionately the ones in debt) can pay their debts down. But that is not going to happen, is it?

The other is to add a lot of money to the system to make the dollars used to pay back the debt cheaper.

The reality is that many of those "savers" (remember the Pareto principle) have been taking from the "debtors" for decades -- to the point where, at the latest count, the top 20% wealthiest Americans had 93% of all the financial assets sitting on their asset ledgers. Needless to say, this imbalance is not sustainable. The Federal Reserve only has two speeds: stop and go. The current plan (if inflation really is in the cards -- which, I might add, I have not really seen yet. The price movements in commodities appears to be more due to supply and demand issues than monetary policies, as far as I can tell.

OkieLawyer said...

Re: If Then, Why?

Which brings me to your next question regarding oil prices and gasoline. I remember back in late 2008 and early 2009 that there were several ships sitting off of the Gulf Coast and several other ports around the U.S. full of oil, and it was cheaper to let the ships sit there than sell it at $30 per barrel. Cushing, Oklahoma's tanks were full, the last time I checked, and I suspect there might have been more oil in the pipeline waiting to be refined than demand could handle.

I suspect that might have something to do with it, although I cannot be sure. However, demand for oil is still high, worldwide. And every time there is talk of recovery, oil prices start to spike -- which then threatens the recovery.

Funny how that works.

kwark said...

"If, Then, Why" It's all relative I guess. . . in my corner of coastal California I very nearly can watch the pump jacks as I pay $3.40/gallon for "cheap" gas. I'll "enjoy" it while I can. Given the volatility and the slop in the "Weekly U.S. Retail Gasoline Prices" chart in the linked piece I'd say the divergence is short-lived. And before we get too excited, I'll note that: 1) current gasoline demand is about 8.8 mbd which is about the same as this time last year(, 2) this time last year WTI was about $90, and 3) we ARE paying more per gallon than we did this time last year. And, to put on my tinfoil hat, I suspect the market is manipulated to some degree anyway.

OkieLawyer said...

Re: If Then, Why?

Here is a blurb from Calculated Risk:

Gasonline Prices and Brent Crude

Anonymous said...

Am I the only one that saw the irony/dichotomy/zen in the article titled "True Faith" following the one called "Resolution".