Gregor Macdonald

Case-Shiller Still Predicts Massive 45% Fall from Today’s Values

The American house no longer offers the owner an upwardly volatile call option, on robust future wage growth. Peak oil and global wage arbitrage are a big part of the problem.

Consider this, even without the bubble--the biggest housing bubble in history--there would still be an adjustment owing to our hollowed out manufacturing economy, and poor education trends.

The US house is no longer something special. But, it remains priced like it's special. If you own anything above 350K you should be prepared that, despite your good schools and nice neighbors, there simply will not be enough economic activity in your local metro area to support the required quantity of buyers, to purchase alot of higher priced homes.

Not sure why people don't get this but a general rule is as follows: people rarely understand large systems. Their field of vision is more limited to a local view.

G

Energy Watch: Solve for California

Thanks for all the comments.

There's an enormous amount of research that I have done, that sits behind this brief blog post. The annual cost to the state budget and to the state's productivity and air quality caused by the automobile-oriented transport system is gargantuan.

I very much enjoyed user 353732's social stratification comments.
seekingalpha.com/artic...

Indeed, I think it's fair to say that the wealthy elite of CA control alot of the real estate through which rail would run, and, they love to promote green and climate slogans but neither want to have their own cars dislocated, nor think very much about doing the same for the State. In short, they like policies that green-up the power grid as it will affect their lifestyle "less". Or so they perceive. I suspect this is why the Sierra Club is much happier to address emissions of buildings, than California's 33 million vehicles (all vehicles). The Sierra Club does not want to irritate the elite.

I remain amused the whole EV solution idea. CA is already importing more of its electricity than any other state (as a % of the whole) and it has to use a huge amount of that simply for Water Conveyance and Treatment.

But look what happens when you try to build a Utility Grade Solar plant in a CA desert. Uhhm, that's not a "Republican" senator that stands in opposition to that.

Thanks for all the great comments!

G

Asset Reflation Does Not Signal Recovery for U.S.'s Collapsed Economy

Thanks so much for all the comments. I have read each one carefully now, and especially appreciate those of you who have augmented, tweaked, and countered some of my views.

I've taken a few shots this year on my blog, describing how the US got itself to such an awful place. People might want to read my March 24 post The Seigniorage Curse
gregor.us/oil/the-seig.../

Best,

Gregor

Oil Supply: As Russian Production Tops Out, World Supply Will Continue to Slip

<i>MacDonald seems to be feeding some kind of agenda-driven purpose rather than any connection with reality</i>.

Thanks Freddy. I was wondering if you could do the audience a favor: since you regard natural gas liquids as oil, you simply go on record as stating "I Freddy Hutter regard natural gas liquids as crude oil, and do so in all my analysis and data." I think this would clarify for people where you are coming from.

Best,

G

What's the U.S.'s Energy Policy?

People still use hoary phrases like "Big Oil"? How quaint. How thoroughly out of date. Really, it's very charming. It's like listening to dinosaurs debating Soviet Communism vs Western Capitalism.

There is no Big Oil. The western oil companies are now midgets. They are in liquidation. They are irrelevant.

Gregor

What the IEA Doesn't Want You to Know About Peak Oil

Extremely well done. I will be mentioning this excellent piece liberally, to my pals. Keep it coming.

Gregor

Perhaps There Are Unseen Green Shoots

We may very well come to an of end to this recession-depression, on a short cyclical basis. Possibly for a period time even up to a year. However, there are deep structural, demographic, and energy-supply issues that are totally unique to this juncture in US history that foreclose upon any sustained recovery. It's terrible, and I wish that were not the case. On a 6-12 month basis, I don't wish to argue with ECRI's work. I too see a relief period that would largely be marked by a lower dollar, a boost to agricultural and light manufacturing exports, and some inward investment. However, the twin limitations of interest rates and energy supply (oil) are waiting for us, any time we attempt to emerge from the hole. And that does not even mention the overall crushing nature of the aggregate debt. What you can have therefore is a replay of the January 2007 to July 2008 phase, where exports advance and BRIC is doing well--but US housing, autos, and the FIRE economy (the debt creation economy of finance, insurance, real estate) continues to contract. And when I use the word "contract" I'm being generous. If such a scenario played out, we would crash once again in Summer 2010, in car-crash of higher interest rates, a massacre in commercial real estate, and higher oil prices. Not to mention a potential debacle in government debt, and, the usual policy mistakes from both the FED and the federal government--who are now making mistakes not on a large level but on a scale that is truly awesome.

Why I'm Unconvinced by Calls for a Second Stimulus Package

It's intriguing, however, that both you and Brad have the same throwaway line in each of your posts: "the economy has done much worse than anybody thought it would."

That's just not true, and, understandably neither you nor Brad spend anytime pursuing any quantification of the assertion. It's a kind of hanging chad of logic in both of your essays, that appears unimportant at first, but, actually weakens both pieces quite alot.

Developing World Consuming More Energy than Developed World. Price, Climate Will Suffer

Thanks for all the responses. I'll make two remarks.

Readers of SA have to realize that these posts are republished from the author's original blog-and--that SA often changes the title. In this light, I can understand why so many comments here understand this post of mine as expressing a support for the thesis of climate change. Actually, that's not the case. I express no view whatsoever. I only refer to it.

Also, I reject traditional measurements of poverty which have tended to measure wealth in US Dollar terms. I am not alone in this criticism. It's hardly radical or even novel to question measures of poverty in USD terms.

Thanks to all.

California - And by Extension the U.S. - Headed for Permanently Smaller Economy

Thankyou for all the remarks. I am quite surprised the assertion of collapse in this article, and in other related articles on my blog, was not rejected more forcefully. In over 125 comments, hardly anyone tried to make the case that the current economic dilemma was similar to other post-war recessions. That's a surprise.

The Nigerian Delta, Oil Actors and the Global Oil Landscape

Thanks for all the responses. I'll make two remarks.

Readers of SA have to realize that these posts are republished from the author's original blog-and--that SA often changes the title. In this light, I can understand why so many comments here understand this post of mine as expressing a support for the thesis of climate change. Actually, that's not the case. I express no view whatsoever. I only refer to it.

Also, I reject traditional measurements of poverty which have tended to measure wealth in US Dollar terms. I am not alone in this criticism. It's hardly radical or even novel to question measures of poverty in USD terms.

Thanks to all.

California Not a Trendsetter on Energy Policy

For those reading this thread, I would advise a review of Jevon's Paradox. Regards, G

Oil Volatility Will Keep Killing the Economy in Waves

It's a little surprising to learn, over this several month period that I have had my posts syndicated here at S.A., that most commenters seem unaware that...

1. Most posts on SA come from an original blog.
2. SA changes the title of most of these posts.

If you want to know what the Author really meant, I would suggest readers also check the original blog.

Best,

Gregor

gregor.us

Did the ECB Save COMEX from Gold Default?

"On Tuesday, March 31st, Deutsche Bank (DB) amazed everyone even more, by delivering a massive 850,000 ounces, or 8500 contracts worth of the yellow metal. By the close of business, even after this massive delivery, about 15,050 April contracts, or 1.5 million ounces, still remained to be delivered."

Could you check your math, in the above passage?

Thankyou

Is the Dollar Rally Over Now?

Oops. Nothing short of hilarious to hear all the trend-following chatter from the Dollar bulls in this comment thread, just 24-72 hours before the USD got mugged by the FED.