kebu77

A New Economic Indicator?

A possible explanation is the adverse impact of unemployment on men. Women now make up half the employed workforce, not due to their expanding numbers but because far more men have lost jobs in the recession - - construction, manufacturing, finance vs. health care and education.

Would a lot of unemployed women with time on their hands go out and buy guns and ammo? Men are out there compensating for loss of status and identity.

This is a simpler answer than politics or some other second derivitave explanation. Obama is clearly no threat to the gun lobby and crime is falling or flat.

Marc Faber: Equities Safer than Dollars

MSimon. your reply tells me you might be one of Julian's offspring...

I'm talking oil flows, not oil in the ground. There's a lot of oil in the ground, more than we've taken out in 150 years. The trick is, the accessible cheap oil has all been found and most of it has been pumped. The percentage of energy used to get energy is rapidly rising. So, while the price of oil has tripled, total world production has basically flat-lined at 2005 levels (now actually down, but due to demand destruction). Economists say if you want to get more of something, raise the asking price. So what gives?

"Mistakes were made" is not a plan for the future. Just think about the next few years, not 20 or 30. Whatever Mexico does to reform its energy sector, won't help in the next five years, during which it will probably become a net importer (unless its ecomony and internal oil consumption crash).

Hope is not a plan. Yes, EEStor is likely a scam (or at least not much of an improvement). Polywell stays alive cuz the Navy is covering its bets - - were Polywell to prove out, it'd be a really great carrier-driver.


On Sep 30 11:43 AM MSimon wrote:

> The US could supply its oil needs from oil shale for the next century
> if the government got out of the way. Not to mention Alaska and off
> shore.
>
> EEStor is a scam IMO. The jury is still out on Polywell.
>
> The greens have done a LOT to cripple the US. Can it be turned around
> - depends on who controls Congress and if the current President wants
> to be re-elected.
>
> Most of our wounds are self inflicted.

Marc Faber: Equities Safer than Dollars

US oil production peaked almost 40 years ago and, with the exception of minor, temporary upward blips, has been in decline ever since. No amount of "drill, baby, drill" will ever reverse this trend. The decline will be lessened by tertiary recovery from existing wells, but will never be reversed.

Canada will need some of its declining and increasingly expensive oil for itself.

Mexico's overall production is declining at roughly 8-9% a year, and its exports are declining at 20% a year, or more than that net, since it re-imports considerable oil as refined products (ironically, during the high gas price period last year when Mexico was selling gas for less than cost of re-imported refined gas from the US, San Diego gas customers could cross the border and get cheap
Tiajuana gas).

About three years ago, Jeffrey Brown (westexas on the oil drum) began talking about how oil exporting countries (e.g., US and Indonesia at an earlier time, UK, Venezuela, Mexico) continued to increase their internal consumption even as their exports decline down to zero and they become importers. Google: "Export Land Model"

Economies are based on energy. Notwithstanding climate issues, the US will move to a lower-carbon, lower-energy economy. The only issue is whether this happens voluntarily within societal mechanisms or is imposed upon us by reality.

We can do nothing and rely on magic bullets, like Polywell or EEStor, to save us. Are you feeling lucky?


On Sep 30 09:53 AM MSimon wrote:

> America gets most of its oil from:
>
> America
> Canada
> Mexico

Jobless Claims Fall to the Lowest Level in 34 Weeks

Claims have fallen for 18 of the 24 weeks since the peak and are now running at 16% below their peak, about a third the way down from the pre-recession level...

Daniel Gross: The Recession Is Over

Dave, Dave, please read what Ferdinand said - - "Better save an article with this title for another site, since a majority of the SA contributors and commentors are hoping and praying that the US economy goes into the tank."

Daniel Gross: The Recession Is Over

Ferdinand: In 1943, the US was the Saudi Arabia of oil and the world's leading manufacturing economy, rich in mineral resources, with a rail network almost twice the size of today's. Our biggest asset today is education and a legal system that promotes enterprise, but the natural wealth has been greatly depleted and we don't seem to be able to leverage our remaining natural assets like natural gas. . .

Worst Housing Number in Decades: What Is the Wall Street Media Smoking?

"In what universe do you think that a seasonally adjusted number of housing starts being 27% of what they were four years ago is good economic news, Mr. Wrixon?"

Actually, it could be. Builders could go to 0.0% I suppose but then would be OOB. Builders are "chasing" completions, which over the last two years have exceeded new-starts/permits by around 150-200k per month, with some months as high as 300k. You know the new-house mkt. has hit bottom, more or less, when completions fall more in line with new-starts/permits. We are at least several months off from this - - doesn't matter whether you do SA or NSA on this, result is roughly the same - - too many new completions competing with the current (recent completions and existing) housing inventory.

The Shell Game of State Revenues

"State and local governments spend about $2 trillion a year, and the federal government is now paying about 23% of those costs."

A minor quibble, but $3.5T fed spending, minus 0.5 to the states, equals 3.0 + 2.0 state spending or $5.0T total, or "only" 37% of the $13.5T economy.

Ban enough, but not 40%.

Just a Recession, Like All the Previous Ones

"So, it looks like the discrepancy in how different age groups are being affected by the current recession is likely more a function of what part of the business cycle we're passing through than anything unique to our era."

However, as you went beyond Norris' snapshot analysis, consider that the truth could be both the business cycle and "our era" as the analysis is expanded from one generation to two - -

If the post-1987 data shows a cyclical pattern trending towards less employment of young adults (somewhat contributed to by the older boomers in their peak earnings years being able to shelter their post-teen children into their late 20s), how does this compare to "our parents era" when young boomers married younger, formed households sooner, and fully participated in the labor market (esp. thru the two major post-WWII recessions and serial energy crises)?

If this recession hangs on into 2010 or later with a jobless recovery, we could see far more competition for jobs across the age range. It may be understating it to say that there may be substantial social and political consequences.

The Deflation Debate: Why This Time Is Different

Does all the money held by the top dogs in the oil-producing countries change any of the views expressed above?

What happens when the Treasury (soon) goes into the bond market in a big way, if there are shortage of buyers?

If rates on long issues then rise substantially to attract the extra cash needed? If the dollar then drops fast and oil and other commodities rise fast... just after OPEC has (on or before their Dec meeting) cut quotas again, triggering an unintended second oil price spike?

The Day After: Is the Honeymoon Already Over?

Bush I and Clinton were fiscally responsible (tax increases and, for Clinton, working with a Repub cong). Bush II ran the country into a ditch, as Ross Perot would say.

Obama has said he would make energy his top priority. Pickens isn't finished talking, either. Given the liquidity trap possibilities and the credit crunch, he and his advisers may rightly conclude that direct investments in energy, infrastructure, and mil and non-mil goods are needed.

One suggestion is to identify and down-size aging fed, state and local govt cars and trucks. Buy American, possibly as part of a larger program to keep GM-Ford-Chrys. in the game. Park the old ones and parcel them into the auction markets over a couple of years...

Best hopes for optimal bipartisan actions to address the crises now and after 1/20.

From Subprime to Meltdown: Is Peak Oil Responsible?

Lionel - -

Peak oil is a theory - - like relativity and evolution - - in the scientific sense of "the consensus of informed opinion." For your masters thesis, you need to go that extra step and write on the additional issue of declining net oil exports - - what Jeffrey Brown calls the Export Land Model.

Peak oil is about flows (current production) not resources (oil in the ground that can be develped for production under current economic conditions) and ELM is about flows available (from "export land") to be imported (by "import land"). The model says that, typically, exporting countries continue to increase their internal consumption even while they reduce their exports. The WSJ recently reported that world oil exports have declined in 2006 and 2007, and look to do so in 2008 (the Saudi oil production burst this summer notwithstanding).

This happened in the US even before the US peaked in 1970. The North Sea peaked in 1999 and UK exports then declined to -0- (happening about now). Mexico peaked in 2004 and their exports are now crashing. It looks like this is just beginning to happen for Russia.

So for all you investors out there, look to ELM as your leading indicator on what is to come... As for peak oil being "the cause" of the financial crisis, of course not. But it has been a contributing factor (along with the rising price of other commodities), as has the drain caused by needlessly exporting organized violence in the main oil producing region of the world.

Rough Seas Ahead?

"To those who think OPEC will do something to support oil above $100, I suggest you consider the likelihood that the Saudis - the most powerful OPEC member - will be happy to drive oil down before the U.S. election if they think that will elect another Republican administration."

While this is an investing site, I'm glad to see a recognition that political factors can throw us curve balls. The above is an entirely realistic view as can be seen by two prior Saudi production shifts - first, the massive increase above quota before the 2004 election (ensuring a continued Republican administration - don't take my word for it, look at the data re KSA actual prod. vs. quota) and second, production cutbacks contributing to a Democratic Congress in 2006 (that threat, along with a call to Cheney to get on a plane, ensuring the surge versus a pull-back from Iraq).

The Saudi's miscalculation was to supress production too long, leading to the 2008 price spike, due I believe in part to their (and others') failure to realize that flat overall world production was leading to declining world exports from 2006 into 2008 (Jeffrey Brown's Export Land Model).

Some analysts, by ignoring the possibility that the Saudis were intentionally withholding production into 2007, jumped on Matt Simmon's "Twilight in the Desert" theme a little prematurely and, by crying Chicken Little a little too early, compromised the credibility of peak oil theory. All we can really say about the Saudis is that they are very good at keeping secrets. Thus, by definition, anything they say is unreliable.

OECD Lowers Growth Projections for All G-7 Countries Except the US

Keep in mind that, adjusted for population changes, the Euro area and Japan, actually have higher growth rates per capita, than the US.

That Was Ugly

Note that, of the 12 "worst first halves" listed in the article, only 1970's 22.59% 2nd-half recovery resulted in a higher Dow at the end of the year than the start. That was the year of the mildest post-WWII recession. :(