jesterboomer

Oil: A Slippery Slope Ahead?

I agree with annyone and enviro111.

A small shortfall in supply can trigger a significant increase in $/bbl. I suspect OPEC is lying low because they do not want to be blamed for the recession and would be happy to see some of the hysteria over alternate energy dissipate.

Once the global economy starts upward again, oil will start back up as well.

Treasury Continues to Harpoon the Real Economy

The author has a point. While it was necessary to save the financial system from collapse, there seems to have been little done to promote the real economy and stop job loss.

Government stimulus needs to be directed to activities that retain the stimulus within the US and generates jobs with a multiplier effect - as well as doing something useful. We have to stop the net outpouring of wealth from the US to Iraq, the Middle East and China. The most obvious candidates:
- massive investment in health care, which create all manner of domestic employment as well as R & D;
- infrastructure and alternative energy, ditto;
- ending the Iraq and Afghan wars - Israel (and neocons) should make peace with its neigbors;
- stop obsessing about the dangers of Russia and Iran. Russia's population is only 90M and diminishing. It's military budget is one tenth that of the US. Scary Russia is history.

To plug the deflation in every asset class, the Government should consider the option of just creating a few trillion $ to invest in the above. Yes it will devalue the $ but in a deflationary environment that is requred to stabilise the economy. Like pushing the reset button to restart the US economy.

Anatomy of a Disaster: The Next Stop

1) We are experiencing massive deflation in almost every asset class - we need some inflation and I expect we will get it - that's good.

2) Investments within the US, e.g. healthcare, domestic energy and infrastructure, do not create any net cost to the US, unlike the war in Iraq, oil imports and everything made in China. The government can and should invest heavily in these activities and they will boost the US economy. Boosting healthcare may reduce the labor available for nail salons but will not have any other negative effects.

3) Companies can't make profits if the majority of the public cannot buy their products. So yes, we do need to stor the money around. This seems to escape McCain. Obama has a plan - McCain does not.

Mark-to-Market vs. Mark-to-History

I agree, Mark-to-Market clearly ought to be Mark to a fairly long moving average. Earlier this year, mark-to-market rendered the income statements of gas producers such as CHK and DVN meaningless as natural gas prices spiked way above option collars and they were forced to recognize future losses on options. Now that gas prices have come down they will reverse all those imaginary losses.

It's ironic that the option collars that were put in place to ensure stability for the businesses produced unrealistic gyrations in their financial statements thanks to insane mark-to-market conditions. This hardly seems helpful.

Are Short Sellers Really to Blame?

Ever hear of a 'run on a bank' triggered by lack of confidence. Those who short financial stocks are also motivated to spew negative rumors in the marketplace. It is not just the act of shorting a stock that is at issue.

Energy Sell-Off Overdone

OPEC will ultimately set a floor on oil prices. When that becomes clear, energy stocks will stabilize. In the meantime pre-election rantings and ravings from both sides don't help.

It would help in general if we could get some sensible US foreign policy to stop poking the 'scary' Russian bear in the eye with missiles in Poland, Georgia, etc, which is unlikely to promote friendship, and instead encourage the now much more cuddly bear to align with the EU, US and other democratic nations.