ThatGuyInTheBack

High Gold Prices: It's the Oil, Stupid

Yes, we have a great deal of natural gas in the USA. What you need to consider here is that natural gas plays deplete far, far, more rapidly than oil reservoirs. If we start really exploiting the Marcellus formation and try and run our transportation system on it, we could deplete it beyond usability in a fairly short time (i.e. < 30 years, in many cases).

Moreover, shale gas is not trivial to extract. A nice explanation of the difficulties involved in exploiting NG plays is described here: slb.com/media/serv...

As with all the recent oil and gas finds so breathlessly reported in the media by journalism majors, the devil is in the details, and sometimes those devils can kick our ass.

How Warren Buffett Is Smarter than the G20

I think Buffet's move is more common sense than many believe.

He's betting oil prices will rise significantly, but people will still need transportation of people, food and goods. The most energy-efficient and cost-efficient way to move almost anything around is still rail.

Railroads are more than transportation. He's bought easements, and land - *lots* of land. If he was to cover every square inch of railroad land with solar panels wherever it made sense, he could run his trains on electricity and sell the excess back to the utilities.

It's a move to real value, away from fragile abstract asset classes like derivatives, CDOs, etc. whose value will shrink (possibly to zero), to needed physical assets.

Common sense plus genius. Pure Buffet.

Why Is the Market Going Up When Jobs Are Going Down?

No mystery. The American economy is now separating from the American people, who are only seen as an abstract economic factor (i.e. consumer spending). Jobs outsourcing is accelerating, if anything. Automation is being implemented wherever possible. Both will increase productivity, profits..... and unemployment.

Geithner, et al. are busy trying to revive the economy. They have no interest in the American people (which they see as mere peasants) at all.

3 More Black Swans for the U.S. Economy

Jerrydd,

It

The Coming Consequences of Banking Fraud

No. Conspiracy by a group of individuals planning something is a 19th century intellectual fallacy. Think about it more like a hive of bees or a collection of bacteria, engaging in collective action for the benefit of the hive/group, but where the behavior of each individual is governed by simple rules. The behaviors are emergent, and not conscious at all, even though it can look like that.


On Sep 10 12:50 PM Peter Bolden wrote:

> It scares me when I read an article like this. TWhen he speaks about
> financial oligarchs that are controlling everything including who
> is in power in the US and UK is like anti-Jewish conspiratorial documents
> such as the "Edlers of Zion". Is he saying that Jews are controlling
> everything without saying it?

Five Reasons the Market Could Crash This Fall

The effect of the quadrillion in derivatives exposure is misunderstood. What it does is to increase "turbulence" in the markets. The massive worldwide derivatives exposure will, in effect, amplify the effects of a downturn just as it once amplified the effects of a rising economy. Until this is addressed, wild volatility will become the new norm.

Surprise, Surprise, Surprise: Positive Economic News Everywhere

Yes, I'm sure all this good news from the *financial* sector will do away with that silly erosion of our manufacturing base, the US government's need to roll over 2 trillion in debt (bought by...), oil price fluctuations (first way low and then way high), the aggregate 200 trillion dollar derivatives exposure of US banks (especially JP Morgan), and the gradual depletion of oil fields worldwide over the next 20 years.

But hey, *short* term, there's nothing but good times ahead.

And isn't that what America is all about?

Cheers!

'A Chicken in Every Pot': The Economy Will Recover

This is nonsense.

1) In the 1930's we were a creditor nation, not a debtor.

2) Overseas wage arbitrage had not yet happened. Wages could increase and thus revive the consumer economy.

3) US banks did not hold derivatives with a value of 200 trillion in notional value and about 15 trillion in market value. The sheer volume of these instruments will amplify economic downturns for the foreseeable future.

4) As Denko pointed out, we had plenty of oil. That cheap oil is now gone and we have no equivalent substitute that can be brought on-line in a 10-year timeframe. We're starting the inevitable worldwide decline in production which will culminate in the hoarding of petroleum by producer nations causing *sudden* price spikes in international oil markets. These price increases are likely to happen before the financial crisis caused by the aforementioned factors is resolved.

Sorry. Wish you were right. You're not.

Socialized Medicine Is Coming

So how do Sweden, Canada, and almost every European country manage to do this? Are they magicians?

No. Health care is rationed. We ration it too. Economically. If you're middle class or below, and you're without insurance, you'll be bankrupted by your first major illness.

Yes, we CAN pay for this. Everyone else does. Resources are always allocated. We just make different choices as to their allocation. Or are you saying that Americans are simply too lame to accomplish a basic task which has already been accomplished by Cuba?


On Jun 15 12:35 PM Do The Math wrote:

> IT ISN'T GOVERNMENT'S BUSINESS TO BE IN HEALTH CARE.
>
> WE CANNOT PAY FOR THIS.
>
> Politicians are pushing to do this so quickly because they know it
> cannot stand under real scrutiny.
>
> It will give them enormous power over the citizens and over who is
> treated or not treated.
>
> Get the government totally out of health care and change it so the
> individual is responsible and can truly "shop the market". You'll
> see prices come down and better care.
>
> And quit making everyone pay for the uninsured illegal aliens. <br/>
>
> The politicians who claim the most concern for the uninsured can
> donate their personal money voluntarily to help the uninsured, like
> some of the rest of us do to help our friends.

Why Isn't Microsoft's Strategy Working Anymore?

The answer to Microsoft's OS issues are so simple, they will never see it.

In a word, it's "usability."

I use Ubuntu and/or the mac because...

It doesn't pummel me with dialogs.
It doesn't make me reboot. I used to waste time rebooting from Windows crashes. Now I waste the same amount of time rebooting from Windows updates.
It doesn't pound my hard drive, slowing things further.
It doesn't stop and pause for 20 seconds when I do something so complex as click on a folder and try to move or delete it.
It doesn't refresh my desktop screen randomly.
It doesn't steal my focus when I'm trying to do something else.
It actually closes applications (or at least gets them out of my face) that I tell it to close so I can go do something else.
It doesn't freeze and make unresponsive a window because it's still running some damned process I could care less about.

It doesn't make me *wait.* That's the biggest downside of using Windows. It wastes my time, as if what *I* was doing didn't matter. It's unresponsive and rude. If Windows was a restaurant, I'd leave the building without paying and stiff the waiter.

Basically, the designers of the Mac os and Ubuntu wrote it as if what *I* was doing mattered. Not the machine.

If they ever fix the usability issues, and move the OS to the web so I can save my current configuration, they might win, but I think that a company made of thousands of arrogant geniuses is just too stupid to see the really obvious wart-covered bulbous nose in front of their face. They will eventually fail, spectacularly.

A Long-Term Optimistic Outlook for the Economy

How long term are we talking here. Centuries. In *that* long run, I'm optimistic. Otherwise, not so much. You see, the physical world doesn't care about economists.

In case you haven't noticed, we're running out of *usable* oil, gas and coal (i.e. supplies that both produce more energy than it takes to extract them, and are economically viable). Absent of magic or a technological breakthrough not on the horizon, our ability to generate energy from alternatives is nowhere near enough to continue to feed, clothe and house 6 billion plus human beings. Without change, this century's die-off will be major and profound.

Perhaps you believe in magic or economics or perhaps, Santa Claus?

The Shallowest Generation

A few points to remember:

Most of the world's wealth, both imaginary and real, was created in the last 50 years by the boomer generation. The wealth of roads, pipelines and infrastructure you enjoy today.

Many boomers are putting their children through college AND taking care of aging pre-boomer parents. Saving was just not an option. Neither were ipods and SUVs.

Boomers collectively, did nothing but believe in capitalism. The gaming of the political/economic system was and is done by the wealthy oligarchy of the country. This is not a generational issue. It's a haves vs have-not issue. Until we recognize that the wealthy are another branch of government and are regulated accordingly, we are doomed to this boom and bust nonsense.

Is China the Next Great Bubble?

>Chinese population's rising standard of living can go on for the next thirty years.

You forget that pesky physical limitation called "peak oil." Even poor countries run on relatively cheap petrol. Make that expensive enough (and over 30 years, it will become *much* more expensive), and you will see everyone's living standards fall like a rock, including China's.

What Can Prevent Oil from Foiling a Recovery?

The short answer is "nothing." Oil prices will act as a break on any economic recoveries for the foreseeable future.

Nor is it merely, as the economy recovers, prices go higher due to demand. All the politicians and news commentators like to pretend that peak oil doesn't exist or isn't a factor.

The physical world, it's just so *pesky* to economists, journalists and politicians.

Tech: ATM Sector Prospects Look Good

Rick,

Nice idea, short term, but you're overlooking the obvious disruptive technology change that's coming in a 5-year time frame. In 5 years, you won't need a physical ATM, or a bank. Your cell phone will become your wallet, credit card, checkbook, etc. It will be the effective point of sale for any, and everything. In 10 years, ATMs will still exist, much like the few remainin public telephones, but they won't be a growth industry.