I'm a little surprised, I gotta admit, oil and commodities are looking soft today and the expansion seems to be fizzling out. I really hoped the economy would hold tough till oil got up at least to where it was last time before growth choked.
Not a very good sign I'm afraid if the world can't stomach $120 oil (OPEC Basket) for a month. I wondered whether we might actually be more resilient after the punctuated evolution event we saw at $147 killed off some of the weaker consumers and we could stand $160 or $180 for a while. Looks like that idea may turn out to be wrong.
Compounding the problem this time around, the housing ATM has shorted out and there's the knock-on effects of the commodities bubble last time as meat & dairy producers have gone bust and the resulting fewer animals increasing prices - and of course we're still mandating the burning of subsidized food in our bailed-out cars, 40% of our corn crop now. One little hiccup in the weather and corn could easily go to $10/bu. and corn is in everything. And that's on top of an already bad wheat year.
Rents aren't going down, food is going crazy, all FF products of course are going up... and wages?
$this->bbcode_second_pass_quote('', 'R')eal average hourly earnings fell by 1.0 percent, seasonally adjusted, from March 2010 to March 2011.
A 0.6 percent increase in average weekly hours combined with the decrease in real average hourly earnings resulted in a 0.4 percent decrease in real average weekly earnings during this period.
PeakOil is You
Peak Economy (was Oil Price Softening)
Peak Economy (was Oil Price Softening)
by Pops » Wed 04 May 2011, 21:37:58
Wouldn't it be a kick in the pants if everyone were wrong and the world economy pooped out at $125/bbl? And wouldn't it be even crazier if instead of the oil price stair-stepping up with each cycle, the economy just kept getting less resilient...
and each go around the high price was actually lower than the last time?
And so instead of higher prices enabling greater efforts at extraction and encouraging alternatives, we wound up going in the other direction and simply couldn't afford the cost of deploying 10,000 fallout generating plants or hundreds of square miles of thermal solar ovens or even the development cost of deep water or kerogen cooking or any other "unconventional" oil source for that matter...
naw
.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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Re: The 2011 PO.com Oil Price Challenge
by Outcast_Searcher » Wed 04 May 2011, 22:38:22
$this->bbcode_second_pass_quote('Pops', '
')Not a very good sign I'm afraid if the world can't stomach $120 oil (OPEC Basket) for a month. I wondered whether we might actually be more resilient after the punctuated evolution event we saw at $147 killed off some of the weaker consumers and we could stand $160 or $180 for a while. Looks like that idea may turn out to be wrong.
')Not a very good sign I'm afraid if the world can't stomach $120 oil (OPEC Basket) for a month. I wondered whether we might actually be more resilient after the punctuated evolution event we saw at $147 killed off some of the weaker consumers and we could stand $160 or $180 for a while. Looks like that idea may turn out to be wrong.
Pops, to this and your entire post -- that's what make economics so tough, and why it is such a poor predictor of what happens in the real world (IMO).
It's NEVER just about X (like oil prices), as much as this site focuses on that. All the other stuff you mentioned (plus thousands of other things including emotions) factor into these things.
Then we (and all the other pundits in the world) want to look at a handful of variables, correlate some things from previous cycles, and say -- "Wala -- the world is thus".
Don't get me wrong -- I make no claims I have any more idea than anyone else willing to look at things with some reasonable level of rationality and awareness of personal biases.
....
It would make economics an actual testable science if we could put little people into a special world-like lab where we could change one thing at a time (like oil prices), and do repeatable experiments to figure out what happens.
Unless I'm missing something, we can't do that. Until we can, it's all just speculation and of course Keynesians vs. Free Marketeers yelling at each other on your favorite media outlets... Dismal science indeed!
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: The 2011 PO.com Oil Price Challenge
by careinke » Thu 05 May 2011, 11:33:14
Pops,
I fear your assessment may be correct. Oil prices seem to be collapsing for the last few days. Today alone we are down over 5%. Maybe oil is a leading indicator for an upcoming depression.
I fear your assessment may be correct. Oil prices seem to be collapsing for the last few days. Today alone we are down over 5%. Maybe oil is a leading indicator for an upcoming depression.
Cliff (Start a rEVOLution, grow a garden)
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Re: The 2011 PO.com Oil Price Challenge
by ColossalContrarian » Thu 05 May 2011, 12:40:10
$this->bbcode_second_pass_quote('careinke', 'P')ops,
I fear your assessment may be correct. Oil prices seem to be collapsing for the last few days. Today alone we are down over 5%. Maybe oil is a leading indicator for an upcoming depression.
I fear your assessment may be correct. Oil prices seem to be collapsing for the last few days. Today alone we are down over 5%. Maybe oil is a leading indicator for an upcoming depression.
I would say it definitely an indicator for a deflationary depression which would justify QE3 thus sending commodities back up!
Looks like Ben is on a rollercoaster of inflation and deflation but he's always a few steps behind the curve. The moment he thinks of ending QE early everything deflates, then when inflation rears it's head he's forced to continue QE.
I don't think the wild swings are by design but if it get's Obama re elected and GS big bonuses he's doing his job.
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Re: The 2011 PO.com Oil Price Challenge
by sparky » Thu 05 May 2011, 14:53:29
.
It looks like the economy is on an undulating plateau ,
any improvement see a sharp oil price rise ,
any sharp oil price rise deflate growth
some push and pull semi stable system with about nine months frequency
Some silly " herd traders " are going to be creamed .....AGAIN
a lot of positions will have to be closed in a panic
It looks like the economy is on an undulating plateau ,
any improvement see a sharp oil price rise ,
any sharp oil price rise deflate growth
some push and pull semi stable system with about nine months frequency
Some silly " herd traders " are going to be creamed .....AGAIN
a lot of positions will have to be closed in a panic
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Re: The 2011 PO.com Oil Price Challenge
by TheDude » Thu 05 May 2011, 15:16:13
Cool, a selloff. Love watching these lemmings go over a cliff. Seems they just heard about Bin Laden, Reuters says now that he's sleeping with the fishes "the market is adjusting the geopolitical risk premium down accordingly. Given this, speculative money is being taking off the table." OK, market, whatever.
Pops - 2008 = punk eek is an interesting analogy. But we're still here; who went extinct, exactly? Yuppies who foreclosed and had to sell McMansion(s) and SUVs and are currently living under a bridge? But, theoretically anyway, they'll be back in the rat race if given the chance. Who evolved, too? People with new bicycles? Or bicycles bought on Craig's List, more likely.
How about comparing consumers to the stomata in plants? Larger in times of plentiful CO2, it's how they measure CO2 in the geologic record. Sort of like motorists - or cars - during epochs of plentiful cheap fuel.
Pops - 2008 = punk eek is an interesting analogy. But we're still here; who went extinct, exactly? Yuppies who foreclosed and had to sell McMansion(s) and SUVs and are currently living under a bridge? But, theoretically anyway, they'll be back in the rat race if given the chance. Who evolved, too? People with new bicycles? Or bicycles bought on Craig's List, more likely.
How about comparing consumers to the stomata in plants? Larger in times of plentiful CO2, it's how they measure CO2 in the geologic record. Sort of like motorists - or cars - during epochs of plentiful cheap fuel.
Cogito, ergo non satis bibivi
And let me tell you something: I dig your work.
And let me tell you something: I dig your work.
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Re: The 2011 PO.com Oil Price Challenge
by Pops » Thu 05 May 2011, 15:36:31
$this->bbcode_second_pass_quote('TheDude', 'P')ops - 2008 = punk eek is an interesting analogy. But we're still here; who went extinct, exactly?
I was thinking of the 99ers mainly, now the structurally unemployed who've added maybe a couple percent more to the "natural" unemployment number. Mostly upper middle-aged men that will never regain their earlier income levels, maybe tradesmen, middle management, car salesmen. I'm sure they'll find something or momma might have a job, maybe they'll move into the kids basement...
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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