317 comments on DrumBeat: September 15, 2006
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317 comments on DrumBeat: September 15, 2006
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There was an excellent article on this in the NYT months ago. If you read the Brookings report, they actually track average waiting times in line at petrol stations.
One possible explanation is that the real price of gasoline in country is tending more towards the black market price. Possibly cutting demand.
Something else I'd like to bring up is that I think pipeline attacks in Iraq may be overblown, no pun intended. There is a website that actually tracks these listed in endnotes of Brookings report. I haven't read through the whole list, but I get the sense(and this is pure speculation)that the "players" have more interest in making money from the trade in oil/gasoline than in disrupting its flow. We've seen this before. Most notably in Gaza.
Here's a Wa Post report on the Iraq gas price increase, from December of last year:
http://www.washingtonpost.com/wp-dyn/content/article/2005/12/27/AR2005122700929.html
Could it be a sign of increasing povertization - each month more people being priced out - and not necessarily an immediate "consumer" decision to not purchase?
Think about it. Let's say you could buy milk(or whatever you fancy) for 25 cents, but had to wait for between 1 and 4 hours in line to get a half gallon. Or you could buy the same half-gallon and as many as you wanted for $3 without any wait, on the black market(from Al-Sadr Brothers).
What would you do?
Then, let's say, one day, Maliki & Sistani Grocers raised the price of the official milk to $2. But you still had to wait the same four hours.
Now what would you do? Aaaah. Choices. Choices. Economics.
Of course, your wait in line would probably decrease for the $2 stuff, but the price of the $3 stuff might go up, and you may actually have to wait 15 minutes for it.
They have a term for this in the Middle-East. I forget the Arabic. But in English...it is "Market."
What would happen to American gas prices if all subsidies stopped overnight?
Fuel prices are heavily subsidized in many developing countries. In many cases, this is causing severe budget problems for the governments in question.
But from the Washington Post article and a few others I Googled through their news search, the Iraqi subsidy will take another bump if they are to meet the demands of the International Monetary Fund. Its probably going to see at least a doubling in coming months as they shift prices to ME norms.
Ah, but then you drop it to $20, and everybody thinks it's cheap, ans starts driving again ;-)
People killed by brutal uncontrolled sectarian violence don't buy gas?
Second point. Iraq looks real dangerous when viewed from the car-bombing, suicide-bombing, IED viewpoint. But I ask this. And I'm not kidding. And I'm not trying to be an ass. I'm serious. I don't know your answer. And I don't know the answer.
Do you think Iraq would be safer with no Americans, no Civil War, and no sectarian violence? What if it was at peace?
Do you think 20 million Iraqis driving around in "freedom" at 100mph in those lovely shitboxes they own would be safe? With no traffic lights. And no cops.
Where were those magic traffic lights going to come from?
I could go on. You want me to?
I think the word we all better get to love is 'Transition.'
Do you know anybody personally that has fought in a war, I mean someone close? If you do talk to them about it. It is not as funny as you think.
Sometimes you don't know which CEO you are talking to. I mean you always know the Dave you are talking to, but the CEO ... it's hard to tell. I will take it at face value and say we have found a point of agreement.
It takes guts to go over there.
In a word, yes.
Traffic in India is crazy, leading to a death rate of 221 per million people per year. (cite) It's a pretty high death rate in comparison to most places (about double the US's), so should make a good estimate of what Iraq's would be like.
Iraq has about 26M people (CIA World Factbook), suggesting they'd see an annual death toll of about 26*211 = 5500 on the roads. Right now, thay see that many dead every two months.
So, yes, it seems clear that Iraq would be much safer with no sectarian violence.
Also, why would you believe the numbers you get on Iraqi production o rconsumption? Deems like a "lips moving" situation to me.
People killed by brutal uncontrolled sectarian violence don't buy gas?
IMO it might be due to the owners of real estate that is flooding the market with no buyers and the ARM mortgages that bring bad news as well.
This makes for some folks who suddenly realize that they are in deep kaka and must make some lifestyle changes.
Of course it doesn't help much but this is their psychlogical ploy to convince themselves that they are really really doing something.
They are toast anyway but don't want to think about it.
So huge debts and no buyers...ergo less spending on stupid driving habits.