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k Nation (Jim Kunstler)
Thanks for posting some articles on Canada's absolutely ludicrous energy policy. As an eastern Canadian (and oil drum reader) it mortifies me to think of how shortsighted our energy policies are. The average Albertan knows all about the situation but given their vitriolic animosity towards easterners, they are all too happy to let us 'freeze in the dark.' This includes our Albertan PM who got into politics due to his disgust with any sort of 'national energy plan'. Of course, without the east he doesn't stand a hope in hell of ever winning a majority government.
I think if eastern Canadians had any clue about the fact that none of Alberta's oil 'richesse' flows east they'd be pretty pissed.
Oh well, here's hoping for some eastern supply disruptions to get everyone's head out of their *ss and the debate reignited.
It is interesting that Western Canada, regarding oil, is in Export Land, while Eastern Canada is in Import Land.
Of course, we see this on a regional, but less pronounced, basis in the US. For example, portions of Texas are still net oil exporters but I think that Texas itself is a net oil importer.
In any case, what we are fundamentally seeing is Produce or Perish (or Pilfer). The discretionary side of the North American economy is going to just get crushed.
Just what is discretionary? Peoples decisions about how to spend scarce cash aren't always the wisest. For instance producers of the kind of ethanol you drink might do quite well.
I certainly prefer to drink ethanol than to burn it in a vehicle. Burning it seems like such a waste of good libations!
We just had 1 million fervent supporters of the biological consumption of ethanol visiting us :-)
Happy (?) Ash Wednesday, when MANY regret their sins,
Alan
Hello AlanfromBigEasy,
Did you notice any partygoers shouting out Peakoil when their beverage of choice hit half-empty? I am constantly trying to promote this as a new cultural tradition.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Bob,
I like it!
I will start a new tradition this very evening!
THXS SGAGE!
My lawyer's advice to a friend thinking of going into business in a small retail venture was: Sell chocolates. In hard times when money is short, small luxuries are all people can afford. He said a chocolate shop has never gone broke in a recession.
That sounds like a GOOD idea. And not just chocolates, but anything tasty. Nutty, savory (salty) anything that's a little treat, will do well. And extra points if it's actually good for you like good chocolates are. You could grow nuts or get them locally and make them into sweets. It's a very good business plan.
Isaac Asimov's family ran a candy store when he was a kid, and this was in the Depression. It appeared to provide well for them, and provide the basic framework for Isaac and his siblings to get into colleges.
I know from personal experience, as Ebay sales were sinking then tanking, and as the US economy has gone down, I've consistantly been able to do OK at swapmeets with an "Everything's a dollar" method. I finally realized I was coming out better selling 10 of something for $1 each than selling those 10 things for $9.95 on ThiefBay and losing $3 in fees.
A dollar now is like the old-time nickel or dime, no one thinks about it.
I also used to know a swapmeeter who'd get nuts and bolts and fasteners and stuff, cheap or free, organize them in his house all week, then on the weekend hit the swaps. He'd drive up in his little pickup truck, and unfold a setup that took up something like 5 spaces, and have bins and bins and bins of odds and ends, 2 for $1 or $1 each or whatever, everything was cheap. I think his most expensive item would be $3. I'd come by and dump $100 or more on his first thing, picking up RF connectors and stuff. Guys could not stay away, he had tons of stuff, and it was all cheap. He said he did even better at the classic car shows. The guy worked out of his house, only had to go out and sell on the weekends, and made at the very least $1000 on a weekend. Often double that I'm sure. The guy's a genius.
Off-shore Texas is "Export Land", On-shore Texas (despite your best efforts Jeffrey) is "Import Land". Import Land is bigger than Export Land AFAIK.
Most Texans are unaware that Texas does not produce enough oil to keep the freeways (and tollways) of Houston, Dallas, San Antonio, Austin, El Paso, Ft. Worth, Amarillo, Waco, Corpus Christi, etc. busy.
Best Hopes for Urban Rail in Texas,
Alan
Consistent with your longstanding "produce or perish" theme...
US Service Sector in Recession
January 2008 Non-Manufacturing ISM Report On Business
The service economy is most of our economy today. It appears to have just collapsed.
The hyperbole is not especially helpful. Yes, the service sector appears to be in contraction, but to call this "collapse" is rather suspect.
It's a 23% decline, from 54.4 to 41.9. If it had gone from 54.4 to 49.9, it would be appropriate to say "Yes, the service sector appears to be in contraction..."
We're talking about what Bloomberg has estimated is 90% of the U.S. economy.
"The survey results were downright disastrous," said Stephen Stanley, chief US economist at RBS Greenwich Capital.
I hate it when people nag others to express themselves only in optimistic terms. I agree there's reason for hope, but if someone doesn't agree with a pessimist's view, why not simply put up the alternate view and explain the reasons for it, rather than seeking to enforce a happy-talk code of conduct?
From the link, I can't determine what a decline from 54.4% to 41.9% means. The original gives it as a percentage, but of what? It doesn't say. So on its face it's just yet another of a bazillion trumped-up proprietary magic numbers that attract a bazillion press releases that ultimately clog up the "internets" with a bazillion pleas for Congresscritters to hose the taxpayer by voting up subsidies for their special-interest pets. I can't tell how much it amplifies real-world changes. I can't tell what real-world changes those might be. I can't even find a long-term time series by which to guess how volatile it is (maybe I didn't look hard enough or it's squirreled away behind a paywall as if it were a CERA report; those guys gotta make money somehow.)
Now, if we had suddenly lost 23% of all service jobs, then that would be so obvious that none of the ever-popular conspiracy methodologies rehashed for the umpteenth time on today's Drumbeat could conceivably hide it. For one thing, I'd have to take a long detour to get around the line at the local unemployment office. So did we lose 23% of anything that matters? Did we lose 23% of anything at all? What would the world look like at a reading of 0%? 100%? Dunno. It might as well be a random number. This is not a matter of "a happy-talk code of conduct", there's plenty of unhappy talk here most days. It's simply a matter an apparently empty article.
If you can state or point to better information on what it might mean, please do. Meanwhile...???
The ISM is a survey of manufacturing executives on their 'feelings' about the manufacturing sector. Since their 'feelings' have more validity than yours or mine regarding the manufacturing sector, the market occasionally takes notice of this number. (It used to not move market at all - the economic numbers that move the market change over time - this is another one of those '1,000 post card' survey type numbers)
The Institute for Supply Management is not a johnny-come-lately to the data scene. If you had read the associated links you would have discovered that the scale works like this - 50.0 is a flat economy. Anything over 50.0 is a growing economy. Anything under 50.0 is a contracting economy. The ISM has kept detailed records using this format for decades and is thus well qualified to determine what constitutes "growth" in the service economy and what constitutes "contraction".
Further, the ISM's report was cited as one of the main drivers in yesterday's 370 point drop of the DOW and the 1339 point (5.40%) drop in the Chinese stock market last night. Apparently some people give the report more weight than you do.
Furthermore, rather than ranting, you could have read the ISM Report FAQ which would have probably answered many of your questions. ISM (formerly PMI) reports go clear back to 1948, if you care to dig in the archives.
This is a pretty serious contraction, especially if next month's report continues the trend.
Or, you can continue to pretend that all's well with the economy. If that's what you wish to do, be my guest.
Hello, GZ, thanks for the link. Now that I know what it is, I still haven't found a link to it on their cluttered home page, although I found several other FAQs hidden under the mouse-over covers. Maybe it's there somewhere. Nor have I found an identifiable link to it on their "site map", nor in the two originally linked pages. Nor do I see any links to "archives" in any of those places. (Would I need a paid-up membership?)
Oh, and the original ISM page delves into the subject matter of the various indices, but does not state the methodology used to produce the individual numbers. Now that I have this particular FAQ, I see it's basically all a touchy-feelie thing. It doesn't really mean "50 is a flat economy", only that the number of respondents saying "better" equalled the number saying "worse", i.e. their net response-to-survey-quality guess is "flat". That could well slosh all over the map with very small changes in the economy, as it doesn't seem to say that the result is weighted according to the fraction of the economy a respondent manages supplies for, nor even according to the severity of the change said respondent sees through his or her own proprietary window.
This all seems fairly consistent with Nate's remark, "...this is another one of those '1,000 post card' survey type numbers", so I'm inclined to go with that. It's probably better than asking 1,000 bloggers, but it's probably not all that great.
Which BTW has no connection to what I might think the economy might do. Among other things, I think there are more than enough (figurative) helicopters available to guarantee stagflation. And I think that will reinforce the powerful lesson Baby Boomers learned in the 1970s: saving is a chump's game because the government will confiscate much of what you save. And I think it will teach that lesson well to two more generations. And I think that will be very, very bad for raising the enormous investment apparently needed to secure even very modest supplies of non fossil-fuel energy. Then again, I could be wrong.
PaulS
'I think there are more than enough (figurative) helicopters available to guarantee stagflation. And I think that will reinforce the powerful lesson Baby Boomers learned in the 1970s: saving is a chump's game because the government will confiscate much of what you save. And I think it will teach that lesson well to two more generations.'
we don't save due to compulsive spending which is psychological. & yes it would be confiscated but we've been trained too well & as nate says spending gooses our biochemicals.
i agree the helicopters may work a time or 2[mostly a psychological trick as u seem to point out] but if the upcoming decline begins in a few years or less the psychology will change due to reality & the ponsi schema is up. & it won't take generations.
my point is lots of the economy at this point seems psychological. maybe u are right about the research quality of the the study but it is the right arena.
I think appears is the operative word. On NPR yesterday it was explained that the index is psychological in that it measures how much new supply, i.e. paper, pens, pencils, ladders, toilets, etc., purchasing managers will buy to meet expected upcoming orders.
Apparently because purchasers can quickly change their mind it doesn't mean a whole lot but in print it has a solid psychological hit.
We'll see.
Absolutely true, Ammond. But if those psychological aspects turn into real actions (delayed or canceled orders, etc.) then the hit becomes real. Part of what the index measures is what business people are planning to do (purchases, hirings/layoffs) and what they believe they are seeing happen with their businesses.
I found this helpful; IMS and employment:
http://krugman.blogs.nytimes.com/2008/02/05/how-bad-is-that-ism-report/
One of the Canadian articles, When oil prices hit, fantasyland will become nightmare offers an opportunity to Digg it. People who are concerned about this issue could use this opportunity to get the message out to a wider audience.
The Western provinces of Canada have been ignored and exploited by the east for a long time, so they are now getting their own back. As I said before they should secede and join the US. They have a lot more in common with the Americans and they wouldn't have to put up with the French language and everything. Isn't the current Canadian PM the first one in ages not to come from Quibec?.
As someone from western Canada, I can say that this is not really seen as an option. It is true that many here feel alienated by the federal government, which the eastern provinces (read Ontario and Quebec) seem to have the most power over. However, only a very few people around here would consider leaving and joining the US. We'd much rather go it alone than do that. A big part of the Canadian identity (even in western Canada) is that we are not American.
The current administration in the US has done a lot to discourage talk of separating and joining the US. Even here in western Canada there is a great deal of dissatisfaction with the wars in Afganistan (in which Canada is taking an active role) and the war in Iraq (which we managed to stay out of). Separatism has a long way to go before we even start to tickle the levels needed to win a referendum on the issue.
After 9/11 there were a lot of "United we stand" stickers on vehicles here, with the US and Canadian flags crossed, and a lot of "support our troops" yellow ribbon stickers after the start of the Afganistan mission. Over the last few years the numbers of these has been falling rapidly. It doesn't help that every couple days we hear of more Canadian soldiers killed or maimed by a roadside improvised explosive device.
how about northwest regional alignment with canadian proinces and washington, Oregon,etc.?
I think that would be more acceptable. Trading being screwed by Ottawa for being screwed by Washington would be like trading a Coke for a Pepsi, mostly the same but with a slightly different flavour.
For starters, you mean flavor.
Not in England we don't!
Two nations divided by a common language!
If Western Canada is going to become part of the US, they are going to have to leave that extra "u" in the loo.
I"m sure we could get used to it, and we'd get used to talking about, "aboot" and "a boat" lol.
I believe the suggestion was to join not the US but the Pacific NW states, as in Cascadia. The new nation would need to work out the spellings!
Well, there's over 10 million people in Ontario and nearly 7.7 million in Quebec. The population of Alberta is around 3.3 million, Saskatchewan has less than 1 million and Manitoba has about 1.2 million people. Last time I checked democracy was about 1 person 1 vote. I am not sure why people in Saskatchewan are supposedly alienated, this province does not subsidize the rest of the country. As for Alberta, it is an example why the provincial level should not exist at all. It became a province in 1905 and thinks it is an independent country. Canada's resources should never have been given over to the provincial bureaucracy. This absurd distribution of Canada's wealth has left the country with a schizophrenic economy: the west exports oil and the east imports it from abroad and there is actually more trade across the US border than across provincial borders.
Thats been changed to '1 joule 1 vote'. hadn't you heard?
I thought it was $1Bn one vote. At least in the OECD nations.
The biggest reason for the alienation people feel in Saskatchewan is that the federal government has repeatedly ignored the needs of the province. It has nothing to do with whether we're subsidizing the other provinces or not. When your government doesn't the things you feel you need, you get alienated.
In Saskatchewan this has mostly been in regards to the agricultural sector which is where most of our economy has traditionally been concentrated. We've had farmers drive their tractors to Ottawa in protest over the way it's been handled at the federal level.
With the recent run-up in commodity prices, the economy is diversifying rapidly and more and more people are moving back to Saskatchewan. The population is now supposedly over 1 million.
If they wanted to keep profits growing by screwing workers the American way, they would have to habla Espanol instead.
You know, this is interesting when read in conjunction with your post below calling the Mexican lower class "sore losers" for fighting back against the fake corporate regime there. If the Indians in southern Mexico, who are screwed because they don't act white enough to even be useful to sweatshops, were to secede, you probably would be calling for Canadian troops to join America in the inevitable intervention, a la Afghanistan.
Now I recall the story of Quebec: until the 1950s it was ruled by a right-wing feudal elite in partnership with an ultra-backward Catholic hierarchy and English-speaking businessmen. Then a nationalist movement that crystallized into the Parti Quebecois spurred the impoverished French-speakers to throw out the fossils, secularize, socialize and modernize around renewable energy proceeds. In other words, these "inferior" people waged a class war against traditional values and propertied elites, won and greatly improved their lives. In the end they didn't even secede.
Now in how many ways are you calling for the energy-wasting SUV-flogging Christian-freak Albertans to do the exact opposite of this successful strategy?
Get real weatherman, we have a good thing going up here, I just hope it survives the Harpers and Mulroneys. The US I remember from my youth was almost as good and it is really sad to see what its citizens have allowed it to become. Join the USA? No I think we in the west would actually learn to speak French first, we already know how to spell Quebec and eat what you call French fries, and we call chips, with poutine.
BTW here is something that landed in my lap this morning:
How to create an Angry American
http://www.youtube.com/watch?v=OgfzqulvhlQ
Good video.