<Oil Megaproject Update (July 2008)The Oil DrumDrumBeat: July 7, 2008>
<DrumBeat: July 5, 2008DrumBeatDrumBeat: July 7, 2008>

232 comments on DrumBeat: July 6, 2008

Comments can no longer be added to this story.

mcgowanmc on July 6, 2008 - 10:17am Permalink | Subthread | Parent | Comments top

I have and do.

Collapse is economizing and I don't see how anyone can read Leanan's
DB everyday and come to a different conclusion.

Us Dirty Phuckin Hippies have been screaming since Reagan's "Trees cause polution" remark and been punished for it.

back when I thought that the PTB were actually looking for a sustainable solution.

Even now bringing up Carter's "Malaise" speech gets shout downs -though the shouting
is alot more quiet.

Watch the Baltic Dry Index. Dryships as proxy. It's having cardiac arrest.

ships are sailing not fully loaded.

And just an aside, am I getting neg ratings for mentioning derivatives and
deflation in the same sentence? Just curious.

James

5
Comments can no longer be added to this story.
River on July 6, 2008 - 10:30am Permalink | Subthread | Parent | Comments top

Mac, if you have access to Shadowstats.com it would be helpfull...I don't and am not going to pay the price for it. Ocassionally I get some Shadowstats info from other economic sights. The last stat I saw for M3 (calculated as it was before suspenion of publication by the Fed) was 18-23%, which would be about a doubling of the supply every 3 years.

As for the neg ratings...to hell with them. The damn rating system that they have created here is for beans. Only nitwits would use the ratings to downgrade a post for content and no one at the site is doing anything about misuse of the ratings. Maybe they are former government employees?

0
Comments can no longer be added to this story.
mcgowanmc on July 6, 2008 - 10:43am Permalink | Subthread | Parent | Comments top

Maybe they are former government employees? BWHAHAHA ;}

"Have you ever wondered why the CPI, GDP and employment numbers run counter to your personal and business experiences? The problem lies in biased and often-manipulated government reporting."-shadowstats

You're right, the Fed is pushing inflation as hard as they can.
Then, after the election Obama's Volker jacks up rates to 10%
to bring the $ stability.

Dr Housing Bubble has taken the lead in predicting IMHO:

"

It must come as no surprise that prices are falling off a cliff both nationwide and in California. The reason California carries a lot of weight is that taken alone, California would be the world’s 8th largest economy. California is also the hub of the mortgage bubble. We earlier reported that prices in the golden state were off by 27 percent but have to update that since the C.A.R. recently came out saying the median price drop now stands at a stunning 35%! Given the $500 billion Option ARM implosion which will be one of the major stories in the second half, we can nearly predict the next few months.

Nationwide prices are down 15.2% which is the steepest drop ever. Even worse than the drop during the Great Depression because of the speed in which prices are correcting. What once seemed a mere impossibility, the forecasts for nationwide drops of 20 to 30 percent almost seem like foregone conclusions. We should be seeing 20 percent this year and if prices accelerate, who really knows. These forecasts were for bottoms in 2009 and 2010 at least if we are to look at futures markets but a 35% drop in California in one year is even shocking bears like myself. The ferocity of the correction is stunning."

http://www.doctorhousingbubble.com/

"Even worse than the drop during the Great Depression"

0
Comments can no longer be added to this story.
BrianT on July 6, 2008 - 11:07am Permalink | Subthread | Parent | Comments top

Mc: His interesting comment is that even a guy like himself who predicted this is still shocked. IMO the same phenomenom will happen with oil supply and prices-it is very clear what is coming yet it will still be shocking to knowledgeable observers as we are all influenced by the MSM which plays into our desire to engage in wishful thinking.

1
Comments can no longer be added to this story.
super390 on July 6, 2008 - 5:16pm Permalink | Subthread | Parent | Comments top

It goes without saying that the home equity loan is going extinct. But how far down are we from 2004, when those loans pumped close to a trillion $ into the US economy? And what was the multiplier effect of each of those borrowed $ in further economic activity? If each loaned $ created $3 more in GNP that year, then won't we soon be seeing a $4 trillion reduction in the (inflation-adjusted) GNP? Is there any place left where we can (foolishly) make up the loss?

0
Comments can no longer be added to this story.
aangel on July 6, 2008 - 7:15pm Permalink | Subthread | Parent | Comments top

The damn rating system that they have created here is for beans.

I'm not sure what to make of it either, but I respect their desire to address the high number of comments.

I'd like us all to allow them some space for experimentation. If this doesn't work, they'll yank it and try something else. No need to be mean to people who are volunteering their time to give you a space to have your say.

-André

4
Comments can no longer be added to this story.
SamuM on July 6, 2008 - 11:18am Permalink | Subthread | Parent | Comments top

Do you mean this:

It doesn't seem to have a very good track record of forecasting recession on its own.

Any other indicators one should be looking at?

Funnily enough, even LEI seems to indicate that US might not be heading into a recession, but in fact recovering (barring financial meltdown of course). LEI appears to have a fairly good track record in predicting recoveries (but not downturns).

Now, I am not an economist/trader/financial analyst, so insert your favorite disclaimer here.

BTW, you get a vote up from me almost very time you write about derivatives deflation in the same paragraph. While the discussion on that is still raging, it does look like monetary deflation being masked by commodity price inflation. The derivative bomb seems in the process of exploding/defusing (dependin on one's POV).

1
Comments can no longer be added to this story.
mcgowanmc on July 6, 2008 - 12:36pm Permalink | Subthread | Parent | Comments top

Yes, of course. Thank you for the pic.

"It doesn't seem to have a very good track record of forecasting recession on its own."

Note flat line until we invade Iraq. The final straw. Price of bunker fuel becomes unmanageable.

"this is turning into a comedy skit."-Dr Housing Bubble

“We shouldn’t, in a sense, be surprised when the data are, are, soft,” Swagel managed to say.

Does the economy need another stimulus package?

“I-it seems, you know, it seems like that’s, that’s enough, uh, enough.”

What might trigger another round of economic stimulus?

“I don’t, I guess I don’t have an answer, I mean, you know, beyond saying we look at all the data and, um — so, my usual line.”

(On the 127 000 jobs lost last month.) 62k + fake BLS Birth/death #'s.

"This is actually becoming a comedy skit. How long can we keep telling Americans the economy is fine without being chased out of Washington with a revolution?".

1
Comments can no longer be added to this story.
TechGuy on July 6, 2008 - 2:25pm Permalink | Subthread | Parent | Comments top

While the discussion on that is still raging, it does look like monetary deflation being masked by commodity price inflation.

The real question is how will gov't reacts to deflation. Obviously if the economy were permitted to run its natural course, it would be deflation, but rarely does this happen.
I believe that the gov't will put out all stops to prevent deflation. If that trigglers hyper-inflation so be it.

Last week Steve Liesman (CNBC economist) said that if he was given a choice of deflation or hyperinflation. He would choose hyperinflation as the lesser of two evils. I personally would prefer deflation. Hyper-inflation always results in deflation in the end, and creates even worse misery. Pay now, or pay much greater later.

http://www.bad-money.com/ (Kevin Philips)
"Wall street has privatized the profits, but socialized the risks". I couldn't put in any better. The financials rack in the profits creating bubbles, but when the bubble pops and profits turn to loses, they go to the Fed and Congress and demand that they pick up the pieces at the taxpayer expense. What a racket!

2
Comments can no longer be added to this story.
super390 on July 6, 2008 - 5:20pm Permalink | Subthread | Parent | Comments top

You call it deflation. Our working-class ancestors called it time to wave red flags and march for revolution. Let's be very careful about bringing back the kind of Darwinist economics that force people onto the streets.

Then again, don't be careful. I'm ready to march.

1
Comments can no longer be added to this story.
john15 on July 6, 2008 - 6:15pm Permalink | Subthread | Parent | Comments top

It doesn't seem to have a very good track record of forecasting recession on its own.

Any other indicators one should be looking at?

off the top of my head. usually decline in home sales, decline in home values and some other indicators like car sales. links are always changing though. here is a quick search of calculated risk.

Recession: CRE and PCE
http://calculatedrisk.blogspot.com/2008/02/recession-cre-and-pce.html

Recession: Mild or Severe?
http://calculatedrisk.blogspot.com/2008/01/recession-mild-or-severe.html

New Home Sales: Cliff Diving
http://calculatedrisk.blogspot.com/2008/01/new-home-sales-cliff-diving.h...

1
Comments can no longer be added to this story.