"We allow Lehman Brothers to go bankrupt to help Goldman Sachs, and then we bail out AIG to help Goldman Sachs." Congressman Ron Paul
Now contrast that stinging, rational commentary with...
"We have to spend money to keep from going bankrupt." Vice-Presidnet Joe Biden on the Administration's health plan.
This excellent clip of an interview with Ron Paul makes me wonder how the Republicans passed on this guy as their nominee. I shouldn't wonder... the Republicans are finished as a party... maybe for a generation, maybe forever. The Democrats, left unchecked are going to finish off the country.
Perhaps great minds do think alike... I wrote the following in my notes to put in this post:
California politics has won with their version of "in order to save the World, it was necessary to destroy the country".
And then was reading Mish Shedlock's excellent blog today, and he was using the same reference point... How cool is that?
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By my measure, Oil consumption, the U.S. economy continues to contract briskly. I know that this is contradicted by other data points... but for every buy there must be a seller, clearly they disagree and only one can be correct.
Note that the rate of decline in imports of total petroleum products has increased and is now down 7.5% in 2009 from 2008, and total products supplied is down 6.4% in the same period. Since capacity clearly is outpacing demand (inventories are increasing), this is not an effect of "Peak Imports" as much as lack of demand from our ailing industrial sector. To my mind, this is actually a good thing vis a vie the various threats from Peak Oil. If industry were to contract in front of the oil supply's contraction, it would be akin to having a hurricane land at low tide - with less consequent flooding than would be the case at high tide.
Of course, if the RotW expands its industrial consumption during the adjustment period, this positive might be somewhat fleeting... but there it is.
I cannot see any reason that Oil prices would not fall, perhaps substantially, unless OPEC does something drastic.
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The U.S. equity markets have had a tremendous run in the past week. I sold substantially all of my equity positions, and sold covered calls on my precious metals (but only out 1 month since I do want to own them). Call me crazy, paranoid, perma-bear... but I think that there is too much hope and not enough data to support the "green shoots" theory. My bet is the U.S. equity market will be substantially lower than here sometime later in the year and that I would be better served at those prices than at these, especially if Oil should fall hard. If Oil were back in the 30's and Nat Gas in the 2's and 3's, my bet is this fall/winter those equities might have been beaten enough for me to get re-excited again (although I was close to excited about energy equities but then I went and laid down until the feeling passed... I think I will get better prices).
Of course, for every seller, there is a buyer. Only one of us is right.
Mentatt (at) yahoo (dot) com
7 comments:
G:
We are toast.
LD
I prefer 'perma-bear' honestly.
Thanks for the Ron Paul link. I sent it out to everyone I know in hopes of building that support for 2012, if we're lucky enough to have Ron run once more and make it count.
Who knows...
I live in a medium sized city in the midwest (pop 75000).I just don't see anyone driving less and its the same big trucks and suvs. From what I see demand just isn't down. Does anybody else feel the same.
Anon:
Your personal perception has its limits... the empirical data can be found at:
eia.doe.gov
the site is not terribly intuative... so you are going to have to snoop around.
Diesle consumption is down 13% year over year, jet fuel over 14% year over year. Gasoline is nearly unchanged - go figure.
my spellng suffers the faster i tipe!!!
I agree, one has to look at the data as I just don't think I could pick up on a 6% drop in oil consumption just looking at traffic, though I guess the fact that gasoline consumption is barely down while distillates such as diesel are down double digits tells me I should mainly be counting trucks.
I'm not really surprised that distillates are down so much compared to gasoline. I think overall that airlines and trucking operations are much more sensitive to their fuel prices than private car drivers are as fuel costs are a much larger percentage of the formers' budgets than fuel prices are of private individuals' budgets. Airlines in particular have made large cuts in their schedules over the past year or so. (I seem to recall the larger airlines such as United cutting about 20 to 25% of their seat miles last fall after Labor day alone.) Then too I think I recently read of carloading declines of 20 to 25% from the major railroads these past few reporting periods. Still, I wonder how long into the Decline distillates can continue to lead overall petroleum demand destruction, i.e. how much can airlines and shipping absorb the brunt of adjustment to the new oil reality?
As for Ron Paul, the mainstream presidential contenders never saw him as a threat of course, so they let him say anything he wanted to say. If and when he ever becomes a serious contender in the eyes of the masses, however, I hope he takes his personal protection very seriously, as his truthful words expose the escapades of far too many hooligans in this present governmental power structure and I'd expect his neutralization in some unfortunate way.
Still, there is something to be said about the US in that we are still free to publish these kinds of blogs and comments for all to see - for however long that lasts.
Stephen B.
thanks for sharing.......
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Sharon
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