About Me

Name: m0t0r1zed
Biography
Loading...

Create Your Own Blog Find Other Townhall Blogs

Comments

Blog Roll

 

Simple chart showing why we need lower gas prices

Posted by m0t0r1zed on Tuesday, November 11, 2008 7:27:45 AM
Photobucket 
I took medium term oil price data (dark line) from http://en.wikipedia.org/wiki/Image:Oil_Prices_Medium_Term.jpg (original data from http://octane.nmt.edu/gotech/Marketplace/Prices.aspx) and opinion about gov't economic policy (orange / dashed line) from http://www.sca.isr.umich.edu/ and dumped them on top of each other.  Too lazy to clean up the chart or to get the data into Excel and do statistical analysis / hypothesis testing to determine the degree of correlation. 
 
Judge for yourself.
 
I think opinion of gov't economic policy tracks similarly together with consumer sentiment (more or less). 
 
So ... if you want to get people feeling better about the economy and gov't economic policies, low gas prices might be a good start.  You're not going to get the economy going again unless you improve confidence and get people spending.  You also have to wonder about the psychological effect it had on businesses.
 
Googled around and found this guy had the same idea.
 
This guy tried something similar earlier, but gas prices weren't high enough yet to matter, so he found no correlation.
 
meh. it's neat, so just threw it out there. :p
 
edit: also looked at chart 10 (pos/neg economic news that people hear) added to the above chart (i don't have chart posted). kinda interesting. plus, how do you factor in the major events like 2000 election, recession (march-november 2001), enron, 9-11, afghanistan, iraq, 2004 election, katrina, etc. hmm.
Email ItEmail It | Print ItPrint It | CommentsComments (1) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

FIX. ECONOMY. SIMPLE.

Posted by m0t0r1zed on Thursday, October 16, 2008 1:42:44 AM

We've been focusing too much on just the banking system.  We seem to have forgotten that the early slowdown in the global economy was not due to the housing mess and its ripple effects. 

It was oil.

Oil siphoned off trillions of dollars out of the world economy, businesses, and consumers.  The rapidly booming markets in China and India hit walls because of high oil prices.

Although the oil bubble has burst, it is because the world is tanking - as I kinda expected.  The drag effect of high oil prices has sapped the confidence of consumers and was compounded by the credit nonsense.

However, the credit and financial mess has been addressed - imperfectly perhaps, but nonetheless addressed. 

I think we now need to focus on stimulating confidence in the general economy.  One of the ways is by driving down the price of oil.

Every time confidence in the economy improves, oil speculators spike prices back up - essentially driving confidence back down.  We need to obliterate the price of oil and gas.  Nothing will improve consumer confidence more than to see regular back down to around a buck and being able to fill up our gas tanks without wincing.

To drop oil prices, the following should be done.

1) Release the hounds, er, the strategic reserves.
2) Raise interest rates by 1/4 pt. Low rates aren't doing squat anyway.
3) Pass a drilling bill including the highly symbolic ANWR
4) Begin building nukes
5) Pass legislation limiting some types of oil speculation.
6) Push solar, coal, wind, etc. funding, blah blah blah.

Low oil and gas prices will have a strong, positive ripple effect on the world economy - THAT EVERYBODY CAN UNDERSTAND - and doesn't require friggin psychoanalysis and hand holding of bank lending fears.  Stop mucking around with banking reform.

IT'S DAMN SIMPLE. SPIKE OIL AND GAS DOWN FAST. NO RECESSION. THE END. 

Sheesh, we don't need to create a freaking new world global banking system or neo-socialist order to fix the "crisis of confidence" in the world.  There are additional things that could be done to fix the general economy, but I adhere to the principle of KISS, especially since I am simple and stupid.
 
edit:  I view the concepts of living and non-living very differently from most people. A dumb analogy but ... perhaps the world economy could be likened to a living organism and money as its blood.  Ideally, you want the blood to be flowing to where it is most productive and needed.

For example, you always want blood flowing to the brain, heart, and other vital organs.  When thinking, you want an increased blood supply to the brain.  When exercising, you want increased blood flow to the muscles.

Blood is always flowing and changing as it is directed to different regions.  By this analogy, I would say that during the past spike in oil prices, all of the blood in the world economy was flowing towards our a$$.  Yes, we still had blood flowing to our vital organs, but the brain that conjured new innovations and the muscles that powered industry all had a bit of a dropoff in performance.  Recently, I believe that we had a lot of blood dilating our rear end to no great purpose.

And that is my very technical analysis of the world economy. =P

Email ItEmail It | Print ItPrint It | CommentsComments (0) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

economic dominoes falling?

Posted by m0t0r1zed on Monday, September 15, 2008 8:20:54 AM
 
 
 
 
ever play that game called "duck duck goose" as a kid?
edit: or was it musical chairs that i was thinking of ... lol, i can't remember anymore.
Email ItEmail It | Print ItPrint It | CommentsComments (0) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

Oil falls, Japan's economy shrinks

Posted by m0t0r1zed on Sunday, September 14, 2008 4:06:11 PM
no point in talking about it since i pretty much said everything in my earlier posts. meh, just hope there's a quick turnaround and oil keeps dropping fast.
 
 
 
 
Email ItEmail It | Print ItPrint It | CommentsComments (0) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

Bush releases oil from SPR

Posted by m0t0r1zed on Friday, September 05, 2008 2:48:15 AM
Bush will release 250,000 barrels of oil due to a request from Citgo due to hurricane Gustav. 
 
http://www.lloyds.com/dj/DowJonesArticle.aspx?id=403053
 
Hmm, isn't Citgo owned by Venezeula?  And Pelosi took a swing at Bush over the release.  Whateva.
 
 
Email ItEmail It | Print ItPrint It | CommentsComments (0) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

India's economy

Posted by m0t0r1zed on Saturday, July 05, 2008 12:15:25 PM
oil is hitting india hard.  not an economist (heheh, i repeat that a lot), but u would think that demand in rapidly expanding / developing economies is more elastic than in established nations, so the reason being touted for the high price of oil (china and india) should cut both ways. the high price of oil should put a hard brake on their growth.  india imports 70% of its oil, and its oil and fertilizer subsidies are costing them 10% of their GDP.

excerpt from businessweek article:
In the past month, India has joined the list of the wounded. The country is reeling from 11.4% inflation, large government deficits, and rising interest rates. Foreign investment is fleeing, the rupee is falling, and the stock market is down over 40% from the year's highs. Most economic forecasts expect growth to slow to 7%—a big drop for a country that needs to accelerate growth, not reduce it.

sauce: India's Economy Hits the Wall
 
heh, 7% growth doesn't sound that bad, tho i guess in this case it's relative.
 
as long as china and india continue to grow at a decent clip, i wonder if that will provide more psychological support for pushing prices even higher? 
 
i don't think drilling will help prices unless it creates a stampede by luck of timing. just guessing it might cause a short drop, but then speculators/investors/zombie pandas will rationalize that any real oil coming out from new drilling will take years or decades and push prices back up again. still, it would add to the mental stress of oil speculators / investors worried about when to jump out, heheh, and reduce the threshold needed to pop the bubble.
 
i really don't see the bubble popping until some major economies start tanking - or enough psychological stressors accumulate to scare off investors (approve drilling, pass regulations to tighten speculation, fed calls a meeting to do a magical dance and offering to the god of interest rates, Bush mentions opening up the SPR casually in a conversation while kissing Ahmadinejad tenderly and sweetly, demand for oil drops, china and india reduce subsidies further, OPEC does something or other or not or something, etc.). dunno. blah blah blah. why am i still even blogging anymore? ('''\(o,...,O)/''')  =^.^=  /\/\(';::;')/\/\
Tags: oil   India  
Email ItEmail It | Print ItPrint It | CommentsComments (0) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

The Mother of All Bubbles!

Posted by m0t0r1zed on Thursday, July 03, 2008 10:29:15 AM
just wanted to say that phrase for no good reason. ^_^

coal and steel took a dive yesterday. wonder how that will pan out? recover and drop again? keep rising? interesting.

article about the rise in commodities prices from the monetary and currency pov.  written in the distant past of Jun 26 (less than a week ago) during the halcyon days of when oil was under $140. :p
When Central Bankers Clash, Stock Markets can Crash
 
also, i found this article interesting - especially the chart. for mentally challenged people, like myself, pictures help - and it has pretty colors!
 
 
Email ItEmail It | Print ItPrint It | CommentsComments (0) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

merrily over the cliff we go, tra la la

Posted by m0t0r1zed on Wednesday, July 02, 2008 9:09:01 AM
 
CNN story - counterargument that it is supply and demand and not speculation based on IEA report
Speculation not to blame for oil - report
 
just some questions about the CNN article - some excerpts from it.
 
Since 2003, the volume of investment funds in commodity markets - especially oil - rose from about $15 billion to $260 billion, according to the International Energy Agency (IEA), which issued the report.
 
not important? huh?
 
this is the counterargument.

The IEA argues that if speculation drives prices too high, the market would be unbalanced. Either demand would fall off, or stockpiles would rise. Neither has happened. In fact, global demand for oil products has surpassed supply in every quarter since the fourth quarter of 2006, according to the U.S. Energy Information Administration. Fast-growing economies like China and India are consuming more and more oil. Meanwhile, it's difficult for oil-producing countries to quickly ramp up output. The IEA also made the argument that many commodities - such as coal and rice - are showing similar price increases, even those without the possibility of speculation.

just thinking it through. dunno, maybe my reasoning is flawed. whatever.
1 - it's hard to adjust oil/energy usage quickly - lag time. also there have been signs of demand drop off in unnecessary things.
2 - oil isn't a final product. it's often the starting point for manufacturing other products. instead of demand drop off, you will just get cost added to the product or reductions elsewhere (no peanuts from airlines :p).
3 - evidence for this should be increased prices and inflation across the board (since energy costs affect almost everything) - which is what seems to be happening.
4 - oil isn't a free market system. nationalization, price supports, cartels, flying monkeys, etc. skew supply and demand.
5 - oh, also coal is going up because of high oil prices.
 
i could be wrong. seems to me people can be divided up into 1) people that know (or think they know) what is going on, 2) people that really don't know so flutter about (like me, i'm a pretty butterfly!), 3) people that know, but lie because they have self-interest at stake, 4) people that don't know, so by default support the side in alignment with their interests / ideology.
 
my hunch has been that it's speculators (even tho i like the whole free market thing). but i'm not an economist, and i don't have the time to teach myself about the oil industry, speculation, commodities markets, neat ways to game the system, russian energy mafia, blah blah blah.  to give an opinion that i was fairly secure about, i'd have to invest a lot more time.
 
so whatever. dun care no more. just following the story to see what happens and if my guesses were wrong, where my thinking went astray. and why i am idjiot. i suggested some simple ideas to implement for a quick drop in oil prices. but dun matter.
Email ItEmail It | Print ItPrint It | CommentsComments (2) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

An important message from Fred Flintstone about the oil crisis

Posted by m0t0r1zed on Saturday, June 28, 2008 12:11:03 AM
My fellow citizens of Bedrock,

I blame the current oil mess on the dinosaurs and their irresistably yummy, oily goodness cooked deep within the heart of the earth.
 
Thank you.
 
(Oh, btw in addition to coal liquefaction, a fellow blogger says that Raytheon has developed RF technology for extracting oil from oil shale for as low as $10/barrel.
http://theoilpatchplug.blogtownhall.com/2008/06/26/we_can_be_energy_independent_,_really_yes_we_can.thtml

So why is oil at $140 again?  YABBA DABBA DOO!!!)
Email ItEmail It | Print ItPrint It | CommentsComments (0) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

hmm so i'm sure china is happy

Posted by m0t0r1zed on Friday, June 27, 2008 10:39:02 PM
LOL, financial speculation is funny.  I'm obviously not an expert at it.  No formal training in econ aside from basic macro micro nonsense.  Best I can guess at is looking at big overall patterns. Then again, I'm not an expert in housing or the tech sector, and it was pretty obvious to an untrained layman, like myself, that those were bubbles.  Same thing with oil.  Lots of games being played under the surface ... ah well.  Thousands of leprechauns spending lifetimes all running after giant pots of gold.
 
Anyhoo, just wondering how China is enjoying this little ride.  The dollar's weak, but China lives and dies by exports so it artificially has to keep its currency low to match the dollar.  Oil is bad enough in the US, so you wonder how China is dealing with it. Hmm, but they subsidize oil, so the braking effect on demand isn't as strong in China.  Kind of a double whammy.
 
Also, you wonder how overall demand for their exports will fare with high energy costs eating up disposable income and when inflation starts to go on the march .... A global slowdown isn't going to help.
 
China's economy is gonna grow, but less due to high oil prices
Interesting - high oil leading to rise in coal prices and coal shortages in China and plants idling turbines
 
However they are still exporting coal - though decreasing ... less by 4.1%
 
And gearing up for coal-to-oil conversion plants - which makes environmentalists none too happy (Environmental News Network)
 
article on China's determined efforts on acquiring oil - back in the good 'ol days of $3 gas
 
Interesting quote from Tech Review
Since China has very little in the way of oil and gas reserves, its future depends on coal. With 13 percent of the world's proven reserves, China has enough coal to sustain its economic growth for a century or more.
And first paragraph from BBC News article
Coal built China - and fuels its relentless growth today. Eighty per cent of China's electricity comes from coal, and there are plans for 544 new coal-fired power stations to meet an insatiable demand for energy
 
Last two articles focus more on clean coal and greenhouse emissions, but let's face it, the Chinese gov't place environment second after economic growth.  Oil speculators keep talking up China, but it seems that their economy is geared around coal. 
 
Ah well, it's not like I know anything in depth about this, but it's interesting to look at just out of curiosity and see how things eventually turn out.
 
Edit: I'm looking around for cost per barrel for coal liquefaction. The sauce that wiki uses is a 2002 article from Diesel Fuel News. Have no clue if they're reliable or not.  They say break even for China is oil above $20 per barrel, and $33-$35 for the US.  LMAO.  This can't be right!!!

Another key factor driving the project is China's interest in development strategic yet fairly cost-competitive alternatives to crude oil imports. While Shenhua officials believe the new project will provide a decent return on investment (close to 15%), this depends upon crude oil prices staying above $20/barrel.

In contrast, a similar project in the U.S. -- if ever attempted strictly on commercial terms -- would require long-term world crude prices to hover around $33 to $35/barrel, HTI's Lee explains. Such levels haven't been sustained for any lengthy period in world history.

 
Email ItEmail It | Print ItPrint It | CommentsComments (0) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

Funny article from the Economist about short sellers

Posted by m0t0r1zed on Friday, June 27, 2008 9:27:13 PM
Funny how if we aren't mad at speculators, we're mad at short sellers.  I don't mind people hedging against the dollar or the stock market or inflation or whatever new contrivance or formulaic potion some new financial guru has concocted to make zillions of dollars in perpetuity.  Just do it without screwing up oil and gas prices and world economies.  People go to war over oil.  So scram. Go speculate elsewhere.

http://www.economist.com/displaystory.cfm?story_id=11591349
 
 
Email ItEmail It | Print ItPrint It | CommentsComments (3) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

fed ex converting to horseback and pterodactyl riders

Posted by m0t0r1zed on Friday, June 27, 2008 8:42:33 AM
i can't stand it. ever the glutton for punishment, i read this article about speculators and supply and demand ... latimes. urgh. ima just gonna take my ball and glove, go home, and not play this game anymore.

http://www.latimes.com/business/la-fi-lazarus25-2008jun25,0,2383398.column
 
it's hard for industries to wave their magical wands and sprout nuclear power plants and have factories run on wishful thinking. and fed ex will need some time to convert their fleet to horseback and pterodactyl riders.

so, oil prices will go up and up and up and up and up and up and up and up and up to 2 bazillion dollars per barrel... until u put so many fat speculators sitting on a donkey that you break its back and the world goes into recession.

of course, this is all just supply and demand, so oil won't drop in price since this is the sparkly new reality.  yeah, right. watch what happens to oil prices when the world economy goes under. oh wait, closed down factories and jobless people don't use as much oil. oh, you're right! so it is supply and demand after all! >.<
 
edit: correction. oil prices might plummet as speculators jump out just before we all go over the economic cliff. huzzah.
Email ItEmail It | Print ItPrint It | CommentsComments (0) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

Death by incrementalism - a love story

Posted by m0t0r1zed on Thursday, June 26, 2008 1:16:49 PM

Death by incrementalism. Psychology will keep moving the prices back up, regardless of all of the real changes that have occurred - increased production from the Saudis, a sustained drop in US demand, lifting of gas subsidies in growing economies, changes in regulation on oil speculation, stabilization of the dollar, shifts in auto production and purchases, etc.

Doesn't matter. All of it has been too incremental, so psychologically, the speculators can mentally absorb the shock and find some rationale to justify jacking prices back up.  However, they do seem to be afraid of the $140 mark (so far) but also seem to believe that they can psychologically sustain prices above $130.

LOL, some estimate that this is around $40 higher than real supply and demand (that's why it's a bubble, duh).  Since everybody has pulled a Pontius Pilate and washed their hands of the matter, it looks like the only thing that will knock oil down is a recession.

Great job! Terrific leadership! You know, the usefulness of the guillotine might be underrated.

 
It's pretty simple.  Eventually, the drag on world economies from oil prices and inflation will pull other countries down into recessions and eventually, the US along with it.  Nothing complicated - even an idiot like myself can see this is happening right now (it's a shame since our economy did such a brave job in fighting past the credit and housing fiascos despite rising gas costs and constant media drumbeats of doom).  Anyhoo, mild to severe stagflation will kick in, oil demand will drop, the oil bubble will pop, and then everyone will cross their fingers and hope that the world economy will recover sooner, rather than later.
 
http://biz.yahoo.com/ap/080626/economy.html?.v=14
 
I was one of the few people that didn't buy into the doom and gloom nonsense when it was the hip and trendy craze, and I believed that the economy could avoid a recession.  I was right, but now oil has gone beyond ridiculous.  
 
The situation is really, really simple.  Oil speculators won't back off of current prices until we get a recession.
 
Why?  The psychology of incrementalism.  Look at the list of things that have changed ... and oil prices still won't move anywhere but up.  Even a surprise rate hike yesterday might have gotten the ball rolling a little with the dollar and all that, but oil probably would have eventually crept back up anyway. *sigh*
 
But it's just a guess. I could be wrong. Anyhoo, I'm not gonna bother with oil anymore since nobody will implement the necessary measures for both short-term and long-term solutions.
 
This has been about as much fun as watching a bunch of idiots drive your car over a cliff at 5 mph from 1 mile out.  You're jogging alongside of them, telling them what to do, but they're all like, oh noes!!! ima gonna crash!!! i hope the recessionary fall isn't too steep or protracted!!! and have their eyes covered with both hands. Like I said, the guillotine is highly underrated.  :P
 
(and I now understand why beheadings were such festive occasions)
 
P.S. oh yeah, about the SCOTUS gun rights thing.  Well duh, I'm surprised it was even that close.  However, it looks like strict constructionists barely eked out a win.  I wonder if the Constitution's days are numbered.  A day may come when it will just be a quaint document that looks pretty in a glass case - and nothing more.  Oh well, we're all gonna turn into cybernetic energy beings in the far future anyway, so I guess it doesn't matter. -_-
 
 
Email ItEmail It | Print ItPrint It | CommentsComments (5) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

Hope Fed raises rates - tho prolly won't happen

Posted by m0t0r1zed on Wednesday, June 25, 2008 11:37:38 AM
Oil prices just got knocked down by higher inventories
http://biz.yahoo.com/ap/080625/oil_prices.html
 
Here's hoping that the Fed surprises everyone and raises interest rates today (although I doubt it) and pushes oil down even further while strengthening the dollar.  Nothing like a good 1-2 punch combo.  Congress is gonna push through a huge housing bailout past Bush's veto anyway (or agree on a compromise), so why not raise the rates?  If oil prices can get back under control, and Congress can pass measures to reduce oil speculation, then a potential global recession could be averted.
 
Heck, it would be awesome if news of higher oil inventories, a fed rate hike, oil speculation regulation passage, Bush opening up some of the SPR, and Congressional passage of drilling laws happened all at once - lol.  Pure fantasy, of course.
 
(of course, hiking interest rates will have a much more complex effect overall, but i think taming oil is the most important problem right now)
Email ItEmail It | Print ItPrint It | CommentsComments (0) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive

Oil oil oil

Posted by m0t0r1zed on Wednesday, June 18, 2008 12:26:11 AM
From USA Today ...
"The Commodity Futures Trading Commission (CFTC) will now require trades placed on the ICE Futures Europe, an electronic exchange based in London, to adhere to the same position limits and reporting standards that apply in the USA. The more stringent rules apply to the "West Texas Intermediary crude oil contract, which is linked to the New York Mercantile Exchange (Nymex) crude oil contract. The new rules, which must be met for ICE traders to access U.S. markets, take effect in 120 days.

"This change will, in effect, undo some of the regulatory differences between the CFTC and the Financial Services Authority, which oversees British trading. It will enable the CFTC to gather more detailed overseas trading information — especially on large positions — on a more frequent basis.

"The CFTC will now be able to observe a trader's full position in both U.S. and foreign futures markets to "ensure that traders are not gaming one market to influence the other," noted CFTC's acting Chairman Walter Lukken. "

 
Also, I listened to Rush Limbaugh a few days ago defending speculators.  He is missing the point.  Of course, speculators are necessary and serve a purpose.  However, rampant speculation or price manipulation is the issue here.  The recent, rapid spike in oil prices is not due to supply and demand.  Demand has not increased anywhere near that much in such a short time span.  It is speculation and a massive shift of investors into the oil market and other commodities trying to get better returns.  The problem is, they're going to cripple the world economy and destabilize gov'ts.  It's time to tell them to GTFO.  Go into corn or gold or whatever ... just stay the hell away from oil.
 
I'm not one of those quick to jump on the latest "gloom and doom" bandwagon *cough cough* Glenn Beck.  I never panicked over the credit or housing crises nor was I quick to proclaim a recession or depression.  I prefer to take my time in looking at a problem.
 
Sadly, I think the oil bubble will cause a world-wide recession unless it is fixed.  I don't really see a way around it.  Also, all long-term oil supplies near the US better be secured through drilling / exploration to avoid future complications and potential conflicts that may arise.  Other nations, such as China, may be a tad more ruthless and direct about their methods of oil acquistion.  Furthermore, we better have an alternative energy source ready to replace oil in the coming decades before it becomes an issue of national defense.
 
Oh well, just mindless thoughts.
Tags: ctfc   oil  
Email ItEmail It | Print ItPrint It | CommentsComments (2) | TrackbacksTrackbacks (0) | Flag as offensiveFlag as Offensive
« Previous12Next »