The Housing Bubble

I can think of interesting ways to use the handcuffs.

And liberal democrats overtaxed the cigarettes causing the black market that killed the non-breather.

Republicans and Democrats - both water carriers for Wall Street and the corporations - shipped our manufacturing jobs overseas and ruthless cut “headcount” to pad their stock options, pushing millions into a marginal existence. There, fixed it for you.

+1
States Spend Almost Four Times More Per Capita on Incarcerating Prisoners Than Educating Students, Studies Say

Leave the murders and rapists on the street so we can have more gender study students!!!

murderers

Rectal feeding for everyone!

Can’t trust all that local control. Must give over authority to DC, first.

Rectal feeding for everyone!

I feel that the six years of Obama has been rectal feeding for white, straight, Christian males.

dannyboy is back

Yes. BTW, do you think that Michelle Obama will adopt rectal feedings as a way to force school children to “eat” her horrible school lunches?

“dannyboy is back”

It’s another sign the next leg down in housing is imminent.

And here’s yet another sign of the down leg ahead and not just housing.

LONDON (Reuters) - BP (BP.L) will cut thousands of jobs across its global oil and gas business by the end of next year in a $1 billion (637.2 million pounds) restructuring programme announced on Wednesday following steep falls in oil prices.

The British oil major said it was also considering deeper cuts to its 2015 budget beyond the $1-$2 billion reduction already announced in October, as a result of the oil slump.

“Given the recent position taken by OPEC and with oil prices where they are today, we will continue to review this further,” BP head of upstream Lamar McKay said in a presentation during an investor day in London.

The North Sea is well past its prime, both GB and Norway would be quite hurt by low oil prices and will be closing wells forever. Brazil will simply not be able to develop its new discoveries and as you said Canada will not be able to exploit its oil sands. That said that is why oil prices at these levels are not sustainable.

“dannyboy is back”

That’s a shame.

New Mexico didn’t even make this list.

The states where gasoline will drop below $2
By MarketWatch
Published: Dec 10, 2014 5:00 a.m. ET
Getty Images
Slide 1 of 9

Experts have already begun to mention the chance that the average price for a gallon of regular gas will drop below $2 in some parts of the U.S. There are several states where this is highly likely. As a matter of fact, the prices in these eight states could drop below $2 as early are the start of next year:
…

New Mexico didn’t even make this list

So? Down to 2.15 right now at my Costco: http://www.albuquerquegasprices.com/

“So?”

So it appears the MaretWatch peops may underestimate the number of states where gasoline is headed to below $2/gal.

So it appears the MaretWatch peops may underestimate the number of states where gasoline is headed to below $2/gal.

Why, do you make this leaps of logic? Why would the price in one city of New Mexico mean that the estimate for the entire state of New Mexico is wrong?

“Why would the price in one city of New Mexico mean that the estimate for the entire state of New Mexico is wrong?”

Because like housing, there is a high degree of spatial-temporal correlation between gasoline prices.

But I never said ‘the estimate for the entire state of New Mexico’ is wrong. As usual, you make sh!t up that I didn’t say to twist the meaning of my post. But no worries…I look forward to you pimping the Rasmussen poll predictions for a Republican win in 2016 starting any day now.

Wait…is there skiing in Atlanta, in addition to Applebee’s?

Yep. Down hill 6 months a year. Largest snow capped mountains in the east!

Gotta love HotLanta downhill skiing.

It is kind of funny that the liberal democrats sacrificed their 60 vote senate and their overwhelming house majority for a modified version of Romney care. It is basically a return to very restrictive HMOs of the 1980s. However, they were free market and not government imposed.

Are you referring to accountable care organizations? If so, that’s a pretty small part of the law.

1976. Almost 40 creaking years ago and it’s still the same as then. Nothing changes it seems.

Thanks for the link.

The situation is changing. It has already gone into reverse. They’re a couple of miracles short these days.

The situation is changing, China is on its way to being the biggest user of oil in the world. 7% growth per year will do that.

China will sell over twenty million cars and Suvs this year and most of them will be new additions to their fleet and not replacements and their oil consumption will not go up?

From Wikipedia:

China’s automobile industry had Soviet origins mainly (plants and licensed auto design were founded in 1950s with the help of USSR) and had small volume for the first 30 years of the republic, not exceeding 100-200 thousands per year. It has developed rapidly since the early 1990s. China’s annual automobile production capacity first exceeded one million in 1992. By 2000, China was producing over two million vehicles. After China’s entry into the World Trade Organization (WTO) in 2001, the development of the automobile market further accelerated. Between 2002 and 2007, China’s national automobile market grew by an average 21 percent, or one million vehicles year-on-year. In 2006, China’s vehicle production capacity successively exceeded six, then seven million, and in 2007, China produced over eight million automobiles.[7] In 2009, China produced 13.79 million automobiles, of which 8 million were passenger cars and 3.41 million were commercial vehicles and surpassed the United States as the world’s largest automobile producer by volume. In 2010, both sales and production topped 18 million units, with 13.76 million passenger cars delivered, in each case the largest by any nation in history.[8]

The number of registered cars, buses, vans, and trucks on the road in China reached 62 million in 2009, and is expected to exceed 200 million by 2020.[9]

It has already gone into reverse.

Their oil consumption is already falling. They are shutting coal mines and steel mills. They are borrowing Trillions externally. They are drawing down their currency reserves. They have jailed or executed 100,000 people for corruption. 50 million condos in the city that are purely speculation (no one lives in them) and prices are going down. It’s just getting started.

Consider that lies and deception are part of their culture. It is not wrong to lie and trick and steal if you come out ahead. Their official report on “growth” is not to be believed.

Funny that all the big U.S. and European brokerage firms believe in them enough to actually put their money in their stock markets and estimate their rate of growth very close to the official estimates.

In its stock markets. One China, multiple stock markets.

I’m not paid to believe anything in particular. I’m only mindful of holes in the road. You do and believe as you please.

From today’s China Daily:

BRUSSELS - The current Chinese economic slowdown is only natural and, given the existence of strong growth factors, not worrying, said European analysts.

They also expressed confidence that the world’s second largest economy will see steady and healthy growth in 2015, which will be based more on consumption and less on investment.

No need to set a specific growth target

Amid speculations that China will adjust its growth target further down to 7 percent or may even not set a mark at all, Daniel Gros, director of the Center for European Policy Studies, said there is no necessity to set a specific growth target.

“The Chinese government should refrain from giving a number for GDP growth next year, because the Chinese economy is in transition, when it is very difficult to predict growth,” Gros told Xinhua.

“Moreover, the government itself has acknowledged that the quality of growth is now more important than the quantity. This is why the priority should now be targets in terms of the environment,” he added.

China does not need a specific growth target the way it did in the past, said Fredrik Erixon, director of the European Center for International Political Economy.

“China should have advanced growth estimates, which of course is necessary for budgetary planning, but it should try to get away from the perception that the merits of economic policy stand or fall with hitting a precise target,” Erixon told Xinhua in a recent interview.

With economic globalization, Erixon noted, it is necessary to be less strict about a growth target but more attentive to structural problems and economic imbalances.

A natural and structural slowdown

Looking back to the Chinese economy in 2014, the two European experts maintained that the Chinese economy is experiencing a natural and structural slowdown.

“The Chinese economy is experiencing a natural reduction in its growth rate since the low-hanging fruits in terms of bringing the excess rural population to the cities have been harvested already, ” said Gros.

“However, the situation is not worrying in the medium run since there are still strong growth factors,” said Gros.

He noted that the quality of youth education is making more innovation and indigenous high-tech production possible. Moreover, infrastructure still needs to be improved in the western part of the country.

Yet he also stressed that there is still an excessive dependency on construction and real estate. “These sectors are important, but should not be kept alive through low interest rates,” he said.

“construction and real estate. These sectors are important, but should not be kept alive through low interest rates…”

So, let it stop. We’re interested in seeing what happens. Collapsing global energy and materials prices are just the prelude, right?

I honestly do not think there is the physical glut that is being alleged. Obama took a play out of the Reagan play book and is driving down oil prices to hurt Russia (Soviet Union under Reagan), however I think he is doing it more with paper barrels on the futures market than with actual production. I suspect an executive order authorizes the selling of futures. If either Russia or Iran cut-off real oil supplies from Saudi Arabia the U.S. taxpayers will be holding the bag.

No glut around these parts.

U.S. Oil Reserves Hit 38-Year High
Fracking has unleashed a torrent of oil and natural gas, the Energy Information Administration says.
A Consol Energy Horizontal Gas Drilling Rig explores the Marcellus Shale April 13, 2012, outside Waynesburg, Pa.
By Alan Neuhauser Dec. 4, 2014 | 1:10 p.m. EST

We’re swimming in oil and gas.

U.S. oil and natural gas reserves soared to new heights in 2013, unleashed by unconventional drilling methods that extracted more shale oil and gas than analysts previously expected, according to an Energy Information Administration announcement Wednesday. The increase has helped force oil prices to their lowest point in four years.

Oil production last year was at its highest in 31 years, the EIA said, driven by controversial hydraulic fracturing – or fracking – and horizontal drilling methods that have opened huge oil and gas deposits in the Northeast, Mid-Atlantic, Midwest and Southwest.
…

interesting. Glad you’re back ADan

I thought you said yesterday that Sarah Palin had been vindicated for saying we needed to drill more oil, because we finally did so and look at the results. Now you’re saying it’s all fake paper barrels. Have we had a fracking boom or not?

The fracking boom is real but it is what was keeping oil from going up despite increased demand. Supply has not increased sufficiently to cause a real glut, but after the feeble sanctions did nothing to deter Putin, Obama seems to have gone after the oil price just like Reagan did to bring down the Soviet Union. Merkel seems to have let the cat out of the bag a few weeks ago when she cautioned against destroying Russia’s economy.

No glut around these parts.

We have about 11 years of reserves compared to our production and that is a glut, we are swimming in oil? Hardly. PEC knows that our production cannot be sustained unless we open up the coasts and ANWR to drilling and the Democrats will never let that happen. There was no need to prevent an increase in oil production, this is solely political and not economically driven. Of course, when we cut-off Japan in 1941 from oil and iron ore, they did not end their rape of China, they attacked. Will Iran respond by ending its nuclear program and its support of Assad or will it attack? Saudi Arabia will soon find out.

So Palin was wrong about fracking leading to gas prices going down. She is not vindicated. Fracking has somewhat helped but not led to lower prices.

Sarah Palin never said fracking alone could create a glut that would drive gasoline to 2.50. She always wanted drilling in ANWR and off the coasts. She was right that a glut could cause gasoline prices to drop to 2.50. And a paper glut has caused them to drop to those levels. Unfortunately, a paper glut unlike a physical does not last. According to the EIA’s own numbers released about 23 minutes ago, we have a whooping 4% more oil in storage than last year. But nice try putting words in both Sarah Palin and my mouth that we did not say.

“Obama seems to have gone after the oil price just like Reagan did to bring down the Soviet Union…”

Wow.

I suppose we should thank Obama for relenting on bringing down the USA for all these years in order to focus on destroying Russia with his oil price lever.

“Obama seems to have gone after the oil price just like Reagan did to bring down the Soviet Union…”

A crazy conspiracy theory explains the collapse in oil prices. Dwindling demand in China and the end of QE3 obviously have nothing to do with it.

This is hardly a chart of diminishing demand in the world. Both Russia and Iran have publicly claimed in the last few days that it is economic war as I claimed yesterday:

https://www.iea.org/oilmarketreport/omrpublic/and

Next up, Canada and Australia declare the collapse of the iron ore market is an act of war.

100 yrs from now they will be thanking us for fracking and the contamination of our precious ground water.

Apples and oranges, there is a real glut in iron ore, not about a one percent surplus, a 30 to 40% surplus which justifies a sharp fall. With oil we are talking about a one million barrel surplus in around a ninety million barrel market.

I suppose we should thank Obama for relenting on bringing down the USA for all these years in order to focus on destroying Russia with his oil price lever.

The Republicans should also thank Obama for not announcing this policy six months ago and then driving the cost of down to 50 cents per gallon on election day last month.

You think he did not try to get the collapse before the election? Sorry when there is not a real glut it is hard to force the prices down, particularly when ISIS was on the move removing oil production from the market, he did not see the JV squad doing that.

Good one Mike. We will be thankful in two years that he used his god-like powers now to set in motion the gristmill that will bring on another tsunami of stimulus and borrowing to fatten the banks.

He may have to use his powers soon, judging by the stock market, they are not very happy with the manipulation of oil lower. Probably they know it will only result in even higher prices in the near future due to his attempt to distort the market with paper barrels.

“there is a real glut in iron ore…”

It’s not apples and oranges, rather chickens and eggs. If you are not going to need all that steel you predicted, because you are not going to build all those buildings, cars, bridges, appliances, ships that you predicted, you are not going to be using all that coal and oil that you predicted.

The deal here is that you are not going to repay those loans you took out to produce all those things. You are also not going to keep all those workers on the payroll, so they also will not repay their loans either. Capital did not build this monster, credit did.

A credit based economy must grow to survive, as long as there is any interest due whatsoever. The math is easy. It must grow or die. Now it’s in contraction. It doesn’t matter if it has only contracted 1%. The loss of growth is the death knell. China’s borrowing binge saved the world for the last six years. Who is going to save the world now? Is there an even bigger giant with an even larger taste for debt that we don’t know about?

Either the idiopaths in charge have a huge greased pig prepared in advance for this or it’s a big hole in the road.

It doesn’t matter if it has only contracted 1%.

I never said oil consumption contracted 1%, oil consumption actually increased, oil production might be 1% over present consumption but normally that just results in a stock build which with a surplus that size during rising consumption never results in a sharp drop. No this is a manipulated market, the Russians know it, the Iranians know it and the Chinese know it and are buying oil like crazy since they know oil will soon be going back up since the fall is artificial. Since the real stock build is in China and they want the oil for the long term it should not be impacting the market. Obama is willing to damage our economy to punish Putin and our stock market knows it.

Oil consumption in China has contracted. This is reported clearly. Oil imports are not contracted, they are going into storage as you admit. I suspect your inside track on what the Chinese “know”. Let’s watch what they do. If they build inventory in storage, this is a short game. Storage capacity does not come on line easily. I watched that movie in the ’70s working for Exxon. When it fills, the flow shifts abruptly, the kind of thing futures contracts must consider. The futures contracts have told us what the analysis is: Consumption is in contraction. The growth cycle is past peak.

Sorry, your respect for Obama is incredible. He is a raft in the political wind, without a keel. There is nothing I can see that he has done to bring down the price of oil. He has tried to kill coal and the oil sands pipeline, which should have the opposite effect.

Artificial? Punish Putin? Oh please. A few years ago he was kissing the Russian’s posterior. He is like a sophomoric girl, and dangerous, but not the master of the universe.

“PEC knows that our production cannot be sustained unless we open up the coasts and ANWR to drilling and the Democrats will never let that happen.”

Likewise Republicans will never support torture methods that violate the Geneva Convention.

P.S. “The Coasts” are already open to drilling. Have you ever visited Santa Barbara?

“…, and who had an ex-girlfriend leave them for a black dude.”

Actually it’s usually the anti-authority types with the Daddy issues.

6 foot 5 inches, 300 pounds and charging even after being shot is far from brutality, except to the cop.

Meant that as a reply to this comment:

“badge lickers and uniform fetishists, with daddy issues, and who had an ex-girlfriend leave them for a black dude”

“coal roller”

What powers your electronics and electric cars? Coal.

I love my coal roller. I put a smoke switch in it just to fog Prius drivers on occasion.

http://youtu.be/ZIAk4pQ47sU

North American Palladium (PAL) looks like a bargain right now.

Yeah, climate deniers know that 2014, verified by thousands of surface temperature measurements, will the hottest year on record. To counter that the deniers are clinging to, and cherry picking, remote satellite data that isn’t calibrated to surface readings.

Imagine a steak on the grill. You can use a meat thermometer to get the cooking temperature, or you can use a satellite infrared sensor 200 miles above you to guess the temperature inside the steak. Hmm, which is more accurate?

as reported by real journalists at the new york times

http://www.nytimes.com/2014/10/31/us/why-republicans-keep-telling-everyone-theyre-not-scientists.html

NASA has been “adjusting” surface data for years and I have been pointing out their adjustments on this blog and predicted that they would make 2014 a record. It does not matter which one is theoretically more accurate, the change should be consistent between the two data sets, and was for decades. Somehow last fall after Obama made global warming his major issue for the 2014 election, they begin to diverge in a major way, if you think that is a coincidence I have a bridge to sell you in Brooklyn.

“You can use a meat thermometer…”

Not a good example if you are only interested in surface measurements.

If you’ve ever tried to calibrate a temperature sensor of any type to better that 0.1 degree accuracy (I’ve been doing this for my entire career) you’d know how useless a ground point source measurement is in providing information about the total embodied kinetic energy in even a small controlled vessel, much less a large regional atmosphere.

There are about a dozen separate measurement effects must take into account to get even close, and the climate priests ignore them all at best, fudge them at worst. I would go into them further but it’s not worth the effort arguing with a technical illiterate who wants to insult anyone who disagrees with his simpleton politically-driven conclusions of the moment.

I am pretty sure the politicians who meet to discuss how to canonize the script and control the mob never had any experience trying to calibrate anything but their political career.

I believe they do have practical experience with propagation of error though.

I would go into them further but it’s not worth the effort arguing with a technical illiterate who wants to insult anyone who disagrees with his simpleton politically-driven conclusions of the moment.

Now, who is insulting whom?

“I would explain how all but the petroleum-industry-sponsored part of science is wrong, but I just don’t have the time to waste on you technical illiterate who want to insult anyone who disagrees with them.”

Soccer has its own brain injury problem, hitting the ball with one’s head without a helmet is not smart.