This Recession, It's Just Beginning

[kentuck]

Read this entire article. It's a very good summation of all the problems within our economy. It's not a very optimistic picture.
===========================

http://www.washingtonpost.com/wp-dyn/content/article/2008/06/26/AR2008062604030.html?nav=hcmodule

<snip>
So much for that second-half rebound.

Truth be told, that was always more of a wish than a serious forecast, happy talk from the Fed and Wall Street desperate to get things back to normal.

It ain't gonna happen. Not this summer. Not this fall. Not even next winter.

This thing's going down, fast and hard. Corporate bankruptcies, bond defaults, bank failures, hedge fund meltdowns and 6 percent unemployment. We're caught in one of those vicious, downward spirals that, once it gets going, is very hard to pull out of.

Only this will be a different kind of recession -- a recession with an overlay of inflation. That combo puts the Federal Reserve in a Catch-22 -- whatever it does to solve one problem only makes the other worse. Emerging from a two-day meeting this week, Fed officials signaled that further recession-fighting rate cuts are unlikely and that their next move will be to raise rates to contain inflationary expectations.

....much more

[liberal N proud]

1. The only way this will improve....

"The only way to make things better is to get those fundamentals back in balance. In this case, that means bringing what we consume in line with what we produce"


One thing that must happen is the OIL Speculators must be reigned in. Until there is some stability there we are fucked. The price of gas, heating oil and natural gas is consuming peoples incomes.

[Subdivisions]

3. SPECULATORS! SPECULATORS! OH NOES!!!1!

You speculator fantasizers really need to do some research.

[ProfessorGAC]

4. Research Into?????

That poster has an opinion. How do you know it's an uninformed opinion just because you might disagree? Maybe that poster has done the research, knows just as much as you, and has arrived at a different conclusion.

This is a discussion forum. Not everyone has to have the same POV.
The Professor

[Subdivisions]

7. World oil production is in DECLINE! All the excuses and denial in the

world aren't going to change that. World oil production has not exceeded the volume of oil produced in May of 2005. Since then, oil production has DECLINED by rouphly 2% on a declining plateau. All the easy to get to and all the light sweet crude is nearly GONE. All that's left is the dregs.

Denial and averting eyes and hand-holding and begging for more oil aren't going to change that.

[ProfessorGAC]

13. And????

What does that have to do with what the original poster said? The price is inflated WAY beyond the supply line and finite resource limitations. Perhaps you need to do some research into those trends.

The poster was suggesting that speculation has grossly exacerbated the situation. That happens to be true. Nobody here said that speculation was the sole reason.

Now, you're suggesting, against all reasonable precedent of finite commodities, that supply in the future is the sole cause of this hyperinflation of price.

So, you have your POV, and others can have their POV.
GAC

[Subdivisions]

17. Do you deny that oil production reaches a peak and then declines? n/t

[ProfessorGAC]

29. Do You Have A Reading Comprehension Problem?

I said that the price run up is multi-faceted and the trend analyses indicate no >$140/bbl. oil. Speculators are dramatically inflated the price. Supply and demand does not explain these prices. It explains only a portion of the increase.

No. I deny nothing. I am, however, rejecting your single cause argument. The speculators are, in fact, hyperinflating the price of a barrel of petro. You rejected that statement by another poster. I'm telling you that the facts don't support this is just supply and demand.
The Professor

[Subdivisions]

32. I never said speculation wasn't part of the problem. It's just not the

primary cause of high oil prices. Speculators bet on the future value of a commodity. If they are wrong, they end up jumping off buildings. They perceive a decline in oil supplies or an increase in demand that future supply perhaps cannot meet. By the laws of supply and demand, they are betting that there will be less oil in the future. And, because of peak oil, they are right.

And, it's not going to get any better.

[ProfessorGAC]

38. And I Never Said The Opposite

I said, the whole time, tha supply was not a sole cause. You implied it was and that speculators weren't significant to the cause.

I explained that it is significant, by nearly the same amount as the supply problem. On top of that, the whole concept of futures on oil is a serious, and virtually unregulated problem. From a purely microeconomic value, it adds no value to the consumer, so it is an unwarranted and unjustifiable layer of profit taking. And the less it is regulated, the worse it gets. So, we disagree on the impact of speculation and the value of it.
GAC

[Subdivisions]

39. I agree to disagree. Just want to add one more thing. Congress has

initiated action to reign in speculation. Despite that, the price has risen on the order of $10 in the past two days.

We will all know soon what the true and primary cause is.

[L0oniX]

http://hubbert.mines.edu/ ....nuff said

[kentuck]

5. When a CEO of one of the Big Oil Companies says that...

they could be profitable at $65 per barrel, then it does make one wonder where the other $75 dollars is coming from, if not speculation?

[Subdivisions]

8. If not speculation? Then declining oil production. Despite all the

begging and despite record prices that promise massive profit, oil production has not increased since May 2005. Saudi Arabia talks all feathery about increasing production and have done so for years yet they have yet to do so despite record prices.

Every oil-producing nation, past and present, that is in decline has experienced the peak in oil production. The US peaked in 1970:



This has happened in approximately 70 oil-producing nations. Extrapolated to world oil production and you have a situation where the nations whose oil production is still climbing cannot make up for the decline in production experienced by nations whose production has peaked.

Do you need to see the production curves for the other 69 nations? Because, if you do, I can get them for you.

[kentuck]

10. It was reported in the last week that the Saudis had 25 million barrels..

sitting in tankers that were not moving? Also, it was reported that refineries were working at 85% capacity. Also, it was reported that 65 million acres of leased lands were not being explored by the oil companies with the leases? How do we explain all these small stories?

[Subdivisions]

12. Excuses, excuses. Everybody's begging for more oil to get prices

down but WHERE IS IT? And why isn't it flying out of the ground during a time of record prices? Why is the Saudi king ordering oil left in the ground "for our children. They will need it."?

You think they're sitting on it waiting for the price to go even higher? You think that if they KNEW that they could meet demand that they wouldn't also believe that a price crash could cause them to lose the opportunity to sell millions of barrels today at $142 barrels?

Maybe they just don't like money. Or, maybe, THEY CANNOT INCREASE PRODUCTION NO MATTER WHAT THE PER BARREL PRICE IS.

[kentuck]

14. Maybe they have enough money?

Maybe they have other reasons? Maybe they don't like the "invaders" in their part of the world? Maybe they truly hate America and would like to see our economy brought to ruin? There's a lot of "maybes" that can expounded upon...

[Subdivisions]

19. Maybe we (the world) have reached, and surpassed, peak oil production? n/t

[kentuck]

20. Would that mean there are no more places to drill?

Because if there are more places to drill, then the oil production has not peaked. It would, according to all the right-wingers, increase the oil supply and bring down the prices?

I don't minimize the dire problems we have with carbon fuels for energy use, however, we should not believe everything we read about this problem, in my opinion.

[Subdivisions]

24. At record oil prices, don't you think they would be drilling in approved

areas if they KNEW there was oil there?

All the easy to get to oil is GONE. Simply having permission to drill those areas doesn't mean there's oil present in those areas. Why are they so hot for ANWR? There are millions of acres open to drilling in the Lower 48 yet they want to go to one of the most inhospitable places on the planet, not to mention they want the OCS too.

If I knew there was oil in those permitted areas, I'd be pokiing holes all over the joint to get $142 per barrel, you can believe that.

Why don't you stop arguing about it and get some proof that peak oil hasn't happened? Get some proof that SPECULATORS are the primary engine running up these oil prices. No one has yet. You'll be famous. Everytime there's a problem with oil, there's some mysterious scapegoat. Do the research. You'll see.

While your at it, do a little studying about what peak oil is.

[kentuck]

25. Well, there is a lot of leased land just to the west of ANWR...

and they know, they KNOW, there are millions of barrels of oil reserves, but they are not drilling? Why? Maybe there are some political considerations? Perhaps they are coveting the ANWR area before George W Bush leaves office? One thing they are not short of is greed. Who knows?

[Subdivisions]

27. That's right. They are not short on greed. THAT's why peak oil

cannot be denied. Because IF there was any cheap and easy oil left, they would be drilling for it in the permitted millions of acres.

Never get me wrong on this one thing: I LONG TO BE PROVEN WRONG AND PUT IN MY PLACE. I hope with ever fiber of my being that I'm wrong. I have two beautiful daughters and five stepchildren I love. But, so far in 3 years, no one has been able to do so.

[kentuck]

36. It was not that many years ago...

that they shut down some refineries to keep the supply off the market and to drive the price up. They have proven in the past that they are capable of manipulating the market. But, we should not overlook the fact that Bush and Cheney are "oil men" and they would love to have ANWR in the bag before they leave office.

[Subdivisions]

37. Well, reagardless of personal greed or geopolitical motives, everything

we are witnessing, from the false flag attack on 9-11 to the Patriot Act to the "war on terrorism" to the attack on Iraq for its oil to the decline of the airline industry is ALL pre-ordained and predicted years ago as the acidic effect of the point at which the supply of oil fails to meet demand, resulting in the unavoidable collapse of the world economy.

In fact, the more I study petroleum (and peak oil), the more I realize and learn that nearly every aspect of life on this planet is irrevocally tied to oil and, moreso these days, peak oil. Without MORE oil, economies CANNOT grow.

The people of Easter Island were among those in our past that learned what it meant to use up all your resources. The civilization that built the Moai (in my estimation an attempt to attract the attention of passersby whom they hoped could save them from their fate), no longer exists. We are the modern Easter Islanders and our civilization is coming to and end. At least as we have known it.

[liberal N proud]

6. Oh I suppose the price of oil and gas is good for us?

[Subdivisions]

9. No it's not good for us. But you better get used to it. And you better

start figuring out what the heck you're going to do when you can no longer afford it. Worse, you better figure out where you're going to get food when the trucks stop backing up to the docks of your local grocer.

[liberal N proud]

11. Get a clue

People can't afford to get to work to pay for the damn fuel, the food they have to feed their kids or any other fucking thing that makes this economy go.

The price of oil has crippled this economy. Get used to that fact. And if something isn't done about it the economy will not recover. People will starve, right here in the good ol' US of A.

This is the trickle down effect of the bu$h economics.

[Subdivisions]

15. No, YOU get a clue. You refuse the concept of PEAK OIL. A concept

that has been observed THOUSANDS of times at every depleted well in the world.

And what does your statement above have to do with what I'm saying. I'm out here having to deal with the very same effects of high oil and gas prices as you are. I'm not debating the effects of high oil prices, I'm trying to get you to understand WHY prices are climbing.

EVERY DAY, THE WORLD PUMPS LESS AND LESS OIL. That is the primary engine behind rising prices, just as prices rise for any commodity that is in short supply. And before you give me the ole "I don't see any shortages or lines at the pumps!", let me say this: Go to any third-world country that is unable to pay the price as we are still able to do. We don't see the full-on effects because we can pay for it - for now.

[RainDog]

31. Oil speculation had limits until 2000

Is that the kind of research ppl need to do?

Democrats in the House now have a bill to restore the limits on speculation. Because they see the damage it is doing since Bush gave his friends the freedom to fuck with everyone in this nation via speculation.

Is that the research ppl need to do?

[InkAddict]

26. Production requires resources, something many people

can't afford. Those they had are being stripped. Feel-good smiles are free; see all those foreign workers smiling as they provide products and customer service to their greedy American elites and stockholders as they, as a last-resort, supply them with ingredients to kill off our livlihoods, raise the cost of eggs, flour, and cooking oil beyond our reach. When do they also make or rehap the camps and ovens for the rest of us.

If you don't work, you don't eat.

[RainDog]

28. Baron Hill (D-IN) intro'd a bill into the House YESTERDAY to restore

the brakes on oil speculation. Those brakes were cut when Junior took office, btw. so surprised!

anyway, if YOU care about this issue (not you, lNp in particular, but you, DU) contact Hill's office and say thanks and let him know he has support for H.R. 6372.

Or even better, contact your own House rep. to tell that person to support Hill's bill.

http://baronhill.house.gov/

[liberal N proud]

30. I will do both

[Subdivisions]

34. I will do so. However, while reigning in speculation will bring down

prices to an extent, it does not change the fact that the world has reached peak oil production.

[HereSince1628]

2. My memories of stagflation aren't good ones.

I don't expect this recession will be fun either.

[KharmaTrain]

16. Welcome To Stagflation

Yep...we're stuck in a cycle of rising prices and a shrinking economy...people are paying more and earning less and the more the prices go up the less people will buy thus the more people who will be laid off creating even bigger troubles. Soon we could see the additional mess of state and local goverments also running out of money as tax revenues shrink and a big source of income and jobs vanishes.

As long as this regime defecit spends like crazy, allows speculators to monopolize and manipulate markets and bails out the corporations rather than stands with the people this situation will go on. There are no magic hats here...and maybe that's not such a bad thing. The largess of corporate America is out of control and it just might be a good thing for the deck of cards to finally come crashing down and the speculators are driven out.

[knitter4democracy]

18. Michigan's been there for years already.

No one listened to us four years ago, and now it's hitting everywhere. Color me surprised.

[Malikshah]

21. I read this last night. The columnist appears to take some glee

in the column. He gives a pass to the reality of rampant oil speculation and doesn't appear to worried for himself.

Screw him and his beltway elitist crap.

[kentuck]

23. It seems to me...

That he talked about much more than just oil speculation in the article. I thought he was telling a lot of truth about our present economic situation and why? Whether or not he was gleeful, I could not ascertain that from the article?

[Malikshah]

33. His sense of glee comes from the tone in which he describes the problem

As if he suddenly realized something that the rest of us have seen for quite a long time.

It comes off as condescending and arrogant and as if he needs to educate us on how bad things are.

These and other doomsayer articles do little to provide solutions or hope. Life is sheer hell right now, yes. But one has to have hope. Columnists who are sitting pretty with clearly no money worries need to help work toward a solution, not just "tut tut tut" from behind the Beltway wall.

[Phred42]

22. Here's Another Cheerful one: The Game is Over. There Won't be a Rebound

The Game is Over. There Won't be a Rebound
http://www.counterpunch.org/whitney06212008.html


Mike Whitney: Fed chairman Bernanke has been on a spree lately, delivering three speeches in the last two weeks. Every chance he gets, he talks tough about the strong dollar and "holding the line" against inflation. Treasury Secretary Henry Paulson even said that "intervention" in the currency markets was still an option. Is all of this jawboning just saber rattling to keep the dollar from plummeting, or is there a chance that Bernanke actually will raise rates at the Fed's August meeting?

Michael Hudson: The United States always has steered its monetary policy almost exclusively with domestic objectives in mind. This means ignoring the balance of payments. Like the domestic U.S. economy itself, the global financial system also is all about getting a free lunch. When Europe and Asia receive excess dollars, these are turned over to their central banks, which have little alternative but to recycle these back to the United States by buying U.S. Treasury bonds. Foreign governments – and their taxpayers – are thus financing the domestic U.S. federal budget deficit, which itself stems largely from the war in Iraq that most foreign voters oppose.

Supporting the dollar’s exchange rate by the traditional method of raising interest rates would have a very negative effect on the stock and bond markets – and on the mortgage market. This would lead foreign investors to sell U.S. securities, and likely would end up hurting more than helping the U.S. balance of payments and hence the dollar’s exchange rate.

So Bernanke is merely being polite in not rubbing the faces of European and Asian governments in the fact that unless they are willing to make a structural break and change the world monetary system radically, they will remain powerless to avoid giving the United States a free ride – including a free ride for its military spending and war in the Near East.

[MikeNearMcChord]

35. I think the word here sportsfans is DEPRESSION!!!