Re: oil shale.
In Colorado, the last major unused water rights were recently diverted into an oil-shale project. However much oil comes of that is more or less all you will ever get. As populations increase, they’ll want to use that water for other things. There are in fact physical limits on oil shale production.
But hey, come up with some Star Trek technology that takes water out of the equation and we’re in business.
My “Bindlestiffs with Bikes vs Guys Who May Have Jobs But Whose Bikes seem to be w/Backpacks for Other Reasons Ratio,” based entirely on a physical assumption of the bum/non-bum ratio; taken at noon, was 2:2. Taken two blocks to the west and at 6PM, when the bums would be flocking at the Temple on Highland, the number would be higher.
Rule of thumb traveling south on Highland most of the time and observing a person who appears to be talking to himself? He might’ve blown a tire and is making excuses for missing a theatre. After 6PM? It’s just a few more blocks and, as he detached from reality long ago, you probably don’t wlant to offer a ride.
FTR, Wife serves at that shelter. I worry about her until she gets home. She’s a tough woman, as I’ve described on this board. I still worry and wish she would stop, but her descriptions of the OLD folks who do most of the (literally) heavy lifting leaves me feeling like a coward. Okay, I’m a coward. 
I hate to say it, but Sam Stone isn’t actually wrong. The prospect of a looming trade war spurred by protectionism making things worse for everybody isn’t idle.
Many of the “big” numbers aren’t looking too bad. In fact, they’re pointing to a recovery. Housing starts, GDP, employment.
If you look a little deeper into numbers about inventory levels, investment spending, new business loans and so forth, you get a slightly different picture. People are spending cash that they got as stimulus, but it’s stopping at the first or second cycle through the economy. Until we see some indications that these secondary numbers are reversing their retreat, things are getting worse, not better.
Nope. Shale oil uses about 3bl of water for each bl of crude. In contrast oil wells use about 8 bls of water. So this limitation is just more true of liquid crude than it is of shale.
Added to that there’s lots of water in the ocean and in saline aquifers and it has no further use to humans. Perhaps in the unique case of mountainous and landlocked Colorado that provides a limit, but for most of the world’s oil shale it is no bigger limitation than it is for liquid crude.
If you are correct, than that spells good news for oil shale.
Still, peak oil may remain a problem. Soon after the peak of US oil discoveries, peak US production was predicted- about a 30-year lag. The predictions were accurate. The world reached it’s peak of new oil discoveries about 30 years ago. There’s a lot of data behind this assertion.
Still, maybe there are more factors to consider on the global scale, and in the present case. But then, in the present case there is also global warming…
I misspoke. You’re right - it was undersubscribed.
I’m sure I was. We didn’t have a car though. And when you see the town drunk go from beer to vodka, do you say: “give it a little bit of time, it might work”? My problem with taking on an astronomic extra debt burden to fix an economic problem created by previous years irresponsible debt taking isn’t that it hasn’t worked yet.
As Voyager says. Give it time. It’ll come. Good thing too perhaps. It’s now the only realistic method by which you’ll ever be able to bring you debts to a manageable level.
Really? Then I’m sure you can provide it. I suppose it depends upon how you define your terms. New fields are still being discovered, and there’s lots of the world left to survey. For instance, we have barely begun to investigate the polar regions, and we still don’t know how much oil is around the Falklands.
You said he hasn’t delivered the change yet - if the economy has improved by the end of the year, will that meet your definition of change?
I appreciate that lots of people are worried about the deficit, but lots are worried that backing off the stimulus package now will bring us back to the brink of depression, or drive us over the brink. People are definitely not as gloomy as they were 6 months ago. Obama has delivered change, just not results yet, because it is too soon.
Yes. If the economy has improved by the end of the year, instead of doing the death spiral of Fed-failing-at-quantitative-easing/interest-rates-rising/foreclosure-debt-mayhem I expect later in the summer/early fall, I will say to everyone I’m now telling to sell stocks and not buy real estate that I was wrong to be skeptical and that my understanding of economics clearly leaves a lot to be desired. (Which could be true. This whole thing left a lot of people who know a lot more about economics than I do completely blindsided.)
Although another thing I worry about is the possibility that the stimulus might help… for a year, or two… and make things worse in the long run. (I firmly believe that the whole housing bubble – that I think was encouraged by Bush and Bernanke – made things worse than if we had had this recession at that time instead of rushing into the housing bubble first, but your opinion may vary.) And I think that if that happens, it’ll be very hard to tease out whether the stimulus actually helped or hurt. I mean, people are still arguing about the New Deal.
Two words: Fischer-Tropsch. The cost to convert coal into liquid hydrocarbons is the absolute ceiling for oil prices. It’s much cheaper to pump crude oil out of the ground and refine it into liquid fuels than it is to convert coal into liquid fuels. When that’s no longer the case then we have enough coal to power our cars and tractors for another couple hundred years. The only problems are the externalities associated with coal mining–CO2 and sulfur and etc emissions, dead coal miners, and so on.
If the fuel portion of your transportation bill doubled or tripled or quadrupled or quintupled in the next couple of years that’s not good, but it sure isn’t a Mad Max scenario where we’re killing each other for the last drops of petrol.
One more thing. The collapse of the housing bubble is good. It would have been better to not have it in the first place, but it’s better that we’ve punctured it rather than having it continue.
We were like the guy who finds an old violin in the attic with “Stradivarius” written on it, who figures he’s now rich. Well, when he takes the violin in for appraisal and the guy tells him “Stradivarius” was written with a sharpie, did he really lose a million dollars? No, he hasn’t lost anything–unless he started racking up debts that he figured he could repay when he sold his violin. The sooner he finds out that he doesn’t really have a Stradivarius the better.
Expensive housing isn’t good. Inexpensive housing is good, because people can afford it.
This is such new territory that no one knows for sure what to do. Krugman’s last column talked about cases where the stimulus was eased up on before there was a real recovery - with another recession the immediate result.
I think you need to blame Greenspan, not Bernanke. By keeping interest rates low, and encouraging the bubble, he managed to increased consumption despite wage stagnation. If he had let rates rise there would have been another, milder, recession before this one. Maybe if the bubble had burst a year earlier AIG and those other knuckleheads wouldn’t have been as over committed, but I’m not sure.
Obama’s economic team seems to be thinking about ways of changing the fundamental rules of regulation, and aren’t just providing stimulus to let us go back to normal. We’ll see how fundamental the proposed changes are.
Agreed!
Now back to the question of whether this economy has hit bottom yet, my opinion, based solely on personal observations, is that the crisis is deepening.
Malls are losing tenants. Freestanding stores, including "depression-proof "Walmart seem emptier than they were. Though Walmart’s pharmacy was definitely jammed the last time we need to fill one of those $4 generic prescriptions, the rest of the store was as quiet as Kmart was 2 months prior to its Store Closing sale announcement. You could actually park close-in.
Sears just closed in my little 'burb and the closing sale wasn’t nearly as well-attended as K-marts was, a few years back.
I see really attractive homes go unsold for months, with owners then changing realtors, then putting up For Rent By Owner signs.
Popular restaurants are now only half-full at noon.
Car dealers’ lots are jammed with unsold units.
Gas prices are going back up, so the publications I deliver to racks in these places have more takebacks as people just run their $20 through the bill-changer on the pump, get gas, and go. The convenience store end of these businesses, where the real money is made, is hurting. Gas retailers HATE high gas prices.
I see zero sign of recovery, thus far.
Economy Ed (Puxatawnee Phil’s brother - he didn’t go into meteorology) is currently cautiously sticking his head out of his hole.
If there are no major bad news items in the next three to six months, things will be recovering well. If we suddenly hear that Ford is about to collapse or that Citi just found a really bad ledger behind the fridge…Ed is going to go catatonic in the corner for a while.
We’ll see.
-Joe
You’ve got to blame Bernanke for at least part of it. When the credit markets started to freeze up in August 2007, he slashed interest rates massively – outside of a regularly scheduled meeting, if memory serves – and the party went into overdrive for another year. I sometimes think that if Bernanke hadn’t done that, we’d all be a lot better off now. The recession wouldn’t have been quite as bad, there would have been one year less of ridiculous borrowing and lending, AIG and others might not have been in quite as bad shape, we might already be past the worst of it, and the worst of it wouldn’t have been quite as bad. As it is, it’s worse than it needed to be, and it’s still got at least a year to run. Of course, hindsight and all…
If only the credit markets had frozen up at the end of Greenspan’s run and Bernanke just said: Tough. Let’s get the recession over with now…
Some are arguing that we haven’t really let it burst, and may be gearing up for Part Deux.
This is an excellent articleby renowned FT columnist Martin Wolf analyzing recent trends in the financial markets particularly the bond markets. I think he does a pretty good job of puncturing some of the alarmist analysis coming out from right-wing writers. The charts in particular are especially helpful.
If I have the time I may go into it in greater detail but basically variables like 10-year yields have risen but only to relatively normal levels that prevailed before the panic of late 2008. The same goes for the implied inflation rate from the difference between ten-year treasuries and ten-year TIPS which is now 2% : pretty much the inflation targets of most major central banks. Note that since markets are forward looking this means that they don't anticipate a significant increase in inflation over the next ten years.
The bottom line is that current policies aren't leading to some kind of macroeconomic catastrophe. They will have to reversed some point down the line as the economy recovers but it's far too premature to talk about reversing the stimulus. That is the kind of policy blunder which lead to the 1937-38 recession.
Hmm. I couldn’t get to this article (I think I hit my max). So does this analysis say anything about option-ARMs recasting, and how the banks are going to deal with the resulting foreclosures? Or about continuing deflation due to credit unwinding?
It is true, I do read one kind of crazy right-wing alarmist guy (Karl Denniger)… but… I really think he might be crazy like a fox, if you look at how many of his predictions for 2008 (scroll down to the bullet points) were spot on, and how many of his 2009 predictions (again, you have to scroll down quite a ways) are already coming true. Was Martin Wolf right about all those things? I know of very few other people who have that kind of track record over the last two years (though there are some).
And yeah, I don’t disagree that Greenspan was also complicit.
Denniger appears to be predicting deflation which is the opposite of what some right-wing commentators have been warning about. Wolf is addressing concerns about possible inflation and government crowding out of private investment: