We have been skeptical of the idea that a weak dollar would be the boon for US manufacturing that many thought it would. The reason? The best possible outcome would be to see a resurgence in manufacturing, since manufacturing has higher potential for productivity gains than does the service industry (although getting back some of […]
Read more...Since roughly February, a solid minority of commentarors, including this blogger, have questioned the thesis that the rapid increase in oil prices was solely the function of supply and demand. It was disconcerting to see what reactions this stance elicited. There was often an unwillingness to read what was written, and instead turn the post […]
Read more...A very good short piece at the Financial Times by Ed Morse, chief energy economist at Lehman. Readers may know that Lehman has been the staunch oil bear in contrast to Goldman’s uber oil bull posture. Note that Morse’s argument is similar, although more short-term focused, to a post we discussed, “Peak Demand.” From the […]
Read more...A post by Jim Fitch of Some Assembly Required. The real purposes of a democratic society cannotbe achieved by violence and destruction. George Kennan. Balance Sheet: The housing market continues to deteriorate. Unemployment is rising. National retailers are seeking Chapter 11. The economy is slowing, if not in recession. Auto sales are non-existent. Americans have […]
Read more...It no doubt seems absurd to question the idea that deleveraging in underway. We’ve had three heroic central bank interventions, starting in August 2007, to reverse seize-ups in the money markets. The asset backed commercial paper market has been almost in run-off mode. Leveraged buyout loans have been scarce to non-existent. Banks have cut home […]
Read more...The text that accompanies the slides from a July JP Morgan report in its Hands-On China series by Michael Goettti (hat tip reader Michael) notes that it you asked most people how quickly Chinese food consumption was growing, most people would peg it in the 7% to 10% growth range, paralleling GDP growth. This is […]
Read more...James Bianco, a respected fixed income analyst at Arbor Research, was so kind as to pass along his observations about the retreat in oil prices from his morning research note. “Is This Why Crude Oil Is Getting Slammed?”: The Financial Times – Oil trading company files for bankruptcy Access SemGroup, the US physical oil trader, […]
Read more...Pamela Ann Smith interviewed Robert Mabro, a world recognized expert on oil and gas and founder and current honorary president of the Oxford Institute of Energy Studies. The full interview is at RedOrbit (hat tip reader Michael) but the formatting is annoying (bizarrely, it doesn’t say who is saying what, although readers can infer most […]
Read more...Both are victims of the high cost of grains, wheat in the pigs’ case, corn for the catfish. as the New York Times explains. And US hog farmers aren’t faring too well either: Catfish farmers across the South, unable to cope with the soaring cost of corn and soybean feed, are draining their ponds… Corn […]
Read more...A bit of cheery news for beleagured airlines: jet fuel, which of late had traded at a considerable premium to heating oil, is set to have that margin fall considerably, perhaps as much as 90%, due to aggressive moves by the industry to cut capacity in the face of skyrocketing (no pun intended) costs and […]
Read more...It’s a no-brainer that as airlines are cutting service, slapping on new fees and surcharges, and raising prices in increasingly desperate efforts to achieve profitability, the last thing they need to do is strain their cash flows further by buying new aircraft. A Times story assesses the magnitude of the cutback in orders. From the […]
Read more...Blomberg columnist William Pesek plays out a line of thought that may have occurred to some readers: what if the resolution of the credit crisis and global imbalances isn’t a nasty recession or punishing inflation but Japan-like protracted low growth, with stagnant to deteriorating living standards? This idea may not be as much of a […]
Read more...Every bull market has its Pets.com moment. The oil market’s may have just arrived. Is a market top is nigh? The newsletter Springwise, whose theme is “new business ideas for entrepreneurial minds” showcases MyGallons.com: Today’s high gas prices are already forcing changes in the way many consumers live, but it’s a pretty safe bet they […]
Read more...Oh dear. This move comes after oil was starting to retreat a tad and Iranian president Ahmadinejad (a figurehead, but one who gets treated seriously by the Western media) was sounding sensible and willing to negotiate. From Reuters: Iran has test fired nine long- and medium-range missiles, including one which it has previously said could […]
Read more...The oil bulls will take offense at Hussman’s contention that high oil prices will break, and probably break pretty seriously. Note we think high oil prices would be desirable if phased in over several years via a carbon tax to discourage use, but as everyone know from direct experience, a sharp runup is destabilizing, and […]
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