No I can't quantify "grinding to a halt." Only sit back and marvel at it.

If it will make your Spock-like logical mind happier, I will amend it to "appearing to be grinding toward something approaching collapse."

Some how, though, that just doesn't have the same ring to it.

We are approaching a 50% drop in the DOW from its high. Is this a common occurrence in your experience? Can you be confident that it will stop its downward plummet soon? Will this have no effect on the broader economy if/when it falls much further?

Citigroup and Detroit are going down. The entire investment banking system has imploded. Unemployment growing rapidly. And now this:
USA asks for bailout for itself

The world economy is in recession and some economies are at or near collapse (Iceland, Mexico...).

Maybe these are all just slight bumps along a happy road to a soon-to-arrive free market utopia.

Forgive me if I have my doubts.

I predict $47 by Weds but the cold winter that has started will stabilise prices at around 55/60 until March then it'll likely drop into the 30's as the economy finally collapses completely
and about time to

Well, I can't say that my "Spock-like logical mind"I expected ya to understand the difference between qualify and quantify.
I wouldn't say they're bumps along the road to utopia, since that seems to be the opposite of the d00mc0pianism from some members on sites like this, just that ups and downs of varying magnitude and impact are common and we haven't seen the "out there" claims outlined via TEOTWAWKI. No one's saying that things won't be bad or good, but I'm pretty skeptical about a bunch of economies grinding to a halt. Slowing down? Sure... But unless we're being incredibly creative about semantics we probably won't see entire economies just sitting there.

"ups and downs of varying magnitude and impact are common"

Vague but true. Yet some recent "downs" have been anything but common. See earlier post for examples, or pick up a newspaper, or look out the window.

As penultimatemanstanding noted on a neighboring thread:
"Well what can I say? Greek shipping companies are sending out the order to cargo ships on the seas to cut their speed in half because there are no return cargoes to load. Japanese cars are piling up on the docks with no market. Orders for new cargo ships are being canceled left and right at great loss to deposits. The list goes on and on. Trouble everywhere. Downturn or collapse? I guess we'll know before too long."

"No one's saying that things won't be bad or good" !!??

I'll confess to some semantic creativity, if you admit to some syntactic incoherency

The magnitude of the downturn is proportional to the magnitude of the upturn, compared to the mean of course. Just take a gander at the past couple hundred years. Corporations just like individuals, can't predict the future, and they can and do get caught w/ their pants down. Like I said a slowdown a slowdown ain't a halt. LMK if the entire economy ceases to function, that'd be grinding to a halt, unless you're talking about a rolling halt, kinda like a "California stop".

Anyway, if you specify syntactic incoherency I'll consider your confession of semantic creativity.

"Anyway, if you specify syntactic incoherency I'll consider your confession of semantic creativity."

Do I have to get more specific than this?:

"Like I said a slowdown a slowdown ain't a halt."



By using the plural "economies," I was intending to mean in my semantically creative way that large segments of the world and national economy are shrinking, crashing, on their way to disappearing...

It goes beyond individual corporations. Again, the whole investment banking sector of the economy, including companies that had been around for well over a century, went up in a puff of smoke a few weeks ago. You didn't find this stunning? Did it seem commonplace to you?

Do you have a rosy prognosis for the US auto industry. Again, a core component of US industrial capitalism for much of the last century is now on its knees, begging for a handout. Not just one corporation--a whole segment of the national economy.

But maybe these are just minor blips in normal economic cycles that we see all the time. I do hope you an all on the forum are not too severely buffeted by this particularly vicious cycle!

So by "economies" you actually meant some undefined segment of the economy and by "grinding to a halt" you meant shrinking, crashing, and on their way to disappearing. Well, I can't say you're the first to use creative license on this forum.
The whole investment banking sector went up in a puff of smoke? Sure they've been hit hard, but according to most meanings that's a bit more than what's happened. Barring of course more creative license.
Plenty of auto companies besides the domestics have operations in the states, so a whole segment is again pushing it, and they didn't run their operations into the ground like the big three did.
Companies going out of business and recessions are part of the economic cycles we've seen for the past century or so. The lines about entire economic sectors going up in a puff of smoke and whole segments of the economy begging for handouts are exaggeration to say the least, just like saying that economies grinding to a halt means some undefined segment of the economy slowing crashing, etc... Which happens all the time, albeit not as much when we aren't in a recession, seem to be a bit, well d00mc0pian. Not that I'm faulting ya for it. If ya wanna fear monger that's your call.

Damn, I wish I could manage to imbibe a bit of that sunny disposition of yours.

So what would constitute serious clouds on the horizon for you?

Or is even imagining such things anathema to such a cheery temperament?

d00mc0pians such as yerself, as well as c0rnuc0pians, who wouldn't know objectivity if it it hit 'em smack dab in the face. Blowing things out of proportion seems to be a pastime for some.

Yesplease,

Unless I'm mistaken, in the 70s oil embargo, oil production was decreased by 4% and thus demand in the US dropped accordingly. This was not a "compounding" drop, thus, it required only a 4% drop in demand for four years. This is very different from having a 6% drop per year, which is in effect, like compound interest. So, at the end of 4 years, a six percent drop in production each year means world oil productions drops by about a third (using rule of 72). Even if its only 20%, it doesn't matter, 20% is five times the drop experienced in the 70s.

Further, in the 70s, there was cheap oil waiting to be turned back on. That's not the case now.

Again, the point of all this is that oil's current "price signal" is the wrong signal. With PO close on the horizon, the optimist previously argued that oil would rise in price thus triggering a move to get the harder to reach oil and alternatives to oil. Interestingly, that isn't happening.

The debate on PO used to be whether alternatives to oil could be found in time and at any price. Neither side considered the position that what if oil dropped in price when the world was on the verge of PO.

You are mistaken. I'm not referring to the drop during(?)/post the 70s embargo, but the drop after the price spike in the late seventies/early eighties, which was around 5-6% depending on whether we measure it compared to a static consumption rate or a compound rate. I'm not sure what the decline rate after the embargo was because there isn't data about a local maximum.
You aren't using the rule of 72 correctly. You stated that oil production would drop by about a third, so it's FV is about .66 compared to it's PV of 1. Since we're looking at small rates, just like in the Wikipedia entry we can approximate the ln(1+r) as r, and ln(.666)=.41, so t=.41/r. The time you're using is four years, so we find that the decline rate needed for oil production to drop by a third in four years is roughly 10%.

Your statement it's "like compound interest" is off because we're looking at periodic compounding wrt decline rates, not growth rates, which are associated w/ interest rates. Just like periodic compound growth rate leads to something that is greater than linear growth, periodic compound decline leads to something that is less than linear decline, which is why the IEA has the decline of current fields going flatter as time progresses. Each 6% decline per year is smaller than the previous 6% decline per year because the each year the existing wells produce less. This means that each year we loose less oil and the production curve doesn't look like compound interest, going faster and faster to no production, but instead looks like compound decline, losing less and less each year and flattening out as time goes by.

We dropped consumption from ~19mbpd in the late 70s to ~15mbpd in the early 80s, which is a 4/19=21% drop. We've already seen ~6% decline rates over four years resulting in a ~20% drop.
Exactly... So instead of another generation of gas guzzlers we'll probably see consistent production of vehicles w/ greater fuel economy.
It's the right signal because people are using less of it voluntarily, to the point where OPEC has to cutback 2mbpd just to stabilize prices. When people want to use more of it, or the production decline rate catches up to the consumption decline rate, we'll again see price signals to produce more oil and/or use alternatives.
Why wouldn't it drop in price before PO? Demand tends to change much more than supply, so increased volatility is expected and many have mentioned it. Producers are cutting back to keep profitability up, which also reduces volatility, but no one can force the world economy to keep demand up regardless of the cost.