Here Comes The Double Dip Pt. 3

[OilFinder2]

Doom is on the horizon. They will try to stop the crash until after the election, but I am not so sure they can. If they can, 2013 is going to be a bloodbath.

Hmmm, now where have I heard this before?

[vision-master]

Well, we all are doomed when ya think about it - nobody get's out of here alive....... time is short oily, say your prayers. lsol

[OilFinder2]

Job Openings in U.S. Increase as Hiring Accelerates: Economy

April 10 (Bloomberg) -- Job openings in the U.S. increased in February and hiring climbed to the highest level in more than three years, signaling employers turned more optimistic about the economic outlook.

The number of positions waiting to be filled totaled 3.5 million in February, up from a revised 3.48 million the prior month that was higher than previously estimated, the Labor Department said today in a statement posted on its website. More people were added to private payrolls than at any time since October 2008, while the pace of firings was little changed, the report showed.

Better employment prospects may mean the setback in hiring in March will be short-lived, helping restore some of the 5 million jobs yet to be recovered in the aftermath of the 18- month recession that ended in June 2009. The pickup in the labor market may ease concerns raised by Federal Reserve Chairman Ben S. Bernanke last month that much of the improvement stems from fewer firings instead of new additions.

"There is a pretty strong, solid uptrend in job openings," said Michael Gapen, a senior U.S. economist at Barclays Capital in New York. "The labor market is gradually getting better when you continue to look across a broad swath of indicators."

[...]

[Armageddon]

Doom is on the horizon. They will try to stop the crash until after the election, but I am not so sure they can. If they can, 2013 is going to be a bloodbath.

Hmmm, now where have I heard this before?

The 15 trillion of gov't viagra is wearing off. They can keep rubbing the gov't pecker as hard and fast as they want, but without more viagra, it won't get hard. Where is the next viagra shipment going to come from ?

[OilFinder2]

I'll be awaiting your next doomsday prediction.

[Daniel_Plainview]

PEAK OIL, Economic Growth, and the "Big Lie"

In the commentary on Peak Oil recently published in the leading scientific journal Nature, James Murray (the founding director of the University of Washington’s Program on Climate Change) and David King (the Director of the Smith School of Enterprise and the Environment, University of Oxford) made the following statement,

Historically, there has been a tight link between oil production and global economic growth. If oil production can’t grow, the implication is that the economy can’t grow either. This is such a frightening prospect that many have simply avoided considering it.

Why do we find the idea of the end of economic growth so frightening? The reason is what I call, ‘The Big Lie’. ... Energy is the central facilitating resource that makes our economy possible. For an economy to expand it requires an increased rate of energy use. But the world’s net energy production already appears to have plateaued. Conventional crude oil production has been flat since 2005. The current hubris about the small uptick in U.S. oil production from shale will eventually be exposed as economists’ hype and ideas that oil production from Canada’s tar sands can be massively expanded are unrealistic.

Increased oil use in China and India has been at the expense of the USA and Europe. The amount of oil available on the world export market has been in decline since 2006 as production plateaus or falls in exporting nations and those nations use more of their own oil production to service their economies and growing populations. ... If world energy production has plateaued then world economic growth must have ended. However, while the U.S. and Europe have staggering debts to pay, we are still hearing stories of economic growth in many Western nations. How can this be?

It cannot. It is so important to maintain the ‘Big Lie’ that governments lie to us about economic growth (and, to be fair, we want to be lied to). This is done by, among other things, manipulating inflation figures by frequently changing the formula by which inflation is calculated and by excluding the cost of fuel (energy) and food (human fuel). If, instead, we keep the inflation formula constant so that it can be compared over time then economic growth statistics look very different. For example, the Shadow Government Statistics (SGS) website shows that the U.S. economy is not, in fact, growing but has been contracting continuously since 2005...

... How bad will things have to get before we admit to ourselves that the ‘Big Lie’ is, in fact, just that? With the wealthy in charge of our media and our politicians unable to win votes unless they promise us a brighter future I suspect that most of us will never stop believing it. It is human to be irrational and hope nowadays is compulsory. Admitting that the ‘Big Lie’ is a lie also means admitting that too many hard truths are true. The truth that the world is finite is too hard for most of us to understand let alone to bear.

This should be obvious to anyone with 2 firing neurons ... however, it's nifty to see these themes distilled in one short essay.

As we realists have been saying:

1. The govt's inflation data and GDP multiplier are blatant lies;
2. The govt's growth data (GDP) are blatant lies;
3. The govt has no choice but to keep interest rates at zero (ZIRP) because otherwise the economy would collapse, and interest on the astronomical national debt would destroy anything remaining of this moribund economy.
4. Historically, growth has depended on an abundance of cheap energy; however, as Brent crude exceeds $120/bbl, the days of "cheap energy" are over ... and thus, GROWTH IS OVER.
5. If the sheeple were to learn this reality, the stock market would collapse ... so the govt has no choice but to maintain the BIG LIE.

[Daniel_Plainview]

Jobless Claims Rocket to 380,000! ! ! !

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending April 7, the advance figure for seasonally adjusted initial claims was 380,000, an increase of 13,000 from the previous week's revised figure of 367,000. The 4-week moving average was 368,500, an increase of 4,250 from the previous week's revised average of 364,250.

The advance seasonally adjusted insured unemployment rate was 2.6 percent for the week ending March 31, unchanged from the prior week's unrevised rate of 2.6 percent.

The advance number for seasonally adjusted insured unemployment during the week ending March 31 was 3,251,000, a decrease of 98,000 from the preceding week's revised level of 3,349,000. The 4-week moving average was 3,334,250, a decrease of 35,750 from the preceding week's revised average of 3,370,000.

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 381,875 in the week ending April 7, an increase of 62,530 from the previous week. There were 448,029 initial claims in the comparable week in 2011.

The advance unadjusted insured unemployment rate was 2.7 percent during the week ending March 31, a decrease of 0.2 percentage point from the prior week's unrevised rate of 2.9 percent. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,448,994, a decrease of 187,712 from the preceding week. A year earlier, the rate was 3.1 percent and the volume was 3,943,591.

The total number of people claiming benefits in all programs for the week ending March 24 was 6,952,876, a decrease of 97,833 from the previous week.

[TheAntiDoomer]

Keep your pants on DP, this wasn't the end of anything.....

"This is not a game changer, this does not confirm the weakness in the report we saw last Friday. We suspect that much of the increase was due to seasonal issues and we would therefore expect it to drift lower."

The U.S. trade deficit shrank 12.4 percent to $46 billion in February, the biggest month-to-month decline since May 2009, the Commerce Department said, as exports hit a record high.

That could prompt economists to raise their estimates for first-quarter gross domestic product.

Also see OF2's job openings report, we shall see but I expect the next monthly jobs report to be exceptionally good.

[OilFinder2]

Spring break. And maybe Easter, too.

I seem to recall something like this happened last year too. Nonetheless, we'll keep an eye on it.

[OilFinder2]

As we realists have been saying:

Here's some other things you "realists" have been saying.

Posted Aug 15, 2011

If you have any doubt that we're still in a depression (or heading into a double-dip, depending on your ingestion of koolaid) ... then STAY TUNED ...

Posted June 15, 2011

We'll likely see a double-dip without QE3.

Posted May 5, 2011

MarketWatch: Double-dip recession is now undeniable

Posted April 30, 2011

These price increases are happening despite the fact that the US economy is clearly teetering on the brink of a double-dip recession ...

Posted January 13, 2011

Jobless claims soar by 35,000 to 445K as double-dip takes foothold

Posted Nov 10, 2010

The double dip -- already a rare phenomenon -- is now entering an unprecedented free-fall.

Posted Feb 18, 2010

The risk of a double-dip recession – or worse – is growing by the day

[OilFinder2]

4. Historically, growth has depended on an abundance of cheap energy; however, as Brent crude exceeds $120/bbl, the days of "cheap energy" are over ... and thus, GROWTH IS OVER.

Awww, poooor DP. If he was actually paying attention, he would discover that this non-cheap energy is resulting in a jobs boom!

America's energy job machine is heating up

Thursday night in South Texas, and the parking lot at the Texas Roadhouse, on Highway 287 outside Port Arthur, is jammed. Big-shouldered Sierra trucks jostle with shiny Rams, F-150s, and Tundras, with a pearl-white, freshly polished Dodge Challenger sports sedan thrown in for contrast. Inside, manager David Gonzalez copes with an overflowing crowd and counts his blessings. "Every week this year we've been up 6% to 12% over the same week last year," he tells an out-of-state visitor. "It's a good time!"

Les bon temps are roulant, not just in Port Arthur but all up and down the Gulf Coast, from Beaumont to Biloxi. A renewed surge in deepwater production in the Gulf of Mexico has led to one of those periodic booms that have marked the oil-rich region ever since the first well, at Spindletop, just south of Beaumont, blew its top in January 1901. At the same time, a surge in domestic natural-gas supplies, which has come mostly from hard-to-reach shale formations tapped by the controversial fracking process, has pushed domestic oil and gas output to its highest level since 1988. Increased overseas demand for refined products like gasoline and diesel has made America a net exporter of finished petroleum products, something not seen since 1949. And to meet that demand, the oil giants are building and expanding Gulf Coast refineries, the first major investments in such facilities in four decades.

[...]

And it even helps pickup truck sales!

Pickup truck sales fueled by oil drilling boom

The surge in oil and natural-gas exploration is providing a welcome spark for pickup sales, taking up slack from a construction industry that remains in the doldrums.

The flip side of higher gas prices is that energy companies look for more oil, as well as its less expensive derivative, natural gas.

To be sure, a gradually improving economy and pent-up demand are drawing truck customers into the showroom.

"Every time we add a number of wells, we add a lease operator -- and that requires a truck," said Pat Gibson, vice president of Traverse City-based West Bay Exploration, which has 12 to 14 people operating about 80 wells throughout the state. That includes 43 wells in Jackson County, where oil exploration is booming.

"As production increases, you're going to see more" wells and more truck sales, Gibson said. "In Michigan that's still a small amount, but in places like Ohio and North Dakota and Pennsylvania, that's significant." How pickup sales are picking up:

- General Motors' full-size pickup sales rose 14% in March compared with a year earlier as the Chevrolet Silverado posted a 12.1% increase and sales of the GMC Sierra jumped 19.2%.
- Ford F-Series pickup sales rose 13.6% for the first quarter to 143,827.
- Chrysler's Dodge Ram sales were up 23% in March from a year earlier.
- Toyota Tundra sales rose 10.3%.

[...]

I'll have more to say on this later. Poor doomers have no idea what's going on.

[OilFinder2]

All 50!!

Tax Collection Up in All 50 States: US Census

Tax collection rose in all 50 states in fiscal 2011, and in nine states increased by more than 10 percent, according to U.S. Census data released on Thursday that marked the end of a severe revenue collapse.

"The nationwide increases in state government tax revenue are an indication of the stabilization of revenue for state governments," said Lisa Blumerman, chief of the Governments Division at the Census, in a statement.

Tax collections rose the most in North Dakota, 44.5 percent, followed by oil giant Alaska, 22.4 percent. They were up 17.4 percent in California, 15.3 percent in Illinois and 15.1 percent in New Mexico. Wyoming, also a state that produces energy sources, had revenue increase 14.1 percent in the fiscal year.

In Idaho, Colorado and Minnesota, tax collections were up around 10 percent from the previous fiscal year. For most states, fiscal 2011 ended on June 30, 2011.

[...]

[vtsnowedin]

All 50!!

Tax Collection Up in All 50 States: US Census

Tax collection rose in all 50 states in fiscal 2011, and in nine states increased by more than 10 percent, according to U.S. Census data released on Thursday that marked the end of a severe revenue collapse.

"The nationwide increases in state government tax revenue are an indication of the stabilization of revenue for state governments," said Lisa Blumerman, chief of the Governments Division at the Census, in a statement.

Tax collections rose the most in North Dakota, 44.5 percent, followed by oil giant Alaska, 22.4 percent. They were up 17.4 percent in California, 15.3 percent in Illinois and 15.1 percent in New Mexico. Wyoming, also a state that produces energy sources, had revenue increase 14.1 percent in the fiscal year.

In Idaho, Colorado and Minnesota, tax collections were up around 10 percent from the previous fiscal year. For most states, fiscal 2011 ended on June 30, 2011.

[...]

Adjust that all for the real inflation rate on the dollar from all the QE and you have a general decline.

[OilFinder2]

I'll have more to say on this later. Poor doomers have no idea what's going on.

It's time!

I'd normally put all this in this thread, but it might be more fun to put it here instead.

Doomers who think high oil prices are going to hurt the US economy at this point have their heads in the sand. If they were actually paying attention they would understand that the high oil prices they believe hope will kill the US economy are on the cusp of actually helping it.

Take, for example, Ohio. The following is a partial list of infrastructure and industrial projects planned and under construction in preparation for production from the Utica shale (and some Marcellus shale in PA). This shale contains dry gas, wet gas and oil and is being likened to the booming Eagle Ford shale in south Texas. The Marcellus is mostly known for dry gas, but in far western PA and in eastern Ohio it contains wet gas. NGL's are very profitable these days.

-- 350 jobs in a $650 million steel pipe plant in Youngstown.
-- 100 jobs in a $57 million steel finishing mill in Youngstown (which will be right next to the one above).
-- 103 jobs in a $13.2 million natural gas compressor plant in Youngstown. This one recently broke ground.
-- Ohio sand pit doing brisk business from the new drilling.
-- Chesapeake CEO: 200 mils of pipeline, 40 Ohio rigs by the end of the year.
-- Baker Huges to hire 700 people in Massillon, OH, invest $64 million.
-- Even though it's in its infancy, the Utica shale has already created 1,400 jobs in the Youngstown area.
-- 90 mile pipeline to be built to serve a natural gas processing plant.
-- $900 million for a natural gas processing plant that will employ hundreds.
-- Just across the border in far western PA, Shell Chemical to build a $3.2 billion 'cracker' plant.
-- Lots of work for plumbers and pipefitters.
-- Company that makes various kinds of gas and oil processing machinery looking for Youngstown-area factory site employing 50 to 100 people.
-- And in case you didn't get the gist from the links above, here is CNN Money: Youngstown, OH: America's Next Boom Town?.

... If all that weren't enough, county property deed recorders are putting in lots of overtime these days.

But we're just getting started! All this will require thousands of truckers - and thousands of trucks - there will be additional cracker plants, hundreds of miles of pipelines, rail transload facilities, rail lines (including resurrection of some abandoned ones), water treatment plants, plastics plants, etc.

In turn this will create tens of thousands of jobs, whose workers will require housing, so real estate will boom, which will create jobs for construction workers (not to mention realtors), which will increase business at lumber, brick, cinderblock and cabinetry plants ... and lots of these people will eat out, creating jobs for waiters and waitresses (and of course fast food workers), and when they don't eat out they'll have money to buy more at the supermarket, so you'll get new supermarkets built, which will add jobs ... and so on, and so forth, following the entire job multiplier chain. Not to mention these people will have money to buy new cars, and the businesses will need trucks and pickups.

And for the clincher ... take this, and multiply it by 10. Or maybe even 20. That's how many of these plays are popping up. If I'm in a good mood someday maybe I'll make a map of all the liquids-rich shale plays popping up.

So, next time someone tries to tell us how high oil prices are going to hurt the US economy, I'll just bump up this post!

[Plantagenet]

Doomers ... think high oil prices are going to hurt the US economy ......high oil prices .. actually help it.

The US is a big place.

Regions that are part of the oil patch are helped by higher oil prices.

Regions that aren't involved in the oil biz are hurt by higher oil prices.

In the past---contrary to your claim---higher oil prices have ultimately led to recession in the U.S. Perhaps this time will be different. Perhaps not. Time will tell.

[ralfy]

In relation to that, one can look at point 4 here:

http://dont-tread-on.me/?p=4874

That is, only two weeks' or so of food and medicine in various U.S. towns and cities, and the amount of oil needed to transport goods to keep a JIT system afloat.

[Daniel_Plainview]

What is the Spanish word for "parabola" ?

Spain, just posted its monthly consolidated Eurosystem borrowings update for March. And if last week's Italian data was the Easter egg, today's parabola is the Friday the 13th funny, because Spain bank borrowings from the ECB in March soared by... €75 billion, or precisely the same amount as Italy, to €227.6 billion, the highest ever, and a 50% increase over the €152 billion in February. The result: Spain CDS touching 491 bps according to CMA, just 2 bps shy of the November all time wides. Other securities impacted: 10 Year Spanish yield + 10 bps to 5.92%, and a spread over bunds now well into the 400 bps, or 418 bps to be precise. Italy is also catching the contagious bug, with its own 10 year starting to grind wider yet again, now at 5.47%. We have the feeling as more wake up this morning, that this latest glaring confirmation that the PIIGS banks now exist solely courtesy of the ECB, will not be liked by many.

link

[AgentR11]

Doomers who think high oil prices are going to hurt the US economy at this point have their heads in the sand. If they were actually paying attention they would understand that the high oil prices they believe hope will kill the US economy are on the cusp of actually helping it.

Well, there is kinda a give/take with oil prices. Living in Texas its hard to miss. It can, in the end be quite helpful, especially if it draws down US consumption, so that the ratio between amount produced domestically vs amount imported improves. Then all that $120 or whatever goes to US leases, US workers, US machinery companies, etc. Which is quite real economic activity.

The balance though, is that if the price gets so high that industrial activity gets hurt, or if the ratio of domestic/import gets worse, then you can see pretty bad problems in the economy.

For certain though, $120 in 2012 dollars, ain't anywhere near high enough to sting the economy.

[Daniel_Plainview]

Spanish CDS Approaching Record Close

Spanish CDS, at 493bps, have just pushed above their previous record wide closing levels. ...

[Plantagenet]

For certain though, $120 in 2012 dollars, ain't anywhere near high enough to sting the economy.

In the winter of 2011 the US economy was accelerating and the Obama administration was boasting about the coming "recovery summer." But the the fighting started in Libya and Obama started bombing Libya and Libyan oil exports stopped and oil shot up to $120+ and the recovery summer never happened.

So far the US recovery looks stronger this year. Maybe it will take $130 oil to crash it.