Here Comes The Double Dip Pt. 4 (merged) Archived

[Daniel_Plainview]

Yep, and oil prices are reflecting the decrease in demand, down to $84/$100 (WTI/Brent) ...Volatility: it's the the new economic reality.

Indeed.

[TheAntiDoomer]

The bottom line is: expanding economies are ALWAYS accompanied by increasing oil consumption; whilst contracting economies are ALWAYS accompanied by diminishing fuel consumption.

WOW, DP you have demonstrated yourself as compeltly and utterly clueless. Almost all european economies have been expanding WITHOUT increased fuel consumption for YEARS now.



Are you actually going to make the argument that the German, North Korean, Mexican and Canadian Economy have not grown in the past 20 years despite flat oil consumption. You're BUSTED DP, for lack of knowledge and posting compeltly false statements.

[Daniel_Plainview]

The bottom line is: expanding economies are ALWAYS accompanied by increasing oil consumption; whilst contracting economies are ALWAYS accompanied by diminishing fuel consumption.

WOW, DP you have demonstrated yourself as compeltly and utterly clueless. Almost all european economies have been expanding WITHOUT increased fuel consumption for YEARS now.



Are you actually going to make the argument that the German, North Korean, Mexican and Canadian Economy have not grown in the past 20 years despite flat oil consumption. You're BUSTED DP, for lack of knowledge and posting compeltly false statements.

If you heed the original post, the focus was Europe's oil consumption declining precipitously (2%) in just one year. This is a sign of a sudden, debilitating collapse in economic activity.

Keep in mind that oil was $10/bbl in the late 1990's, but $100/bbl in 2012. Obviously, unless demand is perfectly inelastic, there will be a decrease in demand for oil when the price INCREASES TEN-FOLD.

But thanks for the post ... we appreciate confirmation that you're a moron.

[TheAntiDoomer]

^so you are admitting your "bottom line" is bottom crap?

"The bottom line is: expanding economies are ALWAYS accompanied by increasing oil consumption; whilst contracting economies are ALWAYS accompanied by diminishing fuel consumption."

[Daniel_Plainview]

French president Francois Hollande cuts retirement age to 60

France's new socialist government cut the country’s retirement age in the face of the eurozone’s deepening crisis, citing “social justice” to explain a move that goes against austerity efforts across the region.

Oh geee! Let's all have fun! Wheee! To hell with reality! To hell with collapse! Whee!

[Daniel_Plainview]

^so you are admitting your "bottom line" is bottom crap?

"The bottom line is: expanding economies are ALWAYS accompanied by increasing oil consumption; whilst contracting economies are ALWAYS accompanied by diminishing fuel consumption."

No, I'm assuming that the reader views my post in context ... namely, that the discussion is focused on the relevant (i.e. 1-3 years) time frame ... NOT A 20-YEAR TIME FRAME.

It doesn't make sense to compare apples to oranges ... which you're trying to do by expanding the time-frame in such a way that the price of fuel (which increased 10-fold) becomes the dominant determining factor.

For mentally challenged readers, I should have said:

"The bottom line is: within a relevant, practical, meaningful time frame, (and other things being equal) expanding economies are ALWAYS accompanied by increasing oil consumption; whilst contracting economies are ALWAYS accompanied by diminishing fuel consumption."

Once you expand your scope of inquiry beyond one year (or beyond the relevant time frame), then you introduce a host of other intervening factors (such as price changes) which render any comparison meaningless.

[Daniel_Plainview]

Fitch slashes Spain rating by three notches to 'BBB'

NEW YORK/MADRID, June 7 (Reuters) - Spain's credit rating was slashed by three notches on Thursday by Fitch, which signalled it could make further cuts as the cost of restructuring the country's troubled banking system spiralled and Greece's crisis deepened.

Fitch cut its rating on Spain's government debt by three notches to BBB and placed the country on 'negative outlook', meaning a further downgrade could come in coming months.

The new rating was Spain's lowest among the three main ratings agencies, and leaves it just two short of junk status, which would force many institutional investors to automatically dump Spanish assets.

"The negative outlook primarily reflects the risks associated with a further worsening of the euro zone crisis, notably contagion from the ongoing Greek crisis," the agency said in a release accompanying the downgrade.

Fitch said the rating downgrade reflected higher than expected recapitalisation needs for Spanish banks, which it said would be around 60 billion euros ($75 billion), or as high as 100 billion euros under a more severe stress scenario.

The country's rating also assumed the country would receive European help in recapitalising its banking system. Fitch said recapitalisation costs would push the country's debt to gross domestic product ratio up by 6 percentage points more than expected, and the ratio would peak at 95 percent in 2015.

Fitch acted without waiting for a widely expected EU rescue. Chancellor Angela Merkel said Europe was ready to act to ensure stability in the euro zone.

Spanish Prime Minister Mariano Rajoy said he would wait for the results of independent audits of the banking system before talking with Europe about how to recapitalise troubled lenders.

An International Monetary Fund report due out next Monday is expected to show Spanish banks need at least 40 billion euros ($50 billion), financial sector sources said.

[OilFinder2]

GOLD PLUNGES $46.20 AS BERNANKE OFFERS NO HINT OF QE3, BEING AS THE U.S. ECONOMY DOES NOT NEED IT

The price of gold fell sharply Thursday after Federal Reserve Chairman Ben Bernanke indicated that no new economic stimulus measures were imminent.

Gold tends to fall when traders expect the value of the dollar to rise, which is a likely outcome if the Fed doesn't extend its bond-buying program or take other steps intended to keep interest rates extremely low.

With a stronger dollar more likely, gold fell. Gold futures fell $46.20 an ounce, the most since early April, to $1,588 an ounce.

On Friday, the exact opposite happened: A dismal jobs report caused a plunge on the stock market and raised expectations that the Fed would take more steps to stimulate the economy, weakening the dollar in the process. On that day gold jumped $58 to $1,622 an ounce.

The sharp moves up and down aren't likely to stop until there's a clear answer from the Fed about whether or not more monetary easing is on the way, said Jon Nadler, senior analyst at Kitco Metals. That may take until June 20, when the Fed holds its next policy meeting, or even later.

Nadler said the rapidly waning and ebbing expectations of more Fed stimulus have been "buffeting" the gold market in recent weeks, causing sharp swings. "All it takes is Bernanke not saying something they expected him to say and the market crumbles."

[...]

[OilFinder2]

Oh yeah, and as I type this, gold is in complete free-fall, having tumbled more than $20 in just a couple minutes.

[ralfy]

The economic expansion minus an increase in oil consumption is brought about by increased borrowing and spending, and generally more money created. Meanwhile, there may be increased consumer spending if the goods are manufactured elsewhere. In which case, a drop in oil consumption in some countries are offset by increases in others, leading to a global increase in oil consumption, as seen in IEA demand charts.

Any "recovery" then is merely based on increased debt (and with it, spending) used to fuel a fire caused by increasing debt, which means subsequent crises will be worse. Behind that economic predicament is the threat of a resource crunch caused by increased spending.

[Daniel_Plainview]

Bank of France cuts second-quarter growth forceast to -0.1pc
The Bank of France expects the economy to shrink in the second quarter and German import/export data was worse-than-expected as fears over the financial health of eurozone countries mounted.

The French central bank cut its second-quarter growth estimate for the eurozone's second biggest economy, and now expects it to contract by 0.1pc. It had previously expected growth to be essentially unchanged in the three months from April through June. If the figures are confirmed it would be the first contraction since France pulled out of recession in 2009.

Meanwhile, exports from Germany, Europe's biggest economy, dropped 1.7pc in April compared with the previous month - a fall that followed three consecutive months of gains. The country's imports were down 4.8 in April compared with the previous month, also ending three months of increases.

Both missed analyst expectations of -0.7pc and -0.1pc respectively.

... Italy's industrial production plunged 1.9pc in April over a month as an economic recession grinds on, official data agency Istat said, after a rise of 0.6pc in March. The fall was much bigger than expected. ...

Spanish 10-year bond yields initially jumped 17 basis points before falling back to just over the 6pc "danger level".

... Meanwhile, French unemployment continued to rise in the first quarter of 2012, hitting the symbolic level of 10pc, up by 2pc from the previous three-month period INSEE said Thursday....

[Daniel_Plainview]

Krugman experienced a momentary flash of clarity.

Era since 2007 is best viewed as a depression: Paul Krugman

There's no question that America's recovery from the financial crisis has been disappointing. In fact, I've been arguing that the era since 2007 is best viewed as a "depression," an extended period of economic weakness and high unemployment that, like the Great Depression of the 1930s, persists despite episodes during which the economy grows.

[Lore]

Shouldn't this thread then be renamed, as the dip that never left?

[Cloud9]

Go back and read the headlines of the 1930's. There were green shoots everywhere and recovery was just around the corner. What's different this time? Oil.

[dohboi]

Financial mania: why bankers and politicians failed to heed the warning signs of the 2008 credit crisis

Western economies displayed the same kind of manic behaviour as psychologically disturbed individuals in the run up to the 2008 credit crisis -- and it could happen again, according to a new study.

Bankers, economists and politicians shared a “manic culture” of denial, omnipotence and triumphalism as they threw caution to the wind, says Professor Mark Stein, the award-winning academic from the University of Leicester School of Management.

[Daniel_Plainview]

Aah! Aha! Germans are (finally) beginning to see the light.

From Der Spiegel:

Playing Chicken Until the Germans Lose Their Nerve
For Germany, being part of the European Union has always included an element of blackmail. France has been playing this card from the beginning, but now the Spanish and the Greeks have mastered the game. They're banking on Berlin losing its nerve.

Hollande is returning to the tried-and-true method of weakening the Germans by undermining their economic strength. The next stage in the crisis will be blatant blackmail. With their refusal to accept money from the bailout fund to recapitalize their banks, the Spanish are not far from causing the entire system to explode. They clearly figure that the Germans will lose their nerve and agree to rehabilitate their banks for them without demanding any guarantee in return that things will take a lasting turn for the better. ... The Greeks will bargain with the other EU countries to see what it's worth to them to see Greece abandon the euro. The Greeks no longer have much to lose; but their EU neighbors -- and particularly the Germans -- still do. This discrepancy will determine the price to be paid.

This is priceless ... but when will the German taxpayers realize how badly they're being manipulated and screwed over by their conniving neighbors?

Soon, very soon.

[Daniel_Plainview]

More reality from Germany!

German debt crisis fears as exports fall
German exports fell for the first time this year amid signs that the advancing debt crisis is hitting Europe's powerhouse economy.

Poor economic data in France and Italy underscored the impact of Spanish instability on the euro area.

The Federal Statistics Office in Wiesbaden said exports, the pillar of the German economy, fell 1.7pc in April from the month before - far more than the 0.7pc expected by analysts.

At the same time, imports plunged 4.8pc - far over-shooting the 0.1pc decline forecast - suggesting a sharp fall in business and consumer confidence. Germany's trade balance fell to €14.4bn from €17.4bn.

The latest figures showed that German industrial production slumped 2.2pc in April because of falling foreign demand.

Andreas Scheuerle, an economist at Dekabank in Frankfurt, told reporters: "German companies feel that foreign demand isn't as dynamic as it used to be as the global economy is entering a weaker phase. The weakness originates in the euro area, where the debt crisis can no longer be felt only through budget cuts and austerity but increasingly creates uncertainty about economic prospects, which is reflected in weaker investment."

The Italian government, struggling to impose reforms, was hit by another set of poor data: industrial production fell 1.9pc - the third big fall in four months.

James Nixon, an economist at Societe Generale, said in a note that the data "already suggest that Italy is heading for another big fall in GDP in Q2 and could easily be on course to hit Confindustria's [the main organisation representing Italian manufacturing and services companies] forecast for a full one percentage point drop".

There was bad news in France, too, where the central bank cut its growth forecast for the second quarter to -0.1pc amid falling confidence. The Bank of France said business sentiment fell to 93 in May from 94 the month before. French business confidence hasn't risen all year.

Analysts at Charles Schwab in London said: "The European crisis continues to escalate and we are recommending that investors underweight European equities. Hopes of a sustainable solution in the near term are virtually nonexistent, while contagion fears are rising." ..

Here's a quick note to the Cornies" "REALITY IS A BITCH!"

[Daniel_Plainview]

Spain too big for EU rescue fund as China recoils

As Spain edges closer to a full sovereign rescue, economists have begun to doubt whether the EU bail-out machinery can raise such large sums funds at viable cost on global capital markets.

... the fat lady is beginning to clear her throat as she contemplates practicing her arpeggios ...

[dsula]

This is priceless ... but when will the German taxpayers realize how badly they're being manipulated and screwed over by their conniving neighbors?

Soon, very soon.

The German taxpayer already realized this long ago (with the entry into to EU). But since Germany is not a democracy, but some sort of dictatorship, there's nothing the general population can do, only suck it up.

[Daniel_Plainview]

This is priceless ... but when will the German taxpayers realize how badly they're being manipulated and screwed over by their conniving neighbors?

Soon, very soon.

The German taxpayer already realized this long ago (with the entry into to EU). But since Germany is not a democracy, but some sort of dictatorship, there's nothing the general population can do, only suck it up.

The Germans can VOTE OUT the current leadership (much like the French voted-out Sarkozy).