US economic recovery is complete. pt 2

[OilFinder2]

We must go all the way back to 1983 to experience conditions as miserable as August, 2011.

LOL!! It's Morning in America yet again!

[OilFinder2]

^
BTW, speaking of Ronald Reagan ... the phenomenon in the articles below illustrates that, yes, supply-side economics does work - at least sometimes. A vast new supply of natural gas and natural gas liquids is keeping a lid on prices, and the combination of both increased supply and lowered price is encouraging petrochemical companies to take advantage of it by building vast new refinery complexes. Thus, this is a case when "supply creates its own demand" actually does work.

In other news, nifty study I encountered over the weekend - since this is a forum about energy issues. Maybe Dad Cleaver will be working in a chemical plant in a few years. And maybe all those long-term laid off people should go back to school to take some chemistry classes.

Shale Gas and New Petrochemicals Investment: Benefits for the Economy, Jobs, and US Manufacturing (PDF)

Access to vast, new supplies of natural gas from previously untapped shale deposits is one of the most exciting domestic energy developments of the past 50 years. After years of high, volatile natural gas prices, the new economics of shale gas are a “game changer,” creating a competitive advantage for U.S. petrochemical manufacturers, leading to greater U.S. investment and industry growth.

America’s chemical companies use ethane, a natural gas liquid derived from shale gas, as a feedstock in numerous applications. Its relatively low price gives U.S. manufacturers an advantage over many competitors around the world that rely on naphtha, a more expensive, oil-based feedstock. Growth in domestic shale gas production is helping to reduce U.S. natural gas prices and create a more stable supply of natural gas and ethane. In its new report, Shale Gas and New Petrochemicals Investment: Benefits for the Economy, Jobs and US Manufacturing, the American Chemistry Council (ACC) uncovered a tremendous opportunity for shale gas to strengthen U.S. manufacturing, boost economic output and create jobs.

[...]

More news on this!

Earlier this month, Shell announced it would build a new ethane cracking plant in either PA, OH or WV. May the best state win! Billions of dollars in investment and thousands of jobs!

LINKY

September 4
Pa. 1 of 3 states with eye on big Shell plant
West Virginia, Ohio also in running for multibillion-dollar petrochemical refinery.
KEVIN BEGOS Associated Press

PITTSBURGH — Big industry may be coming back to the northeast United States.

Shell Oil Co. is nearing a decision on where in the Appalachians to build a huge new petrochemical refinery — a project that could bring thousands of jobs and change the face of the region for decades. The plans are driven by the gas reserves discovered in the Marcellus Shale​.

The scale of the multibillion-dollar project is unlike anything seen for decades in the region, said David Hounshell, a professor of technology and social change at Carnegie Mellon University.

Shell spokeswoman Kelly op de Weegh said the company plans to decide by the end of the year where to build the plant, which would convert natural gas liquids to other chemicals.

The complex would likely attract many smaller, specialized chemical plants, since the main product, ethylene, is used to make chemicals that go into everything from plastics to tires to antifreeze, according to the American Chemistry Council​.

The council estimated the complex could attract up to $16 billion in private investment and create more than 17,000 jobs and billions in tax revenue.

Other U.S. and overseas companies are also considering similar projects in the region.

And then, this out yesterday: Diesel from natural gas!!!

LINKY

SEPTEMBER 14, 2011
Gas-to-Liquid Site May Hit $10 Billion
By BEN LEFEBVRE

HOUSTON—Sasol Ltd., a chemical company long known for squeezing motor fuel out of coal, is now turning its sights on the glut of natural gas in the U.S.

South Africa-based Sasol on Tuesday announced plans to build a plant in Louisiana, at a cost of up to $10 billion, that would convert natural gas into diesel fuel for trucks and other vehicles.

The company's board last week approved an 18-month feasibility study for the project, which would be constructed on land adjacent to Sasol's existing chemical facility in Calcasieu Parish, La.

If given the final go-ahead, the plant would be the first in the U.S. to use "gas-to-liquids" technology. Once seen as futuristic, the technology has gained traction in recent years as discovery of gas supplies have outpaced that of oil.

[...]

The reindustrialization of America has commenced!

[Daniel_Plainview]

Economic Reports Indicate U.S. Economy Heading Down

Default notices on U.S. home mortgages rose 33% in July. Retail sales and food services rose only 0.0% -- adjusted for inflation they were negative. The CPI inflation measure for August came in at 0.4%, almost as high as it was in July. Weekly jobless claims rose again this week, coming in at 428,000. All are pointing to an economy in trouble.

The Great Recession began in the housing market after subprime loans started to default in large numbers in 2007. The U.S. economy will continue to have difficulties until all the excesses are ringed out of house prices. Government policy has instead been geared toward stabilizing the market with temporary fixes. The Federal Reserve instituted a number of programs to funnel money into the mortgage markets to protect the banks that had too much exposure to real estate loans and the Obama administration has created programs like HAMP (Home Affordable Mortgage Program) to lower the foreclosure rate. Banks themselves have avoided or delayed foreclosures as long as possible because they don't want the properties on their books. All the government's efforts have certainly slowed down the rate of foreclosures and that may ultimately be all that they accomplish. A 33% increase of foreclosure notices in July indicates a new wave of foreclosures is likely next year.

Meanwhile, U.S. retail sales are declining if you take inflation into account. Retail sales increased strongly with rising home prices in the first years of the 2000s, but after the housing market turned south they have yet to recover. They have been held up by trillion dollar plus annual federal budget deficits, Federal Reserve money printing, and government stimulus programs including the "Cash for Clunkers" gift to the auto industry. Despite all of these efforts, retail sales and food services were up 0.0% in July (the same 0.0% for jobs created in August). The mainstream media reported 0.1%, but this is only the retail sales component of the report. The report is not adjusted for inflation, so even if retail sales rose 10% a year, but inflation was also 10%, there would be no actual growth (although that is not the story you would get from mainstream news sources).

Retail sales are crucial for the U.S. economy because they make up approximately 70% of GDP. If they don't grow in real terms (after being adjusted for inflation), it is difficult for the economy to grow. To get a quick read on how the retail sales numbers are being impacted by rising prices all that is necessary is to look at the gasoline sales subcomponent. There is no reason to think Americans are using a lot more gasoline from year to year, if anything less is being used. Yet, year over year gasoline sales are up 20.8%. This is caused by inflation. Retail sales and food services overall were up 7.2% year over year. Adjusted for a realistic inflation rate, this number would be somewhat negative.

That is not to say that the government is reporting an inflation rate that high. The just released CPI for August was 0.4% or 4.8% on an annualized basis. It was 0.5% in July or 6.0% on an annualized basis. Alternative inflation measures from ShadowStats.com indicate actual U.S. inflation is several percentage points higher than the official numbers indicate. ShadowStats.com calculates its inflation numbers the same way the U.S. government did in the 1970s. Since there have been many changes in how U.S. inflation is determined since then, it is not meaningful to compare current numbers to the past ones since doing so is like comparing apples to oranges. The ShadowStats numbers indicate that inflation is much higher now or if you don’t accept that, then you are left with the absurd conclusion that high inflation didn’t exist in the 1970s (you will find that this is the case if you use current methods to recalculate the 1970s inflation numbers).

The other major drag on the U.S. economy - lack of jobs - also seems to be getting worse. Weekly claims rose again this week to 428,000. Over 400,000 is considered a recessionary level. With the exception of a few weeks, these have been continually over 400,000 for almost three years now, indicating an ongoing recession (despite all the claims to the contrary of a recovery). The trend is actually worse than it appears however. These numbers should strongly regress toward the mean (move back to the long-term average), but haven't as of yet. As a recession goes on eventually everyone that is going to be laid off eventually has been and that should cause this number to decline for statistical reasons even if the economy isn't improving. That it has managed to stay at such high levels for almost three years is truly amazing.

The overall picture provided by U.S. economic reports indicates a flat or declining economy with rising inflation. Little progress seems to have been made in the last three years. The new credit crisis arising in Europe is only going to make matters worse. The U.S. economy was merely weak before Lehman Brothers defaulted, but it fell off a cliff after that.

[OilFinder2]

Hmmm, let's see ... we've got planes (Boeing), we've got automobiles (BMW, Maserati, etc.), now all we need is the trains!

And here they are!



LINKY

Greenbrier, ARI See Strong Railcar Market
John D. Boyd | Sep 15, 2011 8:41PM GMT
The Journal of Commerce Online - News Story

Builders say equipment market cycle should keep growing for years

Railcar manufacturer Greenbrier and American Railcar Industries continue to see strong demand to build new units, in what they say is an equipment market cycle that should keep growing for several years.

Amid widespread concern about where the economy is headed, “the sky is not falling, at least in the rail space and the rail supply space,” Mark Rittenbaum, Greenbrier’s chief financial officer told the Morgan Keegan investors conference Sept. 13 in Chicago.

Instead, Greenbrier executives see “the early innings of a sustained recovery” in railcar production, he said. The North American manufacturers have an orders backlog of 57,000 units, the highest since 2008.

Rittenbaum also said Greenbrier has that company has “ramped up our production rates significantly, from building a little over 2,000 cars in its fiscal 2010 to about 9,000 in the 2011 year that ended in August. “And our fiscal 2012 is going to be substantially in excess of that number,” he said.

Dale Davies, CFO at American Railcar Industries, said ARI is also “in a ramp-up mode.”

For calendar 2011, he said “we’re going to see the last six months be a lot larger than the first six months” in terms of car production.

[...]

LINKY

KCS Rail Freight Grew in Mid-September
John D. Boyd | Sep 15, 2011 2:05PM GMT
The Journal of Commerce Online - News Story
No indication so far that new recession threatens, says CFO Upchurch

The rail freight market has strengthened further in the first two weeks of September for Kansas City Southern, after a strong August performance, said the company’s chief financial officer.

As of this week, “there’s nothing we see in our business that would give us any indication that we’re heading back into any type of a double-dip” recession, KCS’s Michael Upchurch told the Morgan Keegan transportation conference Tuesday in Chicago.

That was the latest in a growing series of reports out of the freight rail sector that shipments are still rising even though net job creation stalled last month.

Upchurch said based on average daily carloads “August of this year was the best month we’ve had in the last five years.” And in the first half of September, he said, “we’ve actually seen a continuation, where the average daily carloads have gone up over the August average.”

Separately, the industry reported that railcar owners across North America pulled more parked cars out of storage in August, as freight traffic perked up some from summer lows.

[...]

[Daniel_Plainview]

WSJ -- Economists Say That U.S. Recession Looks More Likely

By PHIL IZZO

Economists see a one in three chance the U.S. will slip into recession over the next twelve months and doubt any steps the Federal Reserve might take at its meeting next week can change that. Those are the highest odds for a new downturn that the economists in the The Wall Street Journal survey have given since the start of the recovery—and up four percentage points from last month's poll. Economic strains have escalated amid market turmoil, the stumbling job market and concern about European stability.

"It feels like a recessionary environment. What they call it later on I can't tell you," says Bart van Ark, chief economist of the Conference Board, who put the odds of recession at 45%. Since 1988, every time the Conference Board's estimate of the probability of recession topped 40%, a downturn followed shortly thereafter. "The consumer has never really thought that we got out of the recession," he adds.

... The majority of economists said three [likely] steps by the Fed — launching Operation Twist, altering interest on reserves or setting more explicit targets — would have little to no effect. Twenty-two of the 50 economists who responded to the question said more asset purchases would have somewhat or a significant impact on the economy, but 19 said the effect would be small and nine said it would be negative.

"All the major cards have been dealt. The monetary actions will only have marginal effects on the economy," says Song Won Sohn of California State University.

In line with this gloomy outlook, the economists lowered their growth forecasts for the rest of 2011 and 2012. They now expect gross domestic product to expand less than 2.5% at a seasonally adjusted annual rate for the rest of this year and for all of next—down from estimates near 3% just two months ago. As a result, they expect the economy to add just 125,000 jobs a month over the next year, barely enough to keep up with population growth. Last month they estimated the economy would create about 148,000 jobs a month.

[Daniel_Plainview]

Economists Double Down on a Double Dip Recession

A new series of economic reports out today confirm U.S. economists’ fear that the early signs of a second recession are taking hold.

Weekly jobless claims hit a 2-month high indicating employers are pulling back in an already weak labor market. Labor Department figures show jobless benefits applications rose 11,000 to 428,000 last week, pushing the average up for the fourth straight week to 419,500. Economists agree that applications need to dip below 375,000 to signal hiring is picking up enough to cut the nation’s 9.1 percent unemployment rate. “The trend in jobless claims is an important input into our recession probability model, and if this trend were to continue for a number of weeks it would raise a warning flag on the state of the economy,” said John Ryding, chief economist at RDQ Economics.

Americans purchasing power dropped as consumer prices rose 0.4 percent in August, according to a separate Labor Department report. Consumers paid 1.2 percent more for gas, 1.1 percent more for clothes, and 0.5 percent more for food. Rental costs for housing rose 0.4 percent, the most in almost 3 years, , a reflection of poor home sales.

...Manufacturing activity in the Northeast contracted so far this month, according to surveys out today from the Philadelphia and New York Federal Reserve banks. This follows a Philadelphia Fed report out last month that showed that the business activity index in Pennsylvania, Delaware, and parts of New Jersey fell to minus 30.7 from positive 3.2 a month earlier.

According to manufacturing industry insiders, the new figures are not encouraging. The auto surge drove up the manufacturing average, covering up widespread slackening in the rest of the sector, said Cliff Waldman, an economist at the Manufacturers Alliance/MAPI.

“If you look away from the post-tsunami bounce, though, you see a significant weakening in some very basic supply chain sectors that the U.S. needs: machinery, non-metallic metals, and construction supplies,” said Waldman. Machinery output dropped 0.4 percent and construction supply manufacturing dropped 0.2 percent last month, the report shows. “Given this scenario, you’re going to actually see drops in ordering numbers and profits, and weakening hiring prospects in key manufacturing companies like Caterpillar, John Deere, and others who produce supplies for other manufacturers.”

[TheAntiDoomer]

US Consumer Sentiment in Early September Is Better Than Expected (Story Developing)

[Armageddon]

How bad were they expecting it is the question. It's easy to beat something when you set the estimate LOW. The sheep don't care about numbers, they care about what the teevee reporter tells them.

[Armageddon]

Consumer Confidence Beats Expectations As Consumer Expectations Tumble To Lowest Since 1980, Inflation Outlook Rises

Lowest since 1980 ? LOL, damn details.

[Daniel_Plainview]

US Consumer Sentiment in Early September Is Better Than Expected (Story Developing)

Every once in a while it's a good idea to read beyond the headline.

Reuters: Consumer Expectations Plunge to Lowest Level since May, 1980.

The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment edged up to 57.8 from 55.7 the month before, which had been the lowest level since November 2008. It topped the median forecast of 56.5 among economists polled by Reuters.

"Overall, the data indicate that a renewed downturn in consumer spending is as likely as not in the year ahead," survey director Richard Curtin said in a statement.

"Even without a downturn, consumer spending will not be strong enough to enable the rapid job growth that is needed to offset reduced long-term expectations."

The gauge of consumer expectations dipped to 47.0 from 47.4. It was the lowest level since May 1980. The economic outlook for the next 12 months fell to 38 from 40, the lowest since February 2009 when the world economy was gripped by the credit crisis. ... "Confidence still remains disturbingly low. It was certainly nice to see the current conditions index rise again, but all we did was retake some ground to where we were in July," said Tom Porcelli, senior U.S. economist at RBC Capital Markets in New York.

"I don't think this report is important for the Fed meeting next week, but I do think the overall lack of consumer confidence will be very important."

Consumers have become increasingly pessimistic about the strength of the recovery this year amid worries the U.S. economy could fall back into recession. A recent Reuters poll of economists put the odds at one in three.

Confidence in economic policies remained near historic lows after being damaged by political wrangling over raising the U.S. debt ceiling. Three out of four consumers expected bad times for the economy in the year ahead. Only half of respondents said the same at the beginning of the year.

The survey's one-year inflation expectation rose to 3.7 percent from 3.5 percent, while the survey's five-to-10-year inflation outlook rose to 3.0 percent from 2.9 percent.

We need to delve all the way back to 1980 to witness consumer expectations as LOW as they are in August, 2011.

Remember 1980?

[The Practician]

Daniel, that Maverick is clearly from the mid 70's, not the 80's.

[AgentR11]

YOU DOG YOU!!!

You had TWO floppy drives!!! TWO!!!??!!?!?!?!? *RAGE*

*insert disk 2
*insert disk 1
*insert disk 2
*insert disk 1
*insert disk 2
*insert disk 1
*insert disk 2
*insert disk 1
*insert disk 2
*insert disk 1
*insert disk 2
*insert disk 1

oops wrong disk

** error
G************* GIVE ME THAT SLEDGEHAMMER RIGHT NOW!

[Daniel_Plainview]

Daniel, that Maverick is clearly from the mid 70's, not the 80's.

It's a 1979 Ford Maverick (1979 is the last year the Maverick was produced ... so that's the closest thing to a 1980 Maverick).

Upon further consideration, I should have gone with a 1980 Ford Fairmont Station Wagon



Or the 1980 Town & Country Cruiser

[Daniel_Plainview]

YOU DOG YOU!!!

You had TWO floppy drives!!! TWO!!!??!!?!?!?!? *RAGE*

*insert disk 2
*insert disk 1
*insert disk 2
*insert disk 1
*insert disk 2
*insert disk 1
*insert disk 2
*insert disk 1
*insert disk 2
*insert disk 1
*insert disk 2
*insert disk 1

oops wrong disk

** error
G************* GIVE ME THAT SLEDGEHAMMER RIGHT NOW!

LOL. The beloved Radio Shack TRS-80.

[AgentR11]

LOL. The beloved Radio Shack TRS-80.

That picture does make me think back though....

When I was a just a young little programmer.... [kids all yell... FLEEEEEEEEEE].

Watched my 11 yr old doing reasonably high end video editing the other night, and I just felt like wandering around the house mumbling, F F F F F ...

[kublikhan]

YOU DOG YOU!!!

You had TWO floppy drives!!! TWO!!!??!!?!?!?!? *RAGE*

You had a floppy disk??? A DISK!?!? RAGE!!!!

*insert tape*
*wait for 20 minutes to find program on tape*
*this is taking too long, fast forward....*
*crap, went too far, rewind....*
*wait another 20 minutes....*

Ah forget it!!!!!

[dolanbaker]

AH that brings back memories, I had a Vic20, I used my sisters old "Bay city rollers" tape to record the programs

[the48thronin]

AH that brings back memories, I had a Vic20, I used my sisters old "Bay city rollers" tape to record the programs

Vic 20 commodor 64 let me look out in the barn, that vic 20 is out there somewhere under the junk pile...LOL

HMM an afternoon playing PING

[Daniel_Plainview]

Housing Starts Plunge 5% to Three-Month Low
Tuesday, 20 Sep 2011 08:43 AM

Builders broke ground on fewer homes in August, evidence that the housing market remains depressed. The Commerce Department said Tuesday that builders began work on a seasonally adjusted 571,000 homes last month, a 5 percent decline from July and a three-month low. That's less than half the 1.2 million that economists say is consistent with healthy housing markets. Single-family homes, which represent roughly two-thirds of home construction, fell 1.4 percent. Apartment building plunged 12.4 percent. ...

[yeahbut]

The world economy has entered a "dangerous new phase," according to the chief economist of the International Monetary Fund. As a result, the international lending organisation has sharply downgraded its economic outlook for the United States and Europe through the end of next year.

The IMF expects the US economy to grow just 1.5 per cent this year and 1.8 per cent in 2012. That's down from its June forecast of 2.5 per cent in 2011 and 2.7 per cent next year.

To achieve even that still-low level of growth, the US economy would need to expand at a much faster rate in the second half of the year than its 0.7 per cent annual pace in the first six months.

linky