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Is The Oil Glut Real?



As it appears GDP will be seasonally adjusted again, I find myself wondering just one thing: why?

Earlier GDP figures showed the US economy on the brink of recession for the first two quarters of this year. Now, with more fudging going on, who knows what it will show. The government appears to be following the Hollywood mantra: if you can bend perception enough, it will become reality. Look no further than the Federal Reserve, which continues to raise expectations of higher interest rates in the second half of this year, in hopes of inducing faster growth.

Of course, the age of propaganda is now upon us; where perception trumps the truth, until that is, the house of cards burns and falls, which it always does. The US consumer responded to lower gas prices not by spending but by saving, despite predictions from investment banks and the Fed. They saw through the ruse and continue to feel the effects of 6 years of Keynesian money printing where the standard of living is falling. Inflation, while abated short term, won’t stay low forever. Nor will gas prices.

Goldman Sachs (GS) continued its streak of bearish calls on oil right at a time when the dollar took off (just by coincidence), based on the notion that $60 oil was good enough to increase drilling activity. That too will prove to be dead wrong just like every other piece of propaganda spewed from that bank. After hearing most of the major E&P earnings calls, I did not come away with any impression that the magic price to increase capital expenditures was $60 per barrel, or even $70 for that matter.

I could be wrong, and may have missed something, but what I heard was merely that one or two firms, when asked at what price they would start adding rigs, responded by saying roughly around $70 per barrel. But they did not say that the spigot would be turned on by a huge amount. The market appears to buy into the perception that supply greatly exceeds demand. But I disagree with that analysis completely.

Capital spending was, lo and behold, also dramatically revised higher in previous months, fully consistent with the pending “revised” quarterly GDP data for the first half of this year. With such blatant data manipulation going on, why shouldn’t we question the extent of stated “glut” in oil? After all, as stated here before almost every cry for this “glut,” – from Cushing overflowing to production increasing by 900,000 barrels per day in the US – turned out to be wrong.

This is why prices have recovered from lows, as the end of the world for oil never came. Production has flattened, and is now poised to fall, while inventories are declining. This is the opposite of what was perceived months ago.

The longer perception is distorted to create a false reality, the worse things will get in the end. We saw this before in 1999/2000 with the internet bubble and in 2008/2009 with the housing bubble, and it will not end well. In equity bubbles, false realities can last for longer, which we are seeing now in other assets. In commodities it’s harder because they are physical, are consumed and, eventually, will be measured correctly. I have maintained that the supply/demand imbalance won’t be nearly as great as portrayed as numbers get revised.

Even the US consumer sees through this. According to Goldman Sachs’ own retail sales statistics for the week ending on May 23 sales growth remained subdued at 1.8% pace. The rig count has not increased even with oil at the $60 level. It won’t increase for some time and when that reality sets in, the numbers will no longer be fudged as the supply of oil here in the US will dry up as existing wells deplete. What will result is a snap back to prices above the normalized price of $70 and that won’t be pretty for the US consumer.

If producers are dumb enough to get roped in to turning the spigot on when oil does rise then, once again, prices won’t hold. By 2016, I fully expect that low cost oil will be depleted and prices will need to rise to spur more activity as costs rise. In the short term, expect producers to consolidate assets through M&A activity, which will accelerate as we move through 2015.

45 Comments on "Is The Oil Glut Real?"

  1. Northwest Resident on Fri, 29th May 2015 9:29 am 

    Just ask the glutster. He’ll tell you all about it.

  2. joe on Fri, 29th May 2015 9:36 am 

    Yeah, it’s all about dodgy figures and market share. Let’s recap, ISIS takes over half of syria and iraq, declares itself and enemy of both KSA and Iran, now the US is supplying both nations army, one directly, one by proxy, and supplies ISIS by what Irans proxy leaves for them when it turns and runs. Indeed there is an oversupply issue, given what’s going on in the ME, if there wasn’t an oversupply then oil would certainly be over 150, or am I missing something? KSA will likely witness sectarian division as the religious insanity it fosters in collaboration with the wahhabis comes home to topple them. Who will invade and stabilise KSA when ISIS finally provokes a civil war? ISIS main goal is apocalypse, when people finally realise their aim, then their movements can be predicted, right now, they are not interested in oil, other than helping to fight war. They literally want Armageddon.

  3. Davy on Fri, 29th May 2015 9:43 am 

    N/R, I can’t wait to hear planters response on this one or maybe the NOo will chime in. The NOo is in bed now with severe depression. Even his marm altra-ego is quiet. It must be the growth numbers posted today. The corns have been quiet lately. Hard to preach hopium with bad news everywhere.

  4. Northwest Resident on Fri, 29th May 2015 9:57 am 

    Davy — We all know what Planter will say: “Oil glut! Oil glut! How can anyone deny that we are in an oil glut!”

    He’s a broken record…

    If I remember correctly, we first had the rapid plunge in oil prices beginning last year, and sometime afterwards, once everybody’s jaws had already hit the floor, then came “the oil glut” explanation.

    I still think the rapid price plunge in oil is/was a combination of the bottom dropping out of global demand combined with (or perhaps due to) the low net energy of today’s production raising its ugly head out of the fog of debt that had been created to hide it.

    And the glut? That was a fabricated meme to explain away the price plunge — intended for consumption by investment suckers — along with the whole “Saudis manipulating the oil market” meme — just a bunch of lies and propaganda to cloud up the real issue which is, the global and national economies can’t run on the oil being produced today, not for much longer anyway.

    Trolls like Planter are here merely to repeat and reinforce the propaganda. I even doubt that Plant really believes his own assertions about the “oil glut” — he just repeats “oil glut” constantly, without any inspired or heart-felt defense of his assertion. You know, like he’s just doing a nasty grunt-work job — which he probably is.

  5. GregT on Fri, 29th May 2015 9:58 am 

    Islam does not believe in a separation between church and state. The people are fed up with being oppressed by the brutal dictators installed by western interests, and they are fed up with being forced to live in poverty while their countries’ resources are being plundered.

  6. rockman on Fri, 29th May 2015 11:18 am 

    NR – “I still think the rapid price plunge in oil is/was a combination of the bottom dropping out of global demand combined with (or perhaps due to) the low net energy of today’s production raising its ugly head out of the fog of debt that had been created to hide it.” Nice. And the supplement: the rapid price decline has now buoyed the global demand for oil thus soaking up whatever temporary “glut” there was…if there was any at all.

    Essentially the world is consuming every bbl of oil the producers can deliver today…which is around an all time high.

  7. Plantagenet on Fri, 29th May 2015 12:26 pm 

    Rockman is right, as usual.

    The folks who can’t figure out that the world is in an oil glut are wrong, as usual.

    Situation normal.

  8. GregT on Fri, 29th May 2015 12:42 pm 


    Which part of “Essentially the world is consuming every bbl of oil the producers can deliver today” do you have trouble understanding?

  9. Chris Hill on Fri, 29th May 2015 1:01 pm 

    Supply and demand usually end up meeting somewhere. The price drops, people use more, the price rises they will use less. Sad thing is that there are always a few who believe the price will stay down and go buy a house farther from work or a vehicle that gets worse mileage when the gas price is low and are then surprised when things change. Things will change, I guess within the next nine months. I’ve been wrong before but I’m feeling pretty good about this one.

  10. BC on Fri, 29th May 2015 1:14 pm 

    Note gents (and any ladies courageous enough) that the 4 qtr. average seasonally adjusted annualized rate (SAAR) of the YoY change of real final sales per capita as of Q1-Q2 has decelerated below the historical “stall speed” prior to recessions.

    Moreover, the sum of real per capita after-tax profits and disposable personal income and total gov’t receipts have similarly decelerated to a rate from a peak that historically was followed by the average 4-qtr. average of real final sales being ~0%, i.e., recessionary, for 4-6 qtrs. thereafter.

    Then subtract from real final sales per capita the accelerating rate of so-called “health care” spending, and the SAAR 4-qtr. average is slower still.

    The caveat here is that the historical “stall speed” that has averaged ~2% since after WW II might now be significantly slower given the dramatic deceleration of the average rate since 2007 at ~0-0.5%.

    Finally, with the dramatic deceleration of real final sales per capita to ~0% since 2007, the US economy is much more vulnerable to any number of shocks, including weather, drought, natural disasters, labor actions, energy, and geopolitics. In fact, consumer prices have accelerated YTD in recent months to 2.3-3% annualized, which is above the post-2007 trend of ~1.75%, suggesting that the seasonal acceleration of consumer price inflation will drag on growth of real final sales against more challenging YoY comparisons going into the summer-fall.

    Therefore, the plunge in the price of oil since last summer-fall is consistent with the US and world economies decelerating to “stall speed” and perhaps the onset of recession beginning in Q4.

  11. GregT on Fri, 29th May 2015 1:15 pm 

    But when the cost to supply, exceeds the affordability of demand, they don’t meet anywhere at all.

  12. BobInget on Fri, 29th May 2015 1:18 pm 

    The world is currently consuming more oil (93.6)
    M B p/d) then it produces;

    I love it when market mavins keep saying “It’s a sluggish market” Thank God. As it is, we are short just under a Million barrels p/d.

    Why the confusion? You ask.

    When Saudis decided to go for broke, there were not as many wars. Militaries loath transparency. When tanks, fighter jets roll out
    fuel gages go south. It’s really that simple.
    Do your own Google searches, it’s true.

    Add war premiums, higher tanker rates, exploding
    pipelines, insurance, derailments, lower gas price inspired SUV purchases and there goes world wide glut propaganda out the door.

    Nevertheless, like Climate Changes denial we cling to hope there will be enough low cost oil to last My Lifetime.

    In truth, many regions have more oil then they can consume. Saudi Arabia, North Dakota,
    Oklahoma, Venezuela etc. certainly do have ‘oil gluts’. When there’s pipeline or railcar shortage,
    those shorting crude can look honest when touting their ‘glut’ premise. Sure-nuff “there’s more oil in storage today than anytime in eighty years”

    (there’s also more folks, less in ground oil around then 1935)

    Economics, geopolitic and geology are working against the denial community.

    With notable exceptions, producing nations are on fire. Between wars and Climate Changes; According to UNHCR, there are more than 50 million refugees around the world, half of which are women and children.

    FIFTY million homeless. Are we going to feed and house fifty million? What happens when 50 turns into 100? Wars over oil create lost populations.

    When farmland shrinks daily it means we need to
    grow food more intensively. More of everything, oil based fertilizer, oil based insecticides, herbicides,
    water, diesel, equipment.

    Today, all that stands between a so called glut and genuine oil crisis is a single mid range,
    Multiple Independently Targetable Reentry Vehicle -aimed from Yemen.

  13. BobInget on Fri, 29th May 2015 1:29 pm 

    I hate when the real reason for China’s sudden island love affair in the So. China Sea, (crude oil and gas) is hardly mentioned.

    Might show nations will militarize to obtain oil.
    Might threaten the entire planet, to get more oil.

    China has delivered a pointed message to its Asian neighbours and America by staging a military parade on Hainan Island, the province closest to the disputed waters of the South China Sea.
    The “Patriotism National Defence Weapons Exhibition” took place in Haikou, the capital of Hainan. The weapons on display – supposedly developed by China within the last 20 years – included a J-10 jet fighter, a WZ-10 helicopter gunship and a tank designed for amphibious operations.
    Hainan’s position off China’s southern coast means the island would be the primary base for any military operations in the event of war in the South China Sea. Phoenix News, a Chinese state website, said the event “displayed the nation’s prestige”.
    • US-China war ‘inevitable’ unless Washington drops demands over South China Sea

    China has laid claim to 90 per cent of the South China Sea, which is believed to be Rich in Oil and Gas. Beijing’s claim to the Spratly islands overlaps with those of Brunei, Malaysia, the Philippines, Vietnam and Taiwan. This remote archipelago – which has no indigenous population – lies across some of the world’s most important shipping lanes.

    The rival claims have been outstanding for decades, but China has begun to change the status quo by constructing artificial islands inside the Spratly chain, which lies over 800 miles from its coastline. Neighbouring states fear these ambitious projects could herald the construction of Chinese naval and other military facilities.

    Chinese dredging vessels in the waters around Mischief Reef
    As if to confirm these fears, American surveillance has detected two motorised artillery pieces positioned on one artificial island, according to the Wall Street Journal. This particular island was completed by China inside the Spratly archipelago about one month ago.

    If China has deployed military assets in the Spratly chain, this would mark a “substantial escalation”, said Jonathan Eyal, the head of international security studies at the Royal United Services Institute.

    “The militarisation of the situation would make it very clear that the Chinese objective is to impose physical control over some of the most sensitive international waterways in the world,” said Mr Eyal. “It would show China’s long term intention, which is a permanent, physical, military presence in these waterways.”

    Mr Eyal added: “We are moving to a far more dangerous phase where the Chinese are not merely asserting their claims, but cementing them in military terms.”
    The Chinese Communist Party has shrugged off the possible military significance of its island-building, comparing these projects to road-building schemes in China. The ruling party accuses America of “deliberately playing up the issue” in order to inflame the region’s territorial disputes.

    Ashton Carter, the US defence secretary, demanded a “lasting halt” on Wednesday to “any further militarisation of disputed features”. He said there should be “no mistake” that America would continue to operate reconnaissance flights “wherever international law allows”.
    Officially, America has no position on the territorial disputes in the South China Sea, but the US opposes any move by any nation to change the status quo.
    However, China has accused the US of “double standards”, pointing out that other countries were involved in land reclamation in the past – without eliciting such a fierce reaction from Washington.

    ©CNES 2015, Distribution Airbus DS/Spot Images/IHS 1535921, first published by IHS Jane’s Defence Weekly

    Jonathan Pollack, an expert on US-China relations at the Brookings Institution in Washington, said: “The critical question now is what China does next – will it continue to build? Will it seek to expel other claimants to these islands – perhaps putting down runways and aircraft here? Or will it stop?”
    At the heart of Washington’s dilemma over how to respond, added Mr Pollack, was the fact that China’s growing military and financial muscle had challenged America’s ability to enforce its will in the region.

    As recently as 1996, Bill Clinton sent a carrier battle group through the Taiwan Straits to force China to back down over proposed missile tests. Such a decision would be unthinkable for a US president today.

    “American officials make statements as if we were still the decisive power, but this dispute points to the reality that China not only has ambitions in the region, but the means by which it can put its money where its mouth is,” said Mr Pollack. “We haven’t figured out a way to deal fully with that.”

  14. BC on Fri, 29th May 2015 1:38 pm 

    The economic Long Wave and the Hegemonic Cycle have implied for decades now the rise of China as a regional rival to Anglo-American imperial hegemony and the increasing risk of rising tension between the US/West and China.

    Moreover, the cycles imply eventually the collapse of trade and diplomatic relations leading to US embargoes and blockades of Chinese interests in the Pacific, Africa, and the western hemisphere.

    Finally, the collapse of trade and investment in China implies a domestic collapse of the economy that will be met by the CCP with reaction, increasing the probability of the PLA generals in Beijing asserting more influence and the potential for a takeover by the PLA to put down social unrest, restore order, root out opposition, and send the “western imperialist devils” packing for another 50-60 years.

  15. GregT on Fri, 29th May 2015 2:31 pm 


    Enough with the oil glut crap already.

    Thanks for the link BobInget.

  16. Perk Earl on Fri, 29th May 2015 2:44 pm 

    “Sad thing is that there are always a few who believe the price will stay down and go buy a house farther from work or a vehicle that gets worse mileage when the gas price is low and are then surprised when things change.”

    Chris Hill, it is unfortunate some people get caught up in the glass half full scenario and charge off to do something unwise in a period most likely transitioning into harder economic times. We have neighbors that have bought into their own unique restaurant idea (those always work right). They are remodeling the building with plans to open soon in a different state. So they are moving and selling their home, to most likely purchase a different home in that other state. I wanted to suggest to them this may not be the best time to make such a bold and risky move, but they have bought the idea the economy is back in full swing and we could see nothing would change their minds, so our family is just encouraging them to have great success.

    But it’s hard to watch. I’ll have an update for the regular readers later as to how their escapade works out.

  17. Plantagenet on Fri, 29th May 2015 3:34 pm 


    You may cry “enough with the oil glut already” but the existence of the oil glut is not up to you or me….only the balance between global oil supply and demand determines whether not there is an oil glut. You can pretend there isn’t an oil glut, but out in the world the oil glut continues.

    Face facts—your delusional worldview has just been mugged by REALITY.


  18. shortonoil on Fri, 29th May 2015 4:51 pm 

    An oil “glut” can only appear when there is an excess of supply. That could be because demand is declining, or production is increasing. Production increases have been meager over the last few years; 0.23% vs the historical 2.5% rate (EIA data). Supply, by any historical gauge, is for all intensive purposes flat. There is no supply induced oil “glut” if we are to believe the EIA’s production reports.

    Supposedly, demand is strong, and according to the EIA growing. Inventories, however, have been for the last year, and a half increasing. If production is flat, and demand is growing inventories would decline. Obviously, there is a complete logical contradiction between what is being stated, and what is happening.

    Using the standard economic supply/ demand relationship prices could not then be declining if demand was rising faster than production. They have fallen 40% over the last year. If demand is increasing it must be less than the 0.23% increase in the production. Essentially demand must also be flat, or negative for an increase to appear in the inventories.

    Production is flat, demand is flat or negative, inventories are growing, and prices are falling. By traditional economic theory this is impossible unless demand is falling. The only possible conclusion is that the demand consists in part of the production that is going into inventory.

    There is also a thermodynamic explanation for what is occurring. You’ll have to visit us at the site to learn how that works.

  19. GregT on Fri, 29th May 2015 5:07 pm 

    There is another possible conclusion. Prices are being manipulated in an attempt to cause damage to some major oil exporting economies.

  20. shortonoil on Fri, 29th May 2015 5:08 pm 


    Enough with the oil glut crap already.”

    The odds are pretty high that you are responding to a bot! That may not be very conducive for good mental health?

  21. Plantagenet on Fri, 29th May 2015 5:54 pm 


    So you admit are a bot?

    If so, then you need to be reprogrammed to not admit it—the admission you are a bot diminishes your already limited credibility.


  22. Apneaman on Fri, 29th May 2015 5:57 pm 

    BC, whenever I read about tensions and saber rattling with China, I always remember how they shot down their own satellite a couple of years ago as a demonstration to the west. See what we can do? If it came to war it might not be anything like most people expect (Hollywood)

    Will we go out with a whimper instead of a bang? Cyberwar more likely than nuclear war

  23. Northwest Resident on Fri, 29th May 2015 5:58 pm 

    Plant — Catchy come-back. Clever. Witty. You’re pure class. Minus the “cl”. You love to annoy, don’t you? Why else would you be here?

  24. Plantagenet on Fri, 29th May 2015 6:07 pm 

    You’ve got to be kidding NWR.

    From the very first post in this thread your posts are nothing but snark meant to annoy.

    Do you have views on the issue? Please share them with us and cut back on the snark.


  25. shortonoil on Fri, 29th May 2015 6:13 pm 

    “So you admit are a bot?” (1)You…..are…….. (2)So……am……I
    (3)Bot….. program……annoy….
    [goto 1]

  26. GregT on Fri, 29th May 2015 6:27 pm 

    If this is your idea of fun planter, you really need to get a life. There is only one person on this forum that has no interest in making any attempts at finding truth. That would be you. You are one sad and pathetic individual.

  27. Davy on Fri, 29th May 2015 7:03 pm 

    Planter, when one pisses off an entire group the right thing to do would be to make a group apology.

  28. dolanbaker on Fri, 29th May 2015 7:23 pm 

    WRT to China, would they be as powerful today if western businessmen hadn’t exploited the possibility of cheap labour there and exported so much of their manufacturing to China.

    In other words, we the west (well big business), created modern China. I sometimes wonder if the initial traders who started outsourcing to China really expected China to grow so much?

  29. nony on Fri, 29th May 2015 8:11 pm 

    I think plant has bit his or her tongue a lot with a lot of unearned abuse from bullies with Internet balls

  30. GregT on Fri, 29th May 2015 8:23 pm 

    “abuse from bullies with Internet balls”

    The kettle calling the pot black. Not the least bit surprising.

  31. Boat on Sat, 30th May 2015 4:55 am 

    So the 20 billion barrels sitting in cargo ships, almost a record high indicates a shortage. Sarcasm intended. It is easy to find estimates of up to 1.9 million bpd of oil over production. As discussed, the effects of the fracking slowdown maybe havent been seen yet. But group jumping on differing opinions is a little crude.

  32. shortonoil on Sat, 30th May 2015 8:04 am 

    “There is another possible conclusion. Prices are being manipulated in an attempt to cause damage to some major oil exporting economies.”

    According to standard economic theory, if prices are depressed, demand will increase. If prices were being kept artificially low there would be shortages, not inventory builds. This situation can not be fully explained using standard economic theory. The Etp Model does explain what is happening:

    Standard economic theory does not take into consideration that the value of petroleum is falling. It views petroleum as a magical substance that is not affected by depletion. We will soon be informed of the error in that assumption!

  33. marmico on Sat, 30th May 2015 10:54 am 

    Production increases have been meager over the last few years; 0.23% vs the historical 2.5% rate (EIA data_

    What an effing buffoon. The latest EIA C+C [All Liquids] callout is 79.3 [94.6] mb/d December 2014 and 76.6 [90.9] mb/d December 2012.,&syid=2010&eyid=2014&freq=M&unit=TBPD

  34. Nony on Sat, 30th May 2015 11:05 am 

    If the price drop (from 100 to 60) were caused by demand drop, then volume would be down (as in the 2009 recession).

    But volume is up. Therefore, demand drop can not be the cause (supply increase is the cause).

    For an even more clear to understand example, look at natural gas from 2007 ($8/mcf) to now ($3/mf). This is happening at the same time volume has grown by a third! Obviously, that price decrease was not the result of lower demand. It was the result of shale gas.

  35. GregT on Sat, 30th May 2015 11:57 am 

    If it were as simple as a supply-demand equation, then why not cut production to keep prices elevated? It makes no sense for the KSA to over supply a market causing a 50% price drop, when all they need to do is cut production by ~10 -15% and sell the remaining 85-90% of production for twice the price.

    Sorry, I don’t buy it, especially when one takes into consideration global geopolitics, wars, and the struggle for global financial superiority.

  36. Nony on Sat, 30th May 2015 2:04 pm 

    “then why not cut production to keep prices elevated?”

    This was EXTENSIVELY discussed and debated in a gazillion articles and blog posts. Are you asleep? KSA doesn’t want to lose its market share like in 1980s.

  37. GregT on Sat, 30th May 2015 2:45 pm 

    Lose their market share to whom Nony? The world’s economies need around a 3% annual growth rate to keep the economic, monetary and financial ponzi systems from imploding. That growth has stalled in many places, and in many others the collapse is well underway. Any excess affordable oil would allow continued growth rates as seen for the last 40 years. That is quite simply not the case. The world’s economies are being propped up with mountains of debt and blown financial bubbles. The central banks can no longer even raise interest rates Nony.

  38. Apneaman on Sat, 30th May 2015 2:58 pm 

    Economic Undertow

    “In the meantime, we are certainly at the point where the old regime has lost much of its credibility (credit, too); the next great crisis has begun to emerge. While it is far from ripening, every day brings industrial denouement forward by one more day: last year’s oil price decline is little different from the slump in real estate prices beginning in the mid- 2000s. The cause is- was the same, debt-driven asset side mispricing. The outcome is going to be the same as with real estate: there will be deleveraging amplified by derivatives; margin calls, extreme volatility, cash/credit crunch and self-amplifying doom-loop = pleas for a bailout:”

  39. Nony on Sat, 30th May 2015 3:30 pm 

    Greg: read about what happened in 1980s when SA tried constraining production. If SA thought they could constrain production and raise price sustainably they would in a heartbeat. (They did get away with it in 2009.)

    They just realize that if they keep prices at 100+, US shale and CA bitumen would grow at 2+ MMbpd/year…and eventually SA would have zero volume. After all in the 80s, they went down from 8 to 3, before throwing in the towel.

  40. Nony on Sat, 30th May 2015 3:35 pm 

    Really, seriously, Greg. This thing was discussed to death months ago. It’s even OK, if you don’t agree with the articles that talk about it. But to not even be aware of it, shows ignorance.

  41. GregT on Sat, 30th May 2015 3:43 pm 


    This debate has been ongoing for several months. The consensus is exactly as you describe. The consensus also is that growth is the answer to our global economic predicament. Considering the fact that infinite exponential growth in a finite environment is an impossibility, the consensus is completely wrong.

  42. Apneaman on Sat, 30th May 2015 4:21 pm 

    Nony still thinks consensus and popularity equate to being correct. What was the consensus view on just prior to 2008? Everything is awesome! What was the consensus view on just prior to the dotcom bubble? Everything is awesome! What was the consensus view on just prior to the savings and loan fiasco? Everything is awesome! What was the consensus view on just prior to the great depression? Everything is awesome! Econ 101 a pseudo social science that is so fucking stupid that it came up with the premise that humans are rational actors. ROTFLMAO. Talk about magical thinking.

  43. GregT on Sat, 30th May 2015 4:36 pm 

    Nony doesn’t think. Nony believes in e-CON 101.

    There is a huge difference between rational thought, and blind faith based on greed.

  44. Nony on Sat, 30th May 2015 5:49 pm 

    FWIW, I was a dotcom and Enron critic before it was cool to be so (when they were the rage). And this was when all my MBA colleagues were hyping them.

    Arguments about the economic cycle and monetary policy are totally orthogonal to basic points of how supply and demand work.

  45. GregT on Sat, 30th May 2015 5:55 pm 

    In Denial: We Pursue Endless Growth At Our Peril

    A requiem for planet Earth

    humans desperately need a new story to live by. The old one is increasingly dysfunctional and rather obviously headed for either a quite dismal or possibly disastrous future. One of the chief impediments to recognizing the dysfunction of the old story and adopting a new one is the most powerful of all human emotional states: Denial.

    Economic Denial:

    In the realm of economics, the level of collective denial gripping the earth’s power centers is extraordinary. Perhaps that should be of little surprise, as we’re now at the height of the largest set of nested financial bubbles ever blown in world history.

    The bigger the bubble(s) the bigger the levels of denial required to sustain their expansion. These bubbles are doozies, and that explains the massive and ongoing efforts to prevent any sort of reality from creeping into the national and global dialog.

    The same story is written everywhere, with every example sharing the same common element of presumed perpetual growth. Everybody plans on growing steadily, forever into the future, amen.

    Ecological Denial:

    Sadly, it’s on the natural fronts that human denial seems to be at its most extreme. Hollywood visions and SciFi fantasies aside (where humans live in sealed capsules and subsist entirely on man-made foods), humans are 100% utterly dependent on the natural world for their survival. Food, water, oxygen, and predictable temperatures and rainfall patterns provide the basics of life.

    We’re Not At The Tipping Point; We’ve Already Past It:

    the looming net energy crisis is mathematically certain to place increasing limits on the modern way of life, in our lifetime — likely much sooner than we want or are prepared for. In sum, despite the intent of world leaders to blindly deny the economic, ecological and energetic cliffs we are hurdling towards, society has already long past the point where painful ramifications can be avoided. At this stage, destiny will be determined at the individual level, depending on what steps each of takes now, before those ramifications arrive in force.

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