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Stock Market Crash! (merged) Pt. 4

Discussions about the economic and financial ramifications of PEAK OIL

Re: Stock Market Crash! (merged) Pt. 4

Unread postby Armageddon » Thu 07 Feb 2019, 21:54:18

“U.S. Home Sales Are Plummeting And Nobody’s Sure Why”

Uhhh, maybe the US consumer is maxed out on debt?


https://safehaven.com/news/Breaking-New ... e-Why.html
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby asg70 » Fri 08 Feb 2019, 02:32:14

shortonoil wrote:This will simply be a recession from which we will never exit. Collapse is such a harsh word!


Um, yeah. Your track record on predictions ain't good, short (see sig).
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby Outcast_Searcher » Fri 08 Feb 2019, 02:52:02

Armageddon wrote:“U.S. Home Sales Are Plummeting And Nobody’s Sure Why”

Uhhh, maybe the US consumer is maxed out on debt?


https://safehaven.com/news/Breaking-New ... e-Why.html

Except that (consumer being "maxed out" on debt all the sudden) makes NO sense in context of GDP or income. :roll:

Consumer debt to GDP ratio lowest in nearly a decade. Again, context matters, instead of trying to chase any negative sounding stat to prove "doom".

https://tradingeconomics.com/united-sta ... ebt-to-gdp

Very similar picture for aggregate household debt to income ratio.

And the growth rate for the PCE (personal consumption expenditures) has been quite stable overall the last decade at roughly 1%. To put that in context, the trend has been downward from about 4% in 1980, with the obvious big blip down during the 2008-2009 recession.

https://www.federalreserve.gov/econres/ ... 180109.htm

...

I suppose if you throw out enough negative sounding statistics, occasionally one will stick. Of course, if you ignore all the flat to positive ones, it's not exactly a balanced or realistic look at the economy. Of course, a realistic look at things clearly isn't what you want.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby Armageddon » Fri 08 Feb 2019, 09:26:48

US household debt is 13 trillion, a record high. So yes, the consumer is maxed out.
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby shortonoil » Fri 08 Feb 2019, 09:35:01

“U.S. Home Sales Are Plummeting And Nobody’s Sure Why”

Uhhh, maybe the US consumer is maxed out on debt?


This is not unique to the US. Home prices are falling all around the world. From Sydney, Singapore, to the East Village. Nothing destroys consumer confidence like having their home price go down. Also, industrial production is falling all across Europe, and probably also in China. The industrial production report for the PIGGS will be coming out today, and Monday. With the 4 to 5% declines that have been seen so far, it is probably a good time to start burying the PMs in the back yard. Mr. Market is becoming fully aware that things are out of kilter. He still hasn't figured out exactly why. Once it becomes apparent that the world can no longer once again power itself to unlimited prosperity investors will cease diving in front of steam rollers to pick up nickles. The awareness that Peak has arrived will make the market manipulations that are now taking place look like someone trying to herd cats. Even a pension fund manager can get their head wrapped around that!
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby Armageddon » Fri 08 Feb 2019, 10:18:35

I haven’t figured out if this upcoming financial crises is from debt or PO. I’m leaning towards debt right now. I don’t think the true PO effects will happen until demand outstrips supply. I think fracking, shale, tar sands etc have bridged that gap temporarily.
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby shortonoil » Fri 08 Feb 2019, 10:57:13

I haven’t figured out if this upcoming financial crises is from debt or PO.


The trigger will be debt. The world's GDP is growing at less than a quarter of its debt service costs. The Market obviously knows that, but it is still a believer that the CBs create the rabbits that they pull out of their magical hats. Peak is going to inform Mr. Market that the FED gets its rabbits at WalMart.
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby Armageddon » Fri 08 Feb 2019, 11:06:10

shortonoil wrote:
I haven’t figured out if this upcoming financial crises is from debt or PO.


The trigger will be debt. The world's GDP is growing at less than a quarter of its debt service costs. The Market obviously knows that, but it is still a believer that the CBs create the rabbits that they pull out of their magical hats. Peak is going to inform Mr. Market that the FED gets its rabbits at WalMart.



That’s probably right. Put your head around this...

The US government spends $1 billion every 2 hours: BofA
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby shortonoil » Fri 08 Feb 2019, 11:19:34

PS, if the debt burden was zero, Peak would be an inconvenience. The "dead state" would be an entirely different matter, but that is most likely still a few years away. But Peak implies, rather not too subtly, that growth is going to go down. The service cost on the debt isn't. The CBs don't have many options remaining. Negative interest rates, and inflation will send the Market off to who knows where?
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For an explanation of the "dead state" see:
http://www.thehillsgroup.org/
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby onlooker » Fri 08 Feb 2019, 12:38:54

shortonoil wrote:PS, if the debt burden was zero, Peak would be an inconvenience. The "dead state" would be an entirely different matter, but that is most likely still a few years away. But Peak implies, rather not too subtly, that growth is going to go down. The service cost on the debt isn't. The CBs don't have many options remaining. Negative interest rates, and inflation will send the Market off to who knows where?
Image
For an explanation of the "dead state" see:
http://www.thehillsgroup.org/

Can anyone repeat Party and counterparty defaults.
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby asg70 » Fri 08 Feb 2019, 14:46:48

Armageddon wrote:I don’t think the true PO effects will happen until demand outstrips supply. I think fracking, shale, tar sands etc have bridged that gap temporarily.


Well, there's a shred of rationality.
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"$0/barrel soon as per etp." (12/30/18)" --pstarr
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby onlooker » Fri 08 Feb 2019, 16:07:26

What if PO dynamic involves demand NOT outstripping supply, because as supply becomes less and as EROEI becomes worse, the quality and quantity of energy becomes insufficient to keep the economy vibrant. And as the Economy becomes more depressed, the Oil Industry becomes less able to bring to production more oil, which keeps the Economy depressed and this dynamic repeats itself again and again. People wish to bury the Etp theory because the MAP has not quite aligned as predicted. That does NOT mean the premise of the Etp theory is wrong. What I described is in fact a basic premise of it.
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby Armageddon » Fri 08 Feb 2019, 17:23:41

onlooker wrote:What if PO dynamic involves demand NOT outstripping supply, because as supply becomes less and as EROEI becomes worse, the quality and quantity of energy becomes insufficient to keep the economy vibrant. And as the Economy becomes more depressed, the Oil Industry becomes less able to bring to production more oil, which keeps the Economy depressed and this dynamic repeats itself again and again. People wish to bury the Etp theory because the MAP has not quite aligned as predicted. That does NOT mean the premise of the Etp theory is wrong. What I described is in fact a basic premise of it.




Definitely a possibility. All I know is that we are facing a crises never seen before in human history and 99% of the population don’t have a clue what is coming.
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby rockdoc123 » Fri 08 Feb 2019, 17:46:50

What if PO dynamic involves demand NOT outstripping supply, because as supply becomes less and as EROEI becomes worse, the quality and quantity of energy becomes insufficient to keep the economy vibrant. And as the Economy becomes more depressed, the Oil Industry becomes less able to bring to production more oil, which keeps the Economy depressed and this dynamic repeats itself again and again.


And what if it involves the logically simpler outcome of demand continuing to increase, supply staying with it until such point that it starts to stagnate? The quality of energy is exactly the same as it was 50 years or more ago (I could run the same gasoline and oil in my current vehicle as in the one I had in the seventies) and the economy becomes less and less attached to petroleum as EV's become more dominant and alternative sources of energy take up some of the slack?

There are more outcomes that aren't doom and gloom scenarios, but I guess you guys don't contemplate those. :roll:
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby asg70 » Fri 08 Feb 2019, 17:52:01

rockdoc123 wrote:There are more outcomes that aren't doom and gloom scenarios, but I guess you guys don't contemplate those. :roll:


Which would be fine if they merely qualified their statements rather than coming across so arrogant in their predictions only to eat crow (see sig).
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby Outcast_Searcher » Fri 08 Feb 2019, 17:55:40

Armageddon wrote:US household debt is 13 trillion, a record high. So yes, the consumer is maxed out.

So you just can't grok that there are multiple numbers in economics, and context matters.

Fine. But don't expect to be taken seriously by adults with any grasp of economics. But thanks for repeatedly playing and ignoring all the data you don't like. :roll:
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby Outcast_Searcher » Fri 08 Feb 2019, 18:03:10

shortonoil wrote:
“U.S. Home Sales Are Plummeting And Nobody’s Sure Why”

Uhhh, maybe the US consumer is maxed out on debt?


This is not unique to the US. Home prices are falling all around the world. From Sydney, Singapore, to the East Village. Nothing destroys consumer confidence like having their home price go down.


Even if that is a trend instead of a blip, let's pretend the overall news and trends re housing prices and affordability hasn't been resoundingly positive as a trend. Or that credit growth hasn't been good on a global basis.

https://www.imf.org/external/research/housing/

Aside from predictions (guesses), I'm not seeing anything credible re global housing prices crashing in 2019, or even in late 2018. As usual, you lack credible citations for your claims.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby Armageddon » Fri 08 Feb 2019, 19:33:56

1.5 trillion student loan debt - all time high
1.5 trillion auto loan debt - all time high
13 trillion household debt - all time high
9 trillion corporate debt - all time high
22 trillion US gov’t debt - all time high

We haven’t built this system on growth, we have build it on debt

Can I run up all my credit cards, take out loans for a house and a car and call myself wealthy?
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby vtsnowedin » Fri 08 Feb 2019, 21:08:18

Armageddon wrote:1.5 trillion student loan debt - all time high
1.5 trillion auto loan debt - all time high
13 trillion household debt - all time high
9 trillion corporate debt - all time high
22 trillion US gov’t debt - all time high

We haven’t built this system on growth, we have build it on debt

Can I run up all my credit cards, take out loans for a house and a car and call myself wealthy?

That might very much depend on what you bought for house and cars and what your ran up the credit cards on. House in a rising market? Credit cards spent on an education and social climbing? Yes more then likely. Trailer park rent, Bar tabs, beer and pizza,Ball game tickets, Spring break? Not so much. :razz:
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Re: Stock Market Crash! (merged) Pt. 4

Unread postby shortonoil » Fri 08 Feb 2019, 21:21:48

What if PO dynamic involves demand NOT outstripping supply, because as supply becomes less and as EROEI becomes worse, the quality and quantity of energy becomes insufficient to keep the economy vibrant.


Definitely a possibility. All I know is that we are facing a crises never seen before in human history and 99% of the population don’t have a clue what is coming.


We have been pumping on this puddle for 159 years, and when found, the best was always selected. The best was always the highest ERoEI. The puddle got constantly lower and lower in quality. Now our salvation as a nation may depend on mixing roofing tar, and camel pee. At IP for Spindle Top it was probably 350:1, the: ERoEI of Shale is probably <6:1. It now requires 359% more oil per capita than it did in 1960. The stuff is certainly not improving!

Can I run up all my credit cards, take out loans for a house and a car and call myself wealthy?


That is called the last of the upper American middle class. They still have the house, and the car, and the boat, and if their income goes down by 2% they will be filing for bankruptcy, and looking for a used RV to move to Florida. That is where the real world is at present. Hanging on by its finger tips, and toe nails. If you break a nail gravity takes over!
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