Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

Stock Market Crash! (merged) Pt. 10

Discussions about the economic and financial ramifications of PEAK OIL

Re: Stock Market Crash! (merged) Pt. 10

Unread postby Armageddon » Fri 27 Sep 2019, 00:41:00

Another sign of pending recession. Change in industrial production on a year-over-year basis about to head into negative territory, just as in 1991, 2001, and 2008. Also validates my belief that US was in recession in 2016, based on falling Fed Tax Receipts.

Twitter
User avatar
Armageddon
Light Sweet Crude
Light Sweet Crude
 
Posts: 5411
Joined: Wed 13 Apr 2005, 02:00:00
Location: St.Louis, Mo

Re: Stock Market Crash! (merged) Pt. 10

Unread postby Mercian63 » Fri 27 Sep 2019, 03:28:29

I would propose a longer-term process is in operation, which is not inevitable by any means. Through effective leadership - especially in North America - to calm present and future expectations of lifestyles, severe economic crisis could be averted. Regrettably, the quality of leadership just is not there (it's going the other way). I would not class myself as an admirer of Richard Nixon, but I have to admit there''s a whole Pacific Ocean between his stature and that of... er... just about any president since.

I posted about this on another thread. I've copied my thoughts below, as they could provide food for thought in this thread too:

Governments nowadays are to a large extent legitimised by the "cheap oil" lifestyle they facilitate, and expectations grow by each generation. I grew up in quite comfortable circumstances in the 60s and 70s, but few of my peers then expected to enjoy a foreign summer holiday more than once or twice during their adolescence. Few families had more than one car, and it was probably a pretty basic car like a Cortina or a Viva (this was UK). Nowadays a winter and summer holiday abroad every year is taken as virtually a divine right by the vast majority in employment, as is driving to work (alone) in the second or third sophisticated, powerful car of the family. I won't even start on the "right" to cheap clothes, food from the far side of the world, amazing digital gadgets etc etc.

Behind the scenes, the whole pleasuredome is kept inflated by an every-increasing heap of debt.
In the UK, we are taking on more and more debt, but national productivity has not increased in ten years. That's crazy!

It's no mystery that governments are dragging their feet over Climate Change. To act decisively would hack away at their own legitimacy to rule. Cheap oil is inherent in the social contract.

What I'm getting at is a subtle but potent cocktail of rising expectations clashing with steadily rising (real) oil prices, against a backdrop of rising debt, generation by generation. There is a danger this will undermine public faith in democratic government, unless there arises leadership powerful enough to alter the above-mentioned "cheap oil" expectations. Personally, I don't believe it will happen. Since when did governments balance the books?

I foresee progressive stratification of societies into what amount to caste systems, as the Haves (essentially, the rentiers and their expert servants) continue to exploit positions of commercial power to sustain their "cheap oil" lifestyles whilst the Have-nots (salaried employees and semi-employed contractors) lose status. This transfer of power to the rentier class has been going on in the US since the early 1970s and the trend has spread.

In this scenario, nation-states would decline in influence relative to corporate power. This is dangerous, as the lack of government direction in a crisis like 2008 would likely be curtains for all concerned. It is true that the collapse of LTCM was contained by a private consortium, but that was just one institution in trouble. Had the whole lot been under strain, the rescue could not have happened.

What makes this scenario plausible to me is the gradualness of it, plus, it's already happening and has been under way for decades.
There is a last factor, the chile sauce you might call it - overcrowding. The frustration of the Haves that wherever they go on their globe-trotting lifestyle, or wherever they try to distract themselves in their 12-cylinder cars, they are hindered by plebs, waves and waves of plebs. A hatred of crowds will grow across the arrogant classes (overcrowding is already a big issue in the Med). They will have a powerful collective interest to exert their private power against any collective power to draw as much wealth up to their level as possible to strangle the overcrowding problem. Perhaps this is how Climate Change will be "solved"? Then comes the big debt avalanche, and it all falls into history... :?:
Mercian63
Wood
Wood
 
Posts: 8
Joined: Wed 25 Sep 2019, 02:59:11

Re: Stock Market Crash! (merged) Pt. 10

Unread postby marmico » Fri 27 Sep 2019, 05:49:35

cocktail of rising expectations clashing with steadily rising (real) oil prices


Don't think so. In 1976, Joesixpack (Joe) could buy 8.2 gallons of gasoline per hour worked. There is no material difference in 2019. Adjusting for increases in vehicle fuel economy, 1976 Joe could drive a sedan from New York to Los Angeles and 2019 Joe could make the return trip for the same hours worked. Twice the realized expectation per hour worked.

Image

Same applies across the total energy expenditure spectrum. Lower energy prices per hour worked.

Image
marmico
Heavy Crude
Heavy Crude
 
Posts: 1055
Joined: Mon 28 Jul 2014, 13:46:35

Re: Stock Market Crash! (merged) Pt. 10

Unread postby shortonoil » Fri 27 Sep 2019, 07:14:30

Yoshua said:
The U.S government is borrowing USD 1 Trillion annually.
The U.S corporates are spending USD 1 Trillion in share buy backs annually.
Where is that money coming from when global trade is in contraction?

China isn't responding to stimulus.
The other Asian economies are in export depression.

The Eurozone isn't responding to M1 growth.
European banks can't make money on negative yields...wait until the corporates start to default on debt...then the banks will really start to lose money.


Debt destroys liquidity. They are attempting to print into a monetary black hole! Since the debt is following the depletion curve there is no cure for this situation. All the central banks can do is to keep pushing on that string -- until it frays into a pile of lint. We are at the slap some Duck tape on the Titanic stage!
Image
User avatar
shortonoil
False ETP Prophet
False ETP Prophet
 
Posts: 6397
Joined: Thu 02 Dec 2004, 03:00:00
Location: VA USA

Re: Stock Market Crash! (merged) Pt. 10

Unread postby Armageddon » Fri 27 Sep 2019, 10:04:02

U.S. consumer spending slows; business investment weak
User avatar
Armageddon
Light Sweet Crude
Light Sweet Crude
 
Posts: 5411
Joined: Wed 13 Apr 2005, 02:00:00
Location: St.Louis, Mo

Re: Stock Market Crash! (merged) Pt. 10

Unread postby shortonoil » Fri 27 Sep 2019, 10:17:37

Petroleum changed the world from traveling around on old Nelly to humans walking around on the Moon. The world has spent the last 160 years digging up the best of that resource it could find. What remained was always of lower quality; less serviceable than what had been extracted. The world has now used 87% of its maximum theoretical supply of petroleum. The last 13% is the bottom of barrel. It will be orders of magnitude more difficult, and costly to extract, process and use than was the first 87%.

With their discovery of oil, the world like a impoverished lottery ticket winner, went on a spending spree. Wealth of unknown magnitude kept bubbling up out of the ground. It lasted long enough that everyone began to believe it would continue forever. They built a world wide communication systems, powered by oil; fleets of the largest ships ever known, powered by oil; factories that produced almost unlimited products, powered by oil; a monetary system that could create unlimited wealth, powered by oil. Like the spend thrift rich heir, that never bothers to balances their account because they believe that they have so much, the day that the bank calls on the overdrafts has arrived.

The quality of oil remaining has now fallen so low that the world can no longer extract enough of it to pay for its extravagant life style. Like the rich spend thrift heir, it is now mortgaging the house, the Bentley, and the yacht to pay its bills. With no new oil coming on online nature's ubiquitous repo man is arriving. The house is given over to the spiders, the Bentley rusts in the garage, and the yacht sinks to the bottom of the harbor.

We need not have to look very far to see that the debt is now beyond our ability to repay, and that the the overdraft calls are now starting to arrive. The spiders are moving into the cities, farm houses, and suburbs, the greatest ships ever built are floating idle in the harbor. The monetary system is having trouble finding the repo man. The future is nebulous, unlike our past triumphant feats. What we know is that what is coming will look nothing like what has been for so long.

The world can no longer pump enough oil to pay its bills; the overdraft notices are in the mail. Nature' laws have plugged along for over three billion years. Her last experiment is soon to discover that none of them have been changed.
Image
User avatar
shortonoil
False ETP Prophet
False ETP Prophet
 
Posts: 6397
Joined: Thu 02 Dec 2004, 03:00:00
Location: VA USA

Re: Stock Market Crash! (merged) Pt. 10

Unread postby marmico » Fri 27 Sep 2019, 10:35:24

Atlanta and New York Fed Q3 2019 GDP Nowcasts both printed 2.1% today. No recession.
marmico
Heavy Crude
Heavy Crude
 
Posts: 1055
Joined: Mon 28 Jul 2014, 13:46:35

Re: Stock Market Crash! (merged) Pt. 10

Unread postby shortonoil » Fri 27 Sep 2019, 11:46:53

Atlanta and New York Fed Q3 2019 GDP Nowcasts both printed 2.1% today. No recession.


So next month, as it has for the last 43 months, it will be revised down. The US growth rate is less than the "official" BIS inflation rate. Which, if their estimates are correct (highly doubtful), the US has a real negative growth rate.

This sort of obtuse logic fits the market because the market is now a speculative enterprise that works on the last "tweet" some official somewhere manages to post. As 87% of the market is now ALGO driven it is a micro second play. The reality that the economy is now attempting to existing under an Everest sized mountain of irrevocable debt has no impact on it. The trade will be done, and over in less than a second. If the machine can profit by 2 bps it is considered a success. When things do go south, and they will, you don't want to be selling Moose Club tickets at the exit door.
User avatar
shortonoil
False ETP Prophet
False ETP Prophet
 
Posts: 6397
Joined: Thu 02 Dec 2004, 03:00:00
Location: VA USA

Re: Stock Market Crash! (merged) Pt. 10

Unread postby Mercian63 » Fri 27 Sep 2019, 12:19:54

Marmico, those charts are interesting. To be honest, I am a bit surprised by the first, but they're credible data.

I am not a US resident. Has taxation on gasoline changed much over that period?
Mercian63
Wood
Wood
 
Posts: 8
Joined: Wed 25 Sep 2019, 02:59:11

Re: Stock Market Crash! (merged) Pt. 10

Unread postby StarvingLion » Fri 27 Sep 2019, 12:44:22

Cog, the "system" is collapsing again. Oil is down down down. Fiat Chrysler is collapsing. The local dealerships are in total panic mode.

Idiots staring into tiny pixel screens while living under a bridge isn't an economy...its an apocalypse.

The NasCrap "innovation" bullshit is a total joke.

"America" is suffering from Severe Sclerosis of the Ponzi.
Cog's brain was in a jar left open and maggots ate it.
StarvingLion
Heavy Crude
Heavy Crude
 
Posts: 1490
Joined: Sat 03 Aug 2013, 17:59:17

Re: Stock Market Crash! (merged) Pt. 10

Unread postby marmico » Fri 27 Sep 2019, 12:57:08

Has taxation on gasoline changed much over that period?


It varies by state - e.g. California is high, Mississippi is low. Federal excise tax on gasoline hasn't changed since 1993 but state/local taxes keep ratcheting up.

https://taxfoundation.org/state-gas-tax-rates-2019/
marmico
Heavy Crude
Heavy Crude
 
Posts: 1055
Joined: Mon 28 Jul 2014, 13:46:35

Re: Stock Market Crash! (merged) Pt. 10

Unread postby Sinclarsorus » Fri 27 Sep 2019, 14:01:48

I have seen stock market crash warnings since 2010 and we never seem to approach a 1929 style devaluation like most have predicted. 2008 was pretty bad but the Banksters were bailed out at the expense of people with mortgages etc. The little guy is paying for all this. And the looting will continue till the real economy fails or can no longer support the so called Service Economy that is based on bogus data at best. We will be in the unemployment age soon if not already. over 90 million working age people have no regular employment.

What I see is 2023 will be the big one where a huge number of Baby Boomers have to cash out parts of 401 K's and Pension plans start drawing out money from these plans invested in Hedge Funds and other financial instruments. Then the market won't be able to cover the decline anymore. 98 percent of the Stock Markets are funded by Hedge Funds and most of those invest for retirement and company savings. The low interest rates have forced this risky investing to get the needed 8 percent growth needed for retirement payouts etc. (More than likely won't be there when needed.)

The recent Overnight Market bailout, close to half a Trillion planned, is a attempt of the Federal Reserve to hold down interest rates on short term debt (paid back in 3 months). Banks in trouble had to go begging to the Fed discount window to get needed loans to sell their credit card operations to. Normally these loans are like around 8 percent and the banks make money at 16 percent etc. But recent rates were close to 10 percent being the money supply was smaller for some reason.

Like I said the banks are flooded with money for the holiday season, so I can't see a crash coming this year. But it should have happened 10 years ago though, but they continue kick the can down the road till the real economy is dead, Much like Peak Oil, we believe the oil is declining as a resource but the world is consuming more and more every year. (That makes no sense long term.)

That's my theory, they know oil is running out and humanity and civilization is over without it, so does it matter if the real economy is destroyed or national and corporate debt has to be paid, It doesn't matter were all over anyway. Or at least our method of operation supports that philosophy. Why else would intelligent people that took economics run the world in the ground like this. Either that or a lot of kids cheated on tests in college in the 1970's and before :o
Sinclarsorus
Wood
Wood
 
Posts: 21
Joined: Fri 27 Sep 2019, 08:03:21

Re: Stock Market Crash! (merged) Pt. 10

Unread postby Outcast_Searcher » Fri 27 Sep 2019, 15:40:12

Armageddon wrote:Another sign of pending recession. Change in industrial production on a year-over-year basis about to head into negative territory, just as in 1991, 2001, and 2008. Also validates my belief that US was in recession in 2016, based on falling Fed Tax Receipts.

Twitter

So once again, economic growth is "recession".

The more you cherry pick and make up your own definitions, the less credible you are. Congrats.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
User avatar
Outcast_Searcher
COB
COB
 
Posts: 7358
Joined: Sat 27 Jun 2009, 20:26:42

Re: Stock Market Crash! (merged) Pt. 10

Unread postby Outcast_Searcher » Fri 27 Sep 2019, 15:49:21

shortonoil wrote:
Atlanta and New York Fed Q3 2019 GDP Nowcasts both printed 2.1% today. No recession.


So next month, as it has for the last 43 months, it will be revised down. The US growth rate is less than the "official" BIS inflation rate. Which, if their estimates are correct (highly doubtful), the US has a real negative growth rate.

Yes, by all means, let's pretend there's no REAL US GDP growth rate per the Fed, even though that's exactly what we've had almost every quarter since the great recession. :roll:

Big hint, since you are clueless re numbers and reality: The real GDP line going continuously up means a real growth rate re US GDP. :idea:

https://fred.stlouisfed.org/series/GDPC1

Your babble just gets less and less credible.

But when you're desperate to prove "negative growth", what does things like facts or truth matter? :shock:

https://fred.stlouisfed.org/series/A191RL1Q225SBEA
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
User avatar
Outcast_Searcher
COB
COB
 
Posts: 7358
Joined: Sat 27 Jun 2009, 20:26:42

Re: Stock Market Crash! (merged) Pt. 10

Unread postby Sys1 » Fri 27 Sep 2019, 16:13:09

As long as oil is under 100$, it will be fine. When oil will go above 100$, panic will occur.
We can't escape the time when oil will be too expensive for our industrial civilisation.
We can pursue deny a little more with exponential debt.
Nevertheless, all will be payed. And it will cost more than money.
Our economic system is now at the mercy of an oil shock, a fatal one because we can't increase rates any more without crashing the system, while we will have to do that in order to cool down inflation. We decided to save the day with negative or close to 0% direct rates since 2008. No more bullet for the next oil assault.
User avatar
Sys1
Tar Sands
Tar Sands
 
Posts: 962
Joined: Fri 25 Feb 2005, 03:00:00

Re: Stock Market Crash! (merged) Pt. 10

Unread postby Armageddon » Fri 27 Sep 2019, 16:15:10

Business spending craters 11.1%
User avatar
Armageddon
Light Sweet Crude
Light Sweet Crude
 
Posts: 5411
Joined: Wed 13 Apr 2005, 02:00:00
Location: St.Louis, Mo

Re: Stock Market Crash! (merged) Pt. 10

Unread postby Armageddon » Fri 27 Sep 2019, 16:17:16

Outcast_Searcher wrote:
Armageddon wrote:Another sign of pending recession. Change in industrial production on a year-over-year basis about to head into negative territory, just as in 1991, 2001, and 2008. Also validates my belief that US was in recession in 2016, based on falling Fed Tax Receipts.

Twitter

So once again, economic growth is "recession".

The more you cherry pick and make up your own definitions, the less credible you are. Congrats.




Do you understand what “Twitter” means?
User avatar
Armageddon
Light Sweet Crude
Light Sweet Crude
 
Posts: 5411
Joined: Wed 13 Apr 2005, 02:00:00
Location: St.Louis, Mo

Re: Stock Market Crash! (merged) Pt. 10

Unread postby Mercian63 » Sat 28 Sep 2019, 02:38:00

marmico wrote:
Has taxation on gasoline changed much over that period?


It varies by state - e.g. California is high, Mississippi is low. Federal excise tax on gasoline hasn't changed since 1993 but state/local taxes keep ratcheting up.

https://taxfoundation.org/state-gas-tax-rates-2019/


Thanks Marmico, that's useful information.

This chart of oil price in ounces of gold does show steep increases in real oil price in the last 20 years:

https://www.macrotrends.net/1380/gold-t ... ical-chart

The trend is not beyond what has been seen in the past, but it is occurring at a time when the world is post-Cold War, and oil markets are comparatively unimpeded by political wrangling. Forecasting oil price is obviously a mugs' game, but I still think the world economy is chancing its arm sailing boldly ahead into more debt and affluence against a back-drop of tougher oil projects. However, a debt-saddled economy cannot do anything but "sail boldly ahead" as otherwise it gets smothered under its own debt-mountain.

Oil prices may not go sky-high to be problematic. The global economy could keep "bumping up" against $120 oil through several cycles of recession, each time piling more debt to save the system.

As with all things, we shall just have to see!
Mercian63
Wood
Wood
 
Posts: 8
Joined: Wed 25 Sep 2019, 02:59:11

Re: Stock Market Crash! (merged) Pt. 10

Unread postby shortonoil » Sat 28 Sep 2019, 10:37:27

Another sign of pending recession. Change in industrial production on a year-over-year basis about to head into negative territory, just as in 1991, 2001, and 2008. Also validates my belief that US was in recession in 2016, based on falling Fed Tax Receipts.


The US hasn't grown enough in 15 years to cover the service cost on its debt. It is existing in a debt creation illusion. The stock market is in the same place it was in over a year ago! The entire world is in a synchronized global slow down, and the spread on money is at the point where there is no profit to be made from loaning money. The Bear is going to show up over the next few months. With $331 trillion in total world debt the cascading defaults will be a one time extravaganza. The oil age is ending, and it should have been put out of its misery 20 years ago. There are solutions, but as long as keeping the oil industry in business is more important than the security of the planet they aren't going to be used. When the average inhabit of the planet is living in a tent some progress on constructing a sustainable civilization may begin. There is a long road down, before it can once again begin to go up.
User avatar
shortonoil
False ETP Prophet
False ETP Prophet
 
Posts: 6397
Joined: Thu 02 Dec 2004, 03:00:00
Location: VA USA

Re: Stock Market Crash! (merged) Pt. 10

Unread postby Outcast_Searcher » Sat 28 Sep 2019, 10:46:21

Armageddon wrote:
Outcast_Searcher wrote:
Armageddon wrote:Another sign of pending recession. Change in industrial production on a year-over-year basis about to head into negative territory, just as in 1991, 2001, and 2008. Also validates my belief that US was in recession in 2016, based on falling Fed Tax Receipts.

Twitter

So once again, economic growth is "recession".

The more you cherry pick and make up your own definitions, the less credible you are. Congrats.


Do you understand what “Twitter” means?

So you cite things that you then claim you don't believe?

Are you off your meds, or just completely delusional? Or just trolling?
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
User avatar
Outcast_Searcher
COB
COB
 
Posts: 7358
Joined: Sat 27 Jun 2009, 20:26:42

PreviousNext

Return to Economics & Finance

Who is online

Users browsing this forum: Tuike and 13 guests