Posted on 11/15/2014 7:51:26 PM PST by Lorianne
——They can reduce the fracking boom ——
I would argue the result will be felt most by the higher cost producers. I would think that would be in the Gulf of Mexico
I think the difference is that in 1998 the drillers and extraction were not financed by a panoply risky loans and those loans in turn were not sold on as good rated investments.
Not being able to absorb a gas price hike is part of overextending yourself financially to own a home. There was a term for this. “drive until you qualify”. Builders and realtors were pushing low/no down loans on home far out in the exurbs. People could barely afford the interest payments plus their other expenses (food, utilities, maintenance). So the cost of any item could be a big deal.
I agree that this is a stupid way to ‘invest’, but it is very similar to how financing is working in the oil industry at the moment.
It’s a long running joke silly
How dare he?
That’s called an arbitraging opportunity, if not for the wonderful Democrat policy of outlawing the export of American oil.
So less profits to pay off loans puts banks into trouble.
Well, I guess the bank gets to own some oil fields.
He’s bent out of shape, making his personal losses from falling petroleum prices into a national tragedy.
How do you figure that?
He seems to be a reporter doing fairly ordinary reporting.
This is about geopolitics, not economics. The Saudis want to marginalise Russia as a big player, show that they are still the bosses of OPEC, and, as a bonus, have a (temporary) shot at discouraging fracking and other production developments. Good luck to them on the last 'benefit'; won't happen.
The problem with marginalising Russia, whose economy IS in the crapper, is the increasing warlike tendencies of Putin and his crowd. Don't know how that will play out, but it WILL be dicey.
--which would never have happened if the cards had all been properly glued together like we thought they were. It's human nature to look at gigantic historical torrents and search for some miniscule 'cause' to blame everything on. We hear it all the time --'the Fed caused the Depression', the Archduke's assassination caused World War I, slavery caused the Civil War. and on and on.
That says it all --thanks! It's so easy to get suckered into the con when a political hack tries to pawn off a price change (be it oil, wages, whatever) on a political agenda. I know better when they try to say global warming is science, but the econ rants tend to sneak in under my radar.
Do you think that Europe will be forced to allow tracking, or is the green movement so strong among the elite that they will suffer to protect alternatives hoping that the price will get high again?
Europe will be Europe and whatever they do about oil will not make much difference. The biggest pressure on oil price is if US oil companies take over the Russian fields. Russia still has a huge supply in the ground but they are terribly behind the tech curve and it is way too expensive for them to get at it. I think American companies should be banned from Russia.
You can even have an across the board price drop due to improved productivity. Think of the currently improbable Star Trek replicator. It would drive production/labor/material/transportation costs down to near zero. It would be a good thing, too.
My point is post and pre-Fed recessions. The Long Recession didn’t really happen the way these modern, post-Fed recessions happened. There was large real growth. There were price drops across the board to match wage drops. There also wasn’t a permanent spiral. Eventually, the prices dropped to a point that people reentered the market and prices stabilized.
The Great Depression was directly caused by the Fed and fiscal policy by Republicans and Democrats. What’s changed since then? The Fed responded quickly, but fiscal policy hasn’t changed. Central planning the American economy doesn’t work. That’s my argument.
The fact that we can imagine something good about widespread deflation doesn't mean it will ever happen or that we should act like it's going to happen next time. What we know for sure is that we've suffered horribly from substantial drops in general price levels even though there have also been other times when we've benefited from occasional price drops in specific goods or services.
The Great Depression was directly caused by the Fed and fiscal policy...
Interesting, we were just talking about that here, the way some folks say "the '29 crash caused the Depression", or "Smoot-Hawley tariffs caused the Depression", or "Hoover's fault" etc. etc. Life would be a lot simpler if big historical changes were totally due so some easy blame target, but its always good to watch out for other things going on. What we're talk about is deflation though, and off hand my take is that the Fed being bad doesn't make deflation good.
Actually, home heating oil has gone down about 25% compared to last year (at least in my area).
Weather guy is now forecasting a warmer December ???
Hope your, and mine, total heating season cost decrease!
I read a few books on the housing bust.
Guys in California who were working at car wash on Monday were on Tuesday (after a half day of “training”) writing half million dollar mortgages to illegals making min wage.
Crazy stuff.
We have to make comparisons to draw conclusions. The Long Depression happened pre-Fed. We can then look to post-Fed deflations and compare. You’re an expert at grabbing data, Pete. Let’s take a look. I’m interested in the truth.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.