It started in mid-February for jet fuel and in mid-March for gasoline.
By Wolf Richter for WOLF STREET.
Oil companies are reporting financial fiascos every day: Today Exxon reported its first quarterly loss since 1999 ($610 million), on a “market-related” $2.9 billion write-down. “We’ve never seen anything like what the world is facing today,” CEO Darren Woods said.
On Thursday, Texas-based shale-driller Concho Resources reported a quarterly loss of $9.3 billion, after writing down the value of its oil and gas assets by $12.6 billion.
Also on Thursday, it was reported that Oklahoma-based Chesapeake Energy, a pioneer in shale-drilling, was preparing to file for bankruptcy (what’s taking so long?).
Still on Thursday, Royal Dutch Shell shocked the markets when it announced that it would reduce its dividend for the first time since 1945 (by 66% from $0.47 to $0.16). “The duration of these impacts remains unclear with the expectation that the weaker conditions will likely extend beyond 2020,” the statement said. The already beaten-up shares plunged another 17% in two days. Shares are down 47% year to date.
Earlier in April, among the oil companies that have already filed for bankruptcy, were two high-profile oil drillers, Whiting Petroleum and Diamond Offshore Drilling.
The drama is centered on the collapse in demand for crude oil. Crude oil is primarily used for two purposes: transportation fuel and as feedstock for the chemical industry. Even before the crisis, demand growth has been weak, particularly as transportation fuel in developed countries. But production has been surging, and amid ample and growing supply, prices were already weak, when the coronavirus hit.
Demand for transportation fuel in the US collapsed.
For gasoline, it started in mid-March when the measures to tamp down on the spread of the coronavirus took effect. For jet fuel, it started in mid-February as flight cancellation from the US to China, and then to other countries took effect. We can see this in the weekly data provided by the EIA.
The EIA measures weekly consumption in terms of product supplied, such as by refineries and blenders, not by retail sales.
Consumption of motor gasoline was still up 3.1% in the week ended March 13, compared to the same week last year, according to EIA data. But then demand just collapsed. In the week ended April 3, gasoline demand was down 48% compared to the same week a year earlier:
In terms of barrels per day (b/d), demand for motor gasoline was well above 9 million b/d in the four weeks up to mid-March, but then demand collapsed, down to 5.07 million b/d in the week ended April 3. Then demand ticked up. By the week ended April 24, demand was 5.86 million b/d. Those last four weeks were by far the lowest on record in the EIA’s data going back to 1991:
Consumption of jet fuel (kerosene type) collapsed even more, peaking, if you will, in the week ended April 10 with a 72% year-over-year plunge. The decline in jet fuel demand started earlier than with gasoline, as flight cancellations were starting in the second half of February:
In terms of barrels per day, demand for jet fuel collapsed to just 463,000 b/d in the week ended April 10. The last four weeks – ranging from 463,000 b/d to 800,000 b/d – were by far the lowest in the data going back to 1991:
Consumption of distillate is highly variable because of its uses. It includes diesel fuels and fuel oils, such as for space heating and power generation, which are seasonal. So this is not as clear cut.
Distillate consumption plunged between 18% and 25% in the last three weeks, compared to the same weeks a year ago. But consumption of fuel oil for heating and power-generation is so seasonal and so volatile that these moves are not totally unusual. However, consumption in the week ended April 10 plunged to 2.76 million barrels per day, the lowest weekly demand since 1999:
Combined, gasoline, jet fuel, and distillate consumption, plunged by 22% to 43% over the last four weeks. In terms of barrel per day, the combined consumption collapsed to a low of 8.3 million b/d in the week ended April 10 and has ticked up since then. The last four weeks, ranging from 8.3 million b/d to 9.8 million b/d, were by far the lowest in the data going back to 1991:
In terms of transportation fuels, this is what the oil industry is facing: an unprecedented, and until now unimaginable collapse in demand that has persisted for over four weeks. While it may improve ever so gradually as we move forward, it will remain at multi-decade low levels until the US economy’s travel and commuting patterns, and its shipping patterns find their way to whatever the new normal might look like.
Oil companies are faced with the double whammy of the collapse in demand in terms of volume, where they sell much less product; and the collapse in prices, where they get fewer dollars for the product they do sell.
The chaos in the crude oil market reached a historic level when on April 20, 2020, West Texas Intermediate (WTI) crude oil front-month futures prices fell below zero dollars per barrel for the first time since trading began in 1983.The EIA dissected the historic event. Read… Postmortem of the Infamous Day WTI Crude Oil Futures Went to Heck in a Straight Line
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I drive used vehicles. It’s hard to find a good mechanic. My mechanic had to close. His house payments will have to go in forbearance. If we could magically snap our fingers and have everything disappear in our lives that is oil dependent, we would be cold,naked, hungry with no shelter. This is bad shit happening to people.
Used cars for me too, like owning them with no monthly payments. The mechanics that can survive for a couple of months should be ok. People will need their cars repaired and kept running, probably more so as people get away from the expense of a new car. Finding a trustworthy reliable mechanic that you get along with is important.
Regarding the oil crisis, It is a very hard rain a fallin. The oil business affects the real economy directly when you realize that GDP is directly related to energy consumption. It is where the real economy of real things being made and procured comes from. It is scary and sad in many respects and sad. Don’t really feel that way about the skanks.
Friend has an IT degree in auto mechanics. He can’t work on his new truck. Rather he could if he had an expensive computer. This is where technology gets real iffy. Like fixing your own computer? I buy refurbs and when they crash I buy a new one. Autos might get cheap, or ubiquitous, (throw away autos and low cost shops that put them back together again.)
Things in IT progress quickly. An act of revenge in the near future could be a hacked car that goes full throttle into someone’s kitchen area after the gas has turned on remotely while the owner sleeps upstairs.
In fact the next big virus to strike is likely to be the of the silicone variety.
Ambrose Bierce,
That’s planned obsolescence, not technology.
Cars, especially the new GM models are designed to break down after the 100,000 mile warranty is up, so you either have to pay for expensive repairs or buy a new one.
The only real solution for cars is to stop buying GM/Ford, every other country in the world, has already figured this out.
Implicit,
It’s always been possible to sabotage/boobytrap cars, cutting break lines or ignition boombs were a thing. Modern NON self-driving cars aren’t inherently more vulnerable to hacking, only gimmicky junk like parking assist does that, but, most cars don’t have any of this stuff.
There are a lot of cheap safety measures that can be built into cars that would prevent self-driving cars from being dangerous “i.e. less dangerous than manually driven cars”, will they? Does GM or Ford make that car? If GM makes your future self-driving car, with the direction the current corporate leadership of GM is going, I hope your car will come with a free coffin. Does it have self-driving tech from Google? Google tech = deathtrap.
There’s no practical reason why the computer in the car has to be complicated to use. The computer isn’t necessarily any more powerful or complicated than what a relatively cheap plc could do. Car companies could theoretically create software that interfaces via a usb cable with a simple ui and let’s you run diagnostics and install new components/update firmware easily enough so that technicians could learn and do this process easily even if diy types were too intimidated. I think the auto companies intentionally try to keep their systems proprietary so that you have to go to their service centers and get gouged on repairs. The competitiveness of the auto industry is turning it into another printer ink/toner economy where they try to suck their profits on the back end.
Thomas Roberts, every engineering firm builds to ensure the product lasts a certain number of years.
Even the Japanese manufacturers.
It could be “planned obsolescence”, I suppose, but it is certainly sensible design, else we’d all have $500,000 cars, designed to last even after our houses have crumbled to dust. I’m making that number up. It’d probably be million dollar cars.
The difference in quality, to the degree it exists, is likely to be because of bad processes, more often than not.
Or an attitude that is prepared to set correct processes aside in order to keep the manufacturing line open. Or the Japanese companies minimize changes from year to year. Or they aim for 12 years while GM aims for 10 . . . though I seriously doubt this last one.
No Ed,
Cars designed to last, wouldn’t cost a million dollars. For decades cars have been designed to last for about 100,000 miles before anything major happens, after that, the big repairs start happening, and after 200,000 miles a car is considered almost worthless.
And yes, cars are intentionally designed to fail after a roughly set amount of miles, it’s not to be cheaper. You ever wonder why, cars can have so much break on them, but, they almost never get in accidents because of stuff breaking down. They are designed that way, if cars that broke down, caused deadly accidents, people would notice and demand action.
The problem isn’t just that parts break, it’s that parts are designed to be intentionally hard to replace.
An infamous example are the headlights, over time they were made harder and harder to get at, in some cars, you actually have to remove the bumper, the battery, or other parts of your car to get at it. Wonder why? Because, in the owners manual it says take your car to the dealership. Over the years, some car manufactures wanted a bigger slice of the car sale, in order to appease dealerships, they made everyday things expensive and hard to replace. Fortunately, for the headlights some car manufactures switched to LED’s and after a decade, customers noticed and now most new cars have them. Both the Dealerships and the car manufactures though, want new sales.
Another example is the resonator, a part that just muffles sound and is very prone to rusting a giant hole into it. Need to replace it? GM often makes the entire exhaust system one part that costs a thousand or 2 to replace, why cannot this one very simple part, be swapped out? Design.
What about timing belts? Should they even be allowed to exist? The list goes on.
Over the last almost 15 years now, what improvements have cars actually had? Stability Control and the frame is better designed for partial front impacts, that’s about it “making these changes, were things that were forced on them”. They have made cars look different, to make yours look out of date, they put all sorts of nonsense in the cabin of the car like gps systems that won’t be updated after a set number of years, but they have not done much else. They did though have many iterations of the same parts, though, so finding exact replacements will get harder over time.
What is the operating time on a car? 50 mph times 2000 hours running time = 100,000 miles on the odometer. 25 mph = 4000 hours running time. 2000 hours running time = about 90 days, 4000 hours = 6 months. So we operate a vehicle between 3 to 6 months and throw it away. What a waste!
It was never about the cost of the razor. It still is about the cost of the replacement proprietary blades.
re: “There’s no practical reason why the computer in the car has to be complicated to use. The computer isn’t necessarily any more powerful or complicated than what a relatively cheap plc could do. Car companies could theoretically create software that interfaces via a usb cable with a simple ui and let’s you run diagnostics and install new components/update firmware easily enough so that technicians could learn and do this process easily even if diy types were too intimidated….”
This comment demonstrates an astounding lack of understanding of how modern, computer-controlled cars are designed and how they work. For starters, there can be as many as 70 or more controllers–CPUs, PLCs, SOCs, etc.– in contemporary autos. And, there is a worldwide standard dictating how the various controllers communicate with each other:
https://en.wikipedia.org/wiki/CAN_bus
There is also a standardized diagnostic interface, called ‘On-Board Diagnostics II,’ which first became common–if not mandatory–in 1996 model-year autos around the world:
https://en.wikipedia.org/wiki/On-board_diagnostics
The original OBD was more-or-less proprietary, but ODB-II has at least (IIRC) 700 coded diagnostic messages that are common to all makes and models; higher numbers are indeed proprietary, but once you read the code you can usually find an online video of someone explaining the problem and the remedy. ODB-II code readers are cheap, and can easily be used by a ‘DIYer:’
https://www.summitracing.com/parts/wmr-w2977?seid=srese1&gclid=EAIaIQobChMInJCT3J6Y6QIVuD6tBh2jTwSzEAQYAiABEgLs-vD_BwE
The code readers can be used to read warning/trouble codes, and most allow you to clear the code if it’s transient but, of course, the code will re-appear if it’s not (Side note: As often as not a ‘Check Engine Light,’ or ‘CEL’ to those in the know, will show a failing O2 sensor–even pinpointing which one of the 2-4 the car is likely to have–or an improperly installed gas cap, third most common is a misfire, and the OBD code can usually indicate on which cylinder, often caused by a defective COP–‘coil on plug’ or simply a fouled fuel injector or defective spark plug).
There are more sophisticated–translation: expensive–diagnostic equipment available to dealerships and many independent shops, but an OBD-II readout can identify all but the most arcane anomalies. The OBD-II system is so efficient and effective that the ‘old school’ smog test–with a probe (ahem) inserted in the exhaust pipe–is no longer necessary on newer cars; the tech only has to read the OBD-II status and verify none of the mandatory smog equipment has been tampered-with. The OBD-II, among all the other miraculous things it can do, monitors the performance of catalytic converters, as I found out the hard way when I accidentally cleared the cat’s performance history, which caused me to fail a California smog test in my 2000 Lincoln LS (I had to drive the car for almost 50 miles so the ECM could re-verify the proper operation of the cat and pass the test).
As for ‘updating the firmware,’ this is done hundreds, if not thousands of time a day by DIYers wishing to achieve greater performance, economy, whatever, often with addition–or deletion–of equipment or accessories:
https://www.summitracing.com/parts/src-3545-s2?seid=srese1&gclid=EAIaIQobChMI6NvB66CY6QIVlxatBh31_QZ6EAQYASABEgKdzfD_BwE
With these, you can reprogram the ECU (or ECM; the ‘engine control unit/module’) to, for instance, achieve somewhat better performance by running a higher grade of fuel or perhaps E85. They will also, among many other capabilities, allow the DIYer to change the shift points in automatic transmissions–also computer-controlled these days–usually allowing for a bit more performance by increasing the shift point RPMs (or encouraging faster downshifts to a lower gear for greater acceleration, at the cost of a bit of MPG). These ‘tuners’ allow the user to store the ‘stock’ programming, for re-installation if the ‘tune’ causes a problem or, ahem, the car needs a safety or smog inspection.
re: “What about timing belts? Should they even be allowed to exist?”
You’re proposing that we make timing belts illegal? Guess you’re not a Libertarian.
Timing belts are usually only used in overhead cam (OHC) engines, which most engines are these days (except for the ‘small block Chevys, or ‘SBCs,’ which are still used in the new Corvette have have been functionally unchanged since their introduction in 1955). I presume you’re alluding to the fact that timing belts have a known, limited lifespan, usually between 60-100K miles, and the replacement–usually including replacing the water pump since they’re life-limited to about the same mileage and easily accessible when the belt is–is also included in the cost. The alternative, a timing chain (or chains) should be somewhat more durable, but they’re not without issues as well. Timing chains are driven, and drive, one or more sprockets and both the links on the chain and the teeth on the sprockets will wear with use, and the chain will stretch over time and miles. Timing belts have, believe it or not, been designed to be (relatively) easy to change, whereas chains can be a real PITA (the sprockets/gears need to be removed and replaced as well). Timing belts are tensioned with a spring-loaded, smooth wheel which don’t usually cause problems, but may be replaced on principle when doing a belt change. Timing chains require tensioners that are loaded by hydraulic pressure, and they not only can wear but have been known to break (one of the reasons you should usually stick with the manufacturers’ oil viscosity recommendation, as the tensioners need oil pressure ASAP on startup to prevent damage).
Given my drothers, I usually prefer engines with chains, my Mustang GT has 4, and previous versions of the engine were known to break tensioners, esp. if too heavy an oil viscosity was used.
Timing chains also create some noise–which most can’t hear over normal engine noises–and belts are essentially quiet. Timing chains can, however, last the life of the engine if treated properly.
California Bob,
Yes, I am suggesting whether all cars should have to have timing chains “assuming it’s not an electric car”. Timing belts are maybe $300 cheaper, but, require expensive maintenance at least several times in a cars life, if that’s not done or you buy a used car and it wasn’t done or just randomly, it can fail without warning about blow out engine.
Timing chains can last an entire cars life and give warnings they are about to fail.
Because, most car loans are pushing 7 years now, that first timing belt adjustment, will cost alot more than that $300.
Timing belts are a mechanical way to transfer energy. Modern cars will use electricity for that. Allows for a much easier hybridization of a car and makes packaging much easier. The reason why belts/chains are still used is legacy designs
I really hope that everyone who listened like good little sheep and bleated their approval for the destruction of the economy enjoys their new poverty. A nation of suckers willingly ushering in their own destruction. Well done. You deserve it.
Reality, methinks your mind belies your handle. But you sound desperate, and I hope you are correct in that respect at least.
Our former economy bore a great deal of unnecessary fat. Where I live there are plenty of capable Jamaican and Puerto Rican mechanics who work out of their yards, for prices that are about half of the least you could pay in regular indoor shops.
And I think these low overhead operations will be the last to fold.
But in any case I think we should all pray for a big depression and long may it last, because it is our last chance to ward off major climate change disaster.
Thats climate change – it changes throughout time.
Live off the land with no fuel no heat – burn trees.
Grow your own food -need fertilizers.
Just saying from someone living off-grid, with a well that requires back up batteries and generator that needs oil to maintain.
I could list more but do me a favor and ‘walk your talk’ before you opine on climate change.
I’d like to reduce worldwide pollution. I consider environmental policy when I vote. I think people who think pollution v. economic success are truly missing the forest for the trees. It’s not a binary choice. However . . .
I am certainly not hoping for “a big depression”.
Some people don’t have a big bank account to easily weather such a phenomenon.
Airlines like rynair who will be flying in a month or so should have hedged their fuel massively when it took that massive hit.
I don’t need to walk my talk. The facts are obvious, or should be if we didn’t live in this ambiance of mis and disinformation from the mass media. So let’s restate the obvious.
Human laws can be changed by humans. Physical laws can not. The physical law says that if we go on like this much longer most of us will die, including most probably you. So if you want to live you had better change the system.
Reality, no truer words were ever spoken.
I love driving. I love fast, throaty cars, cylinders in-line, passing power. You gotta have passing power on the autostrada and autostrada with all those blasted tunnels. Trips anywhere in the world, leisure travel- those things were pretty cool.
This must only mean goodby, so long, nice knowing ya petro dollar and all the conveniences it brought. COVID19 withal and howbeit, the petro dollar couldn’t stand up to a negative returns on investment no matter how much the FED printed or didn’t print.
I live in a megacity. I use uber (or other taxi/limo services exclusively- some of them are even EVs) – don’t own a car (why would I?), I order everything online or locally (free delivery), Want McDonalds or groceries? Get delivery. I work from home (mobile/remote worker) – Zoom/Skype/Webex ect…
It’s the second decade of the 21st century. Adapt.
Nicko2
You seem to rely on the “cash burner” corporations for many of your needs. How do you think this will work out for you in the longer run?
Not picking on you. When I order something with free shipping, I always ask myself, “how do they do that?” Makes me suspicious of what is just over the horizon.
Hey Nicko,
I like magical thinking too, however,
ow do the food and supplies you order get to your destination?
It sure ain’t drones dropping them off to supply centers.
For what it is worth, I lived through the manufacturing job exodus. I wonder how long before the money guys notice that work from home includes homes in Bangalore and other low cost locations.
@I.E.K
Unfortunately I think you are very correct for the most part. I grew up in central Illinois and saw the tail end of the collapse of the car and heavy equipment manufacturers. My uncle told stories of the thick of it that I was too young to remember. As an social worker whose agency just received its first “telehealth” machine I can see the writing on the wall. The only change I would make to your sentiment is it won’t start with Bangalore it will start with Jackson Mississippi. The low wage states will eat the wages of the high wage states. Then once the protections for office work has been broken down from within it will move overseas and be just another lost sector.
To all the self important comments about sheep and other nonsense people are not stupid and they are not unaware. I work with the poorest, sickest, and most uneducated people in my region as part of my job. They are aware of what is going on as are my colleagues and the over educated self important white collar people I partner with in the community. The problem isn’t people being sheep its the rich being wolves. So get off your high horses.
@icanwalk
Free shipping == shipping costs are included in the price
Nicko2: Your Uber / taxi / limo uses fossil fuels. The electric car, unless it’s charged via solar panels, likely uses fossil fuels in the form of electrical generation. Everything your order for delivery is brought to you by a conveyance that likely runs on fossil fuels. Your Skype/Zoom/Webex? Runs on electricity likely fueled by natural gas aka fossil fuels. In your megacity (a heat island), you wouldn’t survive a week in the heat of summer without fossil fuels. No water pumps, no public transportation, no sewage pumps, no elevators, no air conditioning….
There is no such thing as “free delivery”. Everyone must get paid. It’s buried in the prices you pay.
IMHO, it is you that needs to think things through a bit. None of the above operates on fairy dust and rainbows. And the second decade of the 21st Century may bring more surprises than you anticipate.
Niko2,
So you adapted to live like a king. Everything is delivered and done by others. Nice. What is it you do on webex? Talk?
I.E.K., dead right. That’s what happened after Y2K. Companies were forced to farm out software development because there was so much work to be done on a short timeline.
They discovered that the internet, the software tools, and the education system in India all supported that mode of work.
This slowdown will be a revelation to someone, somewhere at some poor low level white collar person’s expense.
@Reality-
>A nation of suckers willingly ushering in their own
>destruction.
The major industries in our economy were already leveraged up to their proverbial eye teeth and dependent on fed stimulus and lower interest rates whenever the economy sneezed. It will be good to see them reorganize their business plans and replace management in order to survive in a free-market.
A market needs rules. Those that make the rules control the market. No market is free. Free-market is just a propaganda term. A lousy one.
“Those that make the rules control the market.”
Exactly. Effectively “free money” via Fed policies encouraged bad behavior. Bought government allowed the gutting of strategic US industries via exportation to an ENEMY whose rapid rise WE funded and enabled.
In both cases, the old commie adage found in various forms, “A capitalist will sell you the rope you hang them with,” is relevant. By law, corporations have a fiduciary responsibility to provide maximum return to their stockholders. In an ideal world that would be via a wise path, but this isn’t an ideal world.
In the first case, corporations “bought the rope” from the Fed. In the second, they “bought the rope” from China because they were ALLOWED and even ENCOURAGED to do so by our BOUGHT government which, itself, was also “buying the rope.”
NoEasy/Char/Winston-check/check/check. The inevitable result of our ‘American Exceptionalism’ hubris, and the concomitant neglect/subversion of the ‘well-regulated’ qualifier in Adam Smith’s definition of ‘free markets’.
May we all find a better day.
@winston
Fed is not the big problem. Having access to cheaper money is an issue, see South Korea*, but not that big of a deal in most American sectors as financing costs are not that important with the near zero interest rates at this moment
*chaebols could lend from their own banks. Korea has always had a relative high inflation. So chaebols could lend with negative real interest rates which makes companies profitable as a real estate play outside if the product is sold profitable. It is for non-chaebol companies very hard to compete with companies that can be successful without being able to sell goods at a profit. This is one of the reasons why the chaebols completely dominate the Korean economy.
@char
Free shipping == shipping costs are included in the price
Except when it isn’t. Shipping costs take the place of the profit on the sale of the item.
Seller makes nothing.
Heck of a business plan
We will look at Sweden & Italy and were they will be in a year. My bet is on Italy. Most of the damage C19 cause is due to people self quarantine. Only a small part is the state forcing it. And to get the damage as small as possible you need to end the spread as fast as possible. So a hard lockdown to stop new infections and after 6 to 8 weeks you can slowly restart the economy without people doing an everlasting self quarantine. What Georgia is doing will kill their economy.
And, gosh, it might even kill a few people.
Sweden seems more likely to me to be better off long run. Slightly less crowded, much less cultural physical contact, slightly younger population.
Reality,
Unfortunately too many people don’t think for themselves nor do any research or reflect on what’s going on. People take advantage of that apathy.
I have not participated in the nonsense that is going on. I do share my thoughts with others based on the research I’ve done and my obsevations. I am am definitely in the minority based on the interactions I’ve had.
Everyone should be allowed to make their own choices but you will have to deal with consequences good or bad. Even God allows you to make your own choices.
I like to control and manage what I can. I don’t accept when people that could careless about me want to impose their will on me for MY SAFETY AND PROTECTION.
So some of us will come out of this cloudy time stronger but many won’t We will all be affected in some way.
I’m still living my life :-)
My 150 cents
Mother earth has the last say. It will always be seeking equilibrium. Sometimes the price to pay for it’s inhabitants is more inflated than others. This is one of those times. Adapt for survival. Being happy and curious is key to work and survival . Things needed to change. It is happening everywhere not just the US.
One of my best physics professors was a Scotsman who taught Newtonian Dynamics. He too understood that earth will find its equilibrium after having forces acting upon it. As an example, 65 million years ago an asteroid messed up our planet for a while.
‘A while’ being the key thing to think about as Planet Earth’s time frame is a bit longer than the time frame of a human’s life.
Someone with your mindset might say “You deserve to die from the virus”.
I might say “you” , but not yet :>{)
Whose economy?
…and this is still the good days for mechanics. Imagine when the cash-for-clunkers programmes restart. Which quite frankly looks inevitable if the world wants to evade an even bigger recession. The question is how much will it get reformed, as having regular bail-outs every 10 year is not such a great economic cycle.
Amen. Good name.
I fear that we are celebrating victory way, way too soon. We are like the falsely informed Japanese public during WWII who celebrated victory in Guadalcanal as their defeated troops starved there. This foolishness will later sink demand and our economy during this coming fall or winter.
Sadly, as Bill Gates said recently in a CNN townhall, even the limited, available testing in the US has a turnabout time to get results so slow that it allows people to infect others in the days while they are waiting for results. Crazies, who do not understand how our medical resources are very severely limited, in part due to China’s cutting medical shipments out, will take advantage of the summer reductions in infections due to the virus’s difficulty in reproducing on hot surfaces to not wear masks or social distance — so in many areas they are creating new virus reservoirs that may later explode this fall and winter.
AGAIN, as in this coming fall or winter, as happened in Italy, doctors may not have enough ventilators or oxygen or other medical resources to treat all incoming patients. NBC News’s report that kids may get heart failure and die if not treated immediately if infected with this virus are very, very alarming.
As an angry parent, I think we should pass laws denying these foolish, ignorant protesters or those others who chose to risk it recklessly to go to beach, etc., medical care until others (who were not reckless) are treated first.
Massachusetts is experiencing now what other, less careful states may later experience. It finally ordered the use of face masks.
Go ahead and continue to lock yourself up. My rights do not end where your fear begins. Not everyone is a coward like yourself. Some people still want to live like adults in a free society. Get it, cupcake?
I think that a law should be passed allowing foolishpeople to give up all rights to treatment if they get infected with the virus then they should be free to go out unhindered. Give them their freedom to die.
Think of it as evolution in action, Reality. The average IQ of Americans is then bound to rise.
There’s no more irritating person than one that refuses responsibility and depends upon others to protect themselves.
Your ‘rights’ only extend to the point of your not interacting with another human being. When you do, you have a community obligation. When you enter a store without a facemask and others are covered, your are exploiting those who have accepted community responsibility.
If you don’t believe in community, please go live with the badgers.
The collapse in oil is a blessing. The earth is still dying due to the burning of fossil fuels. This is an opportunity to turn away. Wind and solar with large scale grid storage. Or the next time there’s a die-off it could be our extinction event.
What I’m finding strange is that, unlike other times when crude prices decreased, there’s been little or no movement in prices at the local gas stations. I expect they are sitting on fuel bought and not sold, and that’s why, but still, after 5 weeks there should have been some movement. They sure aren’t slow passing on increases when crude goes up.
Gasoline is a $1.08 at Costco in Texas.
It’s been 20+ years since I can remember prices being that low.
$1.91 a gallon at Costco in Henderson, NV. Why so high ?
1.25$ at Costco in Denver suburbs
Average price in UK £1.09 per LITRE
You pay $1.25 per gallon
Gallon = 3.785 litres
So after £ to $ conversion, UK average price for “petrol” is $4.11
America is very lucky…. our price is mostly government tax
Nobody in Europe uses “gallon” measurement at a petrol station
Alan: if you are going to talk about gallons you need to specify which gallon: Imperial or US. The same drum is 45 gallons in Canada and 55 in the US.
Agreeing with you of course that the US gets a much better tax deal than UK or Canada. BTW: the last tax at the pump comes after several taxes, i.e., a tax on a tax. This is supposed to be illegal under common law.
PS: No one in Canada uses gallon at a gas station, it’s liters, but virtually no one in casual conversation refers to the drum in liters. I’ve recently had to explain to a Latino that Canada’s conversion to metric is not just partial it’s a bit of a pretend. Who would order 454 gms of butter but that’s what it says on the package. I don’t how lumber works in UK but in Canada’s Home Depot all is in inches and feet.
I assume in pub, like me, you are not ordering a liter of beer.
San Francisco gas prices sitting at 2.99 for weeks now…obviously no hurry to come down. Energy complex must be OK…so far.
How much of that 2.99 is taxes for San Fran gasoline?
Texas has a 20 cent tax per gallon + 6.25% sales tax. Add in the 18.4 cent Federal tax and that $1.08 per gallon is really only 65 cents.
The markup is generally 15 cents ( maybe less at Costco ) so the gasoline distributor is only receiving 50 cents per gallon.
California and local taxes: Of $2.99 a gallon in gas, taxes and fees = Gasoline excise tax of 47.3 cents; +2.25% in sales tax (=6.7 cents); +local sales tax up to 2.5% (=7.5 cents); + 2 cents underground storage maintenance fee. Total = 63.5 cents.
The rest is the industry oligopoly in California, run by Chevron.
Also, there is no pipeline to connect California across the Rockies to the producing regions of the US, where they cannot even give away their crude oil. So WTI is irrelevant. California produces some of its own crude oil and imports some from Alaska, and imports the rest from overseas.
Curious as to yoy volumes for bunker fuel, Wolf.
You have to remember gas prices aren’t 100% correlated with oil prices. Taxes are fixed, both state and federal. That’s anywhere from 50 to 80 cents a gallon that you pay whether oil is $10 or $50 a barrel. And a certain % of the price is the gas station’s costs which also don’t change with the price of oil.
Gas is down about 30% in my area since the pre ‘Rona days. Which I think corresponds about right with the drop in oil price, given all the other fixed costs.
Forgot to add the costs of boutique blends of fuel mandated by the state, or CARB, that are not no malls produced elsewhere.
How are petro-countries like Venezuela, Iraq, Saudi Arabia, etc going to handle the lower demand and lower prices?
Badly.
The same dynamic played out during the GFC. This is exponentially worse.
C
Saudi and most of the Gulf monarchies are cash rich, they will adapt and accelerate the transition beyond oil based economies. Dubai will be really cheap to visit for the next few years.
Is this based on fact or belief?
The Saudi economy supposedly breaks even at oil = $63/barrel.
At $20-ish, it is hemorrhaging cash like a severed carotid.
Venezuela had problems selling oil before C so situation did not really changed. Besides China & Russia have overproduction now so dumping production in Venezuela without a chance of being paid is still a good deal as it f*cks America and creates local work. Venezuela also seems to handle C much better than any of the Latin American countries rule by American allies.
The fact that Maduro still rules Venezuela is a dictatorial miracle, there are urban-legends spreading around about their gold-reserves being emptied in the last few weeks by Russia and Iran (assume them to be true). However his arch-enemies are busy minding their own business, so there is no huge international pressure on the country, which on the other hand is great for them.
In Venezuela the real deal isn’t about the present oil anyway, but the vast amount stored under the surface – that’s what really gives them power, so as long as they don’t sell it to some big-oil company there will always be a similarly-minded villain willing to lend a helping hand with their illiquidity crises.
The petro-countries most exposed are the lesser ones in Africa that were already dead last by every known economical measures and are now facing an epidemic and a huge loss of income. The oil market knows no fair-trade rules, so they are the ones facing the biggest consequences.
Being hated by America does not make you a dictator. He won the election fair
For most of the world Professor, whether they dare to say so or not, it is the US and its idiot minions that are the villains. The US has no regard for international law and thinks it should rule the world, but maybe this mad delusion will be dispelled by the economic consequences of the pandemic. Probably you are an atheist and will think I am crazy, but I like to think the virus was sent by God to strike US down.
BTW, when I talk about US I don’t mean us USians. I mean our evil Government.
I remember a statistic way back in the 90s during the Clinton admin that the Saudis needed at least $18 a barrel to keep their welfare system floating — back then triggering riots and the creation of Bin Laden. Factor in some inflation, wars with Yemen, increased Russia production, Iraq online again, Iran oil smuggling and fracking — sounds like they needed an IPO for 20 ships full of oil to nowhere. This all with oil more clean than Venezuela.
Wolf,
1) I’m actually surprised gasoline demand didn’t fall by more – with very widespread lockdowns and most businesses closed, nobody is commuting to work…which I always assumed was the primary driver (so to speak) of gas usage. 50% down yoy seems on the low end…I would not have been surprised by 70% down.
2) Gradual reduction in yoy losses is a pretty darn good metric for public patience and compliance (although people still aren’t going to work…what destination accounts for the gradual 12% reduction in yoy shortfalls?).
3) Looking at how quickly the wheels have come off the US economy (not really a surprise for those following the macro trends for 20+ yrs) you really have to marvel at the Keynesian maximalist philosophy that views private savings as a “nonproductive sink” that keeps economies from “operating at their full potential”.
When you artificially gun up an economy through habitual deficit spending (almost always calculated to obtain political goals rather than productive efficiency) you in essence incinerate the reserve/emergency capacity of the entire nation.
Well done, DC.
From superpower without effective peer to crippled nation in 50 years.
Pelosi has handbags older than that.
It would be great for the outside world if the US Empire folds. Unfortunately it would leave the Chinese Empire on top, but they have a long way to go before they could hope to be as EVIL as US. And probably they are smart enough to use more subtle means than outright BRUTE FORCE like US.
Please study what takes place in China.
You would not want them as they are as Global Top Dog.
Seriously. Please look into it.
I am saying that as evil as they might like to be, they don’t have the economic capacity to be as evil as US, beyond their borders.
Funniest thing I’ve seen in years. Thanks.
(If you’re not joking I highly recommend you go live outside the USA or Western Europe for 5-6 years before making incredibly naive statements.)
Great advice. I am a mildly patriotic American, but living outside the country for ten years gave me a whole new appreciation for the USA, even with all its faults and blemishes. Citizens of the USA who pretend to hate the country really should go live somewhere else for a few years to gain a new perspective.
Corey I don’t deny that for many of us the US is a nice place to live. But I say the government is evil because it sends violence and misery all over the world, sometimes indirectly. I’m sure I am forgetting a lot but I could mention Iran, Vietnam, Nicaragua, Chile, Haiti, Iraq, Libya, Syria, Ukraine, Yemen, Bolivia, Venezuela, and Iran again. You might think the place you went was bad but it was probably inconceivably better than the places I mentioned.
Canadian comment: if you have to live next to a superpower, you can do worse than the US. Most stuff effecting both, (river flows etc.) is worked out through negotiation and legal channels without relative power forcing the outcome.
Example: A while back the US put machine guns on Great Lakes patrol boats. Took them off after Canada said treaty ending war of 1812 demilitarized the Lakes.
The North West Passage thru the Arctic is an area of dispute between Can and US. Can say’s it’s Canadian waters, US says it’s international. So US says let’s go to World Court. Canada won’t go.
Back when the passage was all ice, the US sent the Manhattan, a tanker/ ice breaker
thru pointedly without flying Canadian flag as well as US flag. It got stuck and had to be broken out by Can Ice Breaker Louis St. Laurent.
Now so much ice has melted a regular bulk carrier went thru just to save time.
So this area will heat up legally as well and with Russian, Norwegian, US etc. claims
it seems headed for international agreement.
I’d rather live in the woods and fend for myself and family off nature than live under communist rule by China.
Anthony-you might want to check on the actual availability of woods that could truly sustain you. The supply is limited, and already occupied by more folks than you might believe. (…and now back out for more limbing and mowing in advance of an early-approaching CA fire season…).
Good luck to you, and may we all find a better day.
“The EIA measures weekly consumption in terms of product supplied, such as by refineries and blenders, not by retail sales.”
This is not sales to consumers but to the channel. I expect a lot of channel stuffing
Private savings is what Keynesian philosophy is all about, nor do countries do much of it aka partial nationalization of investment until interest rates rise. I am amazed people still don’t get it.
Those of us who are enlightened and reality based have long been saying “keep it in ground.”
But no. The Fed has to flood the world with it’s obsessive worship of credit “markets” with rampant planet destroying over production.
I have to say, in Seattle the air has been clean lately, the noise levels are way down, and there are much better views of the mountains. I would gladly keep those things in exchange for less income and consumerism, but I have a feeling I’m an outlier.
As long as you can keep eating, sure. Good luck.
Kurt, we feed the population and then some with less than 5% of GDP (5% of our efforts). I don’t think we have to worry about getting fed if we reduce total GDP. It’s not helpful to think about everything with extremes being the only possibilities.
I would agree, but it just makes the tinnitus more audible and I’m still sneezing. I just now can be sure it’s hay fever, not fumes.
Agree, us enlightened folks need to start worriyng about the global cooling – the next big calamity. With all this reduction in burning how long before Canads freezes over.
The first chart is most telling. Things are slowly improving as the economy is opening up again. Give it a few more weeks and things will be back to normal.
You’re getting “weeks” and “years” confused.
WR:
5-2-20
Anecdotal evidence re Santa Clara V.: conversation with one of my sons last night; construction pretty much re-opened up.
He was now (superintendent of a medium size co.) going around re-connecting with subs to re-open jobs.
Yeah, I also saw construction workers checking equipment, etc. But we’re talking travel by aircraft for tourism and business (jet fuel) and commuting by car (gasoline).
After 9/11, it took the airline industry something like 7 years to get back to their prior passenger volume.
Tourism will recover very slowly. And business travel is likely permanently impacted as more meetings will be conducted via video link. Saves a ton of money and time. Some meetings will still take place in person, but many won’t. That’s a structural decline in demand.
And commuting by car will be much lower for quite a while for two reasons: high unemployment rates going forward even after the dust settles, and more work from home.
Gasoline consumption in the US peaked in 2007 and then declined. Over the past few years, it started rising again and in 2019 was up a notch over 2007. You can see that in the gasoline chart above. That’s how long it took to get gasoline consumption back up after the Great Recession: 12 years.
Your own chart is showing the past 3 weeks have seen improvement. The trend is your friend.
“And business travel is likely permanently impacted as more meetings will be conducted via video link. Saves a ton of money and time.
I’ll believe this when I see it. GoToMeeting and Webex have been around forever. It’s not like pre ‘Rona these things were secrets. Yet everyone still wants people together in a room for a meeting vs doing it online. And they’ll pay $1000 for a flight and hotel room, per person, to make that happen.
‘I’ll believe this when I see it’
Guess that senile ole dumbbell Warren Buffet is losing it. Just bailed completely on airlines at about a 2 billion loss. Air travel is the main vehicle for major conventions which have folks from multi-states. And Buffet is super-contrarian! Buys when others are selling.
But now he’s a second- string contrarian, albeit one with billions. His partner Munger sums up their strategy: we just want to ride out the storm.
I welcome lower gas prices. I drive less and consume less as do most people in my neighborhood and around my city.
Mother nature bats last, as they say….
Perhaps 6 billion people is, well, a few to many.
Most people die from lifestyle diseases. Call it Covid if you like, it doesn’t really matter what you call it.
The mortality curves say that COVID is not a lifestyle disease any more than flu is. Some healthy young-ish people I know personally have gotten COVID pretty bad.
I suppose it’s like the difference between a recession (others lose jobs) and a depression (you lose yours). Once people you know get hammered it gets a lot more real.
Sadly, we get to have both COVID and a huge recession.
In my county of about ~100K people, the number of deaths is in single digits. It’s a non-entity for 99%+ of the population. And that is reflected in the fact everyone is just going about their business. The ‘Rona for all intents and purposes no longer is a thing around here. All retail, open. Golf courses, open. Construction projects, constructing. Car dealers open. Real estate, holding open houses. Public parks, beaches, hiking trails, boat ramps, all open.
Other than schools which will not open until Sept and restaurants, which I think are scheduled to open sometime in June, everything is back to normal.
Then you have the investment opportunity of the last few centuries. You can buy the oil majors for a 50 % discount. I hope you are successful because I would rather lose the debate than get Cov. Every day some new complication from having it pops up. Swollen purple toes, heart and kidney probs. One lady said it felt like having yr lungs full of broken glass.
Another way you may be right: enter ‘Virus not containable’ and a piece from the Atlantic Monthly comes up (free for now) to the effect that the war is lost. The piece is headed: ‘You will probably get the virus’
SARS was contained in time but due to a number of factors (China’s initial cover up, it’s just the flu etc.) this one has broken out into main pop and with each case infecting multiples…we are f&cked.
When Bismark was wallowing with damaged rudder the crew were wondering what now. The answer was that the ship’s stores were opened to all and you could have anything.
Global population is actually over 7 billion, Africa and South Asia are still on track to add another 2 billion over the next twenty years. The new middle class rising in Africa/Middle East/South Asia will be the driver of global growth for the rest of the century.
Covid is also a disease that a lot of those countries can defeat unlike the so-called First World West.
Would be fun if say Burundi sends a plane loaded to Europe with first aid.
One of those ‘infinite growth’ believers I presume. Good Luck with that.
Life is such a killer. It’s almost as if everyone is born with a pre-existing condition.
That is the best comment I’ve read in a long time. Well done, lenert…
There have been layoffs of oil and gas industry people in Houston and the Permian Basin of West Texas. A hospital in Odessa, TX had to layoff workers.
30 million Americans have filed for unemployment. Some who did not work for four quarters, quit, or were fired will not be eligible for unemployment.
I checked my credit card statement. I topped off my gas tank on March 14 and have used about a quarter tank since.
There are unemployment benefits now for people who did not pay for the unemployment insurance. This includes sole proprietors, gig workers etc. This is part of the trillions we are throwing at this covid problem.
We have a generational opportunity to fix a lot that was wrong with our pre-covid society, right now. Will we take it?
We’ve reduced pollution. We’ve discovered the evils of excess debt. We’ve discovered that work-from-home can be a good thing as long as there’s a good way to school the kids. We’ve rediscovered the virtues of simplicity in many things.
Honestly, a lot of what we’ve given up, I really don’t miss. And the global environment needs us burning less oil anyway.
Is there a way to rebuild the economy and get everyone back to productive lives, without ruining everything that’s gotten better in the last month?
Of course there is a way but it is hidden in plain sight, since the mass media will never allude to it. The international oligarchy controls most governments and they don’t want what you want. Their only concern is to increase their wealth and power, so the only solution is to take it away from them. I hope this reality will eventually break through the information barrier, as our lives continue to get worse.
Are the banks still to big to fail and when they do, dont we own their sorry arses at zero cost
Same for airlines, wasn’t that long ago most countries owned their national airlines
Can you clarify what else will fall into public ownership
I’m getting quite excited at the prospect of socialism being handed to us on a plate
Just need to bring back Jeremy Corbyn to sort out world peace
Jobsagoodun
I don’t understand this. Is it meant to be sarcastic? The present rulers aren’t going to hand us anything. As I said we will have to take it, hopefully without using violence.
The global renewable energy revolution is happening; It’s led by China.
Wrong. China is currently building around 700 coal fired energy plants at home and abroad. Do a web search on the subject. You’ll be amazed at what they are doing in this area. What they say (“We support renewables”) and what they do are not the same. The amount of pollution that China creates every year dwarfs all other nations. Greta was bitching at the wrong countries when she went on her tantrum tour last year. She should have gone to Beijing and lectured the Chinese.
yep, like a certain wise person said recently: “This along with record low interest rates means it’s the right time for a worker-led, mass investment in green infrastructure to save our planet.”
Honestly, while I think there is some merit to that idea, how is anyone going to really square away that with the fact that our entire economy is built around oil. A majority of our transportation is build around that. Restrict that, and society will slowly fray and chip at the edges.
This transformation isn’t generational work, it would be the work of centuries. Or until oil runs out.
The earth has about 1 kilowatt per square meter from the sun on a clear day in direct sunlight. Man will harness this power since that’s what we do. The time line is not perfectly clear. All the smash the state, worker revolution comments are really only whining from ineffective personalities with narrow views of man and his environment. Please don’t get me wrong, I like oil and power,but we ultimately will migrate to a better place. I like wind too.
I think the one thing that everyone who is enamored with renewables should realize is that there is a cost to it. As long as people are clear eyed about the consequences associated with such, and not be clueless cheerleaders or just blatantly ignore the consequences.
Fundamentally, the planet needs to move away from oil as a supply of energy mainly because it is a finite resource, and it’s better to transition away from it while that resource is still in relative abundance than when it becomes scarce.
Sadly, I do not trust that corporations will see so clearly… and let’s face it. Most if not all our current leaders are idiots who use talking points just to get themselves in power or keep themselves there.
MCH, our corporate leaders aren’t idiots but they share the values of the oligarchy. Their primary objective is to get rich quick, without regard to externalities.
The USA is not universally stupid nor it is a poor country. It could do it in less than 25 years. If the oligarchy wanted to.
When visiting one noticed that not even the easy pickings, like energy savings have been taken yet. The hotel installations looks like Denmark in the 1970’s when heating oil was 0.25 DKK, delivered on the address. Meaning that energy consumption can be cut by 30% over a decade without anyone noticing.
It’s not the money, it’s not the abilities, it is purely a question of will.
Well I think few people realize that oil price is linked to the cost of renewable energy in various contracts as this was mentioned by the Laurentian bank president in Canada as a while back, last 2 few quarters the bank had a large portfolio loans to the energy sector that they had to write down.
So the next thing related to oil/gas is I heard that pipeline capacity has dropped to 70% and there is likely curtailments in production as storage capacity is near its limits so those fixed use pipeline contracts could be a force major, an act of god opt out class to be tested in courts whenever they sit!!
Further to that electric rates are sometimes linked to the price of oil in contracts.
So many unknown linkages when you try to stop/restart the economy it becomes unpredictable. So much for the V shaped recovery the market is expecting.
Was reading @zerohedge that when Trump was speaking to SA MBS told others to leave the room as T was livid and he was being threatened with loss of military protection if he did not lower the oil production.. don’t know if this is true but with all the nonsense going on it does not take much for a war to start.
Electricity rates are normally linked to the price of gas. Renewable energy is almost all electricity so it is logical that the price of renewable energy is linked to gas. Especially solar as that competes more with the higher cost producers
Which is more valuable? The economy or the planet? If our economy can’t save the planet don’t you think we should get another one?
But if we got another economy the oligarchs would go broke, so naturally they prefer to save the present economy and lose the planet.
MAGA
We could start by organizing an economy that is capable of manufacturing face masks for everybody in less than two months .
With that as the standard we could move on to other facets of the globalized economy that instantly fail when the slightest hiccup in the supply chain occurs. That’s called regaining national sovereignty.
Or we could just send the richest 1000 Oligarchs to a nice warm cell in Guantanamo. Most contribute absolutely nothing of worth to the nation but are a massive cancerous infection. The few who actually contribute are certainly replaceable. Do you really think the world is better off because Bezos shoveled the entire US competition for retail marketing into the open maw of the Anaconda crawling through his Amazon? Or that Boeing executives are rewarded for murderous criminal malfeasance by massive government bail outs?
Crazy Horse (and others):
All political systems need the rulers and ruled. As long as the “rulers” can keep most of the “ruled” somewhat divided,”warm and fuzzy” we will continue to have the world we live in.
Until we can develop a global system of respect and nourishment not only for the people but also for the planet we will continue to jerk and stumble down a path that appears to me self-destructive.
Re: the “PPP” (Fed Payroll support program):
Family in small business in Santa Clara V. has received their PPP from the Fed. gov. and will be returning all office and tech staff now. All glad to get back to their “routines”; owners laid out with “blue” tape “distances” to maintain between cubicles, etc. So, they chose not to “stay home” and collect the beneficence of the unemployment and subsidiaries benefits…….which they all had already received.
Up here where I live in the foothills of the Sierras our small lake has re-opened today for small boating with “rules” of distancing and attempts to preach, “same households” (etc)…….
Bezos’s competition got what they deserved. He won because he put the customer first and they did not. In 1996, Amazon was a small online bookstore and its largest rivals were 100x its size.
Later, as it grew, the largest retailers of the era became competition. Sears, Montgomery Ward, Circuit City. They refused to change, and they died. We are better for it.
“MAGA” is about trying to go back to a past that sucked rather than invent a better future. Amazon is part of a better future, malls and Sears and overpriced small shops are rightly dead and gone, never to return.
But Amazon grew its book business by undercutting independent bookstores by taking a loss on its sales. When the bookstores folded they raised their prices back. That represents the return of the 19th century age of robber barons. Not exactly the future.
Also, the tax break online sales were given in hindsight was an unfair advantage. Paul is right, many items I buy are now more expensive on amazon. They price match stores like Best Buys big sale items but otherwise I am finding their prices are higher.
I was looking online to buy speaker cable. 100 ft. It was $35 at Amazon but I decided to go to the manufactures website and bought the same cable for $20.
Also I am finding some day to day consumer items are cheaper at the local target than Amazon.
The industrial food chains would be a good place to start. 85 percent of all food in Iowa is imported?
That’s far more efficient. Every tiny, empty state like Iowa doing its own thing would lead to much higher prices and less choice.
“Every country closing its borders and doing everything domestically” was the Soviet model. Not sure what’s funnier — how often people keep trying to return to failed ideas, or the site of “conservative Trump supporters” baying for the immediate implementation of Leonid Brezhnev’s economic policies.
That was not the Soviet model. Comecon countries had their own strong points and exchanged the products they were good in for goods that they weren’t.
The Soviet union had phases of autarky but that was more because the British empire and the US wanted to destroy them by making trade impossible. External imposed autarky is not autarky
Ever tried to find hard firm bacon that used to be a preferred foods? Guess not eh..
Well its all big agri food companies just about no specialty foods.
Look at the Cargills they dominate slaughterhouses they dominate the industry. It is owned by 14 billionaire families, and uses cheap imported labor temporary foreign workers and has the worst safety standards and the most cov19 case and is an essential industry and the regulators allow it to continue.
Maybe the European model of specialty regions is better for everyone not cheap American hotdogs for all that they charge $20 for at ball games!
A college friend had his education paid for with the wages from his dad’s union meatpacking job.
“Comecon” was the entirety of the Soviet space — the USSR and its occupied satellite states (which were de facto provinces of Moscow).
Trade and commerce was restricted entirely to within that space. Average citizens were not allowed to trade or import product from outside the Soviet economic sphere, and Soviet policy forbade competition from abroad in its economic markets.
As for the alleged lack of availability of specialty foods, a quick perusal of retailers like Wegmans, Whole Foods, etc. shows there is greater variety of foods to choose from than ever before.
Many poor and low wage families can’t home school because they don’t have an internet connection at home. Same thing for many workers who have been sent home to work.
Many poor and low wage workers are also in no way equipped to home school. I home schooled my son through high school and it takes an educated and engaged parent to make a success of homeschooling. I highly recommend home schooling, but understand that not everyone can do it.
Did Edison’s mom have internet connection to home teach her boy to read and think?
I gave up on the American educational system when, in 5th grade and on my own, I started reading my father’s high school physics book and my mother’s high school chemistry book. This served me pretty well as an individual but not as a member of society.
Most consumers are unable to discern between NEED and WANT.
Don’t know when to say ENOUGH!
DEBT based consumption cannot go on forever. Now is the best time for reflection what’s really important in life!
Opportunity means little if you do not have the vehicle by which to utilize it…
In the US both parties have been huge supporters of NO Change..
Of bailing out the incompetent corporations
Of giving tax breaks to those same incompetent corporation.
Of making the rules to keep the status quo in place while restricting any actual innovation or change..
So how do you see this Opportunity?
re: “We have a generational opportunity to fix a lot that was wrong with our pre-covid society, right now. Will we take it? ”
Hahahahahahahahahahahahahahahahahahaha …
Um, no.
We have known the problems caused by excess debt for decades – it was last highlighted by the GFC in 2008 . But here in the UK, our population decided they were fed up with the austerity necessary to clean up the debt legacy of the unsustainable spending of the last (socialist) labour government. It was like a family maxing their credit cards out buying c*ap, & then deciding it was hard work paying it off.
So the political dial moved to “cure” a stagnant debt-laden economy………with more unfunded spending. low interest rates & new govt interventions (no choice now!) mean useless Zombie companies stagger on & there is no efficient reallocation of capital. How will the government decide which businesses are worthy of saving? When the huge tax bills for these interventions roll in, will there be ANY motivation to work hard, be creative? Maybe, we redirect our efforts to be more self-sufficient, e.g in my case repairing 4 historic buildings using local materials, “repurposing” materials to build hot water solar, making my own off-grid power system using PV’s, old batteries, Hydro power, biogas, collecting rainwater etc. A lot of my info. is coming from the internet FROM the US; you have great innovators, engineers, can-do attitude, you can overcome these problems as individuals & small communities – whilst solving the environmental issues whilst so doing.
Good to hear positivity over hear too.
Yep. “Austerity” is simply living within one’s means and paying down accumulated debt spent on consumption. Europeans who use it as an epithet want to party on credit until they die and leave younger people with the bill.
Austerity does not work. It destroys the economy. As has been shown time and again. The economy is not a moral play in which being thrifty works nor is it a household but a few million times larger.
Most people do not really comprehend the difference between compounding interest and paying interest on borrowed money.
Asset inflation really isn’t growth.. It negatively affects people the lower down the economic structure. Those at the top who can obtain money cheaply and control assets benefit, those who are poor get crushed.
Austerity does work.. It just doesn’t work for the exponential growth scenario that our modern society is based upon.
On the other hand, IF you want to have something into old age and maybe pass along some to your kin, austerity is the only way of doing it. You aren’t going to do it by being further and further in debt.. No matter what your story is..
As an individual you have choices. One is to pay interest upon interest and the only chance you have of getting ahead is to pray that what you have inflates in value so you can live off someone else’s work and efforts. Otherwise you can save and compound interest. Well, we use to until the modern government decided to continuously bail out the incompetent.
Austerity works but not for modern growth/based society is saying that austerity does not work. Thank you for agreeing with me.
ps Austerity is a concept out of state finance and has no meaning for individual persons.
Austerity is simply “living within one’s means.”
The current economy is anti-austerity, labeling out bailouts to all and sundry with unlimited cash to anyone and everyone.
That makes the value of cash quite questionable, and severely limits future growth.
Why save and invest, making sane tradeoffs and calculating risk, when the state will simply splash out “emergency funding and guarantees” if things go wrong?
A return to basic economics is in order. Creating surplus through adding value, and saving/investing a big chunk of that surplus is the only way out of this mess. Limitless borrowing and spending with ever larger debt crises every couple of years will eventually simply lead to the end of the road for the economy.
And living with one´s means is a method that may work for individuals, But obviously not if you take out a mortgage. But it does not work for states. See Italy and its lost 2 decades for example.
Only the poor or very lucky people have not have to borrow because they spend more than they had/earned
Austerity means to live even more sparely than your falling wages demand so that you can continue to pay the interest on the consumer loans that you were highly encouraged to take. It means to be a willing participant in the continuing transfer of wealth from the poorer to the richer. Some people might think it means to be a sucker.
Perhaps one should not take out loans he cannot afford to pay back, especially for goods of dubious value created cheaply in communist dictatorships.
The option to default always exists… of course, after that happens, you can’t borrow again for a long time. That’s anethma to Westerners who want to live in the lap of luxury, well beyond their means.
The “cure” of endless, limitless debt and bailouts ensures that, in the endgame, things will end up worse than ever before.
Sadly, those of us who live within our means are the ones expected to pay. And pay. And pay.
The day we decide it isn’t worth it is the day the merry go round stops. And stop, it surely will.
I thought it was Thatcher who sold all the silverware and party-ed. A state can’t get out of debt by austerity. It can only by getting the economy expanding again. Something even American politicians understand.
If borrowing and spending to “grow the economy” actually worked, Illinois and Michigan would be booming and have enormous surpluses.
Are Illinois & Michigan states that pay more into the federal government than they get in return?
US did it after 2008 and grew much better than austerity Europe
Nothing works if we don’t curb population growth drastically and reduce current numbers fast by 4/5th or so… (unde 1 billion)…
We got a good lesson. Oil demand and price is more elastic than we thought. So are most commodities.
Not really. Demand does not increase a lot with much lower oil prices. Oil is inelastic.
We are currently witnessing a public cytokine storm. The reaction to the virus is more severe and destructive than the virus itself. The lockdown of apparently healthy and younger individuals will kill them or weaken them at least economically. We should have only quarantined the sick, highly vulnerable or immuno compromised, and virus shedding individuals. Apparently our leaders aren’t that smart and couldn’t realize that people will react differently to the so-called killer virus. And now, get ready for the public misery.
This novel virus can infect anyone, without severe social distancing and quarantine, many more would have died. Social distancing flattened the curve, preventing health systems from becoming overwhelmed. Those countries that listened to their scientists, such as South Korea, China, New Zealand, Canada, ect…. have seen many fewer deaths, and will bounce back economically all the quicker. Disorganization and lack of leadership from the WH in the US is an object lesson to the rest of the world.
For more data, I suggest to read Li Lijuan of Zhejiang University, especially Patient-derived mutations impact pathogenicity of SARS-CoV-2
I hope I spelled her name correctly.
If I may summarize the gist. Her team found about 31 different mutations. Some of the ‘strains’ displayed 270 times the viral load suggesting a lot more pathogenicity.
They think Europe and New York got the more pathogenic ones.
Now my thoughts. If this good research university identified the mutations, we should be sending teams to China and work with them to make it easier to identify and test for the more pathogenic strains.
Then if we find the more deadly ones in our communities, we should act locally, quarantining the positive and contact tracing as much as possible.
We should be more science based rather than seeing governors run their states with edicts based on nothing but fear.
Take another look at the paper you cite. It is a lab study, suggestive but not conclusive, of potential pathogenicity factors. The mutation to a more highly psthogenic strain is NOT yet observed in patient populations. SeemJones, I., Expert Reaction to Preprint.
Were they able to isolate release version 1.0, or were these samples mutated in the theater?
Iamafan,
Just about everything that has come out of China concerning the virus was part of the disinformation campaign by the Chinese government. And it continues. Keep that in mind.
Talking about “edicts” by state governors in the US: go visit China.
I actually visited China. I have no conclusions except that I do not want to live there. I also visit other Asian countries.
At least there is a paper to read from there.
“You go to war with the army you have, not the army you might want or wish to have at a later time.”
― Donald Rumsfeld
Wolf,
the difficulty with using that blanket “just about everything” statement is that the government mixes more than enough truths with the lies to make it difficult to discern which is which. The opaqueness of the ruling class also makes it difficult to identify the nuggest of truths that are there.
I also tend to see that when words gets used without nuance, the whole suffers. More and more people are referencing the lies coming out of China, but the nuanced position is the lies coming out of Chinese government. When people say China, one could easily start to mix that idea up with Chinese people, which isn’t the same.
It is kind of like the media conflating the words immigrants with illegal immigrants, and gradually transitioning that over the course of the last 10 years to try to remove the latter from the lexicon.
Whether it is laziness or a deliberate choice, the end results are just the same, and like Imafan says, it has unleashed various types of negative public reaction because America isn’t that sufficiently stupid just yet, but it can be influenced heavily.
Are illegal immigrants not immigrants?
More kismet by far is the need by some to believe in the power of silly pieces of paper invented by long dead men.
It is amusing when you consider it. “I popped out of mom on this piece of land so you can’t work here unless you have a special magical piece of paper that says otherwise.”
Hilarious, the fictions people cling to when they need reassurance.
@ Canadian
They indeed are immigrants. Just as important is the distinction that they violated the said laws of the country by which they immigrated to. Remember, there are people who followed the law and waited for years to become a part of this country the legal way. Myself being one of them.
When people ignore the nuances, that’s where problems arise. Just as one would say someone who committed grand theft auto are criminals like mass murderers. In both cases, they are criminals, but it is the nuance that matters. By ignoring such nuances, misconceptions and poor decisions are perpetuated.
Yes, you may point out that it is a matter of degrees. Which I would agree, the only question is what are the limitations you set up. If there are laws that are not right, it’s within the rights of the people of these country to try to change it.
And if by fiction and ” special magical piece of paper,” you mean the laws, you might want to remember in a country like America, things like the bill of rights, and the constitutions are nothing more than a piece of paper, and when people ignore those “special magical piece of paper” and decide those can be caste aside at will; well, as Winston would say: “Rules. Without them, we’d live with the animals.”
@char
lies of omissions are lies nontheless.
I would agree that the US administration was incompetent in many different ways. Perhaps nothing would have changed if the whole truth was available in early January. But there is such a thing as original sin.
After all, what would one say to the people of Europe, or elsewhere, were they all incompetent too?
@mch
What omissions
@char
One example: they omitted the information regarding human transmission early on, they used WHO as a mouthpiece on that one.
They also omitted the magnitude of the problems early on in January.
Is it the same thing when there is a fire going on that threatens people, and you don’t tell them about it vs actively telling them there is no fire? It is a bit harsh, but you get the idea.
They said there was the spread of the disease within very close people but they did not have proof hat it spread to people who were not that close. Which was true, they did not have the proof. Which came later
Speeders “violate the law” as well. I don’t see people referring to speeders as “illegal drivers.”
Jaywalking is illegal. Why no outrage over “illegal pedestrians?”
Not paying state tax on goods you purchased out of state is illegal. Where is the rage about “illegal shoppers violating the law?”
Let’s be real. The term “illegal immigrant” is designed to create a scapegoat for domestic political consumption.
Re: Disorganization and lack of leadership from the WH in the US is an object lesson to the rest of the world.
I see it in State “DAILY” press conferences, too.
Not sure the world is expecting to learn a lesson. Just laugh.
Personally I blocked the State and the City from robo calling my cellphone. They have nothing to offer me.
I think he’s referring mainly to the lockdown as having done a lot of unnecessarily damage (a cytokine storm is a good analogy: immune overreaction that killed a lot of young and healthy people during the Spanish flu but wasn’t a major part of this pandemic until we caused it ourselves).
Anyway South Korea never went into lockdown and nearly has the virus contained, and I don’t think China ever fully closed down – though I suppose we can’t trust their numbers either. Sweden is another example: somewhat higher death rate but it may be the case that since a lockdown was intended to slow rather than stop the disease, they were simply front-loading the same number of deaths that would’ve happened anyway. I think the only numbers that really matter in a lockdown without a vaccine are the used proportion of hospital capacity (which is hard to find) and the excess deaths and suffering from the lockdown itself.
Also, a 1:1 comparison of virus deaths prevented by the lockdown itself (as a fraction of the total prevented by the larger social distancing strategy, assuming you could measure that) with deaths caused by the same is deceptive since it ignores the skew in ages – measuring it by healthy-life-years saved is much more accurate but isn’t really used. Measuring the same effect by total suffering can only be speculation but my guess is that when all is said and done, excess suffering caused by the virus will be no comparison to that caused by the response to it – but perhaps, hopefully, offset by some genuine reform in the economy and society.
South Korea DID go into lockdown in areas like Daegu.
They also have conducted far more tests than the United States. They are a technical and engineering culture; America abandoned that long ago except in certain regions of the country for churlish anti-intellectualism.
South Korea did do lockdown, but they were better prepared as they had test kits, masks and such stockpiles because in 2015 they had to deal with SARS, which we did not.
Wuhan did a full lock down. Other regions had a milder lockdown. Sweden does not call a lockdown a lockdown, does not mean it is not a lockdown.
You are correct but unfortunately no county is trying that (only quarantine the sick, highly vulnerable or immuno compromised) so we will never know if that is a superior approach. The rest is just speculation.
” … virus shedding individuals.”
These people have to be found by increased testing and contact tracing. We are moving in that direction but it is beyond us for now, until more time has passed during which we build the means.
Meanwhile, there are strong societal convictions that the means per se will introduce unacceptable loss of liberty.
I keep getting emails from my auto insurance that says they are giving a few bucks off the premiums in April and May (I haven’t seen the discount yet…).
Is this period a bonanza for the auto insurance companies? Of course! So many fewer miles driven means fewer claims, on the same rates charged. Who says no one is coming out ahead.
Brant Lee:
Re: insurance rebates:
Really miserable amounts. Out of my $1200 (really old age; clean driving record) annual premium I will receive approx. $47! The letter sent from them almost insinuates that I will receive “two months” premiums back but then slips into words of “percentages” of those two months….!
Read the information carefully!
I notice that a fair amount of comments prefer a new work at home mentality. How does that fit in with bringing manufacturing back to the US? As a small time manufacturer I would find it difficult to produce parts with the workers at home, and then OSHA, or EPA would make me insure their homes meet government requirements, which would force me to close. I’m already struggling with regulations, and taxes, manufacturing is not easy in today’s USofA.
Lots of jobs cannot be done from home. But lots of jobs CAN be done from home. A bartender or factory worker is not going to work from home. But a software engineer working with industrial robots can likely work from home at least part of the time.
A local Mennonite used to produce the best sausage I have ever tasted, which he sold in a local shop, until the gov’mint found out about it, introduced him to its regulations and put him out of business.
Maybe he let people see how the sausage was made?
RD and AB, mine did, and it was a lot of fun to go up when the ”hog killing time/weather” came each fall, and watch him and his daughters do the process.
As has been said of others, the old order folks used everything but the squeal, sold only on long lead time orders, but otherwise processed most of the hogs in the area either to sausage mild to very very picante, or just to the slaughter and butchering levels.
Reminded me very much of the busy fall seasons back on the farm when I was a kid, early 50s.
While it would seem better for everyone to do most of their own food raising and processing, it can be very hard work some of the time, and most folks today not only cannot do hard manual labor, but don’t have any clue how to do it.
Certainly indicates some kind of singularity approaching, especially if this tendency (not a clue how to grow food, etc.,) continues to accelerate generally.
In a sane world, one would think that what you are doing is a good thing: making locally produced goods that help the local economy. But in today’s corporate America and the hyper globalized world, you’re the fool for going through this hassle when you could be manufacturing in China for way less and with little to no regulation and just raking in the dough managing your distribution and sales here.
Just like I’m the fool for being a prudent saver and shunning indebtedness when all my peers are living the life with large homes. They still have very little equity in their homes since the minuscule inital downpayment despite having the cash to do so. They chose to invest the rest of the cash in the stock market to help pay the mortgage with the proceeds while driving around in their fancy Tesla’s and taking expensive European vacations.
Will C19 bring some sanity and reward the savers? I hope so but I’m not counting on it.
“Virtue is its Own Reward” Stoic Greek philosopher Epictetus, ca. 108 AD.
Deer & RD, well-said. Though the percentage of insanity and willful ignorance in a population be steady, the gross numbers of the insane and willfully ignorant in a world that has more than doubled its humanity in my lifetime (born 1952) could explain some of what we find at this point in the play…(…and now I’m REALLY going back outside-dang, Wolf, you always make it so hard to tear oneself away!).
May we all find that better day.
Gas here in Cayuga County NY is around 2.25, and has been stuck there for weeks.
From what I understand it’s the highest in the state.
County population around 78,000.
There are more cows than that.
I don’t think it’s taxes, as I have heard prices on Long Island are lower, same state, much higher overhead.
Virtually every gas station has a convenience store, which the way I understand it is where the profits are.
I wonder if gas prices are being held higher to make up something from lost store sales.
Gasoline here locally was $1.58 as of yesterday.
Well, My auto insurance co. appear to be just a bunch of bloated corporate FARMERS, hogging all that ‘grain’ we call premiums, feeding it to their top management & shareholder pigs, I suppose .. without dispatching any mercy by giving us autoshare-croppers a break Fast!
This is why you are hoping (scientifically) against hope – “https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7151357/”
The Journal of Infection
Herd immunity – estimating the level required to halt the COVID-19 epidemics in affected countries
Exploring these parameters and their implications further, the difference between R0 and Rt is related to the proportion of individuals that are already immune (either by vaccination or natural infection) to that pathogen in that population. So another way of calculating Rt for a pathogen in a given population is by multiplying R0 by the proportion of that population that is non-immune (i.e. susceptible) to that pathogen. Hence, R0 will only equal Rt when there are no immune individuals in the population (i.e. when all are susceptible). This means that any partial, pre-existing immunity to the infecting agent can reduce the number of expected secondary cases arising.
Although SARS-CoV-2 is a new coronavirus, one source of possible partial immunity to is some possible antibody cross-reactivity and partial immunity from previous infections with the common seasonal coronaviruses (OC43, 229E, NL63, HKU1) that have been circulating in human populations for decades, as was noted for SARS-CoV. This could also be the case for SARS-CoV-2 and might explain why some individuals (perhaps those who have recently recovered from a seasonal coronavirus infection) have milder or asymptomatic infections.
Finally, returning to the concept of enhancing herd immunity to control the COVID-19 epidemic, given that the case fatality rate (CFR) of COVID-19 can be anything between 0.25–3.0% of a country’s population, the estimated number of people who could potentially die from COVID-19, whilst the population reaches the Pcrit herd immunity level, may be difficult to accept.
ERGO: unless we get some immunity out there (from getting infected or by a vaccine), there will be blood. Hard to get used to it.
My brother an immunologist has postulated that previous infections by aCoronavirus May offer a partial or muted immunity
Most colds are rhinovirus but some are Coronavirus no way to tell though which colds we catch are which
I wonder what the correlation is between people who complain about gas prices and people who vote for governments that block refining and transport repair and expansion in favor of that illusive “green energy”. I’ll bet it’s pretty high. Kind of like Joker in Full Metal Jacket, wearing the peace sign and “born to kill” at the same time, he claimed “for the yin and the yang of it”.
Governments don’t block new refineries, the market does. Demand for gasoline is about the same as it was in the 70’s but refineries in the 70’s were build for a growing market and technical progress has made that they can produce much more gas so there is no need for more refineries.
Greta needs to go where the action truly is. China will welcome her with open arms and adoration. Lol Lol LolLol……
The greenies are not doing so well because the economics are not on their side. I read that Stamford, CT. was earning 96k/yr on plastic recycling, but now have so much of it and not enough buyers that they have to pay 700k/yr to dispose of it.
The economics are on the side of environmentally responsible people over the long term.
The issue is that modern people have so little moral fiber, that they’re okay with dumping the plastic in the ocean or in a landfill and letting future generations fret about it.
The same thinking in earlier generations led to the EPA superfine, and cleanup of sites ongoing that were polluted by corporations that ceased to exist before I was born.
How is it that so many people are unaware that we live in a physical world? It shows that something is drastically wrong with our society.
The economy is something we made up. It is a socially agreed on mental construct. The laws of physics hold whether we agree with them or not. Not to know that is insane. It is astonishing.
Spot on Paul Easton. And that astonishing lack of comprehension will lead to a horrific amount of unnecessary human suffering. Many people will be quite surprised that the suffering includes them. Greed is a hell of a drug.
Interesting theories circling around Elon Musk’s tweeting down the share price. “Is this why Elon Musk is talking down his stock price?” There’s a nice investigative piece for you Wolf. I wouldn’t be surprised if you’re already working on one. It may have started with a great idea but his behavior now is that of a scam artist, manipulating share price to meet valuation targets and unlock increasingly lucrative compensation packages. Not to mention the obviously shady accounting and reporting which you’ve reported on nicely and is now dawning upon the converts too.
DeerInHeadlights,
I’m sick of writing about Musk’s shenanigans. It’s always the same thing. Maybe once a year. If he extracts the maximum amount of dollars from investors year after year with his shenanigans to keep Tesla’s cash-burn machine fueled up, fine with me. I have no problem with investors subsidizing every one of his cars. I just personally don’t want to subsidize his cars, neither as investor nor as taxpayer.
The amount of cash Tesla gets from selling its “regulatory credits” is astounding, and if I were CEO of a big company that can use them, I would rather swallow the tax bill lock, stock, and barrel, than buy those pollution credits from Tesla. If every CEO thought so, it would work. Let Musk eat those credits for breakfast. If there is zero demand for them, there would be no price, and Tesla couldn’t sell them, and wouldn’t get all that cash that way.
The reason why Tesla sells them is because it loses money every year and doesn’t pay income taxes and therefore cannot use the tax credits.
Its a run-around state subsidies for alternative fuel cars. The state can now claim it doesn’t subsidies. Every CEO should understand that. If a CEO tried it the next year he would be paying the tax bill and the credits.
Lol, fair enough. I’m sure the antics are all too familiar for you and those experienced in the business world. As a layman, I seek informed, seasoned and experienced perspectives to make sound investment decisions so I appreciate everything you do here.
With just a minimal “Religious Implication ” ; maybe Tesla could apply for a 501 c3 business license . No Taxes . That would help his revenue comedy act even more .
Check on Twitter of “Montana Skeptic” this past week and interview on Quoth The Raven podcast regarding Tesla’s financial shenanigans, bare on D & O insurance, China and Musk motives for tweeting down share price. (May be spelled montaneer”
Here is a fundamental issue that is not discussed and that is with the refining of fuels. Today the accumulation of gasoline and also jet fuel is enormous. The explanation is simple, the demand for diesel is greater than that of gasoline because it is less elastic than the last. Supplies continue to be moved by trucks and other freight vehicles that use diesel, gasoline powered cars move much less, apparently this will last for quite some time. When it is refined the different products are obtained, what will be done with gasoline or jet fuel … Burn them? is another big problem when complex structures start to destabilize
Carlos Leiro,
“The explanation is simple, the demand for diesel is greater than that of gasoline…”
Please read the article and look at the charts, which give the quantity of demand in barrels per day for gasoline and for distillate (diesel and fuel oil). And then compare the two and see for which there is more demand.
Well, OK, so I give you the answer: before the crisis, gasoline demand was over 9 million barrels per day, and distillate demand (diesel and fuel oil) was less than half that (4 million barrels per day for diesel and fuel oil, and a lot less for just diesel).
I see BP (British Petroleum) is giving free jet fuel to FED EX, for their support in delivering supplies in the fight against Covid19. Through their pipelines from Whiting, IN to Chicago’s Ohare Field, and from their refinery in Cherry Point WA.
They are also giving a 50 cent per gallon discount to first responders and essential health workers.
At least, a nice tax write-off, in a time of need.
Probably donating a little something to Lake Michigan past 100+ years, too.
No, please I have read the article, I apologize but English is not my language, possibly your reference escaped me, I do not doubt your data.
What I’m saying is that if I rely on Art Berman he says that consumption is more variable in gasoline than diesel, which is less elastic. I can be wrong.
I leave you a link from a interview of Art Berman, I think he is one of the people who knows the most about US oil and other energies
The Death Of U.S. Oil
By Arthur Berman – Apr 28, 2020, Oilprice.com/
Best regards
Yes, this — “consumption is more variable in gasoline than diesel, which is less elastic” — is true to some extent, but Art is talking about price elasticity, meaning that when the price of gasoline goes down, the volume sold goes up because consumers drive more and buy bigger gas guzzlers. But it’s fairly small.
What we have here today has nothing to do with price elasticity. Demand collapsed for other reasons, as supply surged and stocks are high, and the price of gasoline collapsed. You see, normally, collapsing gasoline prices would mean increased gasoline consumption (price elasticity). But we got the opposite — because people are stuck at home.
I have posted some of Art Berman’s articles on my site in the past.
I always follow his website because he seems like a reference person and gives information with good data and sources. and I appreciate this
gas around 1.75 in Atlanta. Don’t believe what you hear about Georgia. People are scared and some are making more from unemployment than they did from working. Banks still closed. Tried to get a hair cut on Friday . Still closed. Favorite Mexican restaurant still only take out.
Although it’s the weekend it’s now another weekday?
Fascinating to see NYC’s highway in the sky with no trafic just the occasional 1 random plane.
Depressing to see the closed store fronts and think of the impact behind those doors socially and economically.
Used cars have problems. Guess what new ones do too.
I drive new fancy smanshy car, my line of work perception is reality and clients want to see you as a winner, although I could be broke. After this will buy used car keep it low key not good look when people are suffering.
New renewable energy does not exist if it does the giants wont allow it.
Wind malls, solar dont last all require fossil fuels to create defeats the purpose. Electric car needs raw earth material battery charged via fossil fuels. Planet will survive man kind on the other hand??
Greta – research her parents. Yes why she no bother China? Why china biggest polluter gets free pass?
Trump pulled out Paris accord China not included. India not included another free pass?
Carbon tax? Burn fuel plant tree?
Al gore shift jobs to China pollute rivers but save planet right after I make few hundred million??
Planet happy birds happy even racoons confused they come out earlier in the evening now. Goats walking the streets of Europe animals are having a party (for now).
Are the seals having party at fisherman warf?
Glad I visited the world. Still so many places to visit. Maybe I can walk across the planet and kayak when walking not permitted.
Working from home with kids not cool. Like an artist I need my studio to create.
Being with my family all day – powerful, positive impact building children big tool box preparing them for the wild when daddy mommy not here this or worst will come and they will be prepared. Like Great depression parents taught children be prepared spoiled generations followed but the ones who listened headed the messages from the great elders.
Gone are the days of the tribes all replaced for consumerism and every other “ism”
Never seen pessimistic people so optimistic.
Very interesting perspective.
Get ready economy opening back up? Excellent cheerleading sqaud. Unfortunately the game is rigged and winners and losers already been chosen.
Check out my new pop song:
Print print print, bail out bail out bail out, default default default.
Many people will struggle to survive.
We need common sense empathy and cognitive dissonance, and to work together and support local economy even if price higher in the long run money saved today will cost more when less to choose from. If you have all 3 then not only will you survive today you will thrive!
Good luck stay well stay focused stay healthy!
Yes, we need common sense empathy but why ‘cognitive dissonance’!??
(which is the state of having inconsistent thoughts, beliefs, or attitudes, especially as relating to behavioral decisions and attitude change}
Required to follow main stream media outlets :)
@ Mr wake up
Required to follow main stream media outlets :)
I DON”T !
Those having that ‘ cognitive dissonance’ are the Fed, Stock mkts and the Wall ST, disconnected with reality on the ground!
You:
We need common sense empathy and cognitive dissonance, and to work together and support local economy..’
makes no sense. Sorry!
Sunny 129 thank you
Exactly my point.
Empathy requires the ability to see from another’s perspective, another ones shoes, regardless you agree with them or not, regardless you except the message even if its BS. So expand on that with CD and you can bring together both sides.
The key is seeing what’s the message being delivered they are receiving and how they perceive the message how does it translate in daily life, in their belief system and how will that effect their decision making.
This is the major challenge we face as a society. Everyone picks a team, most people just like to stick to their side and turn off the receptors and that’s fine.
But not to my initial point and common sense ain’t so common.
mr wakeup is this what they call Joycean? I think it must be some kind of avant guard lit, because it so confuses me. I couldn’t follow ulysses and I can’t follow this.
Support your local economy. That part makes sense. In Hartford CT where I live the economy consists mostly of mammoth Insurance Companies, which depend on national support. Apart from them the local economy mainly consists of drug distribution. I guess I do my part in that department.
I’m not surprised. The government can make pronouncements about whether it is safe or not, but private actors don’t have to acknowledge them — and most won’t, especially if they’re based on politics rather than science as the Georgia governor’s decree was.
My driving cut about 95%+. Filled up after one month at about $2.39 gal. spending less than 7 bucks. Paid up 6 months ins. premium in full just before Covid arrived. Company will give some rebate around 25%. Yes there is some base cost to covering vehicles parked and rarely used…but come on..75%?? State mandates we buy insurance from private companies certified by the government. State then says you cannot go anywhere unless absolutely necessary. (Maybe they have also killed your income in full or part.) State does not go mandate a return of major portion of premiums. If these guys were the Italian mobsters they would be subject to state prosecution for conspiracy to commit a fraud. So why aren’t we hauling these people out into the streets for a public drubbing already? We did our part staying home to save their companies and their pensions in addition to the population. What are they doing for us?
Insurers still have to pay for infrastructure and support, regardless of whether you are driving or not.
Some insurance companies are giving refunds or discounts on premiums due to the much lower driving. Maybe yours does too. Check it out.
I received 15% rebate from my auto insurance in the mail today. Not huge but I’ll take it!
I will get $9/month for 2 months. Kind of neat. But mostly kind of laughable. The good thing is that my premiums are pretty low in Kornfield Kounty.
But I agree with poster above—if gvt mandates stay-at-home, refund should be much larger. Paid by ins or gvt.
If I got the $3400/family gimme, I guess it’d be covered…
(I didn’t)
Definitely worth calling the insurance companies about it. GEICO for example is offering 15% credit on the next bill, but if your driving is cut by 95%, it might be very well worth the effort to just call them and see if you can get a refund above whatever they are offering.
When the price drops low enough, (E&P fracking caused excess due to a frothy corporate bond market, during which time US became an oil exporting nation – unthinkable twenty years ago) PROPPED UP BY THE FED, after the Covid slowdown, preventing demand and supply from reaching equilibrium. The price drops, then there is no supply. Speculators buy excess, (there is another 30% of storage at Cushing, where did it go?) Oil is held off the market while suppliers wait for prices to rise. Covid simply moved supply disruptions ahead on the calendar, crash in oil prices was already happening, promoting even greater monetary reaction, ensuring that oversupply dynamics will return before any meaningful recovery in the economy. Gold will drop below $1000 and there will be none, (half way there) and stock futures will price in the lack of demand (storage) and the stock market will go negative.
In theory this should cause Elon Musk to p*** himself silly, in practice though not so much. No doubt he was trying to jawbone the stock price LOWER yesterday because he needs a capital raise soon.
Makes sense
Got gas for $1.49 at Walmart this morning.
Can’t remember the last time it was under $1.50.
1) Warren Buffett didn’t fly. He took a $50B hit in the first quartet.
2) Young people survive covid19, but their retirement account was infected by a financial pandemic. Since Oct 2018 SPX : TLT is trending down, but from Jan 2020 it became a vortex.
3) Shiller CAPE peaked in 2000 @ 45, turn lower in 2009 and up
to 33 in 2018. In the next 10Y, Shiller PE will plunge below 2009(L)
at 13. The Shiller Cape average is PE = 17.
4) The young, with a mix of 70% stocks // 30% bonds will a second chance to save for retirement after 2030, but they will be well in their middle age.
5) WTI don’t need Shiller CAPE to predict its LT troubles.
6) After osc wildly for 12 years, WTI is a broken machine that no mechanic
can fix it.
7) The energy sector had a bull run since Mar 23 2020 low. WTI jumped
from 6.5 to 20 within a week ( 8 TD).
8) Western Canadian Select jumped even higher.
9) There is no demand for oil, but there is demand for Canadian oil.
10) WCS- WTIC Futures reached a new all time high last Fri.
11) NDX outclass every other index, but NDX, but had a Golden
Cross on Apr 29.
Why the majority at Wall St including Mr. W.Buffett/Berkshire Hathaway took the hit? Big story at WSJ!
The loss is unavoidable, unless one’s portfolio has UNCORRELATED assets & not just diversified. The concept of ‘un-correlation’ relates to the extent/percentage of correlation with S&P 500, which being 0 and the correlation from +PLUS 1 all the way to -Minus 1 = R factor
This was obvious during GFC but went unappreciated by many financial advisers and money managers! This includes ‘going against the market’ anathema to many investors and the bulk of money managers at wall st, who ‘feel safe’ with the crowd/mainstream thinking! Exceptions are some of the hedge/private equity, willing to be contrarian, which can be heroic or suicidal!
Point is that just diversification won’t protect one’s portfolio in a SECULAR bear mkt, coming after record expansion of the Economy and record debt as it’s foundation!
Buffetts-Hathaway belongs to mainstream who have been right and extremely successful (just like most Wall ST crowd) all the way from March of ’09, riding with Fed’s put, until Feb 19th. The most surreal mkt of my life time!
Then the Corona came and uncovered the ROT beneath our financial and global banking system, masked by insane credit creation by Fed. Now they ALL have to face the reality, ultimately
Why the surprise?
(Been in the mkt since ’82)
American Magic will prevail, per Buffet at his shareholders mtg:
“But we faced tougher problems, and the American miracles, American magic has always prevailed and it will do so again.”
“We are now a better country, as well as an incredibly more wealthy country, than we were in 1789…”
American Magic, is that code for the Fed?
Haven’t you heard the saying. “In a crisis, all correlations go to 1”. Cash is probably the only exception to the rule.
Also, Buffet keeps talking about the greatness of America, so why did he dump all those stocks? I mean he’s the King of Buy And Hold no?
That means more pain is coming.
Buffet has always had a soft spot for companies that are likely to engage in large scale buybacks. That’s a big part of the reason Berkshire-Hathaway has always shunned Tesla despite the crazy valuations: the car manufacturer is likely to keep on issuing new stock to raise capital, not buying back existing ones.
Emirates and Qatar Airways have already announced that with or without a vaccine both company will see pre-Covid-19 numbers in 2023. And mind both companies have already started to bounce back after hitting rock bottom and being effectively arms of the respective governments they are already in the post-emergency phase. When the recovery phase will come both companies will be ready before everybody else: their governments are sparing no expense and are personally negotiating with other governments when there’s no legislative clarity.
The Chinese domestic market, the second largest in the world, is already in recovery phase, albeit it will take quite some time to get back to pre-epidemic numbers. Many people are understandably still afraid of traveling and several airlines still have a large chunk of their pilots stuck abroad in their countries of origin.
Other countries have already started cautious moves to restart their domestic markets but we are still in the very first steps and most of the “heavy lifting”, such as deciding safety measures aboard has been left to airlines to decide.
This is a luxury most airlines in the world do not possess. They have been basically left on their own in complete legislative chaos, whether on domestic or international markets.
This is the worst kind of uncertainty, and uncertainty is perhaps the worst foe of share buybacks.
No share buybacks for years to come means Buffett has lost any remaining interest in those stocks and decided to dump them at a loss, perhaps to get tax credits as well.
Buffett is a financier: he has no interest in “recovery” unless that recovery brings a ton of profits, and this one will be long and hard business.
Wolfe:
You are discovering too many “vertical” straight lines”!
Speaking of fuel, and the things that use them. Just saw Buffet’s fun little live stream where he indicated that he sold his airline stakes, to the tune of $2B to $3B in losses based on BRK’s last 13F filing.
This is not going to exactly inspire confidence. I wonder if there is an estimation of exactly how much barrels of oil that is going to take off the market. Buffet’s point (I think) was that things have changed fundamentally, and he is walking away before he eats bigger losses.
Lol, fair enough. I’m sure the antics are all too familiar for you and those experienced in the business world. As a layman, I seek informed, seasoned and experienced perspectives to make sound investment decisions so I appreciate everything you do here.
Hmm, not sure how my reply to Wolf ended here. But since I’m here, I will say MC01 that Buffet definitely went BTFD in March on the airlines. Look what a few weeks can do. Just reinforces the fact that what has worked in the past isn’t going to work in the future. BTFD makes sense in a fed-induced larger uptrend but what happens when the fed itself stops the music or is forced to…
I can’t imagine the fed being forced to do anything unless interest rates start going up. Meanwhile the fed will continue playing as the stern slips beneath the waves.
Time to raise gasoline taxes while the price is low
and use the funds to lower the taxes on employment.
That would be way too logical. forgetaboutit.
Don’t worry, CA is on it. Have no fear.
International Travel Off the Table for Six Months: Coronavirus Q&A
International travel will be off the table for at least six months. I think travelers will be quarantined for two weeks here in Australia. We really need more information before we can know when to lift restrictions. I suspect we will find travel insurance won’t cover people. I can’t imagine international travel as a tourist is going to be on the horizon in under six months.
https://www.bloomberg.com/news/articles/2020-04-08/coronavirus-q-a-expert-says-no-international-travel-for-6-months
I can confirm that travel insurance will not cover as I have a high level of coverage and was informed two months ago that I would not be covered.
So guess what…. even if the flights were to slowly return… and Covid was still present globally …. lots and lots of people (those who are not yet bankrupt)…. will not get on planes and risk a) getting Covid (because they have been scared out of their minds) and b) risk getting Covid and ending on a respirator for a month (highly unlikely) and then getting saddled with the bill.
People with money who will be in a position to travel are less likely to travel because wealthy people tend to be more fearful of dying — because many of them believe their lives are more important than others who are not so fortunate.
That said – have you ever noticed how most people avoid any destination that has even the slightest whiff of uncertainty … I have met people who will not travel to Asia ‘because it’s dirty and disease infested – and dangerous’
I reckon those people won’t be getting on international flights anywhere while Covid persists. The slightest cough for sniffle from anyone near them will send them fleeing into their lockdown bunkers for a long… long… long time.
Very true, wealthy people are usually extremely timid, as through money they think they are getting control.
Therefore, Death scares them, being wholly beyond control.
The link between great wealth and hypochondria has often been noted, and I have seen it myself (to my great amusement!)
The Great Collector comes for us all, always wins, and this terrifies those who see themselves as collectors and winners…..
It’s not just a matter of coverage. It’s also a matter of logistics. Say you are covered, but in the destination, there’s no space to fit you in. You can have the greatest coverage but if there’s no space, then there’s no space.
Insurance is like correlation i.e. when you REALLY need it, it might not be there for you.
Ultimately the profit incentive is to collect max premiums and pay minimal claims.
Disaster traveling is a thing I agree in! In a few months when things start opening again, travel pretty much anywhere in the world will be dirt cheap, including accommodations, food…..entertainment. Everything will be discounted.
Maybe, maybe not, Nicko2, sometimes only expensive options survive, and if another infection wave comes and a traveller gets stuck, it might be very expensive indeed. Always consider the law of unexpected consequences.
I went to Cairo during the riots and got a suite in a 5 star hotel (if I recall Sofitel) for 140 bucks a night. That’s probably pushing a 1000 a night normally.
Almost zero tourists everywhere including the Valley of the Kings…
Check out deals on my site http://www.strifetravel.com
1) NDX death cross on Apr 29 : dma50 crossed from above dma200, its inverted, below dma200.
2) XLK joint the crowd on Apr 28.
3) Thus, SPX, NYA, NDX, SSEC, DAX, the CAC … might be euthanized in the
next 10 years.
Next 10 years? What about September-January? Where most of my puts are..
In 03 I started the “Free Gasoline for Everybody” party. At that time the cost of the war in Iraq was projected to be about 6 trillion in total. The Free Gas party would give away 6T worth of gasoline and energy subsidies (and cancel the war). The beneficial amounts of additional consumer spending would have been significant, and might have prevented the mortgage meltdown. Be much easier to do now.
Yeah but how would you pay for it? /s
1) Fred : US civilian labor force : 163M. The jobless claims jumped to 18M.
2) 145M workers are still working, during a severe recession.
3) Our front lines moved from Vietnam & Iraq to Philadelphia and NYC.
4) The gutsy front line employees, who defend our major cities, are mostly females, low wage earners, blacks and Latinos, under killing fire. They are the ones who take risk. They die in large quantity to protect us.
5) Since the Monroe doctrine was pricked we became complacent and meek. From Alfred Mahan navy power, to our own current mayhem.
6) Us navy still rule the waves, it can enforce blockades.
7) Xi infiltrated our own domains. Our friends : Canada, Argentina, Brazil, Australia, NZ and Ukraine can inflict China a lot of pain and punishment.
8) If a killing fire move from left to right the general in charge should know where the invasion will start and that what happened in the last 7 weeks
9) When Barbarossa started Kim got drunk for x3 weeks.
10) The communist elite who laughed and criticized Kim will face NK trials.
11) There is no penalty to US politicians and media for lying to the American people.
I doubt that Argentina considers the US their friends
Their citizens do….Politicians….not so much
Some undoubtedly will. But is that a majority?