My hats of to those of you that "shorted" PM's & Oil a month ago

OPA · August 22, 2014 2:04AM

I believe the US is becoming quicker, self reliant in Oil, than previously predicted.

derryb · August 22, 2014 2:10AM

I suspect the reduction in consumer spending, and ultimately in money velocity and product production, is greatly responsible for the reduction in oil consumption. A robust economy requires greater oil consumption to get raw materials to producers, to produce consumer goods and to get final products and buyers to retail points of purchase. Current reduction in oil dependency is really a sign of a very bad economy, not an improved energy conservation movement.

When Washington finally realizes that its tax revenues would be greatly increased by increasing money velocity (how often a dollar changes hands) it will find the correct fix to a weak economy. Keep in mind that every time a dollar changes hands it results income tax growth. At a 20% income tax rate a dollar need only change hands five times to create one dollar in taxes.

guitarwes · August 22, 2014 2:36AM

I knew it would happen. Still kicking myself for not buying Ford at $2 and GE at $4 in 2009. Had the money, felt the gut feeling, but did not have the cajones.

OPA · August 22, 2014 2:51AM

<< I suspect the reduction in consumer spending, and ultimately in money velocity and product production, is greatly responsible for the reduction in oil consumption. A robust economy requires greater oil consumption to get raw materials to producers, to produce consumer goods and to get final products and buyers to retail points of purchase. Current reduction in oil dependency is really a sign of a very bad economy, not an improved energy conservation movement.

When Washington finally realizes that its tax revenues would be greatly increased by increasing money velocity (how often a dollar changes hands) it will find the correct fix to a weak economy. Keep in mind that every time a dollar changes hands it results income tax growth. At a 20% income tax rate a dollar need only change hands five times to create one dollar in taxes. >>

Really?
Since early 2011, U.S. oil production has jumped nearly 50 percent, from 5.4 million barrels per day to the current daily production rate of 8.1 million barrels.

That’s an increase of 2.7 million barrels produced in the United States every day. The U.S. Energy Information Administration predicts that production in the United States will reach 9.3 million barrels per day by the end of 2015. That would represent about a 70 percent increase from early 2011. U.S. crude oil production for 2013 reached its highest levels since 1989. Crude imports are now 30 percent below their June 2005 peak levels.

Justacommeman · August 22, 2014 2:56AM

<< 

<< I suspect the reduction in consumer spending, and ultimately in money velocity and product production, is greatly responsible for the reduction in oil consumption. A robust economy requires greater oil consumption to get raw materials to producers, to produce consumer goods and to get final products and buyers to retail points of purchase. Current reduction in oil dependency is really a sign of a very bad economy, not an improved energy conservation movement.

When Washington finally realizes that its tax revenues would be greatly increased by increasing money velocity (how often a dollar changes hands) it will find the correct fix to a weak economy. Keep in mind that every time a dollar changes hands it results income tax growth. At a 20% income tax rate a dollar need only change hands five times to create one dollar in taxes. >>

Really?
Since early 2011, U.S. oil production has jumped nearly 50 percent, from 5.4 million barrels per day to the current daily production rate of 8.1 million barrels.

That’s an increase of 2.7 million barrels produced in the United States every day. The U.S. Energy Information Administration predicts that production in the United States will reach 9.3 million barrels per day by the end of 2015. That would represent about a 70 percent increase from early 2011. U.S. crude oil production for 2013 reached its highest levels since 1989. Crude imports are now 30 percent below their June 2005 peak levels. >>

Bottom line we are importing less. This is good. There has to be a "silver" lining there somewhere.

MJ

OPA · August 22, 2014 2:57AM

<< I knew it would happen. Still kicking myself for not buying Ford at $2 and GE at $4 in 2009. Had the money, felt the gut feeling, but did not have the cajones. >>

I did, but I kick myself for selling them off to soon. Kept CLCT though ( average purchase price was around$3) Yes, 2009 was a once in a life time year for stock pickers.

ebaytrader · August 22, 2014 2:58AM

<< 

<< I suspect the reduction in consumer spending, and ultimately in money velocity and product production, is greatly responsible for the reduction in oil consumption. A robust economy requires greater oil consumption to get raw materials to producers, to produce consumer goods and to get final products and buyers to retail points of purchase. Current reduction in oil dependency is really a sign of a very bad economy, not an improved energy conservation movement.

When Washington finally realizes that its tax revenues would be greatly increased by increasing money velocity (how often a dollar changes hands) it will find the correct fix to a weak economy. Keep in mind that every time a dollar changes hands it results income tax growth. At a 20% income tax rate a dollar need only change hands five times to create one dollar in taxes. >>

Really?
Since early 2011, U.S. oil production has jumped nearly 50 percent, from 5.4 million barrels per day to the current daily production rate of 8.1 million barrels.

That’s an increase of 2.7 million barrels produced in the United States every day. The U.S. Energy Information Administration predicts that production in the United States will reach 9.3 million barrels per day by the end of 2015. That would represent about a 70 percent increase from early 2011. U.S. crude oil production for 2013 reached its highest levels since 1989. Crude imports are now 30 percent below their June 2005 peak levels. >>

His comment was on Consumption, and not production. US Consumption is down.

rawteam1 · August 22, 2014 3:03AM

Big deal consumption is down, that's because all the foreclosed homes where people were commuting hundreds of miles a day are back now where they started, renting closer to work...

bronco2078 · August 22, 2014 3:07AM

Sure we are producing oil and exporting it . Demand for oil here is dropping. Our oil producers could sell domestic oil to us right here and lower imports even more. Or better yet import more and keep whats in the ground right where it is for use after we have drained the Middle East . Instead they choose door number 3 , maximize profits in the moment , and leave nothing for the grandkids .

OPA · August 22, 2014 3:09AM

<< 

<< 

<< I suspect the reduction in consumer spending, and ultimately in money velocity and product production, is greatly responsible for the reduction in oil consumption. A robust economy requires greater oil consumption to get raw materials to producers, to produce consumer goods and to get final products and buyers to retail points of purchase. Current reduction in oil dependency is really a sign of a very bad economy, not an improved energy conservation movement.

When Washington finally realizes that its tax revenues would be greatly increased by increasing money velocity (how often a dollar changes hands) it will find the correct fix to a weak economy. Keep in mind that every time a dollar changes hands it results income tax growth. At a 20% income tax rate a dollar need only change hands five times to create one dollar in taxes. >>

Really?
Since early 2011, U.S. oil production has jumped nearly 50 percent, from 5.4 million barrels per day to the current daily production rate of 8.1 million barrels.

That’s an increase of 2.7 million barrels produced in the United States every day. The U.S. Energy Information Administration predicts that production in the United States will reach 9.3 million barrels per day by the end of 2015. That would represent about a 70 percent increase from early 2011. U.S. crude oil production for 2013 reached its highest levels since 1989. Crude imports are now 30 percent below their June 2005 peak levels. >>

His comment was on Consumption, and not production. US Consumption is down. >>

FYI...US Oil consumption has been down since 2007......we must be in a depression

derryb · August 22, 2014 3:12AM

<< FYI...US Oil consumption has been down since 2007......we must be in a depression

>>

depressed consumer debt. . . at least someone learned something.

VanHalen · August 22, 2014 3:14AM

<< 
FYI...US Oil consumption has been down since 2007......we must be in a depression

>>

There's no depression in D.C. or on Wall Street. It's the 75% we use to call Middle America that's in a depression

cohodk · August 22, 2014 3:37AM

Yup. Reduced consumption. Don't you notice all the empty highways? And last winter was so warm that no one used heating oil.

Lol

Oil is still 8x higher than 15 years ago. Maybe oil is still overpriced.

BAJJERFAN · August 22, 2014 3:55AM

<< Sure we are producing oil and exporting it . Demand for oil here is dropping. Our oil producers could sell domestic oil to us right here and lower imports even more. Or better yet import more and keep whats in the ground right where it is for use after we have drained the Middle East . Instead they choose door number 3 , maximize profits in the moment , and leave nothing for the grandkids . >>

Fracking greedy oil dorks.

OPA · August 22, 2014 4:26AM

<< 

<< FYI...US Oil consumption has been down since 2007......we must be in a depression

>>

depressed consumer debt. . . at least someone learned something. >>

% of Consumer debt is less than what it was 34 years ago.

Household Debt Service and Financial Obligations Ratios

cohodk · August 23, 2014 8:39AM

Blech...

gsa1fan · August 23, 2014 10:02AM

Blech~ what that chart mean?

VanHalen · August 23, 2014 11:41AM

<< Blech~ what that chart mean? >>

We've struck oil and $75/barrel is possible in 2015.

While that would likely mean lower PM prices it would bring many other things down to size as well. Perhaps $75 oil would be good for the long term.

ebaytrader · August 24, 2014 9:11PM

<< 

FYI...US Oil consumption has been down since 2007......we must be in a depression

>>

Correct. We are in a structural economic depression.

renman95 · August 25, 2014 12:25AM

<< 

<< I knew it would happen. Still kicking myself for not buying Ford at $2 and GE at $4 in 2009. Had the money, felt the gut feeling, but did not have the cajones. >>

I did, but I kick myself for selling them off to soon. Kept CLCT though ( average purchase price was around$3) Yes, 2009 was a once in a life time year for stock pickers. >>

It may happen again. We're all living longer.

MGLICKER · August 25, 2014 12:26AM

<< I believe the US is becoming quicker, self reliant in Oil, than previously predicted. >>

Certainly much higher production. Self reliant is still a long way off.

derryb · August 25, 2014 1:56AM

a poor economy and not self reliance is responsible for the drop in oil prices.

cohodk · August 25, 2014 2:18AM

The economy is not poor and oil is still too high.

derryb · August 25, 2014 2:19AM

<< The economy is not poor and oil is still too high. >>

Then why the continued ZIRP?

Baley · August 25, 2014 3:52AM

I wonder how Recycling has affected the consumption rate of petroleum, it's got to be a lot cheaper to melt old plastic bottles and other packaging into new ones than start from crude oil.

Has recycling of plastics reduced the demand for raw petroleum products? What direction does the trend go?

Come to think of it, same thing with PMs, the smelters and re-casters have an easier job of it than the miners, don't they?

hmm

VanHalen · August 25, 2014 5:48AM

<< I wonder how Recycling has affected the consumption rate of petroleum, it's got to be a lot cheaper to melt old plastic bottles and other packaging into new ones than start from crude oil.

Has recycling of plastics reduced the demand for raw petroleum products? What direction does the trend go?

Come to think of it, same thing with PMs, the smelters and re-casters have an easier job of it than the miners, don't they?

hmm >>

Recycling is food for thought. It's huge in my state partly because of the bounty on returned cans/bottles.

More food for thought: Gov't Spending + Financial Services = 2/3 of the entire U.S. economy.

Total (local, state, federal) spending in 2014 >$7 trillion. Financial Services now approaches $4 trillion/year, so $11T/$17T = 2/3 in round numbers.

There's still a massive $6 trillion elsewhere and healthcare is half of that. Not saying this is good, bad, or, indifferent. Just that it is.

roadrunner · August 25, 2014 7:38AM

<< Yup. Reduced consumption. Don't you notice all the empty highways? And last winter was so warm that no one used heating oil.

Lol

Oil is still 8x higher than 15 years ago. Maybe oil is still overpriced. >>

There are certain portions of oil demand that don't change so much. Getting to work and heating your homes are examples of two of those. The shale oil "dream" is helping to boost production. But, even the oil companies look at that as a temporary fix. Shale oil wells burn out quick and are costly to replace. The shale oil boom might just end up being another 1960's peak. The oil companies have invested hundreds of billions of dollars the past 6 years to get this record production "growth." But, if they aren't getting a good ROI and making profits how can it continue? The highways will continue to be full as long as the auto companies are giving out cheap loans to anyone with a pulse.

Before getting too excited by the "record" 6 year production increase in oil - a reminder that production peaked at much higher levels in 1970

Shale boom - then bust?

cohodk · August 25, 2014 10:37AM

<< 

<< The economy is not poor and oil is still too high. >>

Then why the continued ZIRP? >>

Because Europe, Japan, China, Canada, Australia would fall into a deep depression.

cohodk · August 25, 2014 10:39AM

<< a poor economy and not self reliance is responsible for the drop in oil prices. >>

What is all the poor economic data?

derryb · August 25, 2014 10:56AM

<< 

<< a poor economy and not self reliance is responsible for the drop in oil prices. >>

What is all the poor economic data? >>

So you don't believe reduced oil use is at all a result of fewer jobs, lower real income, reduced consumer spending? Money velocity alone is all the economic data one needs to see to know that US economic activity has drastically slowed down:

And keep your eyes open for a new shaded vertical bar on this chart once the cat escapes from the bag.

Baley · August 25, 2014 11:58AM

sooo, what is "normal"? and what would be the "mean" to which conditions may regress? Maybe 1.75 or 1.80?

And keep your eyes open for a new shaded vertical bar on this chart once the cat escapes from the bag

of course there will be another recession someday. And a big stock market drop. And there will be a big hurricane again. and some floods and wildfires and killing frosts and droughts...

and then, after that, another period without one.

After the recent earthquake, are the people who kept predicting one every day saying, "see! see! I just knew this would happen!"

cohodk · August 25, 2014 2:25PM

So you don't believe reduced oil use is at all a result of fewer jobs, lower real income, reduced consumer spending?

No I dont believe this.

Money velocity alone is all the economic data one needs to see to know that US economic activity has drastically slowed down:

If this is what you believe then I now understand why your economic prognostications over the last few years have been so wrong.

derryb · August 25, 2014 6:43PM

<< So you don't believe reduced oil use is at all a result of fewer jobs, lower real income, reduced consumer spending?

No I dont believe this.

Money velocity alone is all the economic data one needs to see to know that US economic activity has drastically slowed down:

If this is what you believe then I now understand why your economic prognostications over the last few years have been so wrong. >>

Have they? Regardless of your CNBC, the economy has not been FED-fixed, the dollar continues to lose it role in world-wide transactions and China has overcome the US as the world's largest economy. If the FED would address the drastic slowdown in MV and get some of its $3 trillion into the hands of the consumer and out of the hands of ifs fellow bankers many economic issues would be resolved. Failure to see the importance of MV is a rather large failure. At times I wonder just what you do understand.

jmski52 · August 25, 2014 9:48PM

Maybe gov.com ought to encourage real capitalism instead of milking it dry. Maybe corporatism should be given a closer look. Maybe the financial industry laws (and other laws as well) should be enforced (fairly, equally) instead using them as political weapons and continuing to make more of them.

MGLICKER · August 25, 2014 11:24PM

<< Maybe gov.com ought to encourage real capitalism instead of milking it dry. Maybe corporatism should be given a closer look. Maybe the financial industry laws (and other laws as well) should be enforced (fairly, equally) instead using them as political weapons and continuing to make more of them. >>

coinrollhunter · August 26, 2014 1:28AM

<< I knew it would happen. Still kicking myself for not buying Ford at $2 and GE at $4 in 2009. Had the money, felt the gut feeling, but did not have the cajones. >>

I know what you mean...we are all frustrated when we look back at those opportunities and didn't capitalize on it...you'll be ok I think. You still have the rest of your life to make smart picks in the stock market.

Remember when CMG went public? Remember its price in 2010 or 2011...aye aye aye...

TwoSides2aCoin · August 26, 2014 2:44AM

My hats off since I left the Army, but that doesn't mean a person can't make money investing in guns or bullets, or the governments who just have to have them. And those who bet against them usually lose their shorts.

cohodk · August 26, 2014 10:42AM

<< 

<< So you don't believe reduced oil use is at all a result of fewer jobs, lower real income, reduced consumer spending?

No I dont believe this.

Money velocity alone is all the economic data one needs to see to know that US economic activity has drastically slowed down:

If this is what you believe then I now understand why your economic prognostications over the last few years have been so wrong. >>

Have they? Regardless of your CNBC, the economy has not been FED-fixed, the dollar continues to lose it role in world-wide transactions and China has overcome the US as the world's largest economy. If the FED would address the drastic slowdown in MV and get some of its $3 trillion into the hands of the consumer and out of the hands of ifs fellow bankers many economic issues would be resolved. Failure to see the importance of MV is a rather large failure. At times I wonder just what you do understand.

>>

My CNBC? Lol

Monetary velocity comes from the banks, not the FED.

No matter how little I may understand, it will always be more than you.

cohodk · August 26, 2014 10:43AM

I am still waiting to see poor economic data.

derryb · August 26, 2014 10:58AM

<< Monetary velocity comes from the banks, not the FED.

No matter how little I may understand, it will always be more than you.

>>

The federal reserve bank, through its regulatory contol of this nation's banks and through the power of its economic policy, controls monetary velocity. Banks do what they are allowed and "encouraged" to do and nothing more. Monetary velocity is nothing short of consumer liquidity - controlled by the central bank through commercial banks over which it wields ultimate power.

You over rate yourself. Heavily.

derryb · August 26, 2014 11:45AM

<< I am still waiting to see poor economic data. >>

I said a "poor economy."

Poor economic data is something you will have to get from Washington.

Meanwhile,

More about that money velocity problem

cohodk · August 27, 2014 1:56AM

<< 

<< I am still waiting to see poor economic data. >>

I said a "poor economy."

Poor economic data is something you will have to get from Washington.

Meanwhile,

More about that money velocity problem >>

Again, refusal or inability to prove your contention.

derryb · August 27, 2014 2:15AM

proof is in the pudding. Proving anything to you has proven to be impossible, why waste the time.

Metalsman · August 27, 2014 4:15AM

<< 

<< Monetary velocity comes from the banks, not the FED.

No matter how little I may understand, it will always be more than you.

>>

The federal reserve bank, through its regulatory contol of this nation's banks and through the power of its economic policy, controls monetary velocity. Banks do what they are allowed and "encouraged" to do and nothing more. Monetary velocity is nothing short of consumer liquidity - controlled by the central bank through commercial banks over which it wields ultimate power.

You over rate yourself. Heavily. >>

Yes Derry... but why let facts get in the way of ones Blind View?

Baley · August 27, 2014 4:30AM

If the FED would address the drastic slowdown in MV and get some of its $3 trillion into the hands of the consumer and out of the hands of ifs fellow bankers many economic issues would be resolved.

.. and then we'd have a new set of problems to bch n moan about.

Back to the money velocity graph and the comment above, I think the graph from 2000 to the present reflects in part a decreasing demand for loans, one factor related to the plastic recycling comment earlier regarding decreased petroleum demand, there is also LESS demand for loans as people (smart people) de-leverage and pay down debt rather than taking on new debt to fund consumption of new "stuff"..

meaning that the recycling of lightly-used stuff in an efficient market for it (Ebay, Craig's list, etc) is taking some of the demand from "new" stuff.. that and the fact that once people already have one of "it", they tend to stop shopping for another one. Part of the reason "the economy" for "stuff" (as opposed to food and energy consumables) is that durables last, and as this baby boom bulge moves through their life cycle, they'll be downsizing, passing some physical assets to heirs and selling others off, demanding less "stuff" and demanding more of what EVERYONE needs toward the end of their life .. more goods and services related to lifestyle and especially health and medical care.

Justacommeman · August 27, 2014 5:06AM

Wish I would have shorted guns and ammo. Smith & Wesson is taking a beating after downward guidance. Bringing the whole sector down. It does create some opportunity I suppose. Long at $11.30.

MJ

cohodk · August 27, 2014 1:03PM

proof is in the pudding. Proving anything to you has proven to be impossible, why waste the time

I aint seen no pudding, nor have I ever seen you present any facts to support a theory. I thought it was a fairly simple question though. If you presented me with data that showed a poor economy I may tend to believe. If you presented me with facts about a conspiracy then I may believe. But instead, all I get is "a waste of time". Sorry to be so stubborn, but a theory without supporting documentation is merely hubris.

I want cold hard facts, not some opinion from Zerohedge or Willie. Show me something indisputable.

derryb · August 27, 2014 2:14PM

<< I want cold hard facts, not some opinion from Zerohedge or Willie. Show me something indisputable. >>

cohodk · August 27, 2014 2:33PM

http://www.examiner.com/article/petro-dollar-era-is-officially-over-as-gazprom-begins-sales-yuan-and-rouble

Two oil tankers are expected to arrive in Europe in September.

According to Kommersant, the payment for these shipments will be received in rubles

More like a publicity stunt than "petro dollar era oficially over".

cohodk · August 27, 2014 2:34PM

<< 

<< I want cold hard facts, not some opinion from Zerohedge or Willie. Show me something indisputable. >>

>>

My kids watch cartoons also.

derryb · August 27, 2014 2:46PM

<< 

<< 

<< I want cold hard facts, not some opinion from Zerohedge or Willie. Show me something indisputable. >>

>>

My kids watch cartoons also. >>

Hopefully at least they learn something.

My hats of to those of you that &quot;shorted&quot; PM's &amp; Oil a month ago

Comments

My hats of to those of you that "shorted" PM's & Oil a month ago