Wednesday, May 11, 2011
Reality sinks in: "We have a tremendous glut."
$93.76 is March price of oil from the International Trade report. See exhibit 17.
That's pretty much the number that matters, although knowing that oil import prices rose in April and will rise in May is useful too.
It might also be relevant to know that in March of 2008 (see historical prices) the import price was 89.93. Meeting and exceeding all possible expectations! We're just overachievers!
The massive Mississippi floods will have an adverse impact on May's economic performance. The tornado destruction is still in there kicking us in the 'nads.
The Arthurian is harping on 1974. What changed? Here's a hint - between 1973 and 1974 the import price of oil way more than doubled, and it never stepped down again. If you look at oil historical prices, the rise and fall of oil corresponds well with what the average worker remembers as relatively good and bad economic times.
Countdown for world economy crumple 5, 4, 3, 2, ....
It turns out that the Mayan calendar was really predicting the price of oil! But at least we can reassure ourselves that we've fixed all those nasty financial instabilities in the system. Oh, wait....
I've been watching CNBC this morning and those numbers in red at the top of the screen. I've also been trying to factor in your Mayan calendar observation.
It suddenly hit me. There is one "sure thing" that never goes down and they show it to us each and every hour of each and every day. It ticks higher consistently. Never deflates.
I'm going all in on Eastern Time!
I remember reading a very interesting study a very long while ago about end-of-the-world cults. It turns out that although the end of the world doesn't come, the believers don't ever change their fundamental beliefs.
The 5/21rs seem to be a harmless lot, but the faith of economists in eternal stimulus seems to not even require a readjustment of beliefs.
Is there an element of pure faith in much of modern economics?
I'm changing my beliefs about my investment in Eastern Time. It is $11 and change seems to be getting a bit frothy!
I may take profits at $12.59.
In all seriousness, I have lost a great deal of faith in our economy and I doubt it ever returns. When I walked away from the stock market in 2004 I thought it would be for good. I still feel that way.
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