http://www.nytimes.com/2008/10/17/bu...hp&oref=slogin

Quote: Iran’s oil minister, Gholamhossein Nozari, told reporters in Tehran on Tuesday, “I think the low price is a real damage to the future of production.” From its inception, the oil industry has gone through countless cycles, with oil companies cutting investments when prices fell. The price collapse of the 1980s forced companies to slash investments and prompted a wave of large mergers through the industry. But this retrenchment left the world scrambling for oil when demand from Asian and Latin American economies soared. Concerns that this pattern might be repeated were mentioned frequently during an industry conference in Venice last weekend, where oil executives said they worried that a prolonged recession, tighter credit and lower energy consumption would mean slower growth in energy supplies in coming years. The credit freeze has already forced some projects to be scaled back, some energy analysts and executives said. “This is a real test,” said Jeroen van der Veer, the chief executive of Royal Dutch Shell, in an interview at the conference. “Some people will be overstretched, and there will be some delays in some projects.”

This is ridiculous.

When ExXoN can report 70+ Billion dollars in profit, why are oil companies saying it will slow growth, why don't they use all that fricken money they've been raping us for?

But I'm sure they are too busy padding their walls with bills before the "recession" that they are so worried will cause a "slower growth" in their own business.

Does anyone see how much BS is behind them not making the billions they have been?

In the 70's Exxon's stock(XOM) dropped from $13 to $6 it was horrible, today Exxon's stock it over $70 and the recent stock market problems have brought them down ~25% vs the ~55% in the 70's. So this is so bad that they are going to have to watch their backs and lay off people...we should have took them out back and a long long while ago.

Well Exxon doesn't just have a vault of gold. They take that $70billion and invest it in other companies, this mean bonds and stocks. If a company bombs they don't get any of their money from stocks back and not much from companies if they own bonds in them.

In short, everyone's money is tied into other people's investments and when some I-Banks make terrible decisions that end up costing 700Billion, 70billion could easily be from Exxon investing in any one of those banks that bombed out.

They are probably using all that money to insulate their house...after all, that's pretty much about the best use of the U.S. dollar in today's economy.

Merrill Lynch is running a confidence-booster ad talking about how 13 economic downturns have ended with 13 economic booms. The tag line is "That's not a prediction - that's history". Or something like that.

It is a curious condition of human behavior I'm just sort of seeing.

When things are good, everyone believes the good times will go on forever. That they will be able to flip a house and buy two and flip those two and buy four and so on until they are flipping half the planetary supply of houses every year.

They believe everything will continue to go up in a relatively straight line for an infinite amount of time.

When things get bad, everyone believes the bad times will go on forever. That no one anywhere will ever be able to sell a house again and the real estate agent will become a 'lost' job like buggy-whip maker.

The believe everything will continue to go down in a relatively straight line for an infinite amount of time.

Yet there has *NEVER* been straight-line behavior *EVER* for any appreciable length of time. Not in real-estate. Not in stocks. Not in job growth/loss. Not in gold. Not in the dollar. Not in oil. Not in anything.

Why do we the people behave as if boom-bust cycles don't exist. Every economic system I am aware of [socialist, communist, capitalist] has them. Is saving for a rainy-day and investing with an eye towards the lean times so antithetical to human behavior that we just can't make ourselves?

Or is this an American sort of behavior that's only been around a generation or two?

Having been thru the mid-70s [Remember wage and price controls? WIN - Whip Inflation Now?], the savings-and-loan scandal [Remember The Resolution Trust Corporation?], the dot-com boom and bust, the recent housing crisis, I'm now beginning to understand the unstable nature of the "American condition".

In time it is easy to see the following happen [imagine the following magazine covers]:
* PC Mag with a tombstone on the cover that says "Web 2.0" and phrases like "No one predicted that no one would want to Google anymore".
* The Economist with a bear being chased by an angry bull and the headline "The return of American stocks"
* Newsweek with a picture of a gas pump showing US$5 a gallon for gas
* Time talking about the real-estate "crunch" and how more people want homes than there are homes available complete with pie charts, graphs and gleeful real-estate agents.
* Gold at $600 an oz [Money? The Financial Times?]

When? I don't know and probably not all in the same month

Why do we persist, as a culture, in believing the straight line when the cycle is the thing that keeps happening?

I don't get it
-MF

The oil companies remind me of a previous era when railroads caused the creation of 'Anti-Trust'. If only so few have the power or resources in a certain, ridiculously overpowered market, it doesn't exactly help anyone else, either in the industry or for the consumers. It's really no different than a drug dealer; someone who has a finite supply of a difficult to obtain substance in a market that more or less depends on it. They can simply charge whatever they want in order to keep themselves afloat without regulation. It seems to me that there have been multiple reports, noting all of the oil refining companies have posted fairly high profits in the midst of $100+ a barrel market. It is also relatively apparent that even with a drop, such as the recent one below $70, that everyone else doesn't get a share of that savings until much later on down the line (like the following year, by the time demand drops). Although I suppose good for the overall industry of alternate means of transportation, whether public or new-fangled environmentally friendly vehicles.

Have to agree with that, Monsignor. The real estate market bust was just as predictable as the dot com bust. Both forgot that in order to persist in a market, there has to be viable consumers for it. During that previous era when the mainstream was just learning about the internet, the people with knowledge said hey, I know html and whatnot, I'll make a website. Then the guys with money said hey, if we hire or sponser these guys, we can make loads of money in this brave new foray, and consequently constructed a business model with poorly projected growth rates for a market with no customers. Soon everybody started doing it, and there weren't enough consumers for any single business to persist indefinitely. Housing market took the same downturn when houses jumped from around $400k to beyond $700k in a very short while where I live. Soon there were no buyers, despite the efforts of companies like Countrywide who would continue to loan out ridiculous amounts at sub-prime rates (read: bad APR) and expect consumers to be able to pay.

But at least at the end of the day, things revert back to normal; housing prices drop, gas prices drop, cost becomes more relative to income, and people are back to complaining about the little things. Era like the Great Depression were certainly horrible, but they didn't do us in. We're all still living, working, and consuming.

personally, i think everyone needs to take a much closer look at the current economic problems' roots.

/sets the way back machine for 2 years ago

Gas is just below $2 a gallon ($1.80 here in TN), then suddenly begins a rapid increase due to rising oil prices. A rise that no one has even begun to justify to this day.

Gas skyrockets upwards past $4 a gallon in only a few months time. Consumers are now faced with buying high priced gas to be able to go to work to make money. The result is that people now have less money to spend on food, and yes, mortgages.

Foreclosures start running rampant as people can't afford to pay their bills, and some can't even afford to buy food for their families.

And it all started with the spiking of gas prices, not the stock market.

Personally I say let OPEC drown in their own oil, they brought this on themselves out of greed. If we're not buying as much gas as we used to, they lose money and suddenly they are in the same state of affairs as the rest of the worlds economies.

Suck it OPEC, you made your bed now lay in it.

Me... I seen this coming since W got into office.....

I warned people to vote for him, saying "You seen how that dude runs companies and even a basketball team bankrupt? He's going to do the same thing with the "company", USA, he'll run it into bankruptcy!"

He got into office when gas was still 99 cents here in Florida, he invaded and kept occupy 2 countries to this day.

We also rebuilding Iraq, with Halliburton as only general contractor, same Halliburton as Dick Cheney used to be CEO for.

Dick Cheney claims that he has no ties with Halliburton today, my ass! God ol' boy system prime example!

It was doomed to happen.....

Quote: Originally Posted by BeetleMan Me... I seen this coming since W got into office..... I warned people to vote for him, saying "You seen how that dude runs companies and even a basketball team bankrupt? He's going to do the same thing with the "company", USA, he'll run it into bankruptcy!" He got into office when gas was still 99 cents here in Florida, he invaded and kept occupy 2 countries to this day. We also rebuilding Iraq, with Halliburton as only general contractor, same Halliburton as Dick Cheney used to be CEO for. Dick Cheney claims that he has no ties with Halliburton today, my ass! God ol' boy system prime example! It was doomed to happen.....

Theories are always sooo much cooler to spout than facts.

Quote: Originally Posted by Sparky Theories are always sooo much cooler to spout than facts.

Here's some facts Sparky:

In the days before the war almost five years ago, the Pentagon estimated that it would cost about $50 billion. Lawrence Lindsey, a White House economic adviser, was a bit more realistic, predicting that the cost could go as high as $200 billion, but President Bush fired him in part for saying so.

The war is conservatively estimated to cost 300 million dollars a day. Or roughly 2 billion dollars a week. The direct cost of the war is over $700 billion dollars to date.

The two best-known analyses of the war’s costs agree on this figure, but they diverge from there. Linda Bilmes, at the Kennedy School of Government at Harvard, and Joseph Stiglitz, a Nobel laureate and former Clinton administration adviser, put a total price tag of more than $2 trillion on the war. They include a number of indirect costs, like the economic stimulus that the war funds would have provided if they had been spent in this country. This number was derived before the Wall Street bailout.

Oh yeah, and 4186 American lives. That's 4047 after Bush said, "Mission Accomplished". I don't think anyone has come up with a dollar value for that statistic.

Treating heart disease and diabetes, by contrast, would probably cost about $50 billion a year. The remaining 9/11 Commission recommendations — held up in Congress partly because of their cost — might cost somewhat less. Universal preschool would be $35 billion. In Afghanistan, $10 billion could make a real difference. At the National Cancer Institute, annual budget is about $6 billion.

And you know what? I still don't see Bin Laden's head on a pike outside the White House.

Quote: Originally Posted by AntiM And you know what? I still don't see Bin Laden's head on a pike outside the White House.

hello.....that's because he's already dead!!

Quote: Originally Posted by EstwingMan hello.....that's because he's already dead!!

You killed him?

Quote: Originally Posted by EstwingMan hello.....that's because he's already dead!!

The White House thinks he's alive. So either you or Bush and his cabinet is dead wrong.


The head on the pike is an analogy for the failure to stop terrorism by throwing mountains of money at it. Al-Queda is alive and well, so is militant Sunni, Hamas and others. Remember Bin Laden is worth over $250 million, if he is alive, he's probaly living better than you or I are. Reports put him in a nice Chateau somewhere with his leuitenants.

The man who founded the Maktab al Khidmat which later morped into A-Queda, Adullah Azzam preached that although the western powers could not be fought by conventional means, they can be forced to tear themselves apart from the inside.

I don't care if you did vote for him twice, Bush has a lower approval rating than Nixon for a reason. Make that a multitude of reasons.