How was your day off? What’s that, you didn’t know you had yesterday off? I guess it surprised us all then. Actually I took a ‘mental health day’ last night. I felt like I was coming down with something so I turned in…and today I’m right as rain! (Figuratively speaking.)
So what was the ‘meme’ of the day? Oh yeah, it looks like the UK is in ‘danger’ of losing its AAA credit rating. (I find it odd that the BBC was mute on the subject tonight…perhaps it’s already ‘old news’ over there…)
Some of you might recall how oil prices sank into the basement just before the elections last year. Some of you might also remember hearing about a practice called ‘Contango’…where traders buy cheap oil and store it until the price goes up.
Which brings us to tonight’s first offering sans any mention of the fact they have run out of places to store oil. Despite the BBC running a story last night about the thousands of tanker’s full sitting in ports around the world. Each tanker holds roughly one to two million gallons of ($30 a barrel) oil.
Gas Is Up; Drivers May Not Cut Back
As oil futures closed above $60 a barrel on Wednesday, gas prices have risen as well - about 25 cents in the last three weeks.
By JAD MOUAWAD
Published: May 20, 2009
Thanks to lower fuel costs and a proliferation of travel bargains, Americans are expected to hit the roads this Memorial Day weekend in bigger numbers than last year.
Last summer’s energy shock drove gasoline prices well above $4 a gallon and forced people to cut back on driving. Then oil prices plunged, and the stratospheric cost of a gallon of gas became a dim memory. But gasoline has been rising rapidly in recent weeks.
Gasoline is selling for an average of $2.33 a gallon, up from $2.06 just last month, according to AAA, the automobile club, and a steep rise from the recent low of $1.67 a gallon in December. A cutback in refining production and the expected rebound in driving this weekend are helping to push up prices at the pump. [What part of ‘price manipulation’ don’t you get good citizen…let’s not forget that the dollar is dropping like a rock again, another important factor in the rise of commodity prices!]
Some analysts expect to see gas rise above $2.50 a gallon this summer. [There’s those ‘anal-ists’ again!]
The number of people traveling by car this weekend is projected to rise by 2.7 percent compared with 2008, to 27 million people, according to projections from AAA. Last year, road travel fell by 9.6 percent when prices surged, according to the automobile group. [Didn’t they recently announce that ‘miles traveled’ are down from this time last year? Weird how five million people losing their jobs during that time has that effect…yet, as you can see, gas prices are rising!]
“The bargains and the cheaper gas, combined with the stressed-out consumer who is ready for a break, will trump other concerns,” Robert L. Darbelnet, AAA’s chief executive, told reporters last week. “It is a slight uptick. In this economy, any uptick over last year is a positive sign.” [Since there is no way of knowing if vehicle use actually does pick up, which is to say there’s no way for YOU to independently verify it. What we really have here is ‘happy talk’.]
The jump in demand that accompanies summer travel is just one of many factors that are driving up energy prices.
Oil prices rose above $60 a barrel on Wednesday in New York, settling at $62.04, the highest level since November, after a weekly report from the Energy Department showed a drop in commercial inventories and gasoline production was curbed by fires at two refineries, in Texas and Pennsylvania.
Some analysts also say they believe that the worst of the economic slowdown may be over, even if a recovery could take a long time, infusing some optimism into the oil market. The Energy Department said recently that oil prices had risen after suggestions the economy “may have reached a turning point in the current recession.” [Understand good citizen, it is far more likely we’re seeing price manipulation and ‘speculators’ driving up the prices…again!]
“Oil prices have improved markedly in recent weeks, largely on ostensible signs that the global economy has begun its long-awaited recovery,” according to a report by PFC Energy, a consultancy. “But while evidence is mounting that the worst of the contraction is behind us, a broad economic recovery is still some time away.” [Although it ‘could’ be speculators ripping us off like they did the last time, considering there is currently a record setting ‘glut’ of oil on today’s markets…and what a ‘coincidence’, most of it was purchased at $30 a barrel!]
Oil markets are also weighing the effect on global supplies of a fresh round of violence in the Niger Delta, Nigeria’s oil-rich region. Last week, the Nigerian government started its biggest military offensive in the delta in years, mounting helicopter raids and naval attacks on militant camps. [Does this look a little ‘too convenient’ to anyone else? These same ‘militants’ are likely responsible for half of the increase per barrel we experienced last time…
The largest rebel group in the region, the Movement for the Emancipation of the Niger Delta, responded with calls for “an all-out war” and said it blew up two pipelines over the weekend. [Since it’s now Friday, they must they talking last weekend! for this to be in a Thursday news report. Meanwhile, protests over the government ‘action’ was part of tonight’s BBC broadcast…]
The fighting is threatening to further disrupt supplies from Nigeria, Africa’s top oil and gas exporter. Security forces clashed with militants on Tuesday near a flow station operated by Chevron in the western part of the Niger Delta, according to a report from Reuters. On Wednesday, Eni, the Italian oil company, said it was invoking emergency contract provisions that allow it to suspend export obligations at its Brass River terminal in the delta.
Nigeria’s state oil company, NNPC, said there had been no significant impact on oil production so far. “The success of the military campaign means that production can go on,” Levi Ajuonuma, a spokesman for the company, told Reuters. [Understand good citizen, besides the glut of oil sitting in tankers around the world, most of our oil comes from Canada, Mexico and Venezuela.]
Higher prices will be the main topic on the agenda of the Organization of the Petroleum Exporting Countries, whose members meet next week in Vienna to consider new production targets for the next few months. More than anything else, it was action by the members of the OPEC cartel that has helped push prices up since the beginning of the year. [Excuse me, does anyone want to explain how all of those tankers got filled with ‘cheap’ crude that have so fortuitously doubled in value over the past couple of weeks?]
After peaking at a record close of $145.29 a barrel last summer, oil prices slumped to a closing low of $33.87 a barrel by December as global credit markets froze and the global economy went into a tailspin.
In response, OPEC members agreed to cut their output by 4.2 million barrels during several rounds of feverish meetings over the last eight months, helping set a floor on the market. [Remember good citizen that all oil-exporting economies were hammered by drop in prices, and many ‘discounted’ their oil to keep the cash coming in…]
Despite the recent market rally and fragile optimism about the state of the economy, oil consumption in the United States, and across much of the world, still remains weak. In its latest monthly report, the International Energy Agency estimated that daily average oil consumption in 2009 would drop to 83.2 million barrels, a drop of 2.6 million barrels, or 3 percent, from last year. [So tell me again why prices are climbing since this obviously has nothing to do with ‘supply & demand’?]
“The pace of contraction is close to early 1980s levels, with a growing consensus that economic and oil demand recovery will be deferred to 2010,” the energy agency said. “A quick recovery remains so far elusive.” [We’re 2 years into this thing come August…isn’t it a bit late to be looking for a ‘quick’ anything!]
In the United States, oil demand has dropped without interruption for 15 months. According to the energy agency, oil demand fell by 5.9 percent in March, compared with the same time last year. [Okay, so they printed the other side of the coin…but they have left out the ‘contango’ part of the puzzle as well as the glut of oil stored off-shore by ‘speculators’. Where the F…is our government that these Wall Street vermin are ripping off the consumer like this while they’re taking trillions of taxpayer dollars?]
But the Memorial Day weekend could reverse that trend, if only temporarily, analysts said. [Yeah, aren’t these the same assholes that are ‘surprised’ by everything that happens on Wall Street?]
“You give the American consumers a reduction in price and consuming confidence is getting slightly better, I think people go back and take their vacations,” said Lawrence Goldstein, an energy analyst. “They don’t go on a spending binge, but they ease up a little bit.”
What about the 5 million that have found themselves on ‘permanent vacation’?
Honestly good citizen, the last two times proved to be a ‘scam’ and the SOB’s are at it again…and just like both prior occasions our government isn’t lifting a finger to stop them! (Remember the price at the pump was hovering around $3 a gallon before the 2006 mid-terms and it came back down to just under a buck in time for the elections…)
The last two times this ‘rip-off’ was chalked up to having a pair of ‘oilmen’ in the White House…what do we chalk it up to this time?
I chose tonight’s second offering as a contrast piece to our first offering.
Economic Reality Check Sends Markets Lower
By MATTHEW SALTMARSH
Published: May 21, 2009
The increased likelihood of a downgrade of Britain’s credit rating and less positive economic signals from the United States dented investor hopes Thursday that the world’s largest economies will show much vigor in the near term.
Shares in Europe finished sharply lower and the major indexes on Wall Street were all down more than 2 percent in afternoon trading. [Although there was a strong ‘end of the day rally’.]
A collection of factors helped to drag stock indexes lower on both sides of the Atlantic.
The first came Wednesday when the Federal Reserve, in its minutes of the April meeting, revised its outlook and said that the economy was likely to contract by 1.3 to 2 percent compared with the earlier estimates of 0.5 and 1.3 percent. Fed policymakers also said the unemployment rate might approach 10 percent. [What they’re not saying is it will be over 10% by the end of the summer!]
A second came Thursday when the ratings agency Standard & Poor’s cut its outlook on Britain’s sovereign debt rating to negative from stable, while re-affirming the ‘AAA’ rating. Then, data from the American government showed that the number of people continuing to claim unemployment insurance rose to a new high.
The Dow Jones industrial average was down 189 points, or 2.2 percent in afternoon trading. The broader Standard & Poor’s 500-stock index declined 2.4 percent, while the technology heavy Nasdaq fell 2.7 percent. [As you already know the markets ‘closed’ down 129 points today.]
In Europe, the German DAX closed down 2.7 percent, while the CAC-40 in Paris fell 2.6 percent and the British FTSE-100 shed 2.8 percent. The European Dow Jones Stoxx 600 Index, a broad regional benchmark, slid 2 percent. It had climbed 26 percent since the start of March.
In Asia, the Nikkei-255 closed down almost 1 percent and the Hang Seng index in Hong Kong lost 1.6 percent.
The declines represented a reality check for investors, some of whom had become convinced that the recovery in stock prices seen since early March would continue seamlessly. [As far as ‘declines’ go, they ain’t seen nothin’ yet!]
In Europe, the main theme was the move by S&P. ‘AAA’ ratings are important for foreign exchange reserve managers and pension fund managers. Some funds have requirements that only ‘AAA’ assets can be held for core investments. A lower rating would also mean the government would pay higher interest rates to borrow on bond markets. [Meanwhile, rumblings continue about how long the US will be able to retain its AAA rating…]
“It’s dragged down a lot of sectors, with implications for all U.K. assets,” said James Hughes, a market analyst at CMC Markets in London. [I repeat, the BBC was mute on this topic tonight…not a single word.]
Many analysts had initially assumed that the outlook for the British economy was bleaker than that of Continental Europe. Recently, however, that view had changed amid the release of weak growth data from Germany and other European economies. So a downgrade might also have implications for Europe, Mr. Hughes said.
Driving the S&P decision was a re-assessment of the cost of the British financial sector bailout and concern about a sharp deterioration in the government debt-to-G.D.P. ratio, estimated at 100 percent in 2013 from around 49 percent this year.
The chancellor of the Exchequer Alistair Darling “is going to have pull a rabbit out of the hat at November’s pre-budget report or suffer a sovereign downgrade,” said Chris Turner, head of foreign exchange strategy at ING.
The pound lost over 2 cents to $1.55 after the news, but recovered some ground to trade above $1.57. It was slightly lower against the euro.
The price of the two-year benchmark gilt, or British government bond, recovered from a sharp sell off after the government successfully sold all 5 billion-pounds, or $1.6 billion, at an auction after the ratings announcement.
In the United States, the Labor Department said that initial claims for jobless benefits fell to a seasonally adjusted 631,000, down from a revised figure of 643,000 the previous week. Economists expect factory shutdowns by Chrysler and General Motors to inflate the initial claims numbers through June.
The number of people continuing to claim unemployment insurance rose to nearly 6.7 million from about 6.6 million, the department said. That was the highest total on records dating to 1967 and the 16th straight record. [Oh yeah, this ‘recession’ is so over…NOT!]
Meanwhile, comments from the former chairman of the Federal Reserve, Alan Greenspan, after the close of trading Wednesday also weighed on sentiment. He suggested he sees a bigger capital shortfall in the banking system than reflected in regulators’ stress tests.
Investors were already unease before Mr. Greenspan’s comments after the Fed warned Wednesday that the United States economy was likely to contract 1.3 to 2 percent this year compared with the earlier estimates of 0.5 and 1.3 percent.
The Fed warning also weighed on oil prices. Light, sweet crude for July delivery dropped $1.48, or 2.4 percent, to $60.56 a barrel in New York trading.
There were, however, some positive signals for the European economy Thursday. [Is it beginning to look like somebody ‘outlawed’ bad economic reports?]
A monthly purchasing managers’ survey for the euro-area manufacturing and services sectors improved in May to levels last seen before the collapse of the investment bank Lehman Brothers in September. In addition, British retail sales rose much more than expected in April, suggesting that British consumer spending is holding up despite the recession.
There, like here, we can only wonder who is spending money they don’t have?
Then we have the ‘fudge factor’ to contend with as so many government statistics are heavily ‘massaged’ these days.
With so much bald faced lying going on, the future of the Republic looks mighty grim good citizen.
You may be of the opinion that these, um, ‘mis-statements’ don’t effect you and yours, not right now and not today…would that this were true.
If they are so willing to lie and obfuscate the truth now, how will you know when they are telling the truth?
Short answer, you won’t.
Ironically, this crisis is insoluble until ‘faith’ can be restored in our main institutions. As long as the media shirks its responsibility to the public to report the unvarnished truth, we cannot recover.
Until entrenched wealth and private interests are uprooted and cast out of our society we have no hope of ever enjoying freedom again.
There is no ‘I’ in team good citizen…and if you weren’t born rich, you’re not on ‘their team’.
Thanks for letting me inside your head,
Gegner
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