The ‘stupidity index’ dropped another 94 points today, closing below the 10,000 mark, thereby providing the dandies on Wall Street with the opportunity to ‘shoot the moon’ again!
Like a lot of economic mechanisms during these bizarre times, the dollar has only recently returned to its ‘normal’ behavior. For the past several months the dollar has been climbing in tandem with equity/commodity prices, it normally moves in the opposite direction.
Take today’s headline for example.
As the Dollar Sinks, Oil Skyrockets
By CLIFFORD KRAUSS
Published: October 21, 2009
HOUSTON — Crude oil soared to close above $80 a barrel on Wednesday, breaking that psychological barrier for the first time this year, despite weak global economic conditions. [One need never look too far to find evidence that the ‘green shoots’ crowd is staring a little too wistfully at the content of their stashes…]
Prices have been up in 9 of the last 10 trading days, owing at least in part to the slide of the dollar. Many oil analysts predicted that prices would continue to rise in coming weeks and could reach $100 a barrel by early next year. [I mean what the hell, it’s another 12 months until the midterm elections, and elections appear to be the only time force powerful enough to make energy prices fall…]
“Oil is just flying,” said Phil Flynn, senior market analyst at PFGBest Research, a futures trading firm. “It’s off to the races.”
Analysts said rising oil prices reflected confidence that the economy was beginning to rebound from a deep recession, as well as higher demand from refineries for superior grades of oil that were cheaper to refine.
But they say the most important factor is the falling value of the dollar, which is encouraging traders, institutions and foreign countries to invest their cash in hard assets like oil and gold. Oil is priced in dollars on global markets, and a falling dollar almost always puts upward pressure on oil. [This spells ‘trouble’ in so many ways it is difficult to pick a place to begin…BUT, let it suffice to say that the rising price of energy has the power to crush this most feeble ‘recovery’ before it escapes the lurid imaginations of the perma-bulls.]
The rise in the price of crude oil is being accompanied by an increase in gasoline prices, a potential threat to retailers that hope consumers will be able to spend their cash at the mall this holiday season and not at the gas station. The national average price of a gallon of regular gasoline rose by 2 cents on Wednesday from the day before, to $2.60, according to AAA, the automobile club.
That was nearly 12 cents above the price of only a week ago. But it is still about 30 cents below the pump price of a year ago, and well below the $4 mark crossed in the summer of 2008. [Which should have us all wondering why this is? Demand is way down…so why has the price of gas been rising steadily for the past six months…in fact, the price of gas has been rising in tandem with the first mention of ‘green shoots’…coincidence?]
The price rise is a reminder of a time just over a year ago when companies up and down the energy pipeline were rushing oil to market, struggling to keep up with demand. [This time there is no need to ‘waste words’ when a simple ‘Bull Shit’ says it all. This time last year was just prior to the elections, which tells you where the price of gas was…]
That boom ended with the financial panic of late last year. Economic conditions are still weak, leading oil companies to cut their investments in new drilling and production projects and close refineries. [Um, sadly, this clown has his years mixed up! Which makes the loss of ‘fact check’ in journalism that much more tragic…]
Demand for oil products in the United States and other industrialized countries remains sluggish. Imports have been declining and are now at the lowest levels since mid-August, while inventories are rising. [Uh, is it me or is this piece contradicting itself left and right?]
Tom Kloza, chief oil analyst at the Oil Price Information Service, said the Organization of the Petroleum Exporting Countries was producing 800,000 barrels a day more than the world market could consume, despite attempts to curtail production. [Yet the price of energy continues to rise…even though consumption has fallen off a cliff…which tells us what?]
“You have to be looking through magenta-colored glasses at this point to see demand outstripping supply any time in the next six months,” Mr. Kloza said. “This is a minibubble that is dollar-related, and related to financial flows wanting to be long oil as a leverage against a weak dollar.”
T. Boone Pickens, the Texas oil man, said that he thought the price reflected oil’s role as a “finite resource” that could potentially rise to $100 again next year. “Get used to it,” he said, referring to high oil prices. “You’re going to have to live with it.” [Isn’t it ironic that energy isn’t expensive at all…if you’re a billionaire!]
Traders drove the spot price of oil up $2.25, to $81.37 a barrel on Wednesday, and the price briefly hit $82 before easing. [Funny word, ‘trader’ which is also interchangeable with the words ‘gambler’ and ‘speculator’…]
Wild price swings, reflecting an unstable market, have become almost normal in recent years. The price of a barrel of oil swelled from just below $100 in January 2008 to nearly $150 that July before collapsing to less than $35 last December. The price has more than doubled since then, and few analysts see the price moving below $75 any time soon. [Notice how nobody is connecting some very obvious dots here. If energy rises, employment will fall because of the overall increase in ‘the cost of doing business’. What do you suppose this is going to do to the non-existent ‘recovery’? Simply put good citizen, you can’t crush a recovery that didn’t exist in the first place, can you…]
Oil executives expressed optimism that higher prices would encourage more drilling in the United States, which had fallen sharply since last year along with oil prices. But they said they were worried that the continuing zigzags would make future investment decisions difficult.
“We all recognize that last year’s too high a price hurt the consumer and the industry itself because the prices were unsustainable,” said Glenn M. Darden, president and chief executive of Quicksilver Resources, an oil and gas company in Fort Worth. He said he hoped for “stabilized prices,” adding, “at least $80 oil is a lot different from $140 oil.”
Uh, $80 oil sure as hell ain’t $35 oil…so what is fucktard trying to say? Perhaps more perplexing is how energy prices are increasingly being manipulated as a political force in support of the neo-con economic agenda.
Worse is what has happened to energy prices over the last eight years with a conservative administration in charge. President moves into the White House and fuel prices start to creep up with various excuses being presented to the public…and then the next thing you know, the new conservative president invades the Middle East! Which causes panic in the energy markets…although the US gets most of its energy from Canada/Mexico/South America…go figure!
Anyway…the ‘world price’ of energy is what it is even if most of the ‘threat’ to Middle Eastern oil posed by the ‘War on Terra’ has no direct effect on our energy supply, per se. Our suppliers COULD sell their output to those nations whose supply IS endangered by war in the Middle East.
Left unexplained is why we are forced to pay more for something that isn’t, in fact, in ‘short supply’?
How are your ‘perfect markets’ looking now?
What we have here is capitalism at its finest…this is why governments exist, to prevent this variety of ‘fuck you, pay me!’ capitalism from pulling civilization under the mud, leaving nothing but chaos in its wake. (Notice I didn’t misuse the word ‘anarchy’, which is in no way related to the word chaos.) Anarchy is a capitalist’s worst nightmare…think about it.
Thanks for letting me inside your head,
Gegner
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