Author Topic: Doom and gloom?  (Read 3898 times)

JoeB313

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Doom and gloom?
« on: March 06, 2013, 08:17:11 PM »
With all of the negativity out there (Massive debt, QE2/3 etc etc) -- can anyone offer any insights as to why the future may prove to be not all doom and gloom?

As someone who is about to make the plunge into investing a large portion of income into domestic and foreign index funds I am having some wet feet and am hesitant to dive right in considering the recent gains which may be due for a  sharp correction.

brewer12345

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Re: Doom and gloom?
« Reply #1 on: March 07, 2013, 10:47:33 AM »
I could cite lots of reasons to view things positively, but if you are glued to teh negative stuff it would be a waste of time.  If you want guarantees, put your money in a savings acccount.  Investing requires optimism in either the market as a whole or your abilities as an investor.

There is a handy alternative to lump sum investing: dollar cost averaging.  Just put a chunk in at the same time every month (blindly) until you are at the level of investment you wish to be.
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soners

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Re: Doom and gloom?
« Reply #2 on: March 07, 2013, 10:56:24 AM »
I'd check out Warren Buffet's annual shareholder letter which was just released.  He's bullish!

COguy

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Re: Doom and gloom?
« Reply #3 on: March 07, 2013, 11:11:10 AM »
There has always been doom and gloom.  The news has a vested interest in making it look like we are going off a cliff all of the time. 

For some recent examples:  Remember Y2K?  9/11?  The fiscal cliff?

Want longer term:  Whip inflation now?  World War 2?  The Cold War?

How did all of that turn out?

That's my take on doom and gloom.

@JoeB313, I noticed you posting over on the bogleheads forums.  I suggest you read what Larry Swedroe and Rick Ferri have written about stock market valuations being fair still.  If you have an allocation that is appropriate to your risk tolerance the day you buy should be largely irrelevant.  That large drop that might come next week will look like a blip in 30 years after accounting for dividends and such. 

Personally, I see stocks yielding ~3% with dividends and share repurchases and long bonds yielding ~3% and cash yielding ~.9%.  Who will benefit from the cheap money of today:  Businesses who take out loans, homeowners with mortgages, etc...So, I think the outlook for equities is fantastic for the next 20 years.  Sure it might suck for 5-10 years but at some point all that cheap debt will be used to build productive things and create new ideas and products and such.  Keep a balanced asset allocation and stick to the plan.  You will do fine that way. 

Of course, the apocalypse could be tomorrow...Bring a sack of beans and a gun!

Like Larry Swedore says "My crystal ball is cloudy."  Just dollar cost average if you are nervous (but keep it under 12 months) and move on with your life.

KingCoin

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Re: Doom and gloom?
« Reply #4 on: March 07, 2013, 11:18:13 AM »
There are billions of people in the developing world who consume a small fraction of what we do in the developed world. The world is flattening at a rate never seen and with no signs of slowing down. These people will soon demand iPhones, air conditioners, international travel, branded products, drugs and healthcare, as well as all sorts of services. This massive growth engine will dwarf lingering debt problems in the west.

BYUvol

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Re: Doom and gloom?
« Reply #5 on: March 07, 2013, 02:28:28 PM »
I'd check out Warren Buffet's annual shareholder letter which was just released.  He's bullish!

Here's one of my favorite excepts from the letter:

Since the basic game is so favorable, Charlie and I believe it’s a terrible mistake to try to dance in and out
of it based upon the turn of tarot cards, the predictions of “experts,” or the ebb and flow of business
activity. The risks of being out of the game are huge compared to the risks of being in it.

*edit* The primary risk, I believe, to being not invested in the market, is that the government is trying to create an inflationary environment. Stocks are far superior in their ability to weather inflation than cash or other short-term instruments.
« Last Edit: March 07, 2013, 02:34:05 PM by BYUvol »

chucklesmcgee

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Re: Doom and gloom?
« Reply #6 on: March 07, 2013, 08:58:56 PM »
If you want guarantees, put your money in a savings acccount.

Not really. If massive inflation comes along, a savings account is where you LEAST want it.  Returns might be consistent but that's not much of a guarantee of the future value of your money!

smedleyb

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Re: Doom and gloom?
« Reply #7 on: March 07, 2013, 09:16:44 PM »
With all of the negativity out there (Massive debt, QE2/3 etc etc) -- can anyone offer any insights as to why the future may prove to be not all doom and gloom?

As someone who is about to make the plunge into investing a large portion of income into domestic and foreign index funds I am having some wet feet and am hesitant to dive right in considering the recent gains which may be due for a  sharp correction.

Perhaps divert a piece of your investment dollars -- say, 25% -- toward a dedicated money market fund which you can look to deploy during big pullbacks.  Just make sure to invest the rest in a steady, methodical fashion.  Best of both worlds, IMO.


strider3700

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Re: Doom and gloom?
« Reply #8 on: March 07, 2013, 10:30:49 PM »
I'm a hard core doomer in many ways beyond economic/financial doom.   I view QE3 as a purely inflationary disaster working to drive the value of the dollar down.    While that's happening the extra money has to go somewhere  and the stock market makes a lot of sense as a place for it to magically appear and I figure the market should easily outrun inflation over time as a major source of it's growth will be inflation.  I'll happily hop on board and let my investments inflate at the same time.   If they have real valid gains at the same time all the better.

NotThatKindofDr

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Re: Doom and gloom?
« Reply #9 on: March 08, 2013, 12:02:50 AM »
  World War 2?

How did all of that turn out?

Is that a serious example? Of course it worked out well for Allied investors--they WON. 

COguy

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Re: Doom and gloom?
« Reply #10 on: March 08, 2013, 01:44:45 PM »
  World War 2?

How did all of that turn out?

Is that a serious example? Of course it worked out well for Allied investors--they WON. 

I guess that might have not been the best example.  Of course we mustachians are the good guys and if Hollywood has shown me anything, the good guys almost always win :)

the fixer

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Re: Doom and gloom?
« Reply #11 on: March 08, 2013, 02:11:06 PM »
The bad guys won the WWII economic game in the long run, too (think Volkswagen, BMW, Mitsubishi). Wars cause short-term chaos but very large companies exist on a higher plane that political parties, countries, and alliances.
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Kriegsspiel

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Re: Doom and gloom?
« Reply #12 on: March 08, 2013, 06:05:23 PM »
The bad guys won the WWII economic game in the long run, too (think Volkswagen, BMW, Mitsubishi). Wars cause short-term chaos but very large companies exist on a higher plane that political parties, countries, and alliances.

I don't see how this is a game of "winning and losing," can you explain what you mean?

the fixer

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Re: Doom and gloom?
« Reply #13 on: March 08, 2013, 06:25:17 PM »
Just that the Nazis and Hirohito may have lost the war, power, etc. but at least some large private companies operating within those countries as part of the war machine survived the conflict, and are still around as large companies today. So if someone were to say "North Korea and Iran are going nuts, World War III is brewing!" that doesn't mean it's going to be the end of the world economically.
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Kriegsspiel

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Re: Doom and gloom?
« Reply #14 on: March 08, 2013, 07:33:40 PM »
Oh ok, I dig it.  That's more like everyone winning, than the Axis winning, but yea I agree with you.

smedleyb

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Re: Doom and gloom?
« Reply #15 on: March 08, 2013, 07:39:13 PM »
Strange we're having this conversation in investor's alley with the DOW, small caps, and transports breaking out to all time highs, and the S&P 500 just a stone's throw away.  You would think the mood would be much more positive, as opposed to a reflection on the impending financial apocalypse. 

And it's not just this post, on this forum, on this site that I'm talking about.  It's everywhere.  Is this what they mean in investing world by the expression"climbing the wall of worry?"

brewer12345

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Re: Doom and gloom?
« Reply #16 on: March 08, 2013, 07:54:59 PM »
If you want guarantees, put your money in a savings acccount.

Not really. If massive inflation comes along, a savings account is where you LEAST want it.  Returns might be consistent but that's not much of a guarantee of the future value of your money!

Actually, cash historically kept up with inflation pretty well.  Of course, now we are in never never land where that is no longer the case, so who knows in the future.
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Mike

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Re: Doom and gloom?
« Reply #17 on: March 09, 2013, 07:10:07 AM »
About the best you can do right now in real terms is -1.2% (MM rate at Ally is 0.9%, inflation rate last year was 2.1%).  In better short term interest rate times (the mid-2000s), it was basically a push.

I doubt we'll ever see a positive real return on short term yields anytime soon - the Fed has too much of an incentive to keep them low so we can continue to afford to service our country's debt without blowing a hole in the budget.

Xtal

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Re: Doom and gloom?
« Reply #18 on: March 10, 2013, 02:12:18 PM »
Strange we're having this conversation in investor's alley with the DOW, small caps, and transports breaking out to all time highs, and the S&P 500 just a stone's throw away.  You would think the mood would be much more positive, as opposed to a reflection on the impending financial apocalypse. 

And it's not just this post, on this forum, on this site that I'm talking about.  It's everywhere.  Is this what they mean in investing world by the expression"climbing the wall of worry?"

Here's why doom and gloom is everywhere:

 - investing as we know it depends on perpetual growth
 - the growth that we've known during our lifetimes, parents' lifetimes, and grandparents' lifetimes was fueled by an unprecedented one-time "gift" of cheap, versatile, portable energy (oil)
 - this "gift," which has been almost free in terms of the effort needed to get it out of the ground, is becoming much more expensive (now: tar sands, offshore drilling, arctic drilling vs. then: just sticking a straw in the ground in Texas or Pennsylvania and pulling it out)
 - regardless of whether or not people have intellectually accepted this concept, I think it's in the zeitgeist.  People feel in their bones that a change is coming.  Hence the widespread feeling of doom.

What happens to investing once "growth" as we know it is a thing of the past?  (Feel free to argue against my premises if you like, but I think an interesting "what if" conversation about investing could be had based on the possibility of those premises.)
"A luxury, once sampled, soon becomes a necessity."

KingCoin

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Re: Doom and gloom?
« Reply #19 on: March 10, 2013, 02:56:46 PM »
What happens to investing once "growth" as we know it is a thing of the past?  (Feel free to argue against my premises if you like, but I think an interesting "what if" conversation about investing could be had based on the possibility of those premises.)

I'm not sure to what extent people are really internalizing that message (other than a "peak oil" obsessed minority).  I think most intuitively grasp the power of the substitution effect. The price of solar power, for instance, is falling with Moore's Law as panels become cheaper and more efficient. Getting to the point where renewable energy makes the old petroleum economy look expensive is no longer a hippy pipe dream. Here's a recent article from the NYT blog:
http://opinionator.blogs.nytimes.com/2013/03/06/crowd-funding-clean-energy/
Solar won't be the only answer, but could be part of a suite of attractive alternatives that will become even more viable as oil prices rise.

I think much of the current bearishness stems from the psychic shock of the financial crisis. It was so fast, vicious and opaque, that people no longer have trust in the banking system, economic predictions, central bankers, and simple tenets like "your house is a secure investment". All of a sudden, predictions of disaster around every corner feel much more plausible.

Mike

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Re: Doom and gloom?
« Reply #20 on: March 11, 2013, 03:26:11 AM »
If oil gets too expensive, just start using natural gas as a fuel source instead.  It's cheap and abundant.  Is it renewable?  No.  Is it zero emission?  No.  But it's a nice alternative that can help in the transition away from an oil-based economy.  With any luck, it'll buy us enough time to really get our shit together with solar, wind, and geothermal (which is something the US *really* has in abundance).

StarswirlTheMustached

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Re: Doom and gloom?
« Reply #21 on: March 11, 2013, 09:23:56 AM »
[exactly what I was going to say]
Thanks, Xtal! I was worried I was the only one on this forum who got it.

If oil gets too expensive, just start using natural gas as a fuel source instead.  It's cheap and abundant.  Is it renewable?  No.  Is it zero emission?  No.  But it's a nice alternative that can help in the transition away from an oil-based economy.  With any luck, it'll buy us enough time to really get our shit together with solar, wind, and geothermal (which is something the US *really* has in abundance).
Yes, that's what they said during the first oil shocks in the 1970s. It's not "with any luck" it was "with any foresight"-- which, unfortunately, we lack. We've squandered our bridging resource, however. The amounts still available are massively overstated in the media. (that also goes for coal, too, if you happen to hate your grandchildren that much)

For the purposes of convincing this crowd:
Dr. Tom Murphy, a physicist at UCSD, has a lovely blog in which he has analyzed and knocked down all comers for replacement technology, here. He also analyzes what he calls the "energy trap" -- that is, we're stuck even if we had a replacement handy, mostly because we have eaten through our bridging resources. The analogy I like for our situation (which he doesn't use) is that if you run out of gas in Siberia a few hundred miles from the nearest service station, you cannot carry enough gas back to get to the service station... so without making massive sacrifices (walk with a back-breaking load of fuel, drive a ways, repeat) you are out of gas, permanently.

Interestingly, Dr. Murphy (and many peak oil thinkers) last, best hope essentially comes down to Mustachianism. If we, as a society, got off the consumer treadmill, we needn't suffer that much through the End of Oil.

What the End of Growth means for our investment portfolios is nothing good, however. What I anticipate from the stock market is a boom-bust cycle, one bubble after another, with the real economy never --quite-- recovering. Just as the stock market has recovered from 2008 just fine, but things on main street don't seem so great. If the economy does recover well enough, rising oil prices will knock it back in its place-- that's just simple demand destruction, because we aren't increasing production. Right now, it looks like the whole shale gas bubble is on its way out in the next year or so. (When leases have been trading for more than the recoverable gas under them is worth, I feel confident enough calling that a bubble).

I'm guessing property and durable goods would be the best investment in this sort of economic environment, but I am not 100% certain. For sure I'm not buying into the market right now, though.

LSK

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Re: Doom and gloom?
« Reply #22 on: March 11, 2013, 09:40:27 AM »
[...] For sure I'm not buying into the market right now, though.
Then what are your suggestion then?
If not to just let the banks store your cash for 0% interest while charge you fees for the "service", because that's basically what the situation we're in now.

StarswirlTheMustached

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Re: Doom and gloom?
« Reply #23 on: March 11, 2013, 10:07:06 AM »
I'm Canadian, so interest rates aren't nearly that bad. My Tax Free Savings Account is at 3% and my e-savings is at 1.9%. (mean inflation over the past couple years has been around 2%)*. Both are no fee accounts. It's not ideal-- like I said, I'd be putting it into property and durable goods if I could--starting with a house for myself, renovating with buttloads of insulation, a solar hot water system, things of that nature-- anything to reduce outside monetary inputs before a shrinking economy makes everything more expensive. (that needn't be by crazy inflation, either; it can just as easily be by wages).
Once I had my own stable setup, I'd branch out into rental properties, once the property market here cools down some.
Unfortunately, I'm in graduate school and my 'stache is only 40k or so, so... banks it is for me.

I'm not sure what I'd be doing if I were in my situation and American; certainly not watching my savings get eaten by inflation! I'd probably try and get a mortgage on property and become an absentee landlord when I had to move, if I were in a market where that were possible.

*but that's CPI. Include fuel and housing and it's probably over 4. I'd rather not think about that right now-- and housing is due for a correction in this country, anyway.

EDIT: by "durable goods" I mean things that are Buy It For Life for which I forsee a continuing need, regardless of economic upset.
« Last Edit: March 11, 2013, 10:11:22 AM by StarswirlTheMustached »

brewer12345

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Re: Doom and gloom?
« Reply #24 on: March 11, 2013, 11:18:25 AM »
LSK, don't get seduced by the doom & gloom that seems to attract some people like moths to a flame (with similar results).  Stay the course, diversify broadly, don't take too much risk, and you will do fine over time.
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StarswirlTheMustached

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Re: Doom and gloom?
« Reply #25 on: March 11, 2013, 11:25:42 AM »
LSK, don't get seduced by the doom & gloom that seems to attract some people like moths to a flame (with similar results).  Stay the course, diversify broadly, don't take too much risk, and you will do fine over time.
Somehow I doubt Xtal or I are going to be incinerated by our pessimism. :P
Granted, if it turns out I'm wrong, I am going to suffer somewhat from a lower ROI than those of you who are more open to risk-taking, but I don't see how it's going to cost me my shirt.

fiveoh

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Re: Doom and gloom?
« Reply #26 on: March 11, 2013, 11:27:32 AM »
Strange we're having this conversation in investor's alley with the DOW, small caps, and transports breaking out to all time highs, and the S&P 500 just a stone's throw away.  You would think the mood would be much more positive, as opposed to a reflection on the impending financial apocalypse. 

And it's not just this post, on this forum, on this site that I'm talking about.  It's everywhere.  Is this what they mean in investing world by the expression"climbing the wall of worry?"

Here's why doom and gloom is everywhere:

 - investing as we know it depends on perpetual growth
 - the growth that we've known during our lifetimes, parents' lifetimes, and grandparents' lifetimes was fueled by an unprecedented one-time "gift" of cheap, versatile, portable energy (oil)
 - this "gift," which has been almost free in terms of the effort needed to get it out of the ground, is becoming much more expensive (now: tar sands, offshore drilling, arctic drilling vs. then: just sticking a straw in the ground in Texas or Pennsylvania and pulling it out)
 - regardless of whether or not people have intellectually accepted this concept, I think it's in the zeitgeist.  People feel in their bones that a change is coming.  Hence the widespread feeling of doom.

What happens to investing once "growth" as we know it is a thing of the past?  (Feel free to argue against my premises if you like, but I think an interesting "what if" conversation about investing could be had based on the possibility of those premises.)

Actually we in a new oil boom thanks to new technology(horizontal drilling, fracking etc) unlocking prevoiusly unrecoverable reserves(unconvential plays, shales, etc).  It is possible the US might be an exporter of oil again in the next decade sometime. 

brewer12345

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Re: Doom and gloom?
« Reply #27 on: March 11, 2013, 11:33:34 AM »
Strange we're having this conversation in investor's alley with the DOW, small caps, and transports breaking out to all time highs, and the S&P 500 just a stone's throw away.  You would think the mood would be much more positive, as opposed to a reflection on the impending financial apocalypse. 

And it's not just this post, on this forum, on this site that I'm talking about.  It's everywhere.  Is this what they mean in investing world by the expression"climbing the wall of worry?"

Here's why doom and gloom is everywhere:

 - investing as we know it depends on perpetual growth
 - the growth that we've known during our lifetimes, parents' lifetimes, and grandparents' lifetimes was fueled by an unprecedented one-time "gift" of cheap, versatile, portable energy (oil)
 - this "gift," which has been almost free in terms of the effort needed to get it out of the ground, is becoming much more expensive (now: tar sands, offshore drilling, arctic drilling vs. then: just sticking a straw in the ground in Texas or Pennsylvania and pulling it out)
 - regardless of whether or not people have intellectually accepted this concept, I think it's in the zeitgeist.  People feel in their bones that a change is coming.  Hence the widespread feeling of doom.

What happens to investing once "growth" as we know it is a thing of the past?  (Feel free to argue against my premises if you like, but I think an interesting "what if" conversation about investing could be had based on the possibility of those premises.)

Actually we in a new oil boom thanks to new technology(horizontal drilling, fracking etc) unlocking prevoiusly unrecoverable reserves(unconvential plays, shales, etc).  It is possible the US might be an exporter of oil again in the next decade sometime.

It is illegal to export crude from the US at present.  However, refined product exports are going gangbusters and enterprising entrepreneurs are rapidly building capacity to produce something called "light oil," the crudest, cheapest to make thing that can be legally exported.
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StarswirlTheMustached

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Re: Doom and gloom?
« Reply #28 on: March 11, 2013, 01:48:51 PM »
Actually we in a new oil boom thanks to new technology(horizontal drilling, fracking etc) unlocking prevoiusly unrecoverable reserves(unconvential plays, shales, etc).  It is possible the US might be an exporter of oil again in the next decade sometime. 
Neither horizontal drilling nor fracking are new technologies; they've both been around for something like 50 years. They're being applied now because the price of oil is much higher, in real terms, making it a worthwhile investment. As for the US becoming an oil exporter... lol, no. Even Business Insider seems to admit that it's bubkis. The only way anyone can make the claim that the US could even be independant in oil production, much less an exporter, is to deliberately confuse oil shale with the tight oil being fracked from shale formations like the Bakken.  Very, very different. The oil shales America has in such abundance are rocks, with a waxy substance called kerogen in their pores. After 40 years of trying, no one has any way to get more energy out of them than it takes to mine them. (The Lithuanians have oilier oil shale, so they can burn raw like low-grade coal, but you don't get that stuff on this continent, apparently).

The US is exporting refined products because it has excess refinery capacity. This is because the demand destruction by high oil prices has been effective at getting Americans to use less refined oil than they once did, so the extra can be sold abroad. It has nothing to do with the relative abundance of crude on this continent.

Fun fact, though: if the USA used as much petrol per capita as the EU average, it WOULD be an oil exporter.

brewer12345

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Re: Doom and gloom?
« Reply #29 on: March 11, 2013, 02:57:43 PM »
Actually we in a new oil boom thanks to new technology(horizontal drilling, fracking etc) unlocking prevoiusly unrecoverable reserves(unconvential plays, shales, etc).  It is possible the US might be an exporter of oil again in the next decade sometime. 
Neither horizontal drilling nor fracking are new technologies; they've both been around for something like 50 years. They're being applied now because the price of oil is much higher, in real terms, making it a worthwhile investment. As for the US becoming an oil exporter... lol, no. Even Business Insider seems to admit that it's bubkis. The only way anyone can make the claim that the US could even be independant in oil production, much less an exporter, is to deliberately confuse oil shale with the tight oil being fracked from shale formations like the Bakken.  Very, very different. The oil shales America has in such abundance are rocks, with a waxy substance called kerogen in their pores. After 40 years of trying, no one has any way to get more energy out of them than it takes to mine them. (The Lithuanians have oilier oil shale, so they can burn raw like low-grade coal, but you don't get that stuff on this continent, apparently).

The US is exporting refined products because it has excess refinery capacity. This is because the demand destruction by high oil prices has been effective at getting Americans to use less refined oil than they once did, so the extra can be sold abroad. It has nothing to do with the relative abundance of crude on this continent.

Fun fact, though: if the USA used as much petrol per capita as the EU average, it WOULD be an oil exporter.

Then explain the large and persistent price difference between west texas intermediate and brent crude.
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StarswirlTheMustached

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Re: Doom and gloom?
« Reply #30 on: March 11, 2013, 05:23:05 PM »
Then explain the large and persistent price difference between west texas intermediate and brent crude.
I am not exactly sure how said price difference in any way disproves the fact that new discoveries haven't matched production for decades now (since about 1980), and hence, we're running out of oil. It doesn't have to happen everywhere at the same rate.
I am not going to deny there's been a bit of a boom in domestic oil production of late. All the way back up to 2003 levels! ( http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=A ) There was also a modest peak in 1985, however-- from the Alaska North Slope coming online, I believe. That was also supposed to lead to energy independence. The fact is, though, that US oil production hit its maximum in the early 70s, and has been going down ever since. Nobody ever said it had to be a perfectly smooth decline.

fiveoh

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Re: Doom and gloom?
« Reply #31 on: March 11, 2013, 07:08:01 PM »
Then explain the large and persistent price difference between west texas intermediate and brent crude.
I am not exactly sure how said price difference in any way disproves the fact that new discoveries haven't matched production for decades now (since about 1980), and hence, we're running out of oil. It doesn't have to happen everywhere at the same rate.
I am not going to deny there's been a bit of a boom in domestic oil production of late. All the way back up to 2003 levels! ( http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=A ) There was also a modest peak in 1985, however-- from the Alaska North Slope coming online, I believe. That was also supposed to lead to energy independence. The fact is, though, that US oil production hit its maximum in the early 70s, and has been going down ever since. Nobody ever said it had to be a perfectly smooth decline.

I was referring to "shale plays" such as the eagle ford and bakken.

That link you posted only goes thru 2011. 

http://newsok.com/u.s.-oil-boom-narrows-nations-trade-gap/article/3755671

http://www.bloomberg.com/news/2013-03-05/conoco-says-u-s-should-consider-allowing-oil-exports.html

"Thanks largely to fracking, the US is set to overtake Saudi Arabia and Russia to become the world's biggest oil producer by 2017, according to a November report from the International Energy Agency (IEA). "

You might not believe it but it is happening. 

I dont see how this can be anything but good for America.


Mike

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Re: Doom and gloom?
« Reply #32 on: March 12, 2013, 06:17:33 AM »
Based on the numbers I've seen published by the EIA, we have a little over 80 years of 2012 usage left of natural gas (current reserves) in the US.  How much of that time span yields cheap natural gas is anyone's guess.

There's also the issue of how people react to higher prices.  Generally speaking, people drive less as it costs them more to do it, just like they fly less when it costs more.  Given the fact much of our energy consumption is via driving, I would suggest that politicians increase the gas tax pronto.  You get more revenue (win), you get less driving (win), and you spur car manufacturers to respond with more efficient vehicles without the costly burden of mandating it via new CAFE standards (win).

Of course, now that I've said this, nobody in their right mind will propose it, at least not at the federal level.

unitsinc

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Re: Doom and gloom?
« Reply #33 on: March 12, 2013, 07:19:58 AM »
Then explain the large and persistent price difference between west texas intermediate and brent crude.
I am not exactly sure how said price difference in any way disproves the fact that new discoveries haven't matched production for decades now (since about 1980), and hence, we're running out of oil. It doesn't have to happen everywhere at the same rate.
I am not going to deny there's been a bit of a boom in domestic oil production of late. All the way back up to 2003 levels! ( http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=A ) There was also a modest peak in 1985, however-- from the Alaska North Slope coming online, I believe. That was also supposed to lead to energy independence. The fact is, though, that US oil production hit its maximum in the early 70s, and has been going down ever since. Nobody ever said it had to be a perfectly smooth decline.

I was referring to "shale plays" such as the eagle ford and bakken.

That link you posted only goes thru 2011. 

http://newsok.com/u.s.-oil-boom-narrows-nations-trade-gap/article/3755671

http://www.bloomberg.com/news/2013-03-05/conoco-says-u-s-should-consider-allowing-oil-exports.html

"Thanks largely to fracking, the US is set to overtake Saudi Arabia and Russia to become the world's biggest oil producer by 2017, according to a November report from the International Energy Agency (IEA). "

You might not believe it but it is happening. 

I dont see how this can be anything but good for America.

That is really wishful thinking at best. I work in the fracing(no "k") industry for one of the super majors, and while we can now economically extract oil and gas that we previously couldn't(we've been able to frac for years, just not economically), this will by no stretch make us one of the largest players or energy independent.

Not to mention these processes are extremely dirty when compared to the easy stuff in Saudi Arabia.

Technology will continue to get better and will allow us to extract more and more previously unrecoverable oil, it will continue to get more expensive in terms of money and environmental impact.

I don't see how this can be anything but bad for America.

I really suggest the blog linked earlier.

http://physics.ucsd.edu/do-the-math/post-index/

It really breaks every angle down that you could possibly want when it comes to energy.
I'm your huckleberry.

fiveoh

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Re: Doom and gloom?
« Reply #34 on: March 12, 2013, 10:06:40 AM »
Then explain the large and persistent price difference between west texas intermediate and brent crude.
I am not exactly sure how said price difference in any way disproves the fact that new discoveries haven't matched production for decades now (since about 1980), and hence, we're running out of oil. It doesn't have to happen everywhere at the same rate.
I am not going to deny there's been a bit of a boom in domestic oil production of late. All the way back up to 2003 levels! ( http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=A ) There was also a modest peak in 1985, however-- from the Alaska North Slope coming online, I believe. That was also supposed to lead to energy independence. The fact is, though, that US oil production hit its maximum in the early 70s, and has been going down ever since. Nobody ever said it had to be a perfectly smooth decline.

I was referring to "shale plays" such as the eagle ford and bakken.

That link you posted only goes thru 2011. 

http://newsok.com/u.s.-oil-boom-narrows-nations-trade-gap/article/3755671

http://www.bloomberg.com/news/2013-03-05/conoco-says-u-s-should-consider-allowing-oil-exports.html

"Thanks largely to fracking, the US is set to overtake Saudi Arabia and Russia to become the world's biggest oil producer by 2017, according to a November report from the International Energy Agency (IEA). "

You might not believe it but it is happening. 

I dont see how this can be anything but good for America.

That is really wishful thinking at best. I work in the fracing(no "k") industry for one of the super majors, and while we can now economically extract oil and gas that we previously couldn't(we've been able to frac for years, just not economically), this will by no stretch make us one of the largest players or energy independent.

Not to mention these processes are extremely dirty when compared to the easy stuff in Saudi Arabia.

Technology will continue to get better and will allow us to extract more and more previously unrecoverable oil, it will continue to get more expensive in terms of money and environmental impact.

I don't see how this can be anything but bad for America.

I really suggest the blog linked earlier.

http://physics.ucsd.edu/do-the-math/post-index/

It really breaks every angle down that you could possibly want when it comes to energy.

Always someone out there to correct my bad spelling.  :) 

unitsinc

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Re: Doom and gloom?
« Reply #35 on: March 12, 2013, 11:32:09 AM »
Then explain the large and persistent price difference between west texas intermediate and brent crude.
I am not exactly sure how said price difference in any way disproves the fact that new discoveries haven't matched production for decades now (since about 1980), and hence, we're running out of oil. It doesn't have to happen everywhere at the same rate.
I am not going to deny there's been a bit of a boom in domestic oil production of late. All the way back up to 2003 levels! ( http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=A ) There was also a modest peak in 1985, however-- from the Alaska North Slope coming online, I believe. That was also supposed to lead to energy independence. The fact is, though, that US oil production hit its maximum in the early 70s, and has been going down ever since. Nobody ever said it had to be a perfectly smooth decline.

I was referring to "shale plays" such as the eagle ford and bakken.

That link you posted only goes thru 2011. 

http://newsok.com/u.s.-oil-boom-narrows-nations-trade-gap/article/3755671

http://www.bloomberg.com/news/2013-03-05/conoco-says-u-s-should-consider-allowing-oil-exports.html

"Thanks largely to fracking, the US is set to overtake Saudi Arabia and Russia to become the world's biggest oil producer by 2017, according to a November report from the International Energy Agency (IEA). "

You might not believe it but it is happening. 

I dont see how this can be anything but good for America.

That is really wishful thinking at best. I work in the fracing(no "k") industry for one of the super majors, and while we can now economically extract oil and gas that we previously couldn't(we've been able to frac for years, just not economically), this will by no stretch make us one of the largest players or energy independent.

Not to mention these processes are extremely dirty when compared to the easy stuff in Saudi Arabia.

Technology will continue to get better and will allow us to extract more and more previously unrecoverable oil, it will continue to get more expensive in terms of money and environmental impact.

I don't see how this can be anything but bad for America.

I really suggest the blog linked earlier.

http://physics.ucsd.edu/do-the-math/post-index/

It really breaks every angle down that you could possibly want when it comes to energy.

Always someone out there to correct my bad spelling.  :)

Haha, I don't blame you at all. Most people tend to toss the "k" in there, and that is typically how news articles spell it as well.

I think it's only people in the business that spell it without.
I'm your huckleberry.

fiveoh

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Re: Doom and gloom?
« Reply #36 on: March 12, 2013, 12:50:20 PM »
Then explain the large and persistent price difference between west texas intermediate and brent crude.
I am not exactly sure how said price difference in any way disproves the fact that new discoveries haven't matched production for decades now (since about 1980), and hence, we're running out of oil. It doesn't have to happen everywhere at the same rate.
I am not going to deny there's been a bit of a boom in domestic oil production of late. All the way back up to 2003 levels! ( http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=A ) There was also a modest peak in 1985, however-- from the Alaska North Slope coming online, I believe. That was also supposed to lead to energy independence. The fact is, though, that US oil production hit its maximum in the early 70s, and has been going down ever since. Nobody ever said it had to be a perfectly smooth decline.

I was referring to "shale plays" such as the eagle ford and bakken.

That link you posted only goes thru 2011. 

http://newsok.com/u.s.-oil-boom-narrows-nations-trade-gap/article/3755671

http://www.bloomberg.com/news/2013-03-05/conoco-says-u-s-should-consider-allowing-oil-exports.html

"Thanks largely to fracking, the US is set to overtake Saudi Arabia and Russia to become the world's biggest oil producer by 2017, according to a November report from the International Energy Agency (IEA). "

You might not believe it but it is happening. 

I dont see how this can be anything but good for America.

That is really wishful thinking at best. I work in the fracing(no "k") industry for one of the super majors, and while we can now economically extract oil and gas that we previously couldn't(we've been able to frac for years, just not economically), this will by no stretch make us one of the largest players or energy independent.

Not to mention these processes are extremely dirty when compared to the easy stuff in Saudi Arabia.

Technology will continue to get better and will allow us to extract more and more previously unrecoverable oil, it will continue to get more expensive in terms of money and environmental impact.

I don't see how this can be anything but bad for America.

I really suggest the blog linked earlier.

http://physics.ucsd.edu/do-the-math/post-index/

It really breaks every angle down that you could possibly want when it comes to energy.

Always someone out there to correct my bad spelling.  :)

Haha, I don't blame you at all. Most people tend to toss the "k" in there, and that is typically how news articles spell it as well.

I think it's only people in the business that spell it without.

TBH I've seen it both ways and I didnt bother to check which way was correct.  Good to know. 

StarswirlTheMustached

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Re: Doom and gloom?
« Reply #37 on: March 22, 2013, 08:42:05 AM »
Take a look at this image. A close look.


Are you thinking to yourself "Wow, these doomers are nuts! America IS energy independent!"
If you are, you need to look closer. Notice that there are TWO scales.

Is NBC deliberately lying with this graph? I cannot fathom why they'd lay it out that way, except to create the false impression I just described.

Jack

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Re: Doom and gloom?
« Reply #38 on: March 22, 2013, 01:31:49 PM »
Take a look at this image. A close look.


Are you thinking to yourself "Wow, these doomers are nuts! America IS energy independent!"
If you are, you need to look closer. Notice that there are TWO scales.

Is NBC deliberately lying with this graph? I cannot fathom why they'd lay it out that way, except to create the false impression I just described.

Wow, that's fucked up. Lying with graphs is possible to do by accident -- such as, for example, by using a 3D pie chart just because it looks pretty -- but this cannot be anything but deliberate.

(For bonus points, the scale on the left doesn't start at zero -- which is also a well-known "lying with graphs" tactic!)

smedleyb

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Re: Doom and gloom?
« Reply #39 on: March 22, 2013, 01:48:00 PM »
Take a look at this image. A close look.


Are you thinking to yourself "Wow, these doomers are nuts! America IS energy independent!"
If you are, you need to look closer. Notice that there are TWO scales.

Is NBC deliberately lying with this graph? I cannot fathom why they'd lay it out that way, except to create the false impression I just described.

Nice analysis Star.  I almost ran out (without turning off the lights) and bought and SUV based on this graph I was so happy to see us kicking so much ass on the energy front.  Or is that the point? lol!


Spork

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Re: Doom and gloom?
« Reply #40 on: March 22, 2013, 02:10:53 PM »
Take a look at this image. A close look.


Are you thinking to yourself "Wow, these doomers are nuts! America IS energy independent!"
If you are, you need to look closer. Notice that there are TWO scales.

Is NBC deliberately lying with this graph? I cannot fathom why they'd lay it out that way, except to create the false impression I just described.

I hate to take up for them... but I think it's just poorly done.  The gist of it seems to be "consumption down some, imports down more".  Both consumption and imports are on the same scale.  The thing that is confusing is the production numbers... which really don't relate and don't really belong on the graph to begin with.  Those are the numbers on the right.  ...but it is quite an awful graph.

MountainMan

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Re: Doom and gloom?
« Reply #41 on: March 22, 2013, 04:44:53 PM »
With all of the negativity out there (Massive debt, QE2/3 etc etc) -- can anyone offer any insights as to why the future may prove to be not all doom and gloom?

As someone who is about to make the plunge into investing a large portion of income into domestic and foreign index funds I am having some wet feet and am hesitant to dive right in considering the recent gains which may be due for a  sharp correction.

Here's my reason:  http://www.amazon.com/Rational-Optimist-Prosperity-Evolves-P-S/dp/0061452068

StarswirlTheMustached

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Re: Doom and gloom?
« Reply #42 on: March 27, 2013, 12:44:49 PM »
Take a look at this image. A close look.


Are you thinking to yourself "Wow, these doomers are nuts! America IS energy independent!"
If you are, you need to look closer. Notice that there are TWO scales.

Is NBC deliberately lying with this graph? I cannot fathom why they'd lay it out that way, except to create the false impression I just described.

I hate to take up for them... but I think it's just poorly done.  The gist of it seems to be "consumption down some, imports down more".  Both consumption and imports are on the same scale.  The thing that is confusing is the production numbers... which really don't relate and don't really belong on the graph to begin with.  Those are the numbers on the right.  ...but it is quite an awful graph.
"Never attribute to malice that which is adequately explained by stupidity"?
There's some value in that, but it just works so well at creating that misleading impression if you don't look at it closely, and you just know that most people won't.

sherr

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Re: Doom and gloom?
« Reply #43 on: March 28, 2013, 08:29:13 AM »
I agree with Spork, or rather I would go further than him. I think the graph is neither malicious or badly done.

The problem with graphing them on the same scale, or even the ultimate in "non-deception" of starting the graph at 0, is that by zooming out that far you make the volatility and directional changes of the lines less visible. Your graph design needs to match with the information you are trying to demonstrate

If you are trying to show "here's how close we are to oil independence" then yes you should graph them both on the same scale, and not starting at 0 is not necessary (nor would you want to, to get the maximum level of detail on the lines as possible).

If you are trying to show "the whole story" then your graph should start at 0 and all lines should be on the same scale. You won't be able to see very much detail though.

If you are trying to show, as Spork said, "consumption down some, imports down more, production is the reason" then the graph should be constructed exactly as it is so that you can see the maximum amount of relevant detail.

The problem, StarswirlTheMustached, is simply that you are trying to read information from the graph that it was not constructed to convey, which yes can lead to some confusion. That just means you need to be a more careful graph-reader though, not that anyone is maliciously trying to trick you or incompetent.