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Agreed. It would appear there are lots of 'dreamers' out there. Reality bites, and it's alarming that the general public just 'doesn't get it' when it comes to things like consumption and energy. Or maybe they understand it and just stick with the status quo out of fear, figuring it won't get too bad in their lifetimes, let others deal with it later. Problem is, I think 'later' is now. I try to follow the broader topics on TheOilDrum.com as well - lots of info from around the world.
Agreed. It would appear there are lots of 'dreamers' out there. Reality bites, and it's alarming that the general public just 'doesn't get it' when it comes to things like consumption and energy. Or maybe they understand it and just stick with the status quo out of fear, figuring it won't get too bad in their lifetimes, let others deal with it later. Problem is, I think 'later' is now. I try to follow the broader topics on TheOilDrum.com as well - lots of info from around the world.
....can't wait for Jim's new book! Should be darkly comedic and sobering, to say the least. I guess for now I take solace in the fact that I live beneath my means, have a small house in town that is close to being paid off, debt-free, gainfully employed, and can take the bus or ride a bike to work most of the time. I don't drive enough to where gas prices bother me. I'll consider riding bicycle first, then the motorcycle, before I drive when the need arises. I think I can weather this storm just fine...I can't imagine being stuck with major debt heading into 2008 and beyond...yikes.
"World oil supply averaged 87.0 mb/d in December, up 870 kb/d from November on increases in OPEC-10, North America, the FSU, Brazil and China. Global supply in 4Q was more than 1.0 mb/d higher than a year earlier, having averaged at or below levels of a year ago in the previous three quarters."
"World oil supply averaged 87.0 mb/d in December, up 870 kb/d from November on increases in OPEC-10, North America, the FSU, Brazil and China. Global supply in 4Q was more than 1.0 mb/d higher than a year earlier, having averaged at or below levels of a year ago in the previous three quarters."
notice the world supply chart on the right side of the website...looks like another future "peak" is in the making...
Those charts also show global demand exceeding production by around a million barrels per day. Not sustainable over the long term--either there will be shortages, or sharply higher prices sufficient to cause "demand destruction." I love the term "demand destruction"--a nice little phrase meaning a lot of people just won't buy petroleum products because they can't afford them anymore. OK, I guess, until that includes a lot of Americans--then we'll all be in a big funk about it, and want to "blame" somebody because we squandered our resources and now have to do without.
Those charts also show global demand exceeding production by around a million barrels per day.
as things stand now (according to the cited IEA report), the average december world supply (87.0) has exceeded demand (85.8) by 1.2 mbpd. but you might have to throw that 2008 demand forecast (87.8) out the window if the US, China, and the rest of the industrialized world slide into a prolonged recession.
for an alternate and less apocalyptic view of "peak" oil go to Peak Oil Debunked and scroll down to "327. STRONG ARGUMENT FOR A SLOW DECLINE." i've read jd's stuff for several years and it's a pretty interesting though non-doomer read.
So, when will the housing market finally bottom out and start to gain? Some say 2010, some say 2008, does anyone really know?
My guess is no gains until at least 2012-2014, which is when the wave of subprime and option ARM economic gangrene works its way through. Prices need to come down 30-40% from today's median in the COS area for median incomes to line up with historical pricing of 2.8 times annual income. That capitulation will happen gradually unless we have a major economic accident, which I think is more likely than not based on what I see going on in the derivative sector.
Add to that the return to more traditional lending standards, meaning that many potential buyers are going to have to take a "time out" from the market to save up for a down payment again, as banks are now being burned at an increasing rate by homeowners with no "skin in the game" (i.e. none of their own money tied up in their house) just walking from their mortgages despite still being able to pay.
The "bottom" line is no bottom likely until median income lines up with median pricing, and we have a long way to go for that.
So, when will the housing market finally bottom out and start to gain? Some say 2010, some say 2008, does anyone really know?
Nice to see that Bob is aware that he is guessing. If anyone claims to know for sure......RUN!
I have to agree with Bob's "guess." I think there is a lot of downside potential. One thing few talk about is the possibility that some areas may NEVER come back. Overaggressive lending and poor financial decisions by borrowers may have started this problem (along with plenty over-building and over-development), but there are serious structural problems in the US economy that will alter the housing and real estate landscape over the longer term. The biggest of those is the end of the cheap and plentiful energy era. Simply stated, the suburban and "exurban" lifestyle, as it currently exists, simply is unsustainable over the long term. As more and more people will come to realize, to quote several authors, "other arrangements will have to be made." When they do, the desirability and marketability of those kinds of real estate will plummet, and selling prices will follow--if many such properties can be sold at all. That will be the "other shoe" that drops, and it likely will be a heavier "thud" than the current problems. Personally, there is no way I would want to be owning a piece of real estate in a far flung suburb or exurban area. It will be a long-term loser.
All of this assumes that there is not some sort of significant energy shock that hits any major oil-supplying region in the world. If that happens, there could be an immediate and resounding crash in the US economy, and the potential for serious political destabilization as well. You have to wonder how quickly today's apathetic, spoiled, self-centered, and hedonistic Americans would be to sell out part or all of their freedoms and democratic institutions when there is no gas at the gas station and not enough food to put on their tables in homes they can't pay for or afford to heat.
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yeah, about peak oil...
