Thursday, October 30, 2014
Thursday, October 30, 2014 2 comments
New claims for Unemployment Benefits have for some time been in the neighborhood of 285,000 each week. This hasn't been seen consistently since Clinton was President. It means either business is good and employers aren't laying off, or the outsourcing of jobs has tapered off dramatically so that people aren't permanently losing jobs. Since we've seen a record 56 continuous months of job growth it's likely the economy is in fact picking up speed.
The price for West Texas Intermediate crude oil is continuing to slide and is approaching $80 a barrel. Wall Street banks are predicting it will go to $70 a barrel. One prominent analyst has even predicted $10 oil with the end of oil's stranglehold on the energy market. He's since backed off on this prediction but stands by his claim the oil will continue to fall. Of course what we're really talking about here is the small amount of oil that trades on the open market. They used to call this the spot market, as in "we've got a spot too much oil coming in from the wells today, what will you give us for it?" Most oil is firmly in the hands of the few Big Oil Companies, and they're not going to sell it cheap.
Gasoline on the other hand is subject to market forces. Gasoline makes up between 40 and 50% of a barrel of crude oil. But, the big money is in the much desired chemical fractions that make up only a couple of percent at most of each barrel. Gasoline and fuel oils (like diesel, kerosene and jet fuel) are basically waste products of refining to get the good stuff. If the tank farms are all full and the tankers moored offshore are full they have no choice but to cut the price to increase consumption. They used to just burn it, but since the Koch brothers haven't been able to kill the EPA that's not an option in the US.
So now you know why higher mileage standards are fought tooth and nail by the Republicans. Big oil could refine the extra fuel into other useful products but that's way more investment than simply buying elections. Most people have no idea how any of this works and you'll never hear about on the network news. The bulk of Americans polled think the country is headed in the wrong direction. The networks wanting to maintain the election horse race let people believe that this means everyone will vote Republican. In fact liberals are probably more upset than conservatives since they have better idea of what's happening.
New calculations of China's gross domestic economy show that based on actual buying power China has passed the US in realistic GDP. This isn't really surprising since China has more middle class than the US has people and they intend to move another 300 million from rural poverty into newly built cities over the next decade.
To put into perspective how China has been able to do this, they own over half the world's large construction cranes and consume over half the world's cement. China is building tens of thousands of miles of light rail and 250 mph bullet trains that run on thousands of miles of high speed track. At the same time they're eliminating passenger service from heavy rail lines allowing for more freight trains. The US of course has no bullet trains and runs its extremely limited passenger service on poorly maintained freight lines at speeds lower than Casey Jones operated his coal fired steam train on the Illinois Central in 1900.
The Republicans say we can't build any of the things that China builds in huge volume, but they promise to bring America back to the good old days. Casey Jones is rolling in his grave.
Twitter @BruceEnberg - I finally hit 666 followers today with the addition of Andrew Breitbart. Thanks to Satan for installing Wifi service in Andy's circle of Hell.