Comments not related to oil or natural gas production in this thread please. Thanks.
58 thoughts to “Open Thread Non-Petroleum, May 3, 2025”
So stocks have erased all their so called Liberation Day losses. This is how detached stocks have become from fundamentals.
All that matters is that between now and June 13th there is a record amount of corporate stock buybacks on deck to be repurchased.
QE and interest rates don’t matter. There is no such thing as Fed liquidity. It’s all about the ability for companies to borrow and repurchase their own stocks. Commercial banks are providing this liquidity via loans. Which central banks aren’t capable of doing.
When you realize there is no real backstop to all this. And it all comes down to the willingness of commercial banks to continue creating new loans. Then and only then do you understand the precariousness and full gravity of the situation.
Better have a growing supply of energy or else loans become increasingly more difficult to repay.
And to make solar and wind a viable option. One thing and one thing only has to happen. Which is an ever increasing amount of solar and wind. Otherwise solar and wind can’t retire the debts within the economy.
Oh yeah and China’s production of EV’s is going to come to a grinding halt soon do to lack of copper availability to build them.
If oil production slows due to low prices. While we have bottlenecks that result in the restriction of implementing solar and wind. It’s going to be disastrous for those who have loaned all the money out into existence.
I think you can still buy stocks. The credit spigot is still turned on. Stock will likely hit new all time highs.
I think you can still buy gold and land. As long as credit is still being extended and expanded every thing that has always worked will continue working.
But the moment credit fails to expand you better be holding dollars. Because dollars are what is needed to repay debts. And dollars become extremely scarce when the credit spigots are turned off.
I think it’s more important to just be aware so you can exit early.
Our entire global monetary system is collateral based lending. So it’s based on the ability to repay the loans. Our ability to repay loans is directly tied to energy usage. Our ability to create loans is directly tied to energy. No energy, no loans, no money.
You can also say less energy, less loans, less money.
The monetary system we all know and depend on to keep everything going doesn’t work in reverse. You can’t repay debts with less energy, less loans, less money.
Oil can go to $25 and stay there. $25 can become the ceiling not the floor of oil prices. And $25 oil can also be too expensive for the average American to afford. It’s what a prolonged deflationary depression would look like.
And it makes no difference who is extending the credit. Say central banks and their bank reserves became legal tender. And central banks created and extended all the loans into the economy instead of the commercial banks.
That changes nothing. Doesn’t make the debt within the economy any more payable.
Something else that should be pointed out. Many countries have sovereign wealth funds. Accumulated over decades.
These wealth funds are nothing more than accumulated Eurodollars on the balance sheets of banks. That money was loaned into existence. So there is in fact a bank liability somewhere that is owed. When credit fails to expand these sovereign wealth funds will be liquidated to acquire dollars to repay debts. Or since loans aren’t being extended you have to dip into your rainy day sovereign wealth fund to pay for stuff instead of just borrowing money.
He who controls the money supply controls everything except the ability of loans to be repaid. That’s the one thing money creators can’t control. The ability to repay debt is where everything breaks down.
It becomes, he who creates the money or loans decides to no longer do so because the loans don’t get repaid.
If say China was unable to borrow money. How long does their sovereign wealth funds and accumulated dollar reserves last? Without the ability to borrow the answer is not very long.
Whatever wealth they thought they had goes up in smoke real quick.
Let’s face it we were already in a dollar shortage restricting trade exacerbates the problem. The bond blowout over tariffs revealed how fragile the market is. Everything could happen very quickly and too fast to get out.
I’ve read Apollo’s thesis a week or so ago. While I agree with much of what they are saying. I view the outcome a little differently.
Stocks up, bonds down. The worst the data becomes bonds go lower stocks go up. Bond yields going lower and bond prices going up for anybody that might not understand what I’m saying. And a lot of it is because of the perceived government and central bank response. While we both know there is no liquidity being created at the Fed but that is not how the market responds. It responds by creating the liquidity that the Fed can’t.
So until credit to do buybacks get shut off money will keep chasing stocks.
If credit does go to shit here in the next few months. I don’t see stagflation lasting very long. Mass unemployment will take care of any price pressures.
We already know a record amount of stock buybacks are on deck to be repurchased between now and June 13th. Something truly has to break in credit to shutdown the stock ramping mechanism that pulls in the CTA’s and carry traders chasing yields.
Not only that but the trading desk at banks that handle these stocks repurchases. These banks front run the buybacks to get in front of all the stock buybacks.
So in my opinion I think we are going to see a record amount of inflows into stocks. For absolutely no good reason but that doesn’t matter. It’s going to happen anyway.
HHH
Thanks.
In the U.K. shops have been closing down for years, poorer areas affected the most. So many charity shops or pound shops.
Taxes are so high.
20% basic rate, 40% earnings over £50,000, 8% N.I. 20% VAT. Council tax £2,000 to £3,000 for most people per year.
Roads are full of pot holes, libraries closing, paths full of weeds, bin men on strike.
Government debt increasing and local councils going bankrupt
Thanks for that insight. I’ve always said that as dissipative structures collapse it’s the outer fringe that is first become disorganized. Similar things are happening in the US in rural areas because there is less incentive to maintain low volume infrastructure like roads and stores. Tariffs unfortunately are going to hit small businesses harder than large corporations. Small business represents 80% of employment but do not have the ability to get the cash the need to stay in business. The summer looks more and more dire even if the administration blinks.
Your suggestion that transportation infrastructure maintenance in rural areas of the US is indicative of dissipative structure collapse is inaccurate.
The US transportation infrastructure system actually has some of the best data available of built infrastructure assets. The USDOT has required each state in the US to submit a Transportation Asset Management Plan for the NHS portion of their transportation infrastructure since 2018. In addition, there are various national data sets available through USDOT, such as that maintained for highway bridges in the US.
Read the plans. Analyze the data. Entropy is obviously common to all, but there are dramatic variations between states. You might cherry pick a state like Iowa as supporting your case, but will not find a uniform trend at the larger scale. Urban civil infrastructure is actually dramatically more costly than rural infrastructure, and faces significant maintenance challenges as well.
T Hill
Dissipative structure collapse, best data.
Do you mean pot holes 😀
Government are useless, they don’t repair pot holes unless a citizen reports it, when they do repair it they have no data on how long it stayed repaired.
Numerous times people report a dangerous hole to be told it has been repaired, so we have to take photos of the hole. The highways people then fill in a form to get the contractor to repair it again. Nobody checks to see if the repair lasts.
Actually seeing rich areas a poor areas high streets have been decimated in poo areas, in rich areas such as Bond Street, the jewellery shops and high end clothes shops are all still there. The roads and pavement are in far better condition in the rich areas than the poor. It is what I see with my own eyes.
The real problem with American roads is that many of them are a bad investment that aren’t worth fixing. In many cases roads are destructive, reducing the potential value of urban land.
American governments tend to use false arguments like exaggerated demand projections and calculations of time saved by commuters as the “value” of road widening. Adding road capacity that doesn’t increase tax revenues is a doomed proposition, because every expansion increases long term public liabilities.
Most money is still poured into useless capacity expansion instead of maintenance. A moratorium on more new roads would go a long way towards dealing with the decay in the existing network.
Global Food Price Index rises in April [red line] on higher cereal, dairy and meat prices. And tariffs will be inflationary for food?
Trump’s import taxes should only bring inflation to America. If other countries choose to reciprocate by taxing American cereals, they will probably also look for other sources.
Survivalist, glad to see your survival anti-government bunker is ok.
Jokes…. I like your posts.
Many years ago you attacked me for suggesting the FBI claimed COVID came out of a Virology LAB. If I remember, Hickory was in there insulting me too!!!!!
Remember, the FBI has an entire division of experts on BIO-Terrorism. The idea that these professionals are all corrupt is preposterous!!!!!
NOW CHINA, is claiming it didn’t come from the Wuhan Market, but from the USA.
The animal wuhan food market hypothesis is so bad that CHINA isn’t backing it!!!!
ANY COMMENTS from your anti-government bunker?????
I don’t think that China’s claim that the US is responsible for the Covid outbreak has any relevance to whether or not it originated at a Wuhan meat market.
It’s political tit for tat.
You could easily conclude from this claim that they are defending the meat market AND the lab by blaming the US.
It isn’t unreasonable to suspect the lab is the source. As of today I don’t think anyone who has enough hard data to say is likely to risk their life by saying so. I wouldn’t want to tangle with any government on an issue like that, Chinese, American or Eskimo. Any of them would kill to keep a secret like that.
On the other hand those meat markets dealing in “wild” animals are truly dangerous places on many levels.
Agreed. Crop failure will be the initial mass killer of humans following from ongoing global warming.
Don’t forget though, regardless of the year to year weather, that billions of living people owe their existence to natural gas-derived fertilizers.
\
Independent of weather-induced crop failure, the lack of fertilizers could lead to the deaths of billions of people.
…and those deaths could equally result from mass migration issues as well as starvation. Crop failure has historically been the primary cause of mass migration.
What mass migration issues? Exposure, exploitation, criminal violence, border “protection”…
The key early warning sign for famine is when herds start shrinking. For example in Africa aid agencies look out for sudden dips in meat prices which can indicate the herders are slaughtering their herds because they can’t feed them any more.
Less than a quarter of cereal production is eaten by people. If crops fail meat prices will skyrocket and people will be forced to eat a lot less of it. But that doesn’t mean starvation.
Alim:
I think it depends on where you are. A 10 or 20 percent drop in grain production in the US, or even China, will be more of an inconvenience than a famine. In sub-Sahara Africa or some parts of east Asia and Latin America it could very well mean famine and mass exodus.
Letters of Credit were a major issue in 2008-2009 because banks didn’t trust the collateral that businesses were putting up to secure the debt. This had a tremendous impact on trade since ships can’t be loaded without credit in place. Market conditions can also influence whether Letters of Credit are acceptable.
Absolutely, it’s a little known fact that 2008 started with a couple of banks in France out of all places.
They were unable to properly price the collateral they had on hand and it snowballed into what we all know is the GFC.
Can it happen again? Will it happen again? Of course it will. But nobody can pier into the inter workings of what actually goes on in the monetary system. Because we already have decentralized money. It’s called the Eurodollar.
So while we know for sure it’s coming we can’t time it. We can only look for clear signs in the monetary system. Like negative interest rate swap spreads and high demand for safe a liquid assets. Things like the gold to copper ratio.
Yes all these things are pointing towards a very negative outcome coming soon. But that doesn’t necessarily mean it happens this year. It might but no guarantees.
And of course as the energy supply shrinks by even just a little bit the likelihood of a bad outcome goes up dramatically.
Falling oil prices are a very bad sign. That in itself can lead to a contraction in the energy supply.
“The world has not hit the brakes on methane emissions, a powerful driver of climate change. More than 150 nations have pledged to slash by 30% this decade under a global methane pledge, but new research shows global methane emissions over the past five years have risen faster than ever.”
The rise of end times fascism
Naomi Klein and Astra Taylor
The startup country contingent is clearly foreseeing a future marked by shocks, scarcity and collapse. Their high-tech private domains are essentially fortressed escape pods, designed for the select few to take advantage of every possible luxury and opportunity for human optimization, giving them and their children an edge in an increasingly barbarous future. To put it bluntly, the most powerful people in the world are preparing for the end of the world, an end they themselves are frenetically accelerating.
That is not so far away from the more mass-market vision of fortressed nations that has gripped the hard right globally, from Italy to Israel, Australia to the United States: in a time of ceaseless peril, openly supremacist movements in these countries are positioning their relatively wealthy states as armed bunkers. These bunkers are brutal in their determination to expel and imprison unwanted humans (even if that requires indefinite confinement in extra-national penal colonies from Manus Island to Guantánamo Bay) and equally ruthless in their willingness to violently claim the land and resources (water, energy, critical minerals) they deem necessary to weather the coming shocks.
Though it builds on enduring rightwing tendencies … we simply have not faced such a powerful apocalyptic strain in government before
Interestingly, at a time when previously secular Silicon Valley elites are suddenly finding Jesus, it is noteworthy that both of these visions – the priority-pass corporate state and the mass-market bunker nation – share a great deal in common with the Christian fundamentalist interpretation of the biblical Rapture, when the faithful will supposedly be lifted up to a golden city in heaven, while the damned are left to endure an apocalyptic final battle down here on earth.
If we are to meet our critical moment in history, we need to reckon with the reality that we are not up against adversaries we have seen before. We are up against end times fascism.
*******
Listen to Steve Bannon’s daily podcast – which bills itself as Maga’s premier media outlet – and you will be barraged with a singular message: the world is going to hell, the infidels are breaching the barricades, and a final battle is coming. Be prepared. The prepper message becomes particularly pronounced when Bannon switches to hawking his advertisers’ products. Buy Birch Gold, Bannon tells his audience, because the over-leveraged US economy is going to crash and you can’t trust the banks. Stock up on ready-to-eat meals from My Patriot Supply. Sharpen your target practice using a laser-guided at-home system. The last thing you would want to do is depend on the government during a disaster, he reminds listeners (left unsaid: especially now that the Doge boys are selling off the government for parts).
End times fascism is a darkly festive fatalism – a final refuge for those who find it easier to celebrate destruction than imagine living without supremacy
Bannon doesn’t only urge his audience to make their own bunkers, of course. He also advances a vision of the United States as a bunker in its own right, one in which Ice agents stalk the streets, workplaces and campuses, disappearing those deemed enemies of US policy and interests. The bunkered nation lies at the heart of the Maga agenda, and of end times fascism. Inside its logic, the first job is to harden national borders and expunge all enemies, foreign and domestic. This ugly work is now well under way, with the Trump administration, enabled by the supreme court, having invoked the Alien Enemies Act to deport hundreds of Venezuelan immigrants to Cecot, the now infamous mega-prison in El Salvador.
I don’t think this quote clarifies that this apocalyptic vision is highly unrealistic. It’s a classic case of plantation economics and scare tactics, made confusing by the fact that many elite believe their own misinformation.
I remember her writing a while back that she went to a conference at a far-right organization (Heartland, or AEI, I forget) where the speakers argued that dealing properly with climate change would require enormously expensive and disruptive projects, and that the left wanted to do these things for bad reasons. Sadly, she believed the nonsense about climate change mitigation destroying the economy, not recognizing that these hucksters take the approach that they have to mostly internalize their own nonsense in order to effectively spread their propaganda.
I’ve known some very wealthy, and I agree with Hemingway:
“The rich are different from you and I. They have more money…”.
I’ve noticed one sad similarity: they’re prone to believing really stupid stuff that supports their narrow worldview. For instance, I had one tell me with great sincerity that outside agitators (apparently Russian) had fomented the 1968 Democratic convention riots.
Another classic example: the owner of the Chicago Tribune, Col. McCormick, who believed that commie sympathizers in the US government were holding back Chiang Kai Shek from coming back from Taiwan and retaking China from Mao.
And, of course, the Kochs, who I think are sincere about their loony beliefs, started by their father, who helped found the John Birch Society.
“The John Birch Society (JBS) was a radical right-wing organisation founded by candy manufacturer Robert W. Welch Jr in 1958 as a last line of defense against the massively ongoing, clandestine Communist takeover of the United States. An early book by Welch, The Politician, became controversial after it became widely known that an early manuscript included the accusation that President Dwight Eisenhower was a “conscious, dedicated agent of the Communist conspiracy.”
It’s basically the KKK but with a thin, stringy veneer of political theory (read: more fears of fluorinated water controlling their brains). They basically started libertarianism, which took the cult-ish route of hiding the core tenets from newcomers.
Oil baron Fred C. Koch was also among the original members.”
McDonald’s came out with new chicken strips based on the McCrispy chicken sandwiches. Has anyone here tried them yet? All the reviews I’m seeing are mixed, and I can understand why after trying them.
I ordered the 4 strips, not the meal, just the strips. They came to $6, which I thought was pretty expensive. The meals are $10 or $11 depending on if you want 3 or 4 strips. Again, pretty expensive.
When I opened my box of 4 strips, I noticed they had a nice smell similar to a fully cooked rotisserie chicken from the grocery store. The taste was decent, but nothing remarkable. I found the biggest issue to be the quality of the chicken versus the price paid did not seem adequate. The chicken seemed rubbery and stringy, and if these sit in the bag for a long time (like if you order a McDelivery) I can see the chicken becoming quite hard.
I doubt I would order these again, except I guess if there’s some sort of free coupon. They just aren’t worth it compared to what you can get at places that specialize in chicken strips like Raising Cane’s. Also, the new chili dipping sauce you can get for these was interesting, slightly spicy, slightly sweet, but again not really worth the hype.
INDIA ALLOWS LONG-TERM COAL CONTRACTS AS IT BOOSTS POWER CAPACITY
“India’s federal government eased on Wednesday coal supply restrictions, allowing independent power producers to bid and procure coal supply at auctions for periods of between 1 and 25 years.
Under the new measure passed by the cabinet, producers can bid for coal for periods of up to 25 years at a premium above the notified price at auctions. The power plants will also have the flexibility to sell the electricity as per their choice. The new provision is expected to incentivize domestic power generators to better plan new coal-fired capacity, according to India’s Ministry of Coal. The policy “caters to the dynamic coal requirement of the Power Sector,” the ministry noted. India, just like China, is not giving up on coal to meet its surging power demand.”
Sure. But that problem is mostly fixed: battery prices have fallen sharply, and charging points are expanding (and, of course, EVs have the unique advantage of being able to charge at home – fast, cheap and convenient).
We’re already at peak ICE: In the largest car market, China, EV sales are at 50%, and they’re growing fast elsewhere.
It’s no longer realistic to argue that liquid fuel (let alone fossil fuel) is needed for more than maybe 10% of land transportation.
Finally, it’s nice to be clear that EVs are simply better vehicles: quieter, faster, cleaner, easier and cheaper to operate and maintain, and cheaper than ICEs overall when we look at Total Cost of Ownership.
Nicolai —
Right, as I have said many times here, oil isn’t a great source of energy. It’s much too expensive to compete with coal and gas, let alone solar or wind. So it is rarely used in the competitive markets like industrial heat or electricity generation.
But oil is great for storing energy in a moving vehicle. Oil is part of the energy storage business, not the energy business.
Well, it used to be great for energy storage. Now it’s losing that market. As you say above, you’ve noted many times the markets it’s lost: the lighting market in the 1890’s; electrical generation 50 years ago; etc., etc.
Now it’s land transportation. Fairly soon after that it will be water transportation, aviation, etc. Petrochemicals will remain, at least for the foreseeable future.
Thoughts, which is better, a 6 mm bolt or a 1/4” bolt?
or
A 4000 lb EV moving one 200lb person two miles to get two six packs of beer or one 3600 lb ICE moving one 200 lb person 2 miles to get one large mushroom, onion, sausage pizza and greek salad?
Don’t get me wrong: I think efficiency is great. I love me some efficiency. Last time I looked, the average number of people in light vehicles in the US was only 1.2. That’s just sad. And, like you, I don’t like SUVs much (expensive, polluting, dangerous, unattractive, awkward to drive…).
It certainly points out how *relatively* easy it would be to adapt to an oil shock: just raise the average number of people to 2.4 and you cut fuel consumption in half. Plus, move people from 12MPG to 50MPG, and cut fuel in half again. But…that would be a serious inconvenience and, in the absence of an oil shock, politically it would be very, very hard. Far easier to go to EVs.
Historically efficiency has been essential: imagine if the US’ average fuel efficiency had stayed at the 12MPG of 1970. The US used about 10 Mbpd for passenger transportation in the 1970’s. Now it uses a bit less oil for passenger transportation, and the average MPG is about 23. Twice as many miles are driven now, with about the same amount of oil. That’s an enormous reduction in oil consumption.
But currently, light vehicle efficiency is a red herring, a distraction. A good thing to pursue in parallel with EVs, but not the most important thing.
$.02 is that the most significant adaptation to declining oil supplies will be less personal vehicle use and ownership than swapping EV for ICEV. I look at miles per year going back in our lifetime. Life wasn’t worse driving less. Fun could still be had with 75 hp compared to 200 hp today. The issue is unnecessary energy expenditures not the type of motor putting that energy into motion.
Btw suvs can be great. The issue is expecting them to go 80mph down the freeway. I’d be perfectly happy with a 75 hp wagon never going over 60. 35mph is a good automobile speed.
Sure – a lot of driving miles are of pretty marginal value, IMO.
the most significant adaptation to declining oil supplies will be less personal vehicle use and ownership than swapping EV for ICEV.
I would guess that you’re assuming that declining oil supplies will cause some kind of general recession/depression. But EVs eliminate 70% of oil consumption, and there are other substitutes for the other 30%, so…why?
Even at 30% efficiency the internal combustion engine is far more powerful than a battery motor.
Batteries fail with extreme cold or heat, battery power would have to increase by 20 times to complete with the power of diesel or petrol. That is why there are no large batter planes or ships.
This article was not very accurate when written. For example, it claims that only ICEs can provide very large propulsion systems. Well, there are container ships with 80 megawatt electric motors (aka 107,000 horsepower).
And, it’s from 2017 and is out of date on battery costs, energy densities, discharge life, temperature specs, etc.
Finally, your comment uses the word power when it is actually discussing energy. Electric motors are more powerful, pound for pound, than ICEs.
“For example, it claims that only ICEs can provide very large propulsion systems. Well, there are container ships with 80 megawatt electric motors (aka 107,000 horsepower).”
Really. How do you think, from your narrow viewpoint, that the container ship produces the electricity to power the electric motor? I guess it has a solar panel on the bow and a LiPo battery.
Had you taken tour head out of a dark place you would have seen an exhaust stack on the container ship, and others, which is connected to a humungus diesel engine. Large vessels are diesel electric. The propeller drive shaft is not directly coupled to the diesel engine(s). Some can run on boil off gases – eg LNG, ethane carriers.
So stocks have erased all their so called Liberation Day losses. This is how detached stocks have become from fundamentals.
All that matters is that between now and June 13th there is a record amount of corporate stock buybacks on deck to be repurchased.
QE and interest rates don’t matter. There is no such thing as Fed liquidity. It’s all about the ability for companies to borrow and repurchase their own stocks. Commercial banks are providing this liquidity via loans. Which central banks aren’t capable of doing.
When you realize there is no real backstop to all this. And it all comes down to the willingness of commercial banks to continue creating new loans. Then and only then do you understand the precariousness and full gravity of the situation.
Better have a growing supply of energy or else loans become increasingly more difficult to repay.
And to make solar and wind a viable option. One thing and one thing only has to happen. Which is an ever increasing amount of solar and wind. Otherwise solar and wind can’t retire the debts within the economy.
Oh yeah and China’s production of EV’s is going to come to a grinding halt soon do to lack of copper availability to build them.
If oil production slows due to low prices. While we have bottlenecks that result in the restriction of implementing solar and wind. It’s going to be disastrous for those who have loaned all the money out into existence.
HHH
What would you buy at this time?
Property? Land? Gold?
Loadsofoil,
I think you can still buy stocks. The credit spigot is still turned on. Stock will likely hit new all time highs.
I think you can still buy gold and land. As long as credit is still being extended and expanded every thing that has always worked will continue working.
But the moment credit fails to expand you better be holding dollars. Because dollars are what is needed to repay debts. And dollars become extremely scarce when the credit spigots are turned off.
I think it’s more important to just be aware so you can exit early.
Our entire global monetary system is collateral based lending. So it’s based on the ability to repay the loans. Our ability to repay loans is directly tied to energy usage. Our ability to create loans is directly tied to energy. No energy, no loans, no money.
You can also say less energy, less loans, less money.
The monetary system we all know and depend on to keep everything going doesn’t work in reverse. You can’t repay debts with less energy, less loans, less money.
Oil can go to $25 and stay there. $25 can become the ceiling not the floor of oil prices. And $25 oil can also be too expensive for the average American to afford. It’s what a prolonged deflationary depression would look like.
And it makes no difference who is extending the credit. Say central banks and their bank reserves became legal tender. And central banks created and extended all the loans into the economy instead of the commercial banks.
That changes nothing. Doesn’t make the debt within the economy any more payable.
Something else that should be pointed out. Many countries have sovereign wealth funds. Accumulated over decades.
These wealth funds are nothing more than accumulated Eurodollars on the balance sheets of banks. That money was loaned into existence. So there is in fact a bank liability somewhere that is owed. When credit fails to expand these sovereign wealth funds will be liquidated to acquire dollars to repay debts. Or since loans aren’t being extended you have to dip into your rainy day sovereign wealth fund to pay for stuff instead of just borrowing money.
He who controls the money supply controls everything except the ability of loans to be repaid. That’s the one thing money creators can’t control. The ability to repay debt is where everything breaks down.
It becomes, he who creates the money or loans decides to no longer do so because the loans don’t get repaid.
If say China was unable to borrow money. How long does their sovereign wealth funds and accumulated dollar reserves last? Without the ability to borrow the answer is not very long.
Whatever wealth they thought they had goes up in smoke real quick.
HHH
Apollo Asset Management thinks it hits in June because tariffs are the final straw that breaks the proverbial camel.
https://www.apolloacademy.com/wp-content/uploads/2025/04/042625-ConsumerandFirms_v2.pdf
Let’s face it we were already in a dollar shortage restricting trade exacerbates the problem. The bond blowout over tariffs revealed how fragile the market is. Everything could happen very quickly and too fast to get out.
I’ve read Apollo’s thesis a week or so ago. While I agree with much of what they are saying. I view the outcome a little differently.
Stocks up, bonds down. The worst the data becomes bonds go lower stocks go up. Bond yields going lower and bond prices going up for anybody that might not understand what I’m saying. And a lot of it is because of the perceived government and central bank response. While we both know there is no liquidity being created at the Fed but that is not how the market responds. It responds by creating the liquidity that the Fed can’t.
So until credit to do buybacks get shut off money will keep chasing stocks.
If credit does go to shit here in the next few months. I don’t see stagflation lasting very long. Mass unemployment will take care of any price pressures.
We already know a record amount of stock buybacks are on deck to be repurchased between now and June 13th. Something truly has to break in credit to shutdown the stock ramping mechanism that pulls in the CTA’s and carry traders chasing yields.
Not only that but the trading desk at banks that handle these stocks repurchases. These banks front run the buybacks to get in front of all the stock buybacks.
So in my opinion I think we are going to see a record amount of inflows into stocks. For absolutely no good reason but that doesn’t matter. It’s going to happen anyway.
HHH
Thanks.
In the U.K. shops have been closing down for years, poorer areas affected the most. So many charity shops or pound shops.
Taxes are so high.
20% basic rate, 40% earnings over £50,000, 8% N.I. 20% VAT. Council tax £2,000 to £3,000 for most people per year.
Roads are full of pot holes, libraries closing, paths full of weeds, bin men on strike.
Government debt increasing and local councils going bankrupt
Where is all the money going?
Loadsofoil
Thanks for that insight. I’ve always said that as dissipative structures collapse it’s the outer fringe that is first become disorganized. Similar things are happening in the US in rural areas because there is less incentive to maintain low volume infrastructure like roads and stores. Tariffs unfortunately are going to hit small businesses harder than large corporations. Small business represents 80% of employment but do not have the ability to get the cash the need to stay in business. The summer looks more and more dire even if the administration blinks.
@JT
Your suggestion that transportation infrastructure maintenance in rural areas of the US is indicative of dissipative structure collapse is inaccurate.
The US transportation infrastructure system actually has some of the best data available of built infrastructure assets. The USDOT has required each state in the US to submit a Transportation Asset Management Plan for the NHS portion of their transportation infrastructure since 2018. In addition, there are various national data sets available through USDOT, such as that maintained for highway bridges in the US.
Read the plans. Analyze the data. Entropy is obviously common to all, but there are dramatic variations between states. You might cherry pick a state like Iowa as supporting your case, but will not find a uniform trend at the larger scale. Urban civil infrastructure is actually dramatically more costly than rural infrastructure, and faces significant maintenance challenges as well.
T Hill
Dissipative structure collapse, best data.
Do you mean pot holes 😀
Government are useless, they don’t repair pot holes unless a citizen reports it, when they do repair it they have no data on how long it stayed repaired.
Numerous times people report a dangerous hole to be told it has been repaired, so we have to take photos of the hole. The highways people then fill in a form to get the contractor to repair it again. Nobody checks to see if the repair lasts.
Actually seeing rich areas a poor areas high streets have been decimated in poo areas, in rich areas such as Bond Street, the jewellery shops and high end clothes shops are all still there. The roads and pavement are in far better condition in the rich areas than the poor. It is what I see with my own eyes.
The real problem with American roads is that many of them are a bad investment that aren’t worth fixing. In many cases roads are destructive, reducing the potential value of urban land.
American governments tend to use false arguments like exaggerated demand projections and calculations of time saved by commuters as the “value” of road widening. Adding road capacity that doesn’t increase tax revenues is a doomed proposition, because every expansion increases long term public liabilities.
Most money is still poured into useless capacity expansion instead of maintenance. A moratorium on more new roads would go a long way towards dealing with the decay in the existing network.
Global Food Price Index rises in April [red line] on higher cereal, dairy and meat prices. And tariffs will be inflationary for food?
Trump’s import taxes should only bring inflation to America. If other countries choose to reciprocate by taxing American cereals, they will probably also look for other sources.
The biggest threat to human survival is the sustainability of key crops under the stresses of rising temperatures and changing rainfall patterns.
https://collapse2050.substack.com/p/how-to-collapse-mass-starvation?utm_campaign=post&utm_medium=web
Probably gonna suck;
Maybe it’ll be ok.
https://www.dailymail.co.uk/health/article-14665703/China-finally-reveals-Covid-originated-accused-lab-leak-cover-up.html
Survivalist, glad to see your survival anti-government bunker is ok.
Jokes…. I like your posts.
Many years ago you attacked me for suggesting the FBI claimed COVID came out of a Virology LAB. If I remember, Hickory was in there insulting me too!!!!!
Remember, the FBI has an entire division of experts on BIO-Terrorism. The idea that these professionals are all corrupt is preposterous!!!!!
NOW CHINA, is claiming it didn’t come from the Wuhan Market, but from the USA.
The animal wuhan food market hypothesis is so bad that CHINA isn’t backing it!!!!
ANY COMMENTS from your anti-government bunker?????
I don’t think that China’s claim that the US is responsible for the Covid outbreak has any relevance to whether or not it originated at a Wuhan meat market.
It’s political tit for tat.
You could easily conclude from this claim that they are defending the meat market AND the lab by blaming the US.
Very obviously the elite (Xi?) in China does not want COVID on his legacy.
I just think it is interesting that they are no longer saying it came from the market.
My amatuer and unqualified opinion based on the evidence I have seen someone was playing around with that thing.
You wouldn’t get that “lucky” waiting for Natural Selection on such a short time scale right near a VIROLOGY LAB
Please note the CIA now agrees with the FBIs assessment
thanks!
I thought they built the Virology Lab by the Food Market for PLAUSIBLE DENIABILITY ( A CIA cold war trick ).
They have armed military personal standing all around that place. It is a military facility.
My speculation.
It isn’t unreasonable to suspect the lab is the source. As of today I don’t think anyone who has enough hard data to say is likely to risk their life by saying so. I wouldn’t want to tangle with any government on an issue like that, Chinese, American or Eskimo. Any of them would kill to keep a secret like that.
On the other hand those meat markets dealing in “wild” animals are truly dangerous places on many levels.
Agreed. Crop failure will be the initial mass killer of humans following from ongoing global warming.
Don’t forget though, regardless of the year to year weather, that billions of living people owe their existence to natural gas-derived fertilizers.
\
Independent of weather-induced crop failure, the lack of fertilizers could lead to the deaths of billions of people.
…and those deaths could equally result from mass migration issues as well as starvation. Crop failure has historically been the primary cause of mass migration.
What mass migration issues? Exposure, exploitation, criminal violence, border “protection”…
Jjhman
We already got mass migration
https://www.bbc.co.uk/news/articles/c5y87yp75ego
Loadsofoil
I didn’t mean to imply otherwise but I don’t think we are seeing anything like the rate of violence that is likely to come.
The key early warning sign for famine is when herds start shrinking. For example in Africa aid agencies look out for sudden dips in meat prices which can indicate the herders are slaughtering their herds because they can’t feed them any more.
Less than a quarter of cereal production is eaten by people. If crops fail meat prices will skyrocket and people will be forced to eat a lot less of it. But that doesn’t mean starvation.
Alim:
I think it depends on where you are. A 10 or 20 percent drop in grain production in the US, or even China, will be more of an inconvenience than a famine. In sub-Sahara Africa or some parts of east Asia and Latin America it could very well mean famine and mass exodus.
JJHMAN: Good point. On the other hand, poor countries use less FF inputs. Of course rainfall changes are already causing problems in Africa.
Alim
I think the changes in weather that you identify will get worse and the resultant problem will also get worse.
DANGEROUSLY HOT IN ALASKA? NEW WARNINGS SHOW CLIMATE CHANGE IMPACT.
National Weather Service to launch first heat advisories in Fairbanks and Juneau this summer in response to climate change.
Letters of Credit were a major issue in 2008-2009 because banks didn’t trust the collateral that businesses were putting up to secure the debt. This had a tremendous impact on trade since ships can’t be loaded without credit in place. Market conditions can also influence whether Letters of Credit are acceptable.
Jt,
Absolutely, it’s a little known fact that 2008 started with a couple of banks in France out of all places.
They were unable to properly price the collateral they had on hand and it snowballed into what we all know is the GFC.
Can it happen again? Will it happen again? Of course it will. But nobody can pier into the inter workings of what actually goes on in the monetary system. Because we already have decentralized money. It’s called the Eurodollar.
So while we know for sure it’s coming we can’t time it. We can only look for clear signs in the monetary system. Like negative interest rate swap spreads and high demand for safe a liquid assets. Things like the gold to copper ratio.
Yes all these things are pointing towards a very negative outcome coming soon. But that doesn’t necessarily mean it happens this year. It might but no guarantees.
And of course as the energy supply shrinks by even just a little bit the likelihood of a bad outcome goes up dramatically.
Falling oil prices are a very bad sign. That in itself can lead to a contraction in the energy supply.
HHH
I agree oil prices signal a bigger problem. Let’s see what happens.
Will No One Say It?
Published by Tom Sullivan on May 5, 2025
“The president is a cognitively impaired idiot”
https://www.nytimes.com/2025/05/04/world/europe/england-elections-farage-reform.html?unlocked_article_code=1.E08.mcwu.goe3tJVnJm9a&smid=url-share
I wonder if / when that can happen in the US?
rgds
WP
While we babble, CO2 level keeps climbing.
Latest Daily CO2
May. 4, 2025 = 430.89 ppm
May. 4, 2024 = 427.89 ppm
1 Year Change = 3.00 ppm (0.70%)
Meanwhile,
METHANE EMISSIONS ARE RISING FASTER THAN EVER
“The world has not hit the brakes on methane emissions, a powerful driver of climate change. More than 150 nations have pledged to slash by 30% this decade under a global methane pledge, but new research shows global methane emissions over the past five years have risen faster than ever.”
https://news.stanford.edu/stories/2024/09/methane-emissions-are-rising-faster-than-ever
The rise of end times fascism
Naomi Klein and Astra Taylor
The startup country contingent is clearly foreseeing a future marked by shocks, scarcity and collapse. Their high-tech private domains are essentially fortressed escape pods, designed for the select few to take advantage of every possible luxury and opportunity for human optimization, giving them and their children an edge in an increasingly barbarous future. To put it bluntly, the most powerful people in the world are preparing for the end of the world, an end they themselves are frenetically accelerating.
That is not so far away from the more mass-market vision of fortressed nations that has gripped the hard right globally, from Italy to Israel, Australia to the United States: in a time of ceaseless peril, openly supremacist movements in these countries are positioning their relatively wealthy states as armed bunkers. These bunkers are brutal in their determination to expel and imprison unwanted humans (even if that requires indefinite confinement in extra-national penal colonies from Manus Island to Guantánamo Bay) and equally ruthless in their willingness to violently claim the land and resources (water, energy, critical minerals) they deem necessary to weather the coming shocks.
Though it builds on enduring rightwing tendencies … we simply have not faced such a powerful apocalyptic strain in government before
Interestingly, at a time when previously secular Silicon Valley elites are suddenly finding Jesus, it is noteworthy that both of these visions – the priority-pass corporate state and the mass-market bunker nation – share a great deal in common with the Christian fundamentalist interpretation of the biblical Rapture, when the faithful will supposedly be lifted up to a golden city in heaven, while the damned are left to endure an apocalyptic final battle down here on earth.
If we are to meet our critical moment in history, we need to reckon with the reality that we are not up against adversaries we have seen before. We are up against end times fascism.
*******
Listen to Steve Bannon’s daily podcast – which bills itself as Maga’s premier media outlet – and you will be barraged with a singular message: the world is going to hell, the infidels are breaching the barricades, and a final battle is coming. Be prepared. The prepper message becomes particularly pronounced when Bannon switches to hawking his advertisers’ products. Buy Birch Gold, Bannon tells his audience, because the over-leveraged US economy is going to crash and you can’t trust the banks. Stock up on ready-to-eat meals from My Patriot Supply. Sharpen your target practice using a laser-guided at-home system. The last thing you would want to do is depend on the government during a disaster, he reminds listeners (left unsaid: especially now that the Doge boys are selling off the government for parts).
End times fascism is a darkly festive fatalism – a final refuge for those who find it easier to celebrate destruction than imagine living without supremacy
Bannon doesn’t only urge his audience to make their own bunkers, of course. He also advances a vision of the United States as a bunker in its own right, one in which Ice agents stalk the streets, workplaces and campuses, disappearing those deemed enemies of US policy and interests. The bunkered nation lies at the heart of the Maga agenda, and of end times fascism. Inside its logic, the first job is to harden national borders and expunge all enemies, foreign and domestic. This ugly work is now well under way, with the Trump administration, enabled by the supreme court, having invoked the Alien Enemies Act to deport hundreds of Venezuelan immigrants to Cecot, the now infamous mega-prison in El Salvador.
https://www.theguardian.com/us-news/ng-interactive/2025/apr/13/end-times-fascism-far-right-trump-musk
Naomi Klein on Trump, Musk, Far Right & “End Times Fascism”
https://www.youtube.com/watch?v=XtYSyb6fCxo
What binds Trump and the other oligarchs and tech bros is cuthroat greed and a complete lack of compassion for humanity in general.
What binds the Maga Nation non oligarchs and tech tyrants is complete ignorance and misguided blind faith.
Naomi Klein is one of the sharpest minds in today’s literary world
Indeed, Naomi Klein is another one of those excellent Canadian authors (and a social activist).
“When a democracy is sick, fascism comes to its bedside, but it is not to inquire about its health.”
Albert Camus.
Behar: “Why is [Trump] so fixated on you?”
Joe Biden: “I beat him.”
Well, she’s sharp sometimes.
I don’t think this quote clarifies that this apocalyptic vision is highly unrealistic. It’s a classic case of plantation economics and scare tactics, made confusing by the fact that many elite believe their own misinformation.
I remember her writing a while back that she went to a conference at a far-right organization (Heartland, or AEI, I forget) where the speakers argued that dealing properly with climate change would require enormously expensive and disruptive projects, and that the left wanted to do these things for bad reasons. Sadly, she believed the nonsense about climate change mitigation destroying the economy, not recognizing that these hucksters take the approach that they have to mostly internalize their own nonsense in order to effectively spread their propaganda.
I’ve known some very wealthy, and I agree with Hemingway:
“The rich are different from you and I. They have more money…”.
I’ve noticed one sad similarity: they’re prone to believing really stupid stuff that supports their narrow worldview. For instance, I had one tell me with great sincerity that outside agitators (apparently Russian) had fomented the 1968 Democratic convention riots.
Another classic example: the owner of the Chicago Tribune, Col. McCormick, who believed that commie sympathizers in the US government were holding back Chiang Kai Shek from coming back from Taiwan and retaking China from Mao.
And, of course, the Kochs, who I think are sincere about their loony beliefs, started by their father, who helped found the John Birch Society.
“The John Birch Society (JBS) was a radical right-wing organisation founded by candy manufacturer Robert W. Welch Jr in 1958 as a last line of defense against the massively ongoing, clandestine Communist takeover of the United States. An early book by Welch, The Politician, became controversial after it became widely known that an early manuscript included the accusation that President Dwight Eisenhower was a “conscious, dedicated agent of the Communist conspiracy.”
It’s basically the KKK but with a thin, stringy veneer of political theory (read: more fears of fluorinated water controlling their brains). They basically started libertarianism, which took the cult-ish route of hiding the core tenets from newcomers.
Oil baron Fred C. Koch was also among the original members.”
https://rationalwiki.org/wiki/John_Birch_Society
McDonald’s came out with new chicken strips based on the McCrispy chicken sandwiches. Has anyone here tried them yet? All the reviews I’m seeing are mixed, and I can understand why after trying them.
I ordered the 4 strips, not the meal, just the strips. They came to $6, which I thought was pretty expensive. The meals are $10 or $11 depending on if you want 3 or 4 strips. Again, pretty expensive.
When I opened my box of 4 strips, I noticed they had a nice smell similar to a fully cooked rotisserie chicken from the grocery store. The taste was decent, but nothing remarkable. I found the biggest issue to be the quality of the chicken versus the price paid did not seem adequate. The chicken seemed rubbery and stringy, and if these sit in the bag for a long time (like if you order a McDelivery) I can see the chicken becoming quite hard.
I doubt I would order these again, except I guess if there’s some sort of free coupon. They just aren’t worth it compared to what you can get at places that specialize in chicken strips like Raising Cane’s. Also, the new chili dipping sauce you can get for these was interesting, slightly spicy, slightly sweet, but again not really worth the hype.
Getting off fossil fuels soon? I think not.
INDIA ALLOWS LONG-TERM COAL CONTRACTS AS IT BOOSTS POWER CAPACITY
“India’s federal government eased on Wednesday coal supply restrictions, allowing independent power producers to bid and procure coal supply at auctions for periods of between 1 and 25 years.
Under the new measure passed by the cabinet, producers can bid for coal for periods of up to 25 years at a premium above the notified price at auctions. The power plants will also have the flexibility to sell the electricity as per their choice. The new provision is expected to incentivize domestic power generators to better plan new coal-fired capacity, according to India’s Ministry of Coal. The policy “caters to the dynamic coal requirement of the Power Sector,” the ministry noted. India, just like China, is not giving up on coal to meet its surging power demand.”
https://oilprice.com/Latest-Energy-News/World-News/India-Allows-Long-Term-Coal-Contracts-as-It-Boosts-Power-Capacity.html
Thoughts…
An idling gas engine may be annoyingly loud, but that’s the price you pay for having WAY less torque available at a standstill….
We all know that the problem with electric motors lies not within the motor, but with the energy carrier and storage.
Sure. But that problem is mostly fixed: battery prices have fallen sharply, and charging points are expanding (and, of course, EVs have the unique advantage of being able to charge at home – fast, cheap and convenient).
We’re already at peak ICE: In the largest car market, China, EV sales are at 50%, and they’re growing fast elsewhere.
It’s no longer realistic to argue that liquid fuel (let alone fossil fuel) is needed for more than maybe 10% of land transportation.
Finally, it’s nice to be clear that EVs are simply better vehicles: quieter, faster, cleaner, easier and cheaper to operate and maintain, and cheaper than ICEs overall when we look at Total Cost of Ownership.
Nicolai —
Right, as I have said many times here, oil isn’t a great source of energy. It’s much too expensive to compete with coal and gas, let alone solar or wind. So it is rarely used in the competitive markets like industrial heat or electricity generation.
But oil is great for storing energy in a moving vehicle. Oil is part of the energy storage business, not the energy business.
Well, it used to be great for energy storage. Now it’s losing that market. As you say above, you’ve noted many times the markets it’s lost: the lighting market in the 1890’s; electrical generation 50 years ago; etc., etc.
Now it’s land transportation. Fairly soon after that it will be water transportation, aviation, etc. Petrochemicals will remain, at least for the foreseeable future.
Thoughts, which is better, a 6 mm bolt or a 1/4” bolt?
or
A 4000 lb EV moving one 200lb person two miles to get two six packs of beer or one 3600 lb ICE moving one 200 lb person 2 miles to get one large mushroom, onion, sausage pizza and greek salad?
$.02 the motor isn’t critical.
Weeelll….no.
Don’t get me wrong: I think efficiency is great. I love me some efficiency. Last time I looked, the average number of people in light vehicles in the US was only 1.2. That’s just sad. And, like you, I don’t like SUVs much (expensive, polluting, dangerous, unattractive, awkward to drive…).
It certainly points out how *relatively* easy it would be to adapt to an oil shock: just raise the average number of people to 2.4 and you cut fuel consumption in half. Plus, move people from 12MPG to 50MPG, and cut fuel in half again. But…that would be a serious inconvenience and, in the absence of an oil shock, politically it would be very, very hard. Far easier to go to EVs.
Historically efficiency has been essential: imagine if the US’ average fuel efficiency had stayed at the 12MPG of 1970. The US used about 10 Mbpd for passenger transportation in the 1970’s. Now it uses a bit less oil for passenger transportation, and the average MPG is about 23. Twice as many miles are driven now, with about the same amount of oil. That’s an enormous reduction in oil consumption.
But currently, light vehicle efficiency is a red herring, a distraction. A good thing to pursue in parallel with EVs, but not the most important thing.
$.02 is that the most significant adaptation to declining oil supplies will be less personal vehicle use and ownership than swapping EV for ICEV. I look at miles per year going back in our lifetime. Life wasn’t worse driving less. Fun could still be had with 75 hp compared to 200 hp today. The issue is unnecessary energy expenditures not the type of motor putting that energy into motion.
Btw suvs can be great. The issue is expecting them to go 80mph down the freeway. I’d be perfectly happy with a 75 hp wagon never going over 60. 35mph is a good automobile speed.
Life wasn’t worse driving less.
Sure – a lot of driving miles are of pretty marginal value, IMO.
the most significant adaptation to declining oil supplies will be less personal vehicle use and ownership than swapping EV for ICEV.
I would guess that you’re assuming that declining oil supplies will cause some kind of general recession/depression. But EVs eliminate 70% of oil consumption, and there are other substitutes for the other 30%, so…why?
“Judge frees another student detained by Trump’s Homeland Security goons”
https://www.dailykos.com/stories/2025/5/9/2321456/-Judge-frees-another-student-detained-by-Trump-s-Homeland-Security-goons?pm_campaign=front_page&pm_source=top_news_slot_1&pm_medium=web
https://www.youtube.com/watch?v=O56iv4AOqFI
Trump wants to be the POPE of the Catholic Religion and the Federal Reserve Chairman.
This guy is AMAZING!!!
Interesting article on power output of various engines.
https://batteryuniversity.com/article/bu-1006-cost-of-mobile-and-renewable-power
Even at 30% efficiency the internal combustion engine is far more powerful than a battery motor.
Batteries fail with extreme cold or heat, battery power would have to increase by 20 times to complete with the power of diesel or petrol. That is why there are no large batter planes or ships.
This article was not very accurate when written. For example, it claims that only ICEs can provide very large propulsion systems. Well, there are container ships with 80 megawatt electric motors (aka 107,000 horsepower).
And, it’s from 2017 and is out of date on battery costs, energy densities, discharge life, temperature specs, etc.
Finally, your comment uses the word power when it is actually discussing energy. Electric motors are more powerful, pound for pound, than ICEs.
More from the resident renewables expert
“For example, it claims that only ICEs can provide very large propulsion systems. Well, there are container ships with 80 megawatt electric motors (aka 107,000 horsepower).”
Really. How do you think, from your narrow viewpoint, that the container ship produces the electricity to power the electric motor? I guess it has a solar panel on the bow and a LiPo battery.
Had you taken tour head out of a dark place you would have seen an exhaust stack on the container ship, and others, which is connected to a humungus diesel engine. Large vessels are diesel electric. The propeller drive shaft is not directly coupled to the diesel engine(s). Some can run on boil off gases – eg LNG, ethane carriers.
A new Open Thread Non-Petroleum has been posted.
https://peakoilbarrel.com/open-thread-non-petroleum-may-10-2025/
An update to Non-OPEC and World Oil Production has been posted.
https://peakoilbarrel.com/january-non-opec-and-world-oil-production-drops/