How Will the Economic Future Unfold?

[flasher702]

Might have to do with the FED finally doing nothing...
Fed holds rates steady, keeps its options open - MarketWatch

LOL, doing nothing is one of the best things they've done in awhile. Mortgage rates keep going up though :/ If only I had been about 1year ahead in my personal finances. I could be sitting on a 4.5% mortgage on some foreclosed property right now. Oh well. I'll get my chance to profit from someone else's misfortune someday.

[Sailer]

I have faith! And when that runs out I'm going to raid Sailer's medicine cabinet xD

AMD underperformed the SP500 today but it was mostly my Global Green Energy ETFs that drug my porfolio down to an unimpressive ~1.5% day :/ Any that's in the "green" across the board is a good day though

What's up with oil dropping so quickly? And what's up with the reports saying that we're seeing the difference at the pump already? That <$120/barrel oil is for future's contracts for SEPTEMBER. Something doesn't add up there at all. Someone must have payed AAA a bundle to blow that hot air around. We already know that $120/barrel oil isn't expensive enough to make US consumers cut back so it's gotta go back up if "lack of demand" is the reason it went down. I'm not an expert to say whether or not it will go up or down but I know that the reasons being bandied about for why oil and gas prices are doing what they're doing don't add up. What else is going on?

Warning!! My medicine cabinet is protected by Mr. Smith and Mr. Wesson, with backup by Mr. Winchester's 12 gauge pump shotgun. Keep in mind my old rancher's motto, "Trespassers will be shot. Survivors will be shot again!".

As to the oil, its traditional that toward the end of summer the gas prices start to go down a bit. What's happening now is that the refineries are getting rid of the excess gasoline as they start converting to produce fuel oil for the winter. As gas use has gone down due to people not driving quite so much, the companies are finding themselves with a glut of gasoline that they have to get rid of. So what's left, but to lower the prices and encourage people to drive more? Oh yes, I worked for an oil company, Union 76, for a couple years while studying medicine at night.

[BaldEagle]

Ahem. Please open your physics books to the chapter on Thermodynamics. Conservation of energy my friend! For example: If you use solar power to make electricity and then use that electricity for something super cool, like F@H for team 75255, what do you get? Well, other than eWang-polishing PPD you get HEAT as a byproduct. Green energy will not "cool" the planet directly it just lowers pollution.

Ahem....You maybe missed the part of the conservation of energy principle where all energy must be accounted for. Heat is basically the losses not accounted for in other energy states. Sorry to say but your F@H example doesn't actually do any "work" it's simply all losses and if that is all we ever did with the solar energy you would be correct. If you remove the solar energy and convert it to electricity the work done with the electricity like moving your electric car will not be converted to heat. In fact if you drive uphill you would even remove additional energy as potential energy. Thus taken on a large scale it is possible that as devices become more efficient (ie they lose less energy to heat) and we extract more energy from solar radiation that we could indeed reduce the temperature of the planet.

[Sailer]

Solar energy is alright, in its place, but I prefer wind power. Wind powered sails can move boats very well, with no fossil fueled energy losses, and the only heat produced is from the friction of the wind across the sails and the hull going through the water. Yes, a diesel is still important for those days when the wind doesn't blow. Wind powered generators produce electricity with little cost (after the cost of building the thing), and better yet, they slow down the wind so that it doesn't cause as much damage. I know, a few birds get whacked, but Darwin has to have his due.

[flasher702]

Warning!! My medicine cabinet is protected by Mr. Smith and Mr. Wesson, with backup by Mr. Winchester's 12 gauge pump shotgun. Keep in mind my old rancher's motto, "Trespassers will be shot. Survivors will be shot again!".

I totally got my bullet proof armor last month to deal with right-wing wackos like you who think they have a right to defend their personal property*... so please aim for my chest.

*just in case anyone missed it: that's sarcasm. Of course right-wing wackos have a right to defend their property! xD xD xD

As to the oil, its traditional that toward the end of summer the gas prices start to go down a bit. What's happening now is that the refineries are getting rid of the excess gasoline as they start converting to produce fuel oil for the winter. As gas use has gone down due to people not driving quite so much, the companies are finding themselves with a glut of gasoline that they have to get rid of. So what's left, but to lower the prices and encourage people to drive more? Oh yes, I worked for an oil company, Union 76, for a couple years while studying medicine at night.

Now THAT makes sense. It normally goes down as they sell off overstock anyway and they have ~12% more overstock then they'd planned on (3% lower consumption * 4months). Nothing to do with the cost of crude futures at all.

[flasher702]

Ahem....You maybe missed the part of the conservation of energy principle where all energy must be accounted for. Heat is basically the losses not accounted for in other energy states. Sorry to say but your F@H example doesn't actually do any "work" it's simply all losses and if that is all we ever did with the solar energy you would be correct. If you remove the solar energy and convert it to electricity the work done with the electricity like moving your electric car will not be converted to heat. In fact if you drive uphill you would even remove additional energy as potential energy. Thus taken on a large scale it is possible that as devices become more efficient (ie they lose less energy to heat) and we extract more energy from solar radiation that we could indeed reduce the temperature of the planet.

100% of the energy still stays on the planet and if you use it (vs. storing it) 100% will be released. "waste" heat is a byproduct not an inefficiency in itself. An incandescent bulb isn't "wasting" energy itself, that's impossible, it's wasteful because it's making heat when all we wanted was light. A 20w incadescent light bulb creates roughly as much heat as a 20w CF light bulb. The CF light bulb creates more light but when that light energy hits something it gets converted to heat energy. All electrical devices are equally efficient heaters (making that heat go where you want it is another issue but they all create the same amount of heat per watt). A fridge is as efficient as a computer is as efficient as central forced air for the amount of heat/watt they generate.

We should totally have Clue69Less weigh in on this. He might be able to state it more eloquently with better credentials than I.

[Clue69Less]

100% of the energy still stays on the planet and if you use it (vs. storing it) 100% will be released. "waste" heat is a byproduct not an inefficiency in itself. An incandescent bulb isn't "wasting" energy itself, that's impossible, it's wasteful because it's making heat when all we wanted was light. A 20w incadescent light bulb creates roughly as much heat as a 20w CF light bulb. The CF light bulb creates more light but when that light energy hits something it gets converted to heat energy. All electrical devices are equally efficient heaters (making that heat go where you want it is another issue but they all create the same amount of heat per watt). A fridge is as efficient as a computer is as efficient as central forced air for the amount of heat/watt they generate.

We should totally have Clue69Less weigh in on this. He might be able to state it more eloquently with better credentials than I.

I ain't much for eloquaint but I'll giv'er a shot.

100% of the energy doesn't stay on the planet. If it did, Earth would have cooked us like brats long ago. Earth has massive radiative losses. In terms of electrical device efficiency, this could be a semantical issue. For the component of energy that goes to heat, you are probably correct within a reasonable error. If I remember right, efficiency losses to friction are split between heat and deformation whereas resistive heating all ends up as heat.

Bald Eagle and I are on the same page about reducing/limiting the amount of heat that sunlight transfers to earth by a device like a PV. We really don't know what kind of difference we'd see if a large part of our energy was taken from PVs. It could be very significant.

[flasher702]

So why are commodities prices dropping? It should take a long time for cheap gas to work it's way through the system and lower commodities prices.

Relief for consumers: prices falling - Yahoo! News

[flasher702]

I ain't much for eloquaint but I'll giv'er a shot.

Earth has massive radiative losses.

Very true. But the radiation loss would be about equal for the energy whether you put up a PV panel or not so that's not at issue here.

If I remember right, efficiency losses to friction are split between heat and deformation...

Hmm, good point... and possibly also over my head xD I'll ponder that.

[flasher702]

Cheap gas? I think you should say "lower priced than before" But really that's a good question because the article didn't answer it at all. My guess is that it has a lot to do with traders and speculators on the market expecting the prices to drop, which causes prices to drop.

USD has made some very decent gains vs. EUR recently also... But that should also take time to work it's way through to retail prices. Article only briefly mentions the possibility that commodity markets were in bubbles without going into detail. If those bubbles had popped it should be a huge news story ahead of lower prices hitting retail, not a reactionary story.

As this relates to oil it should lower the price in the short run but not by much in the long run. A lower Euro will result in less oil consumption in Europe but they don't have nearly as much fat to trim from their petrol budget as we do and I still think oil has to stay >$120/barrel to force USA to consume less so unless Oil production significantly increases (which it won't anytime in the next decade no matter what pro-drilling people do) the price must stabilize >$120USD with the strength of the dollar having very little ability to influence that price lower.

[BaldEagle]

So why are commodities prices dropping? It should take a long time for cheap gas to work it's way through the system and lower commodities prices.

Relief for consumers: prices falling - Yahoo! News

For the same reason they shot up so fast. Service stations began pricing fuel based on replacement cost to catch up with the skyrocketing increases now they are still working that way on the way down.

You didn't notice pump prices jumped the next day based on oil prices? Some places around here they jumped up more than once a day.

[flasher702]

For the same reason they shot up so fast. Service stations began pricing fuel based on replacement cost to catch up with the skyrocketing increases now they are still working that way on the way down.

You didn't notice pump prices jumped the next day based on oil prices? Some places around here they jumped up more than once a day.

Actually I'm pretty sure that oil prices (futures) were going up for a good 4 months before prices started rising at the pump... which seems about right. The prices of oil started shooting up in late 2007 but the prices the the gas pump didn't start shooting up until much later. I found some data, linked below, but i'm still analyzing it to see if it actually supports what I just said... Oil prices in the last ~2years bottomed out in Feb2007 but gas prices continued to go up and down independently of oil prices doing nothing but going up.

Oil prices:
Light Crude Oil (CL, NYMEX): Monthly Price Chart
Gas Prices:
U.S. Retail Gasoline Historical Prices
(you have to make your own chart for the excell spreadsheets they link you to)

[flasher702]

Ok. I got a chance to get a decent chart out of it. Like I said, oil prices bottomed out in Feb 2007 and gas prices went up into the summer, as per usual summer prices. However between late May 2007 and Early March 2008 gas prices were DOWN, for that entire period, despite oil prices that only went up, each month, starting 3 months previous to that period.

Since early March 2008 gas prices have risen quickly and that's possibly another matter altogether. I'm not an expert to say what really is going on here but it seems that we're not being told the truth.

Perhaps this is just evidence that we were being badly ripped off in summer 2007, as has been alleged elsewhere, and the price movements we're seeing now are proper.

CORRECTION: Oil prices were down very slightly, month to month, May and June 2007. Sloppy reading on my part it's quite clear in the graph. Other than that little blip oil prices did nothing but go up.

[BaldEagle]

Ok. I got a chance to get a decent chart out of it. Like I said, oil prices bottomed out in Feb 2007 and gas prices went up into the summer, as per usual summer prices. However between late May 2007 and Early March 2008 gas prices were DOWN, for that entire period, despite oil prices that only went up, each month, starting 3 months previous to that period.

Since early March 2008 gas prices have risen quickly and that's possibly another matter altogether. I'm not an expert to say what really is going on here but it seems that we're not being told the truth.

Perhaps this is just evidence that we were being badly ripped off in summer 2007, as has been alleged elsewhere, and the price movements we're seeing now are proper.

CORRECTION: Oil prices were down very slightly, month to month, May and June 2007. Sloppy reading on my part it's quite clear in the graph. Other than that little blip oil prices did nothing but go up.

Season variations in output of the major fuel oil products, Gasoline, reformulated gasoline, Diesel, Kerosene, home heating oil etc... has a major effect on prices in addition to the price of oil.

As you know the shift from conventional gasoline to the reformulated blends always leads to a dramatic increase which is even more pronounced on the west coast due to the reformulation requirements. Look at last week's East Coast regular and reformulated there is $.03 difference. If you instead look at the San Francisco reformulated and the West Coast regular you have a $.19 difference. So seasonally the switch to the summer reformulated gasoline is a killer at the pump for the west coast but not such a big deal on most of the east coast.

If you take a close look at the second week of May 2007 to mid June 2007 you will note it's nearly $.20 higher than the months preceeding and the months following. Spikes like that are typically attributed to disasters like hurricanes (Remember the Katrina spike), war (or the threat of it), etc.. they create a spike in the immediate price based on a perceived possibility of a shortage. If I recall that was about the time there was some issue with Iran and a possible strike against their enrichment facility...

[Sailer]

Went to the IRS office in Reno and had a talk with an office worker. First he explained that I didn't qualify for a stimulus rebate check. Then I explained that I was a disabled veteran and I was supposed to get one. After looking it up in his computer, he said I was right, but I hadn't filled out the tax form correctly. I was supposed to list the pension under taxable income, even though it is not taxable. I said that it sounded crazy, and there was nothing in the instructions about doing that. He replied that it was just how it was supposed to be done. Now I have to file an amended return with the Fresno office, and with luck, I should get a check within 6-8 months. Yes, that's months, not weeks, unless the IRS agent didn't know what he was taking about, which wouldn't be the first time.

I wonder how many other people got totally confused about this. I wonder if this IRS agent really knew what he was talking about. And I get told to take my medicine?

[flasher702]

wow look at AMD go! I should have waited another week to sell. I wonder if it'll go to $6 soon so I can sell the other half...

[flasher702]

AMD! *boom boom clap*
AMD! *boom boom clap*

w0000000! I should have had MORE faith and waited longer. I've sold everything at this point. Looks like I missed the peak today by about $0.10/share but can't complain too much when you're makin money. (my actual profit margin on all my AMD buys and sells will take a bit of accounting work... I'll get back to you on that)
UPDATE: 8.366% profit over the course of about a month buying and selling AMD. Which ends up not being much money since I'm playing with small numbers but it was good practice in timing an patience.

Now the question become: to buy back in or not to buy back in? Or what other things should I be eying?

My PWND is now officially flapping in the breeze like a big wet fart. Down 8% since I bought it. Trying to take solace in that my whole portfolio is up today.

[BaldEagle]

AMD! *boom boom clap*
AMD! *boom boom clap*

w0000000! I should have had MORE faith and waited longer. I've sold everything at this point. Looks like I missed the peak today by about $0.10/share but can't complain too much when you're makin money. (my actual profit margin on all my AMD buys and sells will take a bit of accounting work... I'll get back to you on that)
UPDATE: 8.366% profit over the course of about a month buying and selling AMD. Which ends up not being much money since I'm playing with small numbers but it was good practice in timing an patience.

Now the question become: to buy back in or not to buy back in? Or what other things should I be eying?

My PWND is now officially flapping in the breeze like a big wet fart. Down 8% since I bought it. Trying to take solace in that my whole portfolio is up today.

So that's +8.33% and -8% for a total of 0.33% or essentially nowhere...

Course I didn't do any better.... Since I'm sitting it out for now...

[beerandcandy]

if you think the government is going to bail out these morons wouldnt that make you want to invest in this?
you cant lose if that is true cause if they get bailed out it should help your investment
are more people stupid than i think?
Fannie, Freddie fall on renewed bailout fears: Financial News - Yahoo! Finance

[Sailer]

are more people stupid than i think?
Fannie, Freddie fall on renewed bailout fears: Financial News - Yahoo! Finance

One thing I've learned over the years is to never underestimate the stupidity of people. Or myself on a few occasions that I'd like to forget.