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West Texas Intermediate Passes 2 Year High, Jumps To $90.57

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Tue, 12/07/2010 - 09:36 | 785097 pan-the-ist
pan-the-ist's picture

“Tax away unearned rentier income. And do not pay creditors by selling off the public domain to rent-seeking privatizers erecting tollbooths on the economy.”


Tue, 12/07/2010 - 09:47 | 785126 trav7777
trav7777's picture


But the latter is the trend for banksters.  Nothing should get in the way of their earning real profits in exchange for the service of conjuring money from thin air and charging interest on it.  Without that, why...we'd all just DIE or something.

A lot of Latin America is rented to the population.  With each debt crisis there, the european banks take a larger ownership of the nations.  Chavez is a total idiot, but the reason he's so gung ho about nationalizing is because under literally every stone he turns, he sees a rentier leech with ownership of national assets.

Tue, 12/07/2010 - 09:58 | 785154 pan-the-ist
pan-the-ist's picture

The point of the article is how history (which we are damned to repeat) shows Obama's deficit commission has it backward (which should not be a great surprise to anyone.)

Tue, 12/07/2010 - 10:02 | 785170 snowball777
snowball777's picture

"A more equal land-tax, a more equal tax upon the rent of houses, and such alterations in the present system of customs and excise as those which have been mentioned in the foregoing chapter might, perhaps, without increasing the burden of the greater part of the people, but only distributing the weight of it more equally upon the whole, produce a considerable augmentation of revenue." - Adam Smith

This might be the earliest argument I've ever seen for progressive taxation.

Tue, 12/07/2010 - 10:16 | 785224 trav7777
trav7777's picture

Adam Smith was an absolute giant and the only economist worth respecting.  It's worth noting that after the proposal and implementation of some of these reforms, the aristocracy essentially ran the Irish out of their homeland with an engineered famine.  I guess they don't take well to being taxed.

Last I looked, that depopulation was so successful that there were more Irish in Ireland in the 1840s than in modern times.

Tue, 12/07/2010 - 10:30 | 785278 Calvin Jones an...
Calvin Jones and the 13th Apostle's picture

What people forget, or at least never mention, is that Ben Franklin was in favor of progressive taxation as well.

Tue, 12/07/2010 - 16:10 | 786632 midtowng
midtowng's picture

Hmm. When I voiced support for progressive taxation on ZH i was called a "thief" and "hope you will die".

  You guys aren't even getting junked.

Maybe its just me.

Tue, 12/07/2010 - 10:03 | 785173 pazmaker
pazmaker's picture

You are right about Chavez being an idiot!.  He is blaming the torrential rains that are effecting Caracas on the imperialistic west and how we just consume and creat environmental chaos, but yet he continues to pump out that black gold and sell it to us hand over fist!

If he was truely concerned why doesn't he stop selling us oil?

Tue, 12/07/2010 - 10:10 | 785210 trav7777
trav7777's picture

two reasons: one which most know and the other that few know.  The first is that he needs the revenue.  The second is that refineries on the Gulf (primarily LA) are the only place in the world capable of refining the heavy sour he produces in quantity.  Seriously, people think they know oil from watching the GOM spill or Beverly Hillbillies.  The stuff pumping out of Venezuela resembles taffy or peanut butter in its consistency.  The days of abundant lightsweet liquid oil gushering and flowing like that are long past.

This is one of the things so absurd about the futures market.  You can purport to buy as much paper oil as you want but actually taking delivery in any size of consistent light crude volume is not possible without special deals at the sovereign level.  Good luck locking down 100 or even 10kbpd with paper.  And a refining supply chain on orinoco taffy...forget it.  It's essentially sole-source on both ends.

Tue, 12/07/2010 - 10:21 | 785243 pazmaker
pazmaker's picture

I have family that live in Venezuela so I pay close attention to what goes on there. Chavez has squandered much of the prosperity they have experienced from the windfsall profits.  Corruption is deep and the violent crime is mind boggeling in Caracas, of course that is an issue that predates Chavez.

I have heard that the oil coming out was more difficult to refine but I didn't know it resembled taffy! 

I have a new nickname for Chavez now---WackyTaffy

Tue, 12/07/2010 - 12:02 | 785659 D-Falt
D-Falt's picture

He reminds me more of Meatwad from The Aqua-Teen Hunger Force.

Tue, 12/07/2010 - 16:46 | 786839 LowProfile
LowProfile's picture

Great. On one hand, we have the rentier class. On the other hand, the government class.

What's the third choice? I'm being serious. Suggestions, brainstorm, spitballs welcome.

Tue, 12/07/2010 - 09:37 | 785100 NoBull1994
NoBull1994's picture

This is bullish for Schwinn.

Tue, 12/07/2010 - 09:51 | 785137 Kyron95131
Kyron95131's picture

lol i agree

Tue, 12/07/2010 - 09:38 | 785102 NoBull1994
NoBull1994's picture

This is bullish for Schwinn.

Tue, 12/07/2010 - 09:40 | 785105 Mercury
Mercury's picture

Yeah but there is no oil in CPI or PPI so this isn't inflation...just noise.

Welcome to The Recovery!

Tue, 12/07/2010 - 10:11 | 785211 CPL
CPL's picture

And when it hits $100 at the end of the month everyone will be very surprised that the entire market will have crashed and burned when basic costs are over the wire and listed in the "crazy" territory.


But we'll all keep that under our hats won't we.

Tue, 12/07/2010 - 09:39 | 785106 Ferg .
Ferg .'s picture

Interesting to see if the 50% Fibo retracement of the July 08 - December 08 collapse will hold ( it's around the $ 90.50 mark ) . I have my doubts ...

Tue, 12/07/2010 - 09:43 | 785114 dojiman
dojiman's picture

better not mate, short at 89, kept some reserves for 95 handle

Tue, 12/07/2010 - 09:57 | 785152 Ferg .
Ferg .'s picture

Short at $90 myself but if it starts to break above $91 I'm out . Yeah looking to short around that area myself , or $100 . Crazy that we're up around this level .

Tue, 12/07/2010 - 10:06 | 785184 snowball777
snowball777's picture

Waiting a couple more weeks for $100 (might not be that long)...it's either that or nomo POMO for the momo.

Tue, 12/07/2010 - 10:11 | 785215 dojiman
dojiman's picture

agree, I still have flashbacks of 147, so taking time before adding, nat gas starting to retrace 

Tue, 12/07/2010 - 11:00 | 785398 Ferg .
Ferg .'s picture

Back below $90 now . That's pretty encouraging . Looks like this could be a textbook false breakout .

Tue, 12/07/2010 - 09:39 | 785107 HelluvaEngineer
HelluvaEngineer's picture

Austerity for some, hyperinflation for others.  And a Merry Christmas to everyone from BernankeClaus!

Tue, 12/07/2010 - 10:07 | 785191 snowball777
snowball777's picture

I'm feeling like a Who down in Whoville with no roast beast and tree up in this bitch.

Fuck the Grinch!

So I got these nice silver rounds and bars as presents this year... ;)

Tue, 12/07/2010 - 09:41 | 785112 Alex Lionson
Alex Lionson's picture

Just headlines for now…


BREAKING NEWS: FED’s Bernanke bought the devil’s soul on newly printed dollars (QE 23 – 23 trillion)


BREAKING NEWS: the devil and senior hell managers filed a lawsuit with the US Supreme Court accusing the FED’s Bernanke of fraudulent delusion about the real value of USD


BREAKING NEWS: the devil and senior hell managers complain that the Earth population increasingly refuse to sell their souls for US Dollars

Tue, 12/07/2010 - 09:43 | 785117 FrankIvy
FrankIvy's picture

This is my first "bitchez meme" attempt, so please provide feedback, as appropriate.


Peak Oil, Bitchez!

Tue, 12/07/2010 - 09:44 | 785118 trav7777
trav7777's picture

The last time oil crossed like this, it was the 2007 year runup to the global all-liquids peak in 08.  We saw sustained inventories drawdowns.  It'd be wise to look for the same signs, because the oil price spike was a precursor to the stock collapse which began later that year.

Perhaps the genius economists believe that raising the price will lead to more supply.  It probably doesn't occur to them that such a thing might not be possible.  If it wasn't in an economics text, it's not real.

Tue, 12/07/2010 - 09:54 | 785142 eigenvalue
eigenvalue's picture

Raising the price might lead to more supply only when there is no constraint of resources.

Tue, 12/07/2010 - 10:10 | 785208 snowball777
snowball777's picture

A mathematician, an engineer, and an economist wash up on a deserted island with nothing but a can of food between them.

The math wiz explains that we could use a lever to pry open the can.

The engineer does some quick strain estimates and proposes to launch the can into the air splitting it open as it returns to earth.

The economist says, "assume we have a can-opener".

Tue, 12/07/2010 - 09:49 | 785130 Spartan
Spartan's picture

Firstly High Oil prices are good for the economy...$90 is not nearly high enough we need a real Oil price "shock"...at least $150 (is that shocking enough?) to create "good" inflation.


Secondly as we learnt from the Fed yesterday high Oil prices are "ONLY" due to demand from India and China...I imagine the Fed is 100% sure that QE2 has no influence...thats simply economics 101 (mock laugh at all fools who do understand my superior intelligence).

Tue, 12/07/2010 - 09:49 | 785133 bob_dabolina
bob_dabolina's picture

There is no inflation. In fact, we are on the cusp of deflation.

-Ben Bernanke...like the day before yesterday

Tue, 12/07/2010 - 09:52 | 785139 Kyron95131
Kyron95131's picture

hes 100% sure, you forgot to add that

Tue, 12/07/2010 - 09:58 | 785159 A Man without Q...
A Man without Qualities's picture

It's incredible that the Fed's favorite metric for inflation does not include energy prices, but 24% of it comes from Owner Equivalent Rent, which they get by asking home owners what they think it would cost to rent their home.  


As Einhorn was saying, by excluding essentials such as food and energy, the official metric is actually inversely correlated with inflation.  They created a metric that deliberately understates inflation for political purposes, and this is what they use as their basis for wanting to create higher inflation.

Tue, 12/07/2010 - 09:51 | 785138 viator
viator's picture

So much for peak oil and hydrocarbons..

"Saudi Aramco, the world's largest national oil company, has just revealed at the World Energy Congress in Montreal that the Gulf Kingdom could possess volumes of unconventional gas resources running into hundreds of TRILLION cubic feet, which would more than double the current estimate of its proven natural gas reserves of 280,000 billion cubic feet, according to the magazine."

And that is just Saudi Arabia, unconventional NG exists everywhere.


Tue, 12/07/2010 - 09:55 | 785147 Alex Lionson
Alex Lionson's picture

That might or might not be true, but what about the proven FED's reserves of US Dollars?

Tue, 12/07/2010 - 09:57 | 785153 sumo
sumo's picture

So much for reliable figures from Arab states..

"According to the BP statistical review of world energy 2010, the big six Middle East OPEC oil producers (Saudi Arabia, Iran, Iraq, Kuwait, Unite Arab Emirates (UAE) and Qatar) had 743 billion barrels (Gbs) of proved oil reserves (1P) between them, representing 56% of reported proved global oil reserves. Knowledge of this bounty provides OECD governments with much comfort. The trouble is there is no chance these figures are correct"


Tue, 12/07/2010 - 10:21 | 785246 Internet Tough Guy
Internet Tough Guy's picture

Bingo. Why is Saudi the only oil producer who keeps reporting increasing reserves? Magic sand or lies?

Tue, 12/07/2010 - 10:20 | 785240 Not Sure
Not Sure's picture

When natural gas production and usage goes into higher gear; what will steel and pressurized tanker demands be?

Tue, 12/07/2010 - 10:48 | 785347 Grappa
Grappa's picture

Ah yes, and that unconventional gas is cheaper and it's EROEI (energy returned on energy invested) is better than our current natural gas and oil production, why goodness me.

If unconventional still means this: "Unconventional natural gas is gas that is more difficult or less economical to extract, usually because the technology to reach it has not been developed fully, or is too expensive." And for one I do not believe that we have made some immense break trough in technology to bring down the cost.

Peak oil and hydrocarbons doesn't physically mean that "oil is running out OMG". What it means is that oil and hydrocarbons are more and more expensive to produce and thus more scarse. The amount of hydrocarbons on this planet still cover and will cover our needs for a long time, when calculated by barrel to barrel basis. But when calculated trough EROEI it shows that we have a problem.

At least this is how I have understood the situation. Of course if we state that everything is as it should be and change our past to indicate the same, then no worries mates.

Tue, 12/07/2010 - 12:47 | 785890 samsara
samsara's picture

What it means is that oil and hydrocarbons are more and more expensive to produce and thus more scarse.

Peak Oil is the point in the graph where a Well, Field, Region is producing per day the highest number it will ever reach.

A oil well for instance(say) thru it's life goes from 5, 10, 50, 100, 90, 70, 20, 5,3, 1  something like that. (use what ever units of measure you like).

The PEAK is when in the previous example it hit 100.  Nothing can be done after crossing that number to ever reach that number again.

Look at the production graphs for Spindle Top, Cantarell, the North Sea, The US, or any other region and you will see a similar progression in action.

Once you hit PEAK, it's all down hill and nothing will change it.

(the numbers used were just for illustration purposes only).

Here's a picture to make it clearer.


Tue, 12/07/2010 - 09:53 | 785141 Oh regional Indian
Oh regional Indian's picture

The perils of the just in time economy, laid bare at the feet of the swooning dollar.

Double tragedy for the US, since even any demand contraction from the unfolding global downturn will be offset by the plunging dollar.

Rock, meet hard place.

ANDC Hybrids, all around.



Tue, 12/07/2010 - 09:54 | 785144 Spartan
Spartan's picture

$90 has not even made a headline on CNBC....

Tue, 12/07/2010 - 09:56 | 785149 Josephine29
Josephine29's picture

It was only 2 days ago that Ben Bernanke went on national television to tell us he was one hundred per cent sure he could control inflation.....

More realistic economists have been worried about potential inflationary trends for some time.Discussing fuel and commodity prices notayesmanseconomics thinks this.

After such moves for both one can probably expect something of a retracement in the short-term but it is plain that at this time there are concerns about inflationary trends in the world. Unfortunately conventional economic theory may struggle to pick this up as many economists base their thinking on core inflation which excludes food and energy.


Ben may get the inflation he appears to want but how will it make us better off?


Tue, 12/07/2010 - 09:58 | 785160 Bill Lumbergh
Bill Lumbergh's picture

Is this being done by design aside from creating inflation...is there something more sinister at hand as some have suggested.

Tue, 12/07/2010 - 09:58 | 785161 Shameful
Shameful's picture

It's going to be a hoot when oil prices eventually fight there way back to 08 highs and the economy is a smoking wreck.  Wonder what Zimbabwe Ben will have to say about that, probably the same yarn he has for gold "I don't know".

Tue, 12/07/2010 - 10:03 | 785175 Spartan
Spartan's picture

He won't say anything....as usual...everything will then crash like 2008 and then he will say "print, print, print"....and the cycle will continue until they cart the mad man away.

Tue, 12/07/2010 - 10:33 | 785289 buzzsaw99
buzzsaw99's picture

ben will say whatever the pigmen tell him to say.

Tue, 12/07/2010 - 09:59 | 785164 Hondo
Hondo's picture
Exactly, rates are and have been rising since QE2. Isn't QE2 supposed to lower rates? Isn't that the main attraction for the FED even considering doing QE2? Or is the real reason to pump commodities and stocks to help their minions? That seems to be the only thing that is happening. In fact the one that that would help, lower rates, is going in reverse because the FED is helping pump commodities speculation and stock speculation..........Somebody please think through this nonsense and blow the whistle.....this is soooo corrupt even a blind man can see what's happening.
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