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Is 3.80 The Scariest Number For The Bulls?

Tyler Durden's picture





 

'Nothing can stop us now' appears to be the message we are being fed as Bullard et al. confirm we should rest assured that the Fed will pump as long as there's a sun in the sky. However, there is a little fly in that ointment that just keeps on popping up. As Barclays' Barry Knapp notes, gas prices have risen high enough to hurt stocks if history is any guide. Gas prices, which have risen every day since January 17th are pressuring the critical $3.80 level that has capped valuations for the equity market in the last three years. The last times gas prices have risen this high, consumer spending growth has stalled and just as we have noted previously, it appears the only thing that can tame the enthusiasm of a liquidity-addicted equity market is a cash-strapped consumer pulling back. The double-edged sword is simple, Knapp notes: any slowing of economic growth that stems from higher gas prices may prevent companies from meeting earnings projections; whereas sustained expansion would increase the risk of inflation and put pressure on the Fed to scale back its QE4EVA. Rock meet hard place.

 

Chart: Barclays and Bloomberg

 


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Sat, 02/23/2013 - 18:29 | Link to Comment Motorhead
Motorhead's picture

Gasoline chart, bitchez!  (Or, triple top, bitchez!)

Sat, 02/23/2013 - 18:38 | Link to Comment The They
The They's picture

My scariest number is $26

Sat, 02/23/2013 - 18:44 | Link to Comment UnpatrioticHoarder
UnpatrioticHoarder's picture

The chart is Peak Oil's bumpy plateau in graphical form - proof of the impossibility of sustainable economic growth

Sat, 02/23/2013 - 21:03 | Link to Comment Stock Tips Inve...
Stock Tips Investment's picture

Energy investments in America are very large. The effects of this boom on our economy will be very positive in the following years. Do not fall into pessimism and leave aside the negative ideas. America is much bigger than their problems.

Sat, 02/23/2013 - 21:34 | Link to Comment Spastica Rex
Spastica Rex's picture

Americans are much, MUCH bigger. Thank McDonald's for that. But can the harvest of human body fat really keep up with the global decline of existing oil wells? Only the future will tell.

Sat, 02/23/2013 - 21:36 | Link to Comment akak
akak's picture

US 'american' blobbing-up.

It's the mattering thing.

Make me laugh.

Sat, 02/23/2013 - 23:01 | Link to Comment francis_sawyer
francis_sawyer's picture

The 'BLOB UP' Soap Company... Has a nice ring to it... I LIKE it!...

Sat, 02/23/2013 - 23:21 | Link to Comment akak
akak's picture

99.44% Pure Citizenism.

So pure, it floats.

Blobbing-up dirt since 4 July, 1776.

(And on Easter Island, for several centuries before that date, due to the magical time-traveling flying rickshaw of Benjamin Franklin inventionism of fabled US 'american' citizenism past.)

Sat, 02/23/2013 - 21:40 | Link to Comment hangemhigh
hangemhigh's picture

@Spastica             3270669

Eagle Cap dude...... i like it..............we can render all of those honey boo boo 300 pound lunkers into whale oil and call it 'Oilent Green'

Sun, 02/24/2013 - 04:31 | Link to Comment _ConanTheLibert...
_ConanTheLibertarian_'s picture

Do I smell a hype? Those never end well.

Sat, 02/23/2013 - 18:44 | Link to Comment UnpatrioticHoarder
UnpatrioticHoarder's picture

The chart is Peak Oil's bumpy plateau in graphical form - proof of the impossibility of sustainable economic growth

Sat, 02/23/2013 - 19:02 | Link to Comment tenpanhandle
tenpanhandle's picture

seems the stockmarkets real scary number is plain and simple dow 14K and S&P P/E at 14

Sun, 02/24/2013 - 01:21 | Link to Comment Lore
Lore's picture

Tilt your head slightly, and you can see a hockey stick for Unnatural Global Warming.

Sat, 02/23/2013 - 18:42 | Link to Comment Gazooks
Gazooks's picture

inverted cow teat formation

Sat, 02/23/2013 - 20:38 | Link to Comment Atomizer
Atomizer's picture

Do you want to know funny? I can remember this petrodollar PONZI SCAM FROM 2008. Back then, I drove a V-12 BMW 750 [until she accidentally crashed it]. Under premium gas filling. It would total a 30 gallon tank at $70- $80 dollars.

 

Fast forward to 2013. My 2.5 liter peasant mobile costs me $54 dollars @ 12 gallons of premium fuel. No inflation exists in the US. We are on a soft landing to disengage with QE3/ MBS bullshit. I still own my two Lincoln gas hog vehicles, just wanted to put things into prospective.

Sat, 02/23/2013 - 21:57 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Just filled up tonight: $75.00, probably the most it has ever cost me.  $4.69 / gal (premium).  When it is over $70 just to fill my tank, a little bit of the Bearing dies inside...

Sat, 02/23/2013 - 22:00 | Link to Comment akak
akak's picture

Try $128.00 for my last fill-up.

Now that's pain!

Sat, 02/23/2013 - 22:15 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

YOW!  I'm dyin'!  Oh, make it stop!

 

On the other hand (and depending on WHERE up there you live), maybe you don't have to drive as much...

Sun, 02/24/2013 - 11:05 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

shit fire. 

 

I would love to get a truck, a used beat up that runs well but never at these prices.

 

fuck that. 

 

I cant imagine a bull run like I hear everywhere with gas prices this high.

Food prices for the wholesale is outrageous....all due to oil

 

 

Sat, 02/23/2013 - 22:35 | Link to Comment Taint Boil
Taint Boil's picture

 

 

Hey, just for the record unless your car is specifically designed for high octane gas (premium) there is NO benefit. 

Link 

Premium Gas = Male Enhancement Drugs 

Complete bullshit for 98% of cars on the road. If you’re driving one of the 2% ….  Well you would already know this.

Sat, 02/23/2013 - 22:41 | Link to Comment akak
akak's picture

 

Hey, just for the record unless your car is specifically designed for high octane gas (premium) there is NO benefit.

That is only half true.

While that fact does generally apply to all new vehicles, it is not necessarily the case for older, less efficient engines.  My mileage is increased by almost 20% by using premium over regular in my 15 year-old pickup, as I have proven to myself many times.

Sun, 02/24/2013 - 00:20 | Link to Comment ekm
ekm's picture

Premium has no ethanol, hence valves work much betters.

Sun, 02/24/2013 - 01:29 | Link to Comment smart girl
smart girl's picture

Keep to the same gas, otherwise adjust spark plugs for new octane.

Sun, 02/24/2013 - 10:22 | Link to Comment Taint Boil
Taint Boil's picture

 

 

You know, I must have been wrong, so ignore what I said and continue to fill up.

Sun, 02/24/2013 - 10:50 | Link to Comment Silver Garbage Man
Silver Garbage Man's picture

I have most of my life savings in silver......I'll bet gas gets cheaper priced in silver as we move forward, while it continues to rise in dollars. It's easy to see this coming if you are smart enough to know you don't know it all.

Sun, 02/24/2013 - 12:14 | Link to Comment TPTB_r_TBTF
TPTB_r_TBTF's picture

I'll bet there's gonna be a war; therefore, i'll take the other side of your bet.

Sun, 02/24/2013 - 09:11 | Link to Comment de3de8
de3de8's picture

ATomizer,
Boy can I relate! 3/4 ton p/u given to son to drive to school only a few miles away providing safe transport while fuel cost not that big a part of equation. Meanwhile I drive my tomato can at 42 mpg to survive. Yeah baby a rising standard of living! More stealth stimulus where they welcome higher fuel costs forcing the Sheeple into gas sippers extending the bailed out auto cos unsustainable business model just a little while longer.

Sun, 02/24/2013 - 09:21 | Link to Comment duo
duo's picture

When I bought my VW turbodiesel in November, diesel was $3.99.  Tuesday, when I filled it again, diesel was still $3.99, and 13 gallons still got me 450+ miles of city driving.

Sun, 02/24/2013 - 03:16 | Link to Comment Buck Johnson
Buck Johnson's picture

I know, fuel prices is about to hit 4 dollars a barrel in the midwest and we aren't even in spring yet let alone summer.  We are going to have a market crash this March if not April.

Sat, 02/23/2013 - 18:33 | Link to Comment Seize Mars
Seize Mars's picture

Carl Jung called events which occur with high correlation (but no causation) "synchronicity."

In this case I think both variables (gas prices and equity prices) are both "caused by" inflation. So they are both "from" the same source. imo.

Oh, and "Bitchez, bitchez."

Sat, 02/23/2013 - 18:35 | Link to Comment PUD
PUD's picture

God forbid "con"sumers stop "con"suming mountains of useless landfill on credit. OMFG!!!

Sat, 02/23/2013 - 18:43 | Link to Comment francis_sawyer
francis_sawyer's picture

2013 = 2007... February 27th will be the 'Arnold Rothstein' signal that the fix is on...

~~~

Sincerely Yours,

Titanic Thompson

Sat, 02/23/2013 - 18:38 | Link to Comment Charles Nelson ...
Charles Nelson Reilly's picture

Think I saw The Ben Bernank pull out of Fed headquarters on Friday in one of these http://m.youtube.com/#/watch?v=Nqx5WT1eZ7k&desktop_uri=%2Fwatch%3Fv%3DNq...

I knew it was him because it had vanity Virginia tags that said "MONEYMKR"

Sat, 02/23/2013 - 19:04 | Link to Comment mind_imminst
mind_imminst's picture

The FED cannot stop QE. If history is any guide, the FED will keep printing and destroying the wealth of the middle and lower classes. The government will be cajoled into price controls, punishing evil "speculators", and outlawing competing currencies. We all know the script.

Sat, 02/23/2013 - 19:11 | Link to Comment eclectic syncretist
eclectic syncretist's picture

What are you going to do now Bernanke, you stupid motherfucker??!!!  Print a shitload more debt IOUs FRNs out your bankster drilled ass?  Don't you know that's what created this mess in the first place?

Sat, 02/23/2013 - 22:00 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

@ mind_

Yes, the time to start getting prepared for Hard Times was yesterday.

Sat, 02/23/2013 - 18:42 | Link to Comment balolalo
balolalo's picture

This sure looks like the good ole peak-oil bumpy plateau.   

I wonder how long fracking can keep this game going?  

drill baby drill 

Sat, 02/23/2013 - 18:47 | Link to Comment jballz
jballz's picture

I would like to know when the domestic oil boom is going to get us back to a nickel a gallon.

Can we stop selling the excess to the chinks already? We gave them the blueprints for th bicycle, that seemed to work fine for a long time. Then we gave them ijobs and now they want our fucking gas.

No more exporting distillates until we are under a dollar.

Get on your bikes and ride, bitchez.

Sat, 02/23/2013 - 18:54 | Link to Comment jballz
jballz's picture

 

That's racist!

You should be ashamed of yourself.

Besides, it's the Jews fault, not the chinks. Haven't you been reading ZH comments long enough to have figured that out?

Sat, 02/23/2013 - 19:00 | Link to Comment jballz
jballz's picture

good point. +100

Sat, 02/23/2013 - 22:01 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Of course it's the juice fault.

Sun, 02/24/2013 - 18:10 | Link to Comment El Crusty
El Crusty's picture

 not saying that i agree with his choice of words but you should be ashamed of yourself for jumping on the P.C. bandwagon.  sugar-coating the truth is never a good idea.

Sat, 02/23/2013 - 19:07 | Link to Comment Gamma735
Gamma735's picture

While the Fed prints money oil behaves more like a currency instead of a commidity.

Sat, 02/23/2013 - 20:51 | Link to Comment Things that go bump
Things that go bump's picture

The oil that comes out of our ground isn't our oil, any more than the oil in Kuwait is the Kuwaitis. It is sold on the open market and hell take the hindmost.

Tue, 02/26/2013 - 14:31 | Link to Comment Dr. Engali
Dr. Engali's picture

The domestic "oil boom" will die if oil goes under $80 per barrel for an extended period of time. It's not cost effective to take it out of the ground for any price below that. So kiss $ 1.00 gas goodbye... it's gone forever.

Sat, 02/23/2013 - 19:01 | Link to Comment Gamma735
Gamma735's picture

Tyler, can you chart Gas Prices, S&P500 and the different QEs?

Sat, 02/23/2013 - 19:03 | Link to Comment ekm
ekm's picture

That's the only thing that matters, absolutely the only thing that halts QEs: CRUDE OIL PRICE

 

I've read a long time ago an article about how macro guys at big, like big hedge funds do their calculations. It seems that there are only a handful MACRO managers at hedge funds, since only few people can handle the duty.

 

Calculations were based on Brent Crude at $80 as the threshhold of pain for the world economy. Any dollar above brent $80 for longer than 6 months, the economy would literally stall. However at brent $90 and above for longer then 6 months, the western economy and the world one would simply start contracting.

Brent has been at $110 for as far as I can't remember at this point. The way I see it, the western and the world economy has contracted by 3-5% during the last 18 - 24 months, only due to crude oil price.

 

That's why I say, all the oil in tankers will be unloaded very, very soon. WTI will go as low as $15 temporarily this year, my prediction.

Sat, 02/23/2013 - 19:31 | Link to Comment reload
reload's picture

You keep articulating this scenario: and I keep trying to get my head around it ! A flash crash of spec long pain? Maybee-but production costs and the ample reasons we could see problems with production and delivery from the ME just have to put a strong bid under the market in the 70/80 dpb range (Brent).

I also wonder if the floating tankered inventory is a defacto boost to the strategic reserve for use/rationing in case of supply disruption.

Time will tell, I think I understand your logic (& can observe ample demand destruction here in the UK) but I still struggle to see a collapse in price.

 

 

Sat, 02/23/2013 - 19:38 | Link to Comment ekm
ekm's picture

Let's assume the flash crash won't be allowed to happen. Then:

 

Shortage of energy (from the real economy) = Starvation.

 

It happened in 2008 because Bush gave the order. Those tankers are owned by primary dealers and other major euro banks who cannot exist without gov support since they are insolvent. Indirectly, those tankers are owned by the governments.

 

They will flood the market, otherwise...starvation.

Sat, 02/23/2013 - 20:06 | Link to Comment Nid
Nid's picture

Are the floating inventory tankers accompanied by Naval vessels?

Sat, 02/23/2013 - 20:10 | Link to Comment ekm
ekm's picture

The whole point of having a US Navy or a Canadian Navy or a Roayl Navy is for that purpose, to protect trade routes and trade vessels.

 

However, excessively stored oil is not only offshore. It's also onshore.

Sat, 02/23/2013 - 21:06 | Link to Comment OutLookingIn
OutLookingIn's picture

Visions of 'Water World.'

 

Sat, 02/23/2013 - 21:15 | Link to Comment ekm
Sat, 02/23/2013 - 20:16 | Link to Comment ekm
ekm's picture

I wouldn't be surprised at all, actually I do expect, that the current QE is either being slowed down or will be slowed down or outright halted temporarily during the march fed meeting.

 

That would be by WH orders, not by.....debates....at the Fed. Fed members are simply academic figures. The Fed chairman takes orders from WH/Congress and thus is done. PERIOD.

Sat, 02/23/2013 - 21:13 | Link to Comment Dr Paul Krugman
Dr Paul Krugman's picture

The Fed is independent from the White House/Congress.

Sat, 02/23/2013 - 21:24 | Link to Comment akak
akak's picture

Yes, they enjoy the kind of 'independence' that sociopaths and authoritarians always dream of: perfect unaccountability.

Sat, 02/23/2013 - 21:25 | Link to Comment nmewn
nmewn's picture

lol...not since Dodd-Frank.

I'll just go ahead and assume you can read and have some novice concept of the difference between regulators vs the regulated.

http://www.federalreserve.gov/newsevents/reform_milestones.htm

Take it away Paulie ;-)

Sat, 02/23/2013 - 22:39 | Link to Comment CompassionateFascist
CompassionateFascist's picture

Nobody tells the Rothschilds what to do. The RedSchield/Tribe owns the Fed/NY Banks. The RedSchield/Tribe owns the gubmint. In fact the RedSchield/Tribe owns everything in America except the 'net and several hundred million guns. And it's grabbing at that/those too. Will the grab succeed before the Universal JewPonzi collapses? That's the essential question. And none of this is new:

 

Meyer Anselm R. at his office  desk in London. A knock at the door.

 

Meyer Anselm R.: "come in"

 

      (someone enters, seeking loan)

 

Meyer Anselm R., w/o looking up: "take a chair"; continues to study documents, still w/o looking up. After a considerable interval, 

 

entrant: "I am ze Prince ovf Thuringen und Taxis!

 

Meyer Anselm R., continuing to study documents: "take 2 chairs"

 

 

Sun, 02/24/2013 - 01:06 | Link to Comment tip e. canoe
tip e. canoe's picture

lol...not since Dodd-Frank.

i thank slewie the pi-rat (rip) for making me wise to that.

remember when he was hammering that point incessantly for about a month?

sometimes the moonbats are right ;~)

Sun, 02/24/2013 - 08:48 | Link to Comment imbtween
imbtween's picture

the federal reserve BOARD is a gov entity and is thus accountable. The federal reserve banking system is neither a government agency nor is it accountable.

Sat, 02/23/2013 - 22:08 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

He's baaaaacckk!  The odious and evil Dr Paul Krugman! 

Battlestations!  Get out the silver crosses!  Silver bullets...

Sat, 02/23/2013 - 22:13 | Link to Comment nmewn
nmewn's picture

lol...surely the mere mention of DoddFrankenstein wasn't enough to send him scurrying back into the catacombs?

Sun, 02/24/2013 - 17:49 | Link to Comment Mi Naem
Mi Naem's picture

"if the floating tankered inventory is a defacto boost to the strategic reserve"

Agreed. 

And, I think that the ammo shortage is, in large part, fed driven shortages due to mandatory allocation of production capability to meet enormous orders from .... the feds. 

 

War.

Soon. 

And we're in it. 

Up to our eyeballs. 

Sun, 02/24/2013 - 02:49 | Link to Comment Non Passaran
Non Passaran's picture

Sure, and paper gold will drop to $300...

Sun, 02/24/2013 - 18:24 | Link to Comment El Crusty
El Crusty's picture

you are correct except for the bit about WTI going to $15.  when a large portion of a consumer based economy is driven by people making less than 30k a year, the cost of gas going above $3 a gallon at the pump puts a huge strain on most of those household budgets. if you go fromm spending $40-$50 a week to $90-$100 a week in gas just to get back and forth to work when you take home around $300 a week in pay thats like recieving an almost 20% paycut. and you have to get to work so the money comes from other areas, aka consuming.

the fact that walmart has had the worst febuary sales in 7+ years confirms this.

on a side note- the local Aldis parking lot is almost always full. buisness there picked up so much that they built a new larger store 3 years ago and have been bustling ever since.

Sat, 02/23/2013 - 19:02 | Link to Comment debtor of last ...
debtor of last resort's picture

Well, small Japanese 0,8 liter, 3 cylinder cars coming your way Americano's.

What about the Toyota Fuku Greenglow Special Abenomics Edition? Full options including a 'Fuck you Bernanke' holograph bumpersticker.

Sat, 02/23/2013 - 19:04 | Link to Comment World of Debt
World of Debt's picture

Funny video concerning the world debt crisis!

 

https://www.youtube.com/watch?v=IrHiYxDbnMY

Sun, 02/24/2013 - 17:44 | Link to Comment Mi Naem
Mi Naem's picture

Don't waste your time. 

I got about 10- 15 seconds into it, and wished I hadn't waited that long to turn it off. 

 

Sat, 02/23/2013 - 19:10 | Link to Comment NoWayJose
NoWayJose's picture

What the Fed really wants is inflation of housing prices, because that will make whole all the underwater mortgages held by the banks. The problem is that liquidity inflation cannot be targeted only at houses, and by increasing gas and food prices, the Fed actually makes it harder for consumers to afford houses - defeating its own liquidity and low rate benefits!

Sat, 02/23/2013 - 19:38 | Link to Comment Solarman
Solarman's picture

Sure the can. It is so simple it is stupid.  Bring all home loans down to 1-2% fixed all owned by the Fed, and at the same time raise interest rates to 1-2% or more.

 

The conomy is unleashed and there is competition from consumption and the stock market with fixed income returns.  Adjust the interest rates to control inflation over time.

 

The reason they won't do it, is it screws the wealthy bondholders at the banks.

Sat, 02/23/2013 - 19:16 | Link to Comment The Heart
The Heart's picture

"it appears the only thing that can tame the enthusiasm of a liquidity-addicted equity market is a cash-strapped consumer pulling back."

The cash strapped consumer is who has been tamed. The new in-country thing to do is not drive, stay home on Friday and Saturday nights, make more of the family meals at home from scratch, and eat preserved home grown organics. As planed to control the people, they are well tamed. No money to do anything but barely survive. As far as future projections in the prosperity department are concerned, ain't never gonna happen as long as these critters keep controlling the world by creating wars to cover-up the out of control world domination corruptions, and criminal activities of the evil warmongering profiteers from death and destruction.:

http://www.guardian.co.uk/business/2013/feb/22/lloyds-chief-executive-bonus

What to do? Follow the leader.:

http://www.blacklistednews.com/Iran_to_Execute_4_Bankers_on_Fraud_Charge...

Sat, 02/23/2013 - 19:34 | Link to Comment El_Puerco
El_Puerco's picture

http://www.youtube.com/watch?v=jeYscnFpEyA

 

If you want to be 10 millions + people watching this...

 

:)

Saludos...

Sat, 02/23/2013 - 19:56 | Link to Comment Floodmaster
Floodmaster's picture

Dumbest Right-Wing video Ever

Sat, 02/23/2013 - 22:11 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Un verde por español!

Mmm, a barbecue pork sandwich would be nice now, mmm...

Sat, 02/23/2013 - 19:38 | Link to Comment Tic tock
Tic tock's picture

Firstly, if a central-banker says one thing.... Secondly or whatever, notwithstanding that the price of crude's ever so slightly goal-seeked - also that the US consumer has been out-of-pocket for a little while now, there is no end in sight. At the bottom of the box there's only a couple of grams of gold and your ex-wife's silver earrings. There is no trust, there are no Banks, protection-money to thugs - All Hail Greenspan, first priest of Mammon. But seriously, do 'they' really think that at this point the world is just not laughing at their paltry circus, theat the illusion of a market can be pulled out of hat? They had no understanding when this started, they have no understanding now, and with every lie issued the meek become more united against this lack of justice. They rail harder and focus longer ... like that Tyler Durden and that chick he shacked up with

Sat, 02/23/2013 - 19:59 | Link to Comment Nid
Nid's picture

Let's see that bearded menace fuck-stick print some 89 Octane unleaded.

Sat, 02/23/2013 - 20:09 | Link to Comment Rentier
Rentier's picture

Gas prices have past and blew through the $3.80 level already...old news here nothing to see move along.

Sat, 02/23/2013 - 20:12 | Link to Comment Ribeye
Ribeye's picture

$3.80 a gallon? Lol:)

A litre of juice for the Ribmobile costs €1.70 here, thats about $2.25,

And there's four and a half litres in a gallon,

Yep, that's right, not many Shelby Mustangs gonna be sold in Europe,

About 65% of the price is taxation,

I don't know why you lot are all so afraid of Socialism, it's great:)

Sat, 02/23/2013 - 22:14 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Three and a half liters per gallon, no?  Still, that's a horrific $8.00 or so a gallon.  Yopeens!  Start taking your bikes!  We're next!  Show us our future...

Sat, 02/23/2013 - 22:30 | Link to Comment tom a taxpayer
tom a taxpayer's picture

Rumor is Lance Armstrong is selling a new brand of bikes: the Tour de Farce.

Sun, 02/24/2013 - 05:11 | Link to Comment Mark Urbo
Mark Urbo's picture

His new rubber wrist braclet will be the color of his one and only good test specimen and be very rare to find...

Sun, 02/24/2013 - 10:37 | Link to Comment Racer
Racer's picture

$10.125 a gallon

Sun, 02/24/2013 - 12:16 | Link to Comment SuSpencer
SuSpencer's picture

$7.15 a gallon for diesel here in Poland. Luckily, the mobile averages about 50 mpg and we don't need to drive very often.  We've put less than 3000 miles on it in the last year.  Still makes my eyes water when it says 300PLN to fill the tank...

Sun, 02/24/2013 - 16:50 | Link to Comment Westcoastliberal
Westcoastliberal's picture

Which is why in Amsterdam you'll see parking garages full of bicycles instead of car.  I saw one mother on her way to work riding a bike in a skirt with one kid behind her and one in the front basket.  Amazing what people can do to survive when they're forced.

Sat, 02/23/2013 - 20:42 | Link to Comment shinobi-7
shinobi-7's picture

The price of gas is irrelevant just as the price of oil because it can and is manipulated. What counts is the price of oil extraction especially of the marginal kind. It is going up relentlessly shocking out growth all over the world. Growth is already negative in Europe and Japan. It will soon be in the US. China will take a little longer but not that much. By 2016 “new oil” will be well above 80 dollar per barrel and peak oil will be reality. There will still be plenty in the ground though.

Sun, 02/24/2013 - 02:38 | Link to Comment Non Passaran
Non Passaran's picture

> By 2016 “new oil” will be ...

Why is this peak oil always few years in the future?
And considering that many here claim and agree that prices of oil and gas are manipulated, what's the point of making any "predictions"?

Sat, 02/23/2013 - 20:43 | Link to Comment bugs_
bugs_'s picture

when my 15 gallon tank times the gas price > 50 its scary even when i'm bearish

Sat, 02/23/2013 - 20:50 | Link to Comment Edward Fiatski
Edward Fiatski's picture

QE4EVA!

Sat, 02/23/2013 - 21:19 | Link to Comment monopoly
monopoly's picture

OOOps.

 

Sat, 02/23/2013 - 22:07 | Link to Comment DarthVaderMentor
DarthVaderMentor's picture

Yes, .380 is a very scary number, whether in SPL or ACP....

Sat, 02/23/2013 - 22:26 | Link to Comment ebworthen
ebworthen's picture

The whole economy is such a crock of bullshit.

Gas up, gas down, gas up, gas down.

Robot algos, hedge funds, and pensions in and out of sectors in that order.

Who is getting whiplashed by it?  Why, normal working people on main street of course.

Who is getting rich by whipping the common citizen?  Wall Street and Washington of course.

Don't invest in the markets, don't leave money in the bank, don't put money in an IRA or a 401K or you are just supporting your own slavery.

It is that simple.

Sun, 02/24/2013 - 00:37 | Link to Comment joego1
joego1's picture

Gas is $4.00 here in northern california. My friend just told me that the state was looking for people with ponds with planes and fining them tens of thousands of dollars. I have a duck pond, God help me. I just paid a bill for "fire services" for $140 because the state decided that I lived in a "fire prone area". The money doesn't go to the fire service it goes into the black hole general fund. It's really insulting to me because I'm on the volunteer fire department. I can't wait for the next barrage of bull shit.

Sun, 02/24/2013 - 10:39 | Link to Comment Mediocritas
Mediocritas's picture

As energy prices rise, disposable income for consumers decreases, costs for producers increases, margins compress and companies lose the ability to make any money from people buying their stuff, FEAR NOT! The Fed has the answer!!

 

-- Who the hell needs such quaint, antiquated concepts as "customers", "products", "services", "sound management", or a "business model"? That stuff is all just a pointless cash-burn and requires yet another obsolete concept: "employees". What a waste, just liquidate them all. Make money from issuing more shares instead, there's a permabid guaranteed by the Wizard himself!

 

-- Worried about diluting your shareholders and getting a bad name? Don't be, the boomers who are dumb enough to hold your shares through dilution were cutting back on buying your shitty former products anyway, so consider this justice. You'll get their money one way or another. Pretty soon you'll only have 5 shareholders left (banks) but fear not because they don't care about being diluted when the Fed's giving them free money.

 

-- And you know the best thing? The more you push it and the more you turn your former real business into a vapor scam of just one dude issuing more shares in perpetuity, the more you'll attract those idiotic short-sellers like moths to a flame, you know, the ones who still think that running a sound business is required in order to be profitable. HAHA suckers!

 

-- Suck those bears in until short interest is about 70% of your float, then use some of your left-over cash from the last issuance to buy back some stock with big dumb blocks. You'll attract all the heat-mapping robots and they'll do you the service of hunting all those bears' stop-losses for free, creating an epic short-squeeze in the process that pulls in the rest of the bots and some fresh sucker bulls. Your 5 shareholders will love you, allowing you to then dilute them (and the fresh meat) once more at the top. Rinse and repeat. Only the losers lose, suck it losers!

 

-- It works great until the 99.9% of people who aren't in on the scam start losing all hope because they can't afford to buy even food. They'll eventually pull out their guns and overwhelm whatever is left of the police force that you were buying off so cheaply up until now, but hey, you've already got your overseas gated community locked and loaded with a bug-out Learjet on standby, so fuck 'em, fuck 'em all.

 

-- They won't come after you because they're too ignorant to know who to blame. Wait until they're done shitting in their own nests and then return to re-conquer.

/sarc off

Sun, 02/24/2013 - 01:09 | Link to Comment tip e. canoe
tip e. canoe's picture

awesome chart tyler.   and mad props to ekm & steve from VA for drilling the point into me skull.

it's all about the petrol bitchez.

Sun, 02/24/2013 - 02:07 | Link to Comment q99x2
q99x2's picture

They are dropping the price again.

Sun, 02/24/2013 - 04:06 | Link to Comment ozzz169
ozzz169's picture

correlation is not causation both are predominately driven by overall economic conditions. you could argue that 3.80 causes economic instability, but that is not very logical, people dont just say oh there is 3.80 a gallon I am going to stop spending money... its much more continuous, and in fact people adjust slowly over time to higher gas prices and each time reach the high levels the impact will be less. in fact it looks like the s&p is the more forward looking of the 2 and leading the gas prices, which makes intuitive sense as well.

Sun, 02/24/2013 - 08:35 | Link to Comment DutchR
DutchR's picture

"Is 3.80 The Scariest Number For The Bulls?"

 

No, it's .308

 

 

Sun, 02/24/2013 - 09:25 | Link to Comment Bagbalm
Bagbalm's picture

I don't see any lag in the chart. Perhaps an unseen third factor is driving them both. Or perhaps gains in the market drive up gas prices.

Sun, 02/24/2013 - 10:23 | Link to Comment NEOSERF
NEOSERF's picture

$3.65 is the new $3.80 now as my real income has declined over the last several years.

Sun, 02/24/2013 - 10:57 | Link to Comment MeBizarro
MeBizarro's picture

Looking at the price of gasoline in the US tells you little about the economy and more importantly energy markets.  The real issue has been the marginal price of extraction for producers and suppliers who need oil above at least $60/barrel to make any deep water rig profitable enough for extration & $80/barrel to make the tar sands and shale (closer to $90/barrel) oil in the US.  

If you look since 2000, global oil production levels has barely increased despite double digits annual rates of global investment in extraction prior to the downturn in '08 and again in '11 and '12.  That's the crux of the problem where is it is taking more and more invest dollars just to remain current levels of extraction.  It means the price remains high stunting overall economic growth and sucking up additional dollars that could have gone into savings or other investments.  

What the Fed and Central Banks are doing to currencies is largely just a reaction to this problem.  The most ridiculous part is when you here all of the idiots who have latched on to the idea that fracking in the US is going to make us 'energy independent' including from oil.  There is complete and utter nonsense yet it has obtained serious viability among the economic community and even the public.  Only thing fracking does at best is temporarily put a bandaid on a festering wound and one that doesn't last long given incredibly fast depletion rates from natural gas wells derived from fracking.  It might buy the US 10-15 years at the most and that is only if we go full-bore. 

Sun, 02/24/2013 - 14:20 | Link to Comment robertocarlos
robertocarlos's picture

I need about tree fitty.

Sun, 02/24/2013 - 16:44 | Link to Comment Westcoastliberal
Westcoastliberal's picture

Pumped in $50 worth of unleaded regular @ $4.29 a gallon yesterday.  Not enough to even fill the tank. Our here in the exburbs of LA, I'm doubtful commuters can stand this much longer.

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