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How To Blow Up OPEC In Three Easy Steps

Tyler Durden's picture




 

By Raúl Ilargi Meijer of The Automatic Earth

How To Blow Up OPEC In Three Easy Steps

It’s easily been longer than I care to remember that I first wrote it was only a matter of time before individual OPEC members would throw out the cartel’s agreements on prices and production, and just produce at full force and capacity, and then some. We may have seen that time arrive.

The underlying reason I first talked about it was two-fold. First: the economic crisis, which could lead to one thing only: less global demand. And second: the fast increasing wealth and population numbers in oil-producing nations which, as initially defined by Jeffrey Brown and Sam Foucher in the Export Land Model, has proven to be a much bigger factor in OPEC economies than people realized.

Hardly anyone, still to this day, talks about the Export Land Model, but birth rates in Arab oil producing nations have been sky-high for many years, and the fact that in a country like Saudi Arabia some 50% of the population is younger than 20 years old, has enormous consequences domestically. Certainly with the King and the rest of the reigning class seriously getting on in age.

A generational clash can be avoided only by pampering the young, and that comes with a big surge in domestic demand for oil. And since for many young people there are no jobs, Saudi Arabia has no industries to speak of, there are many who follow the example of Saudi’s like Osama Bin Laden into extremism.

Wait, first let me point to a nice piece of Fed ‘communication’. There’s been an entire parade of Fed heads paraded in the media lately, and one of the major issued addressed is that the global slowdown, which finally looks to have sunk in all over the place, would cause Yellen et al to be careful with, and postpone if needed, its interest rate hikes. Analysts and ‘experts’ also look to be wholly convinced of this. But then comes vice head Stanley Fisher and says a rate hike wouldn’t hurt anyone anyway:

Fed’s Fischer Says Rate Hike Won’t Damage Global Economy

 

The Federal Reserve’s eventual rate increase, the first since 2006, will not damage the global economy, Federal Reserve Vice Chairman Stanley Fischer said on Saturday. While there could be “trigger further bouts of volatility” in international markets when the Fed first hikes, “the normalization of our policy should prove manageable for the emerging market economies,” Fischer said in a speech at the IMF’s annual meeting.

 

[..] Since last year, Fischer said, the Fed has “done everything we can, within limits of forecast uncertainty, to prepare market participants for what lies ahead.” The Fed has been as clear as it can be about the future course of its policy course, and markets understand, Fischer said. “We think, looking at market interest rates, that their understanding of what we intend to do is roughly correct … ”

Any emerging market governments paying attention should feel a shiver of cold air when reading that. Fisher provides the Fed with an alibi here: if, make that when, rate hikes start makes victims, Fisher and Yellen can say they had no idea, that their models clearly stated that would not happen. Don’t count on them waiting.

Then back to OPEC. Like the EU, 54-year old OPEC has lived past its best before date. Predictably, individual members’ interests have started to diverge too much for it to remain a coherent entity. And the divergence widens fast these days.

I’ve hinted before at the long-standing cooperation between the US and Saudi Arabia, and there’s little doubt in my mind that the two are up to something. Washington has it in for Putin, first and foremost. The ‘Ukraine project’ has not brought what was intended.

Russia also still stands behind its only Middle East sphere of influence, Syria, something the Saudis like as little as America (but which Moscow won’t give up and and end up with zero say in the region) . And there’s always Venezuela, OPEC member and very vulnerable to power oil prices. Then there are a dozen other possible ‘targets’ among oil producers that the Saudi/US partnership may want to weaken. Who likes Iran, for one thing?

We’ve known for a while that the Saudis were lowering their prices. Which is something other OPEC members will be plenty upset about. But now we find out they’re also increasing production, and trying to catch EUropean and Asian customers before other fellow members can. That adds a whole extra dimension to the story:

Saudis Make Aggressive Oil Push in Europe

 

Days after slashing prices in Asia, Saudi Arabia is now making an aggressive push in the European oil market, traders say. The kingdom is taking the unusual step of asking buyers to commit to maximum shipments if they want to get its crude. “The Saudi push is not just in Asia. It’s a global phenomenon,” one oil trader said. “They are using very aggressive tactics” in Europe too, the trader added.

 

This month, state-owned Saudi Aramco stunned the rest of OPEC by slashing its November prices to defend its market share in Asia’s growing market. The move, setting a price war in the oil-production group, was combined with a boost in the kingdom’s output in September.

 

But Riyadh is also moving to protect its sales to Europe, a declining market where it is facing rivalry from returning Libyan production. After cutting its November prices there, Saudi Aramco is also asking refiners to commit to full, fixed deliveries in talks to renew contracts for next year, the traders say. [..] “They are threatening buyers” to discontinue sales if they don’t agree with the fixed deliveries, another trader said.

What follows from that is that Saudi Arabia more or less unilaterally decides where oil prices are going. Iran and Iraq have already announced price cuts, and the rest has no choice but to follow, no matter how badly they need higher prices. It’s a kind of musical chairs, and quite a few nations will fall be the wayside. Though not necessarily Russia.

Algeria and Kuwait, for whatever reasons, seem to be lined up with the Saud family against the rest of OPEC:

Oil Bear Market Tests OPEC Unity as Venezuela Seeks Meeting

 

Oil ministers from Kuwait and Algeria dismissed possible production cuts as crude’s slump to a four-year low prompted Venezuela to call for an emergency meeting of OPEC. [..] Bear markets for Brent and U.S. crude are putting pressure on OPEC’s consensus on output ahead of the group’s scheduled Nov. 27 meeting in Vienna …

 

OPEC supplies 40% of the world’s oil, and its largest Persian Gulf producers, including Saudi Arabia, Iraq and Iran, are offering deeper discounts to buyers in Asia to maintain market share amid a global glut. “If we had a way to preserve the stability of prices or something that would bring it back to previous levels, we would not hesitate in that,” Kuwait’sAl-Omair said in remarks reported by KUNA yesterday. “There is no room for countries to reduce their production,” he said, without giving details.

 

Ample supply, helped by surging U.S. and Russian output, pushed Brent crude into a bear market last week. The European benchmark slumped more than 20% from its peak for the year on June 19, meeting a common definition of a bear market. Brent fell on Oct. 10 to its lowest since December 2010.

 

“This is going to increase pressure for Saudi Arabia to cut output to raise prices …” “They are increasingly giving signs they won’t do it on their own. Saudi Arabia doesn’t want to lose market share in Asia … ”.

 

OPEC is boosting production as its members fight for market share and seek to meet rising domestic demand. [..] Saudi Arabia, Iran and most recently Iraq all widened the discounts they’ll offer on their main grades sold to Asia next month to the most since at least 2009.

 

Venezuelan President Nicolas Maduro gave instructions to ask for an extraordinary OPEC meeting, the country’s foreign ministry said in a post on its Twitter account on Oct. 10. “The price of oil is important for our country, and we’ll start actions to stop its fall,” the ministry cited former oil minister Rafael Ramirez as saying.

 

Crude prices have fallen because of several factors, including U.S. shale production, geopolitics and speculation, Algeria’s Yousfi said yesterday at a news conference in the city of Oran. “We follow with great attention the level of oil prices, but we are very tranquil,” he said. Crude probably won’t fall below $76 to $77 a barrel because that price level represents the highest cost of production in the U.S. and Russia, Al-Omair of Kuwait said. Both countries have abundant supply and are outside the group..

‘There is no room for countries to reduce their production’, says Kuwait. In other words, it’s everybody for themselves. Because supply and demand numbers seem to indicate there’s lots of room to cut production. So that can’t be it. Still, production rises in Saudi Arabia, US, Russia and undoubtedly many other producing nations. What else can they do when prices fall, but try and sell higher volumes to the highest bidder, as demand wanes in a shrinking global economy that’s done blowing bubbles? There’s nothing left but to pump all out and hope for the best.

OPEC Members’ Rift Deepens Amid Falling Oil Prices

 

A rift between OPEC members deepened over the weekend, as producers in the cartel moved in different directions amid falling oil prices. Venezuela, which has been one of the most outspoken proponents of a production cut by the Organization of the Petroleum Exporting Countries, called over the weekend for an emergency meeting of the group to respond to falling prices. But Kuwait said Sunday that OPEC was unlikely to act to rein in output.

 

Also on Sunday, Iraq’s State Oil Marketing Company cut the price of Basrah Light crude in November for Asian and European buyers by 65 cents to a discount of $3.15 a barrel below the Oman/Dubai benchmark for Asian customers and $5.40 below the Brent benchmark for European customers…

 

The moves and countermoves are the latest in a time of particular discord in OPEC. The organization was founded to leverage members collective output to help influence global prices. In recent periods of low prices, Saudi Arabia, OPEC’s top producer and de facto leader has managed to cobble together some level of consensus.

 

But even modest cooperation between many members has broken down, and Saudi Arabia, in particular, has moved to act on its own. While it cut output earlier this summer, other members didn’t go along. Since then, it has dropped its prices.

 

Each member has a different tolerance for lower prices. Kuwait, the United Arab Emirates and Saudi Arabia generally don’t need prices quite as high as Iran and Venezuela to keep their budgets in the black.

The 3 easy steps to blow up OPEC are easy indeed. The question may be why now, and why the way it happens. But that it’s happening is clear.

  • Step 1: raise output
  • Step 2: lower prices
  • Step 3: watch member nations’ governments go down like cats in a sack, trying to keep control of their societies.
  • Step 3a: yank up the US dollar

This is not a purely economic issue, it’s political. The US has a large voice in it in the director’s role, and the House of Saud plays the part of the protagonist. This is a major development in world politics, it’s not just some financial market-driven move.

World power relations are being hugely changed on the fly as we’re all watching and trying to figure what to make of all this. One thing’s for sure: the world will never be the same.

Why it happens now is a great question, which is impossible to answer. And that’s fine: it’s enough to try and understand exactly what is going on, let alone why.

But I bet you it has to do with the US and Europe realizing they can no longer keep pretending their economies are growing or recovering or doing fine.

We’ve landed in the next phase of what arguably started in 2007, but what you could place back many years before that, an economic system based on the fantasy that is debt driven growth, inflated by a factor of a trillion, give or take a few zeros.

That system is in the process of dying. And the people who have tried to make you believe, and succeeded, that it would all be fine in the end, are now jockeying for position in the aftermath of the demise of a world built on debt.

And they are the same people who built that world, profited from it to an insane degree, and want to use those profits to hang on to power in a world that will be dramatically different from the one they called the shots in. And that doesn’t bode well; it tells us violent clashes will be on the horizon.

 

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Mon, 10/13/2014 - 20:50 | 5326866 WillyGroper
WillyGroper's picture

Nothing is as it seems.

Mon, 10/13/2014 - 21:02 | 5326916 kliguy38
kliguy38's picture

KC just isolated its first possible EBOLA case......hmmmmmmstarting to get too close now

Mon, 10/13/2014 - 21:04 | 5326922 walküre
walküre's picture

confirmed or suspected?

Mon, 10/13/2014 - 21:08 | 5326929 X.inf.capt
X.inf.capt's picture

there will be more...

lots more...

the time to have left Pompei is at the first sign of smoke...

those who thought no biggie...well...

 

Mon, 10/13/2014 - 21:10 | 5326942 walküre
walküre's picture

maybe.. saw a bunch of pics from Sierra Leone where guys in hazmat suits come to take away the dead from the houses.. family members still living there and in close contact

if it was truly airborne we would have a million dead by now

how did Ebola outbreaks stop in the past? Either this has mutated already or it's simply a problem of increased population and therefore increased victims.

Mon, 10/13/2014 - 21:12 | 5326963 espirit
espirit's picture

...KC using surgical masks.  Buahahahahha!

http://www.kansascity.com/news/local/article2707328.html

Mon, 10/13/2014 - 21:16 | 5326976 walküre
walküre's picture

Protocol Breach!!!!

Mon, 10/13/2014 - 21:18 | 5326989 ZerOhead
ZerOhead's picture

Proctological Bleach!!!

Mon, 10/13/2014 - 21:20 | 5326998 walküre
walküre's picture

probably just Denghe... Frieden does't need to have a press conference

Mon, 10/13/2014 - 21:30 | 5327022 espirit
espirit's picture

Somebody ought to notify KC that the CDC has different protocols in place.

 

Their ignorance is getting ugly. 

Mon, 10/13/2014 - 21:26 | 5327024 Newsboy
Newsboy's picture

This new Ebola is unlike any Ebola before. This one is far more contageous human to human, and there is not yet any certainty as to how.

It does seem super infectious in the last 2-3 days of a person's life, when the viral load has exploded to near-infinity, and the virions are oozing out of every bloody hole.

 

Mon, 10/13/2014 - 21:34 | 5327054 walküre
walküre's picture

there's only one way to deal with patients who are not responding to any treatments ... do I need to say it?

Mon, 10/13/2014 - 22:18 | 5327201 TheReplacement
TheReplacement's picture

Sell them as bush meat?

Sell their organs to the Chinese?

Use them for shark bait?

Help them in every way possible as humanely as possible while maintaining maximum safety for the caregivers?

Tue, 10/14/2014 - 00:19 | 5327579 walküre
walküre's picture

right to die... euthanasia and go to sleep in a body bag to minimize the risk of further spread

when you're the human toxic bomb-to-be.. the choices are limited

Mon, 10/13/2014 - 22:20 | 5327214 KnuckleDragger-X
KnuckleDragger-X's picture

We don't do that anymore, though that may change...

Tue, 10/14/2014 - 00:23 | 5327582 Kirk2NCC1701
Kirk2NCC1701's picture

C'mon baby light my fire...

Tue, 10/14/2014 - 00:40 | 5327607 Yen Cross
Yen Cross's picture

 My sisters cat is named Morrison.

  Gotta love the Doors

Tue, 10/14/2014 - 01:19 | 5327655 Things that go bump
Things that go bump's picture

It might come to that and there is the distinct possibility they will try to round up everyone they've come into contact with for FEMA camp quarantine. 

Tue, 10/14/2014 - 04:16 | 5327750 css1971
css1971's picture

Whitehouse tour?

Tue, 10/14/2014 - 01:07 | 5327642 Toxicosis
Toxicosis's picture

Neither Dengue fever nor Ebola seem all that attractive to acquire.  Either bleed to death or spike a massive fever and feel as if everything is breaking in two.

Mon, 10/13/2014 - 21:16 | 5326982 Dr. Engali
Dr. Engali's picture

Ebola outbreaks in the past ran their course once the whole village died off. We are in a whole new ball game now.

Mon, 10/13/2014 - 21:20 | 5326997 Rob Jones
Rob Jones's picture

Cheap air travel has made the world a global village.

Mon, 10/13/2014 - 21:20 | 5327001 walküre
walküre's picture

yes, that's part of it

Mon, 10/13/2014 - 21:25 | 5327017 ZerOhead
ZerOhead's picture

We are heading in that direction... still I don't see any reason why this outbreak can't be contained. Other than sheer stupidity or intentional malice that is...

Mon, 10/13/2014 - 22:19 | 5327212 TheReplacement
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"sheer stupidity or intentional malice"

sheer stupidity and intentional malice

FIFY

Mon, 10/13/2014 - 22:23 | 5327224 KnuckleDragger-X
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To contain it will require a hard-ass to make tough decisions....and meanwhile on the 14th green.....

Mon, 10/13/2014 - 23:11 | 5327370 Radical Marijuana
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Hanlon's Razor, which presumes incompetent stupidity, rather than evil malice, does not stand up against the avalanche of evidence and logical arguments which demonstrate that social pyramid systems based on enforcing frauds did not happen by accident!

Tue, 10/14/2014 - 01:08 | 5327645 Toxicosis
Toxicosis's picture

Literally you would have to screen all passenger flights from Africa, which is 100,000's of people, have them wait to find out if they actually carry the virus and then proceed.  I don't think the handlers will allow that to happen.

Mon, 10/13/2014 - 21:06 | 5326933 ghengis86
ghengis86's picture

Mason-Dixon = My Maginot

Mon, 10/13/2014 - 20:53 | 5326872 NoDebt
NoDebt's picture

"it was only a matter of time before individual OPEC members would throw out the cartel’s agreements on prices and production, and just produce at full force and capacity, and then some."

I'm OK with that.  My Mad Max post-apocalypse car drinks a lot of juice.  Oh, the precious juice.  Only those mobile enough will survive.  And when I hit the button and engage the blower (which is pure Hollywood fiction- roots-style blowers are pulleyed directly to the crankshaft- no on/off switch) it'll pass just about anything but a gas station.

I just need a Dingo and a sawed-off double barrell and I'm ready.

 

Mon, 10/13/2014 - 21:10 | 5326948 El Vaquero
El Vaquero's picture

Not to mention that with those lobes not spinning around, the airflow really, really sucks.

Mon, 10/13/2014 - 22:54 | 5327330 NoDebt
NoDebt's picture

It does.  The engine WILL run, if you keep the RPMs up.  The airflow will spin the blower lobes (as opposed to the other way around).  Something I learned one dark night when my motor roached the blower belt.  But if you think it's going to run well, you'll be very disappointed.

 

Mon, 10/13/2014 - 22:21 | 5327217 TheReplacement
TheReplacement's picture

Actually there are electric "blowers" that you can use a switch to control. 

Mon, 10/13/2014 - 23:02 | 5327353 NoDebt
NoDebt's picture

Not a roots-style positive displacement blower.  Electric superchargers are based on centrifugal-style compressors (the compressor side of a turbocharger, basically).  The will flow air through them even when not spinning.

I know, I built one several years back.  Some wicked rare earth magnet motors running on a 48V DC battery system to spin the compressor wheel at the ~50K RPMs it takes to make any meaningful boost.  When not in use, the (four 12V) batteries were charged in parallel off the car's 12V alternator system.  When you hit the "go" button, relays connected them all in series to produce 48V to the drive motor.  Sort of like an on-demand nitrous system but one that that slowly self-recharged for the next hit. 

The whole thing royally sucked ass.  It takes a CRAPLOAD of electrical energy to equal the power you can make just looping a single belt off the cranshaft pulley to drive things mechanically.

Mon, 10/13/2014 - 23:09 | 5327368 TuPhat
TuPhat's picture

There are also electric clutches on pulleys.

Mon, 10/13/2014 - 22:34 | 5327258 TheInfoman
TheInfoman's picture

Nail guns work pretty good too. 

Mon, 10/13/2014 - 22:52 | 5327323 NoDebt
NoDebt's picture

I'm a big fan of nail guns.

Mon, 10/13/2014 - 23:10 | 5327373 Implied Violins
Implied Violins's picture

I tried clearing my history and doing internet searches for 'nail guns.' Now I have ads for Lowe's and Home Depot on my sidewalls...sans nail guns.

I want my Russian babes back.

Mon, 10/13/2014 - 23:27 | 5327437 NoDebt
NoDebt's picture

Surf some porn.  They'll come right back.

Ask me how I know.

Mon, 10/13/2014 - 20:52 | 5326873 Soul Glow
Soul Glow's picture

Peak oil.  Read about it.

Mon, 10/13/2014 - 20:57 | 5326897 Dr. Engali
Dr. Engali's picture

Seems to me that the producers are willing to give up precious oil for a lot less digital fiat these days.

Mon, 10/13/2014 - 21:33 | 5326961 ZerOhead
ZerOhead's picture

Less fiat now for more oilfields later

If you're sitting on piles of fiatscos just burning a hole in your bedsheets... or have access to the fiatsco printer that is

After the next election (or CIA backed coup) in Venezuela I'd bet you $50 they are going to have one hell of a firesale

Mon, 10/13/2014 - 21:39 | 5327064 Zhuge Liang
Zhuge Liang's picture

seems to me, this is all about alliances, not money.  a fight to the death now...  the Israeli bloc (US, EU, UK, Gulf puppets) vs. Russia, Syria, Iran, China or anyone else who may be a threat to the NWO...    the saudi 'royals' sold their souls a long time ago, now that should be plain for average arabs to see.

Mon, 10/13/2014 - 21:50 | 5327108 ZerOhead
ZerOhead's picture

It's an engineered takedown

There is simply no way that these players could not put together a plan to decrease output and keep prices high. Nope... no way.

Mon, 10/13/2014 - 22:24 | 5327227 TheReplacement
TheReplacement's picture

Do you really think China is not down with the NWO?  Their only concern, like a lot of others, is that they be the ones in control when the switch is thrown.  They play along and hedge behind the scenes.  They will be patient and make their move when they've already won. 

Others on your list do not have time on their side so they are pushing things.  The longer it takes the less likely they will be the winners.

Mon, 10/13/2014 - 23:11 | 5327375 TuPhat
TuPhat's picture

Russia and China are not a threat to the NWO.  They are a different branch of the same orginization.  What's a little squabble amongst freinds to see who gets to be in charge?

Mon, 10/13/2014 - 22:44 | 5327295 PT
PT's picture

I don't understand this paragraph:  "A generational clash can be avoided only by pampering the young, and that comes with a big surge in domestic demand for oil. And since for many young people there are no jobs, Saudi Arabia has no industries to speak of, there are many who follow the example of Saudi’s like Osama Bin Laden into extremism."

Extremism?  Have they not heard of EBT, TV and junkfood?  Is this related to no-one over there drinking?  Someone please explain it all to me.

Mon, 10/13/2014 - 20:51 | 5326875 madddmaxxx
madddmaxxx's picture

Other than that, things are great!

Mon, 10/13/2014 - 20:54 | 5326888 Cacete de Ouro
Cacete de Ouro's picture

How to break up OPEC in one easy step : stop the flow of gold to Saudi

Mon, 10/13/2014 - 21:07 | 5326938 ghengis86
ghengis86's picture

How to stop terrorism; stop the flow of blood to Saudi royal heads.

Mon, 10/13/2014 - 20:55 | 5326890 mrpxsytin
mrpxsytin's picture

Let's hope that they are merciful Gods.

Mon, 10/13/2014 - 21:07 | 5326934 NoDebt
NoDebt's picture

Mercy doesn't cover intentionally fucking everything up.

Mon, 10/13/2014 - 20:57 | 5326891 williambanzai7
williambanzai7's picture

And BTW, the Rockefellars have publicly announced they are exiting hydrocarbons.

Mon, 10/13/2014 - 21:00 | 5326906 Dr. Engali
Dr. Engali's picture

In a $100,000,000 charitable fund. I'm more interested in what the family wealth is doing.

Mon, 10/13/2014 - 21:33 | 5327050 falconflight
falconflight's picture

Spreading Socialist solidarity around the globe.

Mon, 10/13/2014 - 21:41 | 5327079 Yen Cross
Yen Cross's picture

 It's my understanding they've acquired a large [Windmill Farm] in Holland.

Mon, 10/13/2014 - 21:09 | 5326943 post turtle saver
post turtle saver's picture

what they really said was, "we've already unwound all our positions back at the June peak suckas, and everything that's happened or will happen since we choose to observe with amusement... we'll be back to buy it all off of you at pennies on the dollar when you're all done ripping each other's throats out racing to the bottom"

Mon, 10/13/2014 - 22:38 | 5327276 Wahooo
Wahooo's picture

That really s all this is, an opportunity to corner the market.

Tue, 10/14/2014 - 00:32 | 5327595 Kirk2NCC1701
Kirk2NCC1701's picture

They might do that if Fusion is panning out, reaching the Ignition point.

Then it's electric cars and fuel cells all the way, baby.

Mon, 10/13/2014 - 20:57 | 5326894 BurningFuld
BurningFuld's picture

Tangible assets Boys and Girls. Tangible assets.

Mon, 10/13/2014 - 21:01 | 5326915 espirit
espirit's picture

You got that right.

Mon, 10/13/2014 - 20:59 | 5326904 Dinero D. Profit
Dinero D. Profit's picture

Always expect the unexpected....

 

Grasshopper

Mon, 10/13/2014 - 22:35 | 5327261 Hobo Sapien
Hobo Sapien's picture

When you least expect it,... expect it.

 

 

Horshack

Tue, 10/14/2014 - 00:53 | 5327630 OldPhart
OldPhart's picture

Even when you expect it, you still step in it.

 

Horse Shit

Mon, 10/13/2014 - 21:07 | 5326910 walküre
walküre's picture

In other news... traveling on an airplane has never been safer. Terrorists are all fighting in Syria and would-be travelers with a flu or cold will postpone their trips in light of what has happened in Boston. Anyone with a flu can be pulled off a plane. No, thanks.

Great if you're healthy and hate getting sick on a flight after flu viruses have been spread through the system! That was my number one pet peeve when flying. Well, it's a toss up between the screaming baby and the sneezing idiot in front of me.

Lighten up! The fact that "Dallas patient zero" hasn't spread the disease to anyone who came into close contact with him is encouraging! (before he died and the hospital blew up the body to try and ressurect him)

Bottom line, do not resurrect patients who have violently died from Ebola!

That's just not in the protocol!

 

Tue, 10/14/2014 - 00:59 | 5327635 OldPhart
OldPhart's picture

Has it been 21 days already since he stepped off the plane?  How time flies!

Personally, I try to avoid the hassle of the TSA circus, the coghing, sneezing, farting, unwashed milling crowd (bad enough that I'm one of the worst) in front of the Security Theater just deosn't seem to healthy to me...plus what stops Timmy Terrorist from blowing themselves up in the teeming logjam?

I prefer to drive; I can smoke, stop and look around, take a leak on a tree, fart freely and eat food I made and stored in a cooler...and as long as I'm not too far either way from the speed limit I can consider myself reasonably clear of authoritarian figures.

Mon, 10/13/2014 - 21:00 | 5326911 besnook
besnook's picture

opec had some power in the early 70s. like all cartels, cheating members undermine their union and the cartel exists in name only. saudi arabia is still the market maker in an industry where price is the only thing. they still have the biggest spigot and the cheapest to extract oil.

Mon, 10/13/2014 - 21:08 | 5326941 Glass Seagull
Glass Seagull's picture

 

 

step 3 correction:  yank down the USD.  lower price plus lower invoice currency = doubly bad for OPEC. 

 

Just a friendly reminder.

Mon, 10/13/2014 - 21:11 | 5326955 q99x2
q99x2's picture

They are dumping because they have a major part to play in the end of the world. They are heathens and need as much money as they can get their murderous hands on. They knocked down the place that I used to be able to tell people was where King Kong stood and Q99X2 smoked a joint (before he was q99x2). Arrest Rumsfeld and Cheney for conspiracy with Bandar against the United States of America.

Mon, 10/13/2014 - 21:13 | 5326957 americanspirit
americanspirit's picture

Self-destructive last-days behavior on the part of old men who have nothing to lose. Unless the young people in these societies start putting grey heads on spikes the whole thing will come apart. Try living in waterless deserts without cash, assholes. Your ancestors knew how and they were just fine. Young Saudis no more know how to live in the middle of the sand than young Americans know how to hunt deer and find honey in caves.

Entropy is the principle at work here, and it is unstoppable. If entropy is too fancy a word try decay. I LOVE IT!

Tue, 10/14/2014 - 00:46 | 5327620 Yen Cross
Yen Cross's picture

 Fantastic comment.

 

Mon, 10/13/2014 - 21:13 | 5326960 flyonmywall
flyonmywall's picture

Maybe we'll see 99 cent regular again? What are the odds?

That would leave enough room in the average person's wallet for some spending, and might even cushion a small interest rate hike.

The sheeple need to be given the proper motivation to shop this coming holiday season.

Coincidence? I think not....

 

Mon, 10/13/2014 - 22:37 | 5327274 Wahooo
Wahooo's picture

The road, or abyss really, to 99 cent gasoline will leave the average person without a job to pay for the gas and the government too broke to buy it for them.

Tue, 10/14/2014 - 06:50 | 5327863 new game
new game's picture

but 2.50, a reasonable expectation and after 3.50 conditioning mericans will be back in the showrrom looking at behemuths again. da merican way. with sub prime financing leading(subsidized by zirp bank money creation) the way to next epic failure. please, please where do i sign for that 84 month 700/mo payment-i fucking want it now! suburban ltz with rolling internet and a million gizmos, including an ass scratcher...

Mon, 10/13/2014 - 21:12 | 5326964 delivered
delivered's picture

Might we actually see some free market capitalism at work (probably not but wishful thinking)? Could the price of oil finally be set by, god forbid, the laws of supply and demand (we can only hope)? But let's face it, when you get into an old fashion price war, three key concepts will greatly influence the outcome of this battle:

- First, who has the best and strongest customers (and relations with these customers) to ensure a steady sales pipeline (even if prices continue to decrease)?

- Second, who as the most efficient production facilities that can have the lowest direct variable costs (to pull the oil/gas out)?

- Third, who has leveraged up excessively and has to dedicate more and more production to servicing its debt load (both principal and interest)? Or in other words, who has the balance sheet to get through this mess?

The last point is an issue that is often overlooked as most people tend to focus just on the income statement when evaluating a business and don't thoroughly understand the importance of leverage and debt service requirements. I would pay close attention to fracking companies as while they may have political support on the sales front (to ensure a domestic supply of oil is produced), their variable production costs and debt service requirements are most likely much higher than some of the top dogs in the Middle East. 

Also, I might point out two other issues of importance. First, the misallocation of capital as driven by CB policy is partly to blame for the current situation in the oil markets. With extremely cheap if not outright free capital, businesses that are capital expenditure heavy (e.g., oil production companies, international sea shipping companies, etc.) have benefited greatly from the QE environment and have simply over invested in capacity. When the laws of supply and demand take hold (check the Baltic Index shipping prices recently), the resulting market adjustments can be painful for the weaker operations.

Second, the current environment is beginning to increase the risks of deflation even more as companies operating in all types of industrise attempt to drive operating income, not with prices, but with volume. Remember, once you have a sunk cost (drilling a well or building a ship), the key to surviving over the short-term is to be able to produce/sell to cover your variable costs first and your semi-variable costs second. So again, the biggest, strongest, and least leveraged up businesses will gain an upper hand in this battle which will eventually bury the weaker companies. 

The thing that is so interesting with oil is its importance on a global scale, in virtually every country and business in the world. It's macro level impact, both positive and negative, is something I'm not sure the markets can even begin to effectively price in as for every positive associated with sliding oil prices (e.g., cheaper gas for the consumer or lower costs for heavy industry helping to reduce expenses), a negative risk of equal or greater value is present (e.g., social unrest and collapse in emerging countries, bank failures with excessive exposure to the industry/commodity, etc.).

I think we are truly in uncharted waters now as great CB experiment which started with trying to safe the world's economy (let's say in 2007/2008) is moving on from stage one, getting as many parties addicted to QE as possible to stage two, now taking away the free junk from the addicts. What a ride this will be!

Mon, 10/13/2014 - 21:54 | 5327127 ZerOhead
ZerOhead's picture

Good points all.

There may be some bargains coming up soon...

Mon, 10/13/2014 - 22:28 | 5327250 Chipped ham
Chipped ham's picture

As or more insightful than the post. 

Tue, 10/14/2014 - 01:06 | 5327641 OldPhart
OldPhart's picture

National DT's (Delirium Tremens)...that could be entertaining...and infectious.

 

Tue, 10/14/2014 - 01:32 | 5327664 Things that go bump
Things that go bump's picture

I think I've seen this movie before. 

Tue, 10/14/2014 - 07:01 | 5327879 new game
new game's picture

the n d crack frack up boom, may just go ka boom. how many small tyme players are building out with leverage and are the next overleveraged target of the sound players at pennies on a dollar? since the whole thing was built on flow rates that are not even close to shareholder promisses, we have an epic failure right here in good ole merica. who then to carry the last baton left for the economy? reselling wall street toxic debt-subprime everything while incomes are not going up nominally, ha...

Mon, 10/13/2014 - 21:18 | 5326986 Rob Jones
Rob Jones's picture

I've no idea why oil prices are dropping. My only plan is to just enjoy it while it lasts.

It still isn't like the 90's. Sub $2.00 gas is still just a distant memory.

Mon, 10/13/2014 - 21:21 | 5327002 SillySalesmanQu...
SillySalesmanQuestion's picture

A pox on the oil and banks houses. The piper is coming soon and wants to be paid.
The few have lived off of the many for much too long... They will try to run, but they won't be able to hide from the wrath they have created.

Mon, 10/13/2014 - 21:29 | 5327041 falconflight
falconflight's picture

The ebb and flow of OPEC's leverage is nothing new.  Nor are the member's respective forays outside of supply and pricing quotas.  Remember that monopolies are illegal under US law, but the US Gov't has supported its acknowledged cartel leader (SA) since it tried to cripple the West in 1973.  The Saudi's production spikes are at the margins, not a tidal wave that can wash over the other members.  In the end, they'll all have to again debate and decide what is in the interests of their cartel which has served them collectively and individually quite well through the decades.  

Mon, 10/13/2014 - 21:31 | 5327042 techstrategy
techstrategy's picture

So far,  Russia and Putin have been ready for everything.   I wonder if they realize that they could likely replace Saudi Arabia as leader if OPEC and isolate the Saudis.  Everyone else wants high prices.   Saudi Arabia has very modest excess capacity (a few million barrels at most).  As such,  the remainder of the cartel could hold prices,  creating MASSIVE internal strife in the Kingdom add oil revenues crater there,  undermining the handouts used to maintain the oppressive state,  while other nations do better.  It would also like make the House of Saud a target if every islamic extremist group...

Mon, 10/13/2014 - 21:35 | 5327059 falconflight
falconflight's picture

If the House of Saud 'goes,' likely every monarchy on the Arabian Peninsula goes with it.  

Mon, 10/13/2014 - 21:54 | 5327131 techstrategy
techstrategy's picture

If I was Russia, I'd help extremists knock out the export terminals in SA.  That production wouldn't mean chyt in that case...  And oil prices around the world would skyrocket.   Don't want it to happen.   But,  cornering a nuclear armed country and trying to economically strangle it is flat out dangerous.   At least the oil terminal takeout would simultaneously decapitate the biggest funder of terrorists and restore geopolitical stability. 

Mon, 10/13/2014 - 22:18 | 5327208 GooseShtepping Moron
GooseShtepping Moron's picture

ISIS is already gunning for Saudi Arabian oil facilities. I don't think Russia would like to aid them in that—it is to nobody's benefit to have a world in such turmoil. But the geriatric regime in Saudi Arabia is only one heartbeat away from chaos as it stands. This latest gambit to pump every last drop of oil out of the desert at maximum warp is not exactly what you would call a long term strategy. Somebody is going for broke on this one, and pace the author of the OP it probably isn't Washington, D. C. If the Saudis flood the world with cheap oil it undercuts the basis for our own "shale miracle," and right at the very time when ZIRP is going away. This seems more like a Saudi ploy to lock in revenues, however I admit the whole thing is a bit hard to understand.

 

Mon, 10/13/2014 - 22:26 | 5327237 falconflight
falconflight's picture

It is very hard to simplify all the competing interests, some interests even among the same team are contridictory.  Such as the US might generically like lower oil costs, but that would mean less debt purchases by the world to fuel our out of control debt creating national gov't.

Mon, 10/13/2014 - 22:21 | 5327220 falconflight
falconflight's picture

Maybe it would aid geopolitical stability after an indeterminate period of chaos and war... well moar war, hotter war, which our ruling elites will engage us to our ultimate ruin.

Mon, 10/13/2014 - 22:17 | 5327198 Quaderratic Probing
Quaderratic Probing's picture

So Russia would cut production to raise prices?

Or just tell buyers we have more expensive come and get it.

Mon, 10/13/2014 - 21:46 | 5327095 eddiebe
eddiebe's picture

Best case scenario: TPTB are finally ready to sell us some alternative source of energy.

Tue, 10/14/2014 - 00:41 | 5327609 Kirk2NCC1701
Kirk2NCC1701's picture

FUSION?

If so, electricity and Fuel Cells are the place to be.

Mon, 10/13/2014 - 22:08 | 5327170 alexcojones
alexcojones's picture

No OPEC, no need to be in the ME, right?

No need to prop up Israel, Saudi Arabia, Kuwait, right?

No need to back barbarians, beheaders, Zios, ISIS, slimy potentates, right?

No need to waste $$$$ on people most of us despise....

That is DC and the ME OILy Garchs

Mon, 10/13/2014 - 22:31 | 5327253 holdbuysell
holdbuysell's picture

WTH is EKM1? This is his/her wheelhouse.

Tue, 10/14/2014 - 03:01 | 5327723 elegance
elegance's picture

He has a week of Twitter. He does post in comments occasionally. But he also subscribes to abiotic theory of oil. 

Mon, 10/13/2014 - 22:35 | 5327271 pitterrier
pitterrier's picture

In 6 minutes 50 Russian cruise missiles launched and everything changes.

Mon, 10/13/2014 - 22:50 | 5327312 New Survivalist
New Survivalist's picture

Maybe but who the fuck double-spaces?

Mon, 10/13/2014 - 22:52 | 5327318 Cheduba
Cheduba's picture

Why is it happening now?

Maybe central banks and COMEX are running out of physical gold to continue manipulation and physical gold exchanges opening up while oil starts to be sold in yuan?

Mon, 10/13/2014 - 23:53 | 5327410 Radical Marijuana
Radical Marijuana's picture

The conclusion to the article above was CORRECT:

"... they are the same people who built that world, profited from it to an insane degree, and want to use those profits to hang on to power in a world that will be dramatically different from the one they called the shots in. And that doesn’t bode well; it tells us violent clashes will be on the horizon."

However, as is totally typical on Zero Hedge, that underestimates and understates how bad things actually are! The DEEPER problems are the combination of the FACTS that there must necessarily be some death controls, and the actual death controls are done through the maximum possible deceits.

Many of the comments above high-jacked this thread to go off on the apparent tangent of the Ebola Epidemic, and I will too, because everything is interconnected, and petroleum is more interconnected an issue than any other in our current civilization.

Since the medical systems operate inside of the monetary systems, while the monetary systems operate inside of the military systems, the same basic methods of enforcing lies dominates medicine as they do everything else. Since REAL human ecology was fashioned by the history of warfare, in which success was based on deceits, and since medicine can not be rationally understood outside of the context of overall human ecology, our current medical systems are just as criminally insane as every other aspect of our kind of social pyramid system civilization.

The DEEPER problems are that the runaway triumphs of operating the combined money/murder systems through the maximum possible frauds and deceits, which drove the creation of the perverse Profit From Disease Systems, in which biomedical science ends up providing the illusions of rational arguments WHICH DELIBERATELY IGNORE BASIC HUMAN ECOLOGY CONSIDERATIONS, and that is the context in which the Ebola Epidemic is developing.

As always, the only genuinely better resolutions of chronic political problems would be better death controls, because some death controls must necessarily exist and be central to everything else. Those DO EXIST, but have developed as cultural systems of artificial selection whose successes were based on deceits, and therefore, whose controlled opposition adapted to operate inside of that frame of reference of deceits.

The DEEPER problem is that it is POLITICALLY IMPOSSIBLE to have any rational public debates about human ecology. Therefore, it is impossible to have any rational public debates about medical issues, because all of those are inside combined money/murder systems which are privatized frauds, backed by public force. Since society is controlled by systems of legalized lies, backed by legalized violence, all of the problems of crime, poverty and disease are on runaway exponential growth curves, the same as everything else, towards more wars, famines and plagues.

Since it is POLITICALLY IMPOSSIBLE to have any rational public discussions of the death controls systems which are the crux of the human ecology, as well as POLITICAL IMPOSSIBLE to debate anything else rationally regarding evolutionary ecologies in general, since the established systems and the controlled opposition are based on the long history of operating REAL death controls most successfully through the maximum possible deceits about those, one could barely be able to overestimate or overstate how serious that social situation IS!

That is why almost every article on Zero Hedge continues to grossly underestimate and understate the problems' actual MAGNITUDES. People are usually able to continue to presume that the murder systems somehow do not operate through the maximum possible deceits, in order to back up the monetary systems operating through the maximum possible frauds. Since most people are able to presume Hanlon's Razor, rather than face the facts, they are simultaneously able to avoid facing the FACT that there must be some death controls systems.

The vast majority of people deliberately do not want to understand the human murder systems, and especially do not want to face the facts that those MUST EXIST. Instead, the actual murder systems continue to be operated with the maximum possible malice, which is enabled by the ways that the vast majority of people deliberately do not want to understand that. In that context, we necessarily have the chain of events that deceitful murder systems back up fraudulent monetary systems, while that sustains criminally insane medical systems, which deliberately ignore the basic concepts of evolutionary ecology.

The vast majority of people were taught by systematic LIES BY OMISSION to not understand human ecology, as well as were conditioned to feel that they did not want to understand, therefore, the vast majority of people can not understand, because they do not want to understand, the combined money/murder systems, inside which operate the medical systems. Hence, the established monetary systems are debt slavery, that have driven its numbers to become debt insanities. That runaway debt insanity is on the way to provoking death insanities.

Inside that context, it is appears unreasonable to continue to presume that the threat of plagues is due to official incompetence and stupidity, rather than due to covert malice aforethought. That is why all these problems are WAY WORSE than anything typically presented in the public spaces as being an analysis of those situations. The long-standing triumphs of controlling civilization through backing up Huge Lies with Lots of Violence have created thoroughly established attitudes of evil deliberate ignorance towards basic human ecology, which therefore includes profound ignorance towards biomedical science and technology, due to the paradoxical ways that all the progress in biomedical knowledge continues to operate with massive deliberate blind spots towards the central death control systems, which DO EXIST and MUST EXIST. Most of what is now called "medical ethics" is based on deliberately ignoring basic human ecology. Actually, militarism, or the ideology of the murder systems, is the supreme ideology, and medicine necessarily operates inside that context, but naturally does so in ways which are consistent with the profound paradoxes that the most successful militarism was the most deceitful about its murder systems.

The human species is currently trapped within the vicious spirals which have developed due to the most socially successful murder systems being done through the maximum possible deceits. The basic theory regarding how and why that happened is NOT hard to understand, except because people feel that they do not want to understand. Since human evolutionary ecologies, and the political economies within that, developed in paradoxical ways, due to the oldest and best developed social science being warfare, whose success was based on deceits, there is no politically possible practical ways to begin to have any more rational debates about anything, and certainly, not about the single most important forms of death controls, which are diseases which can become epidemic plagues.

As the human species rapidly approaches Peak Everything, we are most of all approaching the times of Peak Insanities, which will primarily manifest as Death Insanities. That was always building at an exponential rate, since the social pyramid systems whose successes were based on backing up lies with violence began. Since our actual death controls are done through the maximum possible deceits, and all the publicly significant controlled opposition groups to those established systems also stay within that same profoundly deceitful frame of reference, the human species as a whole has become criminally insane, in the sense of psychotically detached from reality, due to the runaway social successes based on enforced frauds everywhere one looks, including within the areas of medicine.

The civilization that we are living inside now was built on the basis of industrial revolutions having a fresh planet to rape and plunder. The basic issues with petroleum resources are related to the significance of reaching the point of diminishing returns, while there are so far no credibly proven alternatives which could be sufficiently scaled up to replace that.

In that context, I find it quite easy to imagine that some of the ruling classes are deliberately allowing, if not creating, the conditions for epidemic plagues to seriously wipe things out, in ways which can be blamed on anything or anybody else than the ways that the ruling classes were controlling civilization through enforcing frauds, while making sure that the people who were being ruled over would be reduced to Zombie Sheeple that could not understand that, because they were conditioned to not want to understand.

Tue, 10/14/2014 - 01:15 | 5327640 Mediocritas
Mediocritas's picture

Recommend replacing "death controls" and "murder systems" with "selection". You've actually started doing this already:

Those DO EXIST, but have developed as cultural systems of artificial selection whose successes were based on deceits, and therefore, whose controlled opposition adapted to operate inside of that frame of reference of deceits.

A term like "death controls" is an RM creation and people, with their mental inertia, tend to resist changes in direction and tune out at new terms (an avoidable communication failure). The scientific term "selection" has the same meaning but throws up fewer roadblocks to comprehension.

I also prefer "selection" as it resolves an ongoing dispute I have with the use of "death controls" in that the latter downplays the power of (deceit laden!) sexual selection. Being selected against (sexually) can be a "death control" because complete denial is genetic death, indistinguishable from murder in its effect a few generations into the future, yet it does not actually require the act of murder, so is not linguistically compatible with "death controls" and "murder systems". Even this is an extreme view. Most sexual selection introduces allelic biases without requiring allelic death.

I also query the term "artificial selection" as it implies that what humans are doing is somehow unnatural, though I doubt you think we're doing anything but following our genetic drives.

Ability to command resources and dominate other males is an overwhelmingly attractive male trait in animals, as is ability to bear and raise offspring in females. For the visual learner: http://www.evilenglish.net/wp-content/uploads/2014/05/elitedaily_golddig...

A cognitive arms race has evolved across the animal kingdom between being able to fake it and being able to detect deception with the typical solution being to select upon things that can't be easily faked (that peacock tail needs a Boss).

Our brains operate under the influence of sexual selection, moreso, I contend, than straight up survival selection within any established society. The ultimate proof of status is to kill an opponent but this is typically NOT what happens intra-species (submission or flight are more common) so "death controls" and "murder systems", while real, are rare and extreme forms of selection. Our (out-group) "murder systems" are often little more than servants to relentless (in-group) status-seeking in the game of sexual selection. (Unless you're talking about inter-species relationships. Then yes, we're relentless killers).

In crude terms: banksters love pussy too and too much pussy loves money, hence we evolve into Homo economicus. The mechanics have been long sorted, what remains is study of forms: description of the human "peacock tail", which is as complex as our brains can make it, full of deception and aggression. This is what we aim to describe (and fail to change).

Tue, 10/14/2014 - 05:50 | 5327816 Radical Marijuana
Radical Marijuana's picture

Again, you are quite right and perceptive in your perspective, Mediocritas, particularly with respect to stating: "death controls" and "murder systems", while real, are rare and extreme forms of selection.

However, I have developed my own preferred use of the English in the direction I have despite that your views are technically more correct. I occasionally try to qualify what I am asserting by saying that "real death controls" are not the same as "true birth controls."

"Real death controls" are to say "no" to something, and back that up, while "true birth controls" are to say "yes" to something, and back that up.

Obviously, without life there would be no death. The true birth controls are more important over the longer term than the real death controls. However, AFTER one has life, then it is inherent to the existence of life that it comes as a package deal with chronic political problems, which are innate to the nature of life (mainly that it CAN reproduce, and NO environment can sustain the possible exponential growth of that reproduction.) Therefore, evolutionary ecologies develop to balance out the rates of "no" with the rates of "yes."

In ecosystems where different species fill the different niches of those systems, one can study that in more straightforward ways (or at least one could before genetic engineering made previously impossible things become possible.) However, in the case of human ecology, different cultural groups have developed to act like different species do, through their specialization of labour, within the overall human civilization systems. That makes an extremely hyper-complicated system, since it the predator/parasites and the productive/prey are still members of one species, and therefore, could interbreed.

That is like attempting to imagine an African savannah ecology, in which the lions can mate with the antelopes! For example, it is estimated that at least one quarter of the genome of so-called "black people" in North America are genetically "white people," because the masters interbred with the slaves so much. Of course, there was a wide variety of ways that different societies with slaves allowed or attempted to prevent that happening. Overall, that raises the basic issues that human beings have TWO information sources, their biological genes, and their cultural memes. The former travel through their biological bodies, while the later travel through their neural networks. Again, it is quite hyper-complicated how those work together!

Clearly, most of human history has been cultural evolution, and revolutions. Thus, the information flowing through people's brains has become relatively more important a distinguishing feature than that flowing through their genetic bodies. Of course, I do NOT posit any fundamental dichotomies between the flow of information through genes versus through memes. I regard as human systems of artificial selection as having been made and maintained by natural selection. It continues to be the case that nature is infinitely bigger than human beings. I tend to express the situation as being that natural selection was internalized as human intelligence, operating through artificial selection.

The industrial revolutions have been almost totally cultural events. A couple hundred years of the development of petroleum resources has done way more to change culture than change its basic biological basis! (While the diminishing returns from being able to produce more oil threatens to have equally profound consequences, which are gradually playing through.) Our problems have more become primarily cultural, or to be found in how we might be able to change our systems of artificial selection, than in the deeper levels of biological selection, which we are able to take relatively more for granted. In that context, we have become apes with atomic bombs, backing up electronic monkey money.

As you suggested, Mediocritas: "In crude terms: banksters love pussy too and too much pussy loves money, hence we evolve into Homo economicus."

But nevertheless, despite that you are correct, I shall personally continue to use the English language in the ways that have gradually developed to use it. Similarly, in the area of pot politics, I continue to use the word "marijuana" and "radical marijuana" despite the criticisms of those who say we should not use those pejorative terms, with their dubious history of having been promoted by propaganda. Hence, despite the facts that "radical marijuana" has similar cultural connotations to a phrase like "crazy nigga," I, and the other marijuana militants that I associate with, had deliberately decided to use that word, and that phrase, and continue to consciously do so.

I have had numerous argumentative discussions over the political symbolism of the word "marijuana," similar to those over the issues revolving around the use of the phrase "death controls," whose most extreme forms are murder systems. However, despite that I recognize a lot of validity in the various objections to that approach, I continue to be resolved to make use of the English language in the ways that I have gradually decided to do.

Tue, 10/14/2014 - 08:24 | 5328027 Mediocritas
Mediocritas's picture

Sure, I respect that choice. Don't agree with it though ;-)

My reason for recommending a change in delivery style (not content), is that I think the underlying messages being communicated here are important, therefore ensuring the communication occurs is a priority.

Hit 'em too hard with alien language and they abort the communication. I struggle with this myself in both delivering my own messages and understanding yours.

Definition of terms can't be skipped if terms are new. That means a lot of boilerplate text which obscures main points. It's ideal to refine this away over time like a poet spending days looking for the perfect word.

Short version: communication fidelity > language. If language impedes communication then language is wrong.

Tue, 10/14/2014 - 08:40 | 5328081 Ghordius
Ghordius's picture

agree, Mediocritas, and while I enjoy reading from Radical M, I actually disagree with one of his core tenets (the way I understand it)

fact: we had a Neolithic Revolution. fact: it led to the semi-to-full-sedentary village/city/fortress. fact: this eventually led to a difference between the policeman and the soldier

fact: the policeman and the soldier dislocated the (tribal) warrior. slowly and steadily, as a result of urbanization

and there it is: the warrior. plenty of archeological evidence that the hunter and the warrior were the same. in fact, in Papua New Guinea you can still visit some of them

which leads me to think Radical M. is trying to find a Garden of Eden without Snake, i.e. a Past without Violence. there, as amateur archeologist, I have to call out a loud "very unlikely"

Tue, 10/14/2014 - 09:23 | 5328132 Mediocritas
Mediocritas's picture

I hadn't interpreted him that way (I think he even focuses on the snake too much and overlooks our social nature)...helps make the point that clarification is needed due to language confusion.

My own view is that our behaviour is fundamentally tribal and mirrored in chimpanzees (though some of our societies appear more bonobo-like). Tribal behaviour is generally in-group social, out-group hostile, so group definition matters. The triumph of our political systems is that we are able to apply technology to amplify the perception of in-group. Our greatest failure is when that same technology is used to attack an equally enormous modern out-group.

I had two uncles that lived in PNG for decades, one an academic studying music throughout tribes, the other a teacher. It's fascinating to hear their stories. PNG highlands are about as close to default human as possible!

So I resonate with the PNG warrior = hunter view. RM probably does too, but he can speak for himself.

---

Also @ RM. I neglected to finish on a positive. I particularly liked this:

A couple hundred years of the development of petroleum resources has done way more to change culture than change its basic biological basis! ... we have become apes with atomic bombs, backing up electronic monkey money.

I also enjoyed the Dawkins-esque discussion of memes.

It made me think of this: http://en.m.wikipedia.org/wiki/Archimedes_Palimpsest

And an analogy:

When a computer loses power, whatever program state was remembered in RAM is lost. The original program is stored on magnetic disk, but the complex states it can take when running have to be reconstructed each time after loading.

When complex social states lose access to energy resources, storage media decays and knowledge is lost. We fall back to our basic (low-tech) program. (see PNG)

Tue, 10/14/2014 - 09:35 | 5328265 Ghordius
Ghordius's picture

I'd say that the triumph of our political systems was in the redefinition of a human being able to belong to more then one group at the same time, and a certain tolerance of groups to this

the regression from this theme is when someone says: "you are either with us or against us"

Tue, 10/14/2014 - 15:21 | 5329998 Mediocritas
Mediocritas's picture

24/7 sports coverage has a lot to do with it (I'm serious!). What better outlet for tribal tension with minimal harm to overall social cohesion? (Barring a few moments of extreme soccer hooliganism).

Revel in the Us vs Them passions that are hard-wired in the brain, down a few pints, then get back to it.

Offering people (especially men) myriad, small Us vs Them opportunities is a fine way to avoid mega-conflict, but it's not without cost. Our most distracted times can hardly be called our finest and while the many are busy fragmenting their identities, a more unified group is conquering it all.

This is leading into a deeper debate about the EU & euro, though we're a bit too indented (on an ipad here) to kick off.

Tue, 10/14/2014 - 15:19 | 5330043 Radical Marijuana
Radical Marijuana's picture

Ghordius:

Mediocritas' comments resonate more with my views than your comments. However, despite that, I continue to use the language that I use due to my longer term considerations of intellectual integrity, regardless of the short-term communication problems that presents.

Mon, 10/13/2014 - 23:29 | 5327442 earleflorida
earleflorida's picture

"Three Easy Steps?" is what it describes exactly,... a step-ladder whose only function is for changing the 'Light Bulb' in an attic where in every corner is but a different shade of clandestine`grey?

Step#1::    Stanley Fisher-> previous Governor of the 'Bank of Israel, and now Vice- Chairman of the Federal Reserve. Question? What happens if something happens to Janet Yellen,...[?]!

Step#2::  President Wilson nominates Brandeis to Supreme court Jan. 28, 1916 for supporting him in a difficult presidential election. British, Baron de` Rothschild's gets the Balfour Declaration handed to him on a silver Platter Nov.2,1917,  giving Israel to the Jew's since AD70. At the tyme it was 90% Arab Muslim and Christian with a few extra %'s of Coptic/ Druze inhabitants in the mix. Note: At the turn of the 20th c. 67% of all jews in the world lived in mother Russia. (*the Bolshevik Revolution 1917? [all Jews rebelling?])

Step#3::  Standard Oil is broken-up as a monopoly on May 15,1911 by the Supreme Court. Rockefeller now becomes the wealthiest man in the world with the break-up. He buys out all competition or what would be future competition, but does it legally (just changes the laws with moar ambiguity [its OK to laugh?])... having every president in his pocket since the break-up, including the supreme court.

Ref: The Wealthiest Man in the World? But, where does that put the Dutch`Rothschild's of France and England in the early 20th c. when after WWI the British and French Empire's were slowly rotting on the vine in the ME[?]... eventually losing India in 1947 post WWII that was a no-brainer for the failure of the League of Nations with a little moar than a decade to metastasize into a made-4-prime-tyme` Hitlerization. Rockefeller and the American's just let the Mesopotania Quagmire ferment and disintegrate what was left as the Rockefeller Family got the prize Saudi-Arabia from day one! Now, the Rockefeller's have their eye's on Shale-gas, and must nip-it-in-the-bud,... buying it up cheap as rhey go belly-up as they did during the great prohibitation?  Note2: Kennedy made out, also from Canada, via the British isles?      http://byronkho.com/blog/?tag=john-d-rockefeller-jr

again, a different route with smaller steps but weigh-moar linear?     jmo

Tue, 10/14/2014 - 03:54 | 5327742 css1971
css1971's picture

To get an idea of what the price of oil and production will do, look at whale oil prices and production at the end of the 19th century. Huge volatility; spikes in price as the resource hit its limits drove demand destruction which followed with production cuts, the lower prices allowed demand to rise again which led to large price spikes.

You have 2 wave forms here which are interfering with one another; production and demand.

Tue, 10/14/2014 - 05:57 | 5327829 Radical Marijuana
Radical Marijuana's picture

I repeat this link to the theory of Dragon Kings, regarding attempts at mathematically modeling how there are "wave forms which are interfering with one another."

http://www.ted.com/talks/didier_sornette_how_we_can_predict_the_next_financial_crisis

How we can predict the next financial crisis

Tue, 10/14/2014 - 06:57 | 5327871 Last of the Mid...
Last of the Middle Class's picture

Looks to me like they blew up themselves. Let them eat camel farts!

Tue, 10/14/2014 - 08:33 | 5328055 gcjohns1971
gcjohns1971's picture

This seems to be more realistic than the 'Conspiracy Against Russia' explanation.

Everyone in the world doesn't think about Russia.  They think about themselves.

So, what is the House of Saud thinking about?

* In the PetroDollar deal of 1973 the US was supposed to flatten or reduce production growth, and import more, in return for protection from the Soviets.  But there are no Soviets. Americans are aggressively expanding production and importing less.  Deal doesn't look so good any more.

* Peak Oil is here.  Have to get settled in a power chair before the music (production) stops.

* Europe is the crown-jewel for energy sales.  China looks like it will be the new crown-jewel.  Must secure contracts to be the dominant supplier NOW, and do what is possible to make competitor's lives difficult (civil unrest, ISIS, squeeze prices).

 

This story reflects a fracturing global political order, rather than the Grand Bi-Polar world that those who relate everything to Russia depict.

It really isn't all about Russia.  It is about emerging powers, re-emerging powers, and sclerotic incumbent powers all trying to feather their nests before the inevitable storm.

Tue, 10/14/2014 - 09:16 | 5328203 Toolshed
Toolshed's picture

"Why it happens now is a great question, which is impossible to answer."

Oh give me a effing break. The answer is quite obvious. The USA vermin and Saudi scum have come to an agreement. The Saudi shit bags lower the price of oil to hurt Russia and Iran and the USA slime dogs remove Assad. Is that so hard to see? Look at the US headlines today. Wow, what a surprise the US has found the "smoking gun" that will enable Assad to be charged with war crimes. What an unfunny joke.

http://news.yahoo.com/bashar-al-assad-s-syrian-torture-chambers-20532312...

That horsepoo story is ALMOST as credible as the one about Iran having mobile bio-terror labs. Almost. Expect an abundance of convincing youboob evidence from the US Dept. of Propaganda and the horse faced fuck nut.

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