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Crashing Crude Is "Unambiguously Bad" For These Americans
In Harrison County, Ohio, drilling company worker Rick Lucente sums up all that is wrong with the mainstream media's narrative (puppeting even The Fed's great thinkers) about what great news low oil prices are... while his monthly gas bill for his Chevy pickup truck has dropped, he admonishes, "That’s not going to replace a paycheck... and I don’t know why this is happening."
As The Wall Street Journal reports,
The collapse of oil prices in the past six months is threatening to end a recent industrial revival in manufacturing centers like this town of 64,000 people on the banks of Lake Erie.
The U.S. shale-drilling boom lifted Midwest manufacturing economies, enriched property owners with mineral rights and even brought back the fat blue-collar paychecks that once were harder to find.
But as drilling and exploration for new oil and gas slow with the drop in energy prices, cutbacks at heavy-industry companies are cropping up.
As the town's mayor explains...
The impact of the energy industry here is so widespread that for some workers in Lorain, oil prices affect almost every facet of their lives, from home values to roads to jobs.
“We thought this time the going was going to be good for a while,” said Chase Ritenauer, the town’s 30-year-old mayor. “But now Lorain is going to feel the impact of the global economy.”
As we reported yesterday, workers are being laid off and plants shut down...
“Yeah, I’m worried. You’d have to drive 50 miles to find another job like this one,” said Dana Smith, a 43-year-old father of four and technician at the U.S. Steel plant. “I’ll survive. I always do, but this will be hard.”
Mr. Smith, who said he makes $20 an hour, joined the mill 18 months ago, which could make him “probably be one of the first ones to go.”
And the pain will spread...
U.S. Steel’s pain will be shared. The plant gets its raw steel from another plant in Lorain, once owned by U.S. Steel and now controlled by Canton-based Republic Steel. If U.S. Steel shuts down here, business at Republic will dry up, too. Other suppliers and contractors who work with the plant also will suffer. Republic was unavailable for immediate comment.
In addition, a half-dozen new plants providing steel for the oil and gas industry have been built in the past five years from Ohio to Texas. Boosted by the energy industry, Ohio’s unemployment rate has fallen to 5%, the lowest in 13 years.
In nearby Youngstown, Ohio, Vallourec SA of France recently opened a $650 million plant able to produce 500,000 tons of steel a year. “We are looking at oil price trends very cautiously and closely monitoring our customer’s activity,” said Héloïse Rothenbühler, a spokeswoman for Vallourec. “The oil and gas sector is, by nature, cyclical, and we’ve adapted to similar cycles in the past,” she said.
In addition to new capacity, imports to the U.S. have surged, fueling a steel glut. Prices in the U.S. for benchmark hot-rolled coil have dropped 10% in the past four months, to $600 a ton. “It’s two steps forward, one step back,” said Lisa Goldenberg, president of Delaware Steel Co., a steel trading company. “Right now, it’s one step back.”
Simply put, the job loss mulitpliers are massively outweighing the gas (tax cut) gains... as Lorain's mayor sums up so well...
a U.S. Steel shutdown would hurt city finances. The company paid $1.8 million in taxes last year out of a total city budget of $30 million. A shutdown for even a quarter could cost the city $400,000, Mr. Ritenauer said. “That might not sound like a lot, but our city budgets are usually pretty tight.”
The lower oil prices will offer some modest savings. Lorain has around 100 police officers. “And it’s snowplowing season,” said Mr. Ritenauer. But the fuel bill for its snowplows is in the mere tens of thousands of dollars. Savings might be 30%. “We’d rather the plant stay open,” he said.
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Unless everyone starts to undersrtand that finacialization is the real problem and start executing the fucking paper-pushers, nothing will change, period.
Fuck em.
When financialization meets physics, there will be a clear winner. This is just the warmup.
This will continue until the public walks away from the FED's dollar and transactions and thinks in terms of real money. The paper dollar is what enables all these paper products
The chances of this happening are zero, so this game will continue.
"[A]nd I don’t know why this is happening."
Because, Poor Naive Rick, all commodity markets are rigged by Jews, and there are a lot of Jews who want to ring the register on the hundreds of billions in short positions they have in oil.
Let them, it may be useful to have an electronic record when it's time for retribution.
Why is this happening?
There you go, mystery solved...
Having grown up in La. and Texas, I have one thing to say to him. "Welcome to the oil bidness!"
This would not be an issue if recent US GDP growth had not been so heavily weighted to Energy. The US has become excessively weighted to primary extractive industry production, much like its third-world producers. Thank heaven for Holywood and Coke.
1. Slowing global economy = yes
lower demand = stop reading the funny papers! Demand is way up!
Slowing, not contracting.
So stop copying the cnbc headlines.
2. 1% overproduction isn’t normal to create a 50% crash
3. And us paper isn’t toxic?
Sam, your one of the very few that mentioned the SA and US deal to squeeze Russia. At the same time get the US back in to Syria so SA can have the gas line to provide gas etc to the EU. Kill all these birds with one stone. It's really sad to see the US leaderhip is such a bully. The greenie's don't want the pipeline or fracking in the US, problem solved, SA want's that pipeline to EU and US wants to snuff Putin. Whole world is a joke. NOT the people but all these idiots running the show
Not this Hebrew-baiting again.
Tylers, flush this crap off your site.
You overestimate the ability of supply lines to continue to deliver. History is very clear on this. You are right though, people will be starving and dying before they really accept that the FRN has been a scam (the "dollar" is already long dead).
Unfortunately, it does take a fair amount of energy and real resources simply to maintain the current status quo.
Tell that to the Military Industrial Cops when they show up
For dead in Ohio.
You are on a roll today
Banksters are evil, their actions always kill.
This is true. We don't have markets any longer. There is no mechanism for honest price discovery.
Everything in the global economy is controlled, manipulated and artificially managed by central banks and governments.
Instead of moving the world towards a fair and equitable form of global capitalism we allowed the wealthy and powerful to turn the world's economy into an immense game of Risk where those who have the power to grab a seat at the table will do anything to win, no matter how much harm and chaos it causes.
In the snapshot of the past 5 years, no we've been bereft of price discovery with this financial fuckery.
Reality eventually does catch up. Nobody predicted an oil crash last year. Now the "experts" are already trying to quantify and adjust projections. They have not a single clue where and what.
@ Binko - I can sum up your entire (good) post in one word: Jews
All Jews...or some Jews?
Of course the fact that some Muslims in Saudia Arabia have increased oil production has nothing to do with the crash in oil prices.
Codeword for Jews: "Walkers"
Bingo, Binko
Sorry, it must have been the Ukraine Finance Minister post, but I read that as "Facialization" at first.
Ha! Notice how all the media outlets (especially in finance) have tons of beautiful whores trying rel hard to sound intelligent?
We all know is just part of the bread and circuses.
Hey, don't disrespect Erin Ade like that... ok maybe she's not that smart... but she does interview people with brains at least...
DEATH TO THE MONEYCHANGERS.
"Unless everyone starts to undersrtand that finacialization is the real problem"
So true, but it all springs from the FedRes along with their violence-puppet, big criminal governmnet.
Guillotine the Fed, and dismantle criminal governmnet, and freedom and prosperity can be restored.
The banksters need to repay us.
Guillotine the Fed!
I sympathize with them.
They won't get any sympathy from most Americans who come into the gas station nightly and praise the lower prices not realizing that the oncoming freight train of deflation will impact within months.
Prepare and adapt
The first rule of economics is that all individuals act in their own best interests. Mises understood this better than anyone.
The first rule of... wait, sorry thought this was a Fight Club meme.
Actually it will, is, going to be a freight train of hyperinflation carrying a plane crash of a depression--Supernova-inflation
The dollar is being artificially pushed up as a weapon against Russia, and as a conduit for those in the know , the connected and Amongst, to bail to other fiats before the petrodollar collapses.
When the plug is pulled, or a black swan crash lands, the dollar will explode, while the DC US economy will implode--just like a supernova.
A typical hyperinflation has the "printers" feeding into the system ever more fiat. Eventually the economy collapses under the weight of the hyperinflation. The DC US has already "printed" the necessary fiat for hyperinflation, but most of it is overseas. When the jig is up, trillions will come flying back to the DC US, where it will be used to snap up any and everything not tied down. Simultaneously, most exporters will stop exporting to the DC US--who wants a dead currency?!. With a much diminished manufacturing capacity, the American people will find themselves without work, without means to purchase anything from overseas, and empty shelves at all stores.
Food producers will also export most of any and all crops for "hard currency," and therefore even food shelves will become barren.
Supernova-inflation is on its way.
The banksters need to repay us.
This is what it will look like.
“Yeah, I’m worried. You’d have to drive 50 miles to find another job like this one,” said Dana Smith, a 43-year-old father of four and technician at the U.S. Steel plant. “I’ll survive. I always do, but this will be hard.”
Dana, my friend, one day you will look back at today as the good ole days. Father of 4...get a vasectomy...fast.
I drive 38 miles each way to work
Having kids right now is a cruel act of insanity.
White people had better reproduce fast before we are subsumed by the FSA.
Too late.
No amount of fucking will be able to overcome the brown tsunami coming across the border.
Vasectomy's are a very low-technology option that has permanent ramifications. Better to use that method that's banned in the U.S. (thank you, feminist overlords) that is fully reversable with literally just an injection and just as effective as a vasectomy.
What? shooting street heroin and jacking off?
First google result: http://www.newmalecontraception.org/risug/
fuck that, I will cut off the path before I will fuck with my hormone levels.
people act like bitches enough as it is already, you want to make even more men act like bitches by adding hormone fuckage?
you're insane.
I understand the reasons why men get sterilized. But I get hung up on it.
Philosophical and religious views aside, humans have 2 undeniable drives at life - 1. Survive and 2. procreate.
Eliminating either of them is like denying your humanity.
It's a fucking vasectomy, NOT CASTRATION! LMFAO.....Here is a video I made when my son-in-law was getting his. lmao. Sure wish this movie making site hadn't gone Tits Up. It was fantastic....
https://www.youtube.com/watch?v=XZy8TFDdja8 Enjoy.
Someday he may wish he only had to drive 50 miles to a job like that.
Live by the FED boom, Die by the FED bust....
"Crashing Crude Is "Unambiguously Bad" For These Americans"
Yea well "crashing crude" is just fine with this American! Bring it on down! $20.00 sounds like a nice number.
The folks in the oil bidness will just have to do what the hell the rest of us did when oil over a $100.00 and gas was $4.00 plus...Fucking adjust!
$20 oil sounds to me like a guaranteed way to make sure the investment needed to insure future oil supplies will not be made. That means a supply/demand imbalance the other way and pinfully high fuel prices in a few years. Does no one get it that considerable investment is needed to overcome the decline curves on even the best of conventional production and there is no profit at 20-30 oil to reinvest? Highly leveraged paper trading of all commodities that causes excessive volatility is a problem that needs a solution.
I'm sure lots of these roughnecks bought lots of toys over the last 6 years. Should be able to pick up some good deals on used ATV's and jet skis. Their loss is my gain! BOOYEAH!!
Should be plenty of 12 mpg pickup trucks too
I like your style.
Long Craigslist for sale ads.
There's many that work, roughneck or blue collar jobs but end up making bank. White collar peons don't seem to realize it either and look down upon them.
They just spend gobs of money in different ways: fishing boats, hunting vacations, classic cars, $50k+ pickups, tattoos.
They may not own a single suit but think nothing of a new carhartt wordrobe costing just as much.
what is bad is not that it goes up or that it comes down; but that the up and the down is totally fake and makes the economy into a polluted financialized cake.
Greed and speculation are the secret sons of Ayn Rand and have nothing to do with the myth of John Galt, more to do with that of Gordon Gekko.
It's as crazy as Coke costing $1.50 one day, the next its $17, then a couple days later it's .50 cents......complete chaos.
If oil is $100 then a few months later can be $40, then there's no actual 'price' for it at all, just purely made up BS.
That's the saddest part - it's all made up BS to them, but we the ordinary people face very real suffering as a result.
When did Ayn Rand advocate a centrally planned economy manipulated by bankers and politicians? Greed exists in any form of government or economy. The destruction is caused by cheap credit created by the fed. Without ZIRP most of this speculation would not be able to exist. It wasn't the free market that pumped up the dotcom and housing bubble.
Putin getting ready to tap out and turn himself in to Owebama any minute now I'm sure.
The young and inexperienced always talk big, hell I did it myself...."I'll survive, I always do"...good luck with that one
Dana...dont expect any hot lovin from Mrs Smith for a while...
Maybe so, but you're still here aren't you, so am I and a lot of times I had doubts how I would make it.
Close the borders and don't let Washington D.C. in.
The problem that these poor slobs have is that the industry that they all claim to be a part of was a fraud from the onset. The CEOs of these companies are still flying around in their jets and their wives are still loving their seaweed wraps and new Land Rovers every 6 months.
I guess its time that these poor slobs join the rest of the country. Its unfortunate. However, there is a brightside:
Maybe we can now get to the root of the matter and do what must be done in our time vs our kid's time. You love your kids and your grandkids? Really? Prove it.
While at work last Sunday I was able to watch all the corporate jets line up on final approach to Arlington airport to go watch the Cowboys game. Pretty darn impressive I must say. Wonder how some of them are doing now that oil has collapsed.
Fucking Lions.
100 police ? I see a lot of savings in layoffs there...
Good thing they've got fema camps for everyone to go to.
Blame your government, don't blame the consumers.
Well, Rick. It turns out that John F. Kennedy was likely killed either to his opposition to the CIA and the folks behind them, or to his threat to the billions to be generated by gas and oil. His plan was in place to pursue nuclear fusion. Had we worked on it since then, by now we may have had it in use. President Lyndon Johnson scrapped those plans, and decided to destroy the black race in America. That was a success via the Great Society. You might still have had your job, bringing up oil from the ground for the US chemical and plastics industry, with stable prices which would not be jerked around by people overseas who basically hate us and will cover their own ass at the drop of a hat. For all the people you know who voted for Jimmy Carter, well, he's the guy who put the Department of Energy on the job to insure domestic production and end dependency on foreign oil. We can see how well that worked out. But don't blame the democrats or republicans, because you'd be wasting your time. Just blame all politicians. It's their nature.
It was hard enough to figure out the economy when it was run by supply and demand of and for stuff. Now that it's run by supply and demand of and for imaginary money it's impossible.
I'm still at a loss why people think shit like this will last forever?
Now granted if the US had different goals other than world hegemony perhaps things would be better. So far it appears ever grab the US tries to make has huge amounts of shit squirting out all sides. The beast has polluted the entire world.
You guys can file for UE like everyone else did.
I thought we were addicted to oil. Detox is a bitch! A cold blooded one.
When you're part of a worldwide market - and open to Labour cost arbitrage, as you should be, you can't pay the grunt Labour $20-$30 or $40/hour and remain competitive...
No worries Ohijo, we down here in the sunny South have your auto assembly jobs since you were too greedy to change the costly relationship between employee/employer.
We're more than happy to take the rest of what is left of your steel industry.
Anybody up for a brand new Boeing 787? Made South of the Mason-Dixon line...get 'em while they last!
Oh yeah, living standards in the poor ass american south is such a treat. I often compare it to Monaco.
Have fun when even wal-mart leaves your shithole towns because most of their shoppers are, in fact, too poor to shop there.
And have fun busting your ass on an assembly line for $14 an hour. You really showed those Northern States!
Buddy of mine started at BMW in '01, and over the course of his first year made over $70,000, plus bennies.
The UAW and the rest of the blood-sucking unions in manufacturing can go suck start a shotgun.
What, did he work about 70 hours a week for that 70k?
The only thing poor southern states have managed to do is undercut one of the areas that uneducated people who work hard actually can make a good living. This tactic, essentially crossing a picket line, used to be severely frowned upon in society. Not anymore, of course. Me, me, me.
Congrats. The execs in Munich and Seoul thank you for you selling out your fellow countrymen.
And can we please get off this bullshit about "lazy, bloodsucking, corrupt unions". What about the actual corporations. If you added up all the corruption in unions versus all the corruption in non union board rooms, which do you think would be higher? Blaming unions is like blaming poor people getting a mortgage causing the financial crisis. Give me break. Enjoy another 40 years of stagnant wages which (shocker) coincided with Big Business' war and subsequent destruction on unions since the 70's.
But, yes, focus on that image of a little guy doing little work for his "outrageous" $22 an hour with health care and not the exec golfing 5 days a week with a 7 figure bonus.
Again, enjoy the paragon of a great life in the 21st century in the south. Overworked, poor, uneducated, and unhealthy.
yeah, and the union guys made FUCK ALL sitting around bitching and moaning about how unfair life is 70 hours a week... get the picture?
Corporate "execs" don't make 7 figure bonuses. It is even a rare CEO that does.
"We're more than happy to take the rest of what is left of your steel industry."
*cough* Nucor... +1
Lorain and Youngstown are shitholes filled with crybaby union workers who got laid off from their cushy union jobs where they did almost nothing for 8 hours and got paid handsomely for it. A couple hundred people getting jobs rolling steel doesn't make up for the hundreds of thousands of jobs Ohio lost from offshoring. Whoo hoo a manufacturing renaissance emplying 1% of the people who used to work in the manufacturing sector.
It's like a guy losing
What happens when something gets blown out of proportion and pushed way beyond its natural price is people chasing bubbles. When oil was at $100 a barrel it was a massive bubble and thousands of people went chasing the big payday like rushing to buy tulip bulbs. The global economy doesn't function with oil at $100 a barrel. The past ten years have proven that beyond any doubt. You remove the bubble blowing stock market and what do you have? Record people out of the labor force, falling incomes, and record numbers of people on government assistance. Not what you would call a healthy economy.
If oil never jumped above $50 and stabilized at $45, you would have a ton of people still going after new oil finds because $45 a barrel would have represented double the price of what the commodity was trading at for almost 20 years. However the insanity and greed of the Wall Street cabal sent the price upwards of $140 because they were all chasing paper contracts after they were given a new product to speculate on.
Don't forget the Ford Mahwah assembly plant before they shut it down. A legend of FUBAR.
Just dropped another fifty billion in defense spending in "money we don't need."
That hits the steel business.
Still costs 13 billion for the ship though.
Wah wah wah. The hookers and blow industries in ND and Texas are taking a hit. Big deal.
For all the shrieking coming from the hard right wing, the average American benefits. So sad these schlumps hooked their fortunes to such an obvious flash in the pan. Maybe they will choose better jobs next time.
"I don't know why this is happening"
Because you're a stupid uneducated apathetic American who chooses not to learn about what's really happening in the world. Tough shit for you.
I'm pretty sure he knows that the Saudis have declared war on us, yes war. When he says "I don't understand", he means he doesn't unserstand why his country has rolled over like a compliant camel for yet another ass pounding by the liver eaters and why his commander in chief defers once again to his muslim brethren.
How come none of these feel bad stories were posted when gold and silver were slammed and many miners put out of business and many lost jobs.
Oil = good
Gold = bad
Welcome to the Oil and Gas Industry, i.e. BOOM bust BOOM bust, etc. etc. ad infinium and the morons dumb enough to ignore this pattern throughout modern history.
How else are they to man their ReadyReserve for use against the rest of the American people?!
The banksters need to repay us.
And way back when things got rolling in ND, they tried to limit the damage of the future bust by eliminating property taxes. That would have prevented a mushrooming of local and state government during the boom. They did not suceed however so they get to pay for bloated government on top of the cratering economy in the state. These boom bust cycles in commodities kick the snot out of working folks.
Those folks need to get a real job and learn to not depend on desecration of EARTH.
Dear Rick, welcome to the club, you been in high cotton since 08' unlike the rest of us.
If your going to show pictures of suffering business due to the collapse of oil prices, next time, try to pick one without a big pile of coal in the foreground would you?